Monday, January 27, 2014

Record Rs 6cr payout for lift accident in Delhi

The Nation Consumer Disputes Redressal Commission directing a payout of a record Rs 5.90 crore compensation to the next of kin of a Delhi man who died in a lift mishap a decade ago has given a great boost to the cause of several consumers and lawyers fighting similar battles between the city's consumer forums. 

Last week the national commission had directed OTIS, RAW and Military Engineering Services (MES) to pay the compensation to the family of Vipin Handa (46), Director with the Research & Analysis Wing (RAW) who was crushed to death after the stalled lift that he was being helped out of starting moving downwards. On March 20, 2003 Handa was in the lift with 12 other officers after finishing a meeting at the Research Analysis Wing (RAW) office, Lodhi Road, Delhi when it stalled between the seventh and sixth floors. While one person was rescued just before Handa, the others got out of the lift when it opened on the sixth floor. 

In 2005, his wife Rashmi Handa and two children Shristi and Kshitij filed the complaint before the National Consumer Disputes Redressal Commission. A technical committee had concluded that the lift had stalled due to voltage fluctuation. Further it said that when Handa was being rescued somebody had entered the Machine Room on the 11th floor and released the lift brakes through the Brake Release Key. This prompted the lift to move downwards. "Releasing the brakes through the Brake Release Key is the only cause of accident and is due to the human error or factor beyond any element of doubt," the commission concluded. While OTIS was held responsible for installing the lift without a voltage stabilizer, RAW was held guilty for not insisting on the stabilizer, failing to ensure that the contract for maintaining the lift was being followed through and turning a blind eye to the complaints received against the manufacturer. 

Otis India said that it deeply regretted Handa's death. "At Otis, safety is of paramount importance to us and we stay committed to ensuring safe and secure rides to millions of people using our elevators and escalators around the world on a daily basis. The unfortunate incident occurred due to unauthorized release of lift brakes while the customer's personnel were trying to move passengers out of the lift. We are examining details of the order and will take the necessary course of action." 

Reacting to the verdict activist and lawyer Shirish Deshpande said that the message was now loud and clear to all parties involved and they will not play with people's lives. "The Consumer Protection Act is a system correcting law and this judgement will go a long way to ensure that manufactures maintenance personnel and buildings where lifts installed will carry out their duties. Such compensation will send a strong signal to those who do not take their job seriously," 

Friday, January 24, 2014

PAN to be issued only after checking original documents

Copies of proof of identity, address and date of birth attached with PAN application forms will be checked against their original documents.

Applicants for permanent account numbers (PAN) will have to produce original documents related to identification, address and date of birth.

According to a statement issued by the Central Board of Direct Taxes (CBDT), the procedure for PAN allotment will change from February 3.

“Every PAN applicant has to submit self-attested copies of proof of identity, proof of address (POA) and date of birth (DOB) documents and also produce original documents of such POI/POA/DOB documents, for verification at the counter of PAN facilitation centres,” the statement said.

Currently, while document regarding date of birth is not required when applying for a PAN card, there is also no need to carry along original documents at the time of submitting the application.

The statement added that the copies of identity proof, address proof and date of birth have to be attached with PAN application form. This will be verified vis-a-vis the original documents at the time of submission. It does not indicate how the staff of companies with no particular experience will be able to glean the veracity or otherwise of the documents provided. Tax experts said that the change will make it more difficult for applicants to obtain a PAN card. Amarpal Chadha, tax partner, EY, said, “This will make it more difficult to obtain PAN, particularly for foreigners. People may not be comfortable sharing original documents with consultants. There are practical challenges which may unfold in the coming days and we hope for some more clarity on the same”.

PAN is a 10-digit alphanumeric number issued in the form of a laminated card by the Income Tax department to any person or entity applying for it or to whom the department has allotted a number without an application. An applicant can obtain a PAN card by paying a fee of Rs 85 along with service tax in cash, at PAN facilitation centre. So far, there are 14 crore PAN card-holders in India.

RBI asks public to start exchanging pre-2005 currency notes

 The Reserve Bank has advised the public to start exchanging pre-2005 notes at banks, saying the volume of such notes that are being withdrawn from circulation is 'not significant.'

"Members of public may initiate the process of exchanging notes at bank branches at their convenience," the RBI said in a statement.

The removal of older currency notes from circulation is a standard international practice, the RBI said.

The central bank is already withdrawing pre-2005 bank notes in a routine manner through banks as they have fewer security features than those printed subsequently.

In the Reserve Bank's view, the volume of bank notes printed before 2005 that are still in circulation is not significant enough to affect the public in a large way.

"The notes printed prior to 2005 will continue to be legal tender," it said, adding that even after July 1, any number of these old series notes can be exchanged by people at bank branches where they have accounts.

The RBI said it would continue to monitor and review the withdrawal of old notes so that the public is not inconvenienced.

The central bank announced the withdrawal of pre-2005 bank notes from the public in a January 22 statement.

Yesterday, Reserve Bank governor Raghuram Rajan said the order was not an attempt at demonetisation, nor had it anything to do with the forthcoming general election.

"I have to say that it (withdrawal of notes) has nothing to do with elections which certainly is not the objective," Rajan had said.

He said that these notes had, unfortunately, become less secure. The notes printed after 2005 have greater security features and the finance ministry had sought withdrawal of the pre-2005 notes.

The central bank had earlier discontinued printing of five-rupee notes but reintroduced the denomination to meet demand.

Earlier, the RBI had withdrawn a certain series of currency notes at the bank level but bearers were not asked to get them replaced.

As per RBI data, 7,351 crore pieces of currency notes were in circulation on March 31, 2013. Of this, 14.6 per cent were Rs 500 notes and 5.9 per cent were Rs 1,000 notes.

Supreme Court issues notices to Centre, Delhi govt over Kejriwal’s protest, asks police why they allowed dharna

The Supreme Court on Friday sent notices to the Centre and the Delhi government over the protest by Chief Minister Arvind Kejriwal and supporters of the Aam Aadmi Party.

The apex court said the issue involves matter of constitutional importance and sought replies in six weeks. The SC will also decide whether a constitutional post holder can resort to agitation in violation of law.

The court  questioned the Delhi police as to why it allowed Kejriwal and AAP supporters to assemble for the protest despite prohibitory orders and why no action was taken against them subsequently. The Delhi police sought time till next Friday to inform the SC as to how the unlawful assembly happened and about its actions.

The apex court disapproved the Delhi Police inaction in permitting people to gather outside the Rail Bhavan despite prohibitory orders under section 144 of Code of Criminal Procedure barring assembly of five and more persons being in force.

"How did they (people) assemble when prohibitory orders under secton 144 of CrPC was clamped. Why did you let it happen in the first place when the mob is already there," a bench comprising justices R M Lodha and Shiva Kirti Singh asked Delhi Police Commissioner B S Bassi.

"Why did police at all permit people to gather when it will amount to breach of prohibitory orders. What we are inclined to know is whether police acted," the bench said while adding that "by allowing five people it swelled into 500 and thereafter into thousands".

Observing that "the task in hand is to see that the constitutional provisions are respected," the bench sought explanation by Janaury 31 from the Police Commissioner why people were allowed to gather unlawfully at the site of dharna by Kejriwal.

AAP party was demanding action against policemen who refused to carry out a raid on an alleged drug and prostitution ring on a Delhi minister Somnath Bharti's directive last week.

