SUPREME COURT REPORTS [2010] 12 S.C.R. ...

SUPREME COURT REPORTS [2010] 12 S.C.R.

STATE OF KARNATAKAv.

AZAD COACH BUILDERS PVT.LTD. & ANR.(Civil Appeal Nos. 5616-5617 of 2000 etc.)

SEPTEMBER 14, 2010

[S.H. KAPADIA,CJI., B. SUDERSHAN REDDY , K.S.PANICKER RADHAKRISHNAN, SURINDER SINGH

NIJJAR AND SWATANTER KUMAR, JJ.]

Central Sales Tax Act, 1956 – s. 5(3) r/w Article 286 ofthe Constitution – Exemption of tax on sale of goods aspenultimate sale in the course of export – Held: When thelocal sale or purchase between the parties is inextricablylinked with the export of the goods, then the claim forexemption u/s. 5(3) is justified – In such a case, the ‘SameGoods’ theory has no application – The connection betweenthe penultimate sale and export of goods should be real,intimate and inter-linked and not casual, accidental orfortuitous – The burden to establish such link is on theassessee – In the facts of the case, the assessee hasestablished that the transaction between the assessee and theexporter is inextricably connected with the export of the goods,and, as such, hence eligible for exemption u/s. 5(3) –Constitution of India, 1950 – Article 286.

The assessee was requested to build bus bodies, bythe exporter, in accordance with the specificationsprovided by the foreign buyer. The assessee was askedto fabricate bus bodies on the chassis supplied by theexporter, in accordance with the specifications. Theassessee, after manufacturing the bus bodies, mountedthe same on the chassis made available by the exporter,making it as a complete bus, ready for export. Theassessee claimed exemption on sale of the bus bodies.

The Assessing Authority rejected the claim on theground that the ‘bus bodies’ and the ‘buses’ were twodifferent commodities and the export was not of the ‘busbodies’ but that of the ‘buses’ and thus the transactioncould not amount to penultimate sale eligible forexemption u/s. 5(3) of Central Sales T ax Act. In appeal,the appellate authority upheld the levy of tax. Theappellate tribunal also upheld the levy. The High Courtheld that the assessee was eligible for the benefit ofexemption u/s. 5(3) of the Act.

In appeal, the Division Bench of Supreme Court feltthat the judgments passed by Supreme Court in SterlingFoods vs. State of Karnataka and Vijaylaxmi CashewCompany vs. Deputy Commercial Tax Officer cases neededfresh look in the light of the judgment in K.Gopinath Nairvs. State of Kerala and referred the matter to larger Bench.The larger Bench further placed the matter before theConstitution Bench.

Answering the reference and dismissing theappeals, the Court

HELD: 1. Article 286(1)(b) of the Constitution of Indiastates that no law of a State shall impose, or authorizethe imposition of sales tax on the sale or purchase of thegoods when such sale or purchase takes place in thecourse of export of goods. Article 286(2) authorizesParliament to formulate principles for determining whenthe sale is in the course of import/export. The sale orpurchase of goods is deemed to be in the course ofexport of goods out of the territory of India only if thesale or purchase either occasions such export or iseffected by a transfer of documents of title to the goodsafter the goods have crossed the customs frontiers ofIndia. Therefore, under Article 286(1) of the Constitution,the Court has to examine whether any tax is being

[2010] 12 S.C.R. 895

897 898

*Sterling Foods, A Partnership Firm represented by itsPartner ShriRamesh Dalpatram v. State of Karnataka andAnr. (1986) 3 SCC 469;**Vijayalaxmi Cashew Company andOrs. v. Deputy Commercial Tax Officer and Anr. (1996) 1SCC 468, held inapplicable.

3. On an analysis of the decisions of the SupremeCourt and in the light of the Statement of Objects andReasons of the Amending Act 103 of 1976 whereby s. 5(3)of the Central Sales T ax Act was added and on theinterpretation placed on Section 5(3) the followingprinciples emerge:

- To constitute a sale in the course of export,there must be an intention on the part of boththe buyer and the seller to export;

- There must be obligation to export, and theremust be an actual export.

- The obligation may arise by reason of astatute, the contract between the parties, orfrom mutual understanding or agreementbetween them, or even from the nature of thetransaction which links the sale to export.

- To occasion export, there must exist such abond between the contract of sale and theactual exportation, that each link is inextricablyconnected with the one immediately precedingit, without which a transaction sale cannot becalled a sale in the course of export of goodsout of the territory of India. [Para 23] [912-D-H;913-A]

4. The burden is entirely on the assessee to establishthe link in transactions relating to sale or purchase ofgoods and to establish that the penultimate sale is

imposed by the State Legislature on the sale or purchaseof goods “in the course of the import of the goods intoor export of the goods out of the territory of India”. Inorder to resist imposition of sales tax by the State, theassessee will have to establish the identity of the goodssold to be exported out of the territory of India. In orderto fulfill an export obligation, if an exporter purchasesgoods and as a result of some processing, the identityand character of the goods change, then it will not be acase of export of the same goods. [Para 18] [908-G-H;909-A-D]

2. The phrase ‘sale in the course of export’ comprisesin itself three essentials: (i) that there must be a sale: (ii)that the goods must actually be exported and (iii) that thesale must be a part and parcel of the export. The wordòccasion’ is used as a verb and means ‘to cause’ or ‘tobe the immediate cause of’. Therefore, the wordsòccasioning the export’ mean the factors, which wereimmediate cause of export. The words `to comply withthe agreement or order’ mean all transactions which areinextricably linked with the agreement or orderoccasioning that export. The expression ìn relation to’are words of comprehensiveness, which might both havea direct significance as well as an indirect significance,depending on the context in which it is used and they arenot words of restrictive content and ought not be soconstrued. Therefore, the test to be applied is, whetherthere is an inseverable link between the local sale orpurchase on export and if it is clear that the local sale orpurchase between the parties is inextricably linked withthe export of the goods, then a claim u/s. 5(3) forexemption from S tate Sales Tax is justified, in which case,the ‘same goods’ theory has no application as advocatedin the *Sertling Foods and **Vijaylaxmi Cashew Companycases. [Paras 24 and 25] [913-A-E]

STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD.

inextricably connected with the export of goods by theexporter to the foreign buyer, which in the instant case,the assessee has succeeded in establishing. [Para 27][914-C-D]

5. It is not correct to say that any penultimate salemade in furtherance of export, irrespective of the natureof the goods, would also be covered. It all depends onthe question as to whether the sale or purchase isinextricably connected with the export of goods and nota remote connection. The connection between thepenultimate sale and the export of goods should not becasual, accidental or fortuitous, but real, intimate andinter-linked, which depends upon the nature of theagreement the exporter has with the foreign buyer andthe local manufacturer, the integrated nature of thetransactions and the nexus between the penultimate saleand the export sale. In the facts and circumstances of theinstant case, the assessee has succeeded in satisfyingthese tests and hence, eligible for exemption under sub-section (3) of Section 5 of the CST Act. [Paras 28 and 29][914-D-H]

6. The facts of the instant case clearly reveal that thetransaction between the assessee and the exporter isinextricably connected with the export of the goods. Thecommunication between the foreign buyer and theexporter reveals that the foreign buyer wanted the busbodies to be manufactured by the assessee under thespecifications stipulated by the foreign buyer. The busbodies constructed and manufactured by the assesseecould not be of any use in the local market, but werespecifically manufactured to suit the specifications andrequirements of the foreign buyer. In the Purchase Orderplaced on the assessee by the exporter, it is specificallyindicated that the bus bodies have to be manufacturedin accordance with the specifications provided by the

foreign buyer, failure to do so might result in cancellationof the export order. The assessee, in the instant case, hassucceeded in showing that the sale of bus bodies haveoccasioned the export of goods. When the transactionbetween the assessee and the exporter and thetransaction between the exporter and foreign buyer areinextricably connected with each other, the ‘same goods’theory has no application. [Para 26] [913-F-H; 914-A-C]

K. Gopinathan Nair and Ors. v. State of Kerala (1997) 10SCC 1;Deputy Commissioner of Agricultural Income Taxand Sales Tax,Ernakulam v. Indian Explosives Ltd. (1985) 4SCC 119, upheld

Md. Serajuddin and Ors. v. State of Orissa (1975) 2 SCC47;Consolidated Coffee Ltd. and Anr. v. Coffee Board,Bangalore (1980) 3 SCC 358; Binani Brothers (P) Ltd. v.Union of India and Ors. (1974) 1 SCC 459; Satnam Overseas(Export) through its Partner and Ors. v. State of Haryana andAnr. (2003) 1 SCC 561; Coffee Board, Bangalore v. JointCommercial Tax Officer, Madras and Anr. (1969) 3 SCC 349– referred to.

Case Law Reference:

(1975) 2 SCC 47 Referred to. Para 2

(1986) 3 SCC 469 held inapplicable. Para 3

(1996) 1 SCC 468 held inapplicable. Para 4

(1997) 10 SCC 1 upheld. Para 5

899 900STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD.

901 902

(1985) 4 SCC 119 upheld. Para 21

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.5616-5617 of 2000.

From the Judgment and order dated 9.2.1999 of the HighCourt of Bombay at Nagpur in C.A. No. 1518 of 1998 and 1546to 1553 of 1998.

C.A. Nos. 6594-6598 of 2000.

Goolam E. Vahanvati, AG, Soli J. Sorabjee, Dhruv Mehta,S.K. Bagaria, P.S. Narasmha, Nishanth Patil, Mihir Chatterjee,Rohit Sharma, Nalla Jung, Sanjay R. Hegde, Ramesh K.Mishra, Kratin Joshi, Ramesh S. Jadhav, Vikrant Yadav,Abhishek Malviya, M.N. Shankargowda, E.C. Vidya Sagar,Nitin Meshram, Bramhjeet Mishra, Preetesh Kapoor, E.R.Kumar, N. Prasad, Nitya Bagaria, Sumit Goel, Rukmini Bobde(for Parekh & Co.,) Yashodhara Anand, R.K. Gautam and SarvaMitter (for Mitter and Mitter Co.) for the appearing parties.

The Judgment of the Court was delivered by

K. S. PANICKER RADHAKRISHNAN, J. 1. The questionthat falls for consideration in this case is whether an assessee(local manufacturer) is eligible to get exemption under sub-section (3) of Section 5 of the Central Sales Tax Act, 1956 (forshort ‘CST Act’), if the penultimate sale effected in favour ofthe exporter is inextricably connected with the export of goodsoutside the territory of India.

2. This Court in Md. Serajuddin & Others v. State ofOrissa (1975) 2 SCC 47, held that, under Article 286 of theConstitution, the sale which was not liable to tax under the StateSales Tax was only the actual sale by the exporter, but thebenefit of export sale did not extend to the penultimate sale tothe Indian exporter for the purpose of export. This led to the

insertion of sub-section (3) of Section 5 of the CST Act by theAmending Act 103 of 1976 with effect from 1.4.1976, wherebythe last sale or purchase occasioning the export of goods wasgranted exemption from the State levy.

3. The scope of the Amending Act later came up forconsideration before a Constitution Bench of this Court inConsolidated Coffee Ltd. & Another v. Coffee Board,Bangalore (1980) 3 SCC 358 and a contention was raised thatsub-section (3) of Section 5 of the CST Act was ultra viresArticle 286(2) of the Constitution of India and that theexpression “shall also be deemed to be in the course of suchexport” occurring in Section 5(3) was intended to convey thatthe penultimate sale shall also be regarded as being in thecourse of such export. The Court held that the aboveexpression intends to convey that the penultimate sale shall alsobe regarded as being in the course of such export and heldthat sub-section (3) of Section 5 is intra vires Article 286(2) ofthe Constitution. A three Judges Bench of this Court in SterlingFoods, A Partnership Firm represented by its Partner ShriRamesh Dalpatram v. State of Karnataka & Another (1986)3 SCC 469, also examined the scope of the above mentionedprovision. The question raised in that case was whether theassessee was entitled to exemption from tax under Section 5(3)of the CST Act in respect of purchase of shrimps, prawns andlobsters, the purchase being of the same commodities whichwere exported. The Court held that in order to attract sub-section (3) of Section 5 of the CST Act it is necessary that thegoods which are purchased by an assessee for the purposeof complying with the agreement or order for or in relation toexport, must be the same goods which are exported out of theterritory of India. The Court further held that the test which hasto be applied for the purpose of determining whether acommodity subjected to processing retains its originalcharacter and identity is as to whether the processedcommodity is regarded in the trade by those who deal in it as

STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD.

903 904STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD. [K.S. PANICKER RADHAKRISHNAN, J.]

distinct in identity from the original commodity or it is regarded,commercially and in the trade, the same as the originalcommodity.

4. In Vijayalaxmi Cashew Company & Others v. DeputyCommercial Tax Officer & Another (1996) 1 SCC 468, thequestion raised was whether the export of cashew kernelsobtained out of raw cashew nuts would amount to export ofthose goods which had been purchased. The Court held that,since the raw cashew nuts can be used for so many purposesand the process of extracting the kernels so elaborate, it cannotbe said that the goods (raw cashew nuts) purchased in thepenultimate sale were the same goods (cashew nut kernels)which were sold to the exporter. The Court, therefore, concludedthat cashew nut kernels are not the same goods as raw cashewnuts.

5. Sterling Foods (supra) and Vijayalaxmi CashewCompany (supra) were essentially advocating the “samegoods” theory of course in different fact situations. Later, in K.Gopinathan Nair & Others v. State of Kerala (1997) 10 SCC1, a three Judges Bench of this Court examined the questionwhether the purchase of African raw cashew nuts made by theassessees from the Cashew Corporation of India (for short‘CCI’) are in the course of import and, therefore immune fromliability to tax under Kerala General Sales Tax Act, 1963. In thatcase, on facts the Court found that there was no privitiy ofcontract between the local users on the one hand and theforeign exporter on the other and held that those twotransactions could not be said to be so integrally interconnectedas to represent one composite transaction in the course ofimport of raw cashew nuts. The Court held that those sales bythe CCI to the local users go out of the sweep of the exemptionprovisions engrafted by Section 5(2) of the CST Act, reasonbeing that there was no privity of contract between the localusers and the foreign exporters.

6. M/s Azad Coach Builders Pvt. Ltd., the assessee was

requested to build bus bodies, by the exporter, TataEngineering Locomotive Co. Ltd. in accordance with thespecifications provided by the foreign buyer, Lanka AshokLayland Ltd., Colombo. The specimen copy of the Purchaseorder dated 11.7.1988 placed on the assessee by the exporterrevealed that the assessee was asked to fabricate bus bodieson the chassis supplied by the exporter in accordance with thespecifications given by the foreign buyer. In one of thecommunications received from the foreign buyer it wasstipulated that the steel and aluminium panels of the bus bodiesbe built by the assessee since the customers in Sri Lankapreferred them. The assessee accordingly manufactured thebus bodies, in accordance with the specifications stipulated bythe foreign buyer and mounted the same on the chassis madeavailable by the exporter making it as a complete bus readyfor export.

7. The assessee claimed exemption on sales of busbodies as penultimate sales in the course of export made totheir customers like Telco Bombay and others which wasrejected by the Assessing Authority, treating the transactionsas interstate sales, on the ground that the ‘bus bodies’ and‘buses’ are two different commodities and the bus bodies assuch were not exported, but complete buses. The AssessingAuthority held that the transactions could not amount topenultimate sale eligible for exemption under sub-section (3)of Section 5 of CST Act.

8. Aggrieved by the assessment order dated 21.3.1995,the assessee approached the Joint Commissioner ofCommercial Taxes (Appeals), Bangalore Division underSection 20(5) of the Karnataka Sales Tax Act, 1957. Theappeal was rejected upholding the levy of tax by the AssessingAuthority on the ground that the goods exported was differentfrom the goods purchased and hence, the assessee was notentitled to exemption under Section 5(3) of the CST Act. Thematter was taken up in appeal before the Karnataka Appellate

Tribunal and the appeal was rejected vide order dated14.8.1996.

9. Feeling aggrieved by the order passed by the Tribunal,the assessee took up the matter before the Division Bench ofthe Karnatka High Court vide S.T.R.P. No. 4 of 1997. Afterexamining the agreement between the exporter and the foreignbuyer and also the order placed by the exporter on theassesseee, the High Court came to the conclusion that the busbodies supplied by the assessee to the exporters was in thecourse of exports and the words “in relation to such export”extended the scope of the exemption to the extent that even ifthere is no agreement or order but they are in relation to suchexports, the exemption could still be claimed under Section 5(3)of the CST Act. The High Court, therefore, allowed the RevisionPetition and held that the assessee is eligible for the benefitof exemption from tax under Section 5(3) of the CST Act.

10. Aggrieved by the order of the High Court, the State ofKarnataka has come up with these appeals. A Division Benchof this Court felt that the judgments of this Court in SterlingFoods (supra) and Vijayalaxmi Cashew Company (supra)need a fresh look in the light of a later judgment of this Court inK. Gopinathan Nair (supra) and hence the matter was referredto a larger Bench, the reference order is reported in (2006) 3SCC 338. The larger Bench then placed this matter before theConstitution Bench and hence the matter has been placedbefore us for consideration.

11. Mr. Sanjay Hegde, learned counsel appearing for theState of Karnataka submitted that the High Court has committeda grave error in holding that the assessee is entitled to theexemption under Section 5(3) of the CST Act. The learnedcounsel submitted that in order to attract Section 5(3) of theCST Act, it is necessary that the goods which are sold by theassessee for the purpose of complying with the agreement orexport order for or in relation to export, must be the samegoods which are exported out of the territory of India. The

learned counsel submitted that the words “those goods” inSection 5(3) of the CST Act are clearly referable to “any goods”mentioned in the preceding part of this sub-section. Thelearned counsel submitted that the goods supplied by theassessee and the goods actually exported by the dealer to theforeign buyer were not the bus bodies but buses itself, hence,the benefit of exemption under Section 5(3) of the CST Act isnot available to the assessee.

12. Learned counsel has, in support of his contentions,placed reliance on the Constitution Bench judgments of thisCourt in Sterling Foods (supra) and Vijayalaxmi (supra).Reference was also made to the judgments of this Court inConsolidated Coffee Company (supra), Md. Serajuddin(supra), Binani Brothers (P) Ltd. v. Union of India & Others(1974) 1 SCC 459, Satnam Overseas (Export) through itsPartner & Others v. State of Haryana & Another (2003) 1 SCC561 and Coffee Board, Bangalore v. Joint Commercial TaxOfficer, Madras & Another (1969) 3 SCC 349.

13. Mr. P. S. Narasimha, the learned senior counselappearing for Respondent No. 2 submitted that the exemptionunder taxation law will have to be purposefully and widelyconstrued. In that context, the learned senior counsel submittedthat, under Section 5(3) of the CST Act, those penultimate salesare also given exemptions, if such sale was for the purpose ofcomplying with the agreement or order for or in relation to suchexport. The learned senior counsel submitted that anypenultimate sale made in furtherance of an export order,irrespective of nature of the goods, would be covered and anyother construction would render the use of those words otiose.

14. Mr. Soli J. Sorabjee, learned senior counsel appearingfor the respondents submitted that Section 5(3) of the CST Actshould be given a purposive interpretation keeping in mind theStatement of Objects and Reasons of the Amendment Act 103of 1976. The learned senior counsel submitted that the onlyrequirement of Section 5(3) is that the goods sold to the

STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD. [K.S. PANICKER RADHAKRISHNAN, J.]

exporter should be exported as such without loss of identity andif that happens, the penultimate sale gets the benefit of Section5(3) of the CST Act.

15. Shri Goolam E. Vahanvati, learned Attorney General,assisting the Court submitted that if the penultimate sale isinextricably connected with the export of goods outside theterritory of India, then such a sale is eligible for exemption undersub-section (3) of Section 5 of the CST Act. The only pre-condition is that the exemption be linked to the penultimatesale, preceding the export.

16. Before examining the rival contentions of the parties,it would be appropriate to refer to the Statement of Objects andReasons of the Amending Act 103 of 1976 by which Section5(3) of the CST Act was added. The relevant portion of theStatement of Objects and Reasons reads as under:

“…..According to the Export Control Orders, exports ofcertain goods can be made only by specified agenciessuch as the State Trading Corporations. In other casesalso, manufacturers of goods, particularly in the small scaleand medium sectors, have to depend upon someexperienced export house for exporting the goods becausespecial expertise is needed for carrying on export trade.A sale of goods made to an export canalizing agency suchas the State Trading Corporation or to an export house toenable such agency or export house to export those goodsin compliance with an existing contract or order isinextricably connected with the export of the goods.Further, if such sales do not qualify as sales in the courseof export, they would be liable to States sales tax and therewould be a corresponding increase in the price of thegoods. This would make our exports uncompetitive in thefiercely competitive international markets. It is, therefore,proposed to amend, with effect from the beginning of thecurrent financial year, Section 5 of the Central Sales TaxAct to provide that the last sale or purchase of any goods

preceding the sale or purchase occasioning export ofthose goods out of the territory of India shall also bedeemed to be in the course of such export if such last saleor purchase took place after, and was for the purpose ofcomplying with, the agreement or order, for, or in relationto, such export.”

17. The relevant portions of Section 5 are also extractedhereunder for easy reference:

“5. When is a sale or purchase of goods said totake place in the course of import or export.- (1) Asale or purchase of goods shall be deemed to take placein the course of the export of the goods out of the territoryof India only if the sale or purchase either occasions suchexport or is effected by a transfer of documents of title tothe goods after the goods have crossed the customsfrontiers of India.

xxx xxx xxx

(3) Notwithstanding anything contained in sub-section(1), the last sale or purchase of any goods preceding thesale or purchase occasioning the export of those goodsout of the territory of India shall also be deemed to be inthe course of such export, if such last sale or purchase tookplace after, and was for the purpose of complying with, theagreement or order for or in relation to such export.

xxx xxx xxx

xxx xxx xxx”

18. Article 286(1)(b) of the Constitution of India states thatno law of a State shall impose, or authorize the imposition of athe sales tax on the sale or purchase of goods when such saleor purchase takes place in the course of export of goods.

907 908

909 910

Article 286(2) prohibits imposition of sales tax on import andexport by the State Government. Article 286(2) authorizes theParliament to formulate principles for determining when sale isin the course of import/export. The sale or purchase of goodsis deemed to be in the course of export of goods out of theterritory of India only if the sale or purchase either occasionssuch export or is effected by a transfer of documents of title tothe goods after the goods have crossed the customs frontiersof India. Therefore, under Article 286(1) of the Constitution, theCourt has to examine whether any tax is being imposed by theState Legislature on the sale or purchase of goods “in thecourse of the import of the goods into or export of the goodsout of the territory of India”. In order to resist imposition of salestax by the State, the assessee will have to establish the identityof the goods sold to be exported out of the territory of India. Inorder to fulfill an export obligation, if an exporter purchasesgoods and as a result of some processing the identity andcharacter of the goods change, then it will not be a case ofexport of the same goods.

19. In Sterling Foods (supra), this Court had advocatedthe “same goods” theory of course in a different situation. In thatcase, on facts the Court found no essential difference betweenraw shrimps, prawns and lobsters and processed or frozenshrimps, prawns and lobsters, especially when the dealer andthe consumer regarded both as shrimps, prawns and lobstersand that they continued to possess their original character andidentity as shrimps, prawns and lobsters, notwithstanding theremoval of heads and tails, peeling, deveining and cleaning. Itis in that context that this Court held that the processed or frozenshrimps, prawns and lobsters were not a new and distinctcommodity and they retained the same character and identityas the original shrimps, prawns and lobsters.

20. In Vijayalaxmi Cashew Company (supra), we havealready stated that the question was whether the purchase ofraw goods made by the appellants after which the cashew

kernels were extracted and exported to foreign countries couldbe subjected to the State Sales Tax Act. The Court elaboratelyexamined, in what manner the raw cashew nuts wereprocessed. After getting the detailed report from the High Courtas to how the edible kernels were extracted from raw cashewnuts and having examined minutely the whole process, the Courtcame to the conclusion that the kernels were not the samegoods as raw cashew nuts purchased by the dealers. What wasexported were the edible kernels and what was purchased forthe purpose of export were raw cashew nuts. The Court noticedthat since raw cashew nuts could be used for so manypurposes and the process of extracting the kernels soelaborate, it could not be said that the goods (raw cashew nuts)purchased in the penultimate sale were the same goods(cashew nut kernels) which were sold for export.

21. In this connection, it is useful to refer to the judgmentof this Court in Deputy Commissioner of Agricultural IncomeTax and Sales Tax, Ernakulam v. Indian Explosives Ltd.(1985) 4 SCC 119, wherein this Court was dealing with thequestion whether the respondent-assessee was concerned withsale transactions in the course of import of chemicals, dyes etc.The modus operandi of the assessee in that case was to theeffect that local purchasers used to place orders with therespondent quoting their Import Licence Numbers inaccordance with their pre-existing contracts with therespondent. The respondent then placed orders with the foreignsupplier for the supply of the goods and in such orders the nameof the local purchaser who required the goods as also itslicence numbers, were specified; the actual import was doneon the strength of two documents like (a) the Actual Users’Import Licence and (b) Letter of Authority issued by ChiefController of Imports and Exports whereunder the localpurchaser was authorized to permit the respondent-assesseeon his behalf to import the goods, to open letters of credit andmake remittance of foreign exchange against the said licenceto the extent of value specified therein. The Court held that there

STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD. [K.S. PANICKER RADHAKRISHNAN, J.]

export by foreign exporter and the receipt of the importedgoods in India by the local users and hence the integrity of theentire transaction got disrupted and substituted by twoindependent transactions, one between the canalizing agencyand the foreign exporter which made the canalizing agency theowner of the goods imported and the other between thecanalizing agency and the local users for whose benefit thegoods were imported by the canalizing agency. In such asituation, the Court held that the sale by the canalizing agencyto the local users would not be a sale in the course of importbut would be a sale because of or by import which would notbe covered by the exemption provision of Section 5(2) of theCentral Sales Tax Act. The Court further noticed that a sale orpurchase can be treated to be in the course of import if thereis a direct privity of contract between the Indian importer andthe foreign exporter and the intermediary through which suchimport is effected merely acts as an agent or a contractor forand on behalf of Indian importer.

23. When we analyze all these decisions in the light of theStatement of Objects and Reasons of the Amending Act 103of 1976 and on the interpretation placed on Section 5(3) of theCST Act, the following principles emerge:

To constitute a sale in the course of export there must bean intention on the part of both the buyer and the seller toexport;

There must be obligation to export, and there must be anactual export.

The obligation may arise by reason of statute, contractbetween the parties, or from mutual understanding oragreement between them, or even from the nature of thetransaction which links the sale to export.

To occasion export there must exist such a bond betweenthe contract of sale and the actual exportation, that each

was an integral connection between the sale to the localpurchaser and the actual import of the goods from the foreignsupplier. The movement of goods from foreign country likeUnited States to India was in pursuance of the conditions of thepre-existing contract of sale between the respondent-assesseeand the local purchaser. It was noticed that the import of thegoods by the respondent assessee was for and on behalf ofthe local purchaser and the respondent-assessee could not,without committing a breach of the contract, divert the goodsso imported for any other purpose. The Court, therefore,concluded that in order that the sale should be one in the courseof import it must occasion the import and to occasion theimport there must be integral connection or inextricable linkbetween the first sale following the import and the actual importprovided by an obligation to import arising from statute, contractor mutual understanding or nature of the transaction which linksthe sale to import which cannot, without committing a breachof statute or contract or mutual understanding, be snapped.

22. Now, let us refer to the Constitution Bench judgmentof this Court in K. Gopinath Nair (supra) on which strongreliance was placed in the order of reference. The questionraised was whether the purchase of African raw cashew nutsmade by the assessees from CCI was in the course of importand, therefore immune from liability to tax under Kerala GeneralSales Tax Act, 1963. The Court rejected that contentionobserving that there was no direct and inseverable link betweenthe transaction of sale and the import of goods on account ofthe nature of the understanding between the parties as also byreason of the canalizing scheme pertaining to the import ofcashew nuts. In that case, the Court was mainly concerned withthe interpretation of sub-section (2) of Section 5 of the CST Act.In the facts and circumstances of that case, the Court observedthat the transactions between the foreign exporter and the localusers in India got transmitted through an independent canalizingimport agency which entered into back to back contracts andthere was no direct linkage or causal connection between the

specifications and requirements of the foreign buyer. In thePurchase Order placed on the assessee by the exporter, it isspecifically indicated that the bus bodies have to bemanufactured in accordance with the specifications providedby the foreign buyer, failure to do so might result in cancellationof the export order. The assessee in this case has succeededin showing that the sale of bus bodies have occasioned theexport of goods. When the transaction between the assesseeand the exporter and the transaction between the exporter andforeign buyer are inextricably connected with each other, in ourview, the ‘same goods’ theory has no application.

27. We may also indicate that the burden is entirely on theassessee to establish the link in transactions relating to saleor purchase of goods and to establish that the penultimate saleis inextricably connected with the export of goods by theexporter to the foreign buyer, which in this case the assesseehas succeeded in establishing.

28. Mr. T. S. Narasimha, learned counsel appearing forRespondent No. 2 contended that any penultimate sale madein furtherance of export, irrespective of the nature of the goods,would also be covered, is too tall a proposition to be accepted.It all depends on the question as to whether the sale or purchaseis inextricably connected with the export of goods and not aremote connection as tried to be projected by the counsel. Theconnection between the penultimate sale and the export ofgoods should not be casual, accidental or fortuitous, but real,intimate and inter linked, which depends upon the nature of theagreement the exporter has with the foreign buyer and the localmanufacturer, the integrated nature of the transactions and thenexus between the penultimate sale and the export sale.

29. In the facts and circumstances of this case, we aresatisfied that the assessee has succeeded in satisfying thosetests and hence, eligible for exemption under sub-section (3)of Section 5 of the CST Act.

link is inextricably connected with the one immediatelypreceding it, without which a transaction sale cannot becalled a sale in the course of export of goods out of theterritory of India.

24. The phrase ‘sale in the course of export’ comprises initself three essentials: (i) that there must be a sale: (ii) thatgoods must actually be exported and (iii) that the sale must bea part and parcel of the export. The word ‘occasion’ is usedas a verb and means ‘to cause’ or ‘to be the immediate causeof’. Therefore, the words ‘occasioning the export’ mean thefactors, which were immediate cause of export. The words ‘tocomply with the agreement or order’ mean all transactions whichare inextricably linked with the agreement or order occasioningthat export. The expression ‘in relation to’ are words ofcomprehensiveness, which might both have a directsignificance as well as an indirect significance, depending onthe context in which it is used and they are not words ofrestrictive content and ought not be so construed.

25. Therefore, the test to be applied is, whether there isan in-severable link between the local sale or purchase onexport and if it is clear that the local sale or purchase betweenthe parties is inextricably linked with the export of the goods,then a claim under Section 5(3) for exemption from State SalesTax is justified, in which case, the same goods theory has noapplication.

26. The facts of this case clearly reveal that the transactionbetween the assessee and the exporter is inextricablyconnected with the export of the goods to Sri Lanka. Thecommunication between the foreign buyer and the exporterreveals that the foreign buyer wanted the bus bodies to bemanufactured by the assessee under the specificationsstipulated by the foreign buyer. The bus bodies constructed andmanufactured by the assessee could not be of any use in thelocal market, but were specifically manufactured to suit the

915STATE OF KARNATAKA v. AZAD COACH BUILDERSPVT.LTD. [K.S. PANICKER RADHAKRISHNAN, J.]

CHARUTAR AROGYA MANDALv.

STATE OF GUJARAT & ANR.(Civil Appeal No. 8077 of 2010)

SEPTEMBER 15, 2010

[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.]

GUJARAT PROFESSIONL MEDICAL EDUCATIONALCOURSES (REGULATION OF ADMISSION ANDPAYMENT OF FEES) RULES, 2009:

Medical Admissions – Admission to MBBS Course –Management quota – Rules providing to fill up all 10%management seats by Consortium – College filing a writpetition with a prayer that it be allowed to fill up themanagement seats under a charitable scheme foreconomically disadvantaged students for a token annual feeof Rs. 5000/- - Refusal by High Court to consider thepetitioner’s case on merits, and direction to the petitioner tofollow the procedure laid down under the Act and the rules —Held: The entire object of constituting committees forregulating the admission procedures and determining the feestructure in regard to unaided colleges is to ensure that theydo not indulge in profiteering or capitation fee – If any college,out of charitable or philanthropic motive, wants to extend ahelping hand to economically weaker sections of the studentcommunity by providing a scheme for free admission to theten per cent management quota seats, there is no need forthe Fee Regulatory Committee to determine and fix the ‘fees’chargeable by the college for such free management seats– Nor will it be necessary for such a college (which wants toadmit economically backward students without any fee or atoken fee) to be a part of consortium of unaided colleges whichwant to charge fees – The provisions of the Act and the Rulesare intended to prevent profiteering or charging capitation fee,

30. We, therefore, find no error in the decision renderedby the High Court in declaring that the assessee is entitled toexemption under Section 5(3) of the CST Act. The Referenceis accordingly answered and the appeals stand dismissed. Inthe facts and circumstances of the case, there will be no orderas to costs.

K.K.T. Appeals dismissed.

[2010] 12 S.C.R. 916

and not to prevent or discourage any charitable effort by anycollege to encourage or provide free education foreconomically weaker section – The High Court ought to haveconsidered the request of the college on merits, with referenceto the provisions of the Act and the Rules, especially as theissue will arise every year and may arise with reference toother colleges also – Order of the High Court is set aside andthe matter remanded to it for consideration and expeditiousdisposal of the writ petition on merits, in the light of theobservations made in the instant order – Insofar as theadmissions for academic year 2010-2011 for themanagement seats are concerned, the petitioner college ispermitted to follow the same procedure as it adopted for 2008-2009 to make admissions subject to the change in regard toClause (3) in the Agreement/Bond referred to in the instantorder – Gujarat Professional Medical Educational Collegesor Institutions (Regulation of Admission and Fixation of Fees)Act, 2007 – s.10.

TMA Pai Foundation v. State of Karnataka 2002 (3) Suppl. SCR 587 = 2002(8) SCC 481, Islamic Academy ofEducation v. State of Karnataka 2003 (2) Suppl. SCR 474=2003(6) SCC 697, P.A. Inamdar v. State of Maharashtra2005 (2) Suppl. SCR 603 = 2005 (6) SCC 537 – referredto.

Case Law Reference:

2002 (3) Suppl. SCR 587 referred to para 8

CIVIL APPELLATE JURISDICTION : Civil Appeal No.8077 of 2003.

From the Judgment & Order dated 09.08.2010 of the HighCourt of Gujarat at Ahmadabad in Special Civil Application No.7570 of 2009.

D.V. Vishwanathan, Dhval Dave, Nikhil Goel, Naveen Goel,A. Venayagam Balan for the Appellant.

Shyam Divan, Hemantika Wahi, Jesal, Gaurav Goel,Garima, Parshad for the Respondents.

R.V.RAVEENDRAN, J. 1. Leave granted. Heard.

2. The appellant Society runs Pramukh Swami MedicalCollege in the State of Gujarat, which is an unaided college witha sanctioned intake of 100 students for MBBS Course. As perthe provisions of the Gujarat Professional Medical EducationalColleges or Institutions (Regulation of Admission and Fixationof Fees) Act, 2007 (‘Act’ for short), 75% of the sanctioned seatsin unaided colleges are ‘Government Seats’ and remaining25% are ‘management seats’. The 25% management quotahas two components — 15% earmarked as NRI seats and 10%as management seats. In this appeal, we are concerned withthe filling of the ten percent management seats. The Actrequires the said ten percent management seats to be filledby the college management on the basis of inter-se merit listof students to be admitted against the management seats. TheGujarat Professional Medical Educational Courses (Regulationof Admission and Payment of Fees) Rules, 2009 (‘Rules’ forshort) require all the ten percent management seats in all theunaided colleges to be filled by a Consortium (that is, anAssociation of Unaided Colleges/Institutions formed to facilitateadmission to management seats) by adopting a single windowsystem on the basis of inter se merit list of candidates whosenames appear in the merit list prepared by the AdmissionCommittee.

3. The appellant decided to allot all its ten percentmanagement seats to deserving meritorious poor students whocannot pursue MBBS Course due to financial constraints. Ittherefore formulated a scheme for admission of meritoriouseconomically weaker section students whose annual family

CHARUTAR AROGYA MANDAL v. STATE OFGUJARAT & ANR.

917 918

919 920

through the State Admission Committee. Therefore, theappellant filed a writ petition (SCA 7570 of 2009) seeking adirection to respondents to permit the management seats in itsmedical college to be filled by following its Scheme followedby it during the academic year 2008-2009. The appellant alsosought cancellation and withdrawal of the communicationsrequiring the appellant to join the Consortium of unaidedcolleges for filling up of the management seats. By interim orderdated 4.8.2009, the High Court directed that for 2009-2010admissions, the State Government may permit the college tofollow the procedure followed in 2008-2009, subject to theadmission list being finalized with the approval of the AdmissionCommittee.

5. The High Court disposed of the said writ petition byorder dated 9.8.2010, with the following directions, withoutconsidering the various contentions raised by the appellant onmerits :

“In the facts and circumstances, instead of giving anyfinding on merit and to ensure that admissions are madein accordance with Rules in future, particularly 10% seatsof management quota, the following order is passed :

(i) The State Government will constitute a “Consortium”within one week to ensure admissions in the academicsession 2010-2011. The “Consortium” will complete allformalities and forward names of the candidates againstmanagement quota to different Professional MedicalEducational Colleges and Institutions by 31st August,2010.

(ii) If the State Government fails to constitute “Consortium”by 16th August, 2010 and fails to notify any advertisementby 17th August, 2010, the petitioner Trust may proceed byfollowing procedure laid down under the Act and Rules forselection of candidates. Selection should be confined

income was not more than Rs.2 lakhs, and who had secured aminimum of 80% marks (or 75% marks as decided by theappellant) in the 12th standard Examination in Science Streamand the Gujarat Common Entrance Test (GUJCET). Theadmissions would be strictly in the order of inter se merit. Theselected students are required to pay only a token fee ofRs.5,000/- per annum (as against the normal fee of Rs. fourlakhs for management seats fixed by the Fee RegulatoryCommittee). The balance tuition fee of Rs.3.95 lakhs is givenas a ‘scholarship’, either by the college and/or any philanthropicorganization. The students so admitted will be provided freeboarding and lodging, free selected books, free dissection setsetc. The students admitted under the scheme will have to givean undertaking that he/she would render remunerated servicesin rural area for at least three years from the date he/shegraduates. The admissions under the said scheme will besubjected to a four level scrutiny including a personal surprisevisit to the house of the aspiring student to confirm the annualincome of the family of the appellant and to ensure thebonafides of the applicants. The appellant-college adopted andimplemented the said scheme of admissions for filling up tenpercent management seats for the academic year 2008-2009.

4. Out of the six unaided colleges in the State, only theappellant has such a charitable scheme for economicallydisadvantaged students. The other five colleges allotmanagement seats on regular fee basis and are not interestedin such free admission schemes. As it was not possible for theappellant’s college to be a part of any Consortium orAssociation for making admissions to the management seats,appellant requested the respondents to permit its college toadmit meritorious economically disadvantaged students, byadopting its own admission procedure under its scheme. Butby letters dated 2.7.2009, 14.7.2009 and 15.7.2009, theAdmission Committee insisted that all unaided MedicalColleges should either form a Consortium for makingadmissions to management seats or should make admissions

CHARUTAR AROGYA MANDAL v. STATE OFGUJARAT & ANR. [R.V. RAVEENDRAN, J.]

921 922

the Act relates to the powers of the Fee Regulatory Committee.Sub-section (1) thereof provides that the Fee RegulatoryCommittee constituted by the State Government shall determinethe fee structure for admission of students in professionalcourses; and that the Committee may determine different feestructures for admission of students in different professionalcourses for different professional colleges/ institutions. Sub-section (3) provides that the fee structure determined by theFee Regulatory Committee shall be binding on the unaidedprofessional educational colleges/institutions for a period ofthree years; and the fee determined by the Committee madeapplicable to a student who is admitted to a professionaleducational college/institution, in a particular academic year,shall be continued for the entire period of the course and shallnot be revised till the completion of his professional course.Sub-section (4) bars the unaided professional colleges/institutions from charging or collecting any fee other than thefee determined by the Committee under sub-section (1).Section 11 enumerates the factors to be considered indetermining the fees to be charged, which included the locationof the professional college, nature of professional course,available infrastructure, expenditure on administration andmaintenance, reasonable surplus required for the growth anddevelopment. Section 12 prohibits charging or collection ofcapitation fee by any Unaided Professional EducationalCollege/Institution.

8. In T.M.A. Pai Foundation v. State of Karnataka - 2002(8) SCC 481, this court declared that every institution is freeto devise its own fee structure subject to the limitations thatthere can be no capitation fee or profiteering, directly orindirectly. This court also clarified that charging of fees in amanner that a reasonable surplus is left to meet the cost ofexpansion and augmentation of facilitates, would not amountto profiteering. In Islamic Academy of Education v. State ofKarnataka – 2003 (6) SCC 697, this court directed the stategovernments to set up two committees — one to regulate

amongst the students who have applied pursuant to anadvertisement issued by the petitioner Trust.

(iii) The management of different Professional MedicalEducational Colleges and Institutions will constitute“Consortium” for the selection, or the subsequentacademic session 2011-12 onwards, “Consortium” mustbe constituted by 30th September, 2010 failing which theState Government will call management and will ensureconstitution of “Consortium” by 30th October, 2010 onwhose recommendation, Professional Medical Collegesand Institutions will fill up management quota for thesession 2011-12 onwards.”

6. Aggrieved by the refusal of the High Court to considerits contentions on merits, the appellant has challenged thedecision of the High Court in this appeal. It contends that asno other unaided college is willing to give its seats free (or fora token annual fee of Rs.5000/-) to economically disadvantagedstudents, it is not able to join the other unaided colleges to forma consortium for making admissions to management seats.The respondents contend that permitting a single college tohave its admission procedure would be opposed to theScheme of the Act which contemplates admissions onlythrough the State Admission Committee or through aConsortium. It is submitted that if the appellant is not willing tojoin the Consortium, it should make admissions through theState admission Committee.

7. We may refer briefly to the relevant provisions of the Act.Section 3 provides that all admissions to Professional MedicalCourses should be made in accordance with the provisions ofthe Act and any admission made in contravention of theprovisions of the Act shall be invalid. Section 4 provides thatthe Admission Committee shall guide, supervise and controlthe entire process of admission of students to the professionaleducational colleges. Section 5 authorises the AdmissionCommittee to prepare the merit list of students. Section 10 of

CHARUTAR AROGYA MANDAL v. STATE OFGUJARAT & ANR. [R.V. RAVEENDRAN, J.]

923 924CHARUTAR AROGYA MANDAL v. STATE OFGUJARAT & ANR. [R.V. RAVEENDRAN, J.]

found to have exceeded its powers by unduly interferingin the administrative and financial matters of the unaidedprivate professional institutions, the decision of theCommittee being quasi-judicial in nature, would always besubject to judicial review.”

The entire object of constituting Committees for regulating theadmission procedures and determining the fee structure inregard to unaided colleges is to ensure that the colleges donot indulge in profiteering or capitation fee.

9. If any college, out of charitable or philanthropic motive,wants to extend a helping-hand to the economically weakersections of the student community by providing a scheme forfree admission to the ten percent management quota seats,there is no need for the Fee Regulatory Committee to determineand fix the ‘fees’ chargeable by the college for such freemanagement seats. Nor will it be necessary for such a college(which wants to admit economically backward students withoutany fee or a token fee) to be a part of a Consortium of unaidedcolleges which want to charge fees.

10. If other unaided colleges are willing to have such a freeadmission scheme for meritorious poor, then there will be aneed for a Consortium of such like minded colleges for makingadmissions to such management seats. But where only onecollege has such a scheme for giving all its ten percentmanagement seats to meritorious students belonging toeconomically weaker sections, it may not be possible orpermissible to subject such college to the common admissionprocedure applicable for payment seats. But it will however benecessary to ensure that such a Scheme is not a camouflagefor making illegal or irregular admissions or for clandestinelycharging capitation fee or for profiteering. Having regard to theobject and purpose of the Act, such schemes will have to besubmitted by the college concerned to the AdmissionCommittee and the Fee Regulatory Committee for verificationand approval; and only after the Scheme is approved by such

admissions and the other to regulate the fee structure. The feestructure committee was authorized to decide whether the feesproposed by a college were justified or whether they amountedto profiteering or charging capitation fee; and if necessary toprescribe a fee structure different from what was proposed bythe institutions. In P.A.Inamdar v. State of Maharashtra - 2005(6) SCC 537, this Court reiterated that while every institutionis free to devise its own fee structure, the same can beregulated to prevent profiteering and to ensure that nocapitation fee is charged, either directly or indirectly, or in anyform; that if capitation fee and profiteering are to be checked,the method of admission has to be regulated so that theadmissions are based on merit and are transparent and thestudents are not exploited; and that it is, therefore, permissibleto regulate admissions and fee structure for achieving thesame. This Court further held:

“…Unless the admission procedure and fixation of fees isregulated and controlled at the initial stage, the evil of unfairpractice of granting admission on available seats guidedby the paying capacity of the candidates would beimpossible to curb.

Non-minority unaided institutions can also be subjected tosimilar restrictions which are found reasonable and in theinterest of student community. Professional educationshould be made accessible on the criterion of merit andon non-exploitative terms to all eligible students on auniform basis. Minorities or non-minorities, in exercise oftheir educational rights in the field of professionaleducation have an obligation and a duty to maintainrequisite standards of professional education by givingadmissions based on merit and making education equallyaccessible to eligible students through a fair andtransparent admission procedure and based on areasonable fee-structure. ….. We make it clear that in caseof any individual institution, if any of the Committees is

925 926CHARUTAR AROGYA MANDAL v. STATE OFGUJARAT & ANR. [R.V. RAVEENDRAN, J.]

He submitted that the said clause extracted below, may causeundue hardship to the students.

“That the Mandal provides scholarship on year to yearbasis. If the student is not able to clear his/her studies infirst attempt in the respective year the Mandal will not grantscholarship for the ensuing year. Also the awardedscholarship would have to be refunded with 10% interestin one instalment.”

As rightly pointed out by the Committee, a poor student beingmade liable to pay the tuition fee with interest, if he fails in theexamination, will be impractical and cause great hardship.Learned counsel for the appellant therefore readily agreed toamend the clause as follows:

“That the Mandal provides scholarship on year to yearbasis. If the student is not able to clear his/her studies infirst attempt in the respective year the Mandal will notrelease further scholarship until the student clears theexamination.

13. In view of the above, we dispose of this appeal asfollows :

(i) The order of the High Court is set aside, the matter isremanded to the High Court for consideration andexpeditious disposal of the writ petition on merits, in thelight of the above observations.

(ii) Insofar as the admissions for academic year 2010-2011 for the management seats is concerned, theappellant college is permitted to follow the sameprocedure as it adopted for 2008-2009 (set out in para 3above) and make admissions subject to the change inregard to Clause (3) in the Agreement/Bond referred toin para 12 above.

R.P. Appeal disposed of.

Committees, the colleges can make admissions in terms of theScheme.

11. The provisions of the Act and the rules are intendedto prevent profiteering or charging of capitation fee, and not toprevent or discourage any charitable effort by any college toencourage or provide free education for economically weakersections. Such Schemes for benefiting economically weakersections require to be encouraged by the State and itsauthorities. The fact that there is only one unaided collegewilling to admit students free of any fees in regard to ten percent management seats and the fact that it cannot therefore bea part of a fee charging consortium of unaided colleges, cannotby itself be a ground to deny the college to have a schemeextending the benefit of free admissions to meritorious poorstudents, in regard to management seats. Therefore, the HighCourt ought to have considered the request of the appellant onmerits, with reference to the provisions of the Act and the Rules,especially as the issue will arise every year and may arise withreference to other colleges also. In fact, the High Court by orderdated 30.7.2010, had proposed to examine the merits of thecontentions in regard to management seats. But it failed to doso.

12. In so far as the admission for the current year (2010-2011), the second respondent Committee has taken a very fairand positive stand. It was submitted by its counsel that theCommittee will have no objection for the appellant’s collegeimplementing the scheme in a transparent manner after beingduly approved by the Committee, subject to any monitoringmeasures. It was further submitted that the Committee has noobjection for the admission procedure followed by the appellantfor the year 2008-09 (set out in para 3 above) being followedfor the admissions to the ten percent management seats forthe academic year 2010-2011 also subject to the collegesuitably modifying Clause (3) of the Agreement/Bond (which isrequired to be executed by the students and/or their guardians).

The appellant was granted a licence under theTelecom Act, 1885 on 4.3.1998 for providing basictelecom services. The licence agreement required theappellant to start the commercial operations within twelvemonths from the date of the agreement. The appellant,when sought permission to commence the commercialoperations, towards the end of the year, it was denied onthe ground that certain technical deficiencies remainedto be removed. In the meantime, the respondent-Union ofIndia offered a Migration Package. The appellant gave anunconditional acceptance to the Package. Therespondent, in terms of the package, demanded 35% ofthe outstanding licence fee with interest, and alsoliquidated damages amounting to Rs. 7.30 crores. Theappellant prayed for waiver of the damages and the sameon being turned down, paid the entire amount towardsthe liquidated damages. The appellant started thecommercial operations on 5.6.2000. Thereafter, therespondent demanded a further amount of Rs. 70 lakhsas liquidated damages from the appellant for the delay incommissioning the service. Aggrieved by the demand ofthe entire amount of Rs. 8 crores towards the liquidateddamages, the appellant filed a petition before the T elecomDispute Settlement and Appellate T ribunal and alsodemanded refund of the entire amount of Rs. 8 crores.The Tribunal dismissed the petition. Therefore, theinstant appeal was filed.

Dismissing the appeal, the Court

HELD: 1. The Tribunal was justified in holding thatthe commercial operations were started only on 5th June,2000 and that for the intervening period such operationscould not be commenced on account of deficiencies thatwere attributed entirely to the defects in the system whichthe appellant had installed. It is not correct to say that theappellant was ready to commence commercial

SHYAM TELELINK LTD. NOW SISTEMA SHYAMTELESERVICES LTD.

v.UNION OF INDIA

(Civil Appeal No. 7236 of 2003)

OCTOBER 5, 2010

[MARKANDEY KATJU AND T.S. THAKUR, JJ.]

Telecom Regulatory Authority of India, Act,1997 – s.14(a)(i) r/w s. 14A(1) – Grant of licence to a company underTelecom Act for providing basic telecom services – Delay incommencing the commercial operations within the stipulatedtime provided in the agreement due to certain technicaldeficiencies – In the meantime, introduction of ‘MigrationPackage’ – The company unconditionally accepting thepackage and paying the entire amount towards the licencefee and liquidated damages in terms of the package – Furtherdemand of amount towards liquidated damage – Thecompany challenging the demand of entire amount towardsliquidated damages and demanding refund thereof – Thetribunal declined the challenge – On appeal, Held: Thecompany not entitled to question the terms of the MigrationPackage after unconditionally accepting and acting upon thesame – The unconditional acceptance of the package wouldestop the company from challenging the recovery of the duesunder the package – The company cannot be allowed toapprobate and reprobate the same instrument – Telecom Act,1885 – Evidence – Estoppel.

Maxim – Maxim ‘qui approbat non reprobat’ –Applicability of.

Doctrine – Doctrine of benefits and burdens –Applicability of.

[2010] 12 S.C.R. 927

SHYAM TELELINK LTD. v. UNION OF INDIA

operations in February 1999 i.e. within one year of thedate on which the agreement was signed between theparties, which is evident from the fact that it applied forthe grant of permission to commence commercialoperations from 3rd February, 1999 and this wassufficient to show its readiness to commence suchoperations. It is not disputed that the actual operationsstarted only on 5th June, 2000. The material placedbefore the T ribunal clearly est ablished that during theintervening period, the appellant had been informed bythe respondent that clearance for commencingcommercial operations could be considered only aftercertain requirements of the licence agreement werecomplied with. The material further established that thedeficiencies pointed out by the T elecommunicationEngineering Centre (TEC) could not be rectified by themanufacturer of the equipment purchased by theappellant forcing the latter to go for a new set ofequipment from a new vendor in December 1999 whichequipment was finally delivered and installed in April2000. It was only after the installation of the saidequipment that fresh test certificates were issued by TECon 1st June, 2000 leading to the start of the commercialoperations on 5th June, 2000. The fact that the appellantwas not ready to commence commercial operations inFebruary 1999 is evident from its own letter dated 19thJuly, 1999 in which the appellant had clearly admitted thatthe system was not yet ready for such operations andthat the appellant was engaged only in monitoring andtesting the credential of the new technology and therelated software/hardware. It is also evident from theletter of the appellant dated 25th August, 1999 that theappellant was not in a position to indicate any firm datefor a formal launch of the service as the system was notyet in a position to do so. In the light of the aboveadmission which is the best evidence against theappellant, it is not open to the appellant to say that it was

ready to start commercial operations in February 1999.[Paras 7, 8 and 9] [936-C-F; 937-D-G; 938-B-D]

2. The Tribunal was also justified in holding that thedenial of permission to the appellant to commence theoperation was neither arbitrary nor mala fide, especiallywhen the conditions in the licence agreement, requiringthe appellant to arrange and install suitable equipment tomeet the prevailing technical specifications by TEC werenot complied with nor were all performance tests requiredfor successful commissioning of the services carried outby the licensor before the services are commissioned forpublic use. The plea that the respondent has actedarbitrarily and in a discriminatory manner by overlookingsimilar deficiencies in the case of other service providershas also been correctly repelled by the T ribunal on theground that the nature of the deficiencies found in thecase of the appellant have not been found similar tothose found in other cases, where permission wasgranted. The appellant also failed to implead the otherservice providers nor was any material placed on recordto show that any discriminatory treatment was meted outto it. So long as the conditions of the agreement entitledthe respondents to decline permission to commencecommercial operations on account of failure on the partof the appellant to comply with the conditions stipulatedin the said agreement, which condition included a defect-free efficient system, the fact that some other serviceproviders were given permission in the peculiar facts oftheir cases and deficiencies allegedly noticed in theirsystem could not make out a case for the appellant toquestion the demand raised on the basis of a packagewhich the appellant had accepted unconditionally andpursuant to which acceptance of a substantial part of theliquidated damages amounting to Rs.7.3 crores had beendeposited by it without any demur. [Paras 9 and 10] [938-D-H; 939-A-C]

929 930

Migration Package. Allowing the appellant at this stageto question the demand raised under the MigrationPackage would amount to permitting the appellant toaccept what was favourable to it and reject what was not.The appellant cannot approbate and reprobate. Themaxim qui approbat non reprobat (one who approbatescannot reprobate) is akin to the doctrine of benefits andburdens which at its most basic level provides that aperson taking advantage under an instrument which bothgrants a benefit and imposes a burden cannot take theformer without complying with the latter. A person cannotapprobate and reprobate or accept and reject the sameinstrument. [Para 13] [939-D-H; 941-A]

Ambu Nair v. Kelu Nair AIR 1933 PC 167; CityMontessori School v.State of Uttar Pradesh and Ors. (2009)14 SCC 253; New Bihar BiriLeaves Co. v. State of Bihar 1981 (1) SCC 537; R. N.Goswain v.Yashpal Dhir AIR 1993 SC 352, relied on.

American Jurisprudence, 2nd Edition, Volume 28,pages 677-680 - referred to.

Case Law Reference:

AIR 1933 PC 167 Relied on. Para 13

(2009) 14 SCC 253 Relied on. Para 14

1981 (1) SCC 537 Relied on. Para 15

AIR 1993 SC 352 Relied on. Para 15

From the Judgment & Order dated 9.4.2003 of theTelecom Disputes Settlement and Appellate Tribunal in PetitionNo. 24 of 2001.

3. The Tribunal has also rightly held that thecomputation of the liquidated damages for non-commencing of the services as well as limiting the sameto a total amount of Rs.8 crores was in conformity withthe licence conditions executed between the parties.There is nothing to suggest that any error has crept inthe computation of liquidated damages nor was any sucherror pointed out before the T ribunal. [Para 1 1] [939-D-E]

4. The appellant was not entitled to question theterms of the Migration Package after unconditionallyaccepting and acting upon the same. The payment ofliquidated damages was an essential condition of theMigration Package which was offered to the serviceproviders. Unconditional acceptance of the packageincluding the payment of outstanding licence fee withinterest due thereon and liquidated damages was aspecific requirement of the Migration Package which wasunequivocally accepted by the appellant. Theunconditional acceptance of the terms of the packageand the benefit which the appellant derived under thesame will estop the appellant from challenging therecovery of the dues under the package or the processof its determination. [Paras 12, 13 and 18] [939-F-G; 940-B; 943-C-D]

5. Although the appellant had sought waiver of theliquidated damages yet upon rejection of that request, ithad made the payment of the amount demanded, whichsignified a clear acceptance on its part of the obligationto pay. The appellant, instead of taking recourse toappropriate proceedings and taking the adjudicationprocess to its logical conclusion before exercising itsoption, gave up the plea of waiver and deposited theamount which clearly indicates acceptance on its part ofits liability to pay especially when it was only upon suchpayment that it could be permitted to avail of the

931 932SHYAM TELELINK LTD. v. UNION OF INDIA

SUPREME COURT REPORTS [2010] 12 S.C.R.933 934SHYAM TELELINK LTD. v. UNION OF INDIA

Subramonium Prasad and Rohit Tandon for the Appellant.

