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Friday, May 13, 2016

In absence of work order, no one can compel to accept the supplies delivered for price = No communication has been placed on record between 31.3.2008 and 22.5.2008 asking printers to print and supply the booklets. No right could be said to have accrued on the basis of palpably illegal communication dated 22.5.2008.= The Division Bench of the High Court in the circumstances of the case has erred in directing that the booklets printed till 22.5.2008 be accepted. Booklets printed after 31.3.2008 were without any work order in existence. The communication dated 25.2.2008 did not confer on them a right to print books after 31.3.2008. Whatever booklets they had supplied till 31.3.2008 were accepted. Thus, the High Court has erred in the facts of the case to interfere in contractual matter and by granting the relief. However, we observe that in case payment has not been made to the printers for booklets which were supplied till 31.3.2008, it shall be made forthwith.


                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 4817 OF 2016
                  [Arising out of SLP [C] No.32730 of 2013]



State of Madhya Pradesh & Ors.               … Appellants
Vs.
M/s. Ruchi Printers                          … Respondent(s)
[With C.A. No. 4818 of 2016 @ SLP [C] No.36095/2013; and
C.A. No. 4819 of 2016 @ SLP [C] No.36096/2013]



                               J U D G M E N T



ARUN MISHRA, J.

1.    Leave granted.

2.    The State has preferred the appeal as against the judgment  and  order
passed by the High Court of M.P. in the writ appeal and the  writ  petitions
decided by a common order dated 4.9.2012  dismissing  the  writ  appeal  and
allowing the petitions, thereby directing the  State  Government  to  accept
all materials which was ready for delivery on 22.5.2008 and  quashing  order
dated  30.1.2009  cancelling  the  communication  dated  22.5.2008.  Further
direction has been issued to make payment to the printers as per  the  terms
and  conditions  of  the  order  dated  16.1.2008  read  with  order   dated
25.2.2008.
3.    Facts in short referred to from SLP [C] No.32730/2013 – State of  M.P.
& Ors. v. M/s. Ruchi Printers indicate that the  State  Printing  &  Writing
Articles Department  of  Madhya  Pradesh  through  its  Controller,  invited
quotations vide letter dated  2.1.2008  for  printing  Bhu-Adhikar  and  Rin
Pustikas. On 16.1.2008 printing order was placed with  M/s.  Ruchi  Printers
for supply of 37,07,726 copies of Bhu-Adhikar  and  Rin  Pustika.  At  least
half of the booklets were to be supplied in the first lot till 8.2.2008  and
the rest were to be supplied  before  25.2.2008.  On  25.2.2008  the  Deputy
Controller wrote a letter on behalf of the Controller  while  approving  the
modified booklet. The  printers  were  asked  to  ensure  the  supply  after
printing the allotted work. On 28.3.2008 another  letter  was  written  that
the time limit fixed was already over so rest of the work may  be  completed
till 31.3.2008. After 31.3.2008 no booklets shall be accepted. The  decision
dated 28.3.2008 was questioned by filing writ petitions. Said writ  petition
filed by M/s. Ruchi Printers had been allowed by Single  Bench  vide  common
judgment and order dated  6.11.2008.   State  was  directed  to  accept  the
supply of 10.75 lakhs of Rin Pustikas from M/s. Ruchi Printers and  to  make
payment in accordance with the terms and  conditions  of  the  contract.  In
another W.P. No.10319/2008 decided by same order,  the  single  Bench  asked
the petitioner to approach  the  State  Government  and  the  Government  to
consider the claim in respect of  the  materials  already  supplied  and  to
settle the claim if not already settled. No other relief was given.
4.    Aggrieved by the order passed in the case  of  Ruchi  Printers,  State
preferred a writ appeal which was heard and decided with writ  petitions  by
impugned common order.
5.    It was submitted on behalf of learned counsel appearing on  behalf  of
the State that the High  Court  has  erred  in  law  in  allowing  the  writ
petitions and  dismissing  the  writ  appeal.  As  per  the  initial  order,
booklets were required to be supplied by 25.2.2008.   Time  was  essence  of
contract. Though time  was  extended  but  it  was  made  clear  that  after
31.3.2008 no such booklets will be accepted, later on its  format  had  been
changed for the subsequent year as such they were of no use  to  the  State.
The payment was required to be made only on account of booklets  which  were
supplied till 31.3.2008. Letter dated 22.5.2008 was cancelled by  the  State
Government on 30.1.2009 and supply after 31.3.2008 had not been accepted  as
it was of no use due to change of format. The writ  petition  could  not  be
said to be an appropriate remedy for claiming the amount  in  case  of  non-
statutory contract.  The  High  Court  has  erred  in  directing  the  State
Government to accept the booklets printed till 22.5.2008.
6.    Learned counsel appearing on behalf of the respondents  has  supported
the impugned judgment and orders passed by the High Court and has  submitted
that in the writ petition filed by Ruchi Printers, order had been passed  by
Single Bench on 6.11.2008 to make payment within three  months  as  per  the
communication dated 22.5.2008. Thus there was  no  justification  to  recall
the communication dated 22.5.2008 by issuance of letter dated 30.1.2009.  As
the booklets had been printed the High Court had rightly directed to  accept
the supply. Thus no case for interference is made out.
7.    After hearing learned counsel for the parties, we are of  the  opinion
that the order for printing booklets was placed with printers on  16.1.2008.
The booklets were to be supplied on  time  bound  basis  by  25.2.2008.  The
respondents were well aware that the time was the essence  of  the  contract
and there was requirement of these booklets  on  time  bound  basis.  Though
communication  dated  25.2.2008  approving  format  was   issued   but   the
respondents very well knew that the time was the  essence  of  contract  and
the printing of booklets was to be completed at  the  earliest.  However  as
supplies  were  not  made  as  stipulated,  even  within  one  month   after
25.2.2008,  another  communication  dated  28.3.2008  was  issued   by   the
Controller to supply  Rin  Pustikas  before  31.3.2008.  In  case  any  work
remains incomplete, the  work  order  be  treated  as  cancelled.  Thus,  in
unequivocal terms, it was made clear that no booklets were  to  be  received
after 31.3.2008 and whatever booklets were ready they were  to  be  supplied
by 31.3.2008. Thus, in our  opinion,  there  was  no  rhyme  or  reason  for
printers to print any booklets after cancellation of order w.e.f.  31.3.2008
till  22.5.2008.   Printing  of  booklets   after   31.3.2008   was   wholly
unauthorized.  No doubt about it that on 22.5.2008 the Under  Secretary  had
issued a communication that certain specified  number  of  booklets  may  be
accepted. However, the said communication had been  recalled  on  30.1.2009.
The High Court, in our opinion, was not at all justified  in  enforcing  the
communication dated 22.5.2008 which  was  palpably  illegal  and  there  was
reason for the printers to print the booklets after 31.3.2008.  In  view  of
aforesaid  fact,  the  communication  dated  22.5.2008  had   been   rightly
cancelled on 30.1.2009 as these booklets were  no  more  required  by  State
Government due to further change  of  format  of  booklets.  Even  otherwise
timely supply  was  necessary  as  per  order  dated  16.1.2008  though  the
communication dated 25.2.2008 was silent as to the  time  within  which  the
supply was to be made. The printers were very well aware that booklets  were
required urgently and time was essence of the contract and time  for  supply
could not have been more than what  was  originally  stipulated.  Sufficient
time had been given  to  them  to  supply  the  booklets  and  the  booklets
supplied by them till 31.3.2008 had been  accepted  by  the  appellants  and
payment has also been made. Thus  after  the  order  for  printing  booklets
stood cancelled on failure to  supply  within  the  stipulated  period,  the
contract came to an end, there was no reason for the printers to  print  the
booklets.  No communication has been placed on record between 31.3.2008  and
22.5.2008 asking printers to print  and  supply  the  booklets.    No  right
could  be  said  to  have  accrued  on  the  basis   of   palpably   illegal
communication dated 22.5.2008.  The Division Bench of the High Court in  the
circumstances of the case has erred in directing that the  booklets  printed
till 22.5.2008 be accepted. Booklets printed after  31.3.2008  were  without
any work order in existence.  The  communication  dated  25.2.2008  did  not
confer on them a right to print books  after  31.3.2008.  Whatever  booklets
they had supplied till 31.3.2008 were accepted. Thus,  the  High  Court  has
erred in the facts of the case to interfere in  contractual  matter  and  by
granting the relief. However, we observe that in case payment has  not  been
made to the printers for booklets which were  supplied  till  31.3.2008,  it
shall be made forthwith.
 8.   Thus, the impugned judgment and order is set aside, the appeals are
allowed.   Parties to bear their own costs.