"We want information on two queries as to why despite the prohibitory order under section 144 of CrPC the law enforcing agencies/police permit five and more persons unlawfully.

"Second whether law enforcing agencies/police acted appropriately and with utmost expedition in dispersing the unlawful assembly by force under section 129 (2) of CrPC after such assembly was informed under section 129 (1) of CrPC to disperse and despite such command the assembly did not disperse," the bench said in its order.

Kejriwal had led a protest demanding suspension of Delhi policemen for 'failing to arrest' the members of an alleged drug racket involving Ugandan nationals.

After two days of face-off with the police, Kejriwal called off the protest near the Rail Bhawan as Lieutenant Governor Najeeb Jung agreed to send the accused policemen on leave.

Friday, January 17, 2014

'Sexual harassment' case: HC puts curbs on media

Taking strong exception to what it called a âtrial by mediaâ, the Delhi High Court Thursday directed newspapers, TV channels and websites to refrain from publishing any report highlighting the allegations of sexual harassment against former Supreme Court judge Swatanter Kumar without specifying in the headline that they are âmere allegationsâ.
The court, however, made it clear the injunction will apply only until it hears the matter fully from February 24.
Justice Manmohan Singh also held that the observations made in the order were âprima facie in natureâ and would not stop the media from reporting court cases and events as facts covered under the ambit of fair reporting âon the basis of true, correct and verified informationâ.
The 42-page order of the court came in response to an application by Kumar, presently the chief of the National Green Tribunal, to restrain the media from reporting the allegations against him by a  former law intern.
Kumar had also filed a defamation case against The Indian Express, a senior reporter of the paper, Times Now, CNN-IBN and the former intern.
The court also issued a temporary injunction on all media organizations, restricting them from publishing photographs of the retired judge âwhich may suggest connection of the plaintiff with the said allegationsâ.
Taking note of the articles published in The Indian Express and the debates on the two TV channels between January 11 and 13, the court held that the media was restrained from publishing any article or write-up or telecasting programmes that highlight the allegations against Kumar in the form of headlines connecting or associating him with those allegations, particularly without disclosing in the headline that they are mere allegations against him, or any other similar articles or TV programmes.
The court also observed that news reports in multiple newspapers and TV channels âmake out a strong prima facie caseâ for granting the injunction sought by the former judge, and directed the media organizations to âdelete the offending contentâ on the internet or other electronic media âwithin 24 hoursâ.
The court accepted Kumarâs argument that the allegations against him were as yet not verified and he had not been investigated or tried in any manner.
âI find that the plaintiff has been able to make out a strong prima facie case on the basis of the disclosure of the material available on record...and the CDs which clearly show that the defendants have published the write-ups and telecasted by highlighting the allegations on the front page in order to create sensation amongst public and made it apparent by creating the impression that the plaintiff in all probability is involved in such incident,â the court said.
âPrima facie, I find that the publications...connect the plaintiff with such allegations in the manner which creates a trial by media kind of situation by creating a sensation amongst the public by highlighting and underscoring mere allegations on the front pages of daily routine news and thus the same or similar nature of publications are required to be postponed,â the court held.
Cautioning the media against what it said was âexcessive adverse publicityâ, the court has also held that such publication could be curtailed by the courts âeven if some kind of fairness is ascribed to the publicationâ because it would hamper a fair trial.
âIt may also result in creating an atmosphere in the form of public opinion wherein a person may not be able to put forward his defence properly and his likelihood of getting fair trial would be seriously impaired,â it said.
The court observed that the âcontinuous adverse publicityâ of persons holding positions of public confidence was âdestructive of their reputation as well as the public good in the form of the loss of confidence in the institution itself...â
Referring to the gap between the time of the alleged incident of harassment and the complaint being filed by the former intern, the court said that a âbalanced approachâ needed to be taken in light of the mechanisms provided under the Sexual Harassment at Workplace Act.
It said it was also of the view that there should be a limitation of time for the purpose of filing of such complaints, otherwise no one would know when the complaint ought to have been filed and decided.

Wednesday, January 15, 2014

UNITED INDIA INS.CO.LTD. v. SUNIL KUMAR & ANR [2013] INSC 997 (29 October 2013)


CIVIL APPELLATE JURISDICTION Civil Appeal No. 9694 of 2013 (@Special Leave Petition (Civil) No.7586 of 2012) 

United India Insurance Company Ltd. ... Appellant 
Sunil Kumar & Anr.  Respondents 

K.S. Radhakrishnan, J.