T.S. Doabia, Shweta Verma (for A.K. Sharma) for theRespondent.

T.S. THAKUR, J. 1. This appeal under Section 18(1) ofthe Telecom Regulatory Authority of India Act, 1997 is directedagainst an order dated 9th April, 2003 passed by the TelecomDispute Settlement and Appellate Tribunal whereby PetitionNo.24/2001 filed under Section 14(a)(i) read with Section14A(1) of the Telecom Regulatory Authority of India Act, 1997has been dismissed. The factual matrix giving rise to the appealmay be summarised at the outset.

2. The appellant-Shyam Telelink Ltd. was granted a licenceunder the Indian Telecom Act, 1885 on 4th March, 1998 forproviding basic telecom services in Rajasthan Circle. A licenceagreement was executed between the parties that, inter alia,required the appellant to start commercial operations withintwelve months from the date on which the agreement wasexecuted. The appellant’s case before the Tribunal so alsobefore us is that, it was ready to commence commercialoperations in the last week of February 1999 and had soughtpermission of the respondents to do so. Permission was,however, denied on the ground that certain technicaldeficiencies remained to be removed and certain conditionsfor the grant of permission remained to be fulfilled. In themeantime the Union of India appears to have offered a MigrationPackage to all the Telecom Operators in July 1999. Under thispackage which was offered to the appellant-Shyam Telelink Ltd.on 22nd July, 1999 the fixed licence fee was to stand replacedby a revenue-sharing arrangement w.e.f. 1st August, 1999subject to the stipulation that atleast 35% of all outstanding duesincluding interest payable as on 31st July, 1999 and liquidateddamages in full is paid by the appellant on or before 15thAugust, 1999. Migration Package further provided that the

company shall have to accept all the conditions stipulated inthe package and that all proceedings instituted by the licenseeor their associations against the Union of India shall have tobe withdrawn.

3. It is not in dispute that the appellant gave anunconditional acceptance to the Migration Package on 22ndJuly, 1999 nor is it disputed that on 10th August, 1999 therespondent advised the appellant that a sum ofRs.6,74,90,481/- was payable towards outstanding licence feeand interest due thereon apart from a sum of Rs.7.30 crorespayable towards liquidated damages that were provisionallydetermined. The appellant-company was informed that in termsof the Migration Package at least 35% of the total licence feealong with interest amounting to Rs.6,74,90,481/- had to bepaid by it before 16th August, 1999 and the balance duescovered by a Financial Bank Guarantee by the 30thNovember, 1999. The liquidated damages payable by theappellant-company were demanded in full and had to be paidon or before 16th August, 1999.

4. On receipt of the intimation demanding payment of theamounts mentioned above the appellant-company appears tohave prayed for waiver of the liquidated damages on theground that it could not commence commercial operations bythe stipulated date on account of certain procedural delay. Thatprayer was upon consideration turned down with the result thatthe appellant paid 35% of the outstanding licence fee andinterest amounting to Rs.2.36 crores on 16th August, 1999. Italso paid the full amount of Rs.7.30 crores towards liquidateddamages as demanded by the Government.

5. Commercial operations in Rajasthan were finallystarted by the appellant-company on 5th June 2000. In March2001 a demand was raised by the respondent for payment ofa further amount of Rs.70 lakhs as liquidated damages for thedelay in the commissioning of the service. Aggrieved by the

935 936SHYAM TELELINK LTD. v. UNION OF INDIA[T.S. THAKUR, J.]

demand of Rs.8 crores towards liquidated damages out ofwhich the appellant had already paid Rs.7.30 crores on 16thAugust, 1999 the appellant approached the Tribunal forredress. As mentioned earlier the appellant’s case before theTribunal was that it was ready to commence commercialoperations in the last week of February 1999 and had soughtpermission to do so from the respondent which permission wasin an arbitrary, illegal and discriminatory manner refused by therespondent. Recovery of the liquidated damages was, thereforebad, argued the appellant who demanded refund of the entireamount of Rs.8 crores recovered towards liquidated damagesfrom it.

6. The respondent contested the petition before theTribunal, inter alia, on the ground that the petitioner-appellantwas not entitled to question any demand arising out of theagreement executed between the parties after it hadunconditionally accepted the Migration Package under whichit agreed to deposit without demur the outstanding licence feeas also the liquidated damages payable under the licenceagreement. The respondent also asserted that the appellantwas not ready with the commissioning of the service as wasevident from the admissions made in several communicationssent by it to the respondent. It was further pointed out by therespondent that the computation of actual liquidated damagescould be undertaken only after the appellant had commencedcommercial operations. The actual charges after suchcomputation were according to the respondent determined atRs.29.86 crores but the demand was restricted to Rs.8 croresin terms of the explicit limitation prescribed under the licence.An amount of Rs.7.3 crores having already been paid underthe Migration Package, a demand for payment of Rs.70 lakhsonly was raised by the respondent. It was also asserted by therespondent that the appellant had not disputed calculation ofthe amount of Rs.7.3 crores as liquidated damages for non-commissioning of the service at the time of Migration Packageand paid the same with other dues. Having done so, the

Migration Package which contained a specific stipulation thatthe acceptance of the package “will be deemed as a full andfinal settlement of all existing disputes whatsoever irrespectiveof whether they are related to the present package or not“ couldnot be questioned by the petitioner-appellant. The respondentalso raised the question of limitation and assailed themaintainability of the petition on that ground. By its order dated9th April, 2003 impugned in this appeal the Tribunal dismissedthe petition filed by the appellant aggrieved whereof theappellant has filed C.A. No.7236 of 2003 before this Court.

7. We have heard learned counsel for the parties andperused the record. A two-fold contention was urged in supportof the appeal by counsel appearing for the appellant. Firstly, itwas contended that the appellant was ready to commencecommercial operations in February 1999 i.e. within one yearof the date on which the agreement was signed between theparties. The fact that the petitioner had applied for the grant ofpermission to commence commercial operations in Jaipur from3rd February, 1999 was according to the appellant sufficientto show its readiness to commence such operations. There is,in our opinion, no force in that contention. It is not disputed thatthe actual operations started only on 5th June, 2000. Thematerial placed before the Tribunal clearly established thatduring the intervening period the appellant had been informedby the respondent that clearance for commencing commercialoperations could be considered only after the followingrequirements of the licence agreement were complied with:

(a) Payment of next instalment of licence feedue on 3.3.1999;

(b) Provision of Performance Bank Guarantee(PBG) and enhanced Financial BankGuarantee (FBG) for requisite amount andvalidity before commencement ofsucceeding year on 3.3.1999;

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monitoring the behaviour of the equipment even after 75%loading of the system which is also being followed by DoT/MTNL, while acceptance testing of the systems. However,we hope to commercialize the services by middle ofDecember 1999, as supplier is continuously working toresolve the bugs in the software.”

9. In the light of the above admission which is the bestevidence against the appellant, it is not open to the appellantto argue that it was ready to start commercial operations inFebruary 1999. The Tribunal was, therefore, perfectly justifiedin holding that the commercial operations were started only on5th June, 2000 and that for the intervening period suchoperations could not be commenced on account of deficienciesthat were attributed entirely to the defects in the system whichthe appellant had installed. The Tribunal was also justified inour opinion in holding that the denial of permission to theappellant was neither arbitrary nor mala fide especially whenthe conditions in the licence agreement requiring the appellantto arrange and install suitable equipment to meet the prevailingtechnical specifications by Telecommunication EngineeringCentre were not complied with nor were all performance testsrequired for successful commissioning of the services carriedout by the Licensor before the services are commissioned forpublic use.

10. The argument that the respondent has acted arbitrarilyand in a discriminatory manner by overlooking similardeficiencies in the case of other service providers has alsobeen correctly repelled by the Tribunal on the ground that thenature of the deficiencies found in the case of the appellanthave not been found similar to those found in other cases wherepermission was granted. As a matter of fact, the appellant wasgiven an opportunity to implead the other service providers sothat the allegation could be examined in detail but the appellantfailed to do so nor was any material placed on record to showthat any discriminatory treatment was meted out to it. At any

(c) Rectification of deficiencies pointed out byTEC before the commencement ofcommercial operations;

(d) Submission of plan in respect of providingDirect Exchange Lines (DEL-s) and VillagePublic Telephones (VPT-s) as per committedtargets failing which Liquidated Damages(LD-s) are payable; and

(e) Establishment of a separate bank account(an escrow account as stipulated undercondition 18.6 of the Licence Agreement).

8. Material further established that the deficiencies pointedout by the TEC could not be rectified by M/s Qualcommmanufacturer of the equipment purchased by the appellantforcing the latter to go for a new set of equipment from a newvendor in December 1999 which equipment was finallydelivered and installed in April 2000. It was only after theinstallation of the said equipment that fresh test certificates wereissued by TEC on 1st June, 2000 leading to the start of thecommercial operations on 5th June, 2000. The fact that theappellant was not ready to commence commercial operationsin February 1999 is evident from its own letter dated 19th July,1999 in which the appellant had clearly admitted that the systemwas not yet ready for such operations and that the appellantwas engaged only in monitoring and testing the credential ofthe new technology and the related software/hardware. It is alsoevident from the letter of the appellant dated 25th August, 1999that the appellant was not in a position to indicate any firm datefor a formal launch of the service as the system was not yet ina position to do so. The relevant part of the letter reads as under:

“………… at this stage we are unable to indicate any datefor formal commissioning of the commercial launch of theservice since still there are bugs in the system providedby our supplier. In any case the testing has to continue for

SHYAM TELELINK LTD. v. UNION OF INDIA[T.S. THAKUR, J.]

rate so long as the conditions of the agreement entitled therespondents to decline permission to commence commercialoperations on account of failure on the part of the appellant tocomply with the conditions stipulated in the said agreement,which condition included a defect-free efficient system, the factthat some other service providers were given permission in thepeculiar facts of their cases and deficiencies allegedly noticedin their system could not make out a case for the appellant toquestion the demand raised on the basis of a package whichthe appellant had accepted unconditionally and pursuant towhich acceptance a substantial part of the liquidated damagesamounting to Rs.7.3 crores had been deposited by it withoutany demur.

11. The Tribunal has also held and in our view correctly sothat the computation of the liquidated damages for non-commencing of the services as well as limiting the same to atotal amount of Rs.8 crores was in conformity with the licenceconditions executed between the parties. There is nothingbefore us to suggest that any error has crept in the computationof liquidated damages nor was any such error pointed outbefore the Tribunal. As a matter of fact, according to therespondents the amount of damages works out to Rs.29.86crores was limited to Rs.8 crores in explicit terms of thelimitation laid down in the licence agreement.

12. The factual aspects apart we need to remember thatthe payment of liquidated damages was an essential conditionof the Migration Package which was offered to the serviceproviders. Unconditional acceptance of the package includingthe payment of outstanding licence fee with interest due thereonand liquidated damages was a specific requirement of theMigration Package which was unequivocally accepted by theappellant in terms of the declaration made in the followingwords:

“.. With reference to the letter No.842-153/99-VAS(Vol.V) (Pt.) dated 22nd July, 1999 on the subject noted

above, I hereby covey unconditional acceptance on behalfof the Licensee with regard to the package proposed formigration of the existing licenses to NTP 1999 Regime onthe terms and conditions in the letter under reference….”

13. The unconditional acceptance of the terms of thepackage and the benefit which the appellant derived under thesame will estop the appellant from challenging the recovery ofthe dues under the package or the process of its determination.No dispute has been raised by the appellant and rightly so inregard to the payment of outstanding licence fee or the interestdue thereon. The controversy is limited to the computation ofliquidated damages of Rs.8 crores out of which Rs.7.3 croreswas paid by the appellant in the beginning without any objectionfollowed by a payment of Rs.70 lakhs made on 29th May, 2001.Although the appellant had sought waiver of the liquidateddamages yet upon rejection of that request it had made thepayment of the amount demanded which signified a clearacceptance on its part of the obligation to pay. If the appellantproposed to continue with its challenge to demand, nothingprevented it from taking recourse to appropriate proceedingsand taking the adjudication process to its logical conclusionbefore exercising its option. Far from doing so, the appellantgave up the plea of waiver and deposited the amount whichclearly indicates acceptance on its part of its liability to payespecially when it was only upon such payment that it could bepermitted to avail of the Migration Package. Allowing theappellant at this stage to question the demand raised under theMigration Package would amount to permitting the appellantto accept what was favourable to it and reject what was not.The appellant cannot approbate and reprobate. The maxim quiapprobat non reprobat (one who approbates cannot reprobate)is firmly embodied in English Common Law and often appliedby Courts in this country. It is akin to the doctrine of benefitsand burdens which at its most basic level provides that aperson taking advantage under an instrument which both grantsa benefit and imposes a burden cannot take the former without

reject the rest. That is to say, no party can accept andreject the same instrument or transaction (Per Scrutton,L.J., Verschures Creameries Ltd. v. Hull & NetherlandsSteamship Co.)”

15. The decision of this Court in R.N. Goswain v. YashpalDhir AIR 1993 SC 352, brings in the doctrine of election insupport of the very same conclusion in the following words :

“10. Law does not permit a person to both approbate andreprobate. This principle is based on the doctrine ofelection which postulates that no party can accept andreject the same instrument and that “a person cannot sayat one time that a transaction is valid and thereby obtainsome advantage, to which he could only be entitled on thefooting that it is valid, and then turn round and say it is voidfor the purpose of securing some other advantage”. [See:Verschures Creameries Ltd. v. Hull and NetherlandsSteamship Co. Ltd. (1921) 2 KB 608, at p.612, Scrutton,L.J.] According to Halsbury’s Laws of England, 4th Edn.,Vol. 16, “after taking an advantage under an order (forexample for the payment of costs) a party may beprecluded from saying that it is invalid and asking to set itaside”. (para 1508)”

16. In America Estoppel by acceptance of benefits is oneof the recognized situations that would prevent a party fromtaking up inconsistent positions qua a contract or transactionunder which it has benefited.

17. American Jurisprudence, 2nd Edition, Volume 28,pages 677-680 discusses ‘Estoppel by acceptance of benefits’in the following passage:

“Estoppel by the acceptance of benefits: Estoppel isfrequently based upon the acceptance and retention, byone having knowledge or notice of the facts, of benefitsfrom a transaction, contract, instrument, regulation which

complying with the latter. A person cannot approbate andreprobate or accept and reject the same instrument. In AmbuNair v. Kelu Nair AIR 1933 PC 167 the doctrine was explainedthus:

“Having thus, almost in terms, offered to be redeemedunder the usufructuary mortgage in order to get paymentof the other mortgage debt, the appellant, Their Lordshipsthink, cannot now turn round and say that redemption underthe usufructuary mortgage had been barred nearlyseventeen years before he so obtained payment. It is awell-accepted principle that a party cannot both approbateand reprobate. He cannot, to use the words of Honyman,J. in Smith v. Baker (1878) LR 8 CP 350 at p. 357 ‘at thesame time blow hot and cold. He cannot say at one timethat the transaction is valid and thereby obtain someadvantage to which he could only be entitled on the footingthat it is valid, and at another time say it is void for thepurpose of securing some further advantage’.”

14. View taken in the above decision has been reiteratedby this Court in City Montessori School v. State of UttarPradesh and Ors. (2009) 14 SCC 253. To the same effect isthe decision of this Court in New Bihar Biri Leaves Co. v. Stateof Bihar 1981 (1) SCC 537 where this Court said :

“It is a fundamental principle of general application that ifa person of his own accord, accepts a contract on certainterms and works out the contract, he cannot be allowed toadhere to and abide by some of the terms of the contractwhich proved advantageous to him and repudiate the otherterms of the same contract which might bedisadvantageous to him. The maxim is qui approbat nonreprobat (one who approbates cannot reprobate). Thisprinciple, though originally borrowed from Scots Law, isnow firmly embodied in English Common Law. Accordingto it, a party to an instrument or transaction cannot takeadvantage of one part of a document or transaction and

RAVEENDRAN, J.]

943SHYAM TELELINK LTD. v. UNION OF INDIA[T.S. THAKUR, J.]

VIJENDRA KUMAR VERMAv.

PUBLIC SERVICE COMMISSION, UTTARAKHAND ANDORS.

OCTOBER 8, 2010

[DR. MUKUNDAKAM SHARMA AND ANILR. DAVE, JJ.]

Service Law – Selection – Uttaranchal Judicial ServiceRules, 2005 – Rule 8 – Selection of Civil Judge – Eligibilitycriteria – Candidate declared successful in written competitiveexamination; called for interview, but finally not selected onthe ground that he did not fulfill the eligibility criteria of basicknowledge of computer operation – Candidate filed writpetition contending that the said eligibility criteria wasintroduced during the midstream of the selection process,therefore, such process was vitiated – Writ petition dismissed– Justification of – Held: Justified – The eligibility criteria ofbasic knowledge of computer operation is prescribed in Rule8 itself – The evidence on record makes it clear that nominimum benchmark or a new procedure was ever introducedduring the midstream of the selection process – Allcandidates including the appellant knew the requirements ofthe selection process and were also fully aware that they mustpossess the basic knowledge of computer operation –Appellant appeared in the interview and faced questions fromcomputer expert without any protest at any stage – He cannotnow turn back to state that the procedure adopted was wrongand without jurisdiction – Judicial Service.

Judiciary – E-governance – New Judges are expected tohave basic knowledge of the computer operation.

An advertisement was published inviting

he might have rejected or contested. This doctrine isobviously a branch of the rule against assuminginconsistent positions.

As a general principle, one who knowingly accepts thebenefits of a contract or conveyance is estopped to denythe validity or binding effect on him of such contract orconveyance.

This rule has to be applied to do equity and must not beapplied in such a manner as to violate the principles ofright and good conscience.”

18. For the reasons set out by us hereinabove, we haveno hesitation in holding that the appellant was not entitled toquestion the terms of the Migration Package afterunconditionally accepting and acting upon the same.

19. In the result this appeal fails and is hereby dismissedbut in the circumstances without any order as to costs.

K.K.T. Appeal dismissed.

[2010] 12 S.C.R. 944

945 946VIJENDRA KUMAR VERMA v. PUB. SERVICE COMMISSION,UTTARAKHAND

applications from eligible candidates for selection of CivilJudges (Junior Division) in the Uttaranchal JudicialService. The appellant, a candidate, was declaredsuccessful in the written competitive examination,whereafter he was called for interview. At the time ofinterview, a computer expert ascertained the appellant’sbasic knowledge of computer operation by puttingquestions to him and thereafter gave the opinion that afew he did not possess such basic knowledge.

The respondents finally did not select the appellanton the ground that he lacked in basic knowledge ofcomputer operation, which was one of the eligibilitycriteria for being selected for the post of Civil Judge.

The appellant filed a writ petition contending that thecriteria of basic knowledge of computer operation wasintroduced during midstream of the selection and,therefore, the selection process was vitiated; and,therefore, he should be inducted into service. The writpetition was dismissed by the High Court.

HELD:1.1. The requirement and the necessity forhaving basic knowledge of computer operation as oneof the eligibility criteria and conditions for selection isprescribed in Rule 8 itself of the Uttaranchal JudicialService Rules, 2005. The advertisement also made it clearto all the intending candidates that they must have basicknowledge of computer operation. [Para 24] [954-E-F]

1.2. When the list of successful candidates in thewritten examination was published, it was also madeclear that the knowledge of the candidates with regardto basic knowledge of computer operation would betested at the time of interview, for which knowledge of

Microsoft Operating System and Microsoft OfficeOperation would be essential. In the call letter also (whichwas sent to the appellant at the time of calling him forinterview), the aforesaid criteria was reiterated and speltout. Therefore, no minimum benchmark or a newprocedure was ever introduced during the midstream ofthe selection process. All the candidates knew therequirements of the selection process and were also fullyaware that they must possess the basic knowledge ofcomputer operation meaning thereby Microsoft OperatingSystem and Microsoft Office Operation. Knowing the saidcriteria, the appellant appeared in the interview, faced thequestions from the expert of computer application andtook a chance and opportunity without any protest at anystage, and now he cannot turn back to state that theaforesaid procedure adopted was wrong and withoutjurisdiction. [Para 25] [954-F-H; 955-A-C]

K. Manjusree v. State of Andhra Pradesh & Anr. (2008)3 SCC 512; Hemani Malhotra v. High Court of Delhi (2008)7 SCC 11 and Ramesh Kumar v. High Court of Delhi & Anr.(2010) 3 SCC 104, distinguished.

Dr. G. Sarana v. University of Lucknow & Ors. (1976) 3SCC 585; P.S. Gopinathan v. State of Kerala and Others(2008) 7 SCC 70; Union of India and Others v. S. VinodhKumar and Others (2007) 8 SCC 100 and K.H. Siraj v. HighCourt of Kerala and Others (2006) 6 SCC 395 – relied on.

2. It is also to be considered that the Indian judiciaryis taking steps to apply e-governance for efficientmanagement of the courts. In the near future, all thecourts in the country will be computerized. In that respect,the new judges who are being appointed are expectedto have basic knowledge of computer operation. It will beunfair to overlook basic knowledge of computer

947 948VIJENDRA KUMAR VERMA v. PUB. SERVICE COMMISSION,UTTARAKHAND

operation to be an essential condition for being a judgein view of the recent development being adopted.Therefore, the requirement of having basic knowledge ofcomputer operation should not be diluted. In the instantcase, the procedure for testing the knowledge ofcomputer operation may not be foolproof but at the sametime it cannot be said that the same was not reasonableor that it was arbitrary. The appellant has failed to makeout any case for interference with the orders passed bythe High Court. [Paras 30, 31] [957-A-C; E-F]

Case Law Reference:

(2008) 3 SCC 512 distinguished Para 22

(1976) 3 SCC 585 relied on Para 26

From the Judgment & Order dated 28.3.2008 of the HighCourt of Uttarakhand at Nainital in Writ Petition Nos. 163 of2007 (S/N) and 164 of 2007 (S/B).

Shyam Deewan, B.S. Mor, Manjit Singh, R.C. Kaushik andHarikesh Singh for the Appellant.

Anuvrat Sharma, S.S. Shamshery, Rachana Srivastava,Jatinder Kumar Bhatia, B.N. Jha and Ajay Bhatia for theRespondents.

DR. MUKUNDAKAM SHARMA, J. 1. By passing anorder on 15.9.2010, we dismissed SLP(C) No. 12787 of 2008which was connected with SLP(C) No. 12788 of 2008. SLP (C)No. 12787 of 2008 was dismissed as not pressed.

2. SLP(C) No. 12788 of 2008 was filed by the petitionersnamely Shri Vijendra Kumar Verma and Shri Harendra KumarOzha. But so far as Shri H.K. Ozha is concerned, on his behalfa prayer was made to withdraw his name from the petition ashe was appointed as a judicial officer in the State of UttarPradesh. By an order passed on the same day i.e. 15.9.2010,we removed his name as petitioner from the said petition witha further direction that the aforesaid petition would beconsidered only so far as Shri Vijendra Kumar Verma isconcerned.

3. After passing the aforesaid order, we proceeded to hearthe learned counsel appearing for the parties and after hearingthe parties at length, we reserved our orders.

4. Leave granted.

5. By this common judgment and order, we now proposeto dispose of the appeal in terms of our discussion and reasonsrecorded herein. The selection of judicial officers for UttaranchalJudicial Service is governed by a set of rules called theUttaranchal Judicial Service Rules, 2005. The Rules deal withthe procedure and mode of selection, recruitment andappointment in the Uttaranchal Judicial Service comprisinggroup A and B posts. In Uttaranchal Judicial Service, there isa post called Civil Judge (Junior Division). Rule 8 of the saidRules lays down the eligibility criterion that a candidate for directrecruitment to the service apart from holding qualification ofBachelor of Law must possess a thorough knowledge of Hindiin Devnagari script as well as the basic knowledge of computeroperation.

949 950

of Civil Judge (Junior Division) in the order in which their namesare given in the list.

10. An advertisement was issued on 16.2.2006 invitingapplications from eligible candidates for filling up 50 posts ofCivil Judge (Junior Division). The appellant herein submittedhis application for one of the aforesaid posts. The appellantappeared in the preliminary examination and he was declaredsuccessful in the said examination on 16.9.2006.

11. Thereafter, he was called for the Viva Voceexamination also, but despite his appearance in the viva voceexamination and doing reasonably well according to his ownestimation, he was not selected and his name did not appearin the final list of selected candidates. The appellant, however,came to know that he received total of 576 marks together inwritten examination and in viva voce examination and on thebasis thereof in his estimation he should have been selectedas persons getting total marks of 568 were inducted into theservice. The appellant submitted that to his knowledge andinformation he was not selected because according to therespondents the appellant did not have basic knowledge ofcomputer operation. The reason for non-selection of theappellant was also disclosed in the counter affidavit filed onbehalf of Respondent No. 1 against the writ petition filed by theappellant. In the said counter affidavit, it was stated that theappellant was to put to test for determining and ascertainingas to whether he possessed the basic knowledge of computeroperation. It is also stated in the said affidavit that an expert inthe field of computer was associated for determining, assessingand ascertaining the aforesaid fact and it was found that theappellant did not possess basic knowledge in computeroperation. Therefore, he was not selected.

12. The aforesaid writ petition was filed by the appellantpraying for declaration that since the respondents haveintroduced a new selection criterion during the midstream ofthe selection, therefore, the selection process was vitiated. It

6. Rule 8 reads as follows:-

“8. A candidate for direct recruitment to the Servicemust be –

(a) A bachelor of Law from a University established bylaw in Uttaranchal or any other University of Indiarecognized for this purpose by the Governor.

(b) Must possess thorough knowledge of Hindi inDevnagri script.

(c) Basic knowledge of Computer operation.”

7. Rule 14 of the said Rules lays down that the examinationmay be conducted at such time and on such dates as may benotified by the Commission and the same would consist of awritten examination on such legal and allied subjects in thesyllabus prescribed under Rule 17, an examination to test theknowledge of the candidate in Hindi and in English and aninterview for assessing the merit of the candidates.

8. Rule 17 provides that the syllabus and the Rules relatingto the competitive examination shall be such as given inAppendix II. The said Appendix II contains the syllabus as wellas the individual aggregate marks to be allocated againstindividual papers.

9. Rule 18 of the said Rules speaks of the manner andmode of the preparation of the final list of the selectedcandidates in order of their proficiency as disclosed by theaggregate of marks finally awarded to such candidates in thewritten examination and interview whereas Rule 19 makes aprovision as to how on submission of the final list of thecandidates prepared by the Commission, appointment is to bemade to the Post of Civil Judge (Junior Division). It providesthat on receipt of the list of candidates submitted by theCommission, the Governor shall make appointment to the post

VIJENDRA KUMAR VERMA v. PUB. SERVICE COMMISSION,UTTARAKHAND [DR. MUKUNDAKAM SHARMA, J.]

17. The aforesaid submissions of the learned counselappearing for the appellant were refuted by the learned counselappearing for the respondents who has taken us through therecords and on the basis of which he submitted that therespondents have all along spelt out that the candidate desiringto be appointed to the aforesaid post of Civil Judge (JuniorDivision) must have the basic knowledge of computer operationand therefore the same was a part and parcel of the syllabuswhich was known to each one of the candidates including theappellant and therefore no grievance could be raised in thatregard.

18. It was also submitted by him that the appellant havingparticipated in the entire selection process and having specificknowledge that he would be required to have basic knowledgein computer operation and then having taken a chance thereinby appearing in the viva voce and facing the questions of theexpert on the computer operation, he cannot now turn back andtake a stand that the said selection process is vitiated.

19. In the light of the aforesaid submissions of the learnedcounsel appearing for the parties, we have considered therecords. The advertisement inviting applications from eligiblecandidates for filling up the posts was published in anewspaper on 16.2.2006. In the said advertisement, conditionsof eligibility have also been mentioned in clause 4 wherein theessential qualifications were prescribed. In clause 4(c), it wasspecifically mentioned that the candidate should have basicknowledge of computer operation. In clause 9 of the aforesaidadvertisement, it was stated that the candidate desiring to applyshould read the advertisement carefully and apply only if he issatisfied regarding eligibility according to the conditions ofadvertisement. In paragraph 12(4), it was also mentioned thatonly those candidates would be called for interview who wouldbe declared successful on the basis of main examination(written examination).

20. The candidates were thereafter called for the written

was also submitted that the action of the respondents in failingthe appellant only on the ground that he did not have basicknowledge in computer operation should be set aside andquashed and that the appellant should now be inducted into theservice.

13. The aforesaid writ petition was heard by the DivisionBench of the Uttarakhand High Court and finally by theimpugned judgment and order dated 28.3.2008, the writ petitionwas dismissed with certain observations contained in the saidjudgment.

14. Being aggrieved by the aforesaid judgment and order,the present appeal is filed by the appellant on which we heardthe learned counsel appearing for the parties.

15. Mr. Shyam Diwan, the learned senior counselappearing for the appellant submitted before us that no syllabuswas ever prescribed by the respondents for judging andascertaining the basic knowledge of the candidate in computeroperation either before the selection process was initiated oreven at the time when the advertisement was issued andtherefore such a syllabus could not have been introduced by therespondents in the midstream of such selection process andtherefore, the action of the respondent, in introducing abenchmark at a subsequent stage is without jurisdiction and thesame is required to be set aside.

16. It was also submitted by the learned counsel for theappellant that the benchmark provided for judging the suitabilityof the person in computer operation being vague and therebeing no proper guidelines for adjudging the said competenceand suitability, failing the appellant only on the ground that hedid not have sufficient knowledge in basic computer operationwas uncalled for and unjustified and therefore the appellantshould be declared to have passed the examination as he hadpassed even in the viva voce examination as he scored morethan the minimum marks obtained by the successful candidates.

951 952VIJENDRA KUMAR VERMA v. PUB. SERVICE COMMISSION,UTTARAKHAND [DR. MUKUNDAKAM SHARMA, J.]

examination which was held from 17.1.2007 to 19.1.2007 anda list of successful candidates in the written examination waspublished by the Uttarakhand Public Service Commission on26.4.2007. In the aforesaid notification which was published, itwas also mentioned that the aforesaid successful candidatesin the written competitive examination will have to establish thatthey have sufficient knowledge of Hindi in Devnagari script andbasic knowledge of computer operation. It was further statedthat with regard to the basic knowledge of computer operations,the candidates should have the knowledge of MicrosoftOperating System and Microsoft Office operation. Interviewletters were thereafter issued and in so far as the appellant isconcerned, his interview letter was dated 21.5.2007. In the saidcall letter for the interview also, it was specifically mentionedthat basic knowledge of the computer operation would beessential to the candidate and in connection with the basicknowledge of the computer operation, knowledge of MicrosoftOperating System and Microsoft Office Operation would beessential to the candidate and the said knowledge of thecandidate would be examined at the time of interview.Therefore, the appellant knowing fully well about the requirementof having basic knowledge of computer operation went for hisviva voce examination and gave the said test without anyprotest or demur of the kind that is being raised in the writpetition and before us.

21. The basic knowledge of the appellant in computeroperation was tested at the time of his interview by an expertwho was sitting with the interview members conducting theinterview. The said expert after testing the knowledge, thesuitability of the appellant and his basic knowledge in computeroperation gave his opinion that the appellant did not possessthe basic knowledge of computer operation. Since possessionof such knowledge of computer operation was one of theeligibility criteria for being selected for the aforesaid post ofCivil Judge and as the appellant was not found suitable andlacking in basic knowledge of computer operation, he was not

selected. The issue is whether such a course adopted by therespondent could be said to be illegal, without jurisdiction andunheard of.

22. In support of his contention, the learned counselappearing for the appellant relied upon the decisions of theSupreme Court in K. Manjusree Vs. State of Andhra Pradesh& Anr. reported in (2008) 3 SCC 512. In paragraph 25 and 27of the said judgment, it was said that introducing minimummarks for interview in the midstream of the selection processis illegal.

23. The counsel for the appellant also relied upon ajudgment of this Court in Hemani Malhotra Vs. High Court ofDelhi reported in (2008) 7 SCC 11 and Ramesh Kumar Vs.High Court of Delhi & Anr. reported in (2010) 3 SCC 104 insupport of the contention that minimum benchmark provided forselection during the midstream of the selection process iswithout jurisdiction.

24. In our considered opinion, the reliance on the aforesaidjudgments by the counsel appearing for the appellant wasmisplaced as in the present case the requirement and thenecessity for having basic knowledge of computer operationas one of the eligibility criteria and conditions for selection isprescribed in Rule 8 itself. The said clause was also specificallymentioned in the advertisement issued making it clear to all theintending candidates that they must have basic knowledge ofcomputer operation.

25. When the list of successful candidates in the writtenexamination was published in such notification itself, it was alsomade clear that the knowledge of the candidates with regardto basic knowledge of computer operation would be tested atthe time of interview for which knowledge of Microsoft OperatingSystem and Microsoft Office Operation would be essential. Inthe call letter also which was sent to the appellant at the timeof calling him for interview, the aforesaid criteria was reiterated

953 954

option given to him, he cannot turn back and challenge theconditions. He could have opted not to join at all but hedid not do so. Now it does not lie in his mouth to clamourregarding the cut-off date or for that matter any othercondition. The High Court, therefore, in our opinion, rightlyheld that the appellant is estopped and precluded fromquestioning the said order dated 14-1-1992. Theapplication of principles of estoppel, waiver andacquiescence has been considered by us in many cases,one of them being G. Sarana (Dr.) v. University ofLucknow…….”

28. In Union of India and Others vs. S. Vinodh Kumar andOthers reported in (2007) 8 SCC 100 at paragraph 18 it washeld that it is also well settled that those candidates who hadtaken part in the selection process knowing fully well theprocedure laid down therein were not entitled to question thesame. Besides, in K.H. Siraj vs. High Court of Kerala andOthers reported in (2006) 6 SCC 395 in paragraph 72 and 74it was held that candidates who participated in the interviewwith knowledge that for selection they had to secure prescribedminimum marks on being unsuccessful in interview could notturn around and challenge that the said provision of minimummarks was improper, said challenge is liable to be dismissedon the ground of estoppel.

29. Now, while deciding the submission of the counselappearing for the appellant that judging the suitability of thecandidate by laying down the benchmark of basic knowledgeof computer operation being sufficient or insufficient is vague,we are of the opinion that possessing of basic knowledge ofcomputer operation is one of the criteria for selection and inorder to judge such knowledge, an expert on the subject wasavailable at the time when the candidate was facing theInterview Board. In order to ascertain the candidate’sknowledge of computer operation, he put questions andthereafter he gave remarks that the candidate has sufficient

and spelt out. Therefore, no minimum benchmark or a newprocedure was ever introduced during the midstream of theselection process. All the candidates knew the requirementsof the selection process and were also fully aware that they mustpossess the basic knowledge of computer operation meaningthereby Microsoft Operating System and Microsoft OfficeOperation. Knowing the said criteria, the appellant alsoappeared in the interview, faced the questions from the expertof computer application and has taken a chance andopportunity therein without any protest at any stage and nowcannot turn back to state that the aforesaid procedure adoptedwas wrong and without jurisdiction.

26. In this connection, we may refer to the decision of theSupreme Court in Dr. G. Sarana Vs. University of Lucknow &Ors. reported in (1976) 3 SCC 585 wherein also a similar standwas taken by a candidate and in that context the Supreme Courthad declared that the candidate who participated in theselection process cannot challenge the validity of the saidselection process after appearing in the said selection processand taking opportunity of being selected. Para 15 inter aliareads thus:-

“15…. He seems to have voluntarily appeared before theCommittee and taken a chance of having a favourablerecommendation from it. Having done so, it is not nowopen to him to turn round and question the constitution ofthe Committee.”

27. In P.S. Gopinathan Vs. State of Kerala and Othersreported in (2008) 7 SCC 70, this Court relying on the aboveprinciple held thus;

“44. …..Apart from the fact that the appellant accepted hisposting orders without any demur in that capacity, hissubsequent order of appointment dated 15-7-1992 issuedby the Governor had not been challenged by the appellant.Once he chose to join the mainstream on the basis of

955 956

knowledge or that he does not have sufficient knowledge.

30. It is also to be considered that the Indian judiciary istaking steps to apply e-governance for efficient managementof courts. In the near future, all the courts in the country will becomputerized. In that respect, the new judges who are beingappointed are expected to have basic knowledge of thecomputer operation. It will be unfair to overlook basicknowledge of computer operation to be an essential conditionfor being a judge in view of the recent development beingadopted. Therefore, we are of the considered opinion thatrequirement of having basic knowledge of computer operationshould not be diluted. We also deem fit not to comment overthe standard applied by the expert in judging the saidknowledge as the same is his subjective satisfaction. Howeverdirections can be recommended to make the procedure moretransparent. The directions in respect of same have alreadybeen given by the High Court we do not think proper toprescribe the directions for the same separately.

31. The aforesaid procedure for testing the knowledgemay not be foolproof but at the same time it cannot be saidthat the same was not reasonable or that it was arbitrary.Therefore, after giving very thoughtful consideration to theissues, we are of the opinion that the appellant has failed tomake out any case before us for interference with the orderspassed by the High Court. We find no merit in this appeal andthe same is dismissed.

B.B.B. Appeal dismissed.

PITAMBAR SINGH AND ORS.v.

STATE OF BIHAR AND ORS.(Civil Appeal No. 8865 of 2010)

OCTOBER 8, 2010

[V.S. SIRPURKAR AND CYRIAC JOSEPH, JJ.]

Land Ceiling:

Bihar Land Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) Act, 1961 – ss.2(ee), 11(1) and32 B – Bihar Land Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) (Amendment) Act, 1982 –Class-II land – Mitakshara joint family comprising of appellantno.1, his wife and sons having a total family holding of 33.95acres – Draft statement made and published showing thatappellant No.1 was entitled to retain only 18 acres of land andthus, the family was holding 15.95 acres of land as surplusland – Appellate Authority recorded that one son of appellantno.1, namely, appellant No.2 was major, thus, he was entitledto be treated as a separate family from that of appellant no.1– Order not challenged by the State and attained finality –Amendment Act came into force – Section 32B relied uponby State Government – Initiation of fresh proceedings –Ceiling re-determined – Challenge to – Rejected by HighCourt – Held: In the facts and circumstances, s.32B could nothave been relied upon by the State Government, and the HighCourt erred in legalizing the subsequent reopening of theproceedings, which had come to a dead end – Since the orderpassed by the appellate authority attained finality, there wasno question of any further proceedings – Even on the merits,the High Court committed a patent error in treating the familyas one family and proceeding to limit the entitlement of thefamily holding to 18 acres – The rights of appellant Nos.1 and

[2010] 12 S.C.R. 958

959 960PITAMBAR SINGH AND ORS. v. STATE OF BIHARAND ORS.

2 as coparceners was intact – Further, since they were majoron the relevant date, they could not have been held asmember of one family and were entitled to be treated asindependent families with the result that there would be twofamilies and the total land being only 33.95 acres, there couldbe no surplus, as has been wrongly held by the courts below,particularly, after the reopening of the proceedings unders.32B of the Amendment Act.

Appellant no.1 is the son of ‘B’, the original landholder. They were members of a Mitakshara joint familyand were having a total family holding of 33.95 acres ofclass-II land. The ceiling fixed by the Bihar Land Reforms(Fixation of Ceiling Area and Acquisition of Surplus Land)Act, 1961 is 18 acres in respect of such land. After thedeath of ‘B’, proceedings were started by a Ceiling Caseagainst appellant No. 1. A draft statement was made andpublished showing that appellant No. 1 was entitled toretain only 18 acres of land and thus, the family washolding 15.95 acres of land as surplus land.

On the service of the draft statement, appellant No.1 filed objections under Section 10(3) of the Act statingthat his son, appellant no.2 was major on 9.9.1970, therelevant date under the Bihar Land Reforms (Fixation ofCeiling Area and Acquisition of Surplus Land) Act, 1961,and as such, he also was entitled to his own share andhe could not be held as a member of family of appellantno.1. The objection was rejected. The appellate authorityby its order dated 15-2-1977 recorded a finding thatappellant No. 2 was major on 9.9.1970, and accordingly,he was entitled to be treated as a separate family fromthat of appellant No.1, and that there was no surplus landin between the two families, namely, appellant no.1 andhis son appellant no.2. This order was not challenged bythe State by way of a revision and the said order attainedthe finality.

Subsequently, the Bihar Land Reforms (Fixation ofCeiling Area and Acquisition of Surplus Land)(Amendment) Act, 1982, came into force, pursuant towhich a fresh draft statement was issued and the ceilingwas re-determined, holding the family of the appellants(appellant no.1 and appellant no.2) to be one family. Thisorder was confirmed by the T ribunal. Aggrieved, theappellants moved the High Court by way of a writ petition.The Single Judge of the High Court noted that there wasa final order holding that the appellants were entitled tobe counted as two families, yet held that the said oldnotification/publication would be deemed to be operativeon the date of coming into force of the provisions ofs.32B of the Amendment Act. The Division Benchaffirmed the said order.

Allowing the appeal, the Court

HELD:1. The Single Judge of the High Court erredin taking the view that since there was no final publicationof draft statement under Section 11(1) of the Ceiling Actprior to coming into force of the provisions of Section 32Bof the Bihar Land Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) (Amendment) Act, 1982, theauthority was justified in disposing of the proceedingafresh in accordance with the provisions of Section 10of the Ceiling Act and passing final order upon theobjection filed under Section 10(3) of the Ceiling Act filedon behalf of the appellants. The Single Judge did not, inany manner, go into the merits of the matter nor did hegive effect to the order dated 15.12.1977, where it wasunequivocally held that the land holders were entitled tobe treated as two families. The whole course undertakenwas completely illogical and unjust. In view of Section11(1) of the Ceiling Act, there ought to have been thefinalization of draft statement and the publication thereof

after passing of the order dated 15.12.1977 altering theearlier published final statement. [Para 5] [969-B-E]

2. In the instant case, as noted by the High Court inthe LPA, the old draft statement was published when infact even the matter was not finally decided in betweenthe State and the land holders. Such draft statementwhich was published prematurely, could not be treatedas a proper draft statement and there could be nopublication thereof also. In fact, the Division Benchcorrectly noted that the publication, as contemplated, isto be made only after the disposal of the objection,appeal and revision and if the publication is made beforethe disposal of the objection or appeal or revision and nochange is brought in the draft statement by the disposalof the objection, the appeal or the revision, thepublication will hold good, but if any orders in suchobjection, appeal or revision bring about a change, thepublication will not hold good because the sub-Sectionmandates publication of a draft statement as changedwhile disposing of the objection or appeal or revision.The Division Bench has also drawn a correct conclusionholding that “by reason of the appellate order dated15.12.1977 final publication of the draft statement as wasmade prior thereto stood obliterated with the orderpassed on the objection, on the basis whereof the samehad been published.” The Division Bench, however,noted that no such draft statement was ever publishedaltering the earlier draft statement, and then proceededto hold that since there was no final publication made onthe basis of the order dated 15.12.1977, Section 32B cameinto operation and, therefore, there could be the initiationof the fresh proceedings in terms of that Section, whichis a completely erroneous view. In fact, after the orderdated 15.12.1977 was passed, it was not for the appellantsto do anything, but it was the duty of the State

Government to issue a final draft statement on the basisof that order and then to publish it in the light of the orderdated 15.12.1977, which duty emanated from the positivelanguage of Section 11(1) of the Act. It is not at all the faultof the land holders/appellants if the State Government didnot do anything for four years i.e. between 16.12.1977 and9.4.1981 when the Amendment Act came into force.Though the inaction on the part of the State Governmentis noted by the High Court, the Division Bench refusedto act upon it and went on to observe that “althoughthere is no just reason for the Collector not finallypublishing the draft statement immediately after theappellate order dated 15.12.1977 was passed, but stillthen in view of the mandate contained in Section 32B ofthe Act, fresh proceeding became necessary in respectof the land in question.” One cannot approve of suchapproach as it would be patently unjust to give apremium to the State Government on its inaction. Theappellants had nothing to do with the creating orpublishing of the draft statement. It was the duty of theState Government. If the State Government did not followits duty, it has to suffer and the appellants cannot bemade to suffer on account of the inaction shown by theState Government either deliberately or otherwise.Therefore, under the circumstances, Section 32B couldnot have been relied upon by the State Government andboth the Single Judge as well as the Division Bench haveerred in legalizing the subsequent reopening of theproceedings, which had come to a dead end on15.12.1977. [Paras 5, 6] [970-B-H; 971-A-H]

3. Even on the merits, the Division Bench hascommitted a patent error in treating the family as onefamily and proceeding to limit the entitlement of the familyholding to 18 acres. The father of appellant No. 1 wasalive on 9.9.1970 and appellant No. 1 was a major at that

time. Further, the major sons are not part of the family.The definition of the ‘family’ in Section 2(ee) of the Actclearly suggests that the major son would be outside thedefinition of ‘family’. In the instant case, on 9.9.1970, ‘B’was alive and so was appellant No. 1 was major. Evenotherwise, appellant No. 2 was also a major person in thefamily on 09.09.1970, as held by the appellate authorityvide order dated 15.12.1977. Thus, under no circumstancecould it be held to be a single family. The Division Benchtried to get over this by saying that there was no pleadingthat on or before 9.9.1970, there was any partitioneffected under the joint family and that appellant No. 1became individually entitled to holding any land Raiyat,but there is no question of treating appellant No. 1 not tobe a Raiyat, particularly, when appellant No. 1 and hisfather were the coparceners of a Mitakshara joint familyholding the land in question and, as such, each of themwere entitled to the land to the extent of their share. TheDivision Bench strangely held that they were only entitledto enforce their right by seeking disruption of the jointfamily by claiming and obtaining partition of the jointfamily properties;however, that having not been donetheir individual rights did not crystallize. The DivisionBench also mentioned further that though they had“floating right” in the land in question, but having regardto the explanation inserted to the definition of the word‘family’ in Section 2(ee) of the Act, such floating rightcould not be taken into consideration for determining thecomposition of the family for the purpose of the Act. Thisapproach is to be disapproved. The right of a coparcenercomes in his favour with his birth and considering thedefinition of ‘family’, which includes only a person, his/her spouse and minor children, the logic of the DivisionBench is erroneous. Explanation II to Section 2(ee) of theAct makes the matters clear when it says that personallaw shall not be relevant or be taken into consideration

in determining the composition of the family for thepurposes of the Act. Therefore, though it was a jointfamily of B’ and appellant No. 1 and thereafter ofappellant no.2, the rights of appellant Nos.1 and 2 ascoparceners would be intact. Further, since they weremajor on the relevant date, they could not have beenheld as member of one family and were entitled to betreated as independent families with the result that therewould be two families and the total land being only 33.95acres, there could be no surplus, as has been wronglyheld by the Courts below, particularly, after the reopeningof the proceedings under Section 32B of the AmendmentAct. On both counts, therefore, the High Court has erred.Therefore, it is held that since the order dated 15.12.1977has attained finality, there would be no question of anyfurther proceedings. [Para 7] [971-H; 972-A-B-E-H; 973-A-G]

From the Judgment & Order dated 30.11.2006 of the HighCourt of Patna in LPA No. 1483 of 1997.

Nagendra Rai, Shantanu Sagar, Smarhar, Gopi Ramanand T. Mahipal for the Appellants.

Gopal Singh and Manish Kumar for the Respondents.

V.S. SIRPURKAR, J . 1. Leave granted.

2. A judgment dismissing the Letters Patent Appeal andconfirming the order of the Single Judge has fallen forconsideration in this appeal. The learned Single Judge of theHigh Court had dismissed the Writ Petition. By order dated

965 966PITAMBAR SINGH AND ORS. v. STATE OF BIHARAND ORS. [V.S. SIRPURKAR, J.]

out that whatever may be the status on the relevant date underthe Ceiling Act, when the proceedings were taken, RabindraKumar Singh (appellant No. 2) was major on 9.9.1970 also andas such, he also was entitled to his own share and he couldnot be held as a member of family of Pitambar SIngh. Thisobjection was rejected by the order dated 31.10.1975. Anappeal was preferred against this order, wherein it was decidedthat the appellants should be treated as two families. However,this order was recalled and the appeal filed before the appellateauthority came to be dismissed by the order dated 30.6.1976.A revision was filed against this order, which stood allowed bythe order dated 10.5.1977, whereby the matter was remandedto the appellate authority for the purpose of determining the ageof Rabindra Kumar Singh (appellant No. 2 herein) as on9.9.1970. After the remand, the appellate authority, by its orderdated 15.12.1977, recorded a finding that Rabindra KumarSingh (appellant No. 2 herein) was major on 9.9.1970 andaccordingly, he was entitled to be treated as a separate familyfrom that of his father Pitambar Singh (appellant No. 1). It isvery significant to note that this order was never challenged bythe State by way of a revision and the said order attained thefinality. However, a draft statement under Section 11(1) of theCeiling Act was finally published and gazetted under Section15(1) of the Ceiling Act, on the basis of the old orders no draftstatement was published after passing of the order dated15.12.1977, which ought to have been published noting thechange made by the appellate authority, whereby RabindraKumar Singh (appellant No. 2) was treated to be a major andthat there was no surplus land in between two families, namely,of Pitambar Singh (appellant No. 1) and of his son RabindraKumar Singh (appellant No. 2).

5. It is apparent that on 9.4.1981, the amended Act cameinto force being Bihar Land Reforms (Fixation of Ceiling Areaand Acquisition of Surplus Land) (Amendment) Act, 1982(hereinafter called ‘the Amendment Act’). Two new Sectionswere introduced, they being 32A and 32B. They were as under:-

31.12.1983 passed by the Sub-Divisional Officer in CeilingCase No. 15 of 1973, the objection filed under Section 10(3)of the Bihar Land Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) Act, 1961 (hereinafter referred toas ‘the Ceiling Act’) was rejected. This order was confirmedby the District Collector vide order dated 21.5.1984 and wasfurther confirmed in the revision by Resolution dated 22.5.1986passed by the Additional Member, Board of Revenue. Theappellants moved the High Court by way of a Writ Petition beingC.W.J.C. No.3824 of 1986, which was dismissed by thelearned Single Judge. The appellants then filed a LettersPatent Appeal (LPA); however, in the LPA, all theaforementioned orders were confirmed.

3. In order to appreciate the contentions raised by ShriNagendra Rai, learned Senior Counsel appearing on behalf ofthe appellants, it is necessary to go into the facts of the case.

4. One Bhagwati Singh was the original land holder. Hisson was Pitambar Singh (appellant No. 1 herein) and PitambarSingh has two sons, namely, Rabindra Kumar Singh (appellantNo. 2 herein) and Jitendra Kumar Singh. Bhagwati Singh wasalive on 9.9.1970, which is the relevant date under the CeilingAct. Pitambar Singh (appellant No.1) and his wife and sonswere living with Bhagwati Singh. They were members of aMitakshara joint family and were having a total family holdingof 33.95 acres of class-II land. The ceiling fixed by the CeilingAct is 18 acres in respect of such land. The proceedings werestarted vide Ceiling Case No. 15 of 1973 against PitambarSingh (appellant No. 1); since, by that time, Bhagwati Singh,the father, had died. Still Pitambar Singh (appellant No. 1) alsohad a major son, Ravindra Singh. A draft statement was madeand published showing that Pitambar Singh (appellant No. 1)was entitled to retain only 18 acres of land and thus, the familywas holding 15.95 acres of land as surplus land. On the serviceof the draft statement, Pitambar Singh (appellant No. 1) filedobjections under Section 10(3) of the Ceiling Act. It was pointed

32A. Abatement of appeal, revision, review or reference:

An appeal, revision, review or reference other thanthose arising out of orders passed under Section8 or Sub-Section (3) of Section 16 pending beforeany authority on the date of commencement of theBihar Land Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) (Amendment) Act,1982, shall abate:

Provided further that such appeal, review orreference arising out of orders passed underSection 8 or sub-Section (3) of Section 16 as hasabated under Section 13 of Bihar Land Reforms(Fixation of Ceiling Area and Acquisition of SurplusLand) (Amendment) Ordinance, 1981 (BiharOrdinance No. 66 of 1981), shall standautomatically restored before the proper authorityon the commencement of this Act.

32B. Initiation of fresh proceeding:

All those proceedings, other than appeal, revision,review or reference referred to in Section 32Apending on the date of commencement of the BiharLand Reforms (Fixation of Ceiling Area andAcquisition of Surplus Land) (Amendment) Act,1982, and in which final publication under sub-Section (1) of Section 11 of the Act as it stoodbefore the amendment by aforesaid Act, had notbeen made, shall be disposed of afresh inaccordance with the provisions of Section 10 of theAct.

Very surprisingly, after coming into force of the AmendmentAct, a fresh draft statement was issued. The objection wasraised that such draft statement should never have beenissued. However, a re-determination was taken under Section

4A of the Ceiling Act as inserted by the Amendment Act andas such, a whole exercise was taken and it was enquiredwhether there was any transfer of land made in between22.10.1959 and 9.9.1970 or thereafter. In fact, in case of theappellants, no such transfer was effective in between those twodates. However, the objection filed to the said draft statementwas rejected by the order dated 31.12.1983, whereby againthe ceiling was re-determined holding the family of theappellants to be one family. This order was confirmed up to theTribunal’s order. These orders were challenged before thelearned Single Judge, who, though noted that there was a finalorder passed on 15.12.1977 holding that the appellants wereentitled to be counted as two families, yet held that because ofthe language of Section 32B, the State Government was entitledto reopen the case. The learned Single Judge took the viewthat there was already a final publication made under Section11(1) of the Ceiling Act prior to the passing of the order ofremand by the revisional authority and the same was notquashed by the appellate authority. The learned Judge,therefore, took the view that the said old notification/publicationwould be deemed to be operative on the date of coming intoforce of the provisions of Section 32B of the Amendment Act.The learned Judge went on to compare the matter with the civilcases relating to partition. The learned Judge also took a viewthat in view of the unequivocal language of Section 11(1) of theCeiling Act, the authority was required to make final publicationof draft statement in accordance with the order passed by itupon the objections, irrespective of the fact whether, accordingto the said order, the land holder was holding any surplus landor holding land within the ceiling limit specified under law. Theauthority in such case where the objection by the land holderis upheld has to make the draft statement and final publicationhas to be made to the effect that the land holder does notpossess surplus land. However, in those cases, whereobjection is either partially allowed or it is found that the landholder is possessing surplus land, it is incumbent upon theconcerned authority to make final publication of the draft

statement by making alteration therein and showing that theland holder was not possessing any surplus land. The learnedSingle Judge noted that no such step was taken for the finalpublication inspite of passing of the order dated 15.12.1977.The learned Judge, therefore, took the view that since there wasno final publication of draft statement under Section 11(1) ofthe Ceiling Act prior to coming into force of the provisions ofSection 32B of the Amendment Act, the authority was justifiedin disposing of the proceeding afresh in accordance with theprovisions of Section 10 of the Ceiling Act and passing finalorder upon the objection filed under Section 10(3) of the CeilingAct filed on behalf of the appellants. It is very significant to notethat the learned Single Judge did not, in any manner, go intothe merits of the matter nor did he give effect to the order dated15.12.1977, where it was unequivocally held that the landholders were entitled to be treated as two families. It waspointed out during the letters patent appeal that the wholecourse undertaken was completely illogical and unjust. Relyingon Section 11(1) of the Ceiling Act, it was reiterated before theDivision Bench in LPA that there ought to have been thefinalization of draft statement and the publication thereof afterpassing of the order dated 15.12.1977 altering the earlierpublished final statement.

6. In our opinion, this contention was absolutely right in viewof the language of Section 11(1) of the Ceiling Act, which runsas under:-

11. Final publication of draft statement:

(1) When the objection under sub-Section (3) of Section10, appeal and revision, if any, relating thereto havebeen disposed of, the Collector shall subject to theprovision of Section 15A(5) make such alterationin the draft statement as may be necessary to giveeffect to any order passed on the objection or onappeal or revision and shall cause the saidstatement with the alteration, if any, to be finally

published at such places and in such manner, asmay be prescribed under sub-Section (2) ofSection 10 and a copy thereof duly certified by theCollector in the prescribed manner shall be givento the land holder concerned.

Now, in this case, as has been noted by the High Court inthe LPA, it was the old draft statement published when in facteven the matter was not finally decided in between the Stateand the land holders. A specific contention was, therefore,raised that unless the controversy between the State and theland holders was completed, there could be no draft statement,much less, publication thereof. Such draft statement which waspublished prematurely, could not be treated as a proper draftstatement and there could be no publication thereof also. In fact,when we see the order passed by the Division Bench, it iscorrectly noted therein that the publication, as contemplated, isto be made only after the disposal of the objection, appeal andrevision and if the publication is made before the disposal ofthe objection or appeal or revision and no change is broughtin the draft statement by the disposal of the objection, theappeal or the revision, the publication will hold good, but if anyorders in such objection, appeal or revision bring about achange, the publication will not hold good because the sub-Section mandates publication of a draft statement as changedwhile disposing of the objection or appeal or revision. TheDivision Bench has also drawn a correct conclusion holding:-

“The logical conclusion, therefore, would be that by reasonof the appellate order dated 15.12.1977 final publicationof the draft statement as was made prior thereto stoodobliterated with the order passed on the objection, on thebasis whereof the same had been published.”