                                  …….. ……………………….J.
                                  (V. Gopala Gowda)



New Delhi;                        ……………………………..J.
May 5, 2016.                      (Arun Mishra)



ITEM NO.1B-For Judgment       COURT NO.9               SECTION IVA

               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

Civil Appeal  No(s).4817/2016 @ SLP(C) No.32730/2013

STATE OF M.P & ORS                                 Appellant(s)

                                VERSUS

M/S RUCHI PRINTERS                                 Respondent(s)

WITH
C.A. No. 4818/2016 @ SLP(C) No.36095/2013

C.A. No. 4819/2016 @ SLP(C) No.36096/2013

Date : 05/05/2016 These appeals were called on for pronouncement of
JUDGMENT today.


For Appellant(s)    Mr. C. D. Singh,Adv.

For Respondent(s)
                     Mr. Dinesh Chandra Pandey,Adv.

                     Mr. Ashiesh Kumar,Adv.


      Hon'ble Mr. Justice Arun Mishra pronounced the judgment of  the  Bench
comprising  Hon'ble  Mr.  Justice   V.Gopala   Gowda   and   His   Lordship.

      Leave granted.
      The appeals are allowed in terms of the signed reportable Judgment.
      Pending application(s), if any, stand(s) disposed of.


        (VINOD KUMAR JHA)                     (MALA KUMARI SHARMA)
                COURT MASTER                            COURT MASTER
   (Signed Reportable judgment is placed on the file)

Order 8 Rule 5= whether execution of sale deed in favour of plaintiff has been proved, the High Court has held that the sale deed has not been proved for want of examination of Buchamma. - It is settled law that denial for want of knowledge is no denial at all. The execution of the sale deed was not specifically denied in the written statement. Once the execution of the sale deed was not disputed it was not necessary to examine Buchamma to prove it. The provisions contained in Order 8 Rule 5 require pleadings to be answered specifically in written statement.= Effect of non - effective cross examination = there was no effective cross-examination made on the plaintiff’s witnesses with respect to factum of execution of sale deed, PW.1 and PW-2 have not been cross examined as to factum of execution of sale deed. The cross-examination is a matter of substance not of procedure one is required to put one’s own version in cross-examination of opponent. The effect of non cross-examination is that the statement of witness has not been disputed. The effect of not cross-examining the witnesses has been considered by this Court in Bhoju Mandal & Ors. v. Debnath Bhagat & Ors. AIR 1963 SC 1906. This Court repelled a submission on the ground that same was not put either to the witnesses or suggested before the courts below. Party is required to put his version to the witness. If no such questions are put the court would presume that the witness account has been accepted as held in M/s. Chuni Lal Dwarka Nath v. Hartford Fire Insurance Co. Ltd. & Anr. AIR 1958 Punjab 440. ; when attestation is not specifically challenged and witness is not cross-examined regarding details of attestation, it is sufficient for him to say that the document was attested. If the other side wants to challenge that statement, it is their duty, quite apart from raising it in the pleadings, to cross-examine the witness along those lines. ; It is also settled law that passing of consideration under a sale deed cannot be questioned by third party. Defendant no. 3 has not been able to establish her case that she is an adopted daughter of the deceased Yashoda and thus, she being the third party, could not have questioned the execution of the sale deed by Buchamma on the ground of passing of consideration ;whether the plaintiff was placed in possession by Buchamma, in our opinion, it is apparent that Yashoda was enjoying the property in her lifetime, though it appears that defendant no. 3 was residing with Yashoda, but she has not claimed any derogatory title to Yashoda nor has claimed adverse possession. Her claim of an adopted daughter of Yashoda has not been found established. The entry of possession in some revenue records simplicitor does not confer any right to defendant no. 3 to retain the possession of the property. The property on the death of Yashoda had been passed on to Buchamma being class IInd heir, as such she had the right to sell the property to plaintiff. Even if Buchamma had not placed plaintiff in possession of property on strength of his title conferred by way of sale deed in question he had right to recover possession. The first appellate Court was thus right in decreeing the suit. The High Court has erred in allowing appeal.

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO. 4816  OF 2016
               [Arising out of SLP (Civil) No. 13076 of 2007]

Muddasani Venkata Narsaiah (D) Th. Lrs.                      .. Appellants
                                   Versus
Muddasani Sarojana                                      .. Respondent

                               J U D G M E N T

Arun Mishra, J.

1.    Leave granted.

2.    The plaintiff is in appeal before us  aggrieved  by  reversal  of  the
judgment and decree of first appellate Court by the  High  Court  in  Second
Appeal and restoring the judgment and decree of the trial  Court  dismissing
the suit filed by the plaintiff.

3.    The plaintiff filed a suit before the trial Court  for  possession  of
disputed property and mesne profits based upon the title.   It  was  averred
in the plaint that Veeraiah and Balaiah were sons  of  late  Rajaiah.   Both
the sons predeceased their father Rajaiah.  Plaintiff  is  son  of  Veeraiah
and Yashoda is wife of the said late Balaiah.   After the death of  Rajaiah,
the property was given as widow’s estate to Yashoda.  It was to be  reverted
to the plaintiff after the death of Yashoda.  Yashoda enjoyed  the  property
in her lifetime.  However, after her death, Smt. Gandla Buchamma,  surviving
sister of late Balaiah succeeded to the property and sold  it  to  plaintiff
vide  registered  sale  deed  dated  25.4.1981  and   also   delivered   the
possession.  Thereafter on 12.6.1981 the  defendants  forcibly  evicted  the
plaintiff from the property.

4.    The defendants in their written  statements  contended  that  Ballaiah
was the absolute owner of the property and after his  death  Yashoda  became
the absolute  owner  of  the  property.    She  was  in  possession  of  the
property. It was not to be reverted back to the plaintiff  after  the  death
of Yashoda.  Yashoda after death of her husband, as per authority  given  by
her late husband, had adopted defendant no. 3 Sarojana when she was aged  12
years and thereafter she resided in the house of Yashoda  as  her  daughter.
Thus, Buchamma did not  succeed  to  the  property.   The  adopted  daughter
defendant no. 3 succeeded to property by  inheritance.   Defendants  had  no
knowledge of the registered sale deed.  Buchamma was not in  possession  and
had no authority to sell the property to the plaintiff.
5.    The trial Court framed the issue as to the ownership  of  Yashoda  and
also on the question of factum of adoption of defendant no. 3  on  18.2.1959
and whether she became the owner by virtue of adoption after  the  death  of
Yashoda.  A specific issue was  also  framed  by  the  trial  Court  on  the
question whether on death of Yashoda, Buchamma, who is the surviving  sister
of Yashoda’s late husband  Balaiah,  became  heir  and  owner  of  the  said
property and whether the plaintiff  had  acquired  the  title  to  the  suit
property vide registered sale deed dated 25.4.1981executed  by  Buchamma  in
favour of the plaintiff.

6.    The trial Court while  dismissing  the  suit  inter  alia  found  that
passing of consideration has not been proved under the sale  deed  and  that
it was a nominal document. The  plaintiff  ought  to  have  filed  suit  for
declaration of title.   Defendant no. 3 was cultivating the suit  land  from
the date of the death of Yashoda since  1981.   However,  it  has  not  been
proved that defendant no. 3 was adopted  daughter  of  late  Yashoda.    The
factum of adoption has not been established.  The possession  had  not  been
delivered by Buchamma to the plaintiff on the date of the execution  of  the
sale deed i.e. 25.4.1981.  The plaintiff must succeed  on  the  strength  of
his own case, not on the weaknesses of  the  defendants.   The  trial  Court
also found that it was not established that Buchamma was the sole  surviving
sister of late Balaiah.

7.    On first appeal being preferred  into  the  Court  of  1st  Additional
District Judge, Karimnagar, it allowed  the  appeal  and  the  suit  of  the
plaintiff had been decreed.  It found that the execution of  the  sale  deed
has been established.  Yashoda was the absolute owner in possession  of  the
property in her lifetime.   There was no Class I heir of  deceased  Balaiah.
Buchamma was a Class II heir being the only surviving  sister  of  Yashoda’s
late husband Balaiah as such succeeded to the property.   Since it  was  not
denied in written statement that Buchamma is the only  surviving  sister  of
Balaiah,  she  was  entitled  to   succeed   to   the   property   of   late
Balaiah/Yashoda.    The  adoption  of  defendant  no.   3   has   not   been
established.  The case set up by defendant no.3 that Yashoda cultivated  the
suit land during her lifetime has not been found to be  established  in  the
absence of any document to that effect.   Defendant no.3  had  no  title  to
the  property,  as  such   she  had  no  right  to  retain  its  possession.
Defendant no. 3 being third party could  not  question  the  sale  deed  and
passing of consideration.  The sale deed is  valid  and  binding.   Even  if
Buchamma has not delivered the possession to the plaintiff  that  would  not
affect his right to claim possession on the strength of his title  conferred
upon him under the sale deed.  It was not necessary to examine  Buchamma  as
she had never objected to  the  execution  of  sale  deed.  In  the  written
statement only her authority to sell the property was  questioned.   It  was
not necessary to file a suit for declaration of title as  Buchamma  acquired
the suit property  by  way  of  inheritance  from  the  absolute  owner  and
thereafter sold it to the plaintiff.

