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Sunday, April 27, 2014

Chapter III of Part VI of the Constitution deals with the State Legislature. Article 168 relates to constitution of Legislatures in States and Art.212, 252- New Government passed amendment bill extending the term of office from 6 to 8 years under Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012 (for short “the Amendment Act”) - Challenged on the ground that it was made for the purpose JUSTICE N.K. MEHROTRA WHO TERM WAS COMPLETED ON 15-3-2012 AND HIS CONTINUATION WAS ALSO CHALLENGED - Apex court held that Article 252 also shows that under the Constitution the matters of procedure do not render invalid an Act to which assent has been given to by the President or the Governor, as the case may be. Inasmuch as the Bill in question was a Money Bill, the contrary contention by the petitioner against the passing of the said Bill by the Legislative Assembly alone is unacceptable. In the light of the above discussion, we hold that Respondent No. 2 is duly holding the office of Lokayukta, U.P. under a valid law enacted by the competent legislature, viz., the Uttar Pradesh Lokayukta and Up-Lokayuktas Act, 1975 as amended by the Uttar Pradesh Lokayukta and Up- Lokayuktas (Amendment) Act, 2012. However, we direct the State to take all endeavors for selecting the new incumbent for the office of Lokayukta and Up-Lokayuktas as per the provisions of the Act preferably within a period of six months from today.= Mohd. Saeed Siddiqui .... Petitioner (s) Versus State of U.P. and Another .... Respondent(s) =2014 ( April.Part ) judis.nic.in/supremecourt/filename=41456

Chapter III of Part VI  of  the  Constitution  deals  with  the  State Legislature.   Article  168  relates  to  constitution  of  Legislatures  in States and Art.212, 252- New Government passed amendment bill extending the term of office from 6 to 8 years under Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012  (for short  “the  Amendment  Act”) - Challenged on the ground that it was made for the purpose JUSTICE N.K. MEHROTRA WHO TERM WAS COMPLETED ON 15-3-2012 AND HIS CONTINUATION WAS ALSO CHALLENGED - Apex court held that  Article 252 also shows that under the Constitution the matters of procedure  do  not render invalid an Act to which assent has been given to by the President  or the Governor, as the case may be.  Inasmuch as the Bill in  question  was  a Money Bill, the contrary contention by the petitioner  against  the  passing of the said Bill by the Legislative Assembly alone is unacceptable.  In the light of the above discussion, we hold that  Respondent  No.  2 is duly holding the office of Lokayukta, U.P. under a valid law  enacted  by the competent  legislature,  viz.,  the  Uttar  Pradesh  Lokayukta  and  Up-Lokayuktas Act, 1975 as amended by  the  Uttar  Pradesh  Lokayukta  and  Up- Lokayuktas (Amendment) Act, 2012.   However, we direct  the  State  to  take all endeavors for selecting the new incumbent for the  office  of  Lokayukta and Up-Lokayuktas as per the provisions  of  the  Act  preferably  within  a period of six months from today.=

writ  of  quo  warranto
against Mr. Justice N.K. Mehrotra (retd.), Lokayukta for the State of  Uttar
Pradesh,  Respondent  No.  2  herein,  for  continuing  as  Lokayukta  after
15.03.2012.  The petitioner is also challenging the constitutional  validity
of the Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012  (for
short  “the  Amendment  Act”)  to  the  extent  being  ultra  vires  to  the
provisions of the Constitution of India.=

b)   Section 5(1) of the Act provides that the  term  for  which  Lokayukta
shall hold office is six years from the date on which  he  enters  upon  his
office.  Further, Section 5(3) provides that on ceasing to hold office,  the
Lokayukta or Up-Lokayukta  shall  be  ineligible  for  further  appointment,
whether as a Lokayukta or Up-Lokayukta or in any other  capacity  under  the
Government of Uttar Pradesh.  Respondent No. 2 completed  his  term  of  six
years on 15.03.2012.

(c)   On 15.03.2012, the new  government  formed  after  the  Uttar  Pradesh
State Assembly elections.  On the same day, an Ordinance  for  amending  the
Act was passed by the Cabinet and sent to the Governor of Uttar Pradesh  for
assent.  However, the same did not receive the assent of the Governor.

(d)   On 18.03.2012, another Ordinance on the same subject matter  was  sent
for the assent of the  Governor  and  after  receiving  the  assent  of  the
Governor, the same was published which came  into  effect  from  22.03.2012.
Under the said Ordinance, Section 5(1) of the Act was amended and  the  term
of the Lokayukta was extended to eight years with effect from 15.03.2012.

(e)   Subsequently, Respondent No. 1 – State of Uttar  Pradesh  enacted  the
Amendment Act which received the assent of the Governor on  06.07.2012.   By
the said Amendment Act, the term of the U.P. Lokayukta and Up-Lokayukta  was
extended from six years to eight years or till  the  successor  enters  upon
his office. The said Amendment Act also seeks to limit the ineligibility  of
the  Lokayuktas’  or  Up-Lokayuktas’  for  further  appointment  under   the
Government of Uttar Pradesh only on ceasing to hold office as such, and  for
making the said provisions  applicable  to  the  sitting  Lokayukta  or  Up-
Lokayukta, as the case may be, on the  date  of  commencement  of  the  said
ordinance, i.e., 15.03.2012.=
Conclusion 
  Chapter III of Part VI  of  the  Constitution  deals  with  the  State
Legislature.   Article  168  relates  to  constitution  of  Legislatures  in
States.  The  said  Article  makes  it  clear  that  the  State  Legislature
consists of the Governor,  the  Legislative  Assembly  and  the  Legislative
Council.  After the Governor’s assent to a Bill, the consequent Act  is  the
Act of the State Legislature without any distinction between its Houses,  as
projected by the  petitioner.   We  have  also  gone  through  the  original
records placed by the State and we are satisfied that there is no  infirmity
in passing of the Bill and the enactment of the Amendment  Act,  as  claimed
by the petitioner.

40)   Though it is claimed that  the  Amendment  Act  could  not  have  been
enacted by passing the Bill as a Money Bill because the Act was not  enacted
by passing the Bill as a Money Bill, as rightly pointed  out,  there  is  no
such rule that if the Bill in a case of an original  Act  was  not  a  Money
Bill, no subsequent Bill for amendment of the original Act can  be  a  Money
Bill.  It is brought to our notice that the Act has been amended earlier  by
the U.P. Lokayukta and Up-Lokayuktas (Amendment) Act, 1988 and the same  was
enacted by passing the Money Bill.  By  the  said  Amendment  Act  of  1988,
Section 5(1) of the Act  was  amended  to  provide  that  the  term  of  the
Lokayukta and Up-Lokayukta shall be six years instead of five years.

41)   With regard to giving effect to the Amendment Act retrospectively,  as
rightly pointed out by the State, a deeming  clause/legal  fiction  must  be
given full effect and shall  be  carried  to  its  logical  conclusion.   As
observed in K. Kamaraja Nadar vs. Kunju Thevar AIR 1958 SC 687,  the  effect
of a legal fiction is that a position which otherwise would  not  obtain  is
deemed to obtain under those circumstances.  
The  materials  placed  clearly
show that the Amendment Act has been  enacted  by  a  competent  legislature
with legislative intent to provide a term of eight years  to  Lokayukta  and
Up-Lokayukta, whether present or future, to ensure effective  implementation
of the Act.  We are also satisfied that the aforesaid extension of the  term
of Lokayukta and Up-Lokayukta from six years to eight years is a  matter  of
legislative policy and it cannot be narrowed down by saying  that  the  same
was enacted only for the benefit of Respondent No. 2.

42)   As discussed above, the decision of the  Speaker  of  the  Legislative
Assembly that the Bill in question was a Money Bill is final  and  the  said
decision cannot be disputed nor can the procedure of the  State  Legislature
be questioned by virtue of Article 212.  Further, as noted earlier,  Article
252 also shows that under the Constitution the matters of procedure  do  not
render invalid an Act to which assent has been given to by the President  or
the Governor, as the case may be.  Inasmuch as the Bill in  question  was  a
Money Bill, the contrary contention by the petitioner  against  the  passing
of the said Bill by the Legislative Assembly alone is unacceptable.

43)   In the light of the above discussion, we hold that  Respondent  No.  2
is duly holding the office of Lokayukta, U.P. under a valid law  enacted  by
the competent  legislature,  viz.,  the  Uttar  Pradesh  Lokayukta  and  Up-
Lokayuktas Act, 1975 as amended by  the  Uttar  Pradesh  Lokayukta  and  Up-
Lokayuktas (Amendment) Act, 2012.   However, we direct  the  State  to  take
all endeavors for selecting the new incumbent for the  office  of  Lokayukta
and Up-Lokayuktas as per the provisions  of  the  Act  preferably  within  a
period of six months from today.

44)   Under these circumstances, all the writ petitions filed under  Article
32 of the Constitution of  India  before  this  Court  are  dismissed.   The
appeal filed by the State of U.P.  and  the  T.C.(C)  No.  74  of  2013  are
disposed of on the above terms. 
 Inasmuch as  we  have  not  gone  into  the
merit of the decisions taken by Respondent No. 2 –  Lokayukta,  the  matters
questioning  those  decisions  which  are  pending  in  the  High  Court  of
Judicature at Allahabad/Lucknow Bench are to be disposed  of  on  merits  in
the light of the above conclusion  upholding  the  Amendment  Act  of  2012.
Accordingly, the transfer petitions are disposed of.
2014 ( April.Part ) judis.nic.in/supremecourt/filename=41456
P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA
                                      REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION


                   1 WRIT PETITION (CIVIL) NO. 410 OF 2012


Mohd. Saeed Siddiqui                        .... Petitioner (s)

            Versus

State of U.P. and Another                         .... Respondent(s)

                                      2


                                   3 WITH


4


                   5 WRIT PETITION (CIVIL) NO. 289 OF 2013


                   6 WRIT PETITION (CIVIL) NO. 228 OF 2012


                7 CIVIL APPEAL NO.     4853           OF 2014


                       8 [@SLP (C) NO. 27319 OF 2012]


                          9 T.C.(C) NO. 74 OF 2013


                    10 T.P. (C) NOS. 1228 & 1230 OF 2012


                    11 T.P. (C) NOS. 1248 & 1250 OF 2012


                        12 T.P. (C) NO. 1425 OF 2012


                     13 T.P. (C) NOS. 1412-1413 OF 2012



                               J U D G M E N T


P.Sathasivam, CJI.

