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(2015) 119 (3) CWN (SC) 1

IN THE SUPREME COURT OF INDIA

(BEFORE M.Y. EQBAL AND ARUN MISHRA, JJ.)

M/s. Tech Invest India (Pvt.) Ltd.
Thr. Major Shareholder Rajiv Gosain …..Appellant
Vs.
M/s. Assam Power & Electricals Ltd.
and others ...Respondents

Civil Appeal Nos. 6055-6056 of 2015; (Arising out of SLP (Civil) Nos. 27113-27114 of 2013); Civil Appellate Jurisdiction; Judgment on: 11.08.2015

Companies Act, 1956, Section 433 – Official Liquidator was appointed and possession of the assets were taken over – assets of the company had been placed in public auction for sale – appellant-company filed an application for stay of auction - the company court below refused to stay – one shareholder filed an application to set aside the auction sale due to erroneous auction notice and failed to mention reserve price – appeal was preferred to Division bench – the appeal rejected on the ground that the company did not raise any objection at the time of confirmation of the sale – review application was filed and dismissed – it is noticed that objection raised by the company had not been considered by the High Court – objections were not heard on merit while confirming the auction sale – conduct of the Official Liquidator in selling the properties was not proper without fixing any reserve price – considering the illegality and irregularity committed in auction sale of the property, the entire process is vitiated – company court below failed to exercise its judicial discretion to see that properties are sold at a reasonable price – the auction sales are liable to be set aside.
Ratio decidendi:-
The conduct of the Official Liquidator in selling the properties was not proper without fixing any reserve price and committed illegality and irregularity in auction sale. The Company Court failed to exercise its judicial discretion to see the properties are to be sold at a reasonable price.

Observations of the Court:-
The conduct of the Official Liquidator in selling the property at a price of Rs.45.45 lakhs without proper publicity through advertisement or fixing any reserve price for the assets cannot be sustained in law, particularly, when the predecessor Official Liquidator reported that the property put in auction is of much higher valuation.(para 16)
The illegality and irregularity committed in the auction sale of the property, the entire process is vitiated. Further we are of the view that the Company Judge also failed to exercise its judicial discretion to see that the properties are sold at a reasonable price.(para 17)
When the valuation report was submitted before the Company Judge, it ought to have been disclosed the secured creditors and other interested persons in order to ascertain the market value of the property before property was auction sold. Since the same has not been done, the auction sale and the order confirming the sale are liable to be set aside.(para 18)

Held:-
The Official Liquidator is directed to forthwith recover the possession of the properties and proceed with a fresh auction after obtaining the fresh valuation report and fixing the reserve bid. Needless to say that all further actions shall be taken in accordance with the procedure established by law.

Advocates who appeared in this Case:-
For Petitioner(s): Mrs. Priya Puri, Mr. Ranjay Kr. Dubey
For Respondent(s): Mr. M. T. George, Mr. Ravindra Kumar, Mr. Subhash Chandra Jain, Mr. M. C. Dhingra, Mr. Rajinder Mathur, Mr. Subhash Chandra Jain

The Judgement of the Court was delivered by M. Y. Eqbal, J.:-

1. Leave granted.

2. These appeals by special leave are directed against the judgments dated 25.09.2012 and 16.07.2012 of the High Court of Uttarakhand at Nainital, which dismissed the appeal and review application filed by the appellant company challenging the order confirming the sale and handing over the assets of the appellant-company to the respondent.

3. The facts of the case lie in a narrow compass. The respondent no. 1 had sent a statutory notice under Section 434 of the Companies Act, 1956 and filed a winding up petition against the appellant-company alleging that the appellant-company had taken a loan of Rs.6 lakhs from respondent no.1 on 23rd March, 1999 and promised to repay it within 30 days with 18% interest. The appellant-company was alleged to have, however, initiated measures to shut down its operations and sell its assets and issued closure notices in May, 1999 without repaying the dues to the respondent.

4. The Company Judge appointed an Official Liquidator on 14.10.1999 and the possession of the assets of the appellant-company was taken over by the Official Liquidator who was also granted permission to assess the valuation in terms of order dated 23.02.2000. The Official Liquidator filed an application for selling the assets of the appellant-company through a public auction and it was allowed on 11.08.2003. The public auction was to be held on 29.09.2003.

5. The appellant-company filed an application to stay the auction on the ground that its assets worth Rs.7 crores were going to be auctioned without fixing the minimum reserve price and after issuing the auction sale notice only once. The appellant accordingly expressed apprehension about the highest price being secured. The Company Judge disposed of the application vide order dated 26.09.2003 refusing to interfere with the auction and directed the appellant-company to raise the aforesaid objections at the time of confirmation of sale.

6. In the auction, respondent no.3 purchased the assets of the appellant-company for Rs.45.55 lakhs and deposited 10% of the consideration. Vide order dated 28.05.2004, respondent no.3 was directed to deposit the remaining amount after it was noted that the counsel for the major shareholders in the appellant-company had no objection. Noting that respondent no.3 had deposited the said amount as directed, the sale in favour of respondent no. 3 was confirmed and possession of the assets of the company was directed to be given vide order dated 30.06.2004.

7. Rajiv Gosain, a shareholder in the appellant-company, filed an application for rejecting the auction sale and for re-auction. It was alleged that respondent no. 1 and the Official Liquidator had appointed S.K. Ahuja & Associates who had inspected the assets of the appellant-company and valued the assets to be worth Rs. 6.25 crores. The same was said to have been communicated to the petitioner vide letter dated 15.05.2000 and it was in turn said to have been communicated by the appellant-company to the Official Liquidator vide letter dated 26.06.2003. The Official Liquidator was, however, alleged to have not informed the High Court of the valuation by S.K. Ahuja and Associates and consequently secured permission for valuation on 23.02.2000 pursuant to which the Official Liquidator was alleged to have illegally and with mala fide intention appointed an ineligible valuer, Mr. S.B. Bhargava, to value the assets of the appellant-company. Mr. S.B. Bhargava was alleged to have drastically and illegally reduced the value of the assets of the appellant-company to Rs. 76.80 lakhs and his report was submitted to the High Court by the Official Liquidator.

8. The same was alleged to have led to the issuance of an erroneous auction notice which did not mention minimum reserve price and many other vital details and which notice only came to the knowledge of a very limited number of individuals. The auction was further challenged on the ground of procedural irregularity.

9. One Advocate Mr.Sharad Sharma appeared before the High Court on 13.04.2004 claiming to represent the shareholders of the appellant-company and the matter was listed for filing of objections by him and on 30.04.2004 one last opportunity was given to him for filing of objections.

10. On 28.05.2004, the High Court, after noting that the counsel representing the shareholders of the appellant-company had no objections, directed respondent no.3 to deposit the remaining amount. On 30.06.2004, the High Court confirmed the sale in favour of respondent no. 3 and the assets of the appellant-company were directed to be given to respondent no.3.

11. The appellant-company filed an appeal to the Division Bench of the High Court contending that its assets were worth much more than the price at which it was sold and that its objections were not considered at the time of confirmation of sale. The Division Bench dismissed the appeal vide judgment dated 16.07.2012 on the ground that the counsel for the appellant-company had not made any objections at the time the sale was confirmed.

12. The appellant-company filed a review application alleging that the counsel who claimed to be representing the appellant-company before the Company Judge on 28th May, 2004 was not engaged by them and hence there was an error on the face of judgment dated 16.07.2012 which had made recorded the same. The High Court, however, held that such a statement in the judgment dated 16.07.2012 was a mere repetition of what was stated in the order dated 28.05.2004 of the Company Judge and hence an error, if any, was in the order dated 28.05.2004 which was appealed against by the appellant-company. The High Court held that the appeal filed by the appellant-company was dismissed mainly because the sale was confirmed in favour of respondent no. 3, possession handed over and encumbrances created, before any steps were taken by the appellant-company. The High Court accordingly dismissed the review application vide judgment dated 25.09.2012.

13. Hence, the present appeals.

14. We have heard learned counsel for the parties. We have also perused the entire facts of the case and the order passed by the High Court.

15. Prima facie, it appears that the objections raised by the appellant were not properly considered inasmuch as the objections were not heard on merit and the auction sale was confirmed. Shri Sharad Sharma, Advocate, had made the aforesaid statement before the Company Court on 28.5.2004, however, he had never been engaged either by Mr. Rajiv Gosain or by any person authorized by him. Therefore, making statement by the Advocate that he has no instruction or waiving the disposal of objection on merit was without any basis which ought to have been considered by the High Court.

16. Be that as it may, the conduct of the Official Liquidator in selling the property at a price of Rs.45.45 lakhs without proper publicity through advertisement or fixing any reserve price for the assets cannot be sustained in law, particularly, when the predecessor Official Liquidator reported that the property put in auction is of much higher valuation.

17. Having considered the illegality and irregularity committed in the auction sale of the property, the entire process is vitiated. Further we are of the view that the Company Judge also failed to exercise its judicial discretion to see that the properties are sold at a reasonable price.

18. Apart from that, when the valuation report was submitted before the Company Judge, it ought to have been disclosed the secured creditors and other interested persons in order to ascertain the market value of the property before property was auction sold. Since the same has not been done, the auction sale and the order confirming the sale are liable to be set aside.

19. We, therefore, allow these appeals and set aside the judgment and order passed by the Company Judge and also the order passed by the High Court in appeal.

20. Consequently the Official Liquidator is directed to forthwith recover the possession of the properties and proceed with a fresh auction after obtaining the fresh valuation report and fixing the reserve bid. Needless to say that all further actions shall be taken in accordance with the procedure established by law.
……………………………. Arun Mishra, J.

(2015) 119 (3) CWN (SC) 8

IN THE SUPREME COURT OF INDIA

(BEFORE A.K. SIKRI AND ROHINTON FALI
NARIMAN, JJ.)

Commissioner of Central Excise,
Nagpur-I .....Appellant(s)
Vs.
M/s. Indorama Synthetics (I) Ltd. .....Respondent(s)

Civil Appeal No. 1834 of 2006; Civil Appellate Jurisdiction; Judgment on: 21.08.2015

A. Central Excise Act, 1944, Section 4; Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, Rule 6 – duty drawback under Export Import (EXIM) policy – Assessee is manufacturer of allied products of polyester having license for duty drawback on export – goods sold at lesser price in domestic market –– assesse surrendered its advance license and received drawback duty from DGFT – revenue issued show-cause notices for payment of difference of duty – Commissioner confirmed the demand of Revenue and levied penalty and interest – CESTAT (Tribunal) held that statutory benefits allowed by statutory authorities cannot be considered as additional consideration – “additional transaction” for the purpose of arriving “transaction value”, the Commissioner has rightly came to the conclusion that the price paid for the goods by the buyer enabling the seller of the goods to effect duty free import of the raw materials and bringing down the cost of production/procurement, is a consideration – order of CESTAT (Tribunal) set aside.

Ratio decidendi:-
The price paid for the goods by the buyer enabling the seller of the goods to effect duty free import of the raw materials and bringing down the cost of production/procurement, is a consideration and/or to be treated as “additional transaction” for arriving “transaction value.

Observations of the Court:-
In Commissioner of Central Excise, Bhubaneswar – II v. IFGL Refractories Ltd.2 this Court has held such a consideration, namely, duty drawback, to be the 'additional consideration' inasmuch as the benefit of duty drawback accruing to the seller was the result of surrender of advance licence by the buyers. The discussion and the rationale which goes into forming the aforesaid opinion is contained in para 9 of the judgment, which reads as under:
“9. Ultimately it was agreed that M/s. Visakhapatnam will surrender its advance licences and in lieu thereof the respondents will get the advance intermediate licences. Thus, without the advance licences of M/s. Visakhapatnam Steel Plant, being made available to the respondents, the prices would have been as were quoted earlier. It is only because of the advance licences being surrendered by M/s. Visakhapatnam Steel Plant and in lieu thereof advance intermediate licences being made available to the respondents that the respondents could offer lower prices.(para 3)
The assessee had been selling polyester staple fiber to two classes of domestic buyers, in addition to exporting the same in the international market. One of the category of domestic buyers were those who were having advance licence and the other category without any such licence. The assessee had issued two different price lists. Those buyers who had advance licence but agreed to surrender the said licence, were offered price of Rs.37.50 per kg. Other category, with no such licence, were sold the goods at Rs.50 per kg. As per the assessee, it was exporting polyester staple fiber during the relevant period at an average price of Rs.36 per kg against its own advance licence for exports.(para 5)
The advance licence holder category buyers got their licences invalidated/surrendered. Thereafter, DGFT issued licence in favour of the assessee herein permitting it to procure the goods duty free from indigenous manufacturers and on the supply of this material to such buyers, treating the same as 'deemed exports', thereby earning the benefits of duty drawback.(para 7)
The aforesaid narratives would demonstrate that the assesse could get the duty drawback and it could happen when advance licence holder category of buyers got their advance licences invalidated thereby surrendering the benefits accrued under such advance licence. Issue for consideration is as to whether it would constitute 'additional consideration' received by the assessee as per the definition of 'transaction value' contained in Section 4 of the Act read with Rule 6 of the Rules.(para 8)
In the case of IFGL4, this Court has given the answer in the affirmative to the aforesaid issue. It is also conceded by the learned counsel appearing for the assessee that the said judgment was rendered on almost identical fact situation. That is why the endeavour of Mr. Lakshmikumaran is to impress upon us to take a different view. He sought to discredit the opinion of the Court in the said case by arguing that the advance licence for intermediate supply was granted by the DGFT to the assesse under the EXIM Policy and it had nothing to do with the buyer. He conceded that it could happen only after buyers got their advance licences invalidated. But his explanation was that it was not necessary that such a licence could be issued to the assesse merely because the advance licence in favour of the buyer was invalidated.(para 11)
We are afraid, such a distinction between consideration and condition, as sought to be drawn by the learned counsel for the assessee, would not apply to the instant case. It was possible if the transaction between the buyers and the assessee was seen in isolation. However, in the present case, it needs to be emphasized at the cost of repetition that the resultant effect of invalidating the advance licence by the buyer was issuance of licence for intermediate supply in favour of the assessee and the said licence enured certain benefits in favour of the assessee. In the present case, on these facts, we have to simply see as to whether the definition of 'transaction value', as contained in Section 4 of the Act read with Rule 6 of the Rules, would encompass this benefit as amounting to additional consideration. Our conclusion is that it would come within the ambit of additional consideration indirectly flowing from the buyers to the assessee. Therefore, the instant case is more akin to the decision in Re Soames7.(para 17)
We are of the opinion that to the fact that additional monetary consideration, the Commissioner has rightly come to the conclusion with regard in addition to the price being paid for the goods, i.e. transfer of advance import licence in favour of the seller by the buyer enabling the seller of the goods to effect duty free import of the raw materials and bringing down the cost of production/procurement, is a consideration, the monetary value of which has to be considered under the provisions of the Rules, i.e. Rule 6 thereof.(para 19)

Held:-
We are of the considered opinion that this case is squarely covered by the judgment of this Court in IFGL's11 case. We, thus, allow this appeal, set aside the decision of the Tribunal and restore the order passed by the Commissioner. In the facts and circumstances of this case, there shall be no order as to costs.

B. “Transaction value”
It means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with marketing the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.”

List of cases cited:-
IFGL Refractories Ltd. Vs. Commissioner of Central Excise, Bhubaneswar-II 2001 (134) ELT 230 (relied on)
Commissioner of Central Excise, Bhubaneswar – II Vs. IFGL Refractories Ltd., (2005) 6 SCC 713 (followed)
Thomas Vs. Thomas, (1842) 2 QB 851 (referred to)
Re Soames, (1897) 13 TLR 439 (referred to)
Commissioner of Central Excise, Bangalore Vs. Mazagon Dock Ltd., 2005 (187) ELT 3 (SC):: 2005 (127) ECR 268 (SC) (referred to)

The Judgment of the Court was delivered by A.K. Sikri, J.:-

1. The respondent (hereinafter referred to as the 'assessee') is engaged in the manufacture of polyester chips, polyester staple fibre, polyester filament yarn and other goods. It had been clearing the same on payment of central excise duty. The period involved in this appeal is 1999-2002. During this period, the goods that were cleared as 'deemed exports' to advance licence holders were at a price lower than what was being charged to the other buyers who did not hold an advance licence. As per the Commissioner of Central Excise, Nagpur-I (hereinafter referred to as the 'Revenue'), it found that the reason for selling the goods to the aforesaid particular class of buyers at a lesser price was that the assessee had received 'additional consideration' and, therefore, its inclusion was necessitated having regard to the formula provided for arriving at the 'transaction value' contained in the statutory scheme.

2. We would narrate the details of purported 'additional consideration' at a later point of time at an appropriate stage. However, we may point out here that on surrender of advance licence with the aforesaid buyers, the assessee could receive drawback from the Government/Director General of Foreign Trade (DGFT) as per the Export-Import (EXIM) Policy and this was stated to be the additional consideration. Suffice it to point out at this juncture that the Revenue issued five separate show cause notices asking the assessee to pay the differential duty as the said additional consideration was to be included while arriving at the 'transaction value' of the said goods in terms of Section 4 of the Central Excise Act, 1944 (hereinafter referred to as the 'Act') read with Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter referred to as the 'Rules'). The assessee challenged the stand of the Revenue by filing replies. After examining the matter, the Commissioner took the view that price was not the sole consideration flowing from the buyer to the assessee. Not only such buyers, who were sold the goods at a lower price, were 'related persons', even the goods were sold at depressed price. Therefore, the Commissioner confirmed the demand of differential duty as mentioned in the show cause notices and also levied penalties and interest. The assessee challenged the order of the Commissioner by filing appeal before the Custom Excise & Service Tax Appellate Tribunal (for short, the 'Tribunal') taking the plea that 'additional consideration' under Section 4 of the Act refers only to the additional consideration flowing from the buyer to the assessee and in the present case no such additional consideration flew from the advance licence buyers of the 'deemed exports'. The Tribunal, in arriving at this conclusion, relied upon its own decision in the case of IFGL Refractories Ltd. v. Commissioner of Central Excise, Bhubaneswar-II1 wherein it was held that statutory benefits allowed by statutory authorities cannot be considered as additional consideration flowing to a manufacturer from the buyer. In the opinion of the Tribunal, the drawback was received from the Government and not from the buyers and, therefore, such drawback could not be treated as additional consideration for the purpose of arriving at 'transaction value' as per the definition thereof under Section 4 of the Act.

3. Pertinently, the decision of the Tribunal in IFGL's case stands overruled by this Court in Commissioner of Central Excise, Bhubaneswar – II v. IFGL Refractories Ltd.2 In the said case, this Court has held such a consideration, namely, duty drawback, to be the 'additional consideration' inasmuch as the benefit of duty drawback accruing to the seller was the result of surrender of advance licence by the buyers. The discussion and the rationale which goes into forming the aforesaid opinion is contained in para 9 of the judgment, which reads as under:
“9. Ultimately it was agreed that M/s. Visakhapatnam will surrender its advance licences and in lieu thereof the respondents will get the advance intermediate licences. Thus, without the advance licences of M/s. Visakhapatnam Steel Plant, being made available to the respondents, the prices would have been as were quoted earlier. It is only because of the advance licences being surrendered by M/s. Visakhapatnam Steel Plant and in lieu thereof advance intermediate licences being made available to the respondents that the respondents could offer lower prices. The surrendering of licences by M/s. Visakhapatnam Steel Plant and as a result thereof the respondents getting the licences had nothing to do with any Import and Export Policy. It was directly a matter of contract between the two parties. This resulted in additional consideration by way of “advance intermediate licence” flowing from M/s. Visakhapatnam Steel Plant to the respondents. The value received therefrom is includible in the price. The Tribunal was wrong in stating that such an arrangement can never be placed upon the platform of additional consideration. In so stating the Tribunal has ignored and/or lost sight of the fact that it was in pursuance of the contract of sale between the respondents and M/s. Visakhapatnam Steel Plant that the licences were made available to the respondents. The Export and Import Policy had nothing to do with the arrangements/contract under which the licences flowed from the buyer to the seller. At the cost of repetition it must be mentioned that had the respondents had advance intermediate licence on their own i.e. without M/s.Visakhapatnam Steel Plant having to surrender its licences for the purposes of the contract, then the reasoning of the Tribunal may have been correct. But here, in pursuance of the contract of sale, there is directly a flow of additional consideration from the buyer to the seller. The value thereof has to be added to the price. We are thus unable to accept the broad submission that where parties take advantage of policies of the Government and the benefits flowing therefrom, then such benefit cannot be said to be an “additional consideration”.

4. In a matter like this, this Court could simply follow the aforesaid judgment and set aside the order of the Tribunal, allowing this appeal. However, Mr. V. Lakshmikumaran, learned counsel appearing for the assessee, made a fervent and passionate plea that the aforesaid judgment of this Court in IFGL's3 case needs re-consideration. He, thus, pleaded for referring the matter to a larger Bench. Detailed and elaborate submissions were made in this direction which were stoutly refuted by the learned counsel for the Revenue. We may immediately record that the assessee's counsel has not succeeded in persuading us to refer the matter to a larger Bench. Hereinafter, we record our reasons for taking this view. For this purpose, we may first state at this stage the mechanism that goes into getting the benefit of duty drawback in the kitty of the assessee.

5. As mentioned above, the assessee had been selling polyester staple fiber to two classes of domestic buyers, in addition to exporting the same in the international market. One of the category of domestic buyers were those who were having advance licence and the other category without any such licence. The assessee had issued two different price lists. Those buyers who had advance licence but agreed to surrender the said licence, were offered price of Rs.37.50 per kg. Other category, with no such licence, were sold the goods at Rs.50 per kg. As per the assessee, it was exporting polyester staple fiber during the relevant period at an average price of Rs.36 per kg against its own advance licence for exports.

6. Advance licence is issued under the EXIM Policy. The holder of the advance licence could procure imported raw material against the said licence for manufacture of finished goods. However, as per para 7.7 of the EXIM Policy 1997-2002, the advance licence holder intending to source the materials from indigenous source in lieu of direct import had the option to source them against advance release orders denominated in foreign exchange/Indian rupees. In such a case, the licence was to be invalidated for direct import and permission in the form of ARO was to be issued entitling the supplier of the goods the benefits of deemed export. Para 10.2 of the EXIM Policy laid down the categories of supply which would be recorded as 'deemed exports' under the policy. The first such clause (a) was 'supply of goods against advance licence/DFRC under the duty exemption/ remission scheme. Under para 10.3, benefits for deemed exports were specified. Advance licence for intermediate supply/deemed export was specified as one of the benefits for deemed exports.

7. The advance licence holder category buyers got their licences invalidated/surrendered. Thereafter, DGFT issued licence in favour of the assessee herein permitting it to procure the goods duty free from indigenous manufacturers and on the supply of this material to such buyers, treating the same as 'deemed exports', thereby earning the benefits of duty drawback. Para 7.11 of the EXIM Policy facilitated this process and it reads as under:
“7.11 Advance Licence for Intermediate Supplies–The Advance Licence for intermediate supply shall be considered by the licensing authority concerned. The Advance Licence for intermediate supply shall be issued after making the licence invalid for direct import of items to be supplied by the intermediate manufacture. In such cases, a copy of the invalidation letter will be given to the licence holder and copy thereof will be sent to the intermediate supplier as well as the licensing authority of the intermediate supplier as well as the licensing authority of the intermediate supplier. The licencee in such case has an option either to supply the intermediate product to holder of Advance Licence for physical exports/deemed exports or to export directly.”

8. The aforesaid narratives would demonstrate that the assesse could get the duty drawback and it could happen when advance licence holder category of buyers got their advance licences invalidated thereby surrendering the benefits accrued under such advance licence. Issue for consideration is as to whether it would constitute 'additional consideration' received by the assessee as per the definition of 'transaction value' contained in Section 4 of the Act read with Rule 6 of the Rules. We, therefore, shall reproduce the relevant portion of the provisions of Section 4 which existed at the material time, which read as under:
“4. Valuation of excisable goods for purposes of charging of duty of excise.–(1)Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall –
(a)in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value.
xx xx xx
(d)“transaction value” means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with t, marketing he sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.”

9. As is clear from the reading of the aforesaid provision, the duty of excise is chargeable on the excisable goods with reference to the value of such goods. Generally, the price of the goods, i.e. the price at which such goods are ordinarily sold by the assessee to a buyer is to be the value of the goods. This value is called the 'transaction value'. The Central Government has also framed the Rules which, inter alia, lay down the provisions for determination of value. Rule 6 thereof, with which we are specifically concerned, reads as under:
“RULE 6.Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee.
Explanation.-For removal of doubts, it is hereby clarified that the value, apportioned as appropriate, of the following goods and services, whether supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale of such goods, to the extent that such value has not been included in the price actually paid or payable, shall be treated to be the amount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely:
(i)value of materials, components, parts and similar items relatable to such goods;
(ii)value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods;
(iii)value of material consumed, including packaging materials, in the production of such goods;
(iv)value of engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods.”

10. Even when these goods are sold by the assessee at different prices to different classes of buyers (not being related persons), each such price is to be deemed to be the normal price of such goods in relation to each class of buyers. However, as per the definition of 'transaction value' contained in this very section, i.e. Section 4(3)(d), certain charges can be added to the price at which the goods are actually sold, under certain circumstances. These include the provision for advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty commission etc. In the present case, we are not concerned with this aspect. However, Rule 6 of the Rules specifies that if the goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4, then the value of such goods shall be deemed to be the aggregate of such transaction value plus the 'amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee'. The implication of this Rule is that any form of additional consideration which flows from the buyer to the assessee, monitory value thereof is to be included while arriving at the transaction value. It is not necessary that such an additional consideration is to flow directly and even indirect consideration is includible. It is in this context we have to examine as to whether the consideration in the form of drawback, which accrued in favour of the assessee, could be connected with the buyer. To put it otherwise, though the immediate source of the duty drawback is the Government, whether its flow can be traced back to the buyer? If it is so, it may become a case of indirect consideration coming from the buyer and can be added to the transaction value.

11. In the case of IFGL4, this Court has given the answer in the affirmative to the aforesaid issue. It is also conceded by the learned counsel appearing for the assessee that the said judgment was rendered on almost identical fact situation. That is why the endeavour of Mr. Lakshmikumaran is to impress upon us to take a different view. He sought to discredit the opinion of the Court in the said case by arguing that the advance licence for intermediate supply was granted by the DGFT to the assesse under the EXIM Policy and it had nothing to do with the buyer. He conceded that it could happen only after buyers got their advance licences invalidated. But his explanation was that it was not necessary that such a licence could be issued to the assesse merely because the advance licence in favour of the buyer was invalidated. He emphasized that DGFT could still refuse to issue the advance licence for intermediate supply to the assessee.

12. This argument does not convince us at all. Fact remains that the issuance of advance licence for intermediate supply to the assessee was facilitated as a result of surrender of advance licence in favour or the buyer by the buyer. Thus, getting the licence invalidated for direct import of items in favour of the buyer was the trigger point for issuance of the advance licence for intermediate supply in favour of the assessee. Possibility of refusal on the part of DGFT to issue licence in favour of the assessee is only in the realm of conjecture. Fact is that the assessee got the licence and it became possible only on account of sacrifice made by the buyers. Further, what is important is that the buyers got their advance licences for direct import in their favour invalidated with the sole purpose of purchasing the polyester staple fiber from the assessee at lesser price, i.e. Rs. 37.50 per kg. Therefore, the argument of the assessee that benefit in the form of imports without payment of duty flows to the assessee only pursuant to and based on licence issued by DGFT to the assessee and does not flow from the invalidation letter received by the customer from DGFT is too ingenuous an argument to be accepted.

13. Another argument which was advanced by the learned counsel for the assessee was that discounted price is charged from the advance licence holder category of buyers by the assesse because of saving in customs duty on inputs due to statutory notification with consequent reduction in cost of production and, therefore, it is not a consideration flowing from a buyer. In this behalf, the submission was that the customs duty, otherwise leviable on the inputs going into the manufacture of polyester staple fiber, is exempted by the statutory notification issued by the Central Government, being Notification No. 31/1997-CUS, and it is because of the benefit availed by the assessee under this Notification that it is able to effect supply of polyester staple fiber on discounted price to an ultimate exporter holding advance licence. Therefore, the additional discount offered to a customer, who is the exporter, is never an additional consideration.

14. The aforesaid argument of the learned counsel for the assesse may appear to be impressive, when taken in isolation i.e. without having regard to all the attending facts. However, when the argument is tested keeping in view the entirety of the circumstances, as already taken note of above, the hollowness of this argument stands exposed, inasmuch as, this argument glosses over the fundamental fact that the assessee had been able to get the benefit of Notification No. 31/1997-CUS based on licence issued by DGFT in its favour and the raison d'etre for issuance of said licence by the DGFT to the assessee was invalidation of the advance licence by the buyers. Therefore, the source or gangotri from where the benefit has ultimately reached the assessee is the advance licences which were held by the buyers and their act of invalidation made it possible to flow down the benefit so as to reach the stream of the assessee.

15. Yet another argument which was raised by Mr. Lakshmikumaran was that carving out this category of buyers, namely, those who are/were the holders of advance licence, to be eligible for purchase at a discounted price was only a 'condition for sale of goods' put forth by the assessee. He submitted that 'it was not a consideration for sale of goods'. He, thus, drew distinction between condition for sale and consideration for sale of goods and in support of this submission referred to the celebrated and classic judgment of the English Court in Thomas v. Thomas5. This judgment has been analysed by Chitty on Contracts (31st Edition–Volume I) and Mr. Lakshmikumaran made the said analysis as part of his submission. That was a case where a testator, shortly before his death, expressed a desire that his widow should, during her life, have the house in which he lived, or £100. After his death, his executors 'in consideration of such desire' promised to convey the house to the widow during her life or for so long as she should continue a window, 'provided nevertheless and it is hereby further agreed' that she should pay £1 per annum towards the ground rent, and keep the house in repair. In an action by the widow for breach of this promise, the consideration for it was stated to be the widow's promise to pay and repair. An objection that the declaration omitted to state part of the consideration, viz. the testator's desire, was rejected. Patteson, J. said: 'Motive is not the same thing with consideration. Consideration means something which is of value in the eye of the law moving from the plaintiff'. Commenting upon the aforesaid remarks, Chitty observes:
“This remark should not be misunderstood: a common motive for making a promise is the desire to obtain the consideration; and an act or forbearance on the part of the promise may (unless the court is prepared to “invent” a consideration) fail to constitute consideration precisely because it was not the promisor's motive to secure it. What Patteson J. meant was that a motive for promising did not amount to consideration unless two further requirements were satisfied, viz: (i)that the thing secured in exchange for the promise was “of some value in the eye of the law”; and (ii)that it moved from the plaintiff. Consideration and motive are not opposites; the former concept is a subdivision of the latter. The consideration for a promise is (unless the consideration is nominal or invented) always a motive for promising; but a motive for making a promise is not necessarily consideration for it in law. Thus the testator's desire in Thomas v. Thomas was a motive for the executors' promise but not part of the consideration for it. The widow's promise to pay and repair was another motive for the executors' promise and did constitute the consideration for that promise.”

16. From this very judgment, Chitty also explains the distinction between consideration and condition. According to him, the plaintiff's remaining a widow was not part of the consideration but a condition of her entitlement to enforce the executor's promise. This case is contrasted with another judgment in Re Soames6. The discussion in this behalf reads as under:
“On the other hand, in Re Soames A promised £3,000 to B if B would set up a school in the running of which A was to have an active part. It was held that, by establishing the school, B had provided consideration for A's promise. It seems that the distinction between consideration and condition depends, in such cases, on whether “a reasonable man would or would not understand that the performance of the condition was requested as the price or exchange for the promise.” In Thomas v. Thomas the executors had not requested the plaintiff to remain a widow; while in Re Soames a request by A that B should establish the school could be inferred from A's expressed intention to participate in its management. This distinction is further illustrated by Carlill v. Carbolic Smoke Ball Co. where the claimant provided consideration for the defendants' promise by using the smoke-ball; but her catching influenza was a condition of her entitlement to enforce that promise.”

17. We are afraid, such a distinction between consideration and condition, as sought to be drawn by the learned counsel for the assessee, would not apply to the instant case. It was possible if the transaction between the buyers and the assessee was seen in isolation. However, in the present case, it needs to be emphasized at the cost of repetition that the resultant effect of invalidating the advance licence by the buyer was issuance of licence for intermediate supply in favour of the assessee and the said licence enured certain benefits in favour of the assessee. In the present case, on these facts, we have to simply see as to whether the definition of 'transaction value', as contained in Section 4 of the Act read with Rule 6 of the Rules, would encompass this benefit as amounting to additional consideration. Our conclusion is that it would come within the ambit of additional consideration indirectly flowing from the buyers to the assessee. Therefore, the instant case is more akin to the decision in Re Soames7.

18. At this stage, we would like to recall the following findings arrived at by the Commissioner, which are not upset by the Tribunal in the impugned decision or even disputed by the assessee:
(a)The assessee had supplied goods to a particular type of buyers at much lower price than the price charged from the general buyers in the normal course of trade as it had obtained the facility of invalidating of advance licences from such buyers and procured imported raw material (duty free) against such licences for manufacturing of finished goods. It is, therefore, alleged that the assessee and the buyers had mutuality of interest in the business of each other and there was a flow back and the price was not the sole consideration for sale in these cases in accordance with the provisions of Section 4(1)(a) of the Act.
(b)Therefore, they were related persons in terms of provisions of the erstwhile Section 4(4)(c), presently Section 4(3)(b)(iv) of the Act.
(c)It is observed that para 7.7 of the EXIM Policy on Advance Release Order speaks of mutuality of interest as the assessee had procured duty free imported raw materials against invalidation of advance licence of the consignees and in turn it sold the finished goods to the said consignees at lower prices as compared to other normal buyers. Thus, the price was not the only consideration.
(d)Once the advance licence is invalidated, the said clearance to the buyers who were earlier holding the said licences need not be treated as deemed export and rightly the assessee had cleared the said goods to such buyers on payment of excise duty, but at lower value than the clearance made to the normal buyers. Thus, the assessee appeared to have derived double benefits in these transactions, i.e. (i)enhanced sale and paid less duty on lower value; and (ii)imported duty free raw materials.
(e)In this case, the right to procure duty free imported raw material is being transferred to supplier by the buyer. This indicates the flow back of additional considerations from the buyer of the said goods to the seller, which is the assessee.

19. On the facts of this case, we are of the opinion that to the fact that additional monetary consideration, the Commissioner has rightly come to the conclusion with regard in addition to the price being paid for the goods, i.e. transfer of advance import licence in favour of the seller by the buyer enabling the seller of the goods to effect duty free import of the raw materials and bringing down the cost of production/procurement, is a consideration, the monetary value of which has to be considered under the provisions of the Rules, i.e. Rule 6 thereof.

20. Thus, we do not see any reason to deviate from the decision rendered by this Court in IFGL's8 case.

21. Before we part with, one more aspect to which our attention was drawn by Mr. Lakshmikumaran needs to be addressed. Referring to another judgment of this Court in Commissioner of Central Excise, Bangalore v. Mazagon Dock Ltd.9, a vain attempt was made to show that this judgment was contrary to the decision rendered by this Court in IFGL's10 case. We do not find it to be so. Interestingly, the Hon'ble Judges {S.N. Variava and Dr. AR Lakshmanan, JJ.} who comprised the Bench that decided IFGL's case were the same who rendered the judgment in Mazagon Dock Ltd.'s case. Another pertinent factor which is to be taken note of is that the two decisions were rendered within a short gap of a fortnight. The decision in Mazagon Dock Ltd. was rendered on July 28, 2005 whereas IFGL's case was decided on August 09, 2005. Thus, at the time of pronouncing of the judgment in IFGL's case, the same very Bench was conscious of its judgment given immediately before in Mazagon Dock Ltd.

22. A reading of the judgment in Mazagon Dock Ltd.'s case would reveal that in the said case subsidy of 20% was received by the assessee therein from the Government, which was sought to be included by the Revenue as 'additional consideration' to arrive at the transaction value for the purpose of central excise. The Court held that this subsidy was not received from the buyer either directly or indirectly and, therefore, could not be included in the price of goods qua purpose of excise. On the facts of that case, the Court found that the respondent in the said case had entered into contract with Oil & Natural Gas Corporation Limited (ONGC) for manufacture and supply of jack-up rigs. For such a contract, as per the policy of the Government, 20% subsidy was to be received from the Government and 10% from ONGC. As far as 10% subsidy received from ONGC is concerned, the same was also to be includible in the transaction value as additional consideration flowing from the buyer. However, 20% subsidy from the Government was under the Government's own scheme with no role of ONGC (buyer in the said case). Obviously, it could not be said that this subsidy had any flow from the ONGC either directly or indirectly. The said judgment, therefore, has no bearing on the present matter.

23. In view of the foregoing, we are of the considered opinion that this case is squarely covered by the judgment of this Court in IFGL's11 case. We, thus, allow this appeal, set aside the decision of the Tribunal and restore the order passed by the Commissioner. In the facts and circumstances of this case, there shall be no order as to costs.

.............................................J.(ROHINTON FALI NARIMAN)

1. 2001 (134) ELT 230
2. (2005) 6 SCC 713
3. Note 2 above
4. Note 2 above
5. (1842) 2 QB 851
6. (1897) 13 TLR 439
7. Note 6 above
8. Note 2 above
9. 2005 (187) ELT 3 (SC):: 2005 (127) ECR 268 (SC)
10. Note 2 above
11. Note 2 above

(2015) 119 (3) CWN (SC) 29

IN THE SUPREME COURT OF INDIA

(BEFORE M.Y. EQBAL AND C. NAGAPPAN, JJ.)

Dr. Tapas Kumar Mandal and others etc. ...Appellant(s)
Vs.
State of West Bengal and others ...Respondent(s)

Civil Appeal Nos.6689-6690 OF 2015 (Arising out of S.L.P. (Civil) Nos.14244-45 of 2015); Civil Appellate Jurisdiction; Judgment on: 01.09.2015

West Bengal Public Health-cum-Administrative Service (Placement on Trainee Reserve) Rules (T.R. Rules), 2008, Clause 9 – appellant obtained MBBS degree – all of them are permanent employees under Department of Health and Family Welfare, WB – appellant applied for West Bengal Post Graduate Medical Admission Test (WBPGMAT), 2015 by submitting all necessary documents – appellant got comfortable rank in the test - subsequently their names had been dropped from the list – Administrative Tribunal dismissed the application under Clause 9 of T.R. Rules as State Government has discretionary power in this matter – Division Bench of High Court rejected the appeal on observation that discretion as exercised does not suffer any irregularities – from the relevant Rules it appears that placement of doctors shall be at the discretion of the State Government – merely because doctors were allowed in admission of post graduate examination and succeeded - does not create any right to get the priority in admission in Post Graduate Medical Course.

Ratio decidendi:-
The placement of doctors shall be at the discretion of the State Government. Merely because doctors were allowed in admission of post graduate examination and succeeded does not create any right to get the priority in admission in Post Graduate Medical Course.

Observations of the Court:-
West Bengal Administrative Tribunal and High Court holding that the discretion that has been exercised in the instant case does not suffer from any irregularity and it is based on logic, equality and on public policy since Rule 9 of the aforesaid Rules clearly lays down that “placement” shall be at the discretion of the Government. Thus, even if a Doctor is eligible for further Government Sponsorship, he cannot claim, as a matter of right, that such sponsorship be given to him consecutively and in short intervals by not considering others, who are in queue for a period prior to 1.4.2012.(para 9)
Perusal of the impugned order passed by the High Court will show the reasons assigned for giving priority to those Doctors who have completed their diploma courses much before the appellants. Admittedly, the Government has given opportunity to those Doctors, who had got one specialization more than three years back and they are senior to the appellants. The High Court also took note of the fact that there is a huge deficiency of Doctors in the State and the Government is contemplating of opening of new super-specialty hospitals by the year 2015-16.(paras 13 and 14)

Held:-
From perusal of the relevant Rule, it is evident that the placement of the Doctors shall be at the discretion of the Government. Merely because the appellants were allowed in the examination and found place in the select list does not give them right as in-house Doctors to get priority above their seniors.

The Judgment of the Court was delivered by M. Y. EQBAL, J.:-

1. Leave granted.

2. These appeals by special leave are directed against the Judgment and order dated 17.04.2015 passed by the Division Bench of High Court of Calcutta in A.S.T. Nos. 51 & 52 of 2015 dismissing the writ petitions preferred by the appellants against the order of the West Bengal Administrative Tribunal refusing to pass an interim order and fixing the matter for final hearing.

3. The facts of the case in brief are that the appellants-writ petitioners, who are all Doctors serving under the Department of Health and Family Welfare, Government of West Bengal, had obtained M.B.B.S. Degree and were issued Registration Certificates from the West Bengal Medical Council in different years. All of them are permanent employees under the Department of Health and Family Welfare, Government of West Bengal, having joined their services mostly before 2008. It is appellants’ case that the West Bengal University of Health Sciences published an Advertisement for the West Bengal Post Graduate Medical Admission Test for the years 2011-2012. They all got rank in the test of 2011 or in the test of 2012 and after counselling, all of them were admitted to different Diploma courses and they all completed their courses in the year 2014 with Trainee Reserve Facility (T.R. Facility) following the West Bengal Medical Education Service, the West Bengal Health Service and the West Bengal Public Health-cum-Administrative Service (Placement on Trainee Reserve) Rules, 2008 (in short, “T. R. Rules of 2008”), which enabled them to study in the said courses as applicable to in-service candidates. Such T. R. facilities were allowed by the Government vide different memos issued from time to time.

4. It has been pleaded on behalf of the appellants that they have availed two years’ T.R. Facilities on completion of their courses and that they had also availed T. R. facilities to which they were entitled to get and all of them had obtained such facility in the year 2012, which came to be completed in the year 2014, just after completion of their Diploma courses. Further on completion of their Post Graduate Diploma Courses in the year 2014, their results were duly published and all of them passed the examinations and joined duty. Some of them were posted at different Health Centres while others at different Hospitals, but all of them had passed the Diploma courses with good marks.

5. The West Bengal University of Health Sciences issued an Advertisement on 12.12.2014 pertaining to the West Bengal Post Graduate Medical Admission Test, 2015. They also published the Rules and Regulations of the said Admission Test. The writ petitioners submitted their formal applications before the concerned authorities so as to enable them to appear in the said 2015 Tests. It has been contended by the appellants that they were all eligible and the process of allowing in-service Doctors to take the Tests was being followed by the concerned Department for several years and, therefore, the appellants submitted Proforma of Sponsorship Certificates, which were duly accepted by the concerned authorities. The appellants then applied for the West Bengal Post Graduate Medical Admission Test, 2015 by submitting necessary documents along with the necessary fees in the category of Government Sponsored Candidates. The authorities of the Department of Health and Family Welfare, Government of West Bengal then allowed them to appear and the University of Health Sciences also accepted their Application Forms on-line and subsequently, the appellants also submitted hardcopies of such Applications within the specified time.

6. In February, 2015, Written Test for the 2015 Tests was held
in which appellants appeared and in the results, which were published on 11.2.2015, appellants got comfortable ranks and top positions. As pleaded on behalf of the appellants, on 17.03.2015 a List was published in the website informing, inter alia, that the persons mentioned therein had qualified for acquiring Sponsorship Certificates for the W.B.P.G.M.A.T. 2015 and they were instructed to go to the concerned Office and collect their certificates personally. Hence, it is contended by the appellants that they were found eligible for being given Sponsorship Certificates. However, on 20.3.2015, the authorities published yet another Notice in their website giving out the names of 223 candidates giving similar instructions for personally collecting the Sponsorship Certificates. But in this Notice, the names of the present appellants were dropped out. Upon enquiry, they came to learn that the authorities had taken a decision that they would not allow candidates, who had passed Diploma within the last three years and as such their names had been dropped. Being aggrieved, the appellants sent a Letter of Demand for justice as well as Objection against such act and prayed for modifying their stand of not allowing such persons who had passed Diploma within the last three years. According to the appellants, this was a condition, which was de hors the provisions of the Trainee Reserve Rules of 2008.

7. The names of the appellants were again not published in another Notice dated 23.03.2015, whereby the authorities allowed several Doctors, who had completed their Post Graduate Diploma prior to 2012 and before entering service and, according to the appellants, even the candidates, who had not completed 2/3 years rural service, which was compulsory as per the Rules, were allowed. It has been alleged on behalf of the appellants that these Doctors had several relatives/cousins/nephews in the higher echelons of the Government and, therefore, the action was motivated and mala fide.

8. It has been further pleaded by the appellants that by a Notification dated 24.03.2015, the Joint Secretary to the Government of West Bengal, Department of Health and Family Welfare informed, inter alia, that in exercise of powers conferred under Clause 9 of said T. R. Rules of 2008, those Medical Officers, who had acquired Post Graduate Diploma/Degree on availing facilities within the last three years (1.4.2012 to 31.3.2015), would not be allowed further T.R. facility during this year (2015). According to the appellants, this order is illegal, arbitrary and proceeds to debar the appellants purportedly on a ground, which is beyond the grounds mentioned in the Rules. According to them, despite being toppers of the merit list they could not participate in the counseling session.

9. Aggrieved appellants, therefore, immediately approached the First Bench of the West Bengal Administrative Tribunal (in short, “the Tribunal”), which dismissed their petition on the ground that Clause 9 of the T.R. Rules of 2008 had a non-obstante Clause whereby the Government had a discretionary power in matters regarding placement of Trainee Reserve candidates and that no interim orders could be passed at that stage. Appellants, thereafter, knocked the doors of the High Court by filing writ petitions, which were dismissed by the Division Bench holding that the discretion that has been exercised in the instant case does not suffer from any irregularity and it is based on logic, equality and on public policy since Rule 9 of the aforesaid Rules clearly lays down that “placement” shall be at the discretion of the Government. Thus, even if a Doctor is eligible for further Government Sponsorship, he cannot claim, as a matter of right, that such sponsorship be given to him consecutively and in short intervals by not considering others, who are in queue for a period prior to 1.4.2012.

10. Hence, the aggrieved Doctors are before us by way of these appeals by special leave. We have heard learned counsel for the parties at length and perused the concerned Rules.

11. Mr. Huzefa Ahmadi, learned senior counsel appearing for the appellants, mainly contended that only after the appellants were selected, the Notification was published on 24.3.2015 indicating that in-service candidates who had obtained diploma in the years 2012-2014 would not be considered for the degree course and only pre-2012 diploma holders would be considered. According to the learned senior counsel, there is no rationale for this discrimination particularly when one of the appellants all the three times finally ranked in the merit list for the degree course. It was contended that at the time of filling of the form for the degree course the eligibility criteria did not specify that only pre-2012 diploma holders will be considered as candidates for the degree course. As a matter of fact, the selection procedure was arbitrarily changed after the appellants were selected and called for giving sponsorship certificate. Mr. Ahmadi also referred to some decisions to the proposition that inter se merit cannot be overlooked to promote seniority which has no place in the MCI Regulations.

12. Per contra, Mr. Kalyan Bandopadhyay, learned senior counsel appearing for the respondents, at the very outset fairly submitted that he has nothing to say so far the merits of the appellants are concerned. But the action taken by the respondents cannot be held to be mala fide. Indisputably, appellants got the benefit of three years of service. It is not the case of admission in the open category.

13. Perusal of the impugned order passed by the High Court will show the reasons assigned for giving priority to those Doctors who have completed their diploma courses much before the appellants. Admittedly, the Government has given opportunity to those Doctors, who had got one specialization more than three years back and they are senior to the appellants.

14. The High Court also took note of the fact that there is a huge deficiency of Doctors in the State and the Government is contemplating of opening of new super-specialty hospitals by the year 2015-16.

15. From perusal of the relevant Rule, it is evident that the placement of the Doctors shall be at the discretion of the Government. Merely because the appellants were allowed in the examination and found place in the select list does not give them right as in-house Doctors to get priority above their seniors.

16. In the peculiar facts and circumstances of the case, we do not find any reason to interfere with the impugned order.

17. However, we record the assurance given by Mr. Bandopadhyay that the appellants will be given sponsorship for the next year 2016-17.

18. For the aforesaid reason, we dismiss these appeals. However, there shall be no order as to costs.

……………………C. Nagappan, J.

(2015) 119 (3) CWN (SC) 37

IN THE SUPREME COURT OF INDIA

(BEFORE A.K. SIKRI AND ROHINTON FALI
NARIMAN, JJ.)

Commissioner of Central Excise,
Tiruchirapalli ...Appellant(s)
Vs.
M/S. Dalmia Cement (Bharat) Ltd. ...Respondent(s)

Civil Appeal No. 3600 of 2006; Civil Appellate Jurisdiction; Judgment on: 02.09.2015

Central Excise Act, 1944, Section 35G(3); Central Excises and Customs Laws (Amendment) Act, 1991, Section 11B - Whether Section 11B of the Act, 1991 as amended apply to the cases for refund when implementation of order is pending – principal of “unjust enrichment” was introduced by way of amendment of Section 11B of the Act, 1991 shall not be attracted to refund the excise duty merely because implementation order was pending –authority could not go into the question of “unjust enrichment” by involving the proviso of Section 11B(1) of the Act, 1991 as amended – it was not opened to the concerned officer who was supposed to carry out the implementation order to go into the question as to whether there was any “unjust enrichment” on the part of the assesse – nine judge bench in case of Mafatlal Industries Ltd. case is relied on.

Ratio decidendi:-
Excise authority could not go into the question of “unjust enrichment” by involving the proviso of Section 11B(1) of the Central Excises and Customs Laws (Amendment) Act, 1991 as amended. It was not opened to the concerned officer who was supposed to carry out the implementation order to go into the question as to whether there was any “unjust enrichment” on the part of the assesse.

Observations of the Court:-
We may point out at this stage itself that Section 11B, as it existed prior to its amendment in the year 1991, did not contain any provision of unjust enrichment. Thus, if the assessee was entitled to refund of duty under the Act, it could make an application for such a refund to the Assistant Collector of Central Excise before the expiry of six months from the refund date and the procedure how such application is to be dealt with was stipulated in the said provision. This Section was amended with effect from 20.09.1991 by Central Excise and Customs Laws (Amendment) Act, 1991.(para 4)
We have already narrated the facts and events in the instant case in detail above. However, it is pertinent to keep in mind that applications for refund of excise which were preferred by the assessee had already been allowed finally by the orders of CEGAT dated 01.06.1989 and 06.06.1989. This obviously happened before the amendment in the Section in the year 1991. At the same time, the refund had not been actually paid to the assessee till 1991 when the provisions of Section 11B came to be amended. We now advert to the decision in the case of Mafatlal Industries Ltd. (supra).(para 9)
In Union of India v. Jain Spinners Ltd (1992) 4 SCC 389 The validity of the 1991 (Amendment) Act was, however, neither raised nor considered by the court. The impugned orders of the High Court, made before the coming into force of the 1991 (Amendment) Act, directing refund of the excess duty collected to the manufacturers, this Court held, would defeat the provisions of amended Section 11-B which had come into force during the pendency of the refund proceedings. The Court held that so long as the refund proceedings are pending, the amended provisions get attracted and disentitle the manufacturer-payer from claiming any refund contrary to the said provisions. In other words, the contention of the manufacturers that the amended Section 11-B applies only to claims of refund arising after the coming into force of the said Amendment Act was rejected.(para 10)
Proviso to sub-section (1) of Section 11B, as amended, would be applicable in a situation where an application for refund made before the said amendment was still pending at the time when the provisions of Section 11B were amended. This is how the said proviso is interpreted by this Court in Mafatlal Industries Ltd. (supra).(para 15)

Held:-
When the order of the Assistant Commissioner was challenged and the matter came before the Tribunal, the Tribunal was duty bound to apply the law laid down in Mafatlal Industries Ltd. (supra), which it did. Similar exercise is done by the High Court in the impugned judgment. We find that the view taken by the High Court is in consonance with the law laid down by this Court in the aforesaid case.

List of cases cited:-
Mafatlal Industries Ltd. and Others Vs. Union of India and Others, (1997) 5 SCC 536 (followed)
Union of India Vs. Jain Spinners Ltd (1992) 4 SCC 389 (relied on)
Kanhaiya Lal, 1959 SCR 1350: AIR 1959 SC 135: (1958) 9 STC 747 (reversed)
Tilokchand Motichand (1969) 1 SCC 110: (1969) 2 SCR 824: AIR 1970 SC 898 (relied on)

The Judgement of the Court was delivered by A.K. Sikri, J.:-

1. On an application under Section 35G(3) of the Central Excise Act, 1944 (hereinafter referred to as the 'Act'), the Customs Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as the 'CEGAT') referred the following question to the High Court of Delhi for its opinion :-
“Whether Section 11B of the Central Excise Act, as amended, applies to cases where though an order has been passed directing refund, implementation of the order is pending?”

2. The High Court has answered the aforesaid question in favour of assessee holding that since the proceedings under the old Section 11B of the Act had attained finality, the amended provision of Section 11B of the Act, in particular, proviso to sub-section (1) shall not apply. In other words, the principle of 'unjust enrichment' which was introduced by way of amendment of Section 11B in the year 1991 shall not be attracted in the instant case as the proceedings under the un-amended Section stood finalised with the direction in the application filed under un-amended Section 11B of the Act to refund the excise duty that was paid by the respondent/assessee. To put it pithily, the High Court has held that merely because implementation of the aforesaid order was pending, in the sense that direction to refund the amount had not been carried out, the authority could not go into the question of unjust enrichment by invoking the proviso to sub-section (1) of Section 11B of the Act that had been introduced by that time by way of amendment in Section 11B of the Act. Therefore, it was not open to the concerned officer, who was only supposed to carry out the implementation of the order, to go into the question as to whether there was any unjust enrichment on the part of the assessee or not. In coming to this conclusion, the High Court has extensively referred to a 9-Judge Bench of this Court in the case of Mafatlal Industries Ltd. and Others v. Union of India and Others, (1997) 5 SCC 536.

3. It is not disputed before us that the law laid down in the aforesaid judgment would be applicable. However, the appellant contends that there is a small window left open in the said judgment which would cover the situation that has arisen in the present case. As per the case set up by the appellant, even where order is yet to be implemented, though passed under the un-amended provision, at this stage of implementation as well the question of unjust enrichment can be gone into by the concerned authority.

4. We may point out at this stage itself that Section 11B, as it existed prior to its amendment in the year 1991, did not contain any provision of unjust enrichment. Thus, if the assessee was entitled to refund of duty under the Act, it could make an application for such a refund to the Assistant Collector of Central Excise before the expiry of six months from the refund date and the procedure how such application is to be dealt with was stipulated in the said provision. This Section was amended with effect from 20.09.1991 by Central Excise and Customs Laws (Amendment) Act, 1991. Under the amended provision, while considering the application for refund, the Assistant Collector of Central Excise is empowered to go into the question as to whether incidence of such duty has been passed on by the person claiming refund to any other person. If the claimant has passed on the incidence of excise duty to other person then the application for refund can be rejected on the ground that it would amount to unjust enrichment to that person who is not out of pocket even when the excise duty was paid in excess etc. Proviso to this sub-section (1) further provides that even when application for refund was filed before the amendment of this Section and still pending, it shall be deemed that such an application made under amended sub-section (1) of Section 11B of the Act and is to be dealt with in accordance with the provisions of sub-section (2), substituted by the amendment. Thus, the applications even filed under the un-amended Act, if not disposed of and still pending, are to be treated as filed under the amended Section 11B and the consequence thereof is that even in respect of such applications doctrine of “unjust enrichment” would be applicable. In this scenario, when an application was not pending, in the sense that orders thereon had already been passed directing refund but the amount had not been refunded so far, we have to determine as to whether such a situation has also to be dealt with under the amended section thereby bringing into operation the doctrine of “unjust enrichment”? As mentioned above, the High Court has answered this question in the negative and this Court is called upon to decide the veracity of the said view taken by the High Court in the instant appeal.

5. The facts which need to be noted for the purposes of this appeal do not need a large canvass and are recapitulated in brief, as under:

6. The period involved for which the respondent wanted refund of the excise duty paid by it is 1970-1978. It may be mentioned that there was a dispute regarding the assessable value of cement cleared by the assessee during the aforesaid period, when excise duty of cement was ad valorem. The dispute related to freight involved in the dispatch of the cement to various destinations. The Department had included the cost of freight as well while determining the assessable value in terms of Section 4 of the Central Excise and Salt Act, 1944 (hereinafter referred to as the 'Act'). It was decided in favour of the assessee vide order dated 06.06.1989 passed by the CEGAT. In spite of this decision, amount was not refunded. This prompted respondent to file Civil Writ No. 3225 of 1991 in the High Court of Delhi seeking writ, order or direction for initiating contempt of court proceedings against the Collector of Central Excise, Tiruchirapalli and Assistant Collector of Central Excise, Tiruchirapalli for not granting the refund despite the order of the CEGAT. The said writ petition was disposed of on 18.07.1995. Taking note of the statement of counsel for both the parties that a date may be fixed before the Collector/Assistant Collector to go into the question if the appellant should be granted refund in spite of Section 11B of the Act, direction was given to appear before the Collector/Assistant Collector on 22.09.1995 and the writ petition was disposed of. Pursuant to the said direction, hearing was granted by the Assistant Commissioner who passed orders dated 28.03.1996 holding that assessee was not eligible to get the refund as per amended provisions of Section 11B of the Act and directed that this amount be credited to the Consumer Welfare Fund established under Section 12C of the Act. The reason for rejecting the claim of the assessee was that the case of the respondent fell within the four walls of the concept of “unjust enrichment”. Feeling aggrieved by this order, appeal was filed before the Commissioner of Customs and Central Excise (Appeal) which was dismissed on 20.12.1996. Further, appeal was preferred before the CEGAT and in this attempt the assesse triumphed inasmuch as Tribunal decided the case in favour of assessee holding that since no proceedings were pending before the Assistant Commissioner as far as application for refund is concerned and it was only the execution of the order of refund that was passed much prior to 1991, amended provision of Section 11B would not be attracted. The appellant filed rectification application which was dismissed by the Tribunal on 20.02.2002. Thereafter, appellant filed reference application before the High Court of Delhi in terms of 35G(3) of the Act raising the question of law which has already been reproduced in the earlier part of this judgment. Again, as pointed out above, the High Court has answered this question in favour of assessee, recording the following findings:
“(a) It has been held that there are no merits in this reference, as the question involved is clearly settled by the 9-Judge Bench decision of this Hon'ble Court in the case of Mafatlal Industries Ltd. (supra) wherein this Hon'ble Court held that if an application for refund has been disposed of, and the order had become final before the 1991 amendment to Section 11B came into force, the principles of unjust enrichment will not apply.
(b) Section 11-B, after the 1991 amendment, stated that the party applying for refund had to establish that the incidence of such duty had not been passed on by him to any other person. It follows, therefore, that Parliament did not apply the principles of unjust enrichment to cases covered by the un-amended Section11B and it was the reason that the amendment was made in Section 11-B in 1991.”

7. On the basis of what is pointed out above, it is clear that the exercise to be undertaken is to find out the ratio laid down in Mafatlal Industries Ltd. (supra) in the given situation. Before we advert to the same, we deem it appropriate to refer to, at this stage, un-amended and amended provisions of Section 11B.
“Section 11B: Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
(2) If on receipt of any such application, the Assistant Collector of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant should be refunded to him, he may make an order accordingly.
(3) Where as a result of any order passed in appeal or revision under this Act refund of any duty of excise becomes due to any persons the
Assistant Collector of Central Excise may refund the amount to such person without his having to make any claim in that behalf.
(4) Save as otherwise provided by or under this act, no claim for refund of any duty of excise shall be entertained.
(5) Notwithstanding anything contained in any other law, the provisions of this Section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were no excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect of such claim.”

8. After 1991 amendment, the material part of Section 11B reads as follows:
“11B. Claim for refund of duty and interest, if any, paid on such duty.—(1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such [duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:
Provided that where an after 1991 amendment, the material part of Section 11B reads as follows: application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 (40 of 1991), such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act:
Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest.
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied
that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:
Provided that the amount of [duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to--
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise or Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, After 1991 amendment, the material part of Section 11B reads as follows: under this Act;
(d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify:
Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person.
(3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2).
(4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder.
(5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette.
Explanation.--For the purposes of this section,--
(A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(B) "relevant date" means,--
(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,--
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India;
(b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid;
(c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory;
(d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction;
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;
(ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order;
(eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof;
(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;
(f) in any other case, the date of payment of duty.”

9. We have already narrated the facts and events in the instant case in detail above. However, it is pertinent to keep in mind that applications for refund of excise which were preferred by the assessee had already been allowed finally by the orders of CEGAT dated 01.06.1989 and 06.06.1989. This obviously happened before the amendment in the Section in the year 1991. At the same time, the refund had not been actually paid to the assessee till 1991 when the provisions of Section 11B came to be amended. We now advert to the decision in the case of Mafatlal Industries Ltd. (supra).

10. It is a nine Judge Bench decision. Majority opinion was delivered by B.P. Jeevan Reddy, J. for himself and on behalf of four other Judges. K.S. Paripoornan,J. and S.C. Sen,J. wrote their separate opinions. Hansaria,J. agreed with the conclusions and reasoning of Paripoornan, J. However, insofar as issue at hand is concerned, they concurred with the majority opinion rendered by B.P. Jeevan Reddy, J. Thus, eight out of nine Judges have taken the same view. A.M. Ahmadi, the then Chief Justice, was the only dissenting Judge, who took contrary view on this particular issue. With this background in mind, we reproduce the following relevant portions from the opinion of B.P. Jeeven Reddy, J.:
“57. The first decision of this Court to consider the amended Section 11-B is in Union of India v. Jain Spinners Ltd (1992) 4 SCC 389 The validity of the 1991 (Amendment) Act was, however, neither raised nor considered by the court. The impugned orders of the High Court, made before the coming into force of the 1991 (Amendment) Act, directing refund of the excess duty collected to the manufacturers, this Court held, would defeat the provisions of amended Section 11-B which had come into force during the pendency of the refund proceedings. The Court held that so long as the refund proceedings are pending, the amended provisions get attracted and disentitle the manufacturer-payer from claiming any refund contrary to the said provisions. In other words, the contention of the manufacturers that the amended Section 11-B applies only to claims of refund arising after the coming into force of the said Amendment Act was rejected.
96. There is yet another circumstance: Section 12-B does not create a new presumption unknown till then; it merely gives statutory shape to an existing situation, as explained hereinbefore. At the most, it can be said that there were two views on the subject and Section 12-B affirms one of them. Even without Section 12-B, the true position is the same, as held by us in the earlier part of this judgment. The obligation to prove that duty has not been passed on to another person is always there as a precondition to claim of refund. It cannot also be said that by giving retrospective effect to Section 11-B, any vested rights or substantive rights are being taken away. The deprivation, if at all, is not real. The manufacturer has already collected the duty from his purchaser and has thus reimbursed itself. By applying for refund yet, he is trying to reap a windfall; deprivation of that cannot be said to be real or substantial prejudice or loss. A manufacturer had no vested legal right to refund even when he had passed on the burden of duty to others. No law conferred such a right in him not Article 265, nor Section 11-B. It was only on account of an incorrect view of law taken in Kanhaiya Lal 1959 SCR 1350: AIR 1959 SC 135: (1958) 9 STC 747 and that cannot be treated as a vested legal right. Correction of judicial error does not amount to deprivation of vested/substantive rights, even though a person may be deprived of an unwarranted advantage he had under the overruled decision. In cases, where the burden is not passed on, there is no prejudice; he can always get the refund.
97. There is yet another circumstance: Section 12-B does not create a new presumption unknown till then; it merely gives statutory shape to an existing situation, as explained hereinbefore. At the most, it can be said that there were two views on the subject and Section 12-B affirms one of them. Even without Section 12-B, the true position is the same, as held by us in the earlier part of this judgment. The obligation to prove that duty has not been passed on to another person is always there as a precondition to claim of refund. It cannot also be said that by giving retrospective effect to Section 11-B, any vested rights or substantive rights are being taken away. The deprivation, if at all, is not real. The manufacturer has already collected the duty from his purchaser and has thus reimbursed itself. By applying for refund yet, he is trying to reap a windfall; deprivation of that cannot be said to be real or substantial prejudice or loss. A manufacturer had no vested legal right to refund even when he had passed on the burden of duty to others. No law conferred such a right in him not Article 265, nor Section 11-B. It was only on account of an incorrect view of law taken in Kanhaiya Lal 1959 SCR 1350: AIR 1959 SC 135: (1958) 9 STC 747 and that cannot be treated as a vested legal right. Correction of judicial error does not amount to deprivation of vested/substantive rights, even though a person may be deprived of an unwarranted advantage he had under the overruled decision. In cases, where the burden is not passed on, there is no prejudice; he can always get the refund.
98. A major attack is mounted by the learned counsel for petitioners-appellants on Section 11-B and its allied provisions on the ground that real purpose behind them was not to benefit the consumers by refusing refund to manufacturers (on the ground of passing on the burden) but only to enable the Government to retain the illegally collected taxes. It is suggested that the creation of the Consumer Welfare Fund is a mere pretence and not an honest exercise. By reading the Rules framed under Section 12-D, it is pointed out, even a consumer, who has really borne the burden of tax and is in a position to establish that fact, is yet not entitled to apply for refund of the duty since the Rules do not provide for such a situation. The Rules contemplate only grants being made to Consumer Welfare Societies. Even in the matter of making grants, it is submitted, the Rules are so framed as to make it highly difficult for any consumer organisation to get the grant. There is no provision in the Act, Shri Nariman submitted, to locate the person really entitled to refund and to make over the money to him. “We expect a sensitive Government not to bluff but to hand back the amounts to those entitled thereto”, intoned Shri Nariman. It is a colourable device declaimed Shri Sorabjee “a dirty trick” and “a shabby thing”. The reply of Shri Parasaran to this criticism runs thus: It ill-becomes the manufacturers/assessees to espouse the cause of consumers, when all the while they had been making a killing at their expense. No consumers’ organisation had come forward to voice any grievance against the said provisions. Clause (e) of the proviso to sub-section(2) of Section 11-B does provide for the buyer of the goods, to whom the burden of duty has been passed on, to apply for refund of duty to him, provided that he has not in his turn passed on the duty to others. It is, therefore, not correct to suggest that the Act does not provide for refund of duty to the person who has actually borne the burden. There is no vice in the relevant provisions of the Act. Rules cannot be relied upon to impugn the validity of an enactment, which must stand or fall on its own strength. The defect in the Rules, assuming that there is any, can always be corrected if the experience warrants it. The Court too may indicate the modifications needed in the Rules. The Government is always prepared to make the appropriate changes in the Rules since it views the process as a “trial and error” method — says Shri Parasaran.
105. It would be evident from the above discussion that the claims for refund under the said two enactments constitute an independent regimen. Every decision favourable to an assessee/manufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act, whether before or after the 1991 Amendment as interpreted by us herein make every refund claim subject to proof of not passing on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 and this Court while acting under Article 32 would insist upon the said condition being satisfied before ordering refund. Unless the claimant for refund establishes that he has not passed on the burden of duty to another, he would not be entitled to refund, whatever be the proceeding and whichever be the forum. Section 11-B/Section 27 are constitutionally valid, as explained by us hereinbefore. They have to be applied and followed implicitly wherever they are applicable.
108. The discussion in the judgment yields the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment.
(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter by misinterpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by misinterpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactments before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 and of this Court under Article 32 cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act do constitute “law” within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties imposed thereunder. Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition
(ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal which is not a departmental organ but to this Court, which is a civil court.
(ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. This principle is, however, subject to an exception:
Where a person approaches the High Court or the Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconstitutionality obtained by another person on another ground; this is for the reason that so far as he is concerned, the decision has become final and cannot be reopened on the basis of a decision on another person’s case; this is the ratio of the opinion of Hidayatullah, C.J. in Tilokchand Motichand (1969) 1 SCC 110: (1969) 2 SCR 824: AIR 1970 SC 898 and we respectfully agree with it. Such a claim is maintainable both by virtue of the declaration contained in Article 265 of the Constitution of India and also by virtue of Section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying clause (c) of sub-section (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview.
(iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched.
(iv) It is not open to any person to make a refund claim on the basis of a decision of a court or tribunal rendered in the case of another person. He cannot also claim that the decision of the court/tribunal in another person’s case has led him to discover the mistake of law under which he has paid the tax nor can he claim that he is entitled to prefer a writ petition or to institute a suit within three years of such alleged discovery of mistake of law. A person, whether a manufacturer or importer, must fight his own battle and must succeed or fail in such proceedings. Once the assessment or levy has become final in his case, he cannot seek to reopen it nor can he claim refund without reopening such assessment/order on the ground of a decision in another person’s case. Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well-established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund.
(v) Article 265 of the Constitution has to be construed in the light of the goal and the ideals set out in the Preamble to the Constitution and in Articles 38 and 39 thereof. The concept of economic justice demands that in the case of indirect taxes like Central Excises duties and Customs duties, the tax collected without the authority of law shall not be refunded to the petitioner-plaintiff unless he alleges and establishes that he has not passed on the burden of duty to a third party and that he has himself borne the burden of the said duty.
(vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity. In such a situation, equitable considerations cannot be ruled out while applying the said provision.
(vii) While examining the claims for refund, the financial chaos which would result in the administration of the State by allowing such claims is not an irrelevant consideration. Where the petitioner-plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer. In case of large claims, it may well result in financial chaos in the administration of the affairs of the State.
(viii) The decision of this Court in STO v. Kanhaiya Lal Mukundlal Saraf must be held to have been wrongly decided insofar as it lays down or is understood to have laid down propositions contrary to the propositions enunciated in (i) to (vii) above. It must equally be held that the subsequent decisions of this Court following and applying the said propositions in Kanhaiya Lal have also been wrongly decided to the above extent. This declaration or the law laid down in Propositions (i) to (vii) above shall not however entitle the State to recover the taxes/duties already refunded and in respect whereof no proceedings are pending before any authority/Tribunal or Court as on this date. All pending matters shall, however, be governed by the law declared herein notwithstanding that the tax or duty has been refunded pending those proceedings, whether under the orders of an authority, Tribunal or Court or otherwise.
(ix) The amendments made and the provisions inserted by the Central Excises and Customs Law (Amendment) Act, 1991 in the Central Excises and Salt Act and the Customs Act are constitutionally valid and are unexceptionable.
(x) By virtue of sub-section (3) to Section 11-B of the Central Excises and Salt Act, as amended by the aforesaid Amendment Act, and by virtue of the provisions contained in sub-section (3) of Section 27 of the Customs Act, 1962, as amended by the said Amendment Act, all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision where under the levy was created) have to be preferred and adjudicated only under the provisions of the respective enactments. No suit for refund of duty is maintainable in that behalf. So far as the jurisdiction of the High Courts under Article 226 of the Constitution or of this Court under Article 32 is concerned, it remains unaffected by the provisions of the Act. Even so, the Court would, while exercising the jurisdiction under the said articles, have due regard to the legislative intent manifested by the provisions of the Act. The writ petition would naturally be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it. Even while acting in exercise of the said constitutional power, the High Court cannot ignore the law nor can it override it. The power under Article 226 is conceived to serve the ends of law and not to transgress them.
(xi) Section 11-B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise. It must be held that Union of India v. Jain Spinners and Union of India v. ITC have been correctly decided. It is, of course, obvious that where the refund proceedings have finally terminated in the sense that the appeal period has also expired before the commencement of the 1991 (Amendment) Act (19-9-1991), they cannot be reopened and/or governed by Section 11-B(3) [as amended by the 1991 (Amendment) Act]. This, however, does not mean that the power of the appellate authorities to condone delay in appropriate cases is affected in any manner by this clarification made by us.
(xii) Section 11-B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said that Section 11-B is a device to retain the illegally collected taxes by the State. This is equally true of Section 27 of the Customs Act, 1962.”

11. It is clear from the above that in no unambiguous terms and with utmost clarity and certainty, the majority interpreted amended provisions of Section 11B including proviso to sub-section (1) thereof to hold that so long as refund proceedings are pending, the amended provision would get attracted and would disentitle the manufacturer/payer from claiming any refund contrary to the said proviso. However, in those cases where the refund proceedings had finally been terminated, in the sense that the appeal period has also expired before the commencement of the amended provision, these cannot be re-opened and/or governed by the amended provision. Concurring with the aforesaid view, K.S. Paripoornan,J. expressed his opinion in the following manner:
“342.…..Sections 11-B(2) and (3) cannot be made applicable to refunds already ordered by the court or the refund ordered by the statutory authorities which have become final. It follows from a plain reading of Section 11-B, clauses (1), (2) and (3) of the Act. The provisions contemplate the pendency of the application on the date of the coming into force of the Amendment Act or the filing of an application which is contemplated under law to obtain a refund after the Amendment Act comes into force. I am of the opinion that if the said provisions are held applicable, even to matters concluded by the judgments or final orders of courts, it amounts to stating that the decision of the court shall not be binding and will result in reversing or nullifying the decision made in exercise of the judicial power. The legislature does not possess such power. The court’s decision must always bind parties unless the condition on which it is passed are so fundamentally altered that the decision could not have been given in the altered circumstances.........”

12. The same view has been expressed by S.C. Sen, J.:
“255. I shall now examine the other provisions of the newly-added sections. Sub-section (1) of Section 11-B requires an application for refund to be made. Sub-section (2) requires the Assistant Commissioner to pass an order of refund provided the conditions set out therein are fulfilled. Sub-section (3) merely lays down that no refund shall be made except as provided in sub-section (2). There is a non obstante clause that this will operate notwithstanding anything to the contrary contained in any judgment, decree, order etc. It is Civil obvious that new provisions will apply in cases where applications for refund were made before the new provisions came into force and also subsequently. Sub-section (3) has no retrospective effect. When a case has been finally heard and disposed of and no application for refund need be made, sub-section (3) cannot apply. If there is a judgment, decree or order which has to be carried out, the legislature cannot take away the force and effect of that judgment, decree or order, except by amending the law retrospectively on the basis of which the judgment was pronounced.”

13. Notwithstanding, the aforesaid dicta, Mr. Panda, learned senior counsel appearing for the appellant, still sees some light coming through a small window as he wants pending proceedings to include a situation where refund had not been granted, even when the order was passed, with the submission that the Assistant Commissioner even at this stage was competent to go into the question of unjust enrichment as order regarding grant of refund was post 1991 event. To buttress this submission, he argued that the principle of unjust enrichment was in the domain of public interest and intention by incorporating provisions like proviso to sub-section (1) of Section 11 was clear, namely, so far as amount is not actually refunded, the authorities were competent to invoke this doctrine of “unjust enrichment”. It was argued that it will be totally inequitable and unfair to the public as the party (assessee herein) would be unjustly enriched. He also relied upon the orders dated 18.07.1995 by the High Court in Civil Writ No. 3225 of 1991 specifically permitting the Assistant Collector to go into the question whether the assessee is to be granted the refund in spite of amended Section 11B of the Act with the following observation :
“Both the Counsel agrees that a date may be fixed when the petitioner shall appear before the collector/Assistant Collector, Central Excise, Trichiapalli, to go into the question if petitioner should be granted the refund in spite of Section 11B of the Central Excise and Salt Act. We, accordingly, direct that petitioner shall appear before the concerned Collector/Assistant Collector, Central Excise, Trichirapalli on 22nd September 1995, no further orders are required in this petition, which stands disposed of.”

14. After examining the matter in its entirely, we find that it is not possible to countenance the aforesaid submission of Mr. Panda. In the first instance, it requires to be remarked that only after amendment in Section 11B of the Act in the year 1991, any person applying for refund has to establish that incidence of such duty has not been passed on by him to any other person. The un-amended provision did not contain any such stipulation. Therefore, under the old provision, the only obligation of the person claiming refund was to make such an application before the expiry of six months from the relevant date and to show how the refund was admissible to the applicant. In such a case, the Assistant Collector of Central Excise was to only examine as to whether excise duty was paid in excess etc. and was refundable to the claimant as a result of adjudication of the dispute or otherwise. It is only in the amended provision that additional stipulation is provided as per which the claimant is required to file, along with application for refund, such documentary or other evidence including documents referred to any Section 12A of the Act to establish that the amount of duty of excise was collected from the claimant or paid by the claimant and that “incidence of such duty had not been passed on by him to any other person”. It clearly follows from the above that before the amendment of Section 11B of the Act, principle of unjust enrichment was not incorporated under the un-amended provision. In fact that was precisely the reason for amending the provision so that this doctrine of “unjust enrichment” is incorporated, viz., to take care of the mischief that was prevailing under the un-amended provision which was removed by making amendment, popularly known as Heydon's Mischief Rule.

15. Proviso to sub-section (1) of Section 11B, as amended, would be applicable in a situation where an application for refund made before the said amendment was still pending at the time when the provisions of Section 11B were amended. This is how the said proviso is interpreted by this Court in Mafatlal Industries Ltd. (supra).

16. Once we find that no such application was pending and the orders on the said application had already been passed, the proviso ceases to have any application. The reason, even otherwise, is very obvious. Section 11B relates to claim for refund of duty and the procedure for such a refund is stipulated in this section. As per sub-section (1) thereof, any person claiming refund of any duty of excise has to move an application for refund of such duty to the Assistant Commissioner of Central Excise. Once such an application is made, the same is to be considered in accordance with this provision. As already pointed out above, under the un-amended provision, the Assistant Commissioner was not required to go into the question as to whether incidence of such duty had been passed on by the applicant claiming refund to any other person or not. However, if the application was not decided till the time amendment was incorporated in the year 1991, as per the proviso, while dealing with such an application for refund, the Assistant Commissioner is still empowered to go into this question even when the application was filed before the commencement of the amended provision. This situation would prevail only when there is a pending application before the Assistant Commissioner of Central Excise, which is yet to be decided. If the order for refund on such an application had already been passed before coming into force the amended provision and no application was pending at the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991 before the Assistant Commissioner and, therefore, question of applying the said proviso and going into the issue as to whether incidence of such duty had been passed by the applicant to any other person or not would not arise. Thereafter, order passed on the application is only to be implemented by giving the refund as per that order. By no stretch of imagination, the Officer, at the time of carrying out the orders for refund, which have already been passed, can be invested with the powers to go into the question of unjust enrichment by invoking the proviso to sub-section (1) of Section 11B. In the instant case, the order on the refund application of the respondent had been passed on 06.06.1989, which was much before the amended provision came into operation. In fact, even after the order of refund was passed, the appellant had not refunded the amount and it is in these circumstances that writ petition was filed in the High Court for initiation of contempt proceedings against the defaulting officers. In such proceedings, the High Court had passed the order dated 18.07.1995. In this order, no doubt, the Court observed that the Assistant Commissioner would go into the question if the respondent should be granted the refund in spite of Section 11B of the Act. However, merely because of such observations, it cannot be said that the Assistant Commissioner was entitled to look into the issue of unjust enrichment when if, otherwise, he was otherwise had no jurisdiction to do so in the facts of the present case. Such observations were given in view of the statement of the counsel for the Government who brought to the notice of the Court the amended provisions contained in sub-section (3) of Section 11B of the Act. The High Court did not go into the issue as to whether such a course of action was permissible or not. Another pertinent aspect which needs to be kept in mind is that the interpretation that is to be accorded to the amended provision had not been decided by this Court till that time and the law on this issue came to be settled in the year 1997 only when the judgment in Mafatlal Industries Ltd. (supra) was pronounced by this Court.

17. Thus, when the order of the Assistant Commissioner was challenged and the matter came before the Tribunal, the Tribunal was duty bound to apply the law laid down in Mafatlal Industries Ltd. (supra), which it did. Similar exercise is done by the High Court in the impugned judgment. We find that the view taken by the High Court is in consonance with the law laid down by this Court in the aforesaid case.

18. We find that there is no scope to interfere with the impugned decision of the High Court and, accordingly, dismiss this appeal. No costs.

............................................. (ROHINTON FALI NARIMAN, J.

…………………

(2015) 119 (3) CWN (SC) 66

IN THE SUPREME COURT OF INDIA

(BEFORE DIPAK MISRA AND PRAFULLA C. PANT, JJ.)

State of West Bengal and Others ...Appellants
Vs.
R.K.B.K. Ltd. & Anr. ...Respondents

Civil Appeal No. 2825 of 2015; Arising out of SLP(C) No. 30338 of 2014; Civil Appellate Jurisdiction; Judgment on: 04.09.2015

West Bengal Kerosene Oil Control Order, 1968 – respondent was granted license carrying business of superior kerosene oil by Director of Consumer Goods – upon inspection irregularities were observed for delivering of K. Oil – show cause notice was issued by Director of Consumer Goods – upon hearing respondent had been charged with offences – challenged the jurisdiction of Director of Consumer for adjudication – High Court upheld the order of the Director of Consumer Goods – Division Bench reversed the order of the Single Judge and set aside the order of the Director of Consumer Goods – Director as well as District Magistrate would have concurrent jurisdiction – Division Bench erroneously interpreted and concluded accordingly – Director of Consumer Goods alone has the jurisdiction to adjudicate the subject matter.

Ratio decidendi:-
Under West Bengal Kerosene Oil Control Order, 1968, Director of Consumer Goods alone has the jurisdiction to adjudicate the subject matter.

Observations of the Court:-
Power conferred on the Director and the District Magistrate are different, for the Director is a higher authority and the rule clothes him with more authority. Needless to say, the said paragraph has to be read in juxtaposition with other paragraphs. It is clear from paragraph 5 that the Director alone is authorised to grant a licence to an agent whereas a dealer’s licence can be granted either by the Director or by the District Magistrate. Sub-para 3 of Paragraph 5 of the Control Order is also indicative of the fact that the agent operates at a larger scale than the dealer. An agent can sell, supply or transfer kerosene to a dealer, holder of a permit or delivery order and no other person. Sub-para 2 of Paragraph 6 of the Control Order is differently worded as it postulates that conditions can be specified by the Director or the District Magistrate having the jurisdiction. The conditions imposed may vary from time to time for the sake of fair distribution of kerosene. The authorities are also different as per the dictionary clause.(para 18)
On a literal reading of paragraph 9, it may convey or one may be emboldened to urge that Director as well as the District Magistrate including the authorised officers mentioned in paragraph 3(e), have concurrent jurisdiction to cancel or suspend the licence granted to an agent or a dealer. However, such an interpretation could not be occurred with the legislative intent and would lead to absurdity and anomaly. Therefore, such kind of an interpretation has to be avoided.(para 19)
“It is well settled that “the words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained”.(Maxwell, Interpretation of Statutes, 9th Edn., p. 55).”(para 20)
The expression “District Magistrate having jurisdiction” reflects the legislative intent that District Magistrate having jurisdiction under paragraph 9 would be the same District Magistrate or authority which has the power to grant licence to a dealer in Form B under paragraph 6. Read in this manner, we have no hesitation in holding that it is the Director alone who could have issued the show cause notice under paragraph 9 and has the authority and jurisdiction to pass an order in terms of paragraph 9 of the Control Order.(para 21)
in the case of Assistant Transport Commissioner, Uttar Pradesh v. Nand Singh, [reported in 179 ELT (510) where the Apex Court while considering Section 35 of the Central Excise and Salt Act, 1944 held that the date of communication of the order will be the starting point of limitation for filing an appeal and not the date of the order, because, the order would be effective against the person affected by it only when it comes to the knowledge either direct or constructively, otherwise not. The Supreme Court further held that mere writing of an order in the file, kept in the office of the authorities, is no order in the eye of law.(para 30)

Held:-
The appeal is allowed and the order passed by the Division Bench in AST No. 177/2013 is set aside and the respondent no.1 is granted liberty to prefer an appeal within the prescribed period before the State Government. Be it noted, the Control Order has been amended in 2014 whereby the period of limitation has been extended. Be that as it may, we direct that the period of limitation shall commence from today.

List of cases cited:-
Rani Sati Kerosene Supply Company and Others Vs. The State of West Bengal and Others, 2005 (4) CHN 264 (relied on)
Reserve Bank of India Vs. Peerless General Finance and Investment Co. Ltd. and Others, (1987) 1 SCC 424 (relied on)
Workmen Vs. Dimakuchi Tea Estate, AIR 1958 SC 353 (relied on)
Assistant Transport Commissioner, Uttar Pradesh Vs. Nand Singh, 179 ELT (510) (referred to)
MCD Vs. Qimat Rai Gupta and others, (2007) 7 SCC 309 (referred to)
CCE Vs. M.M. Rubber and Co., (1992) Supp. (1) SCC 471 (referred to)
Surendra Singh Vs. State of U.P., AIR 1954 SC 194 (referred to)
Harish Chandra Raj Singh Vs. Dy. Land Acquisition Officer, AIR 1961 SC 1500 (referred to)
K.Bhaskaran Vs. Sankaran Vaidhya Balan, (1999) 7 SCC 510 (referred to)
State of Punjab Vs. Amar Singh Harika, AIR 1966 SC 1313 (relied on)
State of Punjab Vs. Khemi Ram, (1969) 3 SCC 28 (relied on)
Kailash Vs. Nankhu and others, (2005) 4 SCC 480 (relied on)

The Judgement of the Court was delivered by Dipak Misra, J.:-

1. In this appeal, by special leave, the legal substantiality and acceptability of the judgment and order dated 29.08.2014 passed by the Division Bench of the High Court of Calcutta in AST No. 177/2013 whereby it has overturned the decision of the learned Single Judge requiring the respondent-writ petitioner to knock at the doors of the alternative forum by way of appeal, on the foundation that the authority that had passed the adverse order against the first respondent had no jurisdiction, and assuming he had the jurisdiction, it stood extinguished by expiration of the time limit stipulated in certain paragraphs of the West Bengal Kerosene Oil Control Order, 1968 (for brevity, ‘the Control Order’), is called in question.

2. The facts which need to be exposited for adjudication of this appeal are that the first respondent was granted the licence for carrying on the business of superior kerosene oil as an agent by the Joint Director of Consumer Goods, West Bengal in accordance with the paragraph 5(1) of the Control Order. The monthly allocation of public distribution system of superior kerosene oil to the said respondent was fixed by the Director of Consumer Goods, West Bengal at 1,82,000 litres per month. On 10.8.2012 a physical inspection was carried out by the Area Inspector attached to the office of the Sub Divisional Controller, Food and Supplies, Burdwan (for short, “SCFS”) at the depot of the respondent. The concerned Inspector submitted the report to the SCFS stating that 71,494 litres of superior kerosene oil had been delivered in excess by the dealer. On 8.4.2013, the SCFS issued a notice seeking explanation about the discrepancy pointed out by the Area Inspector. On receipt of the said show cause notice, the first respondent submitted his explanation on 16.4.2013. The SCFS afforded an opportunity of personal hearing to the dealer on 3.5.2013 and the same was availed of. After conducting the enquiry, the SCFS forwarded the entire record to the District Controller, Food and Supplies Department, Burdwan, who in turn sent the entire case records to the Director of Consumer Goods for appropriate decision. After scrutiny of the records, the Director of Consumer Goods issued a show cause notice to the dealer on 26.6.2013. The first respondent replied to the same on 28.6.2013 through his counsel stating, inter alia, that under the Control Order, after the licence is issued to an agent by the Office of the Director, the District Magistrate having jurisdiction or any officer authorised by him, is alone empowered to look into the functioning of the said agency and to give directions to him and/or initiate action against the concerned agent. Additionally, it was also put forth that the second show cause notice on the self-same allegations was untenable in law and accordingly prayer was made to withdraw and/or rescind the notice and take steps for disposal of the matter in terms of the provisions of the Control Order.

3. As the factual matrix would further undrape, the Director of Consumer Goods, vide order dated 22.7.2013 narrated the facts in detail and came to hold that SCFS has the authority to ask for explanation regarding distribution of superior kerosene oil in his jurisdiction; and that the Director of Consumer Goods being the Licensing Authority, can exercise the power to issue show cause notice and after giving the delinquent agent a fair opportunity of being heard, pass appropriate orders. The said order also would reflect that the counsel for the first respondent had appeared before the Director on 17.7.2013. The concerned Director analysed the factual matrix and in exercise of power conferred on him under paragraph 9(ii) of the Control Order imposed a penalty of Rs.26,08,816.00 and further directed reduction of monthly allocation of superior kerosene oil of the agent by 12,000 litres for a period of one year.

4. The order passed by the Director was assailed by the agent in W.P. No. 25204 (W) of 2013. The learned Single Judge vide order dated 22.08.2013 referred to paragraph 10 of the Control Order which provides for an appeal to be preferred and accordingly directed that if the agent prefers an appeal by 6.9.2013, the appellate authority shall dispose of the same by 31.12.2013. The learned Single Judge further directed that the agent shall maintain with utmost care an inventory of stocks and accounts for periodical submission to the authorities and the penalty amount should be deposited by 6.9.2013 and the said penalty amount shall be kept in a separate interest bearing account.

5. Being aggrieved by the aforesaid order, the respondents 1 and 2 preferred an appeal being AST No. 177 of 2013 before the Division Bench. It was urged in the intra-court appeal that the proceeding before the Director of Consumer Goods was patently without jurisdiction, for power of cancellation or suspension could only be exercised by the Director or District Magistrate having jurisdiction and in the case at hand the District Magistrate, Burdwan is the competent authority to exercise the power under paragraph 9 of the Control Order and not the Director of Consumer Goods; that assuming the Director had jurisdiction, the proceeding that was initiated had lapsed after expiry of 30 days after the date of issuance of the show cause notice by the Director; and that in any case the proceeding was initiated by SCFS and he could not have sent the record to the Director after expiry of 30 days when the proceeding stood lapsed. It was also urged that the order in question was served on the first respondent on 12.8.2013 and, therefore, the date mentioned in the order could not validate the same as it was not dispatched within 30 days. The submissions put forth by the first respondent before the Division Bench of the High Court were seriously contested by the learned counsel for the Department.

6. The Division Bench posed the following two questions:-
“a. Who is the competent authority to take disciplinary action either by cancellation or suspension of the licence of a S.K. Oil agent appointed in a district outside the Calcutta?
b. Whether the order of cancellation or suspension of licence in terms of Paragraph 9 of the West Bengal Kerosene Control Order will become effective on the date of passing of the said order or when the said order is communicated to the concerned party?”

