the landlord is the sole judge to decide as to how much space is needed for him/her to start or expand any of his/her activity.= the appellant's need for additional space for the expansion of clinic activities for her daughter cannot be said to be unjust or unreasonable in any manner. It is for the reasons that, firstly, the suit shop No.6 is adjacent to Shop No. 7 and secondly, the need for expansion of clinic could be accomplished effectively only with the use of two shops, which are adjacent to each other. It is a well settled principle laid down by this Court in rent matters that the landlord is the sole judge to decide as to how much space is needed for him/her to start or expand any of his/her activity. This principle was overlooked by the High Court while deciding the issue of need. That apart, the High Court should have also seen that the two courts below have recorded a finding that the respondent was having his own shops in the same area where he could shift his existing business activity without suffering any comparative hardship.- In view of foregoing discussion, we are unable to agree with the reasoning and the conclusion arrived at by the High Court. The impugned judgment is, therefore, not legally sustainable and is accordingly set aside. As a result, the order dated 04.03.1999 of Prescribed Authority in U.P.U.B. No. 13/1994 and order dated 24.08.2011 of the Additional District Judge, Aligarh in U.P.U.B. Appeal No. 7/99 are restored. The respondent is, however, granted three months’ time to vacate the suit shop from the date of this order subject to furnishing of the usual undertaking in this Court to vacate the suit premises within 3 months and further, the respondent would in addition to the directions given by the Prescribed Authority also deposit all arrears of rent till date at the same rate at which he had been paying monthly rent to the appellant (if there are arrears) and would also deposit three months’ rent in advance by way of damages for use and occupation as permitted by this Court. Let the undertaking, arrears of rent, damages for three months and compliance of direction to deposit damages by Prescribed Authority and the cost awarded by this Court be deposited within one month from the date of this order.

                                                                  REPORTABLE
                            IN THE SUPREME COURT OF INDIA

                             CIVIL APPELLATE JURISDICTION

                            CIVIL APPEAL No.  9727  OF 2016
                      (ARISING OUT OF SLP (C) No. 16643/2012)
Gulshera Khanam                   …….Appellant(s)


                             VERSUS


Aftab Ahmad                       ……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
17.01.2012 passed by the High Court of Judicature  at   Allahabad  in  Civil
Misc. Writ Petition No. 65612 of 2011  whereby the High  Court  allowed  the
writ petition filed by the respondent-tenant and set aside the  order  dated
04.03.1999 of the Prescribed Authority in U.P.U.B. Case No. 13 of  1994  and
order  dated  24.08.2011  of  the  Additional  District  Judge,  Aligarh  in
U.P.U.B. Appeal No. 07 of 1999.
3)    Facts of the case need mention, in  brief,  infra  to  appreciate  the
controversy involved in the appeal.
4)    The appellant is the landlady of the shop being Shop  No.  6  situated
on the Dodhpur Road, Aligarh, Building No. 4/569B.  The  respondent  is  the
tenant in Shop No. 6 and doing  business  of  selling  Footwear  (shoes  and
sandals) in the name of Khan Brothers on a monthly rent of Rs.100/-.
5)    There are in all 7 shops  in  the  building  in  which  suit  shop  in
situated. Except Shop No.7, all are occupied by different tenants. Shop  No.
7 is in occupation of the appellant wherein her daughter Dr. Naheed  Parveen
is doing medical practice.  Initially,  Shop  No.  7  was  occupied  by  the
husband of the appellant, Dr. Ahsan Ahmed, who was practicing  medicines  in
the said shop and after his death, the said shop remained closed  for  about
two-three years and after that her  daughter  started  practicing  medicines
there.
6)    According to the appellant, Shop No. 7 is about 16.9 ft.  x10  ft.  in
area and is inadequate for running clinic.
7)    On 11.02.1994, the appellant personally requested  the  respondent  to
vacate Shop No. 6 but he did not vacate. Therefore, the appellant  filed  an
application  under  Section  21(1)(a)  of  Uttar  Pradesh  Urban   Buildings
(Regulation of Letting, Rent and Eviction) Act, 1972  (hereinafter  referred
to as “the Act”) in the  Court  of  the  Prescribed  Authority/Civil  Judge,
Senior Division, Aligarh being U.P.U.B. Case No. 13 of 1994 seeking  release
of Shop No. 6 in her favour for her bona fide requirement and  genuine  need
in comparison to the need  of  the  respondent.  It  was  alleged  that  the
appellant’s daughter, who is a doctor and  running  her  private  clinic  in
Shop No. 7 is finding it difficult and inconvenient to run  the  clinic  due
to space constraint in Shop No. 7 and it is for  this  reason  she  requires
adjacent Shop No. 6 so that both Shops, i.e., 6 and  7  could  be  used  for
running the clinic in a comfortable manner. It was  also  alleged  that  the
appellant’s one son has done his MBBS and is doing M.D. He too would do  his
practice in the shop in question. It was alleged  that  there  would  be  no
space constraint once both the Shops (6&7)  are  clubbed  together.  It  was
further alleged that the appellant has no other shop available  except  Shop
No. 6 which is most suitable for expansion of clinic being next to Shop  No.
7. It was also alleged that the respondent is having his own  shops  in  the
same area and hence even if he vacates the shop in question, there  will  be
no hardship to him.
8)    The respondent filed his written statement to the application  denying
the need of the appellant-landlady as bona fide or genuine. Parties  adduced
evidence.
9)    By order  dated  04.03.1999,  the  Prescribed  Authority  allowed  the
application and  directed  the  respondent-tenant  to  vacate  the  shop  in
question within 3 months of the date of the order and  to  give  the  vacant
possession to the appellant-landlady and also pay  by  way  of  damages  two
years’ rent amount within 30 days from the date of the order.  It  was  held
that the appellant’s need for using Shop No. 6 is bona fide and genuine  and
that it is required for expansion of clinic run by the appellant’s  daughter
in Shop No. 7 and her son. It was held  that  the  appellant  has  no  other
suitable shop in city where her daughter/son can run their  clinic.  It  was
also held that the respondent has other shops for running  his  business  in
the same locality and, therefore, there would be no hardship caused  to  the
respondent.
10)   Felt aggrieved by the  said  order,  the  respondent-tenant  filed  an
appeal being U.P.U.B. Appeal No. 7 of 1999  under  Section  22  of  the  Act
before the Additional District Judge, Aligarh. By  order  dated  02.02.2000,
the appellate court allowed  the  appeal  and  set  aside  the  order  dated
04.03.1999 on the ground that the Presiding Officer has no  jurisdiction  to
pass the order.
11)   Against the  said  judgment/order  dated  02.02.2000,  the  appellant-
landlady filed C.M.W.P. No. 10669 of 2000 before the High  Court.  The  High
Court by order dated 18.02.2011 allowed  the  petition  and  set  aside  the
order dated 02.02.2000 and remanded the matter to the  appellate  Court  for
deciding the same on merits in accordance with law.
12)   Thereafter by order dated 24.08.2011, the  appellate  court  dismissed
the appeal (U.P.U.B. Appeal No. 7 of  1999)  of  the  respondent-tenant  and
confirmed the order dated 04.03.1999 passed by the Prescribed Authority.
13)   Feeling aggrieved by  the  said  order,  the  respondent-tenant  filed
C.M.W.P. No. 65612 of 2011 before the High Court.
14)   By impugned judgment dated 17.01.2012,  the  High  Court  allowed  the
writ petition and set aside the order dated  04.03.1999  of  the  Prescribed
Authority  and  order  dated  24.08.2011  dismissing  the  appeal   of   the
respondent-tenant.  The  High  Court  held  that  firstly,  the  appellant’s
daughter- Dr. Naheed Parveen is not a member  of  family  as  defined  under
Section 3(g) of the Act because she is a married  daughter  whereas  Section
3(g)(iii) include only an “unmarried daughter”. Secondly, it was  held  that
for this reason, the appellant could not seek eviction for the need  of  her
married daughter; and lastly, it was held that the appellant’s need  is  not
bona fide.
15)   Against the said  judgment,  the  appellant-landlady  has  filed  this
appeal by way of special leave before this Court.
16)   Heard Mr. Salman Khurshid, learned Senior Counsel, for  the  appellant
and Mr. V.K. Garg, learned senior counsel, for the respondent.
17)   Mr. Salman Khurshid, learned  counsel  for  the  appellant  (landlady)
while assailing the legality and correctness of  the  impugned  judgment  of
the High Court urged three submissions.
18)     His first submission was that  the  High  Court  erred  in  allowing
respondent's writ petition by setting  aside  the  order  of  the  appellate
court and the Prescribed Authority  and  thereby  erred  in  dismissing  the
appellant's eviction petition filed under Section 21 of the Act.
19)   His second submission was that the High Court erred  in  holding  that
the married daughter of landlady does not fall within the definition  of  an
expression "Family" as defined  in  Section  3  (g)  of  the  Act.   Learned
counsel urged that the High Court failed to notice that  the  definition  of
"family" is an inclusive definition and includes therein "any female  having
a legal right  of  residence  in  the  building  (tenanted  accommodation)".
Learned counsel pointed out that since it was  an  admitted  fact  that  the
appellant's husband (Muslim  by  religion)  died  intestate  leaving  behind
daughter-Dr. Naheed Parveen as one of his heirs, she inherited an  undivided
but specific ownership right and interest in the suit building  as  provided
in Mahomedan Law of inheritance. Learned counsel  contended  that  the  word
"female"  used  in  the  definition  of  family  would,  therefore,  include
"daughter" regardless of the fact as  to  whether  she  is  married  or  not
provided she is able to show that she has an interest in the  suit  building
which, in turn,  entitles  her  to  claim  a  right  of  residence  in  such
building. It was urged that  the  daughter  of  the  appellant  did  inherit
interest in the suit building as  one  of  the  co-owners  which,  in  turn,
entitles her to claim a right of residence in the suit  building  by  virtue
of she being a female.
20)   His third submission was that when two courts below, i.e.,  Prescribed
Authority  and  the  first  appellate  court  after  appreciating  oral  and
documentary evidence, held that the appellant's need was  genuine  and  bona
fide and that she has no other suitable shop of her own in  the  city  where
her daughter could  shift  her  clinic  and  lastly,  since  the  respondent
(tenant) is having his more than one alternative suitable shop near  to  the
suit shop, the appellant is entitled  to  claim  the  respondent’s  eviction
from the suit shop,  the  High  Court  while  hearing  writ  petition  under
Article 227 of the Constitution of India had no jurisdiction  to  upset  the
concurrent findings of fact. It was urged  that  these  concurrent  findings
were binding on the High Court. Learned counsel further urged  that  it  was
more so because the findings were neither perverse to  the  extent  that  no
average judicial person could  ever  reach  to  such  conclusion  nor  these
findings were against any provisions of law and  not  against  pleadings  or
evidence.
21)   In reply, learned counsel for the respondent  (tenant)  supported  the
reasoning and the conclusion arrived at by the High  Court  and  urged  that
the impugned judgment does not suffer from any error.
22)   Having heard the learned counsel for the parties  and  on  perusal  of
the record of the case, we find force in the submissions  urged  by  learned
counsel for the appellant.
23)   Two questions arises for consideration in this appeal, first,  whether
the High Court was justified in reversing the  concurrent  findings  of  the
two courts below and thereby was justified  in  dismissing  the  appellant's
eviction petition filed against the respondent under Section 21 of  the  Act
by holding that the  appellant's  need  set  up  in  the  petition  for  her
daughter was not bona  fide;  and  second,  whether  the  finding  that  the
appellant's married daughter does not fall within the meaning  of  the  word
"family" as defined under Section 3(g) of the Act and, therefore,  her  need
cannot be considered under Section 21 of the Act for  granting  eviction  of
the tenant is proper or not?
24)   Coming to the second  question  first,  in  our  opinion,  its  answer
depends upon the  proper  interpretation  of  the  definition  of  the  word
"family" as defined in Section 3(g) of the Act. It reads as under:
“3(g) “Family”, in relation to a landlord or tenant of  a  building,  means,
his or her-
(i)   spouse;
male lineal descendants;
such parents, grandparents and any  unmarried  or  widowed  or  divorced  or
judicially separated daughter or daughter of a male  lineal  descendant,  as
may have been normally residing with him or her,

