LAW FOR ALL

Saturday, February 2, 2019

Whether the decree is an exparte decree ? G. Ratna Raj (D) by LRs. ….Appellant(s) VERSUS Sri Muthukumarasamy Permanent Fund Ltd. & Anr. ….Respondent(s)

Suit for redemption of mortgage and for permanent injunction in relation to the mortgaged property. - The plaintiff examined himself as PW1. The defendants crossexamined the plaintiff. Thereafter, the plaintiff closed his case. The case was accordingly posted for recording defendants’ evidence. At that stage of the proceedings, the
defendants did not appear in the suit and, therefore, the Court proceeded ex parte against them. The proceedings in the suit then continued as ex parte against the defendants. The plaintiff then got himself reexamined in the proceedings. He, however, could not be recrossexamined by the defendants because they were already proceeded ex parte in the proceedings. The Trial Court (Single Judge) by judgment/decree dated 25.02.2003 passed a preliminary decree against the defendants in relation to the suit property. -IA No. 341/2006 filed under Order 9 Rule 13 of Code of Civil Procedure, 1908 (hereinafter referred to as “the Code”) for setting aside of the preliminary decree dated 25.02.2003 and IA No.340/2006 filed for condonation of delay in filing the application under Order 9 Rule 13 of the Code.- By order dated 14.03.2006, the Single Judge dismissed both the applications and held that the application filed by defendant No.1 under Order 9 Rule 13 of the Code was not maintainable because the preliminary decree dated 25.02.2003 was not an "ex parte decree" -The Division Bench, therefore, allowed the application filed by defendant No.1 under Order 9 Rule 13 of the Code subject to their paying a cost of Rs.10,000/ to the plaintiff. -

Whether the decree is an exparte decree ?

Apex court held that
whether the remedy under Order 9 is lost or not what is necessary to be seen is whether in the first instance the Court had resorted to the Explanation of Rule 2.
The Explanation permits the court in its discretion to proceed with a case where
substantial portion of evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned.
For application of the provision, the court has to satisfy itself that:
(a) substantial portion of the evidence of any party has been already recorded;
(b) such party has failed to appear on any day; and
(c) the day is one to which the hearing of the suit is adjourned.
Rule 2 permits the court to adopt any of the modes provided in Order 9 or to make such order as he thinks fit when on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear. The Explanation is in the nature of an exception to the general power given under the rule, conferring discretion on the court to act under the specified circumstance i.e. where evidence or a substantial portion of evidence of any party has been already recorded and such party fails to appear on the date to which hearing of the suit has been adjourned.
It is not in dispute that the defendants were placed ex parte on the date when the case was fixed for recording defendants’evidence but the same was not recorded due to the defendants’ absence on the said date. In other words, it was a case where the defendants did not lead any evidence. In such a situation arising in the case, in our view, the case at hand would not fall under Explanation to Order 17 Rule 2 of the Code because in order to attract the Explanation, "such party" which has led evidence or has led substantial part of the evidence, if fails to appear on any day to which the hearing of the case is adjourned, the Court may treat “such party” as "present" on that day and is accordingly empowered to proceed in the suit.
We are, therefore, of the view that since the defendants were proceeded ex parte and were found
not to have led any evidence in the suit, the Court could only proceed under Order 17 Rule 3 (b) read
with Order 17 Rule 2 of the Code for disposal of the suit by taking recourse to one of the modes directed in that behalf by Order 9 of the Code or could have made any other order as it thinks fit.
As mentioned above, the Trial Court did proceed to hear the suit ex parte by taking recourse to the Order 9 Rule 6 (a) in terms of Order 17 Rule 2 of the Code because on that day, the plaintiff was present when the suit was called on for hearing whereas the defendants were absent despite service of summons and accordingly the Trial Court passed the preliminary decree. Such decree, in our opinion, was an "ex parte decree" within the meaning of Order 9 Rule 6 (a) read with Order 9 Rule 13 of the Code and, therefore, could be set aside under Order 9 Rule 13 on making out a sufficient ground by the defendants.
we are of the view that the Division Bench was justified in allowing the applications filed by defendant No.1 under Order 9 Rule 13 of the Code and, in consequence, was justified in setting aside the preliminary decree dated 25.02.2003 passed in O.S. No.131/1999 treating the said decree as "ex parte decree".

Hon'ble Mr. Justice Abhay Manohar Sapre
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.25822583 OF 2011
G. Ratna Raj (D) by LRs. ….Appellant(s)
VERSUS
Sri Muthukumarasamy Permanent
Fund Ltd. & Anr. ….Respondent(s)