The Division Bench, however, noted that no such draftstatement was ever published altering the earlier draftstatement. Taking this in view, the Court then proceeded to holdthat since there was no final publication made on the basis of

the order dated 15.12.1977, Section 32B came into operationand, therefore, there could be the initiation of the freshproceedings in terms of that Section. In our opinion, this is acompletely erroneous view. In fact, after the order dated15.12.1977 was passed, it was not for the appellants to doanything, but it was the duty of the State Government to issuea final draft statement on the basis of that order and then topublish it in the light of the order dated 15.12.1977, which dutyemanated from the positive language of Section 11(1) of theCeiling Act. It is not at all the fault of the land holders/appellantsif the State Government did not do anything for four years i.e.between 16.12.1977 and 9.4.1981 when the Amendment Actcame into force. Though the inaction on the part of the StateGovernment is noted by the High Court, the Division Benchrefused to act upon it and went on to observe:-

“Thus although there is no just reason for the collector notfinally publishing the draft statement immediately after theappellate order dated 15.12.1977 was passed, but stillthen in view of the mandate contained in Section 32B ofthe Act, fresh proceeding became necessary in respectof the land in question.”

We do not approve of such approach as it would bepatently unjust to give a premium to the State Government onits inaction. We reiterate that the appellants had nothing to dowith the creating or publishing of the draft statement. It was theduty of the State Government. If the State Government did notfollow its duty, it has to suffer and the appellants cannot bemade to suffer on account of the inaction shown by the StateGovernment either deliberately or otherwise. We, therefore,under the circumstances, hold that Section 32B could not havebeen relied upon by the State Government and both the learnedSingle Judge as well as the Division Bench have erred inlegalizing the subsequent reopening of the proceedings, whichhad come to a dead end on 15.12.1977.

7. This is apart from the fact that even on the merits, the

Division Bench has committed a patent error in treating thefamily as one family and proceeding to limit the entitlement ofthe family holding to 18 acres. It was an admitted position thatthe father of Pitambar Singh (appellant No. 1 herein) was aliveon 9.9.1970. There is further no dispute that Pitambar Singh(appellant No. 1 herein) was a major at that time. Further, therecan be no dispute again that the major sons are not part of thefamily. The definition of the ‘family’ runs as under:-

“’family’ means and includes a person, his or her spouseand minor children.

Explanation I – In this clause the word personincludes any company, institution, trust association orbody of individuals whether incorporated or not;

Explanation II – The personal law shall not berelevant or be taken into consideration in determining thecomposition of the family for the purposes of the Act”

Therefore, the language clearly suggests that the major sonwould be outside the definition of ‘family’. In this case, on9.9.1970, Bhagwati Singh was alive and so was PitambarSingh (appellant No. 1 herein) was major. Even otherwise,Rabindra Kumar Singh (appellant No. 2 herein) was also amajor person in the family on 09.09.1970, as held by theappellate authority vide order dated 15.12.1977. Thus under nocircumstance could it be held to be a single family. The DivisionBench has tried to get over this by saying that there was nopleading that on or before 9.9.1970, there was any partitioneffected under the joint family and that Pitambar Singh(appellant No. 1 herein) became individually entitled to holdingany land Raiyat. Now, there is no question of treating PitambarSingh (appellant No. 1 herein) not to be a Raiyat, particularly,when Pitambar Singh (appellant No. 1 herein) and his fatherwere the coparceners of a Mitakshara joint family holding theland in question and as such, each of them were entitled to theland to the extent of their share. The Division Bench has

973PITAMBAR SINGH AND ORS. v. STATE OF BIHARAND ORS. [V.S. SIRPURKAR, J.]

strangely held that they were only entitled to enforce their rightby seeking disruption of the joint family by claiming andobtaining partition of the joint family properties; however, thathaving not been done their individual rights did not crystallize.The Division Bench also mentioned further that though they had“floating right” in the land in question, but having regard to theexplanation inserted to the definition of the word ‘family’, suchfloating right could not be taken into consideration fordetermining the composition of the family for the purpose of theAct. We disapprove of this approach. The right of a coparcenercomes in his favour with his birth and considering the definitionof ‘family’, which includes only a person, his/her spouse andminor children the logic of the Division Bench is erroneous.Explanation II makes the matters clear when it says thatpersonal law shall not be relevant or be taken into considerationin determining the composition of the family for the purposesof the Act. Therefore, it will be clear that though it was a jointfamily of Bhagwati Singh and Pitambar Singh (appellant No.1) and thereafter of Ravindra Singh, the rights of PitambarSingh (appellant No.1) and Ravindra Singh as coparcenerswould be intact. Further, since they were major on the relevantdate, they could not have been held as member of one familyand were entitled to be treated as independent families withthe result that there would be two families and the total landbeing only 33.95 acres, there could be no surplus, as has beenwrongly held by the Courts below, particularly, after thereopening of the proceedings under Section 32B of theAmendment Act. On both counts, therefore, the High Court haserred. We, therefore, allow this appeal, set aside all the ordersstarting from the order dated 31.12.1983 and hold that sincethe order dated 15.12.1977 has attained finality, there wouldbe no question of any further proceedings.

8. The appeal is allowed in terms of what is stated above.

B.B.B. Appeal allowed.

HAR NARAIN (DEAD) BY LRS.v.

MAM CHAND (DEAD) BY LRS. AND ORS.(Civil Appeal Nos. 995-996 of 2003)

OCTOBER 8, 2010

[P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.]

Specific Relief Act, 1963 – s.19(b) – Protection under –Scope – Landed property – Respondent no.1-owner enteredinto agreement for sale with appellant – But subsequentlyexecuted sale deed in respect of same property in favour ofrespondent nos.2 to 6 – Appellant filed suit for specificperformance against respondent no.1 – Sale deed executedin favour of respondent nos.2 to 6 registered subsequent toinstitution of the suit – Trial Court dismissed the suit holdingthat the sale deed executed in favour of respondent nos.2 to6 was not subject to the doctrine of lis pendens, and, thatrespondent nos. 2 to 6 were bonafide purchasers forconsideration without notice – Order upheld by first appellatecourt and High Court – Justification of – Held: Not justified –The sale executed by respondent No.1 in favour ofrespondent Nos. 2 to 6 could not be termed as a completesale until the document got registered – In view of s.47 of theRegistration Act, the registration related back to the date ofexecution but it does not mean that sale would be completein favour of respondent Nos. 2 to 6 prior to the date ofregistration of the sale deed – As the sale stood completedduring the pendency of the suit, doctrine of lis pendens isapplicable – Moreover, appellant had been in possession ofthe suit land since long and this fact had also been mentionedby respondent No.1 in the sale deed in favour of respondentNos. 2 to 6, therefore, the question of respondent Nos. 2 to 6being bonafide purchasers for value and having paid moneyin good faith without notice does not arise – Respondents

[2010] 12 S.C.R. 974

975 976HAR NARAIN (DEAD) BY LRS. v. MAM CHAND(DEAD) BY LRS. AND ORS.

Allowing the appeals, the Court

HELD:1.1. Section 54 of the T ransfer of Property Act,1882, mandatorily requires that the sale of any immovableproperty of the value of hundred rupees and upward canbe made only by a registered instrument. Section 47 ofthe Registration Act, 1908, provides that registration ofthe document shall relate back to the date of theexecution of the document. The aforesaid two provisionsmake it crystal clear that sale deed in question requiresregistration, and even if registration had been donesubsequent to the filing of Suit, it related back to the dateof execution of the sale deed, which was prior toinstitution of the Suit. However, in the instant case, inspite of the fact that the registration of the sale deedwould relate back to the date of execution, the salecannot be termed as complete until its registration and itbecomes effective only once it stands registered. Thus,the fiction created by Section 47 of the Registration Act,1908, does not come into play before the actualregistration of the document takes place. [Paras 9, 11][983-C-D; 984-F-G]

1.2. The doctrine of lis pendens would apply in theinstant case, as the registration of the sale deed wassubsequent to filing of the suit and subsequentpurchasers i.e., respondent Nos. 2 to 6, cannot claimbenefit of the provisions of Section 19(b) of the SpecificRelief Act, 1963. The sale deed in favour of respondentNos.2 to 6 clearly disclosed that the suit land had beenmortgaged to the appellant and it was in his possessionsince 1970. The subsequent purchaser has to be awarebefore he purchases the suit property. Thus, respondentNos. 2 to 6 could not be held to be bona fide purchasersfor value paid in good faith without notice of the originalcontract and the sale in their favour was subject to thedoctrine of lis pendens . Legal maxim, pendente lite, nihil

No.2 to 6, therefore, cannot take the benefit of the provisionsof s.19(b) of the Specific Relief Act – Transfer of Property Act,1882 – s.54 – Registration Act, 1908 – s.47 – Doctrines –Doctrine of lis pendens.

Maxim – ‘pendente lite, nihil innovetur’ – Applicability of.

Respondent no.1-owner entered into an agreementfor sale with the appellant in respect of certain landedproperty. However, subsequently, on 2.8.1971,respondent No.1 executed a sale deed in respect of thesame property in favour of respondent nos.2 to 6.

Aggrieved, the appellant filed a suit for specificperformance against respondent no.1. The sale deedexecuted in favour of respondents 2 to 6 was registeredsubsequent to the institution of the suit (on 3-9-1971). Thetrial court dismissed the suit holding that the sale deedwould be deemed to have come into force on 2-8-1971,as the registration thereof dated 3-9-1971 would relateback to the date of execution (by virtue of the applicationof the provisions of Section 47 of the Registration Act,1908) which was prior to institution of the suit for specificperformance and thus, the doctrine of lis pendens wouldnot apply; and that respondents 2 to 6 were bona fidepurchasers for consideration without notice and,therefore, the sale deed in their favour was to beprotected. The order was upheld by the first appellatecourt as well as the High Court.

The questions for consideration in the instant appealwere: 1) whether the sale deed executed by respondentNo.1 in favour of respondent nos.2 to 6 could be subjectto the doctrine of lis pendens and 2) whether respondentnos.2 to 6 could held to be vendees without notice of anagreement to sell in favour of the appellant byrespondent no.1.

innovetur ; provides that as to the rights of the parties tothe litigation, “ the conveyance is treated as if it never hadany existence; and it does not vary them. ” [Paras 13, 14,15] [985-H; 986-B; 987-B-C]

1.3. The sale executed by respondent No.1 in favourof respondent Nos. 2 to 6 on 2.8.1971 could not be termedas a complete sale until the document was got registeredon 3.9.1971. In view of the provisions of Section 47 of theRegistration Act, 1908, the effect of registration would bethat registration would relate back to the date ofexecution but it does not mean that sale would becomplete in favour of respondent Nos. 2 to 6 prior to3.9.1971 i.e. the date of registration of the sale deed. Assale stood completed during the pendency of the suit,doctrine of lis pendens is applicable in the facts andcircumstances of the case. The courts below failed toappreciate that the fiction created by Section 47 of theRegistration Act 1908, itself is a consequence ofregistration of the sale deed. More so, as the appellanthad been in possession of the suit land being amortgagee since 1970 and this fact had also beenmentioned by the respondent No.1 in the sale deed dated2.8.1971 in favour of respondent Nos. 2 to 6, the questionof respondent Nos. 2 to 6 being bonafide purchasers forvalue and paid money in good faith without having noticeof the interest of the appellant does not arise, simply forthe reason that the said respondents were fully aware thatthe suit land was in possession of the appellant. Thus,the respondents No.2 to 6 cannot take the benefit of theprovisions of Section 19(b) of the Act, 1963. [Para 17] [987-G-H; 988-A-D]

Guruswamy Nadar v. P. Lakshmi Ammal (Dead) ThroughLRs. & Ors. (2008) 5 SCC 796 and R.K. MohammedUbaidullah & Ors. v. Hajee C. Abdul Wahab (Dead) by LRs.& Ors. AIR 2001 SC 1658 – relied on.

Ram Saran Lall & Ors. v. Mst. Domini Kuer & Ors. AIR1961 SC 1747; Hiralal Agrawal Etc. v. Rampadarath Singh& Ors. Etc. AIR 1969 SC 244; S.K. Mohammad Rafiq (Dead)by LRs. v. Khalilul Rehmad & Anr. Etc. AIR 1972 SC 2162;Thakur Kishan Singh (Dead) v. Arvind Kumar AIR 1995 SC73; Chandrika Singh (Dead) by LRs. v. Arvind Kumar Singh(Dead) by LRs. & Ors. AIR 2006 SCC 2199;– referred to.

2. The respondents are directed to execute the saledeed in favour of the appellant to the extent of land, forwhich the agreement to sell was executed. However, inorder to meet the ends of justice, it is held thatrespondent Nos. 2 to 6 shall be entitled to receive theamount paid by them to respondent No.1 asconsideration along with 10% interest per annum on thesame. Respondent No.1 shall be entitled to redeem theland over and above the extent of land in respect of whichthe agreement to sell had been executed, if any, inaccordance with law. [Para 18] [988-E-F]

Case Law Reference:

AIR 1961 SC 1747 referred to Para 9

AIR 2006 SCC 2199 referred to Para 10

AIR 2001 SC 1658 relied on Para 14

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 995-996 of 2003.

From the Judgment & Order dated 9.10.2001 of the High

Court of Punjab and Haryana at Chandigarh in RSA No. 1545of 1979.

Dhruv Mehta, Shobha, Mohinder P. Thakur and Ridima forthe Appellants.

R.K. Kapoor, Harish Pant and Anis Ahmed Khan for theRespondents.

DR. B.S. CHAUHAN, J. 1. These appeals have beenpreferred against the judgments and orders dated 9.10.2001and 9.9.2002 passed by the High Court of Punjab & HaryanaHigh Court at Chandigarh in R.S.A. No.1545 of 1979dismissing the Regular Second Appeal, as well as the ReviewApplication, filed by the appellant concurring with the judgmentsand orders of the trial Court as well as of the First AppellateCourt on all issues raised in the case.

2. Facts and circumstances giving rise to these appealsare that the defendant/respondent No.1-Mam Chand (sincedeceased through LRs.) (hereinafter called the ‘respondent’)was the owner of land admeasuring 22 kanals situate within theRevenue estate of Village Asraka Majra, District Riwari,Haryana. The said respondent had mortgaged the entire landin favour of the predecessor-in-interest of the appellant, namely,Har Narain (since deceased and now represented through hisLRs.) for Rs.7,000/-. The appellant was also put in possessionof the said land. The respondent No.1entered into anAgreement for Sale of 8 kanals of the said property with theappellant for Rs.7500/- and he received Rs.200/- as earnestmoney in cash while a sum of Rs.7000/- to be adjusted asmortgage amount. However, the said respondent No.1executed the sale deed on 2.8.1971 in favour of respondentnos.2 to 6.

3. Being aggrieved, the appellant filed Suit No.172 of 1971,

for specific performance against the respondent no.1 forexecuting the sale deed of the land in question on 10.8.1971and the trial Court restrained him from alienating the suitproperty by any means. Respondent no.1 moved an applicationdated 16.8.1971 for vacating/modifying the interim order dated10.8.1971 wherein he disclosed that the entire land in disputehad already been alienated in favour of respondent nos.2 to 6.However, the sale deed executed in favour of the saidrespondents was registered on 3.9.1971. The suit wascontested by the respondents on various grounds, however, thetrial Court dismissed the suit vide judgment and decree dated4.9.1973 on various grounds, inter alia, that sale deed deemedto have come into force on 2.8.1971, as the registration thereofdated 3.9.1971 would relate back to the date of executionwhich had been prior to institution of the suit and thus, thedoctrine of lis pendens would not apply. The said respondents2 to 6 were bona fide purchasers for consideration withoutnotice. Therefore, the sale deed in their favour was to beprotected.

4. Being aggrieved, the appellant filed First Appeal No.508of 1973, however, the same was dismissed by the FirstAppellate Court vide judgment and decree dated 22.3.1979.The appellant further approached the High Court by filing theRegular Second Appeal No.1545 of 1979 which wasdismissed by the High Court vide judgment and order dated9.10.2001. However, as none had appeared on behalf of theappellant on the said date before the High Court, the appellantfiled the application to recall the said judgment and order dated9.10.2001 under Order 41 Rule 19 read with Section 151 ofthe Code of Civil Procedure, 1908 (hereinafter called ‘CPC’).The said application was allowed vide order dated 9.9.2002and the matter was heard afresh on merit on the same day. TheCourt agreed with the proposition laid down by the courts belowthat principles of lis pendens would not apply in the facts andcircumstances of this case as the sale deed has been executed

981 982HAR NARAIN (DEAD) BY LRS. v. MAM CHAND(DEAD) BY LRS. AND ORS. [DR. B.S. CHAUHAN, J.]

before the filing of the suit though, the same was got registeredsubsequent to the institution of the suit. Hence, these appeals.

5. Shri Dhruv Mehta, learned Senior counsel appearing forthe appellant has submitted that the courts below reached theconclusion that doctrine of lis pendens was not applicable inthe facts of the case merely on the ground that the sale deedhas been executed by the respondent No.1 in favour ofrespondent nos.2 to 6 prior to institution of the suit and theregistration of the sale deed would relate back to the date ofexecution by virtue of the application of the provisions ofSection 47 of the Registration Act, 1908 (herein after called the‘Act 1908’) without taking note of the fact that the execution ofa sale deed of immovable property of more than Rs.100/- invalue is not capable to transfer the title unless the deed isregistered as required under Section 52 of the Transfer ofProperty Act, 1882 (hereinafter called the ‘Act, 1882) andSection 17 of the ‘Act 1908. In case, the appellant had been inthe possession of the suit land being the mortgagee of theentire property since long, the question of protection underSection 19(b) of the Specific Relief Act, 1963 (hereinaftercalled the ‘Act 1963’) to the respondent nos.2 to 6 that theywere bonafide purchasers for value and paid money in goodfaith without notice of the earlier contract, becomes meaninglessfor the reason that they had a notice that the land was inpossession of the appellant and this fact had also beenmentioned by the respondent No.1 in the sale deed dated2.8.1971 in their favour. Thus, the appeals deserve to beallowed.

6. On the contrary, Shri R.K. Kapoor, learned counselappearing for the respondents has vehemently opposed theappeals contending that there are concurrent findings of factby three courts and this Court being the fourth court should notre-appreciate the factual matrix of the case and interfere in theappeals. The sale deed might have been registered at a laterstage but the document becomes effective from the date of its

execution. The findings so recorded by the courts below do notrequire any interference. The appeals lack merit and are liableto be dismissed.

7. We have considered the rival submissions made bylearned counsel for the parties and perused the records.

Admitted facts remain that the entire land admeasuring 22kanals had been mortgaged by Mam Chand, respondent No.1in favour of appellant vide deed dated 30.6.1970 and theappellant had been put in possession thereof. The possessionof the land is with the appellant since 1970. An agreement tosell was entered into between the appellant and respondentNo.1 on 25.5.1971. Sale deed was executed by the respondentNo.1 in favour of respondent nos.2 to 6 on 2.8.1971 and thesaid sale deed was got registered on 3.9.1971. The suit hadbeen filed on 10.8.1971 i.e. subsequent to the date of executionof the sale deed and before the registration thereof on3.9.1971. The trial court also passed an ex-parte order dated10.8.1971 restraining the respondent No.1 from alienating thesuit land, however it was subsequently modified vide orderdated 31.8.1971.

The basic questions arise as to whether in the fact-situationof this case, the sale deed executed by the respondent No.1in favour of respondent nos.2 to 6 could be subject to thedoctrine of lis pendens and in case the appellant had been inpossession of the suit land being mortgagee since 1970, therespondent nos.2 to 6 can be held to be vendees without noticeof an agreement to sell in favour of the appellant by therespondent no.1.

8. All the courts below have proceeded on the presumptionthat as the registration of a document relates back to the dateof execution and in the instant case though the registration wassubsequent to institution of the suit, it would relate back to theexecution of the deed and the doctrine of lis pendens wouldnot apply. Further, without considering the fact that the appellant

had been in possession of the suit land since 1970, though,this fact had been mentioned in the sale deed in favour ofrespondent nos.2 to 6 by the respondent No.1 whether it couldbe held that they were not put to notice of the fact that theappellant had some interest in the property and whether in suchfact-situation the respondent nos.2 to 6 may be entitled forbenefit of the provisions of Section 19 of the Act, 1963.

9. Section 54 of the Act, 1882, mandatorily requires thatthe sale of any immovable property of the value of hundredrupees and upward can be made only by a registeredinstrument. Section 47 of the Act, 1908, provides thatregistration of the document shall relate back to the date of theexecution of the document. Thus, the aforesaid two provisionsmake it crystal clear that sale deed in question requiresregistration. Even if registration had been done subsequent tothe filing of Suit, it related back to the date of execution of thesale deed, which was prior to institution of the Suit. A similarissue though in a case of right of pre-emption was consideredby the Constitution Bench of this Court in Ram Saran Lall &Ors. v. Mst. Domini Kuer & Ors., AIR 1961 SC 1747, by themajority of 3:2, the Court came to the conclusion that as themere execution of the sale deed could not make the sameeffective and registration thereof was necessary, it was of noconsequence unless the registration was made. Thus, in spiteof the fact that the Act, 1908, could relate back to the date ofexecution in view of provisions of Section 47 of the Act, 1908,the sale could not be given effect to prior to registration.However, as the sale was not complete until the registration ofinstrument of sale is complete, it was not completed prior tothe date of its registration. The court held:

“Section 47 of the Registration Act does not, however, saywhen sale would be deemed to be complete. It only permitsa document when registered, to operate from a certaindate which may be earlier than the date when it wasregistered. The object of this section is to decide which

of two or more registered instruments in respect of thesame property is to have effect. The section applies to adocument only after it has been registered. It has nothingto do with the completion of the registration and therefore,nothing to do with the completion of a sale when theinstrument is one of sale. A sale which is admittedly notcompleted until the registration of the instrument of sale iscompleted, cannot be said to have been completed earlierbecause by virtue of Section 47 the instrument by which itis effected, after it has been registered, commences tooperate from an earlier date. Therefore, we do not thinkthat the sale in this case can be said, in view of Section47 to have been completed on January 31, 1946.”(Emphasis added).

10. This view has subsequently been followed andapproved by this Court as is evident from the judgments inHiralal Agrawal Etc. v. Rampadarath Singh & Ors. Etc., AIR1969 SC 244; S.K. Mohammad Rafiq (Dead) by LRs. V.Khalilul Rehmad & Anr. Etc., AIR 1972 SC 2162; ThakurKishan Singh (Dead) v. Arvind Kumar, AIR 1995 SC 73; andChandrika Singh (Dead) by LRs. V. Arvind Kumar Singh(Dead) by LRs. & Ors., AIR 2006 SCC 2199.

11. However, all these cases are related to right to pre-emption though the legal issue involved therein remained thesame. In view of the above, we are of the considered opinionthat in spite of the fact that the registration of the sale deedwould relate back to the date of execution, the sale can not betermed as complete until its registration and it becomeseffective only once it stands registered. Thus, the fiction createdby Section 47 of the Act, 1908, does not come into play beforethe actual registration of the document takes place.

12. In Guruswamy Nadar v. P. Lakshmi Ammal (Dead)Through LRs. & Ors., (2008) 5 SCC 796, this Court dealt witha similar issue and considered the effect of doctrine of lispendens and the provisions of Section 19(b) of the Act, 1963.

Facts of the said case had been that an agreement to sellstood executed between the first purchaser and owner of theland on 4th July, 1974 for a sum of Rs.30,000/- and a sum ofRs.5,000/- was given as advance. The remaining amount wasto be paid before 31st July, 1974. As the said amount was notpaid, the owner again sold the suit property to another party(appellant) on 5th May, 1975 for a sum of Rs.45,000/- andpossession of the suit property was handed over to theappellant therein. Thus, the first purchaser filed the suit forenforcement of the specific performance of the contract. Thetrial court dismissed the Suit holding that the agreement wasgenuine and appellant was a bona fide purchaser for valuepaid in good faith, without notice of the earlier agreement,therefore, no decree for specific performance could be passedin favour of the plaintiff therein. The First Appellate Courtreversed the said judgment and decree. The Second Appealwas dismissed by the High Court. This Court considered theprovisions of Section 52 of the Act, 1882, and Section 19 (b)of the Act, 1963, and held that as the subsequent sale wassubsequent to the filing of the Suit, Section 19(b) of the Act1963 read with Section 52 of the Act, 1882, could not grant anybenefit to the subsequent purchaser and the subsequent salewas subject to the doctrine of lis pendens. Second sale couldnot have the overriding effect on the first sale. The Court heldas under:

“So far as the present case is concerned, it is apparentthat the appellant who is a subsequent purchaser of the sameproperty, has purchased in good faith but the principle of lispendens will certainly be applicable to the present casenotwithstanding the fact that under Section 19(b) of the SpecificRelief Act his right could be protected.”

13. In view of the above, it is evident that doctrine of lispendens would apply in the present case as the registration ofthe sale deed was subsequent to filing of the Suit andsubsequent purchasers i.e. respondent Nos. 2 to 6 cannot

claim benefit of the provisions of Section 19(b) of the Act, 1963.

14. So far as the issue of notice of first sale to respondentNos. 2 to 6 is concerned, it has to be examined bearing in mindthat the sale deed in favour of the respondent Nos. 2 to 6 clearlydisclosed that the Suit land had been mortgaged to theappellant and it was in his possession since 1970. In R.K.Mohammed Ubaidullah & Ors. v. Hajee C. Abdul Wahab(Dead) by LRs. & Ors., AIR 2001 SC 1658, this Courtconsidered a similar case wherein the question had arisen asto whether the vendees of subsequent sale were bona fidepurchasers of the suit property in good faith for value withoutnotice of original contract and whether they were not requiredto make any inquiry as to the equitable or further interest of theother party at the time of execution of sale in their favour. In viewof the fact that they had been aware that the land was inpossession of first purchaser, the Court took note of thedefinition of “notice” as provided in Section 3 of the Act, 1882,and particularly Explanation II thereof for deciding the case. Thesaid Explanation reads:

“Any person acquiring any immovable property or anyshare or interest in any such property shall be deemedto have notice of title, if any, of any person who is for thetime being in actual possession thereof.”

This Court came to the conclusion that in view of Section19(b) of the Act, 1963 and definition of “notice” contained underSection 3 of the Act, 1882, it could not be held that thesubsequent purchasers were bona fide purchasers in goodfaith for value without notice of the original contract and theywere required to make inquiry as to the nature of thepossession or title or further interest, if any, of the other partyover the suit property at the time when they entered into saletransaction, notwithstanding, that they were already aware thatthe other party was in possession of the suit property as thetenant. Thus, what is material is the inquiry at the time whensubsequent sale transaction was entered into.

HAR NARAIN (DEAD) BY LRS. v. MAM CHAND(DEAD) BY LRS. AND ORS. [DR. B.S. CHAUHAN, J.]

987 988

15. The instant case is squarely covered by the aforesaidjudgment, so far as this issue is concerned. The subsequentpurchaser has to be aware before he purchases the suitproperty. Thus, we are of the considered opinion thatrespondent Nos. 2 to 6 could not be held to be bona fidepurchasers for value paid in good faith without notice of theoriginal contract and the sale in their favour was subject to thedoctrine of lis pendens. Legal maxim, pendente lite, nihilinnovetur; provides that as to the rights of the parties to thelitigation, “the conveyance is treated as if it never had anyexistence; and it does not vary them.”

16. It has half-heartedly been argued by Shri Kapoor,learned counsel for the respondents that respondent Nos. 2 to6 are the first purchasers as there was an agreement to sellexecuted in their favour on 19.2.1971 and he had taken usthrough the judgments of the trial court as well as the FirstAppellate Court where passing remarks have been made bythe courts in respect of the same on the basis of the writtenstatement filed by the respondent No.1, though this point hasnot been agitated by the respondent Nos. 2 to 6, nor any issuehad been framed in this respect either by the trial court or asan additional issue by the First Appellate Court. In view of thefact that the respondent No.1 has been executing documentsin respect of the same land in favour of different persons as isevident from the record, the contention raised by Shri Kapooris not worth consideration.

17. In view of the above, we reach the inescapableconclusion that the sale executed by respondent No.1 in favourof respondent Nos. 2 to 6 on 2.8.1971 could not be termed asa complete sale until the document got registered on 3.9.1971.In view of the provisions of Section 47 of the Act, 1908 theeffect of registration would be that registration would relateback to the date of execution but it does not mean that salewould be complete in favour of respondent Nos. 2 to 6 prior to3.9.1971 i.e. the date of registration of the sale deed. In view

of the above, as sale stood completed during the pendency ofthe suit, doctrine of lis pendens is applicable in the facts andcircumstances of the case. The courts below failed toappreciate that the fiction created by Section 47 of the Act1908, itself is a consequence of registration of the sale deed.More so, as the appellant had been in possession of the suitland being a mortgagee since 1970 and this fact had also beenmentioned by the respondent No.1 in the sale deed dated2.8.1971 in favour of respondent Nos. 2 to 6, the question ofrespondent Nos. 2 to 6 being bonafide purchasers for valueand paid money in good faith without notice does not arise,simply for the reason that the said respondents were fully awarethat the suit land was in possession of the appellant. Thus, therespondents No.2 to 6 cannot take the benefit of the provisionsof Section 19(b) of the Act, 1963.

18. In view of the above, the appeal succeeds and isallowed. The judgment and decree of the courts below are setaside. The respondents are directed to execute the sale deedin favour of the appellant to the extent of land, for which theagreement to sell was executed within a period of three monthsfrom today. However, in order to meet the ends of justice it isnecessary to hold that respondent Nos. 2 to 6 shall be entitledto receive the amount paid by them to the respondent No.1 asconsideration along with 10% interest per annum on the same.The respondent No.1 shall be entitled to redeem the land overand above the extent of land in respect of which the agreementto sell had been executed, if any, in accordance with law. Thereshall be no order as to costs.

B.B.B. Appeals allowed.

990[2010] 12 S.C.R. 989

PANKAJAKSHI (DEAD) THROUGH LRS. AND ORS.v.

CHANDRIKA AND ORS.(Civil Appeal No. 201 of 2005)

NOVEMBER 8, 2010

CODE OF CIVIL PROCEDURE, 1908:

s. 98(2) – Decision by Division Bench of High Court –Difference of opinion between the two Judges comprising theBench – Procedure to be adopted – Matter referred to largerBench for consideration on the questions: (i) whether s. 23 ofTravancore-Cochin High Court Act remains unaffected by therepealing provisions of s. 9 of Kerala High Court Act? If so,whether s. 23 is in the nature of a special provision vis-à-viss. 98 (2) CPC? and (ii) whether the Supreme Court underArticles 136 and 142 of the Constitution can direct in anappropriate case a reference to a third Judge to resoleve theconflict arising between two Judges of the High Court hearingan appeal, on a question of fact? – Travancore-Cochin HighCourt Act – s. 23 – Kerala High Court Act – s. 9 – Constitutionof India, 1950 – Articles 136 and 142.

The instant appeal was filed challenging the orderpassed by the Division Bench of the Kerala High Courtdismissing an appeal against the decree passed by thetrial court, as there was difference of opinion between thetwo Judges comprising the Bench, as regardsgenuineness of the will. It was contended for theappellant that since there was difference of opinionbetween the two Judges of the High Court, the appealshould have been referred to the Chief Justice for placingit before one or more other Judges.

The Court noticed the decision of a two Judge Benchin Tej Kaur * to the effect that in the case of difference ofopinion between the two Judges in a Division Bench ofthe High Court hearing an appeal on a question of fact,the decree of the trial court must be confirmed in view ofs. 98 (2) CPC. The Court also noticed the three JudgeBench decision in P.V. Hemlatha ** wherein it was furtherheld that while s. 23 of the T ravancore-Cochin High CourtAct was the general law, s. 98 (2) CPC was a specialprovision.

Referring the matter to a larger Bench, the Court

HELD: 1 .1. Section 23 of the T ravancore-Cochin Actis in the nature of a special provision while s. 98 (2) CPCis in the nature of a general law. As between the two, theformer would apply in preference to the latter. Thedecision of this Court in P.V. Hemlatha** to the extent ittakes a contrary view, requires to be reconsidered. [para8] [994-H; 995-A-B]

*Tej Kaur and Anr vs Kirpal Singh and Anr. [1995] SCR385=1995 (5) SCC 119 and ** P.V. Hemlatha vs KattamkandiPuthiva Maliackal Saheeda and Anr 2002 ( 3 ) SCR 1098 =AIR 2002 SC 2445 – referred to .

1.2. That apart, the question whether in an appealarising out of an order passed by the High Court to whichs. 98 (2) CPC applies, this Court can, in exercise of itspower under Article 136 of the Constitution of India directthe matter to be placed before a third Judge to resolvethe conflict arising from two differing judgments, has notbeen examined either in P. V. Hemlatha or Tej Kaur. ThisCourt, therefore, considers it appropriate to refer to alarger Bench for consideration and an authoritativepronouncement, the following two questions:

991 992PANKAJAKSHI (DEAD) THROUGH LRS. AND ORS.v. CHANDRIKA AND ORS.

(i) Whether s. 23 of the T ravancore-Cochin Actremains unaffected by the repealing provisions of s.9 of the kerala High Court Act? If so, whether s. 23 isin the nature of a special provision is-a-vis s. 98 (2)CPC?

(ii) Whether this Court can under Articles 136 and 142of the Constitution direct in any appropriate case areference to a third judge to resolve the conflictarising between two judges of the High Court hearingan appeal, on a question of fact? [para 9] [995-B-F]

Case Law Reference:

2002 (3) SCR 1098 referred to para 5

[1995] SCR 385 referred to para 6

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 201of 2005.

From the Judgment & Order dated 20.8.2004 of the HighCourt of Kerala at Ernakulam in A.S. No. 686 of 1995 (C).

V. Giri, T.G. Narayanan Nair, Mohammed Sadique T.A.,K.N. Madhusoodhanan for the Appellants.

Jayaprakash Sen, Malini Poduval, Babita Sant, M.T.George for the Respondents.

MARKANDEY KATJU, J . 1. Heard learned counsel forthe parties.

2. The facts of the case are that the respondent hereinChandrika filed a suit before the Sub Judge, Kottayam, Kerala,alleging that her father Raghavan died intestate on 18.06.1984.The plaintiff alleged that the defendants were relying on the will

dated 14.06.1984 which was not a genuine will of Raghvan. Onthe other hand, the defendants alleged that the will was genuine.The Trial Court by its judgment dated 07.09.1994 held that thedefendants failed to prove that the will in question was a trueand genuine will of Raghavan.

3. Consequently, the trial court decreed the suit ofChandrika. The appellant herein challenged the judgment of thetrial court in an appeal which came up before a Division Benchof the Kerala High Court. One of the Hon’ble Judges who heardthe appeal was of the view that the will was genuine while theother held that it was not. Consequently the Division Bench byits judgment and order dated 20.08.2004 dismissed the appealrelying on Section 98 (2) CPC. It is this judgment and orderwhich is challenged before us.

4. Learned counsel for the appellant submitted that sincethere was a difference of opinion between the two Hon’bleJudges of the High Court, the appeal should have been referredto the Hon’ble the Chief Justice for placing it before one ormore other Judges. However, learned counsel for therespondent submitted that in view of the proviso to Section 98(2) the reference to one or more other Judges can only bemade when there is difference of opinion between the twoJudges on a point of law. He submitted that since the differenceof opinion was on a question of fact no reference could havebeen made to one or more other Judges, and the appeal shouldhave been dismissed in view of the main part of Section 98(2) CPC. Section 98 CPC reads as follows:-

“98. Decision where appeal heard by two or moreJudges.- (1) Where an appeal is heard by a Bench of twoor more Judges, the appeal shall be decided inaccordance with the opinion of such Judges or of themajority (if any) of such Judges.

(2) Where there is no such majority which concurs

993 994PANKAJAKSHI (DEAD) THROUGH LRS. AND ORS.v. CHANDRIKA AND ORS. [MARKANDEY KATJU, J.]

in a judgment varying or reversing the decree appealedfrom, such decree shall be confirmed :

Provided that where the Bench hearing the appealis

a[composed of two or other even number of Judgesbelonging to a Court consisting of more Judges than thoseconstituting the Bench] and the Judges composing theBench differ in opinion on a point of law, they may statethe point of law upon which they differ and the appeal shallthen be heard upon that point only by one or more of theother Judges, and such point shall be decided accordingto the opinion of the majority (if any) of the Judges whohave heard the appeal, including those who first heard it.

(3) Nothing in this section shall be deemed to alter orotherwise affect any provision of the Letters Patent of anyHigh Court.”

5. In Tej Kaur and Another vs. Kirpal Singh and Another1995 (5) SCC 119, a two Judge Bench of this Court hasheld that when there is difference of opinion between thetwo High Court Judges in a Division Bench hearing anappeal on a question of fact, the decree of the trial courtmust be confirmed in view of the Section 98 (2) CPC. ThisCourt observed:

…………..”It is true that in a case where there is differenceof opinion among the Judges of the High Court, the powerof this Court under Article 136 is wide enough to test thecorrectness of the conclusion reached by the differinglearned Judges as pointed out by this Court in Dr. PremChand Tandon case. This proposition is unexceptionablebut this Court had no occasion in that case to consider thescope of sub-section (2) of Section 98. The languageemployed in sub-section (2) is imperative and in mandatoryterms. The object appears to be that on a question of fact

when there is a difference of opinion, the view expressedby the court below, in the absence of a majority opinion,needs to be given primacy and confirmed. When such isthe animation, this Court cannot enlarge the scope of thecontroversy by itself examining the correctness of thefinding of facts and decide which view of the two is correct.This would be in direct negation of the legislative mandateexpressed in sub-section (2) of Section 98 of the CPC.”

6. The above view was followed by three Judge BenchCourt in P.V. Hemalatha vs. Kattamkandi Puthiya MaliackalSaheeda and Anr. AIR 2002 SC 2445. That was a case inwhich the High Court of Kerala had, relying upon Section 98 ofCPC, confirmed the decree under appeal despite differenceof opinion between the two Judges comprising the Bench ona question of fact. This Court held that while Section 23 of theTravancore-Cochin High Court Act is the general law, Section98(2) is a special provision. Section 23 of the Travancore-Cochin High Court Act reads as under:

“23. Reference by Chief Justice.—Where two Judgesforming a Division Bench agree as to the decree, orderor sentence to be passed, their decision shall be final. Butif they disagree, they shall deliver separate judgments andthereupon the Chief Justice shall refer, for the opinion ofanother Judge, the matter or matters on which suchdisagreement exists, and the decree, order or sentenceshall follow the opinion of the Judges hearing the case.”

7. Section 9 of the Kerala High Court Act by which theTravancore-Cochin High Court Act was repealed to theextent of its repugnance may also be extracted. It reads:

“9. Repeal.—The provisions of the Travancore-CochinHigh Court Act, 1125 (5 of 1125), insofar as they relate tomatters provided in this Act, shall stand repealed.”

8. In our opinion Section 23 of the Travancore-Cochin Act

995PANKAJAKSHI (DEAD) THROUGH LRS. AND ORS.v. CHANDRIKA AND ORS. [MARKANDEY KATJU, J.]

is in the nature of a special provision while Section 98(2) is inthe nature of general law. As between the two, the former wouldapply in preference to the latter. The decision of this Court inP.V. Hemlatha’s v. Kattamkandi Puthiya Maliackal Saheedaand Anr. (Supra) to the extent it takes a contrary view, in ouropinion, requires to be reconsidered.

9. That apart, the question whether in an appeal arisingout of an order passed by the High Court to which Section 98(2)of the CPC applies, this Court can in exercise of its powerunder Article 136 of the Constitution direct the matter to beplaced before a third Judge to resolve the conflict arising fromtwo differing judgments, has not been examined either in P.V.Hemlatha’s or Tej Kaur’s case. We, therefore, consider itappropriate to refer to a larger Bench for consideration and anauthoritative pronouncement the following two questions:

(1) Whether Section 23 of the Travancore-Cochin Actremains unaffected by the repealing provisions of Section9 of the Kerala High Court Act. If so, whether Section 23is in the nature of a special provision vis-à-vis Section98(2) of CPC.

(2) Whether this Court can under Articles 136 and 142 ofthe Constitution direct in any appropriate case a referenceto a third judge to resolve the conflict arising between twojudges of the High Court hearing an appeal, on a questionof fact.

Let the papers of this case be placed before Hon’ble theChief Justice for constituting a larger Bench.

R.P. Matter adjourned.

GAINDA RAM AND OTHERSv.

M.C.D. AND OTHERSI.A. Nos.1, 3 & 4 in I.A. No.1 in I.A. No.407

I.A. Nos.9 & 10 in I.A. No.407IN W.P.(C) NO.1699 OF 1987

OCTOBER 08, 2010

[G.S. SINGHVI AND ASOK KUMAR GANGUL Y, JJ.]

Hawker matters:

Legislation – Need for – Regulation of squatters/hawkersin Delhi – Schemes evolved by New Delhi MunicipalCorporation and Municipal Corporation of Delhi from time totime on directions by Supreme Court – Right to carry onhawking on pavements under control of MCD and NDMC –Claim of by hawkers – Complaint alleging that steps takenby NDMC and MCD preventing them from carrying hawkingand vending – Held: Hawkers have a fundamental right tocarry on hawking under Article 19(1) (g) – It is subject toreasonable restrictions imposed by law – National Policy onUrban Street Vendors, 2004 and Scheme framed by NDMCcannot be called law – National Capital Territory of Delhi Laws(Special Provisions) Second Act, 2009 which is up to31.12.2010, and Street Vendors (Protection of Livelihood andRegulation of Street Vending) Bill, 2009 have been enactedto regulate the fundamental right of street hawking and streetvending – Numerous matters are pending before SupremeCourt – Thus, structured regulation and legislation imminentlynecessary in public interest, to control and regulatefundamental right of hawking of vendors and hawkers –Appropriate Government directed to enact a law to regulatehawking, before 30.06.2011 – Till such time, grievances ofhawkers/vendors to be redressed by internal dispute redressal

[2010] 12 S.C.R. 996

997 998GAINDA RAM AND ORS. v. M.C.D. AND ORS.

mechanisms provided in the Schemes– Writ petition and IA’sdisposed of – Municipalities – New Delhi Municipal CouncilAct, 1994 – ss. 225, 226, 330 and 369(2) – Delhi MunicipalCorporation Act, 1957 – Constitution of India, 1950 – Articles19(1)(g) and 19(6).

The instant matters are with regard to regulation ofhawking on the streets of Delhi. In * Sodan Singh’s case,the Supreme Court laid down certain guidelines forregulating citizen’s right to carry on hawking business onthe streets. Pursuant thereto, the New Delhi MunicipalCouncil (NDMC) and Municipal Corporation of Delhi(MCD) framed Schemes to regulate hawking and streetvending. The said Schemes were modified from time totime by the order passed by the Supreme Court. TheThareja Committee and Chaturvedi Committee wereformed to examine the claims of the hawkers but manyof the hawkers were not allotted sites. Meanwhile, severalhawkers filed cases before the Supreme Court.Subsequently, NDMC and MCD also framed Schemes forhawkers and squatters following the National Policy onUrban Street Vendors, 2004. This Court directed themunicipal authorities to implement the Scheme approvedby the Court.

The hawkers filed the instant writ petition and interimapplications claiming a right to carry on business indifferent parts of the pavements under the control of MCDand NDMC; and complaining about steps taken by theNDMC and MCD to prevent them from hawking andvending.

Disposing of the writ petition and the IA’s, the Court

HELD: 1.1 The hawkers’ and squatters’ or vendors’right to carry on hawking has been recognized asfundamental right under Article 19(1)(g) of the

Constitution of India, 1950 but such right is not absoluteand is subject to reasonable restrictions under Article19(6) of the Constitution. At the same time the right of thecommuters to move freely and use the roads without anyimpediment is also a fundamental right under Article19(1)(d). These two apparently conflicting rights must beharmonized and regulated by subjecting them toreasonable restrictions only under a law. [Paras 42 and77] [1026-B; 1043-H; 1044-A]

*Sodan Singh and Ors. vs. New Delhi MunicipalCommittee and Ors. (1989) 4 SCC 155 – followed.

Pyare Lal vs. New Delhi Municipal Committee andanother AIR 1968 SC 133 – distinguished.

1.2 The rights under Article 19(1)(g) can only becontrolled by law as contemplated in Article 19(6). Suchlaw can impose reasonable restrictions. The reasonablerestrictions on the fundamental right under Article19(1)(g) can be imposed either by existing law or by a lawwhich may be made by a State in the interest of generalpublic. Therefore, nothing short of law can imposereasonable restrictions on a citizen’s fundamental rightto carry on hawking under Article 19(1)(g) of theConstitution. [Paras 43, 45 and 46] [1025-C; 1027-C-D]

Bijoe Emmanuel and Ors. vs. State of Kerala and Ors.AIR 1987 SC 748; Kameshwar Prasad and others vs. Stateof Bihar and Anr. AIR 1962 SC 1166; Kharak Singh vs. Stateof U.P. and Ors. AIR 1963 SC 1295 – referred to.

2.1 The New Delhi Municipal Council (NDMC) frameda Scheme for regulation of squatting and hawking in theNDMC areas on the basis of guidelines given in *SodanSingh’s case. In that scheme NDMC divided its area intofour zones and some of the zones have been made non-

999 1000GAINDA RAM AND ORS. v. M.C.D. AND ORS.

hawking zones. From time to time the said scheme hasbeen modified by the orders passed by this Court.Subsequently, another scheme was prepared by theNDMC pursuant to the National Policy on Urban StreetVendors, 2004. In the said scheme the NDMC referred toSections 225 and 330 of the NDMC Act. Section 225 ofthe Act permits squatting only on the permission givenby the Chairman and on payment of such fees in eachcase as the Chairman may think fit. Section 330 of the Actprovides for licence for hawking of articles etc. The saidSection 330 authorizes the NDMC to prevent hawkingunless there is a licence to that effect granted by theChairperson. As per Section 226 of the NDMC, theChairperson may without notice cause removal of articleskept in the public street and Section 369(2) of the Actprovides for punishment for contravention of theprovision of the Section 225(1). [Paras 50 and 51] [1028-A-E]

2.2 The 2004 Policy provides for setting up of avending committee which may consist of representativesof (a) Municip al Authority , (b) Traffic and Local Police, (c)Public and owning authority, (d) Associations of traders,residents and also of street vendors both static andmobile. The 2004 Policy also referred to the Master Planof Delhi, 2021 which provides for informal sector in tradein the planned development of various zones. In the saidpolicy, there is also a division between vending and non-vending areas and it is made clear that no hawkinglicence would be issued in non-vending areas. The timingand the day of hawking was also to be regulated as perthe suggestions of Residents Welfare Association (RWA).Neither the said policy nor the scheme framed by theNDMC can be called law, except the provisions ofSections 225, 226, 330 and 369(2) of NDMC Act. [Paras52, 53 and 54] [1028-E-F; 1029-G-H; 1030-A-B]

2.3 Section 388 of the NDMC Act empowers theNDMC to frame bye-laws relating to the streets whichhave to be laid before Parliament under Section 389 ofthe Act. These bye-laws may have the status ofsubordinate or delegated legislation. Penalty has beenprovided for breach of bye-laws under Section 390 of theAct. It does not appear that the NDMC has made any bye-law under Section 388 of the NDMC Act so as to regulatethe fundamental right of the hawkers to hawk or squaton the streets of Delhi. The Schemes framed under thedirection of this Court or the 2004 Policy which has beenframed by the Government, cannot said to have beenframed under the said power to frame bye-laws and donot have the status of law or even subordinate legislation.[Paras 55, 56 and 57] [1030-C-E-G]

2.4 Subsequent to the 2004 Policy, a new NationalPolicy on Urban Street Vendors, 2009 was framed on17th June 2009. The 2009 Policy recognizes streetvending as an integral and legitimate part of urban retailtrade and distribution system, even when, otherwise,street vending is sometimes projected as a majormenace in urban areas aggravating traffic problems. Butthe 2009 Policy aims at giving the street vendors a legalstatus by providing them legitimate vending and hawkingzones in the city in the town master plans anddevelopment plans. Therefore, the National Policy directs,“Municipal Authorities should frame necessary rules forregulating entry of street vendors on a time sharing basisin designated vending zones keeping in view three broadcategories – registered vendors who have secured alicense for a specified site/stall; registered street vendorsin a zone on a time sharing basis; and registered mobilestreet vendors visiting one or the other vending zone”.Therefore, the Policy seeks to institutionalize a part of theurban street vending through legislation. [Paras 59, 60and 61] [1031-C-G]

2.5 The National Capit al Territory of Delhi Laws(Special Provisions) Second Act 2009 was enacted on23.12.2009 which makes special provisions for theNational Capit al Territory of Delhi for a period up to31.12.2010. Therefore, it is clear that the said law is fortemporary period. From the preamble of the law, it wouldappear that a strategy and a Scheme was prepared by thelocal authorities in the National Capit al Territory of Delhifor regulation of urban street vendors in accordance withnational policy for urban street vendors and the MasterPlan for Delhi, 2021. It was also provided that whereasmore time is required for orderly implementation of theScheme regarding hawkers and urban street vendors andfor regulation of unauthorized colonies, the said lawwould have effect only up to 31.12.2010. [Para 62] [1034-A-D]

2.6 There is also a Bill called the Model StreetVendors (Protection of Livelihood and Regulation ofStreet Vending) Bill, 2009 by the Government of India,Ministry of Housing and Urban Poverty Alleviation. TheBill is to provide for protection of livelihood of urbanstreet vendors and to regulate street vending and formatters connected therewith. Now if the said Bill isenacted in the present form, the Bill then prima facierecognizes the rights of hawkers and vendors underArticle 21 of the Constitution since it seeks to protect theirlivelihood. In the background of the provisions in the Billand the 2009 Policy, it is clear that an attempt is made toregulate the fundamental right of street hawking andstreet vending by law, since the right to hawk on thestreets or right to carry on street vending is part offundamental right under Article 19(1)(g). However, till thelaw is made, the attempt made by NDMC and MCD toregulate the said right by framing Schemes which are notstatutory in nature is not exactly within the contemplationof constitutional provision. However, such Schemes

have been regulated from time to time by this Court forseveral years. Even, orders passed by this Court, intrying to regulate such hawking and street vending, is notlaw either. At the same time, there is no denying of thefact that hawking and street vending should be regulatedby law. Such a law is imminently necessary in publicinterest. [Paras 63, 64, 65] [1034-E-H; 1035-A-C]

2.7 The problem is acute. On the one hand there isan exodus of fleeting population to metro cities andtowns in search of employment and on the other handwith the ever increasing population of cars and othervehicles in the same cities, the roads are choked to thebrim posing great hazards to the interest of generalpublic. In the midst of such near chaos, the hawkers wantto sell their goods to make a living. Most of the hawkersare very poor, a few of them may have a marginally betterfinancial position. But by and large they constitute anunorganized poor sector in the society. Therefore,structured regulation and legislation is urgentlynecessary to control and regulate fundamental right ofhawking of these vendors and hawkers. [Para 66] [1035-G-H; 1036-A-B]

2.8 The issue is vitally important to a very largesection of people, mostly ordinary men and women. Suchan issue cannot be left to be decided by Schemes andwhich are monitored by this Court from time to time. Thefundamental right of the hawkers, just because they arepoor and unorganized, cannot be left in a state of limbonor can it left to be decided by the varying standards ofa Scheme which changes from time to time under theorders of this Court. [Paras 77 and 79] [1043-A-B-D]

2.9 Innumerable IAs have been filed in this Courtalong with various objections by the hawkers, most of thetime collectively, complaining about steps taken by

GAINDA RAM AND ORS. v. M.C.D. AND ORS. 1001 1002

others vs. Union of India and others (1981) 1 SCC 568; K.Rajendran & others vs. State of Tamil Nadu & others (1982)2 SCC 273; Bombay Hawkers’ Union & others vs. BombayMunicipal Corporation & others (1985) 3 SCC 528; Olga Tellis& ors. vs. Bombay Municipal Corporation & others (1985) 3SCC 545; Saghir Ahmad and another vs. State of U.P. andothers AIR 1954 SC 728; Municipal Corporation of Delhi vs.Gurnam Kaur (1989) 1 SCC 101; Saudan Singh etc. etc. vs.NDMC and others etc. etc., (1992) 2 SCC 458; Gainda Ramand Ors. vs. MCD (1993) 3 SCC 178; Sodan Singh vs.NDMC and others, (1998) 2 SCC 727; Sudhir Madan andothers vs. Municipal Corporation of Delhi and others IA No.394 in I.A.No. 356 in WP (Civil) No. 1699/1987); RameshShah vs. MCD and others IA No. 332-333 in WP (Civil) No.1699/1987 dated 6.11.2000; Bijoe Emmanuel and others vs.State of Kerala and others AIR 1987 SC 748; KameshwarPrasad and others vs. State of Bihar and another AIR 1962SC 1166; Kharak Singh vs. State of U.P. and others AIR1963 SC 1295 – referred to.

Case Law Reference:

AIR 1968 SC 133 Distinguished. Para 6

(1989) 4 SCC 155 Followed. Para 3

(1981) 1 SCC 568 Referred to Para 7

AIR 1954 SC 728 Referred to Para 8

GAINDA RAM AND ORS. v. M.C.D. AND ORS. 1003 1004

municipal authorities, namely, NDMC and MCD to preventthem from hawking and vending. This Court has tried itsbest to somehow deal with the situation. But it is difficultfor this Court to tackle this huge problem in the absenceof a valid law. The nature of the problem defies a propersolution by this Court by any judicially manageablestandards. Therefore, the writ petition and all the IAs aredisposed of with the direction that the problem ofhawking and street vending may be regulated by theexisting Schemes framed by NDMC and MCD, up to 30thJune, 2011. Within that time, the appropriate Governmentis to legislate and bring out the law to regulate hawkingand hawkers’ fundamental right. Till such time thegrievances of the hawkers/vendors may be redressed bythe internal dispute redressal mechanisms provided inthe Schemes. [Paras 67, 68 and 69] [1036-B-F]

2.10 In view of such Schemes, the hawkers,squatters and vendors must abide by the DisputeRedressal Scheme. There should not be any directapproach to this Court by way of fresh petition or IAs,bypassing the Dispute Redressal Mechanism provided inthe Scheme. However, before 30th June, 2011, theappropriate Government is to enact a law on the basis ofthe Bill mentioned or on the basis of any amendmentthereof so that the hawkers may precisely know thecontours of their rights. These directions are given inexercise of its jurisdiction to protect the fundamental rightof the citizens. The appropriate Government has alreadyenacted a Bill and, therefore, the initial decision makingin the field of legislative exercise is complete. It has, ofcourse, to be converted into a law by following theConstitutional process. That is why time is given till 30thJune, 2011. [Paras 75, 76, 77 and 78] [1043-E-G; 1044-B-C]

Fertilizer Corporation Kamgar Union (Regd.) Sindri &

GAINDA RAM AND ORS. v. M.C.D. AND ORS.

AIR 1987 SC 748 Referred to Para 47 and 48

CIVIL ORIGINAL JURISDICTION : I.A. No. 1, 3 & 4 in I.A.No. 1, in I.A. No. 407 & in I.A. Nos. 9 & 10, in I.A. No. 407 inW.P. (C) No. 1699 of 1987.

I.A. Nos. 2 & 3 I.A. No. 407 in W.P. (C) No. 1699 of 1987

I.A. Nos. 6 in I.A. No. 407 in W.P. (C) No. 1699 of 1987

W.P. (C) No. 77 of 2010

I.A. Nos. 211, 212 & 213 in C.A. No. 560 of 1998.

Vijay Hansaria, L.N. Rao, Rakesh Kumar Khanna, Dr.Rashmi Khanna, T.S. Doabia, N.K. Sahoo, H.A. Raichura, RaniChhabra , P.I. Jose, Sneha Kalita, B.K. Mishra, Vivek Kandari,Anupam Mishra, Satyendra Kumar, Sunita Bhardwaj, AbhayKumar, Madhusmita Singh, Tenzing Tsering, Nikhil Goel,Naveen Goel, A. Venayagam Balan, M.M. Kashyap, KavitaWadia, Surya Kant, Purnima Jauhari, Prashant Kumar,Sukhvinder Kaur, Shiv Kumar, Sunita Sharma, S.W.A. Qadri,Mukesh Verma, P.S. Tomar, Anil Katiyar, Kiran Bhardwaj,Sushma Suri, Parekh & Co., Arvind Kr. Sharma, SaurabhMishra, Goodwill Indeevar, S.C. Patel, Dinesh Kumar Garg,Suresh Chandra Tripathy, T.V. George, Indira Sawhney, SanjivSen, Praveen Swarup, P. Parmeswaran, Anuja Chopra, IndiraUnninayar, Prashant Narang, Sanjay Jain, N. Annapoorni, Gargi

Khanna, Anil Katiyar, M.P.S. Tomar and Mukesh Verma for theappearing parties.

GANGULY, J. 1. Hawking on the streets of Delhi, whosemunicipal limits have expanded over the years, has been thesubject matter of several proceedings in this Court. Initially inthe early sixties, this problem surfaced when this Court, hearingan appeal from a decision dated 4th August, 1966 of the PunjabHigh Court, Circuit Bench at Delhi, dealt with this question insome detail in the case of Pyare Lal vs. New Delhi MunicipalCommittee and another [AIR 1968 SC 133]. In Pyare Lal(supra), sale of cooked food on public streets which wascreating the problems of unhygienic conditions came up beforethis Court in the context of a resolution of the New DelhiMunicipal Committee stopping such sale. A three-Judge Benchof this Court held that no person carrying on the aforesaidbusiness of selling cooked food has any fundamental right tocarry on street vending particularly in a manner which createsunsanitary and unhygienic conditions in the neighbourhood.

