LAW FOR ALL

Sunday, February 7, 2016

trademark ‘BLENDERS PRIDE’ through its licensee M/s Seagram Company Limited in the year 1973. According to respondent No.4, on account of extensive sales and marketing worldwide, the trademark ‘BLENDERS PRIDE’ has come to acquire a tremendous reputation in various countries including India. In order to secure its proprietary rights in the said trademark, respondent No.4 had applied for and was granted registration of the said trademark in more than 50 countries and has been selling ‘BLENDERS PRIDE’ whisky in India through its licensee Seagram India Private Limited since 1995. It has also applied for registration of the trademark ‘BLENDERS PRIDE’ under two applications in class 33 which are pending registration. The appellant’s application for registration of an identical trademark ‘BLENDERS PRIDE’ was advertised in the Trademarks Journal Mega-I. This journal was published on 7th October, 2003. Respondent No.4 had filed Form TM-44 seeking extension of one month’s time for filing its notice of opposition against the appellant’s application on 6.1.2004, i.e. within the statutory period of three months. On 19.1.2004, respondent No.4 had filed its notice of opposition before the Trade Marks Registry, New Delhi and the same was numbered as DEL-160325. On 16.2.2004, the Trade Marks Registry issued a notice to the appellant inviting its counter statement to the said notice of opposition, and had stated that if the counter statement was not filed within time, the trademark application would be deemed to be abandoned. However, when the matter stood thus, respondent No.4 came to know on 20.1.2005 that a trademark registration certificate bearing No.618414 had been issued to the appellant on 13.1.2004 itself. Immediately, however, through its attorneys, respondent No.4 informed the Trade Marks Registry about the pending opposition proceedings which were yet to be disposed of.= No argument was made in Whirlpool’s case that Section 57(4) would be independent of Section 125(1) for the reasons stated hereinabove. Further, it is clear that one of the parties to the suit for passing off in the said decision applied for rectification, unlike the present factual scenario. For these two reasons also the said judgment would have no application to the facts of the present case. Also, it is not clear from the facts stated in the said judgment as to how Section 107(1) would be attracted. A suit for passing off alone had been filed – an amendment application to add the relief of infringement of trademark was pending. This is perhaps why this Court referred to the said amendment application and said that if it were to be granted it would relate back to the date of the suit itself. The defendant in the said suit obviously could not have filed a written statement taking up a plea of invalidity of the registered trademark before an amendment application of the plaintiff adding the relief of infringement had been allowed. For this reason also we find that the aforesaid judgment cannot be said to have laid down any principle of law touching upon Sections 125 and 57 of the Act.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 430 OF 2016
(Arising out of S.L.P. (Civil) No.14444 of 2009)

JAGATJIT INDUSTRIES LIMITED …APPELLANT

VERSUS

THE INTELLECTUAL PROPERTY
APPELLATE BOARD & ORS. ...RESPONDENTS

J U D G M E N T

R.F. Nariman, J.

Leave granted.

The respondent No.4 is a corporation incorporated under the laws of the
United States of America. It is an ultimate subsidiary of Pernord Ricard
S.A., which is engaged in the business of manufacturing and marketing a
variety of alcoholic beverages worldwide. It claims that it has coined
and adopted the trademark ‘BLENDERS PRIDE’ through its licensee M/s Seagram
Company Limited in the year 1973. According to respondent No.4, on account
of extensive sales and marketing worldwide, the trademark ‘BLENDERS PRIDE’
has come to acquire a tremendous reputation in various countries including
India. In order to secure its proprietary rights in the said trademark,
respondent No.4 had applied for and was granted registration of the said
trademark in more than 50 countries and has been selling ‘BLENDERS PRIDE’
whisky in India through its licensee Seagram India Private Limited since
1995. It has also applied for registration of the trademark ‘BLENDERS
PRIDE’ under two applications in class 33 which are pending registration.
The appellant’s application for registration of an identical trademark
‘BLENDERS PRIDE’ was advertised in the Trademarks Journal Mega-I. This
journal was published on 7th October, 2003. Respondent No.4 had filed Form
TM-44 seeking extension of one month’s time for filing its notice of
opposition against the appellant’s application on 6.1.2004, i.e. within the
statutory period of three months. On 19.1.2004, respondent No.4 had filed
its notice of opposition before the Trade Marks Registry, New Delhi and the
same was numbered as DEL-160325. On 16.2.2004, the Trade Marks Registry
issued a notice to the appellant inviting its counter statement to the said
notice of opposition, and had stated that if the counter statement was not
filed within time, the trademark application would be deemed to be
abandoned. However, when the matter stood thus, respondent No.4 came to
know on 20.1.2005 that a trademark registration certificate bearing
No.618414 had been issued to the appellant on 13.1.2004 itself.
Immediately, however, through its attorneys, respondent No.4 informed the
Trade Marks Registry about the pending opposition proceedings which were
yet to be disposed of.

Since no communication was received from the Registry, respondent No.4
filed a writ petition before the Delhi High Court being Writ Petition Nos.
2712 and 2713 of 2005. Meanwhile, on 16.2.2005, a show cause notice was
issued by the Registrar under Section 57(4) of the Trade Marks Act, 1999 to
the appellant, in which it was said that the registration certificate had
been issued wrongly, and since the said trademark was wrongly on the
register of trademarks, it was proposed to rectify the register under
Section 57(4) as per representation made by the attorneys of respondent
No.4.

Meanwhile, the writ petition filed by respondent No.4 to remove the
trademark from the register came up for hearing and was disposed of by an
order dated 2.3.2005 with the observation that the Registrar shall proceed
to decide the issues arising out of the show cause notice as expeditiously
as possible and in accordance with law.

Thereafter, on 14.3.2005, a detailed reply was filed by the appellant
herein before the Registrar, in which it took the plea that the show cause
notice itself was not maintainable as it was issued by the Registrar of
Bombay and not New Delhi. Further, it was stated that the opposition filed
by respondent No.4 on 19.1.2004 was clearly beyond time as it was not filed
within three months from the relevant date, which is 6.1.2004, and it was
thereafter pleaded that the show cause notice be withdrawn.

Meanwhile, on 14.1.2005, a suit for infringement of its trademark had been
filed by the appellant herein in the District Court of Jalandhar inter alia
against the licensee of respondent No.4, namely, Seagram Distilleries
Private Limited. On 21.4.2005, Seagram India Private Limited filed a
written statement in which it took up a plea that the plaintiff’s
registration is under challenge and since rectification proceedings are sub-
judice before the Registrar of Trademarks, the suit is liable to be stayed
till final disposal of the said rectification proceedings. It further went
on to plead that the registration obtained by the plaintiff (i.e. the
appellant herein) is void ab initio and confers no right on the plaintiff
and, therefore, questioned the very maintainability of the suit for
infringement.

While matters stood thus, after considering the reply of the appellant, the
Registrar, on 26.5.2005, referred to the show cause notice dated 16.2.2005
and the reply of the appellant thereof and stated that the impugned mark
was registered by inadvertence/error and that it was proposed to rectify
the register under Section 57(4) of the Trade Marks Act, 1999 by removing
the mark referred to. By the self same letter the appellant was directed to
return the registration certificate wrongly issued forthwith, and further
directed not to use the said certificate of registration in respect of the
above-mentioned trademark in any manner for any purpose and in any
proceedings.

A Writ Petition bearing Nos.10080-81 of 2005 was filed by the appellant
against the aforesaid order, and an interim order of stay was obtained
against the said order on 31.5.2005. Ultimately, on 13.9.2005, the Delhi
High Court directed the Registrar to dispose of the proceedings before it
on or before 16.11.2005.

The Registrar, by his order dated 14.11.2005, recalled the show cause
notice issued, stating that he had no jurisdiction to proceed in the matter
inasmuch as, under Section 125 of the Act, the proceedings could only
legally continue before the Appellate Board and not before him.

In an appeal filed before the Appellate Board, the Appellate Board, by its
judgment dated 6.10.2006, reversed the Registrar’s order, and held that the
notice of opposition had been taken on record and numbered, which clearly
showed that Form TM-44 filed by respondent No.4 for extension of time had
been accepted by the Registrar. It is only after such acceptance that a
show cause notice had been issued to the appellant herein calling upon them
to file their counter-statement. This being so, the registration of the
trademark on 13.1.2004, that is even before the expiry of the extended one
month, would obviously be contrary to Section 23 of the Act and would
therefore be invalid in law. Significantly, the Appellate Board held that
when the show cause notice was issued on 16.2.2005, Seagram had not yet
filed its counter-statement as it was not even served with the suit papers,
and that, since the suit had not been filed against respondent no.4, but
had only been filed against Seagram, Section 125 would have no application
and that therefore the Registrar’s order dated 14.11.2005 would therefore
have to be set aside. The Registrar was, therefore, directed to
expeditiously decide the opposition proceedings under Section 21 of the
Act.

Against the order passed by the Appellate Board, the appellant herein filed
a Writ Petition in the Delhi High Court being Writ Petition (Civil)
No.16242/2006. The learned Single Judge, by his judgment dated 9.5.2008,
set aside the aforesaid Appellate Board order and sustained the order dated
14.11.2004 passed by the Registrar. According to the learned Single Judge,
Section 125 of the Act would apply and would therefore bar proceedings
before the Registrar. The learned Single Judge, therefore, following the
judgment of this Court in Whirlpool Corporation v. Registrar of Trade
Marks, Mumbai and others, (1998) 8 SCC 1, held that the Section would apply
as the defendant in the infringement suit had filed a written statement
questioning the validity of the trademark, and that this being so, the non
obstante clause in Section 25(1) would bar proceedings under Section 57 of
the Act before the Registrar.

In an appeal before the Division Bench, the Division Bench set aside the
learned Single Judge, holding that Section 23(1) of the Act had been
violated, and that Section 125 would not apply on the facts of this case as
it is the duty of the Registrar to maintain the purity of the register, as
has been held in Hardie Trading Ltd. and another v. Addisons Paint &
Chemicals Ltd., (2003) 11 SCC 92. It was further held that the power of
the Registrar to correct his own mistakes under Section 57(4) of the Act is
wholly independent of the right of a party to make or not to make an
application for rectification of the register, referred to in Section 125.
If Section 125 were to be applied, the effect would be that an error
committed by the Registrar may remain on the register if the defendant,
after raising a plea of invalidity in a suit for infringement, chooses not
to proceed with the filing of a rectification before the Appellate Board.
In such event, the purity of the register would not be maintained, a result
which could not have been envisaged if Section 125 is to be correctly
interpreted. The Division Bench finally held that the grant of
registration on 13.1.2004 was itself invalid being contrary to Section
23(1) of the Act. Ultimately, the appeal was allowed in the following
terms:

“Section 23(1) of the Act clearly mandates that only after the statutory
period for filling opposition has expired, a registration certificate could
be granted. The Appellant had filed an application for extension of time in
filing opposition to the registration of trade mark of the 4th Respondent
and the notice of opposition was taken on record by the Registrar. The
above fact is evident from the show cause dated 16th February, 2004 and the
interim order of 26th May, 2005. In the absence of an order rejecting such
application, it cannot be held that time for filing opposition had expired.
The entire issue was considered by the Appellate Board which is a tribunal
as per Section 2(ze) of the Act. The tribunal had ultimately come to the
conclusion that the registration was in contravention of the provisions of
the Act and directed the Registrar to decide the application of the 4th
Respondent on merits.