J U D G M E N T
Abhay Manohar Sapre, J.
1. Application for substitution is allowed.
2. These appeals are directed against the final
judgment and order dated 11.01.2008 passed by
the High Court of Judicature at Madras in O.S.A.
Nos.299 & 300 of 2006 whereby the Division Bench
1
of the High Court allowed the appeals filed by
respondent No.1 herein.
3. The controversy involved in these appeals lies
in a narrow compass. However, in order to
appreciate the same, few relevant facts need
mention hereinbelow.
4. The original appellantG Ratna Raj (since dead
and now represented by his legal representatives)
was the plaintiff whereas respondent No.1 was
defendant No.1 in the civil suit out of which these
appeals arise. Respondent No.2 is impleaded as
party respondent in this Court by order dated
06.02.2014.
5. The original plaintiff (appellant herein)G
Ratna Raj filed a Civil Suit No.131/1999 against
the defendants (Sri Muthukumaraswamy Fund Ltd.
Respondent No.1 herein and Balajee & Ors.) in the
High Court of Madras on its original side
2
jurisdiction for redemption of mortgage and for
permanent injunction in relation to the mortgaged
property.
6. The defendants on being served entered their
appearance and filed their written statement. The
Trial Court, on the basis of pleadings, framed the
issues. The plaintiff examined himself as PW1. The
defendants crossexamined the plaintiff. Thereafter,
the plaintiff closed his case. The case was
accordingly posted for recording defendants’
evidence.
7. At that stage of the proceedings, the
defendants did not appear in the suit and,
therefore, the Court proceeded ex parte against
them. The proceedings in the suit then continued as
ex parte against the defendants. The plaintiff then
got himself reexamined in the proceedings. He,
however, could not be recrossexamined by the
3
defendants because they were already proceeded ex
parte in the proceedings.
8. The Trial Court (Single Judge) by
judgment/decree dated 25.02.2003 passed a
preliminary decree against the defendants in
relation to the suit property. This led to filing of the
two applications (IA No.340/2006 and IA No.
341/2006) by defendant No.1 before the Trial
Court.
9. So far as IA No. 341/2006 is concerned, it was
filed under Order 9 Rule 13 of Code of Civil
Procedure, 1908 (hereinafter referred to as “the
Code”) for setting aside of the preliminary decree
dated 25.02.2003 and so far as IA No.340/2006 is
concerned, it was filed for condonation of delay in
filing the application under Order 9 Rule 13 of the
Code.
4
10. By order dated 14.03.2006, the Single Judge
dismissed both the applications and held that the
application filed by defendant No.1 under Order 9
Rule 13 of the Code was not maintainable because
the preliminary decree dated 25.02.2003 was not
an "ex parte decree". In other words, he was of the
view that since the preliminary decree dated
25.02.2003 was not an ex parte decree, an
application under Order 9 Rule 13 of the Code
could not be filed for its setting aside.
11. Defendant No.1 felt aggrieved and filed
appeals before the Division Bench of the High
Court. By impugned order, the Division Bench
allowed the appeals and set aside the order of the
Single Judge. The Division Bench held that the
preliminary decree dated 25.02.2003 was an ex
parte decree passed in the civil suit by the Trial
Court (Single Judge) and, therefore, the application
5
filed by defendant No.1 under Order 9 Rule 13 of
the Code was maintainable with a view to find out
as to whether such decree could be set aside under
Order 9 Rule 13 of the Code or not.
12. The Division Bench, therefore, allowed the
application filed by defendant No.1 under Order 9
Rule 13 of the Code subject to their paying a cost of
Rs.10,000/ to the plaintiff. The civil suit was
accordingly restored to its original file for its
disposal on merits in accordance with law. It is
against this order, the plaintiff has felt aggrieved
and filed the present appeals by way of special leave
in this Court.
13. The short question, which arises for
consideration in these appeals, is whether the
Division Bench was justified in setting aside the
preliminary decree dated 25.02.2003 by holding the
6
same to be an "ex parte decree" for the purpose of
Order 9 Rule 13 of the Code.
14. Heard learned counsel for the parties.
15. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in these appeals.
16. In our opinion, the question involved in these
appeals is required to be decided keeping in view
the provisions of Order 9 Rule 6 (a) and Order 17
Rules 2 and 3 of the Code.
“Order 9 Rule 6 (1)(a)
6. Procedure when only plaintiff appears (1)
Where the plaintiff appears and the
defendant does not appear when the suit is
called on for hearing, then
(a) When summons duly served – If it is
proved that the summons was duly served,
the Court may make an order that the suit be
heard ex parte;”
17. Rule 6(1)(a) provides that where the plaintiff
appears and the defendant does not appear when
the suit is called on for hearing, then if the
7
summons is held duly served on the defendant, the
Court may make an order that the suit be heard ex
parte.
18. Order 17 Rules 2 and 3 read as under :
“Order 17 Rules 2 & 3
2. Procedure if parties fail to appear on day
fixed.—Where, on any day to which the
hearing of the suit is adjourned, the parties
or any of them fail to appear, the court may
proceed to dispose of the suit in one of the
modes directed in that behalf by Order IX or
make such other order as it thinks fit.
Explanation.—Where the evidence or a
substantial portion of the evidence of any
party has already been recorded and such
party fails to appear on any day to which the
hearing of the suit is adjourned, the court
may, in its discretion, proceed with the case
as if such party were present.
3. Court may proceed notwithstanding
either party fails to produce evidence, etc.—
Where any party to a suit to whom time has
been granted fails to produce his evidence, or
to cause the attendance of his witnesses, or
to perform any other act necessary to the
further progress of the suit, for which time
has been allowed, the court may,
notwithstanding such default,—
(a) if the parties are present, proceed to
decide the suit forthwith; or
8
(b) if the parties are, or any of them is,
absent, proceed under Rule 2.”
19. Order 17 Rule 2 of the Code provides that
where, on any day to which the hearing of the suit
is adjourned, the parties or any of them fail to
appear, the Court may proceed to dispose of the suit
in one of the modes directed in that behalf by order
IX or make such other order as it thinks fit.
20. The Explanation appended to Order 17 Rule 2
of the Code provides that where the evidence or a
substantial portion of the evidence of any party has
already been recorded and such party fails to
appear on any day to which the hearing of the suit
is adjourned, the court may, in its discretion,
proceed with the case as if such party was present.
21. Order 17 Rule 3 of the Code, however,
provides that where any party to a suit to whom
time has been granted fails to produce his evidence,
or to cause the attendance of his witnesses, or to
9
perform any other act necessary to the further
progress of the suit, for which time has been
allowed, the Court may, notwithstanding such
default, (a) if the parties are present, proceed to
decide the suit forthwith, or (b) if the parties are, or
any of them is, absent, proceed under Rule 2.
22. The scope of Order 17 Rule 2 and Order 17
Rule 3 of the Code came up for consideration before
this Court in the case of B. Janakiramaiah Chetty
vs. A.K. Parthasarthi & Ors., (2003) 5 SCC 641
wherein Justice Arijit Pasayat speaking for the
Bench held in paras 7 to 10 as under:
“7. In order to determine whether the
remedy under Order 9 is lost or not what is
necessary to be seen is whether in the first
instance the Court had resorted to the
Explanation of Rule 2.
8. The Explanation permits the court in its
discretion to proceed with a case where
substantial portion of evidence of any party
has already been recorded and such party
fails to appear on any day to which the
hearing of the suit is adjourned. As the
10
provision itself shows, discretionary power
given to the court is to be exercised in a
given circumstance. For application of the
provision, the court has to satisfy itself that:
(a) substantial portion of the evidence of any
party has been already recorded; (b) such
party has failed to appear on any day; and (c)
the day is one to which the hearing of the
suit is adjourned. Rule 2 permits the court to
adopt any of the modes provided in Order 9
or to make such order as he thinks fit when
on any day to which the hearing of the suit is
adjourned, the parties or any of them fail to
appear. The Explanation is in the nature of
an exception to the general power given
under the rule, conferring discretion on the
court to act under the specified circumstance
i.e. where evidence or a substantial portion of
evidence of any party has been already
recorded and such party fails to appear on
the date to which hearing of the suit has
been adjourned. If such is the factual
situation, the court may in its discretion
deem as if such party was present. Under
Order 9 Rule 3 the court may make an order
directing that the suit be dismissed when
neither party appears when the suit is called
on for hearing. There are other provisions for
dismissal of the suit contained in Rules 2, 6
and 8. We are primarily concerned with a
situation covered by Rule 6. The crucial
words in the Explanation are “proceed with
the case”. Therefore, on the facts it has to be
seen in each case as to whether the
Explanation was applied by the court or not.
9. In Rule 2, the expression used is “make
such order as it thinks fit”, as an alternative
11
to adopting one of the modes directed in that
behalf by Order 9. Under Order 17 Rule 3(b),
the only course open to the court is to
proceed under Rule 2, when a party is absent.
Explanation thereto gives a discretion to the
court to proceed under Rule 3 even if a party
is absent. But such a course can be adopted
only when the absentee party has already led
evidence or a substantial part thereof. If the
position is not so, the court has no option
but to proceed as provided in Rule 2. Rules 2
and 3 operate in different and distinct sets of
circumstances. Rule 2 applies when an
adjournment has been generally granted and
not for any special purpose. On the other
hand, Rule 3 operates where the adjournment
has been given for one of the purposes
mentioned in the rule. While Rule 2 speaks of
disposal of the suit in one of the specified
modes, Rule 3 empowers the court to decide
the suit forthwith. The basic distinction
between the two rules, however, is that in the
former, any party has failed to appear at the
hearing, while in the latter the party though
present has committed any one or more of
the enumerated defaults. Combined effect of
the Explanation to Rule 2 and Rule 3 is that
a discretion has been conferred on the court.
The power conferred is permissive and not
mandatory. The Explanation is in the nature
of a deeming provision, when under given
circumstances, the absentee party is deemed
to be present.
10. The crucial expression in the Explanation
is “where the evidence or a substantial
portion of the evidence of a party”. There is a
positive purpose in this legislative
12
expression. It obviously means that the
evidence on record is sufficient to
substantiate the absentee party’s stand and
for disposal of the suit. The absentee party is
deemed to be present for this obvious
purpose. The court while acting under the
Explanation may proceed with the case if
that prima facie is the position. The court
has to be satisfied on the facts of each case
about this requisite aspect. It would be also
imperative for the court to record its
satisfaction in that perspective. It cannot be
said that the requirement of substantial
portion of the evidence or the evidence
having been led for applying the Explanation
is without any purpose. If the evidence on
record is sufficient for disposal of the suit,
there is no need for adjourning the suit or
deferring the decision.”
23. Now when we examine the facts of the case at
hand keeping in view the law laid down in the case
of B Janakiramaiah Chetty (supra), we find that
the plaintiff’s evidence was recorded and his case
was also closed. It is not in dispute that the
defendants were placed ex parte on the date when
the case was fixed for recording defendants’
evidence but the same was not recorded due to the
13
defendants’ absence on the said date. In other
words, it was a case where the defendants did not
lead any evidence.
24. In such a situation arising in the case, in our
view, the case at hand would not fall under
Explanation to Order 17 Rule 2 of the Code because
in order to attract the Explanation, "such party"
which has led evidence or has led substantial part
of the evidence, if fails to appear on any day to
which the hearing of the case is adjourned, the
Court may treat “such party” as "present" on that
day and is accordingly empowered to proceed in the
suit.
25. In this case, the party, who was absent and
was proceeded ex parte was the "defendants" and
they had not led any evidence whereas it was the
plaintiff, who was present and had led his evidence.
14
26. In other words, if the plaintiff had remained
absent and was found to have led evidence, the
Court could have invoked its powers under
Explanation to Order 17 Rule 2 of the Code treating
the plaintiff as "present" for passing appropriate
orders. Such is, however, not the case here.
27. Similarly, in converse situation, if the
defendants had remained absent (as has happened
in this case) on that date and if it would have
noticed that they had adduced the evidence either
fully or substantially prior to the date on which they
were proceeded ex parte, the Court could have
invoked its powers under Explanation to Order 17
Rule 2 of the Code treating the defendants as
"present" on that day for passing appropriate orders
in the suit. Such is, however, again not the case
here.
15
28. We are, therefore, of the view that since the
defendants were proceeded ex parte and were found
not to have led any evidence in the suit, the Court
could only proceed under Order 17 Rule 3 (b) read
with Order 17 Rule 2 of the Code for disposal of the
suit by taking recourse to one of the modes directed
in that behalf by Order 9 of the Code or could have
made any other order as it thinks fit.
29. As mentioned above, the Trial Court did
proceed to hear the suit ex parte by taking recourse
to the Order 9 Rule 6 (a) in terms of Order 17 Rule 2
of the Code because on that day, the plaintiff was
present when the suit was called on for hearing
whereas the defendants were absent despite service
of summons and accordingly the Trial Court passed
16
the preliminary decree. Such decree, in our opinion,
was an "ex parte decree" within the meaning of
Order 9 Rule 6 (a) read with Order 9 Rule 13 of the
Code and, therefore, could be set aside under Order
9 Rule 13 on making out a sufficient ground by the
defendants.
30. In view of the foregoing discussion, we are of
the view that the Division Bench was justified in
allowing the applications filed by defendant No.1
under Order 9 Rule 13 of the Code and, in
consequence, was justified in setting aside the
preliminary decree dated 25.02.2003 passed in
O.S. No.131/1999 treating the said decree as "ex
parte decree".
31. So far as the finding on the question of
sufficient ground for setting aside of the ex parte
decree is concerned, suffice it to say, it being a pure
question of fact, the same does not call for any
17
interference by this Court. A finding on such
question is binding on this Court. Moreover, we find
that the Division Bench imposed a cost of
Rs.10,000/ on defendant No.1 payable to the
plaintiff as condition for setting aside the ex parte
decree. Defendant No.1, therefore, must pay the
cost to the plaintiff.
32. As a result of the foregoing discussion, we find
no merit in these appeals, which are accordingly
dismissed.
33. The Trial Court (Single Judge) is now directed
to decide the Original Suit No. 131/1999 on merits
in accordance with law preferably within a period of
one year as an outer limit. Since the original
plaintiff has died and his legal representatives are
already brought on record in these appeals, the
Trial Court will permit the plaintiff to amend the
cause title in the plaint and bring on record the
18
legal representatives(appellants herein) to enable
them to prosecute the suit on merits in accordance
with law.
………...................................J.
[ABHAY MANOHAR SAPRE]

