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Saturday, January 31, 2015

AsiaNet news reported the speech as follows:- "Today disregarding the verdict of those Judges and flouting their judgments, people throughout the length and breadth of Kerala are organizing public meetings and rallies. Why should those Judges sit in glass houses and pass verdicts any more? If they have any self respect they should resign and step down from their office. The judiciary can attain greatness only when judgments acceptable to the country and obeyed by the people are passed. Today judiciary is the refuge. If the Legislature exceeds its limits there is the judiciary which comes to the rescue. But if the judiciary exceeds its limits who will tether the judiciary. In a democracy people are the supreme. Judges are to interpret the laws and interpret the intention of the Legislature which had made the laws and pass orders accordingly. Unfortunately, what some idiots (fools) occupying our seat of justice say is nothing else." = Having perused the translations of his speech, we are left in no manner of doubt that he intended to lower the dignity of Court, to obstruct and impede its functioning and not merely to criticise its pronouncement which was not to his liking. His conduct leaves him unquestionably guilty of the offence of Contempt of Courts, calling for him to be punished for his illegal act. He has shown no remorse or contrition for his conduct. Instead, he has vainly etymologised the Sanskrit origin of 'sumbhan', fully aware of the fact that in its slang, especially to the rural and rustic persons he was addressing, it conveyed a strong abuse. Judges expect, nay invite, an informed and genuine discussion or criticism of judgments, but to incite a relatively illiterate audience against the Judiciary, is not to be ignored. It was, not the Petitioner's province, as exercising his freedom of speech, to advise that "if those judges have any self respect, they should resign and quit their offices".

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL No. 2099 OF 2011


M.V. JAYARAJAN                                            ...... APPELLANT

      Vs.

HIGH COURT OF KERALA & ANR.                          ......RESPONDENTS



                               J U D G M E N T


VIKRAMAJIT SEN, J.


1      This Appeal lays siege to the decision of the Division Bench  of  the
High Court of Kerala at Ernakulam, which  found  the  Petitioner  guilty  of
having committed criminal  contempt  punishable  under  Section  12  of  the
Contempt of Courts Act, 1971, and sentenced him to simple  imprisonment  for
six months and to pay a fine of Rs.2000/-.
2     The facts leading to these events is that another  Division  Bench  of
the High Court of Kerala had, by Orders dated 23.6.2010, banned the  holding
of meetings on public roads and road margins in the State  with  the  object
of ensuring  accident-free  and  uninterrupted  traffic  along  such  public
roads.   Although not relevant for the present purposes, these  Orders  were
confirmed subsequently; a Review Petition  was  dismissed  and  the  Special
Leave Petition was also rejected by this Court.   Meanwhile,  on  26.6.2010,
the Appellant delivered a speech in  a  public  meeting  at  Kannur,  Kerala
allegedly convened in connection with a hartal organised to protest  against
the hike in petroleum prices, which was widely reported  by  the  media.   A
translation of the speech as appearing in local City News reads as follows:-

      "When the Court verdicts go against the country and the people,  those
verdicts have only the value of grass.   From now  on,  what  worth  do  the
judges who pronounced the verdict have?    Today  disregarding  the  verdict
of those Judges and flouting their judgments, people throughout  the  length
and breadth of Kerala are organizing  public  meetings  and  rallies.    Why
should those Judges sit in glass houses and  pass  verdicts  any  more?   If
they have any self respect they should  resign  and  step  down  from  their
office.   The judiciary can attain greatness only when judgments  acceptable
to the country and obeyed  by  the  people  are  passed.    Today  even  the
judiciary is ashamed.   If the Executive exceeds its  limits  the  judiciary
is there to save.   Judges are to  interpret  the  laws  and  interpret  the
intention of the Legislature  which  had  made  the  laws  and  pass  orders
accordingly.   Unfortunately, what some idiots (fools)  occupying  our  seat
of justice say is nothing else.   Actually  speaking  they  themselves  make
laws and they  themselves  issue  orders.    This  is  not  conducive  to  a
democratic country.   This is what they should correct.   Today is  the  day
on which the verdict of two senior Judges of  Kerala  High  Court  has  been
given only the value of grass."

AsiaNet news reported the speech as follows:-
      "Today disregarding the verdict of those  Judges  and  flouting  their
judgments,  people  throughout  the  length  and  breadth  of   Kerala   are
organizing public meetings and rallies.  Why  should  those  Judges  sit  in
glass houses and pass verdicts any more?  If  they  have  any  self  respect
they should resign and step down  from  their  office.   The  judiciary  can
attain greatness only when judgments acceptable to the  country  and  obeyed
by the  people  are  passed.    Today  judiciary  is  the  refuge.   If  the
Legislature exceeds its limits there is the judiciary  which  comes  to  the
rescue.   But if the judiciary  exceeds  its  limits  who  will  tether  the
judiciary.   In  a  democracy  people  are  the  supreme.    Judges  are  to
interpret the laws and interpret the intention of the Legislature which  had
made the laws  and  pass  orders  accordingly.    Unfortunately,  what  some
idiots (fools) occupying our seat of justice say is nothing else."

IndiaVision News also carried this speech, which translated reads thus:-
      "When the Court verdicts go against the country and the people,  those
verdicts have only the value of grass.  Now on, what  worth  do  the  judges
who pronounced the verdict have?  Today disregarding the  verdict  of  those
Judges and flouting  their  judgments,  people  throughout  the  length  and
breadth of Kerala are organizing public meetings and rallies.    Why  should
those Judges sit in glass houses and pass verdicts any more?  If  they  have
any self respect they  should  resign  and  step  down  from  their  office.
Unfortunately, what some idiots (fools) occupying our seat  of  justice  say
is nothing else.   Actually speaking they  themselves  make  laws  and  they
themselves issue orders.   This is not conducive to  a  democratic  country.
This is what they should correct".

