whether the trial court which had admitted the agreements to sell in evidence could have exercised its discretion in imposing penalty at the rate of 2 times of deficient amount of stamp duty or it was obligatory for the trial court to impose the penalty at the rate of 10 times.? Suit for specific performance of contract. - The Trial court passed an order , by which agreements to sell in question were admitted in evidence and marked for the plaintiffs on payment of deficit duty and penalty. Deficit duty in both the suits was determined as Rs.12013/­ and Rs.20320/­ respectively and the penalty imposed was double of the deficit duty in both the suits. - The High Court directed the courts below to levy the penalty at 10 times of the deficit duty as per judgment of Karnataka High Court in ILR 2013 KAR 2099. - Apex court held that The above view of the Karnataka High Court that there is no discretion vested with the authority impounding the document in the matter of collecting duty under Section 33, is correct. The word used in the said proviso is 'shall'. Sections 33 and 34 clearly indicate that penalty imposed has to be 10 times.- but the Learned trial court while imposing penalty at the rate of two times has given following reason: "The plaintiffs are stated to be agriculture and are residing at Sherewad village. The said fact is not denied by the defendants therein. It appears that the agreements were prepared by local villagers who are not experienced in the documentation. Looking to the status of the plaintiffs, their standard of having qualification of the document writers. I am of the opinion that the ratio laid down by our Hon'ble High Court in ILR 2011 KAR 4719 can be applied to the present facts and circumstances levying 10 times penalty in respect of said agreement will be harsh on the plaintiffs. Therefore I am of the opinion that levying double the amount of deficit duty as penalty will meet the ends of justice.”-Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion under Section 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times. -asking the appellant to deposit 10 times of penalty and thereafter to invoke the jurisdiction of Deputy Collector under Section 38 to refund penalty shall be a proceeding again taking considerable time. In the facts of the present case, we are of the view that ends of justice be served in closing the matter by confirming the payment of deficit duty with the double penalty as imposed by the trial court which shall obviate the proceeding of approaching the Deputy Commissioner for reduction of penalty under Section 38, which in the facts of the present case and for the reasons noted by the trial court was a relevant consideration for refund/reduction of the penalty.

whether   the   trial   court   which   had admitted the agreements to sell in evidence could have
exercised   its   discretion   in   imposing   penalty   at   the rate of 2 times of deficient amount of stamp duty or it was   obligatory   for   the   trial   court   to   impose   the penalty at the rate of 10 times.?
Suit  for  specific  performance  of contract. - The Trial court passed an order ,  by which agreements to sell in question were admitted in evidence and marked for   the   plaintiffs   on payment   of   deficit   duty   and   penalty.   Deficit   duty   in both   the   suits   was   determined   as   Rs.12013/­   and Rs.20320/­   respectively   and   the   penalty   imposed   was double of the deficit duty in both the suits. -
 The High Court directed the courts   below   to   levy   the   penalty   at   10   times   of   the deficit duty as per judgment of Karnataka High Court in ILR   2013   KAR   2099. -
Apex court held that The   above   view   of   the   Karnataka   High   Court   that there   is   no   discretion   vested   with   the   authority impounding   the   document   in   the   matter   of   collecting duty under Section 33, is correct. The word used in the
said   proviso   is   'shall'.   Sections   33   and   34   clearly indicate that penalty imposed has to be 10 times.- but the Learned trial court while imposing penalty at the rate of two times has given following reason: "The plaintiffs  are stated to be agriculture and are residing at   Sherewad   village.   The   said   fact   is   not denied by the defendants therein. It appears that   the   agreements   were   prepared   by   local villagers   who   are   not   experienced   in   the documentation.   Looking   to   the   status   of   the plaintiffs,   their   standard   of   having qualification of the document writers. I am of the opinion that the ratio laid down by our Hon'ble High Court in ILR 2011 KAR 4719 can be
applied to the present facts and circumstances levying   10   times   penalty   in   respect   of   said
agreement   will   be   harsh   on   the   plaintiffs. Therefore   I   am   of   the   opinion   that   levying
double the amount of deficit duty as penalty will meet the ends of justice.”-Although the procedural part which provides   for   impounding   and   realisation   of   duty   and penalty does not give any discretion under Section 33 for imposing any lesser penalty than 10 times, however, when   provision   of   Section   38   is   read,   the   discretion given to Deputy Commissioner to refund the penalty is
akin to exercise of the jurisdiction under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times. -asking the   appellant   to   deposit   10   times   of   penalty   and thereafter   to   invoke   the   jurisdiction   of   Deputy Collector under Section 38 to refund penalty shall be a proceeding again taking considerable time. In the facts of the present case, we are of the view that ends of justice be served in closing the matter by confirming the payment of deficit duty with the double penalty as imposed   by   the   trial   court   which   shall   obviate   the
proceeding   of   approaching   the   Deputy   Commissioner   for reduction   of   penalty   under   Section   38,   which   in   the facts of the present case and for the reasons noted by the   trial   court   was   a   relevant   consideration   for refund/reduction of the penalty. 

Hon'ble Mr. Justice Ashok Bhushan 
1
REPORTABLE
  IN     THE     SUPREME     COURT   OF INDIA
    CIVIL     APPELLATE JURISDICTION
    CIVIL     APPEAL     NO.11932    Of 2018
GANGAPPA AND ANR.       ...APPELLANT(S)
VERSUS
FAKKIRAPPA    ...RESPONDENT(S)
J U D G M E N T
    ASHOK BHUSHAN,J.
This appeal has been filed against the judgment of
Karnataka   High   Court,   Dharwad   Bench   dated   17.07.2014
disposing of the writ petition filed by the respondent
herein.
2. Brief facts of the case necessary to be noticed for
deciding this appeal are:
The   appellants/plaintiffs   entered   into   agreements
to sell with respondent­defendant dated 12.04.2005 and
16.05.2006 and earnest money of Rs.1,40,000/­ was paid.
The   appellants   filed   Suit   No.863   of   2008   and   Suit
No.864   of   2008   praying   for   specific   performance   of
2
contract.   Another   suit   filed   by   the   sister   of   the
defendant   being   O.S.No.327   of   2008   was   also   clubbed.
The Principal Civil Judge impounded agreements to sell
filed by the plaintiffs in Suit Nos.863 and 864 of 2008
with direction to the plaintiff to pay deficit duty and
penalty   vide   order   dated   27.09.2010.   Plaintiffs
challenged   the   order   by   means   of   Writ   Petition
Nos.69264­65/2010   and   69263/2010   which     were   disposed
of by the High Court vide its judgment dated 14.03.2013
directing   the   Principal   Civil   Judge   to   permit   the
plaintiffs   to   place   written   submissions.   After   the
order   of   the   High   Court,   the   Principal   Civil   Judge
passed an order dated 22.04.2013 by which agreements to
sell in question were admitted in evidence and marked
for   the   plaintiffs   in  O.S.Nos.863  and  864  of   2008  on
payment   of   deficit   duty   and   penalty.   Deficit   duty   in
both   the   suits   was   determined   as   Rs.12013/­   and
Rs.20320/­   respectively   and   the   penalty   imposed   was
double of the deficit duty in both the suits.
3. Aggrieved   by   the   judgment   of   the   Principal   Civil
Judge,   respondent­defendant   filed   a   writ   petition   in
3
the   High   Court.   The   High   Court   disposed   of   the   writ
petition   relying   on   a   Division   Bench   judgment   of
Karnataka High Court in  Digambar Warty and others vs.
District   Registrar,   Bangalore   Urban   District   and
another, ILR 2013 KAR 2099. The High Court directed the
courts   below   to   levy   the   penalty   at   10   times   of   the
deficit duty as per judgment of Karnataka High Court in
ILR   2013   KAR   2099.  Aggrieved   by   the   judgment   of   the
High   Court   this   appeal   has   been   filed   by   the
appellants.
4. Learned counsel for the appellant submits that the
High Court committed an error in directing payment of
penalty   at   10   times.   The   trial   court   has   rightly
directed for payment of deficit duty and penalty at the
rate of 2 times which was a just and proper order. It
is submitted by the learned counsel for the appellant
that when the Deputy Commissioner can reduce   levy of
penalty not exceeding 10 times of the amount of duty,
the   trial   court   while   determining   the   deficiency   and
penalty   shall   also   have   such   discretion.   The   trial
court has rightly exercised the discretion by imposing
4
the penalty of two times.
5. Learned   counsel   appearing   for   the   respondent
submits   that   the   instruments   waere   not   duly   stamped.
While   admitting   the   insufficiently   stamped   documents
the   trial   court   has   no   discretion   while   levying   the
penalty. The statute i.e. Section 34 of the Karnataka
Stamp   Act,   1957   mandates   penalty   at   the   rate   of   10
times.   The   Division   Bench   of   the   High   Court   in
Digambar   Warty   and   others   (supra)  has   correctly
interpreted Section 34 while holding that Court has no
discretion   to   reduce   the   penalty   from   10   times.   The
High   Court   has   rightly   followed   the   above   Division
Bench Judgment.
6. We   have   considered   submissions   of   the   learned
counsel for the parties and perused the records.
7. The issue which needs to be answered in the present
case   is   as   to   whether   the   trial   court   which   had
admitted the agreements to sell in evidence could have
exercised   its   discretion   in   imposing   penalty   at   the
rate of 2 times of deficient amount of stamp duty or it
was   obligatory   for   the   trial   court   to   impose   the
5
penalty at the rate of 10 times.
8. Before   we   proceed   to   consider   the   respective
submissions   of   the   parties,   it   is   relevant   to   notice
statutory provisions of the Karnataka Stamp Act, 1957.
Section   33   requires   every   person   having   by   law   or
consent   of   parties   authority   to   receive   evidence,   is
obliged   to   impound   any   instrument   which   according   to
him is not duly stamped. Section 33 sub­section (1) is
as follows:
“33.   Examination   and   impounding   of
instruments.­ (1) Every person having by law
or   consent   of   parties   authority   to   receive
evidence,   and   every   person   in   charge   of   a
public   office,   except   an   officer   of   police,
before whom any instrument, chargeable in his
opinion,   with   duty,   is   produced   or   comes   in
the performance of his functions, shall, if it
appears   to   him   that   such   instrument   is   not
duly stamped, impound the same.”