After taking into consideration the above facts and contentions of the
parties we hold that no injustice has been done by the Appellate Board in
directing de novo hearing of the case. Consequently the appeal is allowed
and the order of the learned single Judge is set aside. No order as to
costs.” [at para 22 and 23]

Smt. Prathiba Singh, learned senior advocate appearing on behalf of the
appellant herein, essentially argued that though the application for
extension of time by one month had been filed before the period of three
months ended, yet as the Registrar had not passed any order condoning the
delay, it is obvious that the period for filing the opposition had ended on
6.1.2004. She also argued that Section 21 of the Act speaks of the
Registrar “allowing” the application made to him in the prescribed manner,
and that therefore the expression “allows” in Section 21(1) would make it
clear that there has to be an order in writing by the Registrar, and no
implied order granting extension is therefore contemplated by the Section.
Therefore, the registration certificate issued on 13.1.2004 was in
accordance with law. Further, as the show cause notice dated 16.2.2005 had
been issued from Bombay, it was clearly without jurisdiction. Therefore,
in view of a written statement having been filed in the infringement suit
filed by the appellant’s licensee taking up the plea of invalidity of
registration, Section 125 applied on all fours, and the judgment of this
Court in Whirlpool Corporation (supra) would apply to render rectification
proceedings before the Registrar non est. She also argued that the fact
that Austin Nichols is not a defendant in the infringement suit would also
make no difference inasmuch as its licensee Seagram is a defendant and has
taken a plea as to invalidity of the registered trademark. Seagram is
merely enforcing Austin Nichols’ rights and the authorized signatory of
both parties happens to be the same. Thus, it would make no difference that
the defendant in the infringement suit is not Austin Nichols. She also
argued that the suo motu powers of the Registrar under Section 57(4) of the
Act are taken away by Section 125(1) of the Act inasmuch as the non
obstante clause covers the whole of Section 57. Where the legislature
intends to specify only a sub-section, it has made it clear in express
language to that effect. For that purpose, she referred to Section 107(1)
of the Trade and Merchandise Marks Act, 1958 which refers to the whole of
Section 46, the whole of Section 56, and only Section 47 sub-section (4).
She has also argued that in point of fact, though styled as a proceeding
under Section 57(4), being at the behest of Austin Nichols, in reality it
was not such a proceeding. She referred copiously to the Registrar’s order
dated 14.11.2005 as well as to the judgment of the Single Judge dated
9.5.2008, and said that since the show cause notice itself was without
jurisdiction, these orders were correct and ought to be reinstated.

Shri Sudhir Chandra, learned senior counsel appearing on behalf of
respondent No.4, supported the judgment of the Division Bench of the Delhi
High Court. He argued before us that when the Registrar issued the letter
dated 16.2.2004 under Section 21(2) of the Act and called for a counter-
statement under the said Section from the appellant herein to the notice of
opposition filed by respondent No.4, it was clear that the extension of
time applied for within time had been allowed. He referred in particular
to Section 131 of the Act and stated that the Registrar should be satisfied
that there is sufficient cause for extending time and if he is so
satisfied, he will not be required to hear the parties before disposing of
an application for extension of time. Further, no appeal shall lie from
such an order. He also argued that as respondent No.4 was not a party to
the suit for infringement, Section 125 would have no application to the
facts of this case. He further argued that suo motu powers of the Registrar
under Section 57(4) of the Act were not taken away by Section 125 of the
Act, stressing that Section 125 of the Act concerned itself with “an
application for rectification of the register.” He referred us to the
definition of “Tribunal” under Section 2(ze) and stated that where a
proceeding is pending before the Registrar, it would necessarily be a
“Tribunal” for all purposes under the Act. He argued that the judgment in
Hardie’s case (supra) was correctly referred to and relied upon by the
Delhi High Court and that the purity of the register would have to be
maintained by the Registrar as an independent duty cast upon him under the
Act. According to him, the judgment in Whirlpool’s case actually supported
his client’s case, and in any case, on the facts therein, it was clear that
Section 125 would have applied, unlike in the facts of the present case.

We have heard learned counsel for the parties. Before embarking upon a
discussion on the merits of the case, it is necessary to set out the
various statutory provisions contained in the Trade Marks Act, 1999:-

“Section 2 - Definitions and interpretation

In this Act, unless the context otherwise requires,--

(ze) "tribunal" means the Registrar or, as the case may be, the Appellate
Board, before which the proceeding concerned is pending;

Section 21 - Opposition to registration

(1) Any person may, within three months from the date of the advertisement
or re-advertisement of an application for registration or within such
further period, not exceeding one month in the aggregate, as the Registrar,
on application made to him in the prescribed manner and on payment of the
prescribed fee, allows, give notice in writing in the prescribed manner to
the Registrar, of opposition to the registration.

(2) The Registrar shall serve a copy of the notice on the applicant for
registration and, within two months from the receipt by the applicant of
such copy of the notice of opposition, the applicant shall send to the
Registrar in the prescribed manner a counter-statement of the grounds on
which he relies for his application, and if he does not do so he shall be
deemed to have abandoned his application.

(3) If the applicant sends such counter-statement, the Registrar shall
serve a copy thereof on the person giving notice of opposition.

(4) Any evidence upon which the opponent and the applicant may rely shall
be submitted in the prescribed manner and within the prescribed time to the
Registrar, and the Registrar shall give an opportunity to them to be heard,
if they so desire.

(5) The Registrar shall, after hearing the parties, if so required, and
considering the evidence, decide whether and subject to what conditions or
limitations, if any, the registration is to be permitted, and may take into
account a ground of objection whether relied upon by the opponent or not.

(6) Where a person giving notice of opposition or an applicant sending a
counter-statement after receipt of a copy of such notice neither resides
nor carries on business in India, the Registrar may require him to give
security for the costs of proceedings before him, and in default of such
security being duly given, may treat the opposition or application, as the
case may be, as abandoned.

(7) The Registrar may, on request, permit correction of any error in, or
any amendment of, a notice of opposition or a counter-statement on such
terms as he thinks just.

Section 23 - Registration

(1) Subject to the provisions of section 19, when an application for
registration of a trade mark in Part A or Part B of the register has been
accepted and either--

(a) the application has not been opposed and the time for notice of
opposition has expired; or

(b) the application has been opposed and the opposition has been decided in
favour of the applicant,

the Registrar shall, unless the Central Government otherwise directs,
register the said trade mark in Part A or Part B of the register, as the
case may be, and the trade mark when registered shall be registered as of
the date of the making of the said application and the date shall, subject
to the provisions of section 131, be deemed to be the date of registration.

(2) On the registration of a trade mark, the Registrar shall issue to the
applicant a certificate in the prescribed form of the registration thereof,
sealed with the seal of the Trade Marks Registry.

(3) Where registration of a trade mark is not completed within twelve
months from the date of the application by reason of default on the part of
the applicant, the Registrar may, after giving notice to the applicant in
the prescribed manner, treat the application as abandoned unless it is
completed within the time specified in that behalf in the notice.

(4) The Registrar may amend the register or a certificate of registration
for the purpose of correcting a clerical error or an obvious mistake.

57. Power to cancel or vary registration and to rectify the register.—

(1) On application made in the prescribed manner to the Appellate Board
or to the Registrar by any person aggrieved, the tribunal may make such
order as it may think fit for cancelling or varying the registration of a
trade mark on the ground of any contravention, or failure to observe a
condition entered on the register in relation thereto.

(2) Any person aggrieved by the absence or omission from the register of
any entry, or by any entry made in the register without sufficient cause,
or by any entry wrongly remaining on the register, or by any error or
defect in any entry in the register, may apply in the prescribed manner to
the Appellate Board or to the Registrar, and the tribunal may make such
order for making, expunging or varying the entry as it may think fit.

(3) The tribunal may in any proceeding under this section decide any
question that may be necessary or expedient to decide in connection with
the rectification of the register.

(4) The tribunal, of its own motion, may, after giving notice in the
prescribed manner to the parties concerned and after giving them an
opportunity of being heard, make any order referred to in sub-section (1)
or sub-section (2).

(5) Any order of the Appellate Board rectifying the register shall direct
that notice of the rectification shall be served upon the Registrar in the
prescribed manner who shall upon receipt of such notice rectify the
register accordingly.

Section 124 - Stay of proceedings where the validity of registration of the
trade marks is questioned, etc.

(1) Where in any suit for infringement of a trade mark--

(a) the defendant pleads that registration of the plaintiff's trade mark is
invalid; or

(b) the defendant raises a defence under clause (e) of sub-section (2) of
section 30 and the plaintiff pleads the invalidity of registration of the
defendant's trade mark,

the court trying the suit (hereinafter referred to as the court), shall,--

(i) if any proceedings for rectification of the register in relation to the
plaintiff's or defendant's trade mark are pending before the Registrar or
the Appellate Board, stay the suit pending the final disposal of such
proceedings;

(ii) if no such proceedings are pending and the court is satisfied that the
plea regarding the invalidity of the registration of the plaintiff's or
defendant's trade mark is prima facie tenable, raise an issue regarding the
same and adjourn the case for a period of three months from the date of the
framing of the issue in order to enable the party concerned to apply to the
Appellate Board for rectification of the register.

(2) If the party concerned proves to the court that he has made any such
application as is referred to in clause (b) (ii) of sub-section (1) within
the time specified therein or within such extended time as the court may
for sufficient cause allow, the trial of the suit shall stand stayed until
the final disposal of the rectification proceedings.

(3) If no such application as aforesaid has been made within the time so
specified or within such extended time as the court may allow, the issue as
to the validity of the registration of the trade mark concerned shall be
deemed to have been abandoned and the court shall proceed with the suit in
regard to the other issues in the case.

(4) The final order made in any rectification proceedings referred to in
sub-section (1) or sub-section (2) shall be binding upon the parties and
the court shall dispose of the suit conformably to such order in so far as
it relates to the issue as to the validity of the registration of the trade
mark.

(5) The stay of a suit for the infringement of a trade mark under this
section shall not preclude the court from making any interlocutory order
(including any order granting an injunction directing account to be kept,
appointing a receiver or attaching any property), during the period of the
stay of the suit.

Section 125 - Application for rectification of register to be made to
Appellate Board in certain cases

(1) Where in a suit for infringement of a registered trade mark the
validity of the registration of the plaintiff's trade mark is questioned by
the defendant or where in any such suit the defendant raises a defence
under clause (e) of sub-section (2) of section 30 and the plaintiff
questions the validity of the registration of the defendant's trade mark,
the issue as to the validity of the registration of the trade mark
concerned shall be determined only on an application for the rectification
of the register and, notwithstanding anything contained in section 47 or
section 57, such application shall be made to the Appellate Board and not
to the Registrar.