3     In his reply affidavit  filed  in  the  High  Court  in  the  Contempt
proceedings the Appellant has asseverated, inter alia, as follows:-
      "4.   It is true that I have made a speech  referring  to  Annexure  V
judgment passed by this Honourable Court, prohibiting  holding  of  meetings
on public roads and road margins.  It was not a  prepared  speech,  but  one
delivered extempore.  The allegations that by  making  the  said  speech,  I
have committed contempt of this  Honourable  Court,  by  using,  during  the
course of the speech, certain words for which distorted meanings  have  been
given in the petition, is absolutely incorrect and without  any  basis.   In
this connection I may submit that I am a person who believes in the Rule  of
Law  and  the  supremacy  of  the  Constitution.   I  have  firm  faith  and
unquestionable loyalty to the  Constitution  and  the  institutions  created
under it.  I have great respect and adoration  for  the  judiciary  and  the
Honourable Judges.  I have always obeyed the verdicts  of  Courts  and  have
never once defied its authority, or will  ever  I  do  it.   The  media  has
reported distorted versions of the speech I made  referring  to  Annexure  V
judgment and give wide publicity to it taking certain words used  by  me  in
the speech out  of  context  and  providing  their  own  interpretation  and
meaning to those with ulterior motives and designs. I  have  criticized  the
judgment as to its impracticability and difficulty  of  implementation.   It
was in a Public Interest Litigation filed by a Transport  Operator,  seeking
to prevent conduct of public meetings in the PWD road  in  front  of  Alwaye
Railway Station  that  this  Honourable  court  has  rendered  the  judgment
prohibiting the  holding  of  meeting  on  public  roads  and  road  margins
throughout the State.  As a Social and Political Worker,  I  felt  that  the
above judgment has been passed without considering  the  vital  factual  and
legal aspects involved and that it may adversely affect the legal rights  of
the Public including their  Fundamental  Right  of  freedom  of  speech  and
expression and to assemble peacefully, guaranteed to them under  Article  19
of the Constitution.  In my speech I have used the words  commonly  used  by
the villagers of North Malabar to convey my  message  to  the  audience  and
they have also understood the same in the sense those  words  usually  carry
with them.  There is no meaning to those words as given and  interpreted  by
the  persons  who  have  preferred  the  contempt  petitions   before   this
Honourable court seeking to initiate action against this deponent under  the
Contempt of Courts Act.
      5.    Annexure V  judgment  of  this  Honourable  Court  was  rendered
without considering the Public Interest or the contentions of  the  parties,
affected thereby, including the Government.  The Court has gone  beyond  the
issues  before  it  which  it  was  called  upon  to  decide.   The  general
declaration issued, prohibiting the conduct of meetings on the road  margins
was far exceeding the relief sought for in the writ petition.  It  has  been
the practice followed in this country and in this State even from  the  pre-
independence period to hold meetings on the road margins.   If  the  conduct
of such meetings is likely  to  create  any  law  and  order  situation,  or
hindrance to the traffic, the police and  other  statutory  authorities  are
clothed with power to control such meetings by resorting to  the  provisions
under the Police Act and other similar laws.  The Executive  Magistrate  has
power to control, restrict and prohibit the  conduct  of  such  meetings  by
invoking the provisions of Sec. 144 of the Criminal Procedure  Code.   Thus,
under law without infringing the  freedom  of  movement  of  the  public  at
large, meetings could be convened on the road margins.
      6.    The criticism made by me against the judgment  was  with  honest
intention and bonafide purpose and by way of expressing  of  my  opinion  in
respect of the same to the public.  As a public worker, I thought it was  my
bounden duty to make  such  criticism  when  the  judiciary  has  failed  to
consider properly the issue involved while  rendering  the  above  judgment.
In so doing, I have never intended to demean  any  of  the  Judges  of  this
Honourable  Court  or  the  authority  of  this   Honourable   Court.    The
Fundamental Freedom  of  speech  and  expression  guarantied  (sic)  by  the
Constitution is no less important than  the  freedom  of  judgment  to  move
freely throughout the Territory of India. In  the  judgment  the  Honourable
Court has only considered the freedom of persons  to  move  freely,  without
bestowing  such  anxious  consideration  to  the  freedom  of   speech   and
expression as also of the freedom to assemble  peacefully  guarantied  (sic)
to the citizens by the Constitution with  equal  force.   For  that  reason,
according to me, the Judgment was not in consonance with the  constitutional
scheme.  I thought, I should bring this  infirmity  to  the  notice  of  the
General Public.  My speech was only to highlight the above.
      7.    The words in question used by me  in  the  speech,  specifically
referred to in the Contempt Petition  drawing it out of contest,  are  those
prevalent in the area and  characteristic  of  the  assemblage  to  which  I
spoke.  The speech was one made in protest against the hiking of  prices  of
Essential Commodities and the audience was largely constituted of  the  poor
sections  of  the  society,  the  common  man  of  the  area.    The   words
particularly referred to in  the  contempt  petition  have  no  specific  or
definite meaning and the sense it  carries  is  according  to  its  ordinary
usage.  That being so, those words taken out of context and given a  meaning
that suits the  intention  of  the  petitioner  in  the  contempt  of  court
petition, may not be made the  basis  for  initiating  contempt  proceedings
against  me.   Since  the  above  judgment  was  practically  impossible  of
implementation, there were public meetings held on the road side on the  day
subsequent to the judgment also in several places in the State and that  was
the reason for me to say  that  the  above  judgment  was  rejected  by  the
public.  In doing  so,  I  have  never  challenged  the  authority  of  this
Honourable court or made  any  disparaging  remarks  demeaning  any  of  the
Honourable Judges of this Honourable  Court.   Therefore,  considering  that
the speech made by me was in a particular context and the language used  was
one apposite to the issue and the  nature  of  the  audience,  there  is  no
justification in picking up one or two words  used  in  the  speech  out  of
context and raising the allegation of contempt of court against me based  on
the incorrect and fanciful  meanings  attributed  to  those  words,  without
considering the entire speech as a whole and the context  in  which  such  a
speech was made.  In this connection  it  is  pertinent  to  note  that  the
petitioner has not produced the entire text of the speech made by  me  along
with the Contempt Petition and it is a well  established  principle  of  law
that in order to decide whether there is contempt  or  not  reading  of  the
speech as a whole is necessary.  Since words torn out  of  context  from  it
may be liable to be misunderstood.
........
Sumbhan is a word  used  in  Malayalam  without  any  specific  or  definite
meaning.  As distinct from a "word" with a definite meaning in  a  language,
there are "usuages"  in  every  language  which  have  different  shades  of
meaning with varying connotations depending on the occasions in which it  is
used as  also  the  regions,  sections  of  people,  circumstances,  etc  in
relation to which it is used.  The word "Sumbhan", is such a  usuages  which
is understood in different senses and connotations  in  different  parts  of
the State and depending on the class of people who  uses  the  same.    Even
inspite of such variations, it is submitted  that  the  word  "Sumbhan"  can
never be understood as having the meaning attributed to it in  the  contempt
petition namely "idiot" or "fool".
I hail from Cannanore District, in the Northern part of  the  Kerala  State.
The impugned speech I was making  to  a  village  population  at  Kannur,  a
considerable section of which cannot claim even to be  moderately  educated.
 "Sumbhan", is a word widely used by the people in the area to  refer  to  a
person who had said or expressed something or acted in  any  particular  way
without properly considering the various aspects of  a  matter  intensively,
in all its aspects, or evaluating or taking into consideration,  the  likely
consequences that may ensure thereby, in a hasty and casual manner, even  if
he be a person highly reputed and accepted by  all  as  an  intelligent  and
knowledgeable person.  In such a situation by referring  to  the  Honourable
Judges who have issued the judgments in question, to the people who were  at
a loss to understand the logic and reason of  the  disapproval  of  a  right
which for them was an integral part of their legal  right  which  they  have
been enjoying all through the  past,  and  as  old  as  the  memory  of  the
existing generations goes as "Sumbhan", I was only  conveying  to  them  and
carrying home to  them  the  idea  that  those  Judges,  while  passing  the
judgment have not properly considered the issue involved in all its  aspects
nor have they comprehended the  attendant  circumstances  or  the  resultant
consequences thereof.
.........
21    Having regard  to  the  above,  it  is  humbly  submitted  that,  this
Honourable Court may be pleased to see that the charges levelled against  me
in the above Contempt  of  Courts  Case  are  not  sustainable  in  law  and
accordingly it is prayed that accepting this reply affidavit,  the  Contempt
of court proceedings initiated against me may kindly be dropped."