1. Leave granted.
2. Heard learned counsel for the parties. Learned counsel appearing for the Respondent submitted that in view of the judgment of this Court in United India Insurance Company Ltd. v. Shila Datta and others [(2011) 10 SCC 509], this matter will have to be referred to a larger Bench, especially with regard to points no.(iii) to (v) referred to in the above- mentioned judgment, which are in conflict with the judgment of this Court in National Insurance Co. Ltd. v. Nicolletta Rohtagi [(2002) 7 SCC 456].
The impugned order, we notice, is based on the principle laid down in Nicolletta Rohtagi’s case (supra), the correctness of which is doubted in Shila Datta’s case (supra). In the present case, the claim petition was filed by the Respondent under Section 163-A of the Motor Vehicles Act, 1988, claiming compensation for the injury sustained by him in a road accident occurred on 20.11.2006. The Tribunal after recording the evidence and after hearing the parties, vide its order dated 16.8.2011 passed an award for a sum of Rs.3,50,000/- along with interest at the rate of 7% per annum from the date of the filing of the petition till realization.
Aggrieved by the same, the Insurance Company filed an appeal before the High Court of Delhi. The High Court placing reliance on the judgment in Nicolletta Rohtagi’s case (supra) dismissed the appeal since the Insurance Company failed to comply with Section 170 of the Motor Vehicles Act and the Insurance Company has come up with this appeal. Learned counsel for the Respondent contended that the question whether permission is required or not under Section 170 stands referred to a larger Bench.
3. We have yet another issue to be examined. As already indicated that in the instant case, claim petition was filed under Section 163-A of the Motor Vehicles Act, which was resisted by the Insurance Company contending that the same is not maintainable since the injured himself was driving the vehicle and that no disability certificate was produced. A Two-Judge Bench of this Court in National Insurance Company Limited v. Sinitha and others [(2012) 2 SCC 356] examined the scope of Section 163-A of the Motor Vehicles Act and took the view that Section 163-A of the Act has been founded under “fault liability principle”. Referring to another judgment of a co-equal Bench in Oriental Insurance Co. Ltd. v. Hansrajbhai V.
Kodala [(2001) 5 SCC 175], the learned Judges took the view that while determining whether Section 163-A of the Motor Vehicles Act, 1988 is governed by the fault or the no-fault liability principle, Sections 140(3) and (4) are relevant. The Bench noticed under Section 140(3), the burden of pleading and establishing whether or not wrongful act, neglect or default was committed by the person (for or on whose behalf) compensation is claimed under Section 140, would not rest on the shoulders of the claimant. The Court also noticed that Section 140(4) of the Motor Vehicles Act further reveals that a claim for compensation under Section 140 of the Act cannot be defeated because of any of the fault grounds (wrongful act, neglect or default).
4. The Division Bench in Sinitha’s case (supra), then took the view that under Section 140 of the Act so also under Section 163-A of the Act, it is not essential for a claimant seeking compensation to plead or establish that the accident out of which the claim arises suffers from wrongful act or neglect or default of the offending vehicle. The Bench then expressed the view that the legislature designedly included the negative clause through Section 140(4) of the Motor Vehicles Act, but consciously omitted the same in the scheme of Section 163-A of the Act intentionally and purposefully. The Court also concluded, on a conjoint reading of Sections 140 and 163-A, the legislative intent is clear, namely, that a claim for compensation raised under Section 163-A of the Act need not be based on pleadings or proof at the hands of the claimants showing absence of wrongful act, being neglect or default, but the Bench concluded that it is not sufficient to determine whether the provision falls under the fault liability principle. The Court held that to decide whether the provision is governed by the fault liability principle, the converse has to be established i.e. whether a claim raised thereunder can be defeated by the party concerned (the owner or the insurance company) by pleading and proving wrongful act, neglect or default. Interpreting Section 163-A of the Act, the Judges in Sinitha’s case (supra) held that it is open to the owner or the insurance company, as the case may be, to defeat a claim under Section 163-A of the Act by pleading and establishing through cogent evidence a fault ground (wrongful act or neglect or default). The Court concluded that Section 163 of the Act is founded under the fault liability principle.
5. We find difficult to accept the reasoning expressed by the Two-Judge Bench in Sinitha’s case (supra). In our view, the principle laid down in Hansrajbhai V. Kodala’s case (supra) has not been properly appreciated or applied by the Bench. In fact, another Division Bench of this Court vide its order dated 19.4.2002 had doubted the correctness of the judgment in Hansrajbhai V. Kodala’s case (supra) and referred the matter to a Three- Judge Bench to examine the question whether claimant could pursue the remedies simultaneously under Sections 166 and 163-A of the Act. The Three- Judge Bench of this Court in Deepal Girishbhai Soni & Ors. v. United India Insurance Co. Ltd., Baroda [(2004) 5 SCC 385] made a detailed analysis of the scope of Sections 166 and 163-A and held that the remedy for payment of compensation both under Sections 163-A and 166 being final and independent of each other, as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. The Court also extensively examined the scope of Section 163-A and held that Section 163-A was introduced in the Act by way of a social security scheme and is a Code by itself. The Court also held that Section 140 of the Act deals with interim compensation but by inserting Section 163-A, the Parliament intended to provide for making of an award consisting of a pre-determined sum without insisting on a long- drawn trial or without proof of negligence in causing the accident. The Court noticed that Section 163-A was inserted making a deviation from the common law liability under the Law of Torts and also in derogation of the provisions of the Fatal Accidents Act. The Three-Judge Bench also held that Section 163-A has an overriding effect and provides for special provisions as to payment of compensation on structured formula basis. Sub- section (1) of Section 163-A contains a non-obstante clause, in terms whereof the owner of the motor vehicle or the authorized insurer is liable to pay, in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. The Court also held that the scheme of the provisions of Section 163-A and Section 166 are distinct and separate in nature. In Section 163-A, the expression "notwithstanding anything contained in this Act or in any other law for the time being in force" has been used, which goes to show that the Parliament intended to insert a non-obstante clause of wide nature which would mean that the provisions of Section 163-A would apply despite the contrary provisions existing in the said Act or any other law for the time being in force. Section 163-A of the Act covers cases where even negligence is on the part of the victim. It is by way of an exception to Section 166 and the concept of social justice has been duly taken care of.
The above-mentioned Three-Judge Bench judgment was not placed before the learned Judges who decided the Sinitha’s case (supra).
6. We find, both Sections 140 and 163-A deal with the case of death and permanent disablement. The expression “permanent disablement” has been defined under Section 142, so far as Section 140 is concerned. So far as Section 163-A is concerned, the expression "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923. Both Sections 140 and 163-A deal with cases of no fault liability. In order to prefer a claim under Section 140(2), claimant need not plead or establish that death or permanent disablement, in respect of which claim has been made, was due to any wrongful act, neglect or default of the deceased or the disabled person. Similarly, under Section 163-A also, claimant shall not be required to plead or establish that death or permanent disablement, in respect of which claim has been made, was due to any wrongful act, neglect or default of the deceased or the injured, as the case may be. In other words, an enquiry as to who is at fault is foreign to the determination of a claim under Section 140 as well as Section 163-A.
Claim under Section 140 as well as Section 163-A shall not be defeated by the Insurance Company or the owner of the vehicle, as the case may be, by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement claim has been made. So also, the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of share of such person in the responsibility for his death or permanent disablement.
7. We find, in Sinitha’s case (supra), one of the factors which weighed with the learned Judges was the absence of a similar provision like sub- section (4) of Section 140 in Section 163-A which, according to the learned Judges, has been intentionally and purposefully done by the legislature.
We find it difficult to accept that view. We are of the view that if such an interpretation is given, the very purpose and object of Section 163-A would be defeated and render the provision otiose and a claimant would prefer to make a claim under Section 140, rather than under Section 163-A of the Act by exercising option under Section 163-B of the Act. Because, if a claim under Section 140, is raised because of Section 140(4), such a claim would not be defeated by the owner of the vehicle or the insurance company, as the case may be, and the claimant may get a fixed sum prescribed under Section 140(2). Sub-section (4) of Section 140 has been introduced by the legislature since claim under Section 140 would be followed by Section 166. So far as Section 163-A is concerned, claim is restricted on the basis of pre-determined formula, unlike in the case of application under Section 166.
8. We are, therefore, of the view that liability to make compensation under Section 163-A is on the principle of no fault and, therefore, the question as to who is at fault is immaterial and foreign to an enquiry under Section 163-A. Section 163-A does not make any provision for apportionment of the liability. If the owner of the vehicle or the insurance company is permitted to prove contributory negligence or default or wrongful act on the part of the victim or claimant, naturally it would defeat the very object and purpose of Section 163-A of the Act.
Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver. Once it is established that death or permanent disablement occurred during the course of the user of the vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the compensation, which is a statutory obligation.
9. We, therefore, find ourselves unable to agree with the reasoning of the Two-Judge Bench in Sinitha’s case (supra). Consequently, the matter is placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of Section 163- A of the Motor Vehicles Act, 1988, as well as the points no.(iii) to (v) referred to in Shila Datta’s case (supra) 

(K.S. Radhakrishnan)



Pathan Mohammed Suleman Rehmatkhan  Petitioner 
State of Gujarat & Ors. Respondents 

O R D E R 

K.S. Radhakrishnan, J.

