PETITIONER: SHIV SAGAR TIWARI Vs. RESPONDENT: UNION OF INDIA & ORS. DATE OF JUDGMENT: 08/11/1996 BENCH: KULDIP SINGH, B.L. HANSARIA ACT: HEADNOTE: JUDGMENT:
O R D E R
One of the issues for consideration before this Court
in this public interest petition is the validity of the
allotments of 52 shops/stalls made by Smt. Shiela Kaul the
then minister for Housing land Urban development, Government
of India.
While monitoring this case, this court has passed
various interim orders from time to time. It would be useful
to quote three such orders. The relevant part of the order
dated April 17, 1996 is as under:
“The material placed before us inter alia, discloses
that 41 shops\stalls allotted on July 3, 1995 were in total
contravention of the rules/policy approved situated in Lodhi
Road Complex – I & II. Hanuman Road Market. Baba Kharak
Singh Marg market, DIZ area Market, and Pleasure Garden near
Lajpat Nagar Market. The material on the record further
shows that the said 43 shops/stalls were allotted by Smt.
shiela Kaul without issuing any public notice/inviting
applications from the eligible persons which was in
violation of the policy formulated by her on December 26,
1994. The material also discloses that orders of allotment
in respect of said 41 shops/stalls were passed by Smt.
Shiela Kaul on June 7, 1995 (5 shops and 36 stalls). The
material further discloses that all the six shops have been
allotted by her to her own relations/employees/domestic
servants of her family members and family friends. She has
allotted two shops to her two grand-sons, one shop to the
maid servant of her son. Shri Vikram Kaul, who is residing
in Dubai. One shop to Handloom Manager of the firm, owned by
her son-in-law and another shop to a close friend. One shop
has been allotted to the nephew of her minister of state,
Shri P.K. Thungon. It is further on the record that while
making allotments in respect of stalls she has allotted most
of the stalls to the relations, friends of her personal
staff and officials of Directorate of Estate. The details
and the names of Estate. The details and the names of
allottees and their relationship have also been placed on
the record.”
The relevant part of the order dated July 19, 1996 is
as under:
“Mr. N N. Singh, Superintendent of Police, CBI, New
Delhi has placed on record interim report No. 3 dated June
17, 1996 and Interim Report No. 4 dated July separate
preliminary enquiry was registered against Smt. Shiela Kaul
and others in the matters of allotment of shops/stalls made
by her on June 7,1996 and July 3, 1995 in favour of her
close relations/friends of her personal Estate. According to
the report, the preliminary enquiry, prima facie,
establishes that Smt. Shiela Kaul had abused her official
position as the Minister for Urban Development and she had
entered into a criminal conspiracy with some of the
acquaintances and her personal staff, pursuant to which she
in abuse of her official position made these allotments and
caused wrongful loss to the Government by effecting
allotments on economical licence fees basis without inviting
any tender or by issuing public notice for inviting the
response from the general public from the point of view of
earning maximum revenue for the Government. A regular case
under Section 120-B, 420, 468/471 IPC and Section 13(2) read
with 13(1) (d) of the Prevention of Corruption Act, 1988,
has been registered against Shiela Kaul and her additional
Private Secretary Rajan S. Lala and others.
The order dated September 6, 1996 to the extent
relevant is as under:
“Pursuant to this Court`s order dated July 19, 1996,
the Director of Estates has filed its report along with an
affidavit regarding the shops and stalls allotted by Smt.
Shiela Kaul. It is stated that from 1992 onwards 52 shops
have ben sanctioned by the then Minister for Urban
Development (Smt. Shiela Kaul) out of which 7 shops were
allotted by Smt. Shiela Kaul before she herself had approved
the policy in 1994 for disposal of the shops on tender
basis. It is further stated in the affidavit that 45 shops
were allotted by Smt. Shiela Kaul after 1994 in violation of
the policy framed by the Ministry.
The gist of the objections filed by the various
allottees have been enclosed along with the affidavit.
Before any action is taken, we consider it appropriate to
give an opportunity of hearing to all these persons. We,
therefore, direct the Director of estates to issue
individual notices to these 42 persons to be personally
present in this Court or through their counsel to argue
their point of view in respect of their objections on 27th
September, 1996 at 2 PM. They shall show cause to this Court
why their allotment be not cancelled and why they be not
burdened with damages.”
This Court by the judgment dated October 11, 1996 has
come to the conclusion that the allotments of the said 52
shops/stalls made by Smt. Shiela Kaul were arbitrary,
discriminatory, unconstitutional and as such were liable to
be quashed. This Court quashed the said allotments on the
following reasoning:
“The CBI has since inquired into the matter in some
detail and has by now submitted 4 Interim Reports. According
to the CBI, orders of allotment in respect of the
shops/stalls in question were passed by Smt. Shiela Kaul,
the then Minister of Urban Development and ” all the 6 shops
have been allotted by her to her own
relation/employees/domestic servants of her family members
and family friends. She has allotted 2 shops to her 2
grandsons, one shop to the maidservant of her shop to sh.
Vikram Kaul who is residing in Dubai, one shop to handloom
manager o the firm owned by her son-in-law and another shop
to a close friend. One shop has been allotted to the nephew
of the minister of State, Sh. P.K. Thungon. While making
allotments in respect of stalls, she has allotted most of
stalls to the relations/friends of her personal staff and
officials of Dte. of Estate.” The CBI has also reported that
Smt. Shiela Kaul had made ten different categories of
persons as the basis for deciding allotments, but even this
categorisation was not adhered to while making allotments.
The further findings are; (1) Many other
Organisations/persons who had also applied for allotment of
shops/stalls from time to time were not considered for
allotment of shops/stalls to them”: and (2) – “At the time
of discretionary allotments made by Smt. Shiela Kaul in 1992
and 1994 persons who were relations of her personal staff
were considered and allotted shops……”
Question is whether they were selected in accordance
with law, which aspect as its importance because apparently
a large number of other persons could as well fall within
the categories in question and had applied also? From the
report of the CBI it is clear that the allottees had been
selected, not by following the tender system, as required by
the policy of 1994, but because of their relationship with
the minister or her personal staff, or being employees or
friends of such persons. If that be so, the allotments were
wholly question is what is required to be done to undo the
wrong and how the wrong doer is to be dealt with within the
parameters known to law.”
Finally in para 18 of the judgment, this Court directed
as under :
Secondly, Smt. Shiela Kaul, who was prima facie
personally responsible for the illegal allotments, has to be
asked to show cause as to why damage should not be awarded
against her for her alleged misuse of power. So, a notice be
issued to her to show cause why she should not be asked to
pay such sum as damages, for each of the illegal allotments
made by her, as this Court would deem just and proper. The
cause would be shown within three weeks of the receipt of
this order.”
Pursuant to the above quoted directions, a show cause
notice was issued to Smt. Shiela Kaul. She has filed
affidavit in reply to the show cause notice.
Smt. Shiela Kaul was arrayed ass respondent in the writ
petition. This Court has been monitoring this case for a
period of about 2 years. Various interim orders were passed
from time to time. Despite ample opportunity available to
her Smt. Shiela Kaul did not choose to file any counter-
affidavit in this Court. Dr. Rajiv Dhawan, learned counsel
appearing for Smt. Shiela Kaul has very fairly stated that
her client cannot take her case higher than what has ben
stated in the affidavit filed on behalf of the Union of
India. The learned counsel has relied upon para 6 & 7 of the
affidavit dated September 6, 1996 filed by Harcharanjeet
Singh, Director of Estates, Ministry of Urban Affairs and
Employment. On behalf of Union of India. The said paras are
as under :
“6. That the Ministry of Works & Housing (renamed as
ministry of Urban Affairs & Employment) on 24th March, 1979
had issued the policy to be adopted for development, and
construction of shopping centres in various Government
colonies in Delhi. A copy of the Office Memorandum issued in
this regard is given as Annexure-R-V. The salient features
of the policy are indicated as follows.
i) The shops under construction in convenient/local
shopping centres in the sanctioned scheme would be sold by
auction by the Land & Development Officer after fixing
minimum reserve price in consultation with the Finance
Division.
ii) In respect of the shopping centres which are to be
constructed in various colonies the L & DO would auction the
sites for various purposes on perpetual leasehold basis.
iii) Such shops that are constructed multistorey
buildings would be taken in the books of Director of Estates
would allot the same on licence, fee basis.
iv) While the above was the general policy to be
adopted in future (after 24th March, 1979) exceptions may be
made if the circumstances so warranted.
7. The records of the Director of Estates indicate
that after the issue of these instructions in March 1979,
the Office of L & D O has not been able to auction any shops
in any of the shopping centres in Government colonies,
despite the efforts made by the Office of L & D O was
considered too high and no bidders came forward for auction
of shops. At present, have been taken by various Ministers
to allot the shops on licence fee basis are with the Central
Bureau of Investigation. In the absence of records which
were not the exact position in respect of each shop which
has been given on licence fee basis after the policy as
indicated above came into force. However, on the basis of
the individual files it is observed that in January, 1986, 5
shops were given on licence fee basis by the then shops were
allotted on licence fee basis by the then minister (Smt.
Mohsina Kidwai). Thereafter, from 1992 onwards 52 shops have
been sanctioned by the then minister for Urban Development
(Smt Shiela Kaul) out of which 7 shops were allotted by Smt.
Shiela Kaul before she herself had approved the policy in
1994 for disposal of the shops on tender basis.
8. Break-up of the shops allotted by Smt. Shiela
Kaul, the then Minister during her tenure is as follows:
Shops allotted from 1992 to 1994
7
(Before the Policy of giving the
shops on tender basis was
approved).