The Appellant has also relied on Article 19(1) (b), 19(1) (a)  and  19(1)(d)
and 19(3) of the Constitution.  He has deposed that he considered  his  duty
"to speak to  the  people  evaluating  the  same  and  expressing  my  views
regarding the impact and the  adverse  consequences  it  will  make  on  the
social and political life of this  country  and  its  people,  as  also  the
interference and the intrusions it will make on the  rights,  including  the
fundamental rights guaranteed  to  the  citizens  of  this  country  by  the
Constitution .... I may submit in my speech I have not made  consciously  or
otherwise any disparaging or disrespectful  statements  or  remarks  against
any of the Hon'ble Judges of this Court."   As regards the use of  the  word
'sumbhan' or 'sumbhanmar', the Appellant has taken the stand that  the  word
implied that "those Judges, while passing the  judgment  have  not  properly
considered  the  issues  involved  in  all  its  aspects   nor   have   they
comprehended the  attendant  circumstances  or  the  resultant  consequences
thereof."
4     In the said affidavit, the Appellant  has  quoted  decisions  of  this
Court in P.N. Duda v. P.Shiv Shanker 1988 (3) SCC 167; Re- S Mulgaokar  1978
(3) SCC 339 and R v. Metropolitan Police  Commissioner,  Ex-parte  Blackburn
1968 (2) All ER 319(CA).   We are  in  respectful  agreement  with  all  the
observations made in these judgments.
5     On 15.11.2011, the  Appeal  was  taken  on  Board  and  admitted.    A
direction was passed that the Appellant be released on  bail  but  that  the
fine should be deposited within  one  week.    By  that  time,  as  per  the
submissions made by the learned senior counsel appearing for  the  Appellant
had suffered incarceration for one week.
6     Learned Senior Counsel for the Appellant has drawn  our  attention  to
certain expressions used in the impugned Judgment, which  we  unhesitatingly
and unequivocally find to be inappropriate when used  by  the  Judge  in  an
Order or judgment.   Since we have expressed our  opinion  we  shall  adjure
from even mentioning the explanation offered  on  behalf  of  the  Bench  as
elucidation  in  the  backdrop  of  the   syntax.    The   sentence   passed
comprehensively does all the speaking.  The endeavour of the learned  Senior
Counsel is to persuade us that these words had been employed by  the  Judges
because they were prejudiced against the Appellant, and that  prejudice  has
resulted in imposing  the  impugned  sentence  in  its  total  and  complete
severity. The said observations do not impact  upon  the  character  of  the
words used by the Appellant in his public speech,  since  they  occur  after
the event.
7     Learned Senior Counsel has not addressed any arguments  or  given  any
extenuating explanation with regard to his  utterance  that  if  the  Judges
have any self respect they should step down from their office.  We are  also
unable to accept the meaning sought to  be  given  to  the  word  'sumbhan'/
'sumbhanmar'  since  our  inquiries  reveal  that  they  are  pejorative  or
insulting epithets/abuses akin to calling a person a fool  or  idiot.    The
Appellant indubitably has exercised his freedom of speech insofar as he  has
dissected the Judgment and argued that it was  contrary  to  law.    He  may
also be excused in saying that Judges live in glass  houses,  and  that  the
judgment's worth is less than grass, since this is his perception.   But  it
is not open to the Appellant or any person to employ abusive and  pejorative
language to the authors of a judgment and call upon them to resign and  step
down from their office if  they  have  any  self  respect.    The  Appellant
should have kept in mind the words of Lord Denning,  in  the  Judgment  upon
which he has relied, that those that  criticise  a  judgment  must  remember
that from the nature of  the  Judge's  office,  he  cannot  reply  to  their
criticism.   In the case in hand, the Appellant had his remedy in  the  form
of a Special Leave Petition to this Court, which  he  has  exercised  albeit
without success.   The speech was made  within  a  couple  of  days  of  the
passing of the ad interim injunction; no empirical evidence was referred  to
by the Appellant, nor has any been  presented  thereafter,  to  support  his
utterance that the Judgment/Order was being opposed by the public at  large.
 Hence we see these parts of the  speech  as  intending  to  scandalize  and
lower the dignity of  the  Court,  and  as  an  intentional  and  calculated
obstruction in the administration of justice.  This requires to  be  roundly
repulsed and combated.
8     Learned Senior Counsel appearing for the Respondent State has  in  his
brief submission highlighted the fact that at no  stage  has  the  Appellant
tendered an apology.   We  have  given  an  opportunity  to  learned  Senior
Counsel  for  the  Appellant  to  elucidate  this  position   but   he   has
categorically stated that he has instructions that the  Appellant  does  not
intend to apologise for any of his statements.
9     The Appellant is an advocate and also an ex-member of the  Legislative
Assembly.   He is fully aware that  our  Constitution  is  premised  on  the
separation of powers which enjoin the Executive,  the  Legislature  and  the
Judiciary to perform their duties within the Constitutional framework.    He
is fully aware that  while  he  has  the  right  of  freedom  of  speech  of
expression, this postulates a temperate and reasoned  criticism  and  not  a
vitriolic, slanderous or abusive one; this right of  free  speech  certainly
does not extend to inciting the public directly or  insidiously  to  disobey
Court Orders.   The remedy is provided by way of an appeal to  the  Division
Bench, which was taken recourse to.   Having  perused  the  translations  of
his speech, we are left in no manner of doubt that he intended to lower  the
dignity of Court, to obstruct and impede its functioning and not  merely  to
criticise its pronouncement which was not to his liking. His conduct  leaves
him unquestionably guilty of the offence of Contempt of Courts, calling  for
him to be punished for his  illegal  act.    He  has  shown  no  remorse  or
contrition for  his  conduct.   Instead,  he  has  vainly  etymologised  the
Sanskrit origin of 'sumbhan', fully aware of the fact  that  in  its  slang,
especially to the rural and rustic persons he was addressing, it conveyed  a
strong  abuse.   Judges  expect,  nay  invite,  an  informed   and   genuine
discussion or criticism of judgments, but to incite a relatively  illiterate
audience against the Judiciary, is not to  be  ignored.   It  was,  not  the
Petitioner's province, as exercising his freedom of speech, to  advise  that
"if those judges have any self respect, they should resign  and  quit  their
offices".
10    The impugned  Judgment  has  correctly  and  condignly  committed  the
Appellant for committing contempt of Court and  ordered  his  incarceration.
Nevertheless, while affirming the impugned Judgment, we reduce the  sentence
of six months imprisonment to that of simple imprisonment for  a  period  of
four weeks.
11    The Appeal is  disposed  of  in  the  above  terms.   We  desist  from
imposing costs.


............................................J.
                                          [VIKRAMAJIT SEN]



............................................J.
                                          [ C. NAGAPPAN]
New Delhi;
January 30, 2015.


























-----------------------
15


Friday, January 30, 2015

Whether by the alleged action the respondents-Companies directly or indirectly had transferred or parted with their interest/benefit under their respective agreements for licence. Whether the respondents-Companies violated the terms as contained in Clause 4(h) of agreement and Clause 3(p)of their lease deed and Whether the respondents-Companies are liable to pay transfer fee for alleged transfer of its own interest.

     Whether  by  the  alleged  action  the  respondents-Companies  directly   or
indirectly had transferred  or  parted  with  their  interest/benefit  under
their respective agreements for licence.
Whether the respondents-Companies violated the terms as contained in  Clause
4(h) of agreement and  Clause 3(p)of their lease deed and
Whether the  respondents-Companies  are  liable  to  pay  transfer  fee  for
alleged transfer of its own interest.=


 In the present case it has not been denied that respondent  company
M/s Super Tannery (India) Ltd. and the other company Super Agro  Tech.  Ltd.
are   family   held   companies   of   the   same   family   having   common
Directors/Promoters. Pursuant to the  order  of  amalgamation  by  the  High
Court the plot of land in question namely A-9, A-10, Industrial  Area  Unnao
Site-II which was allotted to Super Agro Tech. Ltd. became the asset of  the
respondent company M/s Super  Tannery  (India)  Ltd.   As  per  Amalgamation
Scheme, all the property, rights and power of Super Agro Tech. Ltd.,  having
its office at 184/170, Jajmau Kanpur was transferred without further act  or
deed to M/s Super Tannery (India) Ltd. Thus it is clear that  by  the  order
of the Court the premises in question  was  transferred  in  favour  of  the
other Company.
  In view of the aforesaid facts as noticed in  each  case,  we  hold
that the appellant rightly issued notice demanding transfer  fee  from  each
of the respondents and there was no reason for the High Court  to  interfere
with the same.

                                                            REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO.2731 OF 2005


U.P. STATE INDUSTRIAL DEV.CORPN. LTD.                         APPELLANT

                          VS.

MONSANTO MANUFACTURES (P) LTD. & ANR.               RESPONDENTS

WITH

C.A.NO.1310 OF 2006

C.A.NO.1318 OF 2015 (@SLP(C) NO.16404 of 2006)

C.A.NO. 1319 OF 2015 (@SLP(C) NO.5838 of 2008)


                               J U D G M E N T


         Leave granted in SLP (C) No.16404 of 2006  and  SLP(C)  No.5838  of
2008.
2.       The Government of Uttar Pradesh acquired land in various  districts
and conveyed the same to the  appellant-U.P.  State  Industrial  Development
Corporation (hereinafter referred to as, 'the Corporation'  for  short)  for
the purpose of  setting  up  industrial  area.  The  Corporation  thereafter
divided the said land
into plots for leasing  the  same  to  industrial  units.  The  respondents-
Companies, applied to the  appellant-Corporation  for  grant  of  lease.  On
receiving part premium of the plot, the appellant executed an agreement  for
licence and  later  executed  lease  deed  in  favour  of  the  respondents-
Companies. Later the  appellant-Corporation  made  an  allegation  that  the
respondents-companies' share holders transferred their company/their  shares
to new shareholders without  the  consent  of  appellant-Corporation,  which
amounted to transfer of interest, for which transfer levy is required to  be
deposited. Demand notices were issued by the  appellant-Corporation  to  the
respondents-Companies.  Those  demand  notices  were   challenged   by   the
respondents-Companies in  different  writ  petitions  or  suits  which  were
allowed by the Division Bench of the High Court of Judicature  at  Allahabad
by impugned judgments.

3.       In the  aforesaid  cases  the  High  Court  held  that  unless  the
respondents-Companies transfer its right in the plot in question  in  favour
of another legal entity, there is no question to apply clause  4(h)  of  the
Agreement for licence. The High Court  further  held  that  mere  change  in
shareholders or Directors, does not change legal entity of the  Company  and
as such it continues unchanged.

4.       The questions that arise for our  consideration  in  these  appeals
are:
Whether  by  the  alleged  action  the  respondents-Companies  directly   or
indirectly had transferred  or  parted  with  their  interest/benefit  under
their respective agreements for licence.
Whether the respondents-Companies violated the terms as contained in  Clause
4(h) of agreement and  Clause 3(p)of their lease deed and
Whether the  respondents-Companies  are  liable  to  pay  transfer  fee  for
alleged transfer of its own interest.

