LAW FOR ALL

Tuesday, March 9, 2021

Trail courts have to curbe the frivolous litigations in the bud even before they reach the stage of trial by discharging the accused in fit cases. the trial courts and the Magistrates have animportant role in curbing this injustice. They are the first lines ofdefence for both the integrity of the criminal justice system, andthe harassed and distraught litigant. We are of the considered opinion that the trial courts have the power to not merely decide on acquittal or conviction of the accused person after the trial,but also the duty to nip frivolous litigations in the bud even before they reach the stage of trial by discharging the accused in fit cases. This would not only save judicial time that comes at thecost of public money, but would also protect the right to liberty that every person is entitled to under Article 21 of the Constitution. In this context, the trial Judges have as much, ifnot more, responsibility in safeguarding the fundamental rights of the citizens of India as the highest court of this land.

Trail courts have to curbe the frivolous litigations in the bud even before they reach the stage of trial by discharging the accused in fit cases.

the trial courts and the Magistrates have animportant role in curbing this injustice. They are the first lines ofdefence for both the integrity of the criminal justice system, andthe harassed and distraught litigant. We are of the considered opinion that the trial courts have the power to not merely decide on acquittal or conviction of the accused person after the trial,but also the duty to nip frivolous litigations

in the bud even before they reach the stage of trial by discharging the accused in fit cases.

This would not only save judicial time that comes at thecost of public money, but would also protect the

right to liberty that every person is entitled to under Article 21 of the Constitution.

In this context, the trial Judges have as much, ifnot more, responsibility in safeguarding the fundamental rights of the citizens of India as the highest court of this land.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 283 OF 2021

(arising out of S.L.P. (Crl.) No. 6432/2020)

KRISHNA LAL CHAWLA & ORS. …APPELLANT(S)

VERSUS

STATE OF U.P. & ANR. …RESPONDENT(S)

J U D G M E N T

MOHAN M. SHANTANAGOUDAR, J.

Leave granted.

2. This appeal arises out of final order and judgement of the

High Court of Judicature at Allahabad (hereinafter, ‘High Court’)

dated 28.09.2020, dismissing the Miscellaneous Petition No.

2561 of 2020 filed by Appellants herein praying for quashing of

the following orders:

(i) Order dated 4.04.2019 of Learned Additional Chief Judicial

Magistrate, Meerut (hereinafter, ‘Magistrate’) in Complaint Case

No. 2943/2018, issuing summons against the Appellants;

(ii) Order dated 13.01.2020 of the Ld. Additional District and

Sessions Judge, Meerut (hereinafter, ‘Sessions Judge’) in

Criminal Revision No.202/2019, dismissing the Appellants’

revision application against the aforesaid summoning order.

3. The brief facts leading to this appeal are as follows:

3.1 The Appellants and Respondent No. 2 are neighbours. The

genesis of the proceedings before us lies in a physical altercation

that took place between the Appellants, and the Respondent No.

2 and his wife on 5.08.2012. While the occurrence of such an

altercation is an admitted fact between the parties, the details

thereof form the crux of this prolonged litigation.

3.2 On 5.08.2012, the Respondent No. 2 filed a NonCognizable

Report (NCR) No. 158/2012 against the Appellants alleging

offences under Sections 323, 504 and 506, Indian Penal Code,

1860 (hereinafter, ‘IPC’). It was his case that the Appellants came

to his house, beat him and his wife with iron rods, and

threatened to kill them.

3.3 The son of Appellant No. 1 also filed information on

5.08.2012, which was registered as NonCognizable Report (NCR)

No. 160/2012 with the Daurala Police Station, alleging offences

under Sections 323, 504 and 506, IPC against the Respondent

No. 2 and his wife. This Report counteralleged that the

Respondent No. 2 and his wife came to the Appellants’ house,

beat them up with wooden sticks and iron rods, and threatened

to kill their family.

3.4 It seems that even prior to the alleged occurrences, there

were disputes between the parties in 2006. A mutual settlement

took place on 6.02.2006 by which Respondent No. 2 agreed to

pay a penalty of Rs. 3,000/ to the Appellant No. 1.

Subsequently, in another dispute, on 21.12.2013 the Special

Chief Judicial Magistrate imposed a penalty of Rs. 1,500/ on

Appellant No. 4. Be that as it may, the fact remains that the

parties have been at loggerheads from 2006 onwards. It appears

that they have been fighting litigations on one pretext or the

other since 2006. Though they were agriculturists and

neighbours, peace did not prevail between them, which resulted

in a number of cases being lodged by them against each other.

3.5 The Appellants filed an application under Section 155(2) of

the Code of Criminal Procedure, 1973 (hereinafter, ‘CrPC’) before

the Magistrate on 27.04.2017, almost 5 years after the alleged

incident, seeking permission for the police to investigate NCR No.

160/2012. The learned Magistrate directed that NCR No.

160/2012 filed by the Appellants be registered as FIR in Crime

No. 283/2017. Investigation was conducted, and on 17.09.2017

a charge sheet was filed against the Respondent No. 2 and his

wife under Sections 323, 325, 504 and 506 of the IPC.

Subsequently, the Magistrate framed charges against Respondent

No. 2 and his wife. There is nothing on record to show that even

a single witness has been examined till date, though charges

were framed by the Magistrate long back. Thus, there has been

considerable delay in these proceedings, during both the

investigation and trial stages.

3.6 Being unsatisfied with the allegations made and charge sheet

filed against him, the Respondent No. 2 instituted a fresh private

complaint against the Appellants under Section 200 of CrPC in

Complaint Case No. 2943 of 2018 in respect of the very incident

that took place on 5.08.2012. This private complaint was filed

only on 11.05.2018, that is about six years from the date of

alleged incident. In the private complaint, not only new

allegations were added but all allegations are wilder and different

from the averments made in NCR No. 158/12, though the

incident is the same as of 5.08.2012 and between the same

parties. It may not be necessary for us to narrate the contents of

the private complaint inasmuch as we find and have satisfied

ourselves that the allegations made in the private complaint are

absolute material improvements over the allegations in NCR No.

158/12. Among other things, not only three additional eye

witnesses are inducted in the private complaint, but allegations

of fraud, injury to bull, forging of affidavit, etc. which were not

found in the 2012 complaint are also found in the private

complaint. The private complaint for the first time mentions

commission of offences under Section 429, IPC and Sections 10

and 11 of the Prevention of Cruelty to Animals Act, 1960. It is an

admitted fact that Appellant No. 4 had inflicted injury on

Respondent No. 2’s bull on 26.09.2011, for which Appellant No. 4

had voluntarily confessed and accepted penalty of Rs. 1,500 from

the Magistrate as mentioned supra. Be that as it may, we see no

reason why Respondent No. 2 chose to rehash this incident in

the private complaint given that Appellant No. 4 has already been

convicted for the offence, and it is of no relevance to the present

case.

Curiously, the Magistrate was pleased to issue process

against the Appellants based on this vexatious private complaint,

which came to be confirmed by the Learned Sessions Judge in

the impugned order. The Learned Sessions Judge has thus not

only misunderstood Section 200, CrPC and its scope but also

made a new case in favour of Respondent No.2 by reading

Section 506 Part II, IPC which is punishable by 7 years in the

place of Section 506, IPC, probably only to bring the private

complaint within the prescribed period of limitation under

Section 468 CrPC. It is nobody’s case that the offence under

Section 506(II) has taken place, which means that the Courts

took extra interest to improve the case of the

respondent/complainant.

This appeal is filed challenging both the orders of the

Magistrate as well as the Sessions Judge in respect of issuance of

process, as mentioned supra.

4. The learned counsel for Respondent No. 2 sought to justify

the impugned orders by relying on the following excerpt from this

Court’s decision in Upkar Singh v. Ved Prakash & ors., (2004)

13 SCC 292, which clarified the import of its previous holding in

T.T. Antony v. State of Kerala, (2001) 6 SCC 181:

“23. Be that as it may, if the law laid down by this

Court in T.T. Antony case [(2001) 6 SCC 181: 2001

SCC (Cri) 1048] is to be accepted as holding that a

second complaint in regard to the same incident filed

as a countercomplaint is prohibited under the Code

then, in our opinion, such conclusion would lead to

serious consequences. This will be clear from the

hypothetical example given hereinbelow i.e. if in regard

to a crime committed by the real accused he takes the

first opportunity to lodge a false complaint and the

same is registered by the jurisdictional police then the

aggrieved victim of such crime will be precluded from

lodging a complaint giving his version of the incident in

question, consequently he will be deprived of his

legitimated right to bring the real accused to book.

This cannot be the purport of the Code.”

Therefore, Upkar Singh clarified that this Court’s previous

decision in T.T. Anthony will not bar the filing of a second

complaint with respect to the same incident, if such second

complaint is filed as a countercomplaint by the other party. We

are in agreement with the aforementioned construction of T.T.

Anthony. However, we fail to see how this position of law comes

to Respondent No.2’s rescue. The question posed in the present

case for consideration before us is wholly different, and concerns

the validity of the private complaint filed by Respondent No. 2,

after an earlier information filed as NCR No. 158/2012 – both of

which were filed by the same party, against the same accused,

and in relation to the same incident that too after the charge

sheet was filed in case arising out of NCR No. 160/12 in Crime

No. 283/2017 after taking due permission of Magistrate. The

aforementioned portion of Upkar Singh relied on by Respondent

No. 2, thus, does not benefit his case.

5. Indeed, a closer look at the decision in Upkar Singh takes us

to the contrary conclusion. In regard to the question of material

improvements made in a subsequent private complaint by the

same complainant against the same accused with regard to the

same incident, it may be useful to refer to the following excerpt

from Upkar Singh, which further clarifies the holding in T.T.

Antony:

“17…In our opinion, this Court in that case only held

that any further complaint by the same complainant or

others against the same accused, subsequent to the

registration of a case, is prohibited under the Code

because an investigation in this regard would have

already started and further complaint against the

same accused will amount to an improvement on the

facts mentioned in the original complaint, hence will

be prohibited under Section 162 of the Code.”

(emphasis supplied)

It is the aforementioned part of the holding in Upkar Singh

that bears directly and strongly upon the present case. This

Court in Upkar Singh has clearly stated that any further

complaint by the same complainant against the same accused,

after the case has already been registered, will be deemed to be

an improvement from the original complaint. Though Upkar

Singh was rendered in the context of a case involving cognizable

offences, the same principle would also apply where a person

gives information of a noncognizable offence and subsequently

lodges a private complaint with respect to the same offence

against the same accused person. Even in a noncognizable case,

the police officer after the order of the Magistrate, is empowered

to investigate the offence in the same manner as a cognizable

case, except the power to arrest without a warrant. Therefore, the

complainant cannot subject the accused to a double whammy of

investigation by the police and inquiry before the Magistrate.

We are cognizant of the fact that in the present case, no

investigation had begun pursuant to NCR No. 158/2012 filed by

the Respondent No. 2 for a certain period. However, the overall

concern expressed by this Court in Upkar Singh, about the

misuse of successive complaints by the same party, where the

second complaint is clearly propped up to materially improve on

the earlier one, resonates with us. We regret to say that the same

thing which this Court had categorically prohibited in Upkar

Singh has happened in the present case.

6. The grave implications of allowing such misuse may be

understood better in light of the following exposition by this

Court in Amitbhai Anilchandra Shah v. CBI & anr., (2013) 6

SCC 348:

“37. This Court has consistently laid down the law on

the issue interpreting the Code, that a second FIR in

respect of an offence or different offences committed in

the course of the same transaction is not only

impermissible but it violates Article 21 of the

Constitution. In T.T. Antony [(2001) 6 SCC 181 : 2001

SCC (Cri) 1048] , this Court has categorically held that

registration of second FIR (which is not a crosscase) is

violative of Article 21 of the Constitution…” (emphasis

supplied)

Article 21 of the Constitution guarantees that the right to

life and liberty shall not be taken away except by due process of

law. Permitting multiple complaints by the same party in respect

of the same incident, whether it involves a cognizable or private

complaint offence, will lead to the accused being entangled in

numerous criminal proceedings. As such, he would be forced to

keep surrendering his liberty and precious time before the police

and the Courts, as and when required in each case. As this Court

has held in Amitbhai Anilchandra Shah (supra), such an

absurd and mischievous interpretation of the provisions of the

CrPC will not stand the test of constitutional scrutiny, and

therefore cannot be adopted by us.

