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MANU/DE/1587/2009

IN THE HIGH COURT OF DELHI

IA No. 5495/2008 in CS (OS) No. 851/2008

Decided On: 24.07.2009

Appellants: Novartis AG
Vs.
Respondent: Crest Pharma Pvt. Ltd. and Anr.

Hon'ble Judges:
Manmohan Singh, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Pravin Anand, Binny Kalra and Vaishali Kakra, Advs.

For Respondents/Defendant: Manish Kumar Jha, Adv. for D-1 and Shashi Shanker, Adv.
for D-2

Subject: Intellectual Property Rights

Subject: Civil

Catch Words

Mentioned IN

Acts/Rules/Orders:
Civil Procedure Code (CPC) - Sections 20 and 151 - Order 7, Rule 11 - Order 39, Rules 1
and 2

Cases Referred:
Corn Products Refining Co. v. Shangrila Food Products Ltd. AIR 1960 SC 142;
Amritdhara Pharmacy v. Satyadev Gupta AIR 1963 449; Remidex Pharma Pvt. Ltd. v.
Sarita Pharmaceuticals 2006(33) PTC 157; Sun Pharmaceuticals Industries Ltd. v. Wyeth
Holdings Corporation and Anr. 2005(3) PTC 14; Pifzer Ireland Pharmaceuticals v. Intas
Pharmaceuticals and Anr. 2004 (28) PTC 456 (Del); Sanat Products Ltd v. Glade Drugs
& Nutracenticals Pvt. Ltd. and Anr. 2003 (27) PTC 525 (Del); Medley Laboratories Pvt.
Ltd. Mumbai and Anr. v. Alkem Laboratories Ltd. 2002 (25) PTC 592 (Bom); Smithkline
Pharma (India) Ltd. and Ors. v. Prakash Setia and Ors. 2002 (25) PTC 482 (Del); Ciba
Geigy Ltd. v. Crosslands Research Laboratories Ltd. 1996 PTC (16) Del; Anglo French
Drug Co. (Eastern) (Bombay) v. Belco Pharmaceuticals (Haryana) PTC (Suppl.) (2) 452
(P&H); Cadila Healthcare Ltd. v. Cadila Pharmaceuticals (2001) 5 SCC 73; Glenwood
Laboratories, Inc. v. American Home Products Corporation 173 USPQ 19(1972) 455 F.
Reports 2d, 1384 (1972); Century Traders v. Roshan Lal Duggar & Co. AIR 1978 (Del)
250; Laxmikant V. Patel v. Chetanbhat Shah and Anr. (2002) 3 SCC 65; Blansett
Pharmaceuticals Co. v. Carmick Laboratories Inc. 25 USPQ 2nd, 1473 (TTAB 1993);
Cole Chemical Co. v. Cole Laboratories D.C. Mo. 1954, 118F. Supp. 612; R.J.
Strasenburgh Co. v. Kenwood Laboratories Inc. 1955, 106 USPQ 379; Lambert
Pharmacol Ltd. v. Bolton Chemical Corporation DCNY 1915, 219 F. 325; Ranbaxy
Laboratories Ltd. v. Dua Pharmaceuticals Pvt. Ltd. AIR 1989 Delhi 44; Kaviraj Pandit
Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories AIR 1965 SC 980; Pankaj
Goel v. Dabur India Ltd. 2008 (38) PTC 49 (Del; LG Corporation and Anr. v.
Intermarket Electroplasters (P) Ltd. and Anr. 2006 (32) PTC 429; Tata Iron & Steel Co.
Ltd. v. Mahavir Steels and Ors. 47 (1992) DLT 412; Ramdev Food Products Pvt. Ltd. v.
Arvindbhai Rambhai Patel and Ors. 2006(33) PTC 281 (SC); Colgate Palmolive
Company and Anr. v. Anchor Health and Beauty Care Pvt. Ltd. 2003 (27) PTC 478 (Del)

JUDGMENT

Manmohan Singh, J.

1. By this order I shall dispose of this application being IA No. 5495/2008 under Order
XXXIX Rules 1 & 2 read with Section 151 CPC.

2. The facts of the case are that the plaintiff has filed a suit for permanent injunction
restraining passing of, damages and delivery up etc.

Plaintiff's case

3. The plaintiff is manufacturing and selling pharmaceutical specialities and is in the


business for the past 100 years. The plaintiff is the proprietor of the trademark SECEF., a
medicinal formulation containing cefisime which is sold by the plaintiff in capsule and
suspension form.

4. The trade mark SECEF, as per the plaintiff, was adopted in the year 1998 and is a
coined word and is a distinctive trade mark. The said trade mark, according to the
plaintiff, was available in many countries since late 1980s and early 1990s and in India
since May 2002. There was also a discussion in various pharmaceutical well known trade
journals in the year 1988.

5. The plaintiff's application for registration of the said trade mark is pending in India
under No. 1494475 in class 5 dated 9th October, 2002. The plaintiff's earlier application
bearing No. 814621 in class 5 was abandoned by it otherwise the trade mark was
registered in 53 countries of the world.
6. As per the plaintiff, the trade mark SECEF has been continuously and extensively used
in India since May 2002 and has registered total sale of 20.7 crores till date. The plaintiff
has alleged in the plaint that the trademark SECEF has earned substantial reputation and
goodwill and is associated with the goods of the plaintiff and has acquired valuable
common law rights.

7. In February, 2007 through its representative the plaintiff came across the product
bearing the mark CECEF which is also a cefixime preparation meant for same indication
as that of the plaintiff.

8. On enquiry, the plaintiff came to know that defendant No. 1 is using the said trade
mark. The products packaging revealed that it was being manufactured by defendant No.
2. The search report also revealed that defendant No. 1 had applied for registration of the
trade mark under No. 1452902 in class 5.

9. The plaintiff thereafter sent seize and desist letter dated 25th April, 2007. However,
due to oversight, the plaintiff dispatched the said letter only on 18th August, 2007. The
said letter was returned undelivered with the postal remark "left returned to sender". On
further investigation, the address of defendant No. 1 and 2 was found and notices were
reissued to three addresses on 22nd September, 2007. However, no response was
received from any of the addresses.

10. The plaintiff thereafter issued the reminder on 8th November, 2007 offering an
amicable resolution of the matter and in exchange the defendant No. 1 would withdraw
his trade mark application bearing No. 1452902 in class 5. The plaintiff thereafter
received a reply in November, 2007 whereby the defendant No. 1 informed the plaintiff
that they have taken steps to withdraw their trade mark application and attached the letter
addressed to the trade mark office for withdrawing the said application.

11. The plaintiff dispatched the said letter to the trade mark registry in the hope that it
would conclude the matter and enable an amicable settlement and the defendants would
cease to use the trade mark CECEF.

12. The plaintiff for the purpose of his satisfaction sent another letter dated 4th
December, 2007 for the said clarification coupled with the final notice to the defendants
on 12th February, 2008 for confirmation regarding the cease of the goods under the
trademark CECEF altogether. In spite of the various letters the defendants did not give
any reply and, therefore, the present suit has been filed by the plaintiff.

13. The contention of the plaintiff is that the two trade marks SECEF and CECEF are
visually, structurally and phenotically similar and are also prescribed for the identical
indications and the use of the said trade mark CECEF by the plaintiff is unauthorized and
unlicensed, therefore, the consumers, chemists and doctors are bound to be misled or
deceived in believing these two products originating or approved by or connected with
the plaintiff in some way even though the medicine in question is a Schedule H drug.
14. Lastly, it is alleged by the plaintiff that the defendants. adoption of the trademark
CECEF is deliberate with a view to rake the business and earn illegal profits from the
reputation and goodwill which is created by the plaintiff in respect of its trade mark
SECEF and it is a classic case of passing off where the defendants are passing of their
goods as that of the plaintiff.

15. The suit along with the interim application was listed on 6th May, 2008 when this
Court issued summons in the suit and notices in the interim application. An ex parte ad
interim injunction was also issued in favour of the plaintiff restraining the defendants
from manufacturing, selling or dealing with the product under the trade mark CECEF or
any other trade mark which is deceptively similar with the trade mark of the plaintiff.

16. The defendants filed the written statement as well as the reply to the interim
application.

Defendants' case

17. The defendants have, interalia, raised the following defences and prayed for vacation
of the ex parte ad interim injunction:

(i) there is no resemblance or similarity between the two trade marks of the parties i.e.
SECEF and CECEF. The trade mark of the defendant CECEF is visually, structurally and
phonetically different.

(ii) the plaintiff's product is prescribed for urinary respiratory trace infection and acute
ottis ...whereas the defendants. product is anti-biotic and is prescribed mostly for post
operation basis. The ingredients of both the products are also different. The plaintiff's
product is available in tablet and oral suspension whereas the defendants. product is
available in injection form.

(iii) there is no confusion as the product of the defendants being schedule "H" drug can
only be sold in retail on prescription by Registered Medical Practitioner. The medical
practitioner or the doctor being educated will never get confused as to the source of the
two products as their use and structure is totally different.

(iv) this Court does not have the territorial jurisdiction to try or entertain the present suit
as none of the defendants actually and voluntarily reside or carry on business or
professionally work for gain within the local limits of this Court. The defendants have not
sold its product within the territorial jurisdiction of this Court, therefore, the plaintiff has
no right to invoke the jurisdiction of this Court and the plaint is liable to be rejected under
the provisions of Order 7 Rule 11 CPC.

(v) the plaintiff has not approached this Court with clean hands and has knowingly made
several false and misleading statements as the defendants had filed the application six
months prior to the application for registration of the trade mark by the plaintiff.
(vi) the plaintiff has also failed to prove the element of deceit and in the absence of the
same, the suit is liable to be dismissed.

(vii) there are number of other companies who are using the similar trade mark as that of
the plaintiff such as CEFF, SIMCEF, CEF, BECEF, SYCEF, CEACEF, SYCEF, SICEF
and C-CEF.

(viii) the suffix is used on several products of the same nature by the parties other than
the defendants even prior to its use by the plaintiff. Hence, no case of passing off can be
made out.

(ix) the plaintiff is also not entitled for any relief as there is acquiescence and delay on
the part of the plaintiff as the plaintiff has admitted that it came to know about the goods
of the defendants in February, 2007 itself but the plaintiff chose to file the present suit in
the month of May, 2008.

18. I have heard learned Counsel for the parties and have gone through the pleadings and
documents on record.

19. Now I shall deal with the first contention raised by learned Counsel for the defendant
that there is no resemblance or similarity between the two trade marks in question i.e.
SECEF and CECEF. Learned Counsel for the plaintiff has referred to various decisions
contrary to the contention raised by the learned Counsel for the defendants. The said
decisions are:

(a) MANU/SC/0115/1959 : AIR 1960 SC 142 Corn Products Refining Co. v. Shangrila
Food Products Ltd. the Apex court has held that the trademark Gluvita and Glucovita are
deceptively similar.

(b) MANU/SC/0256/1962 : AIR 1963 sc 449 Amritdhara Pharmacy v. Satyadev Gupta


the Apex court has held that the trade mark Amritdhara and Laxmandhara are closely
similar to each other.

(c) 2006(33) PTC 157 Remidex Pharma Pvt. Ltd. v. Sarita Pharmaceuticals where the
marks ZEVIT and EVIT are held to be deceptively similar and the court granted the
injunction in favour of the plaintiff.

(d) 2005(3) PTC 14 Sun Pharmaceuticals Industries Ltd v. Wyeth Holdings Corporation
and Anr. where the marks Parkitane and Pacitane were held to be deceptively similar.

(e) MANU/DE/0196/2004 : 2004 (28) PTC 456 (Del) Pifzer Ireland Pharmaceuticals v.
Intas Pharmaceuticals and Anr. where the marks Lipitor and Lipicor were held to be
deceptively similar.
(f) MANU/DE/1171/2003 : 2003 (27) PTC 525 (Del) Sanat Products Ltd v. Glade Drugs
& Nutracenticals Pvt Ltd and Anr. where the marks Reform and Refirm were held to be
deceptively similar.

(g) 2002 (25) PTC 592 (Bom) (DB) Medley Laboratories Pvt Ltd, Mumbai and Anr. v.
Alkem Laboratories Ltd where the marks Spoxin and Supaxin were held to be
deceptively similar.

(h) 2002 (25) PTC 482 (Del) Smithkline Pharma (India)Ltd and Ors. v. Prakash Setia and
Ors. where the marks Alben and Aben were held to be deceptively similar.

(i) 1996 PTC (16) Del, Ciba Geigy Ltd v. Crosslands Research Laboratories Ltd where
the marks Voltaren and Volta-K where held to be deceptively similar.

(j) (Supp.) (2) PTC 452 (P&H) (DB) Anglo French Drug Co. (Eastern) (Bombay) v.
Belco Pharmaceuticals (Haryana) where the marks Beplex and Belplex were held to be
deceptively similar.

20. One important factor in the present case is that the said marks used by the parties
have been shown in English language and the defendant has used the first letter "C" in
place of "S" of the plaintiff. The rest of the mark is the same as that of the plaintiff. It
cannot be denied that if both the marks are written and read in other languages, then both
the marks are identical. Therefore, the contention of the defendant cannot be accepted
that the two trade marks are dissimilar.

21. The second contention of the defendant is that the plaintiff's drug is prescribed for
urinary respiratory track infection and acute otitis media whereas the defendant's product
being an antibiotic is prescribed mostly for post operative cases and the ingredients of the
two products are also different and used for different purposes of disease. The defendant
has also contended that the plaintiff's product is used in tablet and oral suspension form
whereas the defendant's product is only available in injection form, therefore, there is no
confusion and deception between the two products in question.

22. I do not accept the submission of the learned Counsel for the defendant as I feel that it
is more dangerous if the pharmaceuticals products bearing the same mark is used for
different purposes for the same ailment or even otherwise. I also do not accept the
contention of the defendant's counsel that there would be no confusion if the product
contain different ingredients/different salt. In my opinion, it is more dangerous and
harmful in the trade if the same trade mark is used for different ailments. The Apex court
has already dealt with this proposition of law in the case of Cadila Healthcare Ltd. v.
Cadila Pharmaceuticals, MANU/SC/0199/2001 : (2001) 5 SCC 73 and held as under:

25. The drugs have a marked difference in the compositions with completely different
side effects, the test should be applied strictly as the possibility of harm resulting from
any kind of confusion by the consumer can have unpleasant if not disastrous results. The
courts need to be particularly vigilant where the defendant's drug, of which passing off is
alleged, is meant for curing the same ailment as the plaintiff's medicine but the
compositions are different. The confusion is more likely in such cases and the incorrect
intake of medicine may even result in loss of life or other serious health problems. In this
regard, reference may usefully be made to the case of Glenwood Laboratories, Inc. v.
American Home Products Corp. 173 USPQ 19(1972) 455 F.Reports 2d, 1384(1972),
where it was held as under:

The products of the parties are medicinal and applicant's product is contraindicated for
the disease for which opposer's product is indicated. It is apparent that confusion or
mistake in filling a prescription for either product could produce harmful effects. Under
such circumstances, it is necessary for obvious reasons, to avoid confusion or mistake in
the dispensing of the pharmaceuticals.

23. The other argument of the counsel for the defendant that the plaintiff's product is
available in tablets and oral suspension form and the defendant's product is available in
injection form has also no force as it has been seen from experience of the
pharmaceuticals products available in all over the world that most of the companies are
making pharmaceuticals products in both the forms i.e. tablets as well as in injection form
under the same trade mark. As per well settled law, the actual confusion and deception is
not required in order to prove the case of passing off even if the defendant has adopted
the mark innocently and the court comes to the conclusion that the two trade marks are
deceptively similar, injunction under the said circumstances has to be granted. Actual
deception is not required in an action of passing off. Century Traders v. Roshan Lal
Duggar & Co. MANU/DE/0153/1977 : AIR 1978 (Del) 250. Therefore there is no chance
of confusion and deception.

24. In the case of Laxmikant V. Patel v. Chetanbhat Shah and Anr., (2002)3SCC65 the
Apex court has dealt with this question at great length in paras 8 and 9 which reads as
under:

13. In an action for passing off it is usual, rather essential, to seek an injunction
temporary or ad-interim. The principles for the grant of such injunction are the same as in
the case of any other action against injury complained of. The plaintiff must prove a
prima facie case, availability of balance of convenience in his favour and his suffering an
irreparable injury in the absence of grant of injunction. According to Kerly (ibid, para
16.16) passing off cases are often cases of deliberate and intentional misrepresentation,
but it is well- settled that fraud is not a necessary element of the right of action, and the
absence of an intention to deceive is not a defence though proof of fraudulent intention
may materially assist a plaintiff in establishing probability of deception. Christopher Wad
low in Law of Passing Off (1995 Edition, at p.3.06) states that the plaintiff does not have
to prove actual damage in order to succeed in an action for passing off. Likelihood of
damage is sufficient. The same learned author states that the defendant's state of mind is
wholly irrelevant to the existence of the cause of action for passing off (ibid, paras 4.20
and 7.15). As to how the injunction granted by the Court would shape depends on the
facts and circumstances of each case. Where a defendant has imitated or adopted the
plaintiff's distinctive trade mark or business name, the order may be an absolute
injunction that he would not use or carry on business under that name, (Kerly, ibid, para
16.97)

25. The third contention of the learned Counsel for the defendant is that the product of
the parties in question is Schedule "H" drug and the same has to be purchased by the
customers only on the prescription of medical practitioner. The argument of the defence
of Schedule "H" drug has already been dealt with in various cases decided by the High
Courts as well as the Apex court wherein the court has rejected the said submission many
times. In the case of Cadila Pharmaceuticals (supra) in para 22 and 28 it was held as
under:

22. It may here be noticed that Schedule "H" drugs are those which can be sold by the
chemist only on the prescription of the Doctor but Schedule "L" drugs are not sold across
the counter but are sold only to the hospitals and clinics. Nevertheless, it is not un-
common that because of lack of competence or otherwise, mistakes can arise specially
where the trade marks are deceptively similar. In Blansett Pharmaceuticals Co. v.
Carmick Laboratories Inc. 25 USPQ 2nd, 1473 (TTAB 1993), it was held as under:

Confusion and mistake is likely, even for prescription drugs prescribed by doctors and
dispensed by pharmacists, where these similar goods are marketed under marks which
look alike and sound alike.

28. Here, it will be useful to refer to the decision of Morgenstern Chemical Company's
case (supra) where it has been held as under:

[5] In the field of medical products, it is particularly important that great care be taken to
prevent any possibility of confusion in the use of trade marks. The test as to whether or
not there is confusing similarity in these products even if prescribed and dispensed only
by professionally trained individuals does not hinge on whether or not the medicines are
designed for similar ailments. The rule enunciated by Judge Helen in Cole Chemical Co.
v. Cole Laboratories D.C. Mo. 1954, 118F. Supp. 612, 616, 617, 101, USPQ 44, 47, 48,
is applicable here:

Plaintiff and defendant are engaged in the sale of medical preparations. They are for
ultimate human consumption or use.***They are particularly all for ailments of the
human body. Confusion in such products can have serious consequences for the patient.
Confusion in medicines must be avoided.

*****

Prevention of confusion and mistakes in medicines is too vital to be trifled with" The
observations made by Assistant Commissioner Leeds of the Patent Office in R.J.
Strasenburgh Co. v. Kenwood Laboratories INC. 1955, 106 USPQ 379, 380 are
particularly apt, that
Physicians are not immune from confusion or mistake. Further more it is common
knowledge that many prescriptions are telephoned to the pharmacists and others are
handwritten, and frequently handwriting is not unmistakably legible. These facts enhance
the chances of confusion or mistake by the pharmacists in filling the prescription if the
marks appear too much alike when handwritten or sound too much alike when
pronounced.

The defendant concedes that physicians and pharmacists are not infallible but urges that
the members of these professions are carefully trained to detect differences in the
characteristics of pharmaceutical products. While this is doubtless true to dos not open
the door to the adoption by manufacturers of medicines of trade marks or names which
would be confusingly similar to anyone not exercising such great care. For physicians
and pharmacists are human and in common with the rest of mankind are subject to human
frailties. In the field of medicinal remedies the courts may not speculate as to whether
there is a probability of confusion between similar names. If there is any possibility of
such confusion in the case of medicines public policy requires that the use of the
confusingly similar name be enjoined (See Lambert Pharmacol Ltd. v. Bolton Chemical
Corporation DCNY 1915, 219 F. 325.326.

26. Also in the case of Ranbaxy Laboratories Ltd. v. Dua Pharmaceuticals Pvt. Ltd.
MANU/DE/0243/1988 : AIR 1989 Delhi 44 in para 6 it was held as under:

(6) It was then contended by the learned Counsel for the defendant that the said
medicines can only be sold on the doctor's prescription and, thereforee, there can be little
likelihood of confusion. It is true that the said drugs are supposed to be sold on doctor's
prescription, but it is not unknown that the same are also available across the counters in
the shops of various chemists. It is also not unknown that the chemists who may not have
"CALMPOSE" may pass off the medicine "CALMPROSE" to an unwary purchaser as
the medicine prepared by the plaintiff. The test to be adopted is not the knowledge of the
doctor, who is giving the prescription. The test to be adopted is whether the unwary
customer, who goes to purchase the medicine can make a mistake.

27. The next contention of the learned Counsel for the defendant is that suffix of the mark
CEF" is suggestive of the ingredient and there is nothing novel or distinctive about the
mark of the plaintiff. The suffix "CEF" has been derived by the parties from the
ingredient containing Cefixime, therefore, the mark of the plaintiff itself is a distinctive
trade mark as claimed by the plaintiff and there is no visual similarity under the said
circumstances.

28. This proposition has already been discussed in various decisions passed by Apex
Court for the last more than four decades in which have clearly laid down that the rival
marks of the parties have to be compared as a whole. Therefore, it is not a valid defence
by the defendant to first split the mark in question portion-wise and then give its
justification for adoption and use of similar mark of the other party.
29. In the case of Corn Products (Supra) it was held that in deciding a question of
similarity between two marks, the marks have to be considered as a whole. Similarly, in
the case of Amritdhara (supra) it was observed that the trade mark is the whole thing. The
whole word has to be considered. Also in the case of Kaviraj Pandit Durga Dutt Sharma
v. Navaratna Pharmaceutical Laboratories MANU/SC/0197/1964 : AIR 1965 SC 980 the
Apex Court held that where common marks are included in the trade marks to be
compared, or in one of them, the proper course is to look at the marks as whole and not to
disregard the parts which are common.

30. In the case of Rapidex Pharmaceuticals (supra), the mark of the plaintiff and
defendant was Zavit and Evit and the objection was raised by the defendant that the
suffix of the mark VIT is adopted from the generic name vitamin and is common in use
by other manufacturer and traders, therefore, the mark was not a distinctive. However,
the injunction was granted. In another case reported in Sun Pharma Industries Ltd (supra)
where the mark of the parties were Parkitane and Pacitane, the parties were using the
mark in respect of the disease like Parkinson. While comparing the mark as a whole, the
court granted the injunction. In the case reported of Smithkline Pharma's case (supra)
where the marks in question were Alben and Aben, the mark Alben, was derived by the
plaintiff from the generic name, the court granted the injunction against the defendant.

31. The learned Counsel for the plaintiff says that the plaintiff has no objection if the
defendants may use the generic name cefixime as a trade mark.

32. The next contention of the defendant is that there are number of other companies who
are using the similar trade mark as that of the plaintiff, those are CEFF, SIMCEF, CEF,
BECEF, SYCEF, CEACEF, SYCEF, SICEF and C-CEF. The contention of the defendant
has no force as the defendants have failed to produce any evidence of the actual user of
the said marks referred by the defendants. In order to take the said defence, the party has
to give cogent evidence before this Court as to since when these trade marks are being
used and what is the goodwill and reputation of the said trade marks. The defendant in
the present case has not produced the samples of the third parties in order to show as to
whether the said marks are being used and goods are available in the market or not. The
similar defence raised in various cases has been dealt by the courts from time to time in
the cases of Century Traders (supra), Corn Products refining Co. v. Shangrila Food
Products Ltd. MANU/SC/0115/1959 : AIR 1960 SUPREME COURT 142 and Pankaj
Goel v. Dabur India Ltd. 2008(38) PTC 49 (Del). Relevant part of the decision of Corn
product(supra) is reproduced hereinbelow:

17. The series of marks containing the common element or elements therefore only assist
the applicant when those marks are in extensive use in the market. The onus of proving
such user is of course on the applicant, who wants to rely on those marks. Now in the
present case the applicant, the respondent before us, led no evidence as to the user of
marks with the common element. What had happened was that Deputy Registrar looked
into his register and found there a large number of marks which had either 'Gluco' or
'Vita' as prefix or suffix in it. Now of course the presence of a mark in the register does
not prove its user all. It is possible that the mark may have been registered but not used. It
is not permissible to draw any inference as to their user from the presence of the marks
on the register.

