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Saturday, January 11, 2014

Service matter Army- Rule 16A of the Army Rules, - Promotion to the rank of Lieutenant General - before retirement post fell vacant - selection board recommended the petitioner -sent for approval of ACC - Appointments Committee of the Cabinet, - delay in approving the promotion - pending approval - retirement time was extended two times by President of India - of lately ACC rejected on the ground that no promotion be given on extention - High court of Madaras and DB of high court dismissed the writ petition - Apex court set aside the orders of ACC and high courts and allowed the writ = Major General H.M. Singh, VSM … Appellant Versus Union of India and Anr. … Respondents = 2014 ( JANUARY - VOL -1) JUDIS.NIC.IN/ S.C./ FILE NAME= 41142

Service matter Army- Rule 16A of the  Army  Rules, - Promotion to the rank of Lieutenant General - before retirement post fell vacant - selection board recommended the petitioner -sent for approval of ACC - Appointments Committee of the  Cabinet, - delay in approving the promotion - pending approval - retirement time was extended two times by President of India - of lately ACC rejected on the ground that no promotion be given on extention - High court of Madaras and DB of high court dismissed the writ petition - Apex court set aside the orders of  ACC and high courts and allowed the writ =

whether  the  non-consideration of the claim of the appellant would  violate  the  fundamental
rights vested in him under Articles 14 and 16 of the Constitution of  India.
We are  therefore
of the view, firstly, that the order allowing extension in  service  of  the
appellant for a period of three  months,  dated  29.2.2008,  and  the  order
allowing further extension in service by one month to the  appellant,  dated
30.5.2008, so as to enable his claim to be considered for  onward  promotion
to the rank of Lieutenant General, cannot be held to be in violation of  the
statutory provisions.  Rule 16A of the Army Rules, postulates  extension  in
service, if the exigencies of service so require.  
The said  parameter  must
have been duly taken into consideration when the Presidential  Orders  dated 29.2.2008 and 30.5.2008 were passed.  
The respondents have neither  revoked,
nor sought revocation of the above orders.  Therefore, it does  not  lie  in
the mouth of the respondents to question the veracity of the  above  orders.
The above orders were passed to ensure due consideration of the  appellant’s
claim for promotion to the rank of Lieutenant  General.   Without  rejecting
the above claim on merits, the appellant was deprived of  promotion  to  the
rank of  Lieutenant  General.   Besides  the  above,  we  are  also  of  the
considered view, that consideration of the promotional claim of  the  senior
most eligible officer, would  also  fall  in  the  parameters  of  the  rule
providing for extension, if the exigencies of service so require.  It  would
be a sad day if the armed forces decline to give effect  to  the  legitimate
expectations of the  highest  ranked  armed  forces  personnel.    
Specially
when,  blame  for  delay  in  such  consideration,  rests  squarely  on  the
shoulders of the authorities themselves.   This  would  lead  to  individual
resentment,  bitterness,  displeasure  and  indignation.   This  could  also
undoubtedly lead to, outrage at the  highest  level  of  the  armed  forces.
Surely, extension of service, for the  purpose  granted  to  the  appellant,
would most definitely fall within the realm of Rule 16A of the  Army  Rules,
unless  of  course,  individual  resentment,  bitterness,  displeasure   and
indignation, of army personnel at the highest level is of no concern to  the
authorities.  Or alternatively, the authorities would like to  risk  outrage
at the highest level, rather than doing  justice  to  a  deserving  officer.
Reliance on Rule 16A, to deprive the appellant of promotion,  to  our  mind,
is just a lame excuse.  Accordingly, extension in  service  granted  to  the
appellant, for all intents and purposes, in our  considered  view,  will  be
deemed to satisfy the parameters of exigency of service, stipulated in  Rule
16A of the Army Rules.

The  denial  of  promotion  to  the  appellant
mainly for the reason, that the appellant was on extension  in  service,  to
our mind, is unsustainable besides being arbitrary, specially in  the  light
of the fact, that  the  vacancy  for  which  the  appellant  was  clamouring
consideration, became available, well before the date of his  retirement  on
superannuation.  We have, therefore, no hesitation in  rejecting  the  basis
on which the claim of the appellant for onward  promotion  to  the  rank  of
Lieutenant General was  declined,  by  the  Appointments  Committee  of  the
Cabinet.

In view of the fact, that we have found the order of rejection of  the
appellant’s claim for promotion to the rank of Lieutenant  General,  on  the
ground that he was on extended service to be invalid, we  hereby  set  aside
the operative part of  the  order  of  the  Appointments  Committee  of  the
Cabinet.  It is also apparent, that the Selection Board had recommended  the
promotion of the appellant on the basis  of  his  record  of  service,  past
performance, qualities of leadership, as well as, vision, out of a panel  of
four  names.   In  its  deliberations  the  Appointments  Committee  of  the
Cabinet, did not record any reason to  negate  the  aforesaid  interference,
relating to the merit and suitability of the appellant.   We  are  therefore
of  the  view,  that  the  appellant  deserves  promotion  to  the  rank  of
Lieutenant General, from the date due  to  him.   Ordered  accordingly.   On
account of his promotion to the post of Lieutenant  General,  the  appellant
would  also  be  entitled  to  continuation  in  service  till  the  age  of
retirement on superannuation stipulated for Lieutenant Generals, i.e.,  till
his having attained the age of 60 years.  As such, the  appellant  shall  be
deemed to have been in service against the rank of Lieutenant  General  till
28.2.2009.  Needless to mention, that the appellant  would  be  entitled  to
all monetary benefits which would have been due to him, on  account  of  his
promotion  to  the  rank  of  Lieutenant  General  till  his  retirement  on
superannuation, as also,  to  revised  retiral  benefits  which  would  have
accrued to him on account of such promotion.  The  above  monetary  benefits
shall be released to the appellant within  three  months  from  the  date  a
certified copy of this order becomes available with the respondents.

26.   Allowed in the aforesaid terms.



2014 ( JANUARY - VOL -1) JUDIS.NIC.IN/ S.C./ FILE NAME= 41142

                                                                “REPORTABLE”

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                   CIVIL APPEAL NO.   192          OF 2014
                  (Arising out of SLP (C) No. 2008 of 2010)


Major General H.M. Singh, VSM                            … Appellant

                                   Versus

Union of India and Anr.                                       … Respondents


                               J U D G M E N T



Jagdish Singh Khehar, J.


1.    The appellant was commissioned as  Second  Lieutenant  in  the  Indian
Army on 15.6.1969.  His initial induction was into the Armoured  Corps.   On
25.5.1983 the appellant changed his cadre.  He permanently  moved  into  the
Defence Research and Development Organisation (hereinafter  referred  to  as
‘the DRDO’).  Having gone through decades of rigorous military  service  and
having consistently earned onward promotions to higher ranks,  as  were  due
to him from time to time, he was granted acting rank  of  Major  General  on
1.6.2004, after he had been approved for promotion  to  the  rank  of  Major
General by a duly constituted Selection Board.

2.    On 31.3.2005 Lieutenant General Ravinder Nath  retired  from  service.
Resultantly a vacancy in the rank of Lieutenant  General  became  available.
On  1.1.2006  the  appellant  claims  to  have  become  eligible   for   the
consideration for promotion to the above vacancy.  It would be  relevant  to
mention, that at  that  juncture,  in  the  cadre  of  Major  Generals,  the
appellant was the senior most serving officer (as per seniority  list  dated
29.12.2006) eligible for promotion to the rank of  Lieutenant  General.   In
the Government of India gazette (published on 6.12.2007) the  appellant  was
shown as having been promoted as substantive Major General with effect  from
7.1.2004.  It would also be relevant  to  mention,  that  the  name  of  the
appellant was included in the name announced by the President of  India  for
the award of the Vishist Seva  Medal  on  26.1.2007.   The  said  award  was
sought  to  be  bestowed  upon  the  appellant,  for  his  having   rendered
distinguished service  of  an  exceptional  order  to  the  nation.   It  is
therefore, that the appellant was desirous, that  his  claim  be  considered
for onward promotion to the rank of Lieutenant General.  At  that  juncture,
the appellant had not only held the  rank  of  Major  General  for  more  18
months, he had also earned two confidential reports in the said  rank.   The
record appended to the pleadings indicates, that he had  also  been  granted
vigilance clearance.  
Despite the above, the appellant  was  not  considered
eligible for promotion to the rank of  Lieutenant  General  as  he  had  not
completed two years’ service in the rank of Major General at that time.

3.    Under the circumstances mentioned in the foregoing paragraph,  AVM  R.
Yadav, an officer from the Indian Air Force was inducted into  the  DRDO  on
29.12.2005, against the vacancy in the rank of  Lieutenant  General  created
by Lieutenant General Ravinder Nath.  AVM  R.  Yadav  retired  from  service
with effect from 31.12.2006.  As such, a vacancy in the rank  of  Lieutenant
General became available with effect from 1.1.2007.

4.     On  30.4.2007,  the  appellant  addressed  a  representation  to  the
Director General DRDO asserting, that he was eligible for promotion  against
the existing vacancy of Lieutenant General, as he fulfilled  the  laid  down
criteria.  He expressly pointed out in his  above  representation,  that  in
the event of his promotion to the rank of  Lieutenant  General  his  age  of
retirement would stand extended.  As Major General he would  retire  at  the
age of 59 years, on 29.2.2008 (as the appellant date of birth is  2.2.1949).
 On his promotion to the rank of Lieutenant General his  age  of  retirement
would stand  extended  to  28.2.2009  i.e.,  to  60  years.   The  appellant
therefore requested the authorities, to immediately constitute  and  convene
a meeting of the Selection Board,  for  considering  his  claim  for  onward
promotion to the rank of Lieutenant General.  For  the  above  purpose,  the
appellant also met various higher authorities.  On  all  such  occasions  he
was informed, that the action to convene a meeting of  the  Selection  Board
was under process.  In fact, in November, 2007 the  appellant  was  assured,
that the meeting of Selection Board would be held  in  December,  2007.   He
was also assured, that in the event of his  being  considered  suitable  for
promotion by the Selection Board, he will actually be promoted to  the  rank
of Lieutenant General, before the date  of  his  retirement  (29.2.2008)  as
Major General.

5.    Since the  date  of  appellant’s  retirement  –  29.2.2008  was  fast-
approaching, and because  it  seemed  to  the  appellant  that  nothing  was
moving,  the  appellant  submitted  his  grievance  to  the  authorities  in
writing, praying for immediate action in the  matter.   
In  this  behalf  he
also sought personal hearing, to present his case.  
These pleas were  raised
by the appellant through separate communications dated  26.12.2007  (to  the
SA to the Defence Minister, and to the DRDO).  On 28.2.2008 he  addressed  a
letter for the same purpose,  to  the  Personal  Secretary  to  the  Defence
Minister.

6.    Two  days  prior  to  the  appellant’s  retirement  on  superannuation
(29.2.2008, as Major General), on  27.2.2008  a  meeting  of  the  Selection
Board for promotion to the rank of Lieutenant  General  was  convened.   The
Selection  Board  cleared  the  appellant  for  promotion  to  the  rank  of
Lieutenant General.  The Selection  Board  cleared  only  the  name  of  the
appellant for the above promotion, from out of a panel of 4 names.