8.    The High Court in the second appeal has not disturbed  the  concurrent
findings that the adoption of defendant no.3 Sarojana  by  Yashoda  has  not
been established.  However, the High Court has held that the sale  deed  has
not  been  proved  for  want  of  examination  of  Buchamma   and   in   the
circumstances it was  necessary  for  the  plaintiff  to  file  a  suit  for
declaration of title.  The High Court observed that the suit for  possession
and mesne profits thus could not have been  filed  and  allowed  the  second
appeal.    Aggrieved thereby, the  plaintiff  has  come  up  in  the  appeal
before us.

9.    It was submitted on behalf of the appellant that the  High  Court  has
erred in law in reversing the  judgment  and  decree  passed  by  the  first
Appellate Court.  It was not necessary to seek the  relief  for  declaration
of title as there was no serious cloud on the title of the  plaintiff.   The
authority of Buchamma to execute the sale deed had been  put  into  question
not factum of execution of  sale  deed.    Thus  it  was  not  necessary  to
examine Buchamma and defendant No.3 being a third party cannot question  the
passing of consideration under the sale deed.  Buchamma was the  sole  Class
II heir left.

10.   Per contra, the learned counsel for  the  respondents  urged  that  no
case of interference was made out.   It was necessary for plaintiff to  seek
relief for declaration of title.   The  suit  has  rightly  been  dismissed.
The defendant no. 3 was in possession even in the lifetime of  Yashoda.   It
is submitted that even if her case of adoption has  not  been  found  to  be
established, the plaintiff has not been able to  establish  his  entitlement
to recover the possession.

11.   In the instant case, as per concurrent findings  of  all  the  courts,
defendant no. 3 has failed to prove the factum of her adoption  by  deceased
Yashoda in the year 1959.  There was no corresponding document  of  adoption
and other documentary evidence showing that defendant no. 3  had  ever  been
adopted by the deceased Yashoda.  True it is that in  some  of  the  revenue
entries the name of defendant no. 3 has been shown as person in  possession,
but not in the capacity of adopted daughter.   Yashoda  was  admittedly  the
owner of the  property.   The  plaintiff  has  based  his  case  to  recover
possession on the strength of the sale deed  executed  by  Buchamma  in  his
favour.

12    In the aforesaid background of facts, we come to the question  whether
it was necessary to seek relief or declaration of title.   In  our  opinion,
the plaintiff has filed the suit for possession on the  strength  for  title
and not only on the basis of prior possession.  It was not  a  summary  suit
for ejectment filed under Section  6  of  the  Specific  Relief  Act,  1963.
Thus, plaintiff could succeed in suit for possession on the strength of  the
title.  The issue had been framed on the question of title of the  plaintiff
as well as on the question of adoption of defendant no.3.  On the  basis  of
title claimed in the suit, both the parties have adduced their  evidence  in
support of their respective cases.  The main plea of defendant  no.  3  that
she was an adopted daughter of Yashoda has not been found to be  established
by the trial Court, the first Appellate Court or by the High Court.    Thus,
in our opinion, there was no serious cloud on the title of the plaintiff  so
as to force him to seek the relief for declaration of title in  the  instant
case which was in fact based on the strength of the sale  deed  executed  by
Buchamma, who was the sole surviving heir of Balaiah as  such  succeeded  to
the property and had the right to execute the sale deed  in  favour  of  the
plaintiff.

13.   We are fortified in our aforesaid conclusion by a decision in  Kurella
Naga Druva Yudaya Bhaskara Rao v.  Galla  Jani  Kamma  (2008)  15  SCC  150,
wherein this Court has examined the question of maintainability of suit  for
possession without  prayer  for  declaration  of  title.    This  Court  has
referred to its earlier decision in Anathula  Sudhakar  v.  P.  Buchi  Reddy
(2008) 4 SCC 594, wherein the plaintiff had purchased the  suit  land  under
registered sale deed dated 10.4.1957 and the defendant  did  not  claim  the
title with reference to any document but claimed to have perfected title  by
adverse possession.  It was held by this Court that the said  plea  did  not
prima facie put any cloud over the plaintiff’s title  calling  him  to  file
suit for declaration of title.  Unless  there  is  serious  cloud  over  the
title of the plaintiff there is no need to  file  suit  for  declaration  of
title. The suit for possession was maintainable.  This Court  laid  down  as
follows:

“16. The plaintiff had purchased the suit land under  registered  sale  deed
dated 10.4.1957. Defendant  did  not  claim  title  with  reference  to  any
document but claimed to have perfected title by adverse possession.  A  mere
claim  by  the  defendant  that  he  had  perfected  his  title  by  adverse
possession, does not mean that a cloud is raised over plaintiff's title  and
that the plaintiff who is the owner, should file a suit for  declaration  of
title. Unless the defendant raises a serious cloud over  the  title  of  the
plaintiff, there is no need to file a suit for  declaration.  The  plaintiff
had  title  and  she  only  wanted  possession  and  therefore  a  suit  for
possession was maintainable. We are fortified in this view by the  following
observations of this Court in Anathula Sudhakar v. P. Buchi Reddy  (2008)  4
SCC 594:

“14. We may however clarify that a prayer for declaration will be  necessary
only if the denial of title by the defendant  or  challenge  to  plaintiff's
title raises a cloud on the title of plaintiff to the property. A  cloud  is
said to raise over a person's title, when some apparent defect in his  title
to a property, or when some prima facie right of a third party over  it,  is
made out or shown. An action for declaration, is the remedy  to  remove  the
cloud on the title to the property. On the other hand, where  the  plaintiff
has clear title supported by documents, if a trespasser  without  any  claim
to title or an interloper without any  apparent  title,  merely  denies  the
plaintiff's title, it does not amount to raising a cloud over the  title  of
the plaintiff and it will not be necessary for  the  plaintiff  to  sue  for
declaration. ...."


14.   Coming to the question whether execution of sale  deed  in  favour  of
plaintiff has been proved, the High Court has held that the  sale  deed  has
not been proved for want of examination of Buchamma.   The  High  Court  has
ignored the pleadings of the parties and the evidence  on  the  question  of
execution of sale deed which establishes that sale deed  had  been  executed
by Buchamma in favour of the plaintiff.   In the written statement filed  on
behalf of the defendants, the sale deed was denied for  want  of  knowledge.
A perusal of same indicates that the authority of Buchamma  to  execute  the
sale deed in favour of the plaintiff was put into question.   Defendant  no.
3 Sarojana in her deposition in court did not deny the fact that  sale  deed
was executed by Buchamma in favour of the plaintiff.   She has  stated  that
she was not aware whether Buchamma has executed any sale deed in  favour  of
the plaintiff.  She only asserted that  she  was  the  adopted  daughter  of
Yashoda.

15.   It is settled law that denial for want of knowledge is  no  denial  at
all.  The execution of the sale deed was  not  specifically  denied  in  the
written statement.  Once the execution of the sale deed was not disputed  it
was  not  necessary  to  examine  Buchamma  to  prove  it.   The  provisions
contained in Order 8 Rule 5 require pleadings to  be  answered  specifically
in written statement.  This Court in Jahuri Sah &  Ors.  v.  Dwarika  Prasad
Jhunjhunwala AIR 1967 SC 109 has laid  down  that  if  a  defendant  has  no
knowledge of a fact pleaded by the plaintiff is not tantamount to  a  denial
of existence of fact, not even an implied denial.  Same  decision  has  been
followed by Madhya Pradesh High Court in Dhanbai D/o  Late  Shri  Cowash  v.
State of M.P. & Ors. 1978 MPLJ 717.   The High Court of  Madhya  Pradesh  in
Samrathmal & Anr. v. Union of India, Ministry of Railway & Ors. AIR 1959  MP
305 relying on P.L.N.K.L. Chettyar Firm v. Ko Lu Doke AIR 1934 Rang 278  and
Lakhmi Chand v. Ram Lal AIR 1931 All. 423,  had  also  opined  that  if  the
defendant did not know of a fact, denial of the knowledge  of  a  particular
fact is not a denial of the fact and has not even the effect of putting  the
fact in issue.

