Partition suit - father died - leaving behind him his two sons and wife and daughters - Notional partition of 1/3rd share between deceased father and his two sons each - yongest daughter filed suit for partition of 1/3rd share as per Hindu Succession Act - Sons pleaded that plaintiff and other sisters have executed a relinquishement deed and as such not entiled for share - for plaintiff behalf her mother as Guardian executed released deed also - Suit was dimissed as released deed was not cancelled - High court reversed the same stating that Mother can not execute a relinquishment/release deed for his minor daughter and is void abintion - Apex court held that once the partition was taken place and release and relinquishment deeds are executd and the property in possession of sons - after partition - the mother is the guardian of minor plaintiff and as such the relinquishment deed is voidable but not void abintio - the plaintiff not cancelled the same and set aside the order of High court and confirm the order of trial court.

One Moola Gounder along with his two sons Palanisamy (defendant no. 1) and Arumugam (defendant no. 2) formed a coparcenary which owned the suit property.  Moola Gounder died
intestate on 28.12.1971 leaving behind no Will. On his death, 1/3 of the property went to each son and remaining one third which was the share of Moola Gounder in the coparcenary was to
be inherited by his wife (defendant no.5), two sons, (defendant nos.   1   and   2)   and   three   daughters   viz.,   the   plaintiff   and defendant nos. 3 and 4.  
On 06.12.1989, his youngest daughter filed a suit claiming that the property falling to the share of Moola Gounder which was   to   be   inherited   by   his   six   legal   heirs   had   never   been
partitioned and therefore, it be partitioned in accordance with law. 

W/S = after the death of Moola Gounder, the daughters i.e., the plaintiff and defendant nos. 3 and 4 and the mother (defendant no. 5) had jointly executed a registered release deed relinquishing their rights in the property in favour of the two sons, defendant nos. 1 and 2.  It was also urged that in the said release deed the plaintiff who was a minor at that time was represented by her mother, who was her natural guardian, and the   mother   had   executed   the   release   deed   on   behalf   of   the
plaintiff. Similarly, defendant no. 1 had acted as the guardian of defendant no. 2 who was also a minor at that time and signed the release deed on behalf of both of the sons.  After defendant no. 2 attained   majority,   a   registered   partition   deed   was   executed between the two brothers, defendant nos. 1 and 2, on 24.04.1980 and thereafter, it is only defendant nos. 1 and 2 who are in possession of the said property.   It was also averred that the partition deed was witnessed by the husband of the plaintiff and she could not feign ignorance of the same.   It was also alleged that the amount mentioned in the release deed had been given to the sisters.  
A reply written statement or replication was filed by the plaintiff in which it was urged that the release deed was void under law since the mother had no right to relinquish the share of the plaintiff without sanction of the court.  
The trial court dismissed the suit holding that the mother acted as the natural guardian of the minor daughter and no steps were taken by the plaintiff on attaining majority to get the release deed set aside within the period of limitation of three years.
the High Court which came to the conclusion that the property in the hands of the legal heirs of Moola Gounder, after his death, was Joint Hindu Family property and the mother could not have acted as guardian of the minor.  It was, therefore, held that the release deed was void ab initio and, as such, was not required to be challenged. The court further held that the property remained joint property of all the legal heirs of Moola Gounder and decreed the suit of the plaintiff.  Hence, this appeal by one of the brothers who was defendant no.2 in the trial court.
Apex court held that
When we read Section 6 of the Succession Act the opening portion indicates that on the death of a male Hindu, his interest in the coparcenary property shall devolve by survivorship upon
the surviving members of the coparcenary and not in accordance
with the Act.  
That would mean that only the brothers would get the property.   However, the Proviso makes it clear that if the deceased leaves behind a female heir specified in Class­I of the Schedule,   the   interest   of   the   deceased   in   the   coparcenary property   shall   devolve   either   by   testamentary   or   by   intestate succession under the Succession Act and not by survivorship.
The opening portion of Section 6, as it stood at the relevant time, clearly indicates that if male descendants were the only survivors then they would automatically have the rights or interest in the
coparcenary property.  
Females had no right in the coparcenary property at that time. It was to protect the rights of the women that the proviso clearly stated that if there is a Class­I female heir,   the   interest   of   the  deceased   would   devolve   as   per   the provisions   of   the   Act   and   not   by   survivorship.  
The   first Explanation   to   Section   6   makes   it   absolutely   clear   that   the interest of the Hindu coparcener shall be deemed to be his share in the property which would have been allotted to him if partition had taken place immediately before his death. 
 In the present case, if partition had taken place immediately before the death of Moola Gounder then he and defendant nos. 1 and 2 would have been entitled to 1/3 share each in the property.  Nothing would have gone to the female heirs as per the law as it stood at that time.  
However, since partition had not actually taken place, and there were Class­I female heirs, 1/3 share of Moola Gounder was to devolve on the Class­I legal heirs in accordance with Section 8
of the Succession Act.  
In  Gurupad   Khandappa   Magdum      vs.    Hirabai Khandappa Magdum and Ors.
the main issue was as to what share a Hindu widow would get in terms of Sections 6 and 8 of
the Succession Act. 
This Court held that the partition which was a deemed partition cannot be limited to the time immediately prior   to   the   death   of   the   deceased   coparcenary   but   “all   the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained   on   the   basis   that   they   had   separated   from   one
another and had received a share in the partition which had taken place during the life time of the deceased.”   
The Court further held that the partition has to be treated and accepted as a
concrete reality,  something that cannot  be recalled  at a  later
stage.
In  Commissioner   of  Wealth   Tax,   Kanpur  and   Ors. vs. Chander   Sen  and   Ors.
 the dispute related to a joint family business between a father and son.   This business was divided
and thereafter, carried by a partnership firm of which both were partners.  The father died leaving behind his son, two grandsons and a credit balance in the account of the firm.  The issue that
arose was whether the credit balance in the account left behind by the deceased was to be treated as joint family property or the property was to be distributed to Class­I legal heirs in accordance
with   Section   8   of   the   Succession   Act.     
This   Court   held   that Succession   Act   supersedes   all  Mitakshara  law.     The   relevant
portion of the judgment reads as follows:­
“22.… It would be difficult to hold today the property which devolved on a Hindu under Section 8 of the Hindu Succession Act would be HUF in his hand vis­à­vis his own   son;   that   would   amount   to   creating   two   classes among the heirs mentioned in class I, the male heirs in
whose hands it will be joint Hindu family property and vis­à­vis son and female heirs with respect to whom no such concept could be applied or contemplated.  It may be mentioned that heirs in class I of Schedule under Section 8 of the Act included widow, mother, daughter of predeceased son etc.”
Accordingly, it was directed that the  credit balance would be inherited in terms of Section 8 of the Succession Act.
In Appropriate   Authority  (IT   Deptt)   And   Others vs.  M. Arifulla  And  Others3
 the issue which arose was whether the property inherited in terms of Sections 6 and 8 of the Succession Act was to be treated as the property of co­owners or as joint
family property.
The Court held as follows:­
“3.  … This Court has held in CWT vs. Chander Sen that a   property   devolving   under   Section   8   of   the   Hindu Succession Act, is the individual property of the person who inherits the same and not that of the HUF.  In fact, in   the   special   leave   petition,   it   is  admitted   that respondents 2 to 5 inherited the property in question from the said T.M. Doraiswami.   Hence, they held it as tenants­in­common and not as joint tenants.”

Applying the principles laid down in the aforesaid cases, it is apparent that after the death of Moola Goundar, his interest in the coparcenary property would devolve as per the provisions of Section 8 since he left behind a number of female Class­I heirs.  

