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Thursday, March 27, 2014

Section 7 of the Punjab Agricultural Produce Markets Act, 1961- Consumer Disputes - Agricultural Market yards - allotment of site on price - letters issued for non-payment of 75% amount and interest and penal interest - Challenged in District forum due to deficiency of amenities not able to do agriculture business in the allotted sites - Advocate commissioner appointed reports comes infavour of complainant- forum directed to pay the balance amount and direct the board not levy charge penalty or interest on the same. and directed to develop the area with in two months - State and National consumer forum upheld the same and Apex court too confirm the same = Haryana State Agricultural Marketing Board … Appellant vs. Bishamber Dayal Goyal and Ors. … Respondents = 2014 (March. Part ) judis.nic.in/supremecourt/filename=41340

   Section 7 of the Punjab Agricultural  Produce   Markets  Act,  1961- Consumer Disputes - Agricultural Market yards - allotment of site on price - letters issued for non-payment of 75% amount and interest and penal interest - Challenged in District forum due to deficiency of amenities not able to do agriculture business in the allotted sites - Advocate commissioner appointed reports comes infavour of complainant- forum directed to pay the balance amount and direct the board not levy charge penalty or  interest  on  the  same. and directed to develop the area with in two months - State and National consumer forum upheld the same and Apex court too confirm the same =
On  non-payment  of  the  installments,  the  appellant  called  upon  the
   respondents to make the balance payments, being  75%  of  the  cost  with
   interest and penalty charges as prescribed in the said allotment  letter.
   The respondents did not pay the same and filed  a  complaint  before  the
   District Forum alleging deficiency of services,  failure  to  notify  the
   Adampur Mandi as Market Area and failure to  develop  and  provide  basic
   amenities in the said locality.  The appellant opposed the  complaint  on
   the ground that the respondents failed  to  make  the  payments  of   the
   instalments  and further that one of the  complainants  was  not  dealing
   with the sale and purchase of agricultural produce by himself and instead
   had sublet the shop to someone else.=    
 The
   District Forum after perusing the report dated April 25,  2000  filed  by
   the Local Commissioner – Mr.   Balhara,  Advocate  --  held  that  it  is
   admitted by both the parties that the Additional Mandi  has  no  boundary
   walls and gates and that there has been no notification by the appellant-
   Board,  further no auction has been made  by  the  respondents  and   the
   debris are lying around the shops. In these circumstances,  the  District
   Forum by order dated September 20, 2001 held that it is admitted that due
   to the omission of the appellant, no business could be done in the  Mandi
   and the boundary walls which are essential for  the  business,  were  not
   provided. It is further held that the notification dated October 31, 1980
   has no manner of application  since  the  land  was  transferred  to  the
   appellant in 1986 and the shops were auctioned  in  1981.   The  District
   Forum further held that  due  to  the  omission  of  the  appellant,  the
   complainants/respondents herein were deprived of doing the grain business
   for which the plots were purchased and in the absence of the notification
   of the area as a sub-yard, the District Forum held that there was a grave
   deficiency of service. The Forum awarded the respondents interest at  12%
   per annum on the entire deposited amount after two years from the date of
   issuance of allotment letters to the respondents till the development and
   notification of the area in question is not done.  The  respondents  were
   directed to deposit the remaining balance amount and the  appellant-Board
   was directed not to levy any charge, penalty or  interest  on  the  same.
   However, the Forum refused to allow the compensation  as  prayed  by  the
   respondents and directed the appellants to  develop  the  area  within  a
   month. =

  In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the  Court
upheld the principles as laid down in Shantikunj Case (supra)  and  Amarjeet
Singh Case (supra) and held that allottees cannot postpone  the  payment  of
instalments on the grounds that some of the amenities were not provided  and
the Court setting aside the penal and compound interest levied by the  Board
and in consonance with the Allotment  Rules  of  1997,  levied  only  simple
interest.

8.  In the present case, the inaction  on  the  part  of  the  appellant  in
   providing the  requisite  facilities  for  more  than  a  decade  clearly
   establishes deficiency of services as the respondents were prevented from
   carrying out the grain  business
 However,  the  respondents  were  also
   incorrect in refusing to pay the instalments and violating the  terms  of
   the instalment letter
Thus, considering  the  surrounding  circumstances
   wherein the appellant has been unable to develop the area for  more  than
   two decades and the resultant loss suffered by the respondents, we are of
   the  opinion  that  in  the  present  situation,  there  is  a  need  for
   proportionate relief as the levy of penal interest and other  charges  on
   the respondents will be grossly unfair.