16.   Moreover,  there  was  no  effective  cross-examination  made  on  the
plaintiff’s witnesses with respect to factum  of  execution  of  sale  deed,
PW.1 and PW-2 have not been cross examined as  to  factum  of  execution  of
sale deed.  The cross-examination is a matter of substance not of  procedure
one is required to put one’s own version in cross-examination  of  opponent.
The effect of non cross-examination is that the  statement  of  witness  has
not been disputed. The effect of not cross-examining the witnesses has  been
considered by this Court in Bhoju Mandal & Ors. v.  Debnath  Bhagat  &  Ors.
AIR 1963 SC 1906. This Court repelled a  submission  on  the   ground   that
same  was  not  put  either  to  the        witnesses  or  suggested  before
the courts below.  Party is required to put his version to the  witness.  If
no such questions are put the court would presume that the  witness  account
has been accepted as held in M/s. Chuni Lal Dwarka  Nath  v.  Hartford  Fire
Insurance Co. Ltd. & Anr. AIR 1958 Punjab 440.   In  Maroti  Bansi  Teli  v.
Radhabai w/o Tukaram Kunbi & Ors. AIR 1945 Nagpur 60, it has been laid  down
that the matters sworn to by one  party  in  the  pleadings  not  challenged
either in pleadings or cross-examination by other party must be accepted  as
fully established.  The High Court of Calcutta in A.E.G.  Carapiet  v.  A.Y.
Derderian AIR 1961 Cal. 359 has laid down that the party is obliged  to  put
his case in cross-examination of witnesses of opposite party.  The  rule  of
putting one’s version in cross-examination is one of essential  justice  and
not merely technical  one.   A  Division  Bench  of  Nagpur  High  Court  in
Kuwarlal Amritlal v. Rekhlal Koduram & Ors. AIR  1950  Nagpur  83  has  laid
down that when attestation is not specifically  challenged  and  witness  is
not cross-examined regarding details of attestation, it  is  sufficient  for
him to say that the document was  attested.  If  the  other  side  wants  to
challenge that statement, it is their duty, quite apart from raising  it  in
the pleadings, to cross-examine the witness along those lines.   A  Division
Bench of Patna High Court in Karnidan Sarda & Anr. v.  Sailaja  Kanta  Mitra
AIR 1940 Patna 683 has laid down that it cannot be too  strongly  emphasized
that the system of administration of justice allows of cross-examination  of
opposite party’s witnesses for the purpose of testing  their  evidence,  and
it must be assumed that when the witnesses were  not  tested  in  that  way,
their  evidence  is  to  be  ordinarily   accepted.     In   the   aforesaid
circumstances, the High Court has gravely erred  in  law  in  reversing  the
findings of the first Appellate Court as to the factum of execution  of  the
sale deed in favour of the plaintiff.

17.   It is also settled law that passing  of  consideration  under  a  sale
deed cannot be questioned by third party.  Defendant  no.  3  has  not  been
able to establish her case that she is an adopted daughter of  the  deceased
Yashoda and thus, she being the third party, could not have  questioned  the
execution of the  sale  deed  by  Buchamma  on  the  ground  of  passing  of
consideration as rightly laid down by the  High  Court  of  M.P.  in  Pandit
Ramjilal Tiwari v. Vijai Kumar & Ors. 1970 MPLJ 50. The High Court of  Patna
has also held that passing of consideration can be questioned by a party  or
his representative in Mt. Akli v. Mt. Daho AIR 1928 Patna  44.   Similar  is
the view of the High Court of Nagpur in Maroti  Bansi  Teli  (supra).  Thus,
the High Court has erred in law on this ground also in dismissing the  suit.


18.   Coming to the question whether the plaintiff was placed in  possession
by Buchamma, in our opinion, it is apparent that Yashoda  was  enjoying  the
property in her lifetime,  though  it  appears  that  defendant  no.  3  was
residing with Yashoda, but she has  not  claimed  any  derogatory  title  to
Yashoda nor has  claimed  adverse  possession.   Her  claim  of  an  adopted
daughter  of  Yashoda  has  not  been  found  established.    The  entry  of
possession in some revenue records simplicitor does not confer any right  to
defendant no. 3 to retain the possession of the property.  The  property  on
the death of Yashoda had been passed on to Buchamma being class  IInd  heir,
as such she had the right to sell  the  property  to  plaintiff.    Even  if
Buchamma had not placed plaintiff in possession of property on  strength  of
his title conferred by way of sale deed in question he had right to  recover
possession.  The first appellate Court  was  thus  right  in  decreeing  the
suit.   The High Court has erred in allowing appeal.

19.   In the circumstances, appeal is allowed,  the  impugned  judgment  and
order passed by the High Court dismissing the suit  is  set  aside  and  the
judgment and decree passed by the first Appellate Court is  restored.    The
parties to bear their own costs.




                                             …………………………J.
                                             (V. Gopala Gowda)



New Delhi;                                   ………………………..J.
May   5, 2016.                               (Arun Mishra)









ITEM NO.1A-For Judgment       COURT NO.9               SECTION XIIA

               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

Civil Appeal  No(s).4816/2016 @ SLP(C)No.13076/2007

MUDDASANI VENKATA NARSAIAH(D)TR.LRS.                Appellant(s)

                                VERSUS

MUDDASANI SAROJANA                                 Respondent(s)

Date : 05/05/2016 This appeal was called on for pronouncement of JUDGMENT
today.

For Appellant(s)
                     Mr. K. Shivraj Choudhuri,Adv.

For Respondent(s)
                     Mr. Sridhar Potaraju,Adv.


      Hon'ble Mr. Justice Arun Mishra pronounced the judgment of  the  Bench
comprising  Hon'ble  Mr.  Justice   V.Gopala   Gowda   and   His   Lordship.

      Leave granted.
      The appeal is allowed in terms of the signed reportable Judgment.
      Pending application(s), if any, stand(s) disposed of.


        (VINOD KUMAR JHA)                     (MALA KUMARI SHARMA)
                COURT MASTER                            COURT MASTER
   (Signed Reportable judgment is placed on the file)

in the absence of appeal, no court dismiss the interim injunction order made absolute pending disposal of the case = the District Judge having decided the injunction application in the first instance in appellant's favour vide order dated 04.01.2012 erred in rejecting the application made by the appellant second time vide order dated 12.07.2012. It is not in dispute that the respondents despite having suffered the injunction order dated 04.01.2012 did not file any appeal against this order. Such order thus attained finality and was, therefore, binding on the parties.=we hold that the appellants have made out a prima facie case in their favour for grant of injunction against the respondents so also they have made out a case of balance of convenience and irreparable loss in their favour as was held by this Court in the case of Union of India (DGS&D) (supra). They are, therefore, entitled to claim injunction against the respondent in relation to encashment of Bank Guarantee no. 12/2006 dated 04.08.2006.



                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.4814 OF 2016
                  (ARISING OUT OF SLP(C) No. 27052 of 2012)



      M/s Gangotri Enterprises Ltd.                Appellant(s)


                             VERSUS


      Union of India & Ors.                  Respondent(s)




