Ramesh Rout vs Rabindra Nath Rout on 9 December, 2011

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Supreme Court of India
Ramesh Rout vs Rabindra Nath Rout on 9 December, 2011
Author: R Lodha
Bench: R.M. Lodha, Jagdish Singh Khehar
                                                                            REPORTABLE




                  IN THE SUPREME COURT OF INDIA



                    CIVIL APPELLATE JURISDICTION



                    CIVIL  APPEAL NO. 4956 OF 2010





Ramesh Rout                                                     .... Appellant


                                     Versus


Rabindra Nath Rout                                               ....Respondent


                                      WITH



                    CIVIL  APPEAL NO. 4962 OF 2010





                                  JUDGMENT

R.M. Lodha, J.

The returned candidate — Ramesh Rout – whose

election to the 14th Orissa Legislative Assembly from 89-Athagarh

Assembly Constituency has been set aside by the High Court of

Orissa has preferred these two appeals under Section 116A read

with Section 116C of the Representation of the People Act, 1951 (for

short, `the 1951 Act’).

1

2. The Election Commission of India (for short,

`Commission’) in order to constitute 14th Legislative Assembly

announced general elections in the State of Orissa to be held in two

phases on April 16, 2009 and April 23, 2009. Following this, the

Governor of the State of Orissa in exercise of powers conferred

under Section 5(2) of the 1951 Act issued a notification which was

published in the official gazette on March 28, 2009. The 89 –

Athagarh Assembly constituency is one of the 147 Assembly

constituencies in the State of Orissa and is `General’ constituency.

The Commission appointed the following schedule of election :

“28.3.2009

To

04.04.2009 = Period prescribed for filing of

“NOMINATIONS”

               06.04.2009 =          date   fixed   for   SCRUTINY   OF 

                                     NOMINATIONS.

               08.04.2009 =          last   date   for   WITHDRAWAL   OF 

                                     NOMINATIONS

               23.04.2009 =          date of POLLING.

               16.05.2009 =          date of COUNTING OF VOTES.

               28.05.2009  =         date before which the Election 

                                     shall be completed."




3. On April 4, 2009, at 11.25 A.M., the respondent in Civil

Appeal No. 4962 of 2010 – Ranendra Pratap Swain (hereinafter

referred to as `proposed candidate’) filed four sets of nomination

papers for 89-Athagarh Assembly constituency as a candidate of

2

Biju Janata Dal (`BJD’) – a registered and recognized political party

in the State of Orissa before the Returning Officer. Seven other

candidates including the present appellant also filed their nomination

papers at the said election. The check list (ticked original) was

issued by the Returning Officer with his signature to the proposed

candidate at 11.45 a.m. A copy of the check list (ticked duplicate)

was retained by the Returning Officer.

4. On the appointed date (i.e. April 6, 2009) and time for

scrutiny of nominations, the Returning Officer rejected the

nomination papers of the proposed candidate on the ground that the

Form A and Form B filed by the proposed candidate along with his

first set of nomination paper were not duly signed in ink by the

authorized officer of the political party (BJD).

5. Upset with the order of Returning Officer dated April 6,

2009, rejecting his nomination, the proposed candidate filed a writ

petition before the Orissa High Court. However, the High Court did

not entertain the writ petition and directed him to pursue his

grievance before the Commission or seek appropriate relief after

election process was over. The proposed candidate raised his

grievance before the Commission but without any success.

3

6. The election to the 89-Athagarh Assembly constituency

was held as per election schedule and the appellant who contested

the election as an independent candidate was declared elected.

7. Two election petitions came to be filed before the Orissa

High Court challenging the election of the appellant to 89-Athagarh

Assembly Constituency. One by the proposed candidate being

Election Petition no. 4 of 2009 and the other by the proposer –

respondent in Civil Appeal No. 4956 of 2010 being Election Petition

no. 6 of 2009. In both election petitions, the election of the appellant

was challenged on the ground of improper rejection of nomination

papers of the proposed candidate. It was averred therein that the

proposed candidate had filed Form A and Form B signed in ink by

the authorized person along with first set of nomination paper

showing that he had been duly sponsored by the BJD to contest as

a party nominee from 89-Athagarh Assembly constituency and with

other three sets of nomination, he had filed xerox copies of original

Forms A and B duly authenticated by a Notary Public. The election

petitioners raised diverse grounds in challenging the order of the

Returning Officer dated April 6, 2009 whereby the nomination

papers of the proposed candidate were rejected.

4

8. The appellant — (respondent therein) – contested the

election petitions by filing separate written statement. He raised

objections about the maintainability of election petitions on facts and

in law. Inter alia, it was denied that the proposed candidate filed

original Form-A and Form-B signed in ink by the authorized person

of BJD as at the time of scrutiny original Form A and Form B were

not available and the Form A and Form B on record did not contain

ink signature.

9. On the respective pleadings of the parties, the High

Court initially framed four issues but later on framed additional issue

no. 5. The relevant two issues, namely, issue no. 3 and issue no. 5

read as follows :

“3. Whether the Returning Officer improperly rejected the

nomination of the Election Petitioner in violation of the

statutory provisions and rules?

5. Whether the Returning Officer improperly rejected the

nomination of Sri Ranendra Pratap Swain, the official

candidate of Biju Janata Dal in violation of the instructions

issued by the Election Commission of India in exercise of

its constitutional powers and the principles of natural justice

or not?”

10. The election petitioners as well as the returned candidate

tendered oral and documentary evidence. On behalf of the election

petitioners, three witnesses, namely, proposer – Rabindra Nath Rout

5

(PW-1); proposed candidate – Ranendra Pratap Swain (PW-2) and

authorised agent – Tarani Kanta Biswal (PW-3) were examined. On

the other hand, the returned candidate examined himself as RW-1

and one Magnicharan Rout as (RW-2). The Returning Officer was

examined by the Court as its witness (CW-1). The documents

tendered in evidence were marked separate exhibits.

11. The High Court also called for all the original documents

pertaining to the scrutiny of nomination papers for 89-Athagarh

Constituency and 87-Badamba Constituency. We shall refer to

relevant documentary evidence appropriately wherever necessary.

12. The High Court on hearing the parties, at the time of

decision in the election petitions, framed an additional issue no. 6

namely, whether the election petitioner (proposed candidate) filed the

original Form A and Form B duly signed in ink by the authorized

person with the first set of his nomination paper. The High Court

answered issue nos. 3, 5 and 6 in the affirmative and allowed both

election petitions on June 23, 2010 and declared the election of the

appellant null and void. The High Court declared that a casual

vacancy is created relating to 89-Athagarh Assembly Constituency

and the Commission was directed to conduct fresh election in respect

of the said constituency in accordance with law.

6

13. It is from this judgment that these two appeals have

arisen.

14. We have heard Mr. Gopal Subramanian, learned senior

counsel for the appellant and Mr. K.K. Venugopal, learned senior

counsel for the proposed candidate.

15. The Returning Officer plays an important role in the

election management and to ensure that there is no scope left for any

complaint, the Commission has issued a handbook for Returning

Officers (for short, `the handbook’) The handbook, as it states, has

been designed to give to the Returning Officers the information and

guidance which they may need in performance of their functions; to

acquaint them with up-to-date rules and procedures prescribed for

the conduct of elections and to ensure that there is no scope for

complaint of partiality on the part of any official involved in the

election management. We shall refer to the relevant provisions of the

handbook a little later. The handbook does not have statutory

character and is in the nature of guidance to the Returning Officers.

16. By virtue of a notification dated February 10, 2009

(Exhibit 10) issued by the Commission, for the first time, the issuance

of check list to a candidate filing nomination paper has been

introduced. Prior thereto, there was no such provision. It is provided

7

that in respect of each candidate, the Returning Officer should

maintain, in duplicate, the check list of the documents/requirements

filed by the candidates. When a candidate files nomination paper, the

Returning Officer shall indicate in the second column of the check list

whether the concerned documents have been filed or other

requirements fulfilled. If any of the documents has not been filed, it

requires the Returning Officer to clearly state in the bottom of the

check list, indicating the time limit by which such document/s can be

submitted. The check list in two sets with all requirements indicated

is needed to be signed by the Returning Officer as well as the

candidate. The check list (marked original) is handed over to the

candidate/proposer who files nomination paper, while check list

(marked copy) is retained by the Returning Officer. The notification

states that the copy of the check list will serve the dual purpose of

acknowledging the receipt of the documents submitted as well as of

notices as directed in the handbook. It is further provided that no

separate notice is required to be given to the candidate in respect of

the items mentioned in the check list. If and when a document is filed

subsequent to filing of nomination, an acknowledgment to that effect

is issued to the candidates, namely, mentioning the date and time at

which it is filed and this is also indicated in the appropriate place in

8

the check list retained by the Returning Officer. The proforma of the

check list has also been notified with the notification dated February

10, 2009.

17. Section 33 of the 1951 Act makes provision for

presentation of nomination paper and requirements for a valid

nomination. To the extent it is relevant for the purposes of the

present case, it is reproduced as follows :

“S. 33. Presentation of nomination paper and requirements

for a valid nomination.–(1) On or before the date

appointed under clause (a) of section 30 each candidate

shall, either in person or by his proposer, between the

hours of eleven o’ clock in the forenoon and three o’ clock

in the afternoon deliver to the returning officer at the place

specified in this behalf in the notice issued under section

31 a nomination paper completed in the prescribed form

and signed by the candidate and by an elector of the

constituency as proposer:

               xxx                   xxx                     xxx



        (4)    On   the   presentation   of   a   nomination   paper,   the 

returning officer shall satisfy himself that the names and

electoral roll numbers of the candidate and his proposer as

entered in the nomination paper are the same as those

entered in the electoral rolls:

Provided that no misnomer or inaccurate description

or clerical, technical or printing error in regard to the name

of the candidate or his proposer or any other person, or in

regard to any place, mentioned in the electoral roll or the

nomination paper and no clerical, technical or printing error

in regard to the electoral roll numbers of any such person

in the electoral roll or the nomination paper, shall affect the

full operation of the electoral roll or the nomination paper

with respect to such person or place in any case where the

9

description in regard to the name of the person or place is

such as to be commonly understood; and the returning

officer shall permit any such misnomer or inaccurate

description or clerical, technical or printing error to be

corrected and where necessary, direct that any such

misnomer, inaccurate description, clerical, technical or

printing error in the electoral roll or in the nomination paper

shall be overlooked.

xxx xxx xxx”

18. Section 35 provides for notice of nominations and the

time and place for their scrutiny.

19. The provision concerning scrutiny of nomination is made

in Section 36 of the 1951 Act. To the extent it is relevant, it reads as

follows :

“S. 36. Scrutiny of nomination.–(1) On the date fixed for

the scrutiny of nominations under section 30, the

candidates, their election agents, one proposer of each

candidate, and one other person duly authorized in writing

by each candidate but no other person, may attend at such

time and place as the returning officer may appoint; and

the returning officer shall give them all reasonable facilities

for examining the nomination papers of all candidates

which have been delivered within the time and in the

manner laid down in section 33.

(2) The returning officer shall then examine the

nomination papers and shall decide all objections which

may be made to any nomination and may, either on such

objection or on his own motion, after such summary

inquiry, if any, as he thinks necessary, reject any

nomination on any of the following grounds:-

       (a)     xxx                   xxx                     xxx



       (b)     that there has been a failure to comply with any of the 

               provisions of section 33 or section 34; or 


                                                                                       10


       (c)           that the signature of the candidate or the proposer 

              on the nomination paper is not genuine.



              xxx                     xxx                     xxx



              (4)       The   returning   officer   shall   not   reject   any 

nomination paper on the ground of any defect which is not

of a substantial character.

(5) The returning officer shall hold the scrutiny on

the date appointed in this behalf under clause (b) of section

30 and shall not allow any adjournment of the proceedings

except when such proceedings are interrupted or obstructed

by riot or open violence or by causes beyond his control:

Provided that in case an objection is raised by the

returning officer or is made by any other person the

candidate concerned may be allowed time to rebut it not

later than the next day but one following the date fixed for

scrutiny, and the returning officer shall record his decision

on the date to which the proceedings have been adjourned.

xxx xxx xxx”

20. The Conduct of Elections Rules, 1961 (for short, `1961

Rules’) have been framed under the 1951 Act. Rule 4 provides that

every nomination paper presented under sub-section (1) of Section

33 shall be completed in such one of the Forms 2A to 2E as may be

appropriate. Proviso that follows Rule 4 makes a provision that a

failure to complete or defect in completing, the declaration as to

symbols in a nomination paper in Form 2A or Form 2B shall not be

11

deemed to be a defect of substantial character within the meaning of

sub-section (4) of Section 36.

21. Form 2B under Rule 4 is in three parts. Part-I is to be

used by a candidate set up by a recognised political party. Part-II is

required to be filled by a candidate for election to the legislative

assembly not set up by a recognised political party and it provides

that there should be ten electors of the constituency as proposers.

Part-III of Form 2B is a declaration to be made by the candidate

giving assent to his nomination. Clause (b)(i) is applicable to a

candidate who has been set up by a recognised political party with a

request that symbol reserved for such party be allotted to him. Clause

(b)(ii), on the other hand is applicable to a candidate not set up by

any registered recognised political party or a candidate who is

contesting the election as an independent candidate. A recognised

political party means a political party recognised by the Commission

under the 1968 Order.

22. Rule 5 of the 1961 Rules makes a provision for symbols

for elections in parliamentary and assembly constituencies. Rule 10

of 1961 Rules provides for preparation of list of contesting

candidates.

12

23. In exercise of the powers conferred by Article 324 of the

Constitution of India read with Section 29A of the 1951 Act and Rules

5 and 10 of the 1961 Rules, the Commission made Election Symbols

(Reservation and Allotment) Order, 1968 (for short `1968 Order’).

Unregistered political parties are out of its purview. The registered

recognized and unrecognized political parties and independent

candidates are dealt with by the 1968 Order. 1968 Order came to be

amended by notification no. 56/2000/Judl. III dated 1st December,

2000. Para 13 of the 1968 Order is relevant for consideration of the

present matter. It reads as follows :

“13. When a candidate shall be deemed to be set up by a

political party.–For the purposes of an election form any

Parliamentary or Assembly Constituency to which this

Order applies, a candidate shall be deemed to be set up by

a political party in any such Parliamentary or Assembly

Constituency, if, and only if–

(a) the candidate has made the prescribed declaration to

this effect in his nomination paper,

(aa) the candidate is a member of that political party and

his name is borne on the rolls of members of the

party;

(b) a notice by the political party in writing in Form B, to

that effect has, not later than 3.p.m. on the last date

for making nominations, been delivered to the

Returning Officer of the constituency;

(c) the said notice in Form B is signed by the President,

the Secretary or any other office-bearer of the party,

and the President, Secretary or such other office

bearer sending the notice has been authorised by the

party to send such notice;

13

(d) the name and specimen signature of such authorised

person are communicated by the party, in Form A, to

the Returning Officer of the constituency and to the

Chief Election Officer of the State or Union Territory

concerned, not later than 3 p.m. on the last date for

making nominations; and

(e) Forms A and B are signed, in ink only, by the said

office-bearer or person authorised by the party:

Provided that no fascimile signature or signature by

means of rubber stamp, etc. of any such office bearer

or authorised person shall be accepted and no form

transmitted by fax shall be accepted.”

24. Chapter VI of the handbook deals with the scrutiny of

nominations by the Returning Officer. Para 2 emphasises that

scrutiny of nomination papers is an important quasi-judicial function

and the Returning Officer has to discharge this duty with complete

judicial detachment and in accordance with the highest judicial

standards. Para 6 provides that even if no objection has been raised

to a nomination paper, the Returning Officer has to satisfy himself

that the nomination paper is valid in law. If any objection is raised to

any nomination paper, the Returning Officer has to hold a summary

inquiry to decide the same and treat the nomination paper to be either

valid or invalid. It states that brief reasons in support of the decision

must be set out, particularly, where an objection has been raised or

the nomination paper has been rejected. Para 7 provides for

presumption of validity of every nomination paper unless the contrary

14

is prima facie obvious or has been made out. In case of a reasonable

doubt, as to the validity of a nomination paper, the benefit of such

doubt must go to the candidate concerned and the nomination paper

should be held to be valid. Para 7 seeks to remind the Returning

Officer that whenever a candidate’s nomination paper is improperly

rejected and he is prevented from contesting the election, there is a

legal presumption that the result of the election has been materially

affected by such improper rejection and the election is liable to be set

aside. Para 9.6 sets out some of the defects which may be treated

by the Returning Officer as defects of substantial nature. It, inter alia,

provides that failure to submit written authorisation form from the

political party, within prescribed time and in prescribed form, where a

candidate claims to have been set up by a national or state party, is a

defect of substantial nature. Para 10.3 says that the nomination paper

filed by a candidate claiming to have been set up by a recognised

national/state party subscribed by only an elector as proposer is liable

to be rejected, if a notice in writing to that effect has not been

delivered to the Returning Officer of the Constituency by an

authorised office-bearer of that political party by 3 p.m. on the last

date for making nominations in Forms A and B devised by the

Commission for the purpose under para 13 of the 1968 Order.

15

25. In light of the above provisions, particularly Sections 33(1)

and 36(1) of the 1951 Act, Rule 4 of the 1961 Rules, Part-III of Form

2B, para 13(e) of the 1968 Order and Forms A and B appended to

1968 Order and the guidelines issued to the Returning Officers in the

handbook, Mr. Gopal Subramanian, learned senior counsel for the

appellant submitted that where a candidate for the election to

Assembly has been set up by a recognised political party, the filing of

original Forms A and B duly signed in ink by an authorised person of

such political party is non-negotiable and non-filing of original Forms

A and B signed in ink constitutes a defect of substantial nature.

Learned senior counsel argued that proviso to Rule 4 carves out an

exception in respect of declaration in relation to symbol by candidates

of unrecognised political party and independent candidates as per

clause (b)(ii) of Part-III of Form 2-B and has no application to the

case of a candidate belonging to a recognised political party who has

to make a declaration as required by clause(b)(i) thereof. According

to Mr. Gopal Subramanian, the proviso appended to Rule 4 and para

13 of the 1968 Order operate in completely different fields without any

overlap or conflict. He vehemently contended that the present case

squarely falls under Section 36(2)(b) of the 1951 Act for failure to

comply with the requirement of nomination paper completed in

16

prescribed form. He would argue that the nomination having been

subscribed by one proposer, basing on the declaration given by the

election petitioner, it is intrinsic mandatory requirement of the 1968

Order that ink signed Forms A and B were filed prior to 3 P.M. on the

last date of making nomination so as to sustain the declaration of the

candidate having been set up by a recognised political party.

26. On the other hand, Mr. K.K. Venugopal, learned senior

counsel for the proposed candidate contended that Section 36(4) of

the 1951 Act read with proviso to Rule 4 of the 1961 Rules and Form

2 B (Part III) would make the filing of xerox copy of Form A and Form

B permissible (assuming that xerox copy of Form A and Form B were

filed only) and cannot form the basis of the rejection of the nomination

paper. He submitted that failure to file original Form A and Form B

signed in ink was not defect of a substantial character within the

meaning of Section 36(4) of the 1951 Act. According to him, para

13(e) of the 1968 Order that states “Forms A and B are signed, in ink

only, by the said office bearer or person authorised by the party” is

only an expression of hope and is not mandatory as it does not use

the expression `shall be signed’. He referred to a decision of this

Court in the case of Jagan Nath v. Jaswant Singh & Ors.1 in support

of his submission that the election law is technical and unless

1 1954 SCR 892

17

express provision is found, one cannot read the word “are” as “shall”.

With reference to Section 33(1) of the 1951 Act, Mr. Venugopal would

submit that the expression “a nomination paper completed in the

prescribed form and signed by the candidate and by an elector of the

constituency as proposer” did not require the nomination paper to be

accompanied by specified documents. Rule 4 of the 1961 Rules

deals with the nomination paper while para 13 of the 1968 Order

deals with the political party’s authorisation. The two are separate

and distinct and para 13 of 1968 Order cannot be read into Rule 4 of

the 1961 Rules.

27. Mr. K.K. Venugopal, learned senior counsel submitted

that neither Section 33 nor Section 34 of the 1951 Act required that

the nomination should be accompanied by the sponsorship or

authorisation of a political party. Section 36(2) of the 1951 Act sets

out the grounds on which nomination paper can be rejected. Neither

clause (a) which deals with qualifications and disqualifications nor

clause (b) that deals with failure to comply with Section 33 nor

Section 34 or clause (c) which deals with signature of the candidate

or his proposer is relevant to the present controversy.

28. On the above contentions, the question presented for our

consideration is, whether it is mandatory for a candidate set up by a

18

recognised political party to file original ink signed Forms A and B

appended to para 13 of the 1968 Order.

29. Before we consider the above question, it is important to

recapitulate the general rule relating to election law stated by the

Constitution Bench of this Court in the case of Jagan Nath1. This

Court (at page 895) stated :

“The general rule is well settled that the statutory

requirements of election law must be strictly observed and

that an election contest is not an action at law or a suit in

equity but is a purely statutory proceeding unknown to the

common law and that the court possesses no common law

power. It is also well settled that it is a sound principle of

natural justice that the success of a candidate who has

won at an election should not be lightly interfered with and

any petition seeking such interference must strictly conform

to the requirements of the law. None of these propositions,

however, have any application if the special law itself

confers authority on a tribunal to proceed with a petition in

accordance with certain procedure and when it does not

state the consequences of non-compliance with certain

procedural requirements laid down by it. It is always to be

borne in mind that though the election of a successful

candidate is not to be lightly interfered with, one of the

essentials of that law is also to safeguard the purity of the

election process and also to see that people do not get

elected by flagrant breaches of that law or by corrupt

practices. In cases where the election law does not

prescribe the consequence or does not lay down penalty

for non-compliance with certain procedural requirements of

that law, the jurisdiction of the tribunal entrusted with the

trial of the case is not affected.”

30. Section 33 of the 1951 Act enacts that a candidate shall

file nomination paper on or before the appointed date in the

19

prescribed form. The form in which nomination paper shall be

presented and completed is provided in Rule 4 of the 1961 Rules.

According to Rule 4, every nomination paper presented under sub-

section (1) of Section 33 shall be completed in such one of the forms

2-A to 2-E, as may be appropriate. Proviso that follows Rule 4

provides that a failure to complete or defect in completing, the

declaration as to symbols in a nomination paper in Form 2-A or Form

2-B shall not be deemed to be a defect of substantial character within

the meaning of Section 36(4) of 1951 Act. The controversy in the

present case relates to a candidate set up by a recognised political

party of the State and, therefore, the relevant form in this regard is

Form 2-B. Form 2-B is in three parts. Part-II is not relevant and,

therefore, it is not necessary to refer to that. Part-I and Part-III of

Form 2-B are relevant. Part-I of Form 2-B is required to be completed

by a candidate set up by a recognised political party. Part-III of Form

2-B is a declaration to be made by the candidate giving assent to his

nomination. The candidate is required to declare, in case of a

candidate set up by a recognised State party in terms of para b(i),

“that I am set up at this election by the ………party, which is

recognised national party/state party in this State and that the symbol

reserved for the above party be allotted to me”. Para b (ii) of Part-III is

20

applicable to a candidate set up by any registered unrecognised

political party or a candidate who is contesting the election as an

independent candidate. A plain reading of proviso that follows Rule 4

leaves no manner of doubt that a failure to complete or defect in

completing, the declaration as to symbols in a nomination paper in

Form 2A or Form 2B by a candidate set up by a recognised political

party or a candidate set up by registered unrecognised political party

or a candidate who seeks to contest the election as an independent

candidate is not a defect of substantial nature. It is not possible to

catalogue defects contemplated by the proviso. However, to illustrate

the few; wrong description of symbol, omission to fill blank space

given in proforma in respect of choice of symbols, selecting a symbol

which is reserved, etc., fall in the category of defects not of a

substantial character. We are fortified in our view by a decision of this

Court in Krishna Mohini (Ms) v. Mohinder Nath Sofat2 wherein this

Court said in para 32 (Pg. 159) :

“32. Though Rule 4 of the Conduct of Elections Rules

requires every nomination paper presented under sub-

section (1) of Section 33 to be complete in such one of the

Forms 2-A to 2-E as may be appropriate and, therefore, the

blank space meant for showing three symbols in order of

preference as symbols of the candidate’s choice, has to be

filled in; however, non-filling of the space as to choice of

symbol is not a defect of a substantial character. Such

deficiency in the nomination paper is saved by the proviso

to Rule 4 of the Conduct of Elections Rules, 1961 which

2 (2000) 1 SCC 145

21

provides that failure to complete or defect in completing the

declaration as to symbols in a nomination paper shall not

be deemed to be a defect of a substantial character within

the meaning of sub-section (4) of Section 36. Choosing a

wrong symbol, leaving blank the space meant for filling the

choice of symbols and an error in describing the symbol —

are all defects not of a substantial character. An

independent candidate may mention as his preference the

symbol reserved for a recognised political party, but that

again will not be a defect of a substantial character.

Dealing with such cases, this Court has held in K.S. Abdul

Azeez v. Ramanathan Chettiar (AIR 1967 SC 85) that the

question of symbols should not play an important part

because symbols can be assigned by political parties till

the date for withdrawal and nomination paper should not be

cancelled, on this ground, during the interval.”

31. The applicability of proviso that follows Rule 4, however,

is limited to defect in the declaration as to symbol made by a

candidate in Form 2-A or 2-B appended to 1961 Rules. Its operation

does not extend to the defects in forms required to be filled or

completed by a candidate set up by a recognised political party

under 1968 Order or non-fulfilment of requirements set out in clauses

(a) to (e) of para 13 of the 1968 Order.

32. 1968 Order has been made by the Commission to provide

for specification, reservation, choice and allotment of symbols of

elections in Parliamentary and Assembly Constituencies for the

registered political parties (recognised or unrecognised) and the

independent candidates. Para 13 provides in unmistakable terms that

for a candidate to be considered to have been set up by a political

22

party in a parliamentary or assembly constituency, he has to comply

with the conditions set out in clauses (a) to (e) thereof. In Krishna

Mohini (Ms)2, this Court held that in order to be a candidate set up by

a registered and recognised political party so as to take advantage of

being proposed by a single elector, all the four requirements set out

in clauses (a), (b), (c) and (d) of para 13 of 1968 Order must be

satisfied. The Court went on to say that if any one or more of the

requirements are not satisfied, the benefit of nomination being

proposed by a single elector is not available to him. Clause (e) of

para 13 of the 1968 Order is equally important. It reads, “Forms A

and B are signed, in ink only, by the said office-bearer or person

authorised by the party”. Proviso appended to para 13 makes a

provision that no facsimile signature or signature by means of rubber

stamp, etc. of any such office-bearer or authorised person shall be

accepted and no form transmitted by fax shall be accepted. In other

words, for a candidate, proposed by a single elector alone, to be

treated as a candidate set up by a recognised political party, the filing

of notice and communication in Forms A and B referable to clauses

(b), (c) and (d) and in accord with clause (e) of para 13 of the 1968

Order is essential and on its non-compliance, the nomination of such

candidate is liable to be rejected.

23

33. That clause (e) of para 13, 1968 Order does not use the

expression “shall be signed” is obvious from the bare reading of the

provision but the significance of the word “only” therein cannot be

ignored.

34. In Concise Oxford English Dictionary (Tenth Edition,

Revised), the word `only’ is explained :

Only adv. 1 and no one or nothing more besides.. . . . . .

adj. alone of its or their kind; single or solitary. . . . . . . .

35. In Webster Comprehensive Dictionary, International

Edition (Volume Two), the word `only’ is defined thus :

Only (n’l) adv. . . . . . . . 2 In one manner or for one

purpose alone. . . . . . 4 Solely; merely; exclusively: limiting

a statement to a single defined person, thing, or number. –

adj. 1 Alone in its class; having no fellow or mate; sole;

single; solitary:

36. The word `only’ is ordinarily used as an exclusionary term.

In the American case of Henry R. Towne v. Mark Eisner (245 US 418

at 425), the court said, “A word is not a crystal, transparent and

unchanged; it is the skin of a living thought and may vary greatly in

colour and content according to the circumstances and the time in

which it is used”. In ascertaining the meaning of the word `only’, its

placement is material and so also the context in which the word has

been used. The use of the word `only’ in clause (e), para 13, 1968

24

Order emphasises that Forms A and B are to be signed in ink by the

office bearer or person authorised by the recognised party and in no

other way. Thus, it excludes any other mode of filing Forms A and B

when a candidate is set up by a recognised political party. In our

view, therefore, the word `only’ used in clause (e) of para 13 is

indicative of the mandatory character of that provision.

37. Where a candidate is set up by a recognised political

party, clause (b)(i), Part-III of Form 2-B becomes relevant as by

making declaration therein the candidate makes a request that

symbol reserved for such party be allotted to him. It is for this reason

that the requirements of para 13 of the 1968 Order become integral

part of Form 2-B, Part-III under Rule 4 of the 1961 Rules where a

candidate is set up by a recognised political party. We are unable to

accept the submission of Mr. K.K. Venugopal that para 13 of the

1968 Order cannot be read into Rule 4. Non-compliance of

requirements of para 13 of the 1968 Order, in our view, is a defect of

substantial character and the nomination paper of a candidate

proposed by a single elector set up by a recognised political party

having such defect is liable to be rejected under Section 36(2)(b) as it

tantamounts to non-compliance of the provisions of Section 33,

25

namely, the nomination paper having not been completed in the

prescribed form.

38. The proposed candidate admittedly filed his nomination

paper proposed by a single elector having been set up by BJD, a

recognised political party in the State of Orissa, and, therefore, it was

incumbent upon him that the requirements of para 13 of the 1968

Order were fully complied with. In other words, it was necessary for

the proposed candidate that Forms A and B referable to clauses (b),

(c) and (d) of para 13, 1968 Order were submitted to the Returning

Officer duly signed in ink by the authorised person of BJD not later

than 3.00 p.m. on April 4, 2009.

39. Having held so, the other questions that need to be

considered by us in these appeals are, whether the High Court erred

in framing issue no. 6 at the time of decision in the election petitions,

i.e., whether the election petitioner Ranendra Pratap Swain filed the

original Form-A and Form-B being duly signed in ink by the

authorised person with the first set of his nomination and whether the

finding recorded by the High Court on that issue suffers from any

illegality.

40. The pleadings of the parties as well as the evidence let in

by them clearly show that the parties were seriously in issue whether

26

the original Form-A and Form-B duly signed in ink by the authorised

person of BJD were filed by the proposed candidate with the first set

of his nomination paper. The election petitioners (in both election

petitions) asserted that the proposed candidate had filed original

Forms A and B duly signed in ink by Shri Navin Patnaik (authorised

person of BJD) before the Returning Officer on April 4, 2009 at the

time of presentation of nomination paper and check list was issued

acknowledging receipt of these forms. The returned candidate

disputed the said assertion made in the election petitions. The

evidence of the Returning Officer, who was examined as court

witness no. 1, and his cross-examination on behalf of the proposed

candidate as well as the returned candidate also indicate that the

factual controversy in the election petitions centered around on the

filing of the original Form-A and Form-B duly signed in ink by the

authorised person of BJD with the first set of his nomination. It follows

that by framing issue no. 6 at the time of final decision of the election

petitions, no prejudice has been caused to the returned candidate. As

a matter of fact, no ground of prejudice has been raised in the

appeals nor such argument was advanced before us by the learned

senior counsel for the returned candidate. We, accordingly, hold that

the High Court did not commit any error in framing issue no. 6 which

27

was quite vital and material for decision in the election petitions. We

further hold that no prejudice has been caused to the returned

candidate by framing such additional issue at the time of the decision

in the election petitions.

41. The proposed candidate PW-2 deposed that he had

contested Orissa Assembly Elections held in 1990, 1995, 2000 and

2004 from 89-Athagarh Constituency and had won all these four

elections. While giving the details of nomination papers and the

documents presented personally by him on April 4, 2009 at 11.25

a.m., he stated that in the first set of nomination, Rabindra Nath Rout

(PW-1) was the proposer and along with the first set of nomination

paper, original Form-A and Form-B signed in ink by Shri Naveen

Patanaik, President and the authorised signatory of BJD were filed.

He deposed that he had presented four sets of nominations as the

nominee of BJD for 89-Athagarh Assembly Constituency and all his

four sets of nominations were complete in all respect. He also

deposed that immediately after he presented four sets of

nominations, as a nominee of BJD, the Returning Officer asked him

to take oath before him and he, accordingly, took oath before the

Returning Officer. From 11.25 a.m. to 11.45 a.m., the Returning

Officer examined the four sets of nominations presented by him and

28

thereafter the Returning Officer personally prepared the check list of

documents; put his signature on that and asked him (proposed

candidate) to sign on the said documents. The Returning Officer

retained with him one of such check list ticked duplicate (Ex. 22) and

handed over another to him (proposed candidate) ticked original

(Ex. 11).

42. The deposition of the proposer–Rabindra Nath Rout

(PW-1) is not of much help as he has stated that he was not present

in the office room of the Returning Officer when the proposed

candidate filed his nomination.

43. Significantly, the Returning Officer (CW-1) in his

deposition has not specifically denied that Form-A and Form-B in

original duly signed in ink by the authorised officer of BJD were not

filed by the proposed candidate. Rather he stated that had it come to

his notice that Form-A and Form-B duly signed in ink by the

authorised signatory were not filed by the proposed candidate, he

would have made an endorsement on the bottom of the check list to

that effect and asked the proposed candidate to file the original ink

signed forms within time. He admitted that no such endorsement was

made in the check list. The Returning Officer also stated in his

deposition that the nomination papers filed by the proposed candidate

29

were examined by him only from technical stand point and it was not

his duty to examine the correctness or validity of the documents at

the time of filing of the same.

44. Although there is voluminous documentary evidence, in

our view, the three documents viz; the check list (Ex. 11), Form 3-A

(Ex. 42/F) and the consolidated list of nominated candidates (Ex. 44)

are important. The check list marked `original’ (Ex. 11) given to the

proposed candidate is as follows :

       Sl.         Documents                                          Whether   filed 

       No.                                                            (write yes/no)

       1.          Affidavit in Form-26                               yes

2. Affidavit as per the Commission’s order yes

dated 27.03.03

3. Certified extract of electoral roll (when Not

candidate is an elector of a different needed

constituency)

4. Forms A and B (applicable in the case yes

of candidates set up by political parties)

5. Copy of caste certificate (if the Not needed

candidate claims to belong to SC/ST)

6. Security deposit (whether made) yes

7. Oath/affirmation (whether taken) yes

30

The following documents which have not been filed should

be filed as indicated below :

(a) ____________should be filed latest by __________.

(b) ____________should be filed latest by __________.

Received.

……………………….


             (Signature of candidate)


             Date & time :           04.04.2009  -- 11.45 a.m.

              Place            : ATHAGARH"



45. List of nominated candidates–Checks If (Ex.44) to the

extent it is relevant is as follows :

Name of Parliamentary/Assembly Constituency -89 Athagarh

No Name of the Address of Symbols Name of political Whether Forms Whether
. candidate candidate chosen in Party `A’ and `B’ have main

Order of (National/State or been received candidate or

preference registered) by by 3.00 p.m. on substitute

by the which the the last date for candidate of

candidate. candidate claims making the party (as

to have been set nominations in per Party’s

up/independent respect of the intimation

candidate candidate in Form B)

1 2 3 4 5 6 7

1 Ranendra At- Cunch Biju Janata Yes Main

Pratap Radhago Dal Candidate

Swain vindapur

P.O.-

Dhaipur,

P.S.

Athagarh

Dist.-

Cuttack

31

46. On April 4, 2009, the Returning Officer published a notice

in Form 3A on the notice board of his office in respect of the

nomination papers presented before him on that day. In that notice –

Form 3A (Ex. 42/F), it was mentioned in column no. 6 that proposed

candidate was nominee of BJD. Pertinently, April 4, 2009 was the last

day of nominations. Form 3A was displayed on the notice board after

3 p.m. Had the proposed candidate not filed Forms A and B as

required, i.e., duly signed in ink by an authorised person of BJD, he

would not have been shown as a nominee of that party in Form 3A.

47. On behalf of the returned candidate it was contended

before the High Court and reiterated before us that none of these

documents indicate that Forms A and B were filed in original. It was

submitted that these documents only indicate that Forms A and B

were filed as endorsed in the check list and were received before

3.00 p.m. on the last date of making nominations but these

documents do not prove that original Forms A and B signed in ink by

the authorised signatory of the party were filed.

48. It is true that neither in the check list nor in the list of

nominated candidates, the word `original’ before Forms A and B is

mentioned but it was not required to be mentioned as in the case of

candidates set up by political parties; the requirement is that such

32

candidates file Form A and Form B duly signed in ink by the

authorised officer of the concerned political party. In the event of filing

of Form A and Form B otherwise, an endorsement would obviously

be made against that column in the check list and time would be

given to make up the deficiency by 3.00 p.m. on the last day of

nomination. In the circumstances, having regard to the significance of

the check list, if Forms A and B were not filed in original by the

proposed candidate, an endorsement would have been made by the

Returning Officer that only xerox copies of Forms A and B were filed.

No doubt under Section 33(4) of the 1951 Act, the Returning Officer

is not expected to make a detailed scrutiny of the nomination paper

presented before him but in the case of a candidate who has filed his

nomination paper as a candidate set up by a recognised political

party and in view of para 13 of the 1968 Order, the Returning Officer

would surely check whether Form A and Form B suffer from any

defect.

49. As a matter of fact, to obviate unnecessary dispute about

presentation of nomination paper by a candidate, the Commission in

the handbook has provided for guidelines pertaining to check list.