7. After posing the aforesaid two questions, the Division Bench took note of the fact that the respondent-dealer was authorised to carry on the business as an agent of super kerosene oil in the district of Burdwan and the SCFS had issued a show cause to the respondent and instead of taking the final decision himself, forwarded the records to the Director of Consumer Goods for necessary action who issued a fresh show cause notice on the self-same allegations and passed a order on 22.07.2013 which was without jurisdiction in view of the conjoint reading of the language employed in paragraphs 8, 9 and 10 of the Control Order. Thereafter, the Division Bench proceeded to deal with the issue whether the Director had passed the order imposing penalty within 30 days from the date of serving the show cause notice in terms of paragraph 9 of the Control Order, for the same was served on the dealer on 12.8.2013. The Court took note of the contention of the advanced by the learned counsel for the appellants therein that the order under Paragraph 9 passed by the competent authority in writing within 30 days from the date of serving the show cause notice should mean the communication of the order in writing within the said period of 30 days and not from the signing of the order and accepted the same. To arrive at the said conclusion, the appellate Bench placed reliance on Rani Sati Kerosene Supply Company and Others v. The State of West Bengal and Others, 2005 (4) CHN 264. It referred to paragraphs 27 and 29 of the said decision and thereafter came to hold thus:-
“For the reasons discussed hereinabove, we hold that the Sub-Divisional Controller, Food and Supplies, Burdwan lawfully initiated the proceeding against the appellant/writ petitioner no.1 by issuing show cause notice but did not conclude the same within 30 days as required under paragraph 9 of the West Bengal Kerosene Control Order, 1968. We further hold that the Director of Consumer Goods had no jurisdiction and/or authority to initiate any proceeding against the appellant/writ petitioner no. 1 in terms of paragraph 9 of the West Bengal Kerosene Control Order since the licence was granted to the appellant/writ petitioner no. 1 for carrying on business as S.K. Oil agent in the district of Burdwan which is outside Calcutta. In the result, the impugned order dated 22nd July, 2013 passed by the Director of Consumer Goods cannot survive and is liable to be set aside since the said Director had no authority and/or jurisdiction to pass any order under paragraph 9 of the West Bengal Kerosene Control Order, 1968 in respect of S.K. Oil agent of Burdwan. Therefore, the impugned order dated 22nd July, 2013 issued by the Director of Consumer Goods in respect of the appellant/writ petitioner no. 1 is quashed.” Being of this view, it allowed the appeal and set aside the judgment of the learned Single Judge of the High Court.

8. We have heard Mr. Mohan Parasaran, learned senior counsel along with Mr. Anip Sachtey, learned counsel for the appellants and Mr. Vivek K. Tankha, learned senior counsel along with Mr. Rajan K. Choursia, learned counsel for the first respondent.

9. At the outset, it is obligatory on our part to state that when the final hearing of the appeal took place, we were apprised at the Bar that SCFS who represents the District Magistrate, has issued a fresh show cause notice in respect of self-same lis and accordingly the following order was passed:-
“In course of hearing we have been apprised that the Sub-Divisional Controller, Food and Supplies, Burdwan, who represents the District Magistrate, Burdwan, has issued a fresh show cause notice on the self-same lis and against its notice to show cause, an appeal has been preferred before the Director of Consumer Goods in Kolkata. Be it noted, the show cause number is Memo No.4159/SCF&S/BDN/14. The appeal arisen out of the said show cause notice before the appellate authority shall remain stayed till the pronouncement of the judgment.”

10. We shall advert to the legal permissibility of the second show cause in respect of the same alleged deviation by the agent at a later stage, if required. As the factual foundation would exposit, the thrust of the controversy is whether the Director of Consumer Goods, Food and Supplies Department has the jurisdiction to take action in the manner he has taken; and whether the order has to be passed and communicated within 30 days under the Control Order and the consequence of failure in such a situation. The Control Order was brought into force on 26.6.1968 in exercise of powers conferred by sub-section 1 of Section 3 of the Essential Commodities Act, 1955 read with clauses (d), (e), (h) and (j) of sub-section 2 of that Section and Section 7(1) of the said Act and the Order No.26(11)-Com.Genl/66, dated 18th June, 1966 feeling the necessity and expediency for proper maintenance of supplies and for securing the equitable distribution and availability at fair prices of kerosene in West Bengal. Paragraph 3(a) of the Control Order defines “agent” which reads as under:-
“3(a) “agent” means a person who has been appointed as an agent of an oil distributing company by such company and has been granted a licence under paragraph 5 of this Order.”

11. Paragraph 3(c) of the Control Order defines “dealer” which reads as follows:-
“3(c) “dealer” means a person who has been granted a licence under paragraph 6 of this Order authorising him to carry on trade in kerosene.

12. Paragraphs 3(d) and 3(e) of the Control Order define the “Director” and the “District Magistrate” respectively, which reads as follows:-
3(d) “Director” means the Director of Consumer Goods, Department of Food and Supplies, Government of West Bengal and includes any officer, not below the rank of Assistant Director, Directorate of Consumer Goods, Food and Supplies Department, Government of West Bengal who can perform all the functions of the Director and this order including cancellation of licence.
3(e) “District Magistrate” includes the Deputy Commissioner of a district and also includes any person not below the rank of a Sub-divisional Controller of Food and Supplies in the Department of Food and Supplies, Government of West Bengal, authorised by the District Magistrate or Deputy Commissioner, as the case may be, in writing to perform all or any of the functions of the District Magistrate under this Order.”

13. Paragraph 5 of the Control Order deals with grant of licence to an agent. It reads as under:-
“5. Grant of licence to agent – (1) The Director may grant a licence to any agent in West Bengal authorising him to carry on trade in kerosene as such agent.
(2) A licence granted under sub-paragraph (1) shall be in Form A and shall be subject to such conditions as are specified therein and such other conditions as the Director may lay down from time to time in the interest of fair distribution of kerosene within the State.
(3) No agent shall sell, supply or transfer kerosene to any person other than a dealer duly licensed under paragraph 6 of this Order, or a holder of a permit or delivery order issued under paragraph 11 of this Order.”

14. Paragraph 6 deals with grant of licence to a dealer. It is as follows:-
“6. Grant of licence to dealer–(1) the Director or the District Magistrate having jurisdiction may grant a licence to any person authorsing such person to carry on trade in kerosene as a dealer.
(2) A licence granted under sub-paragraph (1) shall be in Form B and shall be subject to such conditions as are specified therein and such other conditions as the Director or the District Magistrate having jurisdiction may impose from time to time for the sake of fair distribution of kerosene.”

15. Paragraph 9 of the Control Order deals with cancellation or suspension of licence. The same being of significance, is reproduced in entirety herein below:-
“9. Cancellation or suspension of licence – If it appears to the Director or the District Magistrate having jurisdiction that an agent or a dealer has indulged in any malpractice or contravened any provision of this Order or any condition of the licence or any direction given under paragraph 12 of this Order, he may forthwith as the Agent or Dealer to show cause for violations made or suspend the licence:
Provided that the agent or the dealer who has been asked to show-cause or whose licence has been suspended shall be given an opportunity of being heard and the Director or the District Magistrate having jurisdiction shall pass an order in writing within 30 days from the date of serving the show-cause notice or suspension of the licence taking any or all of the actions given below.
(i) He may let off the Agent or Dealer if sufficient cause has been shown.
(ii) He may pass an order by imposing a penalty which according to the gravity of the violations made will not be less than Rs.10,000/- in case of an Agent and Rs.2,000/- in case of a Dealer and revoke the suspension order if already served.
(iii) He may cancel the licence:
Provided that the order shall be passed ex parte if the Agent or the Dealer whose licence has been so suspended or on whom show-cause notice has been served fails to appear at the hearing.”

16. Paragraph 10 of the Control Order which provides for appeal is extracted hereunder:-
“10. Appeal – (a) Any person aggrieved by an Order passed under paragraph 8 or paragraph 9 of this Order, may within 30 days from the date of the order, prefer an appeal to the State Government in the Food and Supplies Department.
(b) elsewhere, –
(i) where the order is passed by the District Magistrate or the Deputy Commissioner of a district, to the State Government,
(ii) where the order is passed by any other officer authorised by the District Magistrate or the Deputy Commissioner of a district under clause (e) of paragraph 3, to the District Magistrate or the Deputy Commissioner, as the case may be, of the district.

17. We have reproduced the relevant paragraphs of the Control Order to understand the schematic purpose and effect of the Control Order. Paragraph 5, as it envisages, empowers the Director to grant licence to any agent in West Bengal authorising him to carry on trade in kerosene as such agent. Paragraph 6 empowers the Director or the District Magistrate having jurisdiction to grant the licence to any person as a dealer. As the scheme would reflect there is a distinction between an “agent” and a “dealer”, for the agent is granted licence under paragraph 5 of the Control Order whereas dealer is granted licence under paragraph 6 of the Control Order. Paragraph (7) provides for renewal of licences, licence fees, etc. The relevant part of the said paragraph is as follows:-
“7. Renewal of licences, licence fees, etc.–(1) Every licence issued under paragraph 5 or paragraph 6 of this Order shall be valid up to 31st December next following the date of issue and may, at the discretion of the authority by which the licence was granted, be renewed for successive periods of one year on an application made in that behalf to such authority in the manner provided hereinafter before the expiry of the date of validity of the licence:
Provided that –
(i) the Director may, by notification in the Official Gazette, extend the period of validity of existing agents’ licences issued under paragraph 5 of this Order for such period, not exceeding 60 days, beyond the 31st December, hereinbefore mentioned, as he may, for reasons to be recorded in writing, think fit; and
(ii) the Director, or the District Magistrate having jurisdiction, may, by notification in the Official Gazette, extend the period of validity of existing dealers’ licences issued under paragraph 6 of this Order for such period, not exceeding 60 days beyond the 31st December, hereinbefore mentioned, as he may, for reasons to be recorded in writing, think fit: Provided further that the Director or the District Magistrate, as the case may be, may, by notification in the Official Gazette, extend the time for filing of application for renewal of licences:
Provided also that on an application made by a licensee in that behalf, the authority by which the licence was issued may, if he considers it expedient so to do, renew a licence issued under paragraph 5 or paragraph 6 of this Order, for a maximum period of three years at a time on payment in non-judicial stamps of the fees for renewal of licences referred to in sub-paragraph (3) of this paragraph, for each year of renewal or part thereof.
(2) Every application for the issue of licence under paragraph 5 or paragraph 6 of the Order or for the renewal of such licence under this paragraph shall be made to the appropriate authority in Form C”.

18. On a reading of that paragraph it is clear that power conferred on the Director and the District Magistrate are different, for the Director is a higher authority and the rule clothes him with more authority. Needless to say, the said paragraph has to be read in juxtaposition with other paragraphs. It is clear from paragraph 5 that the Director alone is authorised to grant a licence to an agent whereas a dealer’s licence can be granted either by the Director or by the District Magistrate. Sub-para 3 of Paragraph 5 of the Control Order is also indicative of the fact that the agent operates at a larger scale than the dealer. An agent can sell, supply or transfer kerosene to a dealer, holder of a permit or delivery order and no other person. Sub-para 2 of Paragraph 6 of the Control Order is differently worded as it postulates that conditions can be specified by the Director or the District Magistrate having the jurisdiction. The conditions imposed may vary from time to time for the sake of fair distribution of kerosene. The authorities are also different as per the dictionary clause.

19. In this backdrop, we are required to understand the language employed in paragraph 9 of the Control Order. The said paragraph, as we perceive, is rather loosely and ambiguously worded. It becomes obvious when we appreciate the Control Order on the bedrock of schematic interpretation. It is worth noting that while paragraph 5 deals with grant of licence to an agent by the Director, paragraph 6 deals with grant of licence to a dealer by the Director or the District Magistrate. The term “District Magistrate” as per paragraph 3(e) of the Control Order includes authorities mentioned therein. Paragraph 9 which pertain to cancellation or suspension of licence is a composite paragraph and stipulates when and who can cancel or suspend a licence of an agent or a dealer. The said power is exercised, when an agent or dealer has indulged in any kind of malpractice or contravened any provision of the Control Order or conditions applicable, etc. On a literal reading of paragraph 9, it may convey or one may be emboldened to urge that Director as well as the District Magistrate including the authorised officers mentioned in paragraph 3(e), have concurrent jurisdiction to cancel or suspend the licence granted to an agent or a dealer. However, such an interpretation could not be occurred with the legislative intent and would lead to absurdity and anomaly. Therefore, such kind of an interpretation has to be avoided. We are disposed to think so inasmuch as an agent, as noted above, is appointed by the Director and has the authority to carry on trade of kerosene within the entire State. But a dealer, cannot supply, sell or transfer kerosene to any person other than a holder of a permit, delivery order or through a dealer specified in paragraph 6. That apart, it is noticeable that sub-paragraph (e) of paragraph (3) a District Magistrate would include a sub-Divisional Controller of Food and Supplies, authorised by the District Magistrate or Deputy Commissioner and District Magistrate is for a specified small area within the State. He cannot exercise jurisdiction in respect of an area beyond the geographical boundaries of the area/district. In such a situation to place a construction on Paragraph 9 that the Director as well as the District Magistrate would have concurrent jurisdiction would be inapposite. In our considered view, a logical and reasonable interpretation to paragraph 9 of the Control Order has to be preferred instead of adopting the loose meaning in the literal sense. Such an interpretation would be in consonance with the principles of harmonious construction, that is, harmonious reading of paragraphs 5, 6, 7 and 9 of the Control Order. It is based on the premise that the authority who has the right to grant licence has the authority to suspend or cancel the licence. In this regard, we may fruitfully reproduce a passage from Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and Others, (1987) 1 SCC 424 wherein it has succinctly been stated thus:-
“Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.”

20. We have referred to the said passage, for the Control Order was brought into force for maintenance of supplies and for securing the equitable distribution and availability of kerosene at fair prices in West Bengal. It has controlling measures and it sub-serves the public purpose. The intent of the Control Order is to totally prohibit creation of any kind of situation which will frustrate the proper distribution of kerosene oil. The purpose of any Act or Rule or Order has its own sanctity. While interpreting the same, the text and context have to be kept in mind. In this regard, we may usefully refer to an authority in Workmen v. Dimakuchi Tea Estate, AIR 1958 SC 353 wherein the three-Judge Bench while interpreting the expression “any person” occurring in Section 2(k) of the Industrial Disputes Act, 1947 observed that the definition clause must be read in the context of the subject matter and scheme of the Act, and consistently with the objects and other provisions of the Act. Elaborating further, the Court proceeded to state:-
“It is well settled that “the words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained”.(Maxwell, Interpretation of Statutes, 9th Edn., p. 55).”

21. Keeping in view the aforesaid rule of interpretation, we are constrained to think that it would be incongruous to hold that even when the licence of an agent at the State level is granted and issued by the Director, a District Magistrate, as defined in paragraph 3(e) of the Control Order, in exercise of concurrent jurisdiction can suspend or cancel the State level licence. Be it noted, as per Section 21 of the General Clauses Act, power to issue notification/order/rules/bye-laws, etc. includes the power to amend/vary or rescind. Though the said provision is not applicable, yet it is indicative that generally unless the statute or rule provides to the contrary, either expressly or impliedly, issuing or appointing authority would also exercise the right to cancel or suspend the licence. As has been stated earlier, on a cursory reading it may appear that paragraph 9 confers concurrent jurisdiction. The said paragraph deals with suspension or cancellation of licence and is a composite paragraph, which applies to licence granted to an agent as well as the dealer. It refers to the power of a Director and District Magistrate having jurisdiction. The words “District Magistrate having jurisdiction” are also used in paragraph 6. The expression “District Magistrate having jurisdiction” reflects the legislative intent that District Magistrate having jurisdiction under paragraph 9 would be the same District Magistrate or authority which has the power to grant licence to a dealer in Form B under paragraph 6. Read in this manner, we have no hesitation in holding that it is the Director alone who could have issued the show cause notice under paragraph 9 and has the authority and jurisdiction to pass an order in terms of paragraph 9 of the Control Order. The earlier notice issued by SCFS has to be regarded at best a show cause notice to ascertain and affirm facts alleged and it ensured a response and reply from the first respondent. The said notice by SCFS could not have culminated in the order under paragraph 9, for he has no authority and jurisdiction to pass an order suspending or cancelling the licence. Therefore, the matter was rightly referred to the Director for action, if required, in terms of paragraph 9 of the Control Order.

22. Having held that, we think it appropriate to refer to the aspect of communication pertaining to period as prescribed in paragraphs 9 and 10. The High Court has taken note of the fact that SCFS had issued the notice of show cause to which the agent had replied. The said authority has forwarded the matter to the Director, Consumer Goods for his perusal and necessary action, who in exercise of his authority had passed the order on 22.7.2013 which was received by the first respondent on 12.8.2013. The Division Bench has opined that as per Paragraph 9, the order has to be passed within 30 days after the issue of the notice to show cause and same has to be communicated within the said period and passing an order on the file would not tantamount to an order.

23. The Division Bench, as it appears, has been guided by the decision in Rani Sati Kerosene Supply Company and Others (supra). In the said case the agent had challenged the order of suspension-cum-show cause notice and the order of cancelling the agency licence. The High Court had taken note of the contention that assuming the Director had jurisdiction, the order having been communicated beyond 30 days from the issue of the order of suspension, it was liable to be set aside. After stating the facts, the earlier Division Bench proceeded to interpret Paragraphs 9 and 10 of the Control Order and opined thus:-
“29. After going through the aforesaid two paragraphs, I find that against an order of cancellation of licence, there is a provision of appeal to be availed of within 30 days from the date of the order. There is, however, no power conferred upon the appellate authority to entertain such appeal after the period of limitation by condoning the delay. If I accept the contention of Mr. Chakraborty, the learned Counsel appearing for the State that the date of communication of the order is insignificant, in that case, the right of appeal conferred upon the aggrieved agent against an order of cancellation can easily be frustrated by communicating the order after the expiry of 30 days from the date of the order. Therefore the phrase "by an order in writing to be made" appearing in the proviso to the Paragraph 9 is to be construed as "by an order in writing to be communicated" and so long the order is not communicated, it should be presumed that the order has not been passed and consequently, a duty is cast upon the authority concerned to communicate the order to the aggrieved, either direct or constructively. Mere passing of an order and keeping it in the file will not fulfil the requirement of the said Paragraph 9.
30. Mr. Banerjee, the learned advocate appearing for the petitioners, has in this connection placed strong reliance upon a decision of the Supreme Court in the case of Assistant Transport Commissioner, Uttar Pradesh v. Nand Singh, [reported in 179 ELT (510) where the Apex Court while considering Section 35 of the Central Excise and Salt Act, 1944 held that the date of communication of the order will be the starting point of limitation for filing an appeal and not the date of the order, because, the order would be effective against the person affected by it only when it comes to the knowledge either direct or constructively, otherwise not. The Supreme Court further held that mere writing of an order in the file, kept in the office of the authorities, is no order in the eye of law.
31. The aforesaid decision of the Supreme Court supports the contention of the petitioners that the order of cancellation, for all practical purposes, should be deemed to have been passed on January 30, 2004 when the same was faxed for communication to the petitioners and served upon them. Thus, the order of cancellation of licence was, in the eye of law, passed beyond 30 days from the date of passing the order of suspension and consequently, the order of suspension had automatically ceased to have any effect from January 10, 2004, and the order of cancellation not having been passed in accordance with law within 30 days from December 10, 2003, the Director could not pass any such order beyond that date. Thus, the order impugned is liable to be quashed also on the aforesaid ground.”
The said judgment is the fulcrum of reasoning of the impugned judgment.

24. The aforesaid decision, as is evident, lays down that passing of the order and communication thereof must be within 30 days and on that basis has opined that the order passed on the file and not communicated to the person aggrieved is not an order that can be taken cognizance of. There can be no scintilla of doubt that unless an adverse order is communicated that does not come into effect. Passing of an order on the file does not become an order in the eye of law. But the core question would be, if an order is passed within 30 days and communicated thereafter, what would be the effect. In the instant case, as the factual matrix would unveil, the order was passed before expiration of 30 days, but the same was served on the first respondent beyond 30 days. The thrust of the matter is whether the order has to be passed and communicated within 30 days. Paragraph 9 of the Control Order requires the competent authority to pass an order within 30 days from the date of serving the show cause notice or the suspension of licence. The word used is “shall”. Paragraph 10 of the Control Order enables the aggrieved person to prefer an appeal against an order passed under Paragraph 8 or 9 within 30 days to the State Government in Food and Supplies Department. In this context, reference to the authority in MCD v. Qimat Rai Gupta and others, (2007) 7 SCC 309 is of significance. In the said case, the Court was interpreting the word “made” occurring in Section 126(4) of the Delhi Municipal Corporation Act, 1957, which stipulated that no amendment under sub-section 1 shall be made in the assessment list in relation to certain aspects. It was contended before this Court on behalf of the Municipal Corporation of Delhi that the use of the expression “made” occurring in the said sub-section would necessitate communication of the order. It was contended before this Court by the Corporation that the distinction must be made between communication of order and making thereof inasmuch as whereas communication may be necessary so as to enable an assessee to prefer an appeal against the order of assessment but only signing of the order would sub-serve the purpose of saving the period of limitation. The submission was that the expression “no amendment under sub-section (1) shall be made” should be given a liberal interpretation. Reliance was placed on the pronouncement in CCE v. M.M. Rubber and Co., (1992) Supp. (1) SCC 471. The said stand was controverted on the ground that the Act having been enacted for the purpose of controlling the abuse of power on the part of the Commissioner, the same should be given purposive meaning so as to fulfil the purport and object of the legislation. While dealing with the period of limitation, the Court observed:-
“16. In interpreting a provision dealing with limitation, a liberal interpretation in a situation of this nature should be given. Although an order passed after expiry of the period of limitation fixed under the statute would be a nullity, the same would not mean that a principle of interpretation applied thereto should not (sic) be such so as to mean that not only an order is required to be made but the same is also required to be communicated.
17. When an order is passed by a high ranking authority appointed by the Central Government, the law presumes that it would act bona fide. Misuse of power in a situation of this nature, in our opinion, should not be readily inferred. It is difficult to comprehend that while fixing a period of limitation, Parliament did not visualise the possibility of abuse of power on the part of the statutory authority. It advisedly chose the word “made” and not “communicated”. They, in ordinary parlance, carry different meanings.”

25. After so stating, the Court proceeded to interpret the term “made” and observed that meaning of a word depends upon the text and context and it will also depend upon the purport and object it seeks to achieve. The two-Judge Bench referred to Surendra Singh v. State of U.P., AIR 1954 SC 194, Harish Chandra Raj Singh v. Dy. Land Acquisition Officer, AIR 1961 SC 1500 and K.Bhaskaran v. Sankaran Vaidhya Balan, (1999) 7 SCC 510. The Court reproduced paragraphs 12 and 18 from M.M. Rubber and Co. (supra). They read as follows:-
“12. It may be seen therefore, that, if an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made: that is to say when he ceases to have any authority to tear it off and draft a different order and when he ceases to have any locus paetentiae. Normally that happens when the order or decision is made public or notified in some form or when it can be said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time.”
xxxxx xxxxx xxxxx
“18. Thus if the intention or design of the statutory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo motu power over the subordinate authorities’ orders, the date on which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this distinction may also be founded on the principle that the Government is bound by the proceedings of its officers but persons affected are not concluded by the decision.” Eventually, the Court came to hold thus:
“An order passed by a competent authority dismissing a government servant from services requires communication thereof as has been held in State of Punjab v. Amar Singh Harika, AIR 1966 SC 1313 but an order placing a government servant on suspension does not require communication of that order. (See State of Punjab v. Khemi Ram, (1969) 3 SCC 28.) What is, therefore, necessary to be borne in mind is the knowledge leading to the making of the order. An order ordinarily would be presumed to have been made when it is signed. Once it is signed and an entry in that regard is made in the requisite register kept and maintained in terms of the provisions of a statute, the same cannot be changed or altered. It, subject to the other provisions contained in the Act, attains finality. Where, however, communication of an order is a necessary ingredient for bringing an end result to a status or to provide a person an opportunity to take recourse to law if he is aggrieved thereby, the order is required to be communicated.”

26. We have referred to the aforesaid authority in extensor as the Division Bench has in one line stated that the said decision makes it clear that communication of an order is necessary ingredient for bringing an end result to a status or to provide a person an opportunity to take recourse to law if he is aggrieved thereby, then the said order is required to be communicated. To arrive at the said conclusion, as has been stated earlier, the Division Bench has found support from Rani Sati Kerosene Supply Company and Others (supra) wherein it has been held that if an order is communicated after 30 days, an order of cancellation can easily be frustrated and, therefore, the phrase by an order in writing to be made appearing in proviso to Paragraph 9 of the Control Order is to be construed as by an order in writing to be communicated.

27. The Division Bench has read the prescription of 30 days passing of an order in writing within 30 days from the date of serving the show cause notice or suspension of licence to be mandatory. To elaborate, if the order is not passed within the said period, the authority cannot pass any order or if it passes an order, it is a nullity. In this context, we may fruitfully refer to a passage from G.P. Singh’s book, as has been reproduced by the three-Judge Bench in Kailash v. Nankhu and others, (2005) 4 SCC 480. It reads as under:-
“Justice G.P. Singh notes in his celebrated work Principles of Statutory Interpretation (9th Edn., 2004) while dealing with mandatory and directory provisions:
“The study of numerous cases on this topic does not lead to formulation of any universal rule except this that language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statutory provision in question, in determining whether the same is mandatory or directory. In an oft-quoted passage Lord Campbell said: ‘No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.” (p. 338)
“For ascertaining the real intention of the legislature’, points out Subbarao, J. ‘the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from construing it the one way or the other; the impact of other provisions
whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non-compliance with the provisions; the fact that the non-compliance with the provisions is or is not visited by some penalty; the serious or the trivial consequences, that flow therefrom; and above all, whether the object of the legislation will be defeated or furthered’. If object of the enactment will be defeated by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory serious general inconvenience will be created to innocent persons without very much furthering the object of enactment, the same will be construed as directory.”(pp. 339-40)”

28. Keeping in view the aforesaid principles, if it is held that the order would become a nullity, it really does not serve the purpose of the Control Order. On the contrary, it frustrates it and, therefore, the interpretation placed by the High Court on Paragraph 9 in juxtaposition with Paragraph 10 to treat the order has null and void is neither correct nor sound. It is desirable that the authority shall pass an order within 30 days from the date of show cause. Be it noted that there are two contingencies when the show cause is issued for violation or when an order of suspension is passed. There can be no trace of doubt that the order will take effect from the date when it is served. The order, unless it is served, definitely neither the agent nor the dealer would suspend its activities or obey any order, for he has not been communicated. Regard being had to this aspect, it is to be seen whether the prescription of 30 days from the date of order as provided in Paragraph 10 would make the order null and void. The order passed by the authority comes into effect when it is communicated. An order passed in file in case of this nature would not be an effective order, for it is adverse to the interest of the dealer or agent and, therefore, paragraph 10 has to be given a purposive meaning. It has to convey that 30 days from the date of the order which is an effective order and that is the date of communication. Unless such an interpretation is placed, the intention of the rule making authority and also the intention behind the object and reasons behind the Control Order and the Essential Commodities Act, 1955 would be frustrated. Thus, we are of the considered opinion that the view expressed by the High Court on this score also is absolutely incorrect and wholly unsustainable.

29. Apart from above, the words used in Paragraph 10 are “date of the order”. In the scheme of the Control Order, the order comes into effect from the date of receipt by the agent or the dealer. Once that becomes the decision, the commencement of limitation of 30 days for the purpose of Paragraph 10 would be the date when the order is effective. The High Court in Rani Sati Kerosene Supply Company and Others (supra) has opined that if the order of cancellation is not served on the affected person and the appeal period expires, there is the possibility that the adverse order would become unassailable. The reasoning is totally fallacious. An appeal can only be preferred when the order is effective. The ineffective order, that is to say, un-communicated order cannot be challenged. Therefore, the reasoning given by the court in earlier judgment is erroneous and hence, the reliance thereupon by the impugned order is faulty. There has to be a purposive construction of the words “from the date of order”. To place a construction that the date of an order would mean passing of the order, though not made effective would lead to an absurdity.

30. In view of the aforesaid analysis, we arrive at the irresistible conclusion that the High Court has erroneously interpreted Paragraph 9 and 10 of the Control Order and that is why it has arrived at an erroneous conclusion. When we had reserved the judgment, we were apprised that a fresh show cause notice had been issued for the self-same allegation by the SCFS and an appeal has been preferred

against them. As we have held, the Director alone has the jurisdiction to pass the order, the said order remains a valid order and can be challenged in an appeal under Paragraph 10 and the appellate authority would be the State Government.

31. Consequently, the appeal is allowed and the order passed by the Division Bench in AST No. 177/2013 is set aside and the respondent no.1 is granted liberty to prefer an appeal within the prescribed period before the State Government. Be it noted, the Control Order has been amended in 2014 whereby the period of limitation has been extended. Be that as it may, we direct that the period of limitation shall commence from today. There shall be no order as to costs.

............................Prafulla C. Pant, J.

………………….

(2015) 119 (3) CWN (SC) 94

IN THE SUPREME COURT OF INDIA

(BEFORE VIKRAMAJIT SEN AND SHIVA KIRTI
SINGH, JJ.)

Tata Engineering and
Locomotive Company Ltd. …..Appellant
Vs.
The Director (Research) for and on
behalf of Deepak Khanna & Ors. …..Respondents

Civil Appeal No. 2069 of 2006; Civil Appellate Jurisdiction; Judgment on: 07.09.2015

Monopolies and Restrictive Trade Practices Act, 1969, Section 36A, 55 – Tata Indica Cars were introduced in the market in February, 1999 – Appellant invited prospective customers to book the cars through dealers – albeit initial allotment were for 10,000 Cars but appellant received booking money more than allotted cars – three complaints were made before the Commission with the allegations that the booking money exceeded the basic-price – appellant indulged in unfair trade practice by demanding excessive booking money – Commission held that appellant should not have asked for deposit of an amount above basic-price – the conclusion of Commission is based only upon subjective consideration of fairness and do not pass the objective test of law under Section 36A of the Act - no case of unfair trade practice is made out under Section 36A of the Act.

Ratio decidendi:-
The conclusion of Commission is based only upon subjective consideration of fairness and do not pass the objective test of law under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969. No case of unfair trade practice is made out under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969.

Observations of the Court:-
In Rajasthan Housing Board vs. Parvati Devi (Smt) (2000) 6 SCC 104, it was contended that when supplier and consumer have entered into an agreement then the Commission, in order to hold the supplier guilty of unfair trade practice on the basis of allegations made against it, is required to go into the terms and conditions agreed between the parties for finding out whether there was unfair trade practice so as to require further action on the basis of complaints.(para 7)
We have gone through the Preliminary Investigation Report, the Notice of Enquiry as well as the Order under appeal. We do not find any material or even allegation in the PIR which could satisfy any of the four unfair trade practices covered by various Clauses such as Clause (i), (ii), (iv) and (vi) of Section 36-A (1) of the Act. A careful perusal of the Notice of Enquiry dated 25.9.2000 reveals that no doubt a copy of the PIR was enclosed but the notice made it clear itself that the Commission came to a considered opinion that the Director (Research) had found the appellant indulging in unfair trade practices falling precisely and only under clauses (i), (ii), (iv) and (vi) of Section 36A(1) of the Act. The enquiry, as per the notice, was to cover:- (a) whether the respondent has been indulging in the above said unfair trade practice(s) and (b) whether the said unfair trade practice(s) is/are prejudicial to public interest.(para 11)
The order of the Commission appears to be largely influenced by a conclusion that the appellant should not have asked for deposit of an amount above the basic price because in the opinion of the Commission it was unfair for the appellants to keep excise and sales tax with itself for any period of time. Such conclusion of the Commission is based only upon subjective considerations of fairness and do not pass the objective test of law as per precise definitions under Section 36A of the Act. The submissions and contentions of Mr. Desai merit acceptance.(para 13)

Held:-
Even after stretching the allegations and facts to a considerable extent in favour of respondent Commission, we are unable to sustain the Commission’s conclusions that the allegations and materials against the appellant make out a case of unfair trade practice against the appellant. Nor there is any scope to pass order under Section 36-D(1) of the Act when no case of any unfair trade practice is made out. Hence, we are left with no option but to set aside the order under appeal.

List of cases cited:-
Rajasthan Housing Board Vs. Parvati Devi (Smt), (2000) 6 SCC 104 (relied on)

The Judgment of the Court was delivered by Shiva Kirti Singh, J.:-

1. This is an appeal under Section 55 of the Monopolies and Restrictive Trade Practices Act, 1969 (for brevity hereinafter referred to as ‘the Act’). The appellant is a company engaged in manufacture and sale of automobiles. It is aggrieved by the impugned order dated 28.2.2006 passed by the Monopolies and Restrictive Trade Practices Commission (for brevity ‘the Commission’) in U.T.P. Enquiry nos. 86/99, 87/99 and 90/99 whereby the Commission has directed the appellant to cease and desist from continuing with the practices complained of and not to repeat the same in future.

2. Since there is no dispute on facts, the case of the parties on facts is common and to the following effect:
(i) The practice under scrutiny is of the year 1999 when the appellant was to begin the manufacture and delivery of newly introduced Tata Indica cars into the market with effect from February 1999, with the installed capacity of approximately 60,000 cars in a year. The appellant invited the prospective customers to book the car through dealers. The booking amount demanded by the appellant was quite high and close to the estimated price finally payable which would include excise duty, sales tax and transportation charges. The terms and conditions for booking of order for purchase of Tata Indica cars were mentioned in detail indicating the model wise price depending upon the city of booking. It was indicated that the price of vehicle as well as taxes, duties and cess will be as applicable on the date of delivery. Those making valid booking were to be supplied the vehicle as per priority numbers generated and allocated by a computerized technique, for the first 10,000 bookings only. The terms also provided that the payments against the remaining bookings will be refunded to the customers, without interest, at the earliest but in any case within a month from the closing of the booking. For refunds after a month, interest will be paid at the rate of 10% per annum. The order booking form mentioned in Clause 7 that the person concerned had carefully read the terms and conditions of the bookings and agreed to the same.
(ii) Although the initial allotment was confined only to 10,000 cars, the appellant received as many as 1,13,768 booking applications along with stipulated amount which aggregated to Rs.3,216.44 crores. The appellant gave an option to prospective customers to opt for a second phase of 50,000 vehicles likely to be delivered from April-May 1999 to March 2000. It refunded the balance amounts to those who desired for refund, along with interest as represented. No complaint was made to the Commission by any of the persons who made the booking and thereafter either purchased the car or withdrew the deposits with or without interest, as the case may be.
(iii) However three complaints were made before the Commission by persons who claimed that they had intentions to make the booking but were dissuaded by the high quantum of deposit required for the purpose. Their specific objection was that the demanded amount exceeded the basic price of the car if cess, taxes and transportation cost were left out. According to the complainants the appellant had indulged in Unfair Trade Practice (UTP) by demanding an excessive amount for bookings of Indica cars and by including the likely taxes, cess and transportation cost.

3. Since the defence taken by the appellant was also not disputed on facts, it would be relevant to note the same. When the Commission received the three complaints, it sent them to the Director (Research) for investigation. The Director submitted Preliminary Investigation Reports (PIR) in all the three matters and three cases were registered as per numbers noted earlier. The Notices of Enquiry under Sections 36-B (d), 37, 36-D of the Act and under Regulation 51 were issued to the appellant who contested the complaints. The appellant filed its reply to the Notice of Enquiry in which it also raised a preliminary objection that the allegations of the restrictive trade practice were vague and not permissible by law. Their further defence was that there are no facts and material to show that the alleged practice is prejudicial to the public interest requiring an enquiry under Section 37 of the Act and that no facts were disclosed in the Notice of Enquiry to show prejudice to the public interest. On merits some of the allegations were denied as incorrect. It was pointed out that none of the complainants had applied for the booking of Tata Indica vehicle and hence they lacked locus standi to file the complaints in the capacity of consumers. On merits the appellant also took the defence that there was no false and misleading statement made by the appellant for inviting booking of Tata Indica cars, the applicants made the bookings with open eyes being aware about the stipulation for payment of interest. According to appellant by letter dated 6.2.1999 the successful applicants were intimated of the priority number allotted to them and the unsuccessful applicants were also informed that they had an option to be considered for the second phase of 50,000cars and such optees would be entitled to receive interest at the rate of 11% per annum with effect from 1.2.1999 till the date of delivery. Those who did not opt for the second phase deliveries were refunded their booking amounts along with 10% interest.

4. The appellant explained their practice by pleadings which are not controverted, that their past experience as automobile manufacturer was limited to heavy vehicles and hence in their initial venture into the car segment, they were not sure of public response and they had decided to plan their production schedule on the basis of reality test of car’s demand in the market. For this speculative bookings were required to be discouraged and the same was sought to be achieved by demanding an amount closer to the anticipated price which the customer would be required to pay. According to submissions, such practice could not have promoted the sale of their vehicle rather it was discouraging. The large response shows peoples’ faith in the products of the appellant and also that the interest rate offered by the appellants was appreciable and fair.

5. Learned Senior Counsel Mr. Ashok H. Desai highlighted the definition of Unfair Trade Practice as indicated in Section 36A of the Act. Since the Notice of Enquiry alleged that the appellant had indulged in unfair trade practices falling under Section 36A (1) (i), (ii), (iv) and (vi) of the Act, the aforesaid provisions need to be noticed. They read as follows:
“36A. Definition of unfair trade practice – In this Part, unless the context otherwise requires “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-
(1) the practice of making any statement, whether orally or in writing or by visible representation which,–
(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or mode;
(ii) falsely represents that the services are of a particular standard, quality or grade;
(iii) xxxxxxxxx
(iv) represents that the goods or services have sponsorships, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
(v) xxxxxxxxxx
(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;”

6. According to Mr. Desai the allegations against the appellant do not attract any of the practices mentioned in the Notice of Enquiry and contained in the definition noted above.

7. The second limb of arguments also flows from the definition in Section 36A of the Act. By placing reliance upon judgment of this Court in the case of Rajasthan Housing Board vs. Parvati Devi (Smt) (2000) 6 SCC 104, it was contended that when supplier and consumer have entered into an agreement then the Commission, in order to hold the supplier guilty of unfair trade practice on the basis of allegations made against it, is required to go into the terms and conditions agreed between the parties for finding out whether there was unfair trade practice so as to require further action on the basis of complaints. In support of this proposition reliance was placed mainly on paragraph 14 of the judgment which is as follows:
“14. For deciding such question, the Commission has to find out whether a particular act can be condemned as an unfair trade practice; whether representation contained a false statement and was misleading and what was the effect of such a representations made to the common man. The issue cannot be resolved by merely holding that representation was made to hand over the possession within the stipulated period and the same is not complied with or some lesser constructed area is given after the construction of the building. The Commission has to find out whether the representation, complained of, contains the element of misleading the buyer and whether buyers are misled or they are informed in advance that there is likelihood of delay in delivering the possession of constructed building and also increase in the cost. For this purpose, terms and conditions of the agreement are required to be examined by the Commission. Not only this, the Commission is required to consider whether the Board has adopted unfair method or deceptive practice for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services. Unless there is a finding on this issue, the appellant Board cannot be penalised for unfair trade practice.”

8. On behalf of appellant reliance was also placed upon judgment of this Court in the case of M/s Lakhanpal National Limited vs. M.R.T.P. Commission and Another (1989) 3 SCC 251, particularly paragraph 7 and 9 thereof. In paragraph 7 it was held that the definition of “Unfair Trade Practice” in Section 36A is not inclusive or flexible, but specific and limited in its contents. The Court also considered the object of this provision with a view to resolve the issue as to whether particular acts can be condemned as unfair practice or not. We are in full agreement with the view expressed by L. M. Sharma, J., as he then was and hence it would be more appropriate to extract para 7 which runs thus:
“7. However, the question in controversy has to be answered by construing the relevant provisions of the Act. The definition of “unfair trade practice” in Section 36-A mentioned above is not inclusive or flexible, but specific and limited in its contents. The object is to bring honesty and truth in the relationship between the manufacturer and the consumer. When a problem arises as to whether a particular act can be condemned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? Does it lead a reasonable person in the position of a buyer to a wrong conclusion? The issue cannot be resolved by merely examining whether the representation is correct or incorrect in the literal sense. A representation containing a statement apparently correct in the technical sense may have the effect of misleading the buyer by using tricky language. Similarly a statement, which may be inaccurate in the technical literal sense can convey the truth and sometimes more effectively than a literally correct statement. It is, therefore, necessary to examine whether the representation, complained of, contains the element of misleading the buyer. Does a reasonable man on reading the advertisement form a belief different from what the truth is? The position will have to be viewed with objectivity, in an impersonal manner. It is stated in Halsbury’s Laws of England (4th Edn., paras 1044 and 1045) that a representation will be deemed to be false if it is false in substance and in fact; and the test by which the representation is to be judged is to see whether the discrepancy between the fact as represented and the actual fact is such as would be considered material by a reasonable representee. “Another way of stating the rule is to say that substantial falsity is, on the one hand, necessary, and, on the other, adequate, to establish a misrepresentation” and “that where the entire representation is a faithful picture or transcript of the essential facts, no falsity is established, even though there may have been any number of inaccuracies in unimportant details. Conversely, if the general impression conveyed is false, the most punctilious and scrupulous accuracy in immaterial minutiae will not render the representation true”; Let us examine the relevant facts of this case in this background.”

9. In reply Mr. A.K. Sanghi, Senior Advocate defended the impugned order of the respondent Commission. According to him the Commission acted fairly in entertaining the complaints from three persons who found the booking amount very high and therefore did not deposit the same. According to him once a Preliminary Investigation Report dated 15.2.2000 was available with conclusion and recommendation to the effect that only the basic price of the car ought to have been collected from the public and not further amount which can cover only excise duties and sales tax that goes to the Government and that such amount should not have been retained by manufacturing units for a long period of time, the Commission although did not find the appellant guilty of any of the four specific provisions of Section 36-A (1) but still it felt compelled to conclude against the appellant and resultantly pass a cease and desist order under powers conferred upon the Commission by Section 36-D (1) (a) of the Act.

10. Mr. Sanghi also sought to support the finding of the Commission on issue number one that the appellant has indulged in unfair trade practice by referring to certain narratives in the Preliminary Investigation Report (PIR). As per his submission the Commission had not only communicated the precise allegations in terms of Section 36-A but had also enclosed with the Notice of Enquiry a copy of PIR and therefore findings cannot be criticized on the ground that the allegations were not precisely communicated through the Notice of Enquiry. We find no merit in these contentions. The Commission could not have travelled beyond the specific allegations in the Notice of Enquiry because such a course would violate rules of fairness and natural justice. The scope of enquiry could have been enlarged only after serving further notice with necessary details of allegations and supporting facts. This was clearly not done by the Commission. It is a flagrant violation of audi alteram partem rule. It renders the impugned order invalid and bad in law. The order is also bad for non-application of mind to requirement of law as stipulated in Section 36A(1) of the Act and the relevant facts.

11. We have gone through the Preliminary Investigation Report, the Notice of Enquiry as well as the Order under appeal. We do not find any material or even allegation in the PIR which could satisfy any of the four unfair trade practices covered by various Clauses such as Clause (i), (ii), (iv) and (vi) of Section 36-A (1) of the Act. A careful perusal of the Notice of Enquiry dated 25.9.2000 reveals that no doubt a copy of the PIR was enclosed but the notice made it clear itself that the Commission came to a considered opinion that the Director (Research) had found the appellant indulging in unfair trade practices falling precisely and only under clauses (i), (ii), (iv) and (vi) of Section 36A(1) of the Act. The enquiry, as per the notice, was to cover:- (a) whether the respondent has been indulging in the above said unfair trade practice(s) and (b) whether the said unfair trade practice(s) is/are prejudicial to public interest.

12. A scrutiny of the judgment under appeal discloses that the Commission failed to keep in mind the precise allegations against the appellant with a view to find out whether the facts could satisfy the definition of Unfair Trade Practice(s) as alleged against the appellant in the Notice of Enquiry. The Commission was apparently misled by the Preliminary Investigation Report also which claimed to deal with reply received from the appellant in course of the preliminary enquiry but patently failed even to notice the stipulation as regards payment of interest on the booking amount although this fact was obvious from the terms and conditions of the booking and was reportedly relied upon by the appellant in its reply even at the stage of preliminary investigation. The Commission noticed the relevant facts including provision for interest while narrating the facts, but failed to take note of this crucial aspect while discussing the relevant materials for the purpose of arriving at its conclusions. Such consideration and discussion begins from paragraph 32 onwards but

without ever indicating that the booking amounts had to be refunded within a short time or else it was to carry interest at the rate of 10% per annum.

13. The order of the Commission appears to be largely influenced by a conclusion that the appellant should not have asked for deposit of an amount above the basic price because in the opinion of the Commission it was unfair for the appellants to keep excise and sales tax with itself for any period of time. Such conclusion of the Commission is based only upon subjective considerations of fairness and do not pass the objective test of law as per precise definitions under Section 36A of the Act. The submissions and contentions of Mr. Desai merit acceptance.

14. Even after stretching the allegations and facts to a considerable extent in favour of respondent Commission, we are unable to sustain the Commission’s conclusions that the allegations and materials against the appellant make out a case of unfair trade practice against the appellant. Nor there is any scope to pass order under Section 36-D(1) of the Act when no case of any unfair trade practice is made out. Hence, we are left with no option but to set aside the order under appeal. We order accordingly. As a result the appeal stands allowed. However, there shall be no order as to costs.

…………………………………….VIKRAMAJIT SEN, J.
………………………….

(2015) 119 (3) CWN (SC) 106

IN THE SUPREME COURT OF INDIA

(BEFORE R. BANUMATHI AND DIPAK MISRA, JJ.)

Vice-Chancellor, Lucknow University
Lucknow, U.P. ...Appellant
Vs.
Akhilesh Kumar Khare & Anr. ...Respondents

Civil Appeal No.5731-5733, 5736-5750 of 2011; Civil Appellate Jurisdiction; Judgment on: 08.09.2015

Industrial Disputes Act, 1947, Section 17B - By oral engagement clerks/peons were appointed on daily wages by the Finance Officer without prior written approval of University – service of the daily wagers were terminated in January, 1991 – conciliation before Labour Commissioner was failed and referred to Labour Court – Labour Court held that the termination of the daily wagers were illegal and directed for reinstatement with full back wages – High Court affirmed the award of the Labour Court – Finance Officer of University had no right to appoint any persons - University did not create any such posts – no appointment letter was issued by the Registrar of the University for the engagement of the daily wagers - daily wagers were engaged in the accounts section as per the need and services were terminated when not required – at the time of regularisation daily wagers were not in service and could not seek parity with such regularisation – regularisation to the post cannot be given effect to, which was not sanctioned by the authority at the time of the employment.

Ratio decidendi:-
No appointment letter was issued by the Registrar of the University for Engagement of the daily wagers. At the time of regularisation daily wagers were not in service and could not seek parity with such regularisation. Regularisation to the post cannot be given effect to, which was not sanctioned by the authority at the time of the employment.

Observations of the Court:-
In para (53) of Umadevi’s case, the Constitution Bench carved out an exception to the general principles enumerated above and it reads as under:
“53. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa (1967) 1 SCR 128, R.N. Nanjundappa (1972) 1 SCC 409 and B.N. Nagarajan (1979) 4 SCC 507 and referred to in para 15
above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularisation of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment.(para 12)
This Court held that merely because a temporary employee or a casual wage worker is continued for a time beyond the term of his appointment, he would not be entitled to be absorbed in regular service or made permanent, merely on the strength of such continuance, if the original appointment was not made by following a due process of selection as envisaged by the relevant rules. In view of the law laid down by this Court, the directions sought for by the appellants cannot be granted.(para 14)
Jagbir Singh (2009) 15 SCC 327 has been applied very recently in Telegraph Deptt. v. Santosh Kumar Seal (2010) 6 SCC 773, wherein this Court stated: (SCC p. 777, para 11)
“11. In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice.”(para 16)

Held:-
In the light of the above discussion, the impugned judgment of the High Court is modified and keeping in view the fact that the respondents are facing hardship on account of pending litigation for more than two decades and the fact that some of the respondents are over aged and thus have lost the opportunity to get a job elsewhere, interest of justice would be met by directing the appellant-university to pay compensation of rupees four lakhs to each of the respondents. For long run litigation for more than two decades daily wagers are entitled to get benefit of Rs. 4 lacs under Section 17B of the Act, 1947.

List of cases cited:-
State of Karnataka and Others Vs. Umadevi (3) and Others, (2006) 4 SCC 1 (followed)
S.V. Narayanappa (1967) 1 SCR 128 (discussed)
R.N. Nanjundappa (1972) 1 SCC 409 (discussed)
B.N. Nagarajan (1979) 4 SCC 507 (discussed)
Satya Prakash & Others Vs. State of Bihar & Others (2010) 4 SCC 179 (discussed)
Incharge Officer & Anr. Vs. Shankar Shetty (2010) 9 SCC 126 (relied on)
Jagbir Singh Vs. Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327 (relied on)
U.P. State Brassware Corpn. Ltd. Vs. Uday Narain Pandey, (2006) 1 SCC 479 (referred to)
Uttaranchal Forest Development Corpn. Vs. M.C. Joshi, (2007) 9 SCC 353 (referred to)
State of M.P. Vs. Lalit Kumar Verma, (2007) 1 SCC 575 (referred to)
M.P. Admn. Vs. Tribhuban, (2007) 9 SCC 748 (referred to)
Sita Ram Vs. Moti Lal Nehru Farmers Training Institute, (2008) 5 SCC 75 (referred to)
Jaipur Development Authority Vs. Ramsahai, (2006) 11 SCC 684 (referred to)
GDA Vs. Ashok Kumar, (2008) 4 SCC 261 (referred to)
Mahboob Deepak Vs. Nagar Panchayat, Gajraula, (2008) 1 SCC 575 (referred to)
Telegraph Deptt. Vs. Santosh Kumar Seal, (2010) 6 SCC 773 (relied on)

The Judgment of the Court was delivered by R. Banumathi, J.:-

1. This batch of appeals arise out of the common judgment of the High Court of Judicature at Allahabad, Lucknow Bench dismissing the writ petitions [W.P.No.6690 of 1996 (S/S) and batch] dated 14.09.2009, whereby the High Court upheld the award passed by the Industrial Tribunal and directed the appellant-university to consider the respondents for regularisation of their services as and when the vacancies arise and till that time they be paid the emoluments, which are being paid by university authorities to similarly situated workmen against the unsanctioned posts.

2. Before we advert to the contentious points, it would be appropriate to highlight the factual background of the case. In the year 1989, the Finance Officer of the University of Lucknow, Mr.R.S.Vishvakarma engaged the respondents in this batch of appeals as Routine Grade Clerk (RGC)/Peon by oral engagement as daily wagers for the Central Accounts Office and they were being paid from out of the contingency fund. In order to prevent the abuse of power in engaging daily wagers, the then Vice-Chancellor of the Lucknow University issued Order No.VC/1932/90 dated 03.08.1990 notifying that the daily wagers would not be allowed to continue in any case after 31.12.1990 unless prior written approval was obtained from the Vice-Chancellor. It was further directed that if there was any need of any extra hand, the Section Heads must send a demand for creation of posts to the Deputy Registrar (Admn.) with details justifying the need so that a consolidated statement for sanction of new posts in the university be sent to the State Government. As per the appellant-university, the Finance Officer neither dispensed with the respondents/daily wagers nor did he obtain written approval from the Vice-Chancellor. The engagement of the respondents came to an end with effect from 01.01.1991.

3. The terminated workers sent a legal notice on 28.01.1992 through Mazdoor Sabha to the Vice-Chancellor stating that they served the university till 31.12.1990 continuously and that they were terminated without assigning any reason and put forth the demand for reinstatement in service and back wages. All the ex-daily wagers further filed individual applications to the Deputy Labour Commissioner, Lucknow for conciliation of the dispute raised by them in February 1992. As no conciliation could be achieved, on the recommendation of the Conciliation Officer, the Deputy Labour Commissioner by his order dated 18.08.1992 referred all the cases to the Labour Court, Lucknow for adjudication of the dispute between respondents and the appellant-university. The Presiding Officer, Labour Court vide order dated 30.01.1996 held that termination of the workmen from 01.01.1991 by the university is illegal and directed the reinstatement of respondent No.1 with full back wages. Being aggrieved, the appellant-university filed a Writ Petition before the High Court challenging the award. The High Court disposed of the writ petition and connected petitions vide a common order dated 14.09.2009 affirming the award passed by the Labour Court and inter alia issued direction as aforesaid. The university has filed this batch of appeals assailing the order passed by the High Court.

4. Learned counsel for the appellants contended that merely because a casual wage worker or a temporary employee worked continuously for more than 240 days in a year, he would not be entitled to be absorbed in regular service or made permanent on the strength of such continuance, if the original appointment was made without following the due process of selection as envisaged by the rules. It was submitted the respondents were not engaged as against any sanctioned post and the impugned judgment of the High Court directing regularisation is violative of the principles laid down by this Court in Secretary, State of Karnataka and Others vs. Umadevi (3) and Others, (2006) 4 SCC 1.

5. Per contra, learned Senior Counsel Ms. Shobha Dikshit for the respondents submitted that the services of the respondents were terminated without giving any notice or retrenchment compensation and is contravention of Section 6-N of the U.P. Industrial Disputes Act, 1947. It was argued that the respondents were out of employment since 1991 and they are finding it difficult to survive along with their families with the meagre amount of Rs.650/- awarded to them under Section 17B of the Industrial Disputes Act, 1947. It was further submitted that the respondents’ juniors were retained and continued in service and subsequently, even new hands have been engaged and while so, the respondents were discriminated and the courts below rightly directed their regularisation.

6. We have given our thoughtful consideration to the rival contentions of both the parties and perused the impugned judgment and material on record.

7. Lucknow University is a statutory body and is governed by the U.P. State Universities Act, 1973. The Vice-Chancellor is the Principal Executive and exercises general supervision and control over all its affairs including appointments of non-teaching staff. The Registrar of the University is the administrative head who issues orders of appointment duly made and approved by the Vice-Chancellor. The appointments are to be made by the university against the sanctioned posts created by the Government and the Government determines the pay scale and allowances of the employees. The Finance Officer by himself had no right to appoint any person and university has not created extra post of Routine Grade Clerk or Record Boy or Peon. In the present case, the Finance Officer in the university engaged the respondents as daily wagers for his Central Accounts Section. Admittedly, the respondents were not engaged by following due procedure and their engagement was not against any sanctioned posts. In order to curb the illegal practice of engaging daily wagers, Vice-Chancellor of the University issued an order dated 03.08.1990 clarifying that the daily wagers will not be allowed to continue after 31.12.1990 until prior written approval is accorded by the Vice-Chancellor. No such approval was taken qua the respondents for their continuance. The respondents were terminated w.e.f. 01.01.1991. When the respondents’ appointments were illegal, the respondents would not be entitled to any right to be regularized or absorbed.

8. As noticed earlier, there is no appointment letter issued to the respondents by the Registrar on which they were engaged. The respondents have based their claim on service certificate issued by Mr. R.L. Shukla, the then Finance Officer of the University of Lucknow. Mr. R.L. Shukla in his evidence has stated that the daily wagers were engaged by the then Finance Officer, Mr. R.S. Vishvakarma as daily wage employees in the accounts section as per their need and they were terminated when their services were not required. He further stated that no particular nature of work was assigned to the respondents in the accounts section and the respondents were being paid out of “recurring expenditure item”. So far as the certificate issued to the respondents, Mr. Shukla has stated that those certificates issued to the respondents-workmen only to enable them to seek other job.

9. Learned Senior Counsel for the respondents has submitted that after removal of the respondents, similarly placed employees have been regularized and drawn our attention to regularisation of one such Narendra Pratap Singh. Evidence of Mr. Brij Pal Das Mehrotra, former Registrar of the University would show that the persons who are regularized are only those who were appointed by following due procedure. The said Narendra Pratap Singh was also appointed by following due procedure. As seen from Annexure (P-5) filed with rejoinder affidavit, the said Narendra Pratap Singh was appointed by the Registrar of the University as Routine Grade Clerk (RGC) on daily wage basis, the respondents were not so appointed by the Registrar of the university. The respondents have admittedly not produced any document to show that they were appointed by the university against sanctioned posts in accordance with statutory rules. If the original appointment was not made following due process of selection as envisaged by the relevant rules, the respondents cannot seek regularisation. The Labour Court and the High Court, in our view, fell in error in directing the regularisation of the respondents.

10. In the rejoinder-affidavit filed by the appellant-university, it is stated that the university has requested the State Government for sanction of 755 posts in various categories in order to regularise the persons working in the various departments of the university. The State Government sanctioned only 330 posts in various categories, as a result of which regularisation/samayojan of 330 persons were made strictly on the basis of their seniority. A bare perusal of letter No.26/C.S./70-4-99-3(27)/99 dated 29.09.1999 by Special Executive Officer, Government of U.P. regarding absorption of non-teaching posts in the Lucknow University, it is clearly mentioned that if there is any disruption in the service of any employee, then the services of the prior period from the said disruption may not be calculated. A perusal of minutes of the Sub-Committee constituted by the Executive Committee held on 16.01.2001, it is clear that employees who were continuously working in the university were only regularised. The respondents have been out of employment from 01.01.1991 and at the time of regularisation/Samyojan, the respondents were not in service and, therefore, they cannot seek parity with the persons absorbed.

11. In Umadevi’s case, this Court settled the principle that no casual workers should be regularised by the Courts or the State Government and as per constitutional provisions all the citizens of this country have right to contest for the employment and temporary or casual workers have no right to seek for regularization. In para (47), this Court held as under:
“47. When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognised by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post.”

12. In para (53) of Umadevi’s case, the Constitution Bench carved out an exception to the general principles enumerated above and it reads as under:
“53. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa (1967) 1 SCR 128, R.N. Nanjundappa (1972) 1 SCC 409 and B.N. Nagarajan (1979) 4 SCC 507 and referred to in para 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularisation of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularisation, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further bypassing of the constitutional requirement and regularising or making permanent, those not duly appointed as per the constitutional scheme.”

13. As the respondents worked as casual workers only for about one and half years and not against any sanctioned posts, be it noted that even the benefit of para (53) of Umadevi’s case cannot be extended to the respondents.
14. In Satya Prakash & Others vs. State of Bihar & Others (2010) 4 SCC 179, this Court held as under:
“7. We are of the view that the appellants are not entitled to get the benefit of regularisation of their services since they were never appointed in any sanctioned posts. The appellants were only engaged on daily wages in the Bihar Intermediate Education Council.
8. In Umadevi (3) case (2006) 4 SCC 1, this Court held that the courts are not expected to issue any direction for absorption/regularisation or permanent continuance of temporary, contractual, casual, daily wage or ad hoc employees. This Court held that such directions issued could not be said to be inconsistent with the constitutional scheme of public employment. This Court held that merely because a temporary employee or a casual wage worker is continued for a time beyond the term of his appointment, he would not be entitled to be absorbed in regular service or made permanent, merely on the strength of such continuance, if the original appointment was not made by following a due process of selection as envisaged by the relevant rules. In view of the law laid down by this Court, the directions sought for by the appellants cannot be granted.” (Underlining added)

15. The respondents were merely casual workers and they do not have any vested right to be regularised against the posts. The High Court fell in error in affirming the award passed by the Labour Court directing regularisation. In the facts and circumstances of the case, as the respondents were out of employment for more than twenty years and now they are over aged and cannot seek for regular appointment, in our view, the interest of justice will be sub-served if the judgment of the High Court is modified to the extent by directing payment of monetary compensation for the damages to the respondents.

16. In considering the violation of Section 25F of the Industrial Disputes Act, 1947 in Incharge Officer & Anr. vs. Shankar Shetty (2010) 9 SCC 126 and after referring to the various decisions, this Court held that the relief by way of back wages is not automatic and compensation instead of reinstatement has been held to meet the ends of justice and it reads as under:-
“2. Should an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of Section 25-F of the Industrial Disputes Act, 1947 (for short “the ID Act”)? The course of the decisions of this Court in recent years has been uniform on the above question.
3. In Jagbir Singh v. Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327, delivering the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the recent decisions of this Court, namely, U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC 479, Uttaranchal Forest Development Corpn. v. M.C. Joshi, (2007) 9 SCC 353, State of M.P. v. Lalit Kumar Verma (2007) 1 SCC 575, M.P. Admn. v. Tribhuban (2007) 9 SCC 748, Sita Ram v. Moti Lal Nehru Farmers Training Institute (2008) 5 SCC 75, Jaipur Development Authority v. Ramsahai (2006) 11 SCC 684, GDA v. Ashok Kumar (2008) 4 SCC 261 and Mahboob Deepak v. Nagar Panchayat, Gajraula (2008) 1 SCC 575 and stated as follows: (Jagbir Singh case (2009) 15 SCC 327, SCC pp. 330 & 335, paras 7 & 14)
“7. It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice. ***
14. It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee.”
4. Jagbir Singh (2009) 15 SCC 327 has been applied very recently in Telegraph Deptt. v. Santosh Kumar Seal (2010) 6 SCC 773, wherein this Court stated: (SCC p. 777, para 11)
“11. In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would sub-serve the ends of justice.”

17. In the light of the above discussion, the impugned judgment of the High Court is modified and keeping in view the fact that the respondents are facing hardship on account of pending litigation for more than two decades and the fact that some of the respondents are over aged and thus have lost the opportunity to get a job elsewhere, interest of justice would be met by directing the appellant-university to pay compensation of rupees four lakhs to each of the

respondents. By order dated 11.07.2011, this Court directed the appellant to comply with the requirements of Section 17B of the Industrial Disputes Act, 1947 and it is stated that the same is being complied with. The appellant-university is directed to pay the respondents rupees four lakhs each within four months from the date of receipt of this judgment. The payment of rupees four lakhs shall be in addition to wages paid under Section 17B of the Industrial Disputes Act, 1947.

18. In the result, the impugned judgment is modified and these appeals are partly allowed in the above terms. No order as to costs.

………………………DIPAK MISRA, J.

…………………

(2015) 119 (3) CWN (SC) 120

IN THE SUPREME COURT OF INDIA

(BEFORE MADAN B. LOKUR AND R.K. AGRAWAL, JJ.)

Jagdish Lal Gambhir ....Appellant
Vs.
Punjab National Bank & Ors. …Respondents

Civil Appeal No. 6975 of 2009; Civil Appellate Jurisdiction; Judgment on: 06.10.2015

Constitution of India, Article 226 – Service Law – Appellant was working as Asst. General Manager in Hindustan Commercial Bank Limited (HCBL) – subsequently it was amalgamated with the Punjab National Bank (PNB) – domestic enquiry was initiated by the HCBL for irregularities in advancing loans to the customers – no final decision was taken by the HCBL till its amalgamation with PNB – after Amalgamation PNB initiated further enquiry against the appellant by issuing fresh charge-sheet – enquiry report was against the appellant – writ was preferred by the appellant for challenging the enquiry proceedings – during the pendency of writ, the appellant was dismissed from service – Single Judge and Division Bench dismissed the writ on the ground that enquiry proceedings was proper – large number of transactions were irregular and in which appellant was said to be involved - after amalgamation, appellant became an employee of the PNB and subject to its rules and regulations, including those pertaining to misconduct - amalgamated company also have right to proceed with the domestic enquiry against the misconduct alleged to have made by the transferor-employee.

Ratio decidendi:-
After amalgamation, appellant became an employee of the PNB and subject to its rules and regulations, including those pertaining to misconduct. The amalgamated company also have right to proceed with the domestic enquiry against the misconduct alleged to have made by the transferor-employee.

Observations of the Court:-
“The transferee bank shall, on the expiry of a period not longer than three years from the date on which this scheme is sanctioned, pay or grant to the employees of the transferor bank the same remuneration and the same terms and conditions of service as are applicable to the employees of corresponding rank or status of the transferee bank subject to the qualifications and experience of the said employees of the transferor bank being the same as or equivalent to those of such other employees of the transferee bank.”(para 23)
The rules applicable to Appellant were the Punjab National Bank Officer Employees (Discipline and Appeal) Regulations, 1977. In terms of these Regulations, as discussed by the High Court, the disciplinary authority of Appellant was the Assistant General Manager (P). That being the position, merely because Appellant was an Assistant General Manager in the Hindustan Commercial Bank does not mean that the Regulations of 1977 would not be applicable to him or that the Assistant General Manager (P) in thePNB could not have issued a charge-sheet to Appellant.(para 25)
In Chairman, Canara Bank, Bangalore v. M.S. Jasra, (1992) 2 SCC 484 an employee of the Lakshmi Commercial Bank (which had amalgamated with Canara Bank at the same time when Hindustan Commercial Bank amalgamated with the PNB) the contention of the employee was that the age of retirement (60 years) in Lakshmi Commercial Bank could not be varied to his disadvantage (58 years) on the amalgamation of that Bank with the Canara Bank. This contention was rejected by holding that the employee became an employee of the Canara Bank and was, therefore, entitled to the rights given to employees of the Canara Bank.(para 26)
Applying this principle to the facts of this case, it is clear that Appellant became an employee of the PNB and was subject to the discipline of all its rules and regulations, including those pertaining to misconduct.(para 27)

Held:-
It is the admitted position that in respect of one alleged irregular transaction, the Hindustan Commercial Bank could not take any decision one way or the other due to the amalgamation of that Bank with the PNB. We have not found any duplication in the allegations and are not inclined to carry out any investigation in this regard at this stage. In view of the above, we find no reason to interfere with both the judgments delivered by the Calcutta High Court. The appeal is dismissed.

List of cases cited:-
K.I. Shephard Vs. Union of India, (1987) 4 SCC 431 (relied on)
Union of India Vs. Mohd. Ramzan Khan, (1991) 1 SCC 588 (relied on)
Managing Director, ECIL Vs. B. Karunakar, (1993) 4 SCC 727 (relied on)
Chairman, Canara Bank, Bangalore Vs. M.S. Jasra, (1992) 2 SCC 484 (referred to)

The Judgement of the Court was delivered by Madan B. Lokur, J.:-

1. This appeal is directed against the judgment and order dated 24th July, 2006 passed by the Division Bench of the High Court at Calcutta in FMA No.388 of 2001.

2. The issue for consideration is whether the termination of the services of the appellant Gambhir was in any manner vitiated. In our opinion, the question requires to be answered in the negative and we uphold the judgment and order of the Division Bench confirming the dismissal of the writ petition filed by Gambhir.

3. Gambhir was working as an Assistant General Manager in the Hindustan Commercial Bank Limited. This bank was amalgamated with the Punjab National Bank on 19th December, 1986. On amalgamation, the services of 28 or 29 officials of the Hindustan Commercial Bank including Gambhir were not taken over by the Punjab National Bank (for short the ‘PNB’). It may be stated that two other banks were similarly amalgamated with the Canara Bank and the State Bank of India, but we are not concerned with them.

4. Several officers whose services were not taken over by the
PNB and other banks filed a writ petition in this Court under Article 32 of the Constitution challenging the failure of the transferee banks in not taking over their services. This Court decided the writ petition and the decision is reported as K.I. Shephard v. Union of India, (1987) 4 SCC 431. It was held by this Court that the transferee banks could not refuse to take over the services of the officials of the transferor banks. Consequently, the PNB was obliged to take over the officials of the Hindustan Commercial Bank including Gambhir. It was also directed if there was any necessity of initiating disciplinary proceedings against any of the transferred employees, the transferee banks including PNB were at liberty to do so.

5. As far as Gambhir is concerned, while he was working with the Hindustan Commercial Bank, he was issued a charge-sheet on 3rd February, 1983 alleging irregularities in sanctioning of loans to the customers of the bank and a failure to take follow up steps. Gambhir replied to the charge-sheet and was thereafter administered a ‘caution’ and was asked to be more discreet in respect of granting advances and management of credit portfolio. Thereafter in 1986 another set of allegations were made against Gambhir but no final decision was taken by the Hindustan Commercial Bank until its amalgamation with the PNB.

6. In view of the above, the PNB issued a charge-sheet to Gambhir on 28th November, 1987 in which it was alleged that he had deliberately flouted the bank lending norms and accommodated some parties unauthorisedly thereby putting huge funds of the bank at stake.

7. Feeling aggrieved by the initiation of departmental proceedings against him, Gambhir preferred W.P. (C) No. 121 of 1988 in this Court under Article 32 of the Constitution. By an order dated 22nd April, 1988 this Court declined to entertain the writ petition but expressed the view that the inquiry against Gambhir should be completed quickly. Thereafter, the inquiry was conducted and by a report dated 22nd September, 1988 the Inquiry Officer held that the charges against Gambhir were proved and that he had failed to discharge his duties with utmost integrity, honest devotion and diligence thereby putting huge funds of the bank at stake.

8. In the meanwhile, Gambhir preferred a writ petition in the
Calcutta High Court being C.M.No.11992 (W) of 1988 challenging the charge-sheet issued to him and the inquiry proceedings.

9. It appears that during the pendency of the writ petition Gambhir was dismissed from service with effect from 2nd August, 1989.

10. Be that as it may the writ petition was dismissed by the learned Single Judge by judgment and order dated 7th December, 2000.

11. Before the learned Single Judge, Gambhir raised three contentions. It was firstly contended that the charge-sheet was issued to him by an officer of the same rank, that is, an Assistant General Manager and this was not permissible in law. Therefore, since the issuance of the charge-sheet was itself vitiated the entire departmental proceedings against him were null and void. The learned Single Judge rejected this contention by referring to Clause 12 of the scheme of amalgamation whereby the PNB was entitled to classify and categorize the employees of the Hindustan Commercial Bank whose services were being taken over. As far as Gambhir is concerned, even though he may have been anAssistant General Manager in the Hindustan Commercial Bank, he was placed as a Scale-III officer in the PNB. This is anadmitted position and Gambhir did not make any grievance about this at any stage. The charge-sheet was no doubt issued by an Assistant General Manager of the PNB but he was placed higher than a Scale-III officer in the hierarchy and under the Punjab National Bank Officer Employees (Discipline and Appeal Regulations), 1977 the Assistant General Manager was the disciplinary authority for officers placed in Scale-III.

12. The second contention urged by Gambhir was that the allegations against him were already the subject matter of an inquiry by the Hindustan Commercial Bank and thus could not be reopened by the PNB merely because of a change of employer. This contention was also rejected by the learned Single Judge holding that what was sought from Gambhir by the Hindustan Commercial Bank was an explanation with regard to certain transactions which indicated an irregular conduct on his part. However, no formal disciplinary proceedings had been initiated against Gambhir and that did not preclude the PNB from looking into those alleged irregularities and holding a formal inquiry into them.

13. The third contention urged by Gambhir before the learned Single Judge was that Inquiry Report was not supplied to him before his dismissal with effect from 2nd August, 1989. This contention was rejected by the learned Single Judge by holding that the requirement of supplying the Inquiry Report arose out of a decision of this Court in Union of India v. Mohd. Ramzan Khan, (1991) 1 SCC 588. However that decision was rendered by this Court (on 20th November, 1990) after Gambhir was dismissed from his service. That decision had only prospective effect. Subsequently, the Constitution Bench in Managing Director, ECIL v. B. Karunakar, (1993) 4 SCC 727 made it clear that orders of punishment passed prior to the decision in Mohd. Ramzan Khan without furnishing the report of the Inquiry Officer should not be disturbed. Therefore, Gambhir had no right to a copy of the Inquiry Report prior to his dismissal.

14. At this stage it may be mentioned that Gambhir has not challenged the merits of the inquiry at any stage or the punishment awarded to him. In that sense Gambhir was not prejudiced by the failure to supply him with a copy of the Inquiry Report.

15. Feeling aggrieved by the decision rendered by the learned Single Judge, Gambhir preferred an appeal before the Division Bench but that was dismissed by the impugned judgment and order dated 24th July, 2006.

16. Before the Division Bench Gambhir raised five contentions.
These were noted by the Division Bench as follows:-
“(i) Gambhir was entitled to be appointed in terms of the order of the Apex Court in K.I. Shephard (supra). He was to be fitted in the appropriate post which he was holding earlier which was not done.
(ii)The disciplinary authority who issued the charge-sheet was nor properly authorized to act as such under the service rules.
(iii) No copy of the inquiry report was given to him. As a result he could not defend himself in the proceeding by offering his explanation to the disciplinary authority pointing out the illegality and irregularity crept in the enquiry report.
(iv) No second show cause notice was issued to him.
(v) The charges were stale and could not be proceeded with.”

17. As far as the first contention is concerned it has already been mentioned that Gambhir was posted as a Scale–III officer in the PNB upon the amalgamation of the Hindustan Commercial Bank with the PNB. No grievance was made by Gambhir at any point of time regarding his placement. The Division Bench therefore rejected his contention and held that he was appropriately placed in the PNB as a Scale-III officer. The Division Bench held that that apart since the Hindustan Commercial Bank was a much smaller bank than the PNB, Gambhir’s designation as an Assistant General Manager in the Hindustan Commercial Bank could not be equated with the corresponding designation in the PNB. In any event, there was no loss of pay as far as Gambhir was concerned.

18. The second contention urged by Gambhir was also rejected by the Division Bench relying principally upon the decision of the learned Single Judge. Additionally, it was held that when Gambhir preferred W.P.(C) No. 121 of 1988 in this Court, it was observed that the inquiry against Gambhir should be expedited. The Division Bench was of the view that this was an indication that this Court did not find any procedural irregularity in the issuance of the charge-sheet against Gambhir.

19. The third contention urged by Gambhir was rejected in view of the decisions rendered in Mohd.Ramzan Khan and Karunakar. Additionally, it was noted that Gambhir had been supplied with a copy of the Inquiry Report but had not raised any issue on the merits of the allegations made against him and the findings arrived at by the Inquiry Officer.

20. The fourth contention was also rejected by the Division Bench on the ground that there was no requirement of issuing a second show cause notice to Gambhir.

21. The last contention urged by Gambhir was also rejected since the PNB was entitled to look into any final irregularity committed by the employees of the Hindustan Commercial Bank whose services were taken over by the PNB. On this basis, the Division Bench dismissed Gambhir’s appeal by the impugned judgment and order dated 24th July, 2006. It is under these circumstances that Gambhir is now before us.

22. The contentions urged by learned counsel for Gambhir are merely repetitions of the contentions urged either before the learned Single Judge or before the Division Bench of the High Court.

23. As far as the principal ground urged by learned counsel that the charge-sheet could not have been issued to Gambhir by the Assistant General Manager in the PNB is concerned, we find no merit in the contention. The admitted position is that Gambhir was a Scale-III officer in the PNB while the rank of the Assistant General Manager in the PNB is Scale-V. Gambhir could only have been placed in Scale–III in terms of his responsibilities and keeping in mind the corresponding scale upon the amalgamation of the Hindustan Commercial Bank with the PNB. Clause 12 of the scheme of amalgamation as sanctioned by the Government of India clearly states as follows:-
“The transferee bank shall, on the expiry of a period not longer than three years from the date on which this scheme is sanctioned, pay or grant to the employees of the transferor bank the same remuneration and the same terms and conditions of service as are applicable to the employees of corresponding rank or status of the transferee bank subject to the qualifications and experience of the said employees of the transferor bank being the same as or equivalent to those of such other employees of the transferee bank.”

24. There is no allegation by Gambhir at any point of time that he was either reduced in rank or that his placement was incorrect or any similar grievance. That being the position, it is now too late in the day for Gambhir to contend that his placement in the PNB was erroneous and therefore the issuance of the charge-sheet by the Assistant General Manager in the PNB was vitiated in any manner.

25. We are in agreement with the view of the High Court that the rules applicable to Gambhir were the Punjab National Bank Officer Employees (Discipline and Appeal) Regulations, 1977. In terms of these Regulations, as discussed by the High Court, the disciplinary authority of Gambhir was the Assistant General Manager (P). That being the position, merely because Gambhir was an Assistant General Manager in the Hindustan Commercial Bank does not mean that the Regulations of 1977 would not be applicable to him or that the Assistant General Manager (P) in thePNB could not have issued a charge-sheet to Gambhir.

26. At this stage, it may be mentioned that in Chairman, Canara Bank, Bangalore v. M.S. Jasra, (1992) 2 SCC 484 an employee of the Lakshmi Commercial Bank (which had amalgamated with Canara Bank at the same time when Hindustan Commercial Bank amalgamated with the PNB) the contention of the employee was that the age of retirement (60 years) in Lakshmi Commercial Bank could not be varied to his disadvantage (58 years) on the amalgamation of that Bank with the Canara Bank. This contention was rejected by holding that the employee became an employee of the Canara Bank and was, therefore, entitled to the rights given to employees of the Canara Bank.

27. Applying this principle to the facts of this case, it is clear that Gambhir became an employee of the PNB and was subject to the discipline of all its rules and regulations, including those pertaining to misconduct.

28. It is also contended that the allegations against Gambhir had already been inquired into by the Hindustan Commercial
Bank and therefore the PNB could not reopen issues relating to the alleged misconduct and hold an inquiry into them. We do not find any merit in this submission also. There were a large number of transactions which were alleged to be irregular and in which Gambhir was said to be involved. It is possible that there may have been an overlap in respect of some of them (although no such overlap has been shown to us) but that is not an indication that the alleged irregularities committed by Gambhir in respect of other transactions were condoned. In fact, Gambhir has not pointed out which were the transactions which were the subject matter of concern in the Hindustan Commercial Bank and which were the transactions which were the subject matter of inquiry by the PNB. This would have certainly given us a far clearer picture. However, on a random consideration of the allegations made, it does appear that there were certain transactions particularly the transactions pertaining to R.K. Tandon & Co. which were not inquired into by the Hindustan Commercial Bank. It may be recalled that it is the admitted position that in respect of one alleged irregular transaction, the Hindustan Commercial Bank could not take any decision one way or the other due to the amalgamation of that Bank with the PNB. We have not found any duplication in the allegations and are not inclined to carry out any investigation in this regard at this stage.

29. In view of the above, we find no reason to interfere with both the judgments delivered by the Calcutta High Court. The appeal is dismissed.

…………………………..R.K. Agrawal, J.

……………………

(2015) 119 (3) CWN (SC) 131

IN THE SUPREME COURT OF INDIA

(BEFORE M. Y. EQBAL AND C. NAGAPPAN, JJ.)

Dulu Devi .....Appellant
Vs.
State of Assam and Others ....Respondents

Civil Appeal No.8249 of 2015; Arising out of SLP(C) No.19947 of 2010; Civil Appellate Jurisdiction; Judgment on: 09.10.2015

Constitution of India, Article 226; Equitable Relief - Appellant was rendering continuous service for more than 10 years as an Assistant Teacher without salary – High Court disposed of the writ petition with a direction to release salary to the appellant and to make an enquiry for her entitlement to regularise service – arrears of salary was paid – subsequently upon enquiries Inspector of Schools published a list of 193 teachers whose services were required to be terminated for irregular appointments - name of appellant was appearing being serial no. 168, as she was under age at the time of her appointment – appellant filed writ petition which was dismissed by the High Court – appellant was continuing her service since 1989 - appellant had never been terminated from her service – mere passing of an order of dismissal or termination could not be effective unless it is published or communicated to the concerned officer – where the services are terminated, the status of the delinquent as a government servant comes to an end and nothing further remains to be done in the matter - but if the order is passed and merely kept in the file, it would not be treated to be an order terminating services.

Ratio decidendi:-
Where the services are terminated, the status of the delinquent as a government servant comes to an end and nothing further remains to be done in the matter. But if the order is passed and merely kept in the file, it would not be treated to be an order terminating services.

Observations of the Court:-
Indisputably, the appellant has been continuously serving as a teacher since 1989 and pursuant to the order passed in the earlier writ petition the appellant was paid entire salary since the date when the salary was not paid. The High Court took notice of the fact that while considering the regularization of services of the appellant, she being the senior most teacher of the school was allowed to cross the Efficiency Bar two times, initially in the year 2003 and subsequently in the year 2005. The High Court in the impugned order further noted that the letter of termination was neither issued nor the services of the appellant were terminated.(para 14)
In our considered opinion, the approach of the High Court is not in accordance with law. The services of a teacher who has been working for the last 25 years shall not be assumed to have been terminated and deprived of from her legitimate claim.(para 15)
State of Punjab vs. Amar Singh Harika, AIR 1966 SC page 1313, held that mere passing of an order of dismissal or termination would not be effective unless it is published and communicated to the officer concerned. If the appointing authority passes an order of dismissal, but does not communicate it to the officer concerned, theoretically it is possible that unlike in the case on a judicial order pronounced in Court, the authority may change its mind and decide to modify its order. The order of dismissal passed by the appropriate authority and kept with itself, cannot be said to take effect unless the officer concerned knows about the said order and it is otherwise communicated to all the parties concerned.(para 16)
Similar view has been taken by this Court in the case of Union of India vs. Dinanath Shantaram Karekar, (1998) 7 SCC 569, where this Court observed:
“9. Where the services are terminated, the status of the delinquent as a government servant comes to an end and nothing further remains to be done in the matter. But if the order is passed and merely kept in the file, it would not be treated to be an order terminating services nor shall the said order be deemed to have been communicated.”(para 17)
Held:-
In the background of the facts of this case, particularly, the continued service of the appellant for the last 25 years, the impugned order passed by the High Court cannot be sustained in law.

List of cases cited:-
State of Punjab Vs. Amar Singh Harika, AIR 1966 SC page 1313 (relied on)
Union of India Vs. Dinanath Shantaram Karekar, (1998) 7 SCC 569 (followed)

The Judgment of the Court was delivered by M.Y. Eqbal J.:-

1. Leave granted.

2. The appellant has preferred this appeal by special leave against the impugned order dated 06.04.2010 passed by the Gauhati High Court in Writ Petition (Civil) No.2560 of 2007, filed by the appellant seeking a direction to the respondents to allow her to continue in service as Headmistress in charge of the Dhemaji Rastrabhasha Hindi Lower Primary School; for regularisation of her service and for payment of regular salary to her for the service being rendered. The High Court dismissed the said writ petition.

3. The facts of the case which reveals from the list of dates furnished by the appellant and have not been disputed by the respondents are as under.

4. The appellant was first appointed as an Assistant Teacher in Assamese subject in the Dhemaji Hindi Lower Primary School in 1976. By order dated 19.12.1989 of the Deputy Inspector of Schools, Dhemaji, appellant was finally appointed as an Assistant Teacher as against the substantive vacancy in the said school. Even though the appellant was rendering continuous service as Assistant Teacher for more than 10 years, she was not paid her salary. Aggrieved by the same, she filed a writ petition being W.P.(C) No.833 of 1999. Thereafter, the respondents-Authority directed the Deputy Inspector of Schools, Dhemaji to enquire into non-payment of salary and furnish a report. On submission of such report, the Additional Secretary, Education Department by order dated 03.05.2000, directed the Deputy Inspector of School, Dhemaji, to release the salary of the appellant for the period she rendered her services. Thereafter, by order dated 12.09.2000, the High Court disposed of the said writ petition with a direction to the respondents to release the salary of the appellant not only from the current month but also for the period she actually rendered her services as a Teacher and to make an enquiry as to the appellant's entitlement for regularisation of her services and pass necessary orders. It is stated that the respondents have not filed any appeal against the said order and, therefore, the findings and directions as aforestated has since attained finality.

5. In view of the directions given by the High Court vide its order dated 12.09.2000 passed in W.P.(C) No.833 of 1999, the appellant was paid all arrears of her salary and other allowances till August, 2007.

6. In the year 2005, the appellant had been given charge of the Head Mistress. On the date of crossing the “Efficiency Bar”, she was also given the next increment by order dated 05.03.2005.

7. It is pertinent to note that in connection with another writ petition being W.P.(C) No.4468/2006, the Deputy Inspector of Schools, Dehmaji, submitted a report on 03.11.2006 enclosing therewith a list of 193 teachers who had been appointed in 1989 but were subsequently terminated, still drawing their salaries. In the said list of 193 candidates, the name of the appellant was shown at Serial No.168. The Deputy Inspector of Schools, Dhemaji, vide his letter dated 09.11.2006, informed the Director, Elementary Education, Assam, that the said report was prepared without going through the official records and relevant files and the same was not wholly correct. Consequently, the respondents-authority by order dated 09.02.2007, stopped the salary of 193 teachers including the appellant. Aggrieved by the same, the appellant filed the writ petition being W.P. No.2560 of 2007 which was dismissed by the High Court. In the said writ petition, it was categorically averred that the appellant had never been terminated from her service and no order of termination had ever been served upon her.

8. It is also evident from the report dated 25.02.2008 of the Deputy Inspector of School, Dhemaji that the appellant was never terminated from her services and her name was not included in the list of 752 teachers who were terminated in the year 1992 as per letter dated 12.05.1992 of the Director, Elementary Education, Assam. Thereafter, the appellant also filed a Miscellaneous Case No.2049 of 2008 inter alia praying that the respondents be directed to release her salary till the disposal of the pending writ petition. Learned counsel appearing for the respondents-authority on instruction, informed the High Court that the appellant was still continuing in her service. Accordingly, the High Court vide its order dated 02.02.2009 directed the respondents to pay the salary to the appellant. Thereafter, the Director of Elementary Education, Assam, vide his letter dated 11.02.2010 directed the District Elementary Education Officer, Dhemaji, to submit a clear report as to whether the name of the appellant was enlisted in the lists of terminated teachers. In response thereof, the District Elementary Education Officer, Dhemaji, submitted a report that the name of the appellant appeared in the list of 193 teachers which was sent on 03.11.2006 to the Director, Elementary Education, Assam and the said report was prepared without going through the relevant records and files.

9. We have heard learned counsel appearing for the parties and perused the record.

10. Learned counsel appearing for the appellant submits that the appellant had never been terminated from her service and that no order of termination had ever been served upon her. He further submits that without going through the relevant records and files, the respondents-Authority prepared a list of 193 teachers and included the name of the appellant for terminating their services. Indisputably, the appellant has been paid salary by the respondents-Authority for at least 25 years without serving any termination letter upon her.

11. Learned counsel appearing for the respondents contends that appointment of the appellant is itself illegal on the ground that she was under age at the time of her appointment. He further contends that as the appellant was appointed in a non-existent post, she did not get her salary till July, 2000.

12. Learned counsel appearing for the respondents submits that the respondents-Authority terminated the services of illegally appointed teachers including the appellant but they were continuing in service and drawing their salary till July, 2007. However, their salary was stopped with effect from August, 2007. Thus, the appellant's salary was also stopped as she was appointed illegally and her service was terminated in 1992. He further submits that the High Court has rightly held that if the service of the appellant stood terminated in the year 1992 then she has no legal right to claim salary, regularisation and promotion of service as the relevant materials were not produced before it when the earlier order was passed by the High Court directing the respondents to release salary and allowances to the appellant and also to make enquiry with regard to the claim of the appellant for regularisation.

13. We bestow our anxious consideration to the rival submissions made by learned counsel appearing for the parties and find substance in the submission made by learned counsel appearing for the appellant.

14. Indisputably, the appellant has been continuously serving as a teacher since 1989 and pursuant to the order passed in the earlier writ petition the appellant was paid entire salary since the date when the salary was not paid. The High Court took notice of the fact that while considering the regularization of services of the appellant, she being the senior most teacher of the school was allowed to cross the Efficiency Bar two times, initially in the year 2003 and subsequently in the year 2005. The High Court in the impugned order further noted that the letter of termination was neither issued nor the services of the appellant were terminated. Admittedly, some of the terminated teachers filed their writ petition challenging the termination, which was interfered with by the High Court, but the Court observed that the said benefit cannot be granted to the appellant as she was not a party in the said writ petition. The High Court, assuming that the services of the appellant were terminated, refused to grant relief and dismissed the writ petition.

15. In our considered opinion, the approach of the High Court is not in accordance with law. The services of a teacher who has been working for the last 25 years shall not be assumed to have been terminated and deprived of from her legitimate claim.

16. The Constitution Bench Judgment of this Court in the case of State of Punjab vs. Amar Singh Harika, AIR 1966 SC page 1313, considered this aspect of the matter. Writing the judgment, His Lordship (Gajendragadkar, C.J.) held that mere passing of an order of dismissal or termination wouldnot be effective unless it is published and communicated to the officer concerned. If the appointing authority passes an order of dismissal, but does not communicate it to the officer concerned, theoretically it is possible that unlike in the case on a judicial order pronounced in Court, theauthority may change its mind and decide to modify its order. The order of dismissal passed by the appropriate authority and kept with itself, cannot be said to take effect unless the officer concerned knows about the said order and it is otherwise communicated to all the parties concerned. If it is held that mere passing of order of dismissal has the effect of terminating the services of the officer concerned, various complications may arise.

17. Similar view has been taken by this Court in the case of Union of India vs. Dinanath Shantaram Karekar, (1998) 7 SCC 569, where this Court observed:
“9. Where the services are terminated, the status of the delinquent as a government servant comes to an end and nothing further remains to be done in the matter. But if the order is passed and merely kept in the file, it would not be treated to be an order terminating services nor shall the said order be deemed to have been communicated.”

18. In the background of the facts of this case, particularly, the continued service of the appellant for the last 25 years, the impugned order passed by the High Court cannot be sustained in law.

19. For the aforesaid reason, this appeal is allowed and the impugned order is set aside. Consequently, the appellant shall

be entitled to continue in service and further entitled to all arrears of salary in accordance with law.

…...................C. NAGAPPAN, J.

…………………….

(2015) 119 (3) CWN (SC) 140

IN THE SUPREME COURT OF INDIA

(BEFORE VIKRAMAJIT SEN AND ABHAY MANOHAR SAPRE, JJ.)

Asger Ibrahim Amin ... Appellant
Vs.
Life Insurance Corporation of India ... Respondent

Civil Appeal No. 10251 of 2014; Civil Appellate Jurisdiction; Judgment on: 12.10.2015

Constitution of India, Article 14; Life Insurance Corporation Act, 1956, Section 48; Life Insurance Corporation of India (Staff) Regulations, 1960, Regulation 19; Life Insurance Corporation of India (Employees) Pension Rules, 1995 – Appellant rendered his resignation at the age of 50 years – the resignation was accepted by the LIC – pursuant to pension rules resignation from service would lead to forfeiture of benefits of the entire service including eligibility of pension – appellant requested to waive three months’ notice in writing – it was accepted by the Corporation – appellant ought not to be deprived of pension benefits merely because his termination of service termed as “resignation” – commendable objective of pension rules is to render benefits and to be extended to tide over the crisis of old age – the inconsistency between the statutory provisions and objective of the statute which discriminates beneficial interest between beneficiaries and employer will not be given effect to - it would be unjust if court avoids considering laudatory spirit of statutory provisions and the fundamental rights of Article 14 of the Constitution.

Ratio decidendi:-
The commendable objective of pension rules is to render benefits and to be extended to tide over the crisis of old age. The inconsistency between the statutory provisions and objective of the statute which discriminates beneficial interest between beneficiaries and employer will not be given effect to. It would be unjust if court avoids considering laudatory spirit of statutory provisions and the fundamental rights of Article 14 of the Constitution.