                               J U D G M E N T


Abhay Manohar Sapre, J.
1)    Leave granted.
2)    This appeal is filed  against  the  final  judgment  and  order  dated
23.07.2012 of the High Court of Uttar Pradesh  Judicature  at  Allahabad  in
F.A.F.O. No. 2930 of 2012 whereby the High Court dismissed the appeal  filed
by the appellant herein and upheld the order of  District  Judge  which  had
refused to grant an interim injunction restraining  encashing  of  the  Bank
Guarantee by the respondents herein.
3)    In order to appreciate the issue involved in this appeal,  which  lies
in a narrow compass, it is necessary to set out the relevant facts in  brief
infra.
4)    The respondents, i.e., North Central Railway invited tender for  doing
“earth work  in  embankment  and  cutting  including  provision  of  machine
crushed/blended material blanketing layer and construction of RCC  Box  type
minor bridges at CH-84700M to 114100M”, in connection with  laying  down  of
Agra-Etawah new BG Rail Line.  The appellant-a Limited Company  applied  for
the said tender and its tender being the lowest  one  was  accepted  by  the
respondents on 14.03.2005 and  accordingly  the  letter  of  acceptance  was
issued in appellant’s favour.  The  contract  agreement  No.  CE(C)  ‘North’
ALD/A-E/Contract/EW-III  dated  22.08.2005  was  then  signed  between   the
parties. The total value of the contract was  Rs.14,62,46,742/-,   the  date
of commencement of work was 14.03.2005 and the date of  completion  of  work
was  13.03.2007.  As the work could not be completed within  the  prescribed
time, on the request of the appellant-Company, the  period of completion  of
work was extended twice by the  respondents,  firstly,  from  14.03.2007  to
31.12.2007 and again upto 30.09.2008 without levy of penalty and with  price
variation clause benefit.
5)    On 14.07.2006, the appellant-Company was granted another work  by  the
respondents-North    Central     Railway     vide     letter     No.     74-
W/4/1/347/WA/ANVR/SERd./TCR for construction of New Station  Building  (G+2)
circulating  area,  various  service  buildings,  construction  of  platform
shelters with RCC Column and beam, Underground and  Overhead  water  storage
tanks, water supply pipeline network and other  misc.  works  in  connection
with the Development of New Passenger Terminal at Anand Vihar  (East  Delhi)
[hereinafter referred to as “Anand Vihar works”].  In  connection  with  the
grant  of  the  Anand  Vihar  works,  the  appellant-Company   submitted   a
Bank/Performance Guarantee bearing No. 12/2006  dated  04.08.2006  from  its
banker Indian  Mercantile  Co-operative  Bank  Ltd.,  Cantt.  Road,  Lucknow
(hereinafter referred to as ‘Bank’) for a sum of Rs.1,32,78,820/-.
6)    Since the work relating to contract  dated  22.08.2005  could  not  be
completed within the prescribed time/extended time by the appellant  due  to
non-availability of site because of the agitation of the  farmers  and  non-
supply of the specification or drawing of most of the small bridges  by  the
respondents, as complained by the appellant, the Agra-Etawah contract  dated
22.08.2005  was  terminated  by  the  respondents  vide  its  letter   dated
30.04.2009.  After  inviting  fresh  tenders,  the  rest  of  the  work  was
allocated  by  the  respondents  to  another  Company,  namely,   M/s   Hanu
Infrastructure Pvt. Ltd. Kasganj, Kashiram Nagar  for approximately  Rs.  11
Crores on 10.06.2011  without  giving  any  information  to  the  appellant-
Company.
7)    On 30.09.2010, the appellant got  the  completion  certification  from
the respondents for the Anand Vihar works with a defect liability period  of
six months, which also came to an end on  30.03.2011.   Thus  the  appellant
became entitled to seek the release of the  Bank/Performance  Guarantee  No.
12/2006 submitted by it for the said work from the respondents.
8)    On 27.06.2011,  the  appellant,  therefore,  wrote  a  letter  to  the
respondents-North  Central  Railway  for  return  of  the   Bank/Performance
Guarantee No. 12/2006.
9)    On 10.06.2011, the North Central Railway issued an  internal  circular
to all concerned departments of the Railways for withholding of dues of  the
appellant-Company stating  therein  that  the  contract  of  the  appellant-
Company dated 22.08.2005 or the New Agra-Etawah BG Line  was  cancelled  and
the same had caused the respondents a loss of Rs.5,58,16,036.33.   The  said
circular came to the knowledge of the appellant on 18.07.2011.
10)   On 30.11.2011,  the  respondents  through  their  accounts  department
wrote a letter to the Bank which had  furnished  Bank  Guarantee  No.12/2006
for and on behalf of the appellant for  the  encashment  of  the  said  Bank
Guarantee.
11)   On 02.12.2011, the final bill for the Anand Vihar works  were  cleared
by the respondents and  the  payment  for  the  same  was  released  by  the
respondents.
12)   Since the disputes had arisen between the parties in relation  to  and
arising out of the contract dated 22.08.2005, the appellant  invoked  Clause
36 read with Clause 64 of the  General  Conditions  of  Contract  (in  short
“GCC”) which provided for the settlement of dispute by arbitration.
13)   After initiation of the arbitration,  the  appellant,  on  04.01.2012,
moved an application under Section 9 of  the  Arbitration  and  Conciliation
Act, 1996 (hereinafter referred  to  as  “the  Act”)   before  the  District
Judge,  Allahabad  bearing  Arbitration  Suit  No.  411  of   2011   seeking
injunction on encashment of the Bank Guarantee deposited by it in the  Anand
Vihar works, against the respondents.  It was  inter  alia  alleged  in  the
application that the respondents-North Central  Railway  have  no  right  to
encash the Bank Guarantee No.12/2006 furnished by the appellant in  relation
to dispute arising  out  of  another  contract  dated  22.08.2005.   It  was
alleged that firstly, Bank Guarantee was not furnished by the  appellant  in
relation to contract dated 22.08.2005 but was furnished  in  performance  of
another contract dated 14.07.2006 (Anand Vihar works) which  is  a  separate
contract  and  has  nothing  to  do  with  the  contract  dated  22.08.2005.
Secondly, it was alleged that  so  far  as  the  contract  dated  14.07.2006
(Anand Vihar works) is concerned, the work was completed  well  within  time
and also to the satisfaction of the respondents  and  for  which  Completion
Certificate  was  also  given  to  the  appellant  by  the  respondents   on
30.09.2010.  Thirdly, it was  alleged  that  since  the  Bank  Guarantee  in
question was in the nature of performance Guarantee  for  due  execution  of
contract dated 14.07.2006 (Anand Vihar  works)  and  the  same  having  been
performed by the appellant to  the  satisfaction  of  the  respondents,  the
appellant-Company  was  entitled  to  get  its   Bank  Guarantee  No.12/2006
released from  the  respondents.  It  was  further  alleged  that  in  these
circumstances, the respondents have no right to encash  the  Bank  Guarantee
in relation to any dues arising out of other contract  with  the  appellant.
It was also alleged that in any event, so long as the disputes  arising  out
of the contract dated 22.08.2005 are not finally decided by  the  arbitrator
and liabilities of the parties are not   ascertained as to, who has  to  pay
how much sum by way of damages and whether any one is at all liable to  pay,
there is  no  sum  “due”  or  “payable”  either  by  the  appellant  to  the
respondents or/and vice  versa  and  hence  the  respondents  cannot  invoke
Clause 62(1) of GCC for realization of any money/sum by encashing  the  Bank
Guarantee from the appellant.
 14)  The respondents resisted the petition and inter  alia  contended  that
Clause 62(1) of GCC empowers the respondents to make recovery  of  any  dues
from the appellant.  It was contended that  since  the  respondents  have  a
claim/dues  for  payment  of  a  sum  of   money   against   the   appellant
(contractor), they (respondents) would be entitled to exercise  their  right
of recovery given to them under Clause 62(1) even if such claim is  not  for
a “sum due” and “sum payable” and is a claim for “damages”  though  disputed
by the appellant and remains to be adjudicated upon in a court of law or  by
the arbitrator.  It was contended  that  the  respondents  were,  therefore,
entitled to encash the Bank Guarantee in question in relation to  dues/claim
made by the respondents against the appellant.
15)   By order dated 04.01.2012, the District Judge allowed the  application
made by the appellant and restrained the  respondents  from  encashing  Bank
Guarantee  till  appointment  of  arbitrator  or  constitution  of  Arbitral
Tribunal.  It may be mentioned here that the respondents did  not  file  any
appeal against this order, which attained finality.
16)   By  letters  dated  20.01.2012  and  29.01.2012,  the  appellant  then
requested the respondents for return of its Bank Guarantee.
17)   On 13.03.2012, an arbitration Tribunal was constituted as  per  Clause
32 read with Clause 64 of the contract between the parties  which  comprised
of Shri Arun Kumar, CCE/NCR/ALD, Shri A.K. Bijalwan  FA&CAO/F&B/NCR/ALD  and
Shri R. Rajamani Former CCRS & Member/Arbitrator to  look  into  the  claims
and the counter claims of the  parties.   The  arbitration  proceedings  are
pending.
18)   On 21.03.2012, the  Deputy  Chief  General  Manager/Const./SE  Rd/NDLS
wrote to the Branch Manager of the Indian Mercantile  Cooperative  Bank  for
extension of Bank  Guarantee,  which  was  valid  upto  13.01.2012.  On  the
request of the respondents, the Bank extended the period of  Bank  Guarantee
for another six months, i.e., upto 13.07.2012.
19)   On 04.04.2012, the respondents through their accounts office  wrote  a
letter to the Branch Manager of the Bank to encash the said  Bank  Guarantee
in their favour.
20)   Since the respondents went on insisting for  encashment  of  the  Bank
Guarantee again and again saying  that  order  dated  04.01.2012  passed  by
District Judge no longer survives as its life was  only  upto  the  date  of
constitution of arbitral Tribunal and hence the respondents became  entitled
to encash the Bank Guarantee, the   appellant again filed a  petition  under
Section 9 of the Act bearing Arbitration Suit No. 216  of  2012  before  the
District Judge, Allahabad seeking injunction against  the  respondents  from
encashing the Bank Guarantee.
21)   By order dated 12.07.2012, the District Judge dismissed  the  petition
and declined to grant injunction to the appellant.  This time, the  District
Judge accepted the stand taken by  the  respondents  and  held  that  Clause
62(1) empowers the respondents to recover any dues/claim from the  appellant
and hence the respondents were  within  their  rights  to  invoke  the  bank
Guarantee and recover the dues relating to other contract.
22)   Aggrieved by  the  said  order,  the  appellant  preferred  an  appeal
bearing  F.A.F.O. No. 2930 of 2012 before the High Court.
23)   By impugned judgment dated 23.07.2012, the High Court  concurred  with
the view taken by the District Judge and dismissed the appellant’s appeal.
24)   Challenging the said judgment, the appellant has filed this appeal  by
way of special leave.
25)   Heard Mr. B. Adinarayan Rao, learned senior counsel for the  appellant
and Mr. Atul Chitaley, learned senior counsel for the respondents.
26)   Mr. B. Adinarayan  Rao,  learned  senior  counsel  appearing  for  the
appellant (Contractor) while assailing the legality and correctness  of  the
impugned order reiterated the same submissions,  which  were  urged  by  the
appellant before the two Courts below in support of  the  application  filed
by the appellant under Section 9 of the Act. His submission was  that  since
the Bank Guarantee in question was in the nature of
performance guarantee furnished by the appellant for due performance of  one
contract (Anand Vihar works) dated 14.07.2006   and  the  same  having  been
admittedly  performed  by  the  appellant  to  the   satisfaction   of   the
respondents (North  Central  Railway),  as  is  clear  from  the  completion
certificate dated  30.09.2010  issued  by  the  respondents  in  appellant's
favour, the purpose for which the Bank  Guarantee  had  been  furnished  was
over  as  soon  as  the  Satisfaction  Certification  was  issued   by   the
respondents in appellant’s favour.  Learned  counsel,  therefore,  contended
that the appellant became entitled to claim release of  the  Bank  Guarantee
in their favour on  and  after  30.09.2010  without  any  fetters  on  their
rights.
27)   In the second  place,  learned  counsel  urged  that  the  respondents
(North Central Railway) had no right to take recourse to Clause 62  of   GCC
for  encashing  the  Bank  Guarantee  in  question  because   firstly,   the
arbitration  proceedings  which  arose  out  of   another   contract   dated
22.08.2005 were still pending for final adjudication of  the  liability,  if
any, and secondly, so long as the liability as to how much sum  was  payable
and if so by whom it was payable was not finally  determined  in  accordance
with law in the arbitration proceedings by the  arbitrators,  there  was  no
"sum due" and nor any "sum payable" in praesanti by  the  appellant  to  the
respondents and vice versa in connection with another contract.
28)   In the third  place,  learned  counsel  contended  that  the  District
Judge, in the first instance, having rightly granted the injunction  to  the
appellant vide order  dated  4.01.2012  and  no  appeal  having  been  filed
against this order by the respondents, the said order had become  final  and
was binding  on  the  parties.  It  was,  therefore,  urged  that  when  the
appellant moved the second application for grant  of  injunction  after  the
matter was referred to arbitration because of insistence on the part of  the
respondents to encash the bank guarantee, the  District  Judge  should  have
extended the life of first order dated 04.01.2012 instead  of   again  going
into the merits of the case.
29)   Lastly, learned counsel  urged  that  in  the  light  of   this  legal
position arising in the case, the appellant had made out a prima facie  case
for grant of injunction against  the  respondents  (North  Central  Railway)
from encashing the bank guarantee in question.
30)   In reply, learned counsel for the respondents (North Central  railway)
supported the impugned order and contended that  no  case  is  made  out  to
interfere in the impugned order and hence it be upheld.
31)   Having heard the learned counsel for the parties  and  on  perusal  of
the record of the case, we find force in  the  submissions  of  the  learned
senior counsel for the appellant.
32)   In our considered opinion, it may not be necessary for us to  go  into
more details of the issue because, in our view, the controversy involved  in
this case remains no more res integra and stands decided by  this  Court  in
the case of Union of India vs. Raman Iron Foundry, (1974) 2 SCC  231.  Since
the issue stands already decided by this Court and hence it is necessary  to
examine the facts of the case and law laid down therein in detail  and  then
apply the same to the facts of the case at hand.
33)   The facts of the case of   Union of India (DGS&D)  (supra)  were  that
the respondent (Raman Iron Foundry) entered into a contract with  the  Union
of India (DGS&D)-the appellant for  supply  of  certain  quantity  of  "Foam
compound".  The contract, apart from  several  other  conditions,  contained
two clauses, namely, Clauses 18 and 24.  Clause  24  provided  that  in  the
event of any dispute arising between the  parties  in  connection  with  the
contract, the same shall be decided by means of Arbitration. Clause 18  with
which we are concerned provided for "recovery of sums due”  which  reads  as
under :

 “18. Recovery of sums due — whenever any claim for the payment of a sum  of
money arises out of or  under  the  contract  against  the  contractor,  the
purchaser shall be entitled to recover such sum by  appropriating  in  whole
or in part, the security, if any, deposited by the contractor, and  for  the
purpose aforesaid, shall be  entitled  to  sell  and/or  realise  securities
forming the whole or part of any such security deposit. In the event of  the
security being insufficient, the balance and if no security has  been  taken
from the contractor, the  entire  sum  recoverable  shall  be  recovered  by
appropriating any sum then due or which at any time  thereafter  may  become
due to the contractor under the contract or  any  other  contract  with  the
purchaser  or  the  Government  or  any  person  contracting   through   the
Secretary, if such sum even be not  sufficient  to  cover  the  full  amount
recoverable, the contractor  shall  on  demand  pay  to  the  purchaser  the
balance remaining due.”

34)   The performance of the contract  ran  into  difficulties  and  dispute
arose between the parties giving rise to claims by  either  parties  against
the other. The respondent contended that the appellant  committed  a  breach
of the contract and was, therefore, liable to pay to the  respondent  a  sum
of  Rs. 2,35,800/- by way of damages suffered by the  respondent  by  reason
of the breach of the contract whereas the  appellant,  on  the  other  hand,
said that it was the respondent who committed the  breach  of  the  contract
and was, therefore, liable to pay to the appellant by way of damages  a  sum
of  Rs.  2,28,900/-.  In  the  meantime,  the  appellant  through  Assistant
Director of Supplies sent a  letter  to  the  respondent  calling  upon  the
respondent to make payment to them a sum of Rs.  2,28,900/-  and  threatened
that if the said amount is not paid,  it  will  be  recovered  from  several
respondents’ pending bills in respect of other contracts.
35)   The respondent, therefore, filed an application under  Section  20  of
the Indian Arbitration Act 1940 in Delhi High Court  against  the  appellant
for  filing  the  arbitration  agreement.  The  respondent  also   made   an
application  for  an  interim  injunction  restraining  the  appellant  from
recovering the amount of damages claimed by it from  several  pending  bills
of the  respondent.  The  learned  Single  Judge  dismissed  the  injunction
application on the ground that it could not be proved that  there  were  any
pending bills but at the  same  time  allowed  the  application  made  under
Section 20 of  the  Indian  Arbitration  Act  and  referred  the  matter  to
arbitration as per Clause 24 of
GCC. This is how the claim/counter claim of the parties became  the  subject
matter of the arbitration proceedings.
36)    Pending  arbitration  proceedings,  the  appellant  made  attempt  to
recover the said amount from the respondent and hence the  respondent  again
made another interlocutory application under Section  41  read  with  second
schedule to the Indian Arbitration Act, 1940 and prayed for  status  quo  in
the case. The appellant resisted the  application.  It  was  contended  that
Clause 18 empowers the appellant to make recovery of  any  amount  from  the
respondent. The learned Single Judge allowed the  respondent's  application.
He took the  view  that  Clause  18  did  not  authorize  the  appellant  to
appropriate the amounts of any  pending  bills  of  the  respondent  towards
satisfaction of its claim for damages against  the  respondent  unless  such
claim for damages was either admitted by the respondent or adjudicated  upon
by the arbitrator or suit in civil court. Accordingly,  the  injunction,  as
prayed for, was granted to the respondent against the appellant. It is  this
issue, which was carried by the Union of India to this Court.
37)   The questions, which fell for consideration before this Court, were  -
first, what is the true interpretation of Clause 18;   second  what  is  the
meaning of the words   "sum due" and “may become due” under the contract  or
any other contract  with  the  purchaser  occurring  in  Clause  18;  third,
whether Clause 18 empowered the Union of India to make  recovery  of  amount
claimed by it by way of damages (liquidated or unliquidated) for  breach  of
contract pending arbitration proceedings from  the  contractor  and  lastly,
whether in such case, contractor is entitled  to  claim  injunction  against
the Union of India from making recovery of such sum.
38)   Justice Bhagwati (as His Lordship then was)  speaking  for  the  Bench
examined the issue in great detail in the light of law laid down by  English
and Indian Courts. The learned Judge in his  distinctive  style  of  writing
after examining the entire case law on the subject held that  an  expression
"sum due" occurring in Clause 18 would mean a sum  for  which  there  is  an
existing obligation  to  pay  in  praesenti  or  in  other  words  which  is
presently payable and due and, therefore, recovery of only such sums can  be
made subject matter of Clause 18 which is presently  payable  and  due.   It
was held that a claim, which is neither due and nor payable, cannot be  made
subject matter of Clause 18. It was further held that  Clause  18  does  not
create a lien on other sums due to the contractor or give to  the  purchaser
a right to retain such sums  until  his  claim  against  the  contractor  is
satisfied. It was also held that a claim for damages for breach of  contract
is not a claim for a sum presently due and payable and the purchaser is  not
entitled in exercise of the right conferred  upon  it  under  Clause  18  to
recover the amount  of  such  claim  by  appropriating  other  sums  due  to
contractor.
39)   Their Lordships approved the view taken by Chagla C.J. in the case  of
Iron and Hardware (India) Co. vs. Firm Shamlal and Bros., AIR  1954  Bom.423
by observing in para 11 as under.