....……..................................J.
[DINESH MAHESHWARI]
New Delhi;
February 01, 2019.
19

All India Institute of Medical Sciences …Appellant Versus Sanjiv Chaturvedi & Ors. …Respondents

1
REPORTABLE
THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVILAPPEAL NO. 1392 OF 2019
(@ SLP(C) NO. 27490 OF 2018)
All India Institute of Medical Sciences …Appellant
Versus
Sanjiv Chaturvedi & Ors. …Respondents
J U D G M E N T
Indira Banerjee, J.
Leave granted.
2. This appeal is against the final judgment and order dated
21.08.2018 passed by a Division Bench of the High Court of
Uttarakhand at Nainital allowing the writ petition being WPSB
No.359 of 2018 filed by the respondent no.1 and quashing the
order dated 18.09.2017 passed by the Chairman of the Central
Administrative Tribunal (hereinafter referred to as “CAT”) at the
Principal Bench at Delhi, inter alia, staying proceedings in OA
331/00790/ 2017 filed by the respondent no.1 and pending
before a Division Bench of CAT at Nainital.
3. The respondent no.1, an Indian Forest service officer of the
Uttarakhand cadre of 2002 Batch was posted as Deputy
2
Secretary at the All India Institute of Medical Sciences, New
Delhi from 29.6.2012 till 28.6.2016.
4. The said post of Deputy Secretary was created with the
approval of the Department of Expenditure, inter alia, to
coordinate and manage infrastructure projects and ensure their
timely completion, to exercise management and control of the
Institute and to coordinate with Multi Disciplinary Experts.
5. At its 195th meeting held on 20.7.2010, the Standing
Finance Committee of the Institute decided against the creation
of a new post of Central Vigilance Officer and resolved that the
work of Central Vigilance Officer should also be assigned to the
officer, joining the newly created post of Deputy Secretary of
AIIMS. The Governing Body and Institute body of AIIMS headed
by the Union Health Minister ratified the decision of the
Standing Finance Committee.
6. An order dated 23.6.2011 was issued by the Ministry of
Health and Family Welfare enumerating the duties pertaining to
the said post of Deputy Secretary of AIIMS.
7. As stated above, respondent no.1 was appointed Deputy
Secretary of AIIMS on 29.6.2012. As per the work allocation
order the respondent no.1 was also made Central Vigilance
Officer of the AIIMS.
3
8. It is the case of the respondent no.1 that the work of the
General Section was withdrawn from the respondent no.1 in
November 2012, the work of Central Vigilance Officer was
withdrawn from him in August 2014, the work of dealing with
grievances was withdrawn from him some time in 2015 and in
December 2015 the work of the Estate Section was withdrawn
from him. Ultimately the respondent no.1 was left practically
without any work, apart from signing pension papers and
booking guest houses.
9. According to the respondent no.1, there was delay in
completion of infrastructure projects, which along with the way
in which the respondent no.1 had been denuded of duties by
successive office orders, attracted severe criticism in a report
of the Parliamentary Committee.
10. According to the respondent no.1, at the time when he
was assigned the work of Central Vigilance Officer, the then
Health Secretary had commented on his “exemplary
performance” and “absolute integrity”. Moreover, the
respondent no.1 was, in his Annual Performance Appraisal
Reports for the years 2012-13 and 2013-14 graded as
‘outstanding’, with the following remarks by the then Union
Health Minister “Shri Sanjiv Chaturvedi, Deputy Secretary and
CVO, AIIMS, New Delhi, is a man of integrity, sincerity, who is
keen on performing his assigned role to the best of his ability
4
and knowledge without fear or favour”.
11. The respondent no.1 had been awarded the Ramon
Magsaysay Award for the year 2015 in recognition of his
exemplary integrity, courage and tenacity, inter alia, in
uncompromisingly exposing and painstakingly investigating
corruption in public office. Records reveal that the respondent
no.1 had donated the award money of Rs.14,23,000/- to the
Prime Minister’s Relief Fund after the All India Institute of
Medical Sciences refused to accept his donation of the award
money to the All India Institute of Medical Sciences for free
treatment of under privileged patients.
12. According to the respondent no.1, no complaint of any
kind was received against him from any employee during his
two year tenure as Central Vigilance Officer of the Institute.
However, the very same persons, who had earlier showered
praises on the respondent no.1 turned against him for
extraneous reasons, particularly his role in exposing
corruption.
13. Being aggrieved, the respondent no.1 filed an application
being O.A. No.1887 of 2015 before the Principal Bench of the
CAT at Delhi, inter alia, for directions on the concerned
authorities to allocate the work of Deputy Secretary to the
respondent no.1. The said application has been dismissed by
a judgment and order dated 17.5.2016.
5
14. The respondent no.1 has alleged that the duties of Central
Vigilance Officer were withdrawn from him as he had unearthed
irregularities and corruption in infrastructure projects. The
nature or reasons for the disputes between the respondent no.1
and the appellant are not relevant to the issues involved in this
appeal.
15. A memorandum dated 7.1.2016 was served on the
respondent no.1, informing him that the Director of the All
India Institute of Medical Sciences had placed on record his
displeasure with insubordination, indiscipline and lack of work
ethics of the respondent no.1 during the Winter Session of
Parliament in the year 2015, and directed that a copy of the
said memorandum be kept in the personal file of the
respondent no.1. A representation made by the respondent
no.1 against the aforesaid memorandum was rejected by the
Competent Authority.
16. Being aggrieved, the respondent no.1 filed OA No.1342 of
2016 before the Principal Bench of the CAT at New Delhi
challenging the said Memorandum dated 7.1.2016 and praying
for orders, restraining the Director of the All India Institute of
Medical Sciences from writing the Annual Performance
Appraisal Report of the respondent no.1. The said application is
pending. On the application being filed, the learned Tribunal
6
directed issuance of notices, but declined the prayer of the
respondent no.1 for interim relief.
17. On 28.6.2016, the four year deputation of the respondent
no.1 as Deputy Secretary at AIIMS came to an end, and he
joined his new post at Uttarakhand in August, 2016, after
availing leave of two months.
18. By an order dated 11.1.2017 AIIMS communicated an
adverse Annual Confidential Report for the year 2015 -2016 to
the respondent no.1 wherein he had uniformly been given
‘Zero’ grading in all attributes. On 23.1.2017, the respondent
no.1 filed an appeal against the order dated 11.1.2017 before
the Competent Authority. The appeal was rejected by an order
dated 15/20.4.2017.
19. On 19.6.2017, the respondent no.1 filed a writ petition
being WPSB No.225 of 2017 before the Uttarakhand High Court
challenging the orders dated 11.1.2017 and 15/20.4.2017. The
respondent no.1 also filed an application being PT No.286/2017
in OA No. 1342/2016 before the Principal Bench of the CAT at
Delhi for transfer of OA No. 1342/2016 from the Principal
Bench of the CAT at Delhi to its Bench at Nainital. The
appellant has filed a counter affidavit to the said application.
20. By an order dated 19.6.2017 in the writ petition being
WPSB No.225 of 2017, the Division Bench of Uttarakhand High
Court relegated the respondent no.1 to approach the Tribunal
7
under the Administrative Tribunals Act, 1985 (for short ‘the
Act’) and to seek all reliefs available to him. The respondent
no.1 was given the liberty to approach the High Court in the
event any relief prayed for by the respondent was rejected by
the Tribunal.
21. Thereafter, the respondent no.1 instituted an application
being OA No.331/00790/2017 before the Nainital Bench of the
CAT challenging the Annual Performance Appraisal Report
(APAR) of the year 2015-16 whereupon an interim order was
passed in favour of the respondent no.1 on 18.9.2017, by a
Division Bench of the Tribunal, the operative part whereof is set
out hereinbelow:-
“Matter be posted for further hearing on interim
relief on 03.10.2017. Respondents shall file their
reply before the said date. In the meantime, in the
interest of justice, it is directed that if any matter
related to the career progression of the applicant
comes up for consideration before the terms of the
impugned orders shall not be taken into account
while assessing and the applicant’s suitability or
fitness and he shall be considered on the basis of
the rest of his ACRs/APARs.
22. The Union of India filed an application before the Chairman
of the Tribunal being PT 316 /2017 seeking transfer of OA No.
331/00790/2017 to the Principal Bench at Delhi. By an ex
parte order dated 18.9.2017 passed in the said transfer
application, the Chairman of the CAT, sitting singly, stayed
proceedings in OA No.331/00790/2017 pending before a two
8
member Bench at Nainital for a period of six weeks, and
directed that notice be issued to the respondent no.1.
23. Challenging the aforesaid order on the ground that the
Chairman of CAT, sitting singly, could not have stayed
proceedings pending before a Division Bench, the respondent
no.1 filed a writ petition being W.P.(SB) No. 259/2018 in the
High Court of Uttarakhand at Nainital.
24. By the impugned order dated 21.8.2018, which is under
appeal, the High Court allowed the writ petition and set aside
the impugned order dated 18.9.2017 of the Chairman,
observing that the Chairman of the Tribunal, while sitting
singly, could not stay the proceedings pending before the
Division Bench. The High Court imposed costs of Rs.25,000/- on
the appellant.
25. Learned counsel appearing on behalf of the appellant
submitted that the impugned order was passed without giving
