Orissa Estate Abolition Act, 1951 - ss. 8, 2(h), 2(n) and 3 - Claim for protection as `raiyat' - Property classified as uncultivable, vested in State by virtue of notification issued under the Act - Claim of Respondent that ex-intermediaries in respect of the property had leased the same to her predecessor-in-interest, who, immediately before vesting of the same in the State Government, was thus in possession of the property as a tenant under an intermediary i.e. was a `raiyat' under the Act, and from date of the vesting, was a deemed tenant under the State Government and consequently Respondent too was a deemed tenant under the State Government and entitled to protection of his possession - Writ petition filed by respondent allowed by High Court - Order challenged - Plea raised that High Court lost sight of the relevant provisions of the Act and did not consider the effect of alleged gross acts of fraud committed by the respondent - Held: On facts, matter needs to be re-considered by the High Court. Words and Phrases - Fraud - Meaning and effect of - Discussed - Indian Contract Act, 1872 - s.17. By virtue of a Notification issued in 1954 under Section 3 of the Orissa Estate Abolition Act, 1951, the disputed property vested in the State. Respondent claimed that in 1933, the ex-intermediaries in respect of the said property had leased the same to her predecessor-in-interest , who, immediately before vesting of the same in the State Government, was thus in possession of the property as a tenant under an intermediary i.e. was a `raiyat' under the Act, and from date of the vesting, was a deemed tenant under the State Government and consequently Respondent (who bought the disputed property from her predecessor-in-interest) too was a deemed tenant under the State Government and thus entitled to protection of his possession. In regard to the said claim, Respondent filed writ petition seeking direction to the State to accept rent from her in respect of the disputed property, for a declaration of tenancy in her favour and for an injunction against the State restraining them from interfering with her possession. The High Court allowed the writ petition. In appeals to this Court, the judgment of the High Court was inter alia challenged on grounds that the High Court lost sight of the relevant provisions of the Act and did not consider the effect of the alleged gross acts of fraud committed by the respondent .

Allowing the appeals, the Court HELD: 1.1. A `lease' and `lessee' on the one hand are defined separately from the `Raiyat' under the Orissa Estate Abolition Act, 1951 Act. Thus, the mere execution of a lease by the intermediary in favour of a person would not confer the status of a `raiyat' on the lessee nor would protect the possession of such lessee under Section 8 of the Act. In fact, a `lease' would amount to a transfer of an interest of the intermediary in the land to the lessee. In such a situation, far from being a tenant protected under Section 8, the lessee would in fact step into the shoes of the intermediary with his interest being liable for confiscation and his entitlement limited to compensation from the State. On the other hand, for protection under Section 8, one has to be a Raiyat cultivating the land directly and having the rights of occupancy under the tenancy laws of the State. Thus, a `lessee' who is not actually cultivating the land i.e. who is not a `raiyat', would not be within the protection of Section 8 of the Act. Section 2(h) of the Act in its residuary part states that `intermediary' would cover all owners or holders of interest in land between the raiyat and the State. [Para 21] [48-H; 49-A-D] 1.2. On the facts of the present case, it is clear that the land was not under cultivation by the predecessor-in-interest of the respondent. As per the record of rights published in 1930-31, the disputed land is classified as Anabadi Land i.e. uncultivable. The land is further described in the records as Jhudi jungle, i.e. bush forest. In addition, the OEA Collector had found that the lands were lying fallow and were not in physical possession of any person. The land thus not being cultivated, predecessor- in-interest of the respondent cannot prima facie be considered as a `Raiyat' under the Act. [Para 22] [49-F-H; 50-A] Kumar Bimal Chandra Sinha V. State of Orissa (1963) 2 SCR 552 - referred to. 2.1. It is also necessary to consider the effect of fraud. By "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the person deceived. Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or advantage to the deceiver, will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corres-ponding loss to the deceived, the second condition is satisfied. [Para 33] [53-E-H] 2.2. "Fraud" vitiates every solemn act. Fraud and justice never dwell together. Misrepresentation itself amounts to fraud. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. [Para 35] [54-B-F] 2.3. Section 17 of the Indian Contract Act, 1872 defines "fraud" as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact, which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. [Para 36] [55-D-E] Dr. Vimla v. Delhi Administration 1963 Supp. 2 SCR 585; Indian Bank v. Satyam Febres (India) Pvt. Ltd. 1996 (5) SCC 550; S.P. Changalvaraya Naidu v. Jagannath 1994 (1) SCC 1; Ram Chandra Singh v. Savitri Devi and Ors. 2003 (8) SCC 319; Shrisht Dhawan (Smt.) v. M/s. Shaw Brothers (1992 (1) SCC 534; Roshan Deen v. Preeti Lal (2002 (1) SCC 100); Ram Preeti Yadav v. U.P. Board of High School and Interme-diate Education 2003 (8) SCC 311; Ashok Leyland Ltd. v. State of T.N. and Another 2004 (3) SCC 1; Gowrishankar v. Joshi Amba Shankar Family Trust 1996 (3) SCC 310 and Maganti Subrahmanyam (dead) by his Legal Representative v. The State of Andhra Pradesh (AIR 1970 SC 403) - referred to. Khawaja v. Secretary of State for Home Deptt. (1983) 1 All ER 765; Derry and Ors. v. Peek (1886-90) All ER 1 and Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702 - referred to. Webster's Third New International Dictionary; Black's Legal Dictionary; Concise Oxford Dictionary and Halsbury's Laws of England - referred to. 3. In view of the peculiar facts and circumstances of the case, the matter needs to be re-considered by the High Court. In the background of the massiveness of apparent fraud involved, effective and participative role of officials of the State cannot be lost sight of. Without their active and effective participation manipulation of records, tampering with documents could not have been possible. The State would do well to pursue the matter with seriousness to unravel the truth and punish the erring officials and take all permissible actions (including criminal action) against every one involved. [Paras 44, 46] [62-A-C] Case Law Reference 1963 2 SCR 552 referred to Para 21 1963 Supp. 2 SCR 585 referred to Para 33 1996 (5) SCC 550 referred to Para 33 1994 (1) SCC 1 referred to Para 34 2003 (8) SCC 319 referred to Para 35 1886-90 All ER 1 referred to Para 36 1983 1 All ER 765 referred to Para 36 1992 (1) SCC 534 referred to Para 36 2002 (1) SCC 100 referred to Para 38 2003 (8) SCC 311 referred to Para 38 2004 (3) SCC 1 referred to Para 38 1996 (3) SCC 310 referred to Para 39 1956 1 QB 702 referred to Page 41 AIR 1970 SC 403 referred to Page 43 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2656 of 2009 From the Judgement and Order dated 10.01.2007 of the Hon'ble High Court of Orissa at Cuttack in Review Petition No. 13 of 2006. With Civil Appeal No. 2657 of 2009 Gopal Subramanium, ASG, Arunav Patnaik, Subir Palit, Mukul Kumar, Miuno Kumar, Milind Kumar, with him for the Appellant(s). Altaf Ahmad, U.U. Lalit, Jana Kalyan Das, Banshidhar Baug, Avijett Bhujabal, Sabyasachi Burma, with them for the Respondent(s). REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2656 OF 2009 (Arising out of S.L.P. (C) No. 10223 of 2007) State of Orissa and Ors. .....Appellants Versus Harapriya Bisoi ....Respondent (With Civil Appeal 2657/2009 @ SLP (C) No.11960/2007) JUDGMENT Dr. ARIJIT PASAYAT. 1. Leave granted. 2. Challenge in these appeals is to the order passed by a Division Bench of the Orissa High Court allowing the writ petition filed by the respondent in Writ Petition (C) No.8282/2004 dated 27.10.2005 and the order dated 10.1.2007 passed in the Review Petition No.13/2006 arising out of said writ petition. 2. The background facts as highlighted by the appellants are as follows: The dispute relates to an alleged lease of 53.95 acres of land executed by Hatapatta dated 25.1.1933 by erstwhile intermediaries i.e. Chakradhar Mohapatra and Ramakrushna Mohapatra in favour of one Kamala Devi. The respondent Harapriya Bishoi claimed to be the successor in interest of Kamala Devi. Undisputedly, the alleged Hatapatta is an unregistered document. The land is presently situated in the capital city of Bhubaneswar in the State of Orissa. The purported Hatapatta described the land as being for permanent cultivation but as per records or rights published in 1930-31 the land is classified as "uncultivable" within Anabadi Land. The land is further described as Jhudi jungle i.e. bushy forest. The estate of intermediaries Chakradhar Mohapatra and Ramakrushna Mohapatra is vested in the State by virtue of a Notification dated 1.5.1954 issued under Section 3 of the Orissa Estate Abolition Act, 1951 (in short the `Act'). In respect of the land in question the Orissa Estate Abolition Case 4 of 1970 was registered. Originally the case was registered as OEA 18 of 1967 with OEA Collector, Cuttack. On transfer of certain villages from Cuttack district to Puri District, the case was transferred to OEA Collector, Bhubneshwar and was re-numbered as OEA Case No.4 of 1970. By order dated 6.1.1971 in the said OEA case the OEA Collector set aside the disputed lease deed on the ground of not being genuine. The Collector found that since the lands were lying fallow, the rent receipts were not genuine. The Ekpadia or Zamabandi Register in the Tahsil Officer had no mention of Kamala Devi as a lessee. The lease was unregistered even though vast tracts of land were transferred. It was thus held that the lease deed was back dated and was created with the object of defeating the purpose of the Act. The said order dated 6.1.1971 was upheld by Additional District Magistrate, Puri by order dated 28.5.1974. Between the period 1962 to 1973 settlement proceedings were carried out under the Orissa Survey and Settlement Act, 1958 (in short the `Settlement Act'). By 2 publication dated 6.12.1973, the State was recorded as the owner/title holder of the entire land of 1056.8 acres under Khatian No.1076 of village Gadakana of which the disputed land is a part. Further, by Revenue Department Notification No.13699-EA-1- ND-1/74/R published in the Extraordinary Gazette No.371 dated 18.3.1974, the Government of Orissa notified that the intermediaries interest of all intermediaries in respect of all estates other than those which have vested in the State have passed to and became vested in the State free from all encumbrances. The order dated 28.5.1974 was challenged before the Orissa High Court by filing OJC No.882 of 1974. The High Court by order dated 29.10.1976 directed the OEA Collector, Bhubneshwar to examine the matter afresh by issuing notice to the lessor and the lessee and also to ensure that the interest of the State was protected. Pursuant to the order of the High Court dated 29.10.1976 remanding the matter to the OEA Collector, the Collector heard the matter afresh and by order dated 24.4.1989 held that the lease was entered into prior to 1.1.1946. But he found that the claimant was only in possession of 7 acres of land and hence recommendation was made only for registering a settlement in respect of such 7 acres of land. Significantly, the General Administration Department (in short GA Department) was not brought on record in the proceedings. The record was then submitted to the Board of Revenue. By order dated 27.4.1991, the Board of Revenue held that due enquiry had not been made as per the orders of the High Court in the earlier writ petition and the matter was returned to the Collector