Accordingly, a check list is required to be prepared duly certified by

the Returning Officer that all documents have been received. Such

33

check list is signed by the Returning Officer as well as by the

candidate. Where a check list certifies that Forms A and B (in the

case of candidates set up by a recognised political parties), have

been filed, such certificate leads to presumption that the procedural

requirement of filing the documents as prescribed in para 13 of the

1968 Order has been complied with. The presumption is of course

rebuttable but there must be sufficient evidence by the other side to

displace such presumption. In the present case, the check list

(Ex.11), Form 3A (Ex. 42/F) and the list of the nominated candidates

–checks IF (Ex. 44) give rise to presumption in favour of the

proposed candidate that he had filed Form-A and Form-B duly signed

in ink by the authorised person of BJD with the first set of his

nomination paper. The question is whether this presumption has

been rebutted by the returned candidate? We do not think so. The

oral evidence of the returned candidate (RW-1) and his witness (RW-

2) is not of much help insofar as this aspect is concerned. The

Returning Officer has not stated firmly and with certainty in his

evidence that the proposed candidate had not filed Form-A and

Form-B signed in ink by the authorised person of the BJD. Rather he

stated that had it come to his notice that the original Form-A and

Form-B duly signed in ink were not filed along with the nomination

34

paper by the proposed candidate, he would have made an

endorsement to that effect in the check list. Moreover, between 11.46

a.m. when the check list was prepared by the Returning Officer and

given to the candidate and 3.00 p.m. on April 4, 2009 (last date of

nominations) no intimation was issued by the Returning Officer or

received by the candidate with regard to non-filing of original Forms A

and B. No doubt, the burden is on the candidate set up by a

recognised political party to prove that he had filed Forms A and B

duly signed in ink by the authorised person of that party but that

burden gets discharged on production of evidence that raises

presumption in his favour. In the present case the proposed

candidate has been successful in discharging the burden placed

upon him.

50. The evidence of the Returning Officer is the important

part of the case. He admitted in his evidence that the xerox copies of

the nomination papers and documents were got prepared through his

officials for the purpose of displaying on the notice board. He also

admitted that since proposed candidate had filed all documents

required in the nomination form, no further endorsement was made in

the check list that he (proposed candidate) was required to file any

documents. Moreover, with regard to another candidate, Janaki Rout

35

in respect of 89-Athagarh Assembly Constituency, the Returning

Officer stated that he asked him to file the document which he had

not filed along with the nomination paper by 3.00 p.m. at the latest. In

respect of yet another candidate Bijaya Kumar Biswal, in the check

list, he had endorsed therein that the certified extract of the electoral

roll was not filed and asked him to file the same at 11.00 a.m. on April

6, 2009 at the latest. It is, thus, seen that the Returning Officer was

conscious of his duties as per the statutory provisions and the

guidelines issued by the Commission by way of handbook. On

presentation of nomination papers by respective candidates wherever

deficiencies were found, he made endorsement in the check list and

gave them time to make up the deficiency as per law. A careful

consideration of the evidence of Returning Officer leaves no manner

of doubt that he has not distorted the facts nor withheld anything from

the court with regard to presentation of nomination papers by the

candidates including the proposed candidate. The evidence on

record, i.e, the evidence of the Returning Officer, the documentary

evidence, namely, the check list, Form 3A displayed on the notice

board, the consolidated list of nominated candidates and the

evidence of PW-2 clearly establish that original Form-A and Form-B

signed in ink by authorised officer of the party (BJD) were presented

36

by the proposed candidate along with 1st set of nomination paper on

April 4, 2009. The finding returned by the High Court in this regard

cannot be said to be wrong or unjustified.

51. It is a fact that the original Forms A and B were not

available on record before the Returning Officer on April 6, 2009 at

the time of scrutiny. However, we are not persuaded by the

submission made on behalf of the returned candidate that in the

absence of original Forms A and B on record, the Returning Officer

had to proceed on the basis of records available before him on that

day and he had no option but to reject the nomination. The least

expected of the Returning Officer, when he found that original forms

A and B were not available on record, was to make brief enquiry

about non-availability of the forms A and B. It was all the more

necessary as the nomination papers along with accompanying

documents were sent for xeroxing.

52. Section 83 of the 1951 Act requires that an election

petition shall contain a concise statement of the material facts on

which the petitioner relies. It has been repeatedly held by this Court

that Section 83 is peremptory. In Samant N. Balakrishna, etc. v.

George Fernandez and others etc. 3, this Court observed in para 29

(Pg. 1212) of the Report thus:

3 AIR 1969 SC 1201

37

“………The section is mandatory and requires first a

concise statement of material facts and then requires the

fullest possible particulars. What is the difference between

material facts and particulars? The word `material’ shows

that the facts necessary to formulate a complete cause of

action must be stated. Omission of a single material fact

leads to an incomplete cause of action and the statement

of claim becomes bad. The function of particulars is to

present as full a picture of the cause of action with such

further information in detail as to make the opposite party

understand the case he will have to meet. There may be

some overlapping between material facts and particulars

but the two are quite distinct……….”

53. In Azhar Hussain v. Rajiv Gandhi4, this Court held that an

election petition must be dismissed if the mandatory requirements

enjoined by Section 83 to incorporate the material facts and

particulars relating to alleged corrupt practice in the election petition

are not complied with.

54. In Hari Shanker Jain v. Sonia Gandhi5, this Court

reiterated the mandatory provision contained in Section 83(1)(a) of

the 1951 Act and observed therein that the material facts required to

be stated are those facts which can be considered as materials

supporting the allegations made. In other words, this Court said that

they must be such facts as would afford the basis for the allegations

made in the petition and would constitute the cause of action as

understood in the Code of Civil Procedure, 1908.

4 AIR 1986 SC 1253

5 (2001) 8 SCC 233

38

55. A 3-Judge Bench of this Court in Pothula Rama Rao v.

Pendyala Venakata Krishna Rao and Others6, stated in paragraph 8

(at Pg. 6) of the Report as follows :

“If an election petitioner wants to put forth a plea that a

nomination was improperly rejected, as a ground for

declaring an election to be void, it is necessary to set out

the averments necessary for making out the said ground.

The reason given by the Returning Officer for rejection and

the facts necessary to show that the rejection was

improper, should be set out. If the nomination had been

rejected for non-compliance with the first proviso to Sub-

section (1) of Section 33, that is, the candidate’s

nomination not being subscribed by ten voters as

proposers, the election petition should contain averments

to the effect that the nomination was subscribed by ten

proposers who were electors of the Constituency and

therefore, the nomination was valid. Alternatively, the

election petition should aver that the candidate was set up

by a recognized political party by issue of a valid ‘B’ Form

and that his nomination was signed by an elector of the

Constituency as a proposer, and that the rejection was

improper as there was no need for ten proposers. In the

absence of such averments, it cannot be said that the

election petition contains the material facts to make out a

cause of action.”

56. In a recent decision in Nandiesha Reddy v. Kavitha

Mahesh7, this Court observed that where election petitioner alleges

improper rejection of his/her nomination paper by the Returning

Officer, he/she must set out in election petition reasons given by the

Returning Officer for refusal to accept nomination paper and facts

necessary to show that refusal was improper. In paragraphs 36 and

37 of the Report (at Pg. 734), this Court held as under :

6 (2007) 11 SCC 1

7 (2011) 7 SCC 721

39

“36. Section 83 (1)(a) inter alia provides that an election

petition shall contain a concise statement of the material

facts. Further, Section 87 of the Act provides that subject to

the provisions of the Act and the Rules framed thereunder

every election petition shall be tried in accordance with the

procedure applicable under the Code of Civil Procedure to

the trial of suits. Order VI of the Code of Civil Procedure is

devoted to the pleadings generally and Rule 2(i) thereof,

inter alia, provides that every pleading shall contain a

statement in a concise form of all the material facts on

which the party pleading relies for claim. In an election

petition, which does not contain material facts, no relief can

be granted.

37. The phrase “material fact” as used in Section 83 (1)

(a) of the Act or Order 6 Rule 2 of the Code of Civil

Procedure has not been defined in the Act or the Code of

Civil Procedure. In our opinion all specific and primary facts

which are required to be proved by a party for the relief

claimed are material facts. It is settled legal position that all

material facts must be pleaded by the party on which the

relief is founded. Its object and purpose is to enable the

contesting party to know the case which it has to meet. An

election petition can be summarily dismissed if it does not

furnish the material facts to give rise to a cause of action.

However, what are the material facts always depend upon

the facts of each case and no rule of universal application

is possible to be laid down in this regard.”

57. In view of the above legal position, there is no doubt that

in a case under Section 100(1)(c) of the 1951 Act, the only issue

before the Court is improper rejection of nomination paper and the

court is required to examine the correctness and propriety of the

order by which the nomination paper of a candidate is rejected. The

grounds set out in the election petition challenging the order of

rejection of nomination paper, thus, form the basis of adjudication in

the election petition.

40

58. The learned senior counsel for the appellant submitted

that the material facts relating to the ground on which election of the

returned candidate has been set aside have neither been pleaded in

the election petition nor have been proved by leading cogent

evidence. We do not find any merit in this contention.

59. In the Election Petition No. 4 of 2009 filed by the

proposed candidate, the order of rejection of nomination has been

assailed, inter alia, on the following grounds:

“5(C) That the reasonings given in the decision of the

Retuning Officer, in his order of rejection dtd.

06.04.2009 is also not legally sustainable for the

following reasons :-

(a) The Nominee of B.J.D. Nominee for 87-BARAMBA

Assembly Constituency was submitted on 03.04.2009. The

Returning Officer had the occasion to examine the same and grant

the Check List on 03.04.2009 i.e. one day before the submission

of the Nomination of the Election Petitioner, whereas the Election

Petitioner submitted his Nomination on 04.04.2009. If according to

the Returning Officer, “from comparison of two sets of Form A & B

submitted in 87- BARAMBA, he came to conclusion that the set of

Form A & B, submitted by the Election Petitioner along with his

first set of Nomination was not original and not signed in ink but a

xerox copy, then in ordinary course of human conduct and in view

of instruction of the Election Commission”, he would have

recorded an endorsement to that effect in the CHECK LIST which

he himself gave at 11.45 AM on 04.04.2009, and would have

further called upon the Election Petitioner to produce the same by

3 PM on the same day.

(b) The Returning Officer instead of making a comparison

with the Form A & B submitted along with the Nominations of 87-

BARAMBA, should have referred to the Form A & B, which was

communicated both to him & to the CEO under the provisions of

Election Symbol (Reservation & Allotment) Order – 1968.

41

5(D) That a plain reading of four Orders of rejection

recorded by the Returning Officer on four sets of

Nominations submitted by the Election Petitioner

spells out so much so discrepancy that the same itself

is sufficient to conclude that the order suffers from

inconsistency and is an outcome of non application of

mind.

5(E) That on the date of scrutiny no objection was raised

by any of the contesting candidates or any person on

their behalf present at the time and place of scrutiny

to the effect that the Form A & B, filed by the Election

Petitioner with his first set of “NOMINATION” were not

original not it contains the signature of the authorised

person IN INK were Xerox copies.

The complaint was raised by the Returning Officer

himself who had received all the four sets of

Nominations, along with other affidavits, documents

original money receipt and original Form A & B, duly

signed in ink, by the authorised person, and had

signed the CHECK LIST which is a document

required to be signed & delivered to the candidate in

exercise of his statutory powers on 04.04.2009. The

partisan attitude and hostility of the Returning Officer

towards the Election Petitioner emanates from his

own conduct, when he refused minimum opportunity

to the Election Petitioner to REBUT the so called

allegations regarding non-submission of original Form

– A & B containing signature of authorised person in

ink, which a candidate is entitled to as of right under

the Rules of Election Law.”

60. The High Court, inter alia, considered the evidence of

PW-2 and also the evidence of the Returning Officer, the

documentary evidence, namely, the check list (original-exhibit 11),

Form 3-A (exhibit 42/F) and consolidated list of nominated candidates

42

–checks IF (exhibit-44) and the contentions of the returned

candidate and held as under :

“13. As found from the evidence of P.Ws 1 and 2, the

latter filed four sets of Nomination along with other

accompanying documents. In the 1st set of Nomination

Papers, he filed original ink signed Form A and Form B.

Accordingly, the Returning Officer issued the Check List to

Sri Ranendra Pratap Swain. They further deposed that

while handing over the Check List, the Returning Officer

stated that “whatever original forms and documents that

you have submitted and I have received from you have

been clearly mentioned by me in the Check List. You

preserve the Check List with you. If in fact the Returning

Officer had stated so, it being a material fact, the same

should have been averred in the election petition. In

absence of pleading this part of evidence of P.Ws 1 and 2

cannot be relied upon. According to the evidence of

Returning Officer, on examining the documents on

technical stand point, he found the election Petitioner, Sri

Ranendra Pratap Swain to have filed all required

documents and accordingly he issued the Check List

marked Ext. 22 to him. He fairly admitted in his evidence

that he can distinguish a xerox copy from its original. He

further deposed that had it come to his notice that Sri

Ranendra Pratap Swain filed the xerox copies of the

original ink signed Form A and Form B, he would have

endorsed it in the bottom of the Check List and directed

him to file the original ones. Again on 04.04.2009 after the

time fixed for filing the Nomination Papers was over, he

prepared copy of those documents in Form 3A to publish in

the notice board. At that time also he could not detect the

filing of Xerox Copies of the original ink signed Form A and

Form B. Furthermore, when he prepared the consolidated

“List of Nominated Candidates-Checks if”. He could not

detect the so called defect. He mentioned the symbol

“Conch” in the appropriate column of the said form so also

the name of political party, which set up the candidate, Sri

Ranendra Pratap Swain. Since the signature of P.W. 1 the

proposer of Ranendra Pratap Swain, partially got effected,

the Returning Officer asked him to put another signature

and accordingly he did it. When the Returning Officer was

alive to find out an effaced signature in the Nomination, it

appears some what fishy how he filed to detect the Xerox

43

copies of the original ink signed Form A and Form B, if

filed. The original ink signed Form A and Form B, if filed.

The contention of learned counsel for the respondent that

there was no pleading with regard to Form 3A and

consolidated “List of Nominated Candidates-Checks If” in

either of the election petitions and as such the same

cannot be relied upon cannot be accepted. It is the

fundamental rule of pleadings that pleading must contain a

statement of the material facts, but not the evidence by

which they are to be proved. In the present case, it has

been averred in the election petitions that Shri Ranendra

Pratap Swain filed the Nomination along with required

documents including original Form A and Form B ink

signed, before the Returning Officer. Moreover, Form 3A

and consolidated “List of Nominated Candidates-Checks if”

have been admitted as Exts. 42/f and 44 respectively

without objection. So their validity cannot be questioned.

As per the decision State of Orissa and others (supra) their

probative value is also very high. Even if those documents

were not referred to in the election petitions, the evidence

led in that respect can be accepted.”

61. The High Court finally concluded that the proposed

candidate had filed the original Form-A and Form-B duly signed in ink

by the authorised person of BJD with the first set of his nomination

and, accordingly, decided Issue No. 6 in favour of election petitioners.

The consideration of the matter by the High Court in para 14 of the

judgment may be reproduced as it is.

“14. No doubt at the time of filing of Nomination, the

Returning Officer is not required to scrutinize the

Nomination and the accompanying documents in minor

details, but he is duty bound to examine the same on

technical stand point. Now the pertinent question is

whether he was expected to examine whether the original

ink signed Form A and Form B were filed, while examining

the Nomination Paper along with the accompanying

documents, on technical stand point. In my considered

44

opinion, he had to do so, particularly when he deposed that

had it come to his notice that Sri Ranendra Pratap Swain

filed the Xerox copies of the original ink signed Form-A and

Form-B, he would have endorsed it in the bottom of the

Check List and directed him to file the original ones. At this

stage Mr. Palit, learned counsel for the respondent

submitted that unless, an election petitioner fully

established his case, it would not be proper to set aside the

election. In support of his submission, he relied on the

decision in the case of Ram Phal Kundu Vs. Kamal

Sharma, AIR 2004 Supreme Court 1657, where the apex

Court held as follows.

“Therefore, unless the election petitioner fully

established his case, it will not be legally correct to set

aside the election of the appellant.”

As found from the evidence of P.Ws. 1 and 2 the latter filed

the original ink signed Form A and Form B in his 1st set of

Nomination. This part of their evidence could not be

shaken. Even no suggestion was given to P.W. 1 that P.W.

2 did not file original ink signed Form A and Form B in his

1st set of Nomination. So, the above decision is not

applicable to the present case.

The Returning Officer has admitted in his evidence that the

Nominations along with all the accompanying documents

of all the eight candidates were Xeroxed outside in Anand

Xerox of Athagarh. He has also admitted that on

04.04.2009 all the four sets of Nomination papers of Sri

Ranendra Pratap Swain were Xeroxed to display the same

in his Notice Board. The possibility that, in the process the

original ink signed Form A and Form B were inadvertently

exchanged for the Xerox copies thereof, cannot be ruled

out. Under such premises, in my considered opinion, Sri

Ranendra Pratap Swain had filed the original Form-A and

Form-B duly signed in ink by the authorised person with the

1st set of his Nomination. Accordingly, issue no. 6 is

answered in affirmative.

62. In what we have already discussed above, we do not find

any error in the consideration of the matter by the High Court.

45

63. The election petitioner, as noticed above, in ground 5(E)

set up the case that the objection of non-filing of original Forms A and

B signed in ink by the authorised officer of the party was not raised by

any of the contesting candidates or any person on their behalf

present at the time and place of scrutiny. It was the Returning Officer

who raised the issue of non-filing of original Forms A and B but he

refused minimum opportunity to the election petitioner to rebut the

same. In our view, the Returning Officer ought to have acted in terms

of proviso to Section 36(5) of the 1951 Act and afforded an

opportunity to the election petitioner until next day to rebut the

objection and show to the Returning Officer that the proposed

candidate had filed Forms A and B duly singed in ink by the

authorised person of BJD. PW-3, the authorised representative of the

election petitioner did state in his evidence that he requested to the

Returning Officer, when he raised the objection that original Forms A

and B were not filed, to enquire into the matter about the missing

Forms A and B. It was not necessary to state in the election petition

the evidence of PW-3 in support of ground 5(E).

64. The proviso that follows sub-section (5) of Section 36 of

the 1951 Act provides that in case an objection is raised by the

returning officer or is made by any other person the candidate

46

concerned may be allowed time to rebut it not later than the next day

but one following the date fixed for scrutiny, and the returning officer

shall record his decision on the date to which the proceedings have

been adjourned.

65. In Rakesh Kumar v. Sunil Kumar8, this Court held in para

21 (Pg. 500) as under:

“21. ………The use of the expression “not later than the

next day but one following the date fixed for scrutiny”

under the proviso to Sub-section (5) of Section 36 of the

Act un-mistakably shows that the Returning Officer has

been vested with the discretion to fix time to enable a

candidate to rebut an objection to the validity of his

nomination paper and such a discretion has to be fairly

and judicially exercised. The refusal to grant an

opportunity to the respondent and rejecting his nomination

paper was clearly an arbitrary exercise of the discretion

vested in the Returning Officer. The Returning Officer has

also not given any cogent reasons for his refusal to grant

an opportunity as prayed for by the respondent. The

Returning Officer appears to have been labouring under

some misconception when he recorded that the political

party “cannot be given further time to change such

authorisation after scrutiny”. Under the proviso to Section

36(5) of the Act, the scrutiny itself would have been

postponed to the adjourned time and, therefore, it was not

a case of meeting the objection after scrutiny of the

nomination papers. The failure to exercise his jurisdiction

to postpone the decision as to the validity of the

nomination paper of the respondent, even after the

respondent had sought time to meet the objection, indeed

rendered the rejection of the nomination paper of the

respondent as both improper and illegal. The Returning

Officer is not expected to reject a nomination paper,

without giving an opportunity to the candidate or his

representative present at the time of scrutiny to meet an

objection, capable of being met, particularly where such

an opportunity is sought for by the candidate or his

8 (1999) 2 SCC 489

47

representative and no one present on behalf of the other

candidates had opposed the claim made by the

respondent. Having raised the objection suo motu, the

request of the respondent who was present and sought

time in writing to seek clarification from the BJP as to who

was its official candidate, the Returning Officer in all

fairness was obliged to grant time to the respondent as

prayed for by him and postponed the scrutiny to the next

day but he ought not to have rejected his nomination

paper in hot haste. The Returning Officer, obviously, failed

to exercise his jurisdiction under Section 36(5) of the Act

properly and thereby fell in a grave error in rejecting the

nomination paper of the respondent……….”

66. In the facts and circumstances of the present case,

which have already been noticed above, the Returning Officer erred

in acting in hot haste in rejecting the nomination paper of the

proposed candidate and not postponing the scrutiny to the next day,

particularly, when a request was made by the authorised

representative of the proposed candidate. The election petitioners

have been successful in proving the improper rejection of the

proposed candidate’s nomination paper. In other words, they have

been able to prove the ground for setting aside appellant’s election

to 89-Athagarh Assembly Constituency under Section 100(1)(c) of

the 1951 Act.

67. The consideration of the matter by the High Court does

not suffer from any factual or illegal infirmity. In this view of the

48

matter – and the factual and legal position discussed above – we

see no ground to interfere with the impugned judgment.

68. The appeals, accordingly, fail and are dismissed with no

order as to costs.

………………………J

(R.M. LODHA)

………………………………..J.

(JAGDISH SINGH KHEHAR )

NEW DELHI

DECEMBER 9, 2011.

49

M/S Reva Electric Car Co.P.Ltd vs M/S Green Mobil on 25 November, 2011

Last Updated on

Supreme Court of India
M/S Reva Electric Car Co.P.Ltd vs M/S Green Mobil on 25 November, 2011
Bench: Surinder Singh Nijjar
                                                                                           REPORTABLE




                      IN THE SUPREME COURT OF INDIA

                        CIVIL ORIGINAL JURISDICTION




                  ARBITRATION PETITION NO.18 OF 2010




M/s. Reva Electric Car Co. P. Ltd.                                ...Petitioner


                                 VERSUS


M/s. Green Mobil                                                  ...Respondent





                                       O R D E R

SURINDER SINGH NIJJAR, J.

1. The petitioner has filed the present application under Sections

11(4) and (6) of the Arbitration and Conciliation Act, 1996 read with

paragraph 2 of the Appointment of the Arbitrators by the Chief Justice of

India Scheme, 1996. It is stated that the parties had entered into a

legally valid and enforceable Memorandum of Understanding (`MOU’)

– 1 –

dated 25th September, 2007, providing, inter alia, for the respective

obligation of both the parties in connection with the marketing of the

cars of the petitioner. Though the term of the MOU was till December,

2007, it was extended by the acts of the parties in terms of Clause 2 of

the MOU.

2. The petitioner makes a reference to various requests made by the

respondent for supply of cars in terms of MOU on 22nd April, 2008; 24th

August, 2008; and 1st April, 2009. The petitioner further claims that

some time in September 2009, disputes arose between the parties.

Numerous e-mails were exchanged between the parties, apart from

the personal discussions between their representatives, touching and

covering the disputes. It is the petitioner’s claim that during the term of

MOU, merely 15 cars of the petitioner had been sold in the Belgium

Region. The petitioner, therefore, claimed that the respondent did not

have in place the necessary resources to build the brand of the

petitioner. Consequently, through e-mail dated 25th September, 2009 the

petitioner requested the respondent to immediately cease sales and

– 2 –

marketing activities on its behalf and take necessary steps of providing

after sales and service to existing car owners, till such time the

petitioner appointed its new distributor. The petitioner claims that the

aforesaid e-mail duly constituted the termination of the contractual

relationship between the parties as covered under the MOU.

3. As a consequence of the aforesaid termination, the parties have

exchanged various e-mails raising claims and counter claims on 6th /7th

/8th October, 2009.

4. The petitioner further claims to have received a Writ of Summons

dated 14th January, 2010 of legal proceedings initiated by the

respondent in Belgium before the First Divisional Court, Room A of the

Commercial Court in Brussels. According to the petitioner, the claims

made by the respondent before the Commercial Court, Brussels disclose

that the respondent instituted the legal proceedings inter alia claiming

damages from the petitioner on account of termination of the MOU dated

25th September, 2007. On 15th March, 2010, the counsel for the

– 3 –

respondent sent an e-mail communication that the respondent was

willing to negotiate a global settlement with the petitioner and that the

respondent through its counsel would be available to discuss any such

proposal. According to the petitioner, the aforesaid communication also

acknowledges the fact that the rights and obligation of both the parties

were covered by the distributorship agreement, i.e. the MOU, which

stood duly terminated.

5. The petitioner thereafter issued a notice dated 24th March, 2010

through its counsel in terms of Clause 11 of the MOU invoking

arbitration under the MOU and referring all disputes between the parties

to arbitration. The petitioner in fact nominated Mr. Justice Jayasimha

Babu (Retired) as the Sole Arbitrator, and failing confirmation by the

respondent, as the arbitrator of the petitioner on the three member

Arbitral Tribunal to be constituted in terms of Clause 11.

– 4 –

6. The respondent through its counsel sent a reply to the notice dated

7th April, 2010 denying existence of any contractual relationship between

the parties on the date of termination of MOU on 25th September, 2009.

7. The petitioner, therefore, filed Arbitration Application No.576 of

2010 under Section 9 of the Arbitration and Conciliation Act, 1996

before the Court of the Principal City Civil & Sessions Judge at

Bangalore praying for an order of injunction restraining the respondent

from proceeding with the legal proceedings initiated before the First

Divisional Court, Room A of Commercial Court of Brussels, Belgium.

8. The petitioner had also moved I.A.No.1 in the aforesaid suit dated

19th April, 2010 seeking an order of temporary injunction which was

granted by the Principal City Civil & Sessions Judge at Bangalore on 21st

April, 2010. Thereafter the petitioner has moved the present application

for appointment of the Arbitrator in terms of Clause 11 of the MOU

which reads as under:-

“11. Governing Law and Jurisdiction

– 5 –

i. This MOU shall be construed and enforced in accordance

with the laws of India.

ii. In the event of any dispute or difference arising at any

time between the parties hereto as to the construction,

meaning or effect of this Agreement or thing contained herein

or the rights, duties, liabilities and obligations of the parties

hereto in relation to this Agreement, the same shall be referred

to a single arbitrator, in case the parties can agree upon one

(1) within a period of thirty days upon being called by a party

to do so and failing such agreement to three (3) arbitrators one

(1) each to be appointed by GREENMOBIL and RECC and the

third to be appointed by the two arbitrators so appointed. The

award passed by such arbitrator(s) shall be final and binding

on both the parties.

All such arbitration proceedings shall be held in Bangalore as

per the Arbitration and Conciliation Act, 1996 as amended

from time to time.”

9. In reply to the aforesaid petition, the respondent claimed that the

MOU dated 25th September, 2007 expired on 31st December, 2007. The

petition does not clearly set out the claim or the period of the claim but

the documents and implication of the contents of the present petition

seem to indicate that the claim of the petitioner is in respect of the

commercial distribution of the cars which commenced from 1st January,

2008 i.e. after the expiry of Memorandum of understanding. It is also the

plea of the respondent that the MOU relate to a test and trial period

– 6 –

which came to an end on 31st December, 2007, after which the parties

decided to enter into a distribution agreement which was sent by the

petitioner to the respondent on 15th November, 2007, i.e., 15 days prior

to the expiry of the MOU. Therefore, the arbitration clause relied upon by

the petitioner does not cover any disputes/claims that relate to any

period beyond 31st December, 2007. It is further claimed that the

petition is only a counterblast to the proceedings filed by the respondent

before the Commercial Court at Brussels. This, according to the

respondent, is evident from the fact that the respondent had instituted

the proceedings in the Commercial Court at Brussels on 14th January,

2010; the petitioner was intimated about the said proceedings vide e-

mail dated 15th March, 2010; and the notice invoking the arbitration

clause in the MOU is dated 24th March, 2010. It is, therefore, clear that

the arbitration clause is invoked only to avoid proceedings before the

Commercial Court at Brussels. It is emphasised that the proceedings

before the Commercial Court at Brussels related to the period beyond

the MOU when the parties had commenced work of distributorship or

dealership after the test trial period under the MOU had come to an end.

– 7 –

10. I have heard the learned counsel for the parties.

11. Mr. Narasimha, learned senior counsel appearing for the petitioner

submits that the averments made by the respondent in reply to the

petition make it abundantly clear that the disputes pertained to the

MOU dated 25th September, 2007. According to the learned counsel,

there was no fresh agreement entered into between the parties. Cars

were being supplied to the respondent in terms of Clause 2 of the MOU.

Making a reference to Clause 2, learned counsel submits that the

aforesaid clause makes it clear that the MOU was effective for a period of

three to six months, from the date of arrival of the cars in Belgium. This

term was to be considered as the trial period. On completion of the trial

period but not later than 3rd December, 2007, the parties were to

mutually decide to continue the marketing, sales, and service of the

work hours by the respondent. They were also to enter into a fresh long

term agreement on mutually agreed terms and conditions. He submits

that till the date of the termination of the MOU, no fresh agreement had

– 8 –

been entered into between the parties. Relying on the last sentence of

the Clause 2, Mr. Narasimha submits that it was the sole discretion of

the petitioner to extend the MOU in case the petitioner believed that the

additional time is required to complete the trial period. The aforesaid

portion of Clause 2 is as under :-

“RECC, at its sole discretion, may decide to extend the MOU if

RECC believes that additional time is required to complete the

trial period.”

12. He further submits that although the cars were being supplied to

the respondent but the petitioner was not satisfied with the progress

made in the number of cars sold by the respondent. Therefore, the

respondent was constrained to terminate the MOU, after a period of two

years from the commencement.

13. According to Mr. Narasimha, respondent has initiated the

proceedings in the Brussels Court only to pre-empt the initiation of legal

proceedings by the petitioner. He points out that the pleadings in the

Writ of Summons, clearly show: that the respondent was only concerned

with the effect of the termination and not the period of the MOU.

– 9 –

Respondent has admitted that the contractual relationship started in

2007. The respondent has admitted that there is no other subsequent

agreement. In Paragraph 18 of the Writ of Summons, the respondent

admits that the contractual relationship was subsisting till September,

2009. In Paragraph 30, it is admitted by the respondent that “the party

summoned below terminated the contract in an untimely and brutal

manner on 25th September, 2009”.

14. He points out that the disputes have arisen in relation to the

termination of the MOU and the consequences thereof. Such disputes

are clearly covered by the arbitration clause which clearly provides for

resolution of disputes through arbitration. The clause provides that in

the event of any dispute or difference arising at any time between the

parties in relation to the agreement shall be referred to a Sole Arbitrator.

The clause, according to the learned senior counsel, is not limited to the

disputes relating only to the initial period of the MOU till

31st December 2007.

– 10 –

15. He submits irrespective of whether the MOU is now in existence or

not, the Arbitration clause would survive. He relies on the decisions of

this Court in the cases of Bharat Petroleum Corporation Ltd. Vs.

Great
Eastern Shipping Company Ltd.1
and Everest Holding Limited

Vs. Shyam
Kumar Shrivastava & Ors.2
He further submits that this

Court is required to refer the disputes between the parties to the Sole

Arbitrator, without any in-depth examination of the disputes. The Court

is merely to be satisfied that the disputes fall within the ambit of the

Arbitration Clause. In support of this submission, he relies on the

judgment of this Court in Brigadier Man Mohan Sharma, FRGS (Retd.)

Vs. Lieutenan
t General Depinder Singh3
. He also relies on the

judgment in the case of National Insurance Company Limited Vs.

Boghara
Polyfab Private Limited4
, in support of the submission all

disputes are such which need to be decided by the Sole Arbitrator on

merits, and can not be decided by this Court in a petition under Section

11(4) and 6 of the Arbitration and Conciliation Act, 1996. Learned

1 2008 (1) SCC 503

2 2008 (16) SCC 774

3 2009 (2) SCC 600

4 2009(1) SCC 267

– 11 –

counsel further submits that in accordance with the aforesaid clause the

petitioner had already nominated the Sole Arbitrator. The respondent

has, however, not accepted the aforesaid arbitrator. At the same time, it

had expressed its willingness to negotiate the global settlement with the

petitioner.

16. On the other hand, Ms. Tasneem Ahamadi, has submitted that the

MOU having come to an end by efflux of time, there was no question of

any termination as claimed by the petitioner. She further submits that

the notice invoking arbitration was sent only as a counterblast to the

summons received by the petitioner from the Brussels Commercial

Court. Learned counsel further submitted that the disputes which form

the basis of the claim in the Brussels Commercial Court pertained to a

period subsequent to the period covered by the MOU. The arbitration

clause in the MOU relates only to disputes which relate to the test and

trial period. Hence, an arbitrator can not be appointed for settlement of

disputes which occurs / relate to a period after 31st December, 2007.

The disputes raised before the Commercial Court at Brussels are not

– 12 –

covered by the arbitration clause in the MOU. She had made a detailed

reference to numerous e-mails exchanged between the parties to submit

that the parties had in fact entered into a long term contract. This was

only to be reduced to a formal document. Since the disputes are not

covered by the arbitration clause, there can be no reference. In support

of the aforesaid submission, learned counsel relies on a judgment of this

Court in the case of SBP & Co. Vs. Patel
Engineering Ltd. & Anr.5
.

In view of the law laid down in the aforesaid judgment, according to the

learned counsel, the arbitration petition deserves to be dismissed.

17 I have considered the submissions made by the learned counsel for

the parties. It appears that the submissions made by Ms. Ahamadi that

the question with regard to the existence of a valid arbitration agreement

would have to be decided by this Court, is not without merit. This Court

has on a number of occasions examined the scope and ambit of the

jurisdiction of the Chief Justice or his designate under Section 11 of the

Arbitration and Conciliation Act, 1996. A reference in this connection

5 2005 (8) SCC 618

– 13 –

can be made to the judgment of this Court in SBP & Co. (supra) wherein

a Constitution Bench of this Court has clearly held as under:

“39. It is necessary to define what exactly the Chief Justice,

approached with an application under Section 11 of the Act, is

to decide at that stage. Obviously, he has to decide his own

jurisdiction in the sense whether the party making the motion

has approached the right High Court. He has to decide

whether there is an arbitration agreement, as defined in the

Act and whether the person who has made the request before

him, is a party to such an agreement. It is necessary to

indicate that he can also decide the question whether the

claim was a dead one; or a long-barred claim that was sought

to be resurrected and whether the parties have concluded the

transaction by recording satisfaction of their mutual rights

and obligations or by receiving the final payment without

objection. It may not be possible at that stage, to decide

whether a live claim made, is one which comes within the

purview of the arbitration clause. It will be appropriate to leave

that question to be decided by the Arbitral Tribunal on taking

evidence, along with the merits of the claims involved in the

arbitration. The Chief Justice has to decide whether the

petitioner has satisfied the conditions for appointing an

arbitrator under Section 11(6) of the Act. For the purpose of

taking a decision on these aspects, the Chief Justice can either

proceed on the basis of affidavits and the documents produced

or take such evidence or get such evidence recorded, as may

be necessary. We think that adoption of this procedure in the

context of the Act would best serve the purpose sought to be

achieved by the Act of expediting the process of arbitration,

without too many approaches to the court at various stages of

the proceedings before the Arbitral Tribunal.”

– 14 –

In the case of National Insurance Co. Ltd. (supra), this Court again

examined the question with regard to the scope of the jurisdiction under

Section 11(6). In doing so, this Court explained the ratio of the

Constitution Bench in SBP & Co. (supra). In Para 21 of the Judgment,

the power of the Arbitral Tribunal in cases where the disputes are

referred to arbitration without the intervention of the court has been

distinguished from the power in matters where the intervention of the

court is sought for appointment of an Arbitral Tribunal. In case where

the matters are sought to be referred to arbitration without the

intervention of the court it has been held that the Arbitral Tribunal

can decide the following questions affecting its jurisdiction: (a) whether

there is an arbitration agreement; (b) whether the arbitration agreement

is valid; (c) whether the contract in which the arbitration clause is found

is null and void, and if so, whether the invalidity extends to the

arbitration clause also.

18. In matters, where the intervention of the Chief Justice of India has

been sought for appointment of a sole arbitrator under Section 11(4), (5)

– 15 –

and (6) of the Arbitration Act, 1996, the Chief Justice or his designate

will have to decide certain preliminary issues. It would be apposite to

notice here the relevant observations made in Para 22, which are as

follows :-

“22. This Court identified and segregated the preliminary

issues that may arise for consideration in an application

under Section 11 of the Act into three categories, that is, (i)

issues which the Chief Justice or his designate is bound to

decide; (ii) issues which he can also decide, that is, issues

which he may choose to decide; and (iii) issues which should

be left to the Arbitral Tribunal to decide.

22.1. The issues (first category) which the Chief Justice/his

designate will have to decide are:

(a) Whether the party making the application has approached

the appropriate High Court.

(b) Whether there is an arbitration agreement and whether the

party who has applied under Section 11 of the Act, is a party

to such an agreement.

22.2. The issues (second category) which the Chief Justice/his

designate may choose to decide (or leave them to the decision

of the Arbitral Tribunal) are:

(a) Whether the claim is a dead (long-barred) claim or a live

claim.

(b) Whether the parties have concluded the

contract/transaction by recording satisfaction of their mutual

rights and obligation or by receiving the final payment without

objection.

– 16 –

22.3. The issues (third category) which the Chief Justice/his

designate should leave exclusively to the Arbitral Tribunal are:

(i) Whether a claim made falls within the arbitration clause (as

for example, a matter which is reserved for final decision of a

departmental authority and excepted or excluded from

arbitration).

(ii) Merits or any claim involved in the arbitration. ”

These observations were further reiterated by this Court in the case of

A.P. Tourism Development Corporation Ltd. Vs. Pampa Hotels Ltd.6.

The aforesaid ratio of law has been reiterated by this Court in Alva

Aluminium Limited, Bangkok Vs. Gabriel India Limited7. Upon

consideration of the entire case law, it has been observed as follows :-

“18. It is in the light of above pronouncements, unnecessary

to delve any further on this issue. It is clear that once the

existence of the arbitration agreement itself is questioned by

any party to the proceeding initiated under Section 11 of the

Act, the same will have to be decided by the Chief

Justice/designate as the case may be. That is because

existence of an arbitration agreement is a jurisdictional fact

which will have to be addressed while making an order on a

petition under Section 11 of the Act.”