33. A mere filing of the search report from the trademarks office does not prove as to
whether the marks mentioned in search report was actually been used or not. It is
imperative on the part of the party who relies upon the marks of third party to produce
cogent and clear evidence of user in order to prove the defence of common marks to the
trademark on the basis of the third party user. Hence, in the absence of valid and cogent
evidence, the submission of the defendant cannot be accepted.

34. The next submission of the learned Counsel for the defendant is that this Court does
not have the territorial jurisdiction to try and entertain the present suit. The plaintiff in the
present case has invoked the jurisdiction as per Para 21 of the plaint which reads as
under:

This Hon'ble court has necessary jurisdiction as the sales of the plaintiff's products are
available in New Delhi through its agents as is the defendant's product. The plaintiff's
sales are also affected causing losses and harm to the plaintiff in Delhi which the sale
made by the defendant cuts into the plaintiff's business and reduces its sales, interalia, at
Delhi. The harm caused to the plaintiff is due to a direct correlation between the
defendant's infringing activities and the plaintiff's business and, therefore a part of the
cause of action has arisen in Delhi, therefore, this Hon'ble court has the jurisdiction to
entertain the present suit under Section 20 of CPC.

35. Learned Counsel for the plaintiff has argued that the plaintiff has invoked the
jurisdiction of this Court on the basis of fact that the defendant's product is available in
New Delhi and that the plaintiff's sales are also effected within the territory of this Court.

36. At the instance of the defendant, the statement of investigator of the plaintiff under
Order X CPC has also been recorded on 21st January, 2009. In the said statement
recorded under Order X CPC, the investigator has made the statement that the defendant
has created confusion in the market by using of the trade mark CECEF. The plaintiff's
and defendants products are available in Delhi through their agents. Learned Counsel for
the plaintiff has further argued that the mere averment in the plaint is sufficient to invoke
the jurisdiction.

37. In view of the settled law, it is clear that part of cause of action has arisen at Delhi
and at this stage the court has to see only the averments made in the plaint. (Ref. LG
Corporation and Anr. v. Intermarket Electroplasters(P) Ltd. and Anr. 2006 (32) PTC 429,
Tata Iron & Steel Co. Ltd. v. Mahavir Steels and Ors. MANU/DE/0525/1992 : 47(1992)
DLT 412).

38. Further since the point of territorial jurisdiction of this Court is a mixed question of
facts and law, therefore, prima facie, on the basis of averments in plaint, this Court has
the territorial jurisdiction.
39. The next contention of the learned Counsel for the defendant is that the defendant's
application is prior in time, therefore, the plaintiff is not entitled for injunction in the
matter. It is a matter of fact that the plaintiff is the earlier user of the trade mark in
question. The plaintiff has produced the evidence of prior user on record, therefore, the
contention of the defendant has no force. The mere filing of the application prior in time
of the plaintiff's application does not confer any right in favour of the defendant when the
plaintiff is the actual prior user of the mark in question. Further in reply to notice issued
by the plaintiff, the defendant had agreed to withdraw the same very application as
alleged. In the case of Century Traders (supra), it was observed that in order to succeed in
an application for temporary injunction the appellant had to establish user of the aforesaid
mark prior in point of time than the impugned user by the respondents.

40. The other contention of the defendant is that there is delay on the part of the plaintiff
to file the present suit. The said contention is also totally merit-less because it is the
defendant who himself has given the reply to the notice issued by the plaintiff to
withdraw the application for registration of the trade mark and also issued a letter in
favour of the Registrar of the Trade Marks. As a matter of fact after issuing the notice by
the plaintiff, it was the defendant who at that point of time made up its mind to withdraw
the mark. However, it appears that the defendant later on changed its mind as per the
pleadings of the defendant. It is well settled law that if the defendant had knowledge
about the plaintiff's trademark then the subsequent user of the defendant, if any, is at its
own peril and it should not be construed as bonafide user on the part of the defendant.
Therefore, the said contention has also no force in the eyes of law.

41. In the case of Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel and Ors.
MANU/SC/3725/2006 : 2006(33) PTC 281 (SC) in para 111 it was held as under:

111. Applying the aforementioned principles in the instant case, it is evident that the time
gap between the issuance of the notice and filing of an application for grant of injunction
was not a voluntary act on the part of the appellant herein. It had to wait for the outcome
of various proceedings pending before different courts. The respondents having
themselves taking recourse to judicial proceedings, as noticed hereinbefore, cannot now
be permitted to set up the defence of acquiescence on the part of the appellant.
Indisputably, in Page 3760 a case of infringement of trade mark, injunction would
ordinarily follow where it is established that the defendant had infringed the trade mark
and had not been able to discharge its burden as regard the defence taken by it.

42. In the case of Colgate Palmolive Company and Anr. v. Anchor Health and Beauty
Care Pvt. Ltd. MANU/DE/1000/2003 : 2003 (27) PTC 478 (Del) in paras 65 and 66 it was
held as under:

65. As regards the plea of the defendant that plaintiff are not entitled to interim injunction
because of delay, laches and acquiescence inasmuch as notice was issued in July, 1998
and action was brought in 2003, such a defense is not available as it is well settled
principle of law that if use is found to be dishonest, delay or acquiescence has no
relevance. The very fact that notice was served upon the defendant, the bringing of the
action after two or three years becomes insignificant and irrelevant.

66. Further, though notice was given to the defendant on 13/7/98 against the old product
but when the defendant discontinued with the old product and brought out a new product
in 2002 the instant action was taken within three months and thereforee the question of
delay does not arise. The notice was given against the use of red and white colour
combination with blue line in between. Admittedly the plaintiff did not take any action as
the sales were insignificant but when they modified the product with red and white colour
combination alone in October, 2002 and the sales of the defendants goods have suddenly
went up the instant action was taken.

43. The last contention of the defendant is that the plaintiff has not approached this Court
with clean hands as the plaintiff has knowingly made false and misleading statements. It
is not in dispute that the two products are pharmaceutical products, the submission of the
defendant that the two products are used with different ingredients does not amount to
concealment of material fact. The said contention has no force and the same is rejected in
view of my discussion in para 21 of my order.

After considering the overall circumstances of the matter, I am of the view that prima
facie it appeared that the defendants have infringed the legal rights of the plaintiff and
therefore, they have no justification to use the impugned trade mark. I am of the
considered view that an ex parte ad interim injunction granted by this Court on 6th May,
2008 is to be confirmed and ordered accordingly. The application stands disposed of.

44. List this matter before the Joint Registrar on 18th August, 2009.

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MANU/DE/0948/2009

IN THE HIGH COURT OF DELHI

I.A. Nos. 14472/2007 and 5651/2009 in CS(OS) No. 829/2002

Decided On: 01.07.2009

Appellants: National Horticulture Board


Vs.
Respondent: Cosco Blossoms Pvt. Ltd. and Ors.
Hon'ble Judges:
Manmohan Singh, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Harish Malhotra, Sr. Adv., Rajinder Kumar, Tanuj
Kumar and Sanjeev Singh, Advs., Mohit Mathur and Shishir Mathur, Advs.

For Respondents/Defendant: R.K. Modi, Adv. for Defendants NoS. 1 to 3, Mohit Mathur
and Shishir Mathur, Advs. for Def. No. 4

Subject: Civil

Catch Words

Mentioned IN

Acts/Rules/Orders:
Societies Registration Act, 1860; Companies Act, 1956; Court Fee Act, 1870 - Section
16; Negotiable Instrument Act - Section 138; Criminal Procedure Code (CrPC), 1973 -
Sections 195 and 340 - Order 37

JUDGMENT

Manmohan Singh, J.

1. The plaintiff has filed the suit under Order 37 CPC for recovery of a sum of Rs.
1,70,27,818/- which was alleged to be taken as loan by the defendant No. 1 for
development of a horticulture project under the plaintiff's scheme. Other defendants are
guarantors for this advance. The plaintiff was granted ex parte ad interim injunction vide
order dated 17th April, 2002. The defendants were restrained from selling, disposing of,
transferring, alienating moveable and immovable property owned at the project site on a
plot of land measuring 131 kannal 10 marla at Village Goyala, Sub Tehsil Tauru, District
Gurgaon, Haryana (hereinafter referred to as 'the suit property').

2. The ex-parte ad interim injunction was made absolute vide order dated 20th May, 2002
and it was clarified that the restrained order will not apply to the agricultural produce of
the land in question. The plaintiff, National Horticulture Board, is a Society registered
under the Societies Registration Act, 1860 formed by the Government of India, Ministry
of Agriculture, inter alia, for the purpose of promoting, developing and supporting
Horticulture activities by rendering financial assistance to various institutions engaged in
Horticulture activities including processing of fruits and vegetables and floriculture.

3. The defendant No. 1 is a company registered under the provisions of the Companies
Act, 1956 having its registered office at 301, AVG Bhawan, M-3, Middle Circle,
Connaught Circus, New Delhi-110001. The defendants No. 2 to 4 are the guarantors for
defendant No. 1 company.
4. The defendant No. 1 made an application dated 11.08.1994 to the plaintiff requesting
for financial assistance to finance its project for cut roses floriculture on the suit property.

5. The plaintiff vide its letter of intent/sanction dated 03.02.1995 agreed to lend and
advance to the defendant No. 1 by way of term loan a sum of Rs. 100 lac in aggregate to
finance defendant No. 1's project and the loan agreement dated 16.02.1995 was entered
between the parties.

6. Sanctioned loan amount of Rs. 100 Lac was disbursed to defendant No. 1 through
Demand Draft on 01.03.1995 drawn on Indian Overseas Bank, NHB Extension Counter,
Gurgaon.

7. In consideration of and as security for the soft loan and due payment thereof and as
security for the service charges, the defendant No. 1 had created hypothecation of
movable property and mortgage of the immovable property lying at the suit property.

8. An irrevocable and unconditional personal guarantee dated 16.02.1995 was also


executed by defendant No. 2 to 4 in favour of the plaintiff for the due repayment of the
loan and service charges and all other charges accrued in terms of the loan agreement.

9. Defendants No. 2 to 4 also executed personal guarantee dated 16.02.1995 in favour of


the plaintiff and revival letters dated 05.06.1997 and 31.12.1999 for the due repayment of
all and every sum payable by the defendant No. 1 company. It was mentioned in these
documents that the defendants No. 2 to 4 were personally liable for all and every sum of
money due and payable by the defendant No. 1 company, and as such they are sued in
their personal capacities as personal guarantors.

10. After availing the loan amount of Rs. 100 Lac, the defendant No. 1 failed to repay the
loan amount on time.

11. The plaintiff, in view of the failure of the defendant No. 1 in repaying the principal
amount and service charges as per the schedule recalled the entire loan along with service
charges and the penal interest vide legal notice dated 14.01.2002.

12. The plaintiff averred in the plaint that the defendants are liable to pay a sum of Rs.
1,70,27,818/- along with interest @ 18% per annum from the date of filing of this suit.

13. However, during the pendency of the present suit, the parties to the suit, in
conciliation among them, amicably settled the total outstanding amount for one time
payment of Rs. One Crore. The defendant No. 1 in terms of the one time settlement has
made the payment of the said amount of Rs. One Crore and the plaintiff has realised the
payment against the full and final settlement of the above mentioned suit.

14. Since the subject matter of the suit has been settled between the parties out of the
court to their mutual satisfaction, the plaintiff filed I.A. No. 5651/1999 under Section 16
of Court Fee Act for refund of court fee of Rs. 1,68,560/- which was paid by the
applicant/plaintiff with the suit. He further sought withdrawal of the present suit.

15. Before passing the order of dismissal of suit on being settled, the defendant No. 4
filed an application being I.A. No. 14472/2007 under Section 340 r/w Section 195 of the
Code of Criminal Procedure, 1973 against the plaintiff and defendant No. 2 and 3 for
furnishing false evidence before this Court.

16. It is alleged that the personal guarantee dated 16.02.1995 was obtained by deceit and
playing fraud on the applicant. The revival letter dated 31.12.1999 is a fabricated
document, the applicant has never put his signatures on the said document. The signature
of the applicant/defendant No. 4 had been forged by the defendants No. 2 and 3 in
conspiracy with the plaintiff to falsely implicate him in the present suit. It is submitted
that present applicant had even got examined the photocopy of the revival letter dated
31.12.1999 by the handwriting expert, which shows that the signatures on the revival
letter are not of present applicant.

17. It is further alleged that defendants No. 2 and 3 fraudulently even got opened an
account No. 051-761351-001 with HSBC Bank, Kasturba Gandhi Marg, New Delhi in
the name of M/s. Chemical Sales Corporation which was a partnership firm, wherein the
applicant was also a partner and for the same, a criminal complaint was filed by the
applicant seeking registration of FIR against the said persons. Vide order dated
14.09.2007, the learned Metropolitan Magistrate directed the concerned police station to
register an FIR against the said accused persons.

18. The reply to this application has been filed by the plaintiff. It is specifically
mentioned in the reply that neither the plaintiff or any of its officers have committed any
offence as alleged by the defendant No. 4 nor they have filed any false evidence before
this Court at any stage of the proceedings.

19. It is further stated in the reply that the defendant No. 4/applicant was duly served and
filed his application for leave to defend being I.A. No. 6444/2002 in July, 2002. In the
said application, the defendant No. 4 has nowhere said that he had not signed the revival
letter dated 31st December, 1999.

20. The objection has also been raised by the plaintiff that the present application is not
maintainable as there is no question of directing to hold any enquiry under Section 340
Cr. P.C. Moreover, the subject matter of alleged forgery if committed by any party is
prior to the date of institution of the suit, hence the application is to be dismissed.

21. In view of the facts explained above, it is also stated that the application filed by the
defendant No. 4 is also not applicable to the present case, as there was no forgery of
documents as alleged by the defendant No. 4 and there was no occasion for the plaintiff
to disbelieve the genuity of the said document.
22. Similarly, on the same line, the defendant Nos. 2 to 3 have filed the reply to the
application filed by the defendant No. 4/applicant. In addition, it is mentioned in the reply
that the said documents have been duly executed by the defendant No. 4 and the same
bears his signatures. He has absolutely no right whatsoever to deny the execution of the
said documents and that the application, in fact, is an abuse of the process of law.

23. It is also stated that the present application has been moved by the defendant No. 4 in
order to pressurize the defendant Nos. 2 and 3 to withdraw the cases which they have
filed against the defendant No. 4 in regard to his liability towards them in partnership
firm and also to withdraw the complaint filed under Section 138 of the Negotiable
Instrument Act against the defendant No. 4. Since the defendant Nos. 2 and 3 have
refused to withdraw the same, the application has been filed by the defendant No. 4.

24. In view of the above said facts and circumstances, I accept the contentions of the
defendant Nos. 2 and 3 and plaintiff. As per admitted facts, the alleged forgery if any
committed by any of the parties is prior to the date of the suit, hence the present
application is not maintainable in the pending suit being CS(OS) No. 829/2002. The
plaintiff is entitled to withdraw the suit on the basis of the settlement arrived between the
parties. The suit of the plaintiff is dismissed as withdrawn. The application of the
defendant No. 4 being I.A. No. 14472/2003 is, therefore, dismissed. However, the liberty
is granted to the defendant No. 4 to file private complaint, if maintainable, before the
appropriate forum in accordance with law against any party who allegedly commited
forgery and the same shall be decided as per merit.

25. Since the plaintiff and the defendants No. 1 to 3 arrived on the out of court settlement,
by virtue of Section 16 of the Court Fees Act, 1870 the plaintiff is entitled to the refund
of the court fee to the tune of Rs. 1,68,560/- from the Collector and a certificate be issued
in this respect.

26. The suit and the pending applications are disposed of accordingly. No order as to
costs.

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MANU/DE/0545/2008

Equivalent Citation: 149(2008)DLT734

IN THE HIGH COURT OF DELHI

IA No. 4332/2007 in CS(OS) No. 2132/2006


Decided On: 26.03.2008

Appellants: Nisha Somaia


Vs.
Respondent: Outlook Publishing (India) Ltd. and Ors.

Hon'ble Judges:
Hima Kohli, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Malvika Rajkotia, Adv.

For Respondents/Defendant: A.J. Bhambhani and Nisha Bhambhani, Advs.

Subject: Civil

Catch Words

Mentioned IN

Acts/Rules/Orders:
Civil Procedure Code (CPC) - Section 115 - Order 6, Rule 17

Cases Referred:
A.K. Gupta and Sons v. Damodar Valley Corporation AIR 1967 SC 96; B.K.N. Narayana
Pillai v. P.Pillai and Anr. AIR 2000 SC 614; Estralla Rubber v. Dass Estate (Pvt.) Ltd.
AIR 2001 SC 3295; Kanailal Das and Anr. v. Jiban Kanai Das and Anr. AIR 1977 Cal
189; Gurdial Sigh and Ors. v. Raj Kumar Aneja and Ors. (2002) 2 SCC 445 8; Weldon v.
Neal; Charan Das v. Amir Khan AIR 1921 pc 50; L.J. Leach and Co. Ltd. v. Jardine
Skinner and Co. AIR 1957 SC 357; Akshay Restaurant v. P. Anjanappa and Ors. AIR
1995 SC 1498

Disposition:
Application allowed

Citing Reference:

A.K. Gupta and Sons v. Damodar Valley Corporation Mentioned

B.K.N. Narayana Pillai v. P.Pillai and Anr. Discussed

Estralla Rubber v. Dass Estate (Pvt.) Ltd. Mentioned

Kanailal Das and Anr. v. Jiban Kanai Das and Anr. Mentioned

Gurdial Sigh and Ors. v. Raj Kumar Aneja and Ors. Mentioned
Weldon v. Neal; Charan Das v. Amir Khan Mentioned

Leach and Co. Ltd. v. Jardine Skinner and Co. Mentioned

Akshay Restaurant v. P. Anjanappa and Ors. Discussed

Case Note:
Civil — amendment of plaint — Order VI Rule 17 of the Code of Civil Procedure —
plaintiff sought amendment of cause title without any additional facts or claims —
Held, provision of Order VI Rule 17 of the Code of Civil Procedure confers
jurisdiction on the Court to allow either party to alter or amend his pleadings at any
stage of the proceedings and on such terms as may be just — pre-trial amendments
are allowed more liberally than those which are sought to be made after the
commencement of the trial or after conclusion thereof since in the former case, it
can be assumed that the defendant would not be prejudiced as he would have the
complete opportunity to counter the stand of the plaintiff/applicant post amendment
— purpose and object of Order 6 Rule 17 CPC is to allow either party to alter or
amend his pleadings in such manner and on such terms as may be just. The power
to allow the amendment is wide and can be exercised at any stage of the proceedings
in the interests of justice — where the amendment does not constitute the addition
of a new cause of action or raise a different case, but amounts to no more than a
different or additional approach to the same facts, the amendment will be allowed
even after the expiry of the statutory period of limitation — In the present case,
amendments sought to be made in the plaint do not appear to be such as to
introduce a new cause of action, or set up a new case — application allowed

Ratio Decidendi:
“where the amendment does not constitute the addition of a new cause of action or
raise a different case, but amounts to no more than a different or additional approach
to the same facts, the amendment will be allowed”

JUDGMENT

Hima Kohli, J.

1. This is an application filed by the plaintiff under Order VI Rule 17 of the Code of Civil
Procedure, for amendment of the plaint.

2. The plaintiff/applicant has filed the present suit against the defendants claiming
damages to the tune of Rs. One Crore on account of defamation. Notice was issued in the
suit on 17.11.2006. During the pendency of the suit, a previous application under Order
VI Rule 17 CPC for amendment of the plaint was filed on behalf of the
plaintiff/applicant, which was however dismissed as withdrawn vide order dated
14.2.2007, with liberty granted to the plaintiff/applicant to file an appropriate application
in accordance with law. In the meantime, the defendants filed their written statement on
8.3.2007. Thereafter the present application for amendment of the plaint under Order VI
Rule 17 CPC came to be filed by the plaintiff/applicant on 28.3.2007.

3. By way of amendment, the plaintiff/ applicant wishes to amend the cause title of the
suit from "A suit for damages on account of defamation for Rupees one crore" to
"Amended suit for damages on account of defamation, breach of confidence and privacy
and deceit for Rupees one crore", besides adding three paragraphs, being paragraphs No.
AA, 6A and 25A to the plaint.

4. Learned Counsel for the plaintiff/applicant submitted that no additional facts are
sought to be added to the plaint by way of the proposed amendment, and that it was
already stated in paragraph 6 of the original plaint that the defendant No. 5 had
misrepresented to the plaintiff and made her believe that the article to be published in the
magazine "Outlook", owned by defendant No. 1 would be related to fashion and large
size women and thus the plaintiff allowed herself to be photographed for a cover feature
in March, 2006. It was further contended that the amendments being sought in the
original plaint only amplify the stand already taken by the plaintiff and specifically state
the rights being breached, on the basis of which she claims entitlement to damages.
Counsel for the plaintiff/applicant submitted that the said amendments are necessary to
decide the real controversy between the parties, and that even if the amendments sought
are allowed, the nature of the suit would remain the same. In support of her submissions,
learned Counsel for the plaintiff/applicant relied on the following judgments:

i. A.K. Gupta and Sons v. Damodar Valley Corporation MANU/SC/0014/1965 :


[1966]1SCR796

ii. B.K.N. Narayana Pillai v. P.Pillai and Anr. MANU/SC/0775/1999 : AIR2000SC614

iii. Estralla Rubber v. Dass Estate (Pvt.) Ltd. MANU/SC/0558/2001 : AIR2001SC3295

5. On the other hand, the present application for amendment of the plaint was strongly
opposed by the learned Counsel for the defendants, who submitted that by way of the
present application, the plaintiff/applicant is seeking to introduce pleas which are
destructive of/inconsistent with the stand taken by her earlier. Counsel for the defendants
contended that the plaintiff had changed her stand on material facts in the plaint and is
seeking to resile from the material admissions made by her in favor of the defendants in
the earlier plaint. He pointed out that by way of the present application, the
plaintiff/applicant also seeks to change the nature of the suit itself and to include within
its ambit other heads of relief, namely, breach of confidence, breach of privacy and
deceit, which were not a part of the original plaint. It was urged that the plaintiff has not
furnished any reasons for seeking the amendments and by trying to do so, she is
attempting to widen the scope of defendants' alleged liability, which he submitted, ought
not to be allowed by this Court.

6. The second limb of the arguments advanced on behalf of the defendants is that the
present application is belated, inasmuch as the same has been filed only on 28.3.2007,
long after the defendants filed their written statement to the original plaint, i.e. on
8.3.2007. It was stated that since the defendants have already filed their written
statement, the plaintiff has come to know of the exact nature of their defense and after
assessing the strength of her case on the basis of the said written statement, the present
application has been moved with the malafide intention to misuse and abuse the process
of the Court. Lastly, it was urged that a perusal of the earlier application filed by the
plaintiff/applicant for amendment of the plaint, when juxtaposed against the present
application shall reveal the contradictions in the stand of the plaintiff, which itself is
reason enough to reject the application.

7. In support of his arguments, learned Counsel for the defendants placed reliance on the
following judgments: Kanailal Das and Anr. v. Jiban Kanai Das and Anr.
MANU/WB/0048/1977 : AIR1977Cal189

8. Gurdial Sigh and Ors. v. Raj Kumar Aneja and Ors. MANU/SC/0077/2002 :
[2002]1SCR817 8. I have heard the counsels for both the parties and have given my
careful consideration to the arguments advanced by them.

