[2010] 15 (ADDL.) S.C.R. 619 620
C.N. ANANTHARAM A A tax and EMI along with interest @ 12% p.a. and costs.
v.
M/S. FIAT INDIA LTD. AND ORS. ETC. ETC.
(Special Leave Petition (C) Nos.21178-21180 of 2009)
NOVEMBER 24, 2010
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.]
Consumer Protection Act, 1986: Deficiency in service
Purchaser of diesel vehicle complained to the dealer about
defect in the performance of the vehicle and in its engine
He alleged that the diesel vehicle made rattling noise
Dealer replaced the engine and few other parts Purchaser
insisted on replacement of the vehicle with a new vehicle
Filed complaint before Consumer Forum seeking
replacement of vehicle and in the alternative refund of the
purchase price along with expenses Dissatisfied with the
orders of District Forum and State Commission, the purchaser
approached National Commission National Commission
directed the dealer and the manufacturer to remove the defect
and deliver it to the purchaser after certification of an
independent technical expert that the vehicle was free from
any defect Held: An engine operating on diesel makes a
rattling noise which does not occur in petrol driven engines
and in view of that there was really no manufacturing defect
in the vehicle as complained of by the purchaser In such
circumstances, the order passed by the National Commission
was not unreasonable Apart from the complaint relating to
noise from the engine and the gear box, there was no other
major defect which made the vehicle incapable of operation,
particularly when the engine was replaced with a new one
Directions given by the National Commission upheld with
further direction that if the expert opines that the vehicle has
inherent manufacturing defects, the purchaser would be
entitled to refund of the price of the vehicle and the lifetime
619
SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
The complainant-petitioner purchased a diesel
vehicle from a dealer, the second respondent and got it
registered in his name. After the registration, he took the
vehicle on a drive and found certain defects in the
B B vehicle particularly in the engine. On the same day, he left
the vehicle with the dealer for removing the defects. The
engine and few other parts were replaced. The petitioner
was still not satisfied with the performance of the vehicle
and informed the dealer that the vehicle had inherent
C C defects which could not be repaired and insisted on
replacement of vehicle with a new one or for refund of
purchase price together with the expenses incurred by
him in trying to rectify the defects in the vehicle. On not
receiving any response, the petitioner filed a complaint
D D before the District Forum. The District Forum allowed the
complaint and directed the first and second respondents
to refund the claimed amount, together with interest @
12% P.A. and a sum of Rs.5000 towards cost of legal
proceedings. The State Commission modified the order
E E of the District Forum and directed the first and second
respondents to replace the vehicle with a brand new one
and on failure to do so to refund the purchase price of
the vehicle along with road tax and the monthly
instalments paid by the petitioner along with the interest
@ 12% P.A. from the date of order. Aggrieved, the
F F
respondents filed revision before the National
Commission. The National Commission held that the
petitioner could not prove any manufacturing defect, but
directed the dealer and the manufacturer to remove the
defects, if any, in the vehicle and make it roadworthy, if
G G
necessary by reconditioning the vehicle and deliver it to
the petitioner in the presence of an independent technical
expert who would certify that the vehicle was free from
any defect and the same would be final for all purposes.
H H
 C.N. ANANTHARAM v. M/S. FIAT INDIA LTD. AND 621
ORS. ETC. ETC.
The petitioner filed the instant special leave petitions A A
challenging the order of the National Commission.
Disposing of the special leave petitions, the Court
HELD: 1. The question which emerged after
considering the submissions made on behalf of B
respective parties was whether the manufacturing
company and by extension the dealer/agent was under
any compulsion to replace the vehicle itself when the
engine of the vehicle from which certain noises were
allegedly emanating had been replaced. It was explained C
that an engine operating on diesel makes a rattling noise
which does not occur in petrol driven engines and that
there was really no manufacturing defect in the vehicle as
complained of by the purchaser. In such circumstances,
the order passed by the National Commission was not D
unreasonable. For whatever reason, except for a mere
800 kilometers the petitioner had not used the vehicle after
it was delivered and had, on the other hand, made several
complaints in an attempt to prove that there were
manufacturing defects in the vehicle. The National E
Commission took all these matters into consideration in
giving the impugned directions regarding delivery of the
vehicle to the petitioner after having the same properly
checked by an independent technical expert who would
have to certify that the vehicle was free from any defect. F
[Paras 15, 16] [ [628-H; 629-A-D]
2. Apart from the complaint relating to noise from the
engine and the gear box, there was no other major defect
which made the vehicle incapable of operation,
particularly when the engine was replaced with a new G
one. However, in addition to the directions given by the
National Commission, it is directed that if the independent
technical expert is of the opinion that there are inherent
H H
622 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
manufacturing defects in the vehicle, the petitioner will be
entitled to refund of the price of the vehicle and the lifetime
tax and EMI along with interest @ 12% per annum and
costs, as directed by the State Commission. [Para 17]
[629-E, F]
B
Indochem Electronic v. Addl. Collector of Customs (2006)
3 SCC 721; Maruti Udyog Ltd. v. Susheel Kumar Gabgotra
(2006) 4 SCC 644; Hindustan Motors Ltd. v. N. Siva Kumar
(2000) 10 SCC 654 referred to.
C Case Law Reference:
(2006) 3 SCC 721 referred to Para 9
(2006) 4 SCC 644 referred to Para 13
D (2000) 10 SCC 654 referred to Para 14
CIVIL APPELLATE JURISDICTION : SLP (Civil) No. 9896
of 2010.
From the Judgment & Order dated 17.4.2009 of the
E National Consumers Disputes Redressal Commission, New
Delhi in RP No. 1585, 1713 and 2431 of 2006.
Kiran Suri, Vijay Verma, Rishi Jain and S.J. Smith for the
Petitioner.
F Vijay Kumar, Thomas Qammen, Viswajit Singh, G.
Umapathy, M.M. Manivel, Sangita Chahan and Rakesh K.
Sharma for the Respondent.
The Judgment of the Court was delivered by
G
ALTAMAS KABIR, J. 1. On 31st October, 2002, the
Petitioner herein purchased a Fiat Siena Weekender diesel
vehicle from M/s Sundaram Automobiles, Bangalore, the
common Respondent in all these three Special Leave Petitions
and agent of M/s Fiat India Ltd., the manufacturer of the said
 C.N. ANANTHARAM v. M/S. FIAT INDIA LTD. AND 623
ORS. ETC. ETC. [ALTAMAS KABIR, J.]
vehicle. The Petitioner paid a sum of Rs.7,69,187/- towards the
Ex-showroom price of the vehicle, together with a sum of
Rs.56,537/- towards lifetime road tax and Rs.28,964/- as
insurance. The vehicle was duly registered in the name of the
Petitioner on 25th November, 2002, when the vehicle was
delivered.
2. According to the Petitioner, immediately after
registration of the vehicle, it was taken out for a drive when
certain defects, particularly in the engine, began to manifest
themselves. The same day, the Petitioner left the vehicle with
the dealer for removing the defects. On the very same day, the
Respondent No.2, M/s Sundaram Automobiles, wrote back to
the Petitioner stating that the vehicle was in good condition and
the noise was on account of the operational characteristics of
the engine. Thereafter, on several occasions, the Petitioner left
the vehicle with the agent and various parts, including the engine
itself, were completely replaced. The Petitioner, however, was
not satisfied with the performance of the vehicle and came to
the conclusion that the vehicle had inherent defects and could
not be repaired. He, accordingly, insisted that the vehicle be
replaced with a new vehicle or the amount paid by him as sale
price be refunded, together with expenses incurred in trying to
rectify the defects in the vehicle.
3. Not getting any response, the Petitioner filed Complaint
No.474 of 2003 before the IVth Additional District Consumer
Disputes Redressal Forum, Bangalore Urban, on 17th April,
2003. The complaint was heard by the District Forum, which
allowed the same by its order dated 20th February, 2004, and
directed the Respondents 1 and 2 to refund a sum of
Rs.9,15,536/-, as claimed by the Petitioner, together with
interest at the rate of 12% per annum and a further sum of
Rs.5,000/- towards cost of the legal proceedings. The claim
against Respondent No.3, M/s Fiat Sundaram Auto Finance
Ltd. was rejected.
624 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 4. Aggrieved by the said order, the Respondents 1 and 2
herein filed two separate appeals, being Nos.513 of 2004 and
397 of 2004, respectively, before the Karnataka State
Consumer Disputes Redressal Commission, Bangalore. On
15th June, 2006, the State Commission disposed of the said
B B Appeals modifying the order of the District Forum by directing
the Appellants (Respondents 1 and 2 herein) to replace the
Petitioners vehicle with a brand new vehicle or on their failure
to do so to refund Rs.7,69,187/-, along with life time tax paid
and the monthly instalments which had been paid by the
C C Petitioner, to M/s Sundaram Automobiles, together with interest
@ 12% per annum from the date of the order and also the cost
of Rs.5,000/-.
5. The matter was, thereafter, taken to the National
Consumer Disputes Redressal Commission, New Delhi,
D D hereinafter referred to as the National Commission, by the
Respondent No.1 in Revision Petition No.2431 of 2006. The
Respondent No.2 (agent) filed Revision Petition No.1585 of
2006. The Petitioner, in his turn, filed Revision Petition No.1713
of 2006, before the National Commission. The National
E E Commission, while admitting the Revision Petition No.1585 of
2006 on 25th July, 2006, only on the point of the monthly
instalments (EMI) paid and the quantum of interest, directed the
Revision Petitioner to deposit its share with interest at the rate
of 9%. Aggrieved by the said order, the Respondent No.2 filed
F F Special Leave Petition (Civil) No.13201 of 2006 before this
Court on 4th August, 2006, and the same was dismissed on
22nd February, 2008. Revision Petition Nos. 2431 of 2006,
1585 of 2006 and 1713 of 2006 were finally disposed of by
the National Commission through a common order dated 17th
G G April, 2009. In the said order, the National Commission held
as follows:
.Therefore, while we hold that the complainant has not
been able to prove any manufacturing defect, all the same,
the dealer and the manufacturer are directed to remove
H H
 C.N. ANANTHARAM v. M/S. FIAT INDIA LTD. AND 625
ORS. ETC. ETC. [ALTAMAS KABIR, J.]
the defect, if any, in the vehicle make it roadworthy, if A
necessary by reconditioning the vehicle and deliver it to
the complainant in the presence of an independent
technical expert mutually agreed upon by the complainant
and opposite parties and for this purpose any of the party
may apply to the District Forum for appointing such expert B
if it is not mutually agreed upon by the parties. The expert
shall certify that the vehicle is free from any defect which
shall be final for all purposes. This should be done within
a period of three months. The Ops, thereafter, to provide
a warranty for one year from the date of delivery. The C
revision petitions are accordingly disposed of in these
terms. Under the peculiar facts of the case, there would
be no order as to costs.
Thereafter, the Petitioner filed the instant Special Leave
Petitions challenging the order of the National Commission. D D
6. The issues which fall for decision in these Petitions are
:-
(i) Whether it can be said that the manufacturing
defect of the vehicle was such that it warranted
replacement, and whether the refund of
Rs.7,69,186/- and 12% interest as ordered by the
State Commission was justified?; and
(ii) Whether both the dealer and the manufacturer are
jointly and severally liable in regard to deficiency of
service?
7. Appearing for the Petitioner in all the three Special
Leave Petitions, Ms. Kiran Suri, learned Advocate, urged that G
from the very day on which the vehicle was delivered to the
Petitioner, it was obvious that there were several manufacturing
defects in the vehicle, which could not be removed. The said
position was duly appreciated both by the District Forum as
well as the State Commission which directed the Respondents
H H
626 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A to replace the vehicle or to refund the amounts which had been
expended by the Petitioner for purchase and to make the vehicle
operational and roadworthy. The National Commission struck
a different note upon holding that there was no worthwhile
evidence to indicate that the vehicle had suffered from any
B serious manufacturing defect and that in any case the allegation
of noise emanating from the engine even after its replacement
with a new engine, could not be believed. Ms. Suri also
questioned the view of the National Commission that the
obligation of the manufacturer/dealer is only to repair/replace
C any part of the vehicle found to be defective, even during the
warranty period, free of charge, but that the question of
replacing the vehicle with a new vehicle was not justified.
8. Ms. Suri lastly submitted that the finding of the National
Commission that the Complainant/ Petitioner had not been able
to prove any manufacturing defect, was perverse and contrary
to the evidence adduced by the parties and the materials on
record. Ms. Suri also questioned the finding that the refund of
the cost of the vehicle would also not be justified, since the
Petitioner had not taken the vehicle from the dealer despite their
E E letter certifying that the vehicle had no defect. Ms. Suri submitted
that further direction given by the National Commission to
remove any defects and to make the vehicle roadworthy, if
necessary, by reconditioning the vehicle and to deliver the same
to the Petitioner in the presence of an independent technical
F F expert mutually agreed upon, was wholly misconceived and
could not be sustained.
9. In support of her submissions, Ms. Suri referred to a
decision of this Court in Indochem Electronic vs. Addl.
Collector of Customs [(2006) 3 SCC 721], wherein while
G
considering the provisions of Sections 3 and 14 of the
Consumer Protection Act, 1986, this Court was of the view that
when the deficiency began to manifest themselves it was the
duty of the suppliers to attend to such deficiencies immediately
and if the supplier was unable to attend to the deficiencies and
 C.N. ANANTHARAM v. M/S. FIAT INDIA LTD. AND 627
ORS. ETC. ETC. [ALTAMAS KABIR, J.]
malfunctioning of the system soon after installation, it would A
amount to deficiency of service. Furthermore, when the
deficiencies in the system continued to persist during the
warranty period, including the extended period, the suppliers
were rightly held to be liable for deficiency in service by the
State and National Commission. It was also held that in the light B
of the specific power conferred under Section 14(1)(c) of the
aforesaid Act, damages equivalent to price of goods could be
awarded, despite the provisions of Section 12(3) of the Sale
of Goods Act, 1930, as the provisions of the 1986 Act are in
addition to and not in derogation of any other provision of law. C
10. Mr. Vijay Kumar, learned Advocate, who appeared for
M/s Fiat India Ltd., urged that the complaint made by the
Petitioner herein was without any basis as the vehicle was fully
roadworthy and it was the Petitioner who made continuous
complaints which, the Respondent attended to for the sake of D
maintaining good business relations. It was submitted that the
manufacturer company went to the extent of even replacing the
engine and parts of the gear box to give the Petitioner complete
satisfaction. However, there was absolutely no justification for
the Petitioner to demand that the vehicle be replaced or that E
the value thereof, together with the expenses incurred be
refunded. It was also urged that the vehicle had been duly
certified to be completely roadworthy and it was the Petitioner
who was at fault for not having taken delivery of the same,
despite the same being ready. It was submitted that the F
decision of the National Commission did not call for any
interference and the Petition was liable to be dismissed.
11. On behalf of the Respondents it was contended that
everything possible was done to meet the repeated complaints
G G
made by the Petitioner, which even involved the replacement
of the engine and other parts. However, instead of taking
delivery of the vehicle, the Petitioner continued to insist on
replacement of the vehicle which was not contemplated under
the warranty given by the manufacturing company when the
vehicle was delivered to the Petitioner. H H
628 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A 12. It was also submitted that, in any event, the agent of a
vehicle manufacturer would not be made liable for the defects,
if any, in the vehicle and the relief prayed for against
Respondent No.2 was entirely misconceived.
B 13. In support of the aforesaid submissions, reference was
made to the decision of this Court in Maruti Udyog Ltd. vs.
Susheel Kumar Gabgotra [(2006) 4 SCC 644], in which it was,
inter alia, held that if the manufacturing defect was established,
then replacement of the entire item or the replacement of the
defective parts, is only called for. In fact, reference was made
C
to the warranty condition which referred only to replacement of
only the defective parts and not the car itself. This Court held
that from the various documents exhibited it would appear that
the manufacturer had indicated that it was necessary to
download the engine to trace the problem which has been
D complained of, but there was no agreement to replace the
engine. Moreover, when the manufacturer asked for the vehicle
to be brought in for the purpose of downloading the engine, the
Respondent did not do so and, accordingly, to infer that there
was any manufacturing defect in the said background was
E without any foundation. However, the relief was moulded so that
the defective part could be replaced without requiring the
purchaser to pay any charge.
14. Reference was then made to the decision of this Court
F in Hindustan Motors Ltd. vs. N. Siva Kumar [(2000) 10 SCC
654], in which it was held that when it became impossible to
comply with the National Commissions order directing
replacement of the Respondents defective vehicle, since the
manufacturer had stopped manufacturing the said model, this
Court directed that the money along with interest, compensation
and costs were to be paid to the purchaser.
15. Having considered the various submissions made on
behalf of respective parties, what emerges is the question as
to whether the manufacturing company and by extension the
dealer/agent was under any compulsion to replace the vehicle
 C.N. ANANTHARAM v. M/S. FIAT INDIA LTD. AND 629
ORS. ETC. ETC. [ALTAMAS KABIR, J.]
itself when the engine of the vehicle from which certain noises
were allegedly emanating had been replaced. It has been
explained that an engine operating on diesel makes a rattling
noise which does not occur in petrol driven engines and that
there was really no manufacturing defect in the vehicle as
complained of by the purchaser.
16. In such circumstances, the order passed by the
National Commission, impugned in these Special Leave
Petitions, does not appear to be unreasonable. For whatever
reason, except for a mere 800 kilometers the Petitioner has
not used the vehicle after it was delivered and has, on the other
hand, made several complaints in an attempt to prove that there
were manufacturing defects in the vehicle. The National
Commission has taken all these matters into consideration in
giving the impugned directions regarding delivery of the vehicle
to the Petitioner after having the same properly checked by an
independent technical expert who would have to certify that the
vehicle was free from any defect when it is delivered.
17. From the facts as disclosed, it appears that apart from
the complaint relating to noise from the engine and the gear
box, there was no other major defect which made the vehicle
incapable of operation, particularly when the engine was
replaced with a new one. However, in addition to the directions
given by the National Commission, we direct that if the
independent technical expert is of the opinion that there are
inherent manufacturing defects in the vehicle, the petitioner will
be entitled to refund of the price of the vehicle and the lifetime
tax and EMI along with interest @ 12% per annum and costs,
as directed by the State Commission.
18. In such circumstances, the Special Leave Petitions are
disposed of with the above directions.
D.G. Special Leave Petitions disposed of.
[2010] 15 (ADDL.) S.C.R. 630
A A INDIAN INSTITUTE OF TECHNOLOGY, KANPUR
v.
RAJA RAM VERMA AND ORS.