and includes, in relation to a landlord, any female having a legal right  of
residence in that building;”

25)   Perusal of the afore-quoted definition would go to  show  that  family
in relation to landlord or tenant of a building  would  include  (1)  spouse
(2) male lineal descendants (3) such  parents,  grandparents,  unmarried  or
widowed or divorced or judicially separated daughter or daughter of  a  male
lineal  descendant  as  may  have  been  residing  with  the  landlord.  The
definition further says,  "Family” includes in  relation  to  landlord,  any
female having a legal right of residence in that building.
26)   The inclusive part of the definition, which is enacted  only  for  the
benefit of “female” in relation to the landlord, adds one more  category  of
person in addition to those specified in clauses (i) to (iii), namely,  “any
female having a legal right of residence in that building”.
27)    A fortiori, any female, if she is having a legal right  of  residence
in the building, is also included in the definition of “family” in  relation
to landlord regardless of the fact whether she is married or not.  In  other
words, in order to claim the benefit of expression "family", a  female  must
have a "legal right of residence" in the building. Such  female  would  then
be entitled to seek eviction of the tenant from such building for her need.
28)    Coming to the facts of this case, it  is  not  in  dispute  that  Dr.
Ahsan Ahmad was the original owner of the  building  in  question.  He  died
intestate and, therefore, on his death, the appellant,  two  sons  and  four
daughters inherited the estate left by Dr. Ahsan Ahmad, which  included  the
building, in question.
29)   Since Dr. Ahsan Ahmad was Mahomedan, his entire estate  including  the
building in question, devolved on the appellant (wife),  his  two  sons  and
four daughters as per the shares defined in Hanafi Law of  Inheritance.  The
shares of the heirs which are defined in the Table  in  Chapter  VII  titled
"Hanafi Law of Inheritance"  (at page 66-A of Mulla-Principles of  Mahomedan
Law-20th Edition) would show that daughter is also  entitled  to  claim  her
specific share in her father’s estate. The daughter’s share  is  defined  in
column Nos. 2, 3 and 4 at serial number 7, in the table. It reads as under:
|   (1)    |              (2)|        (3)   |        (4)    |
|Sharers   |Normal Share     |Conditions    |This column    |
|          |                 |under which   |sets out-      |
|          |                 |the normal    |(A) Shares of  |
|          |                 |share is      |Sharers Nos.   |
|          |                 |inherited     |3,4,5,8 and 12 |
|          |                 |              |as varied by   |
|          |                 |              |special        |
|          |                 |              |circumstances; |
|          |                 |              |(B) conditions |
|          |                 |              |under which    |
|          |                 |              |sharers Nos.   |
|          |                 |              |1,3,7,8,11 and |
|          |                 |              |12 succeed as  |
|          |                 |              |Residuaries    |
|          |       |         |              |               |
|          |Of one |Of two or|              |               |
|          |       |more     |              |               |
|          |       |collectiv|              |               |
|          |       |ely(b)   |              |               |
|7.        |1/2    |  2/3    |When no son   |[With the son  |
|Daughter  |       |         |              |she becomes a  |
|          |       |         |              |residuary: see |
|          |       |         |              |Tab. Of        |
|          |       |         |              |Res.,No.1]     |

30)   Dr. Naheed Parveen  being  the  daughter,  accordingly,  received  her
share and became co-owner of  the  building  along  with  other  co-sharers.
Being a co-owner, she got a legal right of  residence  in  the  building  as
provided under Section 3(g) of the Act.  In  this  way,  she  fulfilled  the
definition of “family” under Section 3 (g) of the Act.
31)   In the light of foregoing discussion, we are unable to agree with  the
reasoning of the High Court and  while  reversing  the  finding  answer  the
second  question  in  appellant's  favour  and  accordingly  hold  that  the
appellant was  entitled  to  claim  eviction  of  the  respondent  from  the
building in question for the need of her daughter Dr.   Naheed  Parveen  for
running her clinic as the daughter was having a legal right of residence  in
the building in question.
32)   This takes us to examine the first question as  to  whether  the  High
Court was justified in its  writ  jurisdiction  to  reverse  the  concurrent
findings of the two courts below and was, therefore,  justified  in  holding
that the appellant's (landlady) need for expansion  of  clinic  run  by  her
daughter was not bona fide.
33)   The Constitution Bench of this  Court  settled  the  law  relating  to
exercise of jurisdiction by the High Court while deciding revision  in  rent
matters under the Rent Control Act in Hindustan Petroleum  Corpn.  Ltd.  vs.
Dilbahar Singh, (2014) 9 SCC 78,  Justice  R.M.  Lodha,  the  learned  Chief
Justice  speaking for the Bench held in para 43 thus: (SCC pp. 101-102)