for fresh enquiry. Interestingly, the order of OEA Collector dated 24.4.1989 was challenged in OJC 2063 of 1992 in the High Court. There was, however, no challenge to the order passed by the Board of Revenue dated 27.4.1991. By order dated 2.11.1992 the High Court allowed the writ petition being of the view that the finding of the Collector was to the effect that the lease was not executed after 1.1.1946, so as to defeat the provisions of the Act. Therefore, 3 the OEA Collector had no jurisdiction to proceed further in the matter. Thus (a) the determination of the extent of possession of the parties and (b) referral of the matter to the Board of Revenue was beyond jurisdiction of the Collector. The High Court quashed the order of the Collector directing settlement of portion of the leased property and declared the proceedings before the Board of Revenue to be non est. The High Court confined its order only to issue of jurisdiction and the scope of power under Section 5(i) and there was no finding recorded regarding the genuineness of the lease dated 25.1.1933. Additionally, the GA Department of the State which is the relevant Department under the Orissa Government Rules of Business was not a party in the writ petition. After the death of Kamala Devi, her purported successor Kishore Chandra Pattnaik filed a writ petition bearing No.OJC 15984 of 1997 praying for a direction to the State to accept rent in respect of the disputed property. Again, the GA Department was not arrayed as a party in the case at the time of filing of the writ petition. The GA Department was later arrayed as a party pursuant to the order dated 3.8.2000 passed in said OJC. One Anup Kumar Dhirsamant who was the Power of Attorney holder of Kishore Chandra Pattnaik executed a sale deed dated 6.3.2000 covering 23.30 acres of land on behalf of the latter in favour of the present respondent who is also the mother of Dhirsamant. Thus, the respondent came into the picture as a vendee of Kishore Chandra Pattnaik who in turn is the son of Kamala Devi. Kishore Chandra Pattnaik claimed that the original power of attorney did not empower the holder to sell the land. His plea was that the aforesaid sale was in pursuance of a forged and interpolated document. The sale deed dated 6.3.2000 was an impounded document for evasion of stamp duty. On 8.4.2002, a Settlement Rent Objection case under the Settlement Act 4 bearing case No.4013 of 2002 was instituted by the Assistant Settlement Officer, Gadakna on the strength of the petition filed by GA Department for recording the case land in favour of GA Department. The petition was allowed on 30.12.2002 in favour of the GA Department. Against the said order, Settlement Appeal cases were preferred by Kishore Chandra Pattnaik and present respondent Harapriya Bisoi. The appeals were disposed of by order dated 7.10.2004 and the record of rights in favour of GA Department was directed not to be interfered with. The respondent also filed a Civil Suit bearing No.2/12 of 2004 before learned Civil Judge, Senior Division, Bhubaneswar, for a declaration of right, title and interest in respect of disputed land. The IAs were dismissed and the Civil Court held that the right, title and interest of the present respondent had not been determined finally by OJC 2063 of 1992. It was held that the findings of the High Court related only to the power and jurisdiction of the Collector and the Board of Revenue. Respondent filed OJC 8282 of 2004 seeking a direction to the State to accept rent from her in respect of the case land, for a declaration of tenancy in her favour and for an injunction against the State restraining them from interfering with her possession. By order dated 27.10.2005 the High Court allowed the writ petition and that is the subject matter of challenge in one of the present appeals. It is to be noted that in its order dated 27.10.2005 the High Court relied upon the earlier judgment in OJC 2063 of 1992 and held that in view of the finding in that case Kamala Devi and Kishore Chandra Pattnaik were deemed to be tenants under the State government under Section 8(1) of the Act and the present respondent being successor in interest of Kamala Devi was to step into her shoes and has to be treated as a tenant under the Act. The relevant findings of the High Court in the judgment are as follows: "(i) In paras 10 and 11 of the judgement of the High Court in OJC No. 2063/1992 it was held that the lease deed having been executed prior to 1.1.1946 5 and the same have been found to be a genuine document, the OEA Collector could not have proceeded with the case any further and he should have dropped the proceeding. (ii) In the subsequent paras in the judgment in OJC No. 2063/1992, the Court held that the OEA Collector had no jurisdiction to decide the question of actual possession and make a recommendation to the Board of Revenue for concurrence. "The orders passed by the Board of Revenue in pursuance of the references of the case by the OEA Collector shall be taken to be non-est. The proceedings initiated under S. 5 (i) of the OEA Act shall be taken to have been dropped." (iii) This Court while disposing of the earlier writ application taking note of S. 5 (i) has held that Late Kamla Devi was a tenant under the ex-intermediaries before the vesting and on the date of vesting and was in possession of the entire disputed property - hence Late Kamla Devi was a deemed tenant under S. 8 (1) of the OEA Act. (iv) In view of the decision of the High Court in OJC No. 2063/1992, late Kamla Devi and thereafter her successor Kishore Chandra Pattnaik are deemed to be tenants under the State Government and therefore the Tahasildar, Bhubaneswar was duty bound to collect rent from them. (v) Kishore Chandra Pattaik being deemed to be a tenant under the State Government, the, Petitioner, Harpriya Bishoi, has stepped into his shoes after purchasing the land from him and, consequently, the Petitioner is to be treated as a tenant under the State and rent is to be collected from her." 4. In support of the appeals, learned counsel for the State submitted that the High Court has completely mis-construed the decision in OJC 2063 of 1992. In the said judgment the High Court had not returned any finding or expressed any observation with regard to the genuineness of the lease deed of 1933. The only issue before the High Court was whether the OEA Collector had exercised its powers correctly under Section 5(i) of the Act. No further issue was under consideration of the High Court. Only the scope and jurisdiction of the Collector and the Board of Revenue was decided. In the said decision the High Court had not returned any finding that late Kamala Devi was a tenant under the ex-intermediaries before the vesting and on the date of vesting and was in possession of the entire disputed property. The High Court has erroneously recorded the said finding in the impugned judgment. Therefore, the High Court was in 6 error by holding that Kamala Devi and thereafter her successor Kishore Chandra Pattnaik were deemed to be tenants under Section 8(1) of the Act. It is pointed out that the proceedings in OEA Case No.4 of 1970 were under Section 5(i) of the Act and not under Section 8(1) of the Act. Neither the order of OEA Collector in OEA Case No.4 of 1970 dated 24.4.1989 nor the High Court's order in OJC 2063 of 1992 recognizes the predecessors in interest of the respondent as tenants under Section 8(1) of the Act. The OEA Collector had categorically held in the order dated 24.4.1989 that the plea of the claimants that the proceedings to be treated as one under Section 8(1) does not hold water. The OEA Collector was therefore conscious of the fact that there was no exercise of power under Section 8(1) of the Act, but only under Section 5(i) of the Act. Further, the High Court was in error in its interpretation of Section 5(i) of the Act. The settlement of the lease in favour of the lessee under the first proviso of Section 5(i) has to be necessarily confirmed by a member, Board of Revenue. 5. It has also been highlighted that a decision of this Court in State of Orissa v. Brundaban Sharma (1995 Supp (3) SCC 249) has been completely lost sight of. The conceptual different between Section 5(i) of the Act and Section 8 has been lost sight of. It was clearly observed in Brundaban's case (supra) that the order of the Collector under Section 5(i) of the Act is required to be confirmed by Board of Revenue even if Collector upholds genuineness of the lease. Several gross acts of fraud have been committed by the respondent and/or others involved. This clearly invalidates every action. The vendor's claims are pending adjudication before various courts. The record of rights has attained finality in the settlement proceedings and the High Court should not have unsettled them in the manner done. Therefore, it is submitted that the impugned judgment of the High Court cannot be maintained. 7 6. On the other hand, learned counsel for the respondent submitted that consequences of vesting and the finding of the Collector that the lease was prior to 1.1.1946 and is a genuine one has been confirmed in the earlier judgment. The same has attained finality. The State of Orissa was represented by the Secretary to Government, Revenue Department, Bhubneshwar and the Member, Board of Revenue was also a party. It is submitted that the decision in Brundaban's case (supra) was rendered in a different set up and has no application to the facts of the present case. 7. Certain factors need to be noted in the present case. 8. In Brundaban's case (supra) this Court held that even in a case where the OEA Collector "decides not to set aside the lease, he should have referred the case to the Board of Revenue. The object of conferment of such power on the Board of Revenue appears to be to prevent collusive or fraudulent acts or actions on the part of the intermediaries and lower level officers to defeat the object of the Act." This Court further held that even if the OEA Collector decides that a lease was purported to have been granted before 1.1.1946 and is not liable to be set aside, without reference or confirmation by the Board of Revenue, such lease would not attain finality The judgment finally concludes that, "the' order passed by the Tehsildar (exercising powers as the OEA Collector) without confirmation by the Board is non est. A non est order is a void order and it confers no title and its validity can be questioned or invalidity be set up in any proceeding or at any stage." 9. It is important to note, that in the facts of the present case, the Member, Board of Revenue in its order dated 27.4.1991 while considering the decision of the OEA Collector in OEA Case No. 4 of 1970, had observed that a detailed enquiry had not been 8 made by the OEA Collector "to ascertain who was in possession of the case land prior to 1.1.1946 and from 1.1.1946 to 1.5.1954 (date of vesting of estate) and thereafter". The Member, Board of Revenue, had further stated that, "the OEA Collector should have verified the records to ascertain who were the ex-intermediaries (lessors) and if they had right to alienate the land and if they have got compensation u/ s 28 of the OEA Act". Further, "the O.Ps did not press their claim for a considerable period of time" and "after notice was published in the newspaper 'Prajatantra' dated 22.7.87, a number of interveners have preferred their claims before the OEA Collector", who have not been examined. 10. The Member, Board of Revenue in its order had concluded that, "the case land are within Bhubaneswar Municipality where the capital of state has been established and a number of Government institutions have developed.. In view of the above points it is necessary on the part of the OEA Collector to conduct a detailed enquiry". 11. Without such confirmation by Member, Board of Revenue, the order of the OEA Collector had not attained finality, and hence, the lease deed in favour of Kamala Devi did not attain finality. 12. Certain provisions of the Act need to be noted. 