(Civil Appeal No. 5341 of 2003)
NOVEMBER 24, 2010
B B
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Administrative law: Judicial review Prescribing or
extending age of retirement Held: Is a managerial function
C C Such decision taken by the management of the institutions
like I.I.T. and I.I.M. are on consideration of various aspects
Most predominant consideration is the need of the institute,
its functional requirements and efficient management of its
manpower These are the areas where the court should not
D D normally venture and judgment in this area should be best
left with the authorities who are in-charge of running or
managing such institutes However, if court finds that the
policy in fixing the age of retirement was not based on any
intelligible criterion or is founded on such a basis which are
E E patently unreasonable and perverse, the court has a bounden
duty to interfere and direct the concerned management to
proceed on a reasonable basis Constitution of India, 1950
Article 14 Institutes of Technology Act, 1961.
Constitution of India, 1950: Article 14 Extension of age
F F of retirement Intelligible differentia I.I.T., Kanpur confined
the benefit of service upto 62 years to teachers and to
employees on par with teachers Held: There is a valid
rationale in allowing teachers and persons holding posts
which are at par with teachers to work beyond 60 years Good
G G faculty of academicians for doing the job of teachers is difficult
to find In any discipline and especially in a discipline in an
institute like I.I.T., it is very difficult to replace an experienced
teacher with years of learning, maturity and experience
Institutes of Technology Act, 1961.
H 630
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 631
RAJA RAM VERMA
Institutes of Technology Act, 1961: ss.2, 4, 11, 13, 31, 33
Autonomy of the Institution I.I.T Kanpur is an Institution
of National Importance The decision making exercise is with
the council composed of academicians Therefore, it cannot
be said that the independence of the institutions is controlled
or diluted by Government Education/Educational
institutions.
The first respondent was appointed on 11.11.1983 to
the post of Assistant Registrar at appellant-institute. He
was to retire on 31.8.2000 on attaining the age of 60 years.
C C
Initially the statute of I.I.T. provided for 60 years as the age
of superannuation for all the staff members. The first
respondent claimed his entitlement to continue till 62
years of age on the basis of communications of the
Ministry of Human Resource Development whereby the
age of superannuation of University and College teachers D
was increased to 62 years. The appellant-institute sought
for clarification as regards the applicability of the
communications to the Assistant Registrars. One Mr.
Bakre was allowed to continue in the absence of proper
clarification from the Central Government. Subsequently E
clarification was received and it was clear that the
increase in the age of retirement was only in case of
those categories of employees who could be treated at
par with the teachers. The appellant-institute passed an
order to that effect. A writ petition was filed by the first F
respondent before the High Court challenging the said
order. The High Court allowed the writ petition.
The questions which arose for consideration in the
instant appeal were whether the decision of the appellant
G G
that the benefit of service upto 62 years was confined to
teachers and employees at par with teachers was
justified; and whether Grant-in-aid and loan rules could
be made applicable to I.I.T. and I.I.M. and by applying said
rules, the independence of institutions like I.I.T. and I.I.M.
H H
632 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A in matter of employment of the teachers is sought to be
diluted.
Allowing the appeal, the Court
HELD: 1.1. Prescribing the age of retirement is a
B B managerial function and such decisions are taken by the
management of the concerned institute on consideration
of various aspects. One of the most predominant
consideration is the need of the institute, its functional
requirements and efficient management of its manpower.
These are the areas where the court should not normally
venture and judgment in this area should be best left with
the authorities who are in-charge of running or managing
such institutes. However, if the court finds that the policy
in fixing the age of retirement was not based on any
D intelligible criterion or is founded on such a basis which
are patently unreasonable and perverse, the court has a
bounden duty to interfere and direct the concerned
management to proceed on a reasonable basis. In the
segment of white collared employees, opportunities are
E quite few and there is a burning unemployment problem.
Therefore, if considering the ground realities the
Government fixes 60 years as the age of retirement for
certain categories of employees, the court should be
very slow and circumspect before interfering with such
F decisions. [Paras 28, 31] [643-C-E; 644-F]
B. Bharat Kumar and Ors. v. Osmania University and
Ors. (2007) 11 SCC 58; Nagaland Senior Govt. Employees
Welfare Association and Ors. v. The State of Nagaland and
Ors. 2010(7) SCR 630 relied on.
1.2. There is a valid rationale in allowing teachers and
persons holding posts which are at par with teachers to
work beyond 60 years. The reason for this is that it is very
difficult to find a good faculty of academicians for doing
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 633
RAJA RAM VERMA
the job of teachers. In any discipline and especially in a A
discipline in an institute like I.I.T., it is very difficult to
replace an experienced teacher with years of learning,
maturity and experience. This explains why in many
cases even teachers are retained beyond their extended
period of retirement by way of extension or their services B
are continued on the basis of re-employment. This is
done to preserve the intrinsic value and quality of
teaching imparted in these institutions. Therefore, there
is no error in the decision of the appellant whereby the
benefit of service upto 62 years is confined to teachers C
and to those employees who are on a par with teachers.
The first respondent was not able to establish that he was
a member of teaching staff or he was to be treated at par
with the teachers. In that view of the matter, his claim to
continue in service after 60 years of age was not
sustainable. Whether a particular employee has to be
treated at par with the teaching staff is by and large a
decision of the management of the appellant institute and
it is difficult for this Court to interfere with the said
decision unless it is ex facie perverse. Here, no such case
was made out by the first respondent. Mr. Bakre was E
allowed to continue only under fortuitous circumstances
and in the absence of any proper clarifications by the
Central Government. The respondent cannot claim the
same right. In the case of Mr. Bakre, no legal right was
extended to him. He was allowed to continue in the F
absence of any clarification about when retirement fell
due. Thus, in passing the impugned order of retirement
of the first respondent on his attaining the age of 60
years, the appellant has not committed any illegality.
[Paras 25, 26, 27, 32, 33] [644-G-H; 645-A-C; 642-G-H; 643- G
A-B]
2. The Preamble of the Institutes of Technology Act,
1961, which is an Act of Parliament, shows that the same
has been enacted to declare certain institutions of
634 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A technology to be institutions of national importance.
Section 2 of the said Act makes it clear that I.I.T Kanpur
(the appellant) is an Institution of National Importance.
Under Section 31 of the Act, the Central Government may
by a notification in the official gazette establish a Central
B Board to be called the Council and in the Council the
Minister in-charge of technical education of the Central
Government shall be the ex-officio Chairman. From the
list of the re-constituted Council of I.I.Ts, it appears that
Chairman of all the I.I.Ts, namely, I.I.T Bombay, I.I.T Delhi,
C I.I.T Guwahati, I.I.T Kanpur, I.I.T Kharagpur, I.I.T Madras,
I.I.T Roorkee are members of the said Council. Most of
them are professors or academicians. Under Section 33
of the Act it is the duty of the council to coordinate the
activities of all the institutes and to perform all the
functions which are specified under Section 33(2) of the
D D
Act. All major decision making exercise has been left in
the hands of the re-constituted Council which is
predominantly composed of academicians. The Council
in its 40th meeting held on 19.10.2009 has constituted a
committee under the Chairmanship of Dr. Anil Kakodkar,
E Chairman, Board of Governors, I.I.T Bombay for
suggesting a roadmap for the autonomy and the future
of the I.I.Ts as world class institutions for research and
higher learning. Pursuant to the said resolution in the
40th meeting of the Council, a Committee has been
F constituted. The materials and the affidavit of the
Government disclosed that autonomy of these institutes
is not being diluted. Rather, an attempt is made by the
Government of India to improve the academic ambience
of these institutes by recommending extension of age of
G retirement of the Director of the Institute and of members
of the academic faculty. Attempt has also been made to
attract the best talent by a progressive revision of the pay
scale. [Para 38, 39, 43, 44, 45, 46, 47, 52] [646-F-G; 647-B;
648-E-H; 649-E-G; 652-C-G; 657-B-E]
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 635
RAJA RAM VERMA
Case Law Reference:
(2007) 11 SCC 58 relied on Para 29
2010(7) SCR 630 relied on Para 30
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5341 of 2003.
From the Judgment & Order dated 10.07.2002 of the High
Court of Judicature at Allahabad, in Civil Misc. Writ Petition No.
54346 of 2000.
Nikhil Nayyar, T.V.S.R. Sreyas, Sunil Goyal for the
Appellant.
Gopal Subramanium, S.G., Raja Verma, Anubhav Kumar
(for D.S. Mahra) for the Respondents.
The Judgment of the Court was delivered by
GANGULY, J. 1. The Respondent No. 1 Shri Raja Ram
Verma was appointed to the post of Assistant Registrar at
Indian Institute of Technology, Kanpur (hereinafter I.I.T.) on
11.11.1983. As per Statute 13 of I.I.T., the respondent was due
to retire on 31.08.2000 on attaining the age of 60 years. His
case before us is that he should have been allowed to continue
upto the age of 62 years.
2. I.I.T. Kanpur is a body incorporated under the Institutes F
of Technology Act, 1961 (hereinafter the Act). Section 27 of
the Act provides for framing of first Statutes by the I.I.T. Such
statutes are to deal with matters mentioned in Section 26.
Section 26 (g) provides for framing of statutes relating to terms
and conditions of service of teachers and other staff of the I.I.T. G
Section 31 of the Act provides for the establishment of Council
which is a central body. Under Section 33 of the Act the general
duty of the Council is to coordinate the activities of the Institute
and under Section 33(2)(b) one of the general duties of the
Council is to lay down the policies regarding cadres, method H
636 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A of recruitment and conditions of service of employees amongst
other things of common interest.
3. Statute 11 classifies the employees under three
categories. They are (a) academic, (b) technical and (c)
administrative. Respondent No. 1 who was appointed as an
B B
Assistant Registrar falls under the third category.
4. Generally, the statute 13 (2) framed under the Act
prescribes the age of superannuation of a confirmed appointee.
Initially the statute provided for 60 years as the age of
C C superannuation for all the staff members. By an amendment on
23.06.1989 however, a sub-statute 3 was added making some
changes. The said amendment runs as follows:
(3)Subject to the provisions of the Act and the Statutes,
all the new appointments to posts on revised salary scales
D D
adopted with effect from 1st January 1986 under the
Institutie shall ordinarily be made on probation for a period
of one year after which period the appointee, if confirmed,
shall continue to hold office, subject to the provisions of the
Act and the Statutes as follows:
E E
(a) Teaching Staff (faculty and Group D Staff): Till the
end of the month in which he attains the age of 60
years
(b) Group A, B and C staff (non faculty): Till the end of
F
the month in which he attains the age of 58 years.
5. This amendment did not affect the Respondent No. 1
as it was applicable for those who were appointed w.e.f.
01.01.1986.
G
6. Thereafter, by an office order issued by the Registrars
office, I.I.T. Kanpur, dated 14.07.1998, the age of retirement
was increased from 58 to 60 years with effect from 30.05.1998.
This was done in respect of members of Groups A, B and C
H (non faculty) who had been appointed on or after 23.06.1989.
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 637
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
7. On 27.07.1998, the Ministry of Human Resource
Development addressed to the Secretary, University Grants
Commission, and forwarded to the Vice Chancellors of all
Central Universities, Member Secretary, All India Council for
Technical Education and Secretary of the Indian Council for
Agricultural Research, providing therein that the age of
superannuation of University and College teachers would be 62
years with the liberty reserved to the Universities and Colleges
to re-employ superannuated teachers within the existing
guidelines framed by the U.G.C.
8. The respondent No.1 claims his entitlement to continue
till 62 years of age on the basis of this communication.
9. Another communication was issued on 31st August,
1998 by the Department of Education, Ministry of H.R.D. to the
Director of the I.I.T. with regard to increase in the age of
superannuation of academic staff including personnel of
Registry, Library and Physical Education. Thereupon, the
appellant sought clarification from the Ministry about the term
Personnel of Registry, Library and Physical Education Staff.
10. The case of the appellant is that it got a telephonic
communication from the Ministry on or about 14th October 1998
that the increase in the age of superannuation from 60 to 62
years is confined to the case of Assistant Registrar level and
the officers above. Thereupon, the appellant allowed one Shri.
S.H. Bakre, Assistant Registrar to continue in service, who was
due to retire on 31st August 1998. Thereafter, the Chairman
of the Board of Governors approved the proposal of the
Director, wherein it was proposed that the staff, whose age of
retirement was 58 years, would superannuate on attaining 60
years and the members of the staff whose age of retirement at
the time of appointment was 60 years, would superannuate on
attaining 62 years. However, the said proposal of the Director
even though approved by the Chairman, was not put up before
the Board of Governors for ratification, hence no effect was
638 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A given to the same as required under statute 7(4) of the first
statute.
11. In Statute 7(4) of the statutes of I.I.T., all orders of the
Chairman have to be approved by the Board. The relevant
B provision of Statute 7(4) is in the following terms:
B
7(4) In emergent cases the Chairman may exercise the
powers of the Board and inform the Board of the action
taken by him for its approval.
C C 12. It has been urged on behalf of the appellant that as
respondent No.1 was admittedly appointed on 11.11.1983, he
was due for superannuation on 31.12.2000 on attaining the age
of superannuation of 60 years in terms of statute 13(2). The
exact provision of Statute 13(2) in this connection is set out
D D below:
(2) Subject to the provisions of the Act and the statutes,
all appointments to posts under the Institute shall ordinarily
be made on probation for a period of one year after which
period the appointee, if confirmed, shall continue to hold
E E his office subject to the provisions of the Act and the
Statutes, till the end of the month in which he attains the
age of 60 years. Provided that where the Board considers
that in the interests of students and for the purposes of
teaching and guiding the research scholars any member
F F of the academic staff should be reemployed, it may re-
employ such a member till the end of the semester or the
academic session as may be considered appropriate in
the circumstances of each case.
G G Provided further that where it becomes necessary to
re-employ any such member beyond the end of the
semester or academic session as the case may be, the
Board may with the previous approval of the visitor, re-
employ any such member for a period upto three years in
H the first instance and upto two years thereafter and in no
H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 639
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
case exceeding the end of the academic session in which
he attains the age of 65 years.
Provided also that in no circumstances such member
shall be reemployed for any purposes other than those of
teaching and guiding the research scholars.
13. Then by a communication dated 6.11.1998 the
Government of India, the second respondent, clarified the
scheme notified in its earlier communication dated 27.7.1998
to the extent that the age of superannuation at 62 will be
applicable only to those Registrars, Librarians, Physical C
Education personnel who are treated at par with teachers and
whose age of superannuation was 60 years.
14. Thereafter, the I.I.T. council met on 20.2.1999 and
decided that the age of superannuation of staff members of D
I.I.Ts (except faculty and scientific/design staff in Group A
category) would continue to be 60 years, as in the case of the
Central Government employees.
15. In the meantime, the case of another Assistant
Registrar, namely Shri S.K. Gupta, who was to retire on
31.3.1999, came up for consideration and the then Director of
I.I.T. sought clarification from the Ministry of Human Resource
Development. In seeking such a clarification, the Director was
informed by the Secretary, Ministry of Human Resource
Development that a clarification would be sent shortly. In the
absence of any clarification, the Director decided that till further
clarification is received from the Ministry, Shri S.K. Gupta may
continue.
16. However, on 30.3.1999 itself a communication was G
received from the Ministry of Human Resource Development
giving the clarification and in paragraph (5) of the said
clarification it was provided as under:
Attention of this Ministry has, however, been drawn to the
fact that the position stated in para 4 above requires
640 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A clarification. Accordingly, it is clarified that the increase in
the age of superannuation from 60 to 62 years indicated
in this Ministry letter of even number dated 31st August,
1998 as stated above would be applicable only to those
categories of employees of IITs, IIMs and IISc who are
being treated at par with the teachers and whose age of
B B
superannuation was 60 years.
17. On 16.2.2000 a further clarification was given by the
second respondent to the Director of the appellant that the
increase in the age of superannuation from 60 years to 62
C years would be applicable only to those categories of
employees of I.I.Ts, I.I.Ms and I.I.Sc who are being treated at
par with the teachers and whose age of superannuation was
60 years.
D 18. In view of the aforesaid clarification by the second
respondent, a grievance was raised about alleged
discrimination between the members of faculty staff and those
members of staff who are categoried as non-faculty staff. In the
background of such a plea of discrimination, the second
E E respondent, by its further communication dated 24.4.2000,
clarified that since the members of the staff of various I.I.Ts are
classified into 3 categories namely, i) academic ii) technical
and iii) administrative and others and since Librarians are falling
in the categories of the academic staff, their age of retirement
F F would be 62 years.
19. Thereafter, the Board of Governors of the appellant in
its meeting held on 22.5.2000, on consideration of the
communication dated 24.4.2000 from the second respondent
came to the following conclusion:
G
The Board was informed of the outcome of the
discussions at the IITs Directors meeting held on 9th April,
2000. The Board after a brief discussion decided as under:
1. Those Assistant Registrars who are in service beyond
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 641
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
60 years will retire on December 31, 2000. However, if a
person reaches 62 years before that date, he will retire at
the end of the month in which he completes 62 years.
2. Librarian and Deputy Librarian will retire on completing
62 years, in view of MHRD clarification.
3. A decision with respect to Physical Education Instructors-
Class-A will be taken once a clarification is received from
the MHRD.
20. Thereupon, a memorandum was issued by the C
appellant on 17.7.2000 to the effect that the date of
superannuation of all the Assistant Registrars, who figured in
the said memorandum will be 31st December, 2000. However,
Shri S.H. Bakre was not allowed to continue since his date of
superannuation was 31.8.2000. D D
21. Being aggrieved by the said memorandum dated
17.7.2000; respondent No.1 filed a writ petition before the
Allahabad High Court.
22. The consistent case of the appellant before the High E
Court was that age of retirement of only those employees was
enhanced who could be treated at par with the teachers. In the
affidavit filed by the appellant before the High Court they have
reiterated that they are bound by the communication from the
Ministry of Human Resources, Government of India dated F
30.3.1999 and also one dated 24.4.2000. The relevant part of
the 30.3.1999 notification has been set out above and the
subsequent clarification by the Ministrys communication dated
24.4.2000 also relies on para 5 of the Ministrys communication
dated 30.3.1999. On a combined reading of the aforesaid two G
communications issued by the second respondent, it is more
than clear that increase in the age of retirement has been made
available only to those categories of employees who are
treated at par with the teachers.
23. However, the High Court on an erroneous basis
642 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A allowed the writ petition and quashed the order of the appellant
dated 17.7.2000. It may be mentioned in this connection that
subsequently the Full Bench of the Allahabad High Court by a
judgment and order dated 14.10.2004 disagreed with the
decision rendered by the Allahabad High Court in favour of the
B respondent No.1 and held that Hence in our opinion the age
B
of retirement of an employee of the Indian Institute of Technology
is 60 years and not 62 years vide Section 13(2). We, therefore,
respectfully disagree with the decision in Raja Ram Vermas
case. The judgment in Raja Ram Vermas case (supra) is
C hereby overruled.