5.  The facts leading to the cases are as follows:-
Monsanto Manufactures Private Ltd.(A Company registered under the Companies
Act, 1956)
         The respondent-Company applied  to  the  appellant-Corporation  for
grant of lease of plot of  land  bearing  no.38/1-A  situated  in  Sahibabad
Industrial Area, Site No.4 of Tehsil   and  District  Ghaziabad  admeasuring
14,533 square yards for the purpose  of  constructing  an  industrial  unit.
The appellant-Corporation after receiving part  premium  of  the  plot  land
executed an agreement for licence on  12th  June,  1978  in  favour  of  the
respondent-Company. The possession of the  land  was  given  on  12th  June,
1978. After construction of the building of  the  factory,  the  respondent-
Company and the appellant-Corporation  executed  a  deed  of  lease  on  5th
September, 1979 for a period of 90 years. Later,  the  appellant-Corporation
vide letter dated 12th April, 1994 asked the respondent-Company  to  provide
the list of its Directors and shareholders duly certified by  the  Chartered
Accountant.  The  same  was  furnished  by  the  respondent-Company  to  the
appellant-Corporation  on  7th  May,  1994.  According  to  the   appellant-
Corporation the respondent-Company changed the  Directors  and  shareholders
without prior permission and consent of the appellant-Corporation and  since
the respondent-Company was purchased  by  the  present  Directors  from  the
previous Directors. The appellant-Corporation  by  letter  dated  27th  May,
1994 asked for details in order to take necessary action in accordance  with
the terms of the lease deed.  The  respondent-Company  categorically  denied
the allegations levelled by the appellant-Corporation by their letter  dated
27th September, 1994.
6.        By  letter  dated  1st  October,  1999  the  appellant-Corporation
demanded  Rs.25,51,781/-  from  respondent-Company  towards  transfer   levy
charges as the original shareholders of the  respondent-Company  transferred
their entire shareholding and interest to the  new  shareholders  and  there
was change in the Directors of  the  respondent-Company.  According  to  the
appellant such change makes the shifting of the controlling interest of  the
respondent-Company and transfer levy for the  same  was  demanded  from  the
respondent-Company  as  per  the  rules  of  the  Corporation.  The  Company
submitted its reply vide letter dated 8th December, 1999 and reiterated  its
earlier stand to the effect that there is no breach  of  any  terms  of  the
lease deed as no transfer or assignment or sale of premises in question  has
been made.  However, it was  not  accepted  by  the  Corporation,  who  sent
another reminder dated 13th January, 2000 asking the Company to  pay  a  sum
of Rs.25,51,781/- towards transfer levy charges.
         The aforesaid demand  notice  was  challenged  by  the  respondent-
Company before the High Court of Allahabad which by impugned judgment  dated
11th May, 2004 allowed the writ petition.
U.P. Twiga Fiberglass Limited (A  Company  registered  under  the  Companies
Act, 1956)
7.       The appellant-Corporation executed an  agreement  with  respondent-
Company  followed  by  lease  deed  dated  27th  May,  1977  by  which   the
Corporation leased plot nos.9 and 23-A  admeasuring  approximately  1,10,926
square meters of land situated  at  Sikandrabad  Industrial  Area,  District
Bulandshahr,  Uttar  Pradesh  to  the  respondent-Company.   The  lease  was
executed for 90 years.  In the year 1994,  the  respondent-Company  suffered
heavy losses to the  tune  of  Rs.42  crores.   Therefore,  the  respondent-
Company sold almost its entire shares including shares of its promoters  and
shares lying with financial institutions  to  a  foreign  company  known  as
"Rotar India Ltd.". As entire shares of the  respondent-Company  transferred
to Rotar India Ltd., the promoters of the said Company were replaced by  new
promoters/Directors.
8.       According to  the  appellant-Corporation,  in  view  of  the  above
disposal of controlling interest in the venture of  the  existing  allottee,
they were liable to pay transfer levy as per Clause 6(f) of  the  guidelines
of the Corporation pertaining to reconstitution and transfer.
9.       The Corporation vide its letter dated 26th  April,  1995  requested
the respondent-Company to supply list  of  new  shareholders,  list  of  new
Directors  and  copies  of  Memorandum  of  Association  and   Articles   of
Association.  However, it is alleged that respondent-Company  neglected  the
same  and  refused  to  supply  the  documents.  The   appellant-Corporation
thereafter vide letter dated 15th May, 1995 asked the respondent-Company  to
pay a sum of Rs.24,95,835/- towards transfer levy as there was  disposal  of
controlling interest in the venture by  the  existing  allottee.   The  said
demand of transfer levy, according to appellant, was as per lease  deed  and
guidelines of the Corporation pertaining to re-constitution and transfer.
10.      Being aggrieved the respondent-Company filed  suit  bearing  No.876
of 1996 before Civil Judge, Bulandshahr  seeking  permanent  injunction  and
praying for restraining the appellant-Company from claiming  any  amount  as
transfer levy. The appellant  filed  written  statement  and  contested  the
suit.
11.      The Civil Judge, Bulandshahr vide judgment and  decree  dated  23rd
January, 1999 allowed the suit and directed  the  appellant-Corporation  not
to charge transfer levy from the respondent-Company. The Civil  Judge,  held
that the respondent-Company is a legal person and disposal of  its  majority
shares in the name of a foreign Company namely Rotar  India  Ltd.  does  not
change the legal status of the Company and therefore, there is no  transfer.

12.      The appellant-Corporation being  dissatisfied  with  the  aforesaid
order filed Civil Appeal No.45 of 1999  in  the  Court  of  District  Judge,
Bulandshahr  which  was  dismissed  vide  order  dated  15th   July,   2000.
Thereafter, the appellant-Corporation filed Second Appeal  No.1425  of  2000
before the High Court of Judicature at Allahabad and the same  dismissed  by
impugned judgment dated 24th October, 2005.

M/s Enrich Engineering Works Pvt. Ltd.(A Company registered under the
Companies Act, 1956)
13.      One M/s Tyres & Tubes Co. Pvt. Ltd. having its  registered   office
at Scooters India Ltd. Premises, Sarojini  Nagar,  PO  Lucknow  through  its
Directors Shri S.Sounderarajan s/o of late Shri  S.  Srinivasan  applied  to
appellant-Corporation for allotment  of  plots  of  land.   After  agreement
which was followed by lease deed dated 21st December,  1976  the  appellant-
Corporation  allotted   industrial   plot   no.A-4   and   A-5   admeasuring
approximately  40,489  square  yards  and  8.36  square  yards  respectively
situated at site no.2, Rai Bareilly, Uttar Pradesh  to  M/s  Tyres  &  Tubes
Company Pvt. Ltd. The lease was for 90 years.  M/s Tyres &  Tubes  Co.  Pvt.
Ltd. suffered heavy losses and pursuant to its winding  up,  Allahabad  High
Court vide judgment and order dated 9th  January,  1996  appointed  Official
Liquidator. The Official Liquidator sold the properties of M/s Tyres &  Tube
Co. Pvt. Ltd. including right and  interest  on  the  land  in  question  to
respondent M/s Enrich Engineering Pvt. Ltd.  The said sale was  affirmed  by
the Allahabad High Court vide order dated 9th February,  2000.  Pursuant  to
the order of the  Allahabad  High  Court  dated  10th  September,  2003  the
Official Liquidator issued  sale  certificate  dated  12th  March,  2004  in
favour of respondent-Company.
14.      The appellant-Corporation  was  not  a  party  in  the  winding  up
proceedings nor was any notice issued to the  appellant-Corporation  by  the
Official Liquidator.  On  knowing  about  transfer  of  the  rights  of  the
original  allottee-  M/s  Tyres  &  Tubes  Co.  Pvt.  Ltd.,  the  appellant-
Corporation  demanded  transfer  levy  amounting  to  Rs.3,80,621.25/-  from
respondent-Company.  According to the appellant, such demand was  made  from
the respondent-Company, as the said company had purchased M/s Tyres &  Tubes
Co. Pvt. Ltd., with all its assets and liabilities.

15.      Against the demand, respondent-Company preferred  a  writ  petition
being Civil Misc. Writ Petition No.56982 of 2005 before the  Allahabad  High
Court which was allowed by the impugned judgment  dated  27th  April,  2006.
The demand notice was set aside by  the  High  Court  in  view  of  judgment
rendered in another similar case.
M/s Super Tannery (India) Ltd.(A  Company  registered  under  the  Companies
Act, 1956)
16.               The appellant-Corporation entered into an agreement  dated
10th October, 1990 with one M/s Super Agro  Tech  Ltd.  for  setting  up  of
specialty paper  unit  in  industrial  plot  nos.A-9  and  A-10  admeasuring
approximately 45,080/- square meters in Industrial  Area  Unnao  Site-2.  No
right whatsoever in regard to transfer of  said  plots  were  given  to  the
licensee M/s Super Agro Tech Ltd. The  possession  of  the  said  plots  was
handed over on 25th January, 1991 and subsequently lease was also  executed.
 M/s Super Agro Tech Ltd. thereafter did not  set  up  any  specialty  paper
unit and no investment was made.   According  to  the  appellant-Corporation
said licensee M/s Super Agro Tech Ltd. with a view to enrich itself  started
amalgamation proceeding with  the  new  company  namely  M/s  Super  Tannery
(India)  Ltd.-respondent  herein.  The  said  amalgamation  was   a   mutual
understanding between M/s  Super  Agro  Tech  Ltd.  and  M/s  Super  Tannery
(India) Ltd. The Allahabad  High  Court  vide  order  dated  9th  May,  1997
sanctioned the amalgamation in Company Petition No.32 of  1997.  Though  the
land belongs to the appellant-Corporation, it was not made a  party  to  the
said petition. According  to  the  appellant-Corporation,  the  amalgamation
does not  create  any  right  whatsoever  on  respondent-M/s  Super  Tannery
(India) Ltd. over industrial plots  in  question  and  the  said  two  plots
cannot be legally transferred to the new  Company  i.e.  M/s  Super  Tannery
(India) Ltd.
17.                The  respondent-Super  Tannery  (India)  Ltd.   made   an
application for the transfer of the said industrial plot. On  such  request,
the appellant-Corporation demanded transfer  levy  from  M/s  Super  Tannery
(India) Ltd. for transfer of the said industrial plot.  However,  no  amount
was deposited.  The Corporation by notice dated 3rd November, 2001  demanded
a sum of Rs.34,23,954.51/- as on that date from M/s  Super  Tannery  (India)
Ltd. towards transfer levy.  The aforesaid  notice  was  challenged  by  the
respondent-M/s Super Tannery (India) Ltd. by filing a  writ  petition  being
Civil Misc. Writ Petition No.18535 of 2002 before Allahabad High  Court  and
the same was allowed, by the  impugned  judgment  dated  22nd  August,  2007
following the decision rendered in another case.


Case wise stand of the parties and finding of this Court.
Monsanto Manufactures Private Ltd.
18.      Learned counsel for the appellant-Corporation  submitted  that  the
respondent-Company  has  violated  Clause  3(p)  of  lease  deed  dated  5th
September, 1979 entered  into  between  the   said  Company  and  appellant-
Corporation inasmuch as its "Memorandum  of  Association"  and  "Article  of
Association" were  altered  without  the  written  consent  of  Lessor  i.e.
appellant-Corporation. In view of   the same the  appellant-Corporation  has
the right to determine the said lease deed dated 5th September, 1979.
19.      On the other hand, according to counsel for the respondent  as  the
Company has got separate legal status and the Corporation has  allotted  the
industrial plot to it by name and not in the  name  of  its  Directors,  the
Directors being only officials  working  on  behalf  of  the  Company,  mere
change of names of Directors or shareholders does not in any way  or  manner
affect the legality or status of the  respondent-Company.   It  was  further
contended that change of names of Directors, shareholders duly  done  within
the purview of the Companies Act, 1956, does not affect the legal status  of
the respondent-Company and much less there has  been  any  transfer  of  the
site by the Company to any other individual person.
20.      For  deciding  the  issue  involved  in  the  present  case  it  is
necessary to refer certain clauses of  licence  agreement,  lease  deed  and
guidelines issued by the appellant-Corporation which are common in  all  the
cases.
21.      Clause 4(h) of the licence agreement prohibits licensee's  acts  to
directly  or indirectly  transfer, assignment, sale, encumber or  part  with
its interest under the  benefit  of  the  said  Agreement  without  previous
consent in writing of the  Grantor,  relevant  portion  of  which  reads  as
follows:
"4(h). That the Licence will not directly or  indirectly  transfer,  assign,
sell, encumber or part with its  interest  under  or  the  benefit  of  this
Agreement or any part thereof in any manner whatsoever without the  previous
consent in writing of the Grantor and it shall be open  to  the  Grantor  to
refuse such consent or grant the same subject to such conditions as  may  be
laid down by the Grantor in the behalf."

22.      Sub-Clause (p) of Clause 3  of  lease  deed  also  prohibits    any
alteration in the Memorandum and Articles of Association or in  its  capital
structure without the written consent of the  Lessor,  relevant  portion  of
which reads as follows:
"3(p)    That the Lessee  being  a  registered  partnership  firm  declares,
affirms and undertakes that during the subsistence  of  the  terms  of  this
agreement, the said partnership shall not  be  dissolved,  reconstituted  or
wound up, and/or dealt with in any way which may jeopardize the  rights  and
interests of the  Lessor  in  the  matter  of  this  lease,  nor  shall  its
constitution be altered in any  manner  otherwise  written  consent  of  the
Lessor, first and obtained, and it shall not stand dissolved  on  the  death
or insolvency of any of its partners;
                                     OR
         The Lessee being an individual or sole proprietor of a firm,  shall
not allow any person(s) as partner(s) with him  without  the  prior  written
consent of the Lessor;
                                     OR
         The Lessee  being a Company shall not make or attempt to  make  any
alterations, whatsoever in the provisions of its Memorandum and Articles  of
Association or in its capital structure without the written consent  of  the
Lessor, first had and obtained, and the  Lessee  hereby  undertakes  to  get
registered the prescribed particulars of the charge hereunder  created  with
Registrar of Joint Stock Companies  under  Section  126  of  Companies  Act,
1956, within stipulated period.

         While granting its consent as aforesaid the Lessor may require  the
successor in interest of the Lessee to enter into a  binding  contract  with
the Lessor to abide by and  faithfully  carry  out  the  terms,  conditions,
stipulations, provisos and agreements herein contained or such  other  terms
and conditions as the Lessor may, in its discretion,  impose  including  the
payment  by  the  successor-in-interest  such  additional   premium   and/or
enhanced rent as the Lessor may in its discretion think proper. In the  even
of breach of this  condition  the  agreement  shall  be  determined  at  the
discretion of the Lessor.

         Provided that the right to  determine  this  agreement  under  this
clause will not be exercised if the  industry  at  the  premises  has   been
financed by the State Government or the Industrial  Finance  Corporation  of
India or the Industrial Credit and Investment Corporation of India,  or  the
U.P.  Financial  Corporation  or  Pradeshiya   Industrial   and   Investment
Corporation of Uttar Pradesh or any scheduled bank(including the State  Bank
of India) and the said financing body or bodies mentioned  above  decide  to
take over possession or sell, or lease or assign  the  mortgaged  assets  in
exercise vesting in it or them by virtue of the deeds or  deed  executed  in
its or their favour by the Lessee as provided herein  above,  or  under  any
law for the time being in force."

23.      The Corporation has issued guidelines for  transfer/re-construction
in respect of the plots in the industrial area of  the  Corporation.  Clause
6.01(E) of the said guidelines prescribes Transfer Levy and  Clause  6.01(F)
defines transfer. The aforesaid provisions reads as follows:
"6.01(E) Transfer Levy - per sq.m. @ 5% to 15% of the  rate  of  premium  in
fast moving areas and 2.5% to 7.5% of the current  premium  in  slow  moving
areas prevailing on the date of issuance of transfer  approval  letter  will
be  changed  as  applicable.  While  calculating  the  transfer   levy   the
locational charges of a particular plot will  not  be  considered  and  only
basic premium will be taken into account.

 6.01(F) Transfer - Means disposal of controlling interest  in  the  venture
by the existing allottee.  In  the  case  of  reconstitution,  the  existing
allottee retains controlling interest except  in  case,  where  interest  is
transferred to family members as defined in 6.3(iv)(a) below or where  there
is  change  in  the  constitution  of  the  allottee  due  to   inheritance,
succession or operation of law."

