Custom, Excise & Gold (Control) = In order to avail of MODVAT/CENVAT credit, an assessee has to satisfy the assessing authorities that the capital goods in the form of components, spares and accessories had been utilized during the process of manufacture of the finished product. Admittedly, in this case the appellant was not able to identify the machinery for which the goods in question had been used. In the absence of such identification, it was not possible for the assessing authorities to come to a decision as to whether MODVAT credit would be given in respect of the goods in question.”- It is also not in dispute that the appellant had purchased some machinery from others and such machinery had not even been unpacked by it and in the exact condition it had been transported along with the machinery manufactured by it to Vietnam. Thus, the appellant did not use the purchased machinery in its premises or in its factory and therefore, necessary condition incorporated in the Rules for availing credit of the MODVAT had not been complied with. To avail the MODVAT credit, the input on which excise duty is paid must be used in the manufacture of the final product in the factory of the assessee. The machinery purchased by the appellant had not even been tested or was not even unwrapped in the factory of the appellant. In case of such an admitted fact, it cannot be said that the machinery so purchased from others was used by the appellant in the manufacture of the sugar plant. 25. In the instant case, the appellant had only acted as a trader or as an exporter in relation to the machinery purchased by it, which had been exported and used for setting up a sugar plant in a foreign country. In any case, it cannot be said to have manufactured that plant in its factory. Moreover, it is also clear that the appellant-assessee did not pay any excise duty on the sugar plant set up by it in Vietnam and therefore, there cannot be any question of availing any MODVAT credit. 27. For the aforestated reasons as well as for the reasons stated by the Tribunal in the impugned order, we are of the view that the Tribunal had come to a correct conclusion and the conclusion so arrived at by the Tribunal does not require any interference. 28. The appeals are, therefore, dismissed with no order as to costs.

                               published in    http://judis.nic.in/supremecourt/imgst.aspx?filename=40718                         
  NON-REPORTABLE





                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


                    1 CIVIL APPEAL NOS.5509-5510 OF 2003




M/S. KCP Ltd.                                      .....APPELLANT



                                VERSUS


Commissioner of Central Excise,
Chennai                                      ....RESPONDENT



                              1 J U D G M E N T




1 ANIL R. DAVE, J.



1.    Being aggrieved by the Final Order Nos. 301 & 302/2003 dated 2.5.2003
passed  by  the  Custom,  Excise  &  Gold  (Control)   Appellate   Tribunal
(hereinafter referred to as ‘the CEGAT’), South Zonal Bench,  Chennai,  the
instant two civil appeals have been filed by  the  appellant-assessee.   As
facts of both the appeals are similar, these have been  heard  and  finally
decided together.


2.    The circumstances in which the appeals have arisen,  in  a  nutshell,
are as under:

          The appellant-assessee is a manufacturer of  machinery  for  sugar
    and cement plants and parts thereof falling under  Chapter  84  of  the
    Central Excise Act, 1944.  The appellant not only  sets  up  sugar  and
    cement manufacturing plant as per the specifications of the clients  in
    India but also sets up such plants in foreign countries and here we are
    concerned with a plant which was set up in Vietnam.


3.    The appellant-assessee entered into a contract with M/s  Vina  Sugars,
Vietnam for supply and installation of a  sugar  plant  at  Vietnam  with  a
capacity of 1250 TCD (Tons crushed per  day).  For  the  said  purpose,  the
appellant had manufactured certain machines in its own  factory  which  were
to form part of the sugar plant and certain  machinery,  including  electric
cables etc., which were necessary  for  the  plant  were  purchased  by  the
appellant from other dealers-manufacturers and the said machines-equipments-
cables etc., which had been purchased from others,  along  with  appellant’s
manufactured items, had been put in a  container  and  the  containers  were
transported to Vietnam so that the different parts of the machinery  can  be
assembled and the plant can be set up at Vietnam.

4.    In the course of its business, the appellant had  availed  the  MODVAT
credit on certain goods under the provisions of Rule 57  Q  of  the  Central
Excise Rules, 1944 (hereinafter referred to as ‘the Rules’)  declaring  them
as ‘capital goods’ which had been purchased  by  the  appellant  from  other
manufacturers-dealers in the country and had  sent  to  Vietnam  along  with
other parts of machinery manufactured by the appellant.

5.    The respondent-department was of  the  view  that  the  MODVAT  credit
availed by the  appellant  on  goods,  parts  of  machinery  &  cables  etc.
purchased by it from local market and transported in a container along  with
other parts of machinery manufactured  by  it  was  not  justified  for  the
reason that the  appellant  had  wrongly  described  such  parts-equipments-
cables etc. as ‘capital goods’ though the said goods were not covered  under
the definition of ‘capital goods’ under the provisions of Rule 57 Q  of  the
Rules.  The department was of the view that none  of  such  purchased  items
had been used by the appellant  in  its  factory  premises  in  relation  to
manufacture of the final product manufactured by the appellant.

6.    For the afore-stated reasons,  show  cause  notices  dated  29.03.1996
and 03.03.1997 were issued to the  appellant,  which  had  been  dropped  on
considering the reply of the appellant. Upon review of  the  orders  whereby
the show cause notices had been dropped, the Central  Board  of  Excise  and
Customs directed the Commissioner to file an appeal  before  the  CEGAT  and
therefore, the Commissioner filed the appeals.

7.    It was mainly submitted in the appeals on  behalf  of  the  department
that the goods in respect of which the MODVAT  credit  was  availed  by  the
appellant, were not capital goods as per the provisions of Rule 57Q  of  the
Rules.  It was also submitted that such goods were not used in  the  factory
premises of the appellant in any manufacturing process  and  therefore,  the
said goods were not capital goods as claimed by the appellant.  It was  also
the case of the department that the said goods  had  been  exported  by  the
appellant along with parts of machinery manufactured by the appellant  in  a
container and the said parts i.e. the parts purchased by the  appellant  had
been exported in the same condition i.e. even without opening  the  packages
or testing them.  Thus, the role of the appellant was merely like  a  trader
who had purchased certain goods including parts of  machinery,  cables  etc.
from dealers in our country and thereafter exported the same  in  the  exact
condition in special containers along with  the  machinery  manufactured  by
it.

8.    The department was also of the view that the parts of machinery  which
had been exported by the appellant  could  not  have  been  said  to  be  in
Completely Knocked Down condition because  the  parts  manufactured  by  the
appellant and the parts purchased by the appellant  from  other  dealers  in
the country had never been assembled in the  appellant’s  factory  and  they
were exported in the same condition as stated hereinabove and  it  was  also
pertinent to note that the parts so purchased were packed in such a  way  so
as to keep the parts in good condition even after  it  is  transported  from
India to Vietnam by sea.

9.    The department was also of the view that the  parts  so  purchased  by
the appellant could not have been treated  even  as  ‘inputs’  as  the  said
parts had not been used by the appellant in  the  process  of  manufacturing
the machinery.  The appeals were heard  by  the  CEGAT  and  ultimately  the
CEGAT allowed the appeals by remanding the cases to the  original  authority
for computing and confirming the amount of  the  MODVAT  credit  irregularly
availed by the appellant and also  for  imposition  of  appropriate  penalty
after affording  effective  opportunity  of  hearing  to  the  appellant  in
accordance with law.

10.   Being aggrieved by the afore-stated orders  passed  by  the  CEGAT  in
Final Order Nos. 301 & 302 of 2003, the present appeals have been  filed  by
the appellant.

11.   The learned senior counsel appearing for the appellant  had  submitted
that the impugned orders passed by the CEGAT are bad in  law  as  the  CEGAT
did not appreciate the facts and law correctly.

12.   He had submitted that the MODVAT credit availed by the  appellant  was
just and proper and therefore, there was no question  of  re-calculating  or
recovering the amount of the MODVAT credit availed by the appellant.

13.   He thereafter submitted that upon correct interpretation of  Rule  57Q
read with Rule 57A of the Rules, the goods in respect of  which  the  MODVAT
credit was availed by the appellant were ‘capital goods’.   The  reason  for
making such a submission was that the appellant was to set up a sugar  plant
at Vietnam and for that purpose parts of machinery including electric  cable
etc. were purchased by the appellant  and  along  with  parts  of  machinery
manufactured by the appellant, the parts so purchased by the  appellant  had
been put in one container which had been then transported to Vietnam by  sea
so as to enable the appellant to set up a sugar plant there.