1. The State of Gujarat, it is seen, in the year 2005 thought of developing an International Financial Services City at Ahmedabad at par with the globally benchmarked financial centres such as Sinjuku-Tokyo, Lujiazui-Shanghai, La Defense Paris, London Dockyard, having offshore banking facilities.
The State conducted detailed study through its wholly owned company called Gujarat State Financial Services Limited (GSFSL). The study report was prepared in February 2006 which strongly recommended for execution of the project after undertaking a feasibility study. Since the project was first of its kind in the country and involved commercial risk, the State Government thought of undertaking the project of a public-private partnership so that the responsibility and the risk, if any, could be shared.
2. The State organized the “Vibrant Gujarat Urban Summit” in the year 2007. The third respondent, Infrastructure Leasing &
Financial Services Ltd. (ILFS) showed its commitment for development of the national financial services centre and a Memorandum of Understanding was signed with the State Government on 16.2.2007. On 15.5.2007, a joint venture agreement was executed between the State represented by the Gujarat Urban Development Company Limited (GUDC) and the third respondent for forming a 50:50 joint venture company in the name of Gujarat International Financial Tech City Limited i.e. GIFT Company Ltd. on 22.3.2011 and 7.6.2011 the State Government issued and allotted 412 acres of land to the fourth respondent i.e. GIFT Company Ltd. and 250 acres of land to its wholly owned subsidiary i.e. GIFT SEZ Limited with a right to mortgage while retaining ownership thereof with the State Government.
3. On 18.8.2011, the fifth respondent, Government of India, issued a notification under Special Economic Zones Act, 2005, for the area of 261 acres of land for development, operation and maintenance of the project. The Government of India on 27.12.2011, accorded approval to the GIFT SEZ Limited for setting up of an International Financial Services Centre.
Facts reveal, by April 2013, out of the estimated investment of Rs.9,700 crore for the entire proposed project, an amount of Rs.450 crore has already been spent by fourth respondent towards development expenses in creating infrastructure.
Fourth respondent has already constructed around 12.8 kms. of roads in the township. The fourth respondent has also constructed a water treatment plant and sewerage treatment plant having respective capacity of 3 MLD and 2.2 MLD and distict cooling system, including power sub-station for 66 KV, utility tunnel of around 2.2 kms. and automated waste collection system for load of around 5 TPD. The fourth respondent has also constructed an artificial water body known as “Samriddhi Sarovar” having circumference of 1.5 kms, and a water pumping station at Nabhoi and a pipeline of almost 12 kms. has been laid to provide water from Narmada canal to the township. Various other activities are also going-on on a war-footing.
4. The project picked up momentum and nobody challenged the joint venture agreement or the decisions taken by the State Government to allot lands to the fourth respondent for creating infrastructure for development and operation of the project. The Comptroller and Auditor General of India (CAG), however, had made certain remarks in his report no.2 of 2013 for the year ending on 31st March, 2011, stating that the performance audit revealed a number of system and compliance deficiencies and the State Government did not adopt a uniform policy in alienation and allotment of land.
Further, it was also stated that the delay in finalization has resulted in blocking up of revenue of the Government and there was no mechanism for review and correction of incorrect orders issued by the subordinate officers to safeguard Government revenue and that no proper monitoring system existed in the Department to ascertain and vacate encroachment cases. Relevant portion of the CAG report reads as follows :- “3.5.13 Inconsistent decision to allot land at token amount Gujarat Urban Development Company Limited (GUDC), a Government Company was authorised by Government in May 2007 to undertake the Gujarat International Finance City project (GIFT city) in a joint venture with Infrastructure Leasing & Financial Services Ltd. (IL&FS) for setting up an International Finance City. Subsequently, a Company called GIFT Company Ltd, (the Company) was formed by IL&FS and GUDC as a joint venture.
As per the direction of the Government in Revenue Department, Collector, Gandhinagar handed over advance possession of Government land admeasuring 26,77,814 valued by the DLVC/SLVC during September 2007 to December 2008 at Rs.500 crore situated at fourteen survey numbers of four Talukas of Gandhinagar district to GUDC for setting up the GIFT city. The GUDC proposed (June 2007) to Government for relaxation in payment of occupancy price for the land. Chief Secretary, Principal Secretaries of Revenue Department, Finance Department and UDUHD opined that the land shall be allotted at market value as per the extant policy on valuation of Government land.
However, moratorium period of two years shall be allowed for payment of 50 per cent of the value of land and remaining 50 per cent payable as a soft loan. Meanwhile, Ministry of Commerce and Industry, Govt. of India accorded a formal approval in January 2008 to GIFT Company Ltd., for the proposed Multi Services SEZ covering an area of 10,11,750 (250 acres).
As per GR dated 22.11.2004, if the allotment could not be made within completion of two years from the date of DLVC's valuation, it was to be refixed afresh. The land was allotted in April/June 2011 by Government to the Company after expiry of two years from the date of valuation of DLVC, though fresh valuation was not done. Scrutiny of Cabinet note indicated that Collector, Gandhinagar had stated that the value of the allotted land was approximately Rs.2,760 Crore. However, Cabinet allotted 10,11,744 of land to GIFT SEZ Ltd., and 16,66,070 to GIFT Company Ltd., for a nominal price of rupee one with the condition that during the first phase of the project, the surplus amount received by the developers shall be divided between Government and the two Companies in 50:50 ratio. During the execution of subsequent phases, the surplus amount, which may be received over and above the base cost of the project shall be divided between Government and the GIFT Company Ltd., in 80:20 ratio.
We noticed that land was allotted without ascertaining its value as on the date of allotment. Advance possession of land was given to an organisation other than Boards/ Corporations/ SEZ in contravention of the Government policy. Land was allotted negating the views of Finance Department, Revenue Department and UDUHD without collecting occupancy price to a minimum extent of Rs.500 crore as on the dates of advance possession of land.
After this was pointed out, the Government stated (July 2012) that it was a Public Private Partnership (PPP) project and development rights were only given and ownership rights vested with the Government. The reply is not acceptable as the Government land is allotted at new and restricted tenure wherein the allottee is not entitled to sell, transfer or mortgage the land without the permission of the Collector.
However, in this case, the Government authorised the allottee to mortgage/lease the land without seeking permission from the Collector/Government. Further, the State Government has produced no records to indicate that allotment for the GIFT city was on the basis of PPP. The State Government despite repeated requests did not produce to audit the Joint Venture Agreement signed between Government/GUDC and IL&FS. Non production of the records to audit has the consequential effect of limiting the scope of audit.
3.5.14 Conclusion The performance audit revealed a number of system and compliance deficiencies. Government did not adopt a uniform policy in alienation and allotment of land. Delay in finalisation of valuation also resulted in blocking up of revenue of the Government. There was no mechanism for review and revision of incorrect orders issued by the subordinate officers to safeguard Government revenue. No proper monitoring system exists in the Department to ascertain and vacate encroachment cases.”
5. The petitioner herein filed a Public Interest Petition before the Gujarat High Court primarily based on the report of CAG seeking a declaration that the action of the State Government for allotting land in favour of the respondent company was illegal and void and sought for an investigation by the Central Bureau of Investigation and also for other consequential reliefs. The Gujarat High Court after hearing all the parties at length and, after elaborately considering the materials on record, framed the following questions :
“(i) Whether the report of the CAG by itself can legally be made the basis for the reliefs claimed in the petition? (ii) Whether the decision of the State Government to develop an international finance service city on the basis of a public private partnership model with a social objective could be termed as arbitrary, discriminatory and an act of favouritism and/or nepotism violating the sole object of equality clause embodied in Article 14 of the Constitution of India? (iii) Whether the petition deserves to be dismissed on the ground of delay and laches?
6. The Gujarat High Court felt, though the Writ Petition could have been dismissed on the ground of delay, the Court still examined all the contentions raised by the parties and recorded a clear finding on all the issues. The High Court placed reliance on the judgment of this Court in Arun Kumar Agrawal v. Union of India & others (2013) 7 SCC 1 and held that having regard to the powers conferred on the CAG, CAG is not entitled to question the merits of the policy objectives of the State Government.
The Court also held that it cannot be said that the State Government had given largesse to an individual according to its sweet will and whims and took the view that the Government took a conscious commercial decision after perusing the pros and cons of the entire matter and that the action of the respondent was not based on extraneous considerations or vitiated by malafide exercise of powers. Holding so, the writ petition was dismissed by the impugned order, against which this special leave petition has been preferred.
7. We heard Shri Y.N. Oza, learned counsel for the petitioner and perused the records, as well as counter affidavit and reply affidavit filed by the parties before the Gujarat High Court. The entire case of the petitioner is based on the CAG report. The applicability and the binding characteristics of such report were considered by the High Court. In Arun Agrawal’s case (supra), this Court held as follows:- “We may, however, pointed out that since the report is from a constitutional functionary, it commands respect and cannot be brushed aside as such, but it is equally important to examine the comments what respective Ministries have to offer on the CAG’s Report. The Ministry can always point out, if there is any mistake in the CAG’s report or the CAG has inappropriately appreciated the various issues.”
8. CAG is a key figure in the system of parliamentary control of finance and is empowered to delve into the economy, efficiency and effectiveness with which the departmental authorities or other bodies had used their resources in discharging their functions. CAG is also the final audit authority and is a part of the machinery through which the legislature enforces the regulatory and economy in the administration of public finance, as has been rightly pointed out by the High Court. But we cannot lose sight of the fact that it is the Government which administers and runs the State, which is accountable to the people. State’s welfare, progress, requirements and needs of the people are better answered by the State, also as to how the resources are to be utilized for achieving various objectives. If every decision taken by the State is tested by a microscopic and a suspicious eye, the administration will come to stand still and the decisions-makers will lose all their initiative and enthusiasm. At hindsight, it is easy to comment upon or criticize the action of the decision maker. Sometimes, decisions taken by the State or its administrative authorities may go wrong and sometimes it may achieve the desired results. Criticisms are always welcome in a Parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot belittled, even if that decision was ultimately proved to be wrong.
9. We have extensively referred to these principles in Arun Agrawal’s case (supra), where we have held as follows:- “This Court sitting in the jurisdiction cannot sit in judgment over the commercial or business decision taken by parties to the agreement, after evaluating and assessing its monetary and financial implications, unless the decision is in clear violation of any statutory provisions or perverse or taken for extraneous considerations or improper motives. States and its instrumentalities can enter into various contracts which may involve complex economic factors. State or the State undertaking being a party to a contract, have to make various decisions which they deem just and proper. There is always an element of risk in such decisions, ultimately it may turn out to be correct decision or a wrong one. But if the decision is taken bona fide and in public interest, the mere fact that decision has ultimately proved to be wrong, that itself is not a ground to hold that the decision was mala fide or taken with ulterior motives.”
10. Reference in this regard may also be made to the judgment of this Court in Centre for Public Interest Litigation & Ors. v. Union of India &
Ors. AIR 2012 SC 3725, wherein it was held that when the CAG report is subject to scrutiny by the Public Accounts Committee and the Joint Parliamentary Committee, it would not be proper to refer the findings and conclusions contained therein. The Court even went on to say that it is not necessary to advert to the reasoning and suggestions made, as well.
11. We have gone through the salient features of the Project referred to in the various orders passed by the State Government and the resolutions dated 22.3.2011 and 7.6.2011 allotting lands to fourth respondent and also the notification dated 18.8.2011 issued under the Special Economic Zones Act, 2005, and we are in agreement with the High Court that it cannot be said that the State has acted against public interest. The Government has noticed the development and the employment opportunities that the project would bring into the State. The decision taken by the Government was also transparent and that the Government has also got substantial stake in the Public-Private Partnership and has also taken care of its interests while entering into the various agreements. Learned senior counsel fairly submitted that he is not attributing any motives or stating that the decision was taken for extraneous reasons, but contended that the Government had, without any application of mind, parted with a large tracks of land worth crores of rupees to the private party, which is not in the interest of the State.
12. We are of the view that these are purely policy decisions taken by the State Government and, while so, it has examined the benefits the project would bring into the State and to the people of the State. It is well settled that non-floating of tenders or absence of public auction or invitation alone is not a sufficient reason to characterize the action of a public authority as either arbitrary or unreasonable or amounted to mala fide or improper exercise of power. The Courts have always held that it is open to the State and the authorities to take economic and management decision depending upon the exigencies of a situation guided by appropriate financial policy notified in public interest. We are of the view that is what has been done in the instant case and the High Court has rightly held so. We, therefore, find no reason to entertain this Special Leave Petition and the same is dismissed.
(K.S. Radhakrishnan) 