(2) Subject to the provisions of sub-section (1), where an application for
rectification of the register is made to the Registrar under section 47 or
section 57, the Registrar may, if he thinks fit, refer the application at
any stage of the proceedings to the Appellate Board.

Section 131 - Extension of time

(1) If the Registrar is satisfied, on application made to him in the
prescribed manner and accompanied by the prescribed fee, that there is
sufficient cause for extending the time for doing any act (not being a time
expressly provided in this Act), whether the time so specified has expired
or not, he may, subject to such conditions as he may think fit to impose,
extend the time and inform the parties accordingly.

(2) Nothing in sub-section (1) shall be deemed to require the Registrar to
hear the parties before disposing of an application for extension of time,
and no appeal shall lie from any order of the Registrar under this
section.”

The first important thing to note in this case is that respondent No.4
sought an extension of one month’s time for filing its notice of opposition
within the three month period granted to it under Section 21(2) and did
this in the prescribed statutory Form TM-44 stating that the reason for
extension would be that they have to seek legal advice before filing the
notice of opposition. The other important fact to notice is that the notice
of opposition dated 19.1.2004 was made within the extended period of one
month, and was expressly taken on record by the Registrar, as is reflected
in the Registrar’s letter dated 16.2.2004. Since this letter is of crucial
importance in deciding this case, it is set out in full:-

“REGD. POST A.D.

No. TOP/ Date: 16- Feb-2004

From: The Registrar of Trade Marks

To,

M/s. The ACME Co.

Delhi-110001

Subject: Opposition No. 160325 to Application No. 618414 in Class 33 in
the name of JAGATJIT INDUSTRIES LIMITED

Shriman/ Mahoday/ Madam,

In pursuance of section 21(2) of Trade & Merchandise Marks Act, 1999, I am
directed by the Registrar of Trade Marks to enclose herewith a copy of the
Notice of opposition filed to the application noted as above.

In this connection I am to invite your attention to Section 21(2) of the
Act and also to Rule 48 of the Trade and Merchandise Marks Rule, 2002 point
out that a counterstatement of the grounds, on which you/ the applicant
rely for your/ their application should be filed at this office in
triplicate on form TM-6 within two months from the receipt by you of the
copy of the notice of opposition. The counterstatement should also set out
what facts if any, alleged in the notice of opposition are admitted by you/
the applicants.

I am further directed to inform you that if such a counterstatement is not
received in this Registry within the aforesaid time you that applicants
will be deemed to have abandoned your/ their application (vide section
21(2) of the Trade and Merchandise Marks Act, 1999).

Yours faithfully,

6227 ASSISTANT EXAMINER OF TRADE MARKS

5.11.04 Dated: 16-Feb-2004

No. TOP/

Copy forwarded for information to REMFRY & SGAR

Sd/-

ASSISTANT EXAMINER OF TRADE MARKS

Dated: 16-Feb.2004.”

16. A perusal of this letter shows that the notice of opposition was
taken on record. This could not have been done unless time had been
extended by one month, as the said notice of opposition was filed only on
19.1.2004, i.e. within the 30 days period after three months were over on
6.1.2004. Though Section 131 of the Act refers to the Registrar’s
satisfaction and refers to conditions which he may think fit to impose, it
is clear that he need not pass a separate order in every case if he wishes
to extend the time. The decision of the Madras High Court being M/s Allied
Blenders and Distillers Private Limited, Mumbai v. Intellectual Property
Appellate Board, Chennai & Ors., AIR 2009 Madras 196 was referred to, in
particular paragraph 27 thereof, to show that Section 131 cannot apply to
the facts of this case because the said sub-section will not apply where
time to do a thing is expressly provided in this Act. It is true that time
to file a notice of opposition is to be done within the time that is
expressly provided in Section 21(1) and that Section 131 of the Act would
not therefore apply. However, Section 131 is a pointer to the fact that
the extension of time by the Registrar is a ministerial act for which no
hearing is required.

17. Smt. Prathiba Singh also argued that the expression “allows” in
Section 21(1) would further show that there has to be an order in writing
granting an extension of time and no such order has been produced in the
present case. She also cited M. Mazharuddin Ali v. Govt. of A.P., (2000)
10 SCC 383, at paragraphs 7 and 11, to show that in the context of
relaxation of Rules made under Article 309, a specific relaxation by a
written order is necessary or else there can be said to be no relaxation of
such Rules in law. We may note that the aforesaid judgment deals with the
Governor’s executive power under Article 166 of the Constitution. Such
power can only be exercised in writing and in the manner prescribed by the
said Article. Besides, the Governor’s power is an executive power and not
a quasi-judicial one, as is the power of the Registrar in the present case.
This judgment, therefore, does not further case of the appellant. Also, it
is settled law that procedural provisions are to be construed in a manner
that advances and does not subvert the cause of justice. This Court in
paragraphs 28 and 29 in Kailash v. Nanhku, (2005) 4 SCC 480, has held as
under:-

“All the rules of procedure are the handmaid of justice. The language
employed by the draftsman of processual law may be liberal or stringent,
but the fact remains that the object of prescribing procedure is to advance
the cause of justice. In an adversarial system, no party should ordinarily
be denied the opportunity of participating in the process of justice
dispensation. Unless compelled by express and specific language of the
statute, the provisions of CPC or any other procedural enactment ought not
to be construed in a manner which would leave the court helpless to meet
extraordinary situations in the ends of justice. The observations made by
Krishna Iyer, J. in Sushil Kumar Sen v. State of Bihar [(1975) 1 SCC 774]
are pertinent: (SCC p. 777, paras 5-6)

“The mortality of justice at the hands of law troubles a judge's conscience
and points an angry interrogation at the law reformer.

The processual law so dominates in certain systems as to overpower
substantive rights and substantial justice. The humanist rule that
procedure should be the handmaid, not the mistress, of legal justice
compels consideration of vesting a residuary power in judges to act ex
debito justitiae where the tragic sequel otherwise would be wholly
inequitable. … Justice is the goal of jurisprudence — processual, as much
as substantive.”
In State of Punjab v. Shamlal Murari [(1976) 1 SCC 719 : 1976 SCC (L&S)
118] the Court approved in no unmistakable terms the approach of moderating
into wholesome directions what is regarded as mandatory on the principle
that: (SCC p. 720)

“Processual law is not to be a tyrant but a servant, not an obstruction but
an aid to justice. Procedural prescriptions are the handmaid and not the
mistress, a lubricant, not a resistant in the administration of justice.”

In Ghanshyam Dass v. Dominion of India [(1984) 3 SCC 46] the Court
reiterated the need for interpreting a part of the adjective law dealing
with procedure alone in such a manner as to subserve and advance the cause
of justice rather than to defeat it as all the laws of procedure are based
on this principle.” [at paras 28 and 29]

18. It is thus clear that time has been extended by the Registrar, as is
evidenced by the letter dated 16.2.2004. Therefore, it is clear that any
registration certificate granted prior to the 30 days extended period from
6.1.2004 would be violative of Section 23(1) of the Act. In this view of
the matter, the Appellate Board and the Division Bench are clearly right in
declaring that the registration certificate, having been issued on
13.1.2004, would be violative of Section 23(1)(a), and the register would
have to be rectified by deleting the said trademark therefrom.

19. We may dispose of an argument made by Smt. Prathiba Singh that the
show cause notice dated 16.2.2005 under Section 57(4) of the Act was
without jurisdiction as it was issued by the Registrar in Bombay and not by
the authorities in Delhi. As the application for registration of the
trademark was made in Delhi, and all the subsequent proceedings took place
in Delhi, this show cause notice should also have been issued only in
Delhi.

20. We may observe that under Section 57(4) of the Act, the suo motu
power can only be exercised by the Registrar himself, being the “Tribunal”
referred to in sub-sections (1) and (2) of the said Section. Section 3 of
the Trade Marks Act, 1999 is apposite. Section 3 states:

“Section 3 - Appointment of Registrar and other officers

(1) The Central Government may, by notification in the Official Gazette,
appoint a person to be known as the Controller-General of Patents, Designs
and Trade Marks, who shall be the Registrar of Trade Marks for the purposes
of this Act.

(2) The Central Government may appoint such other officers with such
designations as it thinks fit for the purpose of discharging, under the
superintendence and direction of the Registrar, such functions of the
Registrar under this Act as he may from time to time authorise them to
discharge.”

21. It is clear therefore that the power to be exercised under Section
57(4) can only be exercised by the Registrar of Trade Marks himself. There
is only one such Registrar – and his registered office is in Bombay. The
Assistant Registrars in the other parts of the country including Delhi all
act under the superintendence and directions of the Registrar, Bombay, as
is clear from Section 3(2) of the Act. This point is, therefore, without
substance.

22. We now come to an important argument raised by both parties: the
correct interpretation of Section 125 of the Act. Section 124 of the Act
inter alia states that where, in a suit for infringement of a trademark,
the defendant pleads that the registration of the plaintiff’s trademark is
invalid, then the court trying the suit shall stay the suit pending final
disposal of rectification proceedings either before the Registrar or the
Appellate Board, as the case may be.

23. The scheme under Section 124 is of great importance in understanding
the scope of Section 125. It is clear that where proceedings for
rectification of the register are pending before the filing of the suit for
infringement in which the defendant pleads that the registration of the
plaintiff’s trademark is invalid, such proceedings may be made either
before the Registrar or before the Appellate Board, in view of Section
57(1) and (2) of the Act. But, if rectification proceedings are to be
instituted after the filing of such suit for infringement in which the
defendant takes the plea that registration of the plaintiff’s trademark is
invalid, then rectification proceedings can only be taken before the
Appellate Board and not before the Registrar.

24. It will be noticed that Section 124(1) refers only to the plaintiff
and defendant of a suit for infringement, and Section 124(1)(ii)
specifically refers to the “party concerned” who will apply to the
Appellate Board for rectification of the register. Similarly, Section 125
also refers only to the “plaintiff” and the “defendant” in a suit for
infringement of a registered trademark. It is obvious, therefore, that an
application for rectification of the register can either be made by the
defendant who raises a plea in the suit that the registration of the
plaintiff’s trademark is invalid, or by the plaintiff who questions the
validity of the registration of the defendant’s trademark in a situation
where the defendant raises a defence under Section 30(2)(e). It is clear
therefore that the application for rectification of the register referred
to in Section 125(1) could only be an application (given the facts of the
present case) by the defendant in the suit for infringement. The defendant
being Seagram and not Austin Nichols, it is clear that the Section would
have no application. The submission of Smt. Prathiba Singh that Seagram is
only the licensee of Austin Nichols and that the authorized signatory of
both parties are the same holds no water for the reason that Austin Nichols
is not said to violate the registered trademark of the appellant herein.
Seagram again happens to be two separate Companies – Seagram Manufacturing
Private Limited and Seagram Distillers Private Limited. The plaint
allegations are that both the aforesaid companies are engaged in the
manufacture and distribution of liquor and sell and export alcoholic
beverages under the trademark “BLENDERS PRIDE” which is the registered
trademark of the plaintiff. The plaint does not state that the first and
second defendant are licensees of the said trademark of the Austin Nichols.
In fact, in paragraph 10 of the plaint, there is a specific averment by
the plaintiffs that upon necessary inquiries being made, the plaintiffs
have learnt that the defendants have not even applied for registration of
the trademark ‘BLENDERS PRIDE’ in their favour. It may also be noticed
that the suit is both a suit for infringement as well as passing off, and
it is significant that Austin Nichols has not been made a party defendant
to the said suit. Also, the very issue as to validity of the registration
of the trademark concerned has to be determined in the application for
rectification of the register, which would obviously bind only the parties
to the suit and nobody else. For these reasons, the application for
rectification, not having been made by any of the party defendants in the
said suit for infringement and passing off, Section 125(1) would have no
application.