Writ Petition (C) No. 410 of 2012

1)        The above writ petition, under Article 32 of the  Constitution  of
India, has been filed by the petitioner  seeking  a  writ  of  quo  warranto
against Mr. Justice N.K. Mehrotra (retd.), Lokayukta for the State of  Uttar
Pradesh,  Respondent  No.  2  herein,  for  continuing  as  Lokayukta  after
15.03.2012.  The petitioner is also challenging the constitutional  validity
of the Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012  (for
short  “the  Amendment  Act”)  to  the  extent  being  ultra  vires  to  the
provisions of the Constitution of India.

2)    Brief facts:

(a)   Mr. Justice N.K.  Mehrotra  (retd.),  Respondent  No.  2  herein,  was
appointed as Lokayukta for the State of Uttar Pradesh  on  16.03.2006  under
the Uttar Pradesh Lokayukta and Up-Lokayuktas  Act,  1975  (for  short  “the
Act”).

(b)   Section 5(1) of the Act provides that the  term  for  which  Lokayukta
shall hold office is six years from the date on which  he  enters  upon  his
office.  Further, Section 5(3) provides that on ceasing to hold office,  the
Lokayukta or Up-Lokayukta  shall  be  ineligible  for  further  appointment,
whether as a Lokayukta or Up-Lokayukta or in any other  capacity  under  the
Government of Uttar Pradesh.  Respondent No. 2 completed  his  term  of  six
years on 15.03.2012.

(c)   On 15.03.2012, the new  government  formed  after  the  Uttar  Pradesh
State Assembly elections.  On the same day, an Ordinance  for  amending  the
Act was passed by the Cabinet and sent to the Governor of Uttar Pradesh  for
assent.  However, the same did not receive the assent of the Governor.

(d)   On 18.03.2012, another Ordinance on the same subject matter  was  sent
for the assent of the  Governor  and  after  receiving  the  assent  of  the
Governor, the same was published which came  into  effect  from  22.03.2012.
Under the said Ordinance, Section 5(1) of the Act was amended and  the  term
of the Lokayukta was extended to eight years with effect from 15.03.2012.

(e)   Subsequently, Respondent No. 1 – State of Uttar  Pradesh  enacted  the
Amendment Act which received the assent of the Governor on  06.07.2012.   By
the said Amendment Act, the term of the U.P. Lokayukta and Up-Lokayukta  was
extended from six years to eight years or till  the  successor  enters  upon
his office. The said Amendment Act also seeks to limit the ineligibility  of
the  Lokayuktas’  or  Up-Lokayuktas’  for  further  appointment  under   the
Government of Uttar Pradesh only on ceasing to hold office as such, and  for
making the said provisions  applicable  to  the  sitting  Lokayukta  or  Up-
Lokayukta, as the case may be, on the  date  of  commencement  of  the  said
ordinance, i.e., 15.03.2012.

(f)   Challenging the said Amendment Act, the petitioner  is  before  us  by
way of writ petition under Article 32 of the Constitution of India.

3)    Similar prayers have been made by the petitioners  in  Writ  Petitions
(C) Nos. 228 of 2012 and 289 of 2013.  Similar petitions were also filed  in
the High Court of Judicature at Allahabad.  In view  of  the  similarity  of
the issues involved in these petitions, transfer petitions, viz.,  T.P.  (C)
Nos. 1228 & 1230 of 2012, T.P. (C) Nos. 1248 & 1250 of 2012,  T.P.  (C)  No.
1425 of 2012 and T.P. (C) Nos. 1412-1413 of  2012  have  been  filed  before
this  Court.   However,  T.P.(C)  No.  1229  of  2012  was  directed  to  be
transferred to this Court by an order  dated  01.02.2013  and,  accordingly,
the same is numbered as T.C.(C) No. 74 of 2013.

Civil Appeal @ SLP (C) No.27319 of 2012

4)    Leave granted in Special Leave Petition.

5)    This appeal is directed against the order dated 27.08.2012  passed  by
the Division Bench of the High Court of Judicature  at  Allahabad  in  Civil
Misc. Writ Petition  No.  24905  of  2012  whereby  the  High  Court,  while
allowing the amendment application to the  writ  petition  and  holding  the
writ  petition  to  be  maintainable,  directed  to  list  the  petition  on
27.09.2012 for hearing on merits.

6)    By way of the said amendment application, the writ  petitioner  sought
to add two grounds  in  the  writ  petition,  viz.,  the  Amendment  Act  is
violative of the provisions of the Constitution of India and  the  same  was
wrongly introduced as a Money Bill in clear disregard to the  provisions  of
Article 199 of the Constitution of India.  Accordingly,  it  was  prayed  to
issue a writ, order or direction in the nature  of  mandamus  declaring  the
Amendment Act as ultra vires the provisions of the Constitution of India.

7)    Being aggrieved of the judgment and order dated 27.08.2012, the  State
of U.P. has filed the afore-said appeal by way of special leave.

8)     By  an  order  dated  24.09.2012,  this  Court  stayed  the   further
proceedings in CMWP No. 24905 of 2012.

9)    Heard Mr. K.K. Venugopal, learned senior counsel for  the  petitioners
in W.P.(C) Nos. 228 and 410 of 2012,  Mr. Ashok H. Desai, Dr. Abhishek  Manu
Singhvi, learned senior counsel for the  State  of  Uttar  Pradesh  and  Dr.
Rajeev  Dhawan,  learned  senior  counsel  for  Mr.  Justice  N.K.  Mehrotra
(retd.), Respondent No. 2 herein in W.P.(C) Nos. 228 and 410 of 2012.

Contentions:

10)   Mr.  K.K.  Venugopal,  learned  senior  counsel  for  the  petitioner,
submitted that, by way of the Amendment Act,  the  State  of  U.P.  has,  in
substance and effect, reappointed Justice N.K. Mehrotra (retd.),  Respondent
No. 2 herein, as Lokayukta of the State of  U.P.  notwithstanding  the  fact
that his six years’ term had already expired  on  15.03.2012.   There  is  a
statutory bar against  the  reappointment  of  the  Lokayukta  in  terms  of
Section 5(3) of the Act.

11)   Mr. Venugopal further submitted that by  passing  the  Amendment  Act,
the State Government handpicked a person who they believe would ensure  that
the  Chief  Minister,  his  Ministers  and  political  supporters  would  be
protected, despite the acts of corruption in which they may indulge in.  The
reappointment of Justice Mehrotra (retd.), who had demitted the  office  and
was prohibited from holding any post, bypassed the safeguards  contained  in
Section 3 of the Act, which stands unamended.

12)   It was further submitted that the Amendment Act was  not  even  passed
by  the  State  Legislature  in  accordance  with  the  provisions  of   the
Constitution of India and is, thus, a mere scrap of paper  in  the  eyes  of
law.  The Bill in question was presented as a Money Bill when, on  the  face
of it, it could never be called as a  Money  Bill  as  defined  in  Articles
199(1) and 199(2) of the Constitution of India.  Since the procedure for  an
Ordinary Bill was not followed and the assent of the Governor  was  obtained
to an inchoate and incomplete Bill which  had  not  even  gone  through  the
mandatory requirements under the Constitution of India,  the  entire  action
was unconstitutional and violative of Article 200  of  the  Constitution  of
India.

13)   Mr. Ashok H. Desai, learned senior counsel  for  the  State  of  U.P.,
submitted that the writ petition itself is not maintainable  in  law  or  on
facts.  In the absence  of  any  violation  of  fundamental  rights  of  the
petitioner himself, the present  writ  petition  under  Article  32  is  not
maintainable.  Moreover, the present writ petition has not been  filed  with
clean hands.  Mr. Desai pointed out that the petitioner has  merely  stated,
in a passing manner, that he is a practicing Advocate, which is not  a  fair
and candid statement.  The petitioner has  filed  the  writ  petition  as  a
proxy of Shri Naseemuddin Siddiqui,  ex-Cabinet  Minister,  U.P.  (presently
the  Leader  of  Bahujan  Samaj  Party/Leader  of  Opposition  in  the  U.P.
Legislative Council), against whom, along with others, Respondent No. 2  has
recommended action on grave charges of corruption.  The  petitioner  herein,
Mohd. Saeed Siddiqui, was the agent/representative (pairokar) of the son  of
Shri  Naseemuddin  Siddiqui  in  the  complaint  against  Shri   Naseemuddin
Siddiqui before  Respondent  No.  2  and  he  has  filed  the  present  writ
petition, as also his earlier writ petition, as a proxy of Shri  Naseemuddin
Siddiqui.

14)   It was further submitted that the petitioner, for oblique motives,  is
questioning  the  valid  legislative  and  executive  actions.    The   writ
petition, which has been filed  under  the  guise  of  redressing  a  public
grievance, is lacking in bona fides and is an outcome  of  malice  and  ill-
will, which the petitioner nurses against Respondent No. 2  for  making  the
reports specifically  those  against  Shri  Naseemuddin  Siddiqui.   In  the
present writ petition as also in his earlier writ petition,  the  petitioner
has  made  yet  another  collateral  attack  by  questioning  the  title  of
Respondent No.  2  to  the  office  of  Lokayukta  in  order  to  stall  the
action/enquiry in respect of the grave charges of corruption that  has  been
ordered pursuant to the reports of Respondent No. 2.