9. The provision of Order VI Rule 17 of the Code of Civil Procedure confers jurisdiction
on the Court to allow either party to alter or amend his pleadings at any stage of the
proceedings and on such terms as may be just. It is a settled position of law that the
Courts while deciding a prayer for amendment should not adopt a hyper-technical
approach. Technicalities of law should not be permitted to hamper the Courts in the
administration of justice between the parties. Such of the amendments that are directed
towards putting forth and seeking determination of the real questions in controversy
between the parties ought to be permitted to be carried out.

10. The general rule is that pre-trial amendments are allowed more liberally than those
which are sought to be made after the commencement of the trial or after conclusion
thereof since in the former case, it can be assumed that the defendant would not be
prejudiced as he would have the complete opportunity to counter the stand of the
plaintiff/applicant post amendment. In cases where amendment is sought at a post-trial
stage however, the question of prejudice to the opposite party may arise and that shall
have to be answered by reference to the facts and circumstances of each individual case.

11. The Supreme Court in the case of B.K.N Pillai (supra) after referring to a number of
decisions, held as under:

3. The purpose and object of Order 6 Rule 17 CPC is to allow either party to alter or
amend his pleadings in such manner and on such terms as may be just. The power to
allow the amendment is wide and can be exercised at any stage of the proceedings in the
interests of justice on the basis of guidelines laid down by various High Courts and this
Court. It is true that the amendment cannot be claimed as a matter of right and under all
circumstances. But it is equally true that the courts while deciding such prayers should
not adopt a hyper technical approach. Liberal approach should be the general rule
particularly in cases where the other side can be compensated with the costs.
Technicalities of law should not be permitted to hamper the courts in the administration
of justice between the parties. Amendments are allowed in the pleadings to avoid
uncalled-for multiplicity of litigation.

In para 4 of the same judgment the following passage from the judgment in A.K. Gupta
and Sons Ltd. (supra) was quoted:

The general rule, no doubt, is that a party is not allowed by amendment to set up a new
case or a new cause of action particularly when a suit on new case or cause of action is
barred: Weldon v. Neal. But it is also well recognized that where the amendment does not
constitute the addition of a new cause of action or raise a different case, but amounts to
no more than a different or additional approach to the same facts, the amendment will be
allowed even after the expiry of the statutory period of limitation: See Charan Das v.
Amir Khan AIR 1921 pc 50 and L.J. Leach and Co. Ltd. v. Jardine Skinner and Co.
MANU/SC/0009/1957 : [1957]1SCR438

12. In the present case, contrary to the stand taken by the defendants, the amendments
sought to be made in the plaint do not appear to be such as to introduce a new cause of
action, or set up a new case. Rather, it amounts to an additional approach towards seeking
the same relief of damages. In the case of Akshay Restaurant v. P. Anjanappa and Ors.
reported in MANU/SC/1017/1995 : AIR1995SC1498 , the Hon'ble Supreme Court
allowed the amendment application, even though a different stand was taken by the
plaintiff therein in its amendment application. Relevant extract of the said judgment is
reproduced herein below:

3. Learned Counsel for the appellant vehemently contends that having made an admission
that the respondents had entered into an agreement of sale and having made certain
averments in support thereof, it was not open to the respondents to wriggle out from the
admission. Admission is a material piece of evidence which would be in favor of the
appellant and binds the respondents when the admission is sought to be withdraw and
some additional facts are sought to be introduced, it would be inconsistent and the High
Court was not justified in permitting such an amendment.

4. We find no force in the contention. It is settled law that even the admission can be
explained and even inconsistent pleas could be taken in the pleadings. It is seen that in
paragraph 6 of the written statement definite stand was taken but subsequently in the
application for amendment, it was sought to be modified as indicated in the petition. In
that view of the matter, we find that there is no material irregularity was committed by
the High Court in exercising its power under Section 115 C.P.C. in permitting
amendment of the written statement.

13. In view of the aforesaid judgment, the argument of the defendants that by way of the
present application the petitioner/applicant has resoled from the admissions made by her
in the original plaint, also, cannot be sustained and deserve to be rejected.
14. Coming to the second plea of the defendants that the present application is belated, as
it has been filed after filing of the written statement and that the application ought not to
be allowed in view of the fact that the same is an attempt on the part of the
plaintiff/applicant to improve upon her case, as a response to the written statement of the
defendants, the records of the present case do not support the aforesaid plea. The cause of
action for institution of the present suit arose in favor of the plaintiff/applicant on
14.08.2006, the present suit was filed well within the period of limitation, i.e., on
7.11.2006. The first amendment application was moved on 6.2.2007, and was withdrawn
on 14.2.2007, with liberty to move an application at the appropriate stage. Thereafter, the
present application was filed within a period of less than 2 months from the date on
which the previous application was withdrawn, i.e., on 28.3.2007. Thus, even if the plea
of the defendants that the plaintiff is seeking to change the nature of the suit by way of
amendment is accepted, it is not as if any of the proposed amendments are barred by
limitation.

15. Merely because the defendants filed their written statement in the meanwhile, is not
reason enough to deny the plaintiff/applicant an opportunity to file an application under
Order VI Rule 17 CPC and seek amendment of the plaint. There is substance in the
submission of the counsel for the plaintiff/applicant that the grounds she wishes to
amplify by seeking the proposed amendments, already find reference in the plaint. The
suit is still at a nascent stage, and the pleadings are yet to be completed in the suit. Fact
also remains, that the defendants would not be prejudiced in any manner if the present
application is allowed, for the reason that they would have ample and adequate
opportunity to meet the case of the plaintiff/applicant by filing a written statement to the
amended plaint.

16. The other plea raised on behalf of the defendants that the earlier application filed by
the plaintiff for amendment of the plaint, which was subsequently permitted to be
withdrawn, with liberty to file an appropriate application, leading to the filing of the
present application, does not mean that the court cannot look into the averments made in
the previous application to contrast it with the present application, to show variance in the
stand taken, is unacceptable for the reason that the moment the plaintiff/applicant was
permitted to withdraw her previously filed amendment application, and she filed the
present one, then the court need not look beyond the submissions made in the latter and
the only surviving application to exercise its discretionary jurisdiction, to either allow or
refuse the prayer for amendment.

17. Also, the judgments relied on by the counsel for the defendants do not take his case
any further. In both the cases referred to by the counsel, the Supreme Court and the
Calcutta High Court only reiterated the principles established by judicial decisions in
respect of amendment of a plaint. A decision ordinarily is a decision on the case before
the Court, and each case is to be decided in view of its own peculiar facts and
circumstances.

18. Accordingly, it is held that the amendments sought by the plaintiff/applicant to the
plaint are necessary for the purposes of determining all the issues in controversy between
the parties. No such irreparable prejudice shall be caused to the defendants in case the
amendments as sought by the plaintiff are permitted, as the case is still at the stage of
completion of pleadings.

19. Consequently, the application of the plaintiff/applicant for amendment of the plaint is
allowed. The plaintiff/applicant is permitted to incorporate the amendment sought by her
as detailed in the application, by substituting the cause title of the suit, and by adding
paras AA, 6A and 25A to the plaint. The amended plaint filed with the application is
taken on record.

20. The application is disposed of.

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MANU/PH/1092/2008

Equivalent Citation: (2009)3PLR564

IN THE HIGH COURT OF PUNJAB AND HARYANA

Decided On: 01.10.2008

Appellants: Man Singh and Anr.


Vs.
Respondent: Sumer Singh and Ors.

Hon'ble Judges:
Vinod K. Sharma, J.

Subject: Civil

Catch Words

Mentioned IN

Disposition:
Petition dismissed

JUDGMENT

Vinod K. Sharma, J.
1. Present revision petition is directed against the order passed by the learned Civil Judge
(Senior Division), Jagadhri allowing an application moved under Order 7 Rule 11 of the
Code of Civil Procedure (for short 'the Code') on behalf of the defendant-respondents.

2. The plaintiff petitioners filed a suit for declaration that the plaintiff petitioners are
entitled to damages/compensation for the loss caused by defendants Nos. 2 to 11 to the
person and property i.e. agricultural land measuring 270 kanals 17 marlas as also the loss
caused to the tractors, car, motor-cycle, electric connection, electric motors etc.

3. Defendant respondents appeared and moved an application that the plaintiffs in the suit
have claimed compensation of Rs. 20 lacs on account of alleged loss or damages suffered
by them. However, requisite court fee has not been paid. Thus, it was prayed that the
plaintiffs be directed to affix ad valorem court fee.

4. The application was contested on the plea that the suit was for declaration as well as
mandatory injunction and the required court fee has already been paid.

5. Learned trial court observed that the petitioner plaintiffs calculated the loss to the tune
of Rs. 20 Lacs. In such circumstances they were liable to pay ad valorem court fee on the
amount assessed. The petitioners were, therefore, directed to affix ad valorem court fee
within 2 months.

6. Mr. J.S.Chahal, learned Counsel appearing on behalf of the petitioners challenges the
impugned order by placing reliance on the judgment of Hon'ble Supreme Court in the
case of Shiv Kumar Sharma v. Santosh Kumari MANU/SC/7929/2007 : AIR2008SC171
wherein Hon'ble Supreme Court was pleased to lay down that in case where damages are
required to be calculated a fixed court fee is to be paid but on the quantum determined by
the court and the balance fee is to be paid when the final decree is to be prepared.

7. The petitioners cannot draw any support from the said judgment as in the said case it
was observed that the damages cannot be granted without payment of court fee in a case
the damages are required to be calculated then fixed court fee is to be paid. That was a
case where mesne profits were claimed but in the present case the plaintiffs have
themselves calculated the damages to the tune of Rs. 20 lacs.

8. Learned Counsel for the petitioners thereafter placed reliance on the judgment of this
Court in the case of Hem Raj v. Harchel Singh and Ors. 1993 Civil Court Cases 48. In the
said case also this Court was pleased to lay down that valuation of the suit for the
purposes of court fee assessed tentatively by the plaintiff cannot be disputed. The said
case would have also no application to the facts of the present case as in the present case
plaintiffs/petitioners have assessed the damages as Rs. 20 lacs.

9. Learned Counsel for the petitioners thereafter placed reliance on the judgment of this
Court in the case of State of Punjab and Ors. v. Jagdip Singh Chowhan
MANU/PH/0684/2004, wherein this Court was pleased to lay down that in a suit for
damages of approximate claim of damages for malicious prosecution principles of
evaluation of suit as in simple suits for recovery or liquidated claims will not apply for
the purposes of court fees. In such a suit valuation put by the plaintiff has to be tentative
and cannot be disputed. The tentative value so fixed has to be accepted in a suit for un-
liquidated damages as already observed the plaintiffs/petitioners have assessed the
liquidated dam* ages.

Hence, this judgment also is of no help to the petitioners.

10. The petitioners also placed reliance on the judgment of this Court in the case of
Subhash Chander Goel v. Harvind Sagar MANU/PH/0556/2003. That was a case where
the petitioner had claimed damages for maligning his reputation This Court held that the
valuation assessed by the plaintiff was to be accepted.

11. Finally, reliance was placed on the Judgment of this Court in the case of Ram Niwas
and Ors. v. Rakesh Kumar and Ors. (1982) 84 P.L.R. 9, wherein this Court was pleased
to lay down that in case full court fee has not been paid by the plaintiff the court has
ample power under Section 149 of the code to allow him to pay the court fee at any time.

12. This judgment is also not applicable to the facts of the present case as the plaintiffs
themselves have assessed the liquidated damages at Rs. 20 lacs. It is well settled that ad
valorem court fee is to be paid in a suit for damages.

13. In the present case it may be noticed that the plaintiffs have claimed compensation of
Rs. 20 lacs and therefore, it is not a case where the damages have not been assessed, as is
the case in the cases referred to by the learned Counsel for the petitioners.

14. In all the cases referred to above it has been laid down than the Court fee has to be
paid on the tentative value as assessed by the plaintiff. The petitioner in the present case
assessed the value of compensation at Rs. 20 lacs, but, however has framed his suit for
declaration and mandatory injunction. It is also well settled that the relief claimed and not
form of suit, which is to determine court fee payable.

15. Thus, in view of the suit as framed learned trial court was justified in ordering the
payment of ad valorem court fee on a sum of Rs. 20 lacs.

Keeping in view the fact that operation of the impugned order was stayed by this Court,
while dismissing revision petition it is ordered that the petitioner plaintiffs may now
make good the deficiency in court fee within 2 months from today.

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MANU/PH/0809/2008

Equivalent Citation: (2008)152PLR543

IN THE HIGH COURT OF PUNJAB AND HARYANA

Decided On: 01.09.2008

Appellants: Man Singh and Anr.


Vs.
Respondent: Sumer Singh and Ors.

Hon'ble Judges:
Vinod K. Sharma, J.

Subject: Civil

Catch Words

Mentioned IN

Disposition:
Petition dismissed

JUDGMENT

Vinod K. Sharma, J.

1. Present revision petition is directed against the order passed by the learned Civil Judge
(Senior Division), Jagadhri allowing an application moved under Order 7 Rule 11 of the
Code of Civil Procedure (for short 'the Code') on behalf of the defendant-respondents.

2. The plaintiff petitioners filed a suit for declaration that the plaintiff petitioners are
entitled to damages/compensation for the loss caused by defendants No. 2 to 11 to the
person and property i.e. agricultural land measuring 270 kanals 17 marlas as also the loss
caused to the tractors, car, motor-cycle, electric connection, electric motors etc.

3. Defendant respondents appeared and moved an application that the plaintiffs in the suit
have claimed compensation of Rs. 20 lacs on account of alleged loss or damages suffered
by them. However, requisite court fee has not been paid. Thus, it was prayed that the
plaintiffs be directed to affix ad valorem court fee.

4. The application was contested on the plea that the suit was for declaration as well as
mandatory injunction and the required court fee has already been paid.

5. Learned trial court observed that the petitioner plaintiffs calculated the loss to the tune
of Rs. 20 lacs. In such circumstances they were liable to pay ad valorem court fee on the
amount assessed. The petitioners were, therefore directed to affix ad valorem court fee
within 3 months.

6. Mr. J.S. Chahal, learned Counsel appearing on behalf of the petitioners challenges the
impugned order by placing reliance on the judgment of Hon'ble Supreme Court in the
case of Shiv Kumar Sharma v. Santosh Kumari MANU/SC/7929/2007 : AIR2008SC171
wherein Hon'ble Supreme Court was pleased to lay down that in case where damages are
required to be calculated a fixed court fee is to be paid but on the quantum determined by
the Court and the balance fee is to be paid when the final decree is to be prepared.

7. The petitioners cannot draw any support from the said judgment as in the said case it
was observed that the damages cannot be granted without payment of court fee in a case
where the damages are required to be calculated then fixed court fee is to be paid. That
was a case where mesne profits were claimed but in the present case the plaintiffs have
themselves calculated the damages to the tune of Rs. 20 lacs.

8. Learned Counsel for the petitioners thereafter placed reliance on the judgment of this
court in the case of Hem Raj v. Harchel Singh and Ors. 1993 CCC 48.

9. In the said case also this court was pleased to lay down that valuation of the suit for the
purposes of court fee assessed tentatively by the plaintiff cannot be disputed. The said
case would have also no application to the facts of the present case as in the present case
plaintiffs/petitioners have assessed the damages as Rs. 20 lacs.

10. Learned Counsel for the petitioners thereafter placed reliance on the judgment of this
Court in the case of State of Punjab and Ors. v. Jagdip Singh Chohan
MANU/PH/0684/2004, wherein this Court was pleased to lay down that in a suit for
damages of approximate claim of damages for malicious prosecution principles of
evaluation of suit as in simple suits for recovery or liquidated claims will not apply for
the purposes of court fees.

11. In such a suit valuation put by the plaintiff has to be tentative and cannot be disputed.
The tentative value so fixed has to be accepted in a suit for unliquidated damages as
already observed the plaintiffs/petitioners have assessed the liquidated damages.

12. Hence, this judgment also is of no help to the petitioners.

13. The petitioners also placed reliance on the judgment of this court in the case of
Subhash Chander Goel v. Harvind Sagar MANU/PH/0556/2003. That was a case where
the petitioner had claimed damages for maligning his reputation. This court held that the
valuation assessed by the plaintiff was to be accepted.

14. Finally, reliance was placed on the judgment of this court in the case of Ram Niwas
and Ors. v. Rakesh Kumar and Ors. (1982)84 P.L.R. 9, wherein this court was pleased to
lay down that in case full court fee has not been paid by the plaintiff the court has ample
power under Section 149 of the Code of allow him to pay the court fee at any time.
15. This judgment is also not applicable to the facts of the present case as the plaintiffs
themselves have assessed the liquidated damages at Rs. 20 lacs. It is well settled that ad
valorem court fee is to be paid in a suit for damages.

16. In the present case it may be noticed that the plaintiffs have claimed compensation of
Rs. 20 lacs and therefore, it is not a case where the damages have not been assessed, as is
the case in the cases referred to by the learned Counsel for the petitioners.

17. In all the cases referred to above it has been laid down that the court fee has to be
paid on the tentative value as assessed by the plaintiff. The petitioner in the present case
assessed the value of compensation at Rs. 20 lacs, but, however has framed his suit for
declaration and mandatory injunction. It is also well settled that it is the relief claimed
and not form of suit, which is to determine court fee payable.

18. Thus, in view of the suit as framed learned trial court was justified in ordering the
payment of ad valorem court fee on a sum of Rs. 20 lacs.

19. Keeping in view the fact that operation of the impugned order was stayed by this
court, while dismissing revision petition it is ordered that the petitioner plaintiffs may
now make good the deficiency in court fee within 2 months from today.

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MANU/RH/0664/2008

Equivalent Citation: AIR2009Raj1, RLW2008(4)Raj3599

IN THE HIGH COURT OF RAJASTHAN (JAIPUR BENCH)

Decided On: 12.08.2008

Appellants: Rohitash Singh


Vs.
Respondent: Prithvi Singh and Ors.

Hon'ble Judges:
Narendra Kumar Jain, J.

Subject: Civil

Catch Words
Mentioned IN

Disposition:
Petition allowed

JUDGMENT

Narendra Kumar Jain, J.

1. Heard learned Counsel for the parties.

2. The plaintiff-respondents No. 1 and 2 filed a suit for recovery of a sum of Rs. 30,000/-
as compensation for their alleged malicious prosecution in the trial court. The summons
were issued to the defendants. The defendant No. 1/respondent No. 3 Kawal Singh filed
his written-statement. So far as defendant No. 2/petitioner is concerned, he did not file
any written statement; he filed an application under Order 7 Rule 11 CPC for dismissal of
the suit on the ground that he is a public servant and the act, alleged to have been done by
him, was so done by him in the official capacity, hence, as per the provisions of Section
80 of the CPC, a notice was necessary to be served upon him but the plaintiffs did not
serve any notice upon him.

3. The learned trial court, vide its order dated 31st October, 2002, rejected the application
only on the ground that without filing written-statement on behalf of the defendant No.
2/petitioner, his application under Order 7 Rule 11 CPC is not maintainable in view of the
judgment of the Bombay High Court reported in MANU/MH/0164/1986 :
AIR1986Bom46 Nishit M. Prabhu Verlekar v. Chandranath, and of this Court in the case
reported in 1995 DNJ Rajasthan 703. Being aggrieved with the same, the defendant No.
1/petitioner preferred this revision petition.

4. The revision petition was admitted by this Court on 26th February, 2003 and further
proceedings of the court below were stayed.

5. The plaintiff-respondents No. 1 and 2 are not present in spite of service of notice.

6. The learned Counsel for the petitioner contended that as per the provisions of Order 7
Rule 11 CPC there is no requirement that a written-statement must be filed by the
defendant before filing the application under Order 7 Rule 11 CPC. He contended that the
learned trial court committed an illegality in not exercising its jurisdiction in entertaining
and deciding the application on the basis of averments made therein, therefore, the trial
court committed an illegality in rejecting the application and, therefore, the order of the
trial Court is liable to be set-aside.

7. The 1 Hon'ble Supreme Court in Saleem Bhai and Ors. v. State of Maharashtra 2003
(1) DNJ (SC) 107, considered the provisions of the Order 7 Rule 11 CPC, and held that
filing of written statement is not necessary to decide the application for rejection of the
plaint. Para Nos. 7 to 10 of the aforesaid judgment are reproduced as under:
7. The short common question that arises for consideration in these appeals is, whether an
application Under Order 7 Rule 11 CPC ought to be decided on the allegations in the
plaint and filing of the written statement by the contesting defendant is irrelevant and
unnecessary.

8. Order 7 Rule 11 CPC reads as under:

11 Rejection of plaint.- The plaint shall be rejected in the following cases.-

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the
Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued by the plaint is written upon paper
insufficiently stamped, and the plaintiff, on being required by the Court to supply the
requisite stamp-paper within a time to be fixed by the Court, failed to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

(e) where it is not filed in duplicate;

(f) where the plaintiff fails to comply with the provisions of Rule 9:

Provided that the time fixed by the Court for the correction of the valuation or supplying
of the requisite stamp paper shall, not be extended unless the Court, for reasons to be
recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional
nature for correcting the valuation or supplying the requisite, stamp paper, as the case
may be, within the time filed by the Court and that refusal to extend such time would
cause great injustice to the plaintiff.

9. A perusal of Order 7 Rule 11 CPC makes it clear that the relevant facts which need to
be looked into for deciding an application thereunder are the averments in the plaint. The
trial Court can exercise the power Under Order 7 Rule 11 CPC at any stage of the suit -
before registering the plaint or after issuing summons to be defendant at any time before
the conclusion of the trial. For the purposes of deciding an application Under Clauses (a)
of Rule 11 of Order 7 CPC, the averments in the plaint are germane; the pleas taken by
the defendant in the written statement would be wholly irrelevant at this stage, therefore,
a direction to file the written statement without deciding the application Under Order 7
Rule 11 CPC cannot but be procedural irregularity touching the exercise of jurisdiction
by the trial Court. The order, therefore, suffers from nonexercising of the jurisdiction
vested in the Court as well as procedural irregularity. The High Court, however, did not
advert to these aspects.

10. We are, therefore, of the view that for the aforementioned reasons, the common order
under challenge is liable to be set aside and we, accordingly, do so. We remit the cases to
the trial Court for deciding the application Under Order 7 Rule 11 CPC on the basis of
the averments in the plaint, after affording an opportunity of being heard to the parties in
accordance with law.

8. The Hon'ble Apex Court in Saleem Bhai's case (supra) has categorically held that filing
of written-statement is not necessary to decide the application under Order 7 Rule 11
CPC for rejection of the plaint.

9. In view of the authoritative pronouncement by Hon'ble the Apex Court in Saleem


Bhai's case (supra), it is clear that the order passed by the learned trial court is absolutely
contrary to the judgment of the Hon'ble Apex Court.

10. The present case is fully covered by the decision of the Hon'ble Apex Court in
Saleem Bhai's case (supra).

11. Consequently, the revision petition is allowed.

12. The Impugned order dated 31st October, 2002 passed by the trial court is set-aside.
The case is remanded back to the trial court with a direction to decide the application of
the defendant-petitioner under Order 7 Rule 11 CPC in accordance with the law.

13. A copy of this order may be sent to the Civil Judge (Sr.Div.), Kishangarhbas, District
Alwar.

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MANU/MH/0658/2008

Equivalent Citation: 2009(1)BomCR423, 2008(6)MhLj534

IN THE HIGH COURT OF BOMBAY AT AURANGABAD

Second Appeal No. 681 of 2004

Decided On: 25.07.2008

Appellants: Asaram Kanhaji Gaikwad


Vs.
Respondent: Kusumbai Sahebrao Jadhav
Hon'ble Judges:
P.R. Borkar, J.

Counsels:
For Appellant/Petitioner/Plaintiff: A.S. Shelke, Adv.

For Respondents/Defendant: A.D. Sugdare, Adv.

