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Indian Council of World Affairs Act, 2001-Constitutional validity of-Held : Act not violative of Articles 14, 19(l)(c) and (a)-Parliament had legislative competence to pass the Act in exercise of powers under Article 245 read with entries 62 and 63 of List I of Seventh Schedule- There is no violation of doctrine of separation of powers-Also legislation not vitiated by the malafides-Hence, Act constitutionally valid-Constitution of India, 1950-Articles 14, 19(1 (c), I9(l)(a), 245, 246 and List I Seventh Schedule, Entries 62 and 63. Constitution of India, 1950 : Article 19-Fundamental rights under-Conferred only on citizens of India- Rights do not stand on common pedestal but have varying dimensions and underlying philosophies-Nature of reasonable restrictions imposed- Discussed. Article 19-Constitutional validity of Legislative enactment-Held : Test of reasonableness is to be satisfied-Also substance of the legislation is to be kept in view-Further, in a challenge laid to the constitutional validity the onus of proof is on going shifting process. Article 19(l)(c)-Right to form associations or unions-Does not carry with it fulfillment of every object of an association for which it was formed-It would be contrary to the scheme of rights guaranteed by part III and those conferred by Article 19(l)(a) to (g)-However, rights flowing from the fundamental rights are sought to be included and qualifications are not merely those in Article 19(4)-Further right to form an association is tested by reference to Article 19(l)(c), validity of restriction by Article 19(4), and once individual citizens form an association and carry on activity, validity of restriction is tested by reference to Article 19(l) (g) read with Article 19(6). Articles 245 and 246-Seventh Schedule, List I- Entries 62 and 63- Indian Council of World Affairs-Institution of national importance- Hence, enactment protected by Entries 62 and 63 of List I of Seventh Schedule-Indian Council of World Affairs Act, 2001. Articles 245 and 246-Doctrine of Colourable Legislation-Scope of-Held : Deals with the question of legislative competence to enact a law-If legislature is competent the motives, bonafides or malafldes are not relevant. Articles 245, 246, 13, 50 and 226–Indian Council of World Affairs Act, 2001-Act incorporating same provisions as contained in Ordinance declared invalid by High Court-Effect of the judgment of High Court on the legislation-Held: Judgment of High Court being rendered erroneous, overrulling of which is specifically recorded, the constitutional validity of subsequent legislation is not to be decided on basis of the judgment of High Court-Further before error could be corrected in appeal, Ordinance lapsed rendering appeal infructuous-Also by the impugned Act Parliament not overruling the judgment of High Court nor declaring the same law to be valid which was pronounced to be void by the Court-Hence, Act not violative of doctrine of separation of powers. In 1943, an organisation named India Council of World Affairs was formed. The Association was registered as a society. The principal object of the Society was to promote the study of Indian and international questions so as to develop a body of informed opinion on world affairs and Indian relation thereto through study, research, discussion, lectures, exchange of ideas and information etc., with other bodies in India and abroad engaged in similar activities. The Government of India gave land on lease to the society. The Society was housed in a building constructed on the land. It had a library, an auditorium, conference room and other office accommodation. The Society was receiving grants from the Government from 1974 until 1987, whereafter it was discontinued. There was serious mal- administration and mismanagement committed by the society. On 30.6.1990, the President of India promulgated an Ordinance whereby a statutory body known as the Indian Council of World Affairs was constituted, having perpetual succession and a common seal, with power to hold and dispose of both movable and immovable properties. The constitutional validity of the Ordinance was challenged. Single Judge of High Court held the Ordinance as ultra vires the Constitution, violating Articles 14, 19(l)(a) and 19(l)(c) thereof and also beyond the legislative competence of Parliament. Union of India filed a letters patent appeal against the judgment. As the Bill seeking to replace the Ordinance by an Act of Parliament could not be passed, the Ordinance lapsed. Division Bench held that the appeal had become infructuous and dismissed the same. The President promulgated Ordinance No. 3 of 2000, on similar and identical terms of the 1990 Ordinance. However, the Ordinance lapsed. Ordinance No. 1 of 2001 was then promulgated seeking to revive Ordinance No. 3 of 2000, however, this Ordinance also lapsed. Thereafter, Indian Council of World Affairs Ordinance No. 3 of 2001 was promulgated. Writ petition (C) No. 276 of 2001 was filed challenging the constitutional validity of the Ordinance, 2001. During pendency of this petition, Ordinance came to be replaced by an Act of Parliament-Indian Council of World Affairs Act, 2001. Writ petition (C) No. 543 of 2001 was filed challenging the constitutional validity of the Act. Writ petitioners contended that by promulgating the impugned Ordinance and by enacting the impugned Act, the Central Government has taken over the Society as also its movable and immovable properties resulting in violation of petitioners’ right to freedom of speech and expression and to form associations or unions as conferred on citizens by Article 19(l)(a) and (c); that the provisions of the Societies Registration Act, 1860 were effective enough which, if invoked, could have taken care of the alleged grievances; that by passing the legislation, 1CWA institution was singled out though there were several other institutions run by societies or other organizations which committed more serious mismanagement and mal- administration; that the impugned Act is violative of Article 300A as it deprives the petitioners of the property vesting in the society; that the impugned Ordinance and the Act are malicious being motivated by political considerations; that the identically worded Ordinance having held to be unconstitutional and the judgment of High Court holding so having achieved a finality, the Parliament could not have re-enacted the contents of the vitiated Ordinance into an Act; and that the impugned Ordinance and the Act are violative of the doctrine of Separation of Powers. Respondent-Union of India contended that the earlier Ordinances have mere academic relevance in view of the Parliament having ultimately enacted the Act; that as the India Council of World Affairs is an institution of national importance, the impugned enactment is protected by Entries 62 and 63 of List I of the Seventh Schedule; that the Society has not been touched, it continues to survive as before and, therefore, there is no violation of fundamental right within the meaning of Article 19(l)(a) and (c); that the building and the library having built out of Government funds, subventions and some donations, the Society does not have any right in any of the properties; that the impugned Ordinance and Legislation were not politically motivated; that the decision of the Single Judge of High Court with respect to the identically worded Ordinance was incorrect; and that appeal filed was disposed of without any adjudication on merits since the High Court held that the appeal was rendered academic in view of the Ordinance having lapsed. =Disposing of W.P. (C) No. 276 of 2001 and dismissing W.P. (C) No. 543 of 2001, the Court HELD : 1. The challenge to the constitutional validity of the Indian Council of World Affairs Act, 2001 fails. [199-G] 2.1. At one time, the institution-ICWA was receiving financial aid from the Government of India. 1CWA has been declared to be an `institution of national importance’ by the Act of Parliament, thus the Parliament is competent to make any law governing the management, administration and affairs of such an institution. It is not the case of the petitioners that in enacting other provisions of the impugned Act, the Parliament has encroached upon any field of legislation not available to it. The legislation is clearly covered by Entries 62 and 63 of List I Schedule 7 of the Constiution. [199-H, 200-A, B, C] 2.2. The various Entries in the three Lists of the Seventh Schedule are legislative heads defining the fields of legislation. A large and liberal interpretation should be given to the scope of the Entries. Not only the main matter but also any in incidental and ancillary matters are to be included within the field of the entry. The settled rules of interpretation governing the Entries do not countenance any narrow and pedantic interpretation.[J200-C-E] Navinchandra Mafatlal v. CIT Bombay City, [1955] 1 SCR 829 and Sri Ram Ram Narain Medhi v. The State of Bombay, [1959] Supp. 1 SCR 989, relied on. British Coal Corporation v. The King, AIR (1935) PC 158 and United Provinces v. Atiqa Begum, AIR (1941) FC 16, referred to. 3.1. The Court, confronted with a challenge to the constitutional validity of any legislative enactment by reference to Article 19 would first ask what is the sweep of the fundamental right guaranteed to the citizens by the relevant sub-clause out of sub-clauses (a) to (g) of clause (1); if the right canvassed falls within the sweep and expanse of any of the sub- clauses of clause (1), then whether the impugned law imposes a reasonable restriction falling with the scope of clauses (2) to (6) respectively. However, if the right sought to be canvassed does not fall within the sweep of the fundamental rights but is a mere concomitant or adjunct or expansion or incidence of that right, then the validity thereof is not to be tested by reference to clauses (2) to (6). The test which it would be required to satisfy for its constitutional validity is one of reasonableness, or if it comes into conflict with any other provision of the Constitution. This has to be decided by keeping in view the substance of the legislation and not being beguiled by the mere appearance of the legislation. [181-B-D; 187-F] The State of Madras v. V.G. Row, [1952] SCR 597, followed. H.C. Narayanappa & Ors. v. State of Mysore & Ors., [1960] 3 SCR 742, relied on. State of West Bengal v. Subodh Gopal Bose & Ors., [1954] SCR 587, referred to. 3.2. In spite of there being a general presumption in favour of the constitutionality of the legislation, in a challenge laid to the validity of any legislation allegedly violating any right or freedom guaranteed by clause (1) of Article 19 of the Constitution, on a prima facie case of such violation having been made out, the onus would shift upon the respondent- State to show that the legislation conies within the permissible limits of the most relevant out of clauses (2) to (6) of Article 19 of the Constitution, and that the restriction is reasonable. The Court would expect the State to place before it sufficient material justifying the restriction and its reasonability. On the State succeeding in bringing the restriction within the scope of any of the permissible restrictions, such as, the sovereignty and integrity of India or public order, decency or morality etc., the onus of showing that restriction is unreasonable would shift back to the petitioner. Where the restriction on its face appears to be unreasonable, nothing more would be required to substantiate the plea of unreasonability. Thus the onus of proof in such cases is an on-going shifting process to be consciously observed by the court. [187-B-E] Charanjit Lal Chowdhury v. The Union of India & Ors., [1950] SCR 869; Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. State of Delhi (Now Delhi Administration) & Anr., [1962] Supp. 1 SCR 156, relied on. 3.3. A right to form associations or unions guaranteed under Article 19(l) (c) does not include within its ken as a fundamental right a right to form associations or unions for achieving a particular object or running a particular institution, the same being a concomitant or concomitant to a