7.    In order to ensure that the appellant’s claim  for  promotion  to  the
rank of Lieutenant General is not frustrated, the President of India  by  an
order dated 29.2.2008, was pleased  to  grant  the  appellant  extension  of
service, for a period of three months.
A  relevant  extract  of  the  above
order is being reproduced hereinunder:
           “I am directed to convey the sanction of the  President  to  the
           grant of extension in service to IC-23289 Maj  Gen  H.M.  Singh,
           VSM, AC, CVRDE, Avadi a permanently seconded officer of  Defence
           Research & Development  Organisation,  for  a  period  of  three
           months with effect from 01 Mar 2008 or till the approval of ACC,
           whichever is earlier.


           This issues with the concurrence of MOD/Fin(R&D) vide  their  Dy
           No. 582/Fin (R&D) dated 29 Feb 2008.”


                                                          (emphasis is ours)

A perusal of the above communication reveals, that the  aforesaid  extension
of service was granted to the  appellant,  to  await  the  approval  of  the
Appointments Committee of the Cabinet.  In this behalf it would be  relevant
to mention, that in the process of consideration for promotion to  the  rank
of Lieutenant General,  the  recommendation  made  by  the  Selection  Board
requires the approval of the Appointments Committee of the  Cabinet,  before
it is given effect to.  It is apparent that the  Appointments  Committee  of
the Cabinet, could not finalise the matter during the  appellant’s  extended
tenure of three months.  As such, for the same  reasons,  the  President  of
India was pleased to grant the appellant a further extension in service  (as
Major General) for a period of one month i.e., up to 30.6.2008 or  till  the
approval of  the  Appointments  Committee  of  the  Cabinet,  whichever  was
earlier.

8.    On 2.6.2008, the Secretariat of  the  Appointments  Committee  of  the
Cabinet (Ministry of Personnel, Public Grievances and  Pensions,  Department
of Personnel  and  Training)  issued  a  communication  with  the  following
observations:
           “2. The Appointments Committee of the Cabinet has  not  approved
           the promotion of IC-23289 Maj  Gen  H.M.  Singh,  a  permanently
           seconded officer of DRDO, to the rank of Lieutenant General.”

In consonance with the order granting extension in service, the DRDO  issued
an order dated 3.6.2008, retiring the  appellant  from  the  rank  of  Major
General with immediate effect.   
The  appellant  assailed  the  above  order
dated 2.6.2008 (denying the appellant promotion to the  rank  of  Lieutenant
General), and the order dated 3.6.2008 (by which the appellant  was  retired
from service) by filing Writ Petition No. 15508  of  2008  before  the  High
Court of  Judicature  at  Madras  (hereinafter  referred  to  as  ‘the  High
Court’).
Convening a meeting of the  Selection  Board  on  27.2.2008  i.e.,
just two days before the appellant was to retire on  attaining  the  age  of
superannuation, as also, the consideration of  the  recommendation  made  by
the Selection Board at the  hands  of  the  Appointments  Committee  of  the
Cabinet, more than three months after the date on which the appellant  would
retire from service, were vigorously referred to, to demonstrate the  apathy
at the hands of the authorities,  which  according  to  the  appellant,  had
resulted in denial of promotion to him.

9.    In response to the alleged delay in  the  matter  of  considering  the
appellant’s claim for promotion, it was pointed out  that  the  DRDO  had  a
large number of high value projects viz. design, development and  production
of Light Combat Aircraft, design and development of  Kaveri  Engine,  design
and development of Airborne Early Warning System and a  number  of  projects
related to upgradation of avionics and electronics warfare  system,  Sukhoi,
MIG-27 and LCA; accordingly a decision was  taken  by  the  DRDO  i.e.,  the
appellant’s controlling authority, to  earmark  the  vacancy  of  Lieutenant
General (against which the appellant was  claiming  consideration),  for  an
officer of equivalent rank from the Indian Air Force,  who  would  be  in  a
position to oversee, provide guidance and coordinate all the  abovementioned
highly sensitive and intricate projects.  The above tentative  determination
for filling up the vacancy of Lieutenant General from the Indian  Air  Force
was, however, subsequently reviewed in consultation with the  Government  of
India.  The Government of India on 14.2.2008 finally decided to fill up  the
vacancy of  Lieutenant  General  by  promotion  of  a  permanently  seconded
service officer of the DRDO.  It was therefore  asserted,  that  non-holding
of the meeting of the Selection  Board,  and  the  non-finalisation  of  the
consideration of  the  appellant’s  claim  for  promotion  to  the  rank  of
Lieutenant General, could not be described as a deliberate  and  intentional
attempt by the authorities to  deprive  the  appellant  of  his  promotional
opportunity.

10.   In its pleadings the Union of India adopt  a  clear  stand,  that  the
appellant having attained the age of superannuation on 29.2.2008, could  not
be promoted as Lieutenant General “while he was on extension”.
It was  also
the contention of the Union of India, that since the Appointments  Committee
of the Cabinet had not approved the appellant’s promotion  to  the  rank  of
Lieutenant General, the same could not be challenged specially  because  the
Appointments Committee of the Cabinet had given valid reasons to  defer  the
recommendation of the Selection Board /  Departmental  Promotion  Committee.
The Union of India acknowledged, that  the  Appointments  Committee  of  the
Cabinet was the  competent  authority  to  approve  the  recommendation  for
promotion to the rank of Lieutenant General (made by the  Selection  Board).
It was admitted, that the Selection Board in its meeting held  on  27.2.2008
had recommended the appellant  for  promotion  to  the  rank  of  Lieutenant
General.  Pending approval of the Appointments  Committee  of  the  Cabinet,
the appellant had crossed the age of his retirement  on  superannuation  (in
the rank of Major General, on 29.2.2008).   Thereafter,  the  appellant  was
granted extension in service beyond the  period  of  his  retirement  up  to
30.6.2008.

11.   Having considered the contentions and prayers made by  the  appellant,
a Single Bench of the High Court while disposing of the  Writ  Petition  No.
15508 of 2008, recorded the following observations:
           “40. When the petitioner’s extension of service was not  on  the
           ground of exigency, DRDO being mainly  civilian,  Rules  do  not
           permit promotion on extension.  ACC’s  action  in  not  granting
           approval to the recommendation made by  Selection  Board  is  in
           accordance with the Rules  and  the  same  cannot  be  assailed.
           Petitioner cannot contend that he has been discriminated in  not
           granting promotion while on extension.


           41. There is no substance in the contention that the  Petitioner
           having been extended his service, he ought to have been  granted
           promotion.   Extension  of  service  does  not  give  rise   the
           legitimate expectation for promotion.  The extensions in  tenure
           were given to the petitioner to ensure that  procedure  relating
           to approval of competent  authority  on  the  recommendation  of
           Selection  Board  was  completed  in  an  objective  manner   by
           following prescribed process.  On culmination of process, ACC is
           the competent authority came to the decision not to promote  the
           petitioner.  As such there is not incoherence and  arbitrariness
           in the decision warranting exercise of judicial review.”

In the light of the above observations Writ Petition No. 15508 of  2008  was
dismissed on 5.5.2009.

12.   Dissatisfied with the dismissal of Writ Petition No.  15508  of  2008,
the appellant filed an intra court Writ Appeal No.  779  of  2009.   In  the
process of adjudicating upon the controversy raised  in  the  abovementioned
Writ Appeal, a Division Bench of the High Court  framed  two  questions  for
its consideration.  
Firstly,
whether the appellant Major General H.M.  Singh
had any  fundamental  right  for  promotion  solely  on  the  basis  of  the
recommendation of the Selection Board.  
And secondly,  
whether  Appointments
Committee of the Cabinet was liable to accept  the  recommendation  made  by
the Selection Board in favour of the appellant, and consequently, order  the
appellant’s promotion  to  the  rank  of  Lieutenant  General.   Relying  on
paragraph 108 of the Regulation of Army which  delineates  the  constitution
and duties of the Selection Board, the Division  Bench  concluded  that  the
recommendations  of  the  Selection  Board  were  merely  recommendatory  in
nature, and therefore, answered the first question  in  the  negative.   The
Division Bench further held, that  a  legitimate  claim  for  the  promotion
would arise, only if a recommendation made by the Selection Board  gets  the
approval of the Appointments Committee  of  the  Cabinet.   Relying  on  the
judgments rendered by this Court in Dr. H. Mukherjee Vs. Union of India  and
others, 1994 Supp. (1) SCC 250, Union of India and others Vs. N.P.  Dhamania
and others, 1995 Supp. (1) SCC 1, and Food Corporation of India  and  others
Vs. Parashotam Das Bansal and others, (2008) 5 SCC 100, the  Division  Bench
of the High Court further concluded, that the Appointments Committee of  the
Cabinet was not bound by the recommendation  of  the  Selection  Board.   It
accordingly held, that for justifiable reasons, the  Appointments  Committee
of  the  Cabinet  had  the  right  to  either  accept,  or  to  refuse   the
recommendation of the Selection Board.  In sum and substance it came  to  be
concluded,  that  unless  it  was  shown  that  the  determination  of   the
Appointments  Committee  of  the  Cabinet  suffered  from  arbitrariness  or
malafides and capriciousness, the same could not be  interfered  with.   The
Division Bench of the High Court having found none of the above noted  vices
in the determination of the Appointments Committee of the Cabinet,  answered
the second question also in the negative.

13.   Based on its aforementioned determination, the  High  Court  dismissed
Writ Appeal No. 779 of 2009, on  21.7.2009.   Dissatisfied  with  the  order
dated 5.5.2009 (passed by the Single Judge of  the  High  Court,  dismissing
Writ Petition No. 15508 of 2009), and the order dated 21.7.2009  (passed  by
the Division Bench of the High Court  dismissing  Writ  Appeal  No.  779  of
2009), the appellant approached this Court by filing  Petition  for  Special
Leave to Appeal (C) No. 2008  of  2010.   On  11.1.2010  this  Court  issued
notice in this matter.  On completion of pleadings  the  matter  was  listed
for final disposal.

14.   Leave granted.

15.   On 29.8.2013 while hearing the matter this Court passed the  following
order:
           “Before we proceed for further hearing in the matter,  we  would
           like  to  go  through  the  deliberations  of  the  Appointments
           Committee of the Cabinet [for short  ‘the  ACC’]  by  which  the
           recommendations of the Selection Board was not accepted  in  the
           case of the petitioner.


           Hence the records of the Selection Board and  the  final  orders
           passed therein in the case of the petitioner  be  placed  before
           the Court on the next date of  hearing,  i.e.,  10th  September,
           2013.”

Thereafter on 12.9.2013 this Court passed the following order:
           “We have perused the record produced before us and we have  also
           heard the arguments of learned Additional Solicitor General”


           Ld. A.S.G. has sought time to seek instructions.


           On the next date, Ld. A.S.G. will ensure that a copy of the note
           put up to the A.C.C. and the decision of A.C.C.  as  well  as  a
           copy of the recommendation dated  27th  February,  2008  of  the
           Selection Board are made available to the Court


           List this matter on 23rd September, 2013.”

