whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid - Here again a simple example would suffice. Say the provisional duty is levied at the rate of Rs. 50/- PMT and comes to an end after 6 months. 6 months later, a final duty is imposed again at the same rate of Rs. 50/- PMT with effect from the date of levy of the provisional duty. If learned counsel for the revenue were right, Rs. 50/- PMT could be recovered under Rule 20(2)(a) for the interregnum period as well which would, in effect, destroy the scheme of Rule 13 second proviso by extending the period of the provisional duty notification beyond a period of 6 months, which clearly cannot be done. We find therefore that on all these counts, the arguments of revenue cannot be countenanced.The High Court goes on to state that the construction suggested on behalf of the assessee would lead to a manifest absurdity as there would be no reason or justification to hold that the levy of anti-dumping duty must sustain a break during the period between the expiry of the provisional duty notification and the issuance of a notification imposing a final anti- dumping duty. The High Court went on to hold that the object and purpose underlying Section 9A would be defeated, as for the interregnum period where both dumping and material injury to domestic industry are found, no anti-dumping duty can be issued. This conclusion again cannot be countenanced for the simple reason that if Rule 20(2)(a) were to be construed n the fashion suggested by the High Court, it would be ultra vires Section 9A for the reasons already given by us. Further, the object and purpose of Section 9A is to impose an anti-dumping duty in consonance with the WTO Agreement, which Section 9A gives full effect to. These basic points have been missed by the High Court in arriving at the aforesaid finding. Further, the High Court fails to give due importance in its judgment to Rules 13 and 21. We have already seen how Rule 21(1) envisages precisely the situation spoken of by the High Court, and yet states that, in the circumstances mentioned therein, despite dumping and material injury to the domestic industry, differential duty cannot be collected from the importer. In fact, the High Court goes on to say that the expression “imposed and collected” in Rule 21, not being there in Rule 20(2)(a), cannot therefore be imported into the said sub-rule, so that “levied” cannot mean “imposed and collected”. We have already held, in view of our construction of Rule 20(2)(a), that this need not be gone into. What has been missed by the High Court is that the expression “levied” has to be understood as “levied” under Rule 13 and once this is so, it becomes clear that such levy cannot exceed a period of 6 months or a maximum period of 9 months, as the case may be. We make it clear that we have only decided the point of levy of anti-dumping duty during the interregnum between the expiry of a provisional duty notification and the imposition of a final anti-dumping duty. If either the assessees or the revenue have succeeded on any other point, such point will remain untouched by this judgment. With these observations, all the said appeals are disposed of.

                                                                  REPORTABLE








                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.3889 OF 2006


COMMISSIONER OF CUSTOMS,
BANGALORE                         …APPELLANT

                                   VERSUS
M/S. G.M. EXPORTS & OTHERS        ...RESPONDENTS


                                    WITH

                        CIVIL APPEAL NO.7814 OF 2012


                        CIVIL APPEAL NO. 7894 OF 2015
               [ARISING OUT OF SLP (CIVIL) NO. 13028 OF 2012]


                        CIVIL APPEAL NO. 7895 OF 2015
               [ARISING OUT OF SLP (CIVIL) NO. 27811 OF 2012]


                        CIVIL APPEAL NO.5119 OF 2012


                        CIVIL APPEAL NO.3082 OF 2011


                        CIVIL APPEAL NO.3086 OF 2011




                        J U D G M E N T

R.F. Nariman, J.



Leave granted in S.L.P. (Civil) No. 13028 of 2012  and  S.L.P.  (Civil)  No.
27811 of 2012.

2.    Seven appeals are before us; some of them are  from  the  Bombay  High
Court judgment dated 15.12.2011  and the Kerala High  Court  judgment  dated
15.07.2009.  Others are appeals against  a  Karnataka  Tribunal  (Bangalore)
judgment and a Bombay Tribunal  judgment,  which  follows  the  Bombay  High
Court judgment referred to above.  Since all these appeals  raise  a  common
question of law of some complexity relating to anti-dumping duty,  the  said
appeals have been bunched together and are being disposed of  together.   It
may also be stated that the preponderant view, that is the view of both  the
Bombay and Kerala High Courts and the Bombay Tribunal, is in favour  of  the
construction suggested by revenue.  Only the Karnataka Tribunal  (Bangalore)
has decided in favour of the assessee.

3.    The question of law which arises in the  instant  appeals  is  whether
anti-dumping duty imposed with respect to imports  made  during  the  period
between the expiry of the provisional anti-dumping duty and  the  imposition
of the final anti-dumping duty is legal and valid.

4.    It is necessary in this case to begin  at  the  very  beginning.   The
General Agreement on Tariffs and Trade (GATT) in Article VI first laid  down
how, conceptually, anti-dumping duties were  to  be  imposed.  The  relevant
part of Article VI reads as under:-

“Article VI



Anti-dumping and Countervailing Duties



1. The contracting parties recognize that dumping, by which products of  one
country are introduced into the commerce of another  country  at  less  than
the normal value of the products,  is  to  be  condemned  if  it  causes  or
threatens material injury to an established industry in the territory  of  a
contracting party or materially retards  the  establishment  of  a  domestic
industry. For the purposes of this Article, a product is  to  be  considered
as being introduced into the commerce of an importing country at  less  than
its normal value, if the price of the product exported from one  country  to
another



(a) is less than the comparable price, in the ordinary course of trade,  for
the like product when destined for consumption  in  the  exporting  country,
or,



(b) in the absence of such domestic price, is less than either



(i) the highest comparable price for the like  product  for  export  to  any
third country in the ordinary course of trade, or



(ii) the cost of production of the product in the country of origin  plus  a
reasonable addition for selling cost and profit.



Due allowance shall be made in each case for differences in  conditions  and
terms of sale, for  differences  in  taxation,  and  for  other  differences
affecting price comparability.



2. In order to offset or prevent dumping, a contracting party  may  levy  on
any dumped product an anti-dumping duty  not  greater  in  amount  than  the
margin of dumping in respect of such  product.  For  the  purposes  of  this
Article, the margin  of  dumping  is  the  price  difference  determined  in
accordance with the provisions of paragraph 1.”



5.    In pursuance of the said Article VI, various  member  nations  entered
into a World Trade Organisation Agreement to implement Article VI, in  1994.
 The said agreement is  referred  to  as  “Agreement  on  Implementation  of
Article VI of the General Agreement on Tariffs and Trade, 1994”, and in  its
material aspects, which are  important  in  order  to  decide  the  question
raised in these appeals, states as follows:-

“Members hereby agree as follows:



                                   PART I



                                  Article 1



                                 Principles



An anti-dumping measure  shall  be  applied  only  under  the  circumstances
provided for in Article VI of  GATT  1994  and  pursuant  to  investigations
initiated  and  conducted  in  accordance  with  the  provisions   of   this
Agreement. The following provisions govern the application of Article VI  of
GATT 1994 in so far as action is taken  under  anti-dumping  legislation  or
regulations.”



                                 “Article 10



                                Retroactivity



10.1  Provisional measures and anti-dumping duties shall only be applied  to
products which enter for consumption after the time when the decision  taken
under paragraph 1 of Article 7 and paragraph 1 of Article  9,  respectively,
enters into force, subject to the exceptions set out in this Article.



10.2  Where a final determination of injury (but not of a threat thereof  or
of a material retardation of the establishment of an industry) is  made  or,
in the case of a final determination  of  a  threat  of  injury,  where  the
effect of the dumped imports  would,  in  the  absence  of  the  provisional
measures, have led to a determination of injury, anti-dumping duties may  be
levied retroactively for the period for which provisional measures, if  any,
have been applied.



10.3  If the definitive anti-dumping duty is  higher  than  the  provisional
duty paid or payable, or  the  amount  estimated  for  the  purpose  of  the
security, the difference shall not be collected. If the definitive  duty  is
lower than the provisional duty paid or payable,  or  the  amount  estimated
for the purpose of the security, the difference shall be reimbursed  or  the
duty recalculated, as the case may be.”

“10.6 A definitive anti-dumping duty may be levied on  products  which  were
entered for consumption  not  more  than  90  days  prior  to  the  date  of
application of provisional measures, when the authorities determine for  the
dumped product in question that:



(I) there is a history of dumping which caused injury or that  the  importer
was, or should have been, aware that  the  exporter  practises  dumping  and
that such dumping would  cause injury, and



(ii)  the injury is caused by massive dumped  imports  of  a  product  in  a
relatively short time which in light of the timing and  the  volume  of  the
dumped imports  and  other  circumstances  (such  as  a  rapid  build-up  of
inventories of the imported product) is likely to  seriously  undermine  the
remedial effect of the definitive anti-dumping duty to be applied,  provided
that the importers concerned have been given an opportunity to comment.



10.7  The authorities may, after  initiating  an  investigation,  take  such
measures as  the  withholding  of  appraisement  or  assessment  as  may  be
necessary to collect anti-dumping duties retroactively, as provided  for  in
paragraph 6, once they have sufficient  evidence  that  the  conditions  set
forth in that paragraph are satisfied.



10.8  No duties shall be levied retroactively pursuant  to  paragraph  6  on
products entered for consumption prior to the  date  of  initiation  of  the
investigation.”

“18.4  Each  Member  shall  take  all  necessary  steps,  of  a  general  or
particular character, to ensure, not later  than  the  date  of  entry  into
force of the WTO Agreement for it, the conformity of its  laws,  regulations
and administrative procedures with the provisions of this Agreement as  they
may apply for the Member in question.”



6.    In pursuance of the said Article VI and the said  Agreement,  both  of
which India is a signatory to, amendments were made in  the  Customs  Tariff
Act in the year 1995. The amendment with which we are directly concerned  is
the introduction of a new Section 9A to the said Act which reads as under:-

“Section 9A. Anti - dumping duty on dumped articles

(1) Where any article is exported  by  an  exporter  or  producer  from  any
country  or  territory  (hereafter  in  this  section  referred  to  as  the
exporting country or territory) to India at  less  than  its  normal  value,
then,  upon  the  importation  of  such  article  into  India,  the  Central
Government may, by notification in the Official  Gazette,  impose  an  anti-
dumping duty not exceeding  the  margin  of  dumping  in  relation  to  such
article.



Explanation.-For the purposes of this section,-



(a) “margin of dumping” in relation to  an  article,  means  the  difference
between its export price and its normal value;



(b) “export price”, in relation to  an  article,  means  the  price  of  the
article exported from the exporting country or territory and in cases  where
there is no export price or where the export price is unreliable because  of
association or a compensatory  arrangement  between  the  exporter  and  the
importer or a third party, the export price may be constructed on the  basis
of the price  at  which  the  imported  articles  are  first  resold  to  an
independent buyer or if the article is not resold to an  independent  buyer,
or not resold in the condition as imported, on such reasonable basis as  may
be determined in accordance with the rules made under sub-section (6);



(c) “normal value”, in relation to an article, means-



(i) the comparable price, in the ordinary course  of  trade,  for  the  like
article when destined for consumption in the exporting country or  territory
as determined in accordance with the rules made under sub-section (6); or



(ii) when there are no sales of the like  article in the ordinary course  of
trade in the domestic market of the exporting country or territory, or  when
because of the particular market situation or low volume  of  the  sales  in
the domestic market of the exporting country or  territory,  such  sales  do
not permit a proper comparison, the normal value shall be either-



(a) comparable representative price of the like article when  exported  from
the exporting country or  territory  to  an  appropriate  third  country  as
determined in accordance with the rules made under sub-section (6); or



(b) the cost of production of the said article  in  the  country  of  origin
along with reasonable  addition  for  administrative,  selling  and  general
costs, and for profits, as determined in  accordance  with  the  rules  made
under sub- section(6):



Provided that in the case of import of the  article  from  a  country  other
than  the  country  of  origin  and  where  the  article  has  been   merely
transhipped through the country of export or such article  is  not  produced
in the country of export or there is no comparable price in the  country  of
export, the normal value shall be determined with reference to its price  in
the country of origin.



(1A). Where the Central Government, on  such  inquiry  as  it  may  consider
necessary, is  of  the  opinion  that  circumvention  of  anti-dumping  duty
imposed under sub-section (1)  has  taken  place,  either  by  altering  the
description or name or composition of the  article  subject  to  such  anti-
dumping duty or by import of such article in an  unassembled  or  dissembled
form or by changing the country of its origin or  export  or  in  any  other
manner, whereby the anti-dumping duty so imposed  is  rendered  ineffective,
it  may  extend  the  anti-dumping  duty  to  such  article  or  an  article
originating in or exported from such country, as the case may be.

(2) The Central Government may,  pending  the  determination  in  accordance
with the provisions of this section and the rules  made  thereunder  of  the
normal value and the margin of dumping in relation to  any  article,  impose
on the importation of such article into India an anti-dumping  duty  on  the
basis of a provisional estimate of such value and margin and if  such  anti-
dumping duty exceeds the margin as so determined,-



(a) the Central Government shall, having regard to  such  determination  and
as soon as may be after such determination, reduce such  anti-dumping  duty;
and



(b) refund shall be made of so much of the  anti-  dumping  duty  which  has
been collected as is in excess of the anti-dumping duty as so reduced.



(2A) Notwithstanding anything contained in sub-section (1)  and  sub-section
(2), a notification issued under sub-section (1) or  any  anti-dumping  duty
imposed under sub-section (2), unless specifically made applicable  in  such
notification or such imposition, as the case may  be,  shall  not  apply  to
articles imported by a hundred per cent  export-oriented  undertaking  or  a
unit in a free trade zone or in a special economic zone.



Explanation. - For the purposes of this section,  the  expressions  "hundred
per cent  export-oriented  undertaking",  "free  trade  zone"  and  "special
economic zone" shall have the meanings assigned to them  in  Explanations  2
to sub-section (f) of section 3 of Central Excise Act, 1944.



(3) If the Central Government,  in  respect  of  the  dumped  article  under
inquiry, is of the opinion that -



(i) there is a history of dumping which caused injury or that  the  importer
was, or should have been, aware that  the  exporter  practices  dumping  and
that  such dumping would cause injury; and



(ii) the injury is caused by massive dumping of an  article  imported  in  a
relatively short time which in the light of the timing  and  the  volume  of
imported article dumped and  other  circumstances  is  likely  to  seriously
undermine the remedial effect  of  the  anti-  dumping  duty  liable  to  be
levied,

the Central Government may, by notification in the  Official  Gazette,  levy
anti-dumping  duty  retrospectively  from  a  date  prior  to  the  date  of
imposition of anti-dumping duty under sub-section (2) but not beyond  ninety
days  from  the  date  of   notification   under   that   sub-section,   and
notwithstanding any thing contained in any other law for the time  being  in
force, such duty shall be payable at such rate and from such date as may  be
specified in the notification.



(4) The  anti-dumping  duty  chargeable  under  this  section  shall  be  in
addition to any other duty imposed under this Act or  under  any  other  law
for the time being in force.



(5) The anti-dumping duty imposed under this section shall,  unless  revoked
earlier, cease to have effect on the expiry of five years from the  date  of
such imposition:



Provided that if the Central Government, in a  review,  is  of  the  opinion
that the cessation of such  duty  is  likely  to  lead  to  continuation  or
recurrence of dumping and injury, it may, from  time  to  time,  extend  the
period of such imposition for a  further  period  of  five  years  and  such
further period shall commence from the date of order of such extension.



Provided further that where a review initiated  before  the  expiry  of  the
aforesaid period of five years has not come  to  a  conclusion  before  such
expiry, the anti-dumping duty may continue to remain in  force  pending  the
outcome of such a review for a further period not exceeding one year.



(6) The margin of dumping as referred to in sub- section (1) or  sub-section
(2) shall, from time to time, be ascertained and determined by  the  Central
Government, after such inquiry as it may consider necessary and the  Central
Government may, by notification in the Official Gazette, make rules for  the
purposes of this section, and without prejudice to  the  generality  of  the
foregoing such rules may provide for the manner  in  which  articles  liable
for any anti-dumping duty under this section may be identified and  for  the
manner in which the export price and the normal value of and the  margin  of
dumping in relation  to,  such  articles  may  be  determined  and  for  the
assessment and collection of such anti-dumping duty.



(6A) The margin of dumping  in  relation  to  an  article,  exported  by  an
exporter or  producer,  under  inquiry  under  sub-  section  (6)  shall  be
determined on the basis of records concerning normal value and export  price
maintained, and information provided, by such exporter or producer:



Provided that where an exporter or producer fails to  provide  such  records
or information, the margin of dumping  for such exporter or  producer  shall
be determined on the basis of facts available.;



(7) Every notification issued under this section shall, as soon  as  may  be
after it is issued, be laid before each House of Parliament.



(8) The provisions of the Customs Act, 1962, (52 of 1962) and the rules  and
regulations made thereunder,  including  those  relating  to  the  date  for
determination of rate of duty, assessment, non-levy,  short  levy,  refunds,
interest, appeals, offences and penalties shall, as far as may be, apply  to
the duty chargeable under this section as they apply in relation  to  duties
leviable under that Act.”