“11. ………………………………………………….The same view has also been taken  consistently  by
different High Courts in India. We may mention only a few of the  decisions,
namely, Jabed Sheikh v. Taher Mallik,AIR 1941 Cal 639  S.  Milkha  Singh  v.
N.K. Gopala Krishna Mudaliar, AIR  1956  Punj  174  and  Iron  and  Hardware
(India) Co. v. Firm Shamlal and Bros., AIR 1954 Bom  423.  Chagla,  C.J.  in
the last mentioned case, stated the law in these terms: (at pp. 425-26)

In my opinion it would not be true to  say  that  a  person  who  commits  a
breach of the contract incurs any pecuniary liability, nor would it be  true
to say that the other party to the contract who complains of the breach  has
any amount due to him from the other party.

As already stated, the only right which he has is  the  right  to  go  to  a
Court of law and recover damages. Now, damages are the compensation which  a
Court of law gives to a party for the injury which he  has  sustained.  But,
and this is most important to note, he does not get damages or  compensation
by reason of any existing obligation on the  part  of  the  person  who  has
committed the breach. He gets compensation as a result of the  fiat  of  the
Court.  Therefore,  no  pecuniary  liability  arises  till  the  Court   has
determined that the party complaining of the breach is entitled to  damages.
Therefore, when damages are assessed, it would not be true to say that  what
the Court is doing is  ascertaining  a  pecuniary  liability  which  already
existed. The Court in the first place must  decide  that  the  defendant  is
liable and then it proceeds to assess what that liability is. But till  that
determination there is no liability at all upon the defendant.

This statement in our view represents the correct  legal  position  and  has
our full concurrence. A  claim  for  damages  for  breach  of  contract  is,
therefore, not a  claim  for  a  sum  presently  due  and  payable  and  the
purchaser is not entitled, in exercise of the right conferred upon it  under
clause 18, to recover the amount of such claim by appropriating  other  sums
due to the contractor. On this view, it is not necessary for us to  consider
the other contention raised on behalf of the respondent, namely, that  on  a
proper construction of clause 18, the purchaser is entitled to exercise  the
right conferred under that clause only where the claim for payment of a  sum
of money is either admitted by  the  contractor,  or  in  case  of  dispute,
adjudicated upon by a  court  or  other  adjudicatory  authority.  We  must,
therefore, hold that the appellant had no right or  authority  under  clause
18 to appropriate the amounts of other pending bills of  the  respondent  in
or towards satisfaction of its claim for damages against the respondent  and
the  learned  Judge  was  justified  in  issuing   an   interim   injunction
restraining the appellant from doing so.
12. We accordingly dismiss the appeals. The appellant in  each  appeal  will
pay the costs of the respondent all throughout.”

40)   In our considered opinion, the case at hand being  somewhat  identical
to this case has to be decided keeping in view the law  laid  down  by  this
Court in the case of Union of India (DGS&D) (supra).
41)   Coming now to the facts of the case at hand, we find that wordings  of
Clause 62 of the contract  in  question  with  which  we  are  concerned  is
identical to that of Clause 18 of  Union of India (DGS&D)  (supra).   Clause
62 of GCC provides  for  determination  of  contract  owing  to  default  of
contractor.  The relevant portion of Clause 62 reads as under:
“The amounts thus to be forfeited or recovered may be  deducted  from    any
moneys then due or which at any  time  thereafter  may  become  due  to  the
Contractor by the Railway under this or any other contract or otherwise.”

42)   On  perusal  of  the  record  of  the  case,  we  find  that  firstly,
arbitration proceedings in relation to the  contract  dated  22.08.2005  are
still pending. Secondly,  the  sum  claimed  by  the  respondents  from  the
appellant does not relate to the contract for which the Bank  Guarantee  had
been furnished but it relates  to  another  contract  dated  22.08.2005  for
which no bank guarantee had been furnished. Thirdly, the sum claimed by  the
respondents from the appellant is in the nature of  damages,  which  is  not
yet adjudicated upon in arbitration proceedings. Fourthly, the  sum  claimed
is neither a sum due in praesenti nor a sum payable.  In  other  words,  the
sum claimed by the respondents is neither an admitted  sum  and  nor  a  sum
which stood adjudicated by any Court of law in any judicial proceedings  but
it is a disputed sum and lastly, the Bank Guarantee  in  question  being  in
the nature of a  performance  guarantee  furnished  for  execution  work  of
contract dated 14.07.2006 (Anand Vihar  works)  and  the  work  having  been
completed to the satisfaction of the  respondents,  they  had  no  right  to
encash the Bank Guarantee.
43)   We have, therefore, no hesitation in  holding  that  both  the  courts
below  erred  in  dismissing  the  appellant's  application  for  grant   of
injunction. We are indeed  constrained  to  observe  that  both  the  courts
committed jurisdictional error when they failed to  take  note  of  the  law
laid down by this Court in Union of India  (DGS&D)  (supra)  which  governed
the controversy and instead placed reliance on Himadri Chemicals  Industries
Ltd. vs. Coal Tar Refining Company, AIR 2007 SC 2798 and  U.P.  State  Sugar
Corporation vs. Sumac International Ltd., (1997) 1 SCC 568, which laid  down
general principle relating to Bank Guarantee.  There can be  no  quarrel  to
the proposition laid down in those cases.   However, every case  has  to  be
decided with reference to the facts of the case involved therein.  The  case
at hand was similar on facts with  that  of  the  case  of  Union  of  India
(DGS&D) (supra) and hence the law laid down in that case was  applicable  to
this case.   Even in this Court, both the learned counsel did not  bring  to
our notice the law laid down in Union of India (DGS&D) case  (supra).
44)   We are also of the view that the District  Judge  having  decided  the
injunction application in the first  instance  in  appellant's  favour  vide
order dated 04.01.2012 erred  in  rejecting  the  application  made  by  the
appellant second time vide order dated 12.07.2012.  It  is  not  in  dispute
that the respondents despite having  suffered  the  injunction  order  dated
04.01.2012 did not file any appeal  against  this  order.  Such  order  thus
attained finality and was, therefore, binding on the parties.
45)   In the light of foregoing discussion,  we  hold  that  the  appellants
have made out a prima facie case in their favour  for  grant  of  injunction
against the respondents so also they have made out  a  case  of  balance  of
convenience and irreparable loss in their favour as was held by  this  Court
in the case of  Union  of  India  (DGS&D)  (supra).   They  are,  therefore,
entitled  to  claim  injunction  against  the  respondent  in  relation   to
encashment of Bank Guarantee no. 12/2006 dated 04.08.2006.
46)   We, accordingly, allow the appeal, set aside the  impugned  order  and
in consequence allow the injunction application made by the appellant  under
Section 9 of the Act in Arbitration Suit no.  411/2011  in  District  Court,
Allahabad and grant injunction in  appellant's  favour  by  restraining  the
respondents jointly and severally from encashing Bank Guarantee no.  12/2006
dated 04.08.2006 furnished by the appellant in connection with  Anand  Vihar
Works. No costs.

.……...................................J.
                                     [J. CHELAMESWAR]


                     ………..................................J.
                                      [ABHAY MANOHAR SAPRE]
      New Delhi,
      May 05, 2016.

-----------------------
30


the appellant being the brother of the deceased was not entitled to claim compassionate appointment. His services were, therefore, terminated on this ground. whether correct ? = there was no justification on the part of the State to woke up after the lapse of 15 years and terminate the services of the appellant on such ground. In any case, we are of the view that whether it was a conscious decision of the State to give appointment to the appellant as we have held above or a case of mistake on the part of the State in giving appointment to the appellant which now as per the State was contrary to the policy as held by the learned Single Judge, the State by their own conduct having condoned their lapse due to passage of time of 15 years, it was too late on the part of the State to have raised such ground for cancelling the appellant’s appointment and terminating his services. It was more so because the appellant was not responsible for making any false declaration and nor he suppressed any material fact for securing the appointment. The State was, therefore, not entitled to take advantage of their own mistake if they felt it to be so. The position would have been different if the appellant had committed some kind of fraud or manipulation or suppression of material fact for securing the appointment. As mentioned above such was not the case of the State.



