LAW FOR ALL

Friday, September 8, 2017

Order 7 Rule 11 (d) of the Code - Suit for Declaration that Lokadalat award was obtained by playing fraud - not maintainable and as such liable the suit is liable to rejected - Writ is the only remedy

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.11345 OF 2017
(Arising out of S.L.P.(C) No.23605 of 2015)
Bharvagi Constructions & Anr. ….Appellant(s)
VERSUS
Kothakapu Muthyam
Reddy & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) This appeal is filed by the defendants against
the final judgment and order dated 25.06.2015
passed by the High Court of Judicature at
Hyderabad for the State of Telangana and the State
of Andhra Pradesh in Appeal Suit No. 968 of 2013
whereby the High Court allowed the appeal filed by
2
the respondents herein with costs and set aside the
order dated 24.07.2013 passed by the second
Additional District Judge, Ranga Reddy District in
I.A. No.894 of 2010 in O.S. No.107 of 2010.
3) In order to appreciate the short legal
controversy involved in the appeal, it may not be
necessary to set out the factual controversy involved
in the case in detail and only narration of few facts
to appreciate the legal question arising in the case
would suffice for the disposal of this appeal.
4) On 07.05.2007, T. Jagat Singh (respondent
No. 5 herein) filed a civil suit being O.S. No. 481 of
2007 against respondent Nos. 1 to 34 herein
(defendant Nos. 1 to 33) in the Court of District
Judge, Ranga Reddy District Court.
5) The suit was for specific performance of
agreement of sale dated 28.12.1995 said to have
been entered into between the parties in respect of
agricultural land totally admeasuring AC. 51.29
guntas in (Sy.Nos. 262-274) situated at Pappalguda
3
village of Rajendranagar Mandal, Ranga Reddy
District (hereinafter referred to as the "suit land").
6) Originally, the plaintiff had filed suit only
against defendant Nos. 1 to 9 but later on defendant
Nos. 10 to 33 made an application for being joined
as defendant Nos. 10 to 33 in the civil suit as
according to them, they had an interest in the
subject matter of the civil suit and also in its
decision and, therefore, they were necessary parties
to the suit. Their prayer was allowed. The
defendants then contested the suit.
7) During the pendency of civil suit, on
22.08.2007, the parties (plaintiff and defendants)
settled the matter in relation to the suit land and
accordingly entered into written compromise.
8) A joint compromise petition signed by all the
parties to the suit was accordingly filed before the
Lok Adalat, which held its Lok Adalat sitting in the
Court on 22.08.2007.
4
9) The members of the Lok Adalat before whom
the suit was posted for its disposal in terms of the
compromise petition filed by the parties perused the
compromise petition and accepted the compromise
petition finding it to be in order. An Award was
accordingly passed on 22.08.2007 under Section 21
of the Legal Services Authorities Act, 1987
(hereinafter referred to as “the Act”) in terms of the
compromise petition, which, in turn, disposed of the
suit as having been compromised. (Annexure P-2).
10) On 14.11.2009, respondent Nos. 1 to 4 herein
(who were original defendant Nos. 22 to 25 in Suit
No. 481 of 2007) filed Civil Suit No. 107 of 2010
against the plaintiff and the remaining defendants
of Civil Suit No. 481 of 2007. This suit was filed in
the Court of II Additional District Judge, Ranga
Reddy District at L.B.Nagar.
11) This suit was for a declaration that the award
dated 22.08.2007 passed by the Lok Adalat in Civil
Suit No. 481 of 2007 was obtained by the
5
defendants of this suit by playing fraud/misrepresentation
on the plaintiffs and hence the
Award dated 22.08.2007 be declared illegal, null
and void and not binding on the plaintiffs.
12) According to the plaintiffs, though they were
parties to the award along with defendants in Civil
Suit No. 481/2007 but since the award dated
22.08.2007 was obtained by the parties by
misrepresenting the facts to the plaintiffs which was
nothing short of fraud played by the defendants on
them to grab their more land without their
knowledge and taking advantage of their illiteracy,
the same is not a legal award and hence not binding
on the plaintiffs. On these averments, the plaintiffs
prayed that the award dated 22.08.2007 be declared
illegal, void, in-operative and not binding on the
plaintiffs.
13) The defendants, on being served with the
notice of the suit, filed an application under Order 7
Rule 11 (d) of the Code of Civil Procedure, 1908
6
(hereinafter referred to as "the Code") and prayed for
rejection of the plaint. According to the defendants,
since the suit seeks to challenge the Award of Lok
Adalat, it is not maintainable being barred by virtue
of rigour contained in Order 7 Rule 11(d) of Code. It
was contended that the remedy of the plaintiff was
in filing writ petition under Article 226 or/and 227
of the Constitution of India to challenge the award
dated 22.08.2007 as held by this Court in State of
Punjab & Anr. Vs. Jalour Singh & Ors., (2008) 2
SCC 660 .
14) The Trial Court, by order dated 24.07.2013
allowed the application filed by the defendants and
rejected the plaint by invoking powers under clause
(d) of Rule 11. It was held that the filing of the civil
suit to challenge the award of Lok Adalat is
impliedly barred and the remedy of the plaintiffs is
to challenge the award by filing writ petition under
Article 226 or/and 227 of the Constitution in the
7
High Court as held by this Court in the case of
State of Punjab (supra).
15) The plaintiffs, felt aggrieved, filed an appeal
before the High Court. The High Court, by
impugned order, allowed the appeal, set aside the
order of the Trial Court and restored the suit on its
file for its disposal on merits in accordance with
law. The High Court held that since the suit is
founded on the allegations of misrepresentation and
fraud, it is capable of being tried on its merits by
the Civil Court.
16) Against this order, the defendants have felt
aggrieved and filed this appeal by way of special
leave before this Court.
17) Heard Mr. Dushyant Dave and Mr. Jayant
Bhushan, learned senior counsel for the appellants
and Mr. B. Adinarayana, learned senior counsel,
Mr. D. Mahesh Babu, Mr. Pranab Mullick, Mr. Ejaz
Maqbool for the respondents.
8
18) Mr. Dushyant Dave, learned senior counsel,
appearing for the appellants (defendants) while
assailing the legality and correctness of the
impugned order argued only one legal point. He
urged that the reasoning and the conclusion arrived
at by the Trial Court was right whereas the
reasoning and the conclusion arrived at by the High
Court was not so and hence the Trial Court's order
deserves to be restored.
19) Elaborating his submission, Mr. Dushyant
Dave placed reliance on the law laid down by this
Court in State of Punjab (supra) and contended
that the issue urged by him no longer remains res
integra and stands answered by this Court in
appellant's favour.
20) It was his submission that the expression
"barred by any law" occurring in clause (d) of Rule
11 of Order 7 not only includes any Act enacted by
the legislature creating a “bar” but the expression
“law” includes therein “judicial decision of the
9
Supreme Court" also, which are binding on all the
Courts in the Country by virtue of Article 141 of the
Constitution of India.
21) In other words, his submission was that the
expression “law” occurring in clause(d) of Rule 11 of
Order 7 should be construed liberally so as to
include therein not only any “Act" which is
admittedly a “law” made by the legislature but also
include therein a "a decision of Supreme Court ".
22) Learned counsel urged that the appellants
(defendants) were, therefore, fully justified in
invoking the powers under Order 7 Rule 11(d) of the
Code praying for rejection of the plaint as being
barred on the strength of law laid down by this
Court in State of Punjab (supra).
23) In reply, learned counsel for the respondents
while supporting the impugned order contended
that the reasoning and the conclusion arrived at by
the High Court is just and proper and hence does
not call for any interference.
10
24) 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 counsel
for the appellants.
25) The question arose before this Court (Three
Judge Bench) in the case of State of Punjab (supra)
as to what is the remedy available to the person
aggrieved of the award passed by the Lok Adalat
under Section 20 of the Act. In that case, the award
was passed by the Lok Adalat which had resulted in
disposal of the appeal pending before the High
Court relating to a claim case arising out of Motor
Vehicle Act. One party to the appeal felt aggrieved of
the Award and, therefore, questioned its legality and
correctness by filing a writ petition under Article
226/227 of the Constitution of India. The High
Court dismissed the writ petition holding it to be not
maintainable. The aggrieved party, therefore, filed
an appeal by way of special leave before this Court.
This Court, after examining the scheme of the Act
11
allowed the appeal and set aside the order of the
High Court. This Court held that the High Court
was not right in dismissing the writ petition as not
maintainable. It was held that the only remedy
available with the aggrieved person was to challenge
the award of the Lok Adalat by filing a writ petition
under Article 226 or/and 227 of the Constitution of
India in the High Court and that too on very limited
grounds. The case was accordingly remanded to the
High Court for deciding the writ petition filed by the
aggrieved person on its merits in accordance with
law.
26) This is what Their Lordships held in Para 12:
“12. It is true that where an award is made by
the Lok Adalat in terms of a settlement
arrived at between the parties (which is duly
signed by parties and annexed to the award of
the Lok Adalat), it becomes final and binding
on the parties to the settlement and becomes
executable as if it is a decree of a civil court,