7.    In exercise of powers conferred, inter alia, by Section 9A (6) of  the
Customs Tariff Act,  the  Customs  Tariff  (Identification,  Assessment  and
Collection of Anti-Dumping Duty on Dumped Articles and for Determination  of
Injury)  Rules,  1995  have  been  framed.   The  Rules  relevant   to   the
determination of the present controversy are set out hereunder:-

“2. Definitions.- In these rules, unless the context otherwise requires-

(e) “provisional duty” means an anti dumping duty imposed under  sub-section
(2) of section 9A of the Act;

5. Initiation of investigation. - (1) Except as provided  in  sub-rule  (4),
the designated authority shall initiate an investigation  to  determine  the
existence, degree and effect of any alleged dumping only upon receipt  of  a
written application by or on behalf of the domestic industry.

(2) An application under sub-rule (1)  shall  be  in  the  form  as  may  be
specified  by  the  designated  authority  and  the  application  shall   be
supported by evidence of -

(a) dumping

(b) injury, where applicable, and

(c) where applicable, a causal link between such dumped imports and  alleged
injury.

(3) The designated authority shall not initiate  an  investigation  pursuant
to an application made under sub-rule (1) unless –

(a) it determines, on the basis of an examination of the degree  of  support
for, or opposition to the application expressed  by  domestic  producers  of
the like product, that the application has been made by or on behalf of  the
domestic industry :

Provided that no investigation shall  be  initiated  if  domestic  producers
expressly supporting the application account for less than twenty  five  per
cent of the total production of the like article by the  domestic  industry,
and

(b) it examines the accuracy and adequacy of the evidence  provided  in  the
application  and  satisfies  itself  that  there  is   sufficient   evidence
regarding -

(i) dumping,

(ii) injury, where applicable; and

(iii) where applicable, a causal link between such dumped  imports  and  the
alleged injury, to justify the initiation of an investigation.

Explanation. - For the purpose of this rule the application shall be  deemed
to have been made by or on  behalf  of  the  domestic  industry,  if  it  is
supported by those domestic producers  whose  collective  output  constitute
more than fifty per cent  of  the  total  production  of  the  like  article
produced by that portion of the domestic industry expressing either  support
for or opposition, as the case may be, to the application.

(4) Notwithstanding  anything  contained  in  sub-rule  (1)  the  designated
authority may initiate an investigation suo motu if  it  is  satisfied  from
the information received from the Collector of Customs appointed  under  the
Customs Act, 1962 (52 of 1962) or from  any  other  source  that  sufficient
evidence exists as to the existence of  the  circumstances  referred  to  in
clause (b) of sub-rule (3).

(5) The designated authority shall notify the government  of  the  exporting
country before proceeding to initiate an investigation.

11. Determination of injury. - (1) In the case  of  imports  from  specified
countries, the designated authority shall  record  a  further  finding  that
import of such article into India causes or  threatens  material  injury  to
any established industry in India or materially  retards  the  establishment
of any industry in India.

(2)  The  designated  authority  shall  determine  the  injury  to  domestic
industry, threat of injury to domestic  industry,  material  retardation  to
establishment of domestic industry and a causal link between dumped  imports
and injury, taking into account all relevant facts, including the volume  of
dumped imports, their effect on  price  in  the  domestic  market  for  like
articles and the consequent effect of such imports on domestic producers  of
such articles and in accordance with the principles set out in  Annexure  II
to these rules.

(3) The designated authority may, in exceptional cases, give  a  finding  as
to the existence of injury even where a substantial portion of the  domestic
industry is not injured, if-

(i) there is a concentration of dumped imports into an isolated market,  and


(ii) the dumped articles are causing injury  to  the  producers  of  all  or
almost all of the production within such market.

12. Preliminary findings. -  (1)  The  designated  authority  shall  proceed
expeditiously  with  the  conduct  of  the  investigation  and   shall,   in
appropriate cases, record a  preliminary  finding  regarding  export  price,
normal value  and  margin  of  dumping,  and  in  respect  of  imports  from
specified countries, it  shall  also  record  a  further  finding  regarding
injury to the domestic industry and such finding shall contain  sufficiently
detailed information for  the  preliminary  determinations  on  dumping  and
injury and shall refer to the matters of fact and  law  which  have  led  to
arguments being accepted or rejected. It will also contain:-

(i) the  names  of  the  suppliers,  or  when  this  is  impracticable,  the
supplying countries involved;

(ii) a description of the article which is sufficient for customs  purposes;


(iii) the margins of dumping established  and  a  full  explanation  of  the
reasons for the methodology used in the establishment and comparison of  the
export price and the normal value;

(iv) considerations relevant to the injury determination; and

(v) the main reasons leading to the determination.

(2). The designated authority shall issue a public notice recording its
preliminary findings.

13. Levy of provisional duty - The Central Government may, on the  basis  of
the preliminary findings recorded by  the  designated  authority,  impose  a
provisional duty not exceeding the margin of dumping:

Provided that no such duty shall be imposed before the expiry of sixty  days
from the date of the  public  notice  issued  by  the  designated  authority
regarding its decision to initiate investigations:

Provided further that such duty shall remain in force only for a period  not
exceeding six months which may upon request of the exporters representing  a
significant percentage of the trade involved  be  extended  by  the  Central
Government to nine months.

17. Final findings. - (1) The designated authority shall,  within  one  year
from the date of initiation of an investigation, determine as to whether  or
not the article under investigation is being dumped in India and  submit  to
the Central Government its final finding –

(a) as to, -

(i) the export price, normal value and the margin of  dumping  of  the  said
article;

(ii) whether import of the said article into India, in the case  of  imports
from specified  countries,  causes  or  threatens  material  injury  to  any
industry established in India or materially  retards  the  establishment  of
any industry in India;

(iii) a causal link,  where  applicable,  between  the  dumped  imports  and
injury;

(iv) whether a retrospective levy is called  for  and  if  so,  the  reasons
therefor and date of commencement of such retrospective levy:

Provided that the Central Government  may,  in  its  discretion  in  special
circumstances extend further  the  aforesaid  period  of  one  year  by  six
months:

Provided further that in those cases  where  the  designated  authority  has
suspended the investigation on the acceptance  of  a  price  undertaking  as
provided in rule 15 and subsequently resumes the same on  violation  of  the
terms of the said undertaking, the period for which investigation  was  kept
under suspension shall not be  taken  into  account  while  calculating  the
period of said one year,

(b) recommending the amount of duty  which,  if  levied,  would  remove  the
injury where applicable, to the domestic industry.

(2) The final finding, if affirmative, shall contain all information on  the
matter of facts and law and reasons which have led  to  the  conclusion  and
shall also contain information regarding-

(i) the  names  of  the  suppliers,  or  when  this  is  impracticable,  the
supplying countries involved;

(ii) a description of the product which is sufficient for customs  purposes;


(iii) the margins of dumping established  and  a  full  explanation  of  the
reasons for the methodology used in the establishment and comparison of  the
export price and the normal value;

(iv) considerations relevant to the injury determination; and

(v) the main reasons leading to the determination.

(3) The  designated  authority  shall  determine  an  individual  margin  of
dumping for each known exporter or producer concerned of the  article  under
investigation: Provided  that  in  cases  where  the  number  of  exporters,
producers, importers or types of articles involved are so large as  to  make
such determination impracticable, it may limit  its  findings  either  to  a
reasonable number of interested parties or articles by  using  statistically
valid samples based on information available at the time  of  selection,  or
to the largest percentage of the volume of the exports from the  country  in
question which  can  reasonably  be  investigated,  and  any  selection,  of
exporters, producers, or types of articles, made under  this  proviso  shall
preferably be made  in  consultation  with  and  with  the  consent  of  the
exporters, producers or importers concerned :

Provided  further  that  the  designated  authority  shall,   determine   an
individual margin of dumping  for  any  exporter  or  producer,  though  not
selected initially, who submit necessary information in time,  except  where
the  number  of  exporters  or  producers  are  so  large  that   individual
examination would be unduly burdensome and prevent the timely completion  of
the investigation.

(4) The designated authority shall  issue  a  public  notice  recording  its
final findings.

18. Levy of duty. - (1) The Central Government may, within three  months  of
the date of publication of final findings by the designated authority  under
rule 17, impose by notification in the Official  Gazette,  upon  importation
into India of the article covered by the final  finding,  anti-dumping  duty
not exceeding the margin of dumping as determined under rule 17.

(2) In cases where the designated authority has selected percentage  of  the
volume of the exports from a particular country,  as  referred  to  sub-rule
(3) of rule 17, any anti-dumping duty applied to imports from  exporters  or
producers not included in the examination shall not exceed –

(i) the weighted average margin of dumping established with respect  to  the
selected exporters or producers or,

(ii) where the liability for payment of anti-dumping  duties  is  calculated
on the basis of a prospective  normal  value/  the  difference  between  the
weighted average normal value of the selected  exporters  or  producers  and
the export prices of exporters or producers not individually examined:

Provided that the Central Government shall  disregard  for  the  purpose  of
this sub-rule any zero margin, margins  which  are  less  than  2  per  cent
expressed as the percentage of export price and margins established  in  the
circumstances detailed in sub-rule (8) of rule  6.  The  Central  Government
shall apply individual duties to imports from any exporter or  producer  not
included in the examination  who  has  provided  the  necessary  information
during the course of the investigation as referred to in the second  proviso
to sub-rule (3) of rule 17.

(3) Notwithstanding anything contained in sub-rule  (1),  where  a  domestic
industry has been interpreted according to the proviso to sub-clause (b)  of
rule 2, a duty shall be levied only after  the  exporters  have  been  given
opportunity to cease exporting at dumped prices to  the  area  concerned  or
otherwise give an undertaking pursuant to rule 15 and such  undertaking  has
not been promptly given and in such cases duty shall not be levied  only  on
the articles of specific producers which supply the area in question.

(4) If the final finding of the designated authority  is  negative  that  is
contrary to the evidence on whose basis  the  investigation  was  initiated,
the Central Government shall, within forty-five days of the  publication  of
final findings by the designated  authority  under  rule  17,  withdraw  the
provisional duty imposed, if any.

20. Commencement of duty. - (1) The anti-dumping duty levied under  rule  13
and rule 19 shall take effect from  the  date  of  its  publication  in  the
Official Gazette.

(2) Notwithstanding anything contained in sub-rule (1) –

(a) where a provisional duty  has  been  levied  and  where  the  designated
authority has recorded a final finding of injury  or  where  the  designated
authority has recorded a final finding of threat of  injury  and  a  further
finding that the effect of dumped imports  in  the  absence  of  provisional
duty would have led to injury, the anti-dumping duty may be levied from  the
date of imposition of provisional duty;

(b) in the circumstances referred to in sub-section (3)  of  section  9A  of
the Act, the antidumping duty may be levied retrospectively  from  the  date
commencing ninety days prior to the imposition of such provisional duty:

Provided that no duty shall be levied  retrospectively  on  imports  entered
for home consumption before initiation of the investigation:

Provided further that  in  the  cases  of  violation  of  price  undertaking
referred  to  in  sub-rule  (6)  of  rule  15,  no  duty  shall  be   levied
retrospectively on the imports  which  have  entered  for  home  consumption
before the violation of the terms of such undertaking.

Provided also that  notwithstanding  anything  contained  in  the  foregoing
proviso, in case of violation of  such  undertaking,  the  provisional  duty
shall be deemed to have been levied  from  the  date  of  violation  of  the
undertaking or such date as the  Central  Government  may  specify  in  each
case.

21. Refund of duty. - (1) If the anti-dumping duty imposed  by  the  Central
Government  on  the  basis  of  the  final  findings  of  the  investigation
conducted by the designated authority is higher than  the  provisional  duty
already imposed and collected, the differential shall not be collected  from
the importer.

(2)  If,  the  anti-dumping  duty  fixed  after  the   conclusion   of   the
investigation is  lower  than  the  provisional  duty  already  imposed  and
collected, the differential shall be refunded to the importer.

(3) If the provisional duty imposed by the Central Government  is  withdrawn
in  accordance  with  the  provisions  of  sub-rule  (4)  of  rule  18,  the
provisional duty already imposed and collected, if any,  shall  be  refunded
to the importer.”



8.    We will take the facts contained in the judgment of  the  Bombay  High
Court dated 15.12.2011, in the case of Harsh International  v.  Commissioner
of Customs, Civil Appeal No. 5119 of 2012, which explain  how  the  question
which has to be determined by this judgment arose.  On 6th  August,  2001  a
public notice was issued by the Designated Authority initiating  proceedings
in regard to the import  of  Vitrified/Porcelain  tiles  originating  in  or
exported from the People’s Republic of China and the United  Arab  Emirates.
The Designated Authority issued preliminary findings on 3rd December,  2001.
 Following the preliminary findings, the  Union  Government  imposed,  by  a
notification dated 2nd May,  2002,  a  provisional  antidumping  duty  under
Section 9A(2) of the Customs Tariff Act read with Rules 13  and  20  of  the
Antidumping Rules.  The Designated Authority rendered its final findings  on
4th February, 2003 and while concluding that material  injury  had  resulted
to the domestic industry recommended the  imposition  of  antidumping  duty.
The Union Government issued a notification  on  1st  May,  2003  imposing  a
final antidumping duty with effect from the date of the  imposition  of  the
provisional antidumping duty i.e. 2nd May, 2002.  The  question  before  the
Court is as to whether the Central Government was  within  its  jurisdiction
in imposing a final antidumping duty between 2nd  November,  2002  and  30th
April, 2003.  This, according to the assessees, is the  “gap  period”   when
the provisional duty had come to an end by efflux  of  six  months  until  a
final notification was issued by the Union Government on 1st May, 2003.

9.    The stage is now set for setting out  the  arguments  of  the  learned
counsel both for the revenue and for the assessees.

10.   Ms. Pinky Anand, learned Additional  Solicitor  General  appearing  on
behalf of the revenue argued that both literally  and  purposively  Rule  20
leads to one conclusion and one conclusion alone – that  final  anti-dumping
duty would take effect from the date of imposition of the provisional  duty,
which would necessarily include the “gap” period  i.e.  the  period  between
the lapse of the provisional duty and the  imposition  of  the  final  duty.
According to learned  counsel,  any  other  construction  would  defeat  the
object  and  purpose  of  imposing  a  final  anti-dumping  duty  after  the
Designated Authority has found, post investigation, that  there  is  dumping
of goods and material injury to the domestic industry as  a  result.   Thus,
despite dumping and material injury  being  present,  no  anti-dumping  duty
would  be  leviable  in  the  interregnum  period  which  would  be   wholly
subversive of the  object  sought  to  be  achieved;  that  is,  saving  the
domestic industry from unfair trade practices  of  foreign  exporters.   She
also argued that a literal reading of Rule 20 is called for which  makes  it
clear that the final anti-dumping duty is to be  levied  from  the  date  of
imposition of provisional duty which would  necessarily  include  the  “gap”
period.  Further, since the final duty is made to relate back  to  the  date
of the provisional duty imposition, a fiction  is  employed  which  must  be
allowed to have full play and the mind should  not  boggle  in  giving  such
fiction its logical consequence.  According to learned counsel, “levied”  in
Rule 20(2)(a) obviously does not include “collection” as has  been  held  in
several Supreme Court judgments and  therefore,  “levy”  would  not  include
“collection” for which reason Rule 20 has to be  read  on  its  own  without
reference to the consequence that is found in Rule 21.  She  further  argued
that it is true that laws  that  are  made  in  pursuance  of  international
treaties ought to be construed in accordance with such treaties,  but  where
the Indian law deviates from the treaty agreement, Indian law  prevails.  It
is clear that unlike Article 10 of the WTO  Agreement,  Rule  20(2)(a)  only
speaks of anti-dumping duty being levied from  the  date  of  imposition  of
provisional duty and does not speak of the period for which the  provisional
duty applied, thus making it clear that anti-dumping duty can be levied  and
collected for the “gap” or interregnum period.

11.   On the other hand, learned counsel  for  the  various  assessees  have
argued that Rule 20(2)(a) should be interpreted in  the  light  of  the  WTO
Agreement, and so interpreted would necessarily be  interpreted  as  meaning
only the period for which the provisional duty is levied,  and  not  beyond.
It has been argued with  some  vehemence  that  this  also  follows  from  a
reading of clause 18.4 of  the  Agreement  and  a  reading  of  the  Central
Government’s own  website  which  was  referred  to  us  in  the  course  of
arguments stating that the anti-dumping rules are  in  consonance  with  the
WTO Agreements on anti-dumping.  Further, it has been argued that  the  word
“levied” under Rule 20(2)(a), in the context includes even “collection”  and
this being so, whatever has not been “collected” in the  interregnum  period
obviously cannot be collected retrospectively.  It was  also  argued  before
us that Section 9A(3) alone empowers the rule making authority to  impose  a
retrospective anti-dumping duty within  the  strict  confines  of  the  said
rule. Section 9A(2) and (6), in  contrast,  do  not  allow  any  imposition,
retrospectively, of anti-dumping duty, and therefore if Rule 20 were  to  be
read in the manner suggested by revenue, it would be ultra vires the  parent
statute.  It was further argued that the levy of anti-dumping  duty  is  not
automatic and is only levied by the Central Government taking  into  account
a series of complex economic factors.  This  being  so,  the  continuity  of
such levy can only be for the period indicated in the provisional duty  levy
notification  and  not  beyond.   It  was  also  argued  that,  on  a   true
construction of Rule 20(2)(a), the said rule merely validates a  provisional
duty already levied, and nothing beyond.  It was further  argued  that  Rule
20(2)(a) has to be harmoniously construed with both  Rules  13  and  21,  or
else, the suggested construction by revenue of Rule  20(2)(a)  would  render
Rules 13 and 21 nugatory.  In this context, it was further  argued  that  no
duty can be levied in the interregnum period as the  Government  would  then
be doing indirectly what it is prohibited  from  doing  directly  –  namely,
extending the period of six months of the levy of  provisional  duty  beyond
six months and until the notification imposing the final anti-dumping  duty.