9. Section   34   provides   that   instruments   not   duly
stamped are inadmissible  in evidence. Section 34  subsection (1) which is relevant for the present case is
as follows:
“34. Instruments not duly stamped inadmissible
in   evidence,   etc.­   No   instrument   chargeable
with   duty   shall   be   admitted   in   evidence   for
any   purpose   by   any   person   having   by   law   or
6
consent   of   parties   authority   to   receive
evidence, or shall be acted upon, registered
or authenticated by any such person or by any
public officer, unless such instrument is duly
stamped:
Provided that,­
(a)   nothing   herein   contained   shall   be
deemed   to   require   any   magistrate   or   Judge
of a Criminal Court to examine or impound,
if   he   does   not   think   fit   so   to   do,   any
instrument coming before him in the course
of   any   proceeding   other   than   a   proceeding
under Chapter XII or Chapter XXXVI of the
Code of Criminal Procedure, 1898;”
10. Section   38   empowers   the   Deputy   Commissioner   to
refund   penalty   paid   under   sub­section   (1)   of   Section
37.   Section   39   relates   to   the   Deputy   Commissioner's
power   to   stamp   instruments   impounded.   Section   38   and
Section 39(1) are as follows:
“38.   Deputy   Commissioner]1's   power   to
refund penalty paid under sub­section (1) of
section 37.­ (1) When a copy of an instrument
is sent to the Deputy Commissioner under subsection   (1)   of   section   37,   he   may,   if   he
thinks fit, refund any portion of the penalty
in excess of five rupees which has been paid
in respect of such instrument.
(2)   When   such   instrument   has   been   impounded
only   because   it   has   been   written   in
contravention of section 13 or section 14, the
1[Deputy  Commissioner]1  may  refund  the  whole
penalty so paid.
7
39.   Deputy   Commissioner's   power   to   stamp
instruments   impounded.­   (1)   When   the   Deputy
Commissioner]1   impounds   any   instrument   under
section 33, or receives any instrument sent to
him under sub­section (2) of section 37, not
being an instrument chargeable with a duty not
exceeding   fifteen   naye   paise   only   or   a
mortgage   of   crop   Article   35   (a)   of   the
Schedule] chargeable under clause (a) or (b)
of section 3 with a duty of twenty­five naye
paise, he shall adopt the following procedure:
(a)   if   he   is   of   opinion   that   such
instrument   is   duly   stamped,   or   is   not
chargeable   with   duty,   he   shall   certify   by
endorsement   thereon   that   it   is   duly
stamped, or that it is not so chargeable,
as the case may be;
(b)   if   he   is   of   opinion   that   such
instrument   is   chargeable   with   duty   and   is
not   duly   stamped   he   shall   require   the
payment   of   the   proper   duty   or   the   amount
required to make up the same, together with
a penalty of five rupees; or if he thinks
fit; an amount not exceeding ten times the
amount   of   the   proper   duty   or   of   the
deficient   portion   thereof,   whether   such
amount   exceeds   or   falls   short   of   five
rupees:
Provided   that,   when   such   instrument   has
been   impounded   only   because   it   has   been
written   in   contravention   of   section   13   or
section 14, the Deputy Commissioner may, if
he   thinks   fit,   remit   the   whole   penalty
prescribed by this section.”
11. Section   34   proviso   provides   for   admitting   in
8
evidence an instrument not duly stamped are on payment
of   duty   and   penalty.   With   regard   to   penalty   statute
provides:
"in the case of an instrument insufficiently
stamped,   of   the   amount   required   to   make   up
such   duty,   together   with   a   penalty   of   five
rupees, or, when ten times the amount of the
proper   duty   or   deficient   portion   thereof
exceeds   five   rupees,   of   a   sum   equal   to   ten
times such duty or portion;”
12. The statute envisages that when the 10 times of the
amount of the proper duty or deficient portion thereof
exceeds five rupees, a sum equal to 10 times of such
duty or portion is the penalty.
13. The language of Section 34 provides a flat rate of
penalty   when   the   amount   of   proper   duty   exceeds   five
rupees i.e. 10 times of such duty or portion. There is
a   clear   Contrast   in   the   language   of   Section   34   and
Section 39. Section 39  sub­section (1)  sub­clause (b)
is extracted for ready reference:
“39(1)(b)   if   he   is   of   opinion   that   such
instrument   is   chargeable   with   duty   and   is
not   duly   stamped   he   shall   require   the
payment   of   the   proper   duty   or   the   amount
required to make up the same, together with
a penalty of five rupees; or if he thinks
fit; an amount not exceeding ten times the
9
amount   of   the   proper   duty   or   of   the
deficient   portion   thereof,   whether   such
amount   exceeds   or   falls   short   of   five
rupees:”
14. The   above   provision   indicated   that   if   the   Deputy
Commissioner   is   of   opinion   that   such   instrument   is
chargeable   with   duty   and   is   not   duly   stamped   shall
require the payment of the proper duty with a penalty
of five rupees. The   latter   part   of   the   provision
states “or if he thinks fit an amount not exceeding ten
times the amount of the proper duty or of the deficient
portion thereof, whether  such amount  exceeds or falls
short   of   five   rupees”.   Thus,   discretion   has   been
conferred on the Deputy Commissioner which is apparent
from the words “if he thinks fit”. Deputy Commissioner
has   discretion   of   imposing   penalty   of   10   times   or
lesser of the amount of duty or portion thereof. There
is   clear   contradistinction   between   the   power   under
Section   33   and   39.   The   object   and   purpose   for   such
contradistinction in the provision and power is not far
to seek. Section 33 applies to every person having by
law   or   consent   of   parties   authority   to   receive
10
evidence,   and   every   person   in­charge   of   a   public
office. Thus, Section 33 covers a host of authorities,
persons   before   whom   instruments   are   filed.   The
legislative   scheme   does   not   indicate   any   distinction
between   a   court   receiving   an   insufficiently   stamped
instrument in evidence and other authorities. All have
to impose penalty of 10 times of the duty or deficit
portion, if it exceeds rupees five. This provision is
for purpose of maintaining a uniformity in imposing a
fixed   penalty   of   10   times   without   adverting   to   any
adjudicatory process regarding quantifying the quantum
of   penalty.     The   statute   gives   discretion   to   Deputy
Commissioner who is the authority envisaged by the Act
in­charge of the revenue administration of a District.
The   definition     of   Deputy   Commissioner   is   given   in
Section 2(dd) which is to the following effect:
“2(dd)  ‘Deputy  Commissioner’  means  the  Chief
Officer   in   charge   of   the   revenue
administration of a district and includes in
respect   of   such   provisions   of   this   Act   or
rules   made   thereunder   such   officer   in   such
area   as   the   State   Government   may   by
notification in the Official Gazette specify;”
15. The amount of duty and penalty is required to be
11
sent  to Deputy Commissioner under Section 37. Section
37 is quoted below:
“37. Instruments impounded how dealt with.­  
(1)   When   the   person   impounding   an
instrument   under   section   33   has   by   law   or
consent   of   parties   authority   to   receive
evidence   and   admits   such   instrument   in
evidence upon payment of a penalty as provided
by   section   34   or   of   duty   as   provided   by
section   36,   he   shall   send   to   the   Deputy
Commissioner   an   authenticated   copy   of   such
instrument,   together   with   a   certificate   in
writing,   stating   the   amount   of   duty   and
penalty levied in respect thereof, and shall
send such amount to the Deputy Commissioner or
to   such   person   as   he   may   appoint   in   this
behalf.
(2)   In   every   other   case,   the   person   so
impounding   an   instrument   shall   send   it   in
original to the Deputy Commissioner. 
16. Deputy Commissioner under Section 38 is empowered
to refund any portion of the penalty in excess of five
rupees   which   has   been   paid   in   respect   of   such
instrument. Section 38 sub­section  (1) again uses the
expression   “if   he   thinks   fit”.   Thus,   in   cases   where
penalty   of   10   times   has   been   imposed,   Deputy
Commissioner has discretion to direct the refund of the
penalty   in   facts   of   a   particular   case.   The   power   to
refund the  penalty under Section  38 clearly indicates
12
that   legislature   have   never   contemplated   that   in   all
cases   penalty   to   the   extent   of   10   times   should   be
ultimately realised. Although the procedural part which
provides   for   impounding   and   realisation   of   duty   and
penalty does not give any discretion under Section 33
for imposing any lesser penalty than 10 times, however,
when   provision   of   Section   38   is   read,   the   discretion
given to Deputy Commissioner to refund the penalty is
akin to exercise of the jurisdiction under Section 39
where while determining the penalty he can impose the
penalty lesser than 10 times. 
17. In  the    Division  Bench  judgment of  the  Karnataka
High Court relied by the High Court in  Digambar Warty
and   others   (supra),  after   noticing   the   provisions   of
Section   33   and   34   the   Division   Bench   laid   down
following in paragraph 36:
“36.   This   provision   refers   to   the   power
of the Civil Court which admits the documents
in   evidence.   The   main   Section   is   couched   in
the   negative.   Unless   the   instrument   is   duly
stamped, it is inadmissible in evidence. As an
exception, the proviso provides for payment of
duty and penalty. In the matter of collection
of   duty   and   penalty   no   discretion   is   vested
with   the   authority   admitting   such   an
instrument   in   evidence.   The   duty   payable   on
13
the   instrument   is   prescribed   by   statute.