15)   Besides, learned senior counsel  for  the  State  submitted  that  the
petitioner has made a collateral attack by seeking a writ  of  quo  warranto
to enquire by what authority Respondent No. 2 is holding the office  of  the
Lokayukta, Uttar Pradesh and  at  the  same  time,  he  has  challenged  the
validity of that very law under which the Respondent No. 2  is  holding  the
said office, which is impermissible under the settled law. It is  the  stand
of the State that in a  writ  of  quo  warranto,  while  enquiring  by  what
authority a person holds a public office, it  is  impermissible  to  make  a
collateral attack on the validity of law or statutory provision under  which
that office is being held. Thus, the scope of a writ of quo  warranto  is  a
limited one, by virtue of which it may  be  enquired  by  what  authority  a
person holds a public office, but the validity of that authority  cannot  be
questioned. In this light, it is submitted that the  writ  petition  is  not
maintainable for making such a collateral attack.

16)      Mr. Desai also submitted that the Bill in question  was  manifestly
a Money Bill in view  of  Article  199(1)  of  the  Constitution  of  India.
Furthermore, the claim of the petitioner is  barred  by  the  constitutional
provisions, such as Articles 199(3) and 212 of the Constitution.  The  claim
of the petitioner that the Bill was passed only by the Legislative  Assembly
and not by both the Houses, is misconceived.  The petitioner has  overlooked
that since the Bill in question was a Money Bill, therefore, the  contention
that  it  was  passed  by  the  Legislative  Assembly  alone   is   per   se
misconceived.  Finally, Mr. Desai submitted that Respondent No.  2  is  duly
holding the office of the  Lokayukta  under  a  valid  law  enacted  by  the
competent legislature, viz., the Amendment Act.

17)   Dr. Abhishek Manu Singhvi reiterated the submission made by Mr.  Desai
and also pointed out the relevant provisions.

18)   Dr. Rajeev Dhawan, learned senior counsel for  Justice  N.K.  Mehrotra
(retd.), Respondent No. 2 herein, reiterated the contentions raised  by  Mr.
Desai.  In addition to the same, it is submitted that the  real  purpose  of
filing the writ petition and other connected matters is to stall  action  on
the reports of Respondent No. 2 in respect of grave  charges  of  corruption
against several ex-Ministers, Government  of  U.P.,  one  of  whom  is  Shri
Naseemuddin Siddiqui, ex-Cabinet Minister, U.P.

19)   Dr. Dhawan further submitted that the petitioner is a  proxy  of  Shri
Naseemuddin Siddiqui.  Further, both Shri Naseemuddin Siddiqui and his  wife
were members of the U.P. Legislature when the  Amendment  Act  was  enacted.
Accordingly, any challenge to the said Amendment  Act  by  Shri  Naseemuddin
Siddiqui or his wife would not be maintainable as they, as  sitting  members
of the State Legislature, cannot assail and disown an  action  of  the  same
State Legislature.

20)   Dr. Dhawan submitted that  Respondent  No.  2  was  appointed  as  the
Lokayukta, U.P. on 16.03.2006 and he is continuing as such after  15.03.2012
under a valid law, viz., the Amendment Act, which has been duly  enacted  by
the competent legislature.   It  was  urged  that  the  contentions  of  the
petitioner regarding Money  Bill  is  baseless  and  pointed  out  that  the
earlier two amendments to the Act in the year 1981 and  1988  were  also  by
way of Money Bills, which is concealed by the petitioner.  Further,  it  was
submitted that the finality of the Speaker’s decision  and  the  legislative
process cannot be challenged in a Court of law.

21)   We have carefully considered the rival  contentions  and  perused  all
the relevant materials.


Discussion:

22)   Among all the contentions/issues raised, the  main  challenge  relates
to the validity of U.P. Lokayukta and Up-Lokayuktas (Amendment)  Act,  2012.
In order to consider the claim of both the parties, it is  useful  to  refer
the relevant provisions.  The State of U.P. has brought an  Act  called  the
U.P. Lokayukta and Up-Lokayuktas Act, 1975 (U.P. Act 42 of 1975).  The  said
Act was enacted in order to make provision for appointment and functions  of
certain authorities  for  the  investigation  on  grievances  and  elections
against Ministers, legislators and other public servants in  certain  cases.
The Act came into force on 12.07.1977.



23)   Section 2(e) defines ‘Lokayukta’ which reads as under:

      “Lokayukta” means  a  person  appointed  as  the  Lokayukta  and  “Up-
      Lokayukta” means a person appointed as an Up-Lokayukta, under  Section
      3”.

24)   Section 3 relates to appointment of Lokayukta and Up-Lokayuktas  which
reads as under:
      “3. Appointment of Lokayukta and Up-Lokayuktas -
      (1) For the purpose of conducting investigations  in  accordance  with
      the provisions of this Act, the Governor shall, by warrant  under  his
      hand and seal, appoint a person to be known as the Lokayukta  and  one
      or more persons to be known as the Up-Lokayukta or Up-Lokayuktas:
      Provided that-
      (a) the Lokayukta shall be appointed after consultation with the Chief
      Justice of the High Court of Judicature at Allahabad and the Leader of
      the Opposition in the Legislative Assembly and if  there  be  no  such
      Leader a  person  elected  in  this  behalf  by  the  members  of  the
      opposition in that House in such manner as the Speaker may direct;
      (b)  the  Up-Lokayukta  or  Up-Lokayuktas  shall  be  appointed  after
      consultation with the Lokayukta:
      Provided further that where the Speaker of the Legislative Assembly is
      satisfied that circumstances exist on  account  of  which  it  is  not
      practicable to consult the Leader of the Opposition in accordance with
      clause (a) of the preceding proviso, he may intimate the Governor  the
      name of any other member of the Opposition in the Legislative Assembly
      who may be consulted under that clause instead of the  Leader  of  the
      Opposition.
      (2) Every person appointed as the Lokayukta or an  Up-Lokayukta  shall
      before entering  upon  his  office,  make  and  subscribe  before  the
      Governor or some person appointed in that behalf by him,  an  oath  or
      affirmation in the form set out for the purpose in the First Schedule.


      (3) The Up-Lokayuktas shall be subject to the  administrative  control
      of the Lokayukta and in  particular  for  the  purpose  of  convenient
      disposal of investigations under this Act,  the  Lokayukta  any  issue
      such general or special direction as he may consider necessary to  the
      Up-Lokayukta:
      Provided that nothing  in  this  sub-section  shall  be  construed  to
      authorize  the  Lokayukta  to  question  any  finding  conclusion   or
      recommendation of an Up-Lokayukta.”

25)   Section 5 speaks  about  terms  of  office  and  other  conditions  of
service of Lokayukta and Up-Lokayukta which reads as under:

      “5. Terms of office and other conditions of service of  Lokayukta  and
      Up-Lokayukta.-
      (1) Every person appointed as the Lokayukta or Up-Lokayukta shall hold
      office for a term of six years from the date of which he  enters  upon
      his office:
      Provided that,
      (a) the Lokayukta or an Up-Lokayukta may, by writing  under  his  hand
      addressed to the Governor, resign his office ;


      (b) the Lokayukta or an Up-Lokayukta may be removed from office in the
      manner specified in section 6.
                         xxx         xxx        xxx
      (3) On ceasing to hold office, the Lokayukta or an Up-Lokayukta  shall
      be ineligible for further employment (Whether as the Lokayukta  or  an
      Up-Lokayukta) or in any other capacity under the Government  of  Uttar
      Pradesh or for any employment  under  or  office  in  any  such  local
      authority corporation. Government, company or society as  is  referred
      to in sub-clause *(v) of clause *(1) of section 2.
      (4) There shall be  paid  to  the  Lokayukta  and  Up-Lokayuktas  such
      salaries as are specified in the Second Schedule.”

26)   Section 20A speaks about salary and allowances which reads as under:
      "20A.  Expenditure to be charged on Consolidated Fund.- It  is  hereby
      declared that the salary, allowances and  pension  payable  to  or  in
      Expenditure to be respect of the Lokayukta or the  Up-Lokayuktas,  the
      charged on expenditure relating to their staff and  office  and  other
      consolidated expenditure in respect of the implementation of this  Act
      shall be expenditure charged on the Consolidated Fund of the State  of
      Uttar Pradesh."

27)   It is highlighted by the State that under the said Act,  Justice  N.K.
Mehrotra (retd.) was  appointed  as  a  Lokayukta  vide  notification  dated
09.03.2006.  It is also highlighted that since the term of Justice  Mehrotra
(retd.) was expired on 15.03.2012 after the completion of the period of  six
years under the provisions of sub-section (1) of Section 5 of the  said  Act
and no decision had been taken for the appointment of another person as  the
Lokayukta and also taking note of  the  fact  that  since  the  decision  to
appoint another person would take time, it has been  decided  to  amend  the
said Act to provide for increasing the term of  Lokayukta  and  Up-Lokayukta
from six years to eight years or till his successor enters upon his  office.
 Initially, the State Government  promulgated  an  Ordinance,  namely,  U.P.
Lokayukta and Up-Lokayuktas (Amendment) Ordinance 2012 (U.P.  Ordinance  No.
1 of 2012).  The same was replaced by the Act, namely,  U.P.  Lokayukta  and
Up-Lokayuktas (Amendment) Act, 2012 (U.P. Act 4 of 2012).  As per  the  said
ordinance and Act, the amendment relating to Section 2 shall  be  deemed  to
have come into force on 15.03.2012 and the remaining provisions  shall  come
into force at once.  It is also relevant to refer the amendments brought  in
by this Amendment Act, which are as under:

      “Amendment of Section 5 of U.P. Act No. 42 of 1975

      2.    In Section 5 of the Uttar Pradesh  Lokayukta  and  Up-Lokayuktas
      Act, 1975 hereinafter referred to as the Principal Act.-

      (a) for sub-section (1) the following sub-section shall be substituted
      and be deemed to have been substituted on March 15, 2012 namely:-

      “(1) Every person appointed as the  Lokayukta  or  Up-Lokayukta  shall
      hold office for a term of eight years from the date on which he enters
      upon his office:

      Provided that the Lokayukta or an Up-Lokayukta shall,  notwithstanding
      the expiration of his term continue to hold office until his successor
      enters upon his office.