Subject: Civil

Catch Words

Mentioned IN

Acts/Rules/Orders:
Indian Penal Code - Section 509

Cases Referred:
Maria Colaco and Anr. v. Alba Flora Herminda D'Souza and Ors. (2008) 5 SCC 268

Disposition:
Appeal dismissed

Citing Reference:

Maria Colaco and Anr. v. Alba Flora Herminda D'Souza and Ors.
Discussed

Case Note:
Criminal – Malicious Prosecution - Section 509 of Indian Penal Code, 1860 (IPC) -
Respondent filed complaint against appellant under Section 509 of I.P.C. – Alleged
that appellant outraged respondent’s modesty – Chargesheet filed – Complaint
dismissed - Appellant claimed damages for malicious prosecution – Trail Court
awarded damage – Appeal – Order set aside – Hence, second Appeal - Held, cannot
be said that complaint filed with malicious intention under circumstances - View
taken by Appellate Court not perverse – Second appeal dismissed.

JUDGMENT

P.R. Borkar, J.

1. Heard Shri A.S.Shelke, advocate for the appellant and Shri A.D. Sugdare, advocate for
the respondent.
2. This Second Appeal is directed against the judgment and decree passed by the learned
District Judge, Jalna in Regular Civil Appeal No. 179 of 1991 decided on 12.7.1999;
whereby appeal was allowed and the judgment and decree passed by the learned III Joint
Civil Judge, Senior Division, Jalna in Regular Civil Suit No. 444 of 1988 decided on
31.8.1991 was set aside.

3. Brief facts giving rise to this appeal are that the present appellant has filed suit for
compensation for malicious prosecution against the present respondent. The Trial Court
decreed the suit and awarded compensation of Rs. 1,500/-; whereas the learned District
Judge set aside the said decree and dismissed the suit.

4. Facts involved in appeal are undisputed at this stage. Thus, it is admitted position that
present appellant is the original plaintiff, who filed Regular Civil Suit No. 444 of 1988
against the respondent for damages for malicious prosecution. Present
respondent/defendant has filed the complaint against the appellant/plaintiff under Section
509 of Indian Penal Code at Kadim Jalna police station stating that on 12.8.1985 when
the present respondent was at her house, plaintiff went there and insulted her modesty by
saying that he was ready to pay Rs. 100/- if she accompany him for sexual act. After
complaint was lodged, police registered the crime, investigated the matter and sent
chargesheet against the present appellant. S.T.C. No. 3823 of 1985 was registered. The
learned Magistrate framed the charge. Four witnesses were examined. After considering
the evidence on record, the learned Magistrate acquitted the present appellant and
thereafter the appellant filed the suit for getting compensation for malicious prosecution.

5. This Court vide order dated 30.6.2008 framed following question of law.

Whether in the facts and circumstances of the present case, the first appellate court
committed patent error while reversing the decree on unsustainable ground that certified
copy of judgment rendered by the criminal court in S.T.C. No. 3823 of 1985 was not
placed on record and it is an observation based on wrong assumption of fact situation and
moreover, that could not be sole ground to dislodge the plaintiff's claim?

6. The record and proceedings is received and at Exh. 21 there is xerox of original
certified copy of the judgment delivered by the learned Judicial Magistrate, First
Class,Jalna in S.T.C. No. 3823 of 1985 decided on 1.1.1988. A summary procedure was
followed.

7. Perusal of Exh. 21 clearly indicates that it is not the original certified copy though
court fee stamp of Rs. 1.30 was affixed on it. Since it is not original certified copy, it can
not be said that this is admissible piece of evidence being copy of a copy. It is not that
original certified copy was not available or that another certified copy could not have
been obtained.

8. The appellate Court in Regular Civil Appeal No. 179 of 1991 in para 8, on internal
page 7, observed as under:
It is admitted fact that this particular copy is not certified one. I do not understand as to
how this lower court has exhibited and relied on such document which is not certified
copy of the judgment. Simply xerox copy of any document cannot be considered while
deciding such case.

9. The Trial Court in para 7 of its judgment observed as under:

The plaintiff has produced the zerox copy of the judgment and order of criminal case No.
3823/85 Exh.21. Plaintiff has also produced the certified copy of the judgment of STC.
No. 3823/85, the certified copy of the statement of present defendant in the said case, the
statement of witness No. 2 Sahebrao, the husband of present defendant and the statement
of PW-3, Raosaheb Kondiba....

10. Learned advocate for the appellant argued that these observations in para 7 show that
in the Trial Court besides xerox copy of the judgment, the certified copy of the judgment
was also produced. But fact remains that when record and proceedings is called for by
this Court, there is no original certified copy, but what is on record is the xerox certified
copy. Since all papers from 'D' file are not available, it is not clear whether original
certified copy was produced and taken away after decision of the Trial Court.

11. Learned advocate for the appellant also brought to my notice the observations in para
9 of the Trial Court judgment to the effect that, "the plaintiff has produced the certified
copy of the judgment and order of summary case No. 3823/85."

12. There is no dispute that in order to prove malicious prosecution, four elements must
be proved by the plaintiff, which are as under:

(i) Criminal proceedings must have been instituted or continued by the defendant;

(ii) The proceedings must have been unsuccessful, that is to say, must have been
terminated in favour of plaintiff;

(iii) The defendant must have acted without reasonable and probable cause; and

(iv) The defendant must have acted maliciously.

13. In this case, it is relevant to examine whether the respondent filed complaint without
reasonable and probable cause and secondly whether the complaint which culminated in
registering the first information report and ultimate trial, was lodged maliciously.

14. A reference may also be made to Section 509 of Indian Penal Code, though it is
cognizable offence. It reads as follows:

509. Word, gesture or act intended to insult the modesty of a woman:- Whoever,
intending to insult the modesty of any woman, utters any word, makes any sound or
gesture, or exhibits any object, intending that such word or sound shall be heard,or that
such gesture or object shall be seen, by such woman, or intrudes upon the privacy of such
woman, shall be punished with simple imprisonment for a term which may extend to one
year, or with fine, or with both.

15. The Trial Court which decreed the suit has considered the evidence led before it, so
also in the Criminal Trial. It is abundantly clear that in the criminal trial before the
Magistrate, the present respondent No. 1 deposed at Exh. 25. She admitted that she filed
complaint for commission of offence under Section 509 of Indian Penal Code against the
appellant. She denied that it was a false complaint. She further stated that she filed case
against the plaintiff on allegation that the plaintiff came to her house and told her to
accompany him for illicit purpose. She also proved her complaint lodged at Kadim Jalna
police station. It was submitted before the Trial Court that there was no independent
evidence to show that the prosecution was initiated without any probable and reasonable
cause. The quest on is whether the incident really happened. Merely because the
Magistrate was not satisfied with the evidence placed on record would not be sufficient.
Only if it is positively proved that the complaint lodged was false one and no such
incident had occurred, then only in the facts of present case, it could be said that there
was no reasonable and probable cause for the respondent to approach police station and
lodge the complaint against the appellant.

16. The record and proceeding is before this Court and it is clear that on behalf of the
plaintiff/appellant, the plaintiff is examined and he stated that the complaint was filed
with intent to take revenge and it was a false first information report that he had shown
currency note of Rs. 100/- to the complainant with intent to have the illicit relation with
respondent and false complaint was filed to lower down his reputation and to cause him
mental torture, and, therefore it is malicious.

17. Respondent Kusum Jadhav is examined at Exh. 25 and she stated that on the day of
the incident the plaintiff/appellant had come to her house and told her to accompany him
for illicit purpose and, therefore, she lodged the complaint. She stated in cross-
examination that there were 3-4 houses in the same Wada where she was residing and
about six persons were residing there in the building and they had gone for labour work
and they returned at 5.30 p.m. She further stated in her cross-examination that prior to the
incident only once she had seen the plaintiff when a quarrel had taken place between the
plaintiff and her husband and, therefore, she was knowing the plaintiff since prior to the
incident. In that incident the appellant is said to have attempted to assault her husband
with a belt. If such incident had occurred, then definitely the respondent would know the
appellant and would be in a position to identify him when he had come to the house. It is
further clear that Sahebrao Jadhav is husband of the respondent and he also supported the
case before the Magistrate.

18. One of the major ground on which the Trial Court has relied upon is that it is said that
one Limbaji Jadhav who was a witness to the incident is not examined. It may be noted
that the case before the Magistrate was a State case and it cannot be said that complainant
had any role to play as to whom the Assistant Public Prosecutor should have examined as
witnesses. So if benefit of doubt is given to the appellant merely for non-examination of
Limbaji, that would not necessarily prove that the complaint was false. One of the major
argument is that ordinarily no woman would stake her character simply to involve
somebody else in false prosecution. If a false case was to be filed, allegation could be of
any other incident. The offence alleged is bailable offence. If there was intention that
police should arrest the appellant and thereby his service should be in danger, in that
case, the person filing false complaint would have filed complaint for a more serious
incident. In this case, the Trial Court has held that the complaint was filed without
reasonable and probable cause and with malicious intention. The Appellate Court has
taken a contrary view and has held that in the facts and circumstances of the case it could
not be said that the complaint was false, lodged without probable and reasonable cause
and with malicious intention. It cannot be said that the view taken by the District Court is
perverse. It is one of the views possible and when two views are possible in Second
Appeal this Court cannot interfere. It would be necessarily a question of fact and not of
law.

19. The case of Maria Colaco and Anr. v. Alba Flora Herminda D'Souza and Ors.
MANU/SC/7170/2008 : AIR2008SC1965 is cited by the learned advocate for the
appellant. In that case it is held that normally in second appeal the High Court should not
interfere on the questions of fact, but if on the scrutiny of the evidence it is found that the
finding recorded by the first appellate court is totally perverse then certainly the High
Court can interfere in the matter as it constitutes a question of law.

20. In this view of the matter, I hold that in the first instance there was no certified copy
of the judgment on record as can be verified from the record before this Court and
secondly if it is presumed for the sake of arguments that it was there when the Trial Court
decided the matter, but was taken away subsequently for some reason, still the view taken
by the District Court is equally probable and hence there cannot be interference with it in
this Second Appeal.

21. In the result, the Second Appeal is dismissed. The parties are directed to bear their
own costs.

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MANU/DE/1038/2008

IN THE HIGH COURT OF DELHI

CM(M) No. 828/2008

Decided On: 25.07.2008


Appellants: Raj Rani and Anr.
Vs.
Respondent: Vijay Rani and Anr.

Hon'ble Judges:
Shiv Narayan Dhingra, J.

Counsels:
For Appellant/Petitioner/Plaintiff: P.K. Rawal, Adv.

Subject: Civil

Catch Words

Mentioned IN

Acts/Rules/Orders:
Civil Procedure Code (CPC) - Sections 114 and 151 - Order 47, Rule 1; Constitution of
India - Article 227

Cases Referred:
Rajindera Singh (Dead) through Lrs. and Ors. v. Prem Mai and Ors. 2007(2) RLR 546

Disposition:
Petition dismissed

Citing Reference:

Rajindera Singh (Dead) through Lrs. and Ors. v. Prem Mai and Ors.
Discussed

JUDGMENT

Shiv Narayan Dhingra, J.

1. The petitioner has filed this petition under Article 227 of the Constitution of India
against the order dated 12.8.2005 as well as against the order dated 7.3.2008 whereby the
review application made by the petitioner against the order dated 12.8.2005 was
dismissed. It will be fruitful to read the orders.

2. On 12.8.2005 the suit was fixed before the learned Civil Judge and learned Civil Judge
passed following order:
Suit No. 516/03
12.08.05

Present: Counsel for the parties along with plaintiff in person Today matter is fixed for
RPE and it is last opportunity for defendant to cross examine the PW, since even on last
date defendant failed to appear till 12.30 p.m. but still last opportunity was granted for
today. This is an older matter pending since 1997. In this case PE was filed on
28.04.2005 and counsel for defendant is requested to commence his cross examination of
the PW on the affidavit and the objections, if any, can be recorded and it will also be
subject to outcome of application since though, the Court is ready to hear arguments even
on the application now also but defendant seeks time. However, counsel for defendant
refuses to cross examine the PW present and submits that the matter be adjourned today
and he be given time to file a formal reply to application of plaintiff under Section 151
CPC.

On the other hand, it is submitted by plaintiff that this is only a delay tactics on behalf of
defendant and the matter is an old matter and defendant be not granted a date on this
pretext.

It is clear that though none appeared on last date of hearing for defendant when
application was filed but still defendant in interest of justice is granted an opportunity to
file the formal reply. However, it is mandate of amended CPC that after trial has
commenced the evidence must be completed expeditiously and the procedural delays
must not be allowed to stop the evidence in between. In fact with a view to expedite
completion of evidence, the Division Bench of Hon'ble High Court in ILR(2003) 1 Del
23 has held that defendant can be asked to file his affidavit in evidence even before he
has cross examined the plaintiff witnesses. It was observed that method of evidence by
affidavit has been devised for convenience of the parties to save their time and that of
court.

In present case, today was last opportunity for cross examination of PW and in view of
the fact that this is an old matter right of defendant to cross examine the PW is closed. It
is submitted that no more PE is to be lead. Hence, PE is also closed. Counsel for
defendant submits time and again that the Court must be sure before passing the order
since he intends to move to Hon'ble superior courts, he further submits that his each and
every submission must be recorded. Now at this stage counsel for defendant seeks time to
file application about issues having been framed on 03.03.05 also, after induction of a
new defendant No. 3. However, it is clear that no such application was moved or
objection made on previous dates though nearly six months have passed. But counsel for
defendant submits that he will move formal application in this regard. Let it be moved
with advance copy to OP. Now to come up for DE and FP, advance copy of the affidavit
of DW be supplied at least one week before NDOH, reply to applications be also filed
with copy to OP. Though it is an old case but a lightly longer date is granted in interest of
justice, as requested so that defendant can avail of legal remedies before Hon'ble Superior
Courts. Now to come up on 30.09.2005.
(Jitender Mishra)
Civil Judge, Delhi
12.08.2005

3. After the above order was dictated by the Court to the steno and while the Civil Court
was busy in dealing with other cases fixed on that day, the Counsel for the petitioner and
his associates gheoroed the Court and wanted that the file should be given to the Counsel
for inspection, knowing fully well that the Court of Civil Judge was working only with
one steno and it was not possible to type every order simultaneously. However, the
Counsel insisted that inspection should be allowed on the same day immediately and
what was the conduct of the Counsel was noted down by the Civil Judge and the order
reads as under:

12.08.2005
3.30 p.m.

At this stage, an inspection application is moved through counsel on behalf of defendant


No. 2. The case was listed today only and orders are not typed since there is only one
steno and besides regular work of daily orders, evidence, he has to take dictation in final
order and miscellaneous order, there is also extra work due to day being an execution
day. The order in case was also pronounced in the presence of counsel, hence, it was
submitted that orders may be inspected at later time, however, counsel who has also
brought a few other gentlemen is adamant and hampers judicial work and interfere in
work of steno and Reader. He forces the Court to retire to chamber for judicial work but
even there he and his colleagues are harassing the Court and staff, now he submits that
court must scribble in writing the reasons for the refusal. Since he will go to learned DJ in
between dictation and the scene and harassment, the court scribbles down the reason but
the counsel and his group lay siege to court room and are threatening the Reader and
forcing him to shuttle very frequently to chamber, demanding that court must stop other
work and their work must be allowed. All the requests have no effect on them. Judicial
work has come to a standstill.

Sd/- C.J.

4. Against these two orders of 12.8.2005, the petitioner preferred an application under
Order 47 Rule 1 read with Section 114 and Section 151 CPC. This application was
dismissed vide order dated 7.3.2008 by the successor of the Civil Judge, who observed
that the successor Civil Judge had no power to delete the remarks as prayed nor there was
any error apparent on the face of record calling for review of the order. In the review
application the contemptuous allegations were made against the Civil Court alleging that
it acted in vengeance.

5. It is apparent that when the Civil Judge was in the process of dictating the order, the
Counsel for the defendant/petitioner had time and again told the Civil Judge that he was
going to move the superior Courts against whatever order he passed therefore, he should
be very careful and wanted that each and every submission of the Counsel (howsoever
frivolous) must be recorded. However, instead of approaching a superior Court against
the order of the Civil Judge, the Counsel made a review application before the same
Court and when the review application was dismissed, he has approached this Court after
about three years of passing the orders. It is abundantly clear that the only effort of the
Counsel for the defendant was to prolong the case, to see that the case did not proceed
further even if he had to hold the Court as captive and he acted with this motive in mind.
A review lies only on the ground that there was error apparent on the face of the record.
The proceedings of the day recorded by the Court to show as to what transpired on that
day and how it transpired, cannot be amenable to review. In the guise of application for
review, a prayer cannot be made for recalling the order. Even an error of law cannot be a
ground for review, only a manifest error can be the ground for review. Despite the settled
law as to what can be the grounds for review, the petitioner's counsel who had threatened
the Court and not allowed the Court to function for a part of the day did not approach the
next higher Court either complaining against the conduct of the Civil Court or
challenging the legality of the order. After dragging the case for three years in the review,
he has now approached this Court under Article 227 of the Constitution of India against
the order passed by the Review Court and against the initial orders, making allegations
against the judge and giving explanation for his conduct.

6. While in the legal profession there are certain professionals, who expertise in different
branches of law and take pride in that, there are others who expertise in stalling the
Courts and the cases and are known for that and they take pride in that. Such advocates
are engaged only to see that the case does not proceed further and can be dragged as long
as possible. They are known as 'adjournment expert' advocates.

7. One of the grounds the petitioner has stated for challenging the order of the trial Court
is that the order passed by the trial Court was arbitrary and contrary to law. However, the
Counsel for the petitioner failed to point out as to which law was violated by the trial
Court. Is it law of the land that if the advocate does not want to cross examine the witness
he has a right to stall the Court and right to threaten the Court that he would go to the
superior Court if the case is not adjourned' The advocate could have cross examined the
witness and got his objections recorded against the affidavit of testimony filed in
examination-in-chief, during cross-examination. Nobody could have stopped the
advocate from making necessary applications subsequently. The advocate cannot insist
upon the Court that he should be first allowed to go and bring an application and the
Court must wait till he brings his application and his application must be decided first and
then the Court should ask him to cross examine the witness. The other ground taken is
that the order caused prejudice to the petitioner and is liable to be set aside. I find no
reason to allow this petition on this ground even.

8. If a party chooses to engage an advocate, who has no time to conduct his case and who
does not want to cross examine the witness and threatens the Court, an order passed by
the Court has to be faced by such a party. An order refusing to adjourn the case under
threats of an advocate cannot be set aside because it has caused prejudice to the party.
Every order passed by a Court goes in favour of one party and simultaneously goes
against the other party. An order can be set aside only on the ground that it is contrary to
law and not on the ground that it caused prejudice to the party.

9. The third ground is that the Court acted in a biased manner and therefore, the order
was liable to be quashed. If a Judge acts to uphold the dignity and majesty of the Court
and directs that the case must proceed in accordance with law, it does not mean that the
Court acted in bias. The Civil Court in this case only wanted that the witness, who was
present for cross examination must be cross examined on that day and all objections of
the petitioner regarding admissibility of the evidence be recorded, but the Counsel was
adamant to see that the case was adjourned. The insistence of the Court that the witness
must be cross examined does not amount to bias.

10. The next ground is that the Civil Judge acted in haste and did not appreciate the facts
and circumstances of the case. Asking an advocate to cross examine the witness on the
day when the witness is present does not amount to acting in haste. Not budging to the
pressure and refusing to get cowed down by the threats and tactics of the advocate and
trying to maintain the dignity and majesty of the Court does not amount to acting in
haste. The Court is not supposed to act under threat and fear. Every Court is supposed to
perform its duty fearlessly. If the Courts start acting under the threats of such advocates,
who can muster physical strength or abuse their professional skill, the entire judicial
system shall crumble. The Civil Judge in this case must be appreciated that he refused to
cow down and insisted that the witness, who was present must be cross examined on that
day. This is what law requires and this is what propriety requires.

11. The allegations made by the petitioner regarding the Court not acting in a transparent
manner and having not dictated the order in open Court or in the presence of both the
parties are malicious and baseless allegations made by the petitioner deliberately to
malign the judge and such allegations cannot be entertained, that also, when neither the
Counsel nor the party immediately brought these facts to the notice of this Court having
supervisory powers over the lower courts. The Counsel submitted that a party has a right
to engage as many Counsel as it likes and the trial Court unnecessarily insisted upon the
presence of the initial advocate. True, a party has a right to engage as many Counsel as it
likes but these Counsel have to remain under the discipline of law. The party cannot
engage Counsel to ghereo the Court and cow down the Court. Where a party engages
many Counsel, it cannot also take an excuse that the main Counsel is busy or he is not
available on that day, etc. Each and every Counsel engaged by the party is equally
responsible for the prosecution of the case and to maintain the decorum of the Court.

12. The plea of the Counsel for the petitioner that the Court below exercised jurisdiction,
vested in it, illegally and with material irregularity is also baseless. The Court conducting
the trial is the master of the situation. The Counsel for a party cannot dictate to the Court
as to whether the witness would be examined or not. The Counsel can only make his
submissions. If submissions are not accepted, he is bound to perform his professional
duty as per law and cannot thrust his opinion or desire on the Court. He has the liberty to
approach the next higher Court but in the garb of saying that his pleas are not being
recorded, the Counsel cannot be allowed to stall the proceedings of the Court either by
lung power or by show of muscle power of his associates. After three years, the counsel
cannot take the plea that the Court below did not record the proceedings correctly or his
objections were not recorded.

13. The plea of the petitioner's counsel that the submissions of the petitioner were not
correctly understood by the Court below and the order dated 12.8.2005 was passed
because of misunderstanding is baseless. The Court below passed the order recording
what transpired in the Court.

14. One of the biggest reasons of huge pendency in the Courts is that a lot of Court's time
is wasted in futile adjournments. A civil case which should normally be over within a
year's time is dragged to a number of years, sometimes for 20 to 40 years. Lot of Court's
time is wasted when no fruitful work is done on the dates, the case is fixed and the
adjournments are sought on one or the other ground. These adjournments are sought
because one party is always interested in adjournments and in prolonging the case, as
prolonging the case itself results in substantial benefit to the party as it frustrates the
effort of the other party in getting the dispute adjudicated through Court in time. Recently
the Hon'ble Supreme Court in Rajindera Singh (Dead) through Lrs. and Ors. v. Prem Mai
and Ors. 2007(2) RLR 546 observed as under:

9. Before parting with this case we would like to express our anguish at the delay in
disposal of cases in our law courts. The present case is a typical illustration. A suit filed
in 1957 has rolled on for half a century. It reminds one of the case Jarndyce v. Jarndyce
in Charles Dickens' novel 'Bleak House' which had rolled on for decades, consuming
litigants and lawyers alike.

10. We may quote a passage from 'Bleak House' written in Dickens' inimitable style:

Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become
so complicated, that no man alive knows what it means. The parties to it understand it
least; but it has been observed that no two Chancery lawyers can talk about it for five
minutes, without coming to a total disagreement as to all the premises. Innumerable
children have been born into the cause; innumerable young people have married into it;
innumerable old people have died out of it. Scores of persons have deliriously found
themselves made parties in Jarndyce and Jarndyce, without knowing how or why; whole
families have inherited legendary hatreds with the suit. The little plaintiff or defendant,
who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled,
has grown up, possessed himself of a real horse, and trotted away into the other world.
Fair wards of court have faded into mothers and grandmothers; a long procession of
Chancellors has come in and gone out; the legion of bills in the suit have been
transformed into mere bills of mortality; there are not three Jarndyces left upon the earth
perhaps, since old Tom Jarndyce in despair blew his brains out at a coffee house in
Chancery Lane; but Jarndyce and Jarndyce still drags its dreary length before the court,
perennially hopeless.

Is this not descriptive of the situation prevailing in India today


11. People in India are simply disgusted with this state of affairs, and are fast losing faith
in the judiciary because of the inordinate delay in disposal of cases. We request the
concerned authorities to do the needful in the matter urgently to ensure speedy disposal of
cases if the people's faith in the judiciary is to remain.

In view of my above discussion, I find no merits in this petition.

The petition is hereby dismissed with cost of Rs. 20,000/- to be deposited in Delhi High
Court Legal Aid Committee.

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MANU/MP/0399/2008

Equivalent Citation: 2009(1)MPHT99

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR

Decided On: 21.08.2008

Appellants: Narmada Bachao Andolan


Vs.
Respondent: State of Madhya Pradesh and Ors.

Hon'ble Judges:
A.K. Patnaik, C.J. and Sanjay Yadav, J.

