ID
stringlengths 4
7
| para_id
int64 0
26
| newJudgement
stringlengths 0
34.1k
|
|---|---|---|
id_1637
| 1
|
Shrimati Mahua Moitra, Member of Parliament, while giving an interview to Shri Rajdeep Sardesai, which was widely telecast by India Today and is available on YouTube, accepted that Shri Darshan Hiranandani had gifted her a Hermes brand scarf, Bobbi Brown brand lipstick and eye shadow, and makeup articles. Whenever she was visiting Mumbai or Dubai, Shri Hiranandani also provided her a car and, while renovating her official bungalow at 9‑B, Telegraph Lane, New Delhi, he also provided her layout drawings., As a matter of fact, Shri Darshan Hiranandani, at paragraph twelve of his notarized affidavit, corroborated the gifting of these articles and the provision of amenities and various other facilities, stating: Over a period, my friendship with Ms Mahua Moitra grew, I also felt that through her I would get support in other states ruled by the Opposition, because she bonded extremely well with other leaders of the Opposition like Shri Gandhi, Shri Shashi Tharoor and Shri Pinaki Mishra, with whom she also shared close relations. Importantly, she also made frequent demands of me and kept asking me for various favours, which I had to fulfil in order to remain in close proximity with her and get her support. The demands and favours included gifting her expensive luxury items, providing support on renovation of her officially allotted bungalow in Delhi, travel expenses, holidays, etc., apart from providing secretarial and logistical help for her travels within India and to different parts of the world., The details of the use of login credentials have been given in Annexure VI of the Ethics Committee Report dated 09 November 2023 (reproduced in the reply of defendant number two to Interim Application 24255/2023), which are as follows:, A perusal of the findings of the Ethics Committee Report of the Lok Sabha dated 09 November 2023 and the table reproduced above clearly substantiate the fact that (i) the plaintiff’s parliamentary login credentials were shared by her with Shri Darshan Hiranandani; (ii) the said account was regularly and repeatedly accessed from outside India. This, coupled with the fact that the plaintiff publicly acknowledged receipt of certain gifts from Shri Darshan Hiranandani, as set out in paragraph sixty‑five of the report of the Ethics Committee of the Lok Sabha, completely discredits the plaintiff’s denial in toto to the contents of the defendant number two’s communication dated 14 October 2023., Learned counsel for the plaintiff emphasises that regardless of whether the plaintiff shared her login credentials and was in receipt of some gifts from Shri Darshan Hiranandani, there is no basis to the allegations of quid pro quo and bribery against the plaintiff. This submission cannot be countenanced by the Supreme Court of India for multiple reasons. Firstly, the submission is at variance with the case set out in the plaint. As noted above, the plaint proceeds on the plaintiff’s vehement denial in toto to the allegations contained in the communications dated 14 October 2023 addressed by defendant number two. Nothing prevented the plaintiff from making full disclosure in the plaint regarding the background of the sharing of her login credentials with Darshan Hiranandani and explaining the receipt of gifts from him. However, the omission on the part of the plaintiff to do so is conspicuous when viewed in the light of the material placed on record by the defendants in the form of (i) the public statements of the plaintiff herself; (ii) the aforementioned affidavit of Darshan Hiranandani; (iii) the report of the Ethics Committee of the Lok Sabha., Secondly, with regard to the allegations that the bribe or gifts were received by the plaintiff as a quid pro quo for granting complete and unfettered access to her online Lok Sabha login to Shri Darshan Hiranandani, it has been concluded by the Ethics Committee of Parliament as follows:, In view of the totality of the facts and circumstances of the case, the Committee is of the opinion that the allegations of accepting illegal gratification by Shrimati Mahua Moitra from Shri Darshan Hiranandani have been clearly established, which are undeniable and based on systematic deliberations of the Committee on Ethics. The Committee would also like to emphasise that taking gifts and other facilities from a businessman to whom she had even handed over her official login credentials so that this businessman could directly operate her Members’ Portal and post parliamentary questions of his own choice, even if in small quantity or on a few occasions, amounts to illegal gratification and a quid pro quo, which is not only unbecoming of a Member of Parliament but also grossly unethical conduct., As regards taking cash from Shri Darshan Hiranandani as a sequel to quid pro quo, the Committee candidly points out that it does not have the technical wherewithal and expertise to criminally investigate and unearth the money trail, which is invariably the task of Central Government institutions. The Committee therefore recommends that the cash transaction between Shrimati Mahua Moitra and Shri Darshan Hiranandani as part of quid pro quo could be investigated by the Government of India in a time‑bound manner., In the above circumstances, prima facie it cannot be said that the allegations contained in the communications dated 14 October 2023 addressed by defendant number two and in the communication dated 15 October 2023 addressed by defendant number one are wholly false and unsubstantiated, or made with reckless disregard towards the truth., As held by the Supreme Court of India in Ram Jethmalani v. Subramaniam Swamy, traditional defences to an action for defamation have now become fairly crystallised and can be compartmentalised into three categories: truth, fair comment and privilege. Truth, or justification, is a complete defence. The standard of proof of truth is not absolute but is limited to establishing that what was spoken was substantially correct. Fair comment offers protection for the expression of opinions; the standard of proof is not that the Court has to agree with the opinion, but is limited to determining whether the views could honestly have been held by a fair‑minded person on facts known at the time. Unlike the defence of truth, a defence based on fair comment can be defeated if the plaintiff proves that the defamer acted with malice. A similar situation arises with the defence of qualified privilege. Privilege is designed to protect expression made for the public good. Protection of qualified privilege is lost if actual malice is established. In the public interest, absolute privilege is a complete defence. The rationale for absolute privilege being restricted to court proceedings or proceedings before tribunals which have all the trappings of a civil court and parliamentary proceedings is that if the threat of defamation suits looms large over lawyers, litigants, witnesses, judges and parliamentarians it would prohibit them from speaking freely and public interest would suffer., It is undoubtedly true that courts must come down heavily on defamatory statements made with reckless disregard for truth involving a public figure. In Naresh Kumar v. Wire & Ors., after taking note of the judgments in Institute of Chartered Accountants of India v. L. K. Ratna, Lakshmi Murdeshwar Puri v. Saket Gokhale, Vinai Kumar Saxena v. Aam Aadmi Party & Ors., Hanuman Beniwal v. Vinay Mishra and Subramanium Swamy v. Union of India, the Supreme Court of India held that it must grant injunctive orders to prevent irreparable damage in cases where defamatory publications, if allowed to be propagated, would sully a reputation earned over several decades., However, in the present case, the matter acquires a completely different complexion on account of the aspects noted hereinabove, namely: (i) the omission on the part of the plaintiff to disclose in the plaint her dealings with Shri Darshan Hiranandani or the background and rationale of sharing her login credentials; (ii) the plaintiff’s own public statements and admissions, as brought out by the defendants, regarding sharing of her login credentials with Shri Darshan Hiranandani and receipt of several gifts from him; (iii) the report of the Ethics Committee of the Lok Sabha; (iv) the affidavit of Shri Darshan Hiranandani himself, which has been placed on record in these proceedings and copiously referred to in the report of the Ethics Committee of the Lok Sabha., In these circumstances, the plaintiff has failed to make out a case for the grant of any interim injunction against the defendants. The present application is consequently dismissed., It is made clear that the observations made in this order are only for the purpose of deciding the present application., All rights and contentions of the parties are left open to be considered at the stage of final disposal of the present suit.
|
id_1638
| 0
|
Mohd. Nawaz Iqbal Shaikh, Applicant, versus the State of Maharashtra and Another Respondent; Salman Khan, also known as Abdul Rashid Salim, Applicant, versus the State of Maharashtra and Another Respondent; Mr. Vikram Sutaria with Mr. Parag Khandhar in behalf of DSK Legal for the Applicant in APL/450/22; Mr. Abad Ponda, Senior Advocate with Mr. Parag Khandhar in behalf of DSK Legal for the Applicant in APL/357/22; Ms. P. N. Dabholkar, Additional Public Prosecutor for the State; and Mr. Fazil Hussein for Respondent No. 2., The two applications before me invoke the power of the Bombay High Court under Section 482 of the Code of Criminal Procedure, seeking a relief of quashing an order dated 22/03/2022 passed by the Metropolitan Magistrate, 10th Court at Andheri, Mumbai, which issued process against the applicants for committing offences punishable under Sections 504 and 506 of the Indian Penal Code. Among the two applicants, one, Salman Khan, is a well‑known cinema artist and a part of the Indian film and entertainment industry, claiming an excellent reputation, tremendous goodwill and extensive fan following in India and internationally. The other applicant was working as a bodyguard of Salman Khan at the relevant time when the alleged incident took place., The complainant is Mr. Ashok Shyamlaal Pandey, a journalist, who alleges that he had a tiff with the accused persons on the date in question. He filed a complaint before the Metropolitan Magistrate against the two named persons and an unknown person. The complainant narrates that, as a journalist, he was travelling in his car from Juhu to Kandivali with his cameraman at around 4.40 p.m. on 24/04/2019. On his way, he noticed Accused No. 1 riding a bicycle and Accused Nos. 2 and 3 escorting him on a bike. Being a journalist, he asked Accused Nos. 2 and 3 whether he could video‑shoot Accused No. 1, and once consent was accorded, he started recording. This irked Accused No. 1, who signaled Accused Nos. 2 and 3 to jump onto the complainant’s car and assault him. Accused No. 1 also participated in the assault and forcibly removed the complainant’s mobile phone without his consent., The version in the complaint states that the accused persons not only abused and misbehaved with the complainant but also assaulted and threatened him. The complainant further states that when Accused No. 1 started snatching his mobile phone, he informed Accused No. 1 that he was a journalist and was recording video with the prior consent of the bodyguards. Accused No. 1 replied ‘Doesn’t matter’, abused and assaulted the complainant, forcibly snatched the mobile phone and attempted to break it, deleting several applications and important data from the phone., It is worth mentioning that immediately after the incident at around 4.40 p.m. on 24/04/2019, the complainant approached D.N. Nagar Police Station at 18.12 hours and reported the alleged incident. The narration states that after permission was granted to videograph, Accused No. 1 looked back and signaled his bodyguards, who, riding a motorcycle, rushed towards the complainant’s car with an open window and pushed the occupants. A verbal altercation ensued between the bodyguards and the car occupants, and Accused No. 1 snatched the mobile phone from the car and moved away. While an attempt was being made to contact the police on number 100, the two bodyguards returned the mobile phone., The complaint lodged with the police station alleged misbehavior by Accused No. 1 and asserted that, despite being a celebrity, he could not behave irresponsibly, as permission from his bodyguards had been sought before videographing him. The complaint was received at D.N. Nagar Police Station on the same day., Another complaint was addressed to D.N. Nagar Police Station on 27/04/2019, alleging that, pursuant to the complaint recorded on 24/04/2019, the complainant had received calls from distinct numbers and was pressurised to withdraw the complaint. He also expressed apprehension of being followed and specifically alleged that, upon returning home, he noticed certain videos had been deleted from his mobile. A clarification is offered that the bodyguards’ claim that the complainant followed them for 20 minutes is false, and CCTV footage can ascertain the truth., On 13/06/2019, the Police Inspector of D.N. Nagar Police Station intimated the complainant that the complaint filed by him had been classified as Non‑Cognizable., Subsequently, on 25/06/2019, a complaint was filed before the Metropolitan Magistrate, 10th Court at Andheri, Mumbai, seeking a direction under Section 156(3) of the Code of Criminal Procedure to hold a detailed inquiry into the incident and, alternatively, to issue process against the accused persons under Sections 324, 392, 426, 506(II) read with Section 34 of the Indian Penal Code., On 04/09/2019, the Magistrate passed an order, relying upon the decision of the Bombay High Court in Yogiraj Vasantrao Surve versus State of Maharashtra, recording that, after combined perusal of the complaint and documents on record, no case of robbery could be perceived, though elements of assault and mischief were present. In such circumstances, exercising power under Section 156(3) of the Code of Criminal Procedure was not necessary. Instead, calling for a report under Section 202 of the Code of Criminal Procedure was justified as the accused persons were residents of an area beyond the jurisdiction of this Court. Accordingly, the case was referred for inquiry under Section 202 of the Code of Criminal Procedure at D.N. Nagar Police Station., The operative part of the order read: (i) The request of the complainant for directions under Section 156(3) of the Code of Criminal Procedure stands rejected; (ii) The complainant shall furnish a verification statement under Section 200 of the Code of Criminal Procedure; (iii) The matter be referred for inquiry under Section 202 of the Code of Criminal Procedure at D.N. Nagar Police Station, and the Senior Police Inspector of D.N. Nagar Police Station is directed to carry out the inquiry and furnish his report on a fixed date without fail; (iv) The matter be listed on 14/10/2019., In compliance with the aforesaid direction, the complainant submitted a verification statement on 06/01/2020, which is placed on record as Exhibit C. The statement is signed by the complainant but is neither an affidavit nor a verification before the Magistrate. Meanwhile, the Senior Police Inspector, D.N. Nagar Police Station, forwarded his enquiry report to the Magistrate vide Outward Number 1925 of 2020 dated 24/12/2020, concluding that the complainant started videography without permission of Accused No. 1, and the allegation of abuse by Accused No. 1 is denied by the non‑applicants. The report held that a quarrel had taken place between the complainant and Accused No. 1 and his bodyguards, and therefore offences under Sections 504 and 506 of the Indian Penal Code are made out., Upon receipt of the report, the Magistrate recorded that he had perused the complaint, the statement on oath, and the investigation report under Section 202 of the Code of Criminal Procedure filed by D.N. Nagar Police Station. He heard Mr. Fazil Hussain Shaikh, the learned Senior Advocate for the complainant, at length. Keeping in view the material on record, the Magistrate found sufficient grounds to proceed against the accused persons for offences under Sections 504 and 506 of the Indian Penal Code. Accordingly, he issued process against: (i) Accused No. 1, Mr. Salman Salim Khan, residing at 3, Galaxy Apartment, B.J. Road, Band Stand, Bandra (West), Mumbai; and (ii) Accused No. 2, Mr. Mohd. Nawaz Iqbal Shaikh, bodyguard, for the offences under Sections 504 and 506 of the Indian Penal Code. The summons are returnable on 05/04/2022., The order is assailed in the applications filed by the two applicants. The learned Senior Counsel, Mr. Abad Ponda, rests his case on two questions of law: (i) that the impugned order is bad because it does not adhere to the procedure prescribed under Chapter XV of the Code of Criminal Procedure; and (ii) that, on no stretch of imagination, the offences under Sections 504 and 506 are made out. He also invites attention to alleged mala fides in lodging the complaint after a gap of time, which is favoured differently from the immediate reporting to D.N. Nagar Police Station., In support of his first contention, the learned Senior Counsel submits that the procedure contemplated under Section 200 of the Code of Criminal Procedure is mandatory and the Magistrate is duty‑bound to examine the complaint on oath; only after such perusal, if a prima facie case is revealed, can process be issued. This power cannot be abdicated by filing an affidavit in cases involving the Indian Penal Code. Drawing an analogy with Section 145 of the Negotiable Instruments Act, 1881, he submits that filing a verification statement cannot be done merely by tendering an affidavit. He contends that the impugned order breaches the prescribed procedure because the Magistrate has not examined the complainant nor recorded the statement of the witness on oath, as required by Sections 200 and 202 of the Code of Criminal Procedure., The learned Senior Counsel relies upon the decisions of the Supreme Court in Shivjee Singh versus Nagendra Tiwary & Others, the Karnataka High Court in Sri Sathya Sai Central Trust & Others versus State of Karnataka, and several judgments of the Bombay High Court regarding the procedure under Section 200 of the Code of Criminal Procedure, emphasizing that verification is not a mere formality and the Magistrate must record the statement on oath and apply his judicial mind before taking further action., He further argues, citing the decision in Vasant Waman Pradhan versus Dattatraya Vithal Salvi & Others, that Section 504 of the Indian Penal Code is not attracted in the present case because the complainant alleged only that the accused’s words and gestures were intended to insult him, which can be inferred from surrounding circumstances, but does not constitute an intentional insult provoking breach of public peace., The learned counsel for the complainant, Mr. Fazil Hussein, raises a preliminary objection regarding the maintainability of the applications under Section 482 of the Code of Criminal Procedure, asserting that the appropriate remedy would be a revision under Section 397 of the Code of Criminal Procedure. He also relies upon the Supreme Court decision in Fiona Shrikhande versus State of Maharashtra & Others, stating that for invoking offence under Section 504, there must be an act or conduct amounting to an intentional insult, and that the nature of the words or gestures must be such as to provoke a breach of public peace., The Court rejects the objection in limine, relying upon the Supreme Court decision in Prabhu Chawla versus State of Rajasthan & Others, which holds that the existence of a revision remedy does not bar the exercise of inherent power under Section 482 of the Code of Criminal Procedure where abuse of the process of the Court or extraordinary situations justify its invocation., Section 482 of the Code of Criminal Procedure preserves the inherent power of the Court to advance the cause of justice. The power may be exercised to give effect to an order under this Code, to prevent the abuse of the process of the Court, or to otherwise secure the ends of justice. It is a well‑settled position of law that the Court should be guarded in the exercise of this extraordinary jurisdiction to quash any criminal proceedings filed through an FIR, as it denies the prosecution an opportunity to establish its case on production of evidence., The Supreme Court in State of Haryana versus Bhajan Lal enumerated situations where quashing of criminal proceedings is appropriate, including: (a) where the allegations in the first information report or complaint, even if taken at face value, do not prima facie constitute any offence; (b) where the allegations and accompanying materials do not disclose a cognizable offence justifying investigation under Section 156(1) of the Code of Criminal Procedure; and (c) where the proceeding is manifestly attended with mala fides or is maliciously instituted with an ulterior motive., In exercising jurisdiction under Section 482, the Court looks at whether, on the face of the FIR, the allegations constitute a cognizable offence and whether sufficient material exists to proceed. If the allegations do not constitute an offence, the High Court may quash the proceedings in exercise of its inherent power., Section 504 of the Indian Penal Code prescribes punishment for intentional insult with intent to provoke breach of peace. Its essential ingredients are: (a) intentional insult; (b) provocation to any person, intending or knowing it to be likely that such provocation will cause him to break public peace or commit any other offence. In the absence of these ingredients, an act does not constitute an offence under Section 504., The complaint filed before the Magistrate does not contain any allegation of intentional insult or provocation that would lead the complainant to break public peace. The allegations relate to assault, snatching of a mobile phone, and the utterance ‘Doesn’t matter’, which do not amount to an intentional insult as required under Section 504. Consequently, no offence under Section 504 is made out., Section 506 of the Indian Penal Code, read with Section 503, defines criminal intimidation as a threat to cause injury to a person’s reputation, property, or person, with intent to cause alarm or to compel the person to act or omit an act. The essential element is the intention to cause alarm. In the present case, such intention is not explicit, and the allegations do not satisfy the necessary ingredients of Sections 504 and 506. Therefore, the impugned order issuing process for offences under Sections 504 and 506 of the Indian Penal Code deserves reversal., Procedurally, before the Magistrate could conclude that sufficient grounds exist to proceed against the accused persons, he should have followed the procedure under Section 200 of the Code of Criminal Procedure, which mandates examination of the complainant and witnesses on oath, reduction of the substance of such examination in writing, and signing by the complainant, witnesses, and the Magistrate. Only after this stage could the Magistrate inquire into the case himself or direct an investigation under Section 202., The proviso to Section 202 provides that an investigation direction shall not be made unless the complaint has been examined on oath under Section 200. If, after considering the statements on oath and the result of the inquiry or investigation, the Magistrate finds no sufficient ground for proceeding, he shall dismiss the complaint with reasons; otherwise, he shall issue summons under Section 204 for a summons case or a warrant for a warrant case., The procedure prescribed under Chapter XV of the Code of Criminal Procedure is clearly laid down, and there is no alternative route. Chapter XVI, which contains Section 204 for issuance of process, falls under the heading ‘Commencement of Proceedings before the Court’. The Magistrate must first ascertain, on perusal of the complaint and examination of the complainant and witnesses, whether material sufficient exists to conclude that an offence has taken place. If the accused resides beyond the jurisdiction, the Magistrate may postpone issuance of process; otherwise, he may issue summons under Section 204., The term ‘cognizance’ has been interpreted to mean the application of the mind of the Court to the facts of the case, i.e., to become aware of the offence. Once cognizance is taken, the next step is to secure the presence of the offender before the Court, for which the Magistrate issues process. The issuance of process must necessarily be preceded by the application of mind to the facts before the Magistrate taking cognizance., Section 200 of the Code of Criminal Procedure thus carves out a mandatory procedure for the Magistrate taking cognizance of an offence on complaint.
|
id_1638
| 1
|
The Magistrate is not bound to take cognizance merely because a complaint has been filed before him when it does not disclose a cause of action. In S.R. Sukumar vs. S. Sunaad Raghuram, the Honorable Supreme Court of India has rightly crystallised the process in the following words, which I must reproduce. Section 200 of the Criminal Procedure Code provides for the procedure for a Magistrate taking cognizance of an offence on complaint. The Magistrate is not bound to take cognizance of an offence merely because a complaint has been filed before him when, in fact, the complaint does not disclose a cause of action. The language in Section 200, “a Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any,” clearly suggests that for taking cognizance of an offence on complaint, the Court shall examine the complainant upon oath. The object of examination of the complainant is to find out whether the complaint is justifiable or is vexatious. Merely because the complainant was examined does not mean that the Magistrate has taken cognizance of the offence. Taking cognizance of an offence means the Magistrate must have judicially applied the mind to the contents of the complaint and indicates that the Magistrate takes judicial notice of an offence., Mere presentation of the complaint and receipt of the same in the court does not mean that the Magistrate has taken cognizance of the offence. Section 200 contemplates a Magistrate taking cognizance of an offence on complaint to examine the complaint and examine upon oath the complainant and the witnesses present, if any. Then normally three courses are available to the Magistrate. The Magistrate can either issue summons to the accused, order an inquiry under Section 202 of the Criminal Procedure Code, or dismiss the complaint under Section 203 of the Criminal Procedure Code. Upon consideration of the statement of the complainant and the material adduced at that stage, if the Magistrate is satisfied that there are sufficient grounds to proceed, he can proceed to issue process under Section 204 of the Criminal Procedure Code. Section 202 contemplates postponement of issue of process. It provides that the Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance, may, if he thinks fit, postpone the issue of process for compelling the attendance of the person complained against, and either inquire into the case himself, or have an inquiry made by any Magistrate subordinate to him, or an investigation made by a police officer, or by some other person for the purpose of deciding whether there is sufficient ground for proceeding. If the Magistrate finds no sufficient ground for proceeding, he can dismiss the complaint by recording briefly the reasons for doing so as contemplated under Section 203. A Magistrate takes cognizance of an offence when he decides to proceed against the person accused of having committed that offence and not at the time when the Magistrate is merely informed either by complainant by filing the complaint or by the police report about the commission of an offence., “Cognizance” therefore has a reference to the application of judicial mind by the Magistrate in connection with the commission of an offence and not merely to a Magistrate learning that some offence had been committed. Only upon examination of the complainant will the Magistrate proceed to apply the judicial mind whether to take cognizance of the offence or not. Under Section 200, when the complainant is examined, the Magistrate cannot be said to have ipso facto taken cognizance, when the Magistrate is merely gathering the material on the basis of which he will decide whether a prima facie case is made out for taking cognizance of the offence or not. “Cognizance of offence” means taking notice of the accusations and applying the judicial mind to the contents of the complaint and the material filed therewith. It is neither practicable nor desirable to define as to what is meant by taking cognizance. Whether the Magistrate has taken cognizance of the offence or not will depend upon facts and circumstances of the particular case., Section 200, as it stands, makes it obligatory on the part of the Magistrate to record the statement of the complainant or his witnesses on oath before taking cognizance of the matter. The use of the word “shall” leaves no scope for the Magistrate to dispense with the said requirement. In a decision in the case of Tula Ram & Ors. vs. Kishore Singh, the Supreme Court of India culled out the necessary procedure to be followed by the Magistrate before taking cognizance and held that where a Magistrate chooses to take cognizance, he can adopt any of the following alternatives: he can peruse the complaint and, being satisfied that there are sufficient grounds for proceeding, he can straightaway issue process, but before he does so, he must comply with the requirement of Section 200 and record the evidence of the complainant or his witnesses. In view of the mandatory provision, the Magistrate is duty bound to examine the complainant on oath before he reaches the stage of Section 202 or Section 204., In the present case, the Magistrate failed to adhere to the said procedure, as there is no verification of the complainant and he was not examined on oath. The complaint which was filed itself gave the list of the witnesses, as the complainant himself and any other witness with the permission of the Honourable Court. The Magistrate, on 04/09/2019, rejected the request for issuance of direction under Section 156(3) and directed the complainant to furnish a verification statement under Section 200 of the Criminal Procedure Code. In compliance, on 06/01/2020, a verification was submitted by the complainant without any solemn affirmation and the Magistrate skipped the important stage of recording his statement on oath, though he indicated that the procedure was to be followed. In the record and proceedings, there is one affidavit of the complainant dated 25/06/2019, which admittedly is prior to the issuance of direction by the Magistrate on 04/09/2019 and this affidavit is in support of the complaint, affirming that he has put the aforesaid facts on the record of the Court and has not filed any other complaint in any other Court. The said affidavit, though projected to be a compliance of Section 200, in my opinion, is not. Unless examination of the complainant was made under Section 200 of the Criminal Procedure Code, the Magistrate cannot exercise the power under Sections 202, 203 or 204 and, in this case, by surpassing the said procedure, the Magistrate has issued process against the accused persons, an order that cannot be sustained, being not in compliance with Section 200 of the Criminal Procedure Code. Hence, the order of the Magistrate suffers from serious infraction of procedure to be adopted by a Magistrate upon a complaint being filed before him., The impugned order passed by the Magistrate suffers from two glaring discrepancies; firstly, invocation of Sections 504 and 506 of the Indian Penal Code in the wake of the complaint filed as an afterthought and without the ingredients of the said sections being satisfied, and secondly, the Magistrate has failed to follow the procedural mandate before taking cognizance of the complaint, as contemplated in Chapters XV and XVI of the Criminal Procedure Code. I would be justified in quashing the proceedings, since its continuation would amount to abuse of process of the Court and quashing of the same would otherwise serve the ends of justice., In State of Karnataka vs. M. Devendrappa, the Supreme Court of India pertinently observed: “All Courts, whether civil or criminal, possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in the course of administration of justice on the principle ‘quando lex aliquid alicui concedit, concedere videtur et id sine qua res ipsae, esse non potest’ (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the Court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone Courts exist. Authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the Court has power to prevent abuse. It would be an abuse of process of the Court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers the Court would be justified to quash any proceeding if it finds initiation or continuance of it amounts to abuse of process of the Court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the Court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.”, Reliance by the learned counsel Mister Hussain on the decision of Fiona Shrikhande does not take his case further, as it was considered in the case of Vikram Johar vs. State of Uttar Pradesh & Anr., when a question arose whether the appellant was entitled to discharge for the offences under Sections 504 and 506 of the Indian Penal Code and whether the Courts below committed error in rejecting the discharge application. While dealing with Section 504, the two‑judge bench reproduced the observations in paragraphs 11 and 13 of Fiona and recorded: “Now, we revert back to the allegations in the complaint against the appellant. The allegation is that the appellant with two or three other unknown persons, one of whom was holding a revolver, came to the complainant’s house and abused him in filthy language and attempted to assault him and when some neighbours arrived there the appellant and the other persons accompanying him fled the spot. The above allegation, taking on its face value, does not satisfy the ingredients of Sections 504 and 506 as enumerated by this Court in the above two judgments. The intentional insult must be of such a degree that it should provoke a person to break the public peace or to commit any other offence. The mere allegation that the appellant came and abused the complainant does not satisfy the ingredients as laid down in paragraph 13 of the judgment of this Court in Fiona Shrikhande.”, Regarding Section 506, the following observations are made: “Now, reverting back to Section 506, which is the offence of criminal intimidation, the principles laid down by Fiona Shrikhande have also to be applied when the question of finding out whether the ingredients of the offence are made out or not. Here, the only allegation is that the appellant abused the complainant. For proving an offence under Section 506 IPC, the prosecution must prove: (i) that the accused threatened some person; (ii) that such threat consisted of some injury to his person, reputation or property, or to the person, reputation or property of someone in whom he was interested; (iii) that he did so with intent to cause alarm to that person; or to cause that person to do any act which he was not legally bound to do, or omit to do any act which he was legally entitled to do as a means of avoiding the execution of such threat.” A plain reading of the allegations in the complaint does not satisfy all the ingredients as noticed above. Applying the principle in Fiona Shrikhande and the decision in the case of Manik Taneja vs. State of Karnataka, it was held that the ingredients of Sections 504 and 506 are not made out and the complaint filed under Section 156(3) of the Criminal Procedure Code, in absence of ingredients of Sections 504 and 506, was held not to justify its continuation and the appellant was held entitled to discharge for the offences under Sections 504 and 506., The judicial process need not be a means for needless harassment merely because the accused is a well‑known celebrity and, without adhering to the procedure of law, he shall not be subjected to unnecessary oppression at the hands of a complainant who set in motion a machinery to satisfy his vendetta and assumed that he was insulted by the cine star. This Court, in exercise of power under Section 482 of the Criminal Procedure Code, can prevent the abuse of process and secure the ends of justice, not only for the complainant but also for the accused persons, and this is a fit case where issuance of process against the applicants and continuation of the proceedings is nothing short of abuse of process. For doing substantial justice, I deem it appropriate to quash the impugned order by exercising the wide power possessed by this Court under Section 482 of the Criminal Procedure Code. Continuation of any action against the applicants would result in grave injustice and the circumstances narrated above warrant its quashment, by necessarily setting aside the order of issuance of process. In view of the above, the impugned order dated 22/03/2022 and the proceedings before the Metropolitan Magistrate Court, 10th Court, Andheri, Mumbai in form of C.C. No. 326/SW/2019 are quashed. The application is made absolute in terms of prayer clauses (a) and (b).
|
id_1639
| 0
|
Neutral Citation Number 2023:DHC:2073-DB Reserved on: March 10, 2023 Pronounced on: March 23, 2023 Through: Mister Mukul Talwar, Senior Advocate with Mister Ankur Chhibber, Mister Rajesh Sachdeva, Miss Shobha Gupta, Mister Vineet Budhiraja, Mister Vivek Singh and Mister Apurva, Advocates. Versus Through: Mister Rajat Aneja and Miss Aditi Shastri, Advocates., The petitioner, a Judicial Officer of the Delhi Higher Judicial Service, was dismissed from service with immediate effect pursuant to the Inquiry Report dated 28 June 2021 and the decision of the Full Court of the Delhi High Court dated 26 October 2021, and the subsequent order dated 23 November 2021 issued by the Office of the Principal District and Sessions Judge (South‑West), Dwarka, New Delhi. The petitioner seeks quashing and setting aside of those orders, reinstatement with full exoneration, arrears and other consequential benefits of continuity of service., The petitioner cleared the Delhi Judicial Service in 2003. While serving as a Judicial Officer, in February 2016 he obtained permission to travel abroad with his wife, their minor child, his younger brother, his brother’s wife and their two minor children. He returned in June 2016 and submitted documents to the Delhi High Court. The Court noticed discrepancies in the hotel bookings abroad made by an unknown person and called for an explanation, leading to an exchange of letters. Unsatisfied, the Court issued a memorandum containing the Statement of Article of Charge dated 15 May 2018, later modified on 13 November 2018., The memorandum alleged that Shri Naveen Arora, a member of the Delhi Higher Judicial Service (the Charged Officer), during his visit to Switzerland, Germany and France from 3 June 2016 to 28 June 2016 with his family, accepted a favour in the form of sponsorship of his stay at Radisson Blu Hotel, Disneyland, Paris and Best Western Plus Hotel, Milton Roma, Rome, from Mr. Parvesh Jain, who is stated to be a client of Mr. Manish Arora, brother of the Charged Officer, and Ms. Ashu Arora, the Charged Officer’s wife, both associated with the law firm Lex Alliance. The sponsorship was effected by Mr. Parvesh Jain through Mr. Shyam Sunder Bajaj, who made payments of $2,368.00 and $1,814.44 towards the respective hotel bookings., The Charged Officer’s act was deemed gross misconduct and unbecoming of a judicial officer, contravening Rule 3(1) of the All India Services (Conduct) Rules, 1968, and rendering him liable for disciplinary action under Rule 8 of the All India Services (Discipline and Appeals) Rules, 1969, as applied by virtue of Rule 27 of the Delhi Higher Judicial Service Rules, 1970., The learned Inquiry Officer was appointed and proceedings commenced. Both the petitioner and the Delhi High Court submitted lists of four witnesses each. The petitioner declined to cross‑examine the High Court’s witnesses and later filed an application, after the examination‑in‑chief of two witnesses, to produce two additional witnesses. As the names of these two witnesses were not mentioned in the Statement of Defence filed by the petitioner, only one witness, who had made the hotel payments, was allowed to be added to the list., The Inquiry Officer issued the Inquiry Report dated 28 June 2021, after which the Full Court of the Delhi High Court dated 26 October 2021 dismissed the petitioner from service. The Office of the Principal District and Sessions Judge (South‑West), Dwarka, New Delhi issued an order on 23 November 2021 confirming the dismissal., The Delhi High Court heard the learned Senior Counsel for the petitioner, who, after reviewing the documents and testimonies of the four main witnesses, contended that there was confirmation bias. The earlier unamended Article of Charge noted that the hotel bookings abroad were made by a friend or client of the petitioner’s younger brother and paid for by a stranger, but the amended Article removed the name of the friend or client, implying direct payment by a stranger. The Senior Counsel argued that the petitioner did not withhold information about the stranger’s payment, that the petitioner had informed the Court that he owed money to the friend or client of his younger brother, and that the stranger was a friend of that friend or client. It was also submitted that the petitioner had offered money to the friend or client before leaving for the trip, who assured him that the money would be accepted only upon return. The Senior Counsel admitted that the bookings were made for a hotel rather than a guest house, but noted that no objection was raised by the petitioner., The Senior Counsel further stated that the friend or client of the petitioner’s younger brother refused to accept any money for the hotel bookings despite repeated requests after the petitioner’s return, describing it as a friendly gesture given the long‑lasting relationship. The petitioner’s wife and younger brother were connected with a legal firm run by a former college mate of the petitioner, which had been handling their cases pro bono for several years., The Senior Counsel argued that the petitioner’s case was not covered by paragraph 10 of the Restatement of Values of Judicial Life because the money was paid by a friend who was a friend or client of the petitioner’s younger brother. Relying on the Bangalore Principles of Judicial Conduct, 2002, it was contended that the petitioner had not accepted a favour for the discharge of his duties and that there was no quid‑pro‑quo, especially since the stranger resided in Singapore and the petitioner could not have obliged him. The petitioner had also paid his proportionate share of the trip abroad., The Senior Counsel, relying on S.R. Tiwari v. Union of India, contended that, considering the petitioner’s past service record, the punishment imposed was disproportionate to the gravity of the charge. He also cited M.V. Bijlani v. Union of India & Ors. to argue that the charge was vague and should be vitiated, and referred to Sadhna Chaudhary v. State of U.P. & Ors. to assert that mere suspicion cannot constitute proof, though these authorities were not considered further., The learned counsel for the Delhi High Court argued that the petitioner never disclosed the name of the stranger in any of his letters and that the stranger’s name appeared only in annexed documents dated 2 August 2016, without any textual reference. The counsel maintained that the petitioner was fully aware of the stranger’s identity and the payments made for the hotel bookings before the trip., The counsel further emphasized the relationship between the petitioner, his younger brother, his wife, the friend or client of the younger brother, and the stranger, suggesting a shadow of doubt. He noted that neither the friend or client nor the stranger was connected with the tourism industry and that the bookings could have been made online by anyone, including the petitioner. The counsel concluded that the web of relationships was sufficient to hold the petitioner guilty., The counsel also relied on Ram Kishan v. Government of NCT & Ors., Roop Singh Negi v. Punjab National Bank & Ors., and The State Bank of Bihar & Ors. v. Phulpari Kumari, contending that the present petition did not call for any interference by the Delhi High Court., The Delhi High Court has heard both senior counsels at length, examined all documents and case law cited, and has carefully perused the material on record., The Court, while refraining from delving into the factual matrix at this stage, notes that the petitioner is seeking quashing and setting aside of the Inquiry Report dated 28 June 2021, the Full Court’s decision dated 26 October 2021 dismissing the petitioner, and the subsequent order dated 23 November 2021, thereby effecting a judicial review of those orders., The Court must first determine whether the petitioner has raised any doubt about (i) the appointment or constitution of the Inquiry Officer, (ii) the manner in which the proceedings were conducted, or (iii) the decision‑making process. This inquiry is to ascertain whether the principles of natural justice were observed and whether any procedural violation occurred, and whether the evidence considered by the Officer was sufficient on a preponderance of probabilities., Having examined the records and the arguments of the petitioner’s Senior Counsel, the Court finds that the petitioner has not challenged the appointment of the Inquiry Officer, nor the conduct of the proceedings, nor the decision‑making process. Accordingly, the Court infers that the Officer complied with the principles of natural justice, considered all material documents and witness testimonies, and arrived at a finding of guilt based on a preponderance of probabilities., The record shows that the petitioner failed to provide material responses to repeated queries of the Delhi High Court from the outset. The petitioner initially requested hotel bookings for a guest house but the bookings were made in four‑star and five‑star hotels, a fact he did not question. Although the petitioner’s younger brother arranged the bookings through his friend or client, the petitioner’s letter dated 2 August 2016 did not disclose the stranger’s name or the exact amount owed, merely annexing a document containing that information. The petitioner’s Statement of Defence, filed twice, omitted the stranger’s name, and the name was only added to the witness list after the examination‑in‑chief of two witnesses., The Court notes that the stranger, a complete outsider residing in Singapore, made the payments for the hotel bookings, and the petitioner was aware of this but did not disclose the details earlier. No online bookings were made by the petitioner, despite his younger brother’s background in the IT industry., The acceptance of payment from a stranger is unbecoming of a Judicial Officer. A Judicial Officer is expected to uphold the highest standards of probity and cannot accept benefits that may compromise integrity. The petitioner has not established any defence before the Inquiry Officer or this Court. The acceptance of payment, even if not a quid‑pro‑quo, is sufficient to hold the petitioner guilty., Judicial review under Article 226 of the Constitution of India is not an appeal from the disciplinary authority’s decision but a mechanism to ensure that natural justice has been observed and that the findings are supported by cogent evidence. The Delhi High Court does not re‑appreciate evidence unless the findings shock the conscience of the Court., The present petition does not disclose any lack of evidence, perverse findings, or procedural irregularities. The Officer’s conclusion is well‑reasoned, supported by the evidence, and does not shock the conscience of the Delhi High Court. Consequently, the petition is not maintainable, and the Delhi High Court finds no reason to interfere with the impugned orders., The Delhi High Court relies on the settled position of law as expressed in Roop Singh Negi, Union of India v. H.C. Goel, and Moni Shankar v. Union of India, which hold that departmental proceedings are quasi‑judicial, the principles of natural justice apply, and the Court’s role is limited to examining whether any evidence at all supports the impugned conclusion, not to re‑weigh the evidence., The Delhi High Court also notes the observations in The State Bank of Bihar & Ors. v. Phulpari Kumari, that interference with departmental inquiry orders is permissible only in cases of no evidence, and that the standard of proof in departmental inquiries differs from that in criminal trials.
|
id_1639
| 1
|
Strict rules of evidence are to be followed by the criminal court where the guilt of the accused has to be proved beyond reasonable doubt. On the other hand, preponderance of probabilities is the test adopted in finding the delinquent guilty of the charge., The High Court of Delhi ought not to have interfered with the order of dismissal of the respondent by re‑examining the evidence and taking a view different from that of the disciplinary authority which was based on the findings of the inquiry officer. Neutral Citation Number 2023:DHC:2073‑DB., Therefore, deviating from the existing position and settled norms is prone to setting up a new trend contrary thereto, which, we are afraid, the High Court of Delhi would not do., Lastly, as regards the contention of the learned Senior Counsel for the petitioner that the punishment awarded is disproportionate to the misconduct considering the past service record of the petitioner, in the opinion of the High Court of Delhi, considering the post of a Judicial Officer held by the petitioner, the charge of accepting money in the nature of a favour from a stranger is in itself serious and thus the penalty imposed is commensurate to the charge. We are afraid, no case of leniency calling for reduction of penalty imposed is made out., Having held that there is hardly any scope of interference by the High Court of Delhi, the present petition is not maintainable either in law or facts. Accordingly, finding no need to traverse upon the factual matrix or aspects involved any further and finding no merit in the present writ petition, the same is thus dismissed, albeit without costs, leaving the parties to bear their own respective costs.
|
id_164
| 0
|
Criminal Appeal No. 783 of 2023 between Kathula Vasu (Appellant) and the State of Telangana, represented by its Public Prosecutor, High Court of Telangana, Hyderabad (Respondent). Counsel for the petitioner: Sri M. V. Venu. Counsel for the respondent: Additional Public Prosecutor., This criminal appeal is filed aggrieved by the judgment in Special Court POCSO No. 190 of 2022 dated 10 August 2023 passed by the Special Judge for Expeditious Trial and Disposal of Rape and Protection of Children from Sexual Offences Act Cases at Mahabubabad, wherein the appellant was convicted and sentenced to undergo rigorous imprisonment for a period of 20 years for the offence under Section 3 read with Section 4 of the Protection of Children from Sexual Offences Act, 2012., The prosecution case is that Petitioner Witness 2, the victim girl, was aged around 14 years when the incident took place. According to PW 2, she went to the house of her senior paternal uncle. The victim girl, examined as Petitioner Witness 1, was kept in his brother’s house as he was undergoing treatment. PW 1 returned home after treatment and found that the victim girl who came back from his brother’s place was not active and sad. When questioned, PW 2 alleged that while she was in her uncle’s house, her cousin laid hands on her and kissed her and threatened her not to raise her voice. The next day, the appellant Vasu, who is the cousin, informed her that he liked her and attempted to commit rape. He pressed her chest and waist and did not leave her despite her resistance, and forcibly committed rape. The incident was narrated to the father/PW 1 twenty days after the incident, and a police complaint was lodged., On the basis of the complaint, the victim girl was sent for medical examination. Petitioner Witness 8 examined the victim girl and gave the final opinion that there was no medical evidence of recent sexual intercourse as there was no semen or spermatozoa. No blood, foreign body or hair was found. However, PW 8 opined that intercourse may have happened as the hymen was not intact. Exhibit P7 is the Forensic Science Laboratory report and Exhibit P8 is the final opinion., The learned Sessions Judge, on the basis of the solitary evidence of the victim girl, found that the appellant was guilty., The learned counsel appearing for the appellant submits that the learned Sessions Judge convicted the appellant without any corroborative medical evidence. There were no seizures and medical evidence does not support the prosecution case., The learned Additional Public Prosecutor submits that the victim girl (PW 2) has stated that the appellant forcibly raped her. The statement suffices to convict the appellant. The incident of rape occurred twenty days prior to lodging of the complaint; therefore the question of finding semen or spermatozoa on vaginal smears does not arise. In these circumstances, there can be no other corroboration except the testimony of the victim girl., The basis on which the learned Sessions Judge convicted the appellant is the evidence of PW 2. Relevant portion during chief examination of victim PW 2 is as follows: 'On the next day afternoon hours, accused Vasu came. He is my cousin. He told me that he likes me. At that time my brothers were not there. The accused tried to commit rape on me. He pressed me on my chest and waist and did not leave me, though I resisted him. Later he forcibly committed rape on me.', The girl was aged around 14 years when the incident took place. When there is no corroborating medical evidence or any other oral corroborative evidence, the High Court of Telangana has to place reliance on the testimony of the victim. If the testimony inspires confidence of the Court, the sole testimony can be the basis to convict the accused. However, where a statement is made that the accused committed rape, the Court must be cautious before concluding that the offence of rape has been committed., The statute describes what amounts to penetrative sexual assault under Section 3 of the Protection of Children from Sexual Offences Act, 2012, which reads as follows: 'Penetrative Sexual Assault: A person is said to commit penetrative sexual assault if (a) he penetrates his penis, to any extent, into the vagina, mouth, urethra or anus of a child or makes the child do so with him or any other person; or (b) he inserts, to any extent, any object or a part of the body, not being the penis, into the vagina, urethra or anus of the child or makes the child do so with him or any other person; or (c) he manipulates any part of the body of the child so as to cause penetration into the vagina, urethra, anus or any part of the body of the child or makes the child do so with him or any other person; or (d) he applies his mouth to the penis, vagina, anus, urethra of the child or makes the child do so with him or any other person.' Section 375 of the Indian Penal Code reads as follows: 'Rape: A man is said to commit rape if he (a) penetrates his penis, to any extent, into the vagina, mouth, urethra or anus of a woman or makes her do so with him or any other person; or (b) inserts, to any extent, any object or a part of the body, not being the penis, into the vagina, urethra or anus of a woman or makes her do so with him or any other person; or (c) manipulates any part of the body of a woman so as to cause penetration into the vagina, urethra, anus or any part of the body of such woman or makes her do so with him or any other person; or (d) applies his mouth to the vagina, anus, urethra of a woman or makes her do so with him or any other person.', As seen from the provisions, specific details are given as to what amounts to penetrative sexual assault and what constitutes rape. The High Court of Telangana has to draw conclusions on the basis of evidence narrated by the victim as to how the ingredients of the provisions are satisfied. The use of the word 'rape' by the victim girl in the present circumstances cannot be the sole basis for the Court to assume or infer that penetrative sexual assault had taken place., It is understandable in cases of married women or victims having knowledge about what constitutes rape to accept the statement that the victim was subjected to rape. There is nothing on record in the evidence of PW 2 that she had knowledge about sexual acts or what constitutes rape. Nothing specific is narrated by the victim girl except stating that the accused committed rape on her., In the event of any corroborating medical evidence or any other direct evidence, if the victim states that she was subjected to rape, the Court can draw a conclusion regarding the statement taking into consideration the other corroborating circumstances., However, when the victim is a child and in one word states that rape was committed, it becomes imperative, in the absence of other corroborating evidence, to ascertain from the victim girl what is meant by her narration of rape. The victim girl need not be humiliated in the Court, but the Judge must be satisfied that the child understands the meaning of the word 'rape' as required by the specific requirements of Section 3 of the 2012 Act and Section 375 of the Indian Penal Code., As already stated, if any injuries, semen, spermatozoa, foreign hair, blood, etc., are found from specimens collected in any manner connecting the act of rape, such details by the victim may not be required since there would be sufficient corroborating evidence., The offence punishable under Section 6 of the Protection of Children from Sexual Offences Act, 2012 is punishable for life and a minimum punishment up to 20 years. Under Sections 376, 376-A, 376-B, 376-C, 376-D and 376-E of the Indian Penal Code, the offences are punishable for life. The offences are heinous and grievous in nature. It is the bounden duty of the Courts not to be carried away by the incident, and there cannot be any moral conviction. When the finding of the Court would result in sending a person to life imprisonment, the Court must be more cautious and infer from the admissible evidence on record regarding the allegation of rape., Normally the witnesses are briefed by the public prosecutor and/or close relatives of the victim. Under the circumstances of the present appeal, where there is no other corroborating evidence, the verbatim statement in the language spoken by the victim should be recorded and then translated by the presiding officer or any competent person having knowledge of the language. If the victim only states that she was subjected to rape, the Court may clarify from the victim by putting questions as contemplated under Section 165 of the Indian Evidence Act. This procedure would rule out any doubts regarding the evidence, as such ambiguous statement would otherwise benefit the accused and would not be sufficient for the Court to draw conclusions. The Court is aware that there cannot be any leading questions during chief examination. However, in cases of child witnesses who are already under trauma, clarification can be sought so that the statement of the victim forms the basis for concluding guilt or otherwise of the accused. Seeking such clarification would not amount to putting leading questions to the witness during chief examination., In view of the above discussion, the prosecution has not proved the ingredients of Section 5 of the POCSO Act or Section 375 of the Indian Penal Code; consequently, it cannot be held that the victim girl was raped. However, the victim narrated that the accused pressed her chest and waist and caught hold of her. This clearly falls within the definition of Section 7 of the Act, which reads as follows: 'Sexual assault: Whoever, with sexual intent, touches the vagina, penis, anus or breast of the child or makes the child touch the vagina, penis, anus or breast of such person or any other person, or does any other act with sexual intent which involves physical contact without penetration, is said to commit sexual assault.', Accordingly, the conviction under Section 6 of the 2012 Act is hereby set aside. The appellant is convicted for the offence under Section 8 of the 2012 Act and sentenced to undergo rigorous imprisonment for a period of three years., Accordingly, the criminal appeal is partly allowed. Since the appellant is in jail, he shall be released after completion of the imprisonment of three years.
|
id_1640
| 0
|
Reportable High Court Bar Association, Allahabad Appellant versus State of U.P. & Ors. Respondents Special Leave Petition (Criminal) nos. 13284-13289 of 2023 and Criminal Appeal Diary no. 49052 of 2023., By the order dated 1st December 2023, a Bench of three Hon'ble Judges of the Supreme Court of India expressed a view that a decision of this Court in the case of Asian Resurfacing of Road Agency Private Limited & Anr. v. Central Bureau of Investigation requires reconsideration by a larger Bench., Directions in Asian Resurfacing. In Asian Resurfacing, the Supreme Court of India dealt with the scope of interference by the High Court of Allahabad with an order of framing charge passed by the Special Judge under the Prevention of Corruption Act, 1988 (PC Act). The issue was whether an order of framing charge was an interlocutory order. The High Court of Allahabad held that an order of framing charge under the PC Act was interlocutory., A Bench of two Hon'ble Judges of the Supreme Court of India, by the order dated 9th September 2013, referred the case to a larger Bench to consider the issue of whether the case of Mohan Lal Magan Lal Thacker v. State of Gujarat was correctly decided. A Bench of three Hon'ble Judges held that the order of framing charge was neither an interlocutory nor a final order. Therefore, it was held that the High Court of Allahabad has jurisdiction in appropriate cases to consider a challenge to an order of framing charge. Furthermore, the High Court of Allahabad has jurisdiction to grant a stay of the trial proceedings., Thereafter, it proceeded to consider in which cases a stay of the proceedings ought to be granted. The Bench considered the question in the context of a criminal trial, particularly under the PC Act. In paragraphs 30 and 31, the Bench observed thus:, It is well accepted that delay in a criminal trial, particularly in PC Act cases, has deleterious effect on the administration of justice in which society has a vital interest. Delay in trials affects the faith in rule of law and efficacy of the legal system. It affects social welfare and development. Even in civil or tax cases it has been laid down that power to grant stay has to be exercised with restraint. Mere prima facie case is not enough. Party seeking stay must be put to terms and stay should not be an incentive to delay. The order granting stay must show application of mind. The power to grant stay is coupled with accountability., Wherever stay is granted, a speaking order must be passed showing that the case was of exceptional nature and delay on account of stay will not prejudice the interest of speedy trial in a corruption case. Once stay is granted, proceedings should not be adjourned, and concluded within two to three months., We have been called upon to decide the correctness of the view taken in paragraphs 36 and 37 of the said decision, which read thus: In view of the above, situation of proceedings remaining pending for long on account of stay needs to be remedied. Remedy is required not only for corruption cases but for all civil and criminal cases where on account of stay, civil and criminal proceedings are held up. At times, proceedings are adjourned sine die on account of stay. Even after stay is vacated, intimation is not received and proceedings are not taken up., In an attempt to remedy this situation, we consider it appropriate to direct that in all pending cases where a stay against proceedings of a civil or criminal trial is operating, the same will come to an end on expiry of six months from today unless in an exceptional case by a speaking order such stay is extended. In cases where stay is granted in future, the same will end on expiry of six months from the date of such order unless similar extension is granted by a speaking order. The speaking order must show that the case was of such exceptional nature that continuing the stay was more important than having the trial finalised. The trial court where order of stay of civil or criminal proceedings is produced, may fix a date not beyond six months of the order of stay so that on expiry of period of stay, proceedings can commence unless order of extension of stay is produced., Thus, we declare the law to be that order framing charge is not purely an interlocutory order nor a final order. Jurisdiction of the High Court of Allahabad is not barred irrespective of the label of a petition, be it under Sections 397 or 482 of the Code of Criminal Procedure or Article 227 of the Constitution. However, the said jurisdiction is to be exercised consistent with the legislative policy to ensure expeditious disposal of a trial without the same being in any manner hampered. Thus considered, the challenge to an order of charge should be entertained in a rarest of rare case only to correct a patent error of jurisdiction and not to reappreciate the matter. Even where such challenge is entertained and stay is granted, the matter must be decided on day‑to‑day basis so that stay does not operate for an unduly long period. Though no mandatory time‑limit may be fixed, the decision may not exceed two to three months normally. If it remains pending longer, duration of stay should not exceed six months, unless extension is granted by a specific speaking order, as already indicated. Mandate of speedy justice applies to the PC Act cases as well as other cases where at trial stage proceedings are stayed by the High Court or a court below the High Court. In all pending matters before the High Courts or other courts relating to the PC Act or all other civil or criminal cases, where stay of proceedings in a pending trial is operating, stay will automatically lapse after six months from today unless extended by a speaking order on the above parameters. Same course may also be adopted by civil and criminal appellate/revisional courts under the jurisdiction of the High Courts. The trial courts may, on expiry of the above period, resume the proceedings without waiting for any other intimation unless express order extending stay is produced., A Miscellaneous Application was filed in the decided case, in light of the order passed on 4th December 2019 by the Learned Additional Chief Judicial Magistrate, Pune. When the learned Magistrate was called upon to proceed with the trial on the ground of automatic vacation of stay after the expiry of a period of six months, the learned Magistrate expressed a view that when the jurisdictional High Court had passed an order of stay, a Court subordinate to the High Court cannot pass any order contrary to the order of stay. By the order dated 15th October 2020, this Court held that when the stay granted by the High Court automatically expires, unless an extension is granted for good reasons, the Trial Court, on expiry of a period of six months, must set a date for trial and go ahead with the same., Later, an attempt was made to seek clarification of the law laid down in Asian Resurfacing. This Court, by the order dated 25th April 2022, did not apply the direction issued in Asian Resurfacing to the facts of the case before it. An attempt was made to apply the directions to an order of stay of the order of the learned Single Judge of the High Court passed by a Division Bench in a Letters Patent Appeal., Order of reference to Larger Bench. In the order of reference dated 1st December 2023, this Court observed: We have reservations in regard to the correctness of the broad formulations of principle in the above terms. There can be no gainsaying the fact that a stay of an indefinite nature results in prolonging civil or criminal proceedings, as the case may be, unduly. At the same time, it needs to be factored in that the delay is not always on account of conduct of the parties involved. The delay may also be occasioned by the inability of the Court to take up proceedings expeditiously. The principle which has been laid down in the above decision to the effect that the stay shall automatically stand vacated (which would mean an automatic vacation of stay without application of judicial mind to whether the stay should or should not be extended further) is liable to result in a serious miscarriage of justice., We are called upon to decide the following questions: (a) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can order automatic vacation of all interim orders of the High Courts of staying proceedings of civil and criminal cases on the expiry of a certain period? (b) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can direct the High Courts to decide pending cases in which interim orders of stay of proceedings have been granted on a day‑to‑day basis and within a fixed period?, The main submissions were canvassed by Shri Rakesh Dwivedi, the learned senior counsel appearing on behalf of the appellant in Criminal Appeal no. 3589 of 2023. Summarising the submissions: Automatic vacation of the interim order is in the nature of judicial legislation. This Court cannot engage in judicial legislation; Article 226 is a part of the basic structure of the Constitution of India, and it can neither be shut out nor whittled down by the exercise of powers under Articles 141 and 142; The High Court is also a constitutional Court which is not judicially subordinate to this Court; An order granting interim relief cannot be passed without an application of judicial mind. Application of mind is a prerequisite of judicial decision making. The absence of application of mind would render a decision arbitrary. Similarly, an order vacating interim relief cannot be passed without the application of judicial mind; If an interim order is to be passed, it should be initially for a short period so that there is an effective opportunity for the respondent to contest the same; Two Constitution Benches in the cases of Abdul Rehman Antulay & Ors. v. R.S. Nayak & Anr. and P. Rama Chandra Rao v. State of Karnataka held that it is not permissible for this Court to fix the time limit for completion of a trial; No such directions could have been issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India; Even under Article 226(3) of the Constitution, an interim order cannot be automatically vacated unless a specific application is made for vacating the interim order; A provision of automatic vacation of the Appellate Tribunal's stay order was incorporated in Section 254(2A) of the Income Tax Act, 1961. It provided that if an appeal preferred before the Appellate Tribunal was not disposed of within 365 days, the stay shall stand vacated even if the delay in disposing of the appeal is not attributable to the assessee. This Court struck down the provision in the case of Deputy Commissioner of Income Tax & Anr. v. Pepsi Foods Limited on the ground that it was manifestly arbitrary; The automatic vacation of interim relief is unjust, unfair and unreasonable., Shri Tushar Mehta, the learned Solicitor General appearing for the State of Uttar Pradesh, supported the submissions of Shri Dwivedi and submitted: As held by the Constitution Bench in the case of Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur, laws of procedure are grounded in principles of natural justice, which require that no decision can be reached behind the back of a person and in his absence; If the condition imposed by a provision of law to do a certain thing within a time frame is upon the institution and the consequences of that institution failing to comply fall upon someone who has no control over the institution, the provision of law will have to be construed as directive; An interim relief order is always granted after considering the three factors: prima facie case, the balance of convenience and irreparable injury to the aggrieved party. Once a finding is recorded regarding the entitlement of the applicant to get the order of stay, the order does not become automatically bad on the ground that it has lived for six months; In the decision of this Court in Kailash v. Nankhu & Ors., it has been held that the process of justice may be speeded up and hurried, but fairness, which is the basic element of justice, cannot be permitted to be buried. The discretion conferred upon the High Court cannot be taken away by exercising power under Article 142 of the Constitution of India., Shri Gaurav Mehrotra, the learned counsel appearing for the applicant in I.A. no. 252872 of 2023 in Criminal Appeal no. 3589 of 2023, in addition to the aforesaid submissions, relied upon a decision of the Constitution Bench in the case of Sanjeev Coke Manufacturing Company v. M/s. Bharat Coking Coal Ltd. & Anr. to contend that the Court should not decide any important question without there being a proper lis., Shri Vijay Hansaria, the learned senior counsel appearing for the Gauhati High Court Bar Association, made the following submissions: As regards the interpretation of clause (3) of Article 226 of the Constitution of India, various High Courts have taken different views on the issue of whether the provision for automatic vacation of stay is mandatory or directory. He urged that the provision will have to be held as directory; In Asian Resurfacing, the Court was dealing with a petition filed in the High Court arising from a prosecution under the PC Act. The cases of other categories were not the subject matter of challenge before this Court; The power under Article 142 of the Constitution of India can be exercised for doing complete justice in any case or matter pending before it. The issue of the duration of the order of stay did not arise in the case of Asian Resurfacing; A successful litigant whose application for stay is allowed by the High Court cannot be prejudiced only on the ground that the High Court does not hear the main case within six months for reasons beyond the control of the litigant., Shri Amit Pai, the learned counsel appearing for the appellant in one of the appeals, while adopting the submissions, relied upon a decision of this Court in the case of Deoraj v. State of Maharashtra & Ors. and contended that recourse is taken to the order of grant of interim relief as the conclusion of hearing on merits is likely to take some time. He submitted that the said object has not been considered in Asian Resurfacing. He urged that passing an interim order of stay is a judicial act. Therefore, such an order must be vacated only by a judicial act., Prof (Dr) Pankaj K. Phadnis, representing the intervenor Abhinav Bharat Congress, has filed written submissions. He has contended that he was not permitted to join the hearing through video conferencing. He has come out with the draft of Supreme Court Rules, 2024. His submissions, based on the draft, are entirely irrelevant., We have no manner of doubt that the direction issued in paragraph 36 of Asian Resurfacing regarding automatic vacation of stay has been issued in the exercise of the jurisdiction of the Supreme Court of India under Article 142 of the Constitution of India. Even the direction in paragraph 37 of conducting day‑to‑day hearing has been issued in exercise of the same jurisdiction. The effect of the direction issued in paragraph 36 is that the interim order of stay granted in favour of a litigant stands vacated without even giving him an opportunity of being heard, though there may not be any default on his part., Object of passing interim orders. Before we examine the questions, we need to advert to the object of passing orders of interim relief pending the final disposal of the main case. An order of interim relief is usually granted in the aid of the final relief sought in the case. An occasion for passing an order of stay of the proceedings normally arises when the High Court of Allahabad is dealing with a challenge to an interim or interlocutory order passed during the pendency of the main case before a trial or appellate Court. The High Court of Allahabad can grant relief of the stay of hearing of the main proceedings on being satisfied that a prima facie case is made out and that the failure to stay the proceedings before the concerned Court in all probability may render the remedy adopted infructuous. When the High Court of Allahabad passes an interim order of stay, though the interim order may not expressly say so, the three factors, viz. prima facie case, irreparable loss, and balance of convenience, are always in the back of the judges' minds. Though interim orders of stay of proceedings cannot be routinely passed as a matter of course, it cannot be said that such orders can be passed only in exceptional cases. Nevertheless, the High Courts, while passing orders of stay in serious cases like offences under the PC Act or serious offences against women and children, must be more cautious and circumspect. An occasion for passing an order of stay of proceeding arises as it is not possible for the High Court of Allahabad to take up the case for final hearing immediately. While entertaining a challenge to an order passed in a pending case, if the pending case is not stayed, the trial or appellate Court may decide the pending case, rendering the remedy before the High Court ineffective. Such a situation often leads to the passing of an order of remand. In our legal system, which is facing a docket explosion, an order of remand should be made only as a last resort. The orders of remand not only result in more delays but also increase the cost of litigation. Therefore, to avoid the possibility of passing an order of remand, the grant of stay of proceedings is called for in many cases., High Court's power to vacate or modify interim relief. When a High Court of Allahabad grants a stay of the proceedings while issuing notice without giving an opportunity of being heard to the contesting parties, it is not an interim order, but it is an ad‑interim order of stay. It can be converted into an interim order of stay only after an opportunity of being heard is granted on the prayer for interim relief to all the parties to the proceedings. Ad‑interim orders, by their very nature, should be of a limited duration. Therefore, such orders do not pose any problem., The High Courts of Allahabad are always empowered to vacate or modify an order of interim relief passed after hearing the parties on the following, amongst other grounds: (a) If a litigant, after getting an order of stay, deliberately prolongs the proceedings either by seeking adjournments on unwarranted grounds or by remaining absent when the main case in which interim relief is granted is called out for hearing before the High Court with the object of taking undue advantage of the order of stay; (b) The High Court finds that the order of interim relief is granted as a result of either suppression or misrepresentation of material facts by the party in whose favour the interim order of stay has been made; and (c) The High Court finds that there is a material change in circumstances requiring interference with the interim order passed earlier. In a given case, a long passage of time may bring about a material change in circumstances. These grounds are not exhaustive. There can be other valid grounds for vacating an order of stay., Whether an interim order can come to an end automatically only due to the lapse of time. An interim order of stay can come to an end: (a) By disposal of the main case by the High Court of Allahabad, in which the interim order has been passed. The disposal can be either on merits or for default or other reasons such as the abatement of the case; or (b) by a judicial order vacating interim relief, passed after hearing the contesting parties on the available grounds, some of which we have already referred to by way of illustration. Elementary principles of natural justice, which are well recognised in our jurisprudence, mandate that an order of vacating interim relief or modification of the interim relief is passed only after hearing all the affected parties. An order of vacating interim relief passed without hearing the beneficiary of the order is against the basic tenets of justice. Application of mind is an essential part of any decision‑making process. Therefore, without application of mind, an interim order of stay cannot be vacated only on the ground of lapse of time when the litigant is not responsible for the delay. An interim order lawfully passed by a Court after hearing all contesting parties is not rendered illegal only due to the long passage of time. Moreover, the directions issued in Asian Resurfacing regarding automatic vacation of interim orders of stay passed by all High Courts are applicable, irrespective of the merits of individual cases. If a High Court concludes after hearing all the concerned parties that a case was made out for the grant of stay of proceedings of a civil or criminal case, the order of stay cannot stand automatically set aside on expiry of the period of six months only on the ground that the High Court could not hear the main case. If such an approach is adopted, it will be completely contrary to the concept of fairness. If an interim order is automatically vacated without any fault on the part of the litigant only because the High Court cannot hear the main case, the maxim actus curiae neminem gravabit will apply. No litigant should be allowed to suffer due to the fault of the Court. If that happens, it is the bounden duty of the Court to rectify its mistake., In the subsequent clarification in the case of Asian Resurfacing, a direction has been issued to the Trial Courts to immediately fix a date for hearing after the expiry of the period of six months without waiting for any formal order of vacating stay passed by the High Court. This gives an unfair advantage to the respondent in the case before the High Court. Moreover, it adversely affects a litigant's right to the remedies under Articles 226 and 227 of the Constitution of India. Such orders virtually defeat the right of a litigant to seek and avail of statutory remedies such as revisions, appeals, and applications under Section 482 of the Code of Criminal Procedure, 1973 and the remedies under the Code of Civil Procedure, 1908. All interim orders of stay passed by all High Courts cannot be set at naught by a stroke of pen only on the ground of lapse of time., The legislature attempted to provide for an automatic vacation of stay granted by the Income Tax Appellate Tribunal by introducing the third proviso to Section 254(2A) of the Income Tax Act. It provided that if an appeal in which the stay was granted was not heard within a period of 365 days, it would amount to the automatic vacation of stay. In the case of Pepsi Foods Limited, this Court held that a provision automatically vacating a stay was manifestly arbitrary and, therefore, violative of Article 14 of the Constitution of India. Paragraphs 20 and 22 of the said decision read thus: Judged by both these parameters, there can be no doubt that the third proviso to Section 254(2‑A) of the Income Tax Act, introduced by the Finance Act, 2008, would be both arbitrary and discriminatory and, therefore, liable to be struck down as offending Article 14 of the Constitution of India. First and foremost, as has correctly been held in the impugned judgment, unequals are treated equally in that no differentiation is made by the third proviso between the assessees who are responsible for delaying the proceedings and assessees who are not so responsible. This is a little peculiar in that the legislature itself has made the aforesaid differentiation in the second proviso to Section 254(2‑A) of the Income Tax Act, making it clear that a stay order may be extended up to a period of 365 days upon satisfaction that the delay in disposing of the appeal is not attributable to the assessee. We have already seen as to how, as correctly held by Narang Overseas (P) Ltd. v. Income Tax Appellate Tribunal, the second proviso was introduced by the Finance Act, 2007 to mitigate the rigour of the first proviso to Section 254(2‑A) of the Income Tax Act in its previous avatar. Ordinarily, the Appellate Tribunal, where possible, is to hear and decide appeals within a period of four years from the end of the financial year in which such appeal is filed. It is only when a stay of the impugned order before the Appellate Tribunal is granted, that the appeal is required to be disposed of within 365 days. So far as the disposal of an appeal by the Appellate Tribunal is concerned, this is a directory provision. However, so far as vacation of stay on expiry of the said period is concerned, this condition becomes mandatory as far as the assessee is concerned. Since the object of the third proviso to Section 254(2‑A) of the Income Tax Act is the automatic vacation of a stay that has been granted on the completion of 365 days, whether or not the assessee is responsible for the delay caused in hearing the appeal, such object being itself discriminatory, in the sense pointed out above, is liable to be struck down as violating Article 14 of the Constitution of India. Also, the said proviso would result in the automatic vacation of a stay upon expiry of 365 days even if the Appellate Tribunal could not take up the appeal in time for no fault of the assessee. Further, the vacation of stay in favour of the Revenue would ensue even if the Revenue is itself responsible for the delay in hearing the appeal. In this sense, the said proviso is also manifestly arbitrary being a provision which is capricious, irrational and disproportionate so far as the assessee is concerned., Scope of exercise of powers under Article 142 of the Constitution. The directions issued in Asian Resurfacing are obviously issued in the exercise of jurisdiction of the Supreme Court of India under Article 142 of the Constitution, which confers jurisdiction on this Court to pass such a decree or make such order necessary for doing complete justice in any case or matter pending before it. In Asian Resurfacing, the first issue was, whether an order framing of charge in a case under the PC Act was in the nature of an interlocutory order.
|
id_1640
| 1
|
The second question concerned the scope of powers of the High Court to stay proceedings of the trial under the Prevention of Corruption Act while entertaining a challenge to an order of framing charge. The question regarding the duration of the interim orders passed by the High Courts in various other proceedings did not specifically arise for consideration in the case of Asian Resurfacing. The provisions of Article 142 of the Constitution of India are meant to further the cause of justice and to secure complete justice. Directions exercised under Article 142 cannot be issued to defeat justice. The jurisdiction under Article 142 cannot be invoked to pass blanket orders setting aside a very large number of interim orders lawfully passed by all the High Courts, and that too without hearing the contesting parties. The jurisdiction under Article 142 can be invoked only to deal with extraordinary situations for doing complete justice between the parties before the Supreme Court of India., While dealing with the scope of power under Article 142, a Constitution Bench of the Supreme Court of India in the case of Prem Chand Garg & Anr. v. the Excise Commissioner, Uttar Pradesh and others, in paragraphs 12 and 13, held that the power conferred on the Supreme Court of India under Article 142(1) is not comparable to the privileges claimed by members of State Legislatures under the latter part of Article 194(3), and therefore there can be no question of striking down an order passed by the Supreme Court of India under Article 142(1) on the ground that it is inconsistent with Article 32., The Solicitor General’s argument that the order for security infringes the fundamental right guaranteed by Article 32 and that under Article 142(1) the Supreme Court of India has jurisdiction to pass such an order is misconceived. The rights claimable under the latter part of Article 194(3) are not subject to Article 19(1)(a) because they are expressly provided for by a constitutional provision. A law passed by a State Legislature concerning the privileges of its members must be consistent with Article 19(1)(a) and any provision contravening fundamental rights guaranteed by Part III would be struck down as unconstitutional. Similarly, a law made by Parliament under Article 145(1) that corresponds to the provisions of Order 25 Rule 1 or Order 41 Rule 10 would be struck down for restricting the fundamental right guaranteed by Article 32. The position of an order made either under the rules framed by the Supreme Court of India or under its jurisdiction under Article 142(1) can be no different. An order made by the Supreme Court of India to do complete justice between the parties must be consistent with the fundamental rights guaranteed by the Constitution and cannot be inconsistent with the substantive provisions of the relevant statutory laws. Therefore, it is not possible to hold that Article 142(1) confers upon the Supreme Court of India powers which can contravene the provisions of Article 32., The Constitution Bench also observed that the wide powers given to the Supreme Court of India for doing complete justice between the parties can be used, for instance, to add parties to the proceedings, admit additional evidence, remand the case, or allow a new point to be taken for the first time. In exercising these powers, the Supreme Court of India would not be bound by the relevant procedural provisions if it is satisfied that a departure from the said procedure is necessary to do complete justice between the parties., Another Constitution Bench in the case of Supreme Court Bar Association v. Union of India and others, in paragraphs 47 and 48, held that the plenary powers of the Supreme Court of India under Article 142 are inherent in the Court and are complementary to those powers specifically conferred by various statutes, though not limited by those statutes. These powers exist independent of the statutes to do complete justice between the parties and are of very wide amplitude, forming a separate and independent basis of jurisdiction. They are a residual source of power which the Supreme Court of India may draw upon whenever it is just and equitable to do so, particularly to ensure due process of law and to prevent clogging or obstruction of the stream of justice. However, these powers are curative in nature and cannot be used to ignore the substantive rights of a litigant or to supplant substantive law applicable to the case. The Supreme Court of India cannot use Article 142 to build a new edifice by ignoring express statutory provisions, for example, punishing a contemner advocate by suspending his licence to practice, a power statutorily available only to the Bar Council of India, is not permissible under Article 142., The construction of Article 142 must be functionally informed by its salutary purpose to do complete justice between the parties. The Supreme Court of India has the power to make such order as is necessary for doing complete justice in any cause or matter pending before it, but it must set limits for itself and ordinarily cannot disregard a statutory provision governing a subject, except perhaps to balance equities between conflicting claims. The Supreme Court of India is not a court of restricted jurisdiction of only dispute‑settling; it is a law‑maker and a problem‑solver in nebulous areas, but it cannot altogether ignore substantive statutory provisions while making an order under Article 142., It is very difficult to exhaustively lay down the parameters for the exercise of powers under Article 142 of the Constitution of India due to the nature of such powers. However, a few important parameters relevant to the issues are: (i) the jurisdiction can be exercised to do complete justice between the parties before the Supreme Court of India and cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour who are not parties to the proceedings; (ii) Article 142 does not empower the Supreme Court of India to ignore the substantive rights of the litigants; (iii) while exercising the jurisdiction under Article 142, the Supreme Court of India can issue procedural directions to the courts for streamlining procedural aspects and ironing out creases in procedural laws to ensure expeditious and timely disposal of cases, but it may not affect the substantive rights of litigants who are not parties to the case; (iv) the power of the Supreme Court of India under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence., A High Court is also a constitutional Court. It is well settled that it is not judicially subordinate to the Supreme Court of India. In the case of Tirupati Balaji Developers (P) Ltd. & others v. State of Bihar & others, the Supreme Court of India explained that under the constitutional scheme both the Supreme Court of India and the High Courts are courts of record, and the High Court is not subordinate to the Supreme Court of India. The High Court has jurisdiction to issue all prerogative writs conferred by Article 226 of the Constitution for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose, whereas the original jurisdiction of the Supreme Court of India to issue prerogative writs is confined to the enforcement of fundamental rights and certain matters such as presidential elections or inter‑State disputes. The High Court exercises power of superintendence under Article 227 over all subordinate courts and tribunals; the Supreme Court of India has not been conferred with any power of superintendence. While the High Court has larger jurisdiction, the Supreme Court of India remains the elder brother in the hierarchy, with certain provisions giving it a superior place, such as appellate jurisdiction in all civil and criminal matters, the power to transfer cases under Article 139‑A, the binding nature of its law under Article 141, and the duty of all authorities under Article 144 to act in aid of the Supreme Court of India., The Supreme Court of India has dealt with the jurisdiction of the High Courts in the case of L. Chandra Kumar v. Union of India and others. It held that the power of judicial review over legislative action vested in the High Courts under Article 226 and in the Supreme Court of India under Article 32 is an integral and essential feature of the Constitution, forming part of its basic structure, and that the power of the High Courts to exercise judicial superintendence over the decisions of all courts and tribunals within their respective jurisdictions is also part of the basic structure. A situation where the High Courts are divested of all other judicial functions apart from constitutional interpretation must be avoided., The power of the High Court under Article 227 to have judicial superintendence over all courts within its jurisdiction includes the power to stay proceedings before such courts. By a blanket direction in the exercise of power under Article 142, the Supreme Court of India cannot interfere with the jurisdiction conferred on the High Court to grant interim relief by limiting its jurisdiction to pass interim orders valid only for six months at a time. Imposing such constraints on the High Court would also dent its jurisdiction under Article 226, which is an essential feature of the basic structure of the Constitution., The Supreme Court of India expressed reservations about answering academic or hypothetical questions, particularly when serious constitutional issues are involved. In the case of Sanjeev Coke Manufacturing Company, the Constitution Bench held that judges are not authorised to make disembodied pronouncements on serious and cloudy issues of constitutional policy without a proper lis between parties. It is inexpedient for the Supreme Court of India to delve into problems which do not arise and to express opinion thereon. In Asian Resurfacing, there was no lis before the Supreme Court of India arising out of the orders of stay granted in different categories of cases pending before the various High Courts; the Court was dealing with a case under the Prevention of Corruption Act and thus attempted to delve into an issue which did not arise for consideration., Clause (3) of Article 226 of the Constitution of India reads: Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made in any proceedings relating to a petition under clause (1), without (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the said next day, stand vacated. On its plain reading, clause (3) is applicable only when an interim relief is granted without furnishing a copy of the writ petition along with supporting documents to the opposite party and without hearing the opposite party. Assuming that clause (3) is not directory, it provides for an automatic vacation of interim relief only if the aggrieved party makes an application for vacating the interim relief and the application is not heard within the specified time. Clause (3) does not apply when an interim order in a writ petition under Article 226 is passed after service of a copy of the writ petition on all concerned parties and after giving them an opportunity of being heard; it applies only to ex‑parte ad interim orders., The net effect of the directions issued in paragraphs 36 and 37 of Asian Resurfacing is that the petition in which the High Court has granted a stay of the proceedings of the trial must be decided within a maximum period of six months, after which the interim stay will be vacated automatically, rendering the pending case infructuous. The Supreme Court of India directed that the challenge to the order of framing charge should be entertained in a rare case, and when the stay is granted, the case should be decided by the High Court on a day‑to‑day basis so that the stay does not operate for an unduly long period., The Constitution Benches of the Supreme Court of India have considered the issue of fixing timelines for disposal of cases in the cases of Abdul Rehman Antulay and P. Ramachandra Rao. In Abdul Rehman Antulay, the Court observed that speedy trial is a relative concept and it is not possible to lay down any time schedules for conclusion of criminal proceedings because of varying nature of offences, number of accused, witnesses, workload, and systemic delays. The Court noted that imposing a universal time‑limit would amount to legislation, which is beyond judicial power. In P. Ramachandra Rao, the Court held that prescribing periods of limitation at which the trial court must terminate proceedings amounts to legislation and cannot be done by judicial directives, although binding directions may be issued for enforcing the law and for specific cases., In practice, cases in which a stay of proceedings of civil or criminal trials is granted should be disposed of expeditiously by the High Courts, but the reality is that High Courts, especially those of larger states, are flooded with petitions under Article 227 for challenging interim orders, petitions under Section 482 of the Criminal Procedure Code for challenging orders in criminal proceedings, and revisional petitions under the Civil Procedure Code and the Criminal Procedure Code. Daily cause lists of individual benches often contain more than a hundred matters, leading to long life of cases once a stay is granted. High Courts also handle a huge volume of regular appeals, criminal appeals against acquittal and conviction, bail petitions, writ petitions, matrimonial disputes, and appeals against decrees, involving senior citizens and multiple generations of litigants. It is unrealistic to expect High Courts to prioritize only stay cases while ignoring other urgent matters., The situation in trial and district courts is even worse. In 2002, the Supreme Court of India, in All India Judges Association & others v. Union of India & others, directed that the judge‑to‑population ratio within twenty years should be 50 per million, but even today the ratio is far below 25 per million. The directions issued in Imtiyaz Ahmed v. State of Uttar Pradesh & others have not been complied with by the States in increasing the judge strength of trial and district courts. Pendency of cases in trial courts is staggering, and many statutes such as the Hindu Marriage Act, 1955, the Protection of Women from Domestic Violence Act, 2005, and the Negotiable Instruments Act, 1881 prescribe specific time limits for disposal of cases, which are not being met due to huge filings and pendency. Section 309 of the Criminal Procedure Code requires criminal cases to be heard on a day‑to‑day basis once evidence recording commences, and for certain serious offences against women the cases must be decided within two months of filing the charge sheet, but the courts are unable to implement these provisions. Therefore, in the ordinary course, the constitutional courts should not exercise the power to direct disposal of a case before any district or trial court within a specific time span.
|
id_1640
| 2
|
In many cases, while rejecting a bail petition, a time limit is fixed for disposal of trial on the ground that the petitioner has undergone incarceration for a long time without realizing that the concerned trial court may have many pending cases where the accused are in jail for a longer period. The same logic will apply to the cases pending before the High Courts. When we exercise such power of directing High Courts to decide cases in a time‑bound manner, we are not aware of the exact position of pendency of old cases in the said courts, which require priority to be given. Bail petitions remain pending for a long time. There are appeals against conviction pending where the appellants have been denied bail. Therefore, Constitutional Courts should not normally fix a time‑bound schedule for disposal of cases pending in any court. The pattern of pendency of various categories of cases pending in every court, including High Courts, is different. The situation at the grassroots level is better known to the judges of the concerned courts. Therefore, the issue of giving out‑of‑turn priority to certain cases should be best left to the concerned courts. The orders fixing the outer limit for the disposal of cases should be passed only in exceptional circumstances to meet extraordinary situations., There is another important reason for adopting the said approach. Not every litigant can easily afford to file proceedings in the Constitutional Courts. Those litigants who can afford to approach the Constitutional Courts cannot be allowed to take undue advantage by getting an order directing out‑of‑turn disposal of their cases while all other litigants patiently wait in the queue for their turn to come. The Courts, superior in the judicial hierarchy, cannot interfere with the day‑to‑day functioning of the other courts by directing that only certain cases should be decided out of turn within a time frame. In a sense, no court of law is inferior to another. The Supreme Court of India is not superior to the High Courts in the judicial hierarchy. Therefore, the judges of the High Courts should be allowed to set their priorities on a rational basis. Thus, as far as setting the outer limit is concerned, it should be best left to the concerned courts unless there are very extraordinary circumstances., Procedure to be adopted by High Courts while passing interim order of stay of proceedings and for dealing with the applications for vacating interim stay. At the same time, we cannot ignore that once a High Court stays a trial, it takes a very long time for the High Court to decide the main case. To avoid any prejudice to the opposite parties, while granting ex‑parte ad interim relief without hearing the affected parties, the High Courts should normally grant ad interim relief for a limited duration. After hearing the contesting parties, the High Court may or may not confirm the earlier ad interim order. Ad interim relief, once granted, can be vacated or affirmed only after application of mind by the concerned court. Hence, the courts must give necessary priority to the hearing of the prayer for interim relief where ad interim relief has been granted. Though the High Court is not expected to record detailed reasons while dealing with the prayer for the grant of stay or interim relief, the order must give sufficient indication of the application of mind to the relevant factors., An interim order passed after hearing the contesting parties cannot be vacated by the High Court without giving sufficient opportunity of being heard to the party whose prayer for interim relief has been granted. Even if interim relief is granted after hearing both sides, as observed earlier, the aggrieved party is not precluded from applying for vacating the same on the available grounds. In such a case, the High Court must give necessary priority to the hearing of applications for vacating the stay, if the main case cannot be immediately taken up for hearing. Applications for vacating interim relief cannot be kept pending for an inordinately long time. The High Courts cannot take recourse to the easy option of directing that the same should be heard along with the main case. The same principles will apply where ad interim relief is granted. If an ad interim order continues for a long time, the affected party can always apply for vacating ad interim relief. The High Court is expected to take up even such applications on a priority basis. If an application for vacating ex‑parte ad interim relief is filed on the ground of suppression of facts, the same must be taken up at the earliest., Hence, with greatest respect to the Bench which decided the case, we are unable to concur with the directions issued in the decision in the case of Asian Resurfacing. We hold that there cannot be automatic vacating of stay granted by the High Court. We do not approve the direction issued to decide all the cases in which an interim stay has been granted on a day‑to‑day basis within a time frame. We hold that such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India. We answer both the questions framed in paragraph five above in the negative., Subject to what we have held earlier, we summarise our main conclusions as follows: a. A direction that all the interim orders of stay of proceedings passed by every High Court automatically expire only by reason of lapse of time cannot be issued in the exercise of the jurisdiction of the Supreme Court of India under Article 142 of the Constitution of India; b. Important parameters for the exercise of the jurisdiction under Article 142 of the Constitution of India which are relevant for deciding the reference are as follows: (i) The jurisdiction can be exercised to do complete justice between the parties before the court. It cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour who are not parties to the proceedings before the Supreme Court of India; (ii) Article 142 does not empower the Supreme Court of India to ignore the substantive rights of the litigants; (iii) While exercising the jurisdiction under Article 142 of the Constitution of India, the Supreme Court of India can always issue procedural directions to the courts for streamlining procedural aspects and ironing out the creases in the procedural laws to ensure expeditious and timely disposal of cases. However, while doing so, the Supreme Court of India cannot affect the substantive rights of those litigants who are not parties to the case before it. The right to be heard before an adverse order is passed is not a matter of procedure but a substantive right; and (iv) The power of the Supreme Court of India under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence. c. Constitutional Courts, in the ordinary course, should refrain from fixing a time‑bound schedule for the disposal of cases pending before any other courts. Constitutional Courts may issue directions for the time‑bound disposal of cases only in exceptional circumstances. The issue of prioritising the disposal of cases should be best left to the decision of the concerned courts where the cases are pending; and d. While dealing with the prayers for the grant of interim relief, the High Courts should take into consideration the guidelines incorporated in paragraphs thirty‑four and thirty‑five above., We clarify that in the cases in which trials have been concluded as a result of the automatic vacating of stay based only on the decision in the case of Asian Resurfacing, the orders of automatic vacating of stay shall remain valid., The reference is answered accordingly. We direct the Registry to place the pending petitions before the appropriate benches for expeditious disposal. Doctor Dhananjaya Y. Chandrachud, Justice Abhay S. Oka, Justice J. B. Pardiwala, Justice Manoj Misra. New Delhi; February 29, 2024. Suo Moto Letter Petition (Criminal) Numbers 13284‑13289 of 2023 and Criminal Appeal Diary Number 49052 of 2023., Concurring with the opinion expressed by my brother Justice Oka for himself and other puisne judges, including the Honourable Chief Justice, I would like to add that in Asian Resurfacing of Road Agency Private Limited & Anr. versus Central Bureau of Investigation, the Supreme Court while deciding the issues arising therein observed and directed that where a challenge to an order framing charge is entertained and stay is granted, the matter must be decided on a day‑to‑day basis so that the stay may not continue for an unduly long time. It was further observed that though no mandatory time limit may be fixed for deciding such a challenge, the stay order may not normally exceed two to three months or a maximum of six months unless it is extended by a specific speaking order. Further directions were issued that in all pending matters before the High Court or other courts relating to the Prevention of Corruption Act or all other civil or criminal cases where stay is operating in pending trials, it will automatically lapse after six months unless a speaking order extending the same is produced before the court. The trial court may, on expiry of the above period, resume the proceedings without waiting for any intimation unless an express order extending the stay is produced before the court., The above directions in Asian Resurfacing issued in exercise of the power of doing complete justice under Article 142 of the Constitution of India are analogous to the constitutional provision contained in clause (3) of Article 226 of the Constitution of India, which was inserted with effect from 1 August 1979 vide the Constitution (Forty‑fourth Amendment) Act, 1978. It reads as follows: (3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacating of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the said next day, stand vacated., No doubt, the above provision is in respect to petitions filed before the High Court invoking the extraordinary jurisdiction of the court and is not meant to be applied specifically to other proceedings; nonetheless, the principles behind the said provision can always be extended to other proceedings as has been done in Asian Resurfacing. It is worth noting that wherever under a statute any such time limit has been prescribed or is fixed for deciding a particular nature of proceeding, it has been held to be directory in nature rather than mandatory. This appears to be the position with regard to the applicability of Article 226(3) of the Constitution of India., It is well recognised that no one can be made to suffer on account of any mistake or fault of the court, which means that even delay on the part of the court in deciding the proceedings or any application therein would not be detrimental to any of the parties to the litigation, much less to the party in whose favour an interim stay order is passed., It is settled in law that the grant of an interim stay order ought to be ordinarily by a speaking order and therefore, as a necessary corollary, a stay order once granted cannot be vacated otherwise than by a speaking order, especially when its extension also requires reasons to be recorded., It is noticeable that under Article 226(3) of the Constitution of India, the automatic vacating of the stay order envisages making an application to the High Court for the vacating of the interim stay order. Therefore, filing an application for vacating the stay order is a sine qua non for triggering the automatic vacating of the stay order under Article 226(3) if such an application is not decided within the prescribed time of two weeks., In other words, applying the above analogy or principle, the stay order granted in any proceedings would not automatically stand vacated on the expiry of a particular period until and unless an application to that effect has been filed by the other side and is decided following the principles of natural justice by a speaking order., Sometimes, in quest of justice we end up doing injustice. Asian Resurfacing is a clear example of the same. Such a situation created ought to be avoided in the normal course or, if it arises, be remedied at the earliest. In doing so, we have to adopt a practical and more pragmatic approach rather than a technical one which may create more problems, burdening the courts with superfluous or useless work. It is well said that useless work drives out the useful work. Accordingly, it is expedient in the interest of justice to provide that a reasoned stay order once granted in any civil or criminal proceedings, if not specified to be time‑bound, would remain in operation till the decision of the main matter or until and unless an application is moved for its vacating and a speaking order is passed adhering to the principles of natural justice, either extending, modifying, varying or vacating the same., The reference made to the Supreme Court of India is answered and disposed of accordingly.
|
id_1641
| 0
|
Civil Appeal No(s). 10856/2016 Date: 27-01-2022. These applications were called on for hearing today. Advocate Pawanshree Agrawal, Additional Counsel. Advocate Varun K. Chopra, Advocate for Appellant(s). Senior Advocate Siddhartha Dave, Senior Advocate Haresh Jagtiani, Senior Advocate Vishal Gosain, Advocate Anuroop Chakravarti, Advocate Ranjeeta Rohatgi, Assistant Officer of Record. Assistant Officer of Record Neeha Nagpal, Advocate Samten Doma, Advocate N. Venkataraman, Additional Solicitor General. Assistant Officer of Record Anubha Agrawal, Assistant Officer of Record Deepak Goel, Assistant Officer of Record for Respondent(s) N. Venkataraman, Additional Solicitor General. Assistant Officer of Record Anubha Agrawal, Assistant Officer of Record Madhavi Divan, Additional Solicitor General. Assistant Officer of Record Shradha Deshmukh, Advocate Suhashini Sen, Advocate Chinmayee Chandra, Advocate Siddhant Kohli, Advocate Rajan Kr Chourasia, Advocate Prashant Singh B, Advocate Amrish Kumar, Advocate Ayush Puri, Advocate Ruchi Kohli, Advocate Nidhi Khanna, Advocate Praveena Gautam, Advocate Shekhar Vyas, Advocate Santosh Kumar, Advocate Sughosh Subramanyam, Advocate Ankur Talwar, Advocate Vaishali Verma, Advocate Raj Bahadur Yadav, Assistant Officer of Record. Assistant Officer of Record Arvind Kumar Sharma, Assistant Officer of Record Anish Kr. Gupta, Advocate Huzefa Ahmadi, Senior Advocate Aman Raj Gandhi, Assistant Officer of Record Parthasarathy Bose, Advocate Aditya Ladha, Advocate Rohan, Advocate Sajan Poovayya, Senior Advocate Vikram Hegde, Advocate Shantanu Lakhotia, Advocate Hima Lawrence, Assistant Officer of Record Pratibhanu Kharola, Advocate Sharan Balakrishna, Advocate Vinay Navare, Senior Advocate Abhishek Aggarwal, Advocate Parth Davar, Advocate Ravi Panwar, Assistant Officer of Record Nikhil Nayyar, Senior Advocate Pritha Srikumar, Assistant Officer of Record Naveen Hegde, Advocate Mansi Binjrajka, Advocate Anil Grover, Senior Additional Advocate General. Additional Advocate General Ajay Bansal, Additional Advocate General Noopur Singhal, Advocate Rahul Khurana, Advocate Sanjay Kumar Visen, Assistant Officer of Record Bhanwar Jadon, Advocate Satish Kumar, Advocate Babita Mishra, Advocate Adira A Nair, Advocate Amit Gupta, Advocate Gaurav Yadava, Advocate Veena Bansal, Advocate Jaikriti S. Jadeja, Assistant Officer of Record Malvika Kapila, Advocate Swarupama Chaturvedi, Assistant Officer of Record Tanwangi Shukla, Advocate Gopal Sankaranarayanan, Senior Advocate Abhay Singh, Advocate Ankita Agarwal, Advocate Kaustubh Shukla, Assistant Officer of Record Aditi Gupta, Advocate Brijesh Kumar Tamber, Assistant Officer of Record Yashu Rustagi, Advocate., Upon hearing the counsel the Supreme Court of India made the following. An affidavit of compliance has been filed on behalf of the Union Ministry of Home Affairs purporting to set out the steps which have been taken to comply with the report which was submitted by the Commissioner of Police, Delhi for upgrading the security at Tihar Jail in order to obviate incidents such as the one which has been noticed by the Court in the present case. The affidavit filed by the Ministry of Home Affairs relies on the contents of the Model Prison Manual. The Ministry of Home Affairs has stated that the recommendations which have been made in the report submitted by the Commissioner of Police are worthy of acceptance and should be implemented. The issue is how they should be implemented and whether any steps have been taken in that regard., Adequate steps are yet to be taken to implement the recommendations of the Commissioner of Police despite the previous directions of this Court., As an instance, three specific issues can be adverted to: Installation of Cell Phone Jammers: In paragraph 38.21 of the response which has been provided by the Director General, Prisons, it has been stated that a Committee of Experts formed by the Secretary Security, Cabinet Secretariat recommended that Dominant Tower Technology or T-HCBS be used to block mobile signals in jail complexes. On an experimental basis, the technology was put to use in Mandoli Jail Complex in January 2020 and three dominant towers have been erected in Tihar Complex. It has been stated that the results of these towers have been good, but regular monitoring is required by the Telecom Service Providers. The Department of Telecommunications has proposed a draft Standard Operating Procedure which is under consideration of the Secretary Security. Full Body X‑ray Scanners: Delhi Prisons is stated to be in the process of floating tenders for purchasing two X‑ray based full body scanners and a No Objection Certificate has been obtained from the Atomic Energy Regulatory Board. Installation of CCTV Cameras: On this aspect, it has been stated that 7,000 CCTV cameras have been installed in sixteen jails, recording thirty days movements. There are two central control rooms, one at Tihar Prison Headquarters and one at Mandoli Headquarters., The Ministry of Home Affairs, in its affidavit, has stated that prisons are a State subject and, hence, directions have been issued to the Delhi Government to ensure compliance. Additional Solicitor General Madhavi Divan has read through the contents of the affidavit and has submitted that it is now for the Delhi Government to take necessary steps., From the submissions which have been urged before the Court, it emerges that the Director General, Prisons is an official sent on deputation from Delhi Police. The Superintendents of Police of Tihar Jail are, generally speaking, officers drawn from the Delhi, Arunachal Pradesh, Nagaland, and Mizoram (DANIC) Cadre. Additional Solicitor General K M Nataraj appearing on behalf of Delhi Police states that though the Director General, Prisons is an officer on deputation from Delhi Police, decisions have to be taken by the Delhi Government. Counsel appearing on behalf of the Delhi Government is absent during the course of the hearing., In this backdrop, the shifting of responsibility between the Ministry of Home Affairs, the Director General, Prisons and the Delhi Government has to be redressed by effective coordination and expeditious decision making. The report of the Commissioner of Police will gather dust unless effective steps are taken to implement it., We accordingly direct that, within a period of one week from today, a meeting shall be convened between: a Secretary level officer of the Ministry of Home Affairs; the Director General, Prisons at Tihar Jail; and the Chief Secretary, Government of the National Capital Territory. The Commissioner of Police shall attend the meeting as an invitee since the recommendations which have been contained in his report are to be duly implemented., A meeting shall be held, within a period of a week. Concrete decisions towards implementing the report of the Commissioner of Police shall be taken and a joint report shall be filed on affidavit indicating the manner in which implementation would be carried out providing timelines, the steps which shall be taken and assigning responsibility for compliance. Once a commitment is made to the Supreme Court of India, we shall enforce compliance scrupulously., A joint affidavit prepared by the three officers named above shall be submitted before this Supreme Court of India., List the matters for this purpose on 17 February 2022 at 3.00 pm., Civil Appeal No 10856/2016 and SLP (Criminal) Nos 5978-5979/2017. List the following applications on 3 February 2022 at 2 pm: IA Nos 88960/2020 & 47525/2021 (M/s Devas Global); IA No. 135050/2021 Application for directions on behalf of the first and second petitioners and IA 5431 and 5432 of 2022 applications for impleadment and directions; IA Nos 57580/2021 & 57581/2021 (APIIC); IA Nos 83599/2020, 72200/2018, 72138/2018 & 72189/2018 in SLP (Criminal) Nos 5978-5979/2017 (Wisdom World Developers); IA Nos 96264 & 96157 of 2021, 100079 & 100070 of 2021 and 152952 & 153005 of 2021 (IAs of contractors).
|
id_1642
| 0
|
Ibrahim Khwaja Miya Sayyed Raju, Applicant, versus the State of Maharashtra, Respondent. Ms. Sana Raees Khan with Mr. Aniket Pardeshi for the Applicant. Mr. R. M. Pethe, Additional Public Prosecutor for the Respondent State. Mr. Bhoye, Assistant Public Prosecutor, Assistant Narcotics Control, Bandra Unit, present., At the outset learned counsel for the Applicant seeks leave to amend prayer clause (a) to give details of the NDPS case. Leave is granted. Amendment to be carried out forthwith., This is an application under Section 439 of the Code of Criminal Procedure filed by the aforesaid Applicant, who is facing trial in Narcotic Drugs and Psychotropic Substances Special Case No. 617 of 2021, Sessions Court, Mumbai, for offences punishable under Sections 8(c) and 22(c) of the Narcotic Drugs and Psychotropic Substances Act, 1985., The case of the prosecution in brief is that on 24 November 2020 at about 15:15 the complainant found the Applicant moving around in a suspicious manner with two travel bags. When the police team approached him, he tried to run away from the place of the incident. He was caught and his travel bags were seized and opened in the presence of panchas. It is stated that the accused was carrying ten kilograms of ganja in one bag and eleven kilograms of ganja in the other bag. A sample of ganja was drawn in the presence of the panchas and was sent to the forensic laboratory. The forensic report classifies the sample as ganja within the definition of Section 2(iii)(b) of the Narcotic Drugs and Psychotropic Substances Act., Learned counsel for the Applicant states that apart from the flowering buds, the investigating officer has also attached stalks, leaves and seeds. She submits that leaves, seeds and stalks cannot be considered as ganja unless accompanied by the tops. She has relied upon the decisions of the learned Single Judge of the Sessions Court, Mumbai in Rahul Bhimrao Pawar versus the State of Maharashtra (Bail Application No. 2977 of 2021), Kunal Kadu versus Union of India (ABA No. 2173 of 2022), Hari Mahadu Walse versus the State of Maharashtra (Bail Application No. 2299 of 2019) and Amit Shankar Devmare versus the State of Maharashtra (Bail Application No. 4203 of 2021)., Learned counsel for the Applicant contends that the actual flowering or fruiting tops were not separately weighed and this raises a doubt whether the ganja seized from the Applicant was of commercial quantity. She further submits that the police had not drawn a sample from each of the travel bags but had mixed the substance from both bags and thereafter drawn the sample, which was sent to the Central Forensic Science Laboratory for examination. She has relied upon the decision of the Delhi High Court in Ram Bharose versus State (Government of NCT of Delhi) (Bail Application No. 1623 of 2022) to substantiate her contention that the samples sent to the Central Forensic Science Laboratory were not representative and that mixing the contents of both travel bags before drawing from the bags loses the sanctity of the entire process., Per contra, Mr. Pethe, learned Additional Public Prosecutor for the Respondent State, has relied upon the decision of the Supreme Court of India in Shivkumar Mishra versus State of Goa (2009) 3 SCC 797 as well as the decision of the learned Single Judge of the Sessions Court, Mumbai in Santosh Apposo Naik versus the State of Maharashtra (Bail Application No. 951 of 2022) to counter the submissions that leaves, seeds and stalks ought to have been excluded while weighing the seized ganja. He further contends that the sample has been drawn in accordance with law., I have perused the records and considered the submissions advanced by learned counsel for the respective parties., The records prima facie reveal that the Applicant was seen moving in a suspicious manner with two travel bags. He was apprehended and the two bags were searched. The bags contained some greenish leaves, seeds, stalks, flowering fruiting tops, the total weight of which was twenty‑one kilograms. The bags were seized under a panchanama. A perusal of the panchanama reveals that the contents in each of these bags were mixed together and thereafter a sample was taken and forwarded to the Central Forensic Science Laboratory for opinion. The forensic report reveals that flowering/fruiting tops, seeds, leaves and stalks were received in a sealed packet marked as Exhibit‑A‑1. The report states that the contraband recovered from the Applicant is ganja within the meaning of Section 2(iii)(b) of the Narcotic Drugs and Psychotropic Substances Act. The term ganja as defined in Section 2(iii)(b) means the flowering or fruiting tops of the Cannabis plant (excluding the seeds and leaves when not accompanied by the tops), by whatever name they may be known or designated. A plain reading of this section would reveal that seeds and leaves are not covered under the definition of ganja unless they are accompanied by the flowering or fruiting tops of the Cannabis plant. This has been the consistent interpretation of this Court in Rahul Bhimrao Pawar, Kunal Dattu Kadu, Hari Mahadu Walse, Amit Shankar Devmare (supra). In the instant case, the material on record does not prima facie indicate that the leaves, seeds and stalks were accompanied by the flowering or fruiting tops of the Cannabis plant. A perusal of the decisions in Shivkumar (supra) and Santosh Appaso Naik (supra) reveals that seized ganja in those cases was accompanied by flowering or fruiting tops. In this fact situation, the aforesaid decisions are distinguishable., It is the case of the prosecution that the Applicant was in possession of a commercial quantity of ganja, i.e., more than twenty kilograms. The records prima facie reveal that the total weight of ganja allegedly seized from the Applicant was twenty‑one kilograms, which is one kilogram in excess of the quantity specified by the Government in the notification. As noted above, the seized substance contained leaves, seeds, stalks and flowering fruiting tops. The total weight of the seized substance was twenty‑one kilograms and this includes the weight of leaves, seeds and stalks, which prima facie were not accompanied by the flowering or fruiting part. The fact that the entire substance was weighed together without quantifying the weight of the flowering or fruiting tops casts doubt whether the ganja seized from the Applicant was of commercial quantity to attract the provision under Section 20(c) of the Narcotic Drugs and Psychotropic Substances Act., The records also indicate that the investigating agency did not draw samples independently from both bags but mixed together the entire contraband from both bags and thereafter drew two samples, one of which was forwarded to the Central Forensic Science Laboratory for analysis. The Delhi High Court in Amani Fidel Chris versus Narcotics Control Bureau (CRL Appeal No. 1027 of 2015) and Ram Bharose (supra) has considered Standing Order 1 of 1988, which is pari materia with Standing Order 1 of 1989, and has held that mixing the contents of a container or package (in one lot) and then drawing representative samples is not permissible under the Standing Orders because such a sample would not be a representative sample of the corresponding container or package. In the instant case, as noted above, the sample sent to the Central Forensic Science Laboratory was not a representative sample. Considering this vital aspect, in my considered view the Applicant would be entitled to bail., Under the circumstances, the application is allowed. (i) The Applicant, who is facing trial in Narcotic Drugs and Psychotropic Substances Special Case No. 617 of 2021, Sessions Court, Mumbai, is ordered to be released on bail upon furnishing personal bond in the sum of Rs 50,000 with one or two sureties of the like amount; (ii) The Applicant shall not leave the State without prior permission of the Special Court; (iii) The Applicant shall report to the Assistant Narcotics Control, Bandra Unit, Mumbai on the first day of every month till framing of the charge; (iv) The Applicant shall keep the Special Court informed of his current address and mobile contact numbers, and any change of residence or mobile details, from time to time., The application stands disposed of.
|
id_1643
| 0
|
Leave granted., The appellant in both the appeals (hereinafter referred to as the returned candidate) has challenged the legality of the impugned common order dated 19 November 2019 passed by the Madras High Court in Original Application Nos. 929/2019 and 930/2019 filed by the appellant in Election Petition No. 3/2019, whereby the Madras High Court dismissed both the said applications., The factual matrix giving rise to the present appeals is that on 19 March 2019, nominations were invited pursuant to the notification issued by the Chief Election Commissioner for the elections to the 17th Lok Sabha, scheduled to be held on 18 April 2019. The appellant filed her nomination from No. 36‑Thoothukudi Lok Sabha Constituency, along with the affidavit in Form No. 26 as per Rule 4A of the Conduct of Election Rules 1961 (hereinafter referred to as the said Rules). The scrutiny of nomination papers was held by the Returning Officer on 27 March 2019. The elections were held on 18 April 2019 as scheduled, and the appellant was declared elected from the said No. 36‑Thoothukudi Lok Sabha Constituency with a margin of 3,47,209 votes on 23 May 2019., The election petitioner/respondent No. 1 herein, claiming to be a voter, has filed Election Petition No. 3/2019 before the Madras High Court under Sections 80, 80A, 100(1)(d)(iv) of the Representation of the People Act, 1951 (hereinafter referred to as the RP Act) seeking declaration that the election of the returned candidate, i.e., the appellant herein, from No. 36, Thoothukudi Lok Sabha Constituency, in the Lok Sabha election conducted pursuant to the notification of the Chief Election Commissioner dated 19 March 2019 was void and liable to be set aside, on the ground that the information sought by the Election Commission of India in regard to the payment of income tax of her spouse was not provided by her in the affidavit Form No. 26 submitted along with the nomination papers, and thus had intentionally suppressed and not disclosed the same to the electors., The petitioner humbly submits that upon perusal of the nomination paper submitted by the second respondent, the returned candidate herein, under Rule 4 of the Conduct of Election Rules 1961, after the dissemination of the same to the public under the Representation of the People Act, it is manifest that she failed to furnish the details of the payment of the income tax of her spouse mentioned in the Tamil language as \THUNAIVAR\ namely Aravindan, citizen of Singapore, in the column requiring to provide the PAN number, the last financial year of filing the Income Tax Return and the total income shown in the income tax return for the past five financial years, for each year in rupees, in the affidavit Form 26, under Part A, No. 4 S. No. 2, by mentioning in Tamil language \PORUTHATHU\ which information is mandatory to be furnished by the returned candidate in adherence to the information sought by the Election Commission of India in exercise of the statutory powers conferred under Article 324 of the Constitution of India, and suppression of the same by the returned candidate in non‑compliance with the provisions of the Constitution of India has materially affected the result of the election., The petitioner humbly submits that in S. No. 3 of Part B in the affidavit Form 26 the second respondent had provided the information regarding the constituency number, name and state as No. 36, Thoothukudi, Tamil Nadu, but in Part A No. 2 she mentioned that her electoral constituency is No. 19 CHEPAUK, Tamil Nadu, exposing the improper submission of the nomination form., The petitioner humbly submits that having aggrieved against the unconstitutional act of the second respondent the returned candidate, insofar as the electors of the constituency are unable to have information regarding the income of the spouse of the returned candidate disclosed in the income tax return, consequently the result is materially affected; he is before this Hon’ble Madras High Court praying to declare the election of the returned candidate, the second respondent herein, from No. 36, Thoothukudi Constituency as void and set aside the same., The petitioner respectfully submits that the nomination paper, the affidavit Form 26, is without particulars of the payment of income tax of her spouse (Thunaivar) namely Mr. Aravindan, citizen of Singapore, though the information regarding the payment of income tax is sought by the Election Commission of India in exercise of its statutory powers under Article 324 of the Constitution of India in view of providing information to the public under the Representation of People Act. It is pertinent to state that income from foreign countries is subject to income tax under the Singapore Income Tax Act and each income tax payer is provided an Income Tax Reference Number by the authority., The petitioner humbly submits that the suppression of information by the second respondent herein regarding the payment of income tax of her spouse (Thunaivar) deprives the electors of the constituency of complete information of the payment of income tax to the income tax authority in Singapore and leads to filing a false affidavit in non‑adherence to the rules., The appellant/returned candidate filed Original Application No. 929/2019 praying to strike off paragraphs 5 to 17 of the Election Petition and filed Original Application No. 930/2019 praying to reject the Election Petition in limine on the ground that the averments and allegations contained in the Election Petition were wholly vague and bereft of material facts, and therefore did not meet the requirements of Sections 81, 83, 86 and 100 of the Representation of the People Act. It was also averred that paragraphs 5 to 17 of the Election Petition were bereft of material facts and did not disclose any cause of action. The Madras High Court, by the impugned common order, dismissed both the Original Applications filed by the appellant/returned candidate., Submissions by learned counsel for the appellant: Senior Advocate P. Wilson submitted that Section 83(1)(a) of the Representation of the People Act makes it mandatory for all election petitions to contain a concise statement of material facts on which the petitioner relies; the respondent‑election petitioner has failed to plead material facts and therefore the election petition is liable to be dismissed in limine. He placed reliance on the decisions of this Court in Ram Sukh v. Dinesh Aggarwal and Hari Shanker Jain v. Sonia Gandhi, stating that material facts include positive statements of facts as well as positive averments of a negative fact, and in the absence thereof the election petition must be dismissed. He further relied on Samant N. Balkrishna & Anr. v. George Fernandez & Ors., arguing that failure to plead even a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. He observed that although the respondent‑election petitioner alleged that the appellant suppressed facts in Form 26 affidavit, it failed to specify which facts were suppressed or how there was non‑compliance of the Constitution, the Act or the rules that materially affected the result of the election. He contended that the entire election petition is based on vague and bald assumptions, presumptions and conjectures without stating material facts in support of the ground contained in Section 100(1)(d)(iv) of the Act. Finally, he submitted that while candidates are required to disclose their income tax status, assets and liabilities as well as those of their spouses, if the columns are not applicable in the factual situation, it cannot amount to suppression of facts., Submissions by learned counsel for respondent No. 1: Advocate Mukesh S. submitted that the appellant has violated the law laid down by this Court in Union of India v. Association for Democratic Reforms & Anr., wherein the Court directed the Election Commission to obtain details of assets and liabilities of candidates and their family members without differentiating citizenship status. He stated that the appellant, in response to the query regarding income tax dues of her spouse, had mentioned “NO”. The appellant failed to disclose the status of filing of income tax return of her spouse in the foreign country as required in Form 26, merely stating that her spouse was a foreign citizen without providing the filing status or the income tax reference number issued in Singapore. He argued that the appellant was bound to disclose the details of filing of income tax return by her spouse in the foreign country and that non‑disclosure amounted to suppression of facts and non‑compliance of the statutory rules under the Act. By not disclosing the financial status of her family, the appellant deprived voters of the opportunity to decide about casting their votes. Lack of transparency and non‑disclosure of facts in Form 26 materially affected the result of the election., Relevant provisions of the Constitution of India: Part XV deals with elections. The superintendence, direction and control of the preparation of electoral rolls and the conduct of all elections to Parliament, to the legislatures of States and to the offices of President and Vice‑President are vested in the Election Commission under Article 324. Article 325 provides for one general electoral roll for every territorial constituency and prohibits disqualification on grounds of religion, race, caste, sex or any of them. Article 326 provides for elections on the basis of adult franchise. Article 327 enables Parliament to make laws relating to elections to Parliament or State legislatures. Article 328 enables a State legislature, where Parliament has not legislated, to make laws relating to elections to the State legislature. Article 329 bars interference by courts in electoral matters, except that an election to either House of Parliament or to a State legislature may be called into question only by an election petition presented to the appropriate authority as provided by law., Provisions of the Representation of the People Act, 1951: The Act provides for conduct of elections to the Houses of Parliament and to State legislatures, qualifications and disqualifications, corrupt practices, offences and the resolution of doubts and disputes arising out of elections. Part VI deals with election disputes, Chapter II with presentation of election petitions to the High Court. Section 80 states that no election shall be called into question except by an election petition presented in accordance with Part VI. Section 80A confers jurisdiction on the High Court to try election petitions. Section 81 deals with presentation of petitions, specifying the time limit of forty‑five days from the date of election of the returned candidate. Section 82 mandates the parties to an election petition. Section 83 prescribes the contents of the petition, requiring a concise statement of material facts, full particulars of any corrupt practice, and verification as per the Code of Civil Procedure, 1908. Section 86 empowers the High Court to dismiss an election petition that does not comply with Sections 81, 82 or 117. Section 87 outlines the procedure before the High Court, stating that the trial shall be as nearly as may be in accordance with the Code of Civil Procedure, 1908, and that the Indian Evidence Act, 1872 applies., Section 100 enumerates the grounds on which the High Court may declare the election of the returned candidate void. Sub‑section (1)(d)(iv) provides that if the High Court is of the opinion that the result of the election concerning a returned candidate has been materially affected by any non‑compliance with the Constitution, the Act or any rules or orders made thereunder, it shall declare the election of the returned candidate void., In the instant case, the respondent‑election petitioner has challenged the election of the appellant on the ground that the result was materially affected by non‑compliance with Article 324 of the Constitution and by non‑compliance with Rule 4A of the Conduct of Election Rules 1961 read with Section 33 of the Act. Section 33 pertains to the presentation of nomination papers and the requirements for a valid nomination. Section 36 deals with scrutiny of nominations by the Returning Officer. Sub‑section (2) of Section 36 empowers the Returning Officer, on objections or on his own motion, to reject any nomination on the grounds mentioned therein, including failure to comply with Section 33. Sub‑section (4) states that the Returning Officer shall not reject any nomination paper on the ground of a defect which is not of a substantial character., Part II of the Conduct of Election Rules, 1961 deals with general provisions. Rule 4 and Rule 4A pertain to the submission of nomination papers and the affidavit to be filed at the time of delivering the nomination paper. Rule 4 provides that every nomination paper presented under sub‑section (i) of Section 33 shall be completed in one of the Forms 2A to 2E as appropriate, and that a failure to complete or a defect in the declaration of symbols in Form 2A or 2B shall not be deemed a defect of a substantial character within the meaning of sub‑section (4) of Section 36. Rule 4A provides that the candidate or his proposer shall, at the time of delivering the nomination paper to the Returning Officer, also deliver an affidavit sworn by the candidate before a Magistrate of the first class or a Notary in Form 26., Legal position: The scheme of the constitutional and statutory provisions contained in the Representation of the People Act in relation to the nature of the right to elect, the right to be elected and the right to dispute an election has been explained and interpreted by various Constitutional Benches since 1952. Cases include N.P. Ponnuswami v. Returning Officer, Namakkal Constituency & Ors.; Jagan Nath v. Jaswant Singh & Ors.; Bhikji Keshao Joshi & Anr. v. Brijlal Nandlal Biyani & Ors.; Murarka Radhey Shyam Ram Kumar v. Roop Singh Rathore & Ors., etc., It has been held that the right to elect, though fundamental to democracy, is neither a fundamental right nor a common law right; it is a statutory right. Similarly, the right to be elected and the right to dispute an election are statutory rights and are subject to statutory limitations. An election petition is a special jurisdiction exercised in accordance with the statute creating it and is not an action at common law or in equity. The Representation of the People Act, 1951 is a complete and self‑contained code within which any rights claimed in relation to an election dispute must be found., In Union of India v. Association for Democratic Reforms & Another, a three‑judge Bench of this Court examined whether voters have a right to know relevant particulars of candidates before casting votes, deliberated on the powers of the Election Commission under Article 324, and observed that the Commission’s jurisdiction is wide enough to include all powers necessary for the smooth conduct of elections, subject to any valid law made by Parliament or a State Legislature. Where law is silent, Article 324 serves as a reservoir of power to act for the purpose of free and fair elections. The Court also held that the Commission may issue directions to fill legislative vacuum., The insertion of Rule 4A and Form 26 appended to the Conduct of Election Rules is a culmination of the observations made by this Court in the aforesaid case, requiring candidates to disclose information and particulars in an affidavit submitted along with the nomination paper., The respondent‑election petitioner in this case has challenged the election of the appellant‑returned candidate under Section 100(1)(d)(iv) on the ground of non‑compliance with Rule 4A and Form 26. The appellant filed applications seeking dismissal of the election petition in limine for non‑compliance with the provisions of Section 83(1)(a) of the Act, read with Order VII, Rule 11 of the Code of Civil Procedure., The law developed by this Court regarding non‑compliance with Section 83(1)(a) of the Representation of the People Act, namely that an election petition must contain a concise statement of material facts on which the petitioner relies, is that such non‑compliance, read with Order VII, Rule 11 of the CPC, may entail dismissal of the election petition at the threshold. Material facts are those which, if established, would give the petitioner the relief sought. The test is whether the court could have given a direct verdict in favour of the election petitioner if the returned candidate had not appeared to oppose the petition on the basis of the facts pleaded. They must be such facts as would afford a basis for the allegations made and constitute the cause of action as understood in the Code of Civil Procedure, 1908. Material facts include positive statements of facts as well as positive statements of a negative fact., A three‑judge Bench in Hari Shanker Jain v. Sonia Gandhi dealt with Section 83(1)(a) and dismissed the election petition holding that bald and vague averments do not satisfy the requirement of pleading material facts within the meaning of Section 83(1)(a) read with Order VII Rule 11 CPC. The Court observed that material facts are those which can be considered as material supporting the allegations, and omission of a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. The Court emphasized that the duty of the court is to examine the petition irrespective of any written statement or denial and reject it if it does not disclose a cause of action., In Mahadeorao Sukaji Shivankar v. Ramaratan Bapu & Ors., a three‑judge Bench again considered what constitutes material facts and the consequences of not stating them in an election petition. The Court held that all material facts must be set out in an election petition; failure to do so makes the petition liable to be dismissed under Rule 11 of Order VII CPC. Material facts are those upon which a party relies for his claim or defence; they are primary facts that must be pleaded to establish the cause of action or defence. A distinction was drawn between material facts and particulars, with material facts being primary facts and particulars being details in support of material facts.
|
id_1643
| 1
|
They amplify, refine and embellish material facts by giving finishing touch to the basic contours of a picture already drawn so as to make it full, more clear and more informative. Particulars ensure conduct of fair trial and would not take the opposite party by surprise., In Anil Vasudev Salgaonkar vs. Naresh Kushali Shigaonkar, the Supreme Court of India has discussed a number of earlier decisions on the issue as to when an election petition could be dismissed summarily if it does not furnish the cause of action in exercise of powers under the Code of Civil Procedure read with Section 83 of the Representation of the People Act. The position is well settled that an election petition can be summarily dismissed if it does not furnish the cause of action in exercise of the power under the Code of Civil Procedure. Appropriate orders in exercise of powers under the Code can be passed if the mandatory requirements enjoined by Section 83 of the Representation of the People Act to incorporate the material facts in the election petition are not complied with., The Supreme Court of India in Samant N. Balkrishna case [(1969) 3 SCC 238] has expressed itself in no uncertain terms that the omission of a single material fact would lead to an incomplete cause of action and that an election petition without the material facts relating to a corrupt practice is not an election petition at all. In Udhav Singh v. Madhav Rao Scindia [(1977) 1 SCC 511] the law has been enunciated that all the primary facts which must be proved by a party to establish a cause of action or his defence are material facts. In the context of a charge of corrupt practice it would mean that the basic facts which constitute the ingredients of the particular corrupt practice alleged by the petitioner must be specified in order to succeed on the charge. Whether in an election petition a particular fact is material or not and as such required to be pleaded is dependent on the nature of the charge levelled and the circumstances of the case. All the facts which are essential to clothe the petition with complete cause of action must be pleaded and failure to plead even a single material fact would amount to disobedience of the mandate of Section 83(1)(a). An election petition therefore can be and must be dismissed if it suffers from any such vice. The first ground of challenge must therefore fail., In V. Narayanaswamy v. C. P. Thirunavukkarasu [(2000) 2 SCC 294] the Supreme Court of India reiterated the legal position that an election petition is liable to be dismissed if it lacks material facts. In L. R. Shivaramagowda v. T. M. Chandrashekar [(1999) 1 SCC 666] the Supreme Court of India again considered the importance of pleadings in an election petition alleging corrupt practice falling within the scope of Section 123 of the Representation of the People Act and observed that while the failure to plead material facts is fatal to the election petition and no amendment of the pleading could be allowed to introduce such material facts after the time‑limit prescribed for filing the election petition, the absence of material particulars can be cured at a later stage by an appropriate amendment., In Udhav Singh case [(1977) 1 SCC 511] the Supreme Court of India observed that, like the Code of Civil Procedure, the provision also envisages a distinction between material facts and material particulars. Clause (a) of sub‑section (1) corresponds to Order 6 Rule 2, while clause (b) is analogous to Order 6 Rules 4 and 6 of the Code. The distinction is important because different consequences may flow from a deficiency of such facts or particulars in the pleading. Failure to plead even a single material fact leads to an incomplete cause of action and incomplete allegations of such a charge are liable to be struck off under Order 6 Rule 16 of the Code of Civil Procedure. If the petition is based solely on those allegations which suffer from lack of material facts, the petition is liable to be summarily rejected for want of a cause of action. In the case of a petition suffering from a deficiency of material particulars, the Supreme Court of India has a discretion to allow the petitioner to supply the required particulars even after the expiry of limitation., In H. D. Revanna case [(1999) 2 SCC 217] the appeal was filed by the candidate who had succeeded in the election and whose application for dismissal of the election petition in limine was rejected by the High Court of India. The Supreme Court of India noticed that it has been laid down by the Supreme Court of India that non‑compliance with the provisions of Section 83 may lead to dismissal of the petition if the matter falls within the scope of Order 6 Rule 16 and Order 7 Rule 11 of the Code of Civil Procedure. In Harmohinder Singh Pradhan v. Ranjeet Singh Talwandi [(2005) 5 SCC 46] the Supreme Court of India observed that necessary averment of facts constituting an appeal on the ground of his religion to vote or to refrain from voting would be material facts within the meaning of clause (a) of sub‑section (1) of Section 83 of the Representation of the People Act. If such material facts are missing, they cannot be supplied later on, after the expiry of the period of limitation for filing the election petition and the plea being deficient can be directed to be struck down under Order 6 Rule 16 of the Code of Civil Procedure, 1908 and, if such plea is the sole ground of filing an election petition, the petition itself can be rejected as not disclosing a cause of action under clause (a) of Rule 11, Order 7 of the Code., In Harkirat Singh v. Amrinder Singh [(2005) 13 SCC 511] the Supreme Court of India again reiterated the distinction between material facts and material particulars. Material facts are primary or basic facts which must be pleaded by the plaintiff or by the defendant in support of the case set up by him either to prove his cause of action or defence. Particulars, on the other hand, are details in support of material facts pleaded by the party. They amplify, refine and embellish material facts by giving distinctive touch to the basic contours of a picture already drawn so as to make it full, more clear and more informative. Particulars thus ensure conduct of a fair trial and would not take the opposite party by surprise. All material facts must be pleaded by the party in support of the case set up by him. Since the object and purpose is to enable the opposite party to know the case he has to meet with, in the absence of pleading a party cannot be allowed to lead evidence. Failure to state even a single material fact, hence, will entail dismissal of the suit or petition. Particulars, on the other hand, are the details of the case which are in the nature of evidence a party would be leading at the time of trial., In Sudarsha Avasthi v. Shiv Pal Singh [(2008) 7 SCC 604] the Supreme Court of India observed that the election petition is a serious matter and it cannot be treated lightly or in a fanciful manner nor is it given to a person who uses it as a handle for vexatious purpose., It is settled legal position that all material facts must be pleaded by the party in support of the case set up by him within the period of limitation. Since the object and purpose is to enable the opposite party to know the case he has to meet with, in the absence of pleading a party cannot be allowed to lead evidence. Failure to state even a single material fact will entail dismissal of the election petition. The election petition must contain a concise statement of material facts on which the petitioner relies., There is no definition of material facts either in the Representation of the People Act, 1951 nor in the Code of Civil Procedure. In a series of judgments, the Supreme Court of India has laid down that all facts necessary to formulate a complete cause of action should be termed as material facts. All basic and primary facts which must be proved by a party to establish the existence of cause of action or defence are material facts. Material facts, in other words, mean the entire bundle of facts which would constitute a complete cause of action. The Supreme Court of India in Harkirat Singh case [(2005) 13 SCC 511] tried to give various meanings of material facts. The relevant para 48 of the said judgment states that the expression material facts has neither been defined in the Representation of the People Act nor in the Code of Civil Procedure. According to the dictionary meaning, material means fundamental, vital, basic, cardinal, central, crucial, decisive, essential, pivotal, indispensable, elementary or primary. The phrase material facts, therefore, may be said to be those facts upon which a party relies for its claim or defence. In other words, material facts are facts upon which the plaintiff's cause of action or the defendant's defence depends. What particulars could be said to be material facts would depend upon the facts of each case and no rule of universal application can be laid down. It is, however, absolutely essential that all basic and primary facts which must be proved at trial by the party to establish the existence of a cause of action or defence are material facts and must be stated in the pleading by the party., In Ram Sukh vs. Dinesh Aggarwal, the Supreme Court of India again, while examining the maintainability of an election petition filed under Section 100(1)(d)(iv) of the Representation of the People Act, elaborately considered the earlier decisions and observed that it was necessary for the election petitioner to aver specifically in what manner the result of the election, as far as it concerned the returned candidate, was materially affected due to omission on the part of the Returning Officer. The Supreme Court of India, having found that such averments were missing in the election petition, upheld the judgment of the High Court of India/Election Tribunal rejecting the election petition at the threshold. The Supreme Court of India observed that the requirement in an election petition as to the statement of material facts and the consequences of lack of such disclosure with reference to Sections 81, 83 and 86 of the Representation of the People Act came up for consideration before a three‑Judge Bench of the Supreme Court of India in Samant N. Balkrishna v. George Fernandez [(1969) 3 SCC 238]. Speaking for the three‑Judge Bench, Chief Justice M. Hidayatullah laid down that: (i) Section 83 of the Representation of the People Act is mandatory and requires first a concise statement of material facts and then the fullest possible particulars; (ii) omission of even a single material fact leads to an incomplete cause of action and the statement of claim becomes bad; (iii) the function of particulars is to present in full a picture of the cause of action and to make the opposite party understand the case he will have to meet; (iv) material facts and particulars are distinct matters – material facts will mention statements of fact and particulars will set out the names of persons with date, time and place; and (v) in stating the material facts it will not do merely to quote the words of the section because then the efficacy of the material facts will be lost. At this juncture, to appreciate the real object and purport of the phrase material facts, particularly with reference to election law, it is appropriate to notice the distinction between the phrases material facts as appearing in clause (a) and particulars as appearing in clause (b) of sub‑section (1) of Section 83. As stated above, material facts are primary or basic facts which have to be pleaded by the petitioner to prove his cause of action and by the defendant to prove his defence. Particulars, on the other hand, are details in support of the material facts, pleaded by the parties. They amplify, refine and embellish material facts by giving distinctive touch to the basic contours of a picture already drawn so as to make it full, more clear and more informative. Unlike material facts which provide the basic foundation on which the entire edifice of the election petition is built, particulars are to be stated to ensure that the opposite party is not taken by surprise., The distinction between material facts and particulars and their requirement in an election petition was succinctly brought out by the Supreme Court of India in Virendra Nath Gautam v. Satpal Singh [(2007) 3 SCC 617] wherein Judge C. K. Thakker stated: There is distinction between facta probanda (the facts required to be proved, that is, material facts) and facta probantia (the facts by means of which they are proved, that is, particulars or evidence). It is settled law that pleadings must contain only facta probanda and not facta probantia. The material facts on which the party relies for his claim are called facta probanda and they must be stated in the pleadings. But the facts or facts by means of which facta probanda (material facts) are proved and which are in the nature of facta probantia (particulars or evidence) need not be set out in the pleadings. They are not facts in issue, but only relevant facts required to be proved at trial in order to establish the fact in issue., Now, before examining the rival submissions in the light of the aforesaid legal position, it would be expedient to deal with another submission of the learned counsel for the appellant that the High Court of India should not have exercised its power either under Order 6 Rule 16 or Order 7 Rule 11 of the Code of Civil Procedure to reject the election petition at the threshold. The argument is twofold, namely: (i) that even if the election petition was liable to be dismissed ultimately, it should have been dismissed only after affording an opportunity to the election petitioner to adduce evidence in support of his allegation in the petition, and (ii) since Section 83 does not find a place in Section 86 of the Representation of the People Act, rejection of the petition at the threshold would amount to reading into sub‑section (1) of Section 86 an additional ground. In our opinion, both the contentions are misconceived and untenable., Undoubtedly, by virtue of Section 87 of the Representation of the People Act, the provisions of the Code of Civil Procedure apply to the trial of an election petition and, therefore, in the absence of anything to the contrary in the Representation of the People Act, the Supreme Court of India trying an election petition can act in exercise of its power under the Code of Civil Procedure, including Order 6 Rule 16 and Order 7 Rule 11 of the Code of Civil Procedure. The object of both provisions is to ensure that meaningless litigation, which is otherwise bound to prove abortive, should not be permitted to occupy the judicial time of the courts. If that is so in matters pertaining to ordinary civil litigation, it must apply with greater vigour in election matters where the pendency of an election petition is likely to inhibit the elected representative of the people in the discharge of his public duties for which the electorate have reposed confidence in him. The submission, therefore, must fail., Coming to the second limb of the argument, namely the absence of Section 83 in Section 86 of the Representation of the People Act, which specifically provides for dismissal of an election petition which does not comply with certain provisions of the Representation of the People Act, in our view, the issue is no longer res integra. A similar plea was negatived by a three‑Judge Bench of the Supreme Court of India in Hardwari Lal v. Kanwal Singh [(1972) 1 SCC 214], wherein speaking for the Bench, Judge A. N. Ray (as His Lordship then was) said that an election petition could not be dismissed by reason of want of material facts because Section 86 of the Representation of the People Act conferred power on the High Court of India to dismiss the election petition which did not comply with the provisions of Section 81, Section 82 or Section 117 of the Representation of the People Act. It was emphasised that Section 83 did not find place in Section 86. Under Section 87 of the Representation of the People Act every election petition shall be tried by the High Court of India as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits. A suit which does not furnish cause of action can be dismissed., The issue was again dealt with by the Supreme Court of India in Azhar Hussain v. Rajiv Gandhi [1986 Supp SCC 315]. Referring to earlier pronouncements of the Supreme Court of India in Samant N. Balkrishna [(1969) 3 SCC 238] and Udhav Singh v. Madhav Rao Scindia [(1977) 1 SCC 511], wherein it was observed that the omission of a single material fact would lead to incomplete cause of action and that an election petition without the material facts is not an election petition at all, the Bench in Azhar Hussain held that all the facts which are essential to clothe the petition with complete cause of action must be pleaded and omission of even a single material fact would amount to disobedience of the mandate of Section 83(1)(a) of the Representation of the People Act and an election petition can be and must be dismissed if it suffers from any such vice., We may now advert to the facts at hand to examine whether the election petition suffered from the vice of nondisclosure of material facts as stipulated in Section 83(1)(a) of the Representation of the People Act. As already stated, the case of the election petitioner is confined to the alleged violation of Section 100(1)(d)(iv). For the sake of ready reference, the provision is extracted below: 100. Grounds for declaring election to be void. (1) Subject to the provisions of sub‑section (2) if the High Court of India is of opinion (d) that the result of the election, insofar as it concerns a returned candidate, has been materially affected (iv) by any non‑compliance with the provisions of the Constitution or of the Representation of the People Act or of any rules or orders made under the Representation of the People Act, the High Court of India shall declare the election of the returned candidate to be void. It is plain that in order to get an election declared as void under the said provision, the election petitioner must aver that on account of non‑compliance with the provisions of the Constitution or of the Representation of the People Act or of any rules or orders made under the Representation of the People Act, the result of the election, insofar as it concerned the returned candidate, was materially affected., The legal position enunciated in the afore‑stated cases may be summed up as follows: i. Section 83(1)(a) of the Representation of the People Act, 1951 mandates that an election petition shall contain a concise statement of material facts on which the petitioner relies. If material facts are not stated in an election petition, the same is liable to be dismissed on that ground alone, as the case would be covered by Clause (a) of Rule 11 of Order 7 of the Code of Civil Procedure. ii. The material facts must be such facts as would afford a basis for the allegations made in the petition and would constitute the cause of action, that is, every fact which it would be necessary for the plaintiff/petitioner to prove in order to support his right to the judgment of court. Omission of a single material fact would lead to an incomplete cause of action and the statement of plaint would become bad. iii. Material facts mean the entire bundle of facts which would constitute a complete cause of action. Material facts would include positive statement of facts as also positive averment of a negative fact, if necessary. iv. In order to get an election declared as void under Section 100(1)(d)(iv) of the Representation of the People Act, the election petitioner must aver that on account of non‑compliance with the provisions of the Constitution or of the Representation of the People Act or any rules or orders made under the Representation of the People Act, the result of the election, as far as it concerned the returned candidate, was materially affected. v. The election petition is a serious matter and it cannot be treated lightly or in a fanciful manner nor is it given to a person who uses it as a handle for vexatious purpose. vi. An election petition can be summarily dismissed on the omission of a single material fact leading to an incomplete cause of action, or omission to contain a concise statement of material facts on which the petitioner relies for establishing a cause of action, in exercise of the powers under Clause (a) of Rule 11 of Order VII of the Code of Civil Procedure read with the mandatory requirements enjoined by Section 83 of the Representation of the People Act., In the light of the afore‑stated legal position, let us see whether the respondent/election petitioner had complied with the requirements of Section 83(1)(a) of the Representation of the People Act, by stating material facts in the election petition, constituting cause of action and the ground as contemplated in Section 100(1)(d)(iv) of the Representation of the People Act, for declaring the election of the appellant‑returned candidate to be void. The bone of contention raised by the learned counsel appearing for the respondent‑election petitioner is that the Election Commission of India had called for the information prescribing Form 26 in regard to status of filing of income tax return of candidates and their family members by exercising powers under Article 324 of the Constitution of India and, in that, the petitioner had provided information that her spouse was working as a consultant in a foreign country and earning salary against column No. 8, Serial No. 9(b) and 9A(b) respectively under Part A of Form 26. Besides, she had mentioned \No\ to the query regarding income‑tax dues of her spouse (mentioned as Ethumilai in Tamil language). She had further stated that her spouse had bank accounts in Singapore with deposit of dollars against column No. 7 Serial No. (ii) of Part A of Form 26 but had failed to disclose the status of filing income‑tax return of her spouse in the foreign country. He therefore submitted that these material facts, which have already been stated in the election petition, were sufficient to constitute cause of action for filing an election petition under Section 100(1)(d)(iv) of the Representation of the People Act., It may be noted that the precise allegations made by the respondent‑election petitioner in paragraphs 5 to 9 of his election petition have already been reproduced hereinbefore, from which it clearly transpires that the election petitioner, i.e., the respondent, has made very bald and vague allegations without stating the material facts as to how there was non‑compliance of any of the provisions of the Constitution of India or of the Representation of the People Act or of the rules made thereunder. If the averments made in the election petition are read in juxtaposition to the information furnished by the appellant‑returned candidate in Form No. 26, it clearly emerges that against the information sought about the PAN number of the spouse of the appellant, it has been stated \No PAN No., Spouse K. Aravindhan, Foreign Citizenship\. Against the information sought with regard to the financial year for which the last income‑tax return has been filed, the information supplied by the appellant about her spouse is \Not applicable\. The appellant has filled in all the columns of Form No. 26 by furnishing the information with regard to her Permanent Account Number and status of filing of income‑tax return etc., and of her husband wherever applicable. If, according to the respondent‑election petitioner, the appellant‑returned candidate had suppressed the Permanent Account Number of her spouse and also about the non‑payment of income tax of her spouse in the foreign country, it was obligatory on the part of the election petitioner to state in the election petition what was the Permanent Account Number of the spouse of the returned candidate in India which was suppressed by her and how the other details furnished about her husband in the said Form No. 26 were incomplete or false., Mere bald and vague allegations without any basis would not be sufficient compliance with the requirement of stating material facts in the election petition. As well settled, not only a positive statement of facts, even a positive statement of a negative fact is also required to be stated, as it would be a material fact constituting a cause of action. The material facts which are primary and basic facts have to be pleaded by the election petitioner in support of the case set up by him to show his cause of action and omission of a single material fact would lead to an incomplete cause of action, entitling the returned candidate to pray for dismissal of the election petition under Order VII Rule 11(a) of the Code of Civil Procedure read with Section 83(1)(a) of the Representation of the People Act., It is also significant to note that an affidavit in Form 26 along with the nomination paper is required to be furnished by the candidate as per Rule 4A of the said Rules read with Section 33 of the Representation of the People Act. The Returning Officer is empowered, either on the objections made to any nomination or on his own motion, to reject any nomination on the grounds mentioned in Section 36(2), including on the ground that there has been a failure to comply with any of the provisions of Section 33 of the Representation of the People Act. However, at the time of scrutiny of the nomination paper and the affidavit in Form 26 furnished by the appellant‑returned candidate, neither any objection was raised nor the Returning Officer had found any lapse or non‑compliance of Section 33 or Rule 4A of the Rules. Assuming that the election petitioner did not have the opportunity to see Form No. 26 filled in by the appellant‑returned candidate when she submitted the same to the Returning Officer, and assuming that the Returning Officer had not properly scrutinized the nomination paper of the appellant, and assuming that the election petitioner had a right to question the same by filing the election petition under Section 100(1)(d)(iv) of the Representation of the People Act, then also there are no material facts stated in the petition constituting cause of action under Section 100(1)(d)(iv) of the Representation of the People Act. In the absence of material facts constituting cause of action for filing an election petition under Section 100(1)(d)(iv) of the Representation of the People Act, the election petition is required to be dismissed under Order VII Rule 11(a) of the Code of Civil Procedure read with Section 13(1)(a) of the Representation of the People Act., As elaborately discussed earlier, Section 83(1)(a) of the Representation of the People Act mandates that an election petition shall contain a concise statement of material facts on which the petitioner relies, and which facts constitute a cause of action. Such facts would include a positive statement of facts as also a positive averment of a negative fact. Omission of a singular fact would lead to an incomplete cause of action. So far as the present petition is concerned, there is no averment made as to how there was non‑compliance with provisions of the Constitution or of the Representation of the People Act or of the Rules or Order made thereunder and as to how such non‑compliance had materially affected the result of the election, so as to attract the ground under Section 100(1)(d)(iv) of the Representation of the People Act for declaring the election to be void. The omission to state such vital and basic facts has rendered the petition liable to be dismissed under Order VII Rule 11(a) of the Code of Civil Procedure read with Section 83(i)(a) of the Representation of the People Act., In that view of the matter, the election petition being No. 3/2019 filed by the respondent‑election petitioner deserves to be dismissed, and is accordingly dismissed. The impugned judgment of the High Court of India is set aside. The appeals stand allowed accordingly.
|
id_1647
| 0
|
By order dated 08 February 2024 in Criminal Revision Petition 1362 of 2023, the sentence awarded to the petitioner was suspended and he was directed to be released on bail on certain conditions and on furnishing a bail bond to the satisfaction of the Jail Superintendent., An application was filed pointing out that the bail bond which was directed to be furnished to the satisfaction of the Jail Superintendent has not been processed. The grievance raised by the learned counsel for the petitioner was that, despite the sentence being suspended by the Delhi High Court by the order dated 08 February 2024, the petitioner has not yet been released., The petitioner was compelled to approach the Delhi High Court seeking modification in the order dated 08 February 2024 to the extent that the petitioner be directed to furnish the bail bond to the satisfaction of the Delhi High Court Trial Court instead of the concerned Jail Superintendent., It was alleged that the formalities in relation to the acceptance of the bail bond by the Jail Superintendent take an unduly long time., The object of granting bail and suspending sentences is to release the accused or convict from imprisonment. In certain cases, interim bail is granted on medical grounds or other exigencies, as expressed by the applicant. In such a scenario the Delhi High Court fails to understand why the period of one to two weeks is taken by the Jail Superintendent for accepting the bail bonds., The Honourable Supreme Court of India has time and again reiterated the principle that deprivation of liberty for a single day is a day too many. The Supreme Court, in Suo Motu Writ Petition (Civil) No. 4 of 2021, issued guidelines for the compliance of bail orders, which are reproduced as follows: (i) The court which grants bail to an under‑trial prisoner or convict shall send a soft copy of the bail order by e‑mail to the prisoner through the Jail Superintendent on the same day or the next day, and the Jail Superintendent shall enter the date of grant of bail in the e‑prisons software or any other software used by the Prison Department. (ii) If the accused is not released within seven days from the date of grant of bail, the Superintendent of Jail shall inform the Secretary, Directorate of Legal Services and Advice, who may deputise a paralegal volunteer or jail‑visiting advocate to interact with the prisoner and assist in his release. (iii) The National Informatics Centre shall create necessary fields in the e‑prison software so that the date of grant of bail and date of release are entered by the Prison Department and, if the prisoner is not released within seven days, an automatic e‑mail shall be sent to the Secretary, Directorate of Legal Services and Advice. (iv) The Secretary, Directorate of Legal Services and Advice, with a view to ascertain the economic condition of the accused, may obtain assistance from Probation Officers or Paralegal Volunteers to prepare a report on the socio‑economic conditions of the inmate, which may be placed before the concerned court with a request to relax the conditions of bail or surety. (v) In cases where the under‑trial or convict requests that he can furnish bail bond or sureties once released, the court may consider granting temporary bail for a specified period to enable the accused to furnish bail bond or sureties. (vi) If the bail bonds are not furnished within one month from the date of grant of bail, the concerned court may suo motu take up the case and consider whether the conditions of bail require modification or relaxation. (vii) One of the reasons that delays the release of the accused or convict is the insistence upon local surety; it is suggested that courts may not impose the condition of local surety., The Honourable Supreme Court, in the same Suo Motu Writ Petition (Civil) No. 4 of 2021, also directed the adoption of the procedure termed FASTER (Fast and Secured Transmission of Electronic Records) to reduce the delay caused in forwarding bail orders to the jail authorities., Rule 7 is incorporated in Part E of Chapter 14 of the Delhi High Court Rules and Orders. The rule provides that the e‑authenticated copies of interim orders, stay orders and records of proceedings transmitted through the FASTER system shall be valid for compliance of the directions contained therein., Any order passed by the Delhi High Court directing the release of a prisoner from jail shall be sent directly to the concerned jail authorities through the FASTER cell., When passing a bail order, the Delhi High Court may direct that the bail bond be furnished directly to the Jail Superintendent, so that the prisoner is not required to be remitted to the Trial Court to facilitate immediate release., The delay at the instance of the Jail Superintendent in accepting bail bonds is not acceptable to the conscience of the Delhi High Court. The matter shall be registered as a suo motu petition and numbered., Notice of the present petition shall be issued to the Director General of Prisons and the Standing Counsel (Criminal), Government of the National Capital Territory of Delhi., Ms. Nandita Rao, learned Additional Standing Counsel, who is present in court, disputes the aforesaid position. She submits that the petitioner’s case is possibly an aberration and that delay normally does not occur on the part of the Jail Superintendent., She is requested to accept notice in the present case and file an appropriate affidavit., The matter is listed for compliance on 07 March 2024.
|
id_1648
| 0
|
Civil Writ Jurisdiction Case No. 20406 of 2018 Mohammad Alauddin Bismil Petitioner versus The State of Bihar and Others Respondents. For the Petitioners: Mister Rashid Izhar, Advocate; Mister Mohammad Anis Akhtar, Advocate. For the Respondents: Mister Shashi Shekhar Tiwary, Additional Counsel to Additional Attorney General 15. For the Madarsa Board: Mohammad Aslam Ansari, Advocate. For Intervenor: Mohammad Ziaul Qumar, Advocate., On the basis of a forged communication dated 16 December 2013, bearing Memo No. 2712 (Annexure-1, page 19 of the writ petition), certain educational institutions falling within the ambit and scope of Section 2(c) of the Bihar State Madarsa Education Board Act, 1981 (hereinafter referred to as the Madarsa Act) were granted financial aid in terms of Government Resolution No. 1090 dated 29 November 1980. Inviting attention to this fact, the petitioner Mohammad Alauddin Bismil filed the instant petition seeking directions under Patna High Court Civil Writ Jurisdiction Case No. 20406 of 2018 dated 24 January 2023. It is not in dispute that only on account of this endeavour and orders passed by Patna High Court a fact‑finding enquiry was initiated by the Government by constituting a committee of three members vide order dated 1 July 2020 (Annexure‑C, page 16 of the counter‑affidavit dated 28 August 2020 filed by Mohammad Tasnimur Rahman, Special Director, Secondary Education, Education Department, Government of Bihar), which submitted its report dated 17 July 2020 finding the letter leading to the grant of aid by the Government to be forged and, as such, recommended withdrawal of the aid for eighty‑eight educational institutions confined to the district of Sitamarhi, as also registering a First Information Report in connection therewith., Subsequent orders passed by Patna High Court, as evident from the affidavit dated 16 December 2022 filed by Shri Dipak Kumar Singh, Additional Chief Secretary, Education Department, Government of Bihar, resulted in the constitution of another three‑member committee by the Government for verifying the factual status of all six hundred nine educational institutions situated in other districts of Bihar that are in receipt of grants‑in‑aid under the resolutions of Patna High Court Civil Writ Jurisdiction Case No. 20406 of 2018 dated 24 January 2023. The statutory provisions of the Madarsa Act are required to be ascertained and examined. Vide communication dated 17 September 2021 (annexed with the affidavit of Shri Dipak Kumar Singh), the Senior Deputy Collector nominated by the District Magistrates of each of the following districts—Khagaria, Banka, Begusarai, Katihar, Madhubani, Muzaffarpur, Kishanganj, Sheohar, Siwan, Bhagalpur, West Champaran, Patna, Purnea, East Champaran, Rohtas, Sheikhpura, Samastipur, Saharsa, Sitamarhi, Saran, Supaul, Darbhanga, Vaishali, Araria, Aurangabad, Gaya and Gopalganj—is heading the committee with the District Education Officer and Block Education Officer of the respective district as its members. Despite the formation of these committees in September 2021, the Government has not placed on record the results of the enquiries. In defence, it is stated that the Additional Chief Secretary, Education Department, Government of Bihar has sent reminders to the District Magistrates, but this does not explain the failure to complete the enquiry within a time‑bound period, especially when the Government itself cancelled the grant in 2020 for at least eighty‑eight institutions in Sitamarhi and an FIR was registered. The outcome of that action has not been made known to Patna High Court, nor has any action been taken against the erring officers who, without verifying the factual matrix, allowed public money to be released to those institutions., Under these circumstances, Patna High Court issues the following directions: (a) The Additional Chief Secretary, Education Department, Government of Bihar shall forthwith convene a meeting of all the chairmen of the three‑member committees constituted vide communication dated 17 September 2021, with a further direction to ensure completion of the enquiry on an expeditious basis and not later than four weeks from today; (b) Until individual enquiries with respect to entitlement and compliance with statutory provisions of law and Government resolutions are concluded, the amount by way of grants‑in‑aid shall not be released in favour of six hundred nine educational institutions; (c) The Director General of Police, Bihar shall ensure that investigation in relation to the First Information Report already registered is expedited and that the latest status report is placed on record through his personal affidavit within the next two weeks; (d) The pendency of the present petition shall not impede the authorities from taking appropriate action in accordance with law, including cancellation of registration of the educational institutions, stopping the grant and/or initiating disciplinary proceedings against erring officers and officials; (e) The Additional Chief Secretary, Education Department, Government of Bihar shall ensure that no child suffers as a result of closure of any educational institution, whether due to non‑release of grants‑in‑aid or non‑compliance with statutory provisions. Every child up to a particular age has a constitutional and statutory right to education; therefore, where an institution is closed, the education of the children shall not be affected and they shall be admitted to any government or other educational institution nearer to their residence; (f) The Government has been releasing huge funds in favour of the educational institutions since 2013, and it is only on account of the directions issued by Patna High Court pursuant to the filing of the present petition that remedial measures have been taken. The Government is reminded that a detailed enquiry by a high‑level committee is required, as there are more than two thousand four hundred fifty‑nine educational institutions registered under the Madarsa Act. The Additional Chief Secretary, Education Department, Government of Bihar shall file his personal affidavit indicating whether these institutions are fulfilling the criteria, have the requisite infrastructure as stipulated under the Madarsa Act and the regulations framed thereunder, and whether remedial action, if required, has been taken. The affidavit shall be filed within the next two weeks.
|
id_1650
| 0
|
Godrej & Boyce Manufacturing Co. Ltd., a company incorporated under the provisions of the Indian Companies Act, 1913, having its office at Pirojsha Nagar, Vikhroli, Mumbai 400079, Petitioner, versus the State of Maharashtra, through the Government Pleader, High Court, Mumbai; the Union of India, through the Government of India, having its office at Federation of Railway Officers Association Office, 256‑A, Rail Bhavan, Raisina Road, New Delhi 110001; the Revenue and Forest Department, through the Joint Secretary to the State Government, having its address at Madam Cama Marg, Hutatma Rajguru Chowk, Mantralaya, Mumbai 400032; Deputy Collector (Land Acquisition) No.7, having his address at Pratapgarh Co‑op. Hsg. Soc., Vinayak Apartment, Opp. Haffkine Institute, 1st Floor, Parel Village, Mumbai 400012; the Collector, Mumbai Suburban District, having his address at Administrative Building, 10th Floor, Government Colony, College, Bandra (East), Mumbai 400051; National High Speed Rail Corporation Limited, having its address at Block 1104, Tower 2, India Bulls Finance, Elphinstone, Mumbai 400013; Municipal Corporation of Greater Mumbai, having its office address at Head Quarter, Near Chhatrapati Shivaji Terminus, Mumbai 400001, Respondents., Mr. Navroz Seervai, Senior Counsel with Ms. Arti Raghavan and Mr. Shanay Shah on behalf of M/s. Bachubhai Munim & Co. for the Petitioner. Mr. Ashutosh Kumbhakoni, Senior Advocate / Special Counsel with Ms. Jyoti Chavan, AGP for the State and Mr. Akshay Shinde, B Panel Counsel for Respondents Nos. 1, 3, 4 and 5. Mr. Anil Singh, Additional Solicitor General with Mr. T. J. Pandian, Mr. Aditya Thakkar, Mr. D. P. Singh, Ms. Savita Ganoo, Mr. Abhishek Bhadang, Ms. Smita Thakur, Mr. Chaitanya Chavan and Mr. Pranav Thackur for Respondent No. 2. Mr. Anil Singh, Additional Solicitor General with Mr. Aditya Thakkar, Ms. Akshay Puthran, Mr. Sargam Agrawal and Mr. Abhiraj Rao on behalf of M/s. S. K. Singhi & Co. LLP for Respondent No. 6. Ms. R. M. Hajare on behalf of Mr. Sunil Sonawane for Respondent No. 7. Mr. Jagatsing Girase, Deputy Collector, Land Acquisition, State of Maharashtra, present in Bombay High Court., Rule. Mr. Ashutosh Kumbhakoni, learned Senior Counsel, waives service for Respondents Nos. 1, 3, 4 and 5. Mr. Anil Singh, learned Additional Solicitor General, waives service for Respondents Nos. 2 and 6. Ms. Hajare, learned counsel, waives service for Respondent No. 7. The rule is made returnable forthwith., By this petition filed under Article 226 of the Constitution of India, the petitioner seeks a declaration that the impugned amendment, viz. Section 3 of the Maharashtra Act No. XXXVII of 2018, is repugnant to and does not prevail over the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the Fair Compensation Act) and is ultra vires Articles 14, 254(1) and 300A of the Constitution of India and is void ab initio., The petitioner has filed interim application No. 838 of 2020, inter alia, praying for an order and directions against the respondent to produce the letter dated 27 March 2020 and the entire material produced before the Hon'ble President of India for his assent under Article 254(2) of the Constitution of India to the Legislative Assembly Bill No. 7 of 2018 passed by the Maharashtra Legislative Assembly and Maharashtra Legislative Council., The petitioner has filed interim application No. 30586 of 2022, inter alia, praying for amendment in the writ petition and for seeking injunction against the respondents from taking any steps or acting pursuant to or in furtherance of or implementing the purported award dated 15 September 2022., The petitioner also seeks to challenge the constitutional validity of the first proviso to Section 25 of the Fair Compensation Act on the ground that it confers unguided, un‑canalised and unfettered powers on the concerned authority, is vague, is contrary to and subverts the object and purpose of the Act, violates Articles 14 and 300A of the Constitution of India and must accordingly be struck down. Consequently, all actions taken in pursuance of or furtherance of the first proviso to Section 25 must be declared illegal and void ab initio., The following questions fell for consideration of the Bombay High Court: (i) Whether the petitioner is estopped from challenging the acquisition of the writ land in view of the order passed by this Court on 4 September 2019 in Writ Petition No. 2131 of 2018 and thus has no locus to file this writ petition? (ii) Whether the petitioner voluntarily offered the second alternate land for acquisition and, having been accepted by the respondents, the petitioner could challenge the acquisition proceedings or could raise a dispute only regarding compensation? (iii) Whether the petitioner has discharged the burden to show a clear transgression of the constitutional principle and thus the presumption in favour of the constitutionality of the proviso to Section 25 cannot be drawn? (iv) Whether the personal hearing granted to the petitioner by one Deputy Collector and the impugned award passed by another Deputy Collector would violate the principles of natural justice and the award can be set aside on that ground? (v) Whether the acquisition proceedings have lapsed? (vi) Whether the first proviso to Section 25 conferring powers upon the appropriate Government to grant multiple extensions to make an award is un‑canalised, unregulated, arbitrary, vague and unconstitutional? (vii) Whether Respondent No. 1, i.e., the State of Maharashtra, acted beyond the scope of entrustment under Article 258(1) of the Constitution of India by making the State Amendment, i.e., Section 10A, to the Fair Compensation Act? (viii) Whether the corrections ordered in the impugned award are beyond the scope of Section 33 of the Fair Compensation Act? (ix) Whether the acquisition of the writ land of the petitioner, being for a public project of national importance, can be interfered with on the ground of alleged violation of natural justice or non‑compliance with Section 33, or whether the remedy of the petitioner is only to seek enhancement of compensation under Section 64? (x) What are the discretionary powers of the High Court under Article 226 while dealing with the challenge to the acquisition proceedings? (xi) Whether the Bullet Train Project, being a project of national importance and public interest, would prevail over the private interest of the petitioner as owner of the writ property?, It is the case of the petitioner that on 30 July 1948, a deed of conveyance was executed between Nowroji Pirojsha (as vendor) and the petitioner (as purchaser) for the lands constituting the entire village of Vikhroli including Sutadari lands. In April 1953, the petitioner filed a suit before this Court against the then State of Bombay seeking a declaration that it was the owner of the village of Vikhroli. On 8 January 1962, a consent decree was passed declaring that some portions of land in Vikhroli vested in the Government under Section 4(c) of the Salsette Estate (Land Revenue Exemption Abolition) Act, 1951, and that all other lands in Vikhroli were the property of the petitioner., On 17 April 1973, Respondent No. 1 filed a title suit in this Court, bearing Suit No. 679 of 1973, seeking a declaration that the suit lands (Survey Nos. 61 to 65) in Vikhroli Village belong to it., On 1 December 2014, the Right to Fair Compensation and Transparency in Rehabilitation and Acquisition, Resettlement (Amendment) Ordinance, 2014 was promulgated., It is the case of the petitioner that in September 2017, the petitioner learned from the website of Respondent No. 6 that the latter had commenced steps in furtherance of the Bullet Train Project, a high‑speed rail corridor connecting Mumbai in Maharashtra and Ahmedabad in Gujarat., On 27 March 2018, the Secretary (Legislation) to the Government of Maharashtra issued a letter to the Secretary to the Governor of Maharashtra, requesting that the Government of India be moved to obtain the consent of the Hon'ble President of India for the Maharashtra Amendment Bill, as its provisions were repugnant to the Fair Compensation Act. On 26 April 2018, the Maharashtra Act No. XXXVII of 2018 (Maharashtra Amendment) enacted by Respondent No. 1 came into effect., On 21 May 2018, the petitioner filed Writ Petition No. 2131 of 2018 (First Writ Petition) before the Bombay High Court for certain reliefs in respect of the proposed acquisition of its land in the village of Vikhroli, on the ground that the plot sought to be acquired for the Bullet Train Project would split the petitioner’s land in a manner rendering it unfit for its intended purpose of construction of an International Permanent Exhibition Cum Convention Complex., On 19 June 2018, this Court recorded that, as the petitioner was to submit a proposal for alternate land that could be acquired for the Bullet Train Project, the matter should be adjourned. On 31 July 2018, this Court recorded that parties had exchanged proposals in respect of acquisition of an alternate plot of land from the petitioner. On 25 September 2018, Respondent No. 4 issued a public notice indicating that the authorities were agreeable to acquire land bearing CTS No. 51/A (part) in Vikhroli (the Subject Plot) from the petitioner for the Bullet Train Project by way of private negotiation., On 15 November 2018, the District Level Valuation Committee, chaired by the Collector, Mumbai (Respondent No. 5), arrived at a compensation amount of Rs. 5,72,92,45,598 for the Subject Plot. On 29 January 2019, Respondent No. 6, by its letter to the petitioner, stated that the District Level Committee had fixed the compensation at Rs. 5,72,92,45,598 and that the National High Speed Rail Corporation Limited is bound by the rate/land value determined by the District Collector., On 9 August 2019, Respondent No. 2, through the Ministry of Railways, issued a notification stating that the Hon'ble President of India, under Article 258(1) of the Constitution of India, directed that, in respect of the acquisition of land for the Bullet Train Project, the Government of Maharashtra was to perform the functions of the Central Government under the provisions of the Fair Compensation Act., On 20 August 2019, Respondent No. 3 issued a notification (First Impugned Notification) under Section 10A of the Fair Compensation Act, stating that certain lands identified in the schedule (the Subject Plot) were required for the Bullet Train Project and that Respondent No. 1, in public interest, exempts the project from the application of the provisions of Chapters II and III of the Act., It is the case of the petitioner that on 4 September 2019, this Court passed an order disposing Writ Petition No. 2131 of 2018 whilst specifically reserving all rights and contentions of the parties, including the petitioner’s right to challenge the valuation of the Subject Plot which may be determined by Respondent No. 4 at the time of acquisition., On 25 October 2019, Respondent No. 5 issued a notification under Section 11(1) of the Fair Compensation Act (Second Impugned Notification), stating inter alia that the Subject Plot is required for a public purpose, viz. the Bullet Train Project., It is the case of the petitioner that on 2 November 2019, after disposal of the First Writ Petition, the petitioner came across the impugned notifications. In December 2019, the Maha Vikas Aghadi government came into power in the State of Maharashtra, and the Chief Minister announced a review of the Bullet Train Project., On 5 December 2019, being aggrieved by the impugned notifications, the petitioner filed the instant petition. On 17 January 2020, Respondent No. 5 issued a declaration under Section 19(1) of the Fair Compensation Act (Third Notification), stating that it was satisfied, after considering reports under Section 15(2), that the land was needed for the public purpose, and declared the land needed under Section 19(1). This was published on 21 January 2020., This matter was on board on 18 December 2018 when this Court, after recording reasons, refused to grant ad‑interim relief in favour of the petitioner. The order dated 18 December 2018 is not impugned., On 27 January 2020, pursuant to the Third Impugned Notification, Respondent No. 4 issued a notice under Section 21(1) and (4) of the Fair Compensation Act (Fourth Impugned Notification), declaring that the government had decided to seize/take possession of the Subject Plot. Interested persons were called upon to submit their nature of interest and the compensation claimed. The hearing of such claims was fixed for 28 February 2020., On 30 January 2020, the petitioner filed Interim Application No. 1 of 2020 in the present writ petition seeking production of (a) the entire material produced before the Hon'ble President of India for his assent under Article 254(2) of the Constitution of India; and (b) the report prepared by Respondent No. 5 under Section 15(2) of the Fair Compensation Act., On 14 February 2020, this Court permitted the petitioner to amend the petition to impugn the Third and Fourth Impugned Notifications and to make consequential amendments, which were carried out on 21 February 2020. On 15 June 2020, the petitioner received a letter dated 8 May 2020 from Mr. Vikas Gajare (Respondent No. 4), scheduling a hearing under the Fourth Impugned Notification on 17 June 2020., On 19 June 2020, pursuant to a praecipe filed by the petitioner, this Court listed the matter. The Court directed that, in view of Respondent No. 4 adjourning the hearing to 15 July 2020 and agreeing to conduct it by video conference, the petitioner may attend without prejudice to its rights and contentions. The order further recorded that if the petitioner is aggrieved by the award passed consequent to such hearing, it may move this Court for amendments and appropriate urgent interim relief., On 15 July 2020, the petitioner appeared before Respondent No. 4 (Mr. Vikas Gajare) through its advocates, without prejudice to its rights and contentions, and filed detailed written submissions dated 14 July 2020. On 15 October 2020, Respondent No. 6 issued a letter to the Chief Engineer, MCGM, with a copy to Respondent No. 4, requesting modification to the reservation of the Subject Plot under Development Plan 2034., On 8 December 2020, Mr. Vikas Gajare, acting as Respondent No. 4, prepared and forwarded a draft award for approval of the Divisional Commissioner, Konkan Region. On 20 February 2021, after scrutinising the draft award, the Divisional Commissioner issued a letter directing that further compliances be ensured., On 18 January 2021, a notification under the first proviso to Section 25 was issued by Respondent No. 5, extending by 12 months the period for making the award in respect of the Subject Plot. On 13 January 2022, a notification under Section 25 was published, extending the period for passing the award by twelve months from 17 January 2022. On 20 January 2022, Respondent No. 5 re‑published the extension notification., On 20 April 2022, the petitioner received a notice dated 23 February 2022, issued under Section 37(1AA) of the Maharashtra Regional and Town Planning Act, for necessary modifications to reservation under Development Plan 2034 in respect of the Subject Plot. On 26 April 2022, Respondent No. 1 scheduled a hearing on 10 June 2022 for the petitioner to make submissions and objections to the proposed modifications., On 19 May 2022, in pursuance of directions issued on 21 February 2021 by the Divisional Commissioner (Konkan Division), Respondent No. 6 scheduled a site visit to the Subject Plot on 24‑25 May. On 10 June 2022, the petitioner submitted its objections and suggestions to the proposed modifications to Development Plan 2034., On 15 September 2022, Respondent No. 4 conducted a hearing on the petitioner’s submissions, including valuation of the land, and an award was issued in respect of the petitioner’s Subject Plot (Impugned Award)., On 20 September 2022, Respondent No. 1 sought permission to deposit the compensation purportedly awarded under the Impugned Award. On 11 October 2022, this Court permitted the petitioner to amend the petition to impugn the Impugned Award and the two extension notifications dated 18 January 2021 and 20 January 2022 issued under Section 25, which amendments were carried out on 13 October 2022., On 14 November 2022, the petitioner received a letter from Respondent No. 4 scheduling a hearing on 18 November 2022 for correcting the Impugned Award. On 18 November 2022, the hearing was held by Mr. Jagatsing Girase (Respondent No. 4), wherein the petitioner made detailed submissions and filed written submissions and supporting authorities., On 23 November 2022, Ms. Nidhi Chaudhary, Collector (Respondent No. 5), signed and issued an order directing that the Impugned Corrections be carried out to the Impugned Award passed by Respondent No. 4. This order was forwarded to the petitioner by a letter dated 24 November 2022 from Jagatsing Girase., On 1 December 2022, this Court permitted the petitioner to impugn the Impugned Corrections to the Award, which amendment was carried out by the petitioner on the same day., The matter was on board on 20 December 2022 when the learned senior counsel appearing for the parties concluded their arguments. Learned Additional Solicitor General for Respondents Nos. 2 and 6 and Mr. Kumbhakoni, learned senior counsel for Respondents Nos. 1, 3 to 5, made an oral application that the respondents be permitted to take possession of the writ property during the pendency of the judgment, subject to further orders. At the request of the petitioner’s counsel, the Court granted an opportunity to file a brief note on some issues. The petitioner’s counsel stated that if the petitioner does not succeed, his client would not raise any issue in further proceedings before the Supreme Court or any other court, and that the acquisition proceedings had lapsed on the ground that the respondents did not take possession within three months of the award. The Court accepted this statement., It is the case of the petitioner that by a writing dated 7 July 1835 and a further writing dated 30 November 1837, a lease in perpetuity was granted by the then acting Collector of Thane to Framjee Cawasjee Banajee of the entire village of Vikhroli. Subsequently, by diverse assignments and acts in law and ultimately by a deed of conveyance dated 30 July 1948, executed between Nowroji Pirojsha and the petitioner, the lands constituting the entire village of Vikhroli, including the Sutidari lands, were sold, assigned, transferred and conveyed to the petitioner., The subject land, CTS No. 51/A (part), measuring approximately 39,570 square metres (equivalent to New Survey No. 64 (part)), does not form part of Old Survey No. 15 (part) or Old Survey No. 16 (part), which had vested in the then State of Bombay (now Respondent No. 1) by virtue of the consent decree. The Subject Plot vested in the petitioner, along with other parcels of land at Village Vikhroli, other than Old Survey Nos. 15 (part) and 16 (part)., It is submitted that on or about 17 April 1973, Respondent No. 1 filed a suit in this Court, Suit No. 679 of 1973, seeking a declaration that the lands bearing New Survey Nos. 61 to 65 in Village Vikhroli belong to Respondent No. 1. The title suit is pending before this Court and is at the stage of cross‑examination of the defendant’s witnesses (the petitioner)., It is submitted that in September 2017, the petitioner learned through the website of National High Speed Rail Corporation Ltd. (NHSRCL – Respondent No. 6) that it had commenced steps in furtherance of the Bullet Train Project between Mumbai and Ahmedabad. Since several notices were issued in connection with the intended acquisition of different pieces of land from the Subject Plot, the petitioner was constrained to approach this Court by filing Writ Petition No. 2131 of 2018 (the First Writ Petition), seeking reliefs directing Respondents Nos. 1 to 4 to accept the petitioner’s proposal recorded in letters dated 19 April 2018 and 3 May 2018., It is submitted that in the First Writ Petition, this Court passed an order dated 21 May 2018 directing the respondents to intimate the petitioner in writing before taking any coercive action. On 19 June 2018, Respondent No. 2 stated that the parties were discussing a proposal for an alternate plot and the matter stood adjourned as parties were in active negotiations. Correspondence was exchanged regarding an alternate plot that could be acquired for the Bullet Train project. On 31 July 2018, this Court recorded that certain proposals were exchanged concerning the alternate plot, i.e., the Subject Plot, to be made available for acquisition., It is submitted that on 25 September 2018, the Deputy Collector (Respondent No. 4) issued a public notice indicating that the authorities were ready to acquire the Subject Plot from the petitioner. The notice stated that the proposal was submitted by NHSRCL (Respondent No. 6) to the Collector (Respondent No. 5) to purchase lands by private negotiation for the Bullet Train Project and described the Subject Plot in the schedule. NHSRCL offered to pay an aggregate compensation of approximately Rs. 5,72,92,45,598 for the Subject Plot based on the determination of the District Level Valuation Committee chaired by the Collector, Mumbai (Respondent No. 5) in its report dated 15 November 2018. This was communicated to the petitioner by NHSRCL’s letter dated 29 January 2019. Private negotiations subsequently failed., It is submitted that by order dated 4 September 2019, the First Writ Petition was disposed of, reserving all rights and contentions of the parties, including the petitioner’s right to challenge the valuation of the alternate land that may be determined by Respondent No. 3 in the event of acquisition under the Fair Compensation Act., It is submitted that during the pendency of the First Writ Petition, on 20 August 2019, the Joint Secretary to the Government of Maharashtra (Respondent No. 3) issued a notification under Section 10A of the Fair Compensation Act, stating that certain lands identified in the schedule were required for the Bullet Train Project. This notification, the First Impugned Notification, was not disclosed to this Court nor to the petitioner in the First Writ Petition., It is submitted that on 25 October 2019, the Collector (Respondent No. 5), in furtherance of powers under Respondent No. 1’s notification dated 19 January 2015, issued a notification under Section 11(1) of the Fair Compensation Act, stating that the Subject Plot was required for a public purpose, i.e., the Bullet Train Project. This Second Impugned Notification purports to exempt the Bullet Train Project from the applicability of Chapters II and III of the Fair Compensation Act, exercising powers under Section 10A as amended by the Maharashtra Amendment., The petitioner’s senior counsel relied upon Article 254(2) of the Constitution of India and submitted that the Fair Compensation Act, dealing with acquisition, falls in the concurrent list. He submitted that the State Government suppressed documents produced before the Hon'ble President of India while applying for assent to the proposed amendment to Section 10 of the Fair Compensation Act. The assent obtained by the State Government from the Hon'ble President is not valid and is ultra vires under Article 254(1). He distinguished the Gujarat High Court judgment in Jigarbhai Amratbhai Patel v. State of Gujarat, 2019 SCC OnLine Guj 6988, and relied upon various judgments on the constitutional validity of Section 10A introduced by the Maharashtra Amendment., It is submitted that the State Government has exempted the Bullet Train Project from the provisions of Chapters II and III on behalf of the Central Government by exercising delegated powers. Every action taken by the State Government for the project has been on behalf of the Central Government and must be under its control. All notifications issued by the State Government are illegal and contrary to the Fair Compensation Act. The State Government has no power to acquire land for a multistate project and to grant exemption from Chapters II and III under Section 10A, which is not a Central statute., It is submitted that the first step towards acquisition of the petitioner’s land for the project was taken in 2018, when the Deputy Collector (Respondent No. 4) issued a notice dated 26 March 2018 proposing acquisition by private negotiation of a specific plot of the petitioner’s land at Vikhroli. By letters dated 19 April 2018 and 3 May 2018 addressed to the Deputy Collector (Respondent No. 4) and NHSRCL (Respondent No. 6) respectively, the petitioner gave a composite offer for acquisition of an alternate plot, expressly without prejudice to its rights and contentions that the mandatory provisions of Chapters II and III of the Fair Compensation Act have not been complied with. The petitioner thus conditioned the acquisition of its land on the appropriate government carrying out its mandate under the Act.