14.   He had further submitted that the  parts  of  machinery  so  purchased
were to form part of the entire plant, which was set up by the appellant  at
Vietnam and therefore, it was to be treated as inputs  or  part  of  capital
goods and therefore, the appellant  had  rightly  claimed  and  availed  the
MODVAT credit.

15.   He had further submitted that the entire sugar machinery plant was  to
be sent to Vietnam in Completely Knocked Down condition.  After  receipt  of
the complete  machinery  in  Vietnam,  the  plant  was  to  be  set  up  and
therefore, even the machinery which had  been  purchased  by  the  appellant
from other manufacturers or  dealers  and  which  had  been  transported  to
Vietnam by sea was  part  of  the  inputs.   In  the  circumstance,  without
considering whether the plant set up in Vietnam was  movable  or  immovable,
the respondent authorities ought to have given the  benefit  of  the  MODVAT
credit to the appellant.

16.   According to the learned counsel for the appellant,  the  whole  sugar
machinery was cleared from  the  factory  in  unassembled  or  dis-assembled
condition.  In view thereof, it was not open to the  respondent  Authorities
to contend  that  parts  of  machinery  which  had  been  purchased  by  the
appellant from other manufacturers would not form part of the inputs.

17.   To  substantiate  his  submissions,  the  learned  counsel  had  cited
several judgments.
18.   The learned Additional Solicitor General  appearing  for  the  Revenue
had repeated all submissions made before the Tribunal and  therefore,  I  do
not repeat the same here.

19.   Upon hearing the learned counsel appearing for  both  sides  and  upon
perusal of the relevant facts and legal position, we are of  the  view  that
the Tribunal had rightly come to the conclusion that the appellant  was  not
entitled to the MODVAT credit as prayed for.

20.   We find much substance in what  has  been  observed  by  the  Tribunal
while coming to the conclusion that the MODVAT credit could  not  have  been
granted to the appellant.

21.   It is pertinent to note that  the  most  important  object  concerning
grant of the MODVAT credit is to see  that  cascading  effect  of  the  duty
imposed on the final product cleared at the time of  sale  is  removed.   If
some duty is levied on the inputs, raw  materials  etc.  and  if  the  final
product is also dutiable, then the duty levied on inputs i.e. raw  materials
is to be reduced from the duty ascertained  on  the  final  product.   Thus,
there are two conditions for getting the MODVAT credit benefit:
              i) On the raw materials i.e. on the inputs,  the  manufacturer
                 must have paid duty and such raw material  must  have  been
                 used in the process of manufacturing the final  product  in
                 his factory or premises.


             ii) Excise duty must have been levied on the final product.  If
                 there is no duty levied on the final product,  there  would
                 not be any question of grant of any relief because in  that
                 case there would not be any cascading effect  on  the  duty
                 imposed.


22.   Looking at the above stated clear legal position,  one  may  see  here
that no duty was paid by the appellant on the  final  product  i.e.  on  the
sugar plant which had been set up  in  Vietnam.   For  time  being,  let  us
forget the fact whether the  plant  is  movable  or  immovable  –  the  fact
remains that no duty was paid on the said plant and therefore,  there  would
not be any question with regard to getting credit on the duty  paid  on  the
inputs,  especially  when  the  appellant  had  not   used   the   machinery
manufactured  by  other  manufacturers  in  its   factory   premises   while
manufacturing machinery which had  been  transported  along  with  machinery
manufactured by the appellant in a common container which had been  sent  to
Vietnam by sea.

23.   In our opinion, the  above  stated  reason  is  quite  sufficient  for
denying any MODVAT credit to the appellant. While  dealing  with  a  similar
issue, this Court had observed in para no.15 of the  judgment  delivered  in
the case of Madras Cements Ltd. v. CCE, 2010 (6) SCC 606 as under:

      “15.  In order to avail of MODVAT/CENVAT credit, an  assessee  has  to
      satisfy the assessing authorities that the capital goods in  the  form
      of components, spares and accessories had  been  utilized  during  the
      process of manufacture of the finished product.  Admittedly,  in  this
      case the appellant was not able to identify the  machinery  for  which
      the goods  in  question  had  been  used.   In  the  absence  of  such
      identification, it was not possible for the assessing  authorities  to
      come to a decision as to whether  MODVAT  credit  would  be  given  in
      respect of the goods in question.”




      Looking to the above legal position, in our view, the impugned  orders
passed by the Tribunal cannot be said to be incorrect.


24.   It is also not in  dispute  that  the  appellant  had  purchased  some
machinery from others and such machinery had not even been  unpacked  by  it
and in the exact condition it had been transported along with the  machinery
manufactured by it  to  Vietnam.   Thus,  the  appellant  did  not  use  the
purchased machinery in  its  premises  or  in  its  factory  and  therefore,
necessary condition incorporated in the Rules for  availing  credit  of  the
MODVAT had not been complied with. To avail the MODVAT credit, the input  on
which excise duty is paid must be used  in  the  manufacture  of  the  final
product in the factory of the assessee.   The  machinery  purchased  by  the
appellant had not even been tested or was not even unwrapped in the  factory
of the appellant.  In case of such an admitted fact, it cannot be said  that
the machinery so purchased from others was used  by  the  appellant  in  the
manufacture of the sugar plant.

25.   In the instant case, the appellant had only acted as a  trader  or  as
an exporter in relation to the machinery purchased by  it,  which  had  been
exported and used for setting up a sugar plant in  a  foreign  country.   In
any case, it cannot be said to have manufactured that plant in its  factory.



26.   Moreover, it is also clear that the  appellant-assessee  did  not  pay
any excise duty on the sugar plant set up by it in  Vietnam  and  therefore,
there cannot be any question of availing any MODVAT credit.

27.   For the aforestated reasons as well as for the reasons stated  by  the
Tribunal in the impugned order, we are of the view  that  the  Tribunal  had
come to a correct conclusion  and  the  conclusion  so  arrived  at  by  the
Tribunal does not require any interference.

28.   The appeals are, therefore, dismissed with no order as to costs.




........................................J.
                                                         (H.L. DATTU)



                                       .....................................
                                       ...J.
                                                         (ANIL R. DAVE)

New Delhi
September 03, 2013
-----------------------
12

2G Spectrum case.=whether two orders passed by this Court on 11.04.2011 and 09.11.2012 in Civil Appeal No.10660 of 2010, in exercise of powers conferred on this Court under Articles 136 and 142 of the Constitution of India, while monitoring the investigation of 2G related cases, are liable to be recalled, de hors the rights guaranteed to the Petitioners to invoke the jurisdiction of this Court under Articles 32 and 136 of the Constitution of India, if aggrieved by the orders passed by the Special Court dealing with 2G Spectrum case.= No Court, other than the Court seized with the trial, has the power to monitor the proceedings pending before it. Order dated 11.4.2011 only facilitates the progress of the trial by ordering that the trial must proceed on a day-to-day basis. Large backlog of cases in the Courts is often an incentive to the litigants to misuse of Court’s system by indulging in unnecessary and fraudulent litigation, thereby delaying the entire trial process. Criminal justice system’s procedure guarantees and elaborateness sometimes give, create openings for abusive, dilatory tactics and confer unfair advantage on better heeled litigants to cause delay to their advantage. Longer the trial, witnesses will be unavailable, memories will fade and evidence will be stale. Taking into consideration all those aspects, this Court felt that it is in the larger public interest that the trial of 2G Scam be not hampered. Further, when larger public interest is involved, it is the bounden duty of all, including the accused persons, who are presumed to be innocent, until proven guilty, to co-operate with the progress of the trial. Early disposal of the trial is also to their advantage, so that their innocence could be proved, rather than remain enmeshed in criminal trial for years and unable to get on with their lives and business. 29. We fail to see how the principle laid down by this Court in A.R. Antulay’s case (supra) would apply to the facts of these cases. We have found no error in the orders passed by this Court on 11.04.2011 or on 09.04.2012. Therefore, the question of rectifying any error does not arise. On the other hand, as we have already indicated, the purpose and object of passing those orders was for a larger public interest and for speedy trial, that too on day-to-day basis which has been reflected not only in the various provisions of the PC Act, 1988 but also falls within the realm of judicial accountability. 30. We also find no reason to lay down any guidelines as prayed for by the petitioners in a Court monitored investigation. In a Court monitored investigation, as already pointed out the Court is not expected to interfere with the trial proceedings. The conduct of the trial is the business of the trial judge and not the court monitoring the investigation. A superior court exercising the appellate power or constitutional power, if gives a direction to conduct the trial on day-to-day basis or complete the trial in a specific time by giving direction is not interfering with the trial proceedings but only facilitating the speedy trial, which is a facet of Article 21 of the Constitution of India. That being the factual situation in these cases, the principle laid down by this Court in Rajiv Ranjan Singh “Lalan” VI and another v. Union of India and others (2006) 1 SCC 356, Brij Narain Singh v. Adya Prasad (2008) 11 SCC 558 and Ankul Chandra Pradhan (supra), are not applicable. 31. We, therefore, find no good reason either to frame guidelines to be followed by a constitutional court in relation to monitoring of criminal investigation or any legal infirmity in the orders passed by this Court on 11.04.2011 or 09.04.2012. Writ Petitions lack merits and they are accordingly dismissed, so also IA Nos.59, 61, 63 and 68 in Civil Appeal No.10660 of 2010.