25. Secondly, the Division Bench of the High Court is also correct in
reasoning that Section 125(1) would only apply to applications for
rectification of the register, and not to the exercise of suo motu powers
of the Registrar under Section 57(4). The reason is not hard to seek. If
the Registrar is barred from undertaking a suo motu exercise under Section
57(4) to maintain the purity of the register, there could conceivably be
cases where a defendant, after raising the plea of invalidity in a suit for
infringement, chooses not to proceed with the filing of a rectification
petition before the Appellate Board. This may happen in a variety of
circumstances: for example, take the case where, after raising the plea of
invalidity in a suit for infringement, the matter is compromised and the
defendant therefore does not file a rectification petition before the
Appellate Board. The Registrar’s power to maintain the purity of the
register of trademarks would still remain intact even in such cases, as has
been held by the judgment in Hardie’s case. This Court, in the said
judgment, while adverting to the meaning of “person aggrieved”, held as
follows:-

“The phrase "person aggrieved" is a common enough statutory precondition
for a valid complaint or appeal. The phrase has been variously construed
depending on the context in which it occurs. Three sections viz.
Sections 46, 56 and 69 of the Act contain the phrase. Section 46 deals with
the removal of a registered trademark from the register on the ground of
non-use. This section presupposes that the registration which was validly
made is liable to be taken off by subsequent non-user. Section 56 on the
other hand deals with situations where the initial registration should not
have been or was incorrectly made. The situations covered by this section
include: - (a) the contravention or failure to observe a condition for
registration; (b) the absence of an entry; (c) an entry made without
sufficient cause; (d) a wrong entry; and (e) any error or defect in the
entry. Such type of actions are commenced for the "purity of the register"
which it is in public interest to maintain. Applications under
Sections 46 and 56 may be made to the Registrar who is competent to grant
the relief. "Person's aggrieved" may also apply for cancellation or varying
an entry in the register relating to a certification trademark to the
Central Government in certain circumstances. Since we are not concerned
with a certification trademark, the process for registration of which is
entirely different, we may exclude the interpretation of the phrase "person
aggrieved" occurring in Section 69 from consideration for the purposes of
this judgment.

In our opinion the phrase "person aggrieved" for the purposes of removal on
the ground of non-use under section 46 has a different connotation from the
phrase used in section 56 for cancelling or expunging or varying an entry
wrongly made or remaining in the Register.

In the latter case the locus standi would be ascertained liberally, since
it would not only be against the interest of other persons carrying on the
same trade but also in the interest of the public to have such wrongful
entry removed. It was in this sense that the House of Lords defined "person
aggrieved" in the matter of Powell's Trade Mark 1894 (11) RFC 4:

"... although they were no doubt inserted to prevent officious interference
by those who had no interest at all in the Register being correct , and to
exclude a mere common informer, it is undoubtedly of public interest that
they should not be unduly limited, inasmuch as it is a public mischief that
there should remain upon the Register a Mark which ought not to be
there, and by which many persons may be affected, who, nevertheless, would
not be willing to enter upon the risk and expense of litigation.

Wherever it can be shown, as here, that the Applicant is in the same trade
as the person who has registered the Trade Mark, and wherever the Trade
Mark, if remaining on the Register, would, or might, limit the legal rights
of the Applicant, so that by reason of the existence of the entry on the
Register he could not lawfully do that which, but for the existence of the
mark upon the Register, he could lawfully do, it appears to me he has a
locus standi to be heard as a person aggrieved." (Emphasis added)” [para 30
– 32]

26. However, Smt. Prathiba Singh has argued, referring to Section 107 of
the 1958 Act, that the non obstante clause in Section 125 refers to the
whole of Section 57 including the suo motu power of the Registrar contained
in Section 57(4), and that therefore even such power cannot be exercised
once the ingredients of Section 125(1) are otherwise met. We are afraid
that we are not able to agree. Section 47(4) was referred to in Section
107 for the reason that the said sub-section refers to applications made to
the High Court or to the Registrar for cancellation of the registration of
a trademark as a defensive trademark. The other sub-sections of Section 47
do not refer to any such application but only explain what is meant by
defensive trademarks, and it is for that reason that Section 107 refers
only to Section 47(4) and not the entirety of Section 47. However, in
Section 125(1) of the Trade Marks Act, 1999, the width of the expression
“Section 57” is cut down by the expression “and an application for
rectification of the register”. Such rectification applications are
referable only to Sections 57(1) and (2) and not to the suo motu power of
the Registrar under Section 57(4). Therefore, apart from the substantive
reason given above of maintaining the purity of the register, even on a
literal construction of Section 125(1), it is clear that Section 57 (4)
would have to be excluded.

27. Whirlpool’s case, which is relied upon strongly by the appellant’s
counsel, has to be understood on its own facts. In paragraphs 6 and 7 of
the said judgment this Court set out the facts as follows:

“On 28.2.1997, the appellant filed an application in Form TM-12 for renewal
of the Trade Mark "Whirlpool" in Class 7 and the Registrar, by his order
dated 29.07.1997, allowed the renewal for three successive periods, namely,
22.2,1977,22.2.1984 and finally 22.2.1991. Thereafter, on 8.08.1997
appellant made an application under Order 6 Rule 17 C.P.C. for amendment of
the plaint in Suit No. 1705 of 1994, referred to above, so as to include
the ground of infringement of the Trade Mark also in the suit but the
application is still pending in the Delhi High Court which has already
granted time twice to the defendants, namely, Chinar Trust to file a reply.

In the meantime, Chinar Trust, through its attorneys, wrote on 10.09.1997
to the registrar to take suo motu action Under Section 56(4) for
cancellation of the Certificate of Renewal granted to the appellant on
29.07.1997 and the registrar, acting on that request, issued a notice to
the appellant on 26th Sept., 1997 requiring it to show cause why the
Certificate of Registration be not cancelled. Against this notice, the
appellant filed a writ petition in the Bombay High Court which was
dismissed on 8.12.1997. It is against this judgment that the present appeal
has been filed.” (at paras 6 and 7)

28. Finally, this Court’s decision turned on the facts of that case as
set out in paragraph nos. 72 and 73 therein.

“In the instant case, it has already been indicated above that when the
Assistant Registrar of Trade Marks dismissed appellant's opposition to the
registration of respondent's Trade Mark by its order dated 12.8.1992, it
filed an appeal in the Delhi High Court, which was admitted on 01.02.1993
and has since been registered as C.M.(Main) 414 of 1992. Thereafter, on
04.08.1993, the appellant filed a rectification petition Under Sections
45 and 46 of the Act for removing the entry relating to the Trade Mark for
which Registration Certificate was granted to the respondents on
30.11.1992. The appellant has also filed a suit for passing-off (Suit No.
1705 of 1994) in the Delhi High Court against the respondents in which an
order of temporary injunction has been granted in favour of the appellant
which has been upheld by the Division Bench of the High Court as also by
this Court. In that suit, an amendment application has also been filed so
as to include the ground of infringement of the appellant's Trade Mark but
that application has not yet been disposed of. It is, however, obvious that
if the application is allowed, the amendments will relate back to the date
of the application, if not to the date of plaint.

In view of the pendency of these proceedings in the High Court and
specially in view of Section 107 of the Act, the Registrar could not
legally issue any suo motu notice to the appellant Under Section 56(4) of
the Act for cancellation of the Certificate of Registration/Renewal already
granted. The appeal is consequently allowed and the show-cause notice
issued by the Deputy Registrar (respondent No. 2) on 26th of Sept. 1997
Under Section 56(4) of the Act is hereby quashed. The appellants shall be
entitled to their costs.” [at paras 72 and 73]

29. While arriving at this conclusion on facts, this Court held:-

“The extent of jurisdiction conferred by Section 56 on the Registrar to
rectify the Register, is, however curtailed by Section 107 which provides
that an application for rectification shall, in certain situations, be made
only to the High Court. These situations are mentioned in Sub-section (1)
of Section 107, namely, where in a suit for infringement of the registered
Trade Mark, the validity of the registration is questioned by the defendant
or the defendant, in that suit, raises the defence contemplated by
Section 30(1)(d) in which the acts which do not constitute an infringement,
have been specified, and the plaintiff in reply to this defence questions
the validity of the defendant's Trade Mark. In these situations, the
validity of the registration of the Trade Mark can be determined only by
the High Court and not by the Registrar.

Section 107 thus impels the proceedings to be instituted only in the High
Court. The jurisdiction of the Registrar in those cases which are covered
by Section 107 is totally excluded. Significantly, Section 107(2) provides
that if an application for rectification is made to the registrar Under
Section 46 or Section 47(4) or Section 56, the Registrar may, if he thinks
fit, refer that application, at any stage of the proceeding, to the High
Court.

Similarly, Under Section 111 of the Act, in a pending suit relating to
infringement of a Trade Mark, if it is brought to the notice of the Court
that any rectification proceedings relating to plaintiffs or defendant's
trade Mark are pending either before the Registrar or the High Court, the
proceedings in the suit shall be stayed pending final decision of the High
Court or the Registrar. Even if such proceedings are not pending either
before the Registrar or the High Court, the trial court, if prima facie
satisfied that the plea regarding invalidity of plaintiff s or defendant's
Trade Mark is tenable, may frame an issue and adjourn the case for three
months to enable the party concerned to apply to the High Court for
rectification of the Register. If within three months, the party concerned
does not approach the High Court, the plea regarding invalidity of Trade
Mark would be treated as abandoned but if such an application has been
given hearing,, the suit would be stayed awaiting final decision of the
High Court. The finding of the High Court would bind the parties and the
issue relating to the invalidity of Trade Mark would be decided in terms of
those findings.