13. Section 2(h) defines an `intermediary' as follows: "Intermediary' with reference to any estate means a proprietor, sub-proprietor, landlord, land holder, malguzar, thikadar, gaontia, tenure-holder, under-tenure holder and includes an inamdar, a jagirdar, Zamindar, Illaquedar, Khorposhdar, Parganadar, Sarbarakar and Maufidar including the ruler of an Indian State merged with the State of Orissa and all other holders or owners of interest in land between the raiyat and the State." 9 14. Section 2(hh) defines as `intermediary interest' as an estate or any rights or interest therein held or owned by or vested in an Intermediary. 15. Significantly, as the above definitions would show, an `intermediary' and an `intermediary interest' cover all the holders or owners of interest in land between the State and the 'Raiyat' i.e. the actual cultivator or tiller of the soil. This is in line with the object and purpose of the 1951 Act i.e. to establish a direct relationship between the tiller and the State, and to abolish all intermediary interests, by whatever name called. 16. `Raiyat' is the actual tiller of the soil, and is defined in section 2(n) as: 'Raiyat' means any person holding the land for the purpose of cultivation and who has acquired the right of occupancy according to the tenancy law or rules for the time being in force in that area or in the absence of such law or rules, the custom prevalent in that area. 17. Section 3 of the Act empowers the State to declare,, by notification, that the estate specified in the notification has passed to and become vested in the State free from all encumbrances. In similar vein, Section 3A empowers the State to declare by notification that the intermediary interests of all intermediaries or a class of intermediaries in the whole or part of the estate have passed to and become vested in the State free from all encumbrances. 18. Upon a notification being issued under the provisions of Sections 3, 3A or 4 of the Act, the entire estate vests in the State free from encumbrances and the intermediary ceases to have any interest in such estate other than the interests expressly saved under the Act. 10 Where a lease or transfer has been made prior to 1.1.1946, solely with the object of defeating the provisions of the Act or to claim higher compensation, Section 5(i) empowers the collector to set aside such lease, settlement or transfer and take possession of the land from such person. 19. By virtue of Section 8, any person who immediately before the vesting of an estate in the State government was in possession of any holding as a tenant under an intermediary, would on the from the date of the vesting, be deemed to be a tenant of the State government. The words 'holding as a tenant' mean the `Raiyat' and not any other class of tenant: Reference in this regard may be drawn to the definition of `holding' in the Orissa Tenancy Act, 1913. `Holding' means a parcel or parcels of land held by a raiyat and forming the subject of a separate tenancy". 20. Section 8 thus confers protection only on the `Raiyat' i.e. the actual tiller of the soil. 21. Significantly, a `lease' and `lessee' on the one hand are defined separately from the 'Raiyat' under the Act. Thus, the mere execution of a lease by the intermediary in favour of a person would not confer the status of a 'raiyat' on the lessee nor would protect the possession of such lessee under Section 8. In fact, a `lease' would amount to a transfer of an interest of the intermediary in the land to the lessee. In such a situation, far from being a tenant protected under Section 8, the lessee would in fact step into the shoes of the intermediary with his interest being liable for confiscation and his entitlement limited to compensation from the State. On the other hand, for protection under Section 8, one has to be a Raiyat cultivating the land directly and having the rights of occupancy under the tenancy laws of the State. Thus, a `lessee' who is not actually 11 cultivating the land i.e. who is not a 'raiyat', would not be within the protection of Section 8 of the Act. Section 2(h) of the Act in its residuary part states that `intermediary' would cover all owners or holders of interest in land between the raiyat and the State. In Kumar Bimal Chandra Sinha V. State of Orissa, (1963) 2 SCR 552, this Court while considering the scope of the Act has held as follows: "the position in law is that `estate" includes the interest, by whatever' name called, of all persons, who hold some right in land between the State at the apex and the raiyat at the base. That is to say, the Act is intended to abolish all intermediaries and rent receivers and to establish direct relationship between the State, in which all such interests vest, after abolition under the Act, and the tillers of the soil." 22. On the facts of the present case, it is clear that the land was not under cultivation by Kamala Devi. As per the record of rights published in 1930-31, the disputed land is classified as Anabadi Land i.e. uncultivable. The land is further described in the records as Jhudi jungle, i.e. bush forest. In addition, by order dated 6.1.1971 in OEA Case 4 of 1970, the OEA Collector, Bhubaneshwar had found that the lands were lying fallow and were not in physical possession of any person. The land thus not being cultivated, Kamala Devi cannot prima facie be considered as a 'Raiyat' under the Act. 23. It is the stand of the appellant-State that the 'Hatapatta' on the basis of which Kamala Devi has claimed her title is an unregistered document. Section 107 of the Transfer of Property Act, 1882 (in short the `T.P. Act') read with Section 17 of the India Registration Act, (in short the `Registration Act') mandates that the conveyance of title through a written instrument of any immovable property worth more than Rs.100 for a period of one year or more must be registered. If such an instrument is not registered then Section 49 of the Registration Act read with Section 91 of the Indian Evidence Act, 1872 (in short the `Evidence Act') precludes the adducing of any further evidence of the 12 terms and contents of such a document. [See Sri Sita Maharani v. Chhedi Mahto (AIR 1955 SC 328). There is a further requirement of registration of the instrument of conveyance/agricultural lease under Sections 15 and 16 of the Orissa Tenancy Act, 1913 (in short the `Tenancy Act'). 24. It is further submitted that even presuming that the 'Hatapatta' is legal and valid, it would, make Kamla Devi a 'tenure-holder' as opposed to a 'raiyat'. Section 2(h) of the Act defines `intermediary' to include 'tenure-holder'. Thus, a "tenure holder" being an "intermediary" under the Act- the rights and liabilities of such tenure holder would stand extinguished under the Act. 25. According to the proviso to Section 5(5) of Tenancy Act where the area held by the tenant exceeds 33 acres the tenant shall be presumed to be a `tenure-holder' (which includes her successors-in-interest) until the contrary is proved. As under the `Hatapatta', purportedly more than 53.95 acres of land has been given by way of lease by the ex-intermediary to Kamala Devi, she or her successor-in-interest is presumed to be a `tenure-holder' and, therefore, an `intermediary' under the Act. 26. It is highlighted by learned counsel for the appellant, as various claims on prime government land in the city of Bhubaneswar have been surfacing on the basis of fraudulent title papers (called 'Hatapattas') allegedly to have been issued by ex-- intermediaries, the State Government in the General Administration Department, has handed over the issue of fraudulent 'Hatapattas' to the Crime Branch, CID, Cuttack for inquiry and necessary legal action vide Capital Police Station Case No.178/2005 dated 20.5.2005. An interim report of the Inspector/CID-Crime Branch dated 31.8.2007 with respect to the suit land has been submitted. 13 27. The Crime Branch Report states that the Power of Attorney through which the suit land has been sought to be alienated in favour of the Respondent herein has been tampered and manipulated by the Power of Attorney holder, Anup Kumar Dhirsamant, Managing Director, M/s Milan Developers & Builders (P) Ltd. The vendor, Kishore Chandra Pattnaik had not given any powers of alienation to his Power of Attorney holder Anup Kumar Dhirsamant. The respondent Harapriya Bisoi is the mother of the Power of Attorney holder. The Crime Branch also states that Anup Kumar Dhirsamant had interpolated the deed of Power of Attorney giving himself powers to enter into a sale deed so as to be able to alienate the property in favour of his mother, Harapriya Bisoi, the respondent herein. The report concludes that prima facie offences u/s 420/468/471/477A/167/120B of the Indian Penal Code, 1860 (in short `IPC'), inter-alia, have been made out against respondent Harapriya Bisoi and Anup Kumar Dhirsamant. 28. It has also come to light that the Sale Deed (RSD) No.1196/2000 dated 6.3.2000 executed in favour of Harapriya Bisoi, the Respondent herein, has been impounded for non-payment of adequate stamp duty with the deficit stamp duty and registration fee amounting to about Rs.1.03 crores. 29. In Settlement Rent Objection Case No. 4013/2002 under the Settlement Act, the Asst. Settlement Officer by its order dated 10.3.2003 had recorded the suit land in favour of the G.A. Department. 30. Thereafter, the Respondent filed Settlement Appeal Case, being Suit No. 205 of 2003, to set aside the above order. The Settlement Officer by its order dated 7.10.2004 had dismissed the appeal holding that the draft. Record of Rights in respect of the suit land shall not be interfered with. The officer returned the following findings: 14 (1) On perusal of the impugned order passed by the Asst. Settlement Officer in the said objection case it is revealed that necessary field enquiry was made in presence of the parties. (2) It is observed that there exists no such field/plot as found in the not final map in respect of suit land relating to Hal Plot Nos. 7590 Ac 3.000, 7592 Ac.3.400, 7626 Ac 1.940 and 7646 Ac.5.000 - the map in respect of those plots are imaginary. (3) The land relating to Hal Plot No. 7646 Ac 5.000 have been allotted to Sainik School since the year 1962-63 and comes under the premises of Sainik School. (4)The alleged possession of suit land by the appellant is found to be disputed with others like Dijabar Behera S/o Bhima Behera and Golakh Behera S/o Kesab Behera. (5) Besides, an area of Ac 2.300 dec. out of the suit land i.e. Sabik Plot No. 4706 along with its adjoining land to the extent of Ac. 39.399 dec. have been leased to the Government of India, Ministry of Railways, for the purpose of construction of office and residential complex of East Coast Railway, Bhubaneswar. It is also observed by the Asst. Settlement Officer that no jamabandi in respect of the suit land has been opened in the Tahsil records. (6) The Appellant adduced no evidence as regards to acquiring of right, title, interest and possession over the suit land which is Government land as per the finally published ROR of the year 1973-74. (7) Creation of tenancy right in favour of the Appellant by way of deeming provision u/ s 8 (1) of the Act has also not been recognized by the 15 Tahasildar, Cuttack/Bhubaneswar; the claim of possession by the appellant over the suit land is not confirmed. 31. In course of hearing of the appeals, a query was made as to what is the effect of the order of the High Court in OJC 2063 of 1992 i.e. whether it covers the area of 7 acres or the whole area of 53.95 acres of land. Learned counsel for the respondent submitted that in view of the finding that the order of the Collector was indefensible, obviously the right, title and interest of the respondent extended to the whole area. This stand is clearly unsustainable. The Collector's order only referred to certain enquires made to confirm possession of only 7 acres of land. The High Court apparently has not considered this aspect. The High Court has also not considered the effect of alleged fraud and the fact that the relevant department was not a party in the proceedings before the High Court in OJC 2063 of 1992. 32. It is necessary to consider the effect of fraud. 