      Provided further that,-

      (a) the Lokayukta or an Up-Lokayukta may, by writing  under  his  hand
      addressed to the Governor, resign his office:

      (b) the Lokayukta or an Up-Lokayukta may be removed from office in the
      manner specified in Section 6.”

      (b)    for  sub-section  (3)  the  following  sub-section   shall   be
      substituted and be deemed to have been substituted on March  15,  2012
      namely:-

      “(3) On ceasing to hold office, the Lokayukta or an Up-Lokayukta shall
      be ineligible for further employment under  the  Government  of  Uttar
      Pradesh”

      (c) After sub-section (5) the following sub-section shall be inserted,
      namely:-

      “(6) The amendment  made  by  the  Uttar  Pradesh  Lokayukta  and  Up-
      Lokayuktas (Amendment) Act, 2012 shall be applicable  to  the  sitting
      Lokayukta or Up-Lokayuktas  as  the  case  may  be,  on  the  date  of
      commencement of the said Act.”

Amendment of Section 13

      “(5-b) After the investigation of any allegation under  this  Act,  if
      the Lokayukta or the Up-Lokayukta is satisfied that such investigation
      has resulted in injustice or caused defamation to the concerned public
      servants, he may on their application,  award  compensation  recording
      reasons therefore not exceeding the maximum amount of the cost, out of
      the cost as imposed on the complainant under sub-section (5-a) to such
      public servant, who has suffered any loss by reason  of  injustice  or
      defamation, and such compensation shall be charged on the Consolidated
      Fund of the State.”

Amendment of Section 20-A

      “For section 20-A of the principal Act, the following section shall be
      substituted, namely:-

      “20-A.  It is hereby declared that  the  salary,  allowances  and  the
      pensions payable to  or  in  respect  of  the  Lokayukta  or  the  Up-
      Lokayuktas, the expenditure relating to their staff and office and the
      amount of compensation awarded to the Public Servant under sub-section
      (5-b) of section 13 by reason of injustice  or  defamation  and  other
      expenditure, in respect of implementation of the  provisions  of  this
      Act, shall be an expenditure charged on the Consolidated Fund  of  the
      State.”

28)   We have already noted the object of bringing  the  ordinance  and  the
Act for amendment of certain provisions.  In  order  to  further  understand
the intention of the Government for bringing such amendment,  it  is  useful
to refer the statement of “objects and reasons”, which is as under:

      “Statement of objects and reasons:-

      The Uttar Pradesh Lokayukta and Up-Lokayuktas Act, 1975 (U.P. Act  no.
      42 of 1`975) has been enacted to make provision  for  the  appointment
      and functions of certain authorities for the investigation  grievances
      and  allegations  against  minister,  Legislators  and  other   public
      servants in certain cases.  Under the said Act  Shri  Narendra  Kishor
      Mehrotra was appointed as Lokayukta vide notification no. 40 Lo.Aa/39-
      4-2006-15(5) 2006, dated March  9,  2006  from  the  date  he  resumes
      office.  Shri Mehrotra resumed his office after taking oath  on  March
      16, 2006.  The term of Shri Mehrotra as such was expired on March  15,
      2012 after the completion of the period of six years  under  the  then
      provisions of sub-section (1) of Section 5 of  the  said  Act  and  no
      decision had been taken for the appointment of another person  as  the
      Lokayukta.  Since the decision to appoint another  person  would  take
      time, it has been decided  to  amend  the  said  Act  to  provide  for
      increasing the term of Lokayukta and Up-Lokayuktas from six  years  to
      eight years or till his successor enters upon his office, to limit the
      ineligibility  of  the  Lokayukta   or   Up-Lokayuktas   for   further
      appointment under the Government of Uttar Pradesh only on  ceasing  to
      hold office as such and for making the said provisions  applicable  to
      the sitting Lokayukta or UP-Lokayuktas as the case may  be,  on  March
      15, 2012.

           Since the State Legislature was not  in  session  and  immediate
      Legislative action was necessary, the Uttar Pradehs Lokayukta  or  Up-
      Lokayuktas (Amendment) Ordinance, 2012 (U.P. Ordinance No. 1 of  2012)
      was promulgated by the Governor on March 22, 2012.”

29)   Though elaborate arguments have been made by  Mr.  K.K.  Venugopal  as
well as Mr. Desai about the merits  of  the  various  recommendations/orders
passed by Respondent No. 2 - Lokayukta in respect of  former  Ministers  and
persons connected with the government in these  matters,  we  are  primarily
concerned about the  validity  of  the  Amendment  Act  and  continuance  of
Respondent No. 2 as Lokayukta even after expiry of his term.

30)   The main apprehension of the petitioner is that the Bill that  led  to
the enactment of the Amendment Act was passed as a Money Bill  in  violation
of Articles 197 and 198 of the Constitution of India which should have  been
passed by  both  the  Houses,  viz.,  U.P.  Legislative  Assembly  and  U.P.
Legislative Council and was wrongly passed  only  by  the  U.P.  Legislative
Assembly.  During the course of hearing, Mr. Desai, learned  senior  counsel
appearing for the State of U.P., placed the original records  pertaining  to
the proceedings of the Legislative Assembly,  decision  of  the  Speaker  as
well as the Governor, which we are going to discuss in  the  later  part  of
our judgment.

31)   Article 199 of the Constitution defines “Money Bills”, which reads  as
under:
      “199 - Definition of "Money Bills"

      (1) For the purposes of this Chapter, a Bill shall be deemed to  be  a
      Money Bill if it contains only provisions dealing with all or  any  of
      the following matters, namely:--


      (a) the imposition, abolition, remission, alteration or regulation  of
      any tax;


      (b) the regulation of the borrowing of money  or  the  giving  of  any
      guarantee by the State, or the amendment of the law  with  respect  to
      any financial obligations undertaken or to be undertaken by the State;


      (c) the custody of the Consolidated Fund or the  Contingency  Fund  of
      the State, the payment of moneys into or the withdrawal of moneys from
      any such Fund;


      (d) the appropriation of moneys out of the Consolidated  Fund  of  the
      State;


      (e) the declaring of any expenditure to be expenditure charged on  the
      Consolidated Fund of the State, or the increasing of the amount of any
      such expenditure;


      (f) the receipt of money on account of the Consolidated  Fund  of  the
      State or the public account of the State or the custody  or  issue  of
      such money; or


      (g) any matter incidental to any of  the  matters  specified  in  sub-
      clauses (a) to (f).


      (2) A Bill shall not be deemed to be a Money Bill by reason only  that
      it provides for the imposition of fines or other pecuniary  penalties,
      or for the demand or payment of fees for licences or fees for services
      rendered, or by reason that it provides for the imposition, abolition,
      remission, alteration or regulation of any tax by any local  authority
      or body for local purposes.


      (3)  If  any  question  arises  whether  a  Bill  introduced  in   the
      Legislature of a State which has a Legislative Council is a Money Bill
      or not, the decision of the Speaker of  the  Legislative  Assembly  of
      such State thereon shall be final.


      (4) There shall be endorsed on every Money Bill when it is transmitted
      to the Legislative Council under article 198, and when it is presented
      to the Governor for assent under article 200, the certificate  of  the
      Speaker of the Legislative Assembly signed by him that it is  a  Money
      Bill.”






32)   It is also useful to refer Article 212 which reads as under:

      “212 - Courts not to inquire into proceedings of the Legislature


      (1) The validity of any proceedings in  the  Legislature  of  a  State
      shall not  be  called  in  question  on  the  ground  of  any  alleged
      irregularity of procedure.


      (2) No officer or member of the Legislature of a State in whom  powers
      are vested by or under this Constitution for regulating  procedure  or
      the conduct of business, or for maintaining order, in the  Legislature
      shall be subject to the jurisdiction of any court in  respect  of  the
      exercise by him of those powers.”


33)   The above provisions make it clear that the finality of  the  decision
of the Speaker and the proceedings of the State Legislature being  important
privilege of the State Legislature, viz.,  freedom  of  speech,  debate  and
proceedings are not to be inquired by the Courts.  The  “proceeding  of  the
Legislature” includes everything  said  or  done  in  either  House  in  the
transaction of the Parliamentary Business, which  in  the  present  case  is
enactment of the Amendment Act. Further, Article 212  precludes  the  Courts
from interfering with the presentation of a Bill for assent to the  Governor
on the ground of non-compliance with the procedure  for  passing  Bills,  or
from otherwise questioning the Bills passed by the House.  To put it  clear,
proceedings inside the Legislature cannot be called  into  question  on  the
ground that they have not been carried on in accordance with  the  Rules  of
Business.  This is also evident from Article  194  which  speaks  about  the
powers, privileges of the House of  Legislatures  and  of  the  members  and
committees thereof.