24. It may be noted in this connection that an affidavit has
been filed by the appellant before this Court explaining the
conditions under which Mr. Bakre was allowed to continue
beyond 60 years. Since Mr. Bakre was an Assistant Registrar
and was due to retire on 31.8.1998 the benefit of increased
age was extended to him, pending clarification about the age
of retirement from the second respondent. The issuance of
clarification was by the second respondent, the Central
Government. The Board of the appellant decided that six of its
E Assistant Registrars would have to be superannuated based
on the office memo dated 16.2.2000 issued by the Government
of India and thereupon the Board of Governors decided that all
the six Assistant Registrars except Mr. Bakre would be allowed
to continue till 31.12.2000. Therefore, Mr. Bakre was allowed
F to continue only under fortuitous circumstances and in the
absence of any proper clarifications by the Central Government.
25. This Court is of the opinion that the respondent cannot
claim the same right. In the case of Mr. Bakre no legal right was
extended to him. He was allowed to continue in the absence
G
of any clarification about when retirement fell due.
26. The first respondent, who is appearing in person, has
not been able to establish before us that he is a member of
teaching staff or he was treated at par with the teachers. In that
H H view of the matter his claim to continue in service after 60 years
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 643
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
of age cannot be sustained and the High Court came to an
erroneous finding in taking a contrary view.
27. Whether a particular employee has to be treated at par
with the teaching staff is by and large a decision of the
management of the appellant institute and it is difficult for this
Court to interfere with the said decision unless it is ex facie
perverse. Here, no such case has been made out by the first
respondent.
28. It has been held by this Court, more than once, that
prescribing the age of retirement is a managerial function and C
such decisions are taken by the management of the concerned
institute on consideration of various aspects. One of the most
predominant consideration is the need of the institute, its
functional requirements and efficient management of its
manpower. These are the areas where the Court should not D
normally venture and judgment in this area should be best left
with the authorities who are in-charge of running or managing
such institutes. However, if the Court finds that the policy in fixing
the age of retirement was not based on any intelligible criterion
or is founded on such a basis which are patently unreasonable E
and perverse, the Court has a bounden duty to interfere and
direct the concerned management to proceed on a reasonable
basis.
29. In B. Bharat Kumar and Ors. Vs. Osmania University
and Ors. - (2007) 11 SCC 58, this Court expressed such a view
in paragraph 19 at page 73 of the judgment and which is
quoted below:
Learned counsel also argued, to a great extent, the
desirability of the age of superannuation being raised to G
60 or 62, as the case may be. We again reiterate that it is
not for this Court to formulate a policy as to what the age
of retirement should be as by doing so we would be trailing
into the dangerious area of the wisdom of the legislation.
If the State Government in its discretion, which is H
644 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A permissible to it under the scheme, decides to restrict the
age and not increase it to 60, or as the case may be, 62,
it was perfectly justified in doing so.
30. Similar views have been expressed recently by
B another Bench of this Court in Nagaland Senior Govt.
B
Employees Welfare Association and Ors. Vs. The State of
Nagaland and Ors. - Civil appeal No. 4955 of 2010 decided
on 6.7.2010. In paragraph 40 of the judgment this Court opined
as follows:
C ...The rule of retirement on completion of 35 years of
service has relevance to employees who have joined
service at an age below 25 years and the prescription with
regard to retirement at the age of 60 years is in respect
of the persons joining service at the age of 25 and
D thereafter. The above two categories of employees, though
performing similar duties and may be identically placed
otherwise can still be reasonably understood to form two
different classes to whom application of two rules of
retirement will not violate Article 14....
E
31. This Court must remember that in the segment of white
collared employees, opportunities are quite few and there is a
burning unemployment problem. Therefore, if considering the
ground realities the Government fixes 60 years as the age of
retirement for certain categories of employees, the Court
F F
should be very slow and circumspect before interfering with
such decisions.
32. This Court finds that there is a valid rationale in allowing
teachers and persons holding posts which are at par with
G teachers to work beyond 60 years. The reason for this is that it
is very difficult to find a good faculty of academicians for doing
the job of teachers. In any discipline and especially in a
discipline in an institute like I.I.T., it is very difficult to replace
an experienced teacher with years of learning, maturity and
H experience. This explains why in many cases even teachers are
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 645
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
retained beyond their extended period of retirement by way of
extension or their services are continued on the basis of re-
employment. This is done to preserve the intrinsic value and
quality of teaching imparted in these institutions.
33. Therefore, this Court does not find any error in the
decision of the appellant whereby the benefit of service upto
62 years is confined to teachers and to those employees who
are on a par with teachers. Thus, in passing the impugned order
of retirement of the first respondent on his attaining the age of
60 years, the appellant has not committed any illegality.
34. In this matter a somewhat larger question cropped up
in view of submissions made by learned Solicitor General, who
appeared on behalf of the Union of India, the second
respondent. The learned Solicitor drew our attention to Rule
209(6)(iv)(a) of Grants-in-aid and loan rules. Relying on the said
rules, the learned Solicitor submitted that the age of retirement
of teachers and others employed in I.I.Ts and I.I.Ms has been
fixed at par with Central Government employees. The said rule
is set out below:-
All grantee institutions or organizations which receive
more than fifty percent of their recurring expenditure in form
of grant-in-aid, should ordinarily formulate terms and
conditions of service of their employees which are by and
large not higher than those applicable to similar categories
of employees in central government. In exceptional cases
relaxation may be made in consultation with the Ministry
of Finance.
35. Considering the aforesaid stand of the second
respondent, a question of public importance which arises is
whether the aforesaid rules can be made applicable to I.I.Ts
and I.I.Ms which are Institutes of National importance. This Court
pointedly asked this question to the learned Solicitor whether
by applying the said rules independence of institutions like I.I.Ts
and I.I.Ms in matter of employment of the teachers is sought to
646 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A be controlled. Matter of concern for this Court is whether in the
process, the autonomy of these institutions is diluted by a
mindless bureaucratization of educational institutions which are
to function as centres of excellence and are Institutions of
National Importance.
B B
36. On such query being raised by this Court, the learned
Solicitor wanted some time for taking instructions and ultimately
filed an additional affidavit on behalf of Union of India, the
second respondent.
C C 37. Reference in this connection may be made to Entry 63
and 64 of List I of the Seventh Schedule of the Constitution.
Those two entries are set out:-
63. The institutions known at the commencement of this
D D Constitution as the Benares Hindu University, the Aligarh
Muslim University and the Delhi University; the University
established in pursuance of Article 371-E any other
institution declared by Parliament by law to be an institution
of national importance.
E E 64. Institutions for scientific or technical education financed
by the Government of India wholly or in part and declared
by Parliament by law to be institutions of national
importance.
F F 38. It may be mentioned that the Preamble of the Institutes
of Technology Act, 1961 (the said Act), which is an Act of
Parliament, shows that the same has been enacted to declare
certain institutions of technology to be institutions of National
Importance. Section 2 of the said Act runs as under:-
G G 2. Whereas the objects of the institutions known as the
Indian Institute of Technology, Bombay, the College of
Engineering and Technology, Delhi, the Indian Institute of
Technology, Kanpur and the Indian Institute of Technology,
Madras are such as to make them institutions of national
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 647
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
importance, it is hereby declared that each such institution
is an institution of national importance.
39. It is clear from Section 2 of the aforesaid Act that I.I.T
Kanpur is an Institution of National Importance. Section 4 of the
Act makes it clear that each of the institutions mentioned in
Section 2 shall be a body corporate having a perpetual
succession and a common seal.
40. Learned Solicitor submitted that the Union of India is
committed to ensure that these Institutions of National
Importance retain their autonomy and also continue as centres C
of excellence and ultimately become a world class centre of
academic pursuit and research.
41. From the stand of the Union of India, the second
respondent, it appears that under the said Act, every institute, D
under Section 4 of the said Act, shall have a Board of Governors
and under Section 11 of it the Chairman is to be nominated by
the Visitor. Under Section 9 of the Act the Visitor is the President
of India. It appears that it is the Board of Governors constituted
under Section 11, which is responsible for general
superintendence, directions and control of the affairs of the
institute. Under clause (d) of sub-section (2) of Section 13, the
Board of Governors is authorized to appoint persons to act as
academics and under this power the Board of Governors
appoint other persons to various posts in the institute. The
learned Solicitor further submitted that the actual composition F
of the Board of Governor of I.I.T, Kanpur consists mainly of
academician and educationists.
42. In the affidavit, disclosure about the composition of the
Board of Governors, which has been made is as follows:- G G
(a) Chairman - Prof. M. Anandakrishnan
(b) Member, ex-officio - Director (Prof. Sanjay Dhande)
(c) Member -
648 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A - Prof. R.S. Nirjhar, Vice-Chancellor, Gautam
Buddha University *(UP Govt. nominee)
- Shri Aman Kumar Singh, Secretary to Chief
Minister (Chattisgarh nominee)
B B (d) Member (4 persons having special knowledge to
be nominated by the Council):
- Prof. D.V. Singh, Former Vice-chancellor,
University of Roorkee.
C - Prof. Rajan Harshe, Vice-Chancellor, Allahabad
University.
- Shri Ashok Thakur, Additional Sec. GOI
- Shri N.K. Sinha, Joint Secretary, GOI
D (e) Members nominated by Senate:
- Prof. I.B. Dhariyal
- Prof. Rajiv Shekhar
43. Under Section 31 of the Act the Central Government
E E
may by a notification in the official gazette establish a Central
Board to be called the Council and in the Council the Minister
incharge of technical education of the Central Government shall
be the ex-officio Chairman.
F 44. From the list of the re-constituted Council of I.I.Ts it
appears that Chairman of all the I.I.Ts, namely, I.I.T Bombay,
I.I.T Delhi, I.I.T Guwahati, I.I.T Kanpur, I.I.T Kharagpur, I.I.T
Madras, I.I.T Roorkee are members of the said Council. Most
of them are professors or academicians. The list of the
aforesaid re-Council is set out below:-
List of Members of the re-constituted Council of
Indian Institutes of Technology (IITs)
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 649 650 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
A A Prof. Damodar Acharya, Member - do -
Name Provision in the Act
Director,
Shri Kapil Sibal Chairman of Ex-officio IIT Kharagpur
Honble Minister (HRD) the Council [Section 31(2)(a)]] Prof. M.S. Ananth, Member - do -
of IITs Director, IIT Madras
Dr. Anil Kakodkar, Member Ex-officio B B Dr. S.C. Saxena, Member - do -
Chairman, [Section 31(2)(b)]] Director, IIT Roorkee
BoG, IIT Bombay
Prof. Sukhdev Thorat, Member Ex-officio
Shri R.P. Agrawal, Member - do - Chairman, University (Section 31(2)(d)]
Chairman, BoG, Grants Commission
IIT Delhi C C Prof. Samir K. Member Ex-officio
Dr. R.P. Singh, Chairman, Member - do - Brahmachari, (Section 31(2)(e)]
BoG, IIT Guwahati Director General (DG),
Prof. M. Anandakrishnan, Member - do - Council of Scientific and
Chairman, Industrial Research
BoG, IIT Kanpur D D (CSIR)
Shri B. Muthuraman, Member - do - Dr. K. Kasturirangan, Member Ex-officio
Chairman, Chairman, (Section 31(2)(f)]
BoG, IIT Kharagpur Council of Indian
Dr. R. Chidambaram, Member - do - Institute of Science
Chairman, (IISC), Bangalore
E E
BoG, IIT Madras Prof. P. Balaram, Member Ex-officio
Shri Ashok Bhatnagar, Member - do - Director, [Section 31(2)(g)]
Chairman, Indian Institute of
BoG, IIT Roorkee Science (IISc), Bangalore
Prof. Devang V. Khakhar, Member Ex-officio Dr. S.S. Mantha, Member [Section 31(2)(i)]
F F
Director, (Section 31(2)(c)] Chairman,
IIT Bombay All India Council for
Technical Education
Prof. Surendra Prasad, Member - do -
(AICTE)
Director, IIT Delhi
Prof. C.N.R.Rao, Member [Section 31(2)(j)]
Prof. Gautam Barua, Member - do - G G Chairman, (term upto
Director,
Scientific Advisory 5.9.2012)
IIT Guwahati
Council to the Prime
Prof. S.G. Dhande, Member - do - Minister
Director,
Prof. C.S. Seshadri, - do - - do -
IIT Kanpur H H Director,
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 651 652 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
A A Shri R. Chandrasekhar, Representative - do -
Chennai Mathematical
Institute Secretary, of any
Department of other Central
Prof. Sabyasachi - do - - do -
Information Technology Government
Bhattacharya,
Ministry
Ex-Director,
Tata Institute of B B Shri Ashok Thakur, Secretary, [Section 31(3)]
Fundamental Research Additional Secretary IIT Council
(TIFR), Mumbai (HE),Ministry of Human
Resource Development,
Dr. Kota Harinarayan, - do - - do -
Deptt. of Higher
Chairman,
C C Education
Research Council of
Central Scientific
Instruments Organization 45. Under Section 33 of the Act it is the duty of the council
(CSIO), to coordinate the activities of all the institutes and to perform
National Aerospace all the functions which are specified under Section 33(2) of the
Laboratories, Bangalore D D Act.
Shri Tarun Das, - do - - do -
Chief Mentor, 46. Relying on the aforesaid provision of the Act and the
Confederation of Indian re-constituted Council of the I.I.Ts, the learned Solicitor
Industry, Gurgaon submitted, and in our view rightly, that all major decision making
Smt. Vasanthi Stanley, Member [Section 31(2)(k)] exercise has been left in the hands of the re-constituted Council
E E which is predominantly composed of academicians.
MP, Rajya Sabha (co-terminus)
Shri Deepender Singh - do - - do - 47. It appears from the disclosures made before us that
Hooda, MP, Lok Sabha the Council in its 40th meeting held on 19.10.2009 has
Shri Janardhana Swamy, - do - - do - constituted a committee under the Chairmanship of Dr. Anil
MP, Lok Sabha F F Kakodkar, Chairman, Board of Governors, I.I.T Bombay for
Smt. Vibha Puri Das, Representative [Section 31(2)(h)] suggesting a roadmap for the autonomy and the future of the
Secretary, Deptt. of of the I.I.Ts as world class institutions for research and higher
Higher Education Ministry of learning. Pursuant to the said resolution in the 40th meeting
Human Resource of the Council, a Committee has been constituted by the
Development
G G Ministry of Human Resource Development, Government of India
Ms. Sushma Nath, Representative - do - by a notification dated 3.2.2010. The prefatory part of the said
Secretary, of the notification is as follows:-
Department of Ministry of
Expenditure, Ministry of Finance In the 40th meeting of Council of IITs held under the
Finance Chairmanship of Honble HRM on 19th October, 2009
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 653
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
(refer minutes issued vide F. No. 19-3/2009- TS. 1 dated
24th November, 2009), it was decided that a Committee,
comprising Dr. Anil Kakodkar, Chairman, BoG, IIT Bombay
and four other members to be nominated by him, may be
constituted for suggesting a roadmap for the autonomy and
the future of the IITs as world class institutions for research
and higher learning.
2. Accordingly, it has been decided to constitute a
Committee under the Chairmanship of Dr. Anil Kakodkar,
Chairman, BoG, IIT Bombay to suggest a roadmap for the
autonomy and future of the IITs. Composition of the
Committee will be as under:
48. And the terms of reference of the Committee are as
under:-
The Terms of Reference of the Committee are as follows:
1. To suggest a road-map for strengthening Financial,
Administrative and Academic autonomy of the IITs;
2. The issue of autonomy is closely linked with the
capacity of institutions to raise their own resources
including through increase in fees in the IITs albeit
in a gradual manner. While doing so interest of the
weaker sections of the society could be taken care
of. The committee is to suggest a means-blind
system wherein scholarships are provided to the
deserving, and a system of education loans
dovetailed into it. For the students who continue to
research and take up teaching assignments as a
career, a system of interest, loan scheme could
be explored;
3. The Committee to suggest ways and means to
retain/attract top B.Tech students within the IIT
system and outside to Post Graduate and Ph. D
programmes. Institutes should be incentivised by
654 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A way of higher funding based upon the number of
Post Graduate student enrolled and number of Ph.
Ds awarded each year;
4. The Committee could consider the issue of faculty
B induction and development. Measures to improve
B
the strength of IIT faculty may be suggested for
adoption and implementation;
5. To suggest a self primed system within the IITs to
achieve the optimal level of intake of students each
C C year (UG and PG), which but for the MHRD initiated
OSC expansion programme has remained
stagnant. The Committee could explore the
possibility of releasing funds to the Institute on per
student basis to incentivise growth;
D D
6. To suggest means to raise the resources/corpus of
the IITs through research project from the
Government, Industry, Consultancy, Donations from
alumni, etc., and to explore the possibility of
E matching grants from the Ministry;
E
7. During the XI Plan period, the IITs have been in an
expansive mode in that it doubled its numbers from
7 to 15. The Committee to take stock of the present
expansion programme and also suggest the future
F F course of action in terms of inclusion, expansion
and excellence in the XII Plan period and beyond;
8. The Committee will also look into possible synergies
that could be developed from not only interaction
G G and collaboration amongst the IITs, e.g., consortium
of IITs to take up research projects etc., but also
linking up with other national Institutes like IIMs,
IISERs, IISc., IITs, NITs, etc. The Committee will also
look into the role that IITs have been playing and
could play in the future to increase its role as a
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 655
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
human resource and technology provider in support
of inclusive national development in a rapidly
developing/growing economy; and
9. The Committee would also review a few similar
exercises that have taken place elsewhere in the
world to understand the process involved to arrive
at credible recommendations. For this purpose, the
Committee could invite a few eminent leaders from
some of the successful institutions for discussions
and advice. The Committee would also consult
different stakeholders, e.g., IIT Management,
Faculty, Alumni, Industry, S&T agencies, Technical
Education experts, etc. The Committee may also
take into account Prof. P. Rama Rao Committee
recommendations and others while working out a
road-map for IITs to scale new heights.
49. The learned Solicitor further argued relying on a
communication dated 22.7.2010 that in order to minimize the
Governments interference in the functioning of the I.I.Ts, it has
been decided that the employees of the I.I.Ts instead of
addressing their grievance directly to the Ministry or directly to
the Visitor should refer their grievances or representations
within the institute and institute may evolve a procedure for
redressing grievance and appeals of such employees so that
the Ministry does not have to intervene. The purpose of issuing
the said communication, which has been disclosed in para 3
thereof, is set out below:-
I shall be grateful if all references to the Ministry are sent
in the rarest of cases. This will go a long way in helping
the Division to discharge its responsibilities more
efficiently and at the same time strengthen the autonomy
issues of the institutes.