7. The implications of such successive FIRs on an individual’s

rights under Article 21 of the Constitution has been elaborated

further in T.T. Antony (supra):

“27. A just balance between the fundamental rights of

the citizens under Articles 19 and 21 of the

Constitution and the expansive power of the police to

investigate a cognizable offence has to be struck by the

court. There cannot be any controversy that subsection (8) of Section 173 CrPC empowers the police to

make further investigation, obtain further evidence

(both oral and documentary) and forward a further

report or reports to the Magistrate. In Narang case

[Ram Lal Narang v. State (Delhi Admn.), (1979) 2 SCC

322 : 1979 SCC (Cri) 479] it was, however, observed

that it would be appropriate to conduct further

investigation with the permission of the court.

However, the sweeping power of investigation does not

warrant subjecting a citizen each time to fresh

investigation by the police in respect of the same

incident, giving rise to one or more cognizable offences,

consequent upon filing of successive FIRs whether

before or after filing the final report under Section

173(2) CrPC…”

(emphasis supplied)

Thus, it is incumbent upon this Court to preserve this

delicate balance between the power to investigate offences under

the CrPC, and the fundamental right of the individual to be free

from frivolous and repetitive criminal prosecutions forced upon

him by the might of the State. If the Respondent No. 2 was

aggrieved by lack of speedy investigation in the earlier case filed

by him, the appropriate remedy would have been to apply to the

Magistrate under Section 155(2), CrPC for directions to the police

in this regard. Filing a private complaint without any prelude,

after a gap of six years from the date of giving information to the

police, smacks of mala fide on the part of Respondent No. 2.

8. It is also crucial to note that, in the fresh complaint case

instituted by him, Respondent No. 2 seems to have deliberately

suppressed the material fact that a charge sheet was already filed

in relation to the same incident, against him and his wife,

pursuant to NCR No.160/2012 (Crime No. 283/2017) filed by

Appellant No.1’s son. No reference to this charge sheet is found

in the private complaint, or in the statements under Section 200,

CrPC filed by Respondent No. 2 and his wife. In fact, both the

private complaint and the statement filed on behalf of his wife,

merely state that the police officials have informed them that

investigation is ongoing pursuant to their NCR No.158/2012. The

wife’s statement additionally even states that no action has been

taken so far by the police. It is the litigant’s bounden duty to

make a full and true disclosure of facts. It is a matter of trite law,

and yet bears repetition, that suppression of material facts before

a court amounts to abuse of the process of the court, and shall

be dealt with a heavy hand (Ram Dhan v. State of Uttar

Pradesh & Anr., (2012) 5 SCC 536; K.D. Sharma v. Steel

Authority of India Ltd., (2008) 12 SCC 481).

9. It is also pertinent to note that as on 5.08.2012, Appellant

No.1 was a 76yearold man; Appellant No.2 was suffering from

epileptic seizures; and Appellant No. 4 was of unsound mind.

There is no equity in allowing them to be dragged into criminal

proceedings pertaining to a petty offence, instituted 6 years after

the alleged incident. The sword of Damocles cannot be allowed to

forever hang on their heads, falling unpredictably at the whims of

a litigant seeking to harass and persecute at will. We gain

strength in our conclusions from Article 21 of the Constitution,

which encapsulates the right to a speedy trial. This right has

been interpreted to include not only the actual trial before the

Court, but also the preceding stages of inquiry and police

investigation as well (Vakil Prasad Singh v. State of Bihar,

(2009) 3 SCC 355; Abdul Rehman Antulay & ors. v. R.S.

Nayak & anr., (1992) 1 SCC 225).

10. The sum of the above circumstances and precedents leads

us to what we see as an inevitable conclusion. That Respondent

No. 2’s institution of the fresh complaint case in 2018 under

Section 200 CrPC was a concerted effort to mislead the

Magistrate with the oblique motive of harassing the Appellants

with a frivolous and vexatious case against them. That the same

was a counterblast to the charge sheet dated 17.09.2017 filed

against Respondent No. 2 and his wife in the case registered by

the Appellant. The history of illwill and malice between the

parties leads further credence to Respondent No.2’s motivations

for tying up the Appellants in frivolous and harrowing criminal

litigation, long years after the alleged incident. Respondent No.2’s

conduct in filing a delayed complaint case, suppressing material

facts, and utilising fresh proceedings to materially improve on his

earlier version, in totality, amounts to gross abuse of the process

of court.

Role of the Lower Judiciary in Preventing Abuse of Court

Process:

11. We find it imperative to observe that this is a case that

should not have been allowed to reach as far as this Court. The

justice dispensation machinery in India is plagued with backlogs,

with 70% of the pendency before the subordinate courts being on

the criminal side.1

A significant factor in this backlog is the vast

mass of frivolous litigation instituted year after year by litigants

with an intent to use the courts of justice for their own

mischievous ends. Curtailing such vexatious litigation is, thus, a

crucial step towards a more effective justice system – a step that

cannot be taken without the active involvement of the lower

judiciary, especially in criminal proceedings.

12. Immediately after the criminal justice system is set in

motion, its course is almost entirely dependent on the judicial

application of mind by the Magistrate. When a police complaint is

1 Roshni Sinha, ‘Examining pendency of cases in the Judiciary’, PRS INDIA

(August 8, 2019).

filed on the commission of a cognizable offence under Section 154

CrPC, the Magistrate decides if the charge against the accused

person is made out before the trial begins. Separate procedure is

prescribed if the complaint under Section 200 CrPC is filed. The

aforesaid provisions make it abundantly clear that the Magistrate

carries the stream of criminal proceeding forward after it is set in

motion by the informant/complainant. Consequently, and

automatically, the Magistrate also carries the responsibility for

ensuring this stream does not carry forward in cases where it

should not.

13. The aforesaid powers bestowed on the Magistrate have grave

repercussions on individual citizens’ life and liberty. Thus, these

powers also confer great responsibility on the shoulders of the

Magistrate – and must be exercised with great caution, and after

suitable judicial application of mind. Observations in a similar

vein were made by this Court in Pepsi Foods Ltd. v. Special

Judicial Magistrate, (1998) 5 SCC 749:

“28. Summoning of an accused in a criminal case is a

serious matter. Criminal law cannot be set into motion

as a matter of course. It is not that the complainant

has to bring only two witnesses to support his

allegations in the complaint to have the criminal law

set into motion. The order of the Magistrate

summoning the accused must reflect that he has

applied his mind to the facts of the case and the law

applicable thereto. He has to examine the nature of

allegations made in the complaint and the evidence

both oral and documentary in support thereof and

would that be sufficient for the complainant to succeed

in bringing charge home to the accused. It is not that

the Magistrate is a silent spectator at the time of

recording of preliminary evidence before summoning of

the accused. The Magistrate has to carefully scrutinise

the evidence brought on record and may even himself

put questions to the complainant and his witnesses to

elicit answers to find out the truthfulness of the

allegations or otherwise and then examine if any

offence is prima facie committed by all or any of the

accused.”

(emphasis supplied)

This Court, thus, clearly emphasised that the power to issue

a summoning order is a matter of grave importance, and that the

Magistrate must only allow criminal law to take its course after

satisfying himself that there is a real case to be made.

14. Similarly, the power conferred on the Magistrate under

Section 202, CrPC to postpone the issue of process pursuant to a

private complaint also provides an important avenue for filtering

out of frivolous complaints that must be fully exercised. A fourJudge Bench of this Court has eloquently expounded on this in

Chandra Deo Singh v. Prokash Chandra Bose & Anr., AIR

1963 SC 1430:

“7. …No doubt, one of the objects behind the

provisions of Section 202 CrPC is to enable the

Magistrate to scrutinise carefully the allegations made

in the complaint with a view to prevent a person

named therein as accused from being called upon to

face an obviously frivolous complaint. But there is also

another object behind this provision and it is to find

out what material there is to support the allegations

made in the complaint. It is the bounden duty of the

Magistrate while making an enquiry to elicit all facts

not merely with a view to protect the interests of an

absent accused person, but also with a view to bring to

book a person or persons against whom grave

allegations are made. Whether the complaint is

frivolous or not has, at that stage, necessarily to be

determined on the basis of the material placed before

him by the complainant...”

(emphasis supplied)

Thus, it is clear that, on receipt of a private complaint, the

Magistrate must first, scrutinise it to examine if the allegations

made in the private complaint, inter alia, smack of an instance of

frivolous litigation; and second, examine and elicit the material

that supports the case of the complainant.

15. It is said that every trial is a voyage of discovery in which the

truth is the quest. In India, typically, the Judge is not actively

involved in ‘factfinding’ owing to the adversarial nature of our

justice system. However, Section 165 of the Indian Evidence Act,

1872 by providing the Judge with the power to order production

of material and put forth questions of any form at any time,

marks the influence of inquisitorial processes in our legal system.

This wideranging power further demonstrates the central role

played by the Magistrate in the quest for justice and truth in

criminal proceedings, and must be judiciously employed to stem

the flow of frivolous litigation.

16. All of this leads to one inescapable conclusion. That the Trial

Judge has a duty under the Constitution and the CrPC, to

identify and dispose of frivolous litigation at an early stage by

exercising, substantially and to the fullest extent, the powers

conferred on him. This Court has earlier emphasised on the high

degree of responsibility shouldered by the trial Judges in All

India Judges’ Association v. Union of India, (1992) 1 SCC

119. Ranganath Misra CJ (as he was then) writing for himself

and two others stated:

“42. The trial Judge is the kingpin in the hierarchical

system of administration of justice. He directly comes

in contact with the litigant during the proceedings in

Court. On him lies the responsibility of building up of

the case appropriately and on his understanding of the

matter the cause of justice is first answered. The

personality, knowledge, judicial restraint, capacity to

maintain dignity are the additional aspects which go

into making the Court's functioning successful.”

17. Frivolous litigation should not become the order of the day in

India. From misusing the Public Interest Litigation jurisdiction of

the Indian courts to abusing the criminal procedure for harassing

their adversaries, the justice delivery system should not be used

as a tool to fulfil personal vendetta. The Indian judiciary has

taken cognizance of this issue. In 2014, this Court elucidated as

follows, the plight of a litigant caught in the cobweb of frivolous

proceedings in Subrata Roy Sahara v. Union of India, (2014) 8

SCC 470:

“191…One needs to keep in mind, that in the process

of litigation, there is an innocent sufferer on the other

side, of every irresponsible and senseless claim. He

suffers long drawn anxious periods of nervousness and

restlessness, whilst the litigation is pending, without

any fault on his part. He pays for the litigation, from

out of his savings (or out of his borrowings), worrying

that the other side may trick him into defeat, for no

fault of his. He spends invaluable time briefing counsel

and preparing them for his claim. Time which he

should have spent at work, or with his family, is lost,

for no fault of his...”

While the Court’s ruling pertained to civil proceedings, these

observations ring true for the criminal justice machinery as well.

We note, with regret, that 7 years hence, and there has still been

no reduction in such plight. A falsely accused person not only

suffers monetary damages but is exposed to disrepute and stigma

from society. While running from pillar to post to find a lawyer to

represent his case and arranging finances to defend himself

before the court of law, he loses a part of himself.

18. As aforesaid, the trial courts and the Magistrates have an

important role in curbing this injustice. They are the first lines of

defence for both the integrity of the criminal justice system, and

the harassed and distraught litigant. We are of the considered

opinion that the trial courts have the power to not merely decide

on acquittal or conviction of the accused person after the trial,

but also the duty to nip frivolous litigations in the bud even

before they reach the stage of trial by discharging the accused in

fit cases. This would not only save judicial time that comes at the

cost of public money, but would also protect the right to liberty

that every person is entitled to under Article 21 of the

Constitution. In this context, the trial Judges have as much, if

not more, responsibility in safeguarding the fundamental rights

of the citizens of India as the highest court of this land.

19. As recorded by us above, the present controversy poses a

typical example of frivolous litigants abusing court process to

achieve their mischievous ends. In the case before us, the

Magistrate was aware of the significant delay in the filing of

private complaint by Respondent No. 2, and of the material

improvements from the earlier NCR No. 158/2012 which were

made in the private complaint. It was incumbent on the

Magistrate to examine any possibility of abuse of process of the

court, make further enquiries, and dismiss the frivolous

complaint at the outset after judicial application of mind.