Sunday, January 5, 2014

JANAK DULARI DEVI & ANR. v. KAPILDEO RAI & ANR. [2011] INSC 399 (15April 2011)


Janak Dulari Devi & Anr. ... Appellants 
Kapildeo Rai & Anr. ... Respondents 


Plaintiffs in a suit for specific performance, aggrieved by the judgment and decree of the Patna High Court dated 3.1.2002 dismissing his second appeal against the decision of the first appellate court dated 16.12.1997 dismissing their suit (in reversal of the judgment and decree of the trial court dated 27.8.1990 decreeing the suit) have filed this appeal by special leave. 2

2. The case of the appellants in brief is as under : The second respondent was the owner of the suit property. The second respondent executed a sale deed dated 22.2.1988 (registered on 7.3.1988) in respect of the suit property in favour of the appellants, for a consideration of Rs.22000/-; that Rs.17,000 was paid by the appellants to the second respondent, at the time of execution and registration of sale deed; that the balance of Rs.5000 was to be paid subsequently, when the vendor requested for the said payment; that the second respondent retained the registration receipt in regard to the sale deed, agreeing to deliver it to the appellants against payment of the balance sale consideration; that on execution of the sale deed, by the second respondent, his right, title and interest in the suit property passed to the appellants and possession of the land sold was also delivered to them; that subsequently the second respondent avoided receiving the balance of Rs.5000 and failed to deliver the registration receipt; that the appellants issued a legal notice calling upon the second respondent to deliver the registration receipt so that they could collect the original registered sale deed, but the second respondent send a reply denying the receipt of Rs.17000 and stating that the entire consideration was due; and that therefore, it became necessary for the appellants to file the suit. The appellants sought a decree for a direction to the second respondent to deliver the registration receipt relating to the sale 3 deed dated 22.2.1988 by receiving the balance sale consideration of Rs.5000 and that in case the second respondent had already obtained the original sale deed from the office of the Sub-Registrar, then for a direction to deliver the same to the appellant. The said suit was valued at Rs.5000.

3. The second respondent filed his written statement. He alleged that he had agreed to sell the property as he urgently required the money for celebrating the marriage of his daughter; that he executed and registered the sale deed on 22.2.1988; that the appellant did not pay any part of the consideration and the allegation that he had paid Rs.17000 towards the sale price at the time of execution of sale deed was false; that the appellants had played a fraud upon him by stating in the deed that Rs.17000 was already paid towards the sale price and making him to sign the sale deed without reading the deed; that when he demanded the sale price, as the appellants stated that the sale consideration would be paid later, he retained the registration receipt and did not deliver possession; that it was the intention of parties that title in the property should pass to the appellants and possession should be delivered, only on payment of the consideration of Rs.22000 by the appellants; that as the appellants failed to pay the sale consideration, he cancelled the said sale deed dated 22.2.1988 on 18.3.1988 and sold the 4 property to the first respondent on 29.8.1988 for a consideration of Rs.19000 and also delivered possession of the property to the first respondent and ever since then the first respondent is in possession of the suit property. He contended that as the title and possession remained with him even after execution and registration of the sale deed in favour of the appellants, and as the sale price was not paid, he was justified in canceling/rescinding the sale and the appellants were not entitled to any relief.