concomitant of a fundamental right, but not the fundamental right itself. The associations or unions of citizens cannot further claim as a fundamental right that it must also be able to achieve the purpose for which it has come into existence so that any interference with such achievement by law shall be unconstitutional, unless the same could be justified under Article 19(4) as being a restriction imposed in the interest of public order or morality. It would be contradictory to the scheme underlying the text and the frame of the several fundamental rights guaranteed by Part III and the scheme of the guarantees conferred by sub- clauses (a) to (g) of clause (1) of Article 19. [173-E-H] 3.4. Even a very liberal interpretation cannot lead to the conclusion that the trade unions have a guaranteed right to an effective collective bargaining or to strike, either as part of collective bargaining or otherwise. The right to strike or the right to declare a lock-out may be controlled or restricted by appropriate industrial legislation, and the validity of such legislation would have to be tested not with reference to the criteria laid down in clause (4) of Article 19 but by totally different considerations. A right guaranteed by Article 19(l)(c) on a literal reading thereof can be subjected to those restrictions which satisfy the test of clause (4) of Article 19. The rights not included in the literal meaning of Article 19(l)(c) but which are sought to be included therein as flowing therefrom i.e. every right which is necessary in order that the association, brought into existence, fulfills every object for which it is formed, the qualifications therefor would not merely be those in clause (4) of Article 19 but would be more numerous and very different. Restrictions which bore upon and took into account the several fields in which associations or unions of citizens might legitimately engage themselves, would also become relevant. [175-D-H] 3.5. A perusal of Article 19 with certain other Articles like 26, 29 and 30 shows that while Article 19 grants rights to the citizens as such, the associations can lay claim to the fundamental rights guaranteed by Article 19 solely on the basis of there being an aggregation of citizens, i.e., the rights of the citizens composing the body. As the stream can rise no higher than the source, associations of citizens cannot lay claim to rights not open to citizen or claim freedom from restrictions to which the citizens composing it are subject. While right to form an association is to be tested by reference to Article 19(l)(c) and the validity of restriction thereon by reference to Article 19(4), once the individual citizens have formed an association and carry on some activity, the validity of legislation restricting the activities of the association shall have to be judged by reference to Article 19(l)(g) read with 19(6). A restriction on the activities of the association is not a restriction on the activities of the individual citizens forming membership of the association. [174-B-C, 174-A-B] Smt. Damyanti Naranga & Anr: v. The Union of India and Ors., 11971] 3 SCR 840 and Asom Rashtrabhasha Prachar Samiti, Hedayatpur- Gauhati-3 and Anr. v. State of Assam and Ors., [1989] Supp. SCR 160, distinguished. Smt. Maneka Gandhi v. Union of India & Am:, [1978] 1 SCC 248; All India Bank Employees’ Association v. National Industrial Tribunal, [1962] 3 SCR 269; M/s. Raghubar Dayal Jai Parkash & Anr: v. Union of India & Anr., [1962] 3 SCR 547; Azeez Basha v. Union of India, [1968] 1 SCR 833; D.A. V. College Jullundur etc., v. The State of Punjab and Ors., [1971] 2 SCC 269; Sethapathi Nageswara Rao & Ors. v. The Government of A. P. & Ors., AIR (1978) A.P. 121 (F.B.); Harakh Bhagat and Anr. v. Assistant Registrar, Co- operative Societies, Barh, and Ors., AIR (1968) Patna 211; S.P. Motta v. Union of India & Ors., [1983] 1 SCC 51 and L.N. Mishra Institute of Economic Development and Social Change, Patna v. State of Bihar & Ors., [1988] 2 SCC 433, referred to. 3.6. As soon as citizens form a company, the rights are guaranteed to them by Article 19(l)(c). Once a company or a corporation is formed, the business carried on by the said company or corporation is the business of the company or corporation, and is not the business of the citizens who get the company or corporation formed or incorporated, and the rights of the incorporated body must be judged on that footing alone and cannot be judged on the assumption that they are the rights attributable to the business of individual citizens. The same principle would apply to a society registered under the Societies Registration Act, 1860. [177-D-F] Tata Engineering and Locomotive Co. Ltd & Anr. v. The State and Ors., [1964] 6 SCR 885, relied on. 3.7. The pith and substance of the impugned legislation is to take over an institution of national importance. As the formation of the society, which is a voluntary association, is not adversely affected and the members of the society are free to continue with such association, the validity of the impugned legislation cannot be tested by reference to sub-clauses (a) and (c) of clause (1) of Article 19. The activity of the society which was being conducted through the institution ICWA has been adversely affected and to that extent the validity of the legislation shall have to be tested by reference to sub-clause (g) of clause (1) of Article 19. The activity was of the society and the society cannot claim a fundamental right. Even otherwise the impugned legislation is a reasonable legislation enacted in the interest of the general public and to govern an institution of national importance. It is valid. It does not offend the right guaranteed by Article 19(l)(c). It also does not in any manner deprive the members of the Society of their freedom of speech and expression under Article 19(l)(a). [184-G-H, A-B; 187-G] 4.1. No other institution in the grip of more serious mismanagement and mal-administration is named or particularized so as to be comparable with ICWA and there can be a legislation in respect of a single institution as is clear from the language itself of Entries 62 and 63 of List I. A single institution is capable of being treated as a class by itself for the purpose of legislation if there are special circumstances or reasons which are applicable to that institution and such legislation would not incur the wrath of Article 14. [192-G-H; 193-A] 4.2. Merely because an alternative action under the Societies Registration Act, 1860 could have served the purpose, a case cannot be and is not made out for finding fault with another legislation if the same be within the legislative competence of the Parliament. The Parliament had legislative competence to pass the legislation in exercise of its legislative power under Article 245 of the Constitution read with Entries 62 and 63 of List I. The legislation cannot be said to be arbitrary or violative of Article 14. [192-B-C] S.P. Mittal v. Union of India & On., [1983] 1 SCC 51; Ram Krishna Dalmia v. Justice S.R. Tendolkar, [1959] SCR 279; Raja Birakishore v. State of Orissa, [1964] 7 SCR 32 and Chiranjit Lal Chowdhuri v. Union of India, [1950] SCR 869, referred to. 5. The exercise of testing the vires of the impugned legislation by reference to Article 300A of the Constitution is uncalled for in the instant petition since the right to property has ceased to be a fundamental right, and it is doubtful if it could be enforced by a petition under Article 32 of the Constitution; that a case of violation of Article 300A the way it is canvassed is not taken up in the writ petition; that the petition raises disputed questions of facts; that the Union of India has taken over the institution by enasting a law which is within the legislative competence of the Parliament; and that there is not one document of title produced by the petitioners in support of their claim to the property. [191-D; 190-H; 191-A-C] 6. The whole doctrine of Colourable legislation resolves itself into the question of the competency of a particular legislature to enact a particular law. It does not involve any question of bona fides or mala fides on the part of the legislature. If the legislature is competent to pass a particular law, motives which impelled it to act are irrelevant and if incompetent, the question of motive does not arise at all. In the instant case, the Parliament has the requisite competence to enact the impugned Act, the enquiry into the motive which persuaded the Parliament into passing the Act-are not relevant. [168-E-G]. K.C. Gajapati Narayan Deo & Ors. v. State of Orissa, [1954] SCR 1 and Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. State of Delhi (Now Delhi Administration) & Anr:, [1962] Supp. 1 SCC 156, referred to. 7.1. Filing of an appeal destroys the finality of the judgment under appeal. Upon the lapsing of the earlier Ordinance pending an appeal before a Division Bench, appeal being rendered infructuous, the judgment of Single Judge about the illegality of the earlier Ordinance, cannot any longer bar this Court from deciding about the validity of a fresh law on its own merits, even if the fresh law contains similar provisions. [198-F; 199-A-B] 7.2. The judgment of High Court is not correct and the overruling of the same is specifically recorded. If by reason of retrospective alteration of the factual or legal situation, the judgment is rendered erroneous, the constitutional validity of the subsequent legislation is not available to be decided on the basis of the previous judgment. [195-D] 7.3. A legislation which on an independent scrutiny is held to be within the legislative competence of the enacting legislature cannot be struck down merely because the legislature has re-enacted the same legal provisions into an Act which, ten years before, were incorporated in an Ordinance and were found to be unconstitutional in an erroneous judgment of the High Court and before the error could be corrected in appeal the Ordinance itself lapsed. By the impugned Act the Parliament has not overruled the judgment of the High Court nor has it declared the same law to be valid which has been pronounced to be void by the court. It would have been better if before passing the Bill into an Act the attention of the Parliament was specifically invited to the factum of an earlier part materia Ordinance having been annulled by the High Court. The impugned Act is not liable to be annulled on the ground of violation of the doctrine of Separation of Powers. [199-C-G] Shri Prithvi Cotton Mills Ltd. & Anr. v. Broach Borough Municipality & Ors., [1969] 2 SCC 283; M/A. Misrilal Jain v. State of Orissa & Anr:, [1977) 3 SCC 212; Madan Mohan Pathak & Anr. v. Union of India & Ors., [1978] 2 SCC 50; Union of India & Anr. v. Raghubir Singh (Dead) by Lrs. etc., [1989] 2 SCC 754; Indian Aluminium Co. & Ors. v. State of Kerala& Ors., [1996] 7 SCC 637; Welfare Association A. R.P. Maharashtra & Anr. v. Ranjit P. Gohil & Ors., JT (2003) 2 SC 335; People’s Union for Civil Liberties (PUCL) & Anr. v. Union of India & Anr., [2003] 4 SCC 399 and Smt. Indira Nehru Gandhi v. Shri Raj Narain & Anr., [1975] Supp. SCC 1, referred to. A Judge on Judging : The Role of a Supreme Court in Democracy- By President Aharon Barak, Supreme Court of Israel, Harvard Law Review, Vol. 116, No. 1, November 2002, p. 135, referred to. 8. All the grounds taken in writ petition challenging the Indian Council of World Affairs Ordinance, 2001 have been reiterated and reurged in the writ petition challenging the Indian Council of World Affairs Act 2001. As the merits of the pleas raised on behalf of the writ petitioners are available to be considered in the latter writ petition, the writ petition challenging the Ordinance is rendered infructuous and is disposed of without any adjudication on merits. The Ordinance having ceased to operate, the factum of promulgation of such Ordinance remains only a part of the narration of events. Further no such action was taken thereunder the legality whereof may survive for adjudication. [168-A-C] CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 276 of 2001. WITH W.P. (C) No. 543 of 2001. =2004 AIR 1295, 2003(6 )Suppl.SCR151 , 2004(1 )SCC712 , 2003(10 )SCALE141 ,

CASE NO.: Writ Petition (civil) 276 of 2001 Writ Petition (civil) 543 of 2001 PETITIONER: Dharam Dutt & Ors. RESPONDENT: Union of India & Ors. DATE OF JUDGMENT: 24/11/2003 BENCH: R.C. LAHOTI & BRIJESH KUMAR. JUDGMENT: J U D G M E N T R.C. LAHOTI, J. W.P. (C) No.276/2001 filed on June 22, 2002, … Continue reading

Labour Laws: Uttar Pradesh Absorption of Retrenched Employee of Government/Corporations in Government Service Rules, 1991-ss. 2(b) and 2(c)-Closure of Institution registered under Societies Registration Act-Retrenchment of its employees-Writ Petition-Single Judge of High Court directing absorption of retrenched employees holding the institution as an instrumentality of the Government-Order of Single Judge reversed by Division Bench of High Court-On appeal, held: The retrenched employees are not entitled to be absorbed-Absorption Rules are not applicable to the Institution in question-As the Institution is not an instrumentality of the State and the same has not been constituted under any Uttar Pradesh Act-Societies Registration Act, 1860. The institution, of which the appellants were the employees, was registered under Societies Registration Act, 1860. It decided to close down one of its centres and the workmen employed therein, were to be retrenched after paying compensation. Appellants-retrenched employees filed Writ Petition. Single Judge of High Court allowed the same holding that the Institution was wholly owned, controlled and managed by the State Government and directed appointment of the employees by their absorption in any other institution of State Government. Special appeal, thereagainst was allowed by High Court holding that the institution was not an instrumentality of the State Government and hence could not be termed as State Government or a public Corporation. In appeal to this Court, appellant contended that even though, the institution was registered under Societies Registration Act, that does not mean that it was not established or constituted under any State Act, and hence they were entitled to protection under Uttar Pradesh Absorption of Retrenched Employees of Government/Corporation in Government Service Rules, 1991. =Dismissing the appeals, the Court HELD: 1. Uttar Pradesh Absorption of Retrenched Employees of Government/Corporations in Government Service Rules, 1991 are not applicable to the Institution. A bare reading of ss. 2(b) and 2(c) of the Absorption Rules, makes the positions clear that in order to bring application of the Rules the public corporation has to be a body corporate established or constituted by or under any Uttar Pradesh Act. The fundamental requirement is that the corporation should have been constituted by or under any Uttar Pradesh Act. Undisputedly, the Societies Registration Act is a Central Act. The Institution is not an instrumentality of the State and/or could not be termed to be State Government or a public Corporation. There was no material placed before the High Court to establish that IERT is an instrumentality of the State. [Paras 3, 7, 8, 9 and 10] [192-D-E; 193-A-B; 198-A-B-C] 2. Even if a society or institute is registered under the Societies Registration Act and some functionaries of the State Government are the members of the institute, such an institute may not be termed as an instrumentality of the State, if deep and pervasive control over the affairs of the institute was not with the State Government. There is basic distinction between a Society and a Corporation. [Para 7] [193-B-C] Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Ors., [2002] 5 SCC 111; Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. State of Delhi (Now Delhi Adminstration) and Anr., AIR (1962) SC 458, relied on. Ajay Hasia and Ors. v. Khalid Mujib Sebravardi and Ors., [1981] 1 SCC 722, referred to. P. Vishwanantha Shetty, S.J. Aristotle, Yatish Mohan, E.C. Vidya Sagar, Shekhar Prit Jha and Dr. Bheem Pratap Singh for the Appellants. Dinesh Dwivedi, Niranjana Singh, Abhishek Chaudhary and Seita Vaidyalingam for the Respondents.=2008 AIR 30 , 2007(10 )SCR189 , 2007(8 )SCC171 , 2007(11 )SCALE361 ,