and no appeal lies against it to any court. If
any party wants to challenge such an award
based on settlement, it can be done only by
filing a petition under Article 226 and/or
Article 227 of the Constitution, that too on
very limited grounds. But where no
compromise or settlement is signed by the
12
parties and the order of the Lok Adalat does
not refer to any settlement, but directs the
respondent to either make payment if it
agrees to the order, or approach the High
Court for disposal of appeal on merits, if it
does not agree, is not an award of the Lok
Adalat. The question of challenging such an
order in a petition under Article 227 does not
arise. As already noticed, in such a situation,
the High Court ought to have heard and
disposed of the appeal on merits.”
27) In our considered view, the aforesaid law laid
down by this Court is binding on all the Courts in
the country by virtue of mandate of Article 141 of
the Constitution. This Court, in no uncertain terms,
has laid down that challenge to the award of Lok
Adalat can be done only by filing a writ petition
under Article 226 and/or Article 227 of the
Constitution of India in the High Court and that too
on very limited grounds.
28) In the light of clear pronouncement of the law
by this Court, we are of the opinion that the only
remedy available to the aggrieved
person(respondents herein/plaintiffs) was to file a
writ petition under Article 226 and/or 227 of the
13
Constitution of India in the High Court for
challenging the award dated 22.08.2007 passed by
the Lok Adalat. It was then for the writ Court to
decide as to whether any ground was made out by
the writ petitioners for quashing the award and, if
so, whether those grounds are sufficient for its
quashing.
29) The High Court was, therefore, not right in by
passing the law laid down by this Court on the
ground that the suit can be filed to challenge the
award, if the challenge is founded on the allegations
of fraud. In our opinion, it was not correct approach
of the High Court to deal with the issue in question
to which we do not concur.
30) We also do not agree with the submissions of
Mr. Adinarayana Rao, learned senior counsel for the
respondents when he urged that firstly, the
expression "law" occurring in clause(d) of Rule 11
Order 7 does not include the "judicial decisions"
and clause (d) applies only to bar which is contained
14
in “the Act” enacted by the Legislature; and
Secondly, even if it is held to include the “judicial
decisions”, yet the law laid down in the case of
State of Punjab (supra) cannot be read to hold that
the suit is barred. Both these submissions, in our
view, have no merit.
31) Black's Law Dictionary (Ninth Edition) defines
the expression "law". It says that “Law" includes the
“judicial precedents" (see at page 962). Similarly,
the expression "law” defined in Jowett’s Dictionary
of English Law (Third Edition Volume-2, (pages
1304/1305) says that "law is derived from judicial
precedents, legislation or from custom. When
derived from judicial precedents, it is called
common law, equity, or admiralty, probate or
ecclesiastical law according to the nature of the
Courts by which it was originally enforced".
32) The question as to whether the expression
"law" occurring in clause(d) of Rule 11 of Order 7 of
the Code includes "judicial decisions of the Apex
15
Court" came up for consideration before the Division
Bench of the Allahabad High Court in Virender
Kumar Dixit vs. State of U.P., 2014(9) ADJ 1506.
The Division Bench dealt with the issue in detail in
the context of several decisions on the subject and
held in para 15 as under:
“15. Law includes not only legislative
enactments but also judicial precedents. An
authoritative judgment of the Courts
including higher judiciary is also law.”
33) This very issue was again considered by the
Gujarat High Court (Single Bench) in the case of
Hermes Marines Limited vs. Capeshore Maritime
Partners F.Z.C. & Anr. (unreported decision in Civil
Application (OJ) No.144 of 2016 in Admiralty Suit
No.10 of 2016 decided on 22.04.2016). The learned
Single Judge examined the issue and relying upon
the decision of the Allahabad High Court quoted
supra held in Para 53 as under:
“53. In the light of the above discussion, in
the considered view of this Court, it cannot
be said that the term “barred by any law”
occurring in clause(d) of Rule 11 of Order 7 of
16
the Code, ought to be read to mean only the
law codified in a legislative enactment and
not the law laid down by the Courts in
judicial precedents. The judicial precedent of
the Supreme Court in Liverpool & London
Steamship Protection and Indemnity
Association vs. M.V. Sea Success, 2004(9)
SCC 512 has been followed by the decision of
the Division Bench in Croft Sales &
Distribution Ltd. vs. M.V. Basil, 2011(2) GLR
1027. It is, therefore, the law as of today,
which is that the Geneva Convention of 1999
cannot be made applicable to a contract that
does not involve public law character. Such a
contract would not give rise to a maritime
claim. As discussed earlier, the word ‘law’ as
occurring in Order 7 Rule 11(d) would also
mean judicial precedent. If the judicial
precedent bars any action that would be the
law.”
34) Similarly, this very issue was again examined
by the Bombay High Court (Single Judge) in Shahid
s. Sarkar & Ors. Vs. Usha Ramrao Bhojane, 2017
SCC OnLine Bom 3440. The learned Judge placed
reliance on the decisions of the Allahabad High
Court in Virender Kumar Dixit vs. State of U.P.
(Supra) and the Gujarat High Court in Hermes
Marines Limited (supra) and held as under:
“18…………….The law laid down by the
highest court of a State as well as the
Supreme Court, is the law. In fact, Article
141 of the Constitution of India categorically
17
states that the law declared by the Supreme
Court shall be binding on all Courts within
the territories of India. There is nothing
even in the C.P.C. to restrict the meaning of
the words “barred by any law” to mean only
codified law or statute law as sought to be
contended by Mr. Patil. In the view that I
have taken, I am supported by a decision of
the Gujarat High Court in the case of Hermes
Marines Ltd..………..........................”
“19. One must also not lose sight of
the purpose and intention behind Order VII
Rule 11(d). The intention appears to be that
when the suit appears from the statement in
the plaint to be barred by any law, the Courts
will not unnecessarily protract the litigation
and proceed with the hearing of the suit. The
purpose clearly appears to be to ensure that
where a Defendant is able to establish that
the Plaint ought to be rejected on any of the
grounds set out in the said Rule, the Court
would be duty bound to do so, so as to save
expenses, achieve expedition and avoid the
court’s resources being used up on cases
which will serve no useful purpose. A
litigation, which in the opinion of the court,
is doomed to fail would not further be allowed
to be used as a device to harass a
Defendant…………………..”
35) Similarly, issue was again examined by the
High Court of Jharkhand(Single Judge) in Mira
Sinha & Ors. Vs. State of Jharkhand & Ors., 2015
SCC OnLine Jhar.4377. The learned Judge, in
paragraph 7 held as under:
18
“7. In the background of the law laid down by
the Hon’ble Supreme Court, it is apparent
that Order VII Rule 11(d) C.P.C. application is
maintainable only when the suit is barred by
any law. The expression “law” included in
Rule 11(d) includes Law of Limitation and, it
would also include the law declared by the
Hon’ble Supreme Court………”
36) We are in agreement with the view taken by
Allahabad, Gujarat, Bombay and Jharkhand High
Courts in the aforementioned four decisions which,
in our opinion, is the proper interpretation of the
expression "law" occurring in clause (d) of Rule 11 of
Order 7 of the Code. This answers the first
submission of the learned counsel for the
respondents against the respondents.
37) So far as the second submission of learned
counsel for the respondents is concerned, it also
has no merit. In our view, the decision rendered in
the case of State of Punjab (supra) is by the larger
Bench (Three Judge) and is, therefore, binding on
us. No efforts were made and rightly to contend that
the said decision needs reconsideration on the issue
in question. That apart, when this Court has laid
19
down a particular remedy to follow for challenging
the award of Lok Adalat then in our view, the same
is required to be followed by the litigant in letter and
spirit as provided therein for adjudication of his
grievance in the first instance. The reason being
that it is a law of the land under Article 141 of the
Constitution of India (see - M. Nagaraj & Ors. Vs.
U.O.I. & Ors. 2006 ( 8 ) SCC 212). It is then for
the writ court to decide as to what orders need to be
passed on the facts arising in the case.
38) In the light of foregoing discussion, we cannot
concur with the reasoning and the conclusion
arrived at by the High Court.
39) As a result, the appeal succeeds and is
allowed. Impugned order is set aside and that of the
order passed by the Trial Court is restored. As a
consequence, the application filed by the appellants
(defendants) under Order 7 Rule 11 (d) of the Code
is allowed resulting in rejection of the plaint.
20
40) We, however, make it clear that the
respondents (plaintiffs) would be at liberty to
challenge the legality and correctness of the award
dated 22.08.2007 passed by the Lok Adalat by filing
the writ petition under Article 226 or/and 227 of
the Constitution in the High Court in accordance
with law.
41) We also make it clear that we have not
examined the merits of case of either parties which
is the subject matter of the suit and hence the writ
court, in the event of writ petition being filed, would
decide the writ petition strictly in accordance with
law without being influenced by any of our
observations.
………...................................J.
[R.K. AGRAWAL]
…...
……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
September 07, 2017