50. The learned Solicitor also argued that the Council in
its 39th meeting dated 28.1.2009 recommended that the age
656 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A of superannuation of the Directors of I.I.T should be enhanced
to 70 years and the age of superannuation for faculty members
should be enhanced to 65 years. It has also been brought to
our notice that the Visitor of the Institute, President of India, has
approved the said proposal for making suitable amendment in
B B the statutes of I.I.T. The approval of the Visitor for making
suitable amendments in the statutes of I.I.T has also been
disclosed before this Court and in the communication dated
20.7.2010 on behalf of the second respondent it has been
made clear as follows:-
C C
It has also been noticed that many of the provisions
contained in the Statutes of IITs have become obsolete or
are not updated. You are advised to initiate action to
update the provisions of the Statutes. The Statutes of IIT
Roorkee which are available on the website of IIT Roorkee
D D could be used as a model for updating the Statutes.
51. The learned Solicitor also brought to our notice that the
Government of India, Ministry of Human Resource Development
has already set up on 29.8.2008 a Committee under the
E E Chairmanship of Professor Goverdhan Mehta and five others
to consider the revision of pay scales of the faculty and scientific
staff of Central Technical Institutes and Professor Goverdhan
Mehta Committee has on 7.02.2009 submitted its report
regarding revision in pay and pursuant to such report of the
F F Goverdhan Mehta Committee, the Government of India, Ministry
of Human Resource Development has on 18.8.2009 and
16.9.2009 decided to revise the pay of teaching and members
of other staff of centrally funded institutions. The attention of this
Court has been drawn to the fact that the revision which has
been approved by the Ministry is higher than the one
G G
recommended by the Goverdhan Mehta Committee. In the
forwarding letter given by the said committee, the Chairman of
the Pay Committee opined as follows:-
The Pay Committee is of the considered opinion that the
H H
 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 657
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
acceptance of the recommendations would attract and
retain outstanding academic talent in the field of teaching
in technical and professional institutions. It would also help
in the emergence of India as a major player in the world
of Science and Technology.
52. From the materials which have been disclosed before
this Court in the additional affidavit filed by the second
respondent, this Court is of the view that autonomy of those
institutes is not being diluted. On the other hand an attempt is
made by the Government of India to improve the academic
ambience of these institutes by recommending extension of
age of retirement of the Director of the Institute and of members
of the academic faculty. Attempt has also been made to attract
the best talent by a progressive revision of the pay scale. From
the report of Professor Mehta Committee some portions are
excerpted below and which would show that relevant aspects
of strengthening the autonomy of the institute coupled with
improving the performance of the institute as a centre of
excellence has been engaging the attention of the Government
of India. Those key concerns addressed in the report are set
out below:-
1.5 The New Challenges
The key, therefore, lies in the expansion - more than ever
before- of our higher education base, particularly of
science and technology and a better societal context
connect. We must, therefore,convert this potential of
becoming a developed society and a leading player in
World affair in the 21st Century into a reality - and do it
real fast. We need many more quality institutions of global
academic standing with the highest possible standards in
Science, Technology and Management. And also, we need
to expand the intake of the existing institutions, to provide
opportunities and access to more students, especially
from the socially challenged sections of the society.
658 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Recent upheavals in the world economy have underscored
once again and more urgently the need for investing large
resources into quality higher education so as to provide a
platform for accelerated innovations, developing cutting
edge and sustainable technologies to take care of our
B B emerging needs and also to play a more significant role
in the recovery of the world economy.
1.10 What needs to be done?
As is obvious from the above, teaching institutions like the
C C IIT, IIM, NIT etc. need to offer, as a first step, better pay
scales. And it is not just the scales of pay but a whole
package of financial incentives, allowances and other
benefits that needs to be offered to faculty members, more
specifically to make it attractive at the entry level.
D D
However, it may also be recognized that better pay
package though essential may not be sufficient for
attracting competent persons to the realm of teaching and
academia. Institutions may also have to offer better
E research support and facilities.
E
Institutions also need to create and strengthen more
research friendly environment and foster creativity in order
to attract new entrants in to the portal of the academic
world and also to retain the existing faculty. Additionally,
F F institutions need to devise robust instruments of peer
assessment to recognize and reward outstanding merit
among the members of the faculty.
53. In view of such disclosure of materials, this Court is
G G satisfied that the autonomy of these institutes is preserved and
they are structurally built up as centres of academic excellence
and the concern of the Court has been answered and satisfied
to a large extent.
54. The appeal, therefore, succeeds. However, this Court
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 INDIAN INSTITUTE OF TECHNOLOGY, KANPUR v. 659
RAJA RAM VERMA [ASOK KUMAR GANGULY, J.]
finds that the first respondent had to stay in the quarter for some
time more than the scheduled period which is permissible under
the Rules and the appellant has charged penal rent for the
same. If the first respondent makes a suitable representation
within six weeks, from the date of receiving a copy of this
judgment, for reducing the amount which has been charged as
penal rent from him, the appellant will consider and dispose of
the same by a speaking order within two months thereafter in
accordance with law but by taking a sympathetic view.
55. The appeal is allowed. The order of the High Court is
set aside. However, there will be no order as to costs.
D.G. Appeal allowed.
[2010] 15 (ADDL.) S.C.R. 660
A A UNION OF INDIA
v.
SURESH KUMAR NAYAK
(Civil Appeal No. 231 of 2005)
NOVEMBER 25, 2010
B B
[DALVEER BHANDARI AND H.L. GOKHALE, JJ.]
Service law:
Cadre Trifurcated cadres Four units of Directorate
C C
General of Security comprising of joint cadres
Administrative control of two units of Directorate General of
Security transferred from Cabinet Secretariat to Ministry of
Home Affairs Trifurcation of Directorate General of Security
D into three units Apportionment of staff on as is where is
basis Challenged by respondent-employee on the ground
that he was denied the right to seek allocation to unit of his
choice Held: Challenge not tenable There was no
infringement of any fundamental right or any other right of the
respondent The entire two units were shifted to the Ministry
E
of Home Affairs and, therefore no individual option was given
Constitution of India, 1950 Articles 14, 16.
Merger of dissimilar cadres Factors to be taken into
consideration in determining the equation of posts Re-
F iterated.
Promotion Right to be considered for promotion is a
term of service, but mere chances are not Reduction in
chances of promotion does not tantamount to a change in the
G condition of service.
The Special Service Bureau, the Aviation Research
Centre, the Special Frontier Force and the Chief
Inspectorate of Armaments (CIOA) were the four units of
the Directorate General of Security under the Cabinet
H 660
 UNION OF INDIA v. SURESH KUMAR NAYAK 661
Secretariat. These four units had a common and
combined Directorate General of Security (Secretarial)
Service comprising of four cadres, namely Secretarial,
Ministerial, Accounts and Stenographers Cadres with
inter-se seniority and inter unit transfer liability.
The Union of India took a policy decision on
15.1.2001 to transfer the administrative control of the
Special Service Bureau and the Chief Inspectors of
Armaments from the Cabinet Secretariat to the Ministry
of Home Affairs and merged the ministerial staff of the
Chief Inspectorate of Armaments with that of Special
Service Bureau. As a consequence of transfer of Special
Service Bureau and the Chief Inspectorate of Armaments,
on 23.8.2001, two units of the Cabinet Secretariat were
transferred to the Ministry of Home Affairs. Thereafter, the
Office of Directorate General of Security (Secretarial) D
Service was trifurcated into Special Service Bureau
(including Chief Inspectorate of Armaments) (Secretarial)
Service; Aviation Research Centre (Secretarial) Service;
and Special Frontier Force (Secretarial) Service. The
Secretarial/Ministerial Staff of the Directorate General of E
Security (Secretarial) Service was apportioned on as is
where is basis.
The respondent who was working in Special Service
Bureau filed an original application before the Central F
Administrative Tribunal challenging the validity of the
trifurcation orders of the Directorate General of Security
(Secretarial) Service on the ground that no opportunity
was provided to the staff of erstwhile Directorate General
of Security (Secretarial) Service to exercise option for G
choosing an organization out of the three organizations
which violated his fundamental right under Articles 14
and 16 of the Constitution. The Tribunal allowed the OA.
The Union of India filed a writ petition before the High
662 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Court. The High Court dismissed the writ petition holding
that an opportunity to exercise the option had to be
granted to the respondent.
The questions which arose for consideration in the
instant appeal were whether the High Court was justified
B B
in setting aside the policy decision of the Government of
India of trifurcation of the Directorate General of Security
(Secretarial) Service into three organisations on the
principle of as is where is basis only on the ground that
the said decision did not provide opportunity to the staff
C C of erstwhile Directorate General of Security (Secretarial)
Service to exercise option for choosing an organisation
of their choice; and whether the High Court was right in
relying upon the circular issued by the Ministry of
Personnel, Public Grievances and Pension, in May, 1994
D at the time of bifurcation of Ministry of Communication,
which provided for an opportunity to the staff concerned
to exercise option for choice between the bifurcated
cadres.
E Allowing the appeal, the Court
HELD: 1. The High Court was not justified in relying
on the Circular issued by the Ministry of Personnel and
Public Grievances and Pension on 18.5.1994 in which the
resultant units (after bifurcation) still remained part and
F parcel of the parent Ministry. In the instant case, the entire
two units were shifted from the Cabinet Secretariat to the
Ministry of Home Affairs and it was, therefore, decided not
to give individual option. The Central Administrative
Tribunal erroneously held that the respondents
G
fundamental rights were infringed. The High Court was
not justified in affirming the judgment of the Tribunal
because there was no infringement of any fundamental
right or any other right of the respondent. [Paras 19, 20]
[669-C-E]
H H
 UNION OF INDIA v. SURESH KUMAR NAYAK 663 664 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.

2. In *Pipal case and in **Chandrakant case, this A A CIVIL APPEALLATE JURISDICTION : Civil Appeal No.
Court had laid down that when different cadres are 231 of 2005.
merged, certain principles have to be kept in mind which
are (1) where there were regularly constituted similar From the Judgment & Order dated 6.11.2003 of the High
cadres in the different integrating units, the cadres will Court of Delhi at New Delhi in W.P. No. 3000 of 2003.
ordinarily be integrated on that basis but (2) where there B B Binu Tamta, Sadhana Sandhu, Samridhi Sinha and S.N.
were no such similar cadres, the following factors will be
Terdal (for Sushma Suri) for the Appellant.
taken into consideration in determining the equation of
posts:- (a) Nature and duties of a post; (b) Powers K.L. Bhandula and Ashwani Bhardwaj for the Respondent.
exercised by the officers holding a post, the extent of
territorial or other charge held or responsibilities C The Judgment of the Court was delivered by
C
discharged; (c) The minimum qualifications, if any,
DALVEER BHANDARI, J. 1. This appeal is directed
prescribed for recruitment to the post and; (d) the salary
against the judgment and order dated 6.11.2003 passed by the
of the post. [Para 25] [671-B-F]
High Court of Delhi in Civil Writ No.3000 of 2003. Brief facts
*S.P. Shivprasad Pipal vs. Union of India and Ors. which are necessary to dispose of this appeal are recapitulated
(1998) 4 SCC 598; **State of Maharashtra and Anr. vs. D D as under:
Chandrakant Anant Kulkarni and Ors. (1981) 4 SCC 130
2. The Directorate General of Security (for short DGS)
relied on.
under Cabinet Secretariat had four units.
3. The claim of respondent that his chances of
promotion were reduced by transferring his unit to the E E (1) (2) (3) (4)
Ministry of Home Affairs is set aside. Although a right to
be considered for promotion is a term of service, but Special Aviation Special Chief
mere chances of promotion are not. Reduction in Service Research Frontier Force Inspectorate of
chances of promotion does not tantamount to a change Bureau (SSB) Centre (ARC) (SFF) Armament
in the condition of service. In the instant case, even F (CIOA)
F
according to the appellant, the chances of promotion
have in fact been increased. The respondent was not These four units had a common and combined DGS
able to make out that his case fell in any of the four (Secretarial) Service with inter-se seniority and the inter unit
criteria laid down in *Pipal case. The judgments of the transfer liability having 4 cadres:
Tribunal and the High Court are set aside. [Paras 21, 26- (1) Secretarial
G G
29] [669-E; 671-G-H; 672-A-B] (2) Ministerial
Case Law Reference: (3) Accounts
(1998) 4 SCC 598 relied on Para 23, 25 (4) Stenographers

(1981) 4 SCC 130 relied on Para 25, 26 H H

 UNION OF INDIA v. SURESH KUMAR NAYAK 665
[DALVEER BHANDARI, J.]
3. The respondent was directly recruited as Assistant in
the year 1995 in the Special Service Bureau. In 1996, he
requested for his transfer to another unit Aviation Research
Centre but he could not be transferred for administrative
reasons.
4. It may be pertinent to mention here that the Union of
India took a policy decision in January, 2001, to transfer the
administrative control of the Special Service Bureau and the
Chief Inspectors of Armaments from the Cabinet Secretariat
to the Ministry of Home Affairs vide Cabinet Secretariat Order
No.1/2/2001-EA-1 dated 15.1.2001 and merged the ministerial
staff of the Chief Inspectorate of Armaments with that of Special
Service Bureau. As a consequence of transfer of Special
Service Bureau and the Chief Inspectorate of Armaments, two
units of the Cabinet Secretariat were transferred to the Ministry
of Home Affairs, vide Cabinet Secretariat Order NO.I/2/201-
EA-1-3483-A, dated 23.08.2001.
5. The office of Directorate General of Security
(Secretarial) Service was trifurcated into:
(i) Special Service Bureau (including Chief
Inspectorate of Armaments) (Secretarial) Service;
(ii) Aviation Research Centre (Secretarial) Service;
and
(iii) Special Frontier Force (Secretarial) Service.
6. The Secretarial/Ministerial Staff of the Directorate
General of Security (Secretarial) Service was apportioned on
AS IS WHERE IS basis with the approval of the Directorate
General of Security (Secretarial), Home Secretary and the
Cabinet Secretary and the incumbents of the appointed posts
were made to continue in their respective units on AS IS
WHERE IS basis at the time of trifurcation on 23.1.2001.
7. The respondent challenged the validity of the Cabinet
666 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Secretariat Order dated 23.8.2001 and the Special Service
Bureau Directorates order dated 21.12.2001 containing the
trifurcation orders of the Directorate General of Security
(Secretarial) Service before the Central Administrative Tribunal,
Principal Bench, New Delhi.
B B
8. The order was assailed on the ground that the said
orders did not provide opportunity to the staff of the erstwhile
Directorate General of Security (Secretarial) Service to
exercise option for choosing an organisation of their choice out
of the three organisations.
C C
9. According to the respondent, allocating staff to other
units in the cadre on the basis of AS IS WHERE IS is arbitrary
and violative of Article 14 and 16 of the Constitution. The
respondent prayed that the aforesaid orders dated 23.08.2001
D D and 21.12.2001 be quashed.
10. The respondent also prayed that the appellant Union
of India be directed to provide an opportunity to the incumbents
of the erstwhile Directorate General of Security (Secretarial)
E Service to opt any of these trifurcated services in a fair and just
E
manner.
11. The Central Administrative Tribunal (Tribunal, for
short) by its order dated 13.11.2002 allowed the original
application filed by the respondent and held that the order dated
F F 9.9.1993 by which the joint cadre has been done away with is
clearly violative of the rights of the respondent under Article 16
of the Constitution.
12. The Tribunal also observed that once a joint cadre is
G G created under the orders of a competent authority, it can only
be dismembered if the fundamental rights of the public servants
are not infringed. The Tribunal further observed as under:
In this case we find that earlier these were four units which
were trifurcated in three units. One unit is under the Ministry
H H
 UNION OF INDIA v. SURESH KUMAR NAYAK 667
[DALVEER BHANDARI, J.]
of Home Affairs and the other two remain under the
Ministry of Communication. This fact does not affect the
right of the applicant to seek allocation to a particular unit.
The infringement of the fundamental right of the applicant
would definitely affect this service conditions. Thus, we find
that the impugned order cannot be sustained. While
allocating the cadres we hope the direction of DOPT as
followed in the case of Ministry of Communication, will be
taken into consideration. The OA is allowed in the
aforesaid terms. No costs.
13. The appellant Union of India aggrieved by the order
dated 13.11.2002 passed by the Tribunal, filed a writ petition
before the Division Bench of the Delhi High Court. The Division
Bench relied on the Circular dated 18.5.1994 issued by the
Ministry of Personnel, Public Grievances and Pension when the
two separate cadres in the Ministry of Communications were
created and came to the conclusion that an opportunity to
exercise the option had to be granted to the respondent. The
writ petition filed by the Union of India was dismissed by the
High Court by the impugned judgment.
14. The appellant aggrieved by the impugned judgments
of the Tribunal and Delhi High Court has preferred this appeal
on the following questions of law:
(a) Whether the High Court is justified in setting
aside the policy decision of the Government of India of
trifurcation of the Directorate General of Security
(Secretarial) Service into three organisations on the
principle of AS IS WHERE IS basis only on the ground
that the said decision did not provide opportunity to the staff
of erstwhile Directorate General of Security (Secretarial)
Service to exercise option for choosing an organisation of
their choice?
(b) Whether the High Court is right in relying upon
the circular issued by the Ministry of Personnel, Public
668 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Grievances and Pension, in May, 1994 at the time of
bifurcation of Ministry of Communication, which provided
for an opportunity to the staff concerned to exercise option
for choice between the bifurcated cadres?
15. The appellant submitted that the circular of 1994
B B
related to bifurcation of the Ministry of Communication and in
that case the resultant units still remained part and parcel of
the parent Ministry i.e. Ministry of Communication even after the
bifurcation. While the organisation of the Directorate General
of Security (Secretarial) Service trifurcated into three different
C C and independent departments under the Ministry of Home
Affairs under the Cabinet Secretariat.
16. It was also submitted that the object of bifurcation in
the case of former is the classification of the two cadres on the
D D basis of different functions to be performed by them for better
command and control, whereas in the present transfer case,
the trifurcation was related as a consequence of transfer of
administrative control of the Special Service Bureau to the
Ministry of Home Affairs from Cabinet Secretariat, in the interest
E E of national security i.e. to guard international border all along
Indo Nepal border.
17. Special Service Bureau, Aviation Research Centre,
Special Frontier Force and the Chief Inspectorate of
Armaments (CIOA) were four units of the Directorate General
F F of Security under the Cabinet Secretariat. These four units had
a common and combined Directorate General of Security
(Secretarial) Service comprising of four cadres, namely
Secretarial, Ministerial, Accounts and Stenographers Cadres
with inter-se seniority and inter unit transfer liability as notified
G G under the Recruitment Rules vide Cabinet Secretariat
Notification No.EA/SE-115/70 dated 04.11.1975.
18. According to the appellant, the policy decision of the
Government of India taken at the highest level in the interest of
H H national security ought not to have been interfered with by which
 UNION OF INDIA v. SURESH KUMAR NAYAK 669
[DALVEER BHANDARI, J.]
two units, namely, Special Service Bureau and Chief
Inspectorate of Armaments were transferred from the Cabinet
Secretariat to the Ministry of Home Affairs. On transfer, the
entire staff of the Special Service Bureau enblock was
alsotransferred to the Ministry of Home Affairs. When the entire
unit was transferred, there was no question of giving an option
to the respondent and similarly placed other employees.