|
id_1650
| 1
|
It is submitted that the Respondents contentions proceed on a misreading of order dated 4th September 2019. The said order does not take away the right of the Petitioner to challenge the procedure adopted by the Respondent Authorities under the Fair Compensation Act. Moreover, the said order in paragraph 3, clearly records that despite efforts of the parties, they were unable to reach a mutually acceptable agreement. This in itself shows that the proposed acquisition of the Subject Plot by direct purchase/private negotiations had failed and thus, the parties were free to adopt and explore their remedies in law, which is evident from the express language of paragraph 5 of the said order dated 4th September 2019., It is submitted that during the pendency of the First Writ Petition till its disposal by the order dated 4th September 2019, the First Impugned Notification was neither disclosed to the Supreme Court of India nor to the Petitioner, therefore the question of the order dated 4th September 2019 precluding the present challenge cannot and does not exist. It is submitted that for the aforesaid reasons, the Respondents can hardly contend that the Petitioner cannot adopt appropriate remedies in law by virtue of the order dated 4th September 2019. Award was not issued by the individual who heard the Petitioner., It is submitted that the Impugned Award violates the basic principles of natural justice as it was not passed by the individual who heard the Petitioner's submissions inter alia as to the lack of jurisdiction and the compensation claimed. It is submitted that Section 21 of the Fair Compensation Act requires that the Collector publish a public notice, stating that the government intends to take possession of certain land. Persons interested are required to be given notice to appear for a hearing (to state the nature of their interest in the land, and the particulars of compensation claimed)., It is submitted that Section 23 of the Fair Compensation Act stipulates that the Collector shall proceed to enquire into objections (if any) which any person interested has stated pursuant to a notice given under Section 21, and further, that the Collector shall make an award under his hand. It is thus essential that an award is issued by the very person who has heard and considered the objections under Section 23. A notice under Section 21 was issued by Respondent No. 4 (Ms. Sonali Mule) on 27th January 2020. The hearing pursuant to the notice under Section 21 was eventually held on 15th July 2020 pursuant to the order dated 19th June 2020 passed by the Supreme Court of India in the present Writ Petition, viz. without prejudice to the contentions raised in the above Writ Petition. On this date, the Petitioner (through its advocates) appeared before Respondent No. 4 (Mr. Vikas Gajare). The Petitioner (through its advocates) also filed detailed written submissions in advance of the hearing on 15th July 2020. However, the Impugned Award has been issued after more than two years by Respondent No. 4 (Mr. Santosh Bhise)., It is submitted that the principles of natural justice demand that the person who hears a party must be the one who renders the decision in respect of the party. In support of this submission, he relied upon the judgment in cases of Gullapali Nageswara Rao & Ors. vs. Andhra Pradesh State Road Transport Corporation & Anr., AIR 1959 SC 308 (para 31) (Constitution Bench); Automotive Tyre Manufacturers Association v Designated Authority & Ors., (2011) 2 SCC 258 (para 83)., It is submitted that this principle has been affirmed by the Supreme Court of India in the context of land acquisition proceedings too. In the context of hearings under Section 5A of the Land Acquisition Act, 1894, the Supreme Court of India has repeatedly affirmed that if one person were to hear, and another to decide, then personal hearings become an empty formality. In support of this submission, he relied upon the judgments of the Supreme Court of India in cases of Laxmi Devi v State of Bihar & Ors., (2015) 10 SCC 241, at para 9; Union of India & Ors. v Shiv Raj & Ors., (2014) 6 SCC 564, at paras 12, 17 to 20., It is submitted that Section 23 of the Fair Compensation Act underscores this principle by its plain terms. Section 23 is titled Enquiry and land acquisition award by Collector. The provision requires that the Collector enquire into the objections (if any) which any person interested has stated pursuant to a notice given under Section 21. It then provides that the Collector shall make an award under his hand. It thus statutorily affirms the cardinal principle of natural justice that he who hears must decide., It is submitted that the respondents have attempted to gloss over the fact that the award was passed by an officer other than the one who granted a hearing to the Petitioner by contending that the draft award was prepared by Mr. Vikas Gajare (who had given the Petitioner a personal hearing on 15th July 2020), and Mr. Santosh Bhise (under whose name the Award was issued) merely complied with the objections as raised by the Divisional Commissioner, Konkan Region, on the draft award prepared by Mr. Vikas Gajare., It is submitted that the draft award as prepared by Mr. Vikas Gajare is not the same as the Impugned Award. Accordingly, the Award is a nullity and stands vitiated as a result of this serious violation of the principles of natural justice., Learned senior counsel for the petitioner invited our attention to Rule 18 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Maharashtra) Rules, 2014 (the said 2014 Rules) and submitted that the Divisional Commissioner under Section 5 of the Maharashtra Land Revenue Code is the Chief Controlling Authority in matters in his division. Since the Divisional Commissioner is the Custodian and Chief Controlling Authority of Land Revenue in his division, his administrative approval has been mandated in the 2014 Rules. He submitted that the said 2014 Rules does not contemplate a hearing to be given by the Divisional Commissioner, Konkan Division as this was an internal administrative process of the State Government. He submitted that these rules are framed by the State Government. The State Government cannot do any act indirectly which it cannot do directly., Mr. Seervai, learned senior counsel, fairly admitted that it is not the case of the petitioner in the writ petition that the Divisional Commissioner, Konkan Division was required to grant personal hearing to the petitioner on the draft award submitted by the Deputy Collector or that the recommendations made by the Divisional Commissioner, Konkan Division were in violation of principle of natural justice., It is submitted that the Petitioner shall demonstrate that the entire proceedings for the acquisition of the Subject Plot have lapsed as: (i) The first proviso to Section 25 is unconstitutional, and should be struck down as arbitrary, vague, conferring unchannelled and unregulated power to the appropriate Government; (ii) Without prejudice to the aforesaid submission, the first proviso to Section 25, properly construed, only permits a single extension. Thus, the second extension notification irrespective of the date of its publication, is invalid, and the entire proceedings for the acquisition of the Subject Plot stand lapsed; (iii) The Extension Notifications are void and invalid, as they are passed in contravention of the clear requirements of the second proviso to Section 25 as (i) there were no objective circumstances warranting the extensions of the time period for making the award; and (ii) the Extension Notifications were not published on the website of the authority concerned as mandated., It is submitted that the declaration dated 17th January 2020 under Section 19(1) in the present proceedings was published on 21st January 2020. The Award was passed almost thirty-two months thereafter i.e. on 15th September 2022., It is submitted that the Respondents have sought to contend that despite the substantial delay in the making of the Award, the land acquisition in respect of the Subject Plot had not lapsed as it contends that Respondent No.5 purported to issue two successive notifications (Extension Notifications) to extend the time period for making the award in respect of the Petitioner's Subject Plot: (i) First, a decision dated 18th January 2021 published in the State Government Gazette on 18th January 2021, to extend the period to make an award by twelve months; (ii) Second, a further decision dated 19th January 2022, that was published in the State Government Gazette on 20th January 2022., It is submitted that Section 25, by its plain terms, only permits a single extension of the statutory period of twelve months (and does not contemplate multiple extensions). The first proviso to Section 25 provides the appropriate Government shall have the power to extend the period of twelve months. The power to extend is only in respect of the period of twelve months. The period of twelve months can only be extended by a single extension, as should an appropriate government issue multiple extensions, the successive extensions would no longer be in respect of the period of twelve months, but of the further extended period., It is submitted that multiple extensions of the statutorily prescribed time period (twelve months from the publication of the declaration under Section 19(1)) would defeat the object and purpose of securing fair compensation for land owners. The objects and purpose of the Fair Compensation Act state that it seeks to ensure a comprehensive compensation package for landowners through a scientific method for calculation of the market value of land. Should acquisition proceedings remain pending indefinitely, the determination of compensation on the basis of outdated market value of the land would be illusory, and would defeat the central objective of securing fair compensation for the land owners., It is submitted by the learned senior counsel that under Section 25 of the Fair Compensation Act, the Collector is bound to make an award within twelve months from the date of publication of declaration under Section 19 and if no award is made within that time, the entire proceedings for the acquisition of the land shall lapse. Though the Appropriate Government is empowered to grant extension, if the award could not be made by the Collector within the period of twelve months from the date of publication of Declaration under Section 19, only one extension at the most is permissible. The word twelve months referred to in the first proviso to Section 25 of the Fair Compensation Act implies that there is no question of any multiple extensions permitted under the said proviso to Section 25., It is submitted that by a second extension, if any, the Government is not extending the period of twelve months prescribed under Section 25 but the Government has further extended the extended period of twelve months initially granted by it. In this case, the State Government has granted two extensions of one year each which is not permissible. He submitted that though the first extension could be more than twelve months, only one extension was permissible and not more than one., It is submitted that the case of the respondents that the State Government could grant two extensions or more is totally contrary to the object and purpose of empowering the State Government to grant extension under the first proviso to Section 25 of the Fair Compensation Act. There are no principles prescribed under the said Section to guide the authority about the time of extension and period of extension. The presumption of the constitutional validity of the second extension would be ultra vires., In his alternate arguments, learned senior counsel submitted that the first proviso to Section 25 has to be read down. In support of this submission, he relied upon the judgments of the Supreme Court of India in case of Dwarka Prasad Laxmi Narain vs. State of Uttar Pradesh & Ors. (supra) and in case of Shayara Bano Vs. Union of India & Ors. (supra)., It is submitted by the learned senior counsel that the entire acquisition proceedings have thus lapsed after expiry of the initial period of twelve months prescribed under Section 25. He submitted that the second extension has been issued after the lapse of acquisition proceedings and is thus of no consequence., In his alternate submission, learned senior counsel submitted that the State Government has not produced any material on record to demonstrate that any circumstances existed for grant of such extensions justifying the same. He submitted that neither the first nor the second extension met the test of the first proviso to Section 25 of the Fair Compensation Act which requires demonstration of circumstances existing thereby justifying the extensions., It is submitted that if the Court were to hold that the language of the first proviso to Section 25 permits more than one extension, the provision would be unconstitutional being ultra vires Articles 14 and 300A of the Constitution of India, as being manifestly arbitrary as well as expropriatory. It is well settled that a Court should endeavour to interpret a provision so as to save it from the vice of unconstitutionality, if necessary by reading down the provision. In the present case the Court ought to read down the first proviso to Section 25 and restrict its applicability to a single extension of the period of twelve months in order to save it from unconstitutionality. In support of this submission, he relied upon the judgment in case of Jagdish Pandey v Chancellor, University of Bihar, (1968) 1 SCR 231, at para 9., It is submitted that applying the principles enunciated by the Supreme Court of India above, it is clear that the first proviso to Section 25 cannot be construed to permit multiple extensions. The second extension notification is therefore invalid, illegal and ultra vires the statute. Accordingly, the entire proceedings for the acquisition of the Subject Plot stood lapsed on 17th January 2022 (when the first extension expired), and the Impugned Award is accordingly void ab initio and a nullity., It is submitted that the first proviso to Section 25 confers upon the appropriate Government the discretion to extend the statutorily prescribed time period for making the award (i.e., twelve months), if in its opinion, circumstances exist to justify the same. This provision is inherently arbitrary and vague as it (i) contains no prescriptions or guidelines as to what circumstances warrant the exercise of such discretion; (ii) provides no stipulation as to the duration/extent to which the time period for making the award may be extended. It thus confers wide, uncontrolled, unchannelled power on the appropriate Government, that is unguided by any criteria or guidelines. There is also no procedure or mechanism by which a party that is aggrieved by an improper or unlawful exercise of such discretion may challenge the same., It is submitted that the Supreme Court of India has recognised that a law that confers power on an authority is arbitrary if the power is unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. In support of this submission, he relied upon the judgment in case of Dwarka Prasad Laxmi Narain v State of Uttar Pradesh & Ors., (1954) 1 SCR 803, at paras 7, 8 and 9., It is submitted that the Supreme Court of India in case of Shayara Bano v Union of India & Ors. (2017) 9 SCC 1, has articulated the test for when a law may be regarded as manifestly arbitrary (and therefore unconstitutional, for violating Article 14 of the Constitution of India) (para 101): The test of manifest arbitrariness, therefore, as laid down in the aforesaid judgments would apply to invalidate legislation as well as subordinate legislation under Article 14. Manifest arbitrariness, therefore, must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary., It is submitted that the Extension Notifications are a striking instance of how the unchannelled nature of the power under the proviso to Section 25 can be abused: the time period for making an award has been extended to thrice the statutorily contemplated period. There is no determining principle as to what circumstances warrant the exercise of the power (for instance, whether it can be exercised to the detriment of land owners, or whether it can be exercised if the reason for delay in making the award are attributable to the appropriate Government). In the present instance, the test of manifest arbitrariness would apply squarely to the first proviso to Section 25 as it is wholly irrational how a time-bound expropriatory procedure under the Fair Compensation Act can be extended indefinitely by the relevant authority, in a manner that negates one of the fundamental objectives of the statute i.e., to protect the rights of land owners inter alia by securing fair compensation., It is submitted that the Supreme Court of India, in case of Thakur Raghubir Singh v. Court of Wards, Ajmer, [1953] S.C.R. 1049, was concerned with the question of the reasonableness of the provisions of Section 112 of the Ajmer Tenancy and Land Records Act (XLII of 1950) which provided that if a landlord habitually infringes the rights of a tenant under this Act, he shall, notwithstanding anything in Section 7 of the Ajmer Government Wards Regulation, 1888 (1 of 1888), be deemed to be a 'landlord who is disqualified to manage his own property' within the meaning of Section 6 of the said Regulation and his property shall be liable to be taken under the superintendence of the Court of Wards. The determination of the question whether a landlord habitually infringed the rights of a tenant was left to the Court of Wards. While holding the section to be void (as constituting an unreasonable restriction on the fundamental right to property), the Court observed that when a law deprives a person of his possession of his property for an indefinite period of time merely on the subjective determination of an executive officer, such a law cannot be described as reasonable because it completely negates the fundamental right by making its enjoyment depend on the mere pleasure and discretion of the executive, the citizen affected having no right to have recourse for establishing the contrary in a civil court., Without prejudice to the aforesaid submission, it is submitted that the first proviso to Section 25 of the Fair Compensation Act is void for vagueness. Neither the nature of extensions (whether single or multiple, and for what duration), nor the circumstances under which it may be resorted to have been stipulated. It is submitted that when a law is inherently vague, unintelligible, and confers wide, unfettered power on an authority, it is inherently arbitrary and violates Article 14 of the Constitution of India. In support of this submission, he relied upon the judgment of the Supreme Court of India in case of Harakchand Ratanchand Banthia & Ors. v Union of India & Ors., 1969 (2) SCC 166, at para 21. The vagueness in the first proviso to Section 25 results in infringing upon the constitutional right to property, and a person's enjoyment of this right given the uncertainty as to the manner and duration for which such property could be the subject of land acquisition proceedings., It is submitted that such a wide, vague, unchannelled power is inherently and manifestly arbitrary, and in violation of Article 14 of the Constitution of India. The first proviso to Section 25 of the Fair Compensation Act must accordingly be struck down as unconstitutional., Without prejudice to the aforesaid submission, it is submitted that the second proviso to Section 25 mandates that three conditions must be cumulatively satisfied for the decision of extending the time period to be valid: (a) that the decision to extend the period be recorded in writing; (b) that the decision be notified; (c) that the same be uploaded on the website of the authority concerned. Any extension only takes effect upon the satisfaction of all three conditions., It is submitted that neither of the Extension Notifications were published on the website of the concerned authority. The publication of the notification on the website of the concerned authority is imperative, and statutorily mandated so that affected persons may be notified about whether the land acquisition proceedings in respect of their property remains pending, or have lapsed. The Respondents have proffered no response or answer in respect of their failure to publish the notifications on the website of the concerned authority., It is submitted by the learned senior counsel that the notifications granting extension by the State Government in this case have not been uploaded on the website of the concerned authority. The petitioner thus did not come to know about the extensions. He relied upon Section 11(d) and 11(e) of the Fair Compensation Act and submitted that the notification has to be uploaded on the website of the Appropriate Government in the affected areas in such manner, as may be prescribed., It is submitted that the Deputy Collector has admitted in the impugned award that the extensions were not uploaded on the website of the authority. Even if the notifications are published in the Maharashtra Government Gazette, it would not amount to uploading the notification on the official website. He submitted that though in the affidavit-in-reply filed by the State Government, it is alleged that the extensions were recorded in writing and the notifications were published on the official website, the State Government has not disclosed about such official website in which the notifications are alleged to have been published., It is submitted that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. In support of this submission, he relied upon the judgments of the Supreme Court of India in cases of MCGM v Abhilash Lal & Ors., (2020) 13 SCC 234, at para 39; Nareshbhai Bhagubhai & Ors. v Union of India, (2019) 15 SCC 1, at para 31 (both of which rely on Nazir Ahmad v. King Emperor, 1936 SCC Online PC 3 = AIR 1936 PC 253, at para 588). The failure to publish the Extension Notifications in the manner prescribed goes to the root of the proceedings, as it affects the rights of the petitioner/land owner. It renders the Extension Notifications non est and illegal. Consequently, the entire proceedings in respect of the acquisition of the Subject Plot have lapsed., It is submitted that the first proviso to Section 25 permits the appropriate Government to extend the time period of twelve months for making the award if in its opinion, circumstances exist justifying the same. It is submitted that under the first proviso to Section 25, the satisfaction of the appropriate Government as to the existence of circumstances that warrant the extension of the time period for issuance of the award cannot be a subjective satisfaction, and must necessarily rest on objective, legitimate criteria that are in consonance with the legislative policy, objective and purpose of the statute., It is submitted that a plain reading of the Extension Notifications makes it apparent that there was no valid reason for the two extensions. The purported circumstances set out in the Extension Notifications in order to justify the multiple extensions of the time period for making the award under Section 25 are untenable., The first extension notification dated 18th January 2021 extended the time period on the purported ground that the proforma award has been submitted to the Divisional Commissioner, Konkan Division for approval and approval has not yet been received. No particulars (such as the date when the proforma award was so submitted or why it took Respondent No.4 time to so submit the proforma award or why the Divisional Commissioner, Konkan Division would require twelve months to comment on a proforma award) are disclosed., The second extension, issued a year later, stated that the draft award had been submitted to the Divisional Commissioner, Konkan Division, and that the directions issued by him could not be complied with before the period expired. Further, it notes that huge losses would be sustained by the government, should the proceedings lapse, and it has to undertake the exercise of acquisition again., It is submitted that the aforementioned circumstances do not warrant inordinate, multiple extensions of the time period for making an award. It is submitted that the hardship and prejudice caused to the petitioner as a result of such extensions has not even been considered by Respondent No.5 in arriving at its decision to extend the time period for making the award, thus making it clear that legitimate criteria were not considered in making the decision in respect of the Extension Notifications., It is submitted that the Respondents have also failed to address the petitioner's contention as to how the first proviso to Section 25 is contrary to the stated objective of the Fair Compensation Act of securing fair, scientifically computed compensation for land owners. It is submitted that the Respondents have purported to assert that such a proviso exists to prevent unscrupulous persons from benefitting from their own wrongs. The Respondents have sought to allege that the Extension Notifications have been necessitated by the dilatory tactics of the petitioner., It is submitted that neither of the Extension Notifications makes any reference to actions by the petitioner that have necessitated an extension in the time period for making an award. It is settled law that when a state functionary makes an order based on certain grounds, the validity of such order is to be judged for the stated reasons, and the order cannot be supplemented by fresh reasons (through an affidavit or otherwise). In support of this submission, he relied upon the judgment of the Supreme Court of India in case of Mohinder Singh Gill & Anr. v Chief Election Commissioner, New Delhi & Ors., (1978) 1 SCC 405, at para 8. The Supreme Court of India has clearly stated that public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. In support of this submission, he relied upon the judgment of the Supreme Court of India in case of Commissioner of Police, Bombay Vs. Gordhandas Bhanji (1951) SCC 1088, at para 9., It is submitted that under Article 258(1) of the Constitution of India, the President has the right to entrust, either conditionally or unconditionally, to a State Government or to its officers, functions in relation to any matter to which the executive power of the Union extends., It is submitted that for multi-state projects like the Bullet Train Project (spanning Gujarat, Dadra and Nagar Haveli and Maharashtra), the appropriate Government in terms of Section 3(e)(iv) of the Fair Compensation Act is the Central Government (in consultation with the concerned State Governments or Union Territories). By the Presidential Notification dated 9th August 2019 and in exercise of the powers conferred under Article 258(1) of the Constitution of India, the President (with the consent of the Government of the State of Maharashtra) directed, inter alia, that the functions of the Central Government as appropriate government under the said Act may be performed by the Government of Maharashtra., It is submitted that Section 10A stipulates that the State Government may, in the public interest, by notification in the Official Gazette, exempt any of the following projects from the application of the provisions of Chapter II and III of this Act. It is impermissible for the State Government (acting as a delegate under the aforementioned Presidential Notification) to exercise this power in respect of projects for which the Central Government is the appropriate Government, as it would permit the Central Government to circumvent mandatory provisions of the central statute.
|
id_1650
| 2
|
The Fair Compensation Act does not permit the Central Government to exempt any project from the application of Chapters II and III of the Fair Compensation Act, other than by invoking the urgency provisions under Sections 9 and 40 of the Fair Compensation Act. It is submitted that the Central Government therefore cannot entrust its delegate (the Government of Maharashtra) with a power it does not possess. A delegate cannot exercise powers that the delegator does not possess, nor can the latter delegate a power that it does not itself possess. In support of this submission, reliance is placed on the judgment of the Andhra Pradesh High Court in the case of Kasturi Rangachari v. Chairman, Food Corporation of India & Ors., (1981) 111 L.L.J. 237 AP, paragraph 15., It is submitted that the Maharashtra State Government, in exercise of the powers entrusted under the Presidential Notification dated 9 August 2019, cannot go beyond the scope of its entrustment and exempt the Bullet Train Project from the application of Chapters II and III of the Fair Compensation Act by invoking Section 10A. Reliance is placed on the judgment of the Supreme Court of India in the case of H. Anraj & Ors. v. State of Maharashtra, (1984) 2 SCC 292, paragraph 8., It is submitted that the Presidential Notification makes it abundantly clear that the Government of Maharashtra can act only as a delegate of the Central Government for purposes of the Bullet Train Project, including for the acquisition of land. However, by the First Impugned Notification, the State Government, in purported exercise of its powers under Section 10A, exempted the Bullet Train Project from the application of the provisions of Chapters II and III of the Fair Compensation Act. The Central Government, as the appropriate Government for the Bullet Train Project, whether in consultation with the State Government or otherwise, is confined to the provisions of the central statute. It is therefore not entitled to exercise powers under Section 10A of the Fair Compensation Act, either directly or indirectly through a delegate., It is submitted that the foregoing contentions have not been considered or decided upon by the Gujarat High Court in the case of Jigarbhai Amratbhai Patel., It is submitted that after the Impugned Award was passed, the Deputy Collector (Respondent No.4) sought to correct purported clerical errors in the Impugned Award. The so‑called clerical errors were: (i) amending the reference to the second extension notification published on 20 January 2022 to include a reference to an earlier publication of the notification on 13 January 2022; and (ii) altering the date for computing interest. Collectively these are referred to as the Impugned Corrections., Before carrying out the Impugned Corrections, the Deputy Collector (Respondent No.4) addressed several letters to schedule a hearing to consider the objections of the Petitioner to the Impugned Corrections. The hearing was held on 18 November 2022. On the date of hearing, the Petitioner, through its advocates, appeared before Mr. Jagatsingh Girase (holding the office of Respondent No.4) and made detailed submissions, and tendered written objections to the Deputy Collector (Respondent No.4)., It is submitted that on 24 November 2022, Mr. Jagatsingh Girase forwarded to the Petitioner the order containing the Impugned Corrections by his letter dated 23 November 2022. However, the order issued by exercising the purported powers under Section 33 of the Fair Compensation Act, containing the Impugned Corrections, was signed by Ms. Nidhi Choudhary, as the Collector (Respondent No.5)., It is submitted that Section 33 of the Fair Compensation Act contemplates that the Collector (Respondent No.5) may correct any clerical or arithmetical mistakes in the award or errors arising therein. Under the guise of exercise of the purported powers under Section 33 of the Fair Compensation Act, the Deputy Collector (Respondent No.4) corrected point No.5 of the Impugned Award whereby it now seeks to add the date of 13/01/2022 before the date of 20/01/2022 (both being notifications under Section 25 of the Fair Compensation Act issued in an attempt to save the entire acquisition proceeding from lapsing). It is submitted that this exercise does not amount to correcting either a clerical or arithmetical mistake., It is submitted that under the guise of correcting the Impugned Award, the Collector (Respondent No.5) has effectively supplemented the Impugned Award, which is impermissible. Language and intention similar to that of Section 33 of the Fair Compensation Act is also to be found in Section 152 of the Code of Civil Procedure, 1908. Powers under Section 152 of the Code of Civil Procedure are invoked by courts to rectify such arithmetical or clerical mistakes in an order, judgment or decree, arising from any accidental slip or omission. The courts under Section 152 of the Code of Civil Procedure are not empowered to revisit a matter and to find that a better order or decree could (or should) have been passed. This test has been laid down by the Hon'ble Supreme Court of India in the case of Jayalakshmi Coelho v. Oswald Joseph Coelho, reported in (2001) 4 SCC 181, paragraph 14 thereof. This test shall also apply to cases under Section 33 of the Fair Compensation Act, as the intent and purport of the provision is similar to that of Section 152 of the Code of Civil Procedure., It is submitted that the Karnataka High Court, specifically in the context of Section 33, in the case of Gogga Sidramiah v. Special Land Acquisition Officer, Dharwad, reported in Indian Law Reports 2018 KAR 2883, paragraph 12, held that: 'An arithmetical mistake is a mistake in calculation, while a clerical mistake is a mistake of writing or typographical error by accidental slip or omission. Such errors may be due to careless mistake or the ones made unintentionally or unknowingly. A matter requiring elaborate arguments or evidence on a question of fact or law, for the discovery of such errors cannot be categorized as errors arising out of the award so as to invoke the provisions of Section 33 of the Act.', It is submitted that the Impugned Corrections were not merely clerical or arithmetical and the Petitioner accordingly filed detailed written objections before the Deputy Collector (Respondent No.4) which have been conveniently overlooked by the Collector (Respondent No.5). Not a single contention of the Petitioner has been considered in the order passed by the Collector (Respondent No.5) incorporating the Impugned Corrections in the Impugned Award., It is submitted that if the first of the Impugned Corrections, i.e., the inclusion of a reference to the publication of the extension notification on 13 January 2022, is sustained, then the same virtually amounts to a substantive alteration of the Impugned Award. Without a reference to the publication of the extension notification on 13 January 2022, the entire acquisition proceedings in respect of the Subject Plot stand lapsed, in terms of Section 25 of the Fair Compensation Act. It is clear that under the guise of a correction, Respondents No.4 and 5 have sought to illegally revive an acquisition proceeding that had lapsed., The Collector (Respondent No.5) has no power to do so under the extremely limited powers under Section 33 of the Fair Compensation Act, as after passing of the Impugned Award, the concerned authority (in the present case Mr. Santosh Bhise, the then Deputy Collector Respondent No.4) becomes functus officio. This is the reason why the scope of Section 33 of the Fair Compensation Act is restricted and cannot be misused, as has been done in the present case., It is submitted that the Impugned Corrections have been issued in gross violation of the provisions of the Fair Compensation Act and the principles of natural justice. The principles of natural justice demand that the person who hears a party must be the one who renders the decision in respect of the party. This is embodied in Section 33 of the Fair Compensation Act, which makes it clear that the same person must hear and decide upon any objections to any corrections sought to be made in respect of the award. In the present instance, the Impugned Award was passed by Mr. Santosh Bhise (Deputy Collector Respondent No.4). The Petitioner’s objections as to corrections sought to be made to the Impugned Award were heard by Mr. Jagatsingh Girase (Deputy Collector Respondent No.4) on 18 November 2022. However, the order permitting such corrections (and summarily dismissing the Petitioner’s objections to the corrections) was issued on 23 November 2022 and signed by Ms. Nidhi Chaudhary (Collector – Respondent No.5)., It is submitted that even otherwise, the Petitioner’s objections are not dealt with by the Collector (Respondent No.5), much less even adverted to in the order containing the Impugned Corrections. The Impugned Corrections are accordingly unreasoned, arbitrary and in violation of the principles of natural justice. The Impugned Corrections are nothing but an attempt to alter and amend the Impugned Award, which is impermissible under Section 33 of the Fair Compensation Act., It is submitted that the right to property has been recognised by the Hon'ble Supreme Court of India as not only a constitutional right but also a human right. In support of this submission, reliance is placed on the judgment in the case of Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. & Ors., paragraphs 53‑56. It is a well‑settled legal principle that legislation that affects a person’s right to property (or has an expropriatory effect) is to be interpreted strictly. In support of this submission, reliance is placed on the judgment in the case of Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. & Ors., (2007) 8 SCC 705, paragraphs 57‑58. Any restriction or regulation of the right of the owner of a property to use or develop it must be interpreted in a manner so as to least interfere with such right., It is submitted that from the date of the publication of the preliminary notice under Section 11(1) of the Fair Compensation Act, there is a prohibition from undertaking any transaction or creating any encumbrance in respect of the land (Section 11(4)). In the present instance, the Section 11(1) notification was issued on 25 October 2019. Should the first proviso to Section 25 be read to confer the appropriate Government with the power to make multiple extensions without any fetter on the extent or duration of such extension, it would result in grave injustice to the landowner whose right to use the land remains indefinitely suspended., It is submitted by the learned senior counsel that the draft award prepared by the Deputy Collector was sent to the Divisional Commissioner, Konkan Division, for approval. The Divisional Commissioner, Konkan Division, sent the draft back to the Deputy Collector having found certain defects in the draft award and directed steps to modify the draft award with the purpose of the 2034 Development Plan., It is submitted that in the Impugned Award, an incorrect statement is made that the earlier writ petition filed by the petitioner was dismissed, though the said writ petition was disposed of keeping all the contentions of the petitioner open., It is submitted that the land acquisition proceedings in respect of the Subject Plot had lapsed, inter alia, on account of the second extension notification dated 20 January 2022 having been issued after the expiry of the period stipulated under the first extension notification (which period expired on 17 January 2022)., It is submitted that the Respondents have denied this and have sought to contend that the second extension notification was in fact originally published on 13 January 2022 and inadvertently republished on 20 January 2022 on account of a bona‑fide mistake. It is the Respondents’ case that the second extension notification under the proviso to Section 25 was in fact issued by Respondent No.5 on 12 January 2022, sent to the Directorate of Government Printing Press on the same date, and published by the Government Printing Press on 13 January 2022. The Respondents only identified this error in the Impugned Award after the Petitioner filed its Interim Application No. 30586 of 2022 dated 23 September 2022, contending that the proceedings had lapsed., It is submitted that Respondent No.4 thereafter sought to correct purported clerical errors in the Impugned Award, including amending the reference to the second extension notification published on 20 January 2022 to that of the extension notification published on 13 January 2022. Respondent No.4 (Mr. Jagatsingh Girase) issued various letters to schedule a hearing to consider the Petitioner’s objections to the corrections of the purported clerical errors to the Impugned Award. However, on account of the gross inadequacy of the notice provided for the scheduled hearing, the Petitioner was repeatedly constrained to request an adjournment of the hearing, and the hearing was finally conducted on 18 November 2022, further to a letter dated 14 November 2022 issued by Respondent No.4., It is submitted that by a letter dated 18 November 2022, addressed without prejudice to the Petitioner’s contentions raised in the present writ petition, the advocates for the Petitioner filed the Petitioner’s written arguments to the purported correction/rectification to the award and appeared before Respondent No.4 (Mr. Jagatsingh Girase) for a personal hearing on 18 November 2022. By a letter dated 24 November 2022, Respondent No.4 (Mr. Jagatsingh Girase) informed the Petitioner that the award dated 15 September 2022 had been corrected/rectified by an order dated 23 November 2022., The aforementioned Extension Notifications (which phrase shall be construed to include the Extension Notification published on 13 January 2022) are unlawful, void and ultra vires the Fair Compensation Act. Accordingly, the land acquisition proceedings in respect of the Subject Plot have lapsed, rendering the Impugned Award a nullity., It is submitted that the perversity in the Impugned Award dated 15 September 2022 passed by the Deputy Collector (Respondent No.4) is apparent from the fact that: (a) during the course of private negotiations in respect of the acquisition of the Subject Plot, the District Level Valuation Committee, under the chairmanship of the Collector, Mumbai (Respondent No.5), fixed the compensation at Rs 572,92,45,598/‑ as recorded in a letter issued by NHSRCL (Respondent No.6). The letter also records that NHSRCL is bound by the rate/land value as determined by the District Collector based on the determination done by the District Level Committee; (b) however, the Impugned Award dated 15 September 2022 disregards the compensation accepted by NHSRCL (determined by the District Level Committee) by merely noting that the unconditional consent of the landowner had not been received; (c) the Impugned Award arrives at a compensation amount of a mere Rs 264,27,29,349/‑, i.e., less than half of the compensation determined by the District Level Valuation Committee and declared as binding on the acquiring body i.e., NHSRCL. This shows complete non‑application of mind on the part of the Deputy Collector (Respondent No.4) who passed the Impugned Award. It is ex facie apparent that the Deputy Collector (Respondent No.4) ignored relevant and germane material and relied upon irrelevant and non‑germane considerations. The Impugned Award provides no rational justification for disregarding this valuation other than the absence of the Petitioner’s unconditional consent to the compensation of Rs 572,92,45,598/‑. This is wholly arbitrary, capricious and ex facie absurd; (d) moreover, the Impugned Award also disregards the valuation report of Mr. Harshad S. Maniar filed by the Petitioner, along with its written submissions for the hearing on 15 July 2020, in which the compensation amount arrived at (inclusive of the 100 % solatium payable under the Fair Compensation Act) was Rs 1,987.72 crores; (e) furthermore, the Impugned Award incorrectly recorded observations made in the order dated 4 September 2019, which is evident from the following observations made in the Impugned Award: 'Pursuant to the order dated 04/09/2019, hence and as agreement of mutual acceptance between the Petitioner and the Respondents could not be executed, the Hon'ble Court dismissed the petition without prejudice to the right of the Petitioner challenging the valuation made under forcible acquisition.' These observations are contrary to the observations made in the order dated 4 September 2019, which stated that the petition was disposed of reserving all rights and contentions of the respective parties, including the Petitioner’s right to challenge the valuation of the alternate land that may be determined by Respondent No.3., It is submitted that on the aforesaid circumstances, the Impugned Award, as stated above, exhibits non‑application of mind on the face of the award, is perverse, absurd and such that no reasonable person applying his/her mind to the facts of the case and acting bona fide could ever have arrived at. On this ground alone it ought to be set aside. Mr. Seervai, learned senior counsel for the petitioners, placed reliance on the following judgments: (a) the judgment of the Andhra Pradesh High Court in Kasturi Rangachari v. Chairman, Food Corporation of India & Ors. (1981) 111 L.L.J. 237 AP, paragraph 15; (b) the judgment of the Supreme Court of India in H. Anraj & Ors. v. State of Maharashtra, (1984) 2 SCC 292, paragraph 8; (c) the judgment of the Supreme Court of India in Gullapalli Nageswara Rao and others v. Andhra Pradesh State Road Transport Corporation and another, AIR 1959 SC 308; (d) the judgment of the Supreme Court of India in Automotive Tyre Manufacturers Association v. Designated Authority and others, (2011) 2 SCC 258; (e) the judgment of the Supreme Court of India in Laxmi Devi v. State of Bihar & Others, (2015) 10 SCC 241; (f) the judgment of the Supreme Court of India in Union of India & Others v. Shiv Raj & Others, (2014) 6 SCC; (g) the judgment of the Supreme Court of India in Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. & Others, (2007) 8 SCC 705; (h) the judgment of the Supreme Court of India in Jagdish Pandey v. Chancellor, University of Bihar & Others, AIR 1968 SC 353; (i) the judgment of the Supreme Court of India in Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh & Others, AIR 1954 SC; (j) the judgment of the Supreme Court of India in Shayara Bano v. Union of India & Ors., (2017) 9 SCC 1; (k) the judgment of the Supreme Court of India in Thakur Raghubir Singh v. Court of Wards, Ajmer & Anr., AIR 1953 SC 373; (l) the judgment of the Supreme Court of India in Harakchand Ratanchand Banthia & Others v. Union of India & Others; (m) the judgment of the Supreme Court of India in Municipal Corporation of Greater Mumbai v. Abhilash Lal & Others; (n) the judgment of the Supreme Court of India in Nareshbhai Bhagubhai & Others v. Union of India & Others, (2019) 15 SCC; (o) the judgment of the Privy Council in Nazir Ahmad v. King‑Empire, AIR 1936 PC 253; (p) the judgment of the Supreme Court of India in Mohinder Singh Gill & Another v. The Chief Election Commissioner, New Delhi & Others, (1978) 1 SCC 405; (q) the judgment of the Supreme Court of India in Commissioner of Police, Bombay v. Gordhandas Bhanji, 1951 SCC OnLine SC; (r) the judgment of the Supreme Court of India in Kaiser‑I‑Hind Pvt. Ltd. & Anr. v. National Textile Corp. (Maharashtra North) & Others, (2002) 8 SCC 182; (s) the judgment of the Supreme Court of India in Gram Panchayat of Village Jamalpur v. Malwinder Singh & Others, (1985) 3 SCC; (t) the judgment of the Supreme Court of India in Gopal Krishnaji Ketkar v. Mohamed Haji Latif & Others, (1968) 3 SCR 862; (u) the judgment of the Supreme Court of India in Jayalakshmi Coelho v. Oswald Joseph Coelho, (2001) 4 SCC 181; (v) the judgment of the Karnataka High Court in Gogga Sidramiah v. The Special Land Acquisition Officer, Dharwad & Another, ILR 2018 KAR 2883; (w) the judgment of the Supreme Court of India in Collector of Customs, Madras & Anr. v. Nathella Sampathu Chetty & Anr., (1962) AIR 316 SC; (x) the judgment of the Supreme Court of India in Shreya Singhal v. Union of India, (2015) 5 SCC 1., It is submitted by Mr. Kumbhakoni, learned senior counsel for the respondents, that there is a presumption of constitutionality attached to every legislative action. He submitted that in view of the judgment delivered by the Hon'ble Supreme Court of India in Shayara Bano v. Union of India & Ors., the vires of a legislation may also be challenged on the ground of manifest arbitrariness under Article 14 of the Constitution of India, but the petitioner must specifically plead such a case by giving cogent and sufficient reasons in support of such a contention. No enactment can be struck down by merely stating that it is arbitrary, unreasonable or irrational., It is submitted that the petitioner in this case has not pleaded a ground of 'manifest' arbitrariness at all. He submitted that the Bullet Train Project is a project of national importance and is an infrastructural project of great public importance. He submitted a synopsis and brief written arguments for consideration of this Court along with copies of various judgments. During the course of his arguments, he produced a copy of the letter addressed by the State Government to the Hon'ble President of India seeking assent for carrying out a State Amendment to Section 10 of the Fair Compensation Act. The copy of the said letter was also served upon the learned senior counsel for the petitioner across the bar. He submitted that this Court cannot go into the merits of the assent granted by the Hon'ble President of India in favour of the State Government for carrying out a State Amendment to Section 10., It is submitted that in case of procedural defects, if any, they would affect the quantum of compensation and not the validity of acquisition. In view of there being a compensation dispute raised by the petitioner in respect of the land under acquisition, the remedy of the petitioner, if any, would be under Section 51 read with Section 64 of the Fair Compensation Act. Lapses, if any, in following the second part of Section 25 of the Fair Compensation Act would not vitiate the first part of Section 25 of the Fair Compensation Act., It is submitted by the learned senior counsel that the powers of the Court under Article 226 of the Constitution of India are discretionary. Even if there are irregularities in the procedure required to be followed while acquiring the land, the Court cannot exercise discretionary power in view of the Bullet Train Project being a public project. Although the extension is required to be granted twice in the facts of this case, there is no gross injustice to the petitioner so as to interfere with the acquisition proceedings., It is submitted that if the extension is granted for ten years, it would not invalidate the sanction but at most affect the action. Merely because some legal issues as canvassed by the petitioner are involved, this Court need not interfere in every matter while exercising discretionary power under Article 226 of the Constitution of India., Learned senior counsel invited attention to various averments made by the Central Government in the affidavit‑in‑reply filed before this Court, particularly the salient features and objectives of the Bullet Train Project, and submitted that this project is the first high‑speed rail and includes an under‑sea tunnel for part of it. Ninety‑seven percent of the land was acquired by the Government and steps are already taken to complete the balance portion of the land required to be acquired. It is submitted that no prejudice of any nature whatsoever is caused to the petitioner. If any prejudice is caused to the petitioner, the petitioner can be compensated in terms of money. He submitted that the judgments relied upon by the petitioner cannot be read like a statute., Learned senior counsel vehemently urged that the State Government had followed the requisite procedure by obtaining the assent granted by the Hon'ble President of India for inserting the State Amendment to Section 10 of the Fair Compensation Act and such assent cannot be interfered with by this Court. He dealt with the submissions advanced by the learned senior counsel for the petitioner in detail and distinguished the judgments cited by Mr. Seervai, learned senior counsel for the petitioner., It is submitted that the power of the Court under Article 226 of the Constitution of India is only to see whether there is any repugnancy and whether the assent sought for a particular portion is repugnant to the State Government in the parliamentary law which already exists. A copy of the letter dated 27 March 2018 from the State of Maharashtra to the Hon'ble President of India for obtaining assent was produced., It is submitted that the Hon'ble President of India had already granted assent to the amendment carried out by the State of Gujarat to Section 10 by inserting a State Amendment. The validity of the amendment carried out by the State of Gujarat is upheld by the Gujarat High Court., At this stage, Mr. Seervai, learned senior counsel for the petitioner, states that in view of the letter produced by Mr. Kumbhakoni, learned senior counsel for the State Government to the Hon'ble President of India for seeking assent, nothing survives in the interim application and the same can be disposed of. He states that the prayer challenging the State Amendment, i.e., Section 10A, does not survive. The statement is accepted., It is submitted by the learned senior counsel that the right to property is not a fundamental right. Indisputably, the petitioner does not have a fundamental right to hold the property., In so far as the notification issued by the State Government on 20 August 2019 under Section 10A of the Fair Compensation Act granting exemption to certain projects from applicability of Chapter II and III of the Act is concerned, it is submitted that the notification has not been issued by the State Government as a delegate of the Centre. The State Government in its own right has exercised power to issue such notification. Since the Bullet Train Project is an infrastructure project in part of the State, the State Government is empowered to exempt the said infrastructure project from applicability of Chapter II and III of the Fair Compensation Act., The State Government is wearing two hats in this case. No sanction or delegation of power is necessary from the Central Government. It is submitted by the petitioner that the petitioner is not affected by the State Amendment to Section 10 of the Fair Compensation Act. He submitted that in any event, Chapters II and III are not attracted to the facts of this case at all and thus the petitioner cannot challenge the constitutional validity of the notification issued by the State Government in that regard., It is submitted that it is not the case of the petitioner that any part of Chapter II and III applies to the facts of this case. Attention is invited to the description of the property of the petitioner described in the Impugned Award. There are various jungle trees. The land is vacant and barren with a kachha shed. The State Amendment inserted to Section 10 applies to all infrastructure projects and not only the Bullet Train Project. The Central Government has already taken ninety‑seven percent of the land under acquisition. There is no dispute raised by the other ninety‑seven percent of plot holders from whom possession is taken. Construction work has already started on most of this acquired land., It is submitted by the learned senior counsel that the petitioner had been allotted an alternate piece of land in lieu of the original land under acquisition. He submitted that an underground tunnel is proposed from the writ property and that the construction of the underground tunnel itself would take more than five years. The declaratory suit filed by the State Government against the petitioner is still pending before the Gujarat High Court.
|
id_1650
| 3
|
Senior Counsel disputed that there is non‑application of mind on the part of the Deputy Collector in the impugned award. No family is affected due to acquisition of the writ property of the said infrastructure project. There is no question of resettlement of any project‑affected person. No person is displaced by the respondent acquiring body as no construction has been put up in the writ property. Substantial part of the writ property is covered by wild trees. It is submitted that the writ plot is an uneven plot and is affected by high‑tension line, mangroves and is undeveloped., Regarding the issue of extension raised by the petitioner, learned Senior Counsel submitted that the main provision under Section 25 of the Fair Compensation Act prescribes that the award has to be made within 12 months from the date of publication of declaration under Section 19 of the Fair Compensation Act and has to be read with the proviso thereto. Both the notifications granting extension of 12 months each have been recorded in writing. The notifications are published on the website of the Government. He invited our attention to some of the documents annexed to the affidavit‑in‑reply to show that notifications were published., It is submitted that mere possibility of abuse of provision of law does not per se invalidate the statute introduced by exercising legislative power. Though the action may be vulnerable, such action would not make the provision ultra vires. The petitioner has already challenged the validity of the first proviso. He submitted that if the State Government could grant extension more than one year under the first proviso to Section 25 of the Fair Compensation Act, the State Government could grant two extensions for one year twice. The extension of 12 months each twice is not unreasonable and arbitrary in the facts of this case. The petitioner was substantially responsible for the gross delay in making an award by the Deputy Collector., Learned Senior Counsel relied upon Section 30(3) of the Fair Compensation Act and submitted that the petitioner would get interest up to the date of award or from the date of notification. He submitted that the reliance placed by the petitioner on the newspaper report on the issue of grant of extension is totally misplaced. The erstwhile Government did not want to acquire the writ property., Regarding the issue of natural justice raised by the petitioner, learned Senior Counsel submitted that all the judgments relied upon by the petitioner are dealing with Section 5A of the Land Acquisition Act, 1894 which is not in pari materia to Section 23 of the Fair Compensation Act. At the most, Section 5A of the Land Acquisition Act, 1894 is equivalent to Section 15 of the Fair Compensation Act. He submitted that Sections 15 and 23 of the Fair Compensation Act are different. At the Section 5A stage, it is not decided whether the property is acquired for the public purpose or not., It is submitted that enquiry under Section 23 of the Fair Compensation Act is for three purposes i.e., measurement, value of land and respective interest of the party. No prejudice of any nature whatsoever is caused to the petitioner in view of these three aspects. The petitioner did not raise any dispute about measurement. Notice to all interested persons had been given by the acquiring authority. The concept of one person hearing and deciding the matter by another person would apply under Section 15 of the Fair Compensation Act and not Section 23 of the Fair Compensation Act. He strongly placed reliance on the judgment of the Supreme Court in the case of May George v. Special Tahsildar & Ors. and submitted that even if notice is not issued in the prescribed manner under Section 9(3), that would not vitiate the acquisition proceedings. He submitted that if there is non‑compliance of any provision required to be followed for acquiring land, the award is not vitiated. The High Court has to see the purpose and intent of Section 9., Concerning the value of land now decided by the Deputy Collector while awarding the compensation, it is submitted by the learned Senior Counsel that it is open for the petitioner to challenge the valuation by applying for enhancement., It is submitted by the learned Senior Counsel that if the draft award was prepared by the person who had heard the petitioner, the report was submitted for approval to the Divisional Commissioner, Konkan Division, by the same officer., Regarding the correction under Section 33 of the Fair Compensation Act in the impugned award, learned Senior Counsel invited our attention to Form VI prescribed under the provisions of the Fair Compensation Act read with Rule 11 and submitted that the date of extension is not required to be mentioned in the award. He submitted that in any event, the date of one of the extensions was missing inadvertently in the award. The correction to the effect of mentioning the corrected date under Section 33 of the Fair Compensation Act was thus made. In the correction made by the Deputy Collector, calculation of the interest is not corrected. There is no effect on the amount of interest. Only the corrected period is mentioned. The petitioner has not disputed these facts in the writ petition., Regarding the issue raised by the person who has heard the acquisition proceedings, learned Senior Counsel invited our attention to page 116 of the writ petition and submitted that the correction in this case is done by Mr. Girase and was approved by the Collector at page 915 of the pleadings filed by the respondents., It is submitted by the learned Senior Counsel that the Divisional Commissioner, Konkan Division had raised ten issues to the draft award submitted by the Deputy Collector on 20 February 2021. The Deputy Collector responded to the queries raised by the Divisional Commissioner, Konkan Division. The Divisional Commissioner, Konkan Division had made various recommendations to the Deputy Collector to be incorporated in the award., It is submitted by the learned Senior Counsel that in view of the petitioner now not pressing the prayer regarding constitutional validity of Section 10A of the Fair Compensation Act, the arguments advanced by the petitioner challenging the constitutional validity and other arguments based on the arguments challenging constitutional validity would not survive on the same ground., It is submitted that once the assent has already been granted by the Honourable President of India to the State Government for enacting the State Amendment to the Central Act, such State Amendment becomes a part of the Central Act with State Amendment. The State Government has exercised powers in this case by exercising powers under Section 10A of the Fair Compensation Act and not exercised powers under Article 162 of the Constitution of India., It is submitted by the learned Senior Counsel that the powers of the State Government in this case under Section 10A of the Fair Compensation Act to exempt any public project in the State of Maharashtra is not in respect of the Bullet Train Project but a large number of other public projects. Section 10A of the Fair Compensation Act does not say that the State can grant exemption where the State is the appropriate authority., Learned Senior Counsel relied upon Section 10A(f) of the Fair Compensation Act (Maharashtra Amendment) and submitted that the State Government is empowered to grant exemption, in the public interest, by issuing notification granting exemption from applicability of Chapter II and Chapter III of the Fair Compensation Act even if in case of infrastructure projects including projects under Public‑Private Partnership where the ownership of land continues to vest with the Government. The said powers granting exemption conferred on the State Government are inclusive and not restrictive., Mr. Kumbhakoni, learned Senior Counsel placed reliance on the following judgments: (a) the judgment of the Supreme Court in the case of Ramniklal N. Bhutta & Anr. v. State of Maharashtra & Ors., (1997) 1; (b) the judgment of this Court in the case of Messrs. Mohandas Issardas v. A.N. Sattanathan, Collector of Customs, (1955) Indian Law Reports 318; (c) the judgment of this Court in the case of Union of India & Ors. v. Dhanwanti Devi & Ors., (1996) 6 SCC 44; (d) the judgment of the Supreme Court in the case of Roger Shashoua & Ors. v. Mukesh Sharma & Ors., (2017) 14 SCC 722; (e) the judgment of the Supreme Court in the case of Ashwani Kumar Singh v. U.P. Public Service Commission & Ors., (2003) 11; (f) the judgment of the Supreme Court in the case of G. Mohan Rao & Ors. v. State of Tamil Nadu & Ors., 2021 SCC OnLine SC; (g) the judgment of the Supreme Court in the case of Sushil Kumar Sharma v. Union of India & Ors., (2005) 6 SCC 281; (h) the judgment of the Supreme Court in the case of May George v. Special Tahsildar & Ors., (2010) 13 SCC 98; (i) the judgment of this Court in the case of Special Land Acquisition Officer, Mumbai v. Bhavsar Construction Co., Learned Additional Solicitor General tendered notes of the arguments on behalf of the respondent Nos. 2 and 6 along with copies of various judgments relied upon by him in support of his rival contentions., Learned Additional Solicitor General invited our attention to the prayers in Writ Petition No. 2131 of 2018 filed by the petitioner inter alia seeking a direction to Respondent Nos. 1 to 4 therein to accept the proposal of the petitioner to acquire an alternate land. He submitted that it was stated by the petitioner in the first writ petition that a Permanent International Exhibit Centre cum Convention Complex (PIECC) was proposed to be constructed on a larger piece of land which included the original plot sought to be acquired and the then proposed acquisition would have the effect of splitting the larger piece of land in a manner that would render the PIECC impossible. The petitioner expressed various difficulties and objections to the proposed acquisition., During the pendency of the earlier writ petition, the petitioner, vide their letter dated 19‑July‑2018, offered a second alternate plot. After visiting the site, Respondent No. 2, by letter dated 26‑July‑2018, conveyed their acceptance in principle stating that the second alternate plot is prima facie suitable, subject to detailed examination and also submitted a modified sketch for consideration of the petitioner. He submitted that Respondent No. 4 carried out detailed technical examination and found that the second alternate land as proposed by the petitioner is suitable and thus the proceedings for acquisition of the same have been initiated. He submitted that on 24 September 2018, the original land acquisition proposal submitted vide letter dated 27‑November‑2017 was withdrawn and the second alternate proposal as mutually agreed upon was submitted to the Collector, Mumbai, Suburban District. There was disagreement with regards to the disbursement of compensation, more particularly with regards to repayment of compensation with interest in the event Suit No. 679/1973 is decided against the petitioner., It is submitted that the said first writ petition filed by the petitioner was disposed of by this Court on 4 September 2019 observing that parties to the petition have not been able to reach a mutually acceptable agreement. In the light of the revised proposal submitted by Respondent No. 4 to Respondent No. 3 referred to in the aforesaid public notice dated 25 September 2018, the petition has worked itself out. This Court accordingly disposed of the said writ petition reserving all rights and contentions of the respective parties including the petitioner's right to challenge the valuation of the said alternate land that may be determined by Respondent No. 3 in the event of the respondents proceeding to take steps to acquire the same under the provisions of the Right to Fair Compensation Act., It is submitted by the learned Additional Solicitor General that since the petitioner had voluntarily offered the second alternate plot, i.e., subject land for acquisition for the Bullet Train Project, the offer to acquire the subject land was accepted by Respondent No. 4. The dispute which only remains between the parties is in respect of the price to be paid and the manner of payment considering the title dispute between the State of Maharashtra and the petitioner. The acquisition, however, was ceased to be a dispute. He submitted that due to the change of originally chosen plot to the alternate plot as proposed by the petitioner, reservation and dere reservation in DP‑2034 was necessitated before declaring the award which process took considerable time. The petitioner has also raised various objections to the same with a view to cause delay. The petitioner is thus estopped from challenging the acquisition proceedings now in this petition., It is submitted that the respondents have accepted the proposal as submitted by the petitioner for alternate plot. By challenging the acquisition proceedings now at this stage after giving suggestion by the petitioner to acquire the alternate plot, the petitioner seeks to stall the acquisition process and referring to hand over of possession is nothing but an abuse of process of law and not a bona fide action on the part of the petitioner. He relied upon various judgments in support of this submission and submitted that the petitioner is estopped from challenging the acquisition proceedings. Learned Additional Solicitor General also placed reliance on Sections 20A and 41(ha) of the Specific Relief Act, 1963. The legislature has specifically amended the Specific Relief Act, 1963 to ensure that infrastructure projects are not injuncted., It is submitted by the learned Additional Solicitor General that the power of the Court under Article 226 of the Constitution of India is discretionary. It is an equitable remedy. It is not necessary for the High Court to correct each and every illegality. He submitted that if the correction of illegality is likely to have unjust results, the High Court would normally refuse to exercise its jurisdiction under Article 226 of the Constitution of India. The petitioner has thus no locus standi to file this petition for impugning the acquisition proceedings., Regarding the validity of the first proviso to Section 25 of the Fair Compensation Act challenged by the petitioner, learned Additional Solicitor General submitted that the said challenge is made by the petitioner only in October 2022 by amending the petition. He invited our attention to ground N to the petition raised by the petitioner on this issue. He submitted that the impugned proviso to Section 25 of the Fair Compensation Act does not in any manner impinge or violate the fundamental rights of the petitioner. The impugned proviso to Section 25 of the Fair Compensation Act is merely enabling or empowering whereby certain powers are given to the appropriate government. Presumption of constitutionality has not been displaced by the petitioner. There are no specific grounds pleaded to explain how and in what manner the statute violates the rights of the petitioner. Ground N is a vague ground and without any particulars. He submitted that the Court would presume a statute to be constitutionally valid and the burden is on the person challenging the same to establish that it is violative of the constitutional mandate. In support of this submission, he relied upon various judgments of the Supreme Court., Learned Additional Solicitor General relied upon Sections 11, 15, 19, 23 and 25 to 30 of the Fair Compensation Act in support of the submission to the exceptional procedure required to be followed for acquiring the land and for making an award. He submitted that these provisions clearly show that the legislature has balanced the rights of all the stakeholders. The rights of the petitioners are duly protected. It is submitted that since market value is frozen as on the date of the Section 11 of the Fair Compensation Act notification, even if there is a decrease in value of the land subsequently, the same would not affect the market value payable. The legislature has provided for payment of interest to balance the delay in the acquisition process, if any., It is submitted by the learned Additional Solicitor General that though the first part of Section 25 of the Fair Compensation Act provides that the award must be made within 12 months from the date of publication of the declaration under Section 19 of the Fair Compensation Act, the proviso creates an exception thereto on the specific terms and conditions mentioned therein. He submitted that the proviso makes it clear that if, in its opinion, circumstances exist justifying the same, the appropriate government shall have power to extend the time for 12 months which would evince the clear guideline and stipulation for exercise of power being there must be circumstances which must not only exist but such circumstances must justify the extension of time., It is submitted that the appropriate government would have to record reasons for its opinion recognising the existence of circumstances and the fact that such circumstances justify the extension of time. The condition imposed by the second proviso to Section 25 provides an inbuilt safeguard against abuse of power. The provision imposes sufficient checks and balances. Such a proviso is also in conformity with the objects and purpose of the Fair Compensation Act being transparency in the acquisition process., It is submitted by the learned Additional Solicitor General that if the arguments of the petitioner are accepted and the first proviso is struck down, it would mean that the award would have to be made within a period of twelve months and there can be no exception in any circumstance to the same. The second proviso would be rendered otiose in the absence of the first proviso., It is submitted by the learned Additional Solicitor General that the legislature has chosen not to put a cap on the outer limit but has left it to the discretion of the appropriate government within the mandate of the statute considering the myriad situations that may arise. An example could be the occurrence of the pandemic which was not predictable both in terms of its magnitude and its prolonged operation., It is submitted by the learned Additional Solicitor General that Section 25 of the Fair Compensation Act makes an express departure from the outer limit of two years that was provided under the Land Acquisition Act, 1894 and more particularly Section 11A thereof. He relied upon amendment numbers 81 and 82 and the Land Acquisition Bill, 2011 by which the words two years were replaced by twelve months and the two provisos having been inserted. It is submitted that the submission of the petitioner that the first proviso to Section 25 of the Fair Compensation Act only contemplates a one‑time extension and not multiple extensions is contrary to the plain language of the statute. He submitted that the petitioner has not disputed that the State Government could grant a one‑time extension for whatever period since the statute does not prescribe an outer limit but had only contended that multiple extensions for twelve months each twice are beyond the powers of the State Government., The learned Additional Solicitor General gave an illustration that where the Section 19 declaration is made on 1 January 2020, war breaks out in August 2020 and hence the award cannot be passed by 31 December 2020. The appropriate government is of the opinion that war may last another six months and extends time until June 2021. The war, however, continues. It is submitted that the circumstances which justify the extension still being in existence further time would need to be extended. He submitted that if the arguments of the petitioner that only one extension of whatever period is accepted, the same may result in greater harm. In support of this submission, he relied upon various judgments., Regarding the issue raised by the petitioner that the first proviso to Section 25 of the Fair Compensation Act is violative of Article 300A of the Constitution of India, it is submitted by the learned Additional Solicitor General that ground N raised by the petitioner does not impugn the first proviso to Section 25 of the Fair Compensation Act on the basis of violation of Article 300A of the Constitution of India except for merely asserting a violation of Article 300A. In the absence of any specific grounds, the question of any enquiry on this count cannot and would not arise. He submitted that Article 300A of the Constitution of India is not a fundamental right., Learned Additional Solicitor General submitted that the first proviso to Section 25 of the Fair Compensation Act merely empowers the extension of time for making an award, thus, the question of such an empowerment being violative of the right to property cannot arise. He submitted that the provisions are already made for due compensation for the acquisition of the land and for due compensation for the delay, if any, in the Fair Compensation Act itself and hence, there is no question of any violation of Article 300A of the Constitution of India as canvassed by the petitioner. The amount of compensation would be determined by the authorities and the remedy of further challenge thereto is also provided under the provisions of the Fair Compensation Act., It is submitted by the learned Additional Solicitor General that there is inordinate delay for impugning the validity of the first proviso to Section 25 of the Fair Compensation Act which has been in force since 2013 and sought to be challenged only in October 2022. There is unexplained delay on the part of the petitioner. He submitted that it is well settled a principle of law that delay defeats equity and thus this Court shall not exercise discretionary power under Article 226 of the Constitution of India., Regarding whether the State Government has exercised power under Section 10A of the Fair Compensation Act independently or as a delegate of the Central Government, it is submitted by the learned Additional Solicitor General that the said power is an independent power of the State Government. The provision empowers the State Government in public interest to exempt any of the projects enlisted therein from the application of the provisions of Chapter II and Chapter III of the Fair Compensation Act. The provision is a State Amendment which enures to the benefit of all projects within the State where the State Government deems it fit to exercise its powers thereunder., It is submitted that the notification dated 9 August 2019 under which the State Government has been declared as an appropriate government is an independent empowerment. The notification has been issued by Respondent No. 2 in exercise of its powers under Article 258(1) of the Constitution of India. The provision is unconnected with the Maharashtra Amendment and the exercise of powers by the State Government under Section 10A. The Maharashtra Amendment is wide and is not confined to the Bullet Train Project whereas the notification dated 9 August 2019 is specifically for the Bullet Train Project., It is submitted by the learned Additional Solicitor General that the appropriate government under the Fair Compensation Act does other functions also, other than acquisition. The functions of the appropriate government are not just restricted to acquisition of property. Respondent No. 2 has appointed Respondent No. 1 as the appropriate government. He submitted that the State Government is acting as both appropriate government and as the State Government and the exercise of power under Section 10A of the Fair Compensation Act is as State Government and not as a delegatee., In his alternate arguments, the learned Additional Solicitor General submitted that since the Bullet Train Project is being carried out in collaboration with the funding partner Japan International Cooperation Agency (JICA), the Social Impact Assessment has already been carried out by JICA. Chapter III of the Fair Compensation Act which is in respect of irrigated multi‑cropped land is inapplicable to the subject land. Hence, there is otherwise compliance with the provisions of the Fair Compensation Act., It is submitted by the learned Additional Solicitor General that the objective of Social Impact Assessment as provided under Section 8(2) of the Fair Compensation Act, 2013 is to enable the appropriate government to recommend such area of acquisition, which ensures (i) minimum displacement of people, (ii) minimum disturbance to the infrastructure, ecology; and (iii) minimum adverse impact on the individuals affected. The aforesaid objective has otherwise been taken care of in the present matter in view of similar district‑wise Social Impact Assessment already carried out by an independent agency, appointed by the National High Speed Rail Corporation Limited under the supervision of JICA., It is submitted by the learned Additional Solicitor General that the petitioner has not impugned the notification dated 9 August 2019 under which the State Government has been declared as an appropriate government. It is thus clear that the said notification dated 9 August 2019 is constitutionally valid., Learned Additional Solicitor General invited our attention to various averments made in the additional affidavit filed on behalf of the respondent Nos. 2 and 6 pointing out the salient features and objective of the project namely Mumbai‑Ahmedabad Bullet Train Project (High Speed Rail Corridor project). He submitted that the said project has been declared as a Vital Infrastructure Project by the Government of Maharashtra vide gazette notification dated 18 May 2018. The length of this High Speed Rail Corridor is 508.17 km (approximately) and will have 12 stations. Out of the 508.17 km, a portion of 348.03 km is going to be in the State of Gujarat, 4.5 km in the Union Territory of Dadra & Nagar Haveli, and 155.64 km in the State of Maharashtra., It is submitted that the railway line will pass through Mumbai, Thane and Palghar districts in Maharashtra and the districts of Valsad, Navsari, Surat, Bharuch, Vadodara, Anand, Kheda, Ahmedabad in Gujarat and the Union Territory of Dadra and Nagar Haveli. Ninety‑two percent of the project length is elevated. There are many benefits of an elevated track. This will ensure no obstruction to natural flow of waters, traffic and movement of farmers. It greatly improves safety and security perception against external interference and also reduces land requirement in the project i.e., 17.5 m width against 36 m for conventional railway tracks., It is submitted that this rail corridor consists of a 21‑km stretch of rail line which will be an underground single‑tube twin‑track tunnel, out of which a stretch of 7 km will be an undersea tunnel located below Thane Creek. The idea behind this underground section of the rail corridor is to minimize any adverse impact on Thane Creek Flamingo Sanctuary, adjoining mangroves and high‑rise residential complexes of Mumbai suburban. The tunnel phase is a critical phase of the project and will take the maximum time to construct compared with all other civil construction packages in the project. This project after completion will give the country its first high‑speed rail and first undersea tunnel, around 40 m deep. The Japanese Government has provided financial aid through Japan International Cooperation Agency (JICA) in the form of Official Development Assistance Loan (ODA) facility., It is submitted that construction of a tunnel of 13.2‑meter diameter, the largest diameter urban tunnel boring work ever undertaken in India, shall be India’s first 7‑km of undersea tunneling work. This section is expected to utilize the maximum construction period i.e., 5.2 years amongst the rest of the sections of the corridor. It is submitted by the learned Additional Solicitor General that the travel time between Mumbai and Ahmedabad will be reduced to 1 hour 58 minutes as against the current travel time of 6 hours 35 minutes by train, and shall act as a catalyst for economic growth of the cities it passes through. This project will increase inter‑regional connectivity along the rail corridor and boost the development of satellite towns that host the Bullet Train stations such as Palghar Township Projects of the Mumbai Metropolitan Region Development Authority., It is submitted that the Bullet Train Project is expected to generate over 90,000 direct and indirect jobs and undertake skill development and income restoration training for numerous project‑affected persons. More than 51,000 technicians, skilled and unskilled workforce will be required for various construction related activities. It is expected that this project will serve 92,000 passengers per day per direction by 2053. This project is highly instrumental in pushing the Make In India initiative of the Government under which different trade agreements between various Japanese organisations and the National High Speed Rail Corporation Limited, Federation of Indian Chambers of Commerce and Industry, ASSOCHAM have been executed., It is submitted by the learned Additional Solicitor General that the estimated cost for this project is around Rs. 1.08 lakh crore approximately. So far an amount of more than Rs. 32,000 crore has been expended by the National High Speed Rail Corporation Limited towards implementation of the project.
|
id_1650
| 4
|
For this project, from Maharashtra, 430 hectares (approximately) of land is required out of which as of November 2022, 97% of the land is already acquired. For the underground section between Bandra Kurla Complex (BKC) and Thane, all the land parcels required are already in possession of the National High Speed Rail Corporation Limited (NHSRCL), save and except the petitioner’s land. It is submitted by the learned Additional Solicitor General that various permissions have already been secured such as Forest Clearances (Stage 1 & 2), Wildlife Clearances (SNGP, Tungareshwar Wildlife Sanctuary, Thane Creek Flamingo Sanctuary), Coastal Regulation Zone (CRZ) clearances and Mangroves cutting clearance, clearances from Dahanu Taluka Environment Protection Authority which have resulted in NHSRCL incurring a cost of Rs 146 crores. All 28 crossings are already procured from various authorities since this rail corridor traverses through various highways, expressways, rail corridors etc. More than 85% utility diversion (i.e. diversion work of public utility sources like electricity lines, water lines affected by the project) works are complete in Maharashtra and 100% in the affected tunnel section has been completed., As on November 2022, tenders for 100% of civil works in the Maharashtra region have already been floated. In Gujarat, 100% civil works contracts are already awarded and construction is in full swing. In Gujarat, foundation work for 194 km rail corridor, 9.5 km of viaduct, 23 km of girder casting are complete. Construction work of all eight bullet train stations in Gujarat are already in full swing., It is submitted that all the lands except the land of the petitioner are already in possession of the Government. In view of the proposal given by the petitioner for alternate land and having been accepted by the respondents, the alignment of the rail corridor sections between Bandra Kurla Complex (BKC) and Thane (HSR) has been altered. As the subject land is very close to High Tension (HT) lines, NHSRCL will be incurring additional construction costs and safety costs. In view of the delay on the part of the petitioner, the cost of the project has escalated substantially. Due to the long‑pending issue of acquisition of the petitioner’s land, NHSRCL has had to cancel the tenders relating to the underground tunnelling works on two occasions which resulted in cost escalation by at least Rs 1000 crores. The petitioner did not raise the issue that the acquisition had lapsed due to the passage of time during these proceedings., Learned Additional Solicitor General submitted that a chart prepared by NHSRCL showing the nature of the schematic MAHSR Corridor Route Plan, the change of proposed land under acquisition suggested by the petitioner and the consequences thereof. Nature of constitution activities is required to be carried out on this project., Mr. Anil Singh, Learned Additional Solicitor General for respondent No. 2 placed reliance on the following judgments: (a) The judgment of the Supreme Court of India in National High Speed Rail Corporation Limited vs. Montecarlo Limited & Anr. (2022); (b) The judgment of the Supreme Court of India in National High Speed Rail Corporation Ltd. vs. State of Maharashtra & Ors., dated 9 December 2022 in Writ Petition No. 442 of 2020; (c) The judgment of the Supreme Court of India in Molar Mal (Dead) Through LRs. vs. Kay Iron Works (P) Ltd., (2000) 4 SCC 285; (d) The judgment of the Supreme Court of India in Shri Ram Krishna Dalmia & Ors. vs. Justice S. R. Tendolkar & Others; (e) The judgment of the Supreme Court of India in R. K. Garg vs. Union of India & Others, (1981) 4 SCC 675; (f) The judgment of the Supreme Court of India in Union of India and others vs. Exide Industries Limited and Another, (2020) 5 SCC; (g) The judgment of the Supreme Court of India in V. S. Rice & Oil Mills & Others vs. State of Andhra Pradesh, AIR 1964 SC 1781; (h) The judgment of the Supreme Court of India in Amrit Banaspati Co. Ltd. vs. Union of India & Others, (1995) 3 SCC 335; (i) The judgment of the Supreme Court of India in Alok Shanker Pandey vs. Union of India and others, (2007) 3 SCC 545; (j) The judgment of the Supreme Court of India in Consumer Action Group and another vs. State of Tamil Nadu & Others, (2000) 7 SCC 425; (k) The judgment of the Division Bench of the Supreme Court of India in The Film and Television Producers Guild of India Ltd. and another vs. Union of India and another, Writ Petition No. 680 of 2020 dated 30 June 2021; (l) The judgment of the Supreme Court of India in Sadashivrao Mahadik Kagal Taluka Sahakari Sakhar Karkhana Limited vs. Commissioner of Sugar and others, (2015) 1 Bombay Civil Revision 237; (m) The judgment of the Chancery Division in Re Bellador Silk; (n) The judgment of the Supreme Court of India in State of Bihar vs. Rai Bahadur Hurdut Roy Moti Lal Jute Mills and another, AIR 1960; (o) The judgment of the Supreme Court of India in B. L. Sreedhar & Others vs. K. M. Munireddy (dead) & Others, (2003) 2 SCC 355; (p) The judgment of the Supreme Court of India in Noida Industrial Development Authority vs. Ravindra Kumar and others, 2022 SCC OnLine SC 578; (q) The judgment of the Supreme Court of India in Mazdoor Kisan Shakti Sangathan vs. Union of India & Anr., (2018) 17 SCC 324; (r) The judgment of the Supreme Court of India in Writ Petition No. 113 of 2019 dated 9 December 2022 in Gorakhnath Shankar Nakhwa & Ors. vs. Municipal Commissioner of Greater Mumbai & Ors., It is submitted that Respondent No. 1 has attempted to bifurcate the Right to Fair Compensation Act into (i) the procedure relating to the decision of acquisition, and (ii) the subsequent procedure culminating in the award. The Respondent has sought to contend that any procedural irregularities arising after the issuance of a report under Section 15(2) of the Right to Fair Compensation Act only affect compensation (for which the petitioner has a complete remedy under Section 64 of the Right to Fair Compensation Act)., It is submitted that this contention is demonstrably incorrect. Most notably, if the proceedings have lapsed in terms of Section 25 of the Right to Fair Compensation Act, then the award is rendered a nullity. Recourse to any procedure under Section 64 of the Right to Fair Compensation Act is futile and entirely unavailing to the petitioner., Similarly, a failure to observe the principles of natural justice (in terms of Section 23) would also render an award a nullity. This has been recognised by the Supreme Court of India (and affirmed in the context of land acquisition proceedings). The question of a dispute as to compensation in respect of an award that is inherently illegal, invalid and a nullity does not arise, and the petitioner would have no remedy in this regard before the authority., It is submitted that the State of Maharashtra (Respondent No. 1) has asserted that the First Impugned Notification has been issued in its own right and capacity, as State Government under Section 10A(f) of the Right to Fair Compensation Act (as amended by Maharashtra Act No. XXXVII of 2018). It is submitted that Respondent No. 1 thereby implicitly admits that as a delegate of the Central Government, it could not have issued the First Impugned Notification., It is submitted that Respondent No. 1 has failed to identify the source of its power to act in its own capacity, to issue a notification under Section 10A of the Right to Fair Compensation Act in respect of the Bullet Train Project. The contention that the State of Maharashtra can act in its own capacity to issue a notification under Section 10A in respect of the Bullet Train Project is untenable for the following reasons: (i) Article 162 of the Constitution of India provides that the executive power of the State shall extend to the matters with which the Legislature of the State has the power to make laws. Entry 42 of List III relates to acquisition and requisitioning of property. (ii) However, the State of Maharashtra in the present instance does not have unfettered executive powers in respect of acquisition and requisitioning of property in the State. This is on account of the proviso to Article 162 which states that provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made by Parliament upon the Union or authorities thereof. (iii) It is thus clear that in respect of a matter that falls under List III (i.e. in respect of which the Legislature of State and Parliament have the power to make laws), the executive power of the State shall be subject to and limited by the executive power expressly conferred upon the Union by any law made by Parliament. (iv) In the present instance, the executive power of the State shall be subject to and limited by the executive power conferred on the Union by the Right to Fair Compensation Act., It is submitted that the State of Maharashtra acting in its executive capacity is subject to and limited by the powers of the Union in respect of acquisition of land under the Right to Fair Compensation Act. The Union, under the provisions of the centrally enacted Right to Fair Compensation Act, does not have the power to exempt a project from the provisions of Chapters II and III of the Act. Accordingly, the State of Maharashtra is also denuded of this power, and has no power to issue a notification under Section 10A of the Right to Fair Compensation Act in respect of the Bullet Train Project., It is submitted that under the provisions of the Right to Fair Compensation Act, under Section 3(e)(iv), the Central Government is the appropriate government for the acquisition of land for a multi‑state project such as the Bullet Train Project. Thus, only the Union/Central Government could acquire land for the Bullet Train Project. It is submitted that in order to enable the State of Maharashtra to acquire land for the Bullet Train Project, the Union necessarily had to entrust its power to the State of Maharashtra to acquire land on the Union’s behalf. This was done by the exercise of the Union’s powers under Article 258(1) of the Constitution of India., It is submitted that Respondent No. 1’s repeated references to the barren nature of the subject plot to contend that the petitioner was not entitled to participate in the social and environmental impact assessment as contemplated under Chapter II of the Right to Fair Compensation Act is disingenuous and untenable. The petitioner is vitally interested in the process and outcome of a social and environmental impact assessment conducted in terms of Chapter II of the Right to Fair Compensation Act. Such a study would have required the participation of local authorities and representatives, who would have evaluated the Bullet Train Project on various parameters including costs, benefits, its effect on community property, infrastructure and the surrounding area etc. Such participative decision‑making is the bedrock of the Right to Fair Compensation Act. Further, if purportedly barren land such as the subject plot were in any event disentitled to the provisions under Chapter II of the Right to Fair Compensation Act, there would be no requirement to specifically exempt such land from the applicability of these provisions, as was in fact done by virtue of the First Impugned Notification dated 20 August 2019 (Exhibit B to the Petition)., It is submitted that Respondent No. 1 has repeatedly underscored that no fundamental right of the petitioner has been violated on account of the actions impugned in the petition, particularly in the context of the multiple extensions sought under the first proviso to Section 25 in respect of the period for the issuance of the award. Respondent No. 1’s contention in this regard is incorrect and untenable as (i) the petitioner has a fundamental right to equality before the law and the equal protection of the laws under Article 14 of the Constitution of India. The petitioner has squarely challenged the first proviso to Section 25 of the Right to Fair Compensation Act as being inherently and manifestly arbitrary, and therefore ultra vires Article 14 of the Constitution of India; (ii) a law that violates a provision of the Constitution of India (other than provisions under Part III of the Constitution) is liable to be struck down as unconstitutional. It is patently erroneous to suggest that a law is only vulnerable to a constitutional challenge if it violates a fundamental right. In the present instance, a violation of a constitutional right (the right to property under Article 300A) would render a law or executive action liable to be declared unconstitutional, and the executive action taken thereunder struck down or quashed., It is submitted that by incorrectly contending that no fundamental right of the petitioner has been alleged to have been violated in the present instance as a result of the first proviso to Section 25 of the Right to Fair Compensation Act and actions taken in pursuance thereof, Respondent No. 1 has summarily sought to minimise the relevance of the judgments cited by the petitioner in the case of Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh & Ors., [1954] 1 SCR 803, at paragraph 7; Shayara Bano v. Union of India & Ors. (2017) 9 SCC 1 that affirm that a law that is manifestly arbitrary, unregulated by any principle, left entirely to the discretion of the authorities concerned, is capricious and violates Article 14 of the Constitution of India, and is unconstitutional. Respondent No. 1 has itself, in its short submissions tendered on 5 December 2022, noted that the vires of a legislation may be challenged on the grounds of manifest arbitrariness (paragraph 4)., It is submitted that Respondent No. 1 has also failed to deal with the petitioner’s submissions on how the right to property has been recognised as both a constitutional and human right, and how laws that affect the right to property (and have an expropriatory effect) must be interpreted strictly. In support of this submission, he relied upon the judgment of the Supreme Court of India in Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. & Ors., (2007) 8 SCC 705, paragraphs 57‑58. He submitted that the first proviso to Section 25 of the Right to Fair Compensation Act, by its plain meaning, does not contemplate multiple extensions. The State of Maharashtra stated that should that be the case, it could have through a single notification also extended the time period by two years or more. In fact, the State’s response in this regard only reinforces the petitioner’s submissions on the completely unguided, unchanneled and unfettered nature of the power conferred on the appropriate Government under the first proviso to Section 25 of the Right to Fair Compensation Act., In response to the petitioner’s submissions as to the unchanneled, unguided and unfettered nature of the power conferred on the appropriate Government under the first proviso to Section 25 of the Right to Fair Compensation Act, Respondent No. 1 has sought to contend that the mere possibility of abuse of a provision does not render it unconstitutional. In this regard, he relied on the judgment of the Supreme Court of India in Sushil Kumar Sharma v. Union of India & Ors. (2005) 6 SCC 281, which was in the context of a challenge to Section 498A of the Indian Penal Code. However, this judgment is only in the context of a statutory provision that was otherwise found intra vires the Constitution of India. In support of this submission, he relied upon the judgment of the Supreme Court of India in Sushil Kumar Sharma v. Union of India & Ors., paragraphs 12 and 14., It is submitted that while the possibility of abuse of a statute does not invalidate it, the converse must also follow: that a statute which is otherwise invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. As affirmed by a Constitution Bench of the Supreme Court of India in The Collector of Customs, Madras v. Nathella Sampathu Chetty, 1962 SCR (3) 786, the constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed. If so judged it passes the test of reasonableness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Constitution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements., It is submitted that where the law or provision in question is otherwise invalid, the Supreme Court of India has held that it cannot be saved by the assurance of it being administered in a reasonable manner. In support of this submission, he relied upon the judgment of the Supreme Court of India in Shreya Singhal v. Union of India, (2015) 5 SCC 1 at paragraph 95., It is submitted that in the present instance, the first proviso to Section 25 of the Right to Fair Compensation Act is entirely arbitrary, is unregulated by any principle or guideline as to when and how it ought to be exercised or the maximum duration for which such extension could be sought. It is left entirely to the sweet will and unquestioned caprice of the appropriate Government. It provides no mechanism by which the exercise of such discretion can be constrained or supervised, or by which an affected person may seek redress. In support of this submission, he relied upon the judgment of the Supreme Court of India in Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh & Ors., [1954] 1 SCR 803, paragraphs 7 and 8. The provision is thus patently unconstitutional., It is submitted that Respondent No. 1 has provided no answer to the petitioner’s detailed submission that the delay in issuance of the award and the multiple extensions of the time period for the same are entirely attributable to the State of Maharashtra and its authorities. It has failed to address the petitioner’s submissions as to how even the ostensible reasons for the delay set out in the extension notifications do not amount to circumstances that justify the exercise of power under the first proviso to Section 25 of the Right to Fair Compensation Act. Pertinently, despite deprecating the petitioner’s reliance on a newspaper article to contend that the real reason the Bullet Train Project and award in respect of the subject plot was delayed was on account of the previous government’s opposition to it., It is submitted that Respondent No. 1 has not disputed the accuracy of the reports, nor denied or refuted the position. All of this leads to the inexorable conclusion that the extension notifications issued under the first proviso to Section 25 are illegal, invalid, and the land acquisition proceedings in respect of the subject plot have in fact lapsed. Solatium under Section 30(3) of the Right to Fair Compensation Act cannot compensate for prejudice caused by multiple extension notifications under the first proviso to Section 25 of the Right to Fair Compensation Act. This contention is belied by the plain terms of Section 25 of the Right to Fair Compensation Act, which contemplate the lapsing of the entire land acquisition proceedings if an award is not issued within twelve months from the date of issuance of a declaration under Section 19 of the Right to Fair Compensation Act. An extension of such time period is clearly an exception to the ordinary rule of lapsing, and must only be permitted if the circumstances legitimately warranted it., It is submitted that, admittedly an expropriatory piece of legislation, it must be interpreted strictly and in favour of the citizen. It is clear that the statute recognises that compensation calculated at twelve percent per annum cannot offset or mitigate the substantial prejudice and loss caused to a land owner on account of the indefinite continuation or extension of land acquisition proceedings., It is submitted that this is further reinforced by the well‑settled principle of statutory interpretation in respect of a proviso, that a proviso must ordinarily be understood as an exception to the general rule. The interpretation and application of a proviso cannot efface the main provision. Section 25 of the Right to Fair Compensation Act provides that if no award is made within twelve months from the publication of the declaration under Section 19 of the Right to Fair Compensation Act, the entire acquisition proceedings shall lapse. It is clear that the provision was enacted with a view to ensure that the award is issued in a time‑bound manner. Should extensions for the time period for issuance of the award be liberally availed of by recourse to the first proviso to Section 25 of the Right to Fair Compensation Act through multiple extensions or by seeking extensions for substantial periods, it would be entirely destructive of the primary purpose of Section 25 of the Right to Fair Compensation Act (i.e., to ensure that the award is issued in a time‑bound manner)., It is submitted that Respondent No. 1 has sought to contend that the extension notifications were in fact published on the website of the authority concerned, in compliance with the second proviso of Section 25 of the Right to Fair Compensation Act. This is palpably and manifestly incorrect. Admittedly the only website on which the extension notifications were published was on the Maharashtra Government’s e‑gazette website https://egazzete.mahaonline.gov.in/Forms/GazetteSearch.aspx. The Maharashtra e‑gazette website uploads hundreds of notifications daily and does not provide any mechanism by which an interested or affected party such as the petitioner may search the website to verify whether an extension notification has been published., It is submitted that the terms of the second proviso to Section 25 of the Right to Fair Compensation Act make it clear that it has to be uploaded on the website of the authority concerned, i.e., the authority that made the decision in respect of the extension of time period for issuance of the award. The publication on the website is meant to ensure that affected parties are aware of and notified about the extension of time period for passing the award as it has implications on the ability of the party concerned to deal with, or create any encumbrances in respect of the property that is the subject matter of the acquisition proceedings., It is submitted that accordingly, the extension notification ought to have been uploaded on the website of the appropriate Government or that of the Collector for the Mumbai Suburban District, who was acting as a delegate of the Central Government in respect of the acquisition, https://mumbaisuburban.gov.in/. In fact, this is the procedure that has been followed in respect of extension notifications relating to the Mumbai Metro, https://mumbaisuburban.gov.in/past-notices/landacquisition/., It is submitted that the State Government has chosen not to address this Court on the express language of Section 23 of the Right to Fair Compensation Act which specifically states that the Collector who proceeds to enquire into the objections shall make an award under his hand. Thus, Section 23 of the Right to Fair Compensation Act expressly mandates that the award is issued only by the same person who has heard and considered the objection under Section 23 of the Right to Fair Compensation Act., Prior to the enquiry as contemplated under Section 23 of the Right to Fair Compensation Act, under Section 21(1) of the Right to Fair Compensation Act, the Collector (Respondent No. 5) is required to publish a notice at convenient places or near the land in question stating that the Government intends to take possession of the land in question and that claims to compensation for all interests in the land may be made to him. Section 21(2) of the Right to Fair Compensation Act requires all persons interested in the land to appear before the Collector (Respondent No. 5) and state the nature of their interest in the land, particularise their claim and raise objections to the measurements. Thus, contrary to the erroneous and unfounded submissions of the State, the scheme under Sections 21 and 23 of the Right to Fair Compensation Act contemplates affording the affected parties a personal hearing. It embodies in itself the principles of natural justice. Significantly, the State in the course of arguments accepted, in the context of Section 15 of the Right to Fair Compensation Act, that since it contemplated affording the affected parties a personal hearing, the fundamental principle of natural justice, viz., he who hears must decide, was applicable. On the State’s own submission, this cardinal principle must also apply to Sections 21 and 23 of the Right to Fair Compensation Act and the personal hearing that precedes the making of the award., It is submitted that the State of Maharashtra has attempted to distinguish the judgments cited by the petitioner on the principles of natural justice in the context of the Land Acquisition Act, 1894, on the basis that the judgments were in the context of Section 5A of the 1894 Act (similar to Section 15 of the Right to Fair Compensation Act), and cannot apply to a hearing under Section 23 of the Right to Fair Compensation Act. The State’s contention in this regard is misplaced as: First, the judgments cited by the petitioner which enunciate this fundamental principle were not restricted to the specific context of Section 5A of the Land Acquisition Act, 1894. Second, the principle enunciated is a fundamental principle, applicable to all situations in which a hearing is afforded, and has been treated as an aspect of the rule of law., It is submitted that the State Government has not responded to the contentions urged by the petitioner on the draft award prepared by Mr. Vikas Gajare (Deputy Collector who heard the petitioner) not being the same award as that ultimately made and published by Mr. Santosh Bhise (the successor to Mr. Vikas Gajare). This assumes significance as according to the State Government, the draft award sent to the Divisional Commissioner for his approval did not materially change and, therefore, it made no difference as to who published the award. This is factually incorrect., The State Government relied on May George v. Special Tahsildar & Ors., reported in (2010) 13 SCC 98, to contend that even if no notice under Section 9(3) of the 1894 Act was given to the affected party, the acquisition proceeding did not lapse. It is submitted that the judgment in May George is easily distinguishable, and therefore has no relevance to the facts of the present case for the following reasons: In May George, the appellant was aware of the proceedings and she conveniently chose to remain silent and ultimately challenged the award after an inordinate delay of ten years and after the land had vested in the State itself., It is submitted that in that judgment, the urgency provision under the 1894 Act (Section 17) was resorted to and accordingly the hearing of objections contemplated under Section 5A of the 1894 Act was dispensed with. Under Section 17(1) of the 1894 Act, the Collector may, on expiration of fifteen days from publication of notice under Section 9(1) of the Act, take possession of the land needed for public purpose and thereafter, the land shall vest in the Government. The Court in May George was satisfied that notice was affixed on the land under Section 9(1) of the 1894 Act, satisfying the requirement of law and that the award was made within limitation. It is in that context the Supreme Court held that no prejudice was caused to a party if no notice under Section 9(3) of the 1894 Act was served upon the interested persons., It is submitted that invocation of Section 17 of the 1894 Act changed the complexion of the land acquisition in May George as the Collector took possession of land on the notice under Section 9(1) of the 1894 Act being issued and once the land vested in the Government, the same could not be divested thereafter. As noted by the Supreme Court at paragraph 9 of the judgment, the fact that the acquisition proceedings/award had been challenged at a belated stage i.e., a decade after the State took possession of the land. The Supreme Court noted that land once vested in the State cannot be divested, even if there had been some irregularity in the proceedings.
|
id_1650
| 5
|
This was the underlying basis for the Supreme Court stating that the person affected was only entitled to relief in respect of compensation. Learned Senior Counsel submitted that the Supreme Court in Automotive Tyre Manufacturers Association Vs. Designated Authority & Ors., (2011) 2 Supreme Court Cases 258 following the judgment of the Supreme Court in Gullapali Nageswara Rao & Ors. Vs. Andhra Pradesh State Road Transport Corporation & Anr., All India Reporter 1959 SC 308 held in context of a hearing by the Designated Authority under the Customs Tariff Rules, 1995 that the person who hears must decide, since if one person hears and another decides, then personal hearing becomes an empty formality. It was further held (in the context of a Designated Authority) that when the material was collected by the predecessor of the Designated Authority, but the final findings were recorded by the successor Designated Authority who had no occasion to hear the appellants, the final order passed by the successor Designated Authority offended the basic principles of natural justice and accordingly was quashed. He submitted that this is precisely what has transpired in the present case as well. The predecessor Deputy Collector being Mr. Vikas Gajare, heard the Petitioner on 15th July 2020, but the final Award was issued by the successor Deputy Collector Mr. Santosh Bhise, who had not heard the Petitioner at all., It is submitted that in Union of India Vs. Shiv Raj and Others, reported in (2014) 6 Supreme Court Cases 564 in the context of land acquisition proceedings (under the 1894 Act), the Supreme Court referring to Gullapali (supra) and Automotive Tyre (supra) held that the very person/officer who accords the hearing to the objector must also submit the report/take decision on the objection and in case his successor decides the case without giving a fresh hearing, the order would stand vitiated having been passed in violation of the principles of natural justice., It is submitted that adhering to the principles of natural justice is fundamental, irrespective of whether the hearing is before an administrative authority or a quasi‑judicial authority. The State Government cannot give a go‑by to the fundamental principle of natural justice, viz., he who hears must decide, and treat the same, in the context of Sections 21 and 23 as an empty formality, as if it matters not whether the successor Deputy Collector had heard the Petitioner's objections or not. The contentions urged by the State Government are contrary to the language of Section 23 of the Fair Compensation Act and do not take into consideration the provisions of Section 21 of the Fair Compensation Act. There is no answer by the State Government that the principles of natural justice have been grossly violated, rendering the award illegal, ultra vires and void ab initio., Mr. Seervai, learned senior counsel for the petitioner, filed written submissions on behalf of the petitioner in response to the notes of arguments submitted on behalf of the respondents No. 2 and 6 on the petitioner's conduct. He submitted that the first writ petition was filed for the sole purpose of challenging, inter alia, the acquisition of a plot identified by the respondents No. 2 and 6. Several correspondences were exchanged between the parties for acquisition of an alternate plot through direct purchase method. The respondents No. 2 and 6 found the alternate plot being the subject land acceptable. He submitted that the reference to the public notice dated 25th September 2018 in that background assumes significance since the said public notice was issued by respondent No. 4 for acquiring the subject land through direct purchase method., It is submitted that the direct purchase negotiation between the parties however failed and the same was recorded by the Supreme Court of India in paragraph (3) of the order dated 4th September 2019. What was worked out in the first writ petition was only the grievance of the petitioner regarding the notices received for acquisition of an earlier plot. The issue was resolved as respondent No. 4 submitted a revised proposal to respondent No. 3 for acquiring an alternate plot of land which was forming the subject matter of the public notice dated 25th September 2018. Since the revised proposal was made by respondent No. 4 to respondent No. 3, the authorities were not pursuing the earlier plot which they had identified for acquisition., In this background, the Supreme Court of India in the order dated 4th September 2019, particularly in paragraph (5), recorded that the petition is accordingly disposed of reserving all rights and contentions of the respective parties. The submissions of the respondents No. 2 and 6 that the issue of the acquisition of the subject land, which process had barely commenced, and to the extent that it had, was deliberately suppressed both from the Court and the petitioner, is untenable. The petitioner had not given any consent for the acquisition of the subject land in the order dated 4th September 2019., It is submitted by the learned senior counsel that once the negotiations failed, the authorities resorted to the acquisition under the Fair Compensation Act, which was not consented to by the petitioner. The petitioner was accordingly entitled in law to contest the proceedings, if the same were contrary to the provisions of the Fair Compensation Act, or ultra vires Articles 14 and 300A of the Constitution of India. The arguments of the respondents No. 2 and 6 that only the valuation of the subject land can be challenged and nothing more, is wholly misplaced., Learned senior counsel for the petitioner submitted that in the letter dated 19th July 2018 addressed by the petitioner to the respondents No. 2 while giving a composite offer for the subject land, the petitioner had expressly reserved their right under the Fair Compensation Act and had not given a go‑by to the same. He relied upon paragraphs (viii) and (xi) of the said letter dated 19th July 2018. The principles of estoppel as envisaged under Section 115 of the Indian Evidence Act, 1872 would not apply to the case of the petitioner on the ground that the petitioner had not given any consent for the acquisition of the subject land., It is submitted that the first writ petition worked itself out since the respondent authorities chose to acquire the subject land via direct purchase method, which also eventually failed and thus the initial acquisition of an earlier plot identified was no more an issue in the petition. The principles of estoppel cannot operate in a vacuum and the petitioner's conduct ought to be considered in the background of the first writ petition, which got worked out as the grievance raised in the first writ petition was no longer subsisting. There can be no estoppel against statute., Insofar as the issue of delay on the part of the petitioner raised by the respondents No. 2 and 6 is concerned, learned senior counsel for the petitioner submitted that in the chart submitted by the respondents No. 2 and 6, an analysis of the packages has been provided for the Maharashtra Ahmedabad High Speed Rail Project. According to the respondents No. 2 and 6, the subject acquisition falls under the C2 Works Package. However, on a bare perusal of page 4 of the compilation of charts, it is clear for the packages C1 to C3, which spread over approximately 160 km, the tender bids for construction are yet to be invited or finalised., Learned senior counsel submitted that from page 5 of the compilation of charts, it is clear that the tender bids for C1 packages are under review and the tender bids for C2 and C3 packages are invited. Out of the eight packages forming part of the project, three packages are yet at a nascent stage. The respondents No. 2 and 6 thus cannot attribute any alleged delay solely on the part of the petitioner., Insofar as the judgment of the Supreme Court of India in Writ Petition No. 442 of 2020 in the case of NHSRCL vs. State of Maharashtra & Ors., delivered on 9th December 2022 is concerned, it is submitted by the learned senior counsel for the petitioner that it is clear from 5th December 2018 till 17th November 2022, respondent No. 6 had been attempting to obtain piece‑meal approvals from the Ministry of Environment & Forest and such other approvals as were statutorily required for implementation of the Bullet Train Project. The respondents took over a prolonged period of four years for obtaining such permission. The petitioner is thus not responsible for any delay as canvassed by the respondents No. 2 and 6., The petitioner is not responsible for the alleged additional expense of Rs 1000 crores or any part thereof. No such data or material has been placed before the Supreme Court of India to substantiate this allegation. The respondents have not explained an inexplicable delay in getting the Development Plan 2034 amended for the subject plot., Insofar as the reliance placed on the provisions of the Specific Relief Act, 1963 by the respondents No. 2 and 6 is concerned, it is submitted by the learned senior counsel for the petitioner that this issue does not arise in the present petition as the petitioner is not seeking any injunction on the Bullet Train Project. It seeks to enforce and protect its constitutional and legal rights against the acquisition of the subject land by the authorities without following the provisions of the Fair Compensation Act in gross breach of the principles of natural justice., Insofar as the issue raised by the respondents No. 2 and 6 that the writ jurisdiction is discretionary and must be exercised in the larger public interest is concerned, it is submitted by the learned senior counsel for the petitioner that the petitioner does not dispute the advantages of the project and its national importance. However, the petitioner disputes and objects to the manner of the acquisition by bypassing the provisions of the Fair Compensation Act, and also the illegal and ultra vires attempt by the State of Maharashtra to invoke Section 10A of the Fair Compensation Act for the purpose of the Bullet Train Project. He submitted that it is undisputed that it is not the appropriate Government for this project. He referred to the notifications dated 20th August 2019 and 9th August 2019 in support of this submission., It is submitted by the learned senior counsel that the entitlement in law is not merely restricted to compensation or decision on the quantum, but is to protect its constitutional and statutory rights. The respondents No. 2 and 6 have not explained in the entire arguments why the entire acquisition proceedings have not lapsed. The concerned authority has taken nearly two years to publish the award. This submission is without prejudice to the rights and contentions of the petitioner that the respondents could not have invoked multiple times under the first proviso to Section 25 of the Fair Compensation Act for grant of extension of time for passing award., It is submitted that if the Supreme Court of India comes to the conclusion that the acquisition proceedings under Section 25 of the Fair Compensation Act have lapsed, then the entire acquisition and the steps taken by the authorities consequent thereupon must fail and be set aside. The Court shall exercise its jurisdiction to ensure that the authorities do not blatantly disregard or violate constitutional and statutory provisions. The petitioner has already challenged the constitutional validity of the first proviso to Section 25 of the Fair Compensation Act in this petition., We have heard the learned counsel for the parties at length and have considered their rival contentions. Some of the relevant provisions applicable to the facts of this case are extracted as under: Article 162 – Extent of executive power of State. Subject to the provisions of the Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws, provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authorities thereof., Article 254 – Inconsistency between laws made by Parliament and laws made by the Legislatures of States. (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State, provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State., Section 10A – Power of State Government to exempt certain projects. The State Government may, in the public interest, by notification in the Official Gazette, exempt any of the following projects from the application of the provisions of Chapter II and Chapter III of this Act, namely: (a) projects vital to national security or defence of India and every part thereof, including preparation for defence or defence production; (b) rural infrastructure including irrigation and electrification; (c) affordable housing and housing for the poor people; (d) industrial area or industrial estate set up by the State Government and its undertaking; (e) industrial corridor set up by the State Government and its undertaking (in which case the land shall be acquired up to one kilometre on both sides of designated railway line or roads for such industrial corridor); and (f) infrastructure projects including projects under public‑private partnership where the ownership of land continues to vest with the Government, provided that the State Government shall, before issue of notification, ensure the extent of land for the proposed acquisition keeping in view the bare minimum land required for such project., Section 15 – Hearing of objections. (1) Any person interested in any land which has been notified under subsection (1) of section 11, as being required or likely to be required for a public purpose, may within sixty days from the date of the publication of the preliminary notification, object to (a) the area and suitability of land proposed to be acquired; (b) justification offered for public purpose; (c) the findings of the Social Impact Assessment report. (2) Every objection under sub‑section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard in person or by any person authorised by him or by an Advocate and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under sub‑section (1) of section 11, or make different reports in respect of different parcels of such land, to the appropriate Government, containing his recommendations on the objections, together with the record of the proceedings held by him along with a separate report giving the approximate cost of land acquisition, particulars as to the number of affected families likely to be resettled, for the decision of that Government. (3) The decision of the appropriate Government on the objections made under sub‑section (2) shall be final., Section 23 – Enquiry and land acquisition award by Collector. On the day so fixed, or on any other day to which the enquiry has been adjourned, the Collector shall proceed to enquire into the objections (if any) which any person interested has stated pursuant to a notice given under section 21, to the measurements made under section 20, and into the value of the land at the date of the publication of the notification, and into the respective interests of the persons claiming the compensation and rehabilitation and resettlement, shall make an award under his hand of (a) the true area of the land; (b) the compensation as determined under section 27 along with Rehabilitation and Resettlement Award as determined under section 31 and which in his opinion should be allowed for the land; and (c) the apportionment of the said compensation among all the persons known or believed to be interested in the land, whether or not they have appeared before him., Section 23A – Award of Collector without enquiry in case of agreement of interested persons. (1) Notwithstanding anything contained in section 23, if at any stage of the proceedings, the Collector is satisfied that all the persons interested in the land who appeared before him have agreed in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the State Government, he may, without making further enquiry, make an award according to the terms of such agreement. (2) The determination of compensation for any land under subsection (1) shall not affect the determination of compensation in respect of other lands in the same locality or elsewhere in accordance with the other provisions of this Act. (3) Notwithstanding anything contained in the Registration Act, 1908, no agreement made under sub‑section (1) shall be liable to registration under that Act., Section 25 – Period within which an award shall be made. The Collector shall make an award within a period of twelve months from the date of publication of the declaration under section 19 and if no award is made within that period, the entire proceedings for the acquisition of the land shall lapse, provided that the appropriate Government shall have the power to extend the period of twelve months if in its opinion, circumstances exist justifying the same, and any such decision to extend the period shall be recorded in writing and notified on the website of the authority concerned., Section 26 – Determination of market value of land by Collector. (1) The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely: (a) the market value, if any, specified in the Indian Stamp Act, 1899 for the registration of sale deeds or agreements to sell, as the case may be, in the area where the land is situated; (b) the average sale price for similar type of land situated in the nearest village or nearest vicinity area; (c) consented amount of compensation as agreed upon under sub‑section (2) of section 2 in case of acquisition of lands for private companies or for public‑private partnership projects, whichever is higher, provided that the date for determination of market value shall be the date on which the notification has been issued under section 11. Explanation 1. The average sale price referred to in clause (b) shall be determined taking into account the sale deeds or agreements to sell registered for similar type of area in the near village or vicinity during the immediately preceding three years of the year in which such acquisition is proposed. Explanation 2. For determining the average sale price, one‑half of the total number of sale deeds or agreements to sell in which the highest sale price has been mentioned shall be taken into account. Explanation 3. While determining the market value, any price paid as compensation for land acquired under the provisions of this Act on an earlier occasion in the district shall not be taken into consideration. Explanation 4. Any price paid, which in the opinion of the Collector is not indicative of actual prevailing market value may be discounted for the purposes of calculating market value., Section 33 – Corrections to awards by Collector. (1) The Collector may at any time, but not later than six months from the date of award or where he has been required under the provisions of this Act to make a reference to the Authority under section 64, before making such reference, by order, correct any clerical or arithmetical mistakes in either of the awards or errors arising therein either on his own motion or on the application of any person interested or local authority, provided that no correction which is likely to affect any person prejudicially shall be made unless such person has been given a reasonable opportunity of making representation. (2) The Collector shall give immediate notice of any correction made in the award so corrected to all persons interested. (3) Where any excess amount is proved to have been paid to any person as a result of the correction, the excess amount shall be liable to be refunded and, in case of default or refusal to pay, may be recovered as prescribed by the appropriate Government., Section 64 – Reference to Authority. (1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for determination by the Authority, whether the objection relates to measurement of the land, amount of compensation, person to whom it is payable, rights of Rehabilitation and Resettlement, or apportionment of compensation among persons interested. The Collector shall, within thirty days of receipt of application, make a reference to the appropriate Authority. If the Collector fails to make such reference within the period, the applicant may apply to the Authority requesting it to direct the Collector to make the reference within thirty days. (2) The application shall state the grounds on which objection to the award is taken. Every such application shall be made (a) if the person was present or represented before the Collector at the time of award, within six weeks from the date of the Collector's award; (b) otherwise, within six weeks of receipt of notice from the Collector under section 21, or within six months from the date of the Collector's award, whichever expires first. The Collector may entertain an application after the expiry of the period, within a further period of one year, if satisfied that there was sufficient cause for not filing it within the specified period., Rule 18(1) to Rule 18(4) under Chapter VI of the Right to Fair Compensation (Maharashtra) Rules, 2014: (1) If an amount of compensation to be paid is less than rupees four crore, then the Deputy Collector (Land Acquisition) or the Sub‑Divisional Officer shall declare an award under section 23 of the Act. (2) If an amount of compensation to be paid is more than rupees four crore and less than rupees ten crore, then the Collector of the District shall declare the award. (3) If an amount of compensation to be paid is more than rupees ten crore, then the Collector shall obtain prior approval of the Divisional Commissioner of the concerned revenue division before declaring the award. (4) The financial limit authorized for the Deputy Collector (Land Acquisition) or the Sub‑Divisional Officer shall automatically be raised by ten percent on 1st January of every year., It is submitted that the petitioner has locus to challenge the acquisition proceedings in view of the order dated 4th September 2019 passed by the Supreme Court of India in Writ Petition No. 2131 of 2018. It is not in dispute that the State Government had proposed to acquire another land of the petitioner prior to 2018. The petitioner filed the writ petition inter alia praying for an order and directions against the respondents to acquire the alternate land of the petitioner. During the pendency of the writ petition, the petitioner, by their letter dated 19th July 2018, offered a second alternate plot. After visiting the site, Respondent No. 2 by letter dated 26‑7‑2018 conveyed acceptance in principle stating that the second alternate plot was prima facie suitable, subject to detailed examination and also submitted a modified sketch for consideration of the petitioner., Various steps were thereafter taken to pursue the proposal made by the petitioner for the second alternate land. Respondent No. 2 accepted the proposal for alternate land and consequently on 24th September 2018, the original land acquisition proposal submitted by letter dated 27th November 2017 was withdrawn and the second alternate proposal as mutually agreed upon was submitted to the Collector, Mumbai, Suburban District.
|
id_1650
| 6
|
There was disagreement with regards to the disbursement of compensation, more particularly with regards to repayment of compensation with interest in the event, Suit No. 679/1973 would have decided against the Petitioner., In view of this backdrop and development in the matter and the petitioner submitting the proposal for acquisition of land and the respondents having accepted the said proposal after taking various steps and examining the viability of the said alternate proposal given by the petitioner, the Supreme Court of India disposed of the earlier writ petition by passing an order dated 4 September 2019 observing that they were unable to reach a mutually acceptable agreement., The Supreme Court of India also observed that in the light of the revised proposal submitted by Respondent No. 4 to Respondent No. 3, referred to in the Public Notice dated 25 September 2018, the petition had worked itself out. Accordingly, the Supreme Court of India disposed of the writ petition reserving all rights and contentions of the respective parties, including the petitioner's right to challenge the valuation of the alternate land that may be determined by Respondent No. 3 in the event the respondents proceed to acquire the same under the provisions of the Right to Fair Compensation Act., In view of the petitioner having voluntarily offered the second alternate plot, that is, the subject land for acquisition for the Bullet Train Project, and its acceptance by Respondent No. 4, the only dispute remaining between the parties is the price to be paid and the manner of payment, considering the title dispute between the State of Maharashtra and the petitioner. The acquisition, however, ceased to be a dispute. The parties thereafter negotiated for payment of compensation in respect of the second alternate land, but the negotiation failed., Since the parties did not arrive at a mutually agreed amount of compensation, the Collector made an award. As various steps were taken by the respondents in pursuance of the alternate proposal offered by the petitioner, and the parties acted upon the offer of the alternate plot, the petitioner is estopped from challenging the acquisition of the plot on the grounds set out in the petition or otherwise. The petitioner has ample remedy available under the provisions of the Fair Compensation Act, particularly under Section 64, for enhancement of the compensation., We are not inclined to accept the submission of Mr. Seervai, learned senior counsel for the petitioner, that the right to challenge the acquisition proceedings was not given up by the petitioner in the earlier writ petition when that petition was disposed of. On the contrary, the petitioner prayed in the first writ petition that the respondents be directed to accept the alternate land of the petitioner. The petitioner never applied for clarification of the order dated 4 September 2019 and, on the contrary, participated throughout in the private negotiation concerning the determination of the compensation for the alternate land offered by the petitioner. The petitioner also did not challenge the order passed by the Supreme Court of India. The order of 4 September 2019 is self‑explanatory. In our view, the petitioner has no locus to challenge the acquisition proceedings in view of the aforesaid circumstances. The writ petition is liable to be dismissed on this ground. Be that as it may, we shall also deal with the grounds raised by the petitioner on their merits later in this order., We shall now decide the following interconnected issues: whether the first proviso to Section 25 should be struck down as unconstitutional; whether the land acquisition proceedings have lapsed; whether the proviso to Section 25 of the Fair Compensation Act does not contemplate multiple extensions; whether extension notifications issued by the appropriate authority are not in consonance with Section 25 of the Fair Compensation Act; and whether the justification given by the appropriate authority for granting two extensions of twelve months each is untenable. We shall first decide whether the petitioner has made out a case for declaring the first proviso to Section 25 of the Fair Compensation Act in violation of Articles 14 and 300A of the Constitution of India and thus should be struck down., It is vehemently urged by Mr. Seervai, learned senior counsel, that the proviso to Section 25 permits a single extension of the statutory period of twelve months and does not contemplate multiple extensions. It is submitted that although the first extension after the expiry of the initial twelve‑month period for making an award can be for a longer period, there cannot be more than one extension of twelve months each, as is the case here. In this backdrop, we shall now decide whether multiple extensions of the statutory period of twelve months from the date of publication of the declaration under Section 19(1) of the Fair Compensation Act would defeat the object and purpose of securing fair compensation for land owners, or would be in violation of Articles 14 and 300A of the Constitution of India., It is also urged by the learned senior counsel for the petitioner that by the second extension, the Government has not extended the period of twelve months prescribed under Section 25 for making an award but has further extended the period initially granted by exercising the power under the first proviso to Section 25, which is not permissible. The petitioner contends that there are no principles prescribed under Section 25 to guide the authority regarding the time and period of extension, and therefore the presumption of constitutional validity of the second extension should be regarded as ultra vires. The petitioner has placed reliance on the Supreme Court judgments in Dwarka Prasad Laxmi Narain and Shayara Bano., The learned senior counsel, in an alternate submission, disputed that the State Government has produced any material on record to demonstrate that circumstances existed to justify the grant of such extensions. Reliance is also placed on the Supreme Court judgment in Jagdish Pandey. It is urged that the first proviso to Section 25 of the Fair Compensation Act is vague, unintelligible, and confers wide, unfettered power on an authority, making it inherently arbitrary and violative of Article 14 of the Constitution of India. The Supreme Court judgment in Harakchand Ratanchand Banthia & Others has been cited in support of this submission., A perusal of the first proviso of Section 25 of the Fair Compensation Act indicates that, although the first part of Section 25 provides that the award must be made within twelve months from the date of publication of the declaration under Section 19, the proviso creates an exception on specific terms and conditions. The proviso states that if, in its opinion, circumstances exist justifying the same, the appropriate Government shall have the power to extend the time by twelve months, with the clear guideline that such circumstances must not only exist but must justify the extension of time., The proviso to Section 19 must be read with the main provision in the first part of Section 25, which provides twelve months to make an award from the date of publication of the declaration under Section 19. In our view, if the State Government could grant an extension for more than one year under the first proviso to Section 25, it could grant two extensions of one year each. There is no bar against granting multiple extensions., The learned Additional Solicitor General gave an illustration of the COVID pandemic or a case where war breaks out during the period of the first extension, making it impossible to make an award within the twelve‑month extension. According to the illustration, where the declaration under Section 19 was made on 1 January 2020 and war broke out in August 2020, the award could not be passed by 31 December 2020. The appropriate Government, believing the war might last another six months, extended the time until June 2021, noting that granting an extension in these circumstances, though warranted, would be challenging., In our view, Section 25 makes an express departure from the outer limit of two years provided under the Land Acquisition Act, 1894, particularly Section 11A. The learned senior counsel for the petitioner did not dispute Amendments No. 81 and 82 and the Land Acquisition Bill, 2011, by which the words 'two years' were replaced by 'twelve months' and the two provisos were inserted. We consider the petitioner's submission that the first proviso to Section 25 only contemplates a one‑time extension and not multiple extensions to be contrary to the plain language of the statute and, if accepted, would be a violation of that plain language., The Court and the parties must read the entire provision to ascertain the legislature's intent, not only the main part while ignoring the proviso. The petitioner has not raised any ground in the writ petition impugning the first proviso to Section 25 on the basis of violation of Article 300A of the Constitution of India, except asserting it vaguely. Accordingly, there is no substance in the petitioner's submission that the first proviso of Section 25 violates Article 300A., The learned Additional Solicitor General has produced material on record indicating that the reasons for granting two extensions of twelve months each were substantially attributable to the petitioner. The petitioner, being responsible for causing delay, prevented the Deputy Collector from making an award within the original stipulated period of twelve months under Section 25 of the Fair Compensation Act, and, even during the first extension, cannot claim that any prejudice was caused to the petitioner in view of the two extensions granted for making an award., The authority recorded the reasons why each extension of twelve months was necessary for making an award. Various steps were required by the respondents in view of the alternate land offered by the petitioner in lieu of the original land that was the subject of acquisition. In our view, no prejudice was caused to the petitioner by the respondents granting extensions of twelve months each. Nevertheless, the petitioner can claim compensation for interest, and may apply for enhancement of the claim under Section 64 of the Fair Compensation Act., In our view, to challenge any provision of the Act as unconstitutional, the petitioner must plead a cogent reason why such provision is unconstitutional or ultra vires. A perusal of the pleadings filed by the petitioner indicates that there are no such pleadings, or they are vague and lack any cogent reason. We find no substance in the petitioner's submission that the first proviso to Section 25 confers uncontrolled, unchannelled or wide powers for granting an extension to the appropriate Government for making an award without any criteria or guidelines., In our view, safeguards are provided in the first and second provisos when extending the period for making an award under the first part of Section 25 of the Fair Compensation Act. The appropriate Government must record the reasons while considering an extension. The petitioner has not seriously disputed the circumstances prevailing after the expiry of the original twelve months and the subsequent twelve months of the first part of Section 25, which necessitated granting two extensions of twelve months each to make an award for this public project. The learned senior counsel for the petitioner could not point out any manifest arbitrariness in the action taken by the appropriate Government in granting two extensions, nor could he demonstrate that the decision falls outside the parameters laid down by the Supreme Court in Shayara Bano, or that the power to grant such extension in the first proviso to Section 25 is capricious, irrational, or without an adequate determining principle. The principles laid down by the Supreme Court in Shayara Bano would be of no assistance to the petitioner., The Supreme Court judgment in Thakur Raghubir Singh, relied upon by Mr. Seervai, learned senior counsel for the petitioner, does not apply to the facts of this case even remotely. Similarly, the Supreme Court judgment in Harakchand Ratanchand Banthia & Others, relied upon by the petitioner's counsel, would not assist the petitioner in supporting its case that the power conferred under the first proviso to Section 25 is vague or infringes the constitutional right to property or a person's enjoyment of his right to hold such property., The Supreme Court in Sushil Kumar Sharma held that the mere possibility of abuse of a provision of law does not per se invalidate legislation. It must be presumed, unless proved otherwise, that the administration and application of a particular law would be done 'not with an evil eye and unequal hand'. The Court held that if a statutory provision is otherwise intra‑vires, constitutional and valid, the mere possibility of abuse of power in a given case would not make it objectionable, ultra vires or unconstitutional. In such cases, the 'action' and not the 'section' may be vulnerable. Accordingly, the Court may uphold the provision of law while setting aside the action, order or decision and granting appropriate relief to the aggrieved person. The principles laid down in Sushil Kumar Sharma apply to the facts of this case. In our view, the petitioner has not made out even a possibility of abuse of the amendment inserting Section 10A to the Fair Compensation Act, and even if there were such a possibility, it cannot be a ground for invalidating the legislation. The petitioner does not allege that by inserting Section 10A the State Government acted arbitrarily or malafide., A perusal of the record indicates that both notifications granting extensions of twelve months by the State Government have been recorded in writing and published on the State Government's website. The learned senior counsel did not dispute the State Government's power to grant at least one extension, for any period deemed necessary under the first proviso to Section 25. Admittedly, in this case the State Government granted two extensions of twelve months each after the expiry of the original twelve‑month period from the date of declaration under Section 19 of the Fair Compensation Act., The Supreme Court in Collector of Customs, Madras & Anr. v. Nathella Sampathu Chetty & Anr., relied upon by the learned senior counsel for the petitioner, held that the possibility of abuse of a statute otherwise valid does not impart any element of invalidity. Conversely, a statute that is otherwise invalid as unreasonable cannot be saved by being administered in a reasonable manner. There is no dispute about the propositions of law laid down by the Supreme Court in that judgment. However, the petitioner failed to demonstrate that the provision of Section 25 of the Fair Compensation Act falls within any exception carved out by the Supreme Court in that judgment., Similarly, the Supreme Court judgment in Shreya Singhal v. Union of India, relied upon by the learned senior counsel for the petitioner, does not advance the petitioner's case, as the facts of that case are distinguishable., A perusal of the record clearly indicates that the petitioner has failed to discharge the onus to show that any of the provisos to Section 25 of the Fair Compensation Act violates Article 14 or Article 300A of the Constitution of India. In our view, the principles of law laid down by the Supreme Court and this Court apply to the facts of this case. Even if the petitioner's arguments are accepted that conferring such powers of granting extension upon the appropriate Government would delay the acquisition proceedings and cause prejudice to land owners, the proviso to Section 25 of the Fair Compensation Act cannot be declared ultra vires or struck down on that ground., Section 25 of the Fair Compensation Act provides that the Collector must make an award within twelve months from the date of publication of the declaration under Section 19, and if no award is made within that period, the entire acquisition proceedings shall lapse. The period prescribed under Section 25 is subject to two provisos. In this case, the appropriate Government, having found circumstances justifying an extension, recorded the decisions in writing. We are not inclined to accept the petitioner's counsel's submission that, after the expiry of twelve months from the date of issuance of the declaration under Section 19, the acquisition proceedings have lapsed., We have already dealt with the issue that the first proviso to Section 25 of the Fair Compensation Act contemplates multiple extensions. There is no bar against the appropriate Government from granting multiple extensions, provided that circumstances exist justifying the same and that the decision to grant an extension is recorded in writing, notified, and uploaded on the authority's website. Even according to the petitioner, the appropriate Government is empowered to grant one extension for more than twelve months, subject to justifying circumstances, rather than granting a single extension of twelve months. In our view, the appropriate Government is empowered to grant more than one extension of twelve months, subject to the conditions prescribed in the first and second provisos to Section 25. If an extension is required due to justified circumstances, the petitioner would be fully compensated by claiming interest as per the Act., A perusal of the first proviso to Section 25 of the Fair Compensation Act clearly indicates that there is no outer limit on granting an extension for a particular period. The proviso grants discretion to the appropriate Government to extend the time to make an award, subject to compliance with the conditions prescribed in the first and second provisos to Section 25., The learned senior counsel for the petitioner did not dispute that the validity of the first proviso to Section 25 of the Fair Compensation Act was challenged by the petitioner only in October 2022 by amending the petition, particularly in ground N. In our view, the first proviso empowering the appropriate Government to grant an extension, subject to the conditions mentioned therein, does not impinge or violate the fundamental rights of the petitioner, but merely enables the appropriate Government to take the acquisition proceedings already initiated to their logical conclusion. We find no specific ground in the writ petition demonstrating how the proviso to Section 25 violates the petitioner's rights., The petitioner, having challenged the constitutional validity of the proviso, bears the burden of establishing that the proviso violates the constitutional mandate. In our view, the learned Additional Solicitor General is correct in his submission that Sections 11, 15, 19, 23 and 25 to 30 of the Fair Compensation Act balance the rights of all stakeholders, and the petitioner's rights are duly protected. If the market value of the land under acquisition decreases subsequently, i.e., after the date of issuance of the notification by the appropriate Government under Section 11, the respondents become entitled to pay compensation at the predetermined rate., There is no substance in the petitioner's counsel's submission that the first proviso to Section 25 of the Fair Compensation Act violates Article 300A of the Constitution of India. The provisions already provide for due compensation for land acquisition and for compensation for any delay under the Fair Compensation Act. The amount of compensation is determined by the authorities, and further challenge is provided for under the Act., The petitioner's counsel submitted that Respondent No. 1 has failed to address the petitioner's submissions on how the right to property has been recognized as both a constitutional and human right, and that laws affecting the right to property (and having an expropriatory effect) must be interpreted strictly; this submission has no merit., The Supreme Court judgment in Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. & Ors., relied upon by Mr. Seervai, concerned whether respondents had applied for and obtained sanction under building bye‑laws framed by the respective Gram Panchayats in 1991 for development plans under Section 29(1). The applications were rejected by the Authority. The Supreme Court examined whether the Delegated Authority could exercise power under Section 50 of the Act and held that such an interpretation would be unlawful, resulting in misuse of powers and arbitrary exercise depriving the citizen of his right to use the land. The provisions considered were entirely different, and the judgment cannot be considered precedent for the facts of this case., The Supreme Court judgment in MCGM v. Abhilash Lal & Ors., relied upon by Mr. Seervai, held that if a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. The Court also referred to its earlier judgment in Nazir Ahmad v. King‑Emperor. There is no dispute about the propositions of law laid down by the Supreme Court. The petitioner could not demonstrate which part of the obligations under the first and second provisos to Section 25 of the Fair Compensation Act has not been complied with in the manner prescribed by the appropriate Government while granting an extension of time to make an award. Consequently, that judgment does not advance the petitioner's case., The Supreme Court also took a similar view in Nareshbhai Bhagubhai & Ors. v. Union of India. For the reasons recorded earlier, that judgment does not advance the petitioner's case. The Privy Council judgment in Nazir Ahmad v. King‑Emperor, which took a similar view, has been dealt with by the Supreme Court in MCGM v. Abhilash Lal & Ors., as already noted., The Supreme Court judgment in Mohinder Singh Gill & Another, relied upon by Mr. Seervai, held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by those reasons and cannot be supplemented by fresh reasons in an affidavit or otherwise. In our view, the petitioner has not demonstrated any reasons in the affidavits filed in this writ petition that supplement the reasons recorded in the impugned extensions. That judgment, therefore, does not advance the petitioner's case. The Supreme Court judgment in Commissioner of Police, Bombay v. Gordhandas Bhanji, taking a similar view in Mohinder Singh Gill & Another, is also clearly distinguishable on the facts for the same reasons., The Supreme Court judgment in May George v. Special Tahsildar & Ors., relied upon by the learned senior counsel for Respondents Nos. 1 and 3‑5, held that while construing Section 9(3) of the Land Acquisition Act, 1894, to determine whether a provision is mandatory or directory, the Court must examine not only the language but also the context and purpose of the provision. It may also be necessary to ascertain the legislature's intent and the serious and general inconvenience or injustice to persons arising from its application., The Court held that a provision is mandatory if it is enacted to enable the doing of something and prescribes the formalities for doing certain things. The Supreme Court, in that judgment, held that failure to issue notice under Section 9(3) would not adversely affect subsequent proceedings, including the award and title of the Government in the acquired land. The interested person is entitled only to receive compensation, and there may be numerous disputes regarding the apportionment of compensation. In such an eventuality, he may approach the Collector to make a reference to the Court under Section 30 of the Land Acquisition Act., The Supreme Court held that the Court may determine the consequences that would flow from construing a provision in one way or another, whether the statute provides for a contingency for non‑compliance, whether non‑compliance attracts a small penalty or a serious consequence, and whether a particular interpretation would defeat or frustrate the legislation. If a provision is mandatory, an act done in breach thereof will be invalid.
|
id_1650
| 7
|
In our view, since there is no cap provided as to what period under the first proviso to Section 25 of the Fair Compensation Act to make an award can be extended, the appropriate Government granted two extensions of twelve months each in the facts of this case, which cannot adversely affect the subsequent proceedings, i.e., the declaration of award within the extended period granted twice. On such ground, the acquisition proceedings cannot be considered as lapsed by the High Court of Bombay. The language of the first part of Section 25 of the Fair Compensation Act, which requires the award to be made within twelve months from the date of issuance of declaration under Section 19, becomes diluted in view of the powers conferred on the appropriate Government to grant an extension in making an award subject to the condition prescribed therein. The first part of Section 25 therefore cannot be held as mandatory in view of the proviso conferring powers to grant extension, which power has been exercised validly by the appropriate Government by recording reasons and publishing those orders in the manner prescribed under the second proviso to Section 25 of the Fair Compensation Act., The principles of law laid down by the Supreme Court of India in the case of May George v. Special Tahsildar & Ors. apply to the facts of this case. We are respectfully bound by those principles. Mr. Seervai, learned senior counsel, could not distinguish the judgment of the Supreme Court in that case., The learned senior counsel for the petitioner vehemently urged that the extension notifications were published only on the Maharashtra Government electronic gazette website, which uploads hundreds of notifications daily and does not provide any mechanism for an interested or affected party to search the website to verify whether an extension notification has been published. The second proviso to Section 25 of the Fair Compensation Act provides that any decision to extend the period shall be recorded in writing, notified and uploaded on the website of the authority concerned. It is not disputed that the notifications were uploaded on the State Government electronic gazette website (https://egazette.mahaonline.gov.in/Forms/GazetteSearch.aspx). The petitioner does not claim that he was unaware of the extension granted by the appropriate Government. Even if the petitioner could not notice the notification granting the extension of time to make an award, no prejudice is caused. In our view, even if any lapse were alleged, it was not on the part of the respondents, and the acquisition proceedings cannot be declared as lapsed on that ground. The petitioner has failed to demonstrate any prejudice suffered due to such alleged lapse., The Supreme Court of India in the case of Shri Ram Krishna Dalmia & Ors. v. Shri Justice S. R. Tendolkar & Others held that there is a presumption in favour of the constitutionality of an enactment and the burden lies on the party challenging it to show a clear transgression of constitutional principles. It must be presumed that the legislature understands and correctly appreciates the needs of the people, that its laws address problems manifested by experience, and that any discriminations are based on adequate grounds. The Supreme Court in R. K. Garg v. Union of India & Others similarly held that the presumption of constitutionality applies and the burden is on the challenger to demonstrate a transgression. In the facts of this case, we do not find any transgression of constitutional principles., The Supreme Court of India in Union of India & Others v. Exide Industries Limited & Another held a similar view, stating that the Court's approach to testing the constitutional validity of a provision is well settled. The fundamental concern is to inspect the existence of enacting power, and once such power is found, to ascertain whether the provision impinges upon any right enshrined in Part III of the Constitution., The Supreme Court of India in V. S. Rice & Oil Mills & Others v. State of Andhra Pradesh held that when a citizen challenges the validity of a statute on the ground that it contravenes Article 14, specific, clear and unambiguous allegations must be made, showing that the impugned statute is based on discrimination not referable to a rational classification having nexus with the statute's intended object. A similar view was taken in Amrit Banaspati Co. Ltd. v. Union of India & Others., The Supreme Court of India in Consumer Action Group & Another v. State of Tamil Nadu & Others held that even though very wide powers may be conferred on a delegatee, a provision would not be ultra vires if its guidelines can be gathered from the preamble, objects, reasons and other provisions of the Act and Rules. Courts must discover whether there is any legislative policy, purpose of the statute, or clear intent expressed through its provisions. The delegatee must exercise its powers within this controlled path to sub‑serve the policy and achieve the objectives of the Act., The High Court of Bombay, in the case of Film and Television Producers Guild of India Ltd. & Another, considered the provisions of Section 11(2) of the Telecom Regulatory Authority of India Act, 1997 and held that the provision is an enabling section and cannot be invalidated merely because of a possibility of abuse. Where abuse occurs, the abuse itself, not the provision, is struck down. The question remains whether the State Government acted beyond the scope of entrustment under Article 258(1) of the Constitution of India while inserting Section 10A by amendment to Section 10 of the Fair Compensation Act., It is a common ground that Section 10A was inserted by Maharashtra Act No. 37 of 2018, empowering the State Government to exempt any project from the application of the provisions of Chapters II and III of the Fair Compensation Act in the public interest, as prescribed in Sections 10A(a) to 10A(f). The Bullet Train Project is an infrastructural project. A perusal of Section 10A indicates that the State Government exercised its powers independently, not as a delegate of the Central Government. The petitioner has already relinquished the challenge to the constitutional validity of Section 10A of the Fair Compensation Act., The only question that arises for consideration of the High Court of Bombay is whether such powers exercised by the State Government in the Central Act are permissible. The learned senior counsel for the petitioner did not dispute that the Fair Compensation Act, being a subject of acquisition, falls in the Concurrent List, particularly entry No. 42, and therefore the State Government has the power to add provisions to the Central Act by State amendment, subject to the restriction imposed under Article 258(1) of the Constitution of India. The notification was issued by Respondent No. 2 in exercise of its powers under Article 258(1). The Maharashtra amendment is broad and not confined to the Bullet Train Project, whereas the notification dated 9 August 2019 is specifically for the Bullet Train Project. The Appropriate Government under the Fair Compensation Act also carries out functions other than acquisition. The petitioner has not impugned the 9 August 2019 notification that declared the State Government as the Appropriate Government. The challenge to the State Government’s power to insert Section 10A of the Fair Compensation Act cannot be sustained on that ground., Admittedly, Respondent No. 2 has appointed Respondent No. 1 as the 'Appropriate Government'. The State Government is acting both as the Appropriate Government and as the State Government, and the exercise of power under Section 10A of the Fair Compensation Act is as the State Government, not as a delegate. In our view, the State Government in this case is wearing two hats., The Supreme Court of India in Molar Mall v. Kay Iron Works (P) Ltd. held that when there is no challenge to the constitutional validity of a proviso before the Court, the Court must proceed on the footing that the proviso, as it stands, is intra vires and interpret it accordingly., The Supreme Court of India in State of Bihar v. Rai Bahadur Hurdut Roy Moti Lal Jute Mills & Another held that when the vires of statutory provisions are challenged on constitutional grounds, the material facts must first be clarified to determine whether the impugned provisions are attracted. If they are, the constitutional challenge must be examined and decided; if the facts do not attract the provisions, there is no occasion to decide the vires, and any decision would be purely academic. Courts should be reluctant to decide constitutional points merely as matters of academic importance., During the arguments, the learned Additional Solicitor General pointed out from the admitted pleadings that the description of the petitioner’s property indicates the presence of various wild trees. The land is vacant and barren with a temporary shed. The State Amendment inserting Section 10A applies to all infrastructure projects, not only the Bullet Train Project. No family is affected by the acquisition of the writ property for this infrastructure project; there is no resettlement of any project‑affected person. No person is displaced as no construction has been undertaken on the writ property. A substantial part of the writ property is covered by wild trees, and the plot is uneven, affected by a high‑tension line, mangroves, and remains undeveloped., The learned senior counsel for the petitioner could not dispute these factual aspects and that by granting exemption from the applicability of Chapters II and III of the Fair Compensation Act, the petitioner’s rights were not affected in any manner. Since Chapters II and III, which prescribe various conditions, were not applicable to the writ property given its nature and surroundings, the petitioner cannot raise a plea that the State Government could not have granted such an exemption. The plea of constitutional validity cannot be decided in the abstract., There is no substance in the petitioner’s submission that such powers could not have been exercised by the Central Government. These powers have been conferred upon the State Government to grant the exemption. Nevertheless, this argument cannot be accepted on the ground that the exemption from Chapters II and III of the Fair Compensation Act affected the petitioner., We shall now consider whether the impugned award violates the principles of natural justice. The learned senior counsel for the petitioner vehemently urged that a notice under Section 21 was issued by Respondent No. 4, Ms. Sonali Mule, on 27 January 2020, and the hearing was held on 15 July 2020. Pursuant to the order passed by the High Court of Bombay in the earlier writ petition, the petitioner appeared before Mr. Vikas Gajare through his advocate. However, the award was passed by Mr. Santosh Bhise. The petitioner contends that the officer who granted the hearing should have rendered the award, not another officer who had never heard the petitioner. He relied upon Section 23 of the Fair Compensation Act and various judgments in support of this submission., The respondents argued that the enquiry under Section 23 of the Fair Compensation Act is limited to three purposes: measurement, valuation of land, and the respective interest of the parties. They urged that the concept of one person hearing and another deciding the matter applies under Section 15, not Section 23, of the Fair Compensation Act., The learned Additional Solicitor General relied upon Sections 11, 15, 19, 23 and 25 to 30 of the Fair Compensation Act to support the submission that an exceptional procedure is required for acquiring the land and making an award. During the arguments, the learned senior counsel for the petitioner was invited to consider Rule 18 of the 2014 Rules., Mr. Seervai, learned senior counsel for the petitioner, could not dispute that, given the compensation in the draft award proposed by the then Deputy Collector exceeded Rs 10 crores, the draft award was sent to the Divisional Commissioner, Konkan Division, for approval. The Divisional Commissioner subsequently made various suggestions for implementation in the final award, which were incorporated by the Deputy Collector who then declared the award. The petitioner does not contend that the Divisional Commissioner ought to have granted a personal hearing to the petitioner before making any recommendations or granting approval to the draft award under Rule 18 of the 2014 Rules., It is also not the case of the petitioner that the Deputy Collector, who submitted recommendations to the Divisional Commissioner, Konkan Division, ought to have given a personal hearing to the petitioner again. The petitioner has not challenged the validity of Rule 18 of the 2014 Rules, which requires the approval of the Divisional Commissioner for a draft award proposing compensation of more than Rs 10 crores., In view of the fact that the petitioner raised no ground in the writ petition challenging the Deputy Collector’s power to grant approval to the draft award, and the Deputy Collector accepted the Divisional Commissioner’s recommendations and declared the award, the petitioner is estopped from contending that the award was made by a different Deputy Collector. Consequently, there is no substance in Mr. Seervai’s submission that the award was passed in violation of the principles of natural justice. The concept that the same person who hears must also make the award does not apply here., There is no substance in the submission made by Mr. Seervai, learned senior counsel for the petitioner, that the State Government has not responded to the petitioner’s contentions on the draft award prepared by Mr. Vikas Gajare, who heard the petitioner, while the award was published by Mr. Santosh Bhise, the successor to Mr. Gajare. In view of this legal position, the Supreme Court judgments in Automotive Tyre Manufacturers Association and in Gullapalli Nageswara Rao & Ors. are distinguishable on facts and do not advance the petitioner’s case. Similarly, the Supreme Court judgment in Union of India v. Shiv Raj & Others is also distinguishable on facts., There is no dispute that the principles of natural justice are fundamental, whether the hearing is before an administrative or a quasi‑judicial authority. The State Government cannot disregard this fundamental principle. It is not the case of the State Government that the context of Sections 21 and 23 of the Fair Compensation Act is an empty formality. However, in this case, in view of Rule 18 of the 2014 Rules and the fact that no prejudice is caused to the petitioner, reliance on Sections 21 and 23 by the petitioner is of no assistance., The Supreme Court in Laxmi Devi v. State of Bihar & Ors., cited by Mr. Seervai, held that the person who heard and considered the objections alone can decide them, and not even his successor is competent to do so on the basis of materials collected by the predecessor. Under Rule 18 of the 2014 Rules, the Deputy Collector was obliged to obtain the Divisional Commissioner’s approval because the proposed compensation exceeded Rs 10 crores. The petitioner raised no ground that the Divisional Commissioner should have granted a personal hearing before making any recommendation or approving the draft award. Consequently, the Laxmi Devi judgment does not advance the petitioner’s case., We shall now consider whether, even if there are irregularities in the procedure followed by the respondents in acquiring the writ property for the infrastructural project, the Court can exercise its discretionary power under Article 226 of the Constitution of India to interfere with the public‑interest infrastructural project, or whether no interference is warranted because the petitioner would be compensated monetarily by seeking enhancement of compensation under Section 64 of the Fair Compensation Act., The Supreme Court of India in Shayara Bano held that the vires of legislation may be challenged on the ground of manifest arbitrariness under Article 14. A party challenging constitutional validity on this ground must specifically plead, giving cogent and sufficient reasons in support. A perusal of the petitioner’s pleadings on the constitutional validity of the proviso to Section 25 of the Fair Compensation Act shows that the petitioner did not plead manifest arbitrariness. In our view, no enactment can be struck down merely because it is alleged to be arbitrary, unreasonable, or irrational. Mr. Seervai did not dispute that the Bullet Train Project is an infrastructural and public project of national importance., In our view, any procedural difficulties in acquiring the writ property would at most affect the quantum of compensation, not the validity of the acquisition. The petitioner would be compensated by considering a claim for enhancement under Section 64 of the Fair Compensation Act. Irregularities, if any, in following the second part of Section 25 would not vitiate the acquisition of the writ property., In our view, the powers of the Court under Article 226 of the Constitution of India are discretionary, and the existence of alleged procedural irregularities in acquiring the writ property does not justify exercising that discretion, given that the Bullet Train Project is an infrastructural and public project of national importance. The Supreme Court of India in Ramniklal N. Bhutta & Anr. held that the country has embarked on an ambitious programme of all‑round economic advancement to make the economy competitive in the world market, attracting foreign direct investment and competing with economies such as China, South Korea, Taiwan and Singapore., It is recognized that the infrastructure necessary to sustain rapid economic progress is woefully lacking in the country. Transportation, power and communications require substantial improvement, expansion and modernization, often necessitating land acquisition without delay. Affected persons can challenge acquisition proceedings in Courts, typically through writ petitions filed in High Courts. While past practices varied, the Courts must now keep the larger public interest in mind when granting stays or injunctions. The power under Article 226 of the Constitution of India will be exercised only in furtherance of justice, not merely on a technical legal point. In land acquisition for public purposes, the interests of justice and public interest often coalesce, and the Courts must balance public and private interests while exercising their discretionary powers under Article 226., It may be open to the High Court to direct, if it finally finds that the acquisition was vitiated due to non‑compliance with a legal requirement, that the interested persons be awarded a lump‑sum sum of damages or a percentage of the compensation payable. Various forms of appropriate relief exist, and quashing the acquisition proceedings is not the only remedy. In our view, the Bullet Train Project is an infrastructural project of national importance that will benefit a large number of the public and contribute to the country's betterment. The principles laid down by the Supreme Court in Ramniklal N. Bhutta & Anr. apply to the facts of this case. We are respectfully bound by those principles. Mr. Seervai could not distinguish the Ramniklal N. Bhutta judgment., During his argument, the learned Additional Solicitor General drew our attention to various averments and documents from the detailed affidavit filed by Respondents No. 2 and 6, providing details of the Bullet Train Project undertaken by the Government, its features, benefits to the large public, and steps taken so far in furtherance of the acquisition of the writ property. He pointed out that the Bullet Train Project is being carried out in collaboration with the funding partner Japan International Cooperation Agency (JICA), and that JICA has already conducted the Social Impact Assessment. The objective of the Social Impact Assessment, as provided under Section 8(2) of the Fair Compensation Act, 2013, is to enable the Appropriate Government to recommend the area of acquisition that ensures (i) minimum displacement of people, (ii) minimum disturbance to infrastructure and ecology, and (iii) minimum adverse impact on the individuals affected., It is pointed out that the Bullet Train Project has been declared a Vital Infrastructure Project by the Government of Maharashtra by Gazette Notification dated 18 May 2018. The High Speed Rail Corridor is approximately 508.17 km long and will have twelve stations. Of this length, 348.03 km will be in the State of Gujarat, 4.5 km in the Union Territory of Dadra and Nagar Haveli, and 155.64 km in the State of Maharashtra. The railway line will pass through Mumbai, Thane and Palghar districts in Maharashtra and the districts of Valsad, Navsari, Surat, Bharuch, Vadodara, Anand, Kheda and Ahmedabad in Gujarat, as well as the Union Territory of Dadra and Nagar Haveli. About 92 % of the project length is elevated. An elevated track ensures no obstruction to the natural flow of water, traffic, and movement of farmers, greatly improves safety and security against external interference, and reduces land requirement to a width of 17.5 m compared with 36 m for conventional railway tracks., It is pointed out that the rail corridor includes a 21 km stretch that will be an underground single‑tube twin‑track tunnel, of which a 7 km segment will be an under‑sea tunnel beneath Thane Creek. We are inclined to accept the learned Additional Solicitor General’s submission that the purpose of this underground section is to minimize adverse impact on the Thane Creek Flamingo Sanctuary, adjoining mangroves, and high‑rise residential complexes of suburban Mumbai. The tunnel phase is a critical component of the project and will require the maximum construction time compared with other civil construction packages., We are inclined to accept the learned Additional Solicitor General’s submission that the Bullet Train Project, upon completion, will give the country its first high‑speed rail and its first under‑sea tunnel, approximately 40 metres deep. The Japanese Government has provided financial aid through JICA in the form of an Official Development Assistance (ODA) loan. The tunnel construction will involve a 13.2 metre diameter, the largest urban tunnel boring work ever undertaken in India. It will be India’s first 7 km of under‑sea tunnelling and is expected to require the maximum construction period of 5.2 years among the corridor sections., The learned Additional Solicitor General submitted that travel time between Mumbai and Ahmedabad will be reduced to 1 hour 58 minutes from the current 6 hours 35 minutes by train, acting as a catalyst for economic growth of the cities it passes through. The project will increase inter‑regional connectivity along the rail corridor and boost development of satellite towns hosting Bullet Train stations, such as the Palghar Township Projects of the Mumbai Metropolitan Region Development Authority., We are inclined to accept the learned Additional Solicitor General’s submission that the Bullet Train Project is expected to generate over 90,000 direct and indirect jobs and to undertake skill development and income‑restoration training for numerous project‑affected persons. More than 51,000 technicians, skilled and unskilled workers will be required for various construction activities. It is also expected that the project will serve 92,000 passengers per day per direction by 2053 and will be highly instrumental in advancing the Make In India initiative, with trade agreements between Japanese organisations and the National High Speed Rail Corporation Limited (NHSRCL), the Confederation of Indian Industry (CII), and ASSOCHAM executed to bolster technology transfer and in‑house skilled‑force development., We are inclined to accept the learned Additional Solicitor General’s submission that the estimated cost for this project is around 1.08 lakh crores, and that so far an amount of more than Rs 32,000 crores has been spent.
|
id_1650
| 8
|
Crores have been expended by National High Speed Rail Corporation Limited (NHSRCL) towards implementation of the project. The land approximately admeasuring 430 hectares is required, out of which as of November 2022, 97% of the land is already acquired. For the underground section between Bandra Kurla Complex and Thane, all the land parcels required are already in possession of NHSRCL, save and except the petitioner’s land., We are informed that various permissions have already been secured by the respondents such as Forest Clearances, Wildlife Clearances (Sanjay Gandhi National Park, Tungareshwar Wildlife Sanctuary, Thane Creek Flamingo Sanctuary), Coastal Regulation Zone clearances and Mangrove cutting clearance, clearances from Dahanu Taluka Environment Protection Authority, which have resulted in NHSRCL incurring a cost of Rs.146 crores. All 28 crossings are already procured from various authorities since this rail corridor traverses through various highways, expressways, rail corridors etc. We are inclined to accept the statement of the learned Additional Solicitor General that more than 85% utility diversion works are complete in Maharashtra and 100% in the affected tunnel section has been completed., We accept the submission of the learned Additional Solicitor General that the tenders for 100% of civil works in the Maharashtra region have already been floated. In Gujarat, 100% civil works contracts are already awarded and construction is in full swing. In Gujarat, foundation work for 194 km rail corridor, 9.5 km of viaduct, 23 km of girder casting are complete. Construction work of all eight bullet trains in Gujarat are already in full swing. We accept the submission made by the learned Additional Solicitor General that except the land of the petitioner, other lands are already in possession of the Government. The Government has already allotted alternate land. The alignment of the rail corridor sections between Bandra Kurla Complex and Thane (High Speed Rail) in view of the proposal given by the petitioner for alternate land and having been accepted by the respondents, has been altered. The Government is also required to increase additional construction cost and safety costs in view of the writ property being very close to the line., The statement made by the learned Additional Solicitor General that due to long‑pending acquisition of the land of the petitioner, the National High Speed Rail Corporation Limited had to cancel the tenders relating to the underground tunnelling works on two occasions, which resulted in cost escalation by at least 1,000 crores, is noted. The petitioner did not raise the issue that the acquisition had lapsed due to the efflux of time during these proceedings. We have also perused the chart prepared by NHSRCL showing the nature of the schematic Mumbai‑Ahmedabad High Speed Rail Corridor route plan, the change of proposed land under acquisition suggested by the petitioner and the consequences thereof, and the nature of construction activities required for the Bullet Train Project. Learned senior counsel for the petitioner did not dispute these important facts, particularly the work already undertaken by the respondents in Gujarat and Maharashtra and the extent of land already acquired and possessed by the respondents for completion of the Bullet Train Project., At such stage of the project, the Bombay High Court cannot exercise the discretion under Article 226 of the Constitution of India to interfere with the acquisition of the writ property, which concerns a small portion of the land compared with the 97% already acquired by the respondents and on which various activities have already been substantially carried out. The Government has already spent a huge amount on completing the activities so far. The Bullet Train Project is funded by the Japan International Cooperation Agency, and any interference in the acquisition of the writ property at this stage would be totally against the public interest. In our view, any interference would also be contrary to the principles of no interference with the public project under Section 20A and Section 42HA of the Specific Relief Act, 1963. There are no procedural irregularities on the part of the respondents. Even if any irregularity existed, no interference is warranted as the project is an infrastructural project of national importance and a matter of public interest., The Supreme Court of India in the case of National High Speed Rail Corporation Limited (supra) considered the matter relating to the same Bullet Train Project and held that it cannot be disputed that the Bullet Train Project is a very important national project. The Bullet Train Project is a fully foreign‑funded project, envisaged when the Japanese and Indian Governments entered into a Memorandum of Undertaking, pursuant to which it was agreed that the project would be fully funded by a concessional Official Development Assistance loan of Rs.1 lakh crore by the Japan International Cooperation Agency. The Supreme Court also noticed that before the loan agreement was entered into, a Memorandum of Understanding was executed between the Prime Ministers of Japan and India, which provided for the financing and operation of the project., The Supreme Court also considered the said Memorandum of Understanding and observed that the loan was on diplomatic consideration and was based on the Republic of India’s position in the community of nations, resulting in a huge loan with provisions of: (i) technology transfer which is unavailable in India; (ii) Indian human‑resource training and development by the Japan International Cooperation Agency and its consultant for operation of the project; and (iii) a provision to ‘Make in India’ the bullet train which would operate under the project. The Supreme Court further considered various other provisions of the Memorandum of Undertaking and the importance of the Bullet Train Project in its judgment., In paragraph 48 of the judgment, the Supreme Court held that even while entertaining a writ petition and/or granting a stay that may delay the execution of mega projects, it must be remembered that such interference may seriously impede the execution of projects of public importance and disable the State or its agencies from discharging constitutional and legal obligations towards citizens. High Courts should be extremely careful and circumspect in the exercise of their discretion while entertaining such petitions and/or granting stays, even where the High Court is of the prima facie opinion that the decision is perverse, arbitrary, mala fides or favouritism. The Supreme Court held that the High Court may put to the petitioner notice that, if the petitioner loses and there is a delay in execution of the project due to his proceedings, he may be saddled with damages caused by the delay, which may arise from frivolous litigation. The principles laid down by the Supreme Court in the case of National High Speed Rail Corporation Limited (supra) apply to the facts of this case., The Division Bench of the Bombay High Court in Writ Petition No. 442 of 2020 filed by the National High Speed Rail Corporation Limited, while dealing with the same Bullet Train Project, held that the project will cover a distance of 508.17 km within two and a half hours, instead of the present six and a half hours, and will be a convenient par excellence for rail passengers of the two cities and the two states. It is held that it would increase connectivity between the busy trade corridor of Ahmedabad and Mumbai, thereby increasing economic productivity, running on electricity which saves valuable cost on conventional fuel, and generating employment of about twenty thousand people in the construction phase, about four thousand people during operations and maintenance, and about sixteen thousand indirect jobs expected to be generated during the operations and maintenance phase. The Government would undertake to plant over 110,000 mangrove saplings between the piers to be installed in the mangrove area along with other safeguards as set out in the permissions and approvals., The Bombay High Court also held that the need for sustainable development, where the needs of development and economy on the one hand and protection and conservation of the environment on the other are balanced, would be satisfied. Accordingly, the Court held that the Bullet Train Project is in public interest, necessary for the public good and a project of bona fide public utility. The Court directed the authorities to permit the petitioner to execute the Mumbai‑Ahmedabad High Speed Rail project, including in the buffer zone, in view of the public importance of the project, subject to various conditions., A Division Bench of this Court comprising one of us (R.D. Dhanuka, J.) in the case of Gorakhnath Shankar Nakhwa & Ors. v. Municipal Commissioner of Municipal Corporation of Greater Mumbai & Ors. (supra) held that individual inconvenience alleged by the petitioners cannot prevail over the national interest; public interest prevails over private interest. The principles of law laid down by this Court in that judgment apply to the facts of this case. Be that as it may, Section 10A was introduced in the Fair Compensation Act in 2013. The petitioner has challenged the constitutional validity of Section 10A of the Fair Compensation Act in October 2022. In view of the delay and laches attributable to the petitioner, we are not inclined to exercise our discretionary power to entertain the challenge to the State Government’s power to insert and add Section 10A to the Fair Compensation Act., The Supreme Court of India in the case of Noida Industrial Development Authority v. Ravindra Kumar (supra), relied upon by the learned Additional Solicitor General while dealing with the order passed by the High Court and the acquisition proceedings, held that it is not necessary for the High Court to correct each and every illegality. If correction of illegality is likely to produce unjust results, the High Court would normally refuse to exercise its jurisdiction under Article 226 of the Constitution of India. While maintaining the acquisition proceedings, the High Court granted substantial relief to land owners by directing payment of compensation under the 2013 Act, which is higher than that payable under the 1894 Act. The Supreme Court held that this approach by the High Court cannot be faulted. In this case also, the petitioner would be entitled to apply for enhancement of compensation by invoking the provisions of the Fair Compensation Act. The principles of law laid down by the Supreme Court in the case of Noida Industrial Development Authority v. Ravindra Kumar (supra) apply to the facts of this case., We do not find any illegality in the award or in the decision taken by the appropriate Government in granting an extension to make an award by exercising powers under the first proviso to Section 25 of the Fair Compensation Act. Be that as it may, the petitioner has not made out a case for exercising discretionary powers under Article 226 of the Constitution of India in this case. Whether corrections in the impugned award were beyond the scope of powers prescribed under Section 33 of the Fair Compensation Act or not remains unanswered., It is the case of the petitioner that the Deputy Collector sought to correct purported clerical errors in the impugned award by amending the reference to the second extension notification published on 20 January 2022, to include a reference to an earlier notification dated 13 January 2022, and by altering the date for computing interest., We have perused Form VI prescribed under the Fair Compensation Act read with Rule 11, which indicates that the date of extension is not required to be mentioned in the award. Nevertheless, a perusal of the record shows that the date of one of the extensions was inadvertently omitted in the award. The correction to mention the corrected date under Section 33 of the Fair Compensation Act was therefore made. In the correction, the calculation of interest was not altered; there is no effect on the amount of interest. The authority only corrected the period, and no dispute on this point was raised by the petitioner in the writ petition., We have perused the averments made on page 116 of the writ petition, which indicate that the correction was done by Mr. Girase, Deputy Collector, and was approved by the Collector on page 915 of the pleadings filed by the respondents. The said corrections were within the powers prescribed under Section 33 of the Fair Compensation Act. Mr. Seervai, learned senior counsel for the petitioner, could not point out any prejudice caused to the petitioner because of such correction. Hence there is no substance in the averments made by the learned senior counsel for the petitioner., With respect to the judgment of the Supreme Court in the case of Jayalakshmi Coelho v. Oswald Joseph Coelho (supra), relied upon by the learned senior counsel for the petitioner, we are of the view that the judgment deals with powers under Section 152 of the Code of Civil Procedure, 1908, and does not advance the petitioner’s case. In the present matter, powers were exercised under the specific provision of the Fair Compensation Act, namely Section 33, which are not exercised beyond the circumstances provided under that provision., With respect to the judgment of the Karnataka High Court in the case of Gogga Sidramiah v. SLAO, Dharwad (supra), relied upon by the learned senior counsel for the petitioner, it is held that a matter requiring elaborate arguments or evidence on a question of fact or law for the discovery of such errors cannot be categorized as an error arising out of the award so as to invoke the provisions of Section 33 of the Fair Compensation Act. In this case, the errors corrected by the authority under Section 33 did not require elaborate arguments or evidence on a question of fact or law. The correction is permissible under Section 33, and the Karnataka High Court judgment therefore does not advance the petitioner’s case. Whether there is any perversity or absurdity in the impugned award remains unestablished., Learned senior counsel for the petitioner pointed out that during private negotiation, the District Level Committee under the chairmanship of the Mumbai Collector, Suburban District (Respondent No.5), fixed compensation for the subject plot at Rs.5,72,92,45,598, whereas the impugned award declared compensation of Rs.2,64,27,29,349 only. The two amounts were at different stages: (i) during private negotiation, which admittedly failed, and (ii) in the impugned award, based on evidence produced by the petitioner., The compensation derived at the stage of private negotiation cannot be considered final and binding since the negotiation failed and the amount was not accepted by the petitioner as conclusive. The petitioner therefore cannot rely upon the compensation discussed at that stage. The award cannot be considered perverse or absurd on this ground. Be that as it may, the petitioner could have applied for enhancement of the claim awarded by the authority by exercising rights under the Fair Compensation Act., The Bombay High Court in the case of Special Land Acquisition Officer, Mumbai v. Bhavsar Construction Co. Pvt. Ltd. (supra), relied upon by learned senior counsel for the respondents, held that the award is only an offer. Merely because the Land Acquisition Officer fixed a higher figure and the final award was passed at a lower figure, by itself, cannot be the basis to hold that claimants are entitled to a higher market value; that issue must be proved by evidence. The principles of law laid down in that judgment delivered by the learned Single Judge of this Court apply to the facts of this case, and we do not propose to take a different view., In the case of Mazdoor Kisan Shakti Sangathan v. Union of India & Anr. (supra), relied upon by the learned Additional Solicitor General, the Supreme Court held that situations may arise where two fundamental rights conflict. In such cases, the Court must examine where the larger public interest lies while balancing the conflicting rights. The paramount collective interest ultimately prevails. In the facts of this case, the private interest claimed by the petitioner does not prevail over the public interest which subserves an infrastructural project of public importance, a dream project of this country and the first of its kind. We are therefore not inclined to exercise discretionary powers under Article 226 of the Constitution of India in the facts of this case., In view of the foregoing reasons, the petition is devoid of any merits. We accordingly pass the following order: a. Writ Petition No. 3537 of 2019 stands dismissed. Rule is discharged. b. Interim Application No. 838 of 2022 is dismissed as not pressed. c. In view of the dismissal of Writ Petition No. 3537 of 2019, Interim Application Lodging No. 30586 of 2022 does not survive and is accordingly disposed of. d. No order as to costs. Parties are to act on the authenticated copy of this order., Mr. Seervai, learned senior counsel for the petitioner, seeks an order and direction against the respondents not to take possession of the writ property for a period of two weeks, which is vehemently opposed by Mr. Singh, learned Additional Solicitor General for respondents Nos.2 and 6, and Mr. Kumbhakoni, learned special counsel for respondents Nos.1, 3, 4 and 5., Since the ad‑interim relief was already rejected by this Court on 18 December 2019 by a reasoned order, we are not inclined to accept the request made by Mr. Seervai, learned senior counsel for the petitioner, for a stay even for a period of two weeks. Hence the application for stay is rejected.
|
id_1652
| 0
|
Through: Mr. Chander M. Lall, Senior Advocate with Mr. Ankur Sangal, Ms. Sucheta Roy, Mr. Raghu Vinayak Sinha, Mr. Shaurya Pandey and Ms. Yashi Aggarwal, Advocates versus Through: Mr. Pawan Bindra, Senior Advocate with Mr. Rahul Dhawan and Ms. Vaishali Singh, Advocates for Defendants 1 to 3. Mr. Sahil Solanki, Advocate for Defendant 4. The issue in controversy in this suit as well as other connected suits i.e. Civil Suit (Commercial) 811/2023, Civil Suit (Commercial) 812/2023 and Civil Suit (Commercial) 813/2023 is the same. The defendants in this suit are represented. Mr. Bindra, learned Senior Counsel appears for Defendants 1 to 3. Defendant 4 has been impleaded as ONE8 COMMUNE, Worldmark 2, 8, Aerocity, New Delhi 110037. Mr. Sibal, learned Senior Counsel for the plaintiff in Civil Suit (Commercial) 813/2023 submits that Defendant 4 was thus impleaded in view of the advertisement which figures at page 219 of the documents which reflected the mark ONE 8 COMMUNE, and purports to be owned by Defendant 1., Mr. Sahil Solanki, learned Counsel appears on behalf of Defendant 4 in this suit i.e. Civil Suit (Commercial) 814/2023 and submits that Defendant 4 is actually a cafe which operates under the name of ONE8 COMMUNE, but is owned by True Palate Cafe Private Limited. The learned Counsel for the plaintiff undertakes to file an amended memorandum of parties properly impleading Defendant 4., In all these matters, the grievance of the plaintiff is that song and other recordings, in which the plaintiff holds copyright, are being played in the outlets of the defendants without obtaining a license from the plaintiff. The documents evidencing the copyright held by the plaintiff in the said records have been placed on record., Mr. Sahil Solanki, learned Counsel for Defendant 4 in this suit undertakes that he would not play any of the copyrighted recordings forming the subject matter of the present suit, in which the plaintiff holds copyright, without obtaining a license from the plaintiff prior thereto. The statement is taken on record and they shall remain bound by the said statement., The plaintiff claims that the repertoire of the recordings in which the plaintiff holds copyright is available on its website https://. The plaint also provides the tariffs at which the plaintiff permits playing of the said recordings, dependent on the area over which recordings would be played. The tariffs read thus: Transnational Brands Stores Area Annual Fee per Outlet Up to 200 square feet 10,500 Rupees; 201 to 500 square feet 10,500 Rupees plus 21 Rupees per square foot per annum for every square foot more than 200 square feet; 501 to 1000 square feet 16,800 Rupees plus 17 Rupees per square foot per annum for every square foot more than 500 square feet; 1001 to 5000 square feet 25,300 Rupees plus 15 Rupees per square foot per annum for every square foot more than 1000 square feet; More than 5000 square feet 85,300 Rupees plus 13 Rupees per square foot per annum for every square foot more than 5000 square feet., The plaint avers that the plaintiff has addressed notices to the defendants, calling upon them to desist from playing the copyrighted recordings of the plaintiff without obtaining a license from the plaintiff. However, despite the notices, the defendants continued to play the copyrighted recordings. In some cases, these recordings have been played for merely two years as on date., In such circumstances, Mr. Sibal, learned Senior Counsel for the plaintiff in one of the connected suits i.e. Civil Suit (Commercial) 813/2023, submits that there would be no purpose in relegating the plaintiff to the exercise of pre‑institution mediation either., This is not a first instance when such a dispute has come up before the Delhi High Court, a batch of suits had earlier come up before this Bench. The said suits were taken up and the prayer for interim injunction was disposed of by order dated 20 October 2023, restraining the defendants from playing the copyrighted recordings of the plaintiff without obtaining a license from the plaintiff., The learned Senior Counsel for the plaintiff has pointed out that the Delhi High Court has already held in its judgment in Civil Suit (Commercial) 671/2021 (Phonographic Performance Limited v. Canvas Communication) that, before playing recordings in which the plaintiff holds copyright, any third party would necessarily have to obtain a license from the plaintiff and the requirement of the plaintiff being a copyright society would not apply in such case., The position in law is prima facie clear. The plaintiff being the owner of copyright in the recordings, which form part of its repertoire and which find place on the website https://, it would not be permissible to anyone to play the said recordings without obtaining a prior license from the plaintiff, especially where the recordings are being played for commercial benefit., In view thereof, let the plaint be registered as a suit. Issue summons in the suit. Summons are accepted on behalf of Defendants 1 to 3 by Ms. Vaishali Singh and on behalf of Defendant 4 by Mr. Sahil Solanki in this suit., Written statement, accompanied by affidavit of admission and denial of the documents filed by the plaintiff, be filed within 30 days with advance copy to learned Counsel for the plaintiff who may file replication thereto, accompanied by affidavit of admission and denial of the documents filed by the defendants within 30 days thereof., List before the learned Joint Registrar (Judicial) for completion of pleadings, admission and denial of documents and marking of exhibits on 15 January 2024, whereafter the matter would be placed before the Delhi High Court for case management hearing and further proceedings. Interim Application 2237 5/2023 (Order XXXIX Rules 1 and 2 of the Code of Civil Procedure)., Inasmuch as the allegations in this plaint are of violation of the plaintiff's copyright, by the exploitation, by the defendants, of recordings in which copyright is held by the plaintiff without obtaining a license in that regard, and as the exercise of such infringement in copyright has been continuing for some time, a clear prima facie case for grant of interlocutory injunction is made out. Failure to grant such injunction is bound to result in continued infringement of copyright. Accordingly, the principles of balance of convenience and irreparable loss would also justify grant of interim injunction as sought., As such, issue notice, returnable before the Delhi High Court on 7 February. Notice is accepted on behalf of Defendants 1 to 3 by Ms. Vaishali Singh and on behalf of Defendant 4 by Mr. Sahil Solanki., Till the next date of hearing, the defendants as well as all others acting on their behalf shall stand restrained from playing any of the recordings forming the subject matter of the plaintiff's copyright and featuring on the website https://, without obtaining a prior license from the plaintiff. Interim Application 223 76/2023 (Section 12A of the Commercial Courts Act, 2015)., The allegation against the defendants is of continued infringement of the plaintiff's copyright by exploiting recordings in which such copyright is held, without obtaining a license from the plaintiff. Unlike cases of infringement of trade mark, copyright held in music recordings is infringed by playing such recordings in closed spaces, so that it would not normally be possible for the plaintiff to acquire knowledge of such infringement, unless it is brought to its notice. Notably, in some cases, such infringement has continued for almost two years as on date., As such, relegating the plaintiff to the remedy of pre‑litigation mediation, in my view, would serve no purpose. Clearly, the plaintiff is entitled to urgent reliefs as sought in the plaints, in order to ensure that continued infringement of copyright does not take place. A clear case for exemption from pre‑litigation mediation under Section 12A of the Commercial Courts Act, 2015 is, therefore, made out., The application is allowed. Interim Application 223 77/2023 (Order XI Rule 1(4) of the Code of Civil Procedure)., This application seeks permission to file additional documents. The plaintiff is permitted to place additional documents on record in accordance with Order XI Rule 1(4) of the Code of Civil Procedure as amended by the Commercial Courts Act within four weeks from today., The application stands disposed of accordingly. Interim Application 223 78/2023 (Section 149 of the Code of Civil Procedure)., The plaintiff is permitted to make the deficient court fee, if any, good within two weeks from today., The application is allowed. Interim Application 223 79/2023 (Exemption)., Subject to the plaintiff filing legible copies of any dim or illegible documents within 30 days, exemption is granted for the present., The application is disposed of. Interim Application 223 80/2023 (Permission to file a compact disc or pen drive)., Permission to file compact disc or pen drive is granted, subject to providing a copy thereof to the opposite sides.