“43. We hold, as we must, that none of the above Rent Control Acts  entitles
the High Court to interfere with the findings of fact recorded by the  first
appellate court/first appellate authority because on reappreciation  of  the
evidence,  its  view  is  different  from  the  court/authority  below.  The
consideration  or  examination  of  the  evidence  by  the  High  Court   in
revisional jurisdiction under these  Acts  is  confined  to  find  out  that
finding of facts recorded by the court/authority below is according  to  law
and does not suffer from any error of law. A finding  of  fact  recorded  by
court/authority  below,  if  perverse  or  has  been  arrived   at   without
consideration of the material evidence  or  such  finding  is  based  on  no
evidence or misreading of the evidence or  is  grossly  erroneous  that,  if
allowed to stand, it would result in gross miscarriage of justice,  is  open
to correction because it is not treated as a finding according  to  law.  In
that event, the High Court in exercise of its revisional jurisdiction  under
the above Rent Control Acts shall be entitled  to  set  aside  the  impugned
order as being not legal or proper. The High Court is  entitled  to  satisfy
itself as to the correctness or legality or propriety  of  any  decision  or
order impugned before it as indicated above. However, to satisfy  itself  to
the regularity, correctness, legality or propriety of the impugned  decision
or the order, the High Court shall not exercise its power  as  an  appellate
power to reappreciate or reassess the evidence for  coming  to  a  different
finding on facts. Revisional power is not and cannot  be  equated  with  the
power of reconsideration of all questions  of  fact  as  a  court  of  first
appeal. Where the High Court is required to be satisfied that  the  decision
is according to law, it may examine whether the  order  impugned  before  it
suffers from procedural illegality or irregularity.”

34)   Coming now to the facts of this case, keeping in  view  the  principle
of law laid down in the aforementioned case and on perusal of the  order  of
the Prescribed Authority/Civil Judge and the first appellate court, we  find
that both the courts properly appreciated the facts and evidence adduced  by
the parties and on that basis  recorded  all  necessary  findings  (detailed
above) in favour of the appellant and granted  decree  of  eviction  against
the respondent. This the Prescribed  Authority/Civil  Judge  and  the  first
appellate court could do  in  their  respective  jurisdiction  and,  in  our
opinion, both the courts rightly did it in the facts of this case.
35)   Likewise, when we peruse the impugned judgment, we  find,  as  rightly
urged by the learned counsel for the appellant,   the  High  Court  did  not
keep in mind the aforesaid principle of law laid down  by  the  Constitution
Bench in Hindustan Petroleum Corpn. Ltd. (supra) so also the principle  laid
down by this Court in relation to exercise  of  jurisdiction  under  Article
227 of Constitution of India in the case of Surya Dev Rai  vs.  Ram  Chander
Rai & Ors., (2003) 6 SCC 675 while deciding the writ petition and  proceeded
to decide like the first appellate court. The High Court as  is  clear  from
the judgment probed all factual aspects of the  case,  appreciated  evidence
and then reversed the factual  findings  of  the  appellate  court  and  the
Prescribed Authority. This, in our view, was a jurisdictional  error,  which
the High Court committed while deciding the writ petition. In  other  words,
the High Court, in our view, should have confined its inquiry to examine  as
to whether any jurisdictional error was committed  by  the  first  appellate
court while deciding the first appeal. It was, however, not done.
36)   In our considered opinion, the question in relation to the  bona  fide
need of the appellant's daughter to expand the  activities  of  running  the
clinic was rightly held by the Prescribed Authority and the first  appellate
Court in appellant’s favour by holding the appellant’s need to be bona  fide
and genuine. We find no ground on which the High Court could have upset  the
concurrent finding on this question in its writ jurisdiction  under  Article
227, which is more or less akin  to  revisional  jurisdiction  of  the  High
Court. The High Court also failed to hold that finding  of  the  two  courts
were so  perverse to the extent that any judicial person  could  ever  reach
to such conclusion or that the findings were against any  provision  of  law
or were contrary to evidence adduced etc.
37)   The High Court, in our view, should have seen, as was rightly held  by
the two courts below, that the appellant's daughter  had  been  running  her
medical clinic in shop No. 7 for quite some  time.  This  fact  was  not  in
dispute. Though a feeble attempt was made by the respondent contending  that
after appellant's daughter's marriage, she has started living  in  Moradabad
and, therefore, her need to run the clinic and expand its  activity  is  not
bona fide but this plea did not find favour with  Prescribed  Authority  and
the first appellate Court and, in our view, this being  a  pure  finding  of
fact, was binding on the High Court in its writ jurisdiction.
38)   In our considered opinion, the appellant's need for  additional  space
for the expansion of clinic activities for her daughter cannot  be  said  to
be unjust or unreasonable in  any  manner.  It  is  for  the  reasons  that,
firstly, the suit shop No.6 is adjacent to Shop  No.  7  and  secondly,  the
need for expansion of clinic could be  accomplished  effectively  only  with
the use of two shops, which are  adjacent  to  each  other.  It  is  a  well
settled principle laid down by this Court in rent matters that the  landlord
is the sole judge to decide as to how much space is needed  for  him/her  to
start or expand any of his/her activity. This principle  was  overlooked  by
the High Court while deciding the issue of need. That apart, the High  Court
should have also seen that the two courts  below  have  recorded  a  finding
that the respondent was having his own shops  in  the  same  area  where  he
could  shift  his  existing  business   activity   without   suffering   any
comparative hardship.
39)   In the light of aforementioned factual findings of the  courts  below,
in our view, there was no justification on the part of  the  High  Court  to
have  probed  into  any  factual  issues  again  in  depth  by   undertaking
appreciation of evidence like a  first  appellate  court  and  reversed  the
findings.
40)   In view of foregoing discussion, we  are  unable  to  agree  with  the
reasoning and the conclusion arrived at by  the  High  Court.  The  impugned
judgment is, therefore, not  legally  sustainable  and  is  accordingly  set
aside. As a result, the order dated 04.03.1999 of  Prescribed  Authority  in
U.P.U.B. No. 13/1994 and order dated 24.08.2011 of the  Additional  District
Judge, Aligarh in U.P.U.B. Appeal No. 7/99  are  restored.   The  respondent
is, however, granted three months’ time to vacate the  suit  shop  from  the
date of this order subject to furnishing of the usual  undertaking  in  this
Court to  vacate  the  suit  premises  within  3  months  and  further,  the
respondent would in addition to  the  directions  given  by  the  Prescribed
Authority also deposit all arrears of rent till date at  the  same  rate  at
which he had been paying  monthly  rent  to  the  appellant  (if  there  are
arrears) and would also deposit three months’ rent  in  advance  by  way  of
damages for  use  and  occupation  as  permitted  by  this  Court.  Let  the
undertaking, arrears of rent, damages for three  months  and  compliance  of
direction to deposit damages by Prescribed Authority and  the  cost  awarded
by this Court be deposited within one month from the date of this order.
41)   The appeal is accordingly allowed with cost, which  is  quantified  at
Rs.10000/-, to be paid by the respondent to the appellant.

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


                  …...……..................................J.
                               [ABHAY MANOHAR SAPRE]     New Delhi;
September 27, 2016

-----------------------
25

Section 102 of the Code of Civil Procedure, 1908, reads as under : “102. No second appeal in certain cases. - No second appeal shall lie from any decree, when the subject matter of the original suit is for recovery of money not exceeding twenty-five thousand rupees”. 13. In the instant case, the suit was not only for recovery of money, but it was for a declaration and permanent injunction. Moreover, the issue with regard to location of the properties in question had to be decided. It was to be ascertained whether the properties were situated within the municipal limits of the Nagar Palika and if so, whether the appellant was entitled to levy tax thereon under the provisions of the Act. If the properties were not within the municipal limits of the appellant Nagar Palika, the appellant could have been permanently restrained from recovering any tax under the Act in respect of the properties in question. Thus, several other issues were also to be decided in the said suit. It is also pertinent to note that the maintainability of the suit was also challenged by the appellant in view of the provisions of the Act. 14. The purpose behind enactment of Section 102 of the CPC is to reduce the quantum of litigation so that courts may not have to waste time where the stakes are very meagre and not of much consequence. In the instant case, though apparently the amount which was sought to be recovered was Rs.11,006.07, looking at the prayer made in the plaint, the consequences of the final outcome of the litigation would be far-reaching. 15. So as to avail advantage of the provisions of Section 102 of the CPC, the subject matter of the original suit should be only recovery of money and that too, not exceeding Rs.25,000/-. If the subject matter of the suit is anything other than recovery of money or something more than recovery of money, provisions of Section 102 of the CPC cannot be invoked. 16. In the instant case, the original suit was not only for recovery of money, but was also for a declaration and permanent injunction. In view of the aforestated fact, the provisions of Section 102 of the CPC could not have been applied. 17. In the circumstances, we set aside the impugned judgment and remit the matter to the High Court so that the Second Appeal can be decided afresh after hearing the parties concerned. 18. As the suit was filed in the year 1994 and possibly no tax might have been recovered by the appellant till now, we feel that the second appeal should be decided at an early date. The parties to the litigation shall appear before the High Court on 17.10.2016 and the High Court is requested to fix the date for final hearing of the second appeal so that the appeal can be finally decided preferably within six months from the date of receipt of a copy of this judgment by the High Court.