19. In the impugned judgment, the High Court was not
justified in relying on the Circular issued by the Ministry of
Personnel and Public Grievances and Pension on 18.5.1994.
In the instant case, the entire two units were shifted from the
Cabinet Secretariat to the Ministry of Home Affairs. It was
decided not to give individual option.
20. The Central Administrative Tribunal erroneously held
that the respondents fundamental rights were infringed and
accordingly it quashed the order dated 9.9.1993. In the
impugned judgment the High Court was not justified in affirming
the judgment of the Central Administrative Tribunal because,
in our considered view, there has been no infringement of any
fundamental right or any other right of the respondent.
21. The respondent has claimed that his chances of
promotion have been reduced by transferring his unit to the
Ministry of Home Affairs. According to the appellant, even this
is not factually correct. The appellant filed an additional affidavit
before the High Court in which it was mentioned that as per
the combined common seniority of Assistants in the Directorate
General of Secretarial Service, as it stood on 23.8.2001 i.e.
before trifurcation, respondent Suresh Kumar Nayak was
placed at Serial No.116 out of 176 Assistants shown in the
seniority list, excluding the Assistants on deputation. After
trifurcation of the Directorate General of Secretarial Service in
2001, taking his continuation in the Special Service Bureau as
Assistant, his placing in the seniority list of the said unit is at
Serial No.65 out of 112 Assistants. Similarly, he was allotted/
transferred to Aviation Research Centre on trifurcation of
670 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Directorate General of Secretarial Service and is borne on
Aviation Research Centres strength and his placing in the the
seniority list would be at Srl. No.28, out of 46 posts of Assistants
allotted to the Aviation Research Centre. Suresh Kumar Nayak,
Assistant was not interested to be transferred/ allocated to
B B Special Frontier Force on trifurcation.
22. According to the learned counsel for the appellant, if
the chances of promotion are affected, even then it would not
be a case where the Court would be justified in allowing the
original application on the ground of infringement of the
C C respondents fundamental rights under Articles 14 and 16 of the
Constitution.
23. Learned counsel for appellant placed reliance on a
judgment of this Court in S.P. Shivprasad Pipal vs. Union of
D D India and Ors., (1998) 4 SCC 598. In this case, by notification
dated 3.2.1987, the Central Labour Service was created by
merging the following three cadres:
(a) Central Industrial Relations Machinery consisting of
Assistant Labour Commissioner (Central), Regional
E E Labour Commissioner (Central), Deputy Chief Labour
Commissioner (Central, Joint Chief Labour Commissioner
(Central) and Chief Labour Commissioner (Central).
(b) Labour officers (Central pool) consisting of Labour
F F Officers and senior labour Officers.
(c) Labour Welfare Commissioners cadre consisting of
Assistant Welfare Commissioner and Welfare
Commissioner.
G G 24. This Court observed as under:
A decision to merge such cadres is essentially a matter
of policy. Since the three cadres carried the same pay
scale at the relevant time, merging of the three cadres
H H cannot be said to have caused any prejudice to the
 UNION OF INDIA v. SURESH KUMAR NAYAK
[DALVEER BHANDARI, J.]
members of any of the cadres. The total number of posts
were also increased proportionately when the merger took
place so that the percentage of posts available on
promotion was not in any manner adversely affected by the
merger of the cadres.
25. This Court laid down that when different cadres are
merged, certain principles have to be borne in mind. These
principles were enunciated in the case of State of Maharashtra
and Anr. vs. Chandrakant Anant Kulkarni and Ors., (1981) 4
SCC 130 and have been approved subsequently in the case
of S.P. Shivprasad Pipal (supra) and they are reproduced as
under:
(1) where there were regularly constituted similar
cadres in the different integrating units the cadres will
ordinarily be integrated on that basis but
671 672 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 27. In the instant case, even according to the appellant, the
chances of promotion have in fact been increased.
28. Mr. K.L. Bhandula, learned counsel appearing for the
respondent has not been able to make out that his case falls
B in any of the four criteria which have been laid down in the case
B
of Shivprasad Pipal (supra).
29. In this view of the matter, we are constrained to set
aside the impugned judgment dated 13.11.2002 of the Tribunal
as well as the judgment dated 6.11.2003 passed by the High
C C Court of Delhi in Civil Writ Petition No.3000/2003.
30. Consequently, this appeal is allowed. The original
application filed by the respondent stands dismissed. In the
facts and circumstances of the case, we direct the parties to
D D bear their own costs.

(2) where there were no such similar cadres, the D.G. Appeal allowed.
following factors will be taken into consideration in
determining the equation of posts:-

(a) Nature and duties of a post; E

(b) Powers exercised by the officers holding a post the

extent of territorial or other charge held or responsibilities
discharged;
F
(c) The minimum qualifications, if any, prescribed for
recruitment to the post and;

(d) the salary of the post.

26. In the Chandrakant Anant Kulkarni (supra) this Court G

has laid down the principle that mere chances of promotion are
not conditions of service and the fact that there was reduction
in the chances of promotion did not tantamount to a change in
the conditions of service. A right to be considered for promotion
is a term of service, but mere chances of promotion are not. H
 [2010] 15 (ADDL.) S.C.R. 673
CHIRRA SHIVRAJ
v.
STATE OF ANDHRA PRADESH
(Criminal Appeal No. 514 of 2010)
NOVEMBER 26, 2010
[P. SATHASIVAM AND ANIL R. DAVE, JJ.]
Penal Code, 1860 s.304 Part II Death due to burn
injuries Deceased had strained family relations with the
accused-appellant, her brother-in-law She made a dying
declaration before a Judicial Officer Conviction by courts
below on the sole basis of the dying declaration Justification
of Held: Justified The dying declaration was trustworthy
and reliable and it was supported by the complaint The
declaration was scrupulously recorded by the Judicial Officer
who had found the deceased to be conscious and fit to make
statement In the circumstances of the case, merely because
a second FIR was filed, it cannot be stated that the entire
investigation was defective and that should result into acquittal
of the accused The first FIR was recorded on the basis of
the statement made by the deceased when she was alive and
upon her death, which had nexus with her burn injuries, further
information was given and that was recorded as a second FIR
The second FIR did not make the case of the prosecution
weak especially when no prejudice had been caused to the
accused-appellant or any other person because of the
aforestated further information with regard to the death being
recorded as a new FIR Also, no allegation was made to the
effect that the contents of the second FIR were incorrect or
malicious or there was any oblique motive Besides, there
was no fresh investigation in pursuance of the second FIR
FIR Second FIR.
Evidence Act, 1872 s.32 Dying declaration
Appreciation of Held: If dying declaration is trustworthy and
673
674 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A if it can be shown that the person making the statement was
not influenced by any exterior factor and made the statement
which was duly recorded, it can be made basis for conviction.
The deceased had strained family relations with her
brother-in-law, the appellant. According to the
B B
prosecution, the appellant used to regularly abuse the
deceased and one day, as usual, when the deceased was
being abused by the appellant, she poured kerosene on
herself and thereafter the appellant hurled a lighted match
stick on her, because of which she was in flames and was
C C severely burnt. The deceased was brought to the hospital
by her husband.
PW11, the Assistant Sub Inspector recorded the
statement of the deceased at the hospital. FIR was filed
D D on the basis of the statement made by the deceased
against the appellant for commission of offence under
Section 307 IPC. Looking to the nature of burn injuries
suffered by the deceased, her dying declaration was
recorded by PW10, First Class Judicial Magistrate.
E E Because of the burn injuries, the deceased suffered from
septicemia and as a result thereof she died. Therefore, the
appellant was also charged under Section 302, IPC.
At the time of the trial, most of the witnesses, who
were family members of the deceased as well as the
F F appellant, turned hostile. However, on the basis of the
dying declaration (Ext.P.12), which supported the
contents of the FIR filed by the complainant, the trial court
convicted the appellant under Section 304 Part II, IPC and
sentenced him to undergo simple imprisonment for five
G G years. The High Court confirmed the order of conviction.
In the instant appeal, the appellant contended that
the trial court had erred in convicting the appellant only
on the basis of the dying declaration. He also contended
H H that though investigation in the case was made under the
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 675
first FIR, ultimately the order of conviction was passed in
pursuance of the second FIR, which was bad in law.
Dismissing the appeal, the Court
HELD:1. The order passed by the High Court
confirming the order of conviction passed by the trial B
court cannot be said to be bad in law. The trial court had
duly considered the fact that the dying declaration was
trustworthy and reliable and it was supported by the
complaint and as a result thereof, the order of conviction
was also confirmed by the High Court. [Para 11] [681-C] C
2. If dying declaration is trustworthy and if it can be
shown that the person making the statement was not
influenced by any exterior factor and made the statement
which was duly recorded, it can be made basis for D
conviction. In the instant case, immediately after the
incident, the deceased was taken to the Government
Hospital, and upon getting information with regard to the
offence, the ASI had rushed to the Government Hospital,
and the deceased had made her statement before him E
and thereafter she had made her dying declaration before
a judicial officer. The said statement was scrupulously
recorded by the Judicial Officer who had found the
deceased to be conscious and fit to make statement.
There was no doubt with regard to the truthfulness of the
F F
dying declaration and, therefore, it cannot be said that on
the sole basis of dying declaration the order of conviction
could not have been passed. [Paras 12, 13] [681-D-F; 682-
D]
Puran Chand v. State of Haryana 2010 (6) SCC 566 G
relied on.
3.1. The first FIR was recorded on the date on which
the offence had taken place. On that day, Assistant Sub
676 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Inspector (P.W.11) had recorded the statement made by
the deceased, when she was admitted to the Government
Civil Hospital, and on the basis of the said statement the
aforesaid FIR was recorded. At the relevant time, the
deceased had received serious burn injuries and,
therefore, an offence an under the provisions of Section
B
307 IPC had been registered. Subsequently, the
deceased suffered from septicemia, which was caused
due to the burn injuries and as a result thereof she
expired. The said fact was reported by the husband of the
deceased to the police authorities and thereupon the said
C
fact was recorded as a second FIR. Thus, by virtue of the
second FIR, further development which had taken place
had been recorded. The said development was with
regard to the death of the deceased and, therefore, an
offence under the provisions of Section 302 of the IPC
D
had been registered. [Para 15] [683-E-H]
3.2. The second FIR was nothing but an information
with regard to the event of death. In the circumstances,
the contents of the so called second FIR could have been
E incorporated in the police diary as a result of further
information or event which had been taken place in
pursuance of the first offence, which had been recorded
under the first FIR. As a mater of fact, it was not necessary
to note the same as a new FIR but simply because the
S.H.O made a mistake by recording it as a fresh FIR, it
would not make the case of the prosecution weak
especially when no prejudice had been caused to the
appellant or any other person because of the aforestated
further information with regard to the death being
G recorded as a new FIR. The submission made by the
appellant was to the effect that by adopting such a
method, the prosecution can involve someone wrongly
in the offence and, therefore, such a course should not
have been adopted and as it was adopted by the
H H prosecution, the appellant must get benefit of such a
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 677
mistake by getting an order of acquittal. The aforestated
submission cannot be accepted for the reason that there
is no allegation to the effect that the contents of second
FIR are incorrect or malicious or there was any oblique
motive behind giving further information. The information
which was given to the Authorities was only with regard
to the death of the deceased which resulted due to
septicemia and septicemia was only on account of the
burn injuries suffered by the deceased. Also, it is a fact
that there was no fresh investigation in pursuance of the
second FIR. [Paras 17, 18] [684-C-H; 685-A]
3.3. Even the appellant could not show that the
information with regard to the death of the deceased,
which was recorded as second FIR caused any prejudice
to the accused. In the aforestated circumstances, it
cannot be stated that merely because second FIR was
filed, the entire investigation was defective and that
should result into acquittal of the accused. [Para 19] [685-
C-D]
Babubhai v. State of Gujrat & Others [Criminal Appeal
No.1599 of 2010 ; Decided by Supreme Court on 26th
August, 2010] and T.T. Antony etc. v. State of Kerala and
others 2001(6) SCC 181 referred to.
Case Law Reference:
2001(6) SCC 181 referred to Para 8
2010 (6) SCC 566 relied on Para 12
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 514 of 2010.
From the Judgment & Order dated 3.7.2009 of the High
Court of Judicature, Andhra Pradesh at Hyderabad in Criminal
Appeal No. 579 of 2004.
678 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A A.D.N. Rao, Ramesh, G. Madhavi for the Appellant.
Aneesh, D. Mahesh Babu for the Respondent.
The Judgment of the Court was delivered by
B B ANIL R. DAVE, J. 1. Being aggrieved by the Judgment
and order dated 3rd July, 2009, passed in Criminal Appeal
No.579 of 2004 by the Andhra Pradesh High Court, confirming
the order of conviction passed by the trial court, this appeal has
been filed by the appellant who has been convicted under the
C C provisions of Section 304 Part II of the Indian Penal Code and
has been sentenced to undergo simple imprisonment for five
years. The case of the prosecution in a nut shell is as under.
2. Chirra Shantha (the deceased) had strained family
relations with her husbands brother, the appellant. There was
D D a family dispute with regard to a property wherein the husband
of the deceased and the appellant were residing and the
appellant wanted his brother Nagabhushanam to leave the
property. It is alleged that the appellant used to regularly abuse
the deceased and on 21st April, 1999, around 1.30 p.m., he
E E had abused the deceased to such an extent that the deceased
was fed up with the abusive language and so as to get rid of
the appellant for the time being, she had poured kerosene on
herself, believing that the appellant would go away because of
her pouring kerosene on herself but while using abusive
F F language, the appellant lit his cigarette and threw the lighted
match stick on the deceased. As a result thereof, the deceased
was in flames and the appellant left the place by further abusing
her and telling that she should die.
G G 3. At the time when the deceased was in flames, her
husband, Nagabhushanam arrived and upon seeing his wife in
flames, he immediately took her to the Government Civil
Hospital, Nizamabad. Upon police being informed, R.
Gangaram, Assistant Sub Inspector (P.W.11) rushed to the
H H
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 679
[ANIL R. DAVE, J.]
hospital and recorded the statement of the deceased. FIR
No.46 of 1999 was filed on the basis of the statement made
by the deceased against the appellant for commission of an
offence under Section 307 of IPC. Looking to the nature of burn
injuries suffered by the deceased, her dying declaration was
recorded by Mr. Narsimha Chary, First Class Judicial
Magistrate (Special Mobile Court), Nizamabad (P.W.10)
around 8 p.m. The deceased specifically stated in the said
statement that she was being abused by the appellant and on
that day also, as usual, when she was being abused, she
poured kerosene on herself and thereafter the appellant had
thrown a lighted match stick on her, because of which she was
in flames and she was severely burnt and her husband
Nagabhushanam had brought her to the hospital.
4. Because of the burn injuries, the deceased suffered
from septicemia and as a result thereof she died on 1st August,
1999. The said fact was brought to the notice of the authorities
by the husband of the deceased. The said information was
recorded as FIR No.152 of 1999 on 2nd August, 1999. As a
result of the death of the deceased, the appellant was also
charged under Section 302 of the IPC. At the time of the trial,
most of the witnesses, who are family members of the
deceased as well as the appellant, turned hostile. However, on
the basis of the dying declaration (Ext.P.12) recorded on 21st
April, 1999, which supported the contents of the FIR filed by
the complainant, the trial court convicted the appellant for the
offence punishable under Section 304 Part II of the IPC and
sentenced the appellant to undergo simple imprisonment for five
years.
5. Being aggrieved by the order of conviction, the appellant
filed Criminal Appeal No.579 of 2004, before the High Court
of Andhra Pradesh. After hearing the concerned counsel and
upon perusal of the record, the High Court confirmed the order
of conviction passed by the trial court by the impugned order
680 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A and the said order of the High Court has been challenged in
this appeal.
6. Mr. A.D.N. Rao, learned counsel appearing for the
appellant mainly submitted that the trial court had substantially
erred in convicting the appellant only on the basis of the dying
B B
declaration. He submitted that except the dying declaration,
there was no other evidence, and to convict a person solely on
the basis of a dying declaration would be neither just nor legal.
7. He also submitted that the case of the prosecution was
C C based on the second FIR bearing No.152/99, which was filed
on 2nd August, 1999, upon the death of the deceased on 1st
August,1999. He submitted that there could not have been a
second FIR. According to him, investigation was made under
the first FIR and ultimately the order of conviction was passed
D D in pursuance of the second FIR, which is bad in law. He
submitted that if filing of the second FIR is permitted, the
sanctity of the first FIR would be lost and, therefore, the second
FIR ought not to have been filed and as the order of conviction
was passed in pursuance of the second FIR, the order of
E E conviction is bad and it deserves to be quashed and set aside.
8. The learned counsel appearing for the appellant relied
upon the Judgment delivered in T.T. Antony etc. v. State of
Kerala and others, 2001(6) SCC 181, to substantiate his case
to the effect that there can not be a second FIR.
F F
9. On the other hand, the learned counsel appearing for
the prosecution submitted that the order of conviction is just and
proper and she drew our attention to the fact that the dying
declaration was supporting the complaint, which had been filed
G G on the same day, and there was nothing to doubt the dying
declaration. According to her, the courts below had rightly relied
upon the said dying declaration for convicting the appellant. She
also submitted that all the witnesses were family members and,
therefore, they did not support the prosecution case when they
H H were examined. She also submitted that merely because family
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 681
[ANIL R. DAVE, J.]
members who were interested in supporting the appellant and
had turned hostile, would not make the case of the prosecution
weak, especially when no infirmity could be found by the courts
below in the dying declaration, which clearly indicated that the
appellant had committed the offence.
10. We have heard the learned counsel and perused the
relevant record.
11. In our opinion, the order passed by the High Court
confirming the order of conviction passed by the trial court
cannot be said to be bad in law. In our opinion, the trial court
had duly considered the fact that the dying declaration was
trustworthy and reliable and it was supported by the complaint
and as a result thereof, the order of conviction was also
confirmed by the High Court in the appeal.
12. If dying declaration is trustworthy and if it can be shown
that the person making the statement was not influenced by any
exterior factor and made the statement which was duly recorded,
it can be made basis for conviction. In the instant case,
immediately after the incident, the deceased was taken to the
Government Hospital, Nizamabad and upon getting information
with regard to the offence, the ASI had rushed to the
Government Hospital, Nizamabad and the deceased had made
her statement before him and thereafter she had made her
dying declaration before a judicial officer around 8 p.m. The
said statement was scrupulously recorded by the Judicial
Officer who had found the deceased to be conscious and fit to
make statement. Very recently, this Court had examined
whether a dying declaration can be the sole basis for conviction.