34)   We have already quoted Article 199.  In terms of Article  199(3),  the
decision of the Speaker  of  the  Legislative  Assembly  that  the  Bill  in
question was a Money Bill is final and the said decision cannot be  disputed
nor can the procedure of  State  Legislature  be  questioned  by  virtue  of
Article 212.  We are conscious of the fact that  in  the  decision  of  this
Court in Raja Ram Pal vs. Hon’ble Speaker Lok Sabha and Others (2007) 3  SCC
184, it has been held that the proceedings which may be tainted  on  account
of  substantive  or  gross  irregularity  or  unconstitutionality  are   not
protected from judicial scrutiny.

35)   Even if it is  established  that  there  was  some  infirmity  in  the
procedure in the enactment of the Amendment Act, in terms of Article 255  of
the Constitution the matters of procedures do not render invalid an  Act  to
which assent has been given to by the President  or  the  Governor,  as  the
case may be.

36)   In the case of M.S.M. Sharma vs. Shree Krishna Sinha AIR 1960 SC  1186
and Mangalore Ganesh Beedi Works vs. State of Mysore and  Another  AIR  1963
SC 589, the Constitution Benches of this Court held that  (i)  the  validity
of an Act cannot be challenged on the ground that it  offends  Articles  197
to 199 and the  procedure  laid  down  in  Article  202;  (ii)  Article  212
prohibits the validity of any proceedings in a Legislature of a  State  from
being called in question on  the  ground  of  any  alleged  irregularity  of
procedure; and (iii) Article 255 lays  down  that  the  requirements  as  to
recommendation and previous sanction are to  be  regarded  as  a  matter  of
procedure only.  It is further held that the  validity  of  the  proceedings
inside the Legislature of a State  cannot  be  called  in  question  on  the
allegation that the procedure laid down by the law  has  not  been  strictly
followed and that no Court can go into those questions which are within  the
special jurisdiction of the Legislature  itself,  which  has  the  power  to
conduct its own business.

37)   Besides, the question whether a Bill is a Money Bill  or  not  can  be
raised only in the State Legislative Assembly by a member thereof  when  the
Bill is pending in the State Legislature and before it becomes an  Act.   It
is brought to our notice that in the instant case no such question was  ever
raised by anyone.

38)   Mr. K.K. Venugopal, learned senior  counsel  for  the  petitioner  has
also raised another  contention  that  the  Bill  was  passed  only  by  the
Legislative Assembly and not by both the Houses.  In other words,  according
to him, it was not passed by the Legislative  Council  and,  therefore,  the
Amendment Act is bad.

39)   Chapter III of Part VI  of  the  Constitution  deals  with  the  State
Legislature.   Article  168  relates  to  constitution  of  Legislatures  in
States.  The  said  Article  makes  it  clear  that  the  State  Legislature
consists of the Governor,  the  Legislative  Assembly  and  the  Legislative
Council.  After the Governor’s assent to a Bill, the consequent Act  is  the
Act of the State Legislature without any distinction between its Houses,  as
projected by the  petitioner.   We  have  also  gone  through  the  original
records placed by the State and we are satisfied that there is no  infirmity
in passing of the Bill and the enactment of the Amendment  Act,  as  claimed
by the petitioner.

40)   Though it is claimed that  the  Amendment  Act  could  not  have  been
enacted by passing the Bill as a Money Bill because the Act was not  enacted
by passing the Bill as a Money Bill, as rightly pointed  out,  there  is  no
such rule that if the Bill in a case of an original  Act  was  not  a  Money
Bill, no subsequent Bill for amendment of the original Act can  be  a  Money
Bill.  It is brought to our notice that the Act has been amended earlier  by
the U.P. Lokayukta and Up-Lokayuktas (Amendment) Act, 1988 and the same  was
enacted by passing the Money Bill.  By  the  said  Amendment  Act  of  1988,
Section 5(1) of the Act  was  amended  to  provide  that  the  term  of  the
Lokayukta and Up-Lokayukta shall be six years instead of five years.

41)   With regard to giving effect to the Amendment Act retrospectively,  as
rightly pointed out by the State, a deeming  clause/legal  fiction  must  be
given full effect and shall  be  carried  to  its  logical  conclusion.   As
observed in K. Kamaraja Nadar vs. Kunju Thevar AIR 1958 SC 687,  the  effect
of a legal fiction is that a position which otherwise would  not  obtain  is
deemed to obtain under those circumstances.  The  materials  placed  clearly
show that the Amendment Act has been  enacted  by  a  competent  legislature
with legislative intent to provide a term of eight years  to  Lokayukta  and
Up-Lokayukta, whether present or future, to ensure effective  implementation
of the Act.  We are also satisfied that the aforesaid extension of the  term
of Lokayukta and Up-Lokayukta from six years to eight years is a  matter  of
legislative policy and it cannot be narrowed down by saying  that  the  same
was enacted only for the benefit of Respondent No. 2.

42)   As discussed above, the decision of the  Speaker  of  the  Legislative
Assembly that the Bill in question was a Money Bill is final  and  the  said
decision cannot be disputed nor can the procedure of the  State  Legislature
be questioned by virtue of Article 212.  Further, as noted earlier,  Article
252 also shows that under the Constitution the matters of procedure  do  not
render invalid an Act to which assent has been given to by the President  or
the Governor, as the case may be.  Inasmuch as the Bill in  question  was  a
Money Bill, the contrary contention by the petitioner  against  the  passing
of the said Bill by the Legislative Assembly alone is unacceptable.

43)   In the light of the above discussion, we hold that  Respondent  No.  2
is duly holding the office of Lokayukta, U.P. under a valid law  enacted  by
the competent  legislature,  viz.,  the  Uttar  Pradesh  Lokayukta  and  Up-
Lokayuktas Act, 1975 as amended by  the  Uttar  Pradesh  Lokayukta  and  Up-
Lokayuktas (Amendment) Act, 2012.   However, we direct  the  State  to  take
all endeavors for selecting the new incumbent for the  office  of  Lokayukta
and Up-Lokayuktas as per the provisions  of  the  Act  preferably  within  a
period of six months from today.

44)   Under these circumstances, all the writ petitions filed under  Article
32 of the Constitution of  India  before  this  Court  are  dismissed.   The
appeal filed by the State of U.P.  and  the  T.C.(C)  No.  74  of  2013  are
disposed of on the above terms.  Inasmuch as  we  have  not  gone  into  the
merit of the decisions taken by Respondent No. 2 –  Lokayukta,  the  matters
questioning  those  decisions  which  are  pending  in  the  High  Court  of
Judicature at Allahabad/Lucknow Bench are to be disposed  of  on  merits  in
the light of the above conclusion  upholding  the  Amendment  Act  of  2012.
Accordingly, the transfer petitions are disposed of.


                                  .…….…………………………CJI.


                                       (P. SATHASIVAM)






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


                                      (RANJAN GOGOI)




















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


                                      (N.V. RAMANA)


NEW DELHI;
APRIL 24, 2014.
-----------------------
21


Doctrine of Public Trust - Sale of property by public or private - Cachar Tea Farming and Industrial Cooperative Society-Ex- Officio liquidator issued a notice inviting tenders for the sale of Chincoorie Tea Estate owned by Cachar Tea Farming and Industrial Cooperative Society Ltd. The concerned tea estate measured 9951 bighas.- tender of the sale of the concerned land was floated without the prior approval of the government - Tender Notification was cancelled - challenged - High court allowed the writ and directed to execute a registered sale deed - Apex court held that in the light of the legal principle laid down by this Court with regard to Public Trust Doctrine in Mahesh Chandra’s case (supra) and the cases mentioned supra, we are inclined to observe that the liquidator did not act fairly and reasonably in the best interest of the public of the State whose interest he is required to uphold. As per the material evidence put on record, the liquidator and the concerned authority did not take any step to improve the condition of the land and sell it at reasonable andstandard price prevalent at the time of sale of the property in question. Hence, we hold that the tender process initiated by the appellants is not legal and is liable to be set aside. We direct the concerned authority to issue fresh notice of tender for selling the land. The notice shall be made available in government websites and other local and national newspapers so as to encourage and invite more bidders. In the meanwhile, the authority shall take all necessary steps to improve and restore the condition of the land so as to make the purchase of the land free from legal encumbrances.= STATE OF ASSAM & ORS. ………APPELLANTS VS. SUSRITA HOLDINGS PVT. LTD. ……RESPONDENT= 2014 ( April.Part ) judis.nic.in/supremecourt/filename=41462

  Doctrine of Public Trust - Sale of property by public or private - Cachar  Tea  Farming  and
Industrial Cooperative Society-Ex- Officio liquidator issued a notice inviting tenders for the sale  of  Chincoorie Tea Estate owned by Cachar Tea Farming and  Industrial  Cooperative  Society
Ltd. The concerned tea estate measured 9951 bighas.- tender of  the  sale  of  the  concerned
land was floated without the prior approval of the  government - Tender Notification was cancelled - challenged - High court allowed the writ and directed to execute a registered sale deed - Apex court held that in the light of the legal principle laid down by  this  Court with regard to Public Trust Doctrine in Mahesh Chandra’s  case  (supra)  and the cases mentioned supra, we are inclined to observe  that  the  liquidator did not act fairly and reasonably in the best interest of the public of  the State whose interest he is required to uphold. As per the material  evidence
put on record, the liquidator and the concerned authority did not  take  any step to improve the condition of the land and  sell  it  at  reasonable  andstandard price prevalent at the time of sale of the property in question. Hence, we hold that the tender process initiated by  the  appellants  is
not legal and is liable to be set aside. We direct the  concerned  authority to issue fresh notice of tender for selling the land. The  notice  shall  be made  available  in  government  websites  and  other  local  and   national newspapers so as to encourage and invite more  bidders.  In  the  meanwhile, the authority shall take all necessary steps  to  improve  and  restore  the condition of the land so as to make the  purchase  of  the  land  free  from legal encumbrances.=

whether the appellants lawfully cancelled the tender process in relation  to
the property in question in view of the discrepancies crept in  the  process
of transfer of the land in favour of the respondent.=