                                                                  REPORTABLE



                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.9822 OF 2016
               (Arising out of  S. L. P. (C) No.16318 of 2012)


NAGARPALIKA THAKURDWARA            … APPELLANT


VERSUS



KHALIL AHMED & ORS.                     … RESPONDENTS



                               J U D G M E N T



ANIL R. DAVE, J.



1.    Leave granted.

2.    Being aggrieved by the Judgment dated 21.9.2011 delivered by the  High
Court of Judicature at Allahabad  in  Second  Appeal  No.781  of  2011,  the
appellant Nagar Palika has approached this Court by way of this appeal.

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

      The respondents, who  claim  to  be  residing  outside  the  municipal
limits of Nagar Palika Thakurdwara, District Moradabad, filed a  Civil  Suit
being OS No.13 of 1994 against the appellant in the  court  of  Civil  Judge
(Junior Division), Thakurdwara, praying for the following reliefs :

“(a)   That  the  defendant  no.1  be  restrained  by  decree  of  permanent
injunction that they remain restrained from recovery of  alleged  house  tax
of Rs.6760/- regarding crusher in  question,  present  building  no.319  and
calendaring factory building no.320 and shops in question,  building  no.321
to 332 respectively  which  are  outside  the  limits  of  municipality  and
situated in village Fatehullah Ganj in property  owned  by  Plaintiff  nos.2
and 3 situated in village Fatehullah Ganj and from recovery  of  Rs.4,246.07
amount described in the recovery certificate or more by itself or its  agent
defendant no.2 or by any other medium or be  restrained  from  imposing  any
house tax till the pronouncement of the properties in question to be  within
the limits of municipality by the Government in either years.

(b)   That the defendant no.1 be ordered to give the  cost  of  the  present
suit to the plaintiff(s).

(c)   That the relief which is fit in the opinion of the  Hon’ble  Court  in
favour of the plaintiff(s) be granted.”

      Thus, the case of the respondents was that  their  premises  were  not
within the municipal limits of the appellant  Nagar  Palika  and  therefore,
the Nagar Palika had no right to levy any tax on the said properties of  the
respondents and therefore, the appellant be restrained from  recovering  tax
in respect of the said properties from  the  respondents.   The  respondents
had also impliedly prayed for a declaration to the  effect  that  they  were
not liable  to  pay  any  tax  to  the  appellant  Nagar  Palika  under  the
provisions of  the  Uttar  Pradesh  Municipalities  Act,  1916  (hereinafter
referred to as ‘the Act’).

4.    Written  Statement  was  filed  by  the  appellant  stating  that  the
premises of the respondents were very much within the  municipal  limits  of
the Nagar Palika and the said fact was also  known  to  the  respondents  as
respondent no.1 had also contested an election for being a President of  the
appellant Nagar Palika.  Moreover, it was also the  case  of  the  appellant
that the suit was not maintainable in view of  the  provisions  of  Sections
143 and 160 of the Act.

5.    The said suit was dismissed and therefore, the  respondents  preferred
first appeal, being  Civil  Appeal  No.30  of  2008,  before  the  Court  of
Additional District Judge, Moradabad, which was allowed by a judgment  dated
19.7.2011.

6.    Being  aggrieved  by  the  aforesaid  judgment  dated  19.7.2011,  the
appellant filed Second Appeal No.781 of 2011, which has  been  dismissed  by
the High Court by virtue of impugned judgment  and  therefore,  this  appeal
has been filed by the appellant.

7.    The short reason for which the appeal filed by the appellant has  been
dismissed by the High Court is that the claim in the second appeal was  less
than Rs.25,000/- and by virtue of the provisions of Section 102 of the  Code
of Civil Procedure, 1908, no second appeal would lie from  any  decree  when
the subject matter of the  original  suit  is  for  recovery  of  money  not
exceeding Rs.25,000/-.

8.    The learned counsel appearing for the  appellant  submitted  that  the
High Court committed an error by not considering the fact that the suit  had
been filed seeking permanent injunction, praying that  the  appellant  Nagar
Palika should be restrained from recovering any tax under the Act  from  the
respondents as the properties belonging to  the  respondents  were  situated
beyond the municipal limits of the appellant Nagar Palika.

9.    The learned  counsel  further  submitted  that  the  High  Court  only
considered the amount of tax which was payable at the relevant  time,  which
was only Rs.11,006.07, but ignored the fact that the suit  was  also  for  a
declaration to the effect that the properties of the  respondents  were  not
within the municipal limits of the Nagar Palika and therefore, no tax  could
have been levied thereon by the appellant.  Thus, the suit was not only  for
recovery of money, but was also for a declaration and permanent  injunction.
 Moreover, it was also submitted that the suit itself was  not  maintainable
in view of the provisions of Sections 140 and 163 of the Act and  therefore,
the appeal could not have been allowed by the first appellate court.

10.   On the other hand, the learned counsel appearing for  the  respondents
submitted that the impugned judgment is  just,  legal  and  proper  for  the
reason that by virtue of the second  appeal  filed  by  the  appellant,  the
appellant wanted to recover only a sum of Rs.11,006.07 by way  of  tax  from
the respondents.  The learned counsel, therefore, submitted that the  second
appeal deserved to be dismissed.

11.   Upon hearing the learned counsel and looking at the facts of the  case
and in the light of the legal provisions, we are of the view that  the  High
Court ought not to have dismissed the second appeal.

12.   Section 102 of the Code of Civil Procedure, 1908, reads as under :

“102. No second appeal in certain cases. - No second appeal shall  lie  from
any decree, when the subject matter of the original suit is for recovery  of
money not exceeding twenty-five thousand rupees”.


13.   In the instant case, the suit was not only for recovery of money,  but
it was for a declaration and  permanent  injunction.   Moreover,  the  issue
with regard to location of the properties in question  had  to  be  decided.
It was to be ascertained whether the properties  were  situated  within  the
municipal limits of the Nagar Palika and if so, whether  the  appellant  was
entitled to levy tax thereon under  the  provisions  of  the  Act.   If  the
properties were not within the  municipal  limits  of  the  appellant  Nagar
Palika,  the  appellant  could  have  been   permanently   restrained   from
recovering any tax under the Act in respect of the properties  in  question.
Thus, several other issues were also to be decided in the said suit.  It  is
also pertinent to note  that  the  maintainability  of  the  suit  was  also
challenged by the appellant in view of the provisions of the Act.

14.   The purpose behind enactment of Section 102 of the CPC  is  to  reduce
the quantum of litigation so that courts may not have to  waste  time  where
the stakes are very meagre and not of  much  consequence.   In  the  instant
case, though apparently the amount which was  sought  to  be  recovered  was
Rs.11,006.07, looking at the prayer made in the plaint, the consequences  of
the final outcome of the litigation would be  far-reaching.

15.   So as to avail advantage of the provisions of Section 102 of the  CPC,
the subject matter of the original suit should be  only  recovery  of  money
and that too, not exceeding Rs.25,000/-.  If the subject matter of the  suit
is anything other than recovery of money or something more than recovery  of
money, provisions of Section 102 of the CPC cannot be invoked.

16.   In the instant case, the original suit was not only  for  recovery  of
money, but was also for a declaration and permanent injunction.  In view  of
the aforestated fact, the provisions of Section 102 of  the  CPC  could  not
have been applied.

17.   In the circumstances, we set aside the  impugned  judgment  and  remit
the matter to the High Court so  that  the  Second  Appeal  can  be  decided
afresh after hearing the parties concerned.