After examining several judgments on the subject, this Court had
observed in Puran Chand v. State of Haryana, 2010 (6) SCC
566, as under:
15. The courts below have to be extremely careful when
they deal with a dying declaration as the maker thereof is
not available for the cross-examination which poses a great
682 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A difficulty to the accused person. A mechanical approach
in relying upon a dying declaration just because it is there
is extremely dangerous. The court has to examine a dying
declaration scrupulously with a microscopic eye to find out
whether the dying declaration is voluntary, truthful, made
B B in a conscious state of mind and without being influenced
by the relatives present or by the investigating agency who
may be interested in the success of investigation or which
may be negligent while recording the dying
declaration
C C
18. The law is now well settled that a dying declaration
which has been found to be voluntary and truthful and which
is free from any doubt can be the sole basis for convicting
the accused. .
D D 13. Looking to the law laid down by this Court as stated
hereinabove and on perusal of the record we find that in the
instant case there was no doubt with regard to the truthfulness
of the dying declaration and, therefore, in our opinion, it cannot
be said that on the sole basis of dying declaration the order of
E E conviction could not have been passed.
14. So far as the submission with regard to the filing of
second FIR is concerned, in our opinion, the said submission
cannot be accepted. First Information Report is a report which
gives first information with regard to any offence. There cannot
F F be second FIR in respect of the same offence/event because
whenever any further information is received by the
investigating agency, it is always in furtherance of the First
Information Report. Learned counsel appearing for the accused
relied upon the judgment delivered in the case of T.T. Antony
G G (supra). This Court had examined the said Judgment in the case
of Babubhai v. State of Gujarat & Others on 26th August,
2010, in Criminal Appeal No.1599 of 2010 (arising out of
SLP(Crl.) No.2077 of 2010. In the said Judgment, after
considering T.T. Antonys (supra) Judgment, this Court
H H observed in para 13 as under:
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 683
[ANIL R. DAVE, J.]
13. .the investigating agency has to proceed only on
the information about commission of a cognizable offence
which is first entered in the Police Station diary by the
Officer In-charge under Section 158 of the Code of
Criminal Procedure, 1973, (hereinafter called the Cr.P.C.)
and all other subsequent information would be covered by
Section 162 of the Cr.P.C. for the reason that it is the duty
of the Investigating Officer not merely to investigate the
cognizable offence reported in the FIR but also other
connected offences found to have been committed in the
course of the same transaction or the same occurrence
and the Investigating Officer has to file one or more reports
under Section 173 of the Cr.P.C. Even after submission
of the report under Section 173(2) of the Cr.P.C., if the
Investigating Officer comes across any further information
pertaining to the same incident, he can make further
investigation, .
15. In the case in hand, the first FIR, i.e. FIR No.46/99 was
recorded on 21st April, 1999, the date on which the offence had
taken place. On that day, R. Gangaram, Assistant Sub Inspector
(P.W.11) had recorded the statement made by the deceased,
when she was admitted to the Government Civil Hospital,
Nizamabad and on the basis of the said statement the aforesaid
FIR was recorded. At the relevant time, the deceased had
received serious burn injuries and, therefore, offence under the
provisions of Section 307 of the IPC had been registered.
Subsequently, the deceased suffered from septicemia, which
was caused due to the burn injuries and as a result thereof she
expired on 1st August, 1999. The said fact was reported by the
husband of the deceased to the police authorities and
thereupon the said fact was recorded as FIR No.152/99 on 2nd
August, 1999. Thus, by virtue of the second FIR, further
development which had taken place had been recorded. The
said development was with regard to the death of the deceased
and, therefore, an offence under the provisions of Section 302
of the IPC had been registered.
684 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 16. If one looks at the facts of the case and both
information given to the authorities, it is clear that in fact FIR
No.46/99 was recorded on the basis of the statement made
by the deceased when the deceased was alive and upon her
death, which had nexus with the injuries, further information was
B B given on 2nd August, 1999, and that was recorded as FIR
No.152/99. In our opinion, it was not necessary to record
another FIR as the death was result of septicemia which was
due to the burn injuries.
17. Looking to the facts of the present case, in our opinion,
C C in fact the second FIR was nothing but a consequence of the
event which had taken place on 21st April, 1999. In the
circumstances, the contents of the so called second FIR being
FIR No.152/99, could have been incorporated in the police diary
as a result of further information or event which had been taken
D D place in pursuance of the first offence, which had been recorded
under FIR No.46/99.
18. It is true that the second FIR being FIR no.152/99, had
been lodged on 2nd August, 1999, when the report with regard
E E to the death of the deceased was reported. As a mater of fact,
in our opinion, it was not necessary to note the same as a new
FIR but simply because the S.H.O made a mistake by
recording it as a fresh FIR, it would not make the case of the
prosecution weak especially when no prejudice had been
F F caused to the appellant or any other person because of the
aforestated further information with regard to the death being
recorded as a new FIR. The submission made by the learned
counsel appearing for the appellant was to the effect that by
adopting such a method, the prosecution can involve someone
wrongly in the offence and, therefore, such a course should not
G G
have been adopted and as it was adopted by the prosecution,
the appellant must get benefit of such a mistake by getting an
order of acquittal. We do not agree with the aforestated
submission for the reason that there is no allegation to the effect
that the contents of second FIR are incorrect or malicious or
H H
CHIRRA SHIVRAJ v. STATE OF ANDHRA PRADESH 685
[ANIL R. DAVE, J.]
there was any oblique motive behind giving further information.
The information which was given to the Authorities was only with
regard to the death of the deceased which resulted due to
septicemia and septicemia was only on account of the burn
injuries suffered by the deceased. Be that as it may, it is a fact
that there was no fresh investigation in pursuance of the second
FIR and, therefore, even the judgment delivered in the case of
T.T. Antony (supra) would render no help to the accused.
19. Even the learned counsel for the appellant could not
show that the information with regard to the death of the
deceased, which was recorded as second FIR no.152/99 C
caused any prejudice to the accused. In the aforestated
circumstances, we do not agree with the submission made by
the learned counsel for the appellant that merely because
second FIR was filed, the entire investigation was defective and
that should result into acquittal of the accused.
20. We do not find any substance in the submissions made
on behalf of the appellant and, therefore, the appeal is
dismissed.
B.B.B. Appeal dismissed.
[2010] 15 (ADDL.) S.C.R. 686
A A R. JAYARAMA AND ORS.
v.
STATE OF KERALA AND ORS.
(Civil Appeal Nos.10098-10102 of 2010)
NOVEMBER 29, 2010
B B
[P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.]
Service Law Selection By Public Service Commission
Determination of seniority Appellants were selected
C against earlier vacancies but not appointed along with others
of the same batch They were appointed subsequently
Claim of the appellants that were entitled to be placed above
those who were appointed against the subsequent vacancies
Seniority claimed by appellants from date of advice by
D D Public Service Commission for their appointment High
Court held the seniority of the appellants from date of
Government order dated 17-06-1999 Held: The claim of the
appellants is not tenable Selection by the Public Service
Commission is merely recommendatory and does not imply
E automatic appointment The appointing authorities should
not give notional seniority without valid reason, from a
retrospective date, which would affect the seniority of those
who have already entered into service Seniority has to be
reckoned on the basis of actual availability of post To avert
the discharge of the appellants, the Government brought an
F
order safeguarding their interest and the same was upheld by
the High Court by retaining the services of the appellant w.e.f.
17-06-1999 Inasmuch as exemption and relaxation was
ordered by the Government without giving any opportunity to
anyone, particularly, the promotees, at best, the Government
G order operates prospectively If applied retrospectively it
would adversely affect the seniority of persons who were
already promoted Kerala State and Subordinate Services
Rules, 1958 Rule 39.
H 686
 R. JAYARAMA AND ORS. v. STATE OF KERALA 687
AND ORS.
Interim order Dismissal of main petition Effect on
interim order passed therein Held: After dismissal of the
main petition, interim order also got vacated.
As per G.O.(MS) No. 171/74/Home dated 18.11.1974,
50% of the posts of Sub Inspectors in the District Armed
Reserve (Reserve Sub Inspectors) were to be filled up by
direct recruitment. The Kerala State Public Service
Commission invited applications for direct recruitment of
Reserve Sub Inspectors. The appellants applied for the
said post. After the written test, physical test and
interview, a rank list was prepared in which the appellants
were also included.
Candidates in the rank list filed O.P. before the High
Court and the High Court by an interim order directed the
Director General of Police to report vacancies to the PSC
and thereafter issued another interim order to the PSC to
advise candidates for such vacancies. The High Court
ultimately dismissed the petitions. In view of the same, the
Secretary, Kerala Public Service Commission informed
the Government for discharging the candidates advised.
The Government, vide G.O.(Rt) No. 3241/99/Home dated
17.06.1999, issued orders to retain them in service by
invoking Rule 39 of the Kerala State and Subordinate
Services Rules, 1958. Accordingly, they were assigned
seniority as Reserve Sub Inspectors with effect from their
date of advise and included their names in the finalized
seniority list of Reserve Sub Inspectors. However, some
of the promotees filed O.P. before the High Court with a
prayer to revise the seniority assigned to the directly
recruited Assistant Sub Inspector promoted as Reserve
Sub Inspector before completing five years of service.
Another O.P. was filed against the seniority given to
directly recruited Reserve Sub Inspectors alleging that
they were appointed in excess of the 50 % quota for
direct recruits.
688 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A The High Court found that only 7 candidates against
the candidates advised and appointed as per the interim
orders were to be placed in the 50% quota for direct
recruits and the remaining persons were eligible for
seniority with effect from 17.06.1999, i.e., the date of the
B B Government order.
In the instant appeals, it was contended by the
appellant that the relevant date to retain them in service
was on the date of advise i.e. 04.01.1993 and not the date
of the Government Order, i.e. 17.06.1999. It was
C C contended that the appellants, who were selected against
earlier vacancies but could not be appointed along with
others of the same batch due to certain technical
difficulties, when appointed subsequently, were entitled
to be placed above those who were appointed against the
D D subsequent vacancies.
Dismissing the appeals, the Court
HELD:1.1. The claim that the appellants, who were
selected against earlier vacancies but could not be
E E
appointed along with others of the same batch due to
certain technical difficulties, when appointed
subsequently, will have to be placed above those who
were appointed against the subsequent vacancies, is
liable to be rejected since it is settled law that selection
F F by the PSC is merely recommendatory and does not
imply automatic appointment and that the appointing
authorities should not give notional seniority without
valid reason, from a retrospective date, which would
affect the seniority of those who have already entered into
G G service. [Para 9] [701-A-C]
1.2. In the instant case, the advise was made on
04.01.1993 by the Government to the PSC on the basis
of interim order passed by the High Court. Based on the
H H
 R. JAYARAMA AND ORS. v. STATE OF KERALA 689
AND ORS.
said interim direction, the claim of the appellants was duly
considered. Ultimately their writ petitions came to be
dismissed. In such circumstances, after dismissal of the
main petition, interim order also gets vacated and the
appellants cannot claim any benefit based on the interim
order dated 04.01.1993. Based on the interim order, 7
vacancies alone could have been reported and those
candidates alone would have been advised and
appointed going by the quota rule worked out as on the
date of direct recruitment. [Paras 11,12] [701-G-H; 702-A-
F]
1.3. According to the appellants, the rank list was
alive when they were advised by the PSC and, therefore,
the advice and appointment were validly made and the
appellants were entitled to have their advice and
appointment treated as regular. Based on their advice
and appointment, the appellants claimed that they were
entitled to have the seniority and all consequential
benefits from the date of their advise i.e. on 04.01.1993
and not from the date of the Government Order i.e.
17.06.1999 as held by the High Court. The above claim
of the appellants cannot be sustained since the direct
recruits did not have any right whatever to the seniority
in respect of 40 posts. Only 27 vacancies were initially
reported. If 27 posts are reckoned, direct recruitment
should have been confined to 50% of the notified
vacancies. The specific documentary evidence which is
a letter dated 22.08.1984 of the Home Department clearly
shows the number of posts mentioned is 187. The 50%
quota in favour of the direct recruits will come to 93. From
the records, it is seen that the factual position was that
119 promotees were functioning as Sub Inspectors. The
number of direct recruits comes to 41. The special
recruitment for Scheduled Castes and Scheduled Tribes
took in 11 posts. The quota has to be worked after
deducting the aforementioned 11 posts. As per the High
690 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Court, though the appellants had claimed that all the
posts should be reckoned for working of the ratio, if 11
posts earmarked for special recruits is deducted, the
balance will work out to 176. Consequently, 50% posts
due for direct recruits will come to 176 X i.e. 88. There
B B were already 41 direct recruits occupying the post.
Consequently, the further posts available for direct
recruits were 47 posts i.e. 88-41=47. On the basis of this
simple arithmetic work out the ratio and number of
vacancies reckoned on the basis of official
C C communication of the Home Department, the High Court
found that only 40 persons from the rank list prepared by
the PSC could be accommodated in the available quota.
7 posts lay outside their allotment entitlements. The
seniority had to be reckoned on the basis of such actual
availability of post. In fact, to avert the discharge of the
D D
appellants, the Government brought an order
safeguarding their interest and the same was upheld by
the High Court by retaining the services of the appellant
w.e.f. 17.06.1999. [Para 13] [702-G-H; 703-A-G]
E E 1.4. In view of the above factual position and in terms
of the rules, as rightly observed by the High Court, the
first 7 candidates advised after the interim order dated
30.05.1991 alone were thus legally eligible for the
vacancies against the 50% quota of direct recruitment.
F F Others, in excess of that 7, are not so eligible as per law.
If the appellants are accommodated, necessarily, it will
adversely affect the rights of the promotees to occupy
their eligible quota as per the method of appointment.
[Para 14] [704-A-B]
G G
1.5. Inasmuch as exemption and relaxation was
ordered by the Government without giving any
opportunity to anyone, particularly, the promotees, at
best, the Government order operates prospectively and
if it is to be applied retrospectively it would adversely
H H
 R. JAYARAMA AND ORS. v. STATE OF KERALA 691 692 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
AND ORS.
affect the seniority of persons who were already A A (P) & 31240 of 2001 (R) dated 29.08.2006 and in R.P. No.
promoted before the date of issue. Under the 1165, 1164 & 1163 of 2006 dated 07.02.2007 of the High
circumstances, this Court is satisfied that the High Court Court of Karala at Ernakulam.
had considered all aspects in accordance with the Rules
applicable and consequently the claim of the appellants R. Venkataramani, C.S. Rajan, Jaideep Gupta, M. Girish
is to be rejected. [Paras 15, 16] [704-C-E] Kumar, Aljo K. Joseph, Vijay Kumar, A. Raghunath, G. Prakash,
B B Beena Prakash, V. Senthil, Radha Shyam Jena, B.V. Deepak,
Surinder Singh & Ors. v. State of Punjab & Anr. (1997) Dilip Pillai, T.T.K. Deepak & Co. for the appearing parties.
8 SCC 488; Rakhi Ray & Ors. v. High Court of Delhi & Ors.
(2010) 2 SCC 637; Employees State Insurance Corpn. v. All The Judgment of the Court was delivered by
India ITDC Employees Union & Ors. (2006) 4 SCC 257;
C C P. SATHASIVAM, J. 1. Leave granted.
Amarjeet Singh and Others v. Devi Ratan and Others (2010)
1 SCC 417; K. Thulaseedharan v. Kerala State Public 2. These appeals are directed against the common final
Service Commission, Trivandrum & Ors. (2007) 6 SCC 190 judgment and orders passed by the High Court of Kerala at
relied on. Ernakulam in O.P. No. 5818 of 2002 and O.P. No. 31240 of
2001 dated 29.08.2006 and in R.P. Nos. 1163, 1164 and 1165
Government of Andhra Pradesh & Ors. v. Sri D. D D of 2006 dated 07.02.2007 whereby the High Court dismissed
Janardhana Rao & Anr. (1976) 4 SCC 226; Balwant Singh
all the petitions filed by the appellants herein.
Narwal & Ors. v. State of Haryana & Ors. (2008) 7 SCC 728
referred to. 3. Brief facts:
Case Law Reference: (a) By Government Order dated 18.11.1974, the
E E
(1976) 4 SCC 226 referred to Para 9 Government of Kerala prescribed that 50% of the posts of Sub
Inspectors in the District Armed Reserve will be filled up by
(2008) 7 SCC 728 referred to Para 9 direct recruitment as in the case of Sub Inspectors of the Local
Police. The appellants are the Sub Inspectors of Police in the
(1997) 8 SCC 488 relied on Para 10
District Armed Reserve. A notification for appointment to the
F F post of Sub Inspectors of Police by direct recruitment in the
(2010) 2 SCC 637 relied on Para 10
District Armed Reserve was issued by the Public Service
(2006) 4 SCC 257 relied on Para 11 Commission (hereinafter referred to as PSC) in the Gazette
(2010) 1 SCC 417 relied on Para 11 dated 24.09.1985.

(2007) 6 SCC 190 relied on Para 11 G G (b) Pursuant to the said notification, the appellants herein
applied for the said post. After the written test, physical test and
CIVIL APPELLATE JURISDICTION : Civil Appeal No. interview, a rank list was prepared for direct recruitment to the
10098-10102 of 2010. post of Sub Inspector of Police in the District Armed Reserve
on 05.06.1990. The appellants were also included in the rank
From the Judgment & Orders in O.P. Nos. 5818 of 2002
H H list. At the time, when the said rank list came into force, except
 R. JAYARAMA AND ORS. v. STATE OF KERALA 693
AND ORS. [P. SATHASIVAM, J.]
special recruits, no one was appointed by direct recruitment for
the post of Sub Inspector in the District Armed Reserve as
prescribed in the notification dated 24.09.1985 issued by the
PSC.
(c) On 05.06.1990, there were 207 posts of Sub Inspectors
in the District Armed Reserve. Out of the said posts, 11 posts
were occupied by persons appointed under Rule 17A of the
Kerala State and Subordinate Services Rules, 1958
(hereinafter referred to as KS & SSR) from among the
Scheduled Castes and Scheduled Tribes. The remaining 196
posts were occupied by the promotees from the feeder
category. The promotees occupied the posts in excess of the
ratio purely on a provisional basis. On 09.08.1990, after the
rank list came into force, only 40 persons from that list were
advised for appointment since only 40 vacancies were reported
to the PSC at that time.
(d) Since the rank holders were not advised by the PSC,
the candidates including the appellants filed O.P. No. 2062 of
1991 and similar other petitions before the High Court for
directing the authority to report the vacancies and also to direct
the PSC to advice for the vacancies available in the direct
recruitment quota. On 30.05.1991, the High Court passed an
interim order in CMP No. 3685 of 1991 in O.P. No. 2062 of
1991 directing the first respondent therein to report all the
vacancies available to the PSC before 03.06.1991. In the
counter affidavit dated 25.09.1990, filed in O.P. No. 8188 of
1990, the Government had stated that there were 207 posts
and only 11 posts were occupied by directly recruited Sub
Inspectors in the District Armed Reserve.