 It is an undisputed fact that in the present  times  consideration  of
Rs.1.11 crores for 9000 bighas of land does not reflect the  correct  market
value prevalent at the relevant point of time and  not  even  to  the  civil
valuer’s report without either factual or legal basis. 
As per the report  of
the Joint Registrar of Co-operative Societies dated 31.02.2006, the  updated
registered value of the concerned tea garden stands at  Rs.4,24,72,124/-  as
opined by Sri. M.P. Gindora, Tea  Consultant  and  Registered  Valuer.  This
report however, carried a qualifier along with  it.  I
t  is  stated  in  the
report on the assumption that it is hardly  expected  that  any  party  will
come forward to purchase an existing tea garden with huge  encroachment.  As
per the facts put on record,  the  total  area  of  the  estate  is  1247.29
Hectares out of which 70% is encroached. 
However, this  alone  cannot  be  a
ground for the Joint Registrar of Co-operative Societies to  opine  that  it
would not fetch the value of the property as indicated by the valuer in  the
report. 
Therefore, there was no justification for  the  appellants  to  sell
the property at an  extremely  low  price  without  any  effort  of  issuing
eviction notice to the alleged encroachers to evict them  by  following  the
due process of law. 
There will not be any impediment for the  appellants  to
evict trespassers from the land in question without  considering  the  above
relevant aspects of the case. 
The High Court granted the  relief  in  favour
of the respondent in its writ petition by quashing the order  of  cancelling
the tender process by the  officer  of  the  appellant  No.  1  and  further
directing the appellants to execute the sale deed  accepting  the  offer  of
the respondent.

30. Further, according to the material placed on record, the land  concerned
involves significant amount of public  money.  Therefore,  its  transfer  in
favour of the respondent attracts the greatest amount of responsibility  and
caution. The competent valuer had already determined  the  registered  value
of land at       Rs.4,24,72,124/-. Therefore, it was the  responsibility  of
the  concerned  authority  to  ensure  all  steps  which  should  have  been
undertaken to sell the land at a minimum cost of Rs.4,24,72,124/-  or  above
instead of its attempt to sell the same at  a  lower  price  merely  on  the
pretext that no one would come up to  purchase  the  land  at  the  valuer’s
price or that since the land is an  encroached  land,  the  lower  price  is
justified cannot be accepted.

              Therefore, in the light of the legal principle laid down by  this  Court
with regard to Public Trust Doctrine in Mahesh Chandra’s  case  (supra)  and
the cases mentioned supra, we are inclined to observe  that  the  liquidator
did not act fairly and reasonably in the best interest of the public of  the
State whose interest he is required to uphold. As per the material  evidence
put on record, the liquidator and the concerned authority did not  take  any
step to improve the condition of the land and  sell  it  at  reasonable  and
standard price prevalent at the time of sale of the property in question.

33. Hence, we hold that the tender process initiated by  the  appellants  is
not legal and is liable to be set aside. We direct the  concerned  authority
to issue fresh notice of tender for selling the land. The  notice  shall  be
made  available  in  government  websites  and  other  local  and   national
newspapers so as to encourage and invite more  bidders.  In  the  meanwhile,
the authority shall take all necessary steps  to  improve  and  restore  the
condition of the land so as to make the  purchase  of  the  land  free  from
legal encumbrances.

34. Since, the respondent had paid up the entire bid amount, it is  entitled
to refund of the entire amount. Further, since it is also  proved  that  the
amount paid by the  respondent  has  been  used  to  pay  the  arrears,  the
respondent is entitled to interest for the amount paid  @7%  p.a.  from  the
date of payment till the date of refund.

35. Accordingly, we set aside the order dated 2.2.2012 passed  by  the  High
Court of Guwahati in M.C. No.5 of 2012 in Writ Appeal Sl. No.168339 of  2011
after condoning the delay and consequently  we  allow  the  writ  appeal  by
allowing this Civil Appeal.
2014 ( April.Part ) judis.nic.in/supremecourt/filename=41462
GYAN SUDHA MISRA, V. GOPALA GOWDA

               NON-REPORTABLE




                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.4849 OF 2014
                    (ARISING OUT OF SLP(C) 14843 OF 2012)








STATE OF ASSAM & ORS.                        ………APPELLANTS

                                     VS.

SUSRITA HOLDINGS PVT. LTD.                      ……RESPONDENT




                               J U D G M E N T



V. GOPALA GOWDA, J.


     Leave granted.

2.  This appeal is filed by the appellants questioning  the  correctness  of
the impugned judgment and final Order dated  2.2.2012  passed  by  the  High
Court of Guwahati, Assam,  in  M.C.  No.  5  of  2012  in  Writ  Appeal  Sl.
No.168339  of  2011,  urging  various  facts  and   legal   contentions   in
justification of their claim.

3. Necessary relevant facts are stated hereunder to appreciate the  case  of
the appellants and also to find out whether the appellants are entitled  for
the relief as prayed in this appeal.

4. The Government of Assam issued instructions in respect of  alienation  of
tea garden land from time to time, particularly, letter  no.  RSS  573/94/25
dated 26.3.2001 of the Government of Assam, Revenue (Settlement)  Department
requiring prior approval of the Government.

5. On 30.10.2006, following  the  dissolution  of  Cachar  Tea  Farming  and
Industrial Cooperative Society, the Cachar  Ex- Officio  liquidator,  Cachar
Tea  Farming  and  Industrial  Cooperaive  Society  Ltd,   (in   short   the
‘Liquidator’), issued a notice inviting tenders for the sale  of  Chincoorie
Tea Estate owned by Cachar Tea Farming and  Industrial  Cooperative  Society
Ltd. The concerned tea estate measured 9951 bighas.

6. As on 5.1.2007, no tender had been cast in response to the tender  notice
issued. Therefore, a fresh tender notice dated 5.1.2007, was issued  by  the
liquidator with minor modifications made on the previous tender notice.  The
land mentioned in the modified notice admeasured 9000 bighas. The last  date
for submission of tenders was fixed at 29.1.2007 which was further  extended
to 26.2.2007 upto 2 p.m. by another modified tender notice dated  28.1.2007.


7. It is pertinent to note that the tender of  the  sale  of  the  concerned
land was floated without the prior approval of the  government  as  required
by instructions issued in respect of alienation  of  tea  garden  land  from
time to time, particularly, letter no. RSS 573/94/25 dated 26.3.2001 of  the
Government  of  Assam  Revenue  (Settlement)  Department.  The  other  codal
formalities for tender process were not followed either.

8. On 26.2.2007, two tender bids were received. The respondent  herein  made
a bid for Rs.1.11 crore. Another party, M/s Luxmi Township made  a  bid  for
Rs.1.05 crore. However,  since  the  respondent  had  submitted  his  tender
document by  hand  at  3:45  p.m.,  the  same  was  objected  by  the  other
contender. The respondent was still considered the only valid bidder.

9. The Liquidator subsequently, vide Order dated  21.4.2007,  cancelled  the
tender process by observing that the price quoted by  the  parties  for  the
9000 bighas of land is not at all justifiable. Further, M/s  Luxmi  Township
Pvt. Ltd. had intimated that the entire  stamp  duty  for  the  transfer  of
land, in case of  a  valid  sale,  has  to  be  borne  by  the  Ex-  Officio
Liquidator of CTFICS Ltd. The bid value is based  on  this  condition  which
the liquidator did not agree.

10. The respondent  thereafter,  filed  a  Writ  Petition  (C)No.  1928/2007
before the Guwahati High Court  after the tender process had been  cancelled
vide Order dated 21.4.2007. In the  Writ  Petition,  the  respondent  sought
directions for the Official respondents therein  to  issue  final  Order  of
award in favour of the respondent  herein.  The  respondent  further  sought
restrain order from cancelling the tender process and  initiation  of  fresh
tender process. The High Court, vide Order dated 27.4.2007,  restrained  the
Official respondents therein from initiating fresh process for the  disposal
of the land involved. The Order further clarified that it  shall  not  be  a
bar to issue Order in favour of the respondent herein.

11. The Liquidator, on 9.5.2007, issued notice in a local daily-  The  Assam
Tribune, declaring that the tender process had  been  cancelled  vide  Order
dated 21.4.2007. The respondent thereafter, filed another Writ Petition  (C)
No. 2416/2007 before the Guwahati High  Court  impugning  the  notice  dated
9.5.2007. The High Court, vide Order  dated  23.5.2007,  issued  notice  and
directed that the notice dated 9.5.2007 shall not be given effect  till  the
returnable date.

12. The Respondent next filed  a  Writ  Petition  (C)         No.  2971/2007
challenging the cancellation Order by the  liquidator  dated  21.4.2007.  In
the meantime, the Joint Registrar of the Co-operative Societies forwarded  a
report to the Registrar of the Co-operative Societies by issuing  letter  to
him.

13. The Deputy Registrar who had cancelled the sale of the  tea  garden  was
transferred by that time. His successor vide letter dated  2.7.2009,  sought
permission/approval of the  Registrar  of  the                  Co-operative
Societies to dispose of the land in question in  favour  of  the  respondent
herein in the light of the Order of the High Court dated 27.4.2007  in  W.P.
(c) No. 1928/ 2007.

14. Thereafter, vide  Order  dated  23.7.2009,  the  Registrar  of  the  Co-
operative Societies, permitted the Liquidator to  dispose  of  the  property
involved in favour of the respondent herein.