20. However, this was not done – the Magistrate issued process

against the Appellants by order dated 4.04.2019, and this

controversy has now reached this Court for disposal.

21. It is a settled canon of law that this Court has inherent

powers to prevent the abuse of its own processes, that this Court

shall not suffer a litigant utilising the institution of justice for

unjust means. Thus, it would be only proper for this Court to

deny any relief to a litigant who attempts to pollute the stream of

justice by coming to it with his unclean hands. Similarly, a

litigant pursuing frivolous and vexatious proceedings cannot

claim unlimited right upon court time and public money to

achieve his ends.

22. This Court’s inherent powers under Article 142 of the

Constitution to do ‘complete justice’ empowers us to give

preference to equity and a justiceoriented approach over the

strict rigours of procedural law (State of Punjab v. Rafiq Masih

(Whitewasher), (2014) 8 SCC 883). This Court has used this

inherent power to quash criminal proceedings where the

proceedings are instituted with an oblique motive, or on

manufactured evidence (Monica Kumar (Dr.) & anr. v. State of

Uttar Pradesh, (2008) 8 SCC 781). Other decisions have held

that inherent powers of High Courts provided in Section 482,

CrPC may be utilised to quash criminal proceedings instituted

after great delay, or with vengeful or malafide motives. (Sirajul

& ors. v. State of Uttar Pradesh, (2015) 9 SCC 201; State of

Haryana v. Bhajan Lal, AIR 1992 SCC 604). Thus, it is the

constitutional duty of this Court to quash criminal proceedings

that were instituted by misleading the court and abusing its

processes of law, only with a view to harass the hapless litigants.

23. In this Court’s quest for complete justice, and to bring peace

between the parties, who are fighting various litigations since

2006, we exercise our powers under Article 142 to quash all the

litigations between the parties arising out of this incident.

Our Conclusions:

24. The impugned judgment of the High Court dated 28.09.2020

in Miscellaneous Petition No. 2561 of 2020 is set aside.

25. The proceedings in Complaint Case No.2943/2018, including

the order of summons against the Appellants dated 4.04.2019 be

quashed.

26. Further, proceedings pursuant to NCR No. 158/2012 dated

5.08.2012 filed by Respondent No. 2 also be quashed, in order to

foreclose further frivolous litigation.

27. Any other criminal cases between the parties initiated by

them in relation to the incident dated 5.08.2012, including the

criminal proceedings arising from NCR No.160/2012 (Crime No.

283/2017) instituted by the Appellants, are quashed in exercise

of our powers under Article 142 of the Constitution, in the

interests of giving quietus to these criminal proceedings arising

out of a petty incident 9 years ago.

28. The Appeal is allowed in the aforesaid terms.

………………………………………….J.

(MOHAN M. SHANTANAGOUDAR)

………………………………………....J.

(R. SUBHASH REDDY)

NEW DELHI;

MARCH 08, 2021

Due to the onset of COVID-19 pandemic, this Court took suo motu cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State). By an order dated 27.03.2020 this Court extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders.= We deem it appropriate to issue the following directions: - 1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021. 2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. 3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods 2 | P a g e prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

Due to the onset of COVID-19 pandemic, this Court took suo motu cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State). By an order dated 27.03.2020 this Court extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders.=

We deem it appropriate to issue the following directions: -

1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.

2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods 2 | P a g e prescribed under Sections 23

(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

Suo Motu Writ Petition (Civil) No.3 of 2020

IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION.

……. Petitioner (s)

Versus

……Respondent (s)

O R D E R

1. Due to the onset of COVID-19 pandemic, this Court took

suo motu cognizance of the situation arising from difficulties

that might be faced by the litigants across the country in

filing petitions/applications/suits/appeals/all other

proceedings within the period of limitation prescribed under

the general law of limitation or under any special laws (both

Central or State). By an order dated 27.03.2020 this Court

extended the period of limitation prescribed under the

general law or special laws whether compoundable or not

with effect from 15.03.2020 till further orders. The order

dated 15.03.2020 was extended from time to time. Though,

we have not seen the end of the pandemic, there is

considerable improvement. The lockdown has been lifted

and the country is returning to normalcy. Almost all the

Courts and Tribunals are functioning either physically or by

1 | P a g e

virtual mode. We are of the opinion that the order dated

15.03.2020 has served its purpose and in view of the

changing scenario relating to the pandemic, the extension of

limitation should come to an end.

2. We have considered the suggestions of the learned

Attorney General for India regarding the future course of

action. We deem it appropriate to issue the following

directions: -

1. In computing the period of limitation for any suit,

appeal, application or proceeding, the period from

15.03.2020 till 14.03.2021 shall stand excluded.

Consequently, the balance period of limitation

remaining as on 15.03.2020, if any, shall become

available with effect from 15.03.2021.

2. In cases where the limitation would have expired

during the period between 15.03.2020 till

14.03.2021, notwithstanding the actual balance

period of limitation remaining, all persons shall

have a limitation period of 90 days from

15.03.2021. In the event the actual balance

period of limitation remaining, with effect from

15.03.2021, is greater than 90 days, that longer

period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall

also stand excluded in computing the periods

2 | P a g e

prescribed under Sections 23 (4) and 29A of the

Arbitration and Conciliation Act, 1996, Section 12A

of the Commercial Courts Act, 2015 and provisos

(b) and (c) of Section 138 of the Negotiable

Instruments Act, 1881 and any other laws, which

prescribe period(s) of limitation for instituting

proceedings, outer limits (within which the court

or tribunal can condone delay) and termination of

proceedings.

4. The Government of India shall amend the

guidelines for containment zones, to state.

“Regulated movement will be allowed for

medical emergencies, provision of essential

goods and services, and other necessary

functions, such as, time bound applications,

including for legal purposes, and educational

and job-related requirements.”

3. The Suo Motu Writ Petition is disposed of accordingly.

........................CJI.

[ S. A. BOBDE ]

................................J.

[ L. NAGESWARA RAO ]

..............................J.

[ S. RAVINDRA BHAT ]

New Delhi,

March 08, 2021.

3 | P a g e

Contempt Petitions allege infraction on part of NOIDA, the Respondent-Authority in not obeying the directions issued by this Court in its Judgment and Order dated 05.07.2011 in Civil Appeal No.4564 of 20081 and all other connected matters; and seek issuance of directions to NOIDA to execute a fresh lease deed/supplementary lease deed as detailed in the aforesaid Judgment and Order dated 05.07.2011 and for rescheduling of the balance land premium/instalments. Though the scope of the Contempt Petitions was restricted to see whether functionaries of NOIDA were guilty of disobedience of the directions issued by this Court, the matter was considered from the standpoint of enabling both sides to settle their disputes and get over the stalemate which has been obtaining for the last 10 years. The endeavour was to see that the interest of both sides is sufficiently taken care of and more than anything else, the public interest must stand subserved. It is with this solution in mind, that the directions as stated above have been issued by this Court.

Contempt Petitions allege infraction on part of NOIDA, the Respondent-Authority in not obeying the directions issued by this Court in its Judgment and Order dated 05.07.2011 in Civil Appeal No.4564 of 20081 and all other connected matters; and seek issuance of directions to NOIDA to execute a fresh lease deed/supplementary lease deed as detailed in the aforesaid Judgment and Order dated 05.07.2011 and for rescheduling of the balance land premium/instalments.

Though the scope of the Contempt Petitions was restricted to see whether functionaries of NOIDA were guilty of disobedience of the directions issued by this Court, the matter was considered from the standpoint of enabling both sides to settle their disputes and get over the stalemate which has been obtaining for the last 10 years. The endeavour was to see that the interest of both sides is sufficiently taken care of and more than anything else, the public interest must stand subserved. It is with this solution in mind, that the directions as stated above have been issued by this Court.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

Reportable

IN THE SUPREME COURT OF INDIA

INHERENT JURISDICTION

CONTEMPT PETITION (CIVIL) NO.413 OF 2019

CIVIL APPEAL NO.4564 OF 2008

HAMPSHIRE HOTELS AND

RESORTS (NOIDA) PVT. LTD. …Petitioner(s)

VERSUS

RITU MAHESHWARI, CHIEF EXECUTIVE OFFICER,

NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY

(NOIDA) …Contemnor

WITH

CONTEMPT PETITION (CIVIL) NO.416 OF 2019 IN CIVIL APPEAL NO.4570 OF 2008

WITH

CONTEMPT PETITION (CIVIL) NO.415 OF 2019 IN CIVIL APPEAL NO.4568 OF 2008

WITH

CONTEMPT PETITION (CIVIL) NO.414 OF 2019 IN CIVIL APPEAL NO.4566 OF 2008

WITH

CONTEMPT PETITION (CIVIL) NO.645 OF 2019 IN CIVIL APPEAL NO.4565 OF 2008

WITH

CONTEMPT PETITION (CIVIL) NO.646 OF 2019 IN CIVIL APPEAL NO.4571 OF 2008

WITH

CONTEMPT PETITION (CIVIL) NO.647 OF 2019 IN CIVIL APPEAL NO.4569 OF 2008

J U D G M E N T

Uday Umesh Lalit, J.

1. These Contempt Petitions allege infraction on part of NOIDA, the

Respondent-Authority in not obeying the directions issued by this Court in

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

its Judgment and Order dated 05.07.2011 in Civil Appeal No.4564 of 20081

and all other connected matters; and seek issuance of directions to NOIDA

to execute a fresh lease deed/supplementary lease deed as detailed in the

aforesaid Judgment and Order dated 05.07.2011 and for rescheduling of

the balance land premium/instalments.

2. The basic facts in the backdrop of which the present proceedings

have arisen, were set out in paragraphs 3, 4, 5, 6, 7, 8 and 9 of the

Judgment dated 05.07.2011 as under:-

“3. At the 135th meeting of the Board of

Directors/Members of NOIDA Authority (for short

‘NOIDA Board’) held on 5.6.2006, the said State

Policy dated 22.5.2006 to attract more capital

investment in tourism/hotel industry was considered.

The NOIDA Board resolved to implement the said

policy in the areas falling within its jurisdiction and

apply the rates applicable to its Industrial area (Phase

I) to the plots to be allotted to the hotel industry. The

rate referred was the reserve rate of Rs.7400/- per

sq.m. applicable to Industrial Area (Phase I) plots,

fixed by the NOIDA Board at its meeting held on

20.3.2006.

4. The resolution also mentioned that the

implementation of the said policy should ensure

construction of sufficient hotels before the

Commonwealth Games to be held in Delhi, which

were scheduled to commence in October, 2010.

Having regard to the importance of the matter, the

Principal Secretary, Tourism, the Commissioner,

Meerut Circle and the Director of Industries of the

U.P. Government, attended the said meeting as special

invitees.

1 (2011) 7 SCC 493 (ITC Ltd. vs. State of Uttar Pradesh and Ors.)

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

5. At a meeting held by the Circle Commissioner,

Meerut on 2.7.2006 with officials of NOIDA

Authority, he communicated the direction that

construction of Hotels should be completed before the

commencement of the Commonwealth Games. At the

said meeting the following 14 plots were identified as

being suitable for allotment as hotels/plots: (a) six

plots each measuring 40000 square metre for 5 star

hotels in Sectors 96, 97 and 98; (b) five plots each

measuring 20000 square metre for 4 star hotels in

Sectors 72, 101, 105, 124 and 135; and (c) three plots

for 3 star hotels (measuring 20000, 20000 & 10000

square metre) in Sectors 62, 63, and 142.

6. In view of the Government’s Policy dated

22.5.2006 and the decisions taken at the meeting

chaired by the Commissioner, Meerut Circle on

6.7.2006, the NOIDA Board took the following

decisions at its 136th meeting held on 14.7.2006 :

(i) It approved the proposal for making provision

for hotels in reserved commercial area – Zone

C 3 (as hotels had not been permitted in

commercial areas C-1 and C-2 of the master

plan reserved for wholesale and retail activities

and as there was demand for hotels due to

Commonwealth Games 2010) and directed

inclusion thereof in the approved proposed

NOIDA Master Plan 2021 and reference to the

State Government for its approval.