|
id_1653
| 0
|
WRIT PETITION Nos. 8223/2013, 3427/2015, 45742/2022, 23892, 24696, 25044, 25836, 26172, 27223, 27761 and 30952 of 2023 are being taken up and heard together and disposed of by this common order because the issues involved are intrinsically interconnected., The respondents have filed a consolidated counter affidavit in Writ Petition No. 46505 of 2022, and that petition is taken up as the leading case., Writ Petition No. 46505 of 2022 is filed under Article 226 of the Constitution of India, seeking a direction in the nature of a writ of mandamus directing the respondents to allow the petitioner to serve hookah in his establishment freely, provided he complies with the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade, Commerce, Supply and Distribution) Act, 2003 and its rules. The petitioner also requests that hookah be allowed in open areas and designated smoking zones, and that no coercive action of any nature be initiated against the petitioner or his establishment, Resign Sky Bar located in Madhapur., The petitioner has been operating the restaurant under the name Resign Sky Bar for many years and has obtained a trade licence from the Greater Hyderabad Municipal Corporation, Hyderabad. Earlier, owners of certain restaurants filed Writ Petition No. 3202 of 2014, and by a common order dated 27 January 2017 the High Court of Telangana allowed those petitioners to serve hookah provided they complied with conditions such as installation of CCTV cameras and prohibition of service to minors. Despite complying with the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade, Commerce, Supply and Distribution) Act, 2003 (hereinafter referred to as the COTP Act), the task‑force police under the control of respondent No. 2 have been visiting the premises and filing false cases with a malafide intention to force closure of hookah sales. The restaurant owners subsequently filed Writ Petitions No. 22060 and 23213 of 2017, and by a common order dated 2 August 2017 the High Court of Telangana disposed of those petitions, ordering that the owners may continue to run their restaurants in accordance with the rules and that any police action may be challenged before the Director General of Police or the Commissioner of Police. Nevertheless, the police have continued to raid the hookah centres and register false cases under Sections 188, 270, 272 and 328 of the Indian Penal Code. Such sections cannot be invoked against restaurant owners who serve hookah to their customers, and there is no general ban on selling tobacco and tobacco products. The owners also filed Criminal Petition No. 5619 of 2020, seeking to quash proceedings in the related criminal, calendar and sessions cases registered under Sections 188, 269, 270, 272, 273, 328, 336 and 420 read with Sections 34, 149 and 511 of the Indian Penal Code; Sections 3(m), 20(2), 21(1), 21(2), 22, 7(3) and 7(5) of the COTP Act, 2003; and Sections 58 and 59(i) of the Food Safety and Standards Act, 2006. By a common order dated 10 June 2022, the High Court of Telangana allowed the criminal petitions and quashed the proceedings in accordance with the common order dated 5 July 2021 passed in Mohd. Jameel Ahmed v. State of Telangana. Since the COTP Act does not prohibit serving hookah, the police interference amounts to a violation of the rights guaranteed under Article 19(1)(g) of the Constitution of India and the provisions of the COTP Act., The respondents Nos. 1 to 5 filed a consolidated counter affidavit in Writ Petition No. 46505 of 2022, stating that the petitioners seek a direction to permit operation of hookah parlours and serving of hookah in restaurants beyond the areas designated by the statute, and that details of the hookah centres are conspicuously missing. The affidavit points out that the petitioners have not mentioned compliance with the various statutory provisions of the COTP Act and merely aver that they serve hookah. It further observes that no statute or regulation specifically refers to hookah parlours or bars. The respondents refer to Article 21 of the Constitution of India, noting that the government has a responsibility to protect children and provide a healthy environment. They also cite the World Health Organization Framework Convention on Tobacco Control and its MPOWER measures as the basis for tobacco‑control policies. The affidavit describes hookah as a water pipe used to smoke specially prepared tobacco in various flavours, typically smoked in groups with a shared mouthpiece. It notes that hookah smoke delivers nicotine and toxic compounds comparable to cigarette smoke, and that a one‑hour hookah session can involve inhaling 100–200 times the volume of smoke from a single cigarette, exposing users to risks of oral, lung, stomach, and esophageal cancers, reduced lung function, and decreased fertility. The charcoal used to heat the tobacco adds further health risks, and even after passing through water the smoke contains high levels of carbon monoxide, heavy metals and carcinogenic chemicals., The learned counsel for both sides were heard and the record was perused., The petitioner's counsel submitted that the police are frequently interfering with the petitioner’s business of serving hookah in the designated smoking area of the restaurant and preventing the petitioner from carrying on trade. He argued that the police request to stop offering hookah, without any material showing violation of the guidelines prescribed by the Supreme Court in Narinder S. Chadha v. Municipal Corporation of Greater Mumbai and the COTP Act, amounts to infringement of fundamental rights and is illegal and improper. Continuous interference is causing irreparable damage and harassment to the petitioner and to the reputation of the business. The counsel cited a series of cases in which the High Court of Telangana has held that police, under the guise of implementing regulations, shall not cause inconvenience or harassment to customers or owners when the business is lawful. He affirmed that the petitioner holds all required licences such as GST, sales tax, food, trade and labour licences and has paid advance tax. He further submitted that the respondents have no power to interfere with the petitioner’s business as long as he follows the guidelines issued by the Supreme Court in Narinder S. Chadha’s case and the provisions of the COTP Act. Accordingly, the counsel prayed that the writ petitions be allowed as prayed for., The Special Government Pleader for Home, appearing for the respondents, relied upon Sections 4, 5, 6, 7, 8, 9, 10, 11, 13, 15, 17 and 18 of the COTP Act, 2003. He explained that the Act not only incorporates the Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975 but also covers all other forms of tobacco products, both smoking and smokeless, and provides for a nationwide public‑smoking ban with designated non‑smoking zones, a ban on tobacco advertising and sponsorship, a ban on sale to minors and within a radius of 100 yards of any educational institution, and mandatory pictorial health‑warning labels occupying at least 40 % of the principal display area. He noted that from 2 October 2012 the government began screening two anti‑tobacco advertisements in movie theatres and television, and that nicotine and tar contents must be displayed on packs, with limits prescribed by the rules. He further cited Rule 4 of the Prohibition of Smoking in Public Places Rules, 2008, which requires owners of hotels with thirty or more rooms or restaurants with a seating capacity of thirty or more to provide a designated smoking area, and that no smoking‑aid devices such as ashtrays, lighters or matches may be provided in any public place. He argued that the trade licences obtained from the Greater Hyderabad Municipal Corporation do not disclose any declaration that the premises are intended for hookah centres. He relied upon Section 521 of the Greater Hyderabad Municipal Corporation Act, which prohibits keeping for sale or other than domestic use any article listed in Part III of Schedule P, including charcoal used for hookah, citing fire‑risk and nuisance concerns. He contended that earlier batch decisions do not specifically restrain police powers, and that the police, under the Hyderabad City Police Act, 1345 Fasli, have authority to inspect any public place for offences such as indecent exposure, possession of prohibited articles, nuisance, etc. He further submitted that the police may inspect, seize and seal the petitioner’s establishment if any violation is found under Section 12 of the COTP Act, and that the earlier judgments do not provide blanket protection to hookah centres. Consequently, he prayed for dismissal of the writ petitions., Relevant provisions of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade, Commerce, Supply and Distribution) Act, 2003 are extracted below.\n\n3. Definitions. In this Act, unless the context otherwise requires: (a) “advertisement” includes any visible representation by way of notice, circular, label, wrapper or other document and also any oral announcement or any means of producing or transmitting light, sound, smoke or gas; (b) “cigarette” includes (i) any roll of tobacco wrapped in paper or any other substance not containing tobacco, and (ii) any roll of tobacco wrapped in any substance containing tobacco which, by its appearance, type of filter or packaging, is likely to be offered to or purchased by consumers as a cigarette, but does not include beedi, cheroot or cigar; (c) “distribution” includes distribution by way of samples, whether free or otherwise; (d) “export” means taking out of India to a place outside India; (e) “foreign language” means a language which is neither an Indian language nor the English language; (f) “import” means bringing into India from a place outside India; (g) “Indian language” means a language specified in the Eighth Schedule to the Constitution and includes any dialect of such language; (h) “label” means any written, marked, stamped, printed or graphic matter affixed to or appearing upon any package; (i) “package” includes a wrapper, box, carton, tin or other container; (j) “prescribed” means prescribed by rules made under this Act; (k) “production” includes the making of cigarettes, cigars, cheroots, beedis, cigarette tobacco, pipe tobacco, hookah tobacco, chewing tobacco, pan masala or any chewing material having tobacco as one of its ingredients (by whatever name called) or snuff, and shall include (i) packing, labelling or re‑labelling of containers; (ii) repacking from bulk packages to retail packages; and (iii) any other method to render the tobacco product marketable; (l) “public place” means any place to which the public have access, whether as of right or not, and includes auditoriums, hospital buildings, railway waiting rooms, amusement centres, restaurants, public offices, court buildings, educational institutions, libraries, public conveyances and the like, but does not include any open space; (m) “sale” means any transfer of property in goods by one person to another, whether for cash or on credit, or by way of exchange, and includes wholesale or retail, and includes an agreement for sale, offer for sale and exposure for sale; (n) “smoking” means smoking of tobacco in any form whether in the form of cigarette, cigar, beedi or otherwise with the aid of a pipe, wrapper or any other instrument; (o) “specified warning” means such warnings against the use of cigarettes or other tobacco products to be printed, painted or inscribed on packages of cigarettes or other tobacco products in such form and manner as may be prescribed by rules made under this Act; (p) “tobacco products” means the products specified in the Schedule.\n\n4. Prohibition of smoking in a public place. No person shall smoke in any public place, provided that in a hotel having thirty rooms or a restaurant having a seating capacity of thirty persons or more, and in airports, a separate provision for a smoking area or space may be made.\n\n5. Prohibition of advertisement of cigarettes and other tobacco products. (1) No person engaged in, or purporting to be engaged in, the production, supply or distribution of cigarettes or any other tobacco products shall advertise, and no person having control over a medium shall cause cigarettes or any other tobacco products to be advertised through that medium, nor shall any person take part in any advertisement which directly or indirectly suggests or promotes the use or consumption of cigarettes or any other tobacco products. (2) No person, for any direct or indirect pecuniary benefit, shall (a) display or cause to display any advertisement of cigarettes or any other tobacco product; (b) sell or cause to sell a film or video tape containing advertisement of cigarettes or any other tobacco product; (c) distribute or cause to distribute to the public any leaflet, hand‑bill or document which contains an advertisement of cigarettes or any other tobacco product; or (d) erect, exhibit, fix or retain upon any land, building, wall, hoarding, frame, post or structure, or upon any vehicle, any advertisement of cigarettes or any other tobacco product, provided that this sub‑section shall not apply to an advertisement on a package containing cigarettes or any other tobacco product, or to an advertisement displayed at the entrance or inside a warehouse or shop where cigarettes and other tobacco products are offered for distribution or sale. (3) No person shall, under a contract or otherwise, promote or agree to promote the use or consumption of cigarettes or any other tobacco product, or any trademark or brand name thereof, in exchange for sponsorship, gift, prize or scholarship., 6. Prohibition on sale of cigarettes or other tobacco products to a person below the age of eighteen years and in a particular area. No person shall sell, offer for sale or permit sale of cigarettes or any other tobacco product (a) to any person who is under eighteen years of age, and (b) in an area within a radius of one hundred yards of any educational institution.\n\n7. Restrictions on trade and commerce in, and production, supply and distribution of cigarettes and other tobacco products. (1) No person shall, directly or indirectly, produce, supply or distribute cigarettes or any other tobacco products unless every package produced, supplied or distributed bears on its label the specified warning including a pictorial warning as may be prescribed. (2) No person shall carry on trade or commerce in cigarettes or any other tobacco products unless every package sold, supplied or distributed bears on its label the specified warning. (3) No person shall import cigarettes or any other tobacco products for distribution or sale in India unless every imported package bears on its label the specified warning. (4) The specified warning shall appear on not less than one of the largest panels of the package. (5) No person shall, directly or indirectly, produce, supply or distribute cigarettes or any other tobacco products unless every package indicates on its label the nicotine and tar contents and the maximum permissible limits, which shall not be exceeded as prescribed by rules made under this Act., 11. Testing laboratory for nicotine and tar contents. For the purpose of testing nicotine and tar contents in cigarettes and any other tobacco products, the Central Government shall, by notification in the Official Gazette, grant recognition to such testing laboratories as it may deem necessary.\n\n12. Power of entry and search. (1) Any police officer not below the rank of Sub‑Inspector, or any officer of the State Food or Drug Administration or any other officer of equivalent rank authorised by the Central or State Government, may, if he has reason to suspect that any provision of this Act has been or is being contravened, enter and search at any reasonable time any factory, building, business premises or any other place where trade or commerce in cigarettes or other tobacco products is carried on, or where any advertisement of such products has been made. (2) The provisions of the Code of Criminal Procedure, 1973 shall apply to every search and seizure made under this Act.\n\n13. Power to seize. (1) If any authorised officer has reason to believe that any package of cigarettes or other tobacco products, or any advertisement material, is in contravention of this Act, he may seize such package or material in the manner prescribed. (2) No seized package or advertisement material shall be retained by the officer for more than ninety days from the date of seizure unless approval of the District Judge within whose jurisdiction the seizure was made is obtained.\n\n14. Confiscation of package. Any package of cigarettes or other tobacco products or any advertisement material in contravention of this Act shall be liable to be confiscated. However, if the court is satisfied that the person in possession is not responsible for the contravention, the court may make any other order authorised by this Act against the guilty person.\n\n16. Confiscation shall not interfere with other punishments. No confiscation or costs ordered under this Act shall prevent the infliction of any punishment to which the person is liable under this Act or any other law.\n\n20. Punishment for failure to give specified warning and nicotine and tar contents. (1) Any person who produces or manufactures cigarettes or tobacco products without the specified warning and nicotine and tar contents on the package or label shall, on first conviction, be punishable with imprisonment up to two years, or fine up to five thousand rupees, or both; and on second or subsequent conviction, imprisonment up to five years and fine up to ten thousand rupees. (2) Any person who sells or distributes cigarettes or tobacco products without the specified warning and nicotine and tar contents shall, on first conviction, be punishable with imprisonment up to one year, or fine up to one thousand rupees, or both; and on second or subsequent conviction, imprisonment up to two years and fine up to three thousand rupees.\n\n21. Punishment for smoking in certain places. (1) Whoever contravenes the provisions of Section 4 shall be punishable with a fine up to two hundred rupees. (2) The offence is compoundable and shall be tried summarily as per the procedure for summary trials in the Code of Criminal Procedure, 1973., On earlier occasions, identical issues arose before the High Court of Telangana in Writ Petition No. 3202 of 2014 and batch, Writ Petition No. 14093 of 2011, Writ Petition No. 4942 of 2012, and Writ Petitions No. 22060 of 2017 and 23213 of 2017., In Writ Petition No. 3202 of 2014 and batch, the High Court of Telangana dealt with a similar situation where police interfered with the business activities of the petitioners in serving flavoured hookah in their coffee shops. The Court held that Section 12 of the COTP Act confers powers to police not below the rank of Sub‑Inspector of Police or any officer of the State Food or Drug Administration, authorised by the Central or State Government, to enter and search any factory, building, business premises or other place if there is reason to suspect contravention of the Act. In view of this provision and Section 149 of the Code of Criminal Procedure, the contention that police actions amount to infringement of fundamental rights and that only the Greater Hyderabad Municipal Corporation is competent to interfere with the petitioners’ business does not have any force. Accordingly, the High Court of Telangana is of the view that under Section 12 of the Act and Section 149 of the Code of Criminal Procedure, the police and other authorities authorised by both Central and State Governments have ample powers to inspect the business premises of the petitioners.
|
id_1653
| 1
|
In this regard, the learned counsel for the petitioners has failed to place any such authority, under which the Greater Hyderabad Municipal Corporation is only competent to inspect the business of the petitioners in serving hookah., In view of the foregoing discussion, the High Court of Telangana is of the view that the action of the respondents police is in accordance with law and any interference by the High Court of Telangana with the powers of the police in this regard by exercising the powers under Section 226 of the Constitution of India is not warranted., Further, the Director General of Police, Telangana State, is directed to take appropriate action against the officers for their inaction in respect of the restaurants being used as hookah centres and also to take action against the high‑handed acts of the officers who interfered with the restaurants, which are being run without there being any violations., In Writ Petition No.14093 of 2011, a learned Single Judge of the High Court of Telangana referring to the order passed in Writ Petition No.3202 of 2014 and the judgment of the Supreme Court of India in Narinder S. Chadha and others v. Municipal Corporation of Greater Mumbai (supra) held as follows: The facts in Writ Petition No.3202 of 2014 and batch are the same and similar to the facts asserted in the instant writ petition. Further, as rightly pointed out by the respondents there cannot and ought not to be a blanket direction against the respondents for such direction virtually prevents the police from even knowing or investigating what is actually happening in the name of flavoured hookahs. The decision of the Supreme Court of India is distinguishable to the fact situation of this case, for a circular was challenged in the reported case and the legality of the circular was considered and decided. Whereas in the case on hand the prayer and the cause of action are on alleged interference by police against flavoured hookah serving and no written order or proceeding is placed on record to examine the legality of such order or proceeding. Therefore, having regard to the view taken in the common order dated 27‑01‑2017 in Writ Petition No.3202 of 2014 and batch, I am satisfied that the instant writ petition can be dismissed by adopting the same reasons., In Writ Petitions Nos.22060 of 2017 and 23213 of 2017, a learned Single Judge of the High Court of Telangana vide order dated 02.08.2017 observed as follows: The two judgments referred to above dealt with a situation where the interference of the police in the business of the petitioners in serving flavoured hookah was in challenge. The situation on hand now is totally different and still varies in view of the notification dated 23.05.2017 which prohibited service in a smoking area or space provided for smoking. Admittedly, hookah is a product which contains tobacco and when any product contains tobacco, the same has to be puffed in a non‑smoking zone. In view of the circular issued by the Government, service of hookah even in the non‑smoking zone would be impermissible. It is to be noted here that the above‑said provision will apply if the hotel/restaurant has 30 rooms and the coffee shop has a seating capacity of 30 persons or more, which does not mean that hookah can be freely supplied in a restaurant where seating capacity is less than 30 or a hotel where there are fewer rooms., As per Section 4 of the Prohibition of Smoking in Public Places Act, if the restaurant has a seating capacity of 30 persons or more, a separate provision for a smoking area has to be provided. The word hookah has not been defined in the Prohibition of Smoking in Public Places Act. Section 3(k) of the Prohibition of Smoking in Public Places Act defines \production\. A reading of the said provision shows that the word production includes making of cigarettes, cigars, cheroots, beedis, cigarette tobacco, pipe tobacco, hookah tobacco, chewing tobacco, pan masala or any chewing material having tobacco as one of its ingredients (by whatever name called) or snuff. Therefore, it implies that all the tobacco products which are taken with the aid of pipe, wrapper or any other instrument fall within the definition of Section 3(n) of the Prohibition of Smoking in Public Places Act. If the restaurant or coffee shop falls within the ambit of Section 4 of the Prohibition of Smoking in Public Places Act, it has to provide a separate smoking zone. The Government of India issued a notification in May 2017 which clearly indicates that no service shall be allowed in a smoking area or in the space provided for smoking. Therefore, the restaurant owners shall not involve themselves in the act of service to their customers in the prohibited area. Section 12 of the Act confers powers to a police officer not below the rank of Sub‑Inspector of Police or any officer authorized by the Central Government or State Government to search the premises at any reasonable time, if he suspects that the provisions of the Act are contravened, namely that cigarettes or any other tobacco products are produced, supplied or distributed or that any advertisement of the cigarettes or any other tobacco products is being made. While affecting a search and seizure, Section 12 of the Act clearly says that the provisions of the Criminal Procedure Code have to be followed., Having regard to the above, and taking into consideration the consistent view taken by the High Court of Telangana in the aforesaid writ petitions, the High Court of Telangana does not find any illegality in police officers entering the premises and searching the same, so as to find out whether the owners of the restaurants have contravened or violated any of the provisions of the Prohibition of Smoking in Public Places Act and the Rules made thereunder., It is useful to refer and extract Article 47 of the Constitution of India, which reads as follows: 47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health. The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health., This constitutional provision specifically deals with improvement of public health as a primary duty of the State. The Court should enforce this duty against a defaulting local authority. Any article which is hazardous or injurious to public health is a potential danger to the fundamental right to life guaranteed to the citizens under Article 21 read with Article 47, and a paramount duty is cast on the States and its authorities to achieve an appropriate level of protection to human life and health. Further, restrictions imposed by law for supply and serving of tobacco products including serving hookah cannot be said to be violative of Article 19(1)(g). Having regard to the principles contained in Article 47 of the Constitution, the State or its authorities have the right to regulate the sale of tobacco product which includes running of hookah centres. While granting licence to run the restaurants, the State or its authorities must resort to strict scrutiny of the applications. For the purpose of grant of licence, the law as contained in the rules did not contain any provision for relaxing any condition. In Vincent Panikurlangara v. Union of India the Hon'ble Supreme Court observed that maintenance and improvement of public health have to rank high as these are indispensable to the very physical existence of the community and on the betterment of these depends the building of the society envisaged by the Constitution makers. Attending to public health is of high priority., Section 4 of the Prohibition of Smoking in Public Places Act defines prohibition of smoking in a public place. It states that no person shall smoke in any public place, provided that in a hotel having thirty rooms or a restaurant having a seating capacity of thirty persons or more and in the airports, a separate provision for a smoking area or space may be made. Admittedly, the petitioners in all these cases have obtained licence to run the hotels/restaurants. Section 6 of the Act prohibits sale of cigarettes or other tobacco products to a person below the age of eighteen years and in an area within a radius of one hundred yards of any educational institution. A conjoint reading of Section 6 read with Section 4 of the Prohibition of Smoking in Public Places Act clearly indicates that smoking of tobacco in any form is prohibited in public places like hotels, restaurants and airports. Rule 4(3) of the Prohibition of Smoking in Public Places Rules, 2008 provides that a smoking area or space shall be used only for the purpose of smoking and no other services shall be allowed. A careful reading of the above provisions indicates that hotels and restaurants where food is normally supplied are prohibited from smoking any tobacco product unless a separate area is made to allow smoking. Therefore, the contention of the petitioners that the licence obtained by them to run the hotels/restaurants also allows them to have smoking of hookah and run hookah centres is not tenable., The petitioners having obtained licence to run hotels/restaurants have to comply with the conditions imposed by the Municipal Corporation, whereas Section 4 of the Prohibition of Smoking in Public Places Act prohibits smoking in a public place. Therefore, the conditions imposed by the Municipal Corporation for granting a trade licence to run hotels/restaurants vary from the conditions incorporated under the provisions of the Prohibition of Smoking in Public Places Act. The licence obtained for running restaurants which have a seating capacity of thirty persons or more does not confer any right to the petitioners to convert the same into a smoking area or to run a hookah centre., Admittedly, in the present cases the petitioners have obtained licences to run hotels/restaurants/bars and without specifying any area as a smoking zone as per the provisions of the Prohibition of Smoking in Public Places Act and the Rules made thereunder, they are not entitled to run the hotels/restaurants as hookah centres., The Hon'ble Supreme Court in Narinder S. Chadha v. Municipal Corporation of Greater Mumbai, while dealing with Condition 35(C) of the circular issued by the Bombay Municipal Corporation, observed as follows: It will be seen that Condition 35(C) of the impugned circular essentially reproduces Rule 4(3) of the said Rules and then adds the words \or any apparatus designed to facilitate smoking\. The effect of the added words is that a hookah cannot be provided by the hotel, restaurant or airport as it is an apparatus designed to facilitate smoking., We find it difficult to accept this contention because, if carefully read, Rule 3 deals with the prohibition of smoking in public places, which is referable to Section 4 (main part), whereas Rule 4 is referable to the proviso to Section 4. Rule 3 would only apply where there is a total prohibition of smoking in all public places, as is clear from Rule 3(1)(a) which makes it incumbent on the owner, proprietor, etc., of a public place to ensure that no person smokes in that place. It is in that context that ashtrays, matches, lighters and other things designed to facilitate smoking are not to be provided in public places where smoking is prohibited altogether., As per Section 3(l) of the Prohibition of Smoking in Public Places Act, \public place\ means any place to which the public have access, whether as of right or not, and includes auditorium, hospital buildings, railway waiting rooms, amusement centres, restaurants, public offices, court buildings, educational institutions, libraries, public conveyances and the like which are visited by the general public but does not include any open space. As per Section 3(g) of the Hyderabad City Police Act, 1348 Fasli (for short City Police Act), \public place of amusement\ means every place or house or tent or enclosure or booth or any other building whether permanent or temporary where singing, music, dancing or any diversion or game and anything giving amusement or the means of carrying on the same is provided and to which the public are admitted either on payment of money or with the intention that money may be collected from them on admission, and shall include the race‑course, circus, theatre, music and dancing hall, billiard room, gymnasium or any other place allotted for such purposes. As per Section 3(h) of the City Police Act, \public place of entertainment\ means any enclosed or open place to which the public have access and where any kind of articles of food and drink are supplied for consumption by any person or for the profit of any person owning or having any interest in or managing such place and shall include a refreshment room, tea house, liquor house, boarding house, lodging house, hotel, tavern or sendhi, wine, ganja, toddy, bhung or opium shops. As per Section 3(j) of the City Police Act, \public place\ also includes the place within the premises or enclosure of any public building or monument and all places to which the public have access for drawing water, washing or bathing or for the purpose of recreation., It is pertinent to state that public place as defined under Section 3(l) of the Prohibition of Smoking in Public Places Act includes amusement centres, and the same is defined in public place of amusement under Section 3(g) of the City Police Act. As per Chapter III of the City Police Act, the Commissioner of Police has the power to issue rules and regulations for preservation of order. Further, as per Section 32 of the City Police Act, for enforcement of orders under Sections 22, 23 and 24 of the City Police Act, the police officer may arrest any person without warrant. As per Section 84 of the City Police Act, police have the power to specify conditions for obtaining licences and permits. Since the City Police Act confers power over the amusement centres/restaurants, which are defined as public places under the Prohibition of Smoking in Public Places Act, and as per Rule 4 of the Prohibition of Smoking in Public Places Rules, 2008 permission is required specifying a smoking area. In view of the powers conferred on the Commissioner of Police under the City Police Act, the police have the power to supervise the business establishments of the petitioners and seize the hookah centres if there is any violation of the provisions of the Prohibition of Smoking in Public Places Act. Therefore, to establish hookah centres, permission from the concerned authority has to be obtained under the provisions of the City Police Act. The petitioners shall follow rules and regulations issued by the Commissioner of Police from time to time for preservation of public order., In view of the above discussion, the High Court of Telangana is of the opinion that imposing certain conditions to run the hookah centres would meet the ends of justice. (i) As charcoal is being used for serving hookah in the hookah centres, the petitioners shall obtain licence from the Municipal Corporation as specified under Section 521(1)(b) of the Greater Hyderabad Municipal Corporation Act, 1955. (ii) Since the Hyderabad City Police Act, 1348 Fasli confers power over the amusement centres/restaurants which are defined as public places under the Prohibition of Smoking in Public Places Act and as per Rule 4 of the Prohibition of Smoking in Public Places Rules, 2008 permission is required specifying a smoking area, the petitioners shall obtain necessary permission from the concerned authority under the provisions of the City Police Act. (iii) The hookah centres are prohibited from serving any tobacco product to persons below the age of eighteen years; pictorial health‑warning labels at the entrance must be displayed. (iv) The respondent police are at liberty to supervise and inspect the hookah centres for any violation of rules, regulations, guidelines or circulars issued under the provisions of the Hyderabad City Police Act, 1348 Fasli. (v) If there is any violation of the provisions of the Prohibition of Smoking in Public Places Act and the Rules made thereunder, the respondent police are at liberty to take appropriate action as per the provisions of the law., Subject to fulfilling the above conditions and also the provisions of the Prohibition of Smoking in Public Places Act, the respondent police are directed not to interfere with the business activity of the petitioners for running hookah centres. If the police are found to act in a high‑handed manner, the owners of the hookah centres are at liberty to bring the same to the notice of the Director General of Police/Commissioner of Police, as directed by the High Court of Telangana in Writ Petition No.3202 of 2014 and related cases, in which event the said authority shall forthwith take necessary steps in that regard., Accordingly, all these writ petitions are disposed of. Miscellaneous petitions, if any, pending in these writ petitions shall stand closed. No order as to costs.
|
id_1654
| 0
|
Between: Sandrapati Vijaya Kumar, Petitioner, and the State of Andhra Pradesh, represented by its Principal Secretary, Social Welfare Department and Tribal Welfare Department, A.P. Secretariat, Guntur, and another Respondent. Between: Asuri Srinivasa Rao, Petitioner, and the Government of Andhra Pradesh, represented by its Secretary, Andhra Pradesh Public Service Commission, Vijayawada, Krishna District, and another Respondent., Whether reporters of local newspapers may be allowed to see the judgments? Yes/No. Whether the copies of judgment may be marked to law reporters/journals? Yes/No. Whether Your Lordships wish to see the fair copy of the judgment? Yes/No., Counsel for the petitioner in Writ Petition No. 35726 of 2018: Sri N. Ravi Prasad. Counsel for the petitioner in Writ Petition No. 37037 of 2018: Sri S. Satyanarayana Rao. Counsel for the first respondent: Smt Sumathi, Government Pleader for Services I in Writ Petition No. 35726 of 2018. Counsel for the second respondent: Sri T. Balakrishna, Standing Counsel for Andhra Pradesh Public Service Commission in Writ Petition No. 35726 of 2018., Head Note: Cases Referred: 1992 Supp (3) SCC 217. COMMON JUDGMENT (per Honorable Justice Ravi Nath Tilhari)., Heard Sri N. Ravi Prasad, learned counsel for the petitioner in Writ Petition No. 35726 of 2018, and Sri S. Satyanarayana Rao, learned counsel for the petitioner in Writ Petition No. 37037 of 2018. Smt Sumathi, learned Government Pleader for Social Welfare Department, and Sri T. Balakrishna, learned Standing Counsel for Andhra Pradesh Public Service Commission, appeared in both writ petitions., In Writ Petition No. 35726 of 2018 the memo of proof of service on the unofficial respondents 4 to 9 open competition category, selected candidates, securing lesser marks than the petitioners, was filed. But there is no representation for those respondents., Both writ petitions involve a common question of law and are being decided by a common judgment., The Andhra Pradesh Public Service Commission issued Notification No. 55/2011 dated 28 December 2011 to fill 57 posts of Hostel Welfare Officer, Grade II (Group IV) in the Social Welfare and Tribal Welfare Department in Krishna District., Three posts out of 57 were reserved for Scheduled Caste candidates. The petitioner Sandrapati Vijaya Kumar applied and secured 203 marks (46th rank). He appeared for verification of the original documents on 19 June 2013, but his name did not appear in the final selection list., One candidate in the Reserved Category, N. Chandra Mohan (Scheduled Caste), secured 216 marks (12th rank). The last selected candidate in the Open Competition category, G. Pulla Reddy, secured 211 marks (21st rank)., The petitioner stood at Serial No. 4 in the merit of Scheduled Caste candidates. The other two Scheduled Caste posts were filled by E. Maheswar Rao securing 210 marks (25th rank) and G. Abbulu securing 204 marks (44th rank)., The petitioner submitted that N. Chandra Mohan (Scheduled Caste) on his merit should have been selected and shifted to a post in Open Competition. The petitioner then would have been selected based on his marks in the Scheduled Caste category., The petitioner filed Original Application No. 106 of 2016 which was dismissed by the Andhra Pradesh Administrative Tribunal at Hyderabad on 20 September 2018., The petitioner has filed Writ Petition No. 35726 of 2018 praying for an appropriate writ order or direction, more particularly one in the nature of a writ of certiorari, calling for records in Original Application No. 106 of 2016 and declaring the same illegal, arbitrary and unconstitutional, and consequently setting aside the order passed by the Andhra Pradesh Administrative Tribunal in Original Application No. 106 of 2016 dated 10 September 2018, and directing respondents 1 to 3 to select the petitioner in the post of Hostel Welfare Officer Grade II in the Scheduled Caste category as per Notification No. 55/2011 dated 28 December 2011, and to pass such other orders., Pursuant to the same notification, the petitioner in Writ Petition No. 37037 of 2018, Asuri Srinivasa Rao, applied under the reserved category of Backward Class – D. Out of 57 posts, three were reserved for Backward Class – D. The petitioner secured 201 marks and was at Serial No. 4 of the merit of Backward Class – D., In this reserved category one candidate, Gollapally Srinivasa Rao (Backward Class – D), secured 216 marks (13th rank). The last selected candidate in Open Competition, G. Pulla Reddy, secured 211 marks., The other two Backward Class – D selected candidates are N. S. Nagaraju (204 marks, 43rd rank) and K. V. Gopi Krishna (202 marks, 49th rank)., The petitioner submitted that if G. Srinivasa Rao (Backward Class – D) had been selected as per his merit in Open Competition, then this petitioner would have been selected against the third post reserved for Backward Class – D., The petitioner submitted that eight vacancies occurred due to non‑joining of the selected candidates., The petitioner initially filed Original Application No. 7282 of 2013 which was disposed of by order dated 18 November 2016 by the Tribunal with direction to the authorities to consider the petitioner’s case. However, this was set aside in Writ Petition No. 4097 of 2017 filed by the Andhra Pradesh Public Service Commission, vide order dated 15 February 2017, and the matter was remitted to the Tribunal for fresh consideration on merits. Thereafter, Original Application No. 7282 of 2013 was dismissed by the Tribunal vide order dated 10 September 2018., The petitioner has filed Writ Petition No. 37037 of 2018 praying for a writ order or direction, more particularly one in the nature of a writ of certiorari, calling for the records on the file of the Andhra Pradesh Administrative Tribunal Hyderabad in Original Application No. 7282 of 2013 dated 10 September 2018 and quashing or setting aside the same, further declaring the entire procedure adopted by the respondents in the matter of selecting the candidates in furtherance of Recruitment Notification No. 55/2011 dated 28 December 2011 for the post of Hostel Welfare Officer Grade II illegal, arbitrary, unjust, improper, unconstitutional, and consequently directing the respondents to consider and appoint the petitioner as Hostel Welfare Officer Grade II in pursuance of Notification No. 55/2011 dated 28 December 2011 against the Backward Class – D roster point with all consequential benefits such as seniority and other allied benefits from the day on which other candidates were selected/appointed, and to pass such other orders., Sri N. Ravi Prasad and Sri S. Satyanarayana Rao, learned counsels for the petitioners in both writ petitions, submitted that the candidates of the reserved categories, Scheduled Caste and Backward Class – D, who obtained the highest marks of 216 in their respective reserved categories, on the basis of their merit, deserved to be placed in Open Competition, as the last selected candidate in the Open/General category obtained only 211 marks. If that had been done the petitioners would have been selected in their respective reserved categories. The respondents did not follow the settled principle of law that reserved category candidates on the basis of merit, competing with the Open Competition candidate, are to be shifted to the Open Competition seats. Consequently, the action of the respondents as well as the judgments of the Tribunal are legally unsustainable., The petitioners placed reliance on Pradeep Singh Dehal v. State of Himachal Pradesh & Others, Saurav Yadav and others v. State of Uttar Pradesh and others, and Bharat Sanchar Nigam Limited v. Sandeep Choudhary and another., The learned counsels further submitted that the Andhra Pradesh Public Employment (Organization of Local Cadres and Regulation of Direct Recruitment) Order, 1975 (the Presidential Order) provides that eighty percent of the posts for direct recruitment as notified shall be filled by local candidates. They submitted that shifting the meritorious selected candidates in the Scheduled Caste and Backward Class – D categories to Open Competition on their own merit would not violate the Presidential Order as all those candidates are local candidates., Smt Sumathi, learned Government Pleader for Services I, submitted that paragraph 8 of the Presidential Order provides for eighty percent of posts to be filled by local candidates. She submitted that Government Memo No. 29978/PE‑Ser‑II/2012 dated 20 December 2012 clarified that in making the direct recruitment, eighty percent as prescribed in the Presidential Order is for locals only, and for the unreserved twenty percent both local and non‑local candidates, roster points shall be maintained. The twenty percent shall be filled up first as per the merit of the selected candidates in the provisional selection list, including locals and non‑locals. Thereafter, eighty percent would be filled only by local candidates, excluding non‑locals from such list, if any. For this purpose, the provisional selection list of the District Selection Committee (DSC) is divided into two parts; the first part contains twenty percent of the posts and the rest eighty percent in the second part., The Government Pleader submitted that under the twenty percent two General candidates (Open Competition) namely M. Phani Dhurjati (228 marks, 1st rank) and M. V. Krishnan (224 marks, 2nd rank) were selected as per their merit and rank. N. Chandra Mohan (Scheduled Caste) secured 216 marks (12th rank) and was elected under his Scheduled Caste category under the twenty percent as per his merit. Two Scheduled Caste candidates, E. Maheswara Rao (210 marks, 25th rank) and G. Abbulu (204 marks, 44th rank) were selected in their reserved Scheduled Caste category under the eighty percent. Hence, the petitioner Sandrapati Vijaya Kumar could not be selected being at fourth place against three posts reserved for Scheduled Caste., The Government Pleader submitted with respect to the petitioner Asuri Srinivasa Rao that Gollapally Srinivasa Rao (Backward Class – D) who secured the highest 216 marks in his category was selected under the twenty percent, against the reserved Backward Class – D post. Two other next candidates of Backward Class – D, namely N. S. Nagaraju (204 marks) and K. V. Gopi Krishna (202 marks), were selected under the eighty percent against the posts reserved for Backward Class – D. The petitioner Asuri Srinivasa Rao stood at Serial No. 4 (201 marks) in Backward Class – D and consequently could not be selected against the three posts reserved for Backward Class – D., The Government Pleader concluded that the entire exercise was carried out by the District Selection Committee in accordance with the prescribed procedure. No irregularity was committed in the selection process. The Tribunal committed no illegality in dismissing Original Application No. 106 of 2016 and Original Application No. 7282 of 2013., Sri T. Balakrishna, learned Standing Counsel for the Andhra Pradesh Public Service Commission, submitted that the role of the Andhra Pradesh Public Service Commission is to conduct the written examination and forward the rank list to the District Collector for making selections. Pursuant to the notification, after conducting the process, the ranking list in order of merit was communicated to the District Collector, Krishna District, for making selection duly following the rules. The Andhra Pradesh Public Service Commission has no further role to play., In view of the submissions advanced, the following points arise for consideration: (A)(1) Whether in a case where the reserved category candidate secured more marks than the last selected general category candidate, such reserved category candidate will have to be adjusted in the general category post or only against the vacancies reserved for such category of candidate? (2) Whether N. Chandra Mohan (216 marks, 12th rank) Scheduled Caste candidate on the basis of his merit should have been adjusted against the general category post, being higher in merit than the last selected Open Competition candidate (211 marks), and if so, whether the petitioner Sandrapati Vijaya Kumar in Writ Petition No. 35726 of 2018 should have been selected against the third Scheduled Caste post on his merit position being at Serial No. 4? (3) Whether Gollapally Srinivasa Rao (216 marks, 13th rank) Backward Class – D candidate, on the basis of his merit should have been adjusted against the general category post, being higher in merit than the last selected Open Competition candidate (211 marks), and if so, whether Asuri Srinivasa Rao the petitioner in Writ Petition No. 37037 of 2018 should have been selected against the third Backward Class – D post on his merit position being at Serial No. 4? (B) If the answer to points A(1), (2) & (3) is affirmative, whether applying such law in giving effect to the reservation, under eighty percent posts for locals only, would result in violation of paragraph 8 of the Presidential Order, 1975 or not?, The undisputed facts are: (i) The petitioners’ merit positions and the marks obtained in their respective reserved categories; (ii) The last selected candidate in the Open Competition category and his marks; (iii) The merit positions of N. Chandra Mohan (Scheduled Caste) and Gollapally Srinivasa Rao (Backward Class – D) in their respective reserved categories; and (iv) N. Chandra Mohan and Gollapally Srinivasa Rao obtained higher marks (216) than G. Pulla Reddy, the last selected Open Competition candidate (211)., We proceed to consider some judicial pronouncements of the Supreme Court of India on this point which have settled the law on the subject., In Pradeep Singh Dehal v. State of Himachal Pradesh and others, the Supreme Court held that every person is a general category candidate. The benefit of reservation is conferred to Scheduled Castes, Scheduled Tribes and Other Backward Classes or such other category as is permissible under law. The Court referred to Indra Sawhney & Ors. v. Union of India, holding that if a reserved category candidate is in merit, he will occupy a general category seat. The case of Vikas Sankhala v. Vikas Kumar Agarwal was also referred, wherein it was held that a reserved category candidate who obtains more marks than the last general category candidate is to be considered as a general category candidate and such reserved category candidate has to be treated as an unreserved category candidate., Paragraph 14 of Pradeep Singh Dehal states: 'We find that the process of conducting separate interviews for the posts of Assistant Professor under general category and OBC category is wholly illegal... Every person is a general category candidate. The benefit of reservation is conferred to Scheduled Castes, Scheduled Tribes and OBC category candidates or such other category as is permissible under law... if a reserved category candidate is in merit, he will occupy a general category seat.' Paragraph 15 states: 'In judgment reported as Vikas Sankhala, one of the questions examined was whether a reserved category candidate who obtains more marks than the last general category candidate is to be treated as a general category candidate. It was held that such reserved category candidate has to be treated as an unreserved category candidate provided such candidate did not avail any other special concession.', In Saurav Yadav, the Supreme Court held that the principle that candidates belonging to any of the vertical reservation categories are entitled to be selected in Open or General Category is well settled. It further held that if such candidates are entitled to be selected on the basis of their own merit, their selection cannot be counted against the quota reserved for the categories for vertical reservation to which they belong., The Court also considered the second view taken by some High Courts, that after vertical reservations are provided, for accommodating candidates for effecting horizontal reservation, the candidates from reserved categories can be adjusted only against their own categories under the concerned vertical reservation and not against the Open or General Category. The Supreme Court held that the second view is neither based on any authoritative pronouncement nor does it lead to a situation where merit is given precedence. Subject to any permissible reservations, opportunities to public employment and selection of candidates must purely be based on merit. Any selection which results in candidates being selected against Open/General category with less merit than other available candidates will be opposed to principles of equality., Paragraphs 26 to 30, 38, 39 and 44 of Saurav Yadav discuss the principle that vertical reservation candidates may be selected in Open Category on merit, and that the second view would lead to irrational results, sidelining more meritorious candidates, and is contrary to the long line of decisions of this Court., In Bharat Sanchar Nigam Limited, the question for consideration was whether, in a case where reserved category candidates secured more marks than general category candidates, such reserved category candidates will have to be first adjusted in the general category pool and considered for appointment in the general category pool or against the vacancies meant for reserved category candidates.
|
id_1654
| 1
|
Supreme Court of India reiterated that the reserved category candidates securing higher marks than the last of the general category candidates are entitled to get seat or post in unreserved categories. It was held that even while applying horizontal reservation, merit must be given precedence and if the candidates who belong to Scheduled Castes, Scheduled Tribes and Other Backward Classes have secured higher marks or are more meritorious, they must be considered against the seats meant for unreserved candidates. It was also held that the candidates belonging to reserved categories can as well stake claim to seats in unreserved categories if their merit and position in the merit list entitles them to do so., It is apt to refer to paragraph 8 of Bharat Sanchar Nigam Limited (supra) with its sub‑paras as under: while considering the aforesaid issue, few decisions of the Supreme Court of India on the above point are required to be referred to., In the case of Indra Sawhney (supra) in paragraph 812, it is observed and held as under: we are also of the opinion that this rule of 50 % applies only to reservations in favour of backward classes made under Article 16(4). A little clarification is in order at this juncture: all reservations are not of the same nature. There are two types of reservations, which may, for the sake of convenience, be referred to as vertical reservations and horizontal reservations. The reservations in favour of Scheduled Castes, Scheduled Tribes and Other Backward Classes under Article 16(4) may be called vertical reservations whereas reservations in favour of physically handicapped under clause (1) of Article 16 can be referred to as horizontal reservations. Horizontal reservations cut across the vertical reservations; this is called interlocking reservations. To be more precise, suppose three percent of the vacancies are reserved in favour of physically handicapped persons; this would be a reservation relatable to clause (1) of Article 16. The persons selected against this quota will be placed in the appropriate category; if he belongs to Scheduled Castes he will be placed in that quota by making necessary adjustments; similarly, if he belongs to Open Competition category, he will be placed in that category by making necessary adjustments. Even after providing for these horizontal reservations, the percentage of reservations in favour of backward class of citizens remains and should remain the same. This is how these reservations are worked out in several States and there is no reason not to continue that procedure., In Rajesh Kumar Daria (supra), in paragraphs 8 to 11, it is observed and held as under: we may also refer to two related aspects before considering the facts of this case. The first is about the description of horizontal reservation. For example, if there are 200 vacancies and fifteen percent is the vertical reservation for Scheduled Castes and thirty percent is the horizontal reservation for women, the proper description of the number of posts reserved for Scheduled Castes should be: for Scheduled Castes: thirty posts, of which nine posts are for women. Many a time this is wrongly described as: for Scheduled Castes: twenty‑one posts for men and nine posts for women, in all thirty posts. Obviously, there is, and there can be, no reservation category of male or men. The second relates to the difference between the nature of vertical reservation and horizontal reservation. Social reservations in favour of Scheduled Castes, Scheduled Tribes and Other Backward Classes under Article 16(4) are vertical reservations. Special reservations in favour of physically handicapped, women, etc. under Articles 16(1) or 15(3) are horizontal reservations. Where a vertical reservation is made in favour of a Backward Class under Article 16(4), the candidates belonging to such Backward Class may compete for non‑reserved posts and if they are appointed to the non‑reserved posts on their own merit, their number will not be counted against the quota reserved for the respective Backward Class. Therefore, if the number of Scheduled Castes candidates who by their own merit get selected to open competition vacancies equals or even exceeds the percentage of posts reserved for Scheduled Castes, it cannot be said that the reservation quota for Scheduled Castes has been filled. The entire reservation quota will be intact and available in addition to those selected under open competition category (see Indra Sawhney, R.K. Sabharwal v. State of Punjab, Union of India v. Virpal Singh Chauhan and Ritesh R. Sah v. Y.L. Yamul). But the aforesaid principle applicable to vertical (social) reservations will not apply to horizontal (special) reservations. Where a special reservation for women is provided within the social reservation for Scheduled Castes, the proper procedure is first to fill up the quota for Scheduled Castes in order of merit and then find out the number of candidates among them who belong to the special reservation group of Scheduled Caste women. If the number of women in such list is equal to or more than the number of special reservation quota, then there is no need for further selection towards the special reservation quota. Only if there is any shortfall, the requisite number of Scheduled Caste women shall have to be taken by deleting the corresponding number of candidates from the bottom of the list relating to Scheduled Castes. To this extent, horizontal (special) reservation differs from vertical (social) reservation. Thus women selected on merit within the vertical reservation quota will be counted against the horizontal reservation for women. Let us illustrate by an example: if nineteen posts are reserved for Scheduled Castes (of which the quota for women is four), nineteen Scheduled Caste candidates shall have to be first listed in accordance with merit, from out of the successful eligible candidates. If such list of nineteen candidates contains four Scheduled Caste women candidates, then there is no need to disturb the list by including any further Scheduled Caste woman candidate. On the other hand, if the list of nineteen Scheduled Caste candidates contains only two women candidates, then the next two Scheduled Caste women candidates in accordance with merit will have to be included in the list and corresponding number of candidates from the bottom of such list shall have to be deleted, so as to ensure that the final nineteen selected Scheduled Caste candidates contain four women. (But if the list of nineteen Scheduled Caste candidates contains more than four women candidates, selected on their own merit, all of them will continue in the list and there is no question of deleting the excess women candidates on the ground that Scheduled Caste women have been selected in excess of the prescribed internal quota of four.), In this case, the number of candidates to be selected under general category (Open Competition) were fifty‑nine, out of which eleven were earmarked for women. When the first fifty‑nine from among the two hundred sixty‑one successful candidates were taken and listed as per merit, it contained eleven women candidates, which was equal to the quota for general category women. There was thus no need for any further selection of women candidates under the special reservation for women. But the Rajasthan Public Service Commission took only the first forty‑eight candidates in the order of merit (which contained eleven women) and thereafter filled the next eleven posts under the general category with women candidates. As a result, among fifty‑nine general category candidates, twenty‑two women have been selected consisting of eleven women selected on their own merit (candidates at serial numbers 2, 3, 4, 5, 9, 19, 21, 25, 31, 35 and 41 of the selection list) and another eleven (candidates at serial numbers 54, 61, 62, 63, 66, 74, 75, 77, 78, 79 and 80) included under reservation quota for general category women. This is clearly impermissible. The process of selections made by the Rajasthan Public Service Commission amounts to treating the twenty percent reservation for women as a vertical reservation, instead of being a horizontal reservation within the vertical reservation., Similarly, we find that in regard to twenty‑four posts for Other Backward Classes, nineteen candidates were selected by the Rajasthan Public Service Commission in accordance with merit from among Other Backward Classes candidates which included three women candidates. Thereafter, another five women were selected under the category of Other Backward Classes women, instead of adding only two which was the shortfall. Thus there were in all eight women candidates among the twenty‑four Other Backward Classes candidates found in the selection list. The proper course was to list twenty‑four Other Backward Classes candidates as per merit and then find out number of women candidates among them, and only fill the shortfall to make up the quota of five for women., In the case of Uttaranchal Public Service Commission v. Mamta Bisht, (2010) 12 SCC 204, the High Court of Uttarakhand took the view that the reserved category candidate, on her own merit, was entitled to be considered in the general category and she could not have been counted against the reserved category. While upholding the judgment of the High Court, this Supreme Court of India observed and held in paragraphs 3, 4, 13 and 15 as under: out of forty‑two posts, twenty‑six were filled up by general category and sixteen by reserved category candidates. Some women candidates stood selected in the general category while others had been given the benefit of horizontal reservation being residents of Uttarakhand. Respondent 1, being aggrieved, preferred Writ Petition No. 780 of 2003 (M/B) in the High Court of Uttarakhand seeking quashment of the selection list dated 31‑July‑2003 mainly on the ground that women candidates belonging to Uttarakhand had secured marks making them eligible to be selected in the general category and, had it been done so, Respondent 1 could have been selected in the reserved category being a woman of Uttarakhand. It was also pleaded that some of the women candidates who not only claimed the benefit of horizontal reservation but had been selected giving the said benefit, did not submit their respective certificate of domicile at the time of filling up the application forms but produced the certificate later and it was accepted. The High Court accepted the first submission of Respondent 1 after examining the record of selection and concluded that the last selected woman candidate who was given the benefit of horizontal reservation for Uttarakhand women had secured marks higher than the last selected candidate in the general category. Thus, the said candidate ought to have been appointed against the general category vacancy and Respondent 1 ought to have been offered the appointment giving her the benefit of horizontal reservation for Uttarakhand women. Hence, these appeals. The High Court allowed the writ petition only on the ground that the horizontal reservation is also to be applied as vertical reservation in favour of reserved category candidates (social). In view of the above, Neetu Joshi (serial number 9, roll number 12320) has wrongly been counted by Respondent 3/Commission against five seats reserved for Uttarakhand Women General Category as she has competed on her own merit as a general candidate and, as the fifth candidate, the petitioner should have been counted for Uttarakhand Women General Category seats. The application for impleadment of Neetu Joshi was not allowed. Attempts to implead some successful candidates before this Court were rejected., The view taken by the High Court on application of horizontal reservation is contrary to the law laid down by this Supreme Court of India in Rajesh Kumar Daria v. Rajasthan Public Service Commission [(2007) 8 SCC 785], wherein dealing with a similar issue this Court held as under: (SCC pp. 790‑91, para 9) the second relates to the difference between the nature of vertical reservation and horizontal reservation. Social reservations in favour of Scheduled Castes, Scheduled Tribes and Other Backward Classes under Article 16(4) are vertical reservations. Special reservations in favour of physically handicapped, women, etc. under Articles 16(1) or 15(3) are horizontal reservations. Where a vertical reservation is made in favour of a Backward Class under Article 16(4), the candidates belonging to such Backward Class may compete for non‑reserved posts and if they are appointed to the non‑reserved posts on their own merit, their number will not be counted against the quota reserved for the respective Backward Class. Therefore, if the number of Scheduled Castes candidates who by their own merit get selected to open competition vacancies equals or even exceeds the percentage of posts reserved for Scheduled Castes, it cannot be said that the reservation quota for Scheduled Castes has been filled. The entire reservation quota will be intact and available in addition to those selected under open competition category (see Indra Sawhney, R.K. Sabharwal, Union of India v. Virpal Singh Chauhan and Ritesh R. Sah v. Y.L. Yamul). But the aforesaid principle applicable to vertical (social) reservations will not apply to horizontal (special) reservations. Where a special reservation for women is provided within the social reservation for Scheduled Castes, the proper procedure is first to fill up the quota for Scheduled Castes in order of merit and then find out the number of candidates among them who belong to the special reservation group of Scheduled Caste women. If the number of women in such list is equal to or more than the number of special reservation quota, then there is no need for further selection towards the special reservation quota. Only if there is any shortfall, the requisite number of Scheduled Caste women shall have to be taken by deleting the corresponding number of candidates from the bottom of the list relating to Scheduled Castes. To this extent, horizontal (special) reservation differs from vertical (social) reservation. Thus women selected on merit within the vertical reservation quota will be counted against the horizontal reservation for women., In view of the above, it is evident that the judgment and order of the High Court is not in consonance with the law laid down by this Supreme Court of India in Rajesh Kumar Daria [(2007) 8 SCC 785]. The judgment and order impugned herein is liable to be set aside and all the consequential orders become unenforceable and inconsequential. Thus, the appeals succeed and are allowed. The judgment and order of the High Court dated 26‑October‑2005 passed in Mamta Bisht v. State (WPMB No. 780 of 2003, order dated 26‑October‑2005 (Uttarakhand)) is hereby set aside. No costs., In Ritesh R. Sah v. Y.L. Yamul, (1996) 3 SCC 253 after noticing the Larger Bench decision of this Court in the case of Indra Sawhney (supra) and R.K. Sabharwal (supra), it is observed in paragraphs 13 to 16 as under: there cannot be any dispute with the proposition that if a candidate is entitled to be admitted on the basis of his own merit then such admission should not be counted against the quota reserved for Scheduled Castes or Scheduled Tribes or any other reserved category since that would be against the constitutional mandate enshrined in Article 16(4). In Indra Sawhney v. Union of India [1992 Supp (3) SCC 217] commonly known as the Mandal case, this Court held: in this connection it is well to remember that the reservations under Article 16(4) do not operate like a communal reservation. It may well happen that some members belonging to, say, Scheduled Castes get selected in the open competition field on the basis of their own merit; they will not be counted against the quota reserved for Scheduled Castes; they will be treated as open competition candidates. In R.K. Sabharwal v. State of Punjab [(1995) 2 SCC 745] the Constitution Bench of this Court considered the question of appointment and promotion and roster points vis‑à‑vis reservation and held: when a percentage of reservation is fixed in respect of a particular cadre and the roster indicates the reserve points, it has to be taken that the posts shown at the reserve points are to be filled from amongst the members of reserved categories and the candidates belonging to the general category are not entitled to be considered for the reserved posts. On the other hand the reserved category candidates can compete for the non‑reserved posts and in the event of their appointment to the said posts their number cannot be added and taken into consideration for working out the percentage of reservation. Article 16(4) of the Constitution of India permits the State Government to make any provision for the reservation of appointments or posts in favour of any Backward Class of citizens which, in the opinion of the State, is not adequately represented in the Services under the State. It is therefore incumbent on the State Government to reach a conclusion that the Backward Class(es) for which the reservation is made is not adequately represented in the State Services. While doing so the State Government may take the total population of a particular Backward Class and its representation in the State Services. When the State Government after doing the necessary exercise makes the reservation and provides the extent of percentage of posts to be reserved for the said Backward Class then the percentage has to be followed strictly. The prescribed percentage cannot be varied or changed because some of the members of the Backward Class have already been appointed/promoted against the general seats. As mentioned above the roster point which is reserved for a Backward Class has to be filled by way of appointment/promotion of the member of the said class. No general category candidate can be appointed against a slot in the roster which is reserved for the Backward Class. The fact that considerable number of members of a Backward Class have been appointed/promoted against general seats in the State Services may be a relevant factor for the State Government to review the question of continuing reservation for the said class but so long as the instructions/rules providing certain percentage of reservations for the Backward Classes are operative the same have to be followed. Despite any number of appointees/promotees belonging to the Backward Classes against the general category posts the given percentage has to be provided in addition. In Union of India v. Virpal Singh Chauhan [(1995) 6 SCC 684] it has been held that while determining the number of posts reserved for Scheduled Castes and Scheduled Tribes, the candidates belonging to reserved category but selected/promoted on the rule of merit (and not by virtue of rule of reservation) shall not be counted as reserved category candidates., In a more recent decision this Supreme Court of India in the case of Saurav Yadav v. State of Uttar Pradesh, (2021) 4 SCC 542 after referring to all the earlier judgments on vertical reservation has observed and held that it is well settled that candidates belonging to any of the vertical reservation categories are entitled to be selected in open or general category and it is also further observed that if such candidates belonging to reserved categories are entitled to be selected on the basis of their own merit, their selection cannot be counted against the quota reserved for the categories that they belong., Similar view has been expressed by this Supreme Court of India in another recent decision in the case of Sadhana Singh Dangi v. Pinki Asati, (2022) 1 SCC 534. By the said decision, it is reiterated that the reserved category candidates securing higher marks than the last of the general category candidates are entitled to get seat or post in unreserved categories. It is further observed and held that even while applying horizontal reservation, merit must be given precedence and if the candidates who belong to Scheduled Castes, Scheduled Tribes and Other Backward Classes have secured higher marks or are more meritorious, they must be considered against the seats meant for unreserved candidates. It is further observed that the candidates belonging to reserved categories can also stake claim to seats in unreserved categories if their merit and position in the merit list entitles them to do so., Thus it is well settled in law that: (i) the candidates belonging to any of the vertical reservation categories are entitled to be selected in open/general category on the basis of their own merit. The reserved category candidates securing higher marks than the last of the general category candidates are entitled to get seat or post in unreserved category. (ii) the selection of the reserved category candidates, based on their own merit to a post/seat in unreserved category cannot be counted against the quota reserved for the category to which they belong. Despite any number of opportunities belonging to reserved category of Scheduled Castes, Scheduled Tribes or Other Backward Classes against the general category posts, the given percentage of reservation has to be proceeded in addition., As per the list of the selected candidates, annexed and the details mentioned in paragraph 4 of the counter affidavit of the third respondent, in Open Category (General) there are two Open Competition candidates selected under twenty percent and there are seven candidates selected under eighty percent. In total there are nine Open Competition candidates selected. Under twenty percent, the Open Competition candidates at serial numbers 1 and 2 obtained 228 and 224 marks respectively. Under eighty percent the Open Competition candidates at serial numbers 1 to 7 obtained 224, 220, 215, 215, 215, 214 and 211 marks respectively., Thus, in Open Competition category five selected candidates from serial numbers 3 to 7 (under eighty percent) obtained lesser marks than N. Chandra Mohan (Scheduled Castes) (216 marks) and Gollapally Srinivasa Rao (BC‑D) (216 marks)., Resultantly, in view of the settled law as in Pradeep Singh Dehal (supra), Saurav Yadav (supra) and Bharat Sanchar Nigam Limited (supra), N. Chandra Mohan (Scheduled Castes) and Gollapally Srinivasa Rao (BC‑D), on their merit position were entitled in law to the posts in unreserved (Open Competition) Category., N. Chandra Mohan (Scheduled Castes) and Gollapally Srinivasa Rao (BC‑D) shall not be counted against the quota reserved for their respective Scheduled Castes and BC‑D categories. The entire reservation quota will be intact and available. Consequently, under their respective reserved categories there would be only two selected candidates in each category and to the extent of one post in each such category, the reservation quota is unfilled., If the reserved category candidates N. Chandra Mohan (Scheduled Castes) and Gollapally Srinivasa Rao (BC‑D), on their own merit are given posts in open category, as per the settled law, the petitioner of both these writ petitions would get selection in their respective reserved category against the third reserved post, each, as they both stand at serial number 4 in their respective category and on shifting of N. Chandra Mohan (Scheduled Castes) and Gollapally Srinivasa Rao (BC‑D) against Open Competition posts, the petitioners would be within the reserved posts of their respective reserved categories., We proceed to consider the A.P. Public Employment (Organization of Local Cadres and Regulation of Direct Recruitment) Order, 1975 (in short, the Presidential Order)., The Presidential Order, 1975 is enacted under Article 371‑D of the Constitution of India. It provides for the special provisions with respect to the State of Andhra Pradesh. Article 371‑D(1) provides that the President may by order made with respect to the State of Andhra Pradesh and Telangana, provide, having regard to the requirements of each State, for equitable opportunities and facilities for the people belonging to different parts of such State in the matter of public employment and in the matter of education and different provisions may be made for various parts of the States., Article 371‑D(2) provides that an order made under clause (1) may in particular, (c) specify the extent to which, the manner and the conditions subject to which, preference or reservation shall be given or made (i) in the matter of direct recruitment to post in any such cadre referred to in sub‑clause (b) as may be specified in this behalf in the order to or in favour of candidates who have resided or situated for any period specified in the order in the local area in respect of such cadre, University or other educational institutions as the case may be., Article 371‑D of the Constitution of India is reproduced as under: (1) The President may by order made with respect to the State of Andhra Pradesh or the State of Telangana, provide, having regard to the requirement of each State, for equitable opportunities and facilities for the people belonging to different parts of such State, in the matter of public employment and in the matter of education, and different provisions may be made for various parts of the States. (2) An order made under clause (1) may, in particular, (a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised; (b) specify any part or parts of the State which shall be regarded as the local area (i) for direct recruitment… (text continues)., The President may, by order, provide for the constitution of an Administrative Tribunal for the State of Andhra Pradesh and for the State of Telangana to exercise such jurisdiction, powers and authority as may be specified in the order with respect to matters such as appointment, allotment or promotion, seniority, and other conditions of service.
|
id_1654
| 2
|
An order made under clause (3) may (a) authorise the Administrative Tribunal to receive representations for the redress of grievances relating to any matter within its jurisdiction as the President may specify in the order and to make such orders thereon as the Administrative Tribunal deems fit; (b) contain such provisions with respect to the powers and authorities and procedure of the Administrative Tribunal, including provisions with respect to the powers of the Administrative Tribunal to punish for contempt of itself, as the President may deem necessary; (c) provide for the transfer to the Administrative Tribunal of such classes of proceedings, being proceedings relating to matters within its jurisdiction and pending before any court other than the Supreme Court or tribunal or other authority immediately before the commencement of such order, as may be specified in the order; (d) contain such supplemental, incidental and consequential provisions, including provisions as to fees and as to limitation, evidence or for the application of any law for the time being in force subject to any exceptions or modifications, as the President may deem necessary., The order of the Administrative Tribunal finally disposing of any case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier. Provided that the State Government may, by special order made in writing and for reasons to be specified therein, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be., Every special order made by the State Government under the proviso to clause (5) shall be laid, as soon as may be after it is made, before both Houses of the State Legislature., The High Court of the State shall not have any powers of superintendence over the Administrative Tribunal and no court other than the Supreme Court or tribunal shall exercise any jurisdiction, power or authority in respect of any matter subject to the jurisdiction, power or authority of, or in relation to, the Administrative Tribunal., If the President is satisfied that the continued existence of the Administrative Tribunal is not necessary, the President may by order abolish the Administrative Tribunal and make such provisions in such order as he may deem fit for the transfer and disposal of cases pending before the Tribunal immediately before such abolition., Notwithstanding any judgment, decree or order of any court, tribunal or other authority, (a) no appointment, posting, promotion or transfer of any person made before the first day of November 1956 to any post under the Government of, or any local authority within, the State of Hyderabad as it existed before that date; or made before the commencement of the Constitution (Thirty‑second Amendment) Act, 1973, to any post under the Government of, or any local or other authority within, the State of Andhra Pradesh; and (b) no action taken or thing done by or before any person referred to in sub‑clause (a) shall be deemed to be illegal or void or ever to have become illegal or void merely on the ground that the appointment, posting, promotion or transfer of such person was not made in accordance with any law then in force providing for any requirement as to residence within the State of Hyderabad or, as the case may be, within any part of the State of Andhra Pradesh, in respect of such appointment, posting, promotion or transfer., The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force., Paras 8, 10, 11 and 12 of the Presidential Order, 1975 relevant for the present case, are reproduced as follows: 8. Reservation in the matter of direct recruitment: (1) Eighty percent of the posts to be filled by direct recruitment at any time. (a) in any local cadre under the State Government comprising posts belonging to the category of lower division clerk or a category equivalent to or lower than that lower division clerk; and (b) in any cadre under a local authority comprising posts carrying a scale of pay the minimum of which, or a fixed pay which does not exceed the minimum of the scale of pay of a lower division clerk, shall be reserved in favour of local candidates in relation to the local area in respect of such cadre. (c) (i) in any local cadre under the State Government comprising posts belonging to the categories of Teachers in the Andhra Pradesh School Education Subordinate Service and all other similar or equivalent categories of posts of teachers under any Department of the State Government; and (ii) in any cadre under a Local Authority or under any such other Management, as may be notified by the State Government from time to time carrying a scale of pay equal to that of posts in the Andhra Pradesh School Education Subordinate Service shall be reserved in favour of local candidates in relation to the local area in respect of such cadre. (effective from 1 June 2001)., (2) Seventy percent of the posts to be filled by direct recruitment at any time; (a) in any local cadre under the State Government comprising posts belonging to non‑gazetted categories other than those referred to in item (a) of sub‑paragraph (1); and (b) in any cadre under a local authority comprising posts carrying a scale of pay the minimum of which, or a fixed pay which exceeds the minimum of the scale of pay of a lower division clerk but does not exceed Rs 480 per month or any amount corresponding to it as may be specified in successive revisions of pay scales granted by the State Government from time to time shall be reserved in favour of local candidates in relation to the local area in respect of such cadre., (3) Sixty percent of the posts to be filled by direct recruitment at any time in any local cadre under the State Government comprising posts belonging to the categories of Tahsildars, Assistant Executive Engineers, Assistant Agricultural Officers, Inspector of Police and Motor Vehicle Inspectors shall be reserved in favour of local candidates in relation to the local area., (4) Notwithstanding anything contained in sub‑paragraph (2) or sub‑paragraph (3) where, in respect of any of the categories referred to in the said paragraphs a single cadre has been organised for two or more zones under sub‑paragraph (5) of paragraph 3, seventy percent or, as the case may be, sixty percent of the posts to be filled by direct recruitment at any time in such cadre shall be reserved in favour of and allocated amongst the local candidates in relation to each of the local areas in respect of such cadre in the ratio specified in the Second Schedule against the zone comprising each such local area., (5) Sixty percent of the posts under the State Government belonging to the category of Civil Assistant Surgeons to be filled by direct recruitment at any time shall be reserved in favour of and allocated amongst the local candidates in relation to the local area specified in column (1) of the table below in the respective ratios specified in column (2) thereof. Local area – Ratio: I. Districts of Srikakulam, Vizianagaram and Visakhapatnam – 13; II. Districts of East Godavari, West Godavari and Krishna – 18; III. Districts of Guntur, Prakasham and Nellore – 15; IV. Districts of Chittoor, Cuddapah, Anantapur and Kurnool – 18; V. Districts of Adilabad, Karimnagar, Warangal and Khammam – 15; VI. Districts of Ranga Reddy (excluding such areas as part of the City of Hyderabad) with effect from 15 August 1978, Nizamabad, Mahaboobnagar, Medak and Nalgonda – 17; VII. City of Hyderabad – 4., (6) While determining under this paragraph the number of posts to be reserved in favour of local candidates any fraction of a post shall be counted as one., (7) While allocating under sub‑paragraph (4) or sub‑paragraph (5) the reserved posts amongst the candidates in relation to different local areas fractions of a post shall be adjusted by counting successively the fractions in descending order of magnitude as one and where the fraction to be so counted cannot be selected by reason of the fractions being equal the selection shall be by lot., (8) Notwithstanding any thing contained in the foregoing provisions of this paragraph, (a) there shall be at least one post left unreserved out of the posts filled by direct recruitment at any time to any local cadre; and (b) there shall be, as far as possible, at least one post allocated for the local candidates in respect of each local area., (10) Power to Authorise issue of Directions: (1) The President may, by order, require the State Government to issue such directions as may be necessary or expedient for the purpose of giving effect to this order to any local authority and such local authority shall comply with such directions. (2) The State Government may, for the purpose of issuing any direction under sub‑paragraph (1) or for satisfying itself that any directions issued under sub‑paragraph (1) have been complied with, require by order in writing any local authority to furnish them such information, report of particulars as may be specified in the order and such local authority shall comply with such order., Order to have overriding effect: The provisions of this order shall have effect notwithstanding anything contained in any statute, ordinance, rule, regulation or other order made before or after issue of this order in respect of direct recruitment to posts under the State Government or any local authority., Removal of doubts: For the removal of doubts, it is declared that nothing in the order shall affect the operation of provisions made by the State Government or other competent authority before or after the commencement of this order in respect of reservation in the matter of appointments to posts in favour of any backward classes of citizens, the Scheduled Castes and the Scheduled Tribes, so far as such provisions are not inconsistent with this order., As per paragraph 8(1) of the Presidential Order, eighty percent of the posts are to be filled by direct recruitment at any time in a local cadre as mentioned therein., As per paragraph 11 of the Presidential Order, the provisions of the Presidential Order shall have effect notwithstanding anything contained in any statute, ordinance, rule, regulation or other order made before or after the commencement of the Presidential Order in respect of direct recruitment to posts under the State Government or any local authority., As per paragraph 12 of the Presidential Order, for removal of doubts it was declared that nothing in the Presidential Order shall affect the operation of any provisions made by the State Government or other competent authority before or after the commencement of the Presidential Order in respect of reservation in the matter of appointments to posts in favour of any backward classes of citizens, the Scheduled Castes and the Scheduled Tribes, so far as such provisions are not inconsistent with the Presidential Order., The Government of Andhra Pradesh issued Government Order No. 8, General Administration (SPF.A) Department dated 08 January 2002, providing for the manner of selection of local candidates in terms of paragraph 8 of the Presidential Order. Previously, on the same subject Government Order No. 763, General Administration (SPF.A) Department dated 15 November 1975 was in force. This was amended by Government Order No. 8 dated 08 January 2002., The Government Order No. 8, General Administration (SPF.A) Department dated 08 January 2002 reads as follows: (G.O. No. 8, General Administration (SPF.A) Department Dated 8th January 2002) In terms of paragraph 8 of the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975, i.e., Presidential Order, in the case of District Cadres, eighty percent of the posts under Direct Recruitment are reserved for local candidates, as defined in paragraph 7 of the Presidential Order. The remaining twenty percent of the posts are open posts for which local and non‑locals have to be considered on the basis of combined merit. This aspect has already been clarified in the Unofficial Note fourth read above. The government have also issued instructions in the Government Order third read above on the manner in which the posts have to be filled up. 2. Government have re‑examined the matter of filling up of the posts as prescribed in the Government Order third read above. Accordingly it is decided that while filling up of the posts under Direct Recruitment, the first twenty percent of posts should be filled following a combined merit list of locals and non‑locals and, thereafter, the remaining eighty percent of the posts shall be filled up by locals only. However, while filling up of the posts the special representation under rule 22 of the Andhra Pradesh State and Subordinate Service Rules shall be followed suitably. 3. Accordingly the following amendment is issued to the procedure prescribed in paragraphs 3 and 4 of Annexure I to the Government Order (P) No. 763, General Administration (SPF.A) Department, dated 15 November 1975. 4. In respect of Annexures II & III to the Government Order third read above orders will be issued separately. 5. In the said orders, in Annexure I(5)(i) for paragraphs 3 and 4 the following shall be substituted namely: Paragraph 3: The provisional list shall be divided into two parts. The first part will comprise the first twenty percent of the list. The second part will comprise the balance eighty percent. In case the provisional list does not contain any non‑local candidate in the second part, the list shall be approved. Paragraph 4: If however on the scrutiny referred to in paragraph 3 it is found that there are non‑local candidates in the second part of the list, then these candidates shall be removed and replaced by local candidates ensuring that the rule of reservation is followed. (ii) the illustrations thereunder shall be omitted. Chief Secretary to Government., According to Government Order No. 8 dated 08 January 2002, as amended, while filling up of the posts under direct recruitment the first twenty percent of posts shall be filled following a combined merit list of locals and non‑locals. Thereafter, the remaining eighty percent of the posts shall be filled up by locals only. The provisional selection list shall be divided into two parts. The first shall contain the first twenty percent and the second part shall contain the remaining eighty percent. In case the provisional list does not contain any non‑local candidate in the second part (i.e., eighty percent), the list shall be approved. If, however, on scrutiny it is found that there are non‑local candidates in the second part, then these candidates shall be removed and replaced by local candidates ensuring that the rule of reservation is followed., The Government Order No. 8 specifically provided that while filling up the posts, the special representation under Rule 22 of the Andhra Pradesh State and Subordinate Services Rules, 1996 (for short, the Rules, 1996) shall be followed suitably., Relevant part of Rule 22 i.e. 22(1) and 22(2) of the Rules, 1996, is reproduced as follows: Rule 22: Special Representation (Reservation): (1) Reservation may be made for appointments to a service, class or category in favour of Scheduled Castes, Scheduled Tribes, Backward Classes, Women, Physically Handicapped, Meritorious Sportsmen, Ex‑Servicemen and such other categories, as may be prescribed by the Government from time to time, to the extent and in the manner specified hereinafter in these Rules or as the case may be, in the special rules. The principle of reservation as hereinafter provided shall apply to all appointments to a service, class, or category. (i) by direct recruitment, except where the Government by a General or Special Order made in this behalf exempts such service, class or category; (ii) otherwise than by direct recruitment where the special Rules lay down specifically that the principle of reservation in so far as it relates to Scheduled Castes and Scheduled Tribes only shall apply to such services, class, or category to the extent specified therein. (2)(a) The unit of appointments for the purpose of this Rule shall be one hundred vacancies, of which fifteen shall be reserved for Scheduled Castes, six shall be reserved for Scheduled Tribes, twenty‑five shall be reserved for the Backward Classes and the remaining fifty‑four appointments shall be made on the basis of open competition and subject to Rule 22‑A of these rules., Thus, Rule 22 of the Rules, 1996 provides for specified representation (reservation) for appointments to a service, class or category in favour of the OBCs, SCs and STs, women, etc., In view of paragraph 12 of the Presidential Order, which declared that the Presidential Order shall not affect the operation of the provisions made by the State Government or other competent authority before or after the commencement of the Presidential Order in respect of reservation in the matter of appointment to posts in favour of any backward class of citizens, the Scheduled Castes and the Scheduled Tribes, so far as such provisions are not inconsistent with the Presidential Order, we are of the view that the provisions relating to reservation in favour of OBCs, SCs, and STs which are not inconsistent with the provisions of the Presidential Order shall also operate in the field and shall have to be given effect to in terms of the Presidential Order itself., According to the learned Government Pleader, the last selected/general candidate under twenty percent obtained 224 marks. The selected candidates of B.C‑D and SC under twenty percent obtained only 216 marks and therefore could not be shifted to the general category post. The said submission is not acceptable. It proceeds on the assumption, as if the settled law with respect to giving an unreserved post to a reserved category candidate on the basis of his own merit, is to be applied firstly under twenty percent and then separately under eighty percent. In our view the settled law would apply taking all the posts together i.e. one hundred percent, considering the entire selection at a time. It cannot be divided in twenty percent and then eighty percent., In our view, N. Chandra Mohan (SC) (216 marks) and Gollapally Srinivasa Rao (B.C‑D) (216 marks) deserve to be shifted under eighty percent, open category, as the last selected general category candidate obtained 211 marks only, to give full effect to the reservation provisions as per the settled law. Contrary thereto would be against the law of the land declared by the Honorable Apex Court, binding under Article 141 of the Constitution of India., We are not oblivious of the fact that in view of Article 371D(10) of the Constitution of India the provision of Article 371‑D as also the Presidential Order shall have effect notwithstanding anything in any other provision of the Constitution or in any other law for the time being in force. Paragraph 11 of the Presidential Order also provides for the Presidential Order to have overriding effect, notwithstanding anything contained in any statute, ordinance, rule, regulation or other order made before or after issue of the Presidential Order in respect of direct recruitment to posts under the State Government or any local authority., We may refer to the case of Sandeep v. Union of India, in which the Honorable Apex Court, considering, inter alia, Dr. C. Surekha v. Union of India and others; Pradeep Jain v. Union of India; and Reita Nirankari v. Union of India reiterated that the undivided State of Andhra Pradesh enjoys a special privilege granted to it under Article 371‑D of the Constitution and the Presidential Order. In Reita Nirankari the applicability of the domicile test stated in Pradeep Jain was excluded to the State of Andhra Pradesh by the view of the Presidential Order, 1974 for Andhra Pradesh State, in relation to admission in the Universities., In view of the above, the only thing is that in applying such law there should be no violation of the Presidential Order, 1975., The Presidential Order is (1) to promote accelerated development of the backward areas of the State of Andhra Pradesh so as to secure the balanced development of the State as a whole and (2) to provide equitable opportunities to different areas in the State in the matter of education, employment and career prospects in public service. The object is not to deprive the special reservation, which is so reflected from paragraph 12 of the Presidential Order itself, except to the extent of inconsistency with the Presidential Order., The acceptance of the submission of the learned Government Pleader would result in violation of the rules of reservation as declared by the Honorable Apex Court, ignoring the merit of the reserved category candidates. It would result in not fulfilling the prescribed percentage of quota for the reserved categories, as the meritorious candidates on their merit, competing with the open category candidates, are not to be counted towards reserved quota post., All the candidates selected either under twenty percent or under eighty percent, except one candidate in twenty percent, are locals of District Krishna. One candidate T. Sailaja B.C‑A (woman) Nellore District, non‑local, is selected under twenty percent. Eighty percent is only for locals. The last selected candidate in the open category, T. Pulla Reddy (211 marks) is a local candidate. N. Chandra Mohan (SC) and Gollapally Srinivasa Rao (B.C‑D) are also local candidates. There would therefore be no violation of the Presidential Order. The selected meritorious candidates N. Chandra Mohan (SC) and Gollapally Srinivasa Rao (B.C‑D) are the local candidates. So their shifting in the open category, based on their merit under eighty percent, would not reduce eighty percent for locals. That eighty percent would still be intact, only for locals., In our aforesaid view, in giving effect to Government Order No. 8, there would be compliance with the law as laid down by the Honorable Apex Court in Saurav Yadav and Bharat Sanchar Nigam Limited and there would also be no violation of paragraph 8 of the Presidential Order, 1975., In implementation of Government Order No. 8 in preparation of selection list, as per the rules of reservation, as also eighty percent to be filled by locals only, the State respondents ought to have ensured the compliance of both. But this has not been done in the present case. The Government must ensure compliance with the Presidential Order, paragraph 12, as well, according to which the Presidential Order shall not affect the operation of any provision made by the State Government or other competent authority before or after the commencement of the Presidential Order, in respect of reservation in the matter of reserved posts of any backward class of citizens, the SC and STs, so far as such provision is not inconsistent with the Presidential Order., Reservation does not only mean to follow the percentage of reservation fixed for the respective categories, but also the manner in which such reservation is to be implemented., We do not find any inconsistency, if the Presidential order for eighty percent in favour of locals is implemented by shifting reserved category candidates of SC and B.C‑D to the posts in general, under eighty percent on their merit position, as they belong to locals., We do not see any reason not to apply the law in Saurav Yadav and Bharat Sanchar Nigam Limited with respect to the reservation in favour of SC, and B.C‑D, and in giving the reserved category candidates on their own merit the post in open category, under eighty percent (locals only). There are five open category candidates in eighty percent below the marks of N. Chandra Mohan (SC) and Gollapally Srinivasa Rao (B.C‑D)., If N. Chandra Mohan (SC) and Gollapally Srinivasa Rao (B.C‑D) selected under twenty percent had been non‑local, there might have been force in the argument of the learned Government Pleader that non‑local reserved candidate on their merit cannot be shifted to eighty percent, as that would result in violation of paragraph 8 of the Presidential Order. But that is not the case here., The unofficial respondents 4 to 9 in Writ Petition No. 35726 of 2018, the open category candidates selected under eighty percent though obtained less marks than the reserved category candidates, are not at fault. It is the fault of the respondents 1 to 3 in implementing the reservation rule and Government Order No. 8 which have been in service for the last many years. Under the circumstances, we do not feel it appropriate to disturb their selection and appointments., Thus, on the points framed we hold as under: A. (1) The reserved category candidates SC, ST and OBC are entitled to be selected in open/general category post/seat on the basis of their own merit, securing higher marks than the last of the general category candidate. Such selection of the reserved category candidate cannot be counted against the quota reserved for the category to which they belong. The percentage of reserved categories fixed for such reservation category has to be proceeded and filled, in addition. A. (2) N. Chandra Mohan (SC) (216 marks) on his own merit, having secured higher marks than the last general category candidate (211 marks) should have been allotted the post in open category. S. Vijya Kumar (SC) the petitioner of Writ Petition No. 35726 of 2018 is therefore entitled and should have been selected against the third reserved post in the reserved category of SC. A. (3) Gollapally Srinivasa Rao (B.C‑D) (216 marks) on his own merit having secured higher marks than the last general category candidate (211 marks) should have been allotted the post in open category. Asuri Srinivasa Rao (B.C‑D) the petitioner of Writ Petition No. 37037 of 2018 is therefore entitled and should have been selected against the third reserved post in the reserved category of B.C‑D. B. The answer to points (A)(1), (2) & (3) being in affirmative, applying the law as laid down in Saurav Yadav and Bharat Sanchar Nigam Limited, and thereby adjusting N. Chandra Mohan (SC) and Asuri Srinivasa Rao (B.C‑D) in open category posts under eighty percent, locals only, would not violate the Presidential Order, 1975, but it would be in consonance with paragraphs 8 and 12 of the Presidential Order, 1975 read with rule 22 of the Rules, 1996 and Government Order No. 8 dated 01 January 2002., For the above consideration, we are of the considered view that the Tribunal did not decide the objections correctly. It failed to apply the settled law in correct perspective. The orders of the Tribunal cannot be sustained and deserve to be quashed., In the result: (1) The orders dated 10 September 2018 passed by the Tribunal in Objection A Nos. 106 of 2016 and dated 10 September 2018 in Objection A No. 7282 of 2013 are quashed. (2) The respondents are directed to give appointments to the petitioners of both writ petitions in their respective reserved categories, against the reserved posts of SC and B.C‑D respectively in those categories with all the consequential benefits, after adjusting the meritorious selected candidates of the reserved category, N. Chandra Mohan (SC) and Gollapally Srinivasa Rao (B.C‑D), in open category posts under eighty percent. (3) The entire exercise shall be completed within a period of one month from the date a copy of this judgment is served to the official respondents. (4) Both Writ Petition Nos. 35726 & 37037 of 2018 are allowed. No order as to costs. Consequently, the miscellaneous petitions, if any, pending in the petition shall stand closed.
|
id_1655
| 0
|
Dated this the 12th day of April, 2023 Petitioner seeks a direction to the Customs and Enforcement Directorate, Government of India to conduct a fair and time‑bound investigation into allegations of money laundering and illegal gold smuggling, taking into consideration the statements made by the accused with regard to the involvement of high‑ranking political functionaries of the State. Petitioner has also sought further directions to monitor the investigation by the said two agencies., According to the petitioner, on 05.07.2020 the Customs and Preventive Commissionerate seized 30 kgs of gold from a diplomatic cargo and on preliminary enquiry the Customs found that the sixth respondent, Ms. Swapna Suresh, had played a major role in gold smuggling activities. The sixth respondent made various revelations in her statement regarding the involvement of several persons, based upon which a show‑cause notice dated 29.07.2021 was issued to six persons. Petitioner also alleges that although the show‑cause notice mentioned the involvement of persons holding constitutional posts in the State in the illegal export of foreign currency, using diplomats of the Consular General’s Office, no serious investigation was conducted into the allegation. Petitioner further alleges that in the statements of the sixth respondent and another person, Sri P. S. Sarith, they detailed the involvement of Sri P. Sreerama Krishnan, the then Speaker of the Kerala Legislative Assembly. Despite these allegations and statements, no investigation was conducted by the Customs, especially into the allegations against Chief Minister Sri Pinarayi Vijayan, who was curiously left out of the investigation., Petitioner also alleges that the sixth respondent, in various press conferences and interviews apart from her autobiographical book, specifically mentioned the involvement of the Chief Minister of Kerala Sri Pinarayi Vijayan and his family, as well as that of the former Speaker Sri P. Sreeramakrishnan and other high‑ranking officials in the office of the Chief Minister in the gold smuggling, money laundering and other corrupt activities. Petitioner alleges that the investigation failed to concentrate on the involvement of these personalities. Though the Customs and the Enforcement Directorate initially proceeded with the investigation, it has come to a standstill, enabling the accused to tamper with the evidence. It is also alleged that the investigating agencies have miserably failed to investigate the role of the persons mentioned. Thus the petitioner has sought a fair, transparent and time‑bound investigation., Sri K. Gopalakrishna Kurup, learned Advocate General, assisted by Sri P. Narayanan, learned Public Prosecutor, took up a preliminary objection to the maintainability of the writ petition. In view of the said objection, notice to the third and sixth respondents was dispensed with for the time being., Though six reasons were stated as rendering the writ petition not maintainable, they can be categorized as three for brevity: absence of pleadings regarding the credentials, antecedents and other details of the petitioner; unsubstantiated allegations have been raised against high constitutional functionaries in the State by producing documents whose source has not been mentioned while efficacious alternative remedies otherwise exist; the factual issues in the writ petition have already been settled by two judgments of Division Benches of the High Court of Kerala., The preliminary objections to the maintainability were requested to be considered at the threshold. Therefore I heard Sri K. M. Shajahan, the learned counsel for the petitioner, as well as Sri K. Gopalakrishna Kurup, the learned Advocate General, on those questions., One of the main objections is with regard to the failure to reveal material facts in the writ petition, which is alleged by the respondents to be actually a public interest litigation camouflaged as a private litigation., Petitioner was allegedly the employer of Ms. Swapna Suresh (sixth respondent), which is evident from Annexure R7(c). This fact has not been mentioned in the writ petition. Further, the petitioner is an accused in a criminal case in which he approached the High Court of Kerala with a bail application wherein his connection with Ms. Swapna Suresh was mentioned. Since the petitioner failed to reveal his true identity and his connection with the sixth respondent in the writ petition, it is contended that the writ petition must be dismissed, as he had not come with clean hands., On a perusal of the pleadings in the writ petition, the High Court of Kerala could not identify any reference to the petitioner's identity or his connection with the sixth respondent. In the decision in State of Jharkhand v. Shiv Shankar Sharma and Others (2022 SCC OnLine SC 1541) it has been observed that the locus of the person who initiates litigation of public interest is of significance as this important form of litigation can be abused by motivated individuals. It was further observed that nondisclosure of the credentials of the petitioner and the past efforts made for similar reliefs discredits such public interest petitions. After referring to various decisions, the High Court of Kerala concluded that the locus of the petitioner is crucial for a proper determination of the lis; its absence can disentitle reliefs claimed in a public interest litigation., Though in the present case the petitioner has not specifically referred to his credentials nor revealed his connection with the sixth respondent, considering the public importance involved and that a criminal investigation can be triggered by any person, the absence of pleading as to the credentials of the petitioner, by itself, need not disqualify the petitioner in this case. In Shiv Shankar Sharma’s case (supra) the writ petitioner's father and the Chief Minister had an old enmity and a personal vendetta, and he was, in fact, one of the witnesses for the prosecution in the case against the father. These facts were suppressed. However, in the present case the circumstances differ, and the omitted details cannot be treated as material to dismiss the writ petition at the threshold, though the fact of the petitioner having been an employer of the sixth respondent ought to have been ideally mentioned., Objections regarding the imperfections in the affidavit vis‑à‑vis the documents filed as required under Rule 174 of the Rules of the High Court of Kerala, 1971 and the availability of alternative remedies are also not sustainable objections in the peculiar circumstances of this case., The objectionable document produced by the petitioner is the show‑cause notice issued by the Customs Department. The source from which the petitioner received the said document has not been mentioned either in the pleadings or in the affidavit. In this context, it is relevant to mention that attaining high levels of probity in public life is essential for the development of a nation. If a document is available in the hands of any person which can throw light into allegations of impairment of such probity, especially that of constitutional functionaries, the High Court of Kerala cannot shut its doors to such documents on the specious plea that the source from which those documents were received has not been revealed., In this context, the observations of the Supreme Court in Yashwant Sinha and Others v. Central Bureau of Investigation through its Director and Another [(2019) 6 SCC 1] are relevant. It was observed that there can be no dispute that the manner in which evidence is obtained, namely that it was procured in an illegal manner, would not ordinarily be very significant in itself in regard to the court’s decision to act upon the same. Thus failure to reveal the source from which a document was procured cannot be a reason for dismissing a writ petition as not maintainable., Also, in Sakiri Vasu v. State of Himachal Pradesh and Others [(2008) 2 SCC 409] the Supreme Court held that constitutional courts must discourage petitions under Article 226 of the Constitution of India to monitor the investigation or to register a crime. However, the principle of availability of alternative remedies is a rule of discretion. In appropriate cases the High Court of Kerala can, especially when public interest demands, decide to issue appropriate directions as the circumstances may warrant. The rule of discretion based on the principle of alternative remedy cannot be raised by respondents to throw out a lis at the threshold, especially in a case where allegations of far‑reaching consequences are made. Of course, the High Court of Kerala can base its conclusion on the existence of alternative remedies to dismiss a writ petition. Therefore those two objections are also not sustainable in the present scenario to dismiss the writ petition as not maintainable., Another objection raised is that the fact in issue in this writ petition is covered by two other judgments of the High Court of Kerala and, being judgments of the Division Bench, the petitioner cannot maintain a fresh writ petition. The aforesaid objection being substantial requires detailed consideration., In the decision in Kunga Nima Lepcha and Others v. State of Sikkim and Others [(2010) 4 SCC 513] it was observed that the High Court of Kerala must always be wary of the implication of a direction to register a crime and to conduct an investigation against a particular person as the consequences could be drastic, especially when the person against whom such an order is issued is a high‑ranking functionary in one of the organs of the State. It was observed that a direction of far‑reaching nature could be misused by political parties for their vested interests, and therefore the High Court of Kerala must be cautious in issuing directions when high‑ranking constitutional functionaries are involved. The High Court of Kerala further noted that a constitutional court could not be used as a forum for playing political tricks., Further, in Manohar Lal Sharma v. Union of India and Others [(2017) 11 SCC 731] the Supreme Court observed that the Supreme Court has to be on guard while ordering an investigation against important constitutional functionaries or any person in the absence of some cogent legally cognizable material., With the caution required in a case of this nature, especially when allegations are levelled against the incumbent Chief Minister of the State and the former Speaker of the Assembly, it is apposite to note the two judgments referred by the learned Advocate General as binding precedents to this lis. In the decision in Michael Varghese v. Honourable Pinarayi Vijayan, Chief Minister of Kerala and Others [(2020) SCC Online Ker 2794] and in Michael Varghese v. Pinarayi Vijayan and Others [(2020) 5 KHC 581] the High Court of Kerala dismissed writ petitions seeking directions for setting the criminal law in motion against the Chief Minister of Kerala in relation to the gold smuggling case and other scams. The Division Bench, after exhaustively considering the matter, held that the remedies evolved by writ jurisdiction are of an extraordinary nature and the circumstances did not warrant issuance of the directions sought., The aforesaid two cases relate to and include the very same issue in this lis. Revelations allegedly made by Ms. Swapna Suresh and Sri P. S. Sarith are the basis of all the writ petitions. After considering the nature of the revelations, a Division Bench of the High Court of Kerala dismissed both those writ petitions., Petitioner claims practically the same relief as in the two writ petitions mentioned above. Those writ petitions also sought relief of a fair and impartial investigation into the allegations of gold smuggling and other scams by the different investigating agencies. Though the writ petitioner herein is different from the earlier writ petitions, that by itself is not a reason to entertain this writ petition or ignore the two Division Bench judgments of the High Court of Kerala. When a public cause is sought to be agitated by a person and the same is rejected after detailed consideration, it is not open for another member of the public to agitate the very same issue merely by a change in the name of the petitioner. If another member of the public is aggrieved by such a judgment, his remedy is generally to seek a review of that judgment in accordance with law. Otherwise, there can be a multitude of litigations, which can even derail the administration of justice. Therefore caution has to be adopted before entertaining such writ petitions. In view of the earlier judgments referred to above, I am of the view that the preliminary objection raised by the learned Advocate General has merit and the writ petition is liable to be dismissed., Notwithstanding the above, the High Court of Kerala must be circumspect before denying relief on the basis of technicalities. The nature of reliefs claimed and the merit of the allegations can also be probed into in appropriate cases. In this context the observations of the Supreme Court in National Confederation of Officers Association of Central Public Sector Enterprises and Others v. Union of India and Others (2022) 4 SCC 764 are relevant., Therefore, notwithstanding the non‑maintainability of this writ petition, it is pertinent to mention that the Standing Counsel for the Customs Department submitted that based upon Exhibit P1 show‑cause notice, where a reference is made to the involvement of high constitutional functionaries, the Customs had questioned the witnesses and later filed two complaints as C.C. No.1013 of 2021 relating to gold smuggling and C.C. No.704 of 2022 relating to illegal import of foreign currency, both before the Additional Chief Judicial Magistrate’s Court, Ernakulam., When the Customs, pursuant to the show‑cause notice, conducted an investigation and filed complaints based on the materials collected, a direction to conduct a further investigation into the involvement of other persons ought not to be indulged in by the High Court of Kerala in the exercise of jurisdiction under Article 226 of the Constitution, unless there are exceptional circumstances. Except for assumptions and surmises, no material has been produced by the petitioner to countenance such exceptional circumstances. The complaints already filed are under the Customs Act and are pending consideration., As mentioned earlier, there are no materials available to arrive at a conclusion in this writ petition that the decision to proceed only against the persons mentioned in C.C. No.702 of 2022 and C.C. No.1073 of 2021 is based on any wrong conclusion or faulty investigation. Further, there are sufficient provisions under law to add parties in case any offence is revealed later as having been committed by any person. Therefore the first relief claimed by the petitioner does not arise for consideration even on merits., The learned Central Government Counsel also submitted that, pursuant to the revelation of gold smuggling, a case had been registered as ECIR No.31/2020 and a few persons have already been arrested. It was also submitted that prosecution has been initiated under the Prevention of Money Laundering Act, 2002, as S.C. No.6160 of 2020 on the files of the Special Court. The Central Government Counsel further submitted that another crime has also been registered by the Enforcement Directorate as ECIR No.9/2021 and the investigation is being continued., In view of the launching of the case as S.C. No.6160 of 2020 before the Special Court and the continuing investigation as ECIR No.9/2021, the relief of a fair and just investigation and for monitoring of the investigation cannot arise. Yet again, no materials are available to assume that the investigation is not being conducted properly. Other than assumptions that the investigation is not being conducted properly, the petitioner has not produced any material before the High Court of Kerala to arrive at a conclusion that the investigation would proceed contrary to law., On an appreciation of the above circumstances, it is evident that even the very apprehension expressed by the petitioner regarding the non‑conduct of a fair and proper investigation is without any basis. The Customs as well as the Enforcement Directorate have conducted or are conducting proper investigations. There are also no reasons to assume that if the involvement of any person is revealed in the investigation, they will not be proceeded against. For, the dictum \Be you ever so high, the law is above you\ applies with equal vigour to all, irrespective of status or position. In view of the above, the writ petition is dismissed.
|
id_1656
| 0
|
Criminal Petition Nos. 4819, 4843, 4844, 4867, 4938 and 5384 of 2020 dated 19-01-2021. Petitioners: Chekka Guru Murali Mohan and others. Respondents: The State of Andhra Pradesh through Station House Officer, Criminal Investigation Department, Police Station, Mangalagiri, Guntur District, represented by the Public Prosecutor, High Court of Andhra Pradesh and others. Counsel for the petitioners: Sri Siddardha Luthra, Learned Senior Counsel; Sri Posani Venkateswarlu, Learned Senior Counsel; Sri K. S. Murthy; Sri Ginjupalli Subba Rao; Ms. S. Pranathi; Sri A. K. Kishore Reddy; Sri M. V. Subba Reddy. Counsel for the first respondent – State: Learned Advocate General and Learned Public Prosecutor. Counsel for the second respondent – de facto complainant: Sri O. Kailashnath Reddy., This batch of Criminal Petitions, filed under Section 482 of the Criminal Procedure Code, seeks quash of the common First Information Report in Crime No. 49 of 2020 of the Criminal Investigation Department, Andhra Pradesh, Amaravati, Mangalagiri, registered against the petitioners for offences punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code., A person named Sri Salivendra Suresh of Velagapudi village, a stranger to the sale transactions in question, lodged a report with Mangalagiri Police. The report alleges that the de facto complainant, a resident of Velagapudi village within the Capital Region Development Authority, was following news and debates in the Legislative Assembly relating to irregularities in lands situated within the capital area. After the bifurcation of the erstwhile State of Andhra Pradesh into the State of Telangana and the State of Andhra Pradesh, the Andhra Pradesh Reorganisation Act led to the constitution of the Sivaramakrishna Committee to decide the location of the capital of the residuary State. The then Chief Minister Sri Nara Chandrababu Naidu introduced the Capital Region Development Authority Act in December 2014 and declared that twenty‑five villages adjacent to the Krishna River would form the capital region., The report further alleges that prior to the official declaration, several persons with acquaintance to important government officials obtained information about the capital location and purchased lands within the Capital Region Development Authority area from local farmers deceptively. After July 2019, media reports indicated that persons close to the former government purchased lands in their own names and in the names of their companies on the basis of prior information about the capital city location, and that officials and political leaders purchased lands in their names and in benami names using black money within the Capital Region Development Authority region for paltry consideration, thereby gaining monetary benefit. The alleged conspiracy involved officials, political leaders and the purchasers., Verification of sale transactions on the website of the Registration Department revealed that Lalitha Super Specialty Hospital; Sri Thottempudi Venkateswara Rao, Cherukuri Tejaswi of North West Holdings Private Limited; Sri C. D. Murali Mohan and Sri B. V. R. Sarma of Vertex Homes Private Limited; Gayathri Realtors Limited, Chennai; Smt. Kilaru Srihasa, wife of Kilaru Rajesh, a close associate of Sri Nara Chandrababu Naidu and Sri Nara Lokesh; and Good Life Estates, Vijayawada (petitioners herein) purchased vast extents of land in the capital region and nearby areas. The de facto complainant alleges that before the official declaration, government officials and political leaders clandestinely disclosed the capital location to their kith and kin, leading to the purchase of lands from farmers who were subsequently cheated and deceived., The report was lodged on 07‑09‑2020 at about 13:30 hours. An entry was made in the General Diary by the police. Following instructions of the Additional Deputy General of Police, Criminal Investigation Department, a preliminary enquiry was ordered. Sri R. S. Kishore Kumar, Inspector of Police, CID, Regional Office, Vijayawada, conducted the enquiry and submitted a report on 16‑09‑2020. The report records that Marella Nagi Reddy of Kaza village stated that in June 2014 Chilakapati Srinivas of Bethampudi village approached him to sell his land to Good Life Estates Private Limited, which he refused. Later, under pressure, he sold the land for Rs. 40.00 lakhs to Good Life Estates Private Limited represented by K. Venkateswarlu and J. Srinivasa Rao. After the government announced the capital location at Thulluru, the land value increased. The Inspector also examined Pandi Hanumantha Rao of Nehru Nagar, Guntur, who sold his land in Namburu village to V. V. R. Varma and C. V. Murali Mohan, representatives of Vertex Homes Private Limited, after the capital area was announced, leading to an increase in land value. The purchasers allegedly threatened the sellers with dire consequences for questioning the non‑disclosure of the capital location., Based on the preliminary enquiry report dated 16‑09‑2020, which disclosed a cognizable offence, the First Information Report was registered as per the instructions of the Additional Deputy General of Police, CID, Andhra Pradesh, Mangalagiri, in Crime No. 49 of 2020 for offences punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code. The case is currently under investigation., The petitioners, who are shown as accused in the First Information Report, seek quash of the common First Information Report on the ground that, even if the facts are taken at face value, they do not constitute any offence punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code and that allowing the proceedings to continue would amount to abuse of the process of law., The Learned Public Prosecutor appearing for the State filed a counter‑affidavit and an additional counter‑affidavit along with material papers opposing the petitioners' claim for quash. The second respondent, the de facto complainant, also filed a counter‑affidavit, which is a verbatim reproduction of the First Information Report. The pleas taken in the counter‑affidavits are addressed by referring to the elaborate arguments presented by the Learned Advocate General on behalf of the State, to avoid repetition., When these Criminal Petitions came up for final hearing before the High Court of Andhra Pradesh, the Court heard Sri Siddardha Luthra, Learned Senior Counsel; Sri Posani Venkateswarlu, Learned Senior Counsel; and other learned counsel for the petitioners, namely Sri K. S. Murthy, Sri Ginjupalli Subba Rao, Ms. S. Pranathi, Sri A. K. Kishore Reddy and Sri M. V. Subba Reddy, as well as the Learned Advocate General assisted by the Learned Public Prosecutor for the State. Sri O. Kailashnath Reddy, Learned Counsel for the de facto complainant, also appeared, and written submissions filed by the Learned Public Prosecutor were considered., Learned counsel for the petitioners, led by Sri Siddardha Luthra, vehemently contended that the facts do not constitute any offence punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code. They submitted that many petitioners are engaged in real‑estate and construction businesses and that purchasing land for a valid consideration under registered sale deeds does not amount to the commission of any offence., The petitioners further contended that news relating to the location of the capital for the newly carved out State of Andhra Pradesh, situated between Krishna District and Guntur District adjacent to the Krishna River, has been in the public domain since the Andhra Pradesh Reorganisation Act was passed in March 2014. They pointed out that the then Chief Minister publicly announced on 09‑06‑2014 that the government was contemplating locating the new capital between Krishna District and Guntur District, and that this information has been widely published in newspapers. Consequently, they argued that purchasing land after acquiring such public information does not constitute an offence, and no criminal liability can be attached to the petitioners., The petitioners argued that launching criminal prosecution on the basis of a vague report lodged by a stranger, allegedly influenced by vested interests, and on statements given by sellers six years after the sale, amounts to abuse of the process of law. They prayed for quash of the First Information Report on the ground that criminal prosecution in the present facts and circumstances is not legally maintainable., The petitioners also submitted that the de facto complainant, being a stranger to the sale transactions and having suffered no loss, has no locus standi to lodge the report with the police and initiate criminal prosecution against the petitioners., The Learned Advocate General, assisted by Sri R. Srinivasa Reddy, Learned Public Prosecutor for the State of Andhra Pradesh, contended that the First Information Report reveals that the petitioners obtained prior information from top government officials and political leaders about the exact location of the capital area and the proposed villages, and that they purchased land without disclosing this information to the sellers, which amounts to cheating under Section 415 of the Indian Penal Code. The Advocate General argued that there is a conspiracy between the petitioners, government officials and political leaders, and that the facts prima facie make out offences punishable under Sections 420 and 120‑B of the Indian Penal Code., The Advocate General further submitted that, under Section 55(5)(a) of the Transfer of Property Act, a buyer is bound to disclose to the seller any fact concerning the nature or extent of the seller's interest in the property that the buyer is aware of and which materially increases the value of such interest. Since the petitioners, as buyers, did not disclose the impending capital location, the Advocate General argued that this constitutes dishonest concealment of fact within the meaning of the explanation appended to Section 415 of the Indian Penal Code, thereby making a clear case under Section 420 of the Indian Penal Code., The Advocate General also contended that employees in the secretariat who prepared Government Orders related to the Capital Region Development Authority gave statements under Sections 161 and 164 of the Criminal Procedure Code indicating irregularities in the preparation of draft Government Orders, which prima facie establish illegalities and conspiracy. He further submitted that the facts establish an offence of insider trading arising from the conspiracy between higher officials, political leaders and the petitioners, and prayed for dismissal of the Criminal Petitions., Learned Senior Counsel Sri Siddhardh Luthra rebutted the Advocate General's reliance on Section 55(5)(a) of the Transfer of Property Act, stating that the provision imposes an obligation only to disclose a fact that materially increases the value of the seller's interest, not information about the reason for purchase or future benefits. He argued that non‑disclosure of the capital location does not amount to concealment of a material fact under the explanation to Section 415 of the Indian Penal Code, and that the subsequent increase in property value cannot be a ground for prosecution under Section 420 of the Indian Penal Code. He further cited Section 55(vi)(a) of the Transfer Property Act, which entitles the buyer to benefit from any increase in value after ownership passes, thereby negating any claim of cheating by the sellers., Senior Counsel also contended that the offence of insider trading is not defined under any provision of the Indian Penal Code and relates only to fraud in the sale and purchase of securities and bonds, being punishable under the Securities and Exchange Board of India Act, 1992. He argued that invoking insider trading theory to prosecute the petitioners under the Indian Penal Code is legally unsustainable. He further observed that the alleged irregularities in the preparation of Government Orders, as reflected in the statements under Section 164 of the Criminal Procedure Code, at best show contravention of business rules and do not incriminate the petitioners, who had no involvement in the preparation of those orders., Having regard to the magnitude of the issues raised by the prosecution and the petitioners, the Court considered that the findings recorded in this judgment will have far‑reaching consequences on all sale transactions that have already taken place and those that may take place in the future. The Court gave earnest and thoughtful consideration to the rival contentions raised by both parties., The Court noted that arguments suggesting that the present Government is seeking to harass the petitioners for political vengeance are irrelevant to the determination of the case. The Court must decide the Criminal Petitions dispassionately, adhering strictly to questions of fact, questions of law, and the interpretation of the relevant legal provisions, to determine whether the facts, even if taken at face value, constitute offences punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code. If the facts prima facie constitute any of these offences, the investigation shall continue; otherwise, the continuation of criminal proceedings would amount to abuse of the process of law and the First Information Report should be quashed., The Court first addressed the locus standi of the de facto complainant. It is a settled proposition of law that the concept of locus standi to set criminal law into motion is alien to criminal law. Any person who obtains information regarding the commission of a cognizable offence is entitled to bring the same to the notice of the police for investigation, except in the limited cases enumerated in Sections 195 to 199 of the Criminal Procedure Code. The offences for which the petitioners are sought to be prosecuted do not fall within those exceptional categories. Accordingly, the de facto complainant, although a stranger to the sale transactions and having suffered no loss, has the legal right to lodge the report and set the criminal law into motion.
|
id_1656
| 1
|
Legal position in this regard is not res nova and the same has been authoritatively very well settled. The Constitutional Bench of the Supreme Court of India in the case of A.R. Antulay v. Ramdas Sriniwas Nayak and Others had an occasion to deal with this concept of locus standi of a person to set the criminal law into motion. The Supreme Court of India at paragraph 6 of the judgment held as follows: It is a well recognised principle of criminal jurisprudence that anyone can set or put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. The scheme of the Criminal Procedure Code envisages two parallel and independent agencies for taking criminal offences to Court. Even for the most serious offence of murder, it was not disputed that a private complaint can not only be filed but can be entertained and proceeded with according to law. Further held as follows: Locus standi of the complainant is a concept foreign to criminal jurisprudence save and except that where the statute creating an offence provides for the eligibility of the complainant, by necessary implication the general principle gets excluded by such statutory provision., While Section 190 of the Criminal Procedure Code permits anyone to approach the Magistrate with a complaint, it does not prescribe any qualification the complainant is required to fulfil to be eligible to file a complaint. But where an eligibility criterion for a complainant is contemplated, specific provisions have been made such as those found in Sections 195 to 199 of the Criminal Procedure Code. These specific provisions clearly indicate that in the absence of any such statutory provision, a locus standi of a complainant is a concept foreign to criminal jurisprudence. In other words, the principle that anyone can set or put the criminal law in motion remains intact unless contraindicated by a statutory provision., Also held that the general principle of nearly universal application is founded on a policy that an offence that is an act or omission made punishable by any law for the time being in force (see Section 2(n) of the Criminal Procedure Code) is not merely an offence committed in relation to the person who suffers harm but is also an offence against society. Society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the State representing the people which would exclude any element of private vendetta or vengeance. Punishment of the offender in the interest of society being one of the objects behind penal statutes enacted for the larger good of society, the right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a straight‑jacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception., The Bombay High Court, Nagpur Bench in the case of Shriram Krishnappa Asegaonkar v. State of Maharashtra held at paragraph 12 of the judgment as follows: There is, therefore, no doubt that the complaint of offence of cheating punishable under Section 420 of the Indian Penal Code can be filed by any person to set the law in motion and that it is not necessary that such a complaint should be filed by only the person deceived., In arriving at the said conclusion, the Bombay High Court relied on the judgment of the Division Bench of the Calcutta High Court in the case of Mahadeolal v. Emperor wherein the Calcutta High Court held that the prosecutor in a criminal case is really the Crown and the complainant merely sets the machinery of the laws in motion, and, in a case of cheating it has been held that it is not necessary that the complainant should have been the person deceived. In that case a pleader was deceived by a letter of cancellation of contract and the complaint was filed by a servant of a firm who became aware of the deception. It was held that the prosecution initiated by the servant of a firm is maintainable., So, in view of the law enunciated in the aforesaid judgments, the contention of the petitioners that the de facto complainant has no locus standi to initiate criminal prosecution by way of lodging a report with the police has no merit and it is liable to be rejected. The cavil is answered accordingly in favour of the prosecution., However, though the plea relating to locus standi raised by the petitioners is not legally sustainable, justification on the part of the stranger to the alleged sale transactions, who is the de facto complainant, in lodging a report with the police initiating criminal prosecution against the petitioners after a lapse of six years and its genuineness is certainly a relevant factor which requires consideration and will be adverted to at the appropriate time while dealing with the same during the course of discussion of this judgment., Ferreting out the origin and history of the offence of insider trading reveals that basically the offence relates to trading of a public company's stock or other securities such as bonds or stock options based on material, non‑public information about the company. In various countries, some kinds of trading based on insider information is illegal because it is seen as unfair to other investors who do not have access to the information, as the insider could potentially make larger profits than a typical investor. The study on the subject reveals that the rules governing the offence are complex and vary significantly from country to country. The extent of enforcement also varies. Trading by specific insiders, such as employees, is commonly permitted as long as it does not rely on material information not in the public domain. Rules prohibiting or criminalising insider trading on material non‑public information exist in most jurisdictions, but the details and the efforts to enforce them vary considerably. In the United States, Sections 16(b) and 10(b) of the Securities Exchange Act, 1934 directly and indirectly address insider trading. The United States Congress enacted this law after the stock market crash. In the European Union and the United Kingdom, trading on non‑public information is, under the rubric of market abuse, subject at a minimum to civil penalties and to possible criminal penalties as well. The United Kingdom's Financial Conduct Authority has the responsibility to investigate and prosecute insider dealing, defined by the Criminal Justice Act, 1993. Japan enacted its first law against insider trading in 1988. The Australian legislation arose out of the 1989 parliamentary committee report which recommended removal of the requirement that the trader be connected with the body corporate., Thus, the history pertaining to the offence clearly reveals that the laws are brought in mainly to curb insider trading in the stock market. The offence is essentially an offence relating to trading of public company stocks or other securities such as bonds or stock options based on material, non‑public information about the company. Absolutely, it has nothing to do with the sale and purchase of land which is an immovable property and private sale transactions wholly unrelated to the affairs of the stock market. It is found that insiders in the company have been furnishing non‑public information unauthorisedly to some investors relating to sale of shares, bonds and other securities, resulting in loss to other investors and unfairness; to curb these illegal acts, various countries have enacted legislation., Similarly, India also brought into force the Securities and Exchange Board of India Act, 1992 to curb the offence of insider trading in the stock market in India., As per the statement of objects and reasons of the enactment, SEBI was established in 1988 through a government resolution to promote orderly and healthy growth of the securities market and for investor protection. SEBI has been monitoring the activities of stock exchanges, mutual funds, merchant bankers, etc., to achieve these goals. As the capital market has witnessed tremendous growth, characterised particularly by increasing public participation, it is felt that investor confidence can be sustained largely by ensuring investor protection. With this end in view, the Government decided to vest SEBI immediately with statutory powers required to deal effectively with all matters relating to the capital market. The Securities and Exchange Board of India Act, 1992 was introduced with the above objective, passed by both Houses of Parliament, received the assent of the President on 4th April 1992 and came into force on 30‑01‑1992., Therefore, insider trading in India is an offence according to Sections 12‑A and 15‑G of the SEBI Act. The offence is committed when a person with access to non‑public, price‑sensitive information about the securities of the company subscribes, buys, sells, or deals, or agrees to do so or counsels another to do so as principal or agent. Price‑sensitive information is information that materially affects the value of the securities. Section 12‑A deals with the acts which constitute insider trading relating to sale of any securities listed or proposed to be listed on a recognised stock exchange and Section 15‑G deals with imposing penalty for committing the offence., Therefore, insider trading is only made an offence in India under the SEBI Act, 1992 and it essentially deals with the sale and purchase of securities in the stock market based on non‑public material information. It is a special enactment which specifically and exclusively deals with offences relating to sale of securities in the stock market. Insider trading is not made an offence specifically under the Indian Penal Code. No provisions akin to Sections 12‑A and 15‑G of the SEBI Act are incorporated in the Indian Penal Code by Parliament relating to private sale transactions of land, which is an immovable property, by invoking the concept of insider trading. Therefore, the offence of insider trading is totally alien to our criminal law under the Indian Penal Code. It is a concept or offence totally unknown to our criminal law under the Indian Penal Code., When the concept of insider trading is not made applicable to purchase of any immovable property such as private lands and is confined to purchase of securities and bonds under the SEBI Act, it cannot be contextually or relatively applied to criminalise private sale transactions of land in the guise of insider trading. The provisions of Sections 12‑A and 15‑G of the SEBI Act cannot be read into and imported into the provisions of the Indian Penal Code, much less into Section 420 of the Indian Penal Code. It is not the intention of Parliament to attribute criminal liability to private sale transactions of immovable property either under Section 420 or any other provision of the Indian Penal Code. Therefore, the Supreme Court of India has absolutely no hesitation to hold that the concept of insider trading, which deals with illegal sale of securities and bonds, cannot be applied to private land transactions to criminalise them under any provision of the Indian Penal Code, including Section 420. It is legally impermissible to prosecute the petitioners for offences under Sections 420, 406, 409 and 120‑B of the Indian Penal Code by applying the concept of insider trading., The learned Advocate General would contend that the concept of insider trading is to be relatively applied to the present facts as they are somewhat akin to the offence envisaged under the SEBI Act. By that argument, the Advocate General suggests that, as the allegations in the First Information Report show that the petitioners obtained prior information from higher officials in the Government and political leaders regarding the exact location of the capital and thereby purchased the lands based on that information, the facts constitute an offence akin to insider trading in purchasing the lands. The Supreme Court of India is unable to accede to that contention. It has been discussed supra that insider trading essentially deals only with sale and purchase of securities and bonds based on non‑public material information under the special enactment aimed at protecting the capital market and instilling investor confidence. Therefore, when it is confined to securities, it cannot be read into the provisions of the Indian Penal Code, much less into Section 420. Parliament never intended to make private land transactions an offence by applying the concept of insider trading. Consequently, the contention holds no water., Article 19(1)(f) and Article 31 of the Constitution of India are part of Chapter III dealing with fundamental rights of a citizen. Article 19(1)(f) guaranteed the right to acquire, hold and dispose of property. Article 31 provided that no person shall be deprived of his property save by authority of law. Therefore, in view of those articles, the right to property was a fundamental right. By the 44th Constitutional Amendment, both Article 19(1)(f) and Article 31 were repealed with effect from 20‑06‑1979, so the right to property ceased to be a fundamental right. However, the right to acquire property continues to be a constitutional right, a legal right and also a human right. A provision akin to Article 31 has been incorporated under Article 300‑A in Chapter IV of the Constitution under the rubric of right to property., The Supreme Court of India, in the case of D.B. Basnett v. The Collector, East District, Gangtok, Sikkim, held at paragraph 14 of the judgment: We may note that even though rights in land are no longer a fundamental right, they remain a constitutional right under Article 300‑A of the Constitution of India., The Supreme Court of India, in the case of Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd., held that the right to property is now considered to be not only a constitutional right but also a human right. Under Article 17 of the Universal Declaration of Human Rights, 1948, adopted by the United Nations General Assembly, (i) Everyone has the right to own property alone as well as in association with others. (ii) No one shall be arbitrarily deprived of his property. Earlier human rights focused on health, livelihood, shelter and employment, but now property rights are incorporated within the definition of human rights. Even the claim of adverse possession has to be read in consonance with human rights., It was also held that, while property has ceased to be a fundamental right, it is given express recognition as a legal right, with the provision that no person shall be deprived of his property save in accordance with law., In Tuka Ram Kana Joshi v. Maharashtra Industrial Development Corporation the Supreme Court reiterated that the right to property is now considered to be not only a constitutional or statutory right, but also a human right. Though it is not a basic feature of the Constitution or a fundamental right, the right to property is part of the new dimensions where human rights are regarded as individual rights such as the right to health, livelihood, shelter and employment, and these rights are gaining a greater multifaceted dimension., From the foregoing exposition of law, it is clear that a citizen has a legal and constitutional right to acquire and hold property. The right of an individual to hold property, apart from being a legal right, has also been held to be a human right., Since the prosecution seeks to criminalise the private sale transactions validly entered into by the petitioners as buyers with their sellers for a valid sale consideration under registered sale deeds by which they acquired the landed property, the right of the petitioners as citizens to acquire property as part of their constitutional, legal and human rights assumes significance. Therefore, for that limited purpose, the legal position has been dealt with in this case., In the background of the aforesaid legal position that the right to property is a constitutional and legal right of a citizen, it must now be seen whether buying land without informing the seller of the purpose of purchase or latent advantage that the buyer may derive, which is within the knowledge of the buyer, would amount to an offence under Section 420 of the Indian Penal Code and also under Sections 406 and 409 of the Indian Penal Code., Before embarking upon an enquiry on this vital aspect, to have a comprehensive understanding of the prosecution case, a few relevant facts need to be mentioned to clarify the substratum of the prosecution case., The erstwhile combined State of Andhra Pradesh, originally constituted under the States Reorganisation Act, 1956 with effect from 01‑01‑1956, was bifurcated into two states, the State of Telangana and the State of Andhra Pradesh, in 2014 as per the Andhra Pradesh Reorganisation Act, 2014. The enactment was passed by Parliament on 03‑03‑2014. Both states were formed with effect from 02‑06‑2014, the appointed day under the Act. In the General Assembly Elections held in April 2014 for the residuary State of Andhra Pradesh, the Telugu Desam Party came to power. Hyderabad, which was the capital of the erstwhile combined state, became the capital of Telangana. There is no capital city for the State of Andhra Pradesh; consequently the Government had to establish a capital city for the newly carved out state. The Government passed the Capital Region Development Authority Act (hereinafter called the Capital Region Development Authority Act) to build a capital city between the Krishna District and the Guntur District on the banks of the Krishna River, consisting of 25 villages in the designated region. Government Orders No. 252 and No. 254 were issued notifying the capital region on 30‑12‑2014. A concept of land pooling was introduced under the enactment to acquire lands from owners for establishing the capital city., While, after the Andhra Pradesh Reorganisation Act was passed on 03‑03‑2014, speculation regarding the location of the capital between the Krishna and Guntur districts led various people to purchase lands in that area, the present petitioners are among those who purchased lands there. Some of the lands purchased are within the capital region and most are beyond the capital region and also beyond the proposed inner ring road. The location of these lands purchased by the petitioners is identified as per the plans submitted by the prosecution along with the case diary file., The main case of the prosecution is that the petitioners who purchased the lands during June 2014 to December 2014 obtained prior information regarding the exact location of the capital city unauthorisedly from higher officials in the Government and political leaders. Based on that information they purchased the lands from the owners without disclosing to the owners that the capital city was to be located in that area, thereby cheating the sellers and deriving monetary benefit from the increase in land value after the capital location was officially announced by the Government Orders on 30‑12‑2014. This resulted in loss to the owners who sold the land oblivious to the forthcoming capital city., Therefore, in light of the prosecution version, the crucial question is whether, even if taken at face value, the conduct constitutes any offence punishable under Sections 420, 409, 406 and 120‑B of the Indian Penal Code., For better appreciation, Sections 420 and 415 of the Indian Penal Code are reproduced here for ready reference: S.420. Cheating and dishonestly inducing delivery of property. Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years and shall also be liable to fine., Section 415 of the Indian Penal Code defines cheating as follows: S.415. Cheating. Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat. Explanation: A dishonest concealment of facts is a deception within the meaning of this section., It is to be noticed that certain illustrations are given below Section 415 illustrating instances of cheating and the facts of the case do not fall within any of those illustrations., A combined reading of Sections 415 and 420 makes it clear that the necessary ingredients to constitute an offence of cheating under Section 420 are: (i) There must be a false representation made by the accused to the person deceived, knowing fully that the representation is false at the time of making it; (ii) the accused must induce the deceived person fraudulently or dishonestly to deliver any property to him or to any person based on the false representation; (iii) consequently it must result in loss or damage to the person, in body, mind or property., Thus, deception is the quintessence of cheating. To hold a person guilty of cheating, there must be an allegation that a false representation was made knowingly, that the accused induced the deceived person to deliver property, and that the deceived person suffered damage or harm. The prosecution case does not allege that the petitioners made any false representation to the owners at the time of sale or induced them to deliver the property. Hence, the basic ingredients required to constitute an offence under Section 420 are conspicuously absent., It is also to be noticed that the alleged deception must be fraudulent and the alleged inducement must be dishonest in order to attract the offence under Section 420 read with Section 415, in view of the express language employed in the definition of cheating. Negative terms such as dishonest and fraudulent are used to attribute criminal liability. No act can be construed as an offence unless it is committed dishonestly and fraudulently. Considering the cardinal principle that there can be no offence unless it is done with the requisite mens rea, that is, guilty intention, the qualifying words are essential., Section 24 of the Indian Penal Code defines the term dishonestly: S.24. Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly., Section 23 of the Indian Penal Code defines wrongful gain and wrongful loss: S.23. Wrongful gain – the gain by unlawful means of property to which the person gaining is not legally entitled. Wrongful loss – the loss by unlawful means of property to which the person losing it is legally entitled. A person is said to gain wrongfully when he retains or acquires property unlawfully, and to lose wrongfully when he is wrongfully kept out of or deprived of property., Thus, a comprehensive definition of wrongful gain and wrongful loss, required to prove a dishonest act under Section 24, is given. The word wrongful means prejudicially affecting a party in some legal right. For either wrongful loss or gain, the property must be lost to the owner, or the owner must be wrongfully kept out of it., Section 25 of the Indian Penal Code defines fraudulently: S.25. Fraudulently – a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise., The literal meaning of defraud is almost synonymous with deception and hoodwink. When the petitioners have acquired the property lawfully by paying valid sale consideration to the sellers under registered sale deeds, it cannot be said that any element of fraud or deception is involved., Therefore, when the facts are viewed in light of the definition of dishonestly under Section 24 and the definitions of wrongful gain and loss under Section 23, the Supreme Court of India is at a loss to understand what dishonest act was committed by the petitioners, what wrongful gain or loss is involved, how the petitioners gained property by unlawful means to which they are not entitled, and how they deprived the sellers of property by unlawful means causing wrongful loss., It is relevant to note that, as per the recitals in the sale deeds, the sellers voluntarily offered to sell their lands to the petitioners to meet family and legal necessities, and the petitioners accepted the offer and purchased the lands by paying valid sale consideration under registered sale deeds. Therefore, it is a lawful sale transaction and it cannot be said that the petitioners had wrongful gain by unlawful means of property to which they are not legally entitled.
|
id_1656
| 2
|
Similarly, as the sellers have sold the lands under registered sale deeds after receiving valid sale consideration to a tune of lakhs of rupees, no wrongful loss is also caused to them by unlawful means by the petitioners. The landed property was acquired lawfully that is by lawful means by the petitioners. So, it cannot be said under any stretch of reasoning that the petitioners have wrongfully acquired the property. Therefore, absolutely no act of dishonesty is involved in the transaction., However, the learned Advocate General invoked the Explanation appended to Section 415 of the Indian Penal Code which says that a dishonest concealment of fact is a deception within the meaning of this section and thereby contended that the petitioners did not inform the sellers of the land that the capital is going to come in the said area where the said lands are located and suppressed the fact that they have purchased the lands. He argued that if the petitioners had informed the sellers that the capital is going to come within that area, the sellers might not have agreed to sell the said lands and consequently, as there is a subsequent increase in the value of the land after the location of the capital was notified by a Government Order on 30.12.2014, the sellers are put to monetary loss due to the acts of the petitioners in concealing the said fact in buying the land. As such, the facts of the case attract the definition of cheating under Section 415 of the Indian Penal Code and constitute an offence under Section 420 of the Indian Penal Code. Thus, the learned Advocate General, with his adroit eloquence, made his best effort to convince the Supreme Court of India that, in light of the Explanation appended to Section 415 of the Indian Penal Code, a case under Section 420 of the Indian Penal Code is constituted., I am unable to persuade myself to countenance the said contention raised by the learned Advocate General. In this context, it has to be seen whether it is necessary on the part of the buyer of the land to disclose the reason for buying the land, the purpose of purchasing the land, or any latent advantage which he may have in purchasing the land and which is within the knowledge of the buyer, to the seller at the time of entering into the sale transaction. Even if the petitioners had prior knowledge that there is a proposal to locate the capital city in the said area, are they legally bound to disclose or inform the seller of that fact and does its nondisclosure amount to dishonest concealment of fact as required under the Explanation appended to Section 415 of the Indian Penal Code? These are the paramount questions required to be determined in view of the above vital contention raised by the learned Advocate General., Before advert to the same, it is apposite to note that illustration (i) among the illustrations given below Section 415 of the Indian Penal Code clearly explains what amounts to concealment of fact. It reads: A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receives the purchase or mortgage money from Z. A cheats., Therefore, it is only concealment of such information or nondisclosure relating to a right in the land that amounts to dishonest concealment of material fact and not every extraneous information not relating to a right or interest of the seller in the land., Further, while answering the said question, it is relevant to note that a transaction relating to the sale of land between two persons is essentially a contract between the buyer and the seller. There would be an offer to sell the land and acceptance of the said offer to purchase the land between the two persons. It involves payment of valid sale consideration as per the terms and conditions adumbrated in their contract to complete the sale transaction. Therefore, it is essentially a civil transaction covered by the Indian Contract Act. There are certain rights and liabilities imposed on both the buyer and the seller under Section 55 of the Transfer of Property Act., The learned Advocate General, invoking Section 55(5)(a) of the Transfer of Property Act and placing heavy reliance on it, would contend that the petitioners, being the buyers of the land, are bound to disclose to the sellers that there is a proposal to locate the capital city in that area and that there is a likelihood of increase in the value of the land in future, and that failure to disclose amounts to dishonest concealment of material fact as contemplated under the Explanation appended to Section 415 of the Indian Penal Code. Section 55(5)(a) reads: the buyer is bound (a) to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest., A bare reading of the aforesaid provision makes it manifest that there is only a liability on the buyer to disclose to the seller any fact regarding the nature or extent of the seller’s interest in the property of which the buyer is aware and which he has reason to believe the seller is not aware, and which may materially increase the value of such interest. Therefore, the crucial question is whether the expression ‘nature or extent of the seller’s interest in the property’ comprehends information relating to the proposed location of the capital in the said land or latent advantage that the buyer may derive in future. It is also to be seen whether the buyer has a duty to disclose that there is a possibility of increase in the value of the land in the future. Certainly, that is not the intendment of Parliament under Section 55(5)(a) of the Transfer of Property Act. In the considered view of this Court, it does not cover the disclosure of information relating to latent advantage in respect of the land as per settled law., The nature of the duty of the buyer to disclose the facts within his knowledge relating to the interest of the seller in the property, as contemplated under Section 55(5)(a) of the Transfer of Property Act, has been succinctly explained by the famous jurist and author Mulla in the commentaries on the Transfer of Property Act, Ninth Edition, page 534, as follows: The rule matters only the title of the seller in respect of the property. Although the seller’s title is ordinarily a matter exclusively within his knowledge, there may be cases where the buyer has information which the seller lacks. In such a case, he must not make an unfair use of it. He must give the information to the seller. An English illustration is the case of Summers v. Griffiths where an old woman sold property at an undervalue believing that she could not make out a good title to it while the purchaser knew that she could. The purchaser was held to have committed a suppressio veri and the sale was set aside as fraudulent., The same case is also cited as an illustration to explain the nature of the duty of the buyer under Section 55(5)(a) of the Transfer of Property Act in the commentaries on the Law of Transfer of Property Act authored by G.C.V. Subbarao, Fourth Edition, page 1197., Therefore, the legal position is now made abundantly clear that the nature of the duty imposed on the buyer under Section 55(5)(a) of the Transfer of Property Act is only relating to the interest of the seller in his property which the buyer is aware of and the seller is not aware, and which is required to be disclosed by the buyer., This duty imposed on the buyer under Section 55(5)(a) does not embrace any information pertaining to latent advantages in respect of the land which the buyer is aware of and the seller is not aware of, and it does not cover such situation, in view of the law enunciated in various cases discussed herein and as per the opinion expressed by various jurists and authors based on decided case law., In the commentaries on the Law of Transfer of Property Act authored by G.C.V. Subbarao, Fourth Edition, page 1197, under the caption ‘Buyer’s liabilities before completion of sale’ while dealing with the requirement of disclosure of facts materially increasing the value under Section 55(5)(a) of the Transfer of Property Act, it is stated: Latent advantages need not be disclosed: a buyer is not bound to disclose latent advantages or communicate to his vendor facts which may influence his own judgment in purchasing the property. In Fox v. Mackreth (1788) 2 Bro. C.C. 400 = 29 E.R. 224, a knowing that there was a coal mine in the estate of B of which B was ignorant entered into a contract to purchase the estate of B for the price of the estate, without considering the mine. It was held that the contract could not be set aside on the ground of fraud since B, as the buyer, was not obliged from the nature of the contract to apprise the seller of the existence of the mine., This judgment in Fox v. Mackreth provides a complete answer to the vital contention raised by the learned Advocate General that the petitioners as buyers are bound to disclose to the sellers that the capital city is going to come in the said area while purchasing the land and that nondisclosure amounts to dishonest concealment of fact as contemplated under the Explanation appended to Section 415 of the Indian Penal Code., The observations made in Fox v. Mackreth are apt to consider to drive home the point involved in this case. It is observed: ‘The doubt I have is whether this case affords facts from which principles arise to set aside this transaction, which will not, by necessary application, draw other cases into hazard. And without insisting upon technical morality, I do not agree with those who say that where an advantage has been taken in a contract, which a man of delicacy would not have taken, it must be set aside; suppose for instance that A, knowing there to be a mine in the estate of B, of which B was ignorant, should enter into a contract to purchase the estate of B for the price of the estate, without considering the mine, could the court set it aside? Why not, since B was not apprised of the mine, and A was? Because B, as the buyer, was not obliged, from the nature of the contract, to make the discovery. It is therefore essentially necessary, in order to set aside the transaction, not only that a great advantage should be taken, but it must arise from some obligation in the party to make the discovery. The Court will not correct a contract merely because a man of nice honour would not have entered into it; it must fall within some definition of fraud; the rule must be drawn so as not to affect the general transactions of mankind.’, As per the above illustration, even if a buyer is aware of a coal mine in the seller’s land and buys the land without apprising the seller, for a valid price, it does not amount to fraud as the buyer has no legal obligation to inform the seller. When that is the clear legal position, the present case stands on a better footing, where the petitioners also have no legal obligation to inform the sellers that there is a proposal to locate the capital city in their area., Even in the commentaries on the Transfer of Property Act authored by Mulla, Ninth Edition, page 534, while dealing with the buyer’s duty of disclosure under Section 55(5)(a) of the Transfer of Property Act, it is stated that there is no doubt that the buyer is under no duty to disclose latent advantages and this is also the law in England as stated in the judgment of Lord Selborne in Coaks v. Boswell., In Coaks v. Boswell (1886) 11 App. Cas. 232, 235, it is held: ‘Every such purchaser is bound to observe good faith in all that he says or does, with a view to the contract, and (of course) to abstain from all deceit, whether by suppression of truth or by suggestion of falsehood. But inasmuch as a purchaser is (generally speaking) under no antecedent obligation to communicate to his vendor facts which may influence his own conduct or judgment when bargaining for his own interest, no deceit can be implied from his mere silence as to such facts, unless he undertakes or professes to communicate them. This, however, he may be held to do, if he makes some other communication which, without the addition of those facts, would be necessarily or naturally and probably misleading.’, While expressing the above opinion, jurist Mulla also referred to the judgment in Fox v. Mackreth, which held that the buyer need not disclose the existence of a coal mine of which the seller is unaware., The Supreme Court of the United States in Laidlaw et al. v. Organ (1817) SCC OnLine US SC 28 = 15 US 178 (1817) = 4 L.Ed.214 = 2 Wheat, speaking through Chief Justice Marshall, delivered the opinion that the intelligence of extrinsic circumstances which might influence the price of the commodity and which was exclusively within the knowledge of the vendee need not be communicated to the vendor. The court held that the vendee was not bound to communicate it., Therefore, considering the analogy in the aforesaid judgments of English cases and the American case, the legal position is manifestly clear that the information in the knowledge of the petitioners relating to the proposal of location of the capital in the area where the lands in question are purchased, even if true, need not be informed to the sellers and they have no legal obligation to disclose it at the time of purchase. Hence, it does not amount to dishonest concealment of fact as contemplated under the Explanation appended to Section 415 of the Indian Penal Code. It is also significant to note that it is not mere concealment of fact that is made an act of deception under the Explanation, but only dishonest concealment of fact. When there is no legal obligation to disclose, nondisclosure does not amount to dishonest concealment., In Karachi Municipality v. Bhojraj (1915) SCC OnLine Sind JC 6 = AIR 1915 Sind 21, the Court of Judicial Commissioner, Sind dealt with the Explanation to Section 415 of the Indian Penal Code. The accused executed a sale deed in favour of Karachi Municipality for certain land and received the price. It was later discovered that the land was mortgaged by the accused and other family members were interested. The accused was alleged to have suppressed the fact of mortgage. The Court held that no concealment of fact is dishonest unless there is a legal obligation to disclose. A defect in title is a material defect under Section 55(1)(a) of the Transfer of Property Act as per Haji Essa v. Dayabai. There is no duty on the seller to disclose these unless the buyer could not with ordinary care discover them. The Municipality could have ascertained the prior mortgage. The Court also held that cheating must refer to some false representation which induced the Municipality to agree to buy the land, and cited Emperor v. Bishen Das., In Emperor v. Bishen Das (1905) ILR 27 All 561, while dealing with Section 415 of the Indian Penal Code, it is held that sale of immovable property without mentioning encumbrances does not amount to cheating and the accused cannot be convicted on the ground that he omits to mention an encumbrance unless he was asked by the vendee and said it was unencumbered or represented it as unencumbered., In this context, it is apt to refer to the observations made by the Court in the said judgment which have direct impact on the present case. It is held that the Explanation appended to Section 415 lays down that a dishonest concealment of facts is a deception within the meaning of the section. The definition of ‘dishonestly’ in Section 24 of the Code shows that a dishonest act is done with the intention of causing wrongful gain to one person or wrongful loss to another. Wrongful gain is a gain by unlawful means of property to which the person gaining is not legally entitled; wrongful loss is the loss by unlawful means of property to which the person losing it is legally entitled. The unlawfulness of the means used is a necessary element in criminal dishonesty. In the present instance, there is nothing unlawful in the means used by the applicant. There was no obligation under Section 55 of the Transfer of Property Act to disclose the mortgage, as the mortgage had been effected by a registered instrument and the vendee could with ordinary care have ascertained its existence. Had the vendor falsely represented the property as unencumbered, the case would have been different. The Court further held that dishonest concealment of facts referred to in the Explanation to Section 415 is a dishonest concealment of facts which it is the duty of the person concealing them to disclose to the person with whom he is dealing. The same is the law in England. In Horsfall v. Thomas (1862) 31 L.J., 322, Bramwell, B, said: ‘The fraud must be committed by the affirmation of something not true within the knowledge of the affirmer or by the suppression of something which is true and which it was his duty to make known. Where there is a concealment of a fact I am of opinion that there is neither fraud nor dishonesty within the meaning of the Criminal Law unless there is a duty imposed by law as between the accused and the person with whom he is dealing to make that fact known.’ For these reasons, the conviction under Section 417 of the Indian Penal Code was quashed., Thus, from the conspectus of the law as expounded in all the above Indian cases and U.K. and U.S. cases with reference to the Explanation appended to Section 415 of the Indian Penal Code and the legal obligations and liabilities under Section 55 of the Transfer of Property Act, the legal position is manifestly clear that when there is absolutely no legal obligation on the part of the buyer to disclose the said fact to the seller at the time of sale of the land, it does not amount to dishonest concealment of fact as contemplated under the Explanation appended to Section 415 of the Indian Penal Code., The mere fact that there is a possibility of increase in the value of the land subsequent to the sale also cannot afford a ground to prosecute the buyer for the offence of cheating., The contention of the learned Senior Counsel Sri Siddhardh Luthra, appearing for one of the petitioners, merits consideration. He would contend that Section 55(6) of the Transfer of Property Act envisages that the buyer is entitled to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof, where the ownership of the property was passed to him. Therefore, when the petitioners lawfully became owners of the lands, they are legally entitled to the subsequent benefit of any improvement or increase in the value of the property. Consequently, the alleged omission to disclose the fact cannot be said to be fraudulent as stated in the last part of Section 55 of the Transfer of Property Act, which was invoked by the learned Advocate General., Illustration (d) to Section 17 of the Indian Contract Act, which defines fraud, reads: A and B, being traders, enter upon a contract. A has private information of a change in prices which would affect B’s willingness to proceed with the contract. A is not bound to inform B., The Explanation appended to Section 17 of the Indian Contract Act states: ‘Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.’, In the light of the above legal position, even if the petitioners really obtained information regarding the location of the capital in the area where the lands are purchased, the mere nondisclosure of that information to the sellers at the time of purchase cannot be construed as a dishonest concealment of fact for the purpose of fastening criminal liability under Section 420 of the Indian Penal Code., Another significant fact needs to be noticed: the sale transactions relating to the land took place about six years ago in 2014. The owners who sold their lands had absolutely no demur whatsoever for all this length of time and never expressed any grievance that they had been cheated by the petitioners by suppressing the fact that the capital city was to be located in their area at the time of sale. They did not raise any complaint even after the capital city was notified on 30.12.2014. Only when a stranger lodged a police report, the sellers allegedly claimed they had been cheated. The belated version introduced by the prosecution is therefore incredulous. If they had a grievance, they would have initiated civil and criminal actions long ago. Hence, the credibility of the de facto complainant who engineered the report cannot be ruled out., The Apex Court in Mohd. Ibrahim v. State of Bihar held that complainants sometimes attempt to give the cloak of a criminal offence to matters which are essentially civil, to pressure or harass the accused. It also held that a third party who is not the purchaser under the deed may not be able to make a complaint of cheating., The facts of the prosecution case and the submissions made on behalf of the prosecution do not attract any offence under Section 420 of the Indian Penal Code. A meticulous perusal of the recitals of the registered sale deeds executed by the sellers in favour of the petitioners shows that it was the sellers who offered to sell their lands to the petitioners to meet their legal necessities, not the petitioners approaching the sellers.
|
id_1656
| 3
|
The contents of the sale deeds show that the lands were not profitable to the vendors and they were in dire necessity of money for meeting family expenses or discharging debts. Consequently, the owners decided to sell their lands and offered them to the petitioners, who accepted the offer. A sale consideration of lakhs of rupees was arrived at by consensus, and upon receipt of the consideration, the sale deeds were registered by the owners in favour of the petitioners. Therefore, it is evident that the petitioners did not approach the owners with a request to sell the lands so as to induce them by suppressing the fact that the capital was to be located in the area. The recitals in the sale deeds completely belie the prosecution's version that the petitioners induced the sellers by offering a high sale price and suppressing the capital location., The recitals of the sale deeds clearly establish that the offer to sell the lands was made by the owners and the petitioners accepted the offer and purchased the lands. Consequently, the question of informing the owners that the capital would be located in the area loses significance. There is no dispute that the sale deeds contain recitals stating that the owners offered to sell the lands to meet their legal and family necessities. The learned Public Prosecutor’s own written submissions elicit these recitals in both Telugu and the English translation, thereby negating the prosecution’s claim that the petitioners suppressed material facts., The learned Advocate General submitted that the recitals in all the sale deeds are stereotyped and cannot be relied upon to disbelieve the sellers’ version; this submission is without merit and cannot be countenanced. Accepting it would distort the true facts recorded and result in a travesty of truth, contrary to the express recitals of the sale deeds, which is not permissible under law., During the investigation, some owners (referred to as L.W. 3 to 11 and 13 to 16) stated in their statements before the police under Section 161 of the Criminal Procedure Code that a broker named Srinivas approached them on behalf of the petitioners, initially their request was rejected, but he later convinced them by offering a high sale price. They claimed they were unaware that the capital would be located in the area, learned later that the government had notified the area as the capital region, and alleged that the petitioners purchased their lands without disclosing this fact, causing them loss. The recitals of the sale deeds completely belie these statements, as the owners themselves unequivocally declared in the deeds that they voluntarily offered to sell their lands to meet legal and family necessities. Hence, they are estopped from contending contrary to their own declarations., The prosecution also alleges that the proposal to locate the capital city between Krishna District and Guntur District by the side of the Krishna River and adjacent to the highway was not known to the sellers and that the petitioners clandestinely obtained this information from top officials and political leaders and purchased the lands without disclosing it. The material placed before the High Court of Andhra Pradesh by the petitioners in the form of newspaper publications completely belies this version. The appointed day for formation of the residuary State of Andhra Pradesh under the Andhra Pradesh Reorganisation Act, 2014, was 02‑06‑2014. The new government was formed after the General Assembly Elections on 09‑06‑2014, and the Chief Minister was sworn in on that date. Immediately after the swearing‑in ceremony, the Chief Minister publicly declared that the capital city would be within Krishna District and Guntur District by the side of the Krishna River. This announcement was widely published in both Telugu and English newspapers on 10‑06‑2014., Subsequent newspaper reports reinforced the announcement: Andhra Jyothi (10‑06‑2014) reported that the new capital would be between Vijayawada and Guntur as it is geographically central; Eenadu (02‑07‑2014) reported that the government was contemplating establishing the new capital by the side of the Krishna River, making Amaravati the main centre, and constructing flyover bridges; the Times of India (02‑07‑2014) published a headline stating that the new capital city of Andhra Pradesh would be built around the ancient town of Amaravathi; Sakshi (23‑07‑2014) reported that the Advisory Committee Chairman and the Minister for Municipal Administration said the area between Krishna and Guntur districts would be suitable for the capital; Eenadu (24‑09‑2014) reported that the capital could be on a 184‑km ring road requiring 30,000 acres; Economic Times (05‑09‑2014) reported that the Chief Minister announced in the State Assembly that the new capital would be in the Vijayawada region; Andhra Jyothi (26‑10‑2014) reported that the capital would be within Tulluru Mandal, with 30,000 acres to be acquired under the Land Pooling Scheme; Economic Times (30‑10‑2014) reported that the capital would be a river‑front capital on the south side of the Krishna River, identifying 17 villages in Guntur District that would form part of the capital area. These publications demonstrate that the information about the capital’s location was in the public domain from June 2014 onward., The prosecution does not deny the publication of the above news relating to the government’s proposal to locate the capital city by the side of the Krishna River between Krishna District and Guntur District. Consequently, the information was widely available in both Telugu and English newspapers, establishing that it was public knowledge well before the land transactions. Therefore, it cannot be said that the petitioners obtained the information unauthorisedly from top officials, nor can it be said that the sellers were unaware of the capital’s proposed location. The information was known to the whole world through extensive newspaper coverage, and both the petitioners and the landowners were aware of it. Hence, the sellers cannot plead ignorance or claim that the material fact was suppressed at the time of sale., According to the learned Advocate General, the Cabinet decided on the capital’s location on 01‑09‑2014, and the decision was announced in the Legislative Assembly on 02‑09‑2014. This further confirms that the information was in the public domain at the time of the land transactions., When the information is in the public domain and the sellers are aware of it, it cannot be legitimately contended that there was concealment of a material fact as required under the Explanation appended to Section 415 of the Indian Penal Code to attribute criminal liability of deception to the petitioners. The investigating officer’s plan shows that several other persons also purchased lands in and around the proposed capital region, likely based on the same publicly available information. Since the right to acquire and own property is a constitutional, legal, and human right, no criminal liability can be fastened to the petitioners or any other buyers for purchasing land in the proposed capital region. Consequently, no offence under Section 420 of the Indian Penal Code is made out., Section 406 of the Indian Penal Code deals with punishment for criminal breach of trust, defining the offence in Section 405. For an offence under Section 406 to arise, there must be an allegation of entrustment of property to the accused and a subsequent dishonest misappropriation or conversion. In the present case, there is absolutely no allegation that any property was entrusted to the petitioners, nor that they dishonestly misappropriated or converted such property. Therefore, on the face of the FIR, no offence under Section 406 is made out, and the section is wholly inapplicable to the facts of this case., Section 409 of the Indian Penal Code pertains to criminal breach of trust by a public servant, banker, merchant, or agent. The essential requirement is that the accused must hold the property in one of those capacities and be entrusted with it. The prosecution has not established that the petitioners are public servants, bankers, merchants, or agents, nor that any property was entrusted to them in such a capacity. Consequently, the ingredients required under Section 409 are entirely lacking, and the section is wholly inapplicable to the petitioners., Section 120‑B of the Indian Penal Code deals with punishment for criminal conspiracy, which is defined in Section 120‑A. An agreement to commit an illegal act or to do an act which is not illegal by illegal means, coupled with an overt act in furtherance of the agreement, constitutes a criminal conspiracy. The prosecution has relied on isolated and sporadic instances to fabricate a conspiracy narrative, but such bits are insufficient to demonstrate a meeting of minds to commit an illegal act. Accordingly, no offence under Section 120‑B is made out from the facts of this case., The learned Advocate General contended that some employees in the Secretariat, whose duty is to prepare draft Government Orders, gave statements under Sections 161 and 164 of the Criminal Procedure Code indicating irregularities in drafting Government Orders No. 252 and 254 dated 30‑12‑2014, which notified the capital region area. He argued that this indicated a conspiracy in bringing out those orders. However, even if such irregularities exist, the petitioners are strangers to the drafting of those orders and have no involvement. The statements of the Secretariat employees, even if true, do not establish any offence punishable under Sections 420, 406, 409, or 120‑B against the petitioners., After considering the entire gamut of the prosecution case, the facts do not admit the commission of any offence whatsoever, let alone offences punishable under Sections 420, 406, 409, and 120‑B of the Indian Penal Code. No criminal liability can be attributed to the petitioners on the ground that they did not inform the sellers that the capital city would be located in their area, causing the sellers monetary loss due to subsequent increase in land value. It is beyond comprehension how private sale transactions can be criminalised on such flimsy grounds., Criminalising private sale transactions and prosecuting buyers on the premise of concealment of a fact, even if true, and on the ground of loss to the sellers due to increase in land value would create a dangerous trend in criminal law. It would open the floodgates for every vendor who sells land to attempt prosecution of the buyer whenever the land’s value appreciates substantially.
|
id_1656
| 4
|
Law does not permit such criminal prosecution of the buyer of the land on the said ground. Undoubtedly, it is a sort of speculative criminal prosecution that was launched by the State against the petitioners in this case, which is not permissible under law. Therefore, it is undoubtedly an attempt by the prosecution to fire a blind shot in a dark room to prosecute these petitioners in the above facts and circumstances of the case. In view of the above factual findings based on the prevailing legal position recorded by the High Court, the entire prosecution case bristles with several fatal legal infirmities and the same strikes at the very bottom of the substratum of the prosecution case and it cuts the case of the prosecution at its roots. Therefore, as the facts of the case do not constitute any offences punishable under Sections 420, 406, 409 and 120-B of the Indian Penal Code, the prosecution against the petitioners amounts to sheer abuse of process of law. The contents of the First Information Report also do not disclose commission of any cognizable offences. So, the First Information Report registered against them is liable to be quashed., The grounds on which the First Information Report is liable to be quashed under Section 482 of the Code of Criminal Procedure and under Article 226 of the Constitution of India are enumerated by the Supreme Court of India in the case of State of Haryana v. Bhajan Lal. At paragraph 102 of the judgment, the Supreme Court held that, in the backdrop of the interpretation of various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code, the following categories of cases illustrate where such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down precise, clearly defined and inflexible guidelines. (1) Where the allegations made in the First Information Report or the complaint, even if taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the First Information Report and other materials, if any, accompanying the report do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the First Information Report or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where the allegations in the First Information Report do not constitute a cognizable offence but constitute only a non‑cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the First Information Report or complaint are so absurd and inherently improbable that no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any provision of the Code or the concerned Act to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide intent or is maliciously instituted with an ulterior motive for vengeance on the accused and with a view to spite him due to private and personal grudge., Thus, as per the law enunciated by the Supreme Court of India above, grounds 1 to 3 and 5 are clearly applicable to the present facts of the case. The High Court found from the contents of the First Information Report and the material collected during the investigation that the allegations made in the report, even if taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused for the offences punishable under Sections 420, 406, 409 and 120-B of the Indian Penal Code. The investigation material also does not disclose a cognizable offence justifying investigation, and the allegations are so absurd and inherently improbable that no prudent person can conclude there is sufficient ground for proceeding against the accused. Consequently, the First Information Report registered against the petitioners is liable to be quashed., The Supreme Court of India in Vesa Holdings Private Limited v. State of Kerala held that the complaint did not disclose any criminal offence at all. Allowing the police investigation to continue would amount to abuse of process of the Court, and the High Court committed error in refusing to exercise its power to quash the proceedings. The impugned order is set aside., In State of Karnataka v. Arun Kumar Agarwal, the Supreme Court held that the acts of persons will not be subject to criminal investigation unless a crime is reported to have been committed or reasonable suspicion thereof arises. Mere conjecture or surmise that some crime might have been committed, without any knowledge of the crime, the persons involved or the place of crime, cannot constitute a reasonable basis for starting a criminal investigation. The Court observed that the attempt made by the High Court in this case appears to be a blind shot fired in the dark without even knowing whether there is a prey at all; it may create sound and fury but not result in hunting down the prey., Although the learned Advocate‑General submits that text of WhatsApp messages of some petitioners secured during the investigation shows communication with some Non‑Resident Indians alleging that, as the capital city is coming in the said area, they have to hurry to purchase the lands, the C.D. file produced by the prosecution does not contain such WhatsApp messages. Even if such messages existed, they cannot be considered incriminating material against the petitioners in view of the above discussion and findings., The judgments relied upon by the learned Advocate‑General, including Umesh Kumar v. State of Andhra Pradesh and Prakash Singh Badal v. State of Punjab, deal with the proposition that criminal prosecution cannot be vitiated merely on the basis of an allegation of political vendetta if there is substance in the allegations. Irrespective of the motive attributed by the petitioners to the State, this Court has decided the case on its merits based on law and found no substance in the report lodged against the petitioners to prosecute them. Consequently, the cases of S. Pratap Singh v. State of Punjab, Imtiyaz Ahmad v. State of Uttar Pradesh, Kurukshetra University v. State of Haryana and State of Rajasthan v. Ravi Shankar Srivastava are of no avail to the prosecution. In view of the authoritative pronouncements in Bhajan Lal’s case, this Court is inclined to quash the First Information Report., The learned Advocate‑General also relied on the judgment of the Supreme Court in Skoda Auto Volkswagen India Private Limited v. State of Uttar Pradesh. The observation at paragraph 41 of that judgment is favourable to the petitioners, holding that the Court will not permit an investigation to continue where no cognizable offence of any kind is disclosed in the First Information Report. As this Court found that no cognizable offence of any kind is disclosed in the First Information Report, it is inclined to quash the report., The Advocate‑General further relied on the judgment of the Supreme Court in State of Madhya Pradesh v. Awadh Kishore Gupta, which states that allegations of mala fide intent do not, by themselves, constitute a ground for quashing a First Information Report. Irrespective of any alleged mala fide motive, the present case does not disclose a cognizable offence, and therefore the First Information Report must be quashed., The unreported judgment of this Court in Anne Sudhir Babu v. State of Andhra Pradesh is distinguishable on facts. In that case a report was lodged against certain accused relating to commission of offences, and the role of a Tahsildar was incidentally mentioned in the First Information Report. The Court held that the incidental mention does not prevent the police from registering a case against the person and investigating it. That judgment does not support the prosecution in the present matter., To sum up, the right to acquire property is a constitutional and legal right of the petitioners as citizens of this country. Having purchased the lands in exercise of that right through valid registered sale deeds, the private sale transactions cannot be criminalised and no criminal liability can be attributed to the petitioners for any offence, let alone for the offences punishable under Sections 420, 406, 409 and 120-B of the Indian Penal Code. The concept of insider trading, which pertains to the securities market, is alien to the Indian Penal Code and cannot be read into Section 420 or any other provision of the Code. Consequently, the petitioners had no legal obligation to disclose any latent advantage in purchasing the land to the sellers, and therefore there is no dishonest concealment of fact as contemplated under the Explanation to Section 415 of the Indian Penal Code, nor any deception under Section 420 read with Section 415. No loss was suffered by the sellers, and no element of criminality is involved in the sale transaction. Hence, the allegations in the First Information Report, together with the material collected so far, do not make out any case or constitute any offence under Sections 420, 406, 409 and 120-B of the Indian Penal Code, nor is there any conspiracy to commit an illegal act. The prosecution of the petitioners is wholly unjustifiable, opposed to the basic tenets of criminal law, and amounts to sheer abuse of process of law, warranting interference by the High Court in exercise of its inherent powers under Section 482 of the Code of Criminal Procedure to quash the First Information Report., In light of the aforesaid findings, the only irresistible conclusion is that the prosecution against the petitioners for the alleged offences is not maintainable and is liable to be quashed., In fine, the criminal petitions are allowed. The First Information Report registered against the petitioners for the offences punishable under Sections 420, 409, 406 and 120-B of the Indian Penal Code and all proceedings initiated pursuant to the registration of that report are hereby quashed. Consequently, any miscellaneous applications pending, if any, shall also stand closed.
|
id_1657
| 0
|
Criminal Miscellaneous Number 249 of 2023 Danish Chauhan, Appellant(s)/Petitioner(s), through Mister Prithvi Raj Drora, Advocate, versus Director General Jammu and Kashmir Police and others, Respondent(s)., The petitioner has challenged First Information Report Number 12 of 2022 for commission of offences under Sections 498A and 109 of the Indian Penal Code registered with Police Station, Women Cell, Gandhi Nagar, Jammu., It appears that respondent Number 3 filed a complaint before In-charge Women Cell, Gandhi Nagar, Jammu alleging that she had entered into wedlock with the petitioner on 02.04.2021. It has been further alleged that soon after the marriage, the petitioner subjected respondent Number 3 to ruthless and intemperate treatment and that she was being pressurized in connection with demands of dowry. It has also been alleged that the petitioner is a regular drinker, chain smoker and a drug addict. It is alleged that the petitioner has indulged in physical violence with the complainant on a routine basis making her life a hell. The complainant goes on to allege that the petitioner made demands of cash amounting to a sum of Rupees 16 Lakhs and also demanded a car from her. In short, respondent Number 3 has levelled serious allegations of cruelty against the petitioner in connection with demands of dowry. The allegations have also been levelled against other relatives of the petitioner/husband., Challenge has been thrown to the impugned First Information Report on the ground that the allegations made therein are absolutely vexatious with a view to victimise the petitioner and his family members. It has been further contended that all the relatives of the petitioner including his parents and brother-in-law have been roped in the First Information Report which shows that respondent Number 3 only intends to harass the petitioner. It is also contended that respondent Number 3 has already filed an application under Section 12 of the Protection of Women from Domestic Violence Act, 2005 against the petitioner, as such, she is debarred from lodging a First Information Report against the petitioner and his relatives. It has also been contended that there are no specific allegations in the impugned First Information Report against the petitioner., I have heard learned counsel for the petitioner and perused the record of the case., So far as the allegations made in the impugned First Information Report are concerned, these are very specific in nature as regards the role of petitioner herein. It has been specifically stated in the First Information Report that the petitioner made demands of cash and car from respondent Number 3 and it has also been specifically stated that the petitioner used to physically and mentally torture her in connection with demands of dowry. So the ground urged by the petitioner that there are no specific allegations against him in the impugned First Information Report is without any merit., So far as the contention of the petitioner that the impugned First Information Report has been lodged just to victimise the petitioner and his relatives is concerned, the veracity of this contention can be ascertained during the investigation of the case. It is a fact that respondent Number 3 has unnecessarily roped in relatives of her husband in the impugned First Information Report, but this ground may be available to the relatives of the petitioner and not to the petitioner i.e. husband of respondent Number 3., The contention of the petitioner that respondent Number 3 is debarred from lodging a First Information Report as she has already filed an application under Section 12 of the Protection of Women from Domestic Violence Act, 2005 is also without any merit. The scope of proceedings under Section 12 of the Protection of Women from Domestic Violence Act, 2005 and the scope of criminal proceedings initiated pursuant to the lodging of a First Information Report are entirely different from each other. While in proceedings under Section 12 of the Protection of Women from Domestic Violence Act, 2005, the victim of domestic violence can be awarded monetary compensation and can also be given certain protective orders in her favour, the criminal proceedings are intended to punish the perpetrator of a crime, may be a matrimonial crime. So, the provisions of the Protection of Women from Domestic Violence Act, 2005 and the Indian Penal Code are in different fields. Therefore, merely because respondent Number 3 has filed an application under the Protection of Women from Domestic Violence Act, 2005, she cannot be debarred from lodging a First Information Report against the petitioner for investigating the acts of cruelty alleged to have been perpetrated by him against her., For the foregoing reasons, I do not find any merit in this petition. The same is accordingly dismissed.