33. By "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the person deceived. Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include and any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or advantage to the deceiver, will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second 16 condition is satisfied. (See Dr. Vimla v. Delhi Administration (1963 Supp. 2 SCR 585) and Indian Bank v. Satyam Febres (India) Pvt. Ltd. (1996 (5) SCC 550). 34. A "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See S.P. Changalvaraya Naidu v. Jagannath (1994 (1) SCC 1). 35. "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury enures therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. (See Ram Chandra Singh v. Savitri Devi and Ors. (2003 (8) SCC 319). 17 36. "Fraud" and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct. Michael Levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, `wing me into the easy hearted man and trap him into snares'. It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary "fraud" in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, "fraud" is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Indian Contract Act, 1872 defines "fraud" as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact, which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. In a leading English case i.e. Derry and Ors. v. Peek (1886-90) All ER 1 what constitutes "fraud" was described thus: (All ER p. 22 B-C) "fraud" is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false". But "fraud" in public law 18 is not the same as "fraud" in private law. Nor can the ingredients, which establish "fraud" in commercial transaction, be of assistance in determining fraud in Administrative Law. It has been aptly observed by Lord Bridge in Khawaja v. Secretary of State for Home Deptt. (1983) 1 All ER 765, that it is dangerous to introduce maxims of common law as to effect of fraud while determining fraud in relation of statutory law. "Fraud" in relation to statute must be a colourable transaction to evade the provisions of a statute. "If a statute has been passed for some one particular purpose, a court of law will not countenance any attempt which may be made to extend the operation of the Act to something else which is quite foreign to its object and beyond its scope. Present day concept of fraud on statute has veered round abuse of power or mala fide exercise of power. It may arise due to overstepping the limits of power or defeating the provision of statute by adopting subterfuge or the power may be exercised for extraneous or irrelevant considerations. The colour of fraud in public law or administration law, as it is developing, is assuming different shades. It arises from a deception committed by disclosure of incorrect facts knowingly and deliberately to invoke exercise of power and procure an order from an authority or tribunal. It must result in exercise of jurisdiction which otherwise would not have been exercised. The misrepresentation must be in relation to the conditions provided in a section on existence or non-existence of which the power can be exercised. But non-disclosure of a fact not required by a statute to be disclosed may not amount to fraud. Even in commercial transactions non-disclosure of every fact does not vitiate the agreement. "In a contract every person must look for himself and ensures that he acquires the information necessary to avoid bad bargain. In public law the duty is not to deceive. (See Shrisht Dhawan (Smt.) v. M/s. Shaw Brothers (1992 (1) SCC 534). 37. In that case it was observed as follows: 19 "Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct. Michael levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, 'wing me into the easy-hearted man and trap him into snares'". It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary fraud in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, fraud is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Contract Act defines fraud as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of the fact with knowledge that it was false. In a leading English case Derry v. Peek [(1886-90) ALL ER Rep 1: (1889) 14 AC 337 (HL)] what constitutes fraud was described thus : (All Er p. 22 B-C) `Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false'." 38. This aspect of the matter has been considered by this Court in Roshan Deen v. Preeti Lal (2002 (1) SCC 100) Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education (2003 (8) SCC 311), Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another (2004 (3) SCC 1). 39. Suppression of a material document would also amount to a fraud on the court. (see Gowrishankar v. Joshi Amba Shankar Family Trust (1996 (3) SCC 310) and S.P. Chengalvaraya Naidu's case (supra). 20 40. "Fraud" is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. Although negligence is not fraud but it can be evidence on fraud; as observed in Ram Preeti Yadav's case (supra). 41. In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, Lord Denning observed at pages 712 & 713, "No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything." In the same judgment Lord Parker LJ observed that fraud vitiates all transactions known to the law of however high a degree of solemnity. 42. There is another statute which has great relevance to the present dispute, i.e. The Orissa Communal Forest and Private Lands (Prohibitions of Alienation) Act, 1948 (in short `Communal Forest Land'). 43. In Maganti Subrahmanyam (dead) by his Legal Representative v. The State of Andhra Pradesh (AIR 1970 SC 403) it was observed as follows: "4. The purpose of the Act was to prohibit the alienation of communal, forest and private lands in estates in the Province of Madras and the preamble to the Act shows that it was enacted to prevent indiscriminate alienation of communal, forest and private lands in estates in the Province of Madras pending the enactment of legislation for acquiring the interests of landholders in such estates and introducing ryotwari settlement therein. No fixed duration of the Act was specified and it is impossible to hold that merely because of the above preamble the Act became a temporary Act. The definition of `forest land' is given in Section 2(b) of the Act reading: `forest land' includes any waste land containing trees and shrubs, pasture land and any other class of land declared by the State Government to be forest land by notification in the Fort St. George Gazette". 21 Sub-section (1) of Section 3 prohibited landholders from selling, mortgaging, converting into ryoti land, leasing or otherwise assigning or alienating any communal or forest land in an estate without the previous sanction of the District Collector, on or after the date on which the ordinance which preceded the Act came into force, namely, 27th June, 1947. Section 4(1) provided that: "Any transaction of the nature prohibited by Section 3 which took place, in the case of any communal or forest land, on or after the 31st day of October, 1939 ... shall be void and inoperative and shall not confer or take away, or be deemed to have conferred or taken away, any right whatever on or from any party to the transaction: * * *" This sub-section had a proviso with several clauses. Our attention was drawn to clauses (iii), (iv) and (v) of the proviso but in our opinion none of these provisos was applicable to the facts of the case so as to exclude the operation of sub-section (1) of Section 4. Under sub-section (3) of Section 4: "If any dispute arises as to the validity of the claim of any person to any land under clauses (i) to (v) of the proviso to sub-section (1), it shall be open to such person or to any other person interested in the transaction or to the State Government, to apply to the District Judge of the district in which the land is situated, for a decision as to the validity of such claim." Under sub-section (4) the District Judge to whom such application is made was to decide whether the claim to the land was valid or not after giving notice to all persons concerned and where the application was not made by the State Government, to the Government itself, and his decision was to be final. Madras Act 26 of 1948, was passed on April 19, 1949, being an Act to provide for the repeal of the Permanent Settlement, the acquisition of the rights of landholders in permanently settled and certain other estates in the Province of Madras, and the introduction of ryotwari settlement in such estates. Apparently because of the preamble to the Act it was contended that with the enactment of the repeal of the Permanent Settlement by the Act of 1948, which also provided for the acquisition of the rights of landholders in permanently settled estates, the Act stood repealed. We fail to see how because of the preamble to the Act it can be said that it stood repealed by the enactment of the later Act unless there were express words to that effect or unless there was a necessary implication. It does not stand to reason to hold that the alienation of large blocks of land which were rendered void under the Act became good by reason of the passing of the later Act. Our attention was drawn to Section 63 of the later Act which provided that: "If any question arises whether any land in an estate is a forest or is situated in a forest, or as to the limits of a forest, it shall be determined by the Settlement Officer, subject to an appeal to the Director within such time as may be prescribed and also to revision by the Board of Revenue." In terms the section was only prospective and it did not seek to impeach any transaction which was effected before the Act and was not applicable to transactions anterior to the Act. In our opinion Section 56(1) of the 22 later Act to which our attention was drawn by the learned counsel does not fall for consideration in this case and the disputes covered by that section do not embrace the question before us. 5, Madras General Clauses Act 1 of 1891, deals with the effect of repeals off statutes. Section 8, sub-section (f) thereof provides that: "Where any Act, to which this Chapter applies, repeals any other enactment, then the repeal shall not-- (a)-(e) * * * (f) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, fine, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such fine, penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed." This shows that even if there was a repeal any investigation started before the repeal would have to be continued and legal proceedings under the Act could be prosecuted as if the repealing Act had not been passed. 6. There is also no force in the contention that unless there was a notification under Section 2(b) of the Act declaring a particular land to be forest land, the applicability of the Act would be excluded. The definition of `forest land' in that section is an inclusive one and shows that `forest land' would include not only waste land containing trees, shrubs and pasture lands but also any other class of lands declared by Government to be forest land. This does not mean that before a piece of land could be said to be forest land there would have to be a notification by the Government under the Act." 44. In view of the aforesaid conclusions we are of the considered view that the matter needs to be re-considered by the High Court. 45. The High Court while re-hearing the matter shall also consider the effect of the aforesaid observations of this Court, and various aspects highlighted above. 46. In the background of the massiveness of apparent fraud involved, effective and participative role of officials of the State cannot be lost sight of. Without their active and 23 effective participation manipulation of records, tampering with documents could not have been possible. The State would do well to persue the matter with seriousness to unravel the truth and punish the erring officials and take all permissible actions (including criminal action) against every one involved. 47. The appeals are allowed to the aforesaid extent. ........................................J. (Dr. ARIJIT PASAYAT) ..........................................J. (LOKESHWAR SINGH PANTA) New Delhi, April 20, 2009 24

Kazi =1) the scope of powers and functions of a Kazi, in the context of marriage between muslims; and 2) compliance with the procedural requirements, while terminating the appointment of the petitioner. The institution of Kazi, at one point of time, occupied a very pivotal position, in the administration of Muslim Law. He was conferred with adjudicatory and administrative powers, and endowed with religious duties and functions. With the advent of British rule of India, the adjudicatory powers of Kazi came to be restricted, and appointment of Kazis was provided for, under the Kazis Act 1880. The following paragraph of the statement of objects and reasons of that Act, would summarise the nature of the powers of a Kazi, that existed earlier thereto. "Under the Muhammadan Law the Kazi was chiefly a Judicial Officer. His principal powers and duties are stated at some length in the Hedaya, Book xx. He was appointed by the State, and may be said to have corresponded to our Judge or Magistrate. In addition, however, to his functions under the Muhammadan Law, the Kazi in this country, before the advent of British rule, appears to have performed certain other duties, partly of a secular and partly of a religious nature. The principal of these seems to have been preparing, attesting and registering deeds of transfer of property, celebrating marriages and performing other rites and ceremonies. It is not apparent that any of these duties were incumbent on the Kazi as such. It is probable that the customary performance of them arose rather from his being a public functionary and one known by his official position to be acquainted with the law, than from his having, as Kazi, a greater claim to perform them than any one else. Such was the position of the Kazi in this country under Native Government. On the introduction of the British rule, Judges and Magistrates took the place of Kazis and the Kazi in his judicial capacity disappeared; but the British Government, though no longer recognizing the judicial functions of the Kazi, did not abolish the office. By certain Regulations passed from time to time, the appointment of Kazi-ul-Kuzaat and Kazis by the State was provided for, and the performance of their non-judicial duties was recognised by law. In the case of Bengal, indeed, certain additional duties were imposed on them. The duties of the Kazi under these Regulations comprised some or all of the following, viz- (1) preparing and attesting deeds of transfer and other law-papers; (2) celebrating marriages and presiding at divorces; (3) performing various rites and ceremonies; (4) superintending the sale of distrained property and paying charitable and other pensions and allowances." The relevance of the institution of Kazi has been substantially restricted, and for all practical purposes, it is confined to the celebration of marriages, and performance of related rites and ceremonies.

THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY Writ Petition No. 8197 of 2005 30-03-2007 Qazi Habeeb Abdullah Rifai The Principal Secretary to Government, Minorities Welfare Department, Govt. of A.P., Secretariat, Hyderabad & another COUNSEL FOR PETITIONER: Sri K.Pratap Reddy, Senior Counsel COUNSEL FOR RESPONDENTS: Sri A.M.Qureshi, G.P. for Minorities. :ORDER: The petitioner was appointed as a Kazi, for performing the marriages of Muslims (Shafayee sect) at Hyderabad, by the Government of A.P., the 1st respondent herein, through orders in G.O.Ms.No.606, Revenue (Wakf) Department, dated 27.6.1990. This appointment was made under the provisions of the Kazis Act, 1880 (for short "the Act). Through its orders in G.O.Ms.No.757, dated 18.8.1990, the petitioner was permitted to perform the marriages of Arabs also, and the original order of appointment was accordingly modified. The petitioner appointed a person by name Ahmed Sharif, as his Naib Kazi. The latter performed nikha of a woman, by name Haseena Begum, with one, Mr.Jaffar Yakub Hussan Alzarouni, said to be an Arab Shaik. The woman submitted a complaint in Chandrayanagutta Police Station, alleging harassment in the hands of her husband. Soon thereafter, a news item appeared in the local dailies, on 27.5.2004. The 1st respondent called for a report, from the A.P. Wakf Board, the 2nd respondent herein, on the subject, and through orders in G.O.Rt.No.240, dated 4.6.2004, it suspended the appointment of the petitioner as Kazi. This was followed by an enquiry by the 2nd respondent, against the petitioner, and a report dated 14.9.2004 was submitted. Taking the same, into account, the 1st respondent issued orders in G.O.Ms.No.11, Minorities Welfare (Wakf-II) Department, dated 2.4.2005, removing the petitioner from the post of Kazi. The petitioner challenges the same. The petitioner contends that as a Kazi, his duty is only to verify whether the parties to the marriage have attained the stipulated age, and whether there exists the offer and acceptance, free from any external factors. He contends that the bride did not complain of any threat, coercion, or her displeasure for the marriage, and that her complaint came to be made, only on account of the alleged harassment made by her husband. He contends that the Kazi has absolutely no role to play in such matters, and there was no basis for the impugned order. He complains of violation of principles of natural justice and defects in the enquiry. The 1st respondent filed a counter affidavit, stating that the petitioner ought to have ensured that the institution of marriage is not misused by the parties, and that on account of his negligence, a marriage between a girl of 19 years and an Arab Shaik of 73 years, took place. It is also stated that the petitioner failed to ascertain the correct information, as well as the status of the parties, particularly that of the bridegroom, at the time of marriage. The allegations as to the procedural lapses are denied. The 2nd respondent filed a separate counter affidavit. Apart from the points urged by the 1st respondent, the 2nd respondent stated that notwithstanding the limited role to be played by Kazi, the petitioner ought to have been careful, in ascertaining the ages of the parties, to a marriage. It is stated that in the course of enquiry, several instances, of the petitioner arranging for marriages between Arab Shaiks and innocent girls in the city of Hyderabad, have come to light. It is also alleged that the petitioner and his Naibs have provided facilities to the Arab Shaiks for their stay and marriages, by collecting huge amounts. Various details of enquiry conducted against the petitioner that resulted in submission of enquiry report, dated 14.9.2004, are also furnished. It is pleaded that no procedural irregularity has taken place. Sri K.Pratap Reddy, learned Senior Counsel, appearing for the petitioner, submits that the proceedings initiated by the respondents, against the petitioner, are without any basis and are contrary to the provisions of law. He contends that no specific charge was framed against the petitioner, and the respondents were carried away by certain reports in the newspapers and they did not even care to verify the truth, or legality of such allegations. Learned Senior Counsel submits that the appointing authority i.e. the 1st respondent, did not frame any charges, and the enquiry conducted by the 2nd respondent was not on the basis of any specific charges. He points out that even according to the enquiry report, the persons who are said to have complained against the petitioner, did not turn up in the enquiry, and despite the same, findings were recorded against the petitioner, and the impugned order was passed, in violation of settled principles of law. Learned Government Pleader for Minorities Welfare and learned Standing Counsel for the Wakf Board, submit that the petitioner and his Naibs failed to take necessary precautions, while performing the marriage in question, particularly, when the bridegroom was a foreigner, aged more than 70 years. According to them, the Kazi occupies an important place in the Muslim Law and that the petitioner had misused his position, for monetary gains. By referring to the proceedings that have taken place from time to time, they contend that the requirement of an independent and impartial enquiry and the principles of natural justice were complied with. The petitioner challenges the orders of the 1st respondent, terminating his appointment as Kazi. The allegation against the petitioner is that he failed to discharge his duties and functions as Kazi, properly. Specific reference is made to a marriage between a woman, by name Haseena Begum, and an Arab Shaik, by name Jaffar Yakub Hussan Alzarouni. The said marriage was performed by a Naib Kazi, by name Ahmed Shareef, appointed by the petitioner. A Kazi is responsible for the acts and omissions on the part of the Naib Kazi, appointed by him. The petitioner does not dispute this legal position. The marriage in question was performed on 7.5.2004. The marriage certificate issued by the Naib Kazi discloses that the bride was accompanied by her father and he signed as "vakil" in the marriage register. Her uncle, by name Syed Hasham, and her real cousin, by name Syed Ghouse, signed as two witnesses. The age of the bride was entered as 22 years. In the column relating to the particulars of the bridegroom, the date of birth was shown as 10.2.1931. Few weeks after the marriage, the bride submitted a complaint before Chandrayanagutta Police Station, under Section 498-A IPC. She alleged that after the marriage, her husband started harassing her for dowry. It was also alleged that the bridegroom is in the habit of marrying innocent women and giving talaq shortly thereafter. Reports appeared in the newspapers on 27.5.2004, about the practice of the aged Arab Shaiks marrying young muslim girls from Hyderabad, and the marriage in question was referred to, extensively. This gave rise to suspension of the petitioner. Thereafter, an enquiry was held, and the appointment of petitioner as Kazi, was terminated. In this context, two questions arise for consideration, viz., 1) the scope of powers and functions of a Kazi, in the context of marriage between muslims; and 2) compliance with the procedural requirements, while terminating the appointment of the petitioner. The institution of Kazi, at one point of time, occupied a very pivotal position, in the administration of Muslim Law. He was conferred with adjudicatory and administrative powers, and endowed with religious duties and functions. With the advent of British rule of India, the adjudicatory powers of Kazi came to be restricted, and appointment of Kazis was provided for, under the Kazis Act 1880. The following paragraph of the statement of objects and reasons of that Act, would summarise the nature of the powers of a Kazi, that existed earlier thereto. "Under the Muhammadan Law the Kazi was chiefly a Judicial Officer. His principal powers and duties are stated at some length in the Hedaya, Book xx. He was appointed by the State, and may be said to have corresponded to our Judge or Magistrate. In addition, however, to his functions under the Muhammadan Law, the Kazi in this country, before the advent of British rule, appears to have performed certain other duties, partly of a secular and partly of a religious nature. The principal of these seems to have been preparing, attesting and registering deeds of transfer of property, celebrating marriages and performing other rites and ceremonies. It is not apparent that any of these duties were incumbent on the Kazi as such. It is probable that the customary performance of them arose rather from his being a public functionary and one known by his official position to be acquainted with the law, than from his having, as Kazi, a greater claim to perform them than any one else. Such was the position of the Kazi in this country under Native Government. On the introduction of the British rule, Judges and Magistrates took the place of Kazis and the Kazi in his judicial capacity disappeared; but the British Government, though no longer recognizing the judicial functions of the Kazi, did not abolish the office. By certain