Therefore,   there   is   no   question   of   any
discretion   being   vested   with   the   authority
impounding   the   document   in   the   matter   of
collecting the duty. Once the duty payable is
ascertained from the statute, no discretion is
vested   with   the   authority   admitting   the
document   in   evidence,   in   the   matter   of
imposition of duty and penalty. The word used
in   the   said   proviso   is   'shall'.   It   is
mandatory. However, Section 35 makes it clear,
that where an instrument has been admitted in
evidence without there being objection at the
time   of   admitting   the   said   instrument   in
evidence,   then   such   admission   shall   not,
except as provided in Section 58, be called in
question   at   any   stage   of   the   same   suit   or
proceeding on the ground that the instrument
has   not   been   duly   stamped.   Section   58   deals
with   the   power   of   the   Appellate   Court   to
review   the   finding   recorded   by   the   original
Court under Section 34 of the Act, either suo
motu   or   on   the   application   of   the   Deputy
Commissioner. Section 36 of the Act deals with
admission   of   improperly   stamped   instrument.
The State Government may make rules providing
that,   where   an   instrument   bears   a   stamp   of
sufficient amount but of improper description,
it may, on payment of the duty with which the
same   is   chargeable,   be   certified   to   be   duly
stamped, and any instrument so certified shall
then be deemed to have been duly stamped as
from the date of its execution.”
18. The   above   view   of   the   Karnataka   High   Court   that
there   is   no   discretion   vested   with   the   authority
impounding   the   document   in   the   matter   of   collecting
14
duty under Section 33, is correct. The word used in the
said   proviso   is   'shall'.   Sections   33   and   34   clearly
indicate that penalty imposed has to be 10 times. The
Division Bench of the Karnataka High Court in  Digambar
Warty   and   others   (supra)  has   rightly   interpreted   the
provisions of Sections 33 and 34 of the Act. We, thus,
are   of   the   view   that   the   High   Court   in   the   impugned
judgment   did   not   commit   any   error   in   relying   on   the
judgment   of   the   Division   Bench   in  Digambar   Warty   and
others (supra).  We thus has to uphold   the above view
expressed in the impugned  judgment.
19. There is one more aspect which needs to be noted in
the   present   case.   We   have   seen   that   even   though   10
times  penalty  has  to   be   collected  and  imposed  by   the
person   impounding   the   document   under   Section   37,
Section 38 empowers the Deputy Collector to refund the
duty. Learned trial court while imposing penalty at the
rate of two times has given following reason:
"The plaintiffs of O.S. No.863/08 and 864/08
are stated to be agriculture and are residing
at   Sherewad   village.   The   said   fact   is   not
denied by the defendants therein. It appears
that   the   agreements   were   prepared   by   local
villagers   who   are   not   experienced   in   the
15
documentation.   Looking   to   the   status   of   the
plaintiffs,   their   standard   of   having
qualification of the document writers. I am of
the opinion that the ratio laid down by our
Hon'ble High Court in ILR 2011 KAR 4719 can be
applied to the present facts and circumstances
levying   10   times   penalty   in   respect   of   said
agreement   will   be   harsh   on   the   plaintiffs.
Therefore   I   am   of   the   opinion   that   levying
double the amount of deficit duty as penalty
will meet the ends of justice.”
20. The order of the trial court was passed as early as
on 22.04.2013 that is more than five years ago. In view
of impounding the documents and imposition of penalty,
we are sure that the suit must not have been proceeded
further, and it must be at the threshold stage; asking
the   appellant   to   deposit   10   times   of   penalty   and
thereafter   to   invoke   the   jurisdiction   of   Deputy
Collector under Section 38 to refund penalty shall be a
proceeding again taking considerable time. In the facts
of the present case, we are of the view that ends of
justice be served in closing the matter by confirming
the payment of deficit duty with the double penalty as
imposed   by   the   trial   court   which   shall   obviate   the
proceeding   of   approaching   the   Deputy   Commissioner   for
reduction   of   penalty   under   Section   38,   which   in   the
16
facts of the present case and for the reasons noted by
the   trial   court   was   a   relevant   consideration   for
refund/reduction of the penalty. 
21. In   view   of   the   foregoing   discussion,   we   are,
therefore,   of   the   view   that   the   High   Court   has
correctly interpreted the provisions of Section 33 in
the   impugned   judgment   but   instead   of   prolonging   the
matter permitting the appellant to deposit 10 times of
penalty and thereafter to take recourse under Section
38,   we   in   the   facts   of   the   present   case   close   the
proceedings regarding penalty on the agreements to sell
by   approving   the   direction   of   the   trial   court   for
payment of entire deficit duty and double the penalty.
22. The appeal is disposed of accordingly.
..........................J.
    ( ASHOK BHUSHAN )
..........................J.
NEW DELHI, ( AJAY RASTOGI )
December 14, 2018.

Procurement of 36 Rafale Fighter Jets for the Indian Airforce. - case of commercial favouritism to any party by the Indian Government - 2001, an in­principle approval was granted for procurement of 126 fighter­jets -Defence Procurement Procedure (“DPP”) was formulated for the first time in the year 2002.- A robust ‘offset clause’ was included in the DPP in the year 2005 so as to promote Indigenisation and to that effect Services Qualitative Requirements (“SQRs”) were prepared in June 2006.-The bidding process commenced in August 2007. Six (06) vendors submitted proposals in April,2008- The commercial bids were opened in November, 2011 and M/s Dassault Aviation was placed as the L­I sometime in January 2012. - Negotiations commenced thereafter and continued but without any final result. In the meantime, there was a change of political dispensation at the centre sometime in the middle of the year 2014.- sometime in the month of September, 2018 when certain newspapers reported a statement claimed to have been made by the former President of France, Francois Hollande, to the effect that the French Government were left with no choice in the matter of selection of Indian Offset Partners and the Reliance Group was the name suggested by the Government of India. This seems to have triggered of the writ petitions under consideration.- What is sought for in the said writ petition is registration of an FIR under relevant provisions of the Indian Penal Code, 1860 and a Court Monitored Investigation. The further relief of quashing the Inter­ Governmental Agreement of 2016 for purchase of 36 Rafale Jets has also been prayed for. - Apex court held that It is our considered opinion/view that the extent of permissible judicial review in matters of contracts, procurement, etc. would vary with the subject matter of the contract and there cannot be any uniform standard or depth of judicial review which could be understood as an across the board principle to apply to all cases of award of work or procurement of goods/material. The scrutiny of the challenges before us, therefore, will have to be made keeping in mind the confines of national security, the subject of the procurement being crucial to the nation’s sovereignty.-in none of the writ petitions the suitability of the fighter jets and its utility to the Indian Airforce had been called into question. Rather what was doubted by the petitioners is the bona fides of the decision­ making process and the price/cost of the equipment at which it was proposed to be acquired. -We have examined closely the price details and comparison of the prices of the basic aircraft along with escalation costs as under the original RFP as well as under the IGA. We have also gone through the explanatory note on the costing, item wise. Suffice it to say that as per the price details, the official respondents claim there is a commercial advantage in the purchase of 36 Rafale aircrafts. The official respondents have claimed that there are certain better terms in IGA qua the maintenance and weapon package. It is certainly not the job of this Court to carry out a comparison of the pricing details in matters like the present. We say no more as the material has to be kept in a confidential domain - Apex court held that It cannot be lost sight of, that these are contracts of defence procurement which should be subject to a different degree and depth of judicial review. Broadly, the processes have been followed. The need for the aircrafts is not in doubt. The quality of the aircraft is not in question. It is also a fact that the long negotiations for procurement of 126 MMRCAs have not produced any result, and merely conjecturing that the initial RFP could have resulted in a contract is of no use. The hard fact is that not only was the contract not coming forth but the negotiations had come practically to an end, resulting in a recall of the RFP. We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircrafts in place of 126. We cannot possibly compel the Government to go in for purchase of 126 aircraft.This is despite the fact that even before the withdrawal of RFP, an announcement came to be made in April 2015 about the decision to go in only for 36 aircrafts. Our country cannot afford to be unprepared/underprepared in a situation where our adversaries are stated to have acquired not only 4th Generation, but even 5th Generation Aircrafts, of which, we have none. It will not be correct for the Court to sit as an appellate authority to scrutinize each aspect of the process of acquisition.- mere press interviews or suggestions cannot form the basis for judicial review by this Court, especially when there is categorical denial of the statements made in the Press, by both the sides. - We do not find any substantial material on record to show that this is a case of commercial favouritism to any party by the Indian Government, as the option to choose the IOP does not rest with the Indian Government.

Hon'ble Mr. Justice Ranjan Gogoi
Bench :- HON'BLE THE CHIEF JUSTICE, HON'BLE MR. JUSTICE SANJAY KISHAN KAUL, HON'BLE MR. JUSTICE K.M. JOSEPH
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL/CRIMINAL ORIGINAL JURISDICTION
WRIT PETITION [CRIMINAL] NO.225 OF 2018
MANOHAR LAL SHARMA …. PETITIONER(S)
VERSUS
NARENDRA DAMODARDAS MODI
& ORS. … RESPONDENTS(S)
WITH
W.P.(C) NO.1205/2018
W.P. (CRL) NO.297/2018
W.P. (CRL) NO.298/2018
J U D G M E N T
RANJAN GOGOI, CJI
1. The issues arising in this group of writ petitions, filed
as Public Interest Litigations, relate to procurement of 36 Rafale
Fighter   Jets   for   the   Indian   Airforce.     The   procurement   in
question, which has been sought to be challenged, has its origins
2
in   the   post­Kargil   experience   that   saw   a   renewed   attempt   to
advance the strategic needs of the armed forces of the country. 
2. As far back as in the month of June of the year 2001,
an   in­principle  approval  was   granted   for  procurement   of  126
fighter­jets   to   augment   the   strength   of   the   Indian   Airforce.