12.   Two earlier judgments of this Court have stated  as  to  what  exactly
was the object sought to be achieved by the introduction of  Section  9A  of
the Customs Tariff Act read with the Anti-Dumping Rules. But before we  come
to these judgments, it is important to  refer  to  our  basic  law,  and  in
particular Article 51(c) of  the  Constitution  of  India,  which  reads  as
follows:

“51.  Promotion  of  international  peace  and  security.—The  State   shall
endeavour to —

(c) foster respect for international  law  and  treaty  obligations  in  the
dealings of organised peoples with one another; and”



13.   In S&S Enterprise v. Designated Authority and  others,  (2005)  3  SCC
337, this Court said:

“In our opinion, the interpretation of Rule 14(d)  by  Respondent  No.1  and
the Tribunal is incorrect and contrary to its language.  The  imposition  of
dumping duty is under Section 9A of the Customs Tariff  Act,  1975  and  the
Rules and is the outcome of  the  General  Agreement  on  Tariff  and  Trade
(GATT) to which India is a party. The purpose behind the imposition  of  the
duty is to curb unfair  trade  practices  resorted  to  by  exporters  of  a
particular country of flooding the domestic  markets  with  goods  at  rates
which are lower than the rate at which the exporters normally sell the  same
or like goods in their own countries so as to cause or be  likely  to  cause
injury to the domestic  market.  The  levy  of  dumping  duty  is  a  method
recognized by GATT which seeks to remedy the injury and  at  the  same  time
balances the right of exporters from other countries to sell their  products
within the country with the interest  of  the  domestic  markets.  Thus  the
factors to constitute 'dumping', are (i)  an  import  at  prices  which  are
lower than the normal value of the goods in the exporting country; (ii)  the
exports must be sufficient to cause injury to the  domestic  industry.”  [at
para 4]



14.   To similar effect is the  judgment  of  Reliance  Industries  Ltd.  v.
Designated Authority and others, (2006) 10 SCC 368:

“The result  was  that  an  industrial  base  was  created  in  India  after
independence and this has definitely resulted in some progress. The  purpose
of Section 9-A can, therefore, easily be seen.  The  purpose  was  that  our
industries  which  had  been  built  up  after   independence   with   great
difficulties must not be allowed to be destroyed by  unfair  competition  of
some  foreign  companies.  Dumping  is  a  well-known   method   of   unfair
competition which is adopted by the  foreign  companies.  This  is  done  by
selling goods at a very low  price  for  some  time  so  that  the  domestic
industries  cannot  compete  and  are  thereby  destroyed,  and  after  such
destruction has taken place, prices are again raised.

The purpose of Section 9-A is, therefore, to maintain a level playing  field
and prevent dumping, while allowing for healthy competition. The purpose  is
not protectionism  in  the  classical  sense  (as  proposed  by  the  German
economist Friedrich List in his famous book 'National  System  of  Political
Economy' published in 1841) but to prevent unfair trade practices. The  1995
Amendment to Section 9A was apparently made in pursuance to  Article  VI  of
the General Agreement on Tariffs and Trade 1994 (GATT 1994) which  permitted
anti-dumping measures as an instrument of fair competition.

The concept  of  anti-dumping  is  founded  on  the  basis  that  a  foreign
manufacturer sells below the normal value in order to  destabilise  domestic
manufacturers.  Dumping,  in  the  short  term,  may  give  some  transitory
benefits to the local customers on account of lower  priced  goods,  but  in
the long run destroys the local industries and may have a drastic effect  on
prices in the long run.” [at paras 10, 11 & 12]



15.   A number of judgments, both English and Indian, have laid down  as  to
what is the correct approach to  the  construction  of  a  statute  made  in
response to an international treaty obligation by a  member  nation.   Thus,
in The Jade The Eschersheim Owners of the motor vessel Erkowit v. Owners  of
the ship Jade, [1976] 1 All ER 920, the House of Lords stated:

“As the Act was passed to enable Her Majesty’s government to give effect  to
the obligations in international law which it would assume on ratifying  the
convention to which it was a signatory, the rule of  statutory  construction
laid down in Salomon v. Customs and Excise Commissioners  [1966]  3  All  ER
871 and  Post  Office  v.  Estuary  Radio  Ltd.  [1967]  3  All  ER  633  is
applicable.  If  there  be  any  difference  between  the  language  of  the
statutory  provision  and  that  of  the  corresponding  provision  of   the
convention, the statutory language should be construed in the same sense  as
that of the convention if the words of the statute  are  reasonably  capable
of bearing that meaning.” [at page 924]



16.   Similarly in Quazi v. Quazi, [1979] 3 All ER 897, the House  of  Lords
put it thus:

“In the instant case, however, this does not help the  respondent  wife;  it
helps the appellant husband. The purpose for which the Recognition  Act  was
passed is declared by the preamble to be with a view to the ratification  by
the United Kingdom of the Recognition Convention  and  for  other  purposes.
Where Parliament passes an Act amending  the  domestic  law  of  the  United
Kingdom in order to enable this country to ratify  an  international  treaty
and thereby assume towards other states that are parties to  the  treaty  an
obligation in international law to observe its terms,  it  is  a  legitimate
aid to the construction of any provisions of the Act that are  ambiguous  or
vague to have recourse to the terms of the treaty in order to see  what  was
the obligation in international  law  that  Parliament  intended  that  this
country should be enabled to assume. The ambiguity or  obscurity  is  to  be
resolved in favour of that meaning that is consistent  with  the  provisions
of the treaty: see Salomon v. Customs and Excise Commissioners [1966] 3  All
ER 871 and Post Office v. Estuary Radio Ltd. [1967] 3 All ER 633.” [at  page
903]



17.   In Garland v. British Rail Engineering Ltd., [1982] 2 All ER 402,  the
same Rule was set out with an addition – that not only should municipal  law
carry out treaty obligations, but it should also not  be  inconsistent  with
the terms of a treaty. This was put by the House of Lords in  the  following
words:-

“My Lords, even if the obligation to observe the provisions of  article  119
were  an  obligation  assumed  by  the  United  Kingdom  under  an  ordinary
international treaty or convention and there were no question of the  treaty
obligation being directly applicable as part of the law  to  be  applied  by
the courts in this country without need for any further enactment, it  is  a
principle  of  construction  of  United  Kingdom  statutes,  now  too   well
established to call for citation of authority, that the words of  a  statute
passed after the Treaty has been signed and dealing with the subject  matter
of the international obligation of the United Kingdom, are to be  construed,
if they are reasonably capable of bearing such a  meaning,  as  intended  to
carry out the obligation, and not to be  inconsistent  with  it.”  [at  page
415]



18.   Another interesting aspect was brought out by the House  of  Lords  in
The Hollandia’s case [1982] 3 All  ER  1141,  and  that  is  that  a  treaty
provision embodied in a statute needs to be construed uniformly in  all  the
member nations  who  are  its  signatories,  and  should  therefore  not  be
controlled by domestic precedents but should be construed on its  own  terms
on broad principles of general application in  a  purposive  and  not  in  a
narrow literal manner.  This is stated in the following words:

“My Lords, the provisions in section 1 of the Act that I have quoted  appear
to me to be free from any ambiguity perceptible to even the  most  ingenious
of legal minds. The Hague-Visby Rules, or rather all those of them that  are
included in the Schedule, are to  have  the  force  of  law  in  the  United
Kingdom: they are to be treated as if they were  part  of  directly  enacted
statute law. But since they form part of an international  convention  which
must come under the consideration of foreign as well as English  courts,  it
is, as Lord Macmillan said of the Hague Rules themselves in Stag  Line  Ltd.
v. Foscolo, Mango and Co. Ltd.[1932] A.C. 328 at 350, [1931] All ER Rep  666
at 677 -

“desirable in the interests of uniformity that their  interpretation  should
not be rigidly controlled by domestic precedents  of  antecedent  date,  but
rather that  the  language  of  the  rules  should  be  construed  on  broad
principles of general acceptation.”

They  should  be  given  a  purposive  rather  than  a  narrow  literalistic
construction,  particularly  wherever  the  adoption   of   a   literalistic
construction  would  enable  the  stated  purpose   of   the   international
convention, viz., the  unification  of  domestic  laws  of  the  contracting
states relating to bills of lading, to be evaded by the  use  of  colourable
devices that, not  being  expressly  referred  to  in  the  Rules,  are  not
specifically prohibited.” [at page No.1145]



19.   In Sidhu and others v. British Airways plc Abnett (known as Sykes)  v.
British Airways plc, [1997] 1 All ER 193, the same  thought  was  echoed  in
the following words:-

“I believe that the answer to the question raised in the present case is  to
be found in the objects and structure of the convention.  The language  used
and the subject matter with which it deals demonstrate that what was  sought
to be achieved was a uniform international code, which could be  applied  by
the courts of all the High Contracting  Parties  without  reference  to  the
rules of their own domestic law.” [at page No.212]



20.   To similar effect are some of the judgments of our court.  In  Vellore
Citizens’ Welfare Forum v. Union of India and  others,  (1996)  5  SCC  647,
when dealing with the Environment Protection Act, this Court stated:

“Even otherwise once these principles are accepted as part of the  Customary
International Law there would be no difficulty in accepting them as part  of
the domestic law. It is almost an  accepted  proposition  of  law  that  the
rules  of  Customary  International  Law  which  are  not  contrary  to  the
municipal law shall be deemed to have been incorporated in the domestic  law
and shall be followed by the Courts of Law.  To  support  we  may  refer  to
Justice  H.R.  Khanna's  opinion  in  Addl.   Distt.   Magistrate   Jabalpur
v. Shivakant Shukla [(1976) 2 SCC 521 : AIR  1976  SC  1207],  Jolly  George
Varghese v. Bank of Cochin [(1980)  2  SCC  360  :  AIR  1980  SC  470]  and
Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey, [(1984) 2  SCC  534
: 1984 SCC (Cri) 313 : AIR 1984 SC 667].” [at para 15]



21.   Similarly in Daya Singh Lahoria v. Union of India and  others,  (2001)
4 SCC 516, when construing Section 21 of the  Extradition  Act,  1962,  this
Court referred to the Extradition Treaty and construed  Section  21  in  the
light of the international position then obtained.  This Court said:

“…. The Extradition Treaty contains several articles of which Article  7  is
rather significant for our purpose,  which  may  be  quoted  hereinbelow  in
extenso:

"7. A person surrendered can in no case be kept in custody or be brought  to
trial in  the  territories  of  the  High  Contracting  Party  to  whom  the
surrender has been made for any other crime or offence,  or  on  account  of
any other matters, than those for which the  extradition  shall  have  taken
place, until he has been restored, or has had an opportunity  of  returning,
to the territories of the  High  Contracting  Party  by  whom  he  has  been
surrendered.

This stipulation does not apply to crimes or offences  committed  after  the
extradition."

The aforesaid Article unequivocally  indicates  that  the  person  concerned
cannot be tried for any other crime or offence  than  those  for  which  the
extradition shall have taken place until he has been  restored  or  has  had
the opportunity of returning to the  territories  of  the  High  Contracting
Party by whom he has been surrendered. The provisions of Section 21  of  the
Extradition Act  are  in  consonance  with  the  aforesaid  Article  of  the
Extradition Treaty….” [at para 3]



22.   In yet another judgment of this Court, i.e.  S&S  Enterprise,  already
referred to, this Court construed Rule 14(d) of the very anti-dumping  rules
with which we  are  concerned,  in  the  light  of  the  very  agreement  on
implementation of Article VI of GATT.  This Court was asked to  compute  the
volume of exports on the basis of price and not on the  basis  of  quantity.
In repelling this contention, this Court referred  to  Article  5.8  of  the
Agreement on implementation of Article VI and held:-


“However a negligible quantity of imports would not be sufficient  to  cause
such injury. Article 5.8 of the Agreement on Implementation  of  Article  VI
of the GATT, 1994 makes this clear:


"An application under paragraph 1 shall be  rejected  and  an  investigation
shall be terminated promptly  as  soon  as  the  authorities  concerned  are
satisfied that there is no sufficient  evidence  of  either  dumping  or  of
injury to justify  proceeding  with  the  case.  There  shall  be  immediate
termination in cases where the authorities  determine  that  the  margin  of
dumping is de minimis, or that the  volume  of  dumped  imports,  actual  or
potential, or the injury, is negligible. The  margin  of  dumping  shall  be
considered to be de minimis if this margin is less than 2%, expressed  as  a
percentage of the export price. The volume of dumped imports shall  normally
be regarded as negligible if the volume of dumped imports from a  particular
country is found to account for less than 3% of imports of the like  product
in the importing member, unless countries  which  individually  account  for
less than 3% of the imports of the like  product  in  the  importing  member
collectively account for more than 7% of imports of the like product in  the
importing member." [para 5]


“Therefore, when Rule 14(d) says that the investigation must  be  terminated
if the 'volume' of the dumped imports is less than 3% of the imports of  the
like product, it must mean that the quantity of dumped imports must  account
for less than 3% of the total imports. To hold otherwise would mean that  if
the price is lower than 3%,  irrespective  of  the  quantity  imported,  the
investigation would be dropped and it would, as submitted by the  appellant,
lead to the absurd situation that a small number of expensive imports  would
invite anti-dumping investigation but cheap imports  flooding  the  domestic
markets would not. In fact such a situation  is  exactly  what  the  dumping
rules have been framed to prevent.” [para 10]

23.   A conspectus of the aforesaid authorities would lead to the  following
conclusions:

(1)   Article 51(c) of the Constitution of India is  a  Directive  Principle
of State Policy which states  that  the  State  shall  endeavour  to  foster
respect for international law and treaty obligations.  As  a  result,  rules
of international law which are not contrary to domestic law are followed  by
the courts in this country.  This is  a  situation  in  which  there  is  an
international treaty to which India is not a signatory or general  rules  of
international law are made applicable.  It is  in  this  situation  that  if
there happens to be a conflict between domestic law and  international  law,
domestic law will prevail.

(2)   In a situation where India is a signatory nation to  an  international
treaty, and a statute is passed  pursuant  to  the  said  treaty,  it  is  a
legitimate aid to the construction of the provisions of  such  statute  that
are vague or ambiguous to have recourse  to  the  terms  of  the  treaty  to
resolve such ambiguity in favour of a meaning that is  consistent  with  the
provisions of the treaty.

(3)   In a situation where India is a signatory nation to  an  international
treaty, and a statute is made in furtherance of  such  treaty,  a  purposive
rather than a narrow literal construction  of  such  statute  is  preferred.
The  interpretation  of  such  a  statute  should  be  construed  on   broad
principles of general acceptance rather than  earlier  domestic  precedents,
being intended to carry out treaty obligations, and not to  be  inconsistent
with them.

(4)    In  a  situation  in  which  India  is  a  signatory  nation  to   an
international treaty, and a statute is made to enforce a treaty  obligation,
and if there be any difference between the language of such  statute  and  a
corresponding provision of the treaty,  the  statutory  language  should  be
construed in the same sense as that of the treaty.  This is for  the  reason
that in such cases what is  sought  to  be  achieved  by  the  international
treaty is a uniform international code of law which is to be applied by  the
courts of all the signatory nations in a  manner  that  leads  to  the  same
result in all the signatory nations.

It is in the light of these principles that we must now examine the  statute
in question.

Construction of Section 9A.

24.   Section 9A(1) refers to an  anti-dumping  duty.   Such  duty  is  only
imposed when an article is exported from a country outside  India  to  India
at less than its normal value.  Such duty can, in the  Central  Government’s
discretion, be imposed at  a  rate  that  does  not  exceed  the  margin  of
dumping, which only means the difference between the export  price  and  the
normal value of such article in international trade.  It is clear that  sub-
section (1) refers to a “final” or “definitive” duty, and  has  to  be  read
with sub-section (3) thereof, which authorises the levy of  the  “final”  or
“definitive”  anti-dumping  duty  retrospectively   in   the   circumstances
mentioned in sub-section (3). The scheme therefore of Section 9A(1) and  (3)
is that an anti-dumping duty is normally  to  be  imposed  with  prospective
effect unless, inter alia, because of massive dumping of  an  article  in  a
relatively short time the remedial effect of the  anti-dumping  duty  to  be
levied would  be  seriously  undermined.  This  would  therefore  require  a
retrospective duty being levied, but not beyond a  period  of  90  days,  to
undo the effect of undermining the anti-dumping duty to be levied. Short  of
sub-section (3),  no  other  part  of  Section  9A  authorises  the  Central
Government to levy an anti-dumping duty with retrospective effect.