18.   As the suit was filed in the year 1994 and possibly no tax might  have
been recovered by the appellant till now, we feel  that  the  second  appeal
should be decided at an early date.  The parties  to  the  litigation  shall
appear before the High Court on 17.10.2016 and the High Court  is  requested
to fix the date for final hearing of the second appeal so  that  the  appeal
can be finally decided  preferably  within  six  months  from  the  date  of
receipt of a copy of this judgment by the High Court.

19.   The appeal is, accordingly, disposed of as allowed with no order as
to costs.



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



                                                             ……………………………..J.
                               (L. NAGESWARA RAO)
NEW DELHI
SEPTEMBER  28, 2016.

family pension does not form part of the estate of the deceased and therefore, even an employee has no right to dispose of the same in his Will = the pension is to be given under the provisions of the Scheme and therefore, only the person who is entitled to get the pension as per the Scheme would get it. Similar issue had arisen before this Court in the case of Violet Issaac (Smt.) v. Union of India (1991) 1 SCC 725 and after considering the relevant provisions, this Court came to the conclusion that family pension does not form part of the estate of the deceased and therefore, even an employee has no right to dispose of the same in his Will by giving a direction that someone other than the one who is entitled to it, should be given the same. In the instant case, as per the provisions of the Scheme, the appellant widow is the only family member who is entitled to the pension and therefore, the respondent mother would not get any right in the pension. Of course, it cannot be disputed that if there are other assets left by late Shri Yash Pal, the respondent mother would get 50% share, if late Shri Yash Pal had not prepared any Will and it appears that late Shri Yash Pal had died intestate and no Will had been executed by him. For the aforestated reasons, in our opinion, the High Court committed an error by giving a direction that the respondent mother should also get 50% share in the pension. In view of the aforestated legal position, the entire pension would be payable to the appellant widow. 20. In the circumstances, the impugned order is set aside and it is directed that the pension shall be paid only to the appellant widow and not to the respondent mother.

                                                              NON-REPORTABLE



                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.9823 OF 2016
               (Arising out of  S. L. P. (C) No.21187 of 2015)


NITU                                    … APPELLANT


VERSUS



SHEELA RANI & ORS.                      … RESPONDENTS



                               J U D G M E N T



ANIL R. DAVE, J.



1.    Leave granted.

2.    The learned counsel appearing for the respondents  waived  service  of
notice and at the request of the learned counsel, the appeal  was  heard  on
the same day.

3.    Being aggrieved by an Order dated 21st April, 2015 passed by the  High
Court of Punjab & Haryana at Chandigarh in C.R. No.6012 of 2014,  the  widow
of a government employee has approached this Court  with  a  grievance  that
she is not being paid full pension in accordance with the provisions of  the
Family Pension Scheme, 1964 (hereinafter referred to  as  ‘the  Scheme’)  of
the Government of Punjab.

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

      Shri Yashpal, the husband of the appellant, was serving as a  Computer
DOD in the  office  of  the  District  Malaria  Officer  under  the  Haryana
Government.  Upon his death, family pension payable to the  widow  had  been
determined at  Rs.2,153/-  per  month.   Respondent  No.1,  who  is  a  real
contesting respondent, is the mother of late Shri Yash Pal, who  filed  Suit
No.30/SC of 2005 in the Court of Civil Judge (Senior Division),  Rohtak  for
getting a succession certificate so that she can get the pension, which  was
payable in respect of the services rendered by late Shri  Yash  Pal  to  the
Government of Haryana.  In the said suit, the appellant appeared and made  a
claim that she, being the widow of late  Shri  Yash  Pal,  was  entitled  to
pension, whereas sister of late Shri Yash Pal, who was also a respondent  in
the said suit filed a written statement stating that she  had  no  objection
if succession certificate was issued in favour of respondent no.1.

5.    After hearing the parties concerned, the learned Civil  Judge  (Senior
Division), Rohtak dismissed the suit by coming  to  a  conclusion  that  the
mother, who was the plaintiff in the said case and the sister of  late  Shri
Yash Pal were not entitled to  succession  certificate  and  held  that  the
present appellant, who was respondent No.3  in  the  said  suit,  being  the
widow of the deceased, was entitled to  succession  certificate  so  far  as
pension payable in respect of the services rendered by late  Shri  Yash  Pal
was concerned.  The said judgment was delivered on 25th April, 2013.

6.    Being aggrieved by the aforestated judgment,  Civil  Appeal  No.88  of
2013 was filed by Respondent No.1 i.e. the mother of late Shri Yash  Pal  in
the Court of  Additional  District  Judge,  Rohtak.   The  said  appeal  was
dismissed by the judgment and order dated 2nd July, 2014.

7.    Being aggrieved by the  judgment  delivered  by  the  first  appellate
Court, the respondent mother filed Civil Revision,  being  C.R.  No.6012  of
2014, before the High Court of Punjab and Haryana at Chandigarh.

8.    After hearing the parties concerned, the High Court allowed  the  said
Revision Petition by observing that the respondent mother  was  entitled  to
the succession certificate in view of the provisions of  Section  8  of  the
Hindu Succession Act as she was also one of the  heirs  of  late  Shri  Yash
Pal.

9.    Being aggrieved by the aforestated order passed  by  the  High  Court,
the present appeal has been filed by the appellant  –  widow  of  late  Shri
Yash Pal.

10.   The learned counsel appearing for the  appellant  submitted  that  the
appellant is the only person who is entitled  to  the  pension  as  per  the
provisions of the Scheme.  The learned counsel  submitted  that  pension  is
paid in pursuance of the aforestated Scheme and  therefore,  pension  cannot
be treated as other assets of the deceased and according to  the  provisions
of the Scheme, only the appellant  is  entitled  to  the  pension.   In  the
circumstances,  according  to  the  learned  counsel,  the  High  Court  has
committed an error by observing that all legal heirs have  a  share  in  the
pension payable in respect of the services rendered by late Shri Yash Pal.

11.   The learned counsel relied upon the provisions  of  the  Scheme  which
provide that only the widow is entitled to the pension and  none  else.   He
referred to the provisions of the Scheme and  submitted  that  the  impugned
order passed by the High Court deserves to be quashed and set  aside  as  it
is not in consonance with the provisions of the Scheme.

12.   On the other hand, the learned counsel appearing  for  the  respondent
mother submitted that she being a class-I heir of a Hindu and as  late  Shri
Yash  Pal  died  intestate,  she  is  entitled  to  one-half  share  of  the
properties of late Shri Yash Pal, as he was survived by his  widow  and  the
mother.  The learned counsel, therefore, submitted that the  impugned  order
passed by the High Court is just and proper.

13.   The learned counsel appearing for the State supported the case of  the
appellant and submitted that in the  Scheme,  the  term  “family”  has  been
defined and in the instant case, the widow  of  the  deceased  is  the  only
person who  is  entitled  to  pension  and  therefore,  the  impugned  order
deserves to be quashed and set aside so that the entire  amount  of  pension
can be paid to the appellant.

14.   We have heard the learned counsel appearing for the parties  and  have
also perused the provisions of the Scheme.

15.   Let us look at the provisions of the Scheme,  in  pursuance  of  which
the pension is to be paid in respect of services rendered by late Shri  Yash
Pal.  Clause 4(ii) of the Scheme defines the term “family”, which  reads  as
under :-

4(ii).      “Family” for the purpose of this scheme includes  the  following
relatives of the officer:-

wife, in the case of a male officer;

husband, in the case of a female officer;

minor sons;

unmarried minor daughters;

widowed/legally divorced daughters; and

the parents of an unmarried officer.”



16.   So far as the  respondent  mother  is  concerned,  she  has  not  been
included in the definition of the term “family” for the reason that  as  per
the provisions of sub-clause (f), parents of an unmarried officer  would  be
a part of the family and therefore,  the  respondent  mother  would  not  be
included in the family of late Shri Yash Pal as he was married.

17.   So far as the provisions  of  the  Hindu  Succession  Act,  1956,  are
concerned, it is true that the properties of a  Hindu,  who  dies  intestate
would first of all go to the persons enumerated in class I of  the  schedule
as per the provisions of Section 8 of the said Act and therefore, so far  as
the properties of late Shri Yash Pal are concerned, they  would  be  divided
among the respondent mother and the appellant wife,  provided  there  is  no
other family member of late Shri Yash  Pal  alive,  who  would  fall  within
class 1 heirs, but position  in  this  case,  with  regard  to  pension,  is
different.