Simultaneously,   a   more   transparent   Defence   Procurement
Procedure (“DPP”) was formulated for the first time in the year
2002.   A robust ‘offset clause’ was included in the DPP in the
year 2005 so as to promote Indigenisation and to that effect
Services   Qualitative   Requirements   (“SQRs”)   were   prepared   in
June 2006.  On 29th June 2007 the Defence Acquisition Council
(“DAC”)   granted   the   “Acceptance   of   Necessity”   for   the
procurement of 126 Medium Multi Role Combat Aircrafts (for
short   “MMRCA”)     including   18   direct   fly­away   aircrafts
(equivalent to a single squadron) to be procured from the Original
Equipment   Manufacturer   (“OEM”)   with   the   remaining   108
aircrafts to be manufactured by Hindustan Aeronautics Limited
(for short “HAL”) under licence, to be delivered over a period of 11
years from the date of signing.  The bidding process commenced
in August 2007.  Six (06) vendors submitted proposals in April,
3
2008.     The   proposals   were   followed   by   technical   and   field
evaluations; a Staff Evaluation Report and a Technical Oversight
Committee Report.   All these were completed in the year 2011.
The commercial bids were opened in November, 2011 and M/s
Dassault   Aviation   (hereinafter   referred   to   as   “Dassault”)   was
placed   as   the   L­I   sometime   in   January   2012.     Negotiations
commenced   thereafter   and   continued   but   without   any   final
result.     In   the   meantime,   there   was   a   change   of   political
dispensation at the centre sometime in the middle of the year
2014. 
3. According   to   the   official   respondents   negotiation
continued.   A process of withdrawal of the Request for Proposal
in relation to the 126 MMRCA was initiated in March 2015.  On
10th April, 2015 an Indo­French joint statement, for acquisition of
36   Rafale   Jets   in   fly­away   condition   through   an   InterGovernmental Agreement (hereinafter referred to as “IGA”), was
issued and the same was duly approved by the DAC.     The
Request for Proposal for the 126 MMRCA was finally withdrawn
in June 2015.  Negotiations were carried out and the process was
completed after Inter­Ministerial Consultations with the approval
4
of the Cabinet Committee on Security (for short “CCS”).   The
contract along with Aircraft Package Supply Protocol; Weapons
Package   Supply   Protocol;   Technical   Arrangements   and   Offset
contracts   was   signed   in   respect   of   36   Rafale   Jets   on   23rd
September, 2016.  The aircrafts were scheduled to be delivered in
phased manner commencing from October 2019.
4. Things remained quiet until sometime in the month of
September, 2018 when certain newspapers reported a statement
claimed to have been made by the former President of France,
Francois Hollande, to the effect that the French Government were
left with no choice in the matter of selection of Indian Offset
Partners and the Reliance Group was the name suggested by the
Government of India.   This seems to have triggered of the writ
petitions under consideration.  
The first writ petition i.e. Writ Petition (Criminal) No.225 of
2018   has   been   filed   by   one   Shri   Manohar   Lal   Sharma,   a
practicing lawyer of this Court.  What is sought for in the said
writ petition is registration of an FIR under relevant provisions of
the   Indian   Penal   Code,   1860   and   a   Court   Monitored
Investigation.     The   further   relief   of   quashing   the   Inter­
5
Governmental Agreement of 2016 for purchase of 36 Rafale Jets
has also been prayed for.
Writ Petition (Civil) No.1205 of 2018 has been filed by
one Shri Vineet Dhanda claiming to be a public spirited Indian.
The petitioner states that he was inspired to file the writ petition
being agitated over the matter on the basis of the newspaper
articles/reports.
The third writ petition bearing Writ Petition (Criminal)
No.297   of   2018   has   been   filed   by   one   Shri   Sanjay   Singh,   a
Member of Parliament alleging illegality and non­transparency in
the   procurement   process.     The   said   writ   petition   seeks
investigation into the reasons for “cancellation of earlier deal” and
seeks a scrutiny of the Court into the alteration of pricing and,
above all, how a ‘novice’ company i.e. Reliance Defence came to
replace the HAL as the Offset partner.   Cancellation of InterGovernmental  Agreement  and  registration  of  an   FIR has   also
been prayed for.  
The   fourth   and   the   last   writ   petition   bearing   Writ
Petition   (Criminal)   No.298   of   2018   has   been   filed   by   Shri
6
Yashwant Sinha, Shri Arun Shourie and Shri Prashant Bhushan
claiming to be public spirited Indians. They are aggrieved by nonregistration of FIR by the CBI pursuant to a complaint made by
them on 4th  October, 2018 which complaint, according to the
petitioners, disclose a prima facie evidence of commission of a
cognizable   offence   under   the   provisions   of   the   Prevention   of
Corruption Act, 1988. The prayer, inter alia, made is for direction
for   registration   of   an   FIR   and   investigation   of   the   same   and
submitting periodic status reports to the Court.
5. Adequate   Military   strength   and   capability   to
discourage and withstand external aggression and to protect the
sovereignty and integrity of India, undoubtedly, is a matter of
utmost concern for the Nation.   The empowerment of defence
forces   with   adequate   technology   and   material   support   is,
therefore, a matter of vital importance.
6. Keeping in view the above, it would be appropriate, at
the   outset,   to   set   out   the   parameters   of   judicial   scrutiny   of
governmental decisions relating to defence procurement and to
indicate   whether   such   parameters   are   more   constricted   than
what the jurisprudence of judicial scrutiny of award of tenders
7
and   contracts,   that   has   emerged   till   date,   would   legitimately
permit.
7. Parameters   of   judicial   review   of   administrative
decisions  with   regard  to   award  of  tenders  and  contracts  has
really developed from the increased participation of the State in
commercial   and   economic   activity.     In      Jagdish   Mandal vs.
    State   of   Orissa   and   Ors.1
  this   Court,   conscious   of   the
limitations in commercial transactions, confined its scrutiny to
the   decision   making   process   and   on   the   parameters   of
unreasonableness and mala fides.  In fact, the Court held that it
was   not   to   exercise   the   power   of   judicial   review   even   if   a
procedural error is committed to the prejudice of the tenderer
since private interests cannot be protected while exercising such
judicial   review.     The   award   of   contract,   being   essentially   a
commercial transaction, has to be determined on the basis of
considerations that are relevant to such commercial decisions,
and this implies that terms subject to which tenders are invited
are not open to judicial scrutiny unless it is found that the same
have been tailor­made to benefit any particular tenderer or a
1 (2007) 14 SCC 517
8
class of tenderers. [See Maa Binda Express Carrier & Anr. Vs.
    North­East Frontier Railway & Ors.2
]
8. Various   Judicial   pronouncements   commencing   from
Tata Cellular vs.     Union of India3
, all emphasise the aspect that
scrutiny   should   be   limited   to   the   Wednesbury   Principle   of
Reasonableness and absence of mala fides or favouritism.
9. We also cannot lose sight of the tender in issue.  The
tender is not for construction of roads, bridges, etc.   It is a
defence tender for procurement of aircrafts.   The parameter of
scrutiny would give far more leeway to the Government, keeping
in mind the nature of the procurement itself.   This aspect was
even emphasized in Siemens Public Communication Networks
Pvt. Ltd. & Anr. Vs.     Union of India & Ors.4
.  The triple ground
on   which   such   judicial   scrutiny   is   permissible   has   been
consistently held to be “illegality”, “irrationality” and “procedural
impropriety”.
2 (2014) 3 SCC 760
3 (1994) 6 SCC 651
4 (2008) 16 SCC 215
9
10. In Reliance Airport Developers (P) Ltd.  vs. Airports
    Authority of India & Ors.5
 the policy of privatization of strategic
national   assets   qua   two   airports   came   under   scrutiny.     A
reference   was   made   in   the   said   case   to   the   commentary   by
Grahame Aldous and John Alder in their book ‘Applications for
Judicial Review, Law and Practice’:
“There   is   a   general   presumption
against ousting the jurisdiction of   the   courts,
so that statutory provisions which purport to
exclude   judicial   review   are   construed
restrictively. There are, however, certain areas
of   governmental   activity,   national   security
being the paradigm, which the courts regard
themselves   as   incompetent   to   investigate,
beyond an initial decision as to whether the
Government's claim is bona fide. In this kind of
non­justiciable   area   judicial   review   is   not
entirely excluded, but very limited. It has also
been said that powers conferred by the royal
prerogative   are   inherently   unreviewable   but
since the speeches of the House of Lords in
Council of Civil Service Unions Vs. Minister for
the Civil Service  [1985 AC 374: (1984) 3 WLR
1174   (HL):   (1984)   3   All   ER   935]   this   is
doubtful. Lords Diplock, Scaman and Roskili
(sic.)6
  appeared   to   agree   that   there   is   no
general   distinction   between   powers,   based
upon   whether   their   source   is   statutory   or
prerogative   but   that   judicial   review   can   be
limited by the subject­matter of a particular
power,   in   that   case   national   security.  Many
prerogative powers are in fact concerned with
sensitive,   non­justiciable   areas,   for   example,
5 (2006) 10 SCC 1
6 To be read as ‘Roskill’
10
foreign   affairs,   but   some   are   reviewable   in
principle, including where national security is
not involved. Another non­justiciable power is
the   Attorney   General's   prerogative   to   decide
whether   to   institute   legal   proceedings   on
behalf of the public interest."
[emphasis supplied]
11. It is our considered opinion/view that the extent of
permissible judicial review in matters of contracts, procurement,
etc. would vary with the subject matter of the contract and there
cannot be any uniform standard or depth of judicial review which
could be understood as an across the board principle to apply to
all cases of award of work or procurement of goods/material.
The scrutiny of the challenges before us, therefore, will have to be
made   keeping   in   mind   the   confines   of   national   security,   the
subject   of   the   procurement   being   crucial   to   the   nation’s
sovereignty.  
12. Adopting  such   an  approach,  on   10th  October, 2018
when the first two writ petitions were initially listed before the
Court, the Court had specifically observed in its order that it is
proceeding in the matter by requiring the Government of India to
apprise the Court of the details of the steps taken in the decisionmaking process notwithstanding the fact that the averments in
11
the writ petitions were inadequate and deficient.  The Court had
also indicated that it was so proceeding in the matter in order to
satisfy itself of the correctness of the decision­making process.  It
was also made clear that the issue of pricing or matters relating
to technical suitability of the equipment would not be gone into
by   the   Court.     The   requisite   information   was   required   to   be
placed before the Court by the Government of India in sealed
cover.   Before the next date of hearing fixed i.e. 31st  October,
2018, the other two writ petitions came to be filed.