25.   Section 9A(2)  speaks  of  an  anti-dumping  duty  which  the  Central
Government levies on the basis of a provisional estimate, thus referring  to
a provisional anti-dumping duty.  The Section further goes on  to  say  that
after a final determination is  made  in  accordance  with  the  Rules,  the
Central Government may reduce such  provisional  anti-dumping  duty,  having
regard to the final determination made by  the  designated  authority  under
the Rules.  If and when this happens, what is  important  to  note  is  that
refund shall be made of so much of the  anti-dumping  duty  which  has  been
collected in excess of the final anti-dumping duty so  reduced.  Under  sub-
section (5), a maximum period of  five  years  is  allowable  on  the  anti-
dumping duty imposed.  This is extendable only for a further period of  five
years and not beyond.   Sub-section  (6)  in  turn  refers  to  the  Central
Government’s power to make rules, inter alia, to assess  and  collect  anti-
dumping duty.

26.   It is important to note that neither sub-section (2)  nor  sub-section
(6) authorises the Central Government,  either  expressly  or  by  necessary
implication,  to  make  rules  and/or  to  levy   anti-dumping   duty   with
retrospective effect.  This  is  in  contrast  with  sub-section  (3)  which
expressly  so  authorises  the  Central  Government  in  the   circumstances
mentioned in the sub-section.

Interpretation of the Anti-Dumping Rules

 27.  A reading of the Anti-Dumping Rules would show  that  they  have  been
framed keeping in view the WTO  Agreement  of  1994  strictly  in  mind.   A
designated authority is appointed under Rule 3 who,  under  Rule  4,  is  to
investigate the existence, degree, and effect  of  dumping  in  relation  to
import of any article and to submit its findings, provisional  or  final  as
the case may be, to the Central Government.  The designated authority is  to
initiate an investigation either suo motu  or  upon  receipt  of  a  written
application by or on behalf of the domestic industry into (i)  dumping  (ii)
material injury to the domestic  industry  and  (iii)  where  applicable,  a
causal link between such dumped imports and the material injury –  see  Rule
5.  Such investigation is to be initiated by issue of a public notice  under
rule 6.   Since  material  injury  to  an  established  domestic  injury  or
material retardation of  the  establishment  of  any  such  industry  is  an
important aspect in levying anti dumping duty, the designated  authority  is
to be guided, under Rule 11, by Annexure II of the  Rules,  paragraphs  (iv)
and (v) of which read as under:-

“(iv) The examination of the impact of the dumped imports  on  the  domestic
industry concerned, shall include an evaluation  of  all  relevant  economic
factors and  indices  having  a  bearing  on  the  state  of  the  industry,
including natural and potential decline in sales,  profits,  output,  market
share, productivity, return  on  investments  or  utilization  of  capacity;
factors affecting domestic prices; the magnitude of the margin  of  dumping;
actual  and  potential  negative  effects   on   cash   flow,   inventories,
employment, wages, growth, ability to raise capital investments.

(v) It must be  demonstrated  that  the  dumped  imports  are,  through  the
effects of dumping, as set forth in paragraphs (ii) and (iv) above,  causing
injury to the domestic industry. The demonstration of a causal  relationship
between the dumped imports and the injury to the domestic industry shall  be
based  on  an  examination  of  relevant  evidence  before  the   designated
authority. The designated authority shall also  examine  any  known  factors
other than the dumped imports which  at  the  same  time  are  injuring  the
domestic industry, and the injury caused by these other factors must not  be
attributed to the dumped imports. Factors which  may  be  relevant  in  this
respect include, inter alia, the volume and prices of imports  not  sold  at
dumping prices,  contraction  in  demand  or  changes  in  the  patterns  of
consumption, trade restrictive practices  of  and  competition  between  the
foreign and domestic producers, developments in technology  and  the  export
performance and the productivity of the domestic industry.”



28.   It will thus be seen that the  determination  of  material  injury  to
domestic industry depends on a series of complex economic factors which  are
to be segregated from other factors which may also cause injury to the  said
industry.

29.   Under Rule 12, the designated authority is to “proceed  expeditiously”
with the conduct of the investigation and shall in appropriate cases  record
his preliminary findings on all the aspects delineated above. No time  frame
is indicated except that utmost dispatch is the order of the day.

30.   Rule 13 is very important and when Rule 20 is read  harmoniously  with
both Rules 13 and 21, all the dark clouds which come in on  account  of  the
suggested construction of Rule 20 by revenue get dispelled by  the  sunlight
of harmonious construction of all the three Rules read together.

31.   Rule 13, in line with clause 7.4 of the  WTO  Agreement,  enables  the
Central Government to impose provisional  anti-dumping  duty  not  exceeding
the margin of dumping, with  two  provisos.  First,  no  such  duty  can  be
imposed before the expiry of 60 days from the date of public  notice  issued
by  the  designated   authority   regarding   its   decision   to   initiate
investigations. And second, such duty cannot remain in force  for  a  period
of more than six months, which is only extendable on  request  made  by  the
foreign exporters who  represent  a  significant  percentage  of  the  trade
involved, to a maximum period of 9 months. The important words used  in  the
second proviso are “shall”, “only”, and “not exceeding”, all of which  point
to the fact that the time period mentioned in the said proviso is  mandatory
and cannot be exceeded by even a single day.

32.   Under Rule 17, the designated authority is given  one  year  from  the
date of initiation of an investigation to come out with its final  findings.
This is extendable by the Central Government only in special  circumstances,
and only by a further period of 6 months, and no more (Clause  5.10  of  the
WTO Agreement).  Significantly,  the  designated  authority,  in  its  final
finding, may also provide for a retrospective  levy  of  duty,  the  reasons
therefor, and the date of commencement of such retrospective levy.  This  is
obviously referable to Section 9A(3), which reproduces clause  10.6  of  the
WTO Agreement.  The reasons must be the reasons mentioned in the  said  sub-
section, and, as mentioned in the said sub-section, such retrospective  levy
cannot commence beyond 90 days from the date of  the  notification  imposing
provisional duty.

33.   Under Rule 18, the Central  Government  may  in  its  discretion,  and
within a maximum period of three months from the date of publication of  the
final findings by the designated  authority,  impose  a  final  anti-dumping
duty.

34.   This brings us to Rule  20,  the  correct  construction  of  which  is
determinative of the question raised in these appeals.  The first  thing  to
notice about Rule 20 is, as its marginal note states, that it  is  concerned
only with the date of commencement of duty.  Once this  is  appreciated,  it
becomes clear that its focus is only on  when  anti-dumping  duties  are  to
commence. In sub-rule (1), it speaks of  anti-dumping  duties  levied  under
Rule  13  and  Rule  19,  and  states  that  they  shall  take  effect  only
prospectively, i.e. from the date of publication in  the  official  gazette.
It is clear that Rule 19 is a mistake made by the draftsman  of  the  Rules.
Rule  18  is  obviously  referred   to.   Thus,  under  sub-rule  (1),   the
provisional anti-dumping duty takes effect on  and  from  the  date  of  its
publication in the official gazette. Same is the case with the  final  anti-
dumping duty levied under Rule 18.

35.   Sub-rule (2) is in two parts.  Sub-clause (a) deals with the  date  of
commencement of an anti-dumping duty, having due  regard  to  a  provisional
duty that has been levied, whereas sub-clause (b)  specifically  deals  with
duty to be retrospectively  imposed,  that  is  a  retrospective  imposition
prior to the imposition of a  provisional  duty.   It  will  immediately  be
noticed that the subject matter of sub-clause (a) does  not  purport  to  be
the imposition of an anti-dumping duty with retrospective effect.   This  is
because it seeks to give effect to clause 10.2 of  the  WTO  Agreement.   As
has  been  argued  by  learned  counsel  on  both  sides,  the  key  to  the
understanding of the import of sub-clause (a) is  the  expression  “where  a
provisional duty has been levied….”  Obviously, the word “levied” has to  be
read as levied in accordance with  Rule  13  which,  as  its  marginal  note
indicates, provides for the “levy” of provisional duty.  Once this is  clear
and the word “levied” is to be understood  as  levied  under  Rule  13,  the
second proviso of Rule 13 gets attracted, and under this proviso  such  levy
cannot be for a period exceeding 6 months (on facts  in  these  cases,  such
period has not in fact been extended beyond 6 months).  Thus,  it  is  clear
that all that sub-rule (2)(a) does is to enable the levy of  a  final  anti-
dumping duty from the date of imposition of a  provisional  duty  so  as  to
convert the provisional measure into a final  measure,  or  so  as  to  take
within its ken the provisional  anti-dumping  duty  already  imposed.   This
aspect is succinctly put by “A Handbook on Anti-Dumping  Investigations”  by
Judith Czako, Johann Human and Jorge Miranda.  The learned authors state:

“L.   RETROACTIVE COLLECTION OF DEFINITIVE DUTIES

The normal rule for application of definitive duties,  set  out  in  Article
10.1 of the AD Agreement, is that duties shall only be collected on  imports
made (“entered for consumption”) after  the  effective  date  of  the  final
determination.  Articles 10.2 and 10.6  establish  two  exceptions  to  this
general rule, providing for the retroactive collection of definitive  duties
(that is, for the collection of definitive duties before the effective  date
of the final determination) in two situations:

The first such situation involves the collection of  definitive  duties  for
the period during which provisional  measures  were  applied  (and  for  all
practical purposes “converts” the  provisional  measure  into  a  definitive
measure); and

The other involves the collection of definitive duties up to 90  days  prior
to the date of application of provisional measures, although  no  definitive
duties can be collected on imports that took place before initiation.”



36.   On a correct reading of the said sub-rule, therefore, the final  anti-
dumping duty only incorporates  the  provisional  anti-dumping  duty  within
itself, but in the manner provided by Rule 13.  Thus, it is clear that  such
incorporation can only be the period upto which the provisional duty can  be
levied and not beyond.  Thus understood, it is clear  that  both  literally,
and in keeping with the object sought to be achieved – that  is  the  making
of laws in conformity with the WTO Agreement, there can be no levy of  anti-
dumping duty in the “gap” or interregnum period between  the  lapse  of  the
provisional duty and the imposition of the final duty.  Such  interpretation
makes it clear that clause 10.2 of the WTO Agreement is  reproduced  in  the
same sense though not in the same form in sub-rule (2)(a). The  same  result
therefore  as  is  envisaged  in  clause  10.2  is  achieved  by  the   said
construction – that is anti-dumping duty may  be  levied  retroactively  for
the period for which provisional  measures  have  been  applied.   The  said
construction is in consonance with the principles already laid down  earlier
in this judgment in that the WTO Agreement is intended to be applied by  the
various signatory nations in a uniform manner.  This can  only  be  done  by
construing the language of Section 9A read with the Rules in the same  sense
as that of the WTO Agreement.

37.   At this juncture, it is interesting to note that a  number  of  member
countries of the WTO agreement have  opted  for  the  Rule  by  which  anti-
dumping duty is levied to the full extent of the margin  of  dumping.   Such
nations like Argentina,  Mexico  and  USA  therefore  have,  under  the  WTO
Agreement, only a period of 4 months extendable upto a maximum period  of  6
months (instead of 6 months and 9 months respectively) so far  as  the  life
span of a provisional duty is concerned.  Most of Europe  and  the  rest  of
the world have opted to impose duties upto the margin of  dumping  depending
upon  the  extent   of   injury   caused   to   their   domestic   industry.
Interestingly, the European Community Council Regulation No.  1225  of  2009
dated 30.11.2009 on protection against dumped  imports  from  countries  not
members of the European Community has this to say:

                                 “Article 9

        Termination without measures; imposition of definitive duties

4. Where the facts as finally established show that  there  is  dumping  and
injury caused thereby, and the Community interest calls for intervention  in
accordance with Article 21, a definitive anti-dumping duty shall be  imposed
by the Council, acting on a  proposal  submitted  by  the  Commission  after
consultation of the Advisory Committee. The proposal  shall  be  adopted  by
the Council unless it decides by a simple majority to reject  the  proposal,
within a period of one month after its submission by the  Commission.  Where
provisional duties are in force, a proposal for definitive action  shall  be
submitted no later than one month before the  expiry  of  such  duties.  The
amount of the anti-dumping duty shall  not  exceed  the  margin  of  dumping
established but it should be less than the margin if such lesser duty  would
be adequate to remove the injury to the Community industry.”



38.   It will be seen from this that an inflexible rule is  laid  down  that
would ensure that no “gap” or intervening period occurs between  the  expiry
of the provisional duty and the imposition of the final duty, inasmuch as  a
proposal to levy final duty has to be submitted  no  later  than  one  month
before the expiry of a provisional duty.

39.   However, interestingly enough, in the  United  States  Manual  dealing
with anti-dumping duties, the following is the statement of law:-

“Therefore, a period of time, known  sometimes  as  the  “gap  period,”  may
exist between the expiration of the end of the  provisional  measures,  even
if extended, and the publication  of  the  ITC’s  final  determination  (the
starting of definitive duties) where the DOC cannot require CBP  to  collect
cash deposits, bonds, or other securities.  (The gap period begins  the  day
after the end of the 4- or 6-month period,  and  ends  the  day  before  the
ITC’s final determination is published).  The DOC normally administers  this
problem in one of two ways.  We either send instructions to CBP towards  the
beginning of the gap  period,  instructing  them  to  stop  collecting  cash
deposits or bonds, or we wait until  the  order  has  been  published,  then
instruct CBP to liquidate all entries during the gap period  without  regard
to antidumping duties.”



40.   We are heartened to note that one other  signatory  nation  has  taken
the stand that no duty can be collected during the “gap period”.

41.   Viewed slightly differently, the  suggested  construction  by  revenue
would render Rule 2(a) ultra vires Section 9A.  It  has  already  been  seen
that sub-section (2) and sub-section (6) of Section 9A do not authorize  the
imposition of a duty  with  retrospective  effect,  in  contrast  with  sub-
section (3) thereof.  Any duty levied by a final  duty  notification  during
the interregnum period would necessarily amount to a retrospective  levy  of
duty for the reason that such period is not covered by the provisional  duty
notification, being beyond 6 months. This  would   therefore   render   sub-
rule  (2)(a) ultra vires Section 9A.            A  construction   which   is
both  in  consonance with international law and  treaty  obligations,  which
Article 51(c) of the Constitution states as a directive principle  of  State
policy; and with the application of the doctrine of harmonious  construction
is to be preferred to a narrow doctrinaire meaning which would lead  to  the
Rule being read in such a manner that it is ultra vires the parent  statute.


42.   One other interesting thing remains. Most of the  debate  at  the  Bar
was centered around the expression “levied”  in  Rule  20  sub-rule  (2)(a),
revenue contending, based on two judgments of this Court  in  N.B.  Sanjana,
Assistant Collector of Central Excise, Bombay and others v. The  Elphinstone
Spinning and Weaving Mills Company Ltd., 1971  (1)  SCC  337  and  Assistant
Collector of Central Excise, Calcutta Division v. National  Tobacco  Co.  of
India Ltd., (1972) 2 SCC 560, that “levy”  does  not  include  “collection”.
This has been countered by arguments on behalf of  the  assessees  that  the
word “levied” in the said sub-rule has been used in the same  sense  as  the
expression “imposed and  collected”  in  Rule  21(1),  and  would  therefore
include “collection” as well.  In view of what has been held  by  us  above,
we find it unnecessary to decide this contention.

43.   The effect of Rule 21 on the aforesaid construction  of  Rule  20  now
needs to be adverted to. Rule 21, in turn, is made  to  carry  out  what  is
stated in clause 10.3 of the WTO  Agreement.   Rule  21(2)  echoes  what  is
already found in Section 9A(2).  If provisional anti-dumping duty  is  found
to be higher than the final anti-dumping duty,  the  differential  shall  be
refunded to the importer. But sub-rule (1) goes a step  further  and  states
that  if  the  anti-dumping  duty  finally  imposed  is  higher   than   the
provisional duty already imposed and collected, the differential  shall  not
be collected from the importer.

44.   It is obvious that this Rule  has  been  framed  in  the  interest  of
international trade.  It is well known that  export  contracts  are  entered
into long before anti-dumping duties may be imposed, and  in  the  interests
of international trade, the importer should not be put to a loss in  case  a
final duty happens to be higher than the provisional duty  already  imposed.
The delicate balancing act between protection of domestic industry  and  the
hardship caused in the course of international trade has  thus  been  tilted
in favour of the latter. If learned counsel  for  the  revenue  were  right,
despite the fact  that  such  differential  cannot  be  collected  from  the
importer  under  Rule  21(1)  for  the  period  that  the  provisional  duty
notification is in force, during the interregnum period, the full amount  of
final duty is liable to be recovered from  the  importer.  This  would  turn
Rule 21(1) on its head and result in an absurdity.  A  simple  example  will
suffice.  If provisional duty already imposed and collected is Rs. 50/-  per
metric  ton  (PMT),  and  final  duty  imposed  say  one  year  later   with
retroactive effect from the date of imposition of the  provisional  duty  is
Rs. 100/- PMT, the difference of Rs. 50/- PMT cannot be recovered  from  the
importer for the period that  the  provisional  notification  is  in  force.
Therefore, for the first 6 months in the aforesaid example, the importer  is
liable to pay nil duty. However, for the next  6  months,  that  is  in  the
interregnum period between the expiry of the provisional duty and  the  date
of imposition of the final duty, the importer becomes liable to pay Rs.100/-
 PMT.  The said example demonstrates how the arguments of the revenue  would
lead to an absurdity such as this.