Observations of the Court:-
The second issue which confronts us is whether the termination of service of the Appellant remains unalterably in the nature of resignation, with the consequence of disentitling him from availing of or migrating/mutating the pension scheme or whether it instead be viewed as a voluntary retirement or whether it requires to be regarded so in order to bestow this benefit on the Appellant; who had ‘resigned’ after reaching the age of fifty and after serving the LIC for over twenty three years. The Appellant resigned from service under Regulation 18 of LIC of India (Staff) Regulations, 1960, which along with the other provisions of relevance is reproduced for facility of reference.(para 5)
The Appellant ought not to be deprived of pension benefits merely because he styled his termination of services as “resignation” or because there was no provision to retire voluntarily at that time. The commendable objective of the Pension Rule is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates us to palliate the differences between the two and reconcile them as far as possible.(para 14)

Held:-
We thus hold that the termination of services of the Appellant, in essence, was voluntary retirement within the ambit of Rule 31 of the Pension Rules of 1995. The Appellant is entitled for pension, provided he fulfils the condition of refunding of the entire amount of the Corporation’s contribution to the Provident Fund along with interest accrued thereon as provided in the Pension Rules of 1995. Considering the huge delay, not explained by proper reasons, on part of the Appellant in approaching the Court, we limit the benefits of arrears of pension payable to the Appellant to three years preceding the date of the petition filed before the High Court.

List of cases cited:-
Union of India Vs. Tarsem Singh, (2008) 8 SCC 648 (relied on)
Sheelkumar Jain Vs. New India Assurance Co. Ltd., (2011) 12 SCC 197 (relied on)
Reserve Bank of India Vs. Cecil Dennis Solomon, (2004) 9 SCC 461 (relied on)
Punjab National Bank Vs. P.K. Mittal, 1989 Supp (2) SCC 175 (relied on)
Union of India Vs. Gopal Chandra Misra, (1978) 2 SCC 301 (relied on)
Shyam Babu Verma Vs. Union of India, (1994) 2 SCC 521 (referred to)
State of M.P. Vs. Yogendra Shrivastava, (2010) 12 SCC 538 (referred to)
M.R. Prabhakar Vs. Canara Bank, (2012) 9 SCC 671 (referred to)
National Insurance Co. Ltd. Vs. Kirpal Singh, (2014) 5 SCC 189 (referred to)
UCO Bank Vs. Sanwar Mal, (2004) 4 SCC 412 (referred to)

The Judgment of the Court was delivered by Vikramajit Sen, J.:-

1. The question which falls for consideration is whether the Appellant is entitled to claim pension even though he resigned from service of his own volition and, if so, whether his claim on this count had become barred by limitation or laches.

2. The Appellant joined the services of the Respondent Corporation on 30.6.1967 on the post of Assistant Administrative Officer (Chartered Accountant) at the age of twenty seven. He worked for 23 years and 7 months in the Corporation before tendering his resignation on 28.1.1991, owing to “family circumstances and indifferent health”, presumably having crossed fifty years in age. The request of the Appellant for waiver of the stipulated three months’ notice was favourably considered by the Corporation vide letter dated 28.2.1991, and the Appellant was allowed to resign from the post of Deputy General Manager (Accounts), which he was holding at that time. We shall again presume that the reasons that he had ascribed for his retirement, viz. family problems and failing health, were found to be legitimate by the Respondent otherwise the waiver ought not to have been given. Thereafter, the Central Government in exercise of power conferred under Section 48 of the Life Insurance Corporation Act, 1956 had notified the LIC of India (Staff) Regulations, 1960 and thereafter the Life Insurance Corporation of India (Employees) Pension Rules, 1995 (hereinafter referred to as “Pension Rules”) which, though notified on 28.6.1995, were given retrospective effect from 1.11.1993. The Pension Rules provide, inter alia, that resignation from service would lead to forfeiture of the benefits of the entire service including eligibility for pension.
3. On 8.8.1995, that is post the promulgation by the Respondent of the Pension Rules, the Appellant enquired from the Respondent whether he was entitled to pension under the Pension Rules, which has been understood by the Respondent as a representation for pension; the Respondent replied that the request of the Appellant cannot be acceded to. The Appellant took the matter no further but has averred that in 2000, prompted by news in a Daily and Judgments of a High Court and a Tribunal, he requested the Respondent to reconsider his case for pension. This request has remained unanswered. It was in 2011 that he sent a legal notice to the Respondent, in response to which the Respondent reiterated its stand that the Appellant, having resigned from service, was not eligible to claim pension under the Pension Rules. Eventually, the Appellant filed a Special Civil Application on 29.3.2012 before the High Court, which was dismissed by the Single Judge vide Judgment dated 5.10.2012. The LPA of the Appellant also got dismissed on the grounds of the delay of almost 14 years, as also on merits vide Judgment dated 1.3.2013, against which the Appellant has approached this Court.

4. As regards the issue of delay in matters pertaining to claims of pension, it has already been opined by this Court in Union of India v. Tarsem Singh, (2008) 8 SCC 648 that in cases of continuing or successive wrongs, delay and laches or limitation will not thwart the claim so long as the claim, if allowed, does not have any adverse repercussions on the settled third-party rights. This Court held:
7. To summarise, normally, a belated service related claim will be rejected on the ground of delay and laches (where remedy is sought by filing a writ petition) or limitation (where remedy is sought by an application to the Administrative Tribunal). One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. But there is an exception to the exception. If the grievance is in respect of any order or administrative decision which related to or affected several others also, and if the reopening of the issue would affect the settled rights of third parties, then the claim will not be entertained. For example, if the issue relates to payment or refixation of pay or pension, relief may be granted in spite of delay as it does not affect the rights of third parties. But if the claim involved issues relating to seniority or promotion, etc., affecting others, delay would render the claim stale and doctrine of laches/limitation will be applied. Insofar as the consequential relief of recovery of arrears for a past period is concerned, the principles relating to recurring/successive wrongs will apply. As a consequence, the High Courts will restrict the consequential relief relating to arrears normally to a period of three years prior to the date of filing of the writ petition. (emphasis is ours)
We respectfully concur with these observations which if extrapolated or applied to the factual matrix of the present case would have the effect of restricting the claim for pension, if otherwise sustainable in law, to three years previous to when it was raised in a judicial forum. Such claims recur month to month and would not stand extinguished on the application of the laws of prescription, merely because the legal remedy pertaining to the time barred part of it has become unavailable. This is too well entrenched in our jurisprudence, foreclosing any fresh consideration.

5. The second issue which confronts us is whether the termination of service of the Appellant remains unalterably in the nature of resignation, with the consequence of disentitling him from availing of or migrating/mutating the pension scheme or whether it instead be viewed as a voluntary retirement or whether it requires to be regarded so in order to bestow this benefit on the Appellant; who had ‘resigned’ after reaching the age of fifty and after serving the LIC for over twenty three years. The Appellant resigned from service under Regulation 18 of LIC of India (Staff) Regulations, 1960, which along with the other provisions of relevance is reproduced for facility of reference -
SECTION 3 – TERMINATION
Determination of Service:
18.(1) An employee, other than an employee on probation or an employee appointed on a temporary basis, shall not leave or discontinue his service in the Corporation without first giving notice in writing to the competent authority of his intention to leave or discontinue the service. The period of notice required shall be-
(a) three months in the case of an employee belonging to Class I;
(b) one month in the case of other employees.
Provided that such notice may be waived in part or in full by the competent authority at its discretion. In case of breach by an employee of the provisions of the sub-regulation, he shall be liable to pay the Corporation as compensation a sum equal to his salary for the period of notice required of him, which sum may be deducted from any moneys due to him.
Superannuation and Retirement:
19(1) xx
(2) An employee belonging to Class I or Class II appointed to the service of the Corporation on or after 1st September,1956, shall retire on completion of 60 years of age, but the competent authority may, if it is of the opinion that it is in the interest of the Corporation to do so, direct such employee to retire on completion of 50 years of age or at any time thereafter on giving him three months’ notice or salary in lieu thereof. The following Regulations, on which learned Senior Counsel for the LIC has placed reliance, came to be introduced on 16.2.1996, that is after the Appellant had ‘resigned’ from service. We have called for and perused this Notification, and as we expected, these provisions apply retrospectively with effect from 1.11.1993. These Regulations ordain, inter alia, that an employee may be permitted to retire (a) on completion of the age of 55 and (b) after completing 25 years in service. In other words, the Corporation has the power to compulsory retire an employee who has attained the age of 50 years if in its opinion such decision is in the interests of the Corporation; and the employee may seek permission to retire upon completion of 55 years of age and after rendering 25 years of service. This very position finds reiteration in Rule 31 of the Pension Rules under the epithet ‘voluntary retirement’, which pandect appears to have been available from the inception i.e. 1.11.1993.
(2A)(a) Notwithstanding what is stated in sub-rules (1) and (2) above, an employee may be permitted to retire at any time on completion of the age 55 after giving three months’ notice in writing to the appointing authority of his intention to retire.
(b)(i) Notwithstanding the provisions of Clause (a), an employee governed by the Life Insurance Corporation of India (Employees) Pension Rules 1995 may be permitted to retire at any time after he has completed twenty years of qualifying service, by giving notice of not less than ninety days in writing to the appointing authority.
Provided that this sub-clause shall not apply to an employee who is on deputation unless after having been transferred or having returned to India, he has resumed charge on the post in India and has served for a period of not less than one year.
Provided further that this sub-clause shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.
(ii) The notice of voluntary retirement given under sub-clause (i) of clause (b) shall require acceptance by the appointing authority.
Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.”

6. As we have already recounted, the Appellant received a waiver of the requirement of giving three months prior notice of his resolve to “discontinue his service in the Corporation”, bestowing legitimacy to the reasons that compelled him to do so. It also brings to the fore that the 1960 Staff Regulations did not provide for voluntary retirement or VRS as has become commonplace today. This Court has clarified and highlighted that ‘resignation’ and ‘retirement’ have disparate connotations; that an employee can ‘resign’ at any time but, in contradistinction, can ‘retire’ only on completion of the prescribed period of qualifying service and in consonance with extant Rules and Regulations.

7. We shall now consider the Pension Rules of 1995. Rule 3 of Chapter II thereof, provides that the Rules are applicable to employees (1) who were in the service of the Corporation on or after 1.1.1986 and had retired before 1.11. 1993 i.e. the notified date, or (2) who retired after 1.11.1993; or (3) who were in the service before the notified date and continued to be in service on or after the notified date; or (4) who were in the service on or after 1.1.1986 but had retired on or after 1.11.1993 and before the notified date. What is discernible from these dates is that the Pension Rules of 1995 have included two classes of beneficiaries into one homogenous class, to wit, the employees who had retired before the notified date and those who were to retire after the notified date. In our opinion, the advantage of these beneficent Rules should be extended even to the Appellant who was similarly placed as the retirees mentioned in Rule 3 but for the fact that he had ‘resigned’ rather than retired. The two provisions caught in the crossfire are Rule 2(s), which defines “retirement” and Rule 23, which deals with the “forfeiture of service”:
2(s)“retirement” means-(i) retirement in accordance with the provisions contained in sub-regulation (1) or sub-regulation (2) or sub-regulation (3) of regulation 19 of the Life Insurance Corporation of India (Staff) Regulations, 1960 and rule 14 of the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms and Conditions of Service) Rules, 1985 made under the Act;
(ii) voluntary retirement in accordance with the provisions contained in rule 31 of these rules. (emphasis added)
23. Forfeiture of service-Resignation or dismissal or removal or termination or compulsory retirement of an employee from the service of the Corporation shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits. Voluntary retirement, noted in the sub-Rule (ii) of Rule 2(s), has been defined in Rule 31, and it reads as follows:
31. Pension on voluntary retirement-(1) At any time after an employee has completed twenty years of qualifying service he may, by giving notice of not less than ninety days, in writing, to the appointing authority, retire from service:
Provided that this sub-rule shall not apply to an employee who is on deputation unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year:
Provided further that this sub-rule shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.
(2) The notice of voluntary retirement given under sub-rule (1) shall require acceptance by the appointing authority:
Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.
(3)(a) An employee referred to in sub-rule (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefor;
(b) on receipt of a request under clause(a), the appointing authority may, subject to the provisions of sub-rule (2), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of ninety days on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days.
(4) An employee, who has elected to retire under this rule and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with the specific approval of such authority:
Provided that the request for such withdrawal shall be made before the intended date of his retirement.
(5) The qualifying service of an employee retiring voluntarily under this rule shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.
(6) The pension of an employee retiring under this rule shall be based on the average emoluments as defined under clause(d) of rule 2 of these rules and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.

8. It seems obvious to us that the Appellant’s case does not fall within the postulation of Rule 23 as the last four categories or genres or types of cessation of services are in character punitive; and the first envisages those resignations where the right to pension has not been earned by that time or where it is without the permission of the Corporation.

9. The Respondent Corporation has vehemently argued that the termination of services is under Regulation 18 (supra) of the LIC (Staff) Regulations, 1960 and is not covered by the Pension Rules of 1995. Respondent Corporation has controverted the plea of the Appellant that at the relevant date and time, viz. 28.1.1991 there was no alternative for him except to tender his resignation, pointing out that he could not have sought voluntary retirement under Regulation 19(2A) of LIC of India (Staff) Regulations, 1960. If that be so, the Respondent being a model employer could and should have extended the advantage of these Regulations to the Appellant thereby safeguarding his pension entitlement. However, we find no substance in the argument of the Respondent since Regulation 19(2A) was, in fact, notified in the Gazette of India on 16.2.1996 that is after the pension scheme came into existence with effect from 1.11.1993. Otherwise there would have been no conceivable reason for the Appellant not to have taken advantage of this provision which would have protected his pensionary rights.

10. We also record that the provisions covered by the definition of “retirement”, which do not entail forfeiture of service, are sub-regulation (1), sub-regulation (2), and sub-regulation (3) of Regulation 19 of the Life Insurance Corporation of India (Staff) Regulations, 1960 and Rule 14 of the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms and Conditions of Service) Rules, 1985. None of these provisions provides for voluntary retirement like Rule 31 of the Pension Rules nor does the definition of “retirement” make any mention of aforementioned Regulation 19(2A).

11. The facts of the case disclose that the Appellant has worked for over twenty years and had tendered his resignation in accordance with the provision of Regulation 18 of LIC of India (Staff) Regulations, 1960, which, as is apparent from its reading, does not dissimulate between the termination of service by way of resignation on the one hand and voluntary retirement on the other, or distinguish one from the other. Significantly, there was no provision for voluntary retirement at the relevant time, and it was for this reason that the Pension Rules of 1995 specifically provided for it under Rule 31.

12. In this backdrop of facts, we need not dwell much on the issue because the case of Sheelkumar Jain v. New India Assurance Co. Ltd., (2011) 12 SCC 197 is on all fours of this case. In Sheelkumar, the Appellant resigned from the services of the Respondent Company after serving for over 20 years on 16.12.1991. His resignation was offered and granted under Clause 5 of General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976. Thereafter, the Central Government formulated General Insurance (Employees') Pension Scheme, 1995 with retrospective effect from 1.11.1993. Sheelkumar applied for pension under this Scheme, which was declined on the ground that resignation from service would entail forfeiture of service under Clause 22 of the General Insurance (Employees') Pension Scheme, 1995. The Appellant moved the High Court challenging the rejection of his claim. His writ petition as well as the writ appeal was dismissed by the High Court. The Appellant then moved this Court, whereby we noted that Clause 5 of the Scheme of 1976 did not mention resignation nor was the Appellant made aware of the distinction between resignation and voluntary retirement; that this distinction was a product of the General Insurance (Employees’) Pension Scheme of 1995. This Court observed:
20. Sub-para (1) of Para 5 does not state that the termination of service pursuant to the notice given by an officer or a person of the Development Staff to leave or discontinue his service amounts to “resignation” nor does it state that such termination of service of an officer or a person of the Development Staff on his serving notice in writing to leave or discontinue in service amounts to “voluntary retirement”. Sub-para (1) of Para 5 does not also make a distinction between “resignation” and “voluntary retirement” and it only provides that an employee who wants to leave or discontinue his service has to serve a notice of three months to the appointing authority.
21. We also notice that sub-para (1) of Para 5 does not require that the appointing authority must accept the request of an officer or a person of the Development Staff to leave or discontinue his service but in the facts of the present case, the request of the appellant to relieve him from his service after three months’ notice was accepted by the competent authority and such acceptance was conveyed by the letter dated 28-10-1991 of the Assistant Administrative Officer, Indore.
xxxxx
23. The 1995 Pension Scheme was framed and notified only in 1995 and yet the 1995 Pension Scheme was made applicable also to employees who had left the services of Respondent 1 Company before 1995. Paras 22 and 30 of the 1995 Pension Scheme quoted above were not in existence when the appellant submitted his letter dated 16-9-1991 to the General Manager of Respondent 1 Company. Hence, when the appellant served his letter dated 16-9-1991 to the General Manager of Respondent 1 Company, he had no knowledge of the difference between “resignation” under Para 22 and “voluntary retirement” under Para 30 of the 1995 Pension Scheme. Similarly, Respondent 1 Company employer had no knowledge of the difference between “resignation” and “voluntary retirement” under Paras 22 and 30 of the 1995 Pension Scheme, respectively.
24. Both the appellant and Respondent 1 have acted in accordance with the provisions of sub-para (1) of Para 5 of the 1976 Scheme at the time of termination of service of the appellant in the year 1991. It is in this background that we have now to decide whether the termination of service of the appellant under sub-para (1) of Para 5 of the 1976 Scheme amounts to resignation in terms of Para 22 of the 1995 Pension Scheme or amounts to voluntary retirement in terms of Para 30 of the 1995 Pension Scheme.
25. Para 22 of the 1995 Pension Scheme states that the resignation of an employee from the service of the corporation or a company shall entail forfeiture of his entire past service and consequently he shall not qualify for pensionary benefits, but does not define the term “resignation”. Under sub-para (1) of Para 30 of the 1995 Pension Scheme, an employee, who has completed 20 years of qualifying service, may by giving notice of not less than 90 days in writing to the appointing authority retire from service and under sub-para (2) of Para 30 of the 1995 Pension Scheme, the notice of voluntary retirement shall require acceptance by the appointing authority. Since “voluntary retirement” unlike “resignation” does not entail forfeiture of past services and instead qualifies for pension, an employee to whom Para 30 of the 1995 Pension Scheme applies cannot be said to have “resigned” from service.
26. In the facts of the present case, we find that the appellant had completed 20 years of qualifying service and had given notice of not less than 90 days in writing to the appointing authority of his intention to leave the service and the appointing authority had accepted notice of the appellant and relieved him from service. Hence, Para 30 of the 1995 Pension Scheme applied to the appellant even though in his letter dated 16-9-1991 to the General Manager of Respondent 1 Company he had used the word “resign”.

13. What is unmistakably evident in the case at hand is that the Appellant had worked continuously for over 20 years, that he sought to discontinue his services and requested waiver of three months’ notice in writing, and that the said notice was accepted by the Respondent Corporation and the Appellant was thereby allowed to discontinue his services. If one would examine Rule 31 of the Pension Rules juxtaposed with the aforementioned facts, it would at once be obvious and perceptible that the essential components of that Rule stand substantially fulfilled in the present case. In Sheelkumar, this Court was alive to the factum that each case calls for scrutiny on its own merits, but that such scrutiny should not be detached from the purpose and objective of the concerned statute. It thus observed:
30. The aforesaid authorities would show that the court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement and while construing the statutory provisions, the court will have to keep in mind the purposes of the statutory provisions.
31. The general purpose of the 1995 Pension Scheme, read as a whole, is to grant pensionary benefits to employees, who had rendered service in the insurance companies and had retired after putting in the qualifying service in the insurance companies. Paras 22 and 30 of the 1995 Pension Scheme cannot be so construed so as to deprive of an employee of an insurance company, such as the appellant, who had put in the qualifying service for pension and who had voluntarily given up his service after serving 90 days’ notice in accordance with sub-para (1) of Para 5 of the 1976 Scheme and after his notice was accepted by the appointing authority.

14. The Appellant ought not to be deprived of pension benefits merely because he styled his termination of services as “resignation” or because there was no provision to retire voluntarily at that time. The commendable objective of the Pension Rule is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates us to palliate the differences between the two and reconcile them as far as possible. We would be failing in our duty, if we go by the letter and not by the laudatory spirit of statutory provisions and the fundamental rights guaranteed under Article 14 of the Constitution of India.

15. Reserve Bank of India v. Cecil Dennis Solomon, (2004) 9 SCC 461 relied upon by the Respondent, although distinguishable on facts, has ventured to distinguish “voluntary retirement” from “resignation” in the following terms:
10. In service jurisprudence, the expressions “superannuation”, “voluntary retirement”, “compulsory retirement” and “resignation” convey different connotations. Voluntary retirement and resignation involve voluntary acts on the part of the employee to leave service. Though both involve voluntary acts, they operate differently. One of the basic distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after rendering prescribed period of qualifying service. Other fundamental distinction is that in case of the former, normally retiral benefits are denied but in case of the latter, the same is not denied. In case of the former, permission or notice is not mandated while in case of the latter, permission of the employer concerned is a requisite condition. Though resignation is a bilateral concept, and becomes effective on acceptance by the competent authority, yet the general rule can be displaced by express provisions to the contrary. In Punjab National Bank v. P.K. Mittal (1989 Supp (2) SCC 175) on interpretation of Regulation 20(2) of the Punjab National Bank Regulations, it was held that resignation would automatically take effect from the date specified in the notice as there was no provision for any acceptance or rejection of the resignation by the employer. In Union of India v. Gopal Chandra Misra ((1978) 2 SCC 301) it was held in the case of a judge of the High Court having regard to Article 217 of the Constitution that he has a unilateral right or privilege to resign his office and his resignation becomes effective from the date which he, of his own volition, chooses. But where there is a provision empowering the employer not to accept the resignation, on certain circumstances e.g. pendency of disciplinary proceedings, the employer can exercise the power.(emphasis is ours) The legal position deducible from the above observations further amplifies that the so-called resignation tendered by the Appellant was after satisfactorily serving the period of 20 years ordinarily qualifying or enabling voluntary retirement. Furthermore, while there was no compulsion to do so, a waiver of the three months’ notice period was granted by the Respondent Corporation. The State being a model employer should construe the provisions of a beneficial legislation in a way that extends the benefit to its employees, instead of curtailing it.

16. The cases of Shyam Babu Verma v. Union of India, (1994) 2 SCC 521; State of M.P. v. Yogendra Shrivastava, (2010) 12 SCC 538; M.R. Prabhakar v. Canara Bank, (2012) 9 SCC 671; National Insurance Co. Ltd. v. Kirpal Singh, (2014) 5 SCC 189; UCO Bank v. Sanwar Mal, (2004) 4 SCC 412 relied upon by the parties are distinguishable on facts from the present case.

17. We thus hold that the termination of services of the Appellant, in essence, was voluntary retirement within the ambit of Rule 31 of the Pension Rules of 1995. The Appellant is entitled for pension, provided he fulfills the condition of refunding of the entire amount of the Corporation’s contribution to the Provident Fund along with interest accrued thereon as provided in the Pension Rules of 1995. Considering the huge delay, not explained by proper reasons, on part of the Appellant in approaching the Court, we limit the benefits of arrears of pension payable to the Appellant to three years preceding the date of the petition filed before the High Court. These arrears of pension should be paid to the Appellant in one installment within four weeks from the date of refund of the entire amount payable by the Appellant in accordance of the Pension Rules of1995. In the alternative, the Appellant may opt to get the amount of refund adjusted against the arrears of pension. In the latter case, if the amount of arrear is more than the amount of refund required, then the remaining amount shall be paid within two weeks from the date of such request made by the Appellant. However, if the amount of arrears is less than the amount of refund required, then the pension shall be payable on monthly basis after the date on which the amount of refund is entirely adjusted. The impugned Judgments of the High Court are set aside and the Appeal stands allowed in the terms above. However, parties shall bear their respective costs.

..............................Abhay Manohar Sapre, J.

………………………..

(2015) 119 (3) CWN (SC) 159

IN THE SUPREME COURT OF INDIA

(BEFORE DIPAK MISRA AND PRAFULLA C. PANT, JJ.)

Sumer Builders Pvt. Ltd. ... Appellant
Vs.
Narendra Gorani ... Respondent

Civil Appeal No. 4267 of 2015; Arising out of SLP(C) No. 11215 of 2015; Civil Appellate Jurisdiction; Judgment on:
15.10.2015

A. Arbitration and Conciliation Act, 1996, Section 9; Letters Patent, Clause 12; Code of Civil Procedure, 1908, Section 120 – An agreement for development was entered containing arbitration clause – respondent terminated the agreement and forfeited the security deposit – leave granted under Clause 12 of the Letters Patent by Bombay High Court and application under Section 9 of the Act, 1996 was moved by the appellant – respondent made an application for revocation of leave as dispute pertaining to “suit for land” and to be filed at Indore - Division Bench on the basis of the scrutiny of documents held that claim pertains to certain constructed space on the land - it would fall within the conception of “suit for land” – the appellant is in possession of the land - the respondent claims that it had taken over possession - any order passed under Section 9 of the 1996 Act will have the impact on the land - it is clearly a dispute with regard to

the possession and not a money claim - “suit for land” is a suit, relates to title or delivery of possession – if the suit is simpliciter for specific performance of contract it cannot be said to be “suit for land - the Bombay High Court would not have the territorial jurisdiction.

Ratio decidendi:-
If the suit is simpliciter for specific performance of contract it cannot be said to be “suit for land. The “suit for land” is a suit, relates to title or delivery of possession. When order passed under Section 9 of the Arbitration and Conciliation Act, 1996 will have the impact on the land. It is clearly a dispute with regard to the possession.

Observations of the Court:-
Be it noted under Section 120 of the Code of Civil Procedure, 1908 (for short, “CPC”), Sections 16, 17 and 20 are not applicable to the High Court in original civil jurisdiction. Thus, as far as the Bombay High Court is concerned, it is Clause 12 of the Letters Patent that would govern the controversy.(para13)
In Adcon Electronics (supra), the two-Judge Bench referred to the divergence of opinion in Moolji Jaitha (supra), the Full Bench decision of the High Court of Madras in P.M.A. Velliappa Chettiar v. Saha Govinda Doss, AIR 1929 Mad. 721 Division Bench judgment of Calcutta High Court in Debendra Nath Chowdhury v. Southern Bank Ltd., AIR 1960 Cal. 626 and ruled thus:-
“From the above discussion it follows that a “suit for land” is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a “suit for land” or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a “suit for land”. We are in respectful agreement with the view expressed by Mahajan, J. in Moolji Jaitha case.”(para 14)
Recently, in Excel Dealcomm Pvt. Ltd. v. Asset Reconstruction Co. (India) Ltd., (2015) 8 SCC 219 the controversy had arisen from the High Court of Calcutta. The two-Judge Bench addressed to the issue “what is the suit for land”, and observed as under:-
“A suit for land is a suit in which the relief claimed relates to the title or delivery of possession of land or immovable property [see Adcon Electronics (P) Ltd. v. Daulat]. Further, it is an established rule that to determine whether it is a suit for land, the court will look into barely the plaint and no other evidence (Indian Mineral & Chemicals Co. v. Deutsche Bank, (2004) 12 SCC 376). If by the averments in the plaint and prayers therein, it appears that the suit is one for land, it shall be so held and if it does not so appear, then the suit shall continue under leave granted under Clause 12.”(para 17)

Held:-
The assertions made in the application along with the relief clause when read in entirety and appreciated in a holistic manner, it becomes luminescent that the core dispute pertains to possession of the land. It can irrefragably be stated that any order passed under Section 9 of the 1996 Act will have the impact on the land. It is clearly a dispute with regard to the possession which is evincible from the correspondences and the averments made in the application preferred under Section 9 of the 1996 Act. Thus, there has to be determination as regards possession and impliedly issue of direction for recovery of possession. Hence, the conclusion arrived at by the Division Bench on the basis of the scrutiny of documents that the dispute is embedded with regard to the possession of the land because the fundamental claim pertains to certain constructed space on the land and, therefore, it would conceptually fall within the conception of “suit for land” appearing in Clause 12 of the Letters Patent is unexceptionable. Prayer (a) quoted above seeks restraint by a temporary order or injunction from entering upon the property. It is difficult to accept the submission that it is a money claim and, therefore, the Bombay High Court would also have the territorial jurisdiction and accordingly we unhesitatingly repel the same.

B. “Suit for land”
“Suit for land” is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a “suit for land” or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a “suit for land.” (P.M.A. Velliappa Chettiar v. Saha Govinda Doss, AIR 1929 Mad. 721 Division Bench judgment of Calcutta High Court in Debendra Nath Chowdhury v. Southern Bank Ltd., AIR 1960 Cal. 626)
“A suit for land is a suit in which the relief claimed relates to the title or delivery of possession of land or immovable property [see Adcon Electronics (P) Ltd. v. Daulat]. Further, it is an established rule that to determine whether it is a suit for land, the court will look into barely the plaint and no other evidence (Indian Mineral & Chemicals Co. v. Deutsche Bank, (2004) 12 SCC 376). If by the averments in the plaint and prayers therein, it appears that the suit is one for land, it shall be so held and if it does not so appear, then the suit shall continue under leave granted under Clause 12.

List of cases cited:-
Moolji Jaitha & Co. Vs. Khandesh Spinning & Weaving Mills Co. Ltd., AIR 1950 FC 83 (referred to)
Shiv Bhagwan Moti Ram Saraoji Vs. Onkarmal Ishar Dass & Ors., AIR 1952 Bom. 365 (analysed)
Adcon Electronics Pvt. Ltd. Vs. Daulat and Anr., (2001) 7 SCC 698 (referred to)
P.M.A. Velliappa Chettiar Vs. Saha Govinda Doss, AIR 1929 Mad. 721 (referred to)
Debendra Nath Chowdhury Vs. Southern Bank Ltd., AIR 1960 Cal. 626 (referred to)
Excel Dealcomm Pvt. Ltd. Vs. Asset Reconstruction Co. (India) Ltd., (2015) 8 SCC 219 (discussed)
Indian Mineral & Chemicals Co. Vs. Deutsche Bank, (2004) 12 SCC 376 (discussed)

The Judgement of the Court was delivered by Dipak Misra, J.:-

1. The instant appeal is directed against the judgment and order dated 10.03.2015 passed by the Division Bench of the High Court of Judicature at Bombay in Appeal No.572 of 2013 whereby it has concurred with the view expressed by the learned Single Judge in Chamber Summons No. 720/2013 in Arbitration Petition No.799/2013 dated 10.10.2013 where under the learned Single Judge had revoked the leave granted by the court under Clause 12 of the Letters Patent to file a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, “the 1996 Act”).

2. The facts which are essential to be stated are that the parties to the lis entered into an agreement on 28.2.2008 for development of the land of the respondent. As per the said agreement, the appellant was required to develop a residential project and/or commercial complex and/or multiplex and/or hotels and/or malls etc. as permissible in law. The respondent had handed over the vacant possession of the land to enable the appellant to start the development work. Clause 13 of the development agreement contains an arbitration clause whereby the parties had agreed to refer the matter in respect of any difference or dispute between them with regard to the construction or the terms of the development agreement or with regard to the project undertaken for arbitration. A Memorandum of Understanding (MoU) was entered into between the parties, which stipulates that the developer was required construct a township project consisting of one commercial building, 11 residential wings in four buildings and one club house under licence from the Indore Municipal Corporation. It was further agreed that if the MoU was terminated, the developer would not have any right, title or interest in the township project and would be required to remove his employees and machineries from the land. Clause 13 of the developer agreement was also incorporated in the MoU.

3. As disputes arose with regard to payment, the respondent terminated the MoU, forfeited the security deposit and invoked the arbitration clause by issuing a notice through his Advocate on 6.6.2013. The appellant herein replied to the termination notice by stating that it had carries out substantial construction on the property by constructing three buildings and by taking many other steps. It was also stated by the appellant that the environmental clearance certificate for the project was not obtained by the respondent and, therefore, further work was stopped. The appellant required the respondent to perform his part of the contract in obtaining the requisite environmental clearance, execute irrevocable power of attorney, refund the part of the amount payable and pay interest on the security deposit.

4. As the factual matrix would undrape, when arbitration was demanded by the respondent, the appellant on 16.7.2013 replied that the arbitration tribunal had to be in Mumbai. It was also put forth that it was in physical possession of the property and its construction material, machinery, office equipment’s and other equipment’s were at the site. At this stage, the appellant moved the High Court of Bombay for grant of leave under Clause 12 of the Letters Patent by filing an application under Section 9 of the 1996 Act asserting that the courts at Bombay have the territorial jurisdiction, and accordingly leave was granted. The respondent after entering appearance filed an application praying for revocation of leave. While seeking revocation of leave, it was contended by the respondent that dispute pertains to the land which is situated at Indore; that the development agreement and the MoU had been executed at Indore where the immoveable property is situated; and that the dispute fundamentally is for right and possession over the land, hence, the court where the land is situated has the territorial jurisdiction in respect of the arbitration or any application to be filed under the 1996 Act.

5. The learned Single Judge scanned the anatomy of Clause 12 of the Letters Patent and various decisions of the High Court of Bombay and referred to the decision in Moolji Jaitha & Co. v. Khandesh Spinning & Weaving Mills Co. Ltd., AIR 1950 FC 83 adverted to the issue relating to what would constitute cause of action in the obtaining factual matrix, analysed the decision of the Bombay High Court in Shiv Bhagwan Moti Ram Saraoji v. Onkarmal Ishar Dass & Ors., AIR 1952 Bom. 365 and referred to Adcon Electronics Pvt. Ltd. v.Daulat and Anr., (2001) 7 SCC 698 and eventually came to hold as follows:-
“... the Petitioner has put up its machinery, staff for the construction and the ultimate construction upon the land. Several buildings have been constructed fully or in part. The parties are entitled to a part of the construction each as per the directions of the development agreement or amount in cash as per the MOU. The development work is in progress. An order for protection of the property pending the arbitration would involve the land itself. The dispute has nothing to do with the rights of the parties in personam only....” And again:-
“... The disputes in the development agreement are closely connected with the land, the possession of which is disputed by the parties. The suit is a suit for land. It would have to be filed in Indore where the land is situate.”

6. Being of this view, the learned Single Judge revoked the leave that was earlier granted. Being dissatisfied with the aforesaid order, the appellant preferred an appeal before the Division Bench. Before the Division Bench it was contended that the appellant was in possession of the land and the possession shall remain with it till the completion of the entire project and he was entitled to refund of security deposit.

7. In essence, it was urged that the application preferred under Section 9 of the 1996 Act was tenable before the High Court of Bombay and there was no justification to revoke the leave. The Division Bench referred to certain clauses of the agreement and the clauses from the MoU and the correspondences between the parties, the assertions made in the Section 9 petition and the relief sought therein, addressed to the import of Clause 12 of the Letters Patent and what meaning had been given to the “suit for land” in Moolji Jaitha (supra) by analyzing various passages, culled out the principles stated in Adcon Electronics (supra), took note of the fact that the development agreement and the MoU had been executed at Indore, the statement of claim and the counter claim filed by the parties before the learned arbitrator who has already entered into reference and in the ultimate eventuality opined thus:-
“... In the present case, we are of the view that the disputes between the parties hereto in relation to the development agreement dated 28 February 2008 and the MOU dated 8 June 2012 are of such a nature that they are rooted to the land. The disputes are not such that they relate only to the execution of any document and/or specific performance thereof simplicitor. The disputes relate to possession of the said land which is outside the jurisdiction of the Court as also regarding the percentage of the parties’ rights, title and interest in the said land and/or their entitlement to a sizable portion of the constructed space thereon. These disputes would certainly fall within the expression “suit for land” appearing in Clause XII of the Letters Patent.” Expressing thus, the Division Bench declined to interfere with the order passed by the learned Single Judge.

8. We have heard Mr. Shekhar Naphade, learned senior counsel for the appellant and Mr. Shyam Divan, learned senior counsel for the respondent.

9. Criticizing the orders passed by the High Court, it is submitted by Mr. Naphade, learned senior counsel that the learned Single Judge as well as the Division Bench has fallen into serious error in their appreciation of the clauses in the agreement and the relief sought inasmuch as it was a money claim and when the amount was paid at Mumbai, the High Court of Mumbai had the jurisdiction. He has drawn our attention to various clauses in the agreement to which we shall refer to in the course of our delineation. In essence, his submission is that it is basically a claim relating to money and it has nothing to do with the land and, therefore, the analysis made by the High Court is fundamentally fallacious.

10. Mr. Divan, learned senior counsel appearing for the respondent countering the aforesaid submissions would contend that the cause of action had arisen at Indore regard being had to the fact that the land is situated at Indore and the agreement in question and the MoU were executed at Indore. It is his further submission that the order passed by the Division Bench is absolutely defensible inasmuch as it is a claim for land and in the backdrop of prayer under Section 9 of the 1996 Act, there could not have been any other conclusion than what has been expressed by the High Court that it has no territorial jurisdiction to deal with the controversy.

11. To appreciate the controversy, it is appropriate to refer to Clause 12 of the Letters Patent, which reads as follows:-
“12. Original jurisdiction as to suits – And we do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, in which the debt or damage, or value of property sued for does not exceed one hundred rupees.”

12. The said clause fell for interpretation in Adcon Electronics (supra), wherein the Court stated thus:-
“Thus, it is clear that under clause 12 of the Letters Patent, the High Court in exercise of its ordinary original jurisdiction will have power to receive, try and determine: (1) suits for land or other immovable property if such property is situated within the local limits of original jurisdiction of the High Court; or (2) all other cases (a) if the cause of action has arisen wholly within the local limits of the ordinary original jurisdiction of the High Court; (b) if prior leave of the Court has been obtained and the cause of action has arisen in part within the local limits of the ordinary original jurisdiction of the High Court; or (c) if the defendant dwells or carries on business or personally works for gain within such limits.”

13. Be it noted under Section 120 of the Code of Civil Procedure, 1908 (for short, “CPC”), Sections 16, 17 and 20 are not applicable to the High Court in original civil jurisdiction. Thus, as far as the Bombay High Court is concerned, it is Clause 12 of the Letters Patent that would govern the controversy.

14. In Adcon Electronics (supra), the two-Judge Bench referred to the divergence of opinion in Moolji Jaitha (supra), the Full Bench decision of the High Court of Madras in P.M.A. Velliappa Chettiar v. Saha Govinda Doss, AIR 1929 Mad. 721 Division Bench judgment of Calcutta High Court in Debendra Nath Chowdhury v. Southern Bank Ltd., AIR 1960 Cal. 626 and ruled thus:-
“From the above discussion it follows that a “suit for land” is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a “suit for land” or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a “suit for land”. We are in respectful agreement with the view expressed by Mahajan, J. in Moolji Jaitha case.”

15. It will be appropriate to reproduce what Justice Mahajan had observed in Moolji Jaitha (supra):-
“If an attempt is made to find a comprehensive definition of the phrase, it will eventually be discovered that it has created further complications. I therefore content myself by saying that where the nature of the suit is such that in substance it involves a controversy about land or immovable property and the court is called upon to decide conflicting claims to such property and a decree or order is prayed for which will bring about a change in the title to it, that suit can be said to be in respect of land or immovable property; but where incidentally in a suit, the main purpose of which or the primary object of which is quite different, some relief has to be given about land, the title to it not being in dispute in the real sense of the term, then such a suit cannot fall within the four corners of this expression.”

16. He had further added:-
“In my opinion, if the suit is for specific performance and a decree for possession of the land sold is claimed, such a suit would certainly be a suit for land; but if the suit is simpliciter for specific performance, i.e., for the enforcement of the contract of sale and for execution of a conveyance, in that event there can be no good ground for holding that such a suit is a suit for determination of title to land or that the decree in it would operate on the land.”

17. Recently, in Excel Dealcomm Pvt. Ltd. v. Asset Reconstruction Co. (India) Ltd., (2015) 8 SCC 219 the controversy had arisen from the High Court of Calcutta. The two-Judge Bench addressed to the issue “what is the suit for land”, and observed as under:-
“A suit for land is a suit in which the relief claimed relates to the title or delivery of possession of land or immovable property [see Adcon Electronics (P) Ltd. v. Daulat]. Further, it is an established rule that to determine whether it is a suit for land, the court will look into barely the plaint and no other evidence (Indian Mineral & Chemicals Co. v. Deutsche Bank, (2004) 12 SCC 376). If by the averments in the plaint and prayers therein, it appears that the suit is one for land, it shall be so held and if it does not so appear, then the suit shall continue under leave granted under Clause 12.”

18. Be it noted, in the said case suit was filed for specific performance of the agreement which contemplated sale of property as has been described under Section 13 of the SARFAESI Act, 2002. The issue that arose before the Court is as follows:-
“In the present case, a suit was filed for the specific performance of the agreement which contemplated the sale of property, as has been described in Para 1 under Section 13 of the SARFAESI Act in terms of the Rules. The question with respect to Clause 12 of the Letters Patent in the present case is that whether the present suit is suit for land.”

19. The Court referred to the relief clause, the authority in Adcon Electronics (supra) and came to hold that:-
“It may be noted that the sale certificate sought under the prayer requires the delivery of possession of the suit property. Thus, we find that the prayer for delivery of possession was an implicit one in the present case. The prayer as sought in the plaint could not have been granted without the delivery of possession of the suit property as the sale certificate itself contemplates the delivery of the immovable property. Thus, inview of this we find that Adcon Electronics would not apply as there was a prayer for delivery of possession in the present case. Therefore, we hold that the present suit was indeed a suit for land.” Being of this view, it concurred with the opinion expressed by the High Court of Calcutta that it did not have the territorial jurisdiction.

20. The obtaining factual matrix has to be appreciated on the basis of the principles that have been enunciated in the authorities we have referred to hereinabove. It has to be borne in mind that it was an application under Section 9 of the 1996 Act. Section 9 of the 1996 Act reads as follows:-
“9. Interim measures, etc. by Court.—A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court—
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:—
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.”

21. There can be no cavil over the proposition that Section 9 petition can be entertained in the absence of arbitral proceeding. Be that as it may, it is imperative to scan the relevant clauses of the agreement and carefully x-ray the clauses of the MoU and also critically scrutinise the relief sought in the petition preferred under Section 9 of the Act.
22. Mr. Naphade, learned senior counsel has drawn our attention to the recital part of the agreement and certain other clauses. The recital part reads as follows:-
“AND WHEREAS the Owner and Developer have agreed to develop the said land by entering in a Development Agreement, by which the owner shall get 40% of the Developed Saleable area and Developer shall get 60% of the Developed Saleable Area in the proposed project irrespective of its being residential/commercial or hotels or Multiplex or mixture of the either etc.”

23. Clause 3 of the agreement deals with the security amount which stipulates that for developing the said land of the owner, the developer shall give a “Refundable Security Deposit” of Rs.20 crores to the owner. A schedule was fixed for payment of the said amount. Clause 4 of the agreement stipulates what events would take place after execution of the development agreement. It basically relates to certain obligations to be performed by the parties.

24. Clause 5(ii) of the agreement on which emphasis has been laid is to the following effect:-
“5. (ii) The Developer and the Owner shall at all times thereafter be entitled to receive money, take bookings, enter into leasing agreements, sell, assign any or all portions of the proposed project falling under his share, and owner hereby give express consent for the same to the Developers.”

25. Clause 7 deals with refund of security deposit. Clause 7D from which inspiration has been drawn by the learned senior counsel for the appellant reads as follows:-
“7D. It is agreed between the parties hereto that if the Owner fails to refund the security deposit and the parties hereto decides to sale the units and/or blocks then in that event the Developer shall be entitled to recover refundable security deposit from the sale of Units and/or Blocks of the Owner’s share and in the circumstances the Developers shall be entitled to receive 60% and the Owner shall be entitled to receive 40% of the sale price of the Units and/or Blocks of the Owner’s share and the said 60% price will be adjusted towards refundable security deposit.”

26. Clause 9 deals with the responsibility of the developer. Clause 10 deals with the joint responsibilities of the owner and the developer. The said clause reads as follows:-
“10. Joint Responsibility of Owners and Developers:-
(i) To provide cooperation to each other for sanctioning the plans of the project with all required permissions and obtaining occupation certificate for handing over possession of the tenements to the Purchasers of Tenements.
(ii) To clear all the dues of authorities concerned with respect of plot under development.
(iii) To convey the land with building to the societies and/or condominium or apex body after completion of project as per rules applicable.”

27. At this juncture, it is relevant to refer to certain aspects which have been enumerated in the MoU. The recital in the MoU is as follows:-
“& Whereas ‘YES BANK’ (hereinafter referred to as the ‘SAID BANK’) has principally agreed to grant loan of Rs.85 crores to the Developers for the development of the said Township for which purpose the Developers are required to mortgage the Land and Development of the said Township to the SAID BANK in lieu of which the SAID BANK has agreed to disburse construction related loan which shall be disbursed as per the progress of the project & Whereas as the Development Agreement did not provide for mortgage of the Land of the Owner and for availing the facility of loan the Developer are required to mortgage the entire project the Developer has proposed to pay a lump sum amount of Rs.137 crores to the Owner in lieu of his share in the said Township for which consideration the Owner has agreed to permit the Developer to avail loan facility from the said Bank for the development of the Said Township and to release/transfer his share in the said Township in favour of the Developer.”

28. Clause 13 of the agreement refers to resolution of disputes. We quote the said clause:-
“13. RESOLUTION OF DISPUTES:-
That in case of any difference or dispute between the parties with regard to the meaning of construction of this MoU or regarding any terms of the Development Agreement or with regard to the project undertaken under this MoU or Development agreement to be executed between the parties, the same shall be resolved by arbitration in conformity with the provisions of the Arbitration and Conciliation Act, 1996.”

29. In this context reference to the reliefs prayed for under Section 9 petition gain significance. Prayers (a) and (b) of the paragraph relating to relief sought read as under:-
“(a) pending the hearing and final of the proposed arbitral proceedings and for a period of sixty days after the award therein, the respondent by himself and through his servant and or his agent and/or in any manner, howsoever, be restrained by a temporary order or injunction from entering upon the property bearing Survey No. 1487/1 and 1487/2 at Kasba, Indore, Patwari Halka No.15/2, Tahsil & District – Indore, Madhya Pradesh, and from dealing with or moving the petitioners’ construction machinery on the said property and from disturbing or interfering with the Petitioners possession thereof in any manner;
(b) pending and hearing and final disposal of the proposed arbitral proceedings and for a period of sixty days after the award therein, the Respondent by himself and or through his servants and/or his agents, be restrained by a temporary order of injunction from or in any manner directly or indirectly disposing off, alienating, encumbering or creating third party rights in any manner whatsoever in the property bearing Survey No. 1487/1 and 1487/2 at Kasba, Indore, Patwari Halka No.15/2, Tahsil & District–Indore, Madhya Pradesh, and from disturbing or interfering with the Petitioners possession thereof in any manner.”

30. At this stage, we are obligated to state that the High Court has referred to the correspondences between the parties. It has referred to the letter dated 19.6.2013 in extenso. In the said letter it was mentioned that as the owner of the land had terminated the development agreement and the MoU, he had taken over the entire physical and actual possession of the said land and the developer was called upon to remove its machinery and construction material lying upon the said land. The said letter was replied to vide letter dated 16.7.2013 refuting the fact that the physical possession of the land had been taken over by the land owner and stating that the possession was still with the developer. The Division Bench has extensively reproduced from the petition preferred under Section 9 of the 1996 Act. We think it apt to reproduce the same:-
“10. The Petitioners have shocked to receive letter dated 6 June 2013, from Respondent’s Advocates, informing the Petitioner that the Respondent had terminated the MOU and the Development Agreement with immediate effect and had allegedly taken over the possession of the Township in terms of the MOU. By the said letter, the petitioners were further informed that the Security Deposit of Rs.20 crores stood forfeited. The petitioners were informed that without prejudice to the termination, the respondent made a demand of payment of Rs.71 crores along with interest thereon. A copy of the letter dated 6 June 2013 is annexed and marked Exhibit-F hereto.
xxxxx xxxxx xxxxx
14. The respondent, by Advocates letter dated 30 June 2013 sought to invoke the Arbitration Clause under the Development Agreement and the Memorandum of Understanding. By the said letter, the petitioners were informed that the entire physical and actual possession was allegedly already taken over by the respondent. This is a false statement. The petitioners were further called upon to remove the machinery and construction material. Hereto annexed and marked Exhibit-I is a copy of the respondent’s Advocates letter dated 30 June 2013.
xxxxx xxxxx xxxxx
17. The petitioners submit that they had completed substantial work by completing Building B-1, B-2 and B-3 (where only top slabs are pending), construction of five slabs of Building C-1, commencing digging and footing work of Building A-1. The petitioners’ machinery and labour are at site. The petitioners are in possession of the site. Now, the respondent has suddenly demanded a sum of Rs.71 crores, allegedly due to the respondent, under the MOU dated 8 June 2012. Though not entitled, the respondent has sought to forfeit the security deposit of Rs. 20 crores, in accordance with the MOU.
18. In the circumstances, the petitioners submit that the petitioners are entitled to, pending an adjudication in the proposed Arbitral proceedings and for a period of sixty (60) days after the award therein, for an order of injunction, restraining the respondent by himself or through his servants or agents from entering upon the property, subject matter of the Development Agreement and from dealing with and moving the machinery of the petitioners used in construction activity and from disturbing or interfering with the petitioners possession thereof in any manner.”

31. After discussing the facts in entirety, the Division Bench

has opined thus:-
“... The development agreement also stipulated that the appellant was entitled to possession of the said land and accordingly the respondent, by a separate possession receipt dated 28 February 2008 handed over to the appellant possession of the said land which is the subject matter of the development agreement. Thereafter, the parties entered into a MOU dated 8 June 2012 which inter alia recited that the appellant was to construct the township project consisting of residential and commercial buildings and a club house and further that the respondent would be paid a sum of Rs.137 crores in place of its 40% share under the development agreement. As disputes arose between the parties, the said development agreement and the MOU were terminated by the respondent by its Advocate’s letter dated 6 June 2013 and the respondent invoked arbitration. It is pertinent to note that in paragraph 9 of the said termination letter, the respondent has specifically stated that as on that date (6 June 2013), the respondent had taken over the possession and absolute ownership of the said township including the structures thereon, in accordance with the terms of the MOU. This included the construction put up by the appellant on the said land. In the said letter, at paragraphs 11 and 12, the respondent reiterated that it was the owner of the said land.

32. And thereafter the Division Bench proceeded to analyse the letter dated 30.6.2013 and on that basis observed that:-
“... This letter of the respondent further stated that since the Respondent had terminated the development agreement and MoU, the respondent had taken over the entire physical and actual possession of the said land and in view thereof called upon the Appellant to remove its machinery and construction material from the said land. Again, by its letter dated 16 July, 2013, the Appellant once again denied that the physical possession of the said land had been taken over by the Respondent as alleged in its letters dated 6 June 2013 and 30 June 2013 respectively.”

33. The seminal issue is whether on the factual score which has been exposited, the application filed under Section 9 of the 1996 Act before the High Court of Bombay can be regarded as a money claim. On a studied scrutiny of the agreement and the MoU it is clear as day that the development agreement indubitably had created certain interests in the land in favour of the appellant. The assertions made in the application along with the relief clause when read in entirety and appreciated in a holistic manner, it becomes luminescent that the core dispute pertains to possession of the land, for the appellant claims to be in exclusive possession and the respondent, per contra, has asseverated that it had taken over possession. It can irrefragably be stated that any order passed under Section 9 of the 1996 Act will have the impact on the land. It is difficult to accede to the submission that it will not conceptually fall within the category of “suit for land” as engrafted under Clause 12 of the Letters Patent.

34. It is clearly a dispute with regard to the possession which is evincible from the correspondences and the averments made in the application preferred under Section 9 of the 1996 Act. Thus, there has to be determination as regards possession and impliedly issue of direction for recovery of possession. Hence, the conclusion arrived at by the Division Bench on the basis of the scrutiny of documents that the dispute is embedded with regard to the possession of the land because the fundamental claim pertains to certain constructed space on the land and, therefore, it would conceptually fall within the conception of “suit for land

appearing in Clause 12 of the Letters Patent is unexceptionable.

35. Prayer (a) quoted above seeks restraint by a temporary order or injunction from entering upon the property. It is difficult to accept the submission that it is a money claim and, therefore, the Bombay High Court would also have the territorial jurisdiction and accordingly we unhesitatingly repel the same.

36. Resultantly, we find no substance in the appeal and accordingly the same stands dismissed. There shall be no order as to costs.

............................Prafulla C. Pant, J.

……………………

(2015) 119 (3) CWN (SC) 180

IN THE SUPREME COURT OF INDIA

(BEFORE DIPAK MISRA AND PRAFULLA C. PANT, JJ.)

Ratnesh Kumar Choudhary ...Appellant
Vs.
Indira Gandhi Institute of Medical
Sciences, Patna, Bihar and Others ...Respondent

Civil Appeal No.8662 of 2015; Arising out of S.L.P.(C) No.8450 of 2012; Civil Appellate Jurisdiction; Judgment on: 15.10.2015

A. Constitution of India, Article 226 – probational appointment – appellant made application to the post of Physiotherapist in pursuance of newspaper advertisement – selection committee of the Medical Institute selected him for the post Chest Therapist – subsequently on the report of the Vigilance Department, Government of Bihar, show cause notice was issued - no document was supplied to the appellant despite requests – service was terminated by the appointing authority – High Court in writ jurisdiction quashed the order of termination and directed to reinstate in service with all consequential benefits – Division Bench held that selection committee was wrong and illegal in appointment by changing the category of their own – ex parte enquiry was behind the back of the delinquent - the punitive order of dismissal as passed, cannot be equated with order of termination simpliciter – there is clear violation of principal of natural justice – the constitutional mandate of giving similar treatment and an opportunity, are being violated without having regular enquiry.

Ratio decidendi:-
An ex parte enquiry was behind the back of the delinquent. The punitive order of dismissal as passed cannot be equated with order of termination simpliciter. There is clear violation of principal of natural justice. The constitutional mandate of giving similar treatment and opportunity, are being violated without having regular enquiry.

Observations of the Court:-
In Radhey Shyam Gupta vs. U.P. State Agro Industries
Corporation Ltd. and Another, (1999) 2 SCC 21, the services of the appellant were terminated as he was a probationer. He challenged the order of termination before the Administrative Tribunal, Lucknow, U.P., alleging that though the termination order appeared to be innocuous, it was really punitive in nature, inasmuch as it was based on an ex-parte report of enquiry which indicated that he had accepted the bribe and, therefore, it was not merely the motive, but the very foundation of the order of termination. The tribunal allowed the application of the appellant and quashed the order of termination. The High Court in the writ petition, placing reliance on the decisions rendered in State of U.P. vs. Kaushal Kishore Shukla, (1991) 1 SCC 691, Triveni Shankar Saxena vs. State of U.P., (1992) Supp (1) SCC 524 and State of U.P. vs. Prem Lata Misra, (1994) 4 SCC 189, came to hold that the order of termination had not been founded on any misconduct, but on the other hand, the competent authority had found that the employee was not fit to be continued in service on account of unsatisfactory work and conduct.(para 18)
A three-Judge Bench in Union of India and Others vs. Mahaveer C. Singhvi, (2010) 8 SCC 220, dwelled upon the issue whether the order of discharge of a probationer was simpliciter or punitive, referred to the authority in Dipti Prakash Banerjee vs. Satyendra Nath Bose National Centre for Basic Sciences, (1999) 3 SCC 60 and came to hold thus:-
“It was held by this Court in Dipti Prakash Banerjee case that whether an order of termination of a probationer can be said to be punitive or not depends on whether the allegations which are the cause of the termination are the motive or foundation. It was observed that if findings were arrived at in inquiry as to misconduct, behind the back of the officer or without a regular departmental enquiry, a simple order of termination is to be treated as founded on the allegations and would be bad, but if the enquiry was not held, and no findings were arrived at and the employer was not inclined to conduct an enquiry, but, at the same time, he did not want to continue the employee’s services, it would only be a case of motive and the order of termination of the employee would not be bad.”(para 24)
In Pavanendra Narayan Verma vs. Sanjay Gandhi P.G.I. of Medical Sciences and Another, (2002) 1 SCC 520, wherein a two-Judge Bench struck a discordant note by stating that:-
“Before considering the facts of the case before us one further, seemingly intractable, area relating to the first test needs to be cleared viz. what language in a termination order would amount to a stigma? Generally speaking when a probationer’s appointment is terminated it means that the probationer is unfit for the job, whether by reason of misconduct or ineptitude, whatever the language used in the termination order may be. Although strictly speaking, the stigma is implicit in the termination, a simple termination is not stigmatic. A termination order which explicitly states what is implicit in every order of termination of a probationer’s appointment is also not stigmatic.(para 25)

Held:-
The Division Bench has expressed the view that no departmental enquiry was required to be held as it was only an enquiry to find out the necessary qualification for the post of Chest Therapist. Had the factual score been so, the said analysis would have been treated as correct, but unfortunately the exposition of factual matrix is absolutely different. Under such circumstances, it is extremely difficult to concur with the view expressed by the Division Bench.

B. “Motive” and “Foundation”
The important principles which are deducible on the concept of “motive” and “foundation”, concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. Iffor the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an inquiry is held and it is on the basis of that inquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an inquiry is held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that inquiry, the order would be punitive in nature as the inquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of “motive”. “Motive” is the moving power which impels action for a definite result, or to put it differently, “motive” is that which incites or stimulates a personto do an act. An order terminating the services of an employee is an act done by the employer. What is that factor which impelled the employer to take this action? If it was the factor of general unsuitability of the employee for the post held by him, the action would be upheld in law. If, however, there were allegations of seriousmisconduct against the employee and a preliminaryinquiry is held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regardto other circumstances, would be founded on the allegations of misconduct which werefound to be true in the preliminary inquiry.”(para 23)

List of cases cited:-
Samsher Singh Vs. State of Punjab, (1974) 2 SCC 831 (followed)
Radhey Shyam Gupta Vs. U.P. State Agro Industries Corporation Ltd. and Another, (1999) 2 SCC 21 (referred to)
State of U.P. Vs. Kaushal Kishore Shukla, (1991) 1 SCC 691 (relied on)
Triveni Shankar Saxena Vs. State of U.P., (1992) Supp (1) SCC 524 (relied on)
State of U.P. Vs. Prem Lata Misra, (1994) 4 SCC 189 (relied on)
Parshotam Lal Dhingra Vs. Union of India, AIR 1958 SC 36 (referred to)
State of Bihar Vs. Gopi Kishore Prasad, AIR 1960 SC 689 (referred to)
State of Orissa Vs. Ram Narayan Das, AIR 1961 SC 177 (referred to)
Gujarat Steel Tubes Ltd. Vs. Gujarat Steel Tubes Mazdoor Sabha, (1980) 2 SCC 593 (relied on)
Anoop Jaiswal Vs. Govt. of India, (1984) 2 SCC 369 (referred to)
Nepal Singh Vs. State of U.P., (1980) 3 SCC 288 (referred to)
Commissioner, Food & Civil Supplies Vs. Prakash Chandra Saxena, (1994) 5 SCC 177 (referred to)
Chandra Prakash Shahi Vs. State of U.P. and Others, (2000) 5 SCC 152 (relied on)
Union of India and Others Vs. Mahaveer C. Singhvi, (2010) 8 SCC 220 (relied on)
Dipti Prakash Banerjee Vs. Satyendra Nath Bose National Centre for Basic Sciences, (1999) 3 SCC 60 (referred to)
Pavanendra Narayan Verma Vs. Sanjay Gandhi P.G.I. of Medical Sciences and Another, (2002) 1 SCC 520 (referred to)
State Bank of India and Others Vs. Palak Modi and Another, (2013) 3 SCC 607 (relied on)

The Judgement of the Court was delivered by Dipak Misra, J.:-

1. Leave granted.

2. The appellant, in pursuance of the advertisement published in the daily newspaper “Hindustan” dated 13.08.1998, applied for the post of Physiotherapist under Class-II Post in the Indira Gandhi Institute of Medical Sciences (IGIMS). The selection committee of the institute selected him for the appointment in the post as the Chest Therapist. The screening committee observed that the post of Physiotherapist and Chest Therapist are of similar nature and hence, the post of Chest Therapist may be considered from the applications received for the post of Physiotherapist. The selection committee consisted of Director of the IGIMS, Medical Superintendent and a Government representative from the Health Department, in addition to internal and external experts. The appellant along with other candidates were called for interview vide letter dated 02.12.1998 for the post of Physiotherapist/Chest Therapist.

3. As the facts would exposit, the appellant received the letter of appointment for the post of Chest Therapist on 14.01.1999 which mentioned that he had been selected for appointment to the sanctioned post of Chest Therapist and would be put on probation for a period of two years which could be extended at the discretion of the Director of the Institute. It also contained a condition that the services could be put an end to at any time by giving a month’s notice by either side. It also stipulated certain aspects which pertained to giving of notice and in lieu of notice, payment or deposit of certain amount as the case may be. The appellant joined the post on 20.08.1999.

4. When the appellant was continuing on the post of Chest Therapist, a complaint was received by the Vigilance Department, Government of Bihar on 3.11.2004 relating to the illegal appointment of the appellant on the post of Chest Therapist. The complaint contained that the advertisement for Physiotherapist and Chest Therapist were different because streams are different and the appointment of the appellant was absolutely illegal. In pursuance of the said complaint an enquiry was conducted by the Deputy Superintendent of Police, who submitted a report on 03.11.2004 to the Deputy Inspector General of Police, Bihar, Patna. The reports reflected on various aspects and pointed out that the appointment was illegal. On the basis of the said report the Joint Secretary in the Department of Health, vide order dated 09.03.2005 requested the Director IGIMS to initiate a proceeding for termination of the services of the appellant by giving a show cause notice. On the basis of the said communication the appellant was asked by the Director of IGIMS to show cause within three days as to why on account of illegal appointment his services should not be terminated. The petitioner sent his reply on 20.3.2005 and asked for the copy of the complaint as well as the entire report submitted by the Vigilance Department.

5. Despite the request made by the appellant all the documents were not supplied to him which the appellant considered vital. However, he submitted the reply on 08.04.2005 and on 09.04.2005 the Director IGIMS, terminated his services by stating that his appointment on the post of Chest Therapist was illegal in terms of the investigation done by the Cabinet (Vigilance Department, Bihar) and the explanation furnished by him in pursuance of the show cause notice had been found unsatisfactory.

6. Taking exception to the aforesaid order of termination the appellant invoked the writ jurisdiction of the High Court of Judicature at Patna in CWJC No. 8069 of 2006. The learned Single Judge vide order dated 04.11.2009 quashed the order of termination and directed that appellant should be treated in service with all consequential benefits. The learned Single Judge, as is evident, quashed the order on the bedrock that the appellant was all through kept in the dark as to on what grounds his service had been terminated and further he was not furnished with the necessary documents which formed the part of enquiry conducted bythe Cabinet, Vigilance Department. The learned Single Judge opined that there had been violation of the principles of natural justice in view of the allegations made against the writ petitioner.

7. Being dissatisfied with the order of the learned Single Judge, the Institute and its Board of Governors preferred LPA No. 38 of 2010. It is appropriate to reproduce certain paragraphs from the judgment of the Division Bench:-
“5. The ground of illegality in appointment is based upon the advertisement itself which has been enclosed to the memo of appeal as Annexure – 1. Under the advertisement, eligible candidates were required to apply against various posts including post of Physiotherapist at serial 4 and post of Chest Therapist at serial 5. For the post of Physiotherapist, the essential qualification was degree/diploma in Physiotherapy from a recognized institute whereas for the Chest Therapist it was degree/diploma in Chest Therapy from recognized institute. On account of interview and selection, another person was appointed on the post of Physiotherapist and although the writ petitioner did not have degree/diploma in Chest Therapy he was appointed to the post by relaxing the required essential qualification by the committee. The committee took the view that both the posts involve similar duties and, therefore, degree/diploma in Physiotherapy could be sufficient for appointment to the post of Chest Therapist.

8. In our considered view, the authorities of the Vigilance Department as well as the Institute have subsequently come to a correct finding that such a course of action was not open for the selection committee. If the essential qualification for the post of Chest Therapist was to be lowered down or changed, due advertisement of such change in policy was required to be made so that for the post of Chest Therapist those who had degree/diploma in Physiotherapy could have filed their applications. This was not done by the concerned authorities at the relevant time. The relaxation in the essential qualification thus benefited only the writ petitioner and none else. In such circumstances, it is not possible to hold that the selection and appointment of the writ petitioner was not illegal. The constitutional mandate of giving similar treatment and opportunity to others was clearly violated.* * * * *
8. We are also of the considered view that in a case of illegal appointment there is no scope to condone such appointment on the plea that no fraud has been alleged against the beneficiary of such appointment.” Being of this view the Division Bench allowed the appeal and unsettled the decision rendered by the learned Single Judge.

9. We have heard Mr. Kumar Parimal learned counsel for the appellant and Mr. L.R. Singh learned counsel for the State.

10. Though various contentions were raised by the learned counsel for both the parties, yet ultimately the controversy centred around the issues whether the order of termination passed by the authority is stigmatic or not; and whether there had been violation of principles of natural justice, for no regular enquiry was conducted. Learned counsel for the appellant has drawn our attention to the Vigilance Report dated 03.11.2004 and the show cause notice dated 18.03.2005. In the course of hearing, we had perused the documents in original that are in Hindi, and asked the learned counsel for the parties to file the English translation thereof which has been complied with. The relevant part of the vigilance report dated 03.11.2004 is reproduced below:-
“Shri Ratnesh Kumar Chawdhary appointed illegally on the post of Chest Therapist began to work in Chest Therapist Department. But he was having no experience of working on the post of Chest Therapist, therefore his behaviour with the patients admitted in the hospital was not congenial and correct and he had no knowledge of working, therefore, his Officer In-charge issued warning from time to time and wrote to the Director to take action against him. His work being unsatisfactory, many warnings were issued to him, explanation was called and punishment was given. During investigation his work was found to be totally unsatisfactory and his conduct was not proper. During the inquiry conducted against charged officer, Medical Superintendent (Medicines) wrote in his inquiry report that the written warning has been given to the Chest Therapist by the President and Director of Administrative Officers Union that if he does not make necessary improvement, then his services may be terminated from this Establishment. “As well as the order of punishment of withholding his two annual increments with cumulative effect was passed by I.G.I.M.S. for his indiscipline in the service and warning was issued, if in future any complaint is received then his services may be terminated”. Despite that, there was no improvement in this official. As a result of which, President Administrative body was authorized to constitute an inquiry committee according to Resolution No.71/1047 made in 71st Meeting dated 02.12.2003 of Administrative Body of I.G.I.M.S. Patna. For constituting Special Committee, the proposal was sent to then President, Health Department. 71st Meeting of Administrative Body was organized under the Chairmanship of Hon’ble Dr. Shakil Ahmad, Health Minister in which seven other doctor members in addition to the Director participated. The file of all papers relating to the charged officer was sent in 2003 to then Health Minister, the President of I.G.I.M.S. Patna. In this connection no information as to what action was taken on those papers is not available in I.G.I.M.S., Patna. Director of aforesaid establishment Dr.Deleep Kumar Yadav stated in his statement that the charged officer Shri Ratnesh Kumar Chowdhury was appointed on the post of Chest Therapist by the Selection Committee. Complaints were received against him. Dr.Deleep Kumar Yadav, Director of above establishment, according to his competence, took disciplinary action at this stage against the charged officer. But in connection with illegal appointment, it was not possible to take any action at this stage as his appointment is within the jurisdiction of permanent Selection Committee. He also made it clear that the conduct of charged officer was not correct. As a result of which there was always dispute with his In-charge Dr. Sudhir Kumar. Due to his unlawful conduct, Dr. Sudhir Kumar, Neurologist, I.G.I.M.S. Patna left from there in 2003.”

11. After so narrating, the report proceeded to state thus:-
“In this way, during inquiry it becomes clear that necessary qualifications and standards were prescribed for the post of Physiotherapist and for the post of Chest Therapist in the advertisement published in this connection. It is nowhere marked in the advertisement that if the application of separate eligibility holders against both aforesaid posts are not available, then any one from the said candidates in the Panel List shall be taken into consideration for the appointment. Despite that, the appointment of the applicant for the post at Serial No.04 in the advertisement was made on the post given at serial No.05, whereas the applicant neither applied for the post, nor he had eligibility for that post. Without making any comment by the Selection Committee, Shri Ratnesh Kumar Chowdhary was appointed on the post of Chest Therapist and to prove this illegal appointment as genuine appointment, the Establishment issued the appointment letter in which it is mentioned that the appointment of the applicant is being made on the post, applied for, by the applicant, on the post of Chest Therapist, which was absolutely wrong. Therefore, this illegal appointment may be cancelled. The information of which may be given to the Administrative Department of the charged employee.”

12. On the basis of the aforesaid report, a show cause notice was issued. The said show cause notice issued to the appellant on 18th March, 2005, reads as follows:-
“Your appointment was made on the post of Chest Therapist in this establishment. Shri Tarkeshwar Singh, Member Bihar Legislative Assembly made some allegations in his complaint letter. Those allegations were examined by Cabinet Vigilance Department. According to the report filed under Letter No. 724/G.O. dated 24.12.2004 of Cabinet Vigilance Department,
Investigation Bureau, Bihar, Patna, your appointment was found illegal/wrong. Report of Cabinet Vigilance Department was considered by the Health Department and decision was taken to terminate your service. The department issued direction to take action to terminate your service vide Letter No.1/9/2005/78(1)Swa., Dated 08.03.2005. Therefore submit your explanation within three days to the undersigned as to why your appointment which is illegal/wrong be not terminated from the Institute.”

13. As has been stated earlier a reply was filed by the appellant which was not accepted and, eventually, he was served with the order of dismissal. At this juncture, it is necessary to refer to the counter affidavit filed in the present case. In paragraph 3 of the counter affidavit, the respondents have stated certain facts. The relevant part of the said assertion is reproduced below:-
“That even after being appointment, while serving during the period of probation, Petitioner had misbehaved with his seniors and he did not obey the seniors. He also quarrelled with his colleagues for which many complaints were received against him. However during probation period, petitioner was given warning and on 29.1.2001 his yearly increments was withheld. Petitioner continued to work on probation till the date of his dismissal and he was never made permanent.”

14. In the counter affidavit a reference has been made to the report submitted against the appellant by the Cabinet (Vigilance) Department, the relevant part of which we have quoted hereinbefore.

15. It is submitted by the learned counsel for the appellant that on a perusal of the report along with allegations made in the counter affidavit, it is graphically clear that the termination of the appellant is not a termination simpliciter. The report comments on his behaviour, knowledge of working, his conduct, his mis-behaviour, imposition of earlier punishment and disobedience shown by him to his seniors. It is urged by the learned counsel that though the appellant was a probationer and his appointment has been styled as illegal on the ground that he did not possess the requisite qualification for the post of Chest Therapist, yet under the guise of passing an order of termination simpliciter, the authorities have, in many a way, attached stigma which makes the order absolutely stigmatic. It is canvassed by him that even if the order demonstrably appears to be an innocuous order, the court in the in the obtaining factual score should lift the veil or peep through the veil to perceive its true character.

16. The aforesaid submissions have been controverted by the learned counsel for the respondents.

17. To appreciate the controversy, we may refer to certain authorities which are pertinent to appreciate the controversy. In Samsher Singh v. State of Punjab, (1974) 2 SCC 831, a seven-Judge Bench was considering the legal propriety of the discharge of two judicial officers of the Punjab Judicial Service who were serving as probationers. The majority laying down the law stated that:-
“No abstract proposition can be laid down that where the services of a probationer are terminated without saying anything more in the order of termination than that the services are terminated it can never amount to a punishment in the facts and circumstances of the case. If a probationer is discharged on the ground of misconduct or inefficiency or for similar reason without a proper enquiry and without his getting a reasonable opportunity of showing cause against his discharge it may in a given case amount to removal from service within the meaning of Article 311(2) of the Constitution.” And again:-
“The form of the order is not decisive as to whether the order is by way of punishment. Even an innocuously worded order terminating the service may in the facts and circumstances of the case establish that an enquiry into allegations of serious and grave character of misconduct involving stigma has been made in infraction of the provision of Article 311. In such a case the simplicity of the form of the order will not give any sanctity. That is exactly what has happened in the case of Ishwar Chand Agarwal. The order of termination is illegal and must be set aside.”

18. In Radhey Shyam Gupta vs. U.P. State Agro Industries Corporation Ltd. and Another, (1999) 2 SCC 21, the services of the appellant were terminated as he was a probationer. He challenged the order of termination before the Administrative Tribunal, Lucknow, U.P., alleging that though the termination order appeared to be innocuous, it was really punitive in nature, inasmuch as it was based on an ex-parte report of enquiry which indicated that he had accepted the bribe and, therefore, it was not merely the motive, but the very foundation of the order of termination. The tribunal allowed the application of the appellant and quashed the order of termination. The High Court in the writ petition, placing reliance on the decisions rendered in State of U.P. vs. Kaushal Kishore Shukla, (1991) 1 SCC 691, Triveni Shankar Saxena vs. State of U.P., (1992) Supp (1) SCC 524 and State of U.P. vs. Prem Lata Misra, (1994) 4 SCC 189, came to hold that the order of termination had not been founded on any misconduct, but on the other hand, the competent authority had found that the employee was not fit to be continued in service on account of unsatisfactory work and conduct. The High Court also observed that even if some ex-parte preliminary enquiry had been conducted or a disciplinary enquiry was initiated to inquire into some misconduct, it was the option of the competent authority to withdraw the disciplinary proceedings and take the action of termination of service under the terms of appointment and the same would not be by way of punishment. This Court after taking note of the submissions of the learned counsel for the parties posed the following question:-
“Whether the report of Shri Ram Pal Singh was a preliminary report and whether it was the motive or the foundation for the termination order and whether it was permissible to go behind the order?”

19. This Court noticed that there are two lines of authorities. In certain cases of temporary servants and probationers, it had taken the view that if the ex-parte enquiry or report is the motive for the termination order, then the termination is not to be called punitive merely because the principles of natural justice have not been followed; and in the other line of decisions, this Court has ruled that if the facts revealed in the enquiry are not themotive but the foundation for the termination of the services of the temporary servant or probationer, it would be punitive and principles of natural justice are bound to be followedand failure to do so would make the order legally unsound. The Court referred to the judgments rendered in Samsher Singh (supra), Parshotam Lal Dhingra vs. Union of India, AIR 1958 SC 36, State of Bihar vs. Gopi Kishore Prasad, AIR 1960 SC 689 and State of Orissa vs. Ram Narayan Das, AIR 1961 SC 177 and, eventually, opined that if there was any difficulty as to what was “motive” or “foundation” even after the Samsher Singh’s case the said doubts were removed in Gujarat Steel Tubes Ltd. vs. Gujarat Steel Tubes Mazdoor Sabha, (1980) 2 SCC 593. The clarification given by the Constitution Bench in the said case, being instructive, the two-Judge Bench reproduced the same, which we think we should do:-
“53. Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover-ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whetherdisclosed or undisclosed. The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is. If, thus scrutinised, the order has a punitive flavour in cause or consequence, it is dismissal. If it falls short of this test, it cannot be called a punishment. To put it slightly differently, a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise. Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature. Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to terminate. Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination, are given and non-injurious terminology is used.
54. On the contrary, even if there is suspicion of misconduct the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with. He may not like to investigate nor take the risk of continuing a dubious servant. Then it is not dismissal but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut-back on his full terminal benefits is found. For, in fact, misconduct is not then the moving factor in the discharge. We need not chase other hypothetical situations here.”

20. On that basis, the Court proceeded to opine thus:-
“In other words, it will be a case of motive if the master, after gathering some prima facie facts, does not really wish to go into their truth but decides merely not to continue a dubious employee. The master does not want to decide or direct a decision about the truth of the allegations. But if he conducts an enquiry only for the purpose of proving the misconduct and the employee is not heard, it is a case where the enquiry is the foundation and the termination will be bad.”

21. After stating the said principle, the Court traced the history and referred to Anoop Jaiswal vs. Govt. of India, (1984) 2 SCC 369, Nepal Singh vs. State of U.P., (1980) 3 SCC 288 and Commissioner, Food & Civil Supplies vs. Prakash Chandra Saxena, (1994) 5 SCC 177 and opined as follows:-
“33. It will be noticed from the above decisions that the termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the officer, as stated by Shah, J. (as he then was) in Ram Narayan Das case. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary enquiry is held because the purpose of a preliminary enquiry is to find out if there is prima facie evidence or material to initiate a regular departmental enquiry. It has been so decided in Champaklal case. The purpose of the preliminary enquiry is not to find out misconduct on the part of the officer and if a termination follows without giving an opportunity, it will not be bad. Even in a case where a regular departmental enquiry is started, a charge-memo issued, reply obtained, and an enquiry officer is appointed if at that point of time, the enquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry officer has not recorded evidence nor given any findings on the charges. That is what is held in Sukh Raj Bahadur case and in Benjamin case. In the latter case, the departmental enquiry was stopped because the employer was not sure of establishing the guilt of the employee. In all these cases, the allegations against the employee merely raised a cloud on his conduct and as pointed by KrishnaIyer, J. in Gujarat Steel Tubes case the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive.
34. But in cases where the termination is preceded by an enquiry and evidence is received and findings as to misconduct of a definitive nature are arrived at behind the back of the officer and where on the basis of such a report, the termination order is issued, such an order will be violative of the principles of natural justice inasmuch as the purpose of the enquiry is to find out the truth of the allegations with a view to punish him and not merely to gather evidence for a future regular departmental enquiry. In such cases, the termination is to be treated as based or founded upon misconduct and will be punitive. These are obviously not cases where the employer feels that there is a mere cloud against the employee’s conduct but are cases where the employer has virtually accepted the definitive and clear findings of the enquiry officer, which are all arrived at behind the back of the employee even though such acceptance of findings is not recorded in the order of termination. That is why the misconduct is the foundation and not merely the motive in such cases.”

22. Appreciating the facts of the said case, the Court set aside the judgment of the High Court and restored that of the tribunal by holding that the order was punitive in nature.

23. In Chandra Prakash Shahi vs. State of U.P. and Others, (2000) 5 SCC 152 after addressing the history pertaining to “motive” and “foundation” and referring to series of decisions, a two-Judge Bench had held that:-
“28. The important principles which are deducible on the concept of “motive” and “foundation”, concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. If for the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an inquiry is held and it is on the basis of that inquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an inquiry is held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that inquiry, the order would be punitive in nature as the inquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of “motive”.
29. “Motive” is the moving power which impels action for a definite result, or to put it differently, “motive” is that which incites or stimulates a person to do an act. An order terminating the services of an employee is an act done by the employer. What is that factor which impelled the employer to take this action? If it was the factor of general unsuitability of the employee for the post held by him, the action would be upheld in law. If, however, there were allegations of serious misconduct against the employee and a preliminary inquiry is held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regard to other circumstances, would be founded on the allegations of misconduct which were found to be true in the preliminary inquiry.”

24. A three-Judge Bench in Union of India and Others vs. Mahaveer C. Singhvi, (2010) 8 SCC 220, dwelled upon the issue whether the order of discharge of a probationer was simpliciter or punitive, referred to the authority in Dipti Prakash Banerjee vs. Satyendra Nath Bose National Centre for Basic Sciences, (1999) 3 SCC 60 and came to hold thus:-
“It was held by this Court in Dipti Prakash Banerjee case that whether an order of termination of a probationer can be said to be punitive or not depends on whether the allegations which are the cause of the termination are the motive or foundation. It was observed that if findings were arrived at in inquiry as to misconduct, behind the back of the officer or without a regular departmental enquiry, a simple order of termination is to be treated as founded on the allegations and would be bad, but if the enquiry was not held, and no findings were arrived at and the employer was not inclined to conduct an enquiry, but, at the same time, he did not want to continue the employee’s services, it would only be a case of motive and the order of termination of the employee would not be bad.”

25. At this juncture, we must refer to the decision rendered in Pavanendra Narayan Verma vs. Sanjay Gandhi P.G.I. of Medical Sciences and Another, (2002) 1 SCC 520, wherein a two-Judge Bench struck a discordant note by stating that:-
“Before considering the facts of the case before us one further, seemingly intractable, area relating to the first test needs to be cleared viz. what language in a termination order would amount to a stigma? Generally speaking when a probationer’s appointment is terminated it means that the probationer is unfit for the job, whether by reason of misconduct or ineptitude, whatever the language used in the termination order may be. Although strictly speaking, the stigma is implicit in the termination, a simple termination is not stigmatic. A termination order which explicitly states what is implicit in every order of termination of a probationer’s appointment is also not stigmatic. The decisions cited by the parties and noted by us earlier, also do not hold so. In order to amount to a stigma, the order must be in a language which imputes something over and above mere unsuitability for the job.”

26. The said decision has been discussed at length in State Bank of India and Others vs. Palak Modi and Another, (2013) 3 SCC 607 and, eventually, commenting on the same, the Court ruled thus:-
“The proposition laid down in none of the five judgments relied upon by the learned counsel for the appellants is of any assistance to their cause, which were decided on their own facts. We may also add that the abstract proposition laid down in para 29 in Pavanendra Narayan Verma v. Sanjay Gandhi PGI of Medical Sciences is not only contrary to the Constitution Bench judgment in Samsher Singh v. State of Punjab, but a large number of other judgments—State of Bihar v. Shiva Bhikshuk Mishra, Gujarat Steel Tubes Ltd. v. Mazdoor Sabha and Anoop Jaiswal v. Govt. of India to which reference has been made by us and to which attention of the two-Judge Bench does not appear to have been drawn. Therefore, the said proposition must be read as confined to the facts of that case and cannot be relied upon for taking the view that a simple order of termination of service can never be declared as punitive even though it may be founded on serious allegation of misconduct or misdemeanour on the part of the employee.” We respectfully agree with the view expressed herein-above.

27. In Palak Modi’s case, the ratio that has been laid down by the two-Judge Bench is to the following effect:-
“The ratio of the above noted judgments is that a probationer has no right to hold the post and his service can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post held by him. If the competent authority holds an inquiry for judging the suitability of the probationer or for his further continuance in service or for confirmation and such inquiry is the basis for taking decision to terminate his service, then the action of the competent authority cannot be castigated as punitive. However, if the allegation of misconduct constitutes the foundation of the action taken, the ultimate decision taken by the competent authority can be nullified on the ground of violation of the rules of natural justice.

28. In the facts of the case, the Court proceeded to state that there is a marked distinction between the concepts of satisfactory completion of probation and successful passing of the training/test held during or at the end of the period of probation, which are sine qua non for confirmation of a probationer and the Bank’s right to punish a probationer for any defined misconduct, misbehaviour or misdemeanour. In a given case, the competent authority may, while deciding the issue of suitability of the probationer to be confirmed, ignore the act(s) of misconduct and terminate his service without casting any aspersion or stigma which may adversely affect his future prospects but, if the misconduct/misdemeanour constitutes the basis of the final decision taken by the competent authority to dispense with the service of the probationer albeit by a non-stigmatic order, the Court can lift the veil and declare that in the garb of termination simpliciter, the employer has punished the employee for an act of misconduct.

29. In the case at hand, it is clear as crystal that on the basis of a complaint made by a member of the Legislative Assembly, an enquiry was directed to be held. It has been innocuously stated that the complaint was relating to illegal selection on the ground that the appellant did not possess the requisite qualification and was appointed to the post of Chest Therapist. The report that was submitted by the Cabinet (Vigilance) Department eloquently states about the conduct and character of the appellant. The stand taken in the counter affidavit indicates about the behaviour of the appellant. It is also noticeable that the authorities after issuing the notice to show cause and obtaining a reply from the delinquent employee did not supply the documents. Be that as it may, no regular enquiry was held and he was visited with the punishment of dismissal. It is well settled in law, if an ex parte enquiry is held behind the back of the delinquent employee and there are stigmatic remarks that would constitute foundation and not the motive. Therefore, when the enquiry commenced and thereafter without framing of charges or without holding an enquiry the delinquent employee was dismissed, definitely, there is clear violation of principles of natural justice. It cannot be equated with a situation of dropping of the disciplinary proceedings and passing an order of termination simpliciter. In that event it would have been motive and could not have travelled to the realm of the foundation. We may hasten to add that had the appellant would have been visited with minor punishment the matter possibly would have been totally different. That is not the case. It is also not the case that he was terminated solely on the ground of earlier punishment. In fact, he continued in service thereafter. As the report would reflect that there are many an allegation subsequent to the imposition of punishment relating to his conduct, misbehaviour and disobedience.

30. The Vigilance Department, in fact, had conducted an enquiry behind the back of the appellant. The stigma has been cast in view of the report received by the Central Vigilance Commission which was ex parte and when that was put to the delinquent employee, holding of a regular enquiry was imperative. It was not an enquiry only to find out that he did not possess the requisite qualification. Had that been so, the matter would have been altogether different. The allegations in the report of the Vigilance Department pertain to his misbehaviour, conduct and his dealing with the officers and the same also gets accentuated by the stand taken in the counter affidavit. Thus, by no stretch of imagination it can be accepted that it is termination simpliciter. The Division Bench has expressed the view that no departmental enquiry was required to be held as it was only an enquiry to find out the necessary qualification for the post of Chest Therapist. Had the factual score been so, the said analysis would have been treated as correct, but unfortunately the exposition of factual matrix is absolutely different. Under such circumstances, it is extremely difficult to concur with the view expressed by the Division Bench.

31. Consequently, the appeal is allowed and the judgment and order passed by the Division Bench of the High Court is set aside and that of the learned Single Judge is upheld, though on different grounds.

32. Accordingly, it is directed that the appellant be reinstated in service within a period of six weeks and he shall be entitled to 50% towards his salary which shall be paid to him within the said period. In the facts and circumstances, there shall be no order as to costs.

...........................Prafulla C. Pant, J.

………………..

(2015) 119 (3) CWN (SC) 205

IN THE SUPREME COURT OF INDIA

(BEFORE ADARSH KUMAR GOEL AND ANIL
R. DAVE, JJ.)

Prakash & Ors. …Appellants
Vs.
Phulavati & Ors. ...Respondents

Civil Appeal No.7217 of 2013 with SLP (C) nos.21814 of 2008, 18744 of 2010, 28702-28703 of 2010, 28471 of 2011, 4217-4218 of 2012, 1299-1300 of 2013, 17577-17578 of 2013, 19816 of 2014, 5619 of 2015, 3805 of 2008, 9390 of 2015, 5680 of 2015, 35209 of 2011 and 15557-15558 of 2015 and 15560 of 2015; Civil Appellate Jurisdiction; Judgment on: 16.10.2015

Hindu Succession (Amendment) Act, 2005; Hindu Succession Act, 1956, Section 6 – partition suit was filed by female descendant for her share of interest to the coparcenary property after the death of plaintiff’s father -

the notional partition took place and shares of the heirs were crystallized and vested on that day (1998) – the rights under the amendment are applicable to daughters of living coparceners as on September, 2005 irrespective of when such daughter was born - in absence of expressed provision such vested right could not be taken away by subsequent amendment – an amendment dealing with a substantive right is prospective and does not affect the vested rights – section 6(1) and 6(5) of Hindu Succession Act, 1956 clearly intends to exclude the transaction which took place prior to amendment – partition which was taken place before amendment will remain unaffected – the partition was pre-existing right and did not create retrospective right of amendment - plaintiff was entitled to inherit the coparcenary property equal to her brothers on the Joint Hindu Property (HUF) prospectively after Amendment Act, 2005.

Ratio decidendi:-
The partition which was taken place before amendment will remain unaffected. The partition was pre-existing right and did not create retrospective right of Hindu Succession (Amendment) Act, 2005. The rights under the amendment are applicable to daughters of living coparceners as on September, 2005 irrespective of when such daughter was born.

Observations of the Court:-
That in absence of express provision or implied intention to the contrary, an amendment dealing with a substantive right is prospective and does not affect the vested rights, Shyam Sunder vs. Ram Kumar, (2001) 8 SCC 24, Paras 22 to 27. If such a coparcener had died prior to the commencement of the Amendment Act, succession opens out on the date of the death as per the prevailing provision of the succession law and the rights of the heirs get crystalised even if partition by metes and bounds does not take place.(para 14)
The text of the amendment itself clearly provides that the right conferred on a ‘daughter of a coparcener’ is ‘on and from the commencement of Hindu Succession (Amendment) Act, 2005’. Section 6(3) talks of death after the amendment for its applicability. In view of plain language of the statute, there is no scope for a different interpretation than the one suggested by the text of the amendment. An amendment of a substantive provision is always prospective unless either expressly or by necessary intendment it is retrospective, Shyam Sunder vs. Ram Kumar (2001) 8 SCC 24, Paras 22 to 27. In the present case, there is neither any express provision for giving retrospective effect to the amended provision nor necessary intendment to that effect. Requirement of partition being registered can have no application to statutory notional partition on opening of succession as per un-amended provision, having regard to nature of such partition which is by operation of law. The intent and effect of the Amendment will be considered a little later. On this finding, the view of the High Court cannot be sustained.(para 17)
In this background, we find that the proviso to Section 6(1) and sub-section (5) of Section 6 clearly intend to exclude the transactions referred to therein which may have taken place prior to 20th December, 2004 on which date the Bill was introduced. Explanation cannot permit reopening of partitions which were valid when affected. Object of giving finality to transactions prior to 20th December, 2004 is not to make the main provision retrospective in any manner.(para 22)
Accordingly, we hold that the rights under the amendment are applicable to living daughters of living coparceners as on 9th September, 2005 irrespective of when such daughters are born. Disposition or alienation including partitions which may have taken place before 20th December, 2004 as per law applicable prior to the said date will remain unaffected. Any transaction of partition effected thereafter will be governed by the Explanation.(para 23)

Held:-
On above interpretation, Civil Appeal No.7217 of 2013 is allowed. The order of the High Court is set aside. The matter is remanded to the High Court for a fresh decision in accordance with law.

Advocates who appeared in this Case:-
For Appellant(s): Mr. Anil C. Nishant, Mr. S.N. Bhat, Mr. A.K. Joseph, Adv., Mrs. Sudha Gupta, Mrs. S. Usha Reddy, Mr. Nanda Kishore, Mr. P.R.Kovilan, Ms. Geetha Kovilan, Mr. Shanth Kumar V. Mahale, Mr. Amith J., Mr. Rajesh Mahale, Mr. Raghavendra S. Srivatsa, Mr. Charudatta Mohindrakar, Mr. A. Selvin Raja, Mr. Aniruddha P. Mayee, Mr. P.R. Ramasesh, Mr. Ankolekar Gurudatta, Mr. K.N. Rai, Mrs. Vaijayanthi Girish, Mr. G. Balaji
For Respondent(s): Mr. Rauf Rahim, Mr. Sumeet Lall, Mr. Balaji Srinivasan, Mr. Mayank Kshirsagar, Ms. Srishti Govil, Ms. Vaishnavi Subrahmanyam, Mr. Tushar Singh, Mr. Virendra Sharma, Mr. Manjunath Meled, Mr. Vijaylaxmi, Mr. Anil Kumar, Mr. Somiran Sharma, Mr. B. Subrahmanya Prasad, Mr. Anirudh Sanganeria, Mr. Chinmay Deshpande, Mr. Amjid Maqbool, Mr. Shashibhushan P. Adgaonkar, Mr. T. Mahipal, Mr. G.N. Reddy, Mr. Rajinder Mathur, Mr. Shankar Divate

List of cases cited:-
Phulavati Vs. Prakash, AIR 2011 Kar. 78 (relied on)
M. Prithviraj Vs. Neelamma N., ILR 2009 Kar. 3612 (relied on)
G.Sekar Vs. Geetha and others, (2009) 6 SCC 99 (referred to)
Shyam Sunder Vs. Ram Kumar, (2001) 8 SCC 24 (referred to)
RBI Vs. Peerless, (1987) 1 SCC 424 (relied on)
Kehar Singh Vs. State, (1988) 3 SCC 609 (relied on)
District Mining Officer Vs. Tata Iron and Steel Co., (2001) 7 SCC 358 (relied on)
S. Sundaram Pillai Vs. R. Pattabiraman, (1985) 1 SCC 591 (relied on)
Keshavji Ravji & Co. Vs. CIT (1990) 2 SCC 231 (referred to)
Prema Vs. Nanje Gowda, (2011) 6 SCC 462 (relied on)
Ganduri Koteshwaramma Vs. Chakiri Yanadi, (2011) 9 SCC 788 (referred to)
V.K. Surendra Vs. V.K. Thimmaiah, (2013) 10 SCC 211 (referred to)
Ram Sarup Vs. Munshi, (1963) 3 SCR 858 (referred to)
Dayawati Vs. Inderjit, (1966) 3 SCR 275 (referred to)
Amarjit Kaur Vs. Pritam Singh, (1974) 2 SCC 363 (referred to)
Lakshmi Narayan Guin Vs. Niranjan Modak, (1985) 1 SCC 270 (referred to)
S.Sai Reddy Vs. S. Narayana Reddy, (1991) 3 SCC 647 (referred to)
State of Maharashtra Vs. Narayan Rao, (1985) 2 SCC 321 (referred to)
State of Rajasthan Vs. Mangilal Pindwal, (1996) 5 SCC 60 (referred to)
West U.P. Sugar Mills Asson. Vs. State of U.P., (2002) 2 SCC 645 (relied on)
Sheela Devi Vs. Lal Chand, (2006) 8 SCC 581 (relied on)
Bagirathi Vs. S. Manivanan, AIR 2005 Mad 250 (DB) (relied on)
Badrinarayan Shankar Bhandari Vs. Ompraskash Shankar Bhandari, AIR 2014, BOM 151 (relied on)
Gurupad Khandappa Magdum Vs. Hirabai Khandappa Magdum, (1978) 3 SCC 383 (referred to)
Shyama Devi Vs. Manju Shukla, (1994) 6 SCC 342 (referred to)
Anar Devi Vs. Parmeshwari Devi, (2006) 8 SCC 656 (referred to)
Vaishali Satish Ganorkar Vs. Satish Keshaorao Ganorkar, AIR 2012, BOM 101 (relied on)
Kale Vs. Dy. Director of Consolidation, (1976) 3 SCC 119 (referred to)
Digambar Adhar Patil Vs. Devram Girdhar Patil, (1995) Supp. 2 SCC 428 (referred to)
Santosh Hazari Vs. Purushottam Tiwari, (2001) 3 SCC 179 (referred to)
Kannaiyan Vs. The Assistant Collector of Central Excise, 1969 (2) MLJ 277 (referred to)
C.I.T. Gujarat Vs. Keshavlal Lallubhai Patel, (1965) 2 SCR 100 (referred to)
Umayal Achi Vs. Lakshmi Achi, AIR 1945 FC 25 (referred to)
Shivappa Laxman Vs. Yellawa Shivappa Shivagannavar, AIR 1954 BOM 47 (referred to)
Ahmedabad Women Action Group (AWAG) Vs. Union of India, (1997) 3 SCC 573 (discussed)
Sarla Mudgal Vs. Union of India (1995) 3 SCC 635 (referred to)
Madhu Kishwar Vs. State of Bihar (1996 (5) SCC 125 (referred to)
Danial Latifi Vs. Union of India, (2001) 7 SCC 740 (referred to)
Javed Vs. State of Haryana, (2003) 8 SCC 369 (referred to)
John Vallamattom Vs. UOI, (2003) 6 SCC 611 (referred to)
Charu Khurana Vs. UOI, (2015) 1 SCC 192 (referred to)

The Judgement of the Court was delivered by Adarsh Kumar Goel, J.:-

1. The only issue which has been raised in this batch of matters is whether Hindu Succession (Amendment) Act, 2005 (‘the Amendment Act’) will have retrospective effect. In the impugned judgment (reported in AIR 2011 Kar. 78 Phulavati vs. Prakash), plea of retrospectively has been upheld in favour of the respondents by which the appellants are aggrieved.

2. Connected matters have been entertained in this Court mainly on account of the said legal issue particularly when there are said to be differing views of High Courts which makes it necessary that the issue is decided by this Court. It is not necessary to go into the facts of the individual case or the correctness of the findings recorded by the courts below on various other issues. It was made clear during the hearing that after deciding the legal issue, all other aspects may be decided separately in the light of the judgment of this Court.

3. Only for the purpose of deciding the above legal question, we refer to the brief facts in Civil Appeal No.7217 of 2013. The respondent-plaintiff, Phulavati filed suit being O.S. No.12/1992 before Additional Civil Judge (Senior Division), Belgaum for partition and separate possession to the extent of 1/7th share in the suit properties in Schedule ‘A’ to ‘G’ except property bearing CTS No.3241 mentioned in Schedule ‘A’ in which the share sought was 1/28th.

4. According to the case of the plaintiff, the suit properties were acquired by her late father Yeshwanth Chandrakant Upadhye by inheritance from his adoptive mother Smt. Sunanda Bai. After the death of her father on 18th February, 1988, she acquired the share in the property as claimed.

5. The suit was contested mainly with the plea that the plaintiff could claim share only in the self-acquired property of her deceased father and not in the entire property. During pendency of the suit, the plaintiff amended the plaint so as to claim share as per the Amended Act 39 of 2005. The trial court partly decreed the suit to the extent of 1/28th share in certain properties on the basis of notional partition on the death of her father and in some of the items of property, no share was given, while 1/7th share was given in some other properties as mentioned in detail in the judgment of the trial court.
6. The respondent-plaintiff preferred first appeal before the High Court with the grievance that the plaintiff became coparcener under the Amendment Act 39 of 2005 and was entitled to inherit the coparcenary property equal to her brothers, apart from contentions based on individual claims in certain items of property.

7. The stand of the defendants-appellants was that the plaintiff could not claim any share in self-acquired property of the members of the joint family and that the claim of the plaintiff had to be dealt with only under Section 6 of the Hindu Succession Act, 1956 as it stood prior to the amendment by Act 39 of 2005. The defendants relied upon a division bench judgment of the High Court in M. Prithviraj vs. Neelamma N., ILR 2009 Kar. 3612 laying down that if father of a plaintiff had died prior to commencement of Act 39 of 2005, the amended provision could not apply. It was only the law applicable on the date of opening of succession which was to apply.

8. The High Court framed following question for consideration on this aspect:
“(ii) Whether the plaintiff is entitled to a share in terms of Section 6 of the Hindu Succession Act as amended by Act No.39 of 2005?”

9. It was held that the amendment was applicable to pending proceedings even if it is taken to be prospective. The High Court held that:
“61. The law in this regard is too well settled in terms of the judgment of the Supreme Court in the case of G. Sekar Vs. Geetha and others reported in (2009) 6 SCC 99. Any development of law inevitably applies to a pending proceeding and in fact it is not even to be taken as a retrospective applicability of the law but only the law as it stands on the day being made applicable.
62. The suit, no doubt, might have been instituted in the year 1992 and even assuming that it was four years after the demise of Yeshwanth Chandrakant Upadhye, the position so far as the parties are concerned who are all members of the joint family, in terms of Section 6 as amended by Act No.39 of 2005 is that a female member is, by a fiction of law created in terms of the amended provision also becomes a coparcener and has a right in joint family property by birth. They are also sharer members of the coparcenary property at par with all male members. When a partition takes place, coparceners succeed to the property in equal measure. Such is the legal position in terms of Section 6 of the Hindu Succession Act as amended by Act No.39 of 2005 and as declared by the Supreme Court in the case of G.S. Sekar (supra). The only exception carved out to the applicability and operation of Section 6 of the Hindu Succession Act as amended by Act No.39 of 2005 being a situation or a factual position where there was a partition which had been effected by a registered partition deed or by a decree of the court which has attained finality prior to 20.12.2004 in terms of sub-section (5) to Section 6.
63. In the present case such being not the factual position the exception available under sub-section (5) to Section 6 cannot be called in aid by the defendants and therefore, the liability in terms of the amended provision operates. It is not necessary for us to multiply the judgment by going into details or discussing other judgments referred to and relied upon by the learned counsel for the parties at the Bar as one judgment of the Supreme Court if clinches the issue on the point, it is good enough for us, as a binding authority to apply that law and dispose of the case as declared in that judgment.”

10. The respondent-plaintiff was accordingly held entitled to 1/7th share in all items in Schedules ‘A’ to ‘D’. In respect of Schedule ‘F’, first item was given up by the plaintiff. Out of the other two items, she was held entitled to 1/7th share in Item No.2 and 1/7th share in 40% ownership in Item No.3.

11. The defendants-appellants have questioned the judgment and order of the High Court with the contention that the amended provision of Section 6 has no application in the present case. Father of the plaintiff died on 18th February, 1988 and was thus, not a coparcener on the date of commencement of the Amendment Act. The plaintiff could not claim to be “the daughter of a coparcener” at the time of commencement of the Act which was the necessary condition for claiming the benefit. On the death of plaintiff’s father on 18th February, 1988, notional partition took place and shares of the heirs were crystallized which created vested right in the parties. Such vested right could not have been taken away by a subsequent amendment in absence of express provision or necessary intendment to that effect. Moreover, the amending provision itself was expressly applicable “on and from” the commencement of the Amendment Act, i.e., 9th September, 2005. The High Court held that even if the provision was prospective, it could certainly apply to pending proceedings as has been held in some decisions of this Court. It is pointed out that the amendment could apply to pending proceedings, only if the amendment was applicable at all.

12. Learned counsel for the respondents would support the view taken by the High Court.

13. We have heard learned counsel for the parties in the present appeal as well as in connected matters for the rival viewpoints which will be noticed hereinafter.

14. The contention raised on behalf of the appellants and other learned counsel supporting the said view is that the 2005 Amendment was not applicable to the claim of a daughter when her father who was a coparcener in the joint Hindu family died prior to 9th September, 2005. This submission is based on the plain language of the statute and the established principle that in absence of express provision or implied intention to the contrary, an amendment dealing with a substantive right is prospective and does not affect the vested rights, Shyam Sunder vs. Ram Kumar, (2001) 8 SCC 24, Paras 22 to 27. If such a coparcener had died prior to the commencement of the Amendment Act, succession opens out on the date of the death as per the prevailing provision of the succession law and the rights of the heirs get crystalised even if partition by metes and bounds does not take place. It was pointed out that apparently conflicting provision in Explanation to Section 6(5) and the said Section was required to be given harmonious construction with the main provision. The explanation could not be read in conflict with the main provision. Main provision of Section 6(1) confers right of coparcener on a daughter only from commencement of the Act and not for any period prior to that. The proviso to Section 6(1) also applies only where the main provision of Section 6(5) applies. Since Section 6(5) applies to partition affected after 20th December, 2004, the said proviso and the Explanation also applies only when Section 6(1) applies. It is also submitted that the Explanation was merely a rule of evidence and not a substantive provision determining the rights of the parties. Date of a daughter becoming coparcener is on and from the commencement of the Act. Partitions effected before 20th December, 2004 remain unaffected as expressly provided. The Explanation defines partition, as partition made by a registered deed or affected by decree of a court. Its effect is not to wipe out a legal and valid partition prior to the said date, but to place burden of proof of genuineness of such partition on the party alleging it. In any case, statutory notional partition remains valid and effective.

15. On the contrary, stand on behalf of the respondents is that the amendment being piece of social legislation to remove discrimination against women in the light of 174th Report of the Law Commission, the amendment should be read as being retrospective as interpreted by the High Court in the impugned judgment. A daughter acquired right by birth and even if her father, who was a coparcener, had died prior to coming into force of the amendment, the share of the parties were required to be redefined. It was submitted that any partition which may have taken place even prior to 20th December, 2004 was liable to be ignored unless it was by a registered deed of partition or by a decree of the Court. If no registered partition had taken place, share of the daughter will stand enhanced by virtue of the amendment.

16. We have given due consideration to the rival submissions. We may refer to the provision of Section 6 of the Hindu Succession Act as it stood prior to the 2005 Amendment and as amended:
Section 6 of the Hindu Succession Act
6. Devolution of interest of coparcenary property. When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act:
PROVIDED that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship.
Explanation I: For the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
Explanation 2: Nothing contained in the proviso to this section shall be construed as enabling a person who has separated himself from the coparcenary before the death of the deceased or any of his heirs to claim on intestacy a share in the interest referred to therein.
Section 6 on and from the commencement of the Hindu Succession (Amendment) Act, 2005
6. Devolution of interest in coparcenary property.-
(1) On and from the commencement of the Hindu Succession (Amendment) Act, 2005, in a Joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,-
(a) by birth become a coparcener in her own right in the same manner as the son;
(b) have the same rights in the coparcenary property as she would had if she had been a son;
(c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener:
Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.
(2) Any property to which a female Hindu becomes entitled by virtue of sub-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act, or any other law for the time being in force, as property capable of being disposed of by her by testamentary disposition.
(3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,-
(a) the daughter is allotted the same share as is allotted to a son;
(b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such predeceased son or of such pre-deceased daughter; and
(c) the share of the pre-deceased child of a pre-deceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceaseddaughter, as the case may be.
Explanation.-For the purposes of this sub-section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
(4) After the commencement of the Hindu Succession (Amendment) Act, 2005, no court shall recognise any right to proceed against a son, grandson or great-grandson for the recovery of any debt due from his father, grandfather or great-grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt:
Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005, nothing contained in this sub-section shall affect-
(a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or
(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.
Explanation.-For the purposes of clause (a), the expression "son", "grandson" or "great-grandson" shall be deemed to refer to the son, grandson or great-grandson, as the case may be, who was born or adopted prior to the commencement of the Hindu Succession (Amendment) Act, 2005.
(5) Nothing contained in this section shall apply to a partition, which has been effected before the 20th day of December, 2004.
Explanation.-For the purposes of this section "partition" means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court.'

17. The text of the amendment itself clearly provides that the right conferred on a ‘daughter of a coparcener’ is ‘on and from the commencement of Hindu Succession (Amendment) Act, 2005’. Section 6(3) talks of death after the amendment for its applicability. In view of plain language of the statute, there is no scope for a different interpretation than the one suggested by the text of the amendment. An amendment of a substantive provision is always prospective unless either expressly or by necessary intendment it is retrospective, Shyam Sunder vs. Ram Kumar (2001) 8 SCC 24, Paras 22 to 27. In the present case, there is neither any express provision for giving retrospective effect to the amended provision nor necessary intendment to that effect. Requirement of partition being registered can have no application to statutory notional partition on opening of succession as per un-amended provision, having regard to nature of such partition which is by operation of law. The intent and effect of the Amendment will be considered a little later. On this finding, the view of the High Court cannot be sustained.

18. Contention of the respondents that the Amendment should be read as retrospective being a piece of social legislation cannot be accepted. Even a social legislation cannot be given retrospective effect unless so provided for or so intended by the legislature. In the present case, the legislature has expressly made the Amendment applicable on and from its commencement and only if death of the coparcener in question is after the Amendment. Thus, no other interpretation is possible in view of express language of the statute. The proviso keeping dispositions or alienations or partitions prior to 20th December, 2004 unaffected can also not lead to the inference that the daughter could be a coparcener prior to the commencement of the Act. The proviso only means that the transactions not covered thereby will not affect the extent of coparcenary property which may be available when the main provision is applicable. Similarly, Explanation has to be read harmoniously with the substantive provision of Section 6(5) by being limited to a transaction of partition effected after 20th December, 2004. Notional partition, by its very nature, is not covered either under proviso or under sub-section 5 or under the Explanation.

19. Interpretation of a provision depends on the text and the context, RBI vs. Peerless (1987) 1 SCC 424, para 33. Normal rule is to read the words of a statute in ordinary sense. In case of ambiguity, rational meaning has to be given, Kehar Singh vs. State (1988) 3 SCC 609. In case of apparent conflict, harmonious meaning to advance the object and intention of legislature has to be given, District Mining Officer vs. Tata Iron and Steel Co. (2001) 7 SCC 358.

20. There have been number of occasions when a proviso or an explanation came up for interpretation. Depending on the text, context and the purpose, different rules of interpretation have been applied, S. Sundaram Pillai vs. R. Pattabiraman (1985) 1 SCC 591.

21. Normal rule is that a proviso except something out of the enactment which would otherwise be within the purview of the enactment but if the text, context or purpose so require a different rule may apply. Similarly, an explanation is to explain the meaning of words of the section but if the language or purpose so require, the explanation can be so interpreted. Rules of interpretation of statutes are useful servants but difficult masters, Keshavji Ravji & Co. vs. CIT (1990) 2 SCC 231. Object of interpretation is to discover the intention of legislature.

22. In this background, we find that the proviso to Section 6(1) and sub-section (5) of Section 6 clearly intend to exclude the transactions referred to therein which may have taken place prior to 20th December, 2004 on which date the Bill was introduced. Explanation cannot permit reopening of partitions which were valid when effected. Object of giving finality to transactions prior to 20th December, 2004 is not to make the main provision retrospective in any manner. The object is that by fake transactions available property at the introduction of the Bill is not taken away and remains available as and when right conferred by the statute becomes available and is to be enforced. Main provision of the Amendment in Section 6(1) and (3) is not in any manner intended to be affected but strengthened in this way. Settled principles governing such transactions relied upon by the appellants are not intended to be done away with for period prior to 20th December, 2004. In no case statutory notional partition even after 20th December, 2004 could be covered by the Explanation or the proviso in question.

23. Accordingly, we hold that the rights under the amendment are applicable to living daughters of living coparceners as on 9th September, 2005 irrespective of when such daughters are born. Disposition or alienation including partitions which may have taken place before 20th December, 2004 as per law applicable prior to the said date will remain unaffected. Any transaction of partition effected there after will be governed by the Explanation.

24. On above interpretation, Civil Appeal No.7217 of 2013 is allowed. The order of the High Court is set aside. The matter is remanded to the High Court for a fresh decision in accordance with law. All other matters may be listed for hearing separately for consideration on 24th November, 2015.

25. The view which we have taken above is consistent with and not in conflict with any of the earlier decisions. We may now refer to the decisions cited by the parties. Main decisions cited by the respondents are: Prema vs. Nanje Gowda, (2011) 6 SCC 462, Ganduri Koteshwaramma vs. Chakiri Yanadi, (2011) 9 SCC 788, V.K. Surendra vs. V.K. Thimmaiah, (2013) 10 SCC 211, para 18, Ram Sarup vs. Munshi, (1963) 3 SCR 858, Dayawati vs. Inderjit, (1966) 3 SCR 275, Amarjit Kaur vs. Pritam Singh, (1974) 2 SCC 363, Lakshmi Narayan Guin vs. Niranjan Modak, (1985) 1 SCC 270, S. Sai Reddy vs. S. Narayana Reddy, (1991) 3 SCC 647 and State of Maharashtra vs. Narayan Rao, (1985) 2 SCC 321, paras 8 to 10. Many of these decisions deal with situations where change in law is held to be applicable to pending proceedings having regard to intention of legislature in a particular law. There is no dispute with the propositions laid down in the said decisions. Question is of application of the said principle in the light of a particular amending law. The decisions relied upon do not apply to the present case to support the stand of the respondents.
25.1. In Ram Sarup case (supra), the question for consideration was of amendment to the Punjab Pre-emption Act, 1930 by Punjab Act 10 of 1960 restricting the pre-emption right. Section 31 inserted by way of amendment prohibited passing of a decree which was inconsistent with the amended provisions. It was held that the amendment was retrospective and had retrospective operation in view of language employed in the said provision.
25.2. In Dayawati case (supra), Section 6 of the Punjab Relief of Indebtedness Act, 1956 expressly gave retrospective effect and made the statute applicable to all pending suits on the commencement of the Act. The Act sought to reduce the rate of interest in certain transactions to give relief against indebtedness to certain specified persons.
25.3. In Lakshmi Narayan Guin case (supra), the question was of applicability of Section 13 of the West Bengal Premises Tenancy Act, 1956 which expressly provided that no order could be passed by the Court contrary to the scheme of the new law.
25.4. In Amarjit Kaur case (supra), Section 3 of the Punjab Pre-emption (Repeal) Act, 1973 was considered which expressly prohibited the Court from passing any pre-emption decree after the commencement of the Act.
25.5. There is also no conflict with the principle laid down in V.K. Surendra case (supra) which deals with a presumption about the nature of a joint family property and burden of proof being on the person claiming such property to be separate. The said decision only lays down a rule of evidence.
25.6. In S. Sai Reddy case (supra), the question for consideration was whether even after a preliminary decree is passed determining the shares in partition, such shares could be varied on account of intervening events at the time of passing of the final decree. In the said case, partition suit was filed by a son against his father in which a preliminary decree was passed determining share of the parties. Before final decree could be passed, there was an amendment in the Hindu Succession Act (vide A.P. Amendment Act, 1986) allowing share to the unmarried daughters. Accordingly, the unmarried daughters applied to the court for their shares which plea was upheld. The said judgment does not deal with the issue involved in the present matter. It was not a case where the coparcener whose daughter claimed right was not alive on the date of the commencement of the Act nor a case where shares of the parties stood already crystalised by operation of law to which the amending law had no application. Same is the position in Prema and Ganduri cases (supra).
25.7. In Narayan Rao case (supra), it was observed that even after notional partition, the joint family continues. The proposition laid down in this judgment is also not helpful in deciding the question involved herein. The text of the Amendment itself shows that the right conferred by the Amendment is on a ‘daughter of a coparcener’ who is member of a coparcenary and alive on commencement of the Act.
25.8.We also do not find any relevance of decisions in State of Rajasthan vs. Mangilal Pindwal, (1996) 5 SCC 60 and West U.P. Sugar Mills Asson. vs. State of U.P., (2002) 2 SCC 645 or other similar decisions for deciding the issue involved herein. The said decisions deal with the effect of repeal of a provision and not the issue of retrospectively with which the Court is concerned in the present case.

26. We now come to the decisions relied upon by the appellants. In M. Prithviraj case (supra), the view taken appears to be consistent with what has been said above. It appears that this was a binding precedent before the Bench of the High Court which passed the impugned order but does not appear to have been referred to in the impugned judgment. Judgments of this Court in Sheela Devi vs. Lal Chand, (2006) 8 SCC 581 and G. Sekar vs. Geetha, (2009) 6 SCC 99, para 30 and the judgment of Madras High Court in Bagirathi vs. S. Manivanan, AIR 2005 Mad 250 (DB) have been relied upon therein. In Sheela Devi case (supra), this Court observed:
21. The Act indisputably would prevail over the old Hindu Law. We may notice that the Parliament, with a view to confer right upon the female heirs, even in relation to the joint family property, enacted Hindu Succession Act, 2005. Such a provision was enacted as far back in 1987 by the State of Andhra Pradesh. The succession having opened in 1989, evidently, the provisions of Amendment Act, 2005 would have no application. Sub-section (1) of Section 6 of the Act governs the law relating to succession on the death of a coparcener in the event the heirs are only male descendants. But, the proviso appended to Sub-section (1) of Section 6 of the Act creates an exception. First son of Babu Lal, viz., Lal Chand, was, thus, a coparcener. Section 6 is exception to the general rules. It was, therefore, obligatory on the part of the respondents-plaintiffs to show that apart from Lal Chand, Sohan Lal will also derive the benefit thereof. So far as the Second son, Sohan Lal is concerned, no evidence has been brought on records to show that he was born prior to coming into force of Hindu Succession Act, 1956.” Full Bench judgment of Bombay High Court in Badrinarayan Shankar Bhandari Vs. Ompraskash Shankar Bhandari, AIR 2014, BOM 151. paras 40-57 also appears to be consistent with the view taken hereinabove.
26.1. In Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum, (1978) 3 SCC 383, paras 6,11 and 13, Shyama Devi vs. Manju Shukla, (1994) 6 SCC 342, para 7 and Anar Devi vs. Parmeshwari Devi, (2006) 8 SCC 656, paras 10,11 cases this Court interpreted the Explanation 1 to Section 6 (prior to 2005 Amendment) of the Hindu Succession Act. It was held that the deeming provision referring to partition of the property immediately before the death of the coparcener was to be given due and full effect in view of settled principle of interpretation of a provision incorporating a deeming fiction. In Shyama Devi and Anar Devi cases, same view was followed.
26.2. In Vaishali Satish Ganorkar vs. Satish Keshaorao Ganorkar, AIR 2012, BOM 101, paras 13 to 37, the Bombay High Court held that the amendment will not apply unless the daughter is born after the 2005 Amendment, but on this aspect a different view has been taken in the later larger Bench judgment. We are unable to find any reason to hold that birth of the daughter after the amendment was a necessary condition for its applicability. All that is required is that daughter should be alive and her father should also be alive on the date of the amendment.
26.3. Kale vs. Dy. Director of Consolidation, (1976) 3 SCC 119, para 9 and Digambar Adhar Patil vs. Devram Girdhar Patil, (1995) Supp. 2 SCC 428 at page 430 have been cited to submit that the family settlement was not required to be registered. Santosh Hazari vs. Purushottam Tiwari, (2001) 3 SCC 179, para 15 lays down that the Appellate Court must deal with reasons of the trial court while reversing itsfindings.
26.4 Kannaiyan vs. The Assistant Collector of Central Excise, 1969 (2) MLJ 277, C.I.T. Gujarat vs. Keshavlal Lallubhai Patel, (1965) 2 SCR 100, Umayal Achi vs. Lakshmi Achi, AIR 1945 FC 25 at 31(d) and Shivappa Laxman vs. Yellawa Shivappa Shivagannavar, AIR 1954 BOM 47, para 4 have been cited to canvass that partition was recognition of pre-existing rights and did not create new rights.
26.5 This would normally have ended our order with the operative part being in para 24 which disposes of Civil Appeal No.7217 of 2013 and directs listing of other matters for being dealt with separately. However, one more aspect relating to gender discrimination against Muslim women which came up for consideration needs to be gone into as Part II of this order.

Part II
27. An important issue of gender discrimination which though not directly involved in this appeal has been raised by some of the learned counsel for the parties which concerns rights to Muslim women. Discussions on gender discrimination led to this issue also. It was pointed out that in-spite of guarantee of the Constitution Muslim women are subjected to discrimination. There is no safeguard against arbitrary divorce and second marriage by her husband during currency of the first marriage, resulting in denial of dignity and security to her. Although the issue was raised before this Court in Ahmedabad Women Action Group (AWAG) vs. Union of India, (1997) 3 SCC 573, this Court did not go into the merits of the discrimination with the observation that the issue involved state policy to be dealt with by the legislature. This Court referred to the observations of Sahai, J. in Sarla Mudgal vs. Union of India (1995) 3 SCC 635 that a climate was required to be built for a uniform civil code. Reference was also made to observations in Madhu Kishwar vs. State of Bihar (1996 (5) SCC 125 to the effect that the court could at best advice and focus attention to the problem instead of playing an activist role. It was observed that challenge to the Muslim Women (Protection of Rights on Divorce) Act, 1986 was pending before the Constitution Bench and there was no reason to multiply proceedings on such an issue.

28. It is pointed out that the matter needs consideration by this Court as the issue relates not merely to a policy matter but to fundamental rights of women under Articles 14, 15 and 21 and international conventions and covenants. One of the reasons for the court having not gone into the matter was pendency of an issue before the Constitution Bench which has since been decided by this Court in Danial Latifi vs. Union of India, (2001) 7 SCC 740. The Constitution Bench did not address the said issue but the Court held that Article 21 included right to live with dignity1 which supports the plea that a Muslim woman could invoke fundamental rights in such matters. In Javed vs. State of Haryana, (2003) 8 SCC 369, a Bench of three judges observed that practice of polygamy is injurious to public morals and can be superseded by the State just as practice of ‘sati’ (Para 46). It was further observed that conduct rules providing for monogamy irrespective of religion are valid and could not be struck down on the ground of violation of personal law of Muslims (Paras 54 to 59). In John Vallamattom vs. UOI, (2003) 6 SCC 611, it was observed that Section 118 of Indian Succession Act, 1925 restricting right of Christians to make Will for charitable purpose was without any rational basis, was discriminatory against Christian and violated Article 14 (Paras 28 and 29). Laws dealing with marriage and succession are not part of religion (Para 44). Law has to change with time (Paras 33 to 36). International covenants and treaties could be referred to examine validity and reasonableness of a provision (Paras 30 to 32).

29. In Charu Khurana vs. UOI, (2015) 1 SCC 192, this Court considered the issue of gender discrimination in the matter of denial of membership of “Cine Costume Make-up Artists and Hair Dressers Association” in film industry. It was held that such discrimination violates basic constitutional rights.

30. It was thus submitted that this aspect of the matter may be gone into by separately registering the matter as Public Interest Litigation (PIL). We are of the view that the suggestion needs consideration in view of earlier decisions of this Court. The issue has also been highlighted in recent Articles appearing in the press on this subject (“The Tribune” dated 24.09.2015 “Muslim Women’s quest for equality” by Vandana Shukla and “Sunday Express Magazine” dated 04.10.2015 “In Her Court” by Dipti Nagpaul D’Souza).

31. For this purpose, a PIL be separately registered and put up before the appropriate Bench as per orders of Hon’ble the Chief Justice of India.

32. Notice be issued to learned Attorney General and National Legal Services Authority, New Delhi returnable on 23rd November, 2015. We give liberty to learned counsel already appearing in this matter to assist the Court on this aspect of the matter, if they wish to volunteer, for either view point.
……………………………………………….. Anil R. Dave, J.

1. “Para 33……. This Court in Olga Tellis v. Bombay Municipal Corpn. [1985(3) SCC 545] and Maneka Gandhi v. Union of India [1978 (1) SCC 248] held that the concept of “right to life and personal liberty” guaranteed under Article 21 of the Constitution would include the “right to live with dignity”. Before the Act, a Muslim woman who was divorced by her husband was granted a right to maintenance from her husband under the provisions of Section 125 CrPC until she may remarry and such a right, if deprived, would not be reasonable, just and fair. Thus the provisions of the Act depriving the divorced Muslim women of such a right to maintenance from her husband and providing for her maintenance to be paid by the former husband only for the period of iddat and thereafter to make her run from pillar to post in search of her relatives one after the other and ultimately to knock at the doors of the Wakf Board does not appear to be reasonable and fair substitute of the provisions of Section 125

CrPC. Such deprivation of the divorced Muslim women of their right to maintenance from their former husbands under the beneficial provisions of the Code of Criminal Procedure which are otherwise available to all other women in India cannot be stated to have been effected by a reasonable, right, just and fair law and, if these provisions are less beneficial than the provisions of Chapter IX of the Code of Criminal Procedure, a divorced Muslim woman has obviously been unreasonably discriminated and got out of the protection of the provisions of the general law as indicated under the Code which are available to Hindu, Buddhist, Jain, Parsi or Christian women or women belonging to any other community. The provisions prima facie, therefore, appear to be violative of Article 14 of the Constitution mandating equality and equal protection of law to all persons otherwise similarly circumstanced and also violative of Article 15 of the Constitution which prohibits any discrimination on the ground of religion as the Act would obviously apply to Muslim divorced women only and solely on the ground of their belonging to the Muslim religion.”

……………………….

(2015) 119 (3) CWN (SC) 230

IN THE SUPREME COURT OF INDIA

(BEFORE DIPAK MISRA AND PRAFULLA C. PANT, JJ.)

Krishna Bhatacharjee ... Appellant
Vs.
Sarathi Choudhury and Anr. ... Respondents

Criminal Appeal No. 1545 of 2015 @ SLP (Crl) No. 10223 of 2014; Criminal Appellate Jurisdiction; Judgment on: 20.11.2015

Protection of Women from Domestic Violence Act, 2005, Section 2(a), 12, 28, 32; Domestic Violence Rules, 2006, Rule 15(6) – Application was made before the Magistrate to return “stridhan” from her husband – application rejected for want of maintainability and limitation by the Magistrate and District Judge mainly on the ground that decree for judicial separation has already been passed – High Court declined to interfere – “Domestic Violence” covers a range of violence which takes within its sweep “economic abuses” – the principle of “justice to cause equivalent to the salt of ocean” be not in mind while rejecting the application – the Court of law is bound to uphold the truth which sparkles when justice is done – Act, 2005 is a beneficial and assertively affirmative enactment for constitutional right of women - concept of “continuing offence” gets attracted from the date of deprivation of “stridhan” – protect women for not becoming victims in the domestic domain – husband or any family member cannot have any right upon the “stridhan” irrespective of order of judicial separation.

Ratio decidendi:-
The concept of “continuing offence” gets attracted from the date of deprivation of “stridhan”. Protection of Women from Domestic Violence Act, 2005, protects women for not becoming victims in the domestic domain. The husband or any family member cannot have any right upon the “stridhan” irrespective of order of judicial separation.

Observations of the Court:-
Regard being had to the nature of the legislation, a more sensitive approach is expected from the courts where under the 2005 Act no relief can be granted, it should never be conceived of but, before throwing a petition at the threshold on the ground of maintainability, there has to be an apposite discussion and thorough deliberation on the issues raised. It should be borne in mind that helpless and hapless “aggrieved person” under the 2005 Act approaches the court under the compelling circumstances.(para 4)
The facts that we have enumerated as regards the “status of the parties”, “judicial separation” and “the claim for Stridhan” are not in dispute. Regard being had to the undisputed facts, it is necessary to appreciate the scheme of the 2005 Act. Section 2(a) defines “aggrieved person” which means any woman who is, or has been, in a domestic relationship with the respondent and who alleges to have been subjected to any act of domestic violence by the respondent. Section 2(f) defines “domestic relationship” which means a relationship between two persons who live or have, at any point of time, lived together in a shared household, when they are related by consanguinity, marriage, or through a relationship in the nature of marriage, adoption or are family members living together as a joint family. Section 2(g) defines the term “domestic violence” which has been assigned and given the same meaning as in Section 3. Sub-section (iv) of Section 3 deals with “economic abuse”. As in the facts at hand, we are concerned with the “economic abuse”.(para 10)
It is interesting to note that an issue arose whether matrimonial offence of adultery had exhausted itself when the decree for judicial separation was granted and, therefore, it cannot be said that it is a new fact or circumstance amounting to wrong which will stand as an obstacle in the way of the husband to obtain the relief which he claims in the divorce proceedings. Be it stated that reliance was placed on the decision of Gujarat High Court in Bai Mani v. Jayantilal Dahyabhai, AIR 1979 Guj 209. This Court did not accept the contention by holding that living in adultery on the part of the husband is a continuing matrimonial offence, and it does not get frozen or wiped out merely on passing of a decree for judicial separation which merely suspends certain duties and obligations of the spouses in connection with their marriage and does not snap the matrimonial tie.(para 21)
it is quite clear that there is a distinction between a decree for divorce and decree of judicial separation; in the former, there is a severance of status and theparties do not remain as husband and wife, whereas in the latter, the relationship between husband and wife continues and the legal relationship continues as it has not been snapped. Thus understood, the finding recorded by the courts below which have been concurred by the High Court that the parties having been judicial separated, the appellant wife has ceased to be an “aggrieved person” is wholly unsustainable.(para 22)
It is, therefore, manifest that the position of stridhan of a Hindu married woman’s property during coverture is absolutely clear and unambiguous; she is the absolute owner of such property and can deal with it in any manner she likes she may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband. Ordinarily, the husband has no right or interest in it with the sole exception that in times of extreme distress, as in famine, illness or the like, the husband can utilise it buthe is morally bound to restore it or its value when he is able to do so.(para 24)
After so stating the Court proceeded to rule that stridhana property is the exclusive property of the wife on proof that she entrusted the property or dominion over the stridhana property to her husband or any other member of the family, there is no need to establish any further special agreement to establish that the property was given to the husband or other member of the family.(para 27)
A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arise out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and reoccurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues, and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.”(para 28)

Held:-
The concept of “continuing offence” gets attracted from the date of deprivation of stridhan, for neither the husband nor any other family members can have any right over the stridhan and they remain the custodians. For the purpose of the 2005 Act, she can submit an application to the Protection Officer for one or more of the reliefs under the 2005 Act. In the present case, the wife had submitted the application on 22.05.2010 and the said authority had forwarded the same on 01.06.2010. In the application, the wife had mentioned that the husband had stopped payment of monthly maintenance from January 2010 and, therefore, she had been compelled to file the application for stridhan. Regard being had to the said concept of “continuing offence” and the demands made, we are disposed to think that the application was not barred by limitation and the courts below as well as the High Court had fallen into a grave error by dismissing the application being barred by limitation.

List of cases cited:-
Inderjit Singh Grewal Vs. State of Punjab, (2011) 12 SCC 588 (relied on)
V.D. Bhanot Vs. Savita Bhanot, (2012) 3 SCC 183 (referred to)
Saraswathy Vs. Babu, (2014) 3 SCC 712 (relied on)
D.Velusamy Vs. D.Patchaiammal, (2010) 10 SCC 469 (referred to)
Savitaben Somabhai Bhatiya Vs. State of Gujarat, (2005) 3 SCC 636 (relied on)
Japani Sahoo Vs. Chandra Sekhar Mohanty, (2007) 7 SCC 394 (referred to)
Noida Entrepreneurs Assn. Vs. Noida, (2011) 6 SCC 508 (referred to)
Jeet Singh and Others Vs. State of U.P. and Others, (1993) 1 SCC 325 (referred to)
Hirachand Srinivas Managaonkar Vs. Sunanda, (2001) 4 SCC 125 (discussed)
Bai Mani Vs. Jayantilal Dahyabhai, AIR 1979 Guj 209 (discussed)
Soundarammal Vs. Sundara Mahalinga Nadar, AIR 1980 Mad 294 (relied on)
Pratibha Rani Vs. Suraj Kumar and Another, (1985) 2 SCC 370 (referred to)
Rashmi Kumar (Smt) Vs. Mahesh Kumar Bhada, (1997) 2 SCC 397 (referred to)
State of Bihar Vs. Deokaran Nenshi, (1972) 2 SCC 890 (referred to)
Raja Bhadur Singh Vs. Provident Fund Inspector and Others, (1984) 4 SCC 222 (relied on)

The Judgement of the Court was delivered by Dipak Misra, J.:-

1. Leave granted.

2. The appellant having lost the battle for getting her Stridhan back from her husband, the first respondent herein, before the learned Magistrate on the ground that the claim preferred under Section 12 of the Protection of Women from Domestic Violence Act, 2005 (for short, ‘the 2005 Act’) was not entertainable as she had ceased to be an “aggrieved person” under Section 2(a) of the 2005 Act and further that the claim as put forth was barred by limitation; preferred an appeal before the learned Additional Sessions Judge who concurred with the view expressed by the learned Magistrate, and being determined to get her lawful claim, she, despite the repeated non-success, approached the High Court of Tripura, Agartala in Criminal Revision No. 19 of 2014 with the hope that she will be victorious in the war to get her own property, but the High Court, as is perceivable, without much analysis, declined to interfere by passing an order with Spartan austerity possibly thinking lack of reasoning is equivalent to a magnificent virtue and that had led the agonised and perturbed wife to prefer the present appeal, by special leave.

3. Prior to the narration of facts which are essential for adjudication of this appeal, we may state that the 2005 Act has been legislated, as its Preamble would reflect, to provide for more effective protection of the rights of the women guaranteed under the Constitution who are victims of violence of any kind occurring within the family and for matters connected therewith or incidental thereto. The 2005 Act is a detailed Act. The dictionary clause of the 2005 Act, which we shall advert to slightly at a later stage, is in a broader spectrum. The definition of “domestic violence” covers a range of violence which takes within its sweep “economic abuse” and the words “economic abuse”, as the provision would show, has many a facet.

4. Regard being had to the nature of the legislation, a more sensitive approach is expected from the courts where under the 2005 Act no relief can be granted, it should never be conceived of but, before throwing a petition at the threshold on the ground of maintainability, there has to be an apposite discussion and thorough deliberation on the issues raised. It should be borne in mind that helpless and hapless “aggrieved person” under the 2005 Act approaches the court under the compelling circumstances. It is the duty of the court to scrutinise the facts from all angles whether a plea advanced by the respondent to nullify the grievance of the aggrieved person is really legally sound and correct. The principle “justice to the cause is equivalent to the salt of ocean” should be kept in mind. The court of law is bound to uphold the truth which sparkles when justice is done. Before throwing a petition at the threshold, it is obligatory to see that the person aggrieved under such a legislation is not faced with a situation of non-adjudication, for the 2005 Act as we have stated is a beneficial as well as assertively affirmative enactment for the realisation of the constitutional rights of women and to ensure that they do not become victims of any kind of domestic violence.

5. Presently to the narration of the facts. The marriage between the appellant and the respondent No. 1 was solemnised on 27.11.2005 and they lived as husband and wife. As the allegations proceed, there was demand of dowry by the husband including his relatives and, demands not being satisfied, the appellant was driven out from the matrimonial home. However, due to intervention of the elderly people of the locality, there was some kind of conciliation as a consequence of which both the husband and the wife stayed in a rented house for two months. With the efflux of time, the husband filed a petition seeking judicial separation before the Family Court and eventually the said prayer was granted by the learned Judge, Family Court. After the judicial separation, on 22.5.2010 the appellant filed an application under Section 12 of the 2005 Act before the Child Development Protection Officer (CDPO), O/O the District Inspector, Social Welfare & Social Education, A.D. Nagar, Agartala, Tripura West seeking necessary help as per the provisions contained in the 2005 Act. She sought seizure of Stridhan articles from the possession of the husband. The application which was made before the CDPO was forwarded by the said authority to the learned Chief Judicial Magistrate, Agartala Sadar, West Tripura by letter dated 1.6.2010. The learned Magistrate issued notice to the respondent who filed his written objections on 14.2.2011.

6. Before the learned Magistrate it was contended by the respondent that the application preferred by the wife was barred by limitation and that she could not have raised claim as regards Stridhan after the decree of judicial separation passed by the competent court. The learned Magistrate taking into consideration the admitted fact that respondent and the appellant had entered into wedlock treated her as an “aggrieved person”, but opined that no “domestic relationship” as defined under Section 2(f) of the 2005 Act existed between the parties and, therefore, wife was not entitled to file the application under Section 12 of the 2005 Act. The learned Magistrate came to hold that though the parties had not been divorced but the decree of judicial separation would be an impediment for entertaining the application and being of this view, he opined that no domestic relationship subsisted under the 2005 Act and hence, no relief could be granted. Be it stated here that before the learned Magistrate, apart from herself, the appellant examined three witnesses and the husband had examined himself as DW-1. The learned Magistrate while dealing with the maintainability of the petition had noted the contentions of the parties as regards merits, but has really not recorded any finding thereon.

7. The aggrieved wife preferred criminal appeal No. 6(1) of 2014 which has been decided by the learned Additional Sessions Judge, Agartala holding, inter alia, that the object of the 2005 Act is primarily to give immediate relief to the victims; that as per the decision of this Court in Inderjit Singh Grewal v. State of Punjab, (2011) 12 SCC 588 that Section 468 of the Code of Criminal Procedure applies to the proceedings under the 2005 Act and, therefore, her application was barred by time. Being of this view, the appellate court dismissed the appeal.

8. On a revision being preferred, the High Court, as is demonstrable from the impugned order, after referring to the decision in Inderjit Singh Grewal (supra), has stated that the wife had filed a criminal case under Section 498(A) IPC in the year 2006 and the husband had obtained a decree of judicial separation in 2008, and hence, the proceedings under the 2005 Act was barred by limitation. That apart, it has also in a way expressed the view that the proceedings under the 2005 Act was not maintainable.

9. In our prefatory note, we have stated about the need of sensitive approach to these kinds of cases. There can be erroneous perception of law, but as we find, neither the learned Magistrate nor the appellate court nor the High Court has made any effort to understand and appreciate the stand of the appellant. Such type of cases and at such stage should not travel to this Court. We are compelled to say so as we are of the considered opinion that had the appellate court and the High Court been more vigilant, in all possibility, there could have been adjudication on merits. Be that as it may.

10. The facts that we have enumerated as regards the “status of the parties”, “judicial separation” and “the claim for Stridhan” are not in dispute. Regard being had to the undisputed facts, it is necessary to appreciate the scheme of the 2005 Act. Section 2(a) defines “aggrieved person” which means any woman who is, or has been, in a domestic relationship with the respondent and who alleges to have been subjected to any act of domestic violence by the respondent. Section 2(f) defines “domestic relationship” which means a relationship between two persons who live or have, at any point of time, lived together in a shared household, when they are related by consanguinity, marriage, or through a relationship in the nature of marriage, adoption or are family members living together as a joint family. Section 2(g) defines the term “domestic violence” which has been assigned and given the same meaning as in Section 3. Sub-section (iv) of Section 3 deals with “economic abuse”. As in the facts at hand, we are concerned with the “economic abuse”, we reproduce Section 3(iv) which reads as follows:-
“Section 3. Definition of domestic violence.
(iv) "economic abuse" includes-
(a) deprivation of all or any economic or financial resources to which the aggrieved person is entitled under any law or custom whether payable under an order of a court or otherwise or which the aggrieved person requires out of necessity including, but not limited to, household necessities for the aggrieved person and her children, if any, stridhan, property, jointly or separately owned by the aggrieved person, payment of rental related to the shared household and maintenance;
(b) disposal of household effects, any alienation of assets whether movable or immovable, valuables, shares, securities, bonds and the like or other property in which the aggrieved person has an interest or is entitled to use by virtue of the domestic relationship or which may be reasonably required by the aggrieved person or her children or her stridhan or any other property jointly or separately held by the aggrieved person; and
(c) prohibition or restriction to continued access to resources
or facilities which the aggrieved person is entitled to use or enjoy by virtue of the domestic relationship including access to the shared household.
Explanation II.-For the purpose of determining whether any act, omission, commission or conduct of the respondent constitutes "domestic violence" under this section, the overall facts and circumstances of the case shall be taken into consideration.”

11. Section 8(1) empowers the State Government to appoint such number of Protection Officers in each district as it may consider necessary and also to notify the area or areas within which a Protection Officer shall exercise the powers and perform the duties conferred on him by or under the 2005 Act. The provision, as is manifest, is mandatory and the State Government is under the legal obligation to appoint such Protection Officers. Section 12 deals with application to Magistrate. Sub-sections (1) and (2) being relevant are reproduced below:-
“Section12.Application to Magistrate.-(1) An aggrieved person or a Protection Officer or any other person on behalf of the aggrieved person may present an application to the Magistrate seeking one or more reliefs under this Act: Provided that before passing any order on such application, the Magistrate shall take into consideration any domestic incident report received by him from the Protection Officer or the service provider.
(2) The relief sought for under sub-section (1) may include a relief for issuance of an order for payment of compensation or damages without prejudice to the right of such person to institute a suit for compensation or damages for the injuries caused by the acts of domestic violence committed by the respondent: Provided that where a decree for anyamount as compensation or damages has been passed by any court in favour of the aggrieved person, the amount, if any, paid or payable in pursuance of the order made by the Magistrate under this Act shall be set off against the amount payable under such decree and the decree shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, be executable for the balance amount, if any, left after such set off.”

12. Section 18 deals with passing of protection orders by the Magistrate. Section 19 deals with the residence orders and Section 20 deals with monetary reliefs. Section 28 deals with procedure and stipulates that all proceedings under Sections 12, 18, 19, 20, 21, 22 and 23 and offences under Section 31 shall be governed by the provisions of the Code of Criminal Procedure, 1973. Section 36 lays down that the provisions of the 2005 Act shall be in addition to, and not in derogation of the provisions of any other law, for the time being in force.

13. Having scanned the anatomy of the 2005 Act, we may now refer to a few decisions of this Courts that have dealt with the provisions of the 2005 Act. In V.D. Bhanot v. Savita Bhanot, (2012) 3 SCC 183 the question arose whether the provisions of the 2005 Act can be made applicable in relation to an incident that had occurred prior to the coming into force of the said Act. Be it noted, the High Court had rejected the stand of the respondent therein that the provisions of the 2005 Act cannot be invoked if the occurrence had taken place prior to the coming into force of the 2005 Act. This Court while dealing with the same referred to the decision rendered in the High Court which after considering the constitutional safeguards under Article 21 of the Constitution vis-à-vis the provisions of Sections 31 and 33 of the 2005 Act and after examining the Statement of Objects and Reasons for the enactment of the 2005 Act, had held that it was with the view of protecting the rights of women under Articles 14, 15 and 21 of the Constitution that Parliament enacted the 2005 Act in order to provide for some effective protection of rights guaranteed under the Constitution to women, who are victims of any kind of violence occurring within the family and matters connected therewith and incidental thereto, and to provide an efficient and expeditious civil remedy to them and further that a petition under the provisions of the 2005 Act is maintainable even if the acts of domestic violence had been committed prior to the coming into force of the said Act, notwithstanding the fact that in the past she had lived together with her husband in a shared household, but was no more living with him, at the time when the Act came into force. After analysing the verdict of the High Court, the Court concurred with the view expressed by the High Court by stating thus:-
“We agree with the view expressed by the High Court that in looking into a complaint under Section 12 of the PWD Act, 2005, the conduct of the parties even prior to the coming into force of the PWD Act, could be taken into consideration while passing an order under Sections 18, 19 and 20 thereof. In our view, the Delhi High Court has also rightly held that even if a wife, who had shared a household in the past, but was no longer doing so when the Act came into force, would still be entitled to the protection of the PWD Act, 2005.”

14. In Saraswathy v. Babu, (2014) 3 SCC 712 a two-Judge Bench, after referring to the decision in V.D. Bhanot (supra), reiterated the principle. It has been held therein:-
“We are of the view that the act of the respondent husband squarely comes within the ambit of Section 3 of the DVA, 2005, which defines “domestic violence” in wide terms. The High Court made an apparent error in holding that the conduct of the parties prior to the coming into force of the DVA, 2005 cannot be taken into consideration while passing an order. This is a case where the respondent husband has not complied with the order and direction passed by the trial court and the appellate court. He also misleads the Court by giving wrong statement before the High Court in the contempt petition filed by the appellant wife. The appellant wife having being harassed since 2000 is entitled for protection order and residence order under Sections 18 and 19 of the DVA, 2005 along with the maintenance as allowed by the trial court under Section 20(1)(d) of the DVA, 2005. Apart from these reliefs, she is also entitled for compensation and damages for the injuries, including mental torture and emotional distress, caused by the acts of domestic violence committed by the respondent husband. Therefore, in addition to the reliefs granted by the courts below, we are of the view that the appellant wife should be compensated by the respondent husband. Hence, the respondent is hereby directed to pay compensation and damages to the extent of Rs 5,00,000 in favour of the appellant wife.”

15. In the instant case, as has been indicated earlier, the courts below as well as the High Court have referred to the decision in Inderjit Singh Grewal (supra). The said case has to be understood regard being had to the factual exposè therein. The Court had referred to the decision in D. Velusamy v. D. Patchaiammal, (2010) 10 SCC 469 wherein this Court had considered the expression “domestic relationship” under Section 2(f) of the Act and judgment in Savitaben Somabhai Bhatiya v. State of Gujarat, (2005) 3 SCC 636 and distinguished the said judgments as those cases related to live-in relationship without marriage. The Court analyzing the earlier judgments opined that the couple must hold themselves out to society as being akin to spouses in addition to fulfilling all other requisite conditions for a valid marriage. The said judgments were distinguished on facts as those cases related to live-in relationship without marriage. The Court opined that the parties therein had got married and the decree of the civil court for divorce subsisted and that apart a suit to declare the said judgment and decree as a nullity was still pending consideration before the competent court. In that background, the Court ruled that:-
“In the facts and circumstances of the case, the submission made on behalf of Respondent 2 that the judgment and decree of a civil court granting divorce is null and void and they continued to be the husband and wife, cannot be taken note of at this stage unless the suit filed by Respondent 2 to declare the said judgment and decree dated 20-3-2008 is decided in her favour. In view thereof, the evidence adduced by her particularly the record of the telephone calls; photographs attending a wedding together and her signatures in school diary of the child cannot be taken into consideration so long as the judgment and decree of the civil court subsists. On a similar footing, the contention advanced by her counsel that even after the decree of divorce, they continued to live together as husband and wife and therefore the complaint under the 2005 Act is maintainable, is not worth acceptance at this stage.” [Emphasis supplied]

16. It may be noted that a submission was advanced by the wife with regard to the applicability of Section 468 CrPC. While dealing with the submission on the issue of limitation, the Court opined:-
“...... in view of the provisions of Section 468 CrPC, that the complaint could be filed only within a period of one year from the date of the incident seem to be preponderous in view of the provisions of Sections 28 and 32 of the 2005 Act read with Rule 15(6) of the Protection of Women from Domestic Violence Rules, 2006 which make the provisions of CrPC applicable and stand fortified by the judgments of this Court in Japani Sahoo v. Chandra Sekhar Mohanty, (2007) 7 SCC 394, and Noida Entrepreneurs Assn. v. Noida, (2011) 6 SCC 508.”

17. As it appears, the High Court has referred to the same but the same has really not been averted. In fact, it is not necessary to advert to the said aspect in the present case.

18. The core issue that is requisite to be addressed is whether the appellant has ceased to be an “aggrieved person” because of the decree of judicial separation. Once the decree of divorce is passed, the status of the parties becomes different, but that is not so when there is a decree for judicial separation. A three-Judge Bench in Jeet Singh and Others Vs. State of U.P. and Others, (1993) 1 SCC 325 though in a different context, adverted to the concept of judicial separation and ruled that the judicial separation creates rights and obligations. A decree or an order for judicial separation permits the parties to live apart. There would be no obligation for either party to cohabit with the other. Mutual rights and obligations arising out of a marriage are suspended. The decree however, does not sever or dissolve the marriage. It affords an opportunity for reconciliation and adjustment. Though judicial separation after a certain period may become a ground for divorce, it is not necessary and the parties are not bound to have recourse to that remedy and the parties can live keeping their status as wife and husband till their lifetime.

19. In this regard, we may fruitfully refer to the authority in Hirachand Srinivas Managaonkar v. Sunanda, (2001) 4 SCC 125 wherein the issue that arose for determination was whether the husband who had filed a petition seeking dissolution of the marriage by a decree of divorce under Section 13(1-A)(i) of the Hindu Marriage Act, 1955 can be declined relief on the ground that he had failed to pay maintenance for his wife and daughter despite an order of the court. The husband was appellant before this Court and had filed an application under Section 10 of the Hindu Marriage Act, 1955 for seeking judicial separation on the ground of adultery on the part of the appellant. Thereafter, the appellant presented the petition for dissolution of marriage by decree of divorce on the ground that there has been no resumption of cohabitation as between the parties to the marriage for a period of more than one year after passing of the decree for judicial separation. The stand of the wife was that the appellant having failed to pay the maintenance as ordered by the court, the petition for divorce filed by the husband was liable to be rejected inasmuch he was trying to get advantage of his own wrong for getting the relief. The High Court accepted the plea of the wife and refused to grant the prayer of the appellant seeking divorce. It was contended before this Court that the only condition for getting divorce under Section 13(1-A)(i) of the Hindu Marriage Act, 1955 is that there has been no resumption of cohabitation between the parties to the marriage for a period of one year or upwards after the passing of the decree for judicial separation in a proceeding to which both the spouses are parties. It was urged that if the said condition is satisfied the court is required to pass a decree of divorce. On behalf of the wife, the said submissions were resisted on the score that the husband had been living in continuous adultery even after passing of the decree of judicial separation and had reasonably failed to maintain the wife and daughter. The Court proceeded to analyse Section 13(1-A)(i) of the Hindu Marriage Act, 1955. Analysing the provisions at length and speaking about judicial separation, it expressed that after the decree for judicial separation was passed on the petition filed by the wife it was the duty of both the spouses to do their part for cohabitation. The husband was expected to act as a dutiful husband towards the wife and the wife was to act as a devoted wife towards the husband. If this concept of both the spouses making sincere contribution for the purpose of successful cohabitation after a judicial separation is ordered then it can reasonably be said that in the facts and circumstances of the case the husband in refusing to pay maintenance to the wife failed to act as a husband. Thereby he committed a “wrong” within the meaning of Section 23 of the Act. Therefore, the High Court was justified in declining to allow the prayer of the husband for dissolution of the marriage by divorce under Section 13(1-A) of the Act.

20. And, the Court further stated thus:-
“... The effect of the decree is that certain mutual rights and obligations arising from the marriage are as it were suspended and the rights and duties prescribed in the decree are substituted therefor. The decree for judicial separation does not sever or dissolve the marriage tie which continues to subsist. It affords an opportunity to the spouse for reconciliation and readjustment. The decree may fall by a conciliation of the parties in which case the rights of the respective parties which float from the marriage and were suspended are restored. Therefore the impression that Section 10(2) vests a right in the petitioner to get the decree of divorce notwithstanding the fact that he has not made any attempt for cohabitation with the respondent and has even acted in a manner to thwart any move for cohabitation does not flow from a reasonable interpretation of the statutory provisions. At the cost of repetition it may be stated here that the object and purpose of the Act is to maintain the marital relationship between the spouses and not to encourage snapping of such relationship.”

21. It is interesting to note that an issue arose whether matrimonial offence of adultery had exhausted itself when the decree for judicial separation was granted and, therefore, it cannot be said that it is a new fact or circumstance amounting to wrong which will stand as an obstacle in the way of the husband to obtain the relief which he claims in the divorce proceedings. Be it stated that reliance was placed on the decision of Gujarat High Court in Bai Mani v. Jayantilal Dahyabhai, AIR 1979 Guj 209. This Court did not accept the contention by holding that living in adultery on the part of the husband is a continuing matrimonial offence, and it does not get frozen or wiped out merely on passing of a decree for judicial separation which merely suspends certain duties and obligations of the spouses in connection with their marriage and does not snap the matrimonial tie. The Court ruled that the decision of the Gujarat High Court does not lay down the correct position of law. The Court approved the principle stated by the Madras High Court in the case of Soundarammal v. Sundara Mahalinga Nadar, AIR 1980 Mad 294 in which a Single Judge had taken the view that the husband who continued to live in adultery even after decree at the instance of the wife could not succeed in a petition seeking decree for divorce and that Section 23(1)(a) barred the relief.

22. In view of the aforesaid pronouncement, it is quite clear that there is a distinction between a decree for divorce and decree of judicial separation; in the former, there is a severance of status and the parties do not remain as husband and wife, whereas in the latter, the relationship between husband and wife continues and the legal relationship continues as it has not been snapped. Thus understood, the finding recorded by the courts below which have been concurred by the High Court that the parties having been judicial separated, the appellant wife has ceased to be an “aggrieved person” is wholly unsustainable.

23. The next issue that arises for consideration is the issue of limitation. In the application preferred by the wife, she was claiming to get back her stridhan. Stridhan has been described as saudayika by Sir Gooroodas Banerjee in “Hindu Law of Marriage and Stridhan” which is as follows:-
“First, take the case of property obtained by gift. Gifts of affectionate kindred, which are known by the name of saudayika stridhan, constitute a woman’s absolute property, which she has at all times independent power to alienate, and over which her husband has only a qualified right, namely, the right of use in times of distress.”

24. The said passage, be it noted, has been quoted Pratibha Rani v. Suraj Kumar and Another, (1985) 2 SCC 370. In the said case, the majority referred to the stridhan as described in “Hindu Law” by N.R. Raghavachariar and Maine’s “Treatise on Hindu Law”. The Court after analyzing the classical texts opined that:-
”It is, therefore, manifest that the position of stridhan of a Hindu married woman’s property during coverture is absolutely clear and unambiguous; she is the absolute owner of such property and can deal with it in any manner she likes
— she may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband. Ordinarily, the husband has no right or interest in it with the sole exception that in times of extreme distress, as in famine, illness or the like, the husband can utilise it but he is morally bound to restore it or its value when he is able to do so. It may be further noted that this right is purely personal to the husband and the property so received by him in marriage cannot be proceeded against even in execution of a decree for debt.”

25. In the said case, the Court ruled:-
“... a pure and simple entrustment of stridhan without creating any rights in the husband excepting putting the articles in his possession does not entitle him to use the same to the detriment of his wife without her consent. The husband has no justification for not returning the said articles as and when demanded by the wife nor can he burden her with losses of business by using the said property which was never intended by her while entrusting possession of stridhan. On the allegations in the complaint, the husband is no more and no less than a pure and simple custodian acting on behalf of his wife and if he diverts the entrusted property elsewhere or for different purposes he takes a clear risk of prosecution under Section 406 of the IPC. On a parity of reasoning, it is manifest that the husband, being only a custodian of the stridhan of his wife, cannot be said to be in joint possession thereof and thus acquire a joint interest in the property.”
26. The decision rendered in the said case was referred for a fresh look by a three-Judge Bench. The three-Judge Bench Rashmi Kumar (Smt) v. Mahesh Kumar Bhada, (1997) 2 SCC 397 while considering the issue in the said case, ruled that:-
“9. A woman’s power of disposal, independent of her husband’s control, is not confined to saudayika but extends to other properties as well. Devala says:
“A woman’s maintenance (vritti), ornaments, perquisites (sulka), gains (labha), are her stridhana. She herself has the exclusive right to enjoy it. Her husband has no right to use it except in distress….” In N.R. Raghavachariar’s Hindu Law — Principles and Precedents, (8th Edn.) edited by Prof. S. Venkataraman, one of the renowned Professors of Hindu Law para 468 deals with “Definition of Stridhana”. In para 469 dealing with “Sources of acquisition” it is stated that the sources of acquisition of property in a woman’s possession are: gifts before marriage, wedding gifts, gifts subsequent to marriage etc., Para 470 deals with “Gifts to a maiden”. Para 471 deals with “Wedding gifts” and it is stated therein that properties gifted at the time of marriage to the bride, whether by relations or strangers, either Adhiyagni or Adhyavahanika, are the bride’s stridhana. In para 481 at page 426, it is stated that ornaments presentedto the bride by her husband or father constitute her Stridhana property. In para 487 dealing with “powers during coverture” it is stated that saudayika meaning the gift of affectionate kindred, includes both Yautaka or gifts received at the time of marriage as well as its negative Ayautaka. In respect of such property, whether given by gift or will she is the absolute owner and can deal with it in any way shelikes. She may spend, sell or give it away at her own pleasure.
10. It is thus clear that the properties gifted to her before the marriage, at the time of marriage or at the time of giving farewell or thereafter are her stridhana properties. It is her absolute property with all rights to dispose at her own pleasure. He has no control over her stridhana property. Husband may use it during the time of his distress but nonetheless he has a moral obligation to restore the same or its value to his wife. Therefore, stridhana property does not become a joint property of the wife and the husband and the husband has no title or independent dominion over the property as owner thereof.”

27. After so stating the Court proceeded to rule that stridhana property is the exclusive property of the wife on proof that she entrusted the property or dominion over the stridhana property to her husband or any other member of the family, there is no need to establish any further special agreement to establish that the property was given to the husband or other member of the family. Further, the Court observed that it is always a question of fact in each case as to how the property came to be entrusted to the husband or any other member of the family by the wife when she left the matrimonial home or was driven out therefrom. Thereafter, the Court adverted to the concept of entrustment and eventually concurred with the view in the case of Pratibha Rani (supra). It is necessary to note here that the question had arisen whether it is a continuing offence and limitation could begin to run every day lost its relevance in the said case, for the Court on scrutiny came to hold that the complaint preferred by the complainant for the commission of the criminal breach of trust under Section 406 of the Indian Penal Code was within limitation.

28. Having appreciated the concept of Stridhan, we shall now proceed to deal with the meaning of “continuing cause of action”. In Raja Bhadur Singh v. Provident Fund Inspector and Others, (1984) 4 SCC 222 the Court while dealing with the continuous offence opined that the expression “continuing offence” is not defined in the Code but that is because the expressions which do not have a fixed connotation or a static import are difficult to define. The Court referred to the earlier decision in State of Bihar v. Deokaran Nenshi, (1972) 2 SCC 890 and reproduced a passage from the same which is to the following effect:-
“A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arise out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and reoccurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues, and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.”

29. The Court further observed:-
“This passage shows that apart from saying that a continuing offence is one which continues and a non-continuing offence is one which is committed once and for all, the Court found it difficult to explain as to when an offence can be described as a continuing offence. Seeing that difficulty, the Court observed that a few illustrative cases would help to bring out the distinction between a continuing offence and a non-continuing offence. The illustrative cases referred to by the Court are three from England, two from Bombay and one from Bihar.”
30. Thereafter, the Court referred to the authorities and adverted to Deokaran Nenshi (supra) and eventually held:-
“The question whether a particular offence is a continuing offence must necessarily depend upon the language of the statute which creates that offence, the nature of the offence and, above all, the purpose which is intended to be achieved by constituting the particular act as an offence...”

31. Regard being had to the aforesaid statement of law, we have to see whether retention of stridhan by the husband or any other family members is a continuing offence or not. There can be no dispute that wife can file a suit for realization of the stridhan but it does not debar her to lodge a criminal complaint for criminal breach of trust. We must state that was the situation before the 2005 Act came into force. In the 2005 Act, the definition of “aggrieved person” clearly postulates about the status of any woman who has been subjected to domestic violence as defined under Section 3 of the said Act. “Economic abuse” as it has been defined in Section 3(iv) of the said Act has a large canvass. Section 12, relevant portion of which have been reproduced hereinbefore, provides for procedure for obtaining orders of reliefs. It has been held in Inderjit Singh Grewal (supra) that Section 498 of the Code of Criminal Procedure applies to the said case under the 2005 Act as envisaged under Sections 28 and 32 of the said Act read with Rule 15(6) of the Protection of Women from Domestic Violence Rules, 2006. We need not advert to the same as we are of the considered opinion that as long as the status of the aggrieved person remains and stridhan remains in the custody of the husband, the wife can always put forth her claim under Section 12 of the 2005 Act. We are disposed to think so as the status between the parties is not severed because of the decree of dissolution of marriage.

32. The concept of “continuing offence” gets attracted from the date of deprivation of stridhan, for neither the husband nor any other family members can have any right over the stridhan and they remain the custodians. For the purpose of the 2005 Act, she can submit an application to the Protection Officer for one or more of the reliefs under the 2005 Act. In the present case, the wife had submitted the application on 22.05.2010 and the said authority had forwarded the same on 01.06.2010. In the application, the wife had mentioned that the husband had stopped payment of monthly maintenance from January 2010 and, therefore, she had been compelled to file the application for stridhan. Regard being had to the said concept of “continuing offence” and the demands made, we are disposed to think that the application was not barred by limitation and the courts below as well as the High Court had fallen into a grave error by dismissing the application being barred by limitation.

33. Consequently, the appeal is allowed and the orders passed by the High Court and the courts below are set aside. The matter is remitted to the learned Magistrate to proceed with the application under Section 12 of the 2005 Act on merits.

........................... Prafulla C. Pant, J.

……………………….

(2015) 119 (3) CWN (SC) 255

IN THE SUPREME COURT OF INDIA

(BEFORE VIKRAMAJIT SEN AND SHIVA KIRTI
SINGH, JJ.)

Securities & Exchange Board of India ...Appellant
Vs.
ICAP India Pvt. Ltd. ...Respondent

Civil Appeal No.5275 of 2006; Civil Appellate Jurisdiction; Judgment on: 24.11.2015

Securities & Exchange Board of India (SEBI) Act, 1992, Section 15Z - respondent is a stock broker for dealing wholesale debt market securities – pursuant to RBI Circular the value of the securities cannot be equated with broker’s “annual turnover” - Securities Appellate Tribunal (SAT) allowed the appeal of the respondent and set aside the order of the SEBI – respondent did not disclose its business deals – unless statute empowers the concerned authority to make rules or regulations with retrospective effect such authority cannot make rules – the term “annual turnover” has to be understood in the right of Schedule III and its contents – SAT has erred in limiting the “annual turnover” as per Schedule III is aggregate of sale and purchase price of securities – in the “wholesale debt market” segment the broker has a limited role – broker does not receive the sale and purchase price – payment is made directly to the seller – it would not belong to broker and had to be passed to the seller – the term “annual turnover” is to mean only the amount earned by the stock broker by way of brokerage.

Ratio decidendi:-
The “wholesale debt market” segment the broker has a limited role. The broker does not receive the sale and purchase price. The payment is made directly to the seller; it would not belong to broker and had to be passed to the seller. The term “annual turnover” is to mean only the amount earned by the stock broker by way of brokerage.

Observations of the Court:-
In the case of K.P. Varghese v. Income-tax Officer, Ernakulam (1981) 4 SCC 173 to highlight various principles relating to interpretation of statutes. In particular reliance was placed upon the principle that plain meaning or literal construction may not be relied upon if it results in absurdity, injustice and unconstitutionality. In such a situation Court should construe the real meaning having regard to the object and purpose behind enacting the provision as well as the context of the setting in which it occurs and with a view to suppress the mischief sought to be remedied by the Legislature.(para 7)
We do not find any merit in the contention advanced on behalf of the respondent that the Explanation under clause 2 of Schedule IV can be used in contra distinction of differently worded Explanation under paragraph 3 of Schedule III to support the interpretation of the term ‘annual turnover’ given by the SAT. While Schedule III relates to Regulation 10 which governs fees to be paid by the stock broker or sub-broker, Schedule IV relates to Regulation 16G(1) which governs fees to be paid by the Trading or Clearing Member or Self Clearing Member of Derivatives Exchange/ Derivatives Segment/ Clearing Corporation/ Clearing House. In such a situation, in our view, the term ‘annual turnover’ has to be understood only in the light of Schedule III and its contents including the relevant Explanation.(para 11)
On a careful analysis of the Explanation occurring after paragraph 3 of Schedule III and the definition of ‘annual turnover’ contained therein as also the reasonings in the impugned order we are constrained to hold that the SAT has erred in limiting the annual turnover of the respondent only to the amount of brokerage earned by it. The earning by way of brokerage represents only the part of price of securities received by the stock broker on his own account. The other and more significant part of the ‘annual turnover’ as per the Explanation is the aggregate of the sale and purchase prices of securities, received or receivable by the stock broker on account of his clients in respect of sale and purchase or dealing in securities during the financial year.(para 12)

Held:-
In view of the above discussions and the interpretation of the term ‘annual turnover’ indicated by us earlier, we are constrained to hold the impugned order passed by the SAT as erroneous in law. It is accordingly set aside.

List of cases cited:-
B.S.E. Brokers’ Forum Vs. Securities & Exchange Board of India, (2001) 3 SCC 482 (referred to)
K.P. Varghese Vs. Income-tax Officer, Ernakulam (1981) 4 SCC 173 (relied on)
Income-tax Officer, Alleppey Vs. I.M.C. Ponnoose, AIR 1970 SC 385 (relied on)
Government of Andhra Pradesh Vs. P. Laxmi Devi, (2008) 4 SCC 720 (relied on)

The Judgement of the Court was delivered by Shiva Kirti Singh, J.:-

1. This appeal under Section 15Z of the Securities & Exchange Board of India Act, 1992 (for brevity, ‘the SEBI Act’) has been preferred by the Securities & Exchange Board of India (for brevity, ‘the SEBI’) to challenge the judgment and order dated 14.08.2006 passed by the learned Securities Appellate Tribunal (hereinafter referred to as ‘the SAT’) in Appeal No.56 of 2004.

2. The substantial question of law falling for determination involves interpretation of the term ‘annual turnover’ as it finds mention in the Explanation after paragraph 3 of Schedule III to the Securities & Exchange Board of India (Stock Brokers & Sub-brokers) Regulations, 1992 (for brevity, ‘the Regulations’). The aforesaid Explanation reads as follows:
“Explanation.–For the purpose of paragraphs 1, 2 and 3, “annual turnover” means the aggregate of the sale and purchase prices of securities received and receivable by the stock broker on his own account as well as on account of his clients in respect of sale and purchase or dealing in securities during any financial year.”

3. The factual matrix may be noted only in brief. The respondent is a stock broker in the wholesale debt market segment of the National Stock Exchange and deals in debt market securities. The stand of the respondent is that the price of the dealt with securities would not form part of the concerned broker’s ‘annual turnover’ and the same cannot be the basis for computing the registration fee of stock brokers like the respondent. This stand is based on a circular of Reserve Bank of India (for brevity, ‘RBI’) dated June 20, 1992, issued with a view to regulate the wholesale debt market. The dispute in respect of quantum of registration fee demanded by the SEBI was brought before the SAT by way of challenge to SEBI’s order dated November 28, 2003 directing the respondent to pay Rs.33,51,45,620/- towards principal and Rs.3,78,29,623/- towards interest as on November 30, 2003. As noticed above the SAT allowed the appeal of the respondent and set aside the order passed by SEBI vide its judgment and order under appeal.

4. The circular dated June 20, 1992 issued by RBI as a regulator of the wholesale debt market is the basis for the SAT to hold that for the permissible activity of bringing the parties together, no amount is received or receivable by the stock broker when he deals in the wholesale debt segment of the market and therefore the definition of “annual turnover” for the purpose of paragraphs 1, 2 and 3, as contained in the Explanation to Paragraph 3 of Schedule III to the Regulations is not satisfied. Before adverting to other relevant facts it is useful to notice the relevant part of this circular which reads as under:
“III. DEALINGS THROUGH BROKERS
(i) If a deal is put through with the help of a broker, the role of the broker should be restricted to that of bringing the two parties to the deal together.
(ii) While negotiating the deal, the broker is not obliged to disclose the identity of the counterparty to the deal. However, on conclusion of the deal, he should disclose the counter party and his contract note should clearly indicate the name of the counterparty.
(iii) On the basis of the contract note disclosing the name of the counterparty, settlement of deals between banks, viz., both fund settlement and delivery of security, should be directly between the banks, and the broker should have no role to play in the process.
(iv) With the approval of their top managements, banks should prepare a panel of approved brokers which should be reviewed annually or more often if so warranted. Clear-cut criteria should be laid down for empanelment of brokers, including verification of their creditworthiness, market reputation, etc. A record of broker wise details of deals put through and brokerage paid, should be maintained.
(v) A disproportionate part of the business should not be transacted through only one or a few brokers. Banks should consider fixing aggregate contract limits for each of the approved brokers, and ensure that these limits are not exceeded.”

5. The stand of the appellants is that the SAT has misinterpreted the Explanation to paragraph 3 to hold that the “turnover” for purpose of fee will not be the value of the stocks under transaction but only the value of brokerage earned by the stock brokers like the respondent. According to Mr. C.U. Singh, learned senior counsel for the SEBI the respondent is bound by the provisions of the SEBI Act, the rules framed thereunder as well as the Regulations. The law does not permit any one to act as a stock broker either in respect of shares in the equities segment or the Government securities in the wholesale debt segment until he is registered with the SEBI. Such registeredbroker has to pay the prescribed fee as per Schedule III of the Regulations. He highlighted clause 1(bb)(ii) of Schedule III which was inserted by the Amendment Regulations of 2002 w.e.f. February 20, 2002. It is the case of the appellant that clause 1(bb)(ii) was introduced in the Regulations because the SEBI accepted the Bhatt Committee’s recommendations for fixing a lower rate of fees for transactions in bonds and securities. The lower rate for transactions in bonds and Government securities was on account of comparative higher value of such transactions leading to higher turnover and that justified imposition of lower rate of fees. The grievance of the appellant is that the SAT did not consider such clear substantive provision and its history while interpreting the Explanation in a manner which amounts to doing violence to the main provision itself. Learned counsel for the appellant also referred to judgment of this Court in the case of B.S.E. Brokers’ Forum v. Securities & Exchange Board of India (2001) 3 SCC 482 and pointed out that in paragraph 43 the Court noted that the petitioners of that case had strongly relied upon the Report submitted by the Bhatt Committee. Further in paragraph 47 the Court rejected the contention of the petitioners after noticing the recommendations of the Bhatt Committee to the effect that “on Government securities, PSU bonds and units, the turnover will have to be calculated separately and a fee of 1000th of 1% may be charged on such turnover than the present scale of 100th of 1%.” Thereafter the Court observed that the Board was bound to bring about the corresponding changes so as to remove the anomalies pointed out by the Committee. It also noted that the Board or the SEBI had accepted the recommendations and they would be incorporated in the Regulations. The Court concluded that subject to the recommendations of the Bhatt Committee to be incorporated in the Regulations, the challenge made to the levy based on the measure of turnover had to be rejected.

6. On behalf of appellant it was further pointed out that through Notification No. S.O. 184(E) issued by the SEBI and Notification No. S.O.(E) issued by RBI, both dated March 01, 2000 it was made clear that all contracts for sale or purchase of Government securities when entered into through recognized stock exchanges, would be subject to the SEBI Act, Securities Contracts (Regulation) Act, 1956 as well as rules, regulations, bye-laws and circulars made under those Acts. It was also pointed out that Section 2(h) of the Securities Contracts (Regulation) Act, 1956 defines “securities” to include not only Government securities but also rights or interests in securities. Hence, according to appellant the physical receipt of securities or payments is not necessary. It was further contended on behalf of appellant that the circular of RBI of 1992 cannot affect the statutory regime governing fees payable by a registered broker to the SEBI as per provisions in the Regulations. Lastly it was submitted that the appellant has calculated and demanded the fee as per clause 1(b) instead of clause 1(bb) because the respondent did not disclose details of its different transactions.

7. On behalf of appellant reliance was placed upon judgment of this Court in the case of K.P. Varghese v. Income-tax Officer, Ernakulam (1981) 4 SCC 173 to highlight various principles relating to interpretation of statutes. In particular reliance was placed upon the principle that plain meaning or literal construction may not be relied upon if it results in absurdity, injustice and unconstitutionality. In such a situation Court should construe the real meaning having regard to the object and purpose behind enacting the provision as well as the context of the setting in which it occurs and with a view to suppress the mischief sought to be remedied by the Legislature.

8. In reply Mr. Jayant Bhushan, learned senior advocate submitted that in the case of B.S.E. Brokers’ Forum this Court upheld the validity of the registration fees levied by the SEBI but there was no occasion in that case to interpret the term ‘turnover’ as defined through the Explanation. He also referred to an Explanation to clause 2 of Schedule IV of the Regulations only for comparing the two Explanations and pointing out that while laying down the Schedule of Fees to be paid by the Trading or Clearing Member or Self Clearing Member the expression ‘annual turnover’ has been defined differently so as to take into account “the aggregate value of all trades executed by the trading member …..”. By placing reliance upon pleadings of the SEBI, the view taken by the SAT in the impugned judgment was sought to be supported further on the ground that in respect of wholesale debt market SEBI merely ‘monitors’ and does not ‘regulate’ and therefore there can be no justification to include the entire value of stocks in the turnover for calculating the registration fee. It was conceded however that the wholesale debt market was considerably widened in 2003 and SEBI may claim that it is required to regulate the wholesale debt market from 2003 onwards but that should not affect the present case which is related to an earlier period, only up to December 2002. Mr. Bhushan took us through the documents and pleadings to counter the allegation that respondent did not disclose the details and particulars of its business deals/accounts. According to him, it is admitted in the inspection report that the respondent dealt only in the wholesale debt market segment.

9. On behalf of respondent reliance was placed upon case of
Income-tax Officer, Alleppey v. I.M.C. Ponnoose AIR 1970 SC 385 and case of Government of Andhra Pradesh v. P. Laxmi Devi (2008) 4 SCC 720 in support of a well-established proposition of law that unless the Statute empowers the concerned authority to make a rule or regulation with retrospective effect, such authority cannot make a rule, regulation or bye-law with retrospective effect.

10. Lastly it was pointed out from the materials on record that respondent had raised several other grounds for objecting to the impugned action of the SEBI but the SAT allowed respondent’s appeal on the basis of interpretation of the term ‘annual turnover’ and did not deal with other grounds.

11. We do not find any merit in the contention advanced on behalf of the respondent that the Explanation under clause 2 of Schedule IV can be used in contra distinction of differently worded Explanation under paragraph 3 of Schedule III to support the interpretation of the term ‘annual turnover’ given by the SAT. While Schedule III relates to Regulation 10 which governs fees to be paid by the stock broker or sub-broker, Schedule IV relates to Regulation 16G(1) which governs fees to be paid by the Trading or Clearing Member or Self Clearing Member of Derivatives Exchange/ Derivatives Segment/ Clearing Corporation/ Clearing House. In such a situation, in our view, the term ‘annual turnover’ has to be understood only in the light of Schedule III and its contents including the relevant Explanation.

12. On a careful analysis of the Explanation occurring after paragraph 3 of Schedule III and the definition of ‘annual turnover’ contained therein as also the reasoning in the impugned order we are constrained to hold that the SAT has erred in limiting the annual turnover of the respondent only to the amount of brokerage earned by it. The earning by way of brokerage represents only the part of price of securities received by the stock broker on his own account. The other and more significant part of the ‘annual turnover’ as per the Explanation is the aggregate of the sale and purchase prices of securities, received or receivable by the stock broker on account of his clients in respect of sale and purchase or dealing in securities during the financial year. The view taken by the SAT that since in the wholesale debt market segment the broker has a limited role as per the RBI circular and since the broker does not receive the sale or purchase price because the payment is directly made to the seller, the broker will be saved from inclusion of the sale and purchase prices in his annual turnover, suffers from an apparent error. The error lies in not appreciating that the component of aggregate of sale and purchase prices which is receivable by the stock broker even on account of his clients is included in the annual turnover. Such sale and purchase price receivable by the stock broker on account of his clients, under the directions of the RBI through the circular dated June 20, 1992 presently goes directly to the seller but it is of no significance. Even if such sale and purchase price had actually been received by the stock broker not on his own account but on account of his clients, it could not belong to the broker and had to be passed on to the seller because such amount was receivable clearly on account of his clients in contradistinction to any part of sale and purchase price received or receivable by the stock broker on his own account. Thus viewed, the annual turnover of the stock broker as per the Explanation must include the value of entire transaction for the purpose of computing the registration fee as per Schedule III of the Regulations. In no case the term ‘annual turnover’ can be so interpreted as to mean only the amount earned by the stock broker by way of brokerage.

13. The same conclusion will emerge on considering the legislative history leading to insertion of clause 1(bb) in Schedule III whereby transactions in Government securities, bonds issued by any public sector undertaking and the units, traded in a similar manner were placed in a separate category for which the fee is kept at a much lower rate of 1000th of 1% of the turnover. The SAT erred in not considering the obvious purpose of such a provision brought through an amendment in the light of recommendations of the Bhatt Committee which had received not only approval of the SEBI but also of this Court as per judgment in the case of B.S.E. Brokers’ Forum.

14. So far as defence of the respondent that in the wholesale debt market segment, at least prior to 2003, the SEBI was required only to ‘monitor’ and not to ‘regulate’ such market cannot cut any ice because the provisions relating to registration fee by the SEBI have already been held valid and in the present proceedings there is no challenge to the relevant provisions including those in Schedule III of the Regulations. As already noted, in the case of B.S.E. Brokers’ Forum this Court directed the SEBI to incorporate the relevant recommendations of the Bhatt Committee in the Regulations and as a result the rate of fee on Government securities etc. dealt in the wholesale debt market was lowered and pegged at 1/10th in comparison to fees payable by the stock brokers in other segment.

15. In view of the above discussions and the interpretation of the term ‘annual turnover’ indicated by us earlier, we are constrained to hold the impugned order passed by the SAT as erroneous in law. It is accordingly set aside. There is a consensus that in case the impugned judgment and order is set aside, the matter deserves to be remanded back so that other grounds earlier raised by the respondent may now be considered by the SAT in accordance with law. For that purpose the matter is remitted back to the SAT for deciding the other relevant issues and grounds as per law at an early date, preferably within six months. The appeal thus stands allowed to the extent indicated above. In the facts of the case there shall be no order as to costs. The amount of Rs.2.9 crores deposited by the SEBI with the Registry has been invested in an interest bearing account and the FDR is due to mature on 30.11.2015. As soon as the amount matures, the same should be refunded to the SEBI without any delay.

…………………………………….VIKRAMAJIT SEN, J.

………………………

(2015) 119 (3) CWN (Cal) 267

IN THE HIGH COURT AT CALCUTTA

(BEFORE SOUMEN SEN AND ARIJIT BANERJEE, JJ.)

Shri Christopher Minj …Appellant
Vs.
The Andaman and Nicobar
Administration and Others …Respondents

M.A. No.004 of 2015; Civil Appellate Jurisdiction; Circuit Bench at Port Blair; Judgment on: 06.07.2015

A. Industrial Dispute Act, 1947, Section 2(oo)(bb) – Appellant was appointed as daily rated worker for a specific period – time to time appointment was extended by office orders for a fixed tenure – after nine years of termination of service Industrial Dispute was raised before the Conciliating Officer – reference was made to Industrial Dispute Tribunal for adjudicating dispute – Tribunal refused to grant any relief due to long delay to initiate proceedings – in writ application award of the

Labour Court dismissed as it was beyond the scope of reference and amount to a jurisdictional error – remanded to Labour Court for fresh consideration – upon remand, the Labour Court observed that appellant had worked more than 240 days in a year – employer did not comply with the provision of Section 25F of the Act, 1947 – Labour Court directed to reinstate the appellant with 50% back-wages – High Court in writ jurisdiction held that termination of workmen’s service did not amount to retrenchment and the provision of Section 25F of the Act, 1947 was not complied with – no material before the Labour Court to conclude that service of the appellant was seasonal in nature - High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not act as a court of appeal and does not reappraise the evidence recorded before the Labour Court/Tribunal - the scope of judicial review is to ensure that the Labour Court/Tribunal does not transgress its jurisdiction and that there is no glaring infirmity in the procedure adopted by the Labour Court/Tribunal.

Ratio decidendi:-
High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not act as a court of appeal and does not reappraise the evidence recorded before the Labour Court/Tribunal. The scope of judicial review is to ensure that the Labour Court/Tribunal does not transgress its jurisdiction and that there is no glaring infirmity in the procedure adopted by the Labour Court/Tribunal.

Observations of the Court:-
The appointment letters that were issued by the respondents for engaging the appellant were not part of the evidence before the Labour Court. The writ court should not have relied on such appointment letters to come to a finding that the appellant’s service was seasonal in nature.(para 15)
Each appointment of the appellant would constitute a separate contract of employment for a specific period and the service stood terminated ipso facto upon expiry of such period. If so, the provision of section 2(oo) (bb) of the I.D Act would be attracted and termination of the appellant’s service would not amount to retrenchment. On the other hand, if it be found that the appellant was in regular service under the respondents with a reasonable degree of continuity in service, Section 25 F of the I.D Act would be attracted and termination of appellant’s service would have to be held to the unlawful in view of the respondents failure to comply with the provisions of Section 25 F of the I.D Act.(para 19)
We are of the opinion that the learned single Judge should not have interfered with the Award of the Labour Court. The documents on the basis of which the learned Single Judge arrived at a finding that the appellant’s service was seasonal in nature were not part of the evidence before the Labour Court and the same should not have been relied on by the writ court.(para 23)

Held:-
We feel that the letters of appointment of the appellant are material document and we cannot totally ignore the same. Hence, for the ends of justice, the respondents are permitted to adduce evidence before the Labour Court including the said letters of appointment. However, this will be subject to the respondents paying costs to the appellant assessed at Rs. 25,000/-. If such costs are paid by the respondents within a fortnight from date, they will be entitled to approach the Labour Court for consideration of the matter afresh within three weeks from the date of payment of costs. In the event the Labour Court is so approached, it will answer the reference after considering the matter afresh including the evidence that the respondents may adduce.

B. Judicial Review.
It is settled law that judicial review is not concerned with the merits of the decision but it is concerned only with the decision making process. The High Court exercising the power of judicial review ought not to substitute its own decision in the place and stead of the decision arrived at by a court or Tribunal inferior to it.(para 21)
The scope of judicial review is to ensure that the Labour Court/Tribunal does not transgress its jurisdiction and that there is no glaring infirmity in the procedure adopted by the Labour Court/Tribunal while arriving at a decision. The High Court while exercising its jurisdiction under 226 of the Constitution of India does not act as a court of appeal and does not reappraise the evidence recorded before the Labour Court/Tribunal. So long, as the Labour Court/Tribunal has acted within its jurisdiction and has passed an order in compliance with the principles of natural justice, the writ court will be slow to interfere.(para 22)

Advocates who appeared in this Case:-
For the Appellant: Mr. Gopala Binnu Kumar
For the respondents: Mr. Santosh Kumar Mandal, Mr. Satish Chandra Mishra

List of cases cited:-
Morinda Coop. Sugar Mills Ltd Vs. Ram Kishan and Others, (1995) 5 SCC 653 (relied on)
General Manager, Haryana Roadway Vs. Rudhan Singh, (2005) 5 SCC 591 (relied on)
Union of India Vs. Ibrahim Uddin, 2012(8) SCC 148 (referred to)
M/s Sri Ram Industrial Enterprises Limited Vs. Mahak Singh and others, AIR 2007 SC 1370 (referred to)

The Judgement of the Court was delivered by Arijit Banerjee, J.:-

1. This is an appeal against the judgement and order dated 18th November, 2014 passed in WP No. 408 of 2014. By the impugned judgement and order, the learned Judge quashed the Award dated 11th September, 2013 passed by the learned Labour Court, Andaman & Nicobar Islands, Port Blair in Industrial Tribunal Case No.08 of 2006 (Shri. Christopher Minj –vs- The Divisional Forest Officer Baratang). By the said Award, the learned Labour Court had held that the service of the appellant was terminated without compliance with the provisions of section 25F of the Industrial Disputes Act, 1947 and this amounted to unlawful retrenchment. The learned Labour Court directed the respondents to reinstate the appellant in service with 50% back wages.