9. In these circumstances, we do not find that any grounds  have  been  made
   out by the appellant to interfere with the order passed by  the  National
   Commission. We have minutely examined the order passed  by  the  District
   Forum as well as the State Commission, and we have noticed that  adequate
   relief has been granted even to the respondents/complainants by  awarding
   interest @ 12 per cent per annum on the entire deposited amounts.  Hence,
   we do not find any merit in  the  appeal  and  the  same  is  accordingly
   dismissed.
2014 (March. Part ) judis.nic.in/supremecourt/filename=41340
GYAN SUDHA MISRA, PINAKI CHANDRA GHOSE
                                                           Reportable


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 3122 OF 2006



Haryana State Agricultural Marketing Board         … Appellant

                                     vs.

Bishamber Dayal Goyal and Ors.                              … Respondents





                               J U D G M E N T





Pinaki Chandra Ghose, J.


1. The present appeal has been filed assailing the  order  dated  April  13,
   2005 passed  by  the  National  Consumer  Disputes  Redressal  Commission
   (hereinafter referred  to  as  “the  National  Commission”)  in  Revision
   Petition Nos. 534-537 of 2005, affirming the  order  dated  November  10,
   2004  passed  by  the  State  Consumer  Disputes  Redressal   Commission,
   Chandigarh (hereinafter referred to as  “the  State  Commission”),  which
   further confirmed the order  dated  September  20,  2001  passed  by  the
   District Forum.


2. The facts of the case briefly are as follows :


a) By a notification dated November 16, 1971, the Haryana  State  Government
   under Section 7 of the Punjab Agricultural  Produce   Markets  Act,  1961
   (hereinafter referred to as ‘the said Act’), notified  the  area  of  New
   Grain Mandi, Adampur as Market Area. Subsequently, in the year 1974,  the
   areas/limits were further extended by five kilometers. In 1980, the State
   Government notified a sub-market yard of  New Grain Mandi,  Adampur.  The
   Colonization Department of the State by a letter dated January 24,  1986,
   transferred the said area to the  Haryana  State  Agricultural  Marketing
   Board, the appellant herein.


b) The respondents herein were allotted plots by the appellant,  being  plot
   Nos. 17, 7, 16 and 14 upon depositing the 25% of the price  of  the  said
   plots. The method of payment and the consequences for non-payment of  any
   instalment would appear from the allotment letter dated  July  25,  1991.
   Admittedly, the respondents did not pay the instalments in terms  of  the
   allotment letters. The grounds mentioned  by  the  respondents  for  non-
   payment of such instalments were the failure on the part of the appellant
   to provide basic amenities such as sewerage, electricity, roads  etc.  at
   the said Adampur Mandi Area.


c) On  non-payment  of  the  instalments,  the  appellant  called  upon  the
   respondents to make the balance payments, being  75%  of  the  cost  with
   interest and penalty charges as prescribed in the said allotment  letter.
   The respondents did not pay the same and filed  a  complaint  before  the
   District Forum alleging deficiency of services,  failure  to  notify  the
   Adampur Mandi as Market Area and failure to  develop  and  provide  basic
   amenities in the said locality.  The appellant opposed the  complaint  on
   the ground that the respondents failed  to  make  the  payments  of   the
   instalments  and further that one of the  complainants  was  not  dealing
   with the sale and purchase of agricultural produce by himself and instead
   had sublet the shop to someone else.