2. However, the controversy did not rest there, nor did theproblem of hawking come to an end in view of Pyare Lal’sjudgment.

3. Several cases were filed thereafter in different Courtsand ultimately the leading decision was rendered in the caseof Sodan Singh and others vs. New Delhi MunicipalCommittee and others [(1989) 4 SCC 155] by a ConstitutionBench of this Court.

4. In Sodan Singh (supra) the petitioners, as hawkers,were carrying on business by squatting on the pavements ofDelhi and New Delhi and those squatters alleged that they wereallowed by the Municipality to carry on such business onpayment of charges described as Tehbazari. As the Municipal

1005 1006

SUPREME COURT REPORTS [2010] 12 S.C.R.GAINDA RAM AND ORS. v. M.C.D. AND ORS.[ASOK KUMAR GANGULY, J.]

1007 1008

Authority subsequently refused to permit them to continue theirbusiness, that action of the municipality according to thosepetitioners, interfered with their fundamental right to carry onbusiness under Articles 19(1)(g) and 21 of the Constitution ofIndia. The correctness of the decision in Pyare Lal (supra) wasalso doubted. As such the matter was placed before theConstitution Bench.

5. In Sodan Singh (supra) there was a paradigm shift bythis Court on the interpretation of fundamental right of a hawkeror a squatter under Article 19(1)(g) to carry on business.Various judgments of this Court were considered and inparagraph 18 (at page 169 of SCC) Justice Sharma (as HisLordship then was) delivering the majority judgment expresslyheld by referring to Pyare Lal (supra) that, “we do not agreewith these observations.” However, His Lordship was quick toadd that in the facts considered in Pyare Lal (supra) thedecision was correct.

6. In our judgment, the decision in Pyare Lal (supra) wasthus distinguished and confined to the facts of that case.

7. However, this Court in Sodan Singh (supra) took a verybroad view of a citizens right under Article 19(1)(g) followingits decisions in the case of Fertilizer Corporation KamgarUnion (Regd.) Sindri & others vs. Union of India and others[(1981) 1 SCC 568] and also the decision of this Court in K.Rajendran & others vs. State of Tamil Nadu & others [(1982)2 SCC 273] and the decision of this Court in Bombay Hawkers’Union & others versus Bombay Municipal Corporation &others [(1985) 3 SCC 528] and the Constitution Bench decisionof this Court in the case of Olga Tellis & ors. vs. BombayMunicipal Corporation & others [(1985) 3 SCC 545].

8. This Court in Sodan Singh (supra) came to theconclusion that the hawkers and squatters have a fundamentalright to carry on business on the public street, but the sameshould be regulated. It was further held by Justice Sharma (as

His Lordship then was) that the right of a hawker to transactbusiness, while going from place to place, is recognized inIndia for a long period. Of course such right is subject toregulation since public streets demand its use by the public andthe streets are not meant to facilitate some citizens to carry onany private business. However, such right of hawking forcarrying on business on the street cannot be denied if they areproperly regulated. The learned Judge made it very clear thatthe said right is subject to reasonable restrictions under Clause(6) of Article 19. The learned Judge relying on the ratio inSaghir Ahmad and another vs. State of U.P. and others [AIR1954 SC 728] held that streets in India are vested in themunicipality and they have to be used by the municipalities astrustees. The learned Judge while delivering the judgmentobserved:-

“We as a court in a welfare State do realise the hardshipto which many of the petitioners may be exposed if theyare prevented from carrying on the business. The onlysolution for this is the adoption of the policy of fullemployment, which even according to leading economistslike Keynes will alleviate the problems of the unemployedto some extent. But as students of economics we alsorealise that every human activity has the ‘optimum point’beyond which it becomes wholly unproductive. It is for thegovernment to take reasonable steps to prevent movementof people from rural areas to urban areas. That can bedone by the development of urban centres in rural areasremoved from each other at least by one hundred miles.This is more a matter of executive policy than for judicialfiat. We hope and trust that in administering the laws inforce the authorities will keep in view humaneconsiderations…”

9. Justice Kuldip Singh, in a concurring but a differentopinion, interpreted the right under Article 19(1)(g) ascomprehensively as possible to include all the avenues and

1009 1010GAINDA RAM AND ORS. v. M.C.D. AND ORS.[ASOK KUMAR GANGULY, J.]

modes through which a man earns his livelihood excepting ofcourse gambling and trafficking in women. The learned Judge’sinterpretation of Article 19(1)(g) if we may say so, with respect,is remarkably brilliant. His Lordship held, “in a nutshell theguarantee takes into its fold any activity carried on by a citizenof India to earn his living. The activity of course must belegitimate and not anti-social like gambling, trafficking in womenand the like. (See para 28 page 174 of the report).

10. The learned Judge referred to the decision in BombayHawkers’ Union (supra) and also to the decision of this Courtin Municipal Corporation of Delhi vs. Gurnam Kaur [(1989) 1SCC 101] and highlighted the importance of framing regulationsto regulate hawking business by creating hawking and non-hawking zones. The learned Judge in his concurring judgmentmade a very pertinent observation after comparing the positionof street trading in India with that prevailing in other countriesand noted that even in England where there is complete socialsecurity and the citizens are not driven to the streets to makeout a living out of poverty and sheer unemployment, streettrading is recognized. Considering that an alarming percentageof population in our country lives below poverty line, the learnedJudge held that when the citizens by gathering meagerresources try to employ themselves as hawkers and streettraders, they cannot be subjected to a deprivation on the pretextthat they have no right. The learned Judge deplored that despiterepeated suggestions by this Court, the Government has notyet framed regulations for regulating citizen’s right to carry onhawking business on the streets.

11. Subsequently, also again this Court had to deal withlarge number of petitions filed by hawkers claiming a right tocarry on business in different parts of the pavements under thecontrol of Municipal Corporation of Delhi (MCD) and New DelhiMunicipal Council (NDMC).

12. In Sodan Singh (supra) this Court was of the view that

detailed provisions, dealing with all relevant aspects, andcapable of solving the problems of hawking in a fair andequitable manner should be made and the respondents(municipal authorities) should proceed as soon as it may bepossible. This Court felt that municipal authorities would be welladvised to consider suggestions of the hawkers while finalizingthe schemes with due regard to the requirements of the relevantlaws e.g. Delhi Police Act, 1978, the Delhi Control of Vehicularand other Traffic on Roads and Streets Regulations, 1980 etc.The Constitution Bench in Sodan Singh (supra) clarified inparagraph 24 of the judgment that the demand of the petitionerstherein that the hawkers must be permitted on every road in thecity, could not be allowed, if the road was not wide enough toconveniently manage the traffic on it, no hawking may bepermitted at all, or may be sanctioned only once a week, sayon Sundays when the rush considerably thinned out. Hawkingcould also be justifiably prohibited near hospitals or wherenecessity of security measures so demanded. The demand thatpermission to squat on a particular place must be on apermanent basis was also rejected on the ground thatcircumstances were likely to change from time to time.

13. Pursuant to the directions of this Hon’ble Court, ascheme was prepared by the NDMC vide its Resolution No.28 dated 10.11.1989 and the same was placed before the LokAdalat held at this Hon’ble Court on November 19, 1989.Thereupon, a general order was passed by the Lok Adalat aftergoing through the scheme submitted by NDMC on theguidelines laid down by this Court in Sodan Singh (supra) forimplementation of the scheme. A committee consisting of twomembers of NDMC and a District Judge or a Higher JudicialOfficer was to be constituted. Decision rendered by thecommittee was to be made binding and final.

14. It was submitted before the Lok Adalat that the NDMCdid not have sufficient land which belonged to the CentralGovernment and unless the Central Government allotted suitable

1011 1012

18. A complaint was made to this Court that the TharejaCommittee was applying very strict norms for proof of eligibility.However, this Court by its order dated 13.3.1992 rejected thesaid grievance. In order to protect the rights of the genuineclaimants, this Court, after discussing the report of the TharejaCommittee, set out nine directions. Those directions are asunder:

“(1) Out of the 440 claimants, the one-member TharejaCommittee will review the cases of those claimants whoseclaims have been rejected for non-compliance of thestandard of proof laid down by Resolution No. 28, ifclaimant adduces any other authentic proof in the form ofgovernment or local authority records, the genuinenesswhereof is unimpeachable, and the Committee considerssuch proof presented to it to be adequate for review. If onperusal such proof is found to be unacceptable, theCommittee may refuse to review its decision;

(2) In regard to the Sarojini Nagar claims, the Committeemay evolve its own criteria or standard of proof de horsthe one laid down by Resolution No. 28 and proceed todispose of the claims on the basis thereof. In doing sofresh claims, if any, received may also be scrutinised;

(3) Public advertisements will be issued by the Committeein local newspapers having wide circulation inviting claimsfrom squatters/hawkers who have not preferred claims orfiled proceedings in court by a date to be stipulatedtherein, such claims must of course be consistent with theeligibility criteria laid down in Resolution No. 28. In additionto such public advertisement to be issued in newspapersof different languages such as English, Hindi, Urdu, South-Indian languages, etc., to be determined by the Committee,handbills and pamphlets shall also be printed anddistributed and pasted in different parts of the five zonesselected for squatting/hawking inviting claims by the

land, the Municipal Committee was not in a position toaccommodate all the hawkers/squatters as per the scheme.The Lok Adalat accordingly suggested that a request was tobe made by the Legal Aid Committee to the CentralGovernment for the allotment of land. The NDMC as well wasto approach the Central Government for the allotment of suitableland in the areas in which the NDMC could go ahead with thisprogramme, of accommodating these hawkers/squatters.These directions appear from the order of the Lok Adalat.

15. The Judicial Officer for the committee was to benominated with the concurrence of the High Court. Therefore,with the direction of this Hon’ble Court, a Judicial Officer (ShriG.P. Thareja) was nominated by the High Court to preside overthe Committee which was constituted for looking into the matterof hawkers in the NDMC area. Thereupon, by an order dated1st February 1990, this Hon’ble Court directed that becausethe Committee which had been constituted as aforesaid hadbecome functional, such Committee should proceed to examinethe claims of hawkers. As a matter of first lot, first 100 claimswere to be taken up for examination in view of the schemeprepared by the Municipal Committee in terms of the directionof the Court.

16. Appreciating the fact that since the work allotted to theJudicial Officer requires full time engagement, this Court by anorder dated 9.2.1990 issued directions requesting the HighCourt to relieve the said Judicial Officer who was appointedexclusively for the work. In the said order, directions were alsogiven to the learned Additional Solicitor General to find out thepossibilities of assigning land to the Municipal Committee formaking it available for hawking.

17. Thereafter, the said Thareja Committee gave itsinterim report to this Court and this Court in its order dated29.1.1991 noticed the said interim report and found that 5000applications were pending before the Committee.

GAINDA RAM AND ORS. v. M.C.D. AND ORS.[ASOK KUMAR GANGULY, J.]

stipulated date. The advertisements/pamphlets, etc. willalso cover claimants falling within directions (1) and (2)above;

(4) The Registry of this Court will not entertain any furtherWrit Petitions/Special Leave Petitions from any squatteror hawker concerning the sites chosen in the five zonesmentioned hereinabove but will instead direct thepetitioners to approach the Thareja Committee if they havemoved such Writ Petitions/Special Leave Petitions beforethe date stipulated by the Committee (which date will becommunicated to the Registry) and no Writ Petition/Special Leave Petition or any other proceeding shall beentertained by the Registry concerning the sites in the fivezones after the stipulated date;

(5) The High Court of Delhi and all courts subordinatethereto will also follow the course of action set out indirection No. 4 hereinabove;

(6) All Writ Petitions/Civil Appeals/ Special LeavePetitions and CMPs/IAs therein which concern the fivezones will stand disposed of by this order except one inwhich orders have been made from time to time and theclaimants of all the matters disposed of pursuant to thisdirection will be at liberty to seek further directions in theone matter kept pending under this direction as intervenersin case such need arises in future. This is essential toregulate such cases against NDMC;

(7) The interim stay orders will continue in respect of the224 claimants whose claims have already been scrutinisedby the Committee. In respect of the other claimants out of440 whose claims have been rejected the status quo willbe maintained for two months after the stipulated date inrespect of those claimants who have sought review on orbefore the stipulated date. If during the said period of twomonths the exercise for review cannot be completed, the

authorities desirous of taking any action will approach theCommittee and seek its approval. If the Committee is ofthe opinion that there is no prima facie case for review itmay permit such action to be taken 10 days thereafter sothat the claimant likely to be affected may in the meantimeapproach the Court and obtain appropriate orders. Inrespect of all other cases the interim orders, if any, willcontinue till the Committee has scrutinised their cases andrejected them. Liberty is, however, reserved to NDMC tomove for vacating any order if public interest so demandsor it is found that the claimant is in any way misusing it;

(8) The Tharjea Committee will draw up a list of squatters/hawkers identified by it as entitled to protection so that theirclaims can be regulated in future also. In drawing up thelist care should be taken to ensure that one and the sameperson does not secure a double benefit; and

(9) The Committee may also draw up a list of squatters/hawkers on the basis of their actual standing for beingaccommodated in future as and when there is a vacancyin the available space in the five zones or when such spaceis expanded or new space within the five zones is clearedfor squatting/hawking. The Committee will also suggestsites within the zones, over and above those alreadyidentified, which can be made available to accommodatesuch surplus squatters/hawkers who cannot beaccommodated in the five zones on account of paucity ofspace.”

19. In the meantime, several cases were filed before thisCourt. From the judgment of this Court in Saudan Singh etc.etc. vs. NDMC and others etc. etc., (1992) 2 SCC 458, itappears that it was dealing with Article 32 petitions along withsome Special Leave Petitions filed impugning the order of theDelhi High Court. In that judgment, this Court after consideringthe ratio of Sodan Singh (supra) laid down the principle relatingto and reasonable restrictions on street trading, as follows:

“It is, therefore, settled law that every citizen has a right tothe use of a public street vested in the State as abeneficiary but this right is subject to such reasonablerestrictions as the State may choose to impose. Street-trading is albeit a fundamental right under Article 19(1)(g)of the Constitution but it is subject to reasonablerestrictions which the State may choose to impose byvirtue of clause (6) of Article 19 of the Constitution. Theright to street-trading under Article 19(1)(g) of theConstitution does not, however, extend to a citizenoccupying or squatting on any specific place of his choiceon the pavement regardless of the rights of others,including pedestrians, to make use of the pavements. Inother words the law laid down by the Constitution Benchpermits a citizen to hawk on the street pavements bymoving from one place to another without being stationaryon any part of the pavement vested in the State. Afterlaying down the law on the point in the context of Articles14, 19 and 21 of the Constitution, the Constitution Benchremitted all the petitions to a proper Division Bench of thisCourt for final disposal.” (See para 2)

20. In Saudan Singh (supra), this Court took note of theappointment of Thareja Committee as well as the salientfeatures of NDMC scheme. These features, noted by this Court,run as under:

“(A) A squatter up to 1977 shall be eligible for the allotmentof a stall/kiosk while the squatters pertaining to the years1978 till 1980 shall be eligible for Tehbazari site, if no shop/kiosk is available. The squatters squatting since between1981 to 1987 shall be considered for allotment for aTehbazari site subject to availability of vacant space.

(B) The eligibility of a squatter shall be determined bydocuments such as receipts issued by the NDMC,Challans by Police and Toleration Permission etc.

(C) Only non-licensable trades excluding sophisticatedluxury items, imported or smuggled goods shall bepermitted i.e. pan, biri, cigarettes, chana, moongfali,hosiery items, toys, small stationery items, lottery tickets,fresh vegetables, uncut fruits, packed bakery items etc. willbe allowed. No cooking and sale of food items exposedto dust causing health hazards shall be allowed. Openspace measuring 6" x 4" for doing non-licensable tradesand 4" x 3" for the trade of pan, biri, cigarettes will beallowed.

(D) Not more than one member of the family, as definedby the NDMC, will be eligible for benefit under theScheme.

(E) The following percentage shall be allowed for thepurpose of reservation in the allotment.

(a) General Category60%

(b) Schedule Caste/Schedule Tribe12-1/2%

(c) Physically Handicapped 10%

(d) Ex-serviceman2-1/2%

(e) War Widows 2%

(f) Freedom Fighters3%

(g) Extreme Hardship and Humanitarian grounds10%.”

21. In paragraph 10 of the judgment in Saudan Singh(supra), this Court observed that it was dealing with the questionof livelihood and survival of a large number of families and insuch a situation the Court should adopt a compassionateapproach so as to ensure that genuine hawkers/squatters arenot denied their daily bread at the altar of technicalities, whileat the same time ensuring that those who are out to exploit and

abuse the process of law do not succeed. To achieve theseobjectives, the Court gave certain directions which were set outhereinabove.

22. The Court also gave directions about hawkers/squatters, who were carrying on their business within theadministrative control of MCD. It may be noted that MCD has,within its jurisdiction, the entire Union Territory of Delhi excludingthe area within the administrative control of NDMC and DelhiCantonment.

23. This Court also noted that after partition of this countrythere was a large influx of population to Delhi and the localauthority was constrained to evolve certain norms to rehabilitatesuch people. This gave rise to the Tehbazari system. Keepingthis in view, the MCD evolved a scheme of open Tehbazariconsisting of grant of permission to squat on an earmarked spotfor carrying on business. On Gazetted holidays, festivals daysand Sundays, permission was given to squat in various otherareas. This system is known as casual Tehbazari. The Courtnoted that for the purpose of such kind of hawking the city wasdivided into ten zones and in all 288 squatting areas wereidentified. This Court also noted that MCD also prepared ascheme for regulating hawking business in Delhi in differentzones. The scheme was prepared in consultation with theCommissioner of Police and the priority of allotment has beendetermined on the following lines:

“(1) Persons who have been found squatting between1970 and 1982 and whose names are contained in thesurvey report prepared after the survey conducted in 1982will receive first priority for grant of Tehbazari permissionsubject to the scrutiny of their claims;

(2) Insofar as casual Tehbazari on weekly holidays,festivals/melas, etc. is concerned, as well as at the 67weekly bazars held, persons availing of the said benefitwill continue to be granted the casual or weekly Tehbazari;

(3) Squatters who have started squatting/hawking in 1983onwards and who are found on the date of survey wouldalso be considered for grant of open Tehbazari of 6" x 4"subject to the production of proof of continuous squattingand proof of residence and nationality. Such squatters/hawkers would be granted open Tehbazari subject toavailability of space provided they have cleared the duesof the MCD; and

(4) Persons who do not fall within the aforesaid threecategories would be permitted to apply for hawkinglicences under Section 420 of the Delhi MunicipalCorporation Act, 1957 and their applications would beconsidered on merit for permission to hawk — not squat— by moving in specified areas with their goods on theirheads or on cycles. They will be entitled to hawk with theirgoods anywhere in the zone in respect of which they havebeen granted a licence. However, such permission will besubject to any restrictions that may be imposed by theresidential associations of different colonies.”

24. In the meantime, the writ petition No.1699/87 (GaindaRam and others vs. MCD) was disposed of by this Court byjudgment and order dated 12th May 1993 [(1993) 3 SCC 178].

25. Ultimately, the Thareja Committee examined 5627claims in great detail and passed detailed order in every caseand in its final report found that 761 out of 5627 persons wereentitled for allotment of sites and it also found 12 cases ofhardship. The said Committee also identified 977 sites forsquatting in NDMC area.

26. Those who were aggrieved by the orders of the TharejaCommittee filed IAs before this Court. As many as 130 IAs werefiled before this Hon’ble Court questioning various orders ofThareja Committee.

27. In the meantime, another judgment in the name of

Sodan Singh vs. NDMC and others, (1998) 2 SCC 727 wasdelivered which was in continuation of its two earlier judgmentsconcerning the hawkers/squatters in the public streets in NDMCarea. The Court considered the report of the TharejaCommittee and came to the conclusion that occupation andplaces of eligible squatters, as decided by the TharejaCommittee, is only tentative. However, the Court accepted theprocedure recommended by the Thareja Committee and alsoaccepted its recommendation about payment of arrears ofdues towards Tehbazari and also noted its recommendationthat in case of failure to pay such dues the claimant is notentitled to the benefit under the scheme. The Court directedcertain procedures to be followed for the purpose of makingfinal allotment of sites. One of them is issuance of public noticefor allotment of sites, the other procedure is for payment ofarrears of Tehbazari. The Court also prescribed a cut-off datefor filing of application and further directed notice of hearing tothe petitioners. The Court also held that the right of the tradersto change their trade is subject to reasonable restrictions underArticle 19(6).

28. The Court thereafter nominated another Judicial OfficerShri V.C. Chaturvedi to undertake various duties and functionsenumerated in its order and in paragraph 52 page 741 of thereport gave the summary of procedure to be followed by theChaturvedi Committee, which are set out:

1. Shri Chaturvedi Committee (sole member) shall issuepublic notice in an English and a Hindi newspaper(expenses to be borne by the NDMC) within 15 days fromtoday permitting the eligible claimants so found eligible bythe Thareja Committee to submit their applications in PartI containing options in regard to the identified places andsizes (whether 6' x 4' or 4' x 3') in the particular zone towhich these claims belong. The public notice in thenewspaper will state that the details regarding theavailable sites and their location and size is put up on the

notice boards of the NDMC at various places, whoseaddresses are given. The notice will also require theclaimants to state in Part II of their applications the detailsas to payment of Tehbazari charges due after 1-1-1990and if there are or not any arrears as on date. The noticewill also be put up in the various offices of the NDMCwithin the abovesaid period. The notice in NDMC officewill also give a detailed list of the places available forsquatting/hawking and stating whether it is a kiosk/stall ora place for mere vending on Tehbazari basis as decidedby the Thareja Committee and indicating their sizes (6' x4' or 4' x 3').

2. The eligible claimants will be given 3 weeks’ time to filein Part I of their application their three options, indicatingthe zone concerned, their seniority as decided by theThareja Committee, stating whether they come under anyreservation category, the type of trade they have beentrading in or the new trade for which they have applied tothe NDMC and such other particulars as may be called foror relevant. In Part II the eligible claimants shall specify ifthey have made payments of Tehbazari arrears due for theperiod after 1-1-1990 and if there are any arrears as ondate.

3. After receipt of the claims, the Committee shall issuenotice to the parties concerned and the NDMC in regardto each of the places at which squatting/hawking ispermitted as per the Thareja Committee Report anddecide on the basis of seniority and reservation, the sizeof place and such other relevant material as may be placedbefore the Committee, as to who should be allotted whatplace. The Committee shall fix up dates of hearing byissuing registered A.D. notices to the parties concerned.(The expenditure in this behalf shall be borne by theNDMC.) The Committee shall give an opportunity of beingheard and pass reasoned orders and its decisions shall

be final and shall not be questioned before any otherauthority, tribunal, court, nor the High Court nor in this Court.

4. It shall however be open to Shri Chaturvedi to obtain, ifnecessary, such directions or clarifications from this Courtby way of filing IAs in this SLP, even though it is nowdisposed of.

5. The claimants will be permitted to appear before theChaturvedi Committee either in person or through theircounsel.

6. In case it is decided by the Chaturvedi Committee afterthe hearing of the case in Part II that any eligible claimantis in arrears of Tehbazari dues for any period after 1-1-1990 then the said Committee shall fix a date before whichthe arrears have to be paid and informing that if the amountis not paid by that date, the claimant will lose his claim forthe kiosk/stall or for the place. In case the claimant defaultsin payment by such date fixed and the claimant’s rightscease as stated above, the Chaturvedi Committee willconsider if the vacancy can be allotted to any otherclaimant already declared eligible by the TharejaCommittee.

7. In case any of the places found eligible for kiosks/stallsby the Thareja Committee are not accepted by the UrbanArts Commission or the Archaeological Survey of Indiaand the Department of Archaeology of the Government ofN.C.T., the said places meant for kiosks/stalls shall beavailable for Tehbazari and the Chaturvedi Committee shallpass appropriate orders of allotment on that basis. As andwhen the abovesaid authorities inform the NDMC that theplaces earmarked for kiosks/stalls are not acceptable forthat purpose, the NDMC shall inform the ChaturvediCommittee about the said decision. (We have alreadyobserved that pending construction of kiosk/stall theclaimant tentatively allotted the place or other person

authorisedly using the place for vending on Tehbazari, shallcontinue. We also said unauthorised persons vending atthese places be evicted by the NDMC forthwith.)

For the purpose of obtaining clearance for the saidauthority, the NDMC is granted time up to 30-6-1998 andfor construction of the kiosks/stalls up to 31-10-1998.

8. In regard to eviction of unauthorised squatters or otherpersons using the places identified by the TharejaCommittee the NDMC has undertaken to have themevicted forthwith and in case this is not done, it will beopen to the Chaturvedi Committee to bring it to the noticeof this Court for appropriate orders, as stated earlier.

9. The NDMC in general and the Director of Estates andthe Director of Enforcement in particular will help andimplement the decisions, directions or orders of Shri V.C.Chaturvedi. The NDMC shall also provide the otherinfrastructure to Shri Chaturvedi as stated in the main bodyof this order and pay his remuneration (in regard to whichwe are passing separate orders in this SLP).

10. The decisions of the Chaturvedi Committee both onthe question of allotment of the kiosks/stalls or the sitesfor Tehbazari and also as to quantum of arrears ofTehbazari shall be final as indicated in the body of thisorder and shall not be questioned either by the claimantsor the NDMC before any authority, tribunal, court of law,the High Court or in this Court. No petition shall beregistered in this behalf by the above bodies. We have onlypermitted the Chaturvedi Committee to file IAs in theappeal seeking any direction or clarification and noneothers. So far as orders of NDMC in regard to change oftrade, it is open to the affected parties to resort to allappropriate remedies. We have so permitted ShriChaturvedi to move this Court in certain respects.

29. Again the matter came before this Court in IA No.394in I.A. No.356 in WP (Civil) No.1699/1987 (Sudhir Madan andothers vs. Municipal Corporation of Delhi and others). In thatmatter the Court on 03.03.2006 observed that it was notpossible to look into each individual grievance and theproceeding being a Public Interest Litigation, the Court was toprovide guidelines consistent with the public interest so that theroads, streets, paths, parks etc. are not occupied byunauthorised hawkers. The Court tried to balance between thehawkers’ right to hawk on the streets and the right of thepedestrians, who were larger in number to use the streets. TheCourt, therefore, held that if it was consistent with the rights ofthe citizens to provide any space to the hawkers, then that couldbe done by the authorities. The Court directed the authoritiesto frame a scheme keeping all these factors in mind, and alsobearing in mind the National Policy on Urban Street Vendors,2004 (hereinafter “2004 Policy”).

30. Pursuant to such orders, NDMC and MCD framedschemes for hawkers and squatters following the 2004 Policy.Thereafter, the matter was taken up by this Court from time totime, wherein it was discussed and certain modifications weresuggested, which subsequently were incorporated in thescheme.

31. On 17.05.2007 this Court rejected the prayer of thehawkers to re-identify the site relying upon the orders dated06.11.2000 passed in Ramesh Shah vs. MCD and others (IANo. 332-333 in WP (Civil) No. 1699/1987), while at the sametime approving the schemes framed by the NDMC and theMCD.

32. By the order dated 17.05.2007 the municipalauthorities were directed to implement the scheme as approvedby the Court. Since the NDMC area had three legislativeconstituencies, this Court accordingly directed the setting upof three Zonal Vending Committees as per the schemeprepared by the NDMC. Thereafter the Court vide its order

dated 23.01.2008 asked NDMC and MCD to file status reportsabout the implementation of the scheme. Pursuant to thedirection of this Court by order dated 08.05.2008, Mrs.Sukhvinder Kaur, a member of the Delhi Higher JudicialServices was nominated by the High Court as the PresidingOfficer of the Zonal Vending Committees in NDMC area.

33. The main function of the Vending Committees was toverify the vending sites and hawking zones in the NDMC area.Its other function was to scrutinize application for allotment ofthe sites.

34. Both, the NDMC and MCD, are statutory bodies underThe New Delhi Municipal Council Act, 1994 (hereinafter,‘NDMC Act’) and The Delhi Municipal Corporation Act, 1957(hereinafter ‘DMC Act’) respectively. Both the acts areparliamentary legislations.

35. MCD was established under Section 3 of the Act asa body corporate composing of Councillors. Under DMC Acta public street means a street which vests in the Corporationas a public street or the soil below, the surface of which vestsin the Corporation and which under the provision of the Actbecomes or is declared to be a public street (See Section2(44) of the Act).

36. All public streets vest in the Corporation under Section298 of the Act. Section 42 of the Act enumerates the obligatoryfunctions of the Corporation, one of which is the removal ofobstructions and projections in or upon the streets, bridges andother public places [See Section 42(p)].

37. Under Section 320(1) of the Act there is a clearmandate that no person shall, except with the permission of theCommissioner, and on payment of such fee as he or she, ineach case, thinks fit, place or deposit upon any street or uponany open channel, drain or well in any street or upon any publicplace in stall, chair, bench, box, ladder, bale or other things

whatsoever so as to form an obstruction thereto andencroachment thereon. Section 322 of the Act also empowersCommissioner to remove any stall, chair, bench, box, ladder,bale or anything whatsoever placed, deposited or projected in,upon, from or to any place in the street. If it has been placed incontravention of the Act, the Commissioner can remove anyarticle hawked or exposed for sale on any public street or inany other place in contravention of this Act along with anyvehicle, package or box or any other thing in or on which sucharticle is placed.

38. Under Section 481 of the said Act, the Corporation mayframe bye-laws relating to permission, regulation or prohibitionof use or occupation of any street or place by itinerant vendors/hawkers or by any person, for the sale of articles or the exerciseof any calling or the sitting of any booth or stall and makeregulation for fees chargeable for such occupation. (See theprovision of Section 481E(5) of the Act)

39. Under the NDMC Act almost similar provisions arethere. Definition of public street under Section 2(39) of NDMCAct is virtually the same as the definition of public street underSection 2(44) of the DMC Act. Similarly under Section 3 of theNDMC Act, NDMC has been formed as a body corporatehaving perpetual succession and a common seal. NDMC isalso equally empowered to remove obstructions andprojections in and upon the streets, bridges and other publicplaces. In fact it is one of the obligatory functions of NDMC.

40. Under Section 202 of the NDMC Act all public streetsvest in the Council. The NDMC Act also contains similarprovisions prohibiting erection of structures/fixtures whichcauses obstructions in the street. (See Section 224. Sections225 and 226 of NDMC have been referred to already).

41. The NDMC is also authorized to prevent any nuisancein any public street or public place, or picketing of animals orcollection of carts, displacement, damaging or making any

alteration to the pavement, water-drain etc. without anyauthority. (See Section 308(viii) of the Act. Reference to Section330 of the Act has been already made)

42. It has been held by the Constitution Bench of this Courtin Sodan Singh (supra) that right to hawk on the streets of Delhiis a fundamental right under Article 19(1)(g) of the Constitutionbut such right is not absolute and is subject to reasonablerestrictions under Article 19(6) of the Constitution.

43. On a perusal of the aforesaid constitutional provision,it is clear that the rights under Article 19(1)(g) can only becontrolled by law as contemplated in Article 19(6). Such law canimpose reasonable restrictions. The relevant constitutionalprovisions are set out:-

“19(6) Nothing in sub-clause (g) of the said clause shallaffect the operation of any existing law in so far as itimposes, or prevent the State from making any lawimposing, in the interest of the general public, reasonablerestrictions on the exercise of the right conferred by thesaid sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in sofar as it relates to, or prevent the State from making anylaw relating to, -

(i) the professional or technical qualifications necessary forpracticing any profession or carrying on any occupation,trade or business, or

(ii) the carrying on by the State, or by a corporation ownedor controlled by the State, of any trade, business, industryor service, whether to the exclusion, complete or partial,of citizens or otherwise.”

44. On an analysis of the provisions under Article 19(6), itis clear that the provisions under Article 19(6) are broadly intwo parts. The first part authorizes that nothing in sub-clause

(g) of Article 19(1) shall affect the operation of existing law inso far it imposes reasonable restrictions, in the interest ofgeneral public, on rights conferred by Article 19(1)(g). Thesecond part is that nothing contained in Article 19(1)(g) shallprevent the State from making any law imposing, in the interestof general public, reasonable restrictions on the exercise ofrights conferred by Article 19(1)(g). Here we are not concernedwith clauses (i) and (ii) of Article 19(6).

45. It is, therefore, clear that reasonable restrictions on thefundamental right under Article 19(1)(g) can be imposed eitherby existing law or by a law which may be made by a State inthe interest of general public.

46. Therefore, nothing short of law can impose reasonablerestrictions on a citizen’s fundamental right to carry on hawkingunder Article 19(1)(g) of the Constitution.

47. In Bijoe Emmanuel and others vs. State of Kerala andothers (AIR 1987 SC 748) this Court held, “the law is now wellsettled that any law which may be made under clauses (2) to(6) of Article 19 to regulate the exercise of the right to thefreedoms guaranteed by Article 19(1)(a) to (e) and (g) must bea law having statutory force and not a mere executive ordepartmental instructions.” (para 15 page 753)

48. In coming to the aforesaid formulation in BijoeEmmanuel (supra) this Court relied on two Constitution Benchdecisions of this Court in the case of Kameshwar Prasad andothers vs. State of Bihar and another (AIR 1962 SC 1166) andanother Constitution Bench decision of this Court in KharakSingh vs. State of U.P. and others (AIR 1963 SC 1295).

49. In the instant case, this Court has discussed the legalprovisions in the NDMC and DMC Act which seek to controlthe fundamental right of the petitioners to carry on their businessof hawking.

50. As stated earlier the scheme which was framed by

NDMC for regulation of squatting and hawking in the NDMCareas was on the basis of guidelines given by this Court in itsjudgment dated 30th August 1989 in Sodan Singh’s case. Inthat scheme NDMC has divided its area into four zones andsome of the zones have been made non-hawking zones. Fromtime to time the said scheme has been modified by the orderspassed by this Court. This Court also finds that subsequentlyanother scheme was prepared by the NDMC pursuant to the2004 Policy. In the said scheme the NDMC has referred toSections 225 and 330 of the NDMC Act. Section 225 of theAct permits squatting only on the permission given by theChairman and on payment of such fees in each case as aChairman may think fit. Section 330 of the Act provides forlicence for hawking articles etc. The said Section 330authorizes the NDMC to prevent hawking unless there is alicence to that effect granted by the Chairperson.

51. As per Section 226 of the NDMC, Chairperson maywithout notice cause removal of articles kept in the public streetand Section 369(2) of the Act provides for punishment forcontravention of the provision of the Section 225(1).

52. The 2004 Policy provides for setting up of a vendingcommittee which may consist of representatives of (a)Municipal Authority, (b) Traffic and Local Police, (c) Public andowning authority, (d) Associations of traders, residents and alsoof street vendors both static and mobile. The function of suchvending committing shall include:

“(i) Demarcation of vending and non-vending areas;

(ii) Provision and identification of space for squattingand areas for hawking. Provisions for space mayinclude temporary designations as Vendor markets(e.g. as weekly markets) whose use at other timemay be different (e.g. Public Parks, Parking lots)etc.;

(iii) Timing restrictions on the urban vending. It shouldcorrespond to needs of ensuring non-congestion ofpublic spaces;

(iv) Public hygiene and cleanliness;

(v) Ensure continuation and upgradation of weeklymarkets;

(vi) Quantitative norms i.e. where to allow, how manysquatters or persons;

(vii) Qualitative guidelines:- This has to include

- Provision for solid waste disposals,

- Public toilets to maintain cleanliness;

- Aesthetic design of mobile stalls/push carts;

- Provision for electricity;

- Provision for protective cover to protect their waresas well as themselves from heat, rain, dust etc;

(viii) Regulatory Process;

(ix) Registration system;

(x) Corrective mechanism against defiance byvendors;

(xi) Collection of revenues and

(xii) Monitoring mechanism.”

53. The 2004 Policy has also referred to the Master Planof Delhi, 2021 which provides for informal sector in trade in theplanned development of various zones. In the said policy, thereis also a division between vending and non-vending areas andit is made clear that no hawking licence shall be issued in non-

vending areas. The timing and the day of hawking was also tobe regulated as per the suggestions of Residents WelfareAssociation (RWA).

54. Neither the said policy nor the scheme framed by theNDMC can be called law, except of course the provisions ofSections 225, 226, 330 and 369(2) of NDMC Act mentionedhereinabove.

55. Section 388 of the NDMC Act empowers the NDMCto frame bye-laws. This power is categorized under differentclauses of sub-section 1 of Section 388. Under clause (D) ofthe said sub-section there is a provision for making bye-lawsrelating to the streets. Section 388(1)(D)(5) of NDMC Actprovides as follows:

“388(1)(D)(5) the permission, regulation or prohibition oruse or occupation of any street or place by it, itinerantvendors or hawkers or by any person for the sale of articlesor the exercise of any calling or the setting up of any boothor stall and the fees chargeable for such occupation;”

56. The bye-laws have to be laid before Parliament underSection 389 of the said Act. These bye-laws may have thestatus of subordinate or delegated legislation. Penalty has beenprovided for breach of bye-laws under Section 390 of the Act.

57. It does not appear that the NDMC has made any bye-law under Section 388 of the NDMC Act so as to regulate thefundamental right of the hawkers to hawk or squat on the streetsof Delhi. The schemes which have been framed under thedirection of this Court or the 2004 Policy which has beenframed by the Government, cannot said to be framed under thesaid power to frame bye-laws and do not have the status of lawor even subordinate legislation.

58. The Master Plan of Delhi, 2021 however, provides forthe accommodation of the informal sector wherein it states for

suitable public conveniences and solid waste disposal andarrangements apart from formulation of guidelines for schemeswhich would include hawking and no hawking zones. TheMaster Plan also seeks to define the role and responsibility ofNGOs along with the specific obligation of the hawkers towardssociety for maintenance of law and order within the hawkingzones and weekly markets. There was also provision forinformal bazaar in new urban areas.

59. Subsequent to the 2004 Policy a new National Policyon Urban Street Vendors, 2009 (hereinafter “2009 Policy”) wasframed on 17th June 2009. The most important part of the 2009Policy is that it recognizes street vending as an integral andlegitimate part of urban retail trade and distribution system,even when otherwise street vending is sometimes projected asa major menace in urban areas aggravating traffic problems.But the 2009 Policy aims at giving the street vendors a legalstatus by providing them legitimate vending and hawking zonesin the city in the town master plans and development plans.

60. The National Policy, therefore, directs “MunicipalAuthorities should frame necessary rules for regulating entry ofstreet vendors on a time sharing basis in designated vendingzones keeping in view three broad categories – registeredvendors who have secured a license for a specified site/stall;registered street vendors in a zone on a time sharing basis;and registered mobile street vendors visiting one or the othervending zone;”.

61. The Policy, therefore, seeks to institutionalize a partof the urban street vending through legislation. The objects ofthe policy are as follows:

3.1 Overarching Objective

The overarching objective to be achieved through thisPolicy is:

To provide for and promote a supportive environment forthe vast mass of urban street vendors to carry out theirvocation while at the same time insuring that their vendingactivities do not lead to overcrowding and unsanitaryconditions in public spaces and streets.

3.2 Specific Objectives

This Policy aims to develop a legal framework through amodel law on street vending which can be adopted byStates/Union Territories with suitable modifications to takeinto account their geographical/local conditions. Thespecific objectives of this Policy arc elaborated as follows:

(a) Legal Status:

To give street vendors a legal status by formulating anappropriate law and thereby providing for legitimatevending/hawking zones in city/town master or developmentplans including zonal, local and layout plans and ensuringtheir enforcement;

(b) Civic Facilities:

To provide civic facilities for appropriate use of identifiedspaces as vending/hawking zones, vendors’ markets orvending areas in accordance with city/town master plansincluding zonal, local and layout plans;

(c) Transp arent Regulation:

To eschew imposing numerical limits on access to publicspaces by discretionary licenses, and instead moving tonominal fee-based regulation of access, where previousoccupancy of space by the street vendors determines theallocation of space or creating new informal sectormarkets where space access is on a temporary turn-by-turn basis. All allotments of space, whether permanent ortemporary should be based on payment of a prescribed

fee fixed by the local authority on the recommendations ofthe Town Vending Committee to be constituted under thispolicy;

(d) Organization of Vendors:

To promote, where necessary, organizations of streetvendors e.g. unions/co-operatives/associations and otherforms of organizations to facilitate their collectiveempowerment;

(e) Participative Processes:

To set up participatory processes that involve firstly, localauthority, planning authority and police; secondly,associations of street vendors; thirdly, resident welfareassociations and fourthly, other civil society organisationssuch as NGOs, representatives of professional groups(such as lawyers, doctors, town planners, architects etc.),representatives of trade and commerce, representativesof scheduled banks and eminent citizens;

(f) Self-Regulation:

To promote norms of civic discipline by institutionalizingmechanisms of self-management and self-regulation inmatters relating to hygiene, including waste disposal etc.amongst street vendors both in the individually allottedareas as well as vending zones/clusters with collectiveresponsibility for the entire vending zone/cluster; and

(g) Promotional Measures:

To promote access of street vendors to such services ascredit, skill development, housing, social security andcapacity building. For such promotion, the services of SelfHelp Groups (SHGs)/Co-operatives/ Federations/MicroFinance Institutions (MFIs), Training Institutes etc. shouldbe encouraged.

62. A law has been enacted under the name and style ofa National Capital Territory of Delhi Laws (Special Provisions)Second Act 2009 on 23rd December 2009. This law makesspecial provisions for the National Capital Territory of Delhi fora period up to 31st December 2010. It is, therefore, clear thatthe said law is for temporary period. From the preamble of thelaw, it will appear that whereas a strategy and a scheme hasbeen prepared by the local authorities in the National CapitalTerritory of Delhi for regulation of urban street vendors inaccordance with national policy for urban street vendors andthe Master Plan for Delhi, 2021 and it has also been providedthat whereas more time is required for orderly implementationof the scheme regarding hawkers and urban street vendors andfor regulation of unauthorized colonies, the said law shall haveeffect only up to 31st December 2010. Section 3(1)(b) of thesaid Act provides as follows:

“3(1)(b) scheme and orderly arrangements for regulationof urban street vendors in consonance with the nationalpolicy for urban street vendors and hawkers as providedin the Master Plan of Delhi, 2021”.

63. There is a Bill called a Model Street Vendors(Protection of Livelihood and Regulation of Street Vending) Bill,2009 by the Government of India, Ministry of Housing andUrban Poverty Alleviation. From the preamble and the long titleof the Bill it appears that the Bill is to provide for protection oflivelihood of urban street vendors and to regulate street vendingand for matters connected therewith. Now if the said Bill isenacted in the present form, the Bill then prima facierecognizes the rights of hawkers and vendors under Article 21of the Constitution since it seeks to protect their livelihood.

64. In the background of the provisions in the Bill and the2009 Policy, it is clear that an attempt is made to regulate thefundamental right of street hawking and street vending by law,since it has been declared by this Court that the right to hawk

on the streets or right to carry on street vending is part offundamental right under Article 19(1)(g).

65. However, till the law is made the attempt made byNDMC and MCD to regulate this right by framing schemeswhich are not statutory in nature is not exactly within thecontemplation of constitutional provision discussed above.However, such schemes have been regulated from time to timeby this Court for several years as pointed out above. Even,orders passed by this Court, in trying to regulate such hawkingand street vending, is not law either. At the same time, there isno denying the fact that hawking and street vending should beregulated by law. Such a law is imminently necessary in publicinterest.

66. Certain broad facts cannot be lost sight of. Whateverpower this Court may have had, it possibly cannot, in theabsence of a proper statutory framework, control the everincreasing population of this country. Similarly this Court cannotcontrol the influx of people to different metro cities and townsin search of livelihood in the background of the hugeunemployment problem in this country. While there is a burningunemployment on one hand, on the other hand there is a sectionof our people, that, having regard to its ever increasing wealthand financial strength, is buying any number of cars, scootersand three wheelers. No restriction has apparently beenimposed by any law on such purchase of cars, three wheelers,scooters and cycles. There is very little scope for expandingthe narrowing road spaces in the metropolitan cities and townsin India. Therefore, the problem is acute. On the one hand thereis an exodus of fleeting population to metro cities and towns insearch of employment and on the other hand with the everincreasing population of cars and other vehicles in the samecities, the roads are choked to the brim posing great hazardsto the interest of general public. In the midst of such near chaosthe hawkers want to sell their goods to make a living. Most ofthe hawkers are very poor, a few of them may have a marginally

better financial position. But by and large they constitute anunorganized poor sector in our society. Therefore, structuredregulation and legislation is urgently necessary to control andregulate fundamental right of hawking of these vendors andhawkers.

67. This Court finds that innumerable IAs have been filedin this Court along with various objections by the hawkers, mostof the time collectively, complaining about steps taken bymunicipal authorities, namely, NDMC and MCD to prevent themfrom hawking and vending. This Court has tried its best tosomehow deal with the situation. But it is difficult for this Courtto tackle this huge problem in the absence of a valid law. Thenature of the problem defies a proper solution by this Court byany judicially manageable standards.

68. This Court, therefore, disposes of this writ petition andall the IAs filed with direction that the problem of hawking andstreet vending may be regulated by the present schemesframed by NDMC and MCD up to 30th June, 2011. Within thattime, the appropriate Government is to legislate and bring outthe law to regulate hawking and hawkers’ fundamental right.

69. Till such time the grievances of the hawkers/vendorsmay be redressed by the internal dispute redressalmechanisms provided in the schemes.

70. In the affidavit filed by the MCD, they have set out theDispute Redressal Mechanism as follows:

“(a) First Level: 12 Zonal Vending Committees (one inevery Zone); headed by Deputy Commissioner of theZone.

(b) Second Level: In case of dispute between the allotteeof Tehbazari site and the MCD, the Zonal VendingCommittees are headed by the Presiding Officer (in-Service Addl. Distt. & Sessions Judge) Presently Ms.Rekha Rani.

(c) Third Level: Appellate Authority headed by a Retd.Judge of the Delhi High Court-presently Shri J.P. Singh.”

71. It has also been stated in the affidavit that in case anyparty is aggrieved by the decision pertaining to above levels,he or she is free to file an appeal to the higher level. Such levelof Zonal Vending Committee is headed by DeputyCommissioner of the concerned zone. If any party is aggrievedby the order/decision of the said Zonal Vending Committee, heor she can prefer an appeal with the Zonal Vending Committeeheaded by the Presiding Officer (in-Service Additional Districtand Sessions Judge) and thereafter to the Appellate Authority.In the said affidavit, which has been filed by Shri K.S. Mehra,Commissioner of MCD, it has been stated that the MCDundertakes that in case the decisions by any of the committeesare not acceptable to the department, the MCD would file anappeal to the next level. However, where no appeal is filed, thedecision at the particular level would be final. It has also beenstated in the affidavit by the MCD that if there is a need forchange of any clause or term of the scheme, the MCD may doso in terms of the order of this Court.

72. In so far as NDMC is concerned they have also filedan affidavit, affirmed by Shri Parimal Rai, Chairman, NDMC.In that affidavit, they have disclosed another affidavit which wasfiled by Shri Parimal Rai in this writ petition [W.P.(C) No.1699of 1987], wherein they have given the details of the DisputeRedressal Mechanism in paragraph 10, which is set out asfollows:-

“NDMC proposes to implement Adjudicating mechanismin its scheme in a Three-Tier system like the one in MCDScheme. Proposed Three-Tier system is Three VendingSub Committees & Vending Committee main and oneAppellate Authority over and above the Vending Sub-Committees and Main Vending Committee. The details ofthis proposed three-tier system is as under:

(i) Vending Sub-Committee (Site of Spaces)

(ii) Vending Sub-Committee (Health and Hygiene)

(iii) Vending sub-Committee (Enforcement)

Functions and compositions of these sub-committees areas under.

A. Sites & Spaces:-

(a) Functions :-

The sub-committee shall be responsible forrecommending to Vending Committee (Main) on thefollowing :-

(i) Identifying spaces of squatting and the areasfor hawking in the vending areas specified inpara-4.2.1 of the scheme. Theseidentification shall be as per the paras-3.3 ofthe scheme. While considering the spacesnear the schools, the representative of theDirector (Education) shall be co-opted. Whiledetermining the spaces near the parks,representative of Director (Horticulture) shallbe co-opted. While determining the spacesnear the parks, representative of Director(Horticulture) shall be co-opted. Wherespaces are to be selected near Hospitals,representative of the Hospital to be included.

(ii) To identify weekly or evening markets.

(iii) To begin with the Committee shall restrictitself to the sites already earlier approved bythe Supreme Court excluding the sitesdeleted by orders of Court or due to securityreasons from Parliament Complex and

certain areas being declared as non-vendingareas and identifying spaces on these sites.

(iv) Timings restrictions to ensure that there is nocongestion in public places.

(v) Quantitative norms i.e. where to allow andhow many squatters or persons at each site.

(b) Composition:-

This sub-Committee shall consist of the followingmembers-

• Director (Vending Committee).

• A representative of the MLA of New Delhi AssemblyConstituency/Delhi Cantonment Constituency.

• A representative of the traffic police/local police for theNDMC area.

• A representative of the Market Association of theconcerned market for which squatting sites are to beidentified.

• A representative of the Resident Welfare Associationwhere the vending sites/hawking sites are to be decidedin the residential colonies.

• A representative of the authorized hawkers/squatters fromthe market for which the sites are being identified.

• A representative of the Road Division of the NDMCwhere the sites are to be selected on footpath and theroads.

• Convenor of the sub-Committee shall be Joint Director(Vending Committee) or any other officer of NDMCappointed by Chairperson.

This Committee shall be headed by Director (VendingCommittee) {Selection of sites & spaces}.

B. Vending sub-Committee (Health and Hygiene):

(a) Functions:-

The sub-Committee shall recommend to the VendingCommittee on the following:-

(i) Issue of fresh licence for hawking includingfor ice-cream and water trolleys.

(ii) Recommend cancellation of hawking licenceand Tehbazari permission of those whoviolate terms of licence or do not confirm toHealth & Hygiene.

(iii) To ensure public hygiene and cleanliness.

(iv) Qualitative guidelines-

- Provision of solid waste disposal fromsquatting sites.

- Public toilet to maintain cleanliness

- Provision for electricity, if the same is to beprovided.

- Approving protective covers to protect thewares and squatters from the rain, heat, dustetc.

- Amount of fee to be collected for disposal ofsolid waste from sites and for user of toiletfacilities.

(v) Issue of photo identity cards to hawkers.

(vi) Any other function assigned by Vending

Committee [Main] or Chairperson.

(b) Composition:-

This Vending sub-Committee shall be headed by theMedical Officer of Health. Its Members shall be -

(i) Representative of Chief Engineer (Electrical).

(ii) Representative of Chief Engineer (Civil).

(iii) A Representatives of Association of the Market forwhich hawking licence or qualitative guidelines are beingconsidered.

(iv) A representative of the authorized squatters of themarket for which hawking licence or qualitative guidelinesare being considered.

(v) Convenor of the Sub-Committee shall be Jt. Director(Vending Committee).

The Committee shall submit its recommendations onqualitative guidelines by 30.09.2010 to VendingCommittee (Main).

C. Vending sub-Committee (Enforcement) :

(a) Functions

(i) Registration of squatters covered by Clause-4 & 5 after police verification.

(ii) Collection of registration charges fixed by theChairperson on the recommendations of theVending Committee.

(iii) Regulatory process, registration system.Issue of photo Identity Cards.

(iv) Collection of fees as may be fixed by the

Chairperson on the recommendations of theVending Committee.

(v) Monitoring mechanism.

(vi) Other matters as may be assigned byVending Committee or Chairperson.

(vii) To recommend cancellation of permission toapproved squatters.

(viii) To issue Tehbazari permission, on approvalof recommendation of Vending Committeeby Chairperson.

(ix) To process cases of transfer on legal heirbasis.

(x) To remove squatters from non-vending areasand remove unauthorized squatter fromvending areas and take action U/s-226 ofthe New Delhi Municipal Council Act, 1994.

(b) Composition:-

The Committee shall be headed by Director (Enforcement)and shall consist of representative of Accounts, ChiefSecurity Officer and local police, if necessary. Convenerof the Committee shall be Joint Director, VendingCommittee or any other officer appointed by theChairperson. Chairperson can also add members in thissub-Committee. This Committee shall complete itsfunctions of Registration by 31st October 2010.”

73. In paragraph 12 of the affidavit it has been stated thatthere shall be an Appellate Authority which shall attend to theredressal of grievances of squatters, hawkers, traders,residents or any other person by hearing appeals against thedecision of the Vending Committee (Main). Paragraph 12 ofthat affidavit is set out below:-

“There shall be an Appellate Authority. On the forwardingof petitions received by the Chairperson, this Authorityshall attend to redressal of grievances of squatters,hawkers, traders, residents or any other person. TheAuthority shall also hear appeals against the decision ofVending Committee (Main). Decisions of this Authorityunless challenged before a Higher Forum or in anyCompetent Court, shall be final. This Authority shall beinitially headed by a person appointed by the Chairpersonhaving at least 10 years legal or judicial background. Therecan be more than one member in this Authority.”

74. In the said affidavit, which was affirmed before thisCourt on 24th August, 2010 it has been stated that NDMC shallcomply with the orders which would be passed by theadjudicatory mechanism contemplated in the scheme andwhich has been approved by this Court for the NDMC area,unless such orders are made subject matter of challengebefore a higher forum or in any other competent Court.

75. In view of such schemes, the hawkers, squatters andvendors must abide by the Dispute Redressal schemementioned above. There should not be any direct approach tothis Court by way of fresh petition or IAs, bypassing the DisputeRedressal Mechanism provided in the scheme.

76. However, before 30th June, 2011, the appropriateGovernment is to enact a law on the basis of the Bill mentionedabove or on the basis of any amendment thereof so that thehawkers may precisely know the contours of their rights.

77. This Court is giving this direction in exercise of itsjurisdiction to protect the fundamental right of the citizens. Thehawkers’ and squatters’ or vendors’ right to carry on hawkinghas been recognized as fundamental right under Article19(1)(g). At the same time the right of the commuters to movefreely and use the roads without any impediment is also afundamental right under Article 19(1)(d). These two apparently

conflicting rights must be harmonized and regulated bysubjecting them to reasonable restrictions only under a law. Thequestion is, therefore, vitally important to a very large sectionof people, mostly ordinary men and women. Such an issuecannot be left to be decided by schemes and which aremonitored by this Court from time to time.

78. The second reason is that the appropriate Governmenthas already enacted a Bill and, therefore, the initial decisionmaking in the field of legislative exercise is complete. It has,of course, to be converted into a law by following theConstitutional process. That is why time till 30th June, 2011 isgiven.

79. The fundamental right of the hawkers, just because theyare poor and unorganized, cannot be left in a state of limbo norcan it left to be decided by the varying standards of a schemewhich changes from time to time under orders of this Court.With the aforesaid observations and directions the writ petitionand all the IAs are disposed of.

80. No order as to costs.

N.J. Matters disposed of.

1046[2010] 12 S.C.R. 1045

VAN VIBHAG KARAMCHARI GRIHA NIRMAN SAHKARISANSTHA MARYADIT (REGD.)

v.RAMESH CHANDER AND ORS.(Civil Appeal No. 8982 of 2010)

OCTOBER 19, 2010

[G.S. SINGHVI AND ASOK KUMAR GANGUL Y, JJ.]

Code of Civil procedure, 1908: O.2 r.2 and O.6 r.17 –Omission to sue for one of several reliefs and inclusion ofomitted relief after long time – Cancellation of agreement ofsale of suit land – Intimation of cancellation – Suit by vendeeseeking declaration of ownership and permanent injunctionover suit land – Inclusion of relief of specific performance byway of amendment after about 11 years of filing of the saidsuit – Held: The cause of action to file a suit for specificperformance arose on intimation of cancellation of agreementof sale – Omission to include the relief of specific performancein the suit for declaration would be considered asrelinquishment of that part of claim – Relief of specificperformance was, therefore, hit by the provision of O.2 r.2 –Although the inclusion of relief was allowed by way ofamendment, it would not relate back to the date of filing of theoriginal plaint, in view of the clear bar under Article 54 of theLimitation Act since such inclusion virtually altered thecharacter of the suit – Urban Land (Ceiling and Regulation)Act, 1976 – Land Acquisition Act, 1894 – Limitation Act, 1963– s.14; Schedule II, Article 54 – Specific performance – Causeof action – Delay – Suit.

The first respondent entered into an agreement ofsale of suit land with the appellant and received earnestmoney and delivered the possession of the land to theappellant.

On 26.4.1985, the acquisition proceedings under theLand Acquisition Act, 1894 were initiated in respect of thesuit land. The appellant filed a writ petition before theHigh Court for quashing the acquisition proceedings.The High Court stayed the acquisition proceedings.However, on 3.2.1991, the first respondent issued apublic notice that he was the owner and in possessionof the suit land, and any action taken by the appellantover such land would not affect his rights of ownershipand possession over the land since the agreement to selland power of attorney in favour of the appellant had beencancelled. Immediately, thereafter, the appellant filed asuit for declaration of ownership and for permanentinjunction in respect of the suit land. The prayer fortemporary injunction made by the appellant wasdismissed. The said finding was affirmed by first appellatecourt and, thereafter, not challenged further by theappellant.