2. The material facts of the case, shorn of unnecessary details, are as follows:-
The appellant was appointed as daily rated mazdoor by an office order dated 10th August, 1990 for the period from 1st July, 1990 to 30th September, 1990 in connection with the first year wheedling of 1990 NRA at Pawajig construction coupe NRA. It was specifically mentioned in the appointment order that the service of the appellant will stand terminated on expiry of three months or earlier when his service was not required without any notice.

3. Thereafter, from time to time, the appellant was appointed for the said job by issuance of office orders for a fixed tenure and in each such case the office order provided that his service would stand terminated on the expiry of the period mentioned therein without any notice. It appears that last time the appellant was appointed for the period from 1st November, 1991 to 28th February, 1992 by office order dated 29.11.1991.

4. After about nine years the appellant raised a dispute that his service had been terminated without following the requirement of law. Conciliation proceedings before the Assistant Labour Commissioner, North and Middle Andaman failed. The appropriate Government, vide notification dated 12.01.2006, referred the dispute between the parties for adjudication to the Labour Court. The terms of reference was:-
“Whether the action of Divisional Forest Officer, Baratang, in terminating/ disengaging the services of Shri Christopher Minj, Ex- DRM, is legal and justified? If so, to what relief the concerned workman is entitled to?”

5. Before the Labour Court, the appellant contended that his service was illegally terminated without adhering to the provisions of the Industrial Disputes Act. He contended that, after his termination, the respondent authority had engaged new persons. In such circumstances, he prayed for reinstatement as well as back wages. The respondents contended that the appellant was engaged on certain conditions mainly for seasonal work. The appointment of the appellant was for a fixed tenure of time with the specific stipulation that, upon expiry of such tenure, the appellant’s service shall stand terminated ipso facto. The respondents also contended that the case was covered by Section 2(oo)(bb) of the Industrial Disputes Act, 1947 and as such it cannot be said that the appellant was retrenched. Finally, the respondents contended that the long delay of 9/10 years on the part of the appellant in claiming reinstatement disentitles him to any relief.

6. The learned Labour Court by an Award dated 16.11.2011 held that section 2(oo)(bb) of the Industrial Disputes Act was not attracted. However, the learned Judge refused to grant any relief to the appellant in view of the long delay on the part of the appellant in initiating proceedings for reinstatement.

7. Being aggrieved by the said Award, the appellant filed a writ petition before this court. In the writ application, he contended that the Labour Court, by dismissing the appellant’s claim on the ground of delay, had travelled beyond the scope of reference and this amounted to a jurisdictional error. This court by a judgement and order dated 20.06.2012 set aside the Award and remanded the matter to the Labour Court for fresh consideration.

8. Upon remand, the Labour Court heard the matter afresh and passed an Award on 11.09.2013. In the Award, the Labour Court recorded that no evidence was adduced on behalf of the respondent/ employer. The Labour Court further recorded that the respondent/employer had admitted in its written note of arguments that the workmen had worked for more than 240 days in 12 calendar months during the period of his employment as daily rated mazdoor but, his employment was purely seasonal in nature. The Labour Court came to a conclusion that section 25 F of the Industrial Disputes Act, 1947 was attracted to the facts of the case and the respondent not having complied with the provisions of section 25 F, the termination of the appellant’s service amounted to unlawful retrenchment. The Labour Court directed the respondent to reinstate the appellant in service along with 50% back wages.

9. Being aggrieved by the Award of the Labour Court, the employer challenged the same by filing WP 408 of 2013 before a learned Single Judge of this court. The learned Judge held that this was a case of seasonal employment. The appellant/ workman was employed for performing a certain type of work during certain seasons and it was specifically mentioned in the letters of appointment that his service would be terminated on expiry of the period mentioned in the letters of appointment or at any time when his service would not be required without any advance notice. The workman had accepted the terms and worked seasonally under the employer as and when the employer felt the requirement to employ the workman.

10. The learned Judge further held that the present case is covered by section 2(oo)(bb) of the Industrial Disputes Act being a case of termination of service of the workman as a result of non-renewal of contract of employment on its expiry. As such, termination of workman’s service did not amount to retrenchment and there was no requirement for the employer to comply with the provision of section 25 F of the I.D. Act.

11. In coming to such conclusion, the learned Judge relied on a decision of the Hon’ble Supreme Court in the Case of Morinda Coop.Sugar Mills Ltd –vs- Ram Kishan and Others, reported in (1995) 5 SCC 653. In that case the respondents were provided with service only during crushing seasons and they did not work throughout the year. Once the crushing season was over, their service stood terminated. The employer had furnished the details of crushing seasons from 1987-1988 to 1993-1994 indicating the dates from which the seasons started and the dates on which the seasons closed. Both the Labour Court as well as the High Court held that, since the respondents had worked for more than 240 days in a year, they were retrenched workman within the meaning of Section 2 (oo) of the I.D. Act. Since the employer did not comply with the provisions of section 25 F of the said Act, the retrenchment was held to be bad and the respondents were directed to the reinstated. The Hon’ble Apex Court however held that since it was only a seasonal work the respondents cannot be said to have been retrenched in view of the provision of section 2(oo)(bb) of the said Act. The Apex Court set aside the judgements of the Labour Court and the High Court.

12. The learned Judge also relied on another decision of the Hon’ble Apex Court in the case of General Manager, Haryana Roadway –vs- Rudhan Singh, reported in (2005) 5 SCC 591. In that case the Supreme Court accepted the contention of the appellant that the respondent had been appointed for a fix period and his appointment came to an end automatically after the expiry of such period and, therefore, it was not a case of retrenchment in view of section 2(oo)(bb) of the I.D Act. The Supreme Court observed that in view of section 2 (oo)(bb) of the said Act, termination of service of a workman as a result of non-renewal of contract of employment on its expiry would not amount to retrenchment.

13. The learned Judge held that the Labour Court wrongly applied Section 25 F of the I.D Act to the present case. Accordingly, the learned Judge quashed the Award of the Labour Court. Being aggrieved by the judgement and order dated 18.11.2014 passed by the learned single Judge, the workman has preferred the instant appeal.

14. Learned counsel for the appellant submitted that, admittedly, the appellant had worked for more than 240 days in 12 calendar months and as such the service could be terminated only upon compliance of Section 25 F of the I.D Act. Since the provisions of Section 25 F have not been complied with in the instant case, the termination of the appellant’s service amounted to unlawful retrenchment. He further submitted that the respondents did not lead any evidence before the Labour Court. There was no material before the Labour Court on the basis of which the Labour Court could have come to a finding that the appellant’s service was seasonal in nature.
15. The appointment letters that were issued by the respondents for engaging the appellant were not part of the evidence before the Labour Court. The writ court should not have relied on such appointment letters to come to a finding that the appellant’s service was seasonal in nature.

16. Learned counsel submitted that the writ court sat in appeal over the decision of the Labour Court which is not permissible in law. It is beyond the domain of the writ court to reappraise the evidence recorded by the Tribunal which is the ultimate fact finding forum. He submitted that the writ court should not have interfered with the decision of the Labour Court and should have dismissed the writ application.

17. Learned counsel for the respondents submitted that the Labour Court fell into a fundamental error of law by holding that section 25 F of the I.D Act is attracted to the facts of this case. Such an error goes to the root of the matter and is a jurisdictional error. The Labour Court failed to construe the letters of appointment of the appellant correctly. It would appear from such letters of appointment that the appellant was engaged from time to time for specific periods of time and in each case the appellant’s stood terminated ipso facto upon expiry of the period mention in the letters of appointment. The appellant’s service was purely seasonal in nature and there was no continuity of service. The mere fact that the appellant may have worked for more than 240 days in 12 calendar months by it-self would not attract the provisions of Section 25 F of the I.D Act. The Labour Court failed to appreciate the import of effect of the judgement of the Hon’ble Supreme Court in the case of Morinda Coop. Sugar Mills Ltd (supra) and in the case of General Manager, Haryana Roadway (supra). The Award of the Labour Court was patently illegal and the writ court rightly quashed the Award.

18. We have carefully considered the rival contentions of the parties. In our view, the fundamental issue that arises for determination is whether or not the service of the appellant was seasonal in nature. If it be held that indeed the appellant’s service was seasonal in nature and he was engaged by the employer at intervals of time as and when his service was required, then, there would be a lot of force in the submission made on behalf of the respondents.

19. Each appointment of the appellant would constitute a separate contract of employment for a specific period and the service stood terminated ipso facto upon expiry of such period. If so, the provision of section 2(oo) (bb) of the I.D Act would be attracted and termination of the appellant’s service would not amount to retrenchment. On the other hand, if it be found that the appellant was in regular service under the respondents with a reasonable degree of continuity in service, Section 25F of the I.D Act would be attracted and termination of appellant’s service would have to be held to the unlawful in view of the respondents failure to comply with the provisions of Section 25 F of the I.D Act.

20. There was no material before the Labour Court to come to a conclusion that the appellant’s service was seasonal in nature. The respondents did not tender the appointment letters in evidence before the Labour Court. Hence, in our view, the decision of the Labour Court on the basis of evidence before it apparently cannot be faulted. The writ court ought not to have relied on the appointment letters to come to the finding that the appellant’s service was seasonal in nature.

21. It is settled law that judicial review is not concerned with the merits of the decision but it is concerned only with the decision making process. The High Court exercising the power of judicial review ought not to substitute its own decision in the place and stead of the decision arrived at by a court or Tribunal inferior to it.

22. The scope of judicial review is to ensure that the Labour Court/Tribunal does not transgress its jurisdiction and that there is no glaring infirmity in the procedure adopted by the Labour Court/Tribunal while arriving at a decision. The High Court while exercising its jurisdiction under 226 of the Constitution of India does not act as a court of appeal and does not reappraise the evidence recorded before the Labour Court/Tribunal. So long, as the Labour Court/Tribunal has acted within its jurisdiction and has passed an order in compliance with the principles of natural justice, the writ court will be slow to interfere.

23. In view of the aforesaid, we are of the opinion that the learned single Judge should not have interfered with the Award of the Labour Court. The documents on the basis of which the learned Single Judge arrived at a finding that the appellant’s service was seasonal in nature were not part of the evidence before the Labour Court and the same should not have been relied on by the writ court.

24. Accordingly, the appeal succeeds and the order under appeal is set aside. However, we cannot stop here. For doing complete justice between the parties, we feel that the fundamental issue of the nature of the appellant’s service ought to be decided on the basis of proper evidence. For this purpose, we are minded to remand the matter back to the Labour Court.

25. The learned counsel for the respondents has categorically submitted that, although no evidence on behalf of the respondents was adduced before the Labour Court, the respondents would now like to adduce evidence before the Labour Court to establish that the appellant’s service was seasonal in nature. It is not appreciated as to why, on the last occasion, the respondents refrained from adducing evidence before the Tribunal. Such casual approach of the respondents is deprecated.

26. Generally, it is the duty of the party to lead the best evidence in his possession, which could throw light on the issue in controversy and in case such material evidence is withheld, the Court may draw adverse inference under section 114 (iii)(g) of the Evidence Act notwithstanding the onus of proof did not lie on such party and it was not called upon to produce such evidence.(Union Of India vs Ibrahim Uddin : 2012(8) SCC 148). In the case of M/s Sri Ram Industrial Enterprises Limited vs. Mahak Singh and others reported in AIR 2007 SC 1370, the Hon’ble Supreme Court on review of all the earlier decisions held that the best evidence having been withheld by the employer, the High Court was entitled to draw an adverse inference against the employer.

27. However, we feel that the letters of appointment of the appellant are material document and we cannot totally ignore the same. Hence, for the ends of justice, the respondents are permitted to adduce evidence before the Labour Court including the said letters of appointment. However, this will be subject to the respondents paying costs to the appellant assessed at Rs. 25,000/-. If such costs are paid by the respondents within a fortnight from date, they will be entitled to approach the Labour Court for consideration of the matter afresh within three weeks from the date of payment of costs. In the event the Labour Court is so approached, it will answer the reference after considering the matter afresh including the evidence that the respondents may adduce. In doing so, the Labour Court will not be influenced by its earlier Award or by the judgement

and order of the learned Single Judge of the High Court or the present judgement and order of this court.

28. In the event the respondents do not approach the Labour Court within the time stipulated above, the Award of the Labour Court passed on 11.09.2013 shall stand affirmed. M.A. No.004 of 2015 is accordingly disposed of.

I agree. Soumen Sen, J.

…………………..

(2015) 119 (3) CWN (Cal) 280

IN THE HIGH COURT AT CALCUTTA

(BEFORE NISHITA MHATRE AND ASHA ARORA, JJ.)

Parimal Mondal & Ors. …Petitioners
Vs.
Union of India & Ors. … Respondents

WPCT 218 of 2009 with WPCT 219 of 2009 with WPCT 73 of 2009; Constitutional Writ Jurisdiction; Appellate Side; Heard on: 30.06.2015, 01.07.2015; Judgment on: 24.07.2015

Factories Act, 1948, Section 2(l); Industrial Dispute Act, 1947, Section 9A – two grades of workmen amalgamated and termed as “Shops Clerks” – employer did not issue any notice under Section 9A of the Industrial Dispute Act to change service conditions – “shops clerks” are entitled for duty allowance as that of earlier being workers under Factories Act.

Ratio decidendi:-
Two grades of workmen amalgamated and termed as “Shops Clerks”. “Shops Clerks” are entitled for duty allowance as that of earlier being workers under Factories Act, 1948.

Observations of the Court:-
Indisputably, some of the petitioners were initially appointed as Tool Checkers whereas the others were Shop Clerks. The two grades were amalgamated and all the employees were called Shop Clerks after the merger on and from 1st January, 1984. The Tool Checkers were covered by the Factories Act since 1954. However, after amalgamation they were all entitled to the split duty allowance. This is apparent from the decision of the Supreme Court in Union of India & Ors vs. Sukumar Dutta & Ors (supra). Therefore, the submission of the learned Counsel that the Shop Clerks having been declared as workers under the Factories Act were not required to be paid the split duty allowance is untenable.(para 10)
Thus despite the fact that the employees, i.e., the petitioners herein were workers under the Factories Act being employed for work which was incidental to the manufacturing process, they were being paid the split duty allowance. Therefore, they cannot be denied the same only because of a declaration issued by the Factory Inspector. The Factory Inspector has not declared that because they were workers under the Factories Act, benefits which were available to them earlier should be withdrawn or denied to them after the declaration. There is no dispute that the petitioners work in spells of 2 to 3 hours at a stretch for seven and half hours a day. Under Section 54 of the Factories Act no adult worker is permitted to work for more than 9 hours in any day. The intervals of rest had been stipulated under Section 54 and no worker can work for more than 5 hours before he is entitled to an interval of rest for at least half an hour. There is no provision which mandates that the continuous period of work cannot be less than 5 hours. The spread-over periods have also been specified under the Act and they cannot be for more than ten and half hours on any day.(para 13)
The CLW has raised a bogey about the declaration issued by the Chief Inspector of Factories, Government of West Bengal that Shop Clerks are workers under the Factories Act, in order to deny them the split duty allowance. The CLW came into existence much before the declaration issued by the Chief Inspector of Factories, Government of West Bengal. However, this does not mean that the Shop Clerks were not workers prior to the declaration. The Factories Act provides for the minimum rate of overtime wages, the maximum hours of work and spread-over etc. It does not prohibit more beneficial conditions of service being granted to the employees. Moreover the Supreme Court has already dealt with the CLW’s contention that split duty allowance was not payable to the employees who had been declared as workers under the Factories Act.(para 14)

Held:-
We have perused the judgement of the Supreme Court in the special leave petitions. In our opinion the Tribunal’s decision is incorrect and that the petitioners would be entitled to split duty allowance depending on the distance between their place of residence and the factory at the relevant point of time. The CLW has not denied the contention of the petitioners that they were required to work with split duty because of administrative exigencies and for the benefit of the administration.

Advocates who appeared in this Case:-
For the Petitioners: Mr. Achintya Banerjee, Mr. Sk. Faridullah
For the Respondents: Mr. Pradip Kumar Roy, Ms. Srabani Sarkar

List of cases cited:-
Union of India & Ors Vs. Sukumar Dutta & Ors delivered on 31st August, 1989 (Supreme Court) (referred to)

The Judgement of the Court was delivered by Nishita Mhatre, J.:-

1. WPCT 218 of 2009 and WPCT 219 of 2009 are writ petitions filed by employees of the Chittaranjan Locomotive Works against the common order of the Central Administrative Tribunal in O.A. 1190 of 2005 and O.A. 1321 of 1998 respectively. WPCT 73 of 2009 has been filed by the
Chittaranjan Locomotive Works against the same order. For convenience the petitioners in WPCT 218 of 2009 and WPCT 219 of 2009 will be referred to as ‘the petitioners’ in this judgment, whereas the petitioners in WPCT 73 of 2009 will be referred to as Chittaranjan Locomotive Works (hereinafter in short ‘CLW’).

2. It is necessary to set out the brief history of this case in order to appreciate the questions raised in the writ petition. The petitioners were working either as Shop Clerks or Tool Checkers with the CLW. The working of the Shop Clerks was regulated by the Hours of Employment Regulations (for short ‘HOER’). The Tool Checkers were designated as Shop Clerks with effect from 1st April, 1984 after the two cadres were merged. The recommendations of the second pay commission were approved by the President of India on 28th August, 1961. Split shifts were recognised and split duty allowance was payable to those who were rostered for such duty. A split duty consists of two or more spells of work with an intervening break of half an hour or more necessitated by the exigencies of work. The employee is free to leave his place of duty. Where the spells of duty of employees was for 2 or 3 hours at a stretch and their place of residence was beyond a distance of 1.6 kilometres from their place of work, the duty hours were to be so regulated that 7 hours split duty were treated as 8 hours of normal duty. This concession was allowed only to staff classified as “continuous”. Thus, only employees who, in the interest of the administration, were required to work 2 or 3 hours at a stretch, with a break between two spells of work, were entitled to split duty allowance. The cadre of Tool Checkers was merged with that of Shop Clerks with effect from 1st January 1984. The Shop Clerks were admittedly considered to be “continuous workers”. They were required to attend duties in two spells, starting from 6.30 a.m. and the night shift commencing at 4 p.m. As a result the split duty was between 6.30 a.m. and 14.30 p.m. They were required to work for 48 hours a week whereas their counterparts working as office clerks worked for 40 hours in a week with a spread-over of 8 hours. An order was issued by the Railway Board on 5th September, 1962 clarifying that its earlier order dated 28th August, 1961 would not be applicable where the roster had been drawn up in such a manner that the shift was fixed for the convenience of the staff, that is, to give them a lunch break, etc. even though the distance between their places of residence and work exceeded 1.6 kilometres. According to the petitioners, CLW denied the split duty allowance to them. It appears that a section of the Shop Clerks had filed a writ petition before this Court in 1984 claiming the split duty allowance. This writ petition was transferred to the Central Administrative Tribunal, Calcutta Bench, after it was constituted under the Administrative Tribunals Act, 1984. The order was passed by the Tribunal on 27th July, 1988 directing the CLW to implement the order of 28th August, 1981 and pay all arrears of the split duty allowance to the applicants before the Tribunal. A review application preferred by the CLW was rejected on 3rd February, 1989 by the Tribunal. The Union of India and CLW preferred special leave petitions before the Supreme Court being SLP (C) Nos.40392-93 of 1989 against the decision of the Administrative Tribunal. These special leave petitions were also dismissed. Left with no alternative, CLW implemented the order dated 27th July, 1988 passed in TA No.2045 of 1986 by the Tribunal with retrospective effect from 28th August, 1961 in favour of the clerks posted in work-shops and depots. Thus, the petitioners irrespective of whether were originally appointed as Tool Checkers or Shop Clerks, benefited by the order of the Supreme Court and were paid split duty allowance.

3. By an order issued on 29th March, 1990 the Deputy Chief Personnel Officer declared that Shop Clerks posted in the Loco Works, Steel Foundry and Central Power Supply Stations of CLW as “workers” as defined under Section 2(l) of the Factories Act, 1948 with effect from 1st April, 1990. The CLW decided that by virtue of such a declaration the petitioners were no longer within the ambit of the HOER, 1961, and were covered only by the provisions of the Factories Act. On representations made by the Shop Clerks and to alleviate the disparity between the Shop Clerks and the factory workers, the Chief Mechanical Engineer granted overtime to the Shop Clerks to compensate the loss in payment of split duty allowance.

4. The decision to grant overtime to Shop Clerks was withdrawn and the benefit of the split duty allowance under the HOER was discontinued from 26th February, 1998. The representations submitted by the petitioners and other similarly situated employees fell on deaf ears. The Railway authorities informed the petitioners later that they would be entitled to the overtime from April, 1998. However that payment was later discontinued from September, 1999. Again, the representations submitted by the petitioners were not heeded and an application was moved before the Tribunal for payment of split duty allowance. The Tribunal by its order dated 24th August, 2004 permitted the applicants in those applications which included the petitioners to withdraw the application and to file a fresh representation along with the necessary documents for consideration by the CLW. That representation was rejected by the authorities on 18th December, 2004.

5. Being aggrieved by the decision of the CLW in respect of their representations, the petitioners and other employees similarly situated filed O.A. 1190 of 2005 while O.A. 1321 of 1998 before the Tribunal claiming the split duty allowance. It appears that the names of 24 employees figured in both the applications as disclosed in the affidavit in reply filed by CLW. The CLW pleaded, inter alia, that (i) since the Shop Clerks were no longer covered by the HOER but by the Factories Act, they were not entitled to the split duty allowance; (ii) the CLW administration had issued necessary orders on 1st April, 1990 on the recommendation and approval of the Joint Inspector and Director of Factories, Government of West Bengal bringing Shop Clerks within the purview of the Factories Act, 1948 and declaring that they were not entitled to the split duty allowance; (iii) the payment of overtime to these persons would be regulated by the provisions of the Factories Act; (iv) the service of Tool Checkers were regulated by the Factories Act from 1954; and (v) the Tool Checkers merged with Shop Clerks and after 1990 the Shop Clerks were also governed by the Factories Act. The CLW pointed out in its reply that 33 applicants before the Tribunal were originally appointed as Tool Checkers whereas 49 were Shop Clerks. The CLW therefore contended that none of the petitioners were entitled to the split duty allowance at all.

6. The Tribunal accepted the contentions of CLW and held that the Tool Checkers, who had been declared workers under the Factories Act, were not entitled to be paid split duty allowance. Similarly, Shop Clerks working in the Loco Works Steel Foundry and Power Supply Station who had been brought within the purview of the Factories Act from 29th March, 1990, were not entitled to the split duty allowance after that date. The Tribunal further directed that the Supreme Court’s decision in the case of Union of India & Ors vs. Sukumar Dutta & Ors delivered on 31st August, 1989 should be implemented with regard to all Shop Clerks who were not engaged in the Loco Works Steel Foundry and Power Supply Station and not merely to those who had approached the Supreme Court. The allowance was directed to be paid within six months. Aggrieved by the decision of the Tribunal, the parties have filed their respective writ petitions.

7. Mr. Achintya Banerjee, the learned Counsel appearing for the petitioners, has urged that the CLW being a recalcitrant employer has deliberately flouted the observations and directions of the Supreme Court in the special leave petitions. He submitted that the circulars issued by the Deputy Chief Personnel Officer could not override the rules of employment which had been issued in exercise of the power under Article 309 of the Constitution of India. He then submitted that when the Supreme Court had directed that split duty allowance should be paid to all persons whether they were originally Tool Checkers or Shop Clerks, the CLW could not defy the judgment and contend that it was because the Factory Inspector had covered the Shop Clerks under the Factories Act that they would not be entitled to split duty allowance. The learned Counsel drew our attention to the fact that the petitioners were neither paid the split duty allowance as payable under HOER nor the overtime allowance under the Factories Act.

8. Mr. Pradip Kumar Roy, the learned Counsel for the CLW, argued that the petitions of the employees are not maintainable because some of the petitioners are common to both the petitions; their names were found in both the original applications filed in the Tribunal. He urged that the petitions should be dismissed on this ground alone. The learned Counsel then submitted that the judgment of the Supreme Court was with respect to Shop Clerks who were employed prior to 1990 and therefore, they were entitled to the split duty allowance. He pointed out that there is no pleading in the original applications indicating that the petitioners are entitled to split duty allowance on the ground that they had worked for the stipulated number of hours as per the HOER and resided more than 1.6 kilometres away from the place of work. The learned Counsel therefore submitted that assuming the Shop Clerks are entitled to split duty allowance there was no material on record to establish that each of the petitioners was entitled to the same. According to him, the lack of pleadings in the application would mean that the petitioners had not been able to establish their claim for the split duty allowance. The learned Counsel then submitted that there was no material on record to indicate that the split duty was undertaken because of the requirement of the administration and that the split in the shift was not for the benefit of the employees. Unless the need of the administration is established there is no question of paying all the petitioners the split duty allowance, submitted the learned Counsel.

9. On scrutiny of the petitions it is evident that there are 24 names which are common in both the petitions. These persons will be treated as the petitioners in WPCT 218 of 2009 and their names will be deemed to have been deleted in WPCT 219 of 2009. We do not agree with the submission of the learned Counsel for CLW that the petitions are required to be dismissed on the ground that there are common names in both the applications before the Tribunal and in the writ petitions.

10. Indisputably, some of the petitioners were initially appointed as Tool Checkers whereas the others were Shop Clerks. The two grades were amalgamated and all the employees were called Shop Clerks after the merger on and from 1st January, 1984. The Tool Checkers were covered by the Factories Act since 1954. However, after amalgamation they were all entitled to the split duty allowance. This is apparent from the decision of the Supreme Court in Union of India & Ors vs. Sukumar Dutta & Ors (supra). Therefore, the submission of the learned Counsel that the Shop Clerks having been declared as workers under the Factories Act were not required to be paid the split duty allowance is untenable.

11. The hours of the work and rest of the railway employees is regulated by the Railway Servants (Hours of Employment) Rules, 1961. These rules were in force till they were repealed and revised in the year 2005. The revised rules are known as the Railway Servants (Hours of Work and Period of Rest) Rules, 2005. The claim of the petitioners is based on the HOER which was in force till 2005. The HOER was framed under the directions issued in an award under the Industrial Disputes Act, 1947. The second pay commission which came into effect from 1960 recommended thus:
“Split should not ordinarily be required to be performed in more than 3 spells and where employee’s residence is not close to the place of work, 7 hours of split duty should be treated as equal to 8 hours of normal duty.”

12. It has been contended on behalf of the Railways that the Shop Clerks are designated as workers under Section 2(l) of the Factories Act from 1990 and therefore, they were not entitled to the split duty allowance. This submission of the learned Counsel for the CLW is untenable. The CLW was always a factory since its inception. The fact that the Factory Inspector issued directions to consider some of the employees as workers under the Factories Act is of no consequence. Once an establishment is governed by the Factories Act depending on the nature of work performed by the employee, he is recognised as a worker within the definition of Section 2(l) of the Factories Act. The employee would have to establish that he was employed for a manufacturing process of cleaning in part of the machinery or premises used for manufacturing or in any other kind of work incidental to or connected with the manufacturing process. The declaration of the Shop Clerks as workers under the Factories Act does not in any way deny the Shop Clerks, their allowances and other benefits which were being paid till the declaration was issued. The declaration was perhaps issued because the CLW chose not to treat them as factory workers. However, if the CLW wanted to change the conditions of service of these employees, it was necessary for CLW which is no doubt an industry since it is a factory, to issue a notice under Section 9A of the Industrial Disputes Act before changing the service conditions of the employees. Admittedly this has not been done though it is a mandatory requirement. Overnight the CLW decided unilaterally to change the service conditions of the employees only on the basis that the Factory Inspector had declared them to be workers. There is no need for such a declaration. Even without a declaration, employees who are employed in the manufacturing process of a factory or related process which is incidental to the manufacturing process are factory workers. The declaration is only an affirmance of an existing fact.

13. Thus despite the fact that the employees, i.e., the petitioners herein were workers under the Factories Act being employed for work which was incidental to the manufacturing process, they were being paid the split duty allowance. Therefore, they cannot be denied the same only because of a declaration issued by the Factory Inspector. The Factory Inspector has not declared that because they were workers under the Factories Act, benefits which were available to them earlier should be withdrawn or denied to them after the declaration. There is no dispute that the petitioners work in spells of 2 to 3 hours at a stretch for seven and half hours a day. Under Section 54 of the Factories Act no adult worker is permitted to work for more than 9 hours in any day. The intervals of rest had been stipulated under Section 54 and no worker can work for more than 5 hours before he is entitled to an interval of rest for at least half an hour. There is no provision which mandates that the continuous period of work cannot be less than 5 hours. The spread-over periods have also been specified under the Act and they cannot be for more than ten and half hours on any day. Again there is no provision which stipulates that the spread-over cannot be for less than ten and half hours on any day.

14. Therefore, in our opinion, the CLW has raised a bogey about the declaration issued by the Chief Inspector of Factories, Government of West Bengal that Shop Clerks are workers under the Factories Act, in order to deny them the split duty allowance. The CLW came into existence much before the declaration issued by the Chief Inspector of Factories, Government of West Bengal. However, this does not mean that the Shop Clerks were not workers prior to the declaration. The Factories Act provides for the minimum rate of overtime wages, the maximum hours of work and spread-over etc. It does not prohibit more beneficial conditions of service being granted to the employees. Moreover the Supreme Court has already dealt with the CLW’s contention that split duty allowance was not payable to the employees who had been declared as workers under the Factories Act.

15. We have perused the judgement of the Supreme Court in

the special leave petitions. In our opinion the Tribunal’s decision is incorrect and that the petitioners would be entitled to split duty allowance depending on the distance between their place of residence and the factory at the relevant point of time. The CLW has not denied the contention of the petitioners that they were required to work with split duty because of administrative exigencies and for the benefit of the administration.

16. Therefore, WPCT 218 of 2009 and WPCT 219 of 2009 are allowed and the WPCT 73 of 2009 is dismissed.

17. Urgent certified photocopies of this judgment, if applied for, be given to the learned Advocates for the parties upon compliance of all formalities.

(Asha Arora, J.)

……………….

(2015) 119 (3) CWN (Cal) 292

IN THE HIGH COURT AT CALCUTTA

(BEFORE RAJIV SHARMA AND SHIVAKANT
PRASAD, JJ.)

Sri Sanjay Prasad …Appellant
Vs.
The New India Assurance
Company Ltd. & Anr. …Respondents

F.M.A. 2323 of 2004; Civil Appellate Jurisdiction; Appellate Side; Heard on: 17.7.2015; Judgment on: 20.08.2015

Motor Vehicles Act, 1988, Section 166, 173 – victim was knocked by a lorry resulting multiple severe injuries – admitted to Govt. (SSKM) Hospital, Kolkata – Ld. Judge dismissed the claim application on the ground that I.O. has not submitted charge-sheet and the elements of Section 166 of the M.V. Act were not proved – the discharge certificate from the hospital reveals that patient was under treatment for about 3 months – question of obtaining medical vouchers and doctor’s prescription does not arise –in a motor accident claim damages have to be assessed separately, pecuniary damages and special damages which are capable of calculation in terms of money – non pecuniary damages are incapable to be assessed by arithmetical calculation – pecuniary damage on account of medical expenditure cannot be allowed but the claimant is entitled for the damages under non pecuniary damages – claimant is entitled for compensation under the head of non-pecuniary loss.

Ratio decidendi:-
In a motor accident claim damages have to be assessed separately. The pecuniary damages and special damages which are capable of calculation in terms of money but non pecuniary damages are incapable to be assessed by arithmetical calculation. The pecuniary damage on account of medical expenditure cannot be allowed but the claimant is entitled for the damages under non pecuniary damages.

Observations of the Court:-
We are of the considered opinion that the learned Tribunal Judge was wrong in coming to the conclusion that no Form Comp. ‘B’ has been filed and the doctors, who treated her were not examined during summary trial to support her case and regarding the applicability of the decision reported in 2001(1) T.A.C. 130 (Cal.). It is true that no medical vouchers and corresponding prescriptions have been filed. Yet, the fact reveals from the Discharge Certificate itself that the patient was under admission for treatment for about three months in SSKM Hospital which is a Government Hospital, so question of obtaining medical vouchers and doctors’ prescription does not arise as the entire expenses are born by Government Hospital. Therefore, the learned Judge has absolutely erred in holding that the claimant had failed to produce the vouchers and prescriptions in support of her case.(para 4)
In R. D. Hattangadi Vs. Pest Control (India Pvt. Ltd.) reported in AIR 1995 SC 755, the Hon’ble Apex Court which reads as under —
“While fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages and special damages are those which the victim has actually incurred and which is capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant: (i)medical attendance; (ii)loss of earning of profit up to the date of trial; (iii)other material loss. So far non-pecuniary damages are concerned; they may include: (i)damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; (ii)damages to compensate for the loss of amenities of life which may include a variety of matters, i.e. on account of injury the claimant may not be able to walk, run or sit; (iii)damages for the loss of expectation of life, i.e. on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.(para 6)

Held:-
We, therefore, are of the considered view that the Learned Judge ought to have awarded the just compensation to the claimant victim who suffered severe injury due to the said accident on the heads viz. (i)damages for mental and physical shock, pains and suffering already suffered or likely to be suffered in future, (ii)damages to compensate for the loss of amenities of life i.e. on account of injury the claimant may not be able to walk, run or sit, (iii)inconvenience, hardship, discomfort, disappointments, frustration and mental stress in life and as such we hold the impugned award is bad in law and the same is liable to be set aside. Accordingly, we set aside the impugned judgement.

Advocates who appeared in this Case:-
For the Appellant: Mr. Krishanu Banik
For the Respondents: Mr. Parimal Kumar Pahari

List of cases cited:-
D.Sampath Vs. United India Insurance Co. Ltd. & Anr., 2011(4) TAC 459 (SC) (referred to)
Divisional Controller K S R T C Vs. Mahadeva Shetty and Another, 2003 (3) TAC 284 (SC) = (2003) 7 SCC 197 (relied on)
R.D. Hattangadi Vs. Pest Control (India Pvt. Ltd.), AIR 1995 SC 755 (relied on)

The Judgement of the Court was delivered by Shivakant Prasad, J.:-

1. The appellant/claimant has preferred the instant appeal under Section 173 of the M.V. Act, 1988 on being aggrieved by and dissatisfied with the judgment and award dated 02.4.2004 passed by the learned Additional District & Sessions Judge, 3rd Court, Alipore, South 24-Parganas (hereinafter called the learned Tribunal Judge) in M.A.C. Case No. 164 of 2001 on the grounds inter-alia, that the learned Tribunal Judge erred in law and fact in dismissing the M.A.C. Case No. 164 of 2001 without considering the materials on record viz. claim petition, written statement, depositions, documents, exhibits etc. filed before the Tribunal and as such, the impugned award/order is bad in law and the same is liable to be set aside.
2. Brief case leading to the instant appeal is that on 30.3.2001 at about 5:30 P.M. the victim Kavita Kumari was returning towards her residence through A.J.C. Bose Road from East to West. When she reached near the crossing of A.J.C. Bose Road and Lord Sinha Road, all on a sudden one lorry bearing registration No. WB-25/3483 came with a high speed in a rash and negligent manner, endangering human lives and safety to others, without blowing any horn or without giving any signal knocked down the victim resulting in multiple severe injuries all over her person who was admitted to S.S.K.M. Hospital, Kolkata. It appears from the Order impugned that the learned Judge dismissed the claim application under Section 166 of the M.V. Act on consideration that the Charge-sheet has not been submitted by the I.O. over the motor accident to prove the element of Section 166 of M.V. Act. It appears that the learned Judge framed issue No. 2 as to whether the accident occurred due to rash and negligent driving of the alleged offending vehicle by its driver. This issue would have been decided in the affirmative by the learned Tribunal Judge on the basis of the forwarding report of the Officer-in-Charge dated 02.4.2001 wherefrom it is revealed that the driver of the lorry bearing No. WB 25-3483 drove the lorry along AJC Bose Road from East West direction in a rash and negligent manner endangering human lives and safety to others knocking down the victim Kavita Kumari aged 16 years of 59 B, Chourangi Road, Kolkata-20 while she was crossing the road on 30.3.2001 at about 17:30 hours and the accused driver Jaga Yadav was produced before the CMM, Calcutta after his arrest in connection with Shakspior Sarani P.S. Case No. 93 dated 30.3.2001 under Sections 279/ 338 IPC. So it was within the domain of the learned claim tribunal to have decided the issue no. 2 in favour of the claimant/appellant. It must be born in mind that the claim cases are to be decided summarily and there is no requirement of proof of any fact relating to accident up to the hilt as is required in any other trial of cases by a Court of law. Therefore, the learned Trial Judge ought to have considered the case of claim as laid by the claimant before him on taking into account the documentary evidence being FIR (Exbt.-1), Forwarding Report of Officer-in-Charge (Exbt.- 2), Injury Report (Exbt.-3) and Discharge Certificate (Exbt.- 4).

3. Report on cases of serious injury in respect of the admission of patient Kavita Kumari, Exbt.-3 clearly goes to show that she was admitted after the accident in the Victoria ward of SSKM Hospital, Kolkata and Discharge Certificate, Exbt.-4 reflects that Kabita Kumari, 15 years old female was under treatment in SSKM Hospital from 30.3.2001 to 16.6.2001 who suffered from fracture pelvis with de-gloving injury. She had to receive blood transfusion (B+ve). There was multiple units fracture. On 31.3.2001 repair of right vaginal wall laceration was done under GA. Serial wound debriment and STSG of left thigh wound antero lateral aspect of upper 2/3rd of thigh was done. Learned Trial Judge has observed that the doctors of SSKM Hospital who examined her first and who were responsible for her treatment have not come to support her case without any explanation. We fail to understand as to why the learned Judge did not issue summon to doctors of SSKM Hospital in the interest justice. The fact cannot be lost sight of that Discharge Certificate and the Report of Admission of the victim in SSKM Hospital were on Exhibit lists and are the piece of evidence to come to a finding the extent of injury suffered by the victim who had to be hospitalised for a considerable period of three months in the said hospital. This fact is also required to be noted that when the certificate issued by Dr. P. K. Mondal was proved during trial as an Exbt.-11 there was no objection raised by the respondent. It is true that Dr. P. K. Mondal had no authority to issue the Disablement Certificate in terms of the provision of Sections 4 and 5 of the Persons with Disabilities (Equal Opportunities Protection of Rights and Full Participation) Act, 1995 with Rule 1997, nevertheless, the fact admitted is that the certificate issued by Dr. Mondal was in terms of the Injury Report and Discharge Certificate issued by the doctor of SSKM Hospital under whose care the victim Kavita Kumari was under treatment. A case of D. Sampath Vs. United India Insurance Co. Ltd. & Anr. Reported in 2011(4) TAC 459 (SC) may be applicable in a case situation like this where the doctor is cross-examined at length by learned Advocate for the Insurance Company, nothing adverse to the interest of the claimant is elicited.

4. Therefore, we are of the considered opinion that the learned Tribunal Judge was wrong in coming to the conclusion that no Form Comp. ‘B’ has been filed and the doctors, who treated her were not examined during summary trial to support her case and regarding the applicability of the decision reported in 2001(1) T.A.C. 130 (Cal.). It is true that no medical vouchers and corresponding prescriptions have been filed. Yet, the fact reveals from the Discharge Certificate itself that the patient was under admission for treatment for about three months in SSKM Hospital which is a Government Hospital, so question of obtaining medical vouchers and doctors’ prescription does not arise as the entire expenses are born by Government Hospital. Therefore, the learned Judge has absolutely erred in holding that the claimant had failed to produce the vouchers and prescriptions in support of her case. It may be that the pecuniary damages on account of expenditure incurred in the treatment of the patient cannot be allowed but, the claimant is entitled to damages under the head non-pecuniary damages.

5. We are in agreement with the contention of the learned Counsel for the appellant that the learned Tribunal Judge misconstrued the ratio of decision reported in (i) 2001 (1) T.A.C. 130 (Cal.) and (ii) 2002 (3) T.A.C. 555 (Karnatake). In case of Divisional Controller KSRTC Vs. Mahadeva Shetty and Another reported in 2003 (3) TAC 284 (SC) = (2003) 7 SCC 197 the Hon’ble Apex Court held that—
“The damages for vehicular accidents are in the nature of compensation in money for loss of any kind caused to any person. The main principles of law on compensation for injuries were worked out in the 19th century, where railway accidents were becoming common and all actions were tried by the jury. It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. Bodily injury is nothing but a deprivation which entitles the claimant to damages. The quantum of damages fixed should be in accordance with the injury. An injury may bring about many consequences like loss of earning capacity, loss of mental pleasure and many such consequential losses. A person becomes entitled to damages for mental and physical loss, his or her life may have been shortened or that he or she cannot enjoy life, which has been curtailed because of physical handicap. The normal expectation of life is impaired. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be “just” and it cannot be a bonanza; not a source of profit but the same should not be a pittance. The courts and tribunals have a duty to weigh the various factors and quantify the amount of compensation, which should be just. What would be “just” compensation is a vexed question. There can be no golden rule applicable to all cases for measuring the value of human life or a limb. Measure of damages cannot be arrived at by precise mathematical calculations. It would depend upon the particular facts and circumstances, and attending peculiar or special features, if any. Every method or mode adopted for assessing compensation has to be considered in the background of “just” compensation which is the pivotal consideration. Though by use of the expression “which appears to it to be just”, a wide discretion is vested in the Tribunal, the determination has to be rational, to be done by a judicious approach and not the outcome of whims, wild guesses and arbitrariness. ”

6. We are mindful of the guidelines enumerated in case of R.D. Hattangadi Vs. Pest Control (India Pvt. Ltd.) reported in AIR 1995 SC 755 by the Hon’ble Apex Court which reads as under —
“While fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages and special damages are those which the victim has actually incurred and which is capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant: (i)medical attendance; (ii)loss of earning of profit up to the date of trial; (iii)other material loss. So far non-pecuniary damages are concerned; they may include: (i)damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; (ii)damages to compensate for the loss of amenities of life which may include a variety of matters, i.e. on account of injury the claimant may not be able to walk, run or sit; (iii)damages for the loss of expectation of life, i.e. on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.”

7. Now, bearing in mind the clenched position of law in respect of the compensation to be awarded in case of bodily injury caused in motor accident, we are of the considered view that the claimant injured is entitled to compensation under the head non-pecuniary loss. We, therefore, are of the considered view that the Learned Judge ought to have awarded the just compensation to the claimant victim who suffered severe injury due to the said accident on the heads viz. (i)damages for mental and physical shock, pains and suffering already suffered or likely to be suffered in future, (ii)damages to compensate for the loss of amenities of life i.e. on account of injury the claimant may not be able to walk, run or sit, (iii)inconvenience, hardship, discomfort, disappointments, frustration and mental stress in life and as such we hold the impugned award is bad in law and the same is liable to be set aside. Accordingly, we set aside the impugned judgement.

8. Now, we determine a lump sum compensation of Rs. 1,00,000/- together with interest @ 9% thereon from the date of filing of the claim petition. The claimant/appellant has already received an amount of Rs. 25,000/- in a separate proceeding under Section 140 of M.V. Act on the principle of no fault liability as awarded by learned Claim Tribunal. Therefore, claimant Kavita Kumari shall be entitled to the compensation of Rs. 1,00,000/- (-) Rs. 25,000/- = Rs. 75,000/- together with interest @ 9% thereon from the date of filing of the claim petition which shall be payable to injured Kavita Kumari by way of a A/c. Payee Cheque within period of three months from the date hereof.

9. A copy of this Judgment be supplied to the respondent/the New India Assurance Company Ltd. forthwith for compliance. Let the Lower court Record along with a copy of judgement be sent down to the Learned Court below. Appeal is accordingly allowed, however, without any order as to costs.

I agree. RAJIV SHARMA, J.

(2015) 119 (3) CWN (Cal) 302

IN THE HIGH COURT AT CALCUTTA

(BEFORE INDIRA BANERJEE AND SAHIDULLAH MUNSHI, JJ.)

National Agricultural Cooperative
Marketing Federation of Indian Ltd. …Petitioner
Vs.
M/s R. Piyarelall Import & Export Ltd. …Respondent

G.A. 2518/2015; A.P.O.T. 337/2015; A.P. 174/2015; Ordinary Original Civil Jurisdiction; Original Side; Judgment on: 28.08.2015

A. Arbitration and Conciliation Act, 1996, Section 31(2), 34; Limitation Act, 1963, Section 5, 29(2) – Application for setting aside the award under Section 34 of the Act, 1996 - filed beyond the statutory period of 120 days from the date of receipt of the award - Arbitration Act is the special statute and to be followed without the influence of other provisions of law including Limitation Act – application is time barred and cannot be condoned under Section 5 of the Limitation Act.

Ratio decidendi:-
Arbitration Act is the special statute and to be followed without the influence of other provisions of law including Limitation Act. An application is time barred and cannot be condoned under Section 5 of the Limitation Act.

Observations of the Court:-
The 1996 Act is a special law and Section 34 thereof provides for a period of limitation different from that prescribed under the Limitation Act, 1963 as observed by the Supreme Court in Union of India Vs. Popular Construction Company reported in (2001) 8 SCC 470. In Popular Construction Company (supra), the Supreme Court reaffirmed that the mere stipulation of a period of limitation, howsoever peremptory the language, might not, in itself be sufficient to displace the applicability of Section 5 of the Limitation Act. The Supreme Court, however, held that the crucial words “but not thereafter” used in the proviso to sub-section (3) of Section 34 of the 1996 Act, would amount to express exclusion of Section 5 of the Limitation Act, under Section 29(2) of the said Act and would therefore bar the application of Section 5 of the Limitation Act, 1963.(para 6)
Moreover there is a vast difference between Section 31(5) of the 1996 Act and Section 14(2) of the Arbitration Act, 1940, under which the original award signed by the arbitrators or a copy of the award along with signatures of the arbitrators would have to be filed in Court as observed above so that judgment could be pronounced thereon. There was no requirement in law for the arbitrators to serve copies of the award on the respective parties. On the other hand, under Section 31(5) of the 1996 Act, copies of the award might have to be served to numerous parties in a multi-party arbitration, and it may not be feasible for the arbitrators to physically sign all the copies of the awards.(para 21)
We hold that the copy of the award and the copy of the corrigendum sent by the Registrar of the Indian Council of Arbitration to the appellant were signed copies of the award in that they were photo copies of the original award along with the photocopied signatures of the arbitrator, and duly certified by the Indian Council of Arbitrators. In our view, limitation started to run on 18th March, 2014, when the corrected award was received by the appellant and the application for setting aside of the award became barred by limitation on 16th June, 2014. The delay was condonable only by thirty days.(para 22)

Held:-
Delay beyond 30 days, not being condonable, the application under Section 34 of the 1996 Act, necessarily had to be filed in this Court within 26th November, 2014, that is the day after receipt of a certified copy of the order of Delhi High Court dismissing the Section 34 application. The learned Single Bench rightly held that the application under Section 34 of the 1996 Act was barred by limitation. The appeal is dismissed.

B. Date of knowledge of arbitral award to reckon limitation.

In State of Maharashtra Vs. ARK Builders reported in (2011) 4 SCC 616, the issue was, whether the period of limitation for making an application under Section 34 of the 1996 Act, for setting aside an arbitral award, was to be reckoned from the date on which a copy of the award was received by the applicant by any means or source, or whether it was to start running from the date a signed copy of the award was delivered to the applicant by the arbitrator. The Supreme Court held that the period of limitation prescribed under Section 34(3) of the 1996 Act, could only commence from the date on which the award was received by the applicant in the manner prescribed by law and/or in other words, in the manner for service of the award prescribed in Section 31(5) of the 1996 Act.(para 11)
On a conjoint reading of Sub-section 5 of Section 31 of the 1996 Act with Section 34(3) of the said Act, there can be no doubt that limitation would start running from the date of receipt of a signed copy of the award.(para 12)
There can be no doubt that the arbitral award would necessarily have to be signed by all the arbitrators or at least by the majority of the members of the arbitral tribunal. However, in our view, it was not the intention of legislature that all the copies of the award, dispatched to the respective parties would have to be separately signed by the Learned Arbitrators. A certified photocopy of the original award along with the signatures of the members of the Arbitral Tribunal would suffice. Had it been the legislative intent that all copies of the award required to be furnished to the respective parties to a multi party arbitration, should actually be signed by members of the arbitral tribunal themselves and/or in other words, each of the copies should contain the original signatures of the arbitrators, Parliament would, perhaps, not have used the expression ‘signed copy of the award’ but used the expression ‘a copy of the award, duly signed by the arbitrators’, in Section 31(5) of the 1996 Act.(para 15)

C. Signed Copy.

The meaning of the word “sign” as used in the expression “signed copy”. In Webster’s New World Dictionary, the word ‘sign” means “to write one’s name on as in acknowledging authorship, authorising action etc.” To write one’s name is signature. Section 3(56) of the General Clauses Act, 10 of 1897, has not defined the word “sign” but has extended its meaning with reference to a person who is unable to write his name to include “mark” with its grammatical variations and cognate expressions. This provision indicates that signing means writing one’s name on some document or paper. In Mohesh Lal v. Busunt Kumaree, a question arose as to what “signature” meant in connection with Section 20 of the Limitation Act, 9 of 1871. It was observed that ‘where a party to a contract signs his name in any part of it in such a way as to acknowledge that he is the party contracting, that is a sufficient signature”. It was further observed that the document must be signed in such a way as to make it appear that the person signing it is the author of it, and if that appears it does not matter what the form of the instrument is, or in what part of it the signature occurs.(para 17)
We accept these observations and are of the opinion that so long as there is the signature of the arbitrator or umpire on the copy of the award filed in court and it shows that the person signing authenticated the accuracy or correctness of the copy of the document would be a singed copy of the award. It would in such circumstances be immaterial whether the arbitrator or umpire put down the words “certified to be true copy” before signing the copy of the award. If anything, the addition of these words (namely, certified to be true copy) would be the clearest indication of the authentication of the copy as a true copy of the award, which is what Section 14(2) requires, so long as the authentication is under the signature of the arbitrator or the umpire himself.” (para 18)

Advocates who appeared in this Case:-
For the Petitioner: Mr. Raja Basu Chowdhury, Mr. Tapas Kumar Majumdar
For the Respondent: Mr. Ratnanko Banerjee

List of cases cited:-
Union of India Vs. Popular Construction Company, (2001) 8 SCC 470 (relied on)
Assam Urban Water Supply and Sewerage Board Vs. Subhash Projects and Marketing Limited, (2012) 2 SCC 624 (relied on)
Union of India Vs. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239 (relied on)
State of Maharashtra Vs. ARK Builders, (2011) 4 SCC 616 (referred to)
Hindustan Construction Company Ltd. Vs. Union of India, AIR 1967 SC 526 (referred to)

The Judgement of the Court was delivered by Indira Banerjee, J.:-

1. This appeal is against a judgement and order dated 29th June, 2015 passed by the learned Single Bench rejecting the application filed by the appellant, being AP No. 174 of 2015, under Section 34 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as ‘the 1996 Act’, for setting aside an award, made by an arbitral tribunal of three arbitrators of the Indian Council of Arbitration, on 21st February, 2014, in arbitration of disputes between the appellant and the respondent, as rectified by an order dated 4th March, 2014. The said application under Section 34 of the 1996 Act has been rejected on the ground that it had filed beyond a period of three months and thirty days from the date of receipt of the award, as corrected.

2. Section 34(3) provides as follows:-
“An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal :
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.”

3. The award as corrected was received by the appellant on 18th March, 2014. On 18th July, 2014 the appellant filed an application in Delhi High Court under Section 34 of the 1996 Act, challenging the said award. The said application was, however, dismissed by an order dated 11th November, 2014 on the ground that Delhi High Court lacked territorial jurisdiction to entertain the said application. A certified copy of the said order dated 11th November, 2014 was received by the appellant on 25th November, 2014. On 9th February, 2015, that is, about two and half months after the receipt of a certified copy of the order dated 11th November, 2014 of the Delhi High Court dismissing the said application, the appellant filed an application in this Court under Section 34 of the 1996 Act for setting aside the award, which has given rise to the judgment and order under appeal.

4. As noted by the learned Single Bench, the appellant had filed an application under Section 34 in the Delhi High Court, after a lapse of almost three months and thirty days from the date of receipt of the corrected award, or may be, a day short thereof. The Delhi High Court dismissed the application on 11th November, 2014. Even if the time between the date of filing of the setting aside application in the Delhi High Court, and the date of receipt of a certified copy of the order of the Delhi High Court, dismissing the said application is excluded, even then the application in this Court should have been filed, not later than on 26th November, 2014.

5. In view of Section 34(3) of the 1996 Act, delay beyond three months and thirty days, in filing an application under Section 34 of the 1996 Act, for setting aside an award, cannot be condoned under Section 5 of the Limitation Act, 1963. Section 29(2) of the Limitation Act, 1963 provides as follows:-
“Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law.”

6. The 1996 Act is a special law and Section 34 thereof provides for a period of limitation different from that prescribed under the Limitation Act, 1963 as observed by the Supreme Court in Union of India Vs. Popular Construction Company reported in (2001) 8 SCC 470. In Popular Construction Company (supra), the Supreme Court reaffirmed that the mere stipulation of a period of limitation, howsoever peremptory the language, might not, in itself be sufficient to displace the applicability of Section 5 of the Limitation Act. The Supreme Court, however, held that the crucial words “but not thereafter” used in the proviso to sub-section (3) of Section 34 of the 1996 Act, would amount to express exclusion of Section 5 of the Limitation Act, under Section 29(2) of the said Act and would therefore bar the application of Section 5 of the Limitation Act, 1963. To quote the Supreme Court “to hold that the Court could entertain an application to set aside an award, beyond the extended period of limitation under the proviso, should render the phrase “but not thereafter” wholly otiose. No principle of interpretation would justify such result.”

7. The proposition that the proviso to Section 34(3) bars the application of Section 5 of the Limitation Act, 1963, beyond the extended period of limitation also finds support from the judgment of the Supreme Court in Assam Urban Water Supply and Sewerage Board Vs. Subhash Projects and Marketing Limited reported in (2012) 2 SCC 624.

8. Mr. Raja Basu Chowdhury, appearing on behalf of the appellant submitted that limitation under Section 34(3) of the 1996 Act would only start running from the date of receipt of a signed copy of the award. Mr. Basu Chowdhury argued that the copy of the award that had been received by the appellant from the Indian Council of Arbitration was not a signed copy of the award. Limitation had, therefore, not started running. The application ought not to have been rejected on the ground that the same was barred by limitation.

9. Referring to Section 31(1) of the 1996 Act, Mr. Basu
Chowdhury argued, and rightly, that an arbitral award was required to be made in writing and signed by the members of the arbitral tribunal. However, in view of Section 31(2), in arbitral tribunal proceedings with more than one arbitrator, the signatures of the majority of the members of the arbitral tribunal would be sufficient, as long as the reason for any omitted signature was stated. Sub-section 5 of Section 31 requires that after an arbitral award is made, a signed copy thereof is to be delivered to each party, as pointed out by Mr. Basu Chowdhury.

10. As held by the Supreme Court in Union of India Vs. Tecco Trichy Engineers & Contractors reported in (2005) 4 SCC 239, “the delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, has to be ‘received’ by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings."

11. In State of Maharashtra Vs. ARK Builders reported in (2011) 4 SCC 616, cited by Mr. Basu Chowdhury, the issue was, whether the period of limitation for making an application under Section 34 of the 1996 Act, for setting aside an arbitral award, was to be reckoned from the date on which a copy of the award was received by the applicant by any means or source, or whether it was to start running from the date a signed copy of the award was delivered to the applicant by the arbitrator. The Supreme Court held that the period of limitation prescribed under Section 34(3) of the 1996 Act, could only commence from the date on which the award was received by the applicant in the manner prescribed by law and/or in other words, in the manner for service of the award prescribed in Section 31(5) of the 1996 Act.

12. On a conjoint reading of Sub-section 5 of Section 31 of the 1996 Act with Section 34(3) of the said Act, there can be no doubt that limitation would start running from the date of receipt of a signed copy of the award, as argued by Mr. Basu Chowdhury. In this case, the arbitration was conducted by the Indian Council of Arbitration, a Society sponsored by the Ministry of Commerce, Government of India, which is registered under the Societies Registration Act, 1860 and engaged in dispute resolution through arbitration. The award was duly signed by the three Learned Arbitrators. The Learned arbitrators put their signatures on each page of the award. A certified copy of the award was forwarded to the respective parties under cover of a letter being Ref No. ICA/2339/AC/1748/A-Post, dated 24th February, 2014 written by the Registrar of the Indian Council of Arbitration. The certified copy of the award, as sent, is a photo copy of the signed award. The signatures of the three arbitrators have been photocopied.

13. Similarly, under cover of a letter being Ref. No. ICA/2531/AC/1748/A-Post, dated 3rd March, 2014 signed by the Registrar of the Indian Council of Arbitration, a copy of an order dated 4th March, 2014, being the corrigendum to substitute Paragraph No. 66(a) of the award was forwarded to the respective parties.

14. The short question in this appeal is whether the copy of the award forwarded to the appellant was a signed copy of the award as contemplated in Section 31(5) of the 1996 Act. None of the judgments cited by Mr. Basu Chowdhury is an authority for the proposition that a signed copy under Section 31(5) would necessarily have to be a copy of the original award actually signed by the arbitrators themselves in original. As argued by Mr. Ratnanko Banerjee, Learned Senior Advocate appearing on behalf of the respondent, in State of Maharashtra Vs. ARK Builders (supra), the arbitrators had not supplied a copy of the award to the appellants. The award holder had, however, forwarded a photocopy of the award to the appellant and claimed payment in terms of the award. It was in the background of the aforesaid facts that the Supreme Court held that limitation would run from the time the award duly signed, was received by the appellant, from the arbitrator. The Supreme Court did not consider the question of whether the copies served by the arbitrators to the parties concerned would all have to actually and separately be signed by the arbitrators themselves.

15. There can be no doubt that the arbitral award would necessarily have to be signed by all the arbitrators or at least by the majority of the members of the arbitral tribunal. However, in our view, it was not the intention of legislature that all the copies of the award, dispatched to the respective parties would have to be separately signed by the Learned Arbitrators. A certified photocopy of the original award along with the signatures of the members of the Arbitral Tribunal would suffice. Had it been the legislative intent that all copies of the award required to be furnished to the respective parties to a multi-party arbitration, should actually be signed by members of the arbitral tribunal themselves and/or in other words, each of the copies should contain the original signatures of the arbitrators, Parliament would, perhaps, not have used the expression ‘signed copy of the award’ but used the expression ‘a copy of the award, duly signed by the arbitrators’, in Section 31(5) of the 1996 Act.

16. In Hindustan Construction Company Ltd. Vs. Union of India reported in AIR 1967 SC 526, cited by Mr. Basu Chowdhury, the Supreme Court considered what was a signed copy of the award, in the context of Section 14(2) of the Arbitration Act, 1940, which required the arbitrators to cause the award or a signed copy of it, together with depositions and documents which might have been taken or proved before them, to be filed in Court, so that judgment could be pronounced thereon. In Hindustan Construction Company Ltd. Vs. Union of India (supra), it was not in dispute before the Supreme Court that the original award had not been filed in Court. The dispute was, whether the document filed was a signed copy of the award, as the respondent contended that what had been filed, was a certified copy of the award and not a signed copy thereof, and therefore could not be acted upon. In the context of the disputes before the Supreme Court, the Supreme Court held:
“……..Obviously, therefore a copy means a document prepared from the original which is an accurate or true copy of the original. In Webster’s New Dictionary, the word “copy” means “a thing made just like another; full reproduction or transcription”. What the word “copy” in Section 14(2) therefore requires is that it must be a full reproduction of the original and that it should be accurate or true. When a document is an accurate or true and full reproduction of the original it would be a copy. In the present case it is not in dispute that what was produced by Sri Dildar Hussain was a true or accurate and full reproduction of the original. It was therefore a copy of the original, and the only question that remains is whether it was signed for if it was signed, it would be a signed copy.

17. This brings us to the meaning of the word “sign” as used in the expression “signed copy”. In Webster’s New World Dictionary, the word ‘sign” means “to write one’s name on, as in acknowledging authorship, authorising action etc.” To write one’s name is signature. Section 3(56) of the General Clauses Act, 10 of 1897, has not defined the word “sign” but has extended its meaning with reference to a person who is unable to write his name to include “mark” with its grammatical variations and cognate expressions. This provision indicates that signing means writing one’s name on some document or paper. In Mohesh Lal v. Busunt Kumaree, a question arose as to what “signature” meant in connection with Section 20 of the Limitation Act, 9 of 1871. It was observed that ‘where a party to a contract signs his name in any part of it in such a way as to acknowledge that he is the party contracting, that is a sufficient signature”. It was further observed that the document must be signed in such a way as to make it appear that the person signing it is the author of it, and if that appears it does not matter what the form of the instrument is, or in what part of it the signature occurs.

18. We accept these observations and are of the opinion that so long as there is the signature of the arbitrator or umpire on the copy of the award filed in court and it shows that the person signing authenticated the accuracy or correctness of the copy of the document would be a singed copy of the award. It would in such circumstances be immaterial whether the arbitrator or umpire put down the words “certified to be true copy” before signing the copy of the award. If anything, the addition of these words (namely, certified to be true copy) would be the clearest indication of the authentication of the copy as a true copy of the award, which is what Section 14(2) requires, so long as the authentication is under the signature of the arbitrator or the umpire himself.”

19. A judgment is an authority for the proposition of law that is raised and decided. The judgment in Hindustan Construction Company Ltd. (supra), rendered in the context of Section 14(2) of Arbitration Act, 1940, is not an authority for the proposition that a certified photo copy of the original award signed by the arbitrators, would not be a ‘signed copy’ as contemplated in Section 31(5) of the 1996 Act. In any case, this Court cannot be oblivious of the technical developments that have taken place over the last three or four decades.

20. When Section 14(2) of the Arbitration Act, 1940 was enacted, or even when the judgment in Hindustan Construction Company Ltd. Vs. Union of India (supra) was pronounced, photocopies, faxed copies, computer print outs with digital signatures, computerized scanned copies, e-mails etc., were not in contemplation. Copies of documents were generally handwritten copies, cyclostyled copies, typed copies or may be carbon copies, which needed to be authenticated by affixation of signature. In recent years, there has been a rise in the popularity of institutionalized arbitration. Just as the arbitration in this case has been conducted under the aegis of the ICA (Indian Council of Arbitration), there are many other established, recognized institutions which also conduct arbitrations. In case of institutional arbitrations, as in this case, we see no reason why photocopies of the award with photocopied signatures, or digitally signed awards, duly certified by an authorized office bearer of the institution, conducting the arbitration, should not satisfy the requirement of Section 31(5) of the 1996 Act.

21. Moreover there is a vast difference between Section 31(5) of the 1996 Act and Section 14(2) of the Arbitration Act, 1940, under which the original award signed by the arbitrators or a copy of the award along with signatures of the arbitrators would have to be filed in Court as observed above so that judgment could be pronounced thereon. There was no requirement in law for the arbitrators to serve copies of the award on the respective parties. On the other hand, under Section 31(5) of the 1996 Act, copies of the award might have to be served to numerous parties in a multi-party arbitration, and it may not be feasible for the arbitrators to physically sign all the copies of the awards.

22. We hold that the copy of the award and the copy of the corrigendum sent by the Registrar of the Indian Council of Arbitration to the appellant were signed copies of the award in that they were photo copies of the original award along with the photocopied signatures of the arbitrator, and duly certified by the Indian Council of Arbitrators. In our view, limitation started to run on 18th March, 2014, when the corrected award was received by the appellant and the application for setting aside of the award became barred by limitation on 16th June, 2014. The delay was condonable only by thirty days.

23. The petition in Delhi High Court was filed on 18th July, 2013, that is 3 months and thirty days, or may be one day less as observed above. Delay beyond 30 days, not being condonable, the application under Section 34 of the 1996 Act, necessarily had to be filed in this Court within 26th November, 2014, that is the day after receipt of a certified copy of the order of Delhi High Court dismissing the Section 34 application. The learned Single Bench rightly held that the application under Section 34 of the 1996 Act was barred by limitation. The appeal is dismissed.

24. Urgent Photostat certified copy, if applied for, be delivered to the learned counsel for the parties, upon compliance of all usual formalities.

I Agree. Sahidullah Munshi, J.

Later:
Mr. Tapas Kr. Majumdar, learned Advocate appearing on behalf of the respondent, prays for stay of operation of this judgment and order. The prayer is considered and declined.

(Indira Banerjee, J.) (Sahidullah Munshi, J.)

………………..

(2015) 119 (3) CWN (Cal) 317

IN THE HIGH COURT AT CALCUTTA

(BEFORE ANIRUDDHA BOSE AND SANKAR ACHARYYA, JJ.)

Re. Kunal Kumar Ghosh …Petitioner

C.R.M. 6911 of 2015; Appellate Side; Judgment on: 07.09.2015
Re: Application under section 439 of the Code of Criminal Procedure, 1973 filed on 23.07.2015 in connection with Case No. R.C. 06/S/2014 corresponding to T.R. No. 84 of 2014 under sections 120B/420/409 of the Indian Penal Code, 1860 read with sections 4/6 of the Prize Chits and Money Circulation Schemes (Banning) Act 1978

Code of Criminal Procedure, 1973, Section 439; Indian Penal Code, 1860, Sections 120B, 420, 409; Prize Chits and

Money Circulation Schemes (Banning) Act 1978, Section 4, 6 – cancellation of bail - petitioner is in custody since February, 2013 in connection with a case relating to offence under Section 120B, 420, 409 IPC – lapse about seven months from his earlier bail application was rejected – since January, 2015 there was no interrogation by the CBI or any other agency – CBI are still on money trial - no major recovery or tracking of the money trial – investigation is in progressing – Petitioner is an influential person – investigation may be interfered with the petitioner’s influence – the ratio of law as decided by the Apex Court in Kalyan Chandra Sarkar (Supra) is followed – considering the dimension of the offence alleged, prayer for bail is rejected.

Ratio decidendi:-
Petitioner is an influential person. The investigation may be interfered with the petitioner’s influence. The ratio of law as decided by the Apex Court in Kalyan Chandra Sarkar (Supra) is followed.

Observations of the Court:-
Referring to a decision of the Supreme Court in the case of Gudikanti Narasimhulu & Ors. Vs. Public Prosecutor, High Court of Andhra Pradesh [(1978) 1 SCC 240], Mr. Kapoor has argued that considering the provisions of Article 21 of the Constitution of India, an accused cannot be kept under detention for an unlimited period pending trial. He has also cited two authorities, Gurcharan Singh & Ors. Vs. State (Delhi Administration) [(1978) 1 SCC 118] and Susanta Ghosh Vs. State of West Bengal [(2012) 2 SCC 680] in which the factors for considering pre-trial bail application were specified to be likelihood of fleeing from justice and possibility of tampering with evidence or investigation. According to Mr. Kapoor, both these factors weigh in favour of the petitioner in this case. On the aspect of there being earlier rejection of bail application of the petitioner by a Coordinate Bench of this Court, Mr. Kapoor’s contention is, relying on another decision of the Supreme Court in the case of Babu Singh & Ors. Vs. State of U.P. [(1978) 1 SCC 579], that an order rejecting an application for bail does not, by itself, preclude consideration for bail on a subsequent occasion, giving more details, further developments and different considerations. These legal principles have been re-affirmed in a more recent judgment of the Supreme Court in the case of Sanjay Chandra Vs. Central Bureau of Investigation [(2012) 1 SCC 40].(para 3)
In Nimmagadda Prasad Vs. Central Bureau of Investigation [(2013) 7 SCC 46666], Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation [(2013) 7 SCC 439, Central Bureau of Investigation Vs. V. Vijay Sai Reddy [(2013) 7 SCC 452], which are all cases arising out of scams of multi-million rupees, involving misuse of public funds, and submitted that in this genre of cases, stricter approach is necessary while considering the questions of granting bail to an accused, and the investigating agency ought to be given longer time to complete further investigation even after filing of charge sheet if it is considered necessary, keeping the accused in custody.(para 5)
In the case of Kalyan Chandra Sarkar Vs. Rajesh Ranjan [(2004) 7 SCC 528], the factors for consideration of second bail application after rejection of the first one has been highlighted. It has been held that in such a situation, there is a further onus on the Court to consider the subsequent application for grant of bail by noticing the grounds on which the earlier bail application was rejected. If after such consideration, the Court opines that bail ought to be granted, then specific reason has to be given by the Court as to why in spite of earlier rejection, the subsequent application for bail is to be granted.(para 6)
The fact that an applicant is a member of Parliament has been found by the Supreme Court in the case of Rajesh Ranjan Yadav Vs. CBI [(2007) 1 SCC 70] to be not a relevant consideration, as the law is no respecter of persons, and is the same for everyone. Certain other authorities were also referred to on behalf of the CBI, broadly laying down the same principles of law. We do not consider it necessary to refer to all those authorities in this order.(para 7)
Applying the principles of law enunciated in the case of Babu Singh & Ors. (supra), what is necessary for allowing the application of the petitioner is more details, further developments and factors for fresh consideration. So far as the case of the petitioner is concerned, barring lapse of about seven months since his earlier bail application was rejected there is practically no other factor in his favour. It has however been submitted on his behalf that after January 2015, he does not appear to have been interrogated by the CBI or any other agency.(para 9)
The CBI, on the other hand is that they are still on the money trail, and the investigation is progressing, which may be interfered with by his influence if he is enlarged on bail. No major recovery or tracking the money tail, according to the CBI, has been possible as yet, though investigation is progressing.(para 10)

Held:-
But considering the dimension of the offence alleged, we do
not think there are sufficient factors for reconsidering the petitioner’s prayer for bail following the ratio of the decision of the Supreme Court in the case of Kalyan Chandra Sarkar (supra).

Advocates who appeared in this Case:-
Mr. Ayan Bhattacharjee, Mr. Ayan Chatterjee. …for the Petitioner
Mr. Ashraf Ali ….for the CBI
List of cases cited:-
Subrata Chattoraj Vs. Union of India & Ors., (2014) 8 SCC 768 (relied on)
Gudikanti Narasimhulu & Ors. Vs. Public Prosecutor, High Court of Andhra Pradesh, (1978) 1 SCC 240 (referred to)
Gurcharan Singh & Ors. Vs. State (Delhi Administration), (1978) 1 SCC 118 (referred to)
Susanta Ghosh Vs. State of West Bengal, (2012) 2 SCC 680 (referred to)
Babu Singh & Ors. Vs. State of U.P., (1978) 1 SCC 579 (relied on)
Sanjay Chandra Vs. Central Bureau of Investigation, (2012) 1 SCC 40 (relied on)
Nimmagadda Prasad Vs. Central Bureau of Investigation, (2013) 7 SCC 46666 (referred to)
Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation, (2013) 7 SCC 439 (referred to)
Central Bureau of Investigation Vs. V. Vijay Sai Reddy, (2013) 7 SCC 452 (referred to)
Kalyan Chandra Sarkar Vs. Rajesh Ranjan, (2004) 7 SCC 528 (referred to)
Rajesh Ranjan Yadav Vs. CBI, (2007) 1 SCC 70 (relied on)

1. The petitioner is in custody since 23rd February, 2013 in connection with a case relating to offences under Sections 120B/420/406 of the Indian Penal Code and under Sections 4/6 of the Prize Chits and Money Circulation Schemes (Banning) Act 1978.

2. Initially, the investigation was started by the State police and subsequently, in terms of a judgment of the Supreme Court in the case of Subrata Chattoraj Vs. Union of India & Ors. [(2014) 8 SCC 768], the case was transferred to the Central Bureau of Investigation. This judgment was delivered on 9th May, 2014. Charge sheet has been filed on 22nd October, 2014, adding Section 409 of the Indian Penal Code. On 4th September, 2014, the petitioner was shown arrested in this case by the Central Bureau of Investigation and was taken into judicial custody on the prayer of the CBI. The petitioner had earlier applied for bail on 22nd January, 2015 (CRM No. 17826 of 2014), which was rejected by the coordinate bench of this Court.

3. Mr. Kapoor, learned Senior Counsel assisted by Mr. Ayan Bhattacharjee, learned Counsel appearing for the petitioner submitted that upon filing of charge sheet there is no further reason for detaining the petitioner. The petitioner is an M.P., a member of the Rajya Sabha having his family and residence in Kolkata and there is no likelihood of his fleeing from justice. According to him, there cannot be apprehension of tampering with evidence, as charge sheet has already been filed. He has referred to an order passed by a coordinate bench in respect of a co-accused in a case dealing with the same scam, being CRM 335 of 2015. The petitioner in that case, Rajat Kumar Majumder, has been enlarged on bail on 16th February, 2015. Referring to a decision of the Supreme Court in the case of Gudikanti Narasimhulu & Ors. Vs. Public Prosecutor, High Court of Andhra Pradesh [(1978) 1 SCC 240], Mr. Kapoor has argued that considering the provisions of Article 21 of the Constitution of India, an accused cannot be kept under detention for an unlimited period pending trial. He has also cited two authorities, Gurcharan Singh & Ors. Vs. State (Delhi Administration) [(1978) 1 SCC 118] and Susanta Ghosh Vs. State of West Bengal [(2012) 2 SCC 680] in which the factors for considering pre-trial bail application were specified to be likelihood of fleeing from justice and possibility of tampering with evidence or investigation. According to Mr. Kapoor, both these factors weigh in favour of the petitioner in this case. On the aspect of there being earlier rejection of bail application of the petitioner by a Coordinate Bench of this Court, Mr. Kapoor’s contention is, relying on another decision of the Supreme Court in the case of Babu Singh & Ors. Vs. State of U.P. [(1978) 1 SCC 579], that an order rejecting an application for bail does not, by itself, preclude consideration for bail on a subsequent occasion, giving more details, further developments and different considerations. These legal principles have been re-affirmed in a more recent judgment of the Supreme Court in the case of Sanjay Chandra Vs. Central Bureau of Investigation [(2012) 1 SCC 40].

4. Appearing for the investigating agency, Mr. K. Raghavacharyulu assisted by Mr. Ali, learned Counsel has contested the plea for bail of the petitioner. He asserted that the petitioner is involved in an offence being investigated, which is a scam running into approximately rupees two thousand and five hundred cores, of which an insignificant amount has been tracked. His contention is that investigation is continuing and the petitioner being an influential person, he is likely to interfere with proper investigation.

5. As regards the order of bail already granted to Rajat Kumar Majumder, he has submitted that the CBI has preferred a petition for special leave to appeal against that order. He has also brought to our notice the bail applications of two other accused persons pertaining to the same scam, Madan Gopal Mitra (CRM No. 6575 of 2015) and Sadananda Gogoi (CRM No. 4146 of 2015). Both these applications have been rejected on 6th August, 2015 and 20th July, 2015 respectively. Mr. Raghavacharyulu cited the judgments of the Supreme Court in the cases of Nimmagadda Prasad Vs. Central Bureau of Investigation [(2013) 7 SCC 46666], Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation [(2013) 7 SCC 439, Central Bureau of Investigation Vs. V. Vijay Sai Reddy [(2013) 7 SCC 452], which are all cases arising out of scams of multi-million rupees, involving misuse of public funds, and submitted that in this genre of cases, stricter approach is necessary while considering the questions of granting bail to an accused, and the investigating agency ought to be given longer time to complete further investigation even after filing of charge sheet if it is considered necessary, keeping the accused in custody.

6. In the case of Kalyan Chandra Sarkar Vs. Rajesh Ranjan [(2004) 7 SCC 528], the factors for consideration of second bail application after rejection of the first one has been highlighted. It has been held that in such a situation, there is a further onus on the Court to consider the subsequent application for grant of bail by noticing the grounds on which the earlier bail application was rejected. If after such consideration, the Court opines that bail ought to be granted, then specific reason has to be given by the Court as to why in spite of earlier rejection, the subsequent application for bail is to be granted.

7. The fact that an applicant is a member of Parliament has been found by the Supreme Court in the case of Rajesh Ranjan Yadav Vs. CBI [(2007) 1 SCC 70] to be not a relevant consideration, as the law is no respecter of persons, and is the same for everyone. Certain other authorities were also referred to on behalf of the CBI, broadly laying down the same principles of law. We do not consider it necessary to refer to all those authorities in this order.

8. Turning to the factual background of this application, we do not think there is further scope of assessing the complicity of the petitioner in the offences alleged against him at this stage. Charge-sheet has been filed against the petitioner. His complicity in the alleged offence cannot be ruled out. A coordinate bench has earlier rejected the bail application of the petitioner after filing of the charge sheet.

9. Applying the principles of law enunciated in the case of
Babu Singh & Ors. (supra), what is necessary for allowing the application of the petitioner is more details, further developments and factors for fresh consideration. So far as the case of the petitioner is concerned, barring lapse of about seven months since his earlier bail application was rejected there is practically no other factor in his favour. It has however been submitted on his behalf that after January 2015, he does not appear to have been interrogated by the CBI or any other agency. This has been pleaded in paragraph 12 of the petition.

10. Case of the CBI, on the other hand is that they are still on the money trail, and the investigation is progressing, which may be interfered with by his influence if he is enlarged on bail. No major recovery or tracking the money tail, according to the CBI, has been possible as yet, though investigation is progressing. We have perused the case diary and in particular the statements recorded under Sections 161 of the Code of Criminal Procedure, 1973, on 3rd February, 2015, 2nd March, 2015, 24th July, 2015, the statement recorded under Section 164 of the Code on 19th August, 2015 as also recordal on investigation process on 18th August, 2015 in the case diary.

11. Considering these materials, we do not think the petitioner’s prayer for bail can be granted at this stage. We have taken note of Mr. Kapoor’s submission that there is little possibility of conclusion of actual trial in near future. But considering the dimension of the offence alleged, we do not think there are sufficient factors for reconsidering the petitioner’s prayer for bail following the ratio of the decision of the Supreme Court in the case of Kalyan Chandra Sarkar (supra). The CBI however may make efforts for early trial in this matter. The prayer for bail of the petitioner is accordingly rejected.

……………………….

(2015) 119 (3) CWN (Cal) 326

IN THE HIGH COURT AT CALCUTTA

(BEFORE GIRISH CHANDRA GUPTA
AND SHIB SADHAN SADHU, JJ.)

Dr. Kunal Saha …Appellant
Vs.
The State of West Bengal & Anr. …Respondent

M.A.T.No.916 of 2015 + CAN 6025 of 2015; Civil Appellate Jurisdiction; Appellate Side; Judgment on: 10.09.2015

Constitution of India, Article 144, 226 - Petitioner is NRI (Resident of USA) – petitioner with his wife came to Kolkata in 1998 – wife was hospitalised and was under the treatment by a team of doctors – alleged medical negligence of the Respondent No.2 (doctor), the wife of the petitioner died – petitioner instituted civil and criminal cases against the doctors including Respondent No.2 and they were found guilty – Apex Court interfered with the charge under Section 304A of IPC but civil liabilities were fixed – National Commission also held against the doctors and fixed damages – subsequently, the petitioner came to know that Respondent No.2 was selected for prestigious ‘Bangabibhushan’ award of the State - it was challenged by the petitioner –– writ petition was disposed of on the ground that petitioner had no ‘locus standi’ – in exercise of power of granting award, the state owes a duty to ensure that such powers are to be exercised strictly in accordance with the prescribed norms – no such norms have either been identified or alleged to have been followed in the conferring award – it was not open to the Writ Court to decide the question of ‘locus standi’ in isolation - once the writ petition was admitted and direction for final hearing was given, it was incumbent upon the Writ Court to hear out the petition in its entirety – decision of the Writ Court is patently contrary to the view taken by this Court and the Apex Court.

Ratio decidendi:-
It was not open to the Writ Court to decide the question of ‘locus standi’ in isolation. Once the writ petition was admitted and direction for final hearing was given, it was incumbent upon the Writ Court to hear out the petition in its entirety.

Observations of the Court:-
The cause of action for the present writ petition as alleged by the petitioner is that the State capriciously and in violation of Article 144 chose to confer the honour of “Bangabibhushan” on the respondent No.2 in May 2014, when the Supreme Court in its judgment pronounced on 24th October, 2013 held that the respondent no.2 “has shown utmost disrespect to his profession by being so casual in his approach in treating his patient. Moreover on being charged with the liability he attempted to shift the blame on other doctors.(para 13)
In other words, the question of sufficient interest cannot, in such cases, be considered in the abstract, or as an isolated point: it must be taken together with the legal and factual context. The rule requires sufficient interest in the matter to which the application relates. This, in the present case, necessarily involves the whole question of the duties of the Inland Revenue and the breaches or failure of those duties of which the respondents complain.(para 18)
Lords Diplock and Scarman agreed with the aforesaid views of Lord Wilberforce. The aforesaid judgment of the House of Lords was considered by Their Lordships in the case of S. P. Gupta (supra) wherein their Lordships held in favour of the locus standi of the learned advocates to challenge the circular issued by the Ministry seeking to transfer the Judges and a host of such other issues. The judgment of the House of Lords was also considered by a learned Single Judge of this Court in the case of S. N. Bose –Vs- State of West Bengal reported in 1984 (1) CHN 110. The writ petitioner in that case was aggrieved by renaming of Bose Para Lane in the Bagbazar area as Maa Saradamoni Sarani. The writ petition was allowed. A writ in the nature of mandamus was issued directing that no further effect be given to the decision to rename the Bose Para Lane.(para 19)
Locus standi to approach by way of writ petition and Refusal to grant relief in equity jurisdiction are two different aspects, may be with the same result. One relates to maintainability of the petition and other to exercise of discretion. Law on the former has marched much ahead. Many milestones have been covered. The restricted meaning of aggrieved person and narrow outlook of specific injury has yielded in favour of broad and wide construction in the wake of public interest litigation. Even in private challenge to executive or administrative action having extensive fall out the dividing line between personal injury or loss and injury of a public nature is fast vanishing. Law has veered round from genuine grievance against order affecting prejudicially to sufficient interest in the matter. The rise in exercise of power by the executive and comparative decline in power and effective administrative guidance is forcing citizens to expose challenges with public interest flavour. Therefore, it is too late in the day to claim that petition filed by inhabitants of a locality whose park was converted into a nursing home had no cause to invoke equity jurisdiction of the High Court.(para 20)
In the case of S. N. Patil –Vs- Dr. M. M. Gosavi reported in (1987) 1 SCC 227 the following views were expressed:-
“The allegations made in the petition disclose a lamentable state of affairs in one of the premier universities of India. The petitioner might have moved in his private interest but enquiry into the conduct of the examiners of the Bombay University in one of the highest medical degrees was matter of public interest. Such state of affairs having been brought to the notice of the court, it was the duty of the court to the public that the truth and the validity of the allegations made be inquired into. It was in furtherance of public interest that an enquiry into the state of affairs of public institution becomes necessary and private litigation assumes the character of public interest litigation and such an enquiry cannot be avoided if it is necessary and essential for the administration of justice."(para 22)
where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.(para 25)
Even assuming that the aforesaid contention of the State is correct in so far as purport of Article 144 of the Constitution is concerned, there can be no denial of the fact that the direction of the Supreme Court in the case of Balaji Raghavan (supra) both to the Union of India and the States to frame guidelines before conferring awards, does not appear to have been complied with before granting the award to the respondent No.2. The largess extended by the State in the form of award including monetary benefit would also be contrary to the judgment in the case of Ramanna –Vs- International Airport Authority (supra) if the State fails to demonstrate that the award was conferred in accordance with the prescribed norms. The reasons advanced by the learned Trial Court to answer the question of locus standi in the negative are patently contrary to the view taken by this Court and the Apex Court.(para 28)

Held:-
We already have indicated our reasons as to why is the impugned judgment and order are not sustainable and are, therefore set aside. The writ petition is remanded to the learned Trial court for hearing on merits. It is clarified that the views expressed herein are for the purpose of disposal of this appeal which shall not preclude the Trial Court from arriving at its own conclusion in accordance with law.

Advocates who appeared in this Case:-
Dr.Kunal Saha …For the Appellant (In Person)
Mr.Samrat Sen, Mr.Amitava Mitra …For the State
Mr. Pratap Chatterjee, Mr.Debojyoti Dutta, Mr.S. Mukherjee, Mr. M. Roy, Mr. M. Mitra … For the Respondent No.2

List of cases cited:-
Malay Kumar Ganguly Vs. Dr.Sukumar Mukherjee & Ors. and Kunal Saha Vs. Sukumar Mukerjee & Ors., (2009) 9 SCC 221 (relied on)
Balaram Prasad Vs. Kunal Saha & Ors., (2014) 1 SCC 384 (relied on)
S. P. Gupta & Others Vs. President of India & Ors., AIR 1982 SC 149 (relied on)
Vinoy Kumar Vs. State of U.P., (2001) 4 SCC 734 Para 2 (relied on)
State of U.P. & Anr. Vs. Johri Mal, (2004) 4 SCC 714 Para 36 (relied on)
Ravi Yashwant Bhoir Vs. District Collector, Raigad & Ors., (2012) 4 SCC 407, Para 58 to 60 (relied on)
Ayaaubkhan Noorkhan Pathan Vs. State of Maharashtra & Ors., (2013) 4 SCC 465, Para 9, 10 & 17 (relied on)
Ishwar Dutt Vs. Land Acquisition Collector & Anr. reported in AIR 2005 SC 3165, Para 28 (relied on)
Balaji Raghavan Vs. Union of India, (1996) 1 SCC 361 (relied on)
S. G. Jaisinghani Vs. Union of India & Ors., AIR 1967 SC 1427 (relied on)
United States Vs. Wunderlich, (1951) 342 US 98 (referred to)
John Wilkes, (1770) 4 Burr 2528 at p.2539 (referred to)
Inland Revenue Commissioners Vs. National Federation of Self-Employed & Small Businesses Ltd., (1982) AC 617 (referred to)
S. N. Bose Vs. State of West Bengal, 1984 (1) CHN 110 (relied on)
Bangalore Medical Trust Vs. B. S. Muddappa & Ors., AIR 1991 SC 1902 (relied on)
S. N. Patil Vs. Dr. M. M. Gosavi, (1987) 1 SCC 227 (relied on)
M. S. Jayaraj Vs. Commissioner of Excise, Kerala & Ors., (2000) 7 SCC 552 (relied on)
Indian Banks’ Association & Ors. Vs. Devkala Consultancy Service & Ors., (2004) 11 SCC 1 (relied on)
Ramanna Vs. International Airport Authority of India & Ors., AIR 1979 SC 1628 (relied on)
Shri Anadi Mukta Sadguru S.M.V.S.J.M.S. Trust Vs. V.R. Rudani, AIR 1989 SC 1607 (relied on)
Binoy Kumar and Others Vs. State of U.P. and Ors., (2001) 4 SCC 734 (relied on)

The Judgment of the Court was delivered by Girish Chandra Gupta J.:-

1. The subject-matter of challenge in the appeal is a judgment and order dated 22nd December, 2014 by which the Learned Trial Court dismissed the writ petition on the ground that the petitioner had no locus standi and was not entitled to maintain the writ petition. Briefly stated the facts and circumstances of the case are as follows:-
The writ petitioner, ordinarily a resident of the United States of America, accompanied by his wife Anuradha Saha came to Kolkata in the year 1998. Anuradha developed skin allergy. She was hospitalized and treated by a team of doctors comprising amongst others the respondent No.2. It was alleged that due to gross medical negligence of the respondent No.2 Dr. Sukumar Mukherjee, amongst others, she died. The petitioner instituted both civil and criminal cases against the doctors including the respondent No.2 seeking to hold them liable for medical negligence which ultimately was decided in his favour on 7th August, 2009 in the case of Malay Kumar Ganguly –Vs- Dr. Sukumar Mukherjee & Ors. and Kunal Saha –Vs- Sukumar Mukerjee & Ors. reported in (2009) 9 SCC 221. The Supreme Court held that:-
“The treatment line followed by Dr. Mukherjee which entailed administration of 80 mg of depomedrol injection twice is not supported by any school of thought. The treatment line, in this case, does not flow from any considered affinity to a particular school of thought, but out of sheer ignorance of basic hazards relating to use of steroids as also lack of judgment. ”

2. While the Supreme Court did not interfere with the order of acquittal from charge under Section 304A of the Indian Penal Code but civil liability was fixed. The judgment of the National Commission holding to the contrary was set aside, the matter was remitted to the National Commission for determining the amount of compensation. Costs assessed at a sum of Rs.1,00,000/- was imposed upon the respondent No.2. In an appeal from the order of the National Commission the matter was ultimately decided by a judgment of the Supreme Court passed on 24th October, 2013 in the case of Balaram Prasad –Vs- Kunal Saha & Ors. reported in (2014) 1 SCC 384 wherein the Supreme Court referring to respondent No.2 held as follows:-
“Since he is a senior doctor who was in charge of the treatment of the deceased, we are inclined to mention here that Dr. Mukherjee has shown utmost disrespect to his profession by being so casual in his approach in treating his patient. Moreover, on being charged with the liability, he attempted to shift the blame on other doctors. We, therefore, in the light of the facts and circumstances, direct him to pay a compensation of Rs.10 lakhs to the claimant in lieu of his negligence and we sincerely hope that he upholds his integrity as a doctor in the future and not be casual about his patients’ lives.”