Subject: Civil

Catch Words

Mentioned IN

Case Note:
Constitution – Corruption - Opportunity of Hearing – Petitioner’s organization
made allegation of Irregularities and corruption in implementation of measures for
resettlement and rehabilitation project – Prayed for investigation by Central
Bureau of Investigation – Hence, present petition – Whether Court is empowered to
appoint commission or investigating body to inquire into allegations under Article
32 of constitution - Held, Court can appoint commissions for purpose of gathering
facts and data in regard to a complaint of breach of fundamental right made on
behalf of weaker Sections of society – Commission appointed and directed to fix
time and place of its sittings by public notice - commission will afford opportunity of
hearing to all persons against whom commission is likely to record finding including
opportunity to produce any evidence in his defence – Hence, petition disposed of
accordingly

ORDER

A.K. Patnaik, C.J.

1. The petitioner is an organization of farmers, adivasis, labourers, fish workers and other
people from the Narmada Valley affected by the construction of the Sardar Sarovar
Project on Narmada River and has filed this writ petition as a Public Interest Litigation
alleging various irregularities and corruption in implementation of measures for
resettlement and rehabilitation of the project affected persons of the Sardar Sarovar
Project in the State of Madhya Pradesh and has prayed for an investigation into the
allegations by an independent agency such as the Central Bureau of Investigation (CBI).

2. The facts briefly are that the Sardar Sarovar Project is an Interstate Project involving
the States of Gujarat, Madhya Pradesh, Maharashtra and Rajasthan and to resolve the
disputes between these States, the Narmada Water Disputes Tribunal (for short 'the
Tribunal') was set up in the year 1969 under the Interstate Water Disputes Act, 1956. In
year 1979, the Tribunal made an award (hereinafter referred to as 'the Narmada Award')
which inter alia stipulated measures for resettlement and rehabilitation (R & R) of the
Project Affected Persons (for short 'the PAPs') of the Sardar Sarovar Project in Gujarat,
Madhya Pradesh and Maharashtra. The R & R measures inter alia stipulated that (i) every
Project Affected Family (PAF) whose 25% or more land was submerged by the Project
would be offered a minimum of two hectares of cultivable land; (ii) every house of PAP
likely to be affected by submergence will be acquired under the Land Acquisition Act,
1894, and compensation will be awarded to the concerned PAPs; (iii) every PAP of the
age of 18 years on the date of notification under Section 4 of the Land Acquisition Act,
1894 will be eligible to receive all the R & R benefits; and (iv) the Government shall
establish rehabilitation villages for R & R of the PAPs with civic amenities including
roads, drainage, Panchayat Bhawan, Schools, Dispensaries, Seed Stores etc. besides the
land for cultivation by the PAPs. The Narmada Control Authority (for short 'the NCA')
was constituted to monitor inter alia the implementation of the R & R measures stipulated
in the Narmada Award for the benefit of 40,000 PAFs residing in 193 villages in Madhya
Pradesh in terms of the Narmada Award. In the judgment dated 18-10-2000 in the first
Narmada Bachao case reported in (2000) 10 SCC 664 and in the judgment dated 15-3-
2006 in the second Narmada Bachao case reported in (2005) 4 SCC 32, the Supreme
Court has held that R & R measures must ensure that PAPs/PAFs were better off even
after their displacement and their rights to life under Article 21 of the Constitution of
India were not violated.

3. The petitioner has alleged in the writ petition that although crores of rupees have been
spent by the State Government through the Narmada Valley Development Authority (for
short 'the NVDA') to implement the aforesaid R & R stipulations in the Narmada Award,
the benefits of the R & R stipulations in the Narmada Award have not been actually
received by the PAPs/PAFs on account of large scale irregularities and corruption as
detailed in the writ petition. The irregularities and corruption as detailed in the writ
petition broadly can be categorised under the following heads:

(A) Fake Registration of sale-deeds:

The Narmada Award stipulates that each and every cultivator and his adult son whose
more than 25% of land holding is submerged, will be entitled to a minimum five acres
cultivable and irrigable land which will be made available by the State of Madhya
Pradesh. The State of Madhya Pradesh however introduced a Special Rehabilitation
Package (for short 'SRP') whereunder each PAF was to receive Rs. 5,58,000/- in two
installments in cash for purchase of this five acres of land. The first instalment was to be
received by the PAF before registration of sale-deed and the second instalment was to be
received by the PAF only after registration of the sale-deed. The petitioner has alleged
that fake registrations of sale-deeds have taken place under the SRP during the last one &
half years which would show that in some cases land is not in existence, in some cases
land has been sold by persons who do not exist, in some cases Government land has been
shown to have been sold, in some cases land already acquired by the Government for
some other project is shown to have been sold, in some cases land has been sold not by
the real owners but some other persons without the knowledge of the real owners and in
some cases the same area of land has been sold to more than one PAF. The petitioner has
stated that the Tehsildar Manwar Tehsil, District Dhar, has submitted a report dated 14-9-
2007 to the Land Acquisition Officer, Narmada Valley Development Authority (for short
'NVDA') providing details of 57 instances of fake registration of sale-deeds under the
SRP and has recommended that the NVDA should file FIRs against the accused persons.
Similarly, the Naib Tehsildar, Badwani District, has submitted a report dated 25-5-2007
about a number of fake registration of sale-deeds for the purpose of receiving the second
instalment under the SRP.

(B) Rampant corruption in payment of compensation for houses acquired under the Land
Acquisition Act, 1894:

Under the Narmada Award, every house likely to be affected by submergence was to be
acquired under the Land Acquisition Act, 1894 and compensation was to be awarded to
the PAPs/PAFs but because of rampant corruption by land acquisition officials,
middlemen and officials of the NVDA crores of public money have been siphoned off in
the name of compensation. After the notification issued under Section 4 of the Land
Acquisition Act, 1894, some houses were constructed and were included in the list of
houses likely to be submerged only for the purpose of receiving compensation. The same
houses were listed as two separate houses and the compensation disbursed twice. Even
persons from outside submergence areas have constructed houses in submergence
villages only with the intention to get some compensation. The petitioner has alleged that
all this was possible with the help of corrupt officials and middlemen. The petitioner has
also alleged that in Village Chhotta Barda, 135 houses have been included for
compensation even though these houses were constructed after the issuance of
notification under Section 4 of the Land Acquisition Act, 1894 and the houses were
constructed only for the purposes of receiving compensation and although the residents of
the village made complaints to the District Collector, Badwani, no action was taken
because the corrupt officials have received their shares of compensation as well.

(C) Corruption in the process of declaration of PAPs:

Under the Narmada Award, every affected person above the age of 18 years on the date
of notification under Section 4 of the Land Acquisition Act, 1894, was eligible to receive
the rehabilitation benefits as per entitlement. The petitioner has alleged that several
ineligible persons have been declared as PAPs and given R & R entitlement and the
benefits have been shared between the corrupt officials and the ineligible persons. The
petitioner has alleged that this kind of corruption has taken place mainly in Villages
Khedi and Piplud in Tehsil and District Badwani where lakhs of rupees have been
disbursed to ineligible persons and minors.

(D) Corruption at R & R sites:

The petitioner has alleged that in the R & R sites, civic amenities including roads,
drainage, Panchayat Bhavan, Schools, Dispensaries, Seed Stores etc. were to be
constructed and crores of rupees were spent on such civic amenities on account of an
unholy nexus between the contractors and the officials, the quality of construction of the
amenities has been very poor and crores of rupees have been siphoned off in the bargain.
The petitioner has further alleged that house-plots once allotted to the poor in R & R sites
have been re-allotted to the rich and powerful in alliance with the corrupt officials. The
petitioner has stated that the Comptroller Auditor General (for short 'the CAG') in the
audit report for the State Government for the year ending 31st March, 2004 has
confirmed such corruption by the NVD A in rehabilitation works in the Madhya Pradesh.

4. The respondents have filed a common return stating that the issue of fake registrations
has been discussed by the R & R Sub Group of NCA in its 68th meeting held on 13-2-
2007 and 69th meeting held on 16-4-2007 at New Delhi and it was decided that all the
registrations so submitted by the Project Affected Families (PAFs) in reference to SRP
must be examined. The respondents have further stated in return that again in the 78th
meeting of NCA held on 3-5-2007 at New Delhi, the issue was discussed in detail and the
Government of Madhya Pradesh has instructed the Collectors to verify the genuineness of
all the registrations submitted by the PAFs and on 24-7-2007 the Chief Secretary of the
Madhya Pradesh took a meeting of NVD A Officials and the Collectors and instructed
them to expedite the ongoing process of verification of all the registrations and also to
take strict action against the persons found guilty with a strict caution and alertness in
new registrations.

5. The respondents have stated in the return that on 11-9-2007 the Divisional
Commissioner, Indore, issued detail instructions to Collectors and Superintendents of
Police on the procedure to be followed for inquiry including filing of FIRs, submitting
challan before the Competent Courts and taking action against Government
Officials/Stamp Vendors etc. Examples of action taken by the State Government so far
have also been detailed in the return and it is contended in the return that all these actions
taken by the State Government confirm the commitment of the State Government to
tackle the issue legally and administratively with utmost seriousness and to punish all
guilty persons. In the return, it is thus contended that there is therefore no need of an
inquiry by an independent agency.

6. Regarding allegations of corruption, the respondents have contended that these


allegations are sweeping allegations and have been made without any cogent evidence
and on the basis of only newspaper reports which may not have any truth. The
respondents have also contended in the return that the allegations, which are not factual
and false, have also been raised in the writ petition using strong language without any
factual basis whatsoever.

7. The respondents have also stated in the return that the Grievance Redressal Authority
(for short 'the GRA') under the Chairmanship of Retired Justice Shri N.G. Karambelkar is
functioning and the GRA is organizing hearing camps even at tehsil headquarters and so
far 12674 complaints have been registered in the GRA and out of these, 10251
complaints have been redressed and hence it is not correct to say that the GRA is not
functioning well. The respondents have further contended in the return that the Supreme
Court in its order dated 9-9-2002 in W.P. No. 328/2002 has held that the GRA having
been put in place, there is no reason for the Court to interfere and if an oustee or a person
affected by the project has any grievances, it is open to him to approach the GRA. The
respondents have accordingly contended that the present Writ Petition No. 14765/2007
which covers not only corruption but also the implementation of R & R stipulations under
the Narmada Award, should be returned to the petitioner to agitate the matter before the
GRA as per the order dated 9-9-2002 of the Apex Court in W.P. No. 328/2002.

8. The respondents have stated in the return that for making an analysis of 686 complaints
of fake registration, informations were sought from the PAFs. 23% PAFs replied that
they have been cheated, 35% PAFs did not reply or were not available in the concerned
villages, 20% PAFs said that they have done the fake registration for personal reasons
and 5% PAFs said that they did it to purchase residential houses and/or utilize the money
for adopting new occupation/business whereas 13% PAFs stated that they were still in
search of genuine land to purchase whereas 4% PAFs said that they did so because prices
of land in the vicinity were high. The respondents have further stated in the return that in
each and every case of fake registration, payment has been made to the PAFs through
account payee cheque or Intra-Bank money and it is for this reason that the Government
decided in filing FIRs against all the accused including PAFs, but thereafter the
Government decided that before filing FIR against a PAF, the PAF must be given an
opportunity of hearing so that he may submit his defence/claim.

9. The respondents have filed an additional return stating that considering the number of
complaints which were received from the representatives of the petitioner organisation
and considering that 686 fake registrations have been alleged under the SRP, the State
Government has by notification dated 18-7-2008 issued under Section 3 of the
Commissions of Inquiry Act, 1952, appointed Shri N.C. Nagraj, a Retired District &
Sessions Judge as a single man Commission of Inquiry, to make an inquiry into the
allegations of preparation and submission of fake registration in Badwani, Dhar,
Khargone and Dewas Districts mainly in the year 2006-07 under the SRP for PAFs/PAPs
of Sardar Sarovar Project. Respondents have further stated in the additional return that
the headquarters of the Commission has been fixed at Indore and the Commission has
been asked to complete the enquiry and submit the report to the State Government within
a period of six months from the date of publication of notification.

10. When the case was taken up for hearing on 22-7-2008, Ms. Medha Patkar appearing
for the petitioner submitted that in Writ Petition (C) No. 328/2002 pending before the
Supreme Court, the question of fake registration of sale deeds under SRP, corruption in
payment of compensation for houses acquired under the Land Acquisition Act, 1894,
corruption in the process of declaration of PAPs and corruption at R & R sites have not
been raised and it will be clear from the order dated 10-3-2005 of the Supreme Court in
I.A. No. 18-35/2006 in W.P. No. 328/2002 that the Supreme Court has taken note of the
fact that the present writ petition is pending before this Court on the question of fake
registration of sale of land. She submitted relying on the rejoinder filed by the petitioner
that the GRA has not taken any action on the complaints made by the petitioner with
regard to fake registrations and other corruption and irregularities in the implementation
of R & R stipulations of the Narmada Award because the GRA was of the view that these
are matters outside its authority. She submitted that in the first Narmada Bachao case
(supra), the Supreme Court has held that persons who are displaced by the construction of
the dam must be rehabilitated and resettled in a manner which will make them better off
so that their fundamental right to life guaranteed by Article 21 of the Constitution, is not
affected and therefore, this Court should direct an independent investigation by the CBI
to find out whether the benefits as per the Narmada Award have actually been received
by the PAPs/PAFs.

11. She submitted that the one man Commission of Shri N.C. Nagraj retired District &
Sessions Judge, has been appointed by the Government with undue haste ignoring the
provisions of Section 3 of the Commissions of Inquiry Act, 1952, under which the
Commission can be appointed only by a resolution passed by the State Legislature. She
submitted that the State Government has appointed Shri N.C. Nagraj, a Retired District &
Sessions Judge, during the pendency of the writ petition only to derail the purpose of this
PIL. She argued that since serious allegations against very powerful persons of the
Government have been made in this writ petition, the Court should direct the CBI to
investigate into the allegations and in case there are legal barriers in directing the CBI
investigation, the Court should direct appointment of a Multi Member Judicial
Commission under the Chairmanship of a Retired Supreme Court Judge or at least a High
Court Judge and a special investigation team for unearthing hidden evidence and assisting
the Multi Member Judicial Commission should be constituted. She further argued that the
Court should specify the terms of reference elaborately for the Commission and should
fix a time limit within which the Commission should submit the report. She submitted
that the petitioner has filed I.A. No. 4447/2008 for directing suspension of all cash
disbursements except in accordance with the Narmada Award, Supreme Court judgments
and the State Policy.

12. Mr. R.N. Singh, learned Advocate General appearing on behalf of the respondents, on
the other hand, submitted that in the return the respondents have stated that there are
serious allegations of fake registrations of sale-deeds and a number of FIRs have been
lodged and the authorities have been instructed to take strict action in the matter. He very
fairly submitted that the State Government does not want to shield anybody and is
determined to take action against whoever is found guilty. He further submitted that since
the investigations are being carried out pursuant to the FIRs already lodged and the one
man Commission of inquiry under the Commissions of Inquiry Act, 1952 has been
appointed by the State Government, the Court should not direct an investigation by the
CBI.

13. Mr. Dharmendra Sharma, learned Counsel appearing for the NCA, submitted that no
relief whatsoever has been claimed against the NCA. He further submitted that the
minutes of the various meetings of the NCA annexed to the writ petition would show that
there are complaints of large number of fake registration of land in Kukshi and Manawar
Tehsils of District Dhar and Badwani and Thikri Tehsils of District Badwani. He also
referred to the said minutes of the meetings of NCA to show that the Government of
Madhya Pradesh has been asked to inform the latest progress of an investigation done and
legal action taken into the various cases of fake registration.

14. We are unable to accept the contention of the respondent raised in the return of the
respondents that the remedy of the petitioner is to approach the GRA and not this Court
under Article 226 of the Constitution because we find that despite the fact that the GRA
under the Chairmanship of a retired High Court Judge has been functioning, there are
more than 600 complaints of fake registrations of sale-deeds under the SRP and also
allegations of other irregularities committed at the time of implementation of R & R
measures stipulated in the Narmada Award and these complaints have also been brought
to the notice of the NCA and the NCA has asked the Government of Madhya Pradesh to
look into the complaints. Had the GRA been dealing with these complaints, it would not
have been necessary for the NCA to ask the State Government to look into the complaints
and take necessary action in accordance with law. Presumably, the GRA may not have
entertained the complaints with regard to fake registrations and corruption and
irregularities on the ground that these complaints are outside its authority and it does not
have the powers to deal with such complaints.

15. We do not however, think that on the materials placed before us, we can direct an
investigation by the CBI as prayed for in the writ petition because as rightly apprehended
by the petitioner there are legal barriers to an investigation by the CBI. A plain reading of
Section 157 of the Code of Criminal Procedure, 1973 shows that if, from information
received or otherwise, an Officer in Charge of a Police Station has reason to suspect the
commission of an offence which he is empowered under Section 156 to investigate, he
shall forthwith send a report of the same to a Magistrate empowered to take cognizance
of such offence upon a police report and shall proceed in person, or shall depute one of
his subordinate officers to proceed, to the spot, to investigate the facts and circumstances
of the case.

16. Unless, therefore, the information received or otherwise discloses commission of


offences, the CBI should not be directed to investigate. In the instant case, we find that
there are references to a number of complaints of fake registration as well as to the
statistics of FIRs filed in different police stations alleging fake registration and there are
also reference to allegations of other irregularities and corruption, but the FIRs or the
complaints are not before the Court. On the basis of the information furnished in the writ
petition, replies and rejoinder along with annexures thereto, it is difficult for us to hold
that there is reason to suspect the commission of offences under the Indian Penal Code or
any other law. It is only when more facts and more materials come to light through a fact
finding inquiry that the Court can take a view whether there is reason to suspect the
commission of offences under the Indian Penal Code or any other law. At this stage,
therefore, we cannot direct investigation by the CBI as prayed for in the writ petition.

17. In State of Karnataka v. Arun Kumar Agarwal and Ors. MANU/SC/0773/1999 :


AIR2000SC411 , various allegations were made in the writ petition in respect of
allotment of power project by the Karnataka Electricity Board to Mangalore Power
Corporation and a prayer was also made by the petitioners seeking investigation by
appropriate agencies into the allegations and seeking initiation of criminal proceedings
against the guilty persons as per law and the High Court of Karnataka directed the State
of Karnataka to get an FIR registered with the CBI under the provisions of Delhi Special
Police Establishment Act for various cognizable offences without naming any person or
group of persons as accused and further directed that the Director General of the CBI
shall direct the investigation to be conducted by an officer under the supervision and
control of an officer not below the rank of Deputy Director General of the CBI. The State
Government of Karnataka carried the matter to Supreme Court in a Special Leave
Petition and the Supreme Court while setting aside the order made by the High Court and
allowing the appeal observed:

The acts of persons will not be subject of criminal investigation unless a crime is reported
to have been committed or reasonable suspicion thereto arises. On mere conjecture or
surmise as a flight of fancy that some crime might have been committed, somewhere, by
somebody but the crime is not known, the persons involved in it or the place of crime
unknown, cannot be termed to be reasonable basis at all for starting a criminal
investigation. However, condemnable be the nature or extent of corruption in the country,
not all acts could be said to fall in that category. The attempt made by the High Court in
this case appears to us to be in the nature of blind shot fired in the dark without even
knowing whether there is a prey at all. That may create sound and fury but not result in
hunting down the prey.

18. The respondents have however stated in their additional return that me General
Administration Department has already issued a notification dated 18-7-2008 appointing
Shri N.C. Nagraj, a Retired District & Sessions Judge, as a single man Commission of
Inquiry to inquire into the allegation of preparation and submission of fake registration in
Badwani, Dhar, Dewas and Khargone Districts in the year 2006-07 under the SRP for P
AFs/P APs of Sardar Sarovar Project in exercise of powers under Section 3 of the
Commissions of Inquiry Act, 1952. The contention of Ms. Patkar that an appointment of
the Commission under Section 3 of the Commissions of Inquiry Act, 1952, can only be
pursuant to the resolution of the Legislature of the State, is not correct. Section 3 of the
Commissions of Inquiry Act, 1952 (for short 'the 1952 Act'), is quoted hereinbelow:

Section 3. Appointment of Commission.- (1) The Appropriate Government may, if it is of


opinion that it is necessary so to do, and shall, if a resolution in this behalf is passed by
each House of Parliament or, as the case may be, the Legislature of the State, by
notification in the Official Gazette, appoint a Commission of Inquiry for the purpose of
making any inquiry into any definite matter of public importance and performing such
functions and within such time as may be specified in the notification, and the
Commission so appointed shall make the inquiry and perform the functions accordingly:

Provided that where any such Commission has been appointed to inquire into any matter-

(a) by the Central Government, no State Government shall, except with the approval of
the Central Government, appoint another Commission to inquire into the same matter for
so law as the Commission appointed by the Central Government is functioning;

(b) by a State Government, the Central Government shall not appoint the Commission
appointed by the State Government is functioning, unless the Central Government is of
opinion that the scope of the inquiry should be extended to two or more States.

(2) The Commission may consist of one or more members appointed by the Appropriate
Government, and where the Commission consists of more than one member, one of them
may be appointed as the Chairman thereof.

(3) The Appropriate Government may, at any stage of an inquiry by the Commission fill
any vacancy which may have arisen in the office of a member of the Commission
(whether consisting of one or more than one member).

(4) The Appropriate Government shall cause to be laid before each House of Parliament
or as the case may be, the Legislature of the State, the report, if any, of the Commission
on the inquiry made by the Commission under Sub-section (1) together with a
memorandum of the action taken thereon, within a period of six months of the
submission of the report by the Commission to the Appropriate Government.

19. It will be clear from Sub-section (1) of Section 3 of the 1952 Act that the Government
may, if it is of opinion that it is necessary so to do, appoint a Commission of Inquiry for
the purpose of making an inquiry into any definite matter of public importance and the
Government shall, if a resolution in this behalf is passed by each house of the Legislature
of the State, also appoint a Commission of Inquiry for the purpose of making an inquiry
into any definite matter of public importance. Hence, even where a resolution is not
passed by each house of the State Legislature for appointment of a Commission, the
Government may appoint a Commission if it is of opinion that it is necessary to do so for
the purpose of making an inquiry into any definite matter of public importance, but where
a resolution is passed in that behalf in each house of the State Legislature, the
Government shall appoint a Commission of Inquiry for the purpose of making an inquiry
into any definite matter of public importance.

20. Sub-section (4) of Section 3 of the 1952 Act, however, would show that-after the
inquiry is made, the Government shall cause to be laid before each House of Legislature
of the State, the report, if any, of the Commission of Inquiry altogether with a
memorandum of the action taken thereon within a period of six months of the submission
of report by the Commission to the Government. Thus, the report, if any, submitted by
the one man Commission of Inquiry Shri N.C. Nagraj, a Retired District & Sessions
Judge, will have to be placed before the Legislature of the State along with memorandum
of action taken on the report. The facts found by the Commission appointed under
Section 3 of the 1952 Act in other words, are for information of and action by the State
Government and for information of the houses of the State Legislature. Hence, the High
Court will have virtually no role to play on the report of the one-man Commission
appointed by the State Government under Section 3 of the 1952 Act by the notification
dated 18-7-2008 if and when submitted.

21. By the two judgments of the Supreme Court in the first and second Narmada
Bachao's cases (supra), the Supreme Court has held that rehabilitation and resettlement of
oustees of the Sardar Sarovar Project is part of their fundamental right to life guaranteed
under Article 21 of the Constitution of India, and through the R & R measures, the
oustees must be better off after displacement. For this reason, the R & R measures in the
Narmada Award inter alia stipulate that (i) every affected family whose 25% or more
land is submerged by the Project would be offered a minimum of two hectares of
cultivable land; and (ii) the Government shall establish rehabilitation villages for R & R
of the PAPs with civil amenities including roads, drainage, Panchayat Bhawan, Schools,
Dispensaries, Seed Stores etc., besides the land for cultivation by the PAPs. If a large
number of PAFs whose 25% or more land was submerged has not actually been able to
get a minimum of two hectares of cultivable land and the civic amenities in the R & R
sites are of substandard quality because of large scale corruption, then the High Court
whose duty is to ensure enforcement of fundamental right in exercise of powers under
Article 226 of the Constitution cannot remain indifferent. The High Court will have to
find out through a Commission on which it has confidence and trust that the oustees have
not been duped by fake registrations of sale-deeds for purchase of land for cultivation and
the public money spent for construction of civic amenities in the R & R sites have not
been misused for extraneous purposes.