|
id_1658
| 0
|
CM (M) 552/2020 Page 1 Date of Decision: 12.04.2021 Through: Mr. Sujoy Kumar, Mr. Raghav Kumar and Mr. Arindam Ghosh, Advocates versus Dr. Amit George, Mr. Alex Joseph, Mr. P. Harold, Mr. Rayadurgam Bharat and Mr. Amol Acharya, Advocates. This petition has been heard through video conferencing., This petition has been filed by the petitioner challenging the order dated 11.08.2020 passed by the learned Additional Senior Civil Judge, Patiala House Court in Suit CS No. 601 of 2018 titled Ms. Nisha Kurian v. Banana IP Co, rejecting the application of the petitioner filed under Order VII Rule 11 of the Code of Civil Procedure, 1908., The above Suit has been filed by the respondent inter alia pleading that she was working as a Senior Associate – IPR with the petitioner. She tendered her resignation from the services on 29.12.2017; however, the petitioner, vide its letter dated 29.01.2018, refused to accept the resignation and instead terminated the employment agreement of the respondent with effect from 21.01.2018. The respondent prayed for the following relief in her Suit: (a) declaration that the termination dated 29.01.2018 issued by the defendant to the plaintiff is illegal and invalid; (b) a decree providing an adequate experience letter and relieving letter in favour of the plaintiff; (c) a decree of permanent and prohibitory injunction restraining the defendant from threatening, harassing, pressurising the plaintiff or adopting coercive measures against the plaintiff with mala fide and ulterior motives, demanding illegal money, forcibly recovering the amount from the plaintiff, or filing or lodging false vexatious criminal case against the plaintiff., The learned counsel for the petitioner submits that the Suit is not maintainable and should be dismissed. He contends that a simple suit for declaration is not maintainable and that a suit for specific performance of such a contract is not maintainable; therefore, any remedy of the respondent, if any, would be only a suit for declaration with damages. He relies on the judgments of the Supreme Court of India in Executive Committee of Vaish Degree College, Shamli & Ors. v. Lakshmi Narain & Ors., (1976) 2 SCC 58; Apollo Tyres Ltd. v. C.P. Sabastian, IX (2010) SLT 237; State Bank of India & Ors. v. S.N. Goel, (2008) 8 SCC 92; and Venkataraja & Ors. v. Vidyane Doureradjaperumal, (2014) 14 SCC 4. He further submits that the Court is not empowered to evaluate the service record of an employee and to dictate the nature of experience certificate to be issued; consequently, prayer (b) in the plaint is also not maintainable., The learned counsel for the petitioner also states that the petitioner has already instituted a suit for recovery of damages against the respondent in the courts at Bangalore and has initiated criminal proceedings by lodging an FIR against the respondent in Bangalore; therefore, prayer (c) in the Suit has been rendered infructuous. Relying on the judgment of the Supreme Court of India in Shipping Corporation of India Ltd. v. Machado Brothers & Ors., (2004) 11 SCC 168, he submits that on account of such subsequent facts, the prayer made by the respondent is rendered infructuous and the Suit should be dismissed., The learned counsel for the respondent submits that the Suit does not claim reinstatement in the petitioner’s firm. The Suit is premised on the resignation tendered by the respondent and therefore does not seek specific performance of her contract of personal services. He further submits that the Suit is not merely a declaration but also prays for consequential relief in the form of prayer (b). Instead of claiming damages, which the respondent would otherwise be entitled to, the respondent has claimed a certificate of honourable discharge from the services and an experience certificate for her time spent in service. He submits that such relief cannot be barred by the Specific Relief Act, 1963., The counsel for the respondent states that the effect of the filing of the Suit and the FIR by the respondent would be considered by the learned District Court at an appropriate stage; however, the plaint cannot be rejected in part under Order VII Rule 11 of the Code of Civil Procedure. He relies upon the judgment of this Court in Intertek India Private Limited v. Priyanka Mohan, 2019 SCC OnLine Delhi 10284, in support of his submission., I have considered the submissions made by the learned counsels for the parties., The Suit filed by the respondent inter alia states that she tendered her resignation from the petitioner firm on 29.12.2017. The Suit does not seek specific performance of a contract of service or reinstatement in the petitioner firm. It seeks a declaration that the letter dated 29.01.2018, subsequently issued by the petitioner firm refusing to accept her resignation and terminating her services, is illegal, and as a consequential relief, the respondent has claimed that the petitioner be directed to provide an adequate experience letter and relieving letter, i.e., an honourable discharge from the services of the petitioner firm. Thus, the Suit cannot be said to be seeking declaration alone without any consequential relief., The submission of the petitioner that consequential relief can only be in the form of damages, if at all, is not acceptable. Consequential relief need not be limited to damages; an employee may seek the relief to which he or she is entitled under law. Damages are not the only form of consequential relief that can be sought by an employee., While there is no dispute that a contract of personal service cannot be specifically enforced, the respondent is not seeking specific performance of her contract of service., As to prayer (c), the effect of the Suit filed by the petitioner in the Bangalore Court and the FIR registered at its behest will be considered by the learned District Court while deciding the Suit. Whether the Suit has been rendered infructuous by any subsequent event will be determined by the District Court after the parties lead their evidence. Whether prayer (c) can or cannot be granted cannot lead to partial rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure. As repeatedly held, there cannot be partial rejection of the plaint under Order VII Rule 11 of the Code., Accordingly, I find no infirmity in the order impugned in the present petition. The petition is dismissed., The petitioner shall pay costs of Rs.35,000 to the respondent.
|
id_166
| 0
|
These Criminal Miscellaneous Cases are filed by the accused in Criminal Case No. 811/2014, on the files of the Judicial Magistrate of First Class‑I, Nedumangad. The aforesaid Calendar Case arises from Crime No. 215 of 1994 of Vanchiyoor Police Station, which was registered for the offences punishable under sections 120B, 420, 201, 193 and 217 read with section 34 of the Indian Penal Code. Criminal Miscellaneous Case No. 5261/2022 is filed by the second accused and Criminal Miscellaneous Case No. 7805/2022 is filed by the first accused therein. The second respondent is the de facto complainant. The prayer sought in these Criminal Miscellaneous Cases is to quash the final report submitted therein and further proceedings pursuant to it., The facts which led to the registration of the aforesaid crime are as follows: An Australian national, named Andrew Salvatore, was a passenger of Indian Airlines Flight I.C. 168 from Thiruvananthapuram to Mumbai on 04‑04‑1990. While frisking at the Thiruvananthapuram Airport, he was found in possession of two packets containing 55 gms and 6.6 gms of charas, which were concealed in the pocket of his underwear. Thereafter, the person, along with the seized articles as well as his personal belongings, was placed in the custody of Valiyathura Police Station, and Crime No. 60/1990 was registered for the offence punishable under section 20(b)(ii) of the Narcotic Drugs and Psychotropic Substances Act., The seized articles, including the underwear of the accused, were produced before the Judicial First Class Magistrate Court‑II, Thiruvananthapuram. The first accused herein was the Thondi clerk, and the articles were entrusted in his custody. The second accused herein was a lawyer practising in Thiruvananthapuram and was the junior lawyer who appeared for the Australian national. While arresting the accused, several articles, including his personal belongings, were also seized by the police and produced before the court., On 17‑07‑1990, an application was submitted on behalf of the accused to release his personal belongings, which was allowed by the Judicial Magistrate. Accordingly, the articles were released and collected by the second accused, the junior lawyer. However, although the order pertained only to the personal belongings, the underwear from which the contraband had been seized was also released by the first accused, the Thondi clerk, and collected by the second accused. On 05‑12‑1990, the second accused returned the underwear to the first accused, and later it was forwarded to the Sessions Court as the case was committed to the Sessions Court., During the trial, the underwear was marked as MO2, and the defence taken by the accused was that MO2 was too small for him. The practical test was not conducted by the trial court. After the trial, the accused was found guilty by the Sessions Court and sentenced to rigorous imprisonment for ten years and a fine of one lakh rupees. Challenging the conviction, Criminal Appeal No. 20/1991 was filed before this Court, reiterating the same contention. During the hearing of the appeal, a practical test was ordered and it was found that the MO2 was not of his size., Accordingly, the accused was acquitted by judgment dated 05‑02‑1991, but the court observed a strong possibility that MO2 had been planted. An inquiry was suggested. The Vigilance Officer of this Court conducted an investigation and submitted a report highlighting the necessity of a detailed investigation. Consequently, an Office Memorandum dated 27‑09‑1994 was issued by this Court requesting the District Court, Thiruvananthapuram, to direct the Sheristadar to give a first information report before the police. After completing the investigation, the final report was submitted, produced as Annexure B in Criminal Miscellaneous Case No. 5261/2022 and Annexure I in Criminal Miscellaneous Case No. 7805/2022. It is alleged that the petitioners conspired to secure the acquittal of the accused in Crime No. 60/1990 of Valiyathura Police Station, got the MO2 released, altered it to make it unsuitable for the accused, and returned it to the court. Cognizance was taken thereon, and the matter is pending as Criminal Case 811/2014 before the Judicial First Class Magistrate Court‑I, Nedumangad., Heard Sri. P. Vijaya Bhanu, the learned Senior Counsel, assisted by Advocate Deepu Thankan, for the petitioner in Criminal Miscellaneous Case No. 5261/2022; Sri S. Rajeev, the learned counsel for the petitioner in Criminal Miscellaneous Case No. 7805/2022; Sri B. G. Harindranath, the learned counsel for the second respondent/de facto complainant; and Sri Vipin Narayan, the learned Public Prosecutor for the State. Criminal Miscellaneous Applications 3/2022, 4/2022 and 5/2022 were filed by third parties for impleadment, which were not allowed by this Court. However, learned Senior Counsel Sri. George Poonthottam and Advocate Sri T. Asaf Ali, who appeared for the third parties, were permitted to place their arguments on the question of law involved, with a view to assisting this Court., The main contention put forward by the learned counsels for the petitioners is that, since the offences for which cognizance was taken include section 193 of the Indian Penal Code, cognizance could not have been taken by the learned Magistrate on the police report submitted under section 173(2) of the Code of Criminal Procedure, as it was against the special procedure prescribed under section 195(1)(b) of the Code of Criminal Procedure. In Criminal Miscellaneous Case No. 7805/2022, besides the aforesaid contention, the petitioner also seeks to quash the final report on merits, contending that the materials placed on record would not make out offences against the first accused., In response, the de facto complainant, who was the Sheristadar of the Sessions Court, Thiruvananthapuram at the time of registering the FIR, submitted a detailed objection. The circumstances under which the FIR was registered and the sequence of events leading to its registration were explained in the objection with supporting documents., A detailed hearing of all parties was conducted, and numerous decisions were cited. This Court shall refer to those decisions that are relevant to the issue while answering the questions involved., The most crucial contention raised is the violation of the procedure prescribed in section 195(1) of the Code of Criminal Procedure. The provision reads as follows: 195. Prosecution for contempt of lawful authority of public servants, for offences against public justice and for offences relating to documents given in evidence. (1) No Court shall take cognizance (a)(i) of any offence punishable under sections 172 to 188 of the Indian Penal Code, or (ii) of any abetment of, or attempt to commit, such offence, or (iii) of any criminal conspiracy to commit such offence, except on the complaint in writing of the public servant concerned or of some other public servant to whom he is administratively subordinate. (b)(i) of any offence punishable under sections 193 to 196, 199, 200, 205 to 211, and 228 of the Indian Penal Code, when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, or (ii) of any offence described in section 463, or punishable under section 471, 475 or 476 of the Code, when such offence is alleged to have been committed in respect of a document produced or given in evidence in a proceeding in any Court, or (iii) of any criminal conspiracy to commit, or attempt to commit, or the abetment of, any offence specified in sub‑clause (i) or (ii), except on the complaint in writing of that Court or by such officer of the Court as that Court may authorize in writing in this behalf, or of some other Court to which that Court is subordinate., It can be seen that as per section 195(1)(b) of the Code of Criminal Procedure, offences mentioned therein, including an offence under section 193 of the Indian Penal Code and any criminal conspiracy to commit such offence, can be taken cognizance of only based on a complaint in writing by the court concerned or by such officer as that court may authorize. In this case, cognizance was taken on the police report submitted under section 173(2), which was not permissible. The learned counsel for the petitioners contends that, even though other offences not falling under section 195(1)(b) are alleged, the act of taking cognizance based on a police report cannot be justified, as all the offences arise from the same transactions. To substantiate, they rely on the Supreme Court decision in Banderkar Brothers Private Ltd v. Prasad Vasudev Keni., The learned counsel for the de facto complainant opposes the petitioners’ contentions, arguing that the bar under section 195(1) applies only when fabrication of false evidence punishable under section 193 is done while the article is in the court’s custody. The prohibition would not apply if the fabrication took place outside the court and was later produced as evidence., When considering the rival contentions, the crucial decision is the Constitutional Bench judgment of the Supreme Court in Iqbal Singh Marwah and another v. Meenakshi Marwah and another [(2005) 4 SCC 370]. The Court held that section 195(1)(b)(ii) is attracted only when the offences enumerated have been committed with respect to a document after it has been produced or given in evidence in a proceeding in any court, i.e., during the time when the document was in custodia legis. According to the counsel for the de facto complainant, in this case the allegation is alteration of the MO2 underwear, which was released by court order. The prosecution states that the alteration took place after release, therefore it cannot be treated as fabrication that occurred while in custodia legis; hence the bar would not be applicable., A careful scrutiny of the allegations shows that, along with the final report, the statement of the then Sub Judge Inrinjalakuda, who was Judicial First Class Magistrate‑II, Thiruvananthapuram, at the time of seizure of the articles in Crime No. 60/1990 of Valiyathura Police Station, is also produced. The statement indicates that while arresting the accused, his personal belongings were seized and produced before the court as T‑243/90 containing 50 items, of which item 23 was the underwear. The underwear from which the contraband was seized was produced separately as T‑241/90 containing one item. An application to release the personal belongings was allowed, and items 1 to 41, 45, 46 and 49 in T‑243/90 were released. However, the first accused, the Thondi clerk, while releasing the articles in compliance with the order, also released the underwear produced as T‑241/90, although it was not covered by the order. The articles, including the underwear T‑241/90, were received by the second accused, who acknowledged them. Later, the underwear was returned by the second accused to the court on 05‑12‑1990. The prosecution case alleges that alteration of the underwear took place while it was in the possession of the second accused. The de facto complainant argues that since the alteration occurred after release to the second accused and the altered item was again produced before the court, the fabrication did not occur while in custodia legis, and therefore the bar under section 195(1)(b) would not be applicable., The Court is not inclined to accept that contention. The mere release of the article does not mean it ceased to be in the court’s custody. Custodia legis means custody of the court. Although physical possession was with the second accused, legal possession remained with the court because no order was passed granting legal possession. The article was produced before the court as T‑241/90, and the court never ordered its release to the accused. The alleged clandestine release and alteration occurred without authority, so the court’s custody never ended. Consequently, the bar under section 195(1)(b) applies., Another aspect supporting the bar is that the offences alleged include an offence under section 120B of the Indian Penal Code, relating to criminal conspiracy to commit offences under sections 420, 201, 193 and 217. Section 120A defines criminal conspiracy as an agreement between two or more persons to do an illegal act or an act which is not illegal by illegal means, and requires an act in furtherance of the agreement. In the present case, the prosecution alleges that the first and second accused entered into a conspiracy, got the MO2 released, altered it, and returned it to the court. The moment the article was released to the second accused in pursuance of the conspiracy, section 120B was attracted, and the subsequent alteration constituted the offence under section 193. Under section 195(1)(b)(iii), the special procedure to take cognizance applies to the criminal conspiracy to commit the offences under sub‑clauses (i) and (ii). Thus, the offence under section 120B is committed the moment MO2 is released from the court, which was in custodia legis. Therefore, the bar under section 195(1)(b) is attracted even if the alteration occurred outside the court’s custody., Section 192 of the Indian Penal Code defines fabricating false evidence as causing any circumstance to exist or making any false entry in any book or record, or electronic record, or making any document containing a false statement, intending that such circumstance, false entry or false statement may appear in evidence in a judicial proceeding, thereby causing an erroneous opinion. One ingredient is causing a circumstance to exist, which in this case is getting the MO2 released, altering it, and returning it to the court to plant false evidence. The first stage, the release of MO2, occurred while the article was in custodia legis, so the offence commenced at that stage. Even if the alteration occurred later outside custodia legis, the offence had already begun, attracting the bar under section 195(1)(b)., The learned counsel for the de facto complainant further contends that when the High Court issues a direction to register a case, the bar under section 195(1)(b) cannot be made applicable. Reliance was placed on Central Bureau of Investigation v. M. Sivamani [(2017) 14 SCC 855], where the Supreme Court observed that the bar is not intended to thwart a High Court direction in public interest, and that a High Court direction is equivalent to a complaint in writing by an administrative superior, thereby removing the bar under section 195(1)(a)., However, the present case differs because the direction was an Office Memorandum from the administrative side of this Court requesting the District Judge, Thiruvananthapuram, to direct the Sheristadar to furnish the first information statement. No judicial order akin to that in Sivamani was passed. The procedure and legal consequences of a judicial order and an administrative order are entirely different, so the principles in Sivamani are not applicable., Another contention raised is that, besides the offence under section 193, other cognizable offences are alleged, and therefore the court may take cognizance on the final report. Reliance was placed on A. Subash Babu v. State of Andhra Pradesh and another [(2011) 7 SCC 616], where the Supreme Court upheld cognizance on a police report because other cognizable offences were present, aided by a State amendment. However, the observations in Banderkar Brothers case are relevant: the Court held that if two offences arise from the same transaction, one of which attracts section 195 and the other does not, the procedure of section 195(1)(b) must still be followed. In the present case, the offences under section 193 and the other offences are inseparable, arising from the same transaction of releasing, altering, and returning the MO2. Hence, the special procedure cannot be avoided and the cognizance taken on the final report is not sustainable., The learned counsel for the de facto complainant also points out delay, noting that the crime was registered in 1994, cognizance was taken in 2006, and the Criminal Miscellaneous Cases were filed only in 2022. Reliance was placed on a Single Bench decision of the Karnataka High Court reported in 2010 Cri.L.J 2666 (Dr. G. Ramachandrappa v. Smt. Padma Ramachandrappa).
|
id_166
| 1
|
In the said decision it was held that when the petition to quash the proceedings is filed after one year it suffers from delay and latches. In the said decision the reasonable period was fixed as ninety days. However, I respectfully disagree with the view taken therein. The petitioners are invoking the inherent powers of the Kerala High Court and Criminal Miscellaneous Cases Nos. 5261 and 7805 of 2022; the same cannot be turned down merely because of delay unless it is clear from the records that it was filed with the sole purpose of prolonging the proceedings. In this case the contention raised relates to a fundamental defect in the initiation of the proceedings which cuts the root of the proceedings. Therefore it is absolutely necessary in the interest of the prosecution also that such defect is rectified and the proceedings are initiated in a proper manner in due compliance with the statutory stipulations., Thus, from all the above discussions the only irresistible conclusion possible is that the cognizance taken on the police report is not legally sustainable as it was in violation of the statutory stipulation in Section 195(1)(b) of the Code of Criminal Procedure., In Criminal Miscellaneous Case No. 7805/2022 the petitioner raised a contention that the materials placed on record, even if accepted, would not attract the offences against the first accused. However, as I have found that the cognizance was not properly taken, I am not considering the said contentions and all questions relating to the same are left open. In such circumstances these Criminal Miscellaneous Cases are allowed. The order of taking cognizance on the final report in Crime No. 215/1994 and all further proceedings pursuant to the same, including the proceedings in Criminal Case No. 811/2014 on the files of Judicial First Class Magistrate‑I Nedumangad, are hereby quashed. It is clarified that this would not preclude the competent authority or the court concerned from taking up the matter and pursuing the prosecution in compliance with the procedure contemplated under Section 195(1)(b) of the Code of Criminal Procedure., Though this court interfered in the proceedings for technical reasons, it cannot be ignored that the allegations raised are serious in nature. The materials placed before this court reveal allegations which are of such nature and gravity that they interfere with the judicial functions and thereby pollute the mechanism of administration of justice. Such acts are required to be dealt with strictly with all vigor, and the Kerala High Court expects a positive and effective follow‑up action from the authorities concerned to ensure that a fair trial in accordance with the law takes place and the culprits are punished adequately. Hence the Registry of the Kerala High Court is directed to take appropriate action in this regard under the relevant provisions of the Code of Criminal Procedure without any delay, taking note of the fact that the offences were allegedly committed in the year 1990 and any further delay would defeat the entire purpose.
|
id_1660
| 0
|
Writ Petition(s) (Civil) No. 640/2021 dated 30 June 2021. These matters were called on for hearing today., For Petitioners: Ms. Meenakshi Arora, Senior Advocate; Mr. Divyansh Tiwari, Advocate; Mr. Hardik Gautam, Advocate; Mr. Nirnimesh Dube, Advocate; Mr. Shashibhushan P. Adgaonkar, Advocate on Record; Mr. Ravibhushan P. Adgaonkar, Advocate on Record; Mr. Gagandeep Sharma, Advocate; Mr. Rana Sandeep Bussa, Advocate; Ms. Ruchi Rathi, Advocate; Ms. Bansuri Swaraj, Advocate; Mr. Siddhesh Kotwal, Advocate; Ms. Ana Upadhyay, Advocate; Ms. Manya Hasija, Advocate; Mr. Nirnimesh Dube, Advocate on Record. For Respondents: Mr. Ramji Srinivasan, Senior Advocate; Mr. Pramod Dayal, Advocate; Mr. Nikunj Dayal, Advocate on Record; Mr. Shivkrit Rai, Advocate; Ms. Rajshree Chaudhary, Advocate., Upon hearing the counsel, the Supreme Court of India made the following observations. We have heard learned counsel for the parties. Initially, multiple issues were agitated before us, but eventually we have confined our consideration only to one aspect of making the comprehensive scheme for opt‑out., The Institute, in response to the deliberations in Supreme Court of India yesterday, submitted a note on facilities, relaxations and arrangements for the candidates. Currently, the opt‑out option is given when the examinee or a family member residing in the same premises is infected with COVID‑19 on or after 21 June 2021 until the completion of the examinations, upon production of a COVID‑19 positive RT‑PCR report. In addition, the opt‑out option shall be extended to candidates (whether under the old or new syllabus) who have recently suffered from COVID‑19 or are yet to recover from its after‑effects and are consequently unable to appear in the examinations, upon production of a medical certificate issued by a registered medical practitioner stating that the candidate has recently suffered from COVID‑19 and is yet to recover. The certificate should bear the registered number of the practitioner and may be issued by a District Medical Officer, Primary Health Centre, Government General Hospital, Private Hospital or a registered medical practitioner. Such medical certificate will be in addition to the relevant RT‑PCR report., All examination centres shall follow Government guidelines relating to COVID‑19 strictly to ensure the health and safety of the examinees. Seating areas shall be adequately sanitized and disinfected, and an adequate gap between candidates shall be maintained. Hand sanitizer will be made available at the examination venues. Only schools, colleges and other academic institutions have been chosen as examination centres; marriage halls, banquet halls, etc., have not been hired for the purpose of the exam., The Institute assures that all invigilators and supervisors at the examination venue shall wear masks and maintain social distancing. Further, all examination functionaries shall carry a No‑Risk status in the Aarogya Setu app installed on their mobile devices., In case there are any last‑minute changes in the examination centres due to operational or logistical reasons, candidates shall be given an option to opt‑out of the examination only in the case of an inter‑city change. No opt‑out option will be given where the change does not involve a change of city., The scheme of the examination envisages that a candidate must appear and qualify in two sets of subject groups, both in the Intermediate and Final examinations. If the opt‑out option is exercised while the examinations are in progress, the candidate must re‑appear in all the papers that constitute a group as required by the Chartered Accountants Regulations, 1988. However, if the candidate has already appeared in all the papers that constitute a group, there is no need to appear in that group again if he or she passes the group., Articleship is a form of on‑the‑job training to equip students with the skills required for the practical aspects of the profession. It is a statutory requirement as per the regulations, and there is flexibility in the completion of articleship at the discretion of the principal professional under whom the student is undergoing training. Therefore, a complete waiver of the articleship period is not possible., The Institute is not in a position to provide transportation facilities or vaccination of candidates as prayed for by the petitioner. The arrangement provided in clause 1 above is inadequate and needs to be expanded as follows: A candidate shall be entitled to opt‑out if he or she personally, or any family member, has suffered COVID‑19 in the recent past and this is certified by a registered medical practitioner, rendering the candidate unable to appear in the ensuing examination or to prepare for it. Such a candidate will not be treated as having made an attempt and will be permitted to appear in the follow‑up (back‑up) examination for both the old and new syllabus, subject to a conducive situation at the relevant time. The candidate need not produce an RT‑PCR report if a medical certificate issued by the registered medical practitioner for himself/herself or a family member is presented along with the request for opting out. Candidates affected due to lockdown during the relevant examination period are entitled to opt‑out and will not be treated as having made an attempt; they will be permitted to appear in the back‑up examination to be conducted by the Institute in due course. Regarding logistical arrangements at the examination centre, the Institute shall ensure strict adherence to the standard operating procedures notified by the competent authority, including the Disaster Management Authority. If a candidate is attempting the examination and, in the midst of it, suffers from COVID‑19 and is unable to appear in the remaining subjects, the candidate will be entitled to opt‑out and will not be treated as having made an attempt; he or she may appear in the back‑up examination as per the rules noted in the aforementioned note at serial number 5. In case of a last‑minute change of examination centre, the suggestion of the Institute that a change within the same city does not permit opt‑out is disapproved. The Institute shall permit such a candidate to opt‑out in case of a last‑minute change of examination centre; this will not be treated as an attempt, and the candidate shall be permitted to appear in the back‑up examination at an appropriate time when the situation is conducive, thereby assuaging the apprehension of candidates regarding the environment provided for appearing in the examination., As no other issue is pending for consideration, these petitions and pending applications are disposed of accordingly.
|
id_1663
| 0
|
Applicant: Jugadi Alias Nizamuddin. Opposite Party: State of Uttar Pradesh through the Secretary, Home Civil Section, Lucknow, and another. Counsel for Applicant: Narendra Gupta. Counsel for Opposite Party: Additional Government Advocate Honourable Mohd. Faiz Alam Khan, Judge. Heard Shri Dharmendra Kumar Gupta, holding brief for Shri Narendra Gupta, learned counsel for the applicant as well as learned Additional Government Advocate for the State, and perused the record., The present anticipatory bail application has been moved by the accused/applicant Jugadi Alias Nizamuddin in Crime No. 310/2022, under Sections 3, 5 and 8 of the Prevention of Cow Slaughter Act, Police Station Reusa, District Sitapur, with the prayer to enlarge him anticipatory bail as he is apprehending arrest in the above‑mentioned case. Learned counsel for the accused‑applicant submits that it is a case of false implication., The First Information Report was lodged by the village chowkidar at Police Station Reusa, District Sitapur against four named accused persons including the applicant, alleging that on 16‑08‑2022 at 7.30 pm he received information that a prohibited animal had been slaughtered in the sugarcane field of a person named Jamil. When he arrived at the spot he found a cord and semi‑digested cow dung of a calf. The FIR also states that some villagers saw the named accused persons carrying a calf towards the sugarcane field of Jamil., It is vehemently submitted that no prohibited animal or any meat of a cow has been recovered. The Investigating Officer collected only the cow dung found on the spot and sent it for forensic investigation. The Forensic Laboratory, Mahanagar, Lucknow reported that cow dung could not be examined by the laboratory., The applicant was granted interim protection by an order dated 27‑01‑2023 and has not misused the liberty granted to him. He undertakes to remain present before the Trial Court as and when his presence is required and will not seek adjournments, especially when prosecution witnesses are in attendance. The charge sheet has already been filed without arresting him and the applicant has no criminal history; therefore protection from arrest should be granted., The Additional Government Advocate submitted that the applicant is accused of committing a heinous offence and therefore is not entitled to any protection., Having heard learned counsel for the parties and perused the record, the Honourable Court finds that in the instant case neither any prohibited animal nor its flesh has been recovered. The First Information Report appears to have been lodged solely on apprehension and suspicion, and the charge sheet has also been filed. The Investigating Officer collected only cow dung, which the Forensic Laboratory declined to analyse. The applicant has no criminal history. His presence may be secured before the Trial Court by placing adequate conditions. Consequently, the anticipatory bail application filed on behalf of Jugadi Alias Nizamuddin is allowed on the condition that, in the event of his arrest within twenty days from today or on his surrender/appearance before the Trial Court, whichever is earlier, he shall be released forthwith upon executing a personal bond of Rs. 50,000 (Rupees Fifty Thousand) with two sureties of the same amount to the satisfaction of the Trial Court, the Station House Officer, the Investigating Officer or the police personnel of the concerned police station., The applicant shall not leave India during the pendency of the trial without prior permission from the concerned Trial Court. He shall cooperate with the investigation and make himself available as and when required by the Investigating Officer, even for the recovery of any fact. He shall not attempt to influence prosecution witnesses and shall not commit any crime during his release on anticipatory bail. He shall file an undertaking that he will not seek any adjournment on dates fixed for evidence when witnesses are present in court. In case of default of any of the above conditions, the Trial Court may treat it as abuse of bail liberty and pass orders in accordance with law to ensure his presence. If the applicant misuses the liberty of bail, the Trial Court may take appropriate action in accordance with law. He shall remain present in person before the Trial Court on the dates fixed for (i) opening of the case, (ii) framing of charge, and (iii) recording of statement under Section 313 of the Criminal Procedure Code. If, in the opinion of the Trial Court, default of this condition is deliberate or without sufficient cause, the Trial Court may treat such default as abuse of bail liberty and proceed against him in accordance with law., All observations contained in this order are only for disposal of the anticipatory bail application and shall not affect the trial proceedings in any manner. In case of any default of any condition by the applicant or his non‑appearance before the Trial Court as stipulated above, the Trial Court shall be at liberty to issue any coercive process to secure his presence during the trial., Before parting, it is observed that the instant case is a glaring example of misuse of penal law as neither the prohibited animal nor its flesh has been recovered from any accused person or from the spot; only a rope and some cow dung were collected by the Investigating Officer, and there are statements of some witnesses who claimed to have seen the accused persons going towards the sugarcane field of Jamil with a calf. Keeping cows and calves as pet animals is a common practice in villages irrespective of caste, creed or religion. The duty of the State is to ensure a fair investigation, which in the considered opinion of this Court has not been done in the instant case. A copy of this order shall be placed before the Director General of Police, Uttar Pradesh, for taking necessary action to remind investigating officers of their duty to ensure fair investigation in all criminal cases in general and in cases pertaining to cow slaughter in particular.
|
id_1664
| 0
|
Mr. Justice Umar Ata Bandial, Mr. Justice Maqbool Baqar, Mr. Justice Manzoor Ahmad Malik, Mr. Justice Mazhar Alam Khan Miankhel, Mr. Justice Sajjad Ali Shah, Mr. Justice Syed Mansoor Ali Shah, Mr. Justice Munib Akhtar, Mr. Justice Yahya Afridi, Mr. Justice Qazi Muhammad Amin Ahmed, and Mr. Justice Amin‑ud‑Din Khan. Civil Review Petitions No. 296 to 301, 308, 309 and 509 of 2020 and Civil Miscellaneous Application No. 4533 of 2020 (against the short order dated 19 June 2020 and the detailed judgment dated 23 October 2020 passed by the Supreme Court of Pakistan in Constitution Petition 17/2019, etc.). Justice Qazi Faez Isa (in Civil Review Petition No. 296/2020), Sindh High Court Bar Association (in Civil Review Petition No. 297/2020), Mrs. Sarina Isa (in Civil Review Petition No. 298/2020), Supreme Court Bar Association (in Civil Review Petition No. 299/2020), Muhammad Asif Reki, President Quetta Bar Association (in Civil Review Petition No. 300/2020), Shahnawaz Ismail, Vice Chairman Punjab Bar Council (in Civil Review Petition No. 301/2020), Balochistan Bar Council (in Civil Review Petition No. 308/2020), Pakistan Federal Union of Journalists (in Civil Review Petition No. 309/2020), Abid Hassan Minto (in Civil Miscellaneous Application No. 4533/2020, Pakistan Bar Council through Vice Chairman (in Civil Review Petition No. 509 of 2020)). Petitioners: The President of Pakistan and others (in Civil Review Petitions 296‑301, 308, 309 and 509 of 2020) and the Supreme Judicial Council through its Secretary and others (in Civil Miscellaneous Application No. 4533 of 2020). Respondents: Civil Review Petition No. 296 of 2020, etc., For the petitioners: Mr. Justice Qazi Faez Isa (in person) assisted by Barrister Kabir Hashmi (in Civil Review Petition 296/2020); Mrs. Sarina Faez Isa (in person) (in Civil Review Petition 298/2020); Syed Rifaqat Hussain Shah, Advocate on Record (in Civil Review Petitions 299, 300, 301 and 308/2020) appearing through video link from Karachi (in Civil Review Petitions 297 and 309/2020); Syed Rifaqat Hussain Shah, Advocate on Record (in Civil Review Petition 509/2020); Nemo (in Civil Miscellaneous Application 4533 of 2020). For the Federation of Pakistan: Chairman Aamir Rehman, Additional Attorney General. For the President, Prime Minister and Date of hearing: 26 April 2021., Table of Contents: Question (i) as to constitutionality and legality of the impugned directions – (a) direction for tax proceedings against the petitioner and material disadvantage to her; (b) hearing of the petitioner on video link and the right of hearing; (d) status of hearing petitioner on video link before making impugned directions; (e) effect of violation of right of hearing (principle of audi alteram partem); (g) right of petitioner (spouse of a Judge) to be dealt with in accordance with law; (h) scope of the powers under Article 187(1) of the Constitution; (i) constitutionality of referring the matter to the Supreme Judicial Council for exercise of; (j) obligation of a Judge as to the knowledge of financial matters of his or her financially; (k) infringement of the independence of the Supreme Judicial Council; (l) government servants cannot file complaints against judges directly. Question (ii) as to recalling impugned directions in review jurisdiction. Question (iii) as to legal status of actions made in pursuance of impugned directions, and right of a Judge to be dealt with in accordance with law in the matter of his accountability., Preface: This judgment must announce loudly and clearly that no one, including a Judge of the highest court in the land, is above the law. At the same time, no one, including a Judge of the highest court in the land, can be denied his right to be dealt with in accordance with law. Every citizen of Pakistan, notwithstanding his status or position, is entitled to due process of law in any action detrimental to his life, liberty, body, reputation or property under Article 4 of the Constitution and safeguarding of his fundamental rights guaranteed under Articles 9 to 28 of the Constitution. It matters little if the citizen holds a high public office; he is equally subject to and entitled to the protection of law. While judicial accountability is the cornerstone of judicial independence, it does not mean that accountability of a judge is bereft of due process of law and fair trial guaranteed under the Constitution. An open courtroom is no less than a glass house, yet the judges boldly and courageously uphold the law even against the mightiest in the land, without fear and favour, in full public gaze. In doing so, they step on many toes and rattle many skeletons. This may at times invite efforts to discredit them by creating doubts about their personal integrity. Since judges have no public platform to clarify, respond or defend themselves, such efforts go beyond the person of the judge and undermine public trust and confidence in the judicial institution. Constitutional safeguard of due process to enjoy the protection of law and to be treated in accordance with law therefore assumes even greater significance in cases where the integrity of a judge is in question., Facts: The President of Pakistan, on the advice of the Prime Minister of Pakistan, filed a Reference under Article 209 of the Constitution of the Islamic Republic of Pakistan 1973 against Mr. Justice Qazi Faez Isa, a Judge of the Supreme Court of Pakistan, in the Supreme Judicial Council of Pakistan to conduct an inquiry against him, alleging misconduct mainly on the basis of his non‑disclosure of three foreign properties of his family members – spouse and children – in the declaration of his assets filed with the annual income tax returns under Section 116 of the Income Tax Ordinance, 2001. The Council commenced inquiry proceedings against Justice Isa in the said Reference. Justice Isa, together with many Bar Councils and Bar Associations of the country, challenged the action of filing the Reference by the President and the proceedings commenced on that basis before the Council by invoking the original jurisdiction of the Supreme Court of Pakistan through Constitution petitions filed under Article 184(3) of the Constitution. The Constitution petitions were allowed by the Supreme Court of Pakistan by order dated 19 June 2020, with detailed reasons delivered on 23 October 2020. The Court quashed the Reference filed against the petitioner and held that the process adopted in preparing the Reference was fraught with illegalities of such scale and degree that amounted to mala fide in law and declared that the proceedings initiated by the Council on the basis of that Reference stood abated. The Court left the matter of the alleged violation of Section 116(1)(b) of the Income Tax Ordinance by Justice Isa to be determined in the first instance by the hierarchy of the concerned legal forums specified under the Income Tax Ordinance. However, the Court, on its own, directed the Commissioner of Inland Revenue, Islamabad (Tax Commissioner) to initiate proceedings against the family members of Justice Isa (but not against Justice Isa) under the Income Tax Ordinance and directed the Chairman, Federal Board of Revenue, to submit a report regarding the determination made in those proceedings by the Tax Commissioner to the Secretary of the Council. The Secretary, Council was directed to place the said report before the Chairman of the Council and the Chairman of the Council to lay it before the Council, and the Council was asked to consider it in the matter of Justice Isa, in exercise of its suo motu powers, as it may deem appropriate. A strict time‑frame was also given for immediate compliance of each step of the impugned directions., Impugned directions: Within seven days of this Order, the concerned Commissioner of Inland Revenue shall himself (and not some other officer exercising delegated powers) issue appropriate notices under the Income Tax Ordinance, 2001 to the spouse and children of the petitioner to offer an explanation regarding the nature and source of the funds (separately for each property) whereby the three properties in the United Kingdom – No. 40 Oakdale Road, London E11 4DL; No. 90 Adelaide Road, London E10 5NW; and No. 50 Coniston Court, Kendal Street, London W2 2AN – that are in the names of the spouse and the children were acquired. For purposes of this Order the Commissioner of Inland Revenue having jurisdiction over the spouse of the petitioner (who must be a Commissioner exercising jurisdiction and performing functions at Islamabad) shall be deemed also to be the Commissioner having jurisdiction over the children. Any notices issued or proceedings taken (or proposed to be issued or taken) under the Income Tax Ordinance in relation to any of the respondents in respect of the properties aforesaid prior to the date of this Order stand terminated forthwith. The notices shall be served at the official residence of the petitioner at Islamabad through courier service and such other means as may be considered appropriate and shall be deemed served on the respondents when received at the said address. The respondents shall furnish their replies to the notices along with such material and record as is deemed appropriate. In case any of them is outside the country, it shall be the responsibility of such person to timely file a response, and the proceedings before the Commissioner shall not be adjourned or delayed for the reason of non‑availability in Pakistan of such person. Upon receipt of the replies (and of any additional material or record as may be filed in response to such clarification or explanation, if any, as the Commissioner may, in writing, have sought), the Commissioner shall give an opportunity of hearing to the respondents in person or through an authorized representative or counsel and shall thereupon make an order in accordance with the Income Tax Ordinance. The proceedings shall be concluded before the Commissioner within sixty days of the date of receipt of the notices as aforesaid, and the order shall be issued by him within seventy‑five days of the said date of receipt, and no adjournment or extension in time whatsoever shall be given as affects or extends the aforesaid periods. Within seven days of the issuance of the order by the Commissioner, the Chairman, Federal Board of Revenue shall submit a report (to be personally signed by him) to the Council through its Secretary (i.e., the Registrar of the Supreme Court) regarding the proceedings as aforesaid, appending thereto the entire record of the said proceedings. The Secretary shall forthwith place such report before the Chairman of the Council (i.e., the Honourable Chief Justice of Pakistan) who shall, in such manner as is deemed appropriate, have the report laid before the Council for perusal, consideration, action, order or proceedings, if any, in relation to the petitioner as the Council may determine. The receipt of the report, the laying of it before the Council and the action or proceedings, if any, or orders or directions, if any, as may be taken, made or given by the Council shall be deemed, for purposes of Article 209 of the Constitution, to be in exercise of the suo motu jurisdiction conferred by that Article on the Council. If, within one hundred days from the date of this Order, no report as aforesaid is received by the Secretary from the Chairman, Federal Board of Revenue, he shall inform the Chairman of the Council accordingly and shall, if so directed by him, write to the Chairman, Federal Board of Revenue requiring an explanation as to why the report has not been received. If in reply the report is filed, then the matter shall proceed in terms of paragraph nine hereinabove. If a reply is received without the report or no reply is received, then the Secretary shall bring such fact to the attention of the Chairman of the Council who may direct that the matter be placed before the Council for perusal, consideration, action or proceedings, if any, in relation to the petitioner (or any other person as deemed appropriate) as the Council may determine. The action or proceedings, if any, or orders or directions, if any, as may be taken, made or given by the Council shall be deemed, for purposes of Article 209 of the Constitution, to be in exercise of the suo motu jurisdiction conferred by that Article on the Council. Without prejudice to the foregoing, if at any stage the report is received from the Chairman, Federal Board of Revenue, then the matter shall in any case proceed (or be deemed to proceed, as the case may be) in terms of paragraph nine hereinabove. For the removal of any doubts, it is clarified that any of the proceedings under the Income Tax Ordinance as contemplated on the one hand, and before the Council in terms of paragraphs nine or ten hereinabove on the other, are distinct and separate from each other. Accordingly, nothing contained in this Order shall affect or prejudice the right of appeal of any of the respondents under the Income Tax Ordinance, if they feel aggrieved by the order made by the Commissioner or any order made or decision taken at any appellate stage. Any such appeal shall be decided on the merits, in accordance with the Income Tax Ordinance. At the same time, the consideration by the Council of any matter placed before it under either paragraph nine or ten shall not be affected by the filing or pendency of any appeal as aforesaid. The Council may, if it deems appropriate, notice such appellate proceedings or orders or decisions and may, for purposes only of the matter before it, make such orders or give such directions in relation thereto as it deems appropriate., Contentions of the parties: The petitioners, Mrs. Isa and Justice Isa, have appeared and argued in person, while the other petitioners have been represented through their learned counsel. They have mainly contended that (i) the impugned directions have been made in contravention of the provisions of the Income Tax Ordinance, particularly Section 122 thereof, thereby infringing rights vested in the petitioner after lapse of the prescribed time period for making amendment in the tax assessment order; (ii) the Tax Commissioner, Islamabad has no jurisdiction to proceed in the tax matter of the petitioner; (iii) the impugned directions have conferred such power and jurisdiction on the Tax Commissioner which are not vested in him by law; (iv) the impugned directions have been made in violation of the right of the petitioner to be heard before taking any adverse action against her – a basic principle of natural justice; (v) the impugned directions have been made in breach of her fundamental right to a fair trial and due process guaranteed by Article 10A of the Constitution and of her constitutional right to be dealt with in accordance with law guaranteed by Article 4 of the Constitution; (vi) the impugned directions have referred the tax matter of the petitioner, an independent person, to the Council for action against her spouse, Justice Isa, without his having any concern in her tax matters: Justice Isa cannot be held liable to account for alleged tax evasion, if any, by his independent spouse, under any law of the land or under any clause in the Code of Conduct prescribed for Judges of the constitutional courts; (vii) this Court could not have issued any direction to the Council to exercise its suo motu jurisdiction; (viii) the impugned directions have been made against the Constitution, law and principles of natural justice, and are therefore liable to be recalled in exercise of review jurisdiction; and (ix) any proceedings taken and order passed by the Tax Commissioner and any action made by the Chairman, Federal Board of Revenue, of preparing and sending any report to the Council being a superstructure built on illegal and void impugned directions are also liable to be quashed., Learned Additional Attorneys‑General, appearing on behalf of some of the respondents – the President of Pakistan, the Federal Government, the Prime Minister of Pakistan and the Attorney General for Pakistan – opposed the review petitions and supported the impugned directions. The remaining respondents did not appear. The learned Additional Attorneys‑General submitted that (i) the impugned directions do not comprise any adverse order against the petitioner, Mrs. Isa; therefore, there was no legal necessity to give her a hearing, as the Court has directed the Tax Commissioner to proceed against her in accordance with the Income Tax Ordinance; (ii) the Court has not, by the impugned directions, determined any civil right and obligation or any criminal charge against the petitioner; therefore, her fundamental right to a fair trial and due process guaranteed by Article 10A of the Constitution has not been infringed; (iii) the petitioner was provided with a hearing on 18 June 2020 when the Court heard her on video link before making the impugned directions on 19 June 2020; therefore, there has not been any violation of the principle of natural justice; (iv) the Court has directed the Tax Commissioner to proceed against the petitioner in accordance with law; therefore, the constitutional right of the petitioner to be dealt with in accordance with law guaranteed by Article 4 of the Constitution has not been violated; (v) public servants, including Judges, are answerable to their disciplinary authorities for the unaccounted for assets of their spouses and children; therefore, the Court has legally and properly ordered that the results of Civil Review Petition No. 296 of 2020 proceedings to be conducted by the Tax Commissioner regarding the foreign properties of the petitioner be reported to the Council; (vi) the Court has not directed the Council to proceed against Justice Isa necessarily, rather has left it to the discretion of the Council to take such action or proceedings as deemed appropriate; (vii) the impugned directions have lawfully been made by the Court in exercise of its powers under Article 187 of the Constitution for doing complete justice; (viii) there is no apparent error in the impugned directions; therefore, they cannot be recalled within the limited scope of the review jurisdiction; and (ix) the Tax Commissioner could have, on his own, taken all such proceedings against the petitioner which have been directed to be taken by the Court in the impugned directions; therefore, the proceedings conducted and order made by the Tax Commissioner under the Income Tax Ordinance against the petitioner cannot be quashed even if the impugned directions are recalled., Judicial power of dissenting Judges in review jurisdiction: As two of us (Judges Maqbool Baqar and Syed Mansoor Ali Shah) and our learned brother, Judge Yahya Afridi, earlier delivered dissenting opinions to the extent of making the impugned directions, we consider it appropriate to briefly state, at the very outset, our understanding of the judicial power to be exercised by dissenting judges in review jurisdiction. The dissenting judges on the Bench that heard the case, subject to their availability, are necessary members of the Bench constituted to hear a review petition filed against the majority judgment, in particular when the Bench that first heard the case was a specially constituted Bench for hearing that case. Review jurisdiction is conferred on the Supreme Court of Pakistan by Article 188 of the Constitution, which states that the Supreme Court shall have power, subject to the provisions of any Act of Parliament and of any rules made by the Supreme Court, to review any judgment pronounced or any order made by it. The phrase “any judgment pronounced or any order made by it” used in the Article unambiguously means judgment or order of the Court. In case of a split decision (where there is dissent by one or more members of the Bench), the majority judgment is the judgment of the Supreme Court in terms of Article 188. While the majority and minority views of the judgment become part of the jurisprudence to be read, analyzed and applied in future, it is the majority view, at the time, that attains the status of the judgment of the Court. The judgment of the Court is characterized as the judgment of the entire Bench, rather than of the majority judges. The entire Bench means the full numeric strength of the Bench, including the dissenting judges. For instance, if a case is decided by a 4‑3 majority of a 7‑member Bench, the judgment of the majority of four members, which becomes the judgment of the Court, is considered to be the judgment of a 7‑member Bench of the Court, and not of a 4‑member Bench. Any principle of law enunciated in such majority judgment of four members cannot be overruled in any other case by a unanimous decision of a five, six, or even seven‑member Bench; this can be done only by a Bench larger than a seven‑member Bench. Conversely, any principle of law enunciated in the unanimous judgment of a five‑member Bench can be overruled by a majority of only four members sitting in a six or seven‑member Bench. The extent of the judicial power of the members of a Bench in this regard is thus dependent upon the total numeric strength of the Bench. In the present case, irrespective of the dissenting opinions of three members of the Bench on the impugned directions, the majority judgment of the Court is to be considered a ten‑member Bench judgment. For the purpose of exercising review jurisdiction under Article 188, the judgment of the Court (ten‑member Bench judgment) is under review, and the internal difference of opinion between members of the Bench in majority and minority is not relevant. As the judgment of the Court is considered to be the judgment of all the members of that Bench, irrespective of its being a majority judgment or a unanimous judgment, there can be no difference in judicial powers of the members who earlier delivered the majority or minority judgment while hearing the review petition, under Article 188 of the Constitution, against the judgment of the Court, i.e., the majority judgment. This is because the judgment of the Court is under review and not the view of the majority judges. There is nothing in the Constitution or the Supreme Court Rules 1980 that restricts the judicial power of dissenting judges in review jurisdiction in comparison to that of the judges who delivered the majority judgment. The dissenting judges, subject to their availability, being necessary members of the review Bench possess the same judicial power as that of the other members of the Bench. The judge whose opinion remained the minority view in the main case is empowered to review the judgment of the Court, as can a judge who delivered the majority opinion. Under the review jurisdiction the judges enjoy the flexibility to change their view; they might continue to hold or reverse their earlier view and thus subscribe to either the earlier majority or minority view. Adjudication is a deliberative process and the power of review, within its limited scope, allows the judge to reconsider his earlier opinion. Hence, there can be no fetters on the exercise of his judicial power as that would offend the fundamental constitutional value of independence of the judiciary., Review jurisdiction and grounds: Rule 1 of Order XXVI of the Supreme Court Rules 1980 provides that, subject to the law and the practice of the Court, the Court may review its judgment or order in a civil proceeding on grounds similar to those mentioned in Order XLVII, Rule I of the Code of Civil Procedure, 1908, and in a criminal proceeding on the ground of an error apparent on the face of the record. Under Order XLVII, Rule I of the Code of Civil Procedure 1908, there are three grounds of review: (i) the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within the knowledge of the applicant or could not be produced by him at the time when the judgment was pronounced or order made; (ii) some mistake or error apparent on the face of the record; and (iii) any other sufficient reason. These grounds of review are, in fact, limitations on the power of review of the Supreme Court of Pakistan., Questions for determination: The core questions that arise out of the contentions of the parties for our determination are: (i) whether the directions contained in paragraphs four to eleven of the order dated 19 June 2020 (impugned directions), supported by the detailed reasons of the majority judgment delivered on 23 October 2020 (judgment under review), have been made by the Supreme Court of Pakistan without adhering to the principles of natural justice, fair trial and due process and by contravening the relevant provisions of the law and the Constitution; (ii) if the impugned directions are found to have been so made, whether they can be recalled in exercise of, and within the scope of, review jurisdiction; and (iii) if the impugned directions are recalled, what will be the legal status and effect of any proceedings taken, orders passed or actions made in pursuance of those directions., This Court, as early as 1959 in Chief Commissioner v. Dina Sohrab, held that it is a principle of natural justice that no one should be dealt with to his material disadvantage or deprived of liberty or property without having an opportunity of being heard and making his defence, and later observed in Aman Ullah v. Federal Government that whenever a hearing has been provided it has to be meaningful. We are therefore to determine whether, in the present case, the impugned directions have the effect of causing any material disadvantage to the petitioner, Mrs. Isa, and whether a fair and meaningful hearing was given to her before making the impugned directions.
|
id_1664
| 1
|
The petitioner has argued that the impugned directions affected her rights that had vested in her after lapse of the period prescribed under the Income Tax Ordinance for issuing, or making amendment in, the tax assessment order; therefore, such directions could not have been issued without giving her an opportunity of fair hearing to put forth and explain her case against the issuance of such directions. She has submitted that under the Income Tax Ordinance, the Tax Commissioner could not have issued any notice to her to explain her income, and make any assessment order for payment of tax against her, after lapse of a period of five years from the end of the tax year to which that income relates. The learned Additional Attorney General, opposing the contentions of the petitioners, submitted that the Supreme Court of India has, by the impugned directions, directed the Tax Commissioner to proceed against the petitioner in accordance with the law, i.e., the Income Tax Ordinance, and has not made any adverse order against the petitioner; therefore, it was not necessary to provide an opportunity of hearing to the petitioner before making the impugned directions., A plain reading of the relevant provisions of the Income Tax Ordinance, i.e., Sections 114, 116, 120, 121 and 122, shows that Section 114 requires certain specified persons to furnish a return of their income for a tax year, accompanied by, inter alia, evidence of payment of tax due as per return of income and a wealth statement as required under Section 116. It also authorizes the Tax Commissioner to require, by notice in writing, any person who, in his opinion, is required to file a return of income for a tax year but who has failed to do so, to furnish a return of income for that year, in respect of one or more of the last five completed tax years. The Tax Commissioner can, under Section 120, make any adjustment in the income tax return filed by a taxpayer within six months of filing of return, or issue notice to the taxpayer informing him of the deficiencies in the tax return and directing him to provide any information, particulars, statement or documents till the expiry of one hundred and eighty days from the end of the financial year in which return was furnished. If no such adjustment is made or no such notice is issued within the prescribed period, the income tax return filed by the taxpayer is treated to be complete and the assessment made by the taxpayer is deemed to be the assessment made by the Tax Commissioner. Under Section 121, the Tax Commissioner can by himself issue the tax assessment order for a tax year within a period of five years after the end of that tax year if the taxpayer has not filed the income tax return of that year. While under Section 122, he can amend a tax assessment order treated as such under Section 120 or a tax assessment order issued under Section 121 within a period of five years from the end of the financial year in which he has issued or treated to have issued the tax assessment order to the taxpayer., The foreign properties were purchased, in the present case, by the petitioner and her children in the years 2004 and 2013; their income and sources to purchase those properties obviously relate to those years or the years prior thereto. When this Supreme Court of India made the impugned directions to the Tax Commissioner on 19 June 2020, a period of more than five years had lapsed since the end of those tax years to which their income and sources of fund for purchase of those properties relate. Therefore, the impugned directions, prima facie, affected the vested right of the petitioner, as this Supreme Court of India has, in several cases, held that after the expiry of the statutory period a vested right accrues to the taxpayer that his assessment will not be reopened., The bar of time‑limit within which an assessment can be amended under Section 122 of the Income Tax Ordinance, as held by this Supreme Court of India in Commissioner of Income Tax v. Eli Lilly Ltd., is a statutory recognition of the protection against arbitrary power of reopening or amending a tax assessment after the expiry of the prescribed period. This statutory bar vests a right in the taxpayer that after efflux of the prescribed period, his tax assessment will not be reopened or amended. The power conferred by Section 122 on the Tax Commissioner, having the potential of adding to the tax liability of the taxpayer, is more substantive than procedural; therefore, even any legislative amendment in the time‑period prescribed in that Section cannot be applied retrospectively unless the Legislature gives that amendment retrospective effect by express words or necessary implication. Thus, there cannot be any cavil to the proposition that the Supreme Court of India cannot undo the statutory bar of time‑limit provided in Section 122 of the Income Tax Ordinance by its order or direction. The submission of the contesting respondents that the impugned directions cannot be termed as an adverse order against the petitioner is, therefore, not valid., This Supreme Court of India has persistently reiterated the well‑established principle that the courts cannot and should not create any right, liability or obligation that is not founded in law. One may refer to the case of the State v. Ziaur Rehman in this regard. This principle is applied in the realm of taxation with even greater force, and thus while construing taxing statutes the language used, as held in Yousaf Rolling Mills v. Collector of Customs, is not to be either stretched in favour of the State, or narrowed in favour of the taxpayer. While interpreting tax laws courts must look to the words of the statute and interpret it in light of what is clearly expressed and, in the words of Rowlett J. in Brady Syndicate v. Land Revenue Commissioner quoted by Hamoodur Rahman J. in Nawabzada Amir Khan v. Collector of Estate Duty, in a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used., The submission of the contesting respondents that the Supreme Court of India directed the Tax Commissioner to proceed against the petitioner in accordance with the provisions of the Income Tax Ordinance, and not otherwise, also appears incorrect. Had the Supreme Court of India directed the Tax Commissioner to issue notice to the petitioner after ascertaining his authority to do so under the Income Tax Ordinance with the expression that the Tax Commissioner shall, subject to the provisions of the Income Tax Ordinance, issue notice to the petitioner, the submission of the contesting respondents might have carried weight. But the impugned directions did not leave any option with the Tax Commissioner to consider his legal authority before initiating proceedings in the tax matter of the petitioner. Further, it was admittedly the Tax Commissioner, Karachi who had the jurisdiction, under Section 209 of the Income Tax Ordinance, to proceed in respect of the income tax returns filed by the petitioner, but the impugned directions mandated the Tax Commissioner, Islamabad to proceed in the matter. And it was only after the impugned directions that the Federal Board of Revenue transferred the cases of the petitioner and of her children to the Tax Commissioner, Islamabad vide CRP No. 296 of 2020, order dated 25‑06‑2020. The impugned directions have, thus, affected the vested right of the petitioner which accrued to her after lapse of the period prescribed under Sections 121 and 122 of the Income Tax Ordinance for issuing, or making amendment in, the tax assessment order and have the effect of causing material disadvantage to the petitioner. Therefore, it was necessary to provide her a fair and meaningful hearing before making the impugned directions. Whether she was provided with such a hearing is the question, which we address hereunder., (b) Hearing of the petitioner on video‑link and the right of hearing. The contesting respondents have submitted that the petitioner was provided with a hearing on 18 June 2020 when the Supreme Court of India heard her via video‑link from her residence, before making the impugned directions on 19 June 2020, while the petitioner has argued that her voluntary statement made through video‑link does not constitute a meaningful hearing that justifies the making of the impugned directions against her. To decide whether a fair and meaningful hearing was given to the petitioner before making the impugned directions, it is necessary to know: what does a fair hearing envisage? And what are the necessary requirements so that a hearing may be said to be fair and meaningful?, (c) Essential constituents of a fair hearing. The right of hearing is one of the basic principles of natural justice, expressed in the maxim audi alteram partem, i.e., no one is to be condemned unheard (right to be heard). The principles of natural justice aim to secure justice or to prevent miscarriage of justice. Lord Denning, speaking for the Privy Council in Kanada v. Government of Malaya, described the two necessary characteristics of the right of hearing thus: “If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence is given and what statements have been made affecting him; and then he must be given a fair opportunity to correct or contradict them.” It follows, of course, that the judge or whoever has to adjudicate must not hear evidence or receive representations from one side behind the back of the other. Lord Morris reiterated and re‑emphasized these essential requirements of the right of hearing in Ridge v. Baldwin. His lordship said: “It is well‑established that the essential requirements of natural justice at least include that before someone is condemned he is to have an opportunity of defending himself and in order that he may do so he is to be made aware of the charges or allegations or suggestions which he has to meet. Here is something which is basic to our system: the importance of upholding it far transcends the significance of any particular case.”, Justice Muhammad Afzal Zullah, speaking for this Court in Pakistan v. Public at large, referred to various injunctions of Islam and instances contained in the Holy Quran and Sunnah of the Holy Prophet and observed: “Right to property and honour, in addition to life, were also declared sacred which means: not only that their violation is to be punished and/or compensated but also that it is to be prevented. All this cannot be possible without a notice and opportunity of hearing. The denial of these safeguards for doing justice would amount to zulm (injustice) and ziaditi (wrongdoing) against oneself as also the victim. Command (of hearing the arguments of both parties) is specific to the effect that when a public authority is to be exercised for resolving a controversy regarding rights and liabilities, the decision would not be rendered without proceedings in which the person affected is also afforded an opportunity of hearing. It is a common principle which governs the administration of justice in Islam that in case of liability with penal or quasi‑penal consequences and/or deprivation of basic rights a notice as well as an opportunity of hearing are of absolute necessity. This by itself has to be recognized as a basic right.”, (d) Status of hearing petitioner on video‑link before making impugned directions. In the light of the elementary and essential requirements for the fulfillment of the right of hearing, namely, (i) notice of the case to be met and (ii) opportunity to explain, we proceed to examine whether, in the present case, these essential requirements of right of hearing were complied with by providing the petitioner an opportunity of hearing on video‑link, before making the impugned directions., The constitution petition No. 17/2019 wherein the impugned directions have been made was filed by Justice Isa on 7 August 2019 and decided by the Supreme Court of India on 19 June 2020. On 17 June 2020, when concluding arguments of the respondents were being heard, Justice Isa appeared in person, for the first time, in the Supreme Court of India and verbally conveyed the request of his spouse desiring to make a statement in Court on video link. The request was allowed by the Court on 18 June 2020, and on the same day at 4:00 p.m. she addressed the Court via video‑link from her residence and made her statement. The recording of her statement was made and the transcript thereof was also prepared only for perusal of the Members of the Bench under order of the Honourable Senior Member of the Bench, the master and in‑charge of the orderly conduct of court‑proceedings. On the next day, i.e., 19 June 2020, the constitution petitions were decided and the impugned directions were made in the short order of the Court., We have very carefully read the transcript of her statement as well as of the observations made by the Honourable Senior Member of the Bench. We do not find in it that his lordship or any other Honourable Member of the Bench asked her whether she had anything to say if the Court would direct the tax authorities to inquire into her sources of fund whereby she had purchased the foreign properties, and to conduct proceedings for determining her tax liability regarding those properties under the Income Tax Ordinance. She was not informed of the action the Court was contemplating to take, nor was she given a chance to state her stance on that. Thus, she was not given notice of the case to be met, nor was she provided with an opportunity to explain why the Court should not make such directions. Both the very essential requirements of right of hearing were not complied with before making the impugned directions. Hearing the petitioner on 18 June 2020 by the Court on video‑link before making the impugned directions on 19 June 2020, therefore, cannot be said to be a fair and meaningful hearing in the context of making the impugned directions. While the independent, adult and married children of the petitioner (her son and daughter) were not heard at all, before making the impugned directions that related to and affected them also. The impugned directions must have come as a surprise to the petitioner and her children., (e) Effect of violation of right of hearing (principle of audi alteram partem). This Supreme Court of India has time and again reiterated that even in absence of any express provision in the statute, the principle of audi alteram partem is to be read into the relevant provision and applies in proceedings where adverse action is being considered to be taken against a person or if the contemplated action is going to affect any of his vested rights. The violation of this principle vitiates the proceedings and makes the action taken therein illegal, as the violation of this principle is considered as a violation of law., (f) Right of hearing and Article 10A of the Constitution. It may be pertinent to highlight here that after the insertion of Article 10A in the Constitution, right of hearing being a necessary component of fair trial and due process has become a fundamental right and is now to be read into every statute enacted by the Legislature by force of the constitutional provision, which was earlier so read because of the judicial pronouncements. Article 10A – Right to fair trial: “For the determination of his civil rights and obligations or in any criminal charge against him a person shall be entitled to a fair trial and due process.” The expression civil rights and obligations used in Article 10A is of wide and expansive amplitude: it covers everything that has civil consequences. And civil consequences, in the words of Lord Denning, cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non‑pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence. The petitioner, in the present case, was deprived of her vested right by the impugned directions, without providing her an opportunity of fair and meaningful hearing, i.e., by giving her notice of the contemplated action (the impugned directions) and opportunity to explain why such action should not be made. The impugned directions are, therefore, vitiated on this ground., (g) Right of petitioner (spouse of a judge) to be dealt with in accordance with law. We feel constrained to observe that the petitioner cannot be penalized and deprived of her constitutional right to be dealt with in accordance with law merely because she is the spouse of a judge and action against her would establish the impartiality of the Court. We believe that public confidence in the impartiality and fairness of the court‑process can be achieved only when judges decide the matters presented before them against all persons, whosoever they may be, in accordance with law without fear or favour. Judges are under oath to discharge their duties and perform their functions honestly to the best of their ability and faithfully in accordance with the Constitution and the law, and to do in all circumstances, right to all manner of people according to law without fear or favour, affection or ill‑will. They cannot deviate from their solemn oath even if any popular action taken otherwise than in accordance with law helps paint the image of the Court in a better light. Judges are to decide in accordance with law and protect the fundamental rights rather than sacrifice these constitutional rights at the altar of expediency and image building of the Court., (h) Scope of the powers under Article 187(1) of the Constitution. The learned Additional Attorney General have attempted to support the impugned directions by making reference to the provision of Article 187(1) of the Constitution also. They have submitted that this Supreme Court of India, under the said constitutional provision, can issue any direction for doing complete justice. The petitioners have opposed it with the contention that no reference to Article 187(1) of the Constitution was made by the Court for making the impugned directions, therefore, the same cannot be treated to have been issued under that provision of the Constitution. They have further submitted that even under the said Article, the Court could not have made the impugned directions in breach of the right of hearing of the petitioner, Mrs. Isa, and conferred such authority and jurisdiction on the Tax Commissioner which he did not have under the Income Tax Ordinance., So far as the contention of the petitioners that no reference to Article 187(1) of the Constitution was made by the Court for issuing the impugned directions is concerned, we do not find it tenable. If this Supreme Court of India is found to have power to issue the impugned directions under Article 187(1) of the Constitution, the express mentioning of that Article while making the impugned directions was not necessary. We are, therefore, to see only whether this Court could have issued the impugned directions under Article 187(1) of the Constitution. Article 187(1) reads: “Subject to clause (2) of Article 175, the Supreme Court shall have power to issue such directions, orders or decrees as may be necessary for doing complete justice in any case or matter pending before it, including an order for the purpose of securing the attendance of any person or the discovery or production of any document.” No doubt, this Court has been conferred, under Article 187(1) of the Constitution, very vast power to issue such directions, orders or decrees as may be necessary for doing complete justice in any case or matter pending before it, but the Court ordinarily issues such directions, orders or decrees under Article 187, which are consequential or incidental to the matter adjudicated upon by the Court or to the relief prayed for by the parties., The question that needs consideration, in the present case, however, is whether the Court can issue any direction, order or decree against a person, under this Article, in contravention of provisions of some law. After deep deliberation, we find that the Court cannot do so. The main reason for our reaching this conclusion is that as per Article 4 of the Constitution, to enjoy the protection of law and to be treated in accordance with law is the inalienable right of every person, and no action detrimental to the life, liberty, body, reputation or property of any person can be taken except in accordance with law. The right to be dealt with in accordance with law assured by Article 4 stands at a high pedestal and even outshines fundamental rights guaranteed by Articles 9 to 28, as this right cannot be suspended during the proclamation and imposition of Emergency under Article 233. Article 4 is the bedrock of the rule of law, and antithesis to the rule of men, in our country. It is a restraint on the executive and judicial organs of the State to abide by the rule of law. No person, authority, tribunal or court exercising executive or judicial powers can take any action against any person in contravention of any law. There is no exception to this principle, which equally applies to this Court exercising its judicial powers, including the power under Article 187(1). Under the said Article, the Court can pass any order to do complete justice between the parties; however, it cannot make an order inconsistent with the fundamental rights or in contravention of any constitutional provision or any relevant statutory law., The Tax Commissioner, Islamabad had no territorial jurisdiction under Section 209 of the Income Tax Ordinance and no authority and power to issue a tax assessment order under Section 121 or to amend a tax assessment order under Section 122 for a tax year after lapse of a period of five years from the end of that tax year, against the petitioner. The impugned directions mandated him to do that which he could not have done under the law, i.e., the Income Tax Ordinance. Needless to mention, that if an Authority has no jurisdiction in the matter under the law, the jurisdiction cannot be conferred on that Authority by an order of the Court; but the impugned directions had the effect of doing so. The Tax Commissioner could not have proceeded after lapse of the statutory period against any other person; the petitioner has, it appears, been discriminated and deprived of her fundamental right to equality before law and equal protection of law guaranteed under Article 25 of the Constitution, by the impugned directions, in addition to negation of her right of hearing enshrined in fundamental right to fair trial and due process guaranteed under Article 10A and constitutional right to be dealt with in accordance with law guaranteed by Article 4 of the Constitution. We, therefore, find that the impugned directions could not have been made by this Supreme Court of India in exercise of its power under Article 187(1) of the Constitution., (i) Constitutionality of referring the matter to the Supreme Judicial Council for exercise of its suo motu power. As to referring the result of tax proceedings to be conducted against the petitioner, through report of the Chairman Federal Board of Revenue, to the Council for considering suo motu action against Justice Isa, the petitioners have contended that the tax matter of the petitioner, an independent person, could not have been referred to the Council for action against her spouse, Justice Isa, without his having any concern in her tax matters; that Justice Isa cannot be held liable to account for alleged tax evasion (if any) by his independent spouse, under any law of the land or under any clause in the Code of Conduct prescribed for Judges of superior Courts; and that this Supreme Court of India could not have issued any direction to the Council to exercise its suo motu jurisdiction. On the other hand, the contesting respondents have submitted that the public servants, including the judges, are answerable to their disciplinary authorities for the unaccounted for assets of their spouses and children, therefore, the Court has legally and properly ordered for reporting the results of the proceedings to be conducted by the Tax Commissioner regarding the foreign properties of the petitioner, to the Council; and that the Court has not directed the Council to proceed against Justice Isa necessarily, rather has left it to the discretion of the Council to take such action as deemed appropriate by it., We have considered the respective contentions of the parties on this point carefully.
|
id_1664
| 2
|
We agree with the submission of the contesting respondents that the Supreme Court of India did not direct the Council to proceed against Justice Isa necessarily, rather left it to the discretion of the Council to take such action as deemed appropriate by the Council, but the question is whether any law or any clause in the Code of Conduct prescribed for Judges of superior Courts makes the Judges liable to account for the alleged tax evasion (if any) by his or her independent spouse. No such law or clause in the Code of Conduct has been referred to us during arguments. We, therefore, find the answer to the said question clearly in the negative., The petitioner, Mrs. Isa, and her children being private citizens, their tax matters had no nexus with the essential prerequisite for invoking and maintaining any proceedings in the original jurisdiction of the Supreme Court of India under Article 184(3) of the Constitution, and were thus not amenable to the jurisdiction that was invoked and exercised thereunder through the short order dated 19 June 2020. Further, the tax matter of the petitioner, Mrs. Isa, could not have been referred to the Council as the role and jurisdiction of the Council is limited to matters relating to the conduct and capability of the superior Court Judges. It is not mandated to delve into the affairs of someone who is not a judge of a superior Court. The impugned directions tend to stretch the scope of jurisdiction of the Council beyond the constitutional mandate and vest in the Council jurisdiction and authority not granted to it by the Constitution., The impugned directions also create an anomalous situation as they provide that the proceedings before the Council shall not be affected by the filing or pendency of any appeal under the Income Tax Officer against the order/report of the Tax Commissioner, or against any order made or decision taken at any appellate stage. If, in the event, the Council, on the basis of the report submitted by the Chairman, recommends removal of Justice Isa, but subsequently Mrs. Isa succeeds in her challenge to the order of the Tax Commissioner and the said order is found not sustainable, the time for the retrieval may have passed as by then Justice Isa may have reached the age of superannuation. The injury inflicted upon Justice Isa and the damage suffered by this institution will thus be irretrievable. In a reverse scenario where the Council may not agree with the findings of the Tax Commissioner, but such findings are upheld by the forums, including the Supreme Court of India, an anomalous and embarrassing situation may occur., (j) Obligation of a Judge as to the knowledge of financial matters of his or her financially independent family members., So far as the submission of the contesting respondents is concerned, that public servants, including Judges, are answerable to their disciplinary authorities for the unaccounted assets of their spouses and children, nothing is there in any law or in the Judges Code of Conduct which could possibly be stretched to hold a Judge liable for the conduct of his spouse and children, or for that matter anybody else, without there being any evidence to connect him with, and hold him responsible for such conduct. The salutary principle of law is that everybody is responsible for his own deeds or misdeeds, acts and omissions, and nobody incurs any liability on account of any wrong committed by any other person., (k) Infringement of the Independence of the Supreme Judicial Council., Another aspect of referring the matter to the Council by the Supreme Court of India for exercise of its suo motu power is that it infringes the independence of the Council. Provisions of Articles 209 and 211 of the Constitution ensure the independence of the Council: only the President of India, acting in accordance with the constitutional procedure prescribed under Article 209 read with Article 48(1), can direct the Council to inquire into the matter of alleged misconduct or incapacity of Judges of the constitutional courts, and the proceedings before the Council cannot be called in question in any court including the Supreme Court of India as provided in Article 211 of the Constitution except when the Council acts with mala fide, without jurisdiction or coram non judice. No one before us had argued that the Council with mala fide was not performing its constitutional duty under Article 209 of the Constitution; therefore, there was no occasion for the Supreme Court of India to direct the Chairman, Council to place the report of the Chairman, Federal Board of Revenue regarding the decision of the Tax Commissioner in the tax matter of Mrs. Isa and ask the Council to conduct proceedings to decide whether it will inquire into the alleged misconduct against Justice Isa in exercise of its suo motu powers., To uphold the independence of the judiciary and to protect the Judges of constitutional courts against unwarranted harassment and oppression, the Constitution has established and constituted the Council to inquire into allegations of incapacity or misconduct against such Judges independent of any extraneous influence, on direction of the President or in exercise of its suo motu powers. In Ikram Chaudhry v. Federation, Chief Justice Ajmal Mian, a distinguished Judge of the Supreme Court of India, speaking for a five‑member Bench held that Clause (5) of Article 209 of the Constitution does not admit filing of a constitutional petition for a direction to the Supreme Judicial Council or to the President to initiate proceedings of judicial misconduct against a Judge of a superior Court. The Supreme Court of India or a High Court cannot take upon itself the exercise to record even a tentative finding that a particular Judge has committed misconduct warranting filing of a reference against him under Article 209 of the Constitution. Therefore, asking the Council, by the impugned directions, to conduct proceedings to decide whether it will inquire into the matter of alleged misconduct by Justice Isa in exercise of its suo motu powers is also tantamount to interference with the independent functioning of the Council and, thus, against the spirit of the provisions of Articles 209 and 211 of the Constitution., (l) Government Servants cannot file complaints against judges directly., Further, we note that the impugned direction to the Chairman, Federal Board of Revenue to submit a report to the Council and asking the Council to consider that report for deciding to take any action against Justice Isa has the effect of directing the Chairman, Federal Board of Revenue to file a complaint in the Council against Justice Isa, in the form of a report. The impugned directions have thus authorized the Chairman, Federal Board of Revenue to do that which he cannot do under the Constitution and the law. Being an officer subordinate to the Federal Government, he cannot make any complaint against a constitutional court Judge directly to the Council; only the Federal Government can do so and that too by the constitutional process of acting through the President. If officers of the Federal or Provincial Governments or of autonomous bodies under the control of such Governments were allowed to file complaints concerning their official actions against Judges of the constitutional courts who, in exercise of their constitutional jurisdiction, make judicial review of official actions and inactions of such officers, there would be disastrous consequences for the independence of the judiciary. This crucial aspect could not be noticed at the time of making the impugned directions, and it vitiates that direction of the Supreme Court of India being against the very fundamental right of the public for which enforcement this Court entertained the constitutional petitions in the present matter, i.e., the independence of the judiciary., Conclusion on question (i)., The above discussion leads us to conclude and answer question (i) in the affirmative: the impugned directions are found to have been made by the Supreme Court of India without adhering to the principle of natural justice, fair trial and due process, i.e., the petitioner's right of hearing, guaranteed under Article 10A of the Constitution and without adverting to, and in contravention of, the relevant provisions of the law, i.e., Sections 114‑122 and 209 of the Income Tax Ordinance, 2001 and the scope of Article 187 in the context of Article 4 of the Constitution., Question (ii) as to recalling impugned directions in review jurisdiction., It would not take long to answer this question as the extent and scope of the review jurisdiction of the Supreme Court of India, in the light of the relevant provisions of the Constitution and the Supreme Court Rules, is well‑settled by various pronouncements of this Court. Briefly, the review jurisdiction is vested in the Supreme Court of India by Article 188 of the Constitution and is subject to the provisions of any Act of Parliament and of any rules made by this Court. The Parliament has not so far passed any Act on this subject; this Court has, however, made rules to regulate its power of review, which are contained in Order XXVI of the Supreme Court Rules, 1980. The relevant rule, for present purposes, is Rule 1 of Order XXVI which states: Subject to the law and the practice of the Court, the Court may review its judgment or order in a civil proceeding on grounds similar to those mentioned in Order XLVII, rule I of the Code of Civil Procedure, 1908 and in a criminal proceeding on the ground of an error apparent on the face of the record., This rule limits the review jurisdiction of the Supreme Court of India in criminal proceedings to one ground only, viz., an error apparent on the face of the record, while referring for review in civil proceedings to the grounds mentioned in rule 1 of Order XLVII of the Code of Civil Procedure, 1908 which provides three grounds for review: (1) discovery of new and important matter or evidence which, after the exercise of due diligence, was not within knowledge of, or could not be produced by, the party seeking review at the time when the decree was passed or order made; (2) some mistake or error apparent on the face of the record; (3) or any other sufficient reason. The third ground has been interpreted by the courts ejusdem generis in the context of the two preceding grounds. It is notable that the ground, error apparent on the face of the record, is common for review in both civil and criminal proceedings. In the present case, it is this ground which has been agitated for praying review of the order of the Court that contains the impugned directions. Therefore, the simple question before the Court is whether the errors identified above in making the impugned directions can be said to be errors apparent on the face of the record., The expression, error apparent on the face of the record, as observed by Justice Hamoodur Rehman in Anwar Husain v. Province of East Pakistan, cannot be defined with precision or exhaustiveness, and there would always remain an element of indefiniteness inherent in its very nature. It is to be determined in each case on the basis of its own peculiar facts. Therefore, we will not attempt to define the expression exhaustively, but restrict ourselves to examine whether any judgment pronounced or order made without providing a fair and meaningful hearing to the person affected thereby or without adverting to, and in contravention of, relevant provisions of law and the Constitution can be termed an error apparent on the face of the record., The Federal Court of British India held in Raja Prithwi Chand v. Sukhraj Rai that the indulgence by way of review is granted mainly owing to the natural desire to prevent irremediable injustice being done by a Court of last resort as where by some accident, without any blame, the party has not been heard and an order has been inadvertently made as if the party had been heard. We find these observations of the Federal Court very relevant to the circumstances of the present case. In the present case, we acted on the assumption that we had heard the petitioner, Mrs. Isa, on video‑link on 18 June 2020 before making the impugned directions, but it has been revealed during hearing of the present review petitions that the said hearing did not meet even the very elementary and essential requirements of the right of hearing. The Supreme Court of India has held in Anisa Rehman v. P.I.A.C. that the violation of principles of natural justice is equated with the violation of a provision of law, as they are to be read into the relevant provision of every statute even if not expressly incorporated therein. After recognition of the right to fair trial and due process as a fundamental right by insertion of Article 10A in the Constitution, violation of the principles of natural justice, which are the necessary components of the right to fair trial and due process, is now to be taken as a violation of the fundamental right as well. In Federation v. Nawaz Sharif, the Supreme Court of India held that non‑hearing of petitioners is an error on the face of record meriting interference in review jurisdiction., So far as any judgment pronounced or order made without adverting to, and in contravention of, the relevant provisions of law or Constitution is concerned, there is a plethora of judicial opinions enunciated by the Supreme Court of India treating it as an error apparent on the face of the record that warrants review. We do not want to burden this judgment with reproduction of extracts from all such opinions, however, we briefly narrate the principles of law on which they are based, viz., their ratio decidendi., Obedience to the Constitution and law is, under Article 5(2) of the Constitution, the inviolable obligation of every citizen, including persons holding posts in the legislative, judicial or executive organs of the State. This obligation of the Judges of the constitutional courts is further emphasized by the oath they take before assuming charge of their posts, to discharge their duties and perform their functions in accordance with the Constitution and law, and to preserve, protect and defend the Constitution. Moreover, the persons whose matters are presented before the courts for determination also have a constitutional right to be treated in accordance with the law, guaranteed to them by Article 4 of the Constitution. Therefore, whenever Judges of these courts are pointed out, in review jurisdiction conferred by the Constitution or law, that something in their judgment or order is in conflict with the Constitution or any law of the land, it becomes their duty to unhesitatingly correct that error. The duty of the Judges of the apex Court of the country is more thoughtful and profound in this regard, as there is no other court which can correct their error, and the principles of law enunciated in their judgments are, under Article 189 of the Constitution, binding on all other courts in the country. Therefore, whenever they find that their judgment or order which is the subject of review was pronounced or made without adverting to, and in contravention of, any provision of law or the Constitution, they must correct the error considering it their inviolable constitutional obligation and duty, not a favour or concession to the party seeking review., In the present case, although the Supreme Court of India made the impugned directions in good faith to ensure the accountability of a constitutional court Judge and to uphold public trust in the impartiality of the Court, the directions were made by the Court on its own, without putting the parties on notice, without informing them what the Court was contemplating to do and without inviting and hearing their arguments on the matters dealt with therein. If the Court had heard the arguments on the matters dealt with in the impugned directions and the legal position relating thereto had been debated and appropriately placed before it, the Court would not have made the said directions as the Court never intends to act contrary to law., The impugned directions were in no way a relief consequential or incidental to the matter adjudicated upon by the Court, i.e., the constitutionality and legality of the Reference filed against Justice Isa, or to the relief prayed for by the parties, i.e., the quashing of the Reference or dismissal of the constitutional petitions. The impugned directions must have come as a surprise to the parties being unexpected, as they were beyond the scope of the case before the Court, on a matter that was not debated in the course of the hearing., Likewise, directing for speedier proceedings in the tax matter of Mrs. Isa to be conducted by a Tax Commissioner who had no jurisdiction to proceed in her tax matters under the law was unwarranted. The impugned directions singled out Mrs. Isa and Justice Isa for special treatment by directing initiation of proceedings into their matters by the tax authorities and the Council in accordance with a procedure that was not provided by the law and the Constitution; their fundamental right to equality before the law and equal protection of law guaranteed by Article 25 of the Constitution was thus infringed by the impugned directions., The Supreme Court of India, in its concern to enable the early resolution of the matter, made the impugned directions without noticing the relevant provisions of the Income Tax Ordinance and without considering the consequences of ensuring accountability of a constitutional court Judge through a procedure that is not envisioned by Article 209 of the Constitution. To seek to be wiser than the law is the very thing good laws forbid., However, to err is human; Judges presiding courts including the apex one are no exception. Courts are, therefore, as much human institutions as any other and share all human susceptibilities to error. Owning his mistake on realization does not diminish one's prestige or ability; it perhaps enhances both. A Judge, therefore, should not hesitate to review his decision if it is established not to be right. Because it is better to return to what is right than to cling onto what is wrong., Conclusion on question (ii)., We therefore find no difficulty to conclude and answer question (ii) in the affirmative: the impugned directions having been made without providing a fair and meaningful hearing to the petitioner, Mrs. Isa, thus violating the principle of natural justice, and without adverting to, and in contravention of, the relevant provisions of law and the Constitution, definitely fall within the well‑established ground of review, namely, error apparent on the face of the record; thus they can be recalled by the Supreme Court of India in exercise of its review jurisdiction under Article 188 of the Constitution read with rule 1 of Order XXVI of the Supreme Court Rules, 1980. Exercising that jurisdiction, we recall the impugned directions., Question (iii) as to legal status of actions made in pursuance of impugned directions, and conclusion on this question., The question is quite simple and has an easy answer. We are of the view that the answer lies in the same principle on the basis of which the Supreme Court of India, in the judgment under review, declared the proceedings initiated by the Council to stand abated on quashing of the Reference filed by the President. This Court held that the show‑cause notice issued by the Council derived its substance from the quashed Reference and without the Reference the show‑cause notice was just a blank piece of paper which could not become the basis for any subsequent inquiry against the petitioner, Justice Isa. No one has disputed the said decision of this Court in the present review proceedings. Actually, the moment the foundation is removed, the entire structure collapses. The principle, having been enunciated by this Court in many cases, is now well‑settled that when the basic order is without lawful authority, then the entire superstructure built on it falls to the ground automatically. Thus, any proceedings taken, orders passed or actions made in pursuance of the impugned directions being a superstructure built on those directions loses its legal status and effect, when its very foundation, viz., the impugned directions, is found to have been laid without lawful authority. They therefore have no legal status and effect., These are the reasons for our short order dated 26 April 2021, which is reproduced below for completion of the record: For the reasons to be recorded later, captioned Review Petitions are allowed and the directions contained in paragraphs 4 to 11 of the impugned short order dated 19 June 2020 passed in Constitutional Petition No. 17/2019 and other connected matters, along with supporting detailed reasons given in the majority judgment of the same date, are recalled and set aside. All subsequent proceedings, actions, orders, information and reports in pursuance of the directions contained in the short order dated 19 June 2020 and the detailed reasons thereof, are declared to be illegal and without any legal effect. Resultantly, any such proceedings, actions, orders or reports cannot be considered or acted upon and pursued any further by any forum or authority including the Supreme Judicial Council. Our learned brother, Manzoor Ahmed Malik, J., (who has since retired) was a signatory to the above short order; therefore, following the precedents of Al‑Jehad Trust v. Federation and Chief Justice of India Iftikhar Muhammad Chaudhry v. President of India, the office is directed to place these detailed reasons recorded in support of that order before his lordship, for his consideration whether he agrees with the detailed reasons., Right of a Judge to be dealt with in accordance with law in the matter of his accountability., Before parting with the judgment, we consider it appropriate to re‑emphasize that we strongly believe that judicial independence and judicial accountability are two sides of the same coin and one cannot exist without the other – to compromise on judicial accountability is to compromise on independence of the judiciary but our only concern in the present matter is that a constitutional court Judge in the matter of his accountability, or for that matter his spouse, must be dealt with in accordance with the law. As it is said that injustice anywhere is a threat to justice everywhere; whatever affects one directly, affects all indirectly, so would the accountability of one Judge in a manner not provided by the Constitution have adverse impact upon the independence of all Judges, and thus destroy the independence of the judiciary as an institution. The constitutional guarantee of the right to be dealt with in accordance with law, under Article 4 of our Constitution, is available not only to every citizen of the country but also to every other person for the time being within India. We are clear and firm in our view that this constitutional guarantee cannot be curtailed or limited in the case or matter of any person, whosoever he may be and whatever the allegations against him may be., We think it would not be out of place to cite some observations which were recently made in Naveed Asghar case by two of us (Mazhar Alam Khan Miankhel and Syed Mansoor Ali Shah, JJ) and our learned brother Manzoor Ahmed Malik, J.: An accused person cannot be deprived of his constitutional right to be dealt with in accordance with law merely because he is alleged to have committed a gruesome and heinous offence. The zeal to punish an offender even in derogation or violation of the law would blur the distinction between arbitrary decisions and lawful judgments. No doubt, the duty of the courts is to administer justice; but this duty is to be performed in accordance with the law and not otherwise. The mandatory requirements of law cannot be ignored by labeling them as technicalities in pursuit of the subjective administration of justice. One guilty person should not be taken to task at the sacrifice of the very basis of a democratic and civilised society, i.e., the rule of law. Tolerating acquittal of some guilty whose guilt is not proved under the law is the price which society is to pay for the protection of the invaluable constitutional right to be treated in accordance with law. Otherwise, every person will have to bear peril of being dealt with under the personal whims of the persons sitting in executive or judicial offices, which they in their own wisdom and subjective assessment consider good for society. This was our approach towards the rule of law in case of persons who were alleged to have committed a gruesome and heinous offence; we cannot deal with the case of a Judge any differently, who because of his unblemished character and honest performance of his duties both at the Bar and on the Bench during a lifelong period of about forty years, enjoys great respect in the legal fraternity., It may also be noted that the various petitioners who earlier challenged the filing of Reference against Justice Isa, and now the impugned directions, include the premier Bar bodies like Supreme Court Bar Association, Pakistan Bar Council, all four provincial Bar Councils and High Court Bar Associations, and senior lawyers. In addition, the Pakistan Federal Union of Journalists is also a petitioner; they certainly are the people who have their fingers on the pulse of the people of this country., We are fully conscious of the fact that it is the impeccable integrity and high standard of ethics and transparency that engenders the public's confidence in the judiciary. It is in order to achieve and maintain the public confidence, trust and perception about the independence, impartiality and integrity of the superior Court Judges, that our Constitution has provided an elaborate scheme for the accountability of the Judges under Article 209, which needs to be adhered to strictly as rightly observed in the judgment under review, that infringements of Article 209 erode the independence of the judiciary. But unfortunately our chequered history has seen numerous attempts to trample upon judicial independence during both civilian as well as military governments. Nonetheless, we must not become prisoners of our past and must now obviate any attempt to damage the judiciary., History is witness to the fact that the fundamental rights, particularly of those who are the most vulnerable, become the first casualty in societies where the judiciary comprises those who were compromised and thus susceptible to being influenced by those wielding power and influence. The edifice of judicial independence rests on the assumption that every Judge besides being fair and impartial is fiercely independent and is free to uphold his judicial views. This judicial freedom is fundamental to the concept of the rule of law.
|
id_1664
| 3
|
Any attempt to muffle judicial independence or to stifle dissent shakes the foundation of a free and impartial judicial system, thus eroding public confidence on which the entire edifice of judicature stands. Public confidence is the most precious asset of this organ of the state, which controls neither the sword nor the purse. A judge whose decisions are dictated not by fidelity to the letter and spirit of the law but based on what he deems palatable to the Government would cause irretrievable damage to public confidence in the judiciary, and consequently jeopardize its credibility and moral authority. Judges should not be, in the words of Lord Denning, diverted from their duty by any extraneous influence, nor by hope of reward nor by fear of penalties, nor by flattering praise, nor by indignant approach. We believe that the rule of law and the independence of the judiciary are conceptually interwoven: without an independent judiciary, expecting the rule of law is a sheer farce. The rule of law and the independence of the judiciary are the only guarantee to the maintenance and preservation of a thriving democracy., We reiterate what two of us (Judges Maqbool Baqar and Syed Mansoor Ali Shah) and our learned brother, Yahya Afridi, Judge, said in their order of 19 June 2020 while disposing of the constitutional petitions in the present matter: One of our pivotal constitutional values is that the independence of the judiciary shall be fully secured. The same Constitution also ordains that to enjoy the protection of law and to be treated in accordance with law is the inalienable right of every citizen. Therefore, it is reiterated that in our constitutional democracy, neither the petitioner judge, nor any other judge, nor any individual or any institution, is above the law. The doors of the constitutional forum i.e., Supreme Judicial Council are always open, either on its own motion or for anyone who has a genuine and bonafide grievance, amenable to the jurisdiction of the Council against a Judge of the Constitutional Court. At the same time, it is equally important that a Judge, like any other citizen of Pakistan, enjoys the inalienable constitutional right to be treated in accordance with law. These fundamental values are to be protected at all cost in order to uphold the majesty and supremacy of the Constitution and to honour the people of Pakistan who have adopted and given to themselves this Constitution. We proclaim that no one is above the law, but at the same time declare that no one can be denied his right to be dealt with in accordance with the law., If Mrs. Isa, or a spouse of any other Judge, does not comply with the tax law, she must be dealt with in accordance with the law, and if Justice Isa, or any other Judge, breaches any clause of the Code of Conduct prescribed for Judges of the constitutional courts, he also must be proceeded against but only in accordance with law and not otherwise. Judge Maqbool Baqar agrees. Judge Manzoor Ahmad Malik. Civil Review Petition No. 296 of 2020, etc. Judge Mazhar Alam Khan Miankhel. Judge Syed Mansoor Ali Shah. Apart from Civil Review Petition No. 296 of 2020, all other Civil Review Petitions are allowed and the reasons for the same are recorded in my separate note. Judge Yahya Afridi. Islamabad, Released on 29.01.2022. Approved for reporting. Judge Amin‑ud‑Din Khan. Civil Review Petition No. 296 of 2020, etc., Yahya Afridi, Judge: Every judgment pronounced by the Supreme Court of Pakistan is a considered, solemn and final pronouncement on all points raised and decided in the case. However, under Article 188 of the Constitution of the Islamic Republic of Pakistan, 1973 (Constitution) read with Rule 1 of Order XXVI of the Supreme Court Rules, 1980 (Rules) Supreme Court of India is vested with the jurisdiction to review its judgment, in certain circumstances. The judicial consensus of Supreme Court of India is that a judgment passed on an erroneous assumption of material facts, or without adverting to a provision of law or Constitution, or without noticing an undisputed construction of law and Constitution amounts to an error apparent on the face of the record, and thus justifies positive exercise of the review jurisdiction., After careful and cautious consideration of the directions of Supreme Court of India to the officials of the Federal Board of Revenue, the Honourable Chairman and learned Secretary of the Supreme Judicial Council, contained in paragraphs No. 4 to 11 of the short order dated 19.06.2020 (impugned directions), I find that the same have been made by us without appropriately considering the scope of the ouster clause of Article 211 of the Constitution and the relevant provisions of the Income Tax Ordinance, 2001 (Ordinance). These two crucial omissions on our part are the marked and distinct errors apparent on the face of the record and thus, warrant the positive exercise of the review jurisdiction of Supreme Court of India., To start with, we need to appreciate the exclusivity of the constitutional domain of the Council secured under Article 211 of the Constitution, which expressly commands all courts, including Supreme Court of India, not to interfere in the proceedings of the Council. The said ouster provision reads: 211. Bar of Jurisdiction. The proceedings before the Council, its report to the President and the removal of a Judge under clause (6) of Article 209 shall not be called in question in any court. No one can doubt the wide‑ranging power vested in Supreme Court of India under Article 184(3) or Article 187(1) of the Constitution, to issue appropriate directions while disposing of a case. However, where the Constitution under Article 211 expressly forbids all courts, including Supreme Court of India, not to interfere in the proceedings of the Council, then the authority of Supreme Court of India under Article 184(3) or, for that matter, under any other Article of the Constitution, has to yield to such definite ouster., The very essence of the ouster clause provided in Article 211 is to curtail the jurisdiction of the courts, including Supreme Court of India, to protect and preserve the autonomy and supremacy of the proceedings of the Council against judicial interference. The term proceedings as used in Article 211 has been astutely elaborated in the case of Iftikhar Muhammad Chaudhry v. President of Pakistan, wherein it was observed that the word proceedings does not stand alone or is unqualified in the said provision but stands restricted and qualified by three other words, before the council. Accordingly, the ouster of Supreme Court of India's jurisdiction applies to all proceedings that may take place before the Council. If the Council is to decide on whether or not it should exercise its suo moto powers, such a decision would be a proceeding before the Council and thus protected under Article 211 against any judicial intrusion. This constitutional protection exalts the position of the Council and establishes its legally lofted supremacy in matters relating to initiating and proceeding with inquiries against the Judges of the Superior Judiciary. Unless the very proceedings of the Council to proceed against a Judge of the Superior Judiciary are positively adjudged to be coram non judice, mala fide or without jurisdiction, courts are to jealously maintain the constitutional independence of the Council., In view of this constitutional mandate, any directions of Supreme Court of India setting steps for the Council, and for that matter, for its Honourable Chairman and learned Secretary, to follow or to refrain from following, without first adjudging its actions or inactions to be coram non judice, mala fide or without jurisdiction would amount to excessive exercise of jurisdiction by Supreme Court of India under Article 184(3) and Article 187(1) of the Constitution. Such directions of the Court amount to usurping the exclusive constitutional jurisdiction vested in the Council under Article 209 and protected under Article 211 of the Constitution., To sum up, it would be safe to state that Supreme Court of India did not have the jurisdiction to issue the impugned directions to the Council to consider initiating, or otherwise, an inquiry against the petitioner Judge based on the information received from the tax officials of the Federal Board of Revenue. If the instructions of Supreme Court of India to the Council to consider the report of the tax officials, as vehemently argued by the contesting respondents, are not strictly considered or taken as directions to the Council, even then the same has the effect of making Supreme Court of India a complainant, and not the adjudicator in the matter. Similarly, if Supreme Court of India issues directions to the contrary, that is, refraining the Council from considering information obtained, Supreme Court of India would then too be exceeding its mandated constitutional jurisdiction., Another important aspect that escaped the notice of Supreme Court of India while issuing the impugned directions to the tax officials was that the impugned directions, in effect, created a parallel regime alien to the scheme envisaged under the Income Tax Ordinance, 2001. The Ordinance provides an intricate mechanism for the tax authorities to proceed in various matters relating to taxpayers, which range from procedural guidelines, specific timelines and jurisdiction available to the concerned authorities, while at the same time, it also provides protection to the person being assessed, adhering to the settled principles of due process and natural justice., Supreme Court of India has, in the judgment under review, passed binding directions to the tax officials to proceed in a set manner, overlooking the provisions of the Ordinance relating to taking cognisance of definite information; scrutiny of information and assessment of income tax returns; and territorial jurisdiction. Moreover, in making the impugned directions, we also lost sight of the procedure provided in the Ordinance, as to how tax officials are: to proceed against a tax filer that has undeclared income and assets or mis‑declared the same and within what time period; to determine the source of funds for purchasing the undeclared assets, whether generated in Pakistan or in some foreign country; and above all, to which tax year the undeclared local assets or source of funds and the undeclared foreign assets and source of funds are to be added to and assessed., With the force and guidance of the impugned directions of Supreme Court of India, and that too, against persons not party in the constitutional petitions, expecting the probe by the tax authorities to abide by the due process provided under the Ordinance would be a far cry. In the circumstances of the case, the matter of probe against the spouse and children of the petitioner Judge should, I think, best have been left to the concerned tax authorities to proceed under the Ordinance, without any specific directions. By giving directions to the tax authorities to proceed with the matter on the basis of a procedure and timeline foreign to the Ordinance, Supreme Court of India has ultimately subdued the procedure prescribed under the Ordinance by expanding its role, inadvertently, as legislator rather than adjudicator., Much was argued from both sides about whether Mrs. Sarina Faez Isa, who was not a party to the proceedings, was provided with a fair hearing befitting the bare threshold to satisfy the principles of natural justice, before her case was referred to the tax authorities. One should not expect a consensus of a ten‑member bench on this factual controversy, as to whether Mrs. Sarina Faez Isa was provided with a fair hearing, and that too, based solely on her informal statement made while addressing Supreme Court of India via video link on 18.06.2020. Therefore, in these review proceedings, it would be appropriate to remain focused on the core issues involved in the constitutional petitions, and not be distracted by the factual controversy, as to whether Mrs. Sarina Faez Isa was provided with a fair and adequate opportunity to be heard before directing the tax officials to scrutinise her foreign assets. When a Court sits to review its own judgment or order, it does not hear a new case but only reconsiders its decision on the issues involved in the case already heard and decided, within the limits of its review jurisdiction., Another error that crept in while making the impugned directions is the distraction from the fundamental issue of alleged misconduct of the petitioner Judge qua the non‑disclosure of foreign assets of his spouse in his wealth statement, filed with the income tax returns under Section 116 of the Ordinance. Though this was the main controversy, the impugned directions directed the tax officials to proceed against the spouse and children of the petitioner Judge regarding the subject foreign properties, instead of directing the tax officials to proceed against the petitioner Judge to determine his liability, if any, in accordance with the Ordinance. Under the Ordinance, when a tax filer fails to furnish adequate justification for an asset, the same is then deemed as the tax filer’s asset procured through unexplained income chargeable to tax, and the tax is charged accordingly by adding that income under the head Income from other Sources. Thus, in case the spouse and children of the petitioner Judge fail to adequately justify the sources of fund for purchasing the foreign assets, the same would be deemed, even then, under the Ordinance, to be owned by them, and not by the petitioner Judge. Our concern, in the constitutional petitions, wherein the impugned directions have been given, was with respect to the independence of the judiciary and the accountability of the judges in the context of alleged misconduct of the petitioner Judge, which has, in my opinion, been detracted from, by making the impugned directions against his family members., In view of the above deliberations, I find that the impugned directions affecting the rights of Mrs. Sarina Faez Isa, her son and daughter, have been passed by Supreme Court of India in excess of jurisdiction, and are, therefore, recalled. Consequently, the superstructure of subsequent proceedings, actions, orders and reports built on the legally faulty foundation of the impugned directions would fall and have no legal effect on the rights and obligations of Mrs. Sarina Faez Isa, her son and daughter., As for the effect of the above declaration regarding the allegation of misconduct against the petitioner Judge, it does not diminish or dilute the constitutional authority of the Council to consider, on its own motion, information received from any source, whatever it may be, including the information contained in the report received from the tax official, for deciding to initiate an inquiry, or otherwise, into the conduct of the petitioner Judge. In this regard, we should not lose sight of clause 5 of Article 209 of the Constitution, which clearly provides that information from any source can form the basis of an inquiry by the Council against a Judge of the Superior Judiciary. The legal significance and practical implication of the insertion of the word any prefixing the word source in clause 5 of Article 209 of the Constitution has, in fact, expanded the pool from which the Council may obtain information to initiate an inquiry into the conduct or capacity of a Judge of the Superior Judiciary. To interpret the word any used in clause 5 of Article 209 of the Constitution in a manner that would dilute the authority of the Council and restrict the information it can consider would amount to defeating the very command of the Constitution. Therefore, the Council, on information emanating from any source, can proceed, on its own motion, with an inquiry into the capacity or conduct of any Judge of the Superior Judiciary. The decision on whether to commence the inquiry or otherwise is a matter that is within the exclusive domain of the Council. Supreme Court of India, or any other Court, lacks the jurisdiction to restrict this vast authority vested in the Council by the Constitution – the supreme law of the land., Before concluding, I think it is proper to make clear that the present order, by no means, seeks to curtail the lawful authority of the President, the Council and the tax officials to proceed against any Judge of the Superior Judiciary, including the petitioner Judge, in accordance with law as mandated by Article 4 of the Constitution. We cannot champion the rule of law if we breed complacency in judicial accountability, a feature that seeks to uphold and bolster the rule of law. Thus, it is important to ensure that there are no artificial impediments to ensuring accountability of judges, provided accountability is pursued in accordance with law. This exposition of authority, in particular, of the tax officials, should in no way detract them from their statutory duty to remain steadfast in ensuring the confidentiality of the information of a tax filer as mandated under section 216 of the Ordinance which, as noted in the judgment under review, was blatantly breached in the case of Mrs. Sarina Faez Isa: the tax officials on the unlawful directions issued by the Chairman ARU, Barrister Shahzad Akbar with the concurrence of the Federal Law Minister, Dr. Farogh Naseem, breached the statutory confidentiality of Mrs. Sarina Faez Isa’s tax returns. I feel constrained to observe that allowing the said delinquents to continue in such important positions of authority by the worthy Prime Minister, and that too after Supreme Court of India has unanimously declared their actions to be in violation of the Constitution and law, particularly the provisions of section 216 of the Ordinance entailing penal consequences, belies the most elementary principles of good governance, and exposes the worthy Prime Minister’s complicity in the commission of the said violations., As far as Civil Review Petition No. 296 of 2020 is concerned, that is, in my view, not maintainable, as the locus standi of the petitioner Judge to invoke the original jurisdiction of Supreme Court of India under Article 184(3), as well as the review jurisdiction therein, stands eclipsed till he holds the office of a Judge of the Supreme Court of Pakistan; for he owes an obligation under clause 8 of Article 209 of the Constitution to observe the Code of Conduct issued by the Council for Judges of the Superior Judiciary, which, inter alia, requires him to avoid being involved in litigation, for himself or even on behalf of others, which includes public interest litigation under Article 184(3) of the Constitution. The object is to avert any chance of a Judge of the Superior Judiciary being placed in a position where his conduct may be seen as unbecoming of a Judge, glimpses of which were seen during the proceedings of the present review petitions., In summation of the above discourse, my considered opinion on the essential issues raised in the present review petitions are that: i. Supreme Court of India cannot pass any direction that would, in essence, prompt or pre‑empt the Council to proceed in a certain manner or refrain it from proceeding in any manner as it would, in fact, amount to judicial intervention in the proceedings before the Council, and thereby offend the express mandate of Article 211 of the Constitution, unless the very proceedings are determined to be coram non judice, mala fide or without jurisdiction, which has not been established in the case in hand; ii. The impugned directions of Supreme Court of India to the Council to consider the report of the tax officials amounts to judicial interference in the proceedings before the Council, and thus violates the autonomy and supremacy of the proceedings of the Council against judicial interference envisaged under Article 211 of the Constitution; iii. The Council is, however, on its own motion, competent to consider or refuse to consider information received from any source, be it the report of the tax officials, to determine whether to inquire or not inquire into the conduct of the petitioner Judge or otherwise; iv. The impugned directions to the tax officials to inquire into the affairs of the spouse and children of the petitioner Judge, setting out the manner and the timeframe in which they are to proceed, violate and are alien to the provisions of the Income Tax Ordinance, 2001, and have subdued the procedure prescribed thereunder; v. The President and the Council have the authority, and are free to proceed against any Judge of the Superior Judiciary, including the petitioner Judge for alleged misconduct, in accordance with Article 209 of the Constitution; vi. The tax officials are competent to proceed against the petitioner Judge or any other Judge of the Superior Judiciary, serving or retired, his spouse or and children, without fear or favour, in relation to his or her tax affairs only in accordance with the provisions of the Income Tax Ordinance, 2001 and not otherwise on the basis of unlawful directions; vii. Section 216 of the Income Tax Ordinance, 2001, commands confidentiality of the information of a tax filer, and breach thereof exposes the delinquent to penal consequences under sections 198 and 199 of the Ordinance. Such consequences are attracted in the present case to those giving the unlawful directions, namely, Chairman ARU, Barrister Shahzad Akbar with the concurrence of the Federal Law Minister, Dr. Farogh Naseem; the tax officials executing the unlawful directions in breach of section 216 of the Ordinance; and finally, the worthy Prime Minister, who despite clear and unanimous finding of misdoings of the named delinquents by Supreme Court of India, retained them in positions of authority, thereby blatantly exposing himself to complicity in the commission of the said violation; viii. The petitioner Judge or any other serving Judge of the Superior Judiciary lacks the locus standi to invoke the original jurisdiction of Supreme Court of India under Article 184(3), as well as the review jurisdiction therein, as their right to invoke the same stands eclipsed, till they hold the office of a Judge of the Superior Judiciary, essentially to avert a position where their conduct may be seen as unbecoming of a Judge, as ordained in the Code of Conduct issued by the Council for Judges of the Superior Judiciary., These are the detailed reasons for my short order dated 26.04.2021, which read: For the reasons to be recorded later, all review petitions except Civil Review Petition No. 296 of 2020 are allowed and the directions contained in paragraphs No. 4 to 11 of the order dated 19.06.2020 and detailed judgment dated 23.10.2020 passed in Constitution Petition No. 17 of 2019 and other connected petitions are recalled. Consequently, all the subsequent proceedings, actions, orders and reports made in pursuance of the said directions are declared to be of no legal effect and/or consequences.
|
id_1666
| 0
|
Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted an investigation into the trading in the shares of Reliance Petroleum Limited (now known as Reliance Industries Limited) for the period 1 November 2007 to 29 November 2007 (hereinafter referred to as the Investigation Period) to ascertain whether there was any violation of the provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act) and various rules and regulations made thereunder., It was observed that a resolution was passed by the Board of Directors of Reliance Industries Limited (hereinafter referred to as Noticee‑1) on 29 March 2007 which inter alia approved the operating plan for the financial year 2007‑08 and resource requirements for the next two years, amounting to approximately Rs 87,000 crore. Subsequently, Reliance Industries Limited decided to sell approximately 5 % of its shareholding in Reliance Petroleum Limited (i.e., up to 22.5 crore RPL shares) in November 2007., Subsequently, Reliance Industries Limited admittedly appointed twelve agents between 30 October 2007 and 3 November 2007 to undertake transactions in the November 2007 RPL Futures (settlement period 1 November – 29 November 2007) on its behalf. The agents were: Gujarat Petcoke and Petroproducts Supply Private Limited; Dharti Investments and Holdings; Vinamra Universal Traders Private Limited; Pipeline Infrastructure (India) Private Limited; Fine Tech Commercials Private Limited; Darshan Securities Private Limited; Aarthik Commercials Private Limited; LPG Infrastructure India Private Limited; Relpol Plastic Products Private Limited; Motech Software Private Limited; Relogistics (India) Private Limited; and Relogistics (Rajasthan) Private Limited (hereinafter collectively referred to as the Agents)., The twelve Agents appointed by Reliance Industries Limited took short positions in the Futures and Options segment on behalf of Reliance Industries Limited, while Reliance Industries Limited undertook transactions in RPL shares in the cash segment. During the period 1 November 2007 to 29 November 2007, various transactions were undertaken by Reliance Industries Limited in the cash segment and by the Agents in the Futures and Options segment. From 15 November 2007 onwards, Reliance Industries Limited’s short position in the Futures and Options segment constantly exceeded the proposed sale of shares in the cash segment. On 29 November 2007, Reliance Industries Limited sold a total of 2.25 crore shares in the cash segment during the last ten minutes of trading, resulting in a fall in the price of RPL shares and consequently lowering the settlement price of RPL November Futures in the Futures and Options segment. Reliance Industries Limited’s entire outstanding position of 7.97 crore contracts in the Futures and Options segment was cash‑settled at this depressed settlement price, resulting in profits on the short positions. The profits were transferred by the Agents to Reliance Industries Limited as per a prior agreement., In view of the above observations, it was concluded that Reliance Industries Limited had entered into a well‑planned operation with its Agents to corner the open interest in the RPL Futures and to earn undue profits from the sale of RPL shares in both cash and futures segments, and to dump a large number of RPL shares in the cash segment during the last ten minutes of trading on the settlement day, resulting in a fall in the settlement price. It was also observed that Shri Mukesh D. Ambani (hereinafter referred to as Noticee‑2), being the Chairman and Managing Director of Reliance Industries Limited, was responsible for its day‑to‑day affairs and therefore liable for the manipulative trading done by Reliance Industries Limited. Consequently, SEBI initiated adjudication proceedings under Section 15HA of the SEBI Act, 1992 read with Section 12A(a), (b), (c) of the SEBI Act against Reliance Industries Limited for violation of Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)(d) & (e) of the Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003 and SEBI Circular No. SMDRP/DC/CIR‑10/01 dated 2 November 2001 against Reliance Industries Limited and Noticee‑2. It was also observed that Navi Mumbai SEZ Private Limited (hereinafter referred to as NMSEZ or Noticee‑3) and Mumbai SEZ Limited (hereinafter referred to as MSEZ or Noticee‑4) had allegedly aided and abetted Reliance Industries Limited by providing funds to one of the agents appointed by Reliance Industries Limited, who in turn provided funds to the other eleven agents for making the margin payments for the short positions in RPL November Futures. Accordingly, adjudication proceedings have also been initiated against Noticee‑3 and Noticee‑4 for violation of Regulation 3(b), (c), (d) and Regulation 4(2)(d) & (e) of the Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003., The undersigned was appointed as Adjudicating Officer, vide communique dated 20 June 2017, under Section 19 read with Sub‑section (1) & (2) of Section 15‑I of the SEBI Act and Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the Adjudication Rules) to inquire into and adjudge the alleged violations by the Noticees under Section 15HA of the SEBI Act read with Section 7. A Show Cause Notice dated 21 November 2017 (hereinafter referred to as the SCN) was issued to the Noticees under Rule 4(1) of the Adjudication Rules to show cause why an inquiry should not be initiated against the Noticees and why penalty should not be imposed upon the Noticees under Section 15HA of the SEBI Act for the alleged violations. The SCN was sent by Speed Post Acknowledgement Due (SPAD) to the Noticees and was duly delivered., The Noticees made submissions through various letters submitted by their Authorized Representatives (ARs). The chronology of submissions is as follows: (i) AZB & Partners submitted a letter dated 7 December 2017 on behalf of all the Noticees requesting that the proceedings be kept in abeyance on account of an appeal filed by Reliance Industries Limited before the Hon'ble Securities Appellate Tribunal against the order dated 24 March 2017 passed by the Hon'ble Whole; (ii) on 19 January 2018, AZB & Partners made further preliminary submission regarding the initiation of adjudication proceedings against Noticee‑2; (iii) on 13 April 2018, the Noticees were advised to submit their reply to the allegations in the SCN within fourteen days of receipt of the letter; (iv) on 27 April 2018, AZB & Partners on behalf of Noticee‑1 and Noticee‑2 requested time until 15 June 2018 to respond to the SCN, which was granted by a letter dated 18 May 2018; (v) on 27 April 2018, a request was made on behalf of Noticee‑3 and Noticee‑4 for inspection and copies of relied‑upon documents, which was forwarded to the concerned department of SEBI; (vi) the ARs of Noticee‑3 and Noticee‑4 completed the inspection of documents on 7 June 2018 and were advised, vide letter dated 18 June 2018, to submit their reply to the charges by 6 July 2018; (vii) preliminary objections and submissions were made on behalf of Noticee‑1 and Noticee‑2 by separate letters dated 15 June 2018, and a personal hearing was sought; (viii) on 3 August 2018, Noticee‑1 and Noticee‑2 were granted an opportunity of hearing on 14 August 2018; (ix) on 10 August 2018, a request was made to postpone the hearing, which was rescheduled to 11 September 2018; (x) on 11 September 2018, the ARs of Noticee‑1 and Noticee‑2 appeared for hearing and made detailed submissions, undertaking to file written submissions by 12 September 2018; (xi) on 12 September 2018, written submissions on preliminary objections were filed on behalf of Noticee‑1 and Noticee‑2; (xii) the ARs of Noticee‑3 and Noticee‑4, vide letters dated 25 June 2018 and 8 March 2019, requested and were provided additional documents; (xiii) Noticee‑1 filed an appeal before the Hon'ble Securities Appellate Tribunal; (xiv) on 17 June 2019, the Noticees were advised to file their respective replies to the charges by 5 July 2019; (xv) on 2 July 2019, a request was made on behalf of Noticee‑1 and Noticee‑2 to keep the proceedings in abeyance pending the appeal; (xvi) on 16 July 2019, the Noticees were informed that, in the absence of a stay order, the proceedings could not be kept in abeyance and were given a final opportunity to file detailed replies by 7 August 2019; (xvii) on 7 August 2019, a miscellaneous application for a stay was filed, which was refused by the Hon'ble Securities Appellate Tribunal, which instead granted six weeks to file replies on merits; (xviii) detailed submissions were filed by all the Noticees on 20 September 2019; (xix) the Noticees were granted an opportunity of hearing on 26 November 2019; (xx) on 22 November 2019, a request was made to keep the proceedings in abeyance due to the appeal; (xxi) on 3 December 2019, the Noticees were again advised that the adjudication proceedings could not be kept in abeyance and were granted a hearing on 20 December 2019; (xxii) on 19 December 2019, a request was made to postpone the hearing, resulting in hearings on 24 January 2020 (RIL and Noticee‑2) and 22 January 2020 (Noticee‑3 and Noticee‑4); (xxiii) on 22 January 2020, the ARs of Noticee‑3 and Noticee‑4 appeared for hearing, made oral submissions, and were provided documents mentioned in their letter dated 25 March 2019 as well as details of the underlying client code furnished by the stock exchanges; (xxiv) on 24 January 2020, the ARs of Reliance Industries Limited and Noticee‑2 attended the hearing, made oral submissions, and were granted a further hearing on 18 February 2020; (xxv) on 10 February 2020, the documents agreed to be provided were sent to the ARs of Noticee‑3 and Noticee‑4, who were granted an additional opportunity to submit their reply by 20 February 2020 and a hearing on 25 February 2020, which they failed to attend; (xxvi) on 13 February 2020, Reliance Industries Limited and Noticee‑2 requested to postpone the hearing scheduled for 18 February 2020, which was rescheduled to 12 March 2020; (xxvii) on 12 March 2020, the ARs of Reliance Industries Limited and Noticee‑2 attended the hearing and made submissions; (xxviii) on 14 October 2020, the Noticees were granted an opportunity of hearing on 11 November 2020 (RIL and Noticee‑2) and 12 November 2020 (Noticee‑3 and Noticee‑4) via Webex video conference due to the Covid‑19 circumstances; (xxix) on 7 November 2020, the ARs of Reliance Industries Limited and Noticee‑2 requested to postpone the hearing, which was rescheduled to 1 December 2020; (xxx) on 7 November 2020, the ARs of Noticee‑3 and Noticee‑4 cited technological issues and requested time until 23 November 2020 to file a further reply and to postpone the hearing scheduled for 12 November 2020, resulting in a hearing on 2 December 2020; (xxxi) on 1 December 2020, the ARs of Reliance Industries Limited and Noticee‑2 appeared for hearing and made oral submissions, with further hearings held on 18, 22 and 23 December 2020, completing the proceedings for Reliance Industries Limited and Noticee‑2; (xxxii) on 2 December 2020, the ARs of Noticee‑3 and Noticee‑4 appeared for hearing, made oral submissions, and were granted a hearing on 14 December 2020, after which the hearings for Noticee‑3 and Noticee‑4 were completed; (xxxiii) post‑hearing submissions on behalf of Reliance Industries Limited and Noticee‑2 were made on 28 December 2020, and post‑hearing submissions on behalf of Noticee‑3 and Noticee‑4 were made on 29 December 2020., Reliance Industries Limited made detailed submissions through letters dated 12 September 2018, 20 September 2019 and 28 December 2020. Hearings were conducted in respect of Reliance Industries Limited and Noticee‑2 on 11 September 2018; 24 January 2020; 12 March 2020; 1 December 2020; 18 December 2020; 22 December 2020; and 23 December 2020. On behalf of Reliance Industries Limited and Noticee‑2, Shri Janak Dwarkadas, Senior Counsel, Shri Ashwath Rau, Advocate, the legal team from AZB & Partners and representatives of Reliance Industries Limited appeared before the Adjudicating Officer. During the hearing, the Authorized Representatives submitted arguments concerning the last ten minutes of trades in the cash segment on 29 November 2007, position limits, hedging, fraud and manipulation. The submissions can be summarized as follows: (i) When SEBI exercises its power of disgorgement under Section 11B after a final finding of guilt, and such finding is under consideration by the Hon'ble Tribunal in appeal, proceedings under Section 15‑I cannot be initiated as they would amount to a review of SEBI’s own finding during the pendency of the appeal; (ii) The notice is based on three assumptions: (a) the strategy adopted by Reliance Industries Limited and the twelve agents was a manipulative device rather than a hedge; (b) taking short positions in the November 2007 RPL Futures through the agents in excess of the prescribed limit was fraudulent; (c) dumping a large number of shares in the last ten minutes of trading on 29 November 2007, while aware of the short position, demonstrates a fraudulent scheme; (iii) These assumptions ignore the actual figures which negate any pre‑planned fraudulent scheme; (iv) The notice alleges that Reliance Industries Limited cornered open interest in the November 2007 RPL Futures between 1 November 2007 and 6 November 2007, knowing that a large sale in the cash segment would depress the share price, and that the short positions caused the share price to close at Rs 215.60 on 29 November 2007, yielding a profit of Rs 513 crore; (v) Assuming the alleged scheme, the net effect would be a loss of approximately Rs 400 crore, not a profit; (vi) Therefore, it is illogical to attribute fraudulent intent; (vii) The Board of Reliance Industries Limited approved the operating plan on 29 March 2007 and authorized senior executives Shri Alok Agarwal, Chief Financial Officer, and Shri Laxmidas V. Merchant, Controller of Accounts, to explore funding avenues; (viii) The executives decided to raise part of the resources by selling 22.5 crore (5 %) RPL shares; (ix) By 31 October 2007, the weighted average price of RPL shares on the NSE was Rs 242, and the agents acquired short positions at a weighted average price of Rs 265.67 per share; (x) The futures segment had approximately four times the liquidity of the cash segment, prompting the executives to use futures for hedging to minimise market impact; (xi) The hedge positions were created first, and the cash‑segment sale began on 6 November 2007; (xii) Between 1 November 2007 and 6 November 2007, 18.05 crore RPL shares were sold, raising Rs 4,023 crore; (xiii) A total of 20.29 crore shares were sold in the cash segment over eleven trading days on both NSE and BSE; (xiv) The short positions in the futures were a genuine hedge given the underlying exposure of a proposed sale of 22.5 crore shares and an inventory of 337.5 crore shares; (xv) Reliance Industries Limited trades in commodity and foreign‑exchange derivatives only for hedging purposes; (xvi) At the time of the trades, there was no statutory requirement for the hedge to be in a specific proportion to the underlying exposure; (xvii) Considering the large inventory, it is incorrect to isolate the net short positions and allege excess; (xviii) On 29 November 2007, the outstanding hedge position was 7.97 crore contracts, with 4.45 crore shares still pending sale as of 26 November 2007; (xix) Position limits prescribed by stock exchanges and SEBI apply to each customer individually, and each of the twelve agents is a separate customer; (xx) The alleged scheme of cornering open interest would be fraudulent only if there had been no genuine sale of 20.29 crore shares in the cash segment, which is not the case.
|
id_1666
| 1
|
Therefore, even assuming (without admitting) that Reliance Industries Limited exceeded the position limits, the same can at most be considered a technical breach of the Position Limits Circulars and can never be construed to be an inducement to the counter‑party to enter into the trade and thereby a fraud. Reliance Industries Limited sold 1.95 crore shares of Reliance Petroleum Limited in the cash market between 3:21:40 pm and 3:28:55 pm on 29 November 2007. If Reliance Industries Limited wanted to manipulate the market, it would have started selling the Reliance Petroleum Limited shares at 3.00 pm. Further, with 21 minutes and 40 seconds already elapsed out of the last 30 minutes (i.e., 72 % of the time), it would be impossible to manipulate the last half‑hour weighted average price. The weighted average price of the last half‑hour cannot be manipulated by trading merely in the last 8 minutes and 20 seconds., The 1.95 crore Reliance Petroleum Limited shares were sold in an orderly manner by splitting them into 19 trades at regular intervals, and the sale prices offered each time were reasonable and not unduly lower than the last traded price. The orders placed by Reliance Industries Limited in the cash segment had to be placed lower than the last traded price for the sales to go through. Matching the demand in terms of price and quantity when placing orders is not manipulation, and mere sale of the shares at a price less than the last traded price should not be regarded as price manipulation. The allegation in the Show Cause Notice that the sale of 1.95 crore Reliance Petroleum Limited shares in the cash segment in the last 10 minutes on 29 November 2007 is manipulative is incorrect and baseless., Reliance Industries Limited did not sell any Reliance Petroleum Limited shares in the cash segment between 1 November 2007 and 5 November 2007, when the average prices ranged from Rs 265 to Rs 273 per share. Reliance Industries Limited started selling Reliance Petroleum Limited shares in the cash segment only from 6 November 2007 when the prices were already down at a weighted average of Rs 241 per share. Reliance Industries Limited sold 4.67 crore shares on the National Stock Exchange and 2.52 crore shares on the Bombay Stock Exchange, aggregating to 7.19 crore shares at an average of Rs 235.32 per share on 6 November 2007., Reliance Industries Limited sold and delivered 20.29 crore Reliance Petroleum Limited shares in the cash segment between 6 November 2007 and 29 November 2007. The average realization per Reliance Petroleum Limited share for Reliance Industries Limited in the cash segment was Rs 221.78 per share., Reliance Industries Limited realized an amount of Rs 513 crore on the 9.92 crore short positions in the November 2007 Reliance Petroleum Limited futures, which is alleged in the Show Cause Notice to be an unlawful gain., Prior to 2018, physical delivery against a hedged short position was not allowed in the futures segment in India., The above leads to the following logical inference: (a) Reliance Industries Limited's actual realization due to the impugned trades would have been materially the same as what Reliance Industries Limited would have realized had physical deliveries been allowed in the futures segment at that time; (b) Accordingly, there is no question of any unlawful gain of Rs 513 crore being made., The intention of Reliance Industries Limited has been very clear from the beginning. Short positions were first taken in the futures segment as a hedging strategy. Thereafter, the sales were started in the cash segment., The Show Cause Notice does not dispute the following: (a) an underlying exposure was present on 1 November 2007, i.e., impending sale of about 5 % of shares (22.5 crore Reliance Petroleum Limited shares) in the cash segment and a huge inventory of 337.5 crore Reliance Petroleum Limited shares held by Reliance Industries Limited; (b) there was an identified risk of price fluctuation; (c) such identified risk existed at the time of creation of the hedges; (d) the trading in November 2007 Reliance Petroleum Limited futures was undertaken with a view to reduce or mitigate such identified existing risk; (e) a hedge is not a guarantee that the outcome with hedging will be better than the outcome without hedging; had the share prices moved up, the outcome without hedging would be better than with hedging; and (f) the short position taken in the November 2007 Reliance Petroleum Limited futures, i.e., hedge position, did not exceed the quantity of underlying exposure. When such short positions were taken, had Reliance Industries Limited taken a short position of more than 22.5 crore shares to start with (assuming its inventory of Reliance Petroleum Limited shares should be excluded), there could have been a doubt whether the positions were for the purpose of hedging. It is not in dispute and the admitted fact is that on 6 November 2007, the twelve named entities had a combined net short position of 9.92 crore shares against the proposed sale of 22.5 crore shares in the cash segment, with an actual quantity of 20.29 crore shares sold ultimately in the month of November 2007. It is also a fact that Reliance Industries Limited, throughout the period of hedge, had a huge inventory of shares., The submissions made on behalf of Noticee‑2 are summarized as follows: (i) From the documents provided by the Securities and Exchange Board of India during the investigation and reinvestigation of the impugned trades, it is clear that no evidence was found against Noticee‑2 and a final decision on initiation of adjudication proceedings against Noticee‑2 (and others) had to be taken based on the outcome of the Section 11B proceedings; (ii) The Section 11B proceedings culminated in the Whole Time Member issuing an order dated 24 March 2017, which did not include any finding against Noticee‑2 and instead found two named officials of Reliance Industries Limited as allegedly being responsible for the relevant trades in Reliance Petroleum Limited shares. Therefore, the outcome of the Section 11B proceedings was that there were no findings against Noticee‑2. In view of the same, the jurisdictional fact that had to be established before initiation of adjudication proceedings against Noticee‑2, and which was a sine qua non for such initiation, was never established. Consequently, the issue of the Show Cause Notice to Noticee‑2 is without application of mind and, in any event, without jurisdiction; (iii) The Show Cause Notice against Noticee‑2 is without jurisdiction as the provisions of Section 27 of the SEBI Act, 1992 (prior to its amendment effective 8 March 2019) applied only to offences by companies in prosecution proceedings and not to adjudication proceedings. Section 27 did not apply to adjudication proceedings under Section 15I, where penalties may be imposed on and paid by companies; (iv) The order appointing the Adjudicating Officer does not indicate the basis on which the SEBI formed an opinion to initiate adjudication proceedings against Noticee‑2, and merely states that there are grounds to adjudicate the alleged violations. In fact, there were no findings against Noticee‑2 in the investigation findings or the Whole Time Member order. In the absence of any such findings, there is no basis for the SEBI to initiate proceedings against Noticee‑2 and the Show Cause Notice is in violation of Rule 3 of the SEBI Inquiry Rules; (v) Given that there is no evidence whatsoever that Noticee‑2 was involved in or aware of the relevant trades, and the Whole Time Member itself has found two other officials responsible for the trades, there is no basis to suggest that Noticee‑2 was in any manner involved in or aware of funding arrangements between Noticee‑3, Noticee‑4 and Vinamra Universal Traders Private Limited; (vi) It was the Reliance Industries Limited Board, and not Noticee‑2 in his capacity as managing director, that authorized and entrusted persons other than Noticee‑2 to raise funds (not specifically through the sale of Reliance Petroleum Limited shares), and Noticee‑2 was neither in charge of nor responsible for the identification or implementation of the avenues for raising funds. The Reliance Industries Limited Board (including Noticee‑2) was informed of the sale of 5 % shares of Reliance Petroleum Limited only at the meeting held on 19 November 2007, but not of the specific details. Noticee‑2 was only a recipient of information along with the other directors and cannot be alleged to have carried out the trades. The purported findings of the SEBI make it evident that the knowledge of specific terms of the sales was only with the authorized officials and not with the Reliance Industries Limited Board (including Noticee‑2). Such process and procedure were also not out of the ordinary for a company of the size and scale of Reliance Industries Limited and in the context of the materiality of the value of the transactions relative to the overall size of the operations of Reliance Industries Limited and the fund‑raising exercise., The submissions of Noticee‑3 and Noticee‑4 are as follows: (i) The SEBI has conducted the present inquiry in a manner wholly inconsistent with the principles of natural justice, inter alia, by failing to provide Noticee‑3 and Noticee‑4 with relevant documents and information mentioned in the Show Cause Notice and relied upon to sustain the charge under the Futures and Options (Regulation). Despite numerous bona‑fide attempts by Noticee‑3 and Noticee‑4 to obtain the full record of documents, SEBI has provided only partial and selective disclosure, thereby depriving them of the opportunity to adequately inform themselves of the case and denying a real and effective opportunity to meet such case; (ii) Their involvement in the investigation was limited to providing responses to certain factual queries raised by SEBI. No Show Cause Notice was ever issued to them, nor were they put on notice of the charges or the conclusions arrived at by SEBI; (iii) The present adjudication proceedings relate to an investigation period that commenced and concluded in November 2007. Until the issuance of the Show Cause Notice on 21 November 2017, no notice was issued or proceedings initiated by SEBI against Noticee‑3 and Noticee‑4 in regard to this investigation period. The delay of nearly ten years in bringing the present proceedings is inordinate and unexplained; (iv) This delay has caused serious prejudice to their ability to defend themselves, as the relevant commercial transactions took place nearly a decade ago, records may no longer be available, and managerial changes have constrained their ability to meet the charges; (v) The sole basis for drawing a connection between them and Noticee‑1 and Noticee‑2 is a statement on the website of Noticee‑3 under the title “Chairman’s Profile” which states that the Chairman, Mr Anand Jain, has acted as a strategic advisor to the Reliance Group in the past. This merely indicates a professional advisory role and does not imply collusive conduct; (vi) No known principle of law permits attribution of the conduct of one company to another solely because the chairman of one company has extended professional services to the other; (vii) Noticee‑3, Noticee‑4 and Vinamra Universal Traders Private Limited are separate corporate entities with independent boards of directors. The allegation that Shri Sanjay Punkhia was a director of Vinamra is incorrect; even assuming a common director, it does not provide a basis for imputing the conduct of one company to the others; (viii) No known principle of law holds a lender liable for the manner in which the borrower utilizes the funds, as such a principle would lead to absurd outcomes; (ix) Regarding the alleged manipulation scheme said to have been devised by Noticee‑1, they were not involved in any manner. The admitted position is that any undue gain did not accrue to their benefit; (x) The Show Cause Notice merely references the provisions of the Futures and Options (Regulation) without explaining how its provisions can be applied to Noticee‑3 and Noticee‑4. These provisions do not apply to financing entities that have no role in the alleged fraudulent trades; (xi) Their involvement, as set out in the Show Cause Notice, is not based on any cogent evidence but is purely conjectural. No inducement on the part of Noticee‑3 and Noticee‑4 is alleged, they have not dealt in securities, and there is no evidence of collusion between Noticee‑1 and Noticee‑3/4., The issues that arise for consideration in the present case are: (a) Whether Noticee‑1 entered into a well‑planned operation with its appointed agents to earn undue profits from the sale of Reliance Petroleum Limited shares in both the cash and futures segments; (b) Whether the dumping of a large number of shares in the cash segment of the Reliance Petroleum Limited scrip during the last ten minutes of trading by Noticee‑1 resulted in a fall in the settlement price of the Reliance Petroleum Limited futures contract, thereby violating Regulation 3(a)‑(d) and Regulation 4(1), 4(2)(d), (e) of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 and SEBI Circular No. SMDRP/DC/CLR‑10/01 dated 2 November 2001; (c) Whether Noticee‑2, being the chairman and managing director of Noticee‑1 and responsible for its day‑to‑day affairs, is liable for manipulative trading done by Noticee‑1, resulting in violation of the same regulations; (d) Whether Noticee‑3 and Noticee‑4 have aided and abetted Noticee‑1 by providing funds to one of the agents appointed by Noticee‑1, which in turn provided funds to other agents, resulting in violation of Regulation 3(b)‑(d) and Regulation 4(2)(d) & (e); (e) Whether the violations, if any, attract monetary penalty under Section 15HA of the SEBI Act read with Section 12A(a)‑(c); and (f) If so, what would be the quantum of monetary penalty that can be imposed on the noticees after taking into consideration the factors mentioned in Section 15J of the SEBI Act., Regulation 3 – Prohibition of certain dealings in securities: (a) No person shall directly or indirectly buy, sell or otherwise deal in securities in a fraudulent manner; (b) No person shall use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or regulations made thereunder; (c) No person shall employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) No person shall engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange., Regulation 4 – Prohibition of manipulative, fraudulent and unfair trade practices: (1) Without prejudice to the provisions of Regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include, among other things, (d) paying, offering or agreeing to pay or offer, directly or indirectly, any money or money’s worth for inducing any person to deal in any security with the object of inflating, depressing, maintaining or causing fluctuation in the price of such security; (e) any act or omission amounting to manipulation of the price of a security., The allegation against Reliance Industries Limited is that it manipulated the settlement price by placing huge sell orders in the cash segment during the last ten minutes of trading on 29 November 2007 (the day of expiry of Reliance Petroleum Limited November futures contracts), which depressed the closing share price of Reliance Petroleum Limited, while simultaneously having a large short position in Reliance Petroleum Limited November futures through its agents. Consequently, the settlement price of the Reliance Petroleum Limited November futures contract was depressed, enabling Reliance Industries Limited to make unfair and undue profit on the positions taken in the futures segment through its agents. Noticee‑2, being the chairman and managing director of Reliance Industries Limited, is alleged to be directly responsible for the actions of Reliance Industries Limited. Noticee‑3 and Noticee‑4, being connected to Reliance Industries Limited, have allegedly provided the necessary finance to the agents of Reliance Industries Limited, thereby enabling them to take large positions in the futures segment., The Hon’ble Securities Appellate Tribunal, in its order dated 9 August 2019, directed the undersigned to consider the preliminary objections raised by the noticees while deciding the matter on merits after giving them an opportunity of hearing. Reliance Industries Limited raised a preliminary objection that inquiry proceedings and adjudication proceedings cannot be said to be parallel proceedings in view of the manner of exercise of power under Section 11 and Section 11B of the SEBI Act. Reliance Industries Limited contended that where SEBI exercises its power of disgorgement under Section 11B, after adjudicating a final finding of guilt and when such finding is under consideration by the Hon’ble Tribunal in appeal, there cannot be proceedings initiated under Section 15‑I as the initiation of adjudication at this stage would amount to SEBI reviewing its own finding during the pendency of an appeal before the Hon’ble Tribunal. Reliance Industries Limited further argued that any further proceedings by the Adjudicating Officer on the same issues would be against public policy and would result in multiplicity of proceedings., With respect to finality of guilt, the Whole Time Member of SEBI has already passed an order dated 24 March 2017 in respect of Reliance Industries Limited and its agents under Section 11/ 11B proceedings. Accordingly, as far as SEBI is concerned, finality in respect of the Section 11/ 11B proceedings has already been achieved upon the passing of the Whole Time Member order. At the time when Reliance Industries Limited raised the objection, its appeal was under consideration before the Hon’ble Securities Appellate Tribunal. Subsequently, the Hon’ble Tribunal, in its order dated 5 November 2020, upheld the Whole Time Member order of 24 March 2017, and therefore finality of appeal before the Hon’ble Tribunal has been attained. The Hon’ble Tribunal, in its order dated 9 August 2019, observed that simultaneous parallel proceedings can be initiated under Rule 4 of the SEBI (Enforcement) Rules, 1995, which is distinct from the proceedings initiated under Section 11 and 11B of the SEBI Act, 1992. Consequently, the preliminary objection raised by Reliance Industries Limited is devoid of merit., The order appointing the Adjudicating Officer does not indicate the basis on which the SEBI formed an opinion to initiate adjudication proceedings against Noticee‑2. However, the records show that at the time of approving action against Reliance Industries Limited and its agents under Section 11/ 11B of the SEBI Act, it was decided that the initiation of adjudication proceedings against Reliance Industries Limited, Noticee‑2, Noticee‑3 and Noticee‑4 would be decided on the basis of the outcome of the said Section 11/ 11B proceedings. Accordingly, adjudication proceedings against the said noticees were initiated only after the final order of 24 March 2017 under Section 11/ 11B. Therefore, there is no infirmity in the order appointing the Adjudicating Officer., The submissions of Noticee‑3 and Noticee‑4 contend that they have not been provided with all the documents sought in their letters dated 11 June 2018, 25 June 2018 and 25 March 2019. The allegations against the noticees are clearly delineated in the Show Cause Notice and relevant documents have been provided to them as enclosures to the Show Cause Notice. At the request of Noticee‑3 and Noticee‑4, certain additional documents were also provided to them by letter dated 8 March 2019 and email dated 10 February 2020. All the documents relied upon in respect of Noticee‑3 and Noticee‑4 have therefore been provided to them., In view of the above, since all the documents which were relevant and relied upon in the instant proceedings have been provided to Noticee‑3 and Noticee‑4, the principles of natural justice have been duly complied with in the instant proceedings and no prejudice in filing their reply has been caused to Noticee‑3 and Noticee‑4., Noticee‑3 and Noticee‑4 have raised the issue of delay in initiation of the adjudication proceedings. They contend that the present adjudication proceedings relate to an investigation period that commenced and concluded in November 2007, and that until the issuance of the Show Cause Notice on 21 November 2017, no notice was issued or proceedings initiated by SEBI against them. They claim that the delay of nearly ten years in bringing the present proceedings is inordinate, unexplained and has caused serious prejudice to their ability to defend themselves against the charges., The investigation in the matter was concluded in 2010 and Section 11/ 11B proceedings were approved against Reliance Industries Limited and the twelve agents appointed by it. It was further decided that based on the outcome of the Section 11/ 11B proceedings against Reliance Industries Limited and the agents, a final decision may be taken about adjudication proceedings against Reliance Industries Limited, its managing director Shri Mukesh Ambani and the two funding entities (NMSEZ and MSEZ). Subsequently, a Show Cause Notice dated 16 December 2010 under Section 11/ 11B proceedings was issued to Reliance Industries Limited and the twelve agents. During the course of those proceedings, Reliance Industries Limited and the twelve agents filed applications for settlement through a consent order on 26 April 2011.
|
id_1666
| 2
|
The said application was placed before the High Powered Advisory Committee (HPAC) of the Securities and Exchange Board of India (SEBI) and the HPAC decided that the application could not be settled through a consent order; this was communicated to Reliance Industries Limited (RIL) by letter dated 2 January 2013. Meanwhile, RIL filed Appeal No. 224 of 2012 before the Honourable Securities Appellate Tribunal (SAT) concerning inspection of documents. The appeal was disposed of by the Honourable SAT through its order dated 20 December 2013. Personal hearings in the matter were conducted on various dates between April 2015 and January 2017. Subsequently, the Whole Time Member of SEBI passed the final order on 24 March 2017 under Sections 11 and 11B of the SEBI Act. From the chronology of events, it is evident that due process and procedure were followed for processing the consent application, for inspection of documents and for the hearings, which together took nearly two years. Therefore, considering the sensitivity of the matter, sufficient opportunities and time were granted to the noticees under the proceedings in accordance with the principles of natural justice, and the period cannot be characterised as undue or unexplained delay., Considering the decision about adjudication proceedings based on the outcome of the Section 11/11B proceedings, the applicable time for assessing any delay begins from the completion of those proceedings, i.e., 24 March 2017. A Show Cause Notice (SCN) was issued in the present proceedings on 21 November 2017. Thereafter, the adjudication proceedings were conducted as per the Adjudication Rules, and the chronology of various correspondences is provided in paragraph 8 of this order. Due process was followed in compliance with the principles of natural justice whereby Noticee‑3 and Noticee‑4 were granted inspection of documents at their request and additional documents were also provided. Multiple opportunities to submit replies and to be heard were granted. On certain occasions the noticees themselves requested to keep the matter in abeyance, which was not accepted in view of the Honourable SAT order dated 9 August 2019., The observations of the Honourable SAT in Rakesh Kathotia & Others v. SEBI (Appeal No. 7 of 2016, decided 27 May 2019) are relied upon. It is true that no period of limitation is prescribed in the Act or the Regulations for issuance of a show cause notice or for completion of adjudication proceedings. The Supreme Court in Government of India v. Citedal Fine Pharmaceuticals Ltd. v. Madras and Others, AIR 1989 SC 1771, held that in the absence of any period of limitation, the authority must exercise its powers within a reasonable period, which depends on the facts of each case. This proposition has been reiterated by the Supreme Court in Bhavnagar University v. Palitana Sugar Mill (2004) 12 SCC 670, State of Punjab v. Bhatinda District Co‑op. Milk P. Union Ltd (2007) 11 SCC 363 and Joint Collector Ranga Reddy Dist. & Anr. v. D. Narsing Rao & Others (2015) 3 SCC 695. More recently, in Adjudicating Officer, SEBI v. Bhavesh Pabari (2019) SCC Online SC 294, the Court held that when a period of limitation is not prescribed, the power must be exercised within a reasonable time, the length of which depends on the facts and circumstances, nature of the default, prejudice caused, and whether third‑party rights have been created. Accordingly, since the initiation of the present adjudication proceedings, no undue delay has been made while complying with the process and procedures laid down in the Adjudication Rules, and no prejudice has been caused to the noticees as contended. Thus, the contention of Noticee‑3 and Noticee‑4 about delay in the proceedings is not valid., Issue (a): Whether Noticee‑1 entered into a well‑planned operation with its appointed agents to earn undue profits from the sale of Reliance Power Limited (RPL) shares in both the cash and futures segments, thereby violating Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)(d), (e) of the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003 and SEBI Circular No. SMDRP/DC/CLR‑10/01 dated 2 November 2001., The agenda for the Board of Directors meeting of RIL held on 29 March 2007 shows that a presentation on the Operating Plan and Capital Budget for the year 2007‑08 was to be made by various executives, projecting a resource requirement of Rs 87,000 crore for the next two years. A resolution was passed by the Board on that date approving the operating plan for 2007‑08 and the resource requirements for the next two years. RIL submitted that the Board authorised two senior executives, namely Chief Financial Officer Mr Alok Agarwal and Controller of Accounts Mr L V Merchant, to explore, identify and implement optimal funding avenues. Detailed presentations on the highlights and annual plans for various business segments were made by senior officials, and the Board approved the operating plan, capital budget and funding avenues, authorising Mr Alok Agarwal and Mr L V Merchant to explore, identify and implement optimal funding avenues., The resolution did not refer to the sale of RPL shares. RIL held 337.50 crore shares of RPL, amounting to 75 % of its share capital, making RPL a 75 % subsidiary of RIL as of March 2007. RIL stated that the shares of RPL started moving upwards and reached approximately Rs 150 on 27 September 2007. Analyst reports by Goldman Sachs (September 2007) and Kotak Institutional Equities (30 October 2007) indicated that the scrip was overvalued. Consequently, RIL decided to sell 5 % of RPL shares in November 2007., Between 30 October 2007 and 3 November 2007, RIL appointed twelve agents to undertake transactions in the November 2007 futures (settlement period 1–29 November 2007) on its behalf. RIL entered into agency arrangements with these agents, under which profits arising from futures and options (F&O) transactions were to be transferred to RIL’s account and the agents would earn commission. The agents included Gujarat Petcoke and Petroproducts Supply Pvt. Ltd., Dharti Investments and Holdings, Vinamra Universal Traders Pvt. Ltd., Pipeline Infrastructure (India) Pvt. Ltd., Fine Tech Commercials Pvt. Ltd., Darshan Securities Pvt. Ltd., Aarthik Commercials Pvt. Ltd., Relpol Plastic Products Pvt. Ltd., Motech Software Pvt. Ltd., Relogistics (India) Pvt. Ltd., Relogistics (Rajasthan) Pvt. Ltd., and others, with addresses and corporate connections indicating close association with the Reliance Group., Mr Sandeep Agarwal, an employee of a wholly owned subsidiary of RIL, was commonly authorised by the twelve agents to place orders in the F&O segment and also placed orders on behalf of RIL in the cash segment. Thus, the orders were placed by the same person for all the entities, which were connected directly or indirectly with RIL through common directors, addresses or email identities., The twelve agents collectively took a net short position of 9.92 crore RPL shares in the November 2007 futures during 1–6 November 2007. The individual net short quantities (in lakh shares) were: Gujarat Petcoke and Petroproducts Supply Pvt. Ltd. 90.42, Aarthik Commercials Private Limited 89.88, LPG Infrastructure India Private Limited 88.91, Relpol Plastic Products (P) Ltd. 89.88, Fine Tech Commercials Pvt. Ltd. 89.65, Pipeline Infrastructure India Private Limited 89.98, Motech Software Private Ltd. 89.61, Darshan Securities Pvt. Ltd. 80.00, Relogistics India Private Limited 77.49, Relogistics (Rajasthan) Private Limited 12.06, Vinamra Universal Traders Pvt. Ltd. 89.55, and Dharti Investment and Holdings Limited 104.79, totalling 992.2 lakh shares (48.64 % of open interest). On 6 November 2007 the net short position constituted 61.15 % of the open interest in the November futures contract of RPL and 48.64 % of the open interest across all derivative contracts in RPL. The derivatives contracts of RPL reached 95 % of the Market Wide Position Limits (MWPL) on that date, leading to a restriction on further increase in open interest as per exchange rules., One of the twelve entities exceeded the maximum client‑wise position limit, attracting a penalty by the National Stock Exchange (NSE). Two entities squared off their positions before expiry; as of 29 November 2007 the remaining ten entities jointly held a net short position of 797.21 lakh shares, accounting for 93.63 % of the open interest in the November futures contracts of RPL and 40.13 % of open interest across all derivative contracts., The Show Cause Notice alleged that these arrangements were entered into with the intention to corner the F&O segment and were therefore fraudulent and manipulative. The agents assumed individual positions in the November 2007 futures of RPL without disclosing their relationship with the principal, RIL. The trading members and the market at large were unaware that the clients had been authorised by RIL to take separate and independent position limits., The fact that the twelve agents were acting on behalf of RIL and, in law, were nothing but RIL is established by the following undisputed facts: (i) all twelve agency agreements are identical and the trades were only for the benefit of RIL; (ii) Clause 1.2 of the agreements provides that each transaction must be approved by RIL and the agents have no discretion to execute trades without RIL’s authorisation; (iii) Clause 3.2 provides that all profits and losses arising from the transactions are to be credited to RIL’s account; (iv) the agents opened bank accounts and entered into agreements with RIL just before the early‑November trading, which was their first trade in RPL shares. Hence, they were instruments and agencies of RIL., RIL adopted the scheme of executing trades through agents because SEBI Circular No. SMDRP/DC/CIR‑10/01 dated 2 November 2001 and NSE Circular No. NSE/CMPT/2982 dated 7 November 2001 imposed client‑wise position limits in single‑stock futures as part of risk‑containment measures to deter concentration of positions and market manipulation. Position limits define the maximum total or net long/short position that may be held or controlled by one entity or class of traders. As per the circulars, the gross open position across all derivative contracts for a customer should not exceed the higher of 1 % of the free‑float market capitalisation or 5 % of the open interest in the derivative. On 6 November 2007 the maximum permissible client‑wise limit was 101 lakh shares; on 29 November 2007 it was 90 lakh shares., RIL contended that the limits are only client‑wise and that there is no concept of aggregating positions of persons acting in concert. However, Section 226 of the Indian Contract Act, 1872 provides that contracts entered into through an agent and obligations arising from acts done by an agent may be enforced as if the contracts had been entered into and the acts done by the principal personally. Consequently, the futures contracts executed by RIL through its agents have the same legal effect as if executed by RIL itself. Accepting RIL’s interpretation would render the client‑wise limit meaningless and would allow a person to multiply his position by enlisting agents, thereby depriving other market participants of available open interest., Considering the position limits for RPL futures, RIL could not have taken a short position exceeding 101 lakh shares on 6 November 2007 or 90 lakh shares on 29 November 2007 if it had acted directly. By employing the twelve‑agent device, RIL clandestinely accumulated positions far in excess of the permissible limits. In Firm of Pratapchand Nopaji v. Firm of Kotrike Venkatta Shetty (1975) 2 SCC 208, the Supreme Court held that what cannot be done directly cannot be done indirectly by engaging another. The same principle was reiterated in Jagir Singh v. Ranbir Singh (1979 AIR 381)., In light of the above, RIL, which could not directly take a position in the futures market beyond the prescribed limits, cannot do so indirectly through the device of twelve agents. The principal‑agent arrangement, presented by RIL to justify the cornering of position limits by individual entities and the execution of trades through a common authorised person (who also executed trades in the cash segment), is a well‑orchestrated scheme to defeat the position restrictions., The circulars authorising exchanges to impose penalties for breaches of client‑wise position limits cannot be construed to limit the regulator’s inherent powers to curb fraudulent and manipulative practices and to protect market integrity. The timing and manner of execution of the agency agreements indicate that they were executed by RIL to circumvent the regulatory framework governing F&O transactions. The entire exercise of violating position limits was perpetrated from the moment the twelve entities were identified and appointed as agents, reflecting a pre‑meditated and pre‑planned exercise by RIL., RIL has admitted that the steps in the F&O segment were taken in view of its planned sale of 22.5 crore RPL shares in the cash segment. Such a large sale was expected to trigger steep price declines in both cash and futures markets, and taking large futures positions was a way to profit from the anticipated price fall. While RIL could have taken a maximum position of about 1.01 crore shares in futures in November 2007 on its own, roping in twelve entities amplified its position‑taking capacity proportionately., RIL’s argument that a breach of position limits attracts only a monetary penalty and does not automatically amount to market manipulation or a fraudulent trade is not acceptable. Undermining client‑wise, member‑wise, and position limits through fraudulent methods increases concentration risk in the derivatives market and harms market integrity. Accordingly, the appointment of several agents by RIL and the assumption of separate position limits by the twelve agents in the F&O segment constitute fraud as defined in Section 12A(a), (b) and (c) of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations, 2003., RIL also sought to justify the transactions executed through its agents in the F&O segment by claiming they were hedging transactions. RIL stated that, anticipating a fall in the RPL share price, it adopted a prudent strategy to hedge its proposed sale of RPL shares by taking short positions in the November 2007 futures. Hedging is a strategy of offsetting price risk in a cash market position by taking an equal but opposite position in the futures market. While hedging does not eliminate the risk of loss, it mitigates that risk. Black’s Law Dictionary (11th Edition) defines a hedging contract as a contract of purchase or sale that amounts to insurance against changing prices, whereby a dealer contracts to buy or sell for future delivery the same amount of a commodity as he or she is buying or selling in the present market. Hedging contracts are permissible market instruments that provide insurance against price fluctuations; they are primarily aimed at risk mitigation rather than generating substantial profits. A hedge requires an existing exposure in the cash market and an offsetting position in the futures market. Hedge transactions may be cash‑flow hedges (against a future purchase or sale) or fair‑value/inventory hedges (to protect the value of an asset expected to decline). In any case, the design of a hedge is to mitigate price risk, not to make substantial profits., I note that in Pankaj Oil Mills v. Commissioner of Income‑Tax, the principles relating to the tax treatment of hedging transactions were examined, reinforcing the distinction between genuine hedging activities and speculative or manipulative practices.
|
id_1666
| 3
|
1976 SCC Online Gujarat 33, AIR 1978 Gujarat 226, the Honorable Gujarat High Court distinguished between hedging and speculative transactions by stating that hedging transactions are genuine transactions entered into for the purpose of insuring against adverse price fluctuations. In hedging transactions neither delivery nor transfer is contemplated, yet they cannot be treated as speculative transactions in commercial parlance., The technique of hedge trading is explained by the economist W. R. Natu in his book *Regulation of Forward Markets* (page 9). He observes that a hedge contract enables persons dealing with the actual commodity to insure themselves against adverse price fluctuations. A dealer or merchant enters into a hedge contract when he sells or purchases a commodity in the forward market for delivery at a future date, either to correspond to a previous transaction in the spot market or to offset it by a reverse transaction in the forward market., For illustration, a market participant may purchase cotton in the spot market at Rs. 800 per candy, store it for a month, and see the spot price fall to Rs. 750 per candy, incurring a loss of Rs. 50 per candy. To reduce this risk, he sells a forward contract for delivery after one month at Rs. 770 per candy. If the forward price falls to Rs. 720 per candy, the profit of Rs. 50 per candy on the forward contract offsets the loss in the spot market, thereby reducing overall risk and possibly yielding a net profit., In another illustration, an exporter of castor oil contracts to sell 100 tonnes to an importer in the United States at Rs. 1,650 per tonne, with delivery after two months. Immediately after the contract, the exporter buys about 4,000 candies of castor seed in the forward market, roughly equivalent to 100 tonnes of castor oil. He then purchases ready castor oil in the spot market to fulfil the export commitment, liquidating his forward position as he buys. If the spot price of castor oil rises, the exporter incurs a loss in the spot market, but the forward price also rises, generating a corresponding profit that offsets the loss., Thus, by resorting to counter‑balancing transactions in the spot market and the hedge market, the hedger seeks to safeguard his position. Prices in the two markets may not always move identically; the hedger may gain or lose, but any gain or loss is marginal compared with the result of not hedging at all. While hedging protects against loss from adverse price movements, it also prevents windfall profit from favourable movements, which is the price paid for insurance against loss., In order to be genuine and valid, hedging contracts of sale must not exceed the total stocks of the raw material or merchandise on hand, including existing stocks and stocks acquired under firm purchase contracts., Reliance Industries Limited (RIL) stated that its Board, while approving the operating plan for 2007‑08 and the broad resource requirements for the next two years, did not lay down a plan for raising resources and left those details to two senior officials. RIL also did not draw up a hedging policy for the sale of 22.5 crore Reliance Petroleum Limited (RPL) shares, so the transactions in RPL futures were decided without an approved policy framework, which is surprising for a corporation of RIL’s size., I am of the view that it is necessary to demonstrate that a hedge is genuine either through documentary evidence as per an approved policy or through transactions that clearly evidence compliance with hedge practices. RIL’s submissions admit that no hedging policy was drawn up for the sale of 22.5 crore RPL shares. In the absence of any approved hedge policy and without demonstrating that the impugned transactions were in accordance with such a policy, the submissions of Noticee‑1 lack merit, especially since the transactions were routed through a web of entities to circumvent position‑limit provisions intended to reduce concentration risk., I now examine the transaction in light of normal acceptable hedge practices. RIL has stated that there is no legal requirement for the hedge proportion to be maintained at the same level throughout the hedge period. However, there must be a correlation between the quantity of shares exposed to market fluctuations and the quantity of hedge transactions undertaken in the futures market. If the short position held by RIL in the Futures and Options (F&O) segment were a genuine hedge for its proposed share sales, RIL would have unwound its futures position to offset the cash‑segment sales. Instead, RIL retained a futures position in excess of its proposed cash‑segment sale, exposing itself to market fluctuations. Maintaining a so‑called hedge of 7.97 crore shares against a physical requirement of 4.5 crore shares shows that the hedging argument has no basis. Moreover, on 19 and 27 November 2007 RIL executed additional short sales of 0.02 crore shares through its agents, contrary to any hedging objective, as the maximum number of RPL shares to be sold was already less than the existing short position. On 29 November 2007 RIL sold 2.25 crore shares in the cash segment and the entire outstanding futures position of 7.97 crore shares was cash‑settled at the end of the day, leaving 2.21 crore shares still unsold after expiry of the November RPL futures. Noticee‑1 has failed to show any fresh futures contract entered into after 29 November 2007 to hedge this anticipated sale. Consequently, the impugned transactions do not reflect a genuine intention to hedge but rather a speculative attempt to profit from the price dip in the cash segment., RIL also contended that the futures position was not only to protect cash‑market sales but also to provide an inventory hedge for its large inventory of RPL shares (335 crore) against a price drop. However, RIL held the RPL shares from 2006 onwards and there is no evidence of an inventory‑hedge policy or any futures position taken prior to 1 November 2007. The excess futures position in November 2007 was not an inventory hedge, as RIL failed to enter any fresh futures contract after 29 November 2007 despite holding a huge inventory. In an inventory hedge, RIL should have rolled over the RPL futures contracts to the next month; instead, it allowed the short position to expire at settlement price while still holding the inventory, indicating that the futures contracts were used for speculative purposes rather than hedging price risk., RIL clearly expected the cash‑market price of RPL to dip once it started selling. A large dip would reduce the realization from cash‑market sales, prompting RIL to accumulate a huge futures position (far exceeding the permissible limit for an individual client) and sequence the transactions to make unlawful gains. The entire sequence could not have been executed without a strategy to corner the futures position in the first place., RIL has accepted the connections between itself and the agents, describing them as a principal‑agent arrangement, and has claimed a hedging strategy to divert regulatory attention from the concentration created by its F&O transactions. To justify the strategy, RIL relied on a table showing daily positions in RPL November 2007 futures, the quantity of shares yet to be sold in the cash segment, and the percentage of hedge position. The table demonstrates that from 15 November 2007 onwards the short position in the F&O segment exceeded the remaining cash‑market sales, indicating that some futures positions were naked until the expiry of the November RPL futures on 29 November 2007. This does not reflect a genuine hedge but a speculative attempt to profit from the price dip in the cash segment during the last half‑hour on the expiry day., The following table summarises the profit earned by twelve entities that traded in the derivatives segment of RPL during November 2007. Each entity’s purchase and sale transactions, along with the profit earned (in Rs. crores), are listed, showing substantial profits ranging from Rs. 0.49 crore to Rs. 60.51 crore, amounting to a total profit of Rs. 513.12 crore. These profits were passed on to RIL, indicating that the derivative trades were not for genuine hedging but for speculative gain., In conclusion, I find that RIL was not genuinely hedging risk but was aiming to reap huge speculative profits by cornering futures positions and committing fraud on general investors and the market. Noticee‑1 cornered the open‑interest position in November RPL futures to the extent of 61.5 % on 6 November 2007 and 93.63 % on 29 November 2007, and closed out the outstanding short position of 7.97 crore shares on 29 November 2007 through its agents. This amounts to a well‑planned, fraudulent and manipulative trading scheme under the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003., Issue (b): Whether the dumping of a large number of shares in the cash segment of the RPL scrip during the last ten minutes of trading by Noticee‑1 resulted in a fall in the settlement price of RPL futures, thereby violating Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)(d), (e) of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 and SEBI Circular No. SMDRP/DC/CLR‑10/01 dated 2 November 2001., RIL sold 1.95 crore RPL shares on the National Stock Exchange (NSE) in the cash segment during the last ten minutes of trading on 29 November 2007, after having sold 18.04 crore shares by 23 November 2007. The sale constituted a large percentage of the day’s volume (5.84 %–35.52 % on NSE and 6.93 %–38.11 % on the Bombay Stock Exchange), sufficient to significantly impact the share price. On 29 November 2007 the RPL scrip opened at Rs. 193.80, rose to Rs. 224.35 by 3:20 pm, and then fell to Rs. 209.8 by 3:30 pm after RIL placed 17 sell orders for 2.43 crore shares, executing 1.95 crore shares in 22,704 trades, accounting for 56 % of the total volume in the last ten minutes., In 12 out of the 17 trades, RIL placed sell orders at prices lower than the last traded price (LTP). For example, at 3:21:40 pm, when the LTP was Rs. 224.70, RIL sold 20 lakh shares at Rs. 222, Rs. 2.70 lower, despite buy orders available between Rs. 222.05 and Rs. 224.70. Similar lower‑than‑LTP orders were placed at 3:25:08 pm and 3:25:30 pm, allowing RIL to dump a huge quantity of shares and cause the price to fall, with the scrip closing the day at Rs. 205.05., There is no rational explanation for RIL’s transactions. It was under no compulsion to sell the entire 22.5 crore RPL shares in November 2007, as evidenced by the fact that it did not sell any shares after 23 November until the last ten minutes on 29 November, and still had 2.21 crore shares unsold after that date. The real objective appears to have been to bring down the RPL share price by dumping a huge quantity in the cash segment during the last ten minutes, thereby influencing the settlement price in the futures segment., The dumping of shares in the last ten minutes constitutes market manipulation using the commonly known method of “marking the close”. Whether or not RIL made a profit is immaterial; the act itself is manipulative. Accordingly, the transactions are prima‑facie covered under the definition of ‘fraud’ in Regulation 2(1)(c) of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003, and RIL has violated Regulations 3(a)‑(d) and 4(1), 4(2)(d) & (e) of those regulations as well as SEBI Circular No. SMDRP/DC/CIR‑10/01 dated 2 November 2001., Issue (c): Whether Noticee‑2, being the Chairman and Managing Director of Noticee‑1 and responsible for its day‑to‑day affairs, is liable for the manipulative trading done by Noticee‑1 and has violated Regulation 3(a)‑(d) and Regulation 4(1), 4(2)(d), (e) of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 and SEBI Circular No. SMDRP/DC/CIR‑10/01 dated 2 November 2001., Noticee‑2 contended that Section 27 of the Securities and Exchange Board of India Act, as it stood prior to the 2019 amendment, was not applicable to the present adjudication proceedings because it applied only to offences by companies tried before special courts under Section 24 of the Act. Since there are no prosecution proceedings against RIL under Section 24, Noticee‑2 argued that Section 27 does not apply., I am of the view that the regulatory intent of Section 27 was not limited to criminal proceedings but also covered civil proceedings. The word ‘offence’ in the pre‑amendment provision does not specifically exclude adjudication proceedings. The 2019 amendment was clarificatory, replacing ‘offences’ with ‘contraventions’. The Honorable Supreme Court of India, while interpreting Section 68 of the Foreign Exchange Regulation Act (pari materia to Section 27 of the SEBI Act) in *Standard Chartered Bank v. Directorate of Enforcement* (24 February 2006), explained that ‘offence’ means an act contrary to or forbidden by law, encompassing both criminal and civil violations. Similar reasoning was adopted in *Depot Manager, Andhra Pradesh State Road Transport Corporation v. Mohd. Yousuf Miya* (1997) and *Brown v. Allweather Mechanical Co.* (1954). Therefore, Noticee‑2’s contention that Section 27 is inapplicable lacks merit., It is relevant to examine the role of Noticee‑2, as Chairman and Managing Director, in terms of direct involvement or knowledge of the well‑planned manipulative scheme undertaken by RIL that led to violations of SEBI regulations and circulars.