6 [2010 (5) SCC 425].

7 [2011 (1) SCC 167].

– 17 –

19. In view of the aforesaid authoritative dicta, the submission of Ms.

Ahamadi has to be accepted that in a petition under Sections 11(4)(5)(6)

and (9) of the Arbitration Act, 1996, it is for the Chief Justice of

India/his designate to decide about the existence of a valid arbitration

agreement. Now let me examine the facts in the present case keeping in

view the aforesaid well settled principles.

20. There is no dispute that the parties had entered into a legally valid

and enforceable MOU dated 25th September, 2007. There is also no

dispute that Clause 11 provides that disputes arising between the

parties, at any time, in relation to the MOU, shall be referred to

arbitration. Clause (2) of the MOU, undoubtedly, fixes the trial period

upto 31st December, 2007. However, the clause also provides that the

petitioner may unilaterally decide to extend the MOU, if it considers

necessary. The correspondence between the parties would show that the

petitioner had proposed a draft distribution agreement to the respondent

for discussion. Thereafter, a series of e-mails were exchanged between

the parties, but making it apparent that no final consensus was reached.

– 18 –

It would, therefore, appear that the MOU was duly extended till it was

terminated as averred by the petitioner.

21. The petitioner has categorically pleaded that the MOU was

terminated on 25th September, 2009. The petitioner has placed on record

the e-mail dated 25th September, 2009 in which it is clearly stated that

MOU was entered into on 25th September, 2007 for a test period of

six months from the date of arrival of the trial cars. It is further stated

that this period was extended on an informal and voluntary basis by the

petitioner for a period extending to two years from the date of signing of

the MOU. During this two years period, a total of 15 REVA cars have

been sold. It is pointed out that inspite of the best efforts of the

respondent and the efforts of the petitioner to support the respondent,

following a review of the European operations it is believed that the

respondents do not have in place the resources to build the REVA brand,

invest in the appropriate infrastructure, obtain necessary fiscal and/or

subsidy and infrastructure support and are not adequately prepared to

launch the M1 vehicles introduced by REVA at the Frankfurt IAA.

– 19 –

Thereafter it requests the respondents to immediately cease all sales and

marking activities on behalf of REVA brand. This termination of the

agreement has been acknowledged by the respondents in its e-mail

dated 7th October, 2009. A perusal of this e-mail would also

demonstrate that the disputes had clearly arisen between the parties at

that time. The e-mail makes a grievance that the respondents had not

been notified of the termination of its dealership activities a few weeks

ago when it had informed the petitioner of its negotiations with potential

Dutch partners. The respondents also repeated its disappointment that

the win-win soft-landing solution it proposed on 25th September, 2009

was rejected by the petitioner. Rest of the correspondence between the

parties continues in the same tenor. Clearly, therefore, the MOU has

been extended till its termination on 25th September, 2009. It is also

evident that the parties had failed to reach any fresh agreement with

regard to sale of REVA cars in Europe by the respondents. In my

opinion, the pleadings and the material on record has clearly established

that there was a valid arbitration agreement incorporated in Clause 11 of

the MOU.

– 20 –

22. This takes me to the second submission of Ms.Ahamadi that, in

any event, the disputes cannot be referred to arbitration as it pertained

to a period subsequent to the term of the MOU. Mr.Narasimha has,

however, pointed out that according to the case pleaded by the

respondents in the Brussels Court which is evident from the writ of

summons, all the disputes pertained to the period prior to the

termination of the agreement by the petitioner. The writ of summons

clearly mentions as follows :

“Whereas the first cars of the make REVA were marketed in

India from June 2001 onwards, then in the UK in 2003 and

worldwide from 2007.

That the party summoned below had however promised the

arrival of more performing Lithium batteries that would be

installed in their vehicles from the middle of 2008, as well as a

new or more competitive and more attractive car model by the

end of 2008, the REVA `NXR’.

Whereas the contractual relationships between the petitioner

and the party summoned below started in 2007.

Whereas the distribution of the REVA cars by the petitioner

took place in two stage.

– 21 –

That during an initial period the petitioner ran a pilot project

for the party summoned below to assess the marketing

possibilities of the REVA on the Belgian market.

That after a certain period of time the petitioner became an

exclusive distributor of REVA cars for the BENULEX.”

23. The writ of summons further mentions that the petitioner had to

run a pilot project of three to six months to test the marketing

possibilities of the REVA cars on the Belgium market. It is further

pleaded that at the end of the test period and at the latest on 31st

December, 2007, the parties had to decide jointly whether the petitioner

would continue to provide the promotion, sales and service of REVA Cars

in Belgium within the framework of a long-term distribution contract.

The respondents further pleaded that :-

“Whereas, in spite of the absence of the signing of a written

contract between the parties, the petitioner de facto became

the exclusive distributor of REVA vehicles in the BENELUX

starting the month of January, 2008.”

24. Thereafter the respondents gave details of the efforts made by it for

marketing of the REVA Cars from January, 2008 onwards. In paragraph

19 of the writ of summons, it is clearly admitted as follows :-

– 22 –

“Whereas on the 25th of September, 2009, as soon as the first

REVA cars fitted with Lithium batteries and of the new REVA

NXR model arrive in Belgium the petitioner is going to be

ejected all of a sudden by the party summoned below.

That during a telephone conversation on 25th September,

2009, confirmed in an email of the same date the party

summoned below suddenly announced its decision to

terminate the concession granted to the petitioner for the

Belelux, with immediate effect;

That the party summoned below asked the petitioner to

immediately stop the sale and promotion of the REVA cars as

well as the use of the REVA mark.”

25. The claims made by the respondents clearly pertained to the

contract which was terminated on 25th September, 2009. In paragraph

30 of the writ of summons, it is pleaded as under :-

“That the parties summoned below terminated the contract in

any untimely and brutal manner on 25th September, 2009.”

26. On the aforesaid basis, the respondents claim compensation and

damages amounting to Euro 454,000.

27. The aforesaid averments and the material on record would clearly

demonstrate that the disputes that have arisen between the parties

– 23 –

clearly relate to the MOU dated 25th September, 2007. It would be for the

Arbitral Tribunal to decide as to whether claims made are within the

arbitration clause. The Arbitral Tribunal would also have to decide the

merits of the claim put forward by the respective parties. In view of the

material placed on record, it would not be possible to accept the

submissions of Ms. Ahamadi that the disputes were beyond the purview

of the arbitration clause.

28. A similar matter was examined by this Court in the case of Bharat

Petroleum Corporation Ltd. Vs. Great Eastern Shipping Co. Ltd.8 In

the aforesaid case, an agreement called time charter party was entered

into between the appellant and the respondent on 6th May, 1997 for

letting on hire vessels for a period of two years from 22nd September,

1996 to 30th June, 1997 and from 1st July, 1997 to 30th June, 1998. It

appears that certain disputes arose between the parties. Thereafter, on

the basis of the correspondence exchanged between the parties with

regard to the disputes, claims and counter claims were filed before the

8 (2008 (1) SCC 503).

– 24 –

Arbitral Tribunal. Issues were duly framed of which the following three

issues may be of some relevance in the present context viz.

“Issue 1.–Whether the Hon’ble Arbitral Tribunal has no

jurisdiction to adjudicate upon the dispute between the

claimant and the respondent for the period September 1998 to

August 1999 in respect of the vessel Jag Praja for the reasons

stated in Para 1 of the written statement?

Issue 2.–Whether there is any common practice that if the

vessel is not redelivered at the end of the period mentioned in

the time charter the vessel would be governed by the charter

party under which originally it was chartered?

* * *

Issue 5.–Whether the time charter party dated 6-5-1997 came

to an end by efflux of time on 30-8-1998? ”

29. The Arbitral Tribunal by its order dated 12th May, 2003 came to the

conclusion that the appellant having invoked the arbitration clause

contained in the charter party agreement dated 6th May, 1997, which

was valid upto 31st December, 1998 and as the dispute between the

parties related to the period subsequent to 31st August, 1998, they had

no jurisdiction to decide the reference. The tribunal held that the charter

party agreement dated 6th May, 1997 was superseded by a fresh

agreement. Therefore, original charter party dated 6th May, 1997 got

– 25 –

extinguished. The respondents challenged the said award before the

High Court. Learned Single Judge set aside the award and held that the

Arbitral Tribunal has the jurisdiction to adjudicate the disputes between

the parties as the vessel continued to be hired by the appellant for the

period subsequent to 31st August, 1998 on the same terms and

conditions, as were contained in charter party agreement dated 6th May,

1997. It was held that the charter party dated 6th May, 1997 did not

come to an end by efflux of time and it was extended by the party on the

same terms and conditions. Correctness of this order was challenged in

this Court. On examination of the entire fact situation, it was held as

follows :-

“19. It is, no doubt, true that the general rule is that an offer

is not accepted by mere silence on the part of the offeree, yet it

does not mean that an acceptance always has to be given in so

many words. Under certain circumstances, offeree’s silence,

coupled with his conduct, which takes the form of a positive

act, may constitute an acceptance–an agreement sub silentio.

Therefore, the terms of a contract between the parties can be

proved not only by their words but also by their conduct.”

– 26 –

30. Examining the fact situation in the present case, I am of the

opinion that the conclusion is inescapable that notwithstanding the

initial period under the MOU expiring by 31st December, 2007, the same

was extended by the petitioner in exercise of its discretion under Clause

(2) of the MOU. The extended MOU was terminated only on 25th

September, 2009. Therefore, it is not possible to accept the submission

of Ms. Ahamadi that the disputes arising between the parties cannot be

referred to the Arbitral Tribunal. In my opinion, Mr. Narasimha has

rightly submitted that the disputes have arisen in relation to the

termination of the MOU and the consequences thereof. Such disputes

would be clearly covered under the Arbitration clause which provides

that in the event of any dispute or difference arising at any time between

the parties in relation to the agreement shall be referred to a Sole

Arbitrator. The clause is clearly not limited to the disputes relating only

to the initial period of the MOU till 31st December, 2007.

31. I also find merit in the submission of Mr. Narasimha that

irrespective of whether the MOU is now in existence or not, the

– 27 –

arbitration clause would survive. The observations made by this Court

in the case of Everest Holding Ltd. (supra) would clearly support the

submission made by the learned senior counsel. In the aforesaid case,

the parties had entered into a Joint Venture Agreement (for short `JVA’)

dated 25th September, 2003 for the purpose of mining, processing and

export of Iron Ore. On 26th March, 2004, another JVA was executed

between the parties, particularly to iron out certain controversy in

respect of JVA dated 25th September, 2003. Article 14.3 of the said JVA

contained an arbitration clause providing that if the parties failed to

resolve the matter through mutual agreement, the dispute shall be

referred to an Arbitrator appointed by mutual agreement of the two

parties. The stand of the petitioner in the aforesaid case was that on

20th September, 2004, it was shocked and surprised to receive

unwarranted notices for cancellation of JVA. The aforesaid notice was

replied on 6th October, 2004. Since the disputes between the parties

were not resolved, the petitioner invoked the arbitration clause.

Respondent No. 1 in reply to the notice refuted the claim of the petitioner

and also refused to refer the matter to arbitration on the ground that the

– 28 –

JVA between the petitioner and the respondent No.1 is not in existence

as the same had been terminated by respondent No.2. It was stated that

in view of the aforesaid position, there could be no invocation of Clause

14.3 of JVA.

32. Considering the aforesaid fact situation, this Court observed that

under Clause 14.2, the parties had agreed that they would use all

reasonable efforts to resolve the disputes, controversy or claim arising

out of or relating to these agreements. Since the parties have failed to

resolve their differences, the same had to be referred to Arbitration

under Clause 14.3. It was held that there is a valid Arbitration

Agreement between the parties as contained in the JVA, which the

parties are required to adhere to and are bound by the same. In other

words, if there is any dispute between the parties to the agreement

arising out of or in relation to the subject matter of the said JVA, all

such disputes and differences have to be adjudicated upon and decided

through the process of Arbitration by appointing a mutually agreed

Arbitrator. This Court observed as follows:-

– 29 –

“Though the JVA may have been terminated and cancelled as

stated but it was a valid JVA containing a valid arbitration

agreement for settlement of disputes arising out of or in

relation to the subject-matter of the JVA. The argument of the

respondent that the disputes cannot be referred to the

arbitration as the agreement is not in existence as of today is

therefore devoid of merit.”

In my opinion, the aforesaid observations are squarely applicable to

the facts in the present case. The disputes that have arisen between the

parties clearly pertain to the subject matter of the MOU.

33. Even if, I accept the submission of Ms.Ahamadi that MOU was not

extended beyond 31st of December, 2007, it would make little difference.

Section 16(1)(a) of the Arbitration and Conciliation Act, 1996 provides

that an arbitration clause which forms part of the contract shall be

treated as an agreement independent of the other terms of the contract.

The plain meaning of the aforesaid clause would tend to show that even

on the termination of the agreement/contract, the arbitration agreement

would still survive. It also seems to be the view taken by this Court in

Everest Holdings Ltd. (supra). Accepting the submission of

– 30 –

Ms.Ahamadi that the arbitration clause came to an end as the MOU

came to an end by efflux of time on 31st December, 2007 would lead to a

very uncertain state of affairs, destroying the very efficacy of Section

16(1). The aforesaid section provides as under :

“16. Competence of arbitral tribunal to rule on its

jurisdiction – (1) The arbitral tribunal may rule on its own

jurisdiction, including ruling on any objections with respect to

the existence or validity of the arbitration agreement, and for

that purpose –

(a) an arbitration clause which forms part of a contract shall

be treated as an agreement independent of the other terms of

the contract; and

(b) a decision by the arbitral tribunal that the contract is null

and void shall not entail ipso jure the invalidity of the

arbitration clause.”

34. The aforesaid provision has been enacted by the legislature keeping

in mind the provisions contained in Article 16 of the UNCITRAL Model

Law. The aforesaid Article reads as under :-

“Article 16 – Competence of arbitral tribunal to rule on its

jurisdiction –

(1) The arbitral tribunal may rule on its own jurisdiction,

including any objections with respect to the existence or

validity of the arbitration agreement. For that purpose, an

arbitration clause which forms part of a contract shall be

– 31 –

treated as an agreement independent of the other terms of the

contract. A decision by the arbitral tribunal that the contract

is null and void shall not entail ipso jure the invalidity of the

arbitration clause.

(2)……………………………………………………..

(3)………………………………………………………”

Under Section 16(1), the legislature makes it clear that while

considering any objection with respect to the existence or validity of the

arbitration agreement, the arbitration clause which formed part of the

contract, has to be treated as an agreement independent of the other

terms of the contract. To ensure that there is no misunderstanding,

Section 16(1)(b) further provides that even if the arbitral tribunal

concludes that the contract is null and void, it should not result, as a

matter of law, in an automatic invalidation of the arbitration clause.

Section 16(1)(a) presumes the existence of a valid arbitration clause and

mandates the same to be treated as an agreement independent of the

other terms of the contract. By virtue of Section 16(1)(b), it continues to

be enforceable notwithstanding a declaration of the contract being null

and void. In view of the provisions contained in Section 16(1) of the

– 32 –

Arbitration and Conciliation Act, 1996, it would not be possible to accept

the submission of Ms.Ahmadi that with the termination of the MOU on

31st December, 2007, the arbitration clause would also cease to exist. As

noticed earlier, the disputes that have arisen between the parties clearly

relate to the subject matter of the relationship between the parties which

came into existence through the MOU. Clearly, therefore, the disputes

raised by the petitioner needs to be referred to arbitration. Under the

arbitration clause, a reference was to be made that the disputes were to

be referred to a single arbitrator. Since the parties have failed to appoint

an arbitrator under the agreed procedure, it is necessary for this Court

to appoint the Arbitrator.

35. In exercise of my powers under Section 11(4) and (6) of the

Arbitration and Conciliation Act, 1996 read with Paragraph 2 of the

Appointment of Arbitrator by the Chief Justice of India Scheme, 1996, I

hereby appoint Hon.Mr.Justice R.V. Raveendran, R/o 8/2, Krishna

Road, Basavangudi, Bangalore, Former Judge of the Supreme Court of

India, as the Sole Arbitrator to adjudicate the disputes that have arisen

– 33 –

between the parties, on such terms and conditions as the learned Sole

Arbitrator deems fit and proper. Undoubtedly, the learned Sole

Arbitrator shall decide all the disputes arising between the parties

without being influenced by any prima facie opinion expressed in this

order, with regard to the respective claims of the parties.

36. The registry is directed to communicate this order to the Sole

Arbitrator to enable him to enter upon the reference and decide the

matter as expeditiously as possible.

37. The Arbitration Petition is accordingly disposed of.

………………………….J.

[Surinder Singh Nijjar]

New Delhi;

November 25, 2011.

– 34 –

– 35 –

H.S.Rajashekara vs State Bank Of Mysore & Anr on 24 November, 2011

Last Updated on

Supreme Court of India
H.S.Rajashekara vs State Bank Of Mysore & Anr on 24 November, 2011
Author: J S Khehar
Bench: Asok Kumar Ganguly, Jagdish Singh Khehar
                                                        1



                                                               "NON-REPORTABLE"


                      IN THE SUPREME COURT OF INDIA


                        CIVIL APPELLATE JURISDICTION


              SPECIAL LEAVE PETITION (C) No.10845 of 2009




H.S. Rajashekara                                                     .... Petitioner




                                          Versus


State Bank of Mysore & Anr.                                          .... Respondents




                                    J U D G M E N T

JAGDISH SINGH KHEHAR, J.

1. The petitioner herein was inducted into the service of the State Bank

of Mysore (hereinafter referred to as, the Bank) as a temporary Sub-Staff

in 1985. He was intermittently taken into employment based on the need

for such staff. During the year 1994-95, he claims to have rendered more

than 240 days of service in a calendar year. Based thereon, he claimed

that he be included in the “protected category” of employees. Having

satisfied the “protected category” criteria, the petitioner applied for

absorption as a permanent employee, by citing the example of one

Devaraju, by addressing representations to the Bank. It is also the

contention of the petitioner, that the employees union of the Bank also

addressed a communication dated 13.12.1997 to the management of the

2

Bank requiring it to absorb the petitioner as a permanent employee. Since

the representations made by the petitioner, and recommendation made by

the employees union of the Bank, did not result in any consideration at the

hands of the Bank, the petitioner approached the High Court of Karnataka

(hereinafter referred to as, the High Court) by filing a Writ Petition being

W.P. No. 45932 of 1999. The aforesaid Writ Petition came to be disposed

of by a learned Single Judge of the High Court on 14.12.2004. In this

behalf, it would be relevant to mention, that the High Court did not examine

the merits of the controversy raised by the petitioner. Rather than doing

that, the High Court directed the Bank to take a decision on the

representation made by the petitioner by passing a written order. The

Bank was also directed to communicate the same to the petitioner.

2. The bank, while examining the claim raised by the petitioner, noticed

the contention of the petitioner as under:-

“(i) He has worked in several branches in Mysore during the

period 1985 to 1997.

(ii) During 8.7.1994 to 30.8.1995, he has served for 292 days.



        (iii)    State Bank of Mysore Employees Union has recommended 

                 him   to   be   employed   on   permanent   basis.     He   has   given 

                 applications in this regard.


        (iv)     He has passed SSLC.


        (v)      One of his colleagues, one Shri Devaraju has also passed 

                 SSLC and  he  has  been  given  employment  on  permanent 

                 basis.     Therefore,   he   has   prayed   for   passing   of   suitable 


                                                 3



order of appointment in his favour equivalent to the job

given to one Shri Devaraju.”

Despite the aforesaid pleas raised at the hands of the petitioner, the Bank

by an order dated 24.8.2005, rejected the petitioner’s claim for absorption

as a permanent employee. Two reasons were indicated in the order dated

24.8.2005 for not accepting the petitioner’s claim. It was found, that the

petitioner had not worked for 240 days in a calendar year, and that, he had

qualified the SSLC examination. The petitioner approached the High Court

yet again, to impugn the order dated 24.8.2005. At this juncture, the

petitioner preferred Writ Petition No. 22324 of 2005. Having dealt with the

controversy raised by the petitioner, the High Court by its order dated

13.11.2007, held that the petitioner was not entitled to absorption as a

permanent employee. The learned Single Judge, while dismissing Writ

Petition No. 22324 of 2005 acknowledged, that the petitioner had worked

for 292 days from 8.7.1994 to 30.8.1995. Despite the aforesaid, the High

Court was of the view, that the petitioner could not be given the benefit

claimed by him. This conclusion was drawn because the service for 240

days in a “calendar year”, was to be determined with reference to service

rendered between the 1st day of January of a particular year, upto 31st day

of December of the same year. Examined on the basis of the aforesaid

parameters, it was concluded, that the petitioner had not render service for

a period of 240 days in a “calendar year”. It was also sought to be

4

concluded, that the petitioner had not worked in one branch of the bank

during the period from 8.7.1994 to 30.8.1995. It was sought to be

concluded, that while computing 240 days in a “calendar year” only service

rendered in one branch of the Bank could have been taken into

consideration. It was accordingly held, that service rendered in different

branches could not be added together to calculate the period of 240 days

(in a “calendar year”). As such, the claim raised by the petitioner did not

find favour with the High Court in its order dated 13.11.2007.

3. The petitioner assailed the order dated 13.11.2007, passed by the

learned Single Judge of the High Court (while disposing of Writ Petition

No. 22324 of 2005), by preferring Writ Appeal No. 24 of 2008. The

Division Bench of the High Court dismissed the aforesaid Writ Appeal on

4.11.2008. While adjudicating upon the controversy, the Division Bench

referred to the judgment rendered by this Court in Secretary, State of

Karnataka & Ors. Vs. Uma Devi & Ors. [(2006) 4 SCC 1], so as to

conclude, that the petitioner was not entitled to regularization in terms of

the parameters laid down by this Court.

4. We have given our thoughtful consideration to the claim raised by

the petitioner. The petitioner had approached the High Court, in the first

instance, by filing Writ Petition No. 45932 of 1999. The issue raised by

him as far back in the year 1999 remains unsettled till today. The claim of

5

the petitioner as has been projected in the order passed by the

respondents on 24.8.2005 was clear and unambiguous, namely, that he

should be given the same benefit as was given to Shri Devaraju who had

qualified the SSLC examination just like the petitioner, and despite thereof,

he was absorbed as a permanent employee. The claim raised by the

petitioner was primarily raised under articles 14 and 16 of the Constitution

of India. The petitioner prayed for parity with the aforesaid Shri Devaraju.

This claim of the petitioner was correctly appreciated, inasmuch as, the

same was clearly noticed in the impugned order dated 24.8.2005.

Unfortunately, even though the High Court by its order dated 14.12.2004

(while disposing of Writ Petition No. 45932 of 1999) had directed the Bank

to decide the representation made by the petitioner, yet the claim of the

petitioner based on a similar benefit having been granted to Shri Devaraju,

was never adjudicated upon. The same claim was raised by the petitioner

before the High Court in Writ Petition No. 22324 of 2005, (wherein the

petitioner assailed the order passed by the Bank on 24.8.2005). Yet again,

the contention remained unanswered. Thereafter, the learned Division

Bench (in Writ Appeal No.24 of 2008) again rejected the claim of the

petitioner without reference to his principal prayer, viz., parity with Shri

Devaraju. The appeal preferred by the petitioner, assailing the order

passed by the learned Single Judge in Writ Petition No. 22324 of 2005,

was adjudicated upon with reference to the decision rendered by this Court

6

in Secretary, State of Karnataka & Ors. Vs. Uma Devi & Ors. [supra] even

though the same had no relevance to the prayer made by the petitioner.

The simple question raised by the petitioner was, with reference to the

decision of the Bank in absorbing Shri Devaraju, as a permanent

employee. The claim of the petitioner was founded under Articles 14 and

16 of the Constitution of India. Unfortunately, the aforesaid issue was not

considered even in the second round of litigation. The matter has now

been placed for our consideration, at the hands of the petitioner, through

the instance Petition for Special Leave to Appeal.

5. We have given our thoughtful consideration to the claim raised by

the petitioner. The learned Single Judge while deciding Writ Petition No.

22324 of 2005 acknowledged, that the petitioner had worked for 292 days

from 8.7.1994 to 30.8.1995. That, coupled with the fact, that Shri Devaraju

was absorbed as a permanent employee even though he had qualified the

SSLC examination, in our view, should have been sufficient to examine the

claim raised by the petitioner without reference to the disqualification of

having qualified the SSLC examination. In Radha Raman Samanta Vs.

Bank of India, (2004) 1 SCC 605, this Court relied upon the following

observations recorded in Budge Budge Jute Mills Co. Ltd. v. Workmen,

(1970) 1 LLJ 222 (SC), to record its observations :

from para 17 “…..Thus a badli workman only means a person

who is employed as a casual workman who is working in place of

7

another. By virtue of the bipartite agreement published in Circular

No. XVIII/90/20 dated 7-9-1990 of the federation of the Bank, such a

badli worker is entitled to be absorbed if he completes 240 days of

badli service in a block of twelve months or a calendar year after

10.2.1988. Based on the conclusion arrived at by the learned Single

Judge after considering the relevant documents, the fact of the

appellant’s service for the required period cannot be disputed.

Nomenclature of his work profile may change, but it is clear that he

rendered services in a vacancy of a temporary post for more than

240 days. This is sufficient to treat him as a badli for the purpose of

absorption…..”

It is therefore clear, that for labour related matters the terms “calendar

year” and “block of twelve months” are interchangeable. It would be

sufficient, if the petitioner could establish, that he had rendered more than

240 days service in a “block of twelve months”. This in our view should

have been the determinating factor in a case where the consideration

pertained to the consideration of an employee’s claim for inclusion in the

“protected category” merely on account of having rendered 240 days

service in a “calendar year”. In view of the above, we are satisfied, that the

petitioner fulfilled the condition of having rendered service for 240 days in a

“calendar year”. The pleadings in the instant Petition for Special Leave to

Appeal, as also, the judgments and orders appended thereto do not

disclose any condition to the effect, that service rendered while computing

240 days in a “calendar year”, should have been rendered in the same

branch of the Bank. Keeping these factual ingredients in mind, and the

fact that the petitioner has been suffering litigation since the year 1999, we

feel that it would not be appropriate to require the re-adjudication of the

8

entire controversy all over again. In the peculiar facts and circumstances

noticed hereinabove, we direct the respondent Bank to absorb the

petitioner as a permanent employee in the Sub-Staff cadre on the basis of

having rendered service for more than 240 days during 1994-95. The

petitioner would not be entitled to any further remuneration for the period

hitherto before, other than difference in emoluments, for the service

already rendered by him. This decision shall not be treated as a

precedent, as the same has been rendered keeping in mind the peculiar

facts and circumstances of this case.

6. Disposed of in the aforesaid terms.

…………………………….J.

(Asok Kumar Ganguly)

…………………………….J.

(Jagdish Singh Khehar)

New Delhi;

November 24, 2011.

Vaithi @ Vaithianathan vs State Of T.Nadu on 14 November, 2011

Last Updated on

Supreme Court of India
Vaithi @ Vaithianathan vs State Of T.Nadu on 14 November, 2011
Author: T Thakur
Bench: Cyriac Joseph, T.S. Thakur
                          IN THE SUPREME COURT OF INDIA


              CRIMINAL APPELLATE JURISDICTION



           CRIMINAL APPEAL NOS.1870-1871 of 2010




Vaithi @Vaithianathan                             ...Appellant



                                     Versus



State of Tamil Nadu                               ...Respondent





                             O R D E R

T.S. THAKUR, J.

1. Criminal Appeals No.1870-1871 of 2010 disposed of by an

order of this Court dated 27th September, 2010 arose out of an

order passed by the Trial Court in CC No.259 and 260 of 2002

convicting the appellant of an offence of theft of electricity and

sentencing him to undergo rigorous imprisonment for a period

of one month and a fine of Rs.500/-. In default of payment of

the fine, the appellant was directed to undergo simple

1

imprisonment for a further period of 15 days in both the cases.

The sentences were ordered to run concurrently.

2. At the hearing of the appeals, it was argued on behalf of

the appellant that the appellant had already undergone eight

months of imprisonment and yet continued to be in jail even

when the sentence awarded to him was only for a period of

one month. It was in that backdrop that this Court directed an

enquiry into the matter by the High Court and called for a

report on the subject.

3. From the report received pursuant to the above direction,

it appears that the appellant had undergone a sentence of 13

days only and that the allegation that he had been in jail for

eight months was factually incorrect. The report sets out the

dates on which the appellant was taken into custody and

released on bail.

4. When the matter came up on 16th September, 2011, this

Court felt that appellant had made a factually wrong statement

that he had undergone eight months’ imprisonment. A copy of

2

the report was accordingly directed to be furnished to the

counsel for the appellant for filing his response to the same.

In compliance with the said direction, the learned counsel for

the appellant has filed his reply from which it appears that the

statement regarding the period already undergone by him was

made on the basis of a communication sent by the

Superintendent of Central Prison, Cuddalore to the Inspector

Police Kuthallam, Police Station, Nagapattinam District. A

copy of the said communication, it appears was furnished to

the learned counsel for the appellant by the Supreme Court

Legal Services Committee. The said letter was placed by the

learned counsel alongwith the SLP paper book in support of his

plea that the appellant was not required to surrender as he

had already undergone imprisonment from 26th July, 2004 till

7th May, 2005. The SLP was on that basis numbered and listed

before this Court.

5. Learned counsel for the appellant submitted that the

statement made before this Court suggesting that the

appellant had already undergone eight months’ imprisonment,

was entirely based on the communication mentioned above. In

3

support he relied upon an English translation of the relevant

portion of the letter in question which reads as under:

“Pursuant to the order, the above convict underwent

imprisonment from 26.7.2004. Subsequently as per

the order made in C.A No.72/04, 73/04 Dt.29.4.2005,

he has been released on bail and basing on the bail

bond No.1145 Dt.5.5.05 he has been released from this

prison on 7.5.2005.”

6. It was further submitted that although the statement was

found to be factually incorrect by the High Court in terms of

the enquiry report submitted by it, the error was referable

entirely to the communication which was taken by the counsel

as a credible official document. There was at any rate no

intention of misleading this Court or obtaining an order by

misrepresentation of facts.

7. The appeal in question was filed through the Supreme

Court Legal Services Committee. Learned counsel appearing

on behalf of the appellant was also engaged by the Committee

only. The requisite documents for filing of the appeal also

appear to have been furnished to the counsel by the office of

the Committee. The communication to which we have referred

4

above was one of the documents that was furnished to the

counsel for the appellant and formed part of the SLP paper

book. The original of the communication is in Tamil. The

correctness of the English translation was verified by this

Court with the help of a Tamil knowing member of the Bar and

found to be accurate. Relevant paragraph from the

communication which we have extracted above does create an

impression that the appellant was taken into custody on 26th

July, 2004 and released only on 7th May, 2005. This period

works out clearly `eight months’. Learned counsel for the

appellant was, therefore, misled into making a statement that

the appellant had undergone eight months’ imprisonment on a

bonafide assumption which was on further enquiry not found

to be factually correct. In the circumstances we do not

consider it necessary to issue any further direction in the

matter based on the report received from the High Court.

8. The only other question is whether we ought to recall the

order passed by us in the appeal upholding the conviction of

the appellant and reducing the sentence awarded to him to the

period already undergone. As noticed above, the appellant has

5

undergone 13 days’ sentence as against one month’s

imprisonment awarded to him. Having regard to the

circumstances of this case and keeping in view the fact that

the offence in question was committed nearly 10 years back

the period already undergone by the appellant should, in our

opinion, suffice.

9. In the light of what we have stated above, while we

accept the report received from the High Court, we close these

proceedings without any further directions in the matter.

……………………………..J.

(CYRIAC JOSEPH)

……………………………..J.

New Delhi                                    (T.S. THAKUR)

November 14, 2011





                                       6


Union Of India & Anr vs M/S Nitdip Text. Processors … on 3 November, 2011

Last Updated on

Supreme Court of India
Union Of India & Anr vs M/S Nitdip Text. Processors … on 3 November, 2011
Author: A T Rao
Bench: H.L. Dattu, Chandramauli Kr. Prasad
                                                                         REPORTABLE




                IN THE SUPREME COURT OF INDIA

                 CIVIL APPELLATE JURISDICTION


                   CIVIL APPEAL NO. 2960 OF 2006




Union of India and Ors.                              .............. Appellants




                                    versus




M/s Nitdip Textile Processors

Pvt. Ltd. and Another                                           ..............Respondents


                                   WITH


                   CIVIL APPEAL NO. 2961 OF 2006




Union of India and Ors.                              .............. Appellants




                                    versus




M/s Nitdip Textile Processors

Pvt. Ltd. and Another                                           ..............Respondents


                                   WITH 


                   CIVIL APPEAL NO. 2962 OF 2006




Union of India and Ors.                              .............. Appellants




                                    versus




M/s Rinkoo Processors

Pvt. Ltd. and Another                                           ..............Respondents




                                                                                1


                                   WITH 


                   CIVIL APPEAL NO. 2963 OF 2006




Union of India and Ors.                              .............. Appellants




                                    versus




M/s Swiss Pharma 

Pvt. Ltd. and Another                                           ..............Respondents


                                   WITH 


                   CIVIL APPEAL NO. 2964 OF 2006




Union of India and Ors.                              .............. Appellants




                                    versus




M/s New Age Industries and Another                 ..............Respondents


                                   WITH 


                   CIVIL APPEAL NO. 3659 OF 2006




Union of India and Ors.                                  .............. Appellants




                                    versus




M/s Aryan Finefab Ltd. and Others                        .............Respondents




                                   WITH 





                                                                                2


                   CIVIL APPEAL NO. 5616 OF 2006




Union of India and Ors.                                 .............. Appellants




                                      versus




M/s Modern Denim Ltd. and Another               ..............Respondents


                                     WITH 


                    CIVIL APPEAL NO. 990 OF 2007




Union of India and Ors.                                 .............. Appellants




                                      versus




M/s Navdurga Calendaring 

Works Surat and Others                                      ..............Respondents





                              J U D G M E N T

H.L. Dattu, J.

1) The present batch of eight appeals arises out of the

common Judgment and Order dated 25.07.2005 passed by

the High Court of Gujarat at Ahmedabad in the Special Civil

Application No.735 of 1999 and connected applications filed

under Article 226 of the Constitution of India. Since these

3

appeals involve common question of law, they are disposed

of by this common Judgment and Order.

2) All the parties in these present appeals before us were

duly served but none appeared for the respondents except

one in Civil Appeal No. 5616 of 2006.

3) The High Court, vide its impugned Judgment and

Order dated 25.07.2005, has declared that Section 87(m)(ii)

(b) of Finance (No.2) Act, 1998 is violative of Article 14 of

the Constitution of India insofar as it seeks to deny the

benefit of the `Kar Vivad Samadhana Scheme, 1998

(hereinafter referred to as “the Scheme”) to those who were

in arrears of duties etc., as on 31.03.1998 but to whom the

notices were issued after 31.03.1998 and further, has struck

down the expression “on or before the 31st day of March

1998” under Section 87(m)(ii)(b) of the Finance (No. 2) Act,

1998 as ultra vires of the Constitution of India and in

particular, Article 14 of the Constitution on the ground that

the said expression prescribes a cut-off date which arbitrarily

excludes certain category of persons from availing the

benefits under the Scheme. The High Court has further held

that as per the definition of the `tax arrears’ in Section 87(m)

4

(ii)(a) of the Act, the benefit of the Scheme was intended to

be given to all persons against whom the amount of duties,

cess, interest, fine or penalty were due and payable as on

31.3.1998. Therefore, this cut-off date in Section 87(m)(ii)

(b) arbitrarily denies the benefit of the Scheme to those who

were in arrears of tax as on 31.03.1998 but to whom notices

were issued after 31.3.1998. This would result in

unreasonable and arbitrary classification between the

assessees merely on the basis of date of issuance of Demand

Notices or Show Cause Notices which has no nexus with the

purpose and object of the Scheme. In other words, the

persons who were in arrears of tax on or before 31.03.1998

were classified as those, to whom Demand Notices or Show

Cause Notices have been issued on or before 31.03.1998

and, those to whom such notices were issued after

31.3.1998. The High Court observed that this classification

has no relation with the purpose of the Scheme to provide a

quick and voluntary settlement of tax dues. The High Court

further observed that this artificial classification becomes

more profound in view of the fact that the Scheme came into

operation with effect from 1.9.1998 which contemplates

filing of declaration by all persons on or after 1.9.1998 but

5

on or before 31.1.1999. The High Court further held that all

persons who are in arrears of direct as well as indirect tax as

on 31.3.1998 constitute one class, and any further

classification among them on the basis of the date of

issuance of Demand Notice or Show Cause Notice would be

artificial and discriminatory. The High Court concluded by

directing the Revenue to consider the claims of the

respondents for grant of benefit under the Scheme, afresh, in

terms of the Scheme. The relevant portions of the impugned

judgment of the High Court is extracted below:

“In the light of the above, we shall now consider

whether definition of “tax arrears” contained in

Section 87 (m)(ii)(b) is arbitrary, irrational or

violative of the doctrine of equality enshrined under

Article 14 of the Constitution and whether the

petitioners are entitle to avail benefit under

Scheme. A reading of the speech made by the

Finance Minister and the objects set out in

memorandum to Finance (No. 2) Bill, 1998 shows

that the Scheme was introduced with a view to

quick and voluntary settlement of tax dues

outstanding as on 31.3.1998 under various direct

and indirect tax enactments by offering waiver of a

part of the arrears of taxes and interest and

providing immunity against prosecution and

imposing of penalty. The definition of `tax arrear’

contained in Section 87 (m)(i) in the context of

direct tax enactment also shows that the legislation

was intended to give benefit of the scheme to the

assessee who were in arrears of tax on 31.3.1998.