Regulations passed from time to time, the appointment of Kazi-ul-Kuzaat and Kazis by the State was provided for, and the performance of their non-judicial duties was recognised by law. In the case of Bengal, indeed, certain additional duties were imposed on them. The duties of the Kazi under these Regulations comprised some or all of the following, viz- (1) preparing and attesting deeds of transfer and other law-papers; (2) celebrating marriages and presiding at divorces; (3) performing various rites and ceremonies; (4) superintending the sale of distrained property and paying charitable and other pensions and allowances." The relevance of the institution of Kazi has been substantially restricted, and for all practical purposes, it is confined to the celebration of marriages, and performance of related rites and ceremonies. It is evident from the preamble of the Act, which, inter alia, mentions as under: "...and whereas by the usage of the Mahommedan community in some parts of India the presence of kazis appointed by the Government is required at the celebration of marriages and the performance of certain other rites and ceremonies, and it is therefore expedient that the Government should again be empowered to appoint persons to the office of kazi; It is hereby enacted as follows:" In KAZI MD.ABBAS ALI v. A.P. WAKF BOARD1, this court held that a Kazi, appointed under the Act, holds a position of considerable importance, and he has to discharge not only secular, but also religious duties. However, when it comes to the question of performance of the marriage, the duties of the kazis are restricted, mostly to verify whether the parties to the marriage are of the prescribed age, particularly of the bride, and entering the necessary particulars of the bride and bridegroom in the registers to be maintained by him, and ensure that there exists free consent. Though both the parties of the marriage are required to be accompanied by their respective parents, relations or acquaintances, the verification, as to existence of free consent, particularly from the bride by the Kazi, independently, assumes significance, in view of the fact that the marriage under Muslim Law is more a contract, than a ceremony. One of the important particulars to be entered by the Kazi in the registers maintained by him is about the marital status of the bridegroom. If the bridegroom has four wives, by the time he intends to contract another marriage, the proposed marriage stands prohibited. It is the duty of the Kazi to ensure that there does not exist any surviving marriage with the bride and that the bridegroom does not have more wives than three, at the time of the proposed marriage. Once a Kazi is satisfied that the parties to the marriage have attained the age of majority, the consent of the bride for the marriage is free and that the bridegroom does not have more wives than three, he has no option but to perform the rituals of marriage. Any attempt by him, to ascertain any further information, or to refuse to perform the marriage, on any other ground, is prone to impinge upon the rights of the parties to the marriage, and would be in excess of the powers and duties ascribed to him, under law. Another important aspect of the matter is that except in certain cases, such as, to express his view about the validity or otherwise of the dissolution of the marriage brought about the parties themselves, the kazi has absolutely no role to play, once the marriage is performed. He cannot act as an arbitrator or adjudicator, in any disputes that arise between the parties, after their marriage is performed. In the instant case, the bride, by name Haseena Begum, did not complain of any lapse on the part of the Kazi, in the matter of ascertaining the ages or factors, if any, influencing her consent for the marriage. Her only complaint was that few days subsequent to the marriage, her husband started harassing her for additional dowry. Even if the allegation is taken as true, there is hardly anything, which the petitioner or his naib were expected to do about it. Therefore, the grounds, on which the proceedings were initiated against the petitioner, are totally unrelated to the functions of a kazi. The authority, which appoints a kazi, is the Government. Whether by operation of provisions of General Clauses Act, or on application of the general principles of law, it becomes clear that it is only the Government that can initiate enquiry and pass orders against the petitioner. The enquiry, in the instant case, was conducted by the Chief Executive Officer (CEO) of A.P. Wakf Board. The Act does not assign any role to an authority under the Wakf Act. Assuming that the CEO was appointed by the Government and that it is otherwise permissible, it needs to be verified as to whether he has followed the correct procedure. Neither the Government, nor the Enquiry Officer, framed any specific charges against the petitioner. The latter issued a show-cause notice, dated 17.6.2004 to the petitioner. In that, the petitioner was required to produce the concerned records, within three days from the date of receipt of the notice. On receipt of the same, the petitioner submitted a representation, stating that he was placed under suspension, through G.O.Rt.No.240, dated 4.6.2004, and thereupon, he submitted relevant records as well as explanation to it. It is also stated that the allegations against him that he failed to produce the records, is not correct. The other notices issued to the petitioner, were those relating to the intimation of the dates of enquiry. In his report, dated 14.9.2004, the Enquiry Officer, referred to the notice dated 17.6.2004. Not a single witness was examined by the Enquiry Officer. The scope of the enquiry and the various steps involved in the matter, were summed up by the Enquiry Officer in paragraphs 9 to 12 of the report, as under: "9. In the present case the allegations are that after the marriage with Haseena Begum, the said Arab Shaik deserted her and married another girl and he was harassing her for dowry. So on a complaint lodged with the police at Chandrayangutta Police Station, a case was registered in Crime No.113/2004 under Section 498(A), 109 IPC, against the said Arab Shaik. 10. The Chief Executive Officer on receipt of the explanation of the delinquent Kazi, directed him to submit the marriage certificate records pertaining to his Qazath circle. In the show-cause notice itself he was directed to produce the said records. But he took time to produce the same. After reminders, finally he produced the records of marriage certificate on 6.7.2004. 11. It is submitted that in the meanwhile the Inspector of Police, Chandrayangutta was requested to furnish copies of documents said to have been seized during investigation in the criminal case registered against the said Arab Shaik. Btu the Police authorities did not furnish any such records. Finally, it is learnt that the said Haseena Begum has withdrawn her criminal complaint against the said Arab Shaik in the concerned Magistrate and the case is also ended in acquittal. 12. It is submitted that on receipt of the explanation and records submitted by the said delinquent Kazi, summons were taken out against Haseena Begum, her father Sk.Mahaboob and two witnesses who were present at the time of marriage of Haseena Begum. But they refused to receive the same and therefore again summons were sent by registered post with acknowledgment due. This time also they refused to receive the registered post letters." With the developments indicated in the above paragraphs, the proceedings ought to have been dropped. However, he has taken up himself, the task of verification of several marriages performed by the petitioner and his Naib Kazi. He intended to verify the genuinety of marriages identified by him, and issued notices to the parties. Either they have declined to receive notices, or they did not turn up. The ultimate findings of the Enquiry Officer are as under: "26. The statement showing the marriages performed by the Qazath office of the delinquent Kazi is submitted to show the disparity of ages between the bride and bridegroom to draw an inference that the delinquent Kazi and his Naib Kazis are indulging in such activities. More over, taking advantage of the sole monopoly of the delinquent as Kazi for performance of marriages of Shafai Uroob, the delinquent Kazi is performing the marriages of young girls with aged Arab Shaiks apparently for unlawful gain. Findings:- Considering the overall situations and circumstances enumerated above, it is found that there is a prima facie case against the Kazi and the charges are held proved. Further, the activities of the delinquent Kazi amounts to explanation of the poor Muslim girls and proves that the delinquent is guilty of lapses stated to have been committed by him. Therefore, his continuance as Kazi for Shafai Uroob further will ruin the lives of may more poor Muslim girls. In view of the aforesaid submissions, it is recommended that the services of Sadar Kazi namely Qazi Habeeb Abdullah Refai may be terminated and work may be distributed among the other Kazis of the respective areas." On the basis of the report of the Enquiry Officer, the 1st issued a show-cause notice to the petitioner and an explanation was submitted, thereto. He requested the 1st respondent, to supply the material relied upon by the Enquiry Officer, in coming to the conclusion. The concluding portion of the G.O.Ms.No.11, dated 2.4.2005 reads as under: "10. In reply to Govt.Memo dated 29.12.2004, Sri Qazi Habeeb Abdullah Rifai (under susp4ension) in his application dated 31.12.2004, has requested the Govt. again to furnish all the material relied upon by the Enquiry Officer for coming to a conclusion within (7) days and also requested to extend the time by (3) more weeks for giving reply to the show cause notice dated 6.12.2004 issued by the Government. 11. From the above mentioned fact, it is clear that instead of submitting his explanation the delinquent Kazi is asking to furnish the material to submit his explanation though all the relevant facts were earlier mentioned in the Show Cause Notice duly supplying a copy of Enquiry Officer's report. The delinquent Kazi is writing to the Government time and again to furnish some information/material with an intention to delay the action to be taken against him. Other than this reason, it is evident that he has no explanation to offer against the charges and hence the charges framed against him are held proved. 12. Therefore, in exercise of the powers conferred under Section 2 of the Khazis Act, 1880 (ACT XII of 1880) the Govt. of A.P. hereby removes Sri Habeeb Abdullah Rifai from the post of Kazi, Shafai Uroob of Hyderabad." From the above, it is clear that several procedural lapses were committed by the 1st respondent, as well as the Enquiry Officer. None of them were clear as to the allegations against the petitioner. The woman, whose marriage the petitioner performed, did not submit any complaint, alleging any lapses on the part of the petitioner. She did not figure as a witness. The record discloses that she has withdrawn the criminal complaint filed by her in the police station. With that, the very basis for initiation of proceedings, against the petitioner, disappeared. The Enquiry Officer did not confine himself to any aspect, and proceeded according to whims and fancies. He collected lot of material, behind the back of the petitioner, and not a single witness was examined. When the petitioner requested the 1st respondent to furnish material relied upon by the Enquiry Officer, he took exception to his request, and had chosen to remove the petitioner from the post of Kazi. From the above, it is clear that the petitioner did not violate any duties and functions assigned to him as Kazi, and that the G.O.Rt.No.11, dated 2.4.2005, removing him from the post of Kazi, is illegal and arbitrary, and violative of principles of natural justice. The writ petition is accordingly allowed. There shall be no order as to costs. ?1 1978 (2) ALT 295

arbitration act ,= referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons."

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION NO.11 OF 2011 Denel (Proprietary Limited) ...Petitioner VERSUS Govt. of India, Ministry of Defence ... Respondent O R D E R SURINDER SINGH NIJJAR, J. 1. The petitioner has filed the present application under Sections 11(4) and (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') read with paragraph 2 of the appointment of the Arbitrators by the Chief Justice of India Scheme, 1996. It is stated that a contract was entered into between - 1 - the parties for the supply of Base Bleed Units. Initially the quantity to be supplied was 42,000 units. Later on, the quantity was increased to 52,000 units as per Clause 20 of the agreement. By 5th January, 2005, the petitioner had supplied substantial quantity of the goods. However, some of the goods supplied by the petitioner were rejected by the respondent. The petitioner, thereafter, informed the respondent that two more lots were ready for discharge on 17th March, 2005. However, Union of India never responded to the letter, hence, loss and damage has been caused to the petitioner. In April, 2005, after various discussions, the petitioner came to know that improper fuzes were used by the Union of India which led to the problem that occurred in the lots which were rejected. Thereafter, on 21st April, 2005, Union of India put on hold all contracts. Further, on 14th May, 2008, Union of India sent a notice seeking refund of amount of US $ 23,20,240, failing which legal action was to issue. - 2 - 2. The disputes having arisen between the parties, efforts were made to resolve the same. The details of the efforts made are narrated in the petition. Since the disputes could not be resolved through mutual discussions, the DGOF appointed one Mr. A.K. Jain, Additional General Manager, Ordnance Factory, Ambajhari, Nagpur as an arbitrator in terms of Clause 19(F) of the contract, which reads as under:- "All the disputes and difference arising out of or in any way touching or concerning the agreement (matters for which the decision of a specific authority as specified in the contract shall be final under this agreement, shall not be subject to arbitration) shall be referred to the sole arbitration of the Director General, Ordnance Fys. Govt. of India for the time being or a Government servant appointed by him. The appointee shall not be a Govt. Servant who had dealt with the matters to which this agreement relates and that in the course of his duties as Govt. Servant has had not expressed views on all or any of the matter is in dispute or difference. In case the appointed Govt. Servant in place of the incumbents." 3. The petitioner objected to the appointment of the Arbitrator. The petitioner apprehended that the arbitrator would be favorably inclined towards the employer. Therefore, on 23rd January, 2009, the petitioner issued a notification under Section 14 of the - 3 - Arbitration Act stating that the mandate of the arbitrator had been terminated. Since inspite of the aforesaid notification, the arbitrator continued with the arbitration proceedings, the petitioner moved the Principal District Court, Chandrapur and filed Civil Misc. Application No. 45 of 2009 under Section 14(2) of the Act. On 21st December, 2010, the Principal District Court, Chandrapur terminated the mandate of the Sole Arbitrator with the observation that the arbitrator has been biased in favour of respondent No.1. A direction was also issued in the following terms:- "Director General, Ordnance Factory, Government of India, is appointed as an Arbitrator or he may appoint Government servant as an Arbitrator , as per Clause 19(F) of February 2004 contract and 19(E) of November 2004 contract, after following due procedure." 4. It is an admitted fact that pursuant to the aforesaid directions, within 30 days, DGOF did not himself commence the arbitration proceedings; nor did he appoint any Government servant as an arbitrator. The petitioner has, therefore, moved the present petition under Section 11(6) of the Act on 2nd of March, 2011 seeking appointment of an independent arbitrator. The petitioner claims - 4 - that the directions issued by the District Court are without any authority or jurisdiction and as such void ab initio. According to the petitioner, the direction of the learned District Judge is based upon an incorrect interpretation of Section 15 of the Act, whereby the learned Judge assumed the authority to appoint an arbitrator, which is beyond her jurisdiction. The Act does not make provision for the appointment of an arbitrator other than in accordance with the arbitration agreement and in the limited circumstances provided for in Section 11. The petitioner also claims that the DGOF would be disqualified to act as an arbitrator as the dispute is against the Government of India and particularly against the Ordnance Factory, Ministry of Defence. If the Director General, Ordnance Factory, Government of India (DGOF) or a Government servant is appointed as an arbitrator, he shall always be bound by the directions/instructions issued by his superior authorities and, therefore, such an arbitrator would not be in a position to independently decide the dispute between the parties. According to the petitioner, such an appointment would be contrary to the - 5 - provisions of Section 12 of the Act. The petitioner further claims that the DGOF has already through his actions in the dispute between the parties demonstrated his lack of independence and impartiality. The learned District Judge in her judgment alluded to the fact that the DGOF without receiving any request for referral of the dispute between the petitioner and the respondent colluded with the previous arbitrator to appoint him as an arbitrator without any notice to the petitioner. The petitioner further claims that the DGOF has been directly involved in the dispute as would be evident from the correspondence between the petitioner and the respondent. The petitioner thereafter makes a reference to the letter dated 30th June, 2008 wherein the DGOF took the view that the petitioner is liable to replace the rejected Base Bleed units, as alleged by the respondent, making specific reference to the correspondence in which respondent stated its claim against the petitioner and cancelled the contract with the petitioner. The petitioner further claims that the DGOF has failed to appoint the arbitrator either as directed by the learned District Judge or in - 6 - accordance with Section 15 of the Act within 30 days of the order dated 21st December, 2010. Therefore, the respondent has forfeited the right to make an appointment from the date of the filing of the petition. 5. The respondent has controverted the plea put forward by the petitioner by way of a detailed counter affidavit. It is claimed by the respondent that the petition under Section 11(6) of the Act is not maintainable, as Mr.Satyanarayana has been appointed as a substitute arbitrator on 16th March, 2011. The petitioner was duly notified about the appointment of the arbitrator in its letter dated 26th March, 2011. The petitioner was requested to forward its claim within 10 days. The petitioner was informed that if such a claim does not reach by 8th April, 2011, the arbitrator will presume that the petitioner did not have any further claim. Upon receipt of that letter, the petitioner objected to the appointment of a new arbitrator by its letter dated 15th April, 2011, as being contrary to clause 19(F). The petitioner has wrongly claimed that since the - 7 - appointment of the arbitrator was not made prior to the filing of the petition under Section 11(6), the respondent has forfeited the right to make the appointment. 6. I have heard the learned counsel for the parties. 7. On the basis of facts narrated above, Mr. Naphade submits that the petitioner has forfeited its right to appoint the arbitrator. In support of the submission, he relied on the judgments of this Court in the case of Datar Switchgears Ltd. Vs. Tata Finance Ltd. & Anr.1 , Punj Lloyd Ltd. Vs. Petrone t MHB Ltd.2 and Yashwith Constructions (P) Ltd. Vs. Simplex Concrete Piles India Ltd. & Anr. 3 8. On the other hand, Mr. Raval, appearing for the Union of India has submitted that the petitioner has failed to make out a case for not appearing before the arbitrator appointed pursuant to the order 1 2000 (8) SCC 151 2 2006 (2) SCC 638 3 2006 (6) SCC 204 - 8 - of the Principal District Court, Chandrapur on 21st December, 2010. He submits that the respondents have willingly accepted the appointment of the earlier arbitrator in accordance with the arbitration clause. Therefore, they can have no justification to challenge the appointment of the present arbitrator, who has only been appointed as the mandate of the earlier arbitrator had been terminated by the orders of the Court. The petitioner was duly informed about the appointment of the arbitrator on 16th March, 2011. The arbitrator had intimated both the parties about the appointment and had requested them to submit their respective claims within a period of 10 days. It was only at that stage that the petitioner wrote a letter dated 15th April, 2011 stating that the appointment of the arbitrator was in violation of arbitration clause. Mr. Raval further submitted that in the present circumstances, the matter is squarely covered against the petitioner by the judgment in the case of Indian Oil Corporation Limited & Ors. Vs. Raja Transport Private Limited4 . On the basis of the aforesaid judgment, the learned counsel submitted that the present petition 4 (2009) 8 SCC 520 - 9 - under Section 11(6) is misconceived, as the Sole Arbitrator has been appointed in terms of the agreed procedure contained in Clause 19 (F) and (E). 9. I have considered the submissions made by the learned counsel. In my opinion, Mr. Naphade is correct in his submission that the matter is squarely covered by the judgment in Datar Switchgears Ltd. (supra), wherein this Court has observed as follows:- 19." So far as cases falling under Section 11(6) are concerned -- such as the one before us -- no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 - 10 - seeking appointment of an arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator under Section 11(6) is forfeited." The aforesaid ratio has been reiterated in Punj Lloyd Ltd. (supra). 