In this background, the phrase "before which the proceeding concerned is
pending" stands out prominently to convey the idea that if the proceeding
is pending before the "Registrar", it becomes the "TRIBUNAL" Similarly, if
the proceeding is pending before the "High Court", then the High Court has
to be treated as "TRIBUNAL". Thus, the jurisdiction of the Registrar and
the High Court, though apparently concurrent in certain matters, is
mutually exclusive. That is to say, if a particular proceeding is pending
before the registrar, any other proceeding, which may, in any way, relate
to the pending proceeding, will have to be initiated before and taken up by
the Registrar and the High Court will act as the Appellate Authority of the
Registrar Under Section 109: It is obvious that if the proceedings are
pending before the High Court, the registrar will keep his hands off and
not touch those or any other proceedings which may, in any way, relate to
those proceedings, as the High Court, which has to be the High Court having
jurisdiction as set out in Section 3, besides being the Appellate Authority
of the Registrar has primacy over the Registrar in all matters under the
Act. Any other interpretation of the definition of "TRIBUNAL" would not be
in consonance with the scheme of the Act or the contextual background set
out therein and may lead to conflicting decision on the same question by
the Registrar and the High Court besides generating multiplicity of
proceedings.” [at paras 59 – 62]

30. No argument was made in Whirlpool’s case that Section 57(4) would be
independent of Section 125(1) for the reasons stated hereinabove. Further,
it is clear that one of the parties to the suit for passing off in the said
decision applied for rectification, unlike the present factual scenario.
For these two reasons also the said judgment would have no application to
the facts of the present case. Also, it is not clear from the facts stated
in the said judgment as to how Section 107(1) would be attracted. A suit
for passing off alone had been filed – an amendment application to add the
relief of infringement of trademark was pending. This is perhaps why this
Court referred to the said amendment application and said that if it were
to be granted it would relate back to the date of the suit itself. The
defendant in the said suit obviously could not have filed a written
statement taking up a plea of invalidity of the registered trademark before
an amendment application of the plaintiff adding the relief of infringement
had been allowed. For this reason also we find that the aforesaid judgment
cannot be said to have laid down any principle of law touching upon
Sections 125 and 57 of the Act.

31. We are, therefore, of the view that, for the reasons given by us, the
Division Bench judgment requires no interference. The appeal is,
therefore, dismissed. No costs.

……………………J.

(Kurian Joseph)

……………………J.

(R.F. Nariman)

New Delhi;
January 20, 2016.

“In the instant case, from the above facts, it is obvious that the allotment which has been permitted without considering other applications, is unreasonable and lacks good faith and could not be said to be in public interest. The order passed by the State Government effecting the order of transfer in favour of opposite party No.6 is unreasonable and invalid. In these circumstances, the allotment order passed in favour of opposite party No.6 cannot be allowed to stand.= requisite notices were issued to Respondent No.1 and that it was afforded adequate opportunity. The observations of the High Court in that behalf are not quite correct. The supplementary affidavit filed in January 2000 made the position quite clear. The petition was therefore wrongly allowed on the ground that no opportunity was given to Respondent No.1. We have also seen the record and are satisfied that Respondent No.1 had closed its operation in the year 1997. According to annexure No. R-16 placed along with the rejoinder affidavit, an inspection report was apparently prepared. That report is a solitary piece in support of its submissions of having started manufacturing activity. Nothing has been placed on record, no licence is adverted to nor is it shown how and in what manner Respondent No.1 started its activity of manufacturing PVC pipes. Nothing was filed or placed on record pursuant to notices dated 20.03.1998 and 27.03.1998. We do not find any merit in the submissions that Respondent No.1 has been conducting any activity of manufacturing of PVC pipes. The claim of Respondent No.1 must therefore be rejected. At the same time it is absolutely clear on record that the Appellant has been having allotment of three sheds namely B-6, C-1 and C-2 in its favour in the same Industrial Estate. No special equities are in its favour and no case is therefore made out for allotment of concerned shed to the Appellant. The observation of the High Court that the order dated 15.06.1998 was issued without any public auction or inviting tenders and as such was completely unsustainable, in our view is absolutely correct. In the circumstances we allow the present appeal with following directions:- (a) The claim of Respondent No.1 was rightly rejected while cancelling allotment made in favour of M/s Surya Chemicals vide letter of cancellation dated 09.06.1998. The order of cancellation dated 09.06.1998 is sustained and shall be fully operative. Respondent No.1 who has been in wrongful occupation of the concerned shed must surrender the possession immediately. The authorities are directed to recover the possession forthwith and report compliance to this Court. (b) In view of the change in circumstances namely allotment of sheds C-1 and C-2 in its favour, the Appellant is not entitled to claim any special equity. The order of allotment dated 15.6.1998 passed in its favour therefore stands set aside. (c) The authorities are directed to conduct public auction or invite tenders for allotment of the concerned shed at the present market value. Needless to mention that the present Appellant and Respondent No.1 or any other person is free to participate in such public auction or tender.

Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 361 OF 2016
(Arising out of SLP (C) No. 10951 of 2014)

M/s Metal Seam Co. of India (P) Ltd. …Appellant

Vs.

M/s Avadh Delicacies & Others …Respondents

J U D G M E N T

Uday U. Lalit, J.

Leave granted.

This appeal challenges the judgment and order dated 28.03.2014 passed by
the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow in Writ
Petition No.1840 of 1998 whereby the High Court was pleased to set-aside
the orders dated 09.06.1998 and 15.06.1998 passed by the General Manager,
District Industries Centre, Lucknow.

The facts in the present matter are as under:-

In 1956, Shed No.B-5 inclusive of appurtenant open space situated in
Talkatora Industrial Estate, Lucknow (hereinafter referred to as the
“concerned shed”) was allotted to M/s Surya Chemicals for establishment of
a factory. Under the Hire Purchase agreement entered into between M/s Surya
Chemicals and the Director of Industries on behalf of the Government of
U.P., it was expressly stipulated in Condition No.4 as under:-

“Not to sell, mortgage, assign or otherwise transfer the factory building
except with the previous permission in writing of the Director of
Industries, U.P. till the price has been fully paid and the transfer as
aforesaid shall be as such conditions as the Director of Industries, U.P.,
may lay down while granting such permission.”

The present Appellant was allotted the adjoining shed namely B-6 in the
year 1968 and in due course of time it started manufacturing containers and
drums. As the business of the Appellant expanded, it required additional
premises. Around this time M/s Surya Chemicals was in arrears in making
payment of instalments in respect of the concerned shed. At one stage the
allotment in its favour was cancelled but on an assurance that it would
start production, it was given time and the allotment was restored. The
Appellant approached the Joint Director of Industries for allotment of the
concerned shed on payment of entire cost.

Since M/s Surya Chemicals was in default, the Joint Director of Industries
recommended cancellation of allotment of the concerned shed and wrote to
the General Manager to take the appropriate steps after taking legal
opinion in the matter. The General Manager however by his order dated
01.12.1983 recommended transfer of the concerned shed in favour of Avadh
Delicacies, Respondent No.1 herein. Respondent No.1 was a new firm
provisionally registered as a Small Scale Industries unit with the General
Manager. The order was passed on an application moved by M/s Surya
Chemicals for transfer of the concerned shed to Respondent No.1.

d) On 25.02.1984 the Joint Director of Industries accepted the transfer
application moved by M/s Surya Chemicals permitting the transfer of the
concerned shed in favour of Respondent No.1. This led to the filing of Writ
Petition No.1166 of 1984 by the Appellant in the High Court. It was
submitted that the application for transfer ought to have been considered
along with other pending applications and when the application of the
Appellant was pending there was no question of accepting the transfer as
proposed by M/s Surya Chemicals.

e) That writ petition was allowed by the High Court by its judgment and
order dated 04.03.1987. It was observed as under:-
“In the instant case, from the above facts, it is obvious that the
allotment which has been permitted without considering other applications,
is unreasonable and lacks good faith and could not be said to be in public
interest. The order passed by the State Government effecting the order of
transfer in favour of opposite party No.6 is unreasonable and invalid. In
these circumstances, the allotment order passed in favour of opposite party
No.6 cannot be allowed to stand.

The writ petition is accordingly allowed and a writ of certiorari is issued
quashing the order dated 25.02.1984, passed by the Joint Director of
Industries (Annexure-14) and the order dated 23.02.1984, passed by the
State Government contained in Annexure-13 to the writ petition. However,
it will be open to the opposite parties to consider the merits of the case
of the petitioner and that of opposite party No.6 and in case the opposite
party No.6 in fact has started any production regarding which there is
dispute and doubt, his claim would be given due consideration and in any
view the opposite parties will, so far as possible, allot any other shed to
opposite party No.6 if circumstances warrant that he should not get and
keep possession over shed No.5-B.”

f) Thus the order of transfer in favour of opposite party No.6 i.e.
Respondent No.1 was quashed. The authorities were directed to consider the
merits of the case of the Appellant and Respondent No.1 and in case the
claim of Respondent No.1 was to be accepted, its claim could inter-alia be
considered in respect of any other shed.

g) The aforementioned judgment and order dated 04.03.1987 was challenged
by Respondent No.1 in this Court by filing Civil Appeal No. 3062 of 1987
and during its pendency nothing could be done. It appears that on
25.09.1997 Shed No.C-1 in the very same Industrial Estate came to be
allotted to the Appellant. On 29.09.1997 the aforesaid civil appeal was
dismissed for non-prosecution by this Court and such dismissal has attained
finality.

h) Soon thereafter the matter was taken up for consideration. On
20.03.1998 a notice was issued to the Respondent No.1 to present its case
along with necessary record relating to the concerned shed. A further
notice in that behalf was again issued to Respondent No.1 on 27.03.1998.
Similar notices were also issued to the Appellant and M/s Surya Chemicals.

i) In the meeting of Zila Udyog Bandhu held on 20.05.1998, the matter
concerning allotment of concerned shed was considered. It was observed
that in the year 1997 Shed No.C-1 was already allotted in favour of the
Appellant. The committee however concluded as under:-

“Having considered the entire facts of the above case and after due
deliberations, the Chairman has taken the decision that Shed No. B-5 was
allotted to M/s Surya Chemicals in the year 1965 and the possession of the
shed was handed over on 01.01.1966 but they have not commenced any work at
their own and transferred Shed No. B-5 to M/s Avadh Delicacies. M/s Surya
Chemicals is not interested in setting up of unit and started production,
therefore, the committee has taken the decision to cancel the allotment of
Shed No. B-5 to M/s Surya Chemicals and make its allotment in favour of M/s
Metal Seam Company of India under the provisions of Government Order No.
1888/18-2-92-25(3)/92 dated 30.4.1992 as per rules.”

j) On 09.06.1998 General Manager, District Industries Centre, Lucknow
issued a letter cancelling the allotment of the concerned shed which was
made in favour of M/s Surya Chemicals and re-claimed the possession of the
concerned shed. Further, by order dated 15.06.1998 the General Manager,
District Industries Centre, Lucknow allotted the concerned shed to the
Appellant. M/s Surya Chemicals did not challenge the order of cancellation
dated 09.06.1998. However, Respondent No.1 challenged the said order by
filing Writ Petition No.1840 of 1998 in the High Court. During the
pendency of the writ petition, there was an order of status quo which
continued till the disposal of the writ petition. It appears that on
10.03.2006 another shed in the same Industrial Estate being Shed No.C-2 was
allotted to the Appellant herein. The Appellant since then has been having
allotment of three sheds, namely, B-6, C-1 and C-2 in its favour.

k) In the aforesaid writ petition a supplementary affidavit was filed by
General Manager, District Industries Centre in January, 2000 stating as
under:

“That this Hon’ble Court on 13.09.1999 (when the instant case was
listed) was pleased to enquire whether the petitioner’s case was considered
or not for allotment of industrial plot in question in view of the judgment
of this Hon’ble Court dated 04.03.1987 passed in Writ Petition No. 1166 of
1984 (MB) (Metal Seams Co. of India v. State of UP & Ors.) in this regard
it is submitted that in paragraph 23 of the counter affidavit filed in the
instant writ petition i.e. Writ Petition No. 1840 of 1998(MB) dated
19.03.1999 it has been specifically asserted that after the dismissal of
the SLP against the judgment and order dated 04.03.1987 the steps were
taken by the Department for the assessment of the comparative need of the
conflicting parties in respect of shed in question. In the said paragraph
it was further stated that all the parties namely (1) M/s Surya Chemicals,
(2) M/s Metal Seams Co. and (3) M/s Avadh Delicacies were called vide
letters dated 20.03.1998 and 27.03.1998 by the committee consisting of (1)
General Manager, District Industries Centre, Lucknow, (2) Director, Central
Design Centre, Lucknow and (3) Project Manager in the office of Joint
Director Industries, Lucknow. The said letters were annexed as annexure
Nos. (A-3 and A-4) to the said counter affidavit.

l) The record placed before us indicates that Respondent No.1 had
initially got registration to manufacture ayurvedic medicines in the year
1987. However, in the year 1992 it had obtained licence to run a Flour
Mill and to deal in and store food grains. On 25.06.1997 Respondent No.1
had written to the Trade Tax Officer, Lucknow as under:

“1. The firm of the applicant is registered with your office under State
Trade Tax Act vide Registration No. LKO-0366347 dated 17.05.1992.