There is another reason to take this view.  Section 30 of theSuccession Act clearly lays down that any Hindu can dispose ofhis share of the property by Will or by any other testamentary disposition which is capable of being so disposed of by him.  The explanation to Section 30 clearly provides that the interest of a male Hindu in  Mitakshara  coparcenary shall be deemed to be property capable of being disposed of by him within the meaning
of Section 30.
This means that the law makers intended that for all   intents   and   purposes   the   interest   of   a   male   Hindu   in Mitakshara coparcenary was to be virtually like his self­ acquired
property.  
Furthermore, when we conjointly read Section 30 with Section 19, which provides that when two or more heirs succeed together   to   the   property   of   an   intestate,   they   shall   take   the
property per capita and as tenants in common and not as joint tenants.
This also clearly indicates that the property was not to be treated as a joint family property though it may be held jointly by   the   legal   heirs   as   tenants   in   common   till   the   property   is divided, apportioned or dealt with in a family settlement.
Even assuming that the property was a joint family property then also we cannot accept the submission that the Karta i.e., defendant no. 1 was the natural guardian of the minor plaintiff.
The Karta is the manager of the Hindu Undivided Family and acts on behalf of the entire family. True it is that Section 6 of the Act is not applicable in respect of undivided interest of a minor in
the joint family property but here we are dealing with a situation where   all   the   family   members   decided   to   dissolve   the   Hindu Undivided Family assuming there was one in existence. 
A Karta is the manager of the joint family property.  He is not the guardian of the minor members of the joint family.  What Section 6 of the Act provides is that the natural guardian of a minor Hindu shall be his guardian for all intents and purposes except so far as the undivided interest of the minor in the joint family property is concerned.  This would mean that the natural guardian cannot dispose of the share of the minor in the joint family property.  The reason is that the Karta of the joint family
property is the manager of the property.  However, this principle would not apply when a family settlement is taking place between the members of the joint family.   When such dissolution takes
place and some of the members relinquish their share in favour of  the   Karta,  it   is  obvious   that   the   Karta   cannot   act  as   the guardian   of  that  minor  whose  share is  being  relinquished  in
favour of the Karta.   There would be a conflict of interest.    In  such an eventuality it would be the mother alone who would be the natural guardian and, therefore, the document executed by
her cannot be said to be a void document. At best, it was a voidable document in terms of Section 8 of the Act and should have been challenged within three years of the plaintiff attaining
majority. 
We may note that there are other reasons to hold that the case   set   up   by   the   plaintiff   was   not   correct   even   to   her knowledge. Though the plaintiff was a minor when the release deed dated 10.03.1973 was executed, she was not of tender age but was aged about 17 years.  On 24.04.1980, a partition took place between defendant nos. 1 and 2 (the two brothers) and this partition included all the properties comprising the property now claimed by the plaintiff. The partition deed dated 24.04.1980, which was duly registered, was signed by the husband of the plaintiff as an attesting witness.   Few days later, on 30.04.1980 the two brothers executed a settlement deed in favour of their mother, defendant no. 5 which was also signed by the plaintiff’s husband   as   witness.     After   this   partition,   the   two   brothers remained in possession of the property and executed various
transfers from this property. Therefore, it is difficult to believe that the plaintiff was not aware of the various transfers. In view of the above, we allow the appeal, set aside the judgment of the High Court dated 30.07.2008 and restore the judgment   of   the   trial   court   dated   29.11.1994.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL  APPEAL  NO. 8642 OF 2009
M. ARUMUGAM       …Appellant(s)
Versus
AMMANIAMMAL AND ORS.                 …Respondent(s)
J U D G M E N T
Deepak Gupta, J.
1. One Moola Gounder along with his two sons Palanisamy
(defendant no. 1) and Arumugam (defendant no. 2) formed a
coparcenary which owned the suit property.  Moola Gounder died
intestate on 28.12.1971 leaving behind no Will. On his death,
1/3 of the property went to each son and remaining one third
which was the share of Moola Gounder in the coparcenary was to
be inherited by his wife (defendant no.5), two sons, (defendant
1
nos.   1   and   2)   and   three   daughters   viz.,   the   plaintiff   and
defendant nos. 3 and 4.  
2. On 06.12.1989, his youngest daughter filed a suit claiming
that the property falling to the share of Moola Gounder which
was   to   be   inherited   by   his   six   legal   heirs   had   never   been
partitioned and therefore, it be partitioned in accordance with
law.  Written statement was filed by the two sons in which it was
mentioned that after the death of Moola Gounder, the daughters
i.e., the plaintiff and defendant nos. 3 and 4 and the mother
(defendant no. 5) had jointly executed a registered release deed
relinquishing their rights in the property in favour of the two
sons, defendant nos. 1 and 2.  It was also urged that in the said
release deed the plaintiff who was a minor at that time was
represented by her mother, who was her natural guardian, and
the   mother   had   executed   the   release   deed   on   behalf   of   the
plaintiff. Similarly, defendant no. 1 had acted as the guardian of
defendant no. 2 who was also a minor at that time and signed the
release deed on behalf of both of the sons.  After defendant no. 2
attained   majority,   a   registered   partition   deed   was   executed
between the two brothers, defendant nos. 1 and 2, on 24.04.1980
2
and thereafter, it is only defendant nos. 1 and 2 who are in
possession of the said property.   It was also averred that the
partition deed was witnessed by the husband of the plaintiff and
she could not feign ignorance of the same.   It was also alleged
that the amount mentioned in the release deed had been given to
the sisters.  
3. A reply written statement or replication was filed by the
plaintiff in which it was urged that the release deed was void
under law since the mother had no right to relinquish the share
of the plaintiff without sanction of the court.  
4. The trial court dismissed the suit holding that the mother
acted as the natural guardian of the minor daughter and no steps
were taken by the plaintiff on attaining majority to get the release
deed set aside within the period of limitation of three years. 
5. Aggrieved by the aforesaid judgment, the plaintiff filed an
appeal before the High Court which came to the conclusion that
the property in the hands of the legal heirs of Moola Gounder,
after his death, was Joint Hindu Family property and the mother
could not have acted as guardian of the minor.  It was, therefore,
held that the release deed was void ab initio and, as such, was
3
not required to be challenged. The court further held that the
property remained joint property of all the legal heirs of Moola
Gounder and decreed the suit of the plaintiff.  Hence, this appeal
by one of the brothers who was defendant no.2 in the trial court.
6. We   have   heard   Mr.   Jayanth   Muth   Raj,   learned   senior
counsel for the appellant and Mr. V. Prabhakar, learned counsel
for the respondents­plaintiff.   The facts are not disputed.   The
only   issue   is   whether   the   mother   could   act   as   the   natural
guardian   of   the   minor   daughters   in   respect   of   the   property
inherited from Moola Gounder.  
7. Before dealing with the issues, it would be appropriate to
make   reference   to   Section   6   of   the   Hindu   Minority   &
Guardianship Act, 1956, (the Act for short), relevant portion of
which reads as follows:
“6. Natural guardians  of  a Hindu  minor.­  The natural
guardians of a Hindu minor, in respect of the minor's
person   as   well   as   in   respect   of   the   minor's   property
(excluding his or her undivided interest in joint family
property), are—
(a) in the case of a boy or an unmarried girl—the father,
and after him, the mother: provided that the custody
of a minor who has not completed the age of five
years shall ordinarily be with the mother;
…”
4
Reference may also be made to Section 8 of the Act, relevant
portion of which reads as follows:
“8.   Powers   of   natural   guardian.­ (1)   The   natural
guardian of a Hindu minor has power, subject to the
provisions   of   this   section,   to   do   all   acts   which   are
necessary or reasonable and proper for the benefit of the
minor or for the realization, protection or benefit of the
minor's estate; but the guardian can in no case bind the
minor by a personal covenant.
(2) The natural guardian shall not, without the previous
permission of the court,—
(a) mortgage or charge, or transfer by sale, gift, exchange
or otherwise, any part of the immovable property of the
minor; or
(b) lease any part of such property for a term exceeding
five years or for a term extending more than one year
beyond the date on which the minor will attain majority.
(3)   Any   disposal   of   immovable   property   by   a   natural
guardian,   in   contravention   of   sub­section   (1)   or   subsection (2), is voidable at the instance of the minor or any
person claiming under him.
 …”
Section 4(b), Section 6, Section 19 and Section 30 of the Hindu
Succession Act, 1956 (the Succession Act for short), as it stood at
the relevant time read as follows:­
“4(b) any other law in force immediately before the
commencement of this Act shall cease to apply to Hindus
in so far as it is inconsistent with any of the provisions
contained in this Act.”
“6.  Devolution  of   interest   in   coparcenary  property.­
When a male Hindu dies after the commencement of this
Act, having at the time of his death an interest  in a
5
Mitakshara   coparcenary   property,   his   interest   in   the
property shall devolve by survivorship upon the surviving
members of the coparcenary and not in accordance with
this Act:
Provided that, if the deceased had left him surviving a
female relative specified in class I of the Schedule or a
male relative specified in that class who claims through
such female relative, the interest of the deceased in the
Mitakshara   coparcenary   property   shall   devolve   by
testamentary or intestate succession, as the case may be,
under this Act and not by survivorship.
Explanation   1   ­ For   the   purposes   of   this   section,   the
interest   of   a   Hindu   Mitakshara   coparcener   shall   be
deemed to be the share in the property that would have
been allotted to him if a partition of the property had
taken place immediately before his death, irrespective of
whether he was entitled to claim partition or not.
Explanation 2 ­ Nothing contained in the proviso to this
section shall be construed as enabling a person who has
separated himself from the coparcenary before the death
of the deceased or any of his heirs to claim on intestacy a
share in the interest referred to therein.”
“19. Mode  of  succession  of  two  or  more  heirs.­  If
two or more heirs succeed together to the property of an
intestate, they shall take the property,­
(a) save   as   otherwise   expressly   provided   in
this Act, per capita and not per stripes; and
(b) as   tenants­in­common   and   not   as   joint
tenants.”
“30. Testamentary   succession.­  Any   Hindu   may
dispose of by will or other testamentary disposition any
property, which is capable of being so disposed of by him
or her, in accordance with the provisions of the Indian
succession Act, 1925 (39 of 1925), or any other law for
the time being in force and applicable to Hindus.
Explanation.­     The   interest   of   a   male   Hindu   in   a
Mitakshara  coparcenary   property   or   the   interest   of   a
member of a tarwad, tavazhi, illom, kutumba or kavaru in
the property of the  tarwad, tavazhi, illom, kutumba  or
kavaru  shall notwithstanding anything contained in this
Act or in any other law for the time being in force, be
6
deemed to be property capable of being disposed of by
him or by her within the meaning of this section.”
8. Mr. V. Prabhakar, learned counsel for the plaintiff submits
that after the death of Moola Gounder, the property in question
was not inherited by his legal heirs in their individual rights but
only   as   the   property   of   a   Hindu   Undivided   Family.     Mr.
Prabhakar strenuously urged that the property was a joint Hindu
family property and only the Karta i.e., defendant no. 1 could
have represented the minor. The Karta was the guardian of the
minor members of the joint Hindu family and, therefore, the High
Court rightly held that the document which is termed to be the
release deed was a void document.
9. On the other hand, Mr. Jayanth Muth Raj, learned counsel
for the appellant submits that when the death of Moola Gounder
took place, a notional partition is deemed to have taken place
immediately before his death wherein two surviving members of
the coparcenary i.e., defendant nos. 1 and 2, got 1/3 share each
in   the   property   and   the   remaining   1/3   belonging   to   Moola
Gounder   was   to   be   inherited   in   terms   of   Section   8   of   the
Succession Act.
7
10. When we read Section 6 of the Succession Act the opening
portion indicates that on the death of a male Hindu, his interest
in the coparcenary property shall devolve by survivorship upon
the surviving members of the coparcenary and not in accordance
with the Act.  That would mean that only the brothers would get
the property.   However, the Proviso makes it clear that if the
deceased leaves behind a female heir specified in Class­I of the
Schedule,   the   interest   of   the   deceased   in   the   coparcenary
property   shall   devolve   either   by   testamentary   or   by   intestate
succession under the Succession Act and not by survivorship.
The opening portion of Section 6, as it stood at the relevant time,
clearly indicates that if male descendants were the only survivors
then they would automatically have the rights or interest in the
coparcenary property.  Females had no right in the coparcenary
property at that time. It was to protect the rights of the women
that the proviso clearly stated that if there is a Class­I female
heir,   the   interest   of   the   deceased   would   devolve   as   per   the
provisions   of   the   Act   and   not   by   survivorship.   The   first
Explanation   to   Section   6   makes   it   absolutely   clear   that   the
interest of the Hindu coparcener shall be deemed to be his share
in the property which would have been allotted to him if partition
8
had taken place immediately before his death.   In the present
case, if partition had taken place immediately before the death of
Moola Gounder then he and defendant nos. 1 and 2 would have
been entitled to 1/3 share each in the property.  Nothing would
have gone to the female heirs as per the law as it stood at that
time.  However, since partition had not actually taken place, and
there were Class­I female heirs, 1/3 share of Moola Gounder was
to devolve on the Class­I legal heirs in accordance with Section 8
of the Succession Act.  
11. In  Gurupad   Khandappa   Magdum      vs.    Hirabai
Khandappa Magdum and Ors.
1
, the main issue was as to what
share a Hindu widow would get in terms of Sections 6 and 8 of
the Succession Act.  This Court held that the partition which was
a deemed partition cannot be limited to the time immediately
prior   to   the   death   of   the   deceased   coparcenary   but   “all   the
consequences which flow from a real partition have to be logically
worked out, which means that the share of the heirs must be
ascertained   on   the   basis   that   they   had   separated   from   one
another and had received a share in the partition which had
taken place during the life time of the deceased.”   The Court
1 (1978) 3 SCC 383
9
further held that the partition has to be treated and accepted as a
concrete reality,  something that cannot  be recalled  at a  later
stage.
12. In  Commissioner   of  Wealth   Tax,   Kanpur  and   Ors. vs.
Chander   Sen  and   Ors.
2
, the dispute related to a joint family
business between a father and son.   This business was divided
and thereafter, carried by a partnership firm of which both were
partners.  The father died leaving behind his son, two grandsons
and a credit balance in the account of the firm.  The issue that
arose was whether the credit balance in the account left behind
by the deceased was to be treated as joint family property or the
property was to be distributed to Class­I legal heirs in accordance
with   Section   8   of   the   Succession   Act.     This   Court   held   that
Succession   Act   supersedes   all  Mitakshara  law.     The   relevant
portion of the judgment reads as follows:­
“22.… It would be difficult to hold today the property
which devolved on a Hindu under Section 8 of the Hindu
Succession Act would be HUF in his hand vis­à­vis his
own   son;   that   would   amount   to   creating   two   classes
among the heirs mentioned in class I, the male heirs in
whose hands it will be joint Hindu family property and
vis­à­vis son and female heirs with respect to whom no
such concept could be applied or contemplated.  It may
be mentioned that heirs in class I of Schedule under
Section 8 of the Act included widow, mother, daughter of
predeceased son etc.”
2 (1986) 3 SCC 567
10
Accordingly, it was directed that the  credit balance would be
inherited in terms of Section 8 of the Succession Act.
13. In Appropriate   Authority  (IT   Deptt)   And   Others vs.  M.
Arifulla  And  Others3
 the issue which arose was whether the
property inherited in terms of Sections 6 and 8 of the Succession
Act was to be treated as the property of co­owners or as joint
family property.  The Court held as follows:­
“3.  … This Court has held in CWT vs. Chander Sen that
a   property   devolving   under   Section   8   of   the   Hindu
Succession Act, is the individual property of the person
who inherits the same and not that of the HUF.  In fact,
in   the   special   leave   petition,   it   is   admitted   that
respondents 2 to 5 inherited the property in question
from the said T.M. Doraiswami.   Hence, they held it as
tenants­in­common and not as joint tenants.”
14. Applying the principles laid down in the aforesaid cases, it is
apparent that after the death of Moola Goundar, his interest in
the coparcenary property would devolve as per the provisions of
Section 8 since he left behind a number of female Class­I heirs.  
15. There is another reason to take this view.  Section 30 of the
Succession Act clearly lays down that any Hindu can dispose of
his share of the property by Will or by any other testamentary
3 (2002) 10 SCC 342
11
disposition which is capable of being so disposed of by him.  The
explanation to Section 30 clearly provides that the interest of a
male Hindu in  Mitakshara  coparcenary shall be deemed to be
property capable of being disposed of by him within the meaning
of Section 30.  This means that the law makers intended that for
all   intents   and   purposes   the   interest   of   a   male   Hindu   in
Mitakshara coparcenary was to be virtually like his self­acquired
property.  Furthermore, when we conjointly read Section 30 with
Section 19, which provides that when two or more heirs succeed
together   to   the   property   of   an   intestate,   they   shall   take   the
property per capita and as tenants in common and not as joint
tenants.  This also clearly indicates that the property was not to
be treated as a joint family property though it may be held jointly
by   the   legal   heirs   as   tenants   in   common   till   the   property   is
divided, apportioned or dealt with in a family settlement.
16. Even assuming that the property was a joint family property
then also we cannot accept the submission that the Karta i.e.,
defendant no. 1 was the natural guardian of the minor plaintiff.
The Karta is the manager of the Hindu Undivided Family and
acts on behalf of the entire family. True it is that Section 6 of the
12
Act is not applicable in respect of undivided interest of a minor in
the joint family property but here we are dealing with a situation
where   all   the   family   members   decided   to   dissolve   the   Hindu
Undivided Family assuming there was one in existence. 
17. A Karta is the manager of the joint family property.  He is
not the guardian of the minor members of the joint family.  What
Section 6 of the Act provides is that the natural guardian of a
minor Hindu shall be his guardian for all intents and purposes
except so far as the undivided interest of the minor in the joint
family property is concerned.  This would mean that the natural
guardian cannot dispose of the share of the minor in the joint
family property.  The reason is that the Karta of the joint family
property is the manager of the property.  However, this principle
would not apply when a family settlement is taking place between
the members of the joint family.   When such dissolution takes
place and some of the members relinquish their share in favour
of  the   Karta,  it   is  obvious   that   the   Karta   cannot   act  as   the
guardian   of  that  minor  whose  share is  being  relinquished  in
favour of the Karta.   There would be a conflict of interest.    In
such an eventuality it would be the mother alone who would be
13
the natural guardian and, therefore, the document executed by
her cannot be said to be a void document. At best, it was a
voidable document in terms of Section 8 of the Act and should
have been challenged within three years of the plaintiff attaining
majority. 
18. We may note that there are other reasons to hold that the
case   set   up   by   the   plaintiff   was   not   correct   even   to   her
knowledge. Though the plaintiff was a minor when the release
deed dated 10.03.1973 was executed, she was not of tender age
but was aged about 17 years.  On 24.04.1980, a partition took
place between defendant nos. 1 and 2 (the two brothers) and this
partition included all the properties comprising the property now
claimed by the plaintiff. The partition deed dated 24.04.1980,
which was duly registered, was signed by the husband of the
plaintiff as an attesting witness.   Few days later, on 30.04.1980
the two brothers executed a settlement deed in favour of their
mother, defendant no. 5 which was also signed by the plaintiff’s
husband   as   witness.     After   this   partition,   the   two   brothers
remained in possession of the property and executed various
14
transfers from this property. Therefore, it is difficult to believe
that the plaintiff was not aware of the various transfers.
19. In view of the above, we allow the appeal, set aside the
judgment of the High Court dated 30.07.2008 and restore the
judgment   of   the   trial   court   dated   29.11.1994.     Pending
application(s) if any, shall also stand disposed of.
..…..…....................J.
[S. ABDUL NAZEER]
…….…....................J.
[DEEPAK GUPTA]
NEW DELHI
JANUARY  8, 2020
15

The Tribunal does not have jurisdiction to direct re-trial on any other ground except that mentioned in Section 16(2). Non-compliance of Rule 180 cannot be a ground for ordering a re-trial. In addition, the Tribunal has competence only to order re-trial by the Court Martial. There is no power conferred on the Tribunal to direct the matter to be remanded to a stage prior to the Court Martial proceedings. Therefore, we are of the view that the order passed by the Tribunal directing a de novo inquiry from the stage of Court of Inquiry requires to be set aside.

The Tribunal does not have jurisdiction to direct re-trial on any other ground except that mentioned
in Section 16(2). Non-compliance of Rule 180 cannot be a ground for ordering a re-trial. In addition, the Tribunal has competence only to order re-trial by the Court Martial. 
There is no power conferred on the Tribunal to direct the matter to be remanded to a stage prior to the Court Martial proceedings. 
Therefore, we are of the view that the order passed by the Tribunal directing a de novo inquiry from the stage of Court of Inquiry requires to be
set aside. 

Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 9267 of 2019
(@ Diary No.10621 of 2018)
Union of India & Ors.
.... Appellant(s)
Versus
Ex. No. 3192684 W. Sep. Virendra Kumar
 …. Respondent (s)
J U D G M E N T
L. NAGESWARA RAO, J.
1. The order of dismissal of the Respondent was set
aside by the judgment of the Armed Forces Tribunal,
Regional Bench, Lucknow (hereinafter, ‘the Tribunal’),
aggrieved by which this Appeal is filed.
2. The Respondent was enrolled as a Soldier in 20 Jat
Firing Team which was attached to the Jat Regimental
Centre, Bareilly on 25.02.1999. A firing incident took
1
place at around 8.45 a.m. on 02.10.2004, when the team
was practicing firing at the Jat Regimental Centre.
During the incident, Havildar Harpal and the Respondent
sustained gunshot injuries. Havildar Harpal succumbed
to the bullet injuries and the Respondent was admitted at
the hospital due to injuries. A First Information Report
was lodged at the Police Station, Sadar Cantonment,
Bareilly. A preliminary investigation was initiated by the
Staff Court of Inquiry as per the directions of the Station
Headquarters, Bareilly which concluded on 25.11.2004.