Co- Sharer has no right of Pre emption - Effect of amendment of Pre- Emption Rights in Punjab - where the defendant was proceeded against ex parte and that order has been set aside on the ground that she has not been served and, therefore, she has been relegated to the position existing on the date she was proceeded against ex-parte, i.e., 6th April, 1990. After the amendment was introduced on 17th May, 1995, there was no right existing in the plaintiff to file a suit for pre-emption. Since the decree on contest was passed on 27th November, 1999 the plaintiff had no existing right of pre-emption on that date and the suit was rightly dismissed. This decree is the only subsisting decree of the first court.

1
‘REPORTABLE’
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2062 OF 2009
Vijay Singh … Appellant(s)
Versus
Shanti Devi and Anr. …Respondent(s)
J U D G M E N T
Deepak Gupta, J.
1. “Whether, in a suit for pre-emption, an ex parte decree
which is later set aside, can be termed to be the decree
of the court of first instance” is the question which
arises for decision in this appeal.
2. The undisputed facts are that one Roop Chand sold the
suit land in favour of Shanti Devi, respondent No. 1
2
herein. Vijay Singh, appellant who was a co-sharer
with Roop Chand, filed a suit for possession on the
basis of right of pre-emption granted to a co-sharer
under the Punjab Pre-emption Act, 1913 (for short ‘the
1913 Act’) on 6th November, 1989. The defendant
Shanti Devi was proceeded against ex parte on 6th
April, 1990. Thereafter, an ex parte decree was passed
against her on 10th April, 1990. Pursuant to the
decree, execution petition was filed and the appellant
Vijay Kumar took possession of the suit land on 7th
June, 1990.
3. On the same day, i.e., 7th June, 1990, Shanti Devi filed
an application under Order IX Rule 13 of the Code of
Civil Procedure (for short ‘CPC’) for setting aside the
decree dated 10th April, 1990 claiming that she had
not received the summons and had no knowledge of the
proceedings. It was alleged that only when possession
was taken on 7th June, 1990 did she become aware
that the appellant Vijay Kumar had initiated some legal
proceedings against her. The trial court dismissed the
application filed by Shanti Devi for setting aside the ex
3
parte decree on 4th October, 1993. Thereafter, Shanti
Devi filed an appeal before the appellate court.
4. In the meantime, on 17th May, 1995 the State of
Haryana amended Section 15 of the 1913 Act. The net
effect of this amendment was that the amendment took
away the right of pre-emption of a co-sharer and the
right of pre-emption was only retained with a tenant.
5. The appellate court allowed the application filed by
Shanti Devi and set aside ex parte decree on 28th
August, 1998. The appellant herein challenged the
order of the appellate court by filing civil revision
petition in the Punjab and Haryana High Court, which
was dismissed on 5th November, 1999. It would be
pertinent to mention that the learned Judge, while
dismissing the revision petition, also observed that in
view of the amendment to the 1913 Act the appellant
herein had no right to pre-empt the sale of the suit
land. The appellant then filed Petition for Special Leave
to Appeal (Civil) No. 3488 of 2000 before this Court,
which was disposed of on 10th March, 2000. This Court
not only dismissed the petition but also ordered that
4
the trial court would decide the suit afresh without
being influenced by the observations on merit, made by
the learned Judge of the High Court.
6. Thereafter, the suit was tried afresh and the main
ground raised by Shanti Devi was that in view of the
amendment made to the 1913 Act, the right of
pre-emption was no longer available to the appellant.
On the other hand, the appellant contended that the
date of decree of the first court was 10th April,
1990 when the ex parte decree was passed and,
therefore, the rights of the parties are governed by the
law as it stood on that date.
7. After remand, the learned trial court dismissed the suit
of the appellant on 27th November, 1999 on the ground
that by virtue of amendment to the 1913 Act, the right
of pre-emption stood extinguished. The appellant,
thereafter, filed first appeal before the trial court, which
was also dismissed. The regular second appeal also
met the same fate.
8. The issue to be decided is a legal issue which stands in
a narrow compass. Before dealing with the issue itself,
5
it would be pertinent to refer to the Constitution Bench
judgment of this Court in the case of Shyam Sunder
& Ors. v. Ram Kumar & Anr., 1
wherein this Court
considered the effect of the amendment made to the
1913 Act. This Court held that if Section 15 of the
1913 Act was amended during the pendency of the
appeal before the Supreme Court, the decree of
pre-emption would not be affected by such amendment.
After discussing the entire law, the Constitution Bench
culled out the following legal principles:
“10. On an analysis of the aforesaid decisions
referred to in the first category of decisions, the
legal principles that emerge are these:
1. The pre-emptor must have the right to
pre-empt on the date of sale, on the date of
filing of the suit and on the date of passing of
the decree by the court of the first instance
only.
2. The pre-emptor who claims the right to
pre-empt the sale on the date of the sale must
prove that such right continued to subsist till
the passing of the decree of the first court. If
the claimant loses that right or a vendee
improves his right equal or above the right of
the claimant before the adjudication of suit, the
suit for pre-emption must fail.
3. A pre-emptor who has a right to pre-empt a
sale on the date of institution of the suit and
on the date of passing of decree, the loss of
such right subsequent to the decree of the first
1 (2001) 8 SCC 24,
6
court would not affect his right or
maintainability of the suit for pre-emption.
4. A pre-emptor who after proving his right on
the date of sale, on the date of filing the suit
and on the date of passing of the decree by the
first court, has obtained a decree for
pre-emption by the court of first instance, such
right cannot be taken away by subsequent
legislation during pendency of the appeal filed
against the decree unless such legislation has
retrospective operation.”
9. In view of the decision of the Constitution Bench, it is
not necessary to refer to various other judgments cited
before us. A perusal of the principles laid down by the
Constitution Bench clearly indicates that the
pre-emptor should possess the right to pre-empt on
three dates:
(i) the date of sale;
(ii) the date of filing of the suit; and
(iii) the date of passing of the decree by the court of first
instance only.
As far as the first two conditions are concerned, there
is no dispute that the appellant possessed the right of
pre-emption on the date of sale as also on the date of filing of
the suit since he was a co-sharer in the land in question. It
is also not disputed that on 10th April, 1990 when the ex
7
parte decree was passed in favour of the appellant he had a
valid legal right of pre-emption in his favour.
10.The question to be decided is what is the effect of
setting aside of the ex parte decree and the passing of
fresh decree by the court of first instance on 27th
November, 1999 on which date, admittedly, the
appellant did not have a valid right to pre-empt the
sale in view of the amendment to the 1913 Act.
11.Order IX Rule 6 of CPC, reads as follows:
“ORDER IX- APPEARANCE OF PARTIES AND
CONSEQUENCE OF NON-APPEARANCE
xxx xxx xxx
6. Procedure when only plaintiff appears.- (1)
Where the plaintiff appears and the defendant
does not appear when the suit is called on for
hearing, then
(a) When summons duly served—lf it is
proved that the summons was duly
served, the court may make an order that
the suit be heard ex parte;
(b) When summons not duly served—If
it is not proved that the summons was
duly served, the court shall direct a
second summons to be issued and served
on the defendant;
(c) When summons served but not in
due time—If it is proved that the
summons was served on the defendant,
8
but not in sufficient time to enable him to
appear and answer on the day fixed in the
summons, the court shall postpone the
hearing of the suit to a future day to be
fixed by the court, and shall direct notice
of such day to be given to the defendant.
(2) Where it is owing to the plaintiff’s default
that the summons was not duly served or was
not served in sufficient time, the court shall
order the plaintiff to pay the costs occasioned
by the postponement.”
12.We are only concerned with clause (a), which provides
that if summons are duly served and the defendant
does not put in appearance, the court may make an
order that the suit would be heard ex parte. In this
case, this was the procedure followed and an ex parte
decree was passed. There is no manner of doubt that
an ex parte decree is also a valid decree. It has the
same force as a decree which is passed on contest. As
long as the ex parte decree is not recalled or set aside,
it is legal and binding upon the parties.
13.Order IX Rule 13, CPC reads as follows:
“ORDER IX- APPEARANCE OF PARTIES AND
CONSEQUENCE OF NON-APPEARANCE
xxx xxx xxx
9
13. Setting aside decree ex parte against
defendants— In any case in which a decree is
passed ex parte against a defendant, he may
apply to the Court by which the decree was
passed for an order to set it aside; and if he
satisfies the Court that the summons was not
duly served, or that he was prevented by any
sufficient cause from appearing when the suit
was called on for hearing, the Court shall make
an order setting aside the decree as against
him upon such terms as to costs, payment into
Court or otherwise as it thinks fit, and shall
appoint a day for proceeding with the suit;
Provided that where the decree is of such a
nature that it cannot be set aside as against
such defendant only it may be set aside as
against all or any of the other defendants also:
Provided further that no Court shall set aside a
decree passed ex parte merely on the ground
that there has been an irregularity in the
service of summons, if it is satisfied that the
defendant had notice of the date of hearing and
had sufficient time to appear and answer the
plaintiff's claim.
Explanation.—Where there has been an appeal
against a decree passed ex parte under this
rule, and the appeal has been disposed of on
any ground other than the ground that the
appellant has withdrawn the appeal, no
application shall lie under this rule for setting
aside the ex parte decree.”
14.The aforesaid provision lays down the procedure for
setting aside a decree passed ex parte. The court can
set aside an ex parte decree only on two grounds –
firstly, that the summons was not duly served; and
secondly, that the defendant was prevented by
sufficient cause from appearing when the suit was
10
called out. Once an ex parte decree is set aside, it
basically means that the parties are relegated to the
same position on which they stood before the passing of
the ex-parte decree.
15.In the present case, the stand of the respondent No. 1
is that she was never served in the suit and she came
to know about the proceedings only on the date when
the decree was executed and the possession of the land
was taken from her. On the same day itself she filed an
application for setting aside the ex parte decree. This
application was dismissed by the trial court. The lower
appellate court allowed the appeal filed by the
respondent No. 1 herein and set aside the ex parte
decree on the ground that she had not been served
properly in the suit and, therefore, she had a
reasonable cause for not appearing on the date on
which the suit was called up.
16.In the present case, the result would be that the
respondent No.1, Shanti Devi would be relegated to the
position at which she was when she was proceeded
against ex parte which would be the date on which the
11
written statement was to be filed. There is no manner
of doubt that the effect of setting aside an ex parte
decree is to restore the parties to the position at which
they were prior to the passing of the decree and relegate
them to the position on which they were when the
defendant was proceeded against ex parte. The parties
are restored to the position existing prior to the date
the order proceeding against the defendant ex parte
was passed. No authoritative pronouncement of this
Court has been placed before us in this regard.
However, we may refer to the judgments passed by
various High Courts in the case of Kumararu
Narayanaru v. Padmanabha Kurup Gopala Kurup2
,
Beerankoya Haji v. P.P. Mohammedkutty 3
, Shah
Bharat Kumar v. M/s. Motilal and Bharulal 4
, Aziz
Ahmed Patel v. I.A. Patel 5
, Mst. Lakshmi Devi v.
Roongta & Co.
6
, Venkatasubbiah v.
Lakshminarasimhan 7
, which have taken this view.
2 AIR 1953 (TC) 426
3 AIR 1986 Ker 10
4 AIR 1980 Guj 50
5 AIR 1974 (A.P.) 1
6 AIR 1962 (All.) 381
7 49 Mad.L.J.273
12
17.It would be pertinent to mention that the mere fact that
the ex parte decree has been executed does not
disentitle the defendant from applying under Order IX
Rule 13, CPC to get the same set aside. Reference may
be made to Sm. Sankaribala Dutta v. Sm. Asita
Barani Dasi and others8
and Mst. Fatima Khatoon
v. Swarup Singh9
. Once the decree is set aside,
restitution or restoration can be ordered.
18.On behalf of the appellant it has been urged that in
Shyam Sunder’s case (supra), this Court made no
exception for ex-parte decrees while setting out the
principles which have been quoted hereinabove and the
ex parte decree should be treated to be the decree of
the court of first instance. That was not an issue
raised before the Constitution Bench. This Court was
only concerned with the issue whether the amendment
to the 1913 Act taking away the right of pre-emption
vested in the co-sharer introduced after the decree was
passed by the court of first instance and the effect
8 AIR 1977 Calcutta 289
9 AIR 1984 Calcutta 257
13
thereof. The issue which is raised in this case was
neither directly nor impliedly the subject matter of
decision in Shyam Sundar’s case (supra).
19.An ex parte decree is passed when the court believes
that the defendant has been served but is not
appearing in court despite service of summons. In the
present case, the appellate court while setting aside the
ex parte decree, has come to the conclusion that the
defendant Shanti Devi (respondent no. 1 herein) was
not served and, therefore, the court had wrongly
proceeded against her ex parte. That finding has been
upheld till this Court. In our view, the effect of this
would be that the ex parte decree, on its being set
aside, would cease to exist and become non-est. After
the ex parte decree is set aside, it is no decree in the
eyes of law. The decree passed by the trial court on
merits should be treated as the decree of the first court.
We may make it clear that we are not dealing with
those cases where a case has been decided on merits
and the decree is set aside by the appellate court on
14
any other ground and the matter remanded to the trial
court for decision afresh. We leave that question open.
20.Here, we are dealing with a case where the defendant
was proceeded against ex parte and that order has been
set aside on the ground that she has not been served
and, therefore, she has been relegated to the position
existing on the date she was proceeded against
ex-parte, i.e., 6th April, 1990. After the amendment was
introduced on 17th May, 1995, there was no right
existing in the plaintiff to file a suit for pre-emption.
Since the decree on contest was passed on 27th
November, 1999 the plaintiff had no existing right of
pre-emption on that date and the suit was rightly
dismissed. This decree is the only subsisting decree of
the first court.
21.Shri Amarendra Sharan, learned senior counsel
appearing for the appellant urged that since possession
of the property was taken as far back as 7th June, 1990,
no restitution can be ordered at this belated stage and,
therefore, there is no point in upholding the decree. On
the other hand, Shri Shantwanu Singh, learned
15
counsel appearing for the respondent No. 1 has urged
that this Court should exercise its power under Article
142 of the Constitution of India and direct that the
property be restored to the respondent No. 1, who has
been litigating for many years.
22.We cannot accept either of the two submissions. The
limitation for restitution under the Limitation Act is 12
years. The ex parte decree was set aside on 28th
August, 1998 and thereafter, the appellant has been
litigating at various levels. If the appellant had
obtained stay order(s) during this period, obviously the
period for which the stay was granted, would have to be
excluded while calculating the period of limitation.
This is not the job of this Court. It is for the executing
court to decide whether the restitution petition, if any
filed, is within the limitation or not. It is only the court
which passed the original decree, which can order
restitution. Restitution cannot be granted by the
Supreme Court, as held in the case of State Bank of
Saurashtra v. Chitranjan Rangnath10
.
10 (1980) 4 SCC 516.
16
23.In view of the above, we find no merit in the appeal,
which is accordingly dismissed. Status quo granted
vide order dated 27.11.2006, which was directed to be
continued by order dated 30.03.2009, stands vacated.
....................................J.
(MADAN B. LOKUR)
....................................J.
(DEEPAK GUPTA)
New Delhi
September 08, 2017

Saturday, September 2, 2017

where the charge in both the proceedings is the same and Delinquent Officer is exonerated therefrom in the departmental proceeding which concludes earlier in point of time, that the criminal prosecution on the same set of facts and circumstances ought not to be allowed to continue more particularly in view of the prescription of higher standard of proof in criminal cases. However, exoneration in the departmental proceeding on a technical ground would not be a bar for the criminal prosecution to continue.