CASE NO.: Appeal (civil) 4590 of 2004 PETITIONER: Mohammad Sadiq & Ors RESPONDENT: State of Uttar Pradesh & Ors DATE OF JUDGMENT: 21/09/2007 BENCH: Dr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA JUDGMENT: J U D G M E N T CIVIL APPEAL NO. 4590 OF 2004 [With Civil Appeal No.4606 of 2004] Dr. ARIJIT PASAYAT, … Continue reading

Code of Civil Procedure, 1908-Order 39, Rules 1 and 2-Interim injunction-Grant of-Prima facie case-Registered Society-Persons inducted as Promoter-Members into General Body allegedly by resolution of Board of Governors and subsequently approved by General Body-Society claiming that induction was null and void as resolution of Board of Governors was merely a `proposal’ and subsequent approval of General Body of Society from holding election of Governing Body authority-Interim injunction to restraint Society from holding election of Governing Body without giving them opportunity of participation-Rejected by Courts below on lack of prima facie case-Correctness of-Held-Resolution of Board of Governors merely stated that nine persons will be inducted into General Body as per Constitution of Society-As per Articles of Association of Society an amount had to be paid by a person before his admission, and that was not paid either at the time of meeting of Board of Governors or General Body meeting ; it was paid only after impugned resolution was passed and that too without informing Society-Even if there was a mistake, it was not a mutal mistake-Notice calling for explanation and opportunity of hearing was not required as controversy did not relate to expulsion of member and issue whether induction into General Body was legal, was yet to be decided-In absence of any particulars, it cannot be said that action of Society was mala fide or colourable exercise of power-Photographs, reports etc. showing that all throughout they were treated as Promoter-Members and worked as such, were immaterial, if admission in Society was illegal. Respondent is a registered Society. Its Founding Members Constituted General Body as well as Governing Council/Executive Body. It is the case of the appellants that they were inducted as Promoter-Members into the General Body of the Society by a unanimous resolution of the Board of Governors dated January 27, 2000, in exercise of their power under Clause 11(i) of the Articles of Association, and this was subsequently approved by the General Body of the respondent on March 22, 2006. They were therefore entitled to participate in the election of Board of Governors as per the Memorandum and Articles of Association. They received a caveat from the respondent stating that their claim as Promoter-Members of the society and calling for General Body Meeting was not tenable because their admission as Promoter-Members was null and void. It stated that the resolution dated January 27, 2000 was merely a `proposal’ with a condition that nine persons would be admitted as members at an appropriate time, and the resolution dated March 22, 2006 passed by the General Body of the Society admitting them as Promoter-Members was without authority and null and void. Aggrieved by the above, the appellants filed Original Petitions in the City Civil Court for a declaration that they were legally inducted members and were entitled to participate in the management and administration of the respondent. A prayer was also made for permanent injunction, along with application for interim injunction under Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908, to restrain the respondent from holding election of the Governing Body without including them and without giving them opportunity of participating in the election process. The City Civil Court dismissed the application for interim injunction inter alia observing that no prima facie case had been made out. Aggrieved by this order, the appellants preferred Revision Petitions. The High Court dismissed all Revision Petitions, and directed the trial Court to dispose of Original Petitions. This is challenged by all the appellants in the present appeals. Appellants contended that (i) neither the Memorandum of Association nor Articles of Association imposed a condition precedent for payment of Rs.1 lakh for becoming a Promoter-Member, and its non-payment cannot be made a ground to expel or remove them; even otherwise, they had never refused to pay the said amount; (ii) apart from the fact that Articles of Association prescribed no time limit within which a payment of Rs.1 lakh was to be made, even respondents were of the same opinion; it was thus a case of mutual mistake for which they cannot be blamed; (iii) the payment has already been made and that fact ought to have been considered by the Courts and relief ought to have been granted in their favour; (iv) no notice was issued by the respondent to show cause why their Membership should not be terminated or discontinued, nor an opportunity of hearing was afforded, nor principles of natural justice were observed; (v) they were always treated as Promoter-Members which fact is proved from various photographs and reports (vi) the action of respondent was mala fide and has been taken in colourrable exercise of power with a view to deprive them from participating in election. Respondents contended that (i) Article 4(i)(b) provides clearly that an applicant who `pays’ Rs.1 lakh would become a Promoter Member; (ii) no such payment was made in March, 2006 when the so-called approval was granted by the General Body; (iii) the said amount was deposited by the appellants directly in the Bank without even informing them; (iv) it was not a case of mutual mistake; the relevant clauses of Articles of Association were unambiguous and since no payment was made as required, no right accrued in favour of the appellants and the action of the Society was legal and lawful; (v) it was not a case of removal, termination or expulsion of a Member and hence there was no question of issuing notice, calling for explanation or affording opportunity of hearing or observance of principles of natural justice or fair play. =Dismissing the appeal, the Court HELD: 1. Neither the trial Court nor the High Court had committed any illegality in refusing interim relief. [Para 18] [784-C] 2. Reading of the Minutes of 85th meeting of the Board of Governors of the Society makes it clear that nine persons were selected and as stated in the minutes, they “will be inducted” into General Body as per the Constitution of the Society. [Para 20 and 21] [786-A-B; F-G] 3.1. Prima facie, the contention of the Society is well founded that an amount ought to have been paid by a person before he is admitted as Patron Member in the light of the phraseology used in Clause 4 (b) of the Articles of the Association. [Para 22] [787-C-D] 3.2. It is not even the case of the appellants that they had paid an amount of Rs.1 lakh before or on January 27, 2000. [Para 21] [786-F-G] 3.3. Even if there was a mistake, it was not a `mutual mistake’. [Para 28] [789-B-C] 3.4. So-called payment was made only after the impugned resolution was passed and that too without informing the Society. [Para 28] [789-B-C] 3.5. It is also pertinent to note that the payment was made by the appellants on October 26, 2006 and a petition was filed in the Court on October 29, 2006 along with an application for the interim relief. But even in the application for interim relief, the factum of payment of amount after the resolution was passed, was not disclosed by the applicants. [Para 28] [789-C-D] 4. The controversy does not relate to expulsion of a member. The question is whether the appellants can be said to have been legally admitted as Promoter-Members. Once it is held that the appellants were properly inducted and had become Promoter-Members of the Society, principles of natural justice required issuance of notice, calling for explanation and affording reasonable opportunity of being heard. The case of the Society, however, is that appellants were never legally inducted as Promoter-Members and their so called induction was not in consonance with law. The said issue is yet to be decided. [Para 24] [788-A-C] Board of Control for Cricket in India and Anr. v. Netaji Cricket Club & Ors., [2005] 4 SCC 741, referred to. T.P. Daver v. Lodge Victoria, No. 363, S.C. Belgaum, [1964] 1 SCR 1, distinguished. Halsbury’s Laws of England, Fourth Edition, Vol. 19(1), p 143, para 201, referred to. 5. No particulars, much less sufficient particulars, have been placed on record to show that the action taken by the Society was mala fide or had been taken in colourable exercise of power. [Para 31] [790-D-E] 6. The plea that the appellants were all throughout treated by the Society as Promoter-Members and they had worked for all these years which is established from various photographs, reports etc., is of no consequence. If the appellants had not been legally admitted as Patron Members, they could not be treated as such and cannot get benefit on the basis of photographs, reports, functions, etc. [Para 27] [788-G-H; 789-A-B] K.K. Venugopal, Soli J Sorabjee and Ravindra Shrivastava, Dr. S.K. Verma, Kunal Verma, Ramakanth Reddy, Ranbir Singh Yadav, Arjun Garg, Ardhendunauli KR. Prasad, M. Mannam and Rajul Shrivastava for the Appellant. K. Rajendra Chowdhary, K. Swami, Prabha Swami, Rakesh K. Sharma, Bina Madhavan, S. Udaya Kumar Sagar, Venayagam and Mishi Choudhari (for M/s. Lawyers’ Knit & CO.) for the Respondents.