(ii) It decided to launch the Hotel Plot Allotment

Scheme and authorized the CEO to finalise the

terms and conditions for allotment, so as to

ensure construction of hotels by the allottees

before the commencement of the

Commonwealth Games.

In pursuance of the said decision, NOIDA Authority

sent a communication dated 20.7.2006 to the State

Government seeking approval of its decision to make

a provision for hotels in commercial areas under Zone

3 and inclusion of it in NOIDA Master Plan, 2021.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

7. The Secretary, Sports & Youth Affairs, Government

of India, held meetings with NOIDA Authority

officials on 28.7.2006 and 22.8.2006 in connection

with preparations for Commonwealth Games

scheduled in October, 2010. At those meetings, the

Secretary, Sports & Youth Affairs stressed the

Government of India’s request for earmarking 25

hotel plots in NOIDA. Therefore it was decided to

reduce the area of 5 star hotels to 24000 square metre

(instead of 40,000 square metre earlier proposed), the

area of 4 star hotels to 12500 square metre (instead of

20000 square metre) and the area of 3 star Hotels to

7500 square metre (instead of 10000 square metre)

and thereby convert the 14 plots into 25 plots made up

of 10 plots for 5 star hotels, 5 plots for 4 star hotels

and 10 plots for 3 star hotels.

8. At the meeting held on 28.8.2006 under the

chairmanship of the Circle Commissioner, Meerut, the

said decision to increase the number of plots for

hotels from 14 to 25 by reducing the plot

measurements, in the following manner:

(i) Ten plots for 3 star hotels – (area 7500 square

metre each)

Plot Nos. SDC/H1 and SDC/H2 in sector 62, plot

Nos.A-155/B and A-155/C in sector 63, plot No.

SDC/H 2 in sector 72, plot No.124A/2 in sector

124, plot No.SDC/H-2 in sector 103, plot

No.SDC/H-2 in sector 105, SDC/H-2 in sector

135 and plot No.14 in sector 142.

(ii) Five plots for 4 star hotels : (area : 12,500 square

metre each)

Plot No.SDC/H-1 in sectors 72, 103, 105 and 135

and plot No.124A/1 in sector 124.

(iii) Ten plots for 5 star hotels : (area 24,000 square

metre)

Plot Nos.H-1 to H-10 in sectors 96, 97 and 98.

9.The proposal for approving the increase in number

of plots and reductions in their size was placed before

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

the NOIDA Board at the 137th meeting on 1.9.2006.

The NOIDA Board approved the proposal. The terms

and conditions for allotment drawn by the CEO were

also approved with a modification that they should

provide for obtaining Hotel Completion Certificate by

December 2009 (with authority to CEO to grant

extension of time). In pursuance of the said decision,

NOIDA Authority published the Hotel Site

Allotment Scheme on 17.10.2006, by advertisements

in newspapers and by issue of information brochures

containing detailed terms and conditions, inviting

applications for allotment of plots for 5 star, 4 star and

3 star hotels in NOIDA on 90 years lease basis.

Applications were made available between

17.10.2006 and 1.11.2006 (extended till 10.11.2006).”

3. The facts in all these Contempt Petitions are more or less identical and

for facility, Contempt Petition No.413 of 2019 is taken as the lead case. The

reference to the expression the “Petitioner” shall hereafter be taken as the

Petitioner in said lead case while the expression the “Petitioners” shall be taken

as all the Petitioners in the Contempt Petitions. The application preferred by the

Petitioner for allotment of Plot No.03, Block No. H, Sector No.96, Noida,

admeasuring 24,000 square metre having been accepted, Lease Deed dated

28.03.2007 was executed between the Petitioner and NOIDA. The relevant

recitals of the Lease Deed were as under:-

“WHEREAS the Authority had floated a scheme for

allotment of [3/4/5] star hotel sites in NOIDA on

17/10/2006 (hereinafter referred to as the “Scheme”)

in compliance of Tourism Department, U.P.

Government Order No.984/41-06-180/2005 dated

22/05/2006 and had invited applications for allotment

of Hotel site under the said Scheme from

companies/institutions/consortium of companies/

institutions registered/incorporated in India or abroad

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

which are in hotel business and satisfying the

eligibility criteria and subject to and on the terms and

conditions set-forth in the said Scheme; and

WHEREAS the Authority, after evaluation of the

applications received from the eligible ‘applicants

including, inter alia, M/s. HAMPHSIRE HOTELS &

RESORTS LLC, a Company incorporated and

existing under the laws of jurisdiction of its

incorporation, has issued its allotment Letter No.

NOIDA/DGM (IND.)/2007/91 dated 12/01/2007

(hereinafter referred to as the “Allotment Letter”) to

the said M/S. HAMPSHIRE HOTELS & RESORTS

LLC allotting them Plot No.03, Block-H, Sector-96,

NOIDA admeasuring 24000 square metre

approximately and more fully described in Schedule

‘I’ hereto and inter alia requiring the M/s.

HAMPSHIRE HOTELS & RESORTS LLC to, inter

alia, pay the premium, take possession and execute

the lease deed within the period stipulated in the

Letter of Allotment; and

… … …

I. That in consideration of the total premium of

Rs.19,53,60,000/- (Rupees Ninteen Crores

Fifty Three Lacs and Sixty Thousand only)

agreed to be paid by the Lessee at the time and

in the manner hereinafter provided and in

further consideration of the lease rent herein

reserved and of the covenants, conditions and

agreements hereinafter contained and on the

part of the Lessee to be paid observed and

performed, the Lessor doth hereby grant and

demise UNTO the Lessee all that plot of land

numbered as 03 in Block H Sector No.96

situated within the New Okhla Industrial

Development Area, District Gautam Budh

Nagar, Uttar Pradesh, and containing by

measurement 24,000 square metre …

… … …

II. That the Lessee has on or before the date of

execution of this lease deed paid unto the

Lessor at its office or as otherwise directed by

the Lessor the yearly Lease Rent of

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

Rs.48,84,000.00 (Rs. Forty Eighty Lacs Eighty

Four Thousand only) in advance on yearly

basis, for the first 10 years of the Term of the

Lease hereby granted commencing from the

date of execution of the lease deed and the

yearly Lease Rent for the remaining period of

the Term shall be payable by the Lessee

annually in advance on or before the due date

of payment set-forth in Clause 1 hereinabove,

without waiting for any demand, notice or

reminder therefor. … …”

4. The allotment of the hotel sites by NOIDA to various such allottees

was challenged by way of two Writ Petitions (Civil Misc. Writ Petition

No.24917/2007 and PIL Writ Petition No.29252/2007) in the High Court2

submitting inter alia that the allotment was at a very low price. By an

interim order dated 22.05.2007 the High Court directed the State

Government to exercise its power of revision under Section 41(3) of the

U.P. Urban Planning and Development Act, 1973 read with Section 12 of

said Act and to take a re-look in regard to the allotments. The State

Government considered the matter and found the allotments to be irregular

and, therefore, directed NOIDA to cancel the same. The decision was

implemented by NOIDA by issuing cancellation orders dated 03.08.2007.

In view of the cancellation, the original writ petitions were allowed to be

withdrawn.

However, the allottees then preferred writ petitions challenging

cancellation of their allotments. These writ petitions were allowed by the

2 The High Court of Judicature at Allahabad

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

High Court by common order dated 13.05.2008 and the cancellation orders

dated 03.08.2007 were set aside on the ground that they were opposed to

principles of natural justice for want of opportunity of hearing. The High

Court, therefore, remanded the matter for taking a fresh decision.

The order of remand was, however, challenged by the allottees by

filing Special Leave Petitions in this Court. By way of an interim order,

this Court permitted the State Government to give hearing to the concerned

allottees and pass a reasoned order in accordance with law, uninfluenced

by any of the observations made by the High Court in its judgment and

order dated 13.05.2008. Accordingly, the matter was considered by the

State Government and by individual orders dated 08.09.2008 passed in the

case of each of the allottees, a decision was taken by the State Government

to cancel the allotments made by NOIDA.

Since these orders were passed during the pendency of the

challenge in this Court, the allottees were permitted to challenge the orders

of cancellation dated 08.09.2008 by filing additional grounds in pending

Special Leave Petitions.

5. After considering the rival submissions, by its judgment and order

dated 05.07.2011, this Court found that the allotment of commercial plots

to the allottees was valid and legal, but, since the commercial plots could

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

have fetched premium at a rate of Rs.70,000/- per square metre at the

relevant time, this Court made following observations:-

“110. In these cases the allotment of commercial plots

to appellants is valid and legal. The violation is in

making such allotment on fixed allotment rate which

is less than the rate the plots would have fetched by

calling for tenders or by holding auctions. Therefore

the equitable solution in these cases is to give an

opportunity to the lessees to pay the difference

thereby in consideration which arose on account of

wrong interpretation instead of cancelling the leases.

111. According to the State Government, the

commercial plots would have fetched a premium at

rate of Rs.70,000 per square metre at the relevant time

(October 2006 to January 2007) and NOIDA

Authority had been denied the benefit of that

allotment rate, by reason of allotment of the plots at

Rs.7400/- per square metre. Therefore if the

appellants are willing to pay the balance of premium

as claimed by respondents, the leases need not be

interfered.

112. In this case the violation of the policies of

NOIDA in making allotments has resulted in a lesser

premium being charged than what would have been

applied for commercial plots. According to

respondents the premium that would have been

charged was Rs.70,000/- per square metre as against

Rs.7,400 per square metre. Therefore, the violation of

the guidelines in regard to disposal of commercial

plots has resulted only in a loss of revenue by way of

premium and if this could be made up, there is no

reason why the leases should not be continued.

… … …

115. .. … …Therefore if the appellants (2006-2007

allottees) are to be extended the aforesaid benefits

offered to allottees under the 2008 Scheme, the rate of

Rs.70,000/- per square metre (the rate of 2008 scheme

was 10% more than Rs.70,000/- per square metre)

claimed by the respondents becomes logical and

reasonable. We therefore find no reason to reject the

claim of respondents that the allotment rate should be

Rs.70,000/- per square metre. We accordingly grant

the appellants an opportunity to save the leases by

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

paying the difference in premium at Rs.62600/- per

square metre to make it upto Rs.70,000/- per square

metre.

116. In view of the above we dispose of these

appeals as follows :

(i) The order of the High Court setting aside the

revisional order dated 1.8.2007 of the State

Government and the consequential orders of

cancellation of allotment of plots dated 3.8.2007 by

NOIDA Authority, is affirmed.

(ii) The revisional orders dated 8.9.2008 passed by the

State Government cancelling the allotments of plots to

appellants, are set aside.

(iii) The appellants are given the option to continue

their respective leases by paying the premium

(allotment rate) at Rs.70000/- per square metre (with

corresponding increase in yearly rent/one time lease

rent), without any location benefit charges. The

appellants shall exercise such option by 30.9.2011.

Such of those appellants exercising the option will be

entitled to the following benefits which has been

extended in regard to the allottees under 2008

allotment scheme of NOIDA Authority:

(a) 40% of FAR can be used by the allottee as

commercial space (as stipulated in the 2008

scheme).

(b) Permission to pay at its option, the

balance to make up 25% of the premium

(after adjusting all amounts paid at Rs.7400/-

per square metre plus location benefit

charges) on or before 30.9.2011 and the

balance 75% of premium in sixteen half

yearly instalments commencing from

1.1.2012 with interest at 11% per annum (as

offered to the applicants in 2008 scheme).

rights in accordance with the 2008 scheme.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

On exercise of such option, the lease shall continue

and the period between 1.8.2007 to 31.7.2011 shall be

excluded for calculating the lease period of 90 years.

Consequently the period of lease mentioned in the

lease deed shall stand extended by a corresponding

four years period, so that the lessee has the benefit of

the lease for 90 years. An amendment to the lease

deed shall be executed between NOIDA Authority and

the lessee incorporating the aforesaid changes.

(iv) If any appellant is unwilling to continue the lease

by paying the higher premium as aforesaid, or fails to

exercise the option as per para (iii) above by

30.9.2011, the allotment and consequential lease in its

favour shall stand cancelled. In that event, NOIDA

Authority shall return all amounts paid by such

appellant to NOIDA Authority towards the allotment

and the lease, and also reimburse the stamp duty and

registration charges incurred by it, with interest at

18% per annum from the date of payment/incurring of

such amounts to date of reimbursement by NOIDA

Authority. If NOIDA Authority returns the amount to

the appellant within 31.12.2011, the rate of interest

payable by NOIDA Authority shall be only 11% per

annum instead of 18% per annum.