45.   Rule 21(1) also answers the contention of the Revenue that the  object
of anti-dumping laws would be defeated if it were  found  that  dumping  and
material injury having been found, yet no anti-dumping duty can  be  levied.
By application of this Rule, it is  clear  that  for  the  period  that  the
provisional duty notification is in force, the  difference  of  Rs.50/-,  in
the example just given,  cannot  be  collected  from  the  importer  despite
Rs.50/- having been imposed because of dumping and material  injury  to  the
domestic industry.  Therefore,  it  is  clear  that  there  already  exists,
within the scheme of the anti-dumping law, a situation  in  which  there  is
dumping and material injury to the domestic industry,  for  which  an  anti-
dumping  duty  is  levied,   but  which  cannot  be  collected.   There  is,
therefore,  a  balance  struck  between  material  injury  to  the  domestic
industry and retrospective levy of duty in favour of the latter.

46.   We also find force in  the  submission  of  learned  counsel  for  the
assessees  that  the  revenue’s  construction  of  Rule  20   would  achieve
indirectly what cannot be achieved directly, having regard to the  mandatory
language contained in Rule 13 second proviso. Here again  a  simple  example
would suffice.  Say the provisional duty is levied at the rate of  Rs.  50/-
PMT and comes to an end after 6 months.  6 months later,  a  final  duty  is
imposed again at the same rate of Rs. 50/- PMT with effect from the date  of
levy of the provisional duty.  If  learned  counsel  for  the  revenue  were
right, Rs.  50/-  PMT  could  be  recovered  under  Rule  20(2)(a)  for  the
interregnum period as well which would, in effect,  destroy  the  scheme  of
Rule 13 second proviso by extending  the  period  of  the  provisional  duty
notification beyond a period of 6 months, which clearly cannot be done.   We
find therefore that on all these counts, the arguments of revenue cannot  be
countenanced.

47.   It remains now to deal with the impugned judgment of the  Bombay  High
Court. After setting out the  contentions  of  the  respective  parties  and
referring to the relevant statutory provisions and the  WTO  Agreement,  the
Bombay High Court arrives at a finding that Parliament has made a  departure
from the language used in the WTO Agreement and  the  Court  must  therefore
give effect to such departure.

48.   We have already held that this would  fly  in  the  face  of  all  the
judgments referred to in paragraphs 15 to  22  hereinabove,  and  principles
(3) and (4) of paragraph 23 of this judgment  which speak  of  how  domestic
legislation must  be  construed  when  it  is  made  in  furtherance  of  an
international treaty.  In particular, in the facts of these cases, it  would
also ignore  the  effect  of  Article  18.4  of  the  WTO  Agreement,  which
expressly states that all the signatory member nations have  to  make  their
laws “conform” to the provisions of the WTO Agreement, something  which  the
Central Government itself states in its internet website  which  deals  with
the law of anti-dumping.

49.   The High Court goes on to state that  the  construction  suggested  on
behalf of the assessee would lead to a manifest absurdity as there would  be
no reason or justification to hold that the levy of anti-dumping  duty  must
sustain a break during the period between  the  expiry  of  the  provisional
duty notification and the issuance of a notification imposing a final  anti-
dumping duty. The High Court went on to hold that  the  object  and  purpose
underlying Section 9A would be  defeated,  as  for  the  interregnum  period
where both dumping and material injury to domestic industry  are  found,  no
anti-dumping  duty  can  be  issued.   This  conclusion  again   cannot   be
countenanced for the  simple  reason  that  if  Rule  20(2)(a)  were  to  be
construed n the fashion suggested by the  High  Court,  it  would  be  ultra
vires Section 9A for the reasons already given by us.  Further,  the  object
and purpose of Section 9A is to impose an anti-dumping  duty  in  consonance
with the WTO Agreement, which Section 9A gives full effect to.  These  basic
points have been missed by the High  Court  in  arriving  at  the  aforesaid
finding.  Further, the High Court  fails  to  give  due  importance  in  its
judgment to Rules 13 and 21. We have already seen how Rule  21(1)  envisages
precisely the situation spoken of by the High Court, and  yet  states  that,
in the circumstances mentioned therein, despite dumping and material  injury
to the domestic industry, differential duty cannot  be  collected  from  the
importer.  In fact, the High Court  goes  on  to  say  that  the  expression
“imposed and collected” in Rule  21,  not  being  there  in  Rule  20(2)(a),
cannot therefore be imported  into  the  said  sub-rule,  so  that  “levied”
cannot mean “imposed and collected”.  We have already held, in view  of  our
construction of Rule 20(2)(a), that this need not be gone  into.   What  has
been missed by the High Court is that the  expression  “levied”  has  to  be
understood as “levied” under Rule 13 and once this is so, it  becomes  clear
that such levy cannot exceed a period of 6 months or a maximum period  of  9
months, as the case may be.

50.   The Bombay High Court follows the Kerala High Court  reasoning,  which
is to the same effect.  For the reasons given by us  in  this  judgment,  we
find it difficult to accede to such  reasoning.  We,  therefore,  allow  the
appeals of the assessees and dismiss Civil Appeal No. 3889 of  2006  of  the
revenue.  We make it clear that we have only decided the point  of  levy  of
anti-dumping  duty  during  the  interregnum  between  the   expiry   of   a
provisional duty notification and the imposition  of  a  final  anti-dumping
duty.  If either the assessees or the revenue have succeeded  on  any  other
point, such point will  remain  untouched  by  this  judgment.   With  these
observations, all the said appeals are disposed of.

                                        ……………………J.

                                        (A.K. Sikri)





                                        ……………………J.

                                        (R.F. Nariman)

New Delhi;

September 23, 2015.

the High Court has altered conviction from section 302 to section 304 Part = whether the accused intended to inflict injuries so as to cause the death. Even the circumstances to take the case out of the purview of section 302 have also not been discussed by the High Court. Simpliciter, it has been observed that a careful scrutiny of the entire evidence has been made but we find from the judgment that no such exercise has been done. Mere statement in the judgment to that effect is not enough. Evidence is not only required to be mentioned in the judgment but its evidentiary value has to be assessed carefully. No such exercise has been made.

                        IN THE SUPREME COURT OF INDIA

                       CRIMINA APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO.1246  OF 2015
               (Arising out of S.L.P. [Crl.] No.1621 of 2014)



State of Rajasthan                                 … Appellant
Vs.

Prakash @ Gajendra                           … Respondent



                               J U D G M E N T



ARUN MISHRA, J.



1.    Heard learned counsel for the parties.

2.    Leave granted.

3.    On being aggrieved by the judgment and order  dated  29.5.2013  passed
by the High Court of Judicature for Rajasthan at  Jodhpur,  the  appeal  has
been preferred by the State of Rajasthan. The trial court has convicted  the
respondent for commission of an offence under section  302 and  section  458
IPC and sentenced  to life imprisonment with a fine  of  Rs.2,000/-  and  RI
for seven years and a fine of  Rs.1,000/-  respectively  for  the  aforesaid
offences. While maintaining conviction and sentence under section  458  IPC,
the High Court has altered conviction from section 302 to section  304  Part
II and sentenced him to the period already undergone, i.e.  8  years  and  7
months.

4.    The prosecution case, in short, is that on  22.10.2004  Prakash  Salvi
inflicted injuries on deceased Mahendra by knife. On raising a hue and  cry,
Naresh, Adesh, Mukesh  and  Tej  Singh  Balla  reached  the  spot  and  took
Mahendra to hospital. On 27.10.2004, the deceased succumbed to his  injuries
and  the  offence  was  converted  to  section  302/458  IPC  from  sections
307/324/458 IPC.

5.    The High Court in the impugned judgment has observed  that  death  was
not caused immediately. The incident took place on 22.10.2004 whereas  death
took place on 27.10.2004. The dying declaration was recorded by  the  Police
and not by the Magistrate and a careful scrutiny of the  evidence  makes  it
clear that it is a case of culpable homicide not  amounting  to  murder.  As
such, the conviction has been altered from section 302 to section  304  Part
II IPC.

6.    We have heard learned counsel for the  parties  at  length.  The  only
discussion with respect to conversion of the offence  from  section  302  to
section 304 Part II IPC is at page 9 of the impugned judgment. The  relevant
portion of the judgment is quoted below :-

“Further, we have examined the factual aspect of the matter and  found  that
the injuries upon the body of the deceased were although serious  in  nature
but death was not  immediately  caused  because  occurrence  took  place  on
22.10.2004 and injured died on 27.10.2004  during  which  statement  of  the
deceased was recorded by the police and not by  the  Magistrate.  Therefore,
our opinion is that the prosecution has proved its case with regard  to  the
occurrence but careful scrutiny of the entire evidence makes it  clear  that
it is a case of  culpable  homicide  not  amounting  to  murder.  Therefore,
convicting of the appellant for offence under section  302,  I.P.C.  is  not
sustainable in the eye of law. The case against the  accused-appellant  does
not travel beyond offence under Section 304 Pt.-II, I.P.C.”



7.    It is crystal clear  that  the  High  Court  has  not  considered  the
evidence, neither the nature of injuries nor  method  and  manner  in  which
they were inflicted. The High Court  has  also  not  considered  the  aspect
whether the accused intended to inflict injuries so as to cause  the  death.
Even the circumstances to take the case out of the purview  of  section  302
have also not been discussed by the High Court.  Simpliciter,  it  has  been
observed that a careful scrutiny of the entire evidence has  been  made  but
we find from the  judgment  that  no  such  exercise  has  been  done.  Mere
statement in the judgment to that effect is  not  enough.  Evidence  is  not
only required to be mentioned in the judgment but its evidentiary value  has
to be assessed carefully. No such exercise has been made.

8.    Thus, we have no hesitation  to  set  aside  the  judgment  and  order
passed by the High Court. While allowing appeal, we remit the matter to  the
High Court to decide the same again after hearing the parties in  accordance
with law. It is made clear that we have not expressed  any  opinion  on  the
merits of the case. The High Court is required to reconsider the  matter  in
accordance with law and to decide the  appeal  de  novo  after  hearing  the
parties. The respondent-accused shall remain on bail for a  period  of  four
weeks from the date of the judgment during which time he  will  be  free  to
apply to the High Court for regular bail.




                                             …………………………J.
                                             (Kurian Joseph)





New Delhi;                                   ………………………..J.
September 23, 2015.                          (Arun Mishra)

Merely due to the assignment or release of the rights during the pendency of the appeal, the appellant did not in any manner lose the right to continue the appeal. Merely by transfer of the property during the pendency of the suit or the appeal, plaintiff or appellant, as the case may be, ordinarily has a right to continue the appeal. It is at the option of the assignee to move an application for impleadment. = Or. 22 of C.P.C = In order to appreciate the points involved, it would be necessary to refer to the provisions of Order 22 of the Code, Rules 3 and 4 whereof prescribe procedure in case of devolution of interest on the death of a party to a suit. Under these Rules, if a party dies and right to sue survives, the court on an application made in that behalf is required to substitute legal representatives of the deceased party for proceeding with a suit but if such an application is not filed within the time prescribed by law, the suit shall abate so far as the deceased party is concerned. Rule 7 deals with the case of creation of an interest in a husband on marriage and Rule 8 deals with the case of assignment on the insolvency of a plaintiff. Rule 10 provides for cases of assignment, creation and devolution of interest during the pendency of a suit other than those referred to in the foregoing Rules and is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject-matter of the suit has devolved upon another during its pendency but such a suit may be continued with the leave of the court by or against the person upon whom such interest has devolved. But, if no such step is taken, the suit may be continued with the original party and the person upon whom the interest has devolved will be bound by and can have the benefit of the decree, as the case may be, unless it is shown in a properly constituted proceeding that the original party being no longer interested in the proceeding did not vigorously prosecute or colluded with the adversary resulting in decision adverse to the party upon whom the interest had devolved. The legislature while enacting Rules 3, 4 and 10 has made a clear-cut distinction. In cases covered by Rules 3 and 4, if right to sue survives and no application for bringing the legal representatives of a deceased party is filed within the time prescribed, there is automatic abatement of the suit and procedure has been prescribed for setting aside abatement under Rule 9 on the grounds postulated therein. In cases covered by Rule 10, the legislature has not prescribed any such procedure in the event of failure to apply for leave of the court to continue the proceeding by or against the person upon whom interest has devolved during the pendency of a suit which shows that the legislature was conscious of this eventuality and yet has not prescribed that failure would entail dismissal of the suit as it was intended that the proceeding would continue by or against the original party although he ceased to have any interest in the subject of dispute in the event of failure to apply for leave to continue by or against the person upon whom the interest has devolved for bringing him on the record.=ORDER XXII, RULES 10 AND 11. “10. Procedure in case of assignment before final order in suit.- (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. (2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1). Under Rule 10 Order 22 of the Code, when there has been a devolution of interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against persons upon whom such interest has devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the court for leave to continue the suit. But it does not follow that it is obligatory upon them to do so. If a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record, and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin [ILR (1898) 25 Cal. 179] he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. It is also plain that if the person who has acquired an interest by devolution, obtains leave to carry on the suit, the suit in his hands is not a new suit, for, as Lord Kingsdown of the Judicial Committee said ina cause of action is not prolonged by mere transfer of the title. It is the old suit carried on at his instance and he is bound by all proceedings up to the stage when he obtains leave to carry on the proceedings.This Court in Jaskirat Datwani v. Vidyavati & Ors. [2002 (5) SCC 647], while relying upon Dhurandhar Prasad (supra), has laid down that even if no step is taken by assignee, suit may be continued by the original party and the person upon whom the interest has devolved will be bound by the decree, particularly when such party had the knowledge of the proceedings. Ordinarily, the person is bound by the decree until and unless it is shown that the decree was based upon fraud or collusion etc. Resultantly, we are of the opinion that the High Court has gravely erred in law in dismissing the appeal on the aforesaid ground. Thus, its judgment and order being unsustainable, are hereby set aside. We remit the appeal to the High Court for deciding the same afresh in accordance with law after hearing the parties. The appeal is allowed. No order as to costs.

                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.7889  OF 2015
                (Arising out of S.L.P. [C] No.36889 of 2013)


Sharadamma                              … Appellant


Vs.



Mohammed Pyrejan (D) through LRs. & Anr.     … Respondents



                               J U D G M E N T



ARUN MISHRA, J.



1.    Heard learned counsel for the parties.

2.    Leave granted.

3.    This is an appeal against  the  judgment  and  order  dated  24.9.2013
passed by the High Court of Karnataka at Bangalore in Regular  First  Appeal
No.1735 of 2011, dismissing the appeal filed by the  plaintiff-appellant  on
the ground that she had released  her  interest  in  the  suit  property  in
favour of her daughter Smt. Padmavathi on 11.4.2011 and said Padmavathi,  in
turn, had transferred the property in favour of Mr. G.R.  Ramesh  vide  sale
deed dated 20.4.2011. Consequently, she had lost her right to  continue  the
appeal preferred as against dismissal of the suit vide  judgment  and  order
dated 16.6.1990.

4.    The facts, in brief,  indicate  that  Sharadamma,  plaintiff-appellant
had filed Original Suit No.6020 of 1998 on  5.8.1998  for  the  purposes  of
declaration of title and for restoration of possession on  the  strength  of
registered sale deed dated 10.11.1965. The plaintiff had also claimed a  sum
of Rs.3,000/- towards past damages and a further sum of Rs.20/- per  day  as
continuing damages. The suit was dismissed by the trial court against  which
the plaintiff had preferred regular first appeal before the High Court.  The
same has been dismissed on the aforesaid ground  by  the  impugned  judgment
and order.

5.    We have heard learned counsel for  the  parties  and  opine  that  the
impugned judgment is patently illegal.  Merely  due  to  the  assignment  or
release of the rights during the pendency of the appeal, the  appellant  did
not in any manner lose the right to continue the appeal. Merely by  transfer
of the property during the pendency of the suit or the appeal, plaintiff  or
appellant, as the case may be,  ordinarily  has  a  right  to  continue  the
appeal. It is at the option of the  assignee  to  move  an  application  for
impleadment. Considering the provisions contained in Order 22  Rule  10  and
Order 22 Rule 11 of the Code of Civil Procedure, the impugned  judgment  and
order of the High Court cannot be allowed to be sustained. Order 22 Rule  10
and Order 22 Rule 11CPC are extracted hereunder :

ORDER XXII, RULES 10 AND 11.
“10. Procedure in case of assignment before final  order  in  suit.- (1)  In
other cases of an assignment, creation or devolution of any interest  during
the pendency of a suit, the suit may, by leave of the  Court,  be  continued
by or against the  person  to  or  upon  whom  such  interest  has  come  or
devolved.

(2) The attachment of a decree pending an appeal therefrom shall  be  deemed
to be an interest entitling the person who procured such attachment  to  the
benefit of sub-rule (1).

                                  x x x x x

11. Application of Order to appeals.- In the application of  this  Order  to
appeals, so far as may be, the word “plaintiff” shall be held to include  an
appellant, the word  “defendant”  a  respondent,  and  the  word  “suit”  an
appeal.”



6.    A bare reading of the provisions of Order XXII Rule 10 makes it  clear
that the legislature has not envisaged the penalty of dismissal of the  suit
or appeal on account of failure of the assignee to move an  application  for
impleadment  and  to  continue  the  proceedings.  Thus,  there  cannot   be
dismissal of the suit or appeal, as the case may be, on account  of  failure
of assignee to file an application to continue the proceedings. It would  be
open to the assignor to continue the proceedings  notwithstanding  the  fact
that he ceased to have any interest in the  subject-matter  of  dispute.  He
can continue the proceedings for the benefit of assignee.  The  question  is
no more res integra. This Court in Dhurandhar Prasad Singh  v.  Jai  Prakash
University & Ors. [2001 (6) SCC 534] has laid down thus :



“6. In order to appreciate the points involved, it  would  be  necessary  to
refer to the provisions of Order 22 of the  Code,  Rules  3  and  4  whereof
prescribe procedure in case of devolution of interest  on  the  death  of  a
party to a suit. Under these Rules,  if  a  party  dies  and  right  to  sue
survives, the court on an application made in that  behalf  is  required  to
substitute legal representatives of the deceased party for  proceeding  with
a suit but if such an application is not filed within  the  time  prescribed
by law, the suit shall abate so far as  the  deceased  party  is  concerned.
Rule 7 deals with the case of creation  of  an  interest  in  a  husband  on
marriage and Rule 8 deals with the case of assignment on the  insolvency  of
a plaintiff.  Rule  10  provides  for  cases  of  assignment,  creation  and
devolution of interest during the  pendency  of  a  suit  other  than  those
referred to in the foregoing Rules and is based on the  principle  that  the
trial of a suit cannot be brought to an end merely because the  interest  of
a party in the subject-matter of the suit has devolved upon  another  during
its pendency but such a suit may be continued with the leave  of  the  court
by or against the person upon whom such interest has devolved.  But,  if  no
such step is taken, the suit may be continued with the  original  party  and
the person upon whom the interest has devolved will  be  bound  by  and  can
have the benefit of the decree, as the case may be, unless it is shown in  a
properly constituted proceeding that the  original  party  being  no  longer
interested in the proceeding did not vigorously prosecute or  colluded  with
the adversary resulting in decision adverse  to  the  party  upon  whom  the
interest had devolved. The legislature while enacting Rules 3, 4 and 10  has
made a clear-cut distinction. In cases covered by Rules 3 and  4,  if  right
to sue survives and no application for bringing  the  legal  representatives
of a deceased party is filed within the time prescribed, there is  automatic
abatement of the suit and procedure has been prescribed  for  setting  aside
abatement under Rule 9 on the grounds postulated therein. In  cases  covered
by Rule 10, the legislature has not prescribed any  such  procedure  in  the
event of failure to apply for leave of the court to continue the  proceeding
by or against  the  person  upon  whom  interest  has  devolved  during  the
pendency of a suit which shows that the legislature was  conscious  of  this
eventuality and yet has not prescribed that failure would  entail  dismissal
of the suit as it was intended that the  proceeding  would  continue  by  or
against the original party although he ceased to have any  interest  in  the
subject of dispute in the event of failure to apply for  leave  to  continue
by or against the person upon whom the interest has  devolved  for  bringing
him on the record.



7. Under Rule 10 Order 22 of the Code, when there has been a  devolution  of
interest during the pendency of a suit,  the  suit  may,  by  leave  of  the
court, be continued by or  against  persons  upon  whom  such  interest  has
devolved and this entitles the person who has acquired an  interest  in  the
subject-matter of the litigation by an assignment or creation or  devolution
of interest pendente lite or suitor  or  any  other  person  interested,  to
apply to the court for leave to continue the suit. But it  does  not  follow
that it is obligatory upon them to do so.  If  a  party  does  not  ask  for
leave, he takes  the  obvious  risk  that  the  suit  may  not  be  properly
conducted by the plaintiff on record, and  yet,  as  pointed  out  by  Their
Lordships of the Judicial Committee in Moti Lal v. Karrabuldin  [ILR  (1898)
25 Cal. 179] he will be bound by the result of the  litigation  even  though
he is not represented at the hearing unless it is shown that the  litigation
was not properly conducted by the original party or  he  colluded  with  the
adversary. It is also plain that if the person who has acquired an  interest
by devolution, obtains leave to carry on the suit, the suit in his hands  is
not a new suit, for, as Lord Kingsdown of the  Judicial  Committee  said  in
Prannath Roy Chowdry v. Rookea Begum [(1857-60)  7  MIA  323],  a  cause  of
action is not prolonged by mere transfer of the title. It is  the  old  suit
carried on at his instance and he is bound by  all  proceedings  up  to  the
stage when he obtains leave to carry on the proceedings.

                                  x x x x x

26. The plain language of Rule 10 referred to above does  not  suggest  that
leave can be sought  by  that  person  alone  upon  whom  the  interest  has
devolved. It simply says that the suit may be continued by the  person  upon
whom such an interest has devolved and this applies  in  a  case  where  the
interest of the plaintiff has devolved. Likewise, in a case  where  interest
of the defendant has devolved, the suit may  be  continued  against  such  a
person upon whom interest has  devolved,  but  in  either  eventuality,  for
continuance of the suit against the  persons  upon  whom  the  interest  has
devolved during the pendency of the suit, leave  of  the  court  has  to  be
obtained. If it is laid down that leave  can  be  obtained  by  that  person
alone upon whom interest of a party to the  suit  has  devolved  during  its
pendency, then there may be preposterous results as such a party  might  not
be knowing about the litigation and consequently not  feasible  for  him  to
apply for leave and if a duty is cast upon him then in such  an  eventuality
he would be bound by the decree even  in  cases  of  failure  to  apply  for
leave. As a rule of prudence, initial duty lies upon the plaintiff to  apply
for leave in case the factum of devolution was within his knowledge or  with
due diligence could have been  known  by  him.  The  person  upon  whom  the
interest has devolved may also apply for such a leave so that  his  interest
may be properly represented as the original party, if it ceased to  have  an
interest in the  subject-matter  of  dispute  by  virtue  of  devolution  of
interest upon another person, may not take  interest  therein,  in  ordinary
course, which is but natural, or by colluding with the other  side.  If  the
submission of Shri Mishra is  accepted,  a  party  upon  whom  interest  has
devolved, upon his failure to  apply  for  leave,  would  be  deprived  from
challenging correctness of the decree by filing a properly constituted  suit
on the ground that the original party having lost interest  in  the  subject
of dispute, did not properly prosecute  or  defend  the  litigation  or,  in
doing so, colluded with the adversary. Any other party,  in  our  view,  may
also seek leave as, for example,  where  the  plaintiff  filed  a  suit  for
partition and during its pendency he gifted away his undivided  interest  in
the Mitakshara coparcenary in favour of the contesting  defendant,  in  that
event the contesting defendant  upon  whom  the  interest  of  the  original
plaintiff has devolved has no cause of action to prosecute the suit, but  if
there is any other co-sharer who is supporting the plaintiff, he may have  a
cause of action to continue with the suit by getting himself  transposed  to
the category of plaintiff as it is well settled that  in  a  partition  suit
every defendant is a plaintiff, provided he has cause of action for  seeking
partition. Thus, we do not find any substance in this submission of  learned
counsel appearing on behalf of the appellant and hold that prayer for  leave
can be made not only by the person upon  whom  interest  has  devolved,  but
also by the plaintiff or any other party or person interested.”

                                                   (emphasis supplied)


7.    This Court in Jaskirat Datwani v.  Vidyavati  &  Ors.  [2002  (5)  SCC
647], while relying upon Dhurandhar Prasad (supra), has laid down that  even
if no step is taken by assignee, suit  may  be  continued  by  the  original
party and the person upon whom the interest has devolved will  be  bound  by
the  decree,  particularly  when  such  party  had  the  knowledge  of   the
proceedings. Ordinarily, the person is bound by the decree until and  unless
it is shown that the decree was based upon fraud or collusion etc.

8.    Resultantly, we are of the opinion that the  High  Court  has  gravely
erred in law in dismissing the appeal on the  aforesaid  ground.  Thus,  its
judgment and order being unsustainable, are hereby set aside. We  remit  the
appeal to the High Court for deciding the same  afresh  in  accordance  with
law after hearing the parties. The appeal is allowed. No order as to costs.




                                             …………………………J.
                                             (Kurian Joseph)




New Delhi;                                   ………………………..J.
September 23, 2015.                          (Arun Mishra)

whether there is any real dispute between the parties about the entitlement of DR Group to have the shares transferred in their favour and whether the exercise of jurisdiction by the High Court is beyond the scope of Section 111 of the Companies Act.-“whether the application is not maintainable on account of its involving complicated questions of title” it is not necessary to decide the other issues raised in the case. ………” scope of power under Section 111 of the Companies Act, 1956, to direct rectification in the share register of a company = The DR Group followed the due procedure. It had the succession certificate in its favour apart from the transfer deed from GD, who admittedly inherited rights from LMJS. Will in favour of GD is beyond any dispute. Thus, the DR Group derived rights from the GD by documents executed by her in her lifetime and conveyed to the Company. Even if the Will of GD is not taken into account, for purposes of issue of rectification, the documents executed by GD clearly entitled the DR Group to have the rectification made. The decisions in Mulraj, Manohar Lal, Ajudh Raj and Chiranjilal Shrilal Goenka (supra) are of no relevance to a situation where the beneficiary of the interim order itself opts to proceed with the matter in respect of which stay is granted by higher Court. In the present case, GD having settled the matter and having herself sought rectification, the interim order granted at her instance could be no bar against the DR Group. The decisions sought are thus, of no relevance to such a situation. We sum up our conclusions as follows : (i) LMJS executed will in favour of his mother – GD which is not in dispute; (ii) GD and DR jointly obtained succession certificate; (iii) GD signed the transfer deeds and communicated the same to the Board of Directors; and (iv) The civil court vide order dated 28th July, 1991 declined to grant temporary injunction finding no prima facie case against the succession certificate. 23. In above circumstances, even in summary jurisdiction, the CLB had no justification to reject the claim of the DR Group. The High Court rightly reversed the said order. 24. In view of the above, we find no merit in these appeals. The same are dismissed with costs quantified at Rs.5 lakhs in each of the appeals.

                                 REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.7914 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.4384 OF 2013)



JAI MAHAL HOTELS PVT. LTD.                  … APPELLANT

                                   VERSUS

RAJKUMAR DEVRAJ & ORS.                     … RESPONDENTS

                                    WITH

                        CIVIL APPEAL NO.7915 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.4903 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7919 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.13752 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7916 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.13756 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7917 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.14309 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7918 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.14322 OF 2013)







                    J U D G M E N T


ADARSH KUMAR GOEL, J.



1.    Leave granted.  The question raised in these appeals  relates  to  the
scope of power under Section 111 of  the  Companies  Act,  1956,  to  direct
rectification in the share register of a company.  The question  has  to  be
examined in the context of correctness of the view  taken  in  the  impugned
order passed by the High Court directing rectification at  the  instance  of
Respondent  No.1-Rajkumar  Devraj  and  Respondent  No.2-Rajkumari   Lalitya
Kumari (the “DR Group”), who are the son and daughter respectively  of  late
Maharaja Jagat Singh (“LMJS”) .

2.    LMJS held shares in M/s. Jai Mahal Hotels Pvt.  Ltd.,  M/s.  Ram  Bagh
Palace Hotels Pvt. Ltd., M/s Sawai Madhopur Lodge Pvt. Ltd. and M/s.  S.M.S.
Investment Corporation Pvt. Ltd.  He died on  05th  February,  1997  leaving
behind a Will dated 23rd June, 1996 in favour of  his  mother  Gayatri  Devi
(“GD”).  Succession certificate dated 19th February, 2009 was issued by  the
District Judge, Jaipur jointly in favour of GD and DR  Group.   GD  executed
transfer deed dated 27th April, 2009  in  favour  of  DR  Group.   She  also
executed Will dated 10th May, 2009 in favour of DR Group.  She died on  29th
September, 2009.  Vide letter  dated  15th  July,  2009,  DR  Group  claimed
transmission and transfer  of  shares  in  their  favour  on  the  basis  of
succession certificate dated 19th February, 2009 issued by the District  and
Sessions Judge,  Jaipur  (Civil),  transfer  deed  dated  27th  April,  2009
executed by their grand mother Gayitri Devi (“GD”) along  with  revalidation
of the letter issued by the Registrar of Companies.

3.    The application having not been accepted by the Company, the DR  Group
filed appeals before the Company Law  Board  (“CLB”),  New  Delhi.   Urvashi
Devi, grand daughter of husband of GD from another wife (“UD  Group”)  filed
application for impleadment stating that the succession  certificate  was  a
nullity.  She accepted validity of Will dated 23rd June,  1996  executed  in
favour of GD by LMJS but contested the succession certificate.  It  was  her
further case that DR Group had no right of succession in view of Will  dated
23rd June, 1996 and they were also not heirs of GD as LMJS  was  adopted  in
another family.  Further stand  was  that  since  at  the  instance  of  GD,
proceedings were stayed, succession certificate could not  be  granted  even
at her instance.  Stay granted by the High Court was in a  petition  seeking
consolidation of a probate case and succession certificate.  Section 370  of
Succession Act was also invoked.  It was also submitted that the  settlement
which was the basis of succession certificate was  not  genuine.   Her  Will
dated 10th May, 2009 was also contested.  Urvashi Devi, Prithvi Raj and  Jai
Singh also sought transfer of shares in their favour claiming  as  heirs  of
GD.  It was submitted that GD could not enter into any  settlement  contrary
to the Will dated 23rd June, 1996.  Further contention  was  that  she  died
intestate on 29th September, 2009 and that DG has been disinherited by  LMJS
in his Will dated 23rd June, 1996.
4.    Suit No.32 of 2010 was also filed by the UD Group before the  District
Judge, Jaipur, raising the dispute of succession to the estate of GD.     In
the said suit, CMA No.20 of 2010 was filed under Order XXXIX Rules 1  and  2
CPC, for temporary injunction. The application  was  dismissed  by  detailed
order dated 28th July, 2011.   In  the  said  application,  all  the  issues
raised by the UD Group were examined  prima  facie,  including  validity  of
succession  certificate  dated  19th  February,   2009.     The   Court   on
considering the rival submissions held :
“In such condition seeing the said entire facts and  circumstances  and  the
documents submitted no prima facie case is made out by  the  applicants  for
stopping the implementation of the order dated  19.02.2009  passed  in  S.A.
No.134 of 1998 by the Learned District Judge, Jaipur till  the  disposal  of
the suit.”

5.    The CLB dismissed the appeals filed by the DR Group vide  order  dated
16th March, 2011.  The Board framed following questions for consideration  :


“(i)  Whether order dated 19.02.2009  in  Succession  Case  No.134/98  is  a
nullity?

(ii)  Whether a Will exists?

(iii) Whether the alleged Will dated 23.06.1996 is required to be proved  or
disprove?

(iv)   Whether  the  probate  proceedings  in  Case  No.32/2006   could   be
dismissed/disposed of on the basis  of  a  settlement  between  the  private
parties?

(v)   Whether probate proceedings exist as on date?

(vi)  Whether construction of the Will is required?

(vii) Whether bar of Section 370 of the Indian Succession  Act  operates  in
the facts and circumstances of this case?

(viii)      Whether Sections 373, 381,  383  and  other  provisions  of  the
Indian Succession Act are applicable in the facts and circumstances of  this
case?

(ix)  Whether Late Maharaj Jagat Singh was adopted?

(x)   Who really are the legal representatives for the shares  held  in  the
sole name of the deceased?”

6.    To decide the above questions, following issues were framed :

(i)   Whether these petitions involve disputed and complicated questions  of
law and facts regarding entitlement to the  estate  of  late  Maharaj  Jagat
Singh?

(ii)  If these petitions involve complicated questions  of  law  and  facts,
whether these are maintainable before the CLB?  To be precise,  whether  the
CLB has jurisdiction in this matter or  it  is  ousted  on  account  of  the
competent court i.e. Civil Court having jurisdiction in this matter.

(iii) In case, the CLB exercising its  discretion  proceeds  to  decide  the
entitlement to shareholding attracting the provisions of sub-section (7)  of
Section 111, is the CLB competent to decide whether  the  alleged  Will   is
proved or disproved?  And as well as other questins enumerated  in  para  51
above.