The use of the words as on “31st day of March,

1998” in Section 87(m)(ii) also shows that even in

6

relation to indirect tax enactments, the benefit of

the scheme was intended to be given to those

against whom the amount of duties, cess, interest,

fine or penalty were due or payable upto 31.3.1998.

Viewed in this context it is quite illogical to exclude

the persons like the petitioners from whom the

amount of duties, cess, interest, fine, penalty, etc.

were due as on 31.3.1998 but to whom Demand

Notices were issued after 31.3.1998. In our opinion,

the distinction made between those who were in

arrears of indirect taxes as on 31.3.1998 only on

the basis of the date of issuance of notice is wholly

arbitrary and irrational. The classification sought

to be made between those Demand Notices or Show

Cause Notices may have been issued on or before

31st day of March, 1998 and those to whom such

notices were issued after 31.3.1998 is per se

unreasonable and has no nexus with the purpose of

the legislation, namely to provide a quick and

voluntary settlement of tax dues outstanding as on

31.3.1998.

The irrationality of the classification becomes more

pronounced when the issue is examined in the

backdrop of the fact that the scheme was made

applicable with effect from 1.9.1998, and in terms

of Sections 88 (amended) a declaration was

required to be filed on or after first day of

September, 1998 but on or before 31.1.1999. In our

opinion, all persons who were in arrears of direct

or indirect taxes as on 31.3.1998 constituted one

class and no discrimination could have been made

among them by introducing an artificial

classification with reference to the date of Demand

Notice or Show Cause Notice. All of them should

have been treated equally and made eligible for

availing benefit under the Scheme subject to

compliance of conditions contained in other

provisions of the Scheme.”

7

4) We will take Civil Appeal No. 2960 of 2006 as the

lead matter. The facts of the case, in brief, are hereunder:

The respondent is engaged in the manufacture of

textile fabrics. The team of Preventive Officers of the

Central Excise, Ahmedabad-I conducted a surprise

inspection of the premises of the factory on 5.9.1997. The

Revenue Officers examined the statutory Central Excise

Records and physically verified the stocks at various stages

of manufacturing in the presence of two independent

panchas and respondent no. 2, under the Panchnama dated

5.9.1997. The Revenue Officers found that the respondents

have cleared the Man Made Fabric admeasuring 38,726 l.m.

of `5,38,449/- without the payment of excise duty of

`84,290/-. In this regard, the Statement of respondent no. 2

was recorded on 5.9.1997 under Section 14 of the Central

Excise Act, 1944 (hereinafter referred to as “the Excise

Act”). The respondent no. 2, in his Statement has admitted

the processing of the said fabric in his factory, after

registering it in the lot register, and its subsequent

clandestine removal without payment of the excise duty.

Accordingly, a Show Cause Notice dated 06.01.1999 was

issued to the respondents demanding a duty of `84,290/-

8

under Section 11A of the Excise Act along with an equal

amount of penalty under Section 11AC of the Excise Act,

and further penalty under Rule 173 Q of the Central Excise

Rules, 1944 [hereinafter referred to as “the Excise Rules”]

and interest under Section 11AB of the Excise Act for non-

payment of excise duty on clandestine clearance of the said

fabrics. Further, the Respondent no. 2 was also asked to

show cause as to why penalty under Section 209 A of the

Excise Rules should not be imposed on him for his active

involvement in acquiring, possession, removal, concealing,

selling and dealing of the excisable goods, which are liable

to be confiscated under the Excise Act. In the meantime, the

Scheme was introduced by the Hon’ble Finance Minister

through the 1998 Budget, which was contained in the

Finance (No.2) Act of 1998. The Scheme was made

applicable to tax arrears outstanding as on 31.3.1998 under

the direct as well as indirect tax enactments. Originally, the

benefits of the Scheme could be availed by any eligible

assessee by filing a declaration of his arrears under Section

88 of the Act on or after 1.9.1998 and on or before

31.12.1998. However, the period for declaration under the

Scheme was extended upto 31.1.1999 by the Ordinance

9

dated 31.12.1998. However, the cut-off date prescribed by

the Scheme under Section 87 (m) (ii) (a) and (b) of the Act

for availing the benefits under the Scheme excluded the

respondents from its ambit. Being aggrieved, the

respondents filed a Special Civil Application before the High

Court of Gujarat, inter-alia, seeking a writ to strike down the

words “on or before the 31st day of March 1998” occurring

in Section 87 (m) (ii) of the Finance Act, 1998. They had

further prayed for issuance of an appropriate direction to the

petitioner to give them benefit of the Scheme, 1998 in

respect of tax arrears under tax enactments for which Show

Cause Notices or Demand Notices were issued on or after

31.03.1998. The High Court, vide its impugned judgment

and order dated 25.7.2005, struck down the expression “on

or before the 31st day of March, 1998” in Section 87 (m) (ii)

(b) as being unconstitutional. The High Court further

directed the competent authority to entertain and decide the

declarations made by the assessees in terms of the Scheme.

Aggrieved by the Judgment and Order, the Revenue is

before us in this appeal.

10

5) The Scheme was introduced by Finance (No.2) Act

and is contained in Chapter IV of the Act. The Scheme is

known as Kar Vivad Samadhana Scheme, 1998. It was in

force between 1.9.1998 and 31.1.1999. Briefly, the Scheme

permits the settlement of “tax arrear” as defined in Section

87(m) of the Act. It is necessary to extract the relevant

provisions of the Scheme:

“Section 87 – Definitions.

In this Scheme, unless the context otherwise

requires,

***

h) “direct tax enactment” means the Wealth-

tax Act, 1957 or the Gift-tax Act, 1958 or the

Income-tax Act, 1961 or the Interest-tax Act,

1974 or the Expenditure-tax Act, 1987;

(j) “indirect tax enactment” means the

Customs Act, 1962 or the Central Excise Act,

1944 or the Customs Tariff Act, 1975 or the

Central Excise Tariff Act, 1985 or the relevant

Act and includes the rules or regulations made

under such enactment;

***

(m) “tax arrear” means,-

(i) in relation to direct tax enactment, the

amount of tax, penalty or interest

determined on or before the 31st day of

March, 1998 under that enactment in

respect of an assessment year as

modified in consequence of giving effect

11

to an appellate order but remaining

unpaid on the date of declaration;

(ii) in relation to indirect tax enactment,-

(a) the amount of duties (including

drawback of duty, credit of duty or any

amount representing duty), cesses,

interest, fine or penalty determined as

due or payable under that enactment as

on the 31st day of March, 1998 but

remaining unpaid as on the date of

making a declaration under section 88;

or

(b) the amount of duties (including

drawback of duty, credit of duty or any

amount representing duty), cesses,

interest, fine or penalty which

constitutes the subject matter of a

Demand Notice or a show-cause notice

issued on or before the 31st day of

March, 1998 under that enactment but

remaining unpaid on the date of

making a declaration under section 88,

but does not include any demand

relating to erroneous refund and where

a show-cause notice is issued to the

declarant in respect of seizure of goods

and demand of duties, the tax arrear

shall not include the duties on such

seized goods where such duties on the

seized goods have not been quantified.

Explanation.–Where a declarant has already

paid either voluntarily or under protest, any

amount of duties, cesses, interest, fine or

penalty specified in this sub-clause, on or

before the date of making a declaration by

him under section 88 which includes any

deposit made by him pending any appeal or in

pursuance of a Court order in relation to such

duties, cesses, interest, fine or penalty, such

12

payment shall not be deemed to be the amount

unpaid for the purposes of determining tax

arrear under this sub-clause;

Section 88 – Settlement of tax payable

Subject to the provisions of this Scheme,

where any person makes, on or after the 1st

day of September, 1998 but on or before the

31st day of December, 1998, a declaration to

the designated authority in accordance with

the provisions of section 89 in respect of tax

arrear, then, not-withstanding anything

contained in any direct tax enactment or

indirect tax enactment or any other provision

of any law for the time being in force, the

amount payable under this Scheme by the

declarant shall be determined at the rates

specified hereunder, namely …”

6) The Scheme, as contained in Chapter IV of the Act, is

a Code in itself and statutory in nature and character. While

implementing the scheme, liberal construction may be given

but it cannot be extended beyond conditions prescribed in

the statutory scheme. In Regional Director, ESI Corpn. v.

Ramanuja Match Industries, (1985) 1 SCC 218, this Court

observed:

“10 … We do not doubt that beneficial legislations

should have liberal construction with a view to

implementing the legislative intent but where such

beneficial legislation has a scheme of its own there

is no warrant for the Court to travel beyond the

scheme and extend the scope of the statute on the

13

pretext of extending the statutory benefit to those

who are not covered by the scheme.”

7) In Hemalatha Gargya v. Commissioner of Income

Tax, A.P., (2003) 9 SCC 510, this Court has held:

“10. Besides, the Scheme has conferred a benefit

on those who had not disclosed their income

earlier by affording them protection against the

possible legal consequences of such non-disclosure

under the provisions of the Income Tax Act. Where

the assessees seek to claim the benefit under the

statutory scheme they are bound to comply strictly

with the conditions under which the benefit is

granted. There is no scope for the application of

any equitable consideration when the statutory

provisions of the Scheme are stated in such plain

language.”

8) In Union of India v. Charak Pharmaceuticals (India)

Ltd., (2003) 11 SCC 689, this Court has observed thus:

“8. If benefit is sought under a scheme, like KVSS,

the party must fully comply with the provisions of

the Scheme. If all the requirements of the Scheme

are not met then on principles of equity, courts

cannot extend the benefit of that Scheme.”

9) In Deepal Girishbhai Soni v. United India Insurance

Co. Ltd., (2004) 5 SCC 385, at page 404, this Court observed

as :

“53. Although the Act is a beneficial one and, thus,

deserves liberal construction with a view to

implementing the legislative intent but it is trite

that where such beneficial legislation has a scheme

14

of its own and there is no vagueness or doubt

therein, the court would not travel beyond the same

and extend the scope of the statute on the pretext of

extending the statutory benefit to those who are not

covered thereby. (See Regional Director, ESI

Corpn. v. Ramanuja Match Industries)

10) In Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638,

this Court has observed:

“A beneficial statute, as is well known, may

receive liberal construction but the same cannot be

extended beyond the statutory scheme. (See

Deepal Girishbhai Soni v. United India Insurance

Co. Ltd.)

11) In Pratap Singh v. State of Jharkhand, (2005) 3 SCC

551, this Court has held:

“93. We are not oblivious of the proposition that a

beneficent legislation should not be construed so

liberally so as to bring within its fore a person who

does not answer the statutory scheme. (See Deepal

Girishbhai Soni v. United India Insurance Co.

Ltd.)

12) The object and purpose of the Scheme is to minimize

the litigation and to realize the arrears of tax by way of

Settlement in an expeditious manner. The object of the

Scheme can be gathered from the Speech of the Finance

Minister, whilst presenting the 1998-99 Budget:

15

“Litigation has been the bane of both direct

and indirect taxes. A lot of energy of the

Revenue Department is being frittered in

pursuing large number of litigations pending

at different levels for long periods of time.

Considerable revenue also gets locked up in

such disputes. Declogging the system will not

only incentivise honest taxpayers, it would

enable the Government to realize its

reasonable dues much earlier but coupled

with administrative measures, would also

make the system more user-friendly. I

therefore, propose to introduce a new scheme

called Samadhan. he scheme would apply to

both direct taxes and indirect taxes and offer

waiver of interest, penalty and immunity from

prosecution on payment of arrears of direct

tax at the current rates. In respect of indirect

tax, where in recent years the adjustment of

rates has been very sharp, an abatement of 50

per cent of the duty would be available

alongwith waiver of interest, penalty and

immunity from prosecution”

13) The Finance Minister, whilst replying to the debate

after incorporating amendments to the Finance (No. 2) Bill,

1998, made a Speech dated 17.7.1998. The relevant portion

of the Speech, which highlights the object or purpose of the

Scheme, is extracted below:

“The Kar Vivad Samadhan Scheme has evoked a

positive response from a large number of

organizations and tax professionals. Hon’ble

Members of Parliament have also taken a keen

interest in the scheme. The lack of clarity in regard

to waiver of interest and penalty in relation to

settlement of tax arrears under the indirect tax

16

enactments is being taken care of by rewording the

relevant clauses of the Finance Bill. I have also

carefully considered the suggestions emanating

from various quarters including the Standing

Committee on Finance to extend the scope of this

scheme so as to included tax disputes irrespective

of the fact whether the tax arrears are existing or

not. As you have seen from the scheme, it has two

connected limbs-“Kar” and “Vivad”. Collection of

tax arrears is as important as settlement of

disputes. The scheme is not intended to settle

disputes when there is no corresponding gain to

the other party. The basic objective of the scheme

cannot be altered.”

14) This Court, in plethora of cases, has discussed the

object and purpose of this Scheme. In Sushila Rani v.

Commissioner of Income Tax, (2002) 2 SCC 697, this Court

observed:

“5. KVSS was introduced by the Central

Government with a view to collect revenues

through direct and indirect taxes by avoiding

litigation. In fact the Finance Minister while

explaining the object of KVSS stated as follows:

“Litigation has been the bane of both direct

and indirect taxes. A lot of energy of the

Revenue Department is being frittered in

pursuing large number of litigations pending at

different levels for long periods of time.

Considerable revenue also gets locked up in

such disputes. Declogging the system will not

only incentivise honest taxpayers, it would

enable the Government to realize its

reasonable dues much earlier but coupled with

administrative measures, would also make the

system more user-friendly….”

17

15) In Killick Nixon Ltd., Mumbai v. Deputy

Commissioner of Income Tax, Mumbai, (2003) 1 SCC 145,

this Court has held:

“9. The scheme of KVSS is to cut short litigations

pertaining to taxes which were frittering away the

energy of the Revenue Department and to

encourage litigants to come forward and pay up a

reasonable amount of tax payable in accordance

with the Scheme after declaration thereunder.”

16) In CIT v. Shatrusailya Digvijaysingh Jadeja, (2005) 7

SCC 294, this Court has observed:

“11. The object of the Scheme was to make an offer

by the Government to settle tax arrears locked in

litigation at a substantial discount. It provided that

any tax arrears could be settled by declaring them

and paying the prescribed amount of tax arrears,

and it offered benefits and immunities from penalty

and prosecution. In several matters, the

Government found that a large number of cases

were pending at the recovery stage and, therefore,

the Government came out with the said Scheme

under which it was able to unlock the frozen assets

and recover the tax arrears.

12. In our view, the Scheme was in substance a

recovery scheme though it was nomenclatured as a

“litigation settlement scheme” and was not similar

to the earlier Voluntary Disclosure Scheme. As

stated above, the said Scheme was a complete code

by itself. Its object was to put an end to all pending

matters in the form of appeals, references, revisions

and writ petitions under the IT Act/WT Act.”

18

17) In Master Cables (P) Ltd. v. State of Kerala, (2007) 5

SCC 416, this Court has held:

“8. The Scheme was enacted with a view to achieve

the purposes mentioned therein viz. recovery of tax

arrears by way of settlement. It applies provided

the conditions precedent therefor are satisfied.”

18) Further, the object of the Scheme and its application to

Customs and Central Excise cases involving arrears of taxes

has been explained in detail by the Trade Notice No. 74/98

dated 17.8.1998 issued by the Commissioner of Central

Excise and Customs, Ahmedabad-I. The relevant portion of

the said Trade Notice has been extracted below:

OFFICE OF THE COMMISSIONER OF CENTRAL

EXCISE & CUSTOMS: AHMEDABAD-1

Trade Notice No.: 74/98

Basic No.: 34/98

Sub: Kar Vivad Samadhan Scheme-1998

1. As a part of this year’s Budget proposals, the

Finance Minister had announced amongst others a

scheme termed “Kar Vivad Samadhan Scheme”

essentially to provide quick and voluntary

settlement of tax dues. The basic aim of introducing

this scheme has been to bring down the pending

litigation/disputes between the Dept. and the

assessees- both on the direct tax side and indirect

tax side- as well as to speedily realize the arrears of

taxes (including fines, penalties & interest)

considered due from various parties which are

locked up in various disputes.

19

2. Essentially, these disputed cases involving

duties, cesses, fine, penalty and interest on Customs

and Central Excise side are proposed to be settled –

case by case – if the concerned party agrees to pay

up in each case a particular amount (which may be

termed settled amount) calculated as per provisions

of the scheme, following the laid procedure.

Whereas the department gets immediate revenue

and it results in reduction in pending disputes which

may be prolonged otherwise before final

assessment, the party also gets significant benefit by

way of reduced payments instead of the disputed

liability and immunity from prosecution.

3…

3.1. The relevant extracts containing provisions of

the Samadhan Scheme as incorporated in the

enacted Finance (No. 2) Act, 98 (21 of 1998) are

enclosed herewith. The salient features of the

Samadhan Scheme in relation to Indirect Taxes are

briefly discussed below:-

4. APPLICABILITY OF THE SCHEME

A. CATEGORY OF CASES TO WHICH SCHEME

APPLICABLE

4.1. The Scheme is limited to Customs or Central

Excise cases involving arrears of taxes (including

duties, cesses, fine, penalty of (sic.) interest) which

were not paid up as on 31.3.98 and are still in

arrear and in dispute as on date of declaration (as

envisaged in section 98 (sic.) of the aforesaid Act).

The dispute and the case may be still at the stage of

Show Cause Notice or Demand Notice (other than

those of erroneous refunds) when party come (sic.)

forward and makes a declaration for claiming the

benefits of the scheme, or the duties, fine, penalty or

interest after the issue of show cause/ Demand

Notice may have been determined, but the assessee

is disputing the same in appellate forums/courts etc

and the amounts due have not been paid up.

……

20

4.3. It is pertinent to note that when a party comes

forward for taking the benefits of the Samadhan

Scheme and makes suitable declaration as provided

thereunder (discussed further later) there must be

dispute pending between the party and the Dptt.

(Section 98(ii)(c) of Finanace Act refers). In other

words, if in any case, there is no Show Cause Notice

pending nor the party is in dispute at the

appellate/revision stage nor there is an admitted

petition in the court of law where parties is

contesting the stand of the Dptt., but certain arrears

of revenue due in case, are pending payment, the

benefits of the scheme will not be available in such

case.

B. TYPES OF REVENUE ARREARS CASES

COVERED BY THE SCHEME

4.4. The intention of the scheme is to cover almost

all categories of cases involving revenue in arrears

and in dispute on Customs and Central Excise side

(with few exceptions mentioned specifically in

section 95 of Finance Act). The cases covered may

involved duty, cess, fine, penalty or interest –

whether already determined as due or yet to be

determined (in cases where show cause/Demand

Notice is yet to be decided). The term duty has been

elaborated to include credit of duty, drawback of

duty or any amount representing as duty. In other

words, the scheme would extend not only disorted

(sic.) cases of duties leviable under customs or

Central Excise Acts and relevant tariff Acts or

various specified Act….

4.5. The nature of cases covered will vary

depending upon contraventions/offence involved,

but essentially it must involve quantified duty/cess

and or penalty, fine or interest. Simple Show Cause

Notices which do not quantify any amount of duty

being demanded and which propose only penal

action – like confiscation of ceased goods and or

imposition of penalty for violation of statutory

provisions/collusion/abetment etc. thus will not be

covered by the scheme. However, whenever

21

quantified amount of duties are demanded and

penal action also proposed for various violations

even at Show Cause Notice stage benefits under the

scheme for such Show Cause Notices can be

claimed.

19) In view of the aforementioned Trade Notice, it is clear

that the object of the Scheme with reference to indirect tax

arrears is to bring down the litigation and to realize the

arrears which are considered due and locked up in various

disputes. This Scheme is mutually beneficial as it benefits

the Revenue Department to realize the duties, cess, fine,

penalty or interest assessed but not paid in an expeditious

manner and offers assessee to pay disputed liability at

discounted rates and also afford immunity from prosecution.

It is a settled law that the Trade Notice, even if it is issued by

the Revenue Department of any one State, is binding on all

the other departments with equal force all over the country.

The Trade Notice guides the traders and business community

in relation to their business as how to regulate it in

accordance with the applicable laws or schemes. In Steel

Authority of India v. Collector of Customs, (2001) 9 SCC

198, this Court has held:

22

“3. Learned counsel for the Revenue submitted that

this trade notice had been issued only by the

Bombay Customs House. It is hardly to be supposed

that the Customs Authorities can take one stand in

one State and another stand in another State. The

trade notice issued by one Customs House must

bind all Customs Authorities and, if it is erroneous,

it should be withdrawn or amended, which in the

instant case, admittedly, has not been done.”

20) In Purewal Associates Ltd. v. CCE, (1996) 10 SCC

752, this Court has held:

“10. We must take it that before issuing a trade

notice sufficient care is taken by the authorities

concerned as it guides the traders to regulate their

business accordingly. Hence whatever is the legal

effect of the trade notice as contended by the

learned Senior Counsel for the respondent, the last

portion of the above trade notice cannot be faulted

as it is in accordance with the views expressed by

this Court. Though a trade notice as such is not

binding on the Tribunal or the courts, it cannot be

ignored when the authorities take a different stand

for if it was erroneous, it would have been

withdrawn.”

21) However, the Trade Notice, as such, is not binding on

the Courts but certainly binding on the assessee and can be

contested by the assessee. (see CCE v. Kores (India) Ltd.,

(1997) 10 SCC 338; Union of India v. Pesticides

Manufacturing and Formulators Association of India,

23

(2002) 8 SCC 410; and CCE v. Jayant Dalal (P) Ltd., (1997)

10 SCC 402 )

22) Shri. R.P. Bhatt, learned senior counsel, has appeared

for the Revenue and the respondents in civil appeal no. 5616

of 2006 are represented by Shri. Paras Kuhad, learned senior

counsel.

23) Learned senior counsel Shri. R.P. Bhatt, submits that

an assessee can claim benefits under the Scheme only when

his tax arrears are determined and outstanding, or a Show

Cause Notice has been issued to him, prior to or on

31.3.1998 in terms of Section 87 (m) (ii) (a) and (b) of the

Act. He further submits that the determination of the arrears

can be arrived at by way of adjudication or by issuance of

the Show Cause Notice to the assessee. He submits that once

this condition is satisfied, then the assessee is required to

submit a declaration under Section 88 of the Act on or after

1.9.1998 and on or before 31.1.1999, provided that the

arrears are unpaid at the time of filing the declaration. He

further submits that the present Scheme is statutory in

character and its provision should be interpreted strictly and

24

those who do not fulfill the conditions of eligibility

contained in the Scheme are not allowed to avail the benefit

under the Scheme. In support of his contention, he has relied

on the Judgment of this Court in Union of India v. Charak

Pharmaceuticals (India) Ltd., (2003) 11 SCC 689. Learned

senior counsel, relying on the, Speech of the Finance

Minister dated 17.7.1998, [232 ITR 1998 (14)] asserts that

the purpose or the basic object of the Scheme is the

collection of tax and settlement of disputes and it is intended

to be beneficial to both assessee as well as the Revenue. He

further contends that the determination of arrears or issuance

of Show Cause Notice before or on 31.3.1998 is a

substantive requirement for eligibility under the Scheme and

filing of declaration of unpaid arrears under Section 88 of

the Act is the procedural formality for availing the benefits

of the Scheme. Therefore, he submits that the extension of

time to file declaration under the Scheme on or before

31.1.1999 is just a procedural formality and in no manner

discriminatory, so as to violate the mandate of Article 14 of

the Constitution. Learned senior counsel, on the strength of

Trade Notice dated 17.8.1998 and the observations made by

this Court in the case of Charak Pharmaceuticals (supra),

25

further submits that, in cases of Central Excise and Customs,

the Scheme is limited only to two categories of cases: firstly,

the arrears of tax which are assessed as on 31.3.1998 and are

still unpaid and in dispute on the date of filing of

declaration; secondly, the arrears for which, the Show Cause

Notice or Demand Notice has been issued by the Revenue as

on 31.3.1998 and which are still unpaid and are in dispute on

the date of filing of declaration. He submits that the said

Trade Notice indicates that the concept of actual

determination or assessment has been extended to the Show

Cause Notice in order to grant the benefit of the Scheme to

duty demanded in such Show Cause Notice. He submits that

the Show Cause Notice is in the nature of tentative charge,

which has been included in the ambit of the Scheme in order

to realize the tax/duty dues but not yet paid. He submits that

the Scheme contemplates the conferring of the benefits only

on the quantified duty either determined by way of

adjudication or demanded in a Show Cause Notice. Learned

senior counsel contends that in the present case, the Show

Cause Notice demanding the duty was issued to the

respondents only on 6.1.1999 and, therefore, the duty was

determined as quantified only on the issuance of the Show

26

Cause Notice. Hence, respondents are not eligible to avail

the benefit under this Scheme. Learned senior counsel

submits that the cut-off date of on or before 31.3.1998

prescribed by Section 87 (m) (ii) (b) cannot be considered as

discriminatory or unreasonable only on the basis that it

creates two classes of assessees unless it appears on the face

of it as capricious or malafide. The cut-off date of 31.3.1998

in indirect tax enactments under the Scheme has been

purposively chosen in order to maintain uniformity with

direct tax enactments where assessment year ends on the

said date. In support of his submission, learned senior

counsel relies on Union of India v. M.V. Valliappan, (1999)

6 SCC 259, Sudhir Kumar Consul v. Allahabad Bank, (2011)

3 SCC 486 and Government of Andhra Pradesh v. N.

Subbarayudu, (2008) 14 SCC 702. He further submits that

the present Scheme extends the benefit of reduction of tax

and does not deprive or withdraw any existing benefit to the

assessees. He also submits that if certain section of assessees

is excluded from its scope by virtue of cut-off date, they

cannot challenge the entire Scheme merely on ground of

their exclusion.

27

24) Per contra, Shri. Paras Kuhad, learned senior counsel,

submits that the Scheme became effective from 1.09.1998

and remained operative till 31.1.1999. However, the arrears

in question should relate to the period prior to or as on

31.3.1998 which is the essence of the Scheme or the

qualifying condition. He submits that Section 87 (f) defines

`disputed tax’ as the total tax determined and payable, in

respect of an assessment year under any direct tax enactment

but which remains unpaid as on the date of making the

declaration under Section 88. In this regard, he submits that

the factum of arrears exists even on the date of filing of

declaration. He contends that the Finance Act uses the

expression `determination’ instead of `assessment’ in order

to include the cases of self assessment. He submits that in

the case of direct tax and payment of advance tax, the

process of determination arises before the assessment. He

further argues that the purpose of the Scheme is to reduce

litigation and recover revenue arrears in an expeditious

manner. The classification should be in order to attain these

objectives or purpose. The classification of assessees on the

basis of date of issuance of Show Cause Notice or Demand

Notice is unreasonable and has no nexus with the purpose of

28

the legislation. He further submits that all the assessees who

are in arrears of tax on or before 31.3.1998 formed one class

but further classification among them just on the basis of

issuance of Show Cause Notice is arbitrary and

unreasonable. The criterion of date of issuance of Show

Cause Notice is per se unreasonable as based on fortuitous

circumstances. It is neither objective nor uniformly

applicable. He further submits that the High Court has

correctly struck down the words “on or before the 31st day of

March 1998” in Section 87 (m) (ii) (b) and, thereby, created

a right in favour of assessee to claim benefit under the

Scheme for all arrears of tax arising as on 31.3.1998. He

further submits that by application of the doctrine of

severability, the Scheme can operate as a valid one for all

purposes. Learned senior counsel submits that the carving

out of sub-group only on the basis of whether Show Cause

Notice has been issued or not and the Scheme being made

effective from prospective date would render the operation

or availability of Scheme variable or uncertain, depending

on case to case. He further submits that this has no relation

with the purpose of the Scheme which is beneficial in nature.

He further submits that the date of issuance of Show Cause

29

Notice is not controlled by the assessee. Therefore, it is

fortuitous circumstance which is per se unreasonable. The

objective of the doctrine of classification is that the unequal

should not be treated equally in order to achieve equality.

The basis for classification in terms of Article 14 should be

intelligible criteria which should have nexus with the object

of the legislation. He argues that the criterion of date of

issuance of Show Cause Notice is just a fortuitous factor

which is variable, uncertain, and fateful and cannot be

considered as intelligible criteria for the purpose of Article

14 of the Constitution. He submits, however, criterion for

classification is the prerogative of the Parliament but it

should be certain and not vacillating like date of issuance of

Show Cause Notice. He further submits that the hardships

arising out of normal cut-off criteria is acceptable and

justified but when injustice arises out of operation of the

provision which prescribe criteria which is variable for same

class of persons for availing the benefit of the Scheme, is

against the mandate of Article 14 of the Constitution. He

relies on the decision of this Court in State of Jammu and

Kashmir v. Triloki Naths Khosa, (1974) 1 SCC 19 in order to

buttress his argument that the classification is a subsidiary

30

rule to the Fundamental Right of Equal Protection of Laws

and should not be used in a manner to submerge and drown

the principle of equality. Learned senior counsel contends

that the purpose of the Scheme is to end the dispute qua

assessee, who is in arrears of taxes and has not paid such

arrears. He further submits that in case of Central Excise, the

excise duty is determined on removal of goods but the actual

payment is made later and also, in case of self assessment,

the tax arrears are determined before the actual payment or

possible dispute. He submits that as per Rule 173 F of the

Excise Rules, the assessee is required to determine the duty

payable by self assessment of the excisable goods before

their removal from the factory. He further submits that the

methodology of re-assessment under Section 11 A of the

Excise Act, rate of product approved before hand under

Section 173B and ad valorem for value of goods under

Section 173C contemplates the determination of duty

payable by the assessee. In this regard, he submits that the

word `determined’ has been used purposively and

deliberately in the Scheme instead of `assessment’. He

further argues that in view of the object of the Scheme to

collect revenue, the Scheme envisages two elements: first,

31

the determination of the amount of tax due and payable on or

before 31.3.1998 and, second, whether the tax so determined

is in arrears on date of declaration under Section 88. In other

words, he submits that the tax so determined on or before

31.3.1998 should be in arrears on the date of declaration

under Section 88. Learned senior counsel, in support of his

submissions, relies on the decision of this Court in

Government of India v. Dhanalakshmi Paper and Board

Mills, 1989 Supp. (1) SCC 596.

25) Taxation is a mode of raising revenue for public

purposes. In exercise of the power to tax, the purpose

always is that a common burden shall be sustained by

common contributions, regulated by some fixed general

rules, and apportioned by the law according to some uniform

ratio of equality.

26) The word `duty’ means an indirect tax imposed on the

importation or consumption of goods. `Customs’ are duties

charged upon commodities on their being imported into or

exported from a country.

27) The expression `Direct Taxes’ include those assessed

upon the property, person, business, income, etc., of those

32

who are to pay them, while indirect taxes are levied upon

commodities before they reach the consumer, and are paid

by those upon whom they ultimately fall, not as taxes, but as

part of the market price of the commodity. For the purpose

of the Scheme, indirect tax enactments are defined as

Customs Act, 1962, Central Excise Act, 1944 or the

Customs Tariff Act, 1985 and the Rules and Regulations

framed thereunder.

28) The Scheme defines the meaning of the expression

`Tax Arrears’, in relation to indirect tax enactments. It would

mean the determined amount of duties, as due and payable

which would include drawback of duty, credit of duty or any

amount representing duty, cesses, interest, fine or penalty

determined. The legislation, by using its prerogative power,

has restricted the dues of duties quantified and payable as on

31st day of March, 1998 and remaining unpaid till a

particular event has taken place, as envisaged under the

Scheme. The date has relevance, which aspect we would

elaborate a little later. The definition is inclusive definition.

It also envisages instances where a Demand Notice or Show

Cause Notice issued under indirect tax enactment on or

33

before 31st day of March, 1998 but not complied with the

demand made to be treated as tax arrears by legal fiction.

Thus, legislation has carved out two categories of assessees

viz. where tax arrears are quantified but not paid, and where

Demand Notice or Show Cause Notice issued but not paid.

In both the circumstances, legislature has taken cut off date

as on 31st day of March 1998. It cannot be disputed that the

legislation has the power to classify but the only question

that requires to be considered is whether such classification

is proper. It is now well settled by catena of decisions of this

Court that a particular classification is proper if it is based on

reason and not purely arbitrary, caprice or vindictive. On the

other hand, while there must be a reason for the

classification, the reason need not be good one, and it is

immaterial that the Statute is unjust. The test is not wisdom

but good faith in the classification. It is too late in the day to

contend otherwise. It is time and again observed by this

Court that the Legislature has a broad discretion in the

matter of classification. In taxation, `there is a broader power

of classification than in some other exercises of legislation’.

When the wisdom of the legislation while making

classification is questioned, the role of the Courts is very

34

much limited. It is not reviewable by the Courts unless

palpably arbitrary. It is not the concern of the Courts

whether the classification is the wisest or the best that could

be made. However, a discriminatory tax cannot be sustained

if the classification is wholly illusory.

29) Kar Vivad Samadhan Scheme is a step towards the

settlement of outstanding disputed tax liability. The Scheme

is a complete Code in itself and exhaustive of matter dealt

with therein. Therefore, the courts must construe the

provisions of the Scheme with reference to the language

used therein and ascertain what their true scope is by

applying the normal rule of construction. Keeping this

principle in view, let us consider the reasoning of the High

Court.

30) The tests adopted to determine whether a

classification is reasonable or not are, that the classification

must be founded on an intelligible differentia which

distinguishes person or things that are grouped together from

others left out of the groups and that the differentia must

have a rational relation to the object sought to be achieved

by Statute in question. The Legislature in relation to `tax

35

arrears’ has classified two groups of assessees. The first one

being those assessees in whose cases duty is quantified and

not paid as on the 31st day of March, 1998 and those

assessees who are served with Demand or Show Cause

Notice issued on or before the 31st day of March, 1998. The

Scheme is not made applicable to such of those assessees

whose duty dues are quantified but Demand Notice is not

issued as on 31st day of March, 1998 intimating the

assessee’s dues payable. The same is the case of the

assessees who are not issued with the Demand or Show

Cause Notice as on 31.03.1998. The grievance of the

assessee is that the date fixed is arbitrary and deprives the

benefit for those assessees who are issued Demand Notice or

Show Cause Notice after the cut off date namely 31st day of

March, 1998. The Legislature, in its wisdom, has thought it

fit to extend the benefit of the scheme to such of those

assessees whose tax arrears are outstanding as on

31.03.1998, or who are issued with the Demand or Show

Cause Notice on or before 31st day of March, 1998, though

the time to file declaration for claiming the benefit is

extended till 31.01.1999. The classification made by the

legislature appears to be reasonable for the reason that the

36

legislature has grouped two categories of assessees namely,

the assessees whose dues are quantified but not paid and the

assessees who are issued with the Demand and Show Cause

Notice on or before a particular date, month and year. The

Legislature has not extended this benefit to those persons

who do not fall under this category or group. This position

is made clear by Section 88 of the Scheme which provides

for settlement or tax payable under the Scheme by filing

declaration after 1st day of September, 1998 but on or before

the 31st day of December, 1998 in accordance with Section

89 of the Scheme, which date was extended upto

31.01.1999. The distinction so made cannot be said to be

arbitrary or illogical which has no nexus with the purpose of

legislation. In determining whether classification is

reasonable, regard must be had to the purpose for which

legislation is designed. As we have seen, while

understanding the Scheme of the legislation, the legislation

is based on a reasonable basis which is firstly, the amount of

duties, cesses, interest, fine or penalty must have been

determined as on 31.03.1998 but not paid as on the date of

declaration and secondly, the date of issuance of Demand or

Show Cause Notice on or before 31.03.1998, which is not

37

disputed but the duties remain unpaid on the date of filing of

declaration. Therefore, in our view, the Scheme 1998 does

not violate the equal protection clause where there is an

essential difference and a real basis for the classification

which is made. The mere fact that the line dividing the

classes is placed at one point rather than another will not

impair the validity of the classification. The concept of

Article 14 vis-a-vis fiscal legislation is explained by this

Court in several decisions.

31) In Amalgamated Tea Estates Co. Ltd. v. State of

Kerala, (1974) 4 SCC 415, this Court has held:

8. It may be pointed out that the Indian Income Tax

Act also makes a distinction between a domestic

company and a foreign company. But that

circumstance per se would not help the State of

Kerala. The impugned legislation, in order to get

the green light from Article 14, should satisfy the

classification test evolved by this Court in a catena

of cases. According to that test: (1) the

classification should be based on an intelligible

differentia and (2) the differentia should bear a

rational relation to the purpose of the legislation.

9. The classification test is, however, not inflexible

and doctrinaire. It gives due regard to the complex

necessities and intricate problems of government.

Thus as revenue is the first necessity of the State

and as taxes are raised for various purposes and

by an adjustment of diverse elements, the Court

grants to the State greater choice of classification

38

in the field of taxation than in other spheres.

According to Subba Rao, J.:

“(T)he courts in view of the inherent

complexity of fiscal adjustment of diverse

elements, permit a larger discretion to the

Legislature in the matter of classification,

so long as it adheres to the fundamental

principles underlying the said doctrine. The

power of the Legislature to classify is of

wide range and flexibility so that it can

adjust its system of taxation in all proper

and reasonable ways.” (Khandige Sham

Bhat v. Agricultural Income Tax Officer,

Kasargod; V. Venugopala Ravi Verma

Rajah v. Union of India.)

10. Again, on a challenge to a statute on the

ground of Article 14, the Court would generally

raise a presumption in favour of its

constitutionality. Consequently, one who

challenges the statute bears the burden of

establishing that the statute is clearly violative of

Article 14. “The presumption is always in favour of

the constitutionality of an enactment and the

burden is upon him who attacks it to show that

there is a clear transgression of the constitutional

principle.” (See Charanjit Lal v. Union of India.)