                                                                  Reportable
                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.4815 OF 2016
                    (ARISING OUT OF SLP(C) NO.11928/2015)


      Md. Zamil Ahmed                              Appellant(s)


                             VERSUS


      The State of Bihar & Ors.                    Respondent(s)



                               J U D G M E N T


Abhay Manohar Sapre, J.
1)    Leave granted.
2)    This appeal is filed  against  the  final  judgment  and  order  dated
20.12.2013 of the High Court of Judicature at Patna in  L.P.A.  No.  758  of
2013 whereby  the Division Bench of the  High  Court  dismissed  the  appeal
filed by the appellant herein against the  order  dated  08.11.2010  of  the
learned Single Judge of the High Court in  C.W.J.C.  No.  5713  of  2006  in
which it was held that the appellant being the brother of the  deceased  was
not  entitled  to  claim  compassionate  appointment.   His  services  were,
therefore, terminated on this ground.
3)    In order to appreciate the short issue involved in this appeal, it  is
necessary to state a few relevant facts:
4)    One Mohd. Rashid Alam, who was working  as  a  Constable  in  District
Police Force, was killed  while  on  security  duty.   He  left  behind  his
illiterate wife and four minor children.  Since there  was  no  one  in  the
family to support the widow  and  the  minor  children,  the  widow  of  the
deceased submitted a petition to the State (Police Department) enclosing  an
affidavit giving assurance by the appellant,  who  is  the  brother  of  the
deceased, that he would support the widow and  the  minor  children  of  the
deceased constable if  he  is  given  appointment.   Accordingly,  Memo  No.
1267/P-02 dated 29.02.1991 was issued by the Director General of  Police  to
appoint the appellant.  Vide D.O. No. 1248/91, the appellant  was  appointed
as constable w.e.f. 02.05.1991 after being declared  medically  fit  on  the
post of Constable in the scale of 950-20-1150-25-1400.
5)    Thereafter the appellant successfully completed his recruits  training
course and since then he had been performing satisfactory duties in  various
districts and also taking care of the illiterate widow and four children  of
the deceased constable. The appellant also, in  the  meantime,  got  married
two daughters of the deceased constable.
6)    After 15 years of service, on 04.06.2005,  the  appellant  received  a
show cause notice from the senior Superintendent of Police, Patna.   In  the
show cause notice,  it was stated that why the appellant’s services  be  not
terminated because  he  being  a  “devar  (brother  of  deceased)”  was  not
included in the definition of dependent of the deceased and  hence  was  not
eligible to claim compassionate appointment in the State services.
7)    On 10.06.2005, the appellant gave  his  explanation  and  stated  that
ever since his appointment in February 1991, he has been looking  after  the
widow and four children of the deceased constable. He  gave  them  education
and still maintaining the family of deceased as  Head  of  the  family.   He
also explained that his dismissal, after  15  years  of  satisfactory  duty,
would cause  undue  hardship  to  the  widow  and  family  of  the  deceased
constable because even as on today,  there  is  no  earning  member  in  the
family.
8)    The  senior  Superintendent  of  Police,  Patna  did  not  accept  the
explanation offered by the appellant and  terminated  the  services  of  the
appellant on 23.06.2005 holding his appointment on compassionate  ground  to
be illegal and against the policy.
9)    Aggrieved by the said order, the appellant filed an appeal before  the
Inspector General of Police on 01.08.2005.
10)   Since the appeal was not decided by the Inspector General  of  Police,
the appellant filed
petition being Writ Petition No. 5713 of 2006  before  the  High  Court  for
quashing the order of termination passed by  the  senior  Superintendent  of
Police, Patna with a further prayer to reinstate him with all  consequential
benefits  or in the alternative to direct  the  authorities  to  decide  the
appeal filed by him.  By order dated 08.11.2010, the  learned  Single  Judge
dismissed the petition.  It was held  that  it  was  a  case  of  a  mistake
committed by the authorities while giving such benefit to the appellant  and
hence this is a fit case for termination of appellant’s services.
11)   Being aggrieved by the aforesaid order, the appellant filed an  appeal
being L.P.A. No. 758 of 2013.   By  order  dated  20.12.2013,  the  Division
Bench upheld the order  of  the  learned  Single  Judge  and  dismissed  the
appeal.
12)   Against the said order, the appellant has filed this appeal by way  of
special leave before this Court.
13)   We heard the learned counsel for the parties.
14)   Keeping in view the peculiar undisputed facts of the case  and  having
regard to the totality of the circumstances, we are of the  considered  view
that the State was not justified in terminating  the  appellant's  services.
In  other  words,  the  ground  on  which  the  appellant's  services   were
terminated  by  the  State  after  a  period  of  15  years  of  appellant's
appointment does not appear  to  be  well  founded.  This  we  say  for  the
following reasons:
15)   Firstly, the appellant and  wife  of  the  deceased  at  the  time  of
seeking compassionate appointment did not conceal any  fact  and  nor  filed
any false or incorrect document/declaration. On  the  other  hand,  both  of
them disclosed their true family relations and conditions prevailing in  the
deceased family on affidavit.
16)    Secondly,  the  appellant,  who  is  the  brother  of  the  deceased,
undertook to maintain the family  of  the  deceased  in  the  event  of  his
securing the compassionate appointment and he  accordingly  also  gave  such
undertaking to the State.
17)   Thirdly,  there was no one in the family  of  the  deceased  to  claim
compassionate appointment except the appellant who, as mentioned above,  was
the close relative of the deceased, i.e., real younger brother and  used  to
live with the deceased. He was otherwise eligible to claim such  appointment
being major, educated and only male member in the family.
18)   Fourthly, the  appellant  after  securing  the  employment  throughout
maintained the family of the deceased in all  respects  for  the  last  more
than 15 years and he is continuing to do so.
19)   In the light of aforementioned reasons, which  rightly  persuaded  the
State to grant compassionate appointment to the appellant, we  do  not  find
any justification on the part of the State to dig out the  appellant's  case
after 15 years of his appointment and terminate his services on  the  ground
that as per the  State  policy,  the  appellant  did  not  fall  within  the
definition of the expression "dependent of deceased" to claim  compassionate
appointment.
20)   The fact that the appellant was younger brother of  the  deceased  was
within the knowledge of the State. Similarly, the State was aware  that  the
brother does not fall within the definition of  dependent  at  the  relevant
time and still the State  authorities  obtained  the  undertaking  from  the
appellant that he would maintain the family of the deceased once  given  the
appointment.
21)   In our considered view, the aforesaid facts would  clearly  show  that
it was a conscious decision taken by the State for giving an appointment  to
the appellant for the benefit of the family  members  of  the  deceased  who
were facing financial hardship due to sudden demise of their  bread  earner.
The appellant being the only close relative of the deceased could  be  given
the appointment in the circumstances prevailing in the family. In our  view,
it was a right decision taken by the State as a welfare state  to  help  the
family of the deceased at the time of need of the family.
22)   In these  circumstances,  we  are  of  the  view  that  there  was  no
justification on the part of the State to woke up  after  the  lapse  of  15
years and terminate the services of the appellant on  such  ground.  In  any
case, we are of the view that whether it was a  conscious  decision  of  the
State to give appointment to the appellant as we have held above or  a  case
of mistake on the part of the State in giving appointment to  the  appellant
which now as per the State was  contrary  to  the  policy  as  held  by  the
learned Single Judge, the State by their own conduct having  condoned  their
lapse due to passage of time of 15 years, it was too late  on  the  part  of
the State  to  have  raised  such  ground  for  cancelling  the  appellant’s
appointment and terminating  his  services.  It  was  more  so  because  the
appellant was not responsible for making any false declaration  and  nor  he
suppressed any material fact for securing the appointment.  The  State  was,
therefore, not entitled to take advantage of their own mistake if they  felt
it to be so. The position would have been different  if  the  appellant  had
committed some kind of fraud or  manipulation  or  suppression  of  material
fact for securing the appointment. As mentioned above such was not the  case
of the State.
23)   It is for this reason, we are of the view that action on the  part  of
welfare State in terminating the appellant's service on such  ground  cannot
be countenanced. We, therefore, disapprove the action taken by the State.
24)   In the light of foregoing discussion, we allow the appeal,  set  aside
the impugned orders and in consequence allow the writ petition filed by  the
appellant (writ petitioner) and  quash  the  appellant's  termination  order
dated 23.06.2005 (Annexure -P-4 of SLP).
25)    As  a  consequence  thereof,  the  respondent-State  is  directed  to
reinstate the appellant in service with all consequential benefits  such  as
payment  of  full  back  wages  payable  from  the   date   of   termination
(23.06.2005) till the date of reinstatement in  service.  The  appellant  is
also entitled to claim his seniority and notional promotions as  per  rules.
It be fixed accordingly.
26)   Let the appellant be reinstated in service within a month as an  outer
limit and the arrears of back wages, as directed, be paid to  the  appellant
within three months by the respondent-State.
27)   Cost of this appeal is quantified at Rs.5000/- and the  same  be  paid
to the appellant by the respondent-State along  with  the  arrears  of  back
wages.


.……...................................J.
                                     [J. CHELAMESWAR]


                     ………..................................J.
                                      [ABHAY MANOHAR SAPRE]
      New Delhi,
      May 05, 2016.
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