(e) On the basis of the interim order, instead of reporting
58 vacancies only 20 vacancies were reported to the PSC and
they were advised on 26.02.1992. There were 207 sanctioned
posts of reserved Sub Inspectors in the District Armed Reserve
and 50% has to be given to direct recruits and only after giving
appointment to them, promotees could put forward any claim
694 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A which was made clear by the Director General of Police, Police
Headquarters, Thiruvananthapuram to the Deputy Inspector
General, Northern Range, Calicut, by communication dated
14.01.1992.
B (f) Since on the basis of the interim order dated
B
30.05.1991, passed by the High Court in C.M.P. No. 3685 of
1991 in O.P. No. 2062 of 1991, the vacancies legitimately
available to direct recruits were not reported to the PSC,
another petition being C.M.P. No. 11446 of 1992 was filed for
reporting more vacancies for appointment by direct recruitment
C C
from the rank list. In the said petition, on 29.06.1992, the High
Court issued an order to report 28 vacancies to the PSC for
being advised. Thereafter, the High Court issued an order on
27.11.1992 in the same petition to advise 28 persons including
the appellants from rank list to 28 vacancies reported to the
D D PSC. In that petition, it was made clear that the advise given
on the basis of the order, will be provisional and the candidates
advised would be entitled to get regular appointment only if it
was ultimately found that the vacancies for which advise was
made arose during the currency of the rank list.
E E
(g) Though 40 persons were advised on 09.08.1990, 6
persons did not join duty. For the 6 non-joining duty vacancies,
candidates were advised on 05.03.1991. Thereafter, for 20
vacancies reported on the basis of the interim order, 20
F F candidates from the rank list were advised on 04.01.1993.
Among the 28 candidates advised on the basis of the order
issued by the High Court, one non-joining duty vacancy arose.
For that vacancy, one more candidate was advised from the
rank list on 03.03.1993. Under the first proviso to Rule 13 of
G the PSC Rules of Procedure, the validity of the rank list was till
G
15.04.1993. Since under the said proviso, in cases, where
candidates were included in the rank list was for admission to
Training Course that leads to automatic appointment, the
validity of the rank list shall be one year from the date of
finalization of the rank list or after one month from the date of
H H
 R. JAYARAMA AND ORS. v. STATE OF KERALA 695
AND ORS. [P. SATHASIVAM, J.]
commencement of the course in respect of the last batch A
selected from the list within a period of one year from the date
of finalization of the rank list, whichever is later. The appellants
were advised for vacancies available for direct recruits even
at the time when the rank list came into force on 05.06.1990. It
is the claim of the appellants that on the basis of Ex. P-9, interim B
order passed by the High Court, the advice given to them has
to be treated as regular. However, O.P. No. 2062 of 1991 and
other connected petitions were dismissed by the High Court by
judgment dated 20.07.1995 relying on the judgment in O.P. No.
5676 of 1988.
(h) After the advise of the appellants, by order dated
26.12.1995, a provisional seniority list of reserved Sub
Inspectors, as on 01.01.1991, was published by the Inspector
General of Police (Admn.) in the District Armed Reserve. Since
the case of 28 persons including the appellants who were D
advised on 04.01.1993 were not dealt with in a just and
equitable manner, the Government having realized that 28
vacancies for which direct recruitment should have been made
existed during the currency of rank list, issued Government
Order dated 17.06.1999 invoking the power under Rule 39 of E
the KS & SSR for continuing 28 persons in service based on
the advise given by the PSC.
(i) In the seniority list, the names of only 111 persons were
included whereas, at that time, there were 207 vacancies of F
Sub Inspectors in the District Armed Reserve filled up on
provisional basis and by direct recruitment. While in the
seniority list, only 34 persons, who were directly recruited were
included, all the provisional promotees were not included in the
seniority list. It is because of this reason, the list contained only
111 persons instead of 207 persons.
(j) On 01.08.2001, a final seniority list of reserved Sub
Inspectors as on 01.01.1996 was prepared and published by
the Director General of Police, Police Headquarters,
Thiruvananthapuram in the District Armed Reserve. It is the
696 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A claim of the appellants that in the order dated 01.08.2001, if
the facts stated in the communication of Director General of
Police was correctly followed, direct recruits should have been
placed above the promotees. Hence, all the direct recruits
including the 6 persons advised in the non-joining duty
B vacancies on 05.03.1991, 20 persons advised on 26.02.1992
and 28 persons advised on 04.01.1993 should have been
shown consecutively from S.No.1 onwards in the seniority list.
It is highlighted that when that is done, necessarily the
appellants will be placed above all the provisional promotees
C C shown in the seniority list.
(k) Some of the promotees filed O.P. No. 31240 of 2001
before the High Court on 15.10.2001 challenging the seniority
list and sought for a direction to exclude 29 persons including
the appellants who got retention through the order dated
D 17.06.1999 from the seniority list and promote them from
reserve Sub Inspectors to reserve Inspectors. One of the
appellants, namely, Mr. A.A. Jolly, who was not a party in O.P.
Nos. 4352, 9024 and 2062 of 1991 which were disposed of
by the High Court by its judgment dated 20.07.1995 filed Writ
E Appeal Nos. 2191, 2189 and 2190 of 2002 before the High
Court seeking a declaration that he was validly advised and
appointed as Sub Inspector in the District Armed Reserve for
direct recruitment from the rank list which came into force on
05.06.1990 and based on that list he is entitled to get all
F consequential benefits.
(l) The third respondent herein, namely, Mr. P.B. Suresh
Kumar, was appointed as Assistant Sub Inspector by direct
recruitment in 1989. He continued as Assistant Sub Inspector
till 1995 and was promoted as Sub Inspector of Police only in
G G
1995. While the appellants were working as Sub Inspectors,
he was working under them as Assistant Sub Inspector but he
was placed above the appellants and shown at S.No. 17 in the
seniority list. At the same time, the appellants are shown at
S.Nos. 45, 47, 49, 51, 59, 61 and 67 respectively. The 3rd
H H
 R. JAYARAMA AND ORS. v. STATE OF KERALA 697
AND ORS. [P. SATHASIVAM, J.]
respondent, who is to be placed below the appellants and who A
was, in fact, promoted as Sub Inspector long after the advise
of the appellants as Sub Inspectors is placed above them
violating the 50:50 ratio for direct recruitment and promotion.
Similarly, a number of promotees were also placed above the
appellants violating the service rules. Therefore, the appellants B
filed O.P. No. 5818 of 2002 seeking a writ of mandamus
directing respondent Nos. 1 & 2, namely, the State of Kerala
and Director General of Police, Police Headquarters, to give
seniority to direct recruits including themselves based on the
advise and appointment made from Ex. P-2, rank list dated C
05.06.1990, by pushing down the promotees including
respondent No.3 herein below the appellants working out the
ratio prescribed in the Government Order dated 18.11.1974.
The appellants also sought a writ of mandamus declaring that
they were entitled to be assigned in the seniority list of Sub D
Inspectors strictly working out the ratio of 50:50 for direct
recruits and promotees as prescribed in the said Government
Order.
(m) By a common order dated 29.08.2006, the High Court
disposed of Writ Appeal Nos. 2189, 2190 and 2191 of 2002 E
and O.P. Nos. 3596 of 1999, 31240 of 2001 and 5818 of 2002.
However, the High Court dismissed all the writ appeals and O.P.
No.3596 of 1999 and allowed O.P. No. 5818 of 2002 to the
extent holding that the seniority of respondent No.3 above the
appellants is illegal and partly allowed O.P. No. 31240 of 2001 F
holding that the order dated 17.06.1999 retaining the persons
including the appellants in service cannot operate
retrospectively to adversely affect the seniority of persons, who
were already promoted before the date of its issue. The High
Court further held that it can at best take effect only from the G
date of its issue to save their appointments and, consequently,
such persons except the 7 persons advised earlier can take
seniority only from the date of the order i.e. 17.06.1999.
(n) Against the dismissal of the writ appeals, Mr. A.A. Jolly
H H
698 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A filed Review Petition Nos.1163, 1164 and 1165 of 2006 before
the High Court. By a common order dated 07.02.2007, the High
Court dismissed all the review petitions holding that even if there
is a wrong finding, the remedy open to the petitioner is to file
an appeal.
B
(o) In those circumstances, the above appeals by way of
special leave petitions have been preferred by the appellants
herein.
4. Heard Mr. R. Venkataramani, learned senior counsel for
C the appellants, Mr. C.S. Rajan, learned senior counsel for the
promotees and Mr. Jaideep Gupta, learned senior counsel for
the State of Kerala.
5. Questions for consideration:
D
The questions which arise for consideration in these
appeals are:
(i) Whether the High Court committed an error in holding
that the seniority of the appellants will take effect from the date
E of the Government Order i.e. 17.06.1999 and in not calculating
the seniority of the appellants from the date of their advise by
the PSC?
(ii) Whether the High Court was justified in upsetting the
seniority of the appellants by partly allowing O.P. No. 31240 of
F
2001 without considering the facts and circumstances of the
case in a perspective manner?
6. It is not in dispute that all the appellants were appointed
as Reserve Sub Inspectors in the District Armed Reserve of
G the Kerala Police as per the advise of the Kerala State Public
Service Commission and commenced their training on
15.03.1993. They are now working as Reserve Inspectors in
the District Armed Reserve. As per G.O.(MS) No. 171/74/Home
dated 18.11.1974, 50% of the posts of Sub Inspectors in the
District Armed Reserve (Reserve Sub Inspectors) will have to
 R. JAYARAMA AND ORS. v. STATE OF KERALA 699
AND ORS. [P. SATHASIVAM, J.]
be filled up by direct recruitment. The Kerala State Public
Service Commission invited applications for the direct
recruitment of Reserve Sub Inspectors vide Notification dated
24.09.1985 and the rank list came into force with effect from
05.06.1990. The particulars furnished show that from the list 40
candidates were advised on 09.08.1990 and out of which 6
candidates did not join and hence 6 other candidates were
advised on 05.03.1991. Subsequently, 20 candidates were
advised on 26.02.1992. In the meantime, 11 candidates in the
rank list filed O.P. No. 2062 of 1991 before the High Court and
the High Court by order dated 29.06.1992 directed the Director
General of Police to report 28 vacancies to the PSC and
issued another interim order on 27.11.1992 to the PSC to
advise candidates for the 28 vacancies. Accordingly, the Kerala
State Public Service Commission advised 28 candidates on
04.01.1993 and one candidate on 03.03.1993 against one
among the 28 who did not join. Training of the candidates
advised on 26.02.1992, 04.01.1993 and 03.03.1993
commenced on 15.03.1993 and completed on 15.12.1993.
7. It is also not in dispute that the High Court ultimately
dismissed O.P. No. 2062 of 1991 and other related petitions
on 20.07.1995. In view of the same, the Secretary, Kerala
Public Service Commission by a letter dated 09.11.1995,
informed the Government for discharging the candidates
advised on 04.01.1993 and 03.03.1993. The Government, vide
G.O.(Rt) No. 3241/99/Home dated 17.06.1999, issued orders
to retain them in service by invoking Rule 39 of the KS & SSR,
1958. Accordingly, they were assigned seniority as Reserve
Sub Inspectors with effect from their date of advise and
included their names in the finalized seniority list of Reserve
Sub Inspectors as on 01.01.1996. However, some of the
promotees filed O.P. No. 5818 of 2002 before the High Court
with a prayer to revise the seniority assigned to the directly
recruited Assistant Sub Inspector promoted as Reserve Sub
Inspector before completing five years of service. O.P. No.
31240 of 2001 was filed against the seniority given to directly
700 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A recruited Reserve Sub Inspectors alleging that they were
appointed in excess of the 50 % quota for direct recruits. It is
further seen that in the common judgment dated 29.08.2006,
the High Court found that only 7 candidates against the
candidates advised and appointed as per the interim orders
B B dated 29.06.1992 and 27.11.1992 (candidates advised on
04.01.1993 and 03.03.1993) are to be placed in the 50% quota
for direct recruits and the remaining persons are eligible for
seniority with effect from 17.06.1999, i.e., the date of the
Government order.
C C
8. Mr. R. Venkataramani, learned senior counsel for the
appellants, by drawing our attention to the decision of this Court
in Government of Andhra Pradesh & Ors. vs. Sri D.
Janardhana Rao & Anr., (1976) 4 SCC 226, submitted that
having exercised the power under Rule 39 of KS & SSR, in the
D D interest of justice and equity, the relevant date for the appellants
to retain them in service is as on the date of advise i.e.
04.01.1993 and not the date of the Government Order, i.e.
17.06.1999. No doubt, in that decision, it was held that the
power under Rule 47 of the A.P. State and Subordinate
E E Services Rules (which is similar to Rule 39 of the KS & SS
Rules) is to be exercised in the interest of justice and equity
and it was further held that the occasion for acting under Rule
47 may well arise after the attention of the Government is drawn
to a case where there is a failure of justice. It is further held that
F F in such cases, justice can be done only by exercising the power
under rule 47 with retrospective effect, otherwise the object and
purpose of the rule will be largely frustrated. Considering the
admitted factual position, the appellants were appointed on
04.01.1993 based on the interim order passed by the High
G G Court and ultimately their petitions came to be dismissed and
in view of the peculiar position and by showing sympathetic
attitude, the Government exercising power under Rule 39,
passed a Government Order dated 17.06.1999, to retain them
in the service. Hence, the decision relied on by Mr. R.
H H Venkataramani is not helpful to the cases on hand.
 R. JAYARAMA AND ORS. v. STATE OF KERALA 701
AND ORS. [P. SATHASIVAM, J.]
9. By basing reliance on the judgment of this Court in
Balwant Singh Narwal & Ors. vs. State of Haryana & Ors.,
(2008) 7 SCC 728, Mr. Venkataramani submitted that the
appellants, who were selected against earlier vacancies but
could not be appointed along with others of the same batch due
to certain technical difficulties, when appointed subsequently,
will have to be placed above those who were appointed against
the subsequent vacancies. The said claim is also liable to be
rejected since it is settled law that selection by the PSC is
merely recommendatory and does not imply automatic
appointment and that the appointing authorities should not give
notional seniority without valid reason, from a retrospective
date, which would affect the seniority of those who have already
entered into service.
10. In Surinder Singh & Ors. vs. State of Punjab & Anr.,
(1997) 8 SCC 488, this Court, in categorical terms, held that it
is improper exercise of power to make appointments over and
above those advertised. The Court further held that it is only in
rare and exceptional circumstances and in emergent situations
that this rule can be deviated from. It was further held that before
any advertisement is issued, it would be incumbent upon the
authorities to take into account the existing vacancies and
anticipated vacancies. It was clarified that it is not as a matter
of course that the authority can fill up more posts than
advertised even if the vacancies had not been worked out
properly. The same view has been reiterated by a Bench of
three Judges in a subsequent decision in Rakhi Ray & Ors.
vs. High Court of Delhi & Ors., (2010) 2 SCC 637.
11. As mentioned earlier, it is not in dispute that the advise
was made on 04.01.1993 by the Government to the PSC on
the basis of interim order passed by the High Court. Based on
the said interim direction, the claim of the appellants was duly
considered. Further, it is not in dispute that ultimately their writ
petitions came to be dismissed on 20.07.1995. In such
circumstances, as rightly pointed out by Mr. C.S. Rajan, learned
702 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A senior counsel for the promotees that after dismissal of the
main petition, interim order also gets vacated and the appellants
cannot claim any benefit based on the interim order dated
04.01.1993. In this regard, it is useful to refer the judgments of
this Court in (i) Employees State Insurance Corpn. vs. All India
B B ITDC Employees Union & Ors., (2006) 4 SCC 257 (ii)
Amarjeet Singh and Others vs. Devi Ratan and Others, (2010)
1 SCC 417 and (iii) K. Thulaseedharan vs. Kerala State Public
Service Commission, Trivandrum & Ors., (2007) 6 SCC 190.
In the first two decisions, it was held that once the main writ
C C petition is dismissed, all the interim orders granted earlier gets
merged with the final order. In other words, if the writ petition
is dismissed, interim order stands nullified automatically. In the
third decision, this Court has held that once the rank list expired,
the PSC has no power to extend the validity of that list. This
Court has reiterated that the PSC, being a constitutional body,
D D
must act in accordance with law and cannot issue order or
notification extending the term of a dead list for which it has no
authority.
12. Mr. Jaideep Gupta, learned senior counsel for the
E E State of Kerala has also clarified that 40 vacancies had already
been reported to the PSC and the candidates advised against
those vacancies started training on 15.02.1991. Based on the
interim order, 7 vacancies alone could have been reported and
those candidates alone would have been advised and
F F appointed going by the quota rule worked out as on the date
of direct recruitment.
13. According to the appellants, the main basis of their
claim is that the rank list remained in force till 15.04.1993 and
G the appellants were advised for appointment on 04.01.1993
G
when the rank list was alive. In other words, according to them,
the rank list was alive when the appellants were advised by the
PSC. Therefore, according to the appellants, the advice and
appointment were validly made and the appellants are entitled
to have their advice and appointment treated as regular. It is
H H
 R. JAYARAMA AND ORS. v. STATE OF KERALA 703
AND ORS. [P. SATHASIVAM, J.]
their claim that based on the advice and appointment of the
appellants, they are entitled to have the seniority and all
consequential benefits from the date of their advise i.e. on
04.01.1993 and not from the date of the Government Order i.e.
17.06.1999 as held by the High Court. The above claim of the
appellants cannot be sustained since the direct recruits did not
have any right whatever to the seniority in respect of 40 posts.
Only 27 vacancies were initially reported. If 27 posts are
reckoned, direct recruitment should have been confined to 50%
of the notified vacancies. The specific documentary evidence
which is a letter dated 22.08.1984 of the Home Department
which clearly shows the number of posts mentioned is 187. The
50% quota in favour of the direct recruits will come to 93. From
the records, it is seen that the factual position was that 119
promotees were functioning as Sub Inspectors. The number of
direct recruits comes to 41. The special recruitment for
Scheduled Castes and Scheduled Tribes took in 11 posts. The
quota has to be worked after deducting the aforementioned 11
posts. As per the Division Bench, though the appellants had
claimed that all the posts should be reckoned for working of
the ratio, if 11 posts earmarked for special recruits is deducted,
the balance will work out to 176. Consequently, 50% posts due
for direct recruits will come to 176 X i.e. 88. There were
already 41 direct recruits occupying the post. Consequently, the
further posts available for direct recruits were 47 posts i.e. 88-
41=47. On the basis of this simple arithmetic work out the ratio
and number of vacancies reckoned on the basis of official
communication of the Home Department, the Division Bench
found that only 40 persons from the rank list prepared by the
PSC could be accommodated in the available quota. 7 posts
lay outside their allotment entitlements. The seniority had to be
reckoned on the basis of such actual availability of post. In fact,
to avert the discharge of the appellants, the Government
brought an order safeguarding their interest and the same was
upheld by the Division Bench by retaining the services of the
appellant w.e.f. 17.06.1999.