CASE NO.: Appeal (civil) 2197 of 2007 PETITIONER: D. DWARAKANANTHA REDDY RESPONDENT: CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS DATE OF JUDGMENT: 27/04/2007 BENCH: C.K. THAKKER & ALTAMAS KABIR JUDGMENT: J U D G M E N T CIVIL APPEAL No. 2197 OF 2007 Arising out of Special Leave Petition (Civil) No. 288 OF 2007 WITH … Continue reading

Narcotic Drugs and Psychotropic Substances Act: 1985: s. 37-Application for bail-Companies providing network facilities for arranging supply of banned psychotropic substance on line-Owner arrested u/ss. 24 and 29-Plea of applicant that his companies were protected from prosecution by s. 79 of Information Technology Act-Held: Applicant and his associates were not innocent intermediaries or network service providers as defined under s. 79 of I.T. Act but the said business was only a facade and comouflage for more sinister activity-In this situation, s. 79 will not grant immunity to an accused who has violated provisions of the Act as this provision gives immunity from prosecution for an offence only under I.T. Act itself-In the face of overwhelming inculpatory evidence it is not possible to give finding envisaged under s.37 of the Act for grant of bail that there were reasonable grounds for believing that applicant was not guilty of offence alleged, or that he would not resume his activities should bail be granted-Information Technology Act, 2000-s. 79. K.T.S. Tulsi and Uday Umesh Lalit, Arun Kumar Srivasma, Manoj Prasad, Amit Pawan and G. Bhargava for the Appellant. Vikas Singh, ASG., B.B. Singh, Binu Tamta and Sushma Suri for the Respondents.

CASE NO.: Appeal (crl.) 1659 of 2007 PETITIONER: Sanjay Kumar Kedia RESPONDENT: Narcotics Control Bureau & Anr DATE OF JUDGMENT: 03/12/2007 BENCH: S.B.SINHA & HARJIT SINGH BEDI JUDGMENT: JUDGMENT O R D E R CRIMINAL APPEAL NO. 1659 OF 2007 (@SLP (Crl.) No. 3892 of 2007) HARJIT SINGH BEDI, J. 1. Special Leave granted. 2. … Continue reading

private education institution = fees regulations = When the State Government accepted the recommendations of the Sixth Pay Commission for revision of the pay and allowances of the employees with effect from 01.01.2006, different private engineering and technical colleges and institutions sought revision of the fees for students admitted in their colleges and institutions before the Fee Regulatory Committee on the ground that they have to pay their teaching and non-teaching staff the revised pay and allowances as per the recommendations of the Sixth Pay Commission, but the Fee Regulatory Committee declined to revise the fees. = “10(3). The fee structure so determined by the Fee Regulatory Committee shall be binding to the unaided professional educational colleges or institutions for a period of three years and the fee so determined shall be applicable to a student who is admitted to a professional educational college or institution in that academic year and shall not be revised till the completion of his professional course in that college or institution.” = We accordingly set aside the impugned orders of the High Court and direct that the increase in cost suffered by the respondents-colleges/institutions on account of the higher pay and allowances payable to the teaching and non- teaching staff on the basis of the recommendations of the Sixth Pay Commission will be taken into consideration by the Fee Regulatory Committee while determining the fees for the academic years 2011-2012, 2012-2013 and 2013-2014 and subsequent period of three years in accordance with the

Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8543 OF 2011 (Arising out of S.L.P. (C) NO.34150 OF 2010) Fee Regulatory Committee …… Appellant Versus Kalol Institute of Management, Etc. …… Respondents WITH CIVIL APPEAL NO. 8544 OF 2011 (Arising out of S.L.P. (C) NO.34200 OF 2010), CIVIL APPEAL NO. … Continue reading

Tharigonda Vengamamba Mirasi Service =The relevant principles, touching upon the question posed by us supra, can be conveniently considered under three distinct heads, namely, (i) the power of the Court under Order VII Rule 7 of the CPC to grant the relief not asked for; (ii) the power of the Court under Order XX Rule 12 of the CPC to pass a decree for mesne profits; and (iii) under Order XLI Rule 33, and the impact of subsequent events.=It is a general practice that most of the plaints have a prayer in general terms ‘such other relief as the Court may deem fit and proper’ or ‘such further or other relief as the nature or case require’. Such general relief would be sufficient to empower the Court to grant a lesser relief which is incidental to the general relief.

THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI RAMESH RANGANATHAN LETTERS PATENT APPEAL No.77 OF 1997 27-07-2011 G.Subrahmanyam (died) per LRs G.Leela and others Counsel for Petitioners:Sri T.S.Anand Counsel for Respondents: Dr P.B.Vijay Kumar :JUDGMENT: (Per Hon’ble Sri Justice V.V.S.Rao) This plaintiff’s Letters Patent Appeal, under clause 15 of the Letters Patent, is against … Continue reading