18.   It is pertinent to note that in this case the pension is to  be  given
under the provisions of the Scheme and therefore, only  the  person  who  is
entitled to get the pension as per the Scheme would get it.   Similar  issue
had arisen before this Court in the case of Violet Issaac  (Smt.)  v.  Union
of India (1991) 1 SCC 725 and after  considering  the  relevant  provisions,
this Court came to the conclusion that family pension does not form part  of
the estate of the deceased and therefore, even an employee has no  right  to
dispose of the same in his Will by giving a  direction  that  someone  other
than the one who is entitled to it,  should  be  given  the  same.   In  the
instant case, as per the provisions of the Scheme, the  appellant  widow  is
the only family member who is entitled to the  pension  and  therefore,  the
respondent mother would not get any right in the  pension.   Of  course,  it
cannot be disputed that if there are other assets left  by  late  Shri  Yash
Pal, the respondent mother would get 50% share, if late Shri  Yash  Pal  had
not prepared any Will and it appears  that  late  Shri  Yash  Pal  had  died
intestate  and no Will had been executed by him.

19.   For the aforestated reasons, in our opinion, the High Court  committed
an error by giving a direction that the respondent mother  should  also  get
50% share in the pension.  In view of the aforestated  legal  position,  the
entire pension would be payable to the appellant widow.

20.   In the circumstances, the impugned  order  is  set  aside  and  it  is
directed that the pension shall be paid only to the appellant widow and  not
to the respondent mother.

21.   The appeal stands disposed of as allowed with no order as to costs.



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


                                                             ……………………………..J.
                               (L. NAGESWARA RAO)
NEW DELHI
SEPTEMBER 28, 2016.

Whether the High Court is justified in exercising its discretionary jurisdiction under Article 226 of the Constitution of India for restraining the appellant from invoking an unconditional bank guarantee executed by the first respondent,= In Himadri Chemicals Industries Limited v. Coal Tar Refining Company[2], at paragraph -14: “14. From the discussions made hereinabove relating to the principles for grant or refusal to grant of injunction to restrain enforcement of a bank guarantee or a letter of credit, we find that the following principles should be noted in the matter of injunction to restrain the encashment of a bank guarantee or a letter of credit: (i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional bank guarantee or letter of credit is given or accepted, the beneficiary is entitled to realise such a bank guarantee or a letter of credit in terms thereof irrespective of any pending disputes relating to the terms of the contract. (ii) The bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. (iii) The courts should be slow in granting an order of injunction to restrain the realisation of a bank guarantee or a letter of credit. (iv) Since a bank guarantee or a letter of credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of bank guarantees or letters of credit. (v) Fraud of an egregious nature which would vitiate the very foundation of such a bank guarantee or letter of credit and the beneficiary seeks to take advantage of the situation. (vi) Allowing encashment of an unconditional bank guarantee or a letter of credit would result in irretrievable harm or injustice to one of the parties concerned.” Guarantee given by the bank to the appellant contains only the condition that in case of breach by the lead promoter, viz., the first respondent of the conditions of LoI, the appellant is free to invoke the bank guarantee and the bank should honour it … “without any demur, merely on a demand from GMB (appellant) stating that the said lead promoter failed to perform the covenants…”. It has also been undertaken by the bank that such written demand from the appellant on the bank shall be … “conclusive, absolute and unequivocal as regards the amount due and payable by the bank under this guarantee”. Between the appellant and the first respondent, in the event of failure to perform the obligations under the LoI dated 06.02.2008, the appellant was entitled to cancel the LoI and invoke the bank guarantee. On being satisfied that the first respondent has failed to perform its obligations as covenanted, the appellant cancelled the LoI and resultantly invoked the bank guarantee. Whether the cancellation is legal and proper, and whether on such cancellation, the bank guarantee could have been invoked on the extreme situation of the first respondent justifying its inability to perform its obligations under the LoI, etc., are not within the purview of an inquiry under Article 226 of the Constitution of India. Between the bank and the appellant, the moment there is a written demand for invoking the bank guarantee pursuant to breach of the covenants between the appellant and the first respondent, as satisfied by the appellant, the bank is bound to honour the payment under the guarantee. Therefore, the appeal is allowed and the impugned judgment is set aside. However, we make it clear that this judgment will not stand in the way of the first respondent working out its grievances in appropriate proceedings as permitted under law.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION





                       CIVIL APPEAL NO.  9821  OF 2016
                 (Arising out of S.L.P.(C) No. 7874 of 2016)




GUJARAT MARITIME BOARD               ...  APPELLANT (S)

                                   VERSUS

L&T INFRASTRUCTURE DEVELOPMENT
PROJECTS LTD. AND ANOTHER                    ... RESPONDENT (S)




                           J  U  D  G  M  E  N  T



KURIAN, J.:



    Leave granted.

Whether  the  High  Court  is  justified  in  exercising  its  discretionary
jurisdiction under Article 226 of the Constitution of India for  restraining
the appellant from invoking an unconditional bank guarantee executed by  the
first respondent, is the main issue arising for consideration in this case.
The appellant invited  bids  for  development  of  Sutrapada  Port.  In  the
process, a Letter of Intent (hereinafter referred to as  ‘LoI’)  was  issued
to the first respondent on 06.02.2008. The relevant conditions  of  LoI  are
extracted below:


1.7   The Lead Promoter shall submit a detailed  project  report  within  12
months of issue of this Letter of Intent (LOI) and  present  it  to  Gujarat
Maritime Board for their approval.

1.8   The Lead Promoter shall obtain all environment clearances and  coastal
regulation zone (CRZ) clearances and effective  financial  closure  and  all
such other clearances and permissions within 18  months  or  issue  of  this
Letter of Intent

1.9   A Performance Guarantee/Bank Guarantee of Rs  5  Crores  (Rupees  Five
crores only) shall be submitted to Gujarat Maritime Board within 4 weeks  of
issue  of  this  Letter  of  Intent  in  the  Performa   annexed   herewith.
(Annexure1). This performance/bank guarantee is against  the  submission  of
Detailed  Project  Report  within  12  months  and   obtaining   environment
clearance,  coastal  regulation  zone  clearance  and  effecting   financial
closure within 18 months as mentioned in para 1.7  and  1.8  above,  failing
which Gujarat Maritime Board/Government shall cancel this Letter  of  Intent
and bank guarantee shall be forfeited.”

On 07.05.2010, the first respondent requested for change  of  location  from
Sutrapada to Kachchigarh  and  the  bank  guarantee  was  extended.  At  the
instance of the first respondent, the Yes  Bank  Limited  furnished  a  bank
guarantee to the appellant on 26.11.2011 for an amount of Rs.5  crores.  The
relevant conditions read as follows:

                    “
We, YES BANK Ltd. do hereby guarantee and undertake to pay to GMB an  amount
not exceeding Rs 5,00,00,000/- (Rupees Five Crores only) as  against  breach
by the Lead Promoter for the development of Kachchigarh Port.  The  decision
of GMB as to any breach having been committed  and  loss/damages  caused  or
suffered shall be absolute and binding on us.

We, YES BANK Ltd, do hereby undertake to without any reference to  the  Lead
Promoter or any other person  and  irrespective  of  the  fact  whether  any
dispute is pending between GMB  and  the  Lead  Promoter  or  any  court  of
Tribunal or arbitrator relating thereto, pay  the  amount  due  and  payable
under this guarantee without any demur, merely on demand  from  GMB  stating
that the said Lead Promoter’s failure to perform the covenants of the  same.
Any such written demand made  by  GMB  on  the  Bank  shall  be  conclusive,
absolute and unequivocal as regards the amount due and payable by  the  Bank
under this guarantee. However, Bank’s liability under this  guarantee  shall
be restricted to an amount  not  exceeding  Rs  5,00,00,000/-  (Rupees  Five
Crores only).”



It appears, the first respondent could not proceed with  the  work  even  at
Kachchigarh,  and  on  such  intimation,  the  appellant  by  letter   dated
10.03.2015,  cancelled  the  LoI  issued  to  the  first   respondent.   The
communication dated 10.03.2015 cancelling the LoI to  the  extent  relevant,
reads as follows:



“This is with reference to your above mentioned letter informing  GMB  about
your inability to develop a port at Kachchigarh due to  presence  of  corals
not seeking any further extension of the LOI.