24.      In the present case the entire shareholding of Goyal family  headed
by Mr. Amar Nath Goyal in the said company was  transferred  to  the  Mehta-
Lamba Family. The entire list of shareholders, Managing Director  and  Board
of Directors was provided by  Monsanto  to  the  appellant-Corporation  vide
letter dated 7.5.1994.  The record shows that the  original  subscribers  of
shares were  members  of  Goyal  family  and  the  entire  shareholding  was
transferred to Mehta-Lamba family. Therefore, the  original  subscribers  of
shares of respondent No. 1 Company were totally changed.
25.      The "Memorandum of Association" of  a  company  limited  by  shares
mandatorily prescribes in "Table-B" (Table-B of  1956  Act  and  Table-A  of
2013 Act deals  with  Company  Limited  by  shares)  of  the  Companies  Act
mandatorily prescribed that the names,  addresses,  description,  occupation
of subscribers shall be given in Memorandum of Association. In this case  as
the original subscribers of shares were changed in 1994, there was  material
alteration in the "Memorandum of Association" of respondent no. 1 Company.
26.      It was also contended that there was an alteration in "Articles  of
Association" of respondent no. 1  Company  as  well.   The  last  column  of
"Articles of  Association"  also  mandatorily  provides  for  giving  names,
addresses and description of subscribers. In this case, the  subscribers  of
shares has been completely changed from  the  Goyal  Family  to  Mehta-Lamba
Family and hence there was material alteration of "Articles of  Association"
of the respondent no. 1 Company.
27.      In this case, the ownership of a  huge  Industrial  plot  measuring
14,533 sq.  ft.  in  the  prestigious  and  economically  affluent  area  of
Sahibabad (Ghaziabad) has been transferred from Goyal family to  the  Mehta-
Lamba family for  material financial gains, by adopting  clever  means  that
too  without  taking  written  consent  of  the   Lessor   i.e.   appellant-
Corporation.  There are many instances/examples in  which  the  lessee  gets
allotment of huge industrial plots and thereafter sells the  same  for  huge
monetary gains. This adversely affects the aims and objectives of appellant-
Corporation i.e. the planned development of industrial areas  in  the  State
of Uttar Pradesh. The Hon'ble High Court ought not  to  have  interfered  in
the matter looking into the public interest involved and Clause 3(p) of  the
lease deed.
U.P. Twiga Fiberglass Limited
28.      Similar submissions as made in the above  case  were  made  by  the
learned counsel for  the  appellant  in  the  present  case  also.   It  was
contended that  the  respondent-U.P.  Twiga  Fiberglass  Ltd.  has  violated
Clause 3(p) of lease deed dated  27th  May,1977  entered  between  the  said
company  and  appellant-Corporation   inasmuch   as   its   "Memorandum   of
Association", "Articles of Association" and capital structure  were  altered
without the written consent of Lessor appellant-Corporation and in  view  of
the same, the appellant-Corporation has the  right  to  determine  the  said
lease deed dated 27th May,1977.
29.       Per  contra,  according   to   the   respondent,   the   aforesaid
contention(s) are fallacious, misconceived and untenable.   Learned  counsel
for the respondent made the following submissions:
i)       The Lease-Deed dated 27th  May,  1977  has  been  executed  by  the
respondent-company, in  the  capacity  of  a  "lessee".   Consequently,  the
provisions of the Lease-Deed obligate the Lessee/the  Company  and  not  its
shareholder(s);
ii)      The Lease-Deed contains no clause whatsoever, that authorises  such
levy of transfer-fee, nor does it prohibit any change in  the  share-holding
of the respondent-company. Even otherwise, such change in share-holding  was
committed with the express consent and approval of the petitioner;
iii)     Law recognises a categorical distinction between a Company and  its
share-holders, who have otherwise no right whatsoever on  the  assets  of  a
company. Reliance was placed on Constitution  Bench  decision  in  Bacha  F.
Guzdar, Bombay vs.Commissioner of Income Tax, Bombay, AIR 1955 SC 74,  which
observed as follows:
         "A share-holder has got no interest in the property of the  company
though he has undoubtedly a right to participate in the profits if and  when
the company decides to divide them".
And
         "the Company is a juristic person and is distinct from  the  share-
holders. It is the Company which  owns  the  property  and  not  the  share-
holders".

iv)      In a relationship between the Lessor and a Lessee, it is the Lease-
Deed which is paramount and whose contents are binding on the parties.
v)       A  unilateral  guideline  issued  by  the  Lessor  cannot  be  held
applicable or binding to a lessee. On the  face  of  the  lease  deed,  such
guideline has  no  binding  force.  Further,  change  in  share-holding  was
admittedly done with the express consent/approval of the appellant; and
vi)      Any fee, penalty, compensation, damages or transfer charges  to  be
claimed by the lessor from the lessee must necessarily be  provided  in  the
lease-deed. Otherwise, such fee, penalty, compensation, damages or  transfer
charges being beyond the  terms  of  the  Lease-Deed  cannot  be  sought  or
claimed by the Lessor; Thus the levy of transfer-fee as sought  and  claimed
by the appellant is illegal, misconceived and untenable,  being  beyond  the
terms of the lease deed. It is not a transfer  in  law,  since  transfer  in
share-holding does not amount to  any  transfer  in  the  Company's  assets,
immovable or otherwise. It is equally not a  transfer  in  fact,  since  the
provisions  of  the  Lease-Deed  do  not  recognise/nor  prohibit  any  such
transfer.
vii)      The Guidelines and in particular Clause 6.01(F) is not  applicable
in the present case as there has been no "disposal of  controlling  interest
in the venture  by  an  existing  allottee".  Undoubtedly,  the  respondent-
company is the  "existing  allottee"  and  the  respondent-company  has  not
disposed its "controlling interest in the venture". In  other  words,  there
is no transfer even upon a literal construction of the Guidelines.
30.      It is not in dispute that the appellant-Corporation  on  27th  May,
1977 allotted huge plot measuring 1,10,926 sq. mtrs.  to  respondent  no.  1
Company in  the  industrial  area,  Sikandarabad,  Bulandshehar  on  nominal
amount. The respondent no. 1 clearly admitted that it had  a  huge  debt  of
Rs.13,14,00,000/- the different financial institutions  and,  therefore,  it
sold shares of company, its own shares, shares of promoters  and  shares  of
financial institutions to the foreign company, namely, "M/s Rotar Ltd."
31.      The appellant-Corporation in written statement filed  in  Suit  No.
876/1996 clearly and categorically mentioned that  the  shares  of  original
promoters were transferred in the name of new promoters of  foreign  company
and therefore, the  appellant-Corporation demanded list of new  shareholders
and Memorandum and "Articles of Association" of the Company. The  change  of
original promoters shares to the new  promoters  means  the  subscribers  of
shares were  changed  and,  therefore,  there  is  material  change  in  the
"Memorandum of Association" and "Articles of Association" of the Company.
32.      The appellant-Corporation clearly brought on record that  there  is
change in "Capital Structure" of the company and the "Capital structure"  in
common parlance means "debt-equity ratio".  In this case admittedly there  a
huge amount of Rs. 13,14,00,000/- was funded by the  foreign  company,  i.e.
"M/s Rotar  Ltd."  towards  settling  the  debt.   In  this  background  the
appellant alleged that   there is change in  "debt-equity  ratio"  resulting
alteration in the "capital structure" of the company.
33.       There  is  larger  public  interest  involved   in   incorporating
alteration in "Capital Structure" in Clause 3(p) of the  lease  deed.  There
are many instances where the company takes loan from third  parties  on  the
security and land and structure allotted to them in lease, keeping  in  dark
the lessor which amounts to incurring liabilities on  the  property  without
the knowledge of the lessor.  In this case also there  was  huge  amount  of
debt on the company as it  took  loan  on  land  and  building/factory  from
different  financial  institutions.  Therefore,  there  is  public  interest
involved for which consent of lessor was necessary.

M/s Enrich Engineering Works Pvt. Ltd
34.      In this case also similar submission has been made by the  parties.

35.      It is not in dispute that the huge plot of about  40,  489  &  8.35
sq. yards in the industrial area of Rai  Bareilly  (U.P.)  was  allotted  by
appellant-Corporation to M/s Tyres and Tubes Company Pvt. Ltd. As  the  said
company suffered heavy losses, on 9.1.1996 the company  Judge  of  Allahabad
High Court appointed Official Liquidator and perused High Court's  Order  on
12.3.2004 the said company was sold to M/s  Enrich  Engineering  Works  Pvt.
Ltd., by the Official Liquidator.
36.      Learned counsel for the respondent submitted that it was a case  of
reconstitution and  therefore  payment  of  transfer  fee  does  not  arise.
However, such submission can not be accepted in view  of  Clause  6.01(E)  &
(F) of the guidelines.  The fact that there is  a  change  of  hand  of  the
asset  including  the  land  in  question  by  transfer.    Therefore,   the
respondent is liable to pay transfer fee.

M/s Super Tannery (India) Ltd.
37.      Learned counsel for the appellant submitted that the huge  plot  of
45080 sq. mtrs. in Kanpur was allotted  to  M/s  Supre  Ago  Tech  Ltd.  for
establishing and running a "Specialty Paper Industry". In this case, only  a
"License  Agreement"  dated  10.10.1990  was  executed  by  UPSIDC  and  the
admitted fact on record is that no lease deed was executed  by  UPSIDC  with
M/s Super Agro Tech. Ltd.
38.      In view of the above,  M/s  Super  Agro  Tech  Ltd.  was  merely  a
licensee and as per  the  license  agreement  dated  10.10.1990  it  had  no
authority whatsoever to transfer the  said  industrial  land  to  M/s  Super
Tannery (I) Ltd.
39.      On the other  hand,  according  to  the  learned  counsel  for  the
respondents, due to  various  constraints  over  head  costs  and  financial
hardship company became non viable and the major production  activities  was
not feasible to run the company. In order to  avoid  the  future  problem  a
scheme of amalgamation was prepared as per the provisions of  the  Companies
Act, seeking amalgamation under Chapter V of the  Companies  Act.   A  joint
application was filed before the Allahabad High Court.  The High Court  vide
order dated 9.5.1997 allowed the petition for  amalgamation  and  sanctioned
the scheme of amalgamation and ordered that M/s Super Agro  will  be  merged
into M/s Super Tannery (India) Ltd.
40.      In the present case it has not been denied that respondent  company
M/s Super Tannery (India) Ltd. and the other company Super Agro  Tech.  Ltd.
are   family   held   companies   of   the   same   family   having   common
Directors/Promoters. Pursuant to the  order  of  amalgamation  by  the  High
Court the plot of land in question namely A-9, A-10, Industrial  Area  Unnao
Site-II which was allotted to Super Agro Tech. Ltd. became the asset of  the
respondent company M/s Super  Tannery  (India)  Ltd.   As  per  Amalgamation
Scheme, all the property, rights and power of Super Agro Tech. Ltd.,  having
its office at 184/170, Jajmau Kanpur was transferred without further act  or
deed to M/s Super Tannery (India) Ltd. Thus it is clear that  by  the  order
of the Court the premises in question  was  transferred  in  favour  of  the
other Company.
41.      In view of the aforesaid facts as noticed in  each  case,  we  hold
that the appellant rightly issued notice demanding transfer  fee  from  each
of the respondents and there was no reason for the High Court  to  interfere
with the same.
42.      For the reason aforesaid,  we  set  aside  the  impugned  judgments
dated 11th May, 2004 in C.W.P.No.5094 of 2000, 24th October, 2005 in  Second
Appeal No.1425 of 2000, 27th April, 2006 in Civil Misc.W.P.No.56982 of  2005
and 22nd August, 2007 in C.M. Writ Petition No.18535 of 2002 passed  by  the
High Court of Judicature at Allahabad and allow the appeals.