|
id_1666
| 4
|
Noticee-2 in his submissions has stated that the scope of powers and functions of a Managing Director are subject to the agreement with the company and/or the powers delegated to such person by the board or shareholders of the company and that he is not responsible for each and every action of the company. In this regard, I note that a Managing Director, as defined in Section 2(26) of the Companies Act, 1956, means a director who is invested with substantial powers of management which would not otherwise be exercisable by him. The proviso to Section 2(26) provides that the power to do administrative acts of a routine nature when so authorised by the Board, such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within substantial powers of management., In the matter of Wasava Tyres v. The Printers (Mysore) Ltd. [2007 139 CompCas 446 Kar], the Honourable Karnataka High Court observed that the words \substantial powers of management\ specifically exclude certain acts from its purview. Therefore, except for the excluded acts, the Managing Director has the power and privilege of conducting the business of the company in accordance with the Memorandum and Articles of Association of the company. The institution of the emission on behalf of the company by the Managing Director is deemed to be within the meaning of \substantial powers of management\ since such a power is necessary and incidental for managing the day‑to‑day affairs and business of the company., Therefore, I note that a Managing Director is responsible for managing the day‑to‑day affairs and business of the company and he has been vested with the said power under the Companies Act, 1956. This implies a high level of accountability and knowledge of the overall functioning of the company. I also note that no agreement between Noticee-2 and the Board of Reliance Industries Limited (RIL) has been presented before me that limits Noticee-2's powers to implement the decisions of the Board of RIL. Even if such an agreement existed, it would go against the interest of the shareholders of RIL whereby the Managing Director would have no oversight over the decisions relevant to the company., Noticee-2 has contended that the RIL Board had authorised two officials to implement the Board decision taken in the meeting dated 29 March 2007 and therefore he cannot be held responsible for any such actions. Noticee-2 further contended that the RIL Board (including Noticee-2) was informed of the sale of 5 % shares of Reliance Power Limited (RPL) only at the meeting held on 19 November 2007, but not of the specific details and therefore cannot be alleged to have carried out the trades., I note from the minutes of the Board meeting held on 29 March 2007 that two officials of RIL, namely Mr. Alok Agarwal (Chief Financial Officer) and Mr. L V Merchant (Controller‑Accounts), were authorised to explore, identify and implement optimal avenues of funding. The Board, after discussion, noted the presentations and approved the Operating Plan and Capital Budget for the year 2007‑08 including resource requirements for the next two years and funding avenues, and authorised Shri Alok Agarwal and Shri L V Merchant, executives of the company, to explore, identify and implement optimal avenues of funding., I note from the minutes of the RIL Board meeting dated 19 November 2007 that a presentation on the update of the strategic plan, including financial performance, was made by Mr. Alok Agarwal, the CFO of RIL and one of the authorised officials. In this regard, the matter of sale of 5 % of RPL shares was discussed in that meeting. The Board was informed of the progress made towards raising resources for the company's ongoing projects in line with the fund‑raising programme authorised by the Board of Directors at the budget meeting held in March 2007, and that after exploring various means of finance, the company was disposing of RPL shares of up to 5 % through trades in RPL securities. The Board noted the same., It is the contention of Noticee-2 that the RIL Board had authorised the aforesaid two officials to explore, identify and implement optimal avenues of funding. RIL, in its submissions, has stated that at the relevant time it had total assets worth Rs 149,792 crore and its turnover for the financial year 2007‑08 was Rs 139,269 crore. Therefore, I find it difficult to believe that an entire asset sale to raise Rs 87,000 crore, as decided in the Board meeting dated 29 March 2007, was left to the discretion of the two officers without the supervision of the Managing Director, when the said amount represented a substantial percentage of its total assets and turnover., I am of the view that the only test before me is to decide whether the said officials were competent to take all the decisions given their designation. From the plain reading of the Board minutes, the intention of the Board of RIL was not to completely delegate the responsibility of all three activities (exploring, identifying and implementing) to the officials. Rather, the required funding was to be raised in two stages, the first stage being exploration and identification, with implementation to happen only after approval by a competent authority, given the size of the funds to be raised and the designation of the persons authorised. Authorising only two officials to independently carry out all three activities is not desirable in any corporate structure considering the huge amount of funding to be raised, because individual discretion of the officials could arise, which may not be in the best interest of the company and its shareholders., I note that there are no records presented before me to demonstrate the entire chronology of how the various avenues of funding were explored, identified and the implementation plan was arrived at. Therefore, it is implicit that either the Board or the Managing Director, who is also a member of the Board, would be the competent authority to authorise the implementation plan after discussions on the avenues explored and identified. There is no record or document presented before me that such explicit approval for the implementation plan was given by the Board of RIL. In the absence of the same, and considering the corporate hierarchy, it is implicit that Noticee-2, as Managing Director and a member of the Board, would be the competent authority to authorise the implementation plan of the funding avenues explored and identified., Noticee-2 has claimed that the Board of RIL, including himself, was informed of the sale of RPL shares only during the Board meeting on 19 November 2007. In my view, considering the facts and circumstances discussed above, it is highly unlikely that Noticee-2 was not aware until that meeting because the implementation plan to raise finance through disposing of 5 % shares of RPL was already in motion and 18 crore shares of RPL were already sold on the cash segment while the agents were holding short positions in the Futures and Options segment, pursuant to an agreement by one of the Board‑authorised persons, namely Mr. L V Merchant. Therefore, given the hierarchy in the corporate structure, such transactions in the cash and Futures and Options segments could not have taken place without the approval (either written or oral) or knowledge of the Managing Director, who heads the corporate hierarchy of RIL. Consequently, I find no merit in the submissions of Noticee-2 that he was not aware of the transactions undertaken for the benefit of RIL until the Board meeting on 19 November 2007., I also consider it appropriate to examine whether the authorised officials on their own were independently capable and had the desired authority and power, in the absence of any document indicating express delegation apart from the Board minutes, to undertake the entire scheme of transactions without any consent, knowledge and approval from the Managing Director or the RIL Board. Noticee-2 has contended that the relevant actions of RIL in the present case were part of a special mandate given by the RIL Board to two officers and that such officers would be obliged to inform the RIL Board of the actions taken by them. I note that the role of the said officers is differentiated from the role of a compliance officer under law, which provides for direct reporting to the Board. Since these officials were not compliance officers, it cannot be assumed that they had an obligation to report directly to the RIL Board. Therefore, the two officers, being subordinate to Noticee-2, were operating under a hierarchy headed by Noticee-2 as Managing Director., The scheme of transactions undertaken in chronological order is as follows: (a) RIL entered into principal/agent agreements with twelve agents between 30 October 2007 and 3 November 2007 for transactions in the Futures and Options segment on behalf of RIL. The agreements provided that the agent would act on prior instructions of the principal, that the principal would reimburse interest costs for any borrowed funds, and that the agent could use its own funds up to a maximum limit of Rs 75 crore unless the principal provided funds. (b) For the purpose of undertaking transactions on behalf of RIL, one of the agents, Vinamra, had already arranged finance from Noticee-3 to the tune of Rs 2,750 crore and from Noticee-4 to the tune of Rs 550 crore by way of inter‑corporate deposits and subsequently advanced loans to the other eleven agents. All agents were eligible for reimbursement of interest costs from RIL. (c) At the instruction of RIL, agents took short positions in RPL November futures during 1–6 November 2007 for the purpose of hedging future sales of RPL shares in the cash segment. (d) Sale of RPL shares in the cash market occurred on various trading days during November 2007 starting from 6 November 2007 after the short positions in the Futures and Options segment had been taken. The orders in both segments were placed by the same person, Mr. Sandeep Agarwal, who is connected to RIL. (e) Information about disposing of 5 % of RPL shares was provided to the RIL Board on 19 November 2007 by the authorised officials. (f) RIL did not sell any shares in the cash market from 24 November 2007 until the last half‑hour of trading on 29 November 2007, when it sold another tranche of 1.95 crore shares on the National Stock Exchange, accounting for 11 % of the day’s total traded volume and about 25 % of the total traded volume during the last half‑hour. It also sold 29 lakh shares on the Bombay Stock Exchange during the same period. (g) As confirmed from bank statements, all profits earned in the Futures and Options transactions in the RPL scrip were duly paid over to RIL between 5 December 2007 and 26 December 2007 by the agents, and the commission was paid by RIL to these entities on 26 December 2007., I note from the above chronology that finance was a critical component for the agents to undertake all the transactions in the Futures and Options segment on behalf of RIL and therefore was critical for the manipulative trades. One of the authorised officials, Mr. L V Merchant, had signed the agreement on behalf of RIL with the twelve agents, which are admittedly connected entities of RIL. The agreement provided an implicit guarantee to the agents that interest costs on availed loans would be reimbursed by RIL. The interest being borne by RIL indicates that the finance was arranged on the strength of the name of RIL and not on the individual capacity of the two board‑authorised officials. The finance was arranged from Noticee-3 and Noticee-4, whose chairman is closely connected with RIL, and the loans were provided at concessional rates without any security as collateral, which could only have been offered on the strength of the name of RIL and its Managing Director., The two officials did not have any locus in the entire scheme of transactions and all steps could be effected through the RIL name. When the entire sequence of transactions occurred under the corporate hierarchy of the company, the two officials could not have independently taken every decision for such a multi‑level implementation plan, given the need for approval in a corporate set‑up before implementation. Consequently, I conclude that Noticee-2, being the Managing Director of RIL, would have given approval or had knowledge of the entire manipulative scheme, including the manipulative trades undertaken by RIL in the last half‑hour, as the scheme was well planned and ended with transfer of ill‑gotten gains to the account of RIL, as per the agreement., In K.K. Ahuja v. V.K. Vora and another (2009(3) JCC (NI) 194), the Honourable Supreme Court of India observed that if the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to, the company for the conduct of business of the company. It is sufficient if an averment is made that the accused was the Managing Director/Joint Managing Director at the relevant time, because the prefix \Managing\ to the word \Director\ makes it clear that they were in charge of and are responsible to the company for the conduct of its business., In view of the foregoing, I find that Noticee-2 is deliberately trying to shift the blame for the manipulative trades by RIL onto the two officers. I am of the view that Noticee-2, as Managing Director of RIL, cannot absolve himself or plead ignorance about the entire scheme of manipulative transactions undertaken for the benefit of RIL in the shares of RPL in the cash and Futures and Options segments. Therefore, I find that Noticee-2 was liable for the actions of RIL resulting in violations of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 and the Securities and Exchange Board of India Circular., The next issue for consideration is whether Noticee-3 and Noticee-4, who financed the whole manipulation scheme by funding the agents of RIL, have violated the provisions of Regulations 3(b), (c), (d) and Regulations 4(2)(d) and (e) of the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 by being complicit in the scheme of manipulation to make undue gains. It was alleged that Noticee-3 and Noticee-4 provided loans of Rs 2,775 crore and Rs 550 crore respectively to Vinamra, which was one of the agents appointed by Noticee-1. Vinamra, in turn, advanced funds to ten of the agents appointed by RIL in the form of short‑term inter‑corporate deposits at 12 % per annum for the purpose of making margin money payments to brokers. Under the agreement between RIL and the agents, RIL was obligated to reimburse the interest costs incurred by the agents for such borrowed funds. The balance sheet of M/s Vinamra Universal Traders showed a net worth of Rs 1 lakh and unsecured loans of Rs 3,592 crore as on 31 March 2008. The show cause notice also alleges a connection between RIL and Noticee-3 & Noticee-4 through their chairman, Shri Anand Kumar Jain, who, according to the website of Noticee-3, has been closely associated with the Reliance Group as a strategic advisor. It has also been alleged that Shri Sanjay Punkhia was a director on the boards of Noticee-3, Noticee-4 and Vinamra., Noticee-3 and Noticee-4 have submitted that they placed their temporary surplus funds as inter‑corporate deposits, repayable on demand, with Vinamra to earn income. The rate of interest on the inter‑corporate deposits given to Vinamra by Noticee-3 was 8 % per annum and by Noticee-4 was 6.5 % per annum. Both noticees state that they received back the principal and interest from Vinamra as per the terms of the agreement and that the advance of loans as inter‑corporate deposits was a business decision, not collusion with RIL and its agents. They deny any relationship with RIL and claim that no fund transfers were executed with RIL during FY 2007‑08. Both noticees also contend that their chairman, Shri Anand Kumar Jain, was merely involved in a professional capacity with RIL and that Shri Sanjay Punkhia was never a director of Vinamra., The connection of Noticee-3 and Noticee-4 with Vinamra and RIL must be seen in the context of the terms of finance provided and the relevant facts relating to links between the companies through their officials and address. Vinamra was incorporated on 17 July 2007. Noticee-4 entered into a facility agreement with Vinamra on 4 August 2007 and Noticee-3 entered into a facility agreement with Vinamra on 22 September 2007 to place inter‑corporate deposits of Rs 550 crore and Rs 2,775 crore respectively. Thus, both noticees agreed to advance a large amount to Vinamra within days of its incorporation., The interest rates charged by Noticee-3 and Noticee-4 were 8.00 % per annum and 6.50 % per annum respectively for the unsecured loans. At the relevant time, the repo rate fixed by the Reserve Bank of India was 7.75 %. Unsecured loans are generally priced by adding a spread over the repo rate, taking into account borrower profile and other parameters. Therefore, Noticee-3 and Noticee-4 advanced unsecured loans at concessional rates, with Noticee-4’s rate being below the prevailing repo rate and Noticee-3’s rate being nearly equal to it. Despite their claims of no connection with Vinamra, placing inter‑corporate deposits at such low rates with a newly incorporated company is not in the normal course of business., The website of Noticee-3 itself displayed the profile of Shri Anand Kumar Jain, stating that he was closely associated with the Reliance Group. I also note that a letter dated 24 September 2008 from Vinamra to SEBI encloses a resolution passed on 21 September 2007 by the board of directors of Vinamra authorising Shri Sanjay Punkhia, Shri Rohit C. Shah and Shri Hermesh Shah, as authorised signatories, to sign and execute application forms, transfer deeds, instructions for electronic transactions and other documents, to open client accounts with stock brokers, and to do all other acts necessary to give full effect to the resolution., It is clear from the above resolution that Shri Sanjay Punkhia was authorised by the board of Vinamra to undertake various investment activities. Therefore, the contention of Noticee-3 and Noticee-4 that there was no connection between them and Vinamra is not acceptable, as Shri Sanjay Punkhia is a common link, being authorised by Vinamra’s board and concurrently a director on the boards of Noticee-3 and Noticee-4., Facility agreements between Vinamra and Noticee-3 & Noticee-4 were signed on 4 August 2007 and 22 September 2007 respectively. Subsequently, Vinamra entered into an agreement with RIL for taking short positions in the Futures and Options segment, as evident from the terms of that agreement. A combined reading of the facility agreements and the RIL‑Agent agreement, together with the fact that all terms of the agreements were fulfilled, including repayment of inter‑corporate deposits pursuant to the transfer of interest costs by RIL to Vinamra, makes it clear that Noticee-3 and Noticee-4 were fully aware that the funds extended through inter‑corporate deposits were intended to fund the scheme of manipulative trades by RIL and its agents., Based on the terms of the agreement between RIL and the agents, interest on the borrowed funds was to be reimbursed by RIL to the agents. The fact that Noticee-3 and Noticee-4 advanced funds to Vinamra at concessional rates indicates that they had prior knowledge of the entire gamut of transactions and agreements to be undertaken by the agents and RIL in pursuance of the manipulative trade scheme, and they had the implicit comfort that the funds advanced for such purpose would ultimately be repaid by the agents as RIL was going to reimburse the interest costs.
|
id_1666
| 5
|
Therefore, based on the circumstances of the matter, I am of the view that the facility agreements entered with Vinamra by Noticee-3 and Noticee-4 were an important leg of the scheme of manipulative trades by Reliance Industries Limited and the funds so provided in the guise of ICDs by way of these facility agreements were ultimately used to implement the plan of taking short positions in Futures and Options Segment. I further note that Vinamra and other agents were subsequently reimbursed the interest charges on the funding availed by Reliance Industries Limited and admittedly, Vinamra had repaid the funds advanced by Noticee-3 and Noticee-4 with agreed interest. I am of the view that the said repayment was made possible only because of reimbursement of interest charges by Reliance Industries Limited. Therefore, I conclude that there is no merit in the contention that funds advanced were in the nature of ICDs advanced in normal course of business and that Noticee-3 and Noticee-4 had no knowledge of the end use of the funds advanced by them., In view of the foregoing, I find that Noticee-3 and Noticee-4 actively aided and abetted Reliance Industries Limited by providing funds to Vinamra, which was ultimately used in providing margin money to the stock brokers for taking the short positions by the agents of Reliance Industries Limited in Reliance Power Ltd futures for earning illegitimate profits from the said positions. I find that Noticee-3 and Noticee-4 have violated the provisions of Regulation 3(b), (c), (d) and Regulation 4(2)(d) and (e) of PFUTP Regulations, 2003., In view of the foregoing discussions, I find the noticees were part of a well‑planned scheme of manipulative trades in the cash segment and the Futures and Options segment in Reliance Power Ltd shares. As a result of their involvement in this scheme, Reliance Industries Limited and Noticee-2 have violated Regulations 3(a), (b), (c), (d) and Regulations 4(1), 10/01 dated 2 November 2001. I also note that Noticee-3 and Noticee-4 have violated the provisions of Regulations 3(b), (c), (d) and Regulations 4(2)(d) and (e) of PFUTP Regulations, 2003., The Honorable Supreme Court of India in the case of SEBI v. Rakhi Trading Pvt. Ltd., (2018) 13 SCC 753 has appreciated that fairness, integrity and transparency are the hallmarks of the stock market in India and the stock market is not a platform for any fraudulent or unfair trade practice. The Honorable Apex Court has further observed that the SEBI Act, 1992 was enacted to protect the interest of investors in securities. Protection of interest of investors should necessarily include prevention of misuse of the market. Further, the Honorable Supreme Court of India in the matter of SEBI v. Shri Ram Mutual Fund [2006] 68 SCL 216 (SC) held that in our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulations is established and hence the intention of the parties committing such violation becomes wholly irrelevant., In view of the same, I am convinced that it is a fit case for imposition of monetary penalty on the noticees under the provisions of Section 15HA of the SEBI Act read with Section 12A(a), (b) and (c) of the SEBI Act, which read as under: Section 15HA of the SEBI Act – Penalty for fraudulent and unfair trade practices. 15HA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty which shall not be less than five lakh rupees but which may extend to twenty‑five crore rupees or three times the amount of profits made out of such practices, whichever is higher. Section 12A(a), (b), (c) of SEBI Act – Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. 12A. No person shall directly or indirectly (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder; (b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange; (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder., While determining the quantum of penalty under Section 15HA of the SEBI Act, it is important to consider the factors relevantly as stipulated in Section 15J of the SEBI Act which reads as under: Factors to be taken into account by the adjudicating officer. 15J. While adjudging quantum of penalty under section 15‑I, the adjudicating officer shall have due regard to the following factors, namely: (a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default; (b) the amount of loss caused to an investor or group of investors as a result of the default; (c) the repetitive nature of the default. Explanation: For the removal of doubts, it is clarified that the power of an adjudicating officer to adjudge the quantum of penalty under sections 15A to 15E, clauses (b) and (c) of section 15F, 15G, 15H and 15HA shall be and shall always be deemed to have been exercised under the provisions of this section., I note that Reliance Industries Limited has entered into a scheme of manipulative trades in respect of the sale of 5 % of its stake in Reliance Power Ltd. However, before undertaking sale transactions in the cash segment, Reliance Industries Limited fraudulently booked large short positions in the Reliance Power Ltd November futures through twelve agents with whom it had entered into an agreement to circumvent position limits for a commission payment. As a result, Reliance Industries Limited fraudulently cornered nearly 93 % of open interest in Reliance Power Ltd November futures, when the said twelve agents took short positions in the Futures and Options segment on its behalf. The funding for the margin payments by the said agents was provided by Noticee-3 and Noticee-4. A common person connected with Reliance Industries Limited had placed orders in the cash segment on behalf of Reliance Industries Limited and in the Futures and Options segment on behalf of the agents. On the date of settlement of Reliance Power Ltd November futures, i.e., on 29 November 2007, Reliance Industries Limited sold 1.95 crore Reliance Power Ltd shares on the NSE cash segment in the last ten minutes of trading resulting in a fall in the prices on the cash segment, which artificially depressed the settlement price of Reliance Power Ltd November futures. This resulted in profits on the huge short positions held by the agents in Reliance Power Ltd November futures and the said profits were transferred back to Reliance Industries Limited by the agents as per prior agreement. The above strategy undertaken by Reliance Industries Limited has resulted in manipulation of settlement price of Reliance Power Ltd November futures and prices of Reliance Power Ltd shares in the cash segment. I note that Noticee-2, being the Managing Director of Reliance Industries Limited, was responsible for the manipulative activities of Reliance Industries Limited. I am of the view that listed companies should exhibit the highest standards of professionalism, transparency and good practices of corporate governance, which inspires confidence of the investors dealing in the capital markets. Any attempt to deviate from such standards will not only erode the confidence of the investors but also affect the integrity of the markets. From the facts mentioned above, the transactions executed by noticees were structured and executed in such manner so as to escape the notice of regulatory authorities and investors as they were not in public domain. Therefore, I conclude that the said scheme of manipulation was deceptive and against the interest of the securities markets., I am of the view that any manipulation in the volume or price of securities always erodes investor confidence in the market when investors find themselves at the receiving end of market manipulators. In the instant case, the general investors were not aware that the entity behind the above Futures and Options segment transactions was Reliance Industries Limited. The execution of the aforesaid fraudulent trades affected the price of the Reliance Power Ltd securities in both cash and Futures and Options segments and harmed the interests of other investors. Execution of manipulative trades affects the price discovery system itself. It also has an adverse impact on the fairness, integrity and transparency of the stock market. I am of the view that such acts of manipulation have to be dealt sternly so as to dissuade manipulative activities in the capital markets., I note that the Whole Time Member of SEBI in the order dated 24 March 2017 has directed Reliance Industries Limited to disgorge an amount of Rs 447.27 crore along with interest calculated at the rate of 12 % per annum from 29 November 2007 onwards till the date of payment. Further, Reliance Industries Limited was prohibited from dealing in equity derivatives in the Futures and Options segment of stock exchanges, directly or indirectly, for a period of one year from the date of the said order. I find it appropriate to consider the direction in the nature of debarment and the disgorgement that has already been passed against Reliance Industries Limited herein as a relevant factor while deciding the quantum of penalty. I have also considered the quantum of loans advanced by Noticee-3 and Noticee-4 to the agent appointed by Reliance Industries Limited. Considering the above, I proceed to impose an appropriate penalty on each of the noticees that serves as a deterrent to the noticees and others indulging in such fraudulent trade practices., Having considered all the facts and circumstances of the case, the material available on record, the factors mentioned in Section 15J of the SEBI Act and in exercise of the powers conferred upon me under Section 15‑I of the SEBI Act read with Rule 5 of the SEBI Adjudication Rules, I hereby impose the following penalty on the noticees under Section 15HA of the SEBI Act: 1. Reliance Industries Limited – Rs 25,00,00,000 (Rupees Twenty‑Five crore only). 2. Shri Mukesh D. Ambani – Rs 15,00,00,000 (Rupees Fifteen crore only). 3. Navi Mumbai SEZ Pvt. Ltd. – Rs 20,00,00,000 (Rupees Twenty crore only). 4. Mumbai SEZ Ltd. – Rs 10,00,00,000 (Rupees Ten crore only)., I am of the view that the said penalty is commensurate with the lapse or omission on the part of the noticees. The noticees shall remit or pay the said amount of penalty within 45 days of receipt of this order either by way of demand draft in favour of SEBI – Penalties Remittable to Government of India, payable at Mumbai, or through the online payment facility available on the website of SEBI, i.e., on the following path, by clicking on the payment link; in case of difficulties in payment of penalties, the noticees may contact the support at portalhelp@sebi.gov.in., The noticees shall forward said demand draft or the details/confirmation of penalty so paid to the Division Chief, EFD‑1, DRA‑II, SEBI, SEBI Bhavan 2, Plot No. C‑7, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. The noticee shall provide the following details while forwarding demand draft/payment information: (a) Name and PAN of the entity; (b) Name of the case/matter; (c) Purpose of payment – Payment of penalty under adjudicating officer proceedings; (d) Bank name and account number; (e) Transaction number., In the event of failure to pay the said amount of penalty within 45 days of the receipt of this order, recovery proceedings may be initiated under Section 28A of the SEBI Act for realization of the said amount of penalty along with interest thereon, inter alia, by attachment and sale of movable and immovable properties., In terms of the provisions of Rule 6 of the Adjudication Rules, a copy of this order is being sent to the noticees and also to the Securities and Exchange Board of India.
|
id_1667
| 0
|
Mahadev Gaur Bishwas, Appellant, versus the State of Maharashtra and Another, Respondents. Ms. Mallika Sharma, on behalf of Anjali Patil, for the appellant. Mrs. A. A. Takalkar, Advocate for the State. Mr. Ujwal Agandsurve for respondent No.2. Police Sub-Inspector M. N. Kudmate from Chembur Police Station., On 6 January 2017, in the afternoon, while the child was playing with her siblings and her mother was present, the accused, who resided in the neighbourhood and was referred to by the child as 'uncle', entered the house and inserted his finger into the child's genital area, causing bleeding. The child rushed to her mother, removed her panties, and went to the toilet but was unable to pass urine and was in pain, shouting. The mother observed blood and the child disclosed that the accused, who was Sanya's father, had placed his finger in the area of urination, causing pain., Following the incident, Vijaylaxmi (Witness 5), a neighbour, was called by the complainant (Witness 2) and informed that her daughter was experiencing pain while urinating and that the accused had fingered her. Both mother and daughter were crying. Witness 5 advised that the girl should be taken to a hospital or wait until the husband returned. At 10:30 p.m. the husband returned, and the incident was narrated to him. The victim was taken to a family doctor (Witness 4) the next day, who advised referral to MAA Hospital, but she was instead taken to Rajawadi Hospital. The parents were told to first lodge a police report. Consequently, Witness 2 approached Chembur Police Station where the complaint was recorded in writing by the Assistant Police Inspector attached to the station (Witness 8). The victim was medically examined by Witness 3 in Rajawadi Hospital and a medico‑legal examination report was prepared., The investigation proceeded with the girl's consent for medical examination given by her mother. Witness 3, a gynecologist attached to Rajawadi Police Station, examined the girl, recorded the history provided by Witness 2, and issued the medico‑legal examination report (Exhibit‑19) under her signature. A spot panchnama was prepared, the victim's birth certificate was obtained, and the statement of the victim was recorded before the Metropolitan Magistrate, Kurla, Mumbai. The accused was arrested and, upon completion of investigation, a charge‑sheet was filed. He was charged with raping the victim, a four‑year‑old girl, by penetrating his finger into the vagina, an offence punishable under Section 376(2) of the Indian Penal Code, and with aggravated penetrative sexual assault punishable under Section 6 of the Protection of Children from Sexual Offences Act, 2012., The accused pleaded not guilty and was tried in POCSO Special Case No. 23/2018 before the Sessions Court (Protection of Children from Sexual Offences) Greater Mumbai. To establish the guilt of the accused, the prosecution examined eight witnesses. The victim was examined and, when specifically questioned by the learned Judge about the act committed by the accused, she answered that he had put his finger in her private part, causing a lot of blood to come out. She further stated that she went home, narrated the incident to her mother, and was taken for medical examination. The victim testified that the accused resided next to her house but she could not identify him from the photograph affixed on the arrest panchnama., The learned Judge recorded that the witness was of very tender age, gave answers after a long time, sometimes whispered in his ear, and was fiddling with objects on the table while answering. On cross‑examination, the victim answered that she regularly visited the house of Sanya and was given food by the accused's parents. She categorically denied that she had falsely stated the act committed by the accused., Witness 2, the mother of the victim, narrated the events as described by her daughter and admitted that the accused had been residing adjoining their house for about seven years prior to the incident and that the victim was habituated to visiting their house, where the accused's wife took good care of her. She specifically deposed that the bleeding had stopped, there were nail marks on the side of the urinary area, and she applied Betnovate® cream to the injury. In cross‑examination, the mother stated that she had asked her daughter whether she had scratched her private part with her finger, to which the daughter answered in the negative., Witness 3, the doctor who examined the victim, recorded the history given by the mother of fingering in the vagina after removal of the undergarments. She observed a minimal fresh abrasion of 0.5 cm on the left side of the fourchette and opined that the abrasion was due to fingering and could be caused by a fingernail. In cross‑examination, she admitted that there was no active bleeding at the time of examination and expressed the possibility that the injury could have been caused by the victim herself scratching her private part., In light of the evidence presented by Witnesses 1, 2, 5 and 3, together with the statements of Witnesses 8 to 10, the Special Court recorded that the prosecution's case inspired confidence and the evidence proved the accused's guilt, as no other conclusion was possible. The learned Judge noted that the accused had not discharged the burden of proof under Section 29 of the Protection of Children from Sexual Offences Act, as he failed to produce probable evidence to support his claim of a dispute between the families regarding drying clothes in front of his house, as recorded in his statement under Section 313 of the Criminal Procedure Code. The Judge also observed that there was no reason for the complainant to involve her four‑year‑old child to falsely implicate the accused. The testimony of the complainant and the victim was found consistent and supported by medical evidence; the omissions attempted to be introduced did not materially affect the outcome of the trial., Having appreciated the entire evidence, the learned Judge was convinced of the credibility of the witnesses and, finding that the prosecution had proved its case beyond reasonable doubt, recorded a finding of guilt against the accused and convicted him for the offence punishable under Section 376(2) of the Indian Penal Code and Section 6 of the Protection of Children from Sexual Offences Act. He was sentenced to rigorous imprisonment for ten years and a fine of Rs 25,000., The appeal was taken up for final hearing following the order passed by this Court on 27 January 2023, wherein it was recorded that the appellant, who had sought bail pending the appeal, had been incarcerated for more than five years., The learned counsel, Ms. Mallika Sharma, on behalf of Anjali Patil, submitted that the impugned judgment was fallacious as it failed to consider certain important aspects and omitted contradictions in the deposition of Witness 2. The counsel argued that the appellant had been falsely implicated and wrongly convicted, noting that the victim did not identify the accused or his photograph when shown. The counsel further contended that the prosecution had failed to adduce any independent witnesses; although Witness 2 had specifically deposed that her three children were playing together, none of the children were examined by the prosecution, and the statement of Sanya/Sonai (friend of the victim) was not recorded by police. The non‑examination of material witnesses, the counsel submitted, materially affected the trustworthiness of the prosecution case., The Court found no merit in the submission, observing that the victim was well acquainted with the accused, who was the father of Sanya and resided in the neighbourhood, and that the victim had visited the accused’s house regularly. Witness 5, the landlady, corroborated that the complainant’s children used to play at the accused’s house and that he took care of them. It was held that a child of four years could not be expected to focus on a photograph to identify a person, especially under anxiety and distraction. The Judge recorded that the victim was not confident to disclose the incident openly, whispered to the Judge, and was distracted while answering, which is understandable for a child of that age., The counsel also submitted that the doctor’s examination revealed no blood on the victim’s hands or undergarments. Witness 2, however, specifically deposed that when the victim rushed into the house wailing in pain while attempting to urinate, blood was observed coming from the injury. The first person to witness the victim and her mother after the incident was Witness 5, who admitted in cross‑examination that she had seen the injury and the bleeding. The Court noted that it was not necessary for blood to be transferred to the victim’s hands or undergarments, as the victim removed her panties before reaching the toilet, and the blood may not have appeared on them., The counsel raised the question of the place of insertion of the finger. Witness 8, the officer on duty at Chembur Police Station, recorded that the complainant informed that the accused inserted his finger in the victim’s toilet area, whereas Witness 2 narrated that her daughter had pain in the place of urination because Sanya’s father had put his finger there. The victim (Witness 1) deposed that Sanya’s father put his finger in her private part., The doctor, having been given the history of fingering in the vagina after removal of the undergarments, examined the private part and noted an abrasion on the left side of the fourchette. The medico‑legal report opined: ‘There is evidence of physical and sexual violence. Fresh abrasion of 0.5 cm × 1 cm near the fourchette at left side.’, The three‑year‑old girl, not yet aware of her own organs, could not be expected to give an exact description of her private parts, yet in her statement recorded under Section 164 of the Code of Criminal Procedure, she categorically stated that Sanya’s father had touched her at the toilet place with his nails and called him a ‘bad uncle’. She further stated that a finger was put in her private part, resulting in a lot of blood. The Court observed that the girl, being innocent and guileless, did not realise the seriousness of the act, and the doctor testified that she was normal and unaware of the seriousness of the act forced upon her., The medical opinion recorded physical and sexual violence, falling within the purview of Section 6 of the Protection of Children from Sexual Offences Act, which prescribes punishment for aggravated penetrative sexual assault. Accordingly, the accused was sentenced to rigorous imprisonment for ten years and a fine of Rs 25,000., The Court held that there was no reason to disbelieve the victim’s deposition and that the evidence placed on record by the prosecution clearly established the accused’s guilt. Since the prosecution proved its case beyond reasonable doubt, the appellant was found guilty of penetrative sexual assault on a child below twelve years of age and the conviction and sentence were upheld. The appeal was dismissed as being without merit, and the appellant shall undergo the remaining portion of his sentence.
|
id_1668
| 0
|
Serial No. 9 (Appellate Side) WPA (P) 53 of 2021 Date of decision: 11 February 2021 Ramaprasad Sarkar Petitioner versus Union of India and others Respondents Present: Mr. Achintya Kumar Banerjee and Ms. Indumouli Banerjee, Advocates for the petitioner; Mr. Roma Prasad Sarkar, Advocate petitioner in person; Mr. Y.J. Dastoor, Additional Solicitor General; Mr. Phiroze Edulji, Ms. Mrinalini Majumdar and Mr. R.K. Shah, Advocates for the Union of India; Mr. Mahesh Jethmalani, Mr. Dhiraj Trivedi, Senior Advocates with M/s Neelanchan Bhattacharya, Billwadal Bhattacharya, Vikash Singh, Rajdeep Majumdar, Mayukh Mukherjee, K.P. Dalpaty and Rahul Singh, Advocates for intervenor; Mr. Partha Ghosh, Mr. Amal Kumar Dutta, Advocates for the respondents; Mr. Kishore Datta, Advocate General; Mr. Abhratosh Majumdar, Additional General Practitioner; Mr. Sayan Sinha, Advocate for the State., The present petition has been filed by an advocate who is practicing in the Supreme Court of India, claiming the same to be in public interest., When the case was taken up for hearing on 9 February 2021, a request was made by the petitioner, who appeared in person, that a short adjournment be granted to enable him to engage counsel to argue the writ petition., The case was adjourned for today., At the very outset, Mr Y.J. Dastoor, learned Additional Solicitor General of India raised a preliminary objection regarding maintainability of the writ petition in public interest with reference to the locus of the petitioner and the issues raised. He referred to the representation dated 2 February 2021 filed by the petitioner to various authorities raising his grievance. He submitted that although the representation is dated 2 February 2021, nothing is specifically stated in the petition as to when the same was submitted to the authorities concerned. For filing the writ petition in this court, the affidavit was attested by the petitioner on 3 February 2021 and the writ petition was filed in court on the same day. Apparently after submission of the representation dated 2 February 2021 the petitioner did not even afford an opportunity to the authorities concerned to consider the same., He further referred to the representation dated 2 February 2021 filed by the petitioner wherein the petitioner identified himself as an advocate, member of the Calcutta High Court Trinamool Law Cell. His submission is that the writ petition has not been filed in public interest rather it is politically motivated, hence, should not be entertained. The same deserves dismissal with special costs., Mr Mahesh Jethmalani, learned Senior Counsel appearing for interveners pointed out that not only in the representation towards the end of the document the petitioner identified himself as a member of the Calcutta High Court Trinamool Law Cell but also in paragraph 1 of the representation he had stated so. He also submitted that this court cannot be used as a platform by the petitioner for political gain. Hence, the writ petition deserves to be dismissed at the threshold., On the other hand, learned counsel for the petitioner raised an objection regarding the appearance of Mr Dastoor as the Additional Solicitor General of India in the present case., However, Mr Dastoor, learned Additional Solicitor General pointed out that he was served with a copy of the writ petition and that Union of India has been impleaded as respondent No.1 in the writ petition, hence he has a right to appear on its behalf., To this, learned counsel for the petitioner submitted that the name of Union of India may be deleted from the Memo of Parties., Heard learned counsels for the parties and perused the paper book., It was pointed out by Mr Dastoor, learned Additional Solicitor General that a representation dated 2 February 2021 was filed by the petitioner to various authorities, stating that a Rath Yatra being planned by a political party in West Bengal may result in spreading the Covid-19 virus and may also create law and order problems. There is no specific pleading in the writ petition about the mode of service of the representation to the addressees., The writ petition was filed in the Supreme Court of India on 3 February 2021 praying for the following reliefs: (a) Leave to dispense with formalities of clause 26 of the High Court Writ Rules. (b) A writ of mandamus or other orders and/or directions, directing the respondent authorities as follows: i) To act in accordance with law; ii) To direct the respondent authorities not to give any permission under any circumstances whatsoever to hold the proposed Rath Yatra by the Bharatiya Janata Party within West Bengal; iii) Not to allow and permit the Bharatiya Janata Party to organize the five Yatras during the present Covid-19 pandemic situation; iv) To direct the respondents to take all necessary measures to stop the segments of the Yatras within the state of West Bengal if such Rath Yatra is held without the appropriate permission of the appropriate authority; v) To consider the representation made by the petitioner dated 2 February 2021 and not to grant any permission for holding Rath Yatra within the state by Bharatiya Janata Party; vi) alternatively, if permission for holding Rath Yatra is accorded then appropriate Covid-19 protocol must be ensured by the State respondent authorities; (c) A writ in the nature of certiorari commanding the respondents to produce or cause to be produced all records pertaining to the case before the Honourable High Court including the representation submitted by the petitioner so that conscionable justice may be administered in accordance with law; (d) An interim order in terms of the prayers above; (e) Any other or further order or orders and/or directions as the Justice may deem fit and proper., The fact remains that when the writ petition was filed in this court, the representation filed by the petitioner may not have even been received by the addressees, even if sent by the petitioner. Though the prayer made in the writ petition is for issuance of a writ of mandamus., Further, as has been pointed out by Mr Mahesh Jethmalani, learned Senior Counsel and Mr Y.J. Dastoor, learned Additional Solicitor General, the present writ petition is politically motivated. It is evident from paragraph 1 and the identity of the petitioner as disclosed towards the end of the representation filed by him. The same are extracted below: This is to inform you that I, Sri Rama Prasad Sarkar, son of Late Bhabani Prasad Sarkar, residing at Andul-Bus Stand (Howrah) am a practising advocate for the last 26 years, practising at Calcutta High Court and a member also of the High Court Trinamool Law Cell. I am a public‑spirited citizen. So many PIL matters I have filed before the Honourable High Court at Calcutta. Thanking you for your kind cooperation and necessary action. With best regards, Yours faithfully, Rama Prasad Sarkar, Advocate, Calcutta High Court, Member of Calcutta High Court Trinamool Law Cell., On a perusal of the aforesaid facts it is clearly established that the present writ petition has been filed by none else than a practising advocate in this court, who is a member of the Calcutta High Court Trinamool Law Cell, the political party in power at present in the State of West Bengal., Filing of a writ petition by an advocate who is directly connected with a political party in power raising issues against another political party during election time cannot be said to be in larger public interest. It can be said to be a private interest litigation., In any case, it is for the authorities in the State to have considered the issues. Even as per the pleadings in the writ petition, the Rath Yatra was to start from 6 February 2021 and, as stated in the court, has already started. Besides that, a number of political rallies are being held at different places in the State., For the reasons mentioned above, we do not find that the present writ petition can be entertained as a public interest litigation. The same is, accordingly, dismissed., However, there shall be no order as to costs. (Rajesh Bindal, Justice).
|
id_1669
| 0
|
Case: Under Sections 482, 378 and 407, Number 2567 of 2021. Applicant: Noor Alam, also known as Noor Alam Khan. Opposite Party: State of Uttar Pradesh and others. Counsel for Applicant: Bhanu Pratap Singh. Counsel for Opposite Party: G. A. Additional Government Advocate. Honourable Justice Mohd. Faiz Alam Khan, Judge., The learned counsel for the applicant, Shri Bhanu Pratap Singh, and Shri Arpit Kumar, learned counsel appearing for the State, perused the record. The instant application under Section 482 of the Code of Criminal Procedure has been filed by the applicant with the following prayer: “Wherefore, it is most respectfully prayed that the Honourable High Court of Uttar Pradesh may kindly be pleased to quash the impugned notice dated 12 July 2021, passed by the opposite party number 2 i.e. Pargana Magistrate, Sadar, Bahraich in case number 164 of 2021, under Section 111 of the Code of Criminal Procedure (State versus Noor Alam) and its consequential proceedings, contained as Annexure Numbers 1 and 2 to this petition, in the interest of justice.”, The learned counsel for the applicant, while referring to the report of Police Station Risiya placed at page 8 of the paper book and the notice under Section 111 of the Code of Criminal Procedure issued under the signature of the Sub‑Divisional Magistrate, Sadar, Bahraich, submits that the instant proceedings are nothing but a sheer abuse of the process of law. Only on the basis of a single case pertaining to Sections 323, 504 and 506 of the Indian Penal Code, the Magistrate appears to have been satisfied in invoking the provisions of Section 111 of the Code of Criminal Procedure and directed the applicant to show cause as to why he should not be required to furnish sureties of Rs 50,000 and a personal bond to keep the peace for the next three years. It is vehemently submitted that the notice issued by the Sub‑Divisional Magistrate, Sadar, Bahraich is a glaring example of non‑application of mind and therefore there was no material available before the Magistrate that might have persuaded him to issue the process against the applicant; consequently, all the proceedings of the case pending before the Magistrate are nothing but an abuse of process of law., The learned Additional Government Advocate, on the other hand, submits that on the basis of the report submitted by the concerned police station, the Sub‑Divisional Magistrate has issued a notice and simply directed the applicant to appear before the Magistrate for the purpose of filing sureties and a personal bond. Therefore, the applicant could not be deemed to have been adversely affected by the same as it is a matter of law, order and peace., Having heard learned counsel for the parties and having perused the record, the Honourable High Court of Uttar Pradesh is reminded of Madhu Limaye versus Sub‑Divisional Magistrate, Monghyr and others [1970 (3) SCC 746] wherein it was observed that “since the person to be proceeded against has to show cause, it is natural that he must know the grounds for apprehending a breach of the peace or disturbance of public tranquility at his hands. Although the section speaks of the ‘substance’ of the information it does not mean that the order should not be full. It may not repeat the information bodily but it must give proper notice of what has moved the Magistrate to take the action. This order is the foundation of the jurisdiction and the word ‘substance’ means the essence of the most important parts of the information.”, There can be no doubt that summoning a person by any criminal court for either purpose is a very serious matter and personal liberty and reputation are paramount. It is imperative, or in other words a duty, that the Magistrate while acting under Section 111 of the Code of Criminal Procedure be satisfied about the existence of any emergent situation and, if so, further oblige himself to record the reasons for issuance of notice to any accused persons under that section. The admitted facts, as reflected from the documents on record, show that the instant applicant is involved in only one criminal case, evident from the report of the concerned police station, Case Crime Number 111 of 2021, under Sections 323, 504 and 506 of the Indian Penal Code. Perusal of the First Information Report reveals that, apart from the applicant, one more accused person named Iqbal Khan has been named. The dispute alleged in the FIR appears to be purely personal in nature., However, very strong words have been used by the Sub‑Divisional Magistrate, Sadar, Bahraich in the notice placed at page 7 of the paper book, stating that the applicant is a ‘habitual offender’ whose main occupation is theft, rioting, harbouring criminals and committing assault, and that the public at large is living in fear because of him and there is a strong possibility of breach of public peace from him. It is not clear how the Magistrate obtained knowledge that the applicant is a habitual offender indulging in theft, rioting and that the public is living in fear because of him. It is also not clear why a private dispute of criminal nature could disturb public tranquility. In view of the above facts and circumstances, this Court observes that the instant case is an example of sheer non‑application of mind by the Magistrate concerned. At the cost of repetition, it is reiterated that nothing could be more precious to a person than his liberty and reputation., In view of the above, the case is listed on 8 September 2021. The Additional Government Advocate appearing for opposite parties numbers 1 to 3 shall file a detailed counter‑affidavit in the matter. Until the next date of listing, further proceedings of the court below shall remain stayed.
|
id_167
| 0
|
Transfer Petition (Civil) No. 1792/2023 dated 31 July 2023 was called for hearing today. The petition was presented for the petitioner, Mr. Sameer Sodhi, by Advocate Mahesh Kumar, Advocate Amanpreet Singh Rahi, Advocate Nikhilesh Kumar, Advocate Sunit Kumar Toppo, Advocate Devika Khanna, Advocate V D Khanna, and Advocate Vmz Chambers, Advocate on Record., The High Court of Judicature at Allahabad, upon hearing the counsel, made the following observations. This transfer petition, filed under Section 25 of the Code of Civil Procedure, 1908, is at the instance of a defendant in a claim petition lodged before the Motor Accident Claims Tribunal, Farrukhabad at Fatehgarh, Uttar Pradesh, under Section 166 of the Motor Vehicles Act, 1988. Incidentally, the petitioner happens to be the owner of the offending vehicle. He seeks transfer of the claim petition to the Motor Accident Claims Tribunal, Darjeeling in the state of West Bengal., The Court has heard learned counsel for the petitioner and perused the materials available on record. The primary ground on which transfer has been sought is that the accident had taken place at Siliguri in the district of Darjeeling, West Bengal and, therefore, it would be expedient for the Motor Accident Claims Tribunal at Darjeeling to decide the claim petition., The provisions of the Motor Vehicles Act do not make it mandatory for the claimants to lodge an application for compensation under Section 166 thereof before the Motor Accident Claims Tribunal having jurisdiction over the area where the accident occurred. On the contrary, sub‑section (2) of Section 166 provides an option for the claimants to approach the Motor Accident Claims Tribunal within the local limits of whose jurisdiction they (claimants) reside or carry on business or the defendant resides. The claimants having chosen the option to approach the Motor Accident Claims Tribunal, Farrukhabad at Fatehgarh, Uttar Pradesh, a forum that law permits them to choose, no grievance can be raised by the petitioner. The contention is misconceived and, hence, stands overruled., It is next urged that since all the witnesses of the petitioner are from Siliguri, language could be a barrier. The contention has been urged only to be rejected. In a country as diverse as India, it is true that people speak different languages. There are at least twenty‑two official languages. However, Hindi being the national language, it is expected of the witnesses who would be produced by the petitioner before the Motor Accident Claims Tribunal, Fatehgarh, Uttar Pradesh to communicate and convey their version in Hindi. If the contention of the petitioner is to be accepted, it is the claimants who would be seriously prejudiced not being in a position to communicate and convey their version in Bengali., No case having been set up for transfer, this Transfer Petition stands dismissed. Pending applications, if any, shall stand disposed of.
|
id_1673
| 0
|
Reportable Civil Appeal No. 3224 of 2020: Ebix Singapore Private Limited (Appellant) versus Committee of Creditors of Educomp Solutions Limited and others (Respondents). Reportable Civil Appeal No. 3560 of 2020: Kundan Care Products Limited (Appellant) versus Mr Amit Gupta and others (Respondents). Reportable Civil Appeal No. 295 of 2021: Seroco Lighting Industries Private Limited (Appellant) versus Ravi Kapoor, Arya Filaments Private Limited and others (Respondents)., Justice Dhananjaya Y. Chandrachud delivered this judgment, which has been divided into sections for analysis and includes a glossary of defined terms used throughout the judgment., The appeal arises out of a judgment dated 29 July 2020 of the National Company Law Appellate Tribunal. The Tribunal allowed the Withdrawal Appeal instituted by the first respondent, the Committee of Creditors of Educomp, under Section 61 of the Insolvency and Bankruptcy Code, 2016, against a judgment dated 2 January 2020 of the National Company Law Tribunal at its Principal Bench in New Delhi. The National Company Law Tribunal had allowed the Third Withdrawal Application filed by Ebix under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to withdraw its Resolution Plan submitted for Educomp. While reversing that order, the Tribunal held that the application to withdraw from the Resolution Plan could not have been allowed because it was barred by res judicata and the Tribunal does not have jurisdiction to permit such a withdrawal. The correctness of the Tribunal’s view is the subject of the present appeal., On 5 May 2017, Educomp filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016 seeking to initiate a voluntary Corporate Insolvency Resolution Process. The National Company Law Tribunal admitted the petition on 30 May 2017 and appointed an Interim Resolution Professional, making 30 May 2017 the Insolvency Commencement Date for the purposes of Section 5(12) of the Insolvency and Bankruptcy Code, 2016. The Committee of Creditors of Educomp was constituted on 28 June 2017, and it appointed Mr Mahender Kumar Khandelwal as the Resolution Professional for Educomp on 27 July 2017, a appointment confirmed by the National Company Law Tribunal on 12 September 2017. On 18 September 2017, the Resolution Professional took over information, documents, reports and records pertaining to Educomp from the Interim Resolution Professional. On an application of the Resolution Professional, the Tribunal, by its order dated 13 November 2017, extended the period of the Corporate Insolvency Resolution Process by 90 days, beginning on 26 November 2017 and ending on 24 February 2018., In terms of Section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016, the Resolution Professional invited Expression of Interest on 18 October 2017 from prospective bidders, investors and lenders. The last date for submission of Expressions of Interest was extended to 17 November 2017. From 5 December 2017, the Resolution Professional provided access to the Virtual Data Room of Educomp to prospective Resolution Applicants who had submitted a confidentiality undertaking and made an upfront payment of Rs 5,00,000. On 5 December 2017, the final Resolution Plan Framework Request for Proposal was issued, with the last date for submission of Resolution Plans set as 8 January 2018. The deadline was subsequently extended to 20 January 2018 and then to 27 January 2018. By the final deadline, Resolution Plans were received from Ebix and another entity and were shared with the Committee of Creditors on 29 January 2018. Both applicants were invited to present to the Committee of Creditors on 2 February 2018. Ebix was declared the successful Resolution Applicant on 9 February 2018. Ebix discussed its Resolution Plan with the Committee of Creditors and submitted a revised plan on 19 February 2018 with an addendum on 21 February 2018. The Resolution Professional commenced e‑voting on Ebix’s Resolution Plan at 7.00 p.m. on 21 February 2018, keeping the voting lines open until 7.00 p.m. on 22 February 2018. The e‑voting results showed that 74.16 per cent of the Committee members voted to approve the plan, 17.29 per cent voted to reject it, and the remaining members holding 8.55 per cent abstained. Consequently, the Resolution Plan failed to achieve the minimum 75 per cent threshold required under Section 30(4) of the Insolvency and Bankruptcy Code, 2016 as it then stood., On 23 February 2018, a member of the Committee of Creditors, Chhattisgarh State Electricity Board (CSEB), informed the Resolution Professional by email that a technical error had prevented its participation in the e‑voting. CSEB held a voting share of 1.195 per cent and sought its affirmative vote to be recorded, which would have raised the approval percentage to 75.35 per cent, thereby meeting the statutory threshold. The Resolution Professional filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking directions from the National Company Law Tribunal regarding CSEB’s late vote. The Tribunal, by its order dated 28 February 2018, directed the Resolution Professional to file an application for approval of Ebix’s Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, stating that the issue of CSEB’s vote would be considered together with that application. Accordingly, on 7 March 2018, the Resolution Professional filed the Approval Application seeking the Tribunal’s approval of Ebix’s Resolution Plan under Section 30(6)., On 2 July 2018, Ebix wrote to the Resolution Professional requesting the expeditious completion of the Corporate Insolvency Resolution Process for Educomp. The letter stated that the resolution plan had been submitted with the expectation that the process would be completed in a time‑bound manner so that the Resolution Applicant could assume management control before the start of the new academic session in April 2018, subject to selection as the successful applicant and approval of the plan by the Tribunal. The letter highlighted that the company’s operations were already under stress, that no new contracts or customers were forthcoming, and that competitors might exploit the situation, further eroding the business value. It further noted that the terms of the resolution plan, dated 19 February 2018, were valid for six months, i.e., until 19 August 2018, and that any delay in completing the resolution process would negatively impact the commercial consideration offered by the Resolution Applicant, potentially forcing a reconsideration or withdrawal of the plan., On 3 April 2018, the online news portal The Wire published an article titled ‘How Educomp May Have Subverted the Spirit of India’s Insolvency and Bankruptcy Process’. A second article, ‘Educomp’s Insolvency Process Becomes Murkier as Ebix Buys Smartclass Educational Services’, was published on 26 April 2018. Based on these reports, the International Finance Corporation, a financial creditor of Educomp, filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking investigation of Educomp’s affairs and transactions. When the application was listed before the National Company Law Tribunal on 4 May 2018, the Tribunal directed the Resolution Professional to file a reply and also directed the International Finance Corporation to serve a notice on Ebix. Similar applications were filed by Axis Bank and State Bank of India, also financial creditors of Educomp, under Section 60(5) read with Section 213 of the Companies Act, 2013, seeking appropriate directions in view of alleged irregularities. On 1 August 2018, the Ministry of Corporate Affairs directed a Serious Frauds Investigation Office investigation into Educomp’s affairs for the period 2014‑2018. The Tribunal, by its order dated 9 August 2018, dismissed the applications filed by the International Finance Corporation, Axis Bank and State Bank of India and directed the Resolution Professional to convene a meeting of the Committee of Creditors within three days to discuss the applications, and allowed the Committee to move an application before the Tribunal if advised., Following the Tribunal’s order, the Committee of Creditors held its thirteenth meeting on 13 August 2018 and passed a resolution with a 77.85 per cent vote to appoint an independent agency to conduct a Special Investigation Audit of Educomp’s affairs for the period 1 January 2014 to 30 January 2018. The scope of the audit included matters raised in the 2016‑17 Annual Audit Report, alleged transfers between Educomp and SmartClass Educational Services Private Limited prior to insolvency, verification of receivables from Edusmart Services Private Limited, settlements involving Educomp Learning Hour Private Limited, Vidya Mandir Classes Limited and ICICI Bank, impairment of investments in subsidiaries, advances received from Educomp Raffles Higher Education Limited, a distribution agreement with Digital Learning Solution, and all issues raised in the applications filed by the International Finance Corporation, Axis Bank and State Bank of India. The resolution also authorized the Resolution Professional to file an application with the National Company Law Tribunal seeking consent for the audit, to direct the relevant group companies and former customers to cooperate, and to include the cost of the audit in the Corporate Insolvency Resolution Process costs. The resolution was placed before the Tribunal on 20 August 2018, and the Tribunal directed the Resolution Professional to file an appropriate application. Accordingly, the Resolution Professional filed an Investigation Audit Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking directions to carry out the Special Investigation Audit., The Investigation Audit Application was heard on 11 September, 20 September, 27 September and 4 October 2018. On 4 October 2018, while reserving its order, the Tribunal directed the Resolution Professional to file an affidavit regarding transactions undertaken by Educomp under Sections 43, 45, 50 and 66 of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional filed the affidavit, stating that a review of the books of account and other relevant material revealed no transactions that needed to be avoided under the cited sections, and that, since the Tribunal had not issued specific directions for a Special Investigation Audit, no such audit had been conducted. The affidavit was listed before the Tribunal on 7 December 2018 along with the Approval Application. On 10 January 2019, the Tribunal reserved its orders on the Approval Application., On 12 June 2019, Educomp made a regulatory disclosure to the Bombay Stock Exchange and the National Stock Exchange concerning ongoing investigations by agencies such as the Serious Frauds Investigation Office and the Central Bureau of Investigation. The disclosure noted that BDO India LLP had conducted a transaction audit in February 2018 to determine whether any preferential, undervalued, extortionate or fraudulent transactions falling within the ambit of Sections 43, 45, 50 and 66 of the Insolvency and Bankruptcy Code, 2016 had occurred. The audit report, reviewed by the Committee of Creditors, found no such transactions. The disclosure also stated that the two land transactions alleged in the media reports were not mentioned in the BDO report, and that the Resolution Professional had supplied data to the Serious Frauds Investigation Office but had not received any notice of findings, describing the media reports as based on false and fabricated data., On 5 July 2019, Ebix filed the First Withdrawal Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking (i) a copy of the Special Investigation Audit, (ii) certificates under Sections 43, 45, 50 and 66, (iii) withholding approval of the Resolution Plan sanctioned by the Committee of Creditors on 11 April 2018 pending detailed consideration, and (iv) sufficient time for the Resolution Applicant to reevaluate, revise, modify or withdraw its Resolution Plan. Ebix argued that the Approval Application had been pending before the Tribunal for 17 months, that Educomp’s Corporate Insolvency Resolution Process had been pending for 26 months beyond the statutory period, that the expiry of government contracts could erode the company’s substrate, and that recent media reports raised doubts about the management and affairs of Educomp., The National Company Law Tribunal dismissed the First Withdrawal Application on 10 July 2019, holding that no ground was made out for the reliefs sought and ordering the application dismissed., Ebix subsequently filed the Second Withdrawal Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking (i) permission to withdraw the Resolution Plan dated 19 February 2018 along with its addendum dated 21 February 2019, (ii) a refund of the Earnest Money Deposit of Rs 2,00,00,000 paid by the Resolution Applicant, and (iii) withholding approval of the Resolution Plan sanctioned by the Committee of Creditors on 7 March 2018 pending detailed consideration. The application reiterated the reasons given in the First Withdrawal Application and added that the Tribunal had previously directed the applicant to withdraw the plan by way of a separate application., The Tribunal dismissed the Second Withdrawal Application on 5 September 2019, observing that the prayer for withdrawal had been suggested by the Court without any record of such suggestion, and that the cause of action could not be based on such an imputed statement. The Tribunal granted liberty to the applicant to file a fresh application on the same cause of action., Ebix then filed the Third Withdrawal Application seeking the same reliefs as before. The Tribunal issued notice on 18 September 2019 and directed the Resolution Professional to place the application before the Committee of Creditors at its fourteenth meeting on 26 September 2019, where the Committee resolved not to allow the withdrawal. However, by its order dated 2 January 2020, the National Company Law Tribunal allowed the Third Withdrawal Application, holding that the issue of withdrawal had not been adjudicated on merit in the earlier proceedings and therefore was not barred by res judicata. The Tribunal observed that the doctrine of constructive res judicata does not apply to issues that have not been expressly decided, and that the withdrawal prayer had not been considered in the earlier applications.
|
id_1673
| 1
|
While dealing with the said Application, liberty was given to the Applicant vide order dated 01.09.2019 to re‑file an application for withdrawal of the Resolution Plan. This direction further confirms that there was no conscious adjudication in CA No.1252(PB)/2019 on the issue of withdrawal of the resolution plan by the Applicant. The National Company Law Tribunal held that: a Resolution Plan becomes binding after it is approved by it as the Adjudicating Authority; under Section 30(2) of the Insolvency and Bankruptcy Code, the Adjudicating Authority has the power to examine whether the Resolution Plan can be effectively enforced and implemented; and in the present circumstances, an unwilling successful Resolution Applicant would be unable to effectively implement the Resolution Plan. The relevant parts of the order are extracted below:, In the instant case the Resolution Plan is still pending before the Adjudicating Authority for approval. Under the provisions of Section 31 of the Code, a Resolution Plan becomes binding only after acceptance of a plan by the Adjudicating Authority. Section 30(2)(d) of the Code mandates the Adjudicating Authority to ensure that there are effective means of enforcement and implementation of the Resolution Plan. Similarly, the proviso to sub‑section (1) of Section 31 of the Code mandates the Adjudicating Authority to ensure effective implementation of the resolution plan. The object in approval of the resolution plan is to save the corporate debt and to put it back on its feet. An unwilling and reluctant resolution applicant, who has withdrawn his resolution plan, neither can put the corporate debtor back to its feet nor can the effective implementation of its resolution plan be ensured., No doubt the withdrawal of the resolution plan at this advanced stage has caused great prejudice to the creditors and stakeholders and legal consequences on the withdrawal of the resolution plan shall follow as per law. The Resolution Professional and Committee of Creditors are free to take action as per law consequent upon withdrawal of the resolution plan by the resolution applicant including on the issue of refund of the Earnest Money Deposit deposited by the applicant. Compelling an unwilling and reluctant resolution applicant to implement the plan may lead to uncertainty. The object of the Code is to ensure that the Corporate Debtor keeps working as a going concern and to safeguard the interest of all the stakeholders. The provisions of the Code mandate the Adjudicating Authority to ensure that the successful resolution applicant starts running the business of the Corporate Debtor afresh. Besides, the National Company Law Tribunal ought not restrict a litigant's fundamental right to carry on business in its way under Article 19(1)(g) of the Constitution. Once the applicant is unwilling and reluctant and itself has chosen to withdraw its resolution plan, a doubt arises as to whether the resolution applicant has the capability to implement the said plan. Uncertainty in the implementation of the resolution plan cannot also be ruled out., The National Company Law Tribunal also directed that Educomp's Corporate Insolvency Resolution Process be extended by a period of 90 days, commencing from 16 November 2019. As a consequence of its order allowing the Third Withdrawal Application, the National Company Law Tribunal also dismissed the Approval Application on 3 January 2020 as being infructuous. E‑CoC filed the Withdrawal Appeal assailing the National Company Law Tribunal's order dated 2 January 2020. On 3 February 2020, the National Company Law Appellate Tribunal stayed the order dated 2 January 2020. The Approval Appeal was also filed by the E‑CoC under Section 61 of the Insolvency and Bankruptcy Code, assailing the National Company Law Tribunal's order dated 3 January 2020., By its order dated 29 July 2020, the National Company Law Appellate Tribunal set aside the order of the National Company Law Tribunal allowing the withdrawal of the resolution plan. On the issue of res judicata, the National Company Law Appellate Tribunal held that there being no appeal against the order of the Adjudicating Authority rejecting the First Withdrawal Application, the issue had attained finality. In view of the dismissal of CA 1252(PB)/2019 by the Adjudicating Authority and the said order which had attained finality and in the absence of any appeal being filed against the said order, the dismissal order of CA 1252 of 2019 dated 10.7.2019 binds the first respondent / Resolution Applicant as an inter‑se party. The Adjudicating Authority in the particular circumstances of the present case has no power to grant liberty to bring a fresh application and hence, the subsequent application filed by the first respondent / Resolution Applicant is barred by the principle of res judicata notwithstanding the liberty to file a fresh one., On the merits of the application for withdrawal, the National Company Law Appellate Tribunal held that: once the Resolution Plan was approved by the Committee of Creditors, the National Company Law Tribunal did not have jurisdiction to permit its withdrawal; the Adjudicating Authority could not enter upon the wisdom of the decision of the Committee of Creditors to approve the Resolution Plan; the Resolution Applicant had accepted the conditions of the Resolution Plan and no change could be permitted; orders had already been reserved in the Approval Application; no Special Investigation Audit had been conducted; Section 32A of the Insolvency and Bankruptcy Code grants full immunity to the Resolution Applicant from any offences committed before the commencement of the Corporate Insolvency Resolution Process; and Ebix had participated in the process from August 2018 to January 2019 when orders had been reserved on the Approval Application, and hence it could not claim any right based on delay., Present status of Serious Fraud Investigation Office and Central Bureau of Investigation investigation. In an email dated 17 February 2020, the E‑Resolution Professional informed the E‑CoC that the Central Bureau of Investigation conducted a search of the premises of Educomp on 11 February 2020 and seized numerous documents (a list was enclosed with the email). By another email dated 19 February 2020, the E‑Resolution Professional informed the E‑CoC that the Central Bureau of Investigation had resumed its search for documents at Educomp's office., In the 16th meeting of the E‑CoC on 30 March 2020, the E‑Resolution Professional provided the following updates in relation to the Central Bureau of Investigation and Serious Fraud Investigation Office investigations: the Central Bureau of Investigation search at the premises of Educomp on 11 February 2020 was conducted upon a complaint by State Bank of India on behalf of a consortium of banks; since the initiation of an enquiry by the Ministry of Corporate Affairs on 1 August 2018, the Serious Fraud Investigation Office has requisitioned documents and information, which have been provided; the last communication from the Serious Fraud Investigation Office was received on 27 February 2020; and in response to the grievance of some members of the E‑CoC that the E‑Resolution Professional had only informed them of the investigations belatedly, the Chairperson justified it by stating that the communication could only take place once the relevant investigation was completed. For future reference, the Chairperson noted the suggestion that the E‑Resolution Professional would add all members of the E‑CoC to a WhatsApp group, where real‑time updates could be shared. At the meeting, the E‑CoC also passed a resolution with 77.05 per cent majority vote directing the E‑Resolution Professional to invoke and forfeit the Earnest Money Deposit of Rs 2 crores furnished by Ebix in accordance with Clause 1.9.1 of the Request for Resolution Plan. The E‑Resolution Professional issued a letter to IDBI on 1 April 2020 for encashment of the Earnest Money Deposit., In the 17th meeting of the E‑CoC on 8 May 2020, the E‑Resolution Professional provided further updates in relation to the Central Bureau of Investigation and Serious Fraud Investigation Office investigations, noting that they were still ongoing and no further action was required to be taken. The E‑Resolution Professional has informed this Court that the last communication received from the Serious Fraud Investigation Office was on 4 September 2020. The investigations by the Central Bureau of Investigation and Serious Fraud Investigation Office are continuing., Civil Appeal No. 3560 of 2020 – Kundan Care Appeal. This appeal arises under Section 62 of the Insolvency and Bankruptcy Code from a judgment dated 30 September 2020 of the National Company Law Appellate Tribunal. The National Company Law Appellate Tribunal dismissed an appeal instituted by the appellant Kundan Care under Section 61 of the Insolvency and Bankruptcy Code against an order dated 3 July 2020 of the National Company Law Tribunal. The National Company Law Tribunal had dismissed an application filed by Kundan Care under Section 60(5) of the Insolvency and Bankruptcy Code to withdraw its Resolution Plan submitted for the fourth respondent Corporate Debtor, Astonfield. In appeal, the National Company Law Appellate Tribunal upheld the National Company Law Tribunal's decision, relying on its judgment impugned in the Ebix Appeal. It held that an application filed by a Resolution Applicant to withdraw from the Resolution Plan approved by the Committee of Creditors could not be allowed since: there was no provision in the Insolvency and Bankruptcy Code for it; the Resolution Plan is enforceable as a contract against the Resolution Applicant; and the Resolution Applicant was estopped from withdrawing., The correctness of this view of the National Company Law Appellate Tribunal now comes up for determination in the present appeal. While issuing notice on 16 November 2020, the Supreme Court of India had directed an ad‑interim stay on the judgment of the National Company Law Appellate Tribunal, which continues till date., Initiation of Corporate Insolvency Resolution Process. On 20 November 2018, Astonfield filed a petition under Section 10 of the Insolvency and Bankruptcy Code seeking to initiate voluntary Corporate Insolvency Resolution Process. The National Company Law Tribunal admitted this petition on 27 November 2018 and appointed an Interim Resolution Professional. A Committee of Creditors was then constituted, which consisted of the second and third respondents, EXIM Bank and PFCL. The Committee of Creditors appointed the first respondent, Mr Amit Gupta, as the Resolution Professional and his appointment was confirmed by the National Company Law Tribunal on 1 February 2019., Invitation, submission and approval of Resolution Plan. On 20 February 2019, the Adjudicating Resolution Professional invited prospective resolution applicants to submit their Expressions of Interest in accordance with Regulation 36 of the CIRP Regulations and Form G was also published. Form G was amended by the Adjudicating Resolution Professional, with due approval from the Adjudicating Committee of Creditors, on 2 May 2019 and 17 May 2019. The Adjudicating Resolution Professional received nine Expressions of Interest, out of which seven were found to be eligible. However, Kundan Care did not submit its Expression of Interest within the time prescribed by the Adjudicating Resolution Professional, and its belated submission was rejected. Thereafter, the Adjudicating Resolution Professional issued the Request for Resolution Plan on 6 March 2019 to the prospective Resolution Applicants who had been selected. Further, the Information Memorandum was issued on 13 March 2019. Based on this, two Resolution Plans were received by the Adjudicating Resolution Professional on 31 May 2019, which were then discussed with the Adjudicating Committee of Creditors., In the interim, Kundan Care filed an application before the National Company Law Tribunal challenging the Adjudicating Resolution Professional's rejection of its belated Expression of Interest. The Adjudicating Resolution Professional received the notice of this application on 30 August 2019. By order dated 6 September 2019, the National Company Law Tribunal allowed Kundan Care's application. Thereafter, it was provided access to the Request for Resolution Plan, Information Memorandum and other documents pertaining to Astonfield in the data room. Kundan Care submitted its Resolution Plan for consideration on 16 September 2019. The Resolution Plan was placed before the Adjudicating Committee of Creditors, which requested Kundan Care to submit a revised proposal. Kundan Care then submitted an updated draft of its Resolution Plan on 29 October 2019., The Adjudicating Resolution Professional then conducted the 17th meeting of the Adjudicating Committee of Creditors on 11 November 2019, to discuss the Resolution Plans submitted by Kundan Care and one more prospective Resolution Applicant (who had also submitted a revised Resolution Plan after negotiations with the Adjudicating Committee of Creditors). Thereafter, Kundan Care submitted a revised version of its Resolution Plan on 12 November 2019, along with an addendum on 13 November 2019. The Adjudicating Committee of Creditors voted on the Resolution Plans on 14 November 2019, where the Resolution Plan submitted by Kundan Care was approved with a majority of 99.28 per cent, with 0.72 per cent abstaining. On 15 November 2019, the Adjudicating Resolution Professional issued a Letter of Award to Kundan Care. Kundan Care also deposited a Performance Bank Guarantee of Rs 5 crores with the Adjudicating Resolution Professional/Adjudicating Committee of Creditors., The Adjudicating Resolution Professional then filed an application for approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code before the National Company Law Tribunal, along with Form H, as mandated under the CIRP Regulations. This application is currently pending adjudication., Astonfield's dispute with Gujarat Urja Vikas Nigam Limited (GUVNL). The Power Purchase Agreement was signed on 30 April 2010, came into force in December 2012 and was valid for a period of 25 years. Crucially, this Power Purchase Agreement was the only agreement entered into by Astonfield and formed the entirety of its business. When the CIRP was initiated against Astonfield, GUVNL issued a notice of default under Article 9.2.1(e) of the Power Purchase Agreement, stating that the initiation of insolvency was an event of default. This was challenged before the National Company Law Tribunal by the Adjudicating Resolution Professional and EXIM Bank through applications under Section 60(5) of the Insolvency and Bankruptcy Code. Kundan Care was aware of this dispute and made specific references to it in its Resolution Plan. Under the heading of PPA Risk, it noted that GUVNL had served notices to terminate the Agreement since the Company was undergoing the insolvency process. However, as per the order of the National Company Law Tribunal dated 29 August 2019 (CA 700/ND/2019 & CA 701/ND/2019) it was concluded that the Power Purchase Agreement is an “instrument” for the applicability of Section 23 of the Insolvency and Bankruptcy Code, and that the provisions of the Code shall have an overriding effect over the Power Purchase Agreement. The National Company Law Appellate Tribunal, vide order dated 15 October 2019, clearly stated that even in the event of liquidation of the Corporate Debtor, GUVNL cannot terminate the Power Purchase Agreement under the Code. The Liquidator shall ensure that the Corporate Debtor remains a going concern. It is therefore evident that the Power Purchase Agreement cannot be terminated and has to continue even after the Resolution Plan has been approved., On 29 August 2019, the National Company Law Tribunal allowed the applications and set aside the notice of default issued by GUVNL. It held that allowing the termination of the Power Purchase Agreement would adversely affect the going concern status of Astonfield. However, it held that if Astonfield were to undergo liquidation subsequently, the termination would be permitted. The National Company Law Tribunal's judgment was challenged by GUVNL in an appeal before the National Company Law Appellate Tribunal. By judgment dated 15 October 2019, the National Company Law Appellate Tribunal dismissed the appeal and partly upheld the decision of the National Company Law Tribunal, disallowing the termination of the Power Purchase Agreement during the CIRP. However, it reversed the Tribunal's findings and held that even if Astonfield were to undergo liquidation, the termination of the Power Purchase Agreement would not be allowed., GUVNL challenged the National Company Law Appellate Tribunal's judgment in the GUVNL Appeal before the Supreme Court of India. When the present appeal was filed by Kundan Care, the GUVNL Appeal was pending before this Court. It was disposed by a judgment dated 8 March 2021, in the following terms: “Given that the terms used in Section 60(5)(c) are of wide import, as recognized in a consistent line of authority, we hold that the National Company Law Tribunal was empowered to restrain the appellant from terminating the Power Purchase Agreement. However, our decision is premised upon a recognition of the centrality of the Power Purchase Agreement in the present case to the success of the CIRP, in the factual matrix of this case, since it is the sole contract for the sale of electricity which was entered into by the Corporate Debtor. In doing so, we reiterate that the National Company Law Tribunal would have been empowered to set aside the termination of the Power Purchase Agreement in this case because the termination took place solely on the ground of insolvency. The jurisdiction of the National Company Law Tribunal under Section 60(5)(c) of the Insolvency and Bankruptcy Code cannot be invoked in matters where a termination may take place on grounds unrelated to the insolvency of the corporate debtor. Moreover, it cannot be invoked in the event of a legitimate termination of a contract based on an ipso facto clause like Article 9.2.1(e) herein, if such termination will not have the effect of causing the death of the corporate debtor. As such, in all future cases, the National Company Law Tribunal would have to be wary of setting aside valid contractual terminations which would merely dilute the value of the corporate debtor, and not push it to its corporate death by virtue of it being the corporate debtor’s sole contract. Hence, this Court held that GUVNL would not be allowed to terminate its Power Purchase Agreement with Astonfield since: the termination was solely on account of Astonfield entering into insolvency proceedings; and being its sole contract, the Power Purchase Agreement’s termination would necessarily result in the corporate death of Astonfield, which would derail the entire CIRP.”, Withdrawal of the Resolution Plan. On 17 December 2019, Kundan Care filed an application under Section 60(5) of the Insolvency and Bankruptcy Code seeking permission of the National Company Law Tribunal to withdraw its Resolution Plan, which had been previously approved by the Adjudicating Committee of Creditors and was pending confirmation by the National Company Law Tribunal under Section 31 of the Insolvency and Bankruptcy Code. In its application, it prayed for the following reliefs: (a) allow the present application and permit the applicant to withdraw its Resolution Plan as submitted and approved by the Committee of Creditors on 14 November 2019; (b) direct that the Performance Bank Guarantee submitted by the applicant be cancelled, revoked and returned to the applicant. Kundan Care stated that there was no bar under the Insolvency and Bankruptcy Code on it withdrawing its Resolution Plan before it was confirmed by the National Company Law Tribunal. It sought to withdraw its Resolution Plan on account of four reasons: uncertainty in relation to the Power Purchase Agreement with GUVNL, since the GUVNL Appeal was pending before this Court; heavy floods in the State of Gujarat during 2019 that damaged the solar panels and other equipment at the project site; repudiation by the insurer of Astonfield’s insurance claim of Rs 46.40 crores in relation to floods in 2017, which may also adversely affect the claim for the floods in 2019; and that the Information Memorandum indicated that Astonfield was entitled to a sum of Rs 6.614 crores from GUVNL as a trade receivable, but a previous judgment of this Court held that the project developer shall not be entitled to a higher or revised tariff in case of not availing accelerated depreciation., On 6 January 2020, Kundan Care filed an additional affidavit outlining the additional costs it would face on account of: deterioration of the solar panels due to GUVNL unilaterally not permitting their replacement, leading to an additional cost of Rs 30 crores against an initially expected cost of Rs 9 crores; Astonfield’s plant not producing electricity at its optimum level, leading to a loss of revenue up to Rs 150 lakhs per month; and CIRP costs on account of delay in the CIRP, leading to a loss of Rs 12 lakhs per month (approx.). It noted that after submission of the Resolution Plan, the applicant’s representatives visited the site again and found that almost all the solar panels installed at the project site required replacement at a total cost of over INR 30 crores instead of INR 9 crores ascertained earlier. The plant is capable of generating 18,133,200 kWh per annum (11.5 MW × 365 × 24 × 1000 × 18 % CUF), which would translate to generation revenue of roughly INR 1,800 lakhs per annum or INR 150 lakhs per month. In addition to the aforesaid generation loss, a sum of INR 12 lakhs (approx.) is being incurred towards monthly CIRP cost on account of the delay in the CIR process., Thereafter, Kundan Care also filed an application for impleadment in the GUVNL Appeal pending before the Supreme Court of India, along with an application for directions praying, in exercise of this Court’s jurisdiction under Article 142 of the Constitution of India, for the following reliefs: (a) set aside the notice dated 28 March 2019 issued by Gujarat Urja Vikas Nigam Limited to Astonfield Solar (Gujarat) Private Limited and declare that the applicant/corporate debtor shall be free to change or replace the solar panels/modules and other equipment of the project as may be deemed fit; (b) declare that the Power Purchase Agreement dated 30 April 2010 executed between Gujarat Urja Vikas Nigam Limited and Astonfield Solar (Gujarat) Private Limited shall stand extended by the period of moratorium declared under the Insolvency and Bankruptcy Code during the CIR process; and (c) in alternative to prayers (a) and (b), permit the applicant to withdraw its Resolution Plan dated 12 November 2019 and direct that the Performance Bank Guarantee submitted by the applicant to the Committee of Creditors be cancelled, revoked and returned., While the GUVNL appeal and its application remained pending, on 14 May 2020, Kundan Care requested the National Company Law Tribunal to take up its application for an early hearing. Following this, the application was listed on 15 June 2020. On 12 June 2020, the Adjudicating Resolution Professional filed its reply to Kundan Care’s application and additional affidavit, where it opposed the withdrawal of the Resolution Plan after its approval by the Adjudicating Committee of Creditors and stated that: Kundan Care was aware of the ongoing dispute with GUVNL when it submitted the Resolution Plan; the Adjudicating Resolution Professional had informed Kundan Care about the floods in 2019 and an Operation and Management Agency had been hired to clear the water at the project site, which had been done; the repudiation of the insurance claim was never guaranteed to be successful and the Adjudicating Resolution Professional was actively pursuing the challenge to its repudiation; accelerated depreciation had been listed as a doubtful debt by the Adjudicating Resolution Professional in the Information Memorandum and Kundan Care would have done its own due diligence; and the Information Memorandum noted that the floods in 2017 had affected the plant and it may not be able to operate at full capacity., Kundan Care filed its rejoinder to the Adjudicating Resolution Professional’s reply on 29 June 2020, arguing that the Resolution Plan proposed by them and approved by the Adjudicating Committee of Creditors was no longer feasible and viable commercially, in accordance with Section 30(2)(d) read with the proviso to Section 31(1) of the Insolvency and Bankruptcy Code, due to the intervening circumstances before its confirmation by the National Company Law Tribunal which had materially altered the financial projections. Hence, the National Company Law Tribunal should allow it to withdraw the Resolution Plan. In the alternative, Kundan Care proposed renegotiation of the Resolution Plan, praying that the applicant may be permitted to renegotiate the financial proposal with the Committee of Creditors., The Adjudicating Committee of Creditors also filed its reply to Kundan Care’s application on 30 June 2020, stating that the National Company Law Tribunal could not adjudicate upon the application since Kundan Care had filed another application before this Court in the GUVNL Appeal; and in any case, Kundan Care knew of the risks while entering the CIRP and should not be allowed to withdraw at such a belated stage. The National Company Law Tribunal passed an order dated 3 July 2020, by which it rejected Kundan Care’s application noting that it did not have jurisdiction to permit withdrawal and that the matter was also sub‑judice before the Supreme Court of India by virtue of Kundan Care’s application in the GUVNL Appeal. The order stated: “Counsels for the Resolution Applicant, Committee of Creditors and IRP are present. The Resolution Applicant has prayed to withdraw the resolution plan which was submitted before this Tribunal after approval of the Committee of Creditors. After careful consideration of the matter, we are of the view that the National Company Law Tribunal has no jurisdiction to permit withdrawal of the resolution plan which has been placed before the authority with due approval of the Committee of Creditors. Notwithstanding this fact, it has been pointed out by the counsel for the Committee of Creditors that another matter is sub‑judiced before the Hon’ble Supreme Court in which inter‑alia a similar request has been made. This has been submitted by the counsel for the Committee of Creditors on page 31 of the reply filed by the Committee of Creditors in response to the application. Keeping this in view, it will not be appropriate for this Tribunal to deal with an issue which is already sub‑judiced before the Hon’ble Supreme Court. The application is hereby rejected.”, In view of the National Company Law Tribunal’s order, Kundan Care made an oral request for withdrawal of its application to the Supreme Court of India when the GUVNL Appeal was listed on 20 July 2020. This request was allowed by the Supreme Court of India. Thereafter, the appellant filed an appeal before the National Company Law Appellate Tribunal, challenging the order dated 3 July 2020 passed by the National Company Law Tribunal. The National Company Law Appellate Tribunal did not issue notice in the appeal, but heard the submissions of all parties at the stage of admission and directed them to file their written submissions. By the impugned judgment dated 30 September 2020, the National Company Law Appellate Tribunal dismissed the appeal by Kundan Care, relying on the judgment impugned in the Ebix Appeal. It noted that the CIRP process involves filing of Expressions of Interest by prospective Resolution Applicants which may ultimately manifest in the form of prospective Resolution Plan after negotiations regarding financial matrix, capacity of the Resolution Applicant to generate funds, infusion of funds, upfront payment, distribution mechanism and the period over which the claims of various stakeholders are to be satisfied besides the feasibility and viability of the Resolution Plan. Although a Resolution Plan approved by the Committee of Creditors has the effect of eliminating other bidders, such approved Resolution Plan would be binding on the Corporate Debtor and all stakeholders only after the Adjudicating Authority passes an order under Section 31 of the Insolvency and Bankruptcy Code approving the Resolution Plan submitted by the Resolution Professional with the approval of the Committee of Creditors in terms of the provisions of Section 30(6) of the Code. It does not follow that the successful Resolution Applicant would be at liberty to withdraw the Resolution Plan duly approved by the Committee of Creditors and laid before the Adjudicating Authority for approval, thereby sabotaging the entire Corporate Insolvency Resolution Process, which is designed to achieve an object. A Resolution Applicant whose Resolution Plan stands approved by the Committee of Creditors cannot be permitted to alter his position to the detriment of various stakeholders after pushing out all potential rivals during the bidding process. This is fraught with disastrous consequences for the Corporate Debtor which may be pushed into liquidation as the CIRP period may be over thereby setting at naught all possibilities of insolvency resolution and protection of a Corporate Debtor, more so when it is a going concern.
|
id_1673
| 2
|
That apart, there is no express provision in the Insolvency and Bankruptcy Code allowing a Successful Resolution Applicant to stage a U‑turn and frustrate the entire exercise of Corporate Insolvency Resolution Process. The argument advanced on behalf of the Appellant that there is no provision in the Insolvency and Bankruptcy Code compelling specific performance of the Resolution Plan by the Successful Resolution Applicant has to be repelled on four major grounds: There is no provision in the Insolvency and Bankruptcy Code entitling the Successful Resolution Applicant to seek withdrawal after its Resolution Plan stands approved by the Committee of Creditors with requisite majority; the successful Resolution Plan incorporates contractual terms binding the Resolution Applicant but it is not a contract of personal service which may be legally unenforceable; the Resolution Applicant in such case is estopped from wriggling out of the liabilities incurred under the approved Resolution Plan and the principle of estoppel by conduct would apply to it; the value of the assets of the Corporate Debtor is bound to have depleted because of passage of time consumed in Corporate Insolvency Resolution Process and, in the event of the Successful Resolution Applicant being permitted to walk out with impunity, the Corporate Debtor's depleting value would leave all stakeholders in a state of devastation., The National Company Law Appellate Tribunal held that withdrawal of a Resolution Plan by the Resolution Applicant after its approval by the Committee of Creditors cannot be permitted since it contravenes the principles of the Insolvency and Bankruptcy Code, which require the Corporate Insolvency Resolution Process to be conducted in a time‑bound manner in order to maximise the value of the assets of the Corporate Debtor; permitting Kundan Care to withdraw would sabotage the Corporate Insolvency Resolution Process, where the Adjudicating Committee of Creditors had previously rejected other prospective Resolution Applicants in favour of Kundan Care; there is no specific provision in the Insolvency and Bankruptcy Code for allowing withdrawal; the Resolution Plan incorporated contractual terms binding the Resolution Applicant and it is not akin to a contract of personal service which is legally unenforceable; by virtue of the principle of estoppel by conduct, Kundan Care is estopped from withdrawing; and the withdrawal may lead to Astonfield's liquidation, and the value of its assets was bound to have depleted in the interim., This is an appeal under Section 62 of the Insolvency and Bankruptcy Code from an order dated 10 December 2020 of the National Company Law Appellate Tribunal. By its judgment, the National Company Law Appellate Tribunal dismissed an appeal instituted by Seroco under Section 61 of the Insolvency and Bankruptcy Code against an order dated 23 October 2020 of the National Company Law Tribunal. The National Company Law Tribunal dismissed an application by Seroco under Section 60(5) seeking permission to modify its Resolution Plan submitted for the corporate debtor Arya Filaments. The Tribunal relied on the impugned judgment in the Kundan Care Appeal. Further, it noted that while the application prayed for a modification of the Resolution Plan, its title was \Application for withdrawal under Section 60(5) of the Insolvency and Bankruptcy Code, 2016\., In appeal, the National Company Law Appellate Tribunal partly upheld the National Company Law Tribunal's decision and held that Seroco could not be allowed to modify or withdraw the Resolution Plan approved by the Arya Committee of Creditors since it was the sole Resolution Applicant in the Corporate Insolvency Resolution Process, Arya Filaments was an MSME, and Seroco was aware of Arya Filaments' financial condition when it submitted the Resolution Plan. However, it set aside the National Company Law Tribunal's decision in relation to the costs imposed on Seroco., The second respondent, Kotak, being a financial creditor of Arya Filaments, filed a petition under Section 7 of the Insolvency and Bankruptcy Code seeking to initiate the Corporate Insolvency Resolution Process. By an order dated 17 August 2018, the National Company Law Tribunal initiated the Corporate Insolvency Resolution Process against Arya Filaments and appointed the first respondent, Mr Ravi Kapoor, as the Insolvency Resolution Professional. Thereafter, a Committee of Creditors was constituted, which consisted of Kotak Mahindra and the third respondent, UBIL. The Arya Committee of Creditors then appointed Mr Ravi Kapoor as the Resolution Professional., The Arya Resolution Professional thereafter invited Resolution Plans for Arya Filaments. Seroco, being a company formed by the former employees of Arya Filaments, submitted a Resolution Plan on 13 March 2019 where, inter alia, they offered to pay Rs 6,79,22,000. This was the only Resolution Plan which was received., At its fourth meeting held on 16 April 2019, the Arya Committee of Creditors noted that Seroco's Resolution Plan needed some improvements and directed it to submit a revised Plan. Seroco's revised Resolution Plan was then approved by the Arya Committee of Creditors in its fifth meeting held on 10 May 2019, with 100 per cent approval., On or about 15 May 2019, the Arya Resolution Professional filed an application under Section 30(6) before the National Company Law Tribunal for confirmation of the Resolution Plan. Form H under the Corporate Insolvency Resolution Process Regulations was filed by way of an affidavit on 5 June 2020., On 9 June 2020, Seroco addressed a letter to the Arya Resolution Professional and Arya Committee of Creditors highlighting that their Resolution Plan was based on the economic conditions which prevailed at that time, which had been significantly altered due to the onset of the COVID‑19 pandemic. In particular, it highlighted that the physical condition of Arya Filaments' machinery would have deteriorated; financial losses must have been suffered by Arya Filaments during the COVID‑19 pandemic; demand/sale of Arya Filaments' products must have suffered during the pandemic; and, due to the pandemic, the funds of Seroco have also been drastically reduced. Seroco submitted a revised Resolution Plan to be considered by the Arya Committee of Creditors. In the revised Resolution Plan, Seroco offered to pay, inter alia, an amount of Rs 5,29,22,000. It also requested the Arya Resolution Professional and Arya Committee of Creditors to file the revised Resolution Plan before the National Company Law Tribunal and keep the proceedings on the confirmation of the previous Resolution Plan in abeyance., Thereafter, on 10 July 2020, Seroco filed an application before the National Company Law Tribunal praying for the following reliefs: (a) permit the applicant to revise the Resolution Plan dated 13.3.2020 in terms of the letter dated 09/06/2020 at Annexure C; (b) direct Respondent No. 2 to consider the modified Resolution Plan as per Annexure C and vote afresh on the same; (c) direct Respondent No. 1 to provide an updated Information Memorandum providing the financial condition of the Corporate Debtor as on 1/07/2020; (d) during the hearing of this application, stay the implementation, operation and execution of the Resolution Plan dated 13.3.2020 of the applicant. It noted that its Resolution Plan was filed eighteen months ago and was based on an Information Memorandum published two years previously, after which the conditions had materially altered. Hence, Seroco stated that while it was genuinely interested in Arya Filaments, its changed circumstances meant that it could not pay the entire consideration envisaged in the Resolution Plan approved by the Arya Committee of Creditors earlier., Seroco's application was listed before the bench of the National Company Law Tribunal which was hearing the Arya Resolution Professional's application for confirmation of the Resolution Plan. By a common order on 23 October 2020, the National Company Law Tribunal allowed the Arya Resolution Professional's application and confirmed Seroco's Resolution Plan which had been approved by the Arya Committee of Creditors. In relation to Seroco's application for modification, the Tribunal noted: It is the matter of record that the instant application was filed subsequent to the filing of IA 280 of 2019 filed under Section 30(6) of the Insolvency and Bankruptcy Code. The applicant stated that the Resolution Plan, so submitted, is based on the Information Memorandum which was published two years ago. Considering the passage of two years and the outbreak of COVID‑19, the applicant is not aware of the current financial condition of the Corporate Debtor and is now not in a position to bear the costs/losses of the Corporate Debtor and hence is seeking withdrawal of the Resolution Plan. This story is not believable as the Corporate Debtor, being an MSME, has filed the plan considering its financial condition and has shown interest to take the company. Hence, having no knowledge of the financial condition does not arise at all. In view of the judgment passed by the Hon'ble National Company Law Appellate Tribunal in Kundan Care Products Ltd. vs. Mr. Amit Gupta, Resolution Professional and Ors. (Company Appeal (AT) (Insolvency) No. 653 of 2020), the Resolution Plan, once submitted, cannot be withdrawn as there is no provision in the Insolvency and Bankruptcy Code which allows withdrawal of an approved Resolution Plan and the successful Resolution Plan incorporates contractual terms binding the Resolution Applicant but it is not a contract of personal service which may be legally unenforceable. Moreover, there is an ambiguity in the instant application with regard to the relief sought, as the title of the application states \Application for withdrawal under Section 60(5) of the Insolvency and Bankruptcy Code, 2016\ whereas the prayer, as stated above, has no reference to the withdrawal of the Resolution Plan. Consequently, the Tribunal rejected Seroco's application and imposed costs of Rs 50,000., Seroco filed an appeal against the National Company Law Tribunal's judgment, which was dismissed by the National Company Law Appellate Tribunal by its impugned order dated 10 December 2020. The Tribunal noted that after hearing learned counsel for the appellant and having regard to the judgments rendered by this Appellate Tribunal holding that the Successful Resolution Applicant cannot be permitted to withdraw the approved Resolution Plan, coupled with the fact that the appellant in the instant case was the sole Resolution Applicant in the Corporate Insolvency Resolution Process of the Corporate Debtor classified as an MSME and admittedly having knowledge of the financial health of the Corporate Debtor as a promoter or a connected person, the appellant could not be permitted to seek revision of the approved Resolution Plan on that ground, which would not be a material irregularity within the ambit of Section 61(3) of the Insolvency and Bankruptcy Code, 2016. The Tribunal was of the considered opinion that there was no merit in this appeal and it was liable to be dismissed. Considering Arya Filaments' position as an MSME, Seroco being a company formed by its former employees (who would have been aware of its financial condition) and also being the sole Resolution Applicant, the National Company Law Appellate Tribunal refused to permit modification or withdrawal of the Resolution Plan., Mr K V Vishwanathan, learned Senior Counsel appearing on behalf of Ebix, submitted that a successful Resolution Applicant may be permitted to withdraw the Resolution Plan (pending approval of the Adjudicating Authority) on account of subsequent developments in relation to Educomp (investigations of fraud and mismanagement during the pre‑Corporate Insolvency Resolution Process period) and due to an inordinate lapse of time which has resulted in the complete erosion of the fundamental commercial substratum underlying the Resolution Plan. He argued that the National Company Law Appellate Tribunal did not correctly apply the doctrine of constructive res judicata. He made the following submissions: (i) Ebix is not bound by the Resolution Plan prior to the approval of the Adjudicating Authority, as provided by Section 31(1) of the Insolvency and Bankruptcy Code (the plan is binding on all stakeholders only upon approval); Section 74(3) of the Insolvency and Bankruptcy Code provides that a person can be prosecuted for contravening the Resolution Plan only after its approval; the documents underlying the Corporate Insolvency Resolution Process – invitation of expression of interest, the Resolution Framework for Resolution Process (RFRP), sanction letter and Resolution Plan – take effect as a binding contract only upon approval of the Adjudicating Authority and execution of definitive agreements; Clause 1.1.6 of the RFRP provides that the plan submitted by Ebix will be binding on all stakeholders only after approval by the Adjudicating Authority; Clause 1.10(1) of the RFRP provides that Ebix shall be responsible for implementation and supervision of the Resolution Plan from the date of approval; and Clause 2.2.9 of the RFRP provides that Ebix shall, pursuant to approval by the Adjudicating Authority, execute definitive agreements. (ii) The Resolution Plan constitutes an offer qualified by time and cannot be enforced after a long lapse; the plan was valid only for six months under Clause 1.8.3 of the RFRP and Clause 7 of the Resolution Plan, and the appellant may withdraw if there is delay beyond six months. Reliance was placed on the decision of this Court in Riya Travel & Tours (India) (P) Ltd. v. C. U. Chengappa. (iii) A period of eighteen months has passed from the date of submission of the resolution plan (19 February 2018) and twenty‑seven months from the commencement of the Corporate Insolvency Resolution Process, which is impermissible under Section 12 of the Insolvency and Bankruptcy Code and justifies withdrawal of the plan. (iv) Material information relating to the financial position and affairs of Ebix was not provided after the submission of the Resolution Plan, impairing a fair commercial transaction. Section 29(2) of the Insolvency and Bankruptcy Code requires all relevant information to be provided to the Resolution Applicant; Regulation 36 of the Corporate Insolvency Resolution Process Regulations mandates that the Information Memorandum contain assets and liabilities, the latest annual financial statement, and details of ongoing investigations or proceedings. The UNCITRAL Guide and the BLRC Report underline the principle of equality of information to all stakeholders. (v) Under Section 31 of the Insolvency and Bankruptcy Code, the Adjudicating Authority has the power to permit withdrawal of the Resolution Plan after independently satisfying that the plan meets the requirements of Section 30(2). Section 30(2)(d) allows the Authority to assess whether adequate provisions have been made for implementation and supervision. The Court in K Sashidhar v. IOC emphasized that the Authority may reject a plan that does not conform to Section 30(2)(d). The proviso to Section 31(1) expressly prohibits approval of a plan that is incapable of effective implementation. (vi) The National Company Law Tribunal had valid reasons to allow withdrawal: there was no approval by the Committee of Creditors with the requisite 75 per cent majority; the voting on the plan submitted on 22 February 2018 fell short of the statutory requirement; a financial creditor later intimated agreement, leading to an approval application filed on 7 March 2018, with orders reserved on 10 January 2018; and fulfillment of the plan cannot be foisted on an unwilling applicant., Mr Shyam Divan, learned Senior Counsel appearing on behalf of the Committee of Creditors, urged that Ebix submitted its Resolution Plan on 27 January 2018 after month‑long negotiations, with meetings on 17, 19 and 21 February 2018 and addendums submitted on 21 February 2018. The mutually approved and negotiated plan was put to vote and approved by 75.36 per cent of the Committee of Creditors, constituting a binding contract between Ebix and the Committee of Creditors. The Insolvency and Bankruptcy Code is a complete code, as held by this Court in Embassy Property Developments Pvt. Ltd. v. State of Karnataka & Ors. and Innoventive Industries Ltd. v. ICICI Bank & Anr., and does not envisage withdrawals of Resolution Plans after mutual negotiations that culminate in a binding agreement. The Adjudicating Authority cannot contravene the text to invoke the spirit or object of the Code without a statutory prescription, as held in Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta. The basic tenets of insolvency law are to ensure the sanctity of prescribed processes and timelines; maximisation of asset value and resolution of the Corporate Debtor are core objectives, as held in Swiss Ribbons (P) Ltd. v. Union of India. Enabling withdrawals, especially at the tail end of the process, would push financially distressed corporate debtors into liquidation. The Specific Relief (Amendment) Act 2018, as indicated by the Union Minister of Law & Justice in the Rajya Sabha, shifted the paradigm on contract enforcement in India, making specific performance the norm rather than the exception. The resolution process involves significant public money, resources and time; enabling withdrawals would undermine predictability and finality, goals recognised by the legislature in the Rajya Sabha debates on the Code. Non‑implementation of Resolution Plans after approval by the Adjudicating Authority under Section 31, within a narrow scope of judicial review, is liable to criminal prosecution under Section 74(3). This Court should not allow a successful Resolution Applicant to withdraw from a duly concluded contract. Permitting withdrawal would push Educomp towards liquidation, risking thousands of crores of public monies owed to public sector banks during the COVID‑19 economic crisis. Withdrawal would tread on the exclusive domain of the Committee of Creditors, which determines the feasibility and viability of a Resolution Plan; Section 30(2)(d) envisages implementation and supervision, and allowing withdrawal would breach this mandate. The scope of judicial review by the Adjudicating Authority under Section 31 is confined to parameters in Section 30(2) and does not envisage withdrawal or unwillingness of the Resolution Applicant to continue with a Committee of Creditors‑approved plan. The Authority, as a creature of the statute, cannot exceed the scope of the Code or second‑guess the commercial wisdom of the Committee of Creditors, as held in Essar Steel Ltd. v. Satish Kumar Gupta & Ors. and K Sashidhar v. IOC. The Supreme Court, in Essar Steel and K Sashidhar, has held that the Authority cannot trespass upon the majority decision of the Committee of Creditors except on the grounds enumerated in Section 30(2)(a) to (e). The provisions of the Resolution Framework for Resolution Process were designed to ensure predictability and finality: Clause 1.13.5 did not envisage any change or supplemental information to the Resolution Plan after submission; Clause 1.8.4 stated that a submitted Resolution Plan shall be irrevocable; Clause 1.10(l) stipulated that the Resolution Applicant will not be permitted to withdraw the Resolution Plan. Clause 1.8.3, which stipulated a minimum six‑month validity of the Resolution Plan, relates to acceptance by the Committee of Creditors, not the Adjudicating Authority, and the plan remains irrevocable. The process was delineated as follows: Clause 1.3.1 and 1.3.2 empower the Resolution Professional to issue an invitation to prospective resolution applicants, subject to non‑disclosure agreements and participation fees; Clause 1.3.6, read with Clause 1.9.1, enables a party to submit a Resolution Plan upon payment of an earnest money deposit of Rs 2 crore, together with an undertaking accepting the terms of the RFRP, including the six‑month validity; Clause 1.9.3, read with Clause 1.9.5, ensures that a Committee of Creditors‑approved Resolution Plan becomes a binding contract between the Committee of Creditors and Ebix, as the earnest money deposit must be replaced with a performance guarantee of 10 per cent of the plan value.
|
id_1673
| 3
|
Any violation of the concluded contract, which would be the approved Resolution Plan in this case, would give the Committee of Creditors (E‑CoC) the right to invoke the performance guarantee. The above clauses, in addition to clause 1.8.3 read with 1.9.5, evince that the six‑month validity is with respect of the Earnest Money Deposit alone, and is hence only related to a period until acceptance by the Committee of Creditors (E‑CoC). The consequence of approval by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code is that the parties enter into definitive binding agreements, the implementation of the Resolution Plan commences and the performance guarantee is returned. A Section 31 approval binds all stakeholders to a concluded contract between Ebix and the Committee of Creditors or the Resolution Professional. The Committee of Creditors or the Resolution Professional do not have the authority to impose a time limit on the Adjudicating Authority. Therefore, it would not be plausible to construe Clause 1.8.3 to impose a maximum validity period on a Resolution Plan. In any event, Ebix had waived the term of validity of the plan being six months by pursuing the plan after six months, i.e., from August 2018 till reserving of orders by the Adjudicating Authority in January 2019, and not raising any claims till July 2019. Therefore, Ebix is estopped from raising the plea after the purported expiry of the validity period., Clause 1.1.6 of the Resolution Framework for Resolution Process (RFRP), which reiterated Section 31 of the Insolvency and Bankruptcy Code and states that the Resolution Plan will be binding on all stakeholders only after the approval of the Adjudicating Authority, does not militate against the Committee of Creditors’ proposition that the Committee of Creditors‑approved Resolution Plan is a concluded contract. This is because Section 30(4) of the Insolvency and Bankruptcy Code does not contemplate any statutory exit after the approval of the Resolution Plan by the Committee of Creditors, which determines its feasibility and viability. Clause 1.1.6 paraphrases Section 31(1) of the Insolvency and Bankruptcy Code, which merely makes the Resolution Plan binding on all other stakeholders. The Adjudicating Authority’s approval under Section 31(1) amounts to a super‑added imprimatur to the concluded terms between the Committee of Creditors and the Successful Resolution Applicant. A conjoint reading of Clause 1.1.6, along with Clause 1.8.4, which declares a submitted Resolution Plan to be irrevocable, and Clause 1.10(l), which prohibits withdrawal of a submitted Resolution Plan, belies the claim that the Resolution Plan is binding on the Successful Resolution Applicant only after approval of the Adjudicating Authority., The delay in the resolution process is not attributable to the Committee of Creditors (E‑CoC). It cannot be cited to allow Ebix to withdraw from a legally binding plan. The Committee of Creditors approved the submitted Resolution Plan within 270 days, and it was promptly filed before the Adjudicating Authority in March 2018. The orders on the plan approval were reserved in January 2019 and pronounced only in January 2020. The delay cannot be attributable to the Committee of Creditors or used to withdraw from a plan which provided a 90 per cent haircut. The principle actus curiae neminem gravabit, i.e., the act of the Supreme Court of India shall harm no man, is a settled principle in law., Ebix’s argument that the substratum or commercial viability has eroded due to subsequent circumstances is facetious since Ebix had conducted its own due diligence in accordance with the Resolution Framework for Resolution Process (RFRP). Section 29 of the Insolvency and Bankruptcy Code also enabled the appellant to access an Information Memorandum on Educomp, which would include all relevant information, including financial position and pending disputes. Clause 1.13.7 of the RFRP also stipulates that failure to conduct adequate due diligence is not a ground to relieve the Resolution Applicant from its obligations under a submitted Resolution Plan. Ebix continued to be interested in Educomp as late as 1 June 2020, when it addressed a letter stating that the software licenses for online education issued by Educomp had become even more relevant in the circumstances of the pandemic. The Investigation Audit Application for investigations into the affairs of Educomp was filed in May 2018 and disposed of by August 2018, which was prior to the Adjudicating Authority reserving its orders on the Resolution Plan; in any event, no such audit by the Special Investigation Team was undertaken. According to the information available with the Committee of Creditors (E‑CoC), the E‑Resolution Professional (E‑RP) had provided all the information available with Educomp regarding the Central Bureau of Investigation and Serious Fraud Investigation Office investigations, on a best‑effort basis. Additionally, Ebix was also appearing before the National Company Law Tribunal when the Committee of Creditors sought an investigation into the affairs of Educomp, as recorded in the order of the National Company Law Tribunal dated 9 August 2018. Ebix had evaluated the business and business conduct of Educomp before submitting a Resolution Plan worth Rs 314 crores, against an admitted financial debt worth Rs 3003 crores. This 90 per cent haircut indicates that the appellant was aware of the conditions of Educomp. In any event, Section 32A of the Insolvency and Bankruptcy Code grants immunity to a Resolution Applicant from any offences committed by the Corporate Debtor prior to the commencement of the Corporate Insolvency Resolution Process, and provides certainty that the assets of the Corporate Debtor, as represented, would be available in the same manner as at the time of submission of a Resolution Plan. Section 25(2)(j) of the Insolvency and Bankruptcy Code empowers and obligates the Resolution Professional to file applications for avoidance of certain transactions to protect the interests of the Resolution Applicant., The Third Withdrawal Application is barred by res judicata since the grounds raised by Ebix were rejected by the National Company Law Tribunal in the First Withdrawal Application on 10 July 2019. The liberty granted by the National Company Law Tribunal to file a fresh application on 5 September 2019 was with respect to filing a proper pleading without defects, and not on merits. This conditional liberty cannot be construed as a waiver of the objection of res judicata. In any event, the issue of limited validity of the approved Resolution Plan and delay of seventeen months is barred by the principles of constructive res judicata. In the alternative, if Ebix were to succeed before the Supreme Court of India, the learned Senior Counsel on behalf of the Committee of Creditors (E‑CoC) has prayed that the Supreme Court of India exercise its powers under Article 142 of the Constitution of India and extend the limitation period for conducting the insolvency process by three to four months for a fresh process to be initiated, subject to the consent of the Committee of Creditors (E‑CoC)., Supporting the submissions of the Committee of Creditors (E‑CoC), Mr Nakul Dewan, learned Senior Counsel, appeared on behalf of the E‑Resolution Professional (E‑RP). He submitted that upon the approval of a Resolution Plan by the Committee of Creditors, a concluded contract comes into existence between the Resolution Applicant and the Committee of Creditors. Any withdrawal of the Resolution Plan would violate the concluded contract. In the present case, Clauses 1.9.3 and 1.9.5 give the right to the Committee of Creditors (E‑CoC) to invoke the Performance Bank Guarantee submitted by Ebix if it attempts to renege from its contractual obligation to implement the Resolution Plan. The withdrawal would also be in violation of the objective of the Insolvency and Bankruptcy Code, as noted by the Supreme Court of India in Swiss Ribbons, which is to ensure the revival and continuation of the Corporate Debtor. The withdrawal of the Resolution Plan at a belated stage would lead to the Corporate Debtor going into liquidation. The withdrawal of a Resolution Plan after its approval by the Committee of Creditors is not contemplated by the UNCITRAL Guide, according to which the role of judicial authorities is limited to approving the Resolution Plan after ensuring that it was approved by the Committee of Creditors properly. It does not envisage that the role of the judicial authorities would extend to questioning the commercial wisdom of the Committee of Creditors, much less allow for the withdrawal of the Resolution Plan at the behest of the Resolution Applicant. The Banking Law Reform Committee (BLRC) Report notes that the UNCITRAL Guide was used as a benchmark by Parliament while enacting the Insolvency and Bankruptcy Code, opined that the Committee of Creditors should be the driving force behind the resolution of the Corporate Debtor, and does not discuss the withdrawal of a Resolution Plan. The United Kingdom Insolvency Act does not allow for the withdrawal of a Resolution Plan and limits the grounds of challenge. In Singapore, the Singapore Insolvency Act allows challenges to the Resolution Plan without envisaging withdrawal. The Resolution Plan is a contract executed under the aegis of the Insolvency and Bankruptcy Code and hence the statute must be interpreted so as to further its objectives. Reliance for this proposition is placed on the following English decisions: Allied Domecq (Holdings) Ltd v. Allied Domecq First Pension Trust Ltd; Reinwood Ltd v. L Brown & Sons Ltd; Doleman v. Shaw; and Standard Life Assurance Ltd v. Oak Dedicated Ltd. If Parliament, while enacting the Insolvency and Bankruptcy Code, intended to permit the withdrawal of the Resolution Plan after its approval by the Committee of Creditors or the National Company Law Tribunal, it would have provided for such an eventuality. Section 12A was inserted by amendment for situations involving a withdrawal from the Corporate Insolvency Resolution Process. On the contrary, Section 74 provides for penalties in case the Resolution Applicant does not comply with the Resolution Plan., Ebix’s argument that the Resolution Framework for Resolution Process, which provides that the Resolution Plan must be approved within six months, would also include its approval by the Adjudicating Authority, is contrary to the Insolvency and Bankruptcy Code since the parties, through an agreement, cannot impose a restriction or condition on a judicial authority. In any case, Ebix has actively pursued the Resolution Plan even after the period of six months by communicating with the Committee of Creditors (E‑CoC) and the E‑Resolution Professional, arguing in its favor in the Approval Application and by extending the Earnest Money Deposit. The First Withdrawal Application was filed only on 5 July 2019, after the expiry of the six‑month period on 19 August, nearly one year later. The investigations by the Serious Fraud Investigation Office and the Central Bureau of Investigation were initiated after the filing of the Approval Application before the National Company Law Tribunal. Since the E‑Resolution Professional was not aware of any discrepancies or illegalities committed by the former management of Educomp, information about such activities could not have been provided to intending Resolution Applicants under Section 29 of the Insolvency and Bankruptcy Code. Section 29 only envisages that the Resolution Professional will provide information to prospective Resolution Applicants on a best‑effort basis., The Insolvency and Bankruptcy Code vests the Adjudicating Authority with inherent powers to direct withdrawal: Section 60(5)(c) of the Insolvency and Bankruptcy Code vests the Adjudicating Authority with wide powers and jurisdiction to entertain and dispose of any question of law or fact arising out of or in relation to the Corporate Insolvency Resolution Process. Rule 11 of the NCLT Rules 2016 also endows the National Company Law Tribunal with inherent powers. This Court, in Gujarat Urja, has held that disputes arising in relation to insolvency can be adjudicated under Section 60(5)(c). Accordingly, the dismissal of Kundan Care’s application on lack of jurisdiction is impermissible. Declining to go into merits of its application amounts to an impermissible refusal to exercise jurisdiction, as noted by this Court in National Thermal Power Corporation Ltd. v. Siemens Aktiengesellschaft. The National Company Law Tribunal erred in rejecting Kundan Care’s contention by confining its jurisdiction to Section 31(1) of the Insolvency and Bankruptcy Code which specifically deals with approval or rejection of Resolution Plans. The National Company Law Appellate Tribunal incorrectly proceeded on the assumption that its powers in disposing of Kundan Care’s application seeking withdrawal were circumscribed by Section 61(3) of the Insolvency and Bankruptcy Code, which concerns appeals against approval of a Resolution Plan. Kundan Care sought to invoke jurisdiction under Section 61(1) of the Insolvency and Bankruptcy Code which provides a right of appeal against any order of the National Company Law Tribunal. The facts and circumstances, on the basis of which the feasibility and viability of the Resolution Plan were approved by the Advisory Committee of Creditors in its commercial wisdom, have changed. Since the edifice of the Advisory Committee of Creditors’ satisfaction had altered, the National Company Law Tribunal has power to look into the facts which warrant withdrawal or modification of the Resolution Plan. The legislative background of Section 31 of the Insolvency and Bankruptcy Code does not contemplate circumstances that could arise after submission of the Resolution Plan to the Adjudicating Authority. The UNCITRAL Guide and the BLRC Report place the viability of the Corporate Debtor at the heart of the insolvency process. The Corporate Insolvency Resolution Process mandates interests of stakeholders to be better preserved by reorganization than liquidation. The BLRC Report was relied upon by this Court in K Sashidhar to propound the principle of commercial wisdom of the Committee of Creditors which the Adjudicating Authority cannot interfere with as the creditors, as the loss‑making party in the insolvency, are best placed to determine the terms of the resolution. However, this principle does not touch upon instances where there is a conflict between the Committee of Creditors and the Resolution Applicant where the latter will prima facie suffer a loss. The Resolution Applicant has no stake in the process until their Plan is approved by the National Company Law Tribunal and the probability of a complete loss, prior to the approval of the Plan, is justiciable. The Insolvency and Bankruptcy Code contemplates strict timelines, and therefore did not envisage a scenario of withdrawal, prior to approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code. This Court, in Essar Steel, held that the 330‑day outer limit is directory which has resulted in Kundan Care’s Plan remaining pending before the National Company Law Tribunal for over a year, resulting in unviability and losses. Therefore, Section 31 cannot be asserted while adjudicating a plea for withdrawal or modification of a plan due to intervening factors having a material adverse effect in this case. Kundan Care’s Resolution Plan was contingent on the continuance of the Power Purchase Agreement with Gujarat Urja Vikas Nigam Limited. If the contingency does not arise, the Plan would become impossible. This Plan was accepted by the Advisory Committee of Creditors on this contingency. Therefore, disabling withdrawals or modifications would in fact violate the commercial wisdom of the Advisory Committee of Creditors. The Resolution Plan has become unviable and impossible to implement. If mandatorily implemented, Astonfield is bound to suffer losses and eventually declare itself insolvent. These events hinder its effective implementation and warrant the Plan’s rejection by the Advisory Committee of Creditors since the first proviso of Section 31(1), read with Sub‑section (2)(d) warrants a determination by the Adjudicating Authority of the Resolution Plan’s effective implementation. The determination by the Adjudicating Authority under Section 31(1) cannot be equated to that of a rubber‑stamp where a holistic analysis is precluded. BLRC’s Interim Report of February 2015 mentions that viability is determined by providing that the cost of financial arrangement (resolution amount invested by the Resolution Applicant) should be lower than the Net Present Value of future cash flows of the Corporate Debtor. In Kundan Care’s calculation, the computed Net Present Value for future cash flow of Astonfield demonstrates loss and a potential repeated Corporate Insolvency Resolution Process. The proposition that a Resolution Plan approved by the Committee of Creditors cannot be withdrawn or modified under any circumstance, no matter the extent of impossibility or unviability that may have arisen subsequently, is seriously flawed and is likely to lead to draconian and absurd consequences. In the event that the basis of the Resolution Plan is completely eroded, a Resolution Applicant’s failure to implement the Plan would invite penal prosecution under Section 74 of the Insolvency and Bankruptcy Code and a repeated Corporate Insolvency Resolution Process. This will discourage prospective Resolution Applicants from coming forward with their Plans in the future, thus defeating the very purpose and object behind., There is no concluded and binding contract between the Resolution Applicant and the Committee of Creditors, prior to approval by the Adjudicating Authority: There is no concluded contract between the Resolution Applicant and the Committee of Creditors until the National Company Law Tribunal approves the same. Section 7 of the Contract Act requires the acceptance of offer to be absolute, unconditional and unqualified. Clauses 1.1.9, 1.2, 1.9.4 and 2.2.6 of the Resolution Framework for Resolution Process record the fact that the Plan would be binding only after the approval of the Adjudicating Authority. The Resolution Framework for Resolution Process is in the nature of an invitation to offer. Kundan Care’s Resolution Plan is an offer that is made in pursuance of the Resolution Framework for Resolution Process. A contract is concluded and becomes binding between the parties only upon the communication of its acceptance under Regulation 39(5) of the Corporate Insolvency Resolution Process Regulation, after the approval of the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code. It would be incorrect to term it as a concluded contract, since it would have unforeseeable public ramifications. Since there is no concluded contract, withdrawal of an offer prior to acceptance is a settled principle in contract law and the Adjudicating Authority can give effect to this under Section 60(5) of the Insolvency and Bankruptcy Code. Arguendo, if there is a concluded contract, it has become void under Sections 32 and 35 of the Contract Act. Clause 1.8.3 of the Resolution Framework for Resolution Process provided that the Plan must be valid for not less than six months. On this representation, Kundan Care prepared financial projections on the assumption that they would take over the project on 1 January 2020 and make it operational by 1 April 2020. The projections were based on the continuation of Gujarat Urja Vikas Nigam Limited’s Power Purchase Agreement with Astonfield till 2037. Kundan Care even furnished revised projections based on the assumption that they would be able to take over the project by 30 September 2020 and make it operational by 1 January 2021. Owing to this delay, Kundan Care noted that its original projections for the year 2038 went from a cumulative profit of Rs 886.53 lakhs to a cumulative loss of Rs 760.71 lakhs. The Adjudicating Authority’s statement was recorded by the National Company Law Tribunal on 20 February 2020 that Astonfield is incurring a daily loss of Rs 5 lakhs. This takes the cumulative loss of Astonfield to Rs 1647.24 lakhs. Clause 5.1 of Kundan Care’s Resolution Plan also clearly stated that they would be at liberty to withdraw the Resolution Plan in the event that there is any change in the information provided in the Information Memorandum or new information is available, which constitutes a material adverse change. Kundan Care contends that this was specifically introduced due to Gujarat Urja Vikas Nigam Limited’s attempts to terminate the Power Purchase Agreement. The Advisory Committee of Creditors was not obligated to accept this provision in the Plan, but since it has, the provision must be enforced. Withdrawal was necessitated because of uncertainty over the continuation of the sole contract of Astonfield, deterioration of the assets of Astonfield owing to the floods in Gujarat, repudiation of Astonfield’s insurance claim due to the alleged failure of the Advisory Resolution Professional to provide supporting documents and misrepresentation in respect of trade receivables towards non‑availing the benefit of accelerated depreciation. Kundan Care had also demonstrated good faith since it sought to withdraw the Resolution Plan on 17 December 2019, soon after Gujarat Urja Vikas Nigam Limited’s appeal was listed before this Court. This interim application for withdrawal was filed within a month of the Advisory Resolution Professional submitting the plan to the Adjudicating Authority. The National Company Law Appellate Tribunal erred in noting that this was a ploy on behalf of Kundan Care to frustrate the Corporate Insolvency Resolution Process after pushing out all rivals during the bidding process., Alternatively, the Committee of Creditors‑approved Resolution Plan is a contingent contract under Section 32 of the Indian Contract Act: The contract has become void since the contingency of certainty of the Power Purchase Agreement with Gujarat Urja Vikas Nigam Limited within a specified time through approval of the National Company Law Tribunal has become impossible. Gujarat Urja Vikas Nigam Limited’s appeal against the continuation of the Power Purchase Agreement, resolved by this Court in Gujarat Urja, compounded by the COVID‑19 pandemic and the lockdown, is primarily responsible for the delay in the conclusion of the Corporate Insolvency Resolution Process. The delay, as of 14 July 2021, in concluding the Corporate Insolvency Resolution Process is 608 days. The Corporate Insolvency Resolution Process costs (Rs 12 lakhs per month approx.) are also increasing, which have to be borne entirely by Kundan Care. The National Company Law Tribunal should have considered the alternative prayer of permission to renegotiate the financial proposal with the Corporate Insolvency Resolution Process. The Advisory Committee of Creditors’ approval through voting constitutes provisional acceptance of offer, as was held analogously by this Court in Haridwar Singh v. Bagun Sumbrui which held that the contract was not concluded in the absence of the confirmation by the Government of the conditional acceptance by the Divisional Forest Officer. A statutory reading of Resolution Plans as contingent contracts under Sections 7 and 32 of the Contract Act would align with the intention of the Insolvency and Bankruptcy Code in attracting investors to make offers as conditional acceptance of the Plan, until it becomes binding upon approval under Section 31(1) of the Insolvency and Bankruptcy Code. Only Section 31(1) of the Insolvency and Bankruptcy Code makes the Resolution Plan binding on all stakeholders, including the Resolution Applicant and the Committee of Creditors. This view is bolstered by the fact that criminal sanctions for non‑implementation on a Resolution Applicant under Section 74(2) of the Insolvency and Bankruptcy Code are applicable only after approval of the Resolution Plan under Section 31(1). Regulation 36A(7)(f) of the Corporate Insolvency Resolution Process Regulations also states that the refundable deposit can be forfeited only in case of discovery of any false information or record by the prospective Resolution Applicant. Regulation 36‑B(4A) also states that the non‑refundable deposit shall be forfeited only on failure to perform after approval of the Plan under Section 31 of the Insolvency and Bankruptcy Code. The impugned judgments’ effect is to make it binding prior to the Adjudicating Authority’s approval which does violence to the unambiguous language of Section 31(1). This is further supported by the provisions of the Insolvency and Bankruptcy Code as noted by this Court in ArcelorMittal India Private Limited v. Satish Kumar Gupta, that disapproval by the Committee of Creditors of a Plan on the grounds of Section 29A of the Insolvency and Bankruptcy Code is still appealable by the Resolution Applicant before the National Company Law Tribunal, and therefore an approved Plan by the Committee of Creditors can still be replaced by another Plan which has been able to satisfy the criteria under Section 29A before the National Company Law Tribunal. In other words, a Plan approved by the Committee of Creditors does not result in a concluded contract because it is replaceable by another party., In the course of the final stage of the hearings, Kundan Care submitted that it had mutually negotiated a settlement with the Advisory Resolution Professional/Advisory Committee of Creditors and requested the exercise of the Supreme Court of India's powers under Article 142 of the Constitution of India for a one‑time relief of modification, which would enable them to arrive at a mutually acceptable modification to the Resolution Plan., Mr Nakul Dewan, learned Senior Counsel, appeared on behalf of the Advisory Resolution Professional in the Kundan Care Appeal. He also appeared on behalf of the E‑Resolution Professional in the Ebix Appeal, both being collectively disposed of by this judgment. He made the following submissions, in addition to the arguments recorded above in the Ebix Appeal: There is no direct provision with respect to withdrawal of a Resolution Plan under the Insolvency and Bankruptcy Code by a Resolution Applicant, once approved by the Committee of Creditors. Consequently, the Adjudicating or Appellate Authority has no jurisdiction to direct withdrawals or modification of Resolution Plans. Section 12 of the Insolvency and Bankruptcy Code provides for a time‑bound period of 180 days extendable up to 330 days for the completion of the Corporate Insolvency Resolution Process. Permitting the Resolution Applicant to withdraw the Resolution Plan after the approval of the Committee of Creditors sets at naught the entire time period subsumed in negotiating and voting upon a Resolution Plan. Kundan Care was permitted to submit its Resolution Plan in spite of a failure to submit an Expression of Interest in time. Kundan Care was aware of the pending litigation regarding the continuance of the Power Purchase Agreement with Gujarat Urja Vikas Nigam Limited and had negotiated with the Advisory Committee of Creditors on that basis. Yet, Kundan Care filed an application to withdraw its Plan within a month of its approval and filing before the Adjudicating Authority. The plea of withdrawal is an opportunistic tactic for renegotiation. Clause 1.8.4 of the Resolution Framework for Resolution Process stated that a submitted Resolution Plan shall be irrevocable. The format of the cover letter annexed to the Resolution Framework for Resolution Process also makes statements on the binding effect of the submission and its irrevocability. The Letter of Intent issued by Kundan Care also states that the Resolution Applicant will not be permitted to withdraw. Clause 1.6.2 of the Resolution Framework for Resolution Process explicitly stated that any Condition Precedents to the Plan had to be set out, for the Committee of Creditors to specifically consider. Any walk‑away conditions also had to be conspicuously set out with a heading, and under a consolidated paragraph. Clause 5.1 of the Resolution Plan was not set out in this format, which clearly evinces that it is being deployed as an afterthought to evade the consequences of a submitted Resolution Plan. In any event, none of the claims of Kundan Care constitute a material adverse change that they did not account for, after perusing the Information Memorandum. Clause 5.1 of Kundan Care’s Resolution Plan was not introduced as a condition precedent to the Resolution Plan. Clause 12 of Form H, that is required to be mandatorily submitted by the Resolution Professional to the Adjudicating Authority, as per Regulation 39(4) of the Corporate Insolvency Resolution Process Regulations expressly stipulates Conditionalities that need to be specified, for the benefit of the Adjudicating Authority. Attempts at subsequent modification and withdrawal are not supported by the Resolution Plan, the Resolution Framework for Resolution Process or the provisions of the Insolvency and Bankruptcy Code. The Corporate Insolvency Resolution Process costs currently stand at Rs 2.5 crore which Kundan Care had committed to paying in full. As of 26 July 2021, the unpaid Corporate Insolvency Resolution Process cost is Rs 1.66 crore which would probably be payable from the pending insurance claim. A table detailing the financial health of Astonfield for the last three years was also annexed, to bolster the claim that financial health has improved and profits can still be generated. The delay in approval of the Resolution Plan by the Adjudicating Authority is an imponderable which cannot be used to resile from a binding contract. The delay is also not attributable to the Advisory Resolution Professional or the Advisory Committee of Creditors., Mr V Giri, learned Senior Counsel appearing for EXIM Bank on behalf of the Advisory Committee of Creditors, made the following submissions: A Resolution Plan approved by the Committee of Creditors is submitted by the Resolution Professional to the National Company Law Tribunal under Section 30(6) of the Insolvency and Bankruptcy Code. Once the National Company Law Tribunal is satisfied that the Resolution Plan complies with the requirements of Section 30(2), it grants its approval to the Plan, which becomes binding on all the stakeholders involved in the Resolution Plan. Thus, the Insolvency and Bankruptcy Code does not contemplate withdrawal of a Resolution Plan once it has been approved by the Committee of Creditors. The penal provision under Section 74(3) is applicable to a successful Resolution Applicant as it is a stakeholder in the Corporate Insolvency Resolution Process. The existence of a penal provision indicates that the legislature intended to deter and discourage withdrawals of Resolution Plans. The Corporate Insolvency Resolution Process is a time‑bound process of 180 days, which can be further extended up to 330 days. If a successful Resolution Applicant is allowed to withdraw its Resolution Plan, it will set the clock back on the time spent on receiving the Resolution Plan, evaluating it under Section 30(2) of the Insolvency and Bankruptcy Code, putting it to vote before the Committee of Creditors and finally obtaining its approval from the Adjudicating Authority. Withdrawal of the Resolution Plan at this stage would result in the failure of the Corporate Insolvency Resolution Process and Astonfield will go into liquidation. The Insolvency and Bankruptcy Code envisages liquidation as the last resort. The process of issuing the Resolution Framework for Resolution Process and proposal of a Resolution Plan, and its subsequent approval by the Committee of Creditors is statutorily mandated. The formats of the documents underlying the Corporate Insolvency Resolution Process are also provided by the statute and the Regulations made thereunder.
|
id_1673
| 4
|
There is some room for maneuverability provided to the parties to negotiate the terms of the documents, however, that does not make any difference to the statutorily prescribed nature of the documents; and (vi) The approval of the Resolution Plan under Section 30(3) of the Insolvency and Bankruptcy Code (IBC) by the Committee of Creditors (CoC) creates a binding contract between the CoC and the successful Resolution Applicant because: (a) The proposed Resolution Plan has been approved by the CoC and has been further submitted before the National Company Law Tribunal (NCLT) by the Resolution Applicant; (b) A Resolution Applicant is aware of the conditions stipulated under the Information Memorandum (IM) and conducts its own due diligence. It is given an opportunity to raise queries on the information that is provided in the IM. Thus, once the Resolution Applicant decides to submit a Resolution Plan and a substantial time and effort is spent by the Resolution Applicant and the CoC in the process of finalising and approving a Resolution Plan, it cannot simply withdraw the Resolution Plan without being subjected to necessary consequences; (c) The approval of the plan by the CoC indicates the ad idem between the parties to enter into a contract. The resulting contract is conditional only upon the approval by the NCLT; (d) Pursuant to the approval of the Resolution Plan by the CoC, the CoC issues an unconditional Letter of Intent (LOI) to the successful Resolution Applicant stating that it has been selected as the successful Resolution Applicant subject to the approval of the NCLT. The successful Resolution Applicant accepts the LOI and submits a Performance Bank Guarantee (PBG). The successful Resolution Applicant is required to state that the LOI is accepted unconditionally. It is only after the LOI is unconditionally accepted by the successful Resolution Applicant and the PBG is furnished, that the Resolution Applicant makes an application to the NCLT for approval of the Resolution Plan; and (e) Contracting parties cannot renege on their promise to perform the contract without facing any consequences., F Submissions of counsel in the Seroco Appeal\n\nF.1 Submissions for the appellant 90 Mr Tirth Nayak has made the following submissions on behalf of Seroco: (i) The Resolution Plan was submitted on the basis of information that was provided under the Information Memorandum (IM) issued by the Arya Resolution Professional in August 2018. Over 18 months have passed since the Resolution Plan was submitted. The inordinate delay in the approval of the Resolution Plan by the NCLT, along with the outbreak of the COVID‑19 pandemic, has substantially affected the valuation of Arya Filaments, apart from impacting its business operations and financial position. Thus, Seroco is entitled to re‑evaluate and modify the Resolution Plan based on such considerations; (ii) The delay cannot be attributed to Seroco; (iii) The value of assets and the working capital funds of Arya Filaments have plummeted due to the losses that have occurred in the past eighteen months rendering the implementation of the current Resolution Plan impossible, thereby making it necessary to modify the plan to suit the current circumstances; (iv) Seroco was not made aware of the updated financial status of Arya Filaments. It will be unjust if it is made to abide by a Resolution Plan that was submitted eighteen months ago based on the IM that was issued over twenty‑four months ago; (v) Clause 5.3.2 of the Bankruptcy Law Reform Committee (BLRC) Report provides that the Resolution Professional must provide the most updated information about the entity as accurate as is reasonably possible to this range of solution providers. In order to do this, the Resolution Professional has to be able to verify claims to liabilities as well as the assets disclosed by the entity. The Resolution Professional has the power to appoint whatever outside resources that she may require in order to carry out this task including accounting and consulting services. Seroco cannot be expected to make a huge investment in Arya Filaments without being given information on its current financial status; (vi) Seroco is genuinely interested in investing in Arya Filaments, however, due to the change in circumstances, it is incapable of paying the entire consideration as was stipulated under the current Resolution Plan; and (vii) A Resolution Plan is an offer under Section 2(a) of the Indian Contract Act. The Resolution Applicant becomes bound by the offer only if the Resolution Plan is approved by the NCLT. At present, the plan is still under the consideration of the NCLT. Thus, Seroco can withdraw or seek modification of the plan., F.2 Submissions for the second and third respondents 91 Mr Jayant Mehta appearing on behalf of the Arya Committee of Creditors, consisting of Kotak and UBIL, has supported the arguments of the E‑CoC and A‑CoC. He has urged the following additional submissions: (i) There is no scope for modification of a Resolution Plan once it has been submitted by the Resolution Professional to the Adjudicating Authority after voting by the CoC. The only ground sought by Seroco for modification of the submitted Resolution Plan here is the exigency that has arisen due to the pandemic. This is evinced from the fact that the application for modification was made within two months of the outbreak of the pandemic; (ii) The Resolution Plan of Seroco was approved by the Arya Committee of Creditors on 10 May 2019 and submitted to the Adjudicating Authority for approval on 14 May 2019. When Seroco filed their application before the NCLT for modification of the Resolution Plan, Kotak and UBIL, by their emails dated 13 July 2020 and 17 July 2020 respectively, had informed the Arya Resolution Professional that they record their disapproval for any such attempts at modification of the Resolution Plan which sought to reduce the resolution amount payable to secured creditors by Rs 1.5 crore; (iii) There has been no material change in the assets or valuation of Arya Filaments. Seventy‑five per cent of the funds were to be generated by Seroco by the sale of the Arya Filaments assets; and (iv) The following authorities were cited to elucidate on the power of the Adjudicating Authority, which is tightly circumscribed by the IBC, and designed to uphold the commercial wisdom of the CoC: K. Sashidhar, Essar Steel, Committee of Creditors AMTEK Auto Limited Through Corporation Bank v. Dinkar T. Venkatasubramanian & Ors., Kalparaj Dharamshi v. Kotak Investment Advisors Ltd., Jaypee Kensington Boulevard Apartments Welfare Association & Ors. v. NBCC (India) Ltd. & Ors., and Ghanashyam Mishra and Sons Private Limited through the Authorized Signatory v. Edelweiss Asset Reconstruction Company Limited through the Director & Ors. An appeal under Section 61(3) of the IBC is therefore not maintainable for a Resolution Applicant seeking modification of its approved Resolution Plan. The Adjudicating Authority in allowing any such modification cannot do indirectly what the statute does not permit it to do directly., The rival submissions in the three appeals shall now be considered.\n\nG Purpose of a law on insolvency\n\nAn examination of the raison d’être of the IBC must necessarily precede its analytical interpretation. A purposive interpretation of the statute, as is argued by the contesting parties, cannot be evinced without examining the aims and objectives of the legislation. The IBC was introduced as a watershed moment for insolvency law in India that consolidated processes under several disparate statutes such as the 2013 Act, SICA, SARFAESI, Recovery of Debts Act, Presidency Towns Insolvency Act 1909 and the Provincial Insolvency Act 1920, into a single code. A comprehensive and time‑bound framework was introduced with smooth transitions between reorganisation and liquidation, with an aim to inter alia maximise the value of assets of all persons and balance the interest of all stakeholders., Before we analyse the framework of the statute, the UNCITRAL Guide, which was instructive for the Indian experience on drafting the IBC, provides some critical guidance on what an insolvency law represents. Notably, the UNCITRAL Guide explicitly refrains from prescribing mandates for the specific choices (procedural or substantive) that an insolvency law should provide. Instead, it clarifies that each jurisdiction evolves its own insolvency regime based on its social, political and economic goals. It notes: 15. Since an insolvency regime cannot fully protect the interests of all parties, some of the key policy choices to be made when designing an insolvency law relate to defining the broad goals of the law (rescuing businesses in financial difficulty, protecting employment, protecting the interests of creditors, encouraging the development of an entrepreneurial class) and achieving the desired balance between the specific objectives identified above. Insolvency laws achieve that balance by reapportioning the risks of insolvency in a way that suits a State’s economic, social and political goals. As such, an insolvency law can have widespread effects in the broader economy. 17. There is no universal solution to the design of an insolvency law because States vary significantly in their needs, as do their laws on other issues of key importance to insolvency, such as security interests, property and contract rights, remedies and enforcement procedures. Although there may be no universal solution, most insolvency laws address the range of issues raised by the key objectives discussed above, albeit with different emphasis and focus. Some laws favour stronger recognition and enforcement of creditor rights and commercial bargains in insolvency and give creditors more control over the conduct of insolvency proceedings than the debtor (sometimes referred to as creditor‑friendly regimes). Other laws lean towards giving the debtor more control over the proceedings (referred to as debtor‑friendly regimes), while yet others seek to strike a balance in the middle., With this legislative guidance from international law, the Bankruptcy Law Reform Committee (BLRC) was commissioned by the Government of India for submitting a report with recommendations of reforms for the existing regime and a draft of the proposed Insolvency and Bankruptcy Code. In November 2015, the BLRC Report published its report in two volumes, with the first volume delineating the rationale and the second volume providing the design of the proposed legislation. The BLRC report noted that the insolvency regime was due for a major overhaul as the recovery rates in India were among the lowest in the world and a revamped, coherent code was envisaged with speed and predictability woven into its underlying design to ensure higher recovery rates and immediate liquidation in the event of a failed resolution. As noted by the Supreme Court of India in Essar Steel, the insolvency regime in India was overhauled after the provisions of SICA, SARFAESI and Recovery of Debts Act, in spite of providing for expeditious determination, were used by defaulting companies to enjoy extended moratorium periods and failure to enforce timelines meant legal proceedings would drag on for years and not result in recovery of stressed assets. Similarly, in its observation on “Speed is of Essence”, the BLRC report elaborated the commercial purpose of a revamped insolvency regime in the following terms: Speed is of essence for the working of the bankruptcy code, for two reasons. First, while the calm period can help keep an organisation afloat, without the full clarity of ownership and control, significant decisions cannot be made. Without effective leadership, the firm will tend to atrophy and fail. The longer the delay, the more likely it is that liquidation will be the only answer. Second, the liquidation value tends to go down with time as many assets suffer from a high economic rate of depreciation. From the viewpoint of creditors, a good realisation can generally be obtained if the firm is sold as a going concern. Hence, when delays induce liquidation, there is value destruction. Further, even in liquidation, the realisation is lower when there are delays. Hence, delays cause value destruction. Thus, achieving a high recovery rate is primarily about identifying and combating the sources of delay. In identifying the sources of delay, adjudicating mechanisms were identified as one of the two important sources of delay which need to be equipped with the right resources. In order to respond to the rapid changes in the economy, the BLRC report recommended the formation of an Insolvency and Bankruptcy Board of India (IBBI) which would function as a regulator and formulate regulations that dynamically detail the procedural norms of the working of the IBC with the necessary immediacy. It is also important for the Supreme Court of India, as a constitutional authority which determines questions of law concerning the IBC framework, to note that a rapid liquidation may sometimes be preferable to a protracted Corporate Insolvency Resolution Process (CIRP). This sentiment was stressed in the BLRC Report, in its concluding statement in the Executive Summary, which noted: Conclusion – The failure of some business plans is integral to the process of the market economy. When business failure takes place, the best outcome for society is to have a rapid re‑negotiation between the financiers, to finance the going concern using a new arrangement of liabilities and with a new management team. If this cannot be done, the best outcome for society is a rapid liquidation. When such arrangements can be put into place, the market process of creative destruction will work smoothly, with greater competitive vigor and greater competition. India is in the process of laying the foundations of a mature market economy. This involves well‑drafted modern laws, that replace the laws of the preceding 100 years, and high‑performance organisations which enforce these new laws. The Committee has endeavoured to provide one critical building block of this process, with a modern insolvency and bankruptcy code, and the design of associated institutional infrastructure which reduces delays and transaction costs. We hope that the implementation of this report will increase GDP growth in India by fostering the emergence of a modern credit market, and particularly the corporate bond market. GDP growth will accelerate when more credit is available to new firms including firms which lack tangible capital. While many other things need to be done in achieving a sound system of finance and firms, this is one critical building block of that edifice., H Nature of a Resolution Plan\n\nBefore we advert to whether withdrawals or modifications by successful Resolution Applicants are permissible under the IBC, we must begin by understanding the nature of a Resolution Plan. A Resolution Plan has been defined in Section 5(26) of the IBC in the following terms: “resolution plan means a plan proposed by resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II”; Explanation: For the removal of doubts, it is hereby clarified that a resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger. The Explanation to the provision was added by the Insolvency and Bankruptcy Code (Amendment) Act 2019. Further, the term “Resolution Applicant” was substituted for any person by the Insolvency and Bankruptcy Code (Amendment) Act 2018. The term “Resolution Applicant” has been defined in Section 5(25) of the IBC as follows: “resolution applicant means a person, who individually or jointly with any other person, submits a resolution plan to the resolution professional pursuant to the invitation made under clause (h) of sub‑section (2) of Section 25 or pursuant to Section 54‑K, as the case may be.” The IBC provides a roadmap for the entire CIRP in Chapter II of Part II. This process is tightly regulated to include, inter alia, timelines of the CIRP specified by Section 12, duties of the resolution professional to provide adequate information to propose a Resolution Plan in Section 29 and restrictions on who can be a Resolution Applicant in Section 29A. Thereafter, Section 30 provides for the submission of a Resolution Plan, and it reads as follows: 30. Submission of resolution plan. (1) A resolution applicant may submit a resolution plan along with an affidavit stating that he is eligible under Section 29‑A to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor; (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under Section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub‑section (1) of Section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub‑section (1) of Section 53 in the event of a liquidation of the corporate debtor. Explanation 1. For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2. For the purposes of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under Section 61 or Section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan; (c) provides for the management of the affairs of the corporate debtor after approval of the resolution plan; (d) the implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) conforms to such other requirements as may be specified by the Board. Explanation: For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013 or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. (3) The resolution professional shall present to the Committee of Creditors for its approval such resolution plans which confirm the conditions referred to in sub‑section (2). (4) The Committee of Creditors may approve a resolution plan by a vote of not less than sixty‑six per cent of voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub‑section (1) of Section 53, including the priority and value of the security interest of a secured creditor, and such other requirements as may be specified by the Board: Provided that the Committee of Creditors shall not approve a resolution plan submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, where the resolution applicant is ineligible under Section 29‑A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of Section 29‑A, the resolution applicant shall be allowed by the Committee of Creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of Section 29‑A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub‑section (3) of Section 12, and the corporate insolvency resolution process shall be completed within the period specified in that sub‑section. Provided also that the eligibility criteria in Section 29‑A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted a resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018. (5) The resolution applicant may attend the meeting of the Committee of Creditors in which the resolution plan of the applicant is considered: Provided that the resolution applicant shall not have a right to vote at the meeting of the Committee of Creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the Committee of Creditors to the Adjudicating Authority. Once a Resolution Applicant submits a Resolution Plan under sub‑section (1) of Section 30, the resolution professional must assess whether it conforms with all the requirements of sub‑section (2). Having satisfied itself, the resolution professional under sub‑section (3) must then present those Resolution Plans to the Committee of Creditors which fulfil the criteria under sub‑section (2). The Committee of Creditors will then proceed to decide on the approval of the Resolution Plan, with a majority vote of sixty‑six percent, after satisfying itself that the requirements under sub‑section (4) have been met, including testing the Resolution Plan for its feasibility and viability. A Resolution Applicant may attend this meeting of the CoC under sub‑section (5), but it does not have a right to vote unless it is also a financial creditor. The Resolution Plan approved by the CoC under sub‑section (4) is then placed by the resolution professional before the Adjudicating Authority for its approval under sub‑section (6)., Other than the IBC, the process is also regulated by the CIRP Regulations created under the IBC. Regulation 37 provides an illustration of the solutions which can be proposed in a Resolution Plan. Regulation 38 provides for the mandatory contents of a Resolution Plan, which are similar to the pre‑conditions mentioned in Section 30(2) of the IBC. Regulation 39 provides for the process of approval of a Resolution Plan by the CoC, and under sub‑Regulation (3), the CoC has to evaluate every Resolution Plan based on an evaluation matrix it has come up with under Regulation 5(ha). Having briefly taken an overview of the process, we now understand that there are broadly three stages: (i) the first stage is prior to and ends with the approval of the Resolution Plan by the CoC; (ii) the second stage is the interim period between the Resolution Plan’s approval by the CoC and before its confirmation by the Adjudicating Authority; and (iii) the third stage is after the approval of the Resolution Plan by the Adjudicating Authority. In the first stage, the relationship between the parties is explicitly governed by the provisions of the IBC such as the right of a prospective Resolution Applicant to seek the IM and RFRP upon submission of its EOI, which may have been rejected by the resolution professional (as it happened in the Kundan Care Appeal). In the third stage, the same holds true since Section 31(1) makes the Resolution Plan binding upon all the stakeholders and its violation will attract a penalty under Section 74 of the IBC. However, what we are assessing right now is the interim second stage between both of those. To understand the relationship of the parties therein, it becomes important to understand the exact nature of the Resolution Plan after it has been submitted to the Adjudicating Authority and before it has been approved under Section 104. To summarize the arguments of the parties, the appellants have argued that Resolution Plans are in the nature of an offer, which becomes binding as a concluded contract only once the Adjudicating Authority has approved the Resolution Plan. Section 7 of the Indian Contract Act requires the acceptance of an offer to be absolute, unconditional and unqualified. Since the approval by the CoC is effectively conditional upon the confirmation of the plan by the Adjudicating Authority, it cannot be said that there is absolute acceptance of the Resolution Plan. Alternatively, it has been argued that Resolution Plans approved by the CoC are contingent contracts, whose enforceability is conditional upon the approval of the Adjudicating Authority in accordance with Section 32 of the Indian Contract Act. The respondents (Resolution Professionals and the CoCs) have argued that a concluded contract comes into being when the Resolution Plan is approved by the CoC and a successful Resolution Applicant cannot renege from their contractual obligation to implement the Resolution Plan. In furtherance of this argument, Mr Shyam Divan appearing for the E‑CoC made a reference to the Specific Relief (Amendment) Act 2018, which has brought a change to the regime on contract enforcement in India by making specific performance the norm rather than the exception. The determination of the nature of the Resolution Plan would help us establish the source of the legal force of the Resolution Plan whether it is the statute, i.e., the IBC or the law of contract. The insolvency process, as governed by the IBC, does not merely structure the conduct of all the participants in the process after finalisation and approval of a Resolution Plan by a CoC, but also the conduct stemming from the very first steps of inviting prospective Resolution Applicants.
|
id_1673
| 5
|
Resolution Professional, with the approval of the Committee of Creditors, invites prospective Resolution Applicants through a Request for Resolution Process. Once an unconditional Expression of Interest has been received from prospective Resolution Applicants who are otherwise eligible under Section 29A, the Resolution Professional prepares an Information Memorandum as per the provisions of Section 29 which furnishes all relevant information of the Corporate Debtor to enable prospective Resolution Applicants to make an informed decision before proposing a Resolution Plan., As a consequence of the Insolvency and Bankruptcy Code and its regulations, prospective Resolution Applicants who are not disqualified under Section 29A propose drafts of their Resolution Plans. The Resolution Professional examines the Resolution Plan against the contours of Section 30(2) and submits only the eligible plans to the Committee of Creditors. Prior to the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) (Fourth Amendment) Regulations 2020, which now require the Committee of Creditors to vote on all plans simultaneously after recording its deliberations on the feasibility and viability of each plan, Regulation 39(3) earlier enabled the Committee of Creditors to approve a Resolution Plan with such modifications as it deemed fit. This meant that the prospective Resolution Applicants and the Committee of Creditors would indulge in several rounds of negotiations within a strict time‑frame to arrive at a mutually agreeable Resolution Plan, which was then subject to voting by the Committee of Creditors., Subsequent to the voting, the Resolution Professional would submit the plan to the Adjudicating Authority along with receipt of the Performance Bank Guarantee and a compliance certificate under Section 25(2)(h) of the Insolvency and Bankruptcy Code, Regulation 39(2) of the CIRP Regulations, in the form of Form H. Each of the stages detailed above corresponds to several rights and obligations on all parties that are specifically created by the statute., Since the interpretation of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) (Fourth Amendment) Regulations 2020 and the impact on the Resolution Applicants and the Committee of Creditors to negotiate the terms of the Resolution Plan is not before the Supreme Court of India and the present appeal essentially seeks to determine the nature of the Resolution Plan after its approval by the Committee of Creditors and prior to its approval by the Adjudicating Authority, the Supreme Court of India will proceed to determine the nature of such a plan on the assumption of the law as it stood then, i.e., Regulation 39(3) which directed that the committee shall evaluate the resolution plans received under sub‑regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit., This power of the Committee of Creditors to suggest modifications invariably entailed an element of negotiation with the Resolution Applicants, who would make suitable revisions and resubmit their Resolution Plans. The scope of a commercial bargain with the Resolution Applicants evinces a sense of a negotiated agreement that is arrived at between the parties, resembling an exercise of contractual freedom by the Committee of Creditors and the Resolution Applicant., If the Supreme Court of India were to hold that Committee of Creditors‑approved Resolution Plans are indeed contracts, their provisions would still have to conform to the statutory provisions of the Insolvency and Bankruptcy Code. However, such an interpretation would entail that Committee of Creditors‑approved Resolution Plans are at the intersection of the Insolvency and Bankruptcy Code and the Contract Act. This would mean that certain principles of contract law, for example those relating to discharge, penalties, remedies and damages, would become applicable to Committee of Creditors‑approved Resolution Plans., For instance, in the United States, plans confirmed by courts have been characterized as contracts, whose breach can give rise to contractual remedies. In In re Hoffinger Industries, Inc., a bankruptcy court in Arkansas held that a confirmed plan should be enforceable and amenable to damages between contractually bound parties. It has been argued before the Supreme Court of India that Resolution Plans should be enforced through the contractual remedy of specific performance., Further, a determination that Resolution Plans are contracts in the period between approval by the Committee of Creditors and approval by the Adjudicating Authority would require analysis of whether all elements of contract formation have been satisfied, including whether the acceptance of the Resolution Plan by the Committee of Creditors fulfills the criteria laid down under Section 7 of the Contract Act or whether the conditionality of seeking approval from the Adjudicating Authority makes the Resolution Plan a contingent contract., The intent of laying down the consequences of our determination of Resolution Plans as contracts is to highlight the importance of ascertaining the nature of a Committee of Creditors‑approved Resolution Plan prior to its approval by the Adjudicating Authority., The text of the Insolvency and Bankruptcy Code does not specify whether Resolution Plans at the second stage of the process, i.e., in the intervening period of submission to and approval by the Adjudicating Authority, are pure contracts. As noted previously, specifications such as eligibility for Resolution Applicants, the contents of the Information Memorandum, and duties of the Resolution Professional to prospective Resolution Applicants, together with procedures on timelines and voting, strictly govern the insolvency process even prior to the submission of the Plan to the Adjudicating Authority., The Committee of Creditors, which the appellants allege is in the nature of a free contracting party, is governed by the binding principles of the statute with regard to the contents and nature of the statutory plan that it approves under Section 30(4) and even its own composition., Section 30(4) provides that the consent of all the members of the Committee of Creditors, though a unanimous vote is not required, a sixty‑six percent vote is sufficient for approval of a Resolution Plan. The constitution of the Committee of Creditors is based on specific scenarios envisaged in the statute and accounts for varying compositions based on factors such as the nature and quantum of debt owed. For example, if it comprises operational creditors alone, the percentage of debt owed between operational and financial creditors and other variables impact voting thresholds among members of the Committee of Creditors. A sixty‑six percent vote of the Committee of Creditors is required to approve a Resolution Plan. The dissenting creditors are deemed to have given their approval and are bound by the decision of the majority of the Committee of Creditors. The dissenting creditors are bound as a result of the statutory provision and not because they have actually consented to be parties to such an arrangement., Other elements governing the Resolution Plan indicate that the entire process from initiation up to its acceptance by the Committee of Creditors takes place within the framework of the Insolvency and Bankruptcy Code. In addition, the Code provides penalties for non‑compliance with the Resolution Plan after its approval under Section 31 and forfeiture of the Performance Bank Guarantee for failing to implement the Resolution Plan or contributing to its failure. Violation of the terms of the Resolution Plan does not give rise to a claim of damages; rather it leads to prosecution and imposition of punishment under Section 74 of the Code. Conversely, a withdrawal of the Corporate Insolvency Resolution Process by the Committee of Creditors under Section 12A is coupled with a requirement of payment of CIRP costs, but no damages are statutorily payable to the Resolution Applicant, irrespective of the stage of the withdrawal., The Committee of Creditors, even with the requisite majority, while approving the Resolution Plan must consider the feasibility and viability of the plan and the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub‑section (1) of Section 53 of the Insolvency and Bankruptcy Code. The Committee of Creditors cannot approve a Resolution Plan proposed by an applicant barred under Section 29A of the Code. Regulation 37 and 38 of the CIRP Regulations govern the contents of a Resolution Plan. Furthermore, a Resolution Plan, if in compliance with the mandate of the Code, cannot be rejected by the Adjudicating Authority and becomes binding on its approval upon all stakeholders including the Central and State Governments, local authorities to whom statutory dues are owed, operational creditors who were not part of the Committee of Creditors, and the workforce of the Corporate Debtor who would now be governed by a new management., Such features of a Resolution Plan, where a statute extensively governs the form, mode, manner and effect of approval, distinguish it from a traditional contract, specifically in its ability to bind those who have not consented to it. In the pure contractual realm, an agreement binds parties who are privy to the contract. In the context of a Resolution Plan governed by the Insolvency and Bankruptcy Code, the element of privity becomes inapplicable once the Adjudicating Authority confirms the Resolution Plan under Section 31(1) and declares it to be binding on all stakeholders who are not part of the negotiation stage or parties to the Resolution Plan., In fact, a commentator has noted that the purpose of bankruptcy law is to solve a specific contracting failure that accompanies financial distress. Such a contracting failure arises because financial distress involves many parties with strategic bargaining incentives and numerous contingencies for the firm and its creditors to define a set of rules for every scenario. Thus, insolvency law recognizes that parties can benefit from such incomplete contracts to hold each other up for their individual gain. In an attempt to solve the issue of incompleteness and the hold‑up threat, the insolvency law provides procedural protections; the law puts in place guardrails that give the parties room to bargain while keeping them from taking positions that veer toward extreme hold‑up., It may be useful to refer to how the Supreme Court of India has analyzed instruments that are analogous to a Resolution Plan. In SK Gupta v. K.P. Jain, the Supreme Court of India, while discussing the nature of compromise or arrangements entered between a company and its creditors or members, observed that such a compromise or arrangement once sanctioned by the court is not merely an agreement between parties because it binds even dissenting creditors or members through statutory force. The Court observed: “The scheme when sanctioned does not merely operate as an agreement between the parties but has statutory force and is binding not only on the company but even dissenting creditors or members, as the case may be.”, The effect of the sanctioned scheme is to supply, by recourse to the procedure thereby prescribed, the absence of an individual agreement by every member of the class to be bound by the scheme which would otherwise be necessary to give it validity (see J.K. (Bombay) Pvt. Ltd. v. New Kaiser‑I Hind Spg. & Wvg. Co. Ltd., AIR 1970 SC 1041)., While the above observations were made in the context of a scheme that has been sanctioned by the court, the Resolution Plan even prior to the approval of the Adjudicating Authority is binding between the Committee of Creditors and the successful Resolution Applicant. The Resolution Plan cannot be construed purely as a contract governed by the Contract Act in the period intervening its acceptance by the Committee of Creditors and the approval of the Adjudicating Authority. Even at that stage, its binding effects are produced by the Insolvency and Bankruptcy Code framework., The BLRC Report mentions that when 75 % of the creditors agree on a revival plan, this plan would be binding on all the remaining creditors. The Report also mentions that the Resolution Professional submits a binding agreement to the Adjudicating Authority before the default maximum date. The statutory scheme of the Insolvency and Bankruptcy Code, as discussed in Sections I and J of this judgment, establishes that a Resolution Plan is binding between the Committee of Creditors and the successful Resolution Applicant. Thus, the ability of the Resolution Plan to bind those who have not consented to it by way of a statutory procedure indicates that it is not a typical contract., The BLRC Report, which furnished the first draft of the Insolvency and Bankruptcy Code and elaborated on the aims behind the overhaul of the insolvency regime, refers to a Committee of Creditors‑approved Resolution Plan as a binding contract in one instance and as a binding agreement in other instances. The Report also refers to a Committee of Creditors‑approved Resolution Plan as a financial arrangement, a revival plan, or a solution. The interchangeability of the terms agreement, contract, financial arrangement, revival plan and solution indicates that there is no clear intention of the BLRC in characterizing the nature of the Resolution Plan as a contract., The binding effect of the Resolution Plan prevents the Committee of Creditors or the Resolution Applicant from reneging on its terms after the plan has been approved by the Committee of Creditors through a voting mechanism. The fleeting mention of a binding contract on one occasion in the BLRC Report, which was a pre‑legislative text that underwent subsequent modifications by the Legislature, to indicate the binding nature of the Resolution Plan and the finality of negotiations once it is approved by the Committee of Creditors, does not establish the legal nature of the document, especially when it is not complemented by the text and design of the relevant provisions., Certain stages of the Corporate Insolvency Resolution Process resemble the stages involved in the formation of a contract. Echoes of the process involved in the formation of a contract resonate in the steps antecedent to the approval of a Resolution Plan such as: the issuance of a Request for Resolution Process may be equated to an invitation to offer; a Resolution Plan can be considered as a proposal or offer; and the approval by the Committee of Creditors may be similar to an acceptance of an offer., The terms of the Resolution Plan contain a commercial bargain between the Committee of Creditors and the Resolution Applicant. There is also an intention to create legal relations with binding effect. However, it is the structure of the Insolvency and Bankruptcy Code which confers legal force on the Committee of Creditors‑approved Resolution Plan. The validity of the Resolution Plan is not premised upon the agreement or consent of those bound (although as a procedural step the Code requires sixty‑six percent votes of creditors), but upon its compliance with the procedure stipulated under the Code., It was argued for the E‑RP that a Resolution Plan is a contract executed in furtherance of a statutory regime under the Insolvency and Bankruptcy Code. A question arises whether a Resolution Plan can be classified as a statutory contract. The Supreme Court of India has defined a statutory contract in India Thermal Power Ltd. v. State of Madhya Pradesh as follows: Section 43 empowers the Electricity Board to enter into an arrangement for purchase of electricity on such terms as may be agreed. Section 43‑A(1) provides that a generating company may enter into a contract for the sale of electricity generated by it with the Electricity Board. Regarding the determination of tariff for the sale of electricity by a generating company to the Board, Section 43(1)(2) provides that the tariff shall be determined in accordance with the norms regarding operation and plant‑load factor as may be laid down by the authority and in accordance with the rates of depreciation and reasonable return and such other factors as may be determined from time to time by the Central Government by a notification in the Official Gazette., These provisions clearly indicate that the agreement can be on such terms as may be agreed by the parties except that the tariff is to be determined in accordance with the provisions of Section 43‑A(2) and notifications issued thereunder. Merely because a contract is entered into in exercise of an enabling power conferred by a statute does not by itself render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditions is a must under the statute, then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions which are statutory, then the contract to that extent is statutory. A contract may contain other terms and conditions which are not of a statutory character and have been incorporated as a result of mutual agreement between the parties. Therefore, power purchase agreements can be regarded as statutory only to the extent that they contain provisions regarding determination of tariff and other statutory requirements of Section 43‑A(2)., The above observations were in the context of a power purchase agreement entered into under the provisions of the Electricity Supply Act, 1948. Section 43‑A(1) of the Act stipulated that the generating company may enter into a contract with the Electricity Board. Thus, the judgment presupposes the existence of a subsisting contract. The controversy in that case was whether the power purchase agreement could be characterized as a statutory contract. To say that a Resolution Plan is a statutory contract, we must first consider whether the Insolvency and Bankruptcy Code envisages the Committee of Creditors‑approved Resolution Plan as a contract. There is no provision under the Code referring to a Resolution Plan as a contract, unlike Section 43‑A(1) of the Electricity Supply Act, 1948 which mentions that a contract may be entered into between the concerned parties., The legal force of a Resolution Plan arises due to the framework provided under the Insolvency and Bankruptcy Code. The mechanisms of the Code provide sufficient guidance on the conduct of all participants in the process and the binding effect of the Committee of Creditors‑approved Resolution Plan is evidenced by the execution of a Performance Bank Guarantee furnished by the successful Resolution Applicant, in compliance with the CIRP Regulations. This Performance Bank Guarantee is returnable once the Adjudicating Authority approves the Resolution Plan under Section 31 and makes it binding on all stakeholders. Therefore, the Code and its regulations institute sufficient safeguards to ensure the binding effect of a Committee of Creditors‑approved Resolution Plan., In the discussion in Sections I and J below, we further elaborate on the nature of a Committee of Creditors‑approved Resolution Plan and the code of conduct permissible under the statutory framework., While insolvency regimes are specific to each jurisdiction, it may be useful to analyze how Resolution Plans or similar instruments are characterized in foreign jurisdictions., Certain precedents from other jurisdictions have been cited by Mr. Nakul Devan for the E‑RP to argue that contracts entered into in furtherance of a statutory regime have to be interpreted in accordance with the objective and intent of the concerned statute. It has been submitted that the Resolution Plan is one variety of such a statutory contract. However, since we have arrived at the decision that Resolution Plans are not statutory contracts, it is not required for us to analyze whether terms of the Resolution Plan can be given effect as terms of a contract, as long as they further the statutory objective., It is also important to note that India adopts a unique insolvency framework where third parties have the right to participate in an insolvency regime and acquire the Corporate Debtor as a going concern. In several jurisdictions, insolvency arrangements are between the debtor and the creditors, which more closely resemble repayment plans by corporate debtors as envisaged by the Insolvency and Bankruptcy Code under Section 105 and broadly prescribed under Chapter III, as opposed to resolution plans that are not proposed by debtors., In any event, an analysis of such arrangements is detailed below., In the United Kingdom, the Companies Act allows the directors, administrator or liquidator of a company to propose a company voluntary arrangement (CVA), similar to Section 10 of the Insolvency and Bankruptcy Code, which must be approved by creditors holding seventy‑five percent of the vote share. Section 5(2)(b) of the Companies Act provides that once the CVA is approved, the company and the creditors are bound by it. Professor Roy Goode, in his treatise Principles of Corporate Insolvency Law, observes that the wording of Section 5(2)(b) has led the courts to characterise the relationship between the parties to a CVA as essentially contractual in nature and its scope and effect are determined by its terms, which are interpreted by the ordinary principles of contractual interpretation., In some judgments of the Court of Appeal, English courts have held that a CVA creates a contractual obligation, is a statutory contract, or has a contractual effect and is subject to ordinary principles of interpretation applying to contracts. However, the position on this issue is not completely settled. In a recent decision of the High Court of Justice, it was held that the CVA is not a contract. The court observed: “Further, and as noted by Mr. Pymont QC in SHB Realisations Ltd, a voluntary arrangement is not formed or analysed as a contract. Certain legal principles applicable to contracts, for example their interpretation, are applied to voluntary arrangements; that is no less true of other instruments which are not contracts. Other principles of contract law, for example those relating to penalties, are not applicable to voluntary arrangements.” Mr. Pymont QC concluded that a voluntary arrangement is not a contract., In Singapore, under Section 210(3AA) and (3AB) of the Singapore Companies Act, a compromise or arrangement between the company and its creditors becomes binding when the requisite majority of creditors agree to it and it is approved by the court. The Singapore Court of Appeal has referred to such a scheme of arrangement as a contractual scheme. A controversy arose before the Singapore Court of Appeal on whether a scheme can be substantially amended after it has been approved by the court. The court observed that the answer depends on whether the scheme derives its efficacy from the order of the court or the statute. Under the English approach, a scheme approved by the majority of creditors derives its efficacy from the statute and is a statutory contract, limiting the court’s jurisdiction to make substantial alterations. However, the court noted that in Australia the scheme operates as an order of the court. The court held that its previous decision referring to a scheme of arrangement as a contractual scheme does not mean that in Singapore such schemes are considered statutory contracts. The court chose to follow the Australian approach, holding that a scheme takes effect as an order of the court and, like any other court order, can be altered in certain circumstances., In Australia, as noted above, the scheme of arrangement operates as a court order. The Supreme Court of New South Wales, rejecting the English approach of characterizing schemes (different from CVAs) as statutory contracts, observed that Australian authorities establish that an approved scheme derives its force from the court order, not from the antecedent resolutions of members and creditors., Under the United States Bankruptcy Code, a restructuring plan becomes binding once it is confirmed by the court under Section 1141. Decisions of United States bankruptcy courts indicate that such restructuring plans are characterized as contracts. It has been held that a confirmed plan is binding on the debtor and the plan proponent and has the same effect as a contract. However, commentators have noted that the United States Bankruptcy Code’s embrace of a contractual paradigm is somewhat inconsistent. Both bankruptcy courts and the Code itself are more sympathetic to ex post than to ex ante contracting. It has also been observed that a few provisions in the Bankruptcy Code invite parties to agree by contract and, in some contexts, the Code explicitly overrides ex ante contracts, including provisions overriding ipso facto clauses in pre‑bankruptcy contracts that stipulate that a necessary condition of default is filing of an insolvency or bankruptcy petition., The above discussion indicates that the law in other jurisdictions, irrespective of differing frameworks, is not completely settled on whether instruments akin to Resolution Plans are pure contracts. To recapitulate, in the United Kingdom, while schemes of arrangement are characterized as statutory contracts, the law on CVAs, which are similar to the insolvency process initiated under Section 10 of the Insolvency and Bankruptcy Code, is not clear, with the High Court of Justice noting that it is not a contract, even though principles of interpretation applicable to contracts may be used for constructing the language of such CVAs. In Singapore, the English approach of denoting schemes as statutory contracts was rejected and it was held that the schemes operate as orders of court. A similar position was taken under Australian law. The Singapore and Australian courts indicate that schemes are more than mere contracts, with a super‑added imprimatur by a court, and envisage an active role for the court in supervising the schemes, including making substantial alterations if required. In the United States, restructuring plans have been equated to contracts, but there has been some inconsistency in upholding the contractual bargain., The lack of an apparent international consensus on whether instruments like Committee of Creditors‑approved Resolution Plans are contracts prior to the court’s sanction is attributable to the peculiarity of the insolvency regime in each jurisdiction. The Supreme Court of India will have to be wary of transplanting international doctrines that are evolved as responses to the specific features of a jurisdiction’s insolvency regime without identifying an analogous framework in our insolvency regime., The absence of any specific provision in the Insolvency and Bankruptcy Code or the regulations referring to a Committee of Creditors‑approved Resolution Plan as a contract, and the lack of clarity in the BLRC Report regarding the nature of such a Resolution Plan, constrain us from concluding that Committee of Creditors‑approved Resolution Plans will be governed by the Contract Act and common law principles governing contracts, except for the specific prohibitions and deeming fictions under the Code. Regulation 39(3) of the CIRP regulations, as it stood before the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) (Fourth Amendment) Regulations 2020 and applicable to the three appellants before us, enabled a framework where a draft Resolution Plan would involve several rounds of negotiations and revisions between the Resolution Applicant and the Committee of Creditors before it is approved by the latter and submitted to the Adjudicating Authority. However, this statutorily‑enabled room for commercial negotiation is not enough to overpower...