2. That the trader has closed down his business because of the loss in
it.

3. That Form No.15 and 19 are already submitted in the office.

Hence, the applicant urges that the notice of closure may be admitted and
the firm may be permanently closed.”

(m) The aforementioned Writ Petition No.1840 of 1998 came to be allowed
by the High Court by its judgment and order dated 28.03.2014. The High
Court observed that Annexure No.R-16 placed on its record by way of
rejoinder affidavit, disclosed that Respondent No.1 was running an industry
for manufacturing PVC pipes and accessories and its production had also
started. It was further observed that the order of allotment dated
15.06.1998 in favour of the Appellant was passed without giving any
opportunity of hearing or issuing any show cause notice to Respondent No.1
and without complying with the directions in the order dated 04.03.1987.
The High Court also stated that order dated 15.06.1998 was not sustainable
in as much as it was issued without any public auction or inviting tenders.

4. This appeal by special leave challenges the judgment and order passed
by the High Court setting aside the order of allotment dated 15.06.1998.
In support of the appeal, Mr. H.P. Raval, learned Senior Advocate submitted
that the notices dated 20.03.1998 and 27.03.1998 clearly indicate that
requisite opportunity was afforded to Respondent No.1, that record
indicated that the cases of all three claimants including that of
Respondent No.1 were considered before letter of cancellation dated
09.06.1998 was issued, that cancellation was never challenged by M/s Surya
Chemicals and that Respondent No.1 had no stateable claim in respect of the
concerned shed. Appearing for Respondent No.1, Mr. Guru Krishna Kumar,
learned Senior Advocate submitted that in keeping with the direction issued
in the judgment and order dated 04.03.1987 the claim of Respondent No.1 was
required to be considered, which is a matter of fact, was not considered at
all and that the requirement of the Appellant stood completely satisfied by
allotment of two sheds namely C-1 and C-2 during the pendency of the
proceedings.

5. We have considered the submissions and gone through the record. The
Appellant is right in its submissions that requisite notices were issued to
Respondent No.1 and that it was afforded adequate opportunity. The
observations of the High Court in that behalf are not quite correct. The
supplementary affidavit filed in January 2000 made the position quite
clear. The petition was therefore wrongly allowed on the ground that no
opportunity was given to Respondent No.1. We have also seen the record and
are satisfied that Respondent No.1 had closed its operation in the year
1997. According to annexure No. R-16 placed along with the rejoinder
affidavit, an inspection report was apparently prepared. That report is a
solitary piece in support of its submissions of having started
manufacturing activity. Nothing has been placed on record, no licence is
adverted to nor is it shown how and in what manner Respondent No.1 started
its activity of manufacturing PVC pipes. Nothing was filed or placed on
record pursuant to notices dated 20.03.1998 and 27.03.1998. We do not find
any merit in the submissions that Respondent No.1 has been conducting any
activity of manufacturing of PVC pipes. The claim of Respondent No.1 must
therefore be rejected. At the same time it is absolutely clear on record
that the Appellant has been having allotment of three sheds namely B-6, C-1
and C-2 in its favour in the same Industrial Estate. No special equities
are in its favour and no case is therefore made out for allotment of
concerned shed to the Appellant. The observation of the High Court that
the order dated 15.06.1998 was issued without any public auction or
inviting tenders and as such was completely unsustainable, in our view is
absolutely correct.

6. In the circumstances we allow the present appeal with following
directions:-

(a) The claim of Respondent No.1 was rightly rejected while cancelling
allotment made in favour of M/s Surya Chemicals vide letter of cancellation
dated 09.06.1998. The order of cancellation dated 09.06.1998 is sustained
and shall be fully operative. Respondent No.1 who has been in wrongful
occupation of the concerned shed must surrender the possession immediately.
The authorities are directed to recover the possession forthwith and report
compliance to this Court.

(b) In view of the change in circumstances namely allotment of sheds C-1
and C-2 in its favour, the Appellant is not entitled to claim any special
equity. The order of allotment dated 15.6.1998 passed in its favour
therefore stands set aside.

(c) The authorities are directed to conduct public auction or invite
tenders for allotment of the concerned shed at the present market value.
Needless to mention that the present Appellant and Respondent No.1 or any
other person is free to participate in such public auction or tender.

7. This appeal thus stands allowed and the judgment of the High Court
under appeal stands modified to the aforesaid extent. No order as to
costs.

……………………………J.
(V. Gopala Gowda)

……..………………..……J.
(Uday Umesh Lalit)
New Delhi,
January 19, 2016

ITEM NO.1E-For Judgment COURT NO.10 SECTION XI

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

C.A. No.361/2016 @ Petition(s) for Special Leave to Appeal (C) No(s).
10951/2014

M/S.METAL SEAM CO.OF INDIA (P)LTD. Petitioner(s)

VERSUS

M/S.AVADH DELICACIES & ORS. Respondent(s)

Date : 19/01/2016 This appeal was called on for pronouncement of JUDGEMENT
today.

For Petitioner(s)
Mr. Anil Kumar Mishra,Adv.

For Respondent(s)
Mr. Gaurav Dhingra,Adv.

Mr. Akshit Gadhok, Adv.
Mr. Munawwar Naseem,Adv.

Hon'ble Mr. Justice Uday Umesh Lalit pronounced the judgment of the
Bench comprising Hon'ble Mr. Justice V. Gopala Gowda and His Lordship.
Leave granted.
The appeal is allowed in terms of the signed non-reportable judgment.

|(VINOD KUMAR) | |(MALA KUMARI SHARMA) |
|COURT MASTER | |COURT MASTER |

(Signed Non-Reportable Judgment is placed on the file)

Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as the ‘Act’) for being in possession of 1 kg of opium without any permit or licence.=The appellant was told that he was suspected to be carrying opium in his possession and as such his personal search had to be undertaken and that he had a right to be searched in the presence of a Gazetted Officer or a Magistrate. The appellant was given an appropriate notice vide Ext. PA under Section 50 of the Act and by his reply Ext. PA/1 he opted to be searched before a Gazetted Officer. Thereafter a wireless message was sent to PW4 Shyam Singh Rana, DSP Gohana who reached the spot. The appellant was produced before him and PW4 was also acquainted with the facts of the case. Thereafter, on the instructions of PW4, personal search of the appellant was undertaken which resulted in recovery of opium from the possession of the appellant. The opium was found in a polythene bag tied in a cloth around the stomach of the appellant. On weighment, it was found to be 1kg 50gms. A sample was taken and put in a small plastic bag while the remainder was put in a bag of cloth. The sample and the remainder were separately sealed and taken in possession vide memo Ext. PB. The seal was then handed over to PW1 ASI Bishamber Lal. Thereafter Ruqa Ext. PC was sent to the Police Station for registration of crime, whereupon FIR Ext. PC was recorded by PW2 Head Constable Om Parkash= it was observed in Megha Singh as under: “After considering the facts and circumstances of the case, it appears to us that there is discrepancy in the depositions of the P.Ws.2 and 3 and in the absence of any independent corroboration such discrepancy does not inspire confidence about the reliability of the prosecution case. We have also noted another disturbing feature in this case. PW3, Siri Chand, head Constable arrested the accused and on search being conducted by him a pistol and the cartridges were recovered from the accused. It was on his complaint a formal first information report was lodged and the case was initiated. He being complainant should not have proceeded with the investigation of the case. But it appears to us that he was not only the complainant in the case but he carried on with the investigation and examined witnesses under Section 161 Cr.P.C. Such practice, to say the least, should not be resorted to so that there may not be any occasion to suspect fair and impartial investigation.” = In Megha Singh, the search was not conducted in the presence of a Gazetted Officer, as is required in a case under the Act. In the instant case the search of the appellant was conducted in the presence of and under the instructions of PW4. The extracts of depositions of other prosecution witnesses show that it was not PW6 S.I. Satbir Singh alone who was involved in the investigation. In our view the principle laid down in Megha Singh and followed in State vs. Rajangam does not get attracted in the present matter. Relevant to note that this was not even a ground projected in support of the case of the appellant and does not find any reference in the judgment under appeal. We therefore reject the submission.

Reportable
IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 50 of 2016
(Arising from the SLP(Crl.) No. 2082 of 2015)

Surender @ Kala …. Appellant

Versus

State of Haryana …. Respondent

J U D G M E N T

Uday U. Lalit, J.

Leave granted.

This appeal is directed against the judgment and order dated 11.12.2014
passed by the High Court of Punjab and Haryana dismissing Criminal Appeal
No. S-318-SB of 2004 preferred by the appellant against his conviction
under Section 18 of Narcotic Drugs and Psychotropic Substances Act, 1985
(hereinafter referred to as the ‘Act’) for being in possession of 1 kg of
opium without any permit or licence.

According to the prosecution PW6 SI Satbir Singh was on usual patrol duty
on 24.06.2002 along with other police officials at bus stand of village
Bichpar, Distt Sonipat. Secret information was received by him that the
appellant was selling opium and was roaming in the village in search of
customers. This information was reduced to writing in the form of Ruqa
Ext. PF and was sent to the Police Station for information, whereupon DDR
Ext. PC was recorded. PW6 Satbir and other police officials reached the
bus stand and saw the appellant coming from village Gangana side. He was
apprehended. The appellant was told that he was suspected to be carrying
opium in his possession and as such his personal search had to be
undertaken and that he had a right to be searched in the presence of a
Gazetted Officer or a Magistrate. The appellant was given an appropriate
notice vide Ext. PA under Section 50 of the Act and by his reply Ext. PA/1
he opted to be searched before a Gazetted Officer.