3. The case of the writ petitioner is that he was shocked to know from a news item published in ‘Ei Samay’ on Friday 16th May, 2014 disclosing that 14 persons including the respondent No.2 herein had been selected for the prestigious “Bangabibhushan” award. He challenged the aforesaid act of the State by the present writ petition contending, inter alia as follows in paragraph 7:-
“That being deeply aggrieved, hurt and dissatisfied with the arbitrary, capricious and mala fide decision of Respondent no.1 with a mindless and deliberate attempt to glorify Respondent no.2 by selecting him to receive the prestigious “Bangabibhushan ” award for his illustrious medical service which is in sharp contrast to the observations made by two separate benches of the Hon’ble Supreme Court that has found respondent No.2 as a negligent, reckless and unethical doctor (2009) SCC 9 221; (2014) SCC 1, 384, ….. ”

4. The writ petition was moved upon notice on 20th May, 2014 which was also the day when the awards were to be given away. Prayer for an interim order restraining the State from conferring award upon the respondent No.2 was made. On behalf of the State locus standi of the writ petitioner was challenged. The writ petition was admitted with the direction that the grant of the award shall be subject to the result of the writ petition. To be precise the following observations were made while passing the aforesaid order.
“This Court is of the opinion that it will be necessary to consider at the stage of further hearing of this writ petition, the rationale behind the administrative decision to confer the award on the respondent no.2 in the face of the aforementioned observations and findings of the Hon’ble Apex Court. It is brought to the attention of this Court that the present writ petition being moved at the eleventh hour, it is not possible for the respondent no.1 to arm itself with the records pertaining to the decision making process behind the grant of the award in favour of the respondent no.2. It is thus necessary to call for a comprehensive affidavit on the part of the respondents, particularly, the respondent no.1 to explain the rationale behind the decision to grant the award in favour of the respondent no.2. Such explanation becomes necessary in the context of the settled law that the writ court must examine the decision making process. This Court also holds that in the particular facts and circumstances of the case, the locus standi of the writ petitioner to prefer the present writ application cannot be ignored. However, in the absence of further materials from the respondent no.1 explaining the decision making process behind the grant of the award as challenged before this Court, this Court does not think it fit to stay the grant of such award at the present stage. However, this Court makes it abundantly clear that the grant of the said award shall be subject to the result of the writ petition. ”

5. The State in its affidavit-in-opposition affirmed by Sri R. N. Basu Roychowdhuri challenged (a)locus standi of the writ petitioner stating inter alia that he was not a party aggrieved and contended that during the period of 16 years after the death of the petitioner’s wife the respondent No.2 made substantial contribution to the cause of medicine; (b)that the Committee constituted for the purpose of conferring the “Bangabibhushan” award also considered the order of the Hon’ble Supreme Court in its proper perspective and (c) the Committee considered the meritorious records of the respondent No.2 during the period between 1967-2008, a detailed meeting was held by the Committee constituted for the purpose of conferring the “Bangabibhushan” award on 17th May, 2014 and a copy of the minutes of the meeting dated 17th May, 2014 was disclosed from which it appears that the Chief Minister, the Finance Minister and three other Secretaries were present at the meeting. During such meeting 13 persons including the respondent No.2 were chosen for the “Bangabibhushan” award. The discussion which took place as regards the respondent No.2 when translated in English would read as follows:-
“The Hon’ble Supreme Court had censured Dr. Mukherjee for his faults. Dr. Mukherjee has also paid fine pursuant to the order of the Hon’ble Supreme Court. If this were to be taken into account that would amount to double jeopardy. He is still a renowned Physician and a teacher respected by all. The various awards received by him include National Excellence award of 1993. In the year 2008 he received “Dhanvantari” award. In the year 2006-07 he acted as the advisor to Royal College of Physicians an International Organisation. He deserves “Bangabibhushan” award for his lifetime achievement. ”

6. In reply to paragraph 7 of the contents of the writ petition, quoted above, the State had the following explanation to offer in paragraph 10 of its affidavit which reads as follows:-
“There was no mindless or deliberate attempt to glorify the respondent no.2 by selecting him to receive the prestigious “Bangabibhushan” award as alleged or at all. Rather, the respondent no.2 richly deserved the same for his illustrious medical service. It is denied that such conferment is in sharp contrast to the observations made by two separate Benches of the Hon’ble Supreme Court. The Hon’ble Apex Court had, no doubt, found the respondent no.2 guilty of negligent and reckless conduct with regard to his actions in a case pertaining to 1998. The Hon’ble Supreme Court did not condemn him for all times to come nor did the Hon’ble Supreme Court observe that despite subsequent exemplary accomplishments he could never redeem himself. It is denied that the selection of the respondent no.2 to receive the prestigious “Bangabibhushan” award in recognition of his role as an exceptional medical doctor in the State, infringes Article 144 of the Constitution. It is denied that the selection of the respondent no.2 to receive the “Bangabibhushan” award indicates to the ordinary citizens that which is the exact opposite view expressed by two Benches of the Hon’ble Apex Court. The description of the respondent no.2 as reckless or negligent or unethical was, it is respectfully submitted, in relation to a solitary case in a distinguished and otherwise unblemished career. It is denied that there is any glorification of the respondent no.2 with the prestigious “Bangabibhushan” award or that suggesting his outstanding contribution to medicine undermines the sanctity or credibility of the Hon’ble Apex Court or allegedly makes a mockery of the justice delivery system. ……….. It is denied that the best candidates from different professions have not been chosen to receive the “Bangabibhushan” award, being the highest honour from the state. This process has been conducted strictly on the basis of merit of the candidates in an impartial, transparent and honest manner. It is denied that rewarding the respondent no.2 with the “Bangabibhushan” award as an outstanding physician through a high-profile public ceremony on May 20, 2014 is a politically motivated or blatant attempt with a mala fide intention on the part of the respondent no.1 to restore the tarnished public image of the respondent no.2. ”

7. The respondent No.2 maintaining that the writ petitioner had no locus standi to present the writ petition offered the following justifications:-
“g. Save the wrongful and unjust slur on my reputation and character cast on me by the writ petitioner and save the allegation that my negligence, in part, contributed to the death of Late Anuradha Saha my career has been distinguished and unblemished so far.
h. The allegations and/or slur cast on my reputation, competence and ability by the writ petitioner are disbelieved by the city at large and by the scores of patients that I have both in Kolkata as well as all over India. Consequently, and as a result of my distinguished and significant contribution in the medical field, the State Government, in its absolute discretion, has decided on diverse steps which have been challenged by the writ petitioner. ”

8. When the writ petition came up for final hearing, contrary to the order dated 20th May, 2014 the learned Trial Court did not examine the rationale behind the administrative decision to confer the award on the respondent No.2 and chose instead to consider the preliminary objection as regards his locus standi to maintain the writ petition and held as follows:-
“There is no averment in the writ application as to whether any personal or individual right of the petitioner has been infringed or as to whether the petitioner has been prejudiced in any manner due to the grant of the said award, which is necessary for the petitioner to establish his locus standi. No issue of fraud has also surfaced through the pleadings. There is also no pleading to the effect that the procedural impropriety is of such a magnitude that it has operated to the severe detriment and prejudice to the petitioner. From the said averments it is explicit that no legally protected right of the petitioner, which can be judicially enforced, has been infringed save and except a psychological or an imaginary injury. The writ application being W. P. No.9758 (W) of 2011 has been preferred by the respondent no.2 herein challenging an order passed by the Medical Council of India and the other writ application being W.P. No.16879 (W) of 2012 is a public interest litigation preferred by the petitioner. Mr. Roy contends that in view of pendency the said writ applications, the locus standi of the petitioner cannot be questioned. Such contention of Mr. Roy is not acceptable since it has not been shown to this Court that the issue of locus of the petitioner herein has been considered and decided, in the backdrop of an identical fact situation involved in the instant lis. The judgment delivered in the case of Jasbhai (Supra) has been relied upon by the petitioner in support of the contention to the effect that in exceptional cases involving a grave miscarriage of justice, even a stranger to the proceedings can maintain a writ application. In the instant case no such exceptionality has occasioned and the said judgment is also distinguishable on facts inasmuch as in the same the appellant was a rival in the same trade being the proprietor of a Cinema Hall who challenged the grant of no objection certificate in favour of the private respondent. In the said judgment the Hon’ble Supreme Court also observed that the business competition, being a lawful activity, causing even pecuniary harm and loss of business is not wrongful in the eye of law because it does not result in injury to a legal right or a legally protected interest. The judgment delivered in the case of Gadda (Supra), as relied upon by the petitioner, is not applicable in the instant matter since the appellant therein was a representative of a committee who has all throughout represented the committee in all its dealings and such fact coupled with the acquiescence on the part of all the members of the said committee was recognized to be sufficient to maintain the writ application. The judgment delivered in the case of Bar Council of Maharashtra (Supra), as relied upon by the petitioner, is also distinguishable on facts inasmuch as in the backdrop of the facts to the effect that the Bar Council of a State is required to uphold the standards of professional conduct and etiquette in the profession and is the custodian of the high traditions of the noble profession, the State Bar Council was held to be an aggrieved person. The other two judgments in the cases of Bangalore Medical Trust (Supra) and Adarsha Shiksha Mahavidyalaya (Supra) have no manner of application in the instant case since the same were public interest litigations. The law relating to locus standi is now well-settled. The existence of a right and infringement thereto are the foundations of the exercise of jurisdiction under Article 226. Such right can either be a fundamental right or can be an ordinary legal right. When a person complaining of violation of a non-fundamental right, such legal right must either be a statutory one or other right or interest recognized by law. However, the rights that can be enforced under Article 226 must ordinarily be the rights of the petitioner himself except in the case of habeas corpus, quo warranto or public interest litigation. The instant writ application does not fall under the aforesaid three categories. Every right must involve a vinculum juris or bond of legal obligation. Amongst the petitioner and the respondents there is no such bond or co-relation. There is absolutely no scope for exercise of the writ powers only because the petitioner has brought to the notice the fact of grant of the award. The petitioner in the present case is aggrieved for glorification of the respondent no.2 through conferment of the award against whom the Hon’ble Supreme Court has made trenchant remarks which would be having a profound demoralization effect on all victims of medical negligence and public at large and would be extremely painful to the petitioner. The injury and prejudice as alleged to have been suffered by the petitioner has its roots on psychological anguish. Admittedly, the petitioner has no adversarial claim pertaining to such grant of award. The petitioner has endeavoured to establish that he has a personal cause of action when he has none. No legal right of the petitioner has been infringed he has not suffered any legal wrong or injury and is not prejudiced. In a private action, the litigation is bipolar; two opposed parties are locked in confrontational controversy which pertains to the determination of the legal consequences unlike in public action. The character of such litigation is essentially that of vindication of private rights, proceedings being brought by the persons in whom the right personally inheres. Such strict rule of locus standi is applicable to private litigation. The petitioner is not a competitor in the award giving process. The impugned conferment of the award does not operate as a decision against the petitioner much less it does not wrongfully affect his title to something. The petitioner has not been subjected to any legal wrong and he has suffered no legal grievances. For the reasons discussed above, I hold that the petitioner has no locus standi and is not entitled to maintain the present writ application and accordingly, I dismiss the writ application on the said ground.”

9. Aggrieved by the order the writ petitioner has come up in appeal. Appearing in person he submitted that the act of the State is arbitrary and capricious and is in patent violation of Article 14 of the Constitution of India. The act of choosing to confer the award on the respondent No.2 is an unholy attempt on the part of the State to restore his image and/or is an attempt to dilute the findings of the Apex Court and is also contrary to Article 144 of the Constitution of India. He also relied upon the judgment in the case of S. P. Gupta & Others –Vs- President of India & Ors. reported in AIR 1982 SC 149 to press the point that the question as regards locus standi has been freed from the shackles of the past and the restrictive concept of party aggrieved, has been liberalized.

10. Mr. Sen learned Senior Advocate appearing for the State submitted that the cause of the writ petitioner is either based on sentiment or is altogether imaginary. A sentiment or imaginary cause does not entitle him to present a petition invoking the jurisdiction under Article 226 of the Constitution. In support of his submissions he relied upon the following judgments:-
1. Vinoy Kumar –Vs- State of U.P. reported in (2001) 4 SCC 734 Para 2
2. State of U. P. & Anr. –Vs- Johri Mal reported in (2004) 4 SCC 714 Para 36
3. Ravi Yashwant Bhoir –Vs- District Collector, Raigad & Ors. reported in (2012) 4 SCC 407 Para 58 to 60
4. Ayaaubkhan Noorkhan Pathan –Vs- State of Maharashtra & Ors. reported in (2013) 4 SCC 465 Para 9, 10 & 17

11. Mr. Chatterjee, learned Senior Advocate appearing for the respondent No.2 advanced the following submissions:-
(a) Right and duty must co-exist.
(b) The writ petitioner stands on the same footing as any other person. He does not have any cause of action.
(c) If he could not file a suit he cannot file a writ petition.
(d) He does not have any legally enforceable grievance which could only be the basis of his cause of action.
(e) In any event, all that has been done by the act of the State is to confer an honour upon the respondent No.2. The writ petitioner does not have a right to obtain an order of prohibition against grant of such honour.
(f) The cause of action of the writ petitioner which arose with the death of his wife in the year 1998 merged in the decree for compensation which has admittedly been satisfied. In support of his submission he relied on a judgment in the case of Ishwar Dutt –Vs- Land Acquisition Collector & Anr. reported in AIR 2005 SC 3165 Para 28.
(g) The writ petitioner cannot maintain the writ petition because of the emotional distress or the pain suffered by him. Mr. Chatterjee, in this regard, drew our attention to paragraph 181 of the judgment in the case of Balaram Prasad –Vs- Kunal Saha (supra) to impress upon us that the Supreme Court had declined to grant him any compensation for the emotional distress, pain and suffering.
(h) Mr. Chatterjee concluded by saying that the writ petition amounts to an abuse of the process of Court because the petitioner does not have any cause of action.

12. The first submission advanced by Mr. Chatterjee that right and duty must co-exist is neither comprehensible nor acceptable. Right and duty can be contemplated as co-relatives in the sense that if ‘A’ has a right, there must be someone who is under an obligation or a duty to respect that right, without which the right of ‘A’ is meaningless. But how can it be suggested that ‘A’ must have both right and duty simultaneously on the same subject before he can be said to have a standing to file a writ petition. The first submission of Mr. Chatterjee, according to us is of no consequence and is rejected. The sixth submission of Mr. Chatterjee recorded above, according to us, is equally fallacious. There can be no quarrel with the proposition that the cause of action merges into the decree. The cause of action for the present writ petition is not the death of Anuradha Saha due to negligence of the respondent No.2. That cause of action has certainly merged into the decree passed by the Supreme Court in the case of Balaram Prasad –Vs- Kunal Saha & Ors (supra).

13. The cause of action for the present writ petition as alleged by the petitioner is that the State capriciously and in violation of Article 144 chose to confer the honour of “Bangabibhushan” on the respondent No.2 in May 2014, when the Supreme Court in its judgement pronounced on 24th October, 2013 held that the respondent no.2 “has shown utmost disrespect to his profession by being so casual in his approach in treating his patient. Moreover on being charged with the liability he attempted to shift the blame on other doctors. The writ petitioner contends that although the State professes to have decided on 17th May, 2014 to confer the award amongst others on the respondent No.2, the news had already been published on 16th May, 2014 by one of the persons, who allegedly attended the meeting dated 17th May 2014, indicating the names of the awardees of “Bangabibhushan” including the respondent No.2. He contends that the alleged meeting dated 17th May, 2014 including the alleged deliberations is a mere eyewash and has been concocted.

14. The learned Trial Court by its order dated 20th May, 2014 while admitting the writ petition not only upheld the standing of the writ petitioner to maintain the petition but also held that “it will be necessary to consider at the stage of further hearing of this writ petition, the rationale behind the administrative decision to confer the award on the respondent No.2 in the face of the aforesaid observations and the findings of the Hon’ble Apex Court.” The State pursuant to the aforesaid order dated 20th May, 2014 has come up with the alleged minutes of the meeting allegedly held on 17th May, 2014 to supply the rationale which was not there, when the decision to confer the award was taken and published on 16th May, 2014. Even the reasons assigned in the alleged discussions allegedly held on 17th May, 2014 are restricted to achievements of the respondent No.2 until the year 2008 when he was bestowed with “Dhanvantari” award.

15. The two consecutive judgments of the Supreme Court were passed on 7th August, 2009 and 24th October, 2013 respectively. Therefore, the alleged achievements allegedly taken into account do not justify the award which is a pointer to show that the same was intended at diluting the judgments of the Supreme Court which is also contrary to Article 144 of the Constitution of India. The State in its affidavit-in-opposition contended that the selection process was conducted strictly on the basis of merit in an impartial, transparent and honest manner, but no rules or guidelines have either been identified or disclosed. In the case of Balaji Raghavan –Vs- Union of India reported in (1996) 1 SCC 361 the Apex Court commented upon the existing procedure for choice of the persons to be decorated with the awards like “Padmabibhushan”, “Padmashree”, “Padmabhushan” etc. by saying that:-
“The existing procedure for selection of candidates is wholly vague and is open to abuse at the whims and fancies of the persons in authority. Conferment of Padma awards without any firm guidelines and foolproof method of selection is bound to breed nepotism, favouritism, patronage and even corruption. ”

16. Their Lordships in paragraphs 33 and 40 of the judgment also directed both the Union of India and the States to form Committees for the purpose of framing guidelines for granting awards. Importance of rules for exercise of discretion vested in the executive can hardly be overemphasized. In the case of S.G. Jaisinghani -Vs- Union of India & Ors. reported in AIR 1967 SC 1427, their Lordships opined as follows:-
“In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey-"Law of the Constitution"-Tenth Edn., Introduction cx). "Law has reached its finest moments", stated Douglas, J. in United States v. Wunderlich, (1951) 342 US 98, "when it has freed man from the unlimited discretion of some ruler….. Where discretion is absolute, man has always suffered”. It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes, (1770) 4 Burr 2528 at p.2539 “means sound discretion guided by law. It must be governed by rule, not by humour: it must not be arbitrary, vague and fanciful. ”

17. For the aforesaid reasons we are not prepared to accept the last submission of Mr. Chatterjee that the writ petition amounts to an abuse of the process of Court. The rest of the submissions advanced by both Mr. Chatterjee and Mr. Sen are on the question of standing of the writ petitioner to maintain the writ petition which shall hereafter be answered. In the case of Inland Revenue Commissioners –Vs- National Federation of Self-Employed & Small Businesses Ltd. reported in (1982) AC 617 prayer for judicial review was made in the following facts and circumstances of the case:-
“Some 6000 casual workers in Fleet Street were nominated by their trade unions to work for newspapers on specified occasions. They were given call slips and then collected pay dockets to enable them to draw their pay from their employers but a substantial number of them gave false names and addresses so that it was impossible for the Inland Revenue to collect the tax which was due from them. The consequent loss to the revenue was estimated at 1 million a year. In view of the frauds the Inland Revenue after discussions with the employers and the unions, introduced a special arrangement which would ensure that for the future tax would either be deducted at source or be properly assessed and made it clear that, if the arrangement were generally accepted, and subject to certain other conditions, investigation into tax lost in certain previous years would not be carried out. A federation representing the self-employed and small businesses, who contrasted the attitude taken by the revenue to the tax evasions of the Fleet Street casuals with that adopted by the revenue in other cases where tax evasions were suspected, applied for judicial review under R.S.C., Ord. 53, r.1, and claimed a declaration that the Inland Revenue acted unlawfully in granting the amnesty and an order of mandamus directed to the revenue to assess and collect income-tax from the casual workers. The Divisional Court granted leave ex parte, but at the hearing inter partes, on the Inland Revenue’s objection that the federation had no locus standi, the Divisional Court held that the federation had not “sufficient interest” within R.S.C., Ord. 53, r.3 (5), to claim the declaration and order sought. On the federation’s appeal which proceeded on the assumption that the Inland Revenue had no power to grant such a tax “amnesty ”, the Court of Appeal (by a majority) allowed the appeal holding that the body of taxpayers represented by the federation could reasonably assert that they had a genuine grievance in the alleged failure of the Inland revenue to do its duty and the granting of an unlawful tax indulgence to the casual workers, and accordingly they had a “ sufficient interest ” within the meaning of R.S.C. Ord. 53, r.3 (5) to apply for judicial review under that order.”

18. Lord Wilberforce in an appeal to the House of Lords by the Inland Revenue Commissioners held as follows:-
“I think that it is unfortunate that this course has been taken. There may be simple cases in which it can be seen at the earliest stage that the person applying for judicial review has no interest at all, or no sufficient interest to support the application: then it would be quite correct at the threshold to refuse him leave to apply. The right to do so is an important safeguard against the courts being flooded and public bodies harassed by irresponsible applications. But in other cases this will not be so. In these it will be necessary to consider the powers or the duties in law of those against whom the relief is asked, the position of the applicant in relation to those powers or duties, and to the breach of those said to have been committed. In other words, the question of sufficient interest cannot, in such cases, be considered in the abstract, or as an isolated point: it must be taken together with the legal and factual context. The rule requires sufficient interest in the matter to which the application relates. This, in the present case, necessarily involves the whole question of the duties of the Inland Revenue and the breaches or failure of those duties of which the respondents complain. ”

19. Lords Diplock and Scarman agreed with the aforesaid views of Lord Wilberforce. The aforesaid judgment of the House of Lords was considered by Their Lordships in the case of S. P. Gupta (supra) wherein their Lordships held in favour of the locus standi of the learned advocates to challenge the circular issued by the Ministry seeking to transfer the Judges and a host of such other issues. The judgement of the House of Lords was also considered by a learned Single Judge of this Court in the case of S.N. Bose –Vs- State of West Bengal reported in 1984 (1) CHN 110. The writ petitioner in that case was aggrieved by renaming of Bose Para Lane in the Bagbazar area as Maa Saradamoni Sarani. The writ petition was allowed. A writ in the nature of mandamus was issued directing that no further effect be given to the decision to rename the Bose Para Lane.

20. In the case of Bangalore Medical Trust –Vs- B. S. Muddappa & Ors. reported in AIR 1991 SC 1902 the question as regards the locus standi was raised when the writ petitioner raised his grievance against the conversion of a public park into a private nursing home. The views expressed by the House of Lords were also echoed in this case and the Apex Court held as follows:-
“Locus standi to approach by way of writ petition and Refusal to grant relief in equity jurisdiction are two different aspects, may be with the same result. One relates to maintainability of the petition and other to exercise of discretion. Law on the former has marched much ahead. Many milestones have been covered. The restricted meaning of aggrieved person and narrow outlook of specific injury has yielded in favour of broad and wide construction in the wake of public interest litigation. Even in private challenge to executive or administrative action having extensive fall out the dividing line between personal injury or loss and injury of a public nature is fast vanishing. Law has veered round from genuine grievance against order affecting prejudicially to sufficient interest in the matter. The rise in exercise of power by the executive and comparative decline in power and effective administrative guidance is forcing citizens to expose challenges with public interest favour. Therefore, it is too late in the day to claim that petition filed by inhabitants of a locality whose park was converted into a nursing home had no cause to invoke equity jurisdiction of the High Court. In fact, public spirited citizens having faith in rule of law are rendering great social and legal service by espousing cause of public nature. They cannot be ignored or overlooked on technical or conservative yard stick of the rule of locus standi or absence of personal loss or injury. Present day development of this branch of jurisprudence is towards free movement both in nature of litigation and approach of the courts. Residents of locality seeking protection and maintenance of environment of their locality cannot be said to be busy bodies or interlopers. Even otherwise physical or personal or economic injury may give rise to civil or criminal action but violation of rule of law either by ignoring or affronting individual or action of the executive in disregard of the provisions of law raises substantial issue of accountability of those entrusted with responsibility of the administration. It furnishes enough cause of action either for individual or community in general to approach by way of writ petition and the authorities cannot be permitted to seek shelter under cover of technicalities of locus standi nor they can be heard to plead for restraint in exercise of discretion as grave issues of public concern outweigh such considerations.”

21. The view expressed by the House of Lords in the case of Inland Revenue was also echoed in the case of M.S. Jayaraj –Vs- Commissioner of Excise, Kerala & Ors. reported in (2000) 7 SCC 552 wherein their Lordships held as follows:-
“In the light of the expanded concept of the locus standi and also in view of the finding of the Division Bench of the High Court that the order of the Excise Commissioner was passed in violation of law, we do not wish to nip the motion out solely on the ground of locus standi. If the Excise Commissioner has no authority to permit a liquor shop owner to move out of the range (for which auction was held) and have his business in another range it would be improper to allow such an order to remain alive and operative on the sole ground that the person who filed the writ petition has strictly no locus standi. So we proceed to consider the contentions on merits. ”

22. In the case of S.N. Patil –Vs- Dr. M. M. Gosavi reported in (1987) 1 SCC 227 the following views were expressed:-
“The allegations made in the petition disclose a lamentable state of affairs in one of the premier universities of India. The petitioner might have moved in his private interest but enquiry into the conduct of the examiners of the Bombay University in one of the highest medical degrees was matter of public interest. Such state of affairs having been brought to the notice of the court, it was the duty of the court to the public that the truth and the validity of the allegations made be inquired into. It was in furtherance of public interest that an enquiry into the state of affairs of public institution becomes necessary and private litigation assumes the character of public interest litigation and such an enquiry cannot be avoided if it is necessary and essential for the administration of justice."

23. The judgment in the case of S. N. Patil –Vs- Dr. M. M. Gosavi was followed in the case of Indian Banks’ Association & Ors. –Vs- Devkala Consultancy Service & Ors. reported in (2004) 11 SCC 1 their Lordships held as follows:-
“Furthermore, even where a writ petition has been held to be not entertainable on the ground or otherwise of lack of locus, the court in larger public interest has entertained a writ petition. In an appropriate case, where the petitioner might have moved a court in his private interest and for redressal of his personal grievance, the court in furtherance of public interest may treat it as a necessity to enquire into the state of affairs of the subject of litigation in the interest of justice. Thus, a private interest case can also be treated as public interest case. We, therefore, do not agree with the submissions of the learned Counsel of the appellants that the respondent had no locus to maintain the public interest litigation or the writ petition filed by him pro bono publico before the High Court was not maintainable. ”

24. The case of the writ petitioner in substance is that the award in favour of the respondent No.2 is in violation of the rule of law. The learned Trial Court, after hearing all the parties, in its order dated 20th May, 2014 held:-
“it will be necessary to consider at the stage of further hearing of this writ petition, the rationale behind the administrative decision to confer the award on the respondent no.2 in the face of the aforementioned observations and findings of the Hon’ble Apex Court.” It was thereafter not open to the State to avoid the scrutiny of the
Court or “to take shelter under cover of technicalities of locus standi” as opined by their Lordships in the case of Bangalore Medical Trust (supra).

25. The power of the executive in the matter of grant of largess came up for consideration by the Apex Court in the case of Ramanna –Vs- International Airport Authority of India & Ors. reported in AIR 1979 SC 1628 wherein their Lordships held as follows:-
“It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.”

26. The State, it follows, has power to grant largess in diverse forms including by conferring awards and honours comprising of both monetary and non-monetary benefits but in the exercise of such power the State owes a duty to ensure that such powers are exercised strictly in accordance with the prescribed norms. No such norms have either been identified or alleged to have been followed in conferring the awards. From a review of the authorities cited above, we are firmly of the opinion that it was no longer open to the learned Trial Court to decide the question of locus standi of the writ petitioner in isolation. Once the writ petition had been admitted and directions for final hearing after affidavit-in-opposition were issued with specific observation that rationale behind the administrative decision was required to be gone into it was incumbent upon the learned Trial Court to hear out the writ petition in its entirety.

27. The writ petitioner is the husband of the deceased victim of medical negligence. The writ petitioner is also a victim within the meaning of the amended Code of Criminal Procedure. He found his cause vindicated, when their Lordships held finally on 24th October, 2013 that:-
“Dr. Mukherjee has shown utmost disrespect to his profession by being so casual in his approach in treating his patient. Moreover, on being charged with the liability, he attempted to shift the blame on other doctors.” Therefore the writ petitioner cannot be compared with any other person as contended by Mr. Chatterjee in his second submission. The third submission has not impressed us because a plaintiff must have a cause of action in the traditional sense whereas a writ petitioner seeking judicial review of an act of the executive on the ground of breach of power or duty is only required to establish sufficient interest to support the application which he undoubtedly has. The fourth and the fifth submission of Mr. Chatterjee are equally unmeritorious because the act of conferring the award is likely to be struck down in case it is held that power was exercised arbitrarily or in violation of Article 144 of the Constitution of India. The State in its affidavit-in-opposition has alleged that:-
“It is respectfully submitted that Article 144 of the Constitution requires all authorities including this Hon’ble Court to comply with the directions, orders and decrees of the Hon’ble Supreme Court and restrains any authority from pleading its inability to comply therewith. It is respectfully submitted that Article 144 of the Constitution has no manner of application in the instant case and the reference thereto is not only misleading but a misnomer.”

28. Even assuming that the aforesaid contention of the State is correct in so far as purport of Article 144 of the Constitution is concerned, there can be no denial of the fact that the direction of the Supreme Court in the case of Balaji Raghavan (supra) both to the Union of India and the States to frame guidelines before conferring awards, does not appear to have been complied with before granting the award to the respondent No.2. The largess extended by the State in the form of award including monetary benefit would also be contrary to the judgment in the case of Ramanna –Vs- International Airport Authority (supra) if the State fails to demonstrate that the award was conferred in accordance with the prescribed norms. The reasons advanced by the learned Trial Court to answer the question of locus standi in the negative are patently contrary to the view taken by this Court and the Apex Court.

29. We may also observe that whenever breach of power or duty on the part of the State or authority is alleged and a petition has been admitted after going into the question of locus standi of the writ petitioner to maintain the petition, even prima facie, it is not open to the Court to dismiss the writ petition at the final hearing without a meaningful enquiry into the breach complained of. The judgments cited by Mr. Sen appearing for the State do not militate against the view we have taken. The first judgment cited by him is in the case of Ayaaubkhan Noorkhan Pathan –Vs- State of Maharashtra & Ors. reported in (2013) 4 SCC 465, what had happened in that case was that the appellant was appointed Senior Clerk in the Municipal Corporation of Aurangabad on 6th February, 1990 as a scheduled tribe candidate on the basis of a certificate granted to him. The validity of the certificate was duly examined by the Vigilance Cell and confirmed in 1998. In the year 2009, the respondent No.5 filed a complaint alleging that the appellant had obtained employment by way of misrepresentation and that he did not belong to the scheduled tribes category. It is in that context that their Lordships held that the respondent No.5 was not a party aggrieved. The observations brought to our notice by Mr. Sen are as follows:-
“A writ petition under Article 226 of the Constitution is maintainable either for the purpose of enforcing a statutory or legal right, or when there is a complaint by the appellant that there has been a breach of statutory duty on the part of the authorities. Therefore, there must be a judicially enforceable right available for enforcement, on the basis of which writ jurisdiction is resorted to.” Our attention was also drawn to the following observations appearing from paragraph 10 of the judgment:-
“The expression, “person aggrieved” does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must, therefore, necessarily be one whose right or interest has been adversely affected or jeopardised. (Vide Shanti Kumar R. Canji v. Home Insurance Co. of New York and State of Rajasthan v. Union of India.”

30. The question for consideration was whether the respondent No.5 had the locus standi to make the complaint which was answered in the negative. Their Lordships have in paragraph 9 quoted above held that a writ petition is maintainable when there is a complaint by the appellant that there has been a breach of statutory duty on the part of the authorities. The complaint of the respondent No.5 in that case was not, as regards any breach of duty on the part of the authorities. The complaint of the respondent No. 5, in that case was that the appellant had secured the job on the basis of misrepresentation. It may also be pointed out that in an earlier judgment in the case of Shri Anadi Mukta Sadguru S.M.V.S.J.M.S. Trust v. V. R. Rudani, reported in AIR 1989 SC 1607 the following views were expressed by the Apex Court:-
“Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor De Smith states: “To be enforceable by mandamus a public duty does not necessarily have to be one imposed by the statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract.” (Judicial Review of Administrative Act 4th Ed. P.540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available ‘to reach injustice wherever it is found’. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition. ”

31. The next judgment relied upon by Mr. Sen is in the case of Ravi Yashwant Bhoir –Vs- District Collector, Raigad & Ors., reported in (2012) 4 SCC 407. What had happened in that case was that an elected representative who was the President of the Municipal Council was removed by the Chief Minister of the State and he was also barred from contesting for a period of six years. The respondent No.5 the complainant and a political rival at the hearing before the Chief Minister urged new grounds which the appellant did not get an opportunity to meet. Before the Supreme Court, the point was agitated when direction was issued to produce the records. The records were not produced even before the Supreme Court. It is in that context, that their Lordships have observed that:-
“In case he has no legal peg for a justiciable claim to hang on, he cannot be heard as a party in a lis. A fanciful or sentimental grievance may not be sufficient to confer a locus standi to sue upon the individual. There must be injuria or a legal grievance which can be appreciated and not a stat pro ratione voluntas reasons i.e. a claim devoid of reasons. ”

32. The next judgment cited by Mr. Sen, is in the case of State of U.P. & Other –Vs- Johri Mal reported in (2004) 4 SCC 714. What had happened in that case was that on 7th January, 1993 an advocate was appointed DGC (Criminal) which is deemed to be a post of a Public Prosecutor within the meaning of Section 24 of the Code of Criminal Procedure for a period of three years. His term was renewed for a year. Subsequent thereto his request for renewal was not granted. He presented a writ petition on the ground that his performance was found satisfactory both by the District Magistrate and the District Judge. It is in that context that the Apex Court opined that:-
“A writ of or in the nature of mandamus, it is trite, is ordinarily issued where the petitioner establishes a legal right in himself and a corresponding legal duty in the public authorities.”

33. Which was brought to our notice by Mr. Sen. The last judgment relied upon by Mr. Sen is in the case of Binoy Kumar and Others –Vs- State of U.P. and Ors. reported in (2001) 4 SCC 734, what had happened in that case was that an advocate had filed a writ petition espousing the cause of action of his clients without disclosing why the affected persons themselves could not present the writ petition. It is in that context that Their Lordships held that the writ petitioner had no locus standi. None of these judgments really help the State in establishing that the writ petitioner did not have sufficient interest in the matter litigated before the Court.

34. All the points urged both by Mr. Sen and Mr. Chatterjee have thus been disposed of. We already have indicated our reasons as to why is the impugned judgment and order are not sustainable and are, therefore set aside. The writ petition is remanded to the learned Trial court for hearing on merits. It is clarified that the views expressed herein are for the purpose of disposal of this appeal which shall not preclude the Trial Court from arriving at its own conclusion in accordance with law based on the evidence which may be adduced by the parties. Costs and incidental to this appeal shall be costs in the in the cause.
SHIB SADHAN SADHU, J.

LATER
Both Mr. Sen, learned Advocate appearing for the respondent no.1 and Mr. Dutt, learned Advocate appearing for the respondent no.2 prayed for stay of operation of this order. We have considered the prayer and reject the same.

(GIRISH CHANDRA GUPTA J.)
(SHIB SADHAN SADHU J.)

…………………

(2015) 119 (3) CWN (Cal) 358

IN THE HIGH COURT AT CALCUTTA

(BEFORE INDIRA BANERJEE AND SAHIDULLAH MUNSHI, JJ.)

Sri Sushanta Malik @ Susanta Malik …Appellants
Vs.
Srei Equipment Finance Limited and Anr. …Respondents

C.O.No.136 of 2015; Civil Revisional Jurisdiction; Appellate Side; Heard on: 03.07.2015, 08.07.2015, 16.07.2015, 24.07.2015; Judgment on: 08.09.2015

Arbitration and Conciliation Act, 1996, Section 2(1)(e), 9, 14(2), 34(2), 42; City Civil Court Act, 1953, Section 5(2), 21; Code of Civil Procedure, 1908, Section 15 – Single Bench referred to Division Bench of High Court, Calcutta to decide the jurisdiction of City Civil Court to entertain Applications arising out of Arbitration Act, 1996 – the question has arisen in view of difference of opinion pertaining to the definition of “Court” in Section 2(1)(e) of the Act, 1996 – City Civil Court and Original Jurisdiction of High Court are concurrent and/or inter vivos jurisdiction – differences between them are pecuniary jurisdictions – City Civil Court can act as a Court of origin within its pecuniary limit – beyond the pecuniary limit of City Civil Court, High Court of Original Jurisdiction will have the power to deal with.

Ratio decidendi:-
City Civil Court and Original Jurisdiction of High Court are concurrent and/or inter vivos jurisdiction. The differences between them are pecuniary jurisdictions. City Civil Court can act as a Court of origin within its pecuniary limit and beyond the pecuniary limit of City Civil Court, High Court of Original Jurisdiction will have the power to deal with.

Observations of the Court:-
“In the order of Reference to a Full Bench in the case of Sukhlal v. Tara Chand, (1905) ILR 33 Cal 68 (FB), it was stated that jurisdiction may be defined to be the power of a Court to ‘hear and determine a cause, to adjudicate and exercise any judicial power in relation to it:’ in other words, by jurisdiction is meant ‘the authority which a “Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision.’ An examination of the cases in the books discloses numerous attempts to define the term ‘jurisdiction’, which has been stated to be ‘the power to hear and determine issues of law and fact’. “This jurisdiction of the Court may be qualified or restricted by a variety of circumstances. Thus, the jurisdiction may have to be considered with reference to place, value and nature of the subject matter. The power of a tribunal may be exercised within defined territorial limits. Its cognizance may be restricted to subject-matters of prescribed value. It may be competent to deal with controversies of a specified character, for instance, testamentary or matrimonial causes, acquisition of lands for public purposes, record of rights as between landlords and tenants. This classification into territorial jurisdiction, pecuniary jurisdiction and jurisdiction of the subject matter is obviously of a fundamental character.”(para 10)
In view of Section 5(2) of the City Civil Court Act, 1953, which provides that subject to the provisions of Sub-sections (3) and (4) of Section 5, the City Civil Court shall have jurisdiction and the High Court shall not have jurisdiction to try suits and proceedings of a civil nature, not exceeding Rs.10 lakhs in value. In view of sub-section (4) of Section 5, the City Civil Court does not have jurisdiction to try certain classes of suits and proceedings, such as admiralty suits, and other suits as specified in the first Schedule to the City Civil Court Act, which are exclusively triable by the High Court, irrespective of the pecuniary value thereof. The State Legislature is, inter alia, competent to legislate in respect of administration of justice, constitution and/or organization of Courts except the Supreme Court and the High Court and to invest all Courts in the State, including the High Court with jurisdiction and powers in respect of any matters in List II of the Seventh Schedule of the Constitution.(para 11)
The City Civil Court Act, enacted by the State Legislature is valid legislation as held by Sinha, J., in Amarendra Nath Roy Chowdhury Vs. Bikash Chandra Ghosh and Anr. reported in 61 CWN 630, cited by Mr. Ghosh. Sinha, J., followed the Constitution Bench judgment of the Supreme Court in State of Bombay Vs. Narottam Das Jethabai & Anr reported in AIR 1951 SC 69, where the Supreme Court upheld the validity of the Bombay City Civil Court Act, 1948. In Nakuleswar Banerjee and Ors. Vs. Sakhi Sova Dasi reported in 70 CWN 371, a Division Bench of this Court affirmed the power of the City Civil Court to entertain suits which would have lain in the Original Side of this Court, but for the amending Act XXVII of 1957. Section 21 of the City Civil Court Act gives overriding effect to the provisions of the City Civil Court Act notwithstanding anything to the contrary in any other law, including in particular, the Letters Patent of the High Court. The City Civil Court (Amendment) Act, 2013 (West Bengal Act XVIII of 2013) amended certain provisions of the City Civil Court Act, 1953, including Section 5(2) referred to above, by adding after Section 5(2) the following proviso:
“Provided that the City Civil Court and the High Court at Calcutta shall have concurrent jurisdiction to try suits and proceedings of a civil nature, the value of which exceeds rupees ten lakhs but does not exceed rupees one crore.”(para 12)
Since, the High Court as well as the City Civil Court had jurisdiction to entertain suits of the subject matter of up to Rs.10 lakhs, the Court rightly held that, it was the High Court which would be the principal Court, in view of the definition of Court under Section 2(1)(e) of the 1996 Act. In contrast to Section 16 of the Chennai City Civil Court Act, the City Civil Court Act enacted by the West Bengal State Legislature, bars the jurisdiction of the High Court to try suits and proceedings of a civil nature, not exceeding Rs.10 lakhs in value. Furthermore, Section 21 of City Civil Court Act gives overriding effect to the City Civil Court Act over the Letters Patent.(para 21)
For the reasons discussed above, we are unable to agree with the view of Sanjib Banerjee, J., in Mrs. Hosenara Begum Vs. Sk. Asraf Ali & Ors. (supra) that the City Civil Court would not have jurisdiction to receive a petition under the 1996 Act, irrespective of the value of the claim, as long as the High Court exercised ordinary original jurisdiction.(para 27)

Held:-
Where the value of the subject matter of the disputed claim in arbitration does not exceed Rs.10 lakhs, the Original Side of this Court has no jurisdiction to entertain an application under the 1996 Act. If the value of the subject matter of the dispute in arbitration does not exceed Rs.10 lakhs an application under the 1996 Act can only be entertained by the City Civil Court at Calcutta and not the High Court exercising original jurisdiction. However, where the value of the subject matter of the dispute in arbitration exceeds Rs.10 lakhs it is the Original Side of the High Court alone which would have jurisdiction to entertain an application under the 1996 Act.

Advocates who appeared in this Case:-
For the appellant: Mr. Gopal Chandra Ghosh, Mr. Om Narayan Rai
For the respondents: Mr. Swatarup Banerjee, Mr. Subhankar Chakraborty, Mr. Aasif Hussain, Mr. Avishek Guha, Mr. Arijit Ghosh.

List of cases cited:-
Mrs. Hosenara Begum Vs. Sk. Asraf Ali & Ors. being A.P. No.1048 of 2013, Calcutta High Court (overuled)
Official Trustees West Bengal Vs. Sachindra Nath Chatterjee, AIR 1969 SC 823 (relied on)
Hriday Nath Roy Vs. Ramchandra, AIR 1921 Cal 34 (FB) (relied on)
Sukhlal Vs. Tara Chand, (1905) ILR 33 Cal 68 (FB) (referred to)
Amarendra Nath Roy Chowdhury Vs. Bikash Chandra Ghosh and Anr., 61 CWN 630 (followed)
Nakuleswar Banerjee and Ors. Vs. Sakhi Sova Dasi, 70 CWN 371 (followed)
State of Bombay Vs. Narottam Das Jethabai & Anr., AIR 1951 SC 69 (followed)
State of Maharashtra Through Executive Engineer, Road Development Division No.111, Panvel and Anr. Vs. Atlanta Limited reported in (2014) 11 SCC 619 (referred to)
Md. Nasim Akhtar Vs. Union of India and Ors., AIR 2015 CALCUTTA 64 (referred to)
M/s.Fountain Head Developers and etc. etc. Vs. Mrs. Maria Arcangela Sequeira deceased by L.R.’s and Ors., AIR 2007 Bombay 149 (referred to)
M/s. Sundaram Finance Ltd Vs. M.K.Kurian and Anr., AIR 2006 Mad. 218 (relied on)
State of West Bengal and Ors. Vs. Associated Contractors, (2015) 1 SCC 32 (relied on)
Surat Singh Vs. State of Himachal Pradesh and Anr., 2003(3) Arb. LR 606 (HP) (DB) (referred to)
Nelson Motis Vs. Union of India, AIR 1992 SC 1981 (p. 1984) (relied on)
Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. Vs. Custodina of Vested Forests, AIR 1990 SC 1747 (relied on)

The Judgement of the Court was delivered by Indira Banerjee, J.:-

1. By an order dated 19th March, 2015, the Single Bench (Tandon, J.) has referred to the Division Bench, the question of whether the learned City Civil Court has jurisdiction to entertain proceedings under the Arbitration and Conciliation Act, 1996, hereinafter referred to as ‘the 1996 Act’, where the pecuniary value of the subject matter of arbitration, is less than Rs.10 lakhs or whether the High Court in exercise of its ordinary original civil jurisdiction has exclusive jurisdiction to entertain all proceedings under the 1996 Act, irrespective of pecuniary value thereof.

2. The question has arisen in view of the definition of ‘Court’ in Section 2(1)(e) of the 1996 Act which is set out here in below for convenience:-
“2. Definitions.–(1)In this part, unless the context otherwise requires, -
(e)“Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;”

3. Section 9 of the 1996 Act provides that a party may before, or during arbitral proceedings, or at any time after the making of the arbitral award, but before it is enforced in accordance with Section 36, apply to a Court for inter alia interim measures of protection in respect of any of the matters specified in Section 9(ii) of the 1996 Act. Similarly, under Section 14(2), parties may apply to the Court to decide any controversy on the termination of the mandate of the arbitrator, if the arbitrator becomes de jure or de facto unable to perform his functions, or fails to act without delay, or withdraws from his office, or if the Court finds that the parties had agreed to termination of his mandate. Section 34 provides for recourse to a Court, against an arbitral award, on grounds stipulated in Section 34(2).

4. Section 42 of the 1996 Act provides as follows:-
“Jurisdiction–Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.”

5. Section 42 provides that notwithstanding anything contained elsewhere in Part I of the 1996 Act, or in any other law for the time being in force, where in respect of an arbitration agreement, any application under Part I has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings, and all subsequent applications arising out of that arbitration agreement or out of the arbitral proceedings, shall be made in that Court and in no other Court.

6. There can be no doubt, that in view of the definition of ‘Court’ in Section 2(1)(e) of the 1996 Act, a Court for the purpose of Section 9, or for that matter, Section 34 or Section 14(2), would mean the principal Civil Court of original jurisdiction in the district, and would include the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the question forming the subject matter of the arbitration, if the same had been the subject matter of a suit, but would not include any Civil Court inferior to such principal Civil Court, or any Court of small causes.

7. In Mrs. Hosenara Begum Vs. Sk. Asraf Ali & Ors.being A.P. No.1048 of 2013, Sanjib Banerjee, J., held that “In view of Section 2(1)(e) of the 1996 Act, not all civil courts of original civil jurisdiction are entitled to entertain petitions under Part-I of the 1996 Act. Only a principal civil Court of original jurisdiction in a district is entitled to exercise jurisdiction under the 1996 Act and a principal civil Court of original jurisdiction in a district would be the High Court if it exercises ordinary original civil jurisdiction. As per the relevant statute as at the time that the previous Section 9 petition was filed by this petitioner, the City Court was entitled to entertain matters which were below the floor-limit set for the High Court to exercise its ordinary original civil jurisdiction. However, it does not appear that the value of a claim or a matter can be of any relevance in a petition filed under Part-I of the 1996 Act in view of the definition of “Court” in such Act. Not only has the word “principal” been used in the opening limb of the definition, but it has been emphasised in the last limb of the definition that the Court authorised to receive matters covered by part-I of the 1996 Act would not include any civil Court or a Court inferior to the principal civil Court identified in the opening part of the definition. In such circumstances, it does not appear that the City Civil Court at Calcutta has any jurisdiction to receive a petition under the Arbitration and Conciliation Act, 1996 as long as the High Court at Calcutta exercises ordinary original civil jurisdiction.”

8. In this revisional application under Article 227 of the Constitution of India, the respondent financier questioned the jurisdiction of the City Civil Court to entertain an application under the 1996 Act, relying on the judgment of Sanjib Banerjee, J., in Mrs. Hosenara Begum Vs. Sk. Asraf Ali & Ors. (supra). Since Tandon, J., could not agree with the finding of Sanjib Banerjee, J., that the value of the claim was of no relevance in a petition filed under Part I of the 1996 Act, and that the City Civil Court would not have jurisdiction to receive a petition under the 1996 Act, as long as the High Court exercised ordinary original civil jurisdiction, irrespective of whether the value of the claim exceeded Rs.10 lakhs or not, Tandon, J., referred the question to the Division Bench.

9. Mr. Satarup Banerjee appearing on behalf of the respondent financier submitted that the City Civil Court being subordinate to the High Court exercising its ordinary original civil jurisdiction, it was only the Original Side of the High Court, which was the principal Civil Court of original jurisdiction in the district. The High Court alone could, therefore, entertain applications under Sections 9, 14 or 34 of the 1996 Act. There can be no doubt that the City Civil Court is a Court subordinate to, and therefore, inferior to the High Court, as argued by Mr. Banerjee. However, ‘Court’ has been defined as the principal civil Court of original jurisdiction in a district and would include the High Court exercising its ordinary original civil jurisdiction, provided it has jurisdiction to decide the questions forming the subject matter of arbitration, if the same had been the subject matter of a suit. In construing the expression ‘Court’ in Section 2(1)(e), we cannot overlook the phrase “having jurisdiction to decide the questions forming the subject-matter of the arbitration, if the same had been the subject-matter of a suit”.

10. The question of what is jurisdiction fell for consideration before a three Judge Bench of the Supreme Court in Official Trustees West Bengal Vs. Sachindra Nath Chatterjee reported in AIR 1969 SC 823. Relying on the Full Bench judgement of this Court in Hriday Nath Roy Vs. Ramchandra reported in AIR 1921 Cal 34 (FB)the Supreme Court held:
“13. What is meant by jurisdiction? This question is answered by Mukherjee Acting C.J., speaking for the full bench of the Calcutta High Court in Hirday Nath Roy v. Ramchandra Barna Sarma,……… explained what exactly is meant by jurisdiction. We can do not better than to quote his words:
“In the order of Reference to a Full Bench in the case of Sukhlal v. Tara Chand, (1905) ILR 33 Cal 68 (FB), it was stated that jurisdiction may be defined to be the power of a Court to ‘hear and determine a cause, to adjudicate and exercise any judicial power in relation to it:’ in other words, by jurisdiction is meant ‘the authority which a “Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision.’ An examination of the cases in the books discloses numerous attempts to define the term ‘jurisdiction’, which has been stated to be ‘the power to hear and determine issues of law and fact’ “the authority by which the judicial officers take cognizance of and decide causes”; ‘the authority to hear and decide a legal controversy’ “the power to hear and determine the subject matter in controversy between parties to a suit and to adjudicate or exercise any judicial power over them”; “the power to hear, determine and pronounce judgment on the issues before the Court”; “the power or authority which is conferred upon a Court by the Legislature to hear and determine causes between parties and to carry the judgements into effect”; “the power to enquire into the facts, to apply the law, to pronounce the judgement and to carry it into execution”. (Emphasis (herein) supplied).
Proceeding further the learned Judge observed:
“This jurisdiction of the Court may be qualified or restricted by a variety of circumstances. Thus, the jurisdiction may have to be considered with reference to place, value and nature of the subject matter. The power of a tribunal may be exercised within defined territorial limits. Its cognizance may be restricted to subject-matters of prescribed value. It may be competent to deal with controversies of a specified character, for instance, testamentary or matrimonial causes, acquisition of lands for public purposes, record of rights as between landlords and tenants. This classification into territorial jurisdiction, pecuniary jurisdiction and jurisdiction of the subject matter is obviously of a fundamental character.”

11. The question is whether the High Court exercising its ordinary original civil jurisdiction, could have entertained a suit of pecuniary value of less than Rs.10 lakhs. The answer to the aforesaid question would necessarily have to be in the negative, in view of Section 5(2) of the City Civil Court Act, 1953, which provides that subject to the provisions of Sub-sections (3) and (4) of Section 5, the City Civil Court shall have jurisdiction and the High Court shall not have jurisdiction to try suits and proceedings of a civil nature, not exceeding Rs.10 lakhs in value. In view of sub-section (4) of Section 5, the City Civil Court does not have jurisdiction to try certain classes of suits and proceedings, such as admiralty suits, and other suits as specified in the first Schedule to the City Civil Court Act, which are exclusively triable by the High Court, irrespective of the pecuniary value thereof. The State Legislature is, inter alia, competent to legislate in respect of administration of justice, constitution and/or organization of Courts except the Supreme Court and the High Court and to invest all Courts in the State, including the High Court with jurisdiction and powers in respect of any matters in List II of the Seventh Schedule of the Constitution. Just as the State Legislature can invest the High Court with jurisdiction and powers, the State Legislature can also denude the High Court of the State, of jurisdiction and powers except of course, those guaranteed by the Constitution of India.

12. The City Civil Court Act, enacted by the State Legislature is valid legislation as held by Sinha, J., in Amarendra Nath Roy Chowdhury Vs. Bikash Chandra Ghosh and Anr. reported in 61 CWN 630, cited by Mr. Ghosh. Sinha, J., followed the Constitution Bench judgment of the Supreme Court in State of Bombay Vs. Narottam Das Jethabai & Anr reported in AIR 1951 SC 69, where the Supreme Court upheld the validity of the Bombay City Civil Court Act, 1948. In Nakuleswar Banerjee and Ors. Vs. Sakhi Sova Dasi reported in 70 CWN 371, a Division Bench of this Court affirmed the power of the City Civil Court to entertain suits which would have lain in the Original Side of this Court, but for the amending Act XXVII of 1957. Section 21 of the City Civil Court Act gives overriding effect to the provisions of the City Civil Court Act notwithstanding anything to the contrary in any other law, including in particular, the Letters Patent of the High Court. The City Civil Court (Amendment) Act, 2013 (West Bengal Act XVIII of 2013) amended certain provisions of the City Civil Court Act, 1953, including Section 5(2) referred to above, by adding after Section 5(2) the following proviso:
“Provided that the City Civil Court and the High Court at Calcutta shall have concurrent jurisdiction to try suits and proceedings of a civil nature, the value of which exceeds rupees ten lakhs but does not exceed rupees one crore.”

13. In the State of Maharashtra Through Executive Engineer, Road Development Division No.111, Panvel and Anr. Vs. Atlanta Limited reported in (2014) 11 SCC 619, cited by Mr. Banerjee, the Supreme Court held as follows:-
“………… In terms of the mandate of Section 15 of the Code of Civil Procedure, the initiation of action within the jurisdiction of Greater Mumbai had to be “in the court of lowest grade competent to try it”. We are, however, satisfied, that within the area of jurisdiction of the Principal District Judge, Greater Mumbai, only the High Court of Bombay was exclusively the competent court (under its “ordinary original civil jurisdiction”) to adjudicate upon the matter. The above conclusion is imperative from the definition of the term “court” in Section 2(1)(e) of the Arbitration Act:
24.1. Firstly, the very inclusion of the High Court “in exercise of its ordinary original civil jurisdiction”, within the definition of the term “court”, will be rendered nugatory, if the above conclusion was not to be accepted. Because, the “principal Civil Court of Original Jurisdiction in a district”, namely, the District Judge concerned, being a court lower in grade than the High Court, the District Judge concerned would always exclude the High Court from adjudicating upon the matter. The submission advanced by the learned counsel for the appellant cannot therefore be accepted, also to ensure the inclusion of “the High Court in exercise of its ordinary original civil jurisdiction” is given its due meaning. Accordingly, the principle enshrined in Section 15 of the Code of Civil Procedure cannot be invoked whilst interpreting Section 2(1)(e) of the Arbitration Act.
24.2. Secondly, the provisions of the Arbitration Act, leave no room for any doubt, that it is the superior-most court exercising original civil jurisdiction, which had been chosen to adjudicate disputes arising out of arbitration agreements, arbitral proceedings and arbitral awards. Undoubtedly, a “Principal Civil Court of Original Jurisdiction in a district”, is the superior-most court exercising original civil jurisdiction in the district over which its jurisdiction extends. It is clear that section 2(1)(e) of the Arbitration Act having vested jurisdiction in the “Principal Civil Court of Original Jurisdiction in a district”, did not rest the choice of jurisdiction on courts subordinate to that of the District Judge. Likewise, “the High Court in exercise of its ordinary original jurisdiction”, is the superior most court exercising original civil jurisdiction, within the ambit of its original civil jurisdiction. On the same analogy and for the same reasons, the choice of jurisdiction will clearly fall in the realm of the High Court, wherever a High Court exercises “ordinary original civil jurisdiction”.
24.3. Under the Arbitration Act, therefore, the legislature has clearly expressed a legislative intent different from the one expressed in Section 15 of the Code of Civil Procedure. The respondent had chosen to initiate proceedings within the area of Greater Mumbai, it could have done so only before the High Court of Bombay. There was no other court within the jurisdiction of Greater Mumbai, where the respondents could have raised their challenge. Consequently, we have no hesitation in concluding that the respondent by initiating proceedings under Section 34 of the Arbitration Act, before the Original Side of the High Court of Bombay, had not violated the mandate of Section 2(1)(e) of the Arbitration Act. Thus viewed, we find the submission advanced at the hands of the learned counsel for the appellants, by placing reliance on Section 15 of the Code of Civil Procedure, wholly irrelevant.”

14. In Atlanta Limited (supra), an application under Section 34 for setting aside an award, of pecuniary value in respect of which the Bombay High Court had jurisdiction to decide a suit in its Original Side, was filed in the Bombay High Court. The appellant contended that the application should have been filed in the District Court at Thane, which also had concurrent jurisdiction, in view of Section 15 of the Code of Civil Procedure, which requires that a suit should be filed in the lowest Court competent to decide the same. The proposition which emerges from the judgement of the Supreme Court in Atlanta Limited (supra), is that where the District Court and the High Court have concurrent pecuniary jurisdiction, an application should be filed before the High Court in view of Section 2(1)(e) of the 1996 Act. It does not appear to have been the intention of the 1996 Act, that an application should be filed in the High Court in its Original Side, even though the High Court might lack pecuniary jurisdiction. In this context, it would be pertinent to note the observation of the Supreme Court in paragraph 33 of its judgment in Atlanta Limited (supra), which is set out here in below:
“33. It is not the case of the appellants before us, that because of pecuniary dimensions, and/or any other consideration(s); jurisdiction in the two alternatives mentioned above, would lie with the Principal District Judge, Greater Mumbai. Under the scheme of the provisions of the Arbitration Act, therefore, if the choice is between the High Court (in exercise of its “ordinary original civil jurisdiction”) on the one hand, and the “Principal Civil Court of Original Jurisdiction” in the district i.e. the District Judge on the other; Section 2(1)(e) of the Arbitration Act has made the choice in favour of the High Court. This in fact impliedly discloses a legislative intent. To our mind therefore, it makes no difference, if the “Principal Civil Court of Original Jurisdiction”, is in the same district over which the High Court exercises original jurisdiction, or some other district. In case an option is to be exercised between a High Court (under its “ordinary original civil jurisdiction”) on the one hand, and a District Court (as “Principal Civil Court of Original Jurisdiction”) on the other, the choice under the Arbitration Act has to be exercised in favour of the High Court.” In Atlanta Limited (supra) the Supreme Court held that when an option was to be exercised between a High Court and a District Court, the choice under Arbitration Act has to be exercised in favour of the High Court. This is not a case where the appellant had any choice of filing the application in the High Court as High Court lacked pecuniary jurisdiction.

15. In Md. Nasim Akhtar Vs. Union of India and Ors. reported in AIR 2015 CALCUTTA 64, the award was of Rs.71,58,180/-. This Court exercising its original jurisdiction had the pecuniary jurisdiction to decide the subject matter of arbitration as if it were the subject matter of a suit, though in view of the insertion of the proviso to Section 5(2) of the City Civil Court Act, by the City Civil Court Amendment Act of 2013, the City Civil Court also had concurrent jurisdiction. Somadder, J. rightly held that it was the High Court and not the City Civil Court, which was the Principal Civil Court competent to entertain and adjudicate applications under the 1996 Act. In support of his submission that the High Court would have exclusive jurisdiction to entertain applications under the 1996 Act, irrespective of pecuniary value, Mr. Banerjee cited a Full Bench judgment of the Bombay High Court in M/s. Fountain Head Developers and etc. etc. Vs. Mrs. Maria Arcangela Sequeira deceased by L.R.’s and Ors., reported in AIR 2007 Bombay 149. In M/s. Fountain Head Developers (supra), the question was whether the Civil Judge (Senior Division) or the District Court should be construed as being the principal Court of original jurisdiction, for the purpose of a petition under Section 34 of the 1996 Act. The Full Bench of Bombay High Court compared the definition of Court in Section 2(1)(e) of the 1996 Act with the definition of ‘Court’ is Section 2(c) of the Arbitration Act, 1940 set out herein below for convenience:-
“(c)“Court” means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, including a Small Cause Court.”
16. On such comparison, the Special Bench held that the definition of ‘Court’ in the Act of 1996 and the definition of Court in the Arbitration Act 1940 would manifestly and very clearly demonstrate that in the Act of 1940 ‘Court’ was defined to mean a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference as if the same had been the subject matter of a suit. However, under the 1996 Act, the meaning of the term ‘Court’ had been narrowed down and confined to mean the principal civil Court of original jurisdiction in a district and included the High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the subject matter of the arbitration, if the same had been the subject matter of a suit. The Special bench held:
“………….The Parliament has, clearly, narrowed down the definition of the term “Court”. The only condition contemplated in the definition of “Court” is that it should have jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit. In our opinion, the definition of “Court” in the Act of 1996, does not contemplate that such Court should have jurisdiction over the subject matter of the dispute. What it means is the jurisdiction to decide “the question forming the subject matter of the arbitration” if the same had been the subject matter of a suit. The pecuniary jurisdiction of a Court, therefore, has no significance for the purposes of the Act of 1996. The Court, however, must have a territorial jurisdiction. The expression “subject matter of the arbitration”, therefore, cannot be read to mean a Court where the suit can be filed in respect of that cause of action and would, therefore, cover all the provisions from Sections 16 to 20 of the Code of Civil Procedure. In other words, the pecuniary jurisdiction is no longer a material for deciding the jurisdiction of a Court being the principal Court of original jurisdiction for the purpose of a petition under Section 34 of the Arbitration and Conciliation Act. ………………
18. We, accordingly, answer the question formulated by us in paragraph 2 of the judgement as follows: The principal civil Court of original jurisdiction in a district for the purpose of a petition under Section 34 of the Act of 1996 is a District Court and does not include any other Court inferior to the District Court.”

17.As observed by the Special Bench of Bombay High Court, the condition contemplated in the definition of Court in Section 2(1)(e) of the 1996 Act is that, it should have jurisdiction to decide the questions forming the subject matter of the arbitration, if the same had been the subject matter of a suit. Mr. Banerjee emphasized on the sentence “The pecuniary jurisdiction of a Court has no significance for the purpose of the 1996 Act”, to argue that the High Court being superior to the City Civil Court, it was the High Court which was the Principal Civil Court, and therefore competent to entertain an application under the 1996 Act, irrespective of the pecuniary value of the claim. A judgment is a precedent for the issue of law that is decided. Sentences in a judgement must be read and understood in the context of the statutes under consideration of the Court and its findings on the issues before it. Sentences in a judgment are not to be read in isolation, in a truncated manner, and construed as statutes.

18. We are unable to accept the submission that the sentence “The pecuniary jurisdiction of a Court has no significance for the purpose of the 1996 Act” can be construed as a finding of the Special Bench of Bombay High Court that the High Court might entertain an application under the 1996 Act, even if it lacks pecuniary jurisdiction to entertain a suit in respect of the subject matter of arbitration. Mr. Ghosh argued, and perhaps rightly, that the Special Bench judgement of the Bombay High Court does not operate as a binding precedent on this Court. However, a judgement rendered by a Bench of coordinate strength or by a larger Bench of a different High Court, on a question in issue before this Court is certainly to be given due respect and followed unless the Court finds reasons for not concurring with the judgment. The judgment of the Special Bench of the Bombay High Court was rendered inter alia upon consideration of laws applicable in Maharashtra, the provisions of which are materially different from the provisions of the Bengal, Agra and Assam Civil Courts Act, 1887, applicable in the State of West Bengal or the provisions of the City Civil Courts Act, 1953, in consideration before us.

19. In M/s. Sundaram Finance Ltd Vs. M.K.Kurian and Anr. reported in AIR 2006 Mad. 218, the issue before the Division Bench of the Madras High Court was, whether the Madras High Court, exercising original civil jurisdiction under the Letters Patent, or the principal Judge of the City Civil Court constituted under the Chennai City Civil Court Act, 1892, was ‘Court’ within the meaning of Section 2(1)(e) of the 1996 Act, competent to exercise jurisdiction in respect of matters under the 1996 Act, value of which did not exceed Rs.10 lakhs. The Division Bench of Madras High Court held that the High Court would have jurisdiction since the Civil Court had limited pecuniary jurisdiction to deal with matters of value of less than Rs.10 lakhs, whereas under Clause 12 of the Letters Patent, the High Court had unlimited jurisdiction and this jurisdiction had expressly been saved under Section 16 of the Chennai City Civil Courts Act.

20. Section 16 of the Chennai City Civil Court Act, previously known as the Madras City Civil Court Act, provides as follows:-
“16. Nothing in this Act contained shall affect the original civil jurisdiction of the High Court:
Provided that –
(1) If any suit or other proceeding is instituted in the High Court which, in the opinion of the Judge who tries the same (whose opinion shall be final), ought to have been instituted in the City Court, no costs shall be allowed to a successful plaintiff and a successful defendant shall be allowed the costs [at the maximum admissible under the Madras High Court Fees Rules for suits set down for final disposal];
(2) in any suit or other proceeding pending at any time in the High Court, any Judge of such Court may, at any stage thereof make an order transferring the same to the City Court if in his opinion such suit or proceeding is within the jurisdiction of that Court and should be tried therein;
(3) in any suit or other proceeding so transferred. The Court fees Act, 1870, shall apply, credit being given for any fees levied in the High Court.”

21. Since, the High Court as well as the City Civil Court had jurisdiction to entertain suits of the subject matter of up to Rs.10 lakhs, the Court rightly held that, it was the High Court which would be the principal Court, in view of the definition of Court under Section 2(1)(e) of the 1996 Act. In contrast to Section 16 of the Chennai City Civil Court Act, the City Civil Court Act enacted by the West Bengal State Legislature, bars the jurisdiction of the High Court to try suits and proceedings of a civil nature, not exceeding Rs.10 lakhs in value. Furthermore, Section 21 of City Civil Court Act gives overriding effect to the City Civil Court Act over the Letters Patent.

22. In State of West Bengal and Ors. Vs. Associated Contractors reported in (2015) 1 SCC 32, cited by Mr. Banerjee, the Supreme Court drew a distinction between the definition of ‘Court’ in Section 2(c) of the Arbitration Act, 1940 and Section 2(1)(e) of the 1996 Act, which was materially different and held that the Supreme Court could not possibly be considered to be ‘Court’ within the meaning of Section 2(1)(e), even if it retains seisin over the arbitral proceedings inter alia holding:
“………….Firstly, as noted above, the definition is exhaustive and recognizes only one of two possible courts that could be “court” for the purpose of Section 2(1)(e). Secondly, under the 1940 Act, the expression “civil court” has been held to be wide enough to include an appellate court, and therefore would include the Supreme Court as was held in the two judgments aforementioned under the 1940 Act. Even though this proposition itself is open to doubt, as the Supreme Court exercising jurisdiction under Article 136 is not an ordinary appellate court, suffice it to say that even this reason does not obtain under the present definition, which speaks of either the Principal Civil Court or the High Court exercising original jurisdiction. Thirdly, if an application would have to be preferred to the Supreme Court directly, the appeal that is available so far as applications under Sections 9 and 34 are concerned, provided for under Section 37 of the Act, would not be available. Any further appeal to the Supreme Court under Article 136 would also not be available. The only other argument that could possibly be made is that all definition sections are subject to context to the contrary. The context of Section 42 does not in any manner lead to a conclusion that the word “court” in Section 42 should be construed otherwise than as defined. The context of Section 42 is merely to see that one court alone shall have jurisdiction over all applications with respect to arbitration agreements which context does not in any manner enable the Supreme Court to become a “court” within the meaning of Section 42. It has aptly been stated that the rule of forum conveniens is expressly excluded by Section 42 see JSW Steel Ltd. v. Jindal Praxair Oxygen Co. Ltd., SCC at p. 542, para 59). Section 42 is also markedly different from Section 31(4) of the 1940 Act in that the expression “has been made in a court competent to entertain it” does not find place in Section 42. This for the reason that, under Section 2(1)(e), the competent court is fixed as the Principal Civil Court exercising original jurisdiction or a High Court exercising original civil jurisdiction, and no other court. For all these reasons, we hold that the decisions under the 1940 Act would not obtain under the 1996 Act, and the Supreme Court cannot be “court” for the purposes of Section 42.”

23. The question of whether the High Court exercising ordinary original civil jurisdiction would be ‘Court’ within the meaning of Section 2(1)(e) of the 1996 Act, even though it might lack pecuniary jurisdiction to entertain a suit of equivalent pecuniary value, was neither in issue nor decided by the Supreme Court in Associated Cement (supra). In Surat Singh Vs. State of Himachal Pradesh and Anr. reported in 2003(3) Arb. LR 606 (HP) (DB), cited by Mr. Banerjee, a Division Bench of the Himachal Pradesh High Court held that, irrespective of the valuation of the subject matter of a reference or any application filed under Part 1 of the 1996 Act, including an application filed under Section 34 of the 1996 Act, no Court other than the Court of a District Judge would have the jurisdiction to decide such a reference or such an application. In other words, the Court of Senior Sub-Judge would not have the jurisdiction to decide such a reference or such an application.

24. Significantly, in Surat Singh’s case, an application under Section 34 of the 1996 Act, for setting aside an arbitral award, was first filed in the High Court. On noticing that the High Court did not have the pecuniary jurisdiction, a Single Bench directed that the application for setting aside the award be returned to the petitioner, for being presented in the Court of the Senior Sub Judge, Shimla. The Senior Sub-Judge, Shimla entertained a doubt with regard to his jurisdiction to deal with an application for setting aside an arbitral award under Section 34 of the 1996 Act in view of the definition of ‘Court’ in Section 2(1)(e) of the 1996 Act. In Surat Singh (supra) the Court of the District Judge did not lack pecuniary jurisdiction to entertain the claim. The Court of the District Judge obviously being a Court of higher grade than the Court of Sub-Judge, the Court of the District Judge would be the principal Civil Court. Moreover, the Division Bench did not hold that the High Court should have decided the application, notwithstanding the pecuniary value of the arbitral award. A statute must be construed and interpreted by ascertaining the intention of the legislature, which enacted the statute. It is the duty of the Courts to give effect to “the mens or sententia legis”, that is the true intention of the legislature. The intention of the Legislature must be found by reading the statute as a whole. It is well-settled that when the words of a statute are clear, plain and unambiguous, that is, they are reasonably susceptible to only one meaning, the Courts are bound to give effect to that meaning irrespective of consequences. This proposition finds support from the judgment of the Supreme Court in Nelson Motis Vs. Union of India reported in AIR 1992 SC 1981 (p. 1984). The intention of the Legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said, as held by the Supreme Court in Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. Vs. Custodina of Vested Forests reported in AIR 1990 SC 1747. A construction, which requires for its support, addition or substitution of words, or which results in rejection of words should be avoided. The Court cannot add to or alter the statutory provisions, or by construction, make up deficiencies in the statutory provisions. It is contrary to all rules of construction to read words into a statute, or overlook words in a statute, unless it is absolutely necessary to do so, to give effect to the statute. In this case, as observed above, Section 5(2) bars the jurisdiction of this High Court to try suits and proceedings of a civil nature not exceeding Rs.10 lakhs in value in its Original Side and Section 21 of the City Civil Court Act provides that the provisions of the City Civil Court Act shall have effect, notwithstanding anything contrary in any other law, including in particular the Letters Patent of the High Court. The City Civil Court Act, 1953 has overriding effect over the Letters Patent of the High Court.

25. In construing ‘Court’ under Section 2(1)(e) of the 1996 Act, we cannot overlook the phrase “having jurisdiction to decide the question forming the subject matter of the arbitration, if the same can be the subject matter of a suit”. As held by the Full Bench of this Court in Hriday Nath Roy (supra) and affirmed by the Supreme Court in Official Trustees West Bengal Vs. Sachindra Nath Chatterjee (supra), jurisdiction may have to be considered with reference to place, value and nature of the subject matter. The classification of jurisdiction into territorial jurisdiction, pecuniary jurisdiction and jurisdiction of the subject matter is of a fundamental character. In construing the phrase “having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit” in the definition of “Court” in Section 2(1)(e) of the 1996 Act, there is no reason why the expression jurisdiction should only be read as territorial jurisdiction, to the exclusion of pecuniary jurisdiction. Such a construction would amount to substitution of the words having jurisdiction in Section 2(1)(e) with the words having territorial jurisdiction or alternatively reading into the definition, the words ‘excluding territorial jurisdiction’, which is not permissible.

26. The 1996 Act being a comprehensive special statute, exhaustively dealing with matters relating to arbitration, an application under the said Act would have to be filed before the highest Civil Court in the district, including the High Court, exercising original civil jurisdiction, and having jurisdiction to decide the subject matter of the arbitration as if the same had been the subject matter of a suit, notwithstanding Section 15 of the Civil Procedure Code, which requires a suit to be filed in the lowest Court having pecuniary jurisdiction. However, where the Court lacks pecuniary jurisdiction it would not be Court within the meaning of Section 2(1)(e) of the 1996 Act. It is true that there is a difference between the definition of Court in Section 2(1)(e) of the 1996 Act and the definition of Court in Section 2(c) of the Arbitration Act, 1940. Under the Arbitration Act, 1940, an application could be filed in any civil Court having jurisdiction over the subject matter of the arbitration, if the same had been the subject matter of a suit. However, under the 1996 Act it is the principal Court having jurisdiction to decide the questions forming the subject matter of arbitration, if the same had been the subject matter of a suit. Jurisdiction to adjudicate the subject matter of a suit includes territorial jurisdiction, pecuniary jurisdiction and jurisdiction in respect of the subject matter. Where the highest Court has jurisdiction territorial, pecuniary and in respect of the subject matter, it is that Court alone which is competent to decide matters under the 1996 Act.

27. For the reasons discussed above, we are unable to agree with the view of Sanjib Banerjee, J., in Mrs. Hosenara Begum Vs. Sk. Asraf Ali & Ors. (supra) that the City Civil Court would not have jurisdiction to receive a petition under the 1996 Act, irrespective of the value of the claim, as long as the High Court exercised ordinary original jurisdiction. We agree with the Tandon, J. and hold that where the value of the subject matter of the disputed claim in arbitration does not exceed Rs.10 lakhs, the Original Side of this Court has no jurisdiction to entertain an application under the 1996 Act. If the value of the subject matter of the dispute in arbitration does not exceed Rs.10 lakhs an application under the 1996 Act can only be entertained by the City Civil Court at Calcutta and not the High Court exercising original jurisdiction. However, where the value of the subject matter of the dispute in arbitration exceeds Rs.10 lakhs it is the Original Side of the High Court alone which would have jurisdiction to entertain an application under the 1996 Act.

28. The revisional application may be remitted before the learned Single Bench for decision on merit. Urgent xerox certified copy, if applied for, be delivered to the learned counsel for the parties, upon compliance of all usual formalities.

I Agree. Sahidullah Munshi, J.

................

(2015) 119 (3) CWN (Cal) 383

IN THE HIGH COURT AT CALCUTTA

(BEFORE DR. MANJULA CHELLUR, C.J. AND JOYMALYA BAGCHI, J.)

District Civil Bar Association and Anr. …Appellants
Vs.
State of West Bengal & Ors. …Respondents

F.M.A. 2541 of 2015 with C.A.N. 792 of 2015; Constitutional Writ Jurisdiction; Appellate Side; Judgment on: 05.10.2015

Code of Civil Procedure, 1973, Section 438; Constitution of India, Article 227 – Legal issue is raised before the Learned Single Judge that it is not permissible to file criminal appeals revision before any other court than Session Judge – Constitution of India gives ample powers

of superintendence to the High Court in its Administrative capacity to distribute judicial business amongst sub-ordinate courts – High Court has ample Administrative powers of superintending over subordinate courts to assign or transfer any case or class of cases including appeals or revisions to a particular court – notification authorising Additional District Sub Judge posted in sub division has not been suffered from lack of jurisdiction to entertain appeals or revisions - Administrative power of High Court cannot is any stretch of imagination be lapsed by operation of the statutory provisions of the court.

Ratio decidendi:-
Notification authorising Additional District Sub Judge posted in sub division has not been suffered from lack of jurisdiction to entertain appeals or revisions. Administrative power of High Court cannot be any stretch of imagination is lapsed by operation of the statutory provisions of the court.

Observations of the Court:-
In order to appreciate the real controversy before us it would be just and proper for us to read the resolution of the Administrative Committee of the High Court and also the concerned notification. The resolution of the Administrative Committee of the High Court dated 11.5.2011 reads as under:-
“………Therefore, it is made clear that in all districts of the State of west Bengal having Additional District & Sessions Judge in subdivisions, filing of matrimonial suits and motor accident claims cases shall be allowed, for which the respective District Judges should make necessary provision. It is further made clear that the Resolution of the Administrative Committee (of) June 9, 1999, does not prohibit filing of such applications and suit; on the other hand, it clearly records that Additional District & Sessions Judges located at the sub-divisional headquarters shall have the requisite power of accepting the filing of all appeals, applications etc., which includes matrimonial suits and motor accident claims cases.”(para 10)
In terms of the said notification, District and Sessions Judge Purba Midnapur issued memo dated 6.9.2014 directing Additional District and Sessions Judges posted at Haldia/Contai Sub-Division to exercise powers in terms of impugned notification. The aforesaid notifications as well as resolution of the committee were the subject matter of challenge before the learned Single Judge.(para 12)
The plain reading of the above and the said provision clearly shows that the appeal against the order of conviction and sentence as envisaged therein was like before the Court of Sessions and not the Sessions Judge. A Court of Sessions under Section 9 of the Code comprises of a principle Judge, namely, the Sessions Judge, as well as such number of Additional Sessions Judges and Assistant Sessions Judges, as may be appointed by the High Court. Therefore, an appeal against an order of conviction and sentence under Sub-Section 3 of Section 374 Cr.P.C. filed before an Additional Session Judge who is a constituent of the Court of Sessions in terms of the impugned notification cannot be said to be contrary to the provisions of the Code of Criminal Procedure particularly Section 374(3) thereof.(para 15)
There cannot be any dispute that that constitutional power of superintendence of subordinate Courts by the High Court in its Administrative side cannot be by any stretch of imagination be eclipsed by operation of statutory provisions of the Court. In fact, in case of conflict (although there is none in the present case) the latter has to yield to the superior Constitutional authority. Apart from exercising its judicial powers of transfer under Section 407 of the Cr.P.C., the High Court has ample Administrative Powers of superintending over subordinate criminal Courts to assign or transfer any case or class of cases including appeals or revisions to a particular Court or a class of Courts.(para 16)

Held:-
In the contention that the notification authorizing the Additional Sessions Judge posted in Sub-Divisions other than the District Head Quarters to entertain appeals or revisions arised in such Sub-Division suffers from lack of jurisdiction.

Advocates who appeared in this Case:-
For the Appellants:-Mr. Bikash Ranjan Bhattacharyya, Mr. Uday Narayan Betal, Mr.Bhaskar Hutait
For the State:-Mr. Jayanta Mitra, Ld. A.G., Mr. Tapan Kumar Mukherjee, Mr. Bikash Kumar Mukherjee
For the Respondent:-Mr. Kishore Dutta, Ms. Sumita Shaw

List of cases cited:-
Kamlesh Kr. & Ors. Vs. State of Jharkhand & Ors., 2013(15) SCC 460 (relied on)

The Judgement of the Court was delivered by Dr. Manjula Chellur, Chief Justice:-

1. This appeal is directed against the judgment of learned Single Judge dated 17.12.2014 whereby the learned Single Judge has dismissed the writ petition.

2. The writ petition was filed assailing the resolution of Administrative Committee of the High Court dated 11.5.2011 as well as the consequential Government notification dated 22.9.2011 which, inter alia, empowered the Courts of Additional District and Sessions Judge i.e. the Sub-Divisional Head Quarters to have requisite power of entertaining the filing of all the appeals, applications except those are coming under Section 438 of Code of Criminal Procedure, 1973 or those applications which are required to be filed before District Judge under any other statute.
3. Although the notification published in the official gazette was also with regard to matrimonial suits but there was no challenge to the said issue, therefore, learned Single Judge was justified in opining that there is no need to decide the same.

4. The legal issue raised before the learned Single Judge was with regard to the resolution of the Administrative Committee of the High Court and consequential notification contending that there is violation of provisions of the Code of Criminal Procedure, 1973, particularly, the second proviso to Sub-Section 3 of Section 9 of the Code as applicable in the State of West Bengal.

5. According to them, it is not permissible to file criminal matters before any other Court than the Sessions judge. As the code mandates that only Seasons Judge presided over a Court of Sessions alone is obliged to receive such criminal matters and not any Additional Session’s Judge.

6. The learned Judge ultimately opined that consequence of the first proviso to Section 9(3) of the Code if applicable in the State of West Bengal then there cannot be exclusion of one particular Sub-Division in isolation and ultimately opined that if Additional Sessions Judge is the head of the criminal Courts hierarchy at the sub-division why the entire process pertaining to appeals, applications etc. should not be brought before the said Court? Especially when the larger public policy contained in the notification clearly mandates that the object of notification was to promote or bring justice closure to the door steps of a litigant within the parameter of the territorial jurisdiction as recognized in the criminal jurisprudence. He also opined that there is an element of centralization and concentration of work in the District Head Quarters which should not be the criterion to challenge the notification in question. Accordingly, dismissed the writ petition as void of merits.

7. Learned Senior Counsel Mr. Bikash Ranjan Bhattacharyya argued for the appellant Bar Association and learned Advocate General argued for State of West Bengal. Mr. Bhattacharyya, learned Senior Counsel arguing for the appellant assailed the notification primarily on the ground that the amendment brought by the State so far as Section 9(3) of the Code of Criminal Procedure as introduced by Code of Criminal Procedure (West Bengal Amendment) Act, 1988 (West Bengal Act XXIV of 1988) (hereinafter referred to as the West Bengal Criminal Law Amendment Act of 1988) had not coming to force since it was not notified in terms of Section 1(2) of the sad Amending Act and, therefore, the learned Judge was not justified in placing reliance on the said provision in upholding the notification in question. He alternatively contends that even if such Amendment had come into force, it did not empower the Additional Sessions Judges in the Sub-Divisions to entertain appeals and revisional applications under Sections 374(3) and Section 397 of the Code of Criminal Procedure.

8. According to him, the power to transfer and revisional proceeding is vested in the Sessions Judge under Section 400 of Cr.P.C., therefore, there cannot be usurption of the same by the impugned notification. He stressed upon the observations made by learned Single Judge as to the alleged motive or intention of the appellant /writ petitioners in preferring the writ petition as uncalled for and unwarranted and sought to be expunged.

9. Per contra, learned Advocate General arguing for State contended that West Bengal Criminal Law Amendment Act of 1988 has been duly notified and had coming to force with effect from 2.5.1989 since Administrative Committee of the High Court at Calcutta had taken a decision to decentralize judicial powers by virtue of resolution dated 11.5.2011 and the impugned notification has been issued by the State Government on 22.9.2011 in terms thereof. He also refers to Article 227 of the Constitution of India contending that it give ample powers of superintendence to the High Court in its Administrative capacity to distribute judicial business amongst subordinate Courts for public convenience. Hence, there is no scope for interference with the impugned notification is the stand of the State.

10. In order to appreciate the real controversy before us it would be just and proper for us to read the resolution of the Administrative Committee of the High Court and also the concerned notification. The resolution of the Administrative Committee of the High Court dated 11.5.2011 reads as under:-
“………Therefore, it is made clear that in all districts of the State of west Bengal having Additional District & Sessions Judge in subdivisions, filing of matrimonial suits and motor accident claims cases shall be allowed, for which the respective District Judges should make necessary provision. It is further made clear that the Resolution of the Administrative Committee (of) June 9, 1999, does not prohibit filing of such applications and suit; on the other hand, it clearly records that Additional District & Sessions Judges located at the sub-divisional headquarters shall have the requisite power of accepting the filing of all appeals, applications etc., which includes matrimonial suits and motor accident claims cases. The only prohibition is in respect of applications and suits which are required to be filed before the District Judge under any statute, to mean, where the statute specifically provides that such applications/suits will be decided by the District Judges as persona designate.”

11. As a matter of fact the above resolution is a clarificatory
one which clarified an earlier resolution adopted on 9.6.1999. It also brought on record that such decision was thereafter approved by the full Court on circulation of the resolution of the committee. Pursuant to such resolution, on 22.9.2011, the State of West Bengal published a notification in the official gazette relevant portion thereof is set out herein below:-
“…….. all courts of Additional District and Sessions Judges located at the Sub-divisional Head Quarters shall have the requisite power of accepting the filing of all appeals, applications, except those under Section 438 of the Code of Criminal Procedure, 1973 (2 of 1974) as well as those applications/suits which are required to be filed before the District Judge under any statute and such resolution has been ratified by the High Court at Calcutta…….”

12. In terms of the said notification, District and Sessions Judge Purba Midnapur issued memo dated 6.9.2014 directing Additional District and Sessions Judges posted at Haldia/Contai Sub-Division to exercise powers in terms of impugned notification. The aforesaid notifications as well as resolution of the committee were the subject matter of challenge before the learned Single Judge. With regard to the 1st issue, relevant notification giving effect to the said Amendment Act of 1988 has been placed for our perusal. The said notification reads as follows:-
“No. 8105-J dated 15th April, 1989. In exercise of powers conferred by
Sub-section (2) of section 1 of the Code of Criminal Procedure (West Bengal Amendment) Act 1988 (West Bengal Act XXIV of 1988), the Governor is pleased hereby to appoint the 2nd Day of March, 1989 as the date on which the said Act shall come into force.”

13. Accordingly, the first issue raised fails and decided against
the appellant. The second issue raised on behalf of the appellants is that the proviso to Section 9(3) of the Code of Criminal Procedure as incorporated by West Bengal Act, XXIV of 1988 does not empower the Additional Sessions Judges in the Sub-Division to entertain criminal appeals and revision petitions under Sections 374(3) and 397 of Cr.P.C. respectively without such cases being transferred to them by the Sessions Judge. It is relevant to reproduce proviso to Section 9(3) of Criminal Procedure Code which reads as under:-
“After sub-sec. (3) Insert the following provisions:
Provided that notwithstanding anything to the contrary contained in this Code, an Additional Sessions Judge in a Sub division, other than the subdivision, by whatever name called, wherein the headquarters of the Sessions Judges are situated, exercising jurisdiction in a Court of Session shall have all the powers of the Sessions Judge under this Code, in respect of the cases and proceedings in the Criminal Courts in that subdivision, for the purposes of sub-section (7) of sections 193 and 194, clause (a) of section 209 and sections 409, 439 and 449:
Provided further that the above powers shall not be in derogation of the powers otherwise exercisable by an Additional Sessions Judge or a Sessions Judge under this Code”

14. Reading of the above proviso definitely does not make reference to either to the appellate powers under Section 374 Cr.P.C. or revision section 397 Cr.P.C.
Sub Section 3 of Section 374 reads as under:-
“Save as otherwise provided in sub-section (2), any person,-
(a) convicted on a trial held by a Metropolitan Magistrate of Assistant Sessions Judge or Magistrate of the first class, or of the second class, or
(b) sentenced under section 325, or
(c) in respect of whom an order has been made or a sentence has been passed under section 360 by any Magistrate, may appeal to the Court of Session.”

15. The plain reading of the above and the said provision clearly shows that the appeal against the order of conviction and sentence as envisaged therein was like before the Court of Sessions and not the Sessions Judge. A Court of Sessions under Section 9 of the Code comprises of a principle Judge, namely, the Sessions Judge, as well as such number of Additional Sessions Judges and Assistant Sessions Judges, as may beappointed by the High Court. Therefore, an appeal against an order of conviction and sentence under Sub-Section 3 of Section 374 Cr.P.C. filed before an Additional Session Judge who is a constituent of the Court of Sessions in terms of the impugned notification cannot be said to be contrary to the provisions of the Code of Criminal Procedure particularly Section 374(3) thereof.

16. Coming to the revisional powers of the Sessions Court of the Sessions Judge, it has been argued that such power rests in the Session Judge alone under Section 397 of Cr.P.C. and can be exercised by the Additional Sessions Judge in respect of the cases transferred to him by or under a general or special order of the Sessions Judge under Section 400 of Cr.P.C. Hence, it is contended that the impugned notification empowering the Additional Session Judge to entertain Revisional application is without authority of law. The impugned notification dated 22.5.2011 was issued in pursuance of a resolution taken by the Administrative Committee of the High Court which was adopted by the full Court of the High Court. The notification is nothing but an expression of the Administrative Direction issued by the High Court in exercise of its powers under Article 227 of the Constitution of India.

17. There cannot be any dispute that that constitutional power of superintendence of subordinate Courts by the High Court in its Administrative side cannot be by any stretch of imagination be eclipsed by operation of statutory provisions of the Court. In fact, in case of conflict (although there is none in the present case) the latter has to yield to the superior Constitutional authority. Apart from exercising its judicial powers of transfer under Section 407 of the Cr.P.C., the High Court has ample Administrative Powers of superintending over subordinate criminal Courts to assign or transfer any case or class of cases including appeals or revisions to a particular Court or a class of Courts.

18. It would be appropriate to refer to decision in the case of Kamlesh Kr. & Ors. Vs. State of Jharkhand & Ors. reported in 2013(15) SCC 460. Relevant portion of the said judgement reads as under:
“The High Court does not have the power to transfer the cases and appeals under Section 407 CrPC which is essentially a judicial power. Section 407(1)(c) CrPC lays down that, where it will tend to the general convenience of the parties or witnesses, or where it was expedient for the ends of justice, the High Court could transfer such a case for trial to a Court of Session. That does not mean that the High Court cannot transfer cases by exercising its administrative power of superintendence which is available to it under Article 227 of the Constitution of India. While repelling the objection to the exercise of this power, this Court observed in para 13 of Ranbir Yadav as follows:
“13. We are unable to share the above view of Mr. Jethmalani. So long as power can be end is exercised purely for administrative exigency without impinging upon and prejudicially affecting the rights or interests of the parties to any judicial proceeding we do not find anyreason to hold that administrative powers must yield place to judicial powers simply because in a given circumstance they coexist.”

19. For the reasons state above, there is no substance in the objections raised by the petitioners. The High Court has looked into Section 407 CrPC, referred to Articles 227 and 235 of the Constitution of India, and thereafter in its impugned judgment has observed as follows:
“Having perused Section 407 CrPC and Articles 227 and 235, I have no hesitation to hold that this Court either on the administrative side or in the judicial side has absolute jurisdiction to transfer any criminal cases pending before one competent court to be heard and decided by another court within the jurisdiction of this Court. This Court in its administrative power can issue direction that cases of particular nature shall be heard by particular court having jurisdiction.”

20. In the light of above discussion and reasoning, we are unable to accept the contention of the learned Senior Counsel for the appellant Mr. Bhattacharyya, that the notification authorizing the Additional Sessions Judge posted in Sub-Divisions other than the District Head Quarters to entertain appeals or revisions arising in such Sub-Division suffers from lack of jurisdiction. Lastly it has been argued that certain observations were made in the impugned judgment attributing/motive to the appellant’s Association in preferring writ petition which were uncalled for and such observations be expunged. The impugned observations are as follows:-
“Merely because a motely group of persons have got used to a certain way of functioning and find it inconvenient to travel to or distasteful to set up base at lesser stations cannot be a basis for questioning what is both proper and imperative as introduced by the impugned notification and the apt comprehension thereof reflected in the District Judge's letter. WP 27645(W) of 2014 is dismissed as unmeritorious, but the petitioners are spared the costs for an attempt that may have been for ulterior motive but did not otherwise lack in bona fides.”

21. Reading the aforesaid observations, we find that the learned Single Judge did not impose cost upon the appellants on the premise that the appellants did not otherwise lack in bona fides.