1
ITEM NO.34 COURT NO.12 SECTION II
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s). 6241/2012
(Arising out of impugned final judgment and order dated 13/03/2012
in SBCRM No. 332/2009 passed by the High Court Of Rajasthan At
Jodhpur)
MANA RAM Petitioner(s)
VERSUS
SOHAN LAL AND ANR. Respondent(s)
Date : 04/05/2017 This petition was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE ARUN MISHRA
HON'BLE MR. JUSTICE AMITAVA ROY
For Petitioner(s) Mr. Manoj Prasad, Sr. Adv.
Mr. Ashutosh Dubey, Adv.
Mr. Sadashiv Gupta, Adv.
Mr. Rohit Singh,Adv.
For Respondent(s) Mr. Rishabh Sancheti, Adv.
Mr. T. Mahipal,Adv.
Mr. Rahul Verma, Adv.
Ms. Ruchi Kohli,Adv.

UPON hearing the counsel the Court made the following
O R D E R

Leave granted.
Appeal is allowed in terms of the signed order.
(NEELAM GULATI)
COURT MASTER (TAPAN KR. CHAKRABORTY)
COURT MASTER
(Signed order is placed on the file)

1
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 893 OF 2017
[ARISING OUT OF S.L.P.(CRL.) NO.6241 OF 2012]
MANA RAM …APPELLANT
VERSUS
SOHAN LAL AND ANOTHER …RESPONDENTS
O R D E R
Leave granted
2. The impugnment is of the decision of the High Court contained in
the judgment and order dated 13.03.2012 rendered in S.B. Criminal
Miscellaneous Petition No.332/2009 thereby discharging the
respondent No.1 from the charge of offence under Section 167 India
Penal Code (for short hereinafter referred to as the “IPC”). Thereby, the
order of the learned Trial Court framing charge under the
aforementioned section of law and the dismissal of the revision
petition questioning the same by the jurisdictional Sessions Court,
have been set aside.

2
3. We have heard Mr. Manoj Prasad, learned senior counsel for the
appellant, M/s. Rishabh Sancheti & Mr. Rahul Verma, learned
counsel for the respondents No.1 & 2 respectively.
4. The essential facts need be outlined at the outset. The appellant
had filed a complaint in the Court of the Chief Judicial Magistrate,
Sriganganagar, Rajasthan against the respondent No.1 and one Shera
Ram under Sections 166, 167, 420, 466, 120B IPC to the effect that
following an agreement for sale of an agricultural land admeasuring
12 bigha, 5 biswa of Murrabba No.37, Kila No.13 to 25 with the owner
Shera Ram (respondent No.2 therein) and on payment of
Rs.2,52,000/- had taken over possession thereof. According to the
appellant/complainant since thereafter, he had been cultivating the
land and in continuation of the process of sale, he on 21.07.1990 paid
a further amount of Rs.10,000/- to Shera Ram against which the
latter executed a receipt. Thereafter, the appellant instituted a suit for
specific performance of the contract in the Court of the District and
Sessions Judge, Sriganganagar wherein the Trial Court, as prayed for,
also passed an order of injunction directing maintenance of status quo
of the land involved. The appellant/complainant has stated that the
factum of the order of injunction granted by the Trial Court was duly
communicated to the respondent No.1 who at the relevant time was

3
the Patwari of the region concerned. Reiterating that the appellant
thus was in possession of the land since 15.04.1987 and his name on
the basis of such possession and cultivation thereof was entered in
Canal Girdavari he asserted that irrigation slips were also issued by
the concerned Patwari from time to time. He also annexed to the
complaint, the said documents. The appellant/complainant averred
that the respondent No.1 (in the complaint) was in the capacity of
Patwari, fully aware of his possession and cultivation of the land since
15.04.1987 so much so that he issued receipts in endorsement of this
fact after collecting the land revenue. This was as late as on
12.08.2005.
5. The appellant/complainant alleged that in spite of the above, as
Shera Ram, his vendor nursed a malicious intention of selling the land
again for pecuniary gains, be colluded with the respondent No.1 and
in furtherance of the conspiracy between the two, got prepared a false
report by the respondent No.1 that the land was in possession of the
Shera Ram. According to the appellant/complainant this was effected
by making false entries in the revenue records.

6. Having come to learn of this fraud, the appellant/complainant
lodged a complaint with the District Collector, Sriganganagar following

4
which the S.D.M. (Revenue) did visit the spot along with the Patwari
on 28.10.2005 and submitted a report affirming that the land was in
his (appellant/complainant) cultivating possession. A copy of the
report was also annexed to the complaint. The appellant/complainant
thus alleged that the respondent No.1 in making the false entry and
issuing a report on the basis thereof grossly misused his official
position as a public servant and thus sought for the prosecution of the
respondents under the above-mentioned sections of law.
7. As the records reveal, following an investigation by the police as
ordered by the Court, charge-sheet was submitted against the
respondent No.1 and the Trial Court took cognizance of the offences
alleged and fixed the case for framing of charge. At that stage the
respondent No.1 filed an application under Section 197 Cr.P.C.,
questioning his prosecution sans necessary sanction thereunder.
8. The learned Trial Court after hearing the parties and on a
thorough consideration of the allegations made in the complaint and
the statements of the appellant/complainant and the witnesses
rejected the objection and framed charge against the respondent No.1
under Section 167 IPC by order dated 10.12.2008. Significantly, the
learned Trial Court while rejecting the respondent No.1's objection
based on 197 Cr.P.C. did take note of the documents furnished by the

5
appellant/complainant in support of the accusations and concluded
that having regard to the allegations made, the respondent No.1 was
not entitled to the protection under Section 197 Cr.P.C.
9. The charge as framed by the Trial Court is extracted hereunder:
“ That on or around dated 22.09.2005 while working at the
post of Patwari Halqa 11, L.N.P. as public service, you
prepared a false report about possession and cultivation of
accused Bheraram on the land comprising Murabba No.37,
Kile No.13 to 25 area 12 Bigha 5 Biswa as a public service
while you had got the knowledge that complainant
Manaram has been enjoying possession on the said land.
You indulged in such act with the intentions or knowingly
well that it would cause loss to complainant Manaram.
Thus, your act amounts to offence punishable under
section 167 Cr.P.C. and is under my cognizance .”
10. The revision petition filed by the respondent No.1 against the
above decision of the Trial Court was dismissed by the Sessions
Judge, Sriganganagar by his order dated 10.02.2009. The challenge
before the High Court was laid thereafter.
11. Parallelly however, acting on the complaint lodged with the
District Collector, Land Revenue, Sriganganagar a departmental
enquiry was conducted against the respondent No.1 on the following
charge:
“ That while working at Patwari Division 11, L.N.P. sale
certificate of land comprising Kila No.13 to 25 total area
12.05 Bigha of Murabba no.37 of Chuk 11 L.N.P. on
22.09.05. Instead of submitting report of Point No.1, 3 & 7
on the basis of the factuality, one of the parties was
unlawfully benefitted and from which unnecessary dispute

6
arose. Thus, you kept the higher officers misconceived by
acting contrary to your responsibility which was contrary
to the responsibility entrusted to you .”
12. The record attest that such enquiry under Rule 16(4) of the
Rajasthan Civil Services (Classification, Control & Appeals) Rules,
1958 was attended to by the respondent No.1 and the Enquiry Officer
after hearing the parties and on a detailed consideration of the
evidence adduced, held that the charge levelled against him stood
proved. Qua the testimony of the Tahsildar, Ganganagar who deposed
that as and when proposals are sought from Patwari for issuing a
Sanad, the relevant Rules required that statement of the neighbours at
the site be recorded and a true report be submitted, the Enquiry
Officer observed that no such record had been maintained with regard
to the report of possession and cultivation and that the Delinquent
Officer ought to have inspected the site and thereafter should have
submitted the report instead of doing so only on the basis of the
jamabandi. The Enquiry Officer was thus unmistakably clear that the
respondent No.1 had issued the report in question without either
visiting the site or making any enquiry with regard to the actual
possession of the land and the cultivation thereon.
13. The Disciplinary Authority i.e. the District Collector (LA),
Sriganganagar by its order dated 21.04.2009, on a consideration of

7
this report and other materials available on record accepted the
finding in support of the charge and awarded the penalty of stoppage
of two annual increments of the respondent No.1 with cumulative
effect.
14. In the appeal filed by the Delinquent Officer, the Divisional
Commissioner, Bikarner Division, Bikaner, by his order dated
19.05.2010 however exonerated him of the charge. A plain perusal of
this order would reveal that the Appellate Authority was of the view
that the report having been issued by the respondent No.1 on the
basis of the available records, the charge had remained unproved.
Noticeably in arriving at this conclusion, the Appellate Authority
disregarded the requirement of the Rules, as noted by the Enquiry
Officer of the visit to the site and an enquiry at the spot, by recording
the statements of the neighbours as the indispensable essentials to be
complied with before issuance of a report as was submitted.
15. In the above backdrop Mr. Manoj Prasad, learned senior counsel
for the appellant has emphatically urged that as the charge framed
against the respondent No.1 on the basis of the allegations in the
complaint and the evidence in support thereof is distinctly different
from the one enquired into in the departmental proceedings, the High
Court was in error in contemplating otherwise and in quashing the

8
criminal prosecution. The charges in the two proceedings being
patently different and the scope of scrutiny relatable thereto,
apparently distinguishable, the impugned order if allowed to stand
would be a travesty of justice, he urged.
16. Per contra, Mr. Rishabh Sancheti & Mr. Rahul Verma, learned
counsel for the respondents has insistently argued that a bare perusal
of the two charges would demonstrate the absolute identicalness
thereof and thus as rightly held by the High Court, continuance of
the criminal prosecution against the respondent No.1 would be an
abuse of the process of Court.
17. We have devoted our focused consideration to the rival
contentions. In our estimate, a bare perusal of the charge in the
departmental enquiry does not permit a deduction that it is absolutely
identical to the one framed by the Trial Court in the case registered on
the complaint filed by the appellant. Whereas the imputation enquired
into in the departmental enquiry was limited to the submission of
incorrect report on point 1, 3 and 7 thereby acting contrary to the
responsibility entrusted to the respondent No.1, the charge for the
criminal trial encompasses the additional dimension of his sustained
knowledge of the appellant’s possession of the land involved while
submitting a false report to the contrary with the dishonest intention