On 14.1.1994, when the writ petition for quashing ofthe acquisition proceedings came up for hearing beforethe High Court, the authorities declared that it hadwithdrawn its scheme. The High Court allowed the writpetition and ordered that the land should be reverted tothe original owner as the acquisition notification wasquashed.

On 16.12.2002, the appellant filed an application foramendment of the pleadings under Order 6 Rule 17 ofCPC in the pending civil suit for inclusion of the relief ofspecific performance of contract. The same was allowed.The plaint was returned to the appellant for filing the samein the court of competent jurisdiction as the suitexceeded the pecuniary jurisdiction of the civil court.Immediately on 25.6.2003, the appellant presented theplaint in the District Court along with an application underSection 14 of the Limitation Act, praying for exclusion of

1047 1048VAN VIBHAG K.G.N. SAHKARI SANSTHA MARYADITv. RAMESH CHANDER

time spent in prosecuting the suit. The trial courtdismissed the suit and also the application under Section14 of the Limitation Act. The High Court upheld thedecision of the trial court. The instant appeal was filedchallenging the order of the High Court.

HELD: 1. The refusal by the first respondent toacknowledge the right of the appellant over the land inits public notice dated 3.2.1991 furnished the appellantwith a cause of action to file a suit for specificperformance. The period of limitation prescribed in Article54 of Schedule II to the Limitation Act, 1963 for filing a suitfor specific performance is three years from the date fixedfor the performance, or if no such date is fixed, when theplaintiff has notice that performance is refused.Admittedly, no date was fixed for performance in theagreement for sale entered between the parties in 1976.But definitely by its notice dated 3.2.1991, the firstrespondent made its intentions clear about refusing theperformance of the agreement and cancelling theagreement. The appellant, on noticing the same, filed asuit on 11.2.1991, but he did not include the plea ofspecific performance. The appellant defended non-inclusion of the plea of specific performance by referringto the two facts that there was an acquisition proceedingover the said land under the Land Acquisition Act and inview of the provisions of the Urban Land (Ceiling andRegulation) Act, 1976, the appellant could not have madethe prayer for specific performance. The said purportedjustification of the appellant was not tenable in law. If thealleged statutory bar referred to by the appellant stoodin its way to file a suit for specific performance, the samewould also have been a bar to the suit which it had filedclaiming declaration of title and injunction. In fact, a suitfor specific performance could have been easily filed

subject to the provision of Section 20 of the Ceiling Act.The appellant had the cause of action to sue for specificperformance in 1991 but he omitted to do so. Theomission to include the relief of specific performance inthe suit which it filed when it had cause of action to suefor specific performance is to be considered asrelinquishment of that part of its claim. The suit filed bythe appellant, therefore, was hit by the provisions of Order2 Rule 2, CPC. Though the appellant did notsubsequently file a second suit, as to bring his casesquarely within the bar of Order 2 Rule 2, but the broadprinciples of Order 2 Rule 2, which are also based onpublic policy were attracted in the facts of this case. Eventhough the prayer for amendment to include the relief ofspecific performance was made about 11 years after thefiling the suit, and the same was allowed after 12 yearsof the filing of the suit, such an amendment in the factsof the case cannot relate back to the date of filing of theoriginal plaint, in view of the clear bar under Article 54 ofthe Limitation Act. In the instant case, the inclusion of theplea of specific performance by way of amendmentvirtually altered the character of the suit, and its pecuniaryjurisdiction went up and the plaint was to be transferredto a different court. If as a result of allowing theamendment, the basis of the suit is changed, suchamendment even though allowed, cannot relate back tothe date of filing the suit to cure the defect of limitation.The plea of specific performance, which is a discretionaryrelief, cannot be granted to the appellant in the instantcase. The court below and the High Court were correctin their reasoning in dismissing the suit and the firstappeal respectively. [Paras 23, 24, 27, 28, 29, 30, 31, 33-37, 39] [1055-B-C-H; 1056-A-F, 1057-B-H; 1058-D]

Shah Jitendra Nanalal v. Patel Lallubhai Ishverbhai AIR

1049 1050VAN VIBHAG K.G.N. SAHKARI SANSTHA MARYADITv. RAMESH CHANDER

1984 Guj 145; Vishwambhar & Ors. v. Laxminarayan & Anr.(2001) 6 SCC 163; K. Raheja Constructions Ltd. & Anr. v.Alliance Ministries & Ors. 1995 Suppl. (3) SCC 17 – reliedon.

C. Beepathumma & Ors. v. V.S. Kadambolithaya & Ors.(1964) 5 SCR 836; New Bihar Biri Leaves Co. & Ors. v. Stateof Bihar & Ors. (1981) 1 SCC 537 – distinguished.

Case Law Reference:

(1964) 5 SCR 836 distinguished Para 22

AIR 1984 Guj 145 relied on Para 31

1995 Suppl. (3) SCC 17 relied on Para 38

From the Judgment & Order dated 10.8.2007 of the HighCourt of Madhya Pradesh at Indore in First Appeal No. 142 of2005.

Pallav Shisodia, P.D. Sharma, Dr. Naipal Singh for theAppellant.

Jaideep Gupta, Niraj Sharma, L.P. Singh, PradeepAggarwal, Deepam Borah, Himanshu Gupta for theRespondents.

GANGULY, J. 1. Leave granted.

2. The appellant, Van Vibhag Karamchari Griha NiramanSahkari Sanstha Maryadit, Indore (hereinafter referred to as‘the appellant’), was constituted and registered under the

Madhya Pradesh Cooperative Society Act, 1960 on 26.5.1970,for the purpose of providing residential plots to the employeesof the forest department of Madhya Pradesh Government.

3. On 28.3.1974, three farmers, namely Ramesh Chander(hereinafter referred to as ‘the first respondent’), Mahavir Singhand Chunni Lal, entered into an oral agreement with theappellant to sell their respective land measuring 2.039 hectaresbearing khasra No. 203/2, 1.019 hectares bearing khasra No.203/1 and 1.602 hectares bearing khasra No. 204/1, situatedat village Chitawad tehsil and district Indore, to the appellantat Rs.2 lacs per hectare. On 25.1.1975, all the three farmersjointly received Rs.2000/- as earnest money as per theagreement dated 28.3.1974 and delivered possession of thesaid land to the appellant. The agreement to sell was executedand signed by all three farmers on 31.3.1976. The presentdispute only concerns Ramesh Chander, i.e. the firstrespondent.

4. The Urban Land (Ceiling and Regulation) Act, 1976(hereinafter the Ceiling Act) was passed by the CentralGovernment and enforced by the Government of MadhyaPradesh (MP) on 9.9.1976. The first respondent filed detailsof the total vacant land possessed by him before the competentauthority under the Ceiling Act on 24.12.1979 and also filed anexemption application under Section 20 of the Ceiling Act, inwhich he specified that land bearing khasra No. 203/2 was soldto the appellant.

5. The first respondent also submitted his affidavit to theappellant on 23.7.1982 that he had sold his agricultural landbearing khasra No. 203/2 to the appellant for consideration andthat possession of the same had been handed over. Fullpayment of the sale consideration amounting to Rs.3,20,000/-was made to the first respondent on 28.8.1984.

6. On 26.4.1985, the Indore Development Authoritydeclared a Scheme over including the disputed land.

1051 1052VAN VIBHAG K.G.N. SAHKARI SANSTHA MARYADITv. RAMESH CHANDER [ASOK KUMAR GANGULY, J.]

Accordingly, the Government of M.P. issued a notificationunder Section 4(1) of the Land Acquisition Act, 1894 withrespect to the said land. On 17.6.1985, the first respondent filedan application to the District Collector, Indore stating that hehad sold the disputed land to the appellant and possession ofthe same had been handed over to the appellant, and that thefirst respondent did not have any right regarding the acquisitionof the said land or to get compensation for the same. Allproceedings regarding acquisition were to be referred to theappellant and he prayed that the said land be exempted fromacquisition.

7. Thereafter, notification under Section 6 of LandAcquisition Act was published on 11.6.1986.

8. The first respondent had filed another affidavit dated16.12.1986 stating that the appellant was in possession of theland in question.

9. On 5.1.1987, the appellant filed a writ petition (No.39/1987) along with the first respondent in the High Court, forquashing the acquisition of the disputed land. The High Courtissued an ad-interim injunction on 15.1.1987 staying furtherproceedings before the Land Acquisition Officer.

10. The first respondent, on 3.2.1991, issued a publicnotice in a local daily, called Dainik Bhaskar, that he is theowner and in possession of the disputed land, and any actiontaken by the appellant over such land would not affect the rightsof ownership and possession of the first respondent over theland. He also stated that the agreement to sell and Power ofAttorney in favour of the appellant stood cancelled. Immediately,thereafter, the appellant filed a suit on 11.2.1991 (COS No. 19A/1990) for declaration of ownership of the appellant Society insuit land and for permanent injunction in the court of 3rd CivilJudge, Class II, Indore. The suit was subsequently transferredto the 7th Civil Judge, Class II, Indore as COS No. 603A/1992.

11. Appellant’s prayer for temporary injunction made in thesuit was dismissed by the Trial Court on 8.10.1998 by a detailedreasoned order and in that order it has been mentioned by thelearned Trial Judge, that the appellant (plaintiff in the suit) failedto make out any strong prima facie case and that the suit wasnot filed for relief of specific performance. (Para 48 of theorder).

12. On 14.1.1994, when the writ petition before the HighCourt came up for hearing, the Indore Development Authoritydeclared that it had withdrawn its scheme, and therefore, theHigh Court allowed the writ petition and quashed the notificationunder the Land Acquisition Act. The High Court ordered the landbe reverted to the original owner as the notification underchallenge was quashed.

13. On 3.1.2000, Samroj Khan, 7th Civil Judge, Class IIand Judicial Magistrate, 1st class, filed a complaint before theChief Judicial Magistrate (CJM), 1st Class, Indore, underSection 340 of the Code of Criminal Procedure, 1973, on theground that the first respondent had committed offences undersection 199/193 of the IPC, and requested the CJM toprosecute him for such offences. The said complaint is stillpending.

14. The Parliament enacted the Urban Land (Ceiling andRegulations) Repeal Act, 1999 and the Legislative Assemblyof Madhya Pradesh adopted it by a resolution dated 17.2.2000.Accordingly, the Ceiling Act stood repealed in Madhya Pradeshwith effect from 17.2.2000.

15. Thereafter, appellant by a legal notice dated 4.6.2000called upon the first respondent to execute and register the saledeed of the disputed land in favor of the appellant and failingwhich the appellant threatened to file a suit for specificperformance. The first respondent, by a legal notice dated17.6.2000, refused to act in terms of the notice of the appellant

VAN VIBHAG K.G.N. SAHKARI SANSTHA MARYADITv. RAMESH CHANDER [ASOK KUMAR GANGULY, J.]

1053 1054

dated 4.6.2000. In the meantime the appeal filed by theappellant against the order dated 8.10.1998 passed by the TrialCourt refusing to grant temporary injunction, was also dismissedby the order dated 15.5.2002, and the findings reached by theTrial Court in its order dated 8.10.1998 were affirmed by theFirst Additional District Judge, Indore. The appellant did notcarry the challenge any further against such concurrent refusalof its prayer for temporary injunction.

16. Then the appellant moved on 16.12.2002 anapplication for amendment of the pleadings under Order 6 Rule17 of CPC in the pending civil suit for inclusion of the relief ofspecific performance of contract. The same was allowed by theorder dated 10.3.2003 and the amendment was accordinglyincorporated on 17.3.2003.

17. The first respondent filed an application under Section114 and Order 47 Rule 1 CPC for a review of the order dated10.3.2003. The same was dismissed by Court on 23.6.2003.The plaint was returned to the appellant for filing the same inthe Court of competent jurisdiction as the suit exceeded thepecuniary jurisdiction of the Civil Court (category II).

18. Immediately on 25.6.2003, the appellant presented theplaint in the Court of 6th Additional District Judge, Indore alongwith an application under Section 14 of the Limitation Act,praying for exclusion of time spent in prosecuting the suit in theCourt of 7th Civil Judge Class II, Indore (i.e. from 11.2.1991 to23.6.2003). The plaint was transferred to the 19th AdditionalDistrict Judge, Indore and was registered as COS No. 6A/2003.

19. Before the trial court, the appellant contended that on11.2.1991, while instituting the suit, it had not sought the reliefof specific performance in view of the fact that no exemptionunder Section 20 of Urban Land Ceiling Act (hereinafter, ‘theAct’) was obtained in respect of suit land. However, the saidcontention was rejected by the Trial Court on 23.8.2004 by a

detailed order and the suit was dismissed. The trial court alsodismissed the application under Section 14 of the LimitationAct filed by the plaintiff (appellant herein) praying for exclusionof time from 11.2.1991 to 23.6.2003.

20. Aggrieved thereby, the appellant filed a writ petitionbefore the High Court, which was treated as Appeal No. 142/2005. The High Court, vide its impugned judgment dated10.8.2007, dismissed the appellant’s appeal.

21. Assailing the judgment of the High Court, the learnedCounsel for the appellant urged that the agreement for sale,dated 31.3.1976, was acted upon by all the vendors includingthe first respondent. It was specifically urged that the firstrespondent participated and cooperated with the appellant inall legal proceedings in respect of the said land wherein thefirst respondent took the stand that the land in question hasbeen agreed to be sold to the appellant for valuableconsideration and that the appellant has been put inpossession of the same. This Court therefore, should not allowthe first respondent to approbate and reprobate by taking acompletely different stand in the public notice which waspublished by him in Dainik Bhaskar. In support of suchcontention, the learned counsel relied on a few judgments.

22. Reliance was first placed on the judgment of this Courtin the case of C. Beepathumma & Ors. v. V.S.Kadambolithaya & Ors., reported in (1964) 5 SCR 836. Thelearned Counsel relied on the doctrine of election, by referringto Maitland’s Lectures on Equity, as also on Leading Caseson Equity by White and Tudor, considered by this Court in page850 of the report. In the aforesaid case, this Court wasexplaining the doctrine of election that prohibits a person fromtaking inconsistent stand in connection with certain documents.It may be noted that neither before the Trial Court nor the HighCourt, did the appellant advance this argument. Apart from that,in the notice dated 3.2.1991, the first respondent clearly statedthat the agreement of sale between him and the appellant stood

cancelled and the first respondent asserted his title over the plotof land in question.

23. Under the aforesaid circumstances, the crucial questionis whether the appellant has a cause of action to file a suit forspecific performance. In our judgment, the refusal by the firstrespondent to acknowledge the right of the appellant over theland in its public notice dated 3.2.1991 definitely furnishes theappellant with a cause of action to file a suit for SpecificPerformance.

24. If the appellant had filed such a suit, it could in the saidsuit, have questioned the action of the first respondent asblowing hot and cold. But it has not filed such a suit within theperiod of limitation prescribed for filing such a suit.

25. Therefore, the principles of the law of election,discussed in C. Beepathumma (supra) in a totally differentfactual context, is of no assistance to the appellant in this case.

26. The other decision on which reliance was placed bythe learned Counsel for the appellant was rendered in the caseof New Bihar Biri Leaves Co. & Ors. v. State of Bihar & Ors.reported in (1981) 1 SCC 537. The same principles ofapprobation and reprobation have been discussed inparagraph 48. In the said case, this Court invoked the saidprinciples to disapprove the actions of the petitioner whoparticipated in a public auction by accepting its terms but lateron sought to impugn them as violative of Articles 14 and19(1)(g) of the Constitution. In the present case, the factualsituation is totally different and the appellants have not filed anysuit for Specific Performance against the first respondent withinthe period of limitation.

27. In this context, the provision of Article 54 of theLimitation Act is very relevant. The period of limitationprescribed in Article 54 for filing a suit for specific performanceis three years from the date fixed for the performance, or if no

such date is fixed, when the plaintiff has notice that performanceis refused.

28. Here admittedly, no date has been fixed forperformance in the agreement for sale entered between theparties in 1976. But definitely by its notice dated 3.2.1991, thefirst respondent has clearly made its intentions clear aboutrefusing the performance of the agreement and cancelled theagreement.

29. The appellant, on noticing the same, filed a suit on11.2.1991 but he did not include the plea of SpecificPerformance. The appellant wanted to defend this action byreferring to two facts- (i) there was an acquisition proceedingover the said land under the Land Acquisition Act and (ii) inview of the provisions of the Ceiling Act, the appellant couldnot have made the prayer for Specific Performance.

30. The aforesaid purported justification of the appellantis not tenable in law. If the alleged statutory bar referred to bythe appellant stood in its way to file a suit for SpecificPerformance, the same would also be a bar to the suit which ithad filed claiming declaration of title and injunction.

31. In fact, a suit for Specific Performance could have beeneasily filed subject to the provision of Section 20 of the CeilingAct. Similar questions came up for consideration before a FullBench of Gujarat High Court in the case of Shah JitendraNanalal v. Patel Lallubhai Ishverbhai [AIR 1984 Guj 145]. TheFull Bench held that a suit for Specific Performance could befiled despite the provisions of the Ceiling Act. A suit for SpecificPerformance in respect of vacant land in excess of ceiling limitcan be filed and a conditional decree can be passed forSpecific Performance, subject to exemption being obtainedunder Section 20 of the Act. (Paras 11-13)

32. We are in respectful agreement with the views of the

Full Bench in the abovementioned decision and the principlesdecided therein are attracted here.

33. This Court is, therefore, of the opinion that the appellanthad the cause of action to sue for Specific Performance in 1991but he omitted to do so. Having done that, he should not beallowed to sue on that cause of action which he omitted toinclude when he filed his suit. This Court may consider itsomission to include the relief of Specific Performance in thesuit which it filed when it had cause of action to sue for SpecificPerformance as relinquishment of that part of its claim. The suitfiled by appellant, therefore, is hit by the provisions of Order 2Rule 2 of the Civil Procedure Code.

34. Though the appellant has not subsequently filed asecond suit, as to bring his case squarely within the bar of Order2 Rule 2, but the broad principles of Order 2 Rule 2, which arealso based on public policy, are attracted in the facts of thiscase.

35. Even though the prayer for amendment to include therelief of specific performance was made about 11 years afterthe filing the suit, and the same was allowed after 12 years ofthe filing of the suit, such an amendment in the facts of the casecannot relate back to the date of filing of the original plaint, inview of the clear bar under Article 54 of the Limitation Act.

36. Here in this case, the inclusion of the plea of SpecificPerformance by way of amendment virtually alters the characterof the suit, and its pecuniary jurisdiction had gone up and theplaint had to be transferred to a different court.

37. This Court held in Vishwambhar & Ors. v.Laxminarayan & Anr. reported in (2001) 6 SCC 163, if as aresult of allowing the amendment, the basis of the suit ischanged, such amendment even though allowed, cannot relateback to the date of filing the suit to cure the defect of limitation.

(Para 9 at pg. 168-9) Those principles are applicable to thepresent case.

38. In K. Raheja Constructions Ltd. & Anr. v. AllianceMinistries & Ors. reported in 1995 Suppl.(3) SCC 17, this courtheld that an application for amendment filed 7 years after thefiling of the suit to include the plea of Specific Performance,would not defeat the valuable rights of limitation accruing to theother side. In that case, the factual position was somewhatsimilar to the present case and this Court held that when a pleafor Specific Performance was not included in the original suit,it could not be included after a period of 7 years having regardto Article 54 of the Limitation Act. (Para 4 at pg.18-19).

39. For the reasons aforesaid, this court is of the view thatthe plea of specific performance, which is a discretionary relief,cannot be granted to the appellant in this case. The Court belowand the High Court were correct in their reasoning in dismissingthe suit and the first appeal respectively.

40. The appeal, therefore, is dismissed. The parties areleft to bear their own costs.

D.G. Appeal dismissed.

1060[2010] 12 S.C.R. 1059

DILAWAR SINGH & ORS. ETC.v.

UNION OF INDIA & ORS.(Civil Appeal Nos. 9198-9202 OF 2010)

OCTOBER 26, 2010

Requisitioning and Acquisition of Immovable PropertyAct, 1952:

Solatium and interest – Acquisition of land under the Act– Delay of 16 years in appointment of arbitrator – Held: Awardof solatium and interest is justified as there was an inordinatedelay in the appointment of an arbitrator and consequentdelay in determination of compensation payable to the landowners.

Compensation – Enhancement of – Acquisition of largeextent of land situate in the outskirts of Pathankot for defencepurposes under the Act – The enhancement of compensationwas considered by High Court in a similar case for acquisitionof land arising out of the very same acquisition process – Inthat case, High Court enhanced the compensation payableto the land-owners to Rs.350/- per marla – The said order wasnot challenged and attained finality – The lands in questionwere all acquired for the very same purpose and were situatedon the outskirts of a growing town like Pathankot – The growingnon-agriculture potential of such lands was also not disputed– Therefore, there was no reason why the amount ofcompensation payable to the landowners in the instant caseshould also not be enhanced to Rs.350/- per marla withproportionate benefits towards solatium and interest.

A large extent of land situate in the outskirts ofPathankot in the State of Punjab and underlying different

survey numbers was acquired for defence purposesunder the provisions of Requisitioning and Acquisitionof Immovable Property Act, 1952. The parties failed toarrive at an agreement as to the amount of compensationpayable to the expropriated owners of the land inquestion. The land owners requested for the appointmentof an arbitrator for determining the amount payable tothem. The Government did not respond to the request.The land owners filed a writ petition seeking a mandamusto the Government to appoint an arbitrator. The HighCourt directed the Government to appoint an arbitrator.An arbitrator was appointed 16 years after the acquisitionof land. The arbitrator held that the owners were entitledto compensation that ranged between Rs.50 per marla forone batch of appeals to Rs.200 for the other batch ofappeals. Solatium @ 30% and interest @ 9% for the firstyear and 15% for the subsequent years till payment of theamount of compensation was also held payable to thelandowners. Both, the Union of India and the landowners, challenged the award made by the arbitratorbefore the High Court. The plea of the Union of India wasthat the arbitrator was not justified in awarding nor wasthere any provision for granting solatium and interestunder the Act. The land-owners prayed for enhancementof compensation payasble to them to Rs.500/- per marla.The High Court dismissed the appeals filed by the Unionof India. The cross-objections filed by the owners werealso dismissed by separate orders unsupported by anyreasons for denying the enhancement prayed for bythem. Relying upon the decision in Jagdish Prasad v. TheCompetent Authority, the High Court held that award ofcompensation @ Rs.150/- per marla was justified on auniform basis for all kinds of lands. It also held that theaward of solatium and interest was justified havingregard to the delay on the part of the government in

1061 1062DILAWAR SINGH & ORS. ETC. v. UNION OF INDIA &ORS.

appointing an arbitrator. The High Court, however, opinedthat instead of describing the amount as solatium andinterest, the same should be described as compensationfor the acquired lands. Aggrieved, the Union of India andthe land owners filed the instant appeals.

Allowing the appeals, the Court

HELD: 1. In Inder Singh’s case, the High Court upheldthe grant of solatium and interest in regard to a similaracquisition made in terms of a notification issued inJanuary 1970. While doing so, the High Court relied uponits decision in Shanker Singh’s case. The decision in InderSingh’s case and Shanker Singh’s case was not challengedby filing any appeal. In that view of the matter and havingregard to the fact that there was an inordinate delay of16 years in the appointment of an arbitrator in the instantcases, the land owners are entitled to the benefit ofsolatium and interest especially when the owners whohave lost their land in similar circumstances and for thesame purpose have been given such a benefit. [Para 8][1070-C-F]

2. As regards the question whether the land ownersare entitled to claim any enhancement in the amount ofcompensation, the similar question arising out of the verysame acquisition process was dealt by the High Court in*Inder Singh’s case. Relying upon its decision in ** ShankerSingh’s case, the High Court in * Inder Singh’s caseenhanced the compensation payable to the land-ownersto Rs.350/- per marla. The said order attained finality. Therefusal of a similar relief in the remaining cases was not,therefore, considered just and equitable when there wereno distinguishing features to justify such a refusal. TheHigh Court also found that the decision in ** ShankerSingh’s case was squarely applicable in the case beforeit on account of the proximity of the acquisitions in pointof time. The notification in ** Shanker Singh’s case was

issued on 6th March, 1970 whereas that in * Inder Singh’scase it was issued on 9th January, 1970. The amount ofcompensation determined in ** Shanker Singh’s case was,therefore, found by the High Court to be relevant foraward of compensation in * Inder Singh’s case also. Thelands in question were all acquired for the very samepurpose and are situated on the outskirts of a growingtown like Pathankot. The growing non-agriculturepotential of such lands is also not in serious dispute. TheHigh Court failed to notice all these aspects apparentlybecause the decisions in ** Shanker Singh’s case and thatdelivered in * Inder Singh’s case were subsequent to theimpugned order. On the material available, there was noreason why the amount of compensation payable to thelandowners in the appeals should also not be enhancedto Rs.350/- per marla with proportionate benefits towardssolatium and interest as awarded by the arbitrator andupheld by the High Court in the two cases and in similarother cases. In CA 9201/2010, the appeal was filed by theUnion of India against grant of solatium and interest. Noappeal was filed by the owners in the case forenhancement of the amount of compensation. Evenotherwise, in the absence of any cogent evidence tojustify any such enhancement, there was no room fordirecting payment of a large amount of compensation.The award made by the arbitrator is modified to theextent that instead of Rs.200/- per marla, the owners shallbe entitled to Rs. 350/- per marla towards compensationwith proportionate benefits like solatium and interest onthe said amount. The appellants-owners shall also beentitled to proportionate costs in this court and the Courtsbelow. The award passed by the arbitrator is modified tothe extent that instead of Rs.200 per marla, the ownersshall be entitled to Rs.350/- per marla towardscompensation with proportionate benefits like solatiumand interest on the said amount. [Paras 9-11] [1070-G-H;1071-C-F-G-H; 1072-A-F]

1063 1064DILAWAR SINGH & ORS. ETC. v. UNION OF INDIA &ORS.

Union of India v. Parmal Singh and Others 2009 (1) SCC618 – relied on.

*Union of India v. Inder Singh and Anr. in LPA no.1918of 1989 ; **Shankar Singh and Others v. Union of India 1988(1) PLR 163 – approved.

Union of India v. Hari Krishan Khosla (Dead) by LRs.1993 Supp. (2) SCC 149; Union of India v. Chajju Ram 2003(5) SCC 568; Prabhu Dayal and Others v. Union of India1995 (4) SCC 221; Satinder Singh v. Umrao Singh AIR 1961SC 908; Union of India v. Chajju Ram 2003 (5) SCC 568;Swift and Co. v. Board of Trade 1925 AC 520(HL); InglewoodPulp and Paper Co. v. New Brunswick Electric PowerCommission 1928 AC 492 – referred to.

Case Law Reference:

1993 Supp. (2) SCC 149 referred to Para 3

2003 (5) SCC 568 referred to Para 3

1995 (4) SCC 221 referred to Para 6

2009 (1) SCC 618 relied on Para 7

1925 AC 520(HL) referred to Para 7

1928 AC 492 referred to Para 7

1988 (1) PLR 163 approved Paras 8, 9

CIVIL APPELLATE JURISDICTION : Civil Appeal No.9198-9202 of 2010.

From the Judgment & Order dated 23.08.2006 of the HighCourt of Punjab & Haryana at Chandigarh in X-Objection No.59 CII of 1988 in FAO No. 59 of 1988, X-Objection No. 58 CIIof 1988 in FAO No. 67 of 1988, X-Objection No. 61 CII of 1988

in FAO No. 57 of 1988 & X-Objection No. 60 CII of 1988 inFAO No. 58 of 1988 & X-Objection No. 62 CII of 1988 in FAONo. 56 of 1988.

C.A. Nos. 9203, 9204, 9205-9209, 9210-9215, 9216-9217,9218-9219 of 2010.

S.M. Sarin P.N. Puri, Dr. Lakhshmi Shastri, Anand Verma,Kinchik Singh, Vimla Sinhi, Harish Kr. Khinchi, B. KrishnaPrasad, D.S. Mahra, Sanjay Sarin, Manjusha Wadhwa for theappearing parties.

T.S. THAKUR, J. 1. Two questions fall for determinationin these appeals that arise out of orders passed by the HighCourt of Punjab & Haryana at Chandigarh. These are -

1) Whether award of solatium and interest ispermissible even in cases where acquisitionof land is made under Requisitioning andAcquisition of Immovable Property Act 1952;and

2) Whether the land owners were entitled toenhancement of compensation beyondRs.200/- per marla determined by thelearned Single Judge.

The questions arise in the following backdrop.

2. A large extent of land situate in the outskirts of Pathankotin the State of Punjab and underlying different survey numberswas acquired for defence purposes under the provisions ofRequisitioning and Acquisition of Immovable Property Act,1952. Failure of the parties to arrive at an agreement as to theamount of compensation payable to the expropriated owners

1065 1066DILAWAR SINGH & ORS. ETC. v. UNION OF INDIA &ORS. [T.S. THAKUR, J.]

of the land in question led the owners to seek appointment ofan Arbitrator for determination of the amount payable to them.The Government did not respond to the said request for a longtime which forced the land-owners to approach the High Courtof Punjab and Haryana in a writ petition seeking a mandamusdirecting the Government to appoint an Arbitrator. It is only afterthe said petition was allowed and a mandamus issued that theGovernment appointed the District Judge, Gurdaspur as anArbitrator, sixteen years after the lands had been acquired. TheArbitrator recorded evidence and after hearing the parties cameto the conclusion that the owners were entitled to compensationthat ranged between Rs.50/- per marla (Rs. 1000/- per kanal)for land relevant to Civil Appeal No.9216-9217/2010 to Rs.200/- per marla for lands relevant to Civil No. 9198-9202/2010.Solatium @ 30% and interest @ 9% for the first year and 15%for the subsequent years till payment of the amount ofcompensation to them was also held payable to thelandowners. Aggrieved by the said award the Union of Indiaappealed to the High Court, inter alia, contending that theArbitrator was not justified in awarding nor was there anyprovision for granting solatium and interest under the Actaforementioned. The land-owners also challenged the awardmade by the Arbitrator by filing cross-objections before theHigh Court in which they prayed for enhancement ofcompensation payable to them to Rs.500/- per marla. By acommon judgment impugned in these appeals the High Courthas dismissed the appeals filed by the Union of India. Thecross-objections filed by the owners were also dismissed byseparate orders unsupported by any reasons for denying theenhancement prayed for by them. Relying upon the decision inJagdish Prasad v. The Competent Authority, the High Courtheld that award of compensation @ Rs.150/- per marla by theArbitrator was justified on a uniform basis for all kinds of lands.The High Court overlooked the fact that in some cases thecompensation awarded was Rs.50/- per marla while in someothers the same was awarded @ Rs.200/- per marla. The HighCourt also noticed that compensation at the same rate had been

granted to owners of land in village Nalunga which award hadbeen affirmed by the High Court in LPA 721 of 1987 filed bythe Union of India and decided on 3rd September, 1987.

3. The High Court also came to the conclusion that awardof solatium and interest was justified having regard to the delayon the part of Government in appointing an Arbitrator. Reliancewas placed by the High Court on the decision of this Court inUnion of India v. Hari Krishan Khosla (Dead) by LRs. 1993Supp. (2) SCC 149. The High Court, however, modified theorder to the extent that instead of describing the amount assolatium and interest the same was described ascompensation for the lands acquired by the Government. Boththe parties have come up in appeal against the above order.While the appeals filed by the Union of India call in questionthe correctness of the view taken by the High Court in regardto solatium and interest, the cross appeals filed by the ownersassail the correctness of the orders passed by the High Courtwhereby cross-objections seeking enhancement of the amountof compensation to Rs.500/- per marla have been rejected bynon-speaking orders.

4. It is common ground that the provisions of theRequisitioning and Acquisition of Immovable Property Act,1952 do not make any provision for the grant of solatium orinterest to the expropriated landowners. The absence of anysuch provision in the said Act was in fact made a basis for achallenge to the constitutional validity of the enactment whichwas repelled by this Court in Union of India v. Hari KrishanKhosla 1993 (Supp) 2 SCC 149. This Court pointed out thatany comparison between acquisition made under theRequisitioning and Acquisition of Immovable Property Act,1952 with that made under the Land Acquisition Act would beodious in view of the dissimilarities between the twoenactments. That decision was followed in subsequentpronouncements of this Court in Union of India v. Chajju Ram2003 (5) SCC 568 where a similar attack was mounted against

the constitutional validity of Defence of India Act, 1971 butrepelled by this Court relying upon the decision in Hari KrishanKhosla. What is noteworthy is that in both these matters thisCourt had made a distinction between cases in which therewas inordinate delay in the appointment of an Arbitrator andconsequent delay in the determination of the amount ofcompensation payable to the owners and other case wherethere was no such delay. In paragraph 79 of the judgment ofthis Court in Hari Krishan Khosla, this Court observed:

“This is a case in which for 16 years no arbitrator wasappointed. We think it is just and proper to apply theprinciple laid down in Harbans Singh Shanni Devi v.Union of India (Civil Appeal Nos. 470 and 471 of 1985,disposed of by this Court on February 11, 1985). The Courtheld as under:

“Having regard to the peculiar facts andcircumstances of the present case and particularly in viewof the fact that the appointment of the arbitrator was notmade by the Union of India for a period of 16 years, wethink this is a fit case in which solatium at the rate of 30per cent of the amount of compensation and interest at therate of 9 per cent per annum should be awarded to theappellants. We are making this order having regard to thefact that the law has in the meanwhile been amended witha view to providing solatium at the rate of 30 per cent andinterest at the rate of 9 per cent per annum.”

5. Even in Union of India v. Chajju Ram (supra), this Courtnoted the delay in the appointment of an Arbitrator and directedthat the amount of interest and solatium paid to the land ownersdecades back shall not be recovered from the land owners.This Court observed:

“In these cases also, it is said that the arbitrators have notyet been appointed despite the demand made in thisbehalf by the respondents. The amount of solatium at the

rate of 15% per annum and the interest thereupon hadbeen paid in the early eighties when the Punjab andHaryana High Court declared the said Act ultra viresArticle 14 of the Constitution of India.

In the peculiar fact situation obtaining in these cases andinasmuch as the amounts sought to be recovered are smallwhich were paid to the respondents decades back, we areof the opinion that interest of justice shall be met if theappellants are directed not to recover the amount ofcompensation from the respondents pursuant to or infurtherance of this judgment. However, we hasten to addthat this direction shall not be treated as a precedent.”

6. The above decisions were then followed by this Courtin Prabhu Dayal and Others v. Union of India 1995 (4) SCC221. That was also a case where the appointment of Arbitratorwas delayed by 22 years. This Court relying upon the decisionin Hari Krishan Khosla and Harbans Singh v. Union of India,C.A. Nos. 470 & 471 of 1985 disposed of on 11th February1985, observed:

“It is next contended that the appellants are entitled to thesolatium though in law they are not entitled but in equitythey are entitled to the solatium for the reason that for 22years arbitrator was not appointed to determine themarket value. In support they relied upon the judgment ofthis Court in Union of India v. Hari Krishan Khosla. Thereinthis Court relied upon another judgment in Harbans Singhv. Union of India. In that judgment this Court said thathaving regard to the peculiar facts and circumstances ofthe present case and in view of the fact that theappointment of the arbitrator was not made by the Unionof India for period of 16 years, this Court considered inequity to give solatium at the rate of 30 per cent of theamount of compensation and interest at the rate of 9 percent per annum should be awarded to the appellantstherein. In this case, the question of appointing the

arbitrator would arise only when the market value offeredwas rejected by the claimants. The offer was made andrejected on 13-10-1961 and the arbitrator came to appointon 22-9-1966 after five years. Under these circumstances,the claimants are entitled to solatium at the rate of 15 percent on the market value. The appellants did not challengethe rate of interest granted at 6 per cent. Accordingly theyare also entitled to the interest at the rate of 6 per cent perannum. The appeals are accordingly allowed. Theappellants are entitled to the relief as stated above. Nocosts.”

7. We may at this stage to refer to a recent decision ofthis Court in Union of India v. Parmal Singh and Others 2009(1) SCC 618 where the question whether solatium and interestcould be awarded to the expropriated land owners under theRequisitioning and Acquisition of Immovable Property Act,1952 was once again examined. Relying upon the decision ofthis Court in Satinder Singh v. Umrao Singh AIR 1961 SC 908,Union of India v. Hari Krishan Khosla (supra) and Union ofIndia v. Chajju Ram 2003 (5) SCC 568 and the Englishdecision in Swift and Co. v. Board of Trade 1925 AC 520(HL)and Inglewood Pulp and Paper Co. v. New Brunswick ElectricPower Commission 1928 AC 492, this Court upheld the awardof interest in favour of the landowners. This Court said:

“When a property is acquired, and law provides forpayment of compensation to be determined in the mannerspecified, ordinarily compensation shall have to be paidat the time of taking possession in pursuance ofacquisition. By applying equitable principles, the courtshave always awarded interest on the delayed payment ofcompensation in regard to acquisition of any property.When a requisitioned property is acquired, as possessionhad already been taken from the landholder, thecompensation becomes payable from the date ofacquisition. When a property is requisitioned, the

landowner is compensated for the denial of possession bypaying compensation based on the rent it would havefetched had it not been requisitioned. But once the propertyis acquired, the rent is stopped, as compensation basedon open market value becomes payable againstacquisition. Therefore, while interest is payable, it is notawarded from the date of requisition (taking over ofpossession) but only from the date of acquisition. Thisprinciple has been recognised and applied by the courtsconsistently.”

8. It is noteworthy that the High Court of Punjab andHaryana has in Union of India v. Inder Singh and Anr. in LPANo. 1918 of 1989 and connected matters upheld grant ofsolatium and interest in regard to a similar acquisition madein terms of a notification issued in January 1970. While doingso the High Court placed reliance upon its decision in ShankarSingh and Others v. Union of India 1988 (1) PLR 163 Mr.Subramanium, learned Solicitor General fairly conceded thatno appeal has been preferred by the Union of India against thedecision in Shankar Singh’s case (supra) or that delivered inUnion of India v. Inder Singh and Anr (supra). In that view ofthe matter therefore and having regard to the fact that there wasan inordinate delay of 16 years in the appointment of anArbitrator in the present cases, we have no hesitation in holdingthat the principle laid down by this Court in the decisionsreferred to above would entitle the land owners to the benefitof solatium and interest especially when the owners who havelost land in similar circumstances and for the same purposehave been given such a benefit.

9. That brings us to the question whether the land-ownersare entitled to claim any enhancement in the amount ofcompensation determined in these cases. In Union of India etc.v. Inder Singh and Anr. (LPA No.1918 of 1989) and connectedmatters to which we have referred earlier the High Court hasupheld the enhancement of compensation to Rs.350/- per

marla. The High Court was in that case dealing with a similarquestion arising out of the very same acquisition process.Relying upon its decision in Shanker Singh and Ors. v. Unionof India 1988 (1) PLR 163, a Single Bench of the High Courtin Inder Singh’s case (supra) enhanced the compensationpayable to the land-owners to Rs.350/- per marla. Five appealswere preferred before the Division Bench against the saidorder out of which two appeals were dismissed by separateorders of the Court while the third was dismissed for non-prosecution. The result was that out of five appeals challengingthe order passed by the Single Judge awards in favour of theland-owners in the case of three dismissed appeals attainedfinality entitling the land-owners respondents in those appealsto compensation @ Rs.350/- per marla. The refusal of a similarrelief in the remaining cases was not, therefore, considered justand equitable when there were no distinguishing features tojustify such a refusal. The High Court also found that thedecision in Shanker Singh’ case (supra) was squarelyapplicable in the case before it on account of the proximity ofthe acquisitions in point of time. The notification in ShankerSingh’ case (supra) was issued on 6th March, 1970 whereasthat in Inder Singh’ case (supra) was issued on 9th January,1970. The amount of compensation determined in ShankerSingh’s case (supra) was therefore found by the High Court tobe relevant for award of compensation in Inder Singh’s case(supra) also.

10. In the present batch of cases except the case thenotification for acquisition was issued in February 1970 whichis proximate in point of time to those issued in the ShankerSingh and Inder Singh’s cases (supra). The notification inUnion of India v. Mohinder Singh (Civil Appeal No. 9204/2010) was issued on 12.5.1964 and published on 12.6.1964.That apart the lands in question were all acquired for the verysame purpose and are situated on the outskirts of a growingtown like Pathankot. The growing non-agriculture potential ofsuch lands is also not in serious dispute. The High Court has

failed to notice all these aspects apparently because thedecisions in Shanker Singh’s case and that delivered in InderSingh’s case (supra) were handed down subsequent to theimpugned order. Suffice it to say that on the material availablebefore us we see no reason why the amount of compensationpayable to the landowners appellants in these appeals shouldalso not be enhanced to Rs.350/- per marla with proportionatebenefits towards solatium and interest as awarded by theArbitrator and upheld by the High Court in those cases and insimilar other cases to which we have referred in the earlier partof this order. In so far as Mohinder Singh’s case (supra) isconcerned, the appeal has been filed by the Union of Indiaagainst grant of solatium and interest. No appeal has been filedby the owners in that case for enhancement of the amount ofcompensation. Even otherwise in the absence of any cogentevidence to justify any such enhancement, there is no room fordirecting payment of a large amount of compensation.

11. In the result, we allow Civil Appeals Nos.9198-9202/2010 and Civil Appeals Nos.9218-9219/2010 filed by theowners and modify the award made by the Arbitrator to theextent that instead of Rs.200/- per marla, the owners shall beentitled to 350/- per marla towards compensation withproportionate benefits like solatium and interest on the saidamount. The appellants-owners shall also be entitled toproportionate costs in this Court and the Courts below.

Civil Appeals Nos.9203/2010, 9204/2010, 9205-9209/2010, 9210-9215/2010 and 9216-9217/2010 filed by Union ofIndia, however, fail and are dismissed leaving the parties tobear their own costs in these appeals.

D.G. Appeals allowed.

[2010] 12 S.C.R. 1073 1074

M/S. ANGEL BABY PRODUCTS PVT. LTD.v.

NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY& ORS.

(Special Leave Petition (Civil) No. 10940 of 2008)

OCTOBER 27, 2010

[ALTAMAS KABIR AND A.K. PATNAIK, JJ.]

Lease deed – Execution of – Failure of allottee toexecute lease deed for commercial plot within the stipulatedperiod on account of mis-description of the plot and changein the name of allottee – Imposition of penalty –Representation for waiver – Extension of time to executelease deed – Failure to execute lease deed within theextended time – Imposition of penalty and interest – Writpetition – Dismissed by High Court – On appeal, held: Noinclination on the part of allottee or petitioner company tocomplete formalities for execution of lease deed pursuant tothe change in the name of allottee – Thus, on account ofsubsequent conduct of petitioner company and allottee, orderof High Court and decision of NOIDA relating to impositionof penalty and interest not interfered with – Direction issuedto calculate penalty and interest as payable.

‘HL’ was allotted a commercial plot. He failed toexecute lease deed for the commercial plot within thestipulated period of 120 days on account of the mis-description of the plot, existence of the municipal drainon the portion of the plot, and in view of the change inthe name of the allottee. The respondent-New OkhlaIndustrial Development Authority imposed penalty forfailure to get the lease deed executed. On representationby ‘HL’ and another, for waiver of penalty, the ChiefExecutive Officer, NOIDA waived the penalty and grantedthem further two months’ time to complete the execution

of the lease deed. Before the expiry of two months, theNOIDA authorities wrote a letter to the writ petitioners thatpenalty would be charged with effect from 22ndNovember, 2001. Again a representation for waiver ofpenalty was made and the Board of NOIDA rejected thesame, calling upon the writ petitions to pay the penalty.The writ petitioners-‘HL’ and another, filed a writ petitionfor quashing the notices issued by the respondent. TheHigh Court dismissed the writ petition and vacated theinterim order. Therefore, the petitioner filed the instantSpecial Leave Petition.

Dismissing the Special Leave Petition, the Court

HELD: 1.1 The submissions questioning the orderpassed by the Officer on Special Duty dated 11.04.02, andthe various notices subsequently issued on the basisthereof, demanding payment of penalty despite the orderof the Chief Executive Officer waiving imposition of suchpenalty for the delay in execution of the lease deed,cannot be accepted. [Para 12] [1081-F]

1.2 The materials on record indicate that there hadbeen correspondence exchanged between the partieswith regard to the land allotted and the area thereof onaccount of the existence of the municipal drain either onthe plot or in its vicinity. ‘HL’ also made a request for theplot allotted in his name to be transferred in the name ofthe petitioner company in which he and his son wereDirectors. Since the same was likely to take some timefor completion of the formalities, a specific prayer wasmade to waive the penalty due to delay in the executionof the lease deed. The CEO, NOIDA, extended the periodfor completion of the formalities relating to theconstitutional change by a period of two months withoutpenalty from 24.03.02. Before the said period couldexpire, the Officer on Special Duty, on amisunderstanding of the order passed by the CEO,1073

ANGEL BABY PRODUCTS PVT. LTD. v. NEWOKHLA INDUST. DEV. AUTH.

1075 1076

NOIDA, indicated by his order dated 11.04.02, that sincethe Chief Executive Officer had given two months’ timewithout penalty only for change of constitution, intereston the outstanding instalments, penal interest andpenalty, were liable to be recovered from the writpetitioners. The Officer on Special Duty (G) passed anorder on 26.04.02, directing that steps be taken in termsof his earlier order dated 11.04.02, and indicating that twomonths’ time given to the writ petitioners was forcompletion of formalities for change of the name of theallottee. Up to the said stage, the case of the petitionercompany for waiver of penalty can be accepted [Para 13][1081-G-H; 1082-A-D]

1.3 The subsequent correspondence which followedbetween the parties and the failure of the petitionercompany and ‘HL’ to complete the execution of the leasedeed even within the extended time of two months,indicate that neither ‘HL’ nor the petitioner company hadany inclination to complete the formalities for executionof the lease deed pursuant to the change in the name ofthe allottee from ‘HL’ to the petitioner company. [Para 14][1082-E-F]

1.4 From the letter dated 1.05.02, written by theDeputy Manager (C), NOIDA, it is apparent that thepetitioner company and ‘HL’ were given a great degreeof latitude to complete the transaction. In fact, meetingsof the Committee had been convened on 23.10.02 and26.11.02, in which ‘HL’ appeared and made submissionsfor waiver of the penalty but on the basis of the record,the Committee rejected the submissions of ‘HL’ and hewas subsequently informed of the decision of theCommittee which was approved at a meeting of theAuthority convened on 15.02.03, under the Chairmanshipof the Additional Chief Executive Officer, NOIDA. Even ifinitially a case might have been made out on behalf of the

KAPADIA, J.]

petitioner company that the execution of the lease deedcould not be completed on account of the mis-description of the plot and in view of the prayer forchange in the name of the allottee, on account of thesubsequent conduct of the petitioner company and ‘HL’,the order of the High Court or the decision of the NOIDArelating to imposition of penalty and interest is notinterfered with. However, the interpretation given by theOfficer on Special Duty to the order passed by the CEOon 24.03.02 is also not accepted and, it is directed that incalculating the penalty and interest as payable under theagreement entered into between the parties, the saidperiod of two months from the date of the order dated24.03.02, would be excluded. [Para 15] [1082-G-H; 1083-A-E]

CIVIL APPELLATE JURISDICTION : SLP (Civil) No.10940 of 2008.

From the Judgment & Order dated 9.4.2008 of the HighCourt of Judicature at Allahabad in Civil Misc. Writ Petition No.16819 of 2003.

Manish K. Bishnoi for the Petitioner.

Jayant Bhushan, Manish Bishnoi, Amit Bhandari, SanjeevPanigrahi, Ravindra Kumar for the Respondents.

ALTAMAS KABIR, J. 1. In this Special Leave Petition, thePetitioner has challenged the decision of the Allahabad HighCourt dismissing Writ Petition No.16819 of 2003, filed by oneHira Lal Gupta and another praying for quashing of the noticesdated 1.5.2002, 25.7.2002, 6.9.2002 and 22.3.2003 sent bythe authorities of The New Okhla Industrial DevelopmentAuthority, hereinafter referred to as ‘NOIDA’, imposing penaltyagainst the writ petitioners for failing to get the lease deed forcommercial plot no.1/1-A, Sector 27, NOIDA, executed within

1077 1078ANGEL BABY PRODUCTS PVT. LTD. v. NEW OKHLAINDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

the stipulated period of 120 days from the date of allotment ofthe plot. The said plot measuring 2970 sq. meters was initiallyallotted to the Writ Petitioner No.1, Hira Lal Gupta, at the rateof Rs.15,552/- per sq. meter. Later on, a revised allotment orderwas issued to Shri Gupta reducing the area of the plot from2970 sq. meters to 2590 sq. meters and the consideration forallotment of the plot was proportionately reduced. Subsequently,disputes arose in regard to an irrigation drain which existed ona portion of the said plot, although, the existence thereof wasnot indicated in the brochure published by NOIDA. Accordingto the Writ Petitioners, since the said problem was not attendedto, the lease deed could not be submitted for execution withinthe prescribed period of 120 days which attracted impositionof penalty.

2. On 24th March, 2002, the Petitioners made arepresentation to the Chief Executive Officer, NOIDA, for waiverof penalty on the ground that since the exact area and locationof the plot was different from that specified in the brochure, thedelay in execution of the lease deed could not be attributed tothe Writ Petitioners and, accordingly, penalty could not beimposed against them. It appears that the Chief ExecutiveOfficer, NOIDA, waived the penalty imposed on the WritPetitioners and granted them further two months’ time tocomplete the execution of the lease deed. However, before theexpiry of the said period of two months, the NOIDA authoritieshad written to the Writ Petitioners on 1st May, 2002, indicatingthat penalty would be charged with effect from 22nd November,2001. The Writ Petitioners responded to the said letter bysubmitting a representation dated 15th May, 2002, praying forwaiving the penalty on account of the drain passing through plotand also for providing any alternative plot in lieu of the plotalready allotted.

3. The Writ Petitioners were informed on 22nd March,2003, that the Board of NOIDA had rejected their proposal forwaiver of the penalty and that the same would have to be paid

within 30 days, otherwise their allotment would be cancelled.At the initial stage when the Writ Petition was filed, the HighCourt had passed an interim order on 18th April, 2003, stayingthe operation of imposition of penalty against the WritPetitioners. Ultimately, after considering the submissions madeon behalf of the respective parties, the High Court took note ofClause 25 of the Scheme indicating that the plots were to besold on “as is where is” basis, leading to the presumption thatthe Writ Petitioners had knowledge of the existing irrigationdrain on the plot. The High Court also took note of the powerreserved to the NOIDA authorities to vary the area of the plot,which the allottee was bound to accept as final. The High Courtalso took into consideration the submissions made on behalfof the Board of NOIDA that in its 113th meeting held on 10thFebruary, 2003, the Petitioners’ representation was finallyrejected but despite the same they did not deposit the penaltyand insisted upon the waiver of penalty and interest.

4. Having arrived at the conclusion that the Writ Petitionershad knowledge of all the terms and conditions, status, locationand other details about the plot, which was advertised forallotment, the High Court felt that there was no merit in the WritPetition and dismissed the same. The interim order passed inthe matter was also vacated.

5. Mr. Jayant Bhushan, learned Senior Advocate, whoappeared for the Petitioner Company, submitted that havingauctioned the plot in question without proper specifications andcontrary to the description in its brochure, it was not within thecompetence of the NOIDA authorities to impose penalty on thePetitioner Company for not completing the execution of thelease deed within the stipulated period of 120 days from thedate of allotment. In fact, in the aforesaid background, arepresentation was made by Shri Hira Lal Gupta to the ChiefExecutive Officer, NOIDA, indicating that he wanted to transferthe plot in question to the Petitioner Company, wherein he andhis son are Directors. Since the said formalities were likely to

take some time, a prayer was made to the aforesaid Authorityto extend the time for depositing the instalments and for makingthe application in Form 37-I. In the same communication, afurther prayer was made to waive the penalty due to the delayin execution of the lease deed. It is on that basis that Shri HiraLal Gupta was granted two months’ time, without penalty, forcompletion of formalities.

6. The said extension came to be considered by theOfficer on Special Duty (G), who interpreted the same to meanthat the Petitioner Company had been given two months’ timewithout penalty only for change of constitution, but that theinterest on the outstanding instalments, penal interest andpenalty, whatever was outstanding, would have to be recovered,as it was. On 1st May, 2002, the Deputy Manager (C), NOIDA,wrote to Shri Hira Lal Gupta in regard to his request for effectingthe change relating to the transfer of the plot to the PetitionerCompany. In his said letter, the said Authority requested ShriGupta to submit the documents indicated in the said letter inorder to effect the change of constitution in regard to the allotteeof the plot in question. In addition, Shri Gupta was informed thaton his failure to complete execution of the lease deed, a sumof Rs.62,18,088.00 had become payable by way of late fee forthe period between 22nd November, 2001 to 30th April, 2002.Furthermore, after the said period, penalty of Rs.38,863.05 perday would also be payable. The Petitioner was requested todeposit the penalty amount for completion of Form 37-I forchange of constitution and execution of the lease deed.

7. As indicated hereinabove, the imposition of penalty isthe bone of contention in this Special Leave Petition.

8. Mr. Bhushan reiterated the submissions made beforethe High Court that on 24th March, 2002, when two months’time had been granted to the Petitioner Company by the ChiefExecutive Officer, NOIDA, for completion of the formalities forchange of constitution, the Officer on Special Duty had acted

illegally by passing an order on 11th April, 2002, which waswithin three weeks from the date of the order of the ChiefExecutive Officer, demanding payment of penal interest andpenalty. Mr. Bhushan contended that during the extendedperiod of two months, the Officer on Special Duty was notentitled to demand payment of penalty when, in fact, paymentof such penalty had been specifically waived by the ChiefExecutive Officer.

9. On the other hand, learned counsel for the RespondentAuthority, supported the order of the Officer on Special Dutyon the ground that the period for execution of the lease hadbeen extended by a period of two months by the ChiefExecutive Officer in view of the prayer made by Shri Hira LalGupta to transfer the allotment in the name of the PetitionerCompany, wherein both he and his son were Directors.Learned counsel reiterated the submissions made before theHigh Court that the order of the Chief Executive Officer, NOIDA,extending the time for completion of the execution of the leasedeed would have to be considered in that context only. He urgedthat notwithstanding the time extended for completion ofconstitutional changes, the liability for payment of penalty didnot stop on account of the order of the Chief Executive Officerwhich continued to remain operative after the expiry of 120 daysfrom the date of allotment and the Petitioner Company was,therefore, liable to pay both the penalty charges as also thelease rent at the rate of Rs.38,863.05 per day. Mr. RavindraKumar specifically referred to the subsequent order of the ChiefExecutive Officer dated 22nd July, 2002, by which he directedthat the land (2590.86 sq. meters) shown in the brochure begiven to Shri Hira Lal Gupta and penalty be recovered as perrules. He urged that the effect of the earlier order passed bythe Chief Executive Officer on 24th March, 2002, stoodsuperseded by the subsequent order, whereby penalty wasdirected to be recovered from the Writ Petitioners, accordingto the rules.

10. It was also reiterated that since the PetitionerCompany had decided to invest a huge sum of money in theallotted land, it is difficult to accept that the Petitioner Companyor its Directors would not have made enquiries as to the natureof the land which was being allotted to them. In other words, ithas to be held that the Writ Petitioners were fully aware of theexistence of the municipal drain on the land and absence ofknowledge thereof was nothing but a ploy on the part of thePetitioner Company to avoid its responsibility regardingpayment of penalty for non-compliance of the conditions tocomplete execution of the lease deed within 120 days from thedate of allotment of the plot. Learned counsel submitted thatthe position stood further compounded by the fact that underClause 25 of the general terms and conditions spelt out in thebrochure, it was clearly indicated that the allotment of the landwas subject to variations in the area of the plot and that thesame would have to be accepted by the allottees on “as iswhere is” basis.

11. Mr. Ravindra Kumar submitted that no case had at allbeen made out for interference with the orders passed by theHigh Court dismissing the Writ Petition.

12. For the reasons hereinafter following, we are unableto accept Mr. Jayant Bhushan’s submissions questioning theorder passed by the Officer on Special Duty dated 11th April,2002, and the various notices subsequently issued on the basisthereof, demanding payment of penalty despite the order of theChief Executive Officer waiving imposition of such penalty forthe delay in execution of the lease deed.

13. The materials on record indicate that there had beencorrespondence exchanged between the parties with regard tothe land allotted and the area thereof on account of theexistence of the municipal drain either on the plot or in itsvicinity. Shri Hira Lal Gupta had also made a request for theplot allotted in his name to be transferred in the name of thePetitioner Company in which he and his son were Directors.

Since the same was likely to take some time for completion ofthe formalities, a specific prayer was made to serve the penaltydue to delay in the execution of the lease deed. In suchbackground, the Chief Executive Officer, NOIDA, extended theperiod for completion of the formalities relating to theconstitutional change by a period of two months without penaltyfrom 24th March, 2002. Before the said period could expire,the Officer on Special Duty, on a misunderstanding of the orderpassed by the Chief Executive Officer, NOIDA, indicated by hisorder dated 11th April, 2002, that since the Chief ExecutiveOfficer had given two months’ time without penalty only forchange of constitution, interest on the outstanding instalments,penal interest and penalty, were liable to be recovered from theWrit Petitioners. To add to the confusion, a further order waspassed by the Officer on Special Duty (G) on 26th April, 2002,directing that steps be taken in terms of his earlier order dated11th April, 2002, and indicating that two months’ time given tothe Writ Petitioners was for completion of formalities for changeof the name of the allottee.