                          published in         http://judis.nic.in/supremecourt/imgst.aspx?filename=40716                           
   REPORTABLE



                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                      WRIT PETITION (C) NO.548 OF 2012


Shahid Balwa                                       …Petitioner

                                   Versus

Union of India and others                                …Respondents

                                    With

           WRIT PETITION (C) NO.550, 551, 552 OF 2012, 17 of 2013,
                                     and
                        I.A. Nos.59, 61, 63 and 68 IN
                        CIVIL APPEAL NO.10660 OF 2010



      J U D G M E N T


K.S. Radhakrishnan, J.


1.     We are, in these cases, called upon to examine the  question
whether
two orders passed by this  Court  on  11.04.2011  and  09.11.2012  in  Civil
Appeal No.10660 of 2010, in exercise  of  powers  conferred  on  this  Court
under Articles 136 and 142 of the Constitution of  India,  while  monitoring
the investigation of 2G related cases, are liable to be  recalled,  de  hors
the rights guaranteed to the Petitioners to invoke the jurisdiction of  this
Court under Articles 32 and 136 of the Constitution of India,  if  aggrieved
by the orders passed by the Special Court dealing with 2G Spectrum case.


2.    Civil Appeal No.10660 of 2010, in  which  the  above-mentioned  orders
have been passed, was filed under Article 136 of the Constitution  of  India
by special leave,  praying  for  a  Court  monitored  investigation  by  the
Central Bureau of Investigation (CBI) or by  a  Special  Investigating  Team
into what was described as the 2G Spectrum Scam and also for a direction  to
investigate the role  played  by  A.  Raja,  the  then  Union  Minister  for
Department of Telecommunications (DoT), senior officers of  DoT,  middlemen,
businessmen and others.  Before this Court, it was pointed out that the  CBI
had lodged a first information report on  21.10.2009  alleging  that  during
the years 2000-2008 certain officials of the DoT  entered  into  a  criminal
conspiracy  with  certain  private  companies  and  misused  their  official
position in the grant of Unified Access Licenses causing  wrongful  loss  to
the nation, which was estimated to be more than  Rs.22,000  crores.     CBI,
following that, registered a case  No.RC-DAI-2009-A-0045(2G  Spectrum  Case)
on 21.10.2009 under Section 120B IPC, 13(1)(d)  of  the  PC  Act  against  a
former Cabinet Minister and others.


3.     Before  this  Court  parties  produced  large  number  of  documents,
including the Performance Audit Report (Draft and  Final)  prepared  by  the
Comptroller and Auditor General of India (CAG) on the issue of  licence  and
allocation  of  2G  Spectrum  by  DoT,  Ministry   of   Communications   and
Information and Technology for  the  period  from  2003-2004  to  2009-2010.
Report of the CAG, was submitted to the President of India, as  per  Article
151 of the Constitution of India.  The Central  Vigilance  Commission  (CVC)
also conducted an inquiry  under  Section  8(d)  of  the  Central  Vigilance
Commission Act, 2003 and  noticed  grave  irregularities  in  the  grant  of
licences.  The CVC on 12.10.2009 had forwarded the  enquiry  report  to  the
Director, CBI to investigate into  the  matter  to  establish  the  criminal
conspiracy in the allocation of 2G Spectrum under UASL policy of DoT and  to
bring to book all wrongdoers.


4.    After taking into consideration of all those  factors,  including  the
report of the CVC as well as the findings recorded by the  CAG,  this  Court
agreed for a Court monitored investigation and held as follows:


      “We are, prima facie, satisfied that the allegations contained in  the
      writ petition and the affidavits filed before this  Court,  which  are
      supported not only by the documents produced by  them,  but  also  the
      report of the Central Vigilance Commission, which was forwarded to the
      Director, CBI on 12.10.2009 and the findings recorded by  the  CAG  in
      the  Performance  Audit  Report,  need  a   thorough   and   impartial
      investigation.   However,  at  this  stage,  we  do  not  consider  it
      necessary to appoint a Special Team to investigate what the appellants
      have described as 2G Spectrum Scam because  the  Government  of  India
      has, keeping in view the law laid down in  Vineet  Narain’s  case  and
      others  passed  in  other  cases,  agreed  for   a   Court   monitored
      investigation.”


5.    This Court, with a view to ensure  a  comprehensive  and  co-ordinated
investigation  by  the  CBI  and  the  Enforcement  Directorate,  gave   the
following directions vide its order dated 16.12.2010:
           i)    The CBI shall conduct thorough investigation into  various
              issues high-lighted in the report of  the  Central  Vigilance
              Commission, which was forwarded to  the  director,  CBI  vide
              letter dated 12.10.2009 and the report of the CAG,  who  have
              prima facie found serious  irregularities  in  the  grant  of
              licences to 122 applicants, majority of whom are said  to  be
              ineligible, the blatant violation of the terms and conditions
              of licences and huge loss to  the  public  exchequer  running
              into several thousand crores.  The CBI should also probe  how
              licences  were  granted  to  large   number   of   ineligible
              applicants and who was responsible for the same and  why  the
              TRAI and the DoT did not take action against those  licensees
              who sold their stake/equities for many  thousand  crores  and
              also against those who failed to fulfill rollout  obligations
              and comply with other conditions of licence.
          ii)     The CBI shall conduct  the  investigation  without  being
              influenced by any functionary, agency or  instrumentality  of
              the State and irrespective of the position, rank or status of
              the person to be investigated/probed.
         iii)    The CBI shall, if it  has  already  not  registered  first
              information  report   in   the   context   of   the   alleged
              irregularities committed in the grant of licences  from  2001
              to 2006-2007,  now  register  a  case  and  conduct  thorough
              investigation with particular emphasis on the loss caused  to
              the  public  exchequer  and   corresponding   gain   to   the
              licensees/service providers and also on the issue of allowing
              use of dual/alternate technology by  some  service  providers
              even before the decision was made public vide  press  release
              dated 19.10.2007.
          iv)    The CBI shall also make investigation into the  allegation
              of grant of huge loans by the public sector and  other  banks
              to some of the companies which have  succeeded  in  obtaining
              licences in 2008 and find out whether the officers of the DoT
              were signatories  to  the  loan  agreement  executed  by  the
              private companies and if so, why and  with  whose  permission
              they did so.
           v)    The Directorate of Enforcement/ concerned agencies of  the
              Income Tax  Department  shall  continue  their  investigation
              without any hindrance or interference by any one.
          vi)    Both the agencies, i.e. the CBI  and  the  Directorate  of
              Enforcement shall  share  information  with  each  other  and
              ensure that the investigation is not hampered in  any  manner
              whatsoever.
         vii)    The Director General, Income  Tax  (Investigation)  shall,
              after completion  of  analysis  of  the  transcripts  of  the
              recording made pursuant to the approval accorded by the  Home
              Secretary, Government of India, hand over the same to CBI  to
              facilitate  further  investigation  into  the   FIR   already
              registered or which may be registered hereinafter.”