In this regard, it is hereby informed that  your  admission  on  failure  in
taking up the Project is in breach of the conditions set out in  the  Letter
of Intent dated 6.2.2008. At your request, the proposal for cancellation  of
Letter of Intent issued to M/s. L&T Ltd.   for  development  of  Kachchigarh
port was laid before the Board and was further  submitted  to  GOG  for  its
decision in the matter. After much deliberations, the Government of  Gujarat
has vide its letter dated February 23, 2015 accorded  its  approval  to  (a)
cancel the Letter of Intent to M/s L&T Ltd. for development  of  Kachchigarh
port and (b) forfeit the Bank Guarantee worth Rs.5 crores submitted  by  the
Company.

In view of the above direction of  the  Government,  the  Letter  of  Intent
dated 06.02.2008 issued to you for development of Kachchigarh port  (earlier
Sutrapada port) is hereby cancelled. Further, the issuing Bank of  the  Bank
Guarantee has been informed about GMB’s claim on the Bank Guarantee.”

xxx                                  xxx                                 xxx
xxx”

On the same day, the appellant also invoked the bank guarantee furnished  by
the  Yes  Bank  Limited  at  the  instance  of  the  first  respondent.  The
communication reads as follows:


“This is with reference to the above mentioned  Performance  Bank  Guarantee
issued by  your  bank  on  behalf  of  M/s  L&T  Infrastructure  Development
Projects Ltd.(“the Company”) towards securing the fulfilment  of  conditions
set out in the Letter of Intent (“LOI”)  dated  15.07.2010  and  having  its
validity till March 31,  2015  worth  Rs.5,00,00,000/-  (Rupees  Five  crore
only) submitted to Gujarat Maritime Board (GMB).

Whereas, in view of breach of the conditions set  out  in  the  LOI  by  the
Company, the Gujarat  Maritime  Board/Government  intends  to  exercise  its
right in accordance with Clause 1.9 and has decided to cancel the Letter  of
Intent and forfeit the above Bank Guarantee.

I, undersigned hereby put my  claim  to  forfeit  the  Bank   Guarantee  no.
005GM07113300001 dated November 26, 2011 worth Rs.  Five  crores  issued  by
your bank and to reimburse  the  amount  of  the  Bank   Guarantee  in   the
account of Gujarat Maritime Board, Gandhinagar.
It is requested to issue Demand Draft in the name of Vice Chairman  &  Chief
Executive Officer, Gujarat Maritime Board  payable  at  Gandhinagar  at  the
earliest.”


The  first  respondent  filed  a  writ  petition  before  the   High   Court
challenging the cancellation of the LoI  and  the  invocation  of  the  bank
guarantee. The following are the two main reliefs:

      “
That this Hon’ble Court be pleased to issue an appropriate  writ,  order  or
direction and  be  pleased  to  quash  and  set  aside  the  decision  dated
23.02.2015 of the respondent no. 2 and the  consequential  decision  of  the
respondent no. 1 communicated vide letter  of  10.03.2015,  to  approve  the
request of the petitioner to cancel the LoI issued to the  petitioner,  with
the condition of forfeiting the  Bank  Guarantee  worth  Rs  5  crores,  and
further command the respondent no. 1 to cancel the LoI dated 06.02.2008  and
return the Bank Guarantee to the petitioner;

That this Hon’ble Court may be pleased to issue appropriate writ,  order  or
direction directing the respondent no. 1 not to encash  the  Bank  Guarantee
No. 005GM07113300001  dated  26.11.2011(extended  from  time  to  time)  and
command the respondent  no.  1  to  withdraw  the  letter  dated  10.03.2015
addressed to Yes Bank invoking the aforesaid Bank Guarantee.”




By the impugned judgment, the writ petition was allowed.  Paragraphs-24,  25
and 26 of the  impugned  judgment  which  deal  with  the  contentions   are
extracted below:


“24. Learned counsel for the GMB however, would place much reliance  on  the
tender conditions in which the tenderer agreed that the bidder  had  made  a
complete and careful examination to determine the  difficulties  in  matters
incidental to the  performance  of  its  obligations  under  the  Concession
Agreement and to specify the nature  and  extent  of  all  difficulties  and
hazards. Counsel would  therefore,  contend  that  any  difficulty  or  even
impossibility in obtaining environmental clearances cannot be a  defence  of
the petitioner to avoid forfeiture of the security deposit.  We  are  unable
to read such  condition  in  such  a  rigid  manner.  If  the  contract  had
frustrated on account of impossibility, we have serious  doubt  whether  GMB
could forfeit security deposit  citing  the  reason  that  whatever  be  the
reason, the petitioner failed to perform  its  obligations  and,  therefore,
must be visited with  the  penalty  of  forfeiture.  However,  there  is  an
additional reason why we must reject such a contention. We may  recall,  the
initial project was for construction of port at  Sutrapada.  On  account  of
the respondents not being able to make the land available for such  project,
the same  had  to  be  shelved.  Only  as  an  alternative,  the  petitioner
suggested Kachchigarh as a site where the port could be  developed.  Surely,
the  petitioner  was  not  expected  to  carry  out  complete  environmental
assessment before coming up with such  an  alternative  suggestion  nor  GMB
understood the offer of the petitioner as to one which will irrespective  of
environment concerns, be accepted. When there was  a  fundamental  shift  in
the initial project envisaged in the letter of intent, the  contention  that
whatever be the difficulties in  executing  the  contract,  forfeiture  must
follow, need to be viewed in the background of such material changes.

25. The contention that  having  given  unconditional  bank  guarantee,  the
petitioner cannot avoid encashment thereof, can also not  be  accepted.  The
parameters for avoiding the payment of a bank guarantee by the  bank  giving
such guarantee cannot be applied in the present case. The  question  in  the
present case is not so much as to allowing the  authorities  to  encash  the
bank guarantee as much as the authority of the GMB  to  retain  such  amount
even if it was so allowed to be encashed. If the decision of GMB  to  cancel
the contract and to award the penalty of forfeiture of Rs 5  crores  on  the
petitioner itself is found to be erroneous and  therefore,  set  aside,  the
question of allowing GMB to encash  the  bank  guarantee  would  simply  not
arise.

26.   In the result,  petition  is  allowed.  Impugned  communication  dated
10.3.2015 is set aside. The respondents shall not encash the bank  guarantee
in question.”



Heard Shri Mukul Rohatgi, learned  Attorney  General  for  India,  and  Shri
Tushar Mehta,  learned  Additional  Solicitor  General,  appearing  for  the
appellant and Shri Gopal Jain, learned  Senior  Counsel  appearing  for  the
first respondent.
Unfortunately, the High Court went wrong both in its analysis of  facts  and
approach on law. A cursory reading of LoI would clearly show that it is  not
a case of forfeiture of security deposit “… if the contract  had  frustrated
on account  of  impossibility…”  but  invocation  of  the  performance  bank
guarantee. On law, the High Court  ought  to  have  noticed  that  the  bank
guarantee is an independent contract  between  the  guarantor-bank  and  the
guarantee-appellant.  The  guarantee  is  unconditional.   No   doubt,   the
performance guarantee is against the breach by the lead promoter, viz.,  the
first respondent. But between the  bank  and  the  appellant,  the  specific
condition incorporated in the bank guarantee is that  the  decision  of  the
appellant as to the breach is binding on the  bank.  The  justifiability  of
the decision is a different matter  between  the  appellant  and  the  first
respondent and it is not for the High Court in a  proceeding  under  Article
226 of the Constitution of India to go  into  that  question  since  several
disputed questions of fact are  involved.  Recently,  this  Court  in  Joshi
Technologies International Inc. v. Union of India and others[1],  where  one
of us (R.F. Nariman,  J.)  is  a  member,  has  surveyed  the  entire  legal
position on exercise  of  writ  jurisdiction  in  contractual  matters.  The
paragraphs which deal with the situation relevant to the case under  appeal,
read as follows:

“68. The Court thereafter summarised the legal  position  in  the  following
manner: (ABL International Ltd. Case (2004) 3 SCC 553)
“27. From the above discussion of ours, following  legal  principles  emerge
as to the maintainability of a writ petition:
(a) In an appropriate case, a  writ  petition  as  against  a  State  or  an
instrumentality of a State  arising  out  of  a  contractual  obligation  is
maintainable.
(b)  Merely  because  some   disputed   questions   of   facts   arise   for
consideration, same cannot be  a  ground  to  refuse  to  entertain  a  writ
petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of  monetary  claim  is
also maintainable.