4. The subsequent purchaser (first respondent herein) was thereafter impleaded as the second defendant in the suit. The court framed appropriate issues as to whether a sale deed executed on 22.2.1988 was for consideration; whether Rs.17000 was paid by the appellants towards the sale price at the time of execution of the sale deed; whether the appellants had tendered the balance of Rs.5000 to the second respondent; whether the sale deed was cancelled on 18.3.1988; whether the second respondent had any right to execute a sale deed dated 29.8.1988 in favour of the first respondent; whether the appellants were entitled to receive the original sale deed dated 22.2.1988; whether the suit as framed was maintainable and appellants had valid cause of action for the suit; and whether the suit was barred by 5 limitation. The appellant examined seven witnesses and the defendant examined six witnesses. Both sides marked several documents.

5. The trial court by judgment dated 27.8.1990 decreed the suit with costs subject to payment of court fee by the appellants, on Rs.22000. The trial court held that the appellants had proved the payment of part sale price of Rs.17000 to second respondent; that on the execution of the sale deed by the second respondent, title passed to the appellants and the appellants were entitled to declaration of title and recovery of possession. Feeling aggrieved the first respondent filed an appeal. The first appellate court, by judgment and decree dated 16.12.1997, allowed the appeal and dismissed the suit. It held that the plaintiffs/appellants had failed to prove payment of Rs.17000 or of any part of the consideration; that as no part of the sale price was paid and as the Registration Receipt and possession were retained by the second respondent, the intention of parties was that title should not pass to the appellants until payment was made; and that as a consequence of non- payment of the price, the second respondent was justified in cancelling the sale deed and selling the property to the first respondent. The second appeal filed by the appellant, was dismissed by the High Court by the impugned judgment dated 3.1.2002, affirming the finding of facts recorded by the first 6 appellate court. The said judgment is challenged in this appeal by special leave.

6. On the contentions urged, the following questions arise for consideration in this appeal :

(i) Whether the appellants had paid Rs.17000/- towards sale price to second respondent? (ii) Whether title to the property passed to the appellants on execution of the sale deed? (iii) Whether the second respondent-vendor was justified in cancelling/ repudiating the sale on the ground that the sale consideration was not paid? (iv) Whether the appellants are entitled to the relief claimed in the suit? Re: Question (i)

7. In the plaint, the specific plea of the plaintiffs-appellants in regard to payment of Rs.17000 was that it was initially agreed that the consideration would not be paid at the time of execution and registration of the sale deed, but would be paid later, against exchange with the Registration Receipt; that the appellants paid Rs.17000 to the second respondent at the time of registration of the sale deed; and that though the appellants were ready to pay the balance of Rs.5000, the second respondent stated that he would take 7 the said amount when he needed it in exchange of the registration receipt. But the evidence led by the appellants was contrary to the pleadings. PW3 (the attesting witness to the sale deed), PW4, PW6 (first plaintiff) and PW7 (husband of the first plaintiff) deposed that a sum of Rs.17,000 was paid to the defendant at the residence of the first plaintiff, that thereafter they went to the Sub-Registrar's office at Arrah and got the sale deed written by the scribe - PW5, and that thereafter, the second respondent executed the sale deed and got it registered. The sale deed dated 22.7.1988 also recited that Rs.17000 was received by the vendor prior to the execution of the sale deed and the balance of Rs.5000 was to be paid at the time of transfer of Registration Receipt. The first appellate court after analyzing the evidence held that the evidence was contrary to the pleadings and therefore liable to be rejected. When what is pleaded is not proved, or what is stated in the evidence is contrary to the pleadings, the dictum that no amount of evidence, contrary to the pleadings, howsoever cogent, can be relied on, would apply. The first appellate court also found that there was no endorsement in the sale deed by the Sub-Registrar about payment of Rs.17000 in his presence, nor any separate receipt existed to show the payment of Rs.17000 prior to the preparation and the execution of the sale deed. The first appellate court believed the evidence of DW1 (attesting witness to the sale deed) and DW4 8 (the second respondent) that they did not go to the residence of the first appellant on 22.2.1988, but had gone directly to the Sub-Registrar's office; that by then the sale deed had already been got written by the first appellant's husband; that the sale deed was not read over to them; that the second respondent was informed that the sale price would be paid subsequently at the village and that sale could be completed and possession be delivered on payment and exchange of the Registration Receipt. The first appellate court also noted that the appellants alleged that there were two independent witnesses present at the relevant time, namely Dharmanand Pandey and Bindeshwar Pandey, but neither of them was examined. The first appellate court also referred to the recitals in the sale deed and the manner of the execution of the sale deed and concluded that no part of the sale consideration had been paid. This finding of fact recorded by the first appellate court, that the appellants had not established the payment of Rs.17000, after consideration of the entire evidence, affirmed by the High Court in second appeal, does not call for interference, in an appeal under Article 136 of the Constitution in the absence of any valid ground for interference. 9 Re: Questions (ii) and (iii)

8. Where the intention of the parties is that passing of title would depend upon the passing of consideration, evidence is admissible for the purpose of contradicting the recital in the deed acknowledging the receipt of consideration. In Bishundeo Narain Rai vs. Anmol Devi & Ors. [1998 (7) SCC 498], this Court had occasion to consider the question as to when the ownership and title in a property will pass to the transferee, under a deed of conveyance. This Court observed :

"Section 8 of the Transfer of Property Act declares that on a transfer of property all the interests which the transferor has or is having at that time, capable of passing in the property and in the legal incidence thereof, pass on such a transfer unless a different intention is expressed or necessarily implied. A combined reading of Section 8 and Section 54 of the Transfer of Property Act suggests that though on execution and registration of a sale deed, the ownership and all interests in the property pass to the transferee, yet that would be on terms and conditions embodied in the deed indicating the intention of the parties. It follows that on execution and registration of a sale deed, the ownership title and all interests in the property pass to the purchaser unless a different intention is either expressed or necessarily implied which has to be proved by the party asserting that title has not passed on registration of the sale deed. Such intention can be gathered by intrinsic evidence, namely, from the averments in the sale deed itself or by other attending circumstances subject, of course, to the provisions of Section 92 of the Evidence Act, 1872."

9. In Kaliaperumal vs. Rajagopal & Anr. [2009 (4) SCC 193], this Court again considered the issue and held:

"It is now well settled that payment of entire price is not a condition precedent for completion of the sale by passing of title, as Section 54 of Transfer of Property Act, 1882 ("the Act", for short) defines `sale' as a transfer of ownership in exchange for a price paid or promised or part paid and part promised. If the intention of parties was that title should pass on 10 execution and registration, title would pass to the purchaser even if the sale price or part thereof is not paid. In the event of non-payment of price (or balance price as the case may be) thereafter, the remedy of the vendor is only to sue for the balance price. He cannot avoid the sale. He is, however, entitled to a charge upon the property for the unpaid part of the sale price where the ownership of the property has passed to the buyer before payment of the entire price, under Section 55(4)(b) of the Act. Normally, ownership and title to the property will pass to the purchaser on registration of the sale deed with effect from the date of execution of the sale deed. But this is not an invariable rule, as the true test of passing of property is the intention of parties. Though registration is prima facie proof of an intention to transfer the property, it is not proof of operative transfer if payment of consideration (price) is a condition precedent for passing of the property. The answer to the question whether the parties intended that transfer of the ownership should be merely by execution and registration of the deed or whether they intended the transfer of the property to take place, only after receipt of the entire consideration, would depend on the intention of the parties. Such intention is primarily to be gathered and determined from the recitals of the sale deed. When the recitals are insufficient or' ambiguous the surrounding circumstances and conduct of parties can be looked into for ascertaining the intention, subject to the limitations placed by section 92 of Evidence Act. x x x x There is yet another circumstance to show that title was intended to pass only after payment of full price. Though the sale deed recites that the purchaser is entitled to hold, possess and enjoy the scheduled properties from the date of sale, neither the possession of the properties nor the title deeds were delivered to the purchaser either on the date of sale or thereafter. It is admitted that possession of the suit properties purported to have been sold under the sale deed was never delivered to the appellant and continued to be with the respondents. In fact, the appellant, therefore, sought a decree for possession of the suit properties from the respondents with mesne profits. If really the intention of the parties was that the title to the properties should pass to the appellant on execution of the deed and its registration, the possession of the suit properties would have been delivered to the appellant."