6.    CBI and the Enforcement Directorate then used to  apprise  this  Court
of the various stages  of  investigation  and  this  Court,  on  10.02.2011,
passed  an  order  stating  that  since  this  Court   is   monitoring   the
investigation of 2G Spectrum Scam no court shall pass any order  which  may,
in any manner, impede the investigation being carried out  by  the  CBI  and
the Directorate of Enforcement.


7.    Learned Attorney General of India, it was pointed out, had written  to
the Law Minister on the issue of creation  of  separate  Special  Court  for
dealing with the cases relating to 2G Scam and, for the  said  purpose,  the
Law Minister, in turn, had written to the Chief Justice of  the  Delhi  High
Court seeking nomination of a Special Court for the said  purpose.   Learned
Attorney  General  submitted  before  this  Court  on  16.03.2011  that  the
Registrar General of the High Court of Delhi had conveyed  its  decision  to
nominate Shri O.P. Saini, an officer of the Delhi Higher  Judicial  Service,
as the Special Judge to take up the trial of  cases  relating  to  what  has
been described as 2G Scam.  The Court was also informed  that  two  separate
notifications would be issued by the Central Government in terms of  Section
3(1) the PC  Act,  1988  and  Section  43(1)  of  the  Prevention  of  Money
Laundering Act, 2002 for establishment of the Special Court  to  exclusively
try the offences relating to 2G Scam and other related offences.   Following
that, two notifications dated 28.03.2011 were published in  the  Gazette  of
India Extraordinary on Monday, the 28th March, 2011.


8.    The CBI submitted before this Court on 01.04.2011 that a  notification
had been issued under Section 6 of the Delhi  Police  Establishment  Act  by
the State Government for entrusting the case  relating  to  death  of  Sadiq
Batcha to the CBI and the CBI had indicated that  it  had  no  objection  to
take up the investigation.  The CBI also submitted before this Court that  a
Special Public Prosecutor had to be appointed  to  lead  and  supervise  the
prosecution of the case relating to the  2G  Scam  for  which  the  CBI  had
suggested the name of Shri U.U. Lalit, senior advocate of this Court.


9.    The CBI, after completion of  the  investigation  in  the  main  case,
noticed the commission of various other offences during  2007-09  punishable
under Sections 120-B, 420, 468, 471 of  IPC  against  the  accused  persons,
namely, Shri A. Raja and others and the following substantive offences  were
stated to have been made out against the following accused persons:
      “a)  Sh. A. Raja, then MOC&IT – the offence punishable u/s  420,  468,
      471 IPC & 13(2) r/w 13(1)(d) PC Act, 1988.


      b)   Sh. Siddartha Behura, then Secretary, Department of Telecom-  the
      offence punishable u/w 420 IPC & 13(2) r/w 13(1)(d) PC Act, 1988.


      c)  Sh. R.K. Chandolia, then PS to MOC&IT- the offence punishable  u/s
      420 IPC & 13(2) r/w 13(1)(d) PC Act.


      d)    Sh. Shahid Usman Balwa, Director, M/s Swan  Telecom  Pvt.  Ltd.;
      Sh. Vinod Goenka, Director, M/s Swan Telecom Pvt. Ltd.  and  M/s  Swan
      Telecom Pvt. Ltd. (now M/s Etisalat DB Telecom Pvt. Ltd)  through  its
      Director – offences punishable u/s 420/468/471 IPC.


      e)    Sh. Sanjay Chandra, Managing Director, M/s Unitech Ltd. and  M/s
      Unitech Wireless (Tamil Nadu) Pvt. Ltd. through its Director –offences
      punishable u/s 420 IPC.


      f)   Sh. Gautam Doshi, Group Managing Director,  Reliance  ADA  Group,
      Sh. Hari Nair, Senior Vice President  of  Reliance  ADA  Group  &  Sh.
      Surendra Pipara, Senior Vice President of Reliance  ADA  Group  &  M/s
      Reliance Telecom Ltd. through its Director – offences punishable under
      section 109 r/w 420 IPC.”


10.   The CBI, on the basis of  the  investigation  conducted,  submitted  a
charge-sheet against the above-mentioned persons/companies before a  Special
Judge on 02.04.2011 and Special  Judge  took  cognizance  of  the  aforesaid
offences on the same day.

11.   This Court undertook the monitoring of the investigation  in  view  of
the prayers made by the appellants and the request made by  the  prosecution
agency and the Government of India,  having  regard  to  the  larger  public
interest involved and the necessity of a proper investigation and also  with
the ultimate object of unearthing the crime.

12.   Counsel appearing for the CBI suggested to this Court,  on  11.4.2011,
the name of Shri U.U.  Lalit,  senior  advocate,  for  the  conduct  of  the
criminal prosecution in the case on  behalf  of  the  CBI  as  well  as  the
Directorate of Enforcement and the Court on that date inter alia ordered  as
follows:
      “We also make it clear that any objection about appointment of Special
      Public Prosecutor or his assistant advocates or any prayer for staying
      or impeding the progress of the Trial can be  made  only  before  this
      Court and no other Court shall entertain the  same.   The  trial  must
      proceed on a day-to-day basis.


      All these directions are given by this Court in exercise of its  power
      under Article 136 read with Article 142 of the Constitution and in the
      interest of holding a fair prosecution of the case.”


13.   We found, in spite of the order passed by  this  Court  on  11.04.2011
that no Court should entertain  any  prayer  for  staying  or  impeding  the
progress of the trial, large  number  of  writ  petitions  were  seen  filed
before the Delhi High Court praying for stay of  the  trial  proceedings  on
one or the other ground.  The CBI noticing that entertaining of those  cases
would violate the order  passed  by  this  Court  on  11.04.2011,  filed  an
application before this Court for summoning the  records  of  Writ  Petition
(Criminal) No.1587 of 2012, Writ Petition (Criminal) No.1588 of  2012,  Writ
Petition (Criminal) No.913 of  2012,  Writ  Petition  (Criminal)  No.111  of
2012, Writ Petition (Criminal) No.207  of  2012,  Writ  Petition  (Criminal)
No.1478 of 2012, Writ Petition (Criminal) No.1751  of  2012,  Writ  Petition
(Criminal) No. 1752 of 2012, Writ Petition  (Criminal)  No.  1754  of  2012,
Writ Petition (Criminal) No.206 of 2012, Writ Petition  (Criminal)  No.  159
of 2012, Writ Petition (Criminal) No. 208 of 2012, Criminal  M.C.  No.  4197
of 2011, Criminal M.C. No.67 of 2012, Writ  Petition  (Criminal)  No.129  of
2012, Writ Petition (Criminal) No.656 of  2012,  Criminal  M.C.  No.4199  of
2011, Writ Petition (Criminal) No.467 of 2012 and Criminal M.C.  No.1060  of
2012 pending before the Delhi High Court and also prayed  for  stay  of  all
the proceedings of these cases.


14.   This Court felt entertaining those cases by the Delhi High  Court,  at
this stage, would violate the order  passed  by  this  Court  on  11.4.2011,
passed an order on 09.11.2012 staying those proceedings pending  before  the
Delhi High Court.


15.   Shri  Ram  Jethmalani,  learned  senior  counsel,  appearing  for  the
petitioner in Writ Petition (C) No.548 of 2012, prayed for recalling  orders
dated 11.04.2011 and 09.11.2012  on  the  ground  that  those  orders  would
violate the rights guaranteed to the petitioners under Section  482  of  the
Cr.P.C. and Articles 226 and 227 of the Constitution  of  India  for  moving
the High Court.     Learned senior counsel also submitted  that  remedy,  if
at all, available under Article 32 is limited  to  safeguarding  the  rights
guaranteed under Part III of the Constitution while the  remedies  available
under Articles 226 and 227 of the Constitution have  a  wider  scope,  which
cannot be taken away by the impugned  orders  passed  by  this  Court  while
monitoring the 2G Scam.


16.   Learned senior counsel also submitted that the  impugned  orders  have
the effect of taking away the power of  the  Court  in  granting  reasonable
adjournments under Section 309 of the Cr.P.C.  and  submitted  neither  sub-
section (4) of Section 4 nor Section 19(3) of the PC Act can take away  that
right of  the  petitioners,  but  has  been  effectively  curtailed  by  the
impugned  orders  passed  by  this  Court.   Learned  senior  counsel   also
submitted that this Court exercising powers under Articles 136  and  142  of
the Constitution, has the power to only monitor the investigation  and  once
the investigation is over  and  charge-sheet  has  been  filed,  this  Court
should leave the matter to  the  trial  court  safeguarding  the  rights  of
parties in questioning the correctness or otherwise of the orders passed  by
the trial Court in appropriate Forums.  Reference was made to  the  decision
of this Court in Rajiv Ranjan Singh ‘Lalan’ (VIII) and Another v.  Union  of
India and others (2006) 6 SCC 613 and Vineet Narain and Others v.  Union  of
India and Another (1996) 2 SCC 199.