The  summoning  of  the  record  referred  to  in   the   orders   extracted
hereinabove, had become essential for two reasons.  Firstly,  the  appellant
did not contest the findings recorded by the  Division  Bench  of  the  High
Court on the two questions framed by the High Court,  for  the  disposal  of
Writ Appeal No. 779 of 2009.  Having given our thoughtful  consideration  to
the determination rendered by the High Court, on the  two  questions  framed
by it, we must acknowledge that  the  High  Court  was  fully  justified  in
drawing its conclusions.  We therefore  hereby  affirm  the  above  findings
recorded by the High Court.  According to the appellant, the High Court  had
misdirected itself in its above determination.  It  was  the  submission  of
the appellant, that the determination of the Appointments Committee  of  the
Cabinet, was not supported by justifiable reasons.  It  was  asserted,  that
the  determination  of  the  Appointments  Committee  of  the  Cabinet   was
arbitrary, and based on extraneous consideration.  Insofar  as  the  instant
aspect of the matter is concerned, it was the  vehement  submission  of  the
appellant, that the High Court had not addressed the issue at all.

16.   The solitary contention advanced at the hands of  the  appellant,  was
based on the recommendation made by the Selection Board  on  27.2.2008,  and
the consideration of the above recommendation by the Appointments  Committee
of the Cabinet (leading to the rejection of the appellant’s  claim  for  the
promotion  to  the   rank   of   Lieutenant   General).    For   effectively
understanding and determining the solitary contention at the  hands  of  the
appellant, it is essential to extract the minutes  of  the  meeting  of  the
Selection  Board  dated  27.2.2008,  as  also,  the   proceedings   of   the
Appointments Committee of the Cabinet.  Without understanding the tenor  and
effect of the above deliberations, it would not be possible to  express  our
findings and the reasons.  Had  the  above  proceedings  revealed  sensitive
material, improper  for  public  consumption,  or  detrimental  to  national
interest, we would have  chosen  to  tread  cautiously.   The  deliberations
which resulted in denial of promotion to  the  appellant  (to  the  rank  of
Lieutenant General), however, have no such misgivings.   We  have  therefore
no hesitation in extracting the minutes of  the  meeting  of  the  Selection
Board dated 27.2.2008.  The same are being reproduced hereinunder:-
                  “MINUTES OF (1/2008) DRDO SELECTION BOARD
                         MEETING HELD ON 27 FEB 2008


                 The Selection Board comprising the following,  met  on  27
           Feb 08 in the office of the Scientific Advisor to Raksha Mantri,
           Room No. 532, DRDO Bhawan, New Delhi:-


           (a)   Shri M. Natarajan, SA to RM           - Chairman
           (b)   Shri Pradeep Kumar, Secretary (DP) - Member
           (c)   Lt. Gen. M.L. Naidu,
                 PVSM, AVSM, YSM, VCOAS     - Member
           (d)   Dr. D. Banerjee,
                 DS &  CC  R&D  (AMS)                     -  Member
           Secretary


           2.    Defence Secretary did not attend the meeting due to  other
           prior commitments.


           3.    SA to RM briefed the Board to say that only one vacancy in
           the rank of Lt. Gen  exists.   The  other  vacancy  in  lieu  of
           Scientist  ‘H’  has  been  referred   back   to   the   RM   for
           reconsideration and therefore will be considered  only  after  a
           decision.


           4.     The  Board  considered  the  following  04  officers  for
           promotion to the acting rank of Lt. Gen:-


           |Ser No. |IC No., Rank, Name & Corps                        |
|(i)     |MR-03539 Maj Gen J.K. Bansal, AMC                 |
|(ii)    |IC-23289 Maj Gen H.M. Singh, VSM, AC              |
|(iii)   |IC-23850 Maj Gen S.S. Dahiya, AVSM, VSM EME       |
|(iv)    |IC-24631 Maj Gen Umang Kapoor, EME                |


           5.  Based  on  deliberations  and  record   of   service,   past
           performance, qualities of leadership  as  well  as  vision,  the
           Board  recommends  IC-23289  Maj  Gen  HM  Singh,  VSM,  AC  for
           promotion.


           Sd/-                                         Sd/-
           DS&CC R&D (AMS)                         VCOAS
           Member Secretary                        Member”

                                                          (emphasis is ours)


The proceedings recorded by the Appointments Committee of the Cabinet  while
rejecting the appellant’s claim for promotion  to  the  rank  of  Lieutenant
General are also being set out below:-
           “The Ministry of Defence has, with the approval  of  the  Raksha
           Mantri proposed the promotion of IC-23289 Maj Gen  HM  Singh,  a
           permanently seconded  officer  of  the  DRDO,  to  the  rank  of
           Lieutenant General.


           2.     Maj  Gen  HM  Singh  (dob:  02.02.1949)   was   due   for
           superannuation on 29th February, 2008 on attaining the age of 59
           years which is the age of superannuation  for  officers  of  the
           rank of Major Generals who are permanently seconded to the DRDO.
            A Selection Board which met on 27th February, 2008 to  consider
           eligible officers of  the  rank  of  Major  General  permanently
           seconded to the DRDO for promotion to  the  rank  of  Lieutenant
           General, recommended Major General Singh for promotion.  As  the
           officer was due for retirement on 29th February,  2008  approval
           of the Raksha Mantri was obtained for giving  him  extension  of
           service of three months in the rank of Major General or till the
           approval of the Appointments Committee of  the  Cabinet  to  his
           promotion to  the  rank  of  Lieutenant  General,  whichever  is
           earlier.  Officers in the rank of Lieutenant General  retire  on
           attaining the age of 60 years.


           3.    The propriety of grant of extension to the officer at  the
           verge of his superannuation and also, that of grant of promotion
           to the officer while on extension has been examined.  The matter
           has  been  discussed,  separately,  with   officers   from   the
           Department of Personnel and Training; the DRDO,  and  also,  the
           Ministry of Defence (Military Secretary’s Branch).  This  apart,
           a legal notice has been received alleging perjury on  the  basis
           of information secured from the Ministry of  Defence  under  the
           Right to  Information  Act.   A  representation  has  also  been
           received  from  an   officer,   Maj   Gen   PP   Das,   alleging
           discrimination.


           4.    In terms of the provisions of Section 16A(4) of  the  Army
           Act an officer who has attained the age  of  retirement  or  has
           become due for such retirement on completion of his tenure,  may
           be retained in the service for a further period by  the  Central
           Government, if the exigencies of the service so require.


           5. It is evident from the above provisions  that  for  grant  of
           extension  in  service,  the  requirement   to   be   fulfilled,
           primarily, is the exigencies of service.  In the note which  was
           put up to the Raksha Mantri soliciting approval to the  proposal
           for grant of extension, no such exigency has  been  cited.   The
           only issue that was mentioned in support  of  the  proposal  for
           extension  was  that  the  officer  had  been  recommended   for
           promotion to the  rank  of  Lieutenant  General.   This  in  the
           background of the provisions of the Act mentioned above,  is  no
           sufficient ground for extension.


           6.    The Chief Controller Research & Development with whom  the
           matter was discussed has provided copies of orders issued in the
           years 1995 and 1996 when officers of the rank of  Major  General
           were granted extensions.  Extensions  in  service  were  granted
           with the approval of the  Integrated  Finance  Division  in  the
           Ministry of Defence though approval of the finance angle is  not
           strictly relevant to the grant of  extensions.   The  other  two
           instances  cited  are  of  Shri  P.   Venugopalan,   Outstanding
           Scientist in the  DRDL,  Hyderabad  who  was  granted  extension
           pending a decision on the  question  of  his  regular  extension
           under  FR.56  as  a  Scientist;  and  of  the  post   retirement
           appointment of Vice Admiral PC Bhasin on contract basis  in  the
           ATVP. These two cases are not relevant to the case  of  Maj  Gen
           Singh, present under consideration.


           7.     An  instance  has  been  cited,  during  discussions,  of
           extension of service granted in the year 1997 or thereabouts  to
           Major General Malik who was  due  for  superannuation,  and  his
           promotion to the rank of Lt. Gen while on extension.


           8.  The  orders  issued  by  the  Department  of  Personnel  and
           Training lay down that  while  extension  could  be  granted  in
           exceptional circumstances, there can be no promotion during  the
           period of such extension.  These orders apply  to  the  civilian
           establishment.  The instructions  which  apply  to  the  Defence
           forces permit extension in service only  if  the  exigencies  so
           demand.  DRDO is mainly civilian, and the  Rules,  as  mentioned
           above, do not permit promotion on extension.


           9.  The above apart, the plea taken the  representation  of  Maj
           Gen P.P. Das, and also the legal notice  needs  to  be  kept  in
           view.  Instances of officers in the Armed Forces  retiring  just
           before  the  vacancies  coming  their  way  and   being   denied
           empanelment are not uncommon.  Extensions motivated  by  reasons
           of promotion being close at hand can have repercussions.


           10.   The above part, the ACR format which is followed  for  the
           officers of this rank, seconded to  the  DRDO,  which  has  been
           applied for recording of ACRs in the present  case  reveal  that
           fitness for promotion should be  specifically  recorded  in  the
           ACr.  A perusal of  the  ACR  of  Maj  Gen  Singh  reveals  that
           specific record of fitness for promotion has not been made.


           11.  More pointedly,  two  questions  stand  out,  firstly,  the
           doubtful authority and grounds for granting  extensions,  taking
           into  account  that  there  was  no  exigency   and,   secondly,
           extensions, motivated by a promotion in the  offing  during  the
           extension period cannot be allowed.  It cannot be  ignored  also
           that such situations trigger litigation, which  should  best  be
           avoided in such instances.


           12.  Under the above circumstances, it would be appropriate  not
           to approve the promotion of Maj Gen H.M. Singh to  the  rank  of
           Lieutenant General.


                                                                        Sd/-
                                                           Cabinet Secretary
                                                                   22.5.2008


           HOME MINISTER    Sd/-
                                  28.5.2008


           PRIME MINISTER has approved Para 12  above  with  the  direction
           that the observation in Paras 5 and 8 may be communicated to the
           MOD for the future.


                                                   Sd/-
                                                   30.5.2008
           Sd/-                                    Director
           Cabinet Secretary                       Prime Minister’s Office
           2.6.2008                                New Delhi”


                                                          (emphasis is ours)




17.   The appellant points out, that the determination of  the  Appointments
Committee of the Cabinet, overlooked the  factual  position  stated  in  the
counter affidavit, filed jointly on  behalf  of  respondent  nos.  1  and  2
(respondent  no.1  –  the  Union  of  India,  through  Secretariat  of   the
Appointments Committee of the Cabinet; and  respondent  no.  2  –  the  DRDO
through its Director General).  In this behalf our attention  was  drawn  to
paragraphs 3 (xvii) and 3 (xviii) which are being extracted below:
           “3 (xvii) A meeting of the Selection Board was held on 27.2.2008
           and the Selection Board recommended the name of  the  petitioner
           for promotion to the rank of Lieutenant General.   The  post  of
           Lieutenant General then carried the pay scale  of  Rs.22400-525-
           24500.  Any appointment against this post requires the  approval
           of Appointments  Committee  of  the  Cabinet  (ACC)  (Respondent
           No.1), which is a high power  body  consisting  of  the  Hon’ble
           Prime Minister of India, Hon’ble Union  Home  Minister,  Hon’ble
           Union Minister of Department  of  Personnel  and  Hon’ble  Union
           Defence Minister.  As such, the recommendation of the  Selection
           Board were sent to ACC.  In  DRDO,  the  retirement  age  of  an
           officer of the rank of Maj Gen/equivalent which  the  petitioner
           held at that time is 59 years.  The petitioner was due to retire
           from service w.e.f 29.2.2008.  Under these circumstances, he was
           given an extension of service for a period of  three  months  or
           till the decision of ACC was received whichever was earlier.  As
           the decision of ACC was not received till 31.5.2008, his service
           was extended further for a period of one month w.e.f 1.6.2008 on
           the same terms and conditions.