9
of causing loss to him. Thus allegations of guilty mind and dishonest
intention are the additional facets engrafted in the charge framed by
the Trial Court for the prosecution of the respondent No.1 which can
by no means be even inferred to be same or similar to the allegation
enquired into in the departmental proceeding. Most significantly as
well, the finding of the Enquiry Officer and affirmed by the
Disciplinary Authority that as per the prevalent Rules, the report in
question ought to have been submitted following a visit to the site and
an enquiry thereat by recording the statements of the neighbours, has
not been reversed by the Appellate Authority in the departmental
appeal. There is neither any finding to the effect that the respondent
No.1 did visit the site and conduct the procedure as prescribed by the
Rules prior to the submission of the report. In this premise, the very
foundation of the challenge to the order of framing of charge by the
Trial Court against the respondent No.1 and the affirmation thereof by
the Revisional Court is rendered non est.
18. We do not wish to heap the narration with the pronouncements
of this Court qua the permissibility of simultaneous departmental
proceedings and criminal prosecution on the same charge or
accusation. Suffice it to refer to the decision rendered in Radhey
Shyam Kejriwal Vs. State of West Bengal and another – (2011) 3
SCC 581 wherein this Court, following a survey of the decisions on the

10
issue has underlined that the two are independent of each other and
can be launched and proceeded with simultaneously. It is only when
and in a case where the charge in both the proceedings is the same
and Delinquent Officer is exonerated therefrom in the departmental
proceeding which concludes earlier in point of time, that the criminal
prosecution on the same set of facts and circumstances ought not to
be allowed to continue more particularly in view of the prescription of
higher standard of proof in criminal cases. However, exoneration in
the departmental proceeding on a technical ground would not be a bar
for the criminal prosecution to continue.
19. In the attendant facts and circumstances, having regard to the
dissimilarity in the charges as is apparent on the face of the records,
we are of the unhesitant opinion that the High Court had erred in
holding otherwise and in essence, quashing the criminal prosecution
against the respondent No.1. The impugned judgment and order of the
High Court is thus set aside and the matter is remanded to the Trial
Court to be proceeded with in accordance with law. We make it clear
that the observations made hereinabove are strictly limited to the
adjudication on the issue raised before this Court and do not have any
bearing on the merit of the charge and the learned Trial Court would

11
decide the case as per law without being in any way influenced
thereby.
…........................................J.
[ARUN MISHRA]
…........................................J.
[AMITAVA ROY]
NEW DELHI;
MAY 04, 2017.