                                               ...........................J.
                                               (SUDHANSU JYOTI MUKHOPADHAYA)



                                               ...........................J.
                              (V. GOPALA GOWDA)
NEW DELHI;
JANUARY 29, 2015
-----------------------
21


as the prosecution has failed to prove the demand of illegal gratification made by the appellant from the complainant and acceptance of the bribe money by the appellant. Further, the phenolphthalein test cannot be said to be a conclusive proof against the appellant, as the colour of the solution with regard to the other samples were pink and had remained so throughout. However, the lime solution in which the appellant's hands were dipped in, did not show the same pink colour. The reason assigned by the Trial Court is that the colour could have faded by the lapse of time. The said explanation of the Trial Court cannot be accepted by us in view of the fact that the colour of the other samples taken by the Investigation Officer after the completion of the trap laid against the appellant had continued to retain the pink colour. Moreover, the sample of the shirt worn by the appellant which was produced before the Trial Court did not show any colour change on the shirt's pocket section, where the bribe money was allegedly kept by him after the complainant had allegedly given him the bribe money. Thus, on a careful perusal of the entire evidence on record along with the statement of the prosecution witnesses, we have to hold that the prosecution has failed to satisfy us beyond all reasonable doubt that the charge levelled against the appellant is proved.


 NON REPORTABLE





                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL No. 192 of 2015
                       (S.L.P (Crl.) No.9835 of 2014)


C. SUKUMARAN                         ....APPELLANT

                                     VS.

STATE OF KERALA                     .....RESPONDENT




                               J U D G M E N T




V.GOPALA GOWDA, J.


    Leave granted.

This appeal is filed by the appellant  against  the  impugned  judgment  and
order dated 22.05.2014 passed by the High Court of Kerala, at  Ernakulam  in
Criminal Appeal No.108 of 2001, whereby the High Court  has  partly  allowed
the appeal of the appellant and upheld the order of conviction  recorded  by
the   Court   of   Ld.   Enquiry    Commissioner    and    Special    Judge,
Thiruvananthapuram, vide its judgment and order dated 30.01.2001 in C.C  No.
63 of 1999 and convicted the appellant  for  the  offence  punishable  under
Section 13(1)(d) read with Section 13(2) of  the  Prevention  of  Corruption
Act, 1988 (hereinafter referred to as 'the Act') with rigorous  imprisonment
for a period of one year and  a  fine  of  Rs.10,000/-  and  in  default  of
payment of fine, to further undergo six months simple imprisonment.

For the purpose of considering the rival legal contentions urged  on  behalf
of the parties in this appeal and with a  view  to  find  out  whether  this
Court is required to interfere  with  the  impugned  judgment  of  the  High
Court, the necessary facts are briefly stated hereunder:
    It is the case of the  prosecution  that  the  appellant,  who  was  the
"station writer" at the Fort Police Station, Thiruvananthapuram, demanded  a
sum of Rs.1500/- from the complainant PW2, for  releasing  certain  articles
belonging to him, which were taken into custody by the police. PW2  was  the
surety to an accused in a criminal case pending before  the  Judicial  First
Class  Magistrate-II,  Thiruvanathapuram  and  since  the  accused  in  that
particular case had absconded, PW2 was ordered to pay Rs.3000/-  as  penalty
and a warrant was issued against him  in  this  regard.  Therefore,  he  was
apprehended by  the  police  and  his  personal  belongings,  including  the
bicycle, wallet, fountain pen, etc. were retained by  the  police.  PW2  was
subsequently released by the Magistrate, wherein he was given  further  time
to remit the money. It  is  the  case  of  the  prosecution  that  when  PW2
approached the police station on 09.12.1998, to  get  back  his  belongings,
the station writer demanded an amount of Rs.1500/- as  bribe  for  returning
the articles which were seized by the police.

PW2 approached PW6, the Deputy Superintendent of Police, Vigilance and Anti-
Corruption Bureau, Special Investigation Unit, Thiruvanathapuram and gave  a
First Information Statement, upon which an  F.I.R.  was  registered  against
the appellant. Thereafter, a trap was arranged by PW6 and the appellant  was
arrested for the offences punishable under Sections 7 and 13(1) (d)  of  the
Act. The Investigation Officer after completing all  the  formalities  filed
the final report before the Special Judge after framing the charges  against
the appellant. Several witnesses were examined and  various  documents  were
produced as evidence by the prosecution in support of  the  charges  against
the appellant.


 The learned Special Judge on appreciation of the evidence on  record  found
that the appellant was guilty of the offences punishable  under  Sections  7
and 13(1)(d) read with   Section  13(2)  of  the  Act  and  thereby  he  had
convicted and sentenced  him  with  3  years  of  imprisonment  each  under
Sections 7 and 13(1)(d) of the Act and further  ordered  that  the  sentence
must run concurrently. Aggrieved by the judgment  and  order  of  the  Trial
Court, the  appellant  had  preferred  an  appeal  before  the  High  Court,
questioning the correctness of the same and urging  various  legal  grounds.
The High Court on re-appreciation of the evidence  has  partly  allowed  the
appeal of the appellant. The High Court held  that  the  conviction  of  the
appellant under Section 7 of the Act  is  not  warranted  as  the  essential
element of demand of  illegal  gratification  by  the  appellant,  from  the
complainant, is not proved. However, the High Court has held that  there  is
a strong evidence against the appellant under Section 13(1)(d)  of  the  Act
to show  his  culpability.  The  High  Court  further  held  that  there  is
sufficient evidence to prove that PW2 had paid two decoy notes  of  Rs.100/-
denomination to the appellant and he had voluntarily accepted the  money  as
bribe from PW2. Hence, the appeal of the appellant was  partly  allowed  and
the conviction of the appellant under Section 7 of the Act  was  set  aside.
However, his conviction under Section 13(1)(d)read with Section 13(2)of  the
Act was confirmed and the order of sentence was modified. Aggrieved  by  the
judgment of conviction and sentence, this  appeal  has  been  filed  by  the
appellant, urging certain legal grounds for setting aside the  judgment  and
order of conviction and sentence imposed upon him.

 It is the contention of the learned counsel  on  behalf  of  the  appellant
that both in the First Information Statement and in the F.I.R, the  name  of
the appellant is not mentioned, specifically, in regard  to  the  demand  of
the bribe made by him from the complainant PW2. However, it is  specifically
mentioned in the complaint that the person who had demanded  the  bribe  was
the "station writer" of  the  Fort  Police  Station.  It  has  been  further
contended by the learned counsel for the appellant that  the  appellant  has
never been assigned the work of the "station writer" at the  police  station
and  further  urged  that  the  prosecution  has  failed  to   produce   any
documentary  evidence  to  prove  the  same   against   the   appellant   to
substantiate the charge against him.


  It  is  further  contended  by  the  learned  counsel  that  the  de-facto
complainant had deposed before the Special  Judge  in  this  case  that  one
Ajith, was the  "station  writer"  of  the  Fort  Police  Station,  who  had
demanded the bribe from him for the return of the seized  articles  to  him.
It is further stated that PW4, who is the Sub-Inspector of the  Fort  Police
Station had deposed that there was  an  "additional  station  writer"  named
Ajith in the police station, which was not considered by  the  courts  below
while recording the findings of the guilt of the appellant  on  the  charges
framed against him.

 It has been further contended by the  learned  counsel  on  behalf  of  the
appellant that as per the complaint, Rs.1500/-  was  allegedly  demanded  by
the appellant as bribe  money  from  the  complainant.  However,  the  money
allegedly paid and recovered from the appellant was  only  Rs.200/-.  Hence,
there is a huge disparity between the money allegedly demanded and  paid  to
the appellant by the complainant.