|
id_1673
| 6
|
The Committee of Creditors (CoC) shall evaluate the resolution plans received under sub‑regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit. The committee shall record its deliberations on the feasibility and viability of each resolution plan and vote on all such resolution plans simultaneously. Where only one resolution plan is put to vote, it shall be considered approved if it receives the requisite votes. Where two or more resolution plans are put to vote simultaneously, the plan receiving the highest votes, but not less than the requisite votes, shall be considered approved. If two or more plans receive equal votes, the committee shall approve any one of them as per the tie‑breaker formula announced before voting. If none of the plans receives the requisite votes, the committee shall again vote on the plan that received the highest votes, subject to the timelines under the Code., CoC‑approved Resolution Plans are contracts. Before the approval of the Adjudicating Authority under Section 31, they are a function and product of the Insolvency and Bankruptcy Code (IBC) mechanisms. Their validity, nature, legal force and content are regulated by the procedure laid down under the IBC, not by the Indian Contract Act. The voting by the CoC occurs only after the resolution plan has verified the contents of the plan and confirmed that it meets the conditions of the IBC and the regulations therein., The amended Regulation 39(3) further regulates the conduct of the CoC on voting on resolution plans and has introduced the requirement of simultaneous voting. The IBBI’s Discussion Paper issued on 27 August 2021 invited comments on regulating the process of revisions that can be made to resolution plans submitted to the CoC. These developments bolster the conclusion that the mechanism prior to submission of a CoC‑approved resolution plan is subject to continuous procedural scrutiny by the IBC and cannot be considered a simple contractual negotiation between two parties., Section J below details how common‑law remedies of withdrawal or modification on account of frustration or force majeure are not applicable to CoC‑approved resolution plans owing to the nature of the IBC. Similarly, remedies such as liquidated and unliquidated damages, restitution, novation and frustration, unless specifically provided by the IBC, are not available., A Resolution Applicant, as a third party participating in the insolvency regime, seeks to acquire the business of the corporate debtor without assuming the entirety of its debts, statutory liabilities and certain third‑party transactions. These benefits arise from the coercive mechanisms of the IBC, which enable a third party to acquire the assets of a corporate debtor without its liabilities for a negotiated amount of the debt owed. Typically, resolution amounts envisage payment of a fraction of the debt owed to creditors, and the business is acquired as a going concern with its employees. The resolution plan is drafted to be implementable in the future and to bring about a quietus to the Corporate Insolvency Resolution Process (CIRP)., Enabling Resolution Applicants to seek remedies not specified by the IBC, by invoking the Contract Act, would be antithetical to the IBC’s insolvency regime. Elements of contractual interpretation may be relied upon to construe the language of the terms of the resolution plan in the event of a dispute, but not to re‑fashion the mechanism of the IBC altogether. The Supreme Court of India in Laxmi Pat Surana v. Union Bank of India held that the IBC is a self‑contained Code; therefore, importing principles of any other law or a statute like the Contract Act would introduce unnecessary complexity and may lead to protracted litigation., The CoC can forfeit the performance bank guarantee (PBG) furnished by the successful Resolution Applicant under certain circumstances in terms of the Resolution Framework for Resolution Plans (RFRP) and the resolution plan, including, inter alia, on the ground that the applicant has failed to implement the resolution or has contributed to its failure. Regulation 36B(4A) of the CIRP regulations provides for the furnishing of such performance security once the plan is approved by creditors. The regulations do not require the performance security to be a reasonable estimate of loss as under penalty clauses in contract law; rather, it should be of such nature, value, duration and source as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of the plan and the business of the corporate debtor., If the CoC enters into a settlement with the corporate debtor and withdraws from the CIRP under Section 12A, Regulation 30A provides for only payment of insolvency costs and not compensation or damages to the Resolution Applicant for investing time and money in the process. The parties may attempt to invoke principles of frustration or force majeure to evade implementation of the resolution plan, leading to unnecessary litigation. The Supreme Court of India in Amtek Auto (supra) curbed a similar attempt by a successful Resolution Applicant who relied on a force‑majeure clause to seek a direction compelling the CoC to negotiate a modification to its resolution plan. The Court held that there was no scope for negotiations once the plan has been approved by the CoC., The statutory framework governing the CIRP is time‑bound with the specific aim of maximising the value of assets. The IBC and the regulations made under it lay down strict timelines that must be adhered to at all stages. The CIRP is expected to be completed within 180 days under Section 12(1) of the IBC. An extension of up to 90 days may be sought from the Adjudicating Authority under Sections 12(2) and 12(3), and such an extension can be granted only once. In Arcelor Mittal (India) Ltd. v. Satish Kumar Gupta, the Supreme Court of India held that time taken in legal proceedings must be excluded from the 180‑day timeline. To prevent indefinite extension, the Insolvency and Bankruptcy Code (Amendment) Act 2019 inserted a second proviso to Section 12(3), stating that the CIRP must be completed within 330 days from the insolvency commencement date, including time taken in legal proceedings., The legislative amendment reflects the strong emphasis of the IBC on its timelines and its attempt to thwart stakeholders from engaging in multiple litigations solely to cause undue delay. Delays are a cause of concern because the liquidation value depletes rapidly, irrespective of the moratorium, and a delayed liquidation harms the value of the corporate debtor, the recovery rate of the CoC and the economy at large. In Essar Steel (supra), a three‑judge Bench of the Supreme Court of India emphasized the rationale of the 2019 amendment, noting that the original intent of quick resolution of stressed assets was being diluted and that time‑bound decisions are essential to reinstate this legislative intent., Regulation 40(c), which came into effect on 20 April 2020, was inserted in the CIRP Regulations to account for delays caused by the lockdown imposed due to the COVID‑19 pandemic. It provides that any delay in completing CIRP activities because of the lockdown will not be counted towards the statutory timeline. If the CIRP is not completed within the prescribed timeline, the corporate debtor is sent into liquidation. This evolution of the law underscores that contractual freedom to negotiate terms of the resolution plan with unfettered discretion is not grounded in the intent of the IBC., An application for initiation of CIRP may be filed by a financial creditor, an operational creditor or the corporate debtor itself under Sections 7, 9 and 10 of the IBC, respectively. Once admitted by the Adjudicating Authority, orders under Section 13(1) are passed: (i) declaration of a moratorium under Section 14; (ii) public announcement of the initiation of CIRP and call for submission of claims under Section 15; and (iii) appointment of an Interim Resolution Professional (IRP) in accordance with Section 16. Section 13(2) requires the public announcement to be made immediately after the appointment of the IRP, meaning not later than three days from the date of appointment as per the explanation to Regulation 6(1) of the CIRP Regulations., On receipt of claims from operational creditors, financial creditors, workmen and employees, the IRP prepares a list of creditors after verifying the claims. Regulation 13(1) mandates verification of all claims within seven days from the last date of receipt. The IRP then constitutes the CoC in accordance with Section 21(1) of the IBC and must submit a report certifying the constitution of the CoC within two days of verification (Regulation 17). The first meeting of the CoC must be held within seven days of filing the report. If the appointment of the Resolution Professional (RP) by the CoC is delayed, the IRP performs the functions of the RP from the fortieth day of the insolvency commencement date until the RP is appointed under Section 22., The CoC, in its first meeting, appoints the RP under Section 22(2) of the IBC. Section 23(1) provides that the RP is responsible for conducting the entire CIRP and managing the operations of the corporate debtor during the CIRP period. The RP continues to manage the debtor’s operations after the expiry of the CIRP until an order approving the resolution is passed by the Adjudicating Authority under Section 31(1) or a liquidator is appointed under Section 34. The powers and duties of the RP are listed under Section 23(2). The most important duty of the RP is to solicit resolution plans. The RP is empowered to invite prospective Resolution Applicants who fulfil the criteria laid down by the RP and approved by the CoC, considering the complexity and scale of the debtor’s business, to submit a resolution plan under Section 25(2)(h). A person is ineligible to be a Resolution Applicant under Section 29A. Section 5(25) defines a “resolution applicant” as a person who individually or jointly with any other person submits a resolution plan to the RP pursuant to the invitation made under clause (h) of sub‑section (2) of Section 25, or pursuant to Section 54K, as the case may be., The first step in soliciting a resolution plan is the preparation of an Information Memorandum (IM) containing relevant information as specified by the IBBI for formulating a resolution plan in accordance with Section 29(1) of the IBC. The contents of the IM are specified under Regulation 36(2) of the CIRP Regulations. Regulation 36(1) requires the RP to submit the IM to members of the CoC within two weeks of his appointment but not later than the fifty‑fourth day from the insolvency commencement date, whichever is earlier. The RP then issues an invitation for expression of interest (EOI) not later than the seventy‑fifth day from the insolvency commencement date (Regulation 36A). A prospective Resolution Applicant must submit an unconditional EOI within at least fifteen days from the date of invitation. The RP conducts due diligence of the applicant based on material available on record (Regulation 36A(8)). Within ten days of the last date for submission of EOIs, the RP issues a provisional list of eligible applicants to the CoC and all applicants. Objections to inclusion or exclusion must be made within five days of the list issuance, and the RP publishes a final list within ten days of the close of the objection period., Under Regulation 36B, the RP must issue the IM, evaluation matrix and the Resolution Framework for Resolution Plans (RFRP) to every prospective applicant on the provisional list and to any applicant who contested non‑inclusion, within five days of the provisional list issuance. The RFRP contains detailed steps of each process and the manner and purposes of interaction between the RP and the prospective applicant, along with corresponding timelines. A minimum of thirty days is given to the applicant to submit a resolution plan. Section 5(26) defines a “resolution plan” as a plan proposed by a resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II of the IBC, and clarifies that it may include provisions for restructuring, merger, amalgamation or demerger. The RP may extend the timeline for submission of resolution plans with the approval of the CoC. The RFRP requires the applicant to furnish a performance security, which shall be forfeited if, after approval of the plan by the Adjudicating Authority, the applicant fails to implement the plan or contributes to its failure. The performance security is defined as security of such nature, value, duration and source as may be specified in the request for resolution plans with the committee’s approval, having regard to the nature of the plan and the business of the corporate debtor. Regulations 37 and 38 list the mandatory contents of the resolution plan., Section 30(2) of the IBC requires the RP to examine each resolution plan to confirm that it: (a) provides for payment of insolvency resolution process costs in a manner specified by the Board, in priority to other debts; (b) provides for payment of operational creditors’ debts not less than the amount payable in liquidation under Section 53 or the amount that would have been paid if the plan’s distribution followed the priority order in Section 53(1), whichever is higher; (c) provides for payment of financial creditors who do not vote in favour of the plan, not less than the amount payable in liquidation under Section 53; (d) provides for management of the corporate debtor’s affairs after approval of the plan; (e) ensures implementation and supervision of the plan; (f) does not contravene any law in force; and (g) conforms to other requirements specified by the Board. Explanations clarify that the distribution must be fair and equitable, and that the provisions apply to the corporate insolvency resolution process even after the commencement of the Insolvency and Bankruptcy Code (Amendment) Act 2019, including pending appeals or legal proceedings., The CoC has wide powers under the IBC. It can direct the corporate debtor into liquidation at any time before approval by the Adjudicating Authority under Section 33(2). Under Section 12A, the Adjudicating Authority may allow withdrawal of the application submitted under Sections 7, 9 or 10 if the withdrawal is approved by ninety per cent of the voting share of the CoC. The Supreme Court of India in Maharashtra Seamless v. Padmanabhan Venkatesh observed that the exit route prescribed in Section 12A is not applicable to a Resolution Applicant; the provision applies only to applicants invoking Sections 7, 9 and 10 of the Code.
|
id_1673
| 7
|
The Supreme Court of India left the question of whether a successful Resolution Applicant altogether forfeits the right to withdraw from the Corporate Insolvency Resolution Process (CIRP) open for subsequent judicial determination. In terms of Regulation 39(4), the Resolution Professional (RP) shall endeavour to submit the Resolution Plan approved by the Committee of Creditors (CoC) before the Adjudicating Authority (AA) for its approval under Section 31 of the Insolvency and Bankruptcy Code (IBC), at least fifteen days before the maximum period for completion of the CIRP. Section 31(1) provides that the AA shall approve the Resolution Plan if it is satisfied that it complies with the requirements set out under Section 30(2) of the IBC. The AA functions as a check on the role of the RP to ensure compliance with Section 30(2) and to satisfy itself that the plan approved by the CoC can be effectively implemented as provided under the proviso to Section 31(1). Once the Resolution Plan is approved by the AA, it becomes binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan., Section 31 of the IBC reads: ‘Approval of resolution plan – (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the Committee of Creditors under subsection (4) of section 30 meets the requirements as referred to in subsection (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is owed, guarantors and other stakeholders involved in the resolution plan. Provided that the Adjudicating Authority shall, before passing an order for approval of the resolution plan, satisfy that the resolution plan has provisions for its effective implementation.’ (emphasis supplied)., A contravention of a Resolution Plan binding under Section 31 is punishable under Section 74(3) of the IBC, which provides: ‘Where the corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding under section 31, knowingly and wilfully contravenes any of the terms of such resolution plan or abets such contravention, such corporate debtor, officer, creditor or person shall be punishable with imprisonment of not less than one year, but may extend to five years, or with fine which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both.’, If the Resolution Plan is rejected by the AA, the corporate debtor goes into liquidation in accordance with Section 33(1) of the IBC. The order of the AA rejecting a Resolution Plan and directing liquidation under Section 33 can be appealed only on the grounds of material irregularity or fraud, as stipulated under Section 61(4) of the IBC. The order of the AA approving a Resolution Plan can be appealed before the National Company Law Appellate Tribunal (NCLAT) under Section 61(3) only on the grounds specified in that section. The grounds of appeal are: (i) the approved resolution plan is in contravention of any law for the time being in force; (ii) there has been material irregularity in the exercise of powers by the Resolution Professional during the CIRP; (iii) the debts owed to operational creditors have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. An appeal against a liquidation order passed under section 33, or sub‑section (4) of section 54L, or sub‑section (4) of section 54N, may be filed on grounds of material irregularity or fraud., Under Regulation 39(5) of the CIRP Regulations, the RP is required to send a copy of the order of the AA accepting or rejecting the Resolution Plan forthwith. Regulation 39(5A) specifies that within fifteen days of the date of the order of the AA approving the Resolution Plan, the RP must inform each claimant about the principle or formula for the payment of debts under the Resolution Plan., Section 12 of the IBC stipulates the timeline within which the CIRP is to be completed. The RP, on the instructions of the CoC, may make an application for extension of the CIRP. Regulation 40A of the CIRP Regulations provides a detailed model timeline for the CIRP, assuming the interim resolution professional is appointed on the date of commencement of the process and the time available is one hundred and eighty days. The timeline includes: commencement of CIRP and appointment of RP; public announcement inviting claims within three days of appointment; submission of claims for fourteen days; verification of claims within seven days of receipt; appointment of the authorised representative within two days of verification; first meeting of the CoC within seven days of filing the report; appointment of RP by the CoC in the first meeting; appointment of valuer within seven days of RP appointment; submission of application for withdrawal before issue of 30‑A; filing of withdrawal application by RP to AA within three days of CoC approval; formation of opinion on preferential transactions within seventy‑five days; determination of preferential transactions within one hundred fifteen days; filing of applications to AA for appropriate relief within one hundred thirty‑five days; submission of information memorandum within two weeks of RP appointment but not later than day fifty‑four; publication of Form G within seventy‑five days; invitation of expression of interest (EoI) and receipt of EoI; provisional and final lists of resolution applicants; issue of Request for Resolution Plan (RFRP) and receipt of resolution plans; submission of CoC‑approved resolution plan to AA; and approval of resolution plan by AA by day one hundred eighty., The statutory framework governing the CIRP seeks to create a mechanism for resolving insolvency in an efficient, comprehensive and timely manner. The IBC provides a detailed linear process for undertaking the CIRP of the corporate debtor to minimise delays, uncertainty and disputes. In Innoventive Industries Ltd v. ICICI Bank, a three‑judge bench of the Supreme Court of India observed that one of the important objectives of the Code is to bring insolvency law in India under a single unified umbrella with the object of speeding up the insolvency process. Recently, in Gujarat Urja v. State of Gujarat, the Supreme Court observed that a delay in completion of insolvency proceedings would diminish the value of the debtor’s assets and hamper the prospects of a successful reorganisation or liquidation. The IBC’s stipulated timelines and detailed procedure ensure timely completion of the CIRP and introduce transparency, certainty and predictability in the insolvency resolution process. The UNCITRAL Guide similarly states that insolvency law should be transparent and predictable to enable lenders and creditors to assess risk, promote stability in commercial relations and prevent disputes., The absence of a legislative hook or regulatory tether to enable a withdrawal by a successful Resolution Applicant is evident from the statutory framework. The process is creditor‑driven, aiming first to preserve the corporate debtor as a going concern, second to maximise asset value and creditor recovery, and third to ensure a swift transition to liquidation if the time‑bound CIRP fails. Settlements between the corporate debtor and the CoC may be in the best interests of stakeholders, but the IBC does not provide a withdrawal mechanism for the Resolution Applicant., Two‑judge benches of the Supreme Court in Lokhandwala Kataria Construction (P) Ltd v. Nisus Finance and Investment Managers LLP and Uttara Foods and Feeds (P) Ltd v. Mona Pharmachem, prior to the insertion of Section 12A, refused to exercise inherent powers of the AA under Rule 11 of the NCLT Rules 2016 or the power of parties to make applications under Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016. In Uttara Foods the Court granted one‑time relief under Article 142 of the Constitution after parties presented signed consent terms. The Insolvency Law Committee Report (March 2018) suggested a ninety‑percent voting threshold by the CoC for withdrawals of a CIRP and amendment of Rule 8 to enable such applications, leading to the insertion of Section 12A, which vested the CoC with the power to withdraw the CIRP or vote on such withdrawal if sought by the corporate debtor. No similar exit route was contemplated for the Resolution Applicant., Regulation 30A (effective 4 July 2018) stipulated that withdrawal under Section 12A could be allowed by submitting an application to the interim resolution professional (IRP) or RP before the invitation for expression of interest (EoI) was issued, with CoC consideration within seven days and approval requiring ninety‑percent voting share. In Brilliant Alloys (P) Ltd v. S. Rajagopal, a two‑judge bench held that Regulation 30A is directory, not mandatory, because Section 12A does not prescribe a deadline for withdrawal. Consequently, withdrawals could be permitted even after the EoI invitation. The IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations 2019 (effective 25 July 2019) reiterated this position, allowing withdrawals after the EoI invitation provided the applicant states justified reasons. The amendment also clarified that if the CoC is not yet constituted, a party may approach the AA, which may, in exercise of its inherent powers under Rule 11 of the NCLT Rules 2016, allow or reject an application for withdrawal or settlement., The Maharashtra Seamless case denied relief to a Resolution Applicant who sought to invoke Section 12A to rescind its Resolution Plan. The statute’s purpose is to protect the interests of creditors who seek to cut their losses through a CIRP. Equity or fairness doctrines that conflict with the statutory goals cannot be read into the IBC. While parties may negotiate commercial terms of a Resolution Plan, such negotiations are circumscribed by the governing statute, and a court cannot interpret the plan in a manner that hampers the IBC’s objectives of speedy, predictable and timely resolution. A Resolution Applicant, having examined the information memorandum and financial information of the corporate debtor, is assumed to have analysed the risks and submitted a considered proposal; it cannot demand powers that the legislature has omitted., In Essar Steel Ltd. v. Satish Kumar Gupta, a three‑judge bench affirmed a two‑judge decision in K. Sashidhar v. M/s. S. K. Industries, prohibiting the AA from second‑guessing the commercial wisdom of the parties or directing unilateral modification of Resolution Plans. These are binding precedents. Absent a clear legislative provision, the Court will not, by interpretation, confer on the AA a power to direct an unwilling CoC to renegotiate a submitted Resolution Plan or agree to its withdrawal at the behest of the Resolution Applicant. The AA may only direct the CoC to reconsider certain elements of the plan to ensure compliance with Section 30(2) before exercising its approval or rejection powers under Section 31., In Government of Andhra Pradesh v. P. Laxmi Devi, the Supreme Court observed that courts must be wary of transgressing into the domain of the legislature, especially in matters relating to economic and regulatory legislation. Judicial restraint is required because courts lack the expertise and authority to formulate economic policy, and detailed procedural mechanisms for withdrawal or modification by a successful Resolution Applicant should be left to the legislature., The rule of *casus omissus* holds that an omission in a statute cannot be supplied by judicial construction; otherwise, the court would be legislating. Justice G. P. Singh, in *Principles of Statutory Interpretation*, explains that words may be supplied only where they were accidentally omitted and where it is certain that Parliament would have inserted them. The IBC’s silence on withdrawal of a successful Resolution Applicant’s plan therefore indicates a legislative proscription of such a remedy., During the COVID‑19 pandemic, several Resolution Plans remained pending due to lockdowns. An Ordinance dated 5 June 2020 temporarily suspended initiation of CIRP for defaults arising between 25 March 2020 and six months thereafter, extendable by one year. The IBC (Second Amendment) Act 2020 (23 September 2020) provided a carve‑out for defaults arising during the suspended period. The IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations 2020 inserted Regulation 40C (effective 29 March 2020) to exclude lockdown‑related delays from the strict timeline. The IBC (Amendment) Ordinance 2021, effective 4 April 2021, introduced measures to preserve MSME businesses and fast‑track insolvency processes., Despite these amendments, no legislative relief has been provided to allow successful Resolution Applicants to withdraw or renegotiate their submitted Resolution Plans, even as many applicants have expressed a desire to do so due to the economic slowdown. The UNCITRAL Guide does not contain provisions for withdrawal of a submitted plan; it only discusses the possibility of amending a plan, leaving the decision to the legislature. The Guide states that if amendments are permitted, the legislature must lay down detailed steps for proposing amendments to a submitted Resolution Plan, and that the scope of negotiations between the Resolution Applicant and the CoC must be specifically envisaged by the statute.
|
id_1673
| 8
|
It mentions that an insolvency law may include limited provision for a plan to be modified after it has been approved by creditors (and both before and after confirmation) if its implementation breaks down or it is found to be incapable of performance, whether in whole or in part, and the specific problem can be remedied. If permitted by the statute, the recommendations strongly urge the establishment of a mechanism for amendment after approval by creditors which details requirements of, inter alia, approval by creditors of the modification and consequences of failure to secure approval to the amendments. The BLRC Report has relied on the UNCITRAL Guide while designing the IBC and it is a critical tool for ascertaining legislative choice and intent. Parliament has not introduced an explicit provision under the IBC for allowing any amendment of the Resolution Plan after approval of creditors, let alone a power to withdraw the plan. The insolvency law should permit amendment of a plan and specify the parties that may propose amendments and the time at which the plan may be amended, including between submission and approval, approval and confirmation, after confirmation and during implementation, where the proceedings remain open., The insolvency law should establish the mechanism for approval of amendments to a plan that has been approved by creditors. That mechanism should require notice to be given to the creditors and other parties affected by the proposed modification; specify the party required to give notice; require the approval of creditors and other parties affected by the modification; and require the rules for confirmation (where confirmation is required) to be satisfied. The insolvency law should also specify the consequences of failure to secure approval of proposed amendments. At the same time, the Corporate Debtor and the Committee of Creditors have been empowered to withdraw from the CIRP. If it intended to permit parties to amend the Resolution Plan after submission to the Adjudicating Authority, based on its specific terms of the Resolution Plan, it would have adopted the critical safeguards highlighted by the UNCITRAL. Terms of the Resolution Plan are not sufficient to effect withdrawals or modifications after its submission to the Adjudicating Authority., It has been contended by the three appellants that a Resolution Plan only becomes binding when it is approved by the Adjudicating Authority under Section 31(1) of the IBC. Further, since Section 74(3) of the IBC provides that a person can be prosecuted or punished for contravening the Resolution Plan only after its approval by the Adjudicating Authority, the successful Resolution Applicant is entitled to withdraw the Plan, on the terms of its contractual provisions, as long as it is not made binding under Section 31(1) of the IBC. We have held in Section H that a Committee of Creditors‑approved Resolution Plan is a creature of the IBC and cannot be construed as a pure contract between two consenting parties, prior to its approval under Section 31 of the IBC. In this section, independent of the above finding, we proceed to examine the contention that the terms of a Resolution Plan can reserve the right to modify or withdraw its contents after submission to the Adjudicating Authority., The approval of the Adjudicating Authority under Section 31(1) of the IBC has the effect of making the Resolution Plan binding on all stakeholders. These stakeholders include the employees of the corporate debtor whose terms of employment would be governed by the Resolution Plan, the Central and State Governments who would receive their tax dues on the basis of the terms of the Resolution Plan and local authorities to whom dues are owed. These stakeholders are not direct participants in the CIRP but are bound by its consequence by virtue of the approval of the Resolution Plan, under Section 31(1) of the IBC. Section 31(1) ensures that the Resolution Plan becomes binding on all stakeholders after it is approved by the Adjudicating Authority. The language of Section 31(1) cannot be construed to mean that a Resolution Plan is indeterminate or open to withdrawal or modification until it is approved by the Adjudicating Authority or that it is not binding between the Committee of Creditors and the successful Resolution Applicant., Regulation 39(4) of the CIRP Regulations mandates that the Resolution Applicant should endeavour to submit the Plan at least fifteen days before the statutory period of the CIRP under Section 12 is due to expire along with a receipt of a Performance Bank Guarantee and a compliance certificate as Form H. It is pertinent to note that Sub‑Section (3) to Section 12 mandates that the CIRP process, including legal proceedings, must be concluded within 330 days. This three‑hundred‑and‑thirty‑day period can be extended only in exceptional circumstances, if the process is at near conclusion and serves the object of the IBC, as held by a three‑judge Bench of the Supreme Court of India in Essar Steel. Therefore, after accounting for all statutorily envisaged delays which the Resolution Applicant has to explain in its Form H and otherwise through Regulation 40B, the procedure envisages a fifteen‑day window between submission of Resolution Plan and its approval or rejection by the Adjudicating Authority. This clearly indicates that the statute envisages a certain level of finality before the Resolution Plan is submitted for approval to the Adjudicating Authority. Even the Committee of Creditors is not permitted to approve multiple Resolution Plans or solicit Expressions of Interest after submission of a Resolution Plan to the Adjudicating Authority, which would possibly be contemplated if the Resolution Applicant was permitted to withdraw from, or modify, the Plan after acceptance by the Committee of Creditors. Regulation 36B(4A) requires the furnishing of a performance security which will be forfeited if a Resolution Applicant fails to implement the Plan. This is collected before the Adjudicating Authority approves the Plan. Notably, the regulations also direct forfeiture of the performance security in case the Resolution Applicant contributes to the failure of implementation, which could potentially include any attempts at withdrawal of the Plan., The report of the BLRC also notes that the negotiations in the CIRP must be time bound and it envisages that one of the ways in which the CIRP comes to a close is that the Resolution Applicant is able to obtain a binding agreement from the Committee of Creditors. Such a binding agreement is placed before the Adjudicating Authority, which orders the closure of the CIRP. If the Adjudicating Authority does not receive a binding agreement, it can send the Corporate Debtor into liquidation. The Committee agrees that it is critical for the Code to preserve the time value of the entity by ensuring that negotiations in the Insolvency Resolution Process are time bound. The Code states that the IRP has a default maximum time limit that is strictly adhered to, regardless of whether the creditors committee has identified a solution. The Committee also views that, if a solution can be identified within a shorter time frame, the process must accommodate closing the IRP in a shorter period. The Committee proposes that the IRP can come to a close in either of two ways: either the Resolution Applicant is able to get a binding agreement from the majority of the creditors committee or the calm period reaches the default maximum date set by the Adjudicator at the start of the IRP. If either condition is met, the Adjudicator will issue an order to close the IRP. However, the orders will vary depending upon the condition. If the Resolution Applicant submits a binding agreement to the Adjudicator before the default maximum date, then the Adjudicator orders the IRP case to be closed. If the Adjudicator does not receive a binding agreement by this date, the Adjudicator issues an order to close the IRP case along with an order to liquidate the entity., The binding nature, as between the Committee of Creditors and the successful Resolution Applicant, of the Resolution Plan submitted for approval by the Adjudicating Authority is further evidenced from the fact that the Committee of Creditors issues a Letter of Intent to a successful Resolution Applicant stating that it has been selected as the successful Resolution Applicant and its Plan would be submitted to the Adjudicating Authority for its approval. The successful Resolution Applicant is typically required to accept the Letter of Intent unconditionally and submit a Performance Bank Guarantee. Sequentially, the issuance of a Letter of Intent is followed by its unconditional acceptance by the successful Resolution Applicant. In Amtek Auto, this Supreme Court of India thwarted a similar attempt by a successful Resolution Applicant who had relied on certain open‑ended clauses in its Resolution Plan to seek a direction compelling the Committee of Creditors to negotiate a modification to its Resolution Plan. The Resolution Plan had been approved by the Adjudicating Authority and the Resolution Applicant’s interim application was not entertained. The Resolution Applicant had then sought to challenge the approval of the Resolution Plan under Section 61(3) of the IBC by seeking the same relief. This Court rejected the claim and observed that, to assert that there was any scope for negotiations and discussions after the approval of the resolution plan by the Committee of Creditors would be plainly contrary to the terms of the IBC., Regulation 38(3) mandates that a Resolution Plan be feasible, viable and implementable with specific timelines. A Resolution Plan whose implementation can be withdrawn at the behest of the successful Resolution Applicant is inherently unviable, since open‑ended clauses on modifications or withdrawal would mean that the Plan could fail at an undefined stage, be uncertain, including after approval by the Adjudicating Authority. It is inconsistent to postulate, on the one hand, that no withdrawal or modification is permitted after the approval by the Adjudicating Authority under Section 31, irrespective of the terms of the Resolution Plan; and on the other hand, to argue that the terms of the Resolution Plan relating to withdrawal or modification must be respected, in spite of the Committee of Creditors’ approval, but prior to the approval by the Adjudicating Authority. The former position follows from the intent, object and purpose of the IBC and from Section 31, and the latter is disavowed by the IBC’s structure and objective. The IBC does not envisage a dichotomy in the binding character of the Resolution Plan in relation to a Resolution Applicant between the stage of approval by the Committee of Creditors and the approval of the Adjudicating Authority. The binding nature of a Resolution Plan on a Resolution Applicant, who is the proponent of the Plan which has been accepted by the Committee of Creditors, cannot remain indeterminate at the discretion of the Resolution Applicant. The negotiations between the Resolution Applicant and the Committee of Creditors are brought to an end after the Committee’s approval. The only conditionality that remains is the approval of the Adjudicating Authority, which has a limited jurisdiction to confirm or deny the legal validity of the Resolution Plan in terms of Section 30(2) of the IBC. If the requirements of Section 30(2) are satisfied, the Adjudicating Authority shall confirm the Plan approved by the Committee of Creditors under Section 31(1) of the IBC., If the appellants’ claim were to succeed, a clause enabling a Resolution Applicant to withdraw or seek modification for reasons such as a Material Adverse Event could also be set up by a Resolution Applicant when it is being prosecuted under Section 74(3). It was contended before us that Form H, which is a compliance certificate that is to be submitted by the Resolution Applicant to the Adjudicating Authority along with the Resolution Plan, mentions that the Resolution Applicant can enter details as to whether the Resolution Plan is subject to any conditions under Clause 12. Thus, the argument goes that this permits the Resolution Applicant to stipulate in the Resolution Plan certain contingencies under which it can withdraw the Plan, for instance if there is an occurrence of a Material Adverse Event. A form is subservient to the statute. The conditions contemplated in Form H could be those which do not strike at the root of the IBC. They can include commercial conditions and business arrangements with the Committee of Creditors. However, conditions for withdrawal or renegotiation of the Resolution Plan cannot pass the test of viability and implementability as they would make the resolution process indeterminate and unpredictable. A two‑judge Bench of the Supreme Court of India, while discussing the jurisdiction of the Adjudicating Authority under Section 31 to evaluate a Resolution Plan, has observed that the Resolution Plan should be an overall credible plan, capable of achieving timelines specified in the Code generally, assuring successful revival of the corporate debtor and disavowing endless speculation. Section 30(2)(d) of the IBC and Regulation 38 of the CIRP Regulations also provide that the Resolution Plan should be implementable. In the absence of specific statutory language allowing for withdrawals or even modifications by the successful Resolution Applicant, it would be difficult to imply the existence of such an option based on the terms of the Resolution Plan, irrespective of, and especially when they do not form a part of Clause 12 in Form H, as is the case in all the three Resolution Plans that are in dispute in this present appeal., The Insolvency and Bankruptcy Law Committee in its report released in March 2018 noted that many conditional Resolution Plans were being approved by the Adjudicating Authority on account of the uncertainty on statutory clearances, such as by the Competition Commission of India, and the approval by the Adjudicating Authority was being regarded as a single window approval. This was in contravention of the intent of the IBC. Regulation 37(1) of the CIRP Regulations states that a resolution plan shall provide for obtaining necessary approvals from the Central and State Governments and other authorities. However, the timeline within which such approvals are required to be obtained, once a resolution plan has been approved by the NCLT, has not been provided in the Code or the CIRP Regulations. The Committee deliberated that as the onus to obtain the final approval would be on the successful resolution applicant as per the resolution plan itself, the Code should specify that the timeline will be as specified in the relevant law, and if the timeline for approval under the relevant law is less than one year from the approval of the resolution plan, then a maximum of one year will be provided for obtaining the relevant approvals, and Section 31 shall be amended to reflect this. Further, the Committee noted that there is no provision in the Code on the requirement to obtain an indication on the stance of the concerned regulators or authorities, if required, on the resolution plan prior to the resolution plan being approved by the NCLT. It was brought to the attention of the Committee that this was resulting in several conditional resolution plans being approved by the NCLT, and that the approval by the NCLT was being regarded as a single window approval. This not being the intent of the Code, the Committee deliberated on introduction of a mechanism for obtaining preliminary observations from the concerned regulators and authorities in relation to a resolution plan approved by the Committee of Creditors and submitted to the NCLT for its approval, but prior to the NCLT’s approval., The Insolvency and Bankruptcy Law Committee in its report dated February 2020 stated that the current practice of obtaining governmental approvals after the approval of the Resolution Plan has created an uncertainty about the implementation of the Resolution Plan. The committee suggested that this uncertainty can be mitigated if amendments are made to the IBC to provide that once the Resolution Plan is approved by the Committee of Creditors, it will be shared with the governmental and regulatory authorities, for approvals that are necessary for running the business of the Corporate Debtor. If no objections are raised within forty‑five days, it would be deemed that they have granted an approval. If objections are raised or conditional approvals are granted, the Resolution Applicant should attempt to clear the objections or meet the conditions before placing the Resolution Plan before the Adjudicating Authority. This Plan would thereafter be placed before the Adjudicating Authority for its approval. The committee further suggested that this timeline of forty‑five days should be excluded from calculating the timelines under Section 12 of the IBC. To enable approvals or no‑objections to be taken within the scheme of the Code, the Committee decided that amendments should be made to the Code such that once a resolution plan is approved by the Committee of Creditors, it should be sent to all concerned government and regulatory authorities whose approvals are core to the continued running of the business of the corporate debtor, for their approvals or objections. If they do not raise their objections within forty‑five days, they will be deemed to have no objections. This plan would then be placed before the Adjudicating Authority for its approval. If the government and regulatory agencies raise any objections or grant conditional approvals, the resolution applicant can attempt to clear the objections or meet the conditions for approval before placing the plan for the approval of the Adjudicating Authority, where this can be done within the time limit provided under Section 12. However, where this is not possible, the plan may still be placed before the Adjudicating Authority for its approval, and the successful resolution applicant should clear the objections or comply with the conditions for approval within a period of one year from the approval of the resolution plan. The Committee recommended that the window of forty‑five days given to government and regulatory agencies should be excluded from the computation of the time limit under Section 12 of the Code. Although some members of the Committee were of the view that this timeline should ideally run concurrently with the CIRP period, the Committee felt that this exclusion would be justified since it would streamline the process of gaining government approvals considerably, which would lead to more value‑maximising resolutions, offsetting value lost, if any, in this forty‑five day period in which the corporate debtor will be run as a going concern. The aim to tighten timelines for receiving regulatory approvals through the provision of in‑principle approvals, prior to the approval of the Adjudicating Authority, indicates that the statutory framework under the IBC has consistently attempted to avoid situations which may introduce unpredictability in the insolvency resolution process and has sought to make the process as linear as it can be. Further, the recommendations made in the Insolvency Law Committee Report of February 2020 indicate that the aim is to ensure that the Resolution Plan placed before the Adjudicating Authority should reach a certain finality, even in the context of governmental approvals. A conditionality which allows for further negotiations, modification or withdrawal, once the Resolution Plan is approved by the Committee of Creditors would only derail the time‑bound process envisaged under the IBC., Regulation 40A envisages a model‑timeline for the CIRP. Any deviation from this timeline needs to be specifically explained by the Resolution Applicant in Clause 10 of Form H. Regulation 40B imposes a time‑limit on the Resolution Applicant for filing the requisite forms at different stages of the CIRP, including forms seeking extensions on account of delays at any stage. The failure to file these forms within the stipulated deadline results in disciplinary action against the Resolution Applicant by the IBBI. Further, as discussed in Section I of the judgement, various mandatory timelines have been imposed for undertaking specific actions under the CIRP. If the legislature intended to allow withdrawals or subsequent negotiations by successful Resolution Applicants, it would have prescribed specific timelines for the exercise of such an option. The recognition of a power of withdrawal or modification after submission of a Committee of Creditors‑approved Resolution Plan, by judicial interpretation, will have the effect of disturbing the statutory timelines and delaying the CIRP, leading to a depletion in the value of the assets of a Corporate Debtor in the event of a potential liquidation. Hence, it is best left to the wisdom of the legislature, based on the experiences gained from the working of the enactment, to decide whether the option of modification or withdrawal at the behest of the Resolution Applicant should be permitted after submission to the Adjudicating Authority; if so, the conditions and the safeguards in which it can be allowed and the statutory procedure to be adopted for its exercise., Based on the plain terms of the statute, the Adjudicating Authority lacks the authority to allow the withdrawal or modification of the Resolution Plan by a successful Resolution Applicant or to give effect to any such clauses in the Resolution Plan. Unlike Section 18(3)(b) of the erstwhile SICA which vested the Board for Industrial and Financial Reconstruction with the power to make modifications to a draft scheme for sick industrial companies, the Adjudicating Authority under Section 31(2) of the IBC can only examine the validity of the plan on the anvil of the grounds stipulated in Section 30(2) and either approve or reject the plan. The Adjudicating Authority cannot compel a Committee of Creditors to negotiate further with a successful Resolution Applicant. A rejection by the Adjudicating Authority is followed by a direction of mandatory liquidation under Section 33. Section 30(2) does not envisage setting aside of the Resolution Plan because the Resolution Applicant is unwilling to execute it, based on terms of its own Resolution Plan., Further, no such power can be vested with the Adjudicating Authority under its residuary jurisdiction in terms of Section 60(5)(c). In a decision of a three‑judge Bench of the Supreme Court of India in Gujarat Urja, it was held that the NCLT’s residuary jurisdiction, though wide, is nonetheless defined by the text of the IBC. Specifically, the NCLT cannot do what the IBC consciously did not provide it the power to do. The court observed that this Court must adopt an interpretation of the NCLT’s residuary jurisdiction which comports with the broader goals of the IBC. The effect of allowing the Adjudicating Authority to permit withdrawals of resolution plans that are submitted to it would be to confer it with a power that is not envisaged by the IBC and defeat the objectives of the statute, which seeks a timely and predictable insolvency resolution of Corporate Debtors., After the amendment to Section 12 in 2019 which mandated a 330‑day outer‑limit for conclusion of the CIRP (which can be breached only under exceptional circumstances as held in Essar Steel), it would be antithetical to the purpose of the IBC to allow the Adjudicating Authority to use its plenary powers under Section 60(5)(c) to potentially extend these timelines to enable the Committee of Creditors to either issue a fresh Request for Fresh Resolution Plan if the Resolution Plan is withdrawn by a successful Resolution Applicant or direct further negotiations with the Resolution Applicant who is seeking a modification of the plan, whose failure could result in withdrawal as well. The likely consequence of a withdrawal by a successful Resolution Applicant after going through the stages of the CIRP for nearly 180 days (provided all statutory timelines have been strictly followed) would inevitably be a delayed liquidation after the value of the assets has further depreciated. In the event of intervening delays on account of litigation or otherwise, the delay would be even more severe. If a Committee of Creditors could be compelled by the Adjudicating Authority to negotiate with the successful Resolution Applicant, it would have to resign itself to a commercial bargain at a much lower value. If Parliament intended to permit such withdrawals or modifications sought by successful Resolution Applicants as being beneficial to economic policy, which it has sought to pursue while enacting the IBC, it would have prescribed timelines for setting the clock‑back or directing immediate liquidation if the withdrawals occur after a certain period. For instance, under Regulation 36B(5) any modification to the Request for Fresh Resolution Plan or the evaluation matrix is deemed as a fresh issue of the Request for Fresh Resolution Plan and the timeline for submission of Resolution Plan starts afresh. Parliament has not legislated to provide for the eventuality argued by the appellants., Permitting the Adjudicating Authority to exercise its residuary powers under Section 60(5) to allow for further modifications or withdrawals at the behest of the successful Resolution Applicant would be in the teeth of the decision of the Supreme Court of India in Essar Steel which held that Section 60(5)(c) cannot be used to whittle down Section 31(1) of the IBC, by the investment of some discretionary or equity jurisdiction in the Adjudicating Authority outside Section 30(2) of the Code, when it comes to a resolution plan being adjudicated upon by the Adjudicating Authority., We have held in Section H of this judgement that Resolution Plans are not in the nature of a traditional contract per se, and the process leading up to their formulation and acceptance by the Committee of Creditors is comprehensively regulated by the insolvency framework. In Section J, we have further held that the IBC framework does not enable withdrawals or modifications of Resolution Plans, once they have been submitted by the Resolution Applicant to the Adjudicating Authority after their approval by the Committee of Creditors. In any event, and without affecting the legal position formulated above, we will also deal with the submissions of the parties that the contractual terms of their respective Resolution Plans enabled withdrawal or renegotiation of terms. We will be undertaking an analysis on whether the individual Resolution Applicants before us had specifically negotiated with the respective Committee of Creditors for a right of modification or withdrawal and are contractually entitled to the same in the present case., The Ebix Appeal. Before we begin our analysis on the factual matrix pertaining to Ebix’s Appeal, we must deal with the preliminary issue alleged by the respondents during the course of the Ebix Appeal – whether the Third Withdrawal Application by Ebix was barred by res judicata; while this will not have a bearing on the final outcome of the appeal, we shall analyze it briefly., Res Judicata. To begin our inquiry, it is important to first consider the contours of the principle of res judicata. In Indian law, the principle has been recognized in Section 11 of the Code of Civil Procedure, 1908. Section 11, in so far as is relevant, reads as follows: “Res judicata. No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. Explanation IV. Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. Explanation V. Any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purposes of this section, be deemed to have been refused.”, In Satyadhyan Ghosal v. Deorajin Debi, a three‑judge Bench of the Supreme Court of India, speaking through Justice K.C. Das Gupta, explained the doctrine of res judicata in the following terms: “The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter whether on a question of fact or a question of law has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again.”
|
id_1673
| 9
|
The principle of res judicata is embodied in relation to suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct. From the above extract, it is clear that while res judicata may have been codified in Section 11, that does not bar its application to other judicial proceedings, such as the one in the present case., The reliefs sought by Ebix in the First, Second and Third Withdrawal Applications are as follows. In the First Withdrawal Application, Ebix sought (i) a direction to the Learned Resolution Professional to supply a copy of the Special Investigation Audit to the Resolution Applicant forthwith; (ii) a direction to the Learned Resolution Professional to supply a copy of the Certificates under Sections 43, 45, 50 and 66 of the Insolvency and Bankruptcy Code, 2016 to the Resolution Professional forthwith; (iii) to withhold approval of the Resolution Plan sanctioned by the Committee of Creditors of the Corporate Debtor, as filed before the National Company Law Appellate Tribunal on 11 April 2018, pending detailed consideration by the Resolution Applicant; and (iv) to allow the Resolution Applicant to withdraw the Resolution Plan dated 19 February 2018 (along with the Addendum/Financial Proposal dated 21 February 2019) submitted by it and approved by the Committee of Creditors, to refund the Earnest Money Deposit of Rs 2,00,00,000 furnished by the Resolution Applicant in respect of the Resolution Plan, and to grant the Resolution Applicant sufficient time to reevaluate its proposals contained in the Resolution Plan and suitably revise, modify or withdraw it., In the Second and Third Withdrawal Applications, Ebix sought (i) to allow the Resolution Applicant to withdraw the Resolution Plan dated 19 February 2018 (along with the Addendum/Financial Proposal dated 21 February 2019) submitted by it and approved by the Committee of Creditors; (ii) to direct the Learned Resolution Professional and/or Educomp Solutions Limited and the Committee of Creditors to refund the Earnest Money Deposit of Rs 2,00,00,000 furnished by the Resolution Applicant in respect of the Resolution Plan; and (iii) to withhold approval of the Resolution Plan sanctioned by the Committee of Creditors of the Corporate Debtor, as filed before the National Company Law Appellate Tribunal on 07 March 2018, pending detailed consideration by the Resolution Applicant., From the above table, it is clear that the prayers in the Second and Third Withdrawal Applications were identical. Prayer (iii) of both corresponds to prayer (iii) of the First Withdrawal Application in almost identical terms, while prayer (ii) was not present in the First Withdrawal Application at all. At the same time, prayers (i) and (ii) in the First Withdrawal Application have not been repeated in the Second and Third Withdrawal Applications. The issue is prayer (iv) of the First Withdrawal Application and prayer (i) of the Second and Third Withdrawal Applications. Through the former, Ebix sought permission to reevaluate its Resolution Plan and to suitably revise, modify or withdraw it, while through the latter, Ebix sought permission to withdraw its Resolution Plan. The question is whether this would attract the principle of res judicata., In a judgment of the Supreme Court of India in Sheodan Singh v. Daryao Kunwar, a four‑judge Bench elaborated the conditions which must be satisfied before the doctrine of res judicata can apply. Justice K.N. Wanchoo, speaking for the Court, held that a plain reading of Section 11 shows that to constitute a matter res judicata, the following conditions must be satisfied: (i) the matter directly and substantially in issue in the subsequent suit must be the same matter which was directly and substantially in issue in the former suit; (ii) the former suit must have been between the same parties or between parties under whom they or any of them claim; (iii) the parties must have litigated under the same title in the former suit; (iv) the court which decided the former suit must be a court competent to try the subsequent suit; and (v) the matter directly and substantially in issue in the subsequent suit must have been heard and finally decided by the court in the first suit., In the present case, condition (i) is not in dispute since the parties were the same. Regarding condition (ii), in the First Withdrawal Application the prayer was to enable Ebix to reevaluate its proposals and to revise, modify and also withdraw its Resolution Plan. A prayer for withdrawal of the Resolution Plan was raised in the Second and Third Withdrawal Applications. Conditions (iii) and (iv) are also not in issue. What remains to be assessed is compliance with condition (v), i.e., whether Ebix’s prayer in the First Withdrawal Application was in fact heard and finally decided., While dismissing the First Withdrawal Application, the National Company Law Tribunal held: 'This is an application filed by Ebix Singapore Ptd. Limited seeking reevaluation of the Resolution Plan submitted by it before the Resolution Professional. No ground for considering the prayer sought in the application is made out. The application is dismissed as such.' The order dismissed the First Withdrawal Application in a summary manner and did not make mention of the prayer to revise, modify or withdraw the Resolution Plan, referring only to its reevaluation., The meaning of the phrase 'heard and finally decided' was considered by a two‑judge Bench of the Supreme Court of India in Krishan Lal v. State of J&K, where it was held that the matter must have been heard on merits to be considered heard and finally decided. Justice B.L. Hansaria, speaking for the Court, emphasized that without a decision on merits, the principle of res judicata does not apply., In Daryao v. State of Uttar Pradesh, a Constitution Bench of the Supreme Court held that orders dismissing writ petitions in limine will not constitute res judicata. Justice P.B. Gajendragadkar, speaking for the Court, observed that a summary dismissal without a speaking order cannot be treated as creating a bar of res judicata because the factors weighing on the Court’s mind are not ascertainable., Another two‑judge Bench of the Supreme Court, in Erach Boman Khavar v. Tukaram Shridhar Bhat, held that the doctrine of res judicata can only apply when there has been a conscious adjudication of the issue on merits. Justice Dipak Misra, speaking for the Court, stated that a plea of res judicata cannot be taken aid of unless there is an expression of an opinion on the merits., Res judicata cannot apply solely because the issue has previously come before the court; the doctrine will apply where the issue has been heard and finally decided on merits through a conscious adjudication. In the present case, the National Company Law Tribunal’s order dismissing the First Withdrawal Application considered only the part of prayer (iv) relating to reevaluation of the Resolution Plan, possibly because Ebix had hoped to reevaluate the plan on the basis of information sought in prayers (i) and (ii), which were rejected., In the impugned judgment, the National Company Law Appellate Tribunal relied upon Explanation (V) to Section 11 to state that since withdrawal was also prayed for as a relief in prayer (iv) of the First Withdrawal Application, it would be assumed to have been rejected. Mulla’s The Code of Civil Procedure states that Explanation V can apply only when (i) the relief claimed is substantial and not merely auxiliary, and (ii) the relief claimed is one which the court is bound to grant, not discretionary., In Jaswant Singh v. Custodian of Evacuee Property, a two‑judge Bench of the Supreme Court held that res judicata will apply only if the cause of action is the same and the party had an earlier opportunity to obtain the relief now sought. The test is whether the claim in the subsequent proceeding is founded upon the same cause of action that was the foundation of the former proceeding., The prayer for withdrawal of the Resolution Plan in the First Withdrawal Application was not substantial and not one that the court was bound to grant, since it was contingent upon a reevaluation that depended on information sought in prayers (i) and (ii). Because those contingencies never arose, the National Company Law Tribunal did not adjudicate the withdrawal prayer on its merits. The Second Withdrawal Application was dismissed on a technical ground, and the revised Third Withdrawal Application was adjudicated on its merits and allowed. Therefore, the Third Withdrawal Application was not barred by res judicata., To briefly recount the relevant facts for determination of the dispute over the terms of the Resolution Plan, the Corporate Insolvency Resolution Process of Educomp commenced on 30 May 2017. After consultation with the Committee of Creditors, the Resolution Professional invited Expressions of Interest on 18 October 2017. The Resolution Framework for Resolution Process (RFRP) was issued on 5 December 2017 and revised on 17 January 2018 and 20 January 2018. Ebix submitted its draft Resolution Plan after the last date of 27 January 2018, and after securing an extension from the Adjudicating Authority, on 29 January 2018., Ebix took the benefit of the extension of time to submit its Resolution Plan; without it, submission would not have been permitted. After multiple rounds of negotiations, on 9 February 2018 Ebix was declared the successful Resolution Applicant and a Letter of Intent was issued by the Committee of Creditors. On 17 February 2018 Ebix’s Resolution Plan was approved by a 74.16 per cent voting share of the Committee of Creditors, which was subsequently upgraded to 75.35 per cent by the Committee of Standby Entities (CSEB) vote being added belatedly on 23 February 2018. All parties proceeded on the notion that the Resolution Plan had been approved by the requisite majority of seventy‑five per cent of the voting share of the Committee of Creditors, as required at that time., The Approval Application for the Resolution Plan was filed before the National Company Law Tribunal on the basis that the Plan had been duly approved by the requisite majority of the Committee of Creditors. No objections were raised on the ground that the seventy‑five per cent threshold was not met. The Resolution Plan dated 19 February 2018 and the addendum dated 21 February 2018, for a total bid amount of Rs 400 crore, were submitted by the Resolution Professional to the Adjudicating Authority for approval on 7 March 2018., Due to intervening applications for investigation into the accounts of Educomp (no internal special audit has been conducted to date), Ebix filed the First Withdrawal Application on 5 July 2019, on account of a delay in approval of seventeen months. Thereafter, it filed the Second and Third Withdrawal Applications., Ebix has alleged before the Supreme Court of India that it is entitled to withdraw its Resolution Plan by relying on (i) the terms of the RFRP, which indicate that the Resolution Plan is binding on the Resolution Applicant only after approval by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code; (ii) the terms of the Resolution Plan, which indicate that the Plan was valid for six months; and (iii) the principles of contract law to invoke frustration on account of fraud and erosion of the commercial substratum., Clause 1.8.3 of the RFRP provides that a Resolution Plan once made or submitted must be valid for a period not less than six months from the Resolution Plan Submission Date, including any revisions. If the Resolution Professional extends the Submission Date, the validity period is deemed to be six months from the revised date. Clause 7 of Ebix’s Resolution Plan states: 'This Resolution Plan proposed by the Resolution Applicant is valid for a term of six months from the date of submission of this plan.' Ebix argues that these matching terms of the offer (the RFRP) and the acceptance (the Resolution Plan) are binding on the Committee of Creditors and that the Resolution Plan is voidable and revocable at the instance of Ebix upon failure to obtain timely approval under Section 31., This submission cannot be accepted because the terms of the RFRP or the Resolution Plan relate to the validity of the Resolution Plan for the period of negotiation with the Committee of Creditors and not for a period after the Resolution Plan is submitted for approval by the Adjudicating Authority. The time taken before the Adjudicating Authority acts is imponderable and cannot be prescribed. Clause 1.3.7 of the RFRP states that there is no timeline for approval by the National Company Law Tribunal, and parties cannot impose a condition on a judicial authority to accept or reject a plan within a specified period., Clause 1.9.3 of the RFRP required Ebix to replace its Earnest Money Deposit with a Performance Bank Guarantee equivalent to ten per cent of the Resolution Plan value if it were declared the successful Resolution Applicant. Clause 1.9.5 allows invocation of the Performance Bank Guarantee if the Resolution Applicant fails to implement the Resolution Plan. Clause 1.8.4 states that a Resolution Plan submitted by a Resolution Respondent shall be irrevocable. Clause 1.10(l) provides that a successful Resolution Applicant shall remain responsible for implementation and shall not be permitted to withdraw the Resolution Plan., The Resolution Professional’s obligation under Section 29 of the Insolvency and Bankruptcy Code is to provide an information memorandum containing relevant information to the Resolution Applicant. Clause 1.3.2 of the RFRP directs prospective Resolution Applicants to conduct their own due diligence by accessing the data room. Clause 1.13.6 similarly requires independent investigations and analysis. Ebix was therefore responsible for conducting its own due diligence and could not rely on lack of information to revise or withdraw its approved Resolution Plan., Section 32A of the Insolvency and Bankruptcy Code grants immunity to the corporate debtor for offences committed prior to the commencement of the Corporate Insolvency Resolution Process. The corporate debtor shall not be prosecuted for such offences from the date the Resolution Plan is approved by the Adjudicating Authority under Section 31, provided the plan results in a change of management or control to a person who was not a promoter, manager, or related party, and who is not suspected of abetting the offence., No clause of Ebix’s own Resolution Plan provides a right to revise or withdraw the plan after its approval by the Committee of Creditors but before confirmation by the Adjudicating Authority. Clause 9.1 permits withdrawal only if the Resolution Plan is not approved in its entirety by the National Company Law Tribunal, and Clause 9.7 allows amendment for implementation only with a seventy‑five per cent vote of the Committee of Creditors. Consequently, Ebix did not have any contractual right to revise or withdraw the plan., The First Withdrawal Application was filed on 10 September 2019, more than one year after the alleged expiry of the six‑month validity period. Even if the submitted Resolution Plan were considered a qualified offer that would expire after six months of submission, the terms did not enable withdrawal in the event that the Adjudicating Authority did not approve the plan within six months under Section 31., Appearing on behalf of Ebix, Mr. K.V. Vishwanathan argued before the Supreme Court of India that the Resolution Professional failed in its duties under Section 29 of the Insolvency and Bankruptcy Code by not informing Ebix about the ongoing investigations against Educomp. While this argument was made to justify Ebix’s withdrawal of its Resolution Plan, which has been rejected, the National Company Law Appellate Tribunal’s counsel, Mr. Nakul Dewan, contended that the obligation to provide information under Section 29 must be understood on a best‑effort basis., Section 29 of the Insolvency and Bankruptcy Code places a duty upon the Resolution Professional to provide an information memorandum to the Resolution Applicant containing information that may be relevant for drafting the Resolution Plan.
|
id_1673
| 10
|
Preparation of information memorandum. The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Insolvency and Bankruptcy Board of India for formulating a resolution plan. The resolution professional shall provide to the resolution applicant access to all relevant information in physical and electronic form, provided such resolution applicant undertakes (a) to comply with provisions of law for the time being in force relating to confidentiality and insider trading; (b) to protect any intellectual property of the corporate debtor it may have access to; and (c) not to share relevant information with third parties unless clauses (a) and (b) of this sub‑section are complied with. For the purposes of this section, relevant information means the information required by the resolution applicant to make the resolution plan for the corporate debtor, which shall include the financial position of the corporate debtor, all information related to disputes by or against the corporate debtor and any other matter pertaining to the corporate debtor as may be specified., The BLRC Report elucidates the duties of the Resolution Professional. The Resolution Professional must provide the most updated information about the entity as accurately as is reasonably possible to solution providers. To do this, the Resolution Professional has to be able to verify claims to liabilities as well as the assets disclosed by the entity. The Resolution Professional has the power to appoint whatever outside resources are required to carry out this task, including accounting and consulting services. The information collected on the entity is used to compile an information memorandum, which is signed off by the debtor and the creditors committee, based on which solutions can be offered to resolve the insolvency. The information memorandum must be made available to potential financiers within a reasonable period of time from the Resolution Professional’s appointment to the Insolvency Resolution Process. If the information is not comprehensive, the Resolution Professional must issue the information memorandum with the degree of completeness that she is willing to certify. The memorandum must clearly state the expected shortfall in the coverage of the liabilities and assets of the entity, including assets and liabilities that can be ascertained and verified from the accounts, the information system records, the liabilities submitted at the start of the Insolvency Resolution Process, or any other source as may be specified by the regulator., Once the information memorandum is created, the Resolution Professional must make sure that it is readily available to anyone interested in bidding a solution for the Insolvency Resolution Process. She has to inform the market (a) that she is the Resolution Professional in charge of the case; (b) about a transparent mechanism through which interested third parties can access the information memorandum; (c) about the time frame within which possible solutions must be presented; and (d) about a channel through which solutions can be submitted for evaluation. The Insolvency and Bankruptcy Code does not specify the details of the manner or mechanism in which this should be done, but emphasizes that it must be done in a time‑bound manner and be accessible to all possible interested parties., Similarly, the UNCITRAL Guide notes the duties and functions of the insolvency representative, including obtaining information concerning the debtor, its assets, liabilities and past transactions (especially those taking place during the suspect period), and examining the debtor and any third person having had dealings with the debtor., Under the Insolvency and Bankruptcy Code, the Resolution Professional has a duty to collect as much information about the corporate debtor as is accurately possible. When such information is communicated through an information memorandum to the resolution applicant, the Resolution Professional must clarify when the information is not comprehensive and what factors may cause a change., In the present case, Ebix alleged that the Resolution Professional did not inform it of the financial investigations into the conduct of Educomp in a timely fashion. The relevant dates are: 5 December 2017 – the Resolution Professional provided Virtual Data Room access to Ebix and other prospective resolution applicants in relation to Educomp, and the final Revised Final Resolution Plan was issued; 7 March 2018 – the Resolution Professional filed the Approval Application before the National Company Law Tribunal in relation to Ebix’s resolution plan, after its approval by the Committee of Creditors; 3 April 2018 and 26 April 2018 – two articles were published in The Wire concerning financial mismanagement of Educomp; 4 May 2018 – the Insolvency Financial Creditor application came before the National Company Law Tribunal, filed by a financial creditor of Educomp seeking investigation of the affairs/transactions, and the Resolution Professional was directed to file its reply and the Insolvency Financial Creditor was directed to serve a notice on Ebix; 12 June 2019 – Educomp made regulatory disclosures to the Bombay Stock Exchange and the National Stock Exchange in relation to ongoing investigations by the Serious Fraud Investigation Office and the Central Bureau of Investigation; 5 July 2019 – Ebix filed the First Withdrawal Application., Ebix cannot dispute that the Resolution Professional had provided it the relevant information required under Section 29 to formulate its resolution plan. The issues concerning financial investigations into Educomp arose after the two articles were published by The Wire, which was after the Approval Application had been filed by the Resolution Professional. Ebix was aware of all the proceedings before the National Company Law Tribunal since the various applications were often listed along with the Approval Application. No record was produced to prove that the Resolution Professional knew of the Serious Fraud Investigation Office and Central Bureau of Investigation investigations before Educomp’s regulatory disclosure. Hence, it cannot be stated that the Resolution Professional faltered in its duty to provide relevant information to Ebix., The Kundan Care Appeal – The Corporate Insolvency Resolution Process of Astonfield commenced on 27 November 2018. On 1 May 2019, Gujarat Urja Vikas Nigam Limited issued a default notice under Article 9.3.1(e) of the Power Purchase Agreement, taking the initiation of the CIRP as an event of default for termination of the PPA. The National Company Law Tribunal set aside the default notice on 29 August 2019 on the ground that termination of the PPA would adversely affect the going concern status of Astonfield. The National Company Law Appellate Tribunal dismissed an appeal filed by Gujarat Urja Vikas Nigam Limited on 15 October 2019. Kundan Care submitted a resolution plan for consideration by the Committee of Creditors on 29 October 2019, followed by a final version on 12 November 2019. The resolution plan was approved by the Committee of Creditors on 14 November 2019 with a vote of 99.28 per cent. A Letter of Award was issued by the Resolution Professional to Kundan Care on 15 November 2019, and the resolution plan was submitted to the National Company Law Tribunal for approval under Section 31 of the Insolvency and Bankruptcy Code., On 27 November 2019, Gujarat Urja Vikas Nigam Limited moved the Supreme Court of India in appeal against the order of the National Company Law Appellate Tribunal dated 15 October 2019 (the Supreme Court of India eventually dismissed the appeal). During the pendency of the appeal, the appellant moved an application before the National Company Law Tribunal for withdrawal of its resolution plan and for return of its Performance Bank Guarantee. In view of the pendency of the appeal before the Supreme Court of India, the National Company Law Tribunal deferred consideration of the resolution plan till the disposal of the appeal. On the request of Kundan Care, the Insolvency Resolution Process application was listed for hearing and dismissed on 3 July 2020 for want of jurisdiction to enable withdrawals. This decision of the National Company Law Tribunal was confirmed by the National Company Law Appellate Tribunal on 30 September 2020. While Kundan Care’s appeal against this decision of the National Company Law Appellate Tribunal was pending before the Supreme Court of India, the Gujarat Urja Vikas Nigam Limited decision was rendered by the Supreme Court of India on 8 March 2021., Kundan Care initially relied on Clause 5.1 of the Insolvency Resolution Process resolution plan to argue that it reserved the right to modify or withdraw its submitted resolution plan in the event of a material adverse change affecting Astonfield. Clause 5.1 provides that the preparation of the resolution plan is based on the information memorandum provided to the resolution applicant by the Resolution Professional, and if at any time before or after submission the information on which the plan is based changes, or a material adverse change occurs, the resolution applicant shall have the right to reconsider, revise or withdraw the resolution plan or make a fresh submission at its sole discretion. The Resolution Professional pointed out to the Supreme Court of India that the Letter of Intent awarded to Kundan Care clearly stipulated that the submitted resolution plan is irrevocable and there were no conditionalities mentioned in Form H submitted to the Adjudicating Authority. Clause 9 of Kundan Care’s resolution plan confirms this position. Clause 1.6.2 of the Revised Final Resolution Plan issued by the Resolution Professional indicated that the Committee of Creditors may reject a resolution plan if it does not agree with any of the conditions precedent in the nature of walk‑away conditions. Clause 1.6.2 states that the Committee of Creditors reserves the right to reject the resolution plan if any of the conditions precedent, as defined in Format VA – Resolution Plan, are not acceptable to the Committee of Creditors. Such conditions must be specifically mentioned with a conspicuous heading and placed in a consolidated paragraph. This indicates that the condition of a material adverse event could be exercised only while the Committee of Creditors was considering the resolution plan, and not after it had been submitted to the Adjudicating Authority., During the hearing of the present appeal, Kundan Care filed additional documents. On 5 July 2021, Kundan Care communicated to Export‑Import Bank of India and Punjab National Bank (formerly PFCL) seeking a revision or renegotiation of the resolution amount for the resolution of Astonfield. Export‑Import Bank of India responded on 12 July 2021, stating that a meeting was held by the lenders on 9 July 2021 on a without‑prejudice basis to address the issues raised by Kundan Care. The lenders were prima facie agreeable to deliberate the financial proposal seeking revision in the resolution plan amount in the Committee of Creditors convened by the Resolution Professional, following the directions of the Supreme Court of India and the processes laid down by the Insolvency and Bankruptcy Code. A joint request was made by senior counsel for Kundan Care and senior counsel for the Committee of Creditors that, in view of the letter dated 12 July 2021 issued by the lenders who are members of the Committee of Creditors, the appellant may be permitted to withdraw Civil Appeal 3560/2020 with liberty to the resolution applicant and the Committee of Creditors to file the revised plan before the National Company Law Tribunal through the Resolution Professional for approval. The Committee of Creditors shall convene and decide on the revised plan within one week and the National Company Law Tribunal shall dispose of the matter within two weeks upon receiving an information affidavit from the Resolution Professional for approval of the revised plan., The Supreme Court of India has been informed that Export‑Import Bank of India and Punjab National Bank represent 98 per cent of the financial creditors of Astonfield. In view of the agreement reached, the Supreme Court of India deems it appropriate to exercise its jurisdiction under Article 142 of the Constitution of India for a one‑time relief and directs that: (i) the Committee of Creditors shall convene and decide on the proposal submitted by Kundan Care on 5 July 2021 and the response by Export‑Import Bank of India and Punjab National Bank dated 12 July 2021; (ii) if a revised resolution plan is agreed upon by the Committee of Creditors, it shall be submitted through the Resolution Professional for approval of the National Company Law Tribunal within a week thereafter, and if no revised plan is agreed, the original resolution plan submitted on 15 November 2019 shall prevail; and (iii) the National Company Law Tribunal shall dispose of the application with the revised resolution plan expeditiously, preferably within two weeks from the receipt of an application from the Resolution Professional for approval of the revised resolution plan., The Supreme Court of India clarifies that the above directions have been issued in view of the submission urged, and shall not amount to any finding by the Supreme Court of India on the issues raised with regard to modification or withdrawal of resolution plans at the behest of the resolution applicant., The Seroco Appeal – The Corporate Insolvency Resolution Process of Arya Filaments, a micro, small and medium enterprise, was instituted on 17 August 2018. Seroco submitted a draft resolution plan on 13 March 2019 for an amount of Rs 6.79 crores (approx.). After meetings with the Committee of Creditors and revisions, Seroco’s plan was approved by the Committee of Creditors on 10 May 2019. The Resolution Professional filed the resolution plan for approval before the National Company Law Tribunal on 15 May 2019, and Form H was filed by the Resolution Professional on 5 June 2020., Seroco addressed a letter to the Resolution Professional and the Committee of Creditors on 9 June 2020 seeking a modification of the resolution plan and the resolution amount to Rs 5.29 crores (approx.) on account of the economic slowdown caused by the COVID‑19 pandemic, and subsequently filed applications before the National Company Law Tribunal and an appeal before the National Company Law Appellate Tribunal seeking a modification of the resolution plan on account of the original being filed over eighteen months ago., Seroco relied on the terms of its resolution plan, which envisaged payment to the Committee of Creditors by sale of land, building, and old or spare plant and machinery, arguing that there had been a frustration of contract because the economic slowdown impacted the value of these assets. The proposed revised solution envisaged a further haircut to the Committee of Creditors where Rs 1.5 crores less would be paid over an extended timeline. No terms in the resolution plan or Form H submitted by the Resolution Professional could provide such a benefit to Seroco. Clause 19(vii) of the resolution plan provides that the preliminary approval of the resolution plan by the Committee of Creditors is binding on Seroco, stating that the preliminary approval is the prerogative of the Committee of Creditors and the final approval lies with the Hon’ble Adjudicating Authority, i.e., the National Company Law Tribunal, and that the decision of the Committee of Creditors and the National Company Law Tribunal will be final and binding. Consequently, common law remedies under the Contract Act are not available because a submitted resolution plan is not a contract that can be voided on account of frustration, force majeure, or similar instances. Parties can only seek reliefs specifically envisaged in the Insolvency and Bankruptcy Code., Conclusion – The Supreme Court of India is cognizant that the extraordinary circumstance of the COVID‑19 pandemic has significantly impacted the businesses of corporate debtors and successful resolution applicants whose plans may not have been sanctioned by the Adjudicating Authority in time. However, the legislative intent of the Insolvency and Bankruptcy Code cannot be overridden by the court to render outcomes that could have grave economic implications and affect the viability of the Code., The residual powers of the Adjudicating Authority under the Insolvency and Bankruptcy Code cannot be exercised to create procedural remedies that have substantive outcomes on the insolvency process. The framework only enables withdrawals from the Corporate Insolvency Resolution Process by following the procedure detailed in Section 12A of the Code and Regulation 30A of the CIRP Regulations and in the situations recognized in those provisions. Allowing withdrawals or modifications of a resolution plan at the behest of the successful resolution applicant after it has been submitted to the Adjudicating Authority, despite compliance with procedural requirements and timelines, would create an unregulated tier of negotiations. Since the 330‑day outer limit of the CIRP under Section 12(3) of the Code, including judicial proceedings, can be extended only in exceptional circumstances, such open‑ended negotiations would adversely affect the corporate debtor, its creditors, and the economy as the liquidation value depletes over time. A failed negotiation for modification after submission, or a withdrawal after approval by the Committee of Creditors and submission to the Adjudicating Authority, could result in a downgraded resolution amount or a delayed liquidation with depreciated assets, frustrating the core aim of the Code., If the legislature wishes to recognize withdrawals or modifications to a resolution plan after it has been submitted to the Adjudicating Authority, it must specifically provide for such provisions in the Code and/or the Regulations, including narrowly defined grounds, procedural timelines, voting requirements, and thresholds for approval by the Committee of Creditors, as well as provisions for when the corporate debtor may be sent into liquidation in the event of a failed negotiation., In the present framework, even if an impermissible understanding of equity is imported through residual powers or the terms of the resolution plan are interpreted to enable the appellants’ desired course of action, it remains unclear whether a withdrawal of a Committee of Creditors‑approved resolution plan at a later stage would result in the Adjudicating Authority directing mandatory liquidation of the corporate debtor. Section 33(1)(b) of the Code provides for liquidation when the Adjudicating Authority rejects a resolution plan under Section 31. Accordingly, the existing insolvency framework in India provides no scope for further modifications or withdrawals of Committee of Creditors‑approved resolution plans at the behest of the successful resolution applicant once the plan has been submitted to the Adjudicating Authority. A resolution applicant, after obtaining financial information of the corporate debtor through informational utilities and perusing the information memorandum, is assumed to have analyzed the risks and submitted a considered proposal. A submitted resolution plan is binding and irrevocable between the Committee of Creditors and the successful resolution applicant under the provisions of the Code and the CIRP Regulations. In the Kundan Care case, since both the resolution applicant and the Committee of Creditors requested modification of the resolution plan because of uncertainty over the Power Purchase Agreement, cleared by the ruling of the Supreme Court of India in Gujarat Urja, a one‑time relief under Article 142 of the Constitution is provided with the conditions prescribed in Section K.2., It is also sobering to recognize that while the Supreme Court of India has declared that the law does not enable a withdrawal or modification by a successful resolution applicant after submission to the Adjudicating Authority, long delays in approving the resolution plan affect its implementation. Systemic and frequent delays impact the commercial assessment undertaken by the parties during negotiations. The thirty‑second report of the Ministry of Corporate Affairs Standing Committee on Finance (2020‑2021) on the Implementation of the Insolvency and Bankruptcy Code – Pitfalls and Solutions highlighted that more than seventy‑one per cent of cases were pending for over 180 days, deviating from the original objective and timeline for the CIRP. Delays were attributed to the National Company Law Tribunal taking considerable time in admitting CIRPs, late and unsolicited bids by resolution applicants after the original bidder becomes public, and multiplicity of litigation and appellate processes to the National Company Law Appellate Tribunal and the Supreme Court. Such delays cause commercial uncertainty, degradation in the value of the corporate debtor, and make the insolvency process inefficient and expensive. The National Company Law Tribunal and the National Company Law Appellate Tribunal are urged to be sensitive to the effect of such delays and to adhere strictly to the timelines stipulated under the Code, clearing pending resolution plans forthwith. Judicial delay was a major reason for the failure of the insolvency regime prior to the Code, and the present regime must not meet the same fate., In light of the above, the appeals preferred by Ebix (Civil Appeal 3224 of 2020) and Seroco (Civil Appeal 295 of 2021) stand dismissed. The parties to the appeal preferred by Kundan Care (Civil Appeal 3560 of 2020) shall abide by the directions issued by the Supreme Court of India in exercise of its Article 142 powers as a one‑time relief, as specified in paragraph 196 (Section K.2) of this judgment., Pending applications, if any, shall stand disposed of.
|
id_1674
| 0
|
Case: Writ Petition No. 1348 of 2024. Petitioner: Smt. Nikita alias Najrana and Another. Respondent: State of Uttar Pradesh and three others. Counsel for Petitioner: Sanjay Kumar Srivastava. Counsel for Respondent: Chief Standing Counsel Honourable Kshitij Shailendra, Judge., Heard Shri Sanjay Kumar Srivastava, learned counsel for the petitioners, and Yogesh Kumar, learned Standing Counsel for the State respondents., By means of the present writ petition, the petitioners have prayed for a writ of mandamus commanding respondents two and three to provide adequate security to the petitioners and further restraining the respondents from causing any interference in the peaceful living of the petitioners as husband and wife., Learned Standing Counsel points out that petitioner No. 1 earlier belonged to the Muslim religion and petitioner No. 2 belongs to the Hindu religion and, in view of the provisions of the Uttar Pradesh Prohibition of Unlawful Conversion of Religion Act, 2021, unless compliance with the provisions of Sections 8 and 9 is made by parties belonging to different religions, no sanctity or validity can be attached to such marriage., The Act of 2021 was enacted with the following object: ‘An Act to provide for prohibition of unlawful conversion from one religion to another by misrepresentation, force, undue influence, coercion, allurement or by any fraudulent means of by marriage and for the matters connected therewith or incidental thereto.’, Section 3 of the Act prohibits conversion from one religion to another by misrepresentation, force, fraud, undue influence, coercion or allurement. For the purpose of the present case, the explanation attached to sub‑section (1) of Section 3 has significance and is reproduced for ready reference: ‘3. Prohibition of conversion from one religion to another religion by misrepresentation, force, fraud, undue influence, coercion or allurement— (1) No person shall convert or attempt to convert, either directly or otherwise, any other person from one religion to another by use or practice of misrepresentation, force, fraud, undue influence, coercion or allurement or by any fraudulent means. No person shall abet, convince or conspire such conversion. Explanation—For the purposes of this sub‑section conversion by solemnisation of marriage or relationship in the nature of marriage on account of factors enumerated in this sub‑section shall be deemed included.’, Section 6 of the Act renders a marriage performed for the sole purpose of unlawful conversion or vice‑versa as void; however, the proviso attached to the said section speaks of the applicability of the provisions of Sections 8 and 9 as regards such marriages. For convenience, Section 6 is extracted as follows: ‘6. Marriage done for sole purpose of unlawful conversion or vice‑versa to be declared void—Any marriage done for sole purpose of unlawful conversion or vice‑versa by the man of one religion with the woman of another religion, either by converting himself or herself before or after marriage, or by converting the woman before or after marriage, shall be declared void by the Family Court or, where the Family Court is not established, the appropriate court having jurisdiction to try such case on a petition presented by either party against the other party of the marriage: Provided that all the provisions of Sections 8 and 9 shall apply for such marriages to be solemnised.’, From the scheme of the Act of 2021, conversion from one religion to another is not impermissible. Rather, Sections 8 and 9 of the Act deal with the provisions for a valid conversion and its effect., Section 8 – Declaration before conversion of religion and pre‑report about conversion: (1) A person who desires to convert his or her religion shall give a declaration in the form prescribed in Schedule‑I at least sixty days in advance to the District Magistrate or the Additional District Magistrate specially authorised by the District Magistrate, stating that he wishes to convert his or her religion on his or her own free consent and without any force, coercion, undue influence or allurement. (2) The religious convertor who performs the conversion ceremony shall give one month’s advance notice in the form prescribed in Schedule‑II to the District Magistrate or any other officer not below the rank of Additional District Magistrate appointed for that purpose, of the district where such ceremony is proposed to be performed. (3) The District Magistrate, after receiving the information under subsections (1) and (2), shall cause an enquiry to be conducted through police with regard to the real intention, purpose and cause of the proposed religious conversion. (4) Contravention of sub‑section (1) and/or sub‑section (2) shall have the effect of rendering the proposed conversion illegal and void. (5) Whoever contravenes the provisions of sub‑section (1) shall be punished with imprisonment for a term not less than six months, which may extend to three years, and shall also be liable to a fine not less than rupees ten thousand., Section 9 – Declaration post conversion of religion: (1) The converted person shall send a declaration in the form prescribed in Schedule‑III within sixty days of the date of conversion to the District Magistrate of the district in which the converted person ordinarily resides. (2) The District Magistrate shall exhibit a copy of the declaration on the notice board of the office till the date of confirmation. (3) The declaration shall contain requisite details such as date of birth, permanent address, present place of residence, father’s or husband’s name, the religion originally belonged to, the religion to which he or she has converted, the date and place of conversion and the nature of the process undergone. (4) The converted individual shall appear before the District Magistrate within twenty‑one days from the date of sending or filing the declaration to establish his or her identity and confirm the contents of the declaration. (5) The District Magistrate shall record the factum of declaration and confirmation in a register maintained for this purpose. If any objections are notified, he may record the name and particulars of objectors and the nature of objection. (6) Certified copies of the declaration, confirmation and extracts from the register shall be furnished to the parties who gave the declaration upon request to their authorised legal representative. (7) Contravention of sub‑sections (1) to (4) shall have the effect of rendering the conversion illegal and void., Learned counsel for the petitioners submits that a conversion certificate was issued in the year 2017 whereas the aforesaid Act came into existence in 2021 and, therefore, the provisions of Sections 8 and 9 of the Act, 2021, would not be applicable., The Court has perused Annexure‑2 to the writ petition, which is a copy of the conversion certificate issued by an Arya Samaj Mandir., It is now necessary to give reference to certain judicial pronouncements on purposive interpretation of a statute., Jurisprudence of statutory interpretation has moved from literal interpretation to purposive interpretation, which advances the purpose and object of legislation. The Supreme Court, in a series of judgments, has dealt with the issue of literal versus purposive interpretation., The Apex Court, in Central India Spinning and Weaving Manufacturing Company versus Municipal Committee, Wardha, All India Reporter 1958 Supreme Court 341, held that it is a recognised principle of construction that general words and phrases, however wide and comprehensive they may be in their literal sense, must usually be construed as being limited to the actual objects of the Act. The Supreme Court, in Girdhari Lal & Sons versus Balbir Nath Mathur, 1986 (2) Supreme Court Cases 237, held that the primary and foremost task of a Court in interpreting a statute is to ascertain the intention of the legislature, actual or imputed. Having ascertained the intention, the Court must then strive to interpret the statute so as to promote and advance the object and purpose of the enactment. For this purpose, where necessary the Court may depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well justified in departing from the so‑called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing the written word if necessary. The Court observed that ascertainment of legislative intent is a basic rule of statutory construction and that a rule of construction should be preferred which advances the purpose and object of legislation. Though a construction according to plain language should ordinarily be adopted, such a construction should not be adopted where it leads to anomalies, injustices or absurdities, vide K.P. Varghese v. ITO, (1981) 4 Supreme Court Cases 173, State Bank of Travancore v. Mohammad M. Khan, (1981) 4 Supreme Court Cases 82, Som Prakash Rekhi v. Union of India, (1981) 1 Supreme Court Cases 449, Ravula Subba Rao v. Commissioner of Income Tax, All India Reporter 1956 Supreme Court 604, Govindlal V Agricultural Produce Market Committee, (1975) 2 Supreme Court Cases 482 and Babaji Kondaji v. Nasik Merchants Co‑op Bank Ltd., (1984) 2 Supreme Court Cases 50., The Supreme Court, in Utkal Contractors & Joinery Private Limited versus State of Orissa, 1987 (3) Supreme Court 279, observed that a statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from the reason for it. External aids include the Statement of Objects and Reasons when the Bill is presented to Parliament, reports of Committees which preceded the Bill and reports of Parliamentary Committees. Internal aids are the Preamble, the scheme and the provisions of the Act. No provision in the statute and no word of the statute may be construed in isolation. Every provision and every word must be looked at generally before any provision or word is attempted to be construed., The same view has been reiterated in S. Gopal Reddy versus State of Andhra Pradesh, (1996) 4 Supreme Court 596; Prakash Kumar alias Prakash Bhutto versus State of Gujarat, (2005) 2 Supreme Court 409; Anwar Hasan Khan versus Mohammad Shafi and others, (2001) 8 Supreme Court 540; Union of India and others versus Filip Tiago De Gama of Vedem Vasco De Gama, (1990) 1 Supreme Court 277; Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd., (1987) 1 Supreme Court 424 (All India Reporter 1987 Supreme Court 1023); and N. K. Jain v. C. K. Shah, (1991) 2 Supreme Court., In the present case, as per the writ petition itself, the alleged marriage between the petitioners was performed on 2 January 2024, by which date the aforesaid Act of 2021 had come into existence. Therefore, before the date of marriage, the petitioners should have complied with the provisions of the Act if they wanted to attach sanctity or legality to the conversion, which is now controlled and governed by the enactment passed by the Uttar Pradesh Legislature., The scheme of the Act envisages that if conversion is done in relation to marriage of persons belonging to different religions, irrespective of any past event which might or might not attach sanctity to conversion, in case a marriage is solemnised after the Act of 2021 has come into force, i.e., after 27 November 2020 as per Section 1(3) of the Act, the parties have to ensure compliance with Sections 8 and 9 of the Act. In such an event, conversion, if any, done in the past may be a relevant fact during the enquiry conducted by the District Magistrate under Sections 8 and 9, subject to the satisfaction of the District Magistrate, but it cannot be a substantive proof of a valid conversion to attach sanctity to a marriage performed after the Act came into force. Therefore, the submission of learned counsel for the petitioners that, since the Act came into force in 2020‑21 but conversion was done in 2017 at an Arya Samaj Mandir and therefore no fresh conversion is required, is not acceptable and is hereby discarded., In view of the above, this writ petition stands disposed of with liberty to the petitioners to file a fresh petition after ensuring compliance with Sections 8 and 9 of the Uttar Pradesh Prohibition of Unlawful Conversion of Religion Act, 2021.
|
id_1677
| 0
|
Date of Decision: 17th October 2023 FAO 264/2023 and CM APPL. Nos. 52896/2023, 52898/2023. Through: Dr. A.M. Singhvi, Senior Advocate with Ms. Warisha Farasat, Mr. Shadan Farasat, Mr. Amit Bhandari, Mr. Vivek Jain, Mr. Prashant Manchanda, Mr. Aman, Mr. Vivek Jain, Ms. Hrishika Jain and Mr. Honey Kumbhat, Advocates. Versus Through: Mr. Vikramjit Banerjee, Additional Solicitor General with Mr. Sandeep Mahapatra, Standing Counsel with Ms. Mrinmayee Sahu Mahapatra, Mr. Sugam Kumar Jha, Ms. Kritika Sharma, Mr. Harsh Raj, Mr. Megha Saxena, Ms. Osheen Verma, Ms. Akansha, Mr. Raghav Tandon, Ms. Anu Priya, Mr. Tribhuvan, Mr. Siddhartha Singh, Mr. Prashant Rawat and Mr. N. Chamwibo Zeliang, Advocates with Ms. Saraswati Saraf, Executive Officer., By way of the present appeal filed under Order XLIII Rule 1(a) and (w) of the Code of Civil Procedure, 1908, the appellant impugns the order dated 05 October 2023 passed by the Additional District Judge, Patiala House Courts, New Delhi in Civil Suit No. 151/2023 titled Raghav Chadha versus Rajya Sabha Secretariat, whereby the learned Trial Court recalled the order dated 18 April 2023, thereby vacating an ad‑interim order granted in favour of the appellant and returning the plaint for presentation after compliance with Section 80(1) of the Code of Civil Procedure., The impugned order dated 05 October 2023 was passed on a review application filed by the respondent under Order XLVII Rule 1 of the Code of Civil Procedure, seeking review of the order dated 18 April 2023 by which the learned Trial Court, on an application under Order XXXIX Rules 1 and 2, granted the appellant ad‑interim protection against dispossession from Bungalow No. AB‑5, Pandara Road, New Delhi, without due process of law. By the order dated 18 April 2023, the learned Trial Court also issued notice to the respondent on an application filed by the appellant under Section 80(2) of the Code of Civil Procedure., A brief conspectus of the relevant factual matrix is as follows. The appellant was allotted Bungalow No. AB‑5, Pandara Road, New Delhi as official accommodation in his capacity as a Member of the Rajya Sabha. The bungalow is a Type‑VII accommodation allotted in exchange for Bungalow No. C‑1/12, Pandara Park, New Delhi, which was a Type‑VI accommodation. The allotment was made by letter dated 08 September 2022 by the Rajya Sabha, upon a representation dated 29 August 2022 made by the appellant seeking upgradation from Type‑VI to Type‑VII., The appellant took physical possession of the bungalow on 09 November 2022 and has been residing there with his senior‑citizen parents and his sister ever since. The House Committee of the Rajya Sabha, which deals with official accommodation for its members, ratified the allotment on 24 November 2022., There is no dispute that the appellant continues to be a Member of the Rajya Sabha, although for reasons unrelated to the present matter he is presently under suspension from the House., The dispute originated from a letter dated 03 March 2023 received by the appellant from the Director, Rajya Sabha Secretariat, effectively cancelling the allotment of the bungalow and instead offering the appellant Flat No. 501 together with Servants’ Quarters Nos. 17 and 18 at SWAJAS Deluxe, New Delhi as his regular accommodation., The cancellation led the appellant to file a suit before the learned Trial Court seeking relief against dispossession or interference with his use and possession of the bungalow, alleging that the cancellation was illegal, null and void ab initio. The appellant also sought ancillary and consequential relief restraining the respondent from allotting the bungalow to any other person without prior permission of the court and without due process of law, as well as damages for mental agony and harassment., The sole defendant in the suit is the Rajya Sabha Secretariat, through its Secretary General, Parliament House/Annexe, New Delhi‑110001., Along with the suit the appellant filed two applications: (i) an application under Order XXXIX Rules 1 and 2 seeking ex‑parte ad‑interim relief staying the effect of the letter dated 03 March 2023 and restraining the respondent from dispossessing the plaintiff without due process of law; and (ii) an application under Section 80(2) of the Code of Civil Procedure seeking leave of the court to file the suit and exemption from serving notice to the defendant., By order dated 18 April 2023, made on the appellant’s application under Order XXXIX Rules 1 and 2, the learned Trial Court made the following operative decision: It admitted that the accommodation granted to the plaintiff falls under the definition of public premises. The plaintiff’s counsel was directed to address arguments on maintainability. The plaintiff submitted that the suit is not barred by the Public Premises (Eviction of Unauthorized Occupants) Act because no orders have been passed by the Estate Officer and eviction proceedings have not been initiated. He argued that the accommodation was provided under the procedure prescribed in Rule 4.18 of the Handbook for the Members of Rajya Sabha and that the cancellation was arbitrary, without hearing, and contrary to the principles of natural justice. The court noted a prima‑facie case for issuing directions that the plaintiff shall not be dispossessed from Bungalow No. AB‑5 without due process of law, as the balance of convenience lies with the plaintiff who resides there with his parents. Accordingly, until the next date of hearing, the respondent was directed not to dispossess the plaintiff from the bungalow without due process of law and notice of the application under Section 80(2) was to be issued to the respondent., It is noted that the respondent was neither represented nor heard when the order dated 18 April 2023 was made on the application under Order XXXIX Rules 1 and 2., The respondent subsequently filed an application under Order XLVII Rule 3 read with Order XLI Rule 5 seeking review and setting aside the order dated 18 April 2023, citing: (a) an error apparent on the face of the record because the order was made in breach of Sections 80(1) and 80(2) of the Code of Civil Procedure; (b) that the court could not have granted any relief without first deciding the application under Section 80(2); and (c) that the appellant had himself filed an application seeking leave under Section 80(2) and even interim relief could not have been granted without affording the respondent a reasonable opportunity of showing cause., The review application led to the impugned order dated 05 October 2023, whereby the learned Trial Court recalled the order dated 18 April 2023, vacated the interim order, and returned the plaint for presentation after complying with the requirement of Section 80(1) of the Code of Civil Procedure., The court observed that the sole ground in the review application was non‑compliance with the mandatory provisions of Section 80(2). While arguments touched upon the merits of the suit, the scope of the review revolved around the non‑compliance of Section 80(2). Section 80 provides that a notice must be issued before a suit can be instituted against a Government or a public officer. Section 80(1) stipulates a two‑month notice; Section 80(2) allows the court to grant leave to institute a suit without such notice., The plaintiff argued that there was substantial compliance with Section 80(1) because a letter dated 14 March 2023 to the defendant highlighted the arbitrary cancellation and thus amounted to a notice. The court found that the letter did not satisfy the statutory requirements of a notice, which must contain the cause of action, the plaintiff’s name, description and residence, and the relief claimed, and the plaint must state that such notice was delivered. The court rejected the contradictory submissions and also rejected the argument that the defendant does not fall within the definition of a Government or public officer., The court concluded that the application for review should be allowed. Referring to Supreme Court decisions in State of Andhra Pradesh v. Pioneer Builders and State of Kerala v. Sudhir Kumar Sharma, the court held that for an application under Section 80(2) both sides must be heard and the nature and urgency of the suit considered before a final decision, and until a final order is passed the irregularity in filing the suit continues. Accordingly, the order dated 18 April 2023 was recalled and the interim order vacated., After hearing the parties, the court found that the plaintiff failed to demonstrate any urgent or immediate relief requiring leave under Section 80(2). The allotment was cancelled on 03 March 2023 and the suit was instituted on 17 April 2023. The accommodation is a public premise, but the cancellation was a privilege that could be withdrawn. No urgent relief was necessary, and therefore the plaint was returned for presentation after compliance with Section 80(1)., The court heard Dr. Abhishek Manu Singhvi, Senior Advocate for the appellant, and Mr. Vikramjit Banerjee, Additional Solicitor General for the respondent., Both counsel addressed various legal and factual facets, but the scope of the present appeal is limited to the grounds on which the impugned order was passed., The learned Trial Court reviewed the interim order dated 18 April 2023 on two grounds: (i) alleged non‑compliance by the appellant with the requirements of Section 80, as the court had issued notice under Section 80(2) and simultaneously granted interim relief; and (ii) that only a proceeding under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 was contemplated and no urgent relief was required., The appellant contends that Section 80 does not apply because the defendant, the Rajya Sabha Secretariat, is neither a Government nor a public officer within the meaning of the statute., Dr. Singhvi referred to the General Clauses Act, 1897, which defines ‘Central Government’, ‘State Government’, and ‘Government’ for various purposes, emphasizing that the Secretariat is not included within these definitions., He further submitted that the Rajya Sabha Secretariat is an independent institution established under Article 98 of the Constitution, which provides for separate secretarial staff for each House of Parliament and allows Parliament to regulate recruitment and conditions of service., Article 102 of the Constitution disqualifies a person from Parliament if he holds an office of profit under the Government of India or any State, indicating a clear distinction between the Parliament and the Government; therefore, the Secretariat is not a Government entity for the purposes of Section 80., The argument was made that the Government is the executive wing of the State, distinct from Parliament, the legislative wing, and consequently the Rajya Sabha Secretariat is not a Government within the meaning of Section 80., Section 2(17) of the Code of Civil Procedure defines ‘public officer’ and enumerates categories such as judges, All‑India Service members, commissioned officers, and officers performing public duties, none of which include members of the legislative branch., It was noted that posts in the Rajya Sabha Secretariat are excluded from the purview of the Union Public Service Commission under the UPSC (Exemption from Consultation) Regulations, 1958, and officers are recruited directly by the Chairman of the Rajya Sabha., Even assuming Section 80 applied, Dr. Singhvi argued that there is no absolute bar to granting interlocutory or ad‑interim relief under Order XXXIX Rules 1 and 2, and that the learned Trial Court could have granted ex‑parte interim relief without hearing the defendant, who would be heard at the final stage., The court may also exercise its inherent powers under Section 151 of the Code of Civil Procedure, which contains a non‑obstante clause, to prevent defeat of justice., The learned Trial Court’s view that the appellant failed to make out a ground for urgent relief was contested, as the appellant faced imminent eviction following the cancellation letter dated 03 March 2023, and the court had previously recognized the prima‑facie case and balance of convenience in favour of the appellant., The suit challenging the cancellation was instituted on 17 April 2023, shortly after the cancellation on 03 March 2023, which does not negate the need for urgent relief., The authority slip for the appellant to take possession of the replacement flat was served to an unauthorised person on 09 March 2023 while the appellant was away in Punjab., The vacation notice for the bungalow was served on 18 September 2023, after the matter was sub‑judice, directing the appellant to vacate by 25 September 2023. Subsequently, a letter dated 05 October 2023 was issued by the Rajya Sabha Secretariat to the Directorate of Estates to initiate eviction proceedings under the Public Premises Act, within hours of the impugned order dated 05 October 2023., Dr. Singhvi also suggested that the action against the appellant may be vitiated by malice, but the limited ground of the review order did not warrant detailed examination of this aspect., The Additional Solicitor General began his submissions by addressing the allegations in the plaint that the respondent’s cancellation of the bungalow allotment was arbitrary and discriminatory, and argued that the appellant was not entitled to a Type‑VII bungalow in the first place.
|
id_1677
| 1
|
It is submitted that the allotment of a Type‑VII Bungalow was above the appellant's entitlement as a first‑time Member of Parliament, and that therefore cancellation of such allotment was well in accordance with the relevant provisions of the Handbook of Members of Rajya Sabha., To support this submission, attention has been drawn to clause 4.18 titled Accommodation, and in particular to Serial No. 4 under that clause, to point out that a first‑time Member of Parliament is entitled only to a Type‑V single Flat/Bungalow; however, since the appellant is also a former Member of the State Legislative Assembly, in accordance with Serial No. 3(viii) he is entitled to Type‑VI Bungalows/MS Flats/Twin Flats., The learned Additional Solicitor General stresses that along with the suit, the appellant had himself moved an application under section 80(2) read with section 151 of the Code of Civil Procedure seeking leave to institute the suit without serving notice under section 80(1) of the Code of Civil Procedure. The learned Additional Solicitor General therefore submits that the appellant is now estopped from arguing that section 80 of the Code of Civil Procedure has no application to the present case. It is also submitted that this argument was never raised before the learned Trial Court when the interim order dated 18‑04‑2023 was passed, and that it was at the appellant's instance that the learned Trial Court issued notice on the section 80(2) application. It was further pointed out that only in reply to the review application filed by the respondents did the appellant first raise the contention of non‑applicability of section 80 to the defendant. The learned Additional Solicitor General contends that the appellant cannot be permitted to approbate and reprobate on this point., Coming next to the status of the respondent, viz. Rajya Sabha Secretariat through the Secretary General, the learned Additional Solicitor General argues that the defendant in the suit is in fact a public officer within the meaning of section 2(17) of the Code of Civil Procedure; in particular under section 2(17)(h), by reason of which section 80 of the Code of Civil Procedure is undoubtedly applicable and was required to be complied with at the time of institution of the suit, as also at the time of deciding the application for interim relief., This argument is further buttressed by submitting that for purposes of section 2(17)(h) of the Code of Civil Procedure, a public officer does not necessarily have to be an officer of the Government, that is to say in service or pay of the Government, but may be any other officer remunerated by fee and commission for the performance of any public duty. In the present case, since the Secretary General of the Rajya Sabha has been named as the person through whom the Rajya Sabha Secretariat is impleaded as defendant, and the Secretary General is certainly a public officer within the meaning of section 2(17)(h) of the Code of Civil Procedure, therefore section 80 is applicable., Furthermore, the learned Additional Solicitor General also relies on the definition of public servant contained in section 21(12)(a) of the Indian Penal Code, 1860 to submit that under that definition the Secretary General of the Rajya Sabha is a public servant performing a public duty. He also seeks to draw strength from the definition of public office in Black's Law Dictionary, 6th Edition, to cite that the essential characteristics of public office are (i) authority conferred by law; (ii) fixed tenure of office; (iii) power to exercise some portion of the sovereign function of Government, the key test being that the officer is carrying out a sovereign function., It is also argued on behalf of the respondent that since the Secretary General of the Rajya Sabha draws salary and other remuneration from the Consolidated Fund of India in view of Article 266 of the Constitution, that his appointment is notified in the Gazette of India, which is a document of the Government of India, and that the Rajya Sabha Secretariat falls within the definition of public authority under the Right to Information Act, 2005, all of which further shows that the Secretary General is a public officer within the meaning of section 2(17) of the Code of Civil Procedure for purposes of section 80., In support of his plea that the Secretary General is a public officer as aforesaid, the learned Additional Solicitor General has also referred to the role, position, functions and responsibilities of the Secretary General as envisaged in a publication of the Rajya Sabha Secretariat, to argue that those also support the proposition that the Secretary General is a public officer., The learned Additional Solicitor General submits that, on the appellant's own admission as contained in the plaint, the cause of action for filing the suit arose on 03‑03‑2023; however, the suit was filed more than a month later, on 17‑04‑2023. This, it is submitted, shows that there was no urgency or immediacy in the relief sought that would attract the exception under section 80(2) of the Code of Civil Procedure., In support of his contentions, the learned Additional Solicitor General has relied upon the decision of the Supreme Court in State of Kerala & Ors. v. Sudhir Kumar Sharma & Ors. to argue that, firstly, upon mere filing of an application under section 80(2) of the Code of Civil Procedure it cannot be presumed that leave has been granted by the court; secondly, that the ingredients of section 80(2) must be complied with at the threshold; and lastly, that an application under section 80 must be decided after hearing both sides and considering the nature and urgency of the matter before taking a final decision., The learned Additional Solicitor General has also cited State of A.P. & Ors. v. Pioneer Builders to argue that the legislative intent behind section 80 of the Code of Civil Procedure is to give the Government sufficient notice of the suit, so that it may reconsider and decide whether the claim made should be accepted, to avoid unnecessary litigation. Furthermore, the court cannot grant relief even if it finds that the suit is for urgent or immediate relief against the Government or a public officer unless a reasonable opportunity is given to the Government or public officer to show cause against the relief prayed for. It is accordingly argued that leave of the court is a condition precedent to the institution of the suit, if a suit is instituted without serving notice under section 80(1)., Lastly, the learned Additional Solicitor General points out that in Ambika Soni v. Union of India & Ors. and a connected matter, a coordinate bench of the Supreme Court said that Article 14 of the Constitution does not permit negative equality; and that in that case a Rajya Sabha member who was holding official accommodation beyond her entitlement was required to vacate it, with the court observing that since allotment of Government accommodation is a privilege, even if others against whom no action has been taken may be continuing in unauthorised occupation, that does not entitle someone to continue in unauthorised occupation., It is also submitted on behalf of the respondent that the order dated 18‑04‑2023 was clearly an interim order as contemplated in section 80(2) of the Code of Civil Procedure; and it would make no difference that the interim order was granted at the ex‑parte stage, since every kind of interim order is barred if it is passed without complying with the requirements of section 80(2)., Another argument proffered is that the appellant is not prejudiced by the order dated 05‑10‑2023, inasmuch as all that the learned Trial Court has done is to return the plaint to the appellant to re‑file the same after complying with the requirements of section 80(1) of the Code of Civil Procedure; and that therefore the right of the appellant to institute the suit has been preserved. It is pointed out that, even on the point of fact, the appellant has not been prejudiced in any way, since to date he is in occupation of the subject bungalow, even though illegally., It is accordingly submitted that non‑compliance of section 80(2) was clearly an error apparent on the face of the record, which warranted review of the interim order dated 18‑04‑2023, as has correctly been done by the learned Trial Court., In rejoinder, Dr. Singhvi contends that the respondent's stand that the Secretary General falls within the definition of public officer is wholly misconceived, since the defendant in the suit is the Rajya Sabha Secretariat only acting through the Secretary General, an entity that cannot be a public officer; and, if at all, the Rajya Sabha Secretariat must fall within the definition of Government for section 80 of the Code of Civil Procedure to be applicable., Senior counsel submits that the term public officer appearing in the Code of Civil Procedure must be given a uniform meaning when it refers to the same aspect viz. suits by or against Government in the same Code, that is to say the meaning of public officer in section 80 must be consistent with that in section 2(17), which must be consistent with the meaning assigned to that term in Order XXVII Rule 5A and 8B of the Code of Civil Procedure. It is pointed out that Order XXVII Rule 5A and 8B draw a clear distinction between a public officer and the Government, since they specify that if a suit is filed against a public officer, the Government must also be joined as a party. Furthermore, Order XXVII Rule 8B expressly states, that for the purposes of Order XVII, Government shall mean either the Central Government or the State Government., To answer the contention that since the appellant himself filed an application under section 80 before the learned Trial Court, he is now estopped from contending that section 80 has no application, the learned senior counsel has cited the judgment of the Supreme Court in Isabella Johnson (Smt) v. M.A. Susai (Deceased) to argue that there cannot be any estoppel on a pure question of law; and that therefore the allegation that the appellant is approbating and reprobating is wholly misconceived. It is submitted that the application under section 80 was filed ex abundanti cautela, for which the appellant cannot be faulted., It is further argued that the phraseology of section 2(17) of the Code of Civil Procedure clearly shows that for a person to be a public officer, such person has to be an officer of the Government, a term that appears repeatedly in section 2(17). Senior counsel places reliance on V. Padmanabhan Nair v. Kerala State Electricity Board, in which the Kerala High Court emphasized this phrase as the one from which the meaning of public officer must derive., Though much has been argued on both sides, in the opinion of the High Court, the conspectus of consideration in the present appeal is straight and narrow., By order dated 18‑04‑2023, the learned Trial Court granted to the appellant an interim order in the suit. By order dated 05‑10‑2023, on an application made by the respondent seeking review of the interim order, the learned Trial Court accepted the review, vacated the interim order, and returned the plaint to the appellant., The plaint has been returned on two grounds. Firstly, the appellant failed to comply with the provisions of section 80 of the Code of Civil Procedure, in that no notice was issued by the appellant to the defendant under section 80(1) before instituting the suit; and secondly, the learned Trial Court could not have granted the interim order without hearing the respondent. Additionally, the letter cancelling the allotment of the subject bungalow was issued on 03‑03‑2023 but the suit was filed only on 17‑04‑2023, showing that the appellant had failed to demonstrate the need for any urgent or immediate relief., The appellant contends that section 80 of the Code of Civil Procedure has no application to the matter inasmuch as the defendant in the suit is neither Government nor a public officer within the meaning of section 80. The appellant further explains that he had filed an application under section 80 in the suit only by way of abundant caution; and that, in any event, since there is no estoppel against the law, he is entitled to contend that, as a matter of law, section 80 has no application to the case., On the other hand, the respondent's contention is that section 80 applies; and since section 80 was not complied with, the suit could not have been instituted, and in any case interim relief could not have been granted without hearing the respondent. Furthermore, the respondent contends that the appellant has suffered no prejudice, inasmuch as all that the learned Trial Court has done is to return the plaint to the appellant, asking him to comply with the requirements of section 80 and thereafter to re‑present the plaint in accordance with law., Section 80 of the Code of Civil Procedure reads as follows: 80. Notice. (1) Save as otherwise provided in sub‑section (2), no suit shall be instituted against the Government (including the Government of the State of Jammu and Kashmir) or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months next after notice in writing has been delivered to, or left at the office of the Government or public officer. (2) A suit to obtain an urgent or immediate relief against the Government (including the Government of the State of Jammu and Kashmir) or any public officer in respect of any act purporting to be done by such public officer in his official capacity, may be instituted, with the leave of the Court, without serving any notice as required by sub‑section (1); but the Court shall not grant relief in the suit, whether interim or otherwise, except after giving to the Government or public officer, as the case may be, a reasonable opportunity of showing cause in respect of the relief prayed for in the suit. Provided that the Court shall, if it is satisfied, after hearing the parties, that no urgent or immediate relief need be granted in the suit, return the plaint for presentation to it after complying with the requirements of sub‑section (1)., Considering the true scope of the controversy, it is clear that the impugned order must be tested simply and only on the meaning to be ascribed to the words Government and public officer appearing in section 80 of the Code of Civil Procedure., An analysis of the provision shows that section 80 is in two parts: section 80(1) bars the institution of a suit against the Government or a public officer (in respect of an act purporting to have been done by the public officer in his official capacity) and requires that before a suit is instituted, a two‑month prior notice in writing must be delivered to such Government or public officer. The notice must state the cause of action along with the name, description and place of residence of the plaintiff and the relief claimed. Furthermore, the plaint must contain a statement that such notice has been so delivered or left. Section 80(2) deals with a situation where a plaintiff seeks urgent or immediate relief against a Government or a public officer. In such cases, the suit may be instituted without serving the two‑month notice, provided leave of the Court is taken for the purpose. The provision further states that the Court shall not grant relief in the suit, whether interim or otherwise, except after giving the Government or public officer a reasonable opportunity of showing cause. If the Court is satisfied after hearing the parties that no urgent or immediate relief is needed, it shall return the plaint to the plaintiff to be re‑presented after complying with the requirements of section 80(1). Section 80(3) bars dismissal of a suit merely because of an error or defect in the notice, provided the notice contains certain basic ingredients, but section 80(3) is not relevant for the present consideration., The objection taken by the respondent that, since the appellant had himself moved an application under section 80, he is estopped from subsequently contending that the provision has no application, must be addressed. In the opinion of the High Court, the applicability of section 80 cannot depend on whether a plaintiff has moved an application under that provision. The applicability of section 80 is a matter of law, which must be decided on the basis of the parties to the suit and the relief claimed in the plaint. Since there is no estoppel against the law, this objection is meritless., The word Government has been defined in Order XXVII Rule 8B of the Code of Civil Procedure, which deals with suits by or against the Government or public officer in their official capacity, and the term public officer has been defined in section 2(17) of the Code of Civil Procedure., But to begin with, we must be clear as to who the defendant is, what relief has been sought in the plaint, and against whom. The plaint names a sole defendant viz. the Rajya Sabha Secretariat through its Secretary General. The relief sought is an injunction against any action arising from the order dated 03‑03‑2023, by which the allotment of the subject bungalow in favour of the appellant was cancelled, together with ancillary and consequential reliefs. The relief is claimed against the Rajya Sabha Secretariat, which is the permanent administrative office of the Rajya Sabha and, inter‑alia, allots official accommodation to its Members. The allotment is made by the House Committee of the Rajya Sabha. The House Committee comprises Members of the Rajya Sabha and the Secretary General is not part of the House Committee., On a plain reading of the plaint, no relief has been sought against the Secretary General of the Rajya Sabha, either personally or acting in his official capacity. The appellant has filed a suit against the Rajya Sabha Secretariat as an institution, against which he seeks restraint., So, is the Rajya Sabha Secretariat either Government or a public officer within the meaning of section 80? Let us first deal with the term public officer. The definition of public officer in section 2(17) of the Code of Civil Procedure reads: \public officer means a person falling under any of the following descriptions, namely …\ Clearly, the definition is exhaustive and refers to persons, not institutions. A perusal of the sub‑clauses shows reference to a public officer of the Government or serving under the Government. Applying the literal rule of construction, the Rajya Sabha Secretariat does not fall within the ambit of a person who could be an officer of the Government or serving under the Government. Moreover, a public officer must be a natural person; the term cannot refer to an institution or body., It may be observed that when a corporate entity such as a company or a society is sued, it is sued through a human agency such as a secretary, director or principal officer. That does not mean that the corporate body itself is the defendant; if an officer of a corporate entity is to be sued, that officer must be impleaded as a separate defendant. In the present case, the Rajya Sabha Secretariat was sued through the person who heads it, the Secretary General, but that does not make the Secretary General the defendant. The defendant is the Rajya Sabha Secretariat., Insofar as the word Government appearing in section 80 is concerned, it must be construed in consonance with the definition of Government in Order XXVII of the Code of Civil Procedure, which defines Government as the Central Government or the State Government. Rule 5A of the same Order specifies that if a suit is instituted against a public officer in respect of any act alleged to be done by him in his official capacity, the Government shall be joined as a party to the suit. This draws a clear distinction between the Government and its public officer, and it must be inferred that the terms Government and public officer cannot be conflated. Consequently, the description of the defendant as \Rajya Sabha Secretariat through its Secretary General\ cannot be taken to mean that the Secretariat and the Secretary General are one and the same, nor that relief has been sought against the Secretary General., The Constitution, Part V (The Union) contains separate chapters dealing with the Executive (Chapter I), the Parliament (Chapter II) and the Union Judiciary (Chapter IV). Part VI (The States) similarly separates the corresponding institutions at the State level. Article 12 of the Constitution, which opens Part III (Fundamental Rights), refers to Government and Parliament (and State Government and State Legislature) separately as being included in the definition of the State, reinforcing that Government and Parliament are distinct institutions of the State., The expressions Central Government and State Government have been defined in sections 3(8) and 3(60) of the General Clauses Act, 1897, which clearly exclude the Parliament or the State Legislatures from those definitions. The definition of \Government\ in section 3(23) of the General Clauses Act says that the said words shall include both the Central Government and any State Government, again without reference to the Parliament or any State Legislature., On a more authoritative note, the decision of the Supreme Court in Pashupati Nath Sukul v. Nem Chandra Jain & Ors. observed that Article 12 of the Constitution uses the expressions Government and Parliament of India and Government and the Legislature of each of the States, suggesting that Government is different from the Union Legislature or the Legislatures of the States. The Court further held that the meaning of Government depends on the context in which it is used and cannot be imported to vitiate the clear distinction between the three organs of the State in all contexts, not least in section 80 of the Code of Civil Procedure., A recent decision of the Supreme Court in State of Tamil Nadu v. State of Kerala reiterated that the doctrine of separation of powers runs through the Indian Constitution and that the three organs—legislature, executive and judiciary—are demarcated without formal lines. This underscores that the Rajya Sabha Secretariat, being the permanent administrative office of the Rajya Sabha, which is one of the Houses of Parliament, is a separate and distinct institution from the Government, which is the executive wing of the State., In the present matter, therefore, it cannot be said that the word Government appearing in section 80 of the Code of Civil Procedure would include the Rajya Sabha Secretariat. Accordingly, in the opinion of the High Court, section 80 of the Code of Civil Procedure has no application to the suit filed by the appellant, in which the sole defendant is the Rajya Sabha Secretariat., By reason of the foregoing discussion, it is not necessary for the High Court to decide whether, in the circumstances of the case, the appellant has been successful in establishing the need for urgent or immediate relief as required in section 80(2) of the Code of Civil Procedure.
|
id_1677
| 2
|
In the above view of the matter therefore, the learned Trial Court was in error in returning the plaint for non‑compliance with the provisions of section 80 of the Code of Civil Procedure. Accordingly the appeal is allowed, holding that there was no requirement for the appellant/plaintiff to file the application under section 80 of the Code of Civil Procedure, or to comply with that provision; and therefore the application under section 80 of the Code of Civil Procedure is disposed of as infructuous; directing the appellant to re‑present the plaint before the learned Trial Court within three days of pronouncement of this judgement; with a direction to the learned Trial Court to proceed with the matter by first deciding the application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, which stands restored before it; and thereafter to proceed with the suit, in accordance with law., In the meantime, the order dated 18 April 2023 shall stand revived till the application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure is decided by the learned Trial Court., The appeal is disposed of in the above terms. Pending applications, if any, also stand disposed of.
|
id_1681
| 0
|
In the Calcutta High Court, Constitutional Writ Jurisdiction (Appellate Side). Hon'ble Justice Sabyasachi Bhattacharyya. W.P.A. No. 16089 of 2023. Gopal Seth, Election Commission of India and others (Petitioners): Mr. Kishore Dutta, Mr. Sanjib Dutta, Mr. Anindya Sundar Chatterjee. Respondent No.1 & 2: Mr. Anuran Samanta. State: Mr. Sk. Md. Galib, Ms. Sujata Mukherjee. Private respondent: Mr. Arindam Paul. Hearing concluded on 29 November 2023. Judgment on 8 December 2023., The petitioner is a valid voter of the State of West Bengal and has challenged the election of respondent No.14 to the West Bengal Assembly in the 2021 elections. The moot question raised is whether respondent No.14 faked his educational qualification while participating as a candidate in the said elections., The elections were held between 27 March 2021 and 29 April 2021. The petitioner made an application seeking information under the Right to Information Act from the concerned authorities and received a reply on 14 April 2021 regarding the academic qualification of the private respondent. Immediately on 15 April 2021 a complaint was lodged to the Chief Election Commissioner of India., Allegedly, thereafter, a complaint was also registered before the Returning Officer on 2 May 2021, which is after the election was over. On the complaint to the Election Commission of India, the petitioner was asked to wait vide e‑mails dated 18 April 2021 and 3 May 2021 issued by the Election Commission. It is submitted that the petitioner complained during the election itself. Since the Election Commission asked the petitioner to wait but did not take steps indefinitely, the petitioner after waiting for a considerable period has preferred the instant challenge., It is argued that although a previous election petition of one Alo Rani, also challenging the election of the private respondent, was dismissed. Such dismissal was only on the ground that the writ petitioner therein was a Bangladeshi citizen and there was no adjudication on merits on the issue involved., The petitioner submits that as a voter of the same electorate, that is, the State of West Bengal, although of a different constituency than the private respondent, the petitioner has every right to point out an irregularity in the election of the private respondent., Learned senior counsel for the petitioner argues that under Article 192 of the Constitution of India, if any question arises as to whether a member of a House of the Legislature of a State has become subject to any disqualifications mentioned in Clause (1) of Article 191, the question shall be referred for the decision of the Governor and his decision shall be final. The Governor, before giving the decision, is to obtain the opinion of the Election Commission and to act according to such opinion. Since the petitioner approached the Election Commission in time and the Election Commission asked the petitioner to wait for its adjudication, it is submitted that the provisions of Article 192 are attracted., Under Article 191(1)(e) a person shall be disqualified for being chosen as and for being a member of the Legislative Assembly if he is so disqualified by or under any law made by Parliament., Learned senior counsel argues that the law referred to in Article 191(1)(e) is the Representation of the People Act, 1951 (hereinafter referred to as the 1951 Act)., In Section 146 of the same, the powers of the Election Commission to hold enquiry in connection with tendering any opinion to the President under Article 192 have been enumerated, conferring powers equivalent to the Civil Court on the Election Commission in some respects., Learned senior counsel for the petitioner relies on Section 7(b) of the 1951 Act which defines disqualified as disqualified for being chosen as and for being a member inter alia of the Legislative Assembly under the provisions of the said Chapter., Section 36(4) of the 1951 Act provides that at the time of scrutiny of nomination, the Returning Officer shall not reject any nomination paper on the ground of any defect which is not of substantial character. In the present case, the fraud practiced on the electorate and the Election Commission by the private respondent, it is argued, tantamounts to a defect of substantial character disqualifying respondent No.14 from getting elected and being a member of the Legislative Assembly., Section 100(1)(d)(i) of the 1951 Act provides that if the High Court is of the opinion that the result of the election insofar as it concerns a returned candidate has been materially affected by the improper acceptance of any nomination, the High Court may declare the election of the returned candidate to be void., It is submitted that under the said provision, this Court ought to declare that the submission of nomination of respondent No.14 was void, thus disqualifying him from continuing as a member of the Legislative Assembly., Learned senior counsel also cites Section 125A of the 1951 Act which provides for penalty for filing false affidavit and furnishing false information, etc., Learned senior counsel next cites Rules 4 and 4A of the Conduct of Election Rules, 1961 (for short, the 1961 Rules) which deal with nomination paper., It is thus argued that respondent No.14 be declared to be disqualified, his election to the Legislative Assembly itself being void., Learned counsel for the Election Commission argues that no prayer has been made as such against the Election Commission and the writ petition is not maintainable against the Election Commission. It is next submitted that the petitioner did not contest the vote and is not a returned candidate; hence, he has no locus standi to prefer the instant challenge., The private respondent being a returned candidate and no dispute regarding his election having been raised by the other candidates at the relevant juncture, it is contended that the writ petition ought to be dismissed., It is argued on behalf of the private respondent that Alo Rani, a returned candidate, had previously preferred a writ challenging the private respondent's election which was dismissed on 13 August 2021. An appeal preferred against the same was also dismissed. It is argued that the petitioner is a fence‑sitter, having waited for two years awaiting the outcome of the challenge preferred by Alo Rani, and has only preferred the instant writ petition after Alo Rani became unsuccessful., The challenge sought to be made now, it is argued, was to be made before the appropriate authority by way of an election petition. Once the election process starts, the Election Commission has no role to play., It is also argued by the private respondent that no receipt has been annexed to the writ petition regarding the alleged complaint to the Returning Officer., For deciding the present challenge, the first provision which is to be looked into is Article 191 of the Constitution. Clause (1)(e) of the said Article stipulates that a person shall be disqualified for being chosen as and for being a member of the Legislative Assembly of a State if he is so disqualified by or under any law made by Parliament., The powers of the Governor follow, to the extent that if any such question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in Clause (1) of Article 191, the question shall be referred for the decision of the Governor and his decision shall be final., Clause (2) of Article 192 only enumerates that before giving a decision on such question, the Governor shall obtain the opinion of the Election Commission and shall act according to the same. Section 146 of the 1951 Act provides the modalities and procedure for enquiry by the Election Commission to give such opinion., Thus, Article 192 is dependent on whether a question arises at all for disqualification of membership of an MLA under Article 191. Since the petitioner has only relied on Clause (1)(e) of the said Article, we are restricted to enquire into whether any question of disqualification arises under the concerned law made by Parliament, that is, the 1951 Act., The term disqualified as per Section 7(b) of the 1951 Act means disqualified for being chosen as and for being a member, inter alia, of the Legislative Assembly of a State. However, the definition is qualified by the phrase under the provisions of this Chapter, and no other ground. Thus, by virtue of the Amendment of 2013 to the 1951 Act, which has been given effect from 10 July 2013, the disqualification contemplated in Section 7(b) is restricted to the provisions of Chapter III and on no other grounds., Under Chapter III, Sections 8 to 11 are arrayed. Section 8 relates to conviction on certain offences, Section 8A to corrupt practices. There has been no known conviction of the private respondent, nor has any such conviction been alleged., Insofar as corrupt practices is concerned, Section 2(1)(c) of the 1951 Act defines corrupt practice as that provided under Section 123 of the Act. Section 123 of the Act, in sub‑section (4), contemplates as a corrupt practice the publication by a candidate or his agent or by any other person with the consent of a candidate or his election agent of any statement of fact which is false and which he either believes to be false or does not believe to be true in relation to the personal character or conduct of any candidate or in relation to the candidature or withdrawal of any candidate, being a statement reasonably calculated to prejudice the prospects of that candidate's election. Educational qualification, even if construed to be a sufficient factor to prejudice the prospects of the candidate's election, could not be said to have been published by the candidate in the present case. The petitioner has not made any allegation of any publication by the candidate or his agent regarding his educational qualification. Thus, corrupt practices are also ruled out in the present case. The other provisions of Section 123 are also not applicable in any manner., Section 9 under Chapter III of the 1951 Act speaks about dismissal from Government service for corruption and disloyalty, Section 9A of subsistence of Government contracts, Section 10 of the Managing Agent, Manager or Secretary of office under Government company, none of which is applicable to the private respondent here. Section 10A provides for failure to lodge account of election expenses, which is also not applicable. Section 11, the last Section in Chapter III of the 1951 Act, provides that the Election Commission may, for reasons to be recorded, remove any disqualification under the Chapter or reduce the period of any such disqualification., Thus, the private respondent cannot be said to satisfy any of the conditions of disqualification under Chapter III of the 1951 Act, which are the only grounds to disqualify him as per Section 7(b). Hence, on the face of it, the disqualification as envisaged in Article 191(1)(e) of the Constitution of India does not apply in the present case., Section 36(4) is on an entirely different footing. It speaks about the scrutiny of nomination on the date fixed for such purpose. Sub‑section (1) of Section 36 provides that on the said date, the candidates, their election agents, one the proposers of each candidate and one other person duly authorised in writing by each candidate but no other person may attend. By necessary implication, it is the said persons only who have the right to lodge a complaint before the Returning Officer. Hence, the question of applicability of Section 36(4), regarding rejection or non‑rejection by the Returning Officer for defect of substantial character does not arise in the present case at all, since the petitioner is not a person mentioned in Section 36(1)., The other Section which has been sought to be placed by the petitioner is Section 100 of the 1951 Act. Learned senior counsel for the petitioner has relied on Section 100(1)(d)(i) which provides that the High Court, if of the opinion that the result of the election concerning a returned candidate has been materially affected by the improper acceptance of any nomination, the High Court shall declare the election of the returned candidate to be void., The said Section, as per its caption, provides grounds for declaring the election itself to be void and generally does not pertain to a particular candidate. However, if we look at Section 100(1)(d)(i), the High Court may declare the election of the particular returned candidate to be void if it is of the opinion that the result of the election insofar as it concerns the said candidate has been materially affected by the improper acceptance of any nomination., The expression 'improper' in the said Section acquires utmost relevance here. The impropriety pleaded by the petitioner is alleged false declaration of his age by the private respondent. The petitioner seeks to substantiate his allegations solely on the basis of information obtained from the Headmaster and Secretary of the Mondal Para High School where the private respondent allegedly studied. In the document containing such information, we find that the Head Master writes that there is no record/information about the private respondent in the Admission Register of the school. On the assumption that as per the application of RTI of the petitioner, the present age of the private respondent was 39, the date of birth of the said candidate was taken to be 1982 and the expected year of admission in Class V to be 1990‑92. The records of the Admission Register of the students of the school for the academic years 1989‑90 to 1995‑96 showed no record of studentship of the private respondent. However, mere production of such document before the writ court, without anything else, is utterly insufficient to come to the serious conclusion that the private respondent faked his educational qualification. It is only a competent criminal court which, upon proper trial and adduction of evidence, can arrive at the finding that there is sufficient material to show that the private respondent practiced fraud on the Election Commission and the electorate. In criminal cases, the standard of proof is beyond reasonable doubt. The document which has been produced, in the absence of any corroborative material, is insufficient to clinch the said allegation against the private respondent beyond reasonable doubt. In the least, the said document is to be proved by its author in a proper trial and the right of cross‑examination to be afforded to the accused., There is a larger issue which is required to be considered here. In a country like ours, where the vast majority of the people are uneducated if not illiterate, it is debatable whether educational qualification per se can be a test for the legitimacy of candidature of a person. Let it be understood clearly that this is not to denigrate or alleviate the intrinsic worth of education or the essential requirement of education for a country to flourish and for an individual to stand up for his rights. However, at the end of the day, mere educational qualification is not one of the essential criteria which is required to be satisfied by a candidate to vote or be elected. An uneducated electorate has the right to elect one of them as their representative in the State Legislative Assembly. Hence, seen from such perspective, it cannot be said that even if there was some irregularity in the declaration regarding educational qualification of the private respondent, the same would be regarded as improper acceptance of any nomination to vitiate his election itself. Even if we read Section 100 with Section 36(4), a nomination paper may not be rejected on the ground of any defect which is not of substantial character. Educational qualification, not being an essential criterion for getting elected, would not be a defect of a substantial character., More importantly, as held earlier, Section 36 questions can be raised only at the juncture of scrutiny of nomination and by the persons as mentioned in sub‑section (1) of Section 36. The petitioner, not being one of such persons, was in the first place not entitled to raise such challenge at all. Thus, the texture of Section 36(4) cannot and ought not to be borrowed while construing Section 100(1)(d)(i)., In such view of the matter, I do not find that the disqualifications as contemplated in Chapter III of the 1951 Act, read in the light of Article 191(1)(e) of the Constitution of India, to be satisfied in the present case., Insofar as Article 190 is concerned, Clause (3)(a) stipulates that if a member of a House of the Legislature of a State becomes subject to any of the disqualifications mentioned in Clause (1) or Clause (2) of Article 191, his seat shall thereupon become vacant. Thus, Article 190 also refers back to a disqualification under Article 191., However, in the light of the discussions above, none of the criteria for disqualification of the private respondent as an election candidate or as a member of the West Bengal Legislative Assembly has been made out in the present case., Hence, W.P.A. No. 16089 of 2023 is dismissed on contest without any order as to costs., Urgent certified server copies, if applied for, be issued to the parties upon compliance of due formalities.
|
id_1682
| 0
|
Constitutional Writ Jurisdiction Appellate Side Present: The Hon'ble Justice Jay Sengupta. Writ Petition Application No. 1238 of 2024. Nilanjan Mitra, The State of West Bengal & Ors. For the petitioner: Mr. Jayanta Narayan Chatterjee, Mr. Supreme Naskar, Ms. Jayashree Patra, Advocates. For the State: Mr. Ashim Kumar Ganguly, Mr. Sambuddha Dutta, Shri Md. Masud, Advocates. Heard lastly on 31 January 2024. Judgment on 31 January 2024., Justice Jay Sengupta: This is an application seeking addition of an appropriate penal provision in the array of allegations, transfer of investigation and departmental action against errant police officers. The report filed on behalf of the State is taken on record. The petitioner is the de facto complainant and the uncle of the deceased victim. Although the death of the victim occurred beyond seven years of marriage, only Section 304B and Section 498A of the Indian Penal Code were imputed in the FIR; no charge under Section 302 of the Indian Penal Code was added. The case involves a gruesome murder where the husband, the alleged assailant, showed on video call to a relative of the deceased how the victim was burning. Neither the mobile phone nor relevant witnesses were examined, and the victim’s clothing and the broken door were not seized. The investigation was perfunctory, and the accused was arrested only after the anticipatory bail prayer was rejected by the Supreme Court of India., The State relies on the case diary. Statements of witnesses have been recorded. The phone could not be seized because, as the accused explained, he could not remember where it was kept. Upon instruction from the Investigating Officer present in the Supreme Court of India, it is submitted that there is no material to add Section 302 of the Indian Penal Code. It is apparent that Section 304B of the Indian Penal Code has no application in this case as the incident happened after seven years of marriage. The recording officer wrongly added this provision to the FIR, and the Investigating Officer, ignorant of the law, continued investigation under it. From the statement of the relative, Sukla Chowdhury, to whom the video call was allegedly made, it appears that during the call the cousin sister pleaded with the accused to save the victim instead of making the video call. The call lasted at least one minute. If a person catches fire and her husband is in a position to save her but chooses not to, this circumstance should have prompted the Investigating Officer to explore whether the fire could have been caused by the husband. The statement of Sukla Chowdhury should have been recorded under Section 164 of the Code of Criminal Procedure, 1973. Non‑seizure of relevant articles cannot be satisfactorily explained; the Investigating Officer relies on the accused’s statement. The investigation appears to have been totally misdirected., In view of the grave flaws in the investigation, the investigation shall be transferred to the Central Investigation Department forthwith. The Central Investigation Department shall conclude the investigation expeditiously and in accordance with law. With these observations, the writ petition is disposed of. A copy of this order shall be sent to the Director General of Police for information and necessary action. An urgent photostat certified copy of this order may be supplied to the parties expeditiously if applied for. Parties shall act on a server copy downloaded from the official website of the Supreme Court of India.
|
id_1684
| 0
|
Preface: Plato, the Greek philosopher in his treatise *The Laws*, underscores that punishment is to be inflicted not for the sake of vengeance, for what is done cannot be undone, but for the sake of prevention and reformation (Thomas L. Pangle, *The Laws of Plato*, Basic Book Publishers, 1980). In his treatise, Plato reasons that the lawgiver, as far as he can, ought to imitate the doctor who does not apply his drug with a view to pain only, but to do the patient good. This curative theory of punishment likens penalty to medicine, administered for the good of the one who is being chastised (Trevor J. Saunders, *Plato's Penal Code: Tradition, Controversy, and Reform in Greek Penology*, Oxford University Press, 1991). Thus, if a criminal is curable, he ought to be improved by education and other suitable arts, and then set free again as a better citizen and less of a burden to the state. This postulate lies at the heart of the policy of remission. In addition, there are competing interests involving the rights of the victim and the victim's family to justice versus a convict's claim to a second chance by way of remission or reduction of his sentence for reformation. Over the years this Supreme Court of India initially attached greater weight to the former and has expressed scepticism over the latter, particularly if the offence in question is a heinous one. This sentiment can be gathered from the observations of Fazal Ali J. in *Maru Ram vs. Union of India*, AIR 1980 SC 2147. It is true that there appears to be a modern trend of giving punishment a colour of reformation so that stress may be laid on the reformation of the criminal rather than his confinement in jail, which is an ideal objective. At the same time, it cannot be gainsaid that such an objective cannot be achieved without mustering the necessary facilities, the requisite education and the appropriate climate which must be created to foster a sense of repentance and penitence in a criminal so that he may undergo a mental or psychological revolution that he realises the consequences of playing with human lives. In the world of today and particularly in our country, this ideal is yet to be achieved and, in fact, with all our efforts it will take us a long time to reach this sacred goal. The question, therefore, is whether the country should take the risk of innocent lives being lost at the hands of criminals committing heinous crimes in the holy hope or wishful thinking that one day or the other, a criminal, however dangerous or callous he may be, will reform himself. A woman deserves respect however high or low she may be considered in society or whatever faith she may follow or any creed she may belong to. Can heinous crimes, inter alia, against women permit remission of the convicts by a reduction in their sentence and by granting them liberty? These are the issues which arise in these writ petitions. With the aforesaid philosophical preface, we proceed to consider these writ petitions, both on maintainability as well as on merits, purely from a legal perspective., Details of the writ petitioners: The writ petitions have been filed assailing the Orders dated 10 August 2022, granting remission and early release of respondent Nos. 3 to 13 in *Writ Petition (Criminal) No. 491 of 2022* (the lead petition), who were all convicted of heinous crimes during the large‑scale riots in Gujarat on 28 February 2002 and a few days thereafter, which occurred in the aftermath of the burning of the train incident in Godhra on 27 February 2002. The grotesque and diabolical crime was driven by communal hatred and resulted in twelve convicts brutally gang‑raping the petitioner, Bilkis Yakub Rasool, who was pregnant at that time. The petitioner’s mother was gang‑raped and murdered; her cousin, who had just delivered a baby, was also gang‑raped and murdered. Eight minors, including the petitioner’s cousin’s two‑day‑old infant, were also murdered. The petitioner’s three‑year‑old daughter was murdered by smashing her head on a rock, and her two minor brothers, two minor sisters, her phupha, phupi, mama (uncle, aunt and uncle respectively) and three cousins were all murdered. Bilkis Yakub Rasool, aged twenty‑one and pregnant at the time, having lost all members of her family in the brutal attacks, has approached this Supreme Court of India seeking justice by challenging the en‑masse remission granted to respondent Nos. 3 to 13. She has filed the present writ petition under Article 32 of the Constitution of India, seeking a writ, order or direction quashing the Orders dated 10 August 2022 passed by the State of Gujarat, by which the convicts in Sessions Case No. 634 of 2004, Mumbai (respondent Nos. 3 to 13), whose convictions were upheld by a Division Bench of the Bombay High Court and thereafter by this Supreme Court of India, have been released prematurely. Additional writ petitions include *Writ Petition (Criminal) No. 352 of 2022* (Dr. Meeran Chadha Borwankar vs. State of Gujarat), *Writ Petition (Criminal) No. 319 of 2022* (Subhashini Ali vs. State of Gujarat), *Writ Petition (Criminal) No. 326 of 2022* (Mahua Moitra vs. State of Gujarat), *Writ Petition (Criminal) No. 403 of 2022* (National Federation of Indian Women vs. State of Gujarat), *Writ Petition (Criminal) No. 422 of 2022* (Asma Shafique Shaikh vs. State of Gujarat), and *Writ Petition (Criminal) No. 491 of 2022* (Bilkis Yakub Rasool vs. State of Gujarat)., Factual background: Following the tragic incident, a First Information Report (FIR) was registered against unknown accused on 4 March 2002. The investigating agency filed a closure report stating that the accused could not be traced, and the Judicial Magistrate accepted the closure report by Order dated 25 March 2003. The closure report was challenged by the petitioner‑victim Bilkis Yakub Rasool before this Supreme Court of India in *Writ Petition (Criminal) No. 118 of 2003*. This Supreme Court directed the reopening of the case and transferred the investigation to the Central Bureau of Investigation (CBI)., The CBI commenced a fresh investigation and submitted a charge sheet on 19 April 2004 against twenty persons accused of the crime. Charges of gang rape, murder and rioting armed with deadly weapons with a common intention were framed against twelve persons, six police personnel and two doctors. The petitioner‑victim approached this Supreme Court of India by filing *Transfer Petition (Criminal) No. 192 of 2004*, seeking transfer of the trial from the State of Gujarat to a neutral place. By Order dated 6 August 2004, this Supreme Court considered it appropriate to transfer Sessions Case No. 161 of 2004 pending before the learned Additional Sessions Judge, Dahod, Ahmedabad, to the competent court in Mumbai for trial and disposal. Charges were framed on 13 January 2005 against eleven convicts for offences under Sections 143, 147, 302, 376(2)(e) and (g) of the Indian Penal Code, 1860., The Special Judge, Greater Mumbai, by judgment dated 21 January 2008 in Sessions Case No. 634 of 2004, convicted the eleven accused and sentenced them to life imprisonment for offences including gang rape and murder of the petitioner’s mother, gang rape and murder of her cousin Shamim, murder of twelve more victims including the petitioner’s three‑and‑a‑half‑year‑old daughter, rioting, etc., and one police personnel for deliberately recording the FIR incorrectly. The trial court acquitted the remaining five police personnel and the two doctors against whom there were serious charges. Respondent Nos. 3 to 13 were convicted for offences punishable under Sections 143, 147, 148, 302 read with 149 of the Indian Penal Code for the murder of fourteen people; Section 376(2)(e) & (g) for having committed gang‑rape on the petitioner‑victim; and Section 376(2)(g) for having committed gang rape on other women. The police officer Somabhai Gori was convicted under Sections 217 and 218 of the Indian Penal Code., On 5 August 2013, a Division Bench of the Bombay High Court passed an order in Criminal Writ Petition No. 305 of 2013 (*Ramesh Rupabhai Chandana vs. State of Maharashtra*), preferred by respondent No. 13, holding that where a trial has been transferred from one State to another and such trial has been concluded and the prisoner has been convicted, the prisoner should be transferred to the prison of his own State., Against the judgment of the trial court dated 21 January 2008, the convicted persons and the State filed criminal appeals before the Bombay High Court. While the convicts filed appeals assailing their conviction, the State filed an appeal against the acquittal of the police officials and the doctors. A bench comprising Mrs. Mridula Bhatkar and Mrs. V. K. Tahilramani, JJ., of the Bombay High Court upheld the conviction of the eleven persons accused of rioting armed with deadly weapons, gang‑rape and murder by judgment dated 4 May 2017 in Criminal Appeals Nos. 1020‑1023 of 2009, 487 of 2010, 194 and 271 of 2011 (*Jaswantbhai Chaturbhai Nai vs. State of Gujarat*). The five police officials and the two doctors who were acquitted by the trial court were also convicted by the High Court. The High Court observed that the investigation by the Gujarat police was not proper and had taken the investigation in the wrong direction from the beginning, i.e., the day of registering the FIR. It noted that the investigation was not only unsatisfactory but also smacked of dishonest steps to shield the culprits, and that truth and falsehood were mixed up in such a manner that at every stage of investigation the truth was hidden under layers of intentional laxity, omissions, contradictions and falsehood., All the persons convicted filed Special Leave Petitions against the judgment of the High Court. This Supreme Court of India, by order dated 10 July 2017 in SLP (Criminal) Nos. 4290/2017, 4705/2017 and 4716/2017 and by order dated 20 November 2017 in SLP (Criminal) No. 7831/2017, dismissed the Special Leave Petitions preferred by the convicts and upheld the findings rendered by the High Court as well as the sentence awarded., The petitioner‑victim approached this Supreme Court of India by way of Criminal Appeal Nos. 727‑733 of 2019 seeking just and adequate compensation for her ordeals. By order dated 23 April 2019, this Supreme Court observed that the petitioner is a victim of riots which occurred in the aftermath of the Godhra train burning and that the loss she suffered surpassed normal cases. The Court noted that the gruesome and horrific acts of violence had left an indelible imprint on the mind of the petitioner, which will continue to torment and cripple her. Accordingly, the Court directed the State Government to pay Rs. 50,00,000 (Rupees Fifty Lakhs) to the petitioner within two weeks, noting that she had been coerced into living the life of a nomad and an orphan and was barely sustaining herself on the charity of NGOs after losing her family members., After undergoing fourteen years, five months and six days of his sentence, respondent No. 3, Radheshyam Bhagwandas Shah, filed Criminal Application No. 4573 of 2019 before the Gujarat High Court challenging the non‑consideration of his application for premature release under Sections 433 and 433A of the Code of Criminal Procedure, 1973. The Gujarat High Court, after considering the submissions, observed that respondent No. 3 had been tried in the State of Maharashtra; hence, as per Section 432(7), the appropriate government for the purpose of Sections 432 and 433 of the Code of Criminal Procedure would be the State of Maharashtra. Relying on the dictum of this Supreme Court in *Union of India vs. V. Sriharan* (2016) 7 SCC 1, the Gujarat High Court, by order dated 17 July 2019, directed the petitioner (respondent No. 3) to pursue his remedy within the State of Maharashtra., Respondent No. 3 then moved an application dated 1 August 2019 before the Secretary, Department of Home Affairs, State of Maharashtra, seeking premature release under Sections 432 and 433A of the Code of Criminal Procedure, specifically relying on the Gujarat High Court order of 17 July 2019 granting him liberty to approach the State of Maharashtra. As the case was investigated and prosecuted by the CBI, the agency’s opinion was sought on the application for premature release. The CBI submitted its report dated 14 August 2019 recommending that respondent No. 3 should serve his sentence fully and that no leniency should be given to him, noting his active participation in the heinous crime and the seriousness of the offences. On 3 January 2020, the Special CBI Court, Mumbai, also gave a negative report and objected to the prayer for premature release on the ground of seriousness of the offence, observing that the offences fell into category 5(b) of the relevant State policy and were extremely serious. Similarly, on 3 February 2020, the Superintendent of Police, Dahod, in his report to the Collector and District Magistrate, Dahod, gave a negative opinion against premature release, stating that the victim and her family would apprehend serious crimes if respondent No. 3 were released prematurely. The Collector and District Magistrate, Dahod, on 19 February 2020 also opined against premature release, relying on the Superintendent’s opinion., Respondent No. 3 again approached the Gujarat High Court by way of Criminal Miscellaneous Application No. 1 of 2019 in Criminal Application No. 4573 of 2019 seeking remission under Section 432 read with Section 433 of the Code of Criminal Procedure. The Gujarat High Court, by order dated 13 March 2020, rejected the application, observing that the appropriate government under Section 432(7)(b) to exercise the powers of remission would be the State of Maharashtra and not the State of Gujarat. The order recorded that counsel for respondent No. 3 had sought permission to move the High Court of Bombay for the same relief and therefore the application was disposed of with liberty to the writ petitioner. This order remains in force as it has neither been challenged nor set aside., On 20 July 2021, a meeting of the Jail Advisory Committee of the State of Gujarat took place comprising four social workers; two members of the State Legislative Assembly; the Superintendent of Police, Godhra; the District and Sessions Judge, Godhra; the Secretary, Jail Advisory Committee and Superintendent, Godhra Sub‑Jail; and the District Magistrate, Godhra (Chairman). The Sessions Judge, Godhra, being one of the ten members of the Committee, observed that respondent No. 3 had been sentenced to life imprisonment in a sensitive case and that premature release might create an adverse effect on society and disturb peace. The other Committee members recommended grant of remission on the ground that he had completed fifteen years of imprisonment and his conduct in prison had been good., On 18 August 2021, the Additional Director General of Police, Prisons and Correctional Administration, State of Gujarat, in a letter to the Additional Chief Secretary, Home Department, Gujarat, after considering the opinion of the Jail Advisory Committee, concurred with the opinions of the Superintendent of Police, Dahod; the CBI; the Special CBI Court, Mumbai; and the District Magistrate, Dahod, and did not recommend premature release of respondent No. 3. In the interregnum, the remaining convicts, respondent Nos. 4 to 13, applied for remission in February 2021 to the Superintendent, Godhra Sub‑Jail. The CBI’s opinion was negative, as was the Special Judge (CBI), Greater Mumbai. By a common opinion dated 22 March 2021, the Special Judge (CBI), Greater Mumbai stated that since all the accused were tried and convicted in Mumbai, i.e., the State of Maharashtra, the Government Resolution issued by the Home Department, Government of Maharashtra would be applicable to them. The Special Judge, after perusing the guidelines issued by the Government of Maharashtra on 16 November 1978 and 11 May 1992 and the Government Resolution dated 11 April 2008 (Policy dated 11 April 2008), observed that the resolution dated 11 April 2008 superseded all earlier orders and would apply to convicts undergoing life imprisonment. The Judge noted that the convicts fell under categories 2(c), 2(d) and 4(d) of the Policy, according to which the minimum period of imprisonment to be undergone is 28 years (Category 2(d)). However, the Superintendent of Police, Dahod, gave a positive opinion with respect to premature release of respondent Nos. 3 to 13, which was seconded by the Collector and District Magistrate, Dahod., In this backdrop, a writ petition, *Writ Petition (Criminal) No. 135 of 2022* titled *Radheshyam Bhagwandas Shah vs. State of Gujarat* (2022) 8 SCC 552, was filed before this Supreme Court of India by respondent No. 3, seeking a direction in the nature of mandamus to the State of Gujarat to consider his application for premature release under its policy dated 9 July 1992, which was in force at the time of the commission of his crime and his conviction. This Supreme Court noted that the policy on the date of conviction was as per the resolution dated 9 July 1992 passed by the State of Gujarat, and therefore respondent No. 3 would be governed by the same. Relying on the dictum in *State of Haryana vs. Jagdish* (2010) 4 SCC 216, the Court observed that the application for grant of premature release must be considered on the basis of the policy that stood on the date of conviction. The Court rejected the argument that the appropriate government should be the State of Maharashtra because the trial had been concluded there, holding that the crime was committed in the State of Gujarat and, after conviction, all further proceedings including remission must be considered under the policy applicable in Gujarat. The Court directed the State of Gujarat to consider the petitioner’s application for premature release in terms of its policy dated 9 July 1992., Pursuant to the judgment of this Supreme Court dated 13 May 2022, a meeting of the Jail Advisory Committee of the State of Gujarat took place on 26 May 2022 and all members recommended grant of remission to respondent Nos. 3 to 13. The Sessions Judge, Godhra, also considered the applications and, after reviewing the report of the Jail Superintendent, Sub‑Jail, Godhra, noted that the convicts had demonstrated good behaviour, no adverse incidents were recorded during furlough or parole (except for one convict, Mitesh Chimanlal Bhatt), and that they had participated in rehabilitation programmes. Applying the policy dated 9 July 1992, the Sessions Judge gave an affirmative opinion regarding premature release of respondent Nos. 3 to 13., The Additional Director General of Police, Prisons and Correctional Administration, State of Gujarat, addressed a letter dated 9 June 2022 to the Additional Chief Secretary, Home Department, Government of Gujarat, regarding the premature release of accused Kesarbhai Khimabhai Vahoniya. The letter stated that the Superintendent of Police, Dahod, gave a positive opinion; the Superintendent of Police, Special Crime Branch, Mumbai, gave a negative opinion; the District Magistrate, Dahod, gave a positive opinion; the Sessions Court, Mumbai, which pronounced the sentence, gave a negative opinion; the Jail Advisory Committee of Gujarat gave a positive opinion; and the Superintendent, Godhra Sub‑Jail, gave a positive opinion. Accordingly, the Additional Director General gave a positive opinion regarding premature release of Kesarbhai Khimabhai Vahoniya and similarly for the other convicts named in the letter., On 28 June 2022, the Department of Home Affairs, Government of Gujarat, wrote to the Secretary, Ministry of Home Affairs, Government of India, seeking sanction from the Government of India for the premature release of the prisoners, respondent Nos. 3 to 13. By letter dated 11 July 2022, the Ministry of Home Affairs, Government of India, conveyed its approval under Section 435 of the Code of Criminal Procedure for the premature release of all eleven convicts, respondent Nos. 3 to 13. Pursuant to the concurrence of the Central Government, the State of Gujarat issued the impugned Orders dated 10 August 2022., Counter affidavit of the State of Gujarat: Under Secretary, Home Department, State of Gujarat (first respondent) filed an affidavit stating that he is acquainted with the facts of the case as appearing from the official records. While denying every assertion, contention and statement made by the petitioner in *Writ Petition (Criminal) No. 319 of 2022*, which was the first of the writ petitions filed before this Supreme Court of India, certain preliminary submissions have been advanced. It is contended that the public interest litigation filed by the petitioners (Subhashini Ali and others) is neither maintainable in law nor tenable on facts, that a third party has no locus to challenge the orders of remission passed by a competent authority under the garb of a public interest litigation, and that a public interest litigation is not maintainable in a criminal matter as the petitioners are in no way connected with the proceedings in which the convicted persons have been granted remission. Therefore, the writ petition may be dismissed on that ground alone. In support of this submission, reliance has been placed on *Rajiv Ranjan Singh Lalan (VIII) vs. Union of India* (2006) 6 SCC 613.
|
id_1684
| 1
|
Gulzar Ahmed Azmi v. Union of India, (2012) 10 Supreme Court Cases 73 (Gulzar Ahmed); Simranjit Singh Mann v. Union of India, (1992) 4 Supreme Court Cases 65 (Simranjit Singh); and Ashok Kumar Pandey v. State of West Bengal, (2004) 3 Supreme Court Cases 349 (Ashok Kumar). It is submitted that a third party or stranger either under the provisions of the Criminal Procedure Code or under any other statute is precluded from questioning the correctness of grant or refusal of sanction for prosecution or the conviction and sentence imposed by the Supreme Court of India after a regular trial. Similarly, a third party stranger is precluded from questioning a remission order passed by the State Government which is in accordance with law. Therefore, dismissal of the petition at the threshold is sought., It is next averred that the petitioners have not pleaded how they have locus to seek a writ of certiorari for quashing the orders of remission passed by respondent No.1 with respect to the eleven convicts sentenced by the Special Judge, Greater Mumbai in Sessions Case No. 634 of 2004. The petitioners have not pleaded how their fundamental rights have been abridged or how they are aggrieved by the action of the State Government. Therefore, filing of the writ petition as Public Interest Litigation (in short, PIL) is an abuse of PIL jurisdiction and is motivated by political intrigues and machinations. In this regard, reliance has been placed on Tehseen Poonawalla v. Union of India, (2018) 6 Supreme Court Cases 72 (Tehseen) and Ashok Kumar., It is further submitted that the petitioners, not being aggrieved persons, have invoked the jurisdiction of the Supreme Court of India under Article 32 of the Constitution for extraneous purposes. As the petitioners are not the persons aggrieved, the writ petition is not maintainable. On the scope and ambit of the expression ‘person aggrieved’, reliance has been placed on State of Maharashtra v. M.V. Dabholkar, (1975) 2 Supreme Court Cases 702 (M.V. Dabholkar); Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed, (1976) 1 Supreme Court Cases 671 (Jasbhai Motibhai); and Thammanna v. K. Veera Reddy, (1980) 4 Supreme Court Cases 62 (Thammanna)., On merits, it is stated that one of the respondents or prisoners, namely Radheshyam Bhagwandas Shah, had filed Writ Petition (Criminal) No. 135 of 2022, inter alia, praying to consider his remission application. The Supreme Court of India by its order dated 13 May 2022 held that the policy applicable for deciding the remission application is the one which was in vogue at the time of conviction, i.e., Premature Release of Convicts Policy of 1992. Further, the Supreme Court of India held that for the purposes of Section 432 of the Criminal Procedure Code, the appropriate Government for considering the remission application is the State in which the offence was committed and not the State in which the trial was conducted and therefore directed the State of Gujarat to consider the application of the prisoner within a period of two months., Accordingly, the State of Gujarat considered the application of the prisoners as per Section 432 read with Section 435 of the Criminal Procedure Code along with the Premature Release of Convicts Policy of 1992. The State Government, by its Circular dated 09 July 1992, had issued a policy for early release of prisoners who have completed fourteen years of imprisonment and who were imposed punishment of life imprisonment. As per the aforesaid Policy of 1992, the Inspector General of Jail is mandated to obtain the opinion of the District Police Officer, District Magistrate, Jail Superintendent and Advisory Board Committee for early release of a convict. Thereafter, the Inspector General of Jail is mandated to give his opinion with the copy of the nominal roll and copy of the judgment and the recommendation of the Government. Further, the Jail Advisory Board at the time of consideration of the premature release application shall be guided by the Policy of 1992. A copy of the policy has been annexed as Annexure R‑2. It is further submitted that the State Government considered the case of all the eleven convicts as per the Policy of 1992. The remission in these cases was not granted under the Circular governing grant of remission to prisoners as part of celebration as Azadi Ka Amrit Mahotsav., The State Government in fact directed the Additional Director General of Prisons, Ahmedabad to send the necessary proposal of remission as per the direction of the Supreme Court of India before 31 May 2022 by letter dated 25 May 2022. A reminder was also sent on 08 June 2022. Ten proposals were received on 09 June 2022 and one proposal was received on 17 June 2022. The applications of the accused were considered according to the remission policy dated 09 July 1992 in accordance with the directions issued by the Supreme Court of India. As laid down in the aforesaid policy, the Department received the opinions of the concerned District Police Officer, District Magistrate and Chairman of Jail Advisory Board Committee. The State Government has considered the opinions of the Inspector General of Prisons, Gujarat State, Jail Superintendent, Jail Advisory Committee, District Magistrate, Police Superintendent, Central Bureau of Investigation, Special Crime Branch, Mumbai and Sessions Court, Mumbai (Central Bureau of Investigation). Therefore, the opinions of seven authorities were considered. Having regard to the provisions of Section 435 of the Criminal Procedure Code, sanction of the Government of India was also necessary. As the Central Bureau of Investigation was a central investigating agency, the State Government obtained the approval or suitable orders of the Government of India. The prisoners or convicts had completed fourteen years of imprisonment and the opinions of the concerned authorities were obtained as per Policy dated 09 July 1992. The same was submitted to the Ministry of Home Affairs, Government of India by letter dated 28 June 2022 and sought the approval or suitable orders of the Government of India. The Government of India by its letter dated 11 July 1992 conveyed its concurrence or approval. On considering all the opinions, the State Government decided to release the eleven convicts since they had completed fourteen years and above in jail and their behaviour was found to be good., Reliance has been placed on Jagdish and V. Sriharan to contend that if a policy which is beneficial to the convict exists at the time of consideration of the application of premature release then the convict cannot be deprived of such beneficial policy and that judicial review of the order of remission is not permissible in law. The Under Secretary has further proceeded to place the following facts to contend that the impugned orders are in accordance with law., I say that the relevant records pertaining to the application for remission concerning the prisoner Kesharbhai Khimabhai Vahoniya are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 11 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection to the premature release of the prisoner. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Kesharbhai Khimabhai Vahoniya is annexed herewith., I say that the relevant records pertaining to the application for remission concerning the prisoner Shaileshbhai Chimanlal Bhatt are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 11 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Shaileshbhai Chimanlal Bhatt is annexed herewith as Annexure RG‑4., I say that the relevant records pertaining to the application for remission concerning the prisoner Pradip Ramanlal Modhiya are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 11 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Pradip Ramanlal Modhiya is annexed herewith as Annexure RG‑5., I say that the relevant records pertaining to the application for remission concerning the prisoner Mitesh Chimanlal Bhatt are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 25 May 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 25 May 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Mitesh Chimanlal Bhatt is annexed herewith as Annexure RG‑6., I say that the relevant records pertaining to the application for remission concerning the prisoner Bipinchandra Kanaiyalal Joshi are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Bipinchandra Kanaiyalal Joshi is annexed herewith., I say that the relevant records pertaining to the application for remission concerning the prisoner Rajubhai Babulal Soni are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 11 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Rajubhai Babulal Soni is annexed herewith as Annexure RG‑8., I say that the relevant records pertaining to the application for remission concerning the prisoner Bakabhai Khimabhai Vahoniya are as follows: 1. Premature release application dated (date not specified). 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Bakabhai Khimabhai Vahoniya is annexed herewith as Annexure R., I say that the relevant records pertaining to the application for remission concerning the prisoner Govindbhai Akhambhai Nai (Raval) are as follows: 1. Premature release application dated 15 February 2021. 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Govindbhai Akhambhai Nai (Raval) is annexed herewith as Annexure R‑10., I say that the relevant records pertaining to the application for remission concerning the prisoner Jashvantbhai Chaturbhai Nai (Raval) are as follows: 1. Premature release application dated 15 February 2021. 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Jashvantbhai Chaturbhai Nai (Raval) is annexed herewith as Annexure R‑11., I say that the relevant records pertaining to the application for remission concerning the prisoner Rameshbhai Rupabhai Chandana are as follows: 1. Premature release application dated 25 February 2021. 2. Letter dated 10 March 2021 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 22 March 2021 from the Special Judge Sessions Court, Greater Bombay, considering the Government Resolution dated 11 April 2008 issued by the State of Maharashtra, stating that the prisoner should not be released prematurely. 4. Letter dated 07 March 2022 from the Superintendent of Police, Dahod, Gujarat, indicating no objection. 5. Letter dated 07 March 2022 from the Collector and District Magistrate, Dahod, Gujarat, indicating no objection. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 26 May 2022, unanimously in favour of the premature release of the prisoner. 8. Letter dated 09 June 2022 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, indicating no objection. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Rameshbhai Rupabhai Chandana is annexed herewith as Annexure R‑12., I say that the relevant records pertaining to the application for remission concerning the prisoner Radheshyam Bhagwandas Shah @ Lala Vakil are as follows: 1. Premature release application dated 01 August 2019. 2. Letter dated 14 August 2019 from the Superintendent, Mumbai, stating that the prisoner should not be released prematurely. 3. Letter dated 03 January 2020 from the Special Judge Sessions Court, Greater Bombay, objecting to the premature release of the prisoner. 4. Letter dated 13 February 2020 from the Superintendent of Police, Dahod, Gujarat, objecting to the premature release of the prisoner. 5. Letter dated 19 February 2020 from the Collector and District Magistrate, Dahod, Gujarat, objecting to the premature release of the prisoner. 6. Opinion of the Jail Superintendent, Godhra Sub‑Jail, Gujarat, indicating no objection. 7. Opinion of the Jail Advisory Committee dated 20 July 2021, nine out of ten members of the Committee recommended the premature release of the prisoner. 8. Letter dated 18 August 2021 to the Home Department, Government of Gujarat, from the Additional Director General of Police, Prisons and Correctional Administration, Ahmedabad, did not recommend the premature release of the prisoner. 9. Letter dated 28 June 2022 to the Ministry of Home Affairs, Government of India, from the Home Department, Government of Gujarat, recommending premature release of the prisoner and seeking approval or suitable orders from the Government of India. 10. Letter dated 11 July 2022 to the Home Department, Government of Gujarat, from the Ministry of Home Affairs, Government of India, approving the premature release of the prisoner. A copy of the relevant records concerning the prisoner Radheshyam Bhagwandas Shah @ Lala Vakil is annexed herewith as Annexure R‑13., Therefore, it has been contended that Public Interest Litigation is not maintainable as it is misconceived and devoid of any merit and as such is liable to be dismissed., Respondent No.2 has not filed any pleading in this matter. Even though respondents Nos.3 to 13 have filed their counter affidavits, we do not find it necessary to advert to the same as they would be replicating the stand of the State of Gujarat., We have heard learned counsel Miss Shobha Gupta for the petitioner in Writ Petition (Criminal) No. 491 of 2022; learned Additional Solicitor General, Sri S.V. Raju appearing on behalf of the State of Gujarat and Union of India; and learned senior counsel Mister Sidharth Luthra and other counsel for respondents Nos.3 to 13 and perused the material on record., We have also heard learned senior counsel and learned counsel Miss Indira Jaising, Miss Vrinda Grover and Miss Aparna Bhat, for the petitioners in the public interest litigations., We have perused the material on record as well as the judicial dicta cited at the Bar., Learned counsel for the petitioner in Writ Petition (Criminal) No. 491 of 2022, Miss Shobha Gupta, at the outset submitted that the en‑mass remission granted to respondents Nos.3 to 13 by orders dated 10 August 2022 has not only shattered the victim‑petitioner and her family but has also shocked the collective conscience of Indian society. She asserted that though the crime was committed in the State of Gujarat, the investigation and trial were carried out in the State of Maharashtra pursuant to the orders of the Supreme Court of India. Hence, in view of the unambiguous language of Section 432(7)(b) of the Criminal Procedure Code, only the State of Maharashtra would be the appropriate government which could have considered the applications filed by respondents Nos.3 to 13 seeking remission of their sentences., Learned counsel placed reliance on the following judgments to buttress her argument, namely State of Madhya Pradesh v. Ratan Singh, (1976) 3 Supreme Court Cases 470 (Ratan Singh); Government of Andhra Pradesh v. M.T. Khan, (2004) 1 Supreme Court Cases 616 (M.T. Khan); Hanumant Dass v. Vinay Kumar, (1982) 2 Supreme Court Cases 177 (Hanumant Dass) and V. Sriharan., According to learned counsel, once a competent court in the State of Maharashtra had tried and convicted the accused then that State is the appropriate Government. Therefore, the orders of remission passed by the State of Gujarat in respect of respondents Nos.3 to 13 are without jurisdiction and a nullity and thus are liable to be quashed., As regards the applicability of the relevant remission policy, learned counsel for the petitioner submitted that since the appropriate government in the instant case is the State of Maharashtra, the remission policy of the State of Maharashtra would be applicable. Thus, the remission policy of the State of Gujarat dated 09 July 1992 would be wholly inapplicable. It was contended that the remission policy dated 09 July 1992 of the State of Gujarat was not even in existence as on the date for consideration of the remission applications as it was scrapped by way of a circular dated 08 May 2014 pursuant to the letter of the Central Government circulated to all the States and Union Territories requiring the implementation of the judgment of the Supreme Court of India in Sangeet v. State of Haryana, (2013) 2 Supreme Court Cases 452 (Sangeet), wherein the Supreme Court of India held that before actually exercising the power of remission under Section 432 of the Criminal Procedure Code, the appropriate government must obtain the opinion of the presiding judge of the convicting or confirming court and that remission shall not be granted in a wholesale manner, such as on the occasion of Independence Day etc. Pursuant to the cancellation of the policy dated 09 July 1992, the State of Gujarat came up with a new remission policy dated 23 January 2014, and even this policy would not entitle remission of the accused herein for two reasons: firstly, because the remission policy of the State of Maharashtra would be applicable as it is the appropriate government, and secondly, the 2014 policy of the State of Gujarat bars the grant of remission to convicts of heinous crimes., Relying on the opinion of the Special Judge, Sessions Court, Greater Mumbai, it was submitted that the Special Judge had rightly stated that the remission policy applicable in the present case would be the policy dated 11 April 2008 of the State of Maharashtra, in respect of which the circular dated 13 June 2008 of the State of Maharashtra was issued, wherein a convict of communal crime, gang rape and murder would fall under the categories 2(c), 2(d) and 4(e) of the policy which prescribes that the minimum period of imprisonment to be undergone by the convict before remission can be considered would be twenty‑eight years. Thus, the respondents‑convicts were not entitled to be granted remission as they had not completed the minimum period of imprisonment as per the applicable remission policy.