Wednesday, August 30, 2017

Section 138 -No impleading of company after barred by limitation and without complaining sec.138 statutory notice - not curable defect = to implead M/s DAKSHIN GRANITES PVT. LTD. = (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 that each one of the ingredients flows from a document which evidences the existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand.- failure to comply with any one of the steps contemplated under Section 138 would not provide “cause of action for prosecution”. Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate = whether the respondent had sufficient cause for not filing the complaint against DAKSHIN within the period prescribed under THE ACT is not examined by either of the courts below. As rightly pointed out, the application, which is the subject matter of the instant appeal purportedly filed invoking Section 319 CrPC, is only a device by which the respondent seeks to initiate prosecution against DAKSHIN beyond the period of limitation stipulated under the Act -No doubt Section 142 authorises the Court to condone the delay in appropriate cases. We find no reason to condone the delay. The justification advanced by the respondent that it is during the course of the trial, the respondent realized that the cheque in question was drawn on the account of DAKSHIN is a manifestly false statement. On the face of the cheque, it is clear that it was drawn on account of DAKSHIN. Admittedly the respondent issued a notice contemplated under clause (b) of the proviso to Section 138 to DAKSHIN. The judgment under appeal is contrary to the language of THE ACT as expounded by this Court in Aneeta Hada (supra) and, therefore, cannot be sustained. The judgment is, accordingly, set aside. The appeal is allowed.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1534 OF 2017
(Arising out of SLP(Crl.) No.1439 of 2017)
N. Harihara Krishnan … Appellant
Versus
J. Thomas … Respondent
J U D G M E N T
Chelameswar, J.
1. Leave Granted
2. M/s. Norton Granites & Spinners (P) Ltd. (hereafter NORTON) sold
three parcels of land by three separate registered sale deeds dated
14.5.2007 to one M/s. Srivari Exports, a partnership firm (hereafter
FIRM). The appellant herein is the managing partner of the FIRM and
the respondent, it appears, is the power of attorney holder for the
managing director of NORTON. It appears from the record that the
appellant is also a director of a company known as M/s. Dakshin
Granites Pvt. Ltd. (hereafter DAKSHIN).
3. The respondent herein filed a complaint on 08.10.2012 bearing CC
1
No. 2925 of 2012 on the file of the VII Metropolitan Magistrate, George
Town at Chennai against the appellant herein invoking Sections 138
and 142 of the Negotiable Instruments Act, 1881 (hereinafter referred to
as “THE ACT”). The substance of the complaint is that the appellant
herein drew a cheque bearing No. 064159 dated 10.8.2012 for a sum of
Rs.39 lakhs (Rs.39,00,000/-) on the Syndicate Bank, Armenian Street,
Chennai in favour of the respondent. According to the complaint, the
said amount of Rs. 39 lakhs is the amount due from the appellant
towards the balance of the sale consideration in connection with the
sale transactions referred to above.
4. The said cheque was presented for collection by the respondent
through his bank (Indian Bank, High Court Branch, Chennai) on
28.8.2012 which was dishonoured on the ground that the account on
which the cheque was drawn had been closed.
5. On 10.9.2012, the respondent issued a notice contemplated under
clause (b) of the proviso to Section 138 of THE ACT. By the said notice,
the appellant was informed that the cheque had been dishonored and
further the appellant was called upon to pay the sum of Rs.39 lakhs
within 15 days from the date of the receipt of the notice. According to
the complaint, the notice was served on the petitioner on 14.9.2012 but
2
the petitioner neither responded to the notice nor made the payment.
Hence the complaint.
6. On 19.8.2015, Crl.M.P. No. 6771 of 2015 came to be filed in the
above-mentioned CC No. 2925 of 2012 by the respondent herein
purporting to be an application under Section 319 of the Code of
Criminal Procedure, 1973 (for short “CrPC”) with prayer as follows:-
“3. In the above circumstances, it is therefore prayed that this Hon’ble
Court may be pleased to implead M/s DAKSHIN GRANITES PVT. LTD.,
NO. 3B, EEBROS Centre, 40, Montieth Road, Chennai – 600 008 as
accused A1, in C.C. No. 2925 of 2012 pending on the file of this Hon’ble
Court and thus render justice.”
7. According to the said application, it came to the notice of the
respondent during the course of cross-examination of the appellant
herein at the trial of the CC No.2925 of 2012 that the cheque in
question was drawn on the account of DAKSHIN and the appellant is
only a signatory on behalf of the DAKSHIN in his capacity as a Director
of DAKSHIN. The respondent had initially failed to lodge the complaint
against DAKSHIN by inadvertence and hence the application.
8. The application was contested by the appellant. The learned
Metropolitan Magistrate by his Order dated 21.4.2016 allowed the said
application. The petitioner carried the matter in Criminal R.C. No. 774
of 2016 to the Madras High Court unsuccessfully. Hence the instant
3
SLP.
9. Xerox copies of the three sale deeds are placed before us and
according to the said documents, the sale consideration for the three
sale deeds is Rs. 2,80,000/-, Rs. 2,50,000/- and Rs. 1,20,000/-, in all
Rs. 6,50,000/-. Nonetheless, the respondent filed the complaint stating
that the cheque in question for Rs.39 lakhs was drawn towards the
balance of the sale consideration of the transactions covered by the
above-mentioned three sale deeds. Prima facie, it is very doubtful
whether the cheque was drawn for any amount which is legally due to
the respondent from the appellant.
10. A xerox copy of the cheque is placed before us. The number of the
account on which the cheque was drawn is not very clear from the said
copy. But from the content of the application from out of which the
instant appeal arises and from the xerox copy of the cheque it appears
that it was drawn on the account of DAKSHIN by somebody who claims
to be a Director of DAKSHIN. It is a case of the respondent that the
cheque was signed by the appellant. There appears to be some dispute
regarding the identity of the person who signed the cheque. It can be
seen from para 2 of the complaint, the said cheque was handed over to
4
the respondent through “an unknown person at Chennai High Court
premises”.
11. Assuming for the sake of argument that an amount of Rs. 39 lakhs
was due towards the balance of the sale consideration of the
above-mentioned three sales from the FIRM of which the appellant is
said to be the Managing Partner. The cheque in question was drawn by
a private company (DAKSHIN) (a third party to the sale transactions and
such a payment is permissible under the Indian Contract Act) and
allegedly signed by the appellant in his capacity as the Director of
DAKSHIN.
12. The learned Counsel for the appellant argued;
(a) Since the cheque in question was drawn on the account
of DAKSHIN, the person primarily liable for punishment
under Section 138 of THE ACT would be DAKSHIN. The
appellant herein being the alleged signatory in his capacity as
the Director of DAKSHIN would only be vicariously liable (if at
all) for the offence committed by DAKSHIN. In view of the law
declared by this Court in Aneeta Hada1
the prosecution
1
Aneeta Hada v. Godfather Travels & Tours Private Limited, (2012) 5 SCC 661
5
against the appellant could not be successfully maintained
without prosecuting DAKSHIN. Since the complaint was
originally lodged only against the appellant, the respondent
resorted to the device of filing an application on 19.8.2015
under Section 319 CrPC to ‘implead’ (in substance summon)
DAKSHIN as an accused/ respondent to the complaint.
(b) Section 142(1)(a) of THE ACT inter alia stipulates that a
complaint regarding the commission of the offence under
Section 138 must be “made within one month of the date on which
the cause of action arises under clause (c) of the proviso to Section 138”.
The application under Section 319 of CrPC by which
DAKSHIN is sought to be impleaded (summoned) is in
substance a complaint against DAKSHIN which is filed some
three years after the expiry of the period of 15 days stipulated
under clause (c) of the proviso to Section 138. Therefore
barred by the stipulation contained in Section 141(1)(b) of
THE ACT. No valid explanation for condoning such a long
delay is offered by the respondent. Both the courts below
erred in coming to the conclusion that once the offence is
6
taken cognizance of, the question of delay does not arise.
(c) Section 1382
stipulates inter alia that (i) the payee of the
cheque must give a notice in writing to the drawer of the
cheque within 30 days from the “receipt of the information by him
from the bank regarding the return of the cheque as unpaid”; (ii) the
notice must contain a demand for the payment of the amount
due on the cheque; and (iii) upon the receipt of the notice, if
the drawer of the cheque fails to make payment within 15
days of the receipt of the notice, prosecution could be
launched within one month thereafter. The timelines
stipulated under clauses (a) to (c) of the proviso to Section
138 are mandatory.3
2
“Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by
a person on an account maintained by him with a banker for payment of any amount of money to another person from out of
that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either
because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds
the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to
have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment
for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with
both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is
drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment
of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20 [within thirty days] of the receipt
of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the
case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purposes of this section, “debt or other liability” means a legally enforceable debt or other
liability.”
3
7
(d) The (instant) application under Section 319 CrPC came
to be filed (on 19.08.2015) some three years after the
dishonour of the cheque by the bank (on 30.8.2012). If the
respondent were to file complaint under Section 138 against
DAKSHIN on 19.8.2015, such a complaint would be clearly
not maintainable as it would have been far beyond the
permissible time within which a complaint could have been
filed under Section 138 of THE ACT. Therefore, both the
courts below erred in allowing the application.
13. On the other hand, the learned counsel for the respondent
submitted that the trial court and the High Court rightly impleaded the
appellant. The learned counsel submitted that the proviso to clause (b)
of Section 142 of THE ACT enables the Court to take cognizance of the
offence even beyond the prescribed period of limitation, if the
complainant satisfies the Court that he had sufficient cause for not
making the complaint within the period of limitation. The respondent
D. Vinod Shivappa v. Nanda Belliappa, (2006) 6 SCC 456
“14. ...There is good authority to support the proposition that once the complainant, the payee of the cheque, issues
notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for
payment by the drawer of the cheque. If he does not file a complaint within one month of the date on which the cause of
action arises under clause (c) of the proviso to Section 138 of the Act, his complaint gets barred by time.”
C.C. Alavi Haji v. Palapetty Muhammed and Another, (2007) 6 SCC 555
“9. ….It was further observed that once the payee of the cheque issues notice to the drawer of the cheque, the
cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque.
If he does not file a complaint within one month of the date on which the cause of action arises under Clause (c) of the
proviso to Section 138 of the Act, his complaint gets barred by time. …”
8
only got to know that the cheque in question was drawn on the account
of DAKSHIN only during the course of trial. Therefore, the respondent
made out a case for condonation of the delay.
14. It is rather difficult to understand the decision of the trial court.
We are given to understand that the order is made in vernacular and
only a translated copy4
of the same is placed before us. Be that as it
may, the ‘relevant’ portion of the translated copies reads as follows:-
“Hence whether cheque was drawn by company trial on the complaint
can be possible only if company is impleaded in complaint.
Hence as far as this case on hand, without impleading Dakshin Granite
(P) Ltd trial can not be conducted for impleading the company and
conditions as per Section 138 should be fulfilled. As per Section 138
Notice has been sent to Dakshin Granites – hence conditions fulfilled.
It is prayed by complainant that he should be permitted to implead
company and also condone the delay.
As per Section 142, complaint is to be filed with one month which has
been done. Hence as per Section 142(b) no separate petition is
required after cognizance of offence.
The offenders of crime can be decided. To take conginsance it is not
required to take cognizance in the case of each accused.
In view of the above the petition is allowed and I order for impleading
the company and summons to be served.”
15. While examining the legality of the trial court’s order, the High
Court took note of the fact that two applications were filed by the
respondent, one to condone the delay (of 1211 days) and other to
implead (summon?) DAKSHIN invoking Section 319 of the CrPC. The
High Court recorded an interesting finding:-
4
We are not informed whether it is an official translation by either of the courts below or any
one of the learned counsel who appeared in the case or by the parties.
9
“In this case, the present revision is preferred only against the order
passed in Crl.M.P. No. 6771 of 2015 in C.C. No. 2925 of 2012, which
was filed to implead M/s. Dakshin Granites Private Ltd., as an accused
in the private complaint and no appeal or revision was preferred against
the order passed in Crl.M.P. No. 1257 of 2016 by either side.”
16. We say it is an interesting finding because from the translation of
the trial court’s order placed before us, the trial court is silent about the
application for condonation of the delay. On the other hand, the trial
court observed “Hence as per Section 142(b) no separate petition is required after
cognizance of offence.”
After recording such a finding, the High Court proceeded to say;
“…The Trial Court, after considering the arguments of both sides, came
to a conclusion that since the case was already taken on file and
cognizance of the offence was taken, in this case, separate petition to
condone the delay of 1211 days is not necessary and M/s. Dakshin