32) In Anant Mills Co. Ltd. v. State of Gujarat, (1975) 2

SCC 175, this Court has observed:

“25. It is well-established that Article 14 forbids

class legislation but does not forbid classification.

Permissible classification must be founded on an

intelligible differentia which distinguishes persons

or things that are grouped together from others left

out of the group, and the differentia must have a

rational relation to the object sought to be

achieved by the statute in question. In permissible

39

classification mathematical nicety and perfect

equality are not required. Similarity, not identity of

treatment, is enough. If there is equality and

uniformity within each group, the law will not be

condemned as discriminative, though due to some

fortuitous circumstances arising out of a peculiar

situation some included in a class get an

advantage over others, so long as they are not

singled out for special treatment. Taxation law is

not an exception to this doctrine. But, in the

application of the principles, the courts, in view of

the inherent complexity of fiscal adjustment of

diverse elements, permit a larger discretion to the

Legislature in the matter of classification so long

as it adheres to the fundamental principles

underlying the said doctrine. The power of the

Legislature to classify is of wide range and

flexibility so that it can adjust its system of taxation

in all proper and reasonable ways (see Ram

Krishna Dalmia v. Justice S.R. Tendolkar and

Khandige Sham Bhat v. Agricultural Income Tax

Officer, Kasaragod) Keeping the above principles

in view, we find no violation of Article 14 in

treating pending cases as a class different from

decided cases. It cannot be disputed that so far as

the pending cases covered by clause (i) are

concerned, they have been all treated alike.”

33) In Jain Bros v. Union of India, (1969) 3 SCC 311, the

issue before this Court was whether the clause (g) of Section

297(2) of the Income Tax Act, 1961 is violative of Article 14

of the Constitution inasmuch as in the matter of imposition

of penalty, it discriminated between two sets of assessees

with reference to a particular date, namely, those whose

assessment had been completed before 1st day of April 1962

40

and others whose assessment was completed on or after that

date. Whilst upholding the validity of the above provision,

this Court has observed:

“Now the Act of 1961 came into force on first

April 1962. It repealed the prior Act of 1922.

Whenever a prior enactment is repealed and new

provisions are enacted the Legislature invariably

lays down under which enactment pending

proceedings shall be continued and concluded.

Section 6 of the General Clauses Act, 1897, deals

with the effect of repeal of an enactment and its

provisions apply unless a different intention

appears in the statute. It is for the Legislature to

decide from which date a particular law should

come into operation. It is not disputed that no

reason has been suggested why pending

proceedings cannot be treated by the Legislature

as a class for the purpose of Article 14. The date

first April, 1962, which has been selected by the

Legislature for the purpose of clauses (f) and (g) of

Section 297(2) cannot be characterised as

arbitrary or fanciful.”

34) In Murthy Match Works v. CCE, (1974) 4 SCC 428,

this Court has observed:

“15. Certain principles which bear upon

classification may be mentioned here. It is true that

a State may classify persons and objects for the

purpose of legislation and pass laws for the

purpose of obtaining revenue or other objects.

Every differentiation is not a discrimination. But

classification can be sustained only it it is founded

on pertinent and real differences as distinguished

from irrelevant and artificial ones. The

constitutional standard by which the sufficiency of

41

the differentia which form a valid basis for

classification may be measured, has been

repeatedly stated by the Courts. If it rests on a

difference which bears a fair and just relation to

the object for which it is proposed, it is

constitutional. To put it differently, the means must

have nexus with the ends. Even so, a large latitude

is allowed to the State for classification upon a

reasonable basis and what is reasonable is a

question of practical details and a variety of

factors which the Court will be reluctant and

perhaps ill-equipped to investigate. In this

imperfect world perfection even in grouping is an

ambition hardly ever accomplished. In this context,

we have to remember the relationship between the

legislative and judicial departments of Government

in the determination of the validity of

classification. Of course, in the last analysis

Courts possess the power to pronounce on the

constitutionality of the acts of the other branches

whether a classification is based upon substantial

differences or is arbitrary, fanciful and

consequently illegal. At the same time, the question

of classification is primarily for legislative

judgment and ordinarily does not become a

judicial question. A power to classify being

extremely broad and based on diverse

considerations of executive pragmatism, the

Judicature cannot rush in where even the

Legislature warily treads. All these operational

restraints on judicial power must weigh more

emphatically where the subject is taxation.

19. It is well-established that the modern state, in

exercising its sovereign power of taxation, has to

deal with complex factors relating to the objects to

be taxed, the quantum to be levied, the conditions

subject to which the levy has to be made, the social

and economic policies which the tax is designed to

subserve, and what not. In the famous words of

Holmes, J. in Bain Peanut Co. v. Pinson2:

42

“We must remember that the machinery of

Government would not work if it were not

allowed a little play in its joints.”

35) In R.K. Garg v. Union of India, (1981) 4 SCC 675,

this Court has held:

7. Now while considering the constitutional

validity of a statute said to be violative of Article

14, it is necessary to bear in mind certain well

established principles which have been evolved by

the courts as rules of guidance in discharge of its

constitutional function of judicial review. The first

rule is that there is always a presumption in favour

of the constitutionality of a statute and the burden

is upon him who attacks it to show that there has

been a clear transgression of the constitutional

principles. This rule is based on the assumption,

judicially recognised and accepted, that the

legislature understands and correctly appreciates

the needs of its own people, its laws are directed to

problems made manifest by experience and its

discrimination are based on adequate grounds.

The presumption of constitutionality is indeed so

strong that in order to sustain it, the Court may

take into consideration matters of common

knowledge, matters of common report, the history

of the times and may assume every state of facts

which can be conceived existing at the time of

legislation.

“8. Another rule of equal importance is that laws

relating to economic activities should be viewed

with greater latitude than laws touching civil rights

such as freedom of speech, religion etc. It has been

said by no less a person than Holmes, J., that the

legislature should be allowed some play in the

joints, because it has to deal with complex

problems which do not admit of solution through

any doctrinaire or strait-jacket formula and this is

43

particularly true in case of legislation dealing with

economic matters, where, having regard to the

nature of the problems required to be dealt with,

greater play in the joints has to be allowed to the

legislature. The court should feel more inclined to

give judicial deference to legislative judgment in

the field of economic regulation than in other

areas where fundamental human rights are

involved.”

36) In Elel Hotels and Investments Ltd. v. Union of India,

(1989) 3 SCC 698, this Court has held:

“20. It is now well settled that a very wide latitude

is available to the legislature in the matter of

classification of objects, persons and things for

purposes of taxation. It must need to be so, having

regard to the complexities involved in the

formulation of a taxation policy. Taxation is not

now a mere source of raising money to defray

expenses of Government. It is a recognised fiscal

tool to achieve fiscal and social objectives. The

differentia of classification presupposes and

proceeds on the premise that it distinguishes and

keeps apart as a distinct class hotels with higher

economic status reflected in one of the indicia of

such economic superiority.”

37) In P.M. Ashwathanarayana Setty v. State of

Karnataka, (1989) Supp. (1) SCC 696, this Court has held:

“… the State enjoys the widest latitude where

measures of economic regulation are concerned.

These measures for fiscal and economic regulation

involve an evaluation of diverse and quite often

conflicting economic criteria and adjustment and

balancing of various conflicting social and

44

economic values and interests. It is for the State to

decide what economic and social policy it should

pursue and what discriminations advance those

social and economic policies.”

38) In Kerala Hotel and Restaurant Assn. v. State of

Kerala, (1990) 2 SCC 502, this Court has observed:

“24. The scope for classification permitted in

taxation is greater and unless the classification

made can be termed to be palpably arbitrary, it

must be left to the legislative wisdom to choose the

yardstick for classification, in the background of

the fiscal policy of the State….”

39) In Spences Hotel (P) Ltd. v. State of W.B., (1991) 2

SCC 154, this Court has observed:

“26. What then `equal protection of laws’ means

as applied to taxation? Equal protection cannot be

said to be denied by a statute which operates alike

on all persons and property similarly situated, or

by proceedings for the assessment and collection of

taxes which follows the course usually pursued in

the State. It prohibits any person or class of

persons from being singled out as special subject

for discrimination and hostile legislation; but it

does not require equal rates of taxation on

different classes of property, nor does it prohibit

unequal taxation so long as the inequality is not

based upon arbitrary classification. Taxation will

not be discriminatory if, within the sphere of its

operation, it affects alike all persons similarly

situated. It, however, does not prohibit special

legislation, or legislation that is limited either in

the objects to which it is directed, or by the

territory within which it is to operate. In the words

45

of Cooley: It merely requires that all persons

subjected to such legislation shall be treated alike,

under like circumstances and conditions, both in

the privileges conferred and in the liabilities

imposed. The rule of equality requires no more

than that the same means and methods be applied

impartially to all the constituents of each class, so

that the law shall operate equally and uniformly

upon all persons in similar circumstances. Nor

does this requirement preclude the classification of

property, trades, profession and events for taxation

— subjecting one kind to one rate of taxation, and

another to a different rate. “The rule of equality of

taxation is not intended to prevent a State from

adjusting its system of taxation in all proper and

reasonable ways. It may, if it chooses, exempt

certain classes of property from any taxation at all,

may impose different specific taxes upon different

trades and professions.” “It cannot be said that it

is intended to compel the State to adopt an iron

rule of equal taxation.” In the words of Cooley :21

“Absolute equality is impossible. Inequality of

taxes means substantial differences. Practical

equality is constitutional equality. There is no

imperative requirement that taxation shall be

absolutely equal. If there were, the operations

of government must come to a stop, from the

absolute impossibility of fulfilling it. The most

casual attention to the nature and operation of

taxes will put this beyond question. No

single tax can be apportioned so as to be

exactly just and any combination of taxes is

likely in individual cases to increase instead of

diminish the inequality.”

27. “Perfect equality in taxation has been said time

and again, to be impossible and unattainable.

Approximation to it is all that can be had. Under

any system of taxation, however, wisely and

carefully framed, a disproportionate share of the

public burdens would be thrown on certain kinds

of property, because they are visible and tangible,

while others are of a nature to elude vigilance. It is

46

only where statutes are passed which impose taxes

on false and unjust principle, or operate to

produce gross inequality, so that they cannot be

deemed in any just sense proportional in their

effect on those who are to bear the public charges

that courts can interpose and arrest the course of

legislation by declaring such enactments void.”

“Perfectly equal taxation”, it has been said, “will

remain an unattainable good as long as laws and

government and man are imperfect.” `Perfect

uniformity and perfect equality of taxation’, in all

the aspects in which the human mind can view it, is

a baseless dream.”

40) In Venkateshwara Theatre v. State of A.P., (1993) 3

SCC 677, this Court has held:

“21. Since in the present case we are dealing with

a taxation measure it is necessary to point out that

in the field of taxation the decisions of this Court

have permitted the legislature to exercise an

extremely wide discretion in classifying items for

tax purposes, so long as it refrains from clear and

hostile discrimination against particular persons

or classes.”

41) In State of Kerala v. Aravind Ramakant Modawdakar,

(1999) 7 SCC 400, this Court has held:

“Coming to the power of the State in legislating

taxation law, the court should bear in mind that the

State has a wide discretion in selecting the persons

or objects it will tax and thus a statute is not open

to attack on the ground that it taxes some persons

or objects and not others. It is also well settled that

a very wide latitude is available to the legislature

in the matter of classification of objects, persons

47

and things for the purpose of taxation. While

considering the challenge and nature that is

involved in these cases, the courts will have to bear

in mind the principles laid down by this Court in

the case of Murthy Match Works v. CCE2 wherein

while considering different types of classifications,

this Court held: (AIR Headnote)

“[T]hat a pertinent principle of differentiation,

which was visibly linked to productive process,

had been adopted in the broad classification of

power-users and manual manufacturers. It was

irrational to castigate this basis as unreal. The

failure however, to mini-classify between large

and small sections of manual match

manufacturers could not be challenged in a

court of law, that being a policy decision of

Government dependent on pragmatic wisdom

playing on imponderable forces at work.

Though refusal to make rational classification

where grossly dissimilar subjects are treated by

the law violates the mandate of Article 14, even

so, as the limited classification adopted in the

present case was based upon a relevant

differentia which had a nexus to the legislative

end of taxation, the Court could not strike

down the law on the score that there was room

for further classification.”

42) In State of U.P. v. Kamla Palace, (2000) 1 SCC 557,

this Court has observed:

11. Article 14 does not prohibit reasonable

classification of persons, objects and transactions

by the legislature for the purpose of attaining

specific ends. To satisfy the test of permissible

classification, it must not be “arbitrary, artificial

or evasive” but must be based on some real and

substantial distinction bearing a just and

48

reasonable relation to the object sought to be

achieved by the legislature. (See Special Courts

Bill, 1978, Re, seven-Judge Bench; R.K. Garg v.

Union of India, five-Judge Bench.) It was further

held in R.K. Garg case that laws relating to

economic activities or those in the field of taxation

enjoy a greater latitude than laws touching civil

rights such as freedom of speech, religion etc. Such

a legislation may not be struck down merely on

account of crudities and inequities inasmuch as

such legislations are designed to take care of

complex situations and complex problems which

do not admit of solutions through any doctrinaire

approach or straitjacket formulae. Their Lordships

quoted with approval the observations made by

Frankfurter, J. in Morey v. Doud:

“In the utilities, tax and economic regulation

cases, there are good reasons for judicial

self-restraint if not judicial deference to

legislative judgment. The legislature after all

has the affirmative responsibility. The courts

have only the power to destroy, not to

reconstruct. When these are added to the

complexity of economic regulation, the

uncertainty, the liability to error, the

bewildering conflict of the experts, and the

number of times the Judges have been

overruled by events — self-limitation can be

seen to be the path to judicial wisdom and

institutional prestige and stability.”

12. The legislature gaining wisdom from historical

facts, existing situations, matters of common

knowledge and practical problems and guided by

considerations of policy must be given a free hand

to devise classes — whom to tax or not to tax,

whom to exempt or not to exempt and whom to give

incentives and lay down the rates of taxation,

benefits or concessions. In the field of taxation if

the test of Article 14 is satisfied by generality of

provisions the courts would not substitute judicial

wisdom for legislative wisdom.

49

43) In Aashirwad Films v. Union of India, (2007) 6 SCC

624, this Court has held:

14. It has been accepted without dispute that

taxation laws must also pass the test of Article 14

of the Constitution of India. It has been laid down

in a large number of decisions of this Court that a

taxation statute for the reasons of functional

expediency and even otherwise, can pick and

choose to tax some. Importantly, there is a rider

operating on this wide power to tax and even

discriminate in taxation that the classification thus

chosen must be reasonable. The extent of

reasonability of any taxation statute lies in its

efficiency to achieve the object sought to be

achieved by the statute. Thus, the classification

must bear a nexus with the object sought to be

achieved. (See Moopil Nair v. State of Kerala, East

India Tobacco Co. v. State of A.P., N. Venugopala

Ravi Varma Rajah v. Union of India, Asstt.

Director of Inspection Investigation v. A.B. Shanthi

and Associated Cement Companies Ltd. v. Govt. of

A.P.)

44) In Jai Vijai Metal Udyog Private Limited, Industrial

Estate, Varanasi v. Commissioner, Trade Tax, Uttar

Pradesh, Lucknow, (2010) 6 SCC 705, this Court held:

19. Now, coming to the second issue, it is

trite that in view of the inherent complexity of

fiscal adjustment of diverse elements, a wider

discretion is given to the Revenue for the purpose

of taxation and ordinarily different interpretations

of a particular tariff entry by different authorities

as such cannot be assailed as violative of Article

50

14 of the Constitution. Nonetheless, in our opinion,

two different interpretations of a particular entry

by the same authority on same set of facts, cannot

be immunised from the equality clause under

Article 14 of the Constitution. It would be a case of

operating law unequally, attracting Article 14 of

the Constitution.

45) To sum up, Article 14 does not prohibit reasonable

classification of persons, objects and transactions by the

Legislature for the purpose of attaining specific ends. To

satisfy the test of permissible classification, it must not be

“arbitrary, artificial or evasive” but must be based on some

real and substantial distinction bearing a just and reasonable

relation to the object sought to be achieved by the

Legislature. The taxation laws are no exception to the

application of this principle of equality enshrined in Article

14 of the Constitution of India. However, it is well settled

that the Legislature enjoys very wide latitude in the matter of

classification of objects, persons and things for the purpose

of taxation in view of inherent complexity of fiscal

adjustment of diverse elements. The power of the

Legislature to classify is of wide range and flexibility so that

it can adjust its system of taxation in all proper and

reasonable ways. Even so, large latitude is allowed to the

51

State for classification upon a reasonable basis and what is

reasonable is a question of practical details and a variety of

factors which the Court will be reluctant and perhaps ill-

equipped to investigate. It has been laid down in a large

number of decisions of this Court that a taxation Statute, for

the reasons of functional expediency and even otherwise,

can pick and choose to tax some. A power to classify being

extremely broad and based on diverse considerations of

executive pragmatism, the Judicature cannot rush in where

even the Legislature warily treads. All these operational

restraints on judicial power must weigh more emphatically

where the subject is taxation. Discrimination resulting from

fortuitous circumstances arising out of particular situations,

in which some of the tax payers find themselves, is not hit

by Article 14 if the legislation, as such, is of general

application and does not single them out for harsh treatment.

Advantages or disadvantages to individual assesses are

accidental and inevitable and are inherent in every taxing

Statute as it has to draw a line somewhere and some cases

necessarily fall on the other side of the line. The point is

illustrated by two decisions of this Court. In Khandige Sham

Bhat vs. Agricultural Income Tax Officer, Kasaragod and

52

Anr. (AIR 1963 SC 591). Travancore Cochin Agricultural

Income Tax Act was extended to Malabar area on November

01, 1956 after formation of the State of Kerala. Prior to that

date, there was no agricultural income tax in that area. The

challenge under Article 14 was that the income of the

petitioner was from areca nut and pepper crops, which were

harvested after November in every year while persons who

grew certain other crops could harvest before November and

thus escape the liability to pay tax. It was held that, that was

only accidental and did not amount to violation of Article14.

In Jain Bros. vs. Union of India (supra), Section 297(2)(g) of

Income Tax Act, 1961 was challenged because under that

Section proceedings completed prior to April, 1962 was to

be dealt under the old Act and proceedings completed after

the said date had to be dealt with under the Income Tax Act,

1961 for the purpose of imposition of penalty. April 01,

1962 was the date of commencement of Income Tax Act,

1961. It was held that the crucial date for imposition of

Penalty was the date of completion of assessment or the

formation of satisfaction of authority that such act had been

committed. It was also held that for the application and

implementation of the new Act, it was necessary to fix a date

53

and provide for continuation of pending proceedings. It was

also held that the mere possibility that some officer might

intentionally delay the disposal of a case could hardly be a

ground for striking down the provision as discriminatory.

46) In view of the above discussion, we cannot agree with

the findings and the conclusion reached by the High Court

for which, we have made reference earlier. We have also not

discussed in detail the individual issues raised by the learned

senior counsel for the respondent, since those were the issues

which were canvassed and accepted by the High Court.

Accordingly, the appeals are allowed. The impugned

common judgment and order is set aside. Costs are made

easy.

…………………………………………J.

[H.L. DATTU]

…………………………………………J.

[CHANDRAMAULI KR. PRASAD]

New Delhi,

November 03, 2011.

54

Dayanandi vs Rukma D Suvarna & Ors on 31 October, 2011

Last Updated on

Supreme Court of India
Dayanandi vs Rukma D Suvarna & Ors on 31 October, 2011
Author: G Singhvi
Bench: G.S. Singhvi, Asok Kumar Ganguly
                                                                                NON-REPORTABLE


                       IN THE SUPREME COURT OF INDIA


                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 7548 OF 2002




Dayanandi                                                                ... Appellant 


                                            Versus


Rukma D. Suvarna and others                                              ... Respondents





                                     J U D G M E N T

G.S. Singhvi, J.

1. This appeal is directed against the judgment of the learned Single

Judge of the Karnataka High Court whereby he allowed the appeal filed by

respondent No.1, reversed the judgment and decree passed by Ist Additional

Civil Judge, Mangalore (hereinafter referred to as, `the trial Court’) and

decreed the suit filed by her for partition and separate possession of her

share in the suit property.

2

2. The suit property was owned by Singa Gujaran, father of respondent

No.1, appellant and respondent Nos. 2 to 6. About 3 months and 10 days

before his death, Singa Gujaran executed Will dated 25.5.1987. He

bequeathed the property specified in item No.1 of the Schedule attached to

the Will to one of his four daughters, namely, Kalyani (respondent No.3) and

the property specified in item No.2 jointly to the other daughters, namely,

Dayanandi (appellant), Rukma (respondent No.1) and Deena (respondent

No.2).

3. After one year of the demise of Singa Gujaran, respondent No.1 filed

suit for partition and separate possession of her share in plaint Schedule `B’

property. She pleaded that her father had executed Will dated 25.5.1987 and

bequeathed plaint Schedule `A’ property to respondent No.3 Kalyani and

plaint Schedule `B’ property to other daughters but by taking advantage of

the acute illness of the father, the appellant and respondent No.2

manipulated the execution of another Will depriving her of share in the

property.

4. In the written statement jointly filed by them, appellant and

respondent No.2 did not deny the execution of Will dated 25.5.1987 by

Singa Gujaran but they questioned the genuineness and validity of the Will

3

relied upon by respondent No.1 and pleaded that after executing the Will,

the deceased had made alterations and thereby disinherited respondent No.1.

They further pleaded that Singa Gujaran executed another Will dated

25.8.1987, in which respondent No.1 was not given any share because she

did not attend funeral of the mother and even when the testator visited

Bombay in May, 1987, she did not come to meet him. According to the

appellant and respondent No.2, at the time of execution of the second Will

Singa Gujaran was in a sound state of mind and he consciously denied any

share in the property to respondent No.1. They claimed that respondent

No.1 has filed suit for partition and possession of her alleged share in the

suit property by taking advantage of the testator’s subsequent illness and his

inability to speak or move about.

5. On the pleadings of the parties, the trial Court framed the following

issues:

“1. Whether the suit is bad for non-joinder of necessary

parties? (deleted)

2. Whether the plaintiff proves that Late Singa Gujaran

executed a Will dated 25.8.1987 and whether it was the last

and effective Will of the Late Singa Gujaran?

3. Whether defendants No. 1 and 2 prove that their father

Late Singa Gujaran executed the Will dated 25.8.1987 and

whether it is the last and effective Will of Singa Gujaran?

4

4. Whether defendants No.1 and 2 prove the Panchayat

alleged in para 9 of the written statement and whether the

plaintiff accepted the jewellery? (deleted)

5. Whether the defendants 1 and 2 also prove that rents are

being collected by Amarnath and spending for maintenance of

property, payment of tax and to look after Ravindra who is

congenitally mentally retarded and is dumb?

6. Whether the plaintiff is entitled to claim a share in the

rental income of buildings situated in plaint “B” scheduled

property?

7. Whether the plaintiff is entitled to partition and separate

possession of 1/3rd share in plaint `B’ scheduled properties as

claimed?

8. To what reliefs are the parties entitled.”

6. In support of her case, respondent No.1 examined herself and 5 other

witnesses including PW-5 Dr. J. Subba Rao and produced 11 documents

which were marked as Exhibits P.1 to P.11. She also got produced original

Will dated 25.5.1987 (Exhibit P.1) from the appellant. The appellant

examined herself as DW-1 and produced the second Will which was marked

as Exhibit D.1.

7. After analyzing the pleadings of the parties and the evidence produced

by them, the trial Court held that execution of Will dated 25.5.1987 is

proved but observed that by virtue of the alterations made in that Will, the

5

deceased has consciously disinherited respondent No.1. The trial Court

noted that the names of four persons were mentioned in Exhibit P.1 in

respect of the second item of the Schedule but the name of respondent No.1

Rukma was deleted and total number of the beneficiaries was also changed.

The trial Court referred to the statement of respondent No.1 that her father

had shown Exhibit P.1 without any correction as also the alleged admission

made by her in response to a question put in the cross-examination and

observed:

“16. PW-1 in the chief-examination, appearing on page No.3

states that her father had shown Ex.P.1 to her and when she

had seen there was no insertion or correction noted in Ex.P.1,

but she has not stated that the correction or deletion was made

by defendant No.1. In the cross examination, appearing at

page 7, PW-1 specifically admits that the documents writer

before completing the document will mention the corrections

made in the document. She states that she did not notice the

corrections made in Ex.P.1. She admits that her father Singa

Gujaran affixed LTM on Ex.P.1. Further admission of PW-1

appearing in the form of question and answer on the face

depict that the said corrections and deletions appearing in

Ex.P.1 was made before the contents were read over to Singa

Gujaran. In this regard, I am inspired to extract the testimony

of PW-1 appearing in the form of question and answer made

not in her cross examination, which reads thus:

Question: Is it not that the striking off and the correction at

the end of the document made at the time of preparation of the

document by the scribe?

Answer: Striking off and the correction were written at the

time when the document was read over to my father.

6

(True and correct English Translation of Kannada Portion).

Thus the answer given by PW-1 appearing in the cross-

examination itself suffice to conclude that the corrections

made in Ex.P.1 were within the knowledge of Singa Gujaran

and when the scribe read over the contents of Ex.P.1, those

corrections were found in Ex.P1. In this regard the testimony

of PW-5 may be recollected, who in the chief-examination

itself has deposed that the contents of Ex.p1 were read over

by the scribe to Singa Gujaran, who admitted the same and

affixed his LTM. This shows that, after the name of plaintiff

`Rukma’ was deleted and the corrections were made, so as to

bequeath to 3 persons instead of 4 persons, Singa Guajan by

understanding that the name of Rukma was deleted and the

`B’ schedule property was to be bequeathed only to

defendants 1 to 3, affixed his LTM. After giving answer as

extracted supra, PW-1 realised and further deposed that she

gave such answer in confusion, but there was no such

confusion as a clear cut question was put to her and she gave a

very clean answer and the same has been recorded.”

The trial Court also discarded the testimony of PW-5 by making the

following observations:

“The plaintiff examined PW-5 to prove Ex.P.1 and also to

convince the court that the corrections made in Ex.P.1

deleting the name of the plaintiff as after thought by defendant

No.1, whereas the said correction was not found when Singa

Gujaran affixed his LTM, but in this regard the plaintiff failed

to convince that fact, because PW-5 not supported to that

extent. When Ex.P.1 was confronted to PW-5, he has deposed

that the contents of the same were read over to Singa Gujaran

by the scribe, who admitted the contents and then affixed his

LTM. This witness states that he also read over the contents

of Ex.P.1 and states thus:

`After having read this, what stated in Ex.P.1 now was in

fact written.

7

Question:-1 Whether in Ex.P.1 on the first page the

word, `nalvarige’ was struck off and the word `moovarige’

was written in pen at that time?

        Ans:-         I do not know about it.


        Question:-2           Whether   in   the   second   page   the   word, 

`Rukma’ was struck off and on top of it `3′ as written in pen

and in the next line the word, `nalvaru’ was struck off and the

word, `moovaru’ was written in pen at that time?

Ans:- I do not know about it also.

(True and correct English translation of Kannada portion).

Thus, the testimony of PW-5 goes against the assertion of the

plaintiff, because PW-5, who is a doctor and who was treating

Singa Gujaran has clearly deposed that whatever the contents

appear now in Ex.P.1, were very much present when Singa

Gujaran executed it, thereby he has ruled out the possibility of

any corrections or alterations made after execution of it by

Singa Gujaran. He has not deposed that the corrections noted

in Ex.P.1, were not present at the time of execution by Singa

Gujaran, but to the questions put to him as extracted above, he

has shown ignorance, but his first part referred supra,

unequivocally depict that the contents of Ex.P.1 which are

now existing, including the corrections and alterations, were

available at the time of execution by Singa Gujaran.”

The trial Court finally held that respondent No.1 was not entitled to

any share in the suit property and accordingly dismissed the suit.

8. In the appeal filed by respondent No.1, the High Court framed the

following points:

8

“1) Whether the alternation/deletion of the plaintiff’s name

in the first Will Ext.P.1 was done prior to its execution

by the executant or not?

2) Whether the finding of the court below that the second

Will Ext.D-1 is proved, is justified or not?”

9. The High Court first considered the issue whether

corrections/alterations made in Exhibit P.1 existed when the testator

appended his thumb impression, referred to the evidence produced by the

parties, noticed Section 71 of the Indian Succession Act, 1925 (for short,

`the Act’) and observed:

“A bare perusal of the original of Ext.P.1 discloses the first

alteration is found at page No.1 in the last second and third line,

where the name of Rukkamma has been struck off and

subsequently in place `to four persons’ is struck off and the

word `to three persons’ is inserted in page No.2 and in third line

the word Rukkamma is deleted and in the fourth line `to four

persons’ is struck off and `to three persons’ has been inserted.

As required under Section 71 of the Indian Succession Act,

1925 no signature of the testator is made in the margin or at

some other part of the Will or near to such alteration or at the

foot or end or opposite to a memorandum referring to such

alteration. Therefore, when such alteration has not been made

in the manner indicated under Section 71 such alterations will

not have any effect. Secondly, as to the question whether said

alterations were made prior to the execution of the Will or

subsequent to the execution of the Will there is absolutely no

evidence adduced by either of the parties. However, an attempt

is made on the part of the respondents counsel to point out the

evidence of PW-1 wherein she has stated that the said

corrections are made at the time when it was read over to her

father whereby meaning that after alterations were made it was

9

read over to the executant and he affixed his LTM in token of

such alterations also. It is this admission which has been taken

note of by the court below to hold that the said alterations were

there before execution and therefore, the Will has to be

executed with the said alterations. It is nobody’s case that PW-

1 was present at the time of the execution of Ext.P.1 In fact,

realising the mistake committed by her an attempt is made

subsequently to explain it. But it is clear that her admission has

no legal basis as she was not present at the time Ex.P1 was

executed. If the evidence is excluded from record, there is no

other evidence placed on record by the defendant to

demonstrate that the said alteration was made prior to the

execution of the Will. In fact, the doctor, attesting witness PW-

5 is unable to answer a pointed question whether such

alterations were there when the Will was executed and when he

attested the Will. In the aforesaid circumstances, no importance

could be given to the so called admission of the plaintiff to hold

that the said alterations were there before executing the

Will……….”

(emphasis supplied)

10. The High Court then considered the question whether Singa Gujaran

had voluntarily executed the second Will (Ext. D1), analysed the evidence

produced by the parties including statements of the doctors examined by

respondent No.1 and answered the same in negative. The High Court also

dealt with the reasons put forward by the appellant and respondent No.2 to

justify the alleged decision of Singa Gujaran to disinherit respondent No.1

and observed:

“On the face of it the said reason given for disinheriting the

plaintiff do not appear to be genuine. The mother of the

plaintiff died in the year 1985. If his father was upset

10

because she did not attend the funeral in 1985, in 1987

when he was making the will he would not have given a

share in the B-schedule property to the plaintiff under

Ex.P.1 and that cannot be made a ground to disinherit the

plaintiff in the second will when under the first will a specific

share has been given to the plaintiff. In between the first will

and second will hardly the gap is three months. The case

advanced by the defendant is after making the first will his

father went to Bombay to the second defendant’s house

and the plaintiff did not visit him. Absolutely no material is

placed before court to substantiate the said case. The said

case is highly impossible because the material on record

disclose that on 11lh of August 1987 his father was

admitted to Tara Clinic which fact was totally denied by the

defendant in her reply notice. It is to demonstrate the said

fact the plaintiff has examined three doctors as witnesses.

Their evidence has remained unchallenged and ultimately

the defendant also admits that the father was admitted to

Tara Nursing Home. The evidence on record disclose that

on 11th of August 1987 when the father was admitted in the

hospital after examination when it was found that he was

suffering from stomach cancer probably as it was at

advanced stage the doctor advised the parties to take him

back to the house as no useful purpose would be served by

keeping him in the clinic. Therefore, after examination he

was brought back to the house and no treatment was

given. The evidence of his grandson PW-6 who is son of

third defendant gives an indication of his state of health. At

the time of attesting the testator was in the nursing home.

He states that on 11th of August 1987 he was admitted to

the nursing home and on 13th he was discharged. The

doctors informed them that the deceased is at the

advanced stage of cancer and they cannot give any

treatment. Therefore, three persons lifted him to the car and

brought him back to the house. When he was brought to

the house from the hospital he was in unconscious state

and he was not taking any food. Dr. Subbarao was visiting

the house. After he was taken to Tara Clinic he was not in

a position to walk. In fact, the said witness and his mother

was staying next doors to the house where Singa Gujaran

11

was staying. In the cross-examination of DW-1 she admits

that her relationship with her mother was cordial. Under

these circumstances, the materials on record disclose that

at the time Ext. D-1 was alleged to have been executed by

the executant he was suffering from stomach cancer and

his health was not in good state. It is 14 days after his

admission to the nursing home the said will has come into

existence. Fourteen days thereafter he has died. It cannot

be said that under these circumstances he was in a sound

state of disposing state of mind to execute Ext.D-1.”

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

We shall first consider the question whether the hand written endorsement

made at the end of the typed Will (Exhibit P.1) was made at the instance of

the testator before he affixed his left thumb mark and whether the High

Court committed an error by reversing the finding recorded by the trial

Court on this issue.

12. Sections 63 and 71 of the Act which have bearing on the decision of

the first question read as under:

“63. Execution of unprivileged Wills.- Every testator, not

being a soldier employed in an expedition or engaged in actual

warfare, or an airman so employed or engaged, or a mariner at

sea, shall execute his Will according to the following rules:-

(a) The testator shall sign or shall affix his mark to the Will,

or it shall be signed by some other person in his presence

and by his direction.

12

(b) The signature or mark of the testator, or the signature of

the person signing for him, shall be so placed that it shall

appear that it was intended thereby to give effect to the

writing as a Will.

(c) The Will shall be attested by two or more witnesses, each

of whom has seen the testator sign or affix his mark to

the Will or has seen some other person sign the Will, in

the presence and by the direction of the testator, or has

received from the testator a personal acknowledgement

of his signature or mark, or of the signature of such other

person; and each of the witnesses shall sign the Will in

the presence of the testator, but it shall not be necessary

that more than one witness be present at the same time,

and no particular form of attestation shall be necessary.

71. Effect of obliteration, interlineation or alteration in

unprivileged Will. – No obliteration, interlineation or other

alteration made in any unprivileged Will after the execution

thereof shall have any effect, except so far as the words or

meaning of the Will have been thereby rendered illegible or

undiscernible, unless such alteration has been executed in like

manner as hereinbefore is required for the execution of the

Will:

Provided that the Will, as so altered, shall be deemed to be duly

executed if the signature of the testator and the subscription of

the witnesses is made in the margin or on some other part of the

Will opposite or near to such alteration, or at the foot or end of

or opposite to a memorandum referring to such alteration, and

written at the end or some other part of the Will.”

13. An analysis of Section 63 shows that the testator must sign or affix his

mark on the Will or the same shall be signed by some other person as per his

direction and in his presence. The signature or mark of the testator or the

signature of the person signing for him shall be placed in a manner which

13

may convey the intention of the testator to give effect to the writing as a

Will, which is also required to be attested by two or more persons, each of

whom must have seen the testator sign or affix his mark on the Will or some

other person sign the Will in the presence or as per the direction of the

testator. If the witness has received a personal acknowledgment from the

testator of his signature or mark or the signature of other person signing on

his behalf, then it is not necessary that both the witnesses shall

simultaneously remain present. The section also lays down that no

particular form of attestation is necessary.

14. The plain language of Section 71 makes it clear that any alteration

made in an unprivileged Will after its execution has no effect unless such

alteration has been executed in the same manner in which the Will is

executed. The proviso to this section carves out an exception and lays down

that such alterations shall be deemed to be duly executed if the signature of

the testator and the subscription of the witnesses is made in the margin or on

some other part of the Will opposite or near to such alterations or at the foot

or end or opposite to a memorandum referring to such alterations and written

at the end or some part of the Will.

14

15. A careful scrutiny of the pleadings of the parties and the evidence

produced by them shows that Will Exhibit P.1 was scribed by Narsappayya

and was witnessed by PW-5 Dr. J. Subba Rao and B.V. Amin. Respondent

No.1 was not present at the time Exhibit P.1 was scribed and executed by

Singa Gujaran by putting his left thumb mark. In his testimony, PW-5 stated

that the contents of Exhibit P.1 were read over to Singa Gujaran by

Narsappayya and he understood the same. PW-5 expressed ignorance about

the corrections/alterations made in the Will i.e. scoring out of the word

`four’ and writing of word `three’ as also scoring out the name of respondent

No.1 Rukma. He then stated that Singa Gujaran was suffering from stomach

cancer and when he sent the patient to Dr. Prabhakar in July/mid-August, he

was finding it difficult to eat. Later, Dr. Prabhakar referred the patient to Dr.

Ballal who confirmed that he was suffering from stomach cancer.

16. We have gone through Exhibit P.1, which was got produced by

respondent No.1 from the appellant. Four corrections have been made on

pages 1 and 2 of this document. The figures written in letters (four) were

substituted with numbers (3) and the name of respondent No.1 was scored

out (page 2). At the end of the Will, the testator appended his left thumb

mark. On the right side of thumb mark a line has been written with the ink

pen/ball pen suggesting that the corrections/alterations were made prior to

15

putting of left thumb mark by the testator. However, the space between the

last line of the typed Will (in Kannada) and what was written with the ink

pen/ball pen leaves no manner of doubt that the writing on the right side of

the thumb mark was made after execution of the Will. If the

corrections/alterations had been made before the testator had appended his

left thumb mark, there was no reason why the line showing deletion of the

name of respondent No.1 and corrections in the figures were not reflected in

the typed Will and why the line was inserted in the little space left between

the concluding portion of the Will and the space where the left thumb mark

was put by the testator. Therefore, we approve the view taken by the High

Court that the corrections/alterations made in Exhibit P1 cannot be said to

have been duly attested by the testator as per the requirement of Section 71

of the Act and respondent No.1 is entitled to share in the property specified

in Schedule `B’ appended to the plaint.