17.   Shri Mukul Rohtagi, learned senior counsel, submitted  that  right  to
fair trial is a right guaranteed to the parties under Articles 14 and 21  of
the Constitution of India and the impugned order has the effect of  negating
those rights by shutting out all remedies available  to  the  parties  under
Articles 226 and 227 of the Constitution of India to move  the  High  Court.
Learned senior counsel placed reliance on the  Judgment  of  this  Court  in
A.R. Antulay v. R.S. Nayak and another (1988) 2 SCC 602 and  submitted  that
in appropriate cases this Court has got the  power  to  recall  its  earlier
order in the interest of justice, if it is  satisfied  that  its  directions
will result in the deprivation  of  fundamental  rights  guaranteed  to  the
citizens or any other legal rights.  Placing reliance  on  the  Judgment  of
this Court in L. Chandra Kumar v. Union of India and  others  (1997)  3  SCC
261 and Shalini Shyam Shetty and another v. Rajendra Shankar Patil (2010)  8
SCC 600, learned senior counsel submitted that the  rights  conferred  under
Articles 226 and 227 of the Constitution of India are  the  basic  structure
of the Constitution and the same cannot be taken away by  exercising  powers
under Article 136 and 142 of the Constitution of India.


18.   Shri Harish Salve, learned senior counsel, submitted  that  the  power
of the Court to monitor the criminal  investigation  should  stop  once  the
charge-sheet has been filed, leaving the trial court to proceed  with  trial
in accordance with the law.   In support  of  his  contention  reliance  was
placed on the Judgment of this Court in Jakia Nasim Ahesan  and  another  v.
State of Gujarat and others (2011) 12 SCC 302  and  the  Judgment  in  Ankul
Chandra Pradhan v. Union of India and others (1996) 6 SCC 354.


19.   Shri K.K. Venugopal, learned senior counsel  appearing  for  the  CBI,
submitted that there are no justifiable reasons for recalling  the  impugned
orders since those orders had been passed in the larger public interest  and
that too based on the request made by  the  Government  of  India  virtually
inviting  this  Court’s  intervention  for  monitoring   the   investigation
relating to 2G Scam.    Learned senior counsel referred to  the  CAG  report
as well as the report sent by the CVC to the CBI and  submitted  that  those
reports would highlight  the  magnitude  of  loss  suffered  by  the  public
exchequer, which has been revealed by the  investigation  conducted  by  the
CBI.  Learned senior counsel also submitted that this Court  has  undertaken
monitoring of the investigation due to  the  involvement  of  highly  placed
officers of DoT and the then Union Minister for Telecommunications,  Members
of Parliament, bureaucrats and businessmen.


20.   Learned senior counsel also submitted that this Court,  while  issuing
the orders dated 11.04.2011 or 09.11.2012, has neither interfered  with  the
proceedings pending before the Special Court, nor attempted to supervise  or
investigate the trial proceedings.  On  the  other  hand,  this  Court  only
ensured that the progress of the trial be not impeded and the  trial  should
go on day-to-day basis.  Learned senior counsel  also  submitted  that  this
Court has reserved its powers to entertain any challenge against the  orders
passed by the Special Judge under Articles 136, 32 as well  as  Article  142
of the Constitution and hence, no prejudice is caused to the petitioners.

21.   We may, at the very  outset,  point  out  that  CBI  as  well  as  the
Enforcement Directorate is yet to complete the investigation  of  the  cases
relating to 2G Scam and the case which is being tried by the  Special  Judge
is only one among them, wherein the charge-sheet  has  been  filed  and  the
trial is in progress.  This Court, taking into consideration the  width  and
ambit of the investigation  which  even  spreads  overseas  and  the  larger
public interest involved, passed the orders impugned,  reserving  the  right
of all, including the accused persons, to move this Court  if  their  prayer
would amount to staying or impeding the progress  of  the  trial.   In  case
they have any grievance against the  orders  passed  by  the  Special  Judge
during trial, they are free to approach this Court so that the  progress  of
the trial would  not  be  hampered  by  indulging  in  cumbersome  and  time
consuming  proceedings  in  the  other  Forums,  thereby   stultifying   the
preemptory direction given by this Court for day-to-day trial.

22.    Article 136 read with  Article  142  of  the  Constitution  of  India
enables this Court to pass  such  orders,  which  are  necessary  for  doing
complete justice in any cause or matter pending before it and, any order  so
made, shall be enforceable throughout the territory of India.   Parties,  in
such a case, cannot invoke the jurisdiction under Articles  226  or  227  of
the Constitution of India or under Section 482 Cr.P.C. so  as  to  interfere
with those orders passed by this Court, in exercise  of  its  constitutional
powers  conferred  under  Article  136  read  with  Article   142   of   the
Constitution of India.  Or, else, the parties will move Courts  inferior  to
this Court under Article 226 or Article 227 of the Constitution of India  or
Section 482 Cr.P.C., so as to defeat the very  purpose  and  object  of  the
various orders passed by this Court in  exercise  of  its  powers  conferred
under Article 136 read with Article 142 of the Constitution of India.

PUBLIC INTEREST:
23.   Public Interest compelled this Court to take up the  investigation  in
2G related cases in exercise of its  powers  under  Article  136  read  with
Article 142, that too, on a request made by the Central Government.  CAG  is
stated to be the most important Officer under the Constitution of India  and
his duty, being the guardian of the public Purse,  is  to  see  that  not  a
farthing of it is spent without the authority of  the  Parliament.   Article
149 of the Constitution of India empowers the CAG  to  perform  such  duties
and exercise such powers in relation to the accounts of the  Union  and  the
State and Audit plays an important  role  in  the  scheme  of  Parliamentary
Financial Control  and  it  is  also  directed  towards  discovering  waste,
extravagance and disallow any expenditure  violating  the  Constitution,  or
any Law.  CAG, in its report submitted  to  the  President  of  India  under
Article 151 of the Constitution of India, has commented upon the  manner  in
which the Unified Access Licences were granted and projected that it  caused
wrongful loss to the Government to the tune  of  Rs.1.76  lac  crore.     Of
course, some acrimony had erupted between the  Central  Government  and  the
CAG’s estimate of loss, but it is reported to  be  substantial.    CVC  also
conducted an enquiry under Section 8(d) of the Central Vigilance  Act,  2003
and noticed  grave  irregularities  in  the  grant  of  licences.   CVC,  on
12.10.2009,  had  forwarded  the  enquiry  report  to  that  effect  to  the
Directorate of CBI.

24.   The nation and the people of  this  country  are  seriously  concerned
with the outcome  of  cases  involving  larger  public  interest,  like  one
concerning 2G and this Court, as the guardian of the Constitution,  has  got
the duty and obligation to see that  the  larger  public  interest  and  the
interest of the nation is  preserved  and  protected.   When  larger  public
interest is involved, it is the responsibility of the  Constitutional  Court
to assure judicial legitimacy and accountability.   Public interest  demands
timely resolution of  cases  relating  to  2G  Scam.   Prolonged  litigation
undermines the public confidence and weakens the democracy and rule of  law.


25.   The Parliament, in its wisdom,  has  also  noticed  the  necessity  of
early disposal of cases relating to bribery and  corruption.   Section  4(4)
of the  Prevention  of  Corruption  Act,  1988  reflects  the  will  of  the
Parliament that a Special Judge shall hold the trial of an offence  on  day-
to-day basis, notwithstanding anything contained in  the  Code  of  Criminal
Procedure. Section  19(3)(c)  also  states  that,  notwithstanding  anything
contained in the Code  of  Criminal  Procedure,  no  Court  shall  stay  the
proceedings under the Prevention of Corruption Act on any other  ground  and
no Court shall exercise the powers  of  the  revision  in  relation  to  any
interlocutory  order  passed  in  any  inquiry,  trial,  appeal   or   other
proceedings.   Statutory  provisions  highlight  the  imperative   need   to
eradicate the evils of  bribery  and  corruption.   Larger  public  interest
should have precedence over the prayers of the petitioners, especially  when
this Court has safeguarded their rights and given freedom to  them  to  move
this Court, either under Article 136 or Article 32 of  the  Constitution  of
India.   Article 139A  also  reflects  the  larger  public  interest,  which
enables this Court to  transfer  certain  cases  which  involve  substantial
questions of law, from one High Court to another or to this Court,  in  such
an event, it cannot be contended that the  parties  are  deprived  of  their
rights to adjudicate their grievances under Articles  226,  227  or  Section
482 Cr.P.C., before the High Court.