the appellant an opportunity of hearing. No Vakalatnama was
executed by the appellant authorizing the learned Additional
Solicitor General of India Shri Rakesh Thapliyal to appear before
the High Court on behalf of AIIMS.
26. Learned Counsel for the appellant next submitted that the
High Court had erred in holding that the Chairman of CAT,
sitting singly, could not stay proceeding before the Division
Bench. He argued that a conjoint reading of the preamble of
9
the Act with Section 5(2), 5(6), the proviso to Section 24 and
Section 25 of the said Act, shows that the Chairman sitting
singly can stay proceedings before any other Bench. Such
power has been conferred upon the Chairman under Section
5(6) read with Section 25 of the Act.
27. Learned counsel submitted that it was necessary for the
Chairman to pass an order of stay of proceedings in O.A.
No.331/790/2017 pending before the Bench at Nainital to avoid
multiplicity of proceedings and for judicial uniformity, more so,
since the lis in OA No.1342 of 2016 before the Principal Bench
and in O.A. No. 331/790/2017 at the Bench at Nainital were
similar. The subject matter of both the applications related to
the APAR of the year 2015-2016.
28. In support of his submission, that the Chairman of the
CAT, considering an application for transfer under Section 25 of
the Act, had the power to stay the proceedings before the
Nainital Bench, of which transfer had been sought, counsel
cited Dr. Mahabal Ram vs. Indian Council of Agricultural
Research and others
1
and L. Chandra Kumar vs. Union of
India & Ors.
2
.
29. Counsel appearing on behalf of the respondent no.1
refuted the submission that the appellant had not been heard
by the High Court, arguing that the appellant had duly been
1 (1994) 2 SCC 401
2 (1997) 3 SCC 261
10
represented by Shri Rakesh Thapliyal, Additional Solicitor
General of India. He submitted that, as per the rules of the
High Court an advance copy of the writ petition had also been
served on the Additional Solicitor General Shri Rakesh
Thapliyal. The Additional Solicitor General and senior
government counsel had been representing both Union of India
and AIIMS in the High Court as well as in Nainital Bench of CAT
where the Union of India and AIIMS had jointly filed reply
through counsel for Union of India.
30. Counsel appearing for the Respondent no.1 emphatically
argued that the Chairman of CAT sitting singly had no power
under the Act to stay the proceedings in a part-heard matter
before a Division Bench of the same Tribunal. It was trite that
a body created by statute could only have those powers
provided by statute and nothing more.
31. Counsel for the respondent no.1 further argued that the
appellant had filed O.A No.331/790 of 2017 pursuant to the
order of the Division Bench of the High Court, in the writ
petition filed by the respondent no.1, being WPSB No.225 of
2017. The order of the Chairman was, thus, in violation of the
order of the Division Bench of the High Court.
32. Counsel appearing for the respondent no.1 also submitted
that under Section 24 of the Act, the maximum duration of an
ex-parte interim order could be two weeks and that too subject
11
to certain conditions, including service of advance copy, which
had not been done in this case. Moreover, there had to be a
prima facie finding that the appellant would suffer irreparable
loss, which could not be monetarily compensated, if no interim
order were passed. In this case, the Chairman passed a nonspeaking interim order for six weeks. The order does not
disclose any urgency or irreparable loss which could not be
monetarily compensated.
33. Counsel for the respondent no.1 also submitted that the
cause of action in OA No. 331/790/2017 was distinct from cause
of action in OA No. 1342/2016. The communication of adverse
APAR for the year 2015-16 gave rise to a fresh cause of action.
Unless challenged, the APAR would have led to adverse
consequences for the respondent no.1, such as, denial of
promotion.
34. Counsel for the respondent no.1 submitted that OA No.
1342/2016 and OA No. 331/790/2017 arose as a result of two
completely different orders and, in any case, the issue of
whether there was similarity of cause of action in the two
proceedings had been dealt with by the Nainital Bench. The
finding of the Nainital Bench had never been challenged by the
appellant and had attained finality.
35. Relying on the judgment of this Court in Ramrameshwari
12
Devi and Ors. v. Nirmala Devi & Ors.
3
, Counsel for the
respondent no.1 submitted that the High Court had rightly
imposed a fine on the appellant, as the appellant had obtained
an ex parte order by misrepresentation.
36. Counsel for the respondent no.1 finally submitted that this
appeal might be dismissed, as it is purely based on perjury and
concealment of facts, citing Kishorbhai Gandubhai Pethani
v. State of Gujarat & Anr.
4
, Kishore Samrite V. State of
Uttar Pradesh & Ors.
5
and Prestige Lights Ltd. v. State
Bank of India
6
.
37. It is not in dispute that the impugned order, under
challenge in this Court, records the appearance of Shri Rakesh
Thapliyal, Additional Solicitor General on behalf of AIIMS as
well. Any objection with regard to erroneous recording of
appearances, or the authority of the learned Additional Solicitor
General of India to represent the AIIMS ought to have been
urged before the High Court by making an appropriate
application. The objection to the appearances of the Additional
Solicitor General, representing the Central government in the
same proceedings, is prima facie preposterous, considering
that the AIIMS is under full control of the Central Government.
It is, however, not for this Court to examine whether the
3 (2011) 8 SCC 249
4 (2014) 13 SCC 539
5 (2013) 2 SCC 398
6 (2007) 8 SCC 449
13
learned Additional Solicitor General of India had been
authorized to appear before the High Court on behalf of AIIMS
or not.
38. The judgments of this Court in Munna Lal Karosia vs.
State of Madhya Pradesh and Others
7 and Association of
Synthetic Fibre Industries vs. Apollo Tyres Limited and
Others
8
, cited by the appellant to argue that a final order
ought not be passed by the High Court against any person
without giving that person an opportunity of hearing, have no
application in the facts and circumstances of this case, since
the appellant had apparently been represented by the
Additional Solicitor General. The judgments were rendered in
the particular facts and circumstances of those cases.
39. In Munna Lal Karosia (supra), the High Court had held
Munna Lal Karosia to be guilty of contempt without hearing
him. It was in the aforesaid context that this Court deprecated
the passing of stigmatic orders against a person without giving
that person an opportunity of hearing. An order of contempt
may be stigmatic. The order under appeal is not so. Imposition
of costs does render an order stigmatic, as sought to be argued
on behalf of the appellant.
40. The main question before this Court is, whether the
Chairman of the Tribunal, sitting singly and exercising his power
7 (2012) 12 SCC 255
8 (2010) 13 SCC 735
14
under Section 25 of the Act, to transfer proceedings from one
Bench to another, could have stayed proceedings before a two
member Bench and rendered interim orders passed by that
Bench inoperative. The answer to the aforesaid question has to
be in the negative for the reasons discussed hereinafter.
41. The Act has been enacted in pursuance of Article 323 A,
inserted into the Constitution of India by the Constitution (42nd
Amendment) Act, 1976, which enables Parliament to enact law
to provide for adjudication and/or trial by Administrative
Tribunals of disputes in respect of recruitment and conditions of
service of persons in public services and posts inter alia in
connection with the Union of India and authorities under its
control.
42. As observed by the Supreme Court in Vatticherukuru
Village Panchayat v. Nori Venkatarama Deekshithulu
and Ors.
9
, the Parliament has enacted Article 323A for the
reason that the Civil Courts, gripped with rules of pleading and
strict rules of evidence and tardy trial, four-tier appeals,
endless revisions and reviews under the Civil Procedure Code,
are not suited to the need for expeditious dispensation of
litigation relating to services.
43. CAT has been established under Section 4 of the Act and
exercises jurisdiction, powers and authority as stipulated in
9 (1991) Supp. (2) SCC 228
15
Section 14 of the Act.
44. Under Section 14(1) read with 14(3) of the Act, CAT
exercises all the jurisdiction authority and powers, exercised by
all Courts except the Supreme Court before the establishment
of a Tribunal under the Act.
45. Even though the Evidence Act and Civil Procedure Code
may not apply to Tribunals constituted in pursuance of Article
323 A of the Constitution, such Tribunals, like ordinary law
courts are bound by rules of evidence and procedure as laid
down under the law under which the Tribunal is constituted
and/or the rules and regulations framed thereunder and are
required to determine the lis brought before them strictly in
accordance with the law.
46. The preamble to the Act states the object of the Act,
which is to provide for adjudication or trial by Administrative
Tribunals, of disputes and complaints in respect of recruitment
and conditions of service of persons appointed to public
services and posts in connection with the affairs of the Union or
of any State or of any local or other authority within the
territory of India or under the control of the Government of
India or of any corporation owned or controlled by the
Government, in pursuance of Article 323A of the Constitution of
India and for the matters connected therewith or incidental
thereto.
16
47. The reference by Counsel for the appellant to the
Preamble of the Act is of no relevance. The respondent no.1
approached the Tribunal for redressal of his grievances. His
case was heard by a Division Bench and a reasoned interim
order passed on 18.9.2017. The preamble, which states the
aims and objects of the Act is of no assistance to the appellant,
as it does not lend support to appellant’s contention that the
Chairman of the Tribunal sitting singly could have stayed
further proceedings before a Division Bench. The reliance
placed by Counsel on the Preamble is misconceived.
48. Sections 5, 24 and 25 of the Act provide as follows:-
5. Composition of Tribunals and Benches thereof.—
(1) Each Tribunal shall consist of a Chairman and such
number of Judicial and Administrative Members as the
appropriate Government may deem fit and, subject to the
other provisions of this Act, the jurisdiction, powers and
authority of the Tribunal may be exercised by Benches
thereof.
(2) Subject to the other provisions of this Act, a Bench
shall consist of one Judicial Member and one
Administrative Member.
(3) Omitted
(4) Notwithstanding anything contained in sub-section (1),
the Chairman—
(a) may, in addition to discharging the functions of the
Judicial Member or the Administrative Member of the
Bench to which he is appointed, discharge the functions of
the Judicial Member or, as the case may be, the
Administrative Member, of any other Bench;
(b) may transfer a Member from one Bench to another
Bench;
(c) may authorise the Judicial Member or the
Administrative Member appointed to one Bench to
discharge also the functions of the Judicial Member or the
17
Administrative Member, as the case may be, of another
Bench; and
(d) may, for the purpose of securing that any case or
cases which, having regard to the nature of the questions
involved, requires or require, in his opinion or under the
rules made by the Central Government in this behalf, to
be decided by a Bench composed of more than two
Members issue such general or special orders, as he may
deem fit:
Provided that every Bench constituted in pursuance of this
clause shall include at least one Judicial Member and one
Administrative Member.
(6) Notwithstanding anything contained in the foregoing
provisions of this section, it shall be competent for the
Chairman or any other Member authorised by the
Chairman in this behalf to function as a Bench consisting
of a single Member and exercise the jurisdiction, powers
and authority of the Tribunal in respect of such classes of
cases or such matters pertaining to such classes of cases
as the Chairman may by general or special order specify:
Provided that if at any stage of the hearing of any such
case or matter it appears to the Chairman or such
Member that the case or matter is of such a nature that it
ought to be heard by a Bench consisting of two Members,
the case or matter may be transferred by the Chairman
or, as the case may be, referred to him for transfer to,
such Bench as the Chairman may deem fit.
(7) Subject to the other provisions of this Act, the Benches
of the Central Administrative Tribunal shall ordinarily sit at
New Delhi (which shall be known as the principal Bench),
Allahabad, Calcutta, Madras, New Bombay and at such
other places as the Central Government may, by
notification, specify.
(8) Subject to the other provisions of this Act, the places
at which the principal Bench and other Benches of a State
Administrative Tribunal shall ordinarily sit shall be such as
the State Government may, by notification, specify.
xxx xxx xxx xxx
24. Conditions as to making of interim orders. -
Notwithstanding anything contained in any other
provisions of this Act or in any other law for the time being
in force, no interim order (whether by way of injunction or
stay or in any other manner) shall be made on, or in any
proceedings relating to, an application unless -
18
(a) copies of such application and of all
documents in support of the plea for such interim
order are furnished to the party against whom such
application is made or proposed to be made; and
(b) opportunity is given to such party to be heard
in the matter:
Provided that a Tribunal may dispense with the
requirements of clauses (a) and (b) and make an interim
order as an exceptional measure if it is satisfied, for
reasons to be recorded in writing, that it is necessary so to
do for preventing any loss being caused to the applicant
which cannot be adequately compensated in money but
any such interim order shall, if it is not sooner vacated,
cease to have effect on the expiry of a period of fourteen
days from the date on which it is made unless the said
requirements have been complied with before the expiry
of that period and the Tribunal has continued the
operation of the interim order.
25. Power of Chairman to transfer cases from one
Bench to another. - On the application of any of the
parties and after notice to the parties, and after hearing
such of them as he may desire to be heard, or on his own
motion without such notice, the Chairman may transfer
any case pending before one Bench, for disposal, to any
other Bench.
49. Section 5 provides that a Tribunal is to consist of a
Chairman and such number of judicial and administrative
members as the appropriate Government may deem fit and,
subject to the other provisions of the Act, the jurisdiction,
powers and authority of the Tribunal may be exercised by the
Benches thereof. Sub-section 2 provides that a Bench is to
consist of one Judicial Member and one Administrative Member.
This, however, is subject to the other provisions of the said Act.
50. The Chairman of the Tribunal is an entity distinct from the
Tribunal and exercises administrative powers and such other
19
powers as are expressly conferred o him under the Act. Section
5(4)(a) of the Act empowers the Chairman to discharge in
addition to the functions of the Judicial Member or the
Administrative Member, of the Bench to which he is appointed,
the functions of the Judicial Member or the Administrative
Member of any other Bench.
51. Section 5(4)(b) empowers the Chairman to transfer a
Member from one Bench to another Bench, and Section 5(4)(c)
enables the Chairman to authorize the Judicial Member or the
Administrative Member of one Bench to discharge the duties
and functions of Judicial Member or Administrative Member, as
the case may be, of any other Bench. The Chairman can also
constitute Benches of more than two Members having regard to
the nature of the cases involved, by issuance of general or
special orders.
52. Section 5(6) enables the Chairman or any other Member
authorized by the Chairman to function as a Single Bench and
exercise jurisdiction, powers and authority of the Tribunal in
respect of such classes of cases or such matters pertaining to
such classes of cases as the Chairman may by general or
special order specify.
53. The proviso to Section 5(c) of the Act states that if at any
stage of hearing of any such case or matter it appears to the
Chairman or the Member functioning singly that the case or
20
matter is of such a nature that it ought to be heard by a Bench
consisting of two Members, the case or matter may be
transferred by the Chairman, or as the case may be, referred to
him for transfer to such Bench as the Chairman may deem fit.
54. A perusal of Section 5 indicates that the Chairman is
empowered to discharge administrative functions of
constituting Benches by transferring a Member from one Bench
to another, authorizing the Judicial Member or the
Administrative Member appointed to one Bench to discharge
the functions of Judicial Member or Administrative Member of
another Bench.
55. Sub-section (6) of Section 5 empowers the Chairman or
any other Member authorized by the Chairman to sit singly to
exercise jurisdiction, powers and authority of the Tribunal only
in respect of such classes of cases or such matters pertaining
to such classes of cases as the Chairman might, by general or
special orders specify. The aforesaid provision does not enable
the Chairman sitting singly to nullify orders passed by a larger
Bench.
56. Section 24 of the Act limits the power to pass interim order
whether by way of injunction, stay or otherwise by imposing
conditions on the exercise of such power. No interim order is to
be made unless copies of the application along with documents
in support of the plea for interim order are furnished to the
21
party against whom such application is made and opportunity
to the heard is given to such party.
57. The aforesaid condition can only be dispensed with in
exceptional cases, if the Tribunal is satisfied, for reasons to be
recorded in writing, that it is necessary to pass an interim order
for preventing any loss to the applicant which cannot
adequately be compensated in money. The interim order, in
such case is to be of maximum duration of fourteen days
unless the requirements of sub-sections (a) and (b) are
complied with, before the expiry of fourteen days and the
interim order is extended.
58. The power under Section 25 of the Act to transfer cases
from one Bench to another is essentially an administrative
power of the Chairman of CAT. Such power is to be exercised
by the Chairman on his own motion or on the application of any
of the parties after notice to the parties, and after hearing such
of them as he may desire to be heard. The Chairman may, on
his motion, transfer any case pending before one Bench to
another without notice.
59. A careful reading of Section 25 of the Act makes it clear
that the Chairman deciding the question of whether a matter
should be transferred from one Bench to another cannot grant
interim stay of proceedings, their being no power conferred on
the Chairman under the said section to pass such interim stay.
22
60. Power under Section 24 to grant interim orders has been
conferred on the Tribunal, and/or in other words, a Bench of the
Tribunal in seisin of proceedings in respect of which the Bench
is entitled to exercise the jurisdiction and powers of the
Tribunal.
61. A Tribunal created under the Act as also its Chairman
derives its powers from the Act and can only exercise such
powers as are conferred by the Act. The Chairman of the
Tribunal exercising its power under Section 25 of the Act does
not function as a Tribunal. The proposition that the power to
grant interim relief must expressly be provided by statute finds
support from the judgment of the Supreme Court in Morgan
Stanley Mutual Fund vs. Kartick Das
10
. The Chairman of
CAT does not have power under Section 25 to pass any interim
order of stay of proceedings pending before a Bench of the
Tribunal.
62. A careful reading of the provisions of the Act and in particular
Sections 14 and 15 thereof in juxtaposition with Article 323A of the
Constitution leaves no manner of doubt that an Administrative
Tribunal constituted under the Act to give effect to Article 323A of
the Constitution exercises all the jurisdiction powers and authority
exercisable by all the Courts before commencement of the Act and
has all the attributes of a Court of law except that it is not bound
by the strict rules of procedure embodied in the Civil Procedure
10 (1994) 4 SCC 225
23
Code or the strict rules of evidence prescribed by the Evidence
Act, as observed above. All norms of judicial propriety and judicial
discipline apply as much to the Tribunal as to Courts including the
High Court.
63. A judicial order passed by a Tribunal is binding on all
concerned, including the Tribunal itself on its administrative side,
unless set aside or modified by a higher forum in exercise of
appellate or revisional powers. In no circumstance, can a judicial
order of a Bench of the Tribunal be nullified or rendered nugatory
by its Chairman.
64. In view of Section 12 of the Act, the Chairman of the Tribunal
can only exercise financial and administrative powers over the
Benches as may be vested under the Rules. The Chairman may
thus constitute Benches, shift members from one Bench to
another, constitute Single Benches, Division Benches and even
larger Benches, allocate business to the Benches and even transfer
cases from one Bench to the other, but having done so he cannot
interfere with the functioning of the Benches or tinker with its
orders by passing interim orders in a transfer petition.
65. In any case, judicial decorum and propriety demands that a
judicial order, ad interim, interim or final be vacated, varied,
modified, recalled or reviewed by a Bench of coordinate strength or
larger strength or a higher forum, but not a smaller Bench of lesser
strength, except in cases where such authority to a lower forum
and/or smaller Bench is expressly conferred or implicit in the order
24
sought to be vacated, varied, modified, recalled or reviewed.
66. In Union of India and Anr. vs. K. S. Subramanian
11
,
the Supreme Court observed that the proper course for a High
Court was to try to find out and follow the opinion expressed by
larger benches of this Court in preference to those expressed
by smaller Benches of the Supreme Court and that was the
practice also to be followed by the Supreme Court itself. The
practice has now crystallized into a rule of law declared by the
Supreme Court. A similar view was taken by the Supreme
Court in Bharat Petroleum Corporation Ltd. vs. Mumbai
Shramik Sangha & Ors.
12
. A five Judge Constitution Bench
of the Supreme Court observed that the decision of a
Constitution Bench of the Supreme Court would bind a Bench of
two judges of the Supreme Court and that judicial discipline
obliged them to follow it, regardless of their doubts about its
correctness.
67. It is true that the interim order passed by a Court does not
operate as a precedent and the law declared by the Supreme
Court with regard to the precedential value of judgments of
Benches of larger strength may not operate as a binding
precedent in the facts and circumstances of this case. The
judgments referred to in the preceding paragraphs lay down
the norms of judicial decorum and propriety which give
11 (1976) 3 SCC 677
12 (2001) 4 SCC 448
25
precedence to Benches of higher strength. There is no reason
at all why the same principles should not apply even to interim
orders in pending proceedings.
68. An interim order passed by a court, on consideration of the
prima facie case made out by an applicant, should ordinarily
have been vacated by a Bench of coordinate strength after
giving open notice to the applicant. If the Chairman was of the
considered opinion that there was urgency in the application for
vacating the interim order, the Chairman ought to have
assigned the application for vacating and/or vacation of the
interim order to a Bench of two or more Members to consider
whether the interim order should continue or be vacated. The
Chairman could also have exercised his power to suo motu
transfer the proceedings to another Bench without prior notice.
The order of stay of the proceedings before the Nainital Bench
is without jurisdiction and unsustainable in law.
69. Neither the judgment of the Constitution Bench of this
Court in L. Chandra Kumar (supra) nor the judgment of the
Division Bench of this Court in Dr. Mahabal Ram vs. Indian
Council of Agricultural Research and Others is an
authority for the proposition that the Chairman of CAT, sitting
singly to decide on application for transfer under Section 25 of
the Act, can stay the proceeding before a two Member Bench or
interfere with the orders of a two Member Bench.
26
70. In L. Chandra Kumar (supra), cited on behalf of the
appellant, a Constitution Bench of seven Judges of the Supreme
Court held that the power of judicial review vested in the High
Court under Article 226 and in the Supreme Court under Article
32 of the Constitution was an integral and essential feature of
the Constitution constituting part of its basic structure.
Ordinarily, therefore, the power of the High Courts and the
Supreme Court to test the constitutional validity of legislations
could never be ousted or excluded. The power vested in the
High Court to exercise judicial superintendence over the
decision of all Courts and Tribunals within their respective
jurisdictions was also part of the basic structure of the
Constitution. Further, in L. Chandra Kumar (supra), this Court
upheld the vires of Section 5(6) of the Act observing that
Section 5(6) could harmoniously operate with Section 5(2) in
view of the proviso to Section 5(6). This Court also held that
the Tribunals are even competent to hear matters where vires
of statutory provisions are questioned, except where the vires
of their parent statute is in question, following the settled
principle that a Tribunal which is the creature of a statute
cannot declare that very statute to be unconstitutional. In such
cases alone, the High Court might be approached directly.
However, in discharging the duty of deciding vires of statutory
provisions, Tribunals cannot act as substitute for the High
Courts and the Supreme Court. Their function is
27
supplementary and all such decision of the Tribunals would be
subject to scrutiny before the Division Bench of the respective
High Courts.
71. In L. Chandra Kumar (supra) this Court held that
whenever any question involving the interpretation of a
statutory provision or rule in relation to Constitution arose for
consideration of a Single Bench of the Administrative Tribunal,
the provision to Section 5(6) would automatically apply and the
Chairman or the member concerned would be obliged to refer
the matter to a Bench consisting of at least two members one
of whom must be a judicial member. This would ensure that
questions involving vires of statutory provisions or rules would
never arise for adjudication before a Single Member Bench or a
Bench which does not consist of a judicial member. So
construed, Section 5(6) would no longer be susceptible to
charges of unconstitutionality and, therefore, valid and
constitutional.
72. In Dr. Mahabal Ram vs. Indian Council of Agricultural
Research and Others
13
, the Supreme Court held that subsections (2) and (6) appearing as limbs of the same Section 5
of the Act, have to be harmoniously construed. While
allocating work to a single Member, whether Judicial or
Administrative in terms of sub-section (6), the Chairman should
keep in view the nature of the litigation and where questions of
13 . (1994) 2 SCC 401
28
law or interpretation of constitutional provisions are involved,
they should not be assigned to a single Member. It would be
open to either party appearing before the single Member to
suggest to that Member hearing the matter that it should go to
a Bench of two Members. The Member should ordinarily allow
the matter to go to a Bench of two Members when so
requested. However, the contention that the single Member
contemplated under sub-section (6) had to mean a Judicial
Member only, was not accepted. In Dr. Mahabal Ram (supra),
the question was whether a Bench consisting of a single
Member under Section 5(6) necessarily had to be a Bench
comprising of a judicial member.
73. In our considered view, the Division Bench rightly allowed
the writ petition. The Chairman, like the Chief Justice of the
Higher Courts or the Chief Judge of subordinate courts, may be
higher in order of protocol and may have additional
administrative duties and responsibilities. However, the
Chairman, acting judicially, is equal to any other Member. The
Chairman, being one amongst equals, could not have stayed
proceedings pending before a larger Bench. We find no grounds
to interfere with the reasoning of the High Court. The High
Court rightly allowed the writ petition with costs. Since we
have upheld the order of the Division Bench of the HighCourt
under appeal and held that the order of the Chairman of CAT
staying proceedings before the two member Bench was without
29
jurisdiction and unsustainable in law, we need not go into the
various other contentions raised on behalf of the respondent
no.1.
74. The appeal is dismissed with costs, quantified at
Rs.25,000/-, to be deposited with the Supreme Court Legal
Services Committee within four weeks from the date.
.................................J.
(R. BANUMATHI)
.................................J.
(INDIRA BANERJEE)
NEW DELHI
FEBRUARY 01, 2019

Tuesday, January 29, 2019

Whether a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. ?

Whether a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. ?

2019 ACJ- APEX COURT JUDGMENTS VOL.NO.1/2019 APEX COURT DIGEST VOL.NO.1

15. Generally, it is not open to the High Court to interfere with the findings of fact recorded by the First Appellate Court when such findings are based on the evidence on record, and are not perverse or against the material on record. - A suit came to be filed for declaration of title and for

possession by Respondent No. 1 herein. Undisputedly, the plaintiff Moti Ram had no document of title to prove his possession, but claimed possessory title based on prior

possession for a number of years. Per contra, the defendants relied on two sale deeds, viz., Ex. A6 dated 06.02.1956, executed by the original owner Khoom Singh in favour of Purkha Ram, and Ex. A2 dated 21.06.1966, executed by Purkha Ram in favour of the appellant/Defendant No. 1.

However, according to the plaintiff, he had been wrongly dispossessed by defendants on 30.04.1972, which was within the 12 years preceding the filing

of the present suit.

The Trial Court decreed the suit and the First Appellate Court reversed the findings of the Trial Court. The First Appellate Court dismissed the said suit on the ground that the defendants had proved their title and possession over the suit property. - High court reversed the same and restore the trial court judgment - Apex court held that Section 64 of the Limitation Act, 1963 contemplates a suit for possession of immovable property based on previous possession and not on title, if brought within 12 years from the date of dispossession. Such a suit is known in law as a suit based on possessory title as distinguishable from proprietary title. It cannot be disputed and is by now well settled that ‘settled possession’ or effective possession of a person without title entitles him to protect his possession as if he were a true owner. -

whether the plaintiff had better title over the suit property and whether he was in settled possession of the property, which required dispossession in accordance with law.

The crux of the matter is that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property.

But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently

long period of time, and has been acquiesced to by the true owner. A casual act of possession does not have the effect of interrupting the possession of the rightful owner. A stray act of trespass, or a possession which has not matured into settled possession, can be obstructed or removed by the true owner even by using necessary force. Settled possession must be (i) effective, (ii) undisturbed, and (iii) to the knowledge of the owner or without any attempt at concealment by the trespasser. There cannot be a straitjacket formula to determine settled possession. Occupation of a property by a person as an agent or a servant acting at the instance of the owner will not amount to actual legal possession.

The possession should contain an element of animus possidendi. The nature of possession of the trespasser is to be decided based on the facts and circumstances of each case.

In order to prove possession of the property, the plaintiff relied upon the rent note Ex. 1, which shows that the plot in question was let out by the plaintiff to one Joga Ram in the year 1967. On 12.05.1967, a fire broke out and the entire fodder stored on the plot got burnt. Thereafter, the plot was kept vacant. DW7, who has been referred to in order to establish spreading of the fire, stated that the fire started due to sparks coming from a railway engine. But there was no railway line adjacent to the disputed land which could have caused a fire. Even otherwise, the rent note Ex. 1 does not refer to the plot in question, and its boundaries have also not been mentioned. Merely on doubtful

material and cursory evidence, it cannot be held that the plaintiff was ever in possession of the property, and that too in settled possession.The plaintiff/Respondent No. 1 makes much of the old body of a motor vehicle belonging to him lying on the property. Ex. 2 clearly reveals that one part of the motor vehicle was lying on the disputed property and another part was lying on the plot of the

plaintiff. The said body of the motor vehicle is about 3 to 4 feet in length only and the same was lying on the boundary of the disputed property. But the plaintiff/Respondent No. 1 claims possession of the entire plot based on such fact. Absolutely no material is found to show that the plaintiff/Respondent No. 1 was in actual possession, much less continuous possession, of the

property for a longer period which may be called settled possession or established possession. As mentioned supra, mere casual possession, that too relying on a motor vehicle body lying on a part of the property, would not prove settled possession of the plaintiff. The plaintiff has to prove his case to the satisfaction of the Court. He cannot succeed on the weakness of the case of the

defendant. Even otherwise, there is no confusion at all regarding the identity of the property in question and on the basis of material on record, the First Appellate Court has correctly ruled that the appellant/Defendant No. 1 has proved his title and possession over the suit property since the date of his purchase of the property. Prior to the purchase, his predecessorininterest was in possession of the same. Having regard to the position of law and facts of the case,

we are of the considered opinion that the High Court was not justified in interfering with the judgment of the First Appellate Court, which has come down very heavily on the procedure adopted by the trial Judge in deciding the matter, more particularly when no fault can be found on facts with the judgment of the First Appellate Court.

Whether the secured creditor can file a winding up petition after such secured creditor has obtained a decree from the DRT and a recovery certificate based thereon ? 2019 - ACJ- APEX COURT JUDGMENTS VOL.NO.1/2019 APEX COURT DIGEST VOL.NO.1 14. the right of a secured creditor to file a winding up petition after such secured creditor has obtained a decree from the Debts Recovery Tribunal [“DRT”] and a recovery certificate based thereon. - The respondent, Kotak Mahindra Bank Limited, advanced various loans to the companies in question. The outstanding amount against these companies as on date, together with interest, is stated to be in the region of INR 48 crores. The respondent approached the Debts Recovery Tribunal, Mumbai by filing three separate original applications to recover the debt owed to them. The Debts Recovery Tribunal delivered three separate judgments on 16.01.2015 allowing the applications filed by the respondent bank. Apparently, the said orders are final as no appeals have been preferred to the Debts Recovery Appellate Tribunal [“DRAT”], Mumbai. Recovery certificates dated 12.08.2015 for the said amounts were then issued by the Recovery Officer under Section 19(19) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [“Recovery of Debts Act”]. We have been informed that various attempts were made to auction the properties that were security for the loans granted, but each of these attempts has yielded no results.- In the meanwhile, the respondent issued statutory notices dated 15.04.2015 under Sections 433 and 434 of the Companies Act, 1956. As no payments were forthcoming, a company petition was filed before the Bombay High Court on 03.07.2015. By an order dated 26.07.2017, the said petition was admitted as the companies in question were said to be commercially insolvent.- In the appeals that were filed to the Division Bench of the Bombay High Court, the main point argued was that once a secured creditor has obtained an order from the DRT, and a recovery certificate has been issued thereupon, such secured creditor cannot file a winding up petition as the Recovery of Debts Act is a special Act which vests exclusive jurisdiction in the DRT. Also, a secured creditor can file a winding up petition only on giving up its security, which has not been done in the present case. These contentions did not find favour with the Division Bench who then dismissed the appeals in question.-Section 434(1)(b) is attracted only if execution or other process is issued in respect of an order of a Tribunal in favour of a creditor of the company is returned unsatisfied in whole or in part. This is only one of three instances in which a company shall be deemed to be unable to pay its debts. If the fact situation fits sub-clause (b) of Section 434(1), then a company may be said to be deemed to be unable to pay its debts. However, this does not mean that each one of the sub-clauses of Section 434(1) are mutually exclusive in the sense that once Section 434(1)(b) applies, Section 434(1)(a) ceases to be applicable. Also, on the facts of this case, we may state that the company petition was filed only on 03.07.2015, pursuant to a notice under Section 433 of the Companies Act, 1956 dated 15.04.2015. This petition was filed under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956. At the stage at which the petition was filed, it could not possibly have been filed under Section 434(1)(b) of the Companies Act, 1956, as execution or other process in the form of a recovery certificate had not been issued by the Recovery Officer till 12.08.2015, i.e., till after the company petition was filed. For this reason also, it is clear that this contention of the learned counsel appearing for the appellant must be rejected. We may only end by saying that cases like the present one have to be decided by balancing the interest of creditors to whom money is owing, with a debtor company which will now go in the red since a winding up petition is admitted against it. It is not open for persons like the appellant to resist a winding up petition which is otherwise maintainable without there being any bona fide defence to the same. We may also hasten to add that the respondent cannot be said to be blowing hot and cold in pursuing a remedy under the Recovery of Debts Act and a winding up proceeding under the Companies Act, 1956 simultaneously.

Whether the secured creditor can file a winding up petition after such secured creditor has obtained a decree from the DRT and a recovery certificate based thereon ?

2019 - ACJ- APEX COURT JUDGMENTS VOL.NO.1/2019 APEX COURT DIGEST VOL.NO.1

14. the right of a secured creditor to file a winding up petition after such secured creditor has obtained a decree from the Debts Recovery Tribunal [“DRT”] and a recovery certificate based thereon. - The respondent, Kotak Mahindra Bank Limited, advanced various loans to the companies in question. The outstanding amount against these companies as on date, together with interest, is stated to be in the region of INR 48 crores. The respondent approached the Debts Recovery Tribunal, Mumbai by filing three separate original applications to recover the debt owed to them. The Debts Recovery Tribunal delivered three separate judgments on 16.01.2015 allowing the applications filed by the respondent bank. Apparently, the said orders are final as no appeals have been preferred to the Debts Recovery Appellate Tribunal [“DRAT”], Mumbai. Recovery certificates dated 12.08.2015 for the said amounts were then issued by the Recovery Officer under Section 19(19) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [“Recovery of Debts Act”]. We have been informed that various attempts were made to auction the properties that were security for the loans granted, but each of these attempts has yielded no results.- In the meanwhile, the respondent issued statutory notices dated 15.04.2015 under Sections 433 and 434 of the Companies Act, 1956.
As no payments were forthcoming, a company petition was filed before the Bombay High Court on 03.07.2015. By an order dated 26.07.2017, the said petition was admitted as the companies in question were said to be commercially insolvent.- In the appeals that were filed to the Division Bench of the Bombay High Court, the main point argued was that once a secured creditor has obtained an order from the DRT, and a recovery certificate has been issued thereupon, such secured
creditor cannot file a winding up petition as the Recovery of Debts Act is a special Act which vests exclusive jurisdiction in the DRT. Also, a secured creditor can file a winding up petition only on giving up its security, which has not been done in the present case. These contentions did not find favour with the Division Bench who then dismissed the appeals in question.-Section 434(1)(b) is
attracted only if execution or other process is issued in respect of an order of a Tribunal in favour of a creditor of the company is returned unsatisfied in whole or in part. This is only one of three instances in which a company shall be deemed to be unable to pay its debts. If the fact situation fits sub-clause (b) of Section 434(1), then a company may be said to be deemed to be unable to pay its debts. However, this does not mean that each one of the sub-clauses of Section 434(1) are mutually exclusive in the sense that once Section 434(1)(b) applies, Section 434(1)(a) ceases to be applicable. Also, on the facts of this case, we may state that the company petition was filed only on
03.07.2015, pursuant to a notice under Section 433 of the Companies Act, 1956 dated 15.04.2015. This petition was filed under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956. At the stage at which the petition was filed, it could not possibly have been filed under Section 434(1)(b) of the Companies Act, 1956, as execution or other process in the form of a recovery certificate had not been issued by the Recovery Officer till 12.08.2015, i.e., till after the company petition was filed. For this reason also, it is clear that this contention of the learned counsel appearing for the appellant must be rejected. We may only end by saying that cases like the present one have to be decided by balancing the interest of creditors to whom money is owing, with a debtor company which will now go in the red since a winding up petition is admitted against it. It is not open for
persons like the appellant to resist a winding up petition which is otherwise maintainable without there being any bona fide defence to the same. We may also hasten to add that the respondent cannot be said to be blowing hot and cold in pursuing a remedy under the Recovery of Debts Act and a winding up proceeding under the Companies Act, 1956 simultaneously.

whether the rent agreed is to be considered as the rent paid by the date of comencement of the Act 2001[2003]under Rajasthan Rent control Act and it can not be considered as a revisied enhanced rent with 10% increase – more than the prescribed in the Act 2001 ?

whether the rent agreed is to be considered as the rent paid by the date of comencement of the Act 2001[2003]under Rajasthan Rent control Act and it can not be considered as a revisied enhanced rent with 10% increase – more than the prescribed in the Act 2001 ?

2019 – ACJ- APEX COURT JUDGMENTS VOL.NO.1/ 2019 APEX COURT DIGEST -VOL.NO.1

Rajasthan Rent Control Act, = Rent deed contained a clause for yearly increase of rent by 10%. The tenant continued to pay rent to the landlord as per the agreed rent with 10% enhancement yearly. The landlord issued notice dated 27.03.2004 stating that with effect from 01.08.2003 upto 29.02.2004, for a period of seven months, the tenant has neither paid or tendered rent, arrears from 01.08.2003 to 29.02.2004 amounting to Rs.1,15,945/ were asked to be deposited
in the bank account of landlord. Notice mentioned that in the event the tenant does not deposit the amount in the account, landlord shall be compelled to carry out legal proceedings for eviction of the tenant.-After the aforesaid notice dated 27.03.2004 the tenant deposited an amount of Rs.95,200/ on 26.04.2004 in the bank account of the landlord .- Landlord filed an Application No.1258 of 2004 under Section 9 of the Rajasthan Rent Control Act, 2001 (hereinafter referred to as the “Act,

2001”) praying for eviction on the ground of arrears of rent. – The tenant filed reply opposing the abovesaid application. The tenant took stand in the application that in accordance with the provisions of Act, 2001, which has come into effect from 01.04.2003, on increasing the rent under the provisions of Section 6 in the prescribed rent of Rs.8,500/ @ 7.5% per annum

the rate of rent from 01.04.2003 comes to be Rs.13,600/ per month. It was stated In the written statement that tenant has deposited rent upto February, 2004 @ Rs.13,600/ per month i.e. a total of Rs.95,200/ in the bank account. – Rejoinder was filed by the landlord where it was pleaded that respondenttenant has been paying rent from August, 2002 @ Rs.16,564/ per month which rent was paid till July, 2003. It was claimed that the

respondenttenant is liable to pay rent @ Rs.16,564/ per month. The Rent Tribunal heard the parties and by its judgment and order dated 22.04.2011 directed for eviction of the tenant. The Rent Tribunal held that the case of tenant that rent is payable @ Rs.13,600/ per month cannot be accepted. The tenant having not deposited at the rate of Rs.16,564/ per month, has

committed default in paying rent -An appeal was filed by the tenant before the Rent Appellate Tribunal which too was dismissed by order dated 15.01.2014. The order of the Rent Tribunal was upheld- The tenant aggrieved by the order of the Appellate Tribunal filed Writ

Petition in the High Court which writ petition was allowed by the learned Single Ju Against the

judgment of the learned Single Judge dated 0dge vide its judgment and order dated 09.10.2014.9.10.2014 Special Appeal was filed which was dismissed by the Division Bench vide its judgment dated 14.12.2015 holding writ appeal as not maintainable.- The High Court in its judgment has held that after the enforcement of the Act, 2001 no agreement can provide for higher revision of rent. The High Court in its judgment has made following observation: “Section 6 of the Act starts with nonobstantive clause, thus no agreement to provide higher or lower rate of revision of rent would operate after commencement of the Act of 2001. The landlord was thus not at liberty to claim rent with enhancement @ 10% per annum.”- Aggrieved against the judgments of the High Court landlord has filed these appeals. –

Apex court held that By the notice given by the landlord dated 27.03.2004 an amount of Rs.1,15,945/ which was due from August, 2003 to February, 2004 was demanded at the rate of Rs.16,564/ per month. The tenant having not deposited the due amount and having deposited amount of only Rs.95,200/ on 26.04.2004 has committed default.- Learned counsel for the respondent refuting the submission of the learned counsel for the appellants submits that the High Court has rightly taken the view that the landlord was not entitled to enhancement of

the rent more than 5% in view of the Act, 2001. The landlord was not at liberty to claim rent with enhancement at the rate of 10% per annum. The High

Court had rightly held that permitting the landlord to demand rent with increase of 10% shall be contrary to the Section 6 of the Act, 2001.-The issue in these appeals pertains to rate of rent and the revision of rent as prescribed by the Act, 2001, hence, only those provisions of both the earlier Act and the Act,2001 need to be noted. Act, 2001 has repealed the Rajasthan Premises (Control of Rent and Eviction) Act, 1950.- The observation of the High Court that landlord was entitled to the rent as was payable on the date of commencement of the Act, 2001 without its revision is perfectly correct. The landlord cannot claim revision of rent as per agreement at the rate of 10% per annum after the enforcement of the Act. The present is not a

case that the landlord is claiming rent after the enforcement of the Act by adding 10% increase in the rent. The landlord’s case throughout is that the rent at the rate of Rs.16,564/ per month was being paid by the tenant since before the commencement of the Act and even after the commencement of the Act, till the month of July, 2003 the tenant paid rent at the rate of

Rs.16,564/ per month.-Section 4 of the Act which deals with the agreed rent provides that rent payable for any premises shall subject to the provisions of this Act, be such as may be agreed between the landlord and the tenant. When the tenant was paying the rent of Rs.16,564/ per month before the enforcement of the Act as per the rent agreement, the said amount was agreed amount which wasbeing paid before the enforcement of the Act. It is true that in the agreed amount which was being paid immediately before the commencement of the Act, the landlord cannot increase @ 10% of the rent as per agreement. The increase after the enforcement of the Act shall be in accordance with Section 6 and in the event the tenant does not agree for the said increase,the landlord is free to file application under Section

6 read with Section 14. In view of the foregoing discussion, we are of the view that the High Court has not appreciated the true import of Sections 6 and 7 of the Act, 2001 in observing that the tenant is not in default. -In the present case arrears demanded by the notice i.e.

Rs.16,564/ per month starting from December, 2003 to February, 2004 totalling Rs.1,15,945/ were required to be paid by the tenant, the tenant having paid only Rs.95,200/ as per his calculation of the rent at the rate of Rs.13,600/ per month has committed default. According to the learned counsel for the tenant, the rent paid by the tenant was sufficient to cover the rent upto December, 2003 and part of January, 2004, admittedly, the arrears as demanded having not been paid and we having found that the landlord has demanded

arrears of rent for seven months according to rate of rent Rs.16,564/ per month which was being paid by the tenant even before the enforcement of the Act, 2001 and after the enforcement of the Act, 2001. The landlord having not added 10% increase in the rent demanded,

there was no breach of Section 6 and the High Court has committed error in allowing the writ petition of the tenant.