Shops allotted after 1994 policy
45
was laid down.
Shops not accepted by the allottees
9
The contents, quoted above, only give the factual
position pertaining to the allotment of shops/stalls during
the period from 1979 onwards. It is further obvious that
Smt. Shiela Kaul herself framed the Policy in 1994 for
disposal of the shops on tender basis but did not follow the
same. At this stage it would be instructive to quote the
explanation given by Smt. Shiela Kaul in her affidavit in
reply to the show cause notice to the allegation that she
allotted shops to her two grand children, friends, and
relations:
“In any case, the allegations are wrong in material
particulars in that-
In respect to the 2 shops to her grandsons, she was not
aware at that time because the name in the list were Vivek
Kumar & Ashish Kumar and the addresses were of Delhi of
which she was not aware. The shop allotted to maid servant
of her son Vikram Kaul, she was not aware of her name and
addresses in the statement given to her. She comes from a
weaker section of society and comes under Schedule Tribes.”
We do not wish to comment except that we are at pains
to read the above quoted stand taken by a person who has
held high offices like Central Minister and Governor.
This Court in Common Cause A Regd. Society vs. Union of
India & Ors. Writ Petition (C) 26 of 1995 (Capt. Satish
Sharma’s case) decided on November 4, 1996 relied upon this
Court’s judgment in Nilabati Behera (Smt.) Alias Lalita
Behera Vs. State of Orissa and Ors. 1993 (2) SCC 746. This
Court also referred to Rookes Vs. Barnard & Ors. 1964 Appeal
Cases 1129 and the judgment of the Court of Appeal in A.B.
and Ors. Vs. South West Water Services Ltd. 1993 Queen’s
Bench 507 and held as under:
“We are of the view that the legal position that
exemplary damages can be awarded in a case where the action
of a public servant is oppressive, arbitrary or
unconstitutional is unexceptionable.”
Even in the judgment dated October 11, 1996 by which
show cause notice was issued to Smt. Shiela Kaul, this Court
referred to various judgments of different Courts from
different countries in the world and has held that a public
servant is liable to exemplary damages for his acts which
are oppressive, arbitrary or unconstitutional.
The question for consideration, however, is whether the
action of Smt. Shiela Kaul, as discussed in detail in our
judgment dated October 11, 1996 (relevant part quoted above)
and also in various interim orders quoted above, makes her
liable to pay exemplary damages. After gibing our thoughtful
consideration to the material on record and in particular
the findings of this Court- quoted above- the answer has to
be in the affirmative. Smt. Shiela Kaul’s action was wholly
arbitrary, malafide and unconstitutional. This Court has
given clear finding in the judgment/orders quoted above to
this effect. We, therefore, hold that Smt. Shiela Kaul is
liable to pay exemplary damages.
We have heard Dr. Rajiv Dhawan, Mr. Kapil Sibal, Mr.
Altaf Ahmad, learned Additional Solicitor General and Mr.
Shiv Sagar Tiwari on the question of quantum. Dr. Dhawan has
stated that Smt. Shiela Kaul has followed the same Policy
which was being followed by her predecessors in office. Mr.
Kapil Sibal has contended that exemplary damages should be
awarded for public injury caused as a result of arbitrary
exercise of power on the part of Smt. Shiela Kaul. He has,
however, contended that so far as the allotments made by her
are concerned, in the facts and circumstances of the case,
exemplary damages are not called for. Mr. Sibal has based
his contention on the assumption that if the allotments were
to be made to the persons belonging to the weaker sections
of the society, then, there would not have much gain to the
State Exchequer. There is nothing on the record to show that
if the allotments were to be made only to weaker sections
or to any category of persons. In any case Smt. Shiela Kaul
did not follow any Policy or criteria. Allotments w e re
made by her in an arbitrary and illegal manner.
We may mention that this Court in the order dated
November 4, 1996 concerning Capt. Satish Sharma awarded Rs.
50 lacs as damages for his actions which were arbitrary,
malafide and unconstitutional.
After examining all the facts and circumstances of the
case and giving our thoughtful consideration to this aspect.
We direct Smt. Shiela Kaul to pay a sum of Government
Exchequer. Since the property with which Smt. Shiela Kaul
was dealing was public property, the Government which is “by
the people: has to be compensated. We further direct Smt.
Shiela Kaul to deposit the amount with the Secretary,
ministry of Finance, Government of India within nine months
from today. The amount if not paid, shall be recoverable as
arrears of land revenue.
Before parting with this order, we make it clear that
the CBI. Which is separately investigating the matter, shall
not be influenced by any observations made by this Court for
reaching the conclusion as to whether any prima facie case
for prosecution/trial is made out against Smt. Shiela Kaul.
It shall have to be decided on the basis of the material
collected and made available with the CBI as a result of the
investigation.