COURT MONITORED INVESTIGATION

26.   Monitoring of criminal investigation is the function of  investigating
agency and not that of the Court – either of the superior Court  or  of  the
trial Court.  But  unsolved  crimes,  unsuccessful  prosecution,  unpunished
offenders and wrongful convictions bring  our  criminal  justice  system  in
disrepute.  Crores and crores of  tax  payers’  money  is  being  spent  for
investigating crimes in our country since every such  incident  is  a  crime
against the society. When the persons involved in the crime wield  political
power  and  influence,  the  possibility  of   putting   pressure   on   the
investigating agency, which is no more independent in our country,  is  much
more.  Common people will be left with the feeling that they  can  get  away
with any crime which tarnish the image not only of the investigating  agency
but judicial system as well.  Once  investigation  fails,  Court  will  face
with a fait accompli. Proper and uninfluenced investigation is necessary  to
bring about the truth.   Truth  will  be  a  casualty  if  investigation  is
derailed due to external pressure and guilty gets away from the clutches  of
law.


27.   More and more demands  are  now  coming  before  the  Courts  for  its
monitoring of investigation relating  to  crimes  committed  by  influential
persons and persons who have  political  influence,  with  the  apprehension
that they  could  derail  the  investigation.   Courts  in  public  interest
sometime have to take such a course in the  larger  public  interest.   That
burden this Court has discharged in  various  cases  like  Vineet  Narayan’s
case and Gujarat Communal Riot’s  case,  etc.   This  Court  has  taken  the
consistent view that once charge-sheet is submitted  in  the  proper  Court,
the process of Court monitoring investigation comes to an end and it is  for
that Court to take cognizance of the  offence  and  deal  with  the  matter.
But, so far as the present case is  concerned,  we  have  already  indicated
that charge-sheet has been filed only in one among the  various  2G  related
cases.  This Court, while passing the impugned order, only  directed  speedy
trial and, that too, on  a  day-to-day  basis  which  cannot  be  termed  as
interference with the trial proceedings.

28.    We  also,  therefore,  find  no  basis  in  the  contention  of   the
petitioners that the orders dated 11.4.2011 and 9.11.2012  have  the  effect
of monitoring the trial proceedings.
No Court, other than the Court  seized
with the trial, has the power to monitor the proceedings pending before  it.
 Order dated 11.4.2011  only  facilitates  the  progress  of  the  trial  by
ordering that the trial must proceed on a day-to-day basis.   Large  backlog
of cases in the Courts is often an incentive to the litigants to  misuse  of
Court’s system  by  indulging  in  unnecessary  and  fraudulent  litigation,
thereby delaying  the  entire  trial  process.   Criminal  justice  system’s
procedure guarantees and elaborateness sometimes give, create  openings  for
abusive, dilatory tactics and  confer  unfair  advantage  on  better  heeled
litigants to cause delay to their advantage.   Longer the  trial,  witnesses
will be  unavailable,  memories  will  fade  and  evidence  will  be  stale.
Taking into consideration all those aspects, this Court felt that it  is  in
the larger public interest that the  trial  of  2G  Scam  be  not  hampered.
Further, when larger public interest is involved, it is the bounden duty  of
all, including the accused persons, who are presumed to be  innocent,  until
proven guilty,  to  co-operate  with  the  progress  of  the  trial.   Early
disposal of the trial is also to their advantage, so  that  their  innocence
could be proved, rather than remain enmeshed in  criminal  trial  for  years
and unable to get on with their lives and business.


29.   We fail to see how the principle laid  down  by  this  Court  in  A.R.
Antulay’s case (supra) would apply to the facts of  these  cases.   We  have
found no error in the orders passed  by  this  Court  on  11.04.2011  or  on
09.04.2012.  Therefore, the  question  of  rectifying  any  error  does  not
arise.  On the other hand, as we have already  indicated,  the  purpose  and
object of passing those orders was for a  larger  public  interest  and  for
speedy trial, that too on day-to-day basis  which  has  been  reflected  not
only in the various provisions of the PC Act, 1988  but  also  falls  within
the realm of judicial accountability.


30.   We also find no reason to lay down any guidelines  as  prayed  for  by
the petitioners in a Court monitored investigation.  In  a  Court  monitored
investigation,  as  already  pointed  out  the  Court  is  not  expected  to
interfere with the trial proceedings.  The  conduct  of  the  trial  is  the
business of the trial judge and not the court monitoring the  investigation.
 A superior court exercising the appellate power  or  constitutional  power,
if gives a direction to conduct the trial on day-to-day  basis  or  complete
the trial in a specific time by giving direction  is  not  interfering  with
the trial proceedings but only facilitating the speedy  trial,  which  is  a
facet of Article 21 of the Constitution of India.  That  being  the  factual
situation in these cases, the principle laid down by  this  Court  in  Rajiv
Ranjan Singh “Lalan” VI and another v. Union of India and  others  (2006)  1
SCC 356, Brij Narain Singh v. Adya  Prasad  (2008)  11  SCC  558  and  Ankul
Chandra Pradhan (supra), are not applicable.

31.   We, therefore, find no good reason either to frame  guidelines  to  be
followed by a constitutional court in relation  to  monitoring  of  criminal
investigation or any legal infirmity in the orders passed by this  Court  on
11.04.2011  or  09.04.2012.   Writ  Petitions  lack  merits  and  they   are
accordingly dismissed, so also IA Nos.59, 61, 63  and  68  in  Civil  Appeal
No.10660 of 2010.




                                                                …………………………J.
                               (G.S. Singhvi)






                                                                …………………………J.
                                                        (K.S. Radhakrishnan)


New Delhi,
September 3, 2013

Or.VII, rule 11 Rejection of plaint - Pending sec. 80(2) C.P.C. = whether there can be any presumption with regard to grant of the application filed under Section 80(2) of the CPC, even if no order was passed on the said application and whether the Trial Court was justified in dismissing the applications of the appellants filed for rejection of the plaint though the application filed by respondent No.1- plaintiff under Section 80(2) of the CPC was not finally decided.=The High Court noted that I.A. No. I was pending before the Trial Court and yet applications praying for rejection of the plaint had been heard by the Trial Court. The High Court, therefore, presumed that I.A. No. I, filed under Section 80(2) of the CPC, was granted and therefore, the objection with regard to non-compliance of Section 80(1) of the CPC was not justifiable. whether such an application should be granted, the court is supposed to give hearing to both the sides and consider the nature of the suit and urgency of the matter before taking a final decision. By mere filing of an application, by no stretch of imagination it can be presumed that the application is granted. If such a presumption is accepted, it would mean that the court has not to take any action in pursuance of such an application and if the court has not to take any action, then we failed to understand as to why such an application should be filed. It is an admitted fact that no order had been passed on the application filed under Section 80(2) of the CPC. Till a final order is passed granting the said application, in our opinion, the irregularity in filing of the suit continues. If ultimately the application is rejected, the plaint is to be returned and in that event the application filed on behalf of the appellants under Order VII Rule 11 is to be granted. If the application filed under Section 80(2) is ultimately granted, the objection with regard to non issuance of notice under Section 80(1) of the CPC cannot be raised and in that event the suit would not fail on account of non- issuance of notice under Section 80(1) of the CPC. We reiterate that till the application filed under Section 80(2) of the CPC is finally heard and decided, it cannot be known whether the suit filed without issuance of notice under Section 80(1) of the CPC was justifiable. According to the provisions of Section 80(2) of the CPC, the court has to be satisfied after hearing the parties that there was some grave urgency which required some urgent relief and therefore, the plaintiff was constrained to file a suit without issuance of notice under Section 80(1) of the CPC. Till arguments are advanced on behalf of the plaintiff with regard to urgency in the matter and till the trial court is satisfied with regard to the urgency or requirement of immediate relief in the suit, the court normally would not grant an application under Section 80(2) of the CPC. We, therefore, come to the conclusion that mere filing of an application under Section 80(2) of the CPC would not mean that the said application was granted by the trial court. In the aforestated circumstances, we hold that the trial court had wrongly rejected the applications filed by the appellants under Order VII Rule 11 of the CPC. The trial court ought to have heard and decided the application filed under Section 80(2) of the CPC before hearing the applications under Order VII Rule 11 of the CPC. 28. As a result of the above discussion, the appeal is allowed. The impugned judgment delivered by the High Court confirming the order of the Trial Court dated 30th September, 2001 is quashed and set aside. The order of the Trial Court rejecting applications under Order VII Rule 11 is also quashed and set aside. It is directed that the trial court shall first of all decide the application filed by respondent no. 1 under Section 80(2) of the CPC and only after final disposal of the said application, the applications filed by the appellants under Order VII Rule 11 of the CPC shall be decided. 29. The appeal is allowed with no order as to costs.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40715