14. Up to this stage, the case of the Petitioner Companyfor waiver of penalty can be accepted, but the subsequentcorrespondence which followed between the parties and thefailure of the Petitioner Company and Shri Hira Lal Gupta tocomplete the execution of the lease deed even within theextended time of two months, indicate that neither Shri Guptanor the Petitioner Company had any inclination to complete theformalities for execution of the lease deed pursuant to thechange in the name of the allottee from Shri Hira Lal Gupta tothe Petitioner Company.

15. From the materials on record and the subsequentcorrespondence beginning with the letter dated 1st May, 2002,written by the Deputy Manager (C), NOIDA, it is apparent thatthe Petitioner Company and Shri Hira Lal Gupta were given agreat degree of latitude to complete the transaction. In fact,meetings of the Committee had been convened on 23rd

ANGEL BABY PRODUCTS PVT. LTD. v. NEW OKHLAINDUST. DEV. AUTH. [ALTAMAS KABIR, J.]

October, 2002 and 26th November, 2002, in which Shri HiraLal Gupta appeared and made submissions for waiver of thepenalty but on the basis of the record, the Committee rejectedShri Gupta’s submissions and Shri Gupta was subsequentlyinformed of the decision of the Committee which was approvedat a meeting of the Authority convened on 15th February, 2003,under the Chairmanship of the Additional Chief ExecutiveOfficer, NOIDA. Even if initially a case may have been madeout on behalf of the Petitioner Company that the execution ofthe lease deed could not be completed on account of the mis-description of the plot and in view of the prayer for change inthe name of the allottee, on account of the subsequent conductof the Petitioner Company and Shri Gupta, we are not inclinedto interfere with the order of the High Court or the decision ofthe NOIDA relating to imposition of penalty and interest.However, we are also not inclined to accept the interpretationgiven by the Officer on Special Duty to the order passed by theChief Executive Officer on 24th March, 2002, and, accordingly,we direct that in calculating the penalty and interest as payableunder the agreement entered into between the parties, the saidperiod of two months from the date of the order dated 24thMarch, 2002, shall be excluded.

16. With the aforesaid modification of the order passedby the Chief Executive Officer on 22nd July, 2002 and thesubsequent resolution of the NOIDA taken at the meetingconvened on 15th February, 2003, the Special Leave Petitionstands dismissed.

17. There will, however, be no order as to costs.

N.J. SLP dismissed.

AMINA BEEVIv.

THACHI & ORS.(Special Leave Petition (Civil) No. 15221 of 2007 Etc.)

OCTOBER 27, 2010

[D.K. JAIN AND A.K. PATNAIK, JJ.]

KERALA LAND REFORMS ACT, 1963 :

s.51, proviso – Surrender by tenant of his interests in theleasehold land to landlord – HELD: Being in contraventionof s.51, was void.

ss. 13-A and 125 – Restoration of possession of tenantsdispossessed after 1.4.1964 – Jurisdiction of civil court –Held: Suit for recovery of possession by a tenant is neitherbarred expressly nor impliedly by s. 13-A – Further, s.125makes it clear that in any suit regarding rights of a tenant theissues of rights of tenant and whether a person is tenant willhave to be referred to the civil court.

‘MS’, the owner of the suit property (agriculturallands) leased out the same to ‘K’ in the year 1945-46. ‘MS’died on 24.7.1968. His legal heirs, namely, his wife, sonand daughter, executed sale deeds, Ext. A-1 and Ext. A-2 in respect of a part of the suit land. On 29.7.1968, ‘K’executed a leasehold assignment deed, Ext. A-3, infavour of the son of ‘MS’. The purchasers of the suitproperty under Ext. A-1 and A-2 obtained loans from StateBank of T ravancore and in turn mortgaged to the Bankthe properties under Exts. A-1 and A-2. After the death of‘K’, his legal heirs filed a civil suit in the year 1980 againstthe landlords, the purchasers and the Bank. The trial courtdecreed the suit declaring that the plaintiffs hadleasehold rights over the suit property and were entitled

[2010] 12 S.C.R. 10841083

1085 1086AMINA BEEVI v. THACHI & ORS.

after 1st April, 1964 and such person would have been atenant under the Act as amended by the Kerala LandReforms (Amendment) Act, 1969, at the time of suchdispossession, would be entitled subject to theprovisions of the Section to restoration of the possessionof the land. None of the sub-sections of s.13A expresslystate that a suit by a tenant for recovery of possessionof the land which was under his occupation was barred.Therefore, a suit for recovery of possession by a tenantis not “expressly” barred. It cannot also be held that sucha suit was “impliedly” barred by s.13A of the Act becauseof what is provided in s.125 of the Act. [para 7, 9 and 10][1092-C; 1095-C-D; 1095-F]

2.2 The provisions of s.125 make it amply clear thatin any suit regarding rights of a tenant, the rights of thetenant including a question whether a person is a tenantwill have to be referred by the Civil Court to the LandTribunal and af ter the Land T ribunal decides the question,the Civil Court will decide the suit in accordance with thedecision of the Land T ribunal. Considering these clearprovisions of s.125 of the Act, this Court is of theconsidered opinion that the suit of the plaintiffs-respondents for declaration that they were tenants inrespect of the suit property and for recovery ofpossession of the suit property from the defendants andfor mesne profit was not barred either expressly orimpliedly by s.13A of the Act. [para 10] [1096-C-E]

Koyappathodi Puthiyedath Ahammedkutty v. State ofKerala and Others 1987 (Supp) SCC 158 – heldinapplicable.

3.1 It cannot be said that the Land T ribunal, to whichthe claim of tenancy of the plaintiffs-respondents wasreferred, has not considered the claim properly. A perusalof the order dated 13.1 1.1984 of the Land T ribunal showsthat it has dealt with the oral evidence of several

to recover possession thereof. The appeals filed by theBank and the purchasers were dismissed and so alsotheir second appeals.

In the instant petitions for special leave to appeal, thequestions for consideration before the Court were: (1)whether the High Court was right in holding that Ext.A3,though styled as assignment of leasehold right, was infact a surrender of the leasehold right by the lessee infavour of landlord and, therefore, hit by s. 51 of the KeralaLand Reforms Act, 1963 which prohibited surrender ofinterest of a tenant except in favour of the Government;and (2) whether the suit filed by the tenants fordeclaration of their tenancy rights in respect of the suitland and for recovery of possession thereof wasexpressly or impliedly barred by s.13A of the Act.

Dismissing the SLPs, the Court

HELD: 1. In view of the proviso to s.51 of the KeralaLand Reforms Act, 1963, any surrender by the tenant ofhis interest to any person other than the Government isprohibited. Ext.A3, being a surrender by the tenant of hisinterest in favour of a person other than the Government,was in contravention of s.51 and was void. This Court is,therefore, not inclined to disturb the finding of the HighCourt that Ext.A3 though styled as a leaseholdassignment deed was in fact a surrender of the interestof the tenant and was prohibited by s.51 of the Act. [para6] [1091-G-H; 1092-A]

2.1 Section 9 of the Code of Civil Procedure, 1908provides that civil courts have jurisdiction to try all suitsof a civil nature excepting suits which are eitherexpressly or impliedly barred. A plain reading of sub-s.(1) of s.13A of the Act would show that a person who hasbeen dispossessed of his land in his occupation on or

1087 1088AMINA BEEVI v. THACHI & ORS.

witnesses and a large number of documents filed onbehalf of the parties and, in the light of the availableevidence, has come to the conclusion that the father ofthe plaintiffs-respondents and after him the plaintiffs-respondents had leasehold rights. The trial court hasaccepted this finding of the Land T ribunal. The finding ofthe Land T ribunal and the trial court on this point is afinding of fact based on oral and documentary evidenceand this Court is not inclined to disturb this finding in thisSpecial Leave Petition. [para 11] [1096-G-H; 1097-A-B]

3.2 Further, the issue whether the purchasers underExts. A-1 and A-2 were bona fide purchasers of the suitproperty, having not been raised before the trial court, ithas not recorded a finding in this regard. Therefore, it isnot necessary to decide, in the instant case, whether atenant could or could not recover the land which wasunder his occupation from a bona fide purchaser byvirtue of proviso (a) to sub-s. (1) of s.13A of the Act. [para12] [1097-C-D]

Case Law Reference:

1987 (Supp) SCC 158 held inapplicable para 3

CIVIL APPELLATE JURISDICTION : SLP (Civil) No.15221 of 2007.

From the Judgment & Order dated 28.03.2007 of the HighCourt of Kerala at Ernakulam in S.A. No. 517 of 1988.

SLP (Civil) No. 19320 of 2007.

Parag P. Tripathi, ASG, C.S. Rajan, K.N. Madhusoodanan,T.G. Narayanan Nair, A.V. rangam, Shadan Farasat, AmeyNargolkar, Buddy A. Rangadhan for the Petitioner.

C.S. Vaidyanathan, Haris Beeran, S. Sreekumar, SirajKaroly, Radha Shyam Jena for the Respondents.

A. K. PATNAIK, J. 1. These Special Leave Petitions havebeen filed against the common judgment and decree dated28.03.2007 passed by the Kerala High Court in SecondAppeal Nos. 517 of 1988 and 311 of 1988.

2. The facts very briefly are that Makkar Sahib was theowner of the suit property and in the year 1945-46 he madean oral lease of the suit property in favour of Kunjali on anannual rent. Pursuant to the oral lease, Kunjali obtainedpossession of the suit property and remained in possessionof the suit property. Makkar Sahib died and on 24.07.1968, thelegal heirs of late Makkar Sahib, namely, his wife Mariyumma,his daughter Kochu Pathu and his son Abdul Kadar executeda sale deed (Ext. A1) in respect of three acres of land out ofthe suit property in favour of Aisu and another sale deed (Ext.A2) in respect of two acres and one acre out of the suit propertyin favour of Fathima Beevi and Amina Beevi. On 29.07.1968,Kunjali executed a leasehold assignment deed (Ext. A3) infavour of Abdul Kadar. On 29.07.1968 Mariyumma, KochuPathu and Abdul Kadar executed a sale deed (Ext. A4) infavour of Kunjali in respect of 75 cents of land. The purchasersof the suit property under Exhibits A1 and A2, namely, Aisu,Fathima Beevi and Amina Beevi obtained loans from the StateBank of Travancore and mortgaged the properties purchasedby them under Exhibits A1 and A2 in favour of the Bank assecurity for the loan. When the loan was not repaid, the StateBank of Travancore filed a mortgage suit, O.S. No.131 of 1974,and obtained a decree for sale of the mortgaged property. Inthe year 1974, Mariyumma, Kochu Pathu and Abdul Kadar alsosold some portions of the suit property to V.K. Kesavan andJanaky. Kunjali died leaving behind his wife Thachi, sons C.A.Sulaiman and M.A. Karim and daughters Aisha, Pathu and

1089 1090AMINA BEEVI v. THACHI & ORS. [A.K. PATNAIK, J.]

Howa. Thachi, Sulaiman, Aisha, Pathu and Howa (Plaintiffs)filed a suit, O.S. No.129 of 1980, against Mariyumma, KochuPathu, Abdul Kadar, Fathima Beevi, Amina Beevi, Aisu, V.K.Kesavan, Janaky and the State Bank of Travancore (defendantnos. 1 to 9) and the Trial Court decreed the suit declaring thatthe plaintiffs have leasehold right over the suit property and areentitled to recover possession of the suit property fromdefendants no. 1 to 9 and are also entitled to mesne profit fromthe date of suit till recovery of the possession or till expiry ofperiod of 3 years whichever was earlier. Aggrieved, the StateBank of Travancore, Amina Beevi, V.K. Kesavan and Janakyfiled three appeals, A.S. Nos. 111, 117 and 121 of 1986. By ajudgment and decree dated 30.10.1987, the Additional DistrictJudge, Parur, dismissed the appeals. Against the judgment anddecree of the Additional District Judge, Parur, Amina Beevi andthe State Bank of Travancore filed Second Appeal Nos. 517of 1988 and 311 of 1988 under Section 100 of the Code ofCivil Procedure, 1908 and by the impugned common judgmentand decree dated 28.03.2007, the High Court dismissed thesecond appeals.

3. Mr. C. S. Rajan, learned senior counsel appearing forthe petitioner in S.L.P. (C) 15221 of 2007 Amina Beevi,submitted that the High Court has taken a view that Ext.A3 wasa surrender of the interest of the tenant Kunjali in the suitproperty in favour of the landlord Abdul Kadar and suchsurrender of the interest of the tenant in favour of any party otherthan the Government was prohibited under Section 51 of theKerala Land Reforms Act, 1963 (for short ‘the Act’). Hesubmitted that a plain reading of Ext.A3 would show that it isnot a surrender but an assignment by Kunjali in favour of AbdulKadar and, therefore, the High Court was not right in comingto the conclusion that Ext.A3 was a surrender hit by the statutoryprohibition in Section 51 of the Act. He next submitted that inany case the fact remains that the plaintiffs in the suit, who arethe legal heirs of the tenant Kunjali, had been dispossessed ofthe suit land and their remedy was not a suit in the civil court

but an application to the Land Tribunal under Section 13A ofthe Act for restoration of possession. He cited the decision ofthis Court in Koyappathodi Puthiyedath Ahammedkutty v.State of Kerala and Others [1987 (Supp) SCC 158] in whichit has been held that when a surrender is shown to have beenmade contrary to the provision contained in Section 51 of theAct, the tenant concerned would be entitled to restoration ofpossession under Section 13A of the Act.

4. Mr. Parag Tripathi, learned senior counsel appearing forthe petitioner in SLP(C) 19320 of 2007, the State Bank ofTravancore, submitted that proviso (a) to sub-Section (1) ofSection 13A of the Act makes it clear that land sold to a bonafide purchaser is saved from the provisions of Section 13A ofthe Act. He submitted that Aisu, Fathima Beevi and AminaBeevi were bona fide purchasers of the suit property underExhibits A1 and A2 and hence the purchases of land made bythem were protected under Proviso (a) of sub-Section (1) ofSection 13A of the Act. He further submitted that in accordancewith the provisions of sub-Section (3) of Section 125 of the Act,the Trial Court in the present case referred the question whetherthe plaintiffs were tenants in respect of the suit property to theLand Tribunal and a reading of the order passed by the LandTribunal would show that the Land Tribunal has not properlydecided the question whether the plaintiffs were tenants inrespect of the suit property.

5. In reply, Mr. C.S. Vaidyanathan, learned senior counselappearing for the plaintiffs-respondents, submitted that a plainreading of Ext.A3 would show that under Ext.A3 Kunjali hassurrendered his leasehold right in favour of Abdul Kadar andtherefore the High Court was right in coming to the conclusionthat Ext.A3 though styled as leasehold assignment deed wasactually a surrender of tenancy rights which was prohibited bySection 51 of the Act. In reply to the contention of Mr. Rajanthat the only remedy of the plaintiffs-respondents was to applyto the Land Tribunal under Section 13A of the Act and not a

suit in a civil court, he submitted that Section 13A of the Actwas an additional remedy given to the tenant who isdispossessed of his land and did not bar a civil suit fordeclaration of right of tenancy and for recovery of thepossession of land covered by the tenancy. He submitted thatAisu, Fathima Beevi and Amina Beevi who were impleadedas defendants No.4, 5 and 6 in the suit have not taken any pleain their written statement that they were bona fide purchasersof the suit property and hence the contention of Mr. ParagTripathi that the Act protected bona fide purchasers of landdoes not arise for decision in this case. He relied on the orderpassed by the Land Tribunal to show that the Land Tribunal hasgone into the evidence at length and decided that the plaintiffs-respondents were tenants in respect of the suit property.

6. The first question that we have to decide is whether theHigh Court was right in coming to the conclusion that Ext.A3though styled as assignment of leasehold right was in fact asurrender of the leasehold right by lessee in favour of landlordand therefore hit by Section 51 of the Act which prohibitssurrender of interest of a tenant except in favour of theGovernment. We have perused Ext.A3, copy of which has beenannexed to SLP (C) 15221 of 2007 as Annexure P3, and wefind that under Ext.A3 Kunjali, who was the tenant of the suitland, has assigned his “leasehold right and possession” and“relinquished” all his rights over the property in favour of AbdulKadar. In substance, therefore, Ext.A3 is a surrender ofleasehold or tenancy right by the lessee or the tenant in favourof landlord. Sub-Section (1) of Section 51 of the Act providesthat notwithstanding anything contained in the Act, a tenant mayterminate the tenancy in respect of any land held by him at anytime by surrender of his interest therein but makes it clear inthe proviso that no such surrender shall be made in favour ofany person other than the Government. Hence, under Section51 of the Act any surrender of his interest by the tenant to anyperson other than the Government is prohibited. Ext.A3, beinga surrender by the tenant of his interest in favour of a personother than the Government, was in contravention of Section 51

and was void. We are, therefore, not inclined to disturb thefinding of the High Court that Ext.A3 though styled as aleasehold assignment deed was in fact a surrender of theinterest of the tenant and was prohibited by Section 51 of theAct.

7. The second question which we are called upon todecide in this case is whether the only remedy of the plaintiffs-respondents was to apply to the Land Tribunal under Section13A of the Act and consequently the suit filed by the plaintiffs-respondents was barred under the Act. Section 9 of the Codeof Civil Procedure, 1908 provides that Civil Courts havejurisdiction to try all suits of a civil nature excepting suits whichare either expressly or impliedly barred. Hence, we have toconsider whether the suit filed by the plaintiffs-respondents fordeclaration of their tenancy rights in respect of suit land andfor recovery of possession of the suit land was expressly orimpliedly barred by Section 13A of the Act.

8. Sections 13A and 125 of the Act, which are relevant fordeciding this question are quoted herein below:

“13A. Restoration of possession of personsdispossessed on or after 1st April, 1964 – (1)Notwithstanding anything to the contrary contained in anylaw, or in any contract, custom or usage, or in anyjudgment, decree or order of Court, where any

person has been dispossessed of the land in hisoccupation on or after the 1st day of April, 1964, suchperson shall, if he would have been a tenant under this Actas amended by the Kerala Land Reforms (Amendment)Act, 1969, at the time of such dispossession, be entitledsubject to the provisions of this section to restoration ofpossession of the land:

Provided that nothing in this sub-section shall-

(a) apply in any case where the said land has been

AMINA BEEVI v. THACHI & ORS. [A.K. PATNAIK, J.] 1093 1094

sold to a bona fide purchaser for considerationbefore the date of publication of the Kerala LandReforms (Amendment) Bill, 1968, in the Gazette; or

(b) entitle any person to restoration of possessionof any land which has been resumed under theprovisions of this Act.

(2) Any person entitled to restoration of possession undersub-section (1) may, within a period of six months from thecommencement of the Kerala Land Reforms (Amendment)Act, 1969, apply to the Land Tribunal for the restoration ofpossession of the land.

(3) The Land Tribunal may, after such inquiry as it deemsfit, pass an order allowing the application for restorationand directing the applicant to deposit the compensation,if any, received by the applicant under any decree or orderof Court towards value of improvements or otherwise andthe value of improvements, if any effected on the land afterthe dispossession as may be determined by the LandTribunal, within such period as may be specified in theorder.

(4) On the deposit of the compensation and value ofimprovements as required in the order under sub-section(3), the Land Tribunal shall restore the applicant topossession of the land, if need be by removing any personwho refuses to vacate the same.

125. Bar of jurisdiction of Civil Courts – (1) No Civil Courtshall have jurisdiction to settle, decide or deal with anyquestion or to determine any matter which is by or underthis Act required to be settled, decided or dealt with or tobe determined by the Land Tribunal or the appellateauthority or the Land Board [or the Taluk Land Board] orthe Government or an officer of the Government;

Provided that nothing contained in this sub-sectionshall apply to proceedings pending in any Court atthe commencement of the Kerala Land ReformsAmendment Act, 1969.

(2) No order of the Land Tribunal or the appellate authorityor the Land Board [or the Taluk Land Board] or theGovernment or an officer of the Government made underthis Act shall be questioned in any Civil Court, except asprovided in this Act.

(3) If in any suit or other proceedings any questionregarding rights of a tenant or of a kudikidappukaran(including a question as to whether a person is a tenantor a kudikidappukaran) arises, the Civil Court shall staythe suit or other proceedings and refer such question tothe Land Tribunal having jurisdiction over the area in whichthe land or part thereof is situate together with the relevantrecords for the decision of that question only.

(4) The Land Tribunal shall decide the question referredto it under sub-section (3) and return the records togetherwith its decision to the Civil Court.

(5) The Civil Court shall then proceed to decide the suitor other proceedings accepting the decision of the LandTribunal on the question referred to it.

(6) The decision of the Land Tribunal on the questionreferred to it shall, for the purposes of appeal, be deemedto be part of the finding of the Civil Court.

(7) No Civil Court have power to grant injunction in any suitor other proceeding referred to in sub-section (3)restraining any person from entering into or occupying orcultivating any land or kudikidappu or to appoint a receiverfor any property in respect of which a question referred toin that sub-section has arisen, till such question is decided

by the Land Tribunal, and any such injunction granted orappointment made before the commencement of theKerala Land Reforms (Amendment) Act, 1969, or beforesuch question has arisen, shall stand cancelled.

(8) In this Section, “Civil Court” shall include a Rent ControlCourt as defined in the Kerala Buildings (Lease and RentControl) Act, 1965.”

9. A plain reading of Sub-Section (1) of Section 13A ofthe Act quoted above would show that a person who has beendispossessed of his land in his occupation on or after 1stApril, 1964 and such person would have been a tenant underthe Act as amended by the Kerala Land Reforms (Amendment)Act, 1969, at the time of such dispossession, would be entitledsubject to the provisions of the Section to restoration of thepossession of the land. It, thus, appears that any person whohas been dispossessed of land under his occupation on orafter 1st April, 1964 and such person would have been atenant under the Act as amended by the Kerala Land Reforms(Amendment) Act, 1969 has been provided with a specialremedy of restoration of possession of land under Section13A of the Act. None of the sub-sections of Section 13Aexpressly state that a suit by a tenant for recovery ofpossession of land which was under his occupation was barred.Hence a suit for recovery of possession by a tenant is not“expressly” barred.

10. We cannot also hold that such a suit was “impliedly”barred by Section 13A of the Act because of what is providedin Section 125 of the Act. Sub-Section (1) of Section 125 ofthe Act quoted above states that no Civil Court shall havejurisdiction to settle, decide or deal with any question or todetermine any matter which is by or under this Act required tobe settled, decided or dealt with or to be determined by theLand Tribunal and sub-Section (3) of Section 125 states that ifin any suit or other proceedings any question regarding rightsof a tenant including a question as to whether a person is a

tenant arises, the Civil Court shall stay the suit or otherproceeding and refer such question to the Land Tribunal havingjurisdiction over the area in which the land or part thereof issituate together with the relevant records for the decision of thatquestion only. Sub-Section (4) of Section 125 further states thatthe Land Tribunal shall decide the question referred to it undersub-Section (3) and return the records together with its decisionto the Civil Court and under sub-section (5) of Section 125 theCivil Court shall then proceed to decide the suit or otherproceedings accepting the decision of the Land Tribunal on thequestion referred to it. These provisions make it amply clearthat in any suit regarding rights of a tenant, the rights of thetenant including a question whether a person is a tenant willhave to be referred by the Civil Court to the Land Tribunal andafter the Land Tribunal decides the question, the Civil Court willdecide the suit in accordance with the decision of the LandTribunal. Considering these clear provisions of Section 125 ofthe Act, we are of the considered opinion that the suit of theplaintiffs-respondents for declaration that they were tenants inrespect of the suit property and for recovery of possession ofthe suit property from the defendants and for mesne profit wasnot barred either expressly or impliedly by Section 13A of theAct. This Court has also not held in Koyappathodi PuthiyedathAhammedkutty v. State of Kerala and Others (supra) cited byMr. Rajan that the tenant cannot institute a suit in a Civil Courtfor declaration of his tenancy in respect of a land and forrecovery of possession of the land covered by the tenancy.

11. We may now take up the contention of Mr. Tripathi thatthe Land Tribunal, to which the claim of tenancy of the plaintiffs-respondents was referred, has not considered the claimproperly. We have perused the order dated 13.11.1984 of theLand Tribunal, Perumbavoor, a copy of which has beenannexed as Annexure R-2 in I.A. No.2 of 2010 in SLP (C)No.19320 of 2007, and we find that the Land Tribunal has dealtwith the oral evidence of several witnesses and a large numberof documents filed on behalf of the parties and has come to

AMINA BEEVI v. THACHI & ORS. [A.K. PATNAIK, J.]1097

the conclusion that the father of the plaintiffs-respondents andafter him the plaintiffs-respondents had leasehold rights in thelight of the available evidence. We also find that the Trial Courthas accepted this finding of the Land Tribunal upholding theleasehold right of the plaintiffs-respondents and has decidedIssue No.1 in the suit accordingly. The finding of the LandTribunal and the Trial Court on this point is a finding of factbased on oral and documentary evidence and we are notinclined to disturb this finding in this Special Leave Petition.

12. We also find that no issue was raised before the TrialCourt whether Aisu, Fathima Beevi and Amina Beevi werebona fide purchasers of the suit property and therefore the TrialCourt has not recorded a finding on this issue. In the absenceof any finding on this issue of fact, we do not think it necessaryto decide in this case whether a tenant could or could notrecover land which was under his occupation from a bona fidepurchaser by virtue of what is provided in Proviso (a) to Sub-Section (1) of Section 13A of the Act.

13. In the result, we hold that there is no merit in theseSpecial Leave Petitions and we accordingly dismiss the same.No costs.

R.P. SLPs dismissed.

D. HANUMANTH SA & ORS.v.

STATE OF KARNATAKA & ORS.(Civil Appeal Nos. 17-20 of 2005 ETC.)

OCTOBER 27, 2010

[DR. MUKUNDAKAM SHARMA AND SWATANTERKUMAR, JJ.]

Land Acquisition Act, 1894 – ss. 4 and 6 – Issuance ofpreliminary and final notifications under – Legality andValidity of – Issuance of notifications u/ss. 4 and 6 upheld bythe Division Bench of the High Court – On appeal, held: Landwas acquired for making approach road as also for workshopand residential quarters of staff for State Road TransportCorporation, thus, was acquired for public purpose – StateGovernment was fully competent to issue such notification –Land acquired under the said notification not connected withthe notification issued by State Government for KarnatakaIndustrial Areas Development Board for Infrastructure CorridorProject – Even assuming that the part of the said land stoodacquired for a different purpose, it is not a proper acquisitionas the land already stood acquired under a differentnotification issued by separate authority.

The respondents issued a notification under Section4 of the Land Acquisition Act, 1894 and also thenotification under Section 6 of the Act to acquire landadmeasuring 3 acres 34 guntas. The appellantschallenged the legality and the validity of the preliminaryand final notifications. The Single Judge of the High Courtallowed the writ petitions holding that in the proceedingsprepared by the State Government, the purpose ofacquisition was stated to have a link road and in the finalnotification under Section 6 of the Act, the purpose of

[2010] 12 S.C.R. 1098

1099 1100D. HANUMANTH SA & ORS. v. STATE OFKARNATAKA

acquisition was shown as completely different and, thus,quashed the notifications. The Division Bench of theHigh Court set aside the order of the Single Judgeholding that the acquisition for the land being for a publicpurpose, there was no ambiguity in the notificationsissued under Section 4 and 6 of the Act. Therefore, theappellants filed the instant appeals.

Disposing of the appeals, the Court

HELD: 1.1 In the notification dated 14.10.1992, issuedunder Section 4(1) of the Land Acquisition Act, 1894, it isspecifically stated that the State of Karnataka requiredthe land under acquisition for a specific public purpose,viz., for the benefit of Karnat aka State Road TransportCorporation. The part of the notification invoking theprovisions of Section 17(4), i.e., applying the urgencyrequirement of the Government was set aside by the writcourt which became final and binding. [Para 9] [1104-E]

1.2 In the proceedings regarding acquisition of 7acres 15 guntas of land, it was stated that in order to meetthe increasing traffic in the surrounding area ofBangalore city, and also with a view to provide bettertransport service to the public, the Government proposedto establish a large workshop and city bus depot in thesaid land, and also proposed to undertake establishmentof residences to workers, training centre and others. Inorder to construct/form the road, the said land is required.The said proceedings on careful analysis would alsoindicate that the land which was sought to be acquiredalso figured in a comprehensive plan for construction ofa road as also workshop and residential building of thestaff of KSRTC. The State Government reiterated the saidfact by filing an affidavit. The said reasons and thepurpose for which the land was sought to be acquiredis definitely of a public character and, therefore, therespondent-State Government is fully competent to issue

such a notification under Section 4 as also under Section6 of the Land Acquisition Act. [Paras 10 and 11] [1104-G-H; 1105-A-D]

1.3 It is submitted that the Karnataka Industrial AreasDevelopment Board issued another Notification statingthat the land as mentioned in the letter dated 16.12.2004is being acquired by the Karnataka Industrial AreasDevelopment Board. The said land was sought to beacquired by issuing notification under the State Act, viz.,under Section 28 (1) and Section 28(4) of the State Act. Apreliminary notification was issued by the DevelopmentBoard, including land admeasuring 39 guntas fromSurvey No. 128/1 and 34 guntas from Survey No. 128/2.The said letter itself also indicates that subsequently, afinal notification came to be issued under Section 28(4)of the State Act only for 34 guntas covered by Survey No.128/2. A bare perusal of the notifications issued underSections 4(1) and 6 of the Act would indicate that the landcovered by Survey No. 128/1 was a part of the saidnotification but since the same came to be excluded inthe final notification under Section 28(4), the submissionsthat the said land stood acquired for a different purposeand, therefore, the purpose for which the land wassought to be acquired under Section 4 and 6 wasunjustified, is not tenable. [Paras 11, 12 and 13] [1105-E-G; 1106-B-C]

1.4 If land already stands acquired by theGovernment and if the same stands vested in theGovernment, there is no question of acquisition of sucha land by issuing a second notification, for theGovernment cannot acquire its own land. In the instantcase, it cannot be said that the land which stood acquiredunder the notification issued under Sections 4 and 6 ofthe Act are in any manner connected with thenotifications issued by State Government for Karnataka

1101 1102D. HANUMANTH SA & ORS. v. STATE OFKARNATAKA

Industrial Areas Development Board for BangaloreMysore Infrastructure Corridor Project and evenassuming a part of the said land is now sought to beacquired for a different purpose to that extent, the samecannot be said to be a proper acquisition as the landalready stands acquired under a different notificationissued by a separate authority under separate provisionsof law. [Paras 14 and 15] [1106-D; 1107-A-B]

State of Orissa v. Brundaban Sharma 1995 Supp (3)SCC 249; Meher Rusi Dalal v. Union of India (2004) 7 SCC362; Collector of Bombay v. Nusserwanji Rattanji Mistri(1955) 1 SCR 1311, referred to.

Case Law Reference:

1995 Supp (3) SCC 249 Referred to Para 14

(1955) 1 SCR 1311 Referred to Para 14

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 17-20 of 2005.

From the Judgment & Order dated 2.7.2003 of the HighCourt of Karnataka at Bangalore in Writ Appeal Nos. 5899-5902 of 2000 (LA-RES).

C.A. No. 22 of 2005.

Kiran Suri, S.J. Smith, Vijay Verma, R.S. Hegde, AmitWadhwa, Chandra Prakash Tyagi, P.P. Singh for theAppellants.

S.N. Bhat, N.P.S. Panwari, O.P. Chaturvedi, Sanjay R.Hegde, Ramesh K. Mishra for the Respondents.

DR. MUKUNDAKAM SHARMA, J. 1. By filing the presentappeals the appellants have challenged the validity of thenotification issued under Section 4 of the Land Acquisition Act,1894 [hereinafter referred to as “the Act”) and also thenotification issued under Section 6 of the Act whereby therespondents sought to acquire land admeasuring 3 acres 34guntas situated in Kengeri Village and Hobli, Bangalore,Karnataka.

2. Initially appellants filed writ petitions registered as WritPetition Nos. 20083-20085 of 1993 before the Karnataka HighCourt challenging the validity of the notification issued underSection 4 invoking the emergency clause. The High Court ofKarnataka, while issuing notice, granted stay. Subsequently, anorder dated 30.08.1993 was passed in the writ petitionregarding the statement/submission on behalf of the StateGovernment that they would not proceed with the acquisitionproceeding of invoking the emergency provision under the Act.Consequent to the same, the appellants herein were givenopportunity to file objections.

3. The appellants thereafter filed detailed objectionscontending inter alia that the vast extent of land that is alreadypossessed by the Karnataka State Road TransportCorporation [for short ‘KSRTC’] and some of the State-ownedland is still laying vacant and, therefore, the purpose of acquiringthe land of the appellants for formation of link road is unjustifiedand that the same cannot be said to be required for formationof link road. The appellants also contended that despite theaforesaid objection filed and a report submitted by the LandAcquisition Officer in favour of the claimants, the StateGovernment issued a final notification under Section 6(1) of theAct by holding that the land belonging to the appellants arerequired for the purpose of workshop and providing residentialquarters to its employees.

1103 1104D. HANUMANTH SA & ORS. v. STATE OFKARNATAKA [DR. MUKUNDAKAM SHARMA, J.]

appellants submitted that the notification issued by therespondent under Section 4 was vague and the purpose forwhich the land was sought to be acquired as disclosed fromthe entire records of the proposed acquisition including the saidnotification was different than what was sought to be stated inthe notification under Section 6. It was also submitted that theGovernment had failed to give detailed reasons for issuing thesaid notifications to satisfy that the land was required for publicpurpose, particularly when the Land Acquisition Officer hadgiven his reasons to indicate that the purpose for which the landis sought to be acquired was not justified in the facts andcircumstances of the case. In order to appreciate the aforesaidcontentions raised, we have considered all the notificationsrelevant to the facts and circumstances of the case and alsorelevant records useful for our purpose.

9. In the notification issued under Section 4(1) which isdated 14.10.1992, it is specifically stated that the State ofKarnataka required the land under acquisition for a specificpublic purpose, viz., for the benefit of Karnataka State RoadTransport Corporation. The part of the notification invoking theprovisions of Section 17(4), i.e., applying the urgencyrequirement of the Government was set aside by the writ courtwhich became final and binding and we are not required toaddress the aforesaid issue. But, so far as the requirement ofthe land for public purpose is concerned, the same wasnecessarily for a public purpose, viz., for the benefit ofKarnataka State Road Transport Corporation.

10. Counsel appearing for the appellants however drew ourattention to the proceedings regarding acquisition of 7 acres15 guntas of land. We have perused the said copies of theproceedings also. In the said proceedings, it was stated thatin order to meet the increasing traffic in the surrounding areaof Bangalore city, and also with a view to provide bettertransport service to the public, it is proposed by theGovernment to establish a large workshop and city bus depot

4. Being aggrieved by the aforesaid action on the part ofthe State Government in issuing a notification under Section 6of the Land Acquisition Act, the appellants filed Writ PetitionNos. 25361-25364 of 1994 and 25264 of 1994 before theKarnataka High Court challenging the legality and the validityof the preliminary and final notifications.

5. The Single Judge of the Karnataka High Court, by hisjudgment and order dated 01.02.2000, allowed the said writpetitions holding that in the proceedings prepared by the StateGovernment, the purpose of acquisition was stated to have alink road and in the final notification under Section 6 of the Act,the purpose of acquisition having been shown as completelydifferent, the entire purpose was not justified and tenable. Thesaid fact was also stated to be so, and had been held asunjustified by the Land Acquisition Officer. By so holding thelearned Single Judge of the Karnataka High Court allowed thewrit petitions and quashed the said notifications issued underSection 4 and Section 6 of the Land Acquisition Act.

6. Being aggrieved by the said judgment and order therespondent filed a writ appeal before the High Court ofKarnataka. By judgment and order dated 02.07.2003 theDivision Bench of the Karnataka High Court allowed the appealfiled by the State Government and set aside the judgment andorder of the learned Single Judge holding that the acquisitionfor the land was for a public purpose and that there was noambiguity in the two notifications issued under Sections 4 and6 of the Act.

7. Being aggrieved by the said judgment and order passedby the Division Bench of the High Court the present appealshave been filed by the claimants-appellants on which we haveheard learned counsel appearing for the parties.

8. In the light of the submissions made before us we nowproceed to decide the contentions raised before us by thecounsel appearing for the parties. Counsel appearing for the

1105 1106D. HANUMANTH SA & ORS. v. STATE OFKARNATAKA [DR. MUKUNDAKAM SHARMA, J.]

in the said land and also for establishment of residences toworkers, training centre and others are also proposed to beundertaken and in order to construct/form the road the said landis required. The said proceedings on careful analysis wouldalso indicate that the land which was sought to be acquired alsofigured in a comprehensive plan for construction of a road asalso workshop and residential building of the staff of KSRTC.The said fact also came to be reiterated by the StateGovernment by filing an affidavit wherein it is stated that theentire land in dispute is in fact required not only for making anapproach road but also for building a workshop and staffresidential quarters.

11. The aforesaid reasons and the purpose for which theland was sought to be acquired is definitely of a public characterand therefore, the respondent-State Government, in ourconsidered opinion, is fully competent to issue such anotification under Section 4 as also under Section 6 of the LandAcquisition Act. Counsel appearing for the appellant at onestage also drew our attention to the fact that subsequently,another notification came to be issued by the KarnatakaIndustrial Areas Development Board stating that the land asmentioned in the letter dated 16.12.2004 which is annexed asAnnexure R-5 is being acquired by the Karnataka IndustrialAreas Development Board. The said land was sought to beacquired by issuing notification under the State Act, viz., underSection 28(1) and Section 28(4) of the State Act.

12. A preliminary notification was issued by the saidauthority, viz., Development Board, including land admeasuring39 guntas from Survey No. 128/1 and 34 guntas from SurveyNo. 128/2. The said letter itself also indicates that subsequently,a final notification came to be issued under Section 28(4) ofthe State Act only for 34 guntas covered by Survey No. 128/2.Incidentally, the land falling under Survey No. 128/2 was notnotified either under Section 4 or under Section 6 under thenotifications dated 14.10.1992 and 28.03.1994, respectively.

13. So far as 39 guntas covered by Survey No. 128/1 isconcerned, which is sought to be acquired as indicated fromletter dated 10.12.2004, we find that the same is not includedin the final notification. A bare perusal of the notifications issuedunder Sections 4(1) and 6 of the Act would indicate that theland covered by Survey No. 128/1 was a part of the saidnotification but since the same came to be excluded in the finalnotification under Section 28(4), the contentions raised by thecounsel appearing for the appellants that the said land stoodacquired for a different purpose and, therefore, the purpose forwhich the land was sought to be acquired under Section 4 and6 was unjustified, is not tenable.

14. Even otherwise, if land already stands acquired by theGovernment and if the same stands vested in the Governmentthere is no question of acquisition of such a land by issuing asecond notification, for the Government cannot acquire its ownland. The same is by now settled by various decision of thisCourt in a catena of cases. In State of Orissa v. BrundabanSharma, reported at 1995 Supp (3) SCC 249, this Court hasheld that the Land Acquisition Act does not contemplate orprovide for the acquisition of any interest belonging to theGovernment in the land on acquisition; This position wasreiterated in a subsequent decision of this Court in Meher RusiDalal v. Union of India, reported at (2004) 7 SCC 362. Inparagraphs 15 and 16 of the said judgment, this Court has heldthat the High Court clearly erred in setting aside the order ofthe Special Land Acquisition Officer declining a reference sinceit is settled law that in land acquisition proceedings theGovernment cannot and does not acquire its own interest.While laying down the aforesaid law, this Court has referred toits earlier decision in the case of Collector of Bombay v.Nusserwanji Rattanji Mistri reported at (1955) 1 SCR 1311.

15. However, on a close scrutiny of the records we find thatsame is not the case in the present case at hand. It cannot besaid that the land which stood acquired under the notification

BALAKRISHNAN, J.]

1107D. HANUMANTH SA & ORS. v. STATE OFKARNATAKA [DR. MUKUNDAKAM SHARMA, J.]

issued under Sections 4 and 6 of the Act are in any mannerconnected with the notifications issued by State Governmentfor Karnataka Industrial Areas Development Board forBangalore Mysore Infrastructure Corridor Project and evenassuming a part of the said land is now sought to be acquiredfor a different purpose to that extent, the same cannot be saidto be a proper acquisition as the land already stands acquiredunder a different notification issued by a separate authorityunder separate provisions of law.

16. In that view of the matter, we find no merit in theseappeals and the same are disposed of by this commonjudgment and order. Parties are left to bear their own costs.

N.J. Appeals disposed of.

STATE OF UTTARANCHAL(NOW KNOWN AS STATE OF UTTARAKHAND) & ORS.

v.M/S. KHURANA BROTHERS

OCTOBER 27, 2010

[P. SATHASIVAM AND R.M. LODHA, JJ.]

Stamp Act, 1899: s.2(10); Schedule I-B; Article 23 –Contract of sale – Auction – Bid – Acceptance of bid – Interms of the contract, auctioned lot remained at purchaser’srisk from the date of acceptance of its bid and seller was notresponsible for any loss and damage – Held: Since propertyin auctioned lot vested in the purchaser as a result of subjectcontract, it amounted to transfer of movable property and‘conveyance’ as defined u/s.2(10) and was chargeable tostamp duty under Article 23, Schedule I-B – Contract – Saleof goods Act, 1930 – s.4.

Contract: Contract of sale and agreement to sell –Distinction between.

Review: Scope of – Held: Division Bench of High Courttravelled beyond the scope of review, as the view taken in thejudgment under review did not suffer from any error apparenton the face of record justifying its review.

In a public auction, the highest bid of the writpetitioner-respondent for the purchase of crude resin wasaccepted. On March 24, 2001, a formal contract wasentered into between the State Government and the writpetitioner. In terms of the contract, the State Governmentagreed to deliver the specified quantity of the crude resinto the writ petitioner for the price stated in the contract.The parties agreed that the quantity may increase or

[2010] 12 S.C.R. 1108

1109 1110STATE OF UTTARANCHAL v. KHURANA BROTHERS

decrease by 10% and the resin would have to be removedby the purchaser within 60 days from the date of approvalof sale and it would not be removed in more than 60installments. As per the terms of the contract, thepurchaser was required to pay the amount of sale priceirrespective of the fact whether the contracted quantityof resin was lifted by it or not. By a subsequentcommunication dated April 7, 2001, the purchaser wasinformed of the acceptance of the bid for the stated resinlot/s in its favour and it was asked to arrange for liftingof the same within 60 days of the issuance of that letter.

The short question that arose for consideration in theinstant appeal was whether the said contract for sale ofcrude resin amounted to ‘conveyance’ as defined underSection 2(10) of the Stamp Act, 1899 and, if yes, whetherstamp duty was chargeable thereon.

HELD: 1.1. The essence of sale is the transfer of theproperty in a thing from one person to another for a price.As per Section 4 of Sale of Goods Act, 1930, the contractof sale includes an agreement to sell. It is not necessarythat contract of sale must be absolute. It may beconditional as well. The essential feature thatdistinguishes the contract of sale from an agreement tosell is that in a contract of sale, the property in the goodsis transferred from the seller to the buyer immediately,whereas in an agreement to sell property is transferredon a future date/dates. An agreement to sell becomes asale, on fulfillment of the conditions or when the timeprovided in the agreement elapses. [Para 7] [1119-B]

1.2. Schedule I–B appended to the Stamp Actprovides for the rates of stamp duty in respect ofinstruments described thereunder. Article 23 thereof

provides for rate of stamp duty on the ‘conveyance’ asdefined by Section 2(10) of the Stamp Act, 1899 which arenot exempted under Article 62. Under Section 2(10), interalia , every document by which movable property istransferred is ‘conveyance’. In the instant case, thecontract of sale for crude resin entered into between theparties amounted to transfer of movable property. By thesaid contract, the right in auctioned lot of crude resin wascreated in favour of the writ petitioner. Correspondingly,the State Government was under obligation to deliver thequantity of crude resin specified in the document. Thecontract provided that resin sold would remain atpurchaser’s risk from the date of acceptance of its bidand seller would not be responsible for any loss anddamage which might occur thereto from any causewhatsoever. A perusal of the document as a wholeshowed that property in the auctioned lot of crude resinvested in the purchaser as a result of the subject contractand, thus it amounted to transfer of movable property.Even if the document dated March 24, 2001 was treatedas an agreement to sell, in view of the acceptance letterdated April 7, 2001 whereby the writ petitioner wasinformed that public auction was accepted in its name andthat it must arrange for lifting of the auctioned resinwithin 60 days from the issuance of the letter, it is veryclear that the contract of sale dated March 24, 2001 readwith the letter dated April 7, 2001 amounted to‘conveyance’ within the meaning of Section 2(10) andwas chargeable to stamp duty under Article 23, ScheduleI-B, as admittedly there was no exemption from paymentof stamp duty in respect of such conveyance underArticle 62. It is true that the contract document datedMarch 24, 2001 recorded the receipt of Rs. 39,000/- assecurity from the purchaser for due fulfillment of all thecovenants but such a clause would not make it a‘security document’. [Paras 13, 14] [1123-A-H; 1124-A]

1111 1112STATE OF UTTARANCHAL v. KHURANA BROTHERS

2. The Division Bench travelled beyond the scope ofreview, as the view taken in the judgment under reviewdid not suffer from any error apparent on the face of therecord justifying the review. [Para 15] [1124-B]

From the Judgment & Order dated 27.12.2007 of the HighCourt of Uttarakahand at Nainital in 2345 of 2004 in W.P. No.902 of 2001 (M/B).

Civil Appeal No. 5878, 5879, 5880 of 2009.

P.N. Gupta for the Appellants.

S.P. Kalra, Shailendra Bhardwaj, Arvind Kumar Sharma,Sumit Kumar for the Respondent.

R.M. LODHA, J. 1. These four appeals at the instance ofthe State of Uttaranchal and the Officers of its ForestDepartment are directed against the judgment dated December27, 2007 passed by the High Court of Uttarakhand whereby theDivision Bench allowed the review petitions filed by presentrespondents (writ petitioners) and reviewed its earlier judgmentdated April 13, 2004 and thereby allowed the writ petitions filedby the writ petitioners holding that they were not liable to paystamp duty on the documents pertaining to contract of sale forcrude resin. Since the facts and documents involved in thisgroup of appeals are identical, for convenience, we shall referto the facts and documents in Civil Appeal No. 5876 of 2009.The controversy arises in this way.

2. The Divisional Forest Officer, Nainital Forest Range,Nainital notified public auction of resin at Bhuwali Forest Rest

House on March 24, 2001. The writ petitioner (KhuranaBrothers) participated in that public auction. Its bid in the sumof Rs. 3,90,000/- being the highest bid was accepted by theDivisional Forest Officer, Nainital and the formal contract of salefor crude resin was entered into between the competentauthority of the State Government in the name of the Governorand the writ petitioner on March 24, 2001. Subsequently a letterwas issued on April 7, 2001 asking the writ petitioner to lift thecontracted resin within 60 days therefrom.

3. The contract of sale for crude resin between the partiesreads as follows :

“FORM OF CONTRACT OF CRUDE RESIN

Lot No. 7 to 10/2001

Value of the Deed Rs. 3,90,000.00 (Rupees Three Lakh,Ninety Thousand Only)

This indenture made this 24th day of March 2001between the Governor of the Uttaranchal (hereinafter called“Seller” of the one part and Shri Khurana Brothers,Rishikesh (hereinafter called the “Buyer” which expressionincludes its executors, administrators, successors andassigns) of the other part witnessed as follows :

The seller in considerations of payment to be made by thebuyer as hereinafter provided at the rate of 1950.00(Rupees One Thousand Nine Hundred Fifty Only) perquintal calculated at per quintal naked (without container)and in addition the buyer shall have to pay sale tax on thetotal sale value of the resin 79% or the rate applicable atthe time of sale subject to the following terms andconditions :

(A) Approximately 1160 (One Thousand One HundredSixty) tins 200 (two Hundred) quintals of crude resin (netweight) will be delivered at resin depot Sultan Nagri. The

1113 1114STATE OF UTTARANCHAL v. KHURANA BROTHERS[R.M. LODHA, J.]

quantity may increase or decrease by 10% & the buyer willhave to accept the quantity made available by the seller.The weight of resin will be the same as has been recordedin the books of the seller. The seller reserves the right toreject the claim of the purchaser for weighment at the timeof taking delivery.

(B) The resin sold will remain at purchaser’s risk from dateof acceptance of his bid and the seller will not beresponsible for any loss and damage which may occurthereto from any cause whatsoever.

(C) All the resin will have to be removed by the purchaserwithin 60 days of the date of approval of the sale. It will beremoved in not more than 60 installments as follows :

1. Within Days of approval of sale.

The purchaser can remove resin only with the writtenpermission of the Divisional Forest Officer, Nainital ForestDivision, Nainital and on payment is advance of the full costand sale tax of resin.

The seller does not take any responsibility for the qualityof resin contained in the tins and will not give any resin inexchange.

2. The amount of sale price of the lot calculated on thebasis of per quintal bid at the time of auction shall bepayable by the buyer irrespective of the fact whether helifts the material or not.

3. Any resin or tin left within the depot after the last date

of lifting shall vest in the Govt. and shall be confiscated andrefund in lieu of such resin or tins shall be due to the buyer.

4. No crude resin will be exported by the buyer from theresin depot specified in clause I accept by such routes andvia such chaukies as may be decided upon and recordedin written by the Forest Office. The resin tins may becounted and weighted by any Forest Officer at any timeduring transit.

5. The buyer shall furnish the Forest Officer in writing withthe names of all the agents and servants it proposesemploy for it before they are employed and the ForestOfficer shall be at liberty to forbid the employment of anyperson whom he may consider undesirable.

6. The buyer shall not drag the resin tins from the SultanNagri Depot.

7. In the event of a breach of any of the conditions of thisindenture by the buyer or by agents or servants the M/s.Khurana Brothers, Rishikesh shall be liable to pay of finewhich may extend to fifty rupees at the discretion of theForest Officer for each such breach.

8. In the event of breach of this agreement or of any forestlaw or rules the export of the buyer may be stopped underthe orders of the Forest Office, pending any investigationand decision of the case.

9. Nothing in this indenture shall be held to exempt thebuyer or its agents or servants from liability to criminalproceedings for breach of the forest laws and rulescommitted by it or them.

10. In the event of dispute concerning any of the terms ofthis indenture the same shall be referred to the solearbitrator appointed by the Chief Conservator of Forest,Uttaranchal whose decision shall be final and binding the

STATE OF UTTARANCHAL v. KHURANA BROTHERS[R.M. LODHA, J.]

1115 1116

parties.

11. The seller has received from the buyer the sum of(Rupees 39,000.00 Thirty Nine thousand) only receipt ofwhich is hereby acknowledged as security for the duefulfillment of all the covenants herein before contained. TheForest Officer in empowered to deduct from such securitymoney any sum, which may be due from the buyer whetherin respect of any of the price payable by it or any fine orliability incurred by it under the provision of this indenture.The security money or such balance thereof as may beafter making the deductions aforementioned will bereturned to the buyer on the expiration or soonerdetermination of this agreement as after the Forest Officershall have satisfied himself that all the terms of thisindenture have been duly and faithfully carried out by thebuyer.

12. The stamp duty payable on this deed and the fee forregistration of this deed shall be borne by the buyer.

13. Any tax imposed by any law on the present sale shallbe payable by the buyer.

14. Any sum of money, either of sale consideration or fineor other kind of due, payable by the buyer under this deedto the seller shall be recoverable as arrears of landrevenue.

In witness where of the Conservator of Forest, SouthernKumaon Circle, Uttaranchal on behalf of the Governor ofthe Uttaranchal and the M/s. Khurana Brothers, GopalMandir, Rishikesh aforesaid have there to set the insignature.

BUYER : CONSERVATOR OF FORESTKhurana Brothers”

4. The letter issued by the Divisional Forest Officer to thewrit petitioner on April 7, 2001 is as follows :

“Office of Divisional Forest OfficerNainital Forest Division Nainital

Letter No. 4566/39-8.9 Dated Nainital 7-4-2001

To,Khurana Brothers Rishikesh

Gopal Mandir RishikeshSubject : Acceptance of Lisa lots purchased on 24-3-2001

in the public auction held at Bhuwali Forest Rest House.

Ref : Letter No. 2955/39-8 Dated 31-0-2001 of forestconservator, southern Kumaun circle, Uttaranchal Nainital.

The Bid given by you in the public auction held at BhuwaliForest Rest House on 24-3-2001 for the following resin lot isaccepted in your name.

Name Lot Resin BID Total Nameof No. PURCHASED Accepted price ofDivision Tin No. Quantity Per QTL. in Depot

In In rupees rupees fromQuintal where is

to belifted

1 2 3 4 5 6 7

East 314 to 1740 295 1956/- 586800 SultanAlimorah

319/2001 300 Nagri

You are therefore to arrange for lifting of aforesaidresin within 60 days of the date of issuance of the letter afterhaving the following conditions of auction notice completed by

depositing in advance with the Depot, Sultan NagriKathgodam.

1. Submitting challan of the total amount of purchased resinin favour of concerned Divisional Forest officer.

2. Submitting certified the photocopy of certificate ofregistration with department as required for registration inaccordance with section 10 of Uttar Pradesh Rosin andother Forest produce (Trade Regulation) Act, 1976.

3. Payment of total price of Rosin & Trade tax at theprevailing rates at the date of auction shall be compulsoryprior to lifting the resin.

4. The details of resin obtained from all sources along withdetails concerning utilization fuel and further details ofpayment of Trade tax on the products manufactured frompreviously obtained rosin prior to lifting the rosin besubmitted with Depot officer Rosin Depot.

5. Stamp Duty shall be payable on such purchase as perrules and Government order.

6. The contribution for District Board at the rate of Rs. 5/-per quintal on the purchased rosin shall be payable.

7. Prescribed Income tax and surcharge according to rulesshall be paid.

Divisional Forest Officer

Nainital Forest Division”

5. The short question that arises for consideration iswhether the above contract of sale for crude resin amounts to‘conveyance’ as defined under Section 2(10) of the IndianStamp Act, 1899 (for short, ‘the Stamp Act’) and, if answer is

in the affirmative, whether stamp duty is chargeable thereon.In order to answer the aforesaid question, the true and realmeaning of the document needs to be ascertained. When welook at the contract, it would be seen that in consideration ofthe price stated in the contract, the State Government agreedto deliver the specified quantity of the crude resin to the writpetitioner (‘purchaser’). The parties agreed that quantity mayincrease or decrease by 10% and the resin will have to beremoved by the purchaser within 60 days from the date ofapproval of sale and it will not be removed in more than 60installments. As per the terms of the contract, the purchaser wasrequired to pay the amount of sale price irrespective of the factwhether the contracted quantity of resin was lifted by it or not.By a subsequent communication dated April 7, 2001, thepurchaser was informed of the acceptance of the bid for thestated resin lot/s in its favour and it was asked to arrange forlifting of the same within 60 days of the issuance of that letter.

6. Section 4 of the Sale of Goods Act, 1930 reads asfollows:

“S.4. Sale and agreement to sell. – (1) A contract of saleof goods is a contract whereby the seller transfers oragrees to transfer the property in goods to the buyer for aprice. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in thegoods is transferred from the seller to the buyer, thecontract is called a sale, but where the transfer of theproperty in the goods is to take place at a future time orsubject to some condition thereafter to be fulfilled, thecontract is called an agreement to sell.

(4) An agreement to sell becomes a sale when the timeelapses or the conditions are fulfilled subject to which the

property in the goods is to be transferred.”

7. The essence of sale is the transfer of the property in athing from one person to another for a price. As per Section 4,the contract of sale includes an agreement to sell. It is notnecessary that contract of sale must be absolute. It may beconditional as well. The essential feature that distinguishes thecontract of sale from an agreement to sell is that in a contractof sale the property in the goods is transferred from the sellerto the buyer immediately whereas in an agreement to sellproperty is transferred on a future date/dates. An agreementto sell becomes a sale on fulfillment of the conditions or whenthe time provided in the agreement elapses.

8. Section 2(10) of the Stamp Act defines ‘conveyance’as follows :

“S.2(10). – ‘Conveyance’.—‘Conveyance’ includes aconveyance on sale and every instrument by whichproperty, whether movable or immovable, is transferredinter vivos, and which is not otherwise specifically providedfor by Schedule I, Schedule I-A or Schedule I-B, as the casemay be;

Explanation …….”.

9. Section 2(14) as was existing at the relevant time priorto amendment vide U.P. Act 38 of 2001 reads as follows:

“S. 2(14). — “instrument” includes every document bywhich any right or liability is, or purports to be, created,transferred, limited, extended, extinguished or recorded.”

10. Section 3 is the charging Section. To the extent it isrelevant, it reads as follows:

“S.3. Instruments chargeable with duty. – Subject tothe provisions of this Act and the exemptions containedin Schedule I, the following instruments shall be chargeable

with duty of the amount indicated in that Schedule as theproper duty therefor, respectively, that is to say—

(a) . . . . . . . . . . . .

(b) . . . . . . . . . . ..

(c) . . . . . . . . . . . .