Granites Private Ltd. was impleaded as an accused. Admittedly,
statutory notice under Section 138(b) of the Negotiable Instruments Act
was issued to M/s. Dakshin Granites Private Ltd., and M/s. Dakshin
Granites Private Ltd., has not preferred any revision before this Court.
Hence, the present petitioner is only the signatory. Even according to
the present petitioner, who is an individual person and who signed the
cheque represents the company.”
The High Court, concluded that as no revision is filed by DAKSHIN
the “revision preferred by the petitioner is not maintainable. No merits in the
petition.”
17. We are of the opinion that it is difficult to understand the
conclusions recorded by both the courts below. They are wholly
illogical, to use a very mild expression.
18. Section 142 of THE ACT inter alia stipulates that no court shall
10
take cognizance of any offence punishable under Section 138 unless a
complaint is made within one month of the date on which the cause of
action arises under clause (c) of the proviso to Section 138. The
relevant portion of Section 142 reads as follows:-
“142 Cognizance of offences. —Notwithstanding anything contained in
the Code of Criminal Procedure, 1973—
(a) no court shall take cognizance of any offence punishable under
section 138 except upon a complaint, in writing, made by the payee or,
as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which
the cause of action arises under clause (c) of the proviso to section 138:
Provided that the cognizance of a complaint may be taken by the
Court after the prescribed period, if the complainant satisfies the Court
that he had sufficient cause for not making a complaint within such
period.”
19. The preliminary facts constituting an offence5
under Section 138 of
the Act are; (i) that a cheque is drawn, and (ii) that cheque is dishonored
by the Bank when presented by the payee. Under the scheme of Section
138 both the drawer of the cheque and the bank upon which the cheque
5
However, this Court in MSR Leathers v. S. Palaniappan and Another, (2013) 1 SCC 177 held;
10. Proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must
be satisfied before the dishonour of a cheque can constitute an offence and become punishable. The first condition is that
the cheque ought to have been presented to the bank within a period of six months from the date on which it is drawn or
within the period of its validity, whichever is earlier. The second condition is that the payee or the holder in due course of
the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice
in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the
return of the cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make
payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within
fifteen days of the receipt of the said notice. It is only upon the satisfaction of all the three conditions mentioned
above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence
under Section 138 can be said to have been committed by the person issuing the cheque.
11
is drawn are parties against whom the payee of the cheque can have
various legal rights, which may have either civil or criminal
consequences or perhaps both depending upon the facts of a given case.
Section 138 prescribes only one of the consequences, i.e. the
prosecution and punishment of only the drawer of the cheque. It is
possible in a given case that a bank may without any valid justification
decline to honor a cheque drawn on it. For which act of the bank, the
drawer of the cheque may in no way be responsible either in fact or in
law. In such a fact situation, the payee of the cheque may have legal
rights and remedies for the redressal of the injury (if any) caused by the
Bank in addition to his rights against the drawer of the cheque.
20. The offence under Section 138 of THE ACT is capable of being
committed only by the drawer of the cheque. The logic of the High Court
that since the offence is already taken cognizance of, there is no need to
take cognizance of the offence against DAKSHIN is flawed. Section 141
stipulates the liability for the offence punishable under Section 138 of
THE ACT when the person committing such an offence happens to be a
company - in other words when the drawer of the cheque happens to be
a company. Relevant portion of Section 141 reads as follows:-
“Section 141. Offences by companies.—
12
(1) If the person committing an offence under section 138 is a company,
every person who, at the time the offence was committed, was in charge
of, and was responsible to the company for the conduct of the business
of the company, as well as the company, shall be deemed to be guilty of
the offence and shall be liable to be proceeded against and punished
accordingly:”
21. This Court in Aneeta Hada, had an occasion to examine the
question “whether an authorised signatory of a company would be liable for
prosecution under Section 138 of the Negotiable Instruments Act, 1881 (for brevity
“the Act”) without the company being arraigned as an accused” and held as
follows:-
“59. In view of our aforesaid analysis, we arrive at the irresistible
conclusion that for maintaining the prosecution under Section 141 of
the Act, arraigning of a company as an accused is imperative. The
other categories of offenders can only be brought in the drag-net on the
touchstone of vicarious liability as the same has been stipulated in the
provision itself. …”
Yet the High Court reached a conclusion that the revision filed by
the petitioner is not maintainable because DAKSHIN did not choose to
challenge the trial court’s order.
The High Court failed to appreciate that the liability of the
appellant (if any in the context of the facts of the present case) is only
statutory because of his legal status as the DIRECTOR of DAKSHIN.
Every person signing a cheque on behalf of a company on whose
account a cheque is drawn does not become the drawer of the cheque.
13
Such a signatory is only a person duly authorised to sign the cheque on
behalf of the company/drawer of the cheque. If DAKSHIN/drawer of
the cheque is sought to be summoned for being tried for an offence
under Section 138 of THE ACT beyond the period of limitation
prescribed under THE ACT, the appellant cannot be told in view of the
law declared by this Court in Aneeta Hada that he can make no
grievance of that fact on the ground that DAKSHIN did not make any
grievance of such summoning. It is always open to DAKSHIN to raise
the defense that the initiation of prosecution against it is barred by
limitation. DAKSHIN need not necessarily challenge the summoning
order. It can raise such a defense in the course of trial.
Coming to the view of the High Court that only the offence is taken
cognizance of and there is no need to take cognizance of an offence
accused-wise is an erroneous view in the context of a prosecution under
THE ACT. Most probably the High Court recorded such conclusion
(though not expressly stated) on the basis of the judgment of this Court
in Raghubans Dubey v. State of Bihar, AIR 1967 SC 1167, where it
was stated:
“Para 9. … In our opinion, once cognizance has been taken by the
Magistrate, he takes cognizance of an offence and not the offenders;
once he takes cognizance of an offence it is his duty to find out who the
offenders really are and once he comes to the conclusion that apart from
14
the persons sent up by the police some other persons are involved, it is
his duty to proceed against those persons. …”
Such a statement of law was made by this Court in the background of
the scheme of the CrPC.
22. The CrPC is an enactment which is designed to regulate the
procedures governing the investigation of crimes in order to get the
perpetrators of the crime punished. A crime is an act or omission
prohibited by law attracting certain legal consequences like
imprisonment, fine etc. Obviously, acts or omissions constituting
offences/crimes are capable of being committed only by persons either
natural or juridical.
The CrPC imposes a duty on the investigating agencies to gather
evidence necessary to establish the occurrence of a crime and to trace
out the perpetrators of the crime in order to get them punished.
Punishment can be inflicted only by a competent Court but not by the
investigating agency. Courts are authorised to inflict punishment if only
they are satisfied that the evidence gathered by the investigating agency
is sufficient to establish that (1) a crime had been committed; and (2)
the persons charged with the offence (accused) and brought before the
Court by the investigating agency for trial are the perpetrators of the
15
crime.
Under the Scheme of the CrPC, any investigating agency (normally
the police) is bound to investigate by following the procedure prescribed
therein once it receives either information regarding the commission of a
cognizable offence or an order from a Magistrate to investigate into the
allegation of the occurrence of a non-cognizable offence and submit a
report under Section 173. Section 173(2)(i)(d) inter alia stipulates that
the report should contain a statement:
“Whether any offence appears to have been committed and if so by
whom?”
The conclusions reached by the police after investigation into the above
two questions are required to be scrutinized by a competent Court. It is
only after the Court is satisfied that the evidence collected by the
investigating agency is sufficient in law to punish the accused, such
accused can be punished. Taking cognizance of an offence by the Court
is one of the initial steps in the process. Thereafter, the investigating
agency is required to collect evidence (investigate) and place the same
before the Court under Section 173 CrPC.
23. The scheme of the prosecution in punishing under Section 138 of
THE ACT is different from the scheme of the CrPC. Section 138 creates
16
an offence and prescribes punishment. No procedure for the
investigation of the offence is contemplated. The prosecution is
initiated on the basis of a written complaint made by the payee of a
cheque. Obviously such complaints must contain the factual allegations
constituting each of the ingredients of the offence under Section 138.
Those ingredients are: (1) that a person drew a cheque on an account
maintained by him with the banker; (2) that such a cheque when
presented to the bank is returned by the bank unpaid; (3) that such a
cheque was presented to the bank within a period of six months from
the date it was drawn or within the period of its validity whichever is
earlier; (4) that the payee demanded in writing from the drawer of the
cheque the payment of the amount of money due under the cheque to
payee; and (5) such a notice of payment is made within a period of 30
days from the date of the receipt of the information by the payee from
the bank regarding the return of the cheque as unpaid. It is obvious
from the scheme of Section 138 that each one of the ingredients flows
from a document which evidences the existence of such an ingredient.
The only other ingredient which is required to be proved to establish the
commission of an offence under Section 138 is that inspite of the
demand notice referred to above, the drawer of the cheque failed to
17
make the payment within a period of 15 days from the date of the
receipt of the demand. A fact which the complainant can only assert
but not prove, the burden would essentially be on the drawer of the
cheque to prove that he had in fact made the payment pursuant to the
demand.
24. By the nature of the offence under Section 138 of THE ACT, the
first ingredient constituting the offence is the fact that a person drew a
cheque. The identity of the drawer of the cheque is necessarily required
to be known to the complainant (payee) and needs investigation and
would not normally be in dispute unless the person who is alleged to
have drawn a cheque disputes that very fact. The other facts required to
be proved for securing the punishment of the person who drew a cheque
that eventually got dishonoured is that the payee of the cheque did in
fact comply with each one of the steps contemplated under Section 138
of THE ACT before initiating prosecution. Because it is already held by
this Court that failure to comply with any one of the steps contemplated
under Section 138 would not provide “cause of action for prosecution”.
Therefore, in the context of a prosecution under Section 138, the
concept of taking cognizance of the offence but not the offender is not
appropriate. Unless the complaint contains all the necessary factual
18
allegations constituting each of the ingredients of the offence under
Section 138, the Court cannot take cognizance of the offence.
Disclosure of the name of the person drawing the cheque is one of the
factual allegations which a complaint is required to contain. Otherwise
in the absence of any authority of law to investigate the offence under
Section 138, there would be no person against whom a Court can
proceed. There cannot be a prosecution without an accused. The
offence under Section 138 is person specific. Therefore, the Parliament
declared under Section 142 that the provisions dealing with taking
cognizance contained in the CrPC should give way to the procedure
prescribed under Section 142. Hence the opening of non-obstante clause
under Section 142. It must also be remembered that Section 142 does
not either contemplate a report to the police or authorise the Court
taking cognizance to direct the police to investigate into the complaint.
25. The question whether the respondent had sufficient cause for not
filing the complaint against DAKSHIN within the period prescribed
under THE ACT is not examined by either of the courts below. As
rightly pointed out, the application, which is the subject matter of the
instant appeal purportedly filed invoking Section 319 CrPC, is only a
device by which the respondent seeks to initiate prosecution against
19
DAKSHIN beyond the period of limitation stipulated under the Act.
26. No doubt Section 142 authorises the Court to condone the delay in
appropriate cases. We find no reason to condone the delay. The
justification advanced by the respondent that it is during the course of
the trial, the respondent realized that the cheque in question was drawn
on the account of DAKSHIN is a manifestly false statement. On the face
of the cheque, it is clear that it was drawn on account of DAKSHIN.
Admittedly the respondent issued a notice contemplated under clause
(b) of the proviso to Section 138 to DAKSHIN. The fact is recorded by
the High Court. The relevant portion is already extracted in para 16.
27. The judgment under appeal is contrary to the language of THE ACT
as expounded by this Court in Aneeta Hada (supra) and, therefore,
cannot be sustained. The judgment is, accordingly, set aside. The appeal
is allowed. In the circumstances, the costs is quantified at Rs.
1,00,000/- (Rupees One Lakh Only).
….....................................J.
(J. CHELAMESWAR)
……. ………….....................J.
(S. ABDUL NAZEER)
New Delhi
August 30, 2017
20