The General Officer Commanding 22 Infantry Division
directed:
a) disciplinary action to be initiated against the
Respondent for causing the death of late Havildar
Harpal and for attempting to commit suicide.
b) to counsel Lt. Rajiv Menon for not implementing
the relevant instructions during the conduct of
firing practices at the ranges.
c) Late Havildar Harpal of 20 Jat Regiment was
directed to be treated on bona fide Government
2 | P a g e
duty and his death was held attributable to military
service in peace.
3. The Respondent was kept in close arrest w.e.f.
27.11.2004 and was handed over to 7 Kumaon Regiment
under the authority of Headquarters 49 Infantry Brigade.
On 28.12.2004, the Respondent was tentatively charged
with the murder of Havildar Harpal under Section 302 IPC
read with Section 69 of the Army Act, 1950 (for short “the
Act”) and under Section 64(c) of the Act for attempting to
commit suicide. 21 witnesses were examined in the
summary of evidence and the Respondent was given an
opportunity to cross-examine the witnesses, which he
declined. He was given an opportunity to make additional
statement, which was also declined. Further opportunity
given to him to adduce evidence was also not availed by
the Respondent. Summary of evidence concluded on
07.02.2005. Additional summary of evidence was also
recorded, which was completed on 03.06.2005. The
General Court Martial commenced on 28.11.2005, and the
trial was concluded on 16.03.2006. The General Court
Martial convicted the Respondent under Section 302 IPC for
3 | P a g e
the murder of Havildar Harpal and for attempting to
commit suicide. The Respondent was sentenced to suffer
imprisonment for life and to be dismissed from service.
The statutory complaint filed by the Respondent was
rejected by the Chief of the Army Staff on 16.03.2007.
The validity of the order of the General Court Martial dated
16.03.2006 and the order of the Chief of the Army Staff
dated 16.03.2007, rejecting the statutory complaint were
assailed before the Tribunal.
4. Though several grounds were taken before the
Tribunal to challenge the order of the General Court Martial,
the principal contention of the Respondent was noncompliance of Rule 180 of the Rules. The Tribunal decided
the petition by adverting to the contention relating to Rule
180. It was held by the Tribunal that Rule 180 provides
that a person against whom an inquiry is conducted to be
present throughout the inquiry. As there was no doubt that
the Respondent was denied permission to be present when
statements of witnesses were being recorded before the
Court of Inquiry, the Tribunal concluded that the entire trial
against the Respondent is vitiated. The Tribunal set aside
the order of the Court Martial and remitted the matter for
4 | P a g e
de novo trial from the stage of Court of Inquiry in exercise
of its power under Section 16 of the Armed Forces Tribunal
Act, 2007.
Rule 180 of the Army Rules, 1954
5. The only point considered by the Tribunal is Rule 180
and the effect of non-compliance of the said Rule. It is
relevant to re-produce Rule 180 which is as follows:
“Procedure when character of a person subject
to the Act is involved.—Save in the case of a
prisoner of war who is still absent whenever any
inquiry affects the character or military reputation
of a person subject to the Act, full opportunity
must be afforded to such person of being present
throughout the inquiry and of making any
statement, and of giving any evidence he may
wish to make or give, and of cross-examining any
witness whose evidence in his opinion, affects his
character or military reputation and producing any
witnesses in defence of his character or military
reputation. The presiding officer of the court shall
take such steps as may be necessary to ensure
that any such person so affected and not
5 | P a g e
previously notified receives notice of and fully
understands his rights, under this rule.”
6. Chapter VI of the Army Rules, 1954 deals with the
Court of Inquiry. According to Rule 177, a Court of Inquiry
is an assembly of officers or junior commissioned officers
(JCOs) constituted to collect the evidence. The procedure to
be followed by the Court of Inquiry is provided in Rule 179.
Rule 180 deals with the procedure for inquiry where the
character of a person who is subject to the Act is involved.
When an inquiry affects the character or military reputation
of a person who is subject to the Act, full opportunity has to
be provided to the person throughout the inquiry, of
making any statement, of giving any evidence he may wish
to make or give, and of cross-examining any evidence.
According to Rule 182, the proceedings of a Court of
Inquiry, or of any confession, statement, or answer to a
question made or given in a Court of Inquiry, shall not be
admissible in evidence. However, the proviso to Rule 182
provide that nothing in Rule 182 shall prevent the
proceedings from being used by the prosecution or the
defence for the purpose of cross-examining any witness. It
6 | P a g e
is also necessary to refer to Rule 22 of the Army Rules,
1954 which relates to the hearing of charge which is as
follows:
“22. Hearing of Charge. —
(1) Every Charge against a person subject to the Act
shall be heard by the Commanding Officer in the
presence of the accused. The accused shall have full
liberty to cross-examine any witness against him, and
to call such witness and make such statement as may
be necessary for his defence: Provided that where the
charge against the accused arises as a result of
investigation by a Court of inquiry, wherein the
provisions of rule 180 have been complied with in
respect of that accused, the commanding officer may
dispense with the procedure in sub-rule (1).
(2) The commanding officer shall dismiss a charge
brought before him if, in his opinion the evidence does
not show that an offence under the Act has been
committed, and may do so if, he is satisfied that the
charge ought not to be proceeded with: Provided that
the commanding officer shall not dismiss a charge
which he is debarred to try under sub-section (2) of Sec.
120 without reference to superior authority as specified
therein.
7 | P a g e
(3) After compliance of sub-rule (1), if the commanding
officer is of opinion that the charge ought to be
proceeded with, he shall within a reasonable time—
(a) dispose of the case under section 80 in accordance
with the manner and form in Appendix III; or
(b) refer the case to the proper superior military
authority; or
(c) adjourn the case for the purpose of having the
evidence reduced to writing; or
(d) if the accused is below the rank of warrant officer,
order his trial by a summary court-martial:
Provided that the commanding officer shall not order
trial by a summary court-martial without a reference to
the officer empowered to convene a district courtmartial or on active service a summary general courtmartial for the trial of the alleged offender unless—
(a) the offence is one which he can try by a summary
court-martial without any reference to that officer; or
(b) he considers that there is grave reason for
immediate action and such reference cannot be made
without detriment to discipline.
(4) Where the evidence taken in accordance with subrule (3) of this rule discloses an offence other than the
offence which was the subject of the investigation, the
commanding officer may frame suitable charge (s) on
8 | P a g e
the basis of the evidence so taken as well as the
investigation of the original charge.]”
7. On behalf of the Appellant, it was contended that
the Court of Inquiry was initiated to unearth the
circumstances leading to the death of Havildar Harpal
and to find out who was responsible. At that stage, there
was no suspicion about the involvement of the
Respondent. The Respondent was examined as witness
No.18 and not as an accused. Only during the course of
the recording of the statement of the Respondent, a
serious doubt was entertained about his involvement in
the death of Havildar Harpal. It was contended by the
Appellant that full opportunity was given to the
Respondent to cross-examine the witnesses and to
submit an additional statement in his defence which was
declined by the Respondent. It was further contended
that there is no complaint made by the Respondent
about the violation of Rule 180 and the prejudice that
was caused to him at the stage of recording summary of
evidence and during the Court Martial. The submission
made on behalf of the Appellant was that the Court of
9 | P a g e
Inquiry is only for collection of evidence and any violation
of the procedure prescribed under Rule 180 does not
vitiate the proceedings of the Court Martial. Moreover,
according to the Appellant, the Respondent failed to
show any prejudice caused to him by the nonobservance of the procedure provided in Rule 180. As
the Respondent was given an opportunity to crossexamine witnesses as provided in Rule 22 and during the
Court Martial proceedings which he did not utilize, there
is no failure of justice, according to the learned Senior
Counsel for the Appellant.