22. It, therefore, appears that the learned Single Judge while entertaining doubt as to the motives as to the petitioners had not come to any definite conclusion with certainty in respect thereof. On factual basis also we cannot conclude that the appellants being professional bodies had been persuaded by selfish and ulterior motive in instituting the writ petition.

23. On the other hand, we feel that they were prompted by a bonafide erroneous believe that the impugned notification was ultra vires the provisions of the Code and without jurisdiction.

24. Though for reasons aforesaid we are unable to subscribe to such view of appellant, we are of the opinion that in the factual matrix of the case and in the absence of any conclusive findings as to mala fides of the appellants, the aforesaid observations made against the appellants by learned Single Judge needs to be expunged.

25. Accordingly, the aforesaid observations in the judgment under appeal are expunged. With the aforesaid modification and direction, the appeal disposed of. There shall be no order as to costs.

I agree. (Joymalya Bagchi, J.)

…………………………………

(2015) 119 (3) CWN (Cal) 396

IN THE HIGH COURT AT CALCUTTA

(BEFORE JYOTIRMAY BHATTACHARYA AND DEBI PROSAD DEY, JJ.)

Banwarilal Jalan & Ors. …Appellants
Vs.
Prameswari Devi & Ors. …Respondents

F.M.A.T 364 of 2015 with CAN 5512 of 2015 and CAN 8159 of 2015 and CAN 8751 of 2015; Civil Appellate Jurisdiction; Appellate Side; Judgment on: 08.10.2015

Code of Civil Procedure, 1908, Section 92 – Leave was granted under Section 92 of the Code and revoked by the Court below – prayed for withdrawn of revocation - once the application was allowed, it could not be withdrawn subsequently – trust is not made party to the proceedings and interested persons have not come forward – when all trustees are present before the Court, the suit can be proceeded – any person representing all the beneficiaries under the trust can be regard as interested persons – beneficiary is deprived of beneficial interest, can make an application for leave under Order 1 Rule 8 of the Code – a trustee alone cannot make the application under Section 92 of the Code.

Ratio decidendi:-
A beneficiary is deprived of beneficial interest, can make an application for leave under Order 1 Rule 8 of the Code. A trustee alone cannot make the application under Section 92 of the Code.

Observations of the Court:-
Once his application was allowed, he, in our considered view, cannot apply for withdrawal of the said application. An application can be withdrawn before its disposal. The prayer for withdrawal of the application cannot be allowed after its disposal. As such at this stage we cannot permit the defendant/respondent No.1 to withdraw the said application. Let us now consider the prayer of the defendant/respondent No.1 for his transposition to the category of the plaintiff. On perusal of the leave application/plaint, we have seen that several allegations were made against the defendant No.1. Reliefs have also been claimed against him in the plaint.(para 8)
Now a question has cropped up as to whether anyone, who is not a beneficiary under the trust and who is nor even remotely connected with trust can be regarded “as a person interested in the trust”. On reading the leave application and/or the plaint as a whole, we find that the plaintiff No.2 has neither claimed himself to be a beneficiary under the trust nor he has claimed that he has any subsisting interest even in the management and/or administration of the trust. As such apparently it appears that the plaintiff No.2 cannot be regarded as a person interested.(para 16)
The trust was created for charitable and religious purpose. It is a public trust. Suit which is contemplated under Section 92 of the Civil Procedure Code is in the nature of the representative suit. As such any person who has taken upon himself the responsibility of representing all the beneficiaries under the trust can be regarded as a person interested in the trust. But now a question arises as to whether any person who is not a part of the beneficiaries under the trust, can he represent himself as the representative of the beneficiary or the group of beneficiaries.(para 18)
Thus we hold that the plaintiff No.1 being a trustee alone cannot maintain the application under Section 92 of the Civil Procedure Code. Had any personal relief being sought for, then in view of the decision of the Hon’ble Supreme Court in the case of Vidyodaya Trust V. Mohan Prasad & Ors. reported in 2008 (4) SC 116, leave under Section 92 of the Civil Procedure Code could have been refused. Since the plaintiffs are not seeking any declaration of their individual or personal right or the individual or personal rights of any other person or persons in whom they are interested, Leave under Section 92 of the Civil Procedure Code cannot be refused.(paras 19 and 20)

Held:-
We hold that since two persons having interest in the trust have not come forward seeking leave to sue under Section 92 of the Civil Procedure Code, leave which was granted under Section 92 of the Civil Procedure Code, in our view was rightly revoked by the learned Additional District Judge.

Advocates who appeared in this Case:-
For the Appellants: Mr. Aniruddha Chatterjee, Mr. Srijib Chakraborty, Mr. Aasish Choudhury
For the Defendant No.1: Mr. Sakya Sen, Mr. Swaraj Shaw, Mr.Meghnath Dutta, Mr. Pradeep Kumar
For the Respondent No.2: Mr. S. Sarkar, Mr. D.N. Sharma, Mr. Gaurav Khaitan, Mr. Shwetaank Nigam

List of cases cited:-
S. Guhan & Ors. Vs. Rukmini Devi Arundale & Ors., AIR 1988 Madras 1 (relied on)
L.M. Menezes & Ors. Vs. Most Rev. Arul Das Jamas & Ors. AIR 2003 Madras, 241 (relied on)
Savitri Devi Vs. District Judge, Gorakhpur & Ors., 1999 (2) SC page 577 (relied on)
Venugopal Naidu Vs. Venkatrayulu Naidu Charities, AIR 1990 SC 444 (relied on)
Vidyodaya Trust Vs. Mohan Prasad & Ors., 2008 (4) SC 116 (relied on)

The Judgement of the Court was delivered by Jyotirmay Bhattacharya, J.:-
1. This First Miscellaneous Appeal is directed against an order being No.36 dated 20th December, 2014 passed by the learned Additional District Judge, 10th Court at Alipore in Title Suit No.3 of 2010, at the instance of the plaintiffs/appellants. By the impugned order, leave which was granted under Section 92 of the Civil Procedure Code in favour of the plaintiff’s was revoked. The legality and/or validity of the said order is under challenge in this appeal. Let us now consider the merit of the instant appeal in the facts of the present case.

2. Revocation of the leave which was granted under Section 92 of Civil Procedure Code in favour of the plaintiffs was sought for, on three-fold grounds which are as follows:-
i) The trust has not been made a party defendant.
ii) The plaintiff No.2 is patently not “a person interested” as contemplated in Section 92 of the Civil Procedure Code to institute a suit under the said section either as a trustee or as a person enjoying the benefit of the said charitable trust or in any other way.
iii) The purport and nature of the allegations made in the plaint makes it quite obvious that the plaintiff No.1, as an alleged trustee seeks the enforcement of his alleged rights and obligations under the trust and not for vindication of any public right or general right of the public.

3. The suit is fundamentally concerned with and centres round personal family feuds without any pretence of public good in mind. The learned Trial Judge revoked the leave granted under Section 92 of the Civil Procedure Code on two grounds. The learned Trial Judge held that in a proceeding for seeking leave to institute a suit under Section 92 of the Civil Procedure Code, trust is a necessary party to the proceeding and for non-joinder of the trust as a party to the said proceeding, the said proceeding is liable to be dismissed.
4. The learned Trial Judge further held that the plaintiff No.2
being neither a trustee nor a person having interest in the trust nor a person claiming any benefit under the trust, cannot be held to be a person interested within the meaning of the expression “person having an interest in the trust”, used in Section 92 of the CPC. Thus, the learned Trial Judge held that if the plaintiff No.2 is not a person interested in the trust then the pre-condition for grant of leave to sue under Section 92 of the Civil Procedure Code, is not satisfied as only one trustee, namely, the plaintiff No.1 alone cannot seek such leave under Section 92 of the Civil Procedure Code.

5. The learned Trial Judge, however, did not consider the other ground of revocation i.e, seeking such leave to sue is the outcome of family feuds, which was made out by the defendant No.1 in his said application. Before we proceed to consider the merit of the instant appeal, we like to mention here that the defendant No.1, who applied for rejection of the plaint and prayed for revocation of the leave granted by the learned Trial Judge, has filed an application before this Court praying for his transposition to the category of the plaintiff.

6. Mr. Sen, learned Advocate appearing for the defendant/respondent No.1 submits that his client does not want to press the application under Order 7 Rule 11 of the Code of Civil Procedure. In effect he prayed for recall of the order of rejection of the plaint and for allowing his client to be transposed to the category of the plaintiff. Let us first for all consider the merit of this application before proceeding to consider the merit of this appeal.

7. Application for revocation of the leave granted by the learned Additional District Judge was filed by Mr. Sen’s client before the learned District Judge. On his application the leave which was granted under Section 92 of the Code of Civil Procedure, was revoked. Thus, the application which was filed by him was allowed.

8. Once his application was allowed, he, in our considered view, cannot apply for withdrawal of the said application. An application can be withdrawn before its disposal. The prayer for withdrawal of the application cannot be allowed after its disposal. As such at this stage we cannot permit the defendant/respondent No.1 to withdraw the said application. Let us now consider the prayer of the defendant/respondent No.1 for his transposition to the category of the plaintiff. On perusal of the leave application/plaint, we have seen that several allegations were made against the defendant No.1. Reliefs have also been claimed against him in the plaint.

9. Since allegations are made against the said defendant in the plaint and reliefs have also been claimed against him, we cannot allow the said defendant to be transposed to the category of the plaintiff in the set of facts narrated in the said plaint constituting cause of action for filing the said application under Section 92 of the Civil Procedure Code. Accordingly his prayer for transposition to the category of the plaintiff is rejected.

10. Let us now consider the merit of the instant appeal in the facts of the present case. We have already mentioned above that the leave which was granted under Section 92 of the Civil Procedure Code was revoked by the learned Additional District Judge primarily on two grounds, namely,
(i) trust being the necessary party having not been impleaded in the proceeding, the application is not maintainable and
(ii) two interested persons have not come forward seeking leave under Section 92 of the Civil Procedure Code.

11. Let us deal with the point of maintainability of this proceeding due to non-joinder of necessary party. Mr. S. Sarkar, learned Senior Counsel appearing for the respondent No.2, has drawn our attention to the pleadings made out in the said application and the reliefs claimed therein. He pointed out that one of such reliefs claimed in the suit relates to framing of scheme relating to the trust. He submitted that when framing of scheme relating to trust is prayed for, trust being a necessary party must be added as a party in the proceeding. He, by relying upon the following two decisions of the Hon’ble Madras High Court submitted that the trust being necessary party having not been impleaded to the proceeding, suit was liable to be dismissed:-
i) AIR 1988 Madras 1 S Guhan & Ors. V. Rukmini Devi Arundale & Ors.
ii) AIR 2003 Madras 241 L. M. Menezes & Ors. V. Most Rev. Arul Das Jamas & Ors.

12. Mr. Chatterjee, learned Advocate appearing for the plaintiff, refuted such submission of Mr. Sarkar by submitting that trust is not a necessary party in such proceeding. He submits that trust is not a juristic person, which is incapable of representing itself before the Court of law. According to him, trust is nothing but an obligation reposed on the trustees for carrying out their duties as per the terms of the trust deed for fulfilling the object for which the trust was formed. He submitted that when all the trustees of the said trust are parties to the proceeding, absence of the trust cannot vitiate the proceeding. He also made an alternative argument before this Court by submitting that even if it is ultimately found that the trust is a necessary party, then by following the principle of avoidance of multiplicity of proceeding, the trust can be impleaded as a party in the present proceeding, in exercise of the Court’s suo motu power under Order 1 Rule 10(2) of the Civil Procedure Code. To support his submission that the trust is not a necessary party, Mr. Chatterjee has relied upon a decision of the Madras High Court reported in 171 LR (Madras) page 143. He has also relied upon a decision of the Hon’ble Supreme Court in the case of Savitri Devi V. District Judge, Gorakhpur & Ors. reported in 1999 (2) SC page 577 wherein it was held by the Hon’ble Supreme Court that avoidance of multiplicity of proceeding is the other object of addition of party under Order 1 Rule 10(2) of the Civil Procedure Code.

13. After considering the rival contention of the parties and after considering the decisions cited at the bar, we have come to a conclusion that the trust being not a juristic person need not be added as a party in such proceeding particularly when all the trustees are before the Court. If the trust is added, a question will arise as to who will represent the said trust. Plaintiff No.1 is admittedly a trustee. Both the defendant Nos.1 and 2 are trustees. They are fighting with each other. If the trust is added then another front of dispute will be introduced between the parties as to who will represent the trust. To avoid such a situation it will be better if the trust is not impleaded as a party in such a proceeding. Since all the trustees are parties to the proceeding, whatever scheme will ultimately be framed by the Court, will be the guiding rules for the trustees for administration of the trust. All the trustees will be bound by the scheme which will be framed by the Court. Even their successors will also be bound by the scheme to be framed by the Court. As such even in the absence of the trust, the suit can be proceeded with. We thus, hold that for non-joinder of the trust, the leave which was granted under Section 92 of the Civil Procedure Code ought not to have been revoked.

14. Let us now consider the other ground on which leave granted under Section 92 of the Civil Procedure Code was revoked. Learned Court below held that the plaintiff No.2 is not a person interested. As such the condition for maintaining an application under Section 92 of the Civil Procedure Code is not fulfilled. Let us now consider the legality of such finding of the learned Trial Judge.

15. Admittedly, the plaintiff No.1 is a trustee. It is also an admitted fact that the plaintiff No.2 is not a trustee. The plaintiffs however, claim that the plaintiff No.2 as a person interested in the trust has joined with the plaintiff No.1 for seeking the leave under Section 92 of the Civil Procedure Code. Section 92 of the Civil Procedure Code, provides that such leave to sue may be sought for by the learned Advocate General or by two or more persons having an interest in the trust.

16. Reading the objects for which the trust was created, no one can express any doubt about the nature of the trust which is undoubtedly a public trust. The plaintiff No.1 and the defendant Nos. 2 & 3 are trustees of such public trust. Plaintiff No.1 alone cannot seek leave under Section 92 of Civil Procedure Code. Plaintiff No.2 claiming himself to be the representative of the public at large, joined with the Plaintiff No.1 as a person interested in the trust. Now a question has cropped up as to whether anyone, who is not a beneficiary under the trust and who is nor even remotely connected with trust can be regarded “as a person interested in the trust”. On reading the leave application and/or the plaint as a whole, we find that the plaintiff No.2 has neither claimed himself to be a beneficiary under the trust nor he has claimed that he has any subsisting interest even in the management and/or administration of the trust. As such apparently it appears that the plaintiff No.2 cannot be regarded as a person interested.

17. Mr. Chatterjee, learned Counsel, however, relied upon the decision of the Hon’ble Supreme Court in the case of Venugopal Naidu Vs. Venkatrayulu Naidu Charities reported in AIR 1990 SC 444 to support his submission that a proceeding of this nature pertakes the character of a representative suit and as such anybody being the representative of the remotest public at large which has beneficial interest in the trust, can maintain an application under Section 92 of the Civil Procedure Code by describing himself as a party interested in the trust.

18. We have already indicated above that the trust was created for charitable and religious purpose. It is a public trust. Suit which is contemplated under Section 92 of the Civil Procedure Code is in the nature of the representative suit. As such any person who has taken upon himself the responsibility of representing all the beneficiaries under the trust can be regarded as a person interested in the trust. But now a question arises as to whether any person who is not a part of the beneficiaries under the trust, can he represent himself as the representative of the beneficiary or the group of beneficiaries. The answer is “No”. To become a representative, he/she must be one of such affected persons who is deprived of enjoying the beneficial interest under trust. Once he proves that he is a beneficiary under the trust and he is deprived of the beneficial interest due to mismanagement of the trust, he for himself as well as for the other affected beneficiaries can maintain a leave petition under representative nature of litigation under Order 1 Rule 8 of the Civil Procedure Code.

19. We, thus, hold that when the plaintiff No.2 is not a beneficiary under the trust, he cannot take the responsibility of representing the affected public at large. Thus we hold that the plaintiff No.1 being a trustee alone cannot maintain the application under Section 92 of the Civil Procedure Code. Mr. Sarkar, learned Senior Counsel also tried to impress upon us by reading the pleadings of the suit and the reliefs claimed therein that the said proceeding is nothing but an outcome of the family feuds. We have considered the plaint and/or the leave application as a whole but we are unable to find out any relief claimed in the said suit which was personal to the plaintiffs.

20. The entire plaint allegations are against the defendant for improper administration and/or mismanagement of the trust. Relief for recovery of possession of portion of the trust property from some of the trustees have also been claimed in the said suit but neither the plaintiff No.1 nor the plaintiff No.2 prayed for recovery of such trust property to their benefit. They have prayed for direction upon the defendants for delivery of possession of the trust property to the trustees. Had any personal relief being sought for, then in view of the decision of the Hon’ble Supreme Court in the case of Vidyodaya Trust V. Mohan Prasad & Ors. Reported in 2008 (4) SC 116, leave under Section 92 of the Civil Procedure Code could have been refused. Since the plaintiffs are not seeking any declaration of their individual or personal right or the individual or personal rights of any other person or persons in whom they are interested, Leave under Section 92 of the Civil Procedure Code cannot be refused.

21. Be that as it may, we hold that since two persons having interest in the trust have not come forward seeking leave to sue under Section 92 of the Civil Procedure Code, leave which was granted under Section 92 of the Civil Procedure Code, in our view was rightly revoked by the learned Additional District Judge. We, thus, approve the impugned order for the reason as aforesaid.

22. The appeal is, thus, dismissed. All pending applications are disposed of. Urgent photostat certified copy of this order, if applied for, be given to the parties as expeditiously as possible.
I agree (Debi Prosad Dey, J.)

(2015) 119 (3) CWN (Cal) 407

IN THE HIGH COURT AT CALCUTTA

(BEFORE DR. MANJULA CHELLUR, C.J. AND JOYMALYA BAGCHI, J.)

Nirmal Utthasini                                                    …Appellant
Vs.
The State of West Bengal & Ors.                      …Respondents
With
Kartik Das                                                             …Appellant
Vs.
The State of West Bengal & Ors.                      …Respondents
With
The State of West Bengal & Ors.                          …Appellant
Vs.
Ashoke Bandyopadhyay                                    …Respondents

F.M.A. 2351 of 2014, F.M.A. 3681 of 2014, M.A.T. 1520 of 2013, C.A.N. 10148 & 11447 of 2013, C.A.N. 10447 of 2014; Constitutional Writ Jurisdiction; Appellate Side; Judgment on: 16.10.2015

A. Constitution of India, Article 200, 254(2), 243 ZK (2); West Bengal Co-operative Societies Act, 2006; West Bengal Co-operative Societies (Amendment) Act, 2011; WB Co-operative Societies (Amendment and Validation) Ordinance, 2013 – West Bengal Co-operative Societies Act (Act of 2006) was notified in Official Gazette after obtaining the assent from the President of India – Section 6 of the Act, 2006 provides that any action done in the Repeal Act (Act of 1983) shall be deemed to have been done under New Act – Act 2006 was amended on 2011 and Gazette Notification was made thereafter – whereby tenure of the Board of Director of Co-operative Society was fixed for 36 months – amendment of Constitution was made on 15.02.2012 whereby the tenure of the Board of Co-operative Societies shall be five years from the date of the election – writ petition was filed challenging the vires of the Amendment Section 12(a)(ii) of Act, 2011 – meanwhile WB Co-operative Societies (Amendment and Validation) Ordinance, 2013 was promulgated – Ordinance was also challenged – the object and purpose of legislature-exercise cannot be judged from the objectives and reasons in the Bill – the basic remedy is to cure or remove the mischief of law – extending the tenure of the Board de-hors the constitutional amendment defeats the purpose of the legislature.

Ratio decidendi:-
The object and purpose of legislature-exercise cannot be judged from the objectives and reasons in the Bill. The basic remedy is to cure or remove the mischief of law. By way of extending the tenure of the Board de-hors the constitutional amendment defeats the purpose of the legislature.

Observations of the Court:-
The Validating Act of 2013 amends the legislative fiction contained in Section 6 of the Act of 2006 whereby elections to the Boards of Co-operative Societies under the repealed Act of 1983 was deemed to have been held under the Act of 2006 as if the provisions of the new Act were in force at all material points of time. This deeming clause was sought to be amended by the Validating Act of 2013 and was subjected to exceptions specifically provided otherwise in the Act. Consequent thereto, Section Sections 29(5) read with Section 32(5) and Section 36 of the Act of 2006 were also amended whereby it was, inter-alia, provided that the tenure of office of the Board of Directors of a Co-operative Society which had been elected prior to the commencement of the Act of 2006 shall be for a period of three years from the date of the said elections.(para 21)
The object and purpose of a legislative exercise simply cannot be judged by referring to the statement of Objects and Reasons in the Bill introduced to the State Legislature. It has to be appreciated primarily from the clear meaning of the provisions of the legislation itself and the mischief it seeks to cure or remove. Only in cases of confusion or ambiguity, the statement of Objects and Reasons to such legislation may be referred to.(para 31)
The power of the legislature to amend, delete or obliterate a statute or to enact a statute prospectively or retrospectively cannot be questioned and challenged unless the court is of the view that such exercise is in violation of Article 14 of the Constitution. Whenever any Act or amendment is brought in force retrospectively or any provision of the Act is deleted retrospectively, in this process rights of some are bound to be affected one way or the other. In every case, it cannot be urged that the exercise by the legislature while introducing a new provision or deleting an existing provision with retrospective effect per se shall be violative of Article 14.(para 43)
In the Hassan Co-operative Milk Producers Societies Union Limited and others Vs. State of Karnataka and others (W.A. 734 of 2014) on 30.04.2014 a special bench of Karnataka High Court held that amending Act of 2013 prescribing tenure of a Board of the committees shall be for five years from the date of their election instead of five co-operative years with retrospective operation as valid, inter-alia, on the ground that the amending Act of 2013 gives effect to part IXB of the Constitution. As already opined by us, extending the tenure of a Board elected under the earlier procedure, that is repealed Act of 1983 which is not in consonance with Article 243ZK(2) of the Constitution of India would virtually defeat the purpose of the said constitutional amendment, therefore, we are of the view that the ratio of the said decision is of no assistance so far as the facts of the present case.(para 64)

Held:-
Appeal is allowed setting aside the impugned judgment. We direct the Co-operative Election Commission to hold elections to all the Co-operatives forthwith since the term of all the Boards has come to an end parties to bear their own costs. The appeals F.M.A. No. 2351 of 2014 and F.M.A. No. 3681 of 2014 are disposed of in terms of above reasoning. Other applications does not survive for consideration, accordingly are dismissed.

B.“Validating statute”, “Curative statute” and “Declaratory statute
A validating or Curative statute is promulgated to cure a legislative defect and is ordinarily retrospective in nature. In Ninth edition of Black’s Law Dictionary, “Validating statute”, “Curative statute” and “Declaratory statute” are defined as follows:-
Validating Statute, (182) A law that is amended either to remove errors or to add provisions to confirm to constitutional requirements. (page- 1545).
Curative Statute.-(1)An Act that corrects an error in a statute’s original enactment, usually, an error that interferes with interpreting or applying the statute. Cf. validating statute. (cases: Statutes 236,278.11)(page 1543).
Declaratory Statute. (17C) A law enacted to clarify prior law by reconciling conflicting judicial decisions or by explaining the meaning of a prior statute – Also terms expository statute.(cases: statutes 236, 278.11)(page-1543).
Permanent edition volume 44 page 8 in words and phrases, Validating statute; is defined as:-
“Statute whose purpose is to cure past errors and omissions and thus make valid what was invalid. Himrich Vs. Carpenter, 569, N-W. Section 568, 1997 SD 116-statute 236.”
In P. Ramanath Aiyar’s, the Law Lexicon (Encyclopedic Law Dictionary) 1997 edition, page 452, curative statute, is defined as follows.
“Curative statutes are those which attempt to cure or correct errors and irregularities in judicial or administrative proceedings and would seek to give effect to contracts and other transactions between private persons which otherwise would fail to produce their intended consequences an account of some statutory disability or failure to comply with some technical requirement. Madras Maintenance and Public Order (Removal of Doubts and Amendment) Act 1 of 1949.”In Re:- AIR 1950 Madras 324. A Law, retrospective in effect which is designed to the remedy some legal defect in previous transactions. A form of retrospective legislation which reaches back into the past to operate up on past events, acts or transactions in order to correct errors and irregularities and to render valid and effective many attempted acts which would otherwise be ineffective for the purpose intended. As applied to conveyances they supply one or more ingredients of a legal act which the parties intended to perform but which they fail to accomplish completely or which they executed only imperfectly. (Black’s Law Dictionary)(para 22)

C. Doctrine of separation of powers
Even without express provision of the separation of powers, the doctrine of separation of powers is an entrenched principle in the Constitution of India. The doctrine of separation of powers informs the Indian constitutional structure and it is an essential constituent of rule of law. In other words, the doctrine of separation of power though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of Indian Constitution. Constitution has made demarcation, without drawing formal lines between the three organs legislature, executive and judiciary. In that sense, even in the absence of express provision for separation of powers, the separation of powers between the legislature, executive and judiciary is not different from the Constitutions of the countries which contain express provision for separation of powers.
Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India.
Separation of powers between three organs-the legislature, executive and judiciary is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separation of judicial power may amount to negation of equality under Article 14. Stated thus, a legislation can be invalidated on the basis of breach of separation of powers since such breach is negation of equality under Article 14 of the Constitution.
The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State Legislature) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution.
The doctrine of separation of powers applies to the final judgments of the courts. The legislature cannot declare any decision of a court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by a court of law or on coming to know of it aliunde. In other words, a court’s decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.
If the legislature has the power over the subject-matter and competence to make a validating law, it can at any time make such a validating law and made it retrospective. The validity of a validating law, therefore, depends upon whether the legislature possessed the competence which it claims over the subject-matter and whether in making the validation law it removes the defect which the courts had found in the existing law.
The law enacted by the legislature may apparently seem to be within its competence but yet in substance if it is shown as an attempt to interfere with the judicial process, such law may be invalidated being in breach of doctrine of separation of powers. In such situation, the legal effect of the law on a judgment or a judicial proceeding must be examined closely, having regard to legislative prescription or direction. The questions to be asked are:
(i) Does the legislative prescription or legislative direction interfere with the judicial functions?
(ii) Is the legislation targeted at the decided case or whether impugned law requires its application to a case already finally decided?
(iii) What are the terms of law; the issues with which it deals and the nature of the judgment that has attained finality?
If the answer to Questions (i) and (ii) is in the affirmative and the consideration of aspects noted in Question (iii) sufficiently establishes that the impugned law interferes with the judicial functions, the Court may declare the law unconstitutional.”(para 25)

Advocates who appeared in this Case:-
For the Appellants:-Mr. Bikash Ranjan Bhattacharyya, Mr. Dhiman Kumar Sengupta, Mr. Samim Ahmed, Mr. Joydeep Kar
For the State:-Mr. Jayanta Kumar Mitra, Mr. Abhratosh Majumdar, Mr. Subhabrata Dutta, Mr. T.M. Siddiqui
For the Respondent:-Mr. Joydeep Kar, Mr. Debasish Ghosh, Mr. Bikash Kumar Mukherjee, Mr. Nilanjan Adhikari, Mr. P.C Bhattacharyya, Mr. R.C. Gayen, Mr. Sourav Kumar Mukherjee
List of cases cited:-
Gram Panchayat Vs. Malwinder Singh, 1985 (3) SCC 661 (referred to)
Kaiser-I-Hind Vs. National Textile Corporation (Maharashtra North) Limited and others, 2002 (8) SCC 182 (referred to)
Indian Aluminum Co. & Ors. Vs. State of Kerala & Ors., (1996) 7 SCC 637 (relied on)
National Agricultural Cooperative Marketing Federation of India Vs. Union of India & Ors., (2003) 5 SCC 23 (relied on)
Joytirmoy Chakraborty and Anr. Vs. State of West Bengal and Ors., W.P. No. 3829 (W) of 2013 (discussed)
The Gun & Shell Factory Cooperative Society Limited and Another Vs. The Co-operative election Commission and Others, W.P. No. 12145 (W) of 2012 (discussed)
Anil Kumar Ghosh Vs. the State of West Bengal and others, W.P. No. 2083 (W) of 2012 (discussed)
Sunirmal Chakraborty Vs. The State of West Bengal and others, W.P. No. 19849 (W) of 2012 (discussed)
Dulal Chandra Basu and others Vs. The State of West Bengal and Others, W.P. No. 5473(W) of 2012 (discussed)
Tapan Guha Roy Vs. State of West Bengal and Others, W.P. No. 19229 (W) of 2012 (discussed)
State Bank Staff Union Vs. Union of India, (2005) 7 SCC 584 (referred to)
Madan Mohan Pathak and Anr. Vs. Union of India and Anr. (1978) 2 SCC 50 (discussed)
Cauvery Dispute Tribunal (1993) Supplementary 1 SCC (1996) (II) (discussed)
S.R. Bhagwat and Ors. Vs. State of Mysore (1995) 6 SCC 16 (discussed)
State of Tamil Nadu Vs. State of Kerala and Another, AIR 2014 SC 2407 (relied on)
Nar Bahadur Bhandari and Another Vs. State of Sikkim and Others reported in (1998) 5 SCC 39 (relied on)
Aneeta Hada Vs. M/s. Godfather Travels and Tours Private Limited reported in (2012) SC 2795 (relied on)
National Agricultural Cooperative Marketing Federation of India Vs. Union of India, (2003) 5 SCC 23(discussed)
State Bank’s Staff Union Vs. Union of India, (2005) 7 SCC 584(referred to)
Commissioner of Income Tax (Central)-1, New Delhi Vs. Vatika Township Private Limited, (2015) SCC 1 (referred to)
S.S. Bola and Others Vs. B.D. Sardana and Others, 1997 8 SCC 522 (referred to)
State of Gujarat and Another Vs. Raman Lal Keshav Lal Soni and Others, (1983) 2 SCC 33 (relied on)
State of Tamilnadu Vs. Arooran Sugars Limited, 1997 (1) SCC 326 (relied on)
Andhra Pradesh Dairy Development corporation Federation Vs. B. Narashima Reddy and others, (2011) 9 SCC 286 (relied on)
State of Tamil Nadu Vs. K. Shyam Sunder, (2011) 8 SCC 737
E.P. Royappa Vs. State of T.N. (1974) 4 SCC 3 (relied on)
Maneka Gandhi Vs. Union of India (1978) 1 SCC 248 (discussed)
K.C.Gajapati Narayan Deo Vs. State of Orissa AIR 1953 SC 375 (discussed)
STO Vs. Ajit Mills Ltd., (1977) 4 SCC 98 (discussed)
K. Nagaraj Vs. State of A.P., (1985) 1 SCC 523
Welfare Assn., A.R.P. Vs. Ranjit P. Gohil, (2003) 9 SCC 358 (relied on)
State of Kerala Vs. Peoples Union for civil Liberties, (2009) 8 SCC 46 (relied on)
State of Himachal Pradesh Vs. Narain Singh, 2009 13 SCC 165 (relied on)
Clark and Others Vs. Chat Burn and others, 1985 (1) All ER 211 (relied on)
Man Gru Mahato and others Vs. Takur Taraknathji Tarekeshwar and others, AIR 1967 SCC 1390 (relied on)
Ranjit Singh Vs. Commissioner of Income Tax, U.P. and others, AIR 1962 SC 93 (referred to)
Hassan Co-operative Milk Producers Societies Union Limited and others Vs. State of Karnataka and others, W.A. 734 of 2014, on 30.04.2014 Karnataka High Court (discussed)
D. Cawasji and Co. Mysore Vs. State of Mysore and another reported in 1984 (supplementary) SCC 490 (discussed)

The Judgement of the Court was delivered by Dr. Manjula Chellur, Chief Justice:-

1. MAT 1520 of 2013 is initiated at the instance of the State and the other two FMAs are at the instance of private parties. The facts relating to the above three appeals have history of long legal battle, therefore, it is just and proper to narrate the background in which the present appeals arise for consideration. The West Bengal Co-operative Societies Bill, 2006 was passed by West Bengal Legislative Assembly on 10.3.2006.

2. State of West Bengal sent a report for the purpose of obtaining assent of the President of India under Article 200 read with Article 254(2) of the Constitution in respect of the aforesaid Bill. On 12.4.2006, Report, inter-alia provided, the State perceived new law may be inconsistent to certain central legislations which were enumerated therein. On 12.8.2009 President of India returned the Bill with a note that the same may be amended so as to exclude the co-operatives covered under the Employee’s Provident Fund and Miscellaneous Provisions Act of 1952.

3. On 15.1.2010 the Bill was accordingly amended and again sent for assent of the President of India. On 13.5.2010, the Bill received the assent of the President of India. On 25.5.2010 the West Bengal Co-operative Societies Act of 2006 (hereinafter referred to as the Act of 2006) was notified in the Official Gazette after having received the assent of the President. The Act of 2006, however, was not notified to come into effect at once. The Act of 2006 repealed the West Bengal Co-operative Societies Act of 1983. Section 6 of the new act provided that any action done under the repealed act, namely, West Bengal Co-operative Societies Act, 1983 shall be deemed to have been done under the new act as if the provisions of the new act were in force at all material times. Sections 29(5) read with Section 32(5) and Section 36 of the new act provided that the term of the Board of Directors of the Cooperative Societies shall be for a period of 60 months from the date of election.

4. On 18.1.2011 the West Bengal Co-operative Societies Act, 2006 was brought into force by notification in Official Gazette. On 30.1.2001 State legislature passed the West Bengal Co-operative Societies (Amendment) Act of 2011 (hereinafter referred to as the amending Act of 2011) which received the assent of the Governor. By the amending Act of 2011, Section 36 of the Act of 2006 was amended and the tenure of the Board of Directors of Co-operative Societies who had been elected prior to coming into force in the Act of 2006 was fixed at 36 months. It is relevant to note that the tenure of the said Co-operative Societies were for a period of 36 months under Section 27(8) of the repealed Act. With effect from 6.2.2012 amending Act of 2011 came into force.

5. On 15.2.2012 Constitution 97th Amendment Act, 2011 was assent by the President and the Constitution stood amended by incorporation of Part IX B therein. Article 243 ZJ (2), inter-alia, provided that the tenure of the Board of a Co-operative Society shall be for 5 years from the date of its election. On 27.2.2012, petitioners filed writ petition challenging the vires of the Amending Act of 2011, particularly, Section 12 (a)(ii) thereof amending Section 36 of the Act of 2006, as afore stated. On 17.10.2012 a learned Single Judge of this Court declared Section 12(a)(ii) of the Amending Act of 2011 ultra-vires on the ground:
(i) that the aforesaid amending provision was ultra-vires Section 6 of the Act of 2006 which inter-alia, provided that acts done under the repealed Act will be deemed to have been done under the Act of 2006 as if the provisions of the said Act were in force at all material points of time;
(ii) that the impugned amending provision was violative of Article 14 of the Constitution as it created an arbitrary and discriminatory classification between Co-operative Societies elected under the Act of 2006 and those elected under the repealed Act of 1983 in view of the aforesaid legal fiction under Section 6 of the Act of 2006.

6. On 3.4.2012 the State Government preferred an appeal being AST No.339 of 2012 challenging the aforesaid judgment and order of the learned Single Judge dated 17.10.2012. Said appeal came to be withdrawn on 17.1.2013.
On 4.2.2013 the West Bengal Co-operative Societies (Amendment and Validation) Ordinance 2013 was promulgated. In the report submitted to the Governor for promulgation of the said ordinance, a reference was made to the defect in legislative draftsman-ship of the amending Act of 2011 as pointed out in the aforesaid judgment and order dated 17.10.2012. Reference was also made to the anomalous situation created in various cooperative societies due to disputes cropping up between new Boards elected after expiry of three years pursuant to various orders passed by this Court in different writ petitions and the previous Boards who claimed to have been revived upon the declaration of the amending Act of 2011 as ultra-vires.

7. On 6.2.2013 W.P. No. 3829 of 2013 was filed challenging the aforesaid ordinance. On 26.4.2013 during the midst of hearing of the aforesaid writ petition West Bengal Co-operative Societies (Amendment and Validation) Act 2013 (hereinafter referred to as the Validation Act of 2013) was passed by the State legislative and published in the Official Gazette. It came into force from 4.2.2013, i.e. the date of promulgation of the ordinance. On 26.4.2013 it was assailed in the present writ petition. On 13.9.2013 a learned Judge of this Court declared the Validating Act of 2013, ultra-vires as it sought to nullify the earlier judgment and order dated 17.10.2012 passed by this Court, as stated above. On 20.9.2013 an appeal came to be preferred by the State Government assailing the judgment and order dated 13.9.2013. On 24.11.2014 the tenure of the Boards of the Co-operative Societies came to an end even under the un-amended provisions of 2006. With the above factual situation the present appeals arise for our consideration.

8. We are referring to the facts and parties as referred in MAT 1520/13 only since the decision in this appeal would bind the decision in other appeals. Learned Advocate General Sri Jayanta Kumar Mitra arguing for the State submits that the Validating Act was promulgated only with a view to cure the legislative deficits pointed out by the learned Single Judge in judgment and order dated 17.10.2012 passed in W.P. No. 4009(w) of 2012. To substantiate this, he places reliance on the report filed by the State at the time of promulgation of the ordinance 2013 as reflected in the affidavit filed on behalf of the State in the writ proceedings being W.P. No. 3829 of 2013 challenging the promulgation of the said ordinance.

9. Purpose of promulgating the Validating Act according to him was not to nullify the effect of the earlier judgment but was to correct a legislative error pointed out in the judgment. Mere absence of reference to the earlier judgment in the statement of objects and reasons to the Bill of 2006 cannot override the clear intendment of the provisions of the validating Act of 2013 is the stand of the State. He further submitted that the validating Act sought to rectify the anomaly created by the legal fiction under Section 6 of the Act of 2006 by treating the Boards elected under the repealed Act of 1983 and the Boards elected under the Act of 2006 as a homogenous group although the elections were conducted under the two statutes were substantially different, one being conducted under the auspices of the State Government while the other is conducted under the Superintendence of an independent Election Commission. Hence, according to him the validating act did not suffer from any legislative arbitrariness or was in violation of constitutional mandate as laid down in part IXB of the constitution, particularly, Article 243 ZJ(2) thereof. According to his stand, Article 243 ZJ (2) relates to the tenure of a Board elected in terms of the constitutional scheme as envisaged in part IXB of the constitution after its promulgation and it does not refer to an earlier Board elected under the repealed Act of 1983. He concludes his argument by submitting that the validating Act did not require presidential assent in view of the fact that the presidential assent sought and was granted to the parent act, namely Act of 2006 and the same was not in general terms but in respect of specified central legislations only. Admittedly Validating Act does not impinge on any provisions of the said central legislations.

10. Per contra, Mr. Bikash Ranjan Bhattacharyya, learned Senior Counsel appearing for the respondent/writ petitioners contend that the State in order to nullify the effect of the judgment and order, the State only with that purpose hastily promulgated the ordinance 2013 which was challenged in W.P. No. 3829 of 2013. According to him there was no other reason or purpose for enacting the Validating Act and its pre-cursor ordinance 2013. The State having withdrawn the appeal against the aforesaid judgment and order dated 17.12.2012 in W.P. No. 4009(w) of 2012, the same had become final and binding between the parties. Therefore, the enactment of Validating Act to revert the tenure of the Boards elected under the repealed Act of 1983 to three years, in fact amounted to taking away a right conferred in the said Boards to continue for five years by virtue of aforesaid judgment and order.

11. The impugned legislation hence according to him also suffered from legislative arbitrariness in as much as it sought to create two distinct classes, namely, Boards elected under the repealed Act on one hand, and the Boards elected under the Act of 2006. On the other hand, such classification having been held arbitrary and without rational basis by judgment dated 17.10.2012 and accordingly creation of such distinction by impugned legislative exercise was nothing but a product of legislative arbitrariness. He further argues that the Validating Act was enacted after incorporation of part IXB of the Constitution, particularly, Article 243 ZJ (2) which specifically provided that the tenure of an elected Board of a Co-operative Society shall be for five years. Hence, according to him the impugned legislation apart from being violative of Article 14 is also in breach of the provisions of part IXB, particularly, Article 243 ZJ (2) thereof.

12. He also argued that the Validating Act also suffers from procedural ultra-vires as no presidential assent for its enactment was obtained though such assent had been given by the President of India to the parent Act. He finally concludes his arguments submitting that although the tenure of five years as prescribed by the un-amended Act of 2006 is already over, the respondent Boards have to be permitted to operate for an additional period of the remainder tenure for which it had been wrongfully prevented to work by the State during the pendency of the present appeal. With these arguments at our command we proceed to see the reasoning in the impugned judgment which is assailed before us. Learned Single Judge declared the Validating Act 2013 as ultra-vires, inter-alia, the ground that it was sought to nullify the effect of the judgment rendered by this Court on 17.10.2012 in W.P. No. 4009(w) of 2012 and thereby took away a right accrued in favour of Co-operative Societies by artificially reverting to an anterior situation which had been declared invalid by the Court.

13. Learned Judge refused the contentions of the State that the validating Act was a piece of curative legislation to rectify the legislative deficits indicated in the earlier judgment by holding that if such clarification or removal of confusion and defects in drafting were the foundation of the Validating Act, at least this Court’s judgment in W.P. No. 4009(w) of 2012 ought to have been referred to in the statement of Objects and Reasons or at least in the recital of the Bill but such was not the factual situation. Learned Single Judge also held that the aforesaid piece of legislation was ultra-vires Article 243 ZJ (2) and Article 14 of the Constitution of India.

14. Article 243 ZJ (2) was incorporated by the 97th constitutional amendment on 15th February 2012, and inter-alia provided that the term of office of elected members of the Board and its office bearers shall be for a term of five years from the date of election and the term of office bearer shall be co-terminus with the term of the Board. The Validating Act by reverting the term of office of members of elected Board under the repealed Act of 1983 from five years to three years, according to the learned Judge, violated the letter and spirit of the aforesaid Constitutional Amendment and was, therefore, ultra-vires. Learned Single Judge, however, clarified that the Co-operative Societies who have willingly proceeded for election to constitute the respective Boards in the mean time prior to the expiration of the five years term shall not be affected by the said judgment.

15. In order to understand the import of the Validating Act it is necessary the relevant amendments brought to the Act of 2006 are understood. The Validating Act of 2013 introduces several amendments to Sections 6(2), 29(5), 32(5)(a) and 36(a) of the Act of 2006. The amendments to the aforesaid provisions by the Validating Act are set out in bold herein below:
Sub section (2) of section 6 of the Principal Act, read as follows:
“(2) Notwithstanding such repeal anything done or suffered or any action taken including any rule made, and transaction entered into, any notification or notice issued with prospective or retrospective effect, any order passed, any appointment or registration made, any suit or proceeding commenced, any dispute decided or referred to arbitration, any right or title accrued, or any liability or obligation or penalty incurred under the Co-operative Societies Act, 1912 (2 of 1912) or the Bengal Co-operative Societies Act, 1940 (Ben. Act XXVI of 1940) or the West Bengal Co-operative Societies Act, 1973 (West Bengal Act XXXVIII of 1973) or the West Bengal Co-operative Societies Act, 1983 (West Ben. Act XLV of 1983) shall be deemed to have been done or suffered or taken under this Act, as if the provisions of this Act were in force at all material times when such thing was done or suffered or such action was taken, unless otherwise specifically provided in this Act:
Provided that such thing done or suffered or action taken shall not be deemed to have conferred any right which had not vested or accrued before the date of commencement of this Act or have extended any right which had vested or accrued before the date of commencement of this Act, to the Board of a Co-operative Society registered or deemed to have been registered under the Cooperative Societies Act, 1912, or the Bengal Co-operative Societies Act, 1940, or the West Bengal Co-operative Societies Act, 1973, or the West Bengal Co-operative Societies Act, 1983, with the effect of such repeal.”

16. Clause (a) of sub-section (5) of section 29 of the Principal Act, upon its amendment, reads as follows:
“The agenda of the annual general meeting shall be as follows:
Election of directors of the Board, if any:
Provided that such election shall be held-
(a) in case the election of directors of the Board held before the date of commencement of this Act, within three years from the date of such election;
(b) in any other case, within five years from the date of last election.
Provided further that after constitution of the Co-operative Election Commission, such election shall be held in an annual general meeting or a special general meeting under the provision of sections 29 and 31.”
Clause (a) of sub-section (5) of section 32 of the Principal Act, upon its amendment, reads as follows:
“32(5)(a) A director elected or nominated under sub-section (1) except the chief executive shall hold office throughout a term of five years of the Board or till the Board is dissolved under sections 34 or 35 or 36 whichever is earlier:
Provided that a director under clauses (d) and (e) of sub-section (1) shall not be eligible for re-election or nomination, as the case may be, within a period of five years from the date of expiry of his term of office:
Provided further that a director under clause (c) of sub-section (1) shall be entitled to attend any meeting of the Board, if he is suspended or punished in a departmental proceeding or a departmental proceeding against him is pending.
Provided also that a director elected or nominated in any Board prior to the date of commencement of this Act, shall hold office throughout a term of three years of the Board or till the Board is dissolved under sections 34 or 35 of 36, whichever is earlier.”
Clause (a) of Section 36 of the Principal Act, upon its present amendment, reads as follows:
“the Board of directors of any of the Co-operative societies shall, if the election of its directors has been held with a period of 60 months from the date of their election under sub-section (1) of section 29, or within a period of thirty six months from the date of their election where such election has been held before the date of commencement of this Act stand dissolved on and from the date immediately following the date of expiry of the said period.”
From the arguments across the bar, the following gist of the challenge to the Validating Act be summarized as under:
(i) Act of 2006 received assent by the President of India prior to its promulgation. Therefore, the Validating Act of 2013 which sought to amend the Act of 2006 also required presidential assent. Absence of presidential assent renders the aforesaid legislation ultra-vires the Constitution.
(ii) The Validating Act of 2013 seeks to nullify the effect of the earlier judgment asked by this Court in W.P. No. 4009 of 2012 and takes away a right accrued to the Co-operative Societies elected under the repealed Act in terms of the legal fiction under Section 6 of the Act of 2006. Validating or curative legislation may cure or change the substratum of law but cannot nullify the effect of an earlier judgment conferring rights in favour of an individual. Moreover, a Validating Act is a product of legislative arbitrariness and is violative of Article 14 of the Constitution as it seeks to differentiate between Boards elected under the repealed Act of 1983 and the new Board under the Act of 2006 without any rational basis whatsoever.
(iii) The Validating Act is violative of Part IXB of the Constitution of India particularly Article 243 ZJ (2) thereof, in as much as it revert the tenure of the Boards of the Co-operatives elected under the repealed Act of 1983 from five years to three years.

17. We proceed to analyse the material before us with reference to each of the aforesaid challenges as follows:
Point No. 1:
It is true that the Act of 2006 had been reserved for presidential assent under Article 200 read with Article 254(2) of the Constitution of India. Prayer for grant of such assent was made on the perceived inconsistency of the Bill with provisions of specified Central legislations which were enumerated in the report submitted on the said Bill by the law department of the State which reads as under:
Report on the West Bengal Co-operative Societies Bill, 2006:
The subject matter of the West Bengal Co-operative Societies Bill, 2006 is included within entries 32, 64 and 66 of the State List and within entries 1, 2, 6, 7, 9, 10, 13 and 46 of the Concurrent List in the Seventh Schedule to the Constitution of India and is within the competence of the State Legislature. The West Bengal Co-operative Societies Bill, 2006 was passed by the West Bengal Legislative Assembly and was reserved by the Governor for the consideration of President under article 200, read with clause (2) of article 254 of the Constitution of India since certain provisions of the Bill were repugnant to the provisions of the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the Land Improvement Loans Act, 1883, the Agriculturists’ Loans Act, 1884, the Code of Civil Procedure, 1908, the Registration Act, 1908, the Presidency Towne Insolvency Act, 1909 and the Provisional Insolvency Act, 1920, which are existing laws and the Employees Provident Funds and Miscellaneous Provisions Act, 1952, the
Companies Act, 1956, the Limitation Act, 1963 and the Code of Criminal Procedure, 1973 which are earlier laws made by Parliament with respect to certain matters enumerated in the Concurrent List and which attracted clause (2) of article 254 of the Constitution of India.

18. The President was pleased to return to the State legislature for reconsideration and amendment of the Bill with the following note:
I, Pratibha Devisingh Patil, President of India, having considered the West Bengal Cooperative Societies Bill, 2006, which was reserved for my consideration under the provisions of article 200 of the Constitution, do hereby direct, in pursuance of the proviso to article 201 of the Constitution, that the Bill be returned to the Legislature of the State of West Bengal to re-consider it and to amend the Bill, as follows:
“the provisions under clause 83 of the West Bengal Cooperative Societies Bill, 2006 may be modified to restrict it to the cooperative societies which are not coverable under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952) (the said Act) to avoid conflict between the said Act and the West Bengal Cooperative Societies Bill, 2006.”

19. Thereafter the Bill was accordingly amended so as to restrict applicability to Co-operative Societies which are not covered under the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952 and such amended Bill received the assent of the President and was duly enacted as the Act of 2006. The aforesaid legislative exercise relating to presidential assent to the parent Act, namely, Act of 2006 indicates that the State legislature had not sought assent to the aforesaid Act in general terms but it was only in respect of perceived inconsistencies vis-à-vis specified central legislations alone and such assent was accordingly granted after amendment of the relevant clause of the proposed Bill which was inconsistent with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act of 1952. It is trite law that a presidential assent may be sought for and granted either in general terms or may be specific to certain Central legislations only which are referred to in the report and considered by the President at the time of grant. It is relevant to refer to (i) Gram Panchayat Vs. Malwinder Singh reported in 1985 (3) SCC 661 wherein it was held:
“The assent of the President under Article 254 (2) of the Constitution is not a matter of idle formality. The President has, at least, to be appraised of the reason why his assent is sought if, there is any special reason for doing so. If the assent is sought and given in general terms so as to be effective for all purposes, different considerations may legitimately arise. But if, as in the instant case, the assent of the President is sought to the Law for a specific purpose, the efficacy of the assent would be limited to that purpose and cannot be extended beyond it.” Similar view was expressed in Kaiser-I-Hind Vs. National Textile Corporation (Maharashtra North) Limited and others reported in 2002 (8) SCC 182 (referred to para 74).

20. When presidential assent under Article 200 read with Article 254 (2) of the Constitution was granted to a State legislature in respect of perceived inconsistencies with the provisions of specified Central Legislations, subsequent amendments to the parent legislation so assented by the President does not require further assent until and unless the amendments proposed to the parent legislation relate to any perceived inconsistencies with the said Central Legislations for which the assent had been sought for and was granted.
21. In the present case, the Validating Act of 2013 amends the legislative fiction contained in Section 6 of the Act of 2006 whereby elections to the Boards of Co-operative Societies under the repealed Act of 1983 was deemed to have been held under the Act of 2006 as if the provisions of the new Act were in force at all material points of time. This deeming clause was sought to be amended by the Validating Act of 2013 and was subjected to exceptions specifically provided otherwise in the Act. Consequent thereto, Section Sections 29(5) read with Section 32(5) and Section 36 of the Act of 2006 were also amended whereby it was, inter-alia, provided that the tenure of office of the Board of Directors of a Co-operative Society which had been elected prior to the commencement of the Act of 2006 shall be for a period of three years from the date of the said elections. Perusal of aforesaid amendments makes it crystal clear that its scope and ambit does not impinge upon the provisions of the special Central Legislations for which assent had been granted by the President of India to the parent Act.

22. Hence, we are of the opinion that no further assent was required for promulgation of the Validating Act, 2013 amending the Act of 2006.
Point No. 2:-
A validating or Curative statute is promulgated to cure a legislative defect and is ordinarily retrospective in nature. In Ninth edition of Black’s Law Dictionary, “Validating statute”, “Curative statute” and “Declaratory statute” are defined as follows:-
Validating Statute, (182) A law that is amended either to remove errors or to add provisions to confirm to constitutional requirements. (page- 1545).
Curative Statute.-(1.)An Act that corrects an error in a statute’s original enactment, usually, an error that interferes with interpreting or applying the statute. Cf. validating statute. (cases: Statutes 236,278.11)(page 1543).
Declaratory Statute.(17C) A law enacted to clarify prior law by reconciling conflicting judicial decisions or by explaining the meaning of a prior statute – Also terms expository statute.(cases: statutes 236, 278.11)(page-1543).
Permanent edition volume 44 page 8 in words and phrases, Validating statute; is defined as:-
“Statute whose purpose is to cure past errors and omissions and thus make valid what was invalid. Himrich Vs. Carpenter, 569, N-W. Section 568, 1997 SD 116-statute 236.”
In P. Ramanath Aiyar’s, the Law Lexicon (Encyclopedic Law Dictionary) 1997 edition, page 452, curative statute, is defined as follows.
“Curative statutes are those which attempt to cure or correct errors and irregularities in judicial or administrative proceedings and would seek to give effect to contracts and other transactions between private persons which otherwise would fail to produce their intended consequences an account of some statutory disability or failure to comply with some technical requirement. Madras Maintenance and Public Order (Removal of Doubts and Amendment) Act 1 of 1949.”
In Re:- AIR 1950 Madras 324.
A Law, retrospective in effect which is designed to the remedy some legal defect in previous transactions. A form of retrospective legislation which reaches back into the past to operate up on past events, acts or transactions in order to correct errors and irregularities and to render valid and effective many attempted acts which would otherwise be ineffective for the purpose intended. As applied to conveyances they supply one or more ingredients of a legal act which the parties intended to perform but which they fail to accomplish completely or which they executed only imperfectly. (Black’s Law Dictionary)

23. However, a validating/ curative statute cannot nullify the effect of a judgment which has become final and binding between the parties. In Indian Aluminum Co. & Ors. Vs. State of Kerala & Ors. reported in (1996) 7 SCC 637, the relevant portion reads as under:-
56.“From a resume of the above decisions the following principles would emerge:
(1) The adjudication of the rights of the parties is the essential judicial function. Legislature has to lay down the norms of conduct or rules which will govern the parties and the transactions and require the court to give effect to them;
(2) The Constitution delineated delicate balance in the exercise of the sovereign power by the legislature, executive and judiciary;
(3) In a democracy governed by rule of law, the legislature exercises the power under Articles 245 and 246 and other companion articles read with the entries in the respective lists in the Seventh Schedule to make the law which includes power to amend the law. Error! Bookmark not defined.
(4) Courts in their concern and endeavour to preserve judicial power equally must be guarded to maintain the delicate balance devised by the Constitution between the three sovereign functionaries. In order that rule of law permeates to fulfil constitutional objectives of establishing an egalitarian social order, the respective sovereign functionaries need free play in their joints so that the march of social progress and order remains unimpeded. The smooth balance built with delicacy must always be maintained;
(5) In its anxiety to safeguard judicial power, it is unnecessary to be overzealous and conjure up incursion into the judicial preserve invalidating the valid law competently made;
(6) The court, therefore, needs to carefully scan the law to find out:
(a)whether the vice pointed out by the court and invalidity suffered by previous law is cured complying with the legal and constitutional requirements;
(b)whether the legislature has competence to validate the law;
(c) whether such validation is consistent with the rights guaranteed in Part III of the Constitution.
(7) The court does not have the power to validate an invalid law or to legalize impost of tax illegally made and collected or to remove the norm of invalidation or provide a remedy. These are not judicial functions but the exclusive province of the legislature. Therefore, they are not encroachment on judicial power.
(8) In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. The changed or altered conditions are such that the previous decision would not have been rendered by the court, if those conditions had existed at the time of declaring the law as invalid. It is also empowered to give effect to retrospective legislation with a deeming date or with effect from a particular date. The legislature can change the character of the tax or duty from impermissible to permissible tax but the tax or levy should answer such character and the legislature is competent to recover the invalid tax validating such a tax on removing the invalid base for recovery from the subject or render the recovery from the State ineffectual. It is competent for the legislature to enact the law with retrospective effect and authorize its agencies to levy and collect the tax on that basis, make the imposition of levy collected and recovery of the tax made valid, notwithstanding the declaration by the court or the direction given for recovery thereof.
(9) The consistent thread that runs through all the decisions of this Court is that the legislature cannot directly overrule the decision or make a direction as not binding on it but has power to make the decision ineffective by removing the base on which the decision was rendered, consistent with the law of the Constitution and the legislature must have competence to do the same.”

24. In National Agricultural Cooperative Marketing Federation of India Vs. Union of India & Ors. reported in (2003) 5 SCC 23, Hon’ble Apex Court interpreted what amounts to “overruling” a judicial decision;
“……….. overruling assumes that a contrary decision is given on the same facts of law. Where the law, as in this case, has been changed and is no longer the same, there is no question of the legislature overruling this Court.”
“Once the circumstances are altered by legislation, it may neutralize the effect of the earlier decision of the Court which becomes ineffective after the change of law.”

25. In State of Tamil Nadu Vs. State of Kerala reported in AIR (2014) 12 SCC 696, a Constitution Bench of the Apex Court highlighted the principle of separation of power in the context of Indian Constitution laying down the parameters of legislative exercise in the face of a binding judgment inter parties
126. “On deep reflection of the above discussion, in our opinion, the constitutional principles in the context of Indian Constitution relegating to separation of powers between the legislature, executive and judiciary may, in brief, be summarized thus:
126.1. Even without express provision of the separation of powers, the doctrine of separation of powers is an entrenched principle in the Constitution of India. The doctrine of separation of powers informs the Indian constitutional structure and it is an essential constituent of rule of law. In other words, the doctrine of separation of power though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of Indian Constitution. Constitution has made demarcation, without drawing formal lines between the three organs legislature, executive and judiciary. In that sense, even in the absence of express provision for separation of powers, the separation of powers between the legislature, executive and judiciary is not different from the Constitutions of the countries which contain express provision for separation of powers.
126.2. Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India.
126.3 Separation of powers between three organs-the legislature, executive and judiciary is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separation of judicial power may amount to negation of equality under Article 14. Stated thus, legislation can be invalidated on the basis of breach of separation of powers since such breach is negation of equality under Article 14 of the Constitution.
126.4 The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State Legislature) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution.
126.5. The doctrine of separation of powers applies to the final judgments of the courts. The legislature cannot declare any decision of a court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by a court of law or on coming to know of it aliunde. In other words, a court’s decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.
126.6. If the legislature has the power over the subject-matter and competence to make a validating law, it can at any time make such a validating law and made it retrospective. The validity of a validating law, therefore, depends upon whether the legislature possessed the competence which it claims over the subject-matter and whether in making the validation law it removes the defect which the courts had found in the existing law.
126.7. The law enacted by the legislature may apparently seem to be within its competence but yet in substance if it is shown as an attempt to interfere with the judicial process, such law may be invalidated being in breach of doctrine of separation of powers. In such situation, the legal effect of the law on a judgment or a judicial proceeding must be examined closely, having regard to legislative prescription or direction. The questions to be asked are:
(i) Does the legislative prescription or legislative direction interfere with the judicial functions?
(ii) Is the legislation targeted at the decided case or whether impugned law requires its application to a case already finally decided?
(iii) What are the terms of law; the issues with which it deals and the nature of the judgment that has attained finality?
If the answer to Questions (i) and (ii) is in the affirmative and the consideration of aspects noted in Question (iii) sufficiently establishes that the impugned law interferes with the judicial functions, the Court may declare the law unconstitutional.”
However, at paragraph 157 of the said decision the Bench held as under:-
“The question whether or not the legislature has usurped the judicial power or enacted a law in breach of separation of powers principle would depend on facts of each case after considering the real effect or law on a judgment or a judicial proceeding.”

26. In the light of such enunciation of law, one has to examine whether the Validating Act of 2013 seeks to nullify the judgment dated 17th October, 2012 delivered by this Court in W.P. No. 4009(w) of 2012 or not. In W.P. No. 4009(w) of 2012 vires of Amending Act of 2011 fell for consideration. The learned Single Judge after a detailed discussion of the facts and the law applicable thereto declared Section 12(a)(ii) of the Amending Act 2011 which amended Section 36(a) of the Act of 2006 and prescribed that the tenure of office of Board of Directors of Co-operative Societies elected under the Repealed Act, 1983 shall be for three years from the date of its election to be ultra vires.

27. In the aforesaid judgment, this Court declared that the said Amendment was ultra vires Section 6 of 2006 which created a legal fiction that anything done under the repealed Act, 1983 was deemed to have been done under the provisions of the Act of 2006 as if those provisions were in force at all material points of time. Hence, by operation of such legal fiction, election under Section 27(8) of the repealed Act 1983 electing Directors to the Board of a Co-operative Society was deemed to be done under the new Act of 2006 and the tenure of office of such Board was accordingly deemed to be for five years from the date of its election by operation of Section 36(a) read with Section 6 of the new Act. As Section 6 of the Act of 2006 was prefaced with a non-obstante clause, learned Single Judge held that the said legal fiction overruled the other provisions of the Act of 2006 and, therefore, the legislative exercise to amend Section 36(a) of the Act of 2006 simpliciter without amending the legal fiction incorporated in Section 6 thereof was a product of defective legislative draftsman-ship and Section 12(a)(ii) of the Amending Act of 2011 was declared ultra vires Section 6 of the Act of 2006.

28. Learned Single Judge proceeded to hold that the provisions of the Amending Act of 2006 was also violative of Article 14 of the Constitution as it created a distinction between the Co-operatives elected under the repealed law and those elected under the new law notwithstanding the legal fiction created under Section 6 of the Act of 2006. The aforesaid judgment was initially challenged by the State of West Bengal but subsequently appeal was withdrawn and after withdrawal of the appeal, the State initially promulgated the Ordinance of 2013 which was in similar terms as the Validating Act of 2013. Constitutional validity of such ordinance was assailed in W.P. No. 3829(w) of 2013 (Joytirmoy Chakraborty and Anr. Vs. State of West Bengal and Ors.). In the said proceeding the State filed an affidavit duly sworn on 18th February, 2013 explaining the circumstances which resulted in the promulgation of the said Ordinance. It is just and proper to refer to certain paragraphs from the said affidavit clarifying circumstances leading to the promulgation of the said ordinance. The relevant portions read as under:
(xii) “In the meantime, the West Bengal State Co-operative Bank challenged the vires of the West Bengal Co-operative societies (Amendment) Act, 2011 before the Hon’ble High Court, Calcutta in W.P. No. 4009 of 2012 relying upon, inter alia, Section 6 (Repeal and Savings clause) of the West Bengal Co-operative societies Act, 2006 and the Constitution (97th Amendment) Act, 2011. On 17th October, 2012, His Lordship Hon’ble Justice Biswanath Somadder was pleased to dispose of the said Writ Petition, inter alia, with the following observation:-
“… The State, without making necessary amendment to the Repeal and Savings clause of the Principal Act, sought to bring about a retrograde change in the tenure of the Boards of directors of Co-operative societies elected under the Repealed Act of 1983, by whittling down its tenure from five years to three years, thereby rendering nugatory the conscious and deliberate change that was brought about by the State earlier, upon bringing into force the Principal Act, which was in consonance with the proposed constitutional amendment. For reasons stated above, sub-clause (ii) of clause (a) of section 12 of the Amendment Act is held to be repugnant to the provision of sub-section (2) of section 6 of the Principal Act, to the extent it seeks to reduce the tenure of the Boards of Co-operative societies to thirty six months from sixty months, as originally provided under clause (a) of section 36 of the Principal Act and is further held to be ultra vires Article 14 of the Constitution of India. Sub-clause (ii) of clause (a) of section 12 of the Amendment Act is, therefore, liable to be struck down and is accordingly struck down. Consequently, the Board of writ petitioner no. 1, which came into effect from 24th November, 2009, shall continue in office for a period of sixty months to be computed from that date, subject of course, to all other provisions of law, as applicable for its continuance…….”
(xiii) Be it mentioned here that during the pendency of the W.P. No. 4009(w) of 2012, in number of cases, his Lordship the Hon’ble Justice Biswanath Somadder was pleased to pass orders directing the special officers appointed in respective Co-operative Societies to conduct elections under the supervision of the Co-operative Election Commission, West Bengal after the expiry of the term of the Boards elected under the repealed Act of 1983. Relevant parts of some of those Judgments of His Lordship the Hon’ble Justice Biswanath Somadder are reproduced herein below:-
(a) In W.P. No. 12145(W) of 2012 (In Re.- The Gun & shell Factory Cooperative Society Limited and Another –Versus-The Co-operative election Commission and Others.):
“……… It is expected that the special officer shall make all endeavour to ensure that the election process is completed as expeditiously as possible within the statutory time frame, so that a properly constituted Board of Directors is able to take charge of Gun & Shell Co-operative society Limited……..”
(b) In W.P. No. 2083(W) of 2012 (In Re.- Anil Kumar Ghosh-Versus- the State of West Bengal and others):
“…….. the Special Officer shall proceed to prepare the voters’ list on the basis of available records with the bank and in accordance with the scheme of the statute to ensure that by a free, fair and transparent democratic process, the election for delegates and consequently, the Board of Directors, is completed within the shortest possible time, which, in any event, shall not exceed the time frame as stipulated in the notification dated 2nd March, 2012……..”
(c) In W.P. No. 19849(W) of 2012 (In Re.-Sunirmal Chakraborty –Versus – The State of West Bengal and others):
“……… this Court directs the special officer of the Government of West Bengal appointed in respect of Electro Urban Co-operative Credit Limited to ensure that the election of delegates of Electro urban Co-operative Credit Society limited are held as per the schedule published earlier………”
(d) In W.P. No. 5473(W) of 2012 (In Re.- Dulal Chandra Basu and others –Versus- The State of West Bengal and Others):
“…….. Since the object of a co-operative society is likely to be frustrated unless one ensures its autonomous functioning by a democratically elected body from amongst the general members of the society, it is expected that the special officer shall take all endeavour to ensure that the election is completed as expeditiously as possible and well within the statutory time frame, so that a properly constituted Board of directors is able to take charge of the concerned housing society……….”
(e) In W.P. No. 19229 (W) of 2012 (In Re.- Tapan Guha Roy – Versusthat State of West Bengal and Others):
“…….. to take appropriate steps on the basis of the observations made hereinabove and ensure that the election process is conducted at an early date so that a democratically elected body is able to take charges of Jalpaiguri Central Co-operative Bank Ltd. without any undue delay……”
(xiv) After pronouncement of the Judgment on 17th October, 2012 in W.P. No. 4009 (W) of 2012, the State Government at first decided to prefer appeal before the Hon’ble division Bench of the High Court, Calcutta against the said Judgment and Order. Appeal petition being A.S.T. No. 399 of 2012 was filed before the Hon’ble High Court, Calcutta on 4th December, 2012. An application being A.S.T.A. no. 226 of 2012 for stay of operation of the Judgment and Order dated 17th October, 2012 was also filed along with the said appeal.
(xv) With the pronouncement of the Judgment on 17th October, 2012, a question was referred to the State Government regarding authority of the Special Officers vis-à-vis the erstwhile Boards. The validity and authority of the newly constituted Boards also became doubtful to the respective Cooperative Societies inasmuch as the validity of the elections itself became doubtful. This gave rise to chaos on a large scale. The Special officers stopped functioning owing to the order passed by the Hon’ble high Court, Calcutta. Reportedly, in a number of Co-operative societies, severe disputes and dissensions took place between the respective previous Boards and the newly constituted Board. Election process came to a halt in around 800 cooperative societies in different stages.
(xvi) There were some societies where neither there was a Board, nor the special officer was functioning causing a total vacuum in the management of those Co-operative societies.
(xvii) As a result, lending and recovery of agricultural loans were being hampered seriously. Reportedly, depositors were not getting their money back which might result in law and order problem any moment. All development works in such Co-operative societies were also being seriously hampered. In the absence of management in office, various important issues like inclusion of new members in Co-operative societies, payment of salaries to the employees of co-operative societies was disrupted or stopped. From the aforementioned, it is quite apparent that there was anarchy and mismanagement in the co-operative Sector.
(xviii) During pendency of the appeal, during pendency of the appeal, the Government received numbers of reports from different corners regarding the stalemate situations in the co-operative sector as stated in the foregoing paragraphs. It was also necessary to validate elections already held. These compelled the Government to go back to the solemn Judgment and order dated 17th October, 2012. The ratio emerging from the valued observation of his Lordship the Hon’ble Justice Biswanath Somaddar in the said Judgment which led the Government to realise the shortcoming in the drafting of the West Bengal Co-operative Societies (amendment) Act, 2011.
(xix) In the interest of furtherance of co-operative movement in democratic manner in West Bengal as well as to put an end to the prevailing stalemate and chaotic situation as stated in the foregoing paragraphs, the Government felt it necessary to immediately validate the provisions of the West Bengal co-operative Societies (Amendment) Act, 2011 by amending the West Bengal Co-operative societies Act, 2006 in the light of the ratio of the said judgment of His Lordship the Hon’ble Justice Biswanath Somaddar as contained in the said Judgment and Order dated 17th October, 2012 and also to amend certain other provisions of the West Bengal co-operative societies Act, 2006.
(xx) In view of the aforesaid, the Government decided to remove the defect and the reason for invalidating pointed out in the Solemn Judgment and Order dated 17th October, 2012 and with this intent and objective, the State Government first decided to withdraw the appeal being A.S.T. No. 399 of 2012 and the application for stay of operation of the Judgment and order dated 17th October, 2012 being A.S.T. A. No. – 226 of 2012. The decision of the State Government to withdraw the said appeal petition was communicated to the Learned State Advocate vide letter no. 19-Co-op./H/20C-21/2012 (Pt.-II) dated 2nd January, 2013. On 17th January, 2013, the said appeal petition and the connected application were duly withdrawn. Since the West Bengal Legislative Assembly was not in session and it might take even two more months before the commencement of the next assembly session, it became necessary to introduce the amendments to be made in the West Bengal Co-operative societies Act, 2006 by way of promulgation of the West Bengal Co-operative societies (Amendment and Validation) Ordinance, 2013 to put an end to the prevailing chaos and anarchy and for fostering developmental activities in the Co-operative Sector and for facilitating loan disbursement to the indigent and farmers.”

29. Reports submitted to the Governor leading to the promulgation of the ordinance by the Governor were also produced before us by the Advocate General. Such reports endorse the averments in the affidavit filed on behalf of the State in the earlier ligation, as stated above. From reading of the above said facts it appears that at the time of delivery of judgment by this Court in W.P. No. 4009 of 2012 the State was fully conscious of the judgment and had sought to rectify the legislative deficits indicated in the judgment by promulgating the aforesaid Ordinance. It was not with an intention to erase effect of such judgment such promulgation was brought, but to resolve a confusion which arose on account of rival claims between newly constituted Boards who had been elected under the auspices of special officers appointed pursuant to orders of this Court in various writ petitions on one hand and the previous Boards on the other hand who claimed they were entitled to run respective Co-operative Societies as per the aforesaid judgment in W.P. No. 4009 of 2012. That apart, special officers appointed under the orders of this Court in various writ petitions were also confused resulting in vacuum created with regard to the management of large number of Co-operatives resulting in a severe blow to the Co-operative movement in the State Of West Bengal.

30. In the above circumstances, in due regard to the judgment of the learned Single Judge dated 17.10.2012 in W.P. No. 4009 of 2012, the State Government had chosen to promulgate the Ordinance of 2013 which happens to be the basis for the impugned Validating Act. Such Validating Act being subsequently promulgated, challenge to the Ordinance was dropped and the instant writ petition was preferred challenging the Validating Act itself. In the earlier paragraphs we have already referred to the pleadings filed by the State in the earlier proceeding challenging the aforesaid Ordinance of 2013 and we have perused the records produced before us leading to the promulgation of the Ordinance, 2013 in order to test the reasoning and observations made in the impugned judgment by the learned Single Judge that the Validating Act cannot be said to be an exercise in pursuance of the observations made by this Court in its judgment dated 17.10.2012 since there is no whisper of the said judgment and order of this Court in the statement of Objects and Reasons in the Bill introduced in the State Legislature resulting in the enactment of the Validating Act of 2013. The averments made in the pleadings filed by the State in the writ petition 3829 of 2013 and the records placed before us leading to the promulgation of the Ordinance, 2013 clearly indicate that the State was inspired to promulgate the aforesaid Ordinance and subsequently the Validating Act to cure the legislative defects pointed in the said judgment and not to override the same.

31. The object and purpose of a legislative exercise simply cannot be judged by referring to the statement of Objects and Reasons in the Bill introduced to the State Legislature. It has to be appreciated primarily from the clear meaning of the provisions of the legislation itself and the mischief it seeks to cure or remove. Only in cases of confusion or ambiguity, the statement of Objects and Reasons to such legislation may be referred to. (Reference made to State Bank Staff Union Vs. Union of India (2005) 7 SCC 584 Para 12). Judging from that angle, the clear and unequivocal provisions of the Validating Act of 2013 show, it is a legislative exercise undertaken pursuant to the judgment and order dated 17.10.2012 in W.P. No. 4009 of 2012 and not one which seek to invalidate the impact of such judgment. It is a legislative exercise coming into existence inspired by observations in the said judgment rather than to nullify its effect, as has been strenuously submitted before us.

32. In Madan Mohan Pathak and Anr. Vs. Union of India and Anr. (1978) 2 SCC 50, the Apex Court held that Life Insurance Corporation Modification of Settlement Act 1976 was ultra vires inasmuch as the Amending Act sought to declare a particular settlement for payment of bonus to class III and class IV employees of Life Insurance Corporation inoperative after the Court had issued a writ of mandamus for implementation of the same. The Bench was unanimous in its opinion that the amending Act was violative of Article 31 and Article 19(1)(f) of the Constitution of India as bonus is the property of the employees which was sought to be taken away from them without compensation. In addition thereto, a majority of the judges in the Bench held that the Amending Act was unconstitutional inasmuch as it sought to nullify rights arising from a judgment which already became final. In the words of the Bench it is stated at para 31 as under:-
“The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognizing the settlements in favour of Class III and Class IV employees of the corporation. Rights under that judgment could be said to arise independently of Article 19 of the constitution. I find myself in complete agreement with my learned brother Bhagwati that to give effect to the judgment of the Calcutta high Court is not the same thing as enforcing a right under Article 19 of the Constitution. It may be that a right under Article 19 of the constitution becomes linked up with the enforceability of the judgment. Nevertheless, the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside, Section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power.”
However, at para 27 of the said judgment the Bench observed as follows:-
“The statement of objects and reasons discloses that the purpose of the impugned Act was to undo settlements which had been arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and actually recognized by the order of the Calcutta High Court. The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognized by the courts. This Court has decided in Shrimati Indira Gandhi v. Raj Narain that even a constitutional amendment cannot authorize the assumption of a judicial power by Parliament. One of the tests paid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi-judicial procedure, which the Parliament does not, in exercise of its legislative power, follow. A decision reached by the Central Government, under Section 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi-judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure, followed here, does not require that to be done. It would in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of a high Court. Even if legislation can remove the basis of a decision it has to so it by an alternation of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of Section 18 of the Industrial Disputes Act, 1947, which had been held to be valid and enforceable by a High Court. Such selective exclusion could also offend Article 14.” (Emphasis supplied)

33. In the present case, the operation of the legislative fiction has been restricted in respect of all Boards elected under the repealed Act by altering the legal substratum applicable to the said Boards and not in respect of a selected few. Therefore, the Validating Act had altered general rights of a class instead of affecting specific individuals as in the case of Madan Mohan Pathak (supra).
In Re:- Cauvery Dispute Tribunal (1993) Supplementary 1 SCC (1996) (II), the Court held that Karnataka Cauvery Basin Irrigation Protection Ordinance, 1991 was unconstitutional which ultra vires inasmuch as it sought to override an interim order passed by the Tribunal constituted under Inter State Water Dispute Act 1956. In the present case, the Validating Act has been promulgated only to cure legislative defects disclosed in the judgment passed by this Court, therefore, the ratio of the judgment.
In Re:-Cauvery Water Dispute Tribunal cannot be said to apply to the facts of this case. Similarly, in S.R. Bhagwat and Ors. Vs. State of Mysore (1995) 6 SCC 16, Karnataka State Civil Services (Regulation of Promotion, pay and Pension) Act 1973 was declared ultra vires as it sought to nullify the judgment and order passed by a Court of Law which had become final and was binding on the parties. The case related to the creation of the State of Mysore by reorganization of the States of Hyderabad and Bombay under the State Re-Organization Act, 1956. The service of employees who were working under the earlier state were initially integrated in the service of the Central Government prior to their absorption in the cadre of New State under the provisions of Section 115(5) of the Re-Organization Act and the dispute arose between the inter se promotion of such employees and judicial orders were passed thereon. During the pendency of the contempt proceedings, the impugned legislation was promulgated wherein the legislature reserved right to review judicial orders which had been passed relating to promotion of Civil Service and payment of salaries and allowances in consequence thereto. In this backdrop, the Apex Court held that conferment of power to review and reopen a finally settled judicial position was impermissible in law and accordingly quashed the said legislation. In the present case the facts are entirely different. The State Legislature came forward to rectify an error created by a legal fiction to treat elected Boards under the Repealed Act and the new Boards as a homogeneous group (a legislative error indicated in the earlier judgment).

34. In the case of D. Cawasji and Co. Mysore Vs. State of Mysore and another reported in 1984 (supplementary) SCC 490 the Validating Act issue came up for consideration. Their Lordships opined that the Validating Act was unconstitutional as the vice of illegal collection had not been rectified in the absence of removal of the illegality due to which the earlier levy had been declared illegal. The Court in the said judgment at paragraph 17 clarified that a Validating Act may retrospectively rectify a defect or lacuna leading to the invalidation of the law. It was observed, as follows:
“A Validating Act seeks to validate the earlier Acts declared illegal and unconstitutional by Courts by removing the defect or lacuna which led to invalidation of the law. With the removal of the defect or lacuna resulting in the validation of any Act held invalid by a competent court, the Act may become valid, if the Validating Act is lawfully enacted. But the question may still arise as to what will be the fate of acts done before the Validating act curing the defect has been passed. To meet such a situation and to provide that no liability may be imposed on the state in respect of such acts done before the passing of the Validating Act making such act valid, a Validating Act is usually passed with retrospective effect. The retrospective operation relieves the state of the consequences of acts done prior to the passing of the Validating act. The retrospective operation of a Validating act properly passed curing the defects and lacuna which might have led to the invalidity of any act done may be upheld, if considered reasonable and legitimate.”

35. If we judge the same from that perspective, the impugned Validating Act in the instant case cannot be said to be illegal in as much as it seeks to rectify the defect in the legal substratum which was the foundation of the invalidation in the earlier law. In State of Tamil Nadu Vs. State of Kerala and Another reported in AIR 2014 SC 2407 the legislation was held invalid as it sought to alter factual findings given by the Tribunal. This kind of legislative exercise was opined to be an unconstitutional exercise because it encroaches on judicial powers of the Court. No such effort has been made in the impugned Validating Act. On the other hand, it seeks to rectify legislative anomaly expressed or pointed out in the earlier judgment of the Court and nothing more. By placing reliance on Nar Bahadur Bhandari and Another Vs. State of Sikkim and Others reported in (1998) 5 SCC 39 para 10 and so also Aneeta Hada Vs. M/s. Godfather Travels and Tours Private Limited reported in (2012) SC 2795, para 32, it was strenuously argued that a legal right was created in the Boards elected under the repealed Act of 1983 by way of legal fiction by virtue of Section 6 of the Act of 2006 and such vested right could not be taken away by retrospective operation of the Validating Act. The aforesaid authorities merely lay down the proposition that a legal fiction has to be interpreted in the light of the object and purpose for which it was enacted and nothing more.

36. In National Agricultural Cooperative Marketing Federation of India Vs. Union of India reported in (2003) 5 SCC 23, the Hon’ble Supreme Court dealt with the issue of retrospective amendment of Section 80-P(2)(iii) of the Act. The legislature had sought to give retrospective effect to the said amendment for the last thirty years. Repelling the argument of the arbitrariness, the Apex Court held as follows:
“28. The test of the length of time covered by the retrospective operation cannot by itself, necessarily be a decisive test. Account must be taken of the surrounding facts and circumstances relating to the taxation and the legislative background of the provision. To recapitulate the legislative background of the particular statutory provision in question before us- the first authoritative interpretation of Section 80-P(2)(a)(iii) was made in 1994 in Assam Coop. when it was held that the word “of” must be construed as “produced by”. Therefore, the law as it stood from 1968 was, by this decision, required to be read in precisely this manner and presumably assessments of apex societies were commenced and concluded on this basis. The situation continued till 1998 till this Court reversed Assam Coop. in Kerala State Coop. Marketing Federation Limited. Before the assessment year was over, by the 1998 Amendment the word “of” was substituted by “grown by”. In real terms therefore there was hardly any retrospectively, but a continuation of the status quo ante. The degree and extent of the unforeseen and unforeseeable financial burden was, in the circumstances, minimal and cannot be said to be unreasonable or unconstitutional.”

37. In State Bank’s Staff Union Vs. Union of India reported in (2005) 7 SCC 584 with reference to issue of curative statutes it was held as under:
“26. Curative statutes are by their very nature intended to operate upon and affect past transactions. Curative and validating statutes operate on conditions already existing and are therefore wholly retrospective and can have no prospective operation.”
However, at para 24 while referring to the report, the Apex Court observed, as under:
“24. Craies on Statute Law (7th Edition) at p. 396 observes that:
“If a statute is passed for the purpose of protecting the public against some evil or abuse, it may be allowed to operate retrospectively, although by such operation it will deprive some person or persons of a vested right. Thus public interest at large is one of the relevant considerations in determining the constitutional validity of a retrospective legislation.”

38. In Commissioner of Income Tax (Central)-1, New Delhi Vs. Vatika Township Private Limited reported in (2015) SCC 1, the Apex Court held that imposition of surcharge on the tax of undisclosed income was a new imposition or impost and could not be given a retrospective effect. In the said judgment, however, the Court noted a very relevant and obvious exception to declaratory or curative statutes by observing as follows:
“32. Let us sharpen the discussion a little more. We may note that under certain circumstances, a particular amendment can be treated as clarificatory or declaratory in nature. Such statutory provisions are labelled as “declaratory statutes”. The circumstances under which provisions can be termed as “declaratory statutes” are explained by Justice G.P. Singh in the following manner:
“Declaratory statutes
The presumption against retrospective operation is not applicable to declaratory statutes. As stated in CRAIES and approved by the Supreme Court:
‘For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a Preamble, and also the word “declared” as well as the word ”enacted”. But the use of the words ‘it is declared’ is not conclusive that the Act is declaratory for these words may, at times, be used to introduced new rules of law and the Act in the latter case will only be amending the law and will not necessarily be retrospective in determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is ‘to explain’ an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well-settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language ‘shall be deemed always to have meant’ is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law.”

39. The Validating Act is in the nature of a curative statute whose endeavor is to cure legislative defect pointed out in the earlier judgment. Hence, its retrospective effect or operation cannot be held to be unconstitutional. Such retrospectively was to correct anomaly created by the legal fiction under Section 6 of the Act of 2006 and in no way causes undue hardship or arbitrariness in the instant case. At the time of their elections under the repealed Act of 1983, members of the Boards were very well aware that they had tenure of three years. Later, only by a legal fiction they were treated on par with the Boards elected under Act of 2006 and their tenure was deemed to be extended to five years. Considering such legal fiction as unjust, the tenure of the old
Boards were reverted back to three years by virtue of amending Act of 2011 without amending the legal fiction under Section 6 of the parent Act. Pointing out such error in the legislative exercise, this Court in earlier writ petition 4009 (w) of 2012 declared the amending Act as ultra-vires.

40. In view of the said judgment, the legal fiction was sought to be amended so as not to treat the old Boards elected under the repealed Act at par with the new Boards elected under the Act of 2006 vis-à-vis their tenure in office. But for such legal fiction, the elected members of the Board at the time of their election as a matter of fact did not have any statutory right or mandate to continue in office for more than three years. Therefore, no one can claim a vested right in continuation of a legal fiction. The Validating Act had a limited retrospective operation as it was brought into force with effect from 04.02.2013 that is the date of the promulgation of the Ordinance. Hence, repeal of the legal fiction from the date of promulgation of the Ordinance can never be said to be either arbitrary or unreasonable or operated to the undue hardship of the members of the said Board, particularly, in view of the fact that any act done or suffered by the said Boards prior to the promulgation of the said Ordinance by virtue of the legal fiction remained unaffected. Hence, retrospective operation of the curative amendment, as aforesaid, at any stretch of imagination cannot in the facts of the case be held either to be contrary to the public interest or, arbitrary or unjust or caused undue hardship to the elected members of the Boards elected under the repealed Act of 1983 so as to be held to be violative of article 14 of the Constitution.

41. It is relevant to refer to the judgment reported in 1997 8 SCC 522 in S.S. Bola and Others Vs. B.D. Sardana and Others. In this case the Apex Court while upholding the validating of the Amending Act altering the legal basis of intense seniority and promotion to higher posts held that the same shall operate retrospectively to the extent that the seniority list published shall stand annulled and fresh seniority list would be drawn up in accordance with the provisions of the amending Act, however, promotions which have been already made on the basis of seniority list so drawn up shall remain unaffected.

42. In the case of State of Gujarat and Another Vs. Raman Lal Keshav Lal Soni and Others reported in (1983) 2 SCC 33, the Apex Court had an occasion to deal with the third amendment to Gujarat Panchayats 1978, Apex Court declared Gujarat Panchayats (third Amendment Act of 1978) unconstitutional as it sought to retrospectively nullify the effect of a judgment passed by the High Court holding that the panchayat service was a civil service of the State and the members of the said service are Government servants. The Act sought to make artificial distinction between Municipality Employees in the Panchayat service and the Government servants in the self-same service. In the instant case, the Validating Act merely altered the legal substratum on the basis of which judgment in W.P. 4009 of 2012 was passed by this Court. It did not nullify the said judgment but was enacted bearing in mind the observations made in the judgment. The Validating Act was brought into force from the date of promulgation of the Ordinance of 2013 and did not affect the Acts done or suffered by the respective Co-operative Societies during the subsistence of the un-amended legal fiction under Section 6 of the Act of 2006. Whenever a new legislation is enacted, it always affects existing rights or creates new rights. Merely giving retrospective operation to legislation would not render a law as unfair or unreasonable and violative of Article 14 of the Constitution.

43. Such proposition of law was illustrated by the Apex Court in the case of State of Tamilnadu Vs. Arooran Sugars Limited reported in 1997 (1) SCC 326, the Apex Court at paras 13 and 16 held as follows:
“13. The power of the legislature to amend, delete or obliterate a statute or to enact a statute prospectively or retrospectively cannot be questioned and challenged unless the court is of the view that such exercise is in violation of Article 14 of the Constitution. Whenever any Act or amendment is brought in force retrospectively or any provision of the Act is deleted retrospectively, in this process rights of some are bound to be affected one way or the other. In every case, it cannot be urged that the exercise by the legislature while introducing a new provision or deleting an existing provision with retrospective effect per se shall be violative of Article 14. If that stand is accepted, then the necessary corollary shall be that legislature has no power to legislate retrospectively, because in that event a vested right is effected; of course, in special situation the Supreme Court has held that such exercise was violative of Article 14 of the Constitution…………..”
16. It is open to the legislature to remove the defect pointed out by the court or to amend the definition or any other provision of the Act in question retrospectively. In this process it cannot be said that there has been an encroachment by the legislature over the power of the judiciary. A court’s directive must always bind unless the conditions on which it is based are so fundamentally altered that under altered circumstances such decisions could not have been given. This will include removal of the defect in a statute pointed out in the judgment in question, as well as alteration of substitution of provisions of the enactment on which such judgment is based, with retrospective effect.”

44. In the above said case the Apex Court held that it is permissible for the legislature to make amendments to the existing law in order to remove anomaly pointed out in the earlier judgment of the Court. Hence, the Validating Act is not seeking to nullify the earlier judgment of the Court. It only cures the anomaly which was pointed out by the Court in the said judgment and has been given retrospective effect from the date of promulgation of the Ordinance 2013 so as to remove such legal anomaly without causing undue hardship to the members of the old Boards elected under the repealed Act. The members of the earlier Boards under the repealed Act of 1983 were aware at the time of their election with regard to their tenure. Such tenure was different from the tenure envisaged under the Act of 2006. By way of legal fiction the earlier Boards were deemed to be elected under the Act of2006 entitling them to have a tenure of five years under the new Act.

45. This legal fiction has created an imaginary State of affairs which but for the fiction factually does not exist. Hence, the Boards which are naturally unequal at the time of their creation were deemed to be equal by the aforesaid legal fiction so as to enjoy similarity in so far as their tenures. This is nothing but an outcome of an artificially created situation. Hence, this would subsist so long as the legal fiction remains in the statute book. It is relevant to mention that legal fiction by itself did not create any vested right in a party to its continuance as it is subject to repeal or amendment, as the case may be, like any other provision of law. In the present case, the Validating Act has merely amended the legal fiction under Section 6 of the Act of 2006 in order to cure a legal anomaly and nothing more. Such amendment has led to retrospective effect from the date of promulgation of the Ordinance of 2013 and not earlier. By doing so, the Validating Act does not affect the acts done or suffered by the Boards during the subsistence of the legal fiction till its amendment by the aforesaid Ordinance. Such nature of retrospectively cannot by any stretch of imagination be said to be contrary to public interest or cause hardship to the respondent/writ petitioner or the Boards elected under the repealed Act of 1983, in any manner whatsoever so as to suffer vice of unconstitutionality. The next question is whether the Validating Act of 2013 is discriminatory in nature and thereby violative of the Article 14 of the Constitution.