                                 REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO. 7364  OF  2013
                 (Arising out of SLP (C) No. 10956 of 2005)






Govt. of Kerala & Ors.                       .....Appellants



                                Versus

Sudhir Kumar Sharma & Ors.                      …..Respondents






                               J U D G M E N T


1 ANIL R. DAVE, J.




1.    Leave granted.


2.    Being aggrieved by the judgment delivered in Civil  Revision  Petition
No. 5189 of 2001 dated 20th January, 2005 by the High  Court  of  Karnataka,
this appeal has been filed by the Government of Kerala & other officials.


3.    The facts giving rise to the present litigation, in  a  nutshell,  are
as under:


      Respondent No. 1 has filed a civil suit, being OS No. 11286 of 1998 in
the Court of the Additional City Civil Judge  at  Mayo  Hall  in  Bangalore.
According to respondent no.1, he had been wrongfully detained by  the  State
Authorities and therefore, in the said suit he has prayed that he should  be
awarded Rs.55,00,000/- as damages with interest thereon at the rate of  18%.
 As the suit has been filed against the State, he was  supposed  to  give  a
notice under Section 80 of the Civil  Procedure  Code,  1908  (  hereinafter
referred to as ‘the CPC’) but he had not given the  statutory  notice  under
Section 80 of the CPC in accordance with  law.   In  fact,  the  notice  was
issued by him on 24th  October, 1998 whereas the  suit  had  been  filed  on
28th October, 1998.  At the time  of  filing  the  suit,  he  had  not  even
received acknowledgment from  the  authority  to  whom  he  had  issued  the
notice.  He had not even affixed requisite court fee  stamp  to  the  plaint
when the plaint was filed in the Court.  Respondent No.  1  being  conscious
of the defects in the suit filed by him, had also  filed  two  interlocutory
applications along with the plaint on the date on which the plaint had  been
filed.  An I.A. No. I was filed under the provisions  of  Section  80(2)  of
the CPC seeking leave of the court  to  file  the  suit  without  serving  a
notice under Section 80(1) of the CPC and an I.A. No.  II  was  filed  under
Section 151 of the CPC praying for extension of  time  for  payment  of  the
court fee.


4.    On 29th October, 1998, the I.A. No. II had been granted by the  court,
whereby respondent no. 1 was granted time up  to  28th  November,  1998  for
paying the court fee stamp and the same was paid by him  on  28th  November,
1998 and  therefore,  summons  had  been  issued  on  28th  November,  1998.
Thereafter, hearing had been adjourned from time to time.


5.    In the said suit, I.A. Nos. III & IV  were  filed  on  behalf  of  the
present appellants under Order VII Rule 11 of the CPC praying for  rejection
of the plaint.


6.    The said applications filed by the appellants had been  heard  by  the
Trial Court and ultimately, by an order dated 3rd September, 2001, the  said
applications praying for rejection of the plaint had been rejected.


7.    Being aggrieved by the Order dated 3rd September,  2001,  whereby  the
applications praying for rejection of the  plaint  had  been  rejected,  the
appellants had filed Civil Revision Petition No. 5189  of  2001,  which  was
also rejected by the High Court by an order dated  20th  January,  2005  and
the said order has been challenged by the appellants in this appeal.


8.    The Trial Court had rejected the  I.A.  Nos.  III  &  IV  praying  for
rejection of the plaint for the reason that it did not find any  justifiable
reason for rejecting the plaint.


9.    So far as the High Court is concerned, it came to the conclusion  that
the Trial  Court  was  right  in  rejecting  the  applications  praying  for
rejection of the plaint as there was no  justifiable  reason  for  rejecting
the plaint.  The High Court also came to the  conclusion  that  I.A.  No.  I
filed by respondent No. 1 seeking leave of the Court to  permit  the  filing
of the suit without serving notice under Section 80(1) of the CPC  had  been
presumed to have been  granted  and  therefore,  there  was  no  reason  for
rejecting the plaint.  The High Court also found that the deficit court  fee
stamp had also been paid within the extended period  granted  by  the  Trial
Court.   Thus,  there  was  no  justifiable  objection  to  the  plaint  and
therefore, according to the High Court the decision of the Trial  Court  was
just and proper.


10.   The High Court noted that I.A. No. I  was  pending  before  the  Trial
Court and yet applications praying for rejection  of  the  plaint  had  been
heard by the Trial Court.  The High Court,  therefore,  presumed  that  I.A.
No. I, filed under Section 80(2) of the CPC, was granted and therefore,  the
objection with regard to non-compliance of Section 80(1) of the CPC was  not
justifiable.


11.   In the aforestated circumstances, what  is  to  be  examined  by  this
court is 
whether there can be any presumption with regard to  grant  of  the
application filed under Section 80(2) of the  CPC,  even  if  no  order  was
passed on the said application and whether the Trial Court was justified  in
dismissing the applications of the appellants filed  for  rejection  of  the
plaint though the application filed  by  respondent  No.1-  plaintiff  under
Section 80(2) of the CPC was not finally decided.


12.   The learned counsel appearing for the appellants  had  submitted  that
as no order had been passed on the application filed under Section 80(2)  of
the CPC, it had not been finally disposed of and therefore, the  High  court
was in error in presuming that the said application had been granted.


13.   It had been also  submitted  that  without  deciding  the  application
filed by respondent No.1 under Section 80(2) of the CPC, the Trial Court  as
well as the High Court could not  have  come  to  the  conclusion  that  the
plaint was not liable to be rejected under Order VII Rule  11  of  the  CPC.
It had been further submitted that without deciding  the  application  filed
by respondent  No.1,  the  Trial  Court  should  not  have  even  heard  the
applications filed by the appellants  for  rejection  of  the  plaint  under
Order VII Rule 11 of the CPC.  It had been  thus  submitted  that  the  High
Court as well as the Trial Court had committed a grave error  by  coming  to
the conclusion that the plaint  could  not  have  been  rejected  under  the
provisions of Order VII Rule 11 of the CPC.


14.   So as to substantiate the aforestated submissions made by the  learned
counsel appearing for the  appellants,  he  had  relied  upon  the  judgment
delivered by this Court in the case of State of  A.P.  &  Ors.  vs.  Pioneer
Builders  [(2006)  12  SCC  119].   He  had  drawn  our  attention  to   the
observations made by this court  on  the  requirement  of  giving  statutory
notice to the Government and the  object  of  giving  notice  under  Section
80(1) of the CPC.  He had drawn our attention specifically  to  para  14  of
the aforestated judgment, which reads as under:


      “From a bare reading of sub-section (1) of Section  80,  it  is  plain
      that subject to what is provided in sub-section (2) thereof,  no  suit
      can be filed  against  the  Government  or  a  public  officer  unless
      requisite notice under the said provision  has  been  served  on  such
      Government or public officer, as the case may be. It  is  well-settled
      that before the amendment of Section 80 the provisions  of  un-amended
      Section 80 admitted of no implications and exceptions  whatsoever  and
      are express, explicit and mandatory. The Section imposes  a  statutory
      and unqualified obligation upon  the  Court  and  in  the  absence  of
      compliance with Section  80,  the  suit  is  not  maintainable.  (See:
      Bhagchand Dagdusa Gujrathi & Ors. Vs. Secretary of State for  India  ;
      Sawai Singhai Nirmal Chand Vs. The Union of India and Bihari Chowdhary
      & Anr. Vs. State of Bihar &  Ors.  ).  The  service  of  notice  under
      Section 80 is, thus, a condition precedent for the  institution  of  a
      suit against the Government  or  a  public  officer.  The  legislative
      intent of the Section is to give the Government sufficient  notice  of
      the suit, which is proposed to be filed against  it  so  that  it  may
      reconsider the decision and decide for itself whether the  claim  made
      could be accepted or not. As observed in Bihari Chowdhary (supra), the
      object of the Section is the advancement of justice and  the  securing
      of public good by avoidance of unnecessary litigation.”