 Further, it is contended that there existed several contradictions  in  the
deposition of the other prosecution witnesses, particularly,  PW1  and  PW2,
who are the star  witnesses  of  the  prosecution  case,  as  they  did  not
subscribe to the prosecution version of  the  story  at  all.  It  has  been
further contended that the prosecution had only examined nine out of the  16
witnesses mentioned  in  the  charge  sheet.  Further,  the  conviction  and
sentence was imposed for the alleged offence  under  Section  13(1)(d)  read
with Section 13 (2) of the Act by the High  Court  without  considering  the
relevant aspect of the case that in the absence of demand of  gratification,
the charge under Section 13(1)(d) of the  Act  is  wholly  unsustainable  in
law.

  On the other hand, it has been contended by the learned counsel on  behalf
of the respondent that the appellant is  the  station  writer  of  the  Fort
Police Station, a fact which has been stated by  the  prosecution  witnesses
in the case, which has been upheld by both the Trial Court  as  well  as  by
the High Court on proper appreciation of the evidence on record.


  It has been further contended by the learned counsel that  the  trap  laid
down by the Deputy Superintendent of Police, Vigilance  and  Anti-Corruption
Bureau, Special Investigation Unit, Thiruvanathapuram, had resulted  in  the
capturing of the appellant and the phenolphthalein test was  conducted  then
and there itself. The result of the test was positive for each  one  of  the
Rs.100/- notes. It has been further contended by him that a  sample  of  the
appellant's shirt was also taken as evidence as he had  kept  the  notes  in
his pocket. The test result for the same was  also  found  to  be  positive.
Further, when the trap was being  laid  to  catch  the  appellant,  PW2  was
specifically told by  the  officer  of  the  Vigilance  and  Anti-Corruption
Bureau, Special Investigation  Unit  to  handover  the  bribe-money  to  the
appellant only when he would ask for the same. Hence,  the  appellant  would
have received the money only when he would  have  asked  for  the  same  and
therefore, there was demand and acceptance on the part of the appellant.

  On the basis of the aforesaid rival legal contentions urged on  behalf  of
the parties, we have to find out whether  the  concurrent  findings  on  the
charge under Section 13(1)(d)  of  the  Act,  recorded  by  the  High  Court
against the appellant is legal and valid and whether the judgment and  order
of conviction and sentence under Section 13(2) of the Act, imposed upon  the
appellant by the High Court, warrants interference by this Court.

  With reference to the abovementioned  rival  legal  contentions  urged  on
behalf of the parties and the evidence  on  record,  we  have  examined  the
concurrent finding of fact on the charge made against the appellant. It  has
been  continuously  held  by  this  Court  in  a  catena  of   cases   after
interpretation of the provisions of Sections 7 and 13(1)(d) of the Act  that
the demand of illegal gratification by the accused is the sine qua  non  for
constituting an offence under the provisions of the Act.  Thus,  the  burden
to prove the accusation against the appellant  for  the  offence  punishable
under Section 13(1)(d) of the Act with regard to the acceptance  of  illegal
gratification from the complainant PW2, lies on the prosecution.

  In the present case, as has been rightly held by the High Court, there  is
no demand for the illegal gratification on the part of the  appellant  under
Section 7 of the Act. Therefore, in our view, the question of acceptance  of
illegal gratification from the complainant under the  provision  of  Section
13(1)(d) of the Act also does not arise. The learned Special Judge has  come
to the erroneous conclusion that the appellant had received  the  money  and
therefore he had recorded the finding that there was demand  and  acceptance
of the bribe money on the part of the appellant and convicted and  sentenced
the appellant. However, the High Court on  re-appreciation  of  evidence  on
record has held that the demand alleged to have been made by  the  appellant
from the complainant PW2, was not proved and that  part  of  the  conviction
and sentence was rightly set aside in the impugned  judgment.  However,  the
High Court has erroneously affirmed the conviction for the  alleged  offence
under Section 13(1)(d) read with  Section 13(2) of the Act, although as  per
law, demand by the appellant under Section 7 of the Act,  should  have  been
proved to sustain the charge under Section 13(1)(d) of the Act.

  Further, the fact that out of Rs.1500/- that  was  allegedly  demanded  as
bribe money from the complainant, an amount of only  Rs.250/-  was  paid  by
him, out of which the appellant allegedly managed to return Rs.50/-  to  the
complainant, since he had no money left, makes us pause and ponder over  the
facts and circumstances of the case and casts a serious shadow of  doubt  on
the sequence of events as narrated by the prosecution.

  Further, none of the prosecution witnesses have actually  deposed  in  the
case that the appellant was the person who had  demanded  and  accepted  the
bribe from the complainant and since  PW2  has  materially  turned  hostile,
therefore, neither the demand aspect nor the acceptance of the  bribe  money
can be verified from any other witnesses of the  prosecution.  Further,  PW1
in his deposition before the Special Judge has also not supported  the  case
of the prosecution, as he had refused to acknowledge the  ownership  of  the
tea shop, on the premises of which the bribe money  was  allegedly  accepted
by the appellant from the complainant. Hence, it is safe  to  say  that  the
prosecution has failed  to  prove  beyond  any  reasonable  doubt  that  the
appellant had accepted the illegal gratification from the complainant  under
Section 13(1)(d) of the Act. In support of the same, the learned counsel  on
behalf of the appellant has rightly placed reliance  upon  the  decision  of
this Court in B. Jayaraj v. State of A.P.[1], which reads thus:-
"8. ......there is no other evidence to prove that the accused had made  any
demand, the evidence of PW 1 and the contents of Ext. P-11 cannot be  relied
upon to come to the conclusion that the above material  furnishes  proof  of
the demand allegedly made by the accused. We  are,  therefore,  inclined  to
hold that the learned trial court as well as the High Court was not  correct
in holding the demand alleged to be made by the accused as proved. The  only
other material available is the recovery of the tainted currency notes  from
the possession of the accused. In fact such possession is  admitted  by  the
accused himself. Mere possession and recovery of  the  currency  notes  from
the accused without proof of demand will not bring home  the  offence  under
Section 7. The above also will be conclusive insofar as  the  offence  under
Sections 13(1)(d)(i) and (ii) is concerned as in the absence  of  any  proof
of demand for illegal gratification, the use of corrupt or illegal means  or
abuse of position as a public  servant  to  obtain  any  valuable  thing  or
pecuniary advantage cannot be held to be established"
                                               (emphasis laid by this Court)

 Now, coming to the legality  of  the  conviction  of  the  appellant  under
Section 13(2) of the Act by the High Court in its judgment, the same  cannot
be allowed to sustain in law, as the prosecution has  failed  to  prove  the
demand of illegal gratification made by the appellant from  the  complainant
and  acceptance  of  the  bribe  money  by  the  appellant.   Further,   the
phenolphthalein test cannot be said to be a  conclusive  proof  against  the
appellant, as the colour of the solution with regard to  the  other  samples
were pink and had remained so throughout.  However,  the  lime  solution  in
which the appellant's hands were dipped in,  did  not  show  the  same  pink
colour. The reason assigned by the Trial Court  is  that  the  colour  could
have faded by the lapse of time. The said explanation  of  the  Trial  Court
cannot be accepted by us in view of the fact that the colour  of  the  other
samples taken by the Investigation Officer after the completion of the  trap
laid against  the  appellant  had  continued  to  retain  the  pink  colour.
Moreover, the sample of the shirt worn by the appellant which  was  produced
before the Trial Court did not show any colour change on the shirt's  pocket
section, where  the  bribe  money  was  allegedly  kept  by  him  after  the
complainant had allegedly given him the bribe money.


 Thus, on a careful perusal of the entire evidence on record along with  the
statement  of  the  prosecution  witnesses,  we  have  to  hold   that   the
prosecution has failed to satisfy us beyond all reasonable  doubt  that  the
charge levelled against the appellant is proved.




 The decision of this  Court  referred  to  supra  upon  which  the  learned
counsel for the appellant has rightly placed reliance  upon  and  the  ratio
laid down in the above case, aptly applies to the  fact  situation  on  hand
and therefore, we have to grant the relief  to  the  appellant  by  allowing
this appeal.


 For the aforesaid  reasons,  the  appeal  is  allowed.  Since,  the  charge
against the appellant is not proved, the  conviction  and  sentence  imposed
upon the accused-appellant by the High Court  under  Section  13(1)(d)  read
with Section 13(2) of the  Act  is  set  aside.  The  jail  authorities  are
directed to release the appellant forthwith, if he is  not  required  to  be
detained in any other case.


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

                           [V. GOPALA GOWDA]



..................................................................J.
  [R. BANUMATHI]
 New Delhi,
 January 29, 2015
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[1]    (2014) 13 SCC 55