13. On   31st  October,   2018,   the   Court   in   its   order   had
recorded that in none of the writ petitions the suitability of the
fighter jets and its utility to the Indian Airforce had been called
into question.  Rather what was doubted by the petitioners is the
bona fides of the decision­ making process and the price/cost of
the equipment at which it was proposed to be acquired. 
14. Pursuant to the order dated 10th October 2018, a note
in   sealed   cover   delineating   the   steps   in   the   decision­making
process was submitted to the Court and by order dated 31st
October   2018   this   Court   had   directed   that   such   of   the
information which has been laid before the Court, which can
12
legitimately be brought into the public domain, be also made
available to the petitioners or their counsels.  Details with regard
to the induction of the Indian Offset Partner (IOP), if any, was
also required to be disclosed.  The Court also directed that the
details with regard to pricing; the advantages thereof, if any,
should also be submitted to the Court in a sealed cover.
15. It   is   in   the   backdrop   of   the   above   facts   and   the
somewhat constricted power of judicial review that, we have held,
would be available in the present matter that we now proceed to
scrutinise the controversy raised in the writ petitions which raise
three broad areas of concern, namely, (i) the decision­making
process; (ii) difference in pricing; and (iii) the choice of IOP.
Decision Making Process 
16. The details of the steps in the decision­making process
leading to the award of the 36 Rafale fighter aircrafts’ order have
been set out in response to the order dated 10th October, 2018.
The Government states that the DPP 2002 has been succeeded
by periodical reviews in 2005, 2006, 2008, 2011, 2013 and 2016.
13
The preamble to DPP has been referred to capture its essence,
which emphasises that –
“Defence acquisition  is not a standard open
market commercial form of procurement and
has certain unique features such as supplier
constraints,   technological   complexity,   foreign
suppliers,   high   cost,   foreign   exchange
implications   and   geo­political   ramifications.
As   a   result,   decision   making   pertaining   to
defence   procurement   remains   unique   and
complex.”
It also states that –
“Defence procurement involves long gestation
periods and delay in procurement will impact
the preparedness of our forces.  The needs of
the armed forces being a non­negotiable and
an   uncompromising   aspect,   flexibility   in   the
procurement   process   is   required,   which   has
also been provisioned for.”
It is DPP 2013 which is stated to have been followed in the
procurement in question.
It is no doubt true that paragraph 77 of the DPP 2013
reads as follows:
“77. This procedure would be in supersession
of Defence Procurement Procedure 2011 and
will come into effect from 01 June 2013.  There
are,   however,   cases   which   would   be   under
various   stages   of   processing   in   accordance
with provision of earlier versions of DPP at the
14
time   of   commencement   of   DPP­2013.     The
processing of these cases done so far under the
earlier procedure will be deemed to be valid.
Only those cases in which RFP is issued after
01 June, 2013, will be processed as per DPP2013.”
In other words when it is stated that only those cases in which
RFP is issued after 1st June 2013 will be processed as per DPP
2013, in this case where the RFP was issued much prior to 1st
April 2013 and it was withdrawn, as already noted, in June
2015, a question may arise as to how it could be claimed that
DPP 2013 was followed.  We, however, also notice clause 75 of
DPP 2013 which reads as follows:
“75.   Any   deviation   from   the   prescribed
procedure will be put up to DAC through DPB
for approval.”
17. Also,   we   notice   that   the   official   respondents   have
sought support from paragraph 71 of the DPP 2013.   Para 71 of
DPP 2013, in respect of the IGA has been referred to, which
postulates   possibilities   of   procurement   from   friendly   foreign
countries, necessitated due to geo­strategic advantages that are
likely to accrue to the country.   Such procurement would not
classically   follow   the   Standard   Procurement   Procedure   or   the
15
Standard Contract Document, but would be based on mutually
agreed   provisions   by   the   Governments   of   both   the   countries
based on an IGA, after clearance from the Competent Financial
Authority   (hereinafter   referred   to   as   “CFA”).     Of   the   total
procurement of about Rs.7.45 lakh crores since 2002 under DPP,
different   kinds   of   IGAs,   including   Foreign   Military   Sales   and
Standard Clauses of Contract account for nearly 40%.  With the
object of promoting indigenization, a robust offset clause is said
to have been included since 2005.   As per the Defence Offset
Guidelines   of   2013,   the   vendor/Original   Equipment
Manufacturer (hereinafter referred to as “OEM”) is free to select
its IOPs for implementing the offset obligation.
18. As far as the endeavour to procure 126 fighter aircrafts
is concerned, it has been stated that the contract negotiations
could  not  be  concluded,  inter alia,  on  account  of  unresolved
issues between the OEM and HAL.  These have been set out as
under:
“i) Man­Hours   that   would   be   required   to
produce the aircraft in India: HAL required 2.7
times   higher   Man­Hours   compared   to   the
French   side   for   the   manufacture   of   Rafale
aircraft in India.
16
ii) Dassault   Aviation   as   the   seller   was
required   to   undertake   necessary   contractual
obligation for 126 aircraft (18 direct fly­away
and 108 aircraft manufactured in India) as per
RFP   requirements.     Issues   related   to
contractual   obligation   and   responsibility   for
108 aircraft manufactured in India could not
be resolved.”
19. The   aforesaid   issues   are   stated   to   have   been
unresolved for more than three years.  Such delay is said to have
impacted the cost of acquisition, as the offer was with ‘in­built
escalation’   and   was   influenced   by   Euro­Rupee   exchange   rate
variations.     The   stalemate   resulted   in   the   process   of   RFP
withdrawal being initiated in March 2015.  In this interregnum
period, adversaries of the country, qua defence issues, inducted
modern   aircrafts   and   upgraded   their   older   versions.     This
included   induction   of   even   5th  Generation   Stealth   Fighter
Aircrafts of almost 20 squadrons, effectively reducing the combat
potential of our defence forces.  In such a situation, governmentto­government negotiations resulted in conclusion of the IGA for
the supply of 36 Rafale Aircrafts, as part of a separate process.
The requisite steps are stated to have been followed, as per DPP
2013.     An   INT7
  was   constituted   to   negotiate   the   terms   and
7 Indian Negotiating Team
17
conditions, which commenced in May 2015 and continued till
April 2016.   In this period of time, a total of 74 meetings were
held, including 48 internal INT meetings and 26 external INT
meetings with the French side.   It is the case of the official
respondents that the INT completed its negotiations and arrived
at better terms relating to price, delivery and maintenance, as
compared to the MMRCA offer of Dassault.   This was further
processed for inter­ministerial consultations and the approval of
the CCS was also obtained, finally, resulting in signing of the
agreement.  This was in conformity with the process, as per para
72 of DPP 2013.
20. The petitioners, on the other hand, seek to question
the very fulfilment of the prerequisites for entering into an IGA.
The Government of France, giving only a ‘Letter of Comfort’ and
not a ‘Sovereign Guarantee’ has been questioned. 
21. It is a say of the petitioners that para 71 envisages
three eventualities, where the question of entering into an
IGA would arise, which have not arisen in the present case:
18
(a) Proven   technology   and   capabilities   belonging   to   a
friendly foreign country is identified by our Armed Forces while
participating in joint international exercises;
(b) Large value weapon system/platform in service in a
friendly foreign country is available for transfer or sale normally
at a much lesser cost; or
(c) Requirement   of   procuring   a   specific   state­of­the­art
equipment/platform where the Government of the OEM’s country
might   have   imposed   restriction   on   its   sale   and   thus   the
equipment cannot be evaluated on ‘No Cost No Commitment’
basis.
22. We have studied the material carefully.  We have also
had the benefit of interacting with senior Air Force Officers who
answered Court queries in respect of different aspects, including
that of the acquisition process and pricing. We are satisfied that
there is no occasion to really doubt the process, and even if
minor deviations have occurred, that would not result in either
setting aside the contract or requiring a detailed scrutiny by the
Court. We have been informed that joint exercises have taken
19
place, and that there is a financial advantage to our nation.  It
cannot   be   lost   sight   of,   that   these   are   contracts   of   defence
procurement which should be subject to a different degree and
depth   of   judicial   review.     Broadly,   the   processes   have   been
followed.  The need for the aircrafts is not in doubt. The quality of
the aircraft is not in question.   It is also a fact that the long
negotiations for procurement of 126 MMRCAs have not produced
any result, and merely conjecturing that the initial RFP could
have resulted in a contract is of no use.  The hard fact is that not
only was the contract not coming forth but the negotiations had
come practically to an end, resulting in a recall of the RFP.  We
cannot sit in judgment over the wisdom of deciding to go in for
purchase of 36 aircrafts in place of 126.   We cannot possibly
compel the Government to go in for purchase of 126 aircraft.
This is despite the fact that even before the withdrawal of RFP, an
announcement came to be made in April 2015 about the decision
to go in only for 36 aircrafts. Our country cannot afford to be
unprepared/underprepared in a situation where our adversaries
are stated to have acquired not only 4th Generation, but even 5th
Generation Aircrafts, of which, we have none.   It will not be
20
correct for the Court to sit as an appellate authority to scrutinize
each aspect of the process of acquisition.
23. We may also note that the process was concluded for
36 Rafale fighter jet aircrafts on 23rd September, 2016.  Nothing
was called into question, then.  It is only taking advantage of the
statement by the ex­President of France, Francois Hollande that
these set of petitions have been filed, not only qua the aspect
which formed the statement, that is, the issue of IOPs but also
with respect to the entire decision­making process and pricing.
We do not consider it necessary to dwell further into this issue or
to seek clause­by­clause compliances.
Pricing
24. The challenge to the pricing of the aircrafts, by the
petitioners, is sought to be made on the ground that there are
huge escalations in costs, as per the material in public domain,
as found in magazines and newspapers. We did initially express
our disinclination to even go into the issue of pricing.  However,
by a subsequent order, to satisfy the conscience of the Court, it
was   directed   that   details   regarding   the   costs   of   the   aircrafts
should also be placed in sealed covers before the Court.