(v) Parties to bear their respective costs.”

6. Thus, the allottees who were willing to pay the premium at

Rs.70,000/- per square metre, with corresponding increase in yearly

rent/one-time lease rent without any location benefit charges, could

exercise an option whereafter an amendment to the lease deed had to be

executed between NOIDA and the concerned allottee. But those allottees

who were unwilling to continue the lease by paying the higher premium,

were to be returned all amounts paid by them towards the allotment and

the lease and the amount of stamp duty and the registration charges

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

incurred by them with interest at 18% per annum from the date of

payment/incurring of such amounts to the date of reimbursement.

7. The Petitioners exercised their option to continue their respective

leases by paying the premium at Rs.70,000/- per square metre.

8. On 29.09.2011, 25% of the premium and lease rent was deposited

by the Petitioner and thereafter, on 03.04.2013 additional amount of Rs.5

crores was deposited. It is submitted that despite such deposits, no

supplementary lease deed was executed. According to the Petitioners,

after making over the additional amount, at the rate stated by this Court,

the supplementary lease deed had to be executed on the basis of which the

Petitioners could have raised finance and gone ahead with the project. On

the other hand, according to NOIDA, the lease rent and other dues had to

be cleared first, only whereafter the supplementary lease deed would be

executed.

It is in this background that the present Contempt Petitions have

been filed in this Court.

9. During the course of hearing of these Contempt Petitions, on

05.09.2019 two options were suggested to resolve the disputes between

the parties. Those options were:-

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

“All the contempt petitioners-allottees shall pay up all

the amounts that are due alongwith the accrued

interest on or before 31.12.2019, whereafter, NOIDA

shall execute a supplementary lease deed in favour of

the contempt petitioners-allottees.

The plots in question which were allotted to the

contempt petitioners-allottees be resumed by NOIDA

and put up for fresh auction, and from and out of the

proceeds the money deposited by each of the

contempt petitioners-allottees be returned by the

NOIDA along with interest @ 11% p.a.”

Both the sides sought accommodation to seek instructions in the

matter and they were directed to file affidavits. Accordingly, the affidavits

were filed on behalf of the Petitioners as well NOIDA.

10. All the Petitioners filed their affidavits willing to exercise the

Second Option. The affidavit filed on behalf of NOIDA on 13.09.2019

stated as under:-

“4. In reference to the order passed by this Hon’ble

Court, it is respectfully submitted that the NOIDA

would have not objection if this Hon’ble Court is

pleased to permit the petitioner – allottee-lessee to

pay up all the amounts that are due along with

accrued interest on or before 31.12.2019 where after

the NOIDA shall execute the Supplementary lease

deed in favour of the petitioner-allottee-lessee

company.

5. With reference to the second option set out in the

Hon’ble Court’s order dated 5.9.2019 and taking into

consideration contents of para 3 of the affidavit dated

11.9.2019 filed on behalf of the petitioner-allotteelessee company, the following five aspects may very

kindly be considered by this Hon’ble Court:

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

(i) that the petitioner-allottee lessee has

been enjoying possession of the leased plot

since the September 2009;

(ii) that under terms of the allotment, the

processing fees is non-refundable;

(iii) that the stamp duty is paid to the State

Government and not to NOIDA and as per

the directions issued by this Hon’ble Court

in its Judgment dated 5.7.2011, the stamp

duty was refundable only in the event the

allottee were to exercise the option of not

accepting the rate fixed by this Hon’ble

Court i.e. Rs.70,000/- per sq.mt. The

petitioner – allottee-lessee exercised the

option of continuing with the allotment @

Rs.70,000/- per sq.mt. Therefore, the

petitioner is not entitled to seek refund of

the stamp duty from NOIDA.

(iv) that while enjoying possession of the

leased plot, the petitioner has belatedly

approached this Hon’ble Court by alleging

that the Supplementary lease deed has not

been executed.

(v) the interest that was paid was only on

account of the delay on the part of the

petitioner – allottee-lessee in not paying

the amount on time for which the petitioner

-allottee-lessee itself is responsible,

therefore, whether such interest amount is

also liable to refunded and that too with

interest.

Therefore, this Hon’ble Court may like to consider

whether the petitioner-allottee-lessee is to be refunded

the amount with reference to all the 9 heads,

excluding the stamp duty and that too with 11%

interest so as to enable the NOIDA to take its final

decision with respect to the second option noted in the

Hon’ble Court’s order dated 5.9.2019.”

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

11. The matter came up on 17.09.2019. After quoting the relevant

portion from the Order dated 05.09.2019, the Order recited as under:-

“Thereafter, affidavits have been filed by the

concerned contempt petitioners in all the matters.

By way of example, we may quote the figures

available from the affidavit filed by the contempt

petitioner in Contempt Petition (Civil) No.413 of

2019, which are to the following effect:

Sr.

No.

Date Challan Particular Amount

1 11.11.2006 4704 Processing

Charges

5,00,000

2 11.11.2006 4704 Registration

Money

5,00,00,000

3 06.03.2007 6392 Instalment 14,53,60,000

4 06.03.2007 6392 Lease Rent 48,84,000

5 06.03.2007 6392 Interest 16,95,867

6 26.03.2007 5964/5969 Interest 3,53,640

7 11.05.2007 44314 One Time

Lease Rent

5,37,24,000

8 29.09.2011 5315 Balance

Premium

25% as per

order of

Hon’ble

Supreme

Court &

Advance

Lease Rent

17,01,68,000

9 03.04.2013 5611 Part

Payment of

Instalment

5,00,00,000

Total Amount Paid 47,66,85,507

12.03.2007 Stamp Duty

Payment

1,99,27,050

(Lease Deed Registered 28/03/2007)

Total Amount Paid 49,66,12,557”

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

The contempt petitioners thereafter submitted that they

would have no objection if NOIDA was to resume all

the plots in question subject to the aforesaid amounts

being refunded to the contempt petitioners.

In response, an affidavit has been filed by NOIDA in

which it is submitted that certain elements out of the

amounts mentioned hereinabove would be nonrefundable and, as such, those amounts ought not to be

taken into account while coming to the aggregate sum

that could be returned to the contempt petitioners. It

was also submitted that the interest @ 11% per annum

as suggested in the order passed by this Court would be

at a rate higher than the prevalent rate and, as such, it

needed to be scaled down.

We heard Mr. Mukul Rohatgi, learned Senior Advocate

and Mr. Ravindra Kumar, learned Advocate.

Mr. Mukul Rohatgi, learned Senior Advocate fairly

submitted that the amounts mentioned against Heads at

Sr. Nos.1, 5, 6 and Stamp Duty may not be refunded to

the contempt petitioners provided reasonable rate of

interest was awarded to them on the amounts deposited

by the contempt petitioners. In his submission, interest

@ 11% per annum would be reasonable considering the

fact that the huge amounts were deposited with the

authorities.

Mr. Ravindra Kumar, learned Advocate submitted that

the contempt petitioners had all the while enjoyed the

property and, as such, they were not entitled to any

interest on the amounts deposited by them. Said

submission was refuted by Mr. Rohatgi submitting that

the land has always been lying without being put to any

profitable use and, as such, the contempt petitioners

have not really enjoyed any benefit from the land.

Mr. Kumar then left the matter to the discretion of the

Court and suggested that the Court may consider

granting interest at such rate as it deems appropriate.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

Considering the entirety of the matter, in our view, the

appropriate interest rate could be @ 7% per annum.

In the circumstances, the options given in order dated

05.09.2019 could be availed, subject to the aforesaid

modification. The appropriate affidavits shall be filed

by the contempt petitioners as well as NOIDA within

three weeks from today. The affidavits shall indicate

in tabular form all the amounts as stated hereinabove

and then indicate separately those which would not be

refundable. If there be any other charges or dues, the

same be indicated with clarity in the affidavit of

NOIDA.”

12. A further affidavit was filed on behalf of NOIDA on 25.11.2019

submitting inter alia that in case the Petitioners express their intention not

to continue with the allotment and seek refund, the case would be required

to be considered as surrender in terms of Clause ‘N’ of the Brochure, in

which case the deposited sum or 30% of the premium, whichever is less,

would be required to be forfeited and the remaining amount would be

refunded without interest. It was stated in the affidavit as under:-

“3. It is submitted that pursuant to the allotment and

the execution of the Lease Dead in favour of the

Petitioner Company, possession of the allotted plot

was handed over to the Allottee – Lessee way back on

28.9.2007. Ever since then the Petitioner is in the

possession of the allotted plot. However, as submitted

in the Affidavit filed earlier the Petitioner Company,

except for making part payment of the first instalment

the petitioner company failed and neglected to pay all

the 16 instalments. As a result, it is in arrears of huge

dues payable to the NOIDA. It is submitted that

earlier, a Compliance Affidavit in reference to

Hon’ble Court’s Order dt. 5.9.2019 had been filed on

13.9.2019, the contents whereof are reiterated and the

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

same may be taken into consideration by this Hon’ble

Court.

4. It is further submitted that this Hon’ble Court,

vide Order dt. 17.09.2019, has been pleased to grant

opportunity to the respondent to submit an Affidavit

indicating in a tabular form the amounts that had been

deposited by the Petitioner. Liberty has also been

granted by the said order to indicate with clarity any

other charge or dues which is not refundable.”

13. In the aforesaid backdrop, we heard learned counsel led by Mr.

Mukul Rohatgi, Senior Advocate for the Petitioners on one hand and Mr.

Ravindra Kumar, learned Advocate for NOIDA.

14. Two options were suggested in the Order dated 05.09.2019.

Going by the affidavits filed by the Petitioners and the stand taken by the

learned counsel on their behalf, the Petitioners are not agreeable to the

First Option, though NOIDA is completely agreeable.

15. The Second Option as suggested in the Order dated 17.09.2019,

contemplated sale of the plots after resumption by NOIDA, and payment

to the Petitioners from and out of the sale proceeds. It was also made

clear that the interest of NOIDA could be secured by ensuring that in case

the price quoted in the fresh auction was lesser than what was assured

under the current arrangement with the Petitioners, the shortfall could be

directed to be made good by the Petitioners. But the affidavit filed by

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

NOIDA has not dealt with this aspect and has suggested deduction of 30%

of the premium as stated above.

16. During the course of discussion, the learned counsel for the

Petitioners invited our attention to communication dated 21.10.2019

addressed by Commercial Department of NOIDA to M/S INGKA Centres

India Pvt. Ltd. accepting E-bid for allotment of a Commercial Property

admeasuring 47833 square meters, which is comparable with the size of

the plots in the instant case. The communication shows that the bid at the

rate of Rs.1,59,010.4528 per sq. metres was accepted, as against the price

of Rs.70,000/- per sq. metres in the instant case.

17. The facts set out in afore-quoted paragraphs of the Judgment dated

05.07.2011 indicate that the plots in the instant case were meant for fivestar and three-star hotels which were to come up well-in-time to cater to

the demand for hotels around Commonwealth Games, 2010. It has been

more than 10 years since the Games got over but no development on these

plots has occurred. The tussle is going on between the Petitioners on one

side who submit that because of indifferent and recalcitrant attitude on

part of the authorities, they could not enter into any arrangement for

financial accommodation, and as such, no development could be

undertaken; while on the other hand, the submission on part of NOIDA is

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

that unless the payment of premium in entirety was made, no lease could

be executed. Each side is blaming the other and the resultant effect is that

the properties are lying undeveloped, no payment of premium is

forthcoming and the public interest is not getting subserved. It was in this

background that the Second Option was suggested so that the Petitioners

are allowed to withdraw themselves from the arrangement and, at the

same time, the interest of NOIDA is also well secured. Submissions were

advanced on the basis of what weighed with this Court when the

Judgment dated 05.07.2011 was passed, where this Court had given the

facility of withdrawal from the arrangement to such of the allottees who

were unwilling to continue. In that case, the concerned allottees were

allowed to withdraw all the amounts including the stamp duty and

registration charges along with interest @ 18% per annum. This aspect of

the matter has been pressed into service on behalf of the Petitioners to

submit that they were willing to forego the amounts indicated at Sl. Nos.