Provided that, except as otherwise expresslyprovided in this Act, and notwithstanding anythingcontained in Clause (a), (b) or (c ) of this section, or inSchedule I or I-A, the following instruments shall, subjectto the exemptions contained in Schedule I-A or I-B, bechargeable with duty of the amount indicated in ScheduleI-A or I-B or as the proper duty therefore, respectively, thatis to say-

(aa) every instrument mentioned in Schedule I-A orI-B, which, not having been previouslyexecuted by any person, was executed inUttar Pradesh :

(i) . . . . . . . . . . .

(ii) in the case of instruments mentioned inSchedule I-B, on or after the date on whichthe U.P. Stamp (Amendment) act, 1952comes into force:

(bb) every instrument mentioned in Schedule I-A orI-B, which, not having been previouslyexecuted by any person, was executed outof Uttar Pradesh :

(i) . . . . . . . . . . . . .

(ii) in the case of instruments mentioned inSchedule I-B, on or after the date on which

the U.P. Stamp (Amendment) Act, 1952comes into force and relates to any propertysituated, or any matter or thing done or to bedone in Uttar Pradesh, and is received inUttar Pradesh :

Provided also that no duty shall be chargeable inrespect of :

(i) . . . . . . . . . . . . . .

(ii) . . . . . . . . . . . . . .

Explanation.—Where the amount of duty prescribedin Schedule I-B contains any fraction of a rupee, belowtwenty five paise, or above twenty five paise but below fiftypaise, or above fifty paise but below seventy five paise,or above seventy five paise but below one rupee, theproper duty shall be an amount rounded off to the nexthigher quarter of a rupee, as hereinafter appearing in thesaid Schedule.”

11. Schedule I –B appended to the Stamp Act providesfor the rates of stamp duty in respect of instruments describedthereunder. Article 23 thereof provides for rate of stamp dutyon the ‘conveyance’ as defined by Section 2(10) which are notexempted under Article 62.

Description of instrument Proper stamp duty

23. Conveyance – as defined by Section2(10) not being a Transfer chargedor exempted under No. 62 –

(a) . . . . . . . .

(b) If relating to moveable property –[See item 136 Appendix II] where theamount or value of the consideration

of such conveyance, as set forththerein, does not exceed Rs.1000

and for every Rs.1000 or part thereofin excess of Rs.1,000

Exemption

Assignment of a copy-right formusical works by resident of or firstpublished in India

Explanation :

For the purposes of this Article, in thecase of an agreement to sell animmovable property, wherepossession is delivered before theexecution, or at the time of execution,or is agreed to be delivered withoutexecuting the conveyance, theagreement shall be deemed to be aconveyance and stamp duty thereonshall be payable accordingly:

Provided that the provisions ofSection 47-A shall, mutatismutandis, apply to such agreement:

Provided further that whenconveyance in pursuance of suchagreement is executed, the stampduty paid on the agreement shall beadjusted towards the total dutypayable on the conveyance.

12. The expression ‘document’ is not defined in the StampAct. However, the General Clauses Act, 1897 defines‘document’ as under:-Twenty rupees

Twenty rupees

“S.3(18). – `document’ shall include any matter written,expressed or described upon any substance by means ofletters, figures or marks, or by more than one of thosemeans which is intended to be used, or which may beused, for the purpose of recording that matter.”

13. Under Section 2(10), inter alia, every document bywhich movable property is transferred is ‘conveyance’. Doesthe contract of sale for crude resin entered into between theparties amount to transfer of movable property? In our opinion,it does. In the contract under consideration, all essentialconditions of transfer of movable property are satisfied. By thisdocument right in auctioned lot of crude resin has been createdin favour of the writ petitioner. Correspondingly, the StateGovernment is under obligation to deliver the quantity of cruderesin specified in the document. Pertinently, clause 1(B)provides that resin sold will remain at purchaser’s risk from thedate of acceptance of its bid and seller will not be responsiblefor any loss and damage which may occur thereto from anycause whatsoever. The document read as a whole leaves nomanner of doubt that property in the auctioned lot of crude resinvested in the purchaser as a result of the subject contract and,thus amounts to transfer of movable property. Even if thedocument dated March 24, 2001 is treated as an agreementto sell, in view of the acceptance letter dated April 7, 2001whereby the writ petitioner has been informed that publicauction is accepted in its name and that it must arrange forlifting of the auctioned resin within 60 days from the issuanceof this letter, it is very clear that the contract of sale dated March24, 2001 read with the letter dated April 7, 2001 amounts to‘conveyance’ within the meaning of Section 2(10) and ischargeable to stamp duty under Article 23, Schedule I-B asadmittedly there is no exemption from payment of stamp dutyin respect of such conveyance under Article 62.

14. It is true that the contract document dated March 24,2001 records the receipt of Rs. 39,000/- as security from the

purchaser for due fulfillment of all the covenants but a clauselike this does not make it a ‘Security Document’ as held by theDivision Bench in the impugned order.

15. The Division Bench travelled beyond scope of reviewin reviewing the judgment dated April 13, 2004. In our view, theview taken in the judgment dated April 13, 2004 did not sufferfrom any error apparent on the face of the record justifying itsreview.

16. The appeals are, accordingly, allowed and theimpugned judgment dated December 27, 2007 is set aside.The parties shall bear their own costs.

D.G. Appeal allowed.

SUPREME COURT REPORTS [2010] 12 S.C.R.[2010] 12 S.C.R. 1125 1126

HARI CHAND ROACHv.

HEM CHAND AND ORS.(Civil Appeal No. 432 of 2002)

OCTOBER 28, 2010

[DALVEER BHANDARI AND DEEPAK VERMA, JJ.]

Partition – Hindu joint family property – Family settlement– Widow inheriting 1/3rd undivided share of her deceasedhusband in two joint family properties – Family arrangementbetween widow and her brothers-in-law – Widow relinquishingher share and instead taking shares of her brothers-in-law –Widow and her daughter selling the said property – Sale deed– Challenge to, by brothers-in-law – Held: By virtue of thefamily arrangement, widow and her daughter became absoluteowner of the said property and had full right to dispose of thesaid property – It cannot be said that they had no pre-existingright in the said land – Property was sold for considerationand the sale was valid – Hindu Law.

The three brothers - ‘HR’, ‘K’ and ‘D” inherited anundivided share in two joint family properties at places‘CN’ and ‘CK’. ‘HR’ expired and his wife ‘J’ inherited 1/3rdof the undivided shares of ‘HR’ at places ‘CN’ and ‘CK’.‘J’ gifted part of the properties at place ‘CN’ in favour ofher daughter’s son. Thereafter, ‘J’ entered into a familyarrangement with her brothers-in-law-‘K’ and ‘D’. In termsthereof, she relinquished her share at place ‘CK’ andinstead took shares of ‘K’ and ‘D’ in properties at place‘CN’. ‘J’ and ‘DB’-daughter of ‘J’ then sold certain

properties to the appellant. ‘K’ and ‘D’ filed a suit forpossession and declaration that the sale deed was void.The trial court dismissed the suit. In appeal, the orderpassed by the trial court was upheld. In the secondappeal, the Single Judge of the High Court held that ‘J’and ‘DB’ had no pre-existing right in the said land.Therefore, the appellant filed the instant appeal.

HELD: 1.1 It is clear from all the documents andpleadings that because of the family arrangement, ‘J’ and‘DB’ became the absolute owners of the land at place‘CN’, measuring 36 Bighas and 6 Biswas. They later onrelinquished their undivided shares in ‘CK’ measuring 103Bighas and 3 Biswas. The Single Judge of the High Courtdecided the second appeal preferred against thejudgment of the District Judge on basis of the pleadingsand the documents on record. But unfortunately theSingle Judge observed that ‘J’ and ‘DB’ had no pre-existing right in the land in dispute and because of thesaid finding the Single Judge arrived at absolutely wrongconclusion. Thus, the said finding is set aside. [Para 13,17] [1134-A; 1135-G-H]

1.2 ‘J’ inherited the estate of her husband ‘HR’ on hisdeath in the year 1954. She had undivided shares at place‘CN’ and at place ‘CK’. By a family arrangement, ‘J’relinquished her share at place ‘CK’ and instead, she tookthe share of her brothers-in-law ‘K’ and ‘D’ at place ‘CN’.Thus, ‘J’ and ‘D’ became full owner of the land at place‘CN’ and, consequently, had full right to dispose of the

1127 1128HARI CHAND ROACH v. HEM CHAND AND ORS.

said property. They had sold the property at place ‘CN’to the appellant. The property was sold for considerationand in good faith. Thus, on consideration of the totalityof the facts and circumstances of the case, the impugnedjudgment of the High Court cannot be sustained and isset aside. [Paras 18 and 19] [1136-A-C]

From the Judgment & Order dated 26.7.2000 of the HighCourt of Himachal Pradesh at Shimla in Second AppealR.S.A.No. 75 of 1993.

C.U. Singh, Dharmesh Misra, Tara V. Ganju, Akansha,Ritesh Sharma (for Pradeep Kumar Bakshi) for the Appellant.

Ashok Kumar Chhabra, Alok Prakash (for MadhuMoolchandani) for the Respondents.

DALVEER BHANDARI, J. 1. This appeal emanates fromthe judgment of the High Court of Himachal Pradesh at Shimladelivered on 26th July, 2000 in Regular Second Appeal No.75of 1993.

2. Brief facts which are necessary to dispose of this appealare recapitulated as under.

3. In order to properly comprehend the inter se relationshipof the parties, the Genealogycal family tree is reproducedherein.

3 Parcels – Undivided

| | |HARI RAM KHARIA DELU (Died 1954) (Living n Kaljer) (Living in Shoongra)(Living in Soonthi | till death) |

| || |

JAMNI, wife, HEMCHAND(Living in Soonthi (Son) till death)

| | DEVUKU SANGMA (Daughter) (Daughter) died young

| | | |JEET RAM SANT RAM FULGNA DEVI VIDYAWATI(Son) (Son) (Daughter) (Daughter)

4. Admittedly, Hari Ram, Kharia and Delu were brothersand they inherited an undivided share in the two joint familyproperties, one situated at Chak Nani measuring 55 Bigha 2Biswas and the other situated Chak Kaljer, measuring 103Bigha 10 Biswas.

5. Hari Ram died in 1954 without any male issue and hewas survived by his widow Jamni and daughter Debku. Afterthe death of Hari Ram, Jamni inherited the entire share of Hari

1129 1130HARI CHAND ROACH v. HEM CHAND AND ORS.[DALVEER BHANDARI, J.]

Ram in both the Chaks and consequently mutation was carriedout in her name in the year 1955.

6. Jamni, wife of Hari Ram, gifted 18 Bigha 3 Biswas ofland at Chak Nani in favour of Jeet Ram, her grandson (son ofher daughter) vide a registered deed on 17.10.1958, leavingbalance of 36 Bigha 6 Biswas of land at Chak Nani. It may berelevant to mention here that the gift deed clearly stated thatshe had given it to Jeet Ram and his wife because they hadtaken good care of her.

7. Jamni filed an application for partition of the land in ChakKaljer against her two brothers-in-law Kharia and Delu. Acompromise was arrived at between them on 13.11.1963. Asper the compromise, an oral gift was made by Jamni to HemChand son of Kharia by which she gifted 40 Bigha 10 Biswasof land at Chak Kaljer. As per the settlement dated 4.6.1964between the parties, Jamni received 36 Bigha 6 Biswas of landat Chak Nani. Approximately 36 Bigha of land was exchangedas per the family arrangement between the parties. Jamni andher daughter Debku were shown as the owner in possessionof the Jamabandi record of rights.

8. The appellant Hari Chand Roach purchased 36 Bigha6 Biswas of land from Jamni and Debku for a consideration ofRs.40,000/- by a registered sale deed on 22.6.1979. Rs.9,000/- was paid at the time of giving possession of the land and thebalance amount of Rs.31,000/- was paid in the presence ofSub Registrar and other witnesses.

9. Kharia and Delu filed a suit on 12.7.1979 for declarationand possession and prayed that the sale deed be declaredvoid. The Trial Court i.e. the Court of Sub Judge, 1st Class,Theog, vide its judgment dated 31.12.1987 dismissed the suitholding that Jamni and Debku had a limited interest in theestate. Against the judgment of the Trial Court, appeals werefiled by both the parties before the District Judge. The learned

District Judge partly allowed the appeal of the present appellanton 15.12.1992 and dismissed the appeal filed by therespondent herein. The Trial Court judgment was affirmed bythe learned District Judge.

10. The learned District Judge has dealt with the aspectof family arrangement in great detail in paragraph 3 of herjudgment, which reads as under:

“Defendants Smt. Jamni and Debku as well as defendantHem Chand contested the suit. Defendants Smt. Jamniand Debku in their joint written statement raised manifoldpreliminary objections. Firstly according to them the suitwas not properly valued for purposes of court fee andjurisdiction and secondly that the plaintiffs cannot claimrelief of possession without raising the necessarypleadings as the plaintiffs have no subsisting right to filethe suit. In reply on merits, they described themselves tobe the owner in possession of the disputed land. Thedeceased plaintiffs Kharia and Delu had one more brothernamely Hari Ram who was the husband of deceaseddefendant Jamni and father of defendant Debku. They hadland in two revenue chaks namely Kaljer and Nani althoughin three villages. Villages Kaljer and Shoongra wereforming part of Chak Kaljer while village Soonthi wasforming part of Chak Nani. By way of family arrangementdeceased plaintiff Kharia was living in Chak Kaljer whiledeceased plaintiff Delu and their husband/father (Hari Ram)were living in Chak Nani. On the death of Hari Ram, hisestate devolved upon the replying defendants and themutations were accordingly attested in their favour. Thusthey became the absolute owner and were in possessionof the land qua the share of deceased Hari Ram. In theyear 1962-63 defendant Jamni applied for partition of theland but there was a compromise between the plaintiffs andSmt. Jamni and as per that compromise defendant Jamni

gifted her share in the land in favour of Hem Chand andson of deceased plaintiff Kharia vilde mutation no.115 inChak Kaljer while in return the deceased plaintiffs gave theland to the two defendants namely Smt. Jamni and Debkuin Chak Nani vide mutation No.43 but these mutations arestated to be wrong. Provisions of Section 14(2) of HinduSuccession Act, 1956 (in short called Act) is notapplication to the present case as the two replyingdefendants were the absolute owners of the land and werealso in its possession and accordingly were competent tosell the same in favour of defendant Hari Chand forconsideration. As the sale is valid and legal and as suchafter such sale Shri Hari Chand has become the exclusiveowner of the land and is also in its possession. The saleconsideration is described to Rs.40,000/- which was dulyreceived by them. The plaintiffs never objected to such asale although they had knowledge of it. All other avermentsmade in the plaint have been denied.”

11. The learned District Judge in the concluding portionof her judgment has observed as under:

“Undisputedly Hari Ram, brother of of deceased plaintiffsKharia and Delu was having 1/3rd share in the lands in twoChaks namely Kaljer and Nani and on his death videmutation No.19 and 70 Exts. D8 and D9 respectively, his1/3rd share was inherited by the widow namely deceaseddefendant Smt. Jamni. These two mutations were attestedin the year 1955 and accordingly her name came to beentered in the copies of jamabandies qua 1/3rd share inthe column of ownership and possession along withdeceased plaintiff Kharia and Delu as borne out from thecopy of jamabandi for the year 1954-55 Ext.D6. In the year1956 the Act came into force and obviously in view of theprovisions of Section 6 of the Act daughter and widowbeing the legal heirs of class one were entitled to succeedto the share of deceased Hari Chand in equal share in the

two Chaks. Accordingly, they filed applications for partitionof the land of their respective shares but on 3rd June 1964some settlement was arrived at between the deceasedplaintiffs Kharia and Delu and deceased defendant Smt.Jamni and defendant Smt. Debku as a result of suchsettlement, on 3-6-64 Smt. Jamni orally gifted 1/3rd sharein the land in Chak Kaljer vide mutation No.115 in favourof plaintiff Hem Chand son of deceased plaintiff Khariaand in return the deceased plaintiffs Kharia and Delu got1/3rd share of the land in Chak Nani mutated on the sameday vide mutation No.43 in favour of Smt. Jamni andDebku making them the limited owners of the land. Thetwo mutations dated 3-6-64 are Ext. P10 and P3,respectively. The factum of a settlement having arrivedamongst the deceased plaintiffs and deceased Smt.Jamni is further born out from mutation No.42 Ext. P9 videwhich some of the land stood mutated in favour of JeetRam in whose favour that land was gifted by a verbal giftby Smt. Jamni in the year 1959 vide mutation Ext. D10 inFebruary, 1959.”

12. It may be pertinent to mention here that in the suit filedby Kharia and Delu, a joint written statement was filed by Jamniand Debku – defendant Nos.1 & 2. In the said written statementthey have stated about the family arrangement, which readsunder:

“That by family arrangement the plaintiff Kharia wasand is living in village Kaljer, Shri Delu plaintiff was and isliving in village Shoongra and Shri Hari Ram deceased(the predecessor in interest of the replying defendants) wasliving at village Soonthi till his death. These three brothers,Kharia, Delu and Hari Ram had separate residence, food,worship and cultivation of the land. That on the death ofShri Hari Ram which occurred about 24 years ago, hisestate devolved upon the replying defendants, the mutationNo.19 Chak Nani and mutation No.70 Chak Kaljer about

inheritance were attested in favour of the replyingdefendants. On the death of Shri Hari Ram defendantsbecame the absolute owners in possession of the land quathe share of Shri Hari Ram. That somewhere in 1962 or1963, the replying defendant No.1 applied for partition ofthe land in the Court of A.C. 1st Grade, Theog. In thatpartition application the plaintiffs and the defendant No.1effected the compromise and in pursuance of thatcompromise the parties agreed to partition the landprivately in accordance with the family arrangement andagreed to treat the family arrangement as completepartition between them. This compromise took place in theyear 1963. That in pursuance of that compromise thereplying defendant No.1 agreed to get her as well as thename of defendant No.2 removed from the revenuepapers of villages Kaljer and Shoongra of Chak Kaljer andthe plaintiffs also agreed to get their names removed fromthe revenue papers of village Soonthi of Chak Nani. Theplaintiff Shri Delu had no issue at that time, thus hepreferred to keep his Khata with Kharia plaintiff. Theplaintiffs asked the defendants to attest the mutation infavour of Hem Chand the only son of Shri Kharia plaintiffand thus mutation No.115 Chak Kaljer was entered andattested in favour of Hem Chand. The mutation No.115showing the gift of the land is wrong and contrary to facts.The plaintiffs in pursuance of the compromise also attestedmutation No.43 Chak Nani in favour of the replyingdefendants. That in that the mutation No.43 Chak Nani andmutation No.115 Chak Kaljer were relating to privatepartition. The mutations were effected with a view to giveeffect to the private partition.

In the alternative, if the mutation No.43 Chak Naniand mutation No.115 Chak Kaljer are not treated asmutations of private partition, the same be treated asmutations of exchange in which the parties haveexchanged the lands of their exclusive ownership. It is thus

wrong and denied that the defendants No.1 & 2 were givenonly limited rights.”

13. It is clear from all these documents and pleadings thatbecause of the family arrangement, Jamni and Debku becamethe absolute owners of the land at Chak Nani, measuring 36Bigha 6 Biswas. They later on relinquished their undividedshares in Chak Kaljer measuring 103 Bigha 3 Biswas. Asecond appeal was preferred against the judgment of thelearned District Judge before the High Court of HimachalPradesh at Shimla. Learned Single Judge of the High Courtdecided the second appeal and aptly observed as under:

“From the oral testimony of plaintiff No.1 Hem Chandcorroborated by PW-2 Mast Ram, PW-3 Narayan Singhand PW-4 Puran, it stands clearly proved that Smt. Jamanihad inherited estate of her husband Hari Ram to the extentof 1/3rd share out of the total shares.”

14. Similarly, at Page 17 of the judgment the learnedSingle Judge observed as under:

“After family settlement, when Smt. Jamani approachedKharia and Delu, they gladly accepted her request to partwith their respective shares of the land in mauja Nani whichis the subject matter of the controversy.”

15. The learned Single Judge also observed as under:

“From the entire oral and documentary evidence led by thepatties, it stands proved that the land in dispute fell in theshares of Kharia and Delu predecessors-in-interest of theplaintiffs after the family settlement was arrived at betweenthem and Smt. Jamani widow of Hari Ram. It is an admittedcase of the parties that after the death of Hari Ram hisentire estate was inherited by his widow Smt. Jamani. Thisfact stands proved on record from copies of mutationsExts.P-4 to P-6 in which it has clearly been shown in the

[ALTAMAS KABIR, J.]

remarks column dated 22.2.1955 and 21.2.1955,respectively, that the estate of Hari Ram had devolvedupon Smt. Jamani and the mutation of inheritance stoodsanctioned in her favour. On careful appraisal andconsideration of these documents, it is proved that afterthe death of Hari Ram his widow Smt. Jamani hadinherited 1/3rd share of her husband and she becameabsolute owner in possession of the estate inherited byher. Copy of mutation No.30 Ex.P-7 would go to show thatSmt. Jamani gifted 1/3rd of her share of the land inheritedby her situated in mauja Nani in favour of Jeet Ram andmutation in respect of the said land was sanctioned by therevenue official on 21.3.1959. Again Smt. Jamani gifted1/3rd of her share to Hem Chand, plaintiff No.1 of the landsituate in mauja Kaljer and mutation of the said land cameto be attested in his favour by the revenue authority on3.6.1964, vide copy marked as Ext.P-10 on the record.Thus, the documents relied upon by the parties wouldclearly prove that after becoming absolute owner of theshare of her husband, Smt. Jamani had gifted her sharein favour of Jeet Ram and plaintiff No.1 in the year 1959and 1964.”

16. In our considered view, it is not necessary to examinethe applicability of Sections 14(1) and 14(2) of the HinduSuccession Act, 1956 in the facts and circumstances of thiscase.

17. All the above quoted observations of the learnedSingle Judge of the High Court are based on the pleadings andthe documents on record. But unfortunately at page 22 of thejudgment, the learned Single Judge observed that Jamni andDebku had no pre-existing right in the land in dispute andbecause of this finding, the learned Single Judge has arrivedat absolutely wrong conclusion. Consequently, this finding is setaside.

18. We are clearly of the view that Jamni inherited theestate of her husband Hari Ram on his death in the year 1954.She had undivided shares in Chak Nani and Chak Kaljer. Bya family arrangement, Jamni had relinquished her share inChak Kaljer and instead, she took the share of her brothers-in-law Kharia and Delu in Chak Nani. Thus, Jamni and Debkubecame full owner of the Chak Nani and consequently had fullright to dispose of the said property at Chak Nani. They hadsold the property (at Chak Nani) to the appellant herein. Theproperty was sold for consideration and in good faith.

19. On consideration of the totality of the facts andcircumstances of this case, the impugned judgment of the HighCourt cannot be sustained and consequently the same is setaside. The appeal is accordingly allowed, leaving the partiesto bear their own costs.

N.J. Appeal allowed.

1138[2010] 12 S.C.R. 1137

SATYA NARAYANA TIWARI AND ANR.v.

STATE OF U.P.(Criminal Appeal No. 1168 of 2005)

OCTOBER 28, 2010

[MARKANDEY KATJU AND GYAN SUDHA MISRA, JJ.]

PENAL CODE, 1860:

ss. 304-B and 498-A IPC and s. 4 of Dowry ProhibitionAct – Dowry death – Circumstantial evidence – Bride died ofstrangulation and burn injuries in her matrimonial home –Husband and mother-in-law of deceased charged with theoffences – Acquittal by trial court – Conviction by High Court– Held: Trial judge recorded acquittal adopting a superfluousapproach without in-depth analysis of the evidence andcircumstances established on record – He proceeded onwrong premise and irrelevant considerations –The ingredientsof s. 304-B have been established – The presumption u/s113-B of Evidence Act is attracted and the accused could notdisplace the same – The prosecution has established that theaccused committed the offences – Findings of High Courtupheld – Dowry Prohibition Act, 1961 – s. 4 – Evidence –Circumstantial Evidence – Evidence Act, 1872 – s. 113-B.

s. 304-B – Ingredients – Explained – Expression ‘soonbefore her death’ – Connotation of – Proximity Test.

Administration of criminatl justice – Framing ofappropriate charge –Dowry death – Bride strangulated andburnt to death by her husband and mother-in-law as theirdemand for dowry was not fulfilled – Held: It was a case u/s302 but no charge under that section was framed – Suchcases of bride burning fall in the category of rarest of rarecases and, therefore, deserve death sentence – However,

conviction and sentence u/ss 304-B and 498-A upheld – PenalCode, 1860 – ss. 304-B and 498-A – Code of CriminalProcedure, 1973 – Sentence/Sentencing.

Words and Phrases:

Expressions ‘soon before her death’ as occurring in s.304-B IPC; and ‘rarest of rare cases’ in the context of dowry deaths– Connotation of.

A bride, aged about 24 years, died of strangulationand burn injuries in her matrimonial home, within threeyears of her marriage. The father of the deceased statedin the FIR that dowry was being demanded from him andit was insisted that a Maruti car be part of the dowry. Thetrial court acquitted the accused, namely, the husbandand the mother-in-law of the deceased, but the High Courtconvicted them u/ss 304-B and 498-A IPC and s.4 of theDowry Prohibition Act, 1961. Aggrieved, the accused filedthe appeal.

HELD: 1.1 As has been held by the Apex Court in thecase of Kunhiabdulla* , in order to attract application ofs.304B IPC, the essential ingredients are : (1) The deathof a woman should be caused by burns or bodily injuryor otherwise than in normal circumstances; (2) such adeath should have occurred within seven years of hermarriage; (3) She must have been subjected to cruelty orharassment by her husband or any relative of herhusband; (4) Such cruelty or harassment should be foror in connection with demand of dowry; (5) Such crueltyor harassment is shown to have meted out to the womansoon before her death. [para 16] [1149-E-H; 1150-A]

*Kunhiabdulla Versus State of Kerala 2004 (2 ) SCR 853 = 2004 (4) SCC 13 – referred to.

1139 1140SATYA NARAYANA TIWARI AND ANR v. STATE OFU.P.

1.2 As generally happens in a crime of dowry death,this case is also based on circumstantial evidence. Asregards ingredients No. 1 and 2, it is an admitted fact thatthe deceased, as indicated in the post mortem report, diedotherwise than in normal circumstances, and that thedeath had occurred within seven years of her marriagein her ‘Sasural’ in her bedroom. [para 17] [1150-B-C]

1.3 As regards ingredients No. 3, 4 and 5, the relevanttestimony is contained in the statements of the deceasd’sfather PW 1 and PW 2 (son-in law of PW-1). Theirtestimony is quite credible regarding the illegal demandof a Maruti Car in dowry by the two accused, namely, thehusband and the mother-in-law of the deceased, sinceafter six months of the marriage and that they subjectedher to harassment, maltreatment and humiliation on non-fulfilment of the said demand. It goes without saying thatcruelty or harassment may not only be physical but alsomental. [para 18 and 20] [1150-E; 1152-A-C]

1.4 As has been held by this Court in Kunhiabdullah,‘soon before’ is a relative term and it would depend uponthe circumstances of each case and no strait-jacketformula can be laid down as to what would constitute aperiod of ‘soon before the occurrence’. It would behazardous to indicate any fixed period and that brings inthe importance of a proximity test both for the proof ofan offence of dowry death as well as for raising apresumption u/s 113-B of the Evidence Act. The instantcase fully answers the test of ‘soon before’. There is thetestimony of demand of Maruti Car being pressed by thetwo accused persons after about six months of themarriage of the deceased (which took place about threeyears before the incident) and of her being pestered,nagged, tortured and maltreated on non-fulfilment of thesaid demand which was conveyed by her to her parentsfrom time to time on her visits to her parental home and

on telephone. Things had reached to such a pass that ongetting a message from her about three months beforethe incident, PW 1 accompanied by PW 2 had to go to her‘Sasural’ in an attempt to dissuade the two accused frompressing such demand, but they (the two accused)humiliated and turned them out of the house with thecommand not to enter their house again without meetingthe demand of a Maruti Car. PW-1did not take any actionon the consolation offered by the father-in-law of hisdaughter and also on the advice of his daughter whichwas quite natural. It, however, cannot be taken to meanthat the demand made by the two accused persons hadsubsided or was given up by them. It can justifiably beinferred from what happened subsequently that theycontinued to torture the unfortunate lady because of non-fulfilment of the demand of Maruti Car. The test of ‘soonbefore’ is satisfied in the facts, evidence andcircumstances of the instant case. [para 24 and 26] [1153-G-H; 1154-F-H; 1155-A-D]

Kunhiabdulla Versus State of Kerala 2004 (2 ) SCR 853 = 2004 (4) SCC 13 – distinguished.

1.5 Indeed, the prosecution could not be expected tobring forth any other evidence as to the persistentdemand of dowry in the form of Maruti Car by the twoaccused after about six months of the marriage andmaltreatment, harassment and torture heaped upon thedeceased by the two accused on non-fulfilment of thesaid demand. The evidence on this aspect of the matteras contained in the statements of PW 1 and PW 2 has thenatural aura of the truth. [para 22] [1153-B-C]

1.6 Thus, ingredients No. 3, 4 and 5 for attraction ofs. 304B IPC, are also established by satisfactory evidenceadduced by the prosecution in the form of the testimonyof PW 1 corroborated by PW 2. [para 27] [1155-E]

1.7 There is an important feature of the case. Only thehusband and mother-in-law of the deceased have beenaccused of the offences in question. Besides them, therewere three other family members i.e., the father ofaccused No. 1 and husband of accused No. 2 and twodaughters. PW 1 has described father-in-law of thedeceased as a gentleman. He has all the respect andregard for him. Even when he had been humiliated by thetwo accused about three months before the incident onexpressing his inability to meet their demand of MarutiCar in dowry, he (PW1) had gone to him at hisemployment place in State Bank and had not taken anyaction on the consolation offered by him. He mentionedthis fact in the FIR too. The circumstance that only thehusband and mother-in-law of the deceased have beenmade accused of the offence, sparing the other three, isan indication that father of the deceased has not actedout of malice, anger or to wreak vengeance. [para 22][1152-F-H; 1153-A-C]

1.8 The recovery memoes Ex.Ka-10 (with regard toblood and blood stained bindia) and Ka-11 (regardingbroken bangles) were not challenged in the cross-examination of PW 5, (the T ehsildar Magistrate) or PW 6(the SI), who prepared them. These recoveries amplyindicate that the deceased had been subjected to violencein her bedroom and she had succeeded in coming outon the ‘Chhajja’ (balcony) to save herself. Not only this,the presence of burnt cordless phone stuck in the armand the burnt wire of phone with the dead body indicatesthat she had tried to contact someone on phone, but invain. There is nothing to cast a doubt on the saidrecoveries. [para 30] [1156-F-H; 1157-A-B]

1.9 The theory of suicide put forth by the defencecompletely falls through on careful analysis of theevidence and the attending circumstances. Two different

types of injuries found on the dead body of the deceased,i.e., the ligature mark of large dimension and the bodybeing badly burnt because of the ante mortem burns withsmell of kerosene coming out of the body, completelyrule out the theory of suicide. A half-burnt piece of clothwith a knot was also found tied around the neck. It is alsoto be taken note of that her body was found by theInvestigating Officer in the lonely corner of the bedroomwhere she was rendered immobile and in a helpless state.[para 34] [1158-F-H; 1159-A-C]

1.10 This Court records with dismay that the trialjudge has taken it to be a ground against the prosecutionthat the knot found around the neck of the deceased wasnot produced before the court. It is obvious that hecompletely misinterpreted the matter relating to the knotand took it as a circumstance against the prosecution.While conducting the post mortem, the knot foundaround the neck of the deceased was untied andremoved so as to facilitate the post mortem. Therefore,there could be no question of the knot bring producedbefore the court. [para 37] [1160-B-E]

1.11 On a close scrutiny and careful appreciation ofthe evidence, this Court is of the firm view that the trialjudge wrongly accepted the plea of alibi put forth by thetwo accused persons to get away from theconsequences of the serious crime committed by them.Their conduct also voluminously spoke against them. Asa matter of fact, only these two accused had anopportunity to commit the offence. The father-in-law ofthe deceased having gone to the place of hisemployment and the two daughters, including DW 1,having gone to their educational institution, the twoaccused persons only (husband and mother-in-law of thedeceased) had the opportunity to commit this crime

experts who had already gathered at the scene ofoccurrence along with Advocate-uncle of the accused,DW 2 – Advocate, and few other lawyers; whereas fromthe testimony of DW 2, it is evident that the news of thedeath of the victim was received in the District court at11.30 A.M. itself, i.e., much before the lodging of the reportby the accused. [para 39] [1161-H; 1162-A-F]

1.13 The presumption of s.113-B of the Evidence Actis attracted in this case and the facts and circumstancesof the case make it abundantly clear that the defencecould not displace the said presumption. The culpabilityof the two accused in committing the crime is establishedto the hilt by the facts and circumstances proved by theprosecution. They undoubtedly are the authors of thiscrime. The irresistible conclusion is the demand of MarutiCar raised by the two accused after about six months ofthe marriage persisted as it was not settled by the fatherof the deceased by supplying the same. The prosecutionhas successfully proved the persistent demand of MarutiCar as a part of dowry by the two accused andcontinuous cruelty and harassment heaped upon thedeceased by them over this score. The accused areestablished to have committed the offences punishableu/ss. 498-A and 304 B IPC and u/s 4 of Dowry ProhibitionAct and the findings of the High Court are correct. [para41 and 43] [1163-C-F; 1164-E-F]

2. Crimes against women are not ordinary crimescommitted in a fit of anger or for property. They are socialcrimes. They disrupt the entire social fabric. Hence, theycall for harsh punishment. In the instant case, as hasbeen established from the medical evidence, the death ofthe victim was caused by strangulation and then byburning. In fact, it was a case u/s 302 IPC and deathsentence should have been imposed in such a case, but

inside the bedroom of the deceased. The manner inwhich the deceased was done to death, i.e., by firststrangulating her and then setting her afire, needed atleast two persons, because she was also a young ladyaged about 24 years. A single person could not havepossibly overpowered her to strangulate her and to sether afire. As a natural instinct, she was bound to offerresistance and having regard to the two types of theinjuries found on her person at the time of post mortem,it was the handiwork of at least two persons, whoundoubtedly were the husband and the mother-in-law.The conduct of the mother-in-law of the deceased wasthat she, in order to misguide the machinery of lawthrough false plea of alibi, lodged a false information atthe Police Station at 1.10 P.M. that her daughter-in-law hadcommitted suicide. She had taken a false excuse tosupport her baseless plea of alibi of herself as also herson, the husband of the deceased. [para 38] [1160-E-H;1161-A-D-G]

1.12 The interested testimony of DW 1 also cannotbe believed that her brother accused No. 1, the husbandof the deceased, had gone to his shop at about 8 P.M.After committing the crime, the two accused vanishedfrom the scene, but before doing that, one of them, (the -mother-in-law of the deceased) lodged a false report atthe police station that her daugther-in-law had committedsuicide. It is in the testimony of PW 7 (C.O/InvestigatingOfficer) that the accused-husband surrendered in courton 7.11.2000 and the mother-in-law on 13.11.2000. Earlierthereto, the attempts to find and arrest them turned to befutile. None of the two accused is witness of the inquestreport or Fards. Absconding by both of them after theincident cannot be termed to be normal conduct ofinnocent persons. The report by the accused was givenat the Police Station at 1.10 P.M. on 3.11.2000. It was theoutcome of deliberation and consultation with legal

since no charge u/s 302 IPC was levelled, this Courtcannot do so, otherwise, such cases of bride burning fallin the category of rarest of rare cases, and deserve deathsentence. Although bride burning or bride hanging caseshave become common in our country, the expression“rarest of rare” as referred to in Bachan Singh’s case*does not mean that the act is uncommon, it means thatthe act is brutal and barbaric. Bride killing is certainlybarbaric. [para 7-10 and 12] [1147-A-G; 1148-D]

*Bachan Singh Vs. State of Punjab AIR 1980 SC 898 –referred to.

Case Law Reference:

AIR 1980 SC 898 referred to para 8

2004 (2) SCR 853 distinguished para 16 and 24

CRIMINAL APPELLATE JURISDICTION : CRIMINALAPPEAL No. 1168 of 2005.

From the Judgment & Order dated 12.07.2005 of the HighCourt of Judicature at Allahabad in State Appeal No. 5570 of2003.

Indu Malhotra, Rajesh and Vivek Jain for the Appellants.

K.T.S. Tulsi, Shail Kr. Dwivedi, AAG, R.K. Gupta, PradeepMisra, Suraj Singh, Vandana Mishra, Anurag Dubey, MeeneshDube, Ravinder Singh and S.R. Setia for the Respondent.

The following order of the Court was delivered

O R D E R

1. Heard learned counsel for the parties.

2. The hallmark of a healthy society is the respect it showsto women.

3. Indian society has become a sick society. This isevident from the large number of cases coming up in this Court(and also in almost all courts in the country) in which youngwomen are being killed by their husbands or by their in-lawsby pouring kerosene on them and setting them on fire or byhanging/strangulating them. What is the level of civilsation of asociety in which a large number of women are treated in thishorrendous and barbaric manner? What has our societybecome – this is illustrated by this case.

4. This Appeal has been filed against the impugnedjudgment and order of the Allahabad High Court dated12.07.2005.

5. The facts of the case are that Geeta (deceased) wasmarried to the appellant No. 1 Satya Narayan Tiwari @ Jollyon 9th December 1997. On 03.11.2000 an FIR was lodged bythe father of the deceased Surya Kant Dixit alleging that dowrywas being demanded from him and the accused was insistingthat a Maruti car be part of the dowry. He further stated thatthree months before the date of the incident the first informantalong with his relative went to the house of the accused andexplained his financial difficulty in giving the Maruti car to theaccused but they were insulted by the accused and were toldto get out.

6. On 03.11.2000 at about 12 noon the first informantreceived information on telephone that his daughter had died.The FIR was lodged as stated above and after investigation acharge sheet was filed. The appellants - the husband andmother-in-law of the deceased - were acquitted by the trial courtbut the High Court convicted them under Sections 304B, 498-A IPC and Section 4 of the Dowry Prohibition Act and awardedlife sentence under Section 304B IPC, 3 years rigorousimprisonment under Section 498A, and six months rigorousimprisonment under Section 4 of the Dowry Prohibition Act. Thesentences were to run concurrently.

7. We have carefully perused the impugned judgment andorder of the High Court and the judgment of the trial court andother evidence on record. We see no reason to disagree withthe judgment and order of the High Court convicting theappellants. In fact, it was really a case under Section 302 IPCand death sentence should have been imposed in such a case,but since no charge under Section 302 IPC was levelled, wecannot do so, otherwise, such cases of bride burning, in ouropinion, fall in the category of rarest of rare cases, and hencedeserve death sentence.

8. Although bride burning or bride hanging cases havebecome common in our country, in our opinion, the expression“rarest of rare” as referred to in Bachan Singh Vs. State ofPunjab, AIR 1980 SC 898 does not mean that the act isuncommon, it means that the act is brutal and barbaric. Bridekilling is certainly barbaric.

9. Crimes against women are not ordinary crimescommitted in a fit of anger or for property. They are socialcrimes. They disrupt the entire social fabric. Hence, they callfor harsh punishment. Unfortunately, what is happening in oursociety is that out of lust for money people are often demandingdowry and after extracting as much money as they can they killthe wife and marry again and then again they commit the murderof their wife for the same purpose. This is because of totalcommercialization of our society, and lust for money whichinduces people to commit murder of the wife. The time hascome when we have to stamp out this evil from our society, withan iron hand.

10. In the present case, there was a post mortem done bya committee of three Doctors. We have perused the postmortem report. In that report ante mortem injuries werementioned as under :-

“1. Ligature mark around the neck, 31x7 cms. Baseslightly grooved with dark red. On cut section-tissue

ecchymosed a tracheal ring compresses. Clotted bloodunder soft tissue.

2. Superficial to deep burn all over body. Blisteredat places present. On cut section serus fluid present.”

11. The cause of the death in that report was mentionedin the following terms :-

“Opinion as to cause and manner of death : In my opinioncause of death is suffocation with shock as a result ofstrangulation with simultaneous A/M burn.”

12. Thus, in this case the death of the deceased Geetawas caused by strangulation and then by burning. It isimpossible for us to believe that this was a case of suicide. Itwas a clear case of murder and hence charge under Section302 IPC should have been levelled against the appellants butsurprisingly enough that has not been done in this case.

13. On the evidence on record which we are repeatinghere again, we see no reason to disagree with the view takenby the High Court.

14. The deceased was aged about 24 years and about½ day had passed since she died when post mortem wasdone. She was of average build. Eyes and mouth were partlyopen. Tongue was between the teeth. The body had pugilisticappearance. Smell of kerosene was present. Rigor mortis wasalso present. There was a half burnt cloth around the neck withknot half burnt. Half burnt bed sheet and other clothes as alsoa half burnt wire mingled with burnt clothes were found. A burntcordless phone was also found.

15. At the trial, the prosecution examined seven witnesses.Surya Kant Dixit PW 1 was the father of the deceased andmaker of the F.I.R. who as well as his relative Jaideo AwasthiPW 2 gave evidence about the demand of Maruti Car by theaccused respondents since after six months of marriage and

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about the demand of Maruti Car being repeated and pressedby both the accused, when both of them had gone to theSasural of the deceased and had been turned out by the twoaccused after being insulted on their expressing inability tomeet the demand of a Maruti Car. Dr. R.K. Singh PW 3 statedthat he was included in the panel of doctors conducting theautopsy on the dead body of the deceased and he proved thepost mortem report. Head Constable Mohar Pal Singh PW 4had scribed the check report on the basis of the FIR lodgedby Surya Kant Dixit PW 1. Shir Bahadur Singh PW 5, Tehsildarof Tehsil Farrukhabad prepared the inquest report of the deadbody of the deceased and other related papers. S.I.Ghanshyam Gaur PW 6 had collected bloodstains etc., fromthe spot at the instance of Shiv Bahadur Singh PW 5 and CircleOfficer D.P.N. Pandey PW 7 was Investigating Officer of thecase. The defence also examined three witnesses. VidushiTiwari DW 1 was the real sister of the husband of the deceased.Devendra Misra DW 2 and Sushil Kumar Misra DW 3 werenon-family members of the two accused.

16. As held by the Apex Court in the case of KunhiabdullaVersus State of Kerala, 2004 (4) SCC 13, in order to attractapplication of Section 304B IPC, the essential ingredients areas follows :

1. The death of a woman should be caused byburns or bodily injury or otherwise than innormal circumstances;

2. such a death should have occurred withinseven years of her marriage;

3. She must have been subjected to cruelty orharassment by her husband or any relativeof her husband;

4. Such cruelty or harassment should be for orin connection with demand of dowry;

5. Such cruelty or harassment is shown to havemeted out to the woman soon before herdeath.

17. As generally happens in a crime of dowry death, thiscase is also based on circumstantial evidence. As regardsingredients No. 1 and 2 of a crime of dowry death detailedabove, it is an admitted fact that the deceased Geeta diedotherwise than in normal circumstances vide her post mortemreport and that the death had occurred within seven years ofher marriage in her Sasural in the bedroom. As per theprosecution case, she had been married to the accusedrespondent No. 1- Satya Narain Tewari alias Jolly about threeyears before this incident occurring on 3.11.2000. Even VidushiTiwari DW 1, sister of the husband of the deceased inparagraph 2 of her statement said that the deceased Geetawas married to her brother Satya Narain Tiwari alias Jolly on9.12.1997. Thus, her unnatural death in her Sasural occurredwithin three years of her marriage.

18. As regards ingredients No. 3, 4 and 5, the relevanttestimony is contained in the statement of the deceasd’s fatherSurya Kant Dixit PW 1 and Jaideo Awasthi PW 2 (son-in lawof Bua of Surya Kant). Both of them have deposed about thepersistent demand of Maruti Car in dowry by the accusedpersons (husband and mother-in-law of the deceased) sinceafter six months of the marriage and harassment/maltreatmentof the deceased over the score of non-fulfilment of the saiddemand. The gist of the testimony of Surya Kant Dixit PW 1was that he had performed a decent marriage spending Rs. 4Lacs giving household goods in dowry but after six months ofthe marriage, the two accused started torturing his daughterGeeta pressing for the demand of a Maruti Car. On her visitsto her parental house, she (deceased) used to narrate to him(this witness) her torture and maltreatment. She had alsoinformed him in this behalf on telephone. About three monthsbefore the incident, he and Jaideo Awasthi had gone to

SHARMA, J.]

SATYA NARAYANA TIWARI AND ANR v. STATE OFU.P.

1151 1152

Geeta’s Sasural at Farrukhabad on getting message fromGeeta about the atrocities of the two accused heaped upon herrendering her life miserable because of non-fulfilment of thedemand of Maruti Car. Both the accused were there at theirhome at Farrukhabad and repeated the demand of Maruti car.On his expressing inability to meet this demand, he and JaideoAwasthi were insulted and humiliated and turned out of thehouse. Both the accused told them not to visit their house againwithout meeting their demand of a Maruti Car. Surya Kant DixitPW 1 then went to Geeeta’s father-in-law at the place of hisemployment-State Bank because he was a gentleman. Heapprised him of the conduct of his wife and son (accused)pressing the demand of Maruti Car. He, however, offeredconsolation, Geeta, daughter of Surya Kant Dixit DW 1, alsoadvised him not to take any action and he went away. Thevictim might have thought that making of FIR by her father atthat juncture would ruin her matrimonial life and so she advisedhim not to take any legal step at that time.

19. Then he received a telephonic message from someoneat about 12 O’clock in the noon on the day of incident aboutthe death of his daughter Geeta in her Sasural at Farrukhabad,he at once rushed from Mainpuri to Farrukhabad covering adistance of about 80-85 km. Reaching the Sasural of hisdaughter he found her dead in the bedroom of the first floor ofthe house.

20. Jaideo Awasthi PW 2 has corroborated the statementof Surya Kant Dixit PW 1 in all the essential particulars. He hadaccompanied Surya Kant Dixit PW 1 about three monthsbefore the incident to the Sasural of Geeta as related abovewhile giving the gist of testimony of Surya Kant Dixit PW 1 andthereafter on the day of the incident on the receipt of telephonicmessage at about 12 O’clock at noon. It is pertinent to statethat this witness used to reside in Mainpuri in a separateportion of the house of PW 1. He being a close relative of SuryaKant Dixit PW 1, it is quite believable that he had acquired

knowledge of the persistent demand of Maruti Car by theaccused on Geeta’s visits to her parental house and he hadalso accompanied PW 1 to her Sasural three months beforethe incident as also on the day of the incident. The testimonyof Surya Kant Dixit PW 1 and Jaideo Awasthi PW 2 is thusquite credible regarding the illegal demand of a Maruti Car asin dowry by the two accused since after six months of themarriage and that they subjected her to harassment,maltreatment and humiliation on non-fulfilment of the saiddemand. It goes without saying that cruelty or harassment maynot only be physical but also mental.

21. There is an important feature of the case. In the presentcase, Surya Kant Dixit PW 1 has described Ghanshyam Tiwari(father-in-law of his daughter) as a gentleman. He has all therespect and regard for him. Even when he was humiliated bythe two accused about three months before the incident on hisexpressing inability to meet their demand of Maruti Car in dowry,he (PW1) had gone to him at his employment place in StateBank and had not taken any action on the consolation offeredby him. He mentioned this fact in the FIR too. It appears thatGhanshyam could not control the disposition of his wife and son(the two accused) and they continued to pursue their greed bytormenting and maltreating the young lady (deceased) to get aMaruti Car in dowry from her parents. She (Geeta) had to paythe price of non-fulfilment of this demand of theirs, losing herlife at their hands.

22. Only the husband and mother-in-law of the deceasedhave been accused of the offences in question. Besides them,there were three other family members i.e., Ghanshyam Tiwari(father of accused No. 1 and husband of accused No. 2), Km.Vidushi DW 1 (sister of the accused No. 1) and Km. Shalini,another unmarried sister of accused No. 2. Such compositionof the family has been related by Vidushi DW1. Thecircumstance that only the husband and mother-in-law of thedeceased have been made accused of the offence, sparing the

1153 1154

other three, is an indication that Surya Kant Dixit (father of thedeceased) has not acted out of malice, anger or to wreakvengeance, as otherwise he would have implicated the entirefamily including the father-in-law of the deceased and twounmarried sisters of the husband of the deceased as is oftendone by the parental side of the bride in a dowry death case.Indeed, the prosecution could not be expected to bring forth anyother evidence as to the persistent demand of dowry in the formof Maruti Car by the two accused after about six months of themarriage and maltreatment, harassment and torture heapedupon her (deceased) by the two accused on non-fulfilment ofthe said demand. The evidence on this aspect of the matteras contained in the statements of Surya Kant Dixit PW 1 andJaideo Awasthi PW 2 has the natural aura of the truth.

23. Learned counsel for the appellants argued that thealleged demand of Maruti Car made after about six months ofmarriage does not answer the test of ‘soon before’ the deathof the deceased. She reasoned that as per the own case ofthe prosecution, there was no interaction between the two sidessince before three mnonths of the death of the deceased whenSurya Kant Dixit PW 1 and Jaideo Awasthi PW 2 had allegdlybeen humiliated and turned out by the two accused from theirhouse with the direction not to come there again without a MarutiCar and that there was no evidence that any such demand wasmade during the period of three months intervening betweenthe alleged incident of turning them out of the house by theaccused and the death of the deceased. The counsel foraccused made reference to the case of Balwant and anotherVs. State of Punjab AIR 2005 SC 1504 to stress the point thatproximity test has to be applied. The argument, in our opinion,cannot be accepted.

24. As held by this Court in Kunhiabdullah and anotherVs. State of Kerala, 2004 (4) SCC 13, ‘soon before’ is arelative term and it would depend upon the circumstances of

each case and no strait-jacket formula can be laid down as towhat would constitute a period of ‘soon before the occurrence’.It would be hazardous to indicate any fixed period and thatbrings in the importance of a proximity test both for the proofof an offence of dowry death as well as for raising apresumption under Section 113-B of the Evidence Act. Thedetermination of the period which can come within the term‘soon before’ is left to be determined by the courts, dependingupon facts and circumstances of each case. Suffice, however,to indicate that the expression, ‘soon before’ would normallyimply that the interval should not be much between theconcerned cruelty or harassment and the death in question.There must be existence of a proximate and live link betweenthe effect of cruelty based on dowry demand and the concerneddeath. If the alleged incident of cruelty is remote in time andhas become stale enough not to disturb the mental equilibriumof the woman concerned, it would be of no consequence.

25. There can be no quarrel with the proposition that theproximity test has to be applied keeping in view the facts andcircumstances of each case. Regarding the aforesaid decision,the facts were somewhat different in that the deceased was notshown to have been subjected to cruelty by her husband for atleast 15 months prior to her death. On the fact of that case, itwas held that Section 304B IPC was not attracted.

26. On the other hand, the present case fully answers thetest of ‘soon’ before’. There is the testimony of demand ofMaruti Car being pressed by the two accused persons afterabout six months of the marriage of the deceased (which tookplace about three years before the incident) and of her beingpestered, nagged, tortured and maltreated on non-fulfilment ofthe said demand which was conveyed by her to her parentsfrom time to time on her visits to her parental home and ontelephone. Things had reached to such a pass that on gettinga message from her about three months before the incident,Surya Kant Dixit PW 1 accompanied by Jaideo Awasthi PW

1155 1156

lying. The said recovery is a pointer that the deceased hadbeen subjected to violence there and there was strugglebtween her and her captors. Such recovery leads to thejustifiable inference that she had received injuries, and bloodhad oozed in drops found at the Chhajja. She was a young ladyof about 24 years of age. The instinct of self preservation isstrongest in all human beings. Seemingly, violence had firstbeen applied to her inside the bedroom by the accused andoffering resistance she had somehow run out to the Chajja(balcony) adjoining the room and the blood dropped there.Another recovery memo Ex.Ka-11 related to the findings insidethe room in which the dead body was found. Amongst them,there were broken pieces of bangles also. With the applicationof force and violence, she was brought back from the Chajja(balcony) to the bedroom where she was done to death. It isnoted from the Panchnama Ex.Ka-6 that the receiver of thetelephone was stuck under the left arm of the deceased andburnt telephone wire was found stuck with the dead body.

29. The post mortem report also makes mention of theburnt wire and burnt cordless phone being found stuck with thedead body along with a half burnt scarf around the neck.

30. The recovery memoes Ex.Ka-10 and Ka-11 had beenprepared by S.I. Ghanshyam Gaur PW 6 at the dictationofShirBahadur singh PW 5. Shir Bahadur Singh PW 5 (TehsildarMagistrate) is a witness to the recovery memoes. Inquest report(Panchayatnama) was prepared by himself. One of thewitnesses of the recovery memoes and Panchnama is KeshavTiwari, advocate uncle of accused No. 1. These recoverieswere not challenged in the cross-examination of Shiv BahadurSingh (Tehsildar Magisttrate) PW 5 or SI Ghanshyam Gaur PW6. These recoveries amply indicate that the deceased had beensubjected to violence in the bedroom and she had succeededin coming out on the Chhajja (balcony) to save herself. The signsof struggle and application of violence in the form of brokenbangles inside the room and the blood and bloodstained Bindia

2 had to go to her Sasural in Farrukhabad in an attempt todissuade the two accused from pressing such demand, but they(the two accused) humiliated them and turned them out of thehouse with the command not to enter their house again withoutmeeting the demand of a Maruti Car. He did not take any actionon the consolation offered by the father-in-law of his daughterand also on the advice of his daughter. It was natural that thevictim also did not want her father to take any extreme stepagainst the two accused. She might have thought that thingswould improve with the passage of timebut it seems that thatdid not happen. Surya Kant Dixit PW 1 was in a helpless stateafter suffering humiliation at the hands of the accused personsabout three months before the actual incident. He could simplywait and watch in the hope of things to improve, but the situationdid not improve at all. It, however, cannot be taken to mean thatthe demand made by the two accused persons had subsidedor was given up by them. It can justifiably be inferred from whathappened subsequently that they continued to torture theunfortunate lady because of non-fulfilment of the demand ofMaruti Car. In our opinion, the test of ‘soon before’ is satisfiedin the facts, evidence and circumstances of the present case.

27. Thus, ingredients No. 3, 4 and 5 for attraction of Section304B IPC, are also established by satisfactory evidenceadduced by the prosecution in the form of the testimony of SuryaKant Dixit PW 1 corroborated by Jaideo Awasthi PW 2.

28. As regards the important question whether the deathof Geeta was homicidal as alleged by the prosecution orsuicidal as claimed by the defence, there is a popular adagethat the witnesses may lie but the circumstances will not. In thepresent case, certain recoveries made from the spot stronglyindicate that the death of Geeta was homicidal. There are twoimportant recovery memoes Ex.Ka-10 and Ka-11. The recoverymemo Ex.Ka-10 relates to the recovery of blood andbloodstained Bindia from the Chhajja (balcony) situated outsidethe room in which the dead body of the deceased was found

1157 1158

around the neck. The sign of “tissue ecchymosed and trachealring found compressed” was explained by the Doctor that itoccurred on account of tying the cloth around the neck withtoughness. These were the signs of violence and force appliedby the assailants on the neck of the deceased strangulating herto render her immobile and to overpower her, but half way. Theysprinkled kerosene on her and burnt her to accomplish theirobjective of causing her death. Nothing could be brought outof the cross-examination of Dr. R.K. Singh PW 3 to displacethe facts emerging from the post mortem report.

33. So far as the alleged manipulation in the post mortemreport is concerned, the contention for the accused is whollyunfounded. It was a panel of three doctors formed by the DistrictMagistrate to conduct post mortem of the dead body of thedeceased. The complainant was an outsider from another city.It would be preposterous to assume that he had suchmonstrous influence that he could win over the three doctors toproduce a port mortem report of his choice, falsely showing thesigns of strangulation on the dead body of the deceased.Keshav Tiwari (uncle of accused No. 1) was an Advocate,practising at Farrukhabad who was even present at the timeof preparation of the inquest report. He was also a witness ofFard of recovery Ex.Ka-10 and Ka-11. Naturally, he would havebeen watching the interest of the accused persons. It waspractically impossible for PW 1 (father of the deceased) tomaneuver any manipulation in the post mortem report. We alsocannot accept the argument that the doctors were incompetent.

34. The theory of suicide put forth by the defencecompletely falls through on careful analysis of the evidence andthe attending circumstances. Two different types of injuriesfound on the dead body of the deceased, i.e., the ligature markof large dimension and the body being badly burnt because ofthe ante mortem burns with smell of kerosene coming out ofthe body completely rule out the theory of suicide. A half burntpiece of cloth with a knot was also found tied around the neck.If a cloth is suddenly tightened around the neck, it is likely to

on the Chhajja were found. Not only this, it appears that thedeceased had even tried to make use of the phone to informsomeone about what was happening with her but she could notsucceed. The presence of burnt cordless phone stuck in the armand the burnt wire of phone with the dead body indicates thatshe had tried to contact someone on phone, but in vain. Thereis nothing to cast doubt on the said recoveries.