8. The Respondent defended the order of the Tribunal
by submitting that collection of evidence by the Court of
Inquiry is a crucial stage during which the accused is
entitled to be provided with an opportunity as
contemplated in Rule 180. Violation of the procedure
prescribed in Rule 180 would render the entire
proceedings void. It was contended by the learned
Senior Counsel for the Respondent that even though the
Respondent was initially examined as a witness, there
was a requirement of summoning those witnesses whose
10 | P a g e
statements were recorded in his absence and reexamining them after the status of the Respondent
changed from a witness to that of an accused.
9. This Court had occasion to consider the scope of
Rule 180 and it is necessary to take note of the
judgments of this Court in which Rule 180 was discussed.
The orders by which General Court Martial was convened
were challenged by petitions filed under Article 32 of the
Constitution of India in Lt. Col. Prithi Pal Singh Bedi &
Ors. v. Union of India & Ors.
1
 One of the contentions
on behalf of the petitioners therein was that it was
obligatory upon the authorities to appoint a Court of
Inquiry whenever an inquiry affects the character or
military reputation of the persons subject to the Act and,
in such an inquiry full opportunity must be afforded to
such person of being present throughout the inquiry and
making any statement or giving any evidence that he
wishes to make and of cross-examining any witnesses.
Interpreting Rule 180, this Court held that it cannot be
construed to mean that whenever or wherever any
1 (1982) 3 SCC 140
11 | P a g e
inquiry in respect of any person who is subject to the Act
is conducted and his character or military reputation is
likely to be affected, setting up of a Court of Inquiry is
sine qua non. However, this Court held as follows:
“40. … Rule 180 merely makes it obligatory that
whenever a Court of enquiry is set up and in the
course of enquiry by the Court of enquiry
character or military reputation of a person is
likely to be affected then such a person must be
given a full opportunity to participate in the
proceedings of Court of enquiry. Court of enquiry
by its very nature is likely to examine certain
issues generally concerning a situation or
persons. Where collective fine is desired to be
imposed, a Court of enquiry may generally
examine the shortfall to ascertain how many
persons are responsible. In the course of such an
enquiry there may be a distinct possibility of
character or military reputation of a person
subject to the Act likely to be affected. His
participation cannot be avoided on the specious
plea that no specific enquiry was directed against
the person whose character or military reputation
is involved. To ensure that such a person whose
character or military reputation is likely to be
affected by the proceedings of the Court of
12 | P a g e
enquiry should be afforded full opportunity so
that nothing is done at his back and without
opportunity of participation, Rule 180 merely
makes an enabling provision to ensure such
participation.”
10. This Court in Major G.S. Sodhi v. Union of India
2
rejected the challenge to the Court Martial proceedings
while dismissing the Writ Petitions filed under Article 32
of the Constitution. The main grievance of the
petitioners in that case was the violation of the
procedure prescribed in Rules 22 and 23 of the Army
Rules. While recording a finding that there has been
substantial compliance of Rules 22 and 23, this Court has
held that recording of evidence is only to find out
whether there is a prima facie case to convene a courtmartial. This Court was of the opinion that the object
and effect of the Rules should be considered in the
context bearing in mind the general principle whether
such an incomplete compliance has caused any prejudice
to the delinquent officer. However, it was held that if
there is any violation of mandatory rules, the benefit of
the same should be given to the delinquent officer. The
2 (1991) 2 SCC 382
13 | P a g e
conclusion in that case was that there was no violation of
the Rules and in any event no prejudice was caused to
the petitioners therein. In Union of India & Ors. v.
Major A. Hussain (IC-14827)
3
, this Court while setting
aside the judgment of the High Court of Andhra Pradesh
upheld the order of conviction of the respondent by the
Court Martial. While dealing with the submissions made
on Rule 180, this Court relying upon Major General
Inder Jit Kumar v. Union of India
4 held that
proceedings before a Court of Inquiry are not adversarial
proceedings as the Court of Inquiry is in the nature of a
fact-finding enquiry committee. This Court was of the
view that it is unnecessary to examine if pre-trial
investigation is adequate or not when there is sufficient
evidence to sustain conviction by the Court Martial. It
was further held that the requirement of proper and
adequate investigation is not jurisdictional and any
violation thereof does not invalidate the Court Martial
unless it is shown that the accused has been prejudiced
or a mandatory provision has been violated. As the
3 (1998) 1 SCC 537
4 (1997) 9 SCC 1
14 | P a g e
Respondent therein participated in the recording of
summary of evidence without raising any objection, the
submission regarding violation of principles of natural
justice at an earlier stage was rejected by this Court.
11. In Union of India & Ors. v. Sanjay Jethi & Anr.
5
the question regarding the bias of members of the Court
of Inquiry was decided in favour of the delinquent officer.
The interpretation by this Court of Rule 180 is as follows:
“53. In a CoI participation of a delinquent
officer whose character or military reputation is
likely to be affected is a categorical imperative.
The participation has to be meaningful,
effective and he has to be afforded adequate
opportunity. It needs no special emphasis to
state that Rule 180 is framed under the Army
Act and it has the statutory colour and flavour.
It has the binding effect on CoI. The rule
provides for procedural safeguards regard
being had to the fact that a person whose
character and military reputation is likely to be
affected is in a position to offer his explanation
and in the ultimate eventuate may not be
required to face disciplinary action. Thus
understood, the language employed in Rule 180
5 (2013) 16 SCC 116
15 | P a g e
lays postulates of a fair, just and reasonable
delineation. It is the duty of the authorities to
ensure that there is proper notice to the person
concerned and he is given opportunity to crossexamine the witnesses and, most importantly,
nothing should take place behind his back. It is
one thing to say that CoI may not always be
essential or sine qua non for initiation of a court
martial but another spectrum is that once the
authority has exercised the power to hold such
an inquiry and CoI has recommended for
disciplinary action, then the recommendation of
CoI is subject to judicial review. While exercising
the power of judicial review it becomes
obligatory to see whether there has been due
compliance of the stipulates prescribed under
the rule, for the language employed in the said
rule is absolutely clear and unambiguous. We
may not dwell upon the concept of “full
opportunity” in detail. Suffice it to say that one
cannot stretch the said concept at infinitum on
the bedrock of grant of opportunity and fair
play. It has to be tested on the touchstone of
the factual matrix of each case.”
12. A close scrutiny of the above judgments would
indicate that:
16 | P a g e
(a) The proceedings of a Court of Inquiry are in the
nature of a fact-finding inquiry conducted at a preinvestigation stage;
(b) The accused is entitled to full opportunity as
provided in Rule 180;
(c) As a final order of conviction is on the basis of a trial
by the Court Martial, irregularities at the earlier
stages cannot be the basis for setting aside the
order passed by the Court Martial;
(d) If the accused raises a ground of non-compliance of
Rule 180 during the framing of charge or during the
recording of summary of evidence, the authorities
have to rectify the defect as compliance of the
procedure prescribed in Rule 180 is obligatory.
13. Though there is non-compliance of Rule 180 of the
Army Rules in this case as the Respondent was not
present during the recording of the statements of
witnesses, it is clear from the record that the Respondent
did not raise this ground either at the stage of framing of
the charge, recording summary of evidence or during the
Court Martial proceedings. After a final order was passed
by the Court Martial on the basis of a full-fledged trial, it
is not open to the Respondent to raise the ground of noncompliance of Rule 180 during the Court of Inquiry
17 | P a g e
proceedings. Therefore, the Tribunal ought not to have
remanded the matter back for a de novo inquiry from the
stage of Court of Inquiry on the ground of infraction of
Rule 180 of the Army Rules.