1, 5 and 6 of the illustrative chart quoted in the Order dated 17.09.2019

and as such the offer on part of NOIDA to refund the deposited amounts,

after deducting 30% of the premium amount without payment of any

interest, would not be fair, if the current prices of the lands in the area

were to be taken into account. It was also submitted that the fault actually

lies with NOIDA in not permitting the Petitioners to enter into financial

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

accommodation, and thus no development could take place. These

submissions are undoubtedly refuted by the learned counsel for NOIDA.

18. The present status is nothing but a stalemate in which valuable

assets of a public authority are locked completely. The public interest is

neither getting subserved, nor is NOIDA getting instalments towards

premium on time. We asked the learned counsel for NOIDA if any

proceedings for resumption of land were undertaken, to which the

response was in the negative. In this situation, the modalities suggested by

the Second Option, in our considered view, could yield results which

would be favourable to both sides, and at the same time would take care

of public interest as well. However, considering the price index which is

available through the bid as described in the communication dated

21.10.2019, and keeping the interest of NOIDA in forefront, in our view,

the modalities stated hereafter, will take care of public interest and

competing claims of both sides.

19. Before we come to the modalities, certain aspects need to be

clarified including what amounts the Petitioners would be entitled to:-

A] From the illustrative chart, which was quoted in the Order dated

17.09.2019, the claims with regard to amounts mentioned against Sl.

Nos.1, 5 and 6 were given up by the Petitioners.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

B] As regards stamp duty, the stand of NOIDA is that the money was

not paid to NOIDA but was paid to the State Government, and, therefore,

NOIDA cannot be made to refund the amount towards stamp duty. Since

the State Government is not party to the present matter, no direction in

that behalf can be issued, and the matter shall have to be left to the State

Government to consider whether there could be refund of stamp duty

either in full, or in part.

C] Rest of the amounts comprise of two types of payments: a)

towards instalments of premium; and b) towards payment of lease rent.

20. As regards lease rent, it is evident from the chart in the Order

dated 17.09.2019 that an amount of Rs.44,84,000/- was paid by the

Petitioner by way of lease rent on 06.03.2007 and one-time lease rent

amounting to Rs.5,37,24,000/- was paid on 11.05.2007. One-time lease

rent constitutes payment for the entirety of the period of lease covered by

the document. Therefore, that component of the amount which represents

the remainder period after the plot is sold in terms of this Order, ought not

to be charged by NOIDA from the Petitioners. If the plot is re-sold, the

new allottee, in any case, will be paying in respect of such remainder

period under a fresh lease executed in his favour. The Petitioners shall,

therefore, be entitled to refund of that component of amount of one-time

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

lease rent which proportionately represents the remainder period after the

plots in question are sold in terms of this Order. They shall not, however,

be entitled to any interest on such component.

21. The amount of interest on refund of the amounts paid towards

premium that the Petitioners would be entitled to was subject matter of

discussion on the earlier occasion. By order dated 17.09.2019 it was

found that the appropriate rate of interest could be 7% per annum. The

Petitioners would, therefore, be entitled to 7% annual interest on the

amounts deposited by them towards premium from time to time. These

amounts payable towards interest shall be calculated upto 30.04.2021 and

shall stand frozen as on that date.

22. In the light of the aforesaid discussion, the revised Second Option

shall be as under:-

A) The concerned plots allotted to the Petitioners be sold by

NOIDA by inviting E-bids or by auction after advertising the same as

was done in the Scheme No.2019-20 (Commercial Builder Plot-I)

B) If the price quoted in such E-bid for each of the concerned

plots is more than one and a half times of the price at which the

arrangement with the Petitioners was arrived at; that is to say, more than

Rs.1,05,000 per sq. metre, the Petitioners be returned the amounts

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

deposited towards premium in each case. However, in case there is

shortfall as against the rate of Rs.1,05,000/- per sq. metre, the shortfall

shall be made good by the Petitioners and to that extent the amount

payable to the Petitioners towards refund of amount paid towards

premium shall stand reduced.

C) Insofar as refund of amounts towards remainder part of the

lease rent and the component of interest payable to each of the Petitioners

are concerned, said amounts shall be made over only if the price received

by NOIDA in fresh sale of said plots in terms of this Order is in excess of

Rs.1,05,000/- per sq. metre and only to the extent of excess beyond

Rs.1,05,000/- per sq. metre.

D) The Petitioners shall, thus, first be made over the

component representing the amount paid by them towards premium in the

manner as stated above. It is only if the rate fetched in such re-sale is

greater than Rs.1,05,000/- per sq. metre that the Petitioners shall be paid

amounts towards the remainder part of the lease rent and component of

interest payable, as stated hereinabove; subject always to the requirement

that these amounts are paid from the amounts representing the excess

above the base price of Rs.1,05,000/- per sq. metre; which will ensure that

NOIDA will always get a base rate of Rs.1,05,000/- per sq. metre for the

concerned plot in such re-sale. If the excess amount beyond Rs.1,05,000/-

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

per sq. metre is not sufficient to absorb the amounts payable to the

Petitioners towards component of lease rent and the interest; their

entitlement shall stand reduced to that extent. It is also made clear that if

the difference between the base price of Rs.1,05,000/- per sq. metre and

the price fetched in the re-sale is greater than what would be payable

towards component of lease rent and interest, NOIDA alone shall be

entitled to such excess amount.

E] By way of illustration:-

(a) If the price quoted in E-bid or auction for a plot of 20,000

sq. metre is at the rate of Rs.1,00,000/- per sq. metre, the shortfall will be

Rs.5,000/- x 20,000/- (extent of plot) = Rs.10 Crores. Thus, Rs.10 Crores

shall be deducted from the deposited amount towards premium and the

balance shall be refunded. Since the price quoted in E – bid or auction is

less than Rs.1,05,000/- per sq. metre, nothing shall be payable towards

remainder part of the lease rent and the component of interest.

(b) If the price quoted in E – bid or auction is at the rate of

Rs.1,20,000/- per sq. metre, the amount to be received by NOIDA beyond

the level of Rs.1,05,000/- per sq. metre for the same plot shall be

Rs.15,000/- x 20,000/- (extent of plot) = Rs.30 Crores. As the price

quoted is more than Rs.1,05,000/- per sq. metre:-

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

(i) The entire amount deposited towards premium shall be

refunded by NOIDA; and

(ii) So much of the amount representing remainder part of the

lease rent and component of interest which can be assorbed from

and out of Rs.30 Crores shall be refunded but not beyond Rs.30

Crores.

(iii) Thus, if the amount representing remainder part of the lease

rent and the component of interest is greater than Rs.30 Crores,

the entitlement shall be only upto Rs.30 Crores and not in excess

thereof. However, if such amount payable towards these two

heads is less than Rs.30 Crores, the amount shall be paid in full

and the balance shall be retained by NOIDA.

(F) In the process, NOIDA will always get minimum of

Rs.1,05,000/- per sq. metre in such re-sale.

G] After the concerned plots are sold in auction and

appropriate documents are executed in favour of the new allottees, the

concerned Petitioners shall be entitled to apply to the State Government

for refund of amounts paid by them towards Stamp Duty. Such

applications shall be considered by the State Government in accordance

with the extant policy and in accordance with law.

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

23. The modality devised above will ensure that as against the

promised rate of Rs.70,000 per sq. metre, which premium is also in

arrears in the present cases, NOIDA shall get much more than that

towards price of land and will also stand to gain considerably.

Accordingly, in the process, not only will the public interest stand

subserved, but the projects which have run into stalemate, will also come

out of difficulties.

24. The Second Option given in the Order dated 05.09.2019 shall

stand modified to the aforesaid extent.

25. In case the Petitioners are agreeable to these conditions, the

Petitioners may exercise such option by filing appropriate affidavits with

NOIDA along with an appropriate Resolution of the Board of the

concerned Company. Upon such affidavit being filed within two weeks

from the date of this Order, NOIDA shall calculate the amounts deposited

by each of the Petitioners towards premium and so also the amounts

payable to each of the Petitioners towards component of lease rent and

interest from the date of each of those deposits @ 7% per annum upto

30.04.2021. A communication giving all the details, including the

proposed user as well as the minimum price at which the plots would be

put up for sale, shall be addressed to each of the Petitioners exercising

such option on or before 17.05.2021. The possession shall then be

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

delivered by each of the Petitioners of the concerned plots back to NOIDA

by 31.05.2021. Upon such handing over of the possession, the title of the

Petitioners in respect of the concerned plots shall stand extinguished. The

Lease Deeds in their favour, shall be delivered up by each of the

Petitioners, which shall also stand cancelled.

26. NOIDA shall, thereafter, put up the plots in question for auction or

invite E-bids within three months, in the same fashion as was done in

connection with the property referred to in the communication dated

21.10.2019. It will be entirely up to NOIDA to put up the plots for sale

collectively or individually or to sell them for any purpose which in the

opinion of NOIDA would subserve public interest and devise the

modalities for sale. From and out of the sale proceeds received in such

sale, the amounts indicated above shall be paid to each of the Petitioners

exercising such Second Option in accordance with the principles as stated

above, within three months of the sale.

27. In case no option is exercised by any of the Petitioners in the

manner indicated hereinabove, or in case no possession is handed over

within the time stipulated even after exercising such option, it shall be

deemed that each of such Petitioners is not desirous of exercising the

Second Option and said Petitioners shall be treated to have opted for the

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

First Option as indicated in the Order dated 05.09.2019. In such cases,

NOIDA shall issue appropriate communication calling upon them to pay

up all the dues in terms of the First Option within reasonable time. The

supplementary Lease Deed shall be executed only after all the dues as

indicated in the First Option are cleared. If the amounts are not cleared

within the time stipulated, the concerned plots shall stand resumed in

favour of NOIDA and those Petitioners shall be dispossessed of the plots

in their occupation in a manner known to law.

28. It is made clear that the handing over of possession in exercise of

the revised Second Option, as granted earlier or taking over of possession

in terms of the preceding paragraph, shall be on “as is where is” basis.

The concerned Petitioners shall not be entitled to any value addition, be it

in the form of construction of any structures or erection of any compound

wall. The possession shall be handed over and/or received along with

such value additions, which shall vest in NOIDA. Similarly, every

individual on the plot in question must be made to vacate and the handing

over or receiving of possession must be clear and peaceful.

29. Though the scope of the Contempt Petitions was restricted to see

whether functionaries of NOIDA were guilty of disobedience of the

directions issued by this Court, the matter was considered from the

CONTEMTP PETITION (C) NO.413 OF 2019 IN Civil Appeal No.4564 of 2008

Hampshire Hotels and Resorts (Noida) Pvt. Ltd.. Vs.Ritu Maheshwari, CEO

standpoint of enabling both sides to settle their disputes and get over the

stalemate which has been obtaining for the last 10 years. The endeavour

was to see that the interest of both sides is sufficiently taken care of and

more than anything else, the public interest must stand subserved. It is

with this solution in mind, that the directions as stated above have been

issued by this Court.

30. Subject to what is stated hereinabove, all the contentions raised in

these Contempt Petitions are rejected and Contempt Petitions are closed.

31. Ordered accordingly.

……………………………J.

[Uday Umesh Lalit]

……………………………J.

[Indu Malhotra]

……………………………J.

[Krishna Murari]

New Delhi;

March 09, 2021.

whether after clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012, the proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section 28(4) of the Customs Act, 1962 are valid in law

whether after clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012, the proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section 28(4) of the Customs Act, 1962 are valid in law.

In this view of the matter, we consider it unnecessary to answer the issue whether the cameras that were cleared on the basis that they were exempted from customs duty under Exemption Notification No.15/2012 were in fact eligible for the exemption or not. The goods must be taken to have been validly cleared by the Customs officer. We might note that cameras with similar specifications have been treated as exempted under the Explanatory Note to the Combined Nomenclature of the European communities. It is important to add that the same cameras have been considered to be eligible for exemption before 17.03.2012 and after 30.04.2015 under the exemption Notifications issued under the Customs Act read with Chapter 84 & 85 (First Schedule) of Customs Tariff Act, 1975. In the result, these appeals are allowed.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1827 OF 2018

M/S CANON INDIA PRIVATE LIMITED …. APPELLANT(S)

VERSUS

COMMISSIONER OF CUSTOMS …. RESPONDENT(S)

WITH

CIVIL APPEAL NO. 1875 OF 2018

WITH

CIVIL APPEAL NO.1832 OF 2018

WITH

CIVIL APPEAL NO.3213 OF 2018

J U D G M E N T

S.A. BOBDE, CJI.