22. In Bandhua Mukti Morcha v. Union of India and Ors. (1984) 3 SCC 461, an
organisation motivated to release bonded labourers in the country addressed a letter to a
Judge of the Supreme Court complaining that in two named stone quarries in Faridabad
District there were a large number of labourers from different States working under
inhuman conditions and many of whom were bonded labourers and prayed for issuing a
writ for proper implementation of constitutional and statutory provisions. The Supreme
Court treated the letter as a writ petition under Article 32 of the Constitution and issued
notice and appointed two advocates as Commissioners to visit the stone quarries and to
interview each of the persons whose names were mentioned in the letter of the petitioner
as also a cross-section of the other workers with a view to finding out whether they were
willing to work in those stone quarries and also to inquire about the conditions in which
they were working.

23. One of the preliminary objections raised by the respondents Union of India was that
in the proceedings under Article 32, the Court was not empowered to appoint any
commission or an investigating body to inquire into the allegations made and make a
report to the Court on the basis of inquiry to enable the Court to exercise its power and
jurisdiction under Article 32 of the Constitution. Rejecting the preliminary objections,
P.N. Bhagwati, J., as he then was, observed:

Now it is obvious that the poor and the disadvantaged cannot possible produce relevant
material before the Court in support of their case and equally where an action is brought
on their behalf by a citizen acting pro bono publico, it would be almost impossible for
him to gather the relevant material and place it before the Court. What is the Supreme
Court to do in such a case? Would the Supreme Court not be failing in discharge of its
constitutional duty of enforcing a fundamental right if it refuses to intervene because the
petitioner belonging to the underprivileged segment of society or a public spirited citizen
espousing his cause is unable to produce the relevant material before the Court. If the
Supreme Court were to adopt a passive approach and decline to intervene in such a case
because relevant material has not been produced before it by the party seeking is
intervention, the fundamental rights would remain merely a teasing illusion so far as the
poor and disadvantaged Sections of the community are concerned. It is for this reason
that the Supreme Court has evolved the practice of appointing Commissions for the
purpose of gathering facts and data in regard to a complaint of breach of a fundamental
right made on behalf of the weaker Sections of the society.

These observations of P.N. Bhagwati, J. of the Supreme Court equally apply to the
exercise of jurisdiction of the High Court under Article 226 of the Constitution for
enforcement of fundamental rights.

24. We therefore appoint Shri Justice S.S. Jha, a retired Judge of this Court, as a
Commission to inquire into and submit a report on the following matters:

(i) Whether there have been fake registrations of sale-deeds under the SRP for
rehabilitation and resettlement of PAFs/PAPs of the Sardar Sarovar Project in the districts
of Badwani, Dhar, Jhabua, Khargone and Dewas and, if so, the details of such fake
registrations of sale-deeds and the persons responsible for such fake registrations of sale
deeds ?

(ii) Whether the civil amenities in the R & R sites such as road, drainage, panchayat
bhawan, schools, dispensaries, seeds stores, etc. are of substandard quality as compared
to the expenditure incurred by the State Government or the NVDA and, if so, the persons
responsible for such constructions of substandard quality.

25. Though the petitioner has alleged that persons who are not entitled to receive
compensation for houses under the R & R stipulations of the Narmada Award and the
Policy of the State Government have received compensation and persons who are not
eligible as PAP's of the Sardar Sarovar Project have received benefits under the R & R
stipulations of the Narmada Award and the Policy of the State Government, we do not
think that the Commission should inquire into these matters because the disputes in such
matters are likely to be very complex and the findings of the Commission on such
disputes may affect a large number of persons who have received the compensation and
other R & R benefits and who may not be now available to be heard by the Commission.
It may not also be practically feasible for the Commission to inquire into these matters as
compensation must have been paid for houses and other R & R benefits must have been
given in as many as 193 villages of Madhya Pradesh affected by the Sardar Sarovar
Project. Moreover, in such matters, there is no violation of the fundamental rights of
persons as such which need to be enforced by the High Court.

26. In the course of hearing, Ms. Medha Patkar submitted that considering the large
number of complaints of fake registrations of sale-deeds, the Court should direct
suspension of cash disbursements under the SRP so that there are no more fake
registrations of sale-deeds, but we are not inclined to direct such suspension of cash
disbursements under the SRP as it will affect the R & R process and delay the
rehabilitation and resettlement of the P AFs/PAPs. We however, direct that all fresh
registrations of sale-deed will only be made after clearance from the Commission to be
appointed pursuant to this order.

27. The Commission will by public notice fix the time and place of its sittings. The
Commission will afford opportunity of hearing to all persons against whom the
Commission is likely to record a finding including an opportunity to produce any
evidence in his defence. The Commission may allow witnesses to be examined before it
and will afford an opportunity for cross-examination of such witnesses to persons against
whom the witnesses make statement. The Commission may regulate the procedure of
inquiry on all other matters consistent with the principles of natural justice.

28. It is the responsibility of the respondent No. 1 to ensure implementation of the R & R
measures for the oustees of the Sardar Sarovar Project in Madhya Pradesh and therefore
the respondent No. 1 will bear the costs and expenses of the inquiry by the Commission.
Hence, the respondent No. 1 will issue an order appointing Shri Justice S.S. Jha as
Commission initially for a period of six months on the pay and allowances as are
admissible to a High Court Judge tess pension received by Shri Justice Jha. The
respondent No. 1 will provide a full time Secretary and two full time English
Stenographers to the Commission. The respondent No. 1 will also provide to the
Commission the assistance of such Police Officers, Revenue Officers and P.W.D.
Engineers as the Commission may approve for the inquiry.
29. The respondent No. 1 will of course provide office space, infrastructure and transport
for the work of the Commission. The respondent Nos. 1, 2, 4, 5, 6 and 7 will produce all
the records before the Commission and will cooperate with the Commission in all
respects. The Commission will try and complete the inquiry within six months from the
date of issue of the order by the respondent No. 1 appointing the Commission and submit
a report to this Court. The Registry will forthwith send copies of this order, the writ
petition, replies filed by the respondents, rejoinder filed by the petitioner and all other
applications and affidavits filed by the parties and all the annexures to the pleadings to
Shri Justice S.S. Jha within a week from today.

30. Since we have appointed Shri Justice S.S. Jha as Commission to inquire into the
matter, the State Government may, if it is of the opinion that the one man Commission of
Inquiry of Shri N.C. Nagraj, retired District & Sessions Judge constituted by the State
Government by notification dated 18-7-2008 is now unnecessary, issue a notification
under Section 7(1) of the 1952 Act specifying that the one man Commission of Shri N.C.
Nagraj has ceased to exist.

31. List the matter after the report of the Commission is received or after six months
whichever is earlier.

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MANU/UP/0955/2008

Equivalent Citation: 2008(4)AWC4102

IN THE HIGH COURT OF ALLAHABAD

Decided On: 17.07.2008

Appellants: Hari Nath


Vs.
Respondent: Virendra Nath Pandey and Ors.

Hon'ble Judges:
Poonam Srivastav, J.

Subject: Civil

Catch Words

Mentioned IN
Disposition:
Appeal dismissed

JUDGMENT

Poonam Srivastav, J.

1. Heard learned counsels for the parties.

2. The instant second appeal has been filed against the judgment and order dated
19.11.1981 passed by the VIth Additional District and Sessions Judge, Varanasi in Civil
Appeal No. 121 of 1981 reversing the judgment and decree of the trial court dated
26.2.1981 in Original Suit No. 3 of 1978. Civil suit was instituted by Ram Adhar alias
Rama and Hart Nath, minor adopted son of Ram Adhar alias Rama claiming relief for
cancellation of sale deed dated 31.10.1977 registered on 14.11.1977 In favour of Ram
Sagar Pandey and other, defendant-respondents. The plaintiff No. 1 died during the
pendency of the suit on 9.8.1978 leaving behind only adopted son namely Hari Nath,
appellant. Substitution application was allowed on 24.7.1978.

3. Two written statements were filed, one by defendant Nos. 1 to 5 on 21.3.1978 and the
other by defendant Nos. 6 to 9 on 30.8.1978. The suit was decreed by 13th Munsif,
Varanasi vide its judgment and decree dated 26.2.1981 which was challenged in civil
appeal filed by Virendra Nath Pandey and others. The first appeal was allowed by the
District and Sessions Judge, Varanasi setting aside the judgment and decree passed by the
learned Munsif, Varanasi. The judgment of the lower appellate court Is challenged in the
instant second appeal which was admitted on the following substantial question of law:

Whether the judgment of the lower appellate court is vitiated by mis-placing the burden
of proof entirely on the plaintiff and also reversing the finding of the trial court which is
based entirely on the appraisal of the oral evidence.

4. The submission of the Counsel for the appellant is that the lower appellate court has
illegally dismissed the plaintiff's suit on wrong assumption of fact. The sale deed was
registered one and therefore, there is presumption of correctness. Since it is an official act
and protected under the provisions of Evidence Act as well as Indian Registration Act.
The next ground of challenge is that the lower appellate court while allowing the appeal
failed to reverse the specific finding of fact which was based solely on appreciation of the
oral testimony of the witnesses.

5. It is settled law that the Court where the oral evidence is recorded, is in a better and
advantageous position to observe the demeanor of the witnesses and, therefore, the lower
appellate court was liable to confirm the finding of the trial court. It is also argued on
behalf of the appellant that the trial court has recorded a finding and arrived at a
conclusion while deciding issue No. 2 that the statement of the defendant witnesses
particularly D.W. 1 and D.W. 2 are contradictory and they have failed to prove the
pleadings In the written statement so far it relates to the exchange of consideration on the
date of alleged sale deed. Learned Counsel has emphasized that there can hardly be any
evidence available for proving the allegation of fraud which was specific pleading in the
plaint and it was incumbent on the court below to examine material evidence available on
record while reaching a conclusion which was contrary to the trial court.

6. The findings of the trial court have not been reversed by the appellate court with regard
to mental status of the plaintiff. The Court also ignored the material fact that previously
the plaintiff-appellant: Hari Nath instituted Original Suit No. 1 of 1977 seeking relief for
permanent injunction against the plaintiff No. 1 Ram Adhar alias Rama restraining him
from executing any sale deed of the disputed property. Since the said suit ended in the
terms of compromise, the Court was liable to take this fact into special consideration. It is
further submitted that the lower appellate court misinterpreted and misconstrued the oral
as well as documentary evidence available on record and the ratio settled in the case of
Hans Raj Gupta v. Dehradun Mussoorie Electrical Tramway and Ors.
MANU/PR/0020/1940 has completely been overlooked. Counsel for the appellant states
that it was the duty of the lower appellate court to consider and examine whether the
defendant-respondents have been able to discharge their burden and establish due
execution of the sale deed which was specifically denied by the plaintiff on the ground of
fraud etc.

7. The findings stands vitiated on the ground that the benefit available to a pardanashin
lady should also be made available in the instant case. The Court should have considered
that the transferee was' dealing with an aged and infirm person suffering from physical
disability and therefore, genuineness of the transaction and burden of proof lay heavily on
his shoulders but has wrongly been placed on shoulders of the plaintiff.

8. Reliance has been placed on a number of decisions: S.V.R. Mudaliar (dead) by L.Rs.
and Ors. v. Mrs. Rajabu F. Buhari (Dead) by L.Rs. MANU/SC/0712/1995 :
[1995]3SCR312 . In this case, Hon'ble Supreme Court held that the reasons given by trial
court for arriving at a certain conclusion must be considered by appellate court.
Paragraph 15 of the said judgment is quoted below:

5. There is no need to pursue the legal principle as we have no doubt in our mind that
before reversing a finding of fact, the appellate court has to bear in mind the reasons
ascribed by the trial court. This view of ours finds support from what was stated by the
Privy Council in Rani Hemant Kumari v. Maharaja Jagadhindra Nath (1906) 10 C WN
630, wherein, while regarding the appellate judgment of the High Court of Judicature at
For William as "careful and able", it was stated that it did not "come to close quarters
with the judgment which it reviews, and indeed never discusses or even alludes to the
reasoning of the Subordinate Judge.

9. The next decision relied upon is, Madhusudan Das v. Smt. Narayani Bai and Ors.
MANU/SC/0147/1982 : [1983]1SCR851 . Paragraph 8 of the said judgment is quoted
below:
In an appeal against a trial court decree, even when the appellate court considers an issue
turning on oral evidence it must bear in mind that it does not enjoy the advantage which
the trial court had in having the witnesses before it and of observing the manner in which
they gave their testimony. When there is a conflict of oral evidence on any matter in issue
and its resolution turns upon the credibility of the witnesses, the general rule is that the
appellate court should permit the findings of fact rendered by the trial court to prevail
unless it clearly appears that some special feature about the evidence of a particular
witness has escaped the notice of the trial court or there is a sufficient balance of
improbability to displace its opinion as to where the credibility lies.

10. The next decision relied upon by the Counsel is, Daya Shankar v. Smt. Bachi and
Ors. MANU/UP/0307/1982 : AIR1982All376 . Paragraphs 6 and 9 of the said judgment
are quoted below:

6. The law presumes, prima facie, in favour of the deeds being duly executed. So
ordinarily the person who challenges the validity of a transaction on the ground of fraud,
undue influence etc. and charges his opponent with bad faith has to discharge the burden
of proof which rests on him. But the major exception to this rule is that the initial burden
would not shift to the party who challenges the transactions and will instead be cast on
the persons who relies on such deed if a relationship of "active confidence" or fiduciary
relationship subsists between the contracting parties, such as guardian ward, agent and
principal, doctor and patient, spiritual adviser and disciple, trustee and cestuiqui trust etc.
The probability of dominating over the will of another party arises either directly from
the very nature of the relationship existing between the parties or sometimes from a
peculiar handicap or disability from which the other party suffers, Thus Section 111 of
the Evidence Act has to be read along with the provisions of Section 16 of the Contract
Act (1887) 36 Ch D 145 and Halsbury's Laws of England Third Edn. Vol. 17 para 1297,
P. 672, Foll.

9. The word 'fiduciary' as contained in the Webster's New International Dictionary


connotes "a person in trust, a person or thing holding something in trust." The other
meaning given in the dictionary is "of or pertaining to a trust, pertaining to or of the
nature of trusteeship". Thus whenever it is brought to the notice of the Courts that a
person on account of some reason of the nature indicated above was not in a position to
exercise his independent will, the Courts always Insist on placing the burden of proof on
the person who was in such advantageous position to establish that he did not abuse his
position. The principle was originally confined to cases of pardahnashin ladies who
manifestly suffered from such inhibition and limitation. There is no reason why the said
principle should not also embrace within its sweep the cases of males who by reason of
their apparent physical or mental incapacity or infirmity or being placed in circumstances
where they are greatly amenable to the overpowering influence of another person are
induced to enter into conveyances and transactions relating to their property. The burden
must be cast squarely on the person enjoying the dominating position to show that he
secured the deed in good faith.
11. The next case relied upon by the Counsel is, Lakshmi Amma and Anr. v. Telengala
Narayana Bhatta and Anr. MANU/SC/0355/1970 : AIR1970SC1367 . Paragraphs 5 and
12 are quoted below:

5. The first noticeable feature is that the deed of settlement on the face of it was an
unnatural and unconscionable document. Narasimha Bhatta made negligible provision for
his wife who was his third wife, the first two having died before he married her. She was
left mainly to the mercy of respondent No. 1. Admittedly there was a residential house
and no provision was made regarding her right to reside in that house till her death.
Apparently there was no reason why he should have left nothing to his two daughters or
to his other grandchildren and given his entire estate to only one grandson namely
respondent No. 1.

12. We are satisfied that Narasimha Bhatta who was of advanced age and was in a state
of senility and who was suffering from diabetes and other ailments was taken by
respondent No. 1 who had gone to reside in the house at Sodhankar village a little earlier
in a taxi alongwith Lakshmiamma to the Nursing Home in Mangalore where he was got
admitted as a patient. No draft was prepared with the approval or under the directions of
Narasimha Bhatta nor were any instructions given by him to the scribe in the matter of
drawing up of the document Ext. B-3. An application was also made to the Joint Sub-
Registrar, Mangalore for registering the document at the Nursing Home by someone
whose name has not been disclosed nor has the application been produced to enable the
Court to find out the reasons for which a prayer was made that the registration be done at
the Nursing Home. Lakshmiamma the wife of Narasimha Bhatta who was the only other
close relation present has stated in categorical terms that the document was got executed
by using pressure on Narasimha Bhatta while he was of an infirm mind and was not in a
fit condition to realize what he was doing. The hospital record was not produced nor did
the doctor who attended on Narasimha Bhatta at the Nursing Home produce any
authentic data or record to support their testimony. Even the Will was not produced by
respondent No. 1 presumably because it must have contained recitals about the weak state
of health of Narasimha Bhatta. The dispositions which were made by Ext. B-3, as already
pointed out before, were altogether unnatural and no valid reason or explanation has been
given why Narasimha Bhatta should have given everything to respondent No. 1 and even
deprived himself of the right to deal with the property as an owner during his lifetime. All
these facts and circumstances raised a grave suspicion as to the genuineness of the
execution of the document Ext. B-3 and it was for respondent No. 1 to dispel the same. In
our opinion he has entirely failed to do so with the result that the appeal must succeed
and it is allowed with costs in this Court. The decree of the High Court is set aside and
that of the trial court restored.

12. The last decision relied upon by the 'counsel is, Gopal Krishnaji Ketkar v. Mohamed
Haji Latif and Ors. MANU/SC/0168/1969 : [1968]3SCR862 . The Hon'ble Supreme
Court held that a party in possession of best evidence which would throw light on the
issue in controversy, if is withholding it, the Court ought to draw an adverse inference
against him notwithstanding that burden of proof does not lie on him. A party cannot rely
on abstract doctrine of burden of proof or on the fact that he was not called upon to
produce it.

13. It is also emphasized that the lower appellate court failed to take into consideration
the settled principle of law that the trust of the plaintiff No. 1 Ram Adhar alias Rama was
eroded by taking advantages of physical infirmity. The sale deed was executed
intentionally to dupe the appellant.

14. Sri Sankatha Rai learned Counsel for the respondents has categorically refuted each
and every argument advanced on behalf of the appellant. The thrust of his argument is
that a suit for cancellation of sale deed is filed under Sections 31 and 33 of the Specific
Relief Act on the ground of fraud undue influence etc. The word "fraud" is defined under
Section 17 of the Indian Contract Act, 1872 which reads as under:

17. "Fraud" defined.- "Fraud" means and includes any of the following acts committed by
a party to a contract, or with his connivance, or by his agent, with Intent to deceive
another party thereto or his agent, or to induce him to enter into the contract:

(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be
true;

(2) the active concealment of a fact by one having knowledge or belief of the fact;

(3) a promise made without any intention of performing it;

(4) any other act fitted to deceive;

(5) any such act or omission as the law specially declares to be fraudulent.

Explanation.- Mere silence as to facts likely specially declares to be fraudulent. 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.

15. Section 19 of the Indian Contract Act, 1872 reads as under:

Section 19. Voidability of agreements without free consent.- When consent to an


agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract
voidable at the option of the party whose consent was so caused.

A party to contract, whose consent was caused by fraud or misrepresentation, may, if he


thinks fit, insist that the contract shall be performed, and that he shall be put in the
position in which he would have been if the representations made had been true.

16. The word 'free consent' has been defined under Section 14 of the Indian Contract Act,
1872. The word "coercion" has been defined under Section 15 of the Indian Contract Act,
1872. The word "undue influence" has been defined under Section 16 of the Indian
Contract Act, 1872. The word "misrepresentation" has been defined under Section 18 of
the Indian Contract Act, 1872.

17. In view of the aforesaid provisions since the plaintiff-appellant had claimed relief of
cancellation of sale deed on the ground of fraud and undue influence, the burden was not
of the defendants in whose favour registered sale deed was executed but it was the
plaintiff who had to discharge this burden, therefore, the substantial question of law so far
burden of proof is concerned, I am of the view that the judgment of the lower appellate
court does not suffer from any error whatsoever. It is also to be noticed that this is the
case where the appeal was allowed and the finding recorded by the trial court regarding
execution of the sale deed was held to be based on surmises and conjectures.

18. After going through the Judgment and reasonings given by the District Judge, I find
that the approach of the lower appellate court is absolutely correct while disagreeing with
the finding of the trial court. It cannot be overlooked that the plaintiff No. 1 executed the
deed only after receiving consideration amount before the Sub Registrar who had made
an endorsement to the said effect. The defendants adduced positive evidence to prove and
establish the execution and payment of consideration to the plaintiff and, therefore, the
arguments of the Counsel for the appellant is farfetched one.

19. The names of the defendants have also been mutated in the revenue records after
execution of the sale deed. Rs. 2,000 was paid before the Sub Registrar in addition to the
earnest money paid prior to the date of registration and this finds mention in the recital of
the sale deed, Exhibit 1. In the circumstances, the presumption raised in favour of the
defendants-respondents can not be said to be perverse and liable to be interfered in
exercise of jurisdiction under Section 100, C.P.C.

20. Learned Counsel for the respondents has cited certain decisions in support of his
arguments. The first decision is, Hansraj Gupta and Ors. v. Dehra Dun-Mussoorte
Electric Tramway Co. Ltd. MANU/PR/0020/1940. In this decision it was held that the
party alleging fraud . is bound to establish it by cogent evidence and suspicion cannot be
accepted as proof unless it is established by circumstances which are incompatible with
the hypothesis of the person charged with fraud. The next decision relied upon by the
Counsel is Mishri Lal and Anr. v. Bhagwati Prasad MANU/UP/0166/1955 :
AIR1955All573 . The Division Bench of this Court (Lucknow Bench) held that the usual
endorsement of the Sub-Registrar before whom the award was presented for registration
was found on the back of the first page of the document wherein he stated that the
execution and completion of the document were admitted by the executant of the deed of
award.

21. The Sub Registrar had also affixed a signature and there was no definite denial of the
execution made in the pleadings, therefore, it was held that in these circumstances, the
endorsement of the Sub Registrar should be deemed to be sufficient proof of the
execution of the deed. In the instant case, there was also an endorsement of the Sub
Registrar which has not been denied, besides the sale deed was registered which was
sought by the plaintiff to be cancelled on the ground that executant was physically infirm.
In these circumstances, the approach of the lower appellate court appears to be absolutely
legal while coming to a conclusion that heavy burden lay on the shoulders of the plaintiff
to establish this fact, but .lie has miserably failed to do so.

22. The next decision relied upon by the Counsel for the respondents in Afsar Shaikh and
Anr. v. Soleman Bibi and Ors. MANU/SC/0001/1975 : [1976]2SCR327 . Paragraph 15
of the said judgment is quoted below:

15. While it is true that 'undue influence', 'fraud', 'misrepresentation' are cognate vices
and may, in part, overlap in some cases, they are in law distinct categories and are in
view of Order VI, Rule 4, read with Order VI, Rule 2 of the Code of Civil Procedure,
required to be separately pleaded, with specificity, particularity and precision. A general
allegation in the plaint, that the plaintiff was a simple old man of ninety who had reposed
great confidence in the defendant, was much too insufficient to amount to an averment of
undue influence of which the High Court could take notice, particularly when no issue
was claimed and no contention was raised on that point at any stage in the trial court, or
in the first round, even before the first appellate court.

23. In the instant case, the only ground on which the relief of cancellation of sale deed is
prayed that the plaintiff No. 1 was suffering from paralysis in his leg and therefore, he
was duped in executing the sale deed cannot be accepted. Certain irrelevant
contradictions in the statements of the witnesses are not sufficient to render a valid
document invalid without there being sufficient proof. The trial court committed an error
while placing burden on the defendants that the sale deed was executed in their favour
with a free consent and without any coercion completely overlooking the fact that
admittedly consideration was paid, sale deed was registered, there was an endorsement of
the Sub Registrar and the defendants were put in possession.