Thereafter a wireless message was sent to PW4 Shyam Singh Rana, DSP Gohana
who reached the spot. The appellant was produced before him and PW4 was
also acquainted with the facts of the case. Thereafter, on the instructions
of PW4, personal search of the appellant was undertaken which resulted in
recovery of opium from the possession of the appellant. The opium was found
in a polythene bag tied in a cloth around the stomach of the appellant. On
weighment, it was found to be 1kg 50gms. A sample was taken and put in a
small plastic bag while the remainder was put in a bag of cloth. The sample
and the remainder were separately sealed and taken in possession vide memo
Ext. PB. The seal was then handed over to PW1 ASI Bishamber Lal. Thereafter
Ruqa Ext. PC was sent to the Police Station for registration of crime,
whereupon FIR Ext. PC was recorded by PW2 Head Constable Om Parkash.

The appellant along with the case property was produced before PW3 Yad Ram
SHO of Police Station who verified the fact and put his own seal bearing
impression “YR” on the sample as well as on the remainder. Thereafter the
sealed case property was handed over to the Investigating Officer who
deposited the same with Malkhana. In due course of time the FSL report Ext.
PD was received wherein it was opined that the sample in question was
opium. After completion of investigation the appellant was charge-sheeted
and tried for having committed the offence punishable under Section 18 of
the Act.

The prosecution in support of its case examined six witnesses. PW1 ASI
Bishamber Lal stated as under:-

“As contraband article was suspected with the accused so he was served with
a notice Ext. PA to opt about his search before a Gazetted Officer or a
Magistrate, which is bearing my signatures. Accused opted for his search
before a Gazetted officer vide endorsement Ex. PA/1 which is bearing my
signatures.”

PW2 Head Constable Om Parkash in his deposition stated as under:-

“On that day ASI Bishamber Lal deposited the case property with me, which
was sealed with seal SS.”

Pw 3 SI Yad Ram in his deposition stated as under:-

“On 24.06. 2002, I was posted SI/HO P.S. Baroda. On that day SI Satbir
Singh had produced the accused now present in the court, two sealed parcels
and the witnesses before me. I verified the investigation and affixed my
own bearing inscription “YR”. I directed SI Satbir Singh to deposit the
case property with seals intact with the MHC P.S. Baroda.”

PW4 Shyam Singh Rana DSP stated as under:-

“I directed SI Satbir Singh to carry out the search of the accused. During
the course of search SI Satbir Singh recovered opium wrapped in a cloth was
tied with the stomach of the accused underneath the shirt and the vest of
the accused wrapped in a polythene pack. On weighment it was found to be
one kilogram. SI Satbir Singh took out 50grams of opium from the recovered
bulk and sealed the sample and the remainder into two separate parcels with
the sealed bearing inscription SS. Both the sealed parcels were taken into
possession vide recovery memo EX. PB which was signed by ASI Bishamber Lal
and HC Suresh Kumar and was attested by me also.”

7. In his statement under Section 313 Cr. P.C. the appellant denied the
prosecution allegations and pleaded innocence. After considering the
material on record and rival submissions, the Special Judge, Sonipat found
the appellant guilty of offence punishable under Section 18 of the Act and
by his judgment and order dated 14.11.2004 sentenced him to undergo
rigorous imprisonment for 5 years and to pay fine of Rs. 10000/-, in
default whereof to undergo further rigorous imprisonment for a period of 8
months.

8. The judgment of conviction and sentence was challenged by way of
Criminal Appeal of S-318 –SB of 2004 in the High Court. After considering
the entire material on record, the High Court by its judgment under appeal
affirmed the view taken by the Trial Court and dismissed the appeal. The
correctness of the view taken by the High Court is under challenge in the
present appeal.

9. It was submitted by Mr. Rakesh Dahiya, learned advocate appearing for
the appellant that the investigation in the matter was conducted by PW6 SI
Satbir Singh who himself was the complainant. Relying on the decision of
this court in State by Inspector of Police, Narcotic Intelligence Bureau,
Madhurai, Tamil Nadu v. Rajangam[1], the learned counsel submitted that the
investigation by PW6 SI Satbir Singh was improper and the appellant was
entitled to acquittal.

10. We have given anxious consideration to the submissions of the learned
counsel. In State v. Rajangam (supra), the High Court had acquitted the
accused. Relying upon the decision of this court in Megha Singh v. State of
Haryana[2], the view taken by the High Court was affirmed by this Court in
an appeal against acquittal. In Megha Singh the accused was tried under
the provisions of the TADA Act and the Arms Act for being in possession of
a country made pistol and three live cartridges. The prosecution did not
examine any independent witness and simply relied upon the testimony of PW3
Investigating Officer. There was also discrepancy in the depositions of PW3
Investigating Officer and another police person namely PW2. In the light of
these facts, it was observed in Megha Singh as under:

“After considering the facts and circumstances of the case, it
appears to us that there is discrepancy in the depositions of the P.Ws.2
and 3 and in the absence of any independent corroboration such discrepancy
does not inspire confidence about the reliability of the prosecution case.
We have also noted another disturbing feature in this case. PW3, Siri
Chand, head Constable arrested the accused and on search being conducted by
him a pistol and the cartridges were recovered from the accused. It was on
his complaint a formal first information report was lodged and the case was
initiated. He being complainant should not have proceeded with the
investigation of the case. But it appears to us that he was not only the
complainant in the case but he carried on with the investigation and
examined witnesses under Section 161 Cr.P.C. Such practice, to say the
least, should not be resorted to so that there may not be any occasion to
suspect fair and impartial investigation.”

11. In Megha Singh, the search was not conducted in the presence of a
Gazetted Officer, as is required in a case under the Act. In the instant
case the search of the appellant was conducted in the presence of and under
the instructions of PW4. The extracts of depositions of other prosecution
witnesses show that it was not PW6 S.I. Satbir Singh alone who was involved
in the investigation. In our view the principle laid down in Megha Singh
and followed in State vs. Rajangam does not get attracted in the present
matter. Relevant to note that this was not even a ground projected in
support of the case of the appellant and does not find any reference in the
judgment under appeal. We therefore reject the submission.

12. Having gone through the entirety of the matter, we do not find any
reason to differ from the view taken by the High Court. We therefore
dismiss this appeal.

………………………J.
(V. Gopala Gowda)

…………………..……J.
(Uday Umesh Lalit)
New Delhi,
January 19, 2016

ITEM NO.1D-For Judgment COURT NO.10 SECTION IIB

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Crl.A.No.50/2016 @ Petition(s) for Special Leave to Appeal (Crl.) No(s).
2082/2015

SURENDER @ KALA Petitioner(s)

VERSUS

STATE OF HARYANA Respondent(s)

Date : 19/01/2016 This appeal was called on for pronouncement of JUDGMENT
today.

For Petitioner(s)
Mr. Rakesh Dahiya,Adv.

For Respondent(s)
Mr. Sanjay Kumar Visen,Adv.

Hon'ble Mr. Justice Uday Umesh Lalit pronounced the judgment of the
Bench comprising Hon'ble Mr. Justice V. Gopala Gowda and His Lordship.
Leave granted.
The appeal is dismissed in terms of the signed reportable judgment.

Pending application(s), if any,stand(s) disposed of.
|(VINOD KUMAR) | |(MALA KUMARI SHARMA) |
|COURT MASTER | |COURT MASTER |

(Signed Reportable Judgment is placed on the file)
-----------------------
[1] 1. 2010(15) SCC 369
[2] 1996(11) SCC 709

Special Economic Zone = grant of lease of land admeasuring 1500 acres out of Survey No.141 of Village Mundra, Taluka Mundra, District Kutch for the purposes of manufacturing salt. That application came to be rejected by the District Collector on 05.06.1993 on the ground “Land not available as asked for”=The original application simply made a demand that the respondent be allotted 1500 acres of land from Survey No.141 of Village Mundra. It is true that certain allotments were made from and out of Survey No.141 of Village Mundra but after the setting up of Special Economic Zone at Mundra all those applicants have surrendered their lands. The stand of the appellant - State is very clear and categorical that there was no land available at Village Mundra. Further, the application having been rejected by the District Collector on 18.12.1999, Revision was preferred more than five years later. This Revision was rejected on the ground of delay and was taken up in challenge before the High Court again after a delay of five years. In the circumstances the Single Judge of the High Court was right in observing that the respondent had remained indolent in pursuing its remedy and that because of delay and latches on its part, no indulgence could be shown. In our considered view, the Division Bench was not justified in reversing the judgment and order passed by the Single Judge, nor was it right in directing the Collector to allot to the respondent land for salt production from any other survey number.

Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.360 of 2016
(Arising from the SLP(Civil) No.527 of 2015)

State of Gujarat and Another ….Appellants

Versus

Shree Ratnakar Enterprise …. Respondent

J U D G M E N T

Uday U. Lalit, J.

Leave granted.

This appeal challenges the judgment and order dated 08.01.2014 passed by
the Division Bench of the High Court of Gujarat in Letters Patent Appeal
No.218 of 2012 arising out of the dismissal of Special Civil Application
No.16050 of 2011 by the Single Judge of the High Court.

The facts in the present matter are as under:

(a) The respondent preferred an application before the appellant State
for grant of lease of land admeasuring 1500 acres out of Survey No.141 of
Village Mundra, Taluka Mundra, District Kutch for the purposes of
manufacturing salt. That application came to be rejected by the District
Collector on 05.06.1993 on the ground “Land not available as asked for”.
The rejection of the application was challenged in Revision before the
Additional Chief Secretary, Revenue Department who remanded the matter back
to the Collector for fresh consideration. Thereafter, the Collector again
rejected the application vide order dated 18.12.1999 on the ground that
the land available with the Government was scattered over various places
and land to the tune of 1500 acres as requested was not available in one
place. That order was again challenged by filing Revision on 02.02.2005
i.e. more than five years after the rejection of application on 18.12.1999.
The revisional authority refused to condone the delay in preferring the
Revision and by its order dated 27.04.2005 affirmed the order of rejection
passed by the Collector. A copy of the order dated 27.04.2005 was marked to
the concerned parties.

(b) Thereafter, a proposal for setting up of Special Economic Zone at
Mundra was taken up for consideration. The Central Government vide its
order dated 24.05.2009 provided for setting up ofSpecial Economic Zone at
Mundra. The notification in question pertained to lands including Survey
No.141 of Village Mundra. The coastal lands required for the Special
Economic Zone were surrendered by various persons to the Government in
order to enable setting up of the Special Economic Zone.

(c) Almost six years after the disposal of Revision on 27.04.2005, the
respondent preferred Special Civil Application No.16050 of 2011 in the High
Court of Gujarat praying inter-alia that the order dated 27.04.2005 be
quashed and appropriate direction be issued to allot land as prayed for by
the respondent. It was submitted that the respondent had recently become
aware about the order passed on 27.04.2005.

(d) That Special Civil Application was rejected by Single Judge of the
High Court vide judgment and order dated 28.11.2011. It was observed that
the rejection of Revision in 2005 was challenged by filing Special Civil
Application in the year 2011 and that the respondent itself had remained
indolent in pursuing its remedy; that because of such delay and latches no
indulgence could be shown in favour of the respondent; that no violation of
any fundamental right or any legal right was shown by the respondent; and
that there was no infirmity in the order passed by the revisional
authority.