Section 14(1)(a) and (b) of the Delhi Rent Control Act, 1958 - Sub-tenancy or sub-letting =whether in the present facts and circumstances of the case the order of eviction passed by the High Court was just and proper?- In the present facts and circumstances of the case, we are of the opinion that the original owner-respondent No. 1 herein has proved beyond doubt that the property is in exclusive possession of the sub-tenant and the appellant herein has not been able to deny the claim of sub-tenancy in favour of Respondent No. 2. The absence of evidence and failure to discharge the onus lay heavy on appellant and there could be no presumption other than that the suit premises had been sublet and parted with possession by the appellant herein to the Respondent No. 2.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11106 OF 2017
(Arising out of Special Leave Petition (C) NO. 7149 OF 2015)
Prem Prakash .... Appellant(s)
Versus
Santosh Kumar Jain & Sons
(HUF) and Another .... Respondent(s)
J U D G M E N T
R.K. Agrawal, J.
1) Leave granted.
2) This appeal is directed against the final judgment and order
dated 07.11.2014 passed by the High Court of Delhi at New
Delhi in C.M. (M) No. 478 of 2014 whereby learned single
Judge of the High Court allowed the eviction petition filed by
the original owner-Respondent No. 1 herein while setting aside
the judgments and orders dated 08.09.2011 and 24.03.2014
passed by the Court of Additional Rent Controller, North Delhi
and the Rent Control Tribunal, Delhi, respectively.
1
3) Brief facts:
(a) Shri Santosh Kumar Jain- Respondent No. 1 herein filed
an application for increase of standard rent and eviction of
tenant being Eviction Petition No. 956 of 2007 before the Rent
Controller, Delhi under Section 14(1)(a) and (b) of the Delhi
Rent Control Act, 1958 (in short ‘the DRC Act’) on the ground
that the premises in question, i.e., Shop No. 16 (Private No.
15), Gali Kunjas, Ward No. IV, Dariba Kalan, Delhi 110 006
has been sub-let, assigned and otherwise parted with
possession illegally by the original tenant-the appellant herein
to his sub-tenant-Respondent No. 2 herein, who is in the
unauthorized occupation of the same and is carrying on his
own independent business and also that the original
tenant-the appellant herein is in arrears of rent from
01.01.2002.
(b) Learned Additional Rent Controller, North Delhi, vide
judgment and order dated 08.09.2011 in E.No. 02/2009
dismissed the claim of eviction while directing the appellant
herein to deposit the rent as agreed for preceding 3 (three)
years from the date of filing of the eviction petition.
2
(c) Being aggrieved by the order dated 08.09.2011,
Respondent No. 1 went in appeal before the Rent Control
Tribunal, Delhi. The Rent Control Tribunal, vide judgment
and order dated 24.03.2014 in RCT-203/2013/2011,
dismissed the appeal.
(d) The owner-Respondent No. 1 herein, aggrieved by the
judgments and orders dated 08.09.2011 and 24.03.2014, filed
a petition being C.M. (M) No. 478 of 2014 before the High
Court. Learned single Judge of the High Court, vide judgment
and order dated 07.11.2014, allowed the petition filed by the
owner-Respondent No. 1 herein.
(e) Aggrieved by the judgment and order dated 07.11.2014,
the appellant has preferred this appeal by way of special leave
before this Court.
4) Heard Mr. Braj K. Mishra, learned counsel for the
appellant-tenant and Ms. Bharati Tyagi, learned counsel for
Respondent No.2 and Mr. Satish Kumar Jain – the original
owner, Respondent No. 1 herein, argued in person.
3
Point for consideration:
5) The only point for consideration before this Court is
whether in the present facts and circumstances of the case the
order of eviction passed by the High Court was just and
proper?
Rival Submissions:
6) Learned counsel for the appellant-the tenant contended
before this Court that Respondent No. 2 herein was looking
after the entire small business affairs of the appellant herein
and is using and occupying the suit premises in the capacity
of an employee. Learned counsel further contended that the
appellant herein was paying commission by way of
cash/cheque or as per the convenience and outcome of the
business to Respondent No. 2 in lieu of his services. It is
further contended that Respondent No. 2 herein got the
business cards printed for the promotion of the business of
the appellant herein. The appellant herein is the lawful tenant
and has never parted with the possession or sublet the suit
property either to Respondent No. 2 or to any other person
and no notice of demand as alleged has been served upon him.
4
Learned counsel further contended that Respondent No. 2 is
only a friend of the appellant herein and for this reason only
he was employed and allowed to sit in the suit premises and
no business was being carried out in the name of M/s R.R.
Jewellers from the suit premises by Respondent No. 2 who is
alleged to have changed the firm’s name as “M/s Ashima
Jewellery” later on. It was further contended that even if the
original owner was having knowledge of sub-tenancy of the
suit premises in December, 2001, no action was initiated by
him to vacate the same from the sub-tenant and hence he
failed to prove that Respondent No. 2 is in exclusive
possession of the suit premises and the appellant herein has
divested himself from the physical and legal possession of the
same. Learned counsel for the appellant herein finally
contended that the present petition is not maintainable and
the High Court has committed a grave illegality in allowing the
eviction petition.
7) Shri Santosh Kumar Jain-the original owner, Respondent
No. 1 herein argued in-person and submitted that the
5
appellant herein had sub-let, assigned and parted with the
possession of the suit premises in favour of Respondent No. 2
herein, who is in illegal and unauthorized possession of the
same. Respondent No. 1 further submitted that though the
appellant herein has claimed that the Respondent No. 2 was
his employee and was being paid commission for the job
booked by him, no document has been produced on record to
show that Respondent No. 2 was being paid any salary or
commission by the appellant. Respondent No. 1 further
stressed upon the point that the sub-tenant has admitted to
have fixed a bill board under the name and style of “M/s R.R.
Jewellers” in the suit premises. Further, the sub-tenant of the
appellant herein got printed visiting cards in his name with
the address of the suit premises and the very same fact has
been admitted in the statement given by him. Respondent No.
1 further submitted that, undoubtedly, the onus of proving the
presence of other person in the suit premises is on the owner
and once it is proved, it shifts to the tenant to disapprove the
same. Respondent No. 1 finally submitted that High Court
was right in allowing the eviction petition while setting aside
6
the judgments and orders passed by the Court of Additional
Rent Controller and Rent Control Tribunal holding that the
suit premises was sub-let and the appellant herein had parted
with the possession and prayed that no interference is sought
for by this Court in the case.
Discussion:
8) It would be appropriate to reproduce Section 14 of the
DRC Act in order to arrive at a conclusion in the case which is
as under:-
“14. (1)) Notwithstanding anything to the contrary contained
in any other law or contract, no order or decree for the
recovery of possession of any premises shall be made by any
court or Controller in favour of the landlord against a tenant:
Provided that the Controller may, on an application made to
him in the prescribed manner, make an order for the
recovery of possession of the premises on one or more of the
following grounds only, namely:-
(a) that the tenant has neither paid nor tendered the (whole
of the arrears of the rent legally recoverable from him within
two months of the date on which a notice of demand for the
arrears of rent has been served on him by the landlord in the
manner provided in Section 106 of the Transfer of Property
Act, 1882.
(b) That the tenant has, on or after the 9th day of June,
1952, sublet, assigned or otherwise parted with the
possession of the whole or any part of the premises without
obtaining the consent in writing of the landlord;…..”
[
7
9) Respondent No. 1 herein-the original owner, filed an
eviction petition on the ground that the property in question
has been sub-let by the original tenant-appellant herein to the
sub-tenant i.e., Respondent No. 2. The tenant denied the
assertion that the property has been assigned to the
sub-tenant stating that Respondent No. 2 is his friend and is
an employee who attends his customers in his absence. It was
further explained that Respondent No. 2 was working on
commission basis in order to send customers to the appellant
herein who was having a shop in an interior location from
where he does polishing and cleaning work of silver items and
for that purpose only he was allowed to sit in the suit
premises.
10) During examination, it has been admitted by the owner
that the first and only rent was received on 26.02.2002 for the
period 01.02.2001 to 31.12.2001 from the tenant. It is evident
from the record that a legal notice dated 10.05.2002 was
served upon the appellant herein that he is in arrears of rent
from 01.01.2002. Though the appellant herein-the original
8
tenant has admitted the relationship of landlord and tenant
between the parties but has denied any sub-letting to any
other person. The tenant has his small workshop nearby the
suit shop where he personally does the work in addition to
attending the customers in the premises in question. It is the
case of the appellant that Respondent No. 2 looks after the
customers of the appellant herein in his absence but the fact
of being paid by way of commission or salary has not been
proved as no evidence have been brought to substantiate this
claim. It is Respondent No. 2 whose duty is to open and close
the shop in his absence and to hand over the keys to the
appellant herein who was residing along with his family on the
first floor of the aforesaid property at the relevant time.
11) Respondent No. 1-the original owner has placed on
record two business cards which do not contain the name of
the appellant herein at all, showing the same address as that
of the property in question in order to prove that Respondent
No. 2 was doing independent business of diamond jewellery,
gold and stones. Out of two cards, one card is in the name of
9
Respondent No. 2 with the printing “Ashima Jewellery,
Diamond Jewellery, Gold & Stones”. Respondent No. 2 has
admitted by way of filing an affidavit that he was doing the
business of manufacturing of diamond jewellery, silver articles
and also silver fancy articles. He has also admitted the
printing of the cards placed on record for the purpose of
placing orders at the said address. He admitted to have doing
business in the name and style of M/s Ashima Jewellary but
denied the claim that earlier he was doing the business in the
name and style of M/s R.R. Jewellers. It was further admitted
that when he started to sit in the suit property, a bill board in
the name of M/s R.R. Jewellers was fixed in the suit property
in the year 1996.
12) A bare perusal of the visiting card of M/s Ashima
Jewellery having the name of Respondent No. 2 clearly proves
that the sub-tenant was neither an employee nor was looking
after the customers of the appellant herein in his absence but
he was carrying on his personal business under such name.
There is no point in denying the fact that why a
1
tenant will allow a person, who is working under him, to print
visiting cards in his (sub-tenant) name for the property in
question.
13) Further, the other visiting card is having the name of
“M/s R.R. Jewellers”. The alleged sub-tenant has denied the
claim in the affidavit filed before the courts below that earlier
he was doing the business in the name and style of M/s R.R.
Jewellers. The respondent-owner has brought on record the
list of subscribers issued by the Delhi Sanchaar Sewa (Pvt.)
Ltd. wherein for R.R. Jewellers, the address mentioned is that
of the suit property and the phone number is exactly the same
as mentioned on the business card of M/s Aashima Jewellery”
i.e., ‘3901361’. Respondent No. 2 has admitted the fact of
doing business in the name of M/s Aashima Jewellery” which
is also evident from the business card used by him having the
address of the suit property and the telephone number
‘3901361’ whereas he denied to have worked under the name
and style of M/s R.R. Jewellers but the very fact is falsified by
the evidence in the form of subscribers list of Delhi Sanchaar
11
Sewa wherein the same telephone number, i.e., ‘3901361’ has
been given. Meaning thereby, Respondent No. 2 was doing
business in the suit premises independently of the appellant
herein.
14) Undoubtedly, the initial burden to prove that the
sub-tenant is in exclusive possession of the property is on the
owner, however, the onus to prove the exclusive possession of
the sub tenant is that of preponderance of probability only and
he has to prove the same prima facie only and if he succeeds
then the burden to rebut the same lies on the tenant.
15) In this regard, it is appropriate to quote a decision of this
Court in Associated Hotels of India Ltd., Delhi vs. S.B.
Sardar Ranjit Singh AIR 1968 SC 933 wherein it was held
that when eviction is sought on the ground of sub-letting, the
onus to prove sub-letting is on the landlord. If the landlord
prima-facie shows that the occupant who was in exclusive
possession of the premises let out for valuable consideration,
it would then be for the tenant to rebut the evidence.
1
16) Again, in Kala and Anr. vs. Madho Parshad Vaidya,
(1998) 6 SCC 573, this Court reiterated the very same
principle. It was observed that the burden of proof of
sub-letting is on the landlord but once he establishes parting
of possession by the tenant to third party, the onus would
shift on the tenant to explain his possession. If he is unable to
discharge that onus, it is permissible for the court to raise an
inference that such possession was for monetary
consideration.
17) In Vaishakhi Ram & Ors. vs. Sanjeev Kumar
Bhatiani (2008) 14 SCC 356, it was held as under:-
“21. It is well settled that the burden of proving sub-letting
is on the landlord but if the landlord proves that the
sub-tenant is in exclusive possession of the suit premises,
then the onus is shifted to the tenant to prove that it was not
a case of sub-letting. Reliance can be placed on the decision
of this Court in Joginder Singh Sodhi v. Amar Kaur.
Therefore, we are in full agreement with the High Court as
well as the courts below that since Appellants 2 to 4 had
been in exclusive possession of the suit shop and Appellant
1 could not prove that it was not a case of sub-letting, the
suit shop had been sub-let by Appellant 1 in favour of
Appellants 2 to 4. Therefore, no interference can be made
with the findings arrived at by the High Court as well as the
courts below on the question of sub-letting.”
1
18) Sub-tenancy or sub-letting comes into existence when
the tenant gives up possession of the tenanted
accommodation, wholly or in part, and puts another person in
exclusive possession thereof. This arrangement comes about
obviously under a mutual agreement or understanding
between the tenant and the person to whom the possession is
so delivered. In this process, the landlord is kept out of the
scene. Rather, the scene is enacted behind the back of the
landlord, concealing the overt acts and transferring possession
clandestinely to a person who is an utter stranger to the
landlord, in the sense that the landlord had not let out the
premises to that person nor had he allowed or consented to
his entering into possession of that person, instead of the
tenant, which ultimately reveals to the landlord that the
tenant to whom the property was let out has put some other
person in possession of that property. In such a situation, it
would be difficult for the landlord to prove, by direct evidence,
the contract or agreement or understanding between the
tenant and the sub-tenant. It would also be difficult for the
landlord to prove, by direct evidence, that the person to whom
1
the property had been sub-let had paid monetary
consideration to the tenant. Payment of rent, undoubtedly, is
an essential element of lease or sub-lease. It may be paid in
cash or in kind or may have been paid or promised to be paid.
It may have been paid in lump sum in advance covering the
period for which the premises is let out or sub-let or it may
have been paid or promised to be paid periodically. Since
payment of rent or monetary consideration may have been
made secretly, the law does not require such payment to be
proved by affirmative evidence and the court is permitted to
draw its own inference upon the facts of the case.
19) In the present facts and circumstances of the case, we
are of the opinion that the original owner-respondent No. 1
herein has proved beyond doubt that the property is in
exclusive possession of the sub-tenant and the appellant
herein has not been able to deny the claim of sub-tenancy in
favour of Respondent No. 2. The absence of evidence and
failure to discharge the onus lay heavy on appellant and there
could be no presumption other than that the suit premises
1
had been sublet and parted with possession by the appellant
herein to the Respondent No. 2.
Conclusion:-
20) In view of the foregoing discussion, we are of the
considered opinion that the High Court was right in setting
aside the orders passed by the lower courts. We do not intend
to interfere in the order passed by the learned single Judge of
the High Court. There is no merit in this appeal and the
appeal is, therefore, dismissed with no order as to costs.
...…………….………………………J.
(R.K. AGRAWAL)
.…....…………………………………J.
(ASHOK BHUSHAN)
NEW DELHI;
AUGUST 30, 2017.
1

LAW FOR ALL

LawforAll

advocatemmmohan

Just for legal information but not form as legal opinion

Friday, September 8, 2017

Order 7 Rule 11 (d) of the Code - Suit for Declaration that Lokadalat award was obtained by playing fraud - not maintainable and as such liable the suit is liable to rejected - Writ is the only remedy

Saturday, September 2, 2017

Wednesday, August 30, 2017