Companies Act, 1956 : Sections 77 and 155-Petition for rectification of register of the company on the ground that its director committed fraud by purchasing shares in his name out of company’s funds-Respondent seeking summary dismissal of petition on the ground of limitation-Company Judge dismissing the petition-Correctness of-Held: Company judge erred in throwing the petition at preliminary stage as being barred by limitation-There is no finding on the point that petitioner had knowledge of transaction earlier-Plea of limitation is a mixed question of law and fact and necessarily required evidence about the time when fraud was discovered-Code of Civil Procedure, 1908, Order 6 Rule 4; Order 7, Rule 11; Order 14, Rule 1-Limitation Act, Section 17 and Article 137. Section 77-Purchase by Company of its own shares-Legality of-Held: Not legal except when by way of reduction of share capital. Civil Procedure Code-Applicability of, to proceedings under Companies Act-Held: Applicable by virtue of Rule 6 of Companies (Court) Rules. Code of Civil Procedure, 1908 : Order 7, Rule 11-Rejection of plaint under-Scope of-Held: Averments made in plaint alone to be seen-Any affidavit filed in reply to petition cannot be looked into. Order 14, Rule 2-Preliminary issues-Mixed issues of law and fact-Jurisdiction of Court to try suit which involves mixed issue-Held: Where decision of issue of law depends upon decision of fact, it cannot be tried as a preliminary issue. Words and Phrases : `Barred by law’-Occurring in Order 7, Rule 11(d) CPC-Held: Includes barred by limitation. ` `Demurrer’-Meaning of-Discussed. Limitation Act, 1963 : Sections 17(1)(a), (b)-Applicability of-Belated petition for rectification of register of company on the ground that its director committed fraud by purchasing shares in his name out of company’s funds-Held: S.17(1)(a) is applicable and not S.17(1)(b). `V’ was the Managing Director of Sayaji Industries. He had two sons `B’ and `S’. In order to distribute properties between sons, `B’ was entrusted 2 companies, Sayaji Industries and CV Mehta Ltd. In terms of MOU dated 13.11.1982, `B’ was required to pay Rs.20 lacs, pursuant to which control and management of Sayaji Industries were to be transferred to him by making transfer of 13000 shares of Sayaji Industries in his name. As `B’ was not in a position to deposit Rs.20 lacs, a scheme was devised whereunder Sayaji Industries paid Rs.20 lacs by way of advance to Santosh Starch Ltd. The said Santosh Starch Ltd. paid an amount of Rs.20 lacs to `B’. This amount was transferred to CV Mehta Ltd. in order to get the control of Sayaji Industries. On 10.11.1987, petitioners who were shareholders of Sayaji Industries filed Company Petition for rectification of the register as provided under Section 155 of the Companies Act on the ground that `B’ utilized the funds of Sayaji Industries for the purpose of his shares which was in violation of Section 77 of Companies Act and that they could not detect fraud earlier and came to know about the same in May, 87 when a criminal complaint was filed by Union of Sayaji Industries. The respondents filed reply on 22.3.1988, in which they raised a preliminary objection regarding limitation and contended that on the preliminary issue, the main petition should be dismissed in limine. On 23.9.1995 respondents moved Company Application to dismiss the Company Petition without going into merits of petition on the ground that the same is barred by limitation. Company Judge allowed the Application holding that “there is not only no proof of fraud, but even the “averments of fraud” made in the petition do not amount to the averments of fraud in eye of law” within the meaning of Order VI Rule 4 CPC and dismissed the petition as barred by the law of limitation. This order was upheld in appeal by High Court. Hence the present appeal. =Allowing the appeal, the Court HELD: 1.1. A limited company cannot purchase its own shares except by way of reduction of capital with the sanction of the court. [427-h] 1.2. It is well-settled legal principle that any valuable consideration paid out of the company’s assets will make a transaction amounting to a purchase and therefore is invalid. [428-c-d] Trevor v. Whitworth, (1887) 12 AC 409, relied on. British and American Trustee and Finance Corporation v. Couper, 1894 AC 399, referred to. Buckley on the Companies Act – 14th edn., Palmer’s Company Law – 23rd edn.; Guide To The Companies Act by A. Ramaiya 16th Edn., referred to. 2. In view of Rule 6 of the Companies (Court) Rules, the provisions of the Code of Civil Procedure will be applicable in proceedings under the Companies Act. [428-d-e] Sangramsingh P. Gaekwad v. Shantadevi P. Gaekwad, [2005] 11 SCC 314, relied on. Major S.S. Khanna v. Brig. F.J. Dillon, AIR (1964) SC 497, referred to. 3. The Code of Civil Procedure does not confer jurisdiction upon the Court to try a suit on mixed issue of law and fact as a preliminary issue and where the decision on issue of law depends upon decision of fact, it cannot be tried as a preliminary issue. [429-c] 4. The plea raised by the contesting respondents is in fact a plea of demurrer. Demurrer is an act of objecting or taking exception or a protest. It is a pleading by a party to a legal action that assumes the truth of the matter alleged by the opposite party and sets up that it is insufficient in law to sustain his claim or that there is some other defect on the face of the pleadings constituting a legal reason why the opposite party should not be allowed to proceed further. [429-d] O.N. Bhatnagar v. Smt. Rukibai Narsindas and Ors., [1982] 2 SCC 244; Roop Lal Sathi v. Nachhattar Singh Gill, [1982] 3 SCC 487; Abdulla Bin Ali and Ors. v. Galappa and Ors., [1985] 2 SCC 54; Exphar Sa and Anr. v. Eupharma Laboratories Ltd. and Anr., [2004] SCC 688; Indian Mineral & Chemical Co. and Ors. v. Deutsche Bank, [2004] 12 SCC 376 and Popat and Kotecha Property v. State Bank of India Staff Association, [2005] 7 SCC 510, referred to. 5.1. The principle is well settled that in order to examine whether the plaint is barred by any law, as contemplated by sub-rule (d) of Order VII Rule 11 CPC, the averments made in the plaint alone have to be seen and they have to be assumed to be correct. It is not permissible to look into the pleas raised in the written statement or to any piece of evidence. Applying the said principle, the plea raised by the contesting respondents that the Company Petition was barred by limitation has to be examined by looking into the averments made in the Company Petition alone and any affidavit filed in reply to the Company Petition or the contents of the affidavit filed in support of Company Application filed by the respondents seeking dismissal of the Company Petition cannot at all be looked into. [430-f-h] 5.2. A plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be ascertained which is entirely a question of fact. A plea of limitation is a mixed question of law and fact. The question whether the words “barred by law” occurring in Order VII Rule 11(d) CPC would also include the ground that it is barred by law of limitation. This principle would be equally applicable to a Company Petition. Therefore, unless it becomes apparent from the reading of the Company Petition that the same is barred by limitation the petition cannot be rejected under Order VII Rule 11(d) CPC. [431-h; 432-a, d] Balasaria Construction Pvt. Ltd. v. Hanuman Seva Trust and Ors., in CA No. 4539/2003 decided by Supreme Court on 8.11.2005, relied on. 6.1. Undoubtedly, Order VI Rule 4 CPC requires that complete particulars of fraud shall be stated in the pleadings. The particulars of alleged fraud, which are required to be stated in the plaint, will depend upon the facts of each particular case and no abstract principle can be laid down in this regard. In natural course of events it looks quite probable that a third party may not come to know that the Company had advanced money to M/s. Santosh Starch Products on 13.11.1982 and M/s. Santosh Starch Products gave Rs.20 lacs to `B’ and his family members on the same day and the said money was utilized for purchasing the shares. It is noteworthy that M/s. Santosh Starch Products is a supplier of M/s. Sayaji Industries Ltd. and in such circumstances the payment of money by Sayaji Industries Ltd. to M/s. Santosh Starch Products could not have raised any suspicion. At any rate accepting the version given in the Company Petition as correct and without taking into consideration any plea raised in the affidavits filed in reply thereto or any other material or evidence, it is absolutely clear that having regard to the provisions of Section 17(1) of the Limitation Act, the limitation for filing the Company Petition had not begun to run until May, 1987 when the petitioners claim to have got knowledge of the alleged fraud committed by the respondents in utilizing the funds of the Company for purchase of its shares, which is a clear violation of Section 77 of the Companies Act. Thus the Company Petition cannot be thrown out at the preliminary stage as being barred by limitation and the view to the contrary taken by the Company Judge and also by the Division Bench is clearly erroneous in law. [432-e-h; 433-h; 434-a] 6.2. It is important to point out that apart from Ramesh B. Desai there are 8 other shareholders who had filed the Company Petition. There is not even a slightest inkling in the impugned judgments of the High Court that the other 8 petitioners had acquired knowledge of the transaction much earlier. The approach adopted by the High Court is clearly illegal as no finding on the point of knowledge could have been recorded until the parties had been given opportunity to lead evidence and in such circumstances dismissal of the Company Petition at a preliminary stage on the finding that it was barred by limitation is clearly erroneous in law. In the facts and circumstances of the case the plea raised in the Company Petition cannot be held to be wanting in compliance of Order VI Rule 4 CPC. [434-g-h; 435-a] Bishundeo Narain and Anr. v. Seogeni Rai and Ors., AIR (1951) SC 280; Bijendra Nath Srivastava v. Mayank Srivastava and Ors., [1994] 6 SCC 117; Sangramsinh P. Gaekwad and Ors. v. Shantadevi P. Gaekwad and Ors., [2005] 11 SCC 314; Syed Shah Gulam Ghouse Mohiuddin and Ors. v. Syed Shah Ahmad Mohiuddin Kamisul Quadri and Ors., AIR (1971) SC 2184; Kasturi Lakshmibayamma v. Sabnivis Venkoba Rao and Ors., AIR (1970) AP 440 and In Re Marappa Goundar, AIR (1959) Madras 26, held inapplicable. 7. Section 17(1)(b) will apply when the plaintiff or applicant is claiming any kind of right or title to any moveable or immoveable property etc. The petitioners are not claiming any right or title over the shares of the Company, which according to them were purchased out of the funds of the Company hence, the case is covered by Section 17(1)(a) of the Limitation Act and not by Section 17(1)(b). [437-a] Soli J. Sorabjee, Pritesh Kapoor, Hemantika Wahi and S. Sanjanwala for the Appellants. Iqbal Chagla, V.A. Bobde, Sudhir Nanavati, Mihir Joshi, Uday U. Lalit (N.P.), Sunil Gupta, Huzefa Ahmadi, Devang S. Nanavati, Saurin Mehta, Anshuman Mohapatra, Nakul Diwan, Riaz Chagla, V.D. Khanna (for I.M. Nanavati Associates), Rutwik Panda, Jatin Zaveri, Prantap Kalra, Naresh K. Sharma, Bina Gupta, Inklee Barooah, Indrani Mukherjee and Sumita Hazarika for the Respondents.