24. The plaintiff was liable to establish that the mental faculty of the vendor was impaired
and he did not understand the implication of what he was doing. It was the plaintiff who
had come forward to seek redressal and. therefore, he cannot shirk his responsibility
which he failed to discharge.

I have gone through each and every paragraph of the plaint. Order VI, Rule 4, C.P.C.
makes it incumbent on the plaintiffs to plead specifically without any ambiguity if he
seeks redressal for cancellation of a deed on the ground of misrepresentation, fraud,
breach of trust, willful default and undue influence. All the particulars with dates and
items should be stated specifically in the pleadings.

25. In the instant case, the pleadings or the plaintiff-appellant do not confirm this
requirement and therefore I am of the considered view that the lower appellate court was
right while disagreeing with the judgment of the trial court. The argument of the learned
Counsel regarding the evidence and its appreciation by the lower appellate court vis-a-vis
appreciation by the trial court cannot be looked into in the present second appeal. The
scope of Section 100, C.P.C. is very much narrowed after amendment in the year 1976.
26. The High Court while exercising its jurisdiction in a second appeal cannot substitute
its own opinion arrived at by the first appellate court unless the conclusions drawn by the
lower appellate court are so erroneous as contrary to the mandatory provisions of law
applicable and law pronounced by the Apex Court or it is on inadmissible evidence. The
lower appellate court is the last court of fact and the High Court, can interfere only after
there is a substantial error of law. The Apex Court in the case of Kondiba Dagadu Kadam
v. Savitribai Sopan Gujar and Ors. MANU/SC/0278/1999 : [1999]2SCR728 has held in
paragraph 5, as under:

5. It is not within the domain of the High Court to investigate the grounds on which the
findings were arrived at, by the last court of fact, being the first appellate court. It is true
that the lower appellate court should not ordinarily reject witnesses accepted by the trial
court in respect of credibility but even where it has rejected the witnesses accepted by the
trial court, the same is no ground for interference in second appeal when it is found that
the appellate court has given satisfactory reasons for doing so. In a case where from a
given set of circumstances two inferences are possible, one drawn by the lower appellate
court is binding on the High Court in second appeal. Adopting any other approach is not
permissible. The High Court cannot substitute its opinion for the opinion of the first
appellate court unless it is found that the conclusions drawn by the lower appellate court
were erroneous being contrary to the mandatory provisions of law applicable or its settled
position on the basis of pronouncements made by the Apex Court, or was based upon
inadmissible evidence or arrived at without evidence.

27. In the case of Sir Chunilal v. Mehta and Sons Ltd. v. Century Spg. & Mfg. Co. Ltd.
the Supreme Court held that:

The proper test for determining whether a question of law raised in the case is substantial
would, in our opinion, be whether it is of general public importance or whether it directly
and substantially affects the right of the parties and if so whether it is either an open
question in the sense that it is not finally settled by this Court or by the Privy Council or
by the federal court or is not free from difficulty or calls for discussion of alternative
views. If the question is settled by the highest court or the general principles to be applied
in determining the question are well settled and there is a mere question of applying those
principles or that the plea raised is palpably absurd the question would not be a
substantial question of law.

28. The Apex Court in the recent case of Santosh Hazari v. Purshottam Tiwari
MANU/SC/0091/2001 : [2001]251ITR84(SC) , ruled that a point of law which admits of
no two opinions may be a proposition of law but cannot be a substantial question of law.
To be 'substantial' question of law it must be debatable, not previously settled by law of
the land or a binding precedent, and must have a material bearing on the decision of the
case, if answered either way, in so far as the rights of the parties before it are concerned.
It will therefore, depend on the facts and circumstances of the each case whether a
question of law is substantial one and involved in the case, or not? The same view has
been expressed by the Apex Court in the cases of Rajeshwari v. Puran Indoria
MANU/SC/0514/2005 : (2005)7SCC60 and Govinda Raju v. Mariamman
MANU/SC/0084/2005 : AIR2005SC1008 .

29. In view of what has been stated above, I am not inclined to interfere in the present
second appeal in exercise of jurisdiction under Section 100, C.P.C. The appeal lacks
merit and is accordingly dismissed. Cost on parties.

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MANU/SC/7604/2008

Equivalent Citation: (SCSuppl)2008(3)CHN5, [2008]144CompCas1(SC),


(2008)2CompLJ393(SC), 2008(5)CTC348, (2008)7SCC738, [2008]84SCL173(SC)

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3201 of 2008 (Arising Out of Special Leave Petition (Civil) No. 2189
of 2007)

Decided On: 02.05.2008

Appellants: M.V. Janardhan Reddy


Vs.
Respondent: Vijaya Bank and Ors.

Hon'ble Judges:
C.K. Thakker and D.K. Jain, JJ.

Counsels:
For Appearing Parties: L. Nageshwar Rao, M.N. Rao, Sr. Advs., Jayanth Muth Raj, C.K.
Sasi, S. Prasad, M. Srinivas Rao, Abid Ali Beeran P., Sudha Gupta, Sridhar Potaraju, D.
Julius Riamei, Advs

Subject: Civil

Subject: Banking

Catch Words

Mentioned IN
Acts/Rules/Orders:
Recovery of Debts due to Banks and Financial Institutions Act, 1993; Companies Act,
1956 - Sections 446, 457 and 529A; Companies (Court) Rules, 1959 - Rules 9 and 117;
Civil Procedure Code (CPC), 1908 - Section 71 - Order 21, Rules 90 and 92; Constitution
of India - Article 136

Cases Referred:
Navalakha and Sons v. Sri Ramanya Das and Ors. MANU/SC/0614/1969; Gordhan Das
Chuni Lal v. S. Sriman Kanthimathinatha Pillai; Rathnaswami Pillai v. Sadapathi
PillaiMANU/TN/0419/1924; S. Soundarajan v. Roshan and Co.MANU/TN/0367/1939; A.
Subbaraya Mudaliar v. K. Sundarajan; MANU/TN/0321/1951 Sikander Khan v. Radha
Kishan MANU/SC/1237/2001; Chundi Charan v. Bankey Behary (1899) 26 Cal 449

Prior History:
From the Judgment and Order dated 18.10.2006 of the High Court of Judicature Andhra
Pradesh at Hyderabad in O.S.A. No. 44/2006 in C.A. No. 73/2006 in C.A. No. 187/2005
in C.A. No. 219/1996 in C.P. No. 18/1990

Citing Reference:

Navalakha and Sons v. Sri Ramanya Das and Ors.


Discussed

Gordhan Das Chuni Lal v. S. Sriman Kanthimathinatha Pillai


Discussed

Rathnaswami Pillai v. Sadapathi Pillai MANU/TN/0419/1924


Mentioned

S. Soundarajan v. Roshan and Co.


Mentioned

A. Subbaraya Mudaliar v. K. Sundarajan MANU/TN/0321/1951


Mentioned

Sikander Khan v. Radha Kishan MANU/SC/1237/2001


Discussed

Chundi Charan v. Bankey Behary MANU/WB/0176/1899


Mentioned

Case Note:
Company-Auction Sale – Action sale conducted by bank o recover its money from
company in liquidation – Appellant was the higher bidder – Sale was confirmed and
all formalities completed – Company court set aside the sale – Appeal – Held,
recovery officer not confirmed the sale - Sale could be said to be confirmed –
Further, as company was in liquidation, official liquidator must be made part of the
auction sale – As the same was not done, sale is liable to be set aside.

Ratio Decidendi:
“Where company is in liquidation, official liquidator must be made part of the auction
sale conducted by any creditor to recover its money from said company”

JUDGMENT

C.K. Thakker, J.

1. Leave granted.

2. The present appeal is filed by the appellant herein against the judgment and order dated
October 18, 2006 passed by the High Court of Andhra Pradesh in Original Side Appeal
No. 44 of 2006. By the said order, the Division Bench of the High Court dismissed the
appeal and confirmed the order, dated September 8, 2006 passed by the Single Judge of
that Court in Company Application No. 73 of 2006.

3. To appreciate the controversy raised in the present appeal, few relevant facts may be
stated;

4. Vijaya Bank-Respondent No. 1 herein ('Bank' for short) filed Original Suit No. 57 of
1989 in the Court of Subordinate Judge, Bhongir against Messrs Kran Organics
Chemicals (P) Ltd (in liquidation) ('Company' for short) for recovery of Rs. 94,50,524/-
as also another Suit being Original Suit No. 61 of 1989 in the same Court for recovery of
Rs. 6,43,962/-. Both the suits were decreed by a common judgment dated July 24, 1993.
The Bank filed execution applications which were transferred to Debts Recovery
Tribunal on establishment of the Tribunal under Recovery of Debts due to Banks and
Financial Institutions Act, 1993. Recovery certificates were issued in favour of the Bank
and the Bank was allowed to execute the decree.

5. Since the matter was pending in the Company Court and Official Liquidator was
appointed, the Bank made an application, being Company Application No. 219 of 1996 in
Company Petition No. 18 of 1990 in accordance with the provisions of Section 446 of the
Companies Act, 1956 (hereinafter referred to as 'the Act') read with Rule 117 of the
Companies (Court) Rules, 1959 (hereinafter referred to as 'the Rules') for granting leave
to proceed with the sale of the property of the Company.

6. The Company Court, vide its order, dated August 13, 1999 granted the permission.

7. The Bank then took steps for sale of land and building of the Company. It got
valuation report from approved valuer, assessed market value and realizable value,
submitted copies of judgment, recovery certificate and valuation report, etc. to the
Official Liquidator. It made an application being Company Application No. 187 of 2005
to the Company Court under Sections 446 and 457 of the Act read with Rule 9 of the
Rules praying for acceptance of the Valuation Report and permit the Bank to sell the
property by conducting auction through Recovery Officer, Debt Recovery Tribunal,
Hyderabad.

8. On February 2, 2005, the Bank published a notice fixing date of sale as March 13,
2005. A public notice was issued in 'Vaartha' on February 9, 2005. Reserve price was
fixed at Rs. 45 lakhs. No bidder, however, came forward and auction could not be
effected. Same thing was repeated in auction sales scheduled to be held on May 29, 2005,
July 8, 2005 and September 14, 2005. In an auction held on December 19, 2005, the
appellant had offered Rs. 67.50 lakhs which was the highest bid and it was accepted. The
Bank made an application in January, 2006, being Company Application NO. 73 of 2006
requesting the Company Court to allow the Recovery Officer of the Tribunal to confirm
the sale in favour of the appellant and to permit him to issue sale certificate. On February
13, 2006, Recovery Officer confirmed the sale. It was stated in the said order that the
purchasers had purchased the property for a sum of Rs. 67,50,000/- at a public auction
held on December 19, 2005. Full amount of the sale consideration was paid on January 3,
2006.

9. It was then stated;

Accordingly, the said sale is hereby confirmed.

10. According to the appellant, on February 23, 2006, the Official Liquidator submitted a
report to the Hon'ble Court wherein he also stated that there was no impediment in
confirming the sale. Sale certificate was issued in favour of the appellant on March 2,
2006. The sale was registered on March 16, 2006. On March 17, 2006, however, the
Company Judge set aside the sale without issuing notice and without affording an
opportunity of hearing to the appellant observing that the sale was not properly conducted
and was confirmed without an order from the Court. The sale was, therefore, set aside.

11. It appears that an application was made by the appellant to recall the said order.
Meanwhile, the Company Judge issued direction to the Official Liquidator to sell the
property. Notice was issued by the Official Liquidator for sale of property. The appellant,
however, approached the Division Bench of the High Court by filing Original Side
Appeal No. 28 of 2006 complaining that an order passed by the Company Judge setting
aside the sale, was illegal, unlawful, violative of principles of natural justice and fair play
inasmuch as no notice was issued and no opportunity of hearing was afforded before
passing the said order, which adversely affected the appellant. The Division Bench
upheld the contention of the appellant, allowed the appeal filed by him and set aside the
order passed by the Company Judge. The matter was again ordered to be placed before
the learned Company Judge for passing an appropriate order in accordance with law.

12. The learned Company Judge, thereafter, heard the parties and by an order dated
September 8, 2006, set aside the sale which was in favour of the appellant and ordered
that the amount deposited by the appellant be refunded to him. The appellant approached
the Division Bench of the High Court but the Division Bench also dismissed the appeal.
The said order is challenged in the present appeal.

13. On February 12, 2007, notice was issued by this Court. The matter thereafter
appeared on the board from time to time. Status quo was also granted. Parties were
permitted to file replies and a direction was issued to the Registry to place the matter for
final hearing on a non-miscellaneous day and that is how the matter has been placed
before us.

14. We have heard learned Counsel for the parties.

15. The learned Counsel for the appellant contended that the auction was held in
accordance with law by the authorities and upset price was fixed as Rs. 45 lakhs. The
appellant was the highest bidder on December 19, 2005 and his bid was for Rs. 67.50
lakhs. The said bid was accepted and the entire amount was paid by him and the sale was
confirmed. The sale, therefore, could not have been interfered with and set aside by the
Court. It was also submitted that after confirmation of sale, no order setting aside the sale
could have been passed by the Court. The learned Counsel submitted that once the sale
was confirmed, it could be set aside only on certain grounds such as fraud or irregularity
in conducting sale, etc. Since no such ground was there, the order setting aside sale was
illegal and was of no effect. It was also submitted that remarks of the Official Liquidator
were called and Official Liquidator vide his report dated February 23, 2006 stated that as
against the upset price of Rs. 45 lakhs, the highest bid was of Rs. 67.50 lakhs by the
appellant and there was no impediment in confirming the sale. Hence, even on that
ground, the Company Judge was not justified in setting aside the sale. The counsel stated
that at an earlier occasion also, an order was passed by the Company Judge setting aside
the sale without issuing notice and giving opportunity of hearing to the appellant.
Fortunately, however, the said order was set aside by the Division Bench. But again the
Company Judge set aside the sale and the Division Bench confirmed the said order. The
counsel submitted that after confirmation of sale, sale certificate was issued in favour of
the appellant on March 2, 2006, sale deed was registered on March 16, 2006 and the
appellant had paid an amount of Rs. 4 lakhs towards stamp duty. All these had caused
serious prejudice to the appellant. The entire amount of Rs. 67.50 lakhs was paid in the
beginning of 2006 and if at this stage, the order of the High Court is not interfered with,
irreparable injury and loss would be caused to the appellant. He, therefore, submitted that
the order passed by the High Court deserves to be set aside by restoring confirmation of
sale in favour of the appellant and by directing the respondents to take consequential
action.

16. The learned Counsel for respondent Nos. 1 and 2, on the other hand, supported the
order passed by the learned Company Judge and confirmed by the Division Bench. It was
submitted that the Recovery Officer had no power, authority or jurisdiction to confirm
sale and an order of confirming sale passed by him on February 13, 2006 was, therefore,
without power or authority. Moreover, Company proceedings were pending before the
learned Company Judge. The Company was ordered to be wound up. Official Liquidator
was appointed who was in charge of the assets of the Company. He was not taken in
confidence, nor was he associated with the auction of assets and properties of the
Company in liquidation and an action had been taken by the Recovery Officer which was
contrary to law. Even the report submitted by the Official Liquidator expressly stated;

Since Official Liquidator was not associated with the proceedings of sale, he has no
comments to offer.

17. So far as the order passed by the learned Company Judge is concerned, it specifically
and unequivocally stated that permission of the court should be obtained before sale is
confirmed or finalized. That order was passed as early as on August 13, 1999. In an
order, dated March 25, 2005 also, it was expressly mentioned that the sale was subject to
confirmation of the Court. It was an express condition imposed by the Company Court
and as such it was not open to the Recovery Officer to confirm the sale and such order,
which was having no authority of law, was rightly set aside by the Company Judge and
no grievance could be made. Finally, it was submitted that the Court was wholly justified
in observing that the property would have fetched much more than Rs. 67.50 lakhs. In
fact, in a subsequent auction, the highest bid was of Rs. 1,80,00,000 i.e. almost three
times than the highest bid of the appellant. In the circumstances, it could not be said that
any illegality had been committed by the Court in setting aside the sale or there was
miscarriage of justice. It was, therefore, submitted that the appeal deserves to be
dismissed.

18. On behalf of respondent No. 3, an affidavit in reply is filed and it is stated that after
the bid of respondent No. 3 was accepted for Rs. 1.80 crores, it had paid the said amount
in November, 2006. The sale was confirmed by the Company Court in its favour, sale
deed was executed and even physical and actual possession of the property was given to
respondent No. 3. The third respondent also obtained necessary permission and
certificates from the Authorities so as to enable it to start unit. It had incurred substantial
expenditure of about Rs. 1.50 crores and also taken steps for recruitment of staff. If at this
stage, the order passed by the High Court is set aside, great prejudice would be caused to
the said respondent.

19. Having heard the learned Counsel for the parties and having given anxious
consideration to the facts and circumstances in their entirety, in our opinion, it cannot be
said that by setting aside sale, either the learned Company Judge or the Division Bench
has committed any illegality which deserves interference in exercise of discretionary
power under Article 136 of the Constitution.

20. Our attention has been invited by the learned Counsel to the relevant orders passed by
the Company Court from time to time. So far as the order dated August 13, 1999 is
concerned, permission to sell the property was granted on certain terms and conditions.
They read as under;

A) The Official Liquidator shall be allowed to have inspection of the properties and
assets of the company in liquidation and to take inventory as and when required.
B) Certified copy of the Judgment and decree passed by the Subordinate Judge, Bhongir
in O.S. No. 57/89 dt. 24.7.1993 shall be made available to the official Liquidator without
delay.

C) The certified copy of the order that would be passed by the Debt Recovery Tribunal,
Bangalore shall be made available to the official Liquidator without avoidable delay.

D) The petitioner-Bank shall file the valuer's report in the court before the properties
covered under the mortgage deed are put to sale.

E) Permission of this Court shall be obtained before the sale of the properties movable
or immovable, is confirmed or finalized.

F) The petitioner-Bank shall undertake to deposit and shall deposit the workmen dues
with the official Liquidator as and when quantified by him as per the provisions of
Section 529A of the Indian Companies Act.

G) Whatever surplus remains after the sale and realization of the dues of the secured
creditors and the workmen, as per law, the balance sale proceeds shall be made available
to the official Liquidator for being dealt with in accordance with the provisions of the
companies Act and the Rules.

(emphasis supplied)

21. An order, dated March 28, 2005 in Company Application No. 187 of 2005 was
equally clear. It read as under;

This is an application filed by the Nationalized Bank seeking permission of this Court to
receive the valuation report and also to permit the bank to effect sale of the properties of
the Company under liquidation through the Recovery Officer of the Debts Recovery
Tribunal, in terms of the conditions of auction sale notice dated 2.2.2005.

It is also stated that though sale notice was ordered, no sale was conducted as no
permission was obtained from this Court. The Official Liquidator also filed a report
reporting that there is no objection as to the proposed auction and also the valuation
report as filed by the applicant Company.

Under the above circumstances, the applicant company is permitted to go ahead with the
proposed sale of the assets of the Company under Liquidation through public auction.
But, however, the said sale, if any effected, shall be subject to the confirmation of this
Court. The applicant is accordingly granted permission to effect the sale, but the sale
shall be required to be confirmed by this Court.

The application is accordingly disposed of.

(emphasis supplied)
22. The above orders leave no room of doubt that the Bank was permitted to go ahead
with the proposed sale of the assets of the Company under liquidation by way of auction
but such sale was subject to confirmation by the Company Court. It is, therefore, clear
that all parties were aware about the condition as to confirmation of sale by the Company
Court. It was, therefore, not open to Recovery Officer to confirm sale. The order passed
and action taken by the Recovery Officer was in clear violation of and inconsistent with
the specific condition imposed by the Company Court. In our considered opinion,
therefore, the appellant cannot take any advantage of confirmation of sale by the
Recovery Officer who did not possess the power to confirm sale.

23. So far as confirmation of sale is concerned, the principles are well-settled. It is,
therefore, not necessary to consider various decisions on that point. We may, however,
refer to Navalakha & Sons v. Sri Ramanya Das and Ors. MANU/SC/0614/1969 :
[1970]3SCR1 .

24. In that case, speaking for the Court, Ramaswami, J. stated;

The principles which should govern confirmation of sales are well-established. Where
the acceptance of the offer by the Commissioners is subject to confirmation of the
Court the offerer does not by mere acceptance get any vested right in the property so
that he may demand automatic confirmation of his offer. The condition of confirmation
by the Court operates as a safeguard against the property being sold at inadequate price
whether or not it is a consequence of any irregularity or fraud in the conduct of the sale.
In every case it is the duty of the Court to satisfy itself that having regard to the market
value of the property the price offered is reasonable. Unless the Court is satisfied about
the adequacy of the price the act of confirmation of the sale would not be a proper
exercise of judicial discretion. In Gordhan Das Chuni Lal v. S. Sriman Kanthimathinatha
Pillai, it was observed that where the property is authorised to be sold by private contract
or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that
could be expected to be offered. That is because the Court is the custodian of the interests
of the Company and its creditors and the sanction of the Court required under the
Companies Act has to be exercised with judicial discretion regard being had to the
interests of the Company and its creditors as well. This principle was followed in
Rathnaswami Pillai v. Sadapathi Pillai MANU/TN/0419/1924 : AIR1925Mad318 and S.
Soundarajan v. Roshan & Co. MANU/TN/0367/1939 : AIR1940Mad42 In A. Subbaraya
Mudaliar v. K. Sundarajan, MANU/TN/0321/1951 : AIR1951Mad986 it was pointed out
that the condition of confirmation by the Court being a safeguard against the property
being said at an inadequate price, it will be not only proper but necessary that the Court in
exercising the discretion which it undoubtedly has of accepting or refusing the highest
bid at the auction held in pursuance of its orders, should see that the price fetched at the
auction is an adequate price even though there is no suggestion of irregularity or fraud. It
is well to bear in mind the other principle which is equally well-settled namely that once
the Court comes to the conclusion that the price offered is adequate, no subsequent higher
offer can constitute a valid ground for refusing confirmation of the sale or offer already
received.
[See the decision of the Madras High Court in Roshan & Co's case (supra)].

25. It is true that the Recovery Officer confirmed the sale in favour of the appellant. But
as we have already noted, in view of condition imposed by the Company Court, Recovery
Officer did not have the power to confirm sale. An order passed by an officer having no
authority of law has no effect. It neither creates any right in favour of a party for whom
such order is made nor imposes any obligation on the opposite party against whom it was
passed.

26. In Sikander Khan v. Radha Kishan MANU/SC/1237/2001 : (2002)9SCC405 ,


auction-sale of agricultural land was confirmed by the Collector. The judgment-debtor
filed an application under Order 21, Rule 90 of the Code of Civil Procedure, 1908
contending that the Collector had no jurisdiction to confirm the sale and his action,
therefore, was null and void.

27. Upholding the contention and setting aside the sale, this Court said;

Learned Counsel appearing for the appellants urged that the view taken by the High
Court that the Collector had jurisdiction to confirm the auction-sale was patently
erroneous. In other words, what the learned Counsel contends is that under Section 71 of
the Code read with Order 21 Rule 92 CPC, the Collector is only authorised to hold and
conduct the auction-sale but he has no power to confirm the sale. According to him, the
confirmation of auction-sale can only be done by the civil court after deciding the
objections, if filed. We find substance in the argument. Order 21 Rule 92 of the Code of
Civil Procedure provides that the civil court shall have power to make an order
confirming the sale and thereupon the sale shall become absolute. What Section 71 of the
Code provides is that where the execution of the decree is passed by the competent civil
court, which cannot be satisfied and requires sale of the agricultural holding of a pakka
tenant, the auction-sale of such land shall be conducted by the Collector on fulfilment of
certain conditions. It is, therefore, crystal clear that only the auction-sale of an
agricultural land is to be held and conducted by the orders of the Collector and not the
confirmation of such sale. In view of the fact that in the present case the auction-sale of
the appellants' land was not confirmed by the civil court, the auction-sale was a nullity
and the executing court was right when it set aside the impugned auction-sale.