(iv)  Further, can be CLB ignore that in view of the stay order of the  High
Court the order dated 19.02.2009 in  Case  No.134/98  on  which  issuing  of
Succession Certificate is based and Succession Certificate is the basis  for
the petitioners in C.P. Nos.13 to 16 to claim transmission of shares,  is  a
nullity, is it ab initio void in law, is it without jurisdiction,  is  it  a
merely nullity, it is not necessary for anybody who objects to  that  order,
to apply to set it aside, he can only rely on its invalidity when it is  set
up against him, although he has not taken steps to set it aside, such  order
cannot give rise to any right whatever not even to a  right  to  appeal,  it
can give rise to no rights and  impose  no  obligations,  the  same  can  be
ignored as nullity, that is, non-existent in the eye of law and  it  is  not
necessary to set it aside?

(v)   Whether the order dated 19.02.2009 is unenforceable due to the bar  of
Section 370 of the Indian  Succession  Act,  1925  for  granting  Succession
Certificate in the presence of the Will?

(vi)  Can in view of Section 381  of  the  Succession  Act,  the  Succession
Certificate granted jointly in  the  name  of  the  Rajmata  and  two  grand
children be operative after the demise of the Rajmata?

(vii) Can the probate proceedings in case  No.327/06  be  dismissed  on  the
basis of a settlement between private parties?

(viii)      Can probate proceedings decide entitlement?

(ix)  Whether the CLB shall proceed to decide whether in  the  face  of  the
alleged Will disinheriting Devraj & Lalitya, Late Rajmata  can  directly  or
indirectly still make them entitle to  the  estate  of  Late  Maharaj  Jagat
Singh?

(x)   Whether in the presence of the alleged  Will  disinheriting  Devraj  &
Lalitya, the estate of Late  Maharaj  Jagat  Singh  devolve  upon  Rajkumari
Urvashi, Maharaj Prithviraj Singh, Maharaj Jai Singh  and  Maharaja  Bhawani
Singh whose case is based on adoption of Late Maharaj Jagat Singh?

(xi)  Whether the CLB can decide these questions in a  summary  jurisdiction
is the main issue to be considered in this matter?

7.    It was held that the Board could not decide the  complexity  of  facts
and law which had arisen and such questions  could  be  decided  before  the
Civil Court and not before the CLB.  In this view of the matter, the  matter
was not gone into on merits.   The  concluding  part  of  the  order  is  as
follows :
“67.   Having carefully considered the facts of the  present  case  and  the
nature of the allegations  made  by  the  parties  as  mentioned  above  and
applying the ratio of the decisions mentioned above, I am of the  view  that
such disputed and complicated questions of law and facts cannot  be  decided
by the CLB in the summary jurisdiction under Section 111 of the  Act.   Such
questions which are involved in the present case can be decided  before  the
Civil Court on the basis of the oral and  documentary  evidence  adduced  by
the parties in support of their respective cases.  The CLB is not the  forum
to adjudicate on these complicated questions of law and  facts.   The  issue
“whether the application is not maintainable on  account  of  its  involving
complicated questions of title” it is not  necessary  to  decide  the  other
issues raised in the case.  ………”

8.    DR Group moved the High Court  of  Delhi  under  Section  10F  of  the
Companies Act.  UD Group also filed appeals  before  the  High  Court.   The
High Court allowed the appeals of DR Group and dismissed  the  appeal  filed
by the UD Group. The operative part of the order passed by  the  High  Court
is as follows :
“38.   Having considered carefully, the facts of the present  case  and  the
nature of the allegations made by the respondents,  it  is  clear  that  the
alleged  disputes  raised  by  the  respondent  group  in  so  far  as   the
rectification issue is concerned are all illusory.  Admittedly these  shares
were in the name of Jagat Singh  who  had  bequeathed  them  to  his  mother
Maharani Gayatri Devi and she in terms of a settlement  arrived  at  between
her grandchildren followed  by  her  Will  had  bequeathed  the  said  share
holding thereafter in  favour  of  her  grandchildren  i.e.  the  petitioner
group. The respondents who were the cousins of  Jagat  Singh  are  not  even
claiming as legal heirs of Jagat Singh but only in  their  capacity  of  his
legal representatives; these allegations do not in  any  manner  affect  the
title of the shareholding of Jagat Singh. There is  no  involvement  of  any
fraud or forgery. Petition under Section 111 of the Companies Act  was  well
maintainable.

39. The CLB returning a finding opposite has committed an  illegality  which
is liable to be set aside. It is accordingly  set  aside.  The  order  dated
16.3.2011 is set aside; the member register of the  companies  be  rectified
in the name of the petitioner group and the petitioners  i.e.  Dev  Raj  and
Lalitya Kumari be substituted in lieu of Jagat Singh.

40.  As  noted  Supra,  the  appeals  filed  by  the  respondent  group  are
infructuous; they have supported the order of the CLB, their prayer  in  the
appeal that the shares register be rectified in their favour as  necessarily
to be dismissed as even as per their own statement, they  do  not  have  any
document  to  support  their  submission  that  they  are  entitled  to  the
rectification of the member register qua these  shares  of  Jagat  Singh  in
their favour.”

9.    Thus, the High Court held that the succession certificate  dated  19th
February, 2009 issued by the competent court had to be taken  as  conclusive
evidence under Section 381 of the Indian Succession Act.  The plea that  the
succession certificate dated 19th February, 2009 was in  violation  of  stay
order dated 20th August, 2008 was  rejected.   It  was  observed  that  stay
order was passed at the instance of GD herself whose  statement  itself  was
the basis of the order dated 19th February, 2009.  Writ Petition No.7524  of
2008 wherein order dated  20th  August,  2008  was  passed  itself  was  got
disposed of as infructuous on 18th January, 2011  in  view  of  order  dated
19th February, 2009.  UD  Group  was  in  no  manner  connected  with  those
proceedings.  As regards Suit filed by  UD  Group  challenging  order  dated
19th February, 2009, interim  application  for  stay  of  order  dated  19th
February, 2009 was dismissed on 28th July, 2011.  The Court had  refused  to
grant any interim injunction in favour of UD  Group  and  other  plaintiffs.
As regards disinheritance of DR Group in Will dated 23rd June, 1996, it  was
observed that the reason for disinheriting  as  mentioned  therein  was  not
against the DR Group but only against the estranged wife  of  the  testator.
The GD who was the legatee herself bequeathed her rights in  favour  of  the
DR Group by duly signing the transfer deeds and communicating  the  same  to
the Board of Directors.  She also executed Will dated 10th May, 2009.   Mere
fact that the same had been challenged was no bar to the  claim  of  the  DR
Group.

10.   We have heard S/Shri H.P. Rawal, Sanjiv Sen,  learned  senior  counsel
for the Companies, Shri Vikas Singh,  learned  senior  counsel  for  the  UD
Group and Shri C.A. Sundaram, learned senior counsel for the  DR  Group  and
perused the records.

11.    Contention  raised  on  behalf  of  the  appellants  mainly  is  that
jurisdiction under Section 111 of the Companies Act  is  summary  in  nature
and complicated questions of title cannot be adjudicated upon  in  the  said
jurisdiction.  Reliance has also been placed on Ammonia Supplies Corpn.  (P)
Ltd. vs. Modern Plastic Containers (P) Ltd.[1], Standard Chartered Bank  vs.
Andhra Bank Financial  Services  Ltd.[2],  Luxmi  Tea  Company  Limited  vs.
Pradip Kumar Sarkar[3] and Bajaj Auto Ltd. vs.  N.K.  Firodia[4].    Further
submission is that succession certificate was void  on  account  of  interim
order passed by the High Court dated 20th August, 2008.  Reliance  has  been
placed  on  Mulraj  vs.  Murti  Raghonathji  Maharaj[5],  Manohar  Lal   vs.
Ugrasen[6], Ajudh Raj vs. Moti[7] and Chiranjila Shrilal Goenka  vs.  Jasjit
Singh[8].

12.   It was also submitted that DR Group could not inherit  the  rights  of
LMJS in view of the language of the Will dated 23rd June, 1996 and  also  on
the ground that the Will executed by GD was under challenge.  In absence  of
the said Will, DR Group could  not  acquire  any  rights  as  UD  Group  was
entitled to inherit the estate of GD.

13.   Per contra, Shri Sundaram supported the view taken by the High  Court.
  His  submission  is  that  there  is  no  real  dispute.   The  succession
certificate in favour of DR Group has to be acted upon  especially  when  in
the suit filed by the UD Group, interim order has been declined and  it  has
been found that there was no prima facie  case  in  challenge  to  the  said
certificate.  Pendency of suit without there  being  any  interim  order  in
favour of the UD Group in respect of succession to the estate of the GD  was
of no consequence. The scope of power under Section 111(7) of the  Companies
Act included  jurisdiction  to  decide  a  question  of  title.  Apart  from
succession certificate and the Will,  GD  had  executed  transfer  deed  and
communicated the same to the  Board  of  Directors.   In  the  face  of  her
statement in proceedings for succession  certificate  followed  by  transfer
deed, no dispute whatsoever, remained as to the rights of DR Group  to  have
the shares  transferred  in  their  favour.   The  Board  of  Directors  was
dominated by the UD Group who abused its position to  deprive  DR  Group  of
their rights.  The CLB failed to appreciate the scope  of  its  jurisdiction
as well as the scope of controversy between the  parties.   The  High  Court
rightly allowed their appeal.  Apart  from  relying  upon  the  judgment  in
Ammonia (supra), reliance was also  placed  on  judgment  of  Calcutta  High
Court by Ruma Pal, J. (as she then was) in Nupur  Mitra  vs.  Basubani  Pvt.
Ltd.[9].

14.   We have given due consideration to the rival  submissions.   The  main
question for consideration is whether there is any real dispute between  the
parties about the entitlement of DR Group to have the shares transferred  in
their favour and whether the exercise of jurisdiction by the High  Court  is
beyond the scope of Section 111 of the Companies Act.

15.   We are of the opinion that  there  is  no  real  dispute  between  the
parties as held by the High Court.  DR Group has  furnished  the  succession
certificate as well as the transfer deed executed by  GD  in  their  favour.
The same had to be acted  upon.    Moreover,  the  civil  court  in  interim
application moved by the UD Group held that the UD Group had no prima  facie
case.  The said order was required to be acted upon subject to  any  further
order that may be passed in any pending  proceedings  between  the  parties.
There is no conflicting order of any court or authority.  There is thus,  no
complicated question of title.  Moreover, there is no  bar  to  adjudication
for purposes of transfer of shares unless the court  finds  otherwise.   The
stay order obtained by  GD  herself  could  not  debar  her  from  making  a
statement  to  settle  the  matter.    The  judgments  relied  upon  by  the
appellants have no application to such a fact situation.

16.   In Ammonia (supra), the scope of jurisdiction of the Company Court  to
deal with an issue of rectification in the Register  of  Members  maintained
by the Company was considered.  Following Public Passenger Service Ltd.  vs.
M.A. Khadar[10], it  was  held  that  jurisdiction  under  Section  155  was
summary in nature.  If for reasons of complexity or  otherwise,  the  matter
could be more conveniently decided in a suit, the  Court  may  relegate  the
parties to such remedy.  Subject to the  said  limitation,  jurisdiction  to
deal with such matter  is  exclusively  with  the  Company  Court.   It  was
observed :

“31. ……..It cannot be doubted that in spite of exclusiveness to  decide  all
matters pertaining to the rectification it has to act within the  said  four
corners and adjudication of such matters cannot be doubted to be summary  in
nature. So, whenever a question is raised the court  has  to  adjudicate  on
the facts and circumstances of each case. If it truly is rectification,  all
matters raised in that connection should  be  decided  by  the  court  under
Section 155 and if it finds adjudication of any  matter  not  falling  under
it, it may direct a party to get his right adjudicated  by  a  civil  court.
Unless jurisdiction is expressly or implicitly barred under a  statute,  for
violation  or  redress  of  any  such  right  the  civil  court  would  have
jurisdiction. ……..”


17.   Thus, there is a thin line in appreciating the scope  of  jurisdiction
of the Company Court/Company Law Board.  The jurisdiction  is  exclusive  if
the matter truly relates to rectification but  if  the  issue  is  alien  to
rectification, such matter may not be within the exclusive  jurisdiction  of
the Company Court/Company Law Board.

18.   In Standard Chartered  Bank  (supra),  scope  of  Section  111(7)  was
considered.  It was observed that jurisdiction being summary  in  nature,  a
seriously disputed question of title could be left  to  be  decided  by  the
civil court.  It was observed :

“29 ……The nature of proceedings under Section  111  are  slightly  different
from a title suit, although, sub-section (7) of Section  111  gives  to  the
Tribunal the jurisdiction to decide any question relating to  the  title  of
any person who is a party to the application, to have his  name  entered  in
or omitted from the register and also the  general  jurisdiction  to  decide
any question which it is necessary or  expedient  to  decide  in  connection
with such an application. It has been held in Ammonia  Supplies  Corpn.  (P)
Ltd. v. Modern Plastic Containers (P) Ltd. that the  jurisdiction  exercised
by  the  Company  Court  under  Section  155  of  the  Companies  Act,  1956
(corresponding to Section 111 of the present Act, before  its  amendment  by
Act 31 of 1988) was somewhat summary in  nature  and  that  if  a  seriously
disputed question of title arose, the  Company  Court  should  relegate  the
parties to a suit, which was the more appropriate remedy  for  investigation
and adjudication of such seriously disputed question of title.”



19.   In Luxmi Tea Company Limited and  Bajaj  Auto  Ltd.  (supra),  it  was
observed that a company did  not  have  any  discretion  in  rectifying  its
register except to require the procedure being followed.

20.   In the present case, as already observed, there  is  no  real  dispute
between the parties.  The DR Group followed the due procedure.  It  had  the
succession certificate in its favour apart from the transfer deed  from  GD,
who admittedly inherited rights from LMJS.  Will in favour of GD  is  beyond
any dispute.  Thus, the DR Group derived rights from  the  GD  by  documents
executed by her in her lifetime and conveyed to the Company.   Even  if  the
Will  of  GD  is  not  taken  into  account,  for  purposes  of   issue   of
rectification, the documents executed by GD clearly entitled  the  DR  Group
to have the rectification made.

21.   The decisions in  Mulraj,  Manohar  Lal,  Ajudh  Raj  and  Chiranjilal
Shrilal Goenka (supra)  are  of  no  relevance  to  a  situation  where  the
beneficiary of the interim order itself opts to proceed with the  matter  in
respect of which stay is granted by higher Court.  In the present  case,  GD
having settled the matter  and  having  herself  sought  rectification,  the
interim order granted at her instance could be no bar against the DR  Group.
 The decisions sought are thus, of no relevance to such a situation.

22.   We sum up our conclusions as follows :

(i)   LMJS executed will in favour of his  mother  –  GD  which  is  not  in
dispute;

(ii)  GD and DR jointly obtained succession certificate;

(iii) GD signed the transfer deeds and communicated the same  to  the  Board
of Directors; and

(iv)  The civil court vide order dated 28th July,  1991  declined  to  grant
temporary injunction finding no prima  facie  case  against  the  succession
certificate.

23.   In above circumstances, even in summary jurisdiction, the CLB  had  no
justification to reject the claim of the DR Group.  The High  Court  rightly
reversed the said order.

24.   In view of the above, we find no merit in  these  appeals.   The  same
are dismissed with costs quantified at Rs.5 lakhs in each of the appeals.


                                                    …………..……..…………………………….J.
                                                              [ANIL R. DAVE]


                                                    …………..….………………………………..J.
                                                         [ADARSH KUMAR GOEL]
NEW DELHI
SEPTEMBER 23, 2015
-----------------------
[1]    1998 (7) SCC 105
[2]    2006 (6) SCC 94
[3]    1989 Supp. (2) SCC 656
[4]    1970 (2) SCC 550, 557
[5]    (1967) 3 SCR 84
[6]    2010 (11) SCC 557
[7]    1991 (3) SCC 136
[8]    1993 (2) SCC 507
[9]    1999 (2) Calcutta Law Times 264
[10]   AIR 1966 SC 489

It is pertinent to note here that initially there were two exits in the balcony portion of the cinema theatre. One portion was open as an exit, whereas another had been closed down on account of certain additional seats placed near the exit. The additional seats were arranged with permission of all authorities concerned and even the second exit had also been closed with permission of all authorities concerned. The representatives of the departments concerned like Home Department, Police Department, Fire Department, etc. had visited the theatre before giving necessary permission for increase in the number of seats, approval of the changed layout of seats and for closure of the second exit.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.597 OF 2010



SUSHIL ANSAL                                  .....APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT

                                WITH

                       CRIMINAL APPEAL NO.598 OF 2010




GOPAL ANSAL                                .....APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT



    WITH

                       CRIMINAL APPEAL NO.599 OF 2010




HARSARUP PANWAR                        ……APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT



                               WITH

                    CRIMINAL APPEAL NOs.600-602 OF 2010,
                  605 OF 2010, 606 OF 2010 AND 613 OF 2010





                              1 J U D G M E N T




1 ANIL R. DAVE, J.



CRIMINAL APPEAL NOS.597 AND 598 OF 2010



1.    The aforestated appeals  had  been  initially  heard  by  two  Hon’ble
Judges of this Court.  Though the order of conviction  had  been  upheld  by
the learned Judges, on the subject of sentence the learned Judges  differed.
 Justice T.S. Thakur passed the following order on the sentence:

“(i)  Criminal Appeal Nos.597 of 2010 and 598 of 2010 filed by Sushil  Ansal
(A-1) and Gopal Ansal (A-2) respectively are hereby dismissed upholding  the
conviction and sentences awarded to them.”