d) The District Forum appointed a Senior Member of the Forum  as  the  Local
   Commissioner to inspect the said area and to file  a  report.  The  Local
   Commissioner filed a report stating that  the  area  was  developed  with
   civic amenities and platforms were constructed in  front  of  the  shops.
   However, it is admitted that the complainant is not in a position to  run
   the business in the market area as the same has not been  notified  by  a
   notification and/or order declaring it as a sub-yard for the  purpose  of
   running the business. The District Forum held by  order  dated  March  4,
   1998 that the notification dated October 31, 1980 is not applicable since
   the land  was auctioned in 1991 and further, the  same  was  not  in  the
   ownership of  the  appellant  and  no  business  was  transacted  by  the
   complainant at the Adampur Mandi. The District Forum held that  since  no
   notification was issued declaring the said area as sub-yard,  it  amounts
   to deficiency of service and the appellant was directed to  withdraw  the
   demand notice and further directed not to  charge  any  interest  on  the
   instalments.  The  appellant  filed  first  appeal   before   the   State
   Commission, being First Appeal No.362 of 1998. The State Commissioner  by
   order dated March 3, 1998 remanded  the  matter  to  the  District  Forum
   holding that the appointment of Local Commissioner, Shri  Arya,  being  a
   member of the District Forum vitiated the proceedings.


e) Thereafter, the District Forum  took  up  the  matter  and  appointed  an
   Advocate - Mr. G.L. Balhara - as  the  Local  Commissioner,  to  make  an
   inspection and to file a report. The appellant herein on April 20,  2000,
   once again  issued  demand  notices  to  the  respondents  demanding  the
   payments. The main contention of the respondents being  the  complainants
   was that although the area was not notified by the appellant-Board  as  a
   market area, they were unable to conduct any grain business in the  shops
   for which they had purchased the said plots; and further alleged that  no
   basic amenities, i.e., sewerage, roads, parao, electricity etc. had  been
   provided by the Board, and that there were no boundary walls and gates of
   the market area which were a necessity in such Mandi;  furthermore, there
   were heaps of debris lying around the shops. In these circumstances,  the
   plots allotted were redundant.


f) The appellants contended that the  complainants  are  not  consumers  and
   there is no deficiency of service. The respondents  failed  to  construct
   the  booths  in  two  years’  time  even  after  getting  the   licences.
   Furthermore, the  respondents  are  not  dealing  with  the  agricultural
   produce instead they have sublet the plots in question to other  persons.
   According to the appellants, the amenities of sewerage, water supply  and
   electricity were provided and construction of a platform was also done by
   them. An Additional Mandi was established, according to the appellant, by
   the Colonization Department and subsequently transferred to them in 1986.
   The Colonization  Department,  in  1980,  duly  notified  the  same.  The
   District Forum after perusing the report dated April 25,  2000  filed  by
   the Local Commissioner – Mr.   Balhara,  Advocate  --  held  that  it  is
   admitted by both the parties that the Additional Mandi  has  no  boundary
   walls and gates and that there has been no notification by the appellant-
   Board,  further no auction has been made  by  the  respondents  and   the
   debris are lying around the shops. In these circumstances,  the  District
   Forum by order dated September 20, 2001 held that it is admitted that due
   to the omission of the appellant, no business could be done in the  Mandi
   and the boundary walls which are essential for  the  business,  were  not
   provided. It is further held that the notification dated October 31, 1980
   has no manner of application  since  the  land  was  transferred  to  the
   appellant in 1986 and the shops were auctioned  in  1981.   The  District
   Forum further held that  due  to  the  omission  of  the  appellant,  the
   complainants/respondents herein were deprived of doing the grain business
   for which the plots were purchased and in the absence of the notification
   of the area as a sub-yard, the District Forum held that there was a grave
   deficiency of service. The Forum awarded the respondents interest at  12%
   per annum on the entire deposited amount after two years from the date of
   issuance of allotment letters to the respondents till the development and
   notification of the area in question is not done.  The  respondents  were
   directed to deposit the remaining balance amount and the  appellant-Board
   was directed not to levy any charge, penalty or  interest  on  the  same.
   However, the Forum refused to allow the compensation  as  prayed  by  the
   respondents and directed the appellants to  develop  the  area  within  a
   month.


g)  Being  aggrieved,  the  appellant  went  in  appeal  before  the   State
   Commission. Cross-appeals were also filed by the respondents  before  the
   State Commission, seeking enhancement of the rate of interest from 12% to
   18% per annum and further sought compensation. On November 10, 2004, both
   the appeals were dismissed. The State Commission upheld the order of  the
   District Forum holding that the report of the Local Commissioner did  not
   raise any objection with  regard  thereto  nor  placed  any  notification
   before the District Forum. In these circumstances, the  appellant  herein
   filed a revision petition before the  National  Commission  resulting  in
   dismissal, hence, the matter has come up in appeal before us.