28. It is true that when the Company Judge set aside the sale on March 17, 2006, the
order was reversed by the Division Bench of the High Court since it was in breach of
natural justice. That does not, however, mean that the Company Court could not pass
fresh order after affording opportunity of hearing to the parties. In our opinion, the
Company Court was right in passing fresh order after hearing the parties. If the Recovery
Officer could not have confirmed the sale, obviously all actions taken in pursuance of
confirmation of sale, such as, issuance of sale certificate, registration of documents, etc.,
would be of no consequence. Since the Company was in liquidation and Official
Liquidator was in charge of the assets of the Company, he ought to have been associated
with the auction proceedings, which was not done. This is also clear from the report
submitted by the Official Liquidator and on that ground also, the auction sale was liable
to be set aside.

29. Thus, taking into account overall circumstances, it cannot be said that by setting aside
the sale, any illegality had been committed by the Court or the appellant had suffered.
The grievance voiced by the appellant, therefore, is not well founded and cannot be
upheld.

30. One thing, however, may be noted. In the auction held on December 19, 2005, the
appellant was the highest bidder. His bid of Rs. 67.50 lakhs was accepted and he paid the
earnest money. Sale was confir

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MANU/UP/0383/2009

IN THE HIGH COURT OF ALLAHABAD (LUCKNOW BENCH)

Decided On: 17.09.2009

Appellants: Prem Kumar


Vs.
Respondent: Additional Commissioner (Judicial) Lucknow Division and Ors.

Hon'ble Judges:
S.S. Chauhan, J.

Subject: Property

Subject: Civil

Catch Words

Mentioned IN

Disposition:
Petition dismissed

JUDGMENT

S.S. Chauhan, J.

1. Through this petition the petitioner has challenged the orders dated 08.08.2002 and
07.09.2001 passed by opposite parties No. 1 and 2.
2. The facts in brief relating to the present case are that the dispute relates to plot No.
1138 (new) of which old number was 1402 of Khata No. 319 situated in Village Alinagar
Sunehra, Pargana, Tehsil and District Lucknow. As stated, a lease deed was executed in
favour of the petitioner by the erstwhile zamindar Keshav Ram who was an intermediary
of Mohal Munnu Singh. In 1372 fasli for the first time the name of the petitioner came to
be recorded. Jagdish Kumar, minor brother of the petitioner, filed an objection claiming
co-tenancy right in the khata in dispute alleging therein that the lease was obtained in
representative capacity and he was entitled to co-tenancy right. The Consolidation Officer
rejected the claim of Jagdish Kumar. Feeling aggrieved against the order of the
Consolidation Officer dated 12.03.1964, an appeal was preferred before the Settlement
Officer Consolidation, which was dismissed vide order dated 18.06.1965. A revision was
preferred under Section 48 of the U.P. Consolidation of Holdings Act (for short "the
Act"), which was dismissed by the Deputy Director of Consolidation vide order dated
08.12.1965. Jagdish Kumar preferred a second appeal, which also came to be dismissed
vide order dated 02.02.1968.

3. On 05.04.1999, an application was moved by one Basant Kumar Arora alleging therein
that name of 12 khata holders has been fraudulently recorded in Gata No. 1138-Sa which
was 90 bigha 3 biswa. The Tehsildar proceeded to make an enquiry in the matter on the
direction of the Government. The Tehsildar as well as the then Sub Divisional Officer
made an enquiry and submitted report on 21.08.1999.

4. The petitioner was issued with a notice who filed his objection on 23.12.1999. The Sub
Divisional Magistrate after considering reply and the evidence on record rejected the
claim of the petitioner vide order dated 07.09.2001 under Section 33/39 of the U.P. Land
Revenue Act (for short "the Revenue Act"). The petitioner preferred a revision against
the order dated 07.09.2001 and the revisional court also dismissed the revision holding
that the entry made in favour of the petitioner was a forged entry, without any basis and
there was no such lease existing as claimed by him and the 'sanad' which was issued was
also found to be doubtful.

5. Submission of learned Counsel for the petitioner is that long standing entries could not
have been corrected under Section 33/39 of the Revenue Act. The lease deed executed in
favour of the petitioner could not have been disbelieved so easily by the courts below.
Title of the petitioner stood perfected on the basis of various judgements of the
consolidation authorities. The petitioner was in possession since long and has perfected
his title on the basis of the aforesaid lease executed by the intermediary. His further
submission is that no opportunity was given to the petitioner to participate in the enquiry
proceedings and only a notice was given to which he submitted his reply.

6. Learned Addl. Chief Standing Counsel, on the other hand, has submitted that the lease
deed alleged to be executed by Keshav Ram being an intermediary of Mohal Munnu
Singh on 29.12.1951 cannot confer any right in favour of the petitioner in view of the
provisions contained in Sections 8, 23 and 24 of the U.P. Zamindari Abolition and Land
Reforms Act, 1950 (for short "the UPZA & LR Act"). The petitioner was required to
have a written lease from the owner consistent with the provisions of Sections 55 & 56 of
the U.P. Tenancy Act (for short "the Tenancy Act"). No such lease has been placed on
record. Only averment has been made. The entry in favour of the petitioner was a forged
entry as the land in question is recorded as 'araji jis par pani hai' in 1356 fasli and in
khatuani of 1371 fasli it was recorded as 'jalmagna bhumi'. So all of sudden name of the
petitioner could not have been recorded in the khatauni of 1372 fasli which was the basic
year when the consolidation started without any basis and without any order of a
competent authority. The land vested in the Gaon Sabha and no right could have accrued
on the basis of the alleged lease deed and the land would be covered under Section 132 of
the UPZA & LR Act.

7. I have heard learned Counsel for the parties and gone through the record.

8. The Sub Divisional Officer after evaluating the evidence on record found that name of
the petitioner was found to be recorded without any basis in 1372 fasli and in 1356 fasli
to 1371 fasli plot No. 1138 (old No. 1402) was recorded as 1 bigha 6 biswa as 'old parti',
65 bigha 10 biswa and 10 biswansi as 'talab land' whereas in the present khatauni, the
name of Gaon Sabha was not existing. If the lease deed was executed in favour of the
petitioner, then efforts ought to have been made by the petitioner for getting his name
recorded after 29.12.1951 but no such effort was made and the land continued to be
recorded in the name of Gaon Sabha as 'jalmagna bhumi'. The lease deed has also not
been placed on record. Section 55 of the Tenancy Act requires that when an asami is
admitted to a holding, then he has to be admitted on the basis of written lease from his
owner consistent with the provisions of the Act and it should be by registered document
only in view of the provisions contained in Section 56 of the Tenancy Act.

9. Sections 8, 23 and 24 of the UPZA & LR Act provide as under:

8. Contract entered into after August 8, 1946 to become void from the date of vesting -
Any contract for grazing or gathering or produce from land or the collection of forest
produce or fish from any forest of fisheries entered into after the eighth day of August,
1946, between an intermediary and any other person in respect of any private forest,
fisheries or land lying in such estate shall become void with effect from the date of
vesting.

23. Transfer by way of sale or gift not to be recognized. - (1) Notwithstanding anything
contained in any law, no transfer, by way of sale or gift, of any estate or part thereof -

(a) made on or after the first day of July, 1948, shall be recognized for the purpose of
assessing the amount of rehabilitation grant payable to the intermediary,

(b) [ * * *]

(2) Nothing in Sub-section (1) shall apply to -

(a) any sale made under order of a court in execution of any decree or order for payment
of money, or
(b) any sale or gift made in favour of a waqf, trust, endowment or society established
wholly for charitable purposes, unless the State Government in any particular case directs
otherwise.

24. Contract or agreement to defeat provisions of this Act to be void. - Any contract or
agreement made between an intermediary and any person on or after the first day of July,
1948, which has the effect, directly or indirectly -

(a) of relieving, whether in whole or part, a bhumidhar or sirdar from the liability for the
land revenue, to be paid by him for any land comprised in his holding, or

(b) of entitling an intermediary to receive, on account of rehabilitation grant an amount


higher than what he would, but for the contract or agreement, be entitled to under this Act
- shall be and is hereby declared null and void.

10. Considering the provisions of Section 8 of the UPZA & LR Act, it is evident that any
such contract was bad since August, 1946 and that is why no deed has been placed on
record. Name of the petitioner was also not recorded in 1356 fasli and onwards.

11. Since the land owners were to get compensation for their land, so it was highly
improbable that they will execute a lease to a person creating a new right to any of their
land depriving themselves from getting compensation. The alleged lease deed, therefore,
is a fictitious document.

12. The question of conferment of certain right in favour of the petitioner on the basis of
the consolidation proceedings also does not withstand the test of law in view of the fact
that there was no adjudication regarding the rights of the petitioner vis-a-vis Gaon Sabha
and the Gaon Sabha was never impleaded as party nor any notice was given by the Gaon
Sabha. So, the case of the Gaon Sabha was never before the consolidation authorities and
co-tenancy claim was decided. The title of the petitioner was never investigated nor it
was gone into. Any order obtained by fraudulent means from any court would be a nullity
and can be ignored even in collateral proceedings as held by the Apex Court in the case
of A.V. Papayya Sastry and Ors. v. Govt. of A.P. and Ors. MANU/SC/1214/2007 :
(2007) 4 SCC 221. Relevant paragraphs-21, 22, 23, 24, 25, 26 and 39 of said case are as
under:

21. Now, it is well settled principle of law that if any judgment or order is obtained by
fraud, it cannot be said to be a judgment or order in law. Before three centuries, Chief
Justice Edward Coke proclaimed:

Fraud avoids all judicial acts, ecclesiastical or temporal".

22. It is thus settled proposition of law that a judgment, decree or order obtained by
playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of
law. Such a judgment, decree or order - by the first court or by the final court - has to be
treated as nullity by every court, superior or inferior. It can be challenged in any court, at
any time, in appeal, revision, writ or even in collateral proceedings.

23. In the leading case of Lazarus Estates Ltd. v. Beasley, (1956) 1 All ER 341 : (1956) 1
QB 702 : (1956) 2 WLR 502, Lord Denning observed:

No judgment of a court, no order of a Minister, can be allowed to stand, if it has been


obtained by fraud.

24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p.644, explaining the
nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not
impeachable from within, it might be impeachable from without. In other words, though
it is not permissible to show that the court was "mistaken", it might be shown that it was
"misled". There is an essential distinction between mistake and trickery. The clear
implication of the distinction is that an action to set aside a judgment cannot be brought
on the ground that it has been decided wrongly, namely, that on the merits, the decision
was one which should not have been rendered, but it can be set aside, if the court was
imposed upon or tricked into giving the judgment.

25. It has been said; Fraud and justice never dwell together (fraus et jus nunquam
cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari
debent).

26. Fraud may be defined as an act of deliberate deception with the design of securing
some unfair or undeserved benefit by taking undue advantage of another. In fraud one
gains at the loss of another. Even most solemn proceedings stand vitiated if they are
actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts,
whether in rem or in personam. The principle of "finality of litigation" cannot be
stretched to the extent of an absurdity that it can be utilized as an engine of oppression by
dishonest and fraudulent litigants.

39. The above principle, however, is subject to exception of fraud. Once it is established
that the order was obtained by a successful party by practising or playing fraud, it is
vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-
existent and non est and cannot be allowed to stand. This is the fundamental principle of
law and needs no further elaboration. Therefore, it has been said that a judgment, decree
or order obtained by fraud has to be treated as nullity, whether by the court of first
instance or by the final court. And it has to be treated as non est by every court, superior
or inferior.

13. Whenever it comes to the knowledge of the Collector that such fraudulent entries
have been made, it is always open for the Collector to enquire into the title and correct
the entries under Section 33/39 of the Revenue Act. This Court has laid down in the case
of Lutawan v. Gaon Sabha 1993 RD 103 to the same effect. The petitioner has not been
able to establish his right, title or claim based on any genuine document. How his name
appeared all of sudden in 1372 fasli is also not known and is amazing. It was a device at
the behest of the petitioner to usurp the Gaon Sabha land and with that motive and
intention he got his name fraudulently recorded in the basic year although earlier to the
basic year name of the Gaon Sabha was continuing and the land in question was recorded
as land covered under water (jalmagana bhumi).

14. In view of the aforesaid discussion, I find that the authorities have committed no
mistake in correcting the entry under Section 33/39 of the Revenue Act and the name of
the petitioner was rightly expunged from the revenue record.

15. The petition is devoid of merit. It is accordingly dismissed.

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med albeit illegally, by the Recovery Officer on February 13, 2006 and he paid the
remaining amount. The appellant thus paid the entire amount of Rs. 67.50 lakhs. The sale
was confirmed, sale certificate was issued and sale deed was registered in his favour. It is
the case of the appellant that he had paid stamp duty of Rs. 4 lakhs. Taking into
consideration all these factors, in our opinion, ends of justice would be met if respondent
No. 3-M/s MSN Organics (P) Ltd., who has purchased the property for Rs. 1.80 crores is
directed to pay an amount of Rs. 20,00,000/- (twenty lakhs only) to the appellant herein.
In our judgment, payment of this amount to the appellant (auction- purchaser) would
work as 'some solatium for his trouble and disappointment for the loss of that which is,
perhaps, a good bargain' [Chundi Charan v. Bankey Behary (1899) 26 Cal 449 (FB)].

31. For the foregoing reasons, the appeal deserves to be partly allowed and is accordingly
allowed to the extent indicated above.

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MANU/UP/0383/2009

IN THE HIGH COURT OF ALLAHABAD (LUCKNOW BENCH)

Decided On: 17.09.2009

Appellants: Prem Kumar


Vs.
Respondent: Additional Commissioner (Judicial) Lucknow Division and Ors.

Hon'ble Judges:
S.S. Chauhan, J.
Subject: Property

Subject: Civil

Catch Words

Mentioned IN

Disposition:
Petition dismissed

JUDGMENT

S.S. Chauhan, J.

1. Through this petition the petitioner has challenged the orders dated 08.08.2002 and
07.09.2001 passed by opposite parties No. 1 and 2.

2. The facts in brief relating to the present case are that the dispute relates to plot No.
1138 (new) of which old number was 1402 of Khata No. 319 situated in Village Alinagar
Sunehra, Pargana, Tehsil and District Lucknow. As stated, a lease deed was executed in
favour of the petitioner by the erstwhile zamindar Keshav Ram who was an intermediary
of Mohal Munnu Singh. In 1372 fasli for the first time the name of the petitioner came to
be recorded. Jagdish Kumar, minor brother of the petitioner, filed an objection claiming
co-tenancy right in the khata in dispute alleging therein that the lease was obtained in
representative capacity and he was entitled to co-tenancy right. The Consolidation Officer
rejected the claim of Jagdish Kumar. Feeling aggrieved against the order of the
Consolidation Officer dated 12.03.1964, an appeal was preferred before the Settlement
Officer Consolidation, which was dismissed vide order dated 18.06.1965. A revision was
preferred under Section 48 of the U.P. Consolidation of Holdings Act (for short "the
Act"), which was dismissed by the Deputy Director of Consolidation vide order dated
08.12.1965. Jagdish Kumar preferred a second appeal, which also came to be dismissed
vide order dated 02.02.1968.

3. On 05.04.1999, an application was moved by one Basant Kumar Arora alleging therein
that name of 12 khata holders has been fraudulently recorded in Gata No. 1138-Sa which
was 90 bigha 3 biswa. The Tehsildar proceeded to make an enquiry in the matter on the
direction of the Government. The Tehsildar as well as the then Sub Divisional Officer
made an enquiry and submitted report on 21.08.1999.

4. The petitioner was issued with a notice who filed his objection on 23.12.1999. The Sub
Divisional Magistrate after considering reply and the evidence on record rejected the
claim of the petitioner vide order dated 07.09.2001 under Section 33/39 of the U.P. Land
Revenue Act (for short "the Revenue Act"). The petitioner preferred a revision against
the order dated 07.09.2001 and the revisional court also dismissed the revision holding
that the entry made in favour of the petitioner was a forged entry, without any basis and
there was no such lease existing as claimed by him and the 'sanad' which was issued was
also found to be doubtful.

5. Submission of learned Counsel for the petitioner is that long standing entries could not
have been corrected under Section 33/39 of the Revenue Act. The lease deed executed in
favour of the petitioner could not have been disbelieved so easily by the courts below.
Title of the petitioner stood perfected on the basis of various judgements of the
consolidation authorities. The petitioner was in possession since long and has perfected
his title on the basis of the aforesaid lease executed by the intermediary. His further
submission is that no opportunity was given to the petitioner to participate in the enquiry
proceedings and only a notice was given to which he submitted his reply.

6. Learned Addl. Chief Standing Counsel, on the other hand, has submitted that the lease
deed alleged to be executed by Keshav Ram being an intermediary of Mohal Munnu
Singh on 29.12.1951 cannot confer any right in favour of the petitioner in view of the
provisions contained in Sections 8, 23 and 24 of the U.P. Zamindari Abolition and Land
Reforms Act, 1950 (for short "the UPZA & LR Act"). The petitioner was required to
have a written lease from the owner consistent with the provisions of Sections 55 & 56 of
the U.P. Tenancy Act (for short "the Tenancy Act"). No such lease has been placed on
record. Only averment has been made. The entry in favour of the petitioner was a forged
entry as the land in question is recorded as 'araji jis par pani hai' in 1356 fasli and in
khatuani of 1371 fasli it was recorded as 'jalmagna bhumi'. So all of sudden name of the
petitioner could not have been recorded in the khatauni of 1372 fasli which was the basic
year when the consolidation started without any basis and without any order of a
competent authority. The land vested in the Gaon Sabha and no right could have accrued
on the basis of the alleged lease deed and the land would be covered under Section 132 of
the UPZA & LR Act.

7. I have heard learned Counsel for the parties and gone through the record.

8. The Sub Divisional Officer after evaluating the evidence on record found that name of
the petitioner was found to be recorded without any basis in 1372 fasli and in 1356 fasli
to 1371 fasli plot No. 1138 (old No. 1402) was recorded as 1 bigha 6 biswa as 'old parti',
65 bigha 10 biswa and 10 biswansi as 'talab land' whereas in the present khatauni, the
name of Gaon Sabha was not existing. If the lease deed was executed in favour of the
petitioner, then efforts ought to have been made by the petitioner for getting his name
recorded after 29.12.1951 but no such effort was made and the land continued to be
recorded in the name of Gaon Sabha as 'jalmagna bhumi'. The lease deed has also not
been placed on record. Section 55 of the Tenancy Act requires that when an asami is
admitted to a holding, then he has to be admitted on the basis of written lease from his
owner consistent with the provisions of the Act and it should be by registered document
only in view of the provisions contained in Section 56 of the Tenancy Act.

9. Sections 8, 23 and 24 of the UPZA & LR Act provide as under:


8. Contract entered into after August 8, 1946 to become void from the date of vesting -
Any contract for grazing or gathering or produce from land or the collection of forest
produce or fish from any forest of fisheries entered into after the eighth day of August,
1946, between an intermediary and any other person in respect of any private forest,
fisheries or land lying in such estate shall become void with effect from the date of
vesting.

23. Transfer by way of sale or gift not to be recognized. - (1) Notwithstanding anything
contained in any law, no transfer, by way of sale or gift, of any estate or part thereof -

(a) made on or after the first day of July, 1948, shall be recognized for the purpose of
assessing the amount of rehabilitation grant payable to the intermediary,

(b) [ * * *]

(2) Nothing in Sub-section (1) shall apply to -

(a) any sale made under order of a court in execution of any decree or order for payment
of money, or

(b) any sale or gift made in favour of a waqf, trust, endowment or society established
wholly for charitable purposes, unless the State Government in any particular case directs
otherwise.

24. Contract or agreement to defeat provisions of this Act to be void. - Any contract or
agreement made between an intermediary and any person on or after the first day of July,
1948, which has the effect, directly or indirectly -

(a) of relieving, whether in whole or part, a bhumidhar or sirdar from the liability for the
land revenue, to be paid by him for any land comprised in his holding, or

(b) of entitling an intermediary to receive, on account of rehabilitation grant an amount


higher than what he would, but for the contract or agreement, be entitled to under this Act
- shall be and is hereby declared null and void.

10. Considering the provisions of Section 8 of the UPZA & LR Act, it is evident that any
such contract was bad since August, 1946 and that is why no deed has been placed on
record. Name of the petitioner was also not recorded in 1356 fasli and onwards.

11. Since the land owners were to get compensation for their land, so it was highly
improbable that they will execute a lease to a person creating a new right to any of their
land depriving themselves from getting compensation. The alleged lease deed, therefore,
is a fictitious document.

12. The question of conferment of certain right in favour of the petitioner on the basis of
the consolidation proceedings also does not withstand the test of law in view of the fact
that there was no adjudication regarding the rights of the petitioner vis-a-vis Gaon Sabha
and the Gaon Sabha was never impleaded as party nor any notice was given by the Gaon
Sabha. So, the case of the Gaon Sabha was never before the consolidation authorities and
co-tenancy claim was decided. The title of the petitioner was never investigated nor it
was gone into. Any order obtained by fraudulent means from any court would be a nullity
and can be ignored even in collateral proceedings as held by the Apex Court in the case
of A.V. Papayya Sastry and Ors. v. Govt. of A.P. and Ors. MANU/SC/1214/2007 :
(2007) 4 SCC 221. Relevant paragraphs-21, 22, 23, 24, 25, 26 and 39 of said case are as
under:

21. Now, it is well settled principle of law that if any judgment or order is obtained by
fraud, it cannot be said to be a judgment or order in law. Before three centuries, Chief
Justice Edward Coke proclaimed:

Fraud avoids all judicial acts, ecclesiastical or temporal".

22. It is thus settled proposition of law that a judgment, decree or order obtained by
playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of
law. Such a judgment, decree or order - by the first court or by the final court - has to be
treated as nullity by every court, superior or inferior. It can be challenged in any court, at
any time, in appeal, revision, writ or even in collateral proceedings.

23. In the leading case of Lazarus Estates Ltd. v. Beasley, (1956) 1 All ER 341 : (1956) 1
QB 702 : (1956) 2 WLR 502, Lord Denning observed:

No judgment of a court, no order of a Minister, can be allowed to stand, if it has been


obtained by fraud.

24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p.644, explaining the
nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not
impeachable from within, it might be impeachable from without. In other words, though
it is not permissible to show that the court was "mistaken", it might be shown that it was
"misled". There is an essential distinction between mistake and trickery. The clear
implication of the distinction is that an action to set aside a judgment cannot be brought
on the ground that it has been decided wrongly, namely, that on the merits, the decision
was one which should not have been rendered, but it can be set aside, if the court was
imposed upon or tricked into giving the judgment.

25. It has been said; Fraud and justice never dwell together (fraus et jus nunquam
cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari
debent).

26. Fraud may be defined as an act of deliberate deception with the design of securing
some unfair or undeserved benefit by taking undue advantage of another. In fraud one
gains at the loss of another. Even most solemn proceedings stand vitiated if they are
actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts,
whether in rem or in personam. The principle of "finality of litigation" cannot be
stretched to the extent of an absurdity that it can be utilized as an engine of oppression by
dishonest and fraudulent litigants.

39. The above principle, however, is subject to exception of fraud. Once it is established
that the order was obtained by a successful party by practising or playing fraud, it is
vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-
existent and non est and cannot be allowed to stand. This is the fundamental principle of
law and needs no further elaboration. Therefore, it has been said that a judgment, decree
or order obtained by fraud has to be treated as nullity, whether by the court of first
instance or by the final court. And it has to be treated as non est by every court, superior
or inferior.

13. Whenever it comes to the knowledge of the Collector that such fraudulent entries
have been made, it is always open for the Collector to enquire into the title and correct
the entries under Section 33/39 of the Revenue Act. This Court has laid down in the case
of Lutawan v. Gaon Sabha 1993 RD 103 to the same effect. The petitioner has not been
able to establish his right, title or claim based on any genuine document. How his name
appeared all of sudden in 1372 fasli is also not known and is amazing. It was a device at
the behest of the petitioner to usurp the Gaon Sabha land and with that motive and
intention he got his name fraudulently recorded in the basic year although earlier to the
basic year name of the Gaon Sabha was continuing and the land in question was recorded
as land covered under water (jalmagana bhumi).

14. In view of the aforesaid discussion, I find that the authorities have committed no
mistake in correcting the entry under Section 33/39 of the Revenue Act and the name of
the petitioner was rightly expunged from the revenue record.

15. The petition is devoid of merit. It is accordingly dismissed.

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