17. The next question which merits consideration is whether Exhibit D.1

was duly executed by Singa Gujaran and, therefore, the first Will will be

deemed to have become redundant. Admittedly, Ext. D1 was propounded

by the appellant and respondent No.2 and was contested by respondent No.1,

who specifically pleaded that by taking advantage of the ill health of the

father, the appellant and respondent No.2 conspired and manipulated

16

execution of the second Will purporting to disinherit her. According to

respondent No.1, at the time of execution of the second Will, Singa Gujaran

was seriously ill and was not in a sound state of mind so as to understand the

implications and consequences of his actions. In support of this assertion,

respondent No.1 examined Dr. B.R. Kamath (PW-2), Dr. Prabhakar Rao

(PW-3) and Dr. C.R. Ballal (PW-4) apart from PW-5 Dr. J. Subba Rao. All

of them categorically stated that Singa Gujaran was suffering from acute

stomach cancer and he was not in a position to eat. The statement of PW-6

is also significant on the issue of health of the executant. This witness gave

out that the executant was taken to the car by three persons and they brought

him back to the house in an unconscious state of mind and he was not taking

any food. PW-6 also gave out that the executant was not in a position to

walk. The appellant and respondent No.2 relied upon the testimony of PW-

5, who had been examined by respondent No.1 to prove the execution of the

Will Exhibit P.1. In his cross examination PW-5 disclosed that as per his

knowledge, Singa Gujaran had made two Wills and he was a witness to the

second Will as well which, according to him, was also scribed by

Narsappayya. According to PW-5, the testator had affixed left thumb mark

on Exhibit D.1 and he had signed the Will as a witness in the clinic. What is

significant to be noted is that PW-5 did not say that Singa Gujaran had

17

affixed left thumb mark in his presence and that he had put his signatures as

witness in the presence of the testator. As to the state of health of the

executant, PW-5 categorically stated that he was suffering from acute

stomach cancer and was not in a position to eat or walk. It has come in the

evidence of the parties that the executant was admitted in Tara Clinic on

11.8.1987 and when the doctor attending him found that cancer was at an

advanced stage, they advised the parties to take him home. It has also come

on record that just 14 days after the execution of the second Will, the

executant died. Therefore, it is not possible to find any fault with the finding

recorded by the High Court that the execution of Exhibit D.1 was highly

suspicious.

18. It is also apposite to observe that if Singa Gujaran had consciously

decided to disinherit respondent No.1 in the first Will by appending his left

thumb mark after corrections/alterations were made and the name of

respondent No.1 was deleted, there was no reason for him to execute the

second Will. In her evidence, the appellant and respondent No.2 could not

offer any tangible explanation as to why it became necessary for her father

to execute the second Will after he had already disinherited respondent No.1.

This also supports the conclusion that execution of Exhibit D.1 was not a

voluntary act of the testator.

18

19. We may now advert to the two reasons put forth by the appellant and

respondent No.2, which did not find favour with the High Court, to

substantiate their plea that the testator had consciously disinherited

respondent No.1. The first reason was that respondent No.1 did not attend

the funeral of her mother and on that count the father was upset. On the face

of it, this reason does not sound plausible. It is an admitted position that the

mother of the parties died in 1985. If the father was upset with respondent

No.1 on the ground that the latter had not come to attend the funeral of the

mother, then he would not have given any share to her in item No.2 of the

Schedule appended to Ext. P1. However, the fact of the matter is that the

testator did give share to respondent No.1 along with two other daughters. It

is a different thing that some manipulative alterations were made in Ext. P1

giving an impression that before putting his left thumb mark, the testator had

consciously disinherited respondent No.1. The second reason was that

respondent No.1 did not come to attend him during his visit to Bombay in

May, 1987. In this context, it is important to bear in mind that the appellant

and respondent No.2 did not adduce any evidence to prove that the testator

had visited Bombay between 25.5.1987 i.e. the date on which the first Will

was executed and 11.8.1987 when he was admitted in the nursing home.

That apart, it was highly improbable that the testator, who was terminally ill,

19

would have gone to Bombay for the purpose of treatment. Therefore, the so

called failure of respondent No.1 to meet the testator during his visit to

Bombay cannot be relied upon as a ground for accepting the version of the

appellant and respondent No.1 that he was upset with respondent No.1 and

decided to disinherit her by executing Ext. D1.

20. In the result, the appeal is dismissed. The parties are left to bear their

own costs.

……………………………………J.

[G.S. Singhvi]

…………………………………….J.

[Asok Kumar Ganguly]

New Delhi

October 31, 2011.

Vasanth Sreedhar Kulkarni & Ors vs State Of Karnataka & Ors on 14 October, 2011

Last Updated on

Supreme Court of India
Vasanth Sreedhar Kulkarni & Ors vs State Of Karnataka & Ors on 14 October, 2011
Bench: G.S. Singhvi, Asok Kumar Ganguly
                                                        Non-reportable


               IN THE SUPREME COURT OF INDIA


                CIVIL APPELLATE JURISDICTION

                                      


             CIVIL APPEAL NOS. 6662-6670 OF 2002




Vasanth Sreedhar Kulkarni and others          ......Appellants


                                 Versus


State of Karnataka and others                 ......Respondents


                                    With


             CIVIL APPEAL NOS. 6671-6676 OF 2002





Mumtaz Begum Imam Husen

Maribalkar  and others                        ......Appellants


                                 Versus


State of Karnataka and others                 ......Respondents




                          J U D G M E N T

G.S. Singhvi, J.

2

1. Whether Vasanth Sreedhar Kulkarni, Eshwar Gouda Burma

Gouda Patil and Ms. Mehrunnisa Mahazuz Husen Maniyar (appellants

in C.A. Nos. 6662-6670/2002) had the locus to question the allotment

of sites to the private respondents from land bearing survey Nos. 533/1,

534A and 534B of village Kanabargi, Belgaum despite the fact that the

writ petitions filed by Vasanth Sreedhar Kulkarni and Eshwar Gouda

Burma Gouda Patil had been dismissed by the High Court in 1996 and

also the fact that they claim to have sold the acquired land and whether

the purchasers were entitled to contest writ petitions filed by the

allottees of the acquired land are the questions which arise for

consideration in these appeals filed against judgments dated 14.12.1999

and 04.04.2000 of the Division Benches of the Karnataka High Court.

2. In 1976, the Legislature of the State of Karnataka enacted the

Karnataka Improvement Boards Act, 1976 to provide for constitution

of Improvement Trust Boards in some cities with powers and duties for

ensuring regulated development of urban areas. The Belgaum City

Improvement Trust Board, which was one among several Trust Boards

constituted by the State Government framed Scheme Nos. 35, 43 and

3

43A for formation of residential and commercial layouts in Kanabargi

village, Belgaum. For implementation of Scheme No. 43, notification

dated 6.11.1987 was issued. However, before further steps could be

taken in the matter, the State Legislature enacted the Karnataka Urban

Development Authorities Act, 1987 (for short, `the 1987 Act’) which

envisaged the establishment of Urban Development Authorities for the

planned development of major and important urban areas in the State.

The Belgaum Urban Development Authority (for short, `the BDA’)

was constituted under Section 3 of the 1987 Act. After some time, the

BDA undertook the task of implementing Scheme Nos. 35, 43 and 43A

of Kanabargi covering an area measuring 336 acres 6 guntas by

involving revenue survey Nos. 529, 531 to 549, 553P, 556 to 562, 564

to 570, 571P, 572 to 677 at an estimated cost of Rs.25.35 crores.

Notification dated 16.8.1991 was issued under Section 17(1) of the

1987 Act in respect of land comprised in survey Nos. 533/1, 534/A and

534/B owned by Vasanth Sreedhar Kulkarni, Kashibai Patil and

Eshwar Gouda Burma Gouda Patil respectively for implementing

Scheme No.43. By an order dated 9.6.1994, the State Government

accorded sanction under Section 18(3) of the 1987 Act for formation of

4

4065 sites from the aforesaid survey numbers. The relevant portions of

the English translation of that order, which has been made available by

learned counsel for the State of Karnataka are extracted below:

“Belgaum Urban Development Authority, Belgaum

informed the Government that, by preparing Scheme

No.35,43,43 A of Kanabargi it would form totally 4065 in

an area measuring 336 acres and 06 gunthas by involving

R.S. Nos. 529, 531 to 549, 553P, 556 to 562, 564 to 570,

57IP, 572 to 677, and the estimated cost of the Scheme in

Rs. 25.35 Crores and from the Scheme the income to the

Authority is Rs. 27,88,84,000.00, and the net income to

the Authority would be Rs. 2,53,81,000.00, and this is self

economically aided scheme and the Authority would not

claim any assistance from the Government. It is further

stated that in this scheme 20 x 30 sites have reserved for

economically weaker sections and a provision has been

made for water supply, drainage and electricity the

estimated cost of the scheme and area is reserved for

garden, playground and Civic Amenity sites, as per Sub

Section (c) and (d) of Section 16 of the Karnataka Urban

Development Authorities Act 1987. Hence, requested for

according administrative approval for the said scheme.

Government Order in No.HUD/446/MIB, Bangalore,

Dated 9th June 1994.

After considering the proposal of the letter the

Commissioner,

Belgaum Urban Development Authority, Belgaum in the

above read, the sanction is accorded under section 18(3)

of the Karnataka Urban Development Authorities Act

1987, for formation of 4065 sites at a cost of Rs. Rs. 25.35

5

Crores to the Kanabargi Scheme No.35, 43, 43A of

Belgaum Urban Development Authority, Belgaum in

lands measuring 336 gunthas, subject to the following

conditions.

xxxx xxxx xxxx”

3. Thereafter the State Government issued Notification under

Section 19(1), which was published in Karnataka State Gazette dated

1.9.1994 in respect of survey No.533/1 measuring 5 acres 7 guntas

belonging to Vasanth Sreedhar Kulkarni and survey Nos. 534/A and

534/B measuring 3 acres and 22 guntas belonging to Smt. Kashibai

Patil and Eshwar Gouda Burma Gouda Patil. The Special Land

Acquisition Officer, BDA, who was appointed by the State

Government to exercise the powers of the Deputy Commissioner under

Section 3(c) of the Land Acquisition Act, 1894 (for short, `the 1894

Act’) issued public notice dated 16.9.1994 and informed the

landowners and persons having interest in the land that various survey

numbers including survey Nos. 533/1, 534A and 534B have been

included in Scheme Nos. 35, 43 and 43A.

6

4. The award prepared by the Special Land Acquisition Officer was

approved by the State Government vide order dated 11.12.1995 and

was published on 13.12.1995. On the next date i.e., 14.12.1995, notice

was issued to the landowners under Section 12(2) of the 1894 Act. The

possession of land comprised in survey No.534/A+C was taken on

1.1.1996 and name of the BDA was mutated in the revenue records.

5. In the meanwhile, Vasanth Sreedhar Kulkarni and Eshwar Gouda

Burma Gouda Patil filed Writ Petition Nos. 30236 and 30237 of 1994

questioning the notifications issued under Sections 17(1) and 19(1) of

the 1987 Act. Smt. Kashibai Patil and one Shri Malappa also filed

similar writ petition bearing Nos. 30927/1994 and 30928/1994. All the

writ petitions were dismissed by the learned Single Judge on 19.4.1996.

The applications filed by the writ petitioners under Order IX Rule 13

read with Section 151 CPC for recalling that order on the ground that

their counsel could not appear on the date of hearing were dismissed by

the learned Single Judge vide order dated 18.6.1996 by observing that

the writ petitions had been dismissed on merits.

7

6. After dismissal of the writ petitions, possession of land

comprised in survey Nos. 533/1 and 534/B was also taken by the

competent authority and entries were made in the record of rights in the

name of the BDA, which then formed 112 sites, carried out

development works like construction of roads at a cost of Rs.43 lacs

and allotted 82 sites to the eligible persons between 31.3.1997 and

20.3.1999. 45 of the allottees executed lease-cum-sale agreement by

depositing the entire amount. 8 allottees also started construction of the

houses. 17 allottees took steps for execution of lease-cum-sale

agreement and the remaining 22 allottees made partial payment of the

cost of land.

7. After the issuance of notifications under Sections 17(1) and 19(1)

of the 1987 Act, the landowners entered into some clandestine

transactions with Allahuddin Khan, who was described as their General

Power of Attorney and the latter created large number of documents on

ten rupees stamps showing sale of small parcels of land to Smt.

Mumtaz Begum and others.

8

8. After taking possession of the acquired land and making the

allotment of sites, the BDA demolished unauthorized constructions

made by some of those to whom small parcels of land are said to have

been sold by Allahuddin Khan. At that juncture, Allahuddin Khan and

others made representation dated 27.2.1998 to the Commissioner, BDA

for release of land comprised in survey Nos. 533/1, 534/A and 534/B

by stating that 120 persons belonging to weaker sections of the society

have constructed houses after taking loan and even the scheme

sanctioned by the State Government envisages allotment of 52% plots

to the persons belonging to backward classes and weaker sections of

the society.

9. The then Chairman and three other members of the BDA made

spot inspection on 12.3.1998 and prepared a report with the suggestion

that land measuring 8 acres 29 guntas, which had been unauthorisedly

sold by the landowners to the poor persons on ten rupees stamp papers

may be deleted in favour of the purchasers by collecting development

charges. The matter was then considered in the meeting of the BDA

held on 16.3.1998 and despite the strong opposition by the

9

Commissioner, it was decided to recommend regularization of the

transfers made by the landowners by deleting survey Nos. 531/1, 534/A

and 534/B from the notifications issued under Sections 17(1) and 19(1)

of the 1987 Act. The resolution of the BDA was forwarded to the

State Government vide letter dated 3/4.6.1998. After about 3 months,

the Commissioner sent D.O. letter dated 2.9.1998 to the Principal

Secretary, Urban Development Department, State Government

detailing the reasons for not deleting land comprised in 3 survey

numbers. He pointed out that the plots have already been carved out

and allotted to different persons at a price of Rs.1,73,56,000/-.

However, the State Government accepted the recommendations

contained in the resolution dated 16.3.1998 and issued notification

dated 24.3.1999 under Section 19(7) of the 1987 Act.

10. Within few days of deleting three survey numbers from the

process of acquisition, Shri Shankar M. Buchadi took over as Chairman

of the BDA and under the leadership of new Chairman, the

Commissioner, BDA sent letter dated 3.4.1999 to the Secretary to the

State Government for cancellation of notification dated 24.3.1999. The

10

matter was also considered in the meeting of BDA held on 15.4.1999

and a resolution was passed to make a request to the State Government

to withdraw notification dated 24.3.1999. The same reads as under:

“The meeting of the Authority discussed regarding the

problem that has arisen on account of deletion of the land

measuring 08 Acres – 29 Gs out of R.S. No. 533 & 534A &

B of Kanbargi village from the Kanbargi Scheme of

Belgaum Urban Development Authority, Belgaum under

Govt. Notification No.NA.A.E./172/BEMPRA VI/98,

dated:24.03.1999.

In the said lands, already 112 sites have been formed out of

which, 82 sites have been allotted & out of 82 sites, 45

allottees have got executed Lease-cum-Sale Agreement by

depositing entire amount and 08 allottees have undertaken

the work of construction of houses by expending

Rs.3,00,000/- and 17 allottees are under the stage of

execution of the Lease-cum-Sale Agreements by depositing

entire amount @ 22 allottes have deposited the partial value

of the site and this aspect has been considered in the

meeting. The meeting opined that, the Authority has to face

the critical position on account of deletion of the said land

from the Scheme of the Authority as this stage by the Govt.

Apart from this, the meeting considered the fact that, the

erstwhile owners of the said lands, tried to get their names

entered in the village records illegally and without

knowledge the Authority. Further, the meeting also

considered the fact regarding refund of Rs.1.00 Crore to 82

Allottees, who have deposited the site value & the

Authority is unable to make arrangement of allotment of

sites to the allottees and now, the Authority is unable to

bear this financial burden. The meeting also opined that, it

11

is not possible to the Authority to bear the expenditure of

Rs.20.00 lakhs incurred for construction of house by the

allottees and to refund the amount incurred by 45 allottees

for Registration of Lease-cum-Sale Agreements. The

meeting also noted that the Authority has to bear the loss of

Rs.43.00 lakhs already incurred for Developmental Works,

apart from this, the allottees may approach the Courts

against the Authority. Hence, it has been resolved to submit

detailed report to the Govt, to withdraw the D’Notification

of the acquired lands from the Scheme of the Authority in

the interest of public at large.”

11. The new Chairman also wrote letter dated 17.4.1999 to the

Karnataka Minister for Urban Development for cancellation of

notification dated 24.3.1999. The relevant portions of that letter are

extracted below:

“In Government Notification No.UDD 172 BEMPRA

VI/98, dated: 24.3.1999 the lands of Kanbargi village

bearing R.S. No. 533, 534A and 534B measuring 8 acres 29

guntas have been deleted from the scheme of the Authority.

In this already 82 sites. In the meeting of the authority

dated: 15.4.1999 it has been discussed in detail regarding

the problem arose on account of this notification. In the

said meeting it was considered the fact regarding formation

of 112 sites, allotment of 82 sites, execution of lease cum

sale agreement in respect of 45 sites, constructions of

houses by 7 allottees by incurring Rs.3 lakhs, 17 allottees

about to get the lease cum sale agreement and deposit of

part of value of the sites by 20 allottees.

12

Under these circumstances, it is submitted that, in the area

of the said lands, 113 sites of different sizes have been

formed, out of the same already 82 sites have been

distributed to the public, out of these 82 sites, 62 persons

have deposited full value of the sites, out of these lease-

cum-sale agreements in respect of 45 sites have been got

executed 20 persons then deposited part of value of the

sites, as per rules there is scope for depositors the amount

out of 45 allottees who have got executed the lease-cum-

sale agreements, 6 persons have obtained the building

person for construction of the building over the sites, and in

these the work of construction of houses is under progress.

These 6 houses have been constructed up to slab level and

the Engineer of the Authority has estimated the cost of

construction of Rs.5,50,000/- per house. Apart from this,

the Authority has already formed roads in these lands by

incurring expenditure about Rs.11,00,000/- and about

Rs.24,00,000/- worth electrification and the work of

formation of pacca gutter is under progress and

Rs.5,05,000/- is incurred under land acquisition.

Notwithstanding, since the lands are deleted by the

Government from the scheme, 82 persons who have

already been allotted the sites have sustained loss. Apart

from this, it is not possible to the Authority to make

alternative arrangement to them and it would be difficult to

cancel the lease-cum-sale agreement in respect of the sites.

In this background, the Authority has to face the severe

objections from public allottees, and there may be the

possibility of facing Court litigations. Therefore, from the

public point of view and in the interest of the Authority it is

suitable to cancel the said notification by reconsidering the

notification issued by the Government by already deciding

to delete these lands from the scheme. Hence, kindly

considering these facts, it is requested immediate action for

cancelling the notification.”

13

12. In the meanwhile, some of the allottees of sites carved out by the

BDA filed Writ Petition Nos. 16003-16008/1998 for quashing

notification dated 24.3.1999 by asserting that the State Government did

not have the jurisdiction to issue notification under Section 19(7) of the

Act. They pleaded that after dismissal of the writ petitions filed by the

landowners, the BDA had carried out development and allotted sites to

eligible persons some of whom had paid full price and started

construction. They further pleaded that with a view to frustrate the

scheme, the landowners executed power of attorney in favour of

Allahuddin Khan who, in turn, sold the plots on stamp papers of

Rs.10/- obtaining permission from the competent authority and that the

State Government had illegally denotified the acquired land by relying

upon the recommendations made by the BDA which was headed by a

political person. As a counter blast, Vasanth Sreedhar Kulkarni and

two others filed Writ Petition Nos. 19264-19266/1999 questioning the

allotment of sites by the BDA by asserting that the Commissioner had

no authority to allot any site carved out of survey Nos. 533, 534A and

534B because the BDA had already passed resolution dated 16.3.1998

for deleting those survey numbers from the notifications issued under

14

Sections 17(1) and 19(1) of the 1987 Act and the State Government had

issued notification under Section 19(7) of that Act.

13. During the pendency of the writ petitions, Smt. Mumtaz Begum

and 50 others filed an application in Writ Petition Nos. 16003-

16008/1998 for impleadment as parties. The learned Single Judge

disposed of all the writ petitions by common order dated 16.7.1999. He

first dealt with the application for impleadment and rejected the same

by making the following observations:

“Before taking up this writ petition on merits, it is also

necessary to notice that by means of IA.II as many as 51

persons wants to come on record as contesting respondents

to the writ petition. The interest claimed by them is “that all

of them pursuant to an agreement of sale executed by the

land owners of the acquired property, were put in

possession and they have raised permanent construction.

Therefore, have an interest”.

It is not disputed that these alleged “agreement of sale”

were executed by the land owners subsequent to the

dismissal of the writ petitions challenging the acquisition

proceedings. Hence, on the day or dates when the land

owners alleged to have executed the agreement of sale, they

had no legal right to sell the property and therefore these

applicant cannot be said to have acquired any interest

known to law in the property. Even otherwise, the right of

an agreement holder is only to sue for specific performance

or to enforce the contract. It cannot be said that he would

be having any right to property. Looking from any angle,

15

these applicants cannot be said to have any interest in the

property to come on record and contest the writ petitions.

Hence, the application IA.II is rejected.”

14. The learned Single Judge then considered the question whether

the State Government had the power to denotify the acquired land.

After adverting to the grounds on which the allottees had questioned

notification dated 24.3.1999, the learned Single Judge held that power

to denotify the acquired land can be exercised only before possession

thereof is taken and as the BDA had already taken possession, the State

Government could not have issued notification dated 24.3.1999. The

learned Single Judge then referred to Section 19(7) and held that the

power to denotify or reconvey land included in the scheme can be

exercised only by the Authority and not by the State Government. The

learned Single Judge also declared that the erstwhile landowners do not

have the locus to challenge the allotment of sites because the writ

petitions filed by them questioning the notifications issued under

Sections 17(1) and 19(1) of the 1987 Act had been dismissed and the

acquired land had vested in the BDA.

16

15. The writ appeal filed by Vasanth Sreedhar Kulkarni and two

others was dismissed by the Division Bench, which agreed with the

learned Single Judge that the State Government did not have the power

to denotify the acquired land by issuing notification under Section

19(7). Writ Appeal Nos. 1711-1716/2000 and 2450-2454/2000 filed by

Mumtaz Begum and others were dismissed by another Division Bench

by relying upon order dated 14.12.1999 passed in the writ appeals filed

by Vasanth Sreedhar Kulkarni and two others.

16. Before this Court several interlocutory applications were filed by

the parties. I.A. Nos. 20-28/2010 were filed by appellants Vasanth

Sreedhar Kulkarni and two others for placing on record xerox copies of

notice dated 4.9.1996 issued by the Special Land Acquisition Officer,

BDA under Section 16(2) of the 1894 Act read with Karnataka

(Amendment) Act, 1961 and letter dated 25.10.2008 written by the

Special Land Acquisition Officer to Shri Vasheemkhan stating therein

that there is no mention in the record of the BDA of compensation

amount regarding survey Nos. 533/1 and 534/B. Two I.As. including

I.A. Nos. 56-64/2010 have been filed by Vasanth Sreedhar Kulkarni

17

and two others for permission to urge additional grounds. They have

also filed copies of the writ petitions, order dated 14.10.1980 passed by

the State Government vide HUD.172/1979, English translation of

newspaper – Tarun Bharat dated 29.9.1994 and application filed under

Section 151 CPC before the High Court. I.A. Nos. 38-46 and 47-55 of

2010 have been filed on behalf of the BDA for permission to file

documents marked Annexures R2/2 to R2/23.

17. In compliance of the direction given by the Court, learned

counsel appearing for the State filed an affidavit dated 23.9.2010 of

Shri Shambhu Dayal Meena, Secretary to the Government of

Karnataka, Urban Development along with copies of the gazette

notifications dated 7.11.1991, 1.9.1994 and 24.3.1999, order dated

9.6.1994 passed by the State Government under Section 18(3) of the

1987 Act, the panchnamas and other documents evidencing taking of

possession of various parcels of land including survey Nos. 533/1,

534A and 534B and entries made in favour of the BDA in the record of

rights.

18

18. The first and foremost argument advanced by Shri Pallav

Shishodia, learned senior counsel appearing for the appellants is that

notwithstanding dismissal of Writ Petition Nos. 30236 and 30237 of

1994 filed by Vasanth Sreedhar Kulkarni and Eshwar Gouda Burma

Gouda Patil, the notifications issued by the BDA and the State

Government under Sections 17(1) and 19(1) respectively are liable to

be quashed because the 1987 Act does not provide for the acquisition

of land. Shri Shishodia submitted that the 1987 Act was enacted by the

State Legislature with reference to the subject enumerated in Entry 5 of

List II of the Seventh Schedule of the Constitution and that entry does

not empower the State Legislature to enact law for compulsory

acquisition of land. He further submitted that the State Government

can acquire land only under the 1894 Act, which has been enacted by

Parliament with reference to Entry 42 of List III of the Seventh

Schedule. Learned senior counsel emphasized that the provisions

contained in the 1987 Act empower the BDA and the State Government

to frame and sanction schemes for development of urban areas and also

earmark/designate the land proposed to be acquired for the execution of

the development schemes, but there is no provision in the Act under

19

which they can compulsorily acquire the land. He argued that if

Sections 17 and 19 of the 1987 Act are read as enabling the BDA and

the State Government to acquire land for the development schemes, the

same would become vulnerable to the attack of unconstitutionality.

Learned senior counsel also referred to the provisions of Sections 35

and 36 of the Act and submitted that for the purpose of acquisition the

competent authority has to comply with the mandate of Sections 4, 5A

and 6 of the 1894 Act, which has not been done in these cases. He

lastly submitted that the judgment in Bondu Ramaswamy v. Bangalore

Development Authority (2010) 7 SCC 129 requires reconsideration

because the proposition laid down therein on the scope of Sections 17

and 19 of the 1987 Act is contrary to the settled law that compulsory

acquisition of land can be made only after complying with the

provisions of the 1894 Act.

19. Learned counsel for the respondents argued that appellants’

indirect challenge to the notifications issued under Sections 17 and 19

on the ground that the 1987 Act does not provide for the acquisition of

land should not be entertained because no such plea was raised in the

20

pleadings of the writ petitions filed in 1994 or 1999, writ appeals filed

against the order of the learned Single Judge and even the memo of

special leave petitions. Shri S.N. Bhat, learned counsel appearing for

the BDA further argued that even on merits, the appellants’ challenge

to the notifications issued under Sections 17(1) and 19(1) should be

negatived because the judgment of three-Judge Bench in Bondu

Ramaswamy’s case has been approved by the Constitution Bench in

Girnar Traders (3) v. State of Maharashtra (2011) 3 SCC 1.

20. For appreciating the rival contentions in a correct perspective, we

may usefully notice Sections 16, 17, 18 and 19 of the 1987 Act. The

same read as under:

“16. Particulars to be provided for in a development

scheme. – Every development scheme under Section 15, –

(1) shall within the limits of the area comprised in the

scheme, provide for, –

(a) the acquisition of any land which in the opinion

of the authority, will be necessary for or

affected by the execution of the scheme;

(b) laying and relaying out all or any land

including the construction and reconstruction of

buildings and formation and alteration of

streets;

21

(c) drainage, water supply and electricity;

(d) the reservation of not less than fifteen per cent

of the total area of the layout for public parks

and play grounds and an additional area of not

less than ten per cent of the total area of the

layout for civic amenities.

(2) may, within the limits aforesaid, provide for,-

(a) raising any land which the authority may consider

expedient to raise to facilitate better drainage;

(b)forming open spaces for the better ventilation of

the area comprised in the scheme or any adjoining

area;

(c) the sanitary arrangements required; and

(d)establishment or construction of markets and other

public requirements or conveniences.

(3) may, within and without the limits aforesaid provide

for construction of houses.

17. Procedure on completion of scheme. – (1) When a

development scheme has been prepared, the authority shall

draw up a notification stating the fact of a scheme having

been made and the limits of the area comprised therein, and

naming a place where particulars of the scheme, a map of

the area comprised therein, a statement specifying the land

which is proposed to be acquired and of the land in regard

to which a betterment tax may be levied may be seen at all

reasonable hours.

(2) A copy of the said notification shall be sent to the

local authority, which shall, within thirty days from the

date of receipt thereof, forward to the Authority for

transmission to the Government as hereinafter provided,

any representation which the local authority may think fit

to make with regard to the scheme.

22

(3) The Authority shall also cause a copy of the said

notification to be published in two consecutive issues of a

local newspaper having wide circulation in the area and

affixed in some conspicuous part of its own office, the

Deputy Commissioner’s office, the office of the local

authority and in such other places as the authority may

consider necessary.

(4) If no representation is received from the local

authority within the time specified in sub-section (2), the

concurrence of the local authority to the scheme shall be

deemed to have been given.

(5) During the thirty days next following the day on

which such notification is published in the local

newspapers the Authority shall serve a notice on every

person whose name appears in the assessment list of the

local authority or in the land revenue register as being

primarily liable to pay the property tax or land revenue

assessment on any building or land which is proposed to be

acquired in executing the scheme or in regard to which the

Authority proposes to recover betterment tax requiring such

person to show cause within thirty days from the date of the

receipt of the notice why such acquisition of the building or

land and the recovery of betterment tax should not be

made.

(6) The notices shall be signed by or by the order of the

Commissioner and shall be served, –

(a) by personal delivery of, if such person is absent or

cannot be found, on his agent, or if no agent can

be found, then by leaving the same on the land or

the building; or

(b)by leaving the same at the usual or last known

place of abode or business of such person; or

(c) by registered post addressed to the usual or last

known place of abode or business of such person.

23

18. Sanction of scheme.- (1) After publication of the

scheme and service of notices as provided in section 17 and

after consideration of representations if any, received in

respect thereof, the authority shall submit the scheme

making such modifications, therein as it may think fit to the

Government for sanction, furnishing,-

(a) a description with full particulars of the scheme

including the reasons for any modifications inserted

therein;

(b) complete plans and estimates of the cost of

executing the scheme;

(c) a statement specifying the land proposed to be

acquired;

(d) any representation received under sub-section

(2) of section 17;

(e) a schedule showing the rateable value as

entered in the municipal assessment book on the date

of the publication of a notification relating to the land

under section 17 or the land assessment of all land

specified in the statement under clause (c); and

(f) such other particulars, if any, as may be

prescribed.

(2) Where any development scheme provides for the

construction of houses, the Authority shall also submit to

the Government plans and estimates for the construction of

the houses.

(3) After considering the proposal submitted to it to the

Government may, by order, give sanction to the scheme.

24

19. Upon sanction, declaration to be published giving

particulars of land to be acquired.- (1) Upon sanction of

the scheme, the Government shall publish in the official

Gazette a declaration stating the fact of such sanction and

that the land proposed to be acquired by the Authority for

the purposes of the scheme is required for a public purpose.

(2) The declaration shall state the limits within which the

land proposed to be acquired is situate, the purpose for

which it is needed, its approximate area and the place

where a plan of the land may be inspected.

(3) The said declaration shall be conclusive evidence that

the land is needed for a public purpose and the Authority

shall, upon the publication of the said declaration, proceed

to execute the scheme.

(4) If at any time it appears to the Authority that an

improvement can be made in any part of the scheme, the

Authority may alter the scheme for the said purpose and

shall subject to the provisions of sub-sections (5) and (6)

forthwith proceed to execute the scheme as altered.

(5) If the estimated cost of executing the Scheme as

altered exceeds by a greater sum than five per cent of the

estimated cost of executing the scheme as sanctioned, the

Authority shall not, without the previous sanction of the

Government, proceed to execute the scheme, as altered.

(6) If the scheme as altered involves the acquisition other

wise than by agreement, of any land other than the land

specified in the schedule referred to in clause (e) of sub-

section (1) of section 18, the provisions of sections 17 and

18 and of sub-section (1) of this section shall apply to the

part of the scheme so altered in the same manner as if such

altered part were the scheme.

25

(7) The Authority shall not denotify or reconvey any

land included in the scheme without the specific orders of

the Government.

(8) The Authority shall not allot any land to any

individual, organization or authority, the civic amenity area

earmarked in the scheme without the orders of the

Government.”

21. The above noted provisions are pari materia to Sections 15, 16,

17 and 19 of the Bangalore Development Authority Act, 1976, which

were interpreted in Bondu Ramaswamy’s case. An argument similar to

the one made before us was rejected by three-Judge Bench by making

the following observations:

“The assumption by the appellants that Chapter III of the

BDA Act relating to development schemes does not

provide for acquisition is erroneous. Sections 15 to 19 of

the BDA Act contemplate drawing up of a development

scheme or additional development scheme for the

Bangalore Metropolitan Area, containing the particulars set

down in Section 16 of the said Act, which includes the

details of the lands to be acquired for execution of the

scheme. Section 17 requires the BDA on preparation of the

development scheme, to draw-up and publish in the

Gazette, a notification stating that the scheme has been

made, showing the limits of the area comprised in such

scheme and specifying the lands which are to be acquired.

The other provisions of Section 17 make it clear that the

BDA has to furnish a copy of the said notification and

invite a representation from Bangalore City Corporation,

affix the notification at conspicuous places in various

offices, and serve notice on every person whose land is to

26

be acquired. Thus, the notification that is issued under

Section 17(1) and published under Section 17(3), is a

preliminary notification for acquiring the lands required for

the scheme under the Act. Section 17(5) and Section 18(1)

requires BDA to give an opportunity to landowners to show

cause against acquisition and consider the representations

received in that behalf. Section 18(1) also requires BDA to

furnish a statement of the lands proposed to be acquired to

the State Government for obtaining its sanction for the

scheme including the acquisition. Sub-section (1) of

Section 19 requires the Government to publish a

declaration upon sanctioning the scheme, declaring that

such a sanction has been given and declaring that the “lands

proposed to be acquired by the authority” are required for

public purpose. Sub-section (3) of Section 19 makes it clear

that the declaration published under Section 19(1) should

be conclusive evidence that the land is needed for a public

purpose and that the Authority shall, upon publication of

such declaration, proceed to execute the same. Thus, it is

clear that the acquisition by the Authority for the purposes

of the development scheme is initiated and proceeded with

under the provisions of the BDA Act.

Section 36 of the BDA Act provides that the “acquisition of

land under this Act” shall be regulated by the provisions, so

far as they are applicable of the LA Act. In view of the

categorical reference in Section 36 of the BDA Act to

acquisitions under that Act, there cannot be any doubt that

the acquisitions for BDA are not under the LA Act, but

under the BDA Act itself. It is also clear from Section 36

that the LA Act, in its entirety, is not applicable to the

acquisition under the BDA Act, but only such of the

provisions of the LA Act for which a corresponding

provision is not found in the BDA Act, will apply to

acquisitions under the BDA Act. In view of Sections 17 to

19 of the BDA Act, the corresponding provisions —

Sections 4 to 6 of the LA Act–will not apply to

acquisitions under the BDA Act. We therefore reject the

27

contention that the BDA Act does not contemplate

acquisition and that the acquisition which is required to be

made as a part of the development scheme, should be made

under the LA Act, applying Sections 4, 5-A and 6 of the

LA Act.

The question of repugnancy can arise only where the State

law and the existing Central law are with reference to any

one of the matters enumerated in the Concurrent List. The

question of repugnancy arises only when both the

legislatures are competent to legislate in the same field, that

is, when both the Union and State laws relate to a subject in

List III. Article 254 has no application except where the

two laws relate to subjects in List III (see Hoechst

Pharmaceuticals Ltd. v. State of Bihar (1983) 4 SCC 45).

But if the law made by the State Legislature, covered by an

entry in the State List, incidentally touches upon any of the

matters in the Concurrent List, it is well settled that it will

not be considered to be repugnant to an existing Central

law with respect to such a matter enumerated in the

Concurrent List. In such cases of overlapping between

mutually exclusive lists, the doctrine of pith and substance

would apply. Article 254(1) will have no application if the

State law in pith and substance relates to a matter in List II,

even if it may incidentally trench upon some item in List

III. (See Hoechst, Megh Raj v. Allah Rakhia AIR 1947 PC

72, and Lakhi Narayan Das v. Province of Bihar, AIR 1950

FC 59).

Where the law covered by an entry in the State List made

by the State Legislature contains a provision which directly

and substantially relates to a matter enumerated in the

Concurrent List and is repugnant to the provisions of any

existing law with respect to that matter in the Concurrent

List, then the repugnant provision in the State List may be

void unless it can coexist and operate without repugnancy

to the provisions of the existing law. This Court in

M
unithimmaiah has held that the BDA Act is an Act to

28

provide for the establishment of a Development Authority

to facilitate and ensure planned growth and development of

the city of Bangalore and areas adjacent thereto, and that

acquisition of any lands, for such development, is merely

incidental to the main object of the Act, that is,

development of Bangalore Metropolitan Area. This Court

held that in pith and substance, the BDA Act is one which

squarely falls under Entry 5 of List II of the Seventh

Schedule and is not a law for acquisition of land like the

LA Act, traceable to Entry 42 of List III of the Seventh

Schedule, the field in respect of which is already occupied

by the Central Act, as amended from time to time. This

Court held that if at all, the BDA Act, so far as acquisition

of land for its developmental activities is concerned, in

substance and effect will constitute a special law providing

for acquisition for the special purposes of BDA and the

same will not be considered to be a part of the LA Act. The

fallacy in the contention of the appellants is that it assumes,

erroneously, that the BDA Act is a law referable to Entry

42 of List III, while it is a law referable to Entry 5 of List

II. Hence the question of repugnancy and Section 6 of the

LA Act prevailing over Section 19 of the BDA Act would

not at all arise.”

(emphasis supplied)

22. The proposition laid down in Bondu Ramaswamy’s case was

approved by the Constitution Bench in Girnar Traders (3) v. State of

Maharashtra (supra) (para 178). The Constitution Bench also referred

to the doctrine of pith and substance in the context of challenge to some

of the provisions of the Maharashtra Regional and Town Planning Act,

1966 and observed:

29

“We have already discussed in great detail that the State

Act being a code in itself can take within its ambit

provisions of the Central Act related to acquisition, while

excluding the provisions which offend and frustrate the

object of the State Act. It will not be necessary to create, or

read into the legislations, an imaginary conflict or

repugnancy between the two legislations, particularly,

when they can be enforced in their respective fields without

conflict. Even if they are examined from the point of view

that repugnancy is implied between Section 11-A of the

Land Acquisition Act and Sections 126 and 127 of the

MRTP Act, then in our considered view, they would fall

within the permissible limits of doctrine of “incidental

encroachment” without rendering any part of the State law

invalid.

Once the doctrine of pith and substance is applied to the

facts of the present case, it is more than clear that in

substance the State Act is aimed at planned development

unlike the Central Act where the object is to acquire land

and disburse compensation in accordance with law.

Paramount purpose and object of the State Act being

planned development and acquisition being incidental

thereto, the question of repugnancy does not arise. The

State, in terms of Entry 5 of List II of Schedule VII, is

competent to enact such a law. It is a settled canon of law

that courts normally would make every effort to save the

legislation and resolve the conflict/repugnancy, if any,

rather than invalidating the statute. Therefore, it will be the

purposive approach to permit both the enactments to

operate in their own fields by applying them harmoniously.

Thus, in our view, the ground of repugnancy raised by the

appellants, in the present appeals, merits rejection.

A self-contained code is an exception to the rule of

referential legislation. The various legal concepts covering

30

the relevant issues have been discussed by us in detail

above. The schemes of the MRTP Act and the Land

Acquisition Act do not admit any conflict or repugnancy in

their implementation. The slight overlapping would not

take the colour of repugnancy. In such cases, the doctrine

of pith and substance would squarely be applicable and

rigours of Article 254(1) would not be attracted. Besides

that, the reference is limited to specific provisions of the

Land Acquisition Act, in the State Act. Unambiguous

language of the provisions of the MRTP Act and the

legislative intent clearly mandates that it is a case of

legislation by incorporation in contradistinction to

legislation by reference.”

(emphasis supplied)

23. In view of the law laid down in the aforementioned cases, we

hold that the 1987 Act not only provides for development of urban

areas, but also empowers the BDA and the State Government to

compulsorily acquire land for the purpose of execution/implementation

of the schemes.

24. The second argument of the learned senior counsel for the

appellants is that under Section 19(7) of the 1987 Act, the State

Government is empowered to release the acquired land and the High

Court committed serious error by nullifying notification dated

24.3.1999 at the instance of those to whom sites were allotted by the

31

BDA. Shri Shishodia emphasized that the documents like panchnamas

and record of rights prepared by the Special Land Acquisition Officer

and other revenue officers are evidence only of symbolic taking over of

possession, but the actual possession continued with the landowners,

who carved out plots and sold the same to the members of the weaker

sections and the State Government had rightly taken note of the plight

of the citizens belonging to poor strata of the society and denotified the

land by accepting the recommendations made by the BDA. Shri

Shishodia submitted that Mumtaz Begum and others are innocent

purchasers and the High Court should have rejected the plea taken by

the official respondents that the State Government could not have

issued notification under Section 19(7) of the 1987 Act. Learned

counsel for the State and the BDA submitted that Section 19(7) is

similar to Section 48 of the 1894 Act and the power to denotify the

acquired land cannot be exercised after possession of the acquired land

is taken by the competent authority and, in any case, that power can be

exercised only by the Authority and not by the State Government.

32

25. In our view, there is no merit in the argument of the learned

senior counsel for the appellants. The documents produced before the

High Court and this Court show that possession of land comprised in

survey Nos. 534/A+C was taken on 1.1.1996 and possession of land

comprised in survey Nos. 533/1, 534/B was taken after dismissal of

Writ Petition Nos. 30236/1994 and 30237/1994. After taking of

possession, the name of the BDA was entered in the record of rights.

The appellants have not produced any evidence before the Court to

show that Panchnamas evidencing take over of possession were

fabricated by the Special Land Acquisition Officer and entries in the

record of rights were manipulated by the concerned revenue authorities.

Therefore, the bald statement made by the landowners that they

continued to be in possession of the acquired land cannot be relied

upon for recording a finding that denotification of the acquired land

was valid. In Banda Development Authority, Banda v. Motilal

Agarwal (2011) 5 SCC 394, this Court examined in detail the mode and

manner of taking possession of the land acquired under the 1894 Act,

referred to the judgments in Balwant Narayan Bhagde v. M.D. Bhagwat

(1976) 1 SCC 700, Balmokand Khatri Educational and Industrial Trust,

33

Amritsar v. State of Punjab (1996) 4 SCC 212, P.K. Kalburqi v. State

of Karnataka (2005) 12 SCC 489, National Power Thermal Power

Corporation Ltd. v. Mahesh Dutta (2009) 8 SCC 339, Sita Ram

Bhandar Society v. Government N.C.T. of Delhi (2009) 10 SCC 501

and culled out the following principles:

“(i) No hard-and-fast rule can be laid down as to what act

would constitute taking of possession of the acquired land.

(ii) If the acquired land is vacant, the act of the State

authority concerned to go to the spot and prepare a

panchnama will ordinarily be treated as sufficient to

constitute taking of possession.

(iii) If crop is standing on the acquired land or

building/structure exists, mere going on the spot by

the authority concerned will, by itself, be not sufficient

for taking possession. Ordinarily, in such cases, the

authority concerned will have to give notice to the occupier

of the building/structure or the person who has cultivated

the land and take possession in the presence of independent

witnesses and get their signatures on the panchnama. Of

course, refusal of the owner of the land or

building/structure may not lead to an inference that the

possession of the acquired land has not been taken.

(iv) If the acquisition is of a large tract of land, it may not

be possible for the acquiring/designated authority to take

physical possession of each and every parcel of the land

and it will be sufficient that symbolic possession is taken

by preparing appropriate document in the presence of

34

independent witnesses and getting their signatures on such

document.

(v) If beneficiary of the acquisition is an

agency/instrumentality of the State and 80% of the total

compensation is deposited in terms of Section 17(3-A) and

substantial portion of the acquired land has been utilized in

furtherance of the particular public purpose, then the court

may reasonably presume that possession of the acquired

land has been taken.”

26. By applying clause (ii) of the aforesaid principles, we hold that

possession of the acquired land had been taken by the Special Land

Acquisition Officer in accordance with law and neither the BDA had

the jurisdiction to make a recommendation for denotification of the

acquired land nor the State Government could issue notification under

Section 19(7) of the 1987 Act. It also appears to us that both, the BDA

and the State Government laboured under a mistaken impression that

the power under Section 19(7) of the 1987 Act can be exercised by the

latter. If that was not so and the BDA genuinely felt that a case was

made out for deacquisition of land comprised in survey Nos. 533/1,

534/A and 534/B, then it could have, on its own, issued notification

under Section 19(7) of the 1987 Act.

35

27. The question whether Mumtaz Begum and others who claim to

have purchased small parcels of land from Allahuddin Khan after the

issuance of notifications under Section 17(1) of the 1987 Act should be

allowed to retain the same despite the fact that the BDA had carved out

sites and allotted plots to more than 100 eligible applicants deserves to

be answered in negative in view of the law laid down in Yadu Nandan

Garg v. State of Rajasthan 1996(1) SCC 334, U.P. Jal Nigam, Lucknow

v. Kalra Properties (P) Ltd. (1996) 3 SCC 124, Sneh Prabha v. State of

U.P. (1996) 7 SCC 426, Ajay Krishan Shinghal v. Union of India

(1996) 10 SCC 721, Star Wire (India) Ltd. v. State of Haryana (1996)

11 SCC 698, Jaipur Development Authority v. Daulat Mai Jain (1997)

1 SCC 35, Meera Sahni v. Lt. Governor of Delhi (2008) 9 SCC 177 and

Tika Ram v. State of U.P. (2009) 10 SCC 689.

28. In Sneh Prabha v. State of U.P. (supra), the Court referred to

some of the earlier judgments and held:

“. … It is settled law that any person who purchases land

after publication of the notification under Section 4(1),

does so at his/her own peril. The object of publication of

the notification under Section 4(1) is notice to everyone

that the land is needed or is likely to be needed for public

purpose and the acquisition proceedings point out an

36

impediment to anyone to encumber the land acquired

thereunder. It authorises the designated officer to enter

upon the land to do preliminaries, etc. Therefore, any

alienation of the land after the publication of the

notification under Section 4(1) does not bind the

Government or the beneficiary under the acquisition. On

taking possession of the land, all rights, title and interests in

land stand vested in the State, under Section 16 of the Act,

free from all encumbrances and thereby absolute title in the

land is acquired thereunder.”

The same view has been reiterated in other judgments.

29. In the result, the appeals are dismissed. Appellants – Vasanth

Sreedhar Kulkarni and Eshwar Gouda Burma Gouda Patil shall pay

cost of Rs.1,00,000/- each to the BDA for thrusting unwarranted

litigation upon it. The BDA shall ensure delivery of possession of the

sites to the allottees within 8 weeks from today. However, it is made

clear that this judgment shall not preclude the State Government from

allotting alternative sites to Mumtaz Begum and others, who are said to

have purchased small parcels of land from the landowners through

Allahuddin Khan.

………………………..J.

[G.S. Singhvi]

37

…………………………J.

[Asok Kumar Ganguly]

New Delhi

October 14, 2011.

Collector,Bilaspur vs Ajit P.K.Jogi & Ors on 13 October, 2011

Last Updated on

Supreme Court of India
Collector,Bilaspur vs Ajit P.K.Jogi & Ors on 13 October, 2011
Author: R V Raveendran
Bench: R.V. Raveendran, H.L. Dattu
                                                                                                 Reportable 


                        IN THE SUPREME COURT OF INDIA


                         CIVIL APPELLATE JURISDICTION


                           CIVIL APPEAL NO.4069 OF 2008




Collector, Bilaspur                                                         .........Appellant


Vs. 


Ajit P. K. Jogi & Ors.                                                      .......Respondents 


WITH


Civil Appeal No.4074 of 2008

Civil Appeal No.4079 of 2008

Civil Appeal No.4082 of 2008





                                       J U D G M E N T

R. V. Raveendran J.

These four appeals by special leave are filed against the judgment

dated 15.12.2006 of the Chhattisgarh High Court in WP No.2080 of 2011.

As the ranks of parties differ, they are referred to by their ranks in CA

No.4069/2008.

2

2. The first respondent (Ajit P.K. Jogi) claimed that he belonged to a

tribal community known as `Kanwar’, a notified Scheduled Tribe. He

obtained social status/caste certificates from time to time, showing him as

belonging to Kanwar-Scheduled Tribe, that is, certificate dated 6.6.1967

from the Naib Tehsildar, Pendra Road, Bilaspur, certificate dated 27.2.1984

by the Naib Tehsildar, Pendra Road, Bilaspur, certificate dated 6.3.1986 by

the Tehsildar, Pendra Road, certificate dated 12.1.1993 by the Naib

Tehsildar, Pendra Road, Bilaspur, certificate dated 11.8.1999 by Naib

Tehsildar, Indore, certificate dated 8.1.2001 from the Addl. Collector,

Bilaspur and certificate dated 30.9.2003 by Addl. Collector, Bilaspur. The

first respondent was elected twice to Rajya Sabha and contested two

parliamentary elections from Raigarh and Shahdol constituencies. He

successfully contested from Marwahi Vidhan Sabha constituency reserved

for Scheduled Tribes in 1991. On 1.11.2000, when the State of Chhattisgarh

came into existence, the first respondent became its first Chief Minister and

served in that capacity till December, 2002.

3. In the year 2001, the sixth respondent filed a complaint before the

National Commission for Scheduled Castes and Scheduled Tribes (the third

respondent herein, for short `Commission’) alleging that the first respondent

3

was a Christian and that he did not belong to a Scheduled Tribe; and that he

had obtained several false caste certificates showing him as belonging to

`Kanwar’ Scheduled Tribe and had contested elections from a constituency

reserved for Scheduled Tribes. He requested that appropriate action be taken

in that behalf.

4. The Commission issued a show cause notice to the first respondent

proposing to verify his caste certificate. The Commission referred the

complaint received from the sixth respondent to the Chief Secretary,

Government of Chhattisgarh on 29.1.2001. The state government (fourth

respondent) responded to the Commission stating that it had constituted a

committee dated 27.2.2001 for verification of caste certificates and the

reference received from the Commission had been transmitted to the

Principal Secretary, Department for Welfare of SCs, STs, OBCs and

Minorities Welfare (fifth respondent) for necessary verification through the

said Committee. The Commission thereafter summoned the Chief Secretary

of Chhattisgarh to appear before the Commission on 24.1.2001 with all

documents relating to the caste status of the Chief Minister (first

respondent). The Commission summoned the Principal Secretary, Scheduled

Castes and Scheduled Tribes Welfare Department to appear on 18.5.2011

4

with the records. He responded and made available the instructions issued by

the state government relating to verification of caste certificates. He

submitted that having regard to the provision made by the state government

for verification of caste certificate by a scrutiny committee, the Commission

did not have jurisdiction to verify the caste certificate issued to the first

respondent. The Commission felt that there was want of co-operation from

the Government of Chhattisgarh and instructed its branch at Bhopal to

ascertain the correct position and verify the caste claim of the first

respondent. Apparently, the Bhopal office collected some material to show

that the first respondent belonged to Satnami caste (a backward class) and

that he did not belong to Kanwar Scheduled Tribe and that he got elected as

a MLA from a reserved constituency for Scheduled Tribes, based on a false

caste certificate. On the basis of alleged material so collected, the

Commission called upon the first respondent, vide notice dated 26.5.2001 to

offer his explanation and also appear before the Commission on 30.9.2001

with necessary documents. One Mr. R. N. Sharma, Chief Legal Adviser to

the Chief Minister of Chhattisgarh appeared on behalf of the first respondent

and submitted a reply dated 12.9.2001 to the notice dated 26.5.2001. Several

documents were furnished and written submissions were also filed.

5

5. The Commission made an order dated 16.10.2001. We extract below

the preamble and operative portion of the said order :

“In the matter of : Verification of community certificate of Shri Ajit P.K.

Jogi, S/o Shri K.P. Jogi, Village Sarbahra, Tehsil

Pendra Road, District Bilaspur.

xxxxx xxxxxx

Taking into consideration the available evidence as discussed above, the

commission is of the considered view that Shri Ajit P.K. Jogi has been

fraudulently claiming to belong to Kanwar community for the purpose of

getting ST certificate, although he and his ancestors belong to Satnami

caste, which is included in the SC list of the State. However, as Shri Ajit

P.K. Jogi’s grandfather appears to have got converted to Christianity, he

was not eligible for concessions/benefits available to SCs also. The state

government is, therefore, called upon to conduct the verification of

genuineness of the ST certificate obtained by Shri APK Jogi and to initiate

urgent necessary action for cancellation of his ST certificate and also

criminal action as provided in the law and the rules. A report on the action

taken may be submitted to the Commission within 30 days.”

6. The said order was challenged by the first respondent by filing WP

No.2080 of 2001 in the Chhattisgarh High Court. A Division Bench of the

High Court by the impugned order dated 15.12.2006 allowed the writ

petition. It held that the complaint of the sixth respondent before the

Commission questioning the social status of first respondent was politically

motivated, that the first respondent had been openly claiming the status of a

person belonging to a scheduled tribe, at least from the year 1967 and had

obtained several certificates certifying his status and had contested several

elections as a person belonging to a scheduled tribe, that his status was

6

challenged before the Madhya Pradesh High Court in WP No.1417 of 1988

and WP No.1039 of 2001 and the said petitions had been dismissed and as

the decisions of the High Court were judgments in rem, the Commission

could not have ignored those judgments. The High Court also held that the

Commission had violated the principles of natural justice as it had collected

material behind the back of the first respondent and recorded adverse

findings without disclosing the material collected by it to the first respondent

and without giving an opportunity to the first respondent, to have his say on

such material. The court also passed strong observations against the sixth

respondent stating that the entire exercise was politically motivated.

Consequently, it allowed the writ petition, quashed the entire proceedings of

the Commission as also the findings in the order dated 16.10.2001 as being

void and inoperative.

7. The High Court also directed the first respondent to pay cost of

Rs.10,000/- to the first respondent. Further, it directed the State of

Chhattisgarh and the Commission to file memo of calculations giving full

details of the actual cost incurred by them in resisting the said writ petition

and directed the sixth respondent to pay the said cost incurred by the State of

Chhattisgarh and the Commission.

7

8. Feeling aggrieved by the said judgment, the State of Chhattisgarh has

filed CA No.4082 of 2008, the Collector, Bilaspur has filed CA No.4069 of

2008, the sixth respondent filed CA No. 4079 of 2008 and four interveners

in the High Court filed CA No. 4074 of 2008. On the contentions raised, the

following questions arise for our consideration :

(i) Whether the Commission had the jurisdiction to entertain

complaints about the genuineness of caste certificate of a particular

individual and pronounce upon the validity of the caste certificate

and the caste status of such person?

(ii) Whether the High Court was justified in holding that in view of

two earlier decisions of the High Court in WP No.1417 of 1988

decided on 24.7.1989 and WP No.1039 of 2001 decided on

24.7.2001, challenging the caste status of the first respondent, his

caste status had attained some kind of finality.

(iii) Whether there was any violation of principles of natural justice on

the part of the Commission as held by the High Court?

(iv) Whether the High Court was justified in holding that the

proceedings before the Commission at the instance of sixth

respondent were politically motivated?

8

Re : Question (i)

8. Article 338 of the Constitution of India mandates the constitution of a

National Commission for Scheduled Castes and Article 338A mandates the

constitution of a National Commission for Scheduled Tribes. At the relevant

point of time, that is in the year 2001, Article 338A was not in existence and

the unamended Article 338 provided for a National Commission for

Scheduled Castes and Scheduled Tribes. Clause (5) of unamended Article

338 enumerated the duties of the Commission, relevant portions of which

are extracted below :

       "(5)       It shall be the duty of the Commission---

        

       (a)        To investigate and monitor all matters relating to the safeguards  

provided for the Scheduled Castes and Scheduled Tribes under the

Constitution or under any other law for the time being in force or under

any order of the Government and to evaluate the working of such

safeguards;

(b) To inquire into specific complaints with respect to the deprivation

of rights and safeguards of the Scheduled Castes and Scheduled Tribes;

(c) To participate and advise on the planning process of socio-

economic development of the Scheduled Castes and Scheduled Tribes and

to evaluate the progress of their development under the Union and any

State;

(d) To present to the President, annually and at such other times as the

Commission may deem fit, reports upon the working of those safeguards;

(e) To make in such reports recommendations as to the measures that

should be taken by the Union or any State for the effective implementation

of those safeguards and other measures for the protection, welfare and

socio-economic development of the Scheduled Castes and Scheduled

Tribes and;

9

(f) To discharge such other functions in relation to the protection,

welfare and development and advancement of the Scheduled Castes and

Scheduled Tribes as the President may, subject to the provisions of any

law made by Parliament, by rule specify.

(6) The President shall cause all such reports to be laid before each

House of Parliament along with a memorandum explaining the action

taken or proposed to be taken on the recommendations relating to the

Union and the reasons for the non-acceptance, if any, of any of such

recommendations.

(7) Where any such report, or any part thereof, relates to any matter

with which any State Government is concerned, a copy of such report

shall be forwarded to the Governor of the State who shall cause it to be

laid before the Legislature of the State along with a memorandum

explaining the action taken or proposed to be taken on the

recommendations relating to the State and the reasons for the non-

acceptance, if any, of any of such recommendations.

(8) The Commission shall, while investigating the matters referred to

in sub-clause (a) or inquiring into any complaint referred to in sub-clause

(b) of clause 5, have all the powers of a Civil Court trying a suit and in

particular in respect of the following matters, namely :–

(a) summoning and enforcing the attendance of any person from any

part of India and examining him on oath;

(b) requiring the discovery and production of any documents;

             (c)     receiving evidence on affidavits;

             (d)    requisitioning any public record or copy thereof from any court 

                       or office;

             (e)    issuing   summons/communications   for   the   examination   of 

                       witnesses and documents;

             (f)    any other matter which the President may by rule determine.

      

      

     (9)             The   Union   and   every   State   Government   shall   consult   the 

Commission on all major policy matters affecting and Scheduled Castes

and Scheduled Tribes.

     xxxxxx                   xxxxxxx"

                                                                                 (emphasis supplied) 

 


                                                 10



10. The appellants and the Commission relied upon sub-clause (b) of

clause (5) of Article 338 which provided that it shall be the duty of the

Commission to enquire into specific complaints with respect to deprivation

of rights and safeguards to scheduled castes and scheduled tribes, as the

source of power to the Commission to enquire into and decide upon the

caste status of any individual claiming to belong to a scheduled tribe. It was

submitted that if persons not belonging to scheduled tribes falsely claim the

status of scheduled tribes, they would thereby be depriving the rights and

benefits available to genuine scheduled tribes and consequently, when a

specific complaint is received alleging that any particular person had made a

false claim of being a person belonging to a scheduled tribe, the

Commission was duty bond to enquire into the such specific complaint as it

related to deprivation of rights and safeguards of scheduled tribes. It was

further argued that it had examined and decided upon the caste status of the

first respondent, after examining the material collected by it and after giving

an opportunity to the first respondent to prove that he belonged to a

scheduled tribe, and it had come to a conclusion that the first respondent had

fraudulently claimed that he belonged to the scheduled tribe of Kanwar and

had obtained false certificate to that effect; and that the first respondent was

a Christian, who did not belong to a scheduled tribe and therefore, not

11

eligible to enjoy the reservation and other benefits extended to scheduled

tribes. It was also pointed out that the Commission had ultimately directed

the State Government to conduct the verification of the genuineness of the

ST certificate obtained by the first respondent and initiate action for

cancellation of his ST certificate and consequently, initiate criminal action in

accordance with law.

11. Dealing with the powers of a similar (State) Commission for Women,

this Court in Bhabani Prasad Jena vs. Orissa State Commission for Women

[2010 (8) SCC 633], held as under :

“Mr. Ranjan Mukherjee, learned Counsel for Respondent 2 submitted that

once a power has been given to the State Commission to receive

complaints including the matter concerning deprivation of women of their

rights, it is implied that the State Commission is authorized to decide these

complaints. We are afraid, no such implied power can be read into Section

10(1)(d) as suggested by the learned Counsel. The provision contained in

Section 10(1)(d) is expressly clear that the State Commission may receive

complaints in relation to the matters specified therein and on receipt of

such complaints take up the matter with the authorities concerned for

appropriate remedial measures. The 1993 Act has not entrusted the State

Commission with the power to take up the role of a court or an

adjudicatory tribunal and determine the rights of the parties. The State

Commission is not a tribunal discharging the functions of a judicial

character or a court.”

12. Dealing with the powers of the Chief Commissioner and

Commissioners under the persons with Disabilities (Equal Opportunity,

12

Protection of Rights and Full Participation) Act and the Rules thereunder,

this Court in State Bank of Patiala vs. Vinesh Kumar Bhasin – 2010 (4) SCC

368, held as follows:

“It is evident from the said provisions, that neither the Chief

Commissioner nor any Commissioner functioning under the Disabilities

Act has power to issue any mandatory or prohibitory injunction or other

interim directions. The fact that the Disabilities Act clothes them with

certain powers of a civil court for discharge of their functions (which

include power to look into complaints), does not enable them to assume

the other powers of a civil court which are not vested in them by the

provisions of the Disabilities Act.”

13. It is evident from Article 338 as it originally stood, that the

Commission was constituted to protect and safeguard the persons belonging

to scheduled castes and scheduled tribes by ensuring : (i) anti-

discrimination, (ii) affirmative action by way reservation and empowerment,

and (iii) redressal of grievances. The duties under clause 5(b) of Article 338

did not extend to either issue of caste/tribe certificate or to revoke or cancel

a caste/tribe certificate or to decide upon the validity of the caste certificate.

Having regard to the sub-clause (b) of clause (5) of Article 338, the

Commission could no doubt entertain and enquire into any specific

complaint about deprivation of any rights and safeguards of Scheduled

Tribes. When such a complaint was received, the Commission could enquire

into such complaint and give a report to the Central Government or State

Government requiring effective implementation of the safeguards and

13

measures for the protection and welfare and socio-economic development of

scheduled tribes. This power to enquire into `deprivation of rights and

safeguards of the scheduled castes and scheduled tribes’ did not include the

power to enquire into and decide the caste/tribe status of any particular

individual. In fact, as there was no effective mechanism to verify the

caste/tribe certificates issued to individuals, this Court in Madhuri Patil vs.

Addl. Commissioner (Tribal Development) – 1994 (6) SCC 241 directed

constitution of scrutiny committees.

14. In Madhuri Patil, this Court held that on account of false social status

certificates being obtained by unscrupulous individuals, and cornering the

benefits meant for SCs and STs, persons who genuinely belonged to

scheduled castes/scheduled tribes were denied the benefit of reservation in

posts/seats and other benefits extended to SCs and STs. It therefore, felt that

there was a need to streamline the procedure for issuance of social status

certificate, their scrutiny and approval and issued the following directions :

“1. The application for grant of social status certificate shall be made to

the Revenue-Sub-Divisional Officer and Deputy Collector or Deputy

Commissioner and the certificate shall be issued by such Officer rather

than at the Officer, Taluk or Mandal level.

4. All the State Governments shall constitute a Committee of three

officers, namely, (I) an Additional or Joint Secretary or any officer higher

in rank of the Director of the concerned department, (II) the Director,

14

Social Welfare/Tribal Welfare/Backward Class Welfare, as the case may,

and (III) in the case of Scheduled Castes another officer who has intimate

knowledge in the verification and issuance of the social status certificates.

In the case the Scheduled Tribes, the Research Officer who has intimate

knowledge in identifying the tribes, tribal communities, parts of or groups

of tribes or tribal communities.

5. Each Directorate should constitute a vigilance cell consisting of Senior

Deputy Superintendent of Police in over all charge and such number of

Police Inspectors to investigate into the social status claims. The Inspector

would go to the local place of residence and original place from which the

candidate hails and usually resides or in case of migration to the town or

city, the place from which he originally hailed from. The vigilance officer

should personally verify and collect all the facts of the social status

claimed by the candidate or the parent or guardian, as the case may be. He

also should examine the school records, birth registration, if any. He

should also examine the parent, guardian or the candidate in relation to

their caste etc. or such other persons who have knowledge of the social

status of the candidate and then submit a report to the Directorate together

with all particulars as envisaged in the proforma, in particular, of the

Scheduled Tribes relating to their peculiar anthropological and

ethnological traits, deities, rituals, customs, mode of marriage, death

ceremonies, method of burial of dead bodies etc. by the concerned castes

or tribes or tribal communities etc.

6. The Director concerned, on receipt of the report from the vigilance

officer if he found the claim for social status to be “not genuine” or

“doubtful” or spurious or falsely or wrongly claimed, the Director

concerned should issue show cause notice supplying a copy of the report

of the vigilance officer to the candidate by a registered post with

acknowledgement due or through the head of the concerned educational

institution in which the candidate is studying or employed……….

9. The inquiry should be completed as expeditiously as possible preferably

by day-to-day proceedings within such period not exceeding two months.

If after inquiry, the caste Scrutiny Committee finds the claim to be false or

spurious, they should pass an order cancelling the certificate issued and

confiscate the same. It should communicate within one month from the

date of the conclusion of the proceedings the result of enquiry to the

parent/guardian and the applicant.

xxxx xxxx”

15

This Court thus formulated a scheme for verification of tribal status and held

that any application for verification of tribal status as a scheduled tribe

should be carried out by such Committees. The verification of the validity of

caste certificates and determination of the caste status should therefore be

done by the Scrutiny Committees constituted as per the directions in

Madhuri Patil or in terms of any statute made by the appropriate

government in that behalf.

15. It is true that the Commission had ultimately directed the state

government to conduct the verification of the genuineness of the scheduled

tribe certificate obtained by the first respondent and to initiate action for

cancellation of his scheduled tribe certificate and also criminal action as

provided in law and submit an action taken report to the Commission within

30 days. But this is preceded by a very lengthy order which categorically

records a finding that first respondent had secured a false certificate. The

order starts with the following caption: “Verification of community

certificate of Shri Ajit P.K.Jogi”. The order discloses that it had summoned

various senior officers of the State Government and the first respondent to

produce the documents in regard to his caste status. The order further states

that it had held independent inquiry through its State office to collect

16

evidence to show that the first respondent belonged to Satnami caste and not

to Kanwar community. The Commission has dealt with the objection that it

had no jurisdiction to determine the caste status of an individual, referred to

its duties and functions in detail and concluded thus :

“Thus the Commission is fully empowered to enquire into any complaint

relating to bogus community certificate which would otherwise have the

effect of depriving the genuine ST candidates from getting admissions to

professional courses etc. or appointments to posts reserved for them or

from election to the elected bodies from the constituencies reserved for

them. Since its inception, the Commission has taken up enquiries in

thousands of cases of complaints of false caste certificates, either directly

or through its State Offices or the concerned agencies of the State

Governments and about 800 such cases are still pending with the

Commission which are being pursued.

x x x x x

It is therefore clear that the objections raised by the Respondent is not

sustainable and the Commission is well within its rights to enquire into the

matter to fine the genuineness of the ST certificate in possession of Shri

APK Jogi, which enabled him to become an MLA from a constituency

reserved for the STs.”

The order then considers the material in great detail and records clear

finding that the first respondent had obtained a false certificate, vide para 24

which is extracted below :

“Based on the evidence available before the Commission, it is clearly

established that Late Shri Girdhari Jogi, while Shri Sinati Jogi and his

progeny continued to claim the benefit of being SCs as Satnami caste, the

grandfather of Shri A.P.K Jogi, Shri Dulare Jogi and his progeny

converted to Christianity and thus became ineligible for the benefits

available to the Scheduled Castes. (The genealogical tree of the family is

17

enclosed for ready reference). However, Shri Ajit P. K. Jogi, by

fraudulently claiming to belong to `Kanwar’ community managed to get a

ST certificate in 1967 from Additional Tehsildar, Pendra Road. This

certificate was not registered in the Revenue records and was thus a

legally invalid document Shri Ajit P. K. Jogi, who had subsequently joined

Indian Police Service and Indian Administrative Service, used his

influence to get the community certificate as ST and on his own

admission, contented for parliamentary elections and Assembly elections

from constituencies reserved for STs.”

16. It is only after recording the said findings, the Commission directed

the State government to verify the genuineness of the ST certificate obtained

by first respondent and initiate action for cancellation of the certificate and

also initiate criminal action. All these were unwarranted. As noticed above,

the power under clause 5(b) of Article 338 (or under any of the other sub-

clauses of clause 5 of Article 338) did not entitle the Commission to hold an

inquiry in regard to the caste status of any particular individual, summon

documents, and record a finding that his caste certificate is bogus or false. If

such a complaint was received about the deprivation of the rights and

safeguards, it will have to refer the matter to the State Government or the

authority concerned with verification of caste/tribal status, to take necessary

action. It can certainly follow up the matter with the State Government or

such authority dealing with the matter to ensure that the complaint is

inquired into and appropriate decision is taken. If the State Government or

the authorities did not take action, the Commission could either itself or

18

through the affected persons, initiate legal action to ensure that there is a

proper verification of the caste certificate, but it cannot undertake the

exercise itself, as has been done in this case. The contention that there was

sufficient material to reach such a conclusion is not relevant. The scope of

the duties of the Commission as noticed above, did not involve inquiry or

adjudication in regard to the rights of parties or caste status of the parties.

The same is the position even under Article 338A (which was subsequently

inserted) providing for a separate Commission for Scheduled Tribes with

identical duties. The order of the Commission cannot therefore be sustained.

The High Court was justified in setting aside the said order dated

16.10.2001.

Re : Questions (ii) to (iv)

17. This does not mean that the caste certificates of the first respondent

are not to be verified. The appellants allege that among the certificates

obtained by the first respondent, the certificates dated 6.6.1967 and

27.2.1984 were issued by the Naib Tehsildar, who at the relevant point of

time did not have the authority to issue such certificates. With reference to

the certificate dated 27.2.1984, it is also contended that the case number

mentioned pertains to grant of an explosive licence to one Gokul Prasad. In

19

regard to certificates dated 6.3.1986 and 12.1.1993, it is pointed out that no

case number had been mentioned. In regard to the certificate dated

11.8.1999, it is pointed out that Naib Tehsildar at Indore, was not competent

to issue such a certificate in regard to a resident of Pendra Road, Bilaspur. In

regard to certificates dated 8.1.2001 and 20.9.2003 issued by the Additional

Collector, Bilaspur, it is pointed out that the certificates are not in the

required form and not in accordance with the relevant guidelines for

issuance of certificates. It is also alleged that on 8.4.1977, the Addl.

Tehsildar, Pendra Road had rejected the application of first respondent for

issue of a certificate showing that he belonged to `kanwar’ Scheduled Tribe.

It is also alleged that father and mother of first respondent had entered into

sale transactions on 12.8.1964, 21.9.1967 and 25.7.1979 describing

themselves as Christians and had not sought permission under section 165(6)

of MPLR Code which was mandatory, if they were tribals. We have referred

to these averments only to point out that serious allegations were made in

regard to the certificates obtained by the first respondent and the tribal status

claimed by him. The certificates have never undergone a scrutiny by a

properly constituted authority. The fact that two writ petitions were filed at

some point of time, challenging the claim of first respondent that he belongs

to a scheduled tribe may not be conclusive as the first writ petition was

20

dismissed on the ground that it involved disputed questions of fact which

could not be gone into in a writ proceeding and the second writ petition was

dismissed on the ground that investigation into the allegations of forged

certificates was in progress. Therefore even though the Commission was not

entitled to hold an inquiry and record a finding that first respondent did not

belong to a scheduled tribe, having regard to clause 5(b) and (f) of Article

338, it had the power and authority to require the State Government or the

caste verification Committee constituted by the State Government, to

examine the caste status claimed by the first respondent. The correspondence

initiated by the Commission clearly showed a request/direction for

verification of the caste of the first respondent was made by the Commission

and the state government had responded by stating that the claim of first

respondent that he belonged to a scheduled tribe and the validity of social

status certificates would be verified by the Scrutiny Committee.

18. The High Court was therefore not justified in holding that in view of

the disposal of earlier writ petitions by the High Court, the dispute relating

to tribal status of the first respondent had attained some kind of finality. On

the facts and circumstances, there was also no justification for the High

Court to either term the application given by the sixth respondent to the

Commission as politically motivated or direct the State Government and the

21

Commission to calculate the actual expenses incurred in regard to the

inquiry and recover the same from the sixth respondent.

Conclusion

19. We therefore allow these appeals in part as under :

(i) The order of the High Court dated 15.12.2006 to the extent it quashes

the order dated 16.10.2001 of the Commission, is upheld.

(ii) The adverse observations by the High Court about the complaint by

the sixth respondent, the inquiry by the Commission, and the stand of the

State Government and the Collector before the High Court, being politically

motivated, are set aside.

(iii) The direction to the State Government and the Commission to

calculate the actual cost incurred in prosecuting the writ petition and

directing the sixth respondent to pay the actual costs plus Rs.10,000 is set

aside.

(iv) In terms of the direction of the Commission, the State Government

through a duly constituted Scrutiny Committee shall now undertake the

verification/scrutiny of the social status (tribal) certificates issued to the first

22

respondent showing him as belonging to `Kanwar’ Scheduled Tribe and

decide the matter after giving due opportunity to the first respondent,

uninfluenced by any observations by the Commission, High Court or this

Court. The State Government/concerned authorities shall be entitled to take

consequential action on the basis of the order/report of the Scrutiny

Committee.

………………………………J

[R. V. Raveendran]

………………………………J

[H. L. Dattu]

New Delhi;

October 13, 2011.

M/S. Sagar Sugars & Allied … vs Tranmission Corpn.,A.P. Ltd. & … on 13 October, 2011

Last Updated on

Supreme Court of India
M/S. Sagar Sugars & Allied … vs Tranmission Corpn.,A.P. Ltd. & … on 13 October, 2011
Author: A K Patnaik
Bench: R.V. Raveendran, A.K. Patnaik
                                                                   Reportable


             IN THE SUPREME COURT OF INDIA



              CIVIL APPELLATE JURISDICTION


             CIVIL APPEAL NO. 5159 OF 2005


M/s Sagar Sugars & Allied Products Ltd.           ...     Appellant



                               Versus



The Transmission Corporation of A.P. Ltd.

& Ors.                                                       ... Respondents




                               WITH




              CIVIL APPEAL NO.5157 OF 2005


M/s Sagar Sugars & Allied Products Ltd.           ...     Appellant



                               Versus



The Transmission Corporation of A.P. Ltd          ... Respondent





                        J U D G M E N T

A. K. PATNAIK, J.

These are the appeals against the common order dated

30.07.2004 passed by the Division Bench of the Andhra

Pradesh High Court in Writ Appeal No. 191 of 2004 and C.M.A

No. 3613 of 2003.

2

2. The facts relevant for deciding these appeals very briefly

are that on 29.04.2000 the appellant entered into a

Memorandum of Understanding with Non-Conventional

Energy Development Corporation of Andhra Pradesh Limited

(for short `the NEDCAP’), a nodal agency for non-conventional

projects up to 20 MW, for setting up of a power plant in which

power was to be generated from bagasse, a by-product of

sugar factory. On 25.01.2002, the Andhra Pradesh Electricity

Regulatory Commission (for short `the APERC’) set up under

the Andhra Pradesh Electricity Reforms Act, 1998, permitted

the appellant-company to supply the power generated in its

plant to the respondent no.1, which had taken over the

functions of the erstwhile Andhra Pradesh Electricity Board.