3. It is the case of the appellant that all the three fora below have  erred
   in fact and in law by omitting to take into consideration the  fact  that
   the payment of instalments  towards  the  cost  by  the  respondents  was
   unconditional. It was further  contended  that  it  was  not  subject  to
   fulfilment of any condition on the  part  of  the  appellant  as  a  pre-
   requisite. Moreover, all the three fora lost sight of the fact that under
   Section 8 of the Act, after creation of a sub-market yard by notification
   under Section 7(2) of the said Act, no person could be allowed  to  trade
   in agricultural produce without licence and they had  to  apply  for  the
   same under Section 9 of the said Act, and further  to  obtain  a  licence
   under Section 10 of the said Act.


4. It is not in dispute that the respondents duly applied for licence  under
   Section 9 and which was granted under Section 10 permitting them to trade
   in agricultural produce in the sub-market yard from their allotted  shops
   under Section 8, which was possible only when there  was  a  notification
   under Section 7(2) to invoke notifying the sub-market yard, according  to
   the appellant, the same was notified by a Notification dated October  31,
   1980 passed by the predecessor-in-interest of the appellant and the  same
   is still subsisting and remained in force after the transfer of the  area
   to the appellant in 1986. Therefore, according  to  the  learned  counsel
   appearing in support of this appeal, all the fora failed to take any note
   thereof. It was further pointed out that there was  no  question  of  any
   deficiency in service. According to the  learned  counsel,  the  area  of
   Adampur Mandi was developed in the year 1992 by the Haryana Public Health
   Department by providing all  basic  amenities  like  sewerage,  drainage,
   electricity, roads etc. in the said area. It was further pointed out that
   the  report  of  the  Local  Commissioner  would  show   that   all   the
   developmental works except construction of the boundary walls  have  been
   carried out by the appellant-Board. It was  further  submitted  that  the
   sanctioning of the business licence under Section 10 of the said Act pre-
   supposes that the State Government notified the said  area  as  a  market
   area. It is further contended that the respondents are  using  the  plots
   allotted to them without paying the instalments as  ought  to  have  been
   done by them.


5. Per contra, it is submitted by Mr. N.S. Dalal, learned  counsel  for  the
   respondents, that no developed infrastructure has been  provided  by  the
   appellant and the first two courts below have come to the  conclusion  on
   the basis of the facts placed before them. Since there  is  a  concurrent
   finding on such facts,  it  is  submitted  that  this  appeal  should  be
   dismissed. Learned counsel further submitted that the Local  Commissioner
   – Mr. Balhara – in the presence of both the parties carried out the local
   inspection and the report of the said Commissioner would  show  that  the
   facts mentioned therein have been approved by both the  parties.  It  was
   pointed  out  that  the  Local  Commissioner  had   mentioned   that   no
   infrastructure has been provided, there is no platform, no boundary walls
   and heaps of debris are lying there,  meaning  thereby  the  purpose  for
   which the Mandi was created could not be carried  out  or  used  or  even
   started or accomplished. In  the  absence  of  basic  infrastructure  and
   amenities to run a grain market the purpose  for  which  the  shops  were
   allotted, is totally frustrated. The report of the Local Commissioner was
   not challenged by the appellant at any point  of  time.  It  was  further
   pointed out that the appellant never  relied  on  the  said  notification
   before the District Forum or before the State Commission nor even  before
   the National Commission. Therefore, the grounds tried to be raised by the
   learned counsel for the appellant cannot have any bearing on the  matter.
   It is further contended that the District Forum  as  well  as  the  State
   Commission have recorded how there could have been  notification  by  the
   appellant when the land itself came to the appellant in  the  year  1986.
   Therefore, there cannot be any reason to believe  that  the  notification
   was issued earlier under the ownership of the appellant.  It  is  further
   stated that no explanation has been given  by  the  appellant  about  the
   conduct of non-developing the area in question by them. On the  contrary,
   the respondents relied on the doctrine of legitimate expectations to have
   a proper area to continue with their business.