28. However, while entertaining an objection as to the maintainability of  a
writ petition under Article 226 of the  Constitution  of  India,  the  court
should bear in mind the fact that  the  power  to  issue  prerogative  writs
under Article 226 of the Constitution  is  plenary  in  nature  and  is  not
limited by any other provisions of the Constitution. The High  Court  having
regard to the facts of the case, has a discretion to  entertain  or  not  to
entertain a writ  petition.  The  Court  has  imposed  upon  itself  certain
restrictions in the  exercise  of  this  power.  (See  Whirlpool  Corpn.  v.
Registrar of Trade Marks. [(1998) 8 SCC 1]) And this plenary  right  of  the
High Court to issue a prerogative writ will not  normally  be  exercised  by
the Court to the exclusion of other available remedies  unless  such  action
of the State or its instrumentality is arbitrary and unreasonable so  as  to
violate the constitutional mandate of Article 14  or  for  other  valid  and
legitimate reasons, for which the Court thinks it necessary to exercise  the
said jurisdiction.”

69. The position thus summarised in  the  aforesaid  principles  has  to  be
understood in the context of discussion that preceded which we have  pointed
out above. As  per  this,  no  doubt,  there  is  no  absolute  bar  to  the
maintainability of the writ petition even in contractual  matters  or  where
there are disputed questions of fact or even when monetary claim is  raised.
At the same time, discretion lies with the High Court  which  under  certain
circumstances, it can refuse to exercise. It also  follows  that  under  the
following circumstances, “normally”, the Court would  not  exercise  such  a
discretion:
69.1. The Court may not examine the issue unless the action has some  public
law character attached to it.
69.2. Whenever a particular mode of settlement of  dispute  is  provided  in
the contract, the High Court would refuse to exercise its  discretion  under
Article 226 of the Constitution and relegate the party to the said  mode  of
settlement, particularly when settlement of disputes is to  be  resorted  to
through the means of arbitration.
69.3. If there are very serious disputed questions  of  fact  which  are  of
complex nature and require oral evidence for their determination.
69.4.  Money  claims  per  se  particularly  arising  out   of   contractual
obligations are  normally  not  to  be  entertained  except  in  exceptional
circumstances.
70. Further, the legal position which  emerges  from  various  judgments  of
this Court dealing with different situations/aspects relating  to  contracts
entered into by the State/public authority  with  private  parties,  can  be
summarised as under:
70.1. At the stage of entering into a contract, the  State  acts  purely  in
its executive capacity and is bound by the obligations of fairness.
70.2. State in its executive capacity, even in  the  contractual  field,  is
under obligation to act fairly and cannot practise some discrimination.
70.3. Even in  cases  where  question  is  of  choice  or  consideration  of
competing claims before entering into the field of contract, facts  have  to
be investigated and found before the question of a violation of  Article  14
of the Constitution could arise. If those facts  are  disputed  and  require
assessment  of  evidence  the  correctness  of  which  can  only  be  tested
satisfactorily by taking detailed evidence, involving examination and cross-
examination  of  witnesses,  the  case  could   not   be   conveniently   or
satisfactorily  decided  in   proceedings   under   Article   226   of   the
Constitution. In such cases the Court can  direct  the  aggrieved  party  to
resort to alternate remedy of civil suit, etc.
70.4. Writ  jurisdiction  of  the  High  Court  under  Article  226  of  the
Constitution  was  not  intended  to  facilitate  avoidance  of   obligation
voluntarily incurred.
70.5. Writ petition was not maintainable to  avoid  contractual  obligation.
Occurrence  of  commercial  difficulty,   inconvenience   or   hardship   in
performance of the conditions agreed to  in  the  contract  can  provide  no
justification in not complying with the terms of contract which the  parties
had accepted with open eyes. It cannot ever be that a licensee can work  out
the licence if he finds it profitable to do so: and  he  can  challenge  the
conditions under which he agreed  to  take  the  licence,  if  he  finds  it
commercially inexpedient to conduct his business.
70.6. Ordinarily, where a breach of contract is  complained  of,  the  party
complaining  of  such  breach  may  sue  for  specific  performance  of  the
contract,  if  contract  is  capable  of   being   specifically   performed.
Otherwise, the party may sue for damages.”


It is contended on behalf of the first respondent  that  the  invocation  of
Bank Guarantee depends on the cancellation of  the  contract  and  once  the
cancellation of the contract  is  not  justified,  the  invocation  of  Bank
Guarantee also is not justified. We are afraid that  the  contention  cannot
be appreciated. The  bank  guarantee  is  a  separate  contact  and  is  not
qualified by the contract on performance of the obligations.  No  doubt,  in
terms of the bank guarantee also, the invocation is only  against  a  breach
of the conditions in the LoI. But between the appellant  and  the  bank,  it
has been stipulated that the decision of the  appellant  as  to  the  breach
shall be absolute and binding on the bank.
An injunction against the invocation of an  absolute  and  an  unconditional
bank guarantee cannot be granted except in situations of egregious fraud  or
irretrievable injury to one of the parties concerned. This position also  is
no more res integra. In Himadri Chemicals Industries  Limited  v.  Coal  Tar
Refining Company[2], at paragraph -14:

“14. From the discussions made hereinabove relating to  the  principles  for
grant or refusal to grant of injunction to restrain enforcement  of  a  bank
guarantee or a letter of credit,  we  find  that  the  following  principles
should be noted in the matter of injunction to restrain the encashment of  a
bank guarantee or a letter of credit:
(i) While dealing with an  application  for  injunction  in  the  course  of
commercial dealings, and when an unconditional bank guarantee or  letter  of
credit is given or accepted, the beneficiary is entitled to realise  such  a
bank guarantee or a letter of credit in terms thereof  irrespective  of  any
pending disputes relating to the terms of the contract.
(ii) The bank giving such guarantee is bound to honour it as per  its  terms
irrespective of any dispute raised by its customer.
(iii) The courts should be slow  in  granting  an  order  of  injunction  to
restrain the realisation of a bank guarantee or a letter of credit.
(iv) Since a bank guarantee or a letter of credit is an  independent  and  a
separate contract and is absolute in nature, the existence  of  any  dispute
between the parties to the contract is not a ground for issuing an order  of
injunction to restrain enforcement of bank guarantees or letters of credit.
(v) Fraud of an egregious nature which would vitiate the very foundation  of
such a bank guarantee or letter of credit and the beneficiary seeks to  take
advantage of the situation.
(vi) Allowing encashment of an unconditional bank guarantee or a  letter  of
credit would result in  irretrievable  harm  or  injustice  to  one  of  the
parties concerned.”



 Guarantee given by the bank to the appellant contains  only  the  condition
that in case of breach by the lead promoter, viz., the first  respondent  of
the conditions of LoI, the appellant is free to invoke  the  bank  guarantee
and the bank should honour it … “without any demur, merely on a demand  from
GMB (appellant) stating that the said lead promoter failed  to  perform  the
covenants…”. It has also been undertaken  by  the  bank  that  such  written
demand from the appellant on the bank shall be … “conclusive,  absolute  and
unequivocal as regards the amount due and payable by  the  bank  under  this
guarantee”. Between the appellant and the first respondent, in the event  of
failure to perform the obligations  under  the  LoI  dated  06.02.2008,  the
appellant was entitled to cancel the LoI and invoke the bank  guarantee.  On
being satisfied  that  the  first  respondent  has  failed  to  perform  its
obligations as covenanted, the appellant cancelled the LoI  and  resultantly
invoked the bank guarantee. Whether the cancellation is  legal  and  proper,
and whether on  such  cancellation,  the  bank  guarantee  could  have  been
invoked on the extreme situation of  the  first  respondent  justifying  its
inability to perform its obligations under the LoI,  etc.,  are  not  within
the purview of an inquiry under Article 226 of the  Constitution  of  India.
Between the bank and the appellant, the moment there  is  a  written  demand
for invoking the bank guarantee pursuant to breach of the covenants  between
the appellant and the first respondent, as satisfied by the  appellant,  the
bank is bound to honour the payment under the guarantee.
Therefore, the appeal is allowed and the impugned  judgment  is  set  aside.
However, we make it clear that this judgment will not stand in  the  way  of
the first respondent working out its grievances in  appropriate  proceedings
as permitted under law.

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




                                                       .......………………………………J.
(ROHINTON FALI NARIMAN)
New Delhi;
September 28, 2016.
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[1]    (2015) 7 SCC 728
[2]    (2007) 8 SCC 110


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                                                                  REPORTABLE