21
25. The   material   placed   before   us   shows   that   the
Government has  not disclosed pricing details, other than  the
basic price of the aircraft, even to the Parliament, on the ground
that sensitivity of pricing details could affect national security,
apart from breaching the agreement between the two countries.
The   pricing   details   have,   however,   been   shared   with   the
Comptroller   and   Auditor   General   (hereinafter   referred   to   as
“CAG”), and the report of the CAG has been examined by the
Public Accounts Committee (hereafter referred to as “PAC”).  Only
a redacted portion of the report was placed before the Parliament,
and is in public domain.   The Chief of the Air Staff is stated to
have communicated his reservation regarding the disclosure of
the pricing details, including regarding the weaponry which could
adversely affect national security.  The pricing details are stated
to be covered by Article 10 of the IGA between the Government of
India   and   the   Government   of   France,   on   purchase   of   Rafale
Aircrafts, which provides that protection of classified information
and material exchanged under the IGA would be governed by the
provisions of the Security Agreement signed between both the
Governments on 25th January, 2008.  Despite this reluctance, the
22
material   has   still   been  placed   before   the   Court   to  satisfy   its
conscience.
26. We   have   examined   closely   the   price   details   and
comparison   of   the   prices   of   the   basic   aircraft   along   with
escalation costs as under the original RFP as well as under the
IGA.   We have also gone through the explanatory note on the
costing, item wise.  
Suffice   it   to   say   that   as   per   the   price   details,   the   official
respondents   claim   there   is   a   commercial   advantage   in   the
purchase of 36 Rafale aircrafts. The official respondents have
claimed   that   there   are   certain   better   terms   in   IGA   qua   the
maintenance and weapon package.   It is certainly not the job of
this Court to carry out a comparison of the pricing details in
matters like the present.  We say no more as the material has to
be kept in a confidential domain. 
Offsets
27. The issue of IOP is what has triggered this litigation.
The   offset   contract   is   stated   to   have   been   governed   by   the
Defence Offset Guidelines of DPP 2013.  Two of the said contracts
23
were   signed   with   Dassault   and   M/s   MBDA   Missile   Systems
Limited on 23rd September, 2016, the same day on which the IGA
was   signed   between   the   Government   of   India   and   the
Government of France.  These are the French industrial suppliers
of the Aircraft package and Weapon Package respectively.  There
are stated to be no offset obligations in the first three years, but
the   offset   obligations   are   to   commence   from   October   2019
onwards.
28. The   complaint   of   the   petitioners   is   that   the   offset
guidelines contemplate that the vendor will disclose details about
the Indian Offset partner however, in order to help the business
group in India in question, an amendment was carried out in
paragraph 8 of the Offset Guidelines that too with retrospective
effect.   By virtue of the said amendment it is contended that
cloak of secrecy is cast about the Offset partner and the vendor is
enabled to give the details at a much later point of time.   It is
contended,   however,   that   other   provisions   of   the   Offset
Guidelines   remain   unamended,   and,   therefore,   Government
cannot pretend ignorance about the Indian Offset partner as has
been done in the affidavit filed.  It is complained that favouring
24
the   Indian   business   group   has   resulted   in   offence   being
committed under the Prevention of Corruption Act. 
29. As   per   clause   8   of   DPP   2013,   dealing   with   the
processing of offset proposals, it has been stated in clause 8.2 as
under:
“8. Processing of Offset Proposals
8.2 The TOEC8
  will scrutinize the technical
offset   proposals   (excluding   proposals   for
Technology Acquisition by DRDO as per para
8.3)   to   ensure   conformity   with   the   offset
guidelines.  For this purpose, the vendor may
be advised to undertake changes to bring his
offset proposals in conformity with the offset
guidelines.     The   TOEC   will   be   expected   to
submit   its   report   within   4­8   weeks   of   its
constitution.”
30. It has been categorically stated that the vendor/OEM
is yet to submit a formal proposal, in the prescribed manner,
indicating the details of IOPs and products for offset discharge.  A
press release in the form of a ‘Clarification on Offset Policy’,
posted on 22nd September, 2018 has also been placed before us.
Inter alia, it states that the Government reiterates that it has no
role to play in the selection of the IOP.  As per the Defence Offset
8 Technical Offset Evaluation Committee
25
Guidelines, the OEM is free to select any Indian company as its
IOP.  A joint venture is stated to have come into being between
Reliance Defence and Dassault in February 2017, which is stated
to be a ‘purely commercial arrangement’ between the two private
companies.  Media reports of February 2012 are stated to suggest
that Dassault, within two weeks of being declared the lowest
bidder   for   procurement   of   126   aircrafts   by   the   previous
Government,   had   entered   into   a   pact   for   partnership   with
Reliance   Industries   (Another   business   group)   in   the   Defence
sector.  Dassault has also issued a press release stating that it
has signed partnership agreements with several companies and
is negotiating with over hundred other companies.   As per the
guidelines, the vendor is to provide details of the IOPs, either at
the time of seeking offset credit or one year prior to discharge of
offset obligation, which would be due from 2020 onwards.  The
aforesaid press release is in conformity with the clause dealing
with IOPs which reads as under:
“4. Indian Offset Partner
4.3  The   OEM/vendor/Tier­I   sub­vendor   will
be free to select the Indian offset partner for
implementing the offset obligation provided the
IOP has not been barred from doing business
by the Ministry of Defence.”
26
31. Despite the aforesaid illustration, the petitioners kept
on emphasising that the French Government has no say in the
matter, as per media reports. It is also stated that there was no
reason for Dassault to have engaged the services of Reliance
Aerostructure Ltd., through a joint venture, when the company
itself   had   come   into   being   only   on   24th  April,   2015.     The
allegation, thus, is that the Indian Government gave a benefit to
Reliance Aerostructure Ltd., by compelling Dassault to enter into
a contract with them, and that too at the cost of the public
enterprise, HAL.
32. It   is   no   doubt   true   that   the   company,   Reliance
Aerostructure Ltd., has come into being in the recent past, but
the   press   release   suggests   that   there   was   possibly   an
arrangement between the parent Reliance company and Dassault
starting from the year 2012.  As to what transpired between the
two corporates would be a matter best left to them, being matters
of their commercial interests, as perceived by them.  There has
been a categorical denial, from every side, of the interview given
by the former French President seeking to suggest that it is the
Indian Government which had given no option to the French
27
Government in the matter.  On the basis of materials available
before   us,   this   appears   contrary   to   the   clause   in   DPP   2013
dealing with IOPs which has been extracted above. Thus, the
commercial arrangement, in our view, itself does not assign any
role to the Indian Government, at this stage, with respect to the
engagement  of  the IOP. Such  matter is seemingly left to the
commercial decision of Dassault. That is the reason why it has
been stated that the role of the Indian Government would start
only when the vendor/OEM submits a formal proposal, in the
prescribed manner, indicating details of IOPs and products for
offset   discharge.     As   far   as   the   role   of   HAL,   insofar   as   the
procurement of 36 aircrafts is concerned, there is no specific role
envisaged. In fact, the suggestion of the Government seems to be
that there were some contractual problems and Dassault was
circumspect about HAL carrying out the contractual obligation,
which is also stated to be responsible for the non­conclusion of
the earlier contract. 
33. Once again, it is neither appropriate nor within the
experience   of   this   Court   to   step   into   this   arena   of   what   is
technically feasible or not.   The point remains that DPP 2013
28
envisages that the vendor/OEM will choose its own IOPs.  In this
process, the role of the Government is not envisaged and, thus,
mere press interviews or suggestions cannot form the basis for
judicial review by this Court, especially when there is categorical
denial of the statements made in the Press, by both the sides.
We do not find any substantial material on record to show that
this is a case of commercial favouritism to any party by the
Indian Government, as the option to choose the IOP does not rest
with the Indian Government.
Conclusion:
34. In view of our findings on all the three aspects, and
having heard the matter in detail, we find no reason for any
intervention by this Court on the sensitive issue of purchase of
36 defence aircrafts by the Indian Government.   Perception of
individuals cannot be the basis of a fishing and roving enquiry by
this Court, especially in such matters.  We, thus, dismiss all the
writ petitions, leaving it to the parties to bear their own costs.
We, however, make it clear that our views as above are primarily
from   the   standpoint   of   the   exercise   of   the   jurisdiction   under
29
Article 32 of the Constitution of India which has been invoked in
the present group of cases.
………….....................,,CJI
[RANJAN GOGOI]
………….....................,,J.
[SANJAY KISHAN KAUL]
………….....................,,J.
[K.M. JOSEPH]
NEW DELHI
DECEMBER 14, 2018

When to grant or refuse interim injunction orders pending disposal of suit

When to grant or refuse interim injunction orders pending disposal of suit

Or.39, rule 1 and 2 - Sec.38 of the Specific Relief Act
Order 39 Rule 1 :
1. Where in any suit it is proved by affidavit or otherwise -
(a)that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree or
(b) that the defendant threatens, or intends to remove or dispose of his property with a view to defrauding his creditors,
(c) that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or disposition of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the Court thinks fit, until the disposal of the suit or until further orders.

ad interim injunction means is an order that is going to be passed by the court at the time of granting exparte interim injunction till date or till disposal of interlocutory application
[ The dictionary  meaning of ad interim  = for an intervening or temporary period of time. = temporary.]

38. Perpetual injunction when granted.
(1) Subject to the other provisions contained in or referred to by this Chapter, a perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in his favour, whether expressly or by implication.
(2) When any such obligation arises from contract, the court shall be guided by the rules and provisions contained in Chapter II.
(3) When the defendant invades or threatens to invade the plaintiff’s right to, or enjoyment of, property, the court may grant a perpetual injunction in the following cases, namely:—
(a) where the defendant is trustee of the property for the plaintiff;
(b) where there exists no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion;
(c) where the invasion is such that compensation in money would not afford adequate relief;
(d) where the injunction is necessary to prevent a multiplicity of judicial proceedings.