15. The  Deputy  Registrar  issued  an  award  letter  dated  27.8.2009  and
thereafter, signed the  agreement  for  sale  of  the  tea  garden  land  on
2.9.2009 and sent a draft copy of the Deed of Agreement for the sale of  the
land in question. The respondent was required to make an initial  deposition
of 25% of the total bid initially within a week of issuance thereof, as  per
the terms laid in Clause 3 of the Deed of Agreement. The  remaining  75%  of
the total consideration amount was required to be paid by the respondent  at
the time of execution of the sale deed, subject however, to  the  withdrawal
of W.P. (C) No. 1928/2007 by the respondent. The Writ  Petition  was  closed
subsequently since it was not pursued.

16.  The  sub-Registrar  (Registration),  Silchar  was  approached  by   the
liquidator on  9.12.2009  for  registration  of  the  sale  deed.  The  sub-
Registrar asked the  liquidator  to  produce  permission/approval  from  the
Revenue Department for registration of the  sale  deed.  The  liquidator  on
10.12.2009, wrote to the Registrar of  the  Co-operative  Societies  seeking
instruction on the same. The  Liquidator  however,  could  not  produce  the
government permission for execution of the sale deed in respect of the  land
in question. Therefore, the sale deed could not be  executed  in  favour  of
the respondent.

Therefore, vide  Communication  dated  20.1.2010  from  the  Secretary,  Co-
operation Department to the Deputy Commissioner, Cachar, he was directed  to
refrain from registering the  sale  deed  in  respect  of  the  property  in
question without the clearance from the Co-operation Department.

17. Aggrieved by the same, the respondent filed another  Writ  Petition  (C)
No. 4147/2010 before the High Court seeking a  direction  to  the  appellant
for execution of the  sale  deed  in  its  favour  and  also  to  quash  the
communication  dated  20.1.2010  of  the  Secretary  of   the   Co-operation
Department which gave direction  to  the  Deputy  Commissioner,  Cachar,  to
refrain him from  registering the sale deed without the clearance of the Co-
operation Department.

18. The High Court held that since the amount has already been paid  by  the
respondent to the  Department,  there  is  no  question  of  taking  further
approval from the government. Therefore, the High Court directed the  Deputy
Registrar of the Co-operative Societies to follow up the  execution  of  the
sale deed in respect of the property and its registration.

19. The said order was forwarded to the higher authority. However, the  sale
deed did not get registered subsequently which was followed  by  a  Contempt
Case No. 443/2010 initiated by the respondent.

20. The appellants filed a Review Petition No. 112/  2010  before  the  High
Court seeking review of its Order dated 6.8.2010  passed  in  W.P.  (c)  No.
4147/2010. In the meanwhile, the Deputy  Commissioner,  Cachar  vide  letter
dated 13.10.2010 to Secretary, Revenue, sought approval  of  the  government
for alienation of the garden land.  In  response  to  the  letter  mentioned
above, the Deputy Secretary, Revenue and Disaster Management wrote a  letter
dated 29.11.2010 to the Deputy  Secretary,          Co-operation  Department
to submit a report in order to accord approval for alienation of  the  land.
Another letter was issued to  the  Deputy  Commissioner,  Cachar  to  submit
proposal as per Government land policy  and  guidelines  for  alienation  of
garden land.

21. The Review Petition No. 112/2010 filed by the  appellant  was  dismissed
by the High Court on 2.2.2011.

      On 29.6.2011, the  letter  dated  24.5.2011  was  put  up  before  the
Principal  Secretary.  The  Principal  Secretary  in  turn,  forwarded   the
proposal to the Minister, Revenue and  Disaster  Management  Department  for
obtaining necessary approval from the Chief Minister of Assam State  on  the
condition that the land under transfer will be used only for the purpose  of
tea cultivation and no  bona  fide  worker  or  the  erstwhile  Co-operative
Society should be adversely affected by the transfer of ownership.

22. The Chief  Minister  of  the  State  observed  that  there  are  various
discrepancies in the proposal forwarded to him and therefore,  directed  the
Revenue  Department  to  examine  the  matter  and  to  consult  the   Legal
Remembrancer for further course of action in case discrepancies  are  found.
The Legal Remambrancer observed that since loss of  huge  amount  of  public
money to the  tune  of  several  crores  is  involved  in  the  matter,  the
government might prefer an appeal before the Division Bench in wider  public
interest along with petition  for  condonation  of  delay.  Accordingly,  an
appeal was filed by the appellants against the Order dated  6.8.2010  passed
by the High Court in W.P. (C) No. 4147/2010. The High  Court  however,  vide
Order dated 2.2.2012, rejected the  application  for  condonation  of  delay
being M.C. No. 5/ 2011 in WA Sl. No. 168339/2011.

23. The High Court opined that the time lag between 2.2.2011 and  22.11.2011
has not at all been convincingly explained by  the  appellants.  Though  the
State is in shackle by unavoidable official formalities  to  streamline  its
decision,  however,  the  explanation  offered  by  the  appellants  towards
justification of the delay in filing the appeal is insufficient and  it  has
dismissed the condonation of delay application  and  consequently  dismissed
the writ appeal.

24. The appellants have come in appeal  before  this  Court  mainly  on  two
grounds:

Firstly, the impugned Order  is  violative  of  the  principles  of  natural
justice. The appellants in the writ proceedings, have not been  afforded  an
opportunity to file their affidavits on merits.  Also,  the  Order  in  this
perspective is unsafe to be acted  upon  since  enormous  amount  of  public
revenue is involved in the matter.

Secondly, the appellants claim that the transaction sought to  be  completed
squarely within the realm of a contract.  Therefore,  no  direction  in  the
nature of mandamus could have been issued to the appellants as the  same  is
not permissible in law, and rendered the impugned decision void ab initio.

25. The impugned Order passed by the  High  Court  stated  that  the  appeal
brought before it by the appellants has been  dismissed  on  the  ground  of
delay. Though, submissions were made by  both  the  parties  explaining  the
cause for delay. However, instead of deciding this issue on merit which  was
required in this case as it involved substantial question of law and  public
interest, the Court dismissed the case on the ground of delay after  hearing
the submissions of the parties.

26. We are of the opinion that  the  High  Court  erred  in  dismissing  the
appeal of the appellants on the ground of delay since this  appeal  requires
to be heard on merit. There is no qualm on the fact that there  has  been  a
delay of 9 months in filing the Review Petition.  The  appellants  contended
that the delay was due to unavoidable government procedure involved.

27. It has been held by this Court in the case of G.  Ramegowda,  Major  and
Ors. v. Special Land Acquisition Officer, Bangalore[1] that:

        “15. In litigations to which Government is a  party  there  is  yet
        another aspect  which,  perhaps,  cannot  be  ignored.  If  appeals
        brought by Government are lost for  such  defaults,  no  person  is
        individually affected; but what, in the ultimate analysis,  suffers
        is public interest. The decisions of Government are collective  and
        institutional decisions and do not  share  the  characteristics  of
        decisions of private individuals.




          XXX                     XXX                   XXX




        17. Therefore, in assessing what, in a particular case, constitutes
        "sufficient cause" for purposes of Section 5, it might, perhaps, be
        somewhat unrealistic to exclude from  the  considerations  that  go
        into the judicial verdict, these factors which are peculiar to  and
        characteristic of the functioning of  the government.  Governmental
        decisions are proverbially slow  encumbered,  as  they  are,  by  a
        considerable degree of procedural red tape in the process of  their
        making.”




Therefore, regarding the matter of delay in this case, we  are  inclined  to
observe that the  malfunctioning  of  the  State  Government  regarding  the
unpardonable lackadaisical attitude towards pursuing matter in the court  of
law cannot be the reason for loss of public property, which involves  public
money and causes loss to the public exchequer. Therefore, we  feel  that  it
is a fit case to exercise our discretionary power to condone  the  delay  in
filing the writ appeal in the interest of public at large as the High  Court
has failed to do so. We therefore, condone the delay in  filing  the  Review
Petition by the appellants before the High Court in the larger  interest  of
public. However, this case should not set a precedent to justify  inordinate
delays on the part of the State Government to  file  appeals  or  any  other
legal proceedings required to be  filed  within  the  period  of  limitation
prescribed in law.

28. The only legal issue before  us  for  our  consideration  is  therefore,
whether the appellants lawfully cancelled the tender process in relation  to
the property in question in view of the discrepancies crept in  the  process
of transfer of the land in favour of the respondent.

29.   It is an undisputed fact that in the present  times  consideration  of
Rs.1.11 crores for 9000 bighas of land does not reflect the  correct  market
value prevalent at the relevant point of time and  not  even  to  the  civil
valuer’s report without either factual or legal basis. As per the report  of
the Joint Registrar of Co-operative Societies dated 31.02.2006, the  updated
registered value of the concerned tea garden stands at  Rs.4,24,72,124/-  as
opined by Sri. M.P. Gindora, Tea  Consultant  and  Registered  Valuer.  This
report however, carried a qualifier along with  it.  It  is  stated  in  the
report on the assumption that it is hardly  expected  that  any  party  will
come forward to purchase an existing tea garden with huge  encroachment.  As
per the facts put on record,  the  total  area  of  the  estate  is  1247.29
Hectares out of which 70% is encroached. However, this  alone  cannot  be  a
ground for the Joint Registrar of Co-operative Societies to  opine  that  it
would not fetch the value of the property as indicated by the valuer in  the
report. Therefore, there was no justification for  the  appellants  to  sell
the property at an  extremely  low  price  without  any  effort  of  issuing
eviction notice to the alleged encroachers to evict them  by  following  the
due process of law. There will not be any impediment for the  appellants  to
evict trespassers from the land in question without  considering  the  above
relevant aspects of the case. The High Court granted the  relief  in  favour
of the respondent in its writ petition by quashing the order  of  cancelling
the tender process by the  officer  of  the  appellant  No.  1  and  further
directing the appellants to execute the sale deed  accepting  the  offer  of
the respondent.