15.    Thereafter,  the  learned  counsel  had  relied  upon  the   judgment
delivered in the case of M/s. Bajaj Hindustan  Sugar  &  Industries  Limited
vs. Balrampur Chini Mills Ltd. & Ors. [2007 (9)  SCC  43]  which  also  lays
down law to the effect that a suit may be filed against the Government or  a
public officer without serving notice as required by Section  80(1)  of  the
CPC only with the leave of the court.


16.   He had further submitted that as the suit was defective on account  of
non- compliance of Section 80(1) of the  CPC  and  as  leave  had  not  been
granted by the Trial Court to  respondent  no.  1  plaintiff  under  Section
80(2) of the CPC, the plaint ought to have been rejected by the Trial  Court
and alternatively he had submitted that hearing of applications praying  for
rejection of the plaint filed under the provisions of Order VII Rule  11  of
the CPC should have been postponed till the application filed under  Section
80(2) of respondent No. 1 was finally decided.


17.   On the other hand the learned counsel appearing for  respondent  No.1-
original plaintiff had made an effort to justify the reasons  given  by  the
Trial Court as well as by the High  Court  for  rejecting  the  applications
filed under Order VII Rule 11 of the CPC.


18.   It had been submitted by the learned counsel appearing for  respondent
No. 1 that the High Court was right in presuming that the application  filed
under Section 80(2) of the  CPC  had  been  entertained  and  granted.   The
learned counsel had relied upon  the  judgment  delivered  in  the  case  of
Irappa Basappa Kudachi vs.  State  of  Karnataka  [1996  (2)  Karnataka  Law
Journal 591] wherein it has been held on the facts of the case that even  if
no order is passed on an application filed under Section 80(2) of  the  CPC,
it can be presumed that the said application is granted.


19.   Relying upon the aforestated judgment of the Karnataka High Court,  it
had been submitted by the learned counsel for Respondent  No.1  that  though
no order was passed on the application made under Section 80(2) of the  CPC,
it  was  rightly  presumed  that  the  Trial  Court  had  granted  the  said
application and therefore, there could not  have  been  any  objection  with
regard to filing of the suit in  violation  of  the  provisions  of  Section
80(1) of the CPC.


20.   It had been also  submitted  that  had  the  application  filed  under
Section 80(2) been rejected by the Trial Court, the plaint would  have  been
returned to respondent  No.1-plaintiff  but  as  the  plaint  had  not  been
returned, the presumption would be that the application under Section  80(2)
had been granted.


21.   For the aforestated reasons, the learned  counsel  appearing  for  the
respondents had submitted that  the  appeal  should  be  dismissed  by  this
court.


22.   We have heard the learned counsel at length and have also perused  the
judgments cited by them.


23.   Looking to the facts of the case and the provisions of law, we do  not
agree with the view expressed by the Trial Court as  well  as  by  the  High
Court.


24.   It is  an  admitted  fact  that  no  order  had  been  passed  on  the
application filed under Section 80(2) of the CPC whereby leave of the  court
had been sought for filing the suit without complying  with  the  provisions
of Section 80(1)  of  the  CPC.   In  our  opinion,  a  suit  filed  without
compliance of Section 80(1)  cannot  be  regularized  simply  by  filing  an
application under Section 80(2) of the  CPC.   Upon  filing  an  application
under Section 80(2) of the CPC, the Court is supposed to consider the  facts
and look at the circumstances in which the leave was sought for  filing  the
suit without issuance  of  notice  under  Section  80(1)  to  the  concerned
Government authorities.  For the purpose  of  determining
whether  such  an
application should be granted, the court is  supposed  to  give  hearing  to
both the sides and consider the nature  of  the  suit  and  urgency  of  the
matter before taking a final decision.  By mere filing  of  an  application,
by no stretch of imagination it can be  presumed  that  the  application  is
granted.  If such a presumption is accepted, it would mean  that  the  court
has not to take any action in pursuance of such an application  and  if  the
court has not to take any action, then we failed to  understand  as  to  why
such an application should be filed.


25.   It is  an  admitted  fact  that  no  order  had  been  passed  on  the
application filed under Section 80(2) of the CPC.  
Till  a  final  order  is
passed granting the said application, in our opinion,  the  irregularity  in
filing of the suit continues.  
If ultimately the  application  is  rejected,
the plaint is to be returned and in that  event  the  application  filed  on
behalf of the appellants under Order VII Rule 11 is to be granted.   
If  the
application filed under Section 80(2) is ultimately granted,  the  objection
with regard to non issuance of notice under Section 80(1) of the CPC  cannot
be raised and in that event the suit would  not  fail  on  account  of  non-
issuance of notice under Section 80(1) of the CPC.


26.   We reiterate that till the application filed under  Section  80(2)  of the CPC is finally heard and decided, it cannot be known  whether  the  suit filed without issuance  of  notice  under  Section  80(1)  of  the  CPC  was justifiable.  
According to the provisions of Section 80(2) of the  CPC,  the
court has to be satisfied after hearing the  parties  that  there  was  some grave  urgency  which  required  some  urgent  relief  and  therefore,   the plaintiff was constrained to file a suit without issuance  of  notice  under Section 80(1) of the CPC.  
Till arguments are  advanced  on  behalf  of  theplaintiff with regard to urgency in the matter and till the trial  court  is
satisfied with regard to the urgency or requirement of immediate  relief  in the suit, the court normally would not grant an  application  under  Section 80(2) of the CPC.  
We, therefore, come to the conclusion  that  mere  filing
of an application under Section 80(2) of the CPC would  not  mean  that  the said application was granted by the trial court.


27.   In the aforestated circumstances, we hold that  the  trial  court  had
wrongly rejected the applications filed by the appellants  under  Order  VII
Rule 11 of the CPC.  The trial court ought to have  heard  and  decided  the
application filed  under  Section  80(2)  of  the  CPC  before  hearing  the
applications under Order VII Rule 11 of the CPC.


28.   As a result of the  above  discussion,  the  appeal  is  allowed.  The
impugned judgment delivered by the High Court confirming the  order  of  the
Trial Court dated 30th September, 2001 is quashed and set aside.  
The  order
of the Trial Court rejecting applications under Order VII Rule  11  is  also
quashed and set aside.  
It is directed that the trial court shall  first  of
all decide the application filed by respondent no. 1 under Section 80(2)  of
the CPC  and  only  after  final  disposal  of  the  said  application,  the
applications filed by the appellants under Order VII  Rule  11  of  the  CPC
shall be decided.


29.     The   appeal   is   allowed   with   no   order   as    to    costs.




                                    ………………................................J.

            (ANIL R. DAVE)




                                       ….…….................................
                                       ..........J.

                                                  (DIPAK MISRA)

New Delhi
September 02, 2013
-----------------------
12

M. Padmanabhacharlu - Great Father

Passing Night 

Relieved the life from Great Journey of 85 years 

My Father's soul rest in Great Peace with out bedridden

Great Personality stands for his words and Deeds - Great Father 

My father left behind him adorable Works & adoptable Life Style

• Work till last breathe ;
• Never be burden for yourself ;
• Save your health & life with clean habits ;
• Extend your Love & Affection  to the needy with out expectations ;

His life time Achievement as Organizing Secretary  - "Sri Shivaji Spurthy Kendram " Srisailam        http://shivajikendra.wordpress.com/

God is great  " may his Soul rest in GREAT PEACE "

With regards

                                                                                                                                                 yours

                                                                                                                                                     Advocatemmmohan