The dictionary  meaning of the word perpetual = never ending or changing
synonyms:- everlasting, never-ending, eternal, permanent, unending, endless, without end, lasting, long-lasting, constant, abiding, enduring, perennial, timeless, ageless, deathless, undying, immortal; More

[Gaddipati Sambrajyam And Anr. vs Panguluri Mahalakshmamma And ... on 2 December, 1994 Equivalent citations: 1995 (1) ALT 305 -B.K. Somasekhara, J.]

Chapter VII of the Specific Relief Act, 1963
From Sections 36 to 42 deals with injunction generally.
Section 37 concerns temporary and perpetual injunctions.
Section 38 enumerates as to when perpetual injunction can be granted and
Section 41 enumerates as to when injunctions can be refused.
Section 37 (1) explains temporary injunctions as to continue until a specified time or until further orders of the Court and that they may be granted at any stage of the suit and are regulated by the Code of Civil Procedure. Similarly permanent injunction or perpetual injunction is explained in Section 37 (2).
Order 39 of the Code of Civil Procedure deals with temporary injunctions and interlocutory orders.
There is no scope to confuse between temporary injunctions and interlocutory orders and the permanent reliefs of such nature to be granted under the Specific Relief Act or under any other law.
Since the fundamentals about the implications of the temporary injunction and orders in the nature of temporary injunction are settled at least for over a century, they could be neither questioned nor could be elaborated in meticulous detail with research or discovery and since such principles are already codified by authoritative pronouncements in the precedents, they may be conveniently noted in brief as follows:-

The grant or refusal of a temporary injunction is covered by three principles viz.,
(1) if the plaintiff has made out a prima facie case,
(2) if the balance of convenience is in his favour i.e., it would be greater inconvenience to the plaintiff if the injunction is not granted than the inconvenience which the defendant or persons claiming through him would be put to if the temporary injunction is granted and
(3) if the plaintiff suffers irreparable injury.
The fact that the plaintiffs have made out a prima facie case, does not necessary mean that a temporary injunction can be issued.
The meaning of 'prima facie case'
should not be too much stretched to land in the loss of real purpose, 1. N.D. Basu's Law of Injunctions (Fourth Edition).. The very expression 'prima facie case' is to look into the matter on the face of it not to do well into it.
'Prima facie' means - at first sight; on the first appearance; on the face of it; so far as can be judged from the first disclose; presumably; a fact presumed to be true unless disproved by some evidence to the contrary (Black in Venkataramaiya's Law Lexicon Vol. 4 Second Edn.).
For example :- 
when the plaintiffs depended upon their possession of the suit properties based upon a will, the Court was expected only to know whether there is a will and on the face of it, whether the plaintiffs would have come into possession of the suit properties.
Because the defendants set up earlier will to base their possession, the Court was to find out whether on their face value they could have been accepted.
The other circumstances namely, payment of assessment or land revenue by the parties, report to the Village Officers about their respective wills, cultivation of the land or the occupation of the residential house, the voters' list, the ration card etc., are all again prima facie circumstances to support such a prima facie case of possession based on will.
The investigation into the execution of the will registration, coming into possession in law etc., are all matters touching the merits of the case.
Even the suspicious circumstances in regard to the will like the writings, the mental state etc., of the testator and all the surrounding circumstances are to be examined prima facie and not in meticulous detail like a trial where the parties will have opportunities to examine witnesses, cross-examine them and rebut certain circumstances appearing from such materials.
Therefore, the precedents appear to have settled the manner in which the prima facie case has to be examined in a case like this.
"The rule that before the issue of temporary injunction, the Court must satisfy itself that the plaintiff has prima facie case, does not mean that the Court should examine the merits of the case closely and come to a conclusion that the plaintiff has a case in which he is likely to succeed. This would amount to prejudicing the case on its merits. All that the Court is to see that on the face of it the person applying for an injunction has a case, which needs consideration and which is not bound to fail by virtue of some apparent defects. The probability of right is sufficient to sustain an injunction". (Page 72 of Basu's Law of Injunctions supra). The purpose of such a prima facie enquiry is explained as: 'In many cases "......In many cases the Court would interfere to preserve the property in status quo during the pendency of the suit in which the rights to it were to be decided, and that, without expressing and often without having the means of forming, any opinion as to such rights; that it was true the Court would not interfere if it thought that there was no real question between the parties but that seeing there was substantial question to be decided, it would preserve the property until such question could regularly disposed of; and that in order to support an injunction for such purpose, it was not necessary for the Court to decide upon the merits in favour of the plaintiff; and that if the bill states a substantial question between the parties, the title to the injunction may be good, although the title to the relief prayed for might ultimately fail". (Joyce's Doctrines 29, Quoted at page 72-73 of Basu's Law of Injunctions supra).
These principles appear to have been incorporated with approval in various precedents of the High Courts of Madras, Kerala, Delhi, Punjab, Karnataka, Himachal Pradesh and Madhya Pradesh. (Pages 1090 and 1091 of CPC by A.N. Saha, 3rd Edn.).
Our own High Court has laid down in Firm Ram Kishun Shah Itwari Sahu v. Jamuna Prasad, AIR 1951 A.P. 469. that the real point, upon an application for temporary injunction, is not how the question ought to be decided at the hearing of the case, but whether there is a substantial question to be investigated and whether matters should not be preserved in status quo until that question can be finally disposed of. The fundamental of the principles governing temporary injunction are elaborated in the above terms by our own High Court in more than one precedent viz., Nawab Mir Barkat Ali Khan v. Nawab Zolfiquar Jah Bhadur, 1975(1) An.W.R. 32. Iruvaram Jayamma v. Padmavathamma, 1978(2) An.W.R. 308. Chintapatla Arvind Babu v. Smt. K. Balakistamma, .
According to our own High Court all the three conditions are to be established to grant an. order of injunction, and the mere proof of one is insufficient.
In sum and substance, the settled law regarding prima facie appears to be that merits of the case should not be examined closely, deeper examination of the controversies is impermissible, stands of the parties are not to be proved in such a manner to give a final decision, in discharging a prima facie case, the plaintiff need not establish title, it is only if he can show that he has a fair question to raise as to the existence of the right which he alleges and ultimately, the Court should be guided by the principles of equity.
The settled law appears to be that an order under Order 39 Rules 1 and 2 of CPC is discretionary based upon the facts and circumstances of each case.
In other words, such a discretion vests with a Court dealing with an equitable remedy called judicial discretion.
The Supreme Court time and again reminded the Courts of such a principle so as to impress that such discretionary exercise of the powers should not be interfered with by the appellate Courts.
In The Printers (Mysore) Pvt. Ltd. v. Pothan Joseph, ; the Supreme Court pointed out:
"............As is often said, it is ordinarily not open to the appellate Court to substitute its own exercise of discretion for that of the trial Judge; but if it appears to the appellate Court that in exercising its discretion the trial Courts has acted unreasonably or capriciously or has ignored relevant fact and has adopted an unjudicious approach, the it would certainly be open to the appellate Court and in many cases it may be its duty to interfere with the trial Court's exercise of jurisdiction".
In Uttar Pradesh Co-operative Federation Ltd. v. Sunder Bros, Delhi, the Supreme Court had to deal with the discretion vested in the Court as:
"......The appellate Court would be slow to interfere with the exercise of their discretion. In dealing with the matter raised before it at the appellate stage, the appellate Court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage, it may have come to a contrary conclusion. If the discretion has exercised by the trial court reasonably and in a judicial manner the fact that the appellate Court would have taken a different view may not justify such interference with the trial Court's exercise of discretion. If it appears to be appellate Court that in exercising its discretion the trial Court has acted unreasonably or capriciously or has ignored relevant facts, then it would be open to the appellate Court to interfere with the trial Court's exercise of discretion".
The Privy Council has long back as in 1920 cautioned that the mere possibility of the appellate Court coming to a different conclusion on the same facts and evidence will not justify interference vide Wazir Sunder Singh v. Musammat Farida Khannam, AIR 1920 P.C. 132. Therefore, following such principles the High Court of Mysore in Rangamma v. Krishnappa, AIR 1965 Mysore 310 = 1968 (1) Mysore L.J. 552 pointed out and put the principle in brief:
".........Granting or refusal of temporary injunction rests on the sound exercise of discretion by the trial Court. Such exercise of discretion cannot be lightly interfered with by the appellate Court, unless it is shown that such exercise of discretion is unreasonable or capricious. That a different view was possible on the facts and circumstances of the case by itself, will not be sufficient to interfere with the order".
Based on the precedents of the Supreme Court and various High Courts, the High Court of Karnataka in Lalithakshi Anandamgouda v. Sadnshivnppa Basappa Patil went to the extent of saying that the appellate Court has no jurisdiction to interfere with the discretionary order passed by the trial Court.
In view of Order 39 Rule 1 of C.P.C. and also Order 19 Rule 2 of CPC Order 39 Rule 1 of CPC specifically mentions the use of affidavits or affidavits to prove the ingredients of (a) to (c) of the provision, whereas Rule 2 of Order 39 of CPC conspicuously omits to do so.
That is why in Saknlabatula Vykunta Rao v. Made Appalaswamy, our own High Court authoritatively held that in deciding an application under Order 39 Rule 1 of CPC in view of the urgency involved, the Court is expressly authorised to decide the point on affidavits. It was also held therein that Order 19 Rules 1 and 2 do not arise at all.
The scope and the implication of the rule is thus stated therein:
".......In view of the urgency involved in the matter, the regular procedure of examining the petitioner and his witnesses and respondent and his witnesses is dispensed with and the Court is given a special power to decide the matter by affidavits. Further the scope of enquiry is quite limited and the rights of parties are not decided finally. That being the purpose of giving special power to the Court under Order 39 Rule 1, the question of summoning the deponent for the purpose of cross-examination at the instance of a party under Order 19 Rules 1 and 2, does not arise at all. The power given to the Court under Order 39 Rule 1, to decide the matters by affidavits is unfettered and is not subjected to the provisions of Order 19 Rules 1 and 2. In short, the provisions of Order 19, Rules 1 and 2 have no application at all to interlocutory matters governed by Order 39 Rule 1".