31. The argument of the learned counsel for the accused,however, ignores other important aspects of the matter. Wehave dealt with the above that there was struggle andapplication of violence on the deceased on the Chhajja(balcony) and in the bed room where she was forcibly takenfor being done to death. To incapacitate her of any meaningfulresistance, the accused persons interfered with her breathingprocess with the compression of the windpipe of her neckbefore burning her. Respiration had not completely stopped. Inother words, the air passage was not completely blocked bythe ligature pressed by the accused around the neck of thedeceased. She was strangulated, but not to death.Strangulating her half way to overpower her and to render herincapable of offering any meaningful resistance, the twoaccused then poured kerosene over her and burnt her. Thisexplains the presence of sooty particles in her larynx, tracheaand bronchi. A half burnt cloth around her neck with a knot hadbeen found by the panel of doctors conducting post mortem onher dead body. Her tongue was between the teeth. Ligaturemark of large dimension measuring 31 x 7 cm all around theneck had been found by the doctors. As stated above, thedoctors found a half burnt piece of cloth around her neck witha knot half burnt. It was the constricting material used by theaccused for compressing the neck of the deceased.

32. Dr. R.K. Singh PW 3 explained that strangulation wouldmean pressing the neck with force. He also emphatically statedthat strangulation was made by the cloth found around the neckof the deceased which was bearing a knot. As a matter of fact,ligature mark was the impression left by the constricting object

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cause loss of consciousness, rendering it impossible for thevictim to perform any action because of the interference withher breathing process. Owing to constricting of neck by aligature, it could not at all be possible for the victim to catchhold of the container of the kerosene and pour it upon her withthe lighting of match stick setting her ablaze. Her mental facultywould not have been in such a position to have undertaken suchan activity. It is also to be taken note of that her body was foundby the Investigating Officer at point “A” was depicted in the siteplan in the lonely corner of the bedroom where she wasrendered immobile and in a helpless state.

35. Vidushi DW 1 sister of accused No. 1 tried to supportthe theory of suicide by her statement that her sister-in-law(deceased) used to bear Tabiz in her neck. She stated that sheallegedly enquired from Geeta about the same and she hadreplied that she was being haunted by evil spirits having baddreams in the night and further that a month before her marriage,her father had taken her to a Tantrik who had given Tabiz of hermarriage. According to her, the deceased remained in mentaltension because she had not been able to give birth to anychild.

36. We have not the slightest doubt that the theory ofsuicide put forth by the defence is a crude concoction. Ours isa superstitious society. A number of males and females wearTabiz over their persons on the advice of hermits, astrologers,fortunetellers, palmists, tantriks, etc., for general well being. Itis preposterous that even before her marriage, the deceasedwas taken by her father to some tantrik for such treatment ofsorcery so as to ensure the birth of a child to her within threeyears of marriage. It also cannot be accepted that she was livingunder gloom or depression for having not given birth to a child.She was only 24 years of age when she died. She waseducated upto B.Sc. Standard. She had not passed childbearing age. She had been married about three years back.No evidence could be led by the defence that she was suffering

from some gynaecological problem running counter to her childbearing capacity. Had there been any such problem, therewould have been some history of her consultation with medicalexperts and related treatment. The accused being her husbandand the mother-in-law would have definitely been in a positionto put forth documentary evidence in this behalf. A baldassertion from the mouth of the sister of the accused No. 1could not be believed that the deceased was suffering fromsome mental depression for having not conceived.

37. We record with dismay that the trial judge has taken itto be a ground against the prosecution that the knot foundaround the neck of the deceased was not produced before theCourt. It is beyond comprehension as to how the knot of clothfound wrapped around the neck of the deceased could beproduced before him. It is obvious that he completelymisinterpreted the matter relating to the knot and took it as acircumstance against the prosecution. While conducting postmortem, the knot found around the neck of the deceased wasuntied and removed. In other words, the body was freed fromthe knot so as to facilitate the post mortem. Therefore, therecould be no question of the knot bring produced before thecourt.

38. On close scrutiny and careful appreciation of theevidence, we are of the firm view that the trial judge wronglyaccepted the plea of alibi put forth by the two accused personsto get away from the consequences of the serious crimecommitted by them. Their conduct also voluminously spokeagainst them. As a matter of fact, only these two accused hadan opportunity to commit this offence. The father-in-law of thedeceased having gone to State Bank, Farrukhabad (the placeof his employment) and his two daughhters including DW 1Vidushi having gone to their educational institution, the twoaccused persons only (husband and mother-in-law of thedeceased) had the opportunity to commit this crime inside thebedroom of one of the them, i.e., accused Satya NarayanTiwari alias Jolly. No one else could have access there. The

be believed that her brother accused No. 1 – husband of thedeceased had gone to his shop at about 8 P.M. Aftercommitting this crime, the two accused vanished from thescene, but before doing that, one of them (Bhuvaneshwari-mother-in-law of the deceased) lodged a false report at thepolice station that her daugther-in-law had committed suicide.It is in the testimony of D.P.N. Pandey PW 7 (C.O/InvestigatingOfficer) that the accused Satya Narayan surrendered in Courton 7.11.2000 and the other accused Rani alias Bhuvaneshwarion 13.11.2000. Earlier thereto, the attempts to find and arrestthem turned to be futile. It is in his testimony that both of themwere absconding and for this reason, on 6.11.2000 a reporthad been submitted for issuing process against them underSection 82/83 Cr.P.C. None of the two accused is witness ofthe inquest report or Fards. Absconding by both of them afterthe incident cannot be termed to be normal conduct of innocentpersons. The report by the accused Bhuvaneshwari Devi, aswe said, was given at the Police Station at 1.10 P.M. On3.11.2000. In our opinion, it was the outcome of deliberationand consultation with legal experts who had already gatheredat the scene of occurrence along with Keshav Tiwari ,Advocate-uncle of the accused Satya Narayan Tiwari, DW 2Devendra Misra, Advocate, and few other lawyers. We notefrom the testimony of DW 2 Devendra Misra that the news ofthe death of daughter-in-law of Ghanshyam Tiwari was receivedin the District court at 11.30 A.M., itself i.e., much before thelodging of the report by Bhuvaneshwari. This witness stated thatwhen he arrived at the scene of occurrence, a group of lawyerswas already there. The false report made by the accusedBhuvaneshwari Devi was obviously the outcome of the legaladvice to save the culprits from the consequences of thecriminal act committed by them.

40. Learned counsel for the accused also argued that itwas the accused Bhuvaneshwari who had passed on theinformation of the deathof the deceased to her parents ontelephone. Surya Kant Dixit PW 1 (father of the deceased)

manner in which the deceased was done to death, i.e., by firststrangulating her and then setting her afire, needed at least twopersons, because she (deceased) was also a young lady agedabout 24 years. As is well known, the instinct of self preservationis natural in all living beings. A single person could not havepossibly overpowered the victim to strangulate her and to sether afire. As a natural instinct, she was bound to offer resistanceand having regard to the two types of the injuries found on herperson at the time of post mortem, it was the handiwork of atleast two persons, who undoubtedly were the husband andmother-in-law of the deceased. The conduct of the mother-in-law of the deceased was that she lodged a false information atthe Police Station at 1.10 P.M. that her daughter-in-law hadcommitted suicide. In this report, she stated that she had goneto supervise the construction work at her other house andnoticing smoke emitting from the first floor of the bedroom ofthe house of the incident and on the shouts of the residents ofthe locality, she came rushing to the scene. In our opinion, thisstatement is false as per the own showing of her daughter DW1 Vidushi. She stated that the house to which her mother hadgone, was situated in another locality. She also stated that itwas not visible from the house of the incident. It also emergesfrom her statement that the distance of that house underconstruction from the old house of the incident was 1 or 2furlongs. This being so, there could be no question of her(accused appellant No. 2) noticing emission of smoke from thebedroom of first floor of the house where the incident took place.She (accused appellant No. 2) falsely stated in the reportlodged at the Police Station to misguide the machinery of lawthrough false plea of alibi. The story of seeing smoke comingout of the home and hearing the alarm of the respondents ofthe locality mentioned in the report of Bhuvaneshwari Devi wasa stark lie. She had taken a false excuse to support herbaseless plea of alibi of herself as also her son-husband of thedeceased.

39. The interested testimony of DW 1 Vidushi also cannot

SATYA NARAYANA TIWARI AND ANR v. STATE OFU.P.

1161 1162

1163 1164

Maruti Car in dowry raised and persistentlypressed by them after about six months ofthe marriage and continued till her death.

(3) The cruelty and harassment was inconnection with the demand of dowry i.e.Maruti Car.

(4) The cruelty and harassment is established tohave been meted out soon before her death.

(5) The Two accused were the authors of thiscrime who caused her death by strangulationand burning on the given date, time andplace.

43. In our opinion, the trial Judge recorded an acquittaladopting a superfluous approach without indepth analysis of theevidence and circumstances established on record. Onthoroughly cross-checking the evidence on record andcircumstances established by the prosecution with the findingsrecorded by the trial court, we find that its conclusion are quiteinapt, unjustified, unreasonable and perverse. Proceeding onwrong premise and irrelevant considerations, the trial court hasacquitted the accused. The accused are established to havecommitted the offences under Sections 498-A and 304 B IPCand under Section 4 of Dowry Prohibition Act and the findingsof the High Court are correct.

44. As a result of the above discussion, this Appeal isdismissed accordingly.

45. On 27.10.2005 this Court had granted bail to theappellants. Their bail bonds are cancelled. They shall be takeninto custody forthwith to serve out remaining period ofsentence.

46. Application for impleadment is allowed.

R.P. Appeal dismissed.

denied that the telephone received by him was fromBhuvaneshwari Devi. According to him, he had received thetelephone call from some stranger. Even if it is taken for thesake of argument that she had telephoned to him, in our opinion,it is of no consequence and the defence does not score anypoint on this premise. The reason is that the crime wascommitted by the two accused with preplanning, so much sothat Bhuvaneshwari Devi even lodged a false report at the policestation to misguide the machinery of law and to create a falsedefence. Telephoning to the father of the deceased could onlybe a part of the scheme to project it as a case of suicide.

41. We are of the view that the presumption of Section113-B of the Evidence Act is attracted in this case and thediscussion that we have made hereinabove makes it abundantlyclear that the defence could not displace the said presumption.The culpability of the two accused in committing this crime isestablished to the hilt by the facts and circumstances provedby the prosecution. They undoubtedly are the authors of thiscrime. The irresistible conclusion is the the demand of MarutiCar raised by the two accused after about six months of themarriage persisted as it was not settled by the father of thedeceased by supplying the same. The prosecution hassuccessfully proved the persistent demand of Maruti Car as apart of dowry by the two accused and continuous cruelty andharassment heaped upon the deceased by them over thisscore.

42. To sum up, the prosecution has been able to prove thefollowing :

(1) the death of the deceased was caused bystrangulation and burning within seven yearsof her marriage;

(2) the deceased had been subjected to crueltyby her husband and mother-in-law (the twoaccused appellants) over the demand of

SUPREME COURT REPORTS [2010] 12 S.C.R.[2010] 12 S.C.R. 1165

be borne in mind while considering an application for bailare: ( i) whether there is any prima facie or reasonableground to believe that the accused had committed theoffence; ( ii ) nature and gravity of the accusation; ( iii )severity of the punishment in the event of conviction; ( iv )danger of the accused absconding or fleeing, if releasedon bail; ( v) character, behaviour, means, position andstanding of the accused; ( vi ) likelihood of the offencebeing repeated; ( vii ) reasonable apprehension of thewitnesses being influenced; and (viii) danger, of course,of justice being thwarted by grant of bail. It is manifestthat if the High Court does not advert to these relevantconsiderations and mechanically grants bail, the saidorder would suffer from the vice of non-application ofmind, rendering it to be illegal. [para 11 and 12] [1169-G-H; 1170-A-E]

State of U.P. through CBI Vs. Amarmani Tripathi 2005(3) Suppl. SCR 454 = 2005 (8) SCC 21; Prahlad SinghBhati Vs. NCT, Delhi & Anr. 2001 (2) SCR 684 = 2001 (4)SCC 280; Ram Govind Upadhyay Vs. Sudarshan Singh &Ors. 2002 (2) SCR 526 = 2002 (3) SCC 598; and MasroorVs. State of Uttar Pradesh & Anr. 2009 (14) SCC 286 - reliedon.

1.2. In the instant case, while dealing with theapplication of the accused for grant of bail, the High Courtcompletely lost sight of the basic principles. The accusedis alleged to have committed a heinous crime of killingan old and helpless lady by strangulation. He was seencoming out of the victim’s house by a neighbour aroundthe time of the alleged occurrence, giving rise to areasonable belief that he had committed the murder.Under the given circumstances, it was not the stage atwhich bail u/s 439 of the Code should have been grantedto the accused, more so, when even charges have notyet been framed. It is also pertinent to note that the

PRASANTA KUMAR SARKARv.

ASHIS CHATTERJEE & ANR.(Criminal Appeal No. 2086 of 2010)

OCTOBER 29, 2010

[D.K. JAIN AND H.L. DATTU, JJ.]

Code of Criminal Procedure, 1973:

s.439 – Bail – Factors to be taken into account whileconsidering an application for bail – Explained – HELD: Inthe instant case, the High Court completely lost sight of thebasic principles – In the circumstances, it was not the stageat which bail u/s 439 should have been granted to the accusedmore so when even charges were not framed – Order of HighCourt set aside.

Respondent no. 1 was accused of committingmurder of an old widow by strangulation. His bailapplications were rejected by the Additional ChiefJudicial Magistrate as also the Court of Session.However, the High Court granted him regular bail u/s 439CrPC. Aggrieved, the brother of the deceased filed theappeal.

HELD: 1.1. It is trite that the Supreme Court does not,normally, interfere with an order passed by the HighCourt granting or rejecting bail to the accused. However,it is equally incumbent upon the High Court to exerciseits discretion judiciously, cautiously and strictly incompliance with the basic principles laid down in aplethora of decisions of this Court on the point. It is wellsettled that, among other circumstances, the factors to

1167 1168PRASANTA KUMAR SARKAR v. ASHISCHATTERJEE & ANR.

Additional Chief Judicial Magistrate had rejected threebail applications of the accused, but the High Court didnot find it worthwhile to even make a reference to theseorders. [para 13] [1171-A-D]

Kalyan Chandra Sarkar Vs. Rajesh Ranjan @ PappuYadav & Anr. 2004 (7) SCC 528 - relied on.

Case Law Reference:

2009 (14) SCC 286 relied on para 9

2005 (3) Suppl. SCR 454 relied on para 11

2001 (2) SCR 684 relied on para 11

2004 (7) SCC 528 relied on para 13

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNo. 2086 of 2010.

From the Judgment & Order dated 11.01.2010 of the HighCourt at Calcutta in CRM N. 272 of 2010.

Nagender Rai, C.K. Rai, Babita Sant, Harish Pandey forthe Appellant.

Ujjwal Banerjee, Asit Kumar Rari, Namita Roy, SarlaChandra, Satish Vig for the Respondents.

D.K. JAIN, J. 1. Leave granted.

2. This appeal, by special leave, is directed against orderdated 11th January, 2010 passed by the High Court of Calcuttain C.R.M. No. 272 of 2010, granting regular bail to respondentNo. 1 in this appeal (hereinafter referred to as “the accused”),

under Section 439 of the Code of Criminal Procedure, 1973(for short “the Code”).

3. The accused is facing trial for an offence punishableunder Section 302 of the Indian Penal Code, 1860 (for short“IPC”) for allegedly committing the murder of one Ms. MallikaSen. Respondent No.2 is the State of West Bengal.

4. Very briefly stated the facts material for the adjudicationof this appeal can be stated thus:

Ms. Mallika Sen, a 57 years old widow was foundstrangulated at her residence on 2nd July, 2009. The appellant,who is the brother of the victim, lodged a written complaint atthe Rampurhat Police Station, on the basis of which FIR No.111/09 dated 2nd July, 2009 was registered under Section302, IPC.

It has been alleged that a neighbour of late Ms. Sen, oneMr. Somenath Dutta, saw the accused rushing out of theresidence of the deceased, around the time the incident tookplace. The accused was arrested on 13th July, 2009 andproduced before the Additional Chief Judicial Magistrate whoremanded him to judicial custody. Thereafter, on the same day,the police filed a forwarding report in the said court, inter alia,requesting for holding of a Test Identification Parade (T.I.P.) ofthe accused. The T.I.P. was conducted, but perhaps theaccused could not be identified. However, in the second T.I.P.,the accused was duly identified by the aforesaid witness.

5. The accused filed several bail applications before theAdditional Chief Judicial Magistrate which were all dismissedvide orders dated 7th September, 2009, 16th September, 2009and 19th September, 2009.

6. On 7th October, 2009, charge-sheet No. 138 of 2009under Section 302 IPC was filed against the accused beforethe Additional Chief Judicial Magistrate.

SUPREME COURT REPORTS [2010] 12 S.C.R.PRASANTA KUMAR SARKAR v. ASHISCHATTERJEE & ANR. [D.K. JAIN, J.]

1169 1170

cautiously and strictly in compliance with the basic principleslaid down in a plethora of decisions of this Court on the point.It is well settled that, among other circumstances, the factorsto be borne in mind while considering an application for bailare: (i) whether there is any prima facie or reasonable groundto believe that the accused had committed the offence; (ii)nature and gravity of the accusation; (iii) severity of thepunishment in the event of conviction; (iv) danger of the accusedabsconding or fleeing, if released on bail; (v) character,behaviour, means, position and standing of the accused; (vi)likelihood of the offence being repeated; (vii) reasonableapprehension of the witnesses being influenced; and (viii)danger, of course, of justice being thwarted by grant of bail.(See: State of U.P. through CBI Vs. Amarmani Tripathi;2

Prahlad Singh Bhati Vs. NCT, Delhi & Anr.3; Ram GovindUpadhyay Vs. Sudarshan Singh & Ors.4)

12. It is manifest that if the High Court does not advert tothese relevant considerations and mechanically grants bail, thesaid order would suffer from the vice of non-application of mind,rendering it to be illegal. In Masroor (supra), a Division Benchof this Court, of which one of us (D.K. Jain, J.) was a member,observed as follows:

“Though at the stage of granting bail an elaborateexamination of evidence and detailed reasons touching themerit of the case, which may prejudice the accused, shouldbe avoided, but there is a need to indicate in such orderreasons for prima facie concluding why bail was beinggranted particularly where the accused is charged ofhaving committed a serious offence.” (See also: State ofMaharashtra Vs. Ritesh5; Panchanan Mishra Vs.

7. Having failed to secure bail from the Sessions Court,the accused preferred a bail application, being C.R.M. No. 272of 2010 before the High Court under Section 439 of the Code.As stated above, by the impugned order, the High Courtallowed the application, and granted bail to the accused by ashort order, observing thus:

“Having regard to the nature of the alleged crime, we donot think that interest of investigation requires or (sic)justifies further detention of the present petitioner at thisstage.”

8. Hence the present appeal by the complainant.

9. Mr. Nagender Rai, learned senior counsel appearing onbehalf of the appellant, while assailing the impugned order,contended that the said order being non-speaking, deservesto be set aside in light of the decision of this Court in MasroorVs. State of Uttar Pradesh & Anr..1 Learned counsel submittedthat the High Court has failed to take into consideration themanner in which a hapless old lady was done to death as alsothe fact that the accused had been duly identified by anindependent witness.

10. Per contra, Mr. Ujjwal Banerjee, learned counselappearing for the accused, contended that the case against theaccused was false, as is evident from the fact that the witnesshad failed to identify the accused in the first T.I.P. Learnedcounsel contended that the accused had been arrested on amere suspicion, and in light of the fact that he has not misusedthe bail, the impugned order needs to be affirmed.

11. We are of the opinion that the impugned order is clearlyunsustainable. It is trite that this Court does not, normally,interfere with an order passed by the High Court granting orrejecting bail to the accused. However, it is equally incumbentupon the High Court to exercise its discretion judiciously,

1. (2009) 14 SCC 286.

2. (2005) 8 SCC 21.

3. (2001) 4 SCC 280.

4. (2002) 3 SCC 598.

5. (2001) 4 SCC 224.

1171 1172PRASANTA KUMAR SARKAR v. ASHISCHATTERJEE & ANR. [D.K. JAIN, J.]

Digambar Mishra & Ors.6; Vijay Kumar Vs. Narendra &Ors.7; Anwari Begum Vs. Sher Mohammad & Anr8)

13. We are constrained to observe that in the instant case,while dealing with the application of the accused for grant ofbail, the High Court completely lost sight of the basic principlesenumerated above. The accused, in the present case, isalleged to have committed a heinous crime of killing an oldhelpless lady by strangulation. He was seen coming out of thevictim’s house by a neighbour around the time of the allegedoccurrence, giving rise to a reasonable belief that he hadcommitted the murder. We feel that under the givencircumstances, it was not the stage at which bail under Section439 of the Code should have been granted to the accused,more so, when even charges have not yet been framed. It isalso pertinent to note that, as stated above, the Additional ChiefJudicial Magistrate had rejected three bail applications of theaccused but the High Court did not find it worthwhile to evenmake a reference to these orders. In this regard, it would beuseful to refer to the following observations echoed in KalyanChandra Sarkar Vs. Rajesh Ranjan @ Pappu Yadav & Anr9.:-

“In regard to cases where earlier bail applications havebeen rejected there is a further onus on the court toconsider the subsequent application for grant of bail bynoticing the grounds on which earlier bail applications havebeen rejected and after such consideration if the court isof the opinion that bail has to be granted then the saidcourt will have to give specific reasons why in spite of suchearlier rejection the subsequent application for bail shouldbe granted.” (See also: Ram Pratap Yadav Vs. Mitra SenYadav & Anr10.)

14. For the foregoing reasons, the appeal is allowed, andthe impugned order is set aside. The bail bond and the suretyfurnished by the accused in terms of the impugned order standscancelled and it is directed that he will be taken into custodyforthwith. Needless to add that observations touching the meritsof the case against the accused are purely for the purpose ofdeciding the question of grant of bail and if in future any suchapplication is filed by the accused, it shall be considered onits own merits untrammelled by any of these observations.

R.P. Appeal allowed.

6. (2005) 3 SCC 143.

7. (2002) 9 SCC 364.

8. (2005) 7 SCC 326.

9. (2004) 7 SCC 528.

10 (2003) 1 SCC 15.

1174[2010] 12 S.C.R. 1173

AJMER VIDYUT VITRAN NIGAM & ORSv.

NAVIN KUMAR SAINI ETC.(CIVIL APPEAL NO.9487 OF 2010)

OCTOBER 29, 2010

[HARJIT SINGH BEDI AND CHANDRAMAULI KR.PRASAD, JJ.]

Labour Laws:

Work-charge helpers – Claiming regularization and payscale of Junior Clerks – HELD: There being qualitativedifference as regards liability and responsibility, mere volumeof work would not be relevant – Further, the plea of equal payfor equal work is founded on Article 14 of the Constitution,therefore, it was incumbent upon the workmen to establish thatthey were performing the work of Junior Clerk under orders ofa competent authority – This has not been done – However,the workmen were entitled to be considered for regularizationand the pay scale of Junior Clerk from the date their juniorswere granted the benefits under the regularization schemeformulated by the employer – Constitution of India, 1950 –Articles 14 and 16 – Equal pay for equal work.

The respondent-workmen were appointed by thepredecessor-in-interest of the appellant-Nigam as Helperson a consolidated salary, w.e.f. 28.11.1979, for a periodof three months, but they were allowed to continue tillthey qualified in a limited competitive examination andwere appointed in the regular pay scale of Junior Clerkby an order dated 26.6.1984. Later, a Selection Committeewas constituted for regularization of such work chargeemployees who had completed two years service as suchup to 31.3.1983, but the claim of the respondents was notconsidered. The respondents raised a grievance claiming

regularization as Junior Clerk w.e.f. 1.12.1979 and regularpay scale of the post of clerk from 1.4.1982 to 26.6.1984.The Labour Court did not find fault with the decision ofthe employers not to regularize the respondents w.e.f.1.12.1979, but directed that they would be entitled towages of Junior Clerk from the said date. In the writpetition filed by the employers, the single Judge of theHigh Court held that the respondents would be entitledto only the notional benefit of the pay scale of JuniorClerk w.e.f. 1.12.1979, but not to actual arrears. TheDivision Bench of the High Court affirmed the order.Aggrieved, the employers filed the appeals.

Partly allowing the appeals, the Court

HELD: 1. The plea of equal pay for equal work isfounded on Article 14 of the Constitution, hence it wasincumbent upon the workmen to establish that they wereperforming the work of the Junior Clerk under orders ofa competent authority. Nothing has been brought onrecord by the workmen to show that they were asked toperform the function of a Junior Clerk by any competentauthority. Further, the workmen were admittedly engagedas helpers in work charge establishment and in that viewof the matter for applying the principle of equal pay forequal work, mere the volume of work shall not be relevant,there being qualitative difference as regards the liabilityand responsibility. The workmen were not entitled to thescale of pay of the Junior Clerk even on notional basisfrom the date of their engagement as helpers. [para 11][1180-B-D]

1.2 As regards the claim of the respondent-workmenfor scale of Junior Clerk from 1.4.1982, they cannot beallowed to suffer only because they qualified in thewritten examination and were appointed as Junior Clerksby order dated 26.6.1984. The employer considered the

1175 1176AJMER VIDYUT VITRAN NIGAM v. NAVIN KUMARSAINI ETC.

cases of such work charge employees who hadcompleted two years of service as work chargeemployees. A large number of workmen like therespondents, and even persons junior to them, wereregularised as Junior Clerks with effect from 1.4.1982 andgiven the regular scale of pay. The respondentsappeared before the Selection Committee constituted forthis purpose on 27.8.1987 but their cases were notconsidered on the ground that they had already beenappointed as Lower Division Clerks. The respondentsought to have been considered for regularisation asLower Division Clerk when the case of other personssimilarly situated was considered by the SelectionCommittee. [para 12 and 15] [1180-E-G; 1182-F-G]

Jodhpur Vidyut Vitran Nigam Ltd. and another vs. NanuRam and others, 2006 (9) Suppl. SCR 544 = 2006 (12)SCC 494 – referred to.

1.3 The appellants are directed to consider the casesof respondents for regularization as Junior Clerks witheffect from 1.4.1982 and, in case they are found fit forregularization, grant them the pay-scale thereof from thesaid date. As the respondents were found fit forappointment as Junior Clerks on the basis of the limitedwritten examination, there does not seem any validreason to suggest that they shall not be fit to beregularised as Junior Clerks when persons junior to themwere regularised and given the regular scale of pay witheffect from 1.4.1982. [para 16] [1182-H; 1183-A-B]

Case Law Reference:

2006 (9) Suppl. SCR 544 referred to. Para13

From the Judgment & Order dated 09.07.2007 of the HighCourt of Judicature for Rajasthan at Jodhpur in D.B. CivilSpecial Appeal (writ) No. 623 of 2007.

C.A. No. 9488 of 2010.

Sushil Kumar Jain, Puneet Jain, Atra Bhawan for theAppellants.

M.R. Calla, Rishi Matoliya, Pratiksha Sharma, CharuMathur for the Respondent.

CHANDRAMAULI KR. PRASAD, J. 1. Petitioners,aggrieved by the orders dated 9th July, 2007 passed by theRajasthan High Court in D.B.Civil Special Appeal (Writ) No.623 of 2007 and D.B. Civil Special Appeal (Writ) No.421 of2007 affirming the order dated 18th September, 2006 passedby a learned Single Judge of that Court in S.B. Civil WritPetition No.2331 of 2002, have preferred these petitions forgrant of leave.

2. Leave granted.

3. These appeals arise in the following circumstances:

Naveen Kumar Saini and Shyam Lal, respondents hereinalong with other persons were appointed as Helpers in work-charge establishment on 28th November, 1979 at aconsolidated salary of Rs.150/- per month for a period of threemonths. However, the respondents were allowed to continuein service after the expiry of the aforesaid period of threemonths. Later on a limited competitive examination was heldby the Rajasthan State Electricity Board (hereinafter referredto as the “Board”) for appointment to the post of Junior Clerk,

AJMER VIDYUT VITRAN NIGAM v. NAVIN KUMARSAINI ETC. [CHANDRAMAULI KR. PRASAD, J.]

1177 1178

in which the respondents and other candidates participated andon merit altogether 81 persons including the respondents wereappointed by Order dated 26th June, 1984 in the regular payscale of the Junior Clerks. It is relevant here to state that theBoard took a decision to consider regularisation of such workcharge employees who had completed two years of serviceupto 31st March 1983 and for that purpose directed suchemployees to appear before the Selection Committee on 27thAugust, 1987. Respondents appeared before the SelectionCommittee, when they were informed that since they hadalready been appointed as Lower Division Clerks, there is nonecessity to regularise them. Between the period from 17thSeptember, 1987 to 13th October, 1987, altogether 27 persons,who joined as work charge employees like the respondents,became regular employees with effect from 1st April, 1982 andgiven regular pay scale of the post of Lower Division Clerk.Accordingly, respondents raised a grievance that they be giventhe pay scale of the post of Junior Clerk with effect from 1stDecember, 1979 and regular pay scale of the post of Clerk from1st April, 1982 to 26th June, 1984. Respondents claimed thescale of pay of Junior Clerk from 1st December, 1979 on theplea that though they were engaged as helpers but theyperformed the work of Junior Clerk. The regular pay scale ofpost of Junior Clerk from 1st April, 1982 to 26th June, 1984was sought on the ground that persons junior to them weregiven the said scale of pay with effect from 1st April, 1982. Theaforesaid grievance of the respondents was considered by theBoard but finding no merit in the same, it was rejected.Respondents then filed writ petitions before the Rajasthan HighCourt which by its order dated 25th April, 1997 passed inS.B.Civil Writ Petition No.3321 of 1991 and S.B. Civil WritPetition No.3683 of 1991 declined to interfere on its finding thatrespondents had alternative efficacious remedy before theIndustrial Tribunal.

4. Ultimately, the State Government by its letter dated 17thOctober, 1997 referred for adjudication to the Industrial Tribunal

as to whether the action of the appellants in not giving therespondents the scale of Junior Clerk with effect from IstOctober, 1979 and for the period from Ist April, 1982 to 26thJune, 1984, is valid and proper.

5. The Industrial Tribunal by its award dated 29th January,2002 did not find any fault with the Board in not regularisingthe services of the respondents on the post of Junior Clerk witheffect from 1st December, 1979 but directed that respondentsshall be entitled to the wages of the Junior Clerk from the saiddate. Relevant portion of the award of the Industrial Tribunal inrespect of respondent Naveen Kumar Saini reads as follows:

“Hence, in the context of State (Appropriation ofAppointments in Public Services and StaffSystematisation) Act 1999 not regularising ApplicantNaveen Kumar Saini on the post of Junior Clerk with effectfrom 1.12.79 by the Secretary, Rajasthan State ElectricityBoard, Vidyut Bhawan, Vidyut Marg, Jaipur,Superintending Engineer (Udaipur Circle) RSEB Udaipur(3) Assistant Engineer (O&M), RSEB Debari Head Office,Udaipur is proper and lawful. But the opposite party Boardhas been continuously taking work of Junior Clerk from theApplicant from 1.12.79 the date of his selection on the postof Junior Clerk till the date of assuming charge, therefore,in accordance with the principle of equal wages for samework the Applicant is entitled to get from the OppositeParty Board salary and other perquisites prevailing at therelevant time. The Opposite Party Ajmer Vidyut VitaranNigam Ltd., Ajmer to pass order as per rules in this regardin one month and make payment of the arrear amountpayable to the Applicant.”

6. Identical award was given in respect of respondentShyam Lal.

7. Aggrieved by the aforesaid awards, the Boardpreferred S.B. Civil Writ Petition No.2331 of 2002 before the

Rajasthan High Court and the learned Single Judge by orderdated 18th September, 2006 partly allowed the writ petition anddirected the Board to notionally grant the benefit of the pay ofthe post of Lower Division Clerk with effect from 1st December,1979 with a rider that the respondents shall not be entitled toreceive actual arrears of the said period. Relevant portion ofthe order of the learned Single Judge reads as follows:

“In view of the fact that the learned Tribunal has recordeda finding that number of labourers who were earlier juniorto the respondent-workman were regularized on the postof LDC earlier and were in receipt of higher scale of paythan him, ends of justice would be met by directing therespondent to only notionally grant the benefit of pay on thepost of LDC to the respondent-workman w.e.f. 1stDecember, 1979 although the respondent shall not beentitled to receive actual arrears for such period.”

8. Ajmer Vidyut Vitran Nigam Limited, the appellant hereinbeing the successor of the Rajasthan State Electricity Boardand its officers aggrieved by the order of the learned SingleJudge preferred separate appeals, which have been dismissedby the impugned orders.

9. Appellants are, therefore, before us with the leave of theCourt.

10. Mr. Sushil Kumar Jain, learned Counsel appearing onbehalf of the appellant submits that the respondents (hereinafterreferred to as the “workmen”) were employed as the workcharge helpers and they did not discharge their duty as JuniorClerks by any order passed by any competent authority andhence they are not entitled to be given the pay scale of JuniorClerk on the principle of equal pay for equal work. Heemphasises that for invoking the principle of equal pay for equalwork the volume of work is not decisive but the degree ofresponsibility and liability are also to be looked into.

10. Mr. M.R. Calla, learned Senior Counsel appearing onbehalf of the respondents, however, contends that workmenhaving been asked to perform the function of the Junior Clerk,they are entitled to be given the regular scale of pay of the Clerk.

11. We have bestowed our consideration to the rivalsubmissions and we find substance in the submission of Mr.Jain. Nothing has been brought on record by the workmen toshow that they were asked to perform the function of a JuniorClerk by any competent authority. The plea of equal pay forequal work is founded on Article 14 of the Constitution, henceit was incumbent upon workmen to establish that they wereperforming the work of the Junior Clerk under orders of acompetitive authority. Further, workmen were admittedlyengaged as helpers in work charge establishment and in thatview of the matter for applying the principle of equal pay forequal work, mere the volume of work, shall not be relevant,there being qualitative difference as regards the liability andresponsibility. We are of the opinion that workmen were notentitled for the scale of pay of the Junior Clerk even on notionalbasis from the date of their engagement as helpers.

12. Next question which falls for consideration is as towhether workman shall be entitled for scale of Junior Clerk fromIst April, 1982? It is relevant here to State that workmen wereappointed as Junior Clerks on the basis of limited competitiveexamination by order dated 26th June, 1984. It is furtherrelevant here to state that the employer considered the casesof such work charge employees who had completed two yearsof service as work charge employees. Respondents appearedbefore the Selection Committee constituted for this purpose on27th August, 1987 but their cases were not considered on theground that they have already been appointed as LowerDivision Clerks. However, a large number of workmen like theworkmen herein were regularised as Junior Clerks with effectfrom 1st April, 1982 and given the regular scale of pay. It is theplea of the workmen that at least they are entitled to be giventhe regular scale of pay from the date, their juniors were given.

1179 1180

13. Mr. Jain, however, submits that the workmen cannotclaim regularisation on completion of two years service andthey utmost may be entitled to be considered for regularizationto the post of Junior Clerk with effect from 1st April, 1982 andthe pay scale thereof when, persons junior to them were giventhe said scale of pay. In this connection he referred to a decisionof this Court in the case of Jodhpur Vidyut Vitran Nigam Ltd.and another vs Nanu Ram and others, 2006 (12) SCC 494,and our attention has been drawn to the following passage ofthe aforesaid judgment:

“9. Applying the above test to the facts of the present case,the Screening Committee was required to examine thequestion as to how many workmen could be regularised,keeping in mind the budget provisions, availability of theposts, the number of muster roll workers engaged in theconstruction work without their being in existence vacantsanctioned posts, the manner in which these muster rollworkers were initially recruited with or without the approvalof the management and, thereafter, on the basis ofeligibility the Screening Committee had to recommendtheir absorption in regular service. These aspects wererequired to be examined by the Screening Committee.Mere completion of two years was not the only criterion.Even in the award dated 31-5-1978 read with award dated15-6-1979 the fixation in the regular pay scale was onlyfor those employees who were recruited with the approvalof the management and in accordance with law. Evenunder the awards, as they then stood, the ScreeningCommittee had to examine the performance of theworkmen before granting them the regular pay scale.Granting of pay scale simplicitor is different from grant ofpermanency. While granting permanency, the State has toconsider the number of posts falling vacant, those postsshould exist as and by way of regular vacancy, the financialburden of granting permanency and, therefore, in our view,the High Court has failed to keep in mind the difference

between the concept of grant of pay scale as distinct fromgrant of permanency. The State was not under anobligation to constitute Screening Committee at the endof each year. Constitution of the Screening Committee waswithin the discretion of the State Government dependentupon the above factors. Therefore, there was no questionof comparing the case of the present respondents with thecase of the workmen who got regularised prior to 31-3-1982. Each exercise by the Screening Committee has tobe seen in the light of the above factors. In a givenexercise, the State may have sufficient number of vacantposts to accommodate certain number of workers.However, that may not be the case in the subsequent years.Therefore, there is no question of any discrimination in thematter of regularisation or in the matter of grant ofpermanency.”

14. Mr. Calla submits that when persons junior to theworkmen having been given the regular pay scale with effectfrom 1st April, 1982 and the workmen cases were notconsidered, the appellants cannot deprive the workmen of theregular scale of pay with effect from 1st April, 1982 as givento the employees junior to them.

15. We are of the opinion that the case of the workmenought to have been considered for regularisation as LowerDivision Clerk when the case of other persons similarly situatedwere considered by the Selection Committee. Persons juniorto the workmen have been given the regular pay scale of thepost of Junior Clerk with effect from 1st April, 1982 whereasthe workmen herein were appointed as Junior Clerks by orderdated 26th June, 1984. They cannot be allowed to suffer onlybecause they qualified in written examination and appointed asJunior Clerks by order dated 26th June, 1984.

16. In the facts and circumstances of the case, we deemit expedient to direct the appellants to consider the cases of

1181 1182

respondents for regularization as Junior Clerks with effect from1st April, 1982 and in case they are found fit for regularization,grant them the pay-scale thereof from the said date. As therespondents were found fit for appointment as Junior Clerks onthe basis of the limited written examination, there does notseem any valid reason to suggest that they shall not be fit tobe regularised as Junior Clerks when persons junior to themwere regularised and given the regular scale of pay with effectfrom 1st April, 1982.

17. In the result, the appeals are partly allowed with thedirection aforesaid. No costs.

R.P. Appeals partly allowed.

TAMIL NADU HOUSING BOARD, CHENNAIv.

M. MEIYAPPAN AND ORS.(Civil Appeal No. 1757 of 2002)

OCTOBER 29, 2010

[D.K. JAIN AND T.S. THAKUR, JJ.]

Constitution of India, 1950:

Articles 32 and 226 – Writ petition challenging acquisitionof land – Filed after 16 years of the award of compensation –HELD: The Courts are expected to be very cautious andcircumspect about exercising their discretionary jurisdictionunder Article 226 or Article 32 of the Constitution if there hasbeen inordina te and unexplained delay in questioning thevalidity of acquisition of land – In the instant case, the writpetitioners did not furnish any explanation, and they hadparticipated in the proceedings before Land AcquisitionCollector – High Court should have dismissed the writ petitionat the threshold for delay and laches – Land Acquisition –Delay/Laches.

Pursuant to the Notification under Section 4(1) of theLand Acquisition Act, 1894, published in the Gazettedated 7.3.1979, certain lands were acquired for providinghousing facilities to .people of low income group. Theaward of compensation was made on 28.4.1982. The landowners-respondents nos. 1 to 17 filed a writ petition inDecember, 1997 challenging the acquisition of their land.The appellant Housing Board, contested the writ petition ,inter alia, on the ground of laches stating that possessionof the land had been taken over and handed to it on4.12.1979 and the writ petition was filed after a lapse of15 years. However, the High Court allowed the writpetition observing that the case was covered by the

[2010] 12 S.C.R. 1184

judgment in W. P. No. 2244 of 1991. Aggrieved, theHousing Board filed the appeal.

HELD: 1.1. It is trite law that delay and laches is oneof the important factors which the High Court must bearin mind while exercising discretionary power underArticle 226 of the Constitution. If there is such negligenceor omission on the part of the petitioner to assert his rightwhich, taken in conjunction with the lapse of time andother circumstances, causes prejudice to the oppositeparty, the High Court must refuse to invoke its extra-ordinary jurisdiction. Moreover, in relation to the landacquisition proceedings, courts should be loathe toencourage stale litigation, as the same might hinderprojects of public importance. The Courts are expectedto be very cautious and circumspect about exercisingtheir discretionary jurisdiction under Article 226 or Article32 of the Constitution if there has been inordinateunexplained delay in questioning the validity ofacquisition of land. [para 14 and 19] [1191-C-E; 1194-A-B]

Rabindranath Bose & Ors. Vs. The Union of India & Ors.1970 (2) SCR 697 = (1970) 1 SCC 84 Durga Prashad Vs.Chief Controller of Imports and Exports 1969 (2) SCR 596 =(1969) 1 SCC 185 Tridip Kumar Dingal & Ors. Vs. State ofWest Bengal & Ors. Tridip Kumar Dingal & Ors. Vs. State ofWest Bengal & Ors. 2008 (15) SCR 194 = (2009) 1 SCC 768;Yunus (Baboobhai) A. Hamid Padvekar Vs. State ofMaharashtra through its Secretary & Ors. 2009 (1) SCR 689= (2009) 3 SCC 281; P. Chinnanna & Ors. Vs. State of A.P.& Ors 1994 (2) Suppl. SCR 426 = (1994) 5 SCC 486; andPrinters (Mysore) Ltd. Vs. M.A. Rasheed & Ors. 2004 (3)SCR 799 = (2004) 4 SCC 460, relied on.

Dayal Singh & Ors. Vs. Union of India & Ors, 2003 (1)SCR 714 = (2003) 2 SCC 593, disapproved.

M/s. Trilok Singh Mohan Singh Vs. State of Haryana &Ors. (1994-2) 107 P.L.R. 144 and Mohinder Singh Sharma& Ors. Vs. State of Haryana & Ors. 1988 PLJ 525, cited.

1.2. In the instant case, the respondents did notfurnish any explanation as to why it took them 16 yearsto challenge the acquisition of their lands when,admittedly, they were aware of it and had, in fact,participated in the proceedings before the LandAcquisition Collector. The High Court ought not to haveentertained the writ petition after 16 years of the passingof the award, and should have dismissed it at thethreshold on the ground of delay and laches on the partof respondent Nos.1 to 17, notwithstanding its earlierdecision in W.P. No.2244 of 1991, which decision,according to the appellant, was otherwisedistinguishable. The judgment of the High Court is setaside and the writ petition of respondents 1 to 17 standsdismissed. [para 22 and 24] [1195-D-F; 1196-A]

Case Law Reference:

(1994-2) 107 P.L.R. 144 cited para 13

1988 PLJ 525 cited para 13

1994 (2) Suppl. SCR 426 relied on para 19

2003 (1) SCR 714 disapproved para 20

TAMIL NADU HOUSING BOARD, CHENNAI v. M.MEIYAPPAN AND ORS.

1185 1186

purpose acquisition of lands was necessary. One of suchschemes was the Ellis Nagar Development Scheme, Madurai,for which about 220 acres of lands in West Madurai, Ponmein,and Madakulam villages was proposed to be acquired.

4. On 17th February 1979, the Government in their G.O.M.No. 311 Housing and Urban Development Departmentapproved the notification under Section 4(1) of the Act. Asstated above, the said notification was published in the officialgazette on 7th March 1979.

5. After the publication of the afore-mentioned notification,enquiry under Section 5A of the Act was conducted, andthereafter, a declaration in terms of Section 6 of the Act wasmade and requisite direction under Section 7 of the Act wasissued by the Government as per G.O.M. No.735 Housing andUrban Development Department dated 2nd June 1980.

6. On 15th March 1982, notices under Section 9(1) and10 of the Act were issued? Notices under Section 9(3) and 10of the Act were served on the owners of the lands and theinterested persons. Enquiry, as envisaged under Section 11 ofthe Act, was conducted on 16th April 1982, 20th April 1982,21st April 1982 and 22nd April 1982. Land owners of the land,subject matter in this appeal, were represented by theirauthorised agent, one Mr. A.R. Rathinam Chettiar.

7. The Award in relation to the said lands was made on28th April 1982, and the compensation was awarded toO.M.SP.L.M. Meyyappa Chettiar, Subramanian Chettiar,Arunachalam Chettiar, Alagappa Chettiar and LakshmananChettiar. According to the appellant, after taking possession ofthe lands in question, on 4th December 1982, these werehanded over to the Tamil Nadu Housing Board, which fact isnow disputed by the contesting respondents. The matter restedthere.

8. However, in December 1997, respondents Nos.1 - 17

From the Judgment & Order dated 18.4.2001 of the HighCourt of Madras in Writ Appeal No. 679 of 1999.

T. Harish Kumar, P. Prasanth, V. Vasudevan for theAppellant.

M.L. Verma, C. Paramasivam, Satya Mitra, P. Ramesh,R. Aneesh, Rakesh K. Sharma for the Respondents.

D.K. JAIN, J. 1. This appeal arises out of the judgmentand order dated 18th April 2001, delivered by a Division Benchof the High Court of Judicature at Madras, affirming thejudgment of a Single Judge of the High Court in W.P. No. 108of 1998, setting aside Notification G.O.M. No.311 Housing andUrban Development Department dated 17th February 1979,published in the Tamil Nadu Gazette dated 7th March 1979,being a notification under Section 4(1) of the Land AcquisitionAct, 1894 (for short “the Act) relating to lands of the respondentscomprised in Survey No. 12/2 and 12/3 in Ponmeni village,Madurai.

2. Respondent Nos.1 to 17 are contesting land owners,and are represented by respondent No.17 whereas respondentNos.18 and 19 are the proforma respondents, viz. the State ofTamil of Nadu and the Special Tehsildar, Ellis NagarDevelopment Scheme.

3. The material facts, giving rise to the present appeal,may be stated thus:

The Government of Tamil Nadu, vide G.O.M. No.1358Housing and Urban Development Department dated 20thSeptember 1978, approved several schemes for providinghousing facilities to people of low income group for which

TAMIL NADU HOUSING BOARD, CHENNAI v. M.MEIYAPPAN AND ORS.

1187 1188

herein preferred a writ petition being W.P. No. 108 of 1998before the High Court of Madras, challenging the acquisitionof their lands, which was contested by the appellant. One of theobjections in the counter affidavit filed on behalf of the appellantin this appeal was as follows:

“It is submitted that the possession of the lands in actionhas been taken over and handed over to Tamil NaduHousing Board on 4.12.82 among other lands acquired forusing them to scheme purpose. After a lapse of 15 yearsthe writ petition has been filed against the acquisition andthe same is bad on the ground of “Laches” (sic). The Landis in possession and enjoyment of the Tamil Nadu HousingBoard since the date of handing over on 4.12.82. Takingundue advantage of the interim injunction, the writpetitioners (sic) are trying to convert the lands into thehouse sites flats by planting stones and forming mud roadsillegally (sic).”

9. Ignoring the said objection to the maintainability of thewrit petition, vide order dated 21st April 1998, the learnedSingle Judge allowed the writ petition of the respondents by ashort order, which reads as under:

“It is not in dispute that facts of this case is covered by thejudgment in W.P. No.2244 of 1991 (sic.) dated 21.4.97.Hence the writ petition is allowed as prayed forappreciating the said judgment. Consequently, theconnected W.M.Ps. are closed. No costs.”

10. Aggrieved by the said order, the appellant herein,preferred intra-court appeal before the Division Bench of theHigh Court. It appears from the record that along with theappeal, an application seeking stay of the operation of thejudgment delivered by the learned Single Judge, was also filed,wherein it was stated that upon delivery of the said judgment,the land owners were taking hectic steps to enter intopossession of the subject lands. The Division Bench again

without examining the question of delay and laches, by theimpugned judgment, dismissed the appeal of the appellantobserving that:

“The learned single judge, taking into consideration, all thematerials available on record, found that the case in handis fully covered by the order of this Court in W.P.No. 2244of 1991 as above. We do not find any good ground to takea different view to that of the order of the learned singleJudge. That apart, we find no error or illegality in the orderof the learned Single judge warranting our interference.”

11. Hence, the present civil appeal.

12. Mr. T. Harish Kumar, learned counsel appearing for theappellant, while assailing the impugned judgment, strenuouslyurged that in light of the decision of this Court in Yunus(Baboobhai) A. Hamid Padvekar Vs. State of Maharashtrathrough its Secretary & Ors.,1 the High Court committed aserious illegality in entertaining a writ petition which badlysuffered from delay and laches, having been filed after a lapseof 16 years of the date of Award, without any explanation forthe delay. Learned counsel argued that the High Court alsofailed to examine the stand of the appellant herein that theearlier decision of the High Court in W.P. No. 2244 of 1991,was clearly distinguishable on facts and thus, its ratio was notapplicable to the facts at hand

13. Per contra, Mr. M.L. Varma, learned senior counselappearing for the respondents contended that the judgment inW.P. No. 2244 of 1991 was based on the decision in W.P. No.1326 of 1982, and the latter judgment operated in rem and notin personam, and therefore, each land owner was not requiredto challenge the notification under Section 4(1) of the Actindividually. Commending us to the decisions of the Punjab andHaryana High Court in M/s. Trilok Singh Mohan Singh Vs.

TAMIL NADU HOUSING BOARD, CHENNAI v. M.MEIYAPPAN AND ORS. [D.K. JAIN, J.]

1189 1190

1. (2009) 3 SCC 281.

State of Haryana & Ors.2 and Mohinder Singh Sharma & Ors.Vs. State of Haryana & Ors.,3 learned counsel contended thatin cases when the compensation is not granted or thepossession is not taken over for a long period, the acquisitionbecomes bad and since in the instant case, possession hasnot been taken over by the Government so far, the acquisitionmust be declared null and void and appeal should bedismissed.

14. At the outset, we must state that on the facts of thiscase, the High Court was not justified in entertaining the writpetition. In our opinion, the writ petition must fail on the shortground that the writ petition had been filed 16 years after theaward was announced by the Collector. It is trite law that delayand laches is one of the important factors which the High Courtmust bear in mind while exercising discretionary power underArticle 226 of the Constitution. If there is such negligence oromission on the part of the petitioner to assert his right which,taken in conjunction with the lapse of time and othercircumstances, causes prejudice to the opposite party, the HighCourt must refuse to invoke its extra-ordinary jurisdiction andgrant relief to the writ petitioner.

15. In Durga Prashad Vs. Chief Controller of Imports andExports,4 this Court had held that it is well-settled that the reliefunder Article 226 is discretionary, and one ground for refusingrelief under Article 226 is that the petitioner has filed thepetition after delay for which there is no satisfactory explanation.It was noted that:

“4. Gajendragadkar, C.J., speaking for the ConstitutionBench, in Smt Narayani Devi Khaitan v. The State ofBihar5 observed:

“It is well-settled that under Article 226, the power of theHigh Court to issue an appropriate writ is discretionary.There can be no doubt that if a citizen moves the HighCourt under Article 226 and contends that his fundamentalrights have been contravened by any executive action, theHigh Court would naturally like to give relief to him; but evenin such a case, if the petitioner has been guilty of laches,and there are other relevant circumstances which indicatethat it would be inappropriate for the High Court to exerciseits high prerogative jurisdiction in favour of the petitioner,ends of justice may require that the High Court shouldrefuse to issue a writ. There can be little doubt that if it isshown that a party moving the High Court under Article 226for a writ is, in substance, claiming a relief which under thelaw of limitation was barred at the time when the writpetition was filed, the High Court would refuse to grant anyrelief in its writ jurisdiction. No hard and fast rule can belaid down as to when the High Court should refuse toexercise its jurisdiction in favour of a party who moves itafter considerable delay and is otherwise guilty of laches.That is a matter which must be left to the discretion of theHigh Court and like all matters left to the discretion of theCourt, in this matter too discretion must be exercisedjudiciously and reasonably.”

16. In Rabindranath Bose & Ors. Vs. The Union of India& Ors.,6 a Constitution Bench of this Court, dealing with thesame issue in relation to Article 32 of the Constitution, hadobserved that:-

“We are of the view that no relief should be given topetitioners who, without any reasonable explanation,approach this Court under Article 32 of the Constitutionafter inordinate delay. The highest Court in this land hasbeen given original jurisdiction to entertain petitions underArticle 32 of the Constitution. It could not have been the

1191 1192

2. (1994-2) 107 P.L.R. 144

3. 1988 PL] 525.

4. (1969) 1 SCC 185.

5. C.A. No. 140 of 1964, judgment dated 22nd Sepetember 1964. 6. (1970) 1 SCC 84.

intention that this Court would go into stale demands aftera lapse of years. It is said that Article 32 is itself aguaranteed right. So it is, but it does not follow from thisthat it was the intention of the Constitution-makers that thisCourt should discard all principles and grant relief inpetitions filed after inordinate delay.”

17. Though the afore-extracted observations inRabindranath Bose (supra) relate to Article 32 of theConstitution, a fortiori, they would apply to writ petitions filedunder Article 226 of the Constitution as well. (See: Yunus(Baboobhai) A. Hamid Padvekar (supra)).

18. Similarly, in Tridip Kumar Dingal & Ors. Vs. State ofWest Bengal & Ors.,7 (to which one of us (D.K. Jain, J.) was aparty), this Court had observed as under:

“56. We are unable to uphold the contention. It is no doubttrue that there can be no waiver of fundamental right. Butwhile exercising discretionary jurisdiction under Articles 32,226, 227 or 136 of the Constitution, this Court takes intoaccount certain factors and one of such considerations isdelay and laches on the part of the applicant in approachinga writ court. It is well settled that power to issue a writ isdiscretionary. One of the grounds for refusing reliefs underArticle 32 or 226 of the Constitution is that the petitioneris guilty of delay and laches.

57. If the petitioner wants to invoke jurisdiction of a writcourt, he should come to the Court at the earliestreasonably possible opportunity. Inordinate delay inmaking the motion for a writ will indeed be a good groundfor refusing to exercise such discretionary jurisdiction. Theunderlying object of this principle is not to encourageagitation of stale claims and exhume matters which havealready been disposed of or settled or where the rights of

third parties have accrued in the meantime” (See also: P.S.Sadasivaswamy Vs. State of Tamil Nadu8.)

19. Moreover, in relation to the land acquisitionproceedings, the Court should be loathe to encourage stalelitigation as the same might hinder projects of publicimportance. The Courts are expected to be very cautious andcircumspect about exercising their discretionary jurisdictionunder Article 226 or Article 32 of the Constitution if there hasbeen inordinate unexplained delay in questioning the validity ofacquisition of land. In this regard, it will be useful to advert tothe observations made in P. Chinnanna & Ors. Vs. State ofA.P. & Ors.,9 wherein this Court had observed thus:-

“In fact, in relation to acquisition proceeding involvingacquisition of land for public purposes, the court concernedmust be averse to entertain writ petitions involving thechallenge to such acquisition where there is avoidabledelay or laches since such acquisition, if set aside, wouldnot only involve enormous loss of public money but alsocause undue delay in carrying out projects meant forgeneral public good.” (See also: Hari Singh & Ors. Vs.State of U.P. & Ors.10.)

20. We may, however, note that in Dayal Singh & Ors. Vs.Union of India & Ors11, a three Judge bench of this Court, whiledealing with a case of land acquisition, had observed that:

“Primarily a question of delay and laches is a matter whichis required to be considered by the writ court. Once thewrit court has exercised its jurisdiction despite delay andlaches on the part of the respondents, it is not for us at thisstage to set aside the order of the High Court on thatground alone particularly when we find that the impugned

1193 1194

7. (2009) 1 SCC 768.

8. (1975) 1 SCC 152.

9. (1994) 5 SCC 486.

10. (1984) 2 SCC 624.

judgment is legally sustainable.”

21. We feel that the view echoed in Dayal Singh (supra)is not in consonance with the decision of the Constitution Benchin Rabindranath Bose (supra), which was not noticed in thesaid judgment. It is also pertinent to note that subsequently inPrinters (Mysore) Ltd. Vs. M.A. Rasheed & Ors., another threeJudge Bench of this Court, had observed as follows:-

“Furthermore, the writ petition should not have beenentertained keeping in view the fact that it was filed aboutthree years after making of the allotment and execution ofthe deed of sale. The High Court should have dismissedthe writ petition on the ground of delay and laches on thepart of the first respondent. The Division Bench of the HighCourt also does not appear to have considered the pleataken by the appellant herein to the effect that the firstrespondent had been set up by certain interested persons.”

22. In the present case, as already stated, the respondentsdid not furnish any explanation as to why it took them 16 yearsto challenge the acquisition of their lands, when admittedly theywere aware of the acquisition of their lands and had in factparticipated in these proceedings before the Land AcquisitionCollector. We have no hesitation in holding that the High Courtought not to have entertained the writ petition of therespondents after 16 years of the passing of the award. TheHigh Court should have dismissed the writ petition at thethreshold on the ground of delay and laches on the part ofrespondent Nos.1 to 17, notwithstanding its earlier decision inW.P. No.2244 of 1991, which decision, according to theappellant, was otherwise distinguishable.

23. In light of the view we have expressed, we deem itunnecessary to evaluate the merits of other submissionscanvassed by learned counsel for both the parties.

24. For the reasons aforesaid, the impugned judgmentcannot be sustained. Accordingly, the appeal is allowed; theimpugned judgment is set aside and the writ petition, filed byrespondent Nos. 1 to 17 in this appeal, stands dismissed.

25. Parties to bear their own costs.

R.P. Appeal allowed.

1195 1196

11. (2003) 2 SCC 593.

12. (2004) 4 SCC 460.

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