6. The appellant-Board has contended before us that the respondents are  not
   consumers but we must keep it on record that the Board  never  challenged
   the jurisdiction of the consumer  forum.  We  would  reiterate  that  the
   statutory Boards and Development Authorities which  are  allotting  sites
   with the promise of development, are  amenable  to  the  jurisdiction  of
   consumer forum in case of deficiency of  services  as  has  already  been
   decided in U.T. Chandigarh Administration &  Anr.  v.  Amarjeet  Singh  &
   Ors.[1]; Karnataka Industrial Areas and Development Board v.  Nandi  Cold
   Storage Pvt. Ltd.[2]. This Court in Narne Construction (P) Ltd. v.  Union
   of India [3]  referred to its earlier  decision  in  Lucknow  Development
   Authority v. M.K. Gupta [4]  and duly discussed the wide  connotation  of
   the terms “consumer” and “service” under the consumer protection laws and
   reiterated the observation of this Court in Lucknow Development Authority
   v. M.K. Gupta (supra) which is provided  hereunder :

      “5.   In  the  context  of  the  housing  construction  and   building
      activities carried on by a private or statutory body and whether  such
      activity tantamounts to service within the meaning of  clause  (o)  of
      Section 2(1) of the Act, the Court observed: (LDA case, SCC  pp.  256-
      57, para 6):

          “…when a statutory authority develops land or  allots  a  site  or
          constructs a house for the benefit of common man  it  is  as  much
          service as by a builder or  contractor.  The  one  is  contractual
          service and  the  other  statutory  service.  If  the  service  is
          defective or it is not what  was  represented  then  it  would  be
          unfair trade practice as defined in the Act….”





7. Though in the present case providing of  amenities  is  not  a  condition
   precedent as per  the  terms  of  the  allotment  letters.  However,  the
   allotments were made when the plots were in the development stage on  the
   condition that they be used only  for  auction  and  trading  of  grains,
   therefore, the present auction is different from a free public auction or
   an auction on “as is where is basis”. In such a  scenario  the  appellant
   board as service provider is obligated to facilitate the utilization  and
   enjoyment of the plots as intended by the allottees and set  out  in  the
   allotment  letter.  In  Municipal  Corporation,  Chandigarh  &  Ors.   v.
   Shantikunj Investment (P) Ltd.& Ors.[5], wherein the allottees refused to
   pay instalments towards the cost of the allotted plots, this Court  while
   deciding the same held (at para 38) as under:





      “We make it clear that though it was not  a  condition  precedent  but
      there is a obligation on the part of  the  Administration  to  provide
      necessary facilities for full enjoyment of the same by allottees”








In the aforementioned case, the Court remitted many of  the  cases  back  to
the High Court for limited adjudication of  facts  to  determine  where  the
basic facilities have not been provided and held that though  the  allottees
were incorrect unilateral action of not paying  the  instalments  yet  penal
interest and penalty will be levied as per the facts  of  each  case.  Thus,
the allottees were entitled  to  proportionate  relief.   In  Haryana  State
Agricultural Marketing Board v. Raj  Pal  [6],  wherein  the  appellant  was
involved and the certain allottees refused to pay  instalments  towards  the
allotted plots in the new grain market at Karnal-Pehowa Road  at  Nighdu  in
the Karnal District, citing lack of amenities provided  by  the  Board,  the
Court while dismissing the case of  the  Board  referred  to  the  following
decisions  in  Municipal  Corporation,  Chandigarh  &  Ors.  v.   Shantikunj
Investment (P) Ltd. and Ors. (supra)  and  UT  Chandigarh  Administration  &
Anr. v. Amarjeet Singh &  Ors. (supra) as under :






      “13. In Municipal Corpn.,  Chandigarh  v.  Shantikunj  Investment  (P)
      Ltd., this Court held: (SCC p. 128, para 38)