On 10.07.2002, a Power Purchase Agreement (for short `the

PPA’) was entered into between the appellant and the

respondent no.1 which inter alia provided that the power to

the extent of 9.99 MW will be supplied during the season and

power to the extent of 16.94 MW will be supplied during the off

season. On 11.01.2003, respondent no.1 permitted the

appellant to synchronize its plant with the power grid and on

13.01.2003, the appellant started supplying electricity energy

3

to the power grid. On 01.03.2003, the appellant wrote to the

APERC to direct the respondent no.1 to purchase unutilized

power of the appellant as sugar plant of the appellant could

not be commissioned due to some difficulties and power

generated in its power plant remained unutilized and on

17.03.2003, APERC directed the respondent no.1 to amend

the PPA to provide for surplus/ additional quantity of power

from the appellant. On 17.03.2003, the Chief Engineer of

respondent No.1 wrote to Superintending Engineer directing

him to stop evacuation of power from the power plant of the

appellant and to cut off the supply on the ground that the

plant of the appellant cannot be classified as co-generation till

the sugar plant of the appellant was commissioned.

3. The appellant then filed Writ Petition No. 7395 of 2003 in

the Andhra Pradesh High Court challenging the letter dated

17.03.2003 of the Chief Engineer of the respondent No.1 and

the learned Single Judge passed the orders on 02.05.2003

directing issue of notice to the respondents and directing the

respondents, as an interim measure, to purchase power from

the appellant and to pay to the appellant Rs.2.00 per unit.

The respondent No.1 then filed a review petition before the

4

APERC for reconsideration of its earlier directions to amend

the PPA issued on 17.03.2003 and on 01.10.2003 the APERC

allowed the review petition and cancelled its directions issued

on 17.03.2003. The appellant then challenged the order dated

01.10.2003 of the APERC before the Division Bench of the

High Court in C.M.A. No. 3613 of 2003 and the Division Bench

of the High Court granted interim stay of the order dated

01.10.2003 of the APERC.

4. On 15.12.2003, the learned Single Judge of the High

Court allowed Writ Petition No. 7395 of 2003 of the appellant

and quashed the letter dated 17.03.2003 of the Chief Engineer

of the respondent No.1 and directed the respondent No.1 to

evacuate the power as agreed under the PPA and as directed

by the APERC by order dated 17.03.2002. Against the said

order dated 15.12.2003 of the learned Single Judge, the

respondent filed Writ Appeal No. 371 of 2004 and on

12.02.2004 the Division Bench passed an interim order that

no further payment need to be made by respondent no.1 to the

appellant. Thereafter, on 22.04.2004 the Division Bench

modified its earlier interim order dated 12.02.2004 and

directed the respondent to pay the appellant at the rate of

5

Rs.2.69 per unit instead of Rs.2.00 per unit and the said order

was to continue till further orders in the Writ Petition.

5. Finally on 30.07.2004, the Division Bench of the High

Court passed the impugned order in Writ Appeal No. 191 of

2004 as well as in C.M.A. No. 3613 of 2003 setting aside the

order dated 15.12.2003 of the learned Single Judge in Writ

Appeal No. 7395 of 2003 and directed the parties to approach

the appropriate forum chosen by the parties under the PPA for

resolving the dispute. By the impugned order the Division

Bench also held that the appellant will be entitled to tariff as

fixed by the Division Bench of the High Court in Writ Appeal

No. 371 of 2004.

6. Dr. Rajeev Dhavan, learned senior counsel for the

appellant, submitted that the sugar plant has, in the

meanwhile, commenced the production on 21.01.2004 and the

only dispute which has to be decided by this Court is with

regard to the price of the power supplied by the appellant to

the respondent during the period from 13.01.2003 to

21.01.2004.

6

7. Mr. Dhavan submitted that by the order dated

22.04.2004 of the Division Bench in Writ Appeal No. 371 of

2004, the respondent No.1 was to be paid at the revised rate of

Rs.2.69 per unit and on 08.02.2006, this Court has by an

interim order, directed that the appellant would be entitled to

receive payment at the rate of Rs.3.11 per unit as an interim

measure for the period from 13.01.2003 to 20.01.2004 and

also at the same rate of Rs.3.11 per unit for the period

21.01.2004 onwards, as has been paid to other co-generating

plants, excluding the money already paid. He submitted that

in Transmission Corporation of Andhra Pradesh Limited and

Another etc. etc. v. Sai Renewable Power Private Limited and

Others etc.etc. [(2010) 6 SCALE 541= (2010) 8 SCR 636 = JT

2010 (7) SC 1] this Court has issued some directions relating

to price payable for power supplied by non-conventional power

projects. He referred to Para 4 of the judgment of this Court in

the aforesaid case to show that the APERC had approved the

rate of Rs.2.25 per unit with 5% escalation per annum from

1994-1995, being the base year, for supply of power generated

by the non-conventional power projects and this was also the

price fixed in clause 2.2 of the P.P.A for supply of electricity by

7

the appellant to the respondent no.1. He submitted that the

benefit of the aforesaid judgment of this Court delivered on

08.07.2010 should therefore be granted to the appellant and

directions be issued to respondent no.1 accordingly.

8. Learned counsel for respondent no.1, on the other hand,

submitted that the judgment of this Court delivered on

08.07.2010 in Transmission Corporation of Andhra Pradesh

Limited and Another etc. etc. v. Sai Renewable Power Private

Limited and Others etc.etc. (supra) was on tariff and purchase

price of power produced by co-generation non-conventional

energy plants and the plant of the appellant was not a co-

generation plant during the period from January, 2003 to

January, 2004, as there was no production of sugar in the

plant during the aforesaid period and therefore the judgment

of this Court in Transmission Corporation of Andhra Pradesh

Limited and Another etc. etc. v. Sai Renewable Power Private

Limited and Others etc.etc. (supra) has no relevance to the

price of power supplied by the appellant to the respondent

No.1 during January, 2003 to January, 2004.

8

9. We have considered the submissions of the learned

counsel for the parties and we find that clause 2.2 of P.P.A.

between the appellant and respondent no.1 reads as follows:

“2.2. The company shall be paid the tariff for the

energy delivered at the interconnection point for

sale to APTRANSCO at Rs.2.25 paise per unit

with escalation at 5% per annum with 1994-95

as base year and to be revised on 1st April of

every year up to the year 2003-2004. Beyond the

year 2003-2004, the purchase price by

APTRANSCO will be decided by Andhra Pradesh

Electricity Regulatory Commission. There will be

further review of purchase price on completion of

ten years from the date of commissioning of the

project, when the purchase price will be reworked

on the basis of Return on Equity, O& M expenses

and the Variable Cost.

The dispute between the appellant and respondent No.1 before

us is whether or not during the period 13.01.2003 to

21.01.2004, when the sugar plant of the appellant had not

commenced production of sugar, the unutilized power

supplied by the appellant to the respondent No.1 will have the

same price as the price of power supplied by non-conventional

energy projects in the State of Andhra Pradesh determined by

the APERC. It will be more appropriate for the APERC, which

is a regulatory commission with expertise in determination of

price and tariff of power, to decide what would be the price for

9

supply of power by the appellant to the respondent no.1

during the disputed period 13.01.2003 to 21.01.2004 and

thereafter. By the judgment dated 08.07.2010 of this Court in

Transmission Corporation of Andhra Pradesh Limited and

Another etc. etc. v. Sai Renewable Power Private Limited and

Others etc.etc. (supra), this Court has also remanded the

matters to APERC to decide the `purchase price’ for

procurement of the electricity generated by non-conventional

energy developers in the facts of the circumstances of the case.

10. We, therefore, dispose of these appeals by directing that

the APERC will consider all relevant materials and factors and

finally determine the price of power supplied during the period

13.01.2003 to 21.01.2004 and thereafter and in accordance

with the determination made by the APERC, balance

payments, if any, will be made by the respondent no.1 to the

appellant. The appeals are disposed of accordingly. There

shall be no order as to costs.

………………………..J.

(R.V. Raveendran)

………………………..J.

(A. K. Patnaik)

New Delhi,

October 13, 2011.

Swami Vivekanand College Of Edu.& … vs Union Of India & Ors on 12 October, 2011

Last Updated on

Supreme Court of India
Swami Vivekanand College Of Edu.& … vs Union Of India & Ors on 12 October, 2011
Bench: R.V. Raveendran, A.K. Patnaik, Sudhansu Jyoti Mukhopadhaya
                                                                                                         1




                                                                          REPORTABLE

                     IN THE SUPREME COURT OF INDIA


                      CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 5961 OF 2010


SWAMI VIVEKANAND COLLEGE 

OF EDUCATION & ORS.                                              ... APPELLANTS


                                           Versus


UNION OF INDIA & ORS.                                           ... RESPONDENTS





                                    J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

1. Appellants-institutions, which are recognised by the National Council

for Teacher Education (hereinafter referred to as the `Council’), impart teacher

training course (B.Ed.). On their request the `Council’ permitted additional

intake of students for such course without seeking accreditation and Letter

Grade B from National Assessment and Accreditation Council (NAAC).

Subsequently, the `Council’ framed “National Council for Teacher Education

(Recognition Norms and Procedure) Regulations, 2007 (hereinafter referred to

as `Regulations, 2007) by notification dated 10th December, 2007 introducing

Regulation 8(4) and 8(5) which the appellants unsuccessfully challenged

before the High Court.

2. As per Regulation 8(4) an institution is required to be accredited with

the NAAC with a Letter Grade B, whereas as per Regulation 8(5) those

2

institutions which had been granted additional intake in B.Ed. and B.P.Ed.

teacher training courses after promulgation of the Regulations, 2005 i.e. 13 th

January, 2006 are required to get themselves accredited with the NAAC with a

Letter Grade B before Ist April, 2010.

3. The validity of Regulation 8(4) and 8(5) was challenged by the

appellants on the following grounds:

(i) Their right to establish and run their institutions enshrined under

Article 19(1)(g) of the Constitution of India stands curtailed;

(ii) they will suffer constitutional injury on account of the `Council’

outsourcing its statutory functions in the absence of statutory

authorisation for sub-delegation of the delegated power;

(iii) by giving a retrospective effect to the Regulations and

(iv) due to non-performance of statutory duties by the `Council’.

4. The Division Bench of the Delhi High Court held that the Regulation

8(4) merely puts a `condition’ for making an application that the applicant

should have itself accredited with the NAAC with a Letter Grade B; the Court

further held that the Regulation 8(5) is prospective in nature, being a

`condition’ imposed in continuation of additional intake.

5. During the pendency of the present appeal the `Council’ framed the

“National Council for Teacher Education (Recognition Norm and Procedure)

3

Regulations, 2009 w.e.f. 31st August, 2009 (hereinafter referred to as the

“NCTE Regulations, 2009”) but as Regulation 8(4) and 8(5) is identically

worded so far as B.Ed. course, this Court by order dated 15th March, 2010

permitted the appellants to challenge the validity of new Regulation 8(4) and

8(5) of Regulations, 2009.

STAND OF THE APPELLANTS

6. Learned counsel for the appellants while contending that there was no

requirement for any approved institutions to get them accredited with NAAC

for enhancement of intake of seats in the course, the following submissions

were made:

(i) The `Council’ cannot sub-delegate its functions and duties

conferred upon it by the parent Act i.e. NCTE Act, 1993 to an outside

institution namely NAAC in absence of express authorisation by the

parent Act. Therefore, Regulation 8(4) ultra vires the NCTE Act, 1993

and Article 14 of the Constitution of India being against the principle

“delegates non potest delegare”.

(ii) The NCTE Act, 1993 does not authorise the `Council’ to frame

Regulations retrospectively; in absence of such power the delegatee the

`Council’ cannot make subordinate legislation retrospectively. The

requirement, therefore, contemplated under Regulation 8(5) being ex-

facie retrospective, taking away the right of the appellants to continue

4

with the additional seats of B.Ed. course, is violative of Article 19(1)(g)

of the Constitution.

(iii) Regulation 8(5) and paragraph 6 of notice dated Ist October,

2008 issued by the `Council’ asking all institutions which were already

granted additional intake in B.Ed./B.P.Ed. courses after Ist January, 2006

to get themselves accredited with NAAC with Grade B certificate ultra

vires the NCTE Act, 1993 disturbing and altering the vested and accrued

fundamental rights of the institutions.

7. Learned counsel for the appellants referred to provisions of NCTE Act,

1993 and relevant Rules and the decisions of this Court which will be

discussed at an appropriate stage.

Stand of respondent-NCTE

8. Per contra, according to the learned counsel for the

respondent-`Council’ Regulation 8(4) does not amount to delegation of any of

the powers of the `Council’. It merely imposed a `condition’ required for

opening a new course or intake for students as empowered under the NCTE

Act, 1993. The Regulation 8(5) does not amount to giving effect from

retrospective date, as such power was already extending under Regulations,

2005.

9. He would further submit as follows:

5

(i) The condition as stipulated in impugned Regulation 8((4) was

already existing even earlier in Regulations, 2005. Regulation 8(3) and

8(4) of Regulations, 2005 was relaxed for certain period vide notification

dated 20th July, 2006 and 10th December, 2007. Some of the institutions

had made applications to the Regional Committees of the `Council’ for

grant of permission or recognition for additional intake of seats in favour

of recognised course during the period from 21st July, 2006 to 10th

December, 2007. Their applications were processed and decided without

insisting upon the requirement of having three academic sessions of

running the course as was stipulated under Regulation 8(3) or having

accredited with NAAC with a Letter Grade B as was stipulated under

Regulation 8(4). Since, the conditions under Regulation 8(3) and 8(4)

were brought into force by Regulations, 2007, it was decided that those

institutions which have been granted recognition for enhancement of seats

without insisting upon the condition of having accredited with the NAAC,

have been directed to get themselves accredited with NAAC.

(ii) The condition stipulated under Regulation 8(4) does not amount

to sub-delegation of power but merely a `condition’ laid down for grant of

recognition of new course or for enhancement of additional intake in the

existing course. So far as processing, scrutinising and deciding upon an

application for recognition/permission for conducting teacher training

course is concerned, it is the `Council’ and its Regional Committees

6

which are alone responsible and entrusted with discharging such functions

as enshrined under the Act.

(iii) The Regulation 8(5) only provides that the institutions who have

been granted recognition for enhancement of additional intake of seats

during the period of relaxation to obtain accreditation before Ist April,

2010 and the same is prospective in nature.

10. In this case the questions arise for determination are:

(i) Whether under Regulation 8(4) the `Council’ has sub-delegated

any of its functions and duties conferred by parent Act to NAAC; and

(ii) Whether Regulation 8(5) is retrospective in nature affecting

fundamental rights of appellants guaranteed under Article 19(1)(g) of

Constitution of India.

11. Before examining the contentions raised by the learned counsel for the

parties, it would be convenient to notice the relevant provisions of the NCTE

Act, 1993 and the Regulations framed thereunder.

12. The NCTE Act, 1993 was enacted to maintain standards of teacher

education with a view to achieve planned and co-ordinated development of the

teacher education system throughout the country. It was decided that the

`Council’ would be provided with necessary resources and capability to

accredit institutions of teacher education and provide guidance regarding

7

curricula and methods. It was also decided to provide statutory powers to the

`Council’ with the objective of determination, maintenance and co-ordination

of standards in teacher education, laying down norms and guidelines for

various courses, promotion of innovation in this field and to establish a suitable

system of continuing education of teachers (see: Statement of Objects and

Reasons of the National Council for Teacher Education Act, 1993).

13. Section 12 of the NCTE Act, 1993 empowers the `Council’ to take all

steps for ensuring planned and co-ordinated development of teacher education

and for the determination and maintenance of standards of teacher education.

For the purposes of such functions the Council is empowered to evolve suitable

performance appraisal system, norms and mechanism for enforcing

accountability on recognised institutions under Section 12(k) which is as

follows:

“12(k) evolve suitable performance appraisal system,

norms and mechanism for enforcing accountability on

recognised institutions;”

14. For the purpose of ascertaining whether the recognised institutions are

functioning in accordance with the provision of the Act, the Council is

empowered to cause inspection of any such institution in such manner as may

be prescribed under Section 13 of the NCTE Act, 1993.

15. The `Council’ is empowered to recognise institutions offering course or

training in teacher education under Section 14. For opening a new course or

8

training by recognised institutions the `Council’ is empowered under Section

15 to grant permission in such form and in such manner as may be determined

by regulations.

16. Under Section 32 the `Council’ is empowered to make regulations not

inconsistent with the provisions of the NCTE Act, 1993 and the rules made

thereunder. Clause (f) and (h) of sub-section (2) of Section 32 empowers the

`Council’ to frame regulations and to lay down `conditions’ for the proper

functioning of the institution and `conditions’ for granting recognition under

clause (a) of sub-section (3) of Section 14 and clause (a) of sub-section (3) of

Section 15 respectively, as evident from the said provisions and reproduced

hereunder:

“32.POWER TO MAKE REGULATIONS

(1) The Council may, by notification in the Official Gazette,

make regulations not inconsistent with the provisions of this

Act and the rules made thereunder, generally to carry out the

provisions of this Act.

(2) In particular, and without prejudice to the generality of

the foregoing power, such regulations may provide for all or

any of the following matters, namely :-

xxx xxx xxx

(f) conditions required for the proper functioning of the

institution and conditions for granting recognition under

clause (a) of sub-section (3) of Section 14;

xxx xxx xxx

(h) conditions required for the proper conduct of a new

course or training and conditions for granting permission

under clause (a) of sub-section (3) of Section 15;

9

xxx xxx xxx”

17. In exercise of powers conferred under Section 32 the `Council’ framed

Regulations National Council for Teacher Education (Recognition Norms &

Procedure) Regulations, 2005 (hereinafter referred to as the “NCTE

Regulations, 2005”) notified by Notification No.F.49-42/2005-NCTE (N&S)

dated 27th December, 2005 published on 13th January, 2006. The NCTE

Regulation, 2005 were applicable to all matters relating to teacher education

programme, covering norms and standards and conditions for grant of such

recognition. Clause (3) and Clause (4) of Regulation 8 of NCTE Regulations,

2005 were as follows:

“8(3) An institution shall be permitted to apply for

enhancement of intake in a teacher education course already

approved after completion of three academic sessions of

running the course.

(4) An Institution shall be permitted to apply for

enhancement of intake in Secondary Teacher Education

Programme – B.Ed & B.P.Ed. Programme, if it has accredited

itself with the National Assessment and Accreditation Council

(NAAC) with a Letter Grade B developed by NAAC.”

18. It was stipulated that pending finalisation of new norms and standards,

the existing norms were to continue till then.

19. Subsequently, by notification dated 20th July, 2006 the `Council’ framed

“National Council for Teacher Education (Recognition Norms & Procedure)

(Amendment) Regulations, 2006 (hereinafter referred to as the “Amendment

Regulations, 2006) as under:

10

“Now, therefore, in exercise of the powers conferred under sub-

section (2) of Section 32 of the National Council for Teacher

Education Act, 1993 (73 of 1993), the National Council for Teacher

Education hereby makes the following regulations, namely:-

1. Short Title and Commencement:

(1) These regulations may be called the “National Council for

Teacher Education (Recognition Norms & Procedure)(Amendment)

Regulations, 2006.”

2. A
pplicability

(1) These regulations shall be applicable to all matters

pertaining to grant of recognition/ permission to conduct a

secondary teacher education programme in face to face mode

leading to B.Ed. degree or equivalent.

(2) They shall come into force from the date of their

publication in the Official Gazette.

3. E
xtent of Amendment

(i) The appendix – 7 of the norms and standards which was

notified by NCTE Regulations, 2002 and retained in the NCTE

Regulations, 2005 shall be replaced by the appendix – 1 to this

amendment and be read as part thereof.

Note:- For enhancement of intake in the course where new norms

have been published after notification of the Regulations dated

27.12.2005, the conditions prescribed in Rule 8(3) and 8(4) of the

said Regulation shall not be applicable.”

It was followed by Regulations, 2007 framed by the `Council’ bringing back

the condition of accreditation of institution with NAAC with the Letter Grade

B as was prescribed under Regulation 8(4) of NCTE Regulations, 2005. Those

institutions who were granted additional intake in B.Ed and B.P.Ed. teacher

training courses after NCTE Regulations, 2005 i.e 13th January, 2006 were also

asked to get themselves accredited with NAAC with a Letter Grade B. Apart

11

from the impugned Regulation 8(4) and 8(5), Regulation 8(3) of NCTE

Regulations, 2007 being also relevant are quoted hereunder:

“8(3) An institution shall be permitted to apply for

enhancement of course wise intake in teacher education

courses already approved, after completion of three academic

sessions of running the respective courses.

(4) An Institution shall be permitted to apply for

enhancement of intake in Secondary Teacher Education

Programme – B.Ed & B.P.Ed. Programme, if it has accredited

itself with the National Assessment and Accreditation Council

(NAAC) with a Letter Grade B developed by NAAC.

(5) An institution that has been granted additional

intake in B.Ed. and B.P.Ed. teacher training courses after

promulgation of the Regulations, 2005,i.e., 13.1.2006 shall

have to be accredited itself with the National Assessment and

Accreditation Council (NAAC) with a Letter Grade B under the

new grading system developed by NAAC before Ist April, 2010

failing which the additional intake granted shall stand

withdrawn w.e.f. the academic session 2010-2011.”

20. As stated earlier, during the pendency of the present civil appeal the

NCTE Regulations, 2009 was enacted with similar worded provisions under

Regulation 8(3), 8(4) and 8(5).

21. The National Assessment and Accreditation Council (NAAC) is an

autonomous body established by the University Grants Commission (UGC) of

India to assess and accredit institutions of higher education in the country. It is

an outcome of the recommendations of the National Policy in Education (1986)

that laid special emphasis on upholding the quality of higher education in India,

as appears from “Manual of Accreditation” (Revised Edition, January, 2004)

12

published by National Board of Accreditation All India Council for Technical

Education, I.G. Sports Complex, I.P. Estate, New Delhi – 110 002.

22. The system of higher education in India has expanded rapidly during the

last fifty years and in spite of built-in regulatory mechanisms that ensure

satisfactory levels of quality in the functioning of higher education institutions,

there have been criticisms that the country has permitted the mushrooming of

institutions of higher education with fancy programme and substandard

facilities and consequent dilution of standards. To address the issues of

deterioration in quality, the National Policy on Education (1986) and the Plan

of Action (POA-1992) was made which spelt out the strategic plans for the

policies and advocated the establishment of an independent national

accreditation body. Consequently, the NAAC was established in 1994 with its

headquarters at Bangalore.

23. The Methodology for the assessment of a unit, the NAAC follows a

three-stage process which is a combination of self-study and peer review, as

follows:

(1) The preparation and submission of a self-study

report by the unit of assessment.

(2) The on-site visit of the peer team for validation of

the self-study report and for recommending the assessment outcome to

the NAAC.

(3) The final decision by the Executive Committee of

the NAAC.

13

The self-study report validated by peers is the backbone of the whole exercise.

Manuals have been developed to suit different units of higher education, with

detailed guidelines on the preparation of the self-study report and the other

aspects of assessment and accreditation.

24. Section 12 of NCTE Act, 1993 deals with function of the Council.

Under Section 12(k) the `Council’ is required to evolve suitable performance

appraisal system, norms and mechanism for enforcing accountability on

recognised institutions which reads as under:

“12. Functions of the Council.- It shall be the duty of the Council

to take all such steps as it may think fit for ensuring planned and

co-ordinated development of teacher education and for the

determination and maintenance of standards for teacher

education and for the purposes of performing its functions under

this Act, the Council may –

(k) evolve suitable performance appraisal system, norms

and mechanism for enforcing accountability on recognised

institutions;

25. In fulfilment of the provisions under Section 12(k) of the NCTE

Act, 1993 i.e. to evolve suitable performance appraisal systems, norms and

mechanisms for enforcing accountability on recognised institutions and for

quality assurance of Teacher Education Institutions, the NAAC entered into an

“Memorandum of Understanding”(MOU) with the `Council’ for executing the

process of assessment and accreditation of all Teacher Education Institutions

coming under the provisions of NCTE Act, 1993. The efforts of `Council’ and

14

NAAC are to ensure and assure the quality of Teachers Education Institutions

in the country complementary to each other. Combining the teacher education

and quality assurance, the NAAC developed the methodology for assessment

and accreditation of Teacher Education Institutions as appears from the

“Manual for Self-appraisal of Teacher Education Institutions”. The aforesaid

facts can be noticed from the documents supplied by the parties which

prescribe the methodology of assessment required to be followed by the

NAAC as per strategic plans, policies and memorandum of understanding

reached between NAAC and the `Council’.

26. Before we decide on the validity of Regulations 8(4) and 8(5), we must

first deal with the law as laid down by this Court in different decisions with

regard to the power of a delegate of a legislature, such as the Council in this

case, to make rules and regulations. In Hamdard Dawakhana and Another v.

Union of India and Others [AIR 1960 SC 554], this Court held:

“…..Thus when the delegate is given the power of making rules and

regulations in order to fill in the details to carry out and subserve the

purposes of the legislation the manner in which the requirements of the

statute are to be met and the rights therein created to be enjoyed it is an

exercise of delegated legislation…..”

Thus, a delegate of the legislature is conferred with the power to make rules

and regulations to carry out the purposes of the legislation and such rules and

regulations are called delegated legislation or subordinate legislation.

15

27. This Court has also laid down the grounds on which such delegated

legislation or subordinate legislation can be challenged in the Court. In Indian

Express Newspapers (Bombay) Private Ltd. and others v. Union of India and

Others [(1985) 1 SCC 641], this Court has observed in Para 75 at page 689:

“A piece of subordinate legislation does not carry the same degree of

immunity which is enjoyed by a statute passed by a competent

Legislature. Subordinate legislation may be questioned on any of the

grounds on which plenary legislation is questioned. In addition, it may

also be questioned on the ground that it does not conform to the statute

under which it is made. It may further be questioned on the ground that

it is contrary to some other statute. That is because subordinate

legislation must yield to plenary legislation. It may also be questioned

on the ground that it is unreasonable, unreasonable not in the sense of

not being reasonable, but in the sense that it is manifestly

arbitrary……”

28. Again in Clariant International Ltd. and Another v. Securities &

Exchange Board of India [(2004) 8 SCC 524], this Court held in

Para 63 at page 547:

“When any criterion is fixed by a statute or by a policy, an

attempt should be made by the authority making the delegated

legislation to follow the policy formulation broadly and

substantially and in conformity therewith.”

29. The grounds on which the validity of a delegated legislation can be

challenged have also been discussed at length in Vasu Dev Singh

and Others v. Union of India and others [(2006) 12 SCC 753] in

which the Court has reiterated the aforesaid law.

30. The aforesaid law laid down by the Court on the grounds of judicial

review of delegated legislation or subordinate legislation will have

16

to be borne in mind while deciding the validity of Regulation 8(4)

made by the Council. In other words, if the Regulation 8(4) is in

broad conformity with the objects and policy of the Act and is not in

conflict with any statutory or constitutional provisions, the

regulation made by the delegate, namely, the Council, will have to

be held to be valid.

31. We find that the NCTE Act, 1993 was enacted with the object (i) to

achieve planned and co-ordinated development of the teacher education system

throughout the country and (ii) for laying down the proper maintenance of

norms and standards in the teacher education system; the `Council’ has been

empowered by the parent Act to regulate development of teacher education,

proper maintenance of norms and the standards.

Section 12(k) empowers the `Council’ to maintain teacher education, its

performance appraisal system and to lay down norms and mechanism for

enforcing accountability on recognised institutions.

Under Section 15 the `Council’ can determine as to which institution be

allowed to offer new course or training in teacher education; for which the

`Council’ is empowered under Section 32(2)(h) to prescribe `condition’ for

grant of such permission and recognition.

32. The `Council’ is also empowered to cause inspection of any institution

through any person under Section 13 of the NCTE Act, 1993.

17

33. Combined reading of Section 12(k), Section 15 and Section 32(2)(h),

makes it clear that the `Council’ is empowered to frame a Regulation laying

down `conditions’ for proper conduct of a new course or training under clause

(a) of sub-section (3) of Section 15.

34. What will be the `condition’ to be laid down for starting a new course or

training or for increase in the intake of students can be determined only by the

`Council’ in view of clause (h) of sub-section (2) of Section 32. It can

prescribe the such `condition’, as it deems fit and proper with only rider that

such `condition’ should not be against any of the provisions of the NCTE Act,

1993 or Rules framed thereunder.

For example the `Council’ may prescribe a condition that the

qualification of a teacher should be a degree of a particular subject obtained

from a recognised University, to grant recognition to start a new course. If such

condition is prescribed it will not amount to delegation of its power to an

University to grant such degree.

In the case in hand under Regulation 8(4) the `Council’ having

prescribed a `condition’ for recognition that an institution accredited by NAAC

with a Letter Grade B is entitled to apply for enhancement of intake in

Secondary Teacher Education Programme-B.Ed. &B.P.Ed., it can not be held

to be sub-delegation of power, as contended by the appellants. The first

question is, thus answered in negative against the appellants.

18

35. In the case of State Bank’s Staff Union (Madras Circle) vs. Union of

India and others reported in (2005) 7 SCC 584, Supreme Court noticed and

defined the expression “retrospective” as under:

“19. Every sovereign legislature possesses the right to make

retrospective legislation. The power to make laws includes the

power to give it retrospective effect. Craies on Statute Law (7th

Edn.) at p. 387 defines retrospective statutes in the following

words:

“A statute is to be deemed to be retrospective, which

takes away or impairs any vested right acquired under

existing laws, or creates a new obligation, or imposes a

new duty, or attaches a new disability in respect to

transactions or considerations already past.”

20. Judicial Dictionary (13th Edn.) by K.J. Aiyar,

Butterworth, p. 857, states that the word “retrospective” when

used with reference to an enactment may mean (i) affecting an

existing contract; or (ii) reopening up of past, closed and

completed transaction; or (iii) affecting accrued rights and

remedies; or (iv) affecting procedure. Words and Phrases,

Permanent Edn., Vol. 37-A, pp. 224-25, defines a “retrospective

or retroactive law” as one which takes away or impairs vested

or accrued rights acquired under existing laws. A retroactive law

takes away or impairs vested rights acquired under existing

laws, or creates a new obligation, imposes a new duty, or

attaches a new disability, in respect to transactions or

considerations already past.

21. In Advanced Law Lexicon by P. Ramanath Aiyar (3rd

Edn., 2005) the expressions “retroactive” and “retrospective”

have been defined as follows at p. 4124, Vol. 4:

“Retroactive.–Acting backward; affecting what is past.

(Of a statute, ruling, etc.) extending in scope or effect to

matters that have occurred in the past. — Also termed

retrospective. (Black’s Law Dictionary, 7th Edn., 1999)

` “Retroactivity” is a term often used by lawyers but

rarely defined. On analysis it soon becomes apparent,

19

moreover, that it is used to cover at least two distinct

concepts. The first, which may be called “true retroactivity”,

consists in the application of a new rule of law to an act or

transaction which was completed before the rule was

promulgated. The second concept, which will be referred to

as “quasi-retroactivity”, occurs when a new rule of law is

applied to an act or transaction in the process of

completion…. The foundation of these concepts is the

distinction between completed and pending transactions….’

T.C. Hartley, Foundations of European Community Law, p.

129 (1981).

* * *

Retrospective.–Looking back; contemplating what is

past.

Having operation from a past time.

`Retrospective’ is somewhat ambiguous and that good

deal of confusion has been caused by the fact that it is used in

more senses than one. In general, however, the courts regard

as retrospective any statute which operates on cases or facts

coming into existence before its commencement in the sense

that it affects, even if for the future only, the character or

consequences of transactions previously entered into or of

other past conduct. Thus, a statute is not retrospective merely

because it affects existing rights; nor is it retrospective

merely because a part of the requisite for its action is drawn

from a time antecedent to its passing.” (Vol. 44, Halsbury’s

Laws of England, 4th Edn., p. 570, para 921.)”

Therefore, it is to be seen as to whether Regulation 8(5) takes away any

right of the appellants or impairs any vested right acquired by appellants under

the existing law or has created any new obligation in their part.

36. Regulations 8(3) and 8(4) were already in vogue since 13th January,

2006 when Regulations dated 27th December, 2005 came into effect. As per

Regulation 8(3) only after three academic sessions an institution was eligible to

apply for enhancement of intake of students in the course. Under Regulation

8(4) only such institution which had accredited itself with the NAAC with a

20

Letter Grade B+ was entitled to apply for enhancement of intake of students in

the Secondary Teacher Education Programme, B.Ed. and B.P.Ed.

37. “The norms and standards” were prescribed under Regulation 8 of

Regulation 2002 as follows:-

“Norms and Standards for various teacher education programmes

(i) The Norms and Standards for various teacher education courses

are given in the Appendices 3 to 14 as indicated below which an institution offering

the said course is required to comply with.

(i) Norms and Standards for Pro School Appendix-3

Teacher Education Programme

(ii) Norms and Standards for Nursery Teacher Appendix-4

Education Programme

(iii) Norms and Standards for Elementary Appendix-5

Teacher Education Programme

(iv) Norms and Standards for Bachelor of Appendix-6

Elementary Education (B.El.Ed)

(v) Norms and Standards for Secondary Appendix-7

Teacher Education Programme

(vi) Norms and Standards for Master of Appendix-8

Education (M.Ed.) Programme

(vii) Norms and Standards for Master of Appendix-9

Education (M.Ed.) Programme (Part time)

(viii) Norms and Standards for Certificate in Appendix-10

Physical Education (C.P.Ed.) Programme

(ix) Norms and Standards for Bachelor of Appendix-11

Physical Education (B.P.Ed.) Programme

(x) Norms and Standards for Master of Appendix-12

Physical Education (M.P.Ed.) Programme

(xi) Norms and Standards for B.Ed. (Open and Appendix-13

Distance Learning System)

(xii) Norms and Standards for M.Ed. (Open and Appendix-14

Distance Learning System)

(ii) The norms and standards herein notified are minimum and

essential. The institution may strengthen further the physical

and instructional infrastructure.”

21

The aforesaid “norms and standards” were notified by NCTE Regulations 2002

and retained in the NCTE Regulations, 2005. Appendix-7 was related to

“norms and standards for Secondary Teacher Education Programme”.

The norms related to Secondary Teacher Education Programme leading

to B.Ed. Degree (face-to-face) were in process of change. After finalization of

such norms relating to revision of Secondary Teacher Education Programme

leading to B.Ed. Degree Course (face-to-face) the NCTE enacted National

Council for Teacher Education (Recognition Norms and Procedure)

(Amendment) Regulations, 2006. By amended Regulation 3 the “norms and

standards”, as was stipulated in Appendix-7 was replaced by Appendix-1 of the

Amended Regulations, 2006. The said Appendix-1 was made a part of the

main Regulations, 2005 dated 27th December, 2005. By a `Note’ below the said

amended Regulation 3 it was clarified that conditions prescribed under

Regulation 8(3) and 8(4) shall not be applicable in certain cases, as shown

hereunder:

“3. Extent of Amendment

(i). The appendix – 7 of the norms and standards which was

notified by NCTE Regulation, 2002 and retained in the NCTE

Regulations, 2005 shall be replaced by the appendix-1 to this

amendment and be read as part thereof.

Note:- For enhancement of intake in the course where new norms

have been published after notification of the Regulations dated

27.12.2005, the conditions prescribed in Rule 8(3) and 8(4) of the

said Regulation shall not be applicable.”

38. Thereby, the Regulations 8(3) and 8(4) remained in force for all

Teachers Education Courses, e.g. Elementary Teachers Education Programme,

22

Bachelor of Elementary Education (B.El.Ed.), Standard for Secondary Teacher

Education Programme, Master of Education (M.Ed.) Programme etc., even

after amended Regulations 2006, but with a rider that in case new norms are

published for any such Course after notification of Regulations dated 27th

December, 2005, the conditions prescribed in Rule 8(3) and 8(4) of the

Regulations, 2005 dated 27th December, 2005 shall not be applicable for such

course.

39. Subsequently, when Regulations 2007 were enacted, the Regulations

8(3) and 8(4) of Regulations 2005 were retained. In the aforesaid

circumstances by Regulation 8(5) it was clarified that if any institution has

been granted additional intake in B.Ed. and B.P.Ed. teachers training courses

after enactment of Regulations 2005 i.e. 13th January, 2006, such institution is

required to be accredited itself with NAAC with a Letter Grade B.

It is needless to say that Regulations 8(3) and 8(4) of Regulations 2005

dated 27th December, 2005 having retained, it was always open to NCTE to

remind the institutions that they were required to follow Regulations 8(3) and

8(4), if were allowed additional intake after 13th January, 2006. For the reason

aforesaid the Regulation 8(5) cannot be held to be retrospective. The second

question is, thereby, answered in negative against the appellants.

40. Further, as plain reading of the Regulations 8(3), 8(4) and 8(5) makes it

clear that right of exemption, if any, accrued to an institution in view of `Note’

23

below Regulation 3 of amended Regulations 2006, has not been taken away

nor impaired any vested right acquired by any institution and as no new

obligation on the part of any institution has been created, they being governed

by Regulations 8(3) and 8(4) since 13th January, 2006, the Regulation 8(5)

cannot be held to be retrospective. The Regulations 8(3), 8(4) and 8(5) having

nexus with maintenance of standards of teacher education and to make

qualitative improvement in the system of teacher education by phasing out sub-

standard teaching, the validity of Regulation 8(4) and 8(5) cannot be

questioned. In absence of any merit, the appeal is dismissed but there shall be

no order as to costs.

……………………………………………….J.

( R. V. RAVEENDRAN )

………………………………………………J.

( A.K. PATNAIK)

……………………………………………….J.

( SUDHANSU JYOTI MUKHOPADHAYA)

NEW DELHI,

OCTOBER 12, 2011.