(e) The decision of the Single Judge was challenged by filing Letters
Patent Appeal No.218 of 2012 before the Division Bench of the High Court.
During the pendency of this Appeal, an affidavit was filed on behalf of the
appellant - State that no land was earmarked for salt production from
Survey No.141 but over the years lands situated near coastal area were
allotted to various applicants for salt production and that said lands were
surrendered by said persons to the appellant - State after the demand for
land for Mundra Special Economic Zone came up. The Division Bench by its
judgment and order dated 08.01.2014 allowed the appeal. It was observed
that there was no delay on part of the respondent as it was prosecuting the
matter since the year 1992 and that the delay was actually on part of the
appellant - State. The Division Bench further observed that since the
respondent had applied in the year 1992 its priority ought to be maintained
and that the Collector must ensure that the land for salt cultivation be
allotted to the respondent from any survey number within a period of three
months from the receipt of the order.

4. The appellant State has preferred this Appeal challenging the
decision of the Division Bench of the High Court submitting inter-alia that
after the establishment of Special Economic Zone at Mundra, no land was
available which could be allotted to the respondent, that the respondent
could not claim the land as a matter of right for production of salt and
that there was no infirmity in the order passed by the revisional
authority. It was further submitted that the appellant - State had
allotted small pieces of land for salt production and no person was ever
allotted 1500 acres of land for production of salt. This Court was pleased
to issue notice in the matter, whereafter the respondent filed affidavit in
reply. It was submitted that if 1500 acres of land was not available in
Survey No.141, whatever was available could be allotted from other survey
numbers but the application of the respondent could not and ought not to
have been rejected.

5. We heard Ms. Jesal Wahi, learned Advocate who appeared in support of
the Appeal and Mr. Abhijeet Sinha, learned Advocate who appeared for the
respondent. After concluding the hearing on 07.12.2015, liberty was granted
to the parties to file written submissions, if any, within two weeks. The
respondent filed an application for direction submitting inter-alia that it
wished to rely on the policy of the State Government dated 31.12.1981
governing the matter in issue and that it be granted hearing to address
this Court on such document. The respondent further prayed for extension of
time to file its written submission.

6. We have gone through the record. At no stage the alleged policy dated
31.12.1981 was either referred to or relied upon. No submission was ever
advanced to project the entitlement or the extent thereof under this
policy. The original application simply made a demand that the respondent
be allotted 1500 acres of land from Survey No.141 of Village Mundra. It is
true that certain allotments were made from and out of Survey No.141 of
Village Mundra but after the setting up of Special Economic Zone at Mundra
all those applicants have surrendered their lands. The stand of the
appellant - State is very clear and categorical that there was no land
available at Village Mundra. Further, the application having been rejected
by the District Collector on 18.12.1999, Revision was preferred more than
five years later. This Revision was rejected on the ground of delay and
was taken up in challenge before the High Court again after a delay of five
years. In the circumstances the Single Judge of the High Court was right in
observing that the respondent had remained indolent in pursuing its remedy
and that because of delay and latches on its part, no indulgence could be
shown. In our considered view, the Division Bench was not justified in
reversing the judgment and order passed by the Single Judge, nor was it
right in directing the Collector to allot to the respondent land for salt
production from any other survey number.

7. In the circumstances this appeal is allowed. The judgment and order
of the Division Bench of the High Court is set-aside and that was passed by
the Single Judge of the High Court is restored. Application for directions
preferred by the respondent after conclusion of hearing is rejected. No
order as to costs.

………………………J.
(V. Gopala Gowda)

………………..……J.
(Uday Umesh Lalit)

New Delhi,
January 19, 2016

ITEM NO.1C.- For Judgment COURT NO.10 SECTION IX

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

C.A. No.360/2016 @ Petition(s) for Special Leave to Appeal (C) No(s).
527/2015

STATE OF GUJARAT & ANR. Petitioner(s)

VERSUS

SHREE RATNAKAR ENTERPRISE Respondent(s)

Date : 19/01/2016 This appeal was called on for pronouncement of JUDGMENT
today.

For Petitioner(s) Ms. Hemantika Wahi,Adv.

For Respondent(s)
Mr. Mohit Paul,Adv.

Hon'ble Mr. Justice Uday Umesh Lalit pronounced the judgement of the
Bench comprising Hon'ble Mr. Justice V. Gopala Gowda and His Lordship.
Delay condoned.
Leave granted.
The appeal is allowed in terms of the signed non-reportable judgment.

Pending application(s), if any,stand(s) disposed of.
|(VINOD KUMAR) | |(MALA KUMARI SHARMA) |
|COURT MASTER | |COURT MASTER |

(Signed Non-Reportable Judgment is placed on the file)

Reverse of the order - liable to be refunded with interest at 12% per annum from the date of withdrawal till the payment = “ In our view, the Arbitral Tribunal went beyond the scope of the contract and it clearly exceeded its jurisdiction. We, therefore, set aside the award insofar as it allows Claim No. 8. Consequently, the appeal stands allowed. At the interim stage, this Court had directed the Appellant to deposit a sum of Rs.70,65,039/- which upon deposit was withdrawn by the Respondent on furnishing a bank guarantee. The appellant is entitled to encash that bank guarantee to recover the sum that was deposited. No order as to costs.”= Interlocutory Application No.4 of 2015 was thereafter preferred by the appellant contending that the decretal amount was withdrawn by the respondent in December 2012 whereas the appeal was allowed in favour of the appellant on 24.4.2015 and that the respondent had reaped the benefits of decretal amount for more than three years. It was submitted that the Arbitral Tribunal had awarded interest @ 12% per annum against the appellant and that the respondent be directed to pay interest @ 12% per annum on the amount of Rs.70,65,039/- from the date of withdrawal till the date of actual payment.=The appellant is right in its submission that the Arbitral Tribunal in its award dated 09.01.2012 had awarded interest at the rate of 12% per annum on amounts awarded under various claims. Matter in issue in Civil Appeal No.6158 of 2013 pertained only to Claim No.8. In the fitness of things, the appellant is certainly entitled to interest at the same rate on the amount which was enjoyed by the respondent. The entitlement of the respondent to this amount stood negated by judgment and order dated 24.04.2015 and as such the respondent must pay back the amount with interest at the same rate. We therefore, direct that the respondent shall pay interest at the rate of 12% per annum on the amount in question namely Rs.70,65,039/- from the date of withdrawal till the amount was made over by the respondent to the appellant. Such payment shall be made within six weeks from today. Interlocutory Application Nos.4 and 5 stand disposed of accordingly

Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

I.A. Nos. 4 & 5

IN

CIVIL APPEAL NO. 6158 OF 2013

NATIONAL HIGHWAYS AUTHORITY OF INDIA ……Applicant/

Appellant
Versus

M/S NCC- KNR (JV) ….
Respondent

O R D E R

Uday Umesh Lalit J.

1. These Interlocutory Applications arise out of Civil Appeal No.6158 of
2013 which was disposed of by this Court on 24.4.2015. While allowing said
appeal preferred by National Highways Authority of India, the appellant
herein, it was directed by this Court as under:-
“ In our view, the Arbitral Tribunal went beyond the scope of the contract
and it clearly exceeded its jurisdiction. We, therefore, set aside the
award insofar as it allows Claim No. 8. Consequently, the appeal stands
allowed. At the interim stage, this Court had directed the Appellant to
deposit a sum of Rs.70,65,039/- which upon deposit was withdrawn by the
Respondent on furnishing a bank guarantee. The appellant is entitled to
encash that bank guarantee to recover the sum that was deposited. No order
as to costs.”

2. Soon thereafter Interlocutory Application No.3 of 2015 was filed on
behalf of the respondent, which was disposed of by this Court by its order
dated 8.5.2015, which order was to the following effect:-
“Mr. Amit George, leaned counsel appearing for the applicant-respondent
shall pay to the petitioner, National Highways Authority of India and,
therefore, the bank guarantee in question need not be encashed. He
undertakes that the respondent shall make the payment to the applicant
within four weeks from today. The said amount shall be paid by way of a
bank draft drawn on a nationalized bank. If the amount is not paid within
the stipulated period, the bank guarantee shall be encashed forthwith by
the petitioner.

I.A. No. 3 of 2015 stands disposed of accordingly.”

3. Accordingly, the respondent made over the amount in question within
the time stipulated under the order dated 08.05.2015. Interlocutory
Application No.4 of 2015 was thereafter preferred by the appellant
contending that the decretal amount was withdrawn by the respondent in
December 2012 whereas the appeal was allowed in favour of the appellant on
24.4.2015 and that the respondent had reaped the benefits of decretal
amount for more than three years. It was submitted that the Arbitral
Tribunal had awarded interest @ 12% per annum against the appellant and
that the respondent be directed to pay interest @ 12% per annum on the
amount of Rs.70,65,039/- from the date of withdrawal till the date of
actual payment.

4. The appellant is right in its submission that the Arbitral Tribunal
in its award dated 09.01.2012 had awarded interest at the rate of 12% per
annum on amounts awarded under various claims. Matter in issue in Civil
Appeal No.6158 of 2013 pertained only to Claim No.8. In the fitness of
things, the appellant is certainly entitled to interest at the same rate on
the amount which was enjoyed by the respondent. The entitlement of the
respondent to this amount stood negated by judgment and order dated
24.04.2015 and as such the respondent must pay back the amount with
interest at the same rate.

We therefore, direct that the respondent shall pay interest at the rate
of 12% per annum on the amount in question namely Rs.70,65,039/- from the
date of withdrawal till the amount was made over by the respondent to the
appellant. Such payment shall be made within six weeks from today.
Interlocutory Application Nos.4 and 5 stand disposed of accordingly.

……………………….J
(Dipak Misra)

..………………………J.
(Uday Umesh Lalit)
New Delhi
January 19, 2016
ITEM NO.1A-For Order COURT NO.10 SECTION XIV

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

I.A. 4 & 5 in Civil Appeal No(s). 6158/2013

NATIONAL HIGHWAYS AUTHORITY OF INDIA Appellant(s)

VERSUS

M/S NCC KNR JV Respondent(s)

Date : 19/01/2016 These applications were called on for pronouncement of
ORDER today.

For Appellant(s) Mr. T.S. Sidhu, Adv.
Ms. Gunjan S. Jain, Adv.
Mr. Vivek Oriel, Adv.
Mr. Vikas Soni, Adv.
For M/s. M. V. Kini & Associates

For Respondent(s)
Mr. R. Sathish,Adv.

Hon'ble Mr. Justice Uday Umesh Lalit pronounced the order of the
Bench comprising Hon'ble Mr. Justice Dipak Misra and His Lordship.
I.A. Nos. 4 and 5 are disposed of in terms of the signed non-
reportable order.
Pending application(s), if any, stand(s) disposed of.
|(VINOD KUMAR) | |(MALA KUMARI SHARMA) |
|COURT MASTER | |COURT MASTER |

(Signed Non-Reportable order is placed on the file)

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