          “38. … We make it  clear  that  though  it  was  not  a  condition
          precedent  but  there  is  obligation   on   the   part   of   the
          Administration to provide necessary facilities for full  enjoyment
          of the same by the allottees. We therefore, remit  the  matter  to
          the High Court for a very limited purpose to  see  that  in  cases
          where facilities  like  kutcha  road,  drainage,  drinking  water,
          sewerage, street lighting have not been  provided,  then  in  that
          case, the High Court may grant the  allottees  some  proportionate
          relief. Therefore, we direct that all these cases be  remitted  to
          the High Court and the High Court may consider that in case  where
          kutcha road, drainage, sewerage, drinking  water  facilities  have
          been provided, no relief shall be granted but in case any  of  the
          facilities had not been provided, then the High Court may  examine
          the same and consider grant of proportionate relief in the  matter
          of payment of penalty under Rule 12(3) and interest for  delay  in
          payment of equated installment or  ground  rent  or  part  thereof
          under Rule 12(3-A) only. We repeat again that in  case  the  above
          facilities had not been granted then in that case  consider  grant
          of proportionate relief and if the facilities have  been  provided
          then it will not be open on the part  of  the  allottees  to  deny
          payment of interest and penalty. So far as payment of  installment
          is concerned, this is a part of the contract  and  therefore,  the
          allottees are under obligation to pay the same. However, so far as
          the  question  of  payment  of  penalty  and  penal  interest   in
          concerned, that shall depend on the  facts  of  each  case  to  be
          examined by the High Court. The  High  Court  shall  examine  each
          individual case and consider grant of proportionate relief.”


      14. Referring to the said decision, this Court in UT Chandigarh  Admn.
      v. Amarjeet Singh observed as follows: (SCC pp. 682-83, para 46)


          “46. As noticed above, in Shantikunj, the auction was of the  year
          1989. The lessee  had  approached  the  High  Court  in  its  writ
          jurisdiction in the year 1999 seeking amenities. Even in 2006 when
          this Court heard the matter, it was alleged that the amenities had
          not been provided. It is in those peculiar facts that  this  Court
          obviously thought it fit to give some reliefs  with  reference  to
          penal interest wherever amenities had not  been  provided  at  all
          even after 17 years. In fact,  this  Court  made  it  clear  while
          remanding to the High Court that wherever facilities/amenities had
          been provided before the date of  the  judgment  (28-2-2006),  the
          lessees will  not  be  entitled  to  any  reliefs  and  where  the
          facilities/amenities had not been granted even in 2006,  the  High
          Court may consider giving some relief by  proportionate  reduction
          in [the] penal interest. This  direction  was  apparently  on  the
          assumption that in case of penalty, the court can grant relief  in
          writ jurisdictions.”




In Haryana State Agricultural Marketing Board v. Raj Pal (supra), the  Court
upheld the principles as laid down in Shantikunj Case (supra)  and  Amarjeet
Singh Case (supra) and held that allottees cannot postpone  the  payment  of
instalments on the grounds that some of the amenities were not provided  and
the Court setting aside the penal and compound interest levied by the  Board
and in consonance with the Allotment  Rules  of  1997,  levied  only  simple
interest.

8.  In the present case, the inaction  on  the  part  of  the  appellant  in
   providing the  requisite  facilities  for  more  than  a  decade  clearly
   establishes deficiency of services as the respondents were prevented from
   carrying out the grain  business.  However,  the  respondents  were  also
   incorrect in refusing to pay the instalments and violating the  terms  of
   the instalment letter. Thus, considering  the  surrounding  circumstances
   wherein the appellant has been unable to develop the area for  more  than
   two decades and the resultant loss suffered by the respondents, we are of
   the  opinion  that  in  the  present  situation,  there  is  a  need  for
   proportionate relief as the levy of penal interest and other  charges  on
   the respondents will be grossly unfair.

9. In these circumstances, we do not find that any grounds  have  been  made
   out by the appellant to interfere with the order passed by  the  National
   Commission. We have minutely examined the order passed  by  the  District
   Forum as well as the State Commission, and we have noticed that  adequate
   relief has been granted even to the respondents/complainants by  awarding
   interest @ 12 per cent per annum on the entire deposited amounts.  Hence,
   we do not find any merit in  the  appeal  and  the  same  is  accordingly
   dismissed. There shall, however, be no order as to costs.


                                             …....……………………..J.
                                             (Gyan Sudha Misra)



New Delhi;
.........…………………….J.
March   26,    2014.                                                 (Pinaki
Chandra  Ghose)
-----------------------
[1]    (2009) 4 SCC 460
[2]    (2007) 10 SCC 481
[3]    (2012) 5 SCC 359
[4]    (1994) 1 SCC 243
[5]    (2006) 4 SCC 109
[6]    (2011) 13 SCC 504

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