Whereas Justice Gyan Sudha Mishra passed the following order:

“44.  Therefore, for the reasons recorded hereinbefore, I  am  of  the  view
that in lieu of the enhanced sentence of a period of one year which I  allow
in the appeals preferred by AVUT and CBI, the same  be  substituted  with  a
fine of Rs 100 crores (one hundred crores) to be  shared  and  paid  by  A-1
Sushil Ansal and A-2 Gopal Ansal in equal measure i.e.  Rs  50  crores  each
and Rs 100 crores in all, and shall be paid by way of a demand draft  issued
in the name of the Secretary General of the Supreme  Court  of  India  which
shall be kept in a fixed deposit in  any  nationalised  bank  and  shall  be
spent on the construction of a trauma centre to be built in  the  memory  of
Uphaar Victims at any suitable place at  Dwarka  in  New  Delhi  as  we  are
informed that Dwarka is  an  accident-prone  area  but  does  not  have  any
governmental infrastructure or public health care centre to  treat  accident
victims. For this purpose, the State  of  Delhi,  as  DVB  which  is/was  an
instrumentality of the State, shall allot at least five  acres  of  land  or
more at any suitable location at Dwarka within a period of  four  months  of
this judgment and order on which a trauma centre for accident victims  along
with  a  Super  speciality  department/ward  for  burn  injuries  shall   be
constructed to be known as the “Victims of Uphaar  Memorial  Trauma  Centre”
or  any  other  name  that  may  be  suggested   by   AVUT/Uphaar   Victims’
Association. This trauma centre shall be treated as an extension  centre  of
the Safdarjung Hospital, New Delhi which is close to Uphaar Theatre and  was
the accident site which is hard-pressed  for  space  and  desperately  needs
expansion considering the enormous number  of  patients  who  go  there  for
treatment. The trauma centre to be built at Dwarka shall be  treated  as  an
extension centre of  the  Safdarjung  Hospital  to  be  constructed  by  the
respondent-accused Sushil Ansal and  respondent-accused  Gopal  Ansal  under
the supervision of the Building Committee  to  be  constituted  which  shall
include Secretary General of the Supreme Court, Registrar Administration  of
the Supreme Court along with a  representative  of  AVUT  nominated  by  the
Association and the Hospital Superintendent, Safdarjung Hospital, New  Delhi
within a period of two years from the date of allotment of the plot of  land
by  the  State  of  Delhi  which  shall  be  run  and  administered  by  the
authorities of the  Safdarjung  Hospital  Administration  as  its  extension
centre for accident victims.”

2.    In view of the difference of opinion between the  two  learned  judges
regarding quantum of sentence, the matter  has  been  placed  before  us  in
pursuance of the following order dated 5.03.2014 :-
“4. Criminal Appeals No. 597, 598 and 599 of 2010 filed  by  the  appellants
in those appeals and Criminal Appeals No. 605, 606 and 613 of 2010 filed  by
the State and Criminal Appeals No. 600-602 of 2010 filed by the  Association
of Victims of Uphaar Tragedy to the extent  the  said  appeals  involve  the
question of quantum of sentence to be awarded to  the  convicted  appellants
in the appeals  mentioned  above  shall  stand  referred  to  a  three-Judge
Bench”.

3.    We have heard the learned counsel appearing for the parties  and  have
also carefully gone through  that  portion  of  the  judgment,  whereby  the
sentence has been imposed upon the Appellants.

4.    Upon hearing  the  learned  counsel  and  on  perusal  of  the  record
pertaining to the case, we find that the root cause of  the  fire  was  1000
KVA transformer installed and maintained by the Delhi  Vidyut  Board  (DVB),
which was in the premises of Uphaar Cinema. The said 1000  KVA  transformer,
even though located within the Uphaar cinema premises,  did  not  belong  to
the appellants.

5.    The said  transformer  caught  fire  on  13.6.1997  around  6.55  a.m.
damaging the area surrounding the transformer.  The fire was  brought  under
control by 7.25 a.m. and it was repaired by two employees of the  DVB  along
with Senior Fitter, Bir Singh, who were possibly  not  highly  qualified  in
the field of Electrical Engineering.  The repairs were carried  out  without
use of any  special  equipment.  The  said  transformer  was  recharged  for
resumption of electric supply by 11.30 a.m. on the same day.


6.    As the factual matrix  would  further  unfurl,  on  the  fateful  day,
around 3:00pm, the matinee show of film ‘Border’ started. Between  3:55  and
4:55 p.m., there was a general power shut  down;  however  the  Cinema  show
continued. Immediately, on resumption of electricity at 4:55 pm,  there  was
intense and heavy sparking in the DVB transformer,  which  led  to  B  phase
cable detaching, sliding down of the B  phase  cable,  forming  an  arc  and
ultimately resulting in rupture of the Transformer fin. Through  this  slit,
the transformer oil spilled out, caught fire  and  consequently  set  ablaze
several vehicles parked nearby in the stilt floor. This fire  generated  hot
thick black  smoke,  which  travelled  upwards,  accelerated  by  a  Chimney
effect.

7.  The smoke entered the hall from the staircases, air  conditioning  ducts
as well as the area beneath the screen  and  the  audience  sitting  in  the
ground floor of the auditorium escaped immediately.   The  audience  sitting
in the balcony found it hard to escape as there were no lights due  to  lack
of power supply, nor were there any  emergency  lights  or  lights  to  give
indication about the exit.  Moreover, there were no warnings through  public
address system for immediate evacuation in an orderly  manner.  The  closure
of the right side exit,  elimination  of  one  exit  and  the  narrowing  of
another exit as well as introduction of certain seats  near  the  left  side
exit, together with bolting of certain doors in  the  balcony  caused  panic
and resulted in delayed escape of most of the spectators  occupying  balcony
seats. Most  of  the  spectators  were  subsequently  rescued  by  the  fire
fighters, but they were severely affected by the smoke. The  fire  was  soon
declared a major one and rescue operations continued till about 7:30pm.  The
entire mishap claimed lives of 59 persons besides  injuries  to  nearly  100
others.


8.   It is pertinent to note here that initially there  were  two  exits  in
the balcony portion of the cinema theatre. One portion was open as an  exit,
whereas another had been closed down on account of certain additional  seats
placed near the exit. The additional seats were  arranged  with   permission
of all authorities concerned and even the second exit had also  been  closed
with permission of all authorities concerned.  The  representatives  of  the
departments  concerned  like  Home  Department,  Police   Department,   Fire
Department, etc. had visited the theatre before giving necessary  permission
for increase in the number of seats,  approval  of  the  changed  layout  of
seats and for closure of the second exit.

9.    Under these circumstances,  when  another  exit  had  been  closed  on
account of arrangement of additional seats, which had been done with  proper
permission of the concerned authorities, the spectators of the  balcony  had
to rush only towards one exit which was leading to  the  staircase,  already
occupied with toxic gases including carbon monoxide.

10.   Due to inhalation of toxic gases including carbon  monoxide,  most  of
the spectators, who had occupied balcony seats, collapsed in the balcony  or
on the staircase  and  ultimately  the  unfortunate  mishap,  which  is  the
subject matter of this case, took place.

11.   In view of the aforestated undisputed facts, the issue with regard  to
imposition of sentence upon the appellants is to be decided by us.   We  are
concerned with imposition of sentence  in  a  criminal  case  and  not  with
awarding  damages  in  a  civil  case.  Principles  for  deciding  both  are
different.

12.   In the  instant  case,  we  are  only  concerned  with  imposition  of
appropriate sentence for the reason that the appellants  have  already  been
convicted of the offences under Sections 304-A/337/338 read with Section  36
of the Indian Penal Code (IPC) and Section  14  of  the  Cinematograph  Act,
1952 and the conviction has been affirmed by this Court.

13.   One can say that if the second exit leading to another  staircase  had
not been closed, possibly the damage and deaths could have been  less.   The
reason for which the second exit was closed was  arrangement  of  additional
seats and change of layout of seats in the  balcony.   The  appellants,  the
owners of the cinema premises, were aware of the  fact  that  one  exit  had
been closed due to addition of seats and change in the layout of  the  seats
and the said fact could  have  exposed  the  spectators  to  the  risk  they
actually faced, which ultimately resulted  into  the  abovesaid  mishap.  Be
that as it may, the fact remains that the appellants have been found  guilty
and they have been convicted.

14.   On the issue of sentence, one of our brother Judges, T.S.  Thakur,  J.
has upheld rigorous imprisonment of one year which has been imposed  by  the
High Court.   So far as Gyan Sudha Misra, J. is concerned, she  was  of  the
view that the sentence imposed was insufficient and therefore, it should  be
enhanced and possibly because the heirs of the victims were  not  interested
in getting compensation, she was of the view that  appropriate  fine  should
be imposed upon the appellants, which should be used for  a  public  purpose
so that in future, in the event of any such mishap, the injured persons  can
be given prompt and effective treatment.  The learned Judge had,  therefore,
perhaps  rightly  thought  about  imposing  rigorous  imprisonment  of   one
additional year and looking at the fact that the victims  had  already  lost
their lives and the amount  of  fine  which  could  be  recovered  from  the
appellants can be used for  a  better  public  purpose,  the  learned  Judge
imposed fine of Rs.50 crore on  each  of  the  appellants  in  lieu  of  the
additional sentence which had been proposed by observing:-

“40. Hence, I am of the view that interest of justice to some  extent  would
be served by imposing on the Accused Appellants a substantial fine  and  not
merely a jail sentence. Thus, while the sentence of one year imposed by  the
High Court is upheld, the additional sentence  of  one  year  further  while
allowing the appeal of AVUT, is fit to be substituted by a  substantial  sum
of fine to be shared equally by the Appellants Sushil Ansal and Gopal  Ansal
along with DVB which also can  not  absolve  itself  from  compensating  the
victims of Uphaar tragedy represented by the AVUT”.


“42. But while allowing the appeal of AVUT and CBI, I take note of the  fact
that since Sushil Ansal is now more than 74 years old and  was  running  the
theatre business essentially along with his brother Appellant  No.  2  Gopal
Ansal, I consider that the period of  enhanced  sentence  in  these  appeals
imposed on the Appellants Sushil Ansal and Gopal Ansal  may  be  substituted
with substantial amount of fine to be specified hereinafter and paid in  the
appeal bearing Nos. 600-602 of 2010 preferred by AVUT  and  Criminal  Appeal
Nos. 605-616 of 2010 preferred by the CBI  which  shall  be  shared  by  the
Appellant Sushil Ansal and Appellant Gopal  Ansal  in  equal  measure  along
with the Delhi Vidyut Board as I have upheld the sentence imposed  on  their
employees too. My view stands fortified by the order passed in the  case  of
Bhopal Gas Leak Tragedy where the punishment  for  criminal  negligence  was
allowed to be substituted by substantial compensation  which  were  paid  to
the victims or their legal representatives”.

15.   Shri Ram Jethmalani, learned senior counsel,  submitted  that  in  the
facts and circumstances of the present case, the amount of  fine  of  Rs.100
crore may be reduced and the view expressed  by  Misra,  J.  to  reduce  the
sentence of appellant - Sushil Ansal (A-1) to the period  already  undergone
considering his advanced age, be also made applicable to Gopal  Ansal  (A-2)
on the principle of parity.  He  submitted  that  both  the  appellants  had
already undergone substantial part of the sentence out of  sentence  of  one
year awarded to them and were willing  to  pay  substantial  amount  towards
fine in lieu of the  undergoing  remaining  period  of  sentence.   He  also
pointed out that out of  one  year  sentence,  they  had  already  undergone
substantive sentence of 5-6 months and with remissions,  sentence  undergone
worked out to about nine months.

16.   We have duly considered the matter.  It hardly needs to  be  mentioned
that an appropriate sentence has to be awarded by taking into  consideration
the gravity of offence, the manner of commission, the  age  of  the  accused
and other mitigating and aggravating  circumstances.   The  sentence  should
neither be excessively harsh nor ridiculously low.

17.   We are conscious of the fact that matter of this  magnitude  may  call
for a higher sentence, but the Court has  to  limit  itself  to  the  choice
available under the law prescribing sentence. The fact that remains is  that
the maximum sentence prescribed under the law is period  of  two  years  and
the High Court had chosen, in the facts and circumstances of  the  case,  to
award sentence of one year which has been approved by  Thakur,  J.   In  the
dissenting opinion by Misra, J. the modification is  that  the  sentence  be
enhanced but giving an option to pay  substantial  amount  in  lieu  of  the
enhanced sentence with further direction to reduce the jail sentence to  the
period already undergone,  if  the  amount  of  fine  in  lieu  of  enhanced
sentence is paid.

18.   After having considered the facts of the case, the views expressed  by
both the learned Judges and the arguments advanced by  the  learned  counsel
appearing for both sides, we are in agreement with  the  view  expressed  by
Misra, J. that sentence awarded by the High Court needs to  be  enhanced  to
the maximum period  of  two  years  under  Section  304-A  but  in  lieu  of
additional period of sentence of one year, the substantial  amount  of  fine
needs to be imposed.  We are further of the  view  that  in  case  the  said
amount of fine is paid,  the  sentence  should  be  reduced  to  the  period
already undergone, as indicated by Misra, J. in the  case  of  Sushil  Ansal
(A1). On the principle of parity, the case of Gopal Ansal  (A2)  will  stand
on the same footing as that of Sushil Ansal  (A1).   Thus,  we  are  of  the
considered opinion that ends of justice would meet  if  the  appellants  are
directed to pay fine so that the amount of fine can be used either  for  the
purpose of setting up a Trauma Centre in  NCT  of  Delhi  or  for  upgrading
Trauma Centres of Hospitals managed in NCT of Delhi  by  the  Government  of
Delhi.

19.   We, therefore, direct that a fine of Rs.30  crore  on  each  appellant
should be imposed and if the said fine is paid  within  a  period  of  three
months, the sentence of the appellants be reduced to  the  sentence  already
undergone.  We have noted the fact that as appellant no.1  is  fairly  aged,
it may not be fruitful to ask him to undergo rigorous imprisonment.  On  the
ground of parity and  on  the  peculiar  facts  of  this  case,  so  far  as
appellant no.2 may also not be constrained to undergo the  sentence,  if  he
also pays the same amount of fine. If the aforestated  amount  is  not  paid
within three months from the date of order  dated  19th  August,  2015,  the
appellants shall undergo two years’  rigorous  imprisonment,  including  the
sentence already undergone.

CRIMINAL APPEAL NO. 599/2010:-

20.   As regards the conviction of Appellant H.S. Panwar (A-15) assailed  in
Criminal Appeal No.  599/2010,  the  Ld.  Judges  dismissed  the  afore-said
appeal and affirmed the conviction u/s. 304-A/337/338 read with S.  36  IPC.
On the question of quantum of sentence qua  Appellant  H.S.  Panwar  (A-15),
the matter was placed before us as stated above.

21. In view of the facts discussed above and on the  ground  of  parity,  we
direct that Appellant  Harsarup  Panwar  (A-15)  shall  stand  sentenced  to
undergo rigorous imprisonment for  one  year.   However,  having  regard  to
advanced age and diseases like alzheimer’s disease suffered by  the  accused
and other peculiar facts and circumstances, if he pays Rs.10 lakh by way  of
fine, the sentence will stand reduced to the period  already  undergone.  If
he fails to pay the aforestated amount within three months  from  the  order
dated 19th August,  2015,  he  shall  undergo  the  sentence  of  one  year,
including the term which he  has  already  undergone.   Now,  we  have  been
informed that Appellant Harsarup Panwar (A-15) has already paid  Rs.10  lakh
as per operative order pronounced on 19th August, 2015.

22.  The aforestated fine imposed upon the appellants  in  Criminal  Appeals
No. 597, 598 and 599 of 2010 filed by Sushil Ansal (A-1), Gopal Ansal  (A-2)
and Harsarup Panwar (A-15) shall be given by way of a demand  draft  to  the
Chief Secretary of Delhi Government for setting up a new  trauma  centre  or
for upgrading the existing  trauma  centres  of  hospitals  managed  by  the
Government of NCT of Delhi.



CRIMINAL APPEAL NOs.600-602, 605, 606 and 613 of 2010


23. Consequently, Criminal Appeal No. 605, 606 and 613 of 2010 filed by  the
State and Criminal Appeal No. 600-602 of 2010 filed by  the  Association  of
Victims of Uphaar Tragedy are disposed of.

24.   In view of the above order, the impugned judgment stands  modified  so
far as the question of imposition of sentence is concerned and  the  appeals
are disposed of as partly allowed.


25.   We had passed the operative part of the order on  19th  August,  2015,
but since the Court time was almost over, we have now given the reasons  for
the said order.


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



                                       ………................................J.
                                      (KURIAN JOSEPH)


                                        ………...............................J.
                                               (ADARSH KUMAR GOEL)
NEW DELHI
SEPTEMBER 22,  2015