10. Where the sale deed recites that on receipt of the total consideration by the vendor, the property was conveyed and possession was delivered, the 11 clear intention is that title would pass and possession would be delivered only on payment of the entire sale consideration. Therefore, where the sale deed recited that on receipt of entire consideration, the vendor was conveying the property, but the purchaser admits that he has not paid the entire consideration (or if the vendor proves that the entire sale consideration was not paid to him, title in the property would not pass to the purchaser.

11. At this stage, we may refer to the practice prevalent in Bihar known as `ta khubzul badlain' (that is, title to the property passing to the purchaser only when there is "exchange of equivalents"). As per this practice, where a sale deed recites that entire sale consideration has been paid and possession has been delivered, but the Registration Receipt is retained by the vendor and possession of the property is also retained by the vendor, as the agreed consideration (either full or a part) is not received, irrespective of the recitals in the sale deed, the title would not pass to the purchaser, till payment of the entire consideration to the vendor and the Registration Receipt is obtained by the purchaser in exchange. In such cases, on the sale deed being executed and registered, the registration receipt (which is issued by the Sub-Registrar) authorizing the holder thereof to receive the registered sale deed on completion of the registration formalities, is received and retained by the 12 vendor and is not given to the purchaser. The vendor who holds the Registration receipt will either receive the registered document and keep the original sale deed in his custody or may keep the registration receipt without exchanging it for the registered document from the sub-Registrar, till payment of consideration is made. When the purchaser pays the price (that is the whole price or part that is due) on or before the agreed date, he receives in exchange, the registration receipt from the vendor entitling him to receive the original registered sale deed, as also the possession. If the payment is not made as agreed, the vendor could repudiate the sale and refuse to deliver the registration receipt/registered document, as the case may be, which is in his custody, and proceed to deal with the property as he deems fit, by ignoring the rescinded sale. The prevalence of this practice in Bihar is noticed and recognized in several reported decisions - the decision of this Court in Bishundeo Narain Rai (supra) and the decisions of the Patna High Court in Sarjug Saran Singh vs. Ramcharitar Singh (1968 BLJR 74), Shiva Narayan Sah vs. Baidya Nath Prasad Tiwary (AIR 1973 Patna 386), Baldeo Singh vs. Dwarika Singh (AIR 1978 Patna 97), which explain the practice of ta khubzul badlain, after relying upon the principles laid down in the earlier decisions of that court in Md. Murtaza Hussain vs. Abdul Rahman (AIR 1949 Pat. 364), Motilal Sahu vs. Ugrah Narain Sahu (AIR 1950 Patna 288), 13 and Panchoo Sahu v. Janki Mandar (AIR 1952 Pat. 263), 11.1) In Bishundeo Narain Rai (supra), this Court held :

"It appears that in the State of Bihar a practice is prevalent that when whole or part of sale consideration is due or any other obligation is undertaken by the vendee, then on execution and registration of the sale deed by the vendor, title to the property, subject matter of sale, does not pass 'ta Khubzul Badlain', that is, until there is 'exchange of equivalent' and in such a case registration receipt is retained by the vendor, which on payment of consideration due or on fulfillment of the obligation by the vendee is endorsed in his favour or if the sale deed has already been received by the vendor then the sale deed is delivered to the vendee. Even so, this only shows that such agreement are common in that part of the country but it is essentially a matter of intention of the parties which has to be gathered from the document itself but if the document is ambiguous then from the attending circumstances, subject to the provisions of Section 92 of the Evidence Act."

(emphasis supplied) 11.2) In Sarjug Saran Singh (supra) after referring to the recitals in a sale deed that the vendor had delivered possession to the vendee as absolute owner, it was observed :

"It was admitted by the plaintiffs themselves that the aforesaid recital is incorrect, both as regards the receipt of the consideration money and as regards putting the vendee in possession of the property. The registration receipt remained with the executants, namely, defendants 1 and 2, and the plaintiffs alleged that on a subsequent date, when they offered to pay the consideration money and to take the registration receipt from defendants 1 and 2 (Ta kalzul badlain exchange of equivalents), they, under the instigation of the other defendants refused to part with the receipt and sold the property to the other defendants."

The Patna High Court in that decision, upheld the decision of the first appellate court that the intention of the parties was that title should pass only 14 on payment of the consideration and as admittedly the consideration was not paid, the plaintiffs did not obtain title by virtue of the sale deed, on the following reasoning:

"It is well settled that the intention of the parties should be ascertained on a construction of a document; and where there is any patent ambiguity in any recital, aid may be taken from evidence of surrounding circumstances and the conduct of the parties. Mr. Rai for the appellants urged that the first sentence in the recital (quoted above) was complete in itself and that sentence indicated the clear intention of the parties that title should pass at the time of the registration when the executants admitted execution before the Sub-registrar. He specially relied on the words "without any right of cancellation and revocation" occurring in that sentence. But it is well known that in construing a document due weight should be given to all the recitals. Hence the subsequent recitals as regards payment of consideration at the time of exchange of equivalents and putting the vendee into possession should also be given equal weight. x x x x x The first appellate court was, therefore, justified in observing that, if the intention was that the title should pass at the time of registration, the vendors would have insisted on payment of the consideration money before the Sub- registrar, or immediately thereafter. The very fact that the registration receipt was kept in their custody and not handed over to the vendee and possession also admittedly remained with them lead to an inference that there was no intention to convey title until the payment of the consideration."

(emphasis supplied) 11.3) In Shiva Narayan Sah (supra), the Patna High Court, following its earlier decisions, held that when the sale deed stipulates payment of balance price during the exchange of equivalents (balance sale consideration and registration receipt) and mentions only "putting the buyer in possession" without actually delivering possession, even if the sale deed does not expressly postpone passing of the title till discharge of the consideration due 15 and even if more than three fourth of the total price had been paid to the vendor, the title in the property would not pass to the purchaser on execution and the registration of the sale deed, but will pass only during the exchange of the equivalents.