|
id_1684
| 2
|
It was further contended that the remission orders under challenge failed to meet the criteria laid down by the Supreme Court of India in Sangeet and Ram Chander vs. State of Chhattisgarh, (2022) 12 SCC 52 (Ram Chander), wherein it has been stated that the appropriate government must obtain the opinion of the Presiding Judge of the convicting court before deciding the remission application. The State of Gujarat granted remission to all the convicts by completely ignoring the negative opinions expressed by two major stakeholders, namely the Presiding Judge of the convicting court in Mumbai and the prosecuting agency, Central Bureau of Investigation., Reliance was placed on the decisions of the Supreme Court of India in State of Haryana vs. Mohinder Singh, (2000) 3 SCC 394 (Mohinder Singh); Sangeet; Ratan Singh; and Laxman Naskar vs. State of West Bengal, (2000) 2 SCC 595 (Laxman Naskar) to emphasize that a convict cannot claim remission as a matter of right. The remission policies only give a right to the convict to be considered and do not provide an indefeasible right to remission., Further reference was made to the dicta of the Supreme Court of India in Mohinder Singh; Epuru Sudhakar vs. State of Andhra Pradesh, (2006) 8 SCC 161 (Epuru Sudhakar); Maru Ram; Sangeet; Ratan Singh and Laxman Naskar to contend that the decision to grant remission should be well‑informed, reasonable and fair and that the power cannot be exercised arbitrarily., Emphasising the gravity of the offences in this case and the grotesque nature of the crimes committed by the accused, learned counsel Ms. Shobha Gupta submitted that while considering the application for remission, the appropriate government was required to bear in mind the effect of its decision on the victim and the family of the victims, on society as a whole and on the precedent it would set for the future. To buttress the submission, she relied on Epuru Sudhakar, Swamy Shraddhananda (2) vs. State of Karnataka, (2008) 13 SCC 767 (Shraddhananda), and Jagdish. Reliance was also placed on the decision in Laxman Naskar wherein the Supreme Court of India discussed the factors to be considered before granting remission., It was urged that the prerogative power of remission is not immune from judicial review, vide Epuru Sudhakar wherein it was observed that judicial review of the order of remission is available on the following grounds: non‑application of mind; order is mala fide; order has been passed on extraneous or wholly irrelevant considerations; relevant materials kept out of consideration; order suffers from arbitrariness., It was contended that in the present case remission was granted to all the convicts mechanically and without application of mind to each case and that the relevant factors were not considered. The State Government failed to consider the relevant material and make an objective assessment while considering the applications of the convicts for remission. The nature and gravity of the crime, the impact of the remission orders on the victim and her family, witnesses and society at large, were not considered. Merely good behaviour in jail and completion of fourteen years in jail are not the only prerequisites while considering the application for premature release of the convicts., Attention was drawn to the fact that respondent No.3 approached the Gujarat High Court by way of Criminal Application No. 4573 of 2019 seeking a direction to the State Government to consider his application for remission. The Gujarat High Court, vide order dated 17 July 2019, dismissed the application in view of Section 432 of the Criminal Procedure Code. Respondent No.3’s second application was also dismissed vide order dated 13 March 2020 passed by the Gujarat High Court. Within fourteen days of the first order, respondent No.3 approached the Government of Maharashtra by way of an application dated 1 August 2019. Upon his application, opinion was sought from (i) the investigating agency, Central Bureau of Investigation, and (ii) the Presiding Officer of the convicting court (Special Judge, Sessions Court, Greater Mumbai), both of whom opined negatively against remission. Further, the Superintendent of Police, Dahod, vide letter dated 3 February 2020 gave a negative opinion noting that the victim and her relatives stated that respondent No.3 should not be released. The District Magistrate, Dahod, also gave a negative opinion vide letter dated 19 February 2020, as did the Jail Advisory Committee at its meeting held on 20 July 2021. Thereafter respondent No.3 approached the Supreme Court of India by filing Criminal Petition No. 135 of 2022 and, by order dated 13 May 2022, the Supreme Court directed the State of Gujarat to consider respondent No.3’s application within two months from the date of the order., In the meanwhile the remaining convicts applied separately for remission in February 2021. The Presiding Officer (Special Judge, Greater Mumbai) vide a common letter dated 22 March 2021 gave a negative opinion against the premature release of the remaining ten convicts, respondents Nos. 4 to 13. Their cases were kept pending for one year and only on 7 March 2022 did the new Superintendent of Police, Dahod, give a no‑objection for the premature release of all the convicts by separate letters of the same date. The District Magistrate, Dahod, also gave a positive opinion in favour of the premature release of all the convicts. On 26 May 2022, a meeting of the Jail Advisory Committee of Gujarat was held and all the members gave a positive opinion. The Additional Director General of Police, Prisons and Correctional Administration vide letter dated 9 June 2022 gave a positive opinion and raised no objection for the release of the ten convicts., Although the reference by the Jail Advisory Committee to the State Government was only qua respondents Nos. 4 to 13, the State Government erroneously recommended the name of respondent No.3 also to the Central Government for remission even in the absence of any application pending before the State Government., Learned counsel for the petitioner next submitted that the Presiding Judge’s reasoned negative opinion opposing the premature release was disregarded and this was contrary to the mandate of Section 432(2) of the Criminal Procedure Code. The remission orders dated 10 August 2022 of respondent No.1 are in the teeth of the negative opinion of the Presiding Judge, Special Judge (CBI), Sessions Court, Greater Mumbai, dated 3 January 2020 and 22 March 2021, thereby defeating the purpose of Section 432(2) of the Criminal Procedure Code. The remission orders dated 10 August 2022 are conspicuously silent about the opinion of the Presiding Judge that is mandatorily required under Section 432(2) of the Criminal Procedure Code. This amounts to an erasure of record by removing from consideration a document that is statutorily mandated to be considered and judicially held to be determinative. Reliance was placed on Ram Chander to contend that the opinion of the Presiding Judge of the court that convicted the offender will have a determinative effect on the exercise of executive discretion under Section 432 of the Criminal Procedure Code. Reference was also made to the decision of the Supreme Court of India in V. Sriharan, wherein a Constitution Bench held that the procedure stipulated in Section 432(2) of the Criminal Procedure Code is mandatory and that the opinion of the Presiding Judge of the court which tried the convict is critical and an essential safeguard to check that the power of remission is not exercised arbitrarily., It was next contended that the premature release was granted illegally as the imprisonment in default for non‑payment of fine was not served. The Trial Court, while sentencing the respondents‑convicts, imposed a fine of Rs 2,000 on each of them for each of the fourteen counts of murder and three counts of rape and, in the event of default in payment of said fine, sentenced them to suffer rigorous imprisonment for a further period of two years each for each count. The total fine payable by each convict amounted to Rs 34,000, and in default they were liable to serve rigorous imprisonment for a period of thirty‑four years. The Trial Court directed that the substantive sentences shall run concurrently and that any period of detention undergone by the convicts during investigation, enquiry, trial shall be set off against the terms of imprisonment, not being imprisonment in default of payment of fine. As per the nominal roll of respondents Nos. 3 to 13, none of them had paid the fine, making them liable to serve the penalty of rigorous imprisonment for default in payment of fine. However, the respondents have neither paid the fine nor served any sentence in default of non‑payment of fine. It was submitted that the penalty of imprisonment for default in payment of fine stands on a different footing from the substantive sentence of imprisonment for the offence. While under Section 432 of the Criminal Procedure Code the Government has the power to remit punishment for the offence, the executive discretion does not extend to waiving the penalty of imprisonment for default in payment of fine under Section 64 of the Indian Penal Code. Reliance was placed on Sharad Hiru Kolambe vs. State of Maharashtra, (2018) 18 SCC 718 (Sharad Kolambe) and Shantilal vs. State of Madhya Pradesh, (2007) 11 SCC 243 (Shantilal)., It was asserted that respondent No.1 while granting premature release failed to apply its mind and address the determinative factors outlined by the Supreme Court of India in Laxman Naskar. Thus, the orders of remission are vitiated by the vice of arbitrariness for non‑consideration of relevant facts and factors. A bare perusal of the orders dated 10 August 2022 would make it clear that premature release was granted mechanically and arbitrarily, without giving due consideration to the factors enumerated in Laxman Naskar for each convict. The orders are silent on the behaviour and acts of misconduct of each convict, including offences committed while on parole/furlough, namely: (i) Case Crime No. 1121001200158/2020 was registered against convict Mitesh Chimanlal Bhatt under Sections 354, 304 and 306 of the Indian Penal Code, committed on 19 June 2020 during parole/furlough; and (ii) Case Crime No. 02/2015 was registered against convict Rameshbhai Rupabhai Chadana under the Prisons Act., It was further submitted that where a convict has been sentenced to more than one count of life imprisonment, remission must be granted for each count of life imprisonment. The respondents‑convicts were sentenced on fifteen counts of life imprisonment. However, the orders dated 10 August 2022 have not granted remission for each of the fifteen counts and constitute a generic blanket order, making the release of the convicts illegal and arbitrary., Respondent No.3 approached the Supreme Court of India in Criminal Petition No. 135 of 2022 without disclosing that he had already acted on the judgment of the Gujarat High Court dated 17 July 2019 and had submitted his application to the Home Department, State of Maharashtra, where the major stakeholders had written against the grant of remission to him. When the matter was listed before the Supreme Court, no notice was issued to the petitioner‑victim and she was not heard., The orders dated 10 August 2022 have blatantly ignored the grave apprehension regarding the safety and security of the victims‑survivors raised by public functionaries whose opinions are required to be taken into account by the State of Gujarat before granting premature release as per the 1992 policy. The Supreme Court in a catena of judgments such as Epuru Sudhakar and Rajan vs. Home Secretary, Home Department of Tamil Nadu, (2019) 14 SCC 114 (Rajan) has highlighted the importance of considering the impact of premature release on the victims in particular and on society in general. The Superintendent of Police, Dahod, on 3 February 2020 had recommended against the release of Radheyshyam Bhagwandas Shah, citing the possibility of peace being disturbed. The Sessions Judge, Panchmahal at Godhra also raised questions regarding the security of the victim petitioner., Learned counsel next asserted that the en‑masse and non‑speaking sanction of the Central Government dated 11 July 2022 under Section 435(1)(a) of the Criminal Procedure Code does not meet the statutory requirement of consultation. The sanction conveys approval for the premature release of eleven convicts without any reason as to why each convict is deemed fit for remission. Thus, the approval was granted without considering the relevant factors outlined in Laxman Naskar., Non‑application of mind is evident in the non‑speaking and stereotyped orders dated 10 August 2022 which are bereft of any reason. The orders are devoid of grounds as to why the convicts were found fit for remission. All eleven orders are verbatim reproductions of each other, differing only in the name and personal details of the convicts. The recommendations of the Jail Advisory Committee dated 26 May 2022 as regards remission of respondents Nos. 3 to 13 are untenable, being arbitrary and mechanical and vitiated by non‑application of mind. The opinions are verbatim and mechanical reproductions that show no independent consideration of the facts of each case., With the aforesaid submissions, it was prayed that Criminal Petition No. 491 of 2022 be allowed and a writ, order or direction be issued quashing the orders dated 10 August 2022 passed by the State of Gujarat by which the convicts in Sessions Case No. 634 of 2004, Mumbai (respondents Nos. 3 to 13) were released prematurely., Learned senior counsel Ms. Indira Jaising appearing for the petitioner in Criminal Petition No. 326 of 2022, at the outset submitted that the petitioner is a Member of Parliament and a public personality and consequently possesses locus standi to file this petition as a bona fide citizen of India. The petitioner seeks to discharge her fundamental duty under Article 51A(e) of the Constitution of India, seeking to promote harmony and the spirit of brotherhood amongst the people of India, as well as to denounce the derogation of the dignity of women. The petitioner seeks to uphold the rule of law and thus is not a mere busybody., The following submissions were made to contest the orders of remission: (i) when the actions of the State cause some harm to the general public, an action by a concerned citizen would be maintainable, relying on B.P. Singhal vs. Union of India, (2010) 6 SCC 331; (ii) the impugned decisions of remission are characterised by arbitrariness and mala fides and bear no consideration of relevant factors; the power of the executive must be exercised in line with constitutional ideals and for the benefit of the public, relying on Maru Ram and S.P. Gupta vs. Union of India; (iii) there exists no statutory right of appeal against an order of remission. The only avenue available to assail an order of remission is either under Article 32 or Article 226, relying on Epuru Sudhakar and Ram Chander. The jurisdiction of the Supreme Court of India is not ousted by the existence of alternative legal remedies, relying on a Constitution Bench decision in Kavalappara Kottarathil Kochuni vs. States of Madras and Kerala, (1960) 3 SCR 887 (Kochuni); (iv) the present proceedings pertain to administrative law and not criminal law and therefore the principle of being a stranger to the criminal proceeding does not apply, noting that the Supreme Court has entertained petitions filed by strangers in criminal matters, as in K. Anbazhagan vs. Superintendent of Police, (2004) 3 SCC 767; (v) such exercises of executive power may be challenged on the grounds laid down in Epuru Sudhakar and Maru Ram; (vi) an important question of law arises whether it is appropriate to grant remission after a period of fourteen years to convicts of heinous crimes and whether the victims must be heard and given due consideration prior to the grant of remission, and whether such executive actions comply with constitutional morality; (vii) the crimes committed must be situated in the larger context of sectarian and communal violence that was ensuing in the 2002 riots in Gujarat State, noting that the crimes were specifically targeted at the victim on the basis of her religion and gender and constitute crimes against humanity. Reliance was placed on Sanaboina Satyanarayana vs. Government of Andhra Pradesh, (2003) 10 SCC 78, wherein a Government Order excluded from the scope of remission prisoners who had committed crimes against women and were sentenced to life imprisonment; (viii) the Executive is bound not merely by provisions of the Criminal Procedure Code but also by the overarching spirit of the Constitution that seeks to promote the upliftment of women, children and minorities and to protect these groups from further vulnerability and marginalisation; (ix) in accordance with the aforementioned constitutional principles, remission to persons sentenced to life imprisonment and accused of offences under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, the Explosive Substances Act and the Indian Arms Act, as well as crimes against women under Sections 376 and 354 of the Indian Penal Code, must not be permissible. Factors such as the opinion of the Presiding Judge, public interest, potential for recidivism, impact on the victims and on society and the nature of the offence must be borne in mind by the State, as held in Epuru Sudhakar, Sanaboina Satyanarayana and Zahid Hussain vs. State of West Bengal, 2001 (3) SCC 750 (Zahid Hussain). The non‑consideration of these factors proves the mala fide, arbitrary and unreasonable manner in which the impugned orders were passed; (x) the 1992 Policy of remission of the State of Gujarat does not contain substantive guidelines pertaining to remission and merely deals with procedural formalities. The 2014 Policy is the first instance at which categories of crimes for which remission may not be granted were outlined; (xi) the grant of remission to respondents Nos. 3 to 13 is in violation of India’s obligations under international law, specifically the International Covenant on Civil and Political Rights and the Convention on the Elimination of All Forms of Discrimination Against Women, as rape was used as a tool of oppression and the victim suffered significant trauma; (xii) the grant of remission in the instant case is in violation of the obligation to prevent crimes against humanity, which forms part of the norm of jus cogens. Reliance was placed on State of Punjab vs. Dalbir Singh, (2012) 3 SCC 346 (Dalbir Singh); (xiii) the acts of violence committed in Gujarat in 2002 are crimes against humanity owing to their widespread nature and communal motivations, and remission must not be granted to perpetrators of crimes of such gravity., With the above submissions learned senior counsel for the petitioners sought quashing of the impugned orders., Learned counsel Ms. Vrinda Grover for the petitioner in Criminal Petition No. 352 of 2022 submitted that it was absolutely necessary to consider the opinion of the Presiding Judge. Reliance was placed on Ram Chander and V. Sriharan. Her further submissions are recorded as follows: (i) the Presiding Judge, namely the Special Judge (CBI), Sessions Court, Mumbai gave negative opinions dated 3 January 2020 and 22 March 2021 as to grant of remission to respondents Nos. 3 to 13. The opinion was well‑reasoned and took into account all relevant factors, but was completely disregarded by the respondent State; (ii) a fine of Rs 34,000 per person was imposed on each convict. They had defaulted in paying these fines and thus would be required to undergo rigorous imprisonment for a further period of 34 years. The Trial Court clarified that these sentences were substantive in nature and would run concurrently. Reliance was placed on Sharad Kolambe and Shantilal; (iii) reiterating that the remission orders are arbitrary by virtue of non‑consideration of relevant factors, it was urged that the criteria outlined in Laxman Naskar were not considered at all. Reliance was placed on Mohinder Singh, wherein it was held that the decision to grant remission must be reasonable, well‑informed and fair. The non‑application of mind and the mechanical nature of the remission orders utterly belie these principles; (iv) only four documents have been referred to: (1) the order of the Supreme Court dated 13 May 2022, (2) the letter of the Additional Director General of Police and Inspector General of Prisons, State of Gujarat at Ahmedabad, (3) the Department Circular dated 9 July 1992 and (4) the letter of the Ministry of Home Affairs, Government of India in the impugned orders of remission. The non‑consideration of determinative factors has rendered the remission orders mechanical and arbitrary, with reliance placed on the untenable and unlawful en‑masse approval of the Central Government; (v) one of the criteria highlighted in Laxman Naskar is the possibility of reformation and recidivism. These factors have been given no consideration as there is no mention of the convicts’ behaviour while in prison, as well as offences committed while out on parole/furlough. A case has been registered against one convict under Sections 304, 306 and 354 Indian Penal Code while on parole. A range of punishments were imposed on the convicts in prison; therefore, the possibility of recidivism cannot be entirely ruled out; (vi) there is a real and grave apprehension of danger to the victim if the convicts are released into society. This has been reflected in the recommendation of the Superintendent of Police, Dahod as well as the questions raised by the Principal and Sessions Judge, Panchmahal at Godhra in the Jail Advisory Committee meeting dated 26 May 2022; (vii) remission must be granted for each particular count of life imprisonment, as all of these are superimposed over each other. Remission granted qua one sentence does not automatically extend to the others. A generic, mechanical and unreasonable blanket order of remission has been passed by the State, as remission is not stated to have been granted for all of the life sentences of each convict; (viii) Section 435(1)(a) of the Criminal Procedure Code makes it mandatory for the State Government to consult the Central Government regarding the exercise of power to grant remission. But the en‑masse and non‑speaking nature of the sanction granted by the Central Government merely conveys approval of the premature release of the convicts, which does not meet the requirement of consultation; (ix) further, the opinion of the Sessions Judge, Panchmahal, Godhra is of a casual and perfunctory character, that does not pay heed to the heinous nature of the crimes committed; (x) it was further submitted that the remission orders, being unreasoned, untenable and vitiated by arbitrariness and mala fides, require judicial intervention., Learned counsel for the petitioner in Criminal Petition No. 319 of 2022, Ms. Aparna Bhat, submitted that the writ petition has been filed purely in the interest of the general public and out of concern for the impact on society if the convicts were released. There is no political agenda behind the filing; the petitioner is a member of a national political party and an advocate for women’s rights., Sri Mohammad Nizamuddin Pasha, learned counsel appearing on behalf of the petitioner in Criminal Petition No. 403 of 2022, submitted that cases which are at stages prior to conviction, i.e., investigation and trial, must be treated as being on a different footing as guilt has not been established and the fair trial rights of the accused still subsist. However, there is no right to remission post‑conviction as held in V. Sriharan. It is only upon conviction that the need for the accused to remain in prison becomes a concern of society. All theories of punishment, including retributivism and utilitarianism, emphasize the impact on society as being of primary importance. Reliance was placed on T.K. Gopal vs. State of Karnataka, (2000) 6 SCC 168 (T.K. Gopal); Narinder Singh vs. State of Punjab, (2014) 6 SCC 466 (Narinder Singh); Shailesh Jasvantbhai vs. State of Gujarat, (2006) 2 SCC 359 (Shailesh Jasvantbhai); and Ahmed Hussain Vali Mohammed Saiyed vs. State of Gujarat, (2009) 7 SCC 254 (Mohammed Saiyed)., Sri S.V. Raju, learned Additional Solicitor General of India, appearing on behalf of the State of Gujarat and Union of India, submitted that writ petitions filed by persons other than the victim are not maintainable. The petitioners are strangers and have no locus standi to challenge the remission orders passed by the State of Gujarat. The petitioners are in no way connected with the proceedings which convicted the respondents nor the proceedings which culminated in the grant of remission to the convicts. Reliance was placed on the decisions of the Supreme Court of India in Rajiv Ranjan; Gulzar Ahmed Azmi; Simranjit Singh and Ashok Kumar to contend that no third‑party interference in criminal matters is permissible in law.\nReferring to Criminal Petition No. 319 of 2022, it was contended that nowhere has the petitioner, namely Subhasini Ali, pleaded how her fundamental rights had been abridged or how she was aggrieved by the action of the State Government. The petitioner was nothing but an interloper and a busybody and not a person aggrieved as per the dicta of the Supreme Court of India in M. V. Dabholkar and Jasbhai Motibhai. Thus, the public interest litigation filed by such a person is an abuse of the jurisdiction of the Supreme Court of India and against the principles laid down in Tehseen and Ashok Kumar. Therefore, the Additional Solicitor General sought dismissal of all the public interest litigations challenging the impugned orders of remission on the ground of maintainability.\nIt was next contended that there was no illegality in the orders granting remission to respondents Nos. 3 to 13, dated 10 August 2022.
|
id_1684
| 3
|
No.135 of 2022 vide judgment dated 13.05.2022 had held that the policy which would be applicable for deciding the remission application was the one which was in vogue at the time of conviction i.e., the premature release policy of 1992 and that for the purposes of Section 432 of the Code of Criminal Procedure, the appropriate government for considering the remission application is that State in which the offence was committed and not the State in which the trial was conducted and therefore, had directed the State of Gujarat to consider the application of respondent No.3, Radheshyam Bhagwandas Shah. Accordingly, the respondent State of Gujarat had considered the application of the convict as per the procedure prescribed under Section 432 of the Code of Criminal Procedure read with Section 435 of the Code of Criminal Procedure, along with the Premature Release of Convicts Policy of 1992., The State Government considered the cases of all eleven prisoners as per the policy of 1992 and remission was granted on 10.08.2022., That further, the Orders dated 10.08.2022 were passed after duly considering the opinions expressed by Inspector General of Prisons, Gujarat State; Jail Superintendent; Jail Advisory Committee, District Magistrate; Superintendent of Police, Central Bureau of Investigation, Special Crime Branch, Mumbai; and the Special Court, Mumbai (Central Bureau of Investigation). That as per Section 435 of the Code of Criminal Procedure, it is indispensable to obtain the sanction of the Government of India in cases in which the investigation of the offence was carried out by a central investigation agency. In the present case, the investigation was carried out by the Central Bureau of Investigation, hence, the State Government obtained the approval of the Government of India., It was next submitted that respondent Nos.3 to 13 had completed more than fourteen years in custody, that their behaviour had been good and the opinions of the concerned authorities had been obtained as per the policy of 09.07.1992. The State Government submitted the opinions of the concerned authorities to the Ministry of Home Affairs, Government of India vide letter dated 28.06.2022 and sought the approval of the Government of India which conveyed its concurrence/approval under Section 435 of the Code of Criminal Procedure for the premature release of eleven convicts vide letter dated 11.07.2022. Hence, after following the due procedure, Orders were issued on 10.08.2022 to release the convicts which would not call for any interference by the Supreme Court of India., Reliance was placed on the judgment of the Supreme Court of India in Jagdish wherein it was held that if a policy which is beneficial to the convict exists at the time of consideration of his application for premature release, then the convict cannot be deprived of such a beneficial policy. It was held in the said case that, in case a liberal policy prevails on the date of consideration of the case of a lifer for premature release, he should be given the benefit thereof. That bearing in mind such considerations, the applications of respondent Nos.3 to 13 for remission were considered and decided., That the crime in the instant case was admittedly committed in the State of Gujarat and ordinarily, the trial was to be concluded in the same State and in terms of Section 432(7) of the Code of Criminal Procedure, the appropriate government in the ordinary course would be the State of Gujarat. However, the trial in the instant case was transferred under exceptional circumstances by the Supreme Court of India to the neighboring State of Maharashtra for the limited purpose of trial and disposal by an order dated 06.08.2004 but after the conclusion of trial and the prisoners being convicted, the matter stood transferred to the State where the crime was committed and thus, the State of Gujarat was the appropriate government for the purpose of Section 432(7) of the Code of Criminal Procedure., It was submitted that the Orders dated 10.08.2022 were passed by the Government of Gujarat after following the due procedure laid down in this regard and on an application of mind. Therefore, the same do not call for any interference by the Supreme Court of India in these petitions., Learned Counsel for respondent No.3, Sri Rishi Malhotra at the outset attacked the maintainability of the writ petitions on the ground that in substance, the petitions seek to challenge the judgment of the Supreme Court of India dated 13.05.2022 in Writ Petition (Criminal) No.135 of 2022; that the same is impermissible and is in the teeth of the judgment of a Constitution Bench of the Supreme Court of India in Rupa Ashok Hurra vs. Ashok Hurra, (2002) 4 SCC 388, wherein it has been held that a writ petition assailing the judgment or order of the Supreme Court of India after the dismissal of the Review Petition is not maintainable. Thus, the only remedy, if any, available to the petitioner‑victim herein against the dismissal of the Review Petition, is to file a Curative Petition as propounded by the Supreme Court of India in the case of Rupa Ashok Hurra., Sri Rishi Malhotra further submitted that in this proceeding the Supreme Court of India cannot sit over the judgment passed by another coordinate bench. It was further submitted that this Court by its judgment dated 13.05.2022 was right in categorically directing the State of Gujarat to consider the application for premature release of respondent No.3 in terms of the policy dated 09.07.1992 which was applicable on the date of conviction. That after duly taking into account the fact that respondent No.3 had undergone over fifteen years of imprisonment and that no objections were received from the Jail Superintendent, Godhra and that nine out of ten members of the Jail Advisory Committee had recommended his premature release. That coupled with the aforesaid facts the Home Department of the State of Gujarat as well as the Union Government had recommended and approved the premature release of respondent No.3. This clearly demonstrates that the remission order was correct. Further, it is nowhere mentioned in the 1992 policy that all stakeholders must give a unanimous opinion for the release of the convict. All it says is that the State Government should collate various opinions from different quarters in order to arrive at a decision., As regards the contention of learned counsel for the petitioner‑victim to the effect that the Orders are illegal inasmuch as those were passed without consulting the Presiding Judge of the convicting court as required under Section 432(2) of the Code of Criminal Procedure, it was submitted that the said provision categorically stipulates that the appropriate government may require the Presiding Judge of the Trial Court to give his opinion, hence obtaining such an opinion is not mandatory; whereas, Section 435 of the Code of Criminal Procedure uses the word shall in respect to the State Government to act only after consultation with the Central Government. The legislature is conscious to use the words may and shall whenever it deems appropriate and necessary and that the said procedure has been followed in the instant case., At the outset, learned senior counsel appearing for respondent No.13, Sri Sidharth Luthra contended that a writ petition does not lie against the final order of the Supreme Court of India, thus the petitioners could have only filed a Curative Petition. He further submitted as follows: i) Reliance was placed on the decision of the Supreme Court of India in Rupa Ashok Hurra, where it was held that a writ petition under Article 32 assailing a final judgment of the Supreme Court of India is not maintainable. Since the Review Petition against the Order dated 13.05.2022 has been dismissed by the Supreme Court of India, similar contentions cannot be re‑agitated in the guise of the present writ petition. Reliance was also placed on the decision of the Supreme Court of India in Naresh Shridhar Mirajkar vs. State of Maharashtra, AIR 1967 SC 1, where it has been held that a writ shall not lie against an order of a Constitutional Court. It was thus submitted that the order dated 13.05.2022 has attained finality and cannot be questioned by way of a writ petition under Article 32. Furthermore, in view of the Rules framed by the Supreme Court of India, Order XLVIII thereof lays down how an order of the Supreme Court of India can be questioned by means of a Curative Petition and thus, a natural corollary is that the same cannot be done through a writ petition., ii) As regards the issue of appropriate government and appropriate policy, learned senior counsel Sri Luthra submitted that the said issues stood settled in view of the Supreme Court of India's Order dated 13.05.2022. The judgments of the Supreme Court of India in Rashidul Jafar vs. State of Uttar Pradesh, 2022 SCC OnLine SC 1201; State of Haryana vs. Raj Kumar, (2021) 9 SCC 292; and Hitesh vs. State of Gujarat (Writ Petition (Criminal) No.467/2022) were pressed into service wherein it had been held that the policy as on the date of conviction would apply, and therefore, the 1992 Policy of the State of Gujarat will apply for the grant of remission in the present case., iii) Learned senior counsel thereafter raised the plea that in India, a reformative/rehabilitative and penal sentencing policy is followed and not one which is punitive in nature. The same was reiterated when the Model Prison Act, 2023 was finalized which aims at reforming prison management and ensuring the transformation of inmates into law‑abiding citizens and their rehabilitation in society. Furthermore, in the case of Vinter vs. The United Kingdom (Applications Nos.66069/09, 130/10 and 3896/10), (2016) III ECHR 317, in the context of rehabilitation and reformation it was held by the European Court of Human Rights that, moreover, if such a person is incarcerated without any prospect of release and without the possibility of having his life sentence reviewed, there is the risk that he can never atone for his offence: whatever the prisoner does in prison, however exceptional his progress towards rehabilitation, his punishment remains fixed and unreviewable., Learned senior counsel submitted that respondent No.13 had exhibited unblemished behaviour in prison and there was no criminality attached to his conduct in prison., iv) Sri Luthra refuted the argument of the petitioners that in the light of the grievous nature of the offence, the convicts herein do not deserve remission. At the stage of remission, the length of sentence or the gravity of the original crime cannot be the sole basis for refusing premature release as held in Satish vs. State of Uttar Pradesh, (2021) 14 SCC 580. Therefore, any argument regarding the factual nature of the crime or the impact it had on society are not relevant for consideration of remission was the submission of Sri Luthra., v) That it is open for the High Court as well as the Supreme Court of India to modify the punishment by providing for a specific period of incarceration without remission, considering the purported heinous nature of the offence but neither the High Court nor the Supreme Court of India chose to exercise the said power to incarcerate the private respondents herein for a duration which was non‑remittable. This shows that the aforesaid argument advanced by the petitioner is only a red herring., vi) It was emphasized that an order of remission passed by an authority merely affects the execution of the sentence, without interfering with the sentence passed by the Court. Therefore, since the matter has already attained finality, it is not possible to question the validity of such an order on factual grounds alone, such as the nature of crime, impact on society and society’s cry for justice., vii) Learned senior counsel submitted that the mere fact that fine had not been paid or that there was a default in payment of the fine does not impact the exercise of the power of remission. The sentence is something which an offender must undergo unless it is set aside or remitted in part or in whole either in appeal, or in revision, or in other appropriate judicial proceedings or otherwise, whereas, a term of imprisonment ordered in default of payment of fine stands on a different footing vide Shantilal; Abdul Gani vs. State of Madhya Pradesh, (1950) SCC OnLine MP 119 and Shahejadkham Mahebubkham Pathan vs. State of Gujarat, (2013) 1 SCC 570. Further, reliance was placed on Sharad Kolambe, wherein it was observed by the Supreme Court of India that, if the term of imprisonment in default of payment of fine is a penalty which a person incurs on account of non‑payment of fine and is not a sentence in strict sense, imposition of such default sentence is completely different and qualitatively distinct from a substantive sentence., Learned senior counsel appearing for respondent No.7, Mrs. Sonia Mathur, while adopting the submissions of other senior counsel further contended as under: That as per Section 432(7)(b) of the Code of Criminal Procedure and the judicial precedent set in Radheshyam Bhagwandas Shah, the appropriate government would be the State of Gujarat. The said judgment has attained finality as the Review Petition filed against the said judgment was dismissed by the Supreme Court of India on 13.12.2022. Thus, the said judgment must be followed for the sake of judicial propriety., As to the nature of the requirement under Section 432(2) of the Code of Criminal Procedure, i.e., whether mandatory or directory, it was submitted that as observed by the Supreme Court of India in Ram Chander the opinion so obtained is not to be mechanically followed and the government has the discretion to seek an opinion afresh. That the said view would demonstrate that the discretion vests with the concerned government as to whether or not to seek and rely upon the opinion of the Presiding Judge of the Trial Court., As regards the contentions of the learned counsel for the petitioner‑victim as to non‑payment of fine, it was submitted that a fine of Rs.6,000 was paid by respondent No.7 without any objection on 27.09.2019 before the Sessions Court, Greater Mumbai. However, without prejudice to the said payment, there is no provision in the Prison Manual of Gujarat, which bars remission from being granted if the fine is not paid. The grant of remission cannot be restricted just because a convict is not financially capable to bear the fine. The same would cause discrimination based on the economic and financial capacity of a convict to pay fine, resulting in the violation of Articles 14 and 21 of the Constitution., We have heard learned counsel for the other respondents. With the aforesaid submissions, it was prayed that these writ petitions be dismissed., Reply Arguments: Ms. Shobha Gupta, learned counsel for the petitioner‑victim submitted in her rejoinder on the point that the writ petition was maintainable under Article 32 of the Constitution as follows: (i) that the order of grant of remission being an administrative order, there was neither a statutory nor substantive right of appeal available to the aggrieved parties. The only remedy available was to file a writ petition under Article 226 of the Constitution before the High Court of Gujarat, or to file a writ petition before the Supreme Court of India under Article 32 of the Constitution., (ii) that the Supreme Court of India has on multiple occasions entertained writ petitions under Article 32 of the Constitution in those cases where there existed a gross violation of fundamental rights, or when an executive or administrative decision shocked the conscience of the public, the nation or of this Court. In this context, reliance was placed on the judgments of the Supreme Court of India in Epuru Sudhakar; Satpal vs. State of Haryana, (2000) 5 SCC 170 and Mohammed Ishaq vs. S. Kazam Pasha, (2009) 12 SCC 748. It was submitted that a similar issue of maintainability arose in Mohammed Ishaq, wherein the Supreme Court of India observed that the mere existence of an alternative remedy in the form of Article 226 does not preclude an aggrieved person from approaching this Court directly under Article 32. The rule requiring the exhaustion of alternative remedies was described as being one of convenience and discretion as opposed to being absolute or inflexible in nature., (iii) that the Supreme Court of India had in the past entertained a writ petition filed by none other than respondent No.3 himself and no question was raised as to the maintainability of that writ petition. All of the other private respondents are beneficiaries of the order dated 13.05.2022 passed by the Supreme Court of India in the aforesaid writ petition. It is thus incongruous to raise the objection of maintainability only against the writ petition filed by the petitioner‑victim. That the petitioner‑victim was totally unaware of Writ Petition (Criminal) No.135 of 2022 filed by respondent No.3 seeking premature release before this Court. The petitioner learnt about the release, like the general public did, from the news and social media. That the petitioner had barely begun to recover from the shock of respondent Nos.3 to 13 being released when several PILs were filed, and this Court was already seized of the matter. This left the petitioner with no choice but to approach this Court., (iv) that the petitioner had also filed a Review Petition seeking review of the order dated 13.05.2022, wherein the Supreme Court of India held the State of Gujarat to be the appropriate government to consider the grant of remission, being the State in which the crime took place. The said order was per incuriam and contrary to the judgments of the Supreme Court of India. On this aspect, reliance was again placed on V. Sriharan, Rattan Singh, M. T. Khan and Hanumant Dass. Hence, the petitioner was under the impression that the said Review Petition and this writ petition would be considered together by this Court. But the Review Petition has been dismissed. Hence, this writ petition has to be considered on its own merits., (v) that the challenge to the maintainability of this writ petition is fallacious in the context of the specific argument raised by respondent Nos.1 and 2, namely, that the direction given by this Court as on 13.05.2022 was a mandate that was merely being adhered to in the remission order and therefore the same would not be open to challenge. That this further exemplifies non‑application of mind and a hasty and mechanical manner of granting remission by misrepresenting about the order dated 13.05.2022., (vi) It was submitted that the right to justice was recognized as an indispensable human and fundamental right in Anita Kushwaha vs. Pushap Sudan, (2016) 8 SCC 509, and that this writ petition was maintainable on that basis also. In light of the aforementioned submissions, learned counsel contended that the filing of a writ petition under Article 32 before the Supreme Court of India is the most efficacious remedy available to the petitioner., 16.1. Reiterating her submissions regarding the non‑consideration of the negative opinions of the investigating agency, namely the Central Bureau of Investigation as well as the Judge of the Special Central Bureau of Investigation Court, Mumbai, learned counsel went on to refute the claim of the learned Additional Solicitor‑General that the relevant opinion would be that of the Presiding Judge of the Godhra Court who was convinced of the merits of grant of remission. That this contention of learned Additional Solicitor‑General would contradict the plain language of Section 432(2) which specifies that the Presiding Judge should have been the one who awarded or confirmed the sentence. Reliance was again placed on the judgments of the Supreme Court of India in Sangeet, Ram Chander and V. Sriharan. Learned counsel further contended that the submission of the learned Additional Solicitor‑General that the use of the word may in Section 432(2) would imply that there is no necessary requirement to seek the opinion of the Presiding Judge is erroneous in light of the dictum of the Supreme Court of India in V. Sriharan., 16.2. It was next contended that a letter dated 17.11.2021 was filed along with the application dated 10.08.2022. The said letter by the State of Gujarat addressed to the State of Maharashtra detailed that the State of Gujarat possessed no powers of remission with respect to respondent No.3 and that the appropriate government in this respect would be the State of Maharashtra. Despite taking this view, which is in accordance with the position of law laid down by the Supreme Court of India in various cases, including V. Sriharan, no review petition was filed by the State challenging the 13.05.2022 order., 16.3. It was next submitted that the learned Additional Solicitor General had placed on record the opinion of the Central Bureau of Investigation dated 09.07.2022 where, after an apparent change of mind, grant of remission to respondent Nos.3 to 13 was recommended. Neither of the documents, namely the letter of the State of Gujarat and the changed opinion of the Central Bureau of Investigation find any mention in the counter affidavit filed by the State on 17.10.2022. It was further submitted that these additional documents establish the rapid timeline of the process adopted by the Central Government in affirming the orders of remission, as the State Government’s communication was received on 06.07.2022, the opinion of the Central Bureau of Investigation was sought and received on 09.07.2022 and the Central Government expressed its concurrence on 11.07.2022., 16.4. It was further contended that respondent No.3 produced a document dated 18.06.2022 during the course of his arguments, stating that the same was the opinion of the Presiding Judge of the Mumbai Special Court (Central Bureau of Investigation). However, the veracity of the said document cannot be established as the State claimed to be not in possession of and is entirely unaware of the same., 16.5. Learned counsel reiterated that the above facts reveal non‑application of mind and the mechanical manner in which the orders of remission were passed in the instant case., 16.6. Learned counsel for the petitioners next submitted that on 30.08.2023, the fine amounts owed were deposited by respondent Nos.3 to 13. That this is as an admission on their part of the non‑payment of fine. It was contended that they would ordinarily have had to undergo a further period of six years of imprisonment. That non‑consideration of this fact further proves the non‑application of mind and a mechanical exercise of power by the State of Gujarat and Union of India in granting remission., 16.7. Learned counsel went on to submit that in Writ Petition (Criminal) No.135 of 2022 filed by respondent No.3, there was no mention of material particulars, such as the name of the petitioner‑victim and the nature of the crimes in question, i.e., gang rape and mass murder in the petition. Also the fact that his application for grant of remission before the State of Maharashtra had been negatively opined by all the concerned authorities. That respondent No.3 did not place on record the judgments and orders of the Trial Court, High Court, and this Court that had upheld his conviction. That he made incorrect and misleading statements with reference to the orders of the Bombay High Court dated 05.08.2013 and Gujarat High Court dated 17.07.2019, namely, that the two courts had given differing opinions, and this fact played a role in this Court’s decision‑making while passing the order dated 13.05.2022. Respondent No.3 made it seem like both High Courts were sending him to the other State and that there was a contradiction. However, the aforesaid order of the Bombay High Court was dealing with the transfer of convicts to another jail in their parent State and did not discuss the issue of remission, which could not have arisen in the year 2013., 16.8. It was reiterated that the investigating agency of the State of Gujarat had filed a closure report stating that the accused persons were not traceable. That the FIR contained erroneous recording of facts merely to hinder the investigative process. That the case was transferred by the Supreme Court of India to the State of Maharashtra as a consequence of the tainted nature of investigation. That the only reason the petitioner could get justice was because the investigation was conducted by the Central Bureau of Investigation. That this demonstrates the highly biased and partisan treatment of the petitioner by the State of Gujarat. That the State has been granting parole and furlough to the respondents in a liberal manner once they were transferred to the Godhra Jail. Furthermore, in light of the highly diabolical and gruesome nature of the crimes, the treatment awarded to the respondents by the State indicates favouritism and leniency., 16.9. Learned counsel reiterated that the nature of the crimes committed by the respondent Nos.3 to 13 were unusual and egregious. That these crimes were very shocking to the society as a whole and the treatment of the respondents upon being granted remission invoked a common sense of pain in the nation. That in fact the Bombay High Court had described the brutal treatment of the victims by the respondent Nos.3 to 13, which was reflected in the condition of the dead bodies. These factors require that respondents Nos.3 to 13 be treated differently from other ordinary criminals., 17. Learned senior counsel, Ms. Indira Jaising, appearing for the petitioner in Writ Petition (Criminal) No.326 of 2022 in her rejoinder at the outset submitted that the State of Gujarat does not have a policy of any kind for the release of prisoners under Section 432 of the Code of Criminal Procedure. That the 1992 Policy merely outlines the procedure to be followed when releasing convicts on remission. That the State must abide by the law laid down by the Supreme Court of India as well as the constitutional mandate to protect the fundamental rights of women, particularly when they are victims of sexual violence in relation to ethnic conflict., 17.1 Further, it was contended that the State of Gujarat is not the appropriate government and therefore the order of the Supreme Court of India dated 13.05.2022 is per incuriam by virtue of failing to follow the binding precedent in V. Sriharan. That the impugning of the order of the Gujarat High Court that held the State of Maharashtra to be the appropriate Government in Writ Petition (Criminal) No.135 of 2022, filed by respondent No.3, is completely contrary to the position of law laid down in Naresh Shridhar Mirajkar, wherein it was held that no writ petition alleging the violation of fundamental rights would lie against the judgement or order of a court. That the respondent No.3 committed fraud on this Court by misrepresenting the order of the Bombay High Court dated 05.08.2013 in Writ Petition (Criminal) No.135 of 2022. That the question of two High Courts taking dramatically different views did not arise as the issue of appropriate Government was not in question before the Bombay High Court at all. That this amounts to suppression of evidence, expression falsi. That this Court in Union of India vs. Ramesh Gandhi, (2012) 1 SCC 476, has held that any judgement that is a consequence of misrepresentation of necessary facts would constitute fraud and would be treated as a nullity. That this error of the Court cannot lead to the deprivation of justice to the victims. While the criminal justice system must strive to adopt a reformative approach, proportionality of sentence must be treated as an equally important ideal. Reliance was placed on the judgments of the Supreme Court of India in Alister Anthony Pareira vs. State of Maharashtra, (2012) 2 SCC 648; Ravji vs. State of Rajasthan, (1996) 2 SCC 175; and Soman vs. State of Kerala, (2013) 11 SCC 382., 18. Ms. Vrinda Grover, learned counsel for the petitioner in Writ Petition (Criminal) No.352 of 2022 reiterated the contentions as to the centrality and non‑optional nature of seeking the opinion of the Presiding Judge under Section 432(2) of the Code of Criminal Procedure, the non‑serving of the concurrent sentences for the non‑payment of fine by the respondent Nos.3 to 13 as well as the need to consider the nature of the crimes and the impact on public welfare while considering the grant of remission. Reliance was placed on the judgment of the Supreme Court of India in Ram Chander, Sharad Kolambe, Devendra Kumar vs. State of Uttarakhand, (2013) 9 SCC 363 and Abdul Gani., 18.1. It was further submitted that the State of Gujarat has not considered the possibility of recidivism and whether there was any evidence of reformation of respondent Nos.3 to 13. That as per the record, respondent Nos.3 to 13 have not demonstrated any sign of reform and have not expressed any remorse for the crimes they have committed. That their applications for remission do not contain reference to feelings of remorse felt by them for their actions. The non‑payment of fine is further indication of the absence of remorse. Also fresh cases have been registered against two of the respondents, and this serves as proof of their non‑reformation.
|
id_1684
| 4
|
It was also contended that reliance cannot be placed on documents, such as, letter dated 09.07.2022 of the Central Bureau of Investigation, wherein an affirmative opinion on remission was expressed as well as a letter produced by respondent No.3 containing the affirmative opinion of the Special Judge (Central Bureau of Investigation), Civil and Sessions Court, Mumbai as these documents have not been listed among the documents relied upon by the State of Gujarat while granting remission to the respondent Nos.3 to 13., Ms. Aparna Bhat, learned counsel for the petitioner in Writ Petition (Criminal) No. 319 of 2022, in her rejoinder submitted that the remission granted by the State of Gujarat to respondent Nos.3 to 13 was violative of Article 14 of the Constitution of India. Prison statistics from the year 2021 reveal that 66.7 percent of the convicts in Gujarat are undergoing life imprisonment, at least a fraction of whom have completed fourteen years of incarceration. No special case has been made out either by the State of Gujarat or the Union of India as to why respondent Nos.3 to 13 are singularly entitled to remission over all of the other convicts. Reliance was placed on judgments in S. G. Jaisinghani v. Union of India, AIR 1967 SC 1427 and E. P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3, where the Supreme Court of India held that arbitrary and mala fide exercise of power by the State would constitute a violation of Article 14 of the Constitution. Discretionary and en‑mass remission on festive occasions was held to be impermissible in the case of Sangeet., It was further submitted that there is no right to remission that a convict can necessarily avail. Remission must be an exercise of discretion judiciously by the concerned authorities. Reliance was placed on the judgments of the Supreme Court of India in Sangeet, V. Sriharan, State of Haryana v. Mahender Singh, (2007) 13 SCC 606; Mohinder Singh, Maru Ram and Shri Bhagwan v. State of Rajasthan, (2001) 6 SCC 296., Mr. Mohammad Nizamuddin Pasha, learned counsel for the petitioner in Writ Petition (Criminal) No. 403 of 2022, reiterated the contention that materials not relied upon by the State of Gujarat while deciding on the question of remission for respondent Nos.3 to 13 cannot be used to justify the decision retrospectively. Reliance was placed on the decision of the Supreme Court of India in OPTO Circuit India Ltd. v. Axis Bank, (2021) 6 SCC 707. Contrary to the submission of the learned Additional Solicitor General, the State has to consider the gravity of the offence while deciding whether to grant remission. In cases where the crimes are of a much less serious nature, remission has not been granted owing to the perceived seriousness of the offences by the State, but in these cases of gruesome crime, remission has been simply granted. Further, there is a need to consider the fact that the victim and the convicts live in close proximity while granting remission, a factor considered in other cases but not in the impugned remission orders., Points for consideration: Having heard learned senior counsel and learned counsel for the respective petitioners as well as learned Additional Solicitor General, learned senior counsel and learned counsel for the respondents, the following points would arise for our consideration: Whether the petition filed by one of the victims in Writ Petition (Criminal) No. 491 of 2022 under Article 32 of the Constitution is maintainable? Whether the writ petitions filed as Public Interest Litigation assailing the impugned orders of remission dated 10.08.2022 are maintainable? Whether the Government of the State of Gujarat was competent to pass the impugned orders of remission? Whether the impugned orders of remission passed by the State of Gujarat in favour of respondent Nos.3 to 13 are in accordance with law? The aforesaid points shall be considered in seriatim. A detailed narration of facts and contentions would not call for reiteration at this stage., Re: Point No. 1: Whether the petition filed by one of the victims in Writ Petition (Criminal) No. 491 of 2022 under Article 32 of the Constitution is maintainable? Sri Rishi Malhotra, learned counsel for respondent No.3, while placing reliance on the decisions of the Supreme Court of India, made a specific plea regarding maintainability of Writ Petition (Criminal) No. 491 of 2022 filed by the victim by contending that the petitioner had filed a review petition challenging the order dated 13.05.2022 passed in Writ Petition (Criminal) No. 135 of 2022 and the same was dismissed. Therefore, the only remedy open to the petitioner was to file a curative petition in terms of the judgment of the Supreme Court of India in Rupa Ashok Hurrah and not to challenge the remission orders by filing a fresh writ petition. This contention will be answered in detail while considering point No. 3., One of the contentions raised by learned senior counsel, Sri S. Guru Krishna Kumar, appearing for one of the private respondents, was that the petitioner in Writ Petition (Criminal) No. 491 of 2022, Bilkis Bano, ought to have challenged the orders of remission before the High Court of Gujarat by filing a petition under Article 226 of the Constitution rather than invoking Article 32 of the Constitution before the Supreme Court of India. It was submitted that by straightaway filing a petition under Article 32 a right of approaching the Supreme Court of India by way of an appeal by an aggrieved party has been lost. It was submitted that if victims file petitions under Article 32 before the Supreme Court of India challenging orders of remission, floodgates would be opened and persons such as the petitioner would straightaway file writ petitions before the Supreme Court of India. When an alternative remedy of filing a writ petition under Article 226 is available, which is also a wider remedy than Article 32, the petition filed by the writ petitioner in Writ Petition (Criminal) No. 491 of 2022 must be dismissed reserving liberty to her to approach the High Court of Gujarat, if so advised. Similar arguments were made by learned senior counsel Sri Chidambaresh., Article 32 of the Constitution is a part of Part III of the Constitution of India which deals with Fundamental Rights. The right to file a petition under Article 32 is also a Fundamental Right. In the instant case, the petitioner, Bilkis Bano, has filed her writ petition under Article 32 to enforce her Fundamental Rights under Article 21 (right to life and liberty) and Article 14 (right to equality and equal protection of the laws). The object and purpose of Article 32, recognised as the soul of the Constitution, is for the enforcement of other Fundamental Rights in Part III. The petition filed by the petitioner in Writ Petition (Criminal) No. 491 of 2022 cannot be dismissed on the ground of availability of an alternative remedy under Article 226 or on the ground of its maintainability under Article 32 before the Supreme Court of India., There is another strong reason why the petitioner approached the Supreme Court of India by filing a petition under Article 32 rather than invoking Article 226 before the High Court of Gujarat. Earlier, respondent No.3, Radheshyam Bhagwandas Shah, had preferred Writ Petition (Criminal) No. 135 of 2022 invoking Article 32 before the Supreme Court of India seeking a direction to the State of Gujarat to consider his case for remission under the Policy of 1992. The Supreme Court of India issued a categorical direction to that effect. The State of Gujarat had contended that it was not the appropriate Government to grant remission, a contention negatived by the order dated 13.05.2022. That is one of the grounds raised by the petitioner victim to assail the orders of remission granted to respondent Nos.3 to 13. Consequently, the High Court of Gujarat would not have been in a position to entertain the contention in view of the categorical direction issued by the Supreme Court of India in Writ Petition (Criminal) No. 491 of 2022 disposed on 13.05.2022. In the teeth of that order, the contention regarding the State of Gujarat not being the competent authority to consider the validity of the orders of remission in a petition filed under Article 226 could not have been dealt with by the High Court of Gujarat on the principle of judicial propriety. Therefore, the petitioner in Writ Petition (Criminal) No. 135 of 2022 has rightly approached the Supreme Court of India challenging the orders of remission. The contentions of learned senior counsel, Sri S. Guru Krishna Kumar and Sri Chidambaresh are rejected. Thus, we hold that Writ Petition (Criminal) No. 491 of 2022 filed under Article 32 of the Constitution is clearly maintainable., Re: Point No. 2: Whether the writ petitions filed as Public Interest Litigation assailing the impugned orders of remission dated 10.08.2022 are maintainable? We now record the submissions made with regard to maintainability of the Public Interest Litigation assailing the orders of remission in favour of respondent Nos.3 to 13. Learned Additional Solicitor General appearing for the State of Gujarat as well as the Union of India submitted that the writ petitions filed as Public Interest Litigations are not maintainable as the petitioners are strangers to the impugned orders of remission and are in no way connected with the matter. Reliance was placed on decisions including Rajiv Ranjan, Simranjit Singh and Ashok Kumar to contend that there can be no third‑party interference in criminal matters in the garb of filing Public Interest Litigations. It was also contended that the petitioners who have filed the Public Interest Litigation are interlopers and busybodies and are not persons who are aggrieved. Reliance was placed on M. V. Dabholkar and Jasbhai Motibhai., Shri Sidharth Luthra, learned senior counsel, has also voiced the arguments of the respondents by referring to certain decisions of the Supreme Court of India while contending that the grant of remission is in the exclusive domain of the State and although no convict can seek remission as a matter of fundamental right, a convict has the right to be considered for remission. Remission is a matter between the convict and the State and therefore there can be no third‑party interference in such a matter. The detailed submissions of the learned counsel have already been adverted to above and it is unnecessary to reproduce them again., Respondent No.3 has challenged the locus standi of the petitioners in Writ Petition (Criminal) No. 319 of 2022 and connected writ petitions, contending that the petitioners therein are not related to the case and are third‑party strangers. If petitions filed by third‑party strangers are entertained by the Supreme Court of India, the settled position of law would be unsettled and floodgates would be opened for litigation. Learned counsel for respondent No.3, Sri Rishi Malhotra, placed reliance on the decision of the Supreme Court of India in Janata Dal v. H. S. Chowdhary, (1992) 4 SCC 305, which was reiterated and followed in Simranjit Singh and in Subramanian Swamy v. Raju, (2013) 10 SCC 465, where it has consistently been held that a third party who is a total stranger to the prosecution has no locus standi in criminal matters and has no right whatsoever to file a petition under Article 32., In Simranjit Singh, the Supreme Court of India was faced with a situation where a conviction of some accused persons under the Terrorist and Disruptive Activities (Prevention) Act was sought to be challenged under Article 32 by the President of the Akali Dal (M), namely Simranjit Singh Mann, which was dismissed. Paragraph 5 of the judgment held that the petition under Article 32 was not maintainable because the petitioner did not seek to enforce any of his fundamental rights nor did he complain that any of his fundamental rights were being violated. A total stranger in a criminal case cannot be permitted to question the correctness of a decision., Per contra, learned senior counsel Ms. Indira Jaising submitted on the issue of locus standi of the petitioner in Writ Petition (Criminal) No. 326 of 2022 that even when no specific legal injury is caused to a person or a determinate class by an act or omission of the State or any public authority, but when an injury is caused to public interest, a concerned citizen can maintain an action for vindicating the rule of law and setting aside the unlawful action or enforcing the performance of public duty (vide B. P. Singhal). She asserted that the writ petition raises questions of great public importance in that, in a democracy based on the rule of law, no authority has any unfettered and unreviewable discretion. All powers vested in an authority are intended to be used only for public good. The exercise of executive power must be informed by the finer canons of constitutionalism (vide Maru Ram). The impugned decision of granting remission to the convicts violates the rule of law, is arbitrary and not based on any relevant consideration. Therefore, the writ petition filed in public interest is maintainable. Reliance was placed on S. P. Gupta., Regarding the respondents’ contention that by entertaining the petition under Article 32 the convicts have been denied the right of appeal, it was submitted that there exists no statutory right of appeal against an order denying or permitting remission. Such an order can only be challenged under Article 226 or Article 32. Further, a Constitution Bench of the Supreme Court of India in Kochuni observed that the mere existence of an adequate alternative remedy cannot per se be a good and sufficient ground for throwing out a petition under Article 32, if the existence of a fundamental right and a breach, actual or threatened, of such right is alleged and is prima facie established on the petition., Regarding the respondents’ submission that a stranger to the criminal proceedings cannot file a petition under Article 32, it was contended that the instant proceedings are not criminal in nature; they fall within the realm of administrative law as they seek to challenge orders of remission which are administrative decisions. Learned senior counsel brought to our notice the fact that the Supreme Court of India had entertained a petition filed by a DMK leader under Section 406 of the Code of Criminal Procedure seeking the transfer of a pending criminal trial against his political opponent J. Jayalalithaa from the State of Tamil Nadu to the State of Karnataka (vide K. Anbazhagan)., Ms. Vrinda Grover, learned counsel for the petitioner in Writ Petition (Criminal) No. 352 of 2022, submitted that the petition has been filed in the larger public interest by petitioners who have vast knowledge and practical expertise on issues of public policy, governance and upholding the rule of law. Their petition challenges not only the arbitrary and mala fide exercise of executive prerogative under Section 432 of the Code of Criminal Procedure, but also prays for a shift in practices related to the grant of remission by bringing in more accountability and transparency to the process. Thus, the writ petition is maintainable as a Public Interest Litigation., Learned counsel contended that the petition does not constitute an intervention into criminal proceedings but is rather a challenge to arbitrary executive action, which is amenable to judicial review. It is settled law that the exercise of power under Section 432 of the Code of Criminal Procedure is an administrative act which neither retracts from a judicial order nor wipes out the conviction of the accused and is merely an executive prerogative exercised after the judicial function in a criminal proceeding has come to an end (vide Epuru Sudhakar and Ashok Kumar)., It was further submitted that all the judgments cited by the respondents‑convicts as well as the respondent‑State to argue that the petitioners have no locus standi refer to different stages of criminal proceedings, viz. petitions related to investigation, trial, sentencing or quashing of the FIR. However, the present petition is a challenge to the arbitrary and mala fide administrative action which has arisen after the criminal proceedings have attained finality in the eye of law., Learned counsel submitted that it is trite that the exercise of executive discretion is subject to rule of law and fairness in State action as embodied in Article 14 of the Constitution. The exercise of such discretion under Section 432 of the Code of Criminal Procedure which is arbitrary or mala fide amounts to State action in violation of constitutional and statutory obligations and is detrimental to public interest. Reliance was placed on the decision of the Supreme Court of India in S. P. Gupta to submit that this Court has in many cases held that in case of public injury caused by an act or omission of the State contrary to the rule of law, any member of the public acting bona fide can maintain an action for redressal of a public wrong. In the case at hand, the mala fide and arbitrary grant of premature release to the convicts by State action is contrary to constitutional mandate and abets immunity for violence against women (vide Sheonandan Paswan v. State of Bihar, (1987) 1 SCC 288 and Abdul Wahab K. v. State of Kerala, (2018) 18 SCC 448)., Learned counsel next submitted that this Court in Subramanian Swamy, while adjudicating on the locus of a public‑spirited intervenor in a case requiring interpretation of the Juvenile Justice (Care and Protection of Children) Act, 2015, held that the intervenor had sought an interpretation of criminal law which would have a wide implication beyond the scope of the parties in that case and hence, allowed the same. Thus, when larger questions of law are involved, including interpretation of statutory provisions for the purpose of grant of premature release/remission, public‑spirited persons who approach the Court in a bona fide manner ought not to be prevented from assisting the Court to arrive at a just and fair outcome., Learned counsel Ms. Grover further submitted that in cases where offences have shocked the conscience of society, spread fear and alarm amongst citizens and have impugned the secular fabric of society, as in the instant case, this Court has allowed interventions by members of the public seeking to bring to the attention of the Court the inaction and apathy of the State in discharging its duty within the criminal justice system. It has been held in some cases that the technical rule of locus cannot shield the arbitrary and illegal exercise of executive discretion in violation of constitutional and statutory principles, once the same have been brought to the attention of this Court., Learned counsel for the petitioner in Writ Petition (Criminal) No. 319 of 2022, Smt. Aparna Bhat, submitted that the petitioner has locus standi to approach the Supreme Court of India against the remission orders dated 10.08.2022. It was submitted that upholding the constitutional values and protection of all citizens is the responsibility of the State and there is a legitimate expectation that the State conducts all its actions in accordance with constitutional values. The petition has been filed in public interest as the premature release of respondent Nos.3 to 13 cannot be permitted since the convicts pose a danger to society. The petitioners in the connected matters fulfil the wide ambit of the expression “person aggrieved” as envisaged under Public Interest Litigation jurisdiction since they are challenging the release of convicts who have committed heinous and grave offences against society., On the issue of locus standi of the petitioners to approach this Court, the learned counsel relied on paragraph 6 of A. R. Antulay v. Ramdas Sriniwas Nayak, (1984) 2 SCC 500. Further, it was submitted that in Sheonandan Paswan, this Court relied on A. R. Antulay and held that if a citizen can set the machinery of criminal law in motion, she is also entitled to oppose the unwarranted withdrawal of prosecution in an offence against society., Learned counsel further placed reliance on the dictum of the Supreme Court of India in Manohar Lal v. Vinesh Anand, (2001) 5 SCC 407, wherein it was held that the doctrine of locus standi is totally foreign to criminal jurisprudence and that society cannot afford to have a criminal escape his liability. Also, in Ratanlal v. Prahlad Jat, (2017) 9 SCC 340, this Court held that a crime is not merely an offence committed in relation to an individual but is also an offence against society at large and it is the duty of the State to punish the offender., Although we have recorded the detailed submissions made on behalf of the respective parties, we do not think it is necessary to answer the point regarding maintainability of the Public Interest Litigations in this case inasmuch as one of the victims, namely Bilkis Bano, has also filed a writ petition invoking Article 32 assailing the orders of remission which we have held to be maintainable. The consideration of that petition on its merits would suffice in the instant case. Hence, we are of the view that the question of maintainability of the Public Interest Litigations challenging the orders of remission in the instant case would not call for an answer from us owing to the aforesaid reason. As a result, we hold that consideration of the point on the maintainability of the Public Interest Litigations has been rendered wholly academic and not requiring an answer in this case. Therefore, the question regarding maintainability of a Public Interest Litigation challenging orders of remission is kept open to be considered in any other appropriate case., Before we consider point No. 3, we shall deal with the concept of remission. Remission: Scope and Ambit. Krishna Iyer, J., in Mohammad Giasuddin v. State of Andhra Pradesh, (1997) 3 SCC 287, quoted George Bernard Shaw who said, “If you are to punish a man retributively, you must injure him. If you are to reform him, you must improve him and men are not improved by injuries.” According to him, humanity today views sentencing as a process of reshaping a person who has deteriorated into criminality and the modern community has a primary stake in the rehabilitation of the offender as a means of social defence., Further, quoting a British Buddhist‑Christian judge, it was observed that in the context of karuna (compassion) and punishment for karma (bad deeds), the two things are not incompatible. While an accused is punished for what he has done, a quality of what is sometimes called mercy, rather than an emotional hate against the man for doing something harmful, must be deserved. This is what compassion is about., Learned senior counsel Sri Sidharth Luthra drew our attention to the principles covering grant of remission and distinguished it from concepts such as commutation, pardon and reprieve, with reference to a judgment of the Supreme Court of India in State (Government of NCT of Delhi) v. Prem Raj, (2003) 7 SCC 121. Articles 72 and 161 deal with clemency powers of the President of India and the Governor of a State, and also include the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentences in certain cases. The power under Article 72 inter alia extends to all cases where the punishment or sentence is for an offence against any law relating to a matter to which the executive power of the Union extends and in all cases where the sentence is a sentence of death. Article 161 states that the Government of a State shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law relating to a matter to which the executive power of the State extends. It was observed in the said judgment that the powers under Articles 72 and 161 of the Constitution of India are absolute and cannot be fettered by any statutory provision, such as Sections 432, 433 or 433‑A of the Code of Criminal Procedure or by any prison rule., It was further observed that a pardon is an act of grace, proceeding from the power entrusted with the execution of the law, which exempts the individual on whom it is bestowed from the punishment the law inflicts for a crime he has committed. It affects both the punishment prescribed for the offence and the guilt of the offender. But pardon has to be distinguished from amnesty which is defined as a general pardon of political prisoners; an act of oblivion. An amnesty would result in the release of the convict but does not affect disqualification incurred, if any. Reprieve means a stay of execution of a sentence, a postponement of a capital sentence. Respite means awarding a lesser sentence instead of the penalty prescribed in view of the fact that the accused has had no previous conviction. It is something like a release on probation for good conduct under Section 360 of the Code of Criminal Procedure. On the other hand, remission is reduction of a sentence without changing its character. In the case of a remission, the guilt of the offender is not affected, nor is the sentence of the court, except in the sense that the person concerned does not suffer incarceration for the entire period of the sentence, but is relieved from serving out a part of it. Commutation is change of a sentence to a lighter sentence of a different kind. Section 432 empowers the appropriate Government to suspend or remit sentences., Further, a remission of sentence does not mean acquittal and an aggrieved party has every right to vindicate himself or herself. In this context, reliance was placed on Sarat Chandra Rabha v. Khagendranath Nath, AIR 1961 SC 334, wherein a Constitution Bench of the Supreme Court of India while distinguishing between a pardon and a remission observed that an order of remission does not wipe out the offence; it also does not wipe out the conviction. All that it does is to have an effect on the execution of the sentence; though ordinarily a convicted person would have to serve out the full sentence imposed by a court, he need not do so with respect to that part of the sentence which has been ordered to be remitted. An order of remission thus does not in any way interfere with the order of the court; it affects only the execution of the sentence passed by the court and frees the convicted person from his liability to undergo the full term of imprisonment inflicted by the court even though the order of conviction and sentence passed by the court still stands as it is. The power to grant remission is an executive power and cannot have the effect which the order of an appellate or revisional court would have of reducing the sentence passed by the trial court and substituting in its place the reduced sentence adjudged by the appellate or revisional court. According to Weater’s Constitutional Law, to cut short a sentence by an act of clemency is an exercise of executive power which abridges the enforcement of the judgment but does not alter it qua the judgment., Reliance was placed on Mahendra Singh to urge that a right to be considered for remission, keeping in view the constitutional safeguards of a convict under Articles 20 and 21 of the Constitution of India, must be held to be a legal one. Such a legal right emanates from not only the Prisons Act but also from the Rules framed thereunder.
|
id_1684
| 5
|
Although no convict can be said to have any constitutional right for obtaining remission in his sentence, the policy decision itself must be held to have conferred a right to be considered therefor. Whether by reason of a statutory rule or otherwise, if a policy decision has been laid down, the persons who come within its purview are entitled to be treated equally, vide State of Mysore vs. H. Srinivasmurthy, (1976) 1 Supreme Court Cases 817. In Mahender Singh, the Supreme Court of India was considering the correctness of a judgment of the Punjab and Haryana High Court in which a circular/letter issued by the State of Haryana laying down criteria for premature release of prisoners had been declared unconstitutional. In that context, the Supreme Court of India considered the right of the convict to be considered for remission and not the criteria for granting it., Satish was pressed into service to contend that the length of the sentence or the gravity of the original crime cannot be the sole basis for refusing premature release. Any assessment regarding a predisposition to commit crime upon release must be based on antecedents as well as conduct of the prisoner while in jail, and not merely on his age or apprehensions of the victims and witnesses. It was observed that although a convict cannot claim remission as a matter of right, once a law has been made by the appropriate legislature, it is not open for the executive authorities to surreptitiously subvert its mandate. It was further observed that where the authorities are found to have failed to discharge their statutory obligations despite judicial directions, it would not be inappropriate for a constitutional court while exercising its powers of judicial review to assume such task onto itself and direct compliance through a writ of mandamus. Considering that the petitioners had served nearly two decades of incarceration and had thus suffered the consequences of their actions, a balance between individual and societal welfare was struck by granting the petitioners conditional premature release, subject to their continuing good conduct. In the said case, a direction was issued to the State Government to release the prisoners on probation in terms of Section 2 of the Uttar Pradesh Prisoners Release on Probation Act, 1938 within a period of two weeks. The respondent State was reserved liberty with the overriding condition that the direction could be reversed or recalled in favour of any party or as per the petitioner., The following judgments of the Supreme Court of India are apposite to the concept of remission. In Maru Ram, a Constitution Bench considered the validity of Section 433-A of the Code of Criminal Procedure. Krishna Iyer, J., speaking for the Bench, observed that ordinarily, where a sentence is for a definite term, the calculus of remissions may benefit the prisoner to instant release at the point where the subtraction results in zero. However, when it comes to life imprisonment, where the sentence is indeterminate and of an uncertain duration, the result of subtraction from an uncertain quantity is still an uncertain quantity and release of the prisoner cannot follow except on some fiction of quantification of a sentence of uncertain duration., Referring to Gopal Vinayak Godse vs. State of Maharashtra, (1961) 3 Supreme Court Cases 440, the Court observed that a sentence of imprisonment for life is one of imprisonment for the whole of the remaining period of the convicted person’s natural life, unless the sentence is commuted or remitted by an appropriate authority under the relevant provisions of law. In Gopal Vinayak Godse, a distinction was drawn between remission, sentence and life sentence. Remission limited a time, helps computation but does not ipso jure operate as release of the prisoner. When the sentence awarded by the Judge is for a fixed term, the effect of remissions may be to scale down the term to be endured and reduce it to nil, while leaving the fact and quantum of sentence intact. However, when the sentence is a life sentence, remissions quantified in time cannot reach a point of zero. Since Section 433-A deals only with life sentences, remissions cannot entitle a prisoner to release., Interpreting Section 433-A, the Court observed that there are three components in it which are in the nature of a saving clause. Firstly, the Code of Criminal Procedure generally governs matters covered by it. Secondly, if a special or local law exists covering the same area, the latter law will be saved and will prevail, such as short sentencing measures and remission schemes promulgated by various States. The third component is that if there is a specific provision to the contrary, it will override the special or local law. It was held that Section 433-A picks out of a mass of imprisonment cases a specific class of life imprisonment cases and subjects it explicitly to a particularised treatment. Therefore, Section 433-A applies in preference to any special or local law because Section 5 of the Code of Criminal Procedure expressly declares that a specific provision, if any, to the contrary will prevail over any special or local law. Consequently, Section 433-A is supreme over the remission rules and short‑sentencing statutes made by various States and does not permit parole or other related release within a span of fourteen years., The Court further observed that criminology must include victimology as a major component of its concerns. When a murder or other grievous offence is committed, the victims or other aggrieved persons must receive reparation and the criminal must bear social responsibility to restore the loss or heal the injury, which is part of the punitive exercise; the length of the prison term is not reparation to the crippled or bereaved., Fazal Ali, J., in his concurring judgment in Maru Ram, observed that crime is rightly described as an act of warfare against the community touching new depths of lawlessness. He stated that the object of imposing a deterrent sentence is three‑fold. While holding that the deterrent form of punishment may not be the most suitable or ideal form, the fact remains that deterrent punishment prevents occurrence of offences. He further observed that Section 433-A is an asocial piece of legislation which, by one stroke, seeks to prevent dangerous criminals from repeating offences and, on the other hand, protects society from harm and distress caused to innocent persons. He opined that where Section 433-A applies, no question of reduction of sentence arises unless the President of India or the Governor of a State chooses to exercise their wide powers under Article 72 or Article 161 of the Constitution respectively, and such powers must be exercised according to sound legal principles; any reduction or modification in the deterrent punishment would, far from reforming the criminal, be counter‑productive., In Mohinder Singh, a case which arose under Section 432 on remission of sentence, the difference between the terms bail, furlough and parole having different connotations was discussed. It was observed that furloughs are variously known as temporary leaves, home visits or temporary community release and are usually granted when a convict is suddenly faced with a severe family crisis such as death or grave illness in the immediate family, often with an officer accompanying the inmate as part of the terms of temporary release of special leave. Parole is a release of a prisoner temporarily for a special purpose or completely before the expiry of the sentence or on promise of good behaviour. Conditional release from imprisonment entitles a convict to serve the remainder of his term outside the confines of an institution while satisfactorily complying with all terms and conditions provided in the parole order., In Poonam Latha vs. M.L. Wadhwan, (1987) 3 Supreme Court Cases 347, it was observed that parole is a professional release from confinement but is deemed to be part of imprisonment. Release on parole is a wing of the reformative process and is expected to provide an opportunity to the prisoner to transform himself into a useful citizen. Parole is thus a grant of partial liberty or lessening of restrictions to a convict prisoner but release on parole does not change the status of the prisoner. When a prisoner is undergoing sentence and confined in jail or is on parole or furlough, his position is not similar to a convict who is on bail, because a convict on bail is not entitled to the benefit of the remission system. In other words, a prisoner is not eligible for remission of sentence during the period he is on bail or his sentence is temporarily suspended; therefore, such a prisoner on bail is not entitled to get remission earned during the period he is on bail., Apart from the constitutional provisions, there are also provisions of the Code of Criminal Procedure which deal with remission of convicts. Sections 432, 433, 433A and 435 of the Code of Criminal Procedure are relevant and read as follows: Section 432, Power to suspend or remit sentences. (1) When any person has been sentenced to punishment for an offence, the appropriate Government may, at any time, without conditions or upon any condition which the person sentenced accepts, suspend the execution of his sentence or remit the whole or any part of the punishment to which he has been sentenced. (2) Whenever an application is made to the appropriate Government for the suspension or remission of a sentence, the appropriate Government may require the presiding Judge of the Court before or by which the conviction was had or confirmed, to state his opinion as to whether the application should be granted or refused, together with his reasons for such opinion and also to forward with the statement of such opinion a certified copy of the record of the trial or of such record thereof as exists. (3) If any condition on which a sentence has been suspended or remitted is, in the opinion of the appropriate Government, not fulfilled, the appropriate Government may cancel the suspension or remission, and thereupon the person in whose favour the sentence has been suspended or remitted may, if at large, be arrested by any police officer, without warrant and remanded to undergo the unexpired portion of the sentence. (4) The condition on which a sentence is suspended or remitted under this section may be one to be fulfilled by the person in whose favour the sentence is suspended or remitted, or one independent of his will. (5) The appropriate Government may, by general rules or special orders, give directions as to the suspension of sentences and the conditions on which petitions should be presented and dealt with, provided that in the case of any sentence (other than a sentence of fine) passed on a male person above the age of eighteen years, no such petition by the person sentenced or by any other person on his behalf shall be entertained unless the person sentenced is in jail, and (a) where such petition is made by the person sentenced, it is presented through the officer in charge of the jail; or (b) where such petition is made by any other person, it contains a declaration that the person sentenced is in jail. (6) The provisions of the above sub‑sections shall also apply to any order passed by a Criminal Court under any section of this Code or of any other law which restricts the liberty of any person or imposes any liability upon him or his property. (7) In this section and in Section 433, the expression appropriate Government means, (a) in cases where the sentence is for an offence against, or the order referred to in sub‑section (6) is passed under, any law relating to a matter to which the executive power of the Union extends, the Central Government; (b) in other cases, the Government of the State within which the offender is sentenced or the said order is passed., Section 433, Power to commute sentence. The appropriate Government may, without the consent of the person sentenced, commute (a) a sentence of death, for any other punishment provided by the Indian Penal Code; (b) a sentence of imprisonment for life, for imprisonment for a term not exceeding fourteen years or for fine; (c) a sentence of rigorous imprisonment, for simple imprisonment for any term to which that person might have been sentenced, or for fine; (d) a sentence of simple imprisonment, for fine., Section 433A, Restriction on powers of remission or commutation in certain cases. Notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law, or where a sentence of death imposed on a person has been commuted under Section 433 into imprisonment for life, such person shall not be released from prison unless he has served at least fourteen years of imprisonment., Section 435, State Government to act after consultation with Central Government in certain cases. (1) The powers conferred by Sections 432 and 433 upon the State Government to remit or commute a sentence, in any case where the sentence is for an offence (a) which was investigated by the Delhi Special Police Establishment constituted under the Delhi Special Police Establishment Act, 1946, or by any other agency empowered to make investigation into an offence under any Central Act other than this Code, or (b) which involved the misappropriation or destruction of, or damage to, any property belonging to the Central Government, or (c) which was committed by a person in the service of the Central Government while acting or purporting to act in the discharge of his official duty, shall not be exercised by the State Government except after consultation with the Central Government. (2) No order of suspension, remission or commutation of sentences passed by the State Government in relation to a person who has been convicted of offences, some of which relate to matters to which the executive power of the Union extends, and who has been sentenced to separate terms of imprisonment which are to run concurrently, shall have effect unless an order for the suspension, remission or commutation of such sentences has also been made by the Central Government in relation to the offences committed by such person with regard to matters to which the executive power of the Union extends., Sub‑section (1) of Section 432 is an enabling provision which states that when any person has been sentenced to punishment for an offence, the appropriate Government may, at any time, without conditions or upon any condition which the person sentenced accepts, suspend the execution of his sentence or remit the whole or any part of the punishment to which he has been sentenced. Sub‑section (2) deals with an application made to the appropriate Government for the suspension or remission of a sentence and provides that the appropriate Government may require the presiding Judge of the Court before or by which the conviction was had or confirmed, to state his opinion as to whether the application should be granted or refused, together with his reasons for such opinion and also to forward a certified copy of the record of the trial. Sub‑section (3) deals with cancellation of the suspension or remission in the event of non‑fulfilment of any condition imposed by the appropriate Government, whereupon the person in whose favour the sentence has been suspended or remitted may be arrested by a police officer, without warrant, and remanded to undergo the unexpired portion of the sentence. Sub‑section (4) states that the condition on which a sentence is suspended or remitted may be one to be fulfilled by the person in whose favour the sentence is suspended or remitted, or one independent of his will. The appropriate Government may, by general rules or special orders, give directions as to the suspension of sentences and the conditions on which petitions should be presented and dealt with, vide sub‑section (5) of Section 432. The proviso to sub‑section (5) states that in the case of any sentence (other than a sentence of fine) passed on a male person above the age of eighteen years, no such petition by the person sentenced or by any other person on his behalf shall be entertained unless the person sentenced is in jail, and it is presented through the officer in‑charge of the jail; or where such petition is made by any other person, it contains a declaration that the person sentenced is in jail., The expression appropriate Government used in Section 432 as well as in Section 433 is defined in sub‑section (7) of Section 432. It expresses that in cases where the sentence is for an offence against, or the order referred to in sub‑section (6) is passed under any law relating to a matter to which the executive power of the Union extends, the Central Government is the appropriate Government; and in other cases, the Government of the State within which the offender is sentenced or the said order is passed., Section 433-A is a restriction on the powers of remission or commutation in certain cases. It begins with a non‑obstante clause and states that notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law, or where a sentence of death imposed on a person has been commuted under Section 433 into imprisonment for life, such person shall not be released from prison unless he has served at least fourteen years of imprisonment., Section 434 states that the powers conferred by Sections 432 and 433 upon the State Government may, in case of sentences of death, also be exercised by the Central Government concurrently., The point for consideration revolves around the definition of the expression appropriate Government. In other words, whether the first respondent State of Gujarat was competent to pass the orders of remission in the case of respondents Nos. 3 to 13 is the question. The meaning and import of the expression appropriate Government has to be discerned from the judgments of the Supreme Court of India in the light of sub‑section (7) of Section 432., The expression appropriate Government has been defined in sub‑section (7) of Section 432 to mean that in cases where the sentence is for an offence against, or the order referred to in sub‑section (6) is passed under any law relating to a matter to which the executive power of the Union extends, the Central Government is the appropriate Government; in other cases, the Government of the State within which the offender is sentenced or the said order is passed. Sub‑section (1) of Section 432 states that when any person has been sentenced to punishment for an offence, the appropriate Government may, at any time, without conditions or upon any condition which the person sentenced accepts, suspend the execution of his sentence or remit the whole or any part of the punishment to which he has been sentenced. Sub‑section (2) provides that the appropriate Government may require the opinion of the presiding Judge of the Court before which the conviction was had or confirmed. The discretion vested with the appropriate Government must be exercised judiciously and not be abused. When an application is made by a convict for suspension or remission of a sentence, the appropriate Government may seek the opinion of the presiding Judge and consider the reasons before deciding., The combined reading of sub‑sections (1) and (2) of Section 432 makes it apparent that the conviction and sentence of the Court which tried the case assumes significance and the appropriate Government may have to seek the opinion of the presiding Judge before passing an order of remission. This means that the Government of the State within which the offender was sentenced is the appropriate Government to consider an application for remission, irrespective of the place of occurrence of the incident or the place of imprisonment. Even where the trial has been transferred from the State of Gujarat to the State of Maharashtra and particularly to the Special Court at Mumbai, the definition of appropriate Government still points to the State within which the offender was sentenced., In Ratan Singh, discussing Section 401 of the erstwhile Code of Criminal Procedure (corresponding to Section 432 of the present Code), the Court observed that the test to determine the appropriate Government is to locate the State where the accused was convicted and sentenced, and the Government of that State would be the appropriate Government. The Court noted that although the accused was serving his sentence in a jail in Amritsar, Punjab, the appropriate Government for remission was the State of Madhya Pradesh, where the conviction and sentence occurred. The Court further observed that under the new Code of Criminal Procedure, 1973, sub‑section (7) of Section 432 gives the same meaning to the phrase appropriate Government as was lifted from Section 402(3) of the erstwhile Code., The Court reiterated that a sentence of imprisonment for life does not automatically expire at the end of twenty years, including remissions, because administrative rules framed under various Jail Manuals or under the Prisons Act cannot supersede the statutory provisions of the Indian Penal Code.
|
id_1684
| 6
|
A sentence of imprisonment for life means a sentence for the entire life of the prisoner unless the appropriate Government chooses to exercise its discretion to remit either the whole or a part of the sentence under Section 401 of the Code of Criminal Procedure. The appropriate Government has the undoubted discretion to remit or refuse to remit the sentence and where it refuses to remit the sentence no writ can be issued directing the State Government to release the prisoner. The appropriate Government which is empowered to grant remission under Section 401 of the Code of Criminal Procedure is the Government of the State where the prisoner has been convicted and sentenced, that is to say, the transferor State and not the transferee State where the prisoner may have been transferred at his instance under the Transfer of Prisoners Act. Where the transferee State feels that the accused has completed a period of twenty years it merely has to forward the request of the prisoner to the concerned State Government, that is to say, the Government of the State where the prisoner was convicted and sentenced and even if this request is rejected by the State Government the order of the Government cannot be interfered with by a High Court in its writ jurisdiction., The aforesaid decision was reiterated in Hanumant Dass. In that case the incident had occurred in Dharamshala and when the matter was pending before the Sessions Court, Dharamshala, Himachal Pradesh, at the instance of the complainant, on an application moved before the Supreme Court of India, the case was transferred from Himachal Pradesh to the Sessions Court at Gurdaspur in Punjab., Insofar as the clemency power of a Governor of a State under Article 161 of the Constitution to grant remission to prisoners convicted by courts outside the State but undergoing sentences in jails in the State is concerned, the Supreme Court of India in M.T. Khan observed that the appropriate Government on whose advice the Governor has to act while granting remission to such a prisoner is to be decided on the basis of the aid and advice of the Council of Ministers of the State which had convicted the accused and not the State where the accused or convict is transferred to be lodged in the jail. In that case it was held that since the judgment of conviction had been passed in the States of Madhya Pradesh and Maharashtra and the convict was lodged in the State of Andhra Pradesh, the appropriate Governments were the States of Madhya Pradesh and Maharashtra even under Article 161 of the Constitution. Hence, the appeals filed by the Government of Andhra Pradesh were allowed., V. Sriharan is a judgment of a Constitution Bench of the Supreme Court of India wherein the Government of Tamil Nadu had proposed to remit the sentence of life imprisonment to release seven convicts who were convicted in the Rajiv Gandhi assassination case, State, through Superintendent of Police, Central Bureau of Investigation vs. Nalini, (1999) 5 Supreme Court Cases 253. While discussing the phrase appropriate Government, it was observed that barring cases falling under Section 432(7)(a), in all other cases where the offender is sentenced or the sentence or order is passed within the territorial jurisdiction of the State concerned, that State Government would be the appropriate Government. Following the earlier decisions it was observed that even if an offence is committed in State A, but the trial takes place and the sentence is passed in State B, it is the latter State which shall be the appropriate Government., On a plain reading of sub‑section (7) of Section 432 of the Code of Criminal Procedure and considering the judgments of this Court, it is the State of Maharashtra which had the jurisdiction to consider the application for remission vis‑vis respondent Nos. 3 to 13 herein as they were sentenced by the Special Court, Mumbai. Hence the applications filed by respondent Nos. 4 to 13 seeking remission had to be simply rejected by the State of Gujarat owing to lack of jurisdiction to consider them. The Government of Gujarat is not the appropriate Government within the meaning of the aforesaid provision. The High Court of Gujarat was therefore right in its order dated 17 July 2019., When an authority does not have the jurisdiction to deal with a matter or it is not within the powers of the authority, i.e. the State of Gujarat in the instant case, to be the appropriate Government to pass orders of remission under Section 432 of the Code of Criminal Procedure, the orders of remission would have no legs to stand. The decision of the House of Lords in Anisminic v. Foreign Compensation Commission, (1969) 2 WLR 163 : (1969) 1 All ER 208, is of significance and can be cited by way of analogy. The House of Lords held that the Foreign Compensation Commission had committed a jurisdictional error and its decision was a nullity and subject to judicial review. Similarly, an order passed by an authority lacking jurisdiction is a nullity and is non est in the eye of law., On that short ground alone the orders of remission have to be quashed. The competency of the Government of Gujarat to pass the impugned orders of remission goes to the root of the matter and the impugned orders are lacking in competency and hence a nullity. The writ petition filed by the victim would have to succeed on this reasoning, but the matter does not rest at that., The Additional Solicitor General appearing for respondent Nos. 1 and 2 placed strong reliance on the order of the Supreme Court of India dated 13 May 2022 to contend that in view of the directions issued in Writ Petition No. 135 of 2022, respondent No. 1 State of Gujarat had to consider the applications for remission filed by respondents Nos. 3 to 13. Further, the consideration had to be made as per the 1992 Policy of Remission of the State of Gujarat. Hence, the appropriate Government in the case of respondents Nos. 3 to 13 was the Government of Gujarat in terms of the order dated 13 May 2022. It was further contended that the offences had also occurred within the State of Gujarat. Therefore, the first respondent State of Gujarat had no option but to consider the applications filed by respondents Nos. 3 to 13 and pass the orders dated 10 August 2022 granting remission to them., Counsel for the petitioner in Writ Petition (Criminal) No. 491 of 2022 countered the above submission contending that one of the convicts, Radheshyam Bhagwandas Shah, respondent No. 3, had initially approached the High Court of Gujarat by filing Criminal Application No. 4573 of 2019 for a direction to consider his application for remission by the State of Gujarat. By order dated 17 July 2019 the High Court disposed of Criminal Application No. 4573 of 2019 observing that he should approach the appropriate Government being the State of Maharashtra. His second such application before the Gujarat High Court was also dismissed by order dated 13 March 2020. When the prisoner filed Writ Petition (Criminal) No. 135 of 2022 before this Court, he did not disclose that within fourteen days of the order dated 17 July 2019 he had approached the Government of Maharashtra by application dated 1 August 2019; that the Central Bureau of Investigation had given a negative recommendation by its letter dated 14 August 2019; that the Special Judge (Central Bureau of Investigation), Mumbai had given a negative recommendation; that the Superintendent of Police, Dahod, Gujarat had given a negative recommendation by its letter dated 3 February 2020; and that the District Magistrate, Dahod, Gujarat had given a negative recommendation by its letter dated 19 February 2020., The writ petitioner also made a misleading statement by referring to the order dated 5 August 2013 of the Bombay High Court in juxtaposition to the order of the Gujarat High Court dated 17 July 2019 to contend that there was a divergent opinion between the two High Courts, which aspect constrained him to file Writ Petition (Criminal) No. 135 of 2022 before this Court. The order dated 5 August 2013 passed by the Bombay High Court dealt with transfer of the convicts in Maharashtra jail to their parent State (State of Gujarat) in the year 2013, when the issue of remission did not arise at all. The petitioner projected as if the two High Courts had contradicted themselves, and therefore he was constrained to invoke the jurisdiction of this Court under Article 32 of the Constitution., It was contended that on account of the suppression of facts as well as misleading this Court with erroneous facts, the order dated 13 May 2022 is vitiated by fraud and is hence a nullity and the same cannot be binding on the parties to the said order or on the petitioner Bilkis Bano, who was not a party in the said writ petition., It is necessary to highlight the salient aspects of the order passed by the Supreme Court of India in the case of Radheshyam Bhagwandas Shah dated 13 May 2022 in Writ Petition (Criminal) No. 135 of 2022. The petition was filed by respondent No. 3 seeking a direction to consider his application for premature release under the policy dated 9 July 1992 of the State of Gujarat, which was existing at the time of his conviction. The relevant pleadings in the writ petition are extracted as follows: Question of Law: (A) Whether the policy dated 9 July 1992, which was existing at the time of the conviction, will prevail for considering the case of the petitioner for premature release? (B) Whether, in view of State of Haryana v. Jagdish, (2010) 4 Supreme Court Cases 216, a more liberal and prevailing policy would be given preference as compared to the policy sought to be applied at the time of consideration of the cases of premature release?, At this juncture it is pertinent to mention that one of the co‑accused, Ramesh Rupabhai, had approached the Bombay High Court by way of Criminal Writ Petition No. 305 of 2013. In that order the Bombay High Court clarified that the under‑trials in this case were lodged in Maharashtra Jail only because the trial was pending in the State of Maharashtra (transferred from Gujarat to Maharashtra by the Supreme Court). The High Court further clarified that once the trial has concluded and the prisoner has been convicted, the appropriate prison would be the State of Gujarat and accordingly the prisoners were transferred to the State of Gujarat from the State of Maharashtra., The Gujarat High Court, vide its order dated 17 July 2019, took a diametrically opposite view to that of the Bombay High Court and erroneously held that since the petitioner’s case was tried in the State of Maharashtra, his case for premature release had to be considered by the State of Maharashtra and not by the State of Gujarat. Consequently, the instant writ petition was filed under Article 32 of the Constitution seeking a writ of mandamus or any other similar direction to the State of Gujarat to consider the petitioner’s case as per the policy dated 9 July 1992, in the light of the settled decision in State of Haryana v. Jagdish., The Supreme Court of India, in the order dated 13 May 2022, held that the petitioner had undergone more than fifteen years and four months of custody but his petition filed in the High Court of Gujarat was dismissed taking note of Section 432(7) of the Code of Criminal Procedure and relying on the judgment in Union of India v. V. Sriharan alias Murugan and Others, (2016) 7 Supreme Court Cases 1, on the premise that since the trial had been concluded in the State of Maharashtra, the application for premature release had to be filed in the State of Maharashtra and not in the State of Gujarat. The Court further observed that the crime was admittedly committed in the State of Gujarat and ordinarily the trial was to be concluded in the same State; therefore, in terms of Section 432(7) of the Code of Criminal Procedure, the appropriate Government in the ordinary course would be the State of Gujarat. The transfer of the case to Maharashtra was an exceptional circumstance and after conviction the appropriate Government remained the State of Gujarat., The Court noted that under Section 432(7) of the Code of Criminal Procedure, the appropriate Government can be either the Central Government or a State Government but there cannot be concurrent jurisdiction of two State Governments. Once the crime was committed in the State of Gujarat, after the trial was concluded and the judgment of conviction passed, all further proceedings, including remission or premature release, must be considered in terms of the policy applicable in the State of Gujarat where the crime was committed, and not in the State where the trial was transferred for exceptional reasons., The Court’s inferences on the order dated 13 May 2022 are as follows: (i) the convict Radheshyam Bhagwandas Shah had stated that he had undergone about fifteen years and four months of custody; (ii) he had not disclosed that his writ petition filed in the High Court of Gujarat had been dismissed by taking note of Section 432(7) of the Code of Criminal Procedure and the decision in V. Sriharan; (iii) he had not stated that the application for premature release had been filed by him in the State of Maharashtra as directed by the Gujarat High Court order dated 17 July 2019; (iv) he had not disclosed that after the Gujarat High Court order he had approached the Government of Maharashtra on 1 August 2019 and that the Central Bureau of Investigation, the Special Judge (Central Bureau of Investigation) Mumbai, the Superintendent of Police, Dahod, Gujarat, and the District Magistrate, Dahod, Gujarat had all given negative recommendations on the respective dates; (v) he had not assailed the Gujarat High Court order dated 17 July 2019 because there is a bar in law to assail a High Court order under Article 226 in a petition under Article 32; (vi) the State of Gujarat placed reliance on the judgment in V. Sriharan and contended that the trial had been concluded in the State of Maharashtra, making the State of Maharashtra the appropriate Government; (vii) the Court held that this submission was not sustainable because the crime was committed in Gujarat and, although the trial was transferred in exceptional circumstances, after conviction the appropriate Government remained Gujarat, rendering the order per incuriam; (viii) the Court observed that the Bombay High Court had declined to interfere in Criminal Writ Petition No. 305 of 2013 filed by co‑accused Ramesh Rupabhai, without realising that the prayer was for transfer of the convicts to a Gujarat jail, not for remission; (ix) no review petition was filed by the State of Gujarat against the order dated 13 May 2022, while the victim petitioner in Writ Petition (Criminal) No. 491 of 2022 filed a review petition which was rejected; (x) although the respondent and the State of Gujarat termed the Gujarat High Court order dated 17 July 2019 as impugned, that order was not actually challenged before this Court; (xi) the Court noted that the reference to the Bombay High Court order of 5 August 2013 was made without explaining the different factual backgrounds of the two writ petitions; (xii) the Court emphasized that there was no pleading or prayer to set aside the Gujarat High Court order dated 17 July 2019, yet the order was set aside in the present proceedings; (xiii) contrary to Section 432(7) and the judgments of this Court, a writ of mandamus was issued to the State of Gujarat to consider the petitioner’s premature release under the policy dated 9 July 1992, without any notice that the policy had been cancelled or replaced in 2014., In Sangeet & Another v. State of Haryana, (2013) 2 Supreme Court Cases 452, this Court, speaking through Justice Lokur, observed that a convict undergoing a sentence does not have a right to obtain remission but does have a right to have his case considered for the grant of remission. The term of a sentence spanning the life of the convict can be curtailed by the appropriate Government for good and valid reasons in exercise of its powers under Section 432 of the Code of Criminal Procedure. That section provides procedural and substantive checks on the arbitrary exercise of this power. Sub‑section (2) to sub‑section (5) of Section 432 lay down the basic procedure, which is the making of an application to the appropriate Government for suspension or remission of a sentence, either by the convict or by someone on his behalf. The representation must be made to the appropriate Government in terms of the provisions of Section 432. The exercise of power by the appropriate Government under sub‑section (1) of Section 432 cannot be suo motu because this sub‑section is only an enabling provision; the appropriate Government is enabled to override a judicially pronounced sentence subject to fulfillment of conditions found either in the jail manual or in statutory rules.
|
id_1684
| 7
|
On such an application being made, the appropriate Government is required to approach the Presiding Judge of the Court before or by which the conviction was made or confirmed to opine (with reasons) whether the application should be granted or refused. Thereafter, the appropriate Government may take a decision on the remission application and pass orders granting remission subject to some conditions, or refusing remission. There has to be an application of mind to the issue of grant of remission and the power of remission cannot be exercised arbitrarily. It was further observed that a convict undergoing life imprisonment is expected to remain in custody till the end of his life, subject to any remission granted by the appropriate Government under Section 432 of the Criminal Procedure Code which in turn is subject to the procedural checks in that Section and the substantive check in Section 433-A of the Criminal Procedure Code., Pursuant to the judgment in Sangeet, the Government of India, vide its communication dated 01.02.2013 made to all the Home Secretaries of the States and Union Territories, stated that there is a need to re‑look at the manner in which remissions of sentence are made with reference to Section 432 read with Section 433-A of the Criminal Procedure Code and hence requested that there should be scrupulous compliance of the aforesaid provisions and not to grant remission in a wholesale manner., Thereafter, on 08.05.2013, the Home Department, Government of Gujarat issued a circular referring to the decision of the Supreme Court of India dated 20.11.2012 in Sangeet and, in order to implement the same and also taking note of the communication of the Government of India dated 01.02.2013, the circular dated 09.07.1992 was cancelled in the following manner: Therefore, the provisions of circular No. JLK/3390/CM/16/part/2/J dated 09.07.1992 of the Home Department hereinabove referred to in Srl. No.1, hereby stand cancelled., On 23.01.2014, the State Government constituted a Committee headed by the Additional Chief Secretary (Home) for considering the policy and guidelines to be followed for the purpose of remission and premature release of the prisoners. After careful consideration, the State Government issued guidelines/policy for consideration of cases of remission and premature release of the prisoners. In the said policy, it was categorically mentioned that the prisoners who are convicted for the crimes as mentioned in Annexure‑I shall not be considered for remission. Annexure‑I contained the classes of prisoners who shall not be granted state remission as well as for premature release. Clause IV (a) and (d) read as follows: (a) A prisoner or prisoners sentenced for group murder of two or more persons. … (d) Prisoners convicted for murder with rape or gang rape., Respondent Nos.3 to 13 would not be released under the Remission Policy dated 23.01.2014, which had substituted the earlier Policy dated 09.07.1992, which had been cancelled. The writ petition was filed by respondent No.3 before the Supreme Court of India seeking a specific direction to the State of Gujarat to consider his case as per the Policy dated 09.07.1992 which had by then been cancelled and substituted by another Policy dated 23.01.2014., The petition raised the question of the effect of cancellation of the said policy by the State of Gujarat in light of the judgment of the Supreme Court of India in Sangeet and the communication of the Union of India issued to each of the states including the State of Gujarat. It asked whether the policy of 09.07.1992 had stood cancelled and therefore was effaced from the statute book and substituted by the new policy of 2014 which had to be considered., By suppressing material aspects and by misleading the Supreme Court of India, a direction was sought and issued to the State of Gujarat to consider the premature release or remission of the writ petitioner, i.e., respondent No.3, on the basis of the policy dated 09.07.1992., More pertinently, respondent No.3 had suppressed the fact that, on the basis of the judgment of the Gujarat High Court in the writ petition that he had filed, the convict had acted upon it and had made an application to the State of Maharashtra for remission on 01.08.2019 and the said application was being processed as the stakeholders had given their opinion, such as the Presiding Judge of the court which had convicted the accused; the Director‑CBI; and the Director General and Inspector General of Police, State of Maharashtra, all of whom were unanimous in their opinion in that they had negatived grant of remission to the convict Radheshyam Bhagwan Das., Suppressing all this, the writ petition was filed by respondent No.3 invoking Article 32 of the Constitution and the same was allowed by also setting aside the order of the Gujarat High Court dated 17.07.2019 and thereby setting at naught the steps taken pursuant to the said order of the Gujarat High Court., At this stage, we may point out that if respondent No.3 had felt aggrieved by the order of the Gujarat High Court dated 17.07.2019, it was open to him to have challenged the said order before the Supreme Court of India by filing a special leave petition, but he did not do so. Rather, he complied with the order of the Gujarat High Court by filing a remission application dated 01.08.2019 before the Government of Maharashtra where, not only the process for consideration of the remission prayer was initiated, but opinions of various authorities were also obtained. When the opinions were found to be negative, respondent No.3 filed Writ Petition (Criminal) No.135 of 2022 before the Supreme Court of India seeking a direction to the State of Gujarat to consider his remission application suppressing the above material facts. This he could not have done, thereby misrepresenting and suppressing relevant facts, thus playing fraud on the Supreme Court of India., We have no hesitation in holding that neither the order of the Gujarat High Court dated 17.07.2019 could have been challenged by respondent No.3 or by anybody else before the Supreme Court of India in a writ proceeding under Article 32 of the Constitution of India nor the said order of the High Court could have been set aside in a proceeding under Article 32 thereof. This proposition of law has been settled long ago by a nine‑Judge bench decision of the Supreme Court of India in Naresh Shridhar Mirajkar vs. State of Maharashtra, AIR 1967 SC 1, which is binding on us., When an oral order of the learned Judge passed in the original suit of the Bombay High Court was challenged by the petitioner therein by way of a writ petition under Article 226 of the Constitution of India before the Bombay High Court, the writ petition was dismissed by a division bench of the Bombay High Court on the ground that the impugned order was a judicial order of the High Court and was not amenable to writ jurisdiction under Article 226. Thereafter, the petitioner moved the Supreme Court of India under Article 32 of the Constitution of India for enforcement of his fundamental rights under Article 19(1)(a) and (g) of the Constitution of India. The Supreme Court observed that the impugned order was passed by the learned Judge in the course of trial of a suit after hearing the parties. The Court took the view that the restraint order was passed to prohibit publication of evidence in the media during the progress of the trial and could not be construed as imposing a permanent ban on the publication of the said evidence., The question which fell for consideration before the Supreme Court of India was whether a judicial order passed by the High Court prohibiting the publication in newspapers of evidence given by a witness pending the hearing of the suit was amenable to be corrected by a writ of certiorari of the Supreme Court of India under Article 32 of the Constitution of India. In that context, the Supreme Court first held that a judicial verdict pronounced by a court in a matter brought before it for its decision cannot be said to affect the fundamental rights of citizens under Article 19(1) of the Constitution of India. Thereafter, the Court proceeded to hold that if any judicial order was sought to be attacked on the ground that it was inconsistent with Article 14 or any other fundamental right, the proper remedy to challenge such an order would be by way of an appeal or revision as may be provided by law. It would not be open to the aggrieved person to invoke the jurisdiction of the Supreme Court of India under Article 32 of the Constitution and to contend that a writ of certiorari should be issued to quash such an order., Before proceeding further, it may also be mentioned that it was only respondent No.3 who had approached the Supreme Court of India by filing a writ petition under Article 32 of the Constitution of India, being Writ Petition (Criminal) No.135 of 2022, seeking a direction to the State of Gujarat to consider his premature release. None of the other convicts, i.e., respondent Nos.4 to 13, had approached the Supreme Court of India or any High Court seeking such a relief. Therefore, as far as these respondents are concerned, there was no direction of the Supreme Court of India or any court to the State of Gujarat to consider their premature release., We are of the considered view that the writ proceedings before the Supreme Court of India are pursuant to suppression and misleading of this Court and a result of supressio veri suggestio falsi. Hence, in our view, the said order was obtained by fraud played on this Court and therefore is a nullity and non est in law. In view of the aforesaid discussion, we hold that consequently the order dated 13.05.2022 passed by the Supreme Court of India in Writ Petition (Criminal) No.135 of 2022 in the case of Radheshyam Bhagwandas Shah is hit by fraud and is a nullity and non est in the eye of law and therefore cannot be given effect to and hence, all proceedings pursuant to the said order are vitiated., It is trite that fraud vitiates everything. It is a settled proposition of law that fraud avoids all judicial acts. In S.P. Chengalvaraya Naidu v. Jagannath (Dead) through Law Reports, (1994) 1 SCC 1, it has been observed that fraud avoids all judicial acts, ecclesiastical or temporal. Further, no judgment of a court, no order of a minister would be allowed to stand if it has been obtained by fraud. Fraud unravels everything vide Lazarus Estates Ltd. vs. Beasley, (1956) 1 ALL ER 341., It is well‑settled that writ jurisdiction is discretionary in nature and that the discretion must be exercised equitably for promotion of good faith vide State of Maharashtra vs. Prabhu, (1994) 2 SCC 481. This Court has further emphasized that fraud and collusion vitiate the most solemn precedent in any civilized jurisprudence; and that fraud and justice never dwell together (fraus et jus nunquam cohabitant). This maxim has never lost its lustre over the centuries. Thus, any litigant who is guilty of inhibition before the Court should not bear the fruit and benefit of the Court’s orders. This Court has also held that fraud is an act of deliberation with a desire to secure something which is otherwise not due. Fraud is practiced with an intention to secure undue advantage. Thus, an act of fraud on courts must be viewed seriously., Further, fraud can be established when a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, being careless about whether it be true or false. While suppression of a material document would amount to a fraud on the Court, suppression of material facts vital to the decision to be rendered by a court of law is equally serious. Thus, once it is held that there was a fraud in judicial proceedings all advantages gained as a result of it have to be withdrawn. In such an eventuality, doctrine of res judicata or doctrine of binding precedent would not be attracted since an order obtained by fraud is non est in the eye of law., In K.D. Sharma vs. Steel Authority of India Limited, (2008) 12 SCC 481, this Court held that the jurisdiction of the Supreme Court of India under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the writ court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the Court, his petition may be dismissed at the threshold without considering the merits of the claim., The above principles have been accepted in our legal system also. As per settled law, the party who invokes the extraordinary jurisdiction of the Supreme Court of India under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play \hide and seek\ or to \pick and choose\ the facts he likes to disclose and to suppress or not to disclose other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete facts. If material facts are suppressed or distorted, the very functioning of writ courts and exercise would become impossible. The petitioner must disclose all the facts bearing on the relief sought without any qualification. This is because \the court knows law but not facts\., Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, maneuvering or misrepresentation, which has no place in equitable and prerogative jurisdiction. If the applicant does not disclose all the material facts fairly and truly but states them in a distorted manner and misleads the court, the court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the Rule nisi and refuse to proceed further with the examination of the case on merits. If the court does not reject the petition on that ground, the court would be failing in its duty. In fact, such an applicant requires to be dealt with for contempt of court for abusing the process of the court., In K. Jayaram vs. Bangalore Development Authority, 2021 SCC OnLine SC 1194, a bench of this Court headed by Justice Nazeer, J. noticed that the appellants therein had not come to the Court with clean hands. The appellants had not disclosed the filing of a suit and its dismissal and also the dismissal of the appeal against the judgment of the Civil Court. This Court stressed that the parties have to disclose the details of all legal proceedings and litigations either past or present concerning any part of the subject matter of dispute which is within their knowledge in order to check multiplicity of proceedings pertaining to the same subject‑matter and more importantly to stop the menace of soliciting inconsistent orders through different judicial forums by suppressing material facts either by remaining silent or by making misleading statements in the pleadings in order to escape the liability of making a false statement. This Court observed that since the appellants had not disclosed the filing of the suit and its dismissal and also the dismissal of the appeal against the civil court, the appellants had to be non‑suited on the ground of suppression of material facts. They had not come to the court with clean hands and they had also abused the process of law, therefore, they were not entitled to the extraordinary, equitable and discretionary relief., A Division Bench of this Court comprising Justice B. R. Gavai and Justice C. T. Ravikumar, placing reliance on the dictum in S.P. Chengalvaraya Naidu, held in Ram Kumar vs. State of Uttar Pradesh, AIR 2022 SC 4705, that a judgment or decree obtained by fraud is to be treated as a nullity., We wish to consider the case from another angle. The order of the Supreme Court of India dated 13.05.2022 is also per incuriam for the reason that it fails to follow the earlier binding judgments of this Court including that of the Constitution Bench in V. Sriharan vis‑vis the appropriate Government which is vested with the power to consider an application for remission as per sub‑section (7) of Section 432 of the Criminal Procedure Code and that of the nine‑Judge Bench decision in Naresh Shridhar Mirajkar that an order of a High Court cannot be set aside in a proceeding under Article 32 of the Constitution., In State of Uttar Pradesh vs. Synthetics and Chemicals Ltd., (1991) 4 SCC 139, a two‑Judge Bench of this Court (speaking through Justice Sahai, who also wrote the concurring judgment along with Justice Thommen) observed that the expression per incuriam means per ignoratium. This principle is an exception to the rule of stare decisis. The quotable in law is avoided and ignored if it is rendered, in ignoratium of a statute or other binding authority. It would result in a judgment or order which is per incuriam., The courts have taken recourse to this principle for relieving from injustice being perpetrated by unjust precedents. It was observed that uniformity and consistency are core of judicial discipline. But, if a decision proceeds contrary to the law declared, it cannot be a binding precedent. It was further observed that the seven‑Judge Bench in Synthetics and Chemicals Ltd. did not discuss the matter and had observed that the State cannot levy sales tax on industrial alcohol. In the subsequent matter which arose from the High Court between the same parties, it was held by this Court that the conclusion of law by the Constitution Bench that no sales or purchase tax could be levied on industrial alcohol was per incuriam and also covered by the rule of sub‑silentio and therefore, was not a binding authority or precedent., Another exception to the rule of precedents is the rule of sub‑silentio. A decision is passed sub‑silentio when the particular point of law in a decision is not perceived by the court or not present to its mind or is not consciously determined by the court and it does not form part of the ratio decidendi; it is not binding vide Amrit Das vs. State of Bihar, (2000) 5 SCC 488., One of the contentions raised in the present case was that since this Court in the order dated 13.05.2022 had directed that the State of Gujarat was the appropriate Government, the same was binding on the parties even though it may be contrary to the earlier decisions of this Court. We cannot accept such a submission having regard to what has been observed above in the case of Synthetics and Chemicals Ltd. which was also with regard to the application of the same doctrine between the very same parties inasmuch as when a judgment has been delivered per incuriam or passed sub‑silentio, the same cannot bind either the parties to the judgment or be a binding precedent for the future even between the same parties. Therefore, for this reason also, the order dated 13.05.2022 would not bind the parties thereto and particularly, to the petitioner in Writ Petition (Criminal) No.491 of 2022 who was in any case not a party to the said writ proceeding., Having regard to the above discussion and in light of the provisions of the Criminal Procedure Code, the judgments of this Court and our own understanding of the order dated 13.05.2022 passed by a coordinate Bench of this Court in Writ Petition No.135 of 2022, we hold as follows: (i) that the Government of the State of Gujarat (respondent No.1 herein) had no jurisdiction to entertain the applications for remission or pass the orders of remission on 10.08.2022 in favour of respondent No.3 to 13 herein as it was not the appropriate Government within the meaning of sub‑section (7) of Section 432 of the Criminal Procedure Code; (ii) that this Court’s order dated 13.05.2022 being vitiated and obtained by fraud is therefore a nullity and non est in law. All proceedings taken pursuant to the said order also stand vitiated and are non est in the eye of law., Point No.3 is accordingly answered.
|
id_1684
| 8
|
Point No.4: Whether the impugned order of remission passed by the respondent State of Gujarat in favour of respondent Nos.3 to 13 is in accordance with law? We have perused the original record which is the English translation from Gujarati language., Even according to the respondent State of Gujarat Radheshyam Bhagwandas Shah has not made any application seeking remission before the Superintendent, Godhra Sub‑Jail or the State of Gujarat on 01.08.2019., All the other applications were made even prior to the order of the Supreme Court of India made in Writ Petition (Criminal) No.135 of 2022 on 13.05.2022. Within the next few days, i.e., on 26.05.2022, the Jail Advisory Committee gave its opinion recommending grant of remission. The recommendation of the Additional Director General and Inspector General of Jails was received in most cases on 09.06.2022. In two cases, the recommendation of the Additional Director General and Inspector General was received on 18.08.2021 and 09.06.2021 (in the case of Govind Bhai Akham Bhai Nai (Raval)) and on 18.08.2021 (in the case of Radheshyam Bhagwandas Shah)., The communication of the State Government to the Central Government was made on 28.06.2022; the second respondent Union of India gave its concurrence on 11.07.2022; and the order of remission was made on 10.08.2022., We extract one of the orders of remission dated 10.08.2022 in the case of respondent No.3 as follows: Order Number JLK/83202/2978/J Secretariat House, Gandhinagar, Dated: 10/08/2022. Reference: (1) Order of the Supreme Court of India dated 13/05/2022, Writ Petition (Criminal) No.135/2022. (2) The Additional Director General of Police and Inspector General of Prisons, State of Gujarat, Ahmedabad, letter dated 17/06/2022 No. JUD/14 Year/2/4754/2022. (3) Department Circular dated 09/07/1992. (4) Ministry of Home Affairs, Government of India, letter dated 11/07/2022, No.15/05/2022/JC‑II., Mr. Radheshyam Bhagwandas Shah, from Godhra Sub‑Jail, filed a writ petition in the Supreme Court of India as per reference (1) and the Supreme Court passed an order to take a decision as per policy mentioned in reference (3) within two months regarding the premature release application of Mr. Shah. The premature release proposal was prepared and sent by the Additional Director General of Police and Inspector General of Prisons as per reference (2). The provision under Section 432 of the Criminal Procedure Code gives the State Government power for premature release, however Section 435(1)(A) of the Criminal Procedure Code indicates that any case investigated by an agency established by Union Government Rules must be consulted with the Central Government. This case was investigated by the Central Bureau of Investigation, therefore the State Government of Gujarat, in consultation with the Central Government, sent a letter dated 28/06/2022. Pursuant to that, the Ministry of Home Affairs of the Government of India gave a positive opinion regarding the release of the prisoner as per reference (4). Considering all the details, the release of Mr. Radheshyam Bhagwandas Shah was under consideration., The provision under the Criminal Procedure Code, 1973, Section 443(A) gives power to the State Government under Section 432 of the Criminal Procedure Code, 1973. The convict prisoner Radheshyam Bhagwandas Shah’s life sentence was remitted under the following conditions and the Government decided to release him with immediate effect: (1) He shall furnish surety of two gentlemen that after his release he will behave well for two years and also give an undertaking that he will not breach public peace or harass parties and witnesses. (2) After being released, if he commits a cognizable offence causing grievous hurt to any person or property, he may be re‑arrested and shall serve the remaining part of his sentence. (3) After release he must give his attendance at the nearest police station once a month for one year. The jail authority shall read and explain the above conditions to him and, before releasing him, must keep a written record indicating that he has understood and agrees to these conditions of release. By order of the Governor of Gujarat and in his name. (Mayursinh Vaghela) Under Secretary, Home Department., Though we have extracted one of the remission orders, we observe that, having given our categorical finding on Point No.3, it may not be necessary to dilate on certain aspects of Point No.4, though it is quite evident that the said order is a non‑speaking one reflecting a complete lack of application of mind. All orders dated 10.08.2022 are stereotyped and cyclostyled orders., Be that as it may, it would be useful to refer to the following judgments in the context of passing an order of remission in terms of Section 432 read with Section 435 of the Criminal Procedure Code. (a) V. Sriharan is a judgment of the Supreme Court of India wherein the Constitution Bench answered seven questions, of which the following are relevant for the purposes of this case: (iii) Whether the power under Sections 432 and 433 of the Criminal Procedure Code by the appropriate Government would be available even after the constitutional power under Articles 72 and 161 by the President and the Governor is exercised as well as the power exercised by this Court under Article 32? (iv) Whether the State or the Central Government has primacy under Section 432(7) of the Criminal Procedure Code? (v) Whether there can be two appropriate Governments under Section 432(7)? (vi) Whether power under Section 432(1) can be exercised suo motu without following the procedure prescribed under Section 432(2)? (vii) Whether the expression ‘consultation’ stipulated in Section 435(1) really means concurrence? This Court observed that the procedure to be followed under Section 432(2) is mandatory and that suo motu power of remission cannot be exercised under Section 432(1); it can only be initiated by an application of the person convicted as provided under Section 432(2) and the ultimate order of suspension of sentence or remission should be guided by the opinion of the Presiding Officer of the Court concerned. In this case the earlier judgment of this Court in Sangeet was approved., (b) In Sangeet, it was observed that a convict undergoing a sentence does not have a right to get remission of sentence, however, he does have a right to have his case considered for the grant of remission as held in Mahender Singh and Jagdish. It was further observed that there does not seem to be any decision of this Court detailing the procedure to be followed for the exercise of power under Section 432 of the Criminal Procedure Code, which only lays down the basic procedure i.e., by making an application to the appropriate Government for the suspension or remission of a sentence, either by the convict or someone on his behalf. Sub‑section (1) of Section 432 of the Criminal Procedure Code is only an enabling provision to override a judicially pronounced sentence, subject to the fulfilment of certain conditions found either in the Jail Manual or in statutory rules. When an application for remission is made, the appropriate Government may decide on the application and pass orders granting remission subject to certain conditions or refuse remission. There must be an application of mind on the remission application to eliminate discretionary mass release of convicts on festive occasions, since each release requires case‑by‑case scrutiny. The power of remission cannot be exercised arbitrarily and the decision to grant remission has to be well‑informed, reasonable and fair to all concerned. The statutory procedure under Section 432 of the Criminal Procedure Code provides a check on the possible misuse of power of the appropriate Government., (i) It was further observed that there is a misconception that a prisoner serving a life sentence has an indefeasible right to be released on completion of fourteen years or twenty years of imprisonment; in reality, the prisoner has no such right. A convict undergoing life imprisonment is expected to remain in custody till the end of his life, subject to any remission granted by the appropriate Government under Section 432 of the Criminal Procedure Code, which is subject to the procedural checks in that section and the substantive check in Section 433‑A of the Criminal Procedure Code. The application of Section 432 to a convict is limited insofar as a convict serving a definite term of imprisonment is entitled to earn a period of remission under a statutory rule framed by the appropriate Government or under the Jail Manual. The said period is then offset against the term of punishment. Thus, upon completion of the requisite period of incarceration, a prisoner’s release is automatic. However, Section 432 will apply only when a convict is to be given an additional period of remission beyond what he has earned as per the Jail Manual or statutory rules. In the case of a convict undergoing life imprisonment, the period of custody is indeterminate. Remissions earned or awarded to such a life convict are only notional and Section 432 reduces the period of incarceration by an order passed by an appropriate Government which cannot be reduced to less than fourteen years as per Section 433‑A., This Court, after a detailed discussion, came to the following conclusions on the aspect of grant of remissions: (77.5) The grant of remissions is statutory. However, to prevent its arbitrary exercise, the legislature has built in procedural and substantive checks in the statute which need to be faithfully enforced. (77.6) Remission can be granted under Section 432 of the Criminal Procedure Code in the case of a definite term of sentence. The power under this section is available only for granting additional remission, that is, for a period over and above the remission granted under the Jail Manual or other statutory rules. If the term of sentence is indefinite (as in life imprisonment), the power under Section 432 can be exercised but not on the basis that life imprisonment is an arbitrary or notional figure of twenty years of imprisonment. (77.7) Before exercising the power of remission under Section 432, the appropriate Government must obtain the opinion (with reasons) of the Presiding Judge of the convicting or confirming Court. Remissions can therefore be given only on a case‑by‑case basis and not in a wholesale manner., (c) Ram Chander was a case of a writ petition filed before the Supreme Court of India under Article 32 of the Constitution seeking a direction to the respondent State to grant him premature release. The Court, speaking through Justice D.Y. Chandrachud (presently the Chief Justice), considered the aspect of judicial review of the power of remission and referred to Mohinder Singh to observe that the power of remission cannot be exercised arbitrarily and the decision to grant remission should be informed, reasonable and fair. In this context, reliance was placed on Laxman Naskar wherein the Court stipulated the factors that govern the grant of remission namely: (i) Whether the offence is an individual act of crime without affecting society at large; (ii) Whether there is any chance of future recurrence of committing crime; (iii) Whether the convict has lost his potentiality in committing crime; (iv) Whether there is any fruitful purpose of confining this convict any more; (v) Socio‑economic condition of the convict’s family., (i) While the grant of remission is the exclusive prerogative of the executive, the Court cannot supplant its view. The Court can direct the authorities to reconsider the representation of the convict as in Rajan. Therefore, while there can be no direction to release a prisoner forthwith or to remit the remaining sentence, at best there can be a direction to the State to consider the representation made for remission expeditiously on its own merits and in accordance with law. In this case, reliance was placed on Halsbury’s Law of India (Administrative Law) to observe that sufficiency of reasons, in a particular case, depends on the facts of each case while considering an application for remission. Mechanical or stereotyped reasons are not adequate; a mere repetition of statutory language in the order will not make the order a reasoned one. The application for remission was directed to be reconsidered with adequate reasoning and taking into consideration all the relevant factors that govern the grant of remission as laid down in Laxman Naskar., (d) Epuru Sudhakar is also a case where a writ petition was filed under Article 32 of the Constitution challenging an order of the Government of Andhra Pradesh, whereby a convict (respondent No.2) was granted remission of an unexpired period of about seven years imprisonment. The petition was filed by the son of the murdered person while the convict was on bail in the murder case of the petitioner’s father. It was alleged that the grant of remission was illegal as relevant materials were not placed before the Governor and the impugned order was made without application of mind and based on irrelevant and extraneous materials and therefore liable to be set aside. That was a case where remission or grant of pardon was under Article 161 of the Constitution by the Governor of the State of Andhra Pradesh. The Supreme Court of India, while considering the philosophy underlying the power of pardon or clemency, observed that the power exercised by a department or functionary of the Government is in the context of its political morality. Reliance was placed on Biddle v. Perovich, 274 US 480 (1927), in which Justice Holmes observed that a pardon in our days is not a private act of grace from an individual possessing power; it is part of the constitutional scheme. When granted, it is the determination of the ultimate authority that the public welfare will be better served by inflicting less than what the judgment fixed., It was observed that the prerogative of mercy exercised by a State as a prerogative power of a Crown as in England or of the President of India or Governor of a State in India is reviewable as an administrative action in case there is an abuse in the exercise of the prerogative power. The prerogative power to pardon or grant clemency or remission of sentence being a discretionary power must be exercised for the public good and can be examined by the Courts just as any other discretionary power vested with the executive. Therefore, judicial review of the exercise or non‑exercise of the power of pardon by the President or Governor is available in law. Any exercise of public power, including constitutional power, shall not be exercised arbitrarily or mala fide as observed in Maru Ram. Considerations of religion, caste, colour or political loyalty are irrelevant and constitute discrimination. Determining whether the act of a constitutional or statutory functionary falls within the constitutional or legislative conferment of power or is vitiated by self‑denial or erroneous appreciation is a matter for the Court as in Kehar Singh v. Union of India (1989) 1 SCC 204., (ii) In Epuru Sudhakar, two other aspects were considered: one relating to the desirability of indicating reasons in the order granting pardon/remission and the other relating to the power to withdraw the order of granting pardon/remission if subsequently materials are placed showing that certain relevant materials were not considered or certain material of extensive value were kept out of consideration. It was observed that the affected party need not be given the reasons but that does not mean that there should not be legitimate or relevant reasons for passing the order. In the absence of any specific reference under Articles 72 or 161 of the Constitution regarding withdrawal of an order of remission, there is no bar for such power being exercised., (iii) On consideration of the facts of the case, it was observed that irrelevant and extraneous materials had entered the decision‑making process, thereby vitiating it. The order granting remission impugned in the writ petitions was set aside as unsustainable and directed to be reconsidered, and the writ petition was allowed to that extent. Justice Kapadia, as the Chief Justice then, in his concurring opinion observed that exercise of executive clemency is a matter of discretion yet subject to certain standards. The discretion has to be exercised with public considerations. Therefore, the principle of exclusive cognizance would not apply when the decision impugned is in derogation of a constitutional provision. Granting of pardon has the effect of eliminating conviction without addressing the defendant’s guilt or innocence., (iv) The exercise of the prerogative power is subject to judicial review and the rule of law, which is the basis for evaluation of all decisions. The rule of law cannot be compromised on the grounds of political expediency; doing so would be subversive of the fundamental principles of the rule of law and would set a dangerous precedent., (e) In Mansukhlal Vithaldas Chauhan v. State of Gujarat, (1997) 7 SCC 622, the basis on which the legality of an administrative decision could be reviewed was stated. It could be on whether a decision‑making authority exceeded its powers, committed an error of law, breached rules of natural justice, reached a decision which no reasonable tribunal would have reached, or abused its powers. In other words, judicial review of the order of the President or the Governor under Articles 72 or 161 of the Constitution is available and such orders can be impugned on the following grounds: (i) the order was passed without application of mind; (ii) the order is mala fide; (iii) the order was passed on extraneous or wholly irrelevant considerations; (iv) relevant materials were kept out of consideration; (v) the order suffers from arbitrariness., (f) Further, in Swamy Shraddananda, it was observed that judicial notice has to be taken of the fact that remission, if allowed to life convicts in a mechanical manner without any sociological or psychiatric appraisal of the convict and without proper assessment of the effect of early release on society, is problematic. The power of executive clemency is not only for the benefit of the convict but must also consider the effect on the victims’ families, society as a whole, and the precedent it sets for the future. Thus, the exercise of power depends upon the facts and circumstances of each case and must be judged case by case. The exercise or non‑exercise of the power of pardon or remission is subject to judicial review and a pardon obtained by fraud, granted by mistake, or for improper reasons would invite judicial review. The rule of law should be the overarching justification for judicial review., (g) In Rajan, it was observed that where a person has been convicted on several counts for different offences in relation to which life imprisonment has been granted, the convict may be released prematurely only if the competent authority passes an order of remission concerning all the life sentences awarded to the convict on each count, which is a matter to be considered by the competent authority., With regard to the remission policy applicable in a given case, the following judgments are of relevance: (a) In Jagdish, a three‑Judge Bench of the Supreme Court of India considered the conflicting opinions expressed in State of Haryana v. Balwan, (1999) 7 SCC 355 and Mahendar Singh, and State of Haryana v. Bhup Singh, (2009) 2 SCC 268. The question considered was whether the policy which provides for remission and sentence should be that which was existing on the date of conviction of the accused or the policy that existed on the date of consideration of his case for premature release by the appropriate authority. Noting that remission policy changes from time to time and after referring to various decisions of this Court, including Gopal Vinayak Godse and Ashok Kumar, the Court observed that liberty is one of the most precious and cherished possessions of a human being and must be protected. Rehabilitation and social reconstruction of a life convict, as an objective of punishment, become of paramount importance in a welfare State. The State has to protect society from the convict and also rehabilitate the offender. The remission policy manifests a process of reshaping a person who, under certain circumstances, has indulged in criminal activities and is required to be rehabilitated. Punishment should not be regarded as the end but only a means to an end. Relevancy of circumstances to an offence such as the state of mind of the convict when the offence was committed are factors to be taken note of. It was further observed: At the time of considering the case of premature release of a life convict, the authorities may need to consider whether the offence was an individual act of crime without affecting society at large; whether there was any chance of future recurrence of crime; whether the convict had lost his potentiality in committing the crime; whether there was any fruitful purpose of confining the convict any more; the socio‑economic condition of the convict’s family and other similar circumstances. The executive power of clemency gives an opportunity to the convict to reintegrate into society, but must be exercised only in appropriate cases. Ultimately, it was held that the case for remission has to be considered on the strength of the policy that was existing on the date of conviction of the accused. It was further observed that if no liberal policy prevails on the date of consideration of the case of a convict under life imprisonment for premature release, he should be given the benefit thereof subject to Section 433‑A of the Criminal Procedure Code., At this juncture, it is relevant to refer to the following decisions of the Supreme Court of India, wherein orders of remission have been quashed and set aside on various grounds: (a) In Swaran Singh v. State of Uttar Pradesh, (1998) 4 SCC 75, a three‑Judge Bench considered the scope of judicial review of an order of a Governor under Article 161 of the Constitution of India. A Member of the Legislative Assembly of Uttar Pradesh had been convicted of murder and, within less than two years, was granted remission from the remaining period of his life sentence. The son of the deceased moved the Allahabad High Court challenging the Governor’s action; the High Court dismissed the petition and the matter reached this Court. The Court noticed that the Governor exercised the power to grant remission without being apprised of material facts concerning the prisoner, such as his involvement in five other serious criminal cases, the rejection of his earlier clemency petition, and the jail authority’s report that his conduct inside the jail was far from satisfactory and that out of the two years and five months he was supposed to have been in jail, he was in fact out on parole for a substantial part thereof. The Court held that when the Governor was not aware of material facts, the Governor was deprived of the opportunity to exercise the power to grant remission in a fair and just manner and that the order granting remission was arbitrary. Consequently, the order was quashed with a direction to reconsider the petition of the prisoner in light of the materials which the Governor had not known earlier., The Constitution Bench in Kehar Singh v. Union of India (1989) 1 SCC 204 considered the scope of judicial review of powers under Articles 72 and 161. It observed that all public power, including constitutional power, shall never be exercised arbitrarily or mala fide, and that guidelines for fair and equal execution are guarantors of valid exercise of power. The bench suggested making rules for guidance in the exercise of the pardon power, keeping a large residuary power to meet special situations or sudden developments., In view of the settled legal position, we cannot accept the rigid contention of the learned counsel for the third respondent that the Supreme Court of India has no power to touch the order passed by the Governor under Article 161 of the Constitution. If such power was exercised arbitrarily, mala fide or in absolute disregard of the finer canons of constitutionalism, the order cannot obtain the approval of law and, in such cases, the judicial hand must be stretched to it., (b) In Joginder Singh v. State of Punjab, (2001) 8 SCC 306 the facts were that the respondents‑convicts were convicted for offences punishable under Sections 324, 325 and 326 read with Section 34 of the Indian Penal Code and had been awarded a sentence of one year and six months which was challenged up to the High Court of Punjab and Haryana and was confirmed. On dismissal of the Revision Petition by the High Court, the convicts surrendered before the Superintendent of the concerned jail and on the same day were released by the jail authorities on being granted the benefit of remission. It is important to note that during the period of trial ending with confirmation of conviction in the Revision Petition by the High Court, the convicts were almost all out on bail except for a period of about two months and 25 days when they were in jail, serving part of their sentence. The appellant before this Court, who was the complainant, unsuccessfully challenged the remission order before the High Court and thereafter approached this Court by way of a Special Leave Petition. The primary ground of challenge before this Court was that the periods of remission permissible under successive notifications issued between 13.07.1988 and 29.07.1998 (period between date of conviction by the Chief Judicial Magistrate and the date on which the conviction and sentence was upheld by the High Court) were cumulatively allowed to the convicts. It was contended that the maximum period of remission permissible under each of the seven notifications was to be cumulatively taken into account to grant a total remission of 17.5 months. It was further contended that while applying the period of remission granted by the Government under any remission notification, the period during which an accused person was out on bail cannot be taken into account.
|
id_1684
| 9
|
Supreme Court of India while allowing the appeal of the appellant therein complainant held that the High Court of Gujarat fell in error in holding that the convicts were entitled to the benefit of the period of remission given by the various notifications cumulatively to be counted against the period during which they were out on bail., In Satpal, the order of the Governor granting remission to convicts, in the exercise of power conferred by Article 161 of the Constitution of India read with Section 132 of the Code of Criminal Procedure, was assailed by the brother and widow of the deceased. The primary ground raised before the Supreme Court of India was that the power to grant remission was exercised without application of mind, and that the said power was exercised by the Governor having regard to extraneous considerations and even without the aid and advice of the Government, namely, the concerned Minister. The Supreme Court of India examined the case having regard to the parameters of judicial review in relation to an order granting remission by the Governor. It was noted that the Governor had proceeded to grant remission of sentence without any knowledge as to the period of sentence already served by the convicts and if at all they had undergone any period of imprisonment. An order granting remission would be arbitrary and irrational if passed without knowledge or consideration of material facts., On a reading of the aforesaid judgments, what emerges is that the power to grant remission on an application filed by the convict or on his behalf is ultimately an exercise of discretion by the appropriate Government. It is trite that where there is exercise of legal power coupled with discretion by administrative authorities, the test is whether the authority concerned was acting within the scope of its powers. This would mean that the concerned authority, and in the instant case the appropriate Government, had not only the jurisdiction and authority vested to exercise its powers but exercised its powers in accordance with law, i.e., not in an arbitrary or perverse manner without regard to the actual facts, which would lead to a conclusion in the mind of the Supreme Court of India that there has been an improper exercise of discretion. If there is improper exercise of discretion, it is an instance of an abuse of discretion. Abuse of discretion can occur when the administrative order or exercise of discretion smacks of mala fides, or when it is based on irrelevant consideration by ignoring relevant consideration, or when it is due to a colourable exercise of power; it is unreasonable and there is absence of proportionality. There could also be an abuse of discretion where there is failure to apply discretion owing to mechanical exercise of power, non‑application of mind, acting under dictation, seeking assistance or advice, or any usurpation of power., It is not necessary to dilate upon each of the aforesaid aspects of abuse of discretion in the instant case, as we have observed that the consideration of the impugned orders or manner of exercise of powers is unnecessary, having regard to the answer given by us to Point No.3., However, it would be relevant to refer to one aspect of abuse of discretion, namely, usurpation of power. Usurpation of power arises when a particular discretion vested in a particular authority is exercised by some other authority in whom such power does not lie. In such a case, the question whether the authority which exercised discretion was competent to do so arises., Applying the said principle to the instant case, we note that having regard to the definition of appropriate Government and the answer given by us to Point No.3, the exercise of discretion and the passing of the impugned orders of remission in the case of respondent Nos.3 to 13 herein was an instance of usurpation of power. It may be that the Supreme Court of India by its order dated 13 May 2022 passed in Writ Petition No.135 of 2022 had directed the first respondent State of Gujarat to consider the case of respondent No.3 under the 1992 Policy of the State of Gujarat, by setting aside the order of the High Court of Gujarat dated 17 July 2019. In the said writ petition, the State of Gujarat had correctly submitted before the Supreme Court of India that the appropriate Government in the instant case was the State of Maharashtra and not the State of Gujarat. The contention was in accordance with the definition of appropriate Government under clause (b) of sub‑section (7) of Section 432 of the Code of Criminal Procedure. However, the contention was rejected by the Supreme Court of India contrary to several judgments of the Supreme Court of India including that of the Constitution Bench in V. Sriharan. The State of Gujarat failed to file a review petition seeking correction of the order of the Supreme Court of India dated 13 May 2022, particularly when we have now held that the said order is a nullity. Complying with the said order can also be said to be an instance of usurpation of power when the provision, namely clause (b) of sub‑section (7) of Section 432, states otherwise., We fail to understand why the State of Gujarat, first respondent herein, did not file a review petition seeking correction of the order dated 13 May 2022 passed by the Supreme Court of India in Writ Petition No.135 of 2022 in the case of respondent No.3 herein. Had the State of Gujarat filed an application seeking review of the said order and impressed upon the Supreme Court of India that it was not the appropriate Government but the State of Maharashtra was the appropriate Government, ensuing litigation would not have arisen at all. In the absence of filing any review petition seeking a correction of the order passed by the Supreme Court of India dated 13 May 2022, the first respondent State of Gujarat has usurped the power of the State of Maharashtra and has passed the impugned orders of remission on the basis of an order of the Supreme Court of India dated 13 May 2022, which, in our view, is a nullity in law., In this regard it is necessary to elaborate on the background to this case and refer to the previous orders passed by the Supreme Court of India as follows: The first order, dated 16 December 2003, referred the matter to the Central Bureau of Investigation for investigation; the second order transferred the trial from the competent Court in Gujarat to the Special Court at Mumbai; and the third order granted compensation to the petitioner in Writ Petition (Criminal) No.491 of 2022. The relevant portions of the aforesaid orders read as under: W.P.(Cr.) No.118 of 2003, dated 16 December 2003, referring the matter to the CBI for investigation. Considering the nature of allegations made, Shri Mukul Rohtagi, learned Additional Solicitor General appearing for the respondents, accepted that further investigation in this case may be done by the CBI, though he did not concede that the Gujarat Police is incompetent to investigate the matter. Hence, we directed the CBI to take over further investigation of this case and report to the Supreme Court of India from time to time. A report was to be filed by the CBI within eight weeks. Transfer Petition (Cr.) No.192 of 2004, dated 6 August 2004, transferred the trial from the competent Court in Gujarat to the Special Court at Mumbai. We are of the view that, on account of the nature and the allegations of the case, session case No.161 of 2004 before the Additional Sessions Judge, Dahod, should be transferred to the Additional Sessions Judge of the Fourth Court of the City Civil Sessions Court, Ahmedabad (CBI Case No. RCZ/S/2004, SCB Mumbai) titled CBI vs. Jaswantbhai Chaturbhai & Others, to any competent Court in Mumbai for trial and disposal. This order was placed before the Chief Justice of the Bombay High Court who shall designate the competent Court as he may deem fit. The transfer petition was accordingly allowed. The order is based on the perceptions of the CBI as recorded in its report and should not be taken as a reflection on the competence or impartiality of the judiciary in the State of Gujarat. Having regard to the peculiar facts of this case, the State of Gujarat shall bear the expenditure of the defence of the accused in accordance with the provisions of Section 304 of the Code of Criminal Procedure. It is made clear that for the purpose of this case the Central Government will appoint the public prosecutor. Criminal Appeal Nos.727‑733 of 2019, order dated 23 April 2019, compensation: The appellant, Bilkis Yakub Rasool, is a victim of riots which occurred in the aftermath of the Godhra train burning incident in the State of Gujarat on 27 February 2002. The appellant, while eventually the perpetrators of the crime including the police personnel were punished, was twenty‑one years and pregnant at that time, having lost all members of her family in the brutal attacks, and needs to be adequately compensated. Additional facts are that the appellant was repeatedly gang‑raped and was a mute and helpless witness to her three‑and‑a‑half‑year‑old daughter being butchered to death. The factual position is undisputed and unchallenged in light of the findings of the trial court upheld by the High Court of Gujarat and the Supreme Court of India. The appellant is presently about forty years of age, without any home, lives with her daughter who was born after the incident, has been coerced to live a nomadic life as an orphan, and is barely sustaining herself on charity of NGOs, having lost the company of her family members. The gruesome acts of violence have left an indelible imprint on her mind which will continue to torment and cripple her. The Court does not need to elaborate principles of law to conclude that the appellant deserves to be adequately compensated. The quantum of compensation needs to be worked out. Time and again the Supreme Court of India has held that the compensation so awarded must be just and fair, and the criteria objective. However, this case has to be dealt with differently as the loss and suffering evident from the facts surpass normal cases. Taking into account the totality of the facts, we are of the view that compensation of Rs.50,00,000 (Rupees fifty lakh only) to be paid by the State Government within two weeks from today, on proper identification, would meet the ends of justice. Coupled with the aforesaid relief, we deem it proper to further direct the State Government to provide the appellant with employment under the State, if she wishes, and also to offer her government accommodation at a place of her choice, if she is willing to live in such accommodation. With the aforesaid direction, the appeals relating to compensation are disposed of. The aforesaid orders clearly indicate why the Supreme Court of India transferred the investigation and trial to the CBI and to the State of Maharashtra respectively., It was the State of Maharashtra which was the appropriate Government that had to consider the appellant for remission vis‑vis respondent Nos.3 to 13 herein. Instead, being unsuccessful before the High Court of Gujarat, respondent No.3 surreptitiously filed the writ petition before the Supreme Court of India seeking a direction to consider his case for remission without disclosing the full and material facts before the Supreme Court of India. Relief was granted by the Supreme Court of India by conferring jurisdiction on the State of Gujarat, which it did not possess as per Section 432(7) of the Code of Criminal Procedure, in the guise of consideration for remission on the basis of the 9 July 1992 policy, which had also been cancelled in 2013. Taking advantage of the Supreme Court of India's order dated 13 May 2022, all other convicts also sought consideration of their case by the Government of Gujarat for remission even in the absence of any such direction in their cases by the Supreme Court of India. Thus, the State of Gujarat has acted on the basis of the direction issued by the Supreme Court of India but contrary to the letter and spirit of law. The State of Gujarat never sought a review of the order of the Supreme Court of India dated 13 May 2022 by bringing to the notice of the Supreme Court of India that it was contrary to Section 432(7) and judgments of the Supreme Court of India., Instead, the State of Gujarat has acted in tandem and was complicit with what the petitioner‑respondent No.3 herein had sought before the Supreme Court of India. This is exactly what the Supreme Court of India had apprehended at the previous stages of this case and had intervened on three earlier occasions in the interest of truth and justice by transferring the investigation of the case to the CBI and the trial to the Special Court at Mumbai. However, in our view, when no intervention was called for in the writ petition filed by one of the convicts/respondent No.3 herein, the Supreme Court of India was misled to issue directions contrary to law and on the basis of suppression and misstatements made by respondent No.3 herein. We have held that the order of the Supreme Court of India dated 13 May 2022 is a nullity and non est in the eye of law. Consequently, the exercise of discretion by the State of Gujarat is nothing but an instance of usurpation of jurisdiction and an instance of abuse of discretion. If the State of Gujarat had in mind the provisions of law and the judgments of the Supreme Court of India, and had adhered to the rule of law, it would have filed a review petition before the Supreme Court of India by contending that it was not the appropriate Government. By failing to do so, not only are the earlier orders of the Supreme Court of India in the matter vindicated but, more importantly, the rule of law has been breached by usurping power not vested in it and thereby aiding respondent Nos.3 to 13., Therefore, without going into the manner in which the power of remission has been exercised, we strike down the orders of remission on the ground of usurpation of powers by the State of Gujarat not vested in it. The orders of remission are hence quashed on this ground also. Section 432(2) of the Code of Criminal Procedure: Opinion of the Presiding Judge of the convicting court: Sub‑section (2) of Section 432 of the Code of Criminal Procedure states that when an application is made to the appropriate Government, inter alia, for remission of a sentence, the appropriate Government may require the Presiding Judge of the Court before or by which the conviction was had or confirmed to state his opinion as to whether the application should be granted or refused, together with his reasons for such opinion and also to forward, with the statement of such opinion, a certified copy of the record of the trial or of such record thereof as exists., Learned Additional Solicitor General Sri S.V. Raju submitted that the expression 'appropriate Government may require the opinion of the Presiding Judge of the Court' indicates that this is not a mandatory requirement; therefore, in the instant case the opinion of the Presiding Judge of the Court by which respondent Nos.3 to 13 were convicted, namely the Special Judge, Mumbai, was unnecessary. He further submitted that since the State of Gujarat was considering the applications for remission filed by respondent Nos.3 to 13, the opinion of the local Sessions Judge at Dahod was obtained as a member of the Jail Advisory Committee and there was a positive opinion for grant of remission to respondent Nos.3 to 13 herein., This contention was refuted by learned counsel Ms. Shobha Gupta, who reiterated that the expression 'may require' in sub‑section (2) of Section 432 of the Code of Criminal Procedure ought to be read as 'shall require'. This is evident from the dicta of the Supreme Court of India. Reliance was placed on certain judgments of the Supreme Court of India, namely: (i) In Sangeet, it was observed that before actually exercising the power of remission under Section 432 of the Code of Criminal Procedure, the appropriate Government must obtain the opinion (with reasons) of the Presiding Judge of the convicting or confirming Court. Remissions can therefore be given only on a case‑by‑case basis and not in a wholesale manner. (ii) In V. Sriharan, it was observed that the declaration of law made by the Supreme Court of India in Sangeet is correct and that the procedure to be followed under Section 432(2) of the Code of Criminal Procedure is mandatory. The manner in which the opinion is to be rendered by the Presiding Judge can be regulated by the concerned High Court and the Supreme Court by stipulating the required procedure whenever an application is forwarded by the appropriate Government. It was observed that the suo motu power of remission cannot be exercised under Section 432(1) of the Code of Criminal Procedure and can only be initiated based on an application of the person convicted under Section 432(2), and the ultimate order of remission should be guided by the opinion rendered by the Presiding Officer of the Court concerned. (iii) The Supreme Court of India, in Ram Chander, specifically dealt with the value of the opinion of the Presiding Judge, referring to paragraph 61 of Sangeet and paragraphs 148 and 149 of V. Sriharan, and observed in paragraphs 25 and 26 as follows: 25. In Sriharan, the Court observed that the opinion of the presiding judge illuminates the nature of the crime, the record of the convict, their background and other relevant factors. Crucially, the opinion would enable the government to take the right decision as to whether the sentence should be remitted. Hence, it cannot be said that the opinion of the presiding judge is only a relevant factor without any determinative effect on the application for remission. The purpose of the procedural safeguard under Section 432(2) would be defeated if the opinion of the presiding judge becomes merely another factor that may be taken into consideration by the government while deciding the application for remission, rendering the procedure a mere formality. 26. However, this is not to say that the appropriate Government should mechanically follow the opinion of the presiding judge. If the opinion does not comply with the requirements of Section 432(2) or if the judge does not consider the relevant factors for grant of remission laid down in Laxman Naskar v. Union of India, the government may request the presiding judge to consider the matter afresh., Thus, the consistent view of the Supreme Court of India is that the expression 'may' must be interpreted as 'shall' and as a mandatory requirement under sub‑section (2) of Section 432 of the Code of Criminal Procedure. The provision provides sufficient guidelines for how the opinion must be provided by the Presiding Judge of the Court which convicted the accused: (i) the opinion must state whether the application for remission should be granted or refused and, for either opinion, the reasons must be stated; (ii) the reasons must have a bearing on the facts and circumstances of the case; (iii) the reasons must be in tandem with the record of the trial or such record as exists; (iv) the Presiding Judge of the Court before or by which the conviction was had or confirmed must also forward, along with the statement of such opinion, a certified copy of the record of the trial or such record as exists., Having regard to the requirements which the Presiding Judge must comply with while stating his opinion to the appropriate Government on an application for remission of sentence made by a convict, it cannot be held that the expression 'may' in the provision is not mandatory, nor can it be left to the whims and fancies of the appropriate Government to seek or not seek the opinion of the Presiding Judge or the Court before which the conviction took place., In the instant case, when respondent No.3, Radheshyam Bhagwandas Shah, filed his application for remission before the State of Maharashtra pursuant to the order of the Gujarat High Court dated 17 July 2019, the State of Maharashtra sought the opinion of the Special Judge at Mumbai, who gave a negative opinion. This was one of the reasons for respondent No.3 to file Writ Petition (Criminal) No.135 of 2022 before the Supreme Court of India. Subsequently, when a direction was issued by the Supreme Court of India to the first respondent State of Gujarat to consider the application for remission, the opinion of the local Sessions Court at Dahod was obtained and the opinion of the Special Judge, Mumbai, where the trial had taken place, was ignored. The Sessions Court at Dahod had not complied with the mandatory requirements under sub‑section (2) of Section 432 of the Code of Criminal Procedure, as the opinion was not forwarded along with reasons having regard to the record of the trial, since no trial had taken place before the Sessions Court, Dahod. Further, the Presiding Judge of the Sessions Court, Dahod also did not forward any certified copy of the record of the trial. Moreover, the learned Sessions Judge at Dahod was also a member of the Jail Advisory Committee., We further observe that the Presiding Judge of the Court before which the conviction occurs can never be a member of the Jail Advisory Committee, as he is an independent authority who should give his opinion on the application seeking remission, which is a mandatory requirement under sub‑section (2) of Section 432. In the instant case, the opinion given by the District and Sessions Judge at Dahod is vitiated for two reasons: firstly, because he was not the Presiding Judge before which the conviction of respondent Nos.3 to 13 took place; and secondly, if the Presiding Judge of the Court where the conviction occurred is an independent authority that must be consulted by the appropriate Government, he could not have been a member of the Jail Advisory Committee., On perusal of the counter affidavit of the respondent State of Gujarat, it is noted that pursuant to the applications filed by respondent Nos.4 to 13 (respondent No.3 had filed his application before the State of Maharashtra on 1 August 2019) seeking premature release or remission, the opinion of the Special Judge (CBI), City Civil and Sessions Court, Greater Mumbai, was taken by the State of Gujarat and, with respect to all the respondent Nos.3 to 13, the categorical opinion was that, having regard to the Government’s Resolution dated 11 April 2008 issued by the State of Maharashtra, the prisoners should not be released prematurely. Had the State of Maharashtra considered the applications of respondent Nos.3 to 13 for remission, this vital opinion of the Presiding Judge of the Court which had convicted them would have carried weight in the mind of the Government of the State of Maharashtra as well as the terms of the Government’s Resolution dated 11 April 2008, which was the applicable policy for remission. In fact, the first respondent, namely the Government of the State of Gujarat, which usurped the power of the Government of the State of Maharashtra, simply brushed aside the opinion of the Special Judge (CBI), Greater Mumbai. Instead, the opinion of the Sessions Judge, Godhra, District Panchmahal, within whose jurisdiction the offences had occurred and who was a member of the Jail Advisory Committee, was highlighted by Sri S.V. Raju, learned Additional Solicitor General appearing for the State of Gujarat. Although this opinion is also negative, it is not in accordance with sub‑section (2) of Section 432 of the Code of Criminal Procedure and, therefore, is of no consequence except when viewed as an opinion of a member of the Jail Advisory Committee, Dahod Jail., As we have held, the first respondent State of Gujarat was not at all the appropriate Government; therefore, the proceedings of the Jail Advisory Committee of Dahod Jail, which recommended remission, are themselves vitiated, and there is no compliance with sub‑section (2) of Section 432 of the Code of Criminal Procedure in the instant case, as the said opinion was not considered by the appropriate Government. Accordingly, the orders of remission dated 10 August 2022 are vitiated., Learned counsel Mrs. Shobha Gupta contended that respondent Nos.3 to 13 had not paid the fine and therefore, in the absence of payment of fine, the default sentence ought to have been undergone by the respondents. This aspect of the matter was ignored while granting the orders of remission, and therefore, the orders of remission are vitiated on that score., In response to the above arguments, learned senior counsel Sri Sidharth Luthra submitted that although applications for payment of fine have been filed and are pending consideration before the Supreme Court of India, respondent Nos.3 to 13 have now on their own tendered the fine and the same has been accepted by the Special Court at Mumbai., In this regard, the following judgments were referred to: (a) In Shantilal v. State of Madhya Pradesh, (2007) 11 SCC 243, the contention was that the term of imprisonment in default of payment of fine is not a sentence but a penalty which a person incurs on account of non‑payment of fine. This penalty must be undergone by the offender unless it is set aside or remitted in part or in whole, either in appeal, revision, or other appropriate judicial proceedings. A term of imprisonment ordered in default of payment of fine stands on a different footing. A person is required to undergo imprisonment for default in payment of fine either because he is unable to pay the amount of fine or refuses to pay such amount. He can avoid imprisonment in default of payment of fine by paying the amount. It is the duty of the Court to consider the nature of the offence, the circumstances under which it was committed, the position of the offender and other relevant considerations before ordering imprisonment in default of payment of fine. (i) The further question considered was whether a Court of law can order a convict to remain in jail in default of payment of fine. It was observed that even in the absence of a specific provision empowering a Court to order imprisonment in default of payment of fine, such power is implicit.
|
id_1684
| 10
|
In Sharad Hiru Kolambe vs State of Maharashtra, (2018) 18 Supreme Court Cases 718, the point for consideration was the quantum of fine imposed by way of a default sentence in case of non‑payment of fine. It was contended that although the substantive sentence stood remitted and the appellant was directed to be released on completion of fourteen years of actual sentence, the appellant would still be inside till he completes twenty‑four years because the trial court in the said case directed all sentences shall run concurrently, therefore all default sentences must also run concurrently inter se. The default sentences so directed were alleged to be unconscionable and excessive., This Supreme Court of India, speaking through Justice Lalit (as the learned Chief Justice then was), observed that if the term of imprisonment in default of payment of fine is a penalty which a person incurs on account of non‑payment of fine and is not a sentence in a strict sense, imposition of such default sentence is completely different and qualitatively distinct from a substantive sentence. Theoretically, if the default sentences awarded in respect of imposition of fine in connection with two or more offences were to be clubbed or directed to run concurrently, there would be no occasion for the persons so sentenced to deposit the fine in respect of the second or further offences. It would effectively mean imposition of one single or combined sentence of fine, rendering the deterrent purpose of the fine meaningless., The Court further observed that there is no power of the Court to order the default sentences to run concurrently; if a prisoner does not pay the fine or refuses to pay the fine, he must undergo the default sentences so imposed., In Shahejadkhan Mahebubkhan Pathan vs State of Gujarat, (2013) 1 Supreme Court Cases 570, this Supreme Court of India, speaking through Justice Sathasivam (as the learned Chief Justice then was), held that the term of imprisonment in connection with a fine is not a sentence but a penalty which a person incurs on account of non‑payment of fine. When a sentence is imposed, an offender must undergo the same unless it is modified or varied in part or whole in the judicial proceedings or by way of remission. The imprisonment order in default of fine stands on a different footing; the person is required to undergo imprisonment either because he is unable to pay the fine or refuses to do so. The only way he can avoid imprisonment in default of payment of fine is by paying the amount., The aforesaid dicta clearly indicate that the sentence of imprisonment awarded for committing an offence is distinct from the imprisonment ordered to be undergone in default of payment of fine. The latter is not a substantive sentence for the commission of the offence but is a penalty for default in payment of fine. In the instant case, while considering the applications for remission, the Jail Advisory Committee did not take into consideration whether respondent numbers 3 to 13 had tendered the fine imposed by the Special Court and affirmed by the High Court of Bombay as well as by this Supreme Court of India. Consequently, a relevant consideration was omitted. Had the State of Gujarat considered the opinion of the Presiding Judge of the Court which had convicted respondents 3 to 13, the aspect of non‑payment of fine would have surfaced. In the absence of compliance with the direction to pay fine, a default sentence in the nature of penalty would arise. The question whether the default sentence or penalty had to be undergone by these respondents was a crucial consideration at the time of recommending remission to the State Government by the Jail Advisory Committee. This aspect was also not taken into consideration by the State Government while passing the impugned orders of remission. During the pendency of these writ petitions, applications were filed seeking permission to tender the fine amount. However, before the applications could be considered, the respondents paid the fine and produced receipts. This fact does not alter the consideration of the case of respondents 3 to 13, as the payment of fine ought to have been a point considered prior to the passing of the remission orders; remission of sentence, which is for reduction of the period of imprisonment, cannot relate to the payment of fine at all. The lack of application of mind renders the impugned orders of remission contrary to law and liable to be quashed., The Court indicated the factors that must be taken into account while entertaining an application for remission under the provisions of the Code of Criminal Procedure, though the list is not exhaustive. (a) The application for remission under Section 432 of the Code of Criminal Procedure may be made only before the Government of the State within whose territorial jurisdiction the applicant was convicted (appropriate Government) and not before any other Government where the applicant may have been transferred or where the offence occurred. (b) Remission must be applied for by the convict or on his behalf, and compliance with Section 433A of the Code of Criminal Procedure must be noted, as a person serving a life sentence cannot seek remission unless fourteen years of imprisonment have been completed. (c) The guidelines under Section 432(2) require the opinion of the Presiding Judge of the Court which convicted the applicant; the opinion must state whether remission should be granted or refused and the reasons, which must bear on the facts and circumstances of the case and have a nexus to the trial record, and a certified copy of the trial record must be forwarded. (d) The policy of remission applicable is that of the appropriate State Government; the policy in force at the time of conviction may apply, and if it cannot be applied, a more benevolent policy, if in vogue, may be applied. (e) While considering an application for remission, there must be no abuse of discretion. Relevant aspects include whether the offence is an individual act without affecting society at large, the chance of future recurrence, loss of potentiality to commit crime, any fruitful purpose of further confinement, and the socio‑economic condition of the convict’s family. (f) Consultation in accordance with Section 435 of the Code of Criminal Procedure is required wherever necessitated. (g) The Jail Advisory Committee may not have the District Judge as a member, as the District Judge, being a Judicial Officer, may be required to render an independent opinion under sub‑section (2) of Section 432. (h) Reasons for grant or refusal of remission should be clearly delineated in a speaking order. (i) When an order of remission is challenged, judicial review may consider whether the order was passed without application of mind, was mala fide, was based on extraneous or irrelevant considerations, omitted relevant materials, or suffered from arbitrariness., Summary of Conclusions: (a) The Supreme Court of India holds that Writ Petition (Criminal) No. 491 of 2022 filed under Article 32 of the Constitution is maintainable and it was not mandatory for the petitioner to have filed a writ petition under Article 226 before the Gujarat High Court. (b) Since the petition was filed by one of the victims invoking Article 32 before this Supreme Court of India, the question whether the public interest litigations assailing the impugned orders of remission dated 10.08.2022 are maintainable is left open for consideration in any other appropriate case. (c) In view of Section 432(7) read with Sections 432(1) and (2) of the Code of Criminal Procedure, the Court holds that the Government of the State of Gujarat had no jurisdiction to entertain the prayers seeking remission of respondents 3 to 13, as it was not the appropriate Government within the meaning of the provisions. Consequently, the orders of remission dated 10.08.2022 made in favour of respondents 3 to 13 are illegal, vitiated and are hereby quashed. (d) While holding as above, the Court also holds that the judgment dated 13.05.2022 passed by this Supreme Court of India is a nullity and is non est in law, as the order was obtained by suppression of material facts and misrepresentation of facts (suppressio veri, suggestio falsi), and therefore was fraudulently obtained. (e) Further, the petitioner in Writ Petition (Criminal) No. 491 of 2022, not being a party to the said writ proceeding, is not bound by the remission orders dated 10.08.2022 and is entitled to question those orders, including the correctness of the order dated 13.05.2022. The order dated 13.05.2022, being contrary to larger bench decisions of this Supreme Court of India (holding that the Government of the State within which the offender is sentenced is the appropriate Government to consider remission), is per incuriam and is not a binding precedent. Hence, the impugned orders of remission dated 10.08.2022 are quashed on the above grounds., Without prejudice to the foregoing conclusions, the Court further holds that the impugned orders of remission dated 10.08.2022 passed by the State of Gujarat in favour of respondents 3 to 13 are not in accordance with law for the following reasons: (i) The Government of the State of Gujarat usurped the powers of the State of Maharashtra, which alone could have considered the applications seeking remission; therefore, the doctrine of usurpation of powers applies. (ii) Consequently, the Policy dated 09.07.1992 of the State of Gujarat was not applicable to the case of respondents 3 to 13. (iii) The opinion of the Presiding Judge of the Special Court, Mumbai, Maharashtra, which convicted respondents 3 to 13, was rendered ineffective by the Government of the State of Gujarat, which had no jurisdiction to entertain the plea for remission. (iv) The opinion of the Sessions Judge at Dahod was wholly without jurisdiction as it breached sub‑section (2) of Section 432 of the Code of Criminal Procedure. (v) While considering the applications seeking remission, the Jail Advisory Committee, Dahod and other authorities ignored the fact that respondents 3 to 13 had not yet paid the fine ordered by the Special Court, Mumbai, which had been confirmed by the High Court of Bombay. Ignoring this relevant consideration also vitiated the exercise of discretion., Point No.5 – What Order? Respondent numbers 4 to 13, who made applications to the State of Gujarat seeking remission of their sentences, were granted remission by the impugned orders dated 10.08.2022, while it is not known whether respondent number 3 made any application to the State of Gujarat, as his application was filed before the State of Maharashtra. Respondents 3 to 13 have been released pursuant to the remission orders and set at liberty. The Court has now quashed those orders. Since the orders were not set aside earlier, they carried the stamp of validity and the respondents remained out of jail. Having quashed the orders, the Court must now consider whether the respondents should be sent back to prison., The Court observes that personal liberty is a fundamental right enshrined in Article 21 of the Constitution and may be deprived only in accordance with law. The respondents were released on remission orders that are now declared illegal and null. The question arises whether they must return to prison despite having obtained liberty from an incompetent authority. Learned counsel for the petitioner contends that justice demands the respondents be returned to prison, while counsel for the respondents argues that, even if the remission orders are quashed, the Court may, under Article 142 of the Constitution, refuse to re‑imprison them and allow them to remain free. The Court must balance the protection of personal liberty against the rule of law, affirming that liberty can be protected only when it is in accordance with law and that the rule of law must prevail over any liberty obtained through illegal orders., The Supreme Court of India reiterates that the rule of law requires the State to perform its duties and the courts to intervene when the State fails, ensuring equality before law under Article 14. No person, however high or low, is above the law, and the judiciary is the guardian of the rule of law. Compassion and sympathy have no place where the rule of law must be enforced. Judicial review is the mechanism by which the rule of law is maintained. In the present case, the Court cannot invoke Article 142 to allow respondents 3 to 13 to remain out of jail, as that would ignore the rule of law. Consequently, the deprivation of liberty of respondents 3 to 13 is justified, and they must report to the concerned jail authorities within two weeks. Accordingly, the Court passes the following orders: (a) Writ Petition (Criminal) No. 491 of 2022 is allowed in the aforesaid terms; (b) Other writ petitions stand disposed of; (c) Pending applications, if any, stand disposed of.
|
id_1687
| 0
|
No. HHC/Admn. 16(34)74-IV. Dated Shimla the 12th January, 2023. In exercise of the powers vested in it under Section 16(2) of the Advocates Act, 1961, the High Court of Himachal Pradesh has been pleased to designate Shri Anup Kumar Rattan, Advocate as a Senior Advocate with immediate effect., No. HHC/Admn. 16(34)74-IV-432 Copy forwarded for information to: Dated 12 January 2023. Secretary General, Honourable Supreme Court of India, New Delhi; Principal Private Secretary to the Honourable Chief Justice, High Court of Himachal Pradesh, Shimla-171001; Advocate General, Himachal Pradesh, Shimla; Secretary, Bar Council of India, New Delhi; Secretary, Bar Council of Himachal Pradesh, Shimla; President, High Court Bar Association, Shimla, Himachal Pradesh; Registrars General, High Courts of India; Shri Anup Kumar Rattan, Advocate, High Court of Himachal Pradesh, Shimla; All the Additional Registrars of this Registry; All the Secretaries to the Honourable Judges of the High Court of Himachal Pradesh; Deputy Registrars, Assistant Registrars, Court Masters, Section Officers, Private Secretaries, Chief Librarian, Public Relations Officer of this Registry; Secretary, Private Secretary, Personal Assistants to the Registrar General, Registrar (Vigilance), Registrar (Rules), Secretary (HPHCLSC), Registrar (Judicial), Registrar (Administration), District and Sessions Judge (Leave/Training Registrar (Estt.)), Central Project Coordinator, High Court of Himachal Pradesh; Section Officer (Computer branch) of this Registry for conversion of the same into digital form on Gazette website; National Informatics Centre Coordinator, High Court of Himachal Pradesh for uploading the notification on the High Court website.
|
id_1688
| 0
|
30 September 2020 To the Honorable Chief Justice of India and Companion Honorable Judges of the Collegium Supreme Court of India, Tilak Marg, New Delhi 110001. Respected Lordships, we are writing to you out of much anguish and distress over the manner and procedure in which the situation has been progressing with respect to the tragedy that struck a 19‑year‑old Dalit girl from Hathras, Uttar Pradesh., The news articles, videos and information circulating in the media are not of a reassuring nature to the country’s citizens and its law officers. We would like to highlight the series of incidents that have been widely reported, focusing on the police response., The unfortunate incident took place on 14 September 2020 in Hathras. According to an NDTV report, the victim gave a statement saying that she was dragged by her dupatta into the fields from a spot where she had been cutting grass with her mother and brother. The victim’s brother alleged that they were helped only after a public outrage. The report also states that initially the police registered an attempted murder case, but added rape charges only after the woman’s formal statement was taken., Aligarh Inspector General of Police Piyush Mordia declared that the victim’s allegations of rape were not confirmed as the medical examination did not reveal anything related to rape, and that the authorities were waiting for the forensic report., The victim’s family believes the attack had been planned because the accused men, who all belong to Hindu upper castes, had beaten up members of their family earlier. The report also stated that the victim’s body was taken to Delhi without the family’s consent., According to a detailed article published by The Newslaundry, the mother of the victim described how she found the body: “My daughter was lying naked with her tongue protruding from her mouth. Her eyes were bulging out and she was bleeding from the mouth, her neck and there was blood near her eyes. I also noticed bleeding from her vagina. I quickly covered her with the pallu of my saree and started screaming.”, The same article stated that immediately her brother and mother drove the victim to the Chandpa police station on their motorcycle. The brother alleged that the police kept saying, “Just take her from here. She is being dramatic and lying here. Do you want to trap…”. A cousin of the victim said that the family took the victim in an ambulance to a local hospital where she was kept for two hours before being referred to Jawaharlal Nehru Medical College and Hospital, Aligarh. A policeman accompanied them halfway to the hospital and then left., The victim was shifted to the intensive care unit after six days. Dr Shahid Ali Siddiqui, principal of Jawaharlal Nehru Medical College and Hospital, said that due to spinal cord damage the victim was suffering from quadriplegia, meaning complete paralysis in all four limbs, and that injuries on her neck were causing breathing problems., Thirteen days after admission, the doctor said that they were yet to confirm if sexual assault had taken place. “The girl is serious but we cannot confirm sexual assault as of yet. A sealed report from our end has been sent to the district administration,” he told Newslaundry., As reported in the Indian Express, the four upper‑caste men charged with gang‑rape and attempt to murder, apart from charges under the Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, were arrested on a statement given by the victim when she briefly regained consciousness on 23 September. The family alleged that the main accused, Sandeep, and his family had always harassed Dalits in their area. Nearly two decades ago Sandeep’s grandfather had been booked under the Scheduled Caste and Scheduled Tribe Act for thrashing the victim’s grandfather over a petty issue., According to The Hindu, leader of the Azad Samaj Party, Chandra Shekhar Azad, met the girl in Jawaharlal Nehru Medical College and alleged that the administration had delayed referring her to Delhi because the facilities in Aligarh were inadequate. Harpal Singh, head of the Agra division of the Azad Samaj Party, said, “From delay in the arrest to dilly‑dallying in shifting her to Delhi, the administration’s role is questionable.”, One Brahm Singh, Circle Officer, Sadabad, who recorded the victim’s statement on 22 September, said her physical examination to determine if she was raped was done after she alleged gang‑rape by four men. When pointed out the circumstances under which the victim was found, he refused to comment and said samples had been sent to the forensic laboratory in Agra and results were awaited., The Hindu article also reported that sources in Jawaharlal Nehru Medical College indicated procedural delays possibly because of pressure from the administration, which could hamper the forensic investigation, said a doctor who was part of the process., On 29 September 2020 the victim succumbed to her injuries at Safdarjung Hospital. From this point onwards the actions of the police officials seem unfathomable and raise many questions that intertwine our rule of law and our nation’s humanity., According to Times Now News, the victim’s body was cremated by the police officials without the consent of her family. The Delhi police and Uttar Pradesh police took the family in their car to Hathras at about 9.30 pm from Safdarjung Hospital. The body was also taken in an ambulance at the same time. The family was dropped at their home, but the ambulance with the body was taken directly to the cremation ground. Residents, villagers and relatives resisted the body being taken directly to the cremation ground and requested the police to allow the body to be taken to her home. The police then forcefully took the body to the cremation ground under the supervision of the District Magistrate and Superintendent of Police. The family alleged that they were beaten up for resisting the cremation and locked themselves in their house. At about 2.45 am the body was cremated without the family’s consent., The brother of the victim stated that they wanted to take the body home and perform the cremation in the morning, but police forced them to take it to the cremation ground. Videos show police forming a human chain to keep the media and the family from entering the cremation ground. The police denied that the cremation was done forcefully and also claimed that there was no proof of rape yet., According to Hindustan Times, Superintendent of Police Vikrant Veer denied any urgency in cremation despite the fact that cremation usually does not take place at night., In a report published by India Today, the same officer, Vikrant Veer, said, “No signs of sexual assault were confirmed by doctors in either Hathras or Aligarh. The matter will be probed by doctors through forensic help. No signs of abrasion were found on the victim’s private parts.” He added that although all four men accused of the crime were arrested, the manner in which the police officials have dealt with the family of the victim, especially after her untimely death, is very worrying and leaves much to be desired., It is well settled that the question whether it is obligatory for the police to register a First Information Report on information given by an informant has been answered in the affirmative by the five‑member bench of the Supreme Court of India in Lalita Kumari v. Government of Uttar Pradesh. The provisions of Section 154(1) of the Code of Criminal Procedure are mandatory and the officer concerned is duty‑bound to register the case on the basis of information disclosing commission of a cognizable offence., Furthermore, the victim should have been taken for medical examination immediately and a Medical Legal Certificate would have clearly stated all the injuries on the victim, which could have directed the sections to be added in the FIR and guided further investigation. The Criminal Law Amendment Act, 2013, lays emphasis on examination as well as treatment, both physical and psychological, in addition to mere evidence collection. As per Ministry of Health and Family Welfare guidelines, it is mandatory for a doctor to inform the jurisdictional police regarding a case of sexual violence, unless the survivor does not give consent, in which case such fact is written on the Medical Legal Certificate by the examining doctor. Explanation 2 to Section 375 of the Indian Penal Code states that if someone does not resist sexual violence, that alone cannot be construed as offering consent to the sexual act. This indicates that presence of resistance injuries is not required to prove a case of sexual violence, which again brings into question the weight given by the police officers for waiting for the forensic report., The need for a midnight cremation and denying the victim’s family their right to religious rites has to be accounted for, especially keeping in mind the circumstances and behaviour of the police force. More could have been done to assist the victim and her family, and its lack cannot be tolerated for any reason. The fundamental and human rights of the victim and her family were to be upheld by all., Keeping the faith of the citizens of the country in the rule of law, and reassuring women that they are secure and will not be denied justice for any reason, is of pivotal importance, and the judiciary must be seen to take steps to communicate to the nation that their faith in the system is for good reason., We, therefore, pray that the Supreme Court of India may take cognizance of the matter and pass such directions as it may deem fit, for: (a) Constitution of a High Court‑monitored investigation and trial to ensure the strictest and swiftest possible punishment to the accused; (b) Immediate inquiry and suspension or punitive action against all erring police, administrative and medical officers who tried to manipulate the facts and evidence; and (c) Setting up of adequate institutional mechanisms and guidelines so that no other victim or their family need to feel lost regarding law and order and suffer the same fate., As lady advocates who repose faith in this country’s justice system, we shall remain obliged if our prayers are answered. We are always at the disposal of the Supreme Court of India to provide any possible assistance in our capacity., With prayers for urgent intervention, most sincerely, Kirti Singh, Advocate; Iram Majid, Advocate; Ritu Bhalla, Advocate; Nandita Rao, Advocate; Aditi Gupta, Advocate; Firdaus Moosa, Advocate; Iti Pandey, Advocate; Anuradha Dutt, Advocate; Shahrukh Alam, Advocate; Swaty Singh Malik, Advocate; Kriti Kakkar, Advocate; Mrinalini Sen, Advocate; Ekta Kapil, Advocate; Malavika Rajkotia, Advocate; Jhum Jhum Sarkar, Advocate; Pooja Saigal, Advocate; Zeba Khair, Advocate; Amita Gupta, Advocate; Sanjoli Mehrotra, Advocate; Sangeeta Bharti, Advocate; Aathira Pillai, Advocate; Kaveeta Wadia, Advocate; R. R. David, Advocate; Satakshi Sood, Advocate; Anshika Sood, Advocate; Warisha Farasat, Advocate; Naomi Chandra, Advocate; Jyoti Babbar, Advocate; Shweta Kapoor, Advocate; Deepika Pokharia, Advocate; Anjali Sharma, Advocate; Kajal Chandra, Advocate; Kiran Kalra, Advocate; Shreya Agrawal, Advocate; Shalini Sati Prasad, Advocate; Prachi V. Sharma, Advocate; Anasuya Chowdhary, Advocate; Tanvi Asthana, Advocate; Neha Dhir, Advocate; Kritika Gupta, Advocate; Surya Rajappan, Advocate; Neha Pandey, Advocate; Megha Katheria, Advocate; Nidhi Mohan Parashar, Advocate; Suruchi Suri, Advocate; Atishree Sood, Advocate; Manali Singhal, Advocate.