1. This batch of statutory appeals (being Civil Appeal

Nos. 1827/2018, 1875/2018, 1832/2018 and 3213/2018)

under Section 130E of the Customs Act, 1962 arises from a

common final order of the Central Excise and Service Tax

Appellate Tribunal (‘CESTAT’) dated 19th December 2017

(‘impugned order’).

2. Vide the impugned order an exemption of basic

customs duty accorded to the Digital Still Image Video

Cameras (‘DSIC’) imported by the Nikon India Pvt. Ltd,

Canon India Pvt. Ltd., Sony India Pvt. Ltd. and Samsung

India Electronics Pvt. Ltd (hereinafter referred to as

‘appellants’ or ‘importers’), in terms of exemption

Notification No. 20/2005 dated 01.03.2005 (as amended by

Notification No. 15/2012 dated 17.03.2012) came to be

denied and the consequential confiscation of goods,

demand of interest and imposition of penalty as provided

for under various sections of the Customs Act, 1962, was

upheld by the CESTAT.

3. Since the appeals involve common questions, these

are being decided together and for sake of convenience we

shall be referring to the events which took place in the case

of Nikon.

4. The main issue is whether after clearance of the

cameras on the basis that they were exempted from levy of

basic Customs duty under Notification No.15/2012, the

proceedings initiated by the Directorate of Revenue

Intelligence for recovery of duty not paid under Section

28(4) of the Customs Act, 1962 are valid in law.

Exemption Notification

5. Exemption to Digital Still Image Video Cameras was

issued on 1.3.2005 vide Notification No.25/2005 (and

amended vide Notification No.15/2012 on 17.3.2012).

Arrival and decision to clear the goods on payment

of nil duty

6. The consignment of cameras arrived at Delhi on

15.3.2012. The importer submitted a Bill of Entry to the

Customs Authorities on 20.3.2012. Along with the Bill of

Entry, the importer submitted a covering letter and

literature containing specifications of the cameras. After

verification of the Bill of Entry by the Inspector and the

Superintendent, the importer requested the Deputy

Commissioner of Customs for a first check on 21.3.2012.

The Customs Authorities checked the goods on 24.3.2012.

They compared the goods with the description given in the

literature and took a decision to clear the goods on

24.3.2012, as being exempt from duty in terms of the

Notification No.15/2012 which was issued on 17.3.2012.

Recovery of Duties

7. On 19.8.2014, a show cause notice was

issued under Section 28 (4) of the Customs Act, 19621

alleging that the Customs Authorities had been induced to

clear the cameras by wilful mis-statement and suppression

of facts about the cameras. In particular; that the cameras

were capable of recording more than a single video

sequence of less than 30 minutes. In other words, after

one sequence of less than 30 minutes was recorded, the

camera had sufficient memory (extendable) to record more

such sequences.

8. It is significant to note that while the decision to clear

the goods for import because they were exempted from

customs duties under Notification No.15/2012, was taken

by Deputy Commissioner, Appraisal Group, Delhi Air Cargo,

1 Section 28 (4) Where any duty has not been [levied or not paid or has been shortlevied or short-paid] or erroneously refunded, or interest payable has not been paid, partpaid or erroneously refunded, by reason of, -

(a) collusion; or

(b) any wilful mis-statement; or

by the importer or the exporter or the agent or employee of the importer or

exporter, the proper officer shall, within five years from the relevant date, serve notice on

the person chargeable with duty or interest which has not been [so levied or not paid] or

which has been so short-levied or short-paid or to whom the refund has erroneously been

made, requiring him to show cause why he should not pay the amount specified in the

notice.

the show cause notice was issued by the Additional Director

General, Directorate of Revenue Intelligence.

9. The question that arises is whether the Directorate of

Revenue Intelligence had authority in law to issue a show

cause notice under Section 28(4) of the Act for recovery of

duties allegedly not levied or paid when the goods have

been cleared for import by a Deputy Commissioner of

Customs who decided that the goods are exempted. It is

necessary that the answer must flow from the power

conferred by the statute i.e. under Section 28(4) of the Act.

This Section empowers the recovery of duty not paid, part

paid or erroneously refunded by reason of collusion or any

wilful mis-statement or suppression of facts and confers the

power of recovery on “the proper officer”. The obvious

intention is to confer the power to recover such duties not

on any proper officer but only on “the proper officer”. This

Court in Consolidated Coffee Ltd. and Another vs.

Coffee Board, Bangalore2

has held:-

“14. ...Secondly, and more importantly, the user

of the definite article ‘the’ before the word

‘agreement’ is, in our view, very significant.

Parliament has not said ‘an agreement’ or ‘any

2 (1980) 3 SCC 358

agreement’ for or in relation to such export and

in the context the expression ‘the agreement’

would refer to that agreement which is implicit

in the sale occasioning the export.”

In Shri Ishar Alloy Steels Ltd. vs. Jayaswals

Neco Ltd.3

has held:-

“9. ...’The’ is the word used before nouns,

with a specifying or particularising effect as

opposed to the indefinite or generalizing force of

‘a’ or ‘an’. It determines what particular thing is

meant; that is, what particular thing we are to

assume to be meant. ‘The’ is always mentioned

to denote a particular thing or a person.”

10. There are only two articles ‘a (or an)’ and ‘the’. `A

(or an)’ is known as the Indefinite Article because it does

not specifically refer to a particular person or thing. On the

other hand, ‘the’ is called the Definite Article because it

points out and refers to a particular person or thing. There

is no doubt that, if Parliament intended that any proper

officer could have exercised power under Section 28 (4), it

could have used the word ‘any’.

11. Parliament has employed the article “the” not

accidently but with the intention to designate the proper

officer who had assessed the goods at the time of

3 (2001) 3 SCC 609

clearance. It must be clarified that the proper officer need

not be the very officer who cleared the goods but may be

his successor in office or any other officer authorised to

exercise the powers within the same office. In this case,

anyone authorised from the Appraisal Group. Assessment

is a term which includes determination of the dutiability of

any goods and the amount of duty payable with reference

to, inter alia, exemption or concession of customs duty vide

Section 2 (2) (c) of the Customs Act, 19624

12. The nature of the power to recover the duty, not paid

or short paid after the goods have been assessed and

cleared for import, is broadly a power to review the earlier

decision of assessment. Such a power is not inherent in

any authority. Indeed, it has been conferred by Section 28

and other related provisions. The power has been so

conferred specifically on “the proper officer” which must

necessarily mean the proper officer who, in the first

4 Section 2. Definitions – In this Act, unless the context otherwise requires, -

…

(2) “assessment” means determination of the dutiability of any goods and the

amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the

Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act) or

under any other law for the time being in force, with reference to –

(a) …

(b) …

upon any notification issued therefor under this Act or under the Customs Tariff Act or

under any other law for the time being in force;

instance, assessed and cleared the goods i.e. the Deputy

Commissioner Appraisal Group. Indeed, this must be so

because no fiscal statute has been shown to us where the

power to re-open assessment or recover duties which have

escaped assessment has been conferred on an officer other

than the officer of the rank of the officer who initially took

the decision to assess the goods.

13. Where the statute confers the same power to

perform an act on different officers, as in this case, the two

officers, especially when they belong to different

departments, cannot exercise their powers in the same

case. Where one officer has exercised his powers of

assessment, the power to order re-assessment must also

be exercised by the same officer or his successor and not

by another officer of another department though he is

designated to be an officer of the same rank. In our view,

this would result into an anarchical and unruly operation of

a statute which is not contemplated by any canon of

construction of statute.

14. It is well known that when a statute directs that the

things be done in a certain way, it must be done in that

way alone. As in this case, when the statute directs that

“the proper officer” can determine duty not levied/not paid,

it does not mean any proper officer but that proper officer

alone. We find it completely impermissible to allow an

officer, who has not passed the original order of

assessment, to re-open the assessment on the grounds

that the duty was not paid/not levied, by the original officer

who had decided to clear the goods and who was

competent and authorised to make the assessment. The

nature of the power conferred by Section 28 (4) to recover

duties which have escaped assessment is in the nature of

an administrative review of an act. The section must

therefore be construed as conferring the power of such

review on the same officer or his successor or any other

officer who has been assigned the function of assessment.

In other words, an officer who did the assessment, could

only undertake re-assessment [which is involved in Section

28 (4)].

15. It is obvious that the re-assessment and recovery of

duties i.e. contemplated by Section 28(4) is by the same

authority and not by any superior authority such as

Appellate or Revisional Authority. It is, therefore, clear to us

that the Additional Director General of DRI was not “the”

proper officer to exercise the power under Section 28(4)

and the initiation of the recovery proceedings in the

present case is without any jurisdiction and liable to be

set aside.

16. At this stage, we must also examine whether the

Additional Director General of the DRI who issued the

recovery notice under Section 28(4) was even a proper

officer. The Additional Director General can be considered

to be a proper officer only if it is shown that he was a

Customs officer under the Customs Act. In addition, that he

was entrusted with the functions of the proper officer under

Section 6 of the Customs Act. The Additional Director

General of the DRI can be considered to be a Customs

officer only if he is shown to have been appointed as

Customs officer under the Customs Act.

17. Shri Sanjay Jain, learned Additional Solicitor General,

relied on a Notification No.17/2002 - Customs (NT) dated

7.3.2002 to show all Additional Directors General of the DRI

have been appointed as Commissioners of Customs. At the

relevant time, the Central Government was the appropriate

authority to issue such a notification. This notification

shows that all Additional Directors General, mentioned in

Column (2), are appointed as Commissioners of Customs.

18. The next step is to see whether an Additional Director

General of the DRI who has been appointed as an officer of

Customs, under the notification dated 7.3.2002, has been

entrusted with the functions under Section 28 as a proper

officer under the Customs Act. In support of the contention

that he has been so entrusted with the functions of a

proper officer under Section 28 of the Customs Act, Shri

Sanjay Jain, learned Additional Solicitor General relied on a

Notification No.40/2012 dated 2.5.2012 issued by the

Central Board of Excise and Customs. The notification

confers various functions referred to in Column (3) of the

notification under the Customs Act on officers referred to in

Column (2). The relevant part of the notification reads as

follows:-

“[To be published in the Gazette of India,

Extraordinary, Part II, Section 3, Sub-section (ii)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification No.40/2012-Customs (N.T.)

New Delhi, dated the 2

May, 2012

S.O. (E). – In exercise of the powers conferred by

sub-section (34) of section 2 of the Customs Act,

1962 (52 of 1962), the Central Board of Excise and

Customs, hereby assigns the officers and above

the rank of officers mentioned in Column (2) of the

Table below, the functions as the proper officers in

relation to the various sections of the Customs Act,

1962, given in the corresponding entry in Column

(3) of the said Table: -

Sl.

No.

Designation of

the officers

Functions

under Section

of the Customs

Act, 1962

(1) (2) (3)

1. Commissioner of

Customs

(i) Section 33

2. Additional

Commissioner or

Joint Commissioner

of Customs

(i) Sub-section (5)

of section 46;

and

(ii) Section 149

3. Deputy

Commissioner or

Assistant

Commissioner of

Customs and

Central Excise

(i) …..

(ii) …..

(iii) …..

(iv) …..

(v) …..

(vi) Section 28;

………

19. It appears that a Deputy Commissioner or Assistant

Commissioner of Customs has been entrusted with the

functions under Section 28, vide Sl. No.3 above. By reason

of the fact that the functions are assigned to officers

referred to in Column (3) and those officers above the rank

of officers mentioned in Column (2), the Commissioner of

Customs would be included as an officer entitled to perform

the function under Section 28 of the Act conferred on a

Deputy Commissioner or Assistant Commissioner but the

notification appears to be ill-founded. The notification is

purported to have been issued in exercise of powers under

sub-Section (34) of Section 2 of the Customs Act. This

section does not confer any powers on any authority to

entrust any functions to officers. The sub-Section is part of

the definitions clause of the Act, it merely defines a proper

officer, it reads as follows:-

“2. Definitions – In this Act, unless the context

otherwise requires, -

…

(34) ‘proper officer’, in relation to any functions

to be performed under this Act, means the

officer of customs who is assigned those

functions by the Board or the [Principal

Commissioner of Customs or Commissioner of

Customs]. “

20. Section 6 is the only Section which provides for

entrustment of functions of Customs officer on other

officers of the Central or the State Government or local

authority, it reads as follows:-

“6. Entrustment of functions of Board and

customs officers on certain other officers –

The Central Government may, by notification in

the Official Gazette, entrust either conditionally

or unconditionally to any officer of the Central or

the State Government or a local authority any

functions of the Board or any officer of customs

under this Act.”