Section 16 of the Army Act, 1950
14. In exercise of the power conferred by Section 16 of
the Armed Forces Tribunal Act, 2007 an order of remand
was made by the Tribunal. Section 16 of the Armed
Forces Tribunal Act, 2007 reads as follows:
“16. Re-trial. — (1) Except as provided by
this Act, where the conviction of a person by
court martial for an offence has been quashed,
he shall not be liable to be tried again for that
offence by a court-martial or by any other Court.
(2) The Tribunal shall have the power of
quashing a conviction, to make an order
authorising the appellant to be retried by court
martial, but shall only exercise this power when
the appeal against conviction is allowed by
reasons only of evidence received or available to
be received by the Tribunal under this Act and it
appears to the Tribunal that the interests of
justice require that an order under this section
should be made:
18 | P a g e
Provided that an appellant shall not be retried
under this section for an offence other than—
(a) the offence for which he was convicted by
the original court martial and in respect of which
his appeal is allowed;
(b) any offence for which he could have been
convicted at the original court martial on a
charge of the first-mentioned offence;
(c) any offence charged in the alternative in
respect of which the court martial recorded no
finding in consequence of convicting him of the
first-mentioned offence.
(3) A person who is to be retried under this
section for an offence shall, if the Tribunal or the
Supreme Court so directs, whether or not such
person is being tried or retried on one or more of
the original charges, no fresh investigation or
other action shall be taken under the relevant
provision of the Army Act, 1950 (46 of 1950) or
the Navy Act, 1957 (62 of 1957) or the Air
Force Act, 1950 (45 of 1950), as the case may
be, or rules and regulations made thereunder, in
relation to the said charge or charges on which
he is to be retried.”
15. The power conferred on the Tribunal to direct re-trial
by the Court Martial is only on the grounds mentioned in
19 | P a g e
Section 16(2). The Tribunal is competent to direct re-trial
only in case of evidence made available to the Tribunal
was not produced before the Court Martial and if it
appears to the Tribunal that the interests of justice
requires a re-trial. The re-trial that was ordered by the
Tribunal in this case is on the basis that the procedure
prescribed in Rule 180 of the Army Rules has not been
followed. The Tribunal does not have jurisdiction to
direct re-trial on any other ground except that mentioned
in Section 16(2). Non-compliance of Rule 180 cannot be
a ground for ordering a re-trial. In addition, the Tribunal
has competence only to order re-trial by the Court
Martial. There is no power conferred on the Tribunal to
direct the matter to be remanded to a stage prior to the
Court Martial proceedings. Therefore, we are of the view
that the order passed by the Tribunal directing a de novo
inquiry from the stage of Court of Inquiry requires to be
set aside. As the Tribunal has not adjudicated on the
merits of the Transfer Application, we set aside the order
of the Tribunal and remand the Application back to the
Tribunal to be considered on its own merits, without
20 | P a g e
being influenced by any observation made in this
judgment.
16. The Appeal is accordingly allowed.

 ..….............................J.
 [L. NAGESWARA RAO]
 …...…........................J.
 [AJAY RASTOGI]
New Delhi,
January 07, 2020.
21 | P a g e

Refused to refund the excess amounts. -The Union’s argument that there were subsequent defaults or short payments in respect of liability towards later periods, or its objection that the impugned directions could not have been issued in execution proceedings, are insubstantial. As noticed earlier, the bank guarantees for the later periods were furnished by the respondents (to the extent of 774.25 crores).

Refused to refund the excess amounts. -The Union’s argument that there were subsequent defaults or short payments in respect of liability towards later periods, or its objection that the impugned directions could not have been issued in execution proceedings, are insubstantial. As noticed earlier, the bank guarantees for the later periods were furnished by the respondents (to the extent of 774.25 crores). 

On a recapitulation of all circumstances, and the various terms of NIA 2013 and
NIA 2015, this court is of the opinion that the order of the TDSAT does not call for any
interference. 
The Union nowhere disputes that the respondent licensees’ liability toward
payment of deferred spectrum charges, in May, 2018, was to the tune of 774.25 crores. ₹
The total amount realized upon encashment of the bank guarantees furnished by the
respondents, however, was to the extent of 908.91 crores. 
It is also a matter of record ₹ that the respondents furnished another bank guarantee to the tune of 774.25 crores. ₹ There is consequently logic and merit in the contention of RCL/RTL that the Union
unreasonably refused to refund the excess amounts. 
The Union’s argument that there were subsequent defaults or short payments in respect of liability towards later periods, or its objection that the impugned directions could not have been issued in execution proceedings, are insubstantial. As noticed earlier, the bank guarantees for the later
periods were furnished by the respondents (to the extent of 774.25 crores). 
In these ₹ circumstances, there is no rationale for the Union to resist the demand for refund of
excess amounts. The TDSAT, in the opinion of this court, exercised its discretion, with
respect, circumspectly, because the entire amount of 134.66 crores claimed in the ₹
application was not allowed; rather the direction issued was in respect of 104. 34 ₹
crores.

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REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 32 OF 2020
(ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 15972 OF 2019)
UNION OF INDIA ...APPELLANT(S)
VERSUS
RELIANCE COMMUNICATION
LIMITED & ANR. ...RESPONDENT(S)
J U D G M E N T
S. RAVINDRA BHAT, J.
1. Leave granted. With the consent of the learned counsel for the parties, the appeal
was heard finally. The appellant/Union of India (hereafter referred to as “the Union”) is
aggrieved by a direction of the Telecom Disputes Settlement and Appellate Tribunal
(hereafter referred to as “TDSAT” or the “Tribunal”) to return 104.34 crores lying ₹
unadjusted, to the respondents (collectively hereafter referred to as “RCL/RTL”).
2. The facts necessary for this judgment are that the Union had, on 30.01.2013,
published a notice inviting bids (hereafter referred to as “NIA 2013”), for the auction of
spectrum. Sistema Shyam Teleservices Ltd. (hereafter referred to as “Sistema”) was the
successful applicant in respect of the 800 MHz band spectrum for eight circles/regions.
By orders of the court, a Scheme for Amalgamation under the erstwhile Companies Act,
1956 was approved, by virtue of which Sistema merged with RCL. Resultantly, its assets
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and liabilities, including the spectrum license it had successfully bid for – to NIA 2013
devolved on RCL. The Union approved this transfer on 20.10.2017.
3. The Union invited bids for auction of further spectrum bandwidth in 2015; the
bids of RCL and the second appellant (hereafter “RTL”) were successful in respect of
three kinds of spectrum in several regions/circles; licenses were issued to them. In terms
of NIA 2013, the third instalment of deferred spectrum charges of 281.45 crores fell ₹
due from RCL, which could not be paid by it. This led to the encashment on 11.05.2018,
of bank guarantees furnished, to the extent of 281.45 crores. The total extent of bank ₹
guarantee furnished was 390.41 crores. Contemporaneously, the deferred spectrum ₹
liability under the NIA 2015 @ 492.79 crores became payable on 09.04.2018. The ₹
respondents (RCL and RTL) could not pay these charges. Consequently, the Union encashed 492.79 crores out of the bank guarantees furnished. ₹
4. RCL and RTL apparently along with several other telecom service providers faced
acute economic problems which led to the Union revisiting certain issues and modifying
the payment periods/terms towards deferred spectrum charges, in regard to subsisting
spectrum licenses. Accordingly, letters containing such modified terms were issued on
19.03.2018. These facts, coupled with the other financial problems faced by the
respondents, leading to their adopting a strategic debt restructuring scheme with their
lender banks in accordance with the guidelines issued by the RBI were mentioned by
them; Formation of a joint-lenders forum (JLFs) with the objective of realizing dues
payable by RCL and RTL, (to the tune of 45,000 crores) are cited by the respondents ₹
as reasons for default in fulfilling the commitments under the licenses. It is also stated
that these two respondents eventually decided to exit from the strategic debt
restructuring framework and monetize their assets, including the spectrum licenses.