46. On-going through the impugned judgment, no doubt one
would definitely notice such reasoning ventilated by the learned Single Judge while declaring Amending Act of 2011 as invalid. From judgment in Writ Petition 4009(w) of 2012 relevant portions are quoted below:
“It is quite evident that the Amendment Act is a hasty piece of legislation. However, proceeding in haste by itself cannot be a ground of challenge to the validity of a statute, though proceeding in haste amounts to arbitrariness (see State of Tamil Nadu & Ors. Vs. K. Shyam Sunder & Ors. reported in (2011) 8 SCC 737). The resultant action of proceeding in haste has tantamounted to a palpable demonstration of legislative arbitrariness by the State legislature. The Amendment Act came into effect from 18th January, 2011. Insertion of the provision contained under sub-clause (ii) of clause (a) of section 12 of the Amendment Act into section 36 of the Principal Act after the word and figure “section 29”, has the effect of reduction of tenure of only those Boards of Co-operative Societies which were elected prior to the Principal Act coming into force and whose initial tenure of thirty six months stood extended up to sixty months by virtue of the legal fiction introduced under the non obstante provision in the Repeal and Savings clause contained under section 6 of the Principal Act. On the other hand, all Boards of Cooperative societies elected between 18th January, 2011 and 6th February, 2012 or even thereafter, notwithstanding such amendment introduced by the Amendment Act, would have an automatic tenure of sixty months. In other words, the effect of the Amendment Act does not at all touch the tenure of the Boards of Co-operative Societies, which have been elected after 18th January, 2011. Such legislative action clearly illustrates the concept of negation of equality and squarely hits Article 14 of the Constitution; the ipsissima verba being, arbitrary.”
The Court further held:
“As observed earlier, once the legal fiction under a non obstante clause was introduced by the Principal Act, the three years tenure of the Boards of all State Co-operative Societies, including the writ petitioner no. 1, who were elected under the provision of sub-section (8) of section 27 of the Repealed Act of 1983, was deemed to be extended for a further period of two years, immediately upon the Principal Act coming into force with effect from 18th January, 2011, in consonance with the proposed Constitutional Amendment. The State, without making necessary amendment to the Repeal and Savings clause of the Principal Act, sought to bring about a retrograde change in the tenure of the Boards of Directors of Co-operative Societies elected under the Repealed Act of 1983, by whittling down its tenure from five years to three years, thereby rendering nugatory the conscious and deliberate change that was brought about by the State earlier, upon bringing into force the Principal Act, which was in consonance with the proposed Constitutional Amendment. For reasons stated above, sub-clause (ii) of clause (a) of section 12 of the Amendment Act is held to be repugnant to the provision of sub-section (2) of section 6 of the Principal Act, to the extent it seeks to reduce the tenure of the Boards of Co-operative Societies to thirty six months from sixty months, as originally provided under clause (a) of section 36 of the Principal Act and is further held to be ultra vires Article 14 of the Constitution of India. Sub-clause (ii) of clause (a) of section 12 of the Amendment Act is, therefore, liable to be struck down and is accordingly struck down. Consequently, the Board of writ petitioner no. 1, which came into effect from 24th November, 2009, shall continue in office for a period of sixty months to be computed from that date, subject of course, to all other provisions of law, as applicable for its continuance.”

47. In the above circumstances, it was held that amendment
to Section 36 (a) of the Act of 2006 altering the tenure of the Board elected under the Repealed Act of 1983 without amending the legal fiction of equality under Section 6 of the Act of 2006, rendered such classification, arbitrary, unreasonable, resulting in violation of Article 14 of the Constitution. However, such observation of discriminatory classification made in the said judgment does not hold good once the substratum of the law, namely, Section 6 of the Act of 2006 stood amended as per the observations made by the learned Judge in the said judgment. In the changed scenario under the statutory scheme, legal fiction under Section 6 of the Act of 2006 was made subject to other provisions of the Act which provided for different tenures for Boards elected under the repealed Law and Boards elected under the New Law. Such Amendment virtually restored the natural distinction between the two types of Boards, as stated above, which were always in existence but for the legal fiction. Therefore, one cannot say such classification was without rational basis, unjustified, unreasonable, arbitrary or violative of Article 14 of the Constitution.

48. It must be remembered that the Boards elected under the repealed Act of 1983 were to enjoy tenure of three years under the law that was in-force at the relevant time of election. Hence, no right, far less a vested right had been created in the Boards elected under the repealed Act of 1983 at the time of their elections to continue beyond the tenure of three years from the date of such election. Their tenure was deemed to be extended on account of the legal fiction created under Section 6 of the Act of 2006. It is nobody’s case that State legislature was not competent to amend the legal fiction under Section 6 of the Act of 2006. As a matter of fact, failure to effect such amendment had faced the criticism at the hands of this Court in the earlier judgment as learned Judge observed that it was an Act of “Poor Draftsman-ship”. Distinction or difference in the tenure of the Board of directors under the repealed Act and the New Act cannot be said to be an artificial one or a case of hostile or arbitrary discrimination. It is an outcome of the legislative mandate under the respective laws. Boards elected under the repealed Act of 1983 and those elected under the Act of 2006 are significant and independent classes in themselves having separate tenure of office as per the respective legislations under which they were elected. Such separate groups were sought to be amalgamated by a legal fiction by virtue of Section 6 of the Act of 2006. This Court in the earlier judgment held that desegregating the said Boards would be discriminatory and violative of Article 14 unless the legal fiction under Section 6 was amended. State legislature as a matter of fact undertook such legislative exercise in bringing the Validating Act of 2013 to amend the legal fiction under Section 6 of the Act and thereby desegregate the two independent and individual groups, i.e. Boards elected under the repealed Act of 1983 and the new act of 2006.

49. The election of the Board under the auspices of an independent Co-operative Election Commission by virtue of Section 96 of the Act of 2006 cannot be treated at par with the State controlled election of a Board by virtue of statutory scheme of the repealed Act of 1983. Save and except, the legal fiction under Section 6 of the Act of 2006, the Boards elected under the repealed Act of 1983 and those elected under the new Act of 2006 cannot be treated as a homogeneous group. Hence, the Validating Act of 2013 which sought to rectify an anomalous homogeneity created by an overriding legal fiction cannot be understood as discriminatory or arbitrary in nature. On the other hand, a legislative fiction under Section 6 of the Act of 2006 if permitted to continue, it would create an artificial distinction between the tenure of Boards inter se elected under the repealed Act of 1983, while the Boards elected under the repealed Act prior to 18th January, 2008 would have a tenure of three years as per repealed Act, the Boards which were elected on/after 18th January, 2008 and were in existence on the date of coming into force of Act 2006, that is, 18th January, 2006 would enjoy an additional tenure of two years by virtue of Section 6 of the Act of 2006. This in fact created an artificial distinction between the Boards constituted under the Repealed Act without any rational basis. The Validating Act by correcting legal substratum, namely, overriding effect of the legal fiction reasserted the reasonable classification between the Boards elected under the repealed Act on one hand and those elected under the new Act on the other hand who would have had different tenures. Such legislative exercise, at any cost cannot be said to create a hostile discrimination between the Boards elected under the respective legislations. On the contrary it seeks to cure an anomaly created by legal fiction under the Act of 2006, as stated above.

50. In Andhra Pradesh Dairy Development corporation Federation v. B. Narashima Reddy and others reported in (2011) 9 SCC 286, Apex Court was of the opinion that Amendment Act of 2006 amending the 1995 Act and declaring that the Milk co-operatives shall be governed by 1964 Act instead of 1995 Act was a retrograde step prompted by a change of Government and, therefore, unconstitutional. The Apex Court further held that the classification of Milk co-operatives, vis a vis, other Co-operatives were unreasonable and violative of Article 14 of the Constitution. In the case on hand, facts are the just opposite. The Validating Act of 2006 seeks to re-establish natural classification between the Boards elected under the repealed Act of 1983 and those elected under the Act of 2006 which was sought to be effaced by the legal fiction under Section 6 of the Act of 2006 unlike the artificial distinction between the Milk co-operative and other Cooperatives created by the Amending Act which were declared ultra vires in the aforesaid judgment.

51. That apart, while in the aforesaid judgment, the Amending Act was held to be a retrograde step in increasing government control on co-operatives by reverting Milk co-operative to the 1964 Act, in our case the eclipse of the old Boards elected through a State controlled mechanism under the scheme of 1983 Act would usher in new Boards in the Co-operatives elected under an independent Election commission in terms of the Act of 2006 as envisaged in part IXB of the Constitution and cannot be said to be a retrograde step. It was strenuously argued that creation of such classification between the Boards by Validating Act is an example of legislative arbitrariness and, therefore, unconstitutional. One must make a clear distinction between the Sovereign Act of the State in making laws on one hand and an administrative action of the State on the other. If the legislative power is exercised within constitutional parameters it cannot be held unconstitutional by attributing motives to the legislature, while an administrative action may, however, be tested on the grounds of malice both in law and in fact.

52. In the case of State of Tamil Nadu v. K. Shyam Sunder reported in (2011) 8 SCC 737 paragraph 50 is relevant which reads as under:-
“In Ajay Hasia v. Khalid Mujib Sehravardi, this Court held that Article 14 strikes at arbitrariness because an action that is arbitrary, must necessarily involve negation of equality. Whenever therefore, there is arbitrariness in State action, whether it be of the legislature or of the executive, Article 14
Immediately springs into action and strikes down such State action.” [See also E.P. Royappa v. State of T.N. (1974) 4 SCC 3 and Maneka Gandhi v. Union of India (1978)1 SCC 248.] Relying on the expression “legislature” in the above said paragraph it was strenuously argued that legislative arbitrariness is a species of ultra vires evolved by the constitutional Courts to check whimsical legislation prompted by the change in the political executive of the State. It would be appropriate to refer to paragraphs 36 and 37 of the report referred to above in order to appreciate the ratio in the above decision. The relevant portion reads as under:-
“36. In State of Punjab v. Gurdial Singh, this Court held that when power is exercised in bad faith to attain ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal, it is called colourable exercise of power. The action becomes bad where the true object is to reach an end different from the one for which the power is entrusted, guided by an extraneous consideration, whether good or bad but irrelevant to the entrustment. When the custodian of power is influenced in exercise of its power by considerations outside those for promotion of which the power is vested, the action becomes bad for the reason that power has not been exercised bona fide for the end design.
37. It has consistently been held by this Court that the doctrine of mala fides does not involve any question of bona fide or mala fide on the part of legislature as in such a case, the Court is concerned to a limited issue of competence of the particular legislature to enact a particular law. If the legislature is competent to pass a particular enactment, the motives which impelled it to an act are really irrelevant. On the other hand, if the legislature lacks competence, the question of motive does not arrive at all. Therefore, whether a statute is constitutional or not is, thus, always a question of power of the legislature to enact that statute. Motive of the legislature while enacting a statute is inconsequential: “Malice or motive is beside the point, and it is not permissible to suggest parliamentary incompetence on the score of mala fides.”

53. The legislature, as a body, cannot be accused of having passed a law for an extraneous purpose. This kind of “transferred malice” is unknown in the field of legislation.” [See K.C.Gajapati Narayan Deo v. State of Orissa AIR 1953 SC 375, STO v. Ajit Mills Ltd. SCC p. 108 (1977) 4 SCC 98 para 16, K. Nagaraj v. State of A.P.(1985) 1 SCC 523, Welfare Assn., A.R.P. v. Ranjit P. Gohil (2003) 9 SCC 358 and State of Kerala v. Peoples Union for civil Liberties (2009) 8 SCC 46.]. From the above reading, it is clear that a judgment has to be read as a whole. It is erroneous to pick up a line or two from the decisions ignoring other portions thereof to cull out its ratio. In the said report the Apex Court annulled 2011 Tamil Nadu Amending Act which sought to suspend the operation of 2010 State Act which had been upheld by the Court and had already come into operation. The Court held that the factual basis for enacting Amending Act was unfounded and the issues canvased therein could be addressed by resorting to notifications under Section 18 of the 2010 Act. It further held that the purpose of Amending Act was nothing but to nullify the effect of the judgment upholding the 2010 Act and such
Amending Act caused undue hardship to the students who were already following the curricula and books prescribed under the 2010 Parent Act. The ratio of the said decision, therefore, is to the effect that the 2011 Amending Act was unconstitutional as it sought to suspend operation of the 2010 Act although the same had been upheld by the Court and such suspension was not in public interest as it caused undue hardship to innumerable students who had already commenced their education under curricula prescribed in the parent Act.

54. In the present case, the Validating Act of 2013 sought to
remove an anomaly arising out of legal fiction under Section 6 of the 2006 Act as pointed out in the earlier judgment of this Court. That apart, there was confusion in the administration and management of the Co-operatives in the State as disputes were breaking out between the Boards which were elected in terms of various orders passed by the Court and the previous Boards who placed claim to manage the said Co-operatives in terms of the judgment in W.P. No. 4009(w) of 2012. Thus, the Validating Act was enacted to resolve confusion in management of Co-operatives which had cropped up in the meantime. Hence, the validating Act cannot be said to be ultra vires the constitutional parameters of legislative competence of the State so as to declare it as invalid. It is pertinent to note that neither in Ajay Hassia and others nor Aneeta Hada cases relied upon by the respondent the court was dealing with the issue of invalidating of a primary legislation. In both the cited cases the challenge was to the arbitrariness of administrative actions. Hence, the said authorities cannot be pressed into service to propound a proposition that primary legislation can be declared ultra-vires on the ground of legal malice of the legislature.

55. As a matter of fact, the above controversy seems to have been put to rest by the Apex Court in the following decisions in G.C. Kanungo Vs. State of Orissa reported in 1995 (5) SCC 96, the Apex Court has held as under:
“11. ……………………………………………………………………………………
“The legislature, as a body, cannot be accused of having passed a law for an extraneous purpose. If no reasons are so stated as appears from the provisions enacted by it. Its reasons for passing a law or those that are stated in the Objects and Reasons. Even assuming that the executive, in a given case, has an ulterior motive in moving legislation, that motive cannot render the passing of the law mala fide. This kind of ‘transferred malice’ is unknown in the field of legislation.”
12. Hence, we have no hesitation in finding that the 1991 Amendment Act cannot be held to be unconstitutional because of the ulterior motive and the mala fides attributed to the Orissa State Legislature.”

56. Similarly, in State of Himachal Pradesh Vs. Narain Singh reported in 2009 13 SCC 165, the Apex Court succinctly held as follows:
“19. An argument was, however, made before the High Court that the aforesaid amendment is actuated by a mala fide motive and is a piece of colourable legislation. The aforesaid contention was, however, not accepted by the High Court in the impugned judgment. In fact such contention is not tenable on principle.
20. Reference in this connection be made to a decision of this Court in K.Nagaraj Vs. State of A.P. wherein Chandrachud, C.J., speaking for a three-Judge Bench said that the legislature, as a body, cannot be accused of having passed a law for an extraneous purpose. Learned Chief Justice held that the concept of “transferred malice” is unknown in the field of legislation provided the legislature enacts the law within its powers. The aforesaid principle in K. Nagaraj has been accepted by this Court in many cases and a reference in this connection may be made to a decision of this Court in G.C. Kanungo Vs. State of Orissa.”

57. Relying on the aforesaid authorities, we hold that a primary legislation which is otherwise constitutionally valid cannot be declared ultra-vires by attributing mala fides to the legislature. We further, hasten to observe that in the factual matrix of the present case where sufficient and compelling reasons of public interest have been demonstrated for promulgation of the Ordinance 2013 and the subsequent Validating Act as evident from the records produced before us leading to the promulgation of the said Ordinance as well as the pleadings on behalf of the State in W.P.3829 of 2013 wherein Ordinance 2013 was challenged, we do not find any malice in law or in fact in the promulgation of the impugned legislation. It has been strenuously argued that the directions given in the earlier judgment dated 17.10.2012 operates as res judicata and therefore binds the State, therefore, the same cannot be set aside by the Validating Act. Reliance is placed on 1985 (1) All ER 211 (Clark and Others Vs. Chat Burn and others) and AIR 1967 SCC 1390 (Man Gru Mahato and others Vs. Takur Taraknathji Tarekeshwar and others). Firstly, the Validating Act changes the legal substratum on which the earlier judgment was based and does not alter the directions given in the said judgment as contended by the writ petitioners. Secondly, principle of res judicata precludes a subsequent adjudication of a cause by a judicial authority but has no application to the sovereign right of the legislature to alter the legal foundation upon which the previous judgment was rendered. Hence, the aforesaid argument suffers from total fallacy and the authorities relied upon in support thereof have no manner of application in the facts of the present case.

Point No. 3:
58. Finally we come to the arguments that the Validating Act is violative of the letter and spirit of Article 243ZJ(2) of the Constitution of India. Part IXB was incorporated in the Constitution of India with effect from 15.02.2012. Article 243ZJ(2) contained in the said part reads as follows:
“Article 243ZJ: Number and term of members of Boards and its office bearers:
..................................................................
(2) The term of office of elected members of the Board and its office bearers shall be five years from the date of election and the term of office bearers shall be conterminous with the term of the Board;
Provided that the Board may fill a casual vacancy on the Board by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the Board is less than half of its original term.”

59. It has been submitted that the Validating Act of 2013 which came into force on 26th April, 2013 is violative of the aforesaid constitutional provision which, inter-alia, provides that the term of office of the elected members of the Board and its office bearers shall be five years from the date of election. It has been argued that when the Boards elected under the repealed Act of 1983 were given an extended tenure of five years by operation of legal fiction engrafted in Section 6 of the Act of 2006, amendment of such legal fiction and thereby reverting to three year tenure for the said Boards by the Validating Act of 2013 was a retrograde step which is in violation of the constitutional mandate under the above said Article of the Constitution of India. It is well-settled law that a constitutional amendment is always prospective in nature, (reference is made to Ranjit Singh Vs. Commissioner of Income Tax, U.P. and others reported in AIR 1962 SC 93 para-9). The constitutional mandate of five year tenure for the elected members of the Board of a co-operative as engrafted in Article 243ZJ(2), as aforesaid, would apply to a Board whose members were elected after incorporation of the said part and not in respect of a Board which had been elected prior to its incorporation. Prospective operation of Part IXB of the constitution is further evident by reading Article 243ZT of the Constitution of India which reads as under:
“Article 243ZT: Continuance of existing laws:-
Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.”

60. Article 243ZT saves the operation of law which was in force at the time of incorporation of Part IXB of the Constitution in so far as they are in consistent with the provisions of the said part till its amendment or for a maximum period of one year from its commencement, whichever is earlier. Upon reading the saving clause in Article 243ZT, it leaves no doubt in anyone’s mind that the constitutional imperative of a five year tenure for a Board is prospective in nature and by no stretch of imagination it shall apply to a Board already in existence elected under an earlier law made by the State legislature. Therefore, the Validating Act cannot be said to be violative of the provisions contained in Part IXB of the Constitution of India on such score. It has been further argued, when the State legislature had, even prior to the enactment of the Part IXB of the Constitution amended its law and enacted Act of 2006 relating to co-operatives and thereby provided a tenure of five year for all Boards, including those Boards elected under the repealed Act of 1983, the enactment of the Validating Act reverting the tenure of such Boards elected under the repealed law to three years was violative of the spirit of the constitutional mandate. Part IXB of the Constitution was incorporated to give constitutional recognition to the systematic and orderly development of the Co-operative movement in a democratic manner in the country. Let us go through the relevant provisions of the said constitutional amendment. Article 243ZH (Clause b) defines the Board as under:
“(b) “Board” means the board of directors or the governing body of a cooperative society, by whatever name called, to which the direction and control of the management of the affairs of a society is entrusted to;”

61. Article 243ZJ of the Constitution lays down the Constitution and tenure of such Boards. It provides for reservation of seats for Schedule Castes and Schedule Tribes, so also women and co-option of members having experience in the fields of Banking, management and other related fields. Clause 2 of the said Article provides that the tenure of such a Board shall be for a term of five years from the date of its election. Article 243ZK provides for regular and timely election of a Board to the Cooperative Societies under the auspices of an independent Election Commission. Said Article 243ZK reads as follows:
“Article 243ZK: Election of members of Board:-
(1) Notwithstanding anything contained in any law made by the Legislature of a State, the election of a Board shall be conducted before the expiry of the term of the Board so as to ensure that the newly elected members of the Board assume office immediately on the expiry of the term of the office of members of the outgoing Board.
(2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to a co-operative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law:
Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such elections.”

62. The said Article provides that election of the members of a Board of a Cooperative Society shall be conducted before the expiry of a prior Board and the newly elected members shall assume office immediately on the expiry of the term of the outgoing Board. Superintendence, direction and control of the election to the Boards of a Co-operative Society shall vest in an authority or institution provided by the legislature of a State. Therefore, from reading of the scheme under Part IXB in the Constitution makes it clear that its provisions shall apply to a Board of a Co-operative Society elected in consonance with the provisions of the said part. Section 96 of the Act of 2006 provides for the establishment of an independent cooperative Election Commission as envisaged under Article 243ZK(2) of the Constitution for the above said superintendence, direction and control of elections to a Co-operative Society under the said Act. Although the repealed
Act of 1983 provided for a co-operative election authority under Section 35, the said authority did not enjoy independent power and under Section 36 of the said Act, the State Government was empowered to make rules for preparation of electoral rolls, fixing of date, place and manner of election including publication of results thereof. On the other hand, by virtue of Section 96(8) Act of 2006 all such powers are vested in an independent Election Commission constituted under Section 96 of the said Act.

63. Therefore, the election of a Board to a Co-operative Society under the repealed Act of 1983 cannot be said to be in terms of the constitutional scheme as envisaged under Part IXB of the Constitution of India or the statutory scheme under the Act of 2006. The Boards elected under the Act of 2006 ought to be elected under the superintendence, direction and control of an independent Election Commission constituted under the provisions of Section 96 of the said Act. This definitely indicate a rational nexus for classifying the Boards constituted under the repealed Act of 1983 as a separate class from those elected under the auspices of an independent Election Commission under the Act of 2006. It is also evident that a Board elected under the provisions of repealed Act of 1983 cannot be construed as a Board elected pursuant to the provisions of Part IXB of the Constitution especially in the light of Article 243ZK(2) thereof so as to enjoy a tenure of five years as envisaged therein. Present Validating Act seeks to cure an anomaly of equating the Boards constituted through an election process under the repealed Act of 1983 with those Boards elected under the election process contemplated in the Act of 2006 which requires superintendence, direction and control of an independent co-operative Election Commission as provided under Article 243ZK(2) of the Constitution of India. Accordingly, a Board under the repealed Act of 1983 which was not elected under the umbrella of an independent Election Commission as envisaged in Article 243ZK(2) of the Constitution of India cannot be said to be one which would enjoy a tenure of five years under Article 243ZJ(2) of the said Part. Hence, Validating Act of 2013 cannot be invalidated on the anvil of falling foul of the letter and spirit of the aforesaid constitutional amendment.

64. In the Hassan Co-operative Milk Producers Societies Union Limited and others Vs. State of Karnataka and others (W.A. 734 of 2014) on 30.04.2014 a special bench of Karnataka High Court held that amending Act of 2013 prescribing tenure of a Board of the committees shall be for five years from the date of their election instead of five co-operative years with retrospective operation as valid, inter-alia, on the ground that the amending Act of 2013 gives effect to part IXB of the Constitution. As already opined by us, extending the tenure of a Board elected under the earlier procedure, that is repealed Act of 1983 which is not in consonance with Article 243ZK(2) of the Constitution of India would virtually defeat the purpose of the said constitutional amendment, therefore, we are of the view that the ratio of the said decision is of no assistance so far as the facts of the present case.

65. In the light of above discussion and reasoning, above appeal is allowed setting aside the impugned judgment. We direct the Co-operative Election Commission to hold elections to all the Co-operatives forthwith since the term of all the Boards has come to an end parties to bear their own costs. The appeals F.M.A. No. 2351 of 2014 and F.M.A. No. 3681 of 2014 are disposed of in terms of above reasoning. Other applications does not survive for consideration, accordingly are dismissed.

I agree. Joymalya Bagchi, J.

……………..

(2015) 119 (2) CWN (Cal) 473

IN THE HIGH COURT AT CALCUTTA

(BEFORE ASHOKE KUMAR DASADHIKARI, J.)

Debasish Batabyal …Petitioner
Vs.
Smt. Chaitali Batabyal & ors. …Opposite Parties

C.O. 39 of 2015; Civil Revisional Jurisdiction; Heard on: 27.2.2015, 2.3.2015 & 24.7.2015; Judgment on: 24.07.2015

Code of Civil Procedure, 1908 - Order 1 Rule 10 Section 151 - the deity was represented by shebait who entered into an agreement for lease of the property for 99 years on some considerations – suit for eviction was by shebait against lessee - subsequently during pendency suit lessee executed a lease deed in favour of petitioner as sub lessee - sub-lessee make application to impede as party to the proceeding - court below refused to accept - sub-lessee has

got the same right like the original lessee and has a direct interest in the suit property - if any adverse order is passed in the proceeding or any compromise is entered upon behind the back of the sub lessee, the sub-lessee would be adversely affected and he should be added as party to the proceedings.

Ratio decidendi:-
The sub-lessee has got the same right like the original lessee and has a direct interest in the suit property. If any adverse order is passed in the proceeding or any compromise is entered upon behind the back of the sub lessee, the sub-lessee would be adversely affected and he should be added as party to the proceedings.

Observations of the Court:-
The Hon’ble Apex Court in case of (Sanjay Verma Vs. Manik Roy & ors.) (supra) referred by Mr. Mukherjee have held that if a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin, he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. Therefore, the judgement is quite clear in one respect if no leave is obtained at the time of execution of the lease then whatever may be result or the outcome of the suit the party who has entered into such agreement would suffer the result of the litigation.(para 18)
Since the property involved in this case is the property in the lease agreement and the eviction suit relates to the same property, the petitioner having right to execute the decree, to make construction, to induct tenant etc. has every right to be added as party. Moreover, since the suit is not contested and a compromise is taking place keeping the petitioner in dark, the petitioner has every right to be added as party to the proceedings. However, it is also evident that petitioner has direct interest in the property.(para 19)
In A.I.R. 2005 S.C. 2209 (Amit Kumar Shaw and anr. Vs. Farida Khatoon and anr.), the Hon’ble Apex Court have held that transferee pendente lite can be added as a proper party if his interest in the subject matter of suit is substantial and not just peripheral. On that score the order impugned passed by the learned Court below is not sustainable. So far the other judgements cited by Mr. Bhattacharya and Mr. Mukherjee are concerned, those judgements are also speaking in the same tune. The other Hon’ble Apex Court judgement in case of Razia Begum v. Sahebzadi Anwar Begum & ors. (supra) it was held that in a suit relating to the property in order that the person may be added as party, he should have a direct interest as distinguished from a commercial interest. This three-Judges’ Bench decision of the Hon’ble Apex Court is still a good law and followed in several other cases. Therefore, there is no scope to take a different view from what has been held in case of Razia Begum (supra) and Amit Kr. Shaw (supra).(para 20)

Held:-
If any adverse order is passed in the proceeding or any compromise is entered upon behind the back of the petitioner, the petitioner would be adversely affected. He has also direct interest in respect of the property being the sub-lessee. Therefore, the order passed by the learned Court below is erroneous in law and as such not sustainable. The order impugned passed by the learned Court below is thus set aside. The petitioner is added as proforma opposite party in the appeal.

Advocates who appeared in this Case:-
Mr. S. P. Roychowdhury, Mr. P. N. Palit, Mr. Chanchal Kumar Dutt, Mr. Nikhil Ranjan Ghosh … for the petitioner.
Mr. Hiranmoy Bhattacharya, Mr. Tanmoy Mukherjee, Mr. Sounak Bhattacharyya … for the opposite party nos.5 to 7
Mr. Indra Nath Mukherjee … for the opposite party nos.1 to 4

List of cases cited:-
Razia Begum Vs. Sahebzadi Anwar Begum and ors., AIR 1958 SC 886 (referred to)
Amit Kumar Shar and anr. Vs. Farida Khatoon and anr., AIR 2005 SC 2209 (referred to)
Sanjay Verma Vs. Manik Roy & ors., AIR 2007 SC 1332 (relied on)
Padmavati Estate Pvt. Ltd. Vs. Sm. Kusum Agarwal & ors., 2008 (3) ICC 773 (referred to)
Pabitra Construction & Co. Vs. UCO Bank & ors., 2008 (3) ICC 776 (referred to)

The Judgement of the Court was delivered by Ashoke Kumar Dasadhikari, J:-

1. The order impugned passed by the learned Additional District Judge, 3rd Court, Barrackpore, North 24-Parganas on 8th December, 2014 in Title Appeal No.29 of 2012 refusing the prayer of the petitioner to add him as party in the Title Appeal is under challenge in this revisional application. Mr.Roychowdhury, learned Senior Counsel appearing for the petitioner submits that the property in question was owned by Sri Sri Gopinath Jew alias Shri Shri Radha Krishna Jugalmurty. Smt. Krishna Rani Bhuiya as shebait representing deity instituted a suit against the opposite party nos.1 to 4 being the defendants in the suit with a prayer for a decree of ejectment and recovery of khas possession of the suit property. During pendency of the suit Krishna Rani Bhuiya executed a lease deed in favour of one Debkumar Khan.

2. Mr. Roychowdhury submits that it would appear from the registered sale deed that Krishna Rani Bhunia is the shebait of the deity and fully in charge of management and administration of the said property, which was not in a position to maintain and repair it. The property was lying in most dilapidated condition for want of necessary repairs and maintenance for a long time and may collapse at any time. As per the lease deed the lessee was under obligation to pay rent at the rate of Rs.4040/- for 99 years amounting to Rs.3,99.960/- and the yearly rent is to commence from August, 2006.

3. Mr. Roychowdhury submits the lessee was authorised and empowered to make construction in the said premises and can make addition and alteration and renovation as an when necessary and for that purpose he is authorised to submit building plan to the Municipality and obtain the building plan in the name of the lessee. The lessee was also authorised and empowered to make and grant and convey the said premises, to sub-lease to any person or persons. The lessee is authorised and empowered to let out the rooms of the said premises to the tenants and can induct tenant and can evict the present tenant by or through competent court of law. The lessee is also entitled to collect rents and to grant rent receipts. The lessee is also entitled and authorised and empowered to evict the unauthorised occupants. As per clause (j) without consent of the lessor, the lessee can create any sublease and assign and can part with his lease-hold estate or interest in the said premises created under this presents. The lessee is authorised and empowered to proceed with the execution case on behalf of the lessor which is pending in the court of the Civil Judge (Junior Division) at Sealdah.

4. Mr. Roychowdhury submits that the present petitioner got a sub-lease from Debkumar Khan on the same terms and conditions of the lease entered into between Debkumar Khan and Smt. Krishna Rani Bhuia, shebait of the deity.

5. Mr. Roychowdhury submits that the petitioner being the
sub-lessee having same right as the lessee was having and authorised to execute the decree in the execution proceeding. In the instant case the suit was decreed against the opposite party nos.1 to 4 and the decree was executed. However, opposite party nos.1 to 4 being the defendants in the eviction suit filed an appeal being Title Appeal No.29 of 2012.

6. Mr. Roychowdhury submits in that appeal the petitioner being the sub-lessee moved an application under Order 1 Rule 10 read with Section 151 of the Code of Civil Procedure contending therein that he has a direct interest in respect of the property in question and therefore, he should be added as party to the proceedings. Mr. Roychowdhury submits, in the application for addition of party it was specifically stated that property was leased out on 14th August, 2006 by the deity represented by Smt. Krishna Rani Bhuia, sole shebait of the deity to Sri Debkumar Khan who is the lessor of the said premises for the period of 99 years. Thereafter the said lessee transferred the property by making a registered deed of sub-lease dated 26th October, 2007 in favour of the petition on the same terms and conditions. In view of that sub-lease the sublessee Debasish Batabyal got the possession of the said property except the tenanted portion and three rooms and he is in occupation and possession of the said property as Nilmoni Bhuiya delivered the remaining portion of the said property on 28th June, 2012 and took a sum of Rs.5,000/- for delivery of possession.

7. Mr. Roychowdhury submits that the petitioner made a prayer for addition of party stating that the petitioner is necessary party for adjudication of the real controversy between the parties. He submits that presence of the petitioner is necessary and he should be implicated in this proceeding/pending appeal. Mr. Roychowdhury submits that to avoid all multiplicity of proceeding over the subject-matter the application was made since the issue could have been decided in the pending appeal.

8. Mr. Roychowdhury submits it was categorically pointed out that the proposed party i.e. the petitioner has a defined, subsisting, direct and substantive interest in the litigation of the suit property which interest is either legal or equitable, which right is also cognizable in law. Mr. Roychowdhury submits that the learned Court below while considering the application filed by the petitioner rejected the prayer of the petitioner on the ground that the petitioner had due knowledge about the pendency of the suit before the Court below at the time of execution of the agreement and transfer was made without obtaining any leave from the Court. It was further observed that the present petitioner in spite of having knowledge about the pendency of the suit before the Court below did not care to make any application to implead him as party to the suit rather he kept mum for so many years. Thus from the petition filed by the petitioner it appears that the petitioner has not come out before the Court with clean hand and considering the provisions of Section 52 of the Transfer of Property Act, i.e. doctrine of lis pendens rejected the application for additional of party.

9. Mr. Roychowdhury submits that whatever right, title and interest over the property the lessee had, was conveyed and transferred to the sub-lessee, the petitioner herein. From the clauses referred by him would definitely show that the petitioner has his right in respect of the property in question. Mr. Roychowdhury submits that the Hon’ble Apex Court in catena of decisions held in suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest.

10. Mr. Roychowdhury referred to a decision of three-Judges’ Bench of the Hon’ble Apex Court reported in A.I.R. 1958 S.C. 886 (Razia Begum Vs. Sahebzadi Anwar Begum and ors.). He also cited one other decision reported in A.I.R. 2005 S.C. 2209 (Amit Kumar Shar and anr. Vs. Farida Khatoon and anr.). Mr. Roychowdhury submits that plain reading of the lease agreement shows that the petitioner has a direct interest over and in respect of the property in question and further he was given the right to execute a decree passed in the suit. Mr. Roychowdhury also cited other decisions reiterating the same view of the Hon’ble Apex Court. Mr. Roychowdhury submits that the order passed by the learned Court below ought to be set aside and this Court is to see whether the petitioner has a direct interest in the suit as well as in the property. If it is found by the Court that the petitioner has a direct interest over the property as well as in the suit then he should be added as a party in the proceeding and the learned Court below is wrong on its decision. Therefore, according to him, the order passed by the learned Court below should be set aside and the petitioner’s application for addition of party be allowed by this Court or be remanded to the Court below for fresh consideration.

11. Mr. Mukhrejee, learned Counsel appearing for the opposite party Nos. 1 to 4/respondents/judgement-debtors/appellants submits that the petitioner is aware of the suit which was pending for a long time. Even in spite of having knowledge about the suit he never made an application for being added as party to the suit and at the belated stage he has come when there is an application filed by the plaintiff and the judgement-debtors i.e. the opposite parties in this proceeding and the application, which is for compromise, is pending before the learned Court below. Mr. Mukherjee submits that provisions of Section 52 of the Transfer of Property Act i.e. doctrine of lis pendens would hit the case of the petitioner. According to Mr. Mukherjee, unless leave is granted by the learned Court below the lease cannot be given effect to. He also submits that issue involved in the suit is relating to the eviction of the opposite party nos.1 to 4. The sub-lessee, in fact, has no interest in the matter. He has no direct connection with the issues framed in the eviction suit.

12. Mr. Mukherjee submits that the petitioner is a stranger his presence is not at all necessary for disposal of the suit. Mr. Mukherjee further submits that this Court is to see what is the question involved in the suit. According to him, Court is not required to go into the fact or the right if not flow from the lease deed, which is not a question in the pending suit. Mr. Mukherjee submits that in view of the Hon’ble Apex Court judgement delivered in case of (Sanjay Verma vs. Manik Roy & ors.) reported in A.I.R. 2007 S.C. 1332, to the effect that during pendency of the suit if any alienation is made then it will in no manner affect the rights of the other party under the decree which may be passed in the suit unless the property was alienated with the permission of the Court. Mr. Mukherjee also submits that on similar point there are two other judgements of this Court, one is reported in 2008 (3) I.C.C. 773 (Padmavati Estate Pvt. Ltd. Vs. Sm. Kusum Agarwal & ors.) and the other one is 2008(3) I.C.C. 776 (Pabitra Construction & Co. Vs. UCO Bank & ors.).

13. Mr. Mukerhee submits that the learned Court below has rightly rejected the application filed by the petitioner. He submits that no question, if at all involved in the petition, is required to be decided in the pending suit. There is no scope to decide petitioner’s right, title and interest over the property involved in the suit. Mr. Mukherjee submits that the order passed by the learned Court below should not be interfered with.

14. Mr. Hiranmoy Bhattacharya, learned Counsel appearing
for the deity, represented by shebait being the successor of Krishna Rani Bhuiya submits that in fact the petitioner wanted to be added in the proceeding to get his right, title and interest adjudicated. Mr. Bhattacharya submits the issue of this case relates to eviction of the trespassers. Mr. Bhattacharya then submits that it is not the interest in respect of the suit property but it is a question involved in the suit as required to be taken into consideration. This Court is to see what question is involved in the suit. Whatever right may flow from the lease deed that cannot be a question since it was eviction suit between the landlord and the tenant.

15. Mr. Bhattacharya further submits that it was a question of eviction. The addition of party will unnecessarily not help the learned Court below to dispose of the appeal. In case this addition is allowed the decree would be set aside and the case may be a remand for rehearing and for settling a dispute, which is foreign to the suit. Mr. Bhattacharya then submits that the petitioner had knowledge about the suit and he himself was a party to the execution. At the time of execution of the decree he has put his signature. Mr. Bhattacharya submits that in case he is an occupant of any portion of the suit property he can resist and there are provisions under the Code in that regard.

16. Mr. Bhattacharya referred the provisions under Order 21 Rules 97, 98, 99, 101 and 103. Referring Rule 101 Mr. Bhattacharya submits if any question arises at the time of execution relating to the suit the same could also be decided and adjudicated if any proper application is taken out under Order 21 Rule 101 of the C.P.C. Mr. Bhattacharya submits that the provisions under Section 52 is applicable in the instant case since no leave was granted before granting of this lease the petitioner cannot be impleaded as party in this proceeding. According to Mr. Bhattacharya, this decision of the learned Court below is lawful and valid and not to be interfered with.

17. Considered the submissions made by the learned Counsel appearing for the respective parties. The facts which are all admitted that the deity was represented by one Krishna Rani Bhuiya. Krishna Rani entered into an agreement for lease of the property for 99 years on some considerations. The relevant clauses of the lease giving right to the lessee in respect of the property are quoted hereinafter:-
“the Lessee for the period of 99 (Ninety-nine) years commencing from 1st day of August, 2006 yielding and paying the yearly rent at the rate of Rs.4040/- (Rupees Four thousand Forty) only for 99 years rent, amounting to Rs.3,99,960/- (Rupees Three lakhs Ninety-nine thousand Nine hundred Sixty) only. The yearly rents will commence from August, 2006 and the rents for 99 years are being paid to the Lessor by the Lessee. AND THE LESSEE covenants with the Lessor the following terms and conditions to be observed and performed on the part of the Lessee and as such the Lessor in exercise of all powers, authorities and liberties vested in her as such Shebait do hereby and hereunder grant demise and assure as and by way of lease unto and to the use of the Lessee the property fully mentioned and described in the Schedule “A” TO HAVE AND TO HOLD the same only for a term of 99 years as hereunder contained i.e. until the 31st day of July, 2105 AND THAT the Lessee do covenant and agreed with the Lessor as follows :-”
“(d)The lessee is entitled to make construction in the said premises and can make addition and alteration and renovation as an when necessary and for that purpose is authorised to submit building plan to the Municipality for such construction, addition and alteration and renovation and obtain the building plan in the name of the lessee.
(e)That the lessee is authorised and empowered to make and grant and convey the said premises to sub-lease to any person or persons.
(f)The lessee is authorised and empowered to let out the rooms of the said premises to the tenants and can induct tenant and can evict the present’s tenants by or through competent court of law. The lessee is also entitled to collect rents and to grant rent receipts.
(h)The Lessee is entitled and authorized and empowered to evict the unauthorized occupants within the premises and for that purpose can file suit application and appeal in the court of law.
(j)Without the consent of the Lessor, the Lessee can create any sub-lease and assign and can part with his lease hold estate or interest in the said premises created under this presents.
(l)The said premise is at present occupied by illegal occupants. The Lessee is hereby authorized and empowered to proceed with the execution case on behalf of the Lessor which is pending in the Court of the Civil Judge (Junior Division) at Sealdah.”

18. Deb Kumar Khan, lessee and Debasish Batabyal, sub-lessee entered into a registered deed of sub-lease. It is evident and clear from the clauses that the sub-lessee Debasish Batabyal has got the same right like the original lessee Deb Kumar Khan. In view of the aforementioned two lease deeds Debasish Batabyal has a direct interest in the subject suit property. Whatever may be the result of the appeal in case the appeal is allowed or dismissed the petitioner would definitely suffer the consequence. The Hon’ble Apex Court in case of (Sanjay Verma Vs. Manik Roy & ors.) (supra) referred by Mr. Mukherjee have held that if a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin, he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. Therefore, the judgement is quite clear in one respect if no leave is obtained at the time of execution of the lease then whatever may be result or the outcome of the suit the party who has entered into such agreement would suffer the result of the litigation.

19. But in this case the fact is different, the plaintiff and the defendant are not contesting but they are entering into a compromise and that too after execution of the decree in which the petitioner is a party and he put his signature. Thus the compromise may be made, against petitioner’s interest who was a party to the execution. Therefore there is exception in this case. The ratio of the judgement is not applicable. Therefore, under no circumstances it could be said since no leave was obtained petitioner cannot have any interest in respect of the property or he would not be bound by the result of the litigation. If it could be found that he has direct interest over and in respect of the property in respect of which the litigation is continuing definitely he is a necessary party in this proceeding because any order passed in the proceeding may affect his right, title and interest and no fresh suit would give relief to him. Since the property involved in this case is the property in the lease agreement and the eviction suit relates to the same property, the petitioner having right to execute the decree, to make construction, to induct tenant etc. has every right to be added as party. Moreover, since the suit is not contested and a compromise is taking place keeping the petitioner in dark, the petitioner has every right to be added as party to the proceedings. However, it is also evident that petitioner has direct interest in the property.

20. Therefore, the ratio of the judgement cited by Mr. Roychowdhury reported in A.I.R. 2005 S.C. 2209 (Amit Kumar Shaw and anr. Vs. Farida Khatoon and anr.) clearly applicable. The Hon’ble Apex Court have held that transferee pendente lite can be added as a proper party if his interest in the subject matter of suit is substantial and not just peripheral. On that score the order impugned passed by the learned Court below is not sustainable. So far the other judgements cited by Mr. Bhattacharya and Mr. Mukherjee are concerned, those judgements are also speaking in the same tune. The other Hon’ble Apex Court judgement in case of Razia Begum v. Sahebzadi Anwar Begum & ors. (supra) it was held that in a suit relating to the property in order that the person may be added as party, he should have a direct interest as distinguished from a commercial interest. This three-Judges’ Bench decision of the Hon’ble Apex Court is still a good law and followed in several other cases. Therefore, there is no scope to take a different view from what has been held in case of Razia Begum (supra) and Amit Kr. Shaw (supra).

21. However, the judgement cited by Mr. Bhattacharya and Mr. Mukherjee are on different set of facts. No such judgement was shown to the effect that if a party having right, title and interest over the suit property added in the suit would cause prejudice to the plaintiff or opposite party or it would be against the provisions under Order 1 Rule 10(2) of the Code of Civil Procedure. In my view, the judgement cited by Mr. Bhattacharya and Mr. Mukherjee are of no application in the facts and circumstances of this case. Accordingly, if any adverse order is passed in the proceeding or any compromise is entered upon behind the back of the petitioner, the petitioner would be adversely affected. He has also direct interest in respect of the property being the sub-lessee. Therefore, the order passed by the learned Court below is erroneous in law and as such not sustainable. The order impugned passed by the learned Court below is thus set aside. The petitioner is added as proforma opposite party in the appeal.

…………………

(2015) 119 (3) CWN (Cal) 487

IN THE HIGH COURT AT CALCUTTA

(BEFORE ARIJIT BANERJEE, J.)

Luxmi Township Limited …Petitioner
Vs.
Asif Iqbal Hussain & Ors. …Opposite Party

CO 2669 of 2013; Civil Revisional Jurisdiction; Appellate Side; Heard on: 29.01.2015, 26.02.2015, 19.03.2015, 27.03.2015, 1.04.2015 & 10.04.2015; Judgment on: 11.08.2015

Constitution of India, Article 227; Arbitration and Conciliation Act, 1996, Section 8 – petitioner had proceeded to set up Township (Residential Complex) – obtained sanction from the local development authority – opposite party (1) purchased a flat at the said residential complex – not satisfied with the construction and surrounding area of the flat and filed suit to that effect – petitioner (respondent in the suit) moved application under Section 8 of the Act, 1996 – the Ld. Court below rejected the said application –participation by filling written objection to the suit, does not forfeit right under Section 8 of the Act, 1996 – it cannot be said to be acquiesce in the suit and waive benefit of the arbitration agreement – bifurcation of the cause of action under

Section 8 of the Act, 1996 is not contemplated under the statute.

Ratio decidendi:-
Participation by filling written objection to the suit does not forfeit right under Section 8 of the Arbitration and Conciliation Act, 1996 and cannot be said to be acquiesce in the suit and waive benefit of the arbitration agreement. The bifurcation of the cause of action under Section 8 of the Act, 1996 is not contemplated under the statute.

Observations of the Court:-
Abandonment of a right to seek resolution of dispute as provided in the arbitration agreement must be clearly manifested by the step taken by such party. Appearing in and contesting interlocutory applications cannot be said to be displaying an unambiguous intention to acquiesce in the suit and waive benefit of the arbitration agreement.(para 13)
In Booz Allen and Hamilton Inc.-vs.-SBI Home Finance Ltd. Reported in AIR 2011 SC 2507 wherein the Hon’ble Supreme Court reiterated that filing of a reply by a defendant to an application for temporary injunction/attachment before judgment/appointment of receiver, cannot be considered as submission of a statement on the substance of the dispute as that is done to avoid an interim order being made against him.(para 14)
It would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action that is to say the subject matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject matter of an action brought before a judicial authority is not allowed. Such bifurcation of suit in two parts, one to be decided by the arbitral tribunal and other to be decided by the Civil Court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgements and orders by two different forums.(para 16)
According to the Ld. Judge by filing such written objection the defendant no. 1 had filed its first statement on the substance of the disputes and was thus precluded from maintaining an application under Section 8 of the 1996 Act. In my view, the Ld. Judge erred in doing so and this is an error which appears on the face of the record. It is now well settled that filing a written objection to contest an interlocutory application in the suit does not per se amount to filing the first statement on the substance of the disputes. If any other view is taken, a defendant who has been dragged to court by a plaintiff in breach of an arbitration agreement and is faced with an interlocutory application for injunction or appointment of receiver or the like, would be precluded from contesting such interlocutory application for the fear of losing his right to apply to the court for reference of the disputes to arbitration. This would clearly be unjust and unfair to a defendant.(para 24)
It cannot be said that merely by filing the written objection to the injunction application of the plaintiffs, the defendant no. 1 forfeited its right to apply under Section 8 of the 1996 Act for reference of the disputes to arbitration. Before rejecting a Section 8 application on such a ground, the judicial authority who is in seisin of a lis must come to a finding that by filing his pleading before that authority the defendant has clearly and unambiguously waived his right to seek arbitration. There is no such finding in the order impugned in the present application. The Ld. Judge proceeded on the basis that filing of a written objection to an interlocutory application per se denudes the defendant of his right to apply under Section 8 of the 1996 Act. This is a flagrant error of law as would appear from the judicial authorities discussed above. Such error of law apparent on the face of the record, if not corrected shall cause miscarriage of justice to the petitioner.(para 25)
Held:-
In my opinion, it would sub serve the ends of justice if this court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India corrects such error of law and sends back the matter to the Ld. Court below for fresh consideration in the light of the discussion made herein. Accordingly, this application succeeds. The order under challenge is set aside.

Advocates who appeared in this Case:-
For the Petitioner: Mr. Bhaskar Sen, Mr. Rishav Banerjee
For the opposite party no. 1: Mr. Probal Kumar Mukherjee,
Mr. Anindya Basu, Mr. N. Pal
For the opposite party no. 3: Mr. P.S Basu, Mr. S. Talukdar,

List of cases cited:-
Rashtriya Ispat Nigam Limited Vs. Verma Transport Company, AIR 2006 SC 2800 (relied on)
Food Corporation of India Vs. Yadav Engineer and Contractor, (1982) 2 SCC 499 (relied on)
Booz Allen and Hamilton Inc.Vs. SBI Home Finance Ltd., AIR 2011 SC 2507 (relied on)
Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya, AIR 2003 SC 2252 (relied on)
Biswanath Rungta Vs. Oriental Industrial Engineering Co. Pvt. Ltd., AIR 1975 Cal 222 (relied on)
Rajeev Maheshwari Vs. Indu Kochar, 2011 (3) CHN 680 (referred to)
Chloro Controls (I) P. Ltd. Vs. Severn Trent Water Purification Inc., (2013) 1 SCC 641 (relied on)
The Judgement of the Court was delivered by Arijit Banerjee, J.:-

1. In this revisional application the petitioner challenges a judgment and order dated 28th May, 2013 passed by the Ld. Civil Judge (Senior Division) at Siliguri in TS No. 39 of 2012 (Dr. Asif Iqbal Hossain-vs.-Luxmi Township Limited & Ors.) whereby the Ld. Judge dismissed the application of the petitioner/defendant no. 1 under Section 8 of the Arbitration and Conciliation Act, 1996 thereby refusing to refer the disputes in the suit to arbitration. The material facts of the case are as follows.

2. The petitioner company was granted a lease of 99 years in respect of a land measuring 395 acres approximately for the purpose of setting up a township. Out of the said area, a portion measuring about 10.59 acres was meant for constructing a residential complex. The petitioner company obtained sanction from the Siliguri Jalpaiguri Development Authority being the opposite party no. 3 for construction of the residential complex. Thereafter applications were invited from intending purchasers of residential units/flats by issuing brochures.

3. The opposite party No. 1 purchased a flat in the said residential complex and was put in possession of the flat in January, 2012. The brochures issued by the petitioner as well as the possession letter contained/referred to certain ‘general terms and conditions’.

4. Subsequent to delivery of possession, a registered deed of assignment was executed by the petitioner in favour of the opposite party no. 1. The sanctioned plan of the residential complex showed the place in front of the flat of the opposite party no. 1 as lawn/open ground space.

5. In March 2012 the opposite party no. 1 along with the
predecessor-in-interest of the opposite party nos. 2(i) to 2(iv) filed a suit before the Ld. Civil Judge (Senior Division) at Siliguri being Title Suit No. 39 of 2012 alleging that the aforesaid lawn/ open ground space was being demolished by the petitioner for the purpose of making construction thereon in violation of the sanctioned plan. In the suit the plaintiffs claimed declaration of their right in respect of the common facilities and amenities within the Residency and injunction restraining the defendants from constructing any structure on the area demarcated as ‘front lawn’ in the building plan. The plaintiffs impleaded the petitioner and the opposite party nos. 3 and 4 as defendants in the said suit.

6. In the said suit the plaintiffs filed an application under Order 39 Rules 1 and 2 of the CPC read with Section 151 thereof praying for a temporary injunction restraining the defendants from constructing any structure on the area demarcated as ‘front lawn’ in the sanctioned plan of the Residency.

7. On 6th March, 2012 the Ld. Judge passed an order of temporary injunction as prayed for by the plaintiffs.

8. The petitioner filed an objection to the injunction application of the plaintiffs. By an order dated 17th July, 2012, the Ld. Judge vacated the earlier order of injunction dated 6th March, 2012.

9. On 17th April 2013, the petitioner filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, praying for a direction to refer the parties in TS No. 39 of 2012 to arbitration in terms of an arbitration clause contained in the general terms and conditions of the Residency. It was stated in the said application that the right, title and interest of the plaintiffs in respect of the flats in the Residency and/or the common areas and facilities are governed and controlled by the general terms and conditions of the Residency and Clause 19 thereof provided for resolution of disputes between the parties through arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996.

10. The plaintiffs filed their objection to the said Section 8 application and contended, inter alia, that by filing its objection to the interlocutory application for injunction, the petitioner/defendant no. 1 had submitted their first statement on the substance of disputes and therefore were precluded from maintaining an application under Section 8 of the said Act.

11. The Ld. Court below accepted the submission of the plaintiffs and on that ground alone rejected the application of the petitioner/defendant no. 1 by his judgment and order dated 28th May, 2013. Being aggrieved by the same, the petitioner is before this court by way of the present revisional application.

12. Appearing on behalf of the petitioner Mr. Bhaskar Sen, Ld. Senior Advocate contended that the judgment and order of the Ld. Court below suffers from a flagrant error of law apparent on the face of it. He submitted that the objection filed by the petitioner to the injunction application of the plaintiffs before the court below could not construed to be a statement on the substance of the disputes. By filing an objection to an interlocutory application, a party does not lose its right to seek reference to arbitration in accordance with Section 8 of the Arbitration and Conciliation Act, 1996. In this connection Mr. Sen relied on a decision of the Hon’ble Supreme Court in the case of Rashtriya Ispat Nigam Limited-vs.-Verma Transport Company reported in AIR 2006 SC 2800 wherein the Hon’ble Supreme Court held that filing a reply to the injunction application could not have been a ground to refuse to entertain the plea taken by the appellants that the suit should be referred to arbitral tribunal. The Supreme Court further observed that the expression ‘first statement on the substance of the dispute’ contained in Section 8(1) of the 1996 Act must be contra-distinguished with the expression ‘written statement’. It implies submission of the party to the jurisdiction of the judicial authority. What is, therefore, needed is a finding on the part of the judicial authority that the party has waived his right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the disputes, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction of the court.

13. Mr. Sen also relied on a decision of the Hon’ble Supreme Court in the Case of Food Corporation of India-vs.-Yadav Engineer and Contractor reported in (1982) 2 SCC 499. That was a case where the Supreme Court was dealing with Section 34 of the Arbitration Act, 1940. The Supreme Court observed that before a party to the arbitration agreement is entitled to enforce such agreement by stay of the suit it must disclose its unequivocal intention to abide by the agreement and, therefore, Section 34 obliges such a party to ask for stay of the proceedings before such a party takes any steps which may unequivocally indicate the intention to waive the benefit of the arbitration agreement. Abandonment of a right to seek resolution of dispute as provided in the arbitration agreement must be clearly manifested by the step taken by such party. Appearing in and contesting interlocutory applications cannot be said to be displaying an unambiguous intention to acquiesce in the suit and waive benefit of the arbitration agreement. Any other view would be harsh and in-equitous and contrary to the underlying intendment of the Act.

14. The next decision relied on by Mr. Sen in this connection is that in the case of Booz Allen and Hamilton Inc.-vs.-SBI Home Finance Ltd. Reported in AIR 2011 SC 2507 wherein the Hon’ble Supreme Court reiterated that filing of a reply by a defendant to an application for temporary injunction/attachment before judgment/appointment of receiver, cannot be considered as submission of a statement on the substance of the dispute as that is done to avoid an interim order being made against him.

15. Relying on the aforesaid decisions Ld. Senior Counsel submitted that the Lower Court’s judgment and order impugned in this application ought to be quashed.

16. Appearing for the plaintiff no. 1/opposite party no. 1 Mr. Probal Mukherjee, Ld. Senior Counsel submitted that the arbitration clause relied upon by the petitioner has no manner of application in respect of the cause of action of the suit. He submitted that the dispute which is the subject matter of the suit arises out of violation of the building plan sanctioned by the Siliguri Jalpaiguri Development Authority and as such the said authority has been impleaded as defendant no. 3 in the suit. However, the defendant no. 3 is not a party to the alleged arbitration agreement and as such the disputes forming the subject matter of the suit cannot be referred to arbitration. Any attempt to invoke or give effect to any arbitration clause in the facts and circumstances of the case would result in bifurcation of the suit which is not permissible in law. In this connection, Mr. Mukherjee relied on a decision of the Hon’ble Supreme Court in the case of Sukanya Holdings Pvt. Ltd.-vs.-Jayesh H. Pandya reported in AIR 2003 SC 2252 wherein at paragraphs 15, 16 and 17 of the judgment the Hon’ble Supreme Court observed as follows:
“15. The relevant language used in S. 8 is–“in a matter which is the subject matter of an arbitration agreement.” Court is required to refer the parties to arbitration. Therefore, the suit should be in respect of ‘a matter’ which the parties have agreed to refer and which comes within the ambit of arbitration agreement. Where, however, a suit is commenced “as to a matter” which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, there is no question of application of S. 8. The words ‘a matter’ indicates entire subject matter of the suit should be subject to arbitration agreement.
16. The next question which requires consideration is even if there is no provision for partly referring the dispute to arbitration, whether such a course is possible under Section 8 of the Act? In our view, it would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action that is to say the subject matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject matter of an action brought before a judicial authority is not allowed.
17. Secondly, such bifurcation of suit in two parts, one to be decided by the arbitral tribunal and other to be decided by the Civil Court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgements and orders by two different forums.”
17. Mr. Mukherjee also submitted that it would appear from the tenor of the written objection filed by the defendant no.1 in response to the injunction application of the plaintiffs before the court below that the same was a statement on merits made by the defendant no. 1. No right was reserved in the said written objection to apply under Section 8 of the Arbitration and Conciliation Act and the same was not filed without prejudice to the right of the defendant no.1 to invoke the alleged arbitration clause. Hence, the Ld. Trial Court rightly rejected the application of the defendant no.1 under Section 8 of the Arbitration and Conciliation Act, 1996.

18. Mr. Mukherjee further submitted that in any event Clause no. 19 of the ‘General Terms and Conditions’ which is the purported arbitration clause is applicable only to disputes or differences relating to or arising out of or in connection with the provisional allotment (emphasis added). The disputes forming the subject matter of the suit are neither related to nor arise out of or in connection with the provisional allotment. Subsequent to the provisional allotment, a registered deed of assignment was executed by and between the parties. Such deed of assignment does not contain or refer to any arbitration clause. As such no arbitration agreement exists between the parties and the question of reference of the disputes in the suit to arbitration does not arise.

19. Relying on the aforesaid submissions Mr. Mukherjee prayed for dismissal of the present revisional application.

20. In reply Mr. Sen Ld. Senior Counsel submitted that the point that the suit is beyond the scope of the arbitration agreement inasmuch as the defendant no. 3 in the suit is not a party to the arbitration agreement, was not urged before the Court below. He submitted that in any event, a close scrutiny of the plaint will reveal that the defendant no.3 is neither a necessary nor a proper party to the suit. The defendant no.3 has been impleaded as a party mischievously only to by-pass the arbitration agreement. If the contention of the plaintiff is accepted, any arbitration clause would be avoided by an interested party by adding a third party to the suit who is not a party to the arbitration clause. Such manipulation is not permissible. A perusal of the plaint will show that no relief has been claimed against the defendant no.3. The suit is purely in respect of a dispute between the plaintiffs and the defendant no.1. He submitted that simply because one of the parties to the suit is not a party to the arbitration agreement does not result in the arbitration agreement being rendered infructuous. In this connection, he relied on a decision of this court in the case of Biswanath Rungta-vs.-Oriental Industrial Engineering Co. Pvt. Ltd. Reported in AIR 1975 Cal 222. In the said case a suit was instituted by the company and two of its directors against another director complaining of financial irregularity on the part of that director. The Allahabad Bank was made a part defendant in the suit on the basis of the allegation that the defendant director had opened an account in the Allahabad Bank with moneys belonging to the plaintiff company and was operating such account. The defendant director applied under Section 34 of the Arbitration Act, 1940 for stay of the suit on the basis of an arbitration clause in the Articles of Association of the company which provided for resolution of disputes by and between the company and its directors through the process of arbitration. The plaintiffs resisted such application on the basis that the defendant Allahabad Bank was not a party to the arbitration agreement. It was held that the Bank was not concerned with the dispute in the suit and was not a necessary party in the suit. By impleading the Bank it could not be said that disputes have arisen which were substantial in nature involving a third party who is not a party to the arbitration agreement. Presence of Allahabad Bank thus did not debar the right of the defendant for stay of the suit under Section 34 of the Arbitration Act, 1940.

21. Mr. Sen also relied on a decision of this court in the case of Rajeev Maheshwari-vs.-Indu Kochar reported in 2011 (3) CHN 680 wherein this court held that if a person who is not a party to an arbitration agreement is impleaded in an action, the judicial authority should scrutinize the basis of the claim against such person on an application under Section 8 of the 1996 Act. If the cause of action of the suitor against such party who is not a party to the arbitration agreement flows from the right of the suitor against a party to the arbitration agreement, the reference sought should not be denied. This follows from the scheme of the 1996 Act and the underlying thought behind it of giving primacy to the arbitration agreement.

22. Mr. Sen finally submitted that while dealing with Section 45 of the Arbitration and Conciliation Act, 1996, the Supreme Court has observed that in exceptional circumstances even a non-party to an arbitration agreement can be referred to arbitration, which shows the tendency of the court to uphold arbitration agreements. In this connection, Mr. Sen relied on a decision of the Supreme Court in the case of Chloro Controls (I) P. Ltd.-vs.-Severn Trent Water Purification Inc. reported in (2013) 1 SCC 641 where in the Hon’ble Supreme Court observed that even a non-signatory or a third party can be subjected to arbitration without his consent though it may only be in exceptional circumstances. Even parties who are not signatories to any arbitration agreement can pray for or be referred to arbitration provided they satisfy certain prerequisites e.g. when various agreements constitute a composite transaction, the court can refer disputes between signatory and non-signatory parties to arbitration.

23. I have considered the rival contentions of the parties.
24. The Ld. Court below dismissed the application under Section 8 of the Arbitration and Conciliation Act, 1996 filed by the defendant no.1 solely on the ground that the defendant no.1 had filed a written objection to the injunction application filed by the plaintiffs under Order 39 Rules 1 and 2 of the Code of Civil Procedure. According to the Ld. Judge by filing such written objection the defendant no.1 had filed its first statement on the substance of the disputes and was thus precluded from maintaining an application under Section 8 of the 1996 Act. In my view, the Ld. Judge erred in doing so and this is an error which appears on the face of the record. It is now well settled that filing a written objection to contest an interlocutory application in the suit does not per se amount to filing the first statement on the substance of the disputes. If any other view is taken, a defendant who has been dragged to court by a plaintiff in breach of an arbitration agreement and is faced with an interlocutory application for injunction or appointment of receiver or the like, would be precluded from contesting such interlocutory application for the fear of losing his right to apply to the court for reference of the disputes to arbitration. This would clearly be unjust and unfair to a defendant. It often happens that a party approaches a court of law in breach of an arbitration agreement and obtains an ex parte order of injunction or appointment of receiver which has devastating effect on the business or other proprietary rights of the defendant. In such cases the defendant should be free to apply for vacating or modification of the order and to file necessary pleadings in aid thereof. By doing so, the defendant cannot be said to have given up his right to enforce the arbitration agreement.

25. Opposing a prayer for interim injunction does not attract the restriction contained in Section 8(1) of the 1996 Act. Disclosure of a defence for the purpose of opposing a prayer for interlocutory injunction would not necessarily mean that the defendant has filed his first statement on the substance of the disputes. Waiver of a right on the part of the defendant to enforce the arbitration agreement must be gathered from the facts and circumstances in each case. Thus it cannot be said that merely by filing the written objection to the injunction application of the plaintiffs, the defendant no.1 forfeited its right to apply under Section 8 of the 1996 Act for reference of the disputes to arbitration. Before rejecting a Section 8 application on such a ground, the judicial authority who is in seisin of a lis must come to a finding that by filing his pleading before that authority the defendant has clearly and unambiguously waived his right to seek arbitration. There is no such finding in the order impugned in the present application. The Ld. Judge proceeded on the basis that filing of a written objection to an interlocutory application per se denudes the defendant of his right to apply under Section 8 of the 1996 Act. This is a flagrant error of law as would appear from the judicial authorities discussed above. Such error of law apparent on the face of the record, if not corrected shall cause miscarriage of justice to the petitioner. In my opinion, it would sub-serve the ends of justice if this court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India corrects such error of law and sends back the matter to the Ld. Court below for fresh consideration in the light of the discussion made herein.

26. Accordingly, this application succeeds. The order under challenge is set aside. The matter is remanded back to the Ld. Court below for consideration afresh. The Ld. Court below shall hear the application under Section 8 of the Arbitration and Conciliation Act, 1996 afresh and decide the same by a reasoned order in accordance with law and in the light of the discussion made in this order.

27. I make it clear that I have not entered into the merits of the other points urged by the parties before me including the

point as to whether or not the Section 8 application should fail because of some of the defendants in the suit not being parties to the arbitration agreement as also the point of existence or otherwise of a valid arbitration agreement between the parties. The Ld. Court below will be at liberty to consider these points freely and decide the same in accordance with law. The entire exercise will be completed by the Ld. Court below within three months from the date of communication of this order.

28. This revisional application is accordingly disposed of.

…………………….

(2015) 119 (2) CWN (Cal) 502

IN THE HIGH COURT OF CALCUTTA

(BEFORE BISWANATH SOMADDER, J.)

Manas Sarkar …Petitioner
Vs.
West Bengal National Volunteer
Force Directorate & Ors. …Respondents

W. P. No.19241 (W) of 2015; Appellate Side; Judgment on: 17.08.2015

Constitution of India, Article 226 – compassionate appointment –– petitioner made request for appointment in compassionate ground - petitioner’s father was declared “medically unfit” leaving 1 & ½ years of service– two medical boards were construed – Sub-Divisional Hospital declared as “medically unfit” whereas R.G. Kar Medical College, Kolkata held “to be completely and permanently incapacitated for further service” – “medically unfit” means he may be fit subsequently but “permanently incapacitated” denotes permanently retired from the service - at the time of permanent retirement of Government employee at least 2 years of service left to consider for appointment on compassionate ground – no reasons to interfere with the decision of the authority under Article 226 of the Constitution of India.

Ratio decidendi:-
“Medically unfit” means one may be fit subsequently but “permanently incapacitated” denotes permanently retired from the service. At the time of permanent retirement of Government employee at least 2 years of service left to consider for appointment on compassionate ground.

Observations of the Court:-
A person who is “Medically Unfit” today can become “Medically Fit” tomorrow and as such, eligible for further service. However, a person who is declared to be “permanently incapacitated” by a competent Medical Board will be deemed to remain so for further service, permanently. In the first scenario, the person’s medical condition is reversible, while in case of the latter, it is irreversible. The term or the expression, “permanent incapacitation” is the bench-mark consistently used for providing compassionate employment on medical ground.(para 5)
The term, “Medically Unfit” is never used in such a context. The rationale behind this can be easily explained by way of an illustration. If compassionate appointment is considered to be given to someone on medical ground merely because that person was a dependent of an employee who has become “Medically Unfit”–but not “permanently incapacitated”–there is every possibility of that “Medically Unfit” employee coming back on a later date with a medical certificate declaring that he is now “Medically Fit” for the purpose of seeking re-engagement in service. It will invariably result in a total chaos. This is precisely the reason why the term, “permanently incapacitated” is generally used in the context of an employee be retired due to a medical condition, which condition, necessarily, has to be of a permanent nature.(para 6)

Held:-
There was no question on the part of the concerned authority to rely upon the earlier medical certificate dated 22nd September, 2011, issued by the Sub-Divisional Hospital at Bongaon. The reasons provided in the impugned decision rendered by the Assistant Secretary to the Government of West Bengal–as reproduced hereinbefore–are cogent enough and in accordance with law. As such, the decision does not warrant any interference of this Court under Article 226 of the Constitution of India.

Advocates who appeared in this Case:-
Mr. Anjan Bhattacharya ….for the petitioner

The Judgement of the Court was delivered by Biswanath Somadder, J.:-

1. Affidavit of service filed in Court today be kept on record.

2. Having heard the learned advocate for the petitioner and upon perusing the instant application, it appears that subject matter of challenge in the instant writ petition is an order dated 16th June, 2015, passed by the Assistant Secretary to the Government of West Bengal, Department of Civil Defence, whereby the prayer for appointment on compassionate ground in favour of the writ petitioner due to medical ground of his father was rejected. The ground for rejection has been clearly stated in the said letter dated 16th June, 2015, addressed to the State Commandant, WBNVF Directorate, Kalyani, Nadia, which is reproduced hereinbelo“In inviting a reference to your Memo No.20A–7/1179, dt. 23.4.15 on the subject noted above, I am directed to state that on careful observation it is found that the proposal of offering employment assistance on compassionate ground in favour of Manas Sarkar does not satisfy the condition of having at least 2 years of service left at the time of premature retirement of the Government employee as per Labour Department and in the particular proposal the deceased Government employee, late Mantu Sarkar Ex-Agragami, WBNVF 1st (BK) Bn. Durgapur had only 1 and ½ years’ service left in his account. Hence the instant proposal is rejected in the light of Labour Deptt’s Notification No. 30-Emp. Dt. 3.4.2008, No.114-Emp Dt.14.8.2008 and No.251 dt. 3.12.2013.”

3. Learned advocate for the petitioner submits that the rejection of his client’s prayer for compassionate appointment is based on a certificate issued by the Medical Board, which was constituted on 19th March, 2012, to examine the petitioner’s father. The Medical Board examined the petitioner’s father and came to a conclusion that he was to be completely and permanently incapacitated for further service. According to the learned advocate, the petitioner’s father was prematurely retired on the date of issuance of the medical certificate, i. e., 19th March, 2012, from which date, if calculated, the petitioner’s father had only 1 and ½ years’ service left in his account. He, however, submits that his client’s father was earlier examined by a Medical Board, which was constituted on 22nd September, 2011, at the Sub-Divisional Hospital, situated in Bongaon, North 24-Parganas. That Medical Board had declared the petitioner’s father to be “Medically Unfit”, at which point of time, he had more than two years of service. Learned advocate submits that ignoring the earlier certificate of the Medical Board dated 22nd September, 2011, the concerned authority had wrongly relied upon the latter medical certificate, which was issued on 19th March, 2012 in order to come to a conclusion that at the time of premature retirement, the concerned Government employee (being the petitioner’s father) had only one and a half years of service left and thus did not satisfy the condition of having at least two years of service left at the time of premature retirement.

4. A careful perusal of the two certificates issued by the two different Medical Boards, one dated 22nd September, 2011, and the other dated 19th March, 2012, however, reveals a fundamental difference between the two. Whereas, in respect of the first medical certificate issued by the Sub-Divisional Hospital at Bongaon, the petitioner’s father was declared to be “Medically Unfit” due to certain reasons as stated in the medical report, in respect of the latter medical certificate dated 19th March, 2012, issued by the Medical Board constituted at R.G. Kar Medical College & Hospital, it was held that the petitioner’s father was “to be completely and permanently incapacitated for further service…….”

5. A person who is “Medically Unfit” today can become “Medically Fit” tomorrow and as such, eligible for further service. However, a person who is declared to be “permanently incapacitated” by a competent Medical Board will be deemed to remain so for further service, permanently. In the first scenario, the person’s medical condition is reversible, while in case of the latter, it is irreversible. The term or the expression, “permanent incapacitation” is the bench-mark consistently used for providing compassionate employment on medical ground.

6. The term, “Medically Unfit” is never used in such a context. The rationale behind this can be easily explained by way of an illustration. If compassionate appointment is considered to be given to someone on medical ground merely because that person was a dependent of an employee who has become “Medically Unfit”–but not “permanently incapacitated”–there is every possibility of that “Medically Unfit” employee coming back on a later date with a medical certificate declaring that he is now “Medically Fit” for the purpose of seeking re-engagement in service. It will invariably result in a total chaos. This is precisely the reason why the term, “permanently incapacitated” is generally used in the context of an employee be retired due to a medical condition, which condition, necessarily, has to be of a permanent nature.

7. In such facts and circumstances, there was no question on the part of the concerned authority to rely upon the earlier medical certificate dated 22nd September, 2011, issued by the Sub-Divisional Hospital at Bongaon. The reasons provided in the impugned decision rendered by the Assistant Secretary to the Government of West Bengal as reproduced hereinbefore are cogent enough and in accordance with law. As such, the decision does not warrant any interference of this Court under Article 226 of the Constitution of India. The writ petition is, therefore, liable to be dismissed and is accordingly dismissed.

………………….

(2015) 119 (2) CWN (Cal) 507

IN THE HIGH COURT AT CALCUTTA

(BEFORE I.P. MUKERJI, J.)

M/s. Hazra Filling Station …Petitioner
Vs.
Indian Oil Corporation
Limited and anr. …Respondents

W.P. No. 1618 (W) of 2012; Constitutional Writ Jurisdiction; Appellate Side; Judgement on: 17.08.2015

Constitution of India, Article 226 – alternative redressal forum - Land of the petrol pump owned by the petitioner – Indian Oil Corporation (IOL) was the lessee in respect of the petrol pump – dealership agreement was executed between the petitioner and IOL separately – the breach of the contract was due to wrongful use of the machines by the petitioner – dealership was terminated by IOL – title suit was initiated against IOL for declaration that petitioner was the owner of the property – nobody disputed that there was an arbitration clause – exchange of affidavits were completed - referring to an alternate forum like arbitration at this stage is an injustice to the parties – no damage claimed by either of the parties - the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion - in an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction - no need to refer to parties to arbitration.

Ratio decidendi:-
The rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction.

Observations of the Court:-
The High Court may still exercise its writ jurisdiction in at least three contingencies: (i)where the writ petition seeks enforcement of any of the Fundaments Rights; (ii)where there is failure of principles of natural justice or, (iii)where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged. [See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 11]. The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners’ dealership which is their bread and butter came to be terminated irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings.(para 23)
After exchange of affidavits, the writ petitioner should not be relegated to an alternative forum. If the writ petitioner had to be relegated to an alternative forum like arbitration it had to be done at the threshold, before filing of affidavits. It is injustice to a party, referring to him of an alternative forum, after he has been asked to contest the case on merits on affidavits. Still, if upon filing of affidavits, it appears to the Court, that the facts are much more disputed than what was foreseen at the motion stage or that the facts are so special and not known to be so at the initial stage, the writ petitioner can be relegated to an alternative forum. That is not the case here.(para 24)
The case as made out in the writ petition is quite different from that in the suit pending in the Court below. The whole question here is whether the termination of the dealership by the letter of the Corporation dated 16th December, 2011 was wrongful or not. This dispute has nothing to do directly with the suit pending in the court below. That is not an eviction suit. It was filed prior to expiry of the notice period of the section 106 of the Transfer of Property Act, 1882 notice issued by the petitioner to the Corporation. In the plaint reliefs have been sought to restrain the respondent corporation from parting with possession of the property to a third party.(para 25)
In the writ application the petitioner has sought for orders that the notice of termination dated 16th December, 2011 be stayed. In other words, he wants the revival of the relationship between himself and the Corporation. In the affidavit-in-opposition to the writ application the respondent corporation has not asked for any damages for breach of the agreement by the petitioner. Usually when there is termination of the contract by one party due to breach on the part of the other party there is a claim for damages.(para 26)
In fact the above facts are so glaring, that in my opinion the onus was on the writ petitioner to prove that he was not guilty. He has not discharged that onus. It is very difficult to accept that the equipment’s were damaged by accident. The incidents would raise a strong suspicion in the mind of any reasonable person that they were engineered by the petitioner to avoid testing of the dispensing units by the officials of the Indian Oil Corporation on 27th September, 2011. I have been able to come to such a finding on affidavit evidence. Acts of breach of contract, by the petitioner, are written in bold on the face of the records. There is no need, in my opinion, to refer the parties to arbitration.(para 27)

Held:-
In my opinion Indian Oil Corporation has very rightly terminated the contract. Only this issue has been raised and answered in this writ. All other issues between the parties are open. In those circumstances this writ application is dismissed.

Advocates who appeared in this Case:-
For the petitioners: Mr. Kishore Dutta, Mr. Jayanta Das, Mr. Soumitra Ghosh
For the Respondents: Mr. Soumendra Nath Mukherjee, Mr. Manawendra Nath Yadav, Ms. Saswati Chatterjee

List of cases cited:-
Midnapur Zamindary Co. Ltd. Vs. Naresh Narayan Roy, AIR 1924 PC 144 (relied on)
Lallu Yeshwant Singh Vs. Rao Jagdish Singh and Others, AIR 1968 SC 620 (relied on)
State of West Bengal and Others Vs. Vishunarayan & Associates (P) Ltd. and Another, (2002) 4 SCC 134 (relied on)
Krishna Ram Mahale Vs. Mrs. Shobha Venkat Rao, (1989) 4 SCC 131 (relied on)
R Vs. Layland Magistrates, ex parte Hawtho, (1979) 1 All. E.R. 209 (referred to)
R Vs. Blundeston Prison Board of Visitors, exparte Fox-Taylor (1982) 1 All. E.R. 646 (referred to)
Empire Jute Company Limited and Others Vs. Jute Corporation of India Limited And Another, (2007) 14 SCC 680 (relied on)
Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172 (relied on)
Rajasthan State Industrial Development and Investment Corporation and another Vs. Diamond & Gem Development Corporation Limited and another, (2013) 5 SCC 470 (relied on)
Hindustan Petroleum Corpn. Ltd Vs. Pinkcity Midway Petroleums, (2003) 6 SCC 503 (referred to)
Indian Oil Corporation Limited Vs. Amritsar Gas Service and Others, (1991) 1 SCC 533 (referred to)
Harbanslal Sahnia Vs. Indian Oil Corporation Ltd., AIR 2003 SCC 2120 (relied on)
Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others, (1998) 8 SCC 11 (relied on)

The Judgement of the Court was delivered by I.P. MUKERJI, J.:-

1. Sutanu Hazra is the proprietor of Hazra Filling Station. It operates from a place at Amta Road, Baltikuri (Kalitala), Dasnagar, Howrah in West Bengal. This filling station used to deal in the products of Indian Oil Corporation (hereinafter referred to as “the Corporation”).

2. The writ petitioner and the Corporation had a special legal
relationship. The land where the filling station is situated is owned by the writ petitioner. The Corporation was the lessee. On 27th December, 2005 the parties entered into a dealership agreement where under the writ petitioner was appointed as a dealer for the retail sale of the products of the Corporation.

3. In this writ the writ petitioner challenges the termination of this dealership made by the Corporation by its letter dated 16th December, 2011. Now, I will describe the facts in some detail.

4. Certain clauses in the dealership agreement are in my opinion very important. First of all, the recital clause, as was the agreement, was in standard form. It stipulated that the Corporation would have some interest in the land and in the “super structure thereon” as described in the first schedule. Now, this first schedule denoted the entire land of 8 cottahs 15 chittaks and 22 sq.ft., owned by the petitioner in the aforesaid place together with “all the buildings, structure other movable and immovable property assets thereon”. The recital affirmed that the Corporation would install in the property “apparatus and equipment’s mentioned in schedule II of the agreement.” Now the items mentioned in schedule II of the agreement were the usual items that were to be found in a filling station. Apart from the usual things like dispensing pumps, air compressors, car wash equipment’s, belts, handles, keys, meters, lubricant machines, the premises had a 20/15 KL tank.

5. Clause 15 gave power to the Corporation to stop or suspend supplies to the dealer. This power was to be exercised by the General Manager of the Corporation at Kolkata. Clause 45 stipulated that it had the power to terminate the agreement on the happening of the events mentioned therein. Sub-clause (k) provided that such right would be exercised if the dealer “tampered with the quality of the products.” Under clause 42 the dealer was to adhere to all laws and regulations and the directions of the officers of the Corporation. The agreement also contains an arbitration clause, which is clause 61. It is inserted hereunder.
“********************61(a)Any dispute or difference of any nature whatsoever, any claim, cross-claim, counterclaim
or set-off or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation who may either himself act as the Arbitrator or nominate some other officer of the Corporation to act as the Arbitrator, the Dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator is an officer of the Corporation.
*******************(f)The award of the Arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder for the time being in force shall apply to the arbitration proceedings under this clause.
(g)The award shall be made in writing and published by the Arbitrator within two years after entering upon the reference or within such extended time not exceeding one further year as the parties shall by writing agree. The parties hereto shall be deemed to have irrevocably given their consent to the Arbitrator to make and publish the award within the period referred to hereinabove and shall not be entitled to raise any objection protect thereto under any circumstances whatsoever.”

6. The facts are like this:
On 24th September, 2010 the anti-adulteration cell of the Corporation made an inspection of the said premises. They proceeded to test the dispensing units with a 5 litre measure. One nozzle was initially tested. When 5 litres was required to be completely discharged, it was found that the quantity actually delivered was short by 90 ml. This test was conducted with the help of normal electricity supply. All of a sudden there was a power cut. According to the Corporation the supervisor entered the sales building and switched off the power supply. Power supply was resumed through a generator. At this time it was found that all the dispensing units were recording the discharge correctly.

7. The inspection team wanted to seize the control card and the totaliser pulsar unit of the first dispensing unit checked. Since the machine had been sealed by the Weights and Measures Inspector, the exercise could only be done after opening of the seals by the Weights and Measures Department. The inspector insisted over telephone that the seal should be broken in his presence. According to the minutes the inspection team waited from 12.30 pm to 8.30 pm waiting for the inspector but he did not arrive. It left after affixing the plastic seals and holograms on the control card, totaliser unit and nozzle etc. This was in anticipation of the visit by the Weights and Measures Department early the following week. These parts could be checked after opening the seals by the Weights and Measures Department. In the minutes itself a direction was given to the writ petitioner to safeguard the plastic seals and holograms. He was warned that tampering with the seals would be sternly dealt with. The minutes were signed by the writ petitioner as well as by the representatives of the Corporation.

8. 25th and 26th September, 2010 were Saturday and Sunday. The officials of the Weights and the Measurers department would only be available on Monday, 27th September, 2010. Now, in the intervening night between the 26 and 27th September, 2010 the writ petitioner reported an incident. It was said that a vehicle had collided with the dispensing unit, breaking the seal and completely damaging the unit. The Corporation did not take this lightly. They believed that under the agreement the writ petitioner had every duty to properly safeguard the installation, particularly when one of the dispensing units had been sealed by the Corporation officials and was to be tested by the Weights and Measures department the following Monday on 27th September, 2010.

9. Although a FIR has been lodged by the petitioner informing the police of the so called accident, according to the Corporation this damage was done “with an oblique aim and intention”. On 28th March, 2011 the Corporation issued a show cause notice to the writ petitioner asking him to show cause within fifteen days as to why the dealership agreement should not be terminated. By a letter dated 14th April, 2011 the writ petitioner replied to it. It was a very detailed reply full of technical information, reciting the terms of the contract rules and regulations etc.

10. Inter alia, the following points were raised in the reply to the show cause notice. The writ petitioner had installed a close circuit television in the premises. But since a few days prior to the visit of the inspection team the device was not working. The Gram Rakshi Bahini was employed as night to guards. Fuel was supplied to the Das Nagar Inspector in-charge for proper patrolling. A “police link siren” had been installed and was operative. Two persons who had been deputed to guard the installation were asleep at the time of the incident.

11. Mr. Mookerji, learned senior advocate appearing for the
respondent Corporation clarified during hearing of this application that the adjudication of the show cause notice was confined to the issue of alleged failure of the writ petitioner in securing and guarding the premises and the installations therein, after the inspection made on 24th September, 2010. By a supplementary affidavit affirmed by the said Corporation on 1st June, 2015 the Corporation has brought on record a letter dated 3rd August, 2013 by the writ petitioner to them. It was purported to be a notice under section 106 of the Transfer of Property Act. It stated that with the end of September, 2013 the tenancy would stand determined. In or about September, 2013 before expiry of the notice period, the writ petitioner instituted a title suit (Title Suit No.194 of 2013) in the learned 6th Court of the learned Civil Judge (Jr. Division) Howrah (Sadar) against the Corporation, claiming a declaration that the they were the owner of the property, an injunction restraining the defendant from letting out the suit property to any third party. In paragraph-5 of the plaint it was pleaded that the corporation / plaintiff was not filing an eviction suit as the notice period had not elapsed. Even after September, 2013 the plaintiff has not filed any suit for eviction of the defendant. Neither is any reply of the Corporation to the said notice on record.

12. Now I will deal with the points raised by the writ petitioner, one by one. First of all, Mr. Kishore Dutta learned senior advocate for the petitioner submitted that his client could not be dispossessed without the authority of law, by the grant of licence by the Corporation to a third party. To my mind, there is no dispute with the proposition of law which he tried to advance in the four cases cited by him, Midnapur Zamindary Co. Ltd. Vs. Naresh Narayan Roy reported in AIR 1924 PC 144, Lallu Yeshwant Singh Vs. Rao Jagdish Singh and Others reported in AIR 1968 SC 620, State of West Bengal and Others Vs. Vishunarayan & Associates (P) Ltd. and Another reported in (2002) 4 SCC 134 and Krishna Ram Mahale Vs. Mrs. Shobha Venkat Rao reported in (1989) 4 SCC 131. A person in possession of land which includes even a licensee cannot be evicted without the due process of law. Mr. Dutta assumed that after grant of lease of his client’s property to the Corporation, his client was operating a filling station as a licensee under the lessee. This relationship of licensor and licensee remained even after determination of the lease by the Section 106 notice dated 3rd August, 2013.

13. Mr. Dutta attacked the decision of the Corporation dated 16th December, 2011 on several grounds. They are as follows:
The decision is perverse in as much as the reply of the writ petitioner was not considered. The decision was without jurisdiction. It was made by the Senior Divisional Retail Sales Manager, Haldia Divisional Office on behalf of the Corporation. It ought to have been made by the General Manager of the Corporation at Calcutta under clause 15 of the agreement. Adjudication was made of charges not included in the show cause notice. The findings of the Corporation regarding “fiddling” with the dispensing unit were sent for reconfirmation to Mumbai. The Mumbai test report, which is said to be favourable to the petitioner in as much as it tends to hold that there was no tampering with the dispensing machine and hence no short fall in oil discharge, was not made available to him. The petitioner had no obligation to maintain the dispensing unit. Tampering of the dispensing unit had not been proved.

14. Most of these points were taken at the bar. I do not find them either in the body or in the grounds of the writ petition. The substantial grounds which were taken in the writ as well as Mr. Dutta in his submissions were that the machines were not malfunctioning. The Mumbai tests report was not made available to the writ petitioner. The penalty of termination of the dealership was disproportionate. The Corporation had accepted the accident theory. I will deal with all points, including those raised at the bar. First of all, I will deal with the point that the officer issuing the letter of termination had no authority to do so. Clause 15 was placed before me by Mr. Dutta to suggest that only the General Manager, Kolkata had this power. As rightly brought to my notice by Mr. Mookerji, learned advocate for the Corporation, clause-15 has to be juxtaposed with clause-45. Clause 15 and 45 are inserted below ********************************************
15. Notwithstanding anything to the contrary herein contained the Corporation shall be at liberty upon breach by the Dealer of any covenant in the Agreement to stop and/or suspend forthwith all supplies to the Dealer and/or sales from the premises by the Dealer for such period or periods as the Corporation may this fit, and such right of stoppage and/or suspension of supplies shall be in addition to and/or without prejudice to any other right or remedy of the Corporation under the Agreement or Law. For the purpose of this clause, the General Manager of the Corporation for the time being at Kolkata shall be the sole judge as to whether a breach of covenant of this agreement has been committed by the Dealer. The Dealer shall not be entitled to claim any compensation or damage from the Corporation or account of any such stoppage and/or suspension of supplies.
***********************************************
45. Notwithstanding anything to the contrary herein contained, the Corporation shall at liberty at its entire discretion to terminate this Agreement forthwith upon or at any time after the happening of any of the following events namely.
a)If the Dealer shall commit a breach or default of any of the terms, conditions, covenants and stipulations contained in this Agreement. ***********************************”

15. Mr. Mookerji was absolutely right when he submitted that clause-15 was exercised in case of an emergent situation. It starts with the words “notwithstanding anything to the contrary”. It goes on to say that in case of a breach of contract by the dealer, the General Manager at Kolkata may forthwith suspended all supplies to the dealer. Clause-45 deals with the action in case of a usual breach of contract by the dealer, where the Corporation has the power to terminate the agreement. In the exercise of this ordinary power of termination under clause-45, no officer is designated. This power can be used as has been done in this case by any authorised officer of the Corporation. Therefore, the first point raised by Mr. Dutta fails.

16. The second point raised by Mr. Dutta which I will now deal with relates to the effect of the Corporation not making available the test report of Mumbai. According to learned counsel, the test report was in favour of the writ petitioner and if that was made available to him by the Corporation, he would have produced it during the adjudication. If that report was gone into by the adjudicating authority, there was every likelihood of the petitioner being exonerated from the charges of fiddling or tampering with the apparatus. I was shown two English Decisions, R v Layland Magistrates, ex parte Hawthon (1979) 1 All. E.R. 209 and R v Blundeston Prison Board of Visitors, exparte Fox-Taylor (1982) 1 All. E.R. 646. In first of those cases the Court recognised a duty on the prosecution to inform the defence of any witness who was acting against the prosecution, so that the accused may produce that witness at the trial. The accused had not been so informed. The court held that the trial had been vitiated and there was a breach of the principles of natural justice.

17. First of all, these decisions relate to a criminal trial or a statutory enquiry, which is not the case here. Secondly, I do not think that there is any obligation on the part of the prosecution, in this country to disclose to the accused the potential witnesses they were interrogating and supply the names of anti-prosecution witnesses to the defence. Far less is the duty of the prosecution in this country to hand over or give information about witnesses to the accused, particularly when the witness was likely to give evidence against the prosecution and for the defence. It is for each party to produce his evidence. It is no part of the duty of the other side to help the adversary to procure a witness or evidence. Thirdly, the Court was adjudicating the consideration of a show cause notice issued by the Corporation as to why the dealership licence in favour of the petitioner should not be revoked. In this type of cases such strict rules of evidence or the requirement of rigid compliance with the principles of natural justice do not apply. It is only necessary for the Court to ascertain whether the recipient of the show cause notice was given an opportunity to meet the case. It is also necessary to determine whether he was allowed to adduce evidence and whether he was given fair hearing before the decision was made. Of course, there is no denial that the Court is empowered to scrutinize the correctness of the decision actually made.

18. The second case, in my opinion, has no application. Enquiry by the Board of visitors was inquisitorial. The question was whether the prison authorities were in breach of their duty by not informing the board about a potential witness. Here as discussed hereinafter, the Mumbai report was not relied upon in adjudication.

19. Mr. Mookerji, learned Senior Advocate for the Corporation, submitted and I think very rightly that the ground on which the writ petitioner was adjudged guilty was that he failed to take adequate care of the premises and installations at the premises. After the Corporation finally sealed the installations in the petrol pump on 24th September 2011, the writ petitioner was found guilty of gross negligence in safeguarding the premises. It is for this reason that his license was terminated. The Mumbai report was not relied upon. In those circumstances Mr. Mookerji was absolutely right when he submitted that if a particular piece of evidence was not relied upon for the purpose of adjudication, it really did not matter whether that piece of evidence was disclosed to the adversary or not.

20. In my opinion neither could it be said that there was breach of the principles of natural justice, because if a particular document was not relied upon in adjudication, the prosecutor was under no obligation to furnish details of or a copy of the said document to the alleged delinquent. Neither do I think that the petitioner was not given notice of any charge against him that was considered in the adjudication. Even if the adjudication order is considered through the lens of an administrative law lawyer it cannot be said that it was perverse. Neither is the order of termination disproportionate.