           3 (xviii) The decision of ACC (Respondent No.1)  regarding  non-
           approval  of  promotion  of  the  petitioner  to  the  rank   of
           Lieutenant General communicated vide letter dated  2.6.2008  was
           received by respondent no. 2 on 3.6.2008 and the latter  had  to
           issue orders of the petitioner’s retirement  from  service  from
           3.6.2008.”
                                                          (emphasis is ours)


18.   Referring to the  factual  position  depicted  in  the  joint  counter
affidavit filed on behalf of the  respondent  nos.  1  and  2,  it  was  the
vehement submission of the appellant, that  the  Appointments  Committee  of
the Cabinet exceeded its jurisdiction  in  examining  the  validity  of  the
orders by which the appellant was granted extension in service.  It was  the
submission of the appellant, that the only question before the  Appointments
Committee of the Cabinet, consequent upon the recommendations  made  by  the
Selection Board on 27.2.2008, was in  connection  with  the  merits  of  the
claim of the appellant, for promotion to the  rank  of  Lieutenant  General.
Adding  to  the  above  contention,  it  was  also  the  submission  of  the
appellant, that the Selection Board, consequent upon its deliberations  held
on 27.2.2008, arrived at its  findings  based  on  the  appellant’s  service
record, past performance, qualities of leadership, as well as, vision,  that
the appellant was worthy of promotion to the  rank  of  Lieutenant  General.
The Appointments  Committee  of  the  Cabinet,  during  the  course  of  its
deliberations, did not find fault with the above  conclusion  drawn  by  the
Selection Board.  As such, it was sought  to  be  asserted,  that  even  the
Appointments Committee of the Cabinet must be deemed to  have  endorsed  the
merit and suitability of  the  appellant,  for  promotion  to  the  rank  of
Lieutenant General.

19.   In order to contest the submissions  advanced  at  the  hands  of  the
appellant, learned senior counsel representing (respondent  nos.  1  and  2)
emphatically relied upon the proceedings of the  Appointments  Committee  of
the Cabinet.  The proceedings under reference  have  been  extracted  by  us
hereinabove.  Referring to the above  proceedings,  learned  senior  counsel
for the respondents laid great emphasis  on  the  observations  recorded  in
paragraphs 8 and 9 thereof.  It was  pointed  out,  that  in  terms  of  the
orders issued by the Department of Personnel and Training, promotion  during
the period of extension was unquestionably barred.  In this  behalf  it  was
the contention of the learned senior counsel for the respondents, that  with
effect from 1.3.2008, the appellant (who had attained the age of  retirement
on superannuation on 29.2.2008), was on extension in  service.   There  was,
therefore, no question of his being  considered  for  promotion  during  the
period of such extension.  In addition  to  the  aforesaid  categoric  stand
adopted by the learned senior counsel for the respondents, it was sought  to
be reiterated, that the orders dated 29.2.2008 and 30.5.2008, by  which  the
appellant was granted extension in service, for periods of three months  and
one month respectively, were not sustainable in law, inasmuch as, they  were
in violation of Rule 16A  of  the  Army  Rules  which  postulates,  that  an
officers who has attained the age of retirement or has become due  for  such
retirement on completion of his tenure, may be retained  in  service  for  a
further period by the Central Government, only if the exigencies of  service
so require.  It was  the  submission  of  learned  senior  counsel  for  the
respondents, that retention in service of the appellant was not  on  account
of any exigency of service.

20.    We  have  given  our  thoughtful  consideration  to  the  submissions
advanced at the hands of the learned counsel for the rival  parties.   First
and foremost, we have no hesitation in endorsing the submission advanced  at
the hands of the appellant, that the Appointments Committee of  the  Cabinet
did not in any manner upset the finding recorded by the Selection Board,  in
respect of the merit and suitability of the appellant for promotion  to  the
rank of Lieutenant General.  On  the  instant  aspect  of  the  matter,  the
Appointments Committee of the  Cabinet  has  maintained  a  sullen  silence.
Even in the pleadings filed on  behalf  of  the  respondents,  there  is  an
ironic quiescence.  Therefore, all other issues apart,  the  appellant  must
be deemed to  have  been  found  suitable  for  promotion  to  the  rank  of
Lieutenant General, even by the Appointments Committee of the Cabinet.

21.   We have extracted hereinabove the  factual  position  noticed  by  the
respondents in paragraphs 3(xvii) and 3(xviii) of their  counter  affidavit.
If the aforesaid averments are read in conjunction to the factual  position,
that the vacancy against which the claim of the  appellant  was  considered,
had arisen on 1.1.2007, it clearly  emerges,  that  the  appellant  was  the
senior most eligible officer holding the rank of Major  General  whose  name
fell in the zone  of  consideration  for  promotion.   The  Selection  Board
having  conducted  its  deliberations  singularly  chose  the  name  of  the
appellant from the panel of four names before it.  The  proceedings  of  the
Selection Board reveal, that its recommendations were  based  on  record  of
service, past performance, qualities of leadership, as well as, vision.   No
other name besides the  appellant’s  name  was  recommended  for  promotion.
Having been so recommended, the President of India, in the  first  instance,
by an order dated 29.2.2008, extended the service of the appellant, for  the
period of three months with effect from 1.3.2008 “or till  the  approval  of
the ACC whichever is earlier”.  Since  the  Appointments  Committee  of  the
Cabinet  did  not  render  its  determination  within  the  extended  period
expressed in the order dated  29.2.2008,  yet  another  order  to  the  same
effect was issued by the President  of  India  on  30.5.2008  extending  the
service of the appellant for a further period of one month with effect  from
1.6.2008 “or till the approval  of  the  ACC  whichever  is  earlier”.   The
President of India, therefore, was conscious  of  the  fact  while  granting
extension in service to the  appellant,  the  appellant’s  case  for  onward
promotion to  the  rank  of  Lieutenant  General  was  under  consideration.
Therefore, to ensure that the  aforesaid  consideration  fructified  into  a
result one way or the other, extensions were granted to the appellant  twice
over.  The aforesaid determination at the hands of the  President  of  India
in granting extension in service to the appellant,  stands  noticed  in  the
factual position  expressed  in  paragraphs  3(xvii)  and  3(xviii)  of  the
counter affidavit filed on behalf of the respondents 1 and  2.   It  is  not
possible for us to accept, that  the  aforesaid  determination  in  allowing
extension in  service  to  the  appellant  can  be  described  as  being  in
violation of the norms stipulated in Rule 16A of  the  Army  Rules.   It  is
necessary in this behalf, for us to test the above conclusion drawn  by  us,
on the touchstone of Articles 14 and 16 of the Constitution  of  India.   It
is not a matter of dispute, that the appellant was promoted to the  rank  of
substantive Major General with effect from  7.1.2004.   It  is  also  not  a
matter of dispute, that the substantive vacancy in the  rank  of  Lieutenant
General, against which the appellant was eligible for consideration,  became
available with effect from 1.1.2007.  Even though the appellant  had  nearly
14 months of military service  remaining  at  the  aforesaid  juncture,  the
procedure contemplated for making promotions to the rank of  the  Lieutenant
General was initiated for the first time just two days before  the  date  of
retirement of the appellant, on 27.2.2008.  Although it  is  the  contention
of the learned senior  counsel  for  the  respondents,  that  the  delay  in
convening the  Selection  Board  and  conducting  its  proceedings  was  not
deliberate or malafide, yet there can be no doubt about the fact,  that  the
appellant  was  not  responsible  for  such  delay.   For  all  intents  and
purposes, he was repeatedly seeking  consideration  orally  as  well  as  in
writing.  He  had  been  repeatedly  informing  the  authorities  about  the
approaching date of his retirement.  In response,  he  was  always  assured,
that if found suitable, he would be actually promoted prior to the  date  of
his retirement.  It was for the respondents to convene the  meeting  of  the
Selection Board.  Since the Selection Board came  to  be  convened  for  the
vacancy which had arisen on 1.1.2007  only  on  27.2.2008,  the  respondents
must squarely shoulder the blame and responsibility of the above delay.

22.   The question that  arises  for  consideration  is,  whether  the  non-
consideration of the claim of the appellant would  violate  the  fundamental
rights vested in him under Articles 14 and 16 of the Constitution of  India.
 The answer to the aforesaid query would be in the affirmative,  subject  to
the condition, that the respondents were desirous of filling the vacancy  of
Lieutenant General, when it  became  available  on  1.1.2007.  
The  factual
position depicted in the counter affidavit  reveals,  that  the  respondents
indeed were desirous of filling up the said vacancy.
In the above  view  of
the matter, if the appellant was  the  senior  most  serving  Major  General
eligible for consideration (which he undoubtedly was),  he  most  definitely
had the fundamental right of being considered  against  the  above  vacancy,
and also the  fundamental  right  of  being  promoted  if  he  was  adjudged
suitable.
Failing which, he would be deprived of his fundamental  right  of
equality before the law, and equal  protection  of  the  laws,  extended  by
Article 14 of the Constitution of India.
We are of the view,  that  it  was
in order to extend the benefit of  the  fundamental  right  enshrined  under
Article 14 of the Constitution of India, that he was  allowed  extension  in
service  on  two  occasions,  firstly  by  the  Presidential   order   dated
29.2.2008, and thereafter, by a further Presidential order dated  30.5.2008.
 The above orders clearly depict, that the aforesaid  extension  in  service
was granted to the appellant for  a  period  of  three  months  (and  for  a
further period of one month), or till the approval of the ACC, whichever  is
earlier.
By the aforesaid orders, the  respondents  desired  to  treat  the
appellant justly, so as to enable him to acquire the honour of promotion  to
the rank of Lieutenant General, (in case  the  recommendation  made  in  his
favour by the Selection Board was approved by the Appointments Committee  of
the Cabinet), stands affirmed.
The action of the authorities  in  depriving
the appellant due consideration for promotion to the rank of the  Lieutenant
General, would have resulted in violation of  his  fundamental  right  under
Article 14 of the Constitution of India.
Such an action  at  the  hands  of
the respondents would unquestionably have been arbitrary.
We are  therefore
of the view, firstly, that the order allowing extension in  service  of  the
appellant for a period of three  months,  dated  29.2.2008,  and  the  order
allowing further extension in service by one month to the  appellant,  dated
30.5.2008, so as to enable his claim to be considered for  onward  promotion
to the rank of Lieutenant General, cannot be held to be in violation of  the
statutory provisions.  Rule 16A of the Army Rules, postulates  extension  in
service, if the exigencies of service so require.
The said  parameter  must
have been duly taken into consideration when the Presidential  Orders  dated 29.2.2008 and 30.5.2008 were passed.
The respondents have neither  revoked,
nor sought revocation of the above orders.  Therefore, it does  not  lie  in
the mouth of the respondents to question the veracity of the  above  orders.
The above orders were passed to ensure due consideration of the  appellant’s
claim for promotion to the rank of Lieutenant  General.   Without  rejecting
the above claim on merits, the appellant was deprived of  promotion  to  the
rank of  Lieutenant  General.   Besides  the  above,  we  are  also  of  the
considered view, that consideration of the promotional claim of  the  senior
most eligible officer, would  also  fall  in  the  parameters  of  the  rule
providing for extension, if the exigencies of service so require.  It  would
be a sad day if the armed forces decline to give effect  to  the  legitimate
expectations of the  highest  ranked  armed  forces  personnel.  
Specially
when,  blame  for  delay  in  such  consideration,  rests  squarely  on  the
shoulders of the authorities themselves.   This  would  lead  to  individual
resentment,  bitterness,  displeasure  and  indignation.   This  could  also
undoubtedly lead to, outrage at the  highest  level  of  the  armed  forces.
Surely, extension of service, for the  purpose  granted  to  the  appellant,
would most definitely fall within the realm of Rule 16A of the  Army  Rules,
unless  of  course,  individual  resentment,  bitterness,  displeasure   and
indignation, of army personnel at the highest level is of no concern to  the
authorities.  Or alternatively, the authorities would like to  risk  outrage
at the highest level, rather than doing  justice  to  a  deserving  officer.
Reliance on Rule 16A, to deprive the appellant of promotion,  to  our  mind,
is just a lame excuse.  Accordingly, extension in  service  granted  to  the
appellant, for all intents and purposes, in our  considered  view,  will  be
deemed to satisfy the parameters of exigency of service, stipulated in  Rule
16A of the Army Rules.

23.   While dealing with the  issue  of  consideration  of  the  appellant’s
claim for onward  promotion  to  the  rank  of  Lieutenant  General,  it  is
necessary for us to also conclude by observing, that had the  claim  of  the
appellant not been duly considered against  the  vacancy  for  the  post  of
Lieutenant General, which became available with  effect  from  1.1.2007,  we
would have had to hold, that the action was discriminatory.   This  because,
of denial of due consideration to the appellant, who  was  the  senior  most
eligible serving Major General, as against the  claim  of  others  who  were
junior to him.  And specially when, the respondents desired to fill  up  the
said vacancy, and also because, the vacancy had arisen  when  the  appellant
still had 14 months of remaining Army service.  Surely  it  cannot  be  over
looked, that the Selection Board had singularly recommended the name of  the
appellant for promotion,  out  of  a  panel  of  four  names.   In  such  an
eventuality, we would have no other  alternative  but  to  strike  down  the
action of the authorities as being discriminatory and violative  of  Article
16 of the Constitution of India.

24.   The deliberations recorded by us hereinabove are incomplete,  inasmuch
as, we have not answered the pointed objection raised by the learned  senior
counsel for the respondent nos. 1 and 2, namely,  that  an  officer  is  not
entitled to promotion during the period of extension in  service.   For  the
instant objection raised at the hands of the respondents,  it  is  necessary
to refer to the deliberations of the Appointments Committee of the  Cabinet,
and specially paragraphs 8 and 9  thereof.   A  collective  reading  of  the
paragraphs  8  and  9  reveals  an  extremely  relevant  objective,  namely,
situations wherein an officer attains the age of  retirement  without  there
being a vacancy for his consideration to a higher rank, even  though  he  is
eligible for the  same.   Such  an  officer  who  is  granted  extension  in
service, cannot claim consideration for promotion, against a  vacancy  which
has become available during the period of his  extension  in  service.   The
above conclusion drawn by us is clearly apparent from  the  paragraph  9  of
the proceedings of the Appointments Committee of the Cabinet.   In  fact  in
the operative part of the proceedings recorded in paragraph 11, it has  been
noticed, that .”…extensions motivated by a promotion in  the  offing  during
the extension period cannot be allowed…”  We can  derive  only  one  meaning
from the above observations, namely, extension being granted  for  promotion
against a vacancy in the offing.  That is to say, retention in  service,  so
as to consider an officer for a  vacancy  which  has  not  become  available
prior to his retirement, but is in the offing.  The  above  reason  recorded
in the operative part of the proceedings of the  Appointments  Committee  of
the Cabinet, is laudible and legal.  Insofar as the present  controversy  is
concerned, there is no doubt whatsoever, that a clear  vacancy  against  the
rank of Lieutenant General became available with effect from  1.1.2007.   At
that juncture, the appellant had 14 months of service remaining.  It is  not
as if the vacancy came into existence after the appellant  had  reached  the
age of retirement on superannuation.  The present  case  is  therefore,  not
covered by the technical plea canvassed at the hands of the  learned  senior
counsel for the respondents.  The  denial  of  promotion  to  the  appellant
mainly for the reason, that the appellant was on extension  in  service,  to
our mind, is unsustainable besides being arbitrary, specially in  the  light
of the fact, that  the  vacancy  for  which  the  appellant  was  clamouring
consideration, became available, well before the date of his  retirement  on
superannuation.  We have, therefore, no hesitation in  rejecting  the  basis
on which the claim of the appellant for onward  promotion  to  the  rank  of
Lieutenant General was  declined,  by  the  Appointments  Committee  of  the
Cabinet.

25.   In view of the fact, that we have found the order of rejection of  the
appellant’s claim for promotion to the rank of Lieutenant  General,  on  the
ground that he was on extended service to be invalid, we  hereby  set  aside
the operative part of  the  order  of  the  Appointments  Committee  of  the
Cabinet.  It is also apparent, that the Selection Board had recommended  the
promotion of the appellant on the basis  of  his  record  of  service,  past
performance, qualities of leadership, as well as, vision, out of a panel  of
four  names.   In  its  deliberations  the  Appointments  Committee  of  the
Cabinet, did not record any reason to  negate  the  aforesaid  interference,
relating to the merit and suitability of the appellant.   We  are  therefore
of  the  view,  that  the  appellant  deserves  promotion  to  the  rank  of
Lieutenant General, from the date due  to  him.   Ordered  accordingly.   On
account of his promotion to the post of Lieutenant  General,  the  appellant
would  also  be  entitled  to  continuation  in  service  till  the  age  of
retirement on superannuation stipulated for Lieutenant Generals, i.e.,  till
his having attained the age of 60 years.  As such, the  appellant  shall  be
deemed to have been in service against the rank of Lieutenant  General  till
28.2.2009.  Needless to mention, that the appellant  would  be  entitled  to
all monetary benefits which would have been due to him, on  account  of  his
promotion  to  the  rank  of  Lieutenant  General  till  his  retirement  on
superannuation, as also,  to  revised  retiral  benefits  which  would  have
accrued to him on account of such promotion.  The  above  monetary  benefits
shall be released to the appellant within  three  months  from  the  date  a
certified copy of this order becomes available with the respondents.

26.   Allowed in the aforesaid terms.


                                                           …..…………………………….J.
                                              (A.K. Patnaik)



                                                           …..…………………………….J.
                                                      (Jagdish Singh Khehar)


New Delhi;
January 9, 2014.

Debt Recovery Tribunal - Auction Sale - third party purchaser - a bonafide purchaser in public auction No equities to disturb - sale confirmed and possession delivered - mutation of entries completed - Having abandon the claim petition and a Writ petition challenging the auction sale not maintainable due to laches and delays and also due alternative provision of appeal - Non -Application some income tax rules in recovery process -Rule 11- not vitiate the auction proceedings except on ground of fraud or collusion - D.B. of High court wrongly interfered the Recovery proceedings and as such set side - Apex court allowed the appeal = Sadashiv Prasad Singh … Appellant Versus Harendar Singh & Ors. … Respondents = 2014 ( JANUARY - VOL -1) JUDIS.NIC.IN/ S.C./ FILE NAME= 41140

 Debt Recovery Tribunal - Auction Sale - third party purchaser - a bonafide purchaser in public auction  No equities to disturb - sale confirmed and possession delivered - mutation of entries completed - Having abandon the claim petition and a Writ petition challenging the auction sale not maintainable due to laches and delays and also due alternative provision of appeal  - Non -Application some income tax rules  in recovery process -Rule 11- not vitiate the auction proceedings except on ground of fraud or collusion - D.B. of High court wrongly interfered the Recovery proceedings and as such set side - Apex court allowed the appeal =

 “20. Law makes a clear distinction between a stranger who  is  a  bona fide purchaser of the property at an auction-sale and a  decree-holder purchaser at a  court  auction.   
The  strangers  to  the  decree  are afforded protection by the court because they are not  connected  with the decree.  
Unless the protection is extended to them the court sales
would not fetch market value or fair price of the property.”
It is, therefore, apparent that the rights of an  auction-purchaser  in  the
property purchased by him cannot be extinguished except in cases  where  the
said purchase can be assailed on grounds of fraud or collusion. =

At the time of hearing, we were thinking of remanding  the  matter  to
the Recovery Officer to investigate into the  objection  of  Harender  Singh
under Rule 11 of the Second Schedule to  the  Income  Tax  Act,  1961.   But
considering the delay such a remand may cause, we  have  ourselves  examined
the objections of Harender Singh and reject the objections for a variety  of
reasons.  Firstly, the contention raised at the  hands  of  the  respondents
before the High Court, that  the  facts  narrated  by  Harender  Singh  (the
appellant in Special Leave Petition (C)  No.26550  of  2010)  were  a  total
sham, as he was  actually  the  brother  of  one  of  the  judgment-debtors,
namely,  Jagmohan  Singh.   And  that  Harender   Singh   had   created   an
unbelievable story with the connivance and help of his  brother,  so  as  to
save the  property  in  question.   The  claim  of  Harender  Singh  in  his
objection petition, was based on an unregistered  agreement  to  sell  dated
10.1.1991. Not only that such an agreement to sell would not vest any  legal
right in his favour; it is apparent that it may not have been difficult  for
him to have had the aforesaid agreement  to  sell  notarized  in  connivance
with his brother, for the purpose sought to be achieved.   Secondly,  it  is
apparent from the factual position  depicted  in  the  foregoing  paragraphs
that  Harender  Singh,  despite  his  having  filed  objections  before  the
Recovery Officer, had abandoned the contest raised by him by  not  appearing
(and  by  not  being  represented)  before  the   Recovery   Officer   after
26.10.2005, whereas, the Recovery Officer had passed the order  of  sale  of
the property by way of public auction more than two years  thereafter,  only
on 5.5.2008.  Having abandoned his claim before  the  Recovery  Officer,  it
was not open to him to have reagitated the same by filing  a  writ  petition
before the High Court.   
Thirdly,  a  remedy  of  appeal  was  available  to
Harender Singh in respect of the order of the Recovery Officer  assailed  by
him before the High Court under Section 30, which is being extracted  herein
to assail the order dated 5.5.2008:

      “30.  Appeal   against   the   order   of   Recovery   Officer.—   (1)
      Notwithstanding anything contained in section 29, any person aggrieved
      by an order of the Recovery Officer made under this  Act  may,  within
      thirty days from the date on which a copy of the order  is  issued  to
      him, prefer an appeal to the Tribunal.

      (2) On receipt of an appeal under sub-section (1), the  Tribunal  may,
      after giving an opportunity to the appellant to be  heard,  and  after
      making such inquiry as it deems fit, confirm, modify or set aside  the
      order made by the Recovery Officer in exercise  of  his  powers  under
      section 25 to 28 (both inclusive).”



The High Court ought not to have interfered with in the matter  agitated  by
Harender Singh in exercise of its writ jurisdiction.  
In fact,  the  learned
Single Judge rightfully  dismissed  the  writ  petition  filed  by  Harender
Singh.  
Fourthly, Harender Singh could not be allowed to raise  a  challenge
to the public auction held on  28.8.2008  because  he  had  not  raised  any
objection  to  the  attachment  of  the  property   in   question   or   the
proclamations and notices  issued  in  newspapers  in  connection  with  the
auction thereof.  
All these facts cumulatively lead to the  conclusion  that
after 26.10.2005, Harender Singh had lost all interest in  the  property  in
question and had therefore, remained a silent spectator  to  various  orders
which came to be passed from time to time.  
He had, therefore, no  equitable
right in his favour to assail the auction-purchase made by  Sadashiv  Prasad
Sinha on 28.8.2008.  
Finally, the public auction under  reference  was  held
on 28.8.2008.  Thereafter the same was confirmed on 22.09.2008.   Possession
of the property was handed over to  the  auction-purchaser  Sadashiv  Prasad
Sinha on 11.3.2009.  The auction-purchaser  initiated  mutation  proceedings
in respect of the property in question.  Harender Singh did  not  raise  any
objections in the said mutation proceedings.  
The said mutation  proceedings
were also finalized in favour of  Sadashiv  Prasad  Sinha.   Harender  Singh
approached the High Court through CWJC No.16485 of 209 only  on  27.11.2009.
We are of the view that the challenged raised by  Harender  Singh  ought  to
have been rejected on the grounds of delay and latches,  especially  because
third party rights had emerged  in  the  meantime.   More  so,  because  the
auction purchaser was  a  bona  fide  purchaser  for  consideration,  having
purchased the property in furtherance of a duly publicized  public  auction,
interference by the  High  Court  even  on  ground  of  equity  was  clearly
uncalled for.

      For the reasons recorded hereinabove, we are  of  the  view  that  the
impugned order dated 17.5.2010 passed by the  High  Court  allowing  Letters
Patent Appeal No.844 of  2010  deserves  to  be  set  aside.   The  same  is
accordingly set aside.  The right of the appellant Sadashiv Prasad Sinha  in
Plot No.2722, Exhibition Road, P.S. Gandhi  Maidan,  Patna,  measuring  1289
sq.ft. is hereby confirmed.  In the above view  of  the  matter,  while  the
appeal preferred by Sadashiv Prasad Sinha stands allowed, the one  filed  by
Harender Singh is hereby dismissed.

2014 ( JANUARY - VOL -1) JUDIS.NIC.IN/ S.C./ FILE NAME= 41140


                                                                “REPORTABLE”

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO.  161  OF 2014
                  (Arising out of SLP (C) No.23000 of 2010)

Sadashiv Prasad Singh                                    … Appellant

                                   Versus

Harendar Singh & Ors.                                    … Respondents

                                    WITH

                      CIVIL APPEAL NO.   162   OF 2014
                  (Arising out of SLP (C) No.26550 of 2010)

                               J U D G M E N T

Jagdish Singh Khehar, J.

1.    On 11.9.1989, The Allahabad Bank  (hereinafter  referred  to  as  ‘the
Bank’) sanctioned a loan of Rs.12.70  lac  to  M/s.  Amar  Timber  Works,  a
partnership firm having three partners, Jagmohan  Singh,  Payam  Shoghi  and
Dev Kumar Sinha.
The above loan was sanctioned to M/s. Amar  Timber  Works,
after its partners had mortgaged  certain  properties  to  secure  the  loan
amount.
Since the loan  amount  was  not  repaid  in  compliance  with  the
commitment made by M/s. Amar Timber Works, nine years later,  in  1998,  the
Bank preferred Original Application No.107 of 1998 before the Debt  Recovery
Tribunal  for  the  recovery  of  the  Bank’s  dues.
The   above   Original
Application was allowed on 21.11.2000.  Accordingly, a direction was  issued
for the recovery of Rs.75,75,564/- from M/s. Amar  Timber  Works.   For  the
execution of the order passed  by  the  Debt  Recovery  Tribunal,  the  Bank
initiated recovery proceedings on 28.11.2000.  
During the  pendency  of  the
recovery proceedings, Jagmohan Singh, one  of  the  partners  of  M/s.  Amar
Timber Works, died (on  27.1.2004).  
 On  16.4.2004,  the  Recovery  Officer
attached plot No.722, located at Exhibition Road, P.S. Gandhi Maidan,  Patna
(hereinafter referred to as ‘the property’) measuring 1298 sq.ft.  It  would
be pertinent to mention that the aforesaid plot  was  in  the  ownership  of
Jagmohan Singh, one of the partners in M/s. Amar Timber Works.

2.    On 10.6.2004, Harender Singh, brother  of  Jagmohan  Singh,  filed  an
objection petition before the Recovery Officer alleging, that  the  attached
property did not belong to the judgment debtors, but had been  purchased  by
him from his brother Jagmohan Singh,  by  executing  an  agreement  of  sale
dated 10.1.1991, which was duly notarized though not registered.
 It  would
be relevant to mention, that Harender Singh pursued the  objection  petition
filed by him before the Recovery  Officer  till  26.10.2005,  but  chose  to
abandon the proceedings  thereafter.   
The  order  passed  by  the  Recovery
officer when the Objector was represented for the last  time  on  26.10.2005
is being extracted below:
      “Ld. Advocate of Bank and objectors appears.  Objector reiterated  his
      points and invited attention towards Section 53 of TP Act.  Counsel of
      the bank submits that he  had  to  say  nothing  more  than  what  was
      said/submitted earlier.  He also submits  that  D.Drs.  was  guarantor
      also in this case hence his properties attached.  Put up  on  28.12.08
      for further hearing.

      Sd/- Illegible
      I/C R.O.”

3.    The recovery proceedings referred to  above  remained  pending  for  a
further period of more  than  two  years.   Finally,  the  Recovery  Officer
passed an order dated 5.5.2008, for the sale  of  the  property  by  way  of
public auction on 4.7.2008.
The Recovery Officer  fixed  Rs.12.92  lacs  as
the reserve price, and also fixed 28.8.2008 as the date of its auction.   At
the auction held on  28.8.2008,  Sadashiv  Prasad  Singh,  was  the  highest
bidder.  
Accordingly, the Recovery Officer ordered the sale of the  property
in his favour on 28.8.2008.  On 22.9.2008,  the  Recovery  Officer,  in  the
absence of any objections, confirmed the sale of the property in  favour  of
Sadashiv Prasad Singh.  
The Recovery Officer also ordered, the handing  over
of physical possession of the property to the auction  purchaser.   Sadashiv
Prasad Singh,  the  auction  purchaser,  took  physical  possession  of  the
property on 11.3.2009.

4.    In furtherance of the  proceedings  initiated  through  Mutation  Case
No.295/2/09-10, the land in question was mutated in favour  of  the  auction
purchaser.  It would  be  relevant  to  mention  that  the  application  for
mutation  filed  by  the  auction  purchaser,  Sadashiv  Prasad  Singh,  was
supported by letter dated 14.10.2008 of the Ministry of Finance,  Government
of India, Realization Authority, Patna.  It would be  relevant  to  mention,
that no objections were filed in the mutation  case  preferred  by  Sadashiv
Prasad Singh, by or  on  behalf  of  Harender  Singh,  before  the  Mutation
Officer.

5.    On 27.11.2009, CWJC No.16485 of  2009  was  filed  by  Harender  Singh
before the High Court of Judicature at Patna  (hereinafter  referred  to  as
the ‘High Court’).  In the aforesaid writ petition, Harender Singh  assailed
the order of the Recovery Officer dated 5.5.2008, whereby, the property  had
been ordered to be sold by public auction in discharge of the debt  owed  by
M/s Amar  Timber  Works  to  the  Allahabad  Bank.   Vide  its  order  dated
23.3.2010, the High Court  ordered  the  auction  purchaser,  i.e.  Sadashiv
Prasad Singh to be impleaded as  a  party-respondent.   On  27.11.2010,  the
High Court dismissed the above writ petition  by  accepting  the  objections
raised on behalf of the Bank, as well as, the auction purchaser  by  holding
as under :

      “The above facts do weigh with the Court in not interfering  with  the
      sale or the proceeding where it has been reached.  The petitioner  has
      no satisfactory explanation for not approaching the Court well  within
      time challenging such a decision  or  the  subsequent  proceedings  or
      orders of the Recovery Officer at an appropriate time.  The conduct of
      the petitioner by itself has precluded and prevented this  Court  from
      passing any order in his favour at this belated stage.

      The writ application has not merit.  It is dismissed accordingly.”



6.    Dissatisfied with the order dated 27.4.2010 whereby the writ  petition
filed by Harender Singh was dismissed by a Single Bench of the  High  Court,
he preferred Letters Patent Appeal  No.844  of  2010.   Before  the  Letters
Patent Bench, Harender Singh, brother of Jagmohan Singh, asserted  that  his
brother Jagmohan Singh had availed a loan of  Rs.14.70  lacks.   As  against
the aforesaid loan amount, the Bank had  initiated  proceedings  before  the
Debt Recovery Tribunal for the realization of a  sum  of  75,75,564/-.   The
property under reference was sold by  way  of  public  auction  to  Sadashiv
Prasad Singh for a sum of Rs.13.20 lacs.   As  against  the  aforesaid  sale
consideration paid by the auction purchaser, Harender Singh, offered  a  sum
of Rs.39 lacs before the Letters Patent Bench.  In the order passed  by  the
Letters Patent Bench disposing of Letters Patent Appeal No.844 of  2010,  it
stands noticed that the Bank had accepted to finally settle  the  matter  on
being paid a sum of Rs.45 lacs, subject to the condition that  the  Harender
Singh pays a sum of Rs.15 lacs immediately, and the balance amount of  Rs.30
lacs within a period of two years in  a  phased  manner.   Even  though  the
learned counsel representing the appellant, Harender Singh was agreeable  to
proposal of the Bank, the  rival  parties  could  not  amicably  settle  the
matter.  It is,  therefore,  that  the  letters  patent  Bench  went  on  to
adjudicate the matter on its merits.  The above factual  position  has  been
noticed for the reason that it has a nexus to  the  final  order  which  was
eventually passed by the Letters Patent Bench disposing  of  LPA  No.844  of
2010.  In fact, it would be in the fitness of matters to  extract  paragraph
8 from the impugned judgment rendered in LPA No.844  of  2010  in  order  to
appreciate  the  niceties  of  the  matter.   The  aforesaid  paragraph  is,
accordingly, being extracted herein :

      “8. At this juncture, we may state that the brother of  the  appellant
      had availed a loan of Rs.14.70 lacs.  The said aspect is not  disputed
      by Mr. Ajay Kumar Sinha, learned counsel for the Bank.  The  Bank  had
      initiated  a  proceeding  before  the  Tribunal  for  realization   of
      approximately a sum of Rs.75.75 lacs.  The property has been sold  for
      Rs.13.20 lacs.  It is submitted by Mr. Ojha that the prices have  gone
      up and he is being offered more than 39 lacs for the same.  It is  not
      in dispute that the price,  the  auction-purchaser  has  tendered,  is
      Rs.13.20 lacs.  On  the  earlier  occasion,  a  suggestion  was  given
      whether the Bank would  accept  Rs.45  lacs  in  toto  to  settle  the
      dispute.  Mr.  Sinha,  learned  counsel  for  the  Bank  has  obtained
      instructions that the Bank has no objection to settle the same, if the
      appellant pays Rs.15 lacs immediately so that the same can be paid  to
      the auction-purchaser and Rs.30 lacks should be paid within  a  period
      of two years in a phased manner.  Mr. Choubey, learned counsel for the
      appellant submitted that the appellant is agreeable to pay  the  same.
      Mr. Ojha  submitted  that  he  has  instructions  not  to  accept  the
      suggestion.”



7.    During the course of appellate proceedings, the  High  Court  referred
to  Chapter  V  of  the  Recovery  of  Debts  Due  to  Banks  and  Financial
Institutions Act, 1993 (hereinafter referred to as the Debt Recoveries  Act)
and particularly to Section 29 which is being extracted hereunder:

      “29.  Application  of  certain  provisions  of   Income-tax   Act.—The
      provisions of the Second and Third Schedules to  the  Income-tax  Act,
      1961 (43 of 1961) and the Income-tax (Certificate Proceedings)  Rules,
      1962, as in force from time to time shall, as far as  possible,  apply
      with necessary modifications as if the said provisions and  the  rules
      referred to the amount of debt due under this Act instead  of  to  the
      Income-tax :

           Provided that any reference under the said  provisions  and  the
      rules to the “assessee” shall be  construed  as  a  reference  to  the
      defendant under this Act.”



The High Court while interpreting  Section  29  extracted  above,  concluded
that certain provisions of the Income Tax Act and  Income  Tax  (Certificate
Proceedings) Rules would be applicable mutatis mutandis  in  the  matter  of
recovery of debts under the  Debt  Recoveries  Act.   The  High  Court  then
referred to Rule 11 of the Income Tax (Certificate  Proceedings)  Rules  and
arrived at the conclusion that  sub-rule  (2)  of  Rule  11,  had  not  been
complied with by the Recovery Officer, inasmuch as, the objection raised  by
Harender Singh had not been adjudicated  upon.   As  such,  the  High  Court
finally concluded that the proceedings before the Recovery Officer  were  in
flagrant violation of the  provisions  of  Rule  11(2)  of  the  Income  Tax
(Certificate Proceedings) Rules.  Having so concluded, the  High  Court  set
aside the proceedings conducted by the Recovery Officer, including the  sale
of the property by public auction.  
In order to appreciate the basis of  the
order passed by the High Court, Rule  11  of  the  Second  Schedule  of  the
Income Tax Act, 1961, is being extracted herein:

      “Investigation by Tax Recovery Officer.

      11. (1)     Where any claim is preferred to, or any objection is  made
      to the  attachment  or  sale  of,  any  property  in  execution  of  a
      certificate, on the ground that such property is not  liable  to  such
      attachment  or  sale,  the  Tax  Recovery  Officer  shall  proceed  to
      investigate the claim or objection:

           Provided that no such investigation shall be made where the  Tax
      Recovery Officer considers that the claim or objection was  designedly
      or unnecessarily delayed.

      (2)   Where the property to which the claim or objection  applies  has
      been advertised for sale, the Tax Recovery Officer ordering  the  sale
      may postpone it pending the investigation of the claim  or  objection,
      upon such terms as to  security  or  otherwise  as  the  Tax  Recovery
      Officer shall deem fit.

      (3)   The claimant or objector must adduce evidence to show that-

           (a)   (in the case of immovable property) at  the  date  of  the
           service of the notice issued under  this  Schedule  to  pay  the
           arrears, or

           (b)   (in the case of movable  property)  at  the  date  of  the
           attachment,

           he had some interest in, or was possessed of,  the  property  in
           question.

      (4)   Where, upon the said investigation, the Tax Recovery Officer  is
      satisfied that, for the reason stated in the claim or objection,  such
      property was not, at the said date, in the possession of the defaulter
      or of some person in truest for him or in the occupancy of a tenant or
      other person paying rent to him, or that, being in the  possession  of
      the defaulter at the said date, it was so in his  possession,  not  on
      his own account or as his own property, but on account of or in  trust
      for some other person, or partly on his  own  account  and  partly  on
      account of some other person, the Tax Recovery Officer shall  make  an
      order releasing the property, wholly or to such extent  as  he  thinks
      fit, from attachment or sale.

      (5)   Where the Tax Recovery Officer is satisfied  that  the  property
      was, at the said date, in the possession of the defaulter as  his  own
      property and not on account  of  any  other  person,  or  was  in  the
      possession of some other person in trust for him, or in the  occupancy
      of a tenant or other person paying  rent  to  him,  the  Tax  Recovery
      Officer shall disallow the claim.

      (6)   Where a claim or an objection is preferred,  the  party  against
      whom an order is made may  institute  a  suit  in  a  civil  court  to
      establish the right which he claims to the property in  dispute;  but,
      subject to the result of such suit (if any),  the  order  of  the  Tax
      Recovery Officer shall be conclusive.”


8.    Having dealt with the controversy  in  the  manner  expressed  in  the
foregoing paragraphs, the Division Bench of the High Court was of  the  view
that the matter in hand ought to be settled  by  working  out  the  equities
between the parties.  Accordingly, the High Court disposed of the matter  in
the following manner:

      “12.  Though we have held  the  same  could  not  have  been  sold  in
      auction, yet equities are to be worked out.  Regard being had  to  the
      fact that the respondent-purchaser has deposited Rs.13.20 lac  between
      28.8.2008 to 22.9.2009 and thus the amount is with the Bank for almost
      more than one year  and  10  months  and  thereafter  there  had  been
      challenge to the order in the writ petition and after dismissal of the
      writ petition the present L.P.A. has been filed in  quite  promptitude
      and that the amount of the respondent-purchaser was blocked,  it  will
      be  obligatory  on  the  part  of  the  appellant  to  compensate  the
      respondent-purchaser at least by way of payment  of  interest  at  the
      Bank rate.  We are disposed to think that if a sum of  Rs.17  lacs  is
      paid to the auction-purchaser, it would sub-serve the cause of justice
      and house of the appellant shall be  saved  and,  accordingly,  it  is
      directed that the appellant shall deposit a sum of Rs.17 lacks  within
      a period of four weeks from today in the Bank.   After  such  deposit,
      the Bank shall hand it over to the purchaser by way of a  bank  draft.
      The same shall be sent by registered  post  with  acknowledgment  due.
      Thereafter the appellant shall deposit a further  sum  of  Rs.32  lacs
      within a period of two years; sum of Rs.16 lacs by  25th  March,  2011
      and further sum of Rs.16 lacs by 25th March, 2012.   Needless  to  say
      pro-rate interest shall accrue in favour of  the  Bank  for  the  said
      period.

      13.   After the amount is paid to the purchaser, it would be the  duty
      of the Recovery Officer to hand over the possession to the appellant.”



9.    Sadashiv  Prasad  Singh,  the  auction  purchaser,  has  assailed  the
impugned order passed by the Division Bench of the High Court in LPA  No.844
of 2010 praying for the setting aside of the order  by  which  he  has  been
deprived of the property purchased by him in  the  public  auction  held  on
28.8.2008, which was subsequently confirmed by the Recovery Officer  of  the
Debt Recovery Tribunal on  23.9.2008.
  This  challenge  has  been  made  by
Sadashiv Prasad Singh by filing  Special  Leave  Petition  (C)  No.23000  of
2010.  The impugned order passed by the High Court on  17.5.2010,  has  also
been assailed by Harender Singh by preferring  Special  Leave  Petition  (C)
No.26550 of 2010.  The prayer made by Harender Singh is, that  order  passed
by the Division Bench places him in the shoes of the auction purchaser,  and
as such, he could have  only  been  asked  to  pay  a  sum  of  Rs.17  lacs.
Requiring him to pay a further sum of Rs.32 lacs is  unsustainable  in  law,
and accordingly, deserved to be set aside.

10.   Leave granted in both the Special Leave Petitions.

11.   For the narration of facts, we have relied upon the pleadings and  the
documents appended to Special Leave Petition (C) No.23000 of 2010.

12.    Learned counsel for the auction purchaser Sadashiv Prasad  Singh,  in
the first instance vehemently contended, that
in terms of the  law  declared
by this Court, property purchased by a third  party  auction  purchaser,  in
compliance of a court order, cannot be interfered with on the basis  of  the
success or failure of parties to a  proceeding,  if  auction  purchaser  had
bonafidely purchased the property.  
In order to substantiate  his  aforesaid
contention,  learned  counsel  representing  Sadashiv  Prasad  Singh  placed
emphatic reliance, firstly, on a judgment rendered by this Court  in  Ashwin
S. Mehta & Anr. vs. Custodian & Ors., (2006) 2 SCC 385).  Our attention  was
drawn to the following observations recorded therein :

      “In that view of the matter, evidently, creation  of  any  third-party
      interest is no longer in dispute nor the same is subject to any  order
      of this Court.  In any event, ordinarily, a bona  fide  purchaser  for
      value in an auction-sale is treated differently than  a  decree-holder
      purchasing such properties.  In the  former  event,  even  if  such  a
      decree is set aside, the interest of the bona  fide  purchaser  in  an
      auction-sale is saved. (See Nawab Zain-ul-Abdin Khan v.  Mohd.  Asghar
      Ali Khan (1887) 15 IA 12)  The said decision has been affirmed by this
      Court in Gurjoginder Singh v. Jaswant Kaur (1994) 2 SCC 368).”
                                                          (emphasis is ours)


On the same subject, and to the same end, learned  counsel  placed  reliance
on another judgment rendered by this Court
in Janatha Textiles  &  Ors.  vs.
Tax Recovery Officer & Anr., (2008) 12  SCC  582,  wherein  the  conclusions
drawn in Ashwin S. Mehta’s case (supra)  came  to  be  reiterated.   In  the
above judgment, this Court relied upon the decisions of  the  Privy  Council
and of this Court in Nawab Zain-Ul-Abdin Khan  v.  Mohd.  Asghar  Ali  Khan,
(1887-88) 15  IA  12;  Janak  Raj  vs.  Gurdial  Singh,  AIR  1967  SC  608;
Gurjoginder Singh vs. Jaswant Kaur, (1994) 2  SCC  368;  Padanathil  Ruqmini
Amma vs. P.K. Abdulla, (1996) 7  SCC  668,  as  also,  on  Ashwin  S.  Mehta
(supra) in order to conclude, that it is an established  principle  of  law,
that a third party auction purchaser’s interest, in the  auctioned  property
continues to be protected, notwithstanding that  the  underlying  decree  is
subsequently set aside or otherwise.
It is, therefore, that this  Court  in
its ultimate analysis observed as under:

      “20. Law makes a clear distinction between a stranger who  is  a  bona fide purchaser of the property at an auction-sale and a  decree-holder purchaser at a  court  auction.   
The  strangers  to  the  decree  are afforded protection by the court because they are not  connected  with the decree.  
Unless the protection is extended to them the court sales
would not fetch market value or fair price of the property.”
                                                          (emphasis is ours)


On the issue as has been dealt with in the foregoing paragraph,  this  Court
has carved out one exception.
The aforesaid exception came to  be  recorded
in
Velji Khimji and Company  vs.  Official  Liquidator  of  Hindustan  Nitro
Product (Gujarat) Limited & Ors., (2008) 9 SCC 299, wherein it was  held  as
under :

      “30. In the first case mentioned above i.e. where the auction  is  not
      subject to confirmation by any authority, the auction is  complete  on
      the fall of the hammer, and certain rights accrue  in  favour  of  the
      auction-purchaser.   However,  where  the  auction   is   subject   to
      subsequent confirmation by some authority (under a statute or terms of
      the auction) the auction is not complete and no  rights  accrue  until
      the sale is confirmed by the said authority.  Once, however, the  sale
      is confirmed by that authority, certain rights accrue in favour of the
      auction-purchaser, and these rights cannot be extinguished  except  in
      exceptional cases such as fraud.

      31. In  the  present  case,  the  auction  having  been  confirmed  on
      30.7.2003 by the Court it cannot be set aside  unless  some  fraud  or
      collusion has  been  proved.   We  are  satisfied  that  no  fraud  or
      collusion has been established by anyone in this case.”
                                                          (emphasis is ours)


It is, therefore, apparent that the rights of an  auction-purchaser  in  the
property purchased by him cannot be extinguished except in cases  where  the
said purchase can be assailed on grounds of fraud or collusion.

13.   It is imperative for us, to adjudicate upon the veracity of  the  sale
of the property by way of public auction, made in favour of Sadashiv  Prasad
Singh on 28.8.2008.  It is not a matter of dispute,  that  the  lis  in  the
present controversy was between the Allahabad Bank on the one hand  and  the
partners of M/s. Amar  Timber Works, namely, Jagmohan  Singh,  Payam  Shoghi
and Dev Kumar Sinha on the other.  Sadashiv Prasad Sinha was not a party  to
the proceedings before the Debt Recovery Tribunal  or  before  the  Recovery
Officer.  By an order dated 5.5.2008, the Recovery Officer ordered the  sale
of the property by  way  of  public  auction.   On  4.7.2008,  the  Recovery
Officer fixed Rs.12.92 lacs as the reserve price, and also  fixed  28.8.2008
as the date of auction.  At the public auction held on  28.8.2008,  Sadashiv
Prasad Sinha was the highest bidder, and accordingly, the  Recovery  officer
ordered the sale of the  property  in  his  favour  on  28.8.2008.   In  the
absence of any objections, the Recovery Officer confirmed the  sale  of  the
property in favour  of  Sadashiv  Prasad  Sinha  on  22.9.2008.   Thereafter
possession of the property was also handed over to the auction-purchaser  on
11.3.2009.  Applying the  law  declared  by  this  Court  in  the  judgments
referred in the foregoing paragraphs irrespective of the merits of  the  lis
between the rival parties, namely, the Allahabad Bank and  the  partners  of
M/s. Amar Timber Works, it is not open for anyone to assail the purchase  of
the property made by Sadashiv Prasad Sinha in the  public  auction  held  in
furtherance of the order passed by the Recovery Officer  on  28.8.2008.   In
the above view of the matter, especially in the absence  of  any  allegation
of fraud or collusion, we are of the view that the High Court clearly  erred
while setting aside the auction ordered in favour of the  auction-purchaser,
Sadashiv Prasad Sinha in the impugned order dated 17.5.2010.

14.   A perusal of the impugned order especially paragraphs  8,  12  and  13
extracted hereinabove reveal that the impugned order came to  be  passed  in
order  to  work  out  the  equities  between  the   parties.    The   entire
deliberation at the hands of  the  High  Court  were  based  on  offers  and
counter offers, inter se between the Allahabad Bank on the one hand and  the
objector Harender Singh on the other, whereas the rights of Sadashiv  Prasad
Sinha – the auction-purchaser, were not at  all  taken  into  consideration.
As a matter of fact, it is Sadashiv Prasad Sinha who was to be  deprived  of
the property which came to be vested in him as far  back  as  on  28.8.2008.
It is nobody’s case, that at the time of the auction-purchase, the value  of
the property purchased by Sadashiv Prasad Sinha was in excess  of  his  bid.
In fact, the factual position depicted under paragraph  8  of  the  impugned
judgment reveals, that the escalation of prices had taken place  thereafter,
and the value of  the  property  purchased  by  Sadashiv  Prasad  Sinha  was
presently much higher than the bid amount.  Since it was nobody’s case  that
Sadashiv Prasad Sinha, the  highest  bidder  at  the  auction  conducted  on
28.8.2008, had purchased the property in question at  a  price  lesser  than
the then prevailing market price, there was no justification  whatsoever  to
set aside the auction-purchase made by  him  on  account  of  escalation  of
prices thereafter.  The High Court in  ignoring  the  vested  right  of  the
appellant in the property in question, after his auction  bid  was  accepted
and confirmed,  subjected  him  to  grave  injustice  by  depriving  him  to
property which he had genuinely  and  legitimately  purchased  at  a  public
auction.  In our considered view, not only did the  Division  Bench  of  the
High Court in the matter by ignoring the sound, legal and  clear  principles
laid down by this Court in respect of a third party auction  purchaser,  the
High Court also clearly  overlooked  the  equitable  rights  vested  in  the
auction-purchaser during the  pendency  of  a  lis.   The  High  Court  also
clearly overlooked the equitable rights  vested  in  the  auction  purchaser
while disposing of the matter.

15.   At the time of hearing, we were thinking of remanding  the  matter  to
the Recovery Officer to investigate into the  objection  of  Harender  Singh
under Rule 11 of the Second Schedule to  the  Income  Tax  Act,  1961.   But
considering the delay such a remand may cause, we  have  ourselves  examined
the objections of Harender Singh and reject the objections for a variety  of
reasons.  Firstly, the contention raised at the  hands  of  the  respondents
before the High Court, that  the  facts  narrated  by  Harender  Singh  (the
appellant in Special Leave Petition (C)  No.26550  of  2010)  were  a  total
sham, as he was  actually  the  brother  of  one  of  the  judgment-debtors,
namely,  Jagmohan  Singh.   And  that  Harender   Singh   had   created   an
unbelievable story with the connivance and help of his  brother,  so  as  to
save the  property  in  question.   The  claim  of  Harender  Singh  in  his
objection petition, was based on an unregistered  agreement  to  sell  dated
10.1.1991. Not only that such an agreement to sell would not vest any  legal
right in his favour; it is apparent that it may not have been difficult  for
him to have had the aforesaid agreement  to  sell  notarized  in  connivance
with his brother, for the purpose sought to be achieved.   Secondly,  it  is
apparent from the factual position  depicted  in  the  foregoing  paragraphs
that  Harender  Singh,  despite  his  having  filed  objections  before  the
Recovery Officer, had abandoned the contest raised by him by  not  appearing
(and  by  not  being  represented)  before  the   Recovery   Officer   after
26.10.2005, whereas, the Recovery Officer had passed the order  of  sale  of
the property by way of public auction more than two years  thereafter,  only
on 5.5.2008.  Having abandoned his claim before  the  Recovery  Officer,  it
was not open to him to have reagitated the same by filing  a  writ  petition
before the High Court.   
Thirdly,  a  remedy  of  appeal  was  available  to
Harender Singh in respect of the order of the Recovery Officer  assailed  by
him before the High Court under Section 30, which is being extracted  herein
to assail the order dated 5.5.2008:

      “30.  Appeal   against   the   order   of   Recovery   Officer.—   (1)
      Notwithstanding anything contained in section 29, any person aggrieved
      by an order of the Recovery Officer made under this  Act  may,  within
      thirty days from the date on which a copy of the order  is  issued  to
      him, prefer an appeal to the Tribunal.

      (2) On receipt of an appeal under sub-section (1), the  Tribunal  may,
      after giving an opportunity to the appellant to be  heard,  and  after
      making such inquiry as it deems fit, confirm, modify or set aside  the
      order made by the Recovery Officer in exercise  of  his  powers  under
      section 25 to 28 (both inclusive).”



The High Court ought not to have interfered with in the matter  agitated  by
Harender Singh in exercise of its writ jurisdiction.  
In fact,  the  learned
Single Judge rightfully  dismissed  the  writ  petition  filed  by  Harender
Singh.  
Fourthly, Harender Singh could not be allowed to raise  a  challenge
to the public auction held on  28.8.2008  because  he  had  not  raised  any
objection  to  the  attachment  of  the  property   in   question   or   the
proclamations and notices  issued  in  newspapers  in  connection  with  the
auction thereof.  
All these facts cumulatively lead to the  conclusion  that
after 26.10.2005, Harender Singh had lost all interest in  the  property  in
question and had therefore, remained a silent spectator  to  various  orders
which came to be passed from time to time.  
He had, therefore, no  equitable
right in his favour to assail the auction-purchase made by  Sadashiv  Prasad
Sinha on 28.8.2008.  
Finally, the public auction under  reference  was  held
on 28.8.2008.  Thereafter the same was confirmed on 22.09.2008.   Possession
of the property was handed over to  the  auction-purchaser  Sadashiv  Prasad
Sinha on 11.3.2009.  The auction-purchaser  initiated  mutation  proceedings
in respect of the property in question.  Harender Singh did  not  raise  any
objections in the said mutation proceedings.  
The said mutation  proceedings
were also finalized in favour of  Sadashiv  Prasad  Sinha.   Harender  Singh
approached the High Court through CWJC No.16485 of 209 only  on  27.11.2009.
We are of the view that the challenged raised by  Harender  Singh  ought  to
have been rejected on the grounds of delay and latches,  especially  because
third party rights had emerged  in  the  meantime.   More  so,  because  the
auction purchaser was  a  bona  fide  purchaser  for  consideration,  having
purchased the property in furtherance of a duly publicized  public  auction,
interference by the  High  Court  even  on  ground  of  equity  was  clearly
uncalled for.

      For the reasons recorded hereinabove, we are  of  the  view  that  the
impugned order dated 17.5.2010 passed by the  High  Court  allowing  Letters
Patent Appeal No.844 of  2010  deserves  to  be  set  aside.   The  same  is
accordingly set aside.  The right of the appellant Sadashiv Prasad Sinha  in
Plot No.2722, Exhibition Road, P.S. Gandhi  Maidan,  Patna,  measuring  1289
sq.ft. is hereby confirmed.  In the above view  of  the  matter,  while  the
appeal preferred by Sadashiv Prasad Sinha stands allowed, the one  filed  by
Harender Singh is hereby dismissed.

                                                               ………………………….J.
                                                              (A.K. Patnaik)



                                                               ………………………….J.
                                                      (Jagdish Singh Khehar)
New Delhi;
January 8, 2014