It is apparent that the Court was dealing with the proof of facts by affidavits only with reference to the applications under Order 39 Rule 1 of C.P.C.
The question whether Order 19 Rules 1 and 2 is applicable to interlocutory applications was not the subject matter of the decision muchless that is considered.
It is also clear that the absence or use of affidavits for injunctions under Order 39 Rule 2 CPC was not considered in the decision supra.
Therefore, it appears that the matter was not exhaustively dealt with muchless any decision is rendered on that question.
Therefore, in the context of what has been done in the present case by the two Courts below, this Court has felt the necessity to elaborate the legal position regarding use of affidavits in such situations.
The law appears to be that affidavit is no evidence since it is not included in the definition of 'evidence' Under Section 3 of the Evidence Act and it is specifically excluded by Section 1 of the Evidence Act.
But the Courts may permit the proof of any fact by means of affidavit under Order 19 Rules 1 and 2 of C.P.C.
The precedents of various High Courts appear to be in favour of such a general rule (Page 15 of Sarkar on Evidence).
To understand the true and correct legal implications about the use and value of the affidavits, Order 19, Rules 1 and 2 of CPC may be repeated thus:
"Power to order any point to be proved by affidavit:
1. Any Court may at any time for sufficient reason order that any particular fact or facts may be proved by affidavit, or that the affidavit of any witness may be read at the hearing, on such conditions as the Court thinks reasonable:
Provided that where it appears to the Court that either party bona fide desires the production of a witness for cross-examination, and that such witness can be produced, an order shall not be made authorizing the evidence of such witness to be given by affidavit.
Power to order attendance of deponent for cross-examination.
2. (1) Upon any application evidence may be given by affidavit, but the Court may, at the instance of either party, order the attendance for cross-examination of the deponent.
(2) Such attendance shall be in Court, unless the deponent is exempted from personal appearance in Court, or the Court otherwise directs".
The implications of Order 19 Rules 1 and 2 of CPC in relation to the affidavits appear to have been exhaustively dealt with in B.R. Vishwanath Singh v. Shivalingaiah, . Therein a clear distinction between Rules 1 and 2 of Order 19 of CPC is noted. Affidavits contemplated in Rule 1 are affidavits taken by way of evidence in order to prove particular fact or facts. Prove or proof in the sense in which that word is used in Rule 1 means final proof and not prima facie proof. Such a distinction is drawn from the expressions of the learned author Sarkar as follows:
"..........Prima facie evidence only means that there is ground for proceeding, it is not the same thing as 'proof which comes later when the Court has to find whether the accused is guilty. Because a Magistrate has found a prima facie case to issue process, it is a fallacy to say that he believes the case to be true in the sense that it is proved. Prima facie evidence which if accepted appears to be sufficient to establish a fact unless rebutted by acceptable evidence to the contrary. It is not conclusive".
That is how whenever a fact is permitted to be proved by means of an affidavit of a witness if the other side desires that such a witness should be produced before the Court for cross-examination, the Court should not accept that evidence given in the form of affidavit. That is why in the proviso to Rule 1 it is stated that an order shall not be made authorising the evidence of such witness to be given by affidavit. But that is not the case in regard to Rule 1 of Order 19 of C.P.C. The distinction of the two rules is marked by the learned Judge in Vishwanath Singh's case (12 supra) as follows:
".......Here a discretion vests in the Court both in the matter of taking evidence by way of affidavits and also in ordering the attendance of those persons for cross-examination. Further, if Rule 1 contemplates affidavits in proof of facts Rule 2 contemplates affidavits in support of or against applications. It is true that there are provisions in the Code and in several statutes providing for filing of applications claiming substantive reliefs. Any relief finally granted in such cases can be said to have been given on a particular fact or set of facts proved. To such cases, it can be said, Rule 1 is attracted. But Rule 2 which does not contemplate any such proof of fact or facts may be construed as one applicable only to applications claiming interim reliefs like a temporary injunction, appointment of a receiver. appointment of a guardian ad litem and the like".
Therefore, it is apparent both from the provisions supra and also the case law on the question that notwithstanding any provision of CPC or similar law contemplates for proof prima facie, affidavits may be permitted to be produced under Order 19 Rule 2 of CPC provided the proof contemplated is only prima facie and not the proof on merits, in which case a party may desire the deponent of the affidavit to be produced before the Court when the Court may not use the affidavit by way of evidence or it can call such witness for cross-examination by the adversary. This supplements the absence of use of affidavits in any provision like Order 39, Rule 2 of CPC by virtue of Order 19 Rule 2 of CPC and not otherwise.
To conclude, the law appears to be square on the question that affidavit is no evidence in view of Section 1 of Evidence Act, but it assumes the character of evidence for certain purposes as stated above in view of Order 19 Rules 1 and 2 of CPC and also in view of the definition of 'evidence' Under Section 3 of the Evidence Act which reads thus:
"Evidence" means and includes -
(1) all statements which the Court permits or requires to be made before it by witnesses in relation to matters of fact under inquiry; such statements are called oral evidence:
(2) all documents produced for the inspection of the Court; such documents are called documentary evidence".
An affidavit can be brought within the definition of 'document' under the same provision and therefore, such a document if permitted to be produced by the Court would be evidence, however, subject to the limitations under Order 19, Rules 1 and 2 of C.P.C.
[A. VENKATASUBBIAH NAIDU V. S. CHELLAPPAN & ORS [2000] INSC 484 (19 September 2000)]
Order 39 Rule 1 says thus:
1. Where in any suit it is proved by affidavit or otherwise -
(a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree or
(b) that the defendant threatens, or intends to remove or dispose of his property with a view to defrauding his creditors,
(c)that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or disposition of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the Court thinks fit, until the disposal of the suit or until further orders.
It cannot be contended that the power to pass interim ex parte orders of injunction does not emanate from the said Rule.
In fact, the said rule is the repository of the power to grant orders of temporary injunction with or without notice, interim or temporary, or till further orders or till the disposal of the suit.
Hence, any order passed in exercise of the aforesaid powers in Rule 1 would be applicable as indicated in Order 43 Rule 1 of the Code.
The choice is for the party affected by the order either to move the appellate court or to approach the same court which passed the ex parte order for any relief.
an order granting injunction without complying with the requisites envisaged in Rule 3 of Order 39 be void.
Rule 3 reads thus: The Court shall in cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction direct notice of the application for the same to be given to the opposite party:
[Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite-party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant (a) to deliver to the opposite-party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with-
(i) a copy of the affidavit filed in support of the application;
(ii) a copy of the plaint; and
(iii) copies of documents on which the applicant relies, and
(b) to file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent.
What would be the position if a court which passed the order granting interim ex parte injunction did not record reasons thereof or did not require the applicant to perform the duties enumerated in clauses (a) & (b) of Rule 3 of Order 39.
In our view such an Order can be deemed to contain such requirements at least by implication even if they are not stated in so many words.
But if a party, in whose favour an order was passed ex parte, fails to comply with the duties which he has to perform as required by the proviso quoted above, he must take the risk.
Non-compliance with such requisites on his part cannot be allowed to go without any consequence and to enable him to have only the advantage of it.
The consequence of the party (who secured the order) for not complying with the duties he is required to perform is that he cannot be allowed to take advantage of such order if the order is not obeyed by the other party.
A disobedient beneficiary of an order cannot be heard to complain against any disobedience alleged against another party.

The Rule does not say that the period of the injunction order should be restricted by the Court to thirty days at the first instance, but the Court should pass final order on it within thirty days from the day on which the injunction was granted.
Hence, the order does not ipso facto become illegal merely because it was not restricted to a period of thirty days or less.
Nonetheless, we have to consider the consequence, if any, on account of the Court failing to pass the final orders within thirty days as enjoined by Rule 3-A.
The aforesaid Rule casts a three-pronged protection to the party against whom the ex parte injunction order was passed.
First is the legal obligation that the Court shall make an endeavour to finally dispose of the application of injunction within the period of thirty days.
Second is, the legal obligation that if for any valid reasons the Court could not finally dispose of the application within the aforesaid time the Court has to record the reasons thereof in writing.
What would happen if a Court does not do either of the courses?
We have to bear in mind that in such a case the Court would have by-passed the three protective humps which the legislature has provided for the safety of the person against whom the order was passed without affording him an opportunity to have a say in the matter.
First is that the Court is obliged to give him notice before passing the order. It is only by way of a very exceptional contingency that the Court is empowered to by-pass the said protective measure.
Second is the statutory obligation cast on the Court to pass final orders on the application within the period of thirty days.
Here also it is only in very exceptional cases that the Court can by-pass such a rule in which cases the legislature mandates on the court to have adequate reasons for such bypassing and to record those reasons in writing. If that hump is also bypassed by the Court it is difficult to hold that the party affected by the order should necessarily be the sole sufferer.
It is the acknowledged position of law that no party can be forced to suffer for the inaction of the court or its omissions to act according to the procedure established by law.
Under the normal circumstances the aggrieved party can prefer an appeal only against an order passed under Rules 1,2,2A, 4 or 10 of Order 39 of the Code in terms of Order 43 Rule 1 of the Code.
cannot he approach the appellate or revisional court during the pendency of the application for grant or vacation of temporary injunction.
In such circumstances the party who does not get justice due to the inaction of the court in following the mandate of law must have a remedy.
So we are of the view that in a case where the mandate of Order 39 Rule 3A of the Code is flouted, the aggrieved party, shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force.
In such appeal, if preferred, the appellate court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate court in complying with the provisions of Rule 3A.
In appropriate cases the appellate court, apart from granting or vacating or modifying the order of such injunction,may suggest suitable action against the erring judicial officer, including recommendation to take steps for making adverse entry in his ACRs. Failure to decide the application or vacate the ex-parte temporary injunction shall, for the purposes of the appeal, be deemed to be the final order passed on the application for temporary injunction, on the date of expiry of thirty days mentioned in the Rule.