11.4) In Baldeo Singh (supra), the sale deed recited that the consideration money had been paid and nothing was due from the vendee to whom possession had also been delivered. But the plaintiffs admitted that neither the consideration money was paid by them nor possession was delivered by them at the time of execution and registration of the sale deed. After referring to the earlier decisions of that Court the High Court held :

"On the basis of the aforesaid decision it can be said that it is almost settled that the question whether title passes on mere execution and registration of a deed or only on payment of consideration depends upon the intention of the parties, to be gathered from the deed. It has also been held that though the sale deed may recite that the consideration has been paid, but there is nothing to prevent the parties from adducing evidence to show that the recital is untrue and that, in fact, the consideration was not paid; this will not be barred by Section 92 of the Evidence Act. In the present case, there is no dispute so far as the second aspect is concerned. The sale deed in question recites that consideration money has been paid and there is nothing due from the vendee to whom the possession has also been delivered. But, the plaintiffs admit that neither the consideration money was paid nor possession delivered to them at the time of the execution and registration of the aforesaid deed. .... In my opinion, the plaintiffs did not acquire title on mere execution and registration of the sale deed.

"In the instant case, the defendant first set has not taken the stand that he had repudiated the contract even before 10-1-1963 when the deed of cancellation was executed. If the amount is tendered by the defaulter after such repudiation, it is of no, consequence. A vendor cannot be expected to 16 wait indefinitely to enable the vendee to perform his part, and he is at liberty in such a situation to sell the property to another person. In my opinion, in cases where the tender or payment of the consideration money is made by the vendee before the vendor repudiates the contract, the vendee will acquire a valid title over the properties covered by the deed in question."

(emphasis supplied)

12. We have referred to several decisions of the Patna High Court in detail to demonstrate the existence of the established practice of exchanging equivalents (ta khubzul badlain). The effect of such transactions in Bihar is even though the duly executed and registered sale deed may recite that the sale consideration has been paid, title has been transferred and possession has been delivered to the purchaser, the actual transfer of title and delivery of possession is postponed from the time of execution of the sale deed to the time of exchange of the registration receipt for the consideration, that is ta khubzul badlain.

13. We may now examine the facts of this case with reference to the said principles. As noticed above the first appellate court has recorded a finding of fact that the appellants had not paid the consideration of Rs.22000 at the time of execution and registration of the sale deed. This finding of fact (accepted by the High Court in second appeal) has been recorded after exhaustive consideration of the oral evidence and is not open to challenge. 17 The trial court, the first appellate court and the High Court have concurrently found that though the sale deed recited that possession of the property was delivered to the purchasers, the possession was not in fact delivered and continued with the vendor (second respondent) and he had delivered the actual possession of the property to the first respondent when he subsequently, sold the property to the first respondent. Therefore, the recitals in the sale deed dated 22.2.1988, that the vendor had received the entire price of Rs.22000/- from the purchasers (that is Rs.17000 before execution of the sale deed and Rs.5000 at the time of exchange of registration receipt) and had transferred all his rights therein and that on such sale the vendor has not retained any title and that the vendor has relinquished and transferred the possession of the property to the purchasers, will not be of any assistance to the appellants to contend that the title has passed to them or part consideration was paid. It is an admitted fact that the registration receipt was retained by the vendor to be exchanged later in consideration of the sale price. It is also admitted that possession was not delivered though the deed recited that possession was delivered. The sale was categorically repudiated by the second respondent on 18.3.1988 by cancelling the sale deed. There is no evidence that the appellants offered the sale price of Rs.22000/- to the second respondent before the repudiation. The only possible inference is that 18 the intention of the parties was that title would not pass until the consideration was not paid; and as the consideration was not paid, the sale in favour of the appellants did not come into effect and the title remained with the vendor and the sale deed dated 22.2.1988 was a dead letter. Consequently, the subsequent sale in favour of the first respondent was valid. Re: Question (iv)

14. We are therefore of the view that on execution and registration of the sale deed dated 22.2.1988 in favour of appellants, title did not pass to the purchaser and possession was not delivered. Therefore as a consequence the vendor retained the power of repudiating the sale for non payment of the sale price within a reasonable time. As the finding is that no part of the sale price was paid, the claim of appellants that they offered to pay Rs.5000/-, even if accepted to be true would mean proving their readiness to pay only a part of the price and not the entire sale price. As the appellants have failed to prove that they tendered the price of Rs.22000/- before repudiation and cancellation on 18.3.1988, the sale deed dated 22.2.1988 in favour of appellants did not convey any title to them and after lawful repudiation, they were not entitled to claim performance. 19

15. We hasten to add that the practice of ta khubzul badlain (of title passing on exchange of equivalent) is prevalent only in Bihar. Normally, the recitals in a sale deed about transfer of title, receipt of consideration and delivery of possession will be evidence of such acts and events; and on the execution and registration of the sale deed, the sale would be complete even if the sale price was not paid, and it will not be possible to cancel the sale deed unilaterally. The exception to this rule is stated in Kaliaperumal (supra). The practice of `ta khubzul badlain' in Bihar recognizes that a duly executed sale deed will not operate as a transfer in preasenti but postpones the actual transfer of title, from the time of execution and registration of the deed, to the time of exchange of equivalents that is registration receipt and the sale consideration, if the intention of the parties was that title would pass only on payment of entire sale consideration. As a result, until and unless the duly executed and registered sale deed comes to the possession of the purchaser, or until the right to receive the original sale deed is secured by the purchaser by obtaining the registration receipt, the deed of sale merely remains an agreement to be performed and will not be a completed sale. But in States where such a practice is not prevalent, possession of Registration Receipt by the Vendor, may not, in the absence of other clear evidence, lead to an inference that consideration has not been paid or that title has not 20 passed to the purchaser as recited in the duly executed deed of conveyance. Where the purchaser is from an outstation, the vendor being entrusted with the Registration Receipt, to collect the original sale deed and deliver it to the purchaser, is common. Be that as it may.

16. In view of the above, we hold that there is no merit in this appeal and the appeal is dismissed.


(R V Raveendran) New Delhi;

Friday, January 3, 2014

High Court Enhances Compensation to an Injured in Accident

Slamming the Motor Accident Claims Tribunal for mechanical approach in calculating the relief for a 25-year old man, whose life is in a vegetative state after a road mishap 10 years ago, Madras High Court today enhanced the compensation from Rs 2.85 lakh to about Rs 15 lakh.           
Allowing an appeal by the parents of the victim, Justice S Vimala ordered a compensation of Rs 14,94,170 as against Rs 2,85,670 awarded by the Chennai bench of MACT.        
Coming down heavily on the tribunal in calculating the compensation the judge said "in spite of several Supreme Court judgements, the Tribunal did not understand and appreciate the duty to award just compensation and exhibited the mechanical approach towards calculation of loss."      
R Venkatesh, a kabaddi player and a 10th standard student here, had to amputate his leg after he was hit by a truck while trying to cross the road in November 2004. He was only 16 years then.      
The MACT in September 2008 awarded Rs 2,85,670 as compensation to him as against the claim made for a Rs 15,00,000. His parents challenged the order of the Tribunal in the High Court.      
"The formula adopted by the Tribunal is applicable only in case of injuries which did not result in total loss of earning capacity. In the case where the injury results in total and permanent loss of earning capacity, the Tribunal ought to have adopted the multiplier method of quantification, by adopting suitable multiplier in respect of the victim and also by taking into account, the future prospective earning of injured."      
"The doctor has given evidence stating that it is not possible to fix an artificial limb for the injured because of the peculiar way in which the amputation has occurred. Therefore it is clearly a pathetic case where the artificial leg also will not come to the aid of the claimant and throughout the life he has to depend upon the family members or relatives for his assistance," the judge said.   
 "This is a case where there are exceptional circumstance, which would go to show that the life of a claimant is vegetative living," the judge said enhancing the compensation awarded by the MACT.