CASE NO.: Appeal (civil) 4766 of 2001 PETITIONER: Ramesh B. Desai and others RESPONDENT: Bipin Vadilal Mehta and others DATE OF JUDGMENT: 11/07/2006 BENCH: Ashok Bhan & G.P. Mathur JUDGMENT: J U D G M E N T G.P. Mathur, J. This appeal, by special leave, has been preferred against the judgment and order dated … Continue reading

Telecom Regulatory Authority of India Act, 1997; Ss. 14, 16K and 18/Code of Civil Procedure, 1908; s.100, Order VIII Rule 6A/Code of Criminal Procedure, 1973; S.195: Telecom Disputes Settlement & Appellate Tribunal-Contract between Union of India, the Licensor and a service provider, the Licensee-Breach of terms of agreement-Damage-Claim and counter claim-Settlement of-Tribunal upheld the claim of Licensee rejecting the counter claim of licensor holding that it has no jurisdiction to entertain the counter claim-On appeal, Held: In the counter claim by Union of India, even if some vagueness noticed by the Tribunal, it could have directed the party concerned to remove the same in the interests of justice-Normally, a right to make a claim include a right to make a counter claim-There is no reason to whittle down the right so given in terms of s.14(1) of the Act-A dispute arising after the acceptance of a tender, pending issuance of licence even after the expiry of the stipulated time limit, would fall within the provisions of the s.14(a) of the Act-A Specialised Tribunal as TDSAT constituted for the purpose of dealing with specialised matters/disputes arising out of license granted under the Act-Any breach arising after acceptance of the offer of a Tender would normally be termed as disputes liable to be settled by the Specialised Tribunal-In terms of the procedure, as prescribed u/s 16 of the Act, the Tribunal shall not be bound by the procedure as laid down under Civil Procedure Code but shall be governed by the principles of Natural Justice-The dispute in the present case arises out of breach of conditions after accepting the letter of intent by one of the party, therefore, it could be settled by the Tribunal-Under the circumstances, TDSAT erred in dismissing the counter claim of the Licensor as not maintainable-Hence, the claim and the counter claim remanded to the Tribunal for adjudication afresh in accordance with law-Direction issued-Transfer of Property Act-Indian Contract Act, 1872-Administrative Law-Principles of Natural Justice. Jurisdiction of Telecom Disputes Settlement Appellate Tribunal-To entertain counter claim by the Union of India/Licensor-Held: Yes, TDSAT could entertain such a claim in terms of S. 14(1) and 14(A) of the Act. Appellant, Union of India, has invited tender for grant of licence in respect of certain Telecom Service Contract. In response, tender proposal of the respondent was considered by the appellant. The respondent, after having conveyed its acceptance of the Letter of Intent, failed to fulfil the promise made by it. Appellant raised a demand of certain sum as damage in lieu of breach of contract. Aggrieved, the respondent approached the Telecom Disputes Settlement & Appellate Tribunal praying for a declaration that the action of the Union of India in raising a claim and in recovering the amount as per its demand dated 10.8.1999, was bad in law and be set aside; for a declaration that the set off made by invoking condition 19 of the licence was illegal and unauthorised and for setting aside the same and for directing the appellant to refund the amount together with interest from the date of the purported set off of that amount with the amounts due to the respondent till the date of refund and for other consequential and incidental reliefs. Appellant, Union of India, had also filed an appeal counter claiming the same amount. The Tribunal upheld the claim of the respondent, rejecting the counter claim of the appellant-Union of India and also held that it has no jurisdiction to entertain a counter claim at the instance of the appellant. Hence the present appeal. =Allowing the appeal, the Court HELD: 1.1. It may be true that in the prayer portion in the written statement an order or decree in terms of the counter claim had not been sought for by the appellant. But the claim as made in the written statement relates to the claim based on the failure of the respondent, after having conveyed its acceptance of the Letter of Intent to provide service in the Karnataka Telecom Circle and the damages allegedly suffered by the appellant as a consequence and the entitlement of the appellant to reimbursement of the specified sum from the respondent. Even if there is some vagueness in the counter claim, as felt by the Telecom Disputes Settlement Appellate Tribunal, the TDSAT might have directed the appellant to make its counter claim more specific and in a proper manner. After all, a defect of deficiency could be permitted to be cured. Hence, this Court is not impressed by the argument on behalf of the respondent that the counter claim was rather vague and the same was rightly rejected for that reason by the TDSAT. After all, this vagueness can be directed to be removed in the interests of justice, if it were to be held that the counter claim can be maintained by the Union of India. [Para 4] [291-B, C, D] 1.2. Normally, when a specialised tribunal is constituted for dealing with disputes coming under it of a particular nature taking in serious technical aspects, the attempt must be to construe the jurisdiction conferred on it in a manner as not to frustrate the object sought to be achieved by the Act. In this context, the ousting of the jurisdiction of the Civil Court contained in Section 15 and Section 27 of the Telecom Regulatory Authority of India Act has also to be kept in mind. The subject to be dealt with under the Act, has considerable technical overtones which normally a civil court, at least as of now, is ill-equipped to handle and this aspect cannot be ignored while defining the jurisdiction of the TDSAT. [Para 11] [295-C, D] 1.3. A specialised tribunal, TDSAT, has been constituted for the purpose of dealing with specialised matters and disputes arising out of licenses granted under the Act. Thus there exists, no reason to restrict the jurisdiction of the tribunal so constituted by keeping out of its purview a person whose offer has been accepted and to whom a letter of intent is issued by the Government and who had even accepted that letter of intent. Any breach or alleged breach of obligation arising after acceptance of the offer made in response to a Notice Inviting Tender, would also normally come within the purview of a dispute that is liable to settled by the specialised tribunal. Hence, no reason is found to restrict the expressions “licensor” or “licensee” occurring in Section 14(a)(i) of the Act and to exclude a person like the respondent who had been given a Letter of Intent regarding the Karnataka Circle, who had accepted the Letter of Intent but was trying to negotiate some further terms of common interest before a formal contract was entered into and the work was to be started. To exclude disputes arising between the parties thereafter on the failure of the contract to go through, does not appear to be warranted or justified considering the purpose for which the TDSAT has been established and the object sought to be achieved by the creation of a specialised tribunal. [Para 15] [297-D, E, F] Cellular Operators Association of India and Ors. v. Union of India and Ors., [2003] 3 SCC 186, relied on. 1.4. There is no reason to whittle down the right given to the Central Government to approach the TDSAT for adjudication of its claim which comes under Section 14(1) of the Act. Normally, a right to make a claim would also include a right to make a cross-claim or counter claim in the sense that the Central Government could always make an independent claim on matters covered under the Act and such a claim will have to be entertained by the TDSAT. This the Central Government could do even while it is defending a claim made against it in TDSAT, by way of a separate application. If a subject matter is capable of being raised before the TDSAT by the Central Government or the State Government by way of a claim by making an application under Section 14 of the Act, it would not be logical to hold that the same claim could not be made by way of a counter claim when the other side, namely, the licensee or consumers, had already approached the TDSAT with a claim of their own and the Central Government is called upon to defend it. It is, therefore, not possible to accept an argument that a counter claim by the Central Government or State Government cannot be entertained by the TDSAT. Hence, the TDSAT has jurisdiction to entertain a counter claim in the light of Section 14(1) and 14A of the Act. [Para 12] [295-F, G, H; 296-A, B] 1.5. A dispute commencing with the acceptance of a tender leading to the possible issue of a licence and disputes arising out of the grant of licence even after the period has expired would all come within the purview of Section 14(a) of the Act. To put it differently, Section 14 takes within its sweep disputes following the issue of a Letter of Intent pre grant of actual licence as also disputes arising out of a licence granted between a quondam licensee and the licensor. [Para 13] [296-E, F] 2. While prescribing the procedure under Section 16 of the Act, what is said is that the TDSAT shall not be bound by the procedure laid down by the Code of Civil Procedure but it shall be guided by the principles of natural justice. It is significant to note that it is not a case of exclusion of the powers under the Code of Civil Procedure and conferment of specific powers in terms of sub-section (2) of that Section. It is really a right given to the TDSAT even to go outside the procedural shackles imposed by the Code of Civil Procedure while dealing with a dispute before it. Therefore, it will be difficult to keep out the provisions for the filing of a counter claim enshrined in Order VIII Rule 6A of the Code of Civil Procedure which could be applied by the TDSAT. The sweep of Order VIII Rule 6A of the Code now takes in even claims independent of the one put forward in the application if it is one the respondent therein has against the applicant. On the whole, the TDSAT was in error in dismissing the counter claim as not maintainable. [Para 16] [298-C, D, E] 3. In the light of the finding that the counter claim is maintainable and it requires to be investigated, the proper course is to set aside the finding rendered by the TDSAT on the plea of set off raised by the appellant. This is in view of the fact that acceptance of the counter claim or even a part thereof might throw open the question of legal or equitable set-off, to be considered in the light of the finding on the counter claim. Therefore, this is an appropriate case where the whole matter should be reopened without going into the merits of the contentions of parties on the plea of set off raised by the appellant and leave the question to be decided by the TDSAT along with the counter claim that has been made by the appellant. On taking note of the objection that the counter claim has not been made specific and has not been put forward in a proper manner, that it would be appropriate to direct the appellant to make a proper counter claim before the TDSAT. The TDSAT thereafter will give the respondent an opportunity to file its written statement to the counter claim and then decide the claim made by the respondent and the counter claim afresh in accordance with law. [Para 17] [298-E, H; 299-A] Mohan Prasaran, ASG, Mohit Choudhary, Manish Jain, Pooja Sharma, V.K. Verma and Shreekant N. Terdal for the Appellant. Dr. A.M. Singhvi, Ramji Srinivasan, Ruby Singh Ahuja, Prashant Kumar Mishra, Simran Brar, Amit Bhandari, Jainul Abdin, Mandakini Singh, Rhythm Anand Bhardwaj and Manik Karanjawala for the Respondent.