21. If it was intended that officers of the Directorate of

Revenue Intelligence who are officers of Central

Government should be entrusted with functions of the

Customs officers, it was imperative that the Central

Government should have done so in exercise of its power

under Section 6 of the Act. The reason why such a power is

conferred on the Central Government is obvious and that is

because the Central Government is the authority which

appoints both the officers of the Directorate of Revenue

Intelligence which is set up under the Notification dated

04.12.1957 issued by the Ministry of Finance and Customs

officers who, till 11.5.2002, were appointed by the Central

Government. The notification which purports to entrust

functions as proper officer under the Customs Act has been

issued by the Central Board of Excise and Customs in

exercise of non-existing power under Section 2 (34) of the

Customs Act. The notification is obviously invalid having

been issued by an authority which had no power to do so in

purported exercise of powers under a section which does

not confer any such power.

22. In the above context, it would be useful to refer to

the decision of this Court in the case of Commissioner of

Customs vs. Sayed Ali and Another5

wherein the proper

officer in respect of the jurisdictional area was considered.

The consideration made is as hereunder:-

“16. It was submitted that in the instant case,

the import manifest and the bill of entry were

filed before the Additional Collector of Customs

(Imports), Mumbai; the bill of entry was duly

assessed, and the benefit of the exemption was

extended, subject to execution of a bond by the

importer which was duly executed undertaking

the obligation of export. The learned counsel

argued that the function of the preventive staff

is confined to goods which are not manifested as

in respect of manifested goods, where the bills

of entry are to be filed, the entire function of

assessment, clearance, etc. is carried out by the

appraising officers functioning under the

Commissioner of Customs (Imports).

17. Before adverting to the rival submissions, it

would be expedient to survey the relevant

provisions of the Act. Section 28 of the Act,

which is relevant for our purpose, provides for

issue of notice for payment of duty that has not

been paid, or has been short-levied or

erroneously refunded, and provides that:

“28. Notice for payment of duties,

interest, etc. – (1) When any duty has

not been levied or has been short-levied

or erroneously refunded, or when any

interest payable has not been paid, part

paid or erroneously refunded, the proper

officer may,-

(a) in the case of any import

made by any individual for his

personal use or by Government

or by any educational, research

5 (2011) 3 SCC 537

or charitable institution or

hospital, within one year;

(b) in any other case, within six

months,

from the relevant date, serve notice on

the person chargeable with the duty or

interest which has not been levied or

charged or which has been so shortlevied or part paid or to whom the refund

has erroneously been made, requiring

him to show cause why he should not pay

the amount specified in the notice:

Provided that where any duty has not

been levied or has been short-levied or

the interest has not been charged or has

been part paid or the duty or interest has

been erroneously refunded by reason of

collusion or any wilful mis-statement or

suppression of facts by the importer or

the exporter or the agent or employee of

the importer or exporter, the provisions

of this sub-section shall have effect as if

for the words ‘one year’ and ‘six months’,

the words ‘five years’ were substituted.”

18. It is plain from the provision that the ‘proper

officer’ being subjectively satisfied on the basis

of the material that may be with him that

customs duty has not been levied or short levied

or erroneously refunded on an import made by

any individual for his personal use or by the

Government or by any educational, research or

charitable institution or hospital, within one year

and in all other cases within six months from the

relevant date, may cause service of notice on

the person chargeable, requiring him to show

cause why he should not pay the amount

specified in the notice. It is evident that the

notice under the said provision has to be issued

by the ‘proper officer’.

19. Section 2(34) of the Act defines a ‘proper

officer’, thus:

‘2. Definitions.-

(34) ‘proper officer’, in relation to any

functions to be performed under this Act,

means the officer of customs who is

assigned those functions by the Board or

the Commissioner of Customs;’

It is clear from a mere look at the provision that

only such officers of customs who have been

assigned specific functions would be ‘proper

officers’ in terms of Section 2(34) the Act.

Specific entrustment of function by either the

Board or the Commissioner of Customs is

therefore, the governing test to determine

whether an ‘officer of customs’ is the ‘proper

officer’.

20. From a conjoint reading of Sections 2(34)

and 28 of the Act, it is manifest that only such a

Customs Officer who has been assigned the

specific functions of assessment and reassessment of duty in the jurisdictional area

where the import concerned has been affected,

by either the Board or the Commissioner of

Customs, in terms of Section 2(34) of the Act is

competent to issue notice undersection 28 of

the Act. Any other reading of Section 28 would

render the provisions of Section 2(34) of the Act

otiose inasmuch as the test contemplated under

Section 2(34) of the Act is that of specific

conferment of such functions.”

23. We, therefore, hold that the entire proceeding in the

present case initiated by the Additional Director General of

the DRI by issuing show cause notices in all the matters

before us are invalid without any authority of law and liable

to be set-aside and the ensuing demands are also setaside.

Limitation

24. It is strictly not necessary to decide the question on

limitation but we intend to do so since parties have

elaborately relied on disclosures made before the Customs

officer on that issue. The show cause notice was issued on

19.8.2014. Under Section 28(4), such a show cause notice

must be issued within five years from the relevant date

which means the date on which the goods were assessed

and cleared, in case the duty was not paid or short paid or

erroneously refunded by reason of collusion or any wilful

mis-statement or suppression of facts. It is, therefore,

necessary for us to examine whether there is suppression

of facts.

25. The case was presented for scrutiny of the Customs

officers on 20.3.2012 along with the Bill of Entry and

literature consisting of specifications of the cameras.

26. The Bill of Entry made a statement that these are

Digital Still Image Video Camera packed for retail sale

(COOLPIX S4300, S2600 etc.). This was supported by

literature which clearly stated that “… the single maximum

recording time for a single movie is 29 minutes, even when

there is sufficient free space on the memory card for longer

recording”. This meant that even if the camera could

record more than 29 minutes when it had sufficient free

space (which depends on the capacity of the card providing

extended memory) the maximum time for which it could

record a single sequence was 29 minutes.

27. In other words, the camera could record more than

one single sequence but not 30 minutes and more in a

single sequence. It is obvious that the Deputy

Commissioner took the view that the camera complied with

the requirement of exemption i.e. it could only record up to

less than 30 minutes in a single sequence. At this juncture,

it is not relevant to see whether the Deputy Commissioner

was right or not in taking this decision to clear the goods as

exempted goods. What is important is to see whether the

importers made any wilful mis-statement or suppression of

facts and induced the delivery of goods.

28. It is pertinent to note that the importer had asked for

a first check and had shown the cameras and the cameras

were offered on 20.3.2012 along with Bill of Entry and

literature detailing specifications of models. The camera

could have been operated to see the length of time of the

single sequence and whether recording of the single

sequence exhausts the total memory of the camera

(including extended memory) and whether the cameras

were eligible for exemption. It is difficult in such

circumstances to infer that there was any wilful misstatement of facts. In these circumstances, it must,

therefore, follow that the extended period of limitation of

five years was not available to any authority to re-open

under Section 28(4).

29. In this view of the matter, we consider it unnecessary

to answer the issue whether the cameras that were cleared

on the basis that they were exempted from customs duty

under Exemption Notification No.15/2012 were in fact

eligible for the exemption or not. The goods must be taken

to have been validly cleared by the Customs officer.

30. We might note that cameras with similar

specifications have been treated as exempted under the

Explanatory Note to the Combined Nomenclature of the

European communities. It is important to add that the

same cameras have been considered to be eligible for

exemption before 17.03.2012 and after 30.04.2015 under

the exemption Notifications issued under the Customs Act

read with Chapter 84 & 85 (First Schedule) of Customs Tariff

Act, 1975.

31. In the result, these appeals are allowed. The

common order dated 19.12.2017 passed by the CESTAT,

New Delhi in Customs Appeal Nos. 50098, 50099, 50100

and 50280/2017 is set aside. Consequently, the impugned

demand notices issued against all the three appellants

herein are also set aside.

32. Parties to bear their own costs.

..…………....................CJI.

[S. A. BOBDE]

…..…………....................J.

[A. S. BOPANNA]

..…..………......................J.

[V. RAMASUBRAMANIAN]

MARCH 9, 2021

NEW DELHI

Monday, March 8, 2021

VVIP = COVID - LIMITATION - ORDER Dt.15/03/2020 ENDS BY 14/03/2021 = We are of the opinion that the order dated 15.03.2020 has served its purpose and in view of the changing scenario relating to the pandemic, the extension of limitation should come to an end. We have considered the suggestions of the learned Attorney General for India regarding the future course of action. We deem it appropriate to issue the following directions: - 1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021. 2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. 3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

We are of the opinion that the order dated 15.03.2020 has served its purpose and in view of the changing scenario relating to the pandemic, the extension of limitation should come to an end.

We have considered the suggestions of the learned Attorney General for India regarding the future course of action. We deem it appropriate to issue the following directions: -

2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

Suo Motu Writ Petition (Civil) No.3 of 2020

IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION.

……. Petitioner (s)

Versus

……Respondent (s)

O R D E R

1. Due to the onset of COVID-19 pandemic, this Court took

suo motu cognizance of the situation arising from difficulties

that might be faced by the litigants across the country in

filing petitions/applications/suits/appeals/all other

proceedings within the period of limitation prescribed under

the general law of limitation or under any special laws (both

Central or State). By an order dated 27.03.2020 this Court

extended the period of limitation prescribed under the

general law or special laws whether compoundable or not

with effect from 15.03.2020 till further orders. The order

dated 15.03.2020 was extended from time to time. Though,

we have not seen the end of the pandemic, there is

considerable improvement. The lockdown has been lifted

and the country is returning to normalcy. Almost all the

Courts and Tribunals are functioning either physically or by

1 | P a g e

virtual mode. We are of the opinion that the order dated

15.03.2020 has served its purpose and in view of the

changing scenario relating to the pandemic, the extension of

limitation should come to an end.

2. We have considered the suggestions of the learned

Attorney General for India regarding the future course of

action. We deem it appropriate to issue the following

directions: -

1. In computing the period of limitation for any suit,

appeal, application or proceeding, the period from

15.03.2020 till 14.03.2021 shall stand excluded.

Consequently, the balance period of limitation

remaining as on 15.03.2020, if any, shall become

available with effect from 15.03.2021.

2. In cases where the limitation would have expired

during the period between 15.03.2020 till

14.03.2021, notwithstanding the actual balance

period of limitation remaining, all persons shall

have a limitation period of 90 days from

15.03.2021. In the event the actual balance

period of limitation remaining, with effect from

15.03.2021, is greater than 90 days, that longer

period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall

also stand excluded in computing the periods

2 | P a g e

prescribed under Sections 23 (4) and 29A of the

Arbitration and Conciliation Act, 1996, Section 12A

of the Commercial Courts Act, 2015 and provisos

(b) and (c) of Section 138 of the Negotiable

Instruments Act, 1881 and any other laws, which

prescribe period(s) of limitation for instituting

proceedings, outer limits (within which the court

or tribunal can condone delay) and termination of

proceedings.

4. The Government of India shall amend the

guidelines for containment zones, to state.

“Regulated movement will be allowed for

medical emergencies, provision of essential

goods and services, and other necessary

functions, such as, time bound applications,

including for legal purposes, and educational

and job-related requirements.”

3. The Suo Motu Writ Petition is disposed of accordingly.

........................CJI.

[ S. A. BOBDE ]

................................J.

[ L. NAGESWARA RAO ]

..............................J.

[ S. RAVINDRA BHAT ]

New Delhi,

March 08, 2021.

3 | P a g e

LAW FOR ALL

LawforAll

advocatemmmohan

Just for legal information but not form as legal opinion

Tuesday, March 9, 2021

whether after clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012, the proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section 28(4) of the Customs Act, 1962 are valid in law

Monday, March 8, 2021