These circumstances led the respondents (RCL and RTL) to approach TDSAT
complaining of acute financial crunch as well as interim orders made in the course of
litigation with lenders, to seek relief by way of extension of time towards payment of
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deferred spectrum charges, (under the licenses acquired under the NIA 2013 and NIA
2015). The reliefs claimed in TP 56/2018 and TP 58/2018 were declined by TDSAT.
Consequently, Civil Appeal No.4432-4433/2018 was preferred to this court which was
disposed of by granting time to the respondent licensees till 12.05.2018 for making
payments towards deferred spectrum instalment charges.
5. As narrated previously, these deferred instalment charges could not be made
within the time granted; consequently, the Union encashed bank guarantees to the tune
of 908.91 crores as against the actual amount of 774.25 crores due and payable by ₹ ₹
the respondent licensees. On 13.08.2018, the respondent licensees submitted fresh bank
guarantees for the sum of 774.25 crores towards the next instalments of deferred ₹
spectrum liability. They also urged to release the excess of 134.66 crores encashment ₹
(i.e. the difference between the amount of 908.91 crores against admitted dues of ₹ ₹
774.25 crores). The Union had accepted fresh bank guarantees towards the subsequent
spectrum liability ( 774.25 crores). The Union however, did not refund the excess ₹
sums. As a consequence, the respondents approached the TDSAT in execution
proceedings and sought a direction for the return of 134.66 crores, i.e. the excess ₹
amounts and also the release of the bank guarantee amounting to 108.95 crores. ₹
6. The Union disputed its liability before the TDSAT and relied upon Para 4.5b(x) of
the NIA 2015 and also alleged that default interest was payable and furthermore, that
RCL had defaulted in payment of spectrum instalment to the tune of 795.77 crores in ₹
March-April 2019.
7. The TDSAT, by its impugned order, partly allowed the respondent’s application
after noting the Union’s reservations and objections. The TDSAT observed as follows:
“In our considered view the request of the respondent would amount to a
demand for enhanced bank guarantee for other purposes. This cannot be
achieved through the method of encashment of bank guarantees furnished for
deferred Spectrum Charges.
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The existing charges against the petitioner have already been taken
note of and an amount of Rs.30.33 crores approx. has been adjusted out of the
encashed amount of Rs.908 crores. The remaining amount of Rs.104.34 crores
is lying and unadjusted amount should be returned to the petitioner without
prejudice to the rights of either of the parties for any other charges which the
petitioner may be found to be liable to pay. Since the petitioner has
reservations against the adjusted amount of Rs.30.33 crores, it may file its
reply by way of rejoinder within three weeks.
Post the matter under the same head on 29.1.2019.”
8. The Union contends that TDSAT’s impugned order is contrary to clause 4.5b(ix)
of NIA 2013 under the corresponding provision, i.e. Clause 4.5b(x) of NIA 2015 as well
as other conditions such as clauses 13.1 and 13.2 of the license agreement. It further
contends that the respondents could not have been granted relief given the fact that they
went into liquidation and were continuously defaulting in spectrum deferred payments;
the Union also cites the default to the extent of 21.53 crores – with overdue interest ₹
amount working out to 27.63 crores as on 03.03.2019. It, therefore, contended that the ₹
question of refund of excess amounts retained could not arise. It was lastly contended
that in any case, these issues could not have been gone in execution proceedings but
were properly the subject matter of substantive proceedings.
9. The respondents argue that the Union’s refusal to refund the money amounts to its
unjust enrichment at their cost. The Union has no right over the excess money directed
to be refunded by the Tribunal. It is submitted that despite the directions of the TDSAT,
the Union has refused to refund the money. It is further submitted that encashment of the
bank guarantees in respect of the subsequent default of the deferred spectrum
instalments for the year 2019 was stayed by the NCLAT (National Company Law
Appellate Tribunal). Thereafter, the moratorium was revived qua the Respondents and
therefore, the appropriate remedy available to the Union was under the IBC (Insolvency
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and Bankruptcy Code). The Union, it is stated, has already filed its claim before the
resolution professional for the said deferred spectrum instalments for the year 2019.
Therefore, it cannot be permitted to claim adjustment of the unlawfully encashed
amount towards subsequent deferred spectrum liabilities. The respondents also urge that
a subsequent default of the deferred spectrum instalment for the year 2019, is a separate
cause of action and the Union has remedies in law to recover those so called dues. It
cannot arbitrarily and illegally withhold return of excess amount, despite there being a
judicial order to the effect.
10. The facts narrated above show that the respondent-licencees faced financial
constraints; apparently telecom service providers as a class also faced some financial
stress, which triggered the Union to revisit its policy and ultimately modify the terms of
payment of deferred payment charges and consequently, the letter of 19.03.2018.
Despite these, the respondent licensees could not fulfil the conditions of the licenses
held by them (i.e. NIA 2013 and NIA 2015) vis-à-vis payment of deferred spectrum
charges; they approached the TDSAT, but without success. Their appeals to this court
fared better; the time for making payment was extended somewhat. Upon default (in
payment of the charges), the Union invoked guarantees under the sets of licenses. The
respondent licencees pointed out to the Union repeatedly, that despite the furnishing of
requisite guarantees (to the extent of 774.25 crores) later (on 19 ₹
th August, 2018) the excess amounts i.e. amount after adjusting the invoked guarantees towards the deferred charges had to be refunded. The Union did not do so; consequently RCL/RTL
approached TDSAT for a direction in execution proceedings. Their claim was accepted
inasmuch as the impugned direction was issued.
11. On a recapitulation of all circumstances, and the various terms of NIA 2013 and
NIA 2015, this court is of the opinion that the order of the TDSAT does not call for any
interference. The Union nowhere disputes that the respondent licensees’ liability toward
payment of deferred spectrum charges, in May, 2018, was to the tune of 774.25 crores. ₹
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The total amount realized upon encashment of the bank guarantees furnished by the
respondents, however, was to the extent of 908.91 crores. It is also a matter of record ₹
that the respondents furnished another bank guarantee to the tune of 774.25 crores. ₹
There is consequently logic and merit in the contention of RCL/RTL that the Union
unreasonably refused to refund the excess amounts. The Union’s argument that there
were subsequent defaults or short payments in respect of liability towards later periods,
or its objection that the impugned directions could not have been issued in execution
proceedings, are insubstantial. As noticed earlier, the bank guarantees for the later
periods were furnished by the respondents (to the extent of 774.25 crores). In these ₹
circumstances, there is no rationale for the Union to resist the demand for refund of
excess amounts. The TDSAT, in the opinion of this court, exercised its discretion, with
respect, circumspectly, because the entire amount of 134.66 crores claimed in the ₹
application was not allowed; rather the direction issued was in respect of 104. 34 ₹
crores.
12. In view of the foregoing discussion, it is held that there is no merit in the present
appeal, which is dismissed without costs.
.…....................…….....................J.
 [R. F. NARIMAN]
………….......................................J.
 [S. RAVINDRA BHAT]
New Delhi,
January 7, 2020.