CASE NO.: Appeal (civil) 1033 of 2004 PETITIONER: UNION OF INDIA RESPONDENT: TATA TELESERVICES (MAHARASHTRA) LTD DATE OF JUDGMENT: 23/08/2007 BENCH: H.K. SEMA & P.K. BALASUBRAMANYAN JUDGMENT: J U D G M E N T P.K. BALASUBRAMANYAN, J. 1. This appeal by the Union of India, the respondent in a proceeding before the Telecom Disputes … Continue reading

Land Acquisition Act, 1894; Ss. 3(a) and (b), 11 and 16: Acquisition of land by State Government-Easementary right on the ground of necessity-Availability of-High Court rightly drew a distinction between an easement of an ordinary nature for which compensation could be claimed and an easement of necessity in respect of which right of passage could not be extinguished by reason of acquisition, hence justified in granting right of passage to the claimant both on principle and precedent-Civil Procedure Code, 1908-Section 100-Constitution of India, 1950-Article 136. espondent Nos. 1 to 3 had purchased certain portion of land belonging to `R’. The sale deed specifically mentioned that respondent-vendees would have access to their land through a passage from the remaining part of the land of the vendor, which was later acquired by the Government of Himachal Pradesh. The State Government blocked off the passage by a barbed wire fencing, thereby preventing respondents’ access to their land. Aggrieved, respondents filed a suit for issuing injunction against the appellants. Suit was dismissed by the Trial Court. Appellate Court decreed the suit holding that there existed a passage from the land acquired by the State Government to the land of the respondents and they had no other passage to their land. Appeal against this order was dismissed by the High Court. Hence the present appeal. It was contended by the appellants that once an award has been made under Section 11 of the Land Acquisition Act and possession of the acquired land was taken, the land would vest absolutely in the Government free from all encumbrances. =Dismissing the appeal, the Court HELD: 1.1. Both the Additional District Judge and the High Court have concurrently held that the only approach available to respondent Nos. 1 to 3, is through the land of the appellant and as such they had a right to approach their land as claimed by them and the appellant had no right to obstruct the approach by putting up a barbed wire fencing. [212-E] 1.2. The High Court drew a distinction between an easement of an ordinary nature in respect of which compensation could have been claimed in the land acquisition proceedings and an easement of necessity, a right of passage, and held that right of passage by way of necessity, as enjoyed by the respondents over the land of original landlord and presently acquired by the appellant, was not extinguished by reason of acquisition. In the peculiar facts and circumstances of the case, the distinction drawn by the High Court about non-extinguishment of the right of easement arising out of necessity appears to be justified both on principle and precedent. The present case is not a fit case to be interfered with in exercise of the jurisdiction under Article 136 of the Constitution. Hence, the appeal is dismissed. [213-B; 214-A-B-C] Collector of Bombay v. Nusserwanji Rattanji Mistri and Ors., AIR (1955) SC 298, relied on. State of Himachal Pradesh v. Tarsem Singh and Ors., [2001] 8 SCC 104, distinguished. Rakesh Dwivedi and Naresh K. Sharma for the Appellants. A.V. Palli and Mrs. Rekha Palli for the Respondent Nos. 1-3. J.S. Attri for the Respondent No. 4.

CASE NO.: Appeal (civil) 1022 of 2000 PETITIONER: H.P. State Electricity Board & Ors. RESPONDENT: Shiv K. Sharma & Ors. DATE OF JUDGMENT: 10/01/2005 BENCH: Shivaraj V. Patil & B.N. Srikrishna JUDGMENT: J U D G M E N T Srikrishna, J. The Himachal Prades State Electricity Board, Shimla, challenges by this appeal the judgment … Continue reading

inter state water disputes ?- The State of Punjab has filed Suit No. 1 of 2007 on July 11, 2007 in this Court under Article 131 of the Constitution read with Order XLVII of the Supreme Court Rules, 1966 and claimed a decree of perpetual injunction restraining the State of Haryana from

Non-Reportable IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION INTERLOCUTORY APPLICATION NO. 7 OF 2011 IN ORIGINAL SUIT NO. 1 OF 2007 State of Punjab … Plaintiff Versus State of Haryana and others … Defendants O R D E R J.M. Panchal, J. The State of Punjab has filed Suit No. 1 of 2007 … Continue reading

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