30. Further, according to the material placed on record, the land  concerned
involves significant amount of public  money.  Therefore,  its  transfer  in
favour of the respondent attracts the greatest amount of responsibility  and
caution. The competent valuer had already determined  the  registered  value
of land at       Rs.4,24,72,124/-. Therefore, it was the  responsibility  of
the  concerned  authority  to  ensure  all  steps  which  should  have  been
undertaken to sell the land at a minimum cost of Rs.4,24,72,124/-  or  above
instead of its attempt to sell the same at  a  lower  price  merely  on  the
pretext that no one would come up to  purchase  the  land  at  the  valuer’s
price or that since the land is an  encroached  land,  the  lower  price  is
justified cannot be accepted. The strong  reliance  placed  by  the  learned
senior counsel, Mr. Mehta on the  report  of  the  Joint  Registrar  of  Co-
operative Societies, is the basis for the High Court for grant of relief  in
favour of the respondent is wholly untenable in law and therefore, the  same
cannot be accepted by this Court. The High Court  should  have  noticed  the
above relevant aspects of the case  in  passing  the  impugned  order  which
would certainly affect the public interest.

31. With regard to the procedure to be followed while selling the  property,
this Court, in the case of Mahesh Chandra  v.  Regl.  Manager,  U.P.F.C.[2],
has held  :-

          “15. …..  Every wide power, the exercise of which has far reaching
          repercussion,  has  inherent  limitation  on  it.  It  should   be
          exercised to effectuate the purpose of the  Act.  In  legislations
          enacted for general benefit and common good the responsibility  is
          far graver.  It  demands  purposeful  approach.  The  exercise  of
          discretion should be objective. Test  of  reasonableness  is  more
          strict. The public functionaries should be duty  conscious  rather
          than power charged. Its actions  and  decisions  which  touch  the
          common man have to be tested on the  touchstone  of  fairness  and
          justice. That which is not fair  and  just  is  unreasonable.  And
          what is unreasonable is arbitrary. An arbitrary  action  is  ultra
          vires. It does not become bona  fide  and  in  good  faith  merely
          because no personal gain  or  benefit  to  the  person  exercising
          discretion should be established. An action is mala fide if it  is
          contrary to  the  purpose  for  which  it  was  authorised  to  be
          exercised. Dishonesty in discharge of  duty  vitiates  the  action
          without anything more. An action is  bad  even  without  proof  of
          motive of dishonesty, if the authority  is  found  to  have  acted
          contrary to reason.……..


          16. ……It saddles the Corporation or  the  officer  concerned  with
          inbuilt  duties,  responsibilities  and  obligations  towards  the
          debtor in dealing with the property and entails him to  act  as  a
          prudent and reasonable man standing in the  shoes  of  the  owner.
          According to Prof. Issac, a noted author  on  Trusts,  trusteeship
          has become a  readily  available  tool  for  everyday  purpose  of
          organisation financing, risk shifting, credit operations, settling
          disputes and liquidation of business affairs. Maitland, the  other
          renowned writer on Equity, observed that one of  the  exploits  of
          equity; the largest and the most important, is the innovation  and
          development of the trust.  Thus,  trust  has  been  and  is  being
          applied for all purposes mentioned by Prof. Issac and many  others
          as device to accomplish  different  purposes.  Trusteeship  is  an
          institution of elasticity and generality. The broad  base  of  the
          concept of property or its management vested  in  one  person  and
          obligation imposed for its enjoyment  by  others  is  accepted  in
          Hindu jurisprudence. Therefore, when the property  of  the  debtor
          stands transferred to the Corporation for management or possession
          thereof which includes right to sell or further mortgage etc., the
          Corporation or its officers or employees stands in  the  shoes  of
          the debtor as trustee and the property  caste  que  trust.  In  N.
          Swyanarayan Iyer's Indian Trust Act, Third Edition, 1987  at  page
          275 in  Section 37 it  is  stated  that,  "Where  the  trustee  is
          empowered to  sell  any  trust  property...by  public  auction  or
          private contract and either at one time or  at  several  times..."
          the duty of trustee is  to  obtain  the  best  price.  He  should,
          therefore, use reasonable diligence  in  inviting  competition  to
          that end. Where a contract of sale has been entered into bona fide
          by a trustee the court will  not  allow  it  to  be  rescinded  or
          invalidated because another purchaser conies forward with a higher
          price. It would, however, be improper for the trustee to  contract
          in circumstances of haste and improvidence. Where in a  trust  for
          sale and payment of creditors the trustee sold at  a  gross  under
          valuation showing a preference to one of  the  creditors,  he  was
          held guilty, of breach of trust. If the purchaser is privy of  the
          fraud the property itself can be recovered from him."


          17. The sale may be either by public auction or private  contract.
          In either case the trustee has to keep in mind that he must obtain
          the most advantageous price. Kerr on Receivers  17th  Edition,  at
          page 208 stated that "a receiver, however,  is  not  expected  any
          more than a trustee or an executor to  take  more  care  of  their
          property entrusted




          to him  than  he  would  have  as  a  reasonably  prudent  man  of
          business". In Halsbury's Law of England, 4th Edition, Vol. 39,  at
          para 919 it is stated that the "receiver will be compelled to show
          that he has acted with perfect regularity and has used such degree
          of prudence as would be expected  from  a  private  individual  in
          relation to his own  affairs".  The  trustee  or  a  receiver  is,
          therefore, duty bound to protect and preserve the property in  his
          possession and the standard of conduct expected of him, in dealing
          with the property or sale thereof, is as  a  prudent  owner  would
          exercise in dealing with his own property or estate. The degree of
          care expected of him in handling property taken possession  of  is
          measured by the degree of care expected  of  a  person  acting  as
          trustee, executors or assignees. The object and  endeavour  should
          also be to secure maximum advantage or price  in  a  sale  of  the
          property in lots or as whole, as exigencies warrant.”





Though, this case was subsequently overruled by this Court by a three  judge
bench decision in the case of Haryana  Financial  Corporation  and  Anr.  v.
Jagdamba Oil Mills and Anr.[3] on the point of guiding principles laid


down  to sell mortgaged property by the Financial Corporation under  Section
29 of the State Financial Corporations Act,  1951  (in   short  ‘SFC  Act’).
However, keeping in view the facts and circumstances of  that  case  and  as
per Section 29 of the SFC Act, the guidelines  laid  down  in  the  case  of
Mahesh Chandra were found fault with to sell  the  property  mortgaged  with
Financial Corporations.  However, the principle  of  Public  Trust  Doctrine
referred to in Mahesh Chandra’s  case  (supra)  shall  be  applied  to  fact
situation at hand as the public interest  has  adversely  affected  in  this
case. Notwithstanding the aforesaid decision in Jagdamba  Oil  Mills’s  case
(supra) in overruling guidelines laid down in Mahesh Chandra’s case  keeping
in view the reasonableness and fairness in action shall be  adhered  by  the
state and its instrumentalities is the ratio laid  down  by  this  court  to
pass the test of Article 14 reiterated after referring to three Judge  Bench
decisions in case of Ramana Dayaram Shetty v.


International Airport Authority of India & Ors.[4] M/s  Kasturi Lal  Lakshmi
Reddy & Ors. v. State of Jammu and Kashmir & Anr.[5]  and  other  catena  of
cases which were mentioned in the case of Akhil Bhartiya  Upbhokta  Congress
v. State of Madhya Pradesh &  Ors.[6]  are  aptly  applicable  to  the  fact
situation of the case on hand.

32. Therefore, in the light of the legal principle laid down by  this  Court
with regard to Public Trust Doctrine in Mahesh Chandra’s  case  (supra)  and
the cases mentioned supra, we are inclined to observe  that  the  liquidator
did not act fairly and reasonably in the best interest of the public of  the
State whose interest he is required to uphold. As per the material  evidence
put on record, the liquidator and the concerned authority did not  take  any
step to improve the condition of the land and  sell  it  at  reasonable  and
standard price prevalent at the time of sale of the property in question.

33. Hence, we hold that the tender process initiated by  the  appellants  is
not legal and is liable to be set aside. We direct the  concerned  authority
to issue fresh notice of tender for selling the land. The  notice  shall  be
made  available  in  government  websites  and  other  local  and   national
newspapers so as to encourage and invite more  bidders.  In  the  meanwhile,
the authority shall take all necessary steps  to  improve  and  restore  the
condition of the land so as to make the  purchase  of  the  land  free  from
legal encumbrances.

34. Since, the respondent had paid up the entire bid amount, it is  entitled
to refund of the entire amount. Further, since it is also  proved  that  the
amount paid by the  respondent  has  been  used  to  pay  the  arrears,  the
respondent is entitled to interest for the amount paid  @7%  p.a.  from  the
date of payment till the date of refund.

35. Accordingly, we set aside the order dated 2.2.2012 passed  by  the  High
Court of Guwahati in M.C. No.5 of 2012 in Writ Appeal Sl. No.168339 of  2011
after condoning the delay and consequently  we  allow  the  writ  appeal  by
allowing this Civil Appeal.


                                  ………………………………………………………………………J.
                                 [GYAN SUDHA MISRA]





                                  ………………………………………………………………………J.
                           [V. GOPALA GOWDA]


New Delhi,
April 23, 2014.


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[1]    (1988) 2 SCC 142

[2]    (1993) 2 SCC 279

[3]    (2002) 3 SCC 496

[4]    (1979) 3 SCC 489
[5]    (1980) 4 SCC 1
[6]    (2011) 5 SCC 29


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