10. In the facts and circumstances of this case, it would not be possible to accept the submission of Mr. Raval that the present petition filed by the petitioner under Section 11(6) of the Act is not maintainable. On the admitted facts, it is evident that the mandate of the earlier arbitrator Mr. Arun Kumar Jain was terminated by the orders passed by the Principal District Court, Chandrapur in Civil Misc. Application No. 45 of 2009 by order dated 21st December, 2010. A perusal of the aforesaid order would show that the petitioner had challenged the validity of Clause 19(F). The aforesaid submission was rejected by the Court with the observation that the same cannot be the subject matter which could be resolved in a - 11 - petition under Section 14(2) of the Act. The petitioner was given an opportunity to challenge the clauses in an appropriate forum. The District Judge, however, accepted the submission of the petitioner that there are justifiable reasons to indicate that the arbitrator has not acted fairly. Hence the mandate of Mr. A.K. Jain as the Sole Arbitrator was terminated. In accordance with Section 15(2) of the Act, DGOF was appointed as an arbitrator. He was also given an option to appoint Government servant as an arbitrator as per the arbitration clause. It is a matter of record that DGOF did not act himself as an arbitrator, pursuant to the aforesaid order of the Principal District Judge, Chandrapur dated 21st December, 2010. Mr. Satyanarayana, the subsequent arbitrator, had not been appointed till 16th March, 2011. The present petition was moved on 2nd March, 2011. Therefore, the respondents had clearly forfeited their right to make the appointment of an arbitrator. Consequently, the appointment of Mr. Satyanarayana, as an arbitrator, by letter dated 16th March, 2011 cannot be sustained. - 12 - 11. Mr. Naphade then submits that in the peculiar facts and circumstances of this case, the respondent cannot now be permitted to insist that the Court should appoint an arbitrator only in terms of the agreed procedure. In support of this submission, he emphasised that DGOF can not act as an arbitrator as the same will be against the principles of natural justice, as no one can be a judge in his own cause. He further submitted that even if any government employee is appointed as an arbitrator, he will not be in a position to act against the Union of India as he will be obliged to follow the instructions of the superiors. He placed reliance on Bharat Sanchar Nigam Limited & Anr. Vs. Motorola India Priva te Limited5 . It is not possible to accept the submissions of Mr. Naphade. This Court in the case of Indian Oil Corporation Limited (supra) has considered such a submission and observed that :- "Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties. If a party, with open eyes and full knowledge and comprehension of the relevant provision enters into a contract with a Government/statutory 5 2009 (2) SCC 337 - 13 - corporation/public sector undertaking containing an arbitration agreement providing that one of its Secretaries/Directors shall be the arbitrator, he cannot subsequently turn around and contend that he is agreeable for settlement of the disputes by arbitration, but not by the named arbitrator who is an employee of the other party. It is now well settled by a series of decisions that arbitration agreements in government contracts providing that an employee of the Department (usually a high official unconnected with the work of the contract) will be the arbitrator, are neither void nor unenforceable. All the decisions proceed on the basis that when senior officers of Government/statutory corporations/public sector undertakings are appointed as arbitrators, they will function independently and impartially, even though they are employees of such institutions/organizations." In my opinion, the aforesaid observations are a complete answer to the submission made by Mr. Naphade. 12. Learned senior counsel then submitted that even if the arbitration clause is held to be valid, Mr. Satyanarayana still can not be permitted to continue with arbitration as the petitioner has a strong apprehension that he is biased in favour of the respondents. In support of the submission, the learned senior counsel has relied on the various notices issued by the arbitrator which were - 14 - invariably received after the expiry of the time fixed by the arbitrator. In support of his submission, he relied on a judgment of this Court in the case of Denel (Proprietary) Limited Vs. Bharat Electronics Limited & Anr.6 . 13. Replying to the apprehension of bias pleaded by Mr. Naphade, it is submitted by Mr. Raval that non-receipt of the letters in time can not possibly give rise to an apprehension that Mr. Satyanarayana is in any manner biased against the petitioner. He submits that the reliance of the petitioner on the judgment in Denel (Proprietary) Limited (supra) is also misconceived as the aforesaid judgment was confined to the facts of that particular matter. He, therefore, submits that the Court ought to follow the agreed procedure and not to interfere with the appointment of Mr. Satyanarayana as the arbitrator. In the alternative, he submits that even if the appointment of Mr. Satyanarayana is held to be invalid, the matter has to be left to the DGOF to either act as an arbitrator himself or to appoint an officer appointed by him. 6 2010 (6) SCC 394 - 15 - 14. It is true that in normal circumstances while exercising jurisdiction under Section 11(6), the Court would adhere to the terms of the agreement as closely as possible. But if the circumstances warrant, the Chief Justice or the nominee of the Chief Justice is not debarred from appointing an independent arbitrator other then the named arbitrator. 15. A Three Judge Bench of this Court in the case of Northern Railway Administration, Ministry of Railway, New Delhi Vs. Patel Engineering Company Limited7 , considered the scope and ambit of Section 11(6) of the Act, as divergent views were taken in two decisions of this Court in Ace Pipeline Contracts (P) Ltd. Vs. Bharat Petroleum Corpn. Ltd.8 and Union of India Vs. Bharat Battery Manufacturing Co. (P) Ltd. (supra). Upon consideration of the relevant provisions it was inter-alia observed as follows:- "A bare reading of the scheme of Section 11 shows that the emphasis is on the terms of the agreement being 7 2008 (10) SCC 240 8 2007 (5) SCC 304 - 16 - adhered to and/or given effect as closely as possible. In other words, the Court may ask to do what has not been done. The Court must first ensure that the remedies provided for are exhausted. It is true as contended by Mr. Desai, that it is not mandatory for the Chief Justice or any person or institution designated by him to appoint the named arbitrator or arbitrators. But at the same time, due regard has to be given to the qualifications required by the agreement and other considerations." 16. Keeping in view the observations made above, I have examined the facts pleaded in this case. I am of the opinion that in the peculiar facts and circumstances of this case, it would be necessary and advisable to appoint an independent arbitrator. In this case, the contract is with Ministry of Defence. The arbitrator Mr. Satyanarayana has been nominated by DGOF, who is bound to accept the directions issued by the Union of India. Mr. Satyanarayana is an employee within the same organization. The attitude of the respondents towards the proceeding is not indicative of an impartial approach. In fact, the mandate of the earlier arbitrator was terminated on the material produced before the Court, which indicated that the arbitrator was biased in favour of the Union of India. In the present case also, Mr. Naphade has - 17 - made a reference to various notices issued by the arbitrator, none of which were received by the petitioner within time. Therefore, the petitioner was effectively denied the opportunity to present his case before the Sole Arbitrator. Therefore, the apprehensions of the petitioner can not be said to be without any basis. 17. It must also be remembered that even while exercising the jurisdiction under Section 11(6), the Court is required to have due regard to the provisions contained in Section 11(8) of the Act. The aforesaid section provides that apart from ensuring that the arbitrator possesses the necessary qualifications required of the arbitrator by the agreement of the parties, the Court shall have due regard to other considerations as are likely to ensure the appointment of an independent and impartial arbitrator. Keeping in view the aforesaid provision, this Court in the case of Indian Oil Corporation Limited (supra), whilst emphasizing that normally the Court shall make the appointment in terms of the agreed procedure has observed that the Chief Justice or his designate may deviate - 18 - from the same after recording reasons for the same. In paragraph 45 of the aforesaid judgment, it is observed as follows:- "45. If the arbitration agreement provides for arbitration by a named arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Admn.10, where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent arbitrator in accordance with Section 11(8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons." (emphasis supplied) 18. The material placed before the Court by the petitioner would indicate that it would not be unreasonable to entertain the belief that the arbitrator appointed by the respondent would not be - 19 - independent. That being so, the appointment of Mr. Satyanarayana can not pass the test under Section 11(8) of the Act. 19. Similarly, applying the test laid down in Indian Oil Corporation Ltd. (supra), this Court in the case of Denel (Proprietary) Limited (supra) also observed that the Managing Director, Bharat Electronics Limited, which is a Government company is bound by the directions/instructions issued by his superior authority. The Court also observed that according to the pleaded case of the respondents, though it was liable to pay the amount due under the purchase order, it was not in a position to supply the dues only because of the direction issued by the Ministry of Defence, Government of India. Therefore, the Court concluded that the Managing Director may not be in a position to independently decide the dispute between the parties. Consequently, the Court proceeded to appoint an independent arbitrator. - 20 - 20. In my opinion, the circumstances in the present case are similar and a similar course needs to be adopted. In view of the above, the petition is allowed. 21. In exercise of my powers under Section 11(4) and (6) of the Arbitration and Conciliation Act, 1996 read with Paragraph 2 of the Appointment of Arbitrator by the Chief Justice of India Scheme, 1996, I hereby appoint Hon. Mr. Justice Ashok C. Agarwal, Retd. Chief Justice of the Madras High Court, R/o No. 20, Usha Kiran, 2nd Pasta Lane, Colaba, Mumbai-400 005, as the Sole Arbitrator, to adjudicate the disputes that have arisen between the parties, on such terms and conditions as the learned Sole Arbitrator deems fit and proper. Undoubtedly, the learned Sole Arbitrator shall decide all the disputes arising between the parties without being influenced by any prima facie opinion expressed in this order, with regard to the respective claims of the parties. - 21 - 22. The registry is directed to communicate this order to the Sole Arbitrator forthwith to enable him to enter upon the reference and decide the matter as expeditiously as possible. ...............................J. [Surinder Singh Nijjar] New Delhi; January 09, 2012. - 22 -