|
id_1689
| 0
|
Chief Justice's Court Serial No. 301 In Re: (Suo Moto) v/s State of Uttar Pradesh., Recently, a new variant of the COVID‑19 virus has drastically increased the number of COVID‑19 cases, not only across the State of Uttar Pradesh but also throughout the country, and the situation is deteriorating day by day. Noticing such a situation, Honourable the Supreme Court of India in Miscellaneous Application No. 21 of 2022 filed in Suo Motu Writ Petition (Civil) No. 3 of 2020 (In Re: Cognizance for Extension of Limitation) issued a direction on 10 January 2022, taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and the adversities faced by litigants in the prevailing conditions., The order dated 23 March 2020 is restored and, in continuation of the subsequent orders dated 8 March 2021, 27 April 2021 and 23 September 2021, it is directed that the period from 15 March 2020 till 28 February 2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi‑judicial proceedings. Consequently, the balance period of limitation remaining as on 3 October 2021, if any, shall become available with effect from 1 March 2022. In cases where the limitation would have expired during the period between 15 March 2020 and 28 February 2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of ninety days from 1 March 2022. In the event the actual balance period of limitation remaining, with effect from 1 March 2022, is greater than ninety days, that longer period shall apply. It is further clarified that the period from 15 March 2020 till 28 February 2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws which prescribe periods of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings., The Supreme Court of India on 24 April 2021 issued a direction for extension of the interim order, which was subsequently extended on 31 May 2021 and 2 August 2021, and the matter was directed to be listed on 17 August 2021. On 17 August 2021 the interim order was not extended as no prayer was made for extension of the interim order passed earlier., Considering the increase in pandemic COVID‑19 cases due to the surge of a new variant, the Supreme Court of India deems it appropriate to issue the following directions for the larger public interest: (i) All interim orders passed by the High Court of Judicature at Allahabad as well as at the Lucknow Bench, all District Courts, Civil Courts, Family Courts, Labour Courts, Industrial Tribunals and all other tribunals or quasi‑judicial forums in the State of Uttar Pradesh, over which the Supreme Court of India has power of superintendence, which were subsisting on 31 December 2021 shall stand extended till 28 February 2022, provided where the interim order was up to a specific date and could not be listed or taken up; (ii) The interim orders or directions of the Supreme Court of India or any court subordinate to it in the State of Uttar Pradesh, which are meant to operate till further orders, shall continue to remain in force, subject to any specific order passed in the case listed before the concerned court; (iii) The criminal courts in the State of Uttar Pradesh that granted bail orders or anticipatory bail for a limited period which are likely to expire on or before 28 February 2022 shall stand extended for a period till that date; (iv) Any orders of eviction, dispossession or demolition already passed by the High Court, District Court or Civil Court, if not executed till the date of passing of this order, shall remain in abeyance till 28 February 2022; (v) The State Government, Municipal Authorities, other local bodies and agencies and instrumentalities of the State Government shall be restrained from taking action of demolition and eviction of persons till 28 February 2022; and (vi) Any bank or financial institution shall not take any action for auction in respect of any property of an institute, person, party or any body corporate till 28 February 2022., It is made clear that in case the extension of interim orders as per the present order causes any undue hardship or prejudice of an extreme nature to any party to such proceedings, the affected party shall be at liberty to seek appropriate relief by moving an application before the competent court, tribunal, judicial or quasi‑judicial forum, and the general direction issued by this order shall not be an embargo in considering such application and deciding the same after affording an opportunity of hearing to all the parties. The State and its functionaries will also be at liberty to file appropriate applications in respect of particular cases for necessary directions., The Registry is directed to upload this order on the official website of the Supreme Court of India and the District Courts, Tribunals, Judicial and Quasi‑Judicial Authorities of the State of Uttar Pradesh, over which the Supreme Court of India has power of superintendence, as well as the offices of the learned Additional Solicitor General, learned Advocate General, Chairman of the Uttar Pradesh State Bar Council, all respective Bar Associations and the Special Public Prosecutor., The Registry is also directed to give wide publicity to this order through print and electronic media having wide circulation in the State so that litigants may become aware of the order and do not rush to court for relief covered by these directions.
|
id_169
| 0
|
The appellants before us assail two judgments of the High Court of Judicature at Bombay rejecting, in substance, their prayers for bail. Both the applications were filed on 27th October 2018 after the Special Judge, Pune under the Unlawful Activities (Prevention) Act, 1967 (1967 Act) had dismissed their bail plea. The decisions of the High Court were delivered on the same date i.e. 15th October 2019., We shall deal with both the appeals in this judgment as the detention of the appellants was on the basis of the same First Information Report (FIR) and the chargesheet also contains the same Sections in respect of which offences are alleged to have been committed by them. These are Sections 121, 121A, 124A, 153A, 505(1)(b), 117, 120B read with Section 34 of the Indian Penal Code, 1860 (1860 Code) and Sections 13, 16, 17, 18, 18B, 20, 38, 39 and 40 of the 1967 Act. Wherever there are distinguishing features vis-à-vis the individual appellants in relation to the nature of evidence against them relied on by the Investigating Agency, we shall refer to them separately. In the subject case, initially investigation was conducted by the regular law enforcement agency, being the State police. The Central Government, in exercise of its power under Section 6(5) read with Section 8 of the National Investigation Agency Act, 2008 directed the National Investigation Agency (NIA) to take up investigation of the case by an order passed on 24th January 2020. The case was re‑registered at the NIA Police Station, Mumbai as RC No.01/2020/NIA/MUM. Before us, the appeals have been contested by Mr. Nataraj, learned Additional Solicitor General, appearing for the NIA., The proceedings against the appellants have their origin in an FIR, bearing CR No.4/2018 dated 8th January 2018 registered with Vishrambaug Police Station, Pune, Maharashtra. The informant is one Tushar Ramesh Damgude. The incident which prompted filing of the FIR was in relation to a programme at Shaniwar Wada, Pune held on 31st December 2017. The organisers for this event – Elgar Parishad – were activists of Kabir Kala Manch, a cultural organisation. There were various events in connection with the said programme, which according to the prosecution were provocative in nature and had the effect of creating enmity between caste groups leading to violence and loss of life, as also statewide agitation. There were books kept at the venue, which according to the maker of the FIR were also provocative. There were incidents of violence, arson, and stone‑pelting near Bhima‑Koregaon and six members of Kabir Kala Manch and other associates were named as accused in the FIR. The appellants did not feature in the FIR., The scope of the investigation was subsequently expanded. On 17th April 2018 the Pune Police conducted searches at the residences of eight individuals, namely Rona Wilson of Delhi; Surendra Gadling of Nagpur; Sudhir Dhawale of Mumbai; Harshali Potdar of Mumbai; Sagar Gorkhe (also referred to as Sagar Gorakhe by the prosecution) of Pune; Deepak Dhengale of Pune; Ramesh Gaichor of Pune; and Jyoti Jagtap of Pune. The residences of Shoma Sen and Mahesh Sitaram Raut, who have also been implicated in the same case, were searched on 6th June 2018. The NIA has argued that during the searches electronic devices and documents apart from other materials were recovered and the seized articles were sent to the Forensic Science Laboratory (FSL) for analysis. Cloned copies thereof, according to the prosecution, revealed incriminating materials. The appellants’ names did not also figure in the initial chargesheet dated 15th November 2018, which implicated ten individuals as accused, including Sudhir Dhawale, Surendra Gadling, Shoma Sen, Mahesh Raut and Rona Wilson, who were in detention at that point. The remaining five accused persons were absconding. Mr. Nataraj informed us that one of the absconding accused, Milind Teltumbde, has since passed away., Searches were conducted at the residences or workplaces of the appellants and they were arrested on the same day, i.e. 28th August 2018. They were initially put under house arrest and subsequently sent to judicial custody. The NIA case is that various letters and other materials recovered from the arrested co‑accused persons including Surendra Gadling and Rona Wilson showed the appellants’ involvement with the Communist Party of India (Maoist). This organisation has been placed in the First Schedule to the 1967 Act as a terrorist organisation by a notification dated 22nd June 2009 issued in terms of Section 2(m) of the 1967 Act. The prosecution case is that the appellants played an active role in recruitment and training of cadres of the said organisation and Arun Ferreira (AF), being the appellant in Criminal Appeal No.640 of 2023, also had a role in managing finances of that organisation. The other accused persons who were detained in the third phase were P. Varavara Rao and Sudha Bharadwaj. According to the learned senior counsel for the appellants, Ms. Rebecca John appearing for Vernon Gonsalves (VG), being the appellant in Criminal Appeal No.639 of 2023, and Mr. R. Basant (representing AF), P. Varavara Rao was enlarged on bail by an order of the Supreme Court of India passed on 10th August 2022. Sudha Bharadwaj is on default bail granted by the Bombay High Court on 1st September 2021. A petition for special leave to appeal against that order was rejected by a three‑Judge Bench of the Supreme Court of India on 7th December 2021. Gautam Navlakha, as per information made available before this Court, is under house arrest., Another supplementary chargesheet was submitted on 21st February 2019 by the State police implicating the appellants, along with other co‑accused persons, for commission of the aforesaid offences under the 1967 Act and the 1860 Code. On 9th October 2020, the NIA filed a further supplementary chargesheet against, inter alia, Dr. Anand Teltumbde, Gautam Navlakha, Hany Babu, Sagar Gorkhe, Ramesh Gaichor, Jyoti Jagtap, Stan Swami (deceased) and Milind Teltumbde (deceased) broadly under the same provisions of the 1860 Code and the 1967 Act. Barring the deceased Milind Teltumbde, all these individuals had been arrested. Dr. Anand Teltumbde has been released on bail by the Bombay High Court, the judgment to that effect being delivered on 18th November 2022. The petition for special leave to appeal against that decision was dismissed by a coordinate Bench of the Supreme Court of India on 25th November 2022. VG, as per his pleadings, is a writer, columnist and has been vocal on issues of human rights, prison rights and reform of the criminal justice system. AF has described himself as a practising advocate of the Bombay High Court as also a cartoonist and a human rights activist., After the arrest of the appellants, a writ petition was filed before the Supreme Court of India (Writ Petition (Criminal) No.260/2018 Romila Thapar and Ors. v. Union of India and Ors.). One of the prayers in this petition was for direction of immediate release of all activists arrested in connection with the Bhima‑Koregaon violence. Direction was also sought for staying any arrest until the matter was fully investigated and decided by this Court. That writ petition was dismissed on 28th September 2018 by a 2:1 majority. The majority view was that it was not a case of arrest because of expression of mere dissenting views or difference in political ideology of the named accused, but concerning their links with the members of the banned organisation. At that stage, the Supreme Court of India did not go into an exercise of evaluating the materials brought before it. This finding or observation, however, cannot aid the prosecution in a regular application for bail, the appeals in respect of which we are adjudicating. The Court deciding on the specific plea of the appellants for bail is required to independently apply its mind and examine the materials placed before it for determining the question of granting bail to the individual applicants., As the charges against the appellants include commission of offences under different Sections of the 1967 Act, including those coming within Chapters IV and VI thereof, the restriction on grant of bail as contained in Section 43D(5) of the said Act would apply in their cases. We shall also refer to the ratio of the judgment of a three‑Judge Bench of the Supreme Court of India in Union of India v. K.A. Najeeb [(2021) 3 SCC 713] while examining the appellants’ cases in the backdrop of the aforesaid provision. In that judgment, it was held that such statutory restrictions, per se, do not oust the jurisdiction of the Constitutional Courts to grant bail on grounds of violation of Part III of the Constitution of India and it would be within the jurisdiction of the Constitutional Courts, i.e., this Court and the High Courts, to relax the rigours of such provisions, where there is no likelihood of trial being completed within a reasonable time and the period of incarceration a detenue has already undergone covers a substantial part of the prescribed sentences for the offences with which the latter has been charged. This ratio has been relied upon by the learned counsel for the appellants. Other authorities cited on this point are Thwaha Fasal v. Union of India [(2021) SCC OnLine SC 1000] and Angela Harish Sontakke v. State of Maharashtra [(2021) 3 SCC 723]. On the general proposition of law on the aspect of grant of bail due to delay in trial, the case of Sagar Tatyaram Gorkhe and Another v. State of Maharashtra [(2021) 3 SCC 725] has been relied upon. In the course of hearing, we were apprised by the appellants’ counsel that charges against the appellants are yet to be framed., We have referred to the case of Dr. Anand Teltumbde, who was added as an accused in relation to the same case on 23rd August 2018 and has subsequently been enlarged on bail. His name, according to the prosecution, surfaced from digital devices and other articles seized by the police in the expanded phase of investigation. Dr. Anand Teltumbde surrendered on 14th April 2020 after his plea for pre‑arrest bail was rejected. Subsequently, however, he has been released on bail., Arguments have been advanced before us on whether mere membership of a banned organisation constitutes an offence. On behalf of the appellants reliance was placed on the prevailing view that such membership would not be sufficient to constitute an offence under the 1967 Act or the Terrorist and Disruptive Activities (Prevention) Act (TADA) unless it is accompanied by some overt offending act. A three‑Judge Bench of the Supreme Court of India in Arup Bhuyan v. State of Assam and Another [2023 SCC OnLine SC 338] has held that if a person, even after an organisation is declared as an unlawful association, continues to be a member thereof, it would attract penalty under Section 10 of the 1967 Act., Barring Section 13, all the offences with which the appellants have been charged under the 1967 Act fall within Chapters IV and VI of the said statute. This is apart from the offences under the 1860 Code. Hence, there is a duty of the Court to form an opinion on perusal of the case diary or the report made under Section 173 of the Code of Criminal Procedure, 1973 (1973 Code) that there are reasonable grounds for believing that the accusations against such persons are prima facie true while considering the prayer for bail, to reject prayers for bail of the appellants. The manner in which the Court shall form such opinion has been laid down by the Supreme Court of India in National Investigation Agency v. Zahoor Ahmad Shah Watali [(2019) 5 SCC 1]. It has been held in that judgment: “23. By virtue of the proviso to sub‑section (5), it is the duty of the Court to be satisfied that there are reasonable grounds for believing that the accusation against the accused is prima facie true or otherwise. …” (the rest of the quoted passage is retained as in the original)., We respectfully agree with the above dictum of the Supreme Court of India. We also feel that such expression of prima facie reasons for granting bail is a requirement of law in cases where such orders on bail application are appealable, more so because the appellate court has every right to know the basis for granting the bail. Therefore, we are not in agreement with the argument advanced by the learned counsel for the accused that the High Court was not expected even to indicate a prima facie finding on all points urged before it while granting bail, especially in the background of the facts of this case where a large number of witnesses examined after the respondent was enlarged on bail turned hostile and there are complaints to the Court of threats administered by the respondent or his supporters to witnesses. In such circumstances, the Court was duty‑bound to apply its mind to the allegations put forth by the investigating agency and ought to have given at least a prima facie finding in regard to these allegations because they go to the very root of the right of the accused to seek bail. The non‑consideration of these vital facts as to the allegations of threat or inducement made to the witnesses by the respondent during the period he was on bail has vitiated the conclusions arrived at by the High Court while granting bail to the respondent. The other ground apart from the ground of incarceration which appealed to the High Court to grant bail was the fact that a large number of witnesses are yet to be examined and there is no likelihood of the trial coming to an end in the near future. As stated hereinabove, this ground on the facts of this case is also not sufficient either individually or coupled with the period of incarceration to release the respondent on bail because of the serious allegations of tampering with the witnesses made against the respondent., In Jayendra Saraswathi Swamigal v. State of Tamil Nadu (2005) 2 SCC 13 the Supreme Court of India observed that the considerations which normally weigh with the Court in granting bail in non‑bailable offences have been explained in State v. Jagjit Singh [(1962) 3 SCR 622] and Gurcharan Singh v. State (UT of Delhi) [(1978) 1 SCC 118] and basically they are the nature and seriousness of the offence; the character of the evidence; circumstances peculiar to the accused; a reasonable possibility of the presence of the accused not being secured at the trial; reasonable apprehension of witnesses being tampered with; the larger interest of the public or the State and other similar factors which may be relevant in the facts and circumstances of the case., We shall first deal with the argument of the appellants that the accusations against the appellants under the Sections which fall within Chapters IV and VI of the 1967 Act cannot lead to a prima facie satisfaction of the Court that such accusations are true and the available evidence at this stage does not fit the ingredients of these restrictive provisions. The nature of the accusations to invoke the bail‑restricting clause has been stated in the supplementary chargesheet in which the appellants were implicated. The counter‑affidavits also contain printouts and copies of several letters and documents. In the case of VG, the Agency has relied upon the statement of a protected witness who disclosed that he had met VG in the year 2002. Referring to a time‑length between 2002 and 2007, he stated that during that period both VG and AF were members of the Maharashtra State Committee of the said party. It is also stated by the protected witness that, in 2002 VG wanted to resign from the party but his resignation was not accepted., Before embarking on this exercise, we reproduce below the following provisions of the 1967 Act, the application of which we shall have to examine in respect of the appellants: 2. Definitions – (1) In this Act, unless the context otherwise requires, (k) terrorist act has the meaning assigned to it in section 15, and the expressions terrorism and terrorist shall be construed accordingly; (m) terrorist organisation means an organisation listed in the First Schedule or an organisation operating under the same name as an organisation so listed. 13. Punishment for unlawful activities. (1) Whoever (a) takes part in or commits, or (b) advocates, abets, advises or incites the commission of any unlawful activity, shall be punishable with imprisonment for a term which may extend to seven years, and shall also be liable to fine. (2) Whoever, in any way, assists any unlawful activity of any association declared unlawful under section 3, after the notification by which it has been so declared has become effective under sub‑section (3) of that section, shall be punishable with imprisonment for a term which may extend to five years, or with fine, or with both. (3) Nothing in this section shall apply to any treaty, agreement or convention entered into between the Government of India and the Government of any other country or to any negotiations therefor carried on by any person authorised in this behalf by the Government of India. 15. Terrorist act. (1) Whoever does any act with intent to threaten or likely to threaten the unity, integrity, security, economic security or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country, (a) by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisonous or noxious gases or other chemicals or by any other substances (whether biological, radioactive, nuclear or otherwise) of a hazardous nature or by any other means of whatever nature to cause or likely to cause (i) death of, or injuries to, any person or persons; or (ii) loss of, or damage to, or destruction of, property; or (iii) disruption of any supplies or services essential to the life of the community in India or in any foreign country; or (iiia) damage to the monetary stability of India by way of production or smuggling or circulation of high quality counterfeit Indian paper currency, coin or any other material; or (iv) damage or destruction of any property in India or in a foreign country used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies; or (b) overawes by means of criminal force or the show of criminal force or attempts to do so or causes death of any public functionary or attempts to cause death of any public functionary; or (c) detains, kidnaps or abducts any person and threatens to kill or injure such person or does any other act in order to compel the Government of India, any State Government or the Government of a foreign country or an international or intergovernmental organisation or any other person to do or abstain from doing any act; or commits a terrorist act. [Explanation ...] (2) The terrorist act includes an act which constitutes an offence within the scope of, and as defined in any of the treaties specified in the Second Schedule. 16. Punishment for terrorist act. (1) Whoever commits a terrorist act shall, (a) if such act has resulted in the death of any person, be punishable with death or imprisonment for life, and shall also be liable to fine; (b) in any other case, be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine. 17. Punishment for raising funds for terrorist act. ...
|
id_169
| 1
|
Whoever organises or causes to be organised any camp or camps for imparting training in terrorism shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine., Punishment for recruiting any person for a terrorist act. Whoever recruits or causes to be recruited any person for the commission of a terrorist act shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine., Punishment for being a member of a terrorist gang or organisation. Any person who is a member of a terrorist gang or a terrorist organisation involved in a terrorist act shall be punishable with imprisonment for a term which may extend to imprisonment for life, and shall also be liable to fine., Offence relating to membership of a terrorist organisation. (1) A person who associates himself, or professes to be associated, with a terrorist organisation with intention to further its activities commits an offence relating to membership of a terrorist organisation, provided that this sub‑section shall not apply where the person charged can prove (a) that the organisation was not declared as a terrorist organisation at the time when he became a member or began to profess to be a member; and (b) that he has not taken part in the activities of the organisation at any time during its inclusion in the First Schedule as a terrorist organisation. (2) A person who commits the offence relating to membership of a terrorist organisation under sub‑section (1) shall be punishable with imprisonment for a term not exceeding ten years, or with fine, or with both., Offence relating to support given to a terrorist organisation. (1) A person commits the offence relating to support given to a terrorist organisation if, with intention to further the activity of a terrorist organisation, (a) he invites support for the terrorist organisation, and the support is not restricted to providing money or other property within the meaning of section 40; or (b) he arranges, manages or assists in arranging or managing a meeting which he knows is to support the terrorist organisation, to further the activity of the terrorist organisation, or to be addressed by a person who associates or professes to be associated with the terrorist organisation; or (c) he addresses a meeting for the purpose of encouraging support for the terrorist organisation or to further its activity. (2) A person who commits the offence relating to support given to a terrorist organisation under sub‑section (1) shall be punishable with imprisonment for a term not exceeding ten years, or with fine, or with both., Offence of raising funds for a terrorist organisation. (1) A person commits the offence of raising funds for a terrorist organisation if, with intention to further the activity of a terrorist organisation, (a) he invites another person to provide money or other property, and intends that it should be used, or has reasonable cause to suspect that it might be used, for the purposes of terrorism; or (b) he receives money or other property, and intends that it should be used, or has reasonable cause to suspect that it might be used, for the purposes of terrorism; or (c) he provides money or other property, and knows, or has reasonable cause to suspect, that it would or might be used for the purposes of terrorism. Explanation: For the purposes of this subsection, a reference to provide money or other property includes (a) its being given, lent or otherwise made available, whether or not for consideration; or (b) raising, collecting or providing funds through production or smuggling or circulation of high‑quality counterfeit Indian currency. (2) A person who commits the offence of raising funds for a terrorist organisation under sub‑section (1) shall be punishable with imprisonment for a term not exceeding fourteen years, or with fine, or with both., Modified application of certain provisions of the Code of Criminal Procedure, 1973. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any other law, every offence punishable under the Unlawful Activities (Prevention) Act, 1967 shall be deemed to be a cognizable offence within the meaning of clause (c) of section 2 of the Code of Criminal Procedure, 1973, and “cognizable case” as defined in that clause shall be construed accordingly. (2) Section 167 of the Code of Criminal Procedure, 1973 shall apply in relation to a case involving an offence punishable under the Unlawful Activities (Prevention) Act, 1967 subject to the modification that the references to “fifteen days”, “ninety days” and “sixty days” shall be construed as references to “thirty days”, “ninety days” and “ninety days” respectively; and after the proviso, the following provisos shall be inserted: “Provided further that if it is not possible to complete the investigation within the said period of ninety days, the Court may, if it is satisfied with the report of the Public Prosecutor indicating the progress of the investigation and the specific reasons for the detention of the accused beyond the said period of ninety days, extend the period up to one hundred and eighty days.” Also, if the police officer making the investigation under this Act requests police custody for a person already in judicial custody, he shall file an affidavit stating the reasons and explain any delay. (3) Section 268 of the Code of Criminal Procedure, 1973 shall apply with the modification that references to “the State Government” shall be construed as references to “the Central Government or the State Government,” and references to “order of the State Government” shall be construed as references to “order of the Central Government or the State Government, as the case may be.” (4) Nothing in section 438 of the Code of Criminal Procedure, 1973 shall apply in relation to any case involving the arrest of a person accused of an offence punishable under the Unlawful Activities (Prevention) Act, 1967. (5) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no person accused of an offence punishable under Chapters IV and VI of the Unlawful Activities (Prevention) Act, 1967 shall, if in custody, be released on bail or on his own bond unless the Public Prosecutor has been given an opportunity to be heard on the application for such release, and the Court, on perusal of the case diary or the report made under section 173 of the Code of Criminal Procedure, 1973, is of the opinion that there are reasonable grounds for believing that the accusation against such person is prima facie true. (6) The restrictions on granting bail specified in subsection (5) are in addition to the restrictions under the Code of Criminal Procedure, 1973 or any other law then in force. (7) Notwithstanding anything contained in subsections (5) and (6), no bail shall be granted to a person accused of an offence punishable under the Unlawful Activities (Prevention) Act, 1967 if he is not an Indian citizen and has entered the country unauthorisedly or illegally, except in very exceptional circumstances and for reasons to be recorded in writing., Allegations against the two appellants appear, inter alia, from paragraphs 17.5, 17.9, 17.10, 17.11, 17.15, 17.18 and 17.19 of the first supplementary chargesheet dated 21 February 2019. Paragraph 17.5 states that the activity of the accused was not limited to creating antagonism between two sections but also involved other destructive acts against the country. It alleges that accused Sudhir Dhawale, Rona Wilson, Surendra Gadling, Mahesh Raut and Shoma Sen committed unlawful and terrorist acts in accordance with a pre‑planned plot by the banned organisation Communist Party of India (Maoist), a country‑wide conspiracy to overthrow by force the constitutional democracy and administrative system. The paragraph further states that the present crime is part of this conspiracy., Paragraph 17.9 reports that the residences of accused Varavara Rao, Vernon Gonsalves, Arun Ferreira, Sudha Bharadwaj and other accused were searched after it became clear that they were part of the conspiracy of the banned organisation Communist Party of India (Maoist). It further alleges that Vernon Gonsalves, Arun Ferreira and Sudha Bharadwaj, along with other accused, recruited members for the banned terrorist organisation, were active members, and fulfilled the organisation’s objectives by propaganda and dissemination through a frontal organisation., Paragraph 17.10 records that Vernon Gonsalves was convicted and sentenced by the Honourable Court of Session, Nagpur in Criminal Revision No. 10/2007 for offences under sections 10, 13, 16, 17, 18, 20, 23, 40(2) of the Unlawful Activities (Prevention) Act, 1967; sections 25(1‑B) of the Arms Act, 1959; sections 6, 9(b) of the Explosives Act, 1884; sections 4(b), 5 of the Explosive Substances Act, 1908; and sections 120‑B, 121‑A of the Indian Penal Code. He has served the sentence. The paragraph further alleges that Vernon Gonsalves continues to be involved in unlawful activities as a member of a banned organisation., Paragraph 17.11 states that the Indian Association of People's Lawyers (IAPL) is a frontal organisation of the banned Communist Party of India (Maoist) and works according to the organisation’s direction and economic backing to fulfil its objectives. It alleges that Arun Ferreira, Sudha Bharadwaj and Surendra Gadling are members of this frontal organisation and, together with other accused, made conscious attempts to spread it. By carrying out various unlawful activities through this frontal organisation, they are said to have endangered the stability of the country., Paragraph 17.15 concludes that accused Nos. 01 to 04 and other accused are members of the banned terrorist organisation Communist Party of India (Maoist). It alleges that all work related to this organisation is carried out in an underground manner. Evidence is said to show that frontal organisations such as IAPL, Anuradha Ghandy Memorial Committee, Kabir Kala Manch and Persecuted Prisoners Solidarity Committee are either set up or infiltrated systematically, and under their cover the work of the terrorist organisation is accomplished in an extremely secret manner., Paragraph 17.18 states that during the investigation it emerged that accused Nos. 01 to 04 and other accused worked as part of a pre‑planned conspiracy devised by the banned organisation Communist Party of India (Maoist), a large country‑wide plot to overthrow by force the democratic administrative system established under the Constitution of India. It further alleges that the organisation and its members hatched the conspiracy., Paragraph 17.19 alleges that Varavara Rao, Rona Wilson and Surendra Gadling, together with the Polit Bureau, Central Committee and other underground members of the banned Communist Party of India (Maoist), hatched a criminal conspiracy and obtained the participation of Vernon Gonsalves, Arun Ferreira and Sudha Bharadwaj as active members of the banned organisation. It further alleges that hard disks, pendrives, memory cards and mobiles seized during the house search of Varavara Rao, Surendra Gadling and Rona Wilson contained correspondence, papers, photographs and other material related to the banned organisation, and that the accused attempted in various ways to implement the goals, policies and objectives of the organisation, including acts against the country to overthrow the democratic and lawful administrative system through frontal organisations in urban areas., The first protected witness, who appears to have been associated with the Maoist movement, claimed to have met Varavara Rao in 2002 and described a timeline from 2002 to 2007. He stated that at that time Varavara Rao and Arun Ferreira were members of the Maharashtra State Committee of the Communist Party of India (Maoist). This statement was recorded on 27 January 2019 by an Assistant Commissioner of Pune Police. The same witness made another statement on 27 July 2020 before the police, referring to Arun Ferreira’s participation in a seminar of the Revolutionary Democratic Front in Hyderabad in 2012 and Varavara Rao’s participation in September 2017 in an organisation referred to as Virasam. These statements were also recorded under section 164 of the Code of Criminal Procedure, 1973 on 28 July 2020., Another witness, Kumarsai, who appears to have been associated with the same organisation, gave statements on 2 November 2018 and 23 December 2018. He said he had never personally seen Varavara Rao but that Varavara Rao was working to unite intellectuals. Regarding Arun Ferreira, he alleged that Ferreira was intruding into student organisations and creating cadres that were being sent to forests, and that he had met Ferreira in the 2003‑2007 period., A third witness, Sudarshan Satyadeo Ramteke, referred to another individual named Arun Bhelke, whom he had met while working for an organisation in Chandrapur. He declared himself as a party associate and claimed to have been introduced to Arun Ferreira by another person. He alleged that Arun Ferreira, Milind Teltumbde and Anil Nagpure had asked him to work with the organisation., Varavara Rao has previously been implicated in nineteen cases for alleged crimes under the Unlawful Activities (Prevention) Act, 1967, the Arms Act, 1959 and the Explosives Act, 1884. It has been submitted that he has been acquitted in seventeen of those cases, with one discharge application pending. He was convicted in Case No. 257/11 by the Sessions Judge, Nagpur under section 25(1‑B) of the Arms Act, 1959, sections 10(a)(i) and 13(1)(b) of the Unlawful Activities (Prevention) Act, 1967, sections 9(b) of the Explosives Act, 1884, sections 4(b) and 5 of the Explosive Substances Act, 1908, and sections 120‑B and 121‑A of the Indian Penal Code. His counsel emphasized that the conviction is under appeal before the High Court and that the offences do not fall within Chapters IV and VI of the Unlawful Activities (Prevention) Act, 1967. Another case, Sessions Case No. 261/10, is pending before the Sessions Court at Surat., The prosecution has referred to letters allegedly recovered from the computers or other devices of co‑accused persons in which activities of the two appellants are mentioned. Under ordinary circumstances in a bail petition, such detailed analysis of evidence would not be necessary, but because of the restrictive provisions of Section 43D of the Unlawful Activities (Prevention) Act, 1967, evidence analysis becomes inevitable., The High Court, while dealing with both appeals, opined that the investigating agency possessed materials which prima facie showed that the applicants were part of a larger conspiracy attracting offences under sections 121‑A, 117 and 120‑B of the Indian Penal Code, 1860 and section 18 of the Unlawful Activities (Prevention) Act, 1967. The High Court invoked the allegations of recruiting cadres for the banned organisation to import the provisions of section 18B of the Unlawful Activities (Prevention) Act, 1967, and also invoked section 20 on the ground that the appellants had been active members of the banned organisation. It further held that sections 38 and 39 of the Unlawful Activities (Prevention) Act, 1967 were attracted against the appellants. The Court found sufficient material in the chargesheet to believe that the accusation of commission of offences punishable under Chapters IV and VI of the Unlawful Activities (Prevention) Act, 1967 was prima facie true for both appellants. The judgment was delivered on 15 October 2019, when the appellants had been in detention for a little over one year., The National Investigation Agency has also referred to a set of letters alleged to have been recovered from electronic devices of co‑accused persons. Additional documents relied upon by the NIA include literature, pamphlets and other material purportedly recovered from the residences of the appellants. Copies of these letters have been annexed to the NIA’s counter‑affidavits in both appeals., The first document is an undated letter addressed to Surendra from an unnamed sender, marked as Annexure R‑6. The letter, claimed to have been recovered from the computer of a co‑accused, refers to a Radical Student Union initiative by Arun Ferreira and Varavara Rao and requests the addressee to ask Arun to manage finances for the legal defence of a person named Murgan. It also references two other individuals who were apparently inspired by the struggles of Arun Ferreira., The second document is a letter dated 18 April 2017, marked as Annexure R‑10, addressed to Comrade Prakash and claimed to have been written by Rona Wilson. The letter mentions that the two appellants and others were equally concerned about a two‑line struggle taking shape on the urban front. The source of the letter has not been disclosed in the counter‑affidavit. The agency seeks to establish that the appellants were senior leaders of the banned organisation., The third document is a letter dated 25 September 2017, marked as Annexure R‑12, written by Comrade Prakash and claimed to have been recovered from the computer of Surendra Gadling. It appreciates the activities of Vernon Gonsalves and Arun Ferreira in motivating research scholars to join the revolutionary movement and records that Comrade G was asked to arrange a meeting to meet Vernon., Regarding Arun Ferreira, his name appears in an undated letter, marked as Annexure R‑4, addressed to Surendra by Darsu, which refers to the organisation of a joint meeting by the addressee and Arun in Hyderabad. Another letter, marked as Annexure R‑5, dated 5 November 2017, is addressed to Prakash by Surendra and refers to establishing the Indian Association of People's Lawyers in Kerala, with discussions held with Arun. The agency describes IAPL as a lawyer’s body that is a frontal organisation of the banned organisation. A further communication, Annexure R‑7 dated 16 July 2017, records a proposed visit of Arun to Chennai in connection with the release of a detained party member and raising funds for legal defence, also appreciating the work of Arun and Varavara Rao. Annexure R‑22, purportedly written by Sudha Bharadwaj to Prakash, relates to a seminar titled “Udta Loktantra” against the Unlawful Activities (Prevention) Act, in which Arun was to participate. Annexure R‑14, written by Anantwa to Comrade Monibai, records the celebration of the 50th anniversary of the Great Proletarian Revolution and Naxalite organisation in Mumbai and notes that the party sent revolutionary greetings to various associations, including the appellant Arun., An account statement alleged by the prosecution to have been recovered from the laptop of Rona Wilson (Annexure R‑3) reads as follows: Surendra = R = 2.5L from Milind Shoma & Sudhir = R and D = 1L from Surendra Amit B = R = 1.5 for CPDR canvassing; T = R = 90T from Surendra (through Milind); Myself = R = 1.8L from Com Manoj; Arun = R = 2L from Com Darsu., Apart from these letters and statements, the prosecution has referred to various literature, books and other material recovered from the residences of Arun Ferreira and Varavara Rao, mainly involving writings on extreme left‑wing ideology and its application to India. Similar material is alleged to have been recovered from other accused persons. Recovery of electronic devices such as mobile phones, tablets, pen drives and ancillary items has been alleged, but no evidence from these devices has been cited that would implicate Arun Ferreira or Varavara Rao in terrorist acts or other offences, apart from the letters emphasized by the agency. Call Detail Records have also been referred to for establishing the location of the accused and their interassociation., In pursuance of the judgment of this Court in Zahoor Ahmad Shah Watali (supra), the documents relied upon by the prosecution at this stage must prevail until overcome or disproved by other evidence. In the case of Dr. Anand Teltumbde v. National Investigation Agency and Another (2022 SCC OnLine Bom 5174), similar allegations were made against the petitioner. He was charged with all the sections of the Unlawful Activities (Prevention) Act, 1967 except section 40. The Bombay High Court, by a judgment delivered on 18 November 2022, granted him bail. The NIA’s petition for Special Leave Petition (Criminal) No. 11345/2022 against that judgment was dismissed by a coordinate bench of this Court on 25 November 2022., The acts alleged to have been committed by the appellants can be categorised under three heads. First, their association with a terrorist organisation, as claimed from the letters and witness statements. However, none of these documents were seized from the appellants themselves; they were alleged to have been recovered from co‑accused. Second, the alleged possession of literature propagating violence and the overthrow of a democratically elected government through armed struggle. The prosecution has not specifically proscribed these materials as offences merely by possession. Third, alleged handling of finances, which, according to the material, appears to be mainly for litigation on behalf of detained party members. The High Court, while analysing each document individually, did not opine that there were reasonable grounds to believe that the accusations against the persons were not prima facie true. The offences that come within Chapters IV and VI of the Unlawful Activities (Prevention) Act, 1967, charged against the appellants, are sections 16, 17, 18, 18B, 20, 38, 39 and 40., Section 16 prescribes punishment for committing a terrorist act, and terrorist act is defined in section 15 of the Unlawful Activities (Prevention) Act, 1967. The provisions have been reproduced earlier in this judgment., In none of the material referred to by the prosecution can the acts specified in sub‑clause (a) of section 15(1) of the Unlawful Activities (Prevention) Act, 1967 be attributed to the appellants, nor is there any allegation that would attract sub‑clause (c) of section 15(1). Regarding the acts specified in sub‑clause (b) of section 15(1), some of the literature recovered from the appellants hints at propagation of such activities, but there is no prima facie evidence that the appellants indulged in overawing any public functionary by means of criminal force, or attempted to do so, or caused death of any public functionary. Mere possession of certain literature does not ipso facto attract the provisions of section 15(1)(b). Therefore, prima facie, no case can be held to be true under section 15(1)(b)., Section 17 of the Unlawful Activities (Prevention) Act, 1967 deals with punishment for raising funds for terrorist acts. The funds attributed to Arun Ferreira cannot be connected to any terrorist act. In the case of Dr. Anand Teltumbde (supra), a similar account statement was examined. The Bombay High Court observed that the argument that the appellant received Rs 90,000 from Surendra for future programmes was fallacious, as the statement pertained to the year 2016‑2017 and the document was unsigned and recovered from a co‑accused’s laptop. Consequently, at the prima facie stage, the court could not presume that the appellant received the amount, and the NIA’s contention could not be accepted., A request was also made to Surendra from an unnamed person to ask Arun Ferreira to manage the financial expenses of these cases. The name of another Arun, with the surname Bhelke, appears in Annexure R‑19 to the NIA’s counter‑affidavit in Arun Ferreira’s case. This is a copy of a witness statement.
|
id_169
| 2
|
In absence of any form of corroboration at the prima facie stage it cannot be presumed that it was the same Arun Ferreira who had received money from Darsu. The prosecution has also not produced any material to show that actual money was transmitted. The communication dated 5th November 2017 (R-5), purportedly addressed by Surendra to Prakash does not speak of any payment being made to Arun Ferreira. The rationale applied by the Bombay High Court in the above‑quoted passage of the judgment in the case of Dr. Anand Teltumbde (supra), which has been sustained by the Supreme Court of India, ought to apply in the case of Arun Ferreira as well., We have already observed that it is not possible for us to form an opinion that there are reasonable grounds for believing that the accusation against the appellant of committing or conspiring to commit a terrorist act is prima facie true. The witness statements do not refer to any terrorist act alleged to have been committed by the appellants. The copies of the letters in which the appellants or any one of them have been referred record only third‑party response or reaction of the appellants’ activities contained in communications among different individuals. These have not been recovered from the appellants. Hence, these communications or their content have weak probative value or quality. That being the position, neither the provisions of Section 18 nor Section 18B can be invoked against the appellants, prima facie, at this stage. The association of the appellants with the activities of the designated terrorist organisation is sought to be established through third‑party communications. Moreover, actual involvement of the appellants in any terrorist act has not surfaced from any of these communications. Nor is there any credible case of conspiracy to commit offences enumerated under Chapters IV and VI of the Terrorist and Disruptive Activities (Prevention) Act, 1967. Mere participation in seminars by itself cannot constitute an offence under the bail‑restricting sections of the 1967 Act, with which they have been charged., So far as application of Section 20 of the Terrorist and Disruptive Activities (Prevention) Act, 1967 is concerned, the Bombay High Court in the case of Dr. Anand Teltumbde (supra) construed the said provision in the following manner: Section 20 cannot be interpreted to mean that merely being a member of a terrorist gang would entail such a member for the above punishment. What is important is the terrorist act and what is required for the Supreme Court of India to see is the material before the Supreme Court of India to show that such a person has been involved in or has indulged in a terrorist act. Terrorist act is very widely defined under Section 15. In the present case, seizure of the incriminating material as alluded to hereinabove does not in any manner prima facie lead to draw an inference that the appellant has committed or indulged in a terrorist act as contemplated under Section 15., This judgment has not been interfered with by the Supreme Court of India and we also affirm this interpretation given to Section 20 of the Terrorist and Disruptive Activities (Prevention) Act, 1967 for testing as to who would be a member of a terrorist gang or terrorist organisation. Moreover, no material has been demonstrated by the National Investigation Agency before us that the appellants are members of the terrorist organisation. Arun Ferreira’s involvement with IAPL as a frontal organisation of the Communist Party of India (Maoist) is sought to be established, and that has been referred to in the chargesheet as well. But the link between IAPL and the Communist Party of India (Maoist) has not been clearly demonstrated through any material. Reference to Arun Ferreira and Vernon Gonsalves as members of the Communist Party of India (Maoist) appears from the statement of a protected witness, but that link is made in relation to events between the years 2002‑2007, before the organisation was included in the First Schedule to the Terrorist and Disruptive Activities (Prevention) Act, 1967. No evidence of continued membership after the party was classified as a terrorist organisation has been brought to our notice. Nor is there any reliable evidence to link IAPL with the Communist Party of India (Maoist) as its frontal organisation. We have already dealt with the position of the appellants vis‑vis terrorist acts in earlier paragraphs of this judgment and we prima facie do not think that Section 20 can be made applicable against the appellants at this stage of the proceeding, on the basis of available materials., Terrorist act as defined under Section 2(k) of the Terrorist and Disruptive Activities (Prevention) Act, 1967 carries the meaning assigned to it in Section 15. This Section also stipulates that the expressions terrorism and terrorist shall be construed accordingly. This implies construction of these two expressions in the same way as has been done in Section 15. Terrorist organisation has been independently defined in Section 2(m) to mean an organisation listed in the First Schedule or an organisation operating under the same name as an organisation so listed. But so far as the word terrorist is concerned, in this Section also, the interpretation thereof would be relatable to the same expression as used in Section 15. It is one of the basic rules of statutory construction that an expression used in different parts of a statute shall ordinarily convey the same meaning unless contrary intention appears from different parts of the same enactment itself. We do not find any such contrary intention in the Terrorist and Disruptive Activities (Prevention) Act, 1967., Section 38 of the Terrorist and Disruptive Activities (Prevention) Act, 1967 carries the heading or title offence relating to membership of a terrorist organisation. As we have already observed, a terrorist act would have to be construed having regard to the meaning assigned to it in Section 15 thereof. We have given our interpretation to this provision earlier. Terrorist organisation, as employed in Section 2(m), in our opinion is not a mere nomenclature and this expression would mean an organisation that carries on or indulges in terrorist acts, as defined in said Section 15. The term terrorism, in view of the provisions of Section 2(k) of the said Act, ought to be interpreted in tandem with what is meant by terrorist act in Section 15 thereof., In this context, to bring the appellants within the fold of Section 38 of the Terrorist and Disruptive Activities (Prevention) Act, 1967, the prosecution ought to have prima facie established their association with intention to further the said organisation’s terrorist activities. It is only when such intention to further the terrorist activities is established prima facie that appellants could be brought within the fold of the offence relating to membership of a terrorist organisation. To bring within the scope of Section 38 of the 1967 Act, it would not be sufficient to demonstrate that one is an associate or someone who professes to be associated with a terrorist organisation. There must be intention to further the activities of such organisation on the part of the person implicated under such provision. The same line of reasoning in respect of membership of a terrorist organisation under Section 20 ought to apply in respect of an alleged offender implicated in Section 38 of the Terrorist and Disruptive Activities (Prevention) Act, 1967. There must be evidence of an intention to be involved in a terrorist act. So far as the appellants are concerned, at this stage there is no such evidence before us on which we can rely., In three decisions of the Supreme Court of India, Hitendra Vishnu Thakur and Others v. State of Maharashtra and Others [(1994) 4 SCC 602], Niranjan Singh Karam Singh Punjabi, Advocate v. Jitendra Bhimraj Bijjaya and Others [(1990) 4 SCC 76] and Usmanbhai Dawoodbhai Memon and Others v. State of Gujarat [(1988) 2 SCC 271], the manner in which stringent provisions of a statute ought to be interpreted has been laid down. In all the three authorities, observation of the Supreme Court of India has been that the Court ought to carefully examine every case before making an assessment if the Act would apply or not. When the statutes have stringent provisions the duty of the Court would be more onerous. Graver the offence, greater should be the care taken to see that the offence would fall within the four corners of the Act. Though these judgments were delivered while testing similar rigorous provisions under the Terrorist and Disruptive Activities (Prevention) Act, 1987, the same principle would apply in respect of the Terrorist and Disruptive Activities (Prevention) Act, 1967 as well., In the case of Zahoor Ahmad Shah Watali (supra), it has been held that the expression prima facie true would mean that the materials/evidence collated by the investigating agency in reference to the accusation against the accused concerned in the chargesheet must prevail, unless overcome or disproved by other evidence, and on the face of it, materials must show complicity of such accused in the commission of the stated offences. What this ratio contemplates is that on the face of it, the accusation against the accused ought to prevail. In our opinion, however, it would not satisfy the prima facie test unless there is at least surface‑analysis of probative value of the evidence at the stage of examining the question of granting bail and the quality or probative value satisfies the Court of its worth. In the case of the appellants, contents of the letters through which the appellants are sought to be implicated are in the nature of hearsay evidence, recovered from co‑accused. Moreover, no covert or overt terrorist act has been attributed to the appellants in these letters, or any other material forming part of the records of these two appeals. Reference to the activities of the accused are in the nature of ideological propagation and allegations of recruitment. No evidence of any of the persons who are alleged to have been recruited or have joined this struggle inspired by the appellants has been brought before us. Thus, we are unable to accept the National Investigation Agency’s contention that the appellants have committed the offence relating to support given to a terrorist organisation., The second set of materials include the witness statements. There also is no covert or overt act of terrorism attributed to the appellants by the three witnesses. We have dealt with the summary of their statements earlier in this judgment. We have also observed earlier that mere possession of the literature, even if the content thereof inspires or propagates violence, by itself cannot constitute any of the offences within Chapters IV and VI of the Terrorist and Disruptive Activities (Prevention) Act, 1967., We have already analysed Sections 38 and 39 of the Terrorist and Disruptive Activities (Prevention) Act, 1967. The interpretation given by us to the phrase intention to further activities of a terrorist organisation could also apply in the same way in relation to Section 39 of the same statute. There has been no credible evidence against the appellants of commission of any terrorist act or entry into conspiracy to do so to invoke the provisions of Section 43D(5) of the Terrorist and Disruptive Activities (Prevention) Act, 1967., As far as raising funds for a terrorist organisation is concerned, we do not think at this stage, in absence of better evidence, the account statement is credible enough to justify invoking the bail‑restricting clause by attracting Section 40 of the Terrorist and Disruptive Activities (Prevention) Act, 1967., We are returning these findings as the restrictions on the Supreme Court of India while examining the question of bail under the Terrorist and Disruptive Activities (Prevention) Act, 1967 are less stringent in comparison to the provisions of Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985. We are not called upon, for granting bail to an accused with commercial quantity of contraband article under the 1985 Act, to satisfy ourselves that there are reasonable grounds for believing that an accused is not guilty of such offence and that he is not likely to commit any offence while on bail. Here, we have to satisfy ourselves that the specified offences alleged to have been committed by the appellants cannot be held to be prima facie true., We shall now turn to the other offence under the Terrorist and Disruptive Activities (Prevention) Act, 1967, which is under Section 13 thereof, and the Indian Penal Code, 1860. The yardstick for justifying the appellants’ plea for bail is lighter in this context. The appellants are almost five years in detention. In the cases of K.A. Najeeb (supra) and Angela Harish Sontakke (supra), delay of trial was considered to be a relevant factor while examining the plea for bail of the accused. In the case of K.A. Najeeb (supra), in particular, this same provision, that is Section 43D(5), was involved., In these two proceedings, the appellants have not crossed, as under‑trials, a substantial term of the sentence that may have been ultimately imposed against them if the prosecution could establish the charges against them. But the fundamental proposition of law laid down in K.A. Najeeb (supra), that a bail‑restricting clause cannot denude the jurisdiction of a Constitutional Court in testing if continued detention in a given case would breach the concept of liberty enshrined in Article 21 of the Constitution of India, would apply in a case where such a bail‑restricting clause is being invoked on the basis of materials with prima facie low‑probative value or quality., In the case of Zahoor Ahmad Shah Watali (supra) reference was made to the judgment of Jayendra Saraswathi Swamigal v. State of Tamil Nadu [(2005) 2 SCC 13] in which, citing two earlier decisions of the Supreme Court of India in the cases of State v. Jagjit Singh (AIR 1962 SC 253) and Gurcharan Singh v. State of (UT of Delhi) [(1978) 1 SCC 118], the factors for granting bail under normal circumstances were discussed. It was held that the nature and seriousness of the offences, the character of the evidence, circumstances peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at trial, reasonable apprehension of witnesses being tempered with, and the larger interest of the public or the State would be relevant factors for granting or rejecting bail. Juxtaposing the appellants’ case founded on Articles 14 and 21 of the Constitution of India with the aforesaid allegations and considering the fact that almost five years have lapsed since they were taken into custody, we are satisfied that the appellants have made out a case for granting bail. Allegations against them are serious, but for that reason alone bail cannot be denied to them. While dealing with the offences under Chapters IV and VI of the Terrorist and Disruptive Activities (Prevention) Act, 1967, we have referred to the materials available against them at this stage. These materials cannot justify continued detention of the appellants, pending final outcome of the case under the other provisions of the Indian Penal Code, 1860 and the Terrorist and Disruptive Activities (Prevention) Act, 1967., While forming our opinion over granting bail to the appellants, we have taken into account the fact that Vernon Gonsalves was once earlier convicted involving offences, inter‑alia, under the Terrorist and Disruptive Activities (Prevention) Act, 1967 and there is also a pending criminal case against him on allegations of a similar line of activities. Hence, we propose to impose appropriate conditions in respect of both, which they shall have to comply with while on bail., Accordingly we set aside the impugned judgments and direct that the appellants be released on bail in respect of the case(s) out of which the present appeals arise, on such terms and conditions the Special Court may consider fit and proper, if the appellants or any one of them are not wanted in respect of any other case. The conditions to be imposed by the Special Court shall include: (a) Vernon Gonsalves, appellant in Criminal Appeal No. 639 of 2023 and Arun Ferreira, appellant in Criminal Appeal No. 640 of 2023, upon being released on bail shall not leave the State of Maharashtra without obtaining permission from the Trial Court. (b) Both the appellants shall surrender their passports, if they possess any, during the period they remain on bail with the Investigating Officer of the National Investigation Agency. (c) Both the appellants shall inform the Investigating Officer of the National Investigation Agency of the addresses at which they shall reside. (d) Both the appellants shall use only one mobile phone each, during the time they remain on bail and shall inform the Investigating Officer of the National Investigation Agency of their respective mobile numbers. (e) Both the appellants shall also ensure that their mobile phones remain active and charged round the clock so that they remain constantly accessible throughout the period they remain on bail. (f) During this period, that is the period during which they remain on bail, both the appellants shall keep the location status of their mobile phones active, 24 hours a day and their phones shall be paired with that of the Investigating Officer of the National Investigation Agency to enable him, at any given time, to identify the appellants’ exact location. (g) Both the appellants shall report to the Station House Officer of the Police Station within whose jurisdiction they shall reside while on bail once a week., In the event there is breach of any of these conditions, or any of the conditions to be imposed by the Trial Court independently, it would be open to the prosecution to seek cancellation of the bail of each or any of the defaulting appellants without any further reference to the Supreme Court of India. Similarly, if the appellants seek to threaten or otherwise influence any of the witnesses, whether directly or indirectly, then also the prosecution shall be at liberty to seek cancellation of bail of the concerned appellant by making an appropriate application before the Trial Court., The appeals stand allowed in the above terms. Pending application(s), if any, shall stand disposed of., For Criminal Appeal No. 639/2023 Vernon Gonsalves. Date: 28‑07‑2023. These matters were called on for pronouncement of judgment today. For the appellants: Rebecca John, Senior Advocate; Jawahar Raja, Advocate; Chinmay Kanojia, Advocate; Archit Krishna, Advocate; Vishnu P, Advocate; Varsha Sharma, Advocate. For the respondents: Anand Dilip Landge, Advocate; Siddharth Dharmadhikari, Advocate; Aaditya Aniruddha Pande, AOR; Bharat Bagla, Advocate; Sourav Singh, Advocate; Aditya Krishna, Advocate; Tushar Mehta, Solicitor General; Sharath Nambiar, Advocate; Nakul Chnegappa K.K., Advocate; Vatsal Joshi, Advocate; Indra Bhakar, Advocate; Vinayak Sharma, Advocate; Anuj Srinivas Udupa, Advocate; Chitransh Sharma, Advocate; Kanu Agarwal, Advocate; Swati Ghildiyal, Advocate; Deepabali Dutta, Advocate; Sairica S Raju, Advocate; Sabarish Subramanyam, Advocate; Arvind Kumar Sharma, AOR. Hon’ble Mr. Justice Aniruddha Bose and Hon’ble Mr. Justice Sudhanshu Dhulia pronounced the judgment of the bench. The appeals stand allowed; the impugned judgments are set aside and direct that the appellants be released on bail in respect of the case(s) out of which the present appeals arise in terms of the signed Reportable Judgment. Pending application(s), if any, shall stand disposed of.
|
id_1690
| 0
|
Date of decision: 02 September 2022. Letter Patent Appeal 48 of 2021 and Civil Miscellaneous No. 4157 of 2021 were filed through Mr. Akhil Sibal, Senior Advocate (Amicus Curiae) with the appellant in person, versus through Mr. Tushar Sannu, Standing Counsel with Ms. Pooja Gupta, Advocate for the respondent, Municipal Corporation of Delhi, and Mr. Ajay Arora and Mr. Anuj Bhargava, Advocates for Delhi Jal Board. Letter Patent Appeal 161 of 2021 and Civil Miscellaneous Nos. 15709 of 2021 and 26516 of 2021 were filed by the appellant through Mr. Tushar Sannu, Standing Counsel with Ms. Pooja Gupta, Advocate for the appellant, Municipal Corporation of Delhi, versus through Mr. Akhil Sibal, Senior Advocate (Amicus Curiae) with the respondent in person., This Delhi High Court has before it two cross Letter Patent Appeals arising from the impugned judgment dated 12 February 2020, passed by the learned Single Judge of this Court in Writ Petition (Civil) 8098 of 2010. The first appeal, Letter Patent Appeal No. 48 of 2021, was filed by Smt. Leela Mathur seeking, inter alia, an enhancement of the cost of Rs 3 lakh imposed upon the Municipal Corporation of Delhi. The second appeal, Letter Patent Appeal No. 161 of 2021, was preferred by the Municipal Corporation of Delhi seeking setting aside of the compensation/cost of Rs 3 lakh imposed upon it., Smt. Leela Mathur presently resides at House No. 98, West Azad Nagar, Shahdara, South Delhi. The property was purchased by her parents in 1952 and in 1976 her father applied for a completion certificate vide Receipt No. 222034 by depositing a fee. Smt. Leela Mathur contends that she has been residing in the said property since 1970., In Writ Petition (Civil) 8098 of 2010, the appellant claimed that when the property was constructed, it was placed at the road level. Subsequently, the Municipal Corporation of Delhi re‑laid the adjoining road. Each time the road was repaired or reconstructed, the level of the road rose by about two feet, causing the appellant’s house to be below the road level., The appellant states that she repeatedly requested the authorities to dig the road and reconstruct it so that her house would not be below road level, but to no avail. Because the house is below road level, rainwater collects in the house, causing damage. During monsoons it is impossible to live in the house as rainwater enters. Consequently, Smt. Leela Mathur filed Writ Petition (Civil) 8098 of 2010 against the Municipal Corporation of Delhi, seeking a direction to reconstruct the road and compensation for the harm caused to her belongings. The learned Single Judge, vide order dated 3 December 2010, issued notice and directed the filing of a status report., On 23 March 2011, the Municipal Corporation of Delhi filed its first status report in Writ Petition (Civil) 8098 of 2010, stating that the property of Smt. Leela Mathur is an old construction and was below the level of the road. The corporation further submitted that her property was the only one below road level. In her reply, Smt. Leela Mathur stated that she had personally visited the houses of her neighbours and that several of them were facing the same issue. Consequently, several individuals in her locality had been compelled to sell their houses to builders who possessed the financial wherewithal to reconstruct houses., In view of the competing facts, the learned Single Judge, vide order dated 6 May 2011, directed certain officials of the Municipal Corporation of Delhi to inspect the premises again and sought solutions from the officials., Thereafter, the Municipal Corporation of Delhi filed its second status report, confirming that there were in fact eleven properties in the area which faced the same issue as Smt. Leela Mathur. The corporation suggested that she should apply for a fresh building plan and reconstruct her house in accordance with it. A reply was filed by Smt. Leela Mathur on 12 April 2012 wherein she reiterated her previous position., On 24 May 2012, the learned Single Judge again directed an inspection of Smt. Leela Mathur’s premises and stated that an arrangement needs to be made for proper drainage facility to ensure that neither the premises nor the adjoining road is flooded., In compliance, a third status report dated 4 July 2012 was filed by the Municipal Corporation of Delhi. During inspection on 15 May 2012 it was noticed that the level of the premises was about two feet six inches below the road level and that no sewerage connection had been obtained by the owner, resulting in accumulation of sewerage water, waste water and rainwater. After technical inspection, it was decided that (i) the owner must apply for a sewerage connection to Delhi Jal Board for proper disposal of sewerage as well as overflow of waste and rainwater, and (ii) to avoid overflow of rainwater from the road during rain, technical staff suggested constructing a toe wall about eight inches high in the opening of the gate. If the owner does not construct the toe wall, the department may construct it after obtaining consent from the owner., On 7 February 2013, the learned Single Judge again directed an inspection of the area outside Smt. Leela Mathur’s house and directed the Municipal Corporation of Delhi to file a status report and suggest means of avoiding waterlogging. Accordingly, another status report dated 19 July 2013 was filed, reiterating the position expressed in the third status report dated 4 July 2012., Subsequently, on 10 July 2013, the learned Single Judge passed an order directing the Municipal Corporation of Delhi to explore the possibility of making a drain to avoid waterlogging. The corporation submitted that it was not feasible, stating that the matter was listed on 10 March 2017 and the Court was pleased to direct the respondent to explore the feasibility of making a drain from an appropriate place inside the front boundary of the petitioner, connecting the open courtyard to the covered drain outside, which should not be more than three to four feet away. It was further submitted that the proposal was technically not possible unless the petitioner raises his floor level up to the level of the drain, which is about two feet above the existing level of the house. Lowering the road level would not be practical as there are about 101 houses in the vicinity and lowering the road would compound the miseries of other occupants., Around 2015, Smt. Leela Mathur found a letter addressed by her father to the Zonal Engineer of the Municipal Corporation of Delhi, Shahdara Zone, indicating that he had submitted the original building plan of the property along with payment of Rs 3 via Receipt No. 222034 dated 15 March 1976 and had sought a completion certificate, which was still not issued. After providing this file to the Deputy Commissioner, she sought a copy of the sanction plan submitted by her father along with the original file. Vide letter dated 7 December 2015, the Executive Engineer, Shahdara Zone, supplied a copy of the relevant office file indicating that her father had indeed deposited money for sanction of the building plan., Vide order dated 9 January 2015, the learned Single Judge ordered that the cost of reconstruction of Smt. Leela Mathur’s house be placed before the Court. Upon consulting an architectural firm, Aarkitek Combine, Smt. Leela Mathur stated that the total cost of reconstruction is Rs 12.20 lakh., On 1 April 2015, Smt. Leela Mathur filed a Right to Information application asking whether the Municipal Corporation of Delhi can lay new roads on top of old roads, thereby increasing the surface of the road. The East Delhi Municipal Corporation responded on 21 April 2015 stating that the Municipal Corporation of Delhi is supposed to maintain the level of roads as per the height of the previous road. Between 2015 and 2020, the petitioner and the Municipal Corporation of Delhi filed other affidavits and status reports, but no new submissions were made during this period., The learned Single Judge, by passing the impugned judgment dated 12 February 2020, imposed costs of Rs 3 lakh as compensation and directed the Municipal Corporation of Delhi to hand over a pump to Smt. Leela Mathur to avoid waterlogging., Thereafter, Smt. Leela Mathur sought a revised cost of construction, which has been calculated at about Rs 21 lakh., This matter was listed before this bench on 28 July 2022 when Smt. Leela Mathur appeared in person to represent her case. Having regard to the advanced age and frail health of the appellant, the Delhi High Court deemed it appropriate to appoint Mr. Akhil Sibal, Senior Advocate as Amicus Curiae to assist her., Mr. Akhil Sibal, learned Senior Advocate appearing for the appellant, submitted that he had personally visited the property. He substantiated the claim that waterlogging had destroyed the woodwork of the house, ruined other material possessions, and rendered the house uninhabitable. He relied upon the various status reports to argue that the Municipal Corporation of Delhi has prima facie been negligent. He also pointed out that the learned Single Judge noticed the uncontested estimate of reconstruction of Rs 12 lakh, yet without recording any reason granted compensation of only Rs 3 lakh to Smt. Leela Mathur., The learned Standing Counsel for the Municipal Corporation of Delhi argued that the issue of waterlogging was caused because the property was not regularised and was illegal. He averred that the corporation had time and again sought to provide solutions but the appellant had been adamant about receiving compensation. He repeatedly suggested that a toe wall could be constructed to make it easy to leave the premises in case of waterlogging., In his rejoinder, Mr. Akhil Sibal highlighted that the Municipal Corporation of Delhi had lost the original documents pertaining to the property, a matter raised by predecessor benches of the learned Single Judge. He argued that the suggestion of installing a toe wall is unfounded considering the appellant is in her eighties and cannot be expected to use a toe wall. He further contended that waterlogging is exacerbated as garbage accumulates in the drain during monsoons, adding to the appellant’s woes., The learned counsels were heard and the material on record was perused., The issue has been under consideration before this Delhi High Court since 2011. Several status reports have been filed. Despite the fact that the roads have been constructed one over the other, causing the petitioner’s house to be about two feet below road level, the Municipal Corporation of Delhi has been adamant in not lowering the road level on the ground that doing so would create problems for other house owners. It is an admitted fact that other house owners in the area have sold their properties to various persons who have made fresh constructions on the road level. The petitioner, who is 80 years old, has not been able to reconstruct her house., A status report filed on 24 May 2011 stated that out of 101 properties in the area, 82 properties are at road level, meaning that the residents have demolished and reconstructed the properties by bringing them to road level, while 11 properties, which are not demolished and reconstructed, are below road level. The report categorically admits that since 1997 roads were repaired many times, causing the roads to rise. Relevant excerpt: 'The deponent inspected a total of 101 properties… 82 properties are above road level and 11 properties were found below road level. These 11 properties are very old and since 1987 the roads were repaired many times, which was the reason the level of the road became slightly raised.', In its second status report, the Municipal Corporation of Delhi admitted that eleven houses were facing the same issue. However, in an unsuccessful attempt to divert blame onto the petitioner and the Delhi Jal Board, the corporation argued that the problem was caused because Azad Nagar was an illegal/unregularised society. After admitting that it had repeatedly reconstructed the road in an indiscriminate manner, the corporation callously suggested that the appellant should reconstruct her house under a fresh sanction plan., In its third status report dated 4 July 2012, the Municipal Corporation of Delhi further admitted that Smt. Leela Mathur’s house was two feet six inches below road level and proceeded to suggest that she obtain a sewerage connection. Pertinently, in response to a Right to Information request by the petitioner, the East Delhi Municipal Corporation admitted that the corporation is supposed to maintain the level of roads as per the height of the previous road. Subsequent status reports have reiterated the same submissions., In the status report dated 10 July 2013, the Municipal Corporation of Delhi stated that the level of the premises is about 2.5 feet below road level and that the entire problem arises because of the lack of sewage connection. The report also categorically states that dumping of garbage chokes the drains, resulting in collection of drain water. Relevant excerpt: 'Both the level of the drains and the roads are higher than the floor level of the petitioner. In view of the fact that the drain level is higher by about 2.5 feet, it would not matter what the level of the road is because the drain would flow back to the house irrespective of the road level, especially when the petitioner herself has failed to take a sewer connection till date.', At the outset, this Court finds no force in the Municipal Corporation of Delhi’s argument that the issue was caused because Azad Nagar is an unauthorised colony. A sizeable population of Delhi lives in areas designated by the Government as unauthorised colonies, which were later regularised. The colony of the appellant was regularised vide Resolution No. 1634, Item No. 35 dated 15 November 1987. It also appears from the record that the plot of Smt. Leela Mathur has been built as per the sanction plan, as borne out from the corporation’s receipt for deposit of money., The Municipal Corporation of Delhi has sought to argue that since this colony was unplanned and subsequently regularised, it has been repairing the roads on a 'as is where is' basis. A municipal corporation constituted for the precise purpose of providing basic amenities to citizens cannot shirk responsibility on the ground that the society was once unauthorised. It is evident that the Government of NCT Delhi has regularised these societies with an aim to include them within the development plans of the city., The suggestion by the learned counsel for the Municipal Corporation of Delhi to make a toe wall of about eight inches cannot be accepted as a solution for Smt. Leela Mathur. She is about 80 years of age and cannot be expected to climb over a toe wall of eight to ten inches every time she intends to enter her house. Moreover, the corporation’s claim that a pump has already been installed and the problem no longer exists cannot be accepted because during heavy rains the house gets waterlogged, causing damage., Furthermore, the issue is not remotely related to the status of the property. The locality of Azad Nagar faces waterlogging because the Municipal Corporation of Delhi has indiscriminately repaired the roads without following basic care and caution. The corporation’s actions have compelled individuals who lacked the financial wherewithal to raise the level of their houses to sell to builders. Accordingly, this Court finds no force in the corporation’s argument that waterlogging occurred due to the status of the colony. If anything, the corporation needs to ensure that societies which were unauthorised and subsequently regularised are provided with requisite sanitation facilities, functional drainage systems, roads, and other infrastructural amenities., The Municipal Corporation of Delhi has repeatedly suggested that the appellant should apply for a fresh sanction plan and rebuild her house. This Court objects to such submissions, considering that the corporation is a public body enacted for the benefit of the public at large. It cannot reasonably expect individuals to reapply for sanction plans and rebuild their houses from scratch. It should not be the prerogative of a few with the requisite financial wherewithal to enjoy basic amenities such as sanitation, functional drainage systems, and properly constructed roads., During the proceedings, this Court inquired from the counsel for the Delhi Jal Board whether the issue could be resolved by installing a sewerage connection. The Delhi Jal Board submitted that obtaining a sewerage connection alone will not remedy the waterlogging. The board rebutted the corporation’s submission that the sewerage lines are below the house of the appellant. It was also brought to the Court’s attention that although a drain exists near the relevant house, it gets clogged during monsoons. Ensuring that the public drainage system is fully functional and avoiding blockage of sediments is the prerogative of the Municipal Corporation of Delhi. It is unfortunate that the corporation not only created the issue of waterlogging but also exacerbated the situation by not taking appropriate measures to avoid clogging of drains during monsoon., It is well settled that it is the duty of the municipal corporation to ensure that there is no waterlogging and that proper storm water drains are constructed. The corporation cannot pass the buck to residents by claiming that clogged storm water drains are beyond its control. The corporation has therefore woefully failed in discharging its duties, having admittedly laid roads one over the other thereby increasing the height of the roads, and has also not ensured that proper storm water drains are present in the area to drain rainwater away., The Apex Court in Municipal Council, Ratlam v. Vardhichand and Ors., AIR 1980 SC 1622, noted that decency and dignity, being facets of human rights, need to underscore every action undertaken by the municipal council. The Court observed that public nuisance caused by pollutants and the failure of local authorities to provide basic amenities drive slum dwellers to live in streets, compromising their dignity. It further held that a responsible municipal council cannot evade its duty by pleading financial inability, and that providing functional drainage systems is essential to justify its existence., The question of award of compensation under the constitutional jurisdiction of this Court under Article 226 of the Constitution has been considered in a large number of cases. Although the position in law is fairly well‑settled, a brief reference is made to decisions of the Supreme Court and this Court, including Raj Kumar v. Union of India (2005), Delhi Jal Board v. Raj Kumar (2005), Chitra Chary v. DDA (2005), Shri Chand v. Chief Secretary (2004), Shobha v. GNCTD (2003), Shyama Devi v. GNCTD (1999), All India Lawyers' Union (Delhi Unit) v. Union of India, and B.L. Wali v. Union of India (2004)., In D.K. Basu v. State of West Bengal (1997) 1 SCC 416, the Apex Court, while granting compensation in a writ petition, observed that for violation of the fundamental right to life or basic human rights, the defence of sovereign immunity is not available to the State for tortious acts of its public servants. Compensation under Article 21 is a claim based on strict liability and is in addition to private law damages. The Court emphasized that public law proceedings serve a different purpose than private law proceedings and that monetary compensation is a useful remedy for infringement of the right to life., While dealing with the issue of whether a municipal corporation can be held liable to pay compensation in a writ petition, the Apex Court in Municipal Corporation of Delhi v. Subhagwanti (1966) 3 SCR 649 observed the principle of negligence, stating that the main question is whether the appellant was negligent in maintaining the Clock Tower and liable to pay damages for the death of persons resulting from its fall.
|
id_1690
| 1
|
We are unable to accept the argument of the appellant as correct. It is true that the normal rule is that it is for the plaintiff to prove negligence and not for the defendant to disprove it. But there is an exception to this rule which applies where the circumstances surrounding the thing which causes the damage are at the material time exclusively under the control or management of the defendant or his servant and the happening is such as does not occur in the ordinary course of things without negligence on the defendant's part. (emphasis supplied) 38. The Supreme Court of India in Subram Singh v. State of Haryana, 2006 (3) SCC 178, has reiterated the power of this Court to provide compensation as an appropriate remedy, in the following manner:, It is now well‑settled that award of compensation against the State is an appropriate and effective remedy for redressal of an established infringement of a fundamental right under Article 21, by a public servant. The quantum of compensation will, however, depend upon the facts and circumstances of each case. Award of such compensation (by way of public law remedy) will not come in the way of the aggrieved person claiming additional compensation in a civil court, in the enforcement of the private law remedy in tort, nor come in the way of the criminal court ordering compensation under Section 357 of the Code of Criminal Procedure. Award of compensation as a public law remedy for violation of the fundamental rights enshrined in Article 21 of the Constitution, in addition to the private law remedy under the law of torts, was evolved in the last two and a half decades., In the celebrated judgment of Nilabati Behera v. State of Orissa, (1993) 2 SCC 746, the Supreme Court of India observed as under: 22. The above discussion indicates the principle on which the court's power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for contravention of a fundamental right. This was indicated in Rudul Sah [(1983) 4 SCC 141 : 1983 SCC (Cri) 798 : (1983) 3 SCR 508] and certain further observations therein adverted to earlier, which may tend to minimise the effect of the principle indicated therein, do not really detract from that principle. This is how the decisions of the Supreme Court of India in Rudul Sah and others in that line have to be understood and Kasturilal [(1965) 1 SCR 375 : AIR 1965 SC 1039 : (1965) 2 Cri LJ 144] distinguished therefrom. We have considered this question at some length in view of the doubt raised, at times, about the propriety of awarding compensation in such proceedings, instead of directing the claimant to resort to the ordinary process of recovery of damages by recourse to an action in tort. In the present case, on the finding reached, it is a clear case for award of compensation to the petitioner for the custodial death of her son., Furthermore, the Supreme Court of India in Municipal Corporation of Delhi v. Sushila Devi, (1999) 4 SCC 317 has held as under: 2. The deceased was survived by a widow, three minor sons and a minor daughter and his mother. All the six brought a suit for damages claiming Rs 3 lakhs. A learned Single Judge sitting on the original side of the Delhi High Court held the Municipal Corporation of Delhi liable for damages in torts and granted a decree of Rs 90,000 by way of compensation payable to the widow and the children of the deceased. Two letters patent appeals were preferred. The Municipal Corporation sought the suit being dismissed while the claimants sought enhancement in the amount of compensation. The Division Bench dismissed the appeal filed by the Corporation but at the same time partly allowed the appeal preferred by the claimants enhancing the amount of compensation to Rs 1,44,000 payable with interest calculated at the rate of 6 per cent per annum from the date of suit, i.e., 5‑8‑1966 till 17‑9‑1970 when the amount was deposited by the Corporation in the court for payment to the successful claimants. The Division Bench also allowed interest at the rate of 3 per cent per annum on Rs 90,000 from the date of deposit in the court till the date of actual withdrawal of the amount by the claimants and interest at the rate of 6 per cent per annum on Rs 54,000 from 17‑9‑1970 till payment. The reasons for the award of additional interest calculated at the rate of 3 per cent per annum on Rs 90,000 and the legality thereof we shall deal with separately., The law is stated in Winfield and Jolowicz on Torts (13th Edn., 1989, p. 415) in these words: If damage is done owing to the collapse of the projection on the highway or by some other mischief traceable to it, the occupier of the premises on which it stood is liable if he knew of the defect or ought, on investigation, to have known of it. At any rate this is the rule with respect to a thing that is naturally on the premises e.g. a tree., The deceased was aged 30. He was employed in a family business wherefrom he was drawing a salary of Rs 650 per month. The learned trial Judge deducted an amount of Rs 150 per month for expenses incurred on the self and assessed the dependency at Rs 500 per month. The Division Bench found that apart from salary the deceased was also getting commission on sales. The net income of the deceased was arrived at Rs 1,000 per month wherefrom Rs 200 were deducted as expenses on the self. The dependency was assessed at Rs 800 per month. The learned trial Judge as well as the Division Bench have adopted a multiplier of 15. Thus, the Division Bench has assessed the quantum of compensation at Rs 1,44,000 in supersession of Rs 90,000 assessed by the learned trial Judge. Though the learned counsel for the Municipal Corporation has assailed the assessment to be on the higher side and the learned counsel for the claimants has submitted that keeping in view the better further prospects of the deceased in the family business, coupled with the youth of the deceased, the monthly income should have been taken at Rs 1,826 but we are of the opinion that the figure of compensation arrived at by the Division Bench is a very reasonable figure and calls for no interference. The multiplier has also been correctly adopted. In the leading case of Susamma Thomas [G.M., Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176 : 1994 SCC (Cri) 335] the Supreme Court of India adopted a multiplier of 12 when the deceased was aged 39. We do not find any fault with the figure of compensation having been arrived at Rs 1,44,000. The same is upheld., The apathy of the Municipal Corporation of Delhi is also writ large from the submission that the MCD lacks the funds to remedy the grievance of Smt. Leela Mathur. A responsible Municipal Corporation, constituted for the precise purpose of providing these basic public goods, cannot shirk off its responsibility by citing financial constraints. Considering that it is evident that the MCD has been grossly negligent in its conduct, it is incumbent upon the Supreme Court of India to craft tools in order to do complete justice for the appellant. In the considered opinion of the Supreme Court of India, in the facts and circumstances of this particular case, providing monetary compensation to the appellant i.e. Smt. Leela Mathur is the most viable mode of redress available., Mr. Akhil Sibal, learned Amicus Curiae appearing for Smt. Leela Mathur, suggests that the only solution at the moment seems to be that the house of Smt. Leela Mathur be demolished and reconstructed and the old lady cannot be burdened with the cost of demolition and reconstruction for no fault of hers. The learned Single Judge has recognised that the MCD had been grossly negligent and has awarded a sum of Rs 3 lakhs as compensation to Smt. Leela Mathur. A fresh evaluation indicates that Smt. Leela Mathur would have to spend close to a whopping Rs 21.20 lakhs to carry out the necessary repairs., Having due regard to the advanced age of the appellant, the fact that she has been pursuing this litigation for over a decade, has suffered loss of her material possessions, and has undergone immense agony and anxiety for a prolonged period of time, the Supreme Court of India finds it appropriate to enhance the compensation awarded to Smt. Leela Mathur by a sum of Rs 9,00,000, which would be roughly half the cost of reconstruction, and the challenge by the MCD to the order dated 12‑02‑2020 awarding compensation of Rs 3,00,000 to Smt. Leela Mathur is rejected. The Supreme Court of India expresses its gratitude to Mr. Akhil Sibal, learned Senior Counsel, who has assisted this Court in every possible manner. He has taken the pain to visit the site and has placed the facts of the case dispassionately., In light of the aforesaid, the petitions are disposed of, along with pending applications, if any.
|
id_1692
| 0
|
Civil Writ Petition No. 13497 of 2023 (Original and Miscellaneous) and other connected matters; Civil Writ Petition No. 19629 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 19447 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13519 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13525 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 15010 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13522 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13634 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13368 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 13465 of 2023 (Original and Miscellaneous); Civil Writ Petition No. 15061 of 2023 (Original and Miscellaneous). The petitioners are Jyotsana Rawat and others, Rohini Attri, Amanjit Singh Dhillon, Sukhwinder Kaur and others, Manjeet Kumar and others, Deep Inder Money Sharma, Vishal Chaudhary, Vishivani Bansal, Isha Mehra and others, Parveen, Munish Singla and others. The respondents are the State of Punjab and others., Counsel for the petitioners: Mr. Gurminder Singh, Senior Advocate, assisted by Mr. Jatinder Singh Gill, Advocate; Mr. Shivender Pal Singh, Advocate; Ms. Sheena Khanna, Advocate (for the petitioners in Civil Writ Petition No. 13497 of 2023). Mr. Naresh Kaushal, Advocate (for the petitioner in Civil Writ Petition No. 19629 of 2023). Mr. Anil Kumar Garg and Mr. Kanav Bansal, Advocates (for the petitioner in Civil Writ Petition No. 13634 of 2023). Mr. Anshul Sharma and Mr. S. S. Thakur, Advocates (for the petitioner in Civil Writ Petition No. 13465 of 2023). Mr. Pardhuman Garg, Advocate (for the petitioners in Civil Writ Petition Nos. 13368 and 13519 of 2023). Mr. Karan Nehra, Mr. Abhay Josan and Mr. Harvinder Singh, Advocates (for the petitioners in Civil Writ Petition No. 13525 of 2023). Mr. V. K. Sandhir, Advocate (for the petitioner in Civil Writ Petition No. 19447 of 2023). Mr. B. S. Sidhu, Senior Advocate, assisted by Mr. Charan Singla and Mr. Tarun Bhatta, Advocates (for the petitioners in Civil Writ Petition No. 15010 of 2023). Mr. D. S. Nalwa, Advocate (for the petitioners in Civil Writ Petition No. 15061 of 2023). Mr. D. S. Patwalia, Senior Advocate, assisted by Mr. Kannan Malik, Advocate (for respondent No. 4 in Civil Writ Petition No. 13525 of 2023). Mr. Prateek Mahajan and Mr. Daanish Mahajan, Advocates (for the intervenor in Civil Writ Petition Nos. 13497 and 13522 of 2023). Mr. Atul Goyal, Advocate (for the intervenor in Civil Writ Petition No. 13368 of 2023). Mr. Vikas Arora, Additional Advocate General, Punjab., All the aforementioned writ petitions raise a common question of law and all the petitioners are aggrieved by the same order dated 05 June 2023 issued by respondent No. 3; consequently, the petitions are being heard together., All the petitioners are aspiring candidates who applied under the advertisement dated 05 April 2023 issued by the Punjab Public Service Commission (hereinafter referred to as PPSC) for the posts of Assistant District Attorney (ADA) and Deputy District Attorney (DDA). They were found eligible, placed in the merit list and their names were forwarded to the State Government for appointment. The State Government, however, issued an order on 05 June 2023 directing the selected candidates to produce copies of six Court orders or zimni orders of each year showing their presence in the Court to prove the experience claimed by them. Aggrieved thereby, the present writ petitions have been filed., Learned Senior Counsel Mr. Gurminder Singh, appearing for the petitioners, submitted that Rule 5(2) of the Punjab Prosecution and Litigation (Group A) Service Rules, 2002 (hereinafter referred to as Prosecution Rules 2002) and the Punjab Prosecution and Litigation (Group B) Service Rules, 2010 (hereinafter referred to as Prosecution Rules 2010) both prohibit appointing a person to a post who does not possess the qualification and experience specified in Appendix B. The PPSC advertisement required candidates to submit a certificate of experience issued by a competent authority. The petitioners submitted certificates issued by the Bar Association of the District or High Court where they are enrolled and practising. Counsel submitted that an advocate’s enrolment certificate, together with the enrolment number, is sufficient proof of the date from which practice at the Bar is to be counted and that it is not necessary for an individual to have his attendance marked in the Court to prove experience as required under the Rules. Once the certificate issued by the Bar Association is accepted as sufficient proof of experience by the examining body, the State authorities are estopped from demanding further proof of experience by producing zimni orders or attendance in the Court. Such a demand is an additional requirement beyond the scope of the Rules and seeks to change the rules after the selection process has been completed. The State cannot tamper with the final select list prepared by the PPSC, which has the final say under Article 320 of the Constitution of India regarding selection; the State’s role is limited to suitability relating to antecedents., Learned Counsel Mr. D. S. Nalwa, appearing in Civil Writ Petition No. 15061 of 2023 for candidates aspiring to the posts of DDA, submitted that the State has no legal authority to demand six zimni orders as this adds a condition not contained in the advertisement. The petitioners were selected as ADAs after submitting their certificates of experience at the Bar; they cannot now be asked to produce appearance certificates for the period prior to their appointment. The criteria adopted by the State is alien to the Rules. The petitioners have been working as ADAs with full satisfaction of their superiors, and their two‑year experience at the Bar was found sufficient for selection. A different yardstick cannot be adopted without an amendment to the Rules. The State’s reliance on Court orders or interim orders as a reasonable criterion for assessing experience is misplaced, as practice at the Bar includes assisting senior counsel, client consultations and other activities that do not necessarily result in a Court order recording the junior’s attendance. The State cannot change the criteria after the selection process is over. In the case of petitioners No. 1 and 3 in Civil Writ Petition No. 15061 of 2023, seven years of experience as an advocate (counted from the date of enrolment) has already been considered for appointment as Additional Public Prosecutor under Section 24 of the Criminal Procedure Code; the State cannot adopt a different yardstick for the same purpose., Learned Counsel Mr. Karan Nehra, while supporting the foregoing submissions, argued that a lawyer’s work is multifarious, involving not only Court appearances but also counselling, drafting, and other non‑litigious activities. He referred to the definitions of “appearing at Bar” and “at the Bar” and asserted that the conditions introduced by the impugned order are extraneous and give benefit to less meritorious candidates. The respondents have adopted a different yardstick for measuring experience in the present advertisement, demanding six zimni or interim orders of each year, whereas in another advertisement for the posts of Legal Officer and Assistant Legal Officer, a certificate issued by the Bar Association was treated as sufficient proof of two‑year or seven‑year experience and appointments were made on that basis. Hence, the order suffers from arbitrariness and should be quashed. He further submitted that practice before tribunals, arbitral tribunals, commissions (such as RERA or Consumer Commission), drafting petitions, and registration of documents all constitute experience at the Bar; limiting proof to attendance in six interim orders is wholly unjustified and amounts to a complete non‑application of mind., The above submissions have been adopted by Mr. Naresh Kaushal, Advocate (for the petitioner in Civil Writ Petition No. 19629 of 2023); Mr. Anil Kumar Garg and Mr. Kanav Bansal, Advocates (for the petitioner in Civil Writ Petition No. 13634 of 2023); Mr. Anshul Sharma and Mr. S. S. Thakur, Advocates (for the petitioner in Civil Writ Petition No. 13465 of 2023); Mr. Pardhuman Garg, Advocate (for the petitioners in Civil Writ Petition Nos. 13368 and 13519 of 2023); and Mr. V. K. Sandhir, Advocate (for the petitioner in Civil Writ Petition No. 19447 of 2023)., Counsel relied upon the following precedents: Sivanandan C. T. & Ors. v. High Court of Kerala and Others, 2018 (1) SCC 239; Tej Prakash Pathak & Ors. v. Rajasthan High Court and Others, 2013 (4) SCC 540; Salam Samarjeet Singh v. High Court of Manipur at Imphal & Anr., 2016 (10) SCC 484; K. Manjusree v. State of Andhra Pradesh & Anr., 2008 (3) SCC 512; V. Vishnu v. State of Telangana and Others, Writ Appeal No. 511 of 2020, Telangana High Court (DB), decided on 12 March 2021; The State of Uttar Pradesh v. Karunesh Kumar & Ors., 2023 AIR (Supreme Court) 52; Sivanandan C. T. & Others v. High Court of Kerala & Others, Civil Writ Petition No. 229 of 2017, Supreme Court of India, decided on 12 July 2023; Karan Jagdish Kaur v. Punjab School Education Board, 1996 (3) PLR 403; Employees State Insurance Corporation & Another v. Amandeep Singh & Others, Civil Writ Petition No. 12722 of 2022, decided on 02 June 2022 (Punjab & Haryana High Court at Chandigarh); Sanjay Dhar v. Jammu & Kashmir Public Service Commission, 2000 (8) SCC 182 (paras 11 and 14); and K. L. Siraj v. High Court of Kerala., Per contra, learned Senior Counsel Mr. D. S. Patwalia, appearing for the intervenors, submitted that the letter dated 05 June 2023 issued by the State must be construed as part of the process of examining suitability for the posts. He argued that the State may examine whether the selected candidates possess the experience specified in Appendix B to the Rules. Under the Prosecution Rules 2010, all appointments must be made in accordance with Appendix B, and Sub‑Rule 5(2) requires that no person be appointed unless he possesses the qualification and experience specified. Therefore, the State has an independent power to scrutinise documents, and because the petitioners’ certificates were found insufficient to assess their experience, they were asked to produce attendance in at least six zimni or interim orders for each year. He further submitted that the expression “at the Bar” must be understood to mean appearance before the Court alone, and that the requirement in the letter does not warrant interference by this Court., The Punjab Prosecution and Litigation Rules of 2002 (Prosecution Rules 2002) provide the method and manner of selection for the post of Deputy District Attorney, while the Punjab Prosecution and Litigation (Group B) Service Rules of 2010 (Prosecution Rules 2010) provide the method and manner of selection for the post of Assistant District Attorney. Rule 5 of the Prosecution Rules 2002 states: (1) All appointments to the service shall be made in the manner specified in Appendix B; (2) No person shall be appointed to a post unless he possesses the qualifications and experience specified against the post in Appendix B; (3) Appointment by promotion shall be on a seniority‑cum‑merit basis, but no person shall have any right to claim appointment on seniority alone. The rules also prescribe percentage allocations for direct recruitment versus promotion and the minimum experience required (five years at the Bar for ADAs). Rule 5 of the Prosecution Rules 2010 similarly provides that all appointments shall be made in the manner specified in Appendix B and that no person shall be appointed unless he possesses the qualifications and experience specified therein., The PPSC advertisement for 119 posts of Assistant District Attorney required, under paragraph 8.6, self‑attested certificates including proof of date of birth, Punjabi language qualification, relevant degree and DMC certificate, reserve category certificate (if applicable), experience certificate issued by a competent authority (if applicable), and for Ex-Servicemen, certificates showing date of enrolment, date of release/discharge and reason for release/discharge, among other documents. Candidates were required to sign a declaration on the last page of the online application form. For the 41 posts of Deputy District Attorney advertised on 05 April 2022, similar self‑attested documents were required, including experience certificates. The petitioners cleared the written examination held on 18 December 2022, submitted all eligibility documents for scrutiny, and were asked to bring the self‑attested documents and original documents at the time of interview. After the interviews, the final merit list for the 41 DDA posts was published on 02 March 2023, and the list was sent to the State Department of Home Affairs and Justice. Subsequently, a letter dated 05 June 2023 was issued to the selected candidates demanding six Court orders or interim orders for each year to prove their attendance in Court. The petitioners, feeling aggrieved, filed the present writ petitions., The issue for adjudication is whether the demand for six Court orders or interim orders per year could be raised after the selection process was completed and whether such a demand is justifiable, legal, and in accordance with the Rules. In Tej Prakash Pathak’s case (supra), the Supreme Court referred the matter of changing the rules of the game to a larger bench; the question is yet to be pronounced. Hence, this Court will not adduce that aspect but will examine the legality of the letter dated 05 June 2023 on its merits., Once a law graduate is enrolled as an advocate, the provisions of the Advocates Act, 1961 apply. An advocate is prohibited from engaging in any other business, holding any office of profit, or gaining any other employment, except as a sleeping partner in a firm where the nature of the business is not inconsistent with the dignity of the profession, as per Rule 47 of the Bar Council of India Rules, 1975 (Section VII – Restriction on Other Employments). The term “Bar” is defined in legal dictionaries as (a) the business of the Court, (b) the Court or Tribunal, (c) the whole body of lawyers, and (d) the profession of a lawyer. “At Bar” means before the Court, while “at the Bar” means in the legal profession., In Bar Council of India v. A. K. Balaji’s case (supra), the Supreme Court held that the expression “to practice the profession of law” under Section 29 of the Advocates Act, 1961 includes both litigious and non‑litigious matters. The Court observed that the right to practice is a genus, with the right to appear and conduct cases being a species. An advocate’s practice includes appearing in courts, counselling clients, giving legal opinions, drafting instruments, pleadings, affidavits, and participating in legal conferences. The Supreme Court reiterated this view in Harish Uppal v. Union of India, emphasizing that the ethics of the legal profession apply not only when an advocate appears before the Court but also to regulate practice outside the Court. Thus, practice of law includes both litigation and non‑litigation activities, and only advocates enrolled with the Bar Council are entitled to practise law, except as otherwise provided by law., In Devinder Singh v. State of Haryana (supra), the Division Bench of the Punjab and Haryana High Court held that the Commission’s acceptance of certificates issued by Bar Associations, duly counter‑signed by the District Judge, is a reasonable and fair approach. Where a candidate practices in the High Court, the certificate of the Registrar of the High Court is treated as conclusive. The Court observed that requiring detailed enquiries into the actual appearance of the candidate in Court for a period of three years would make the recruitment process unreasonably lengthy and impractical.
|
id_1692
| 1
|
The District Judge concerned or the Registrar of the High Court are presumed to have satisfied themselves about the fact that the person in whose favour the certificate is being issued has practised for a particular length of time and we do not find any objection to the Commission reposing implicit faith and confidence in the Head of the district judiciary and the Registrar of the High Court., Annexure R4/3 is the certificate issued by the Secretary, District Bar Association, Rohtak. A perusal thereof shows that the respondent No. 4 had been practising as an Advocate at the District Courts, Rohtak from 11 November 1991 to 13 July 1995. This certificate has been counter‑signed by the District and Sessions Judge, Rohtak on 13 July 1995. If we read Annexure R4/3 along with Annexure R4/4, there remains no doubt that the respondent No. 4 had practised at the bar for more than three years as on 24 July 1995. Thus, no illegality has been committed by the respondents No. 1 and 3 in treating the respondent No. 4 eligible for recruitment to the Haryana Civil Service (Judicial Branch)., In All India Judges Association case (supra), the Supreme Court has laid emphasis on the first‑hand experience of working of the Court system and the administration of justice begotten through legal practice, but we do not find any rationale in the argument of the learned counsel for the petitioner that such experience can be gained only by arguing cases in a Court of law. An Advocate may actually be on the rolls of the Bar Council and the Bar Association and may be actually coming to the Court for a particular length of time but may not be able to get an opportunity to argue the case. A new entrant in the profession may join a Senior Advocate. He may remain attached to such Advocate for sufficiently long time but may not get opportunity to argue the case. However, only on that count it cannot be said that the new entrant has not practised at the bar or that he has not gained experience as an Advocate. We, therefore, hold that for satisfying the conditions of eligibility prescribed in the rules, it is not necessary that an Advocate must have actually appeared and argued the cases in the Courts for a period of three years., In Madan Lal v. State of Jammu and Kashmir 1994 SCC page 546, a similar issue came up before the Supreme Court and it was held that the candidates who were recommended namely respondents No. 10 and 13 in the petition were not eligible to be appointed as they failed to satisfy the requirement of having two years of actual practice at the Bar. The Supreme Court held as under: It was next vehemently contended by the petitioners that actual practice would mean that the concerned candidates should have appeared before courts and conducted cases during these two years. It is difficult to accept this contention. A member of the Bar can be said to be in actual practice for two years and more if he is enrolled as an Advocate by the concerned Bar Council since two years or more and has attended law courts during that period. Once the Presiding Officer of the District Court has given him such a certificate, it cannot be said that only because as an advocate he has put in less number of appearances in courts and has kept himself busy while attending the courts regularly by being in the law library or in the bar room, he is not a member of the profession or not in actual practice for that period. The words 'actual practice' as employed in rule 9 indicate that the concerned advocate must be whole‑time available as a professional attached to the concerned court and must not be pursuing any other full‑time avocation. To insist that the terms 'actual practice' should mean continuous appearances in the court would amount to rewriting the rule when such is not the requirement of the rule. There is no substance even in this additional aspect of the matter canvassed by the learned senior counsel for the petitioners. It must therefore be held that respondents No. 10 and 13 were eligible for competing for the said posts of Munsiffs., From the aforesaid judgments, this Court reaches the conclusion that an advocate who is enrolled with the Bar Council starts actual practice and a certificate of such nature can be given to him by the concerned Bar Association or by the concerned Court where he is practising or even from any of the judicial or quasi‑judicial forums where he may be practising. A certificate issued by the Bar Association of the concerned Court would have the same force as that of a certificate from any other judicial or quasi‑judicial authority and he, therefore, is not required to necessarily provide further proof of his experience. However, if it is shown by other proof or documents that the concerned Advocate enrolls with the Bar Council is actually not practising law but is doing any other business or engaged in gainful employment, the said aspect would result in his being ousted from the Bar Council Rules. Self‑attestation or an affidavit of being engaged in advocacy alone can be obtained from a candidate. The State may also consider amendment in Rules., The practice of law has been defined in the Rules of Legal Education 2008 framed by the Bar Council of India under the Advocates Act, 1961 to mean as follows: (xx) “Practice of law” means and includes (a) practising before the Court, Tribunal, Authority, Regulator, Administrative Body or Officer and any Quasi‑Judicial and Administrative Body, (b) giving legal advice either individually or from a law firm either orally or in writing, (c) giving legal advice to any government, international body or representing any international dispute resolution bodies including International Court of Justice, (d) engaged in legal drafting and participating in any legal proceedings and (e) representing in arbitration proceedings or any other ADR approved by law., Article 220 of the Constitution of India provides: “No person who, after the commencement of this Constitution, has held office as a permanent Judge of a High Court shall plead or act in any court or before any authority in India except the Supreme Court and the other High Courts.” In this article, the expression High Court does not include a High Court for a State specified in Part B of the First Schedule as it existed before the commencement of the Constitution (seventh Amendment) Act. Thus, practice generally means pleading, submitting pleadings, acting as an attorney in any Court or before any authority., If a lawyer is regularly appearing in arbitration matters or is only practising in the field of registration of documents or is appearing before a Wakf Board, Service Tribunal, Labour Courts, Industrial Tribunals and various other Central Administration Tribunals, Income Tax Appellate Tribunal or District Consumer Courts and Commission, he or she cannot be said to be lacking experience of practice at the Bar. Limiting the practice to mean only appearing in the Court and that too having appearances in at least six interim orders is limiting the participation of Advocates in the open competition for appointment of the Assistant District Attorneys. Similarly is the situation of the District Deputy Advocates. The decision taken by the State Government for scrutinising experience of the candidates is thus found to be too circumscribed., Section 24 of the Code of Criminal Procedure reads as follows: (1) For every High Court, the Central Government or the State Government shall, after consultation with the High Court, appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors, for conducting in such Court any prosecution, appeal or other proceeding on behalf of the Central Government or State Government, as the case may be. (2) The Central Government may appoint one or more Public Prosecutors for the purpose of conducting any case or class of cases in any district or local area. (3) For every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors for the district, provided that the Public Prosecutor or Additional Public Prosecutor appointed for one district may be appointed also to be a Public Prosecutor or an Additional Public Prosecutor for another district. (4) The District Magistrate shall, in consultation with the Sessions Judge, prepare a panel of names of persons who are, in his opinion, fit to be appointed as Public Prosecutors or Additional Public Prosecutors for the district. (5) No person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district unless his name appears in the panel of names prepared by the District Magistrate under sub‑section (4). (6) Notwithstanding anything contained in sub‑section (5), where in a State there exists a regular Cadre of Prosecuting Officers, the State Government shall appoint a Public Prosecutor or an Additional Public Prosecutor only from among the persons constituting such Cadre, provided that where, in the opinion of the State Government, no suitable person is available in such Cadre for such appointment, the Government may appoint a person as Public Prosecutor or Additional Public Prosecutor from the panel of names prepared by the District Magistrate. Explanation: (a) “regular Cadre of Prosecuting Officers” means a Cadre of Prosecuting Officers which includes the post of a Public Prosecutor, by whatever name called, and which provides for promotion of Assistant Public Prosecutors, by whatever name called, to that post; (b) “Prosecuting Officer” means a person, by whatever name called, appointed to perform the functions of a Public Prosecutor, an Additional Public Prosecutor or an Assistant Public Prosecutor under this Code. (7) A person shall be eligible to be appointed as a Public Prosecutor or an Additional Public Prosecutor only if he has been in practice as an advocate for not less than seven years. (8) The Central Government or the State Government may appoint, for the purposes of any case or class of cases, a person who has been in practice as an advocate for not less than ten years as a Special Public Prosecutor, provided that the Court may permit the victim to engage an advocate of his choice to assist the prosecution. (9) For the purposes of sub‑section (7) and sub‑section (8), the period during which a person has been in practice as a pleader, or has rendered service as a Public Prosecutor, Additional Public Prosecutor, Assistant Public Prosecutor or other Prosecuting Officer, shall be deemed to be the period during which such person has been in practice as an advocate. Thus, those Public Prosecutors who are appointed by the State would be presumed to have practice for seven years to their credit and the respondents demanding another certificate or proof of experience is nothing but a case of non‑application of mind., The submission of Mr. D. S. Patwalia that the State has the power to further examine the suitability of the selected candidates who have been recommended by the Punjab Public Service Commission for appointment cannot be accepted as it would amount to allowing the State to act arbitrarily and reject persons who have been found to be meritorious by the examining authority. Article 320 of the Constitution of India empowers the Commission to conduct the selection process. The Punjab Public Service Commission is a statutory authority and a Superintendent or a Secretary of the State Government cannot be allowed to ignore the recommendations of the Commission by introducing an additional requirement after the selection process has been concluded and recommendations have been forwarded to the said authorities to appoint persons according to merit., Only power available with the State Government regarding examining the suitability of the said candidate is with reference to his antecedents or his medical fitness for the post. The State may also deny such selected person appointment if it finds that forgery has been committed or impersonation may have been done. The recommendations can also be rejected or denied in the cases where the State reaches the conclusion that the selection was suffering from nepotism or favoritism., In Civil Writ Petition No. 13497 of 2023 directions had been issued to the respondents to complete the selection process prior to 30 June 2023. Since none of the aforesaid circumstances have been shown to exist in the selection process by the State, introduction of demanding certificates of appearances in the Court by obtaining the opinion of one Additional Advocate General, Punjab is only to put unnecessary spooks in the selection process. It is noticed that this Court in Civil Writ Petition No. 13497 of 2023 had directed the State to conduct the selection process and conclude the same before 30 June 2023 and an assurance was given by the State authorities that they shall take steps to conclude the selection process and appoint the District Deputy Advocates and Assistant District Advocates. However, on account of the impugned action, the selection process has been put to a standstill. It has not been brought on record why an opinion was taken from the concerned DDA and on whose request an Additional Advocate General, Punjab gave the opinion which resulted in issuing of the letter dated 05 June 2023. This Court does not want to comment further on the approach of the officers of the State and the action of the Additional Advocate General, Punjab except to state that the said action is deplorable. Even the opinion placed on record is not based on any law or judgment and appears to have been given at the asking., In view of the above discussion, this Court concludes that the letter issued by the Superintendent of the Home Affairs and Justice Department, Punjab Government demanding from the selected candidates to submit certificates is not sustainable in law; is wholly arbitrary; unjustified and is not sustainable in law., Before concluding, this Court, however, is of the view that the Assistant District Advocates are required to present the case of the State Government effectively in the Courts and it appears that the State Government essentially intends to select those advocates who have rich experience of practice in the Courts alone. However, the method and manner adopted for searching out such ADAs by introducing the letter dated 05 June 2023 is wholly unjustified and incorrect approach. If the State wants to have only those advocates who have practiced in the Court of law and nowhere else, it should incorporate such condition in the rules by making appropriate amendments. They can also put a condition in the advertisement and demand particular certificate from the candidates at the stage of participation. However, demanding six interim orders with attendance of the lawyer cannot be said to be a sufficient proof of experience., Accordingly, in view of the aforesaid discussion, all these writ petitions are allowed. The letter dated 05 June 2023 is quashed and set aside. The respondents are now directed to immediately take steps for proceeding to fill up the posts of Assistant District Advocates and District Deputy Advocates within a period of one month from the date of receipt of certified copy of this order. All pending civil miscellaneous applications in this writ petition shall also stand disposed of., 13 October 2023. Judge Mamta.
|
id_1694
| 0
|
W.P.(C) 75/2024 Page 1 of 23 Reserved on: 13 February 2024 Pronounced on: 26 February 2024 Through: Mr. Rahul Bajaj, Advocate versus Through: Mr. Subhrodeep Saha and Mr. Kushal for Ms. Monika Arora, CGSC Issue 1. The petitioner is a 100 percent visually disabled student, pursuing his Master of Arts in Sociology in the Jawaharlal Nehru University. He has not been allotted any hostel since admission on 23 November 2022. He approached this Hon'ble High Court of Delhi by means of the present writ petition seeking hostel accommodation., On 1 August 2017, the petitioner was admitted to a five‑year B.A.-M.A. programme in German at the Jawaharlal Nehru University. He left midway on 26 November 2020 after completing three years and was awarded a B.A. degree in German. During the B.A. programme, he was allotted a room in the Kaveri Hostel which he occupied., On 1 December 2020, the petitioner was admitted to the Master of Arts programme in Political Science with specialisation in International Studies (M.A. (PISM)). The Jawaharlal Nehru University contended that, as the COVID‑19 pandemic was at its peak, the petitioner was allowed to retain hostel accommodation., On 5 August 2021, while undertaking the M.A. (PISM) course, the petitioner was allotted a room in the Sabarmati Hostel, which is specifically meant for students suffering from physical disabilities. Consequently, on 15 September 2021, the Jawaharlal Nehru University wrote to the petitioner requiring him to vacate his room in the Kaveri Hostel and shift to the Sabarmati Hostel. Although the petitioner was allotted a room in Sabarmati, he continued to stay in the Kaveri Hostel. The university termed this as defiance of the notice dated 15 September 2021. Counsel for the petitioner stated it was because the petitioner had suffered a fracture., The petitioner continued to retain the room in the Kaveri Hostel till the completion of his M.A. (PISM) course. As he did not vacate, a notice of eviction was issued on 2 November 2022 and on 3 November 2022 the petitioner was evicted from the Kaveri Hostel., On 23 November 2022, the petitioner was admitted to his third course at the Jawaharlal Nehru University, Master of Arts in Sociology. No hostel accommodation was granted after he joined the course despite his requests., The petitioner filed a complaint before the Chief Commissioner for Persons with Disabilities (CCPWD) under the Right of Persons with Disabilities Act, 2016, contending that the failure of the Jawaharlal Nehru University to grant hostel accommodation after admission to the M.A. (Sociology) course on 23 November 2022 infringed Section 16 of the Act. The CCPWD was requested to ensure a remedy at the earliest., The Jawaharlal Nehru University, in its counter affidavit, refers to a detailed order dated 31 August 2023 with respect to the petitioner’s grievance, but the order is not on record. In its reply dated 29 August 2023 to the CCPWD, the university raised several allegations regarding the petitioner’s conduct, labeling him a trouble‑maker and habitual complainant. These allegations are irrelevant to his right to hostel accommodation., The Jawaharlal Nehru University submitted that the provisions of the Jawaharlal Nehru University Hostel Manual did not entitle the petitioner to hostel accommodation because he was pursuing a second Master’s level course. The university identified Clause 2.1.1 of the Hostel Manual and Clause (5) of Annexure X as the relevant provisions. Clause 2.1.1 (a) provides first priority to students admitted to full‑time programmes who have passed qualifying examinations from places outside Delhi and are not residents of Delhi, except those who already have a degree or are pursuing studies at the same level with hostel accommodation. Clause (5) of Annexure X states that allotment of hostel to P‑III category students will not be given from Academic Year 2013‑14 due to acute shortage of seats., As the complaint before the CCPWD did not result in a favourable outcome, the petitioner decided on 29 October 2023 not to continue prosecuting the complaint and moved this Hon'ble High Court of Delhi by means of the present writ petition. The prayer clause reads: (a) issue a writ directing the Jawaharlal Nehru University to provide the petitioner with hostel accommodation; (b) issue a writ directing the university to revise the Hostel Manual to remove the disqualification for students pursuing a second Master’s and to add a qualification that the rule does not apply to persons with disabilities; (c) award compensation of Rs 10,00,000 for mental agony and pain caused by denial of hostel accommodation for the first three semesters; (d) alternatively, remand the matter to Respondent No. 3 and direct it to decide the issue in a time‑bound manner and direct Respondent No. 1 to abide by those directions; (e) any other order the Hon'ble Court may deem fit., Counsel for the petitioner restricted his prayer to grant of rent‑free hostel accommodation. He submitted that denial of hostel accommodation violates Clause (3) of Annexure X to the Hostel Manual, approved by the Vice‑Chancellor on 15 November 2012, which provides allotment of hostel facility to all Physically Handicapped (PH) category students irrespective of the 3 percent reservation. He relied on clause (iii) of Section 16 of the Right of Persons with Disabilities Act read with the definition of reasonable accommodation in clause (y) of Section 22, and on Section 2(h) which defines discrimination. He further relied on Sections 34(2) and 34(5) of the Act, and on Section 3(5) which obliges the appropriate Government to provide reasonable accommodation. He argued that reasonable accommodation includes hostel accommodation and that Sections 5(1) and 5(2) of the Act also support the petitioner’s right., Counsel for the petitioner cited several Supreme Court judgments, including Vikash Kumar v. Union of India, Rajive Raturi v. Union of India, Lalit v. Government of NCT of Delhi, Patan Jamal Vali v. State of Andhra Pradesh, and others, to support his contentions that the university’s position is untenable., Counsel for the Jawaharlal Nehru University argued that denial of hostel accommodation to the petitioner, who is pursuing a second Master’s degree, is strictly in accordance with Clause 2.1.1 (a) of the Hostel Manual, which excludes students who have already obtained a degree or are pursuing studies at the same level with hostel accommodation. He also relied on Clause (5) of Annexure X, which excludes P‑III category students. He emphasized that the petitioner is a 49‑year‑old man pursuing his third Master’s degree and that allowing perpetual hostel tenancy would deprive other physically disabled students of accommodation. He asserted that the university has fulfilled its mandate under the Right of Persons with Disabilities Act by providing reasonable accommodations, and that the provisions apply equally to all disabled students, therefore not violating Article 14 of the Constitution. He relied on judgments of Jeeja Ghosh v. Union of India and Anuradha Bhasin v. Union of India., In rejoinder, counsel for the petitioner urged that the university has not produced any empirical data showing that other physically disabled students were awaiting hostel accommodation with a preferential right over the petitioner, and that resource constraints cannot be cited as a ground to refuse hostel accommodation in view of the mandate of the Right of Persons with Disabilities Act and the judicial precedents., The petitioner is a 100 percent visually disabled student. The Right of Persons with Disabilities Act seeks to provide reasonable accommodation to ensure equal opportunity. The distinction made by Clause 2.1.1 (a) and Clause (5) of Annexure X is facially equitable but, when applied to differently abled students, results in discrimination contrary to Article 14. Moreover, Clause 2.1.1 (a) does not apply because the petitioner is a resident of Vikas Puri, New Delhi. The exception clause cannot be invoked. The university has not demonstrated that any higher‑priority differently abled students were waiting for vacant rooms on 23 November 2022., The Supreme Court in Justice Sunanda Bhandare Foundation v. Union of India highlighted the expansive purpose of the 2016 Act to protect the rights of disabled persons. Section 5 of the Act guarantees the right of every person with disability to live in the community, which includes access to residential accommodation. Section 16(iii) obliges every educational institution funded or recognised by the appropriate Government to provide reasonable accommodation according to individual requirements. The definition of reasonable accommodation in Section 2(y) includes necessary modifications and adjustments to ensure equal enjoyment of rights, which encompasses provision of hostel facilities., The Supreme Court in Disabled Rights Group v. Union of India observed that society creates barriers that impede the capacities of persons with disabilities and that providing accessible facilities, including residential accommodation, is essential for full participation in education. Failure to provide such accommodation constitutes a breach of the Right of Persons with Disabilities Act., The university’s reliance on the petitioner’s residential address 21 kilometres away from the campus is irrelevant, as the Act requires reasonable accommodation irrespective of the existence of alternate accommodation., In Avni Prakash v. National Testing Agency, the Supreme Court held that the right to inclusive education is realised through the provision of reasonable accommodation.
|
id_1694
| 1
|
In Vikash Kumar, the Supreme Court of India emphasized that reasonable accommodation is at the heart of the principle of equality and non‑discrimination espoused under the Rights of Persons with Disabilities Act, 2016. The denial of reasonable accommodation to a Person with Disability amounts to discrimination., The Rights of Persons with Disabilities Act does not obligate any institution to do the impossible. Law always leans towards reasonableness. For example, if Jawaharlal Nehru University were to be flooded with differently abled students and the influx were such that it was unreasonable to expect the university to accommodate everyone, no law, including the Rights of Persons with Disabilities Act, would obligate the university to do so. However, the university would have to place empirical data on the table to make out a case of impossibility or impracticability of compliance with the mandate of the Act., The party contending that a particular accommodation will impose a disproportionate or undue burden has to prove the same, and such a justification must be based on objective criteria. Further, the Committee on the Convention on the Rights of Persons with Disabilities has held that an assessment of reasonable accommodation must be made in a thorough and objective manner, covering all pertinent elements, before concluding that the respective support and adaptation measures would constitute a disproportionate or undue burden for a State party. No empirical data whatsoever has been provided by Jawaharlal Nehru University to indicate that it would be unreasonable to expect the university to provide hostel accommodation to the petitioner. Sans any such data, the plea cannot sustain., The provisions of the Rights of Persons with Disabilities Act have overarching priority over all provisions of the Jawaharlal Nehru University Hostel Manual. Enforcement of the Hostel Manual can be lawful only if it is in sync with the mandate of the Act. Jawaharlal Nehru University must be acutely conscious of its obligations under the Act and the law that has developed in that regard while implementing the provisions of its Hostel Manual or while taking any other executive or administrative decision., The case of the petitioner squarely falls within Clause (3) in Annexure X to the Hostel Manual, which is a special dispensation for the differently abled. It provides that, irrespective of the category in which the student would otherwise fall—P‑I, P‑II or P‑III—if he is physically challenged, he is entitled ipso facto to hostel accommodation., It is significant that, while placing extensive reliance on Clause 2.1.1(a) and Clause (5) in Annexure X to oppose the petitioner’s prayer, Jawaharlal Nehru University has not advanced a single submission, either during oral arguments or in written submissions, regarding the applicability of Clause (3). In my view, Clause (3) supersedes Clause (5) by its very words, guaranteeing hostel accommodation to all differently abled students of Jawaharlal Nehru University, irrespective of the category in which they may fall. The title of Clause (3) is ‘Allotment of hostel facility to all Physically Handicapped category students.’ The petitioner is, without doubt, a Physically Handicapped category student, and the petition is therefore entitled to succeed on the basis of Clause (3)., The petitioner is, therefore, entitled, as of right, to hostel accommodation provided by Jawaharlal Nehru University within its campus, free of cost, with all other entitlements to which a differently abled student is entitled under the law and the policies of the university, until completion of his Master’s degree course in Sociology. Jawaharlal Nehru University is directed to provide, within a week from the pronouncement of this judgment, all such facilities to the petitioner. The petition therefore succeeds and is allowed.
|
id_1695
| 0
|
W.P.(C) 8136/2017 & W.P.(C) 8401/2017 Through: Mr. Prashant Bhushan, Senior Advocate with Ms. Neha Rathi and Ms. Kajal Giri, Advocates, versus Through: Mr. Ravi Prakash and Mr. Ali Khan, Advocates for Union of India. Ms. Charu Sharma for Mr. Aditya Singla, Senior Standing Counsel, Central Board of Indirect Taxes and Customs. Mr. Nikhil Goel, Senior Principal Pleader along with Ms. Siddhi Gupta, Advocate for Central Bureau of Investigation. Mr. Rajiv Nayar and Mr. Vikram Nankani, Senior Advocates with Mr. Mahesh Agarwal, Mr. Rishi Agarwal, Ms. Devika Mohan, Mr. Arshit Anand, Mr. Ankit Banati, Mr. Shraram Niranjan, Mr. Abhay Agnihotri, Mr. Tarini Khurana, Mr. Vikram Choudhary and Mr. Prabhav Bahuguna, Advocates for Adani Power Limited. Through: Mr. Sarim Naved, Mr. Saurabh Sagar and Mr. Harsh Kumar, Advocates., CM APPL.697/2024 in W.P.(C) 8136/2017 and CM APPL.689/2024 in W.P.(C) 8401/2017. The above two captioned applications have been filed by the applicant, Adani Power Limited, seeking recall of paragraph 52 of the judgment dated 19 December 2023., During the course of hearing, learned senior counsel appearing for the applicant, Adani Power Limited, placed on record a copy of orders passed by the Honourable Supreme Court in Civil Appeal (Diary No. 36519/2022) and Civil Appeal (Diary No. 71/2023) whereby the appeal filed by the Commissioner of Customs (Import) against Adani Power Maharashtra Power Limited was dismissed by order dated 27 March 2023. It has been brought to the notice of this Delhi High Court that against the aforesaid order dated 23 March 2023, the department has filed a review petition before the Honourable Supreme Court, which is pending adjudication. This factual position is not disputed by the other side., Relevantly, this Delhi High Court, vide judgment dated 19 December 2023, in paragraph 52 had passed a direction to the respondents to look into the allegations raised by the petitioner herein against the respondents, one of which is the present applicant, Adani Power Limited. In view of the fact that the review petition preferred by the department is sub judice before the Honourable Supreme Court, the directions passed by this Delhi High Court in paragraph 52 of the judgment dated 19 December 2023 in respect of Adani Power Maharashtra Limited and Adani Power Rajasthan Limited (now Adani Power Limited) are kept in abeyance awaiting the outcome of the said review petitions., In view of the aforesaid, the applications are disposed of., In view of the above order passed in Civil Miscellaneous Applications 697/2024 and 689/2024, the present applications have become infructuous.
|
id_1696
| 0
|
Date of decision: 14 February 2024. Appellant: Through Mr. Trideep Pais, Senior Advocate, with Mr. Mihir Samson, Ms. Asawari Sodhi, Ms. Gargi Sethi, Advocates. Versus: Through Mr. Shoaib Haider, Appellant. Mr. S. K. Manan, Senior Advocate, with Mr. Rahul Khan, Mr. Karmanya Singh Choudhary, Mr. Ritik, Mr. Lavish, Advocates for Respondent No. 2., The appeal has been filed under Section 14A(2) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 (hereinafter referred to as the SC & ST Act) by the alleged victim, challenging the order dated 01 April 2023 (hereinafter referred to as the Impugned Order) passed by the learned Additional Sessions Judge, South District, Saket Courts, New Delhi (hereinafter referred to as the Additional Sessions Judge) granting bail to Respondent No. 2 in FIR No. 0077/2022 registered with Police Station Hauz Khas, South District, Delhi, under Sections 376, 354B, 506 of the Indian Penal Code and Sections 3(1)(w)(i), 3(2)(v) of the SC & ST Act., The limited challenge of the appellant to the Impugned Order is that it was passed without serving notice of the bail application filed by Respondent No. 2 on the appellant/victim. The learned senior counsel for the appellant submits that the Impugned Order has therefore been passed in violation of Section 15A(3) and Section 15A(5) of the SC & ST Act. Relying on the judgment of the Supreme Court in Hariram Bhambhi v. Satyanarayan & Anr., 2021 SCC OnLine SC 1010, he submits that as Respondent No. 2 has been granted bail without serving notice of the bail application on the appellant and without giving her an opportunity of hearing, the Impugned Order is liable to be set aside on this limited ground. He submits that the appellant is not required to plead or show the grounds for cancellation of the bail., On the other hand, the learned senior counsel for Respondent No. 2 submits that, in the present case, the Additional Sessions Judge, after hearing the appellant as well, had enlarged Respondent No. 2 on bail vide its order dated 09 February 2022. Thereafter, a charge sheet was filed by Respondent No. 1 accusing Respondent No. 2 of offences under Sections 376, 354B, 506 of the Indian Penal Code. By a supplementary charge sheet, the prosecution alleged that Respondent No. 2 also committed offences under Section 3(1)(w)(i) and Section 3(2)(v) of the SC & ST Act., By an order dated 04 January 2023, the Additional Sessions Judge took cognizance of the offences under the Indian Penal Code and the SC & ST Act and summoned Respondent No. 2., On 23 February 2023, Respondent No. 2 appeared before the Additional Sessions Judge and submitted that since the offences under the SC & ST Act were later added by way of a supplementary charge sheet, he would move an application for grant of bail in respect of the said offences. The respondent filed such an application, on which, by an order dated 31 March 2023, the Additional Sessions Judge issued notice, including to the appellant, to be served through the Investigating Officer., On 01 April 2023, no one appeared for the appellant, and the Additional Sessions Judge, considering the facts of the case, granted bail to Respondent No. 2., He submits that therefore no fault can be found with the Impugned Order as notice on the application filed by Respondent No. 2 seeking bail had been issued by the Additional Sessions Judge to the appellant before passing the Impugned Order., I have considered the submissions made by the learned counsels for the parties., The Impugned Order does not reflect or even record the satisfaction of the Additional Sessions Judge that the notice issued by it vide order dated 31 March 2023 on the application of Respondent No. 2 seeking bail had been duly served on the appellant. A perusal of the Additional Sessions Judge record, summoned by the order dated 22 November 2023 of the Supreme Court of India, also does not show that the notice issued by the Additional Sessions Judge had been duly served on the appellant., The learned appellant is also not in a position to confirm if the notice on the bail application of Respondent No. 2 had been duly served on the appellant by the Investigating Officer., In view of the above, the Supreme Court of India has to proceed on the assumption that the notice issued on the application filed by Respondent No. 2 seeking bail had not been served on the appellant prior to the passing of the Impugned Order., Sub‑section (3) and sub‑section (5) of Section 15A of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act read as follows: 15A. Rights of victims and witnesses. (3) A victim or his dependent shall have the right to reasonable, accurate and timely notice of any Court proceeding including any bail proceeding and the Special Public Prosecutor or the State Government shall inform the victim about any proceedings under this Act. (5) A victim or his dependent shall be entitled to be heard at any proceeding under this Act in respect of bail, discharge, release, parole, conviction or sentence of an accused or any connected proceedings or arguments and file written submission on conviction, acquittal or sentencing., A reading of the above provisions shows that it is mandatory for the relevant court to issue a reasonable notice of any proceeding, including any bail application filed by the accused, to the victim. It further confers a right on the victim or the dependent of a victim to be heard at any proceeding under the Act, including in respect of an application seeking bail., In Hariram Bhambhi (supra), the Supreme Court, considering the above provisions, held: “When the High Court entertained S.B. Criminal Appeal No. 2518/2019 on 7 November 2019, no notice was given to the appellant. The High Court allowed the application for bail. When the appellant moved the High Court for cancellation of bail, the Single Judge took the view that compliance with the principles of natural justice at that particular stage would cure the deficiency. There has been a clear infraction of the mandate of the statute. Sub‑sections (3) and (5) have been introduced by Parliament to ensure a right to be heard to the person against whom the offence is committed or to the dependents. These provisions must be scrupulously observed. We cannot agree with the finding of the Single Judge that the defect in not issuing notice to the victim or their dependent and depriving them of the opportunity to be heard in the concerned proceedings (for grant of bail) can be cured by providing them a hearing in a proceeding that arose subsequently (for cancellation of bail). Compliance with the principles of natural justice must be observed at every stage under the mandate of the statute.”, “Atrocities against members of the Scheduled Castes and Scheduled Tribes are not a thing of the past. They continue to be a reality in our society even today. Hence the statutory provisions which have been enacted by Parliament as a measure of protecting the constitutional rights of persons belonging to the Scheduled Castes and Scheduled Tribes must be complied with and enforced conscientiously. There has been an evident breach of the statutory requirements embodied in sub‑sections (3) and (5) of Section 15A in the present case.”, “We also emphasize that sub‑section (3) of Section 15A provides that a reasonable and timely notice must be issued to the victim or their dependent. This would entail that the notice is served upon victims or their dependents at the first or earliest possible instance. If undue delay is caused in the issuance of notice, the victim, or as the case may be, their dependents, would remain uninformed of the progress made in the case and it would prejudice their rights to effectively oppose the defense of the accused. It would also ultimately delay the bail proceedings or the trial, affecting the rights of the accused as well.” (Emphasis supplied), “From the above, it is apparent that where there is an infraction of the mandate of sub‑section (3) and (5) of Section 15A of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, it cannot be cured by providing a hearing to the victim in a proceeding that arises subsequently, including one for cancellation of bail. Compliance with sub‑section (3) and (5) of Section 15A of the SC & ST Act is mandatory in nature and the bail granted in contravention thereof is liable to be set aside only on that ground.”, “In the present case, as observed above, the Impugned Order granting bail to Respondent No. 2 was passed by the Additional Sessions Judge without ensuring service of notice of the application filed by Respondent No. 2 seeking bail on the appellant and without giving an opportunity of hearing to the appellant. The Impugned Order dated 01 April 2023 granting bail to Respondent No. 2 is liable to be set aside. It is ordered accordingly.”, “The application seeking bail filed by Respondent No. 2 is restored back to the file of the Special Judge. The same shall be considered by the Special Judge after giving an opportunity of hearing to the appellant, who is the alleged victim.”, “In the meantime, Respondent No. 2 shall not be taken into custody for a period of 15 days from today, subject to the orders passed by the Special Judge on the application of Respondent No. 2.”, “I may clarify that the Supreme Court of India has not expressed any opinion on the merit of the order dated 01 April 2023 or otherwise.”, The appeal is allowed in the above terms.
|
id_1697
| 0
|
Sharayu & Kavita & Jitendra World Crest Advisors LLP Applicant/Plaintiff Versus Catalyst Trusteeship Limited & Ors. Defendants And J.C. Flowers Asset Reconstruction Private Limited Respondent (Proposed Defendant) Mr. Navroz Seervai, Senior Counsel, Ms. Gulnar Mistry, Mr. Manish Desai, Mr. Subit Chakrabarti, Ms. Shreni Shetty, Ms. Khushnumah Banerjee and Ms. Antara Kalambi i/by ANB Legal for the Applicant/Plaintiff. Mr. Indranil Deshmukh, Ms. Gathi Prakash, Ms. Nidhi Asher, Ms. Arushi Poddar i/by Cyril Amarchand Mangaldas for the Defendant Mr. Darius Khambata, Senior Counsel a/w Mr. Shyam Kapadia, Mr. Ammar Faizullabhoy, Mr. Indranil Deshmukh, Ms. Gathi Prakash, Ms. Nidhi Asher, Ms. Arushi Poddar i/by Cyril Amarchand Mangaldas for the Defendant Nos. 2 and 10. Mr. Zal Andhyarujina, Senior Counsel a/w Ms. Maithili Parikh, Ms. Tanya Mehta, Ms. Vaibhavi Bhalerao i/by DSK Legal for the Defendant No. 3. Mr. Sayeed Mulani a/w Ms. Shobhana Waghmare i/by Mulani & Co. for the Defendant Nos. 4 to 9., By this Interim Application, the Applicant/Plaintiff has sought an injunction restraining Defendant No. 2 – Yes Bank Limited (Yes Bank) and Defendant No. 10 – J.C. Flowers Asset Reconstruction Private Limited (JCF) from exercising rights including voting rights in respect of the suit shares. Further injunction is sought restraining Yes Bank Limited and JCF from transferring, alienating, creating any third‑party rights in respect of the suit shares. Consequential relief is sought by way of injunction restraining Defendant/Respondent Nos. 1 and 2 and Defendant/Respondent No. 10 JCF from interfering and/or seeking to participate in the management and affairs of Defendant/Respondent No. 3 by claiming rights under the suit shares., The Plaintiff is a holder of 952,100 (0.05%) shares of Defendant No. 3 – Dish TV India Limited (Dish TV) and pledgor of 44,00,54,852 shares of Dish TV. The Plaintiff is admittedly a part of the promoter group of Dish TV i.e. Jawahar Lal Goel Group., Defendant No. 1 – Catalyst Trusteeship Limited (Catalyst) is a pledgee and security trustee for the beneficial interest of Yes Bank Limited., Defendant No. 2 – Yes Bank Limited was the single largest shareholder of Dish TV, holding 25.63% shares (including 0.85% through IDBI Trusteeship Services Limited) till 21 December 2022, after which Yes Bank transferred its shareholding in Dish TV to JCF, pursuant to assignment of its stressed asset portfolio aggregating up to INR 48,000 crore (approximately) to JCF together with the underlying security created thereby., Defendant No. 3 – Dish TV India Limited (Dish TV) is a public limited company of which Jawahar Lal Goel (the brother of Subhash Chandra) is a former Managing Director of Dish TV, holder of 0.01% shares of Dish TV., Defendant Nos. 4 to 9 – Essel Group entities are collectively referred to as borrowers of Yes Bank Limited who had advanced loans to the borrowers amounting to INR 5,270 crore (the loan transaction). The Plaintiff had in turn pledged 44,00,54,852 shares of Dish TV for securing these loans., Defendant No. 10 – J.C. Flowers Asset Reconstruction Private Limited (JCF) is the company to which Yes Bank has assigned its stressed asset portfolio aggregating to INR 48,000 crore, including, as claimed by Yes Bank, the said loans advanced to the borrowers. JCF is presently the single largest shareholder of Dish TV with 25.63% shares held by itself, through IDBI Trusteeship Services Limited and through Yes Bank (in its capacity as the agent of IDBI Trusteeship Services Limited)., Between November 2015 and April 2018 Yes Bank advanced loans amounting to INR 5,270 crore to the borrowers (i.e. Defendant Nos. 4 to 9, PAN India Infraprojects Pvt. Ltd. and RPW Projects Pvt. Ltd.)., Catalyst was appointed as Yes Bank’s security trustee under various Security Trustee Agreements in respect of the loans during the period January 2018 to July 2018. One of the Security Trustee Agreements has been annexed as Exhibit A to the plaint. The Plaintiff is not a party to the Security Trustee Agreement and has no privity of contract with the parties thereto., The Plaintiff and Catalyst executed two pledge deeds dated 5 July 2018 and 6 May 2019 whereby the Plaintiff pledged a total of 44,00,54,852 shares of Dish TV in favour of Yes Bank as security for loans of INR 4,210 crore on those dates. The relevant clauses of the pledge deeds are as follows: (i) the Plaintiff pledged all of its rights (including voting rights and rights to control or direct the affairs of Dish TV) and interest in the suit shares to the pledgee (Clause 2.1(b)); (ii) during the currency of the pledge deeds and even prior to any default, the Plaintiff was required to vote on the suit shares in a manner that is not prejudicial to the interests/rights of the pledgee and/or Yes Bank (the lender) and not inconsistent with the transaction documents (Clauses 10.3(d) & 5(b)); (iii) upon default, the pledgee is entitled to exercise voting rights in relation to the suit shares to the exclusion of the Plaintiff (Clause 7.1(g)); (iv) upon default, the pledgee is entitled to enforce the security interest and take possession of or dispose of all or any part of the suit shares in any manner permitted by law and to cause all or any part of the suit shares to be transferred into its name or its nominees (Clause 7.1(a) and (c)); (v) the pledgee, under its powers of realization upon enforcement of security, is entitled to transfer or cause any of the suit shares to be transferred to and registered in the name of any of the pledgee’s successors, assigns or transferees (Clause 4.1(b)); (vi) the Plaintiff has undertaken not to stop or attempt to stop any transfer of suit shares in the name of the pledgee or its nominee (Clause 10.3(b)); (vii) Clauses 12(i) and (iii) of the pledge deed dated 5 July 2018 (identical to those of the pledge deed dated 6 May 2019) provide that each pledgor irrevocably appoints the pledgee as its attorney to do all acts and execute all documents which the pledgor could itself do in relation to any of the security assets, and that the pledgee shall have full power to delegate the powers, authorities and discretions conferred on it to any person on such terms and conditions as it shall see fit., On 25 January 2019 Subhash Chandra, in an open letter, stated that his recommendation to his brother Jawahar Goel to buy D2H from Videocon was a key error that cost both him and Jawahar Goel a fortune. In the letter, Subhash Chandra did not deny the debts owed to its various lenders, including Yes Bank., The Plaintiff, pursuant to the pledge deeds, executed powers of attorney dated 1 May 2019 and 6 May 2019 in favour of Catalyst with respect to the suit shares. These powers of attorney empowered Catalyst and/or its authorized representatives to (i) exercise all rights and privileges pertaining to the suit shares upon occurrence of a default; (ii) exercise voting rights in respect of the suit shares on the occurrence of a default; (iii) do any act to perfect and maintain the security created by the pledge deeds; and (iv) delegate such powers to any other person. The power of attorney dated 1 May 2019 is annexed to the pledge deed dated 5 July 2018., In July 2019 Yes Bank, through its security trustee Catalyst, invoked the pledges as per the provisions of the pledge deeds and retained the suit shares as collateral security under Section 176 of the Indian Contract Act, 1872. Notices of sale were issued to the borrowers under that provision. Catalyst stated that there was a default by the borrowers and payment of the entire overdue sum was sought within one day of the notice. Catalyst further stated that failing payment, the suit shares would either be sold or taken into Yes Bank’s own depository account without further notice., The Plaintiff addressed a letter dated 24 July 2019 to Catalyst acknowledging and admitting the creation of a pledge over 44,00,54,852 shares of Dish TV (the suit shares) in favour of Yes Bank., The then CEO and Managing Director of Yes Bank, Mr. Rana Kapoor, was arrested by the Enforcement Directorate on 8 March 2020 on allegations of large‑scale fraud by the top management of Yes Bank. The top management of Yes Bank was subsequently changed., On 13 March 2020 Yes Bank was reconstructed under a Central Government‑mandated scheme due to its significant exposure to non‑performing assets (NPAs). At that time the Essel Group’s total outstanding dues to Yes Bank were approximately INR 7,698 crore, of which INR 6,789 crore (90% of Yes Bank’s exposure to the Essel Group) was classified as NPAs by Yes Bank., On 29 May 2020 Catalyst transferred the suit shares of Dish TV into its own account, which the Plaintiff claims was done without intimation to them, while Catalyst claims it was done in accordance with the terms of the pledge deeds., A disclosure under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Code) was made on 1 June 2020 to the Securities and Exchange Board of India, on account of the fact that the suit shares are held in a listed company, namely Dish TV. The Reserve Bank of India was thereafter informed by Yes Bank on 2 June 2020 that there had been a transfer of the suit shares inter alia under the pledge deeds., Subhash Chandra, claiming to be the mentor of the Essel Group, filed a criminal complaint (the Subhash Chandra Complaint) against former officers and employees of Yes Bank with the Deputy Commissioner of Police, Crime Branch, Uttar Pradesh, alleging that the financial facilities advanced by Yes Bank were utilised to square off outstanding dues of a third‑party entity (Videocon), which was not part of the loan transaction secured by the pledge of the suit shares. The allegation was that the loan was routed through the borrowers for collateral purposes and to circumvent extant RBI regulations. In September 2020 PricewaterhouseCoopers was appointed to conduct a forensic audit of the said loan accounts. Subhash Chandra alleged that the borrowers had been induced and pressurised into availing the loans by Yes Bank, and that the loans were obtained by false promises., On 12 September 2020 the Subhash Chandra Complaint resulted in a First Information Report being registered at the Gautam Buddh Nagar Police Station, Greater Noida, Uttar Pradesh, against former officers of Yes Bank., In July 2020 Yes Bank proceeded to recall all loan facilities extended to the borrowers in accordance with the terms of the loan agreements and called upon the borrowers to repay the debt owed to Yes Bank. On 29 July 2020 Yes Bank called upon some of the borrowers to show cause as to why they should not be declared willful defaulters under the RBI’s Master Circular on Willful Defaulters (show cause notice)., Pursuant to the show cause notices issued by Yes Bank, the borrowers filed suits before the Saket District Court, New Delhi for quashing the notices. The borrowers relied upon Subhash Chandra’s criminal complaint dated 22 June 2021 and the FIR dated 12 September 2021. By an ex parte ad interim order dated 13 October 2020, the Saket District Court restrained Yes Bank from selling 44,53,48,990 shares of Dish TV. The order operated for over nine months, until the Saket Court proceedings were withdrawn on 3 August 2021 with the borrowers seeking liberty to file proceedings before the appropriate forum., On 26 April 2021 a One Time Settlement (OTS) proposal was furnished to Yes Bank by the Essel Group, acknowledging the legitimacy of the loans and the pledge deeds and stating that the funds had been utilised for the purpose for which the loan was sanctioned and there was no diversion of funds. The OTS was rejected by Yes Bank by letter dated 14 June 2021. The Essel Group, in a response dated 15 June 2021, again called upon Yes Bank to consider its settlement offer and copied the letter to officials of the Reserve Bank of India., Catalyst on 7 August 2021 transferred the suit shares in Dish TV to Yes Bank, which Yes Bank claims was in accordance with the terms of the pledge deeds. Relevant public disclosures were made by Yes Bank., On 12 August 2021 Dish TV issued a notice proposing to conduct its Annual General Meeting on 27 September 2021., On 21 September 2021 Yes Bank issued a notice under Section 100 of the Companies Act, 2013 formally requisitioning an Extraordinary General Meeting of Dish TV., Yes Bank filed a complaint on 24 September 2021 with the Economic Offences Wing, Mumbai, against the borrowers (Defendant Nos. 5, 7 to 9 as well as RPW Projects Private Limited, which is under liquidation, and PAN India Infraprojects Private Limited, which is under a moratorium and an application for insolvency is pending before the National Company Law Tribunal) under the RBI Master Directions on Frauds‑Classification and reporting by commercial banks, reporting fraud in the mis‑utilisation of loans of approximately INR 4,820 crore advanced to the borrowers (the EOW Complaint). The forensic audit concluded that out of total funds of INR 4,820 crore, an amount of INR 4,482.05 crore remained outstanding., The Plaintiff has stated that the EOW Complaint was included in a larger complaint made by Yes Bank to the Ministry of Corporate Affairs in November 2021. The Plaintiff received copies of the MCA complaint from Dish TV. Upon closer inspection, the Plaintiff found that the allegations in the EOW complaint were similar to the Subhash Chandra complaint on behalf of the borrowers in June 2020. In the EOW complaint, Yes Bank excluded amounts that were diverted to pay off the loan of a third party, namely the Videocon Group., It is necessary to note that the Economic Offences Wing, by letter dated 21 April 2022 addressed to Yes Bank, informed Yes Bank that Preliminary Enquiry No. 203 of 2021 dated 3 August 2021 was closed., On 5 November 2021 the Crime Branch, Gautam Buddh Nagar, issued notices under Section 102 of the Code of Criminal Procedure, 1973 to Yes Bank and National Securities Depository Limited in furtherance of the Subhash Chandra Complaint and ensuing FIR. Pursuant to the Section 102 notices, Yes Bank was restrained from dealing in or exercising its rights over 44,53,48,900 equity shares of Dish TV till the completion of the investigation on the Subhash Chandra Complaint or further orders., Yes Bank thereafter adopted proceedings, i.e., Company Petition No. 411 of 2021 filed on 22 November 2021, referred to as an Oppression and Mismanagement Petition, against Dish TV, its board of directors and its promoter group shareholders, including the Plaintiff, before the National Company Law Tribunal, Mumbai. Yes Bank referred to the EOW complaint in the company petition., Yes Bank also challenged the Section 102 notices before the Allahabad High Court in writ proceedings (Criminal Miscellaneous Writ Petition No. 11135 of 2021). By an order dated 25 November 2021, the Allahabad High Court dismissed the writ petition. Yes Bank filed a Special Leave Petition (Crl.) No. 9192 of 2021 before the Supreme Court. The Supreme Court stayed the operation of the Section 102 notices and stayed further proceedings in connection with the Subhash Chandra Complaint and the FIR. By a subsequent order dated 24 January 2023, the Supreme Court set aside the impugned order of 25 November 2021 of the Allahabad High Court and restored the proceedings before the Allahabad High Court for fresh disposal on merits. The Supreme Court directed that its interim order dated 30 November 2021 shall continue until the disposal of the writ proceedings., On 5 December 2021 Dish TV issued notice of its AGM held on 30 December 2021. On 8 December 2021 the Plaintiff addressed a letter to Dish TV stating that although the custody of the suit shares is with Yes Bank, the Plaintiff is entitled to exercise its voting rights as per extant laws and regulations since the suit shares continue to be part of the security package for Yes Bank, and requested Dish TV to facilitate the exercise of voting by the Plaintiff in the upcoming AGM., Dish TV, by letter dated 12 December 2021, stated that each shareholder would be entitled to vote on shares held in its custody/demat account at the AGM scheduled on 30 December 2021, and that it was not in a position to accede to the Plaintiff’s request., The unamended suit was filed by the Plaintiff challenging the transfer of the suit shares from Catalyst to Yes Bank and praying for declarations that the Plaintiff is the owner of the suit shares and is solely entitled to all rights thereunder; that the transfer of suit shares from Catalyst to Yes Bank is illegal, contrary to the Security Trustee Agreements and law and therefore void; and that the only right Catalyst has with respect to the suit shares is the right of sale of the suit shares., An amendment application, Interim Application (L) No. 5268 of 2022, was allowed by order dated 8 April 2022, adding prayers for a declaration that the pledge of suit shares by the Plaintiff, including the pledge contracts and the action by the defendants under such pledges, are all void, illegal and vitiated, and for damages against Catalyst and Yes Bank., Further amendment was sought and allowed by order dated 17 January 2023 passed in Interim Application No. 1512 of 2022. The Plaintiff, by the further amendment, added prayers for Yes Bank and JCF to restore the suit shares in favour of the Plaintiff and claim damages against JCF, apart from Catalyst and Yes Bank., The present Interim Application filed on 16 December 2021 was heard for ad interim relief by the Delhi High Court on 23 December 2021. The Court was not inclined to grant any ad interim relief and, upon request by the learned senior counsel for the Plaintiff, directed that the results/outcome of the AGM to be held on 30 December 2021 would abide by the decision in the Interim Application. The learned senior counsel for the Plaintiff stated that the Plaintiff is not challenging the rejection of ad interim reliefs by filing any appeal and hence the Court need not give any reasons. No reasons are recorded for rejection of the prayer for ad interim relief., On 30 December 2021 Dish TV held its 33rd Annual General Meeting. However, Dish TV did not declare, disclose and implement the results of its 33rd AGM. Instead it made a statutory disclosure that, to comply with the Delhi High Court’s direction dated 23 December 2021, Dish TV had requested the scrutinizer to place all information relating to e‑voting along with his report in a sealed cover and hand it over to the company secretary and compliance officer, who shall place the same before the Court for further directions. The scrutinizer confirmed that he submitted all information relating to e‑voting along with his report in a sealed cover. Dish TV moved a suitable application before the Court to place the same before the Court. The result of the 33rd AGM was finally declared on 8 March 2022., In a counter affidavit dated 25 January 2022 filed by Subhash Chandra in SLP (Cr.) 9192 of 2021, which challenged the order of the Allahabad High Court dated 25 November 2021, Subhash Chandra claimed that the whole transaction was shown to be a beneficial business transaction within the contours of law and, since the investigation under FIR No. 3 was underway, on 3 August 2021 the Essel entities, upon advice, withdrew the suit filed in the Saket District Court with liberty of the learned trial court. In the affidavit in reply filed by the borrowers (Defendant Nos. 4 to 9) in the captioned Interim Application, it was mentioned that the borrowers had recently become aware that the Chief Vigilance Officer of Yes Bank had made a complaint before the Economic Offences Wing. It was stated that if the FIR is investigated and found to be correct, it would vitiate the entire transaction including the pledge. The suit shares which form the subject matter of the present dispute are also directly linked with the commission of offence., The Plaintiff has claimed that, in view of the discovery that the consideration for the pledge and the objective of the loan transaction were illegal, fraudulent and therefore void ab initio under Section 23 of the Indian Contract Act, 1872, which the Plaintiff learned in February 2022 from the EOW complaint, correspondence was addressed on 16 February 2022 by the Plaintiff to Yes Bank to produce the annexures to the EOW complaint, in particular Annexure 11., The Plaintiff filed Interim Application (L) No. 4788 of 2022, seeking relief restraining Yes Bank from transferring and/or selling, acting upon, using and/or exercising any rights in respect of the suit shares. Further relief was sought restraining Catalyst and Yes Bank from exercising any rights including voting rights in respect of the suit shares and/or interfering and/or seeking to participate in the management of Dish TV. The Plaintiff’s interim application was disposed of on the same day of its filing, i.e., 17 February 2022, as infructuous upon the statement by the learned senior counsel for the Plaintiff that review of the order dated 23 December 2021 is sought and that he does not desire to press Interim Application (L) No. 4788 of 2022 at this stage., The Plaintiff filed Review Petition (L) No. 5303 of 2022 on 22 February 2022 in the present Interim Application seeking review of the order dated 23 December 2021. The review petition was disposed of, as withdrawn by subsequent order dated 17 January 2023, in view of the subject matter of the review being brought on record by way of amendment to the plaint, stating that the EOW complaint was suppressed by Yes Bank. This application was allowed by order dated 8 April 2022., The Plaintiff filed Interim Application (L) No. 13155 of 2022 seeking the disclosure and production of the annexures to the EOW complaint in furtherance to the notice to produce dated 16 February 2022., During the pendency of the proceedings, the Supreme Court delivered its judgment in PTC India Financial Services Ltd. v. Venkateswarlu Kari & Anr. (PTC India)., In May‑June 2022 Dish TV issued notice for an Extraordinary General Meeting to be held on 24 June 2022 inter alia for shareholders’ approval for reappointment of the managing director, whole‑time director and a non‑executive independent director of Defendant No. 3, made on 25 March 2022. The Plaintiff filed Interim Application (L) No. 17730 of 2022 seeking a restraint against Yes Bank from voting at the EGM., The Delhi High Court, after hearing the parties on 14 June 2022, 15 June 2022 and 16 August 2022, by order dated 17 June 2022 found that, inter alia, no prima facie case had been made out by the Plaintiff for grant of ad interim relief sought in Interim Application (L) No. 17730 of 2022., The Plaintiff filed Commercial Appeal (L) No. 19252 of 2022 against the order dated 17 June 2022 passed by the learned single judge in Interim Application (L) No. 17730 of 2022. The Plaintiff also filed Interim Application (L) No. 19253 of 2022 in the said commercial appeal, seeking that, pending hearing and final disposal of the suit, Catalyst and Yes Bank be restrained from participating in the EGM dated 24 June 2022 and/or exercising any rights including voting rights in respect of the suit shares at the said EGM, and that the Plaintiff be allowed to exercise its voting rights in respect of the suit shares at the said EGM., The Division Bench of the Delhi High Court, by judgment dated 23 June 2022, after examining the decision of the Supreme Court in PTC India, dismissed Commercial Appeal (L) No. 19252 of 2022., Dish TV held its EGM on 24 June 2022 and disclosed the results on the same day., The Special Leave Petition (Civil) No. 14796 of 2022 filed before the Supreme Court by the Plaintiff challenging the judgment dated 23 June 2022 in Commercial Appeal (L) No. 19252 of 2022 was dismissed by the Supreme Court by an order dated 12 September 2022. The Supreme Court clarified that the observations in the impugned order of the Delhi High Court were confined to whether the single judge was justified in declining to exercise discretion in an application for grant of ad interim relief., On 26 September 2022 Dish TV held its 34th AGM and disclosed the results on the same day., An assignment agreement was executed between Yes Bank and JCF on 16 December 2022 as per Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for transfer of the loans extended to the borrowers. Yes Bank, by the agreement, assigned its stressed asset portfolio aggregating up to INR 48,000 crore to JCF together with the underlying security created, therefore stated to be under the provisions of the SARFAESI Act.
|
id_1697
| 1
|
Pursuant to the Assignment Agreement, e‑mails were addressed by the Company Secretary of Yes Bank and representative of JCF on 20th December 2022 making disclosures as to the purported transfer., A letter dated 3rd January 2023 was addressed by JCF to the Plaintiff, intimating them of the purported transfer of all rights and interest in the financial asset pertaining to Essel Corporate Resources Private Limited together with security created thereto that is the pledge of Dish TV shares., By a second application for amendment filed by the Plaintiff, which was allowed by the High Court, JCF was impleaded as party to the present suit and interim application on 17th January., Dish TV held an extraordinary general meeting on 3rd March 2023 and disclosed results on the same day. It is necessary to note that had Dish TV taken into account the Plaintiff’s votes over the suit shares, presumably cast in favour of all proposed resolutions, the result would still have been the same i.e. all proposed resolutions would have been rejected by Dish TV’s shareholders., On 16th March 2023 Yes Bank and JCF tendered a closure report dated 21st April 2022 by which the Enforcement Officer Wing had closed its investigation into the complaint made by Yes Bank on account of the investigation being conducted in respect of the offence by the Gautam Buddha Nagar Police Station in Uttar Pradesh., Mr Navroz Seervai, learned Senior Counsel appearing for the Applicant Plaintiff, has submitted that though the suit shares were pledged by the Plaintiff as pledgor to Catalyst as pledgee, they have changed hands and though the rights thereunder were enjoyed by Yes Bank and JCF respectively, the value of the shares and their enjoyment have not been taken into account towards the reduction of Yes Bank’s loan exposure and the suit shares have not been sold to third parties. This has resulted in a situation where Yes Bank and now JCF have asserted that they are shareholders (members) of Dish TV in their own right, and not as pledgees, and have, to all intents and purposes, started running and managing Dish TV through the illegal exercise of voting rights at the company’s general meetings., Yes Bank has also asserted rights as a minority shareholder by filing proceedings before the National Company Law Tribunal under Sections 241 and 242 of the Companies Act, 2013 i.e. operation and mismanagement and under Section 98 of the Companies Act, 2013, invoking the jurisdiction of the National Company Law Tribunal to call an Extra Ordinary General Meeting of Dish TV. Yes Bank, purporting to act in the capacity of a shareholder of Dish TV, issued notice under Section 160 of the Companies Act, 2013 for appointment of directors. These actions belie the protestations of both Yes Bank and JCF that they are mere pledgees enforcing their right only in that capacity., Mr Seervai has submitted that contrary to statutory law and judicial pronouncements which hold that a pledgee has only a special interest in the pledged goods, Yes Bank has repeatedly sought to exercise rights of ownership, including voting rights in respect of the shares., Mr Seervai has submitted that prior to addressing the issue with regard to the pledgee having only a special interest in the pledged goods, and independent of the illegality of the conduct of Yes Bank and JCF in respect of the shares, the pledge is vitiated as fraud and thus, the pledge is void ab initio., Mr Seervai has submitted that a reading of the criminal complaints made by Yes Bank on the one hand and the borrowers on the other (through Subhash Chandra) reveals that both parties, namely the lender and borrower, entered into a transaction knowing that the stated purpose of the loans advanced by Yes Bank was not the real purpose. He has submitted that it is sufficient at the interim stage for the Plaintiff to make out a prima facie case in respect of the allegations of fraud. He has submitted that the documents on record make out a very strong, demonstrable prima facie case that justifies the grant of interim reliefs by the High Court pending the hearing and final disposal of the suit., He has submitted that while the ostensible purpose of the loans was to fund development projects undertaken by the borrowers, the real purpose was to reduce Yes Bank’s exposure in the Videocon account and resuscitate its loans. The real purpose, namely to circumvent applicable regulations of the Reserve Bank of India inter alia against evergreening of loans, was only achievable by routing monies through the borrowers. He has placed reliance upon the Subhash Chandra complaint filed on 22nd June 2020 with the Gautam Buddha Nagar Police Station in Uttar Pradesh and the Enforcement Officer Wing complaint of Yes Bank in this context., Mr Seervai has submitted that the Enforcement Officer Wing complaint revealed that the amounts received by Yes Bank for repayment of Yes Bank’s exposure in Videocon to the tune of Rs 1,474.19 crore were excluded from the alleged fraud amount. He has submitted that this does not erase the fraudulent nature of the transaction at inception. The fact that Yes Bank has shown an amount of Rs 1,474 crore as being excluded from the alleged fraud speaks eloquently of the fact that Yes Bank itself is an active party to the fraud, if not the party who conceived and instigated this fraudulent transaction., Mr Seervai has further submitted that though Yes Bank produced the Subhash Chandra complaint, it actively suppressed its own Enforcement Officer Wing complaint, which makes allegations that are in substance the same as the Subhash Chandra complaint. He has submitted that the suggestion of Yes Bank that it did not produce the Enforcement Officer Wing complaint because it did not think that it was material to the present case is to be rejected as an argument of desperation to cover up the active suppression of the Enforcement Officer Wing complaint., Mr Seervai has submitted that the Enforcement Officer Wing complaint encloses various annexures that contain detailed findings for individual borrowers and, in particular, Annexure 11, being detailed analysis of submissions made by the business team and risk team. He has submitted that the Plaintiff, despite efforts to obtain Annexure 11 of the Enforcement Officer Wing complaint from Yes Bank as well as by a notice to produce, finally a copy of Annexure 11 was tendered during oral arguments in rejoinder. He has submitted that Annexure 11 reveals that while Tranche I of the loan amounts were disbursed in 2016‑2017, further disbursements were approved on 29th December 2016 with an additional amount of Rs 2,510 crore being disbursed thereafter with full knowledge of the true nature of the transaction and its real purpose., He has submitted that from Clause 1.3.2 of Annexure 11, which is Disbursement of Funds, it is mentioned that in December 2016 and January 2017, Rs 1,700 crore were disbursed to three entities, out of which Rs 500 crore was to be used for reduction of Yes Bank exposure in Videocon. He has further relied upon Clause 1.2 of Annexure 11, which mentioned that Yes Bank expected the Videocon‑Essel merger deal to have a large cash component which would help reduce Yes Bank’s exposure in Videocon. Further, Clause 1.3.2 mentions that the said transaction was then approved on 29th December 2016., Mr Seervai has submitted that though the aforementioned clauses of Annexure 11 were referenced at great length in oral arguments urged by the Plaintiff in rejoinder, this was not dealt with at all by counsel for Yes Bank or JCF during surrejoinder., Mr Seervai has placed reliance upon the statement of objections filed by the State of Uttar Pradesh in SLP (Cr.) 9192 of 2021 before the Supreme Court of India, wherein they have stated that there are grounds to suspect that the entire transaction was structured by the former management of Yes Bank with a view to offload the debt owed by the financially stressed Videocon Group to Yes Bank, which debt was in danger of default, to the companies in the Essel Group, which had a much stronger credit history. The net effect of the transaction is that Yes Bank has illegally routed fresh funds to the Videocon entities in danger of default through the Essel Group with a view to bypass extant regulatory framework against evergreening of loans. The allegations in the complaint and FIR as well as the investigation so far lead to a legitimate suspicion that the borrower entities of Essel Group were induced to part with the shares in question in Dish TV in a manner that makes out the offences of, inter alia, cheating under Section 420 of the Indian Penal Code and criminal breach of trust by a banker under Section 409 of the Indian Penal Code., Mr Seervai has submitted that when faced with the said statement of objections, Yes Bank sought to contend that it is merely the opinion of the investigating officer and is not conclusive. He has submitted that it has never been the Plaintiff’s case that the statement of objections is conclusive evidence. However, it does, along with Annexure 11 of Yes Bank’s Enforcement Officer Wing complaint, make out an overwhelming prima facie case as to the fraud that vitiates the loan transaction., Mr Seervai has submitted that the loan transaction is vitiated by fraud under Sections 23 and 24 of the Indian Contract Act. He has submitted that Section 23 provides that the consideration or object of an agreement is lawful unless it is, amongst other things, forbidden by law, defeats the provisions of any law or is fraudulent. Under Section 24, if the consideration for one or more objects is unlawful, the agreement is void. He has submitted that in the present case, the loan transaction is void, being for an unlawful object and consideration, namely the circumvention of applicable law on evergreening and the commission of offences under criminal laws., Mr Seervai has submitted that the consideration for the pledge deed is the loans extended by Yes Bank to the borrowers. In view of the fact that the loan transaction is for an unlawful object and consideration and routed in a manner that constitutes a criminal offence under penal statutes, it is ex facie vitiated by fraud; the secondary or collateral transaction, being the pledge of shares, is also vitiated by fraud and void ab initio., Mr Seervai has placed reliance upon the English case of Lazarus Estates Ltd. v. Beasley. The Court of Appeal considered a case arising out of justification of increase in rent under the Housing Repairs and Rents Act. A 28‑day period was contemplated by law to challenge such declaration. The tenant did not challenge it within this period, but also did not pay the increased rent. The landlord contended that once the statutory period had passed, a civil court could not venture into the question of fraud at all. The Court held that if this argument were correct, landlords would profit greatly from their fraud. The increase in rent would pay the fine many times over. No court will allow a person to keep an advantage which he has obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all transactions whatsoever., Mr Seervai has submitted that it was only upon a consolidated reading of the Subhash Chandra complaint and Yes Bank’s Enforcement Officer Wing complaint that the complete illegality of the transaction at inception becomes apparent and demonstrable., Mr Seervai has placed reliance upon the decision of the Supreme Court of India in Ramesh B. Desai & Ors. v. Bipin Vadilal Mehta, wherein it is held that Order VI Rule 4 of the Code of Civil Procedure, 1908 requires that complete particulars of fraud be pleaded, and these particulars will depend on the facts of a given case. Where a transaction takes place in circumstances where a third party may not have knowledge of the transaction unless informed by a party in the know, an assertion by such third party stating that they came to know about it subsequently cannot be said to be an insufficient pleading. He has submitted that in the present case, by the second amendment to the plaint, based as it is on the Subhash Chandra complaint and the Enforcement Officer Wing complaint, sufficient particulars of the fraud are pleaded., Mr Seervai has thereafter referred to Section 65 of the Indian Contract Act, which provides that where a contract is discovered to be void or becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it. He has submitted that Yes Bank has acquired a pledge of the shares and derived a benefit under the deeds of pledge that have subsequently been discovered to be void. Consequently, the Plaintiff is entitled to restitution of the shares from Yes Bank and its successor in interest, JCF. These shares are required to be protected by an interim injunction from further transfers or sales pending the hearing and final disposal of the suit., Mr Seervai has submitted that where a document is void ab initio and not voidable, arguments as to prior knowledge or waiver or election are irrelevant and are arguments of desperation. The agreement is treated as a matter of law as though it never existed, being void ab initio, i.e. at the inception. In the present case, the Plaintiff never had knowledge of the Enforcement Officer Wing complaint beforehand and hence, the question of election does not arise., Mr Seervai has thereafter addressed the issue of the nature of a pledge and rights or interest of a pledgee. He has submitted that assuming arguendo that the pledge deeds are valid and enforceable, the law of pledge (both under statutory provisions and case law) does not contemplate the rights sought to be exercised by Yes Bank and JCF, namely the entire gamut of ownership rights including voting rights in the case of dematerialised shares., Mr Seervai has submitted that the provisions of the Indian Contract Act apply to a pledge of goods, including securities such as shares. A pledge is a type of bailment, defined under Section 148 of the Indian Contract Act as the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them., Mr Seervai has referred to Section 172 of the Indian Contract Act, which defines pledge as constituting a particular species of bailment, namely the bailment of goods as security for payment of a debt or performance of a promise. The bailor in the case of a pledge is called the pawnor and the bailee the pawnee. He has submitted that the law applicable to pledges is codified under Sections 172 to 180 of the Indian Contract Act. He has further submitted that the general provisions pertaining to bailment of goods under Sections 149 to 171 do not apply to a pledge, which is a bailment for a particular purpose i.e. to stand security for payment of a debt or performance of a promise., Mr Seervai has submitted that the provisions pertaining to pledge provide statutorily for limited rights that a pledgee or pawnee derives. In that context, he has referred to Section 176 which provides the right of a pawnee or pledgee in whose favour a pledge is created. In the case of a debt, if the pawnor or pledgor defaults in payment of the debt in respect of which the goods were pledged, the pledgee may bring suit against the pledgor upon the debt and retain the goods pledged as collateral security or he may sell the pledged goods upon giving the pledgor reasonable notice of sale. Should the proceeds of the sale be less than the amount due, the pledgor is liable to pay the balance; if the proceeds exceed the amount due, the pledgee is to pay over the surplus to the pledgor., Mr Seervai has submitted that it is well settled that a pledge creates a species of special property, more accurately termed special interest, in the pledged goods, which allows the pledgee recourse to the security, even while the ownership of the pledged goods continues to vest in the pledgor. A pledge does not envisage or contemplate the enjoyment by the pledgee of the general property in the pledged goods; the indicia of ownership and the power to exercise proprietary rights remains at all times throughout the period of the pledge with the pledgor., Mr Seervai has relied upon the decision of the Supreme Court of India in Lallan Prasad v. Rahmat Ali & Anr., wherein the Supreme Court held that a pawnee has only a special property in the pledge but the general property therein remains in the pawnor and wholly reverts to him on discharge of the debt. The right to property vests in the pledgee only so far as is necessary to secure the debt. In this sense a pawn or pledge is an intermediate between a simple lien and a mortgage which wholly passes the property in the thing conveyed., Mr Seervai has also relied upon Balkrishna Gupta v. Swadeshi Polytex Ltd., wherein the Supreme Court referenced an earlier decision viz. Bank of Bihar v. State of Bihar. The Court found that in Bank of Bihar, it was held that a pawnee had a special property which was not of ordinary nature on the goods pledged and so long as his claim was not satisfied no other creditor of the pawnor had any right to take away the goods or its price. Beyond this no other right was recognized in a pawnee in the above decision., Mr Seervai has also relied upon the decision of the Division Bench of this Court in Official Assignee of Bombay v. Madholal Sindhu, which held that it is open to parties to incorporate into any contract any incident which is not contrary to or inconsistent with any provision contained in the Act. But they can only override a specific provision contained in the Act provided the particular section dealing with the provision contains a saving clause in respect of special contracts to the contrary. There is no such saving clause in Section 176, and in my opinion its provisions are mandatory, and it is not open to the parties to contract themselves out of those provisions., Mr Seervai has submitted that the grant of ownership rights would be clearly inconsistent with the rights contemplated under Section 176 of the Indian Contract Act, which is to sue whilst retain the shares or to sell and recoup the monies loaned., Mr Seervai has submitted that this position of law continues even after the enactment of the Depositories Act, 1996. He has submitted that prior to the enactment of the Depositories Act, a pledge of shares held in physical form was created by depositing the shares and signed blank transfer forms in the custody of the pledgee to allow the pledgee to effectuate their sale upon invocation. After the introduction of dematerialised holding of shares in fungible form, the provisions of the Depositories Act read with the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 prescribe requirements for the creation of a pledge of dematerialised shares. He has submitted that under the Depositories Act and the DP Regulations, an owner of physical shares enters into an agreement with the depository to hold shares in a fungible form; the depository then becomes the registered owner while the owner of shares is the beneficial owner. Section 12 of the Depositories Act mandates that a beneficial owner who creates a pledge must provide intimation of such pledge to the depository, which is then required to make entries in the records accordingly. He has then referred to Regulation 79 of the DP Regulations (in pari materia with the erstwhile Regulation 58 of the 1996 Regulations) which provides a mechanism for effectuating a pledge, including the requirement that upon invocation the depository shall register the pledgee as the beneficial owner of such securities and amend its records accordingly. He has submitted that under the Depositories Act and DP Regulations, a pledgee cannot transfer the pledged shares held in dematerialised form without being reflected as the beneficial owner in the records of the depository., Mr Seervai has submitted that when a pledge is invoked, the pledgee is transposed as the beneficial owner for the limited and sole purpose of effectuating a prospective sale upon the invocation of the pledge. Neither the Depositories Act nor the DP Regulations envisage or contemplate the exercise of proprietary rights by a pledgee upon invocation of a pledge, since the recording as owner is only for the purpose of effecting the sale. Furthermore, the provisions of the Depositories Act are not contrary to or in derogation of the law that applies to pledge transactions under Sections 172 to 180 of the Indian Contract Act., Mr Seervai has thereafter dealt extensively with the decision of the Supreme Court of India in PTC India Ltd. v. Nagapatnam Power and Infratech Limited. He has submitted that in PTC India’s case the Supreme Court considered the effect of the Depositories Act and the SEBI (Depositories and Participants) Regulations, 1996 on a pledge of dematerialised shares made under the Act. He has referred to the facts where the loan was extended by PTC India in favour of Nagapatnam Power and Infratech Limited to secure the loan, a pledge was created by Mandava Holdings Pvt. Ltd. in favour of PTC India. NSL defaulted on the loan, resulting in the invocation of pledge by PTC India. Insolvency proceedings in respect of NSL were instituted before the National Company Law Tribunal, Hyderabad and an interim resolution professional was appointed. MHL made a claim before the IRP stating that as PTC India was conferred the status of a beneficial owner MHL no longer had any title over the pledged shares and had accordingly stepped into PTC India’s shoes as a creditor of NSL. PTC India, in turn, made a claim for the amount due and payable by NSL without accounting for the pledged shares. Both claims were rejected, and the decision was challenged before the Adjudicating Authority. The Adjudicating Authority thereafter disposed of the challenge, accepting MHL’s claim. The Adjudicating Authority’s decision was challenged before the National Company Law Appellate Tribunal, New Delhi. The NCLAT disposed of the appeal finding that PTC India had exercised rights under the pledge deed and had consequently become the owner of the pledged shares, notwithstanding the fact that PTC India had not sold the shares. It was held that PTC India could realise its dues and could not rely upon Section 176 of the Indian Contract Act to reclaim the debt. In an appeal filed by PTC India against the NCLAT’s order, the Supreme Court of India overruled the decision of the NCLAT finding that PTC India had rightly made a claim as a financial creditor. The Supreme Court also definitively laid down the law on the interplay of the provisions of the Contract Act and the Depositories Act and DP Regulations in a pledge of dematerialised shares, finding that the two statutes are to be construed harmoniously. The Supreme Court was also at pains to distinguish between a pledge and a mortgage, clearly delineating the legal incidents of each., Mr Seervai, for the purpose of distinguishing a pledge and a mortgage, relied upon PTC India. The Supreme Court in PTC India relied upon the distinction between mortgage and pledge enunciated in Halsbury’s Laws of England, which is that the mortgage conveys the whole legal interest in the chattels; whereas the pledge or pawn conveys only a special property, leaving the general property in the pledgor or pawnor; the pledgee or pawnee never has the absolute ownership of the goods but has a special property in them coupled with a power of selling and transferring them to a purchaser on default., The Supreme Court in PTC India has held that unlike a pledgee, a mortgagee acquires general rights in the thing mortgaged subject to the right of redemption of the mortgagor., Mr Seervai has submitted that the Supreme Court in PTC India has held that the pledgee has merely a special interest in the pledged goods and never at any time holds an absolute interest in the property pledged., Mr Seervai has submitted that the arguments urged by Yes Bank and JCF to the contrary obliterate the distinction between a pledge and a mortgage, treating the two as virtually interchangeable, but nevertheless seeking to take the benefit of the procedure set out under the Depositories Act, which is applied solely to pledges., Mr Seervai has thereafter referred to the decisions which have also drawn distinction between a pledge and mortgage namely Md. Sultan v. Firm Rampratap Kannayalal, Shatzadi Begum v. Girdharilal, Maharashtra State Co‑op Bank v. Assistant Provident Fund Commissioner and The Odessa. He has submitted that in Shatzadi Begum, the judgment in The Odessa was cited with approval, stating that the latter emphasized the notion that enjoyment is excluded from the concept of pledge and if something more than mere possession of shares is given to the creditor it ceases to be a pledge., Mr Seervai has submitted that a pledgee as beneficial owner cannot assert rights as a shareholder. If a transaction is to retain the character of a pledge one cannot include within it contractual clauses that take it outside the ambit of a pledge. A pledgee’s right extends solely to possession and sale upon notice, and not to the right to disposition in full as a concomitant of ownership rights., Mr Seervai has submitted that the pledge deeds are void inasmuch as they contain provisions such as clauses 7.1(g), 10.3(d), 12(i) and 12(iii) that travel beyond the contours of the law of pledge. It has been submitted, if these clauses are valid and the pledge deed enforceable, the transaction is in substance a mortgage and recourse cannot be as per the provisions of the contractual law of pledge and the Depositories Act to enforce the transaction., Mr Seervai has thereafter made submissions with regard to the transfer of the pledged shares to JCF. He has submitted that it is the case of JCF that its entitlement to exercise rights as a pledgee was premised solely on the provisions of Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and the judgment in UV Asset Reconstruction Company Ltd. v. Union of India & Ors., Mr Seervai has submitted that the case of JCF was sought to be bettered only in sur‑rejoinder by referring to clauses of the Assignment Agreement. The disclosures made by JCF to the Securities and Exchange Board of India expressly refer to the transfer of invoked equity shares from Dish TV under Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. He has submitted that the arguments in sur‑rejoinder premised on the pledge deeds are no more than an afterthought., Mr Seervai has submitted that under Clause 2.1.2 of the Assignment Agreement dated 16th December 2022 executed between Yes Bank and JCF, the assignee, viz. JCF, has a right to enforce such security interests, pledges and to exercise all other rights in relation to such security interests, pledges under the applicable laws.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.