704 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 14. In view of the above factual position and in terms of
the rules, as rightly observed by the High Court, the first 7
candidates advised after the interim order dated 30.05.1991
alone were thus legally eligible for the vacancies against the
50% quota of direct recruitment. Others, in excess of that 7, are
B B not so eligible as per law. If the appellants are accommodated,
necessarily, it will adversely affect the rights of the promotees
to occupy their eligible quota as per the method of appointment.
15. As observed by the High Court, inasmuch as the
exemption and relaxation was ordered by the Government
C C
without giving any opportunity to anyone, particularly, the
promotees, at best, the Government order operates
prospectively and if it is to be applied retrospectively it would
adversely affect the seniority of persons who were already
promoted before the date of issue.
D D
Conclusion:
16. Under these circumstances, we are satisfied that the
High Court has considered all aspects in accordance with the
Rules applicable and we are in entire agreement with the said
E E
conclusion, consequently the claim of the appellants is to be
rejected. Accordingly, all the appeals fail and are dismissed
with no order as to costs.
B.B.B. Appeals dismissed.
F
G
H
 [2010] 15 (ADDL.) S.C.R. 705
B.S.N.L.
v.
RELIANCE COMMUNICATION LTD.
(Civil Appeal No. 6706 of 2010)
NOVEMBER 29, 2010
[S.H. KAPADIA, CJI., K.S. PANICKER
RADHAKRISHNAN AND SWATANTER KUMAR, JJ.]
Telecommunication:
Inter-connect agreement Clause 6.4.6 Interpretation
of Interconnect agreement between BSNL and Reliance
Company Wrongly routed calls Levy of penalty under
Clause 6.4.6 Clause 6.4.6, penal or pre-estimate of
damages Held: Clause 6.4.6 is not penal but a pre-estimate
of reasonable compensation for the loss foreseen at the time
of entering into the agreement Under the Interconnect
Agreement, the Unified Access Service Licence (UASL)-
Reliance Company is obliged to maintain the integrity of its
exchange/Point Of Interconnection (POI) Nature of the call,
be it local or national or international, as indicated by
corresponding Calling Line Identification (CLI), is the basis
for the levy of Interconnection Usage Charges [including
Access Deficit Charge (ADC)] When Gateway Bypass Scam
takes place and international call(s) lands on the local POI
which is not forwarded to the specified trunk group/POI, there
is not only bypassing of International Gateway/ POI and
National POI but also evasion of duty to maintain billing
records in detail at each POIs All this results in payment of
Interconnect Usage Charges (IUC) at a lower rate and also
leads to reduced cost for the defaulting UASL Thus, the
defaulting UASL resorts to masking Also, clause 6.4.6
restricts the higher IUC rate made applicable for calls only
for last two preceding months and not for last three years or
705
706 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A longer period Thus, order of the Tribunal that demand of
BSNL under clause 6.4.6, is penal in nature and thus, set
aside the impugned demand, set aside Matter remitted back
to the Tribunal to decide the matter de novo in accordance
with law.
B B Inter-connect agreement Obligations of Unified Access
Service Licence (UASL)-holders under Explained.
The respondents-Reliance Company entered into
BSO Inter-connect Agreement with the Department of
C C Telecommunications (now BSNL) for inter-connection of
their networks within their respective circles. The
Agreement dealt with local calls, national long distance
calls and international long distance calls. The calls of
each trunk group are connected through dedicated ports
D D and are chargeable at rates different from other trunk
groups. The charges are levied by BSNL on Reliance at
the rate of the existing call charges payable for that
particular period depending on the number of calls
handled by a particular port. The BSO regime was
replaced and the respondent was granted the Unified
E E
Access Service Licence (UASL). BSNL received several
complaints from its subscribers in Gujarat that they were
receiving International Long Distance Calls (ILD) calls
with local Calling Line Identification (CLI) Numbers. BSNL
raised its bill on Reliance (RIL) levying penalty with
F F
interest amounting to Rs. 9,89,68,892/- on the basis that
international calls were delivered on its network as local/
national calls from a particular number (02813041000),
belonging to a particular subscriber of the network of
Reliance and thus, wrongly routed/tampered calls. The
G G Tribunal set aside the impugned demand holding that the
impugned demand of BSNL under clause 6.4.6 of the
Interconnect Agreement is penal in nature; that under the
said clause unauthorized calls had to be detected by
BSNL and that in case of such detection charges were
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 707
to be levied on such calls at the highest applicable IUC;
that BSNL failed to draw distinction between
unauthorized calls and calls without/modified CLI in the
impugned demand; that no opportunity of hearing was
given to Reliance; and that the amount of penalty was not
commensurate with actual damage suffered by BSNL.
Therefore, the appellants filed the instant appeal.
Allowing the appeal, the Court
HELD: 1.1 Inter-connection agreement prescribes
terms and conditions under which two licensees or
service providers inter-connect their networks to allow
their respective subscribers to have seamless access to
each others networks. It is a binding contract that binds
each contracting party with respect to inter-connection
arrangements including commercial, technical and
operational. however, the scope and content of each
such contract may vary. Under the said Agreement, Inter-
connect Usage Charges (IUC) payments are divided into
four heads: (i) originating charges; (ii) carriage charges;
(iii) termination charges; and (iv) Access Deficit Charge
payments. ADC payment, as a concept, is a fee paid by
cellular, Unified Access Services, national long distance
and international long distance subscribers. This
payment is in the nature of tax as no service is rendered
in return. ADC payments are to cross subsidize BSNL for
developing its fixed network in non-lucrative areas. The
licensee(s) makes ADC payments based on their
adjusted gross revenues. These payments are later on
transferred to BSNL. An IUC charge is, thus, a payment
by one service provider to another for the use of network
elements to originate, transit or terminate calls. BSNL
receives ADC payments for international calls made to
fixed numbers. These payments are made by either
national long distance licensee(s) or international long
distance licensee(s) that collects them. BSNL receives
708 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A ADC payments for all international calls from cellular and
limited mobility numbers. These payments are collected
by ILDOs and given to BSNL. Similarly, ADC payments
on calls from international roaming subscribers are
collected by host service providers and paid to BSNL.
B B ADC payments for international calls are higher than
similar payments for national long distance or local calls.
This has tempted some licensees to engage in ingenious
schemes to avoid making ADC payments. One such
scheme is masking. Call masking takes place when a
C C licensee deliberately alters the identity of an incoming
international call before handing it over to another service
provider at an inter-connection point, i.e., POI. The
international calling partys identity is obliterated (i.e.
international Calling Line Identification is wiped out) and
D the said international call is made to appear as it were
D
from a domestic/ national number. This technique
enables evasion of ADC payments at enhanced rates for
international calls. Today, all private automated branch
exchanges (PBX) are computerized. A Caller ID (CID) is
a signal. Most subscribers have a caller ID display unit
E E at their residence to receive caller ID signals which also
indicates the nature of the call - whether it is local/
national or international. Whenever a call for a mobile
subscriber comes from outside the mobile network or
vice-versa, the call is routed through a special kind of
F F gateway switch which is called as Gateway Mobile
Switching Centre. It serves as an interconnection
between mobile switching centre and Public Switched
Telephone Nework which is a network. However, it is at
the POI (point of interconnection) that the GMSC of the
G G mobile network of Unified Access Service Licence
(UASL) gets interconnected to the GMSC of BSNL by a
facility of the interconnection seeker (which is Reliance).
There are two types of POI, namely, international and
local POI. Under the Agreement, UASL agrees to ensure
H H that its interconnect facilities delivered at each POI
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 709
conforms to the specified standards for interconnection
and that UASL shall be responsible to provide, install,
test, etc. all such interconnection facilities on its side of
POI. Therefore, every POI has two sides. The instant case,
one side of POI is that of BSNL and the other side is that
of Reliance. [Para 16] [753-F-H; 754-A-H; 755-A-C]
1.2 The Calling Line Identification (CLI) means
information generated by the network capability which
identifies and forwards the calling number through the
interconnected BSNLs network. Under clause 2.1.13,
Trunk Group is a part of POI. The said aspects are not
only technological, they are maintained for billing and
accounting purposes. They generate data(s) in the form
of CDRs and billing records in detail at the International
Gateway Exchange of ILDO (International POI), at the
NLDO Trunk Automatic Exchange of NLDO (National POI)
and Local Telephone Exchange of BSO (Local POI for the
understanding). At each stage, the billing record is
generated so that if an UASL is riding on the network of
BSNL, the former has to pay for the incoming
international call in terms of duration, etc. and even in the
case of local calls or national calls which includes the
distance parameter. Under clause 2.1.13, the fully mobile,
limited mobile and fixed services network of UASL shall
be having separate POIs with BSNL, which shall be
treated separately for set up costs, port charges, etc.
Under clause 2.1.15.3.3, for the purpose of international
call, the UASL shall handover the call to BSNL at the
originating Long Distance Charging Centre (i.e. LDCC
TAX). Under clause 6.4.7, all the required information shall
be submitted in the form of monthly certificate as
prescribed in Schedule I shall be submitted to BSNL by
UASL. It will indicate details of the traffic routed other than
through BSNL as NLDO/ILDO in respect of international
long distance calls (both incoming and outgoing). It also
indicates procedure for billing and recovery of ADC inter
710 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A alia in respect of ISD calls (both incoming and outgoing).
This is relevant also because under clause 2.1.5.2 calls
from fully mobile subscribers of other Telecom Service
Providers of the different service area (national roaming)
or Other Country (international roaming) have got to be
B B handed over by UASL to BSNL on separate trunk groups
at the Gateway TAX of BSNL of that service area. Under
clause 2.1.9.2, no by pass of traffic shall be resorted to
by any party by delivering the traffic at any POI other than
the specified POI and in case unauthorized diversion in
C C routing comes to notice, BSNL shall be free to disconnect
that POI in that area. Thus, under the Agreement if UASL
like Reliance receives an international call at its
exchange, its primary duty would be under the contract
to identify it and to forward it to the appropriate trunk
group of BSNL. If the international call(s) falls on the local
D D
POI of Reliance, the latter is obliged under the contract
to identify the call, whether it is local or national or
international, and accordingly forward it to the appropriate
trunk group of BSNL. It is also stipulated in clause 2.9.1
(which deals with network integrity and screening) that
E E it shall be the duty of the UASL to prevent wrong
transmission. In fact, under clauses 2.9.2 and 2.9.3 the
establishment of proper screening function at its Gateway
shall be the obligation of the UASL so as to detect signals
outside the inter-working specification of TEC. As a
F F corollary, clause 6.4.6(a) inter alia provides that calls on
non-specified trunk groups (like international calls
landing on the local POIs), if detected, for which the IUC
rate applicable is higher then the higher IUC rate would
be applicable for such unauthorized calls. In such a case,
G G BSNL would be free to charge the UASL the higher IUC
for all calls recorded on these POIs from the date of
provisioning of that POI [at Vadodara in the instant case]
or for preceding two months, whichever is less. Similarly,
under clause 6.4.6(b), if the UASL masks or disguises the
H H international call as local call that UASL will have to pay
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 711
the higher IUC rate meant for international calls to BSNL
from the date of provisioning of that POI or for preceding
two months, whichever is less. Thus, if there is masking
of CLI for the calls generated and forwarded from the
telephone of UASL, then it would be the primary duty of
that UASL to prevent such misuse and failing which
BSNL would be free to invoke clause 6.4.6. [Para 16] [755-
D-H; 756-A-H; 757-A-B]
1.3 Clause 6.4.6 restricts the charge to last two
preceding months. The charge under clause 6.4.6 is not
dependent upon number of calls and even the period of
misuse of services is restricted to last two preceding
months. Thus, when an international call, lands on the
local POI of the UASL it knows the nature of the call.
There is a difference between an international CLI and the
local/national CLI. The billing record of that POI indicates
the nature of the call. It is the contractual obligation of the
UASL to maintain the billing records in detail (including
the CDR and the monthly certificate in the prescribed
form). Further, when the international call(s) lands at the
local POI of the UASL, the incoming traffic bypasses the
authorized route international gateway exchange of
BSNL, the NLDO trunk exchange of NLDO and the local
telephone exchange of BSO. Thus, the defaulting UASL
fails to maintain the billing records (including CDRs at
each stage). This results in concealment of details which
results in reduced payment of IUC charges by the
defaulting UASL, thus, giving him the unauthorized
benefit of paying less ADC which was the major
component of IUC at the relevant time and which reduces
the cost of providing services which in turn results in
destroying the principle of level playing which is so
important in the regulatory regime because pricing of the
services in the international market plays an important
role. The above modus operandi enables the defaulting
UASL to sell his product (services) abroad at a rate
712 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A which may be less as compared to the rates charged by
BSNL (who is also a Competitor Service Provider). The
unauthorized call(s) gets for the defaulting UASL not only
more profits by cost reduction, he also gets more
business at the rates below the competitive rates. Same
B B is the position in case of masking of international calls
as local calls. When an international call(s) lands on the
local POI of the UASL, the latter knows from the display
mechanism at his end (like the subscriber at his end) that
call bears the international CLI and that is the reason for
C C masking. Otherwise one needs no masking of the CLI. In
both the cases i.e. under clauses 6.4.6(a) and 6.4.6(b) the
same economic and financial consequences flows and
that is the reason why clause 6.4.6 provides for
reasonable pre-estimate of damage. It is not possible to
trace each such unauthorized call, particularly its nature,
D D
as to from which place it originated and if it was possible
the cost of tracing such call(s) may be much more than
actual damage, if ascertainable, and therefore, a rough
and ready measure is provided in clause 6.4.6 which
measure is a reasonable pre-estimate of damage. [Para
E E 16] [757-C-H; 758-A-D]
2.1 The fact that damage is difficult to assess with
precision strengthens the presumption that a sum agreed
between the parties represents a genuine attempt to
F F estimate it and to overcome the difficulties of proof at the
trial. A clause is penal if it provides for a payment
stipulated as in terrorem of the offending party to force
him to perform the contract. If, on the other hand, the
clause is an attempt to estimate in advance the loss
G G which would result from the breach, it is a liquidated
damages clause. The question whether a clause is penal
or pre-estimate of damages depends on its construction
and on the surrounding circumstances at the time of
entering into the contract. The fact that a sum of money
H H is payable on breach of contract is described by the
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 713
contract as penalty or liquidated damages is relevant A A which provides not only increase in its profit but also
but not decisive as to categorization. [Para 17] [758-G-H;
759-A-B]
Chitty on Contracts 30th Edn., para 26-126; Law of
Contract by G.H. Treitel 10th edition referred to.
2.2 The Interconnect Agreement should be viewed in
the context of the regulatory regime. Telecom as a service,
is the most important circumstance to be considered as
one of the main surrounding circumstances to the
Interconnect Agreement. Under the Interconnect
Agreement, the UASL is obliged to maintain the integrity
of its exchange/POI. Each service provider, including
BSNL, is a market player/stakeholder. Each UASL is
entitled to a level playing field. The nature of the call, be
it local or national or international, as indicated by
corresponding CLI, is the basis for the levy of IUC
(including ADC). If by wrong routing of calls or by
masking the cost of providing services is reduced, the
concerned operator gets an undue advantage not only
in the Indian market over other competing operators but
also in the international market. Billing is one of the most
vital aspects of the instant case. With technology, an
international call could fall on the local POI but then the
concerned operator is responsible for the identity of the
call. In the case of calls which are correctly routed, the
display screen with the subscriber clearly indicates
whether the call bears international or local/national CLI.
Similarly, when the Gateway Bypass Scam takes place
and the international call(s) lands on the local POI which
is not forwarded to the specified trunk group/POI, there
is not only bypassing of International Gateway/ POI and
National POI but also evasion of duty to maintain billing
records in detail at each POIs. [Para 18] [759-A-H]
2.3 All this results in payment of IUC at a lower rate
as also leads to reduced cost for the defaulting UASL
714 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
gives it an advantage in international market vis-a-vis
other competitors (including BSNL) because the
defaulting UASL can easily price its product in the
international market at a lower rate and in that sense loss
B B is caused to BSNL. Similarly, masking takes place as
international CLI can easily be identified even when an
international call lands on the local POI of the UASL, thus,
the defaulting UASL resorts to masking. Thus, an
international call coming from the masked number alone
C C cannot be taken into account. Thus, clauses 6.4.6(a) and
6.4.6(b) provide for pre-estimate of damages. [Para 19]
[760-A-C]
3.4 The clause 6.4.6 (a) and 6.4.6 (b) restricts the
higher IUC rate made applicable for calls only for last two
D D preceding months and not for last three years or the
longer period. These time lines is an indicia showing that
clause 6.4.6 is not penal but a pre-estimate of reasonable
compensation for the loss foreseen at the time of
entering into the agreement. The liquidated damages
E E serve the useful purpose of avoiding litigation and
promoting commercial certainty and, therefore, the court
should not be astute to categorize as penalties the
clauses described as liquidated damages. This principle
is relevant to regulatory regimes. While categorizing
F F damages as penal or liquidated damages one must
keep in mind the concept of pricing of these contracts
and the level playing field provided to the operators
because it is on costing and pricing that the loss to BSNL
is measured and, therefore, all calls during the relevant
G G period have to be seen. Since clause 6.4.6 represents pre-
estimate of reasonable compensation, Section 74 of the
Contract Act is not violated. [Para 19] [760-D-H]
Communications Law in India by Vikram Raghavan p
639 - referred to.
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 715
3.4 It is clarified that the judgment is restricted only
to the interpretation of clause 6.4.6 of the Interconnect
Agreement read with the Addenda. The clause 6.4.6
represents pre-estimate of reasonable compensation for
the loss suffered by BSNL. Thus, the impugned judgment
is set aside and the matter is remitted to TDSAT to decide
the matter de novo in accordance with the law laid down.
However, it is highlighted that in the letter dated 13th
October, 2004 addressed by BSNL to Reliance, it has
been alleged that the calls have landed at the POIs of M/
s. Reliance Infocomm. Ltd. at Karellbaug, Panigate,
Alkapuri, Makarpura, Padra, Dabhoi and Miyagam
exchanges in Vadodara SSA. Also, it is alleged that the
number 2813041000 was an unallocated number with
Reliance during the relevant period. This aspect needs
to be examined by TDSAT on facts. [Para 20] [761-A-D]
Fateh Chand v. Balkishan Das (1964) 1 SCR 515;
Bharat Sanchar Nigam Limited v. Motorola India Private
Limited (2009) 2 SCC 337; Maula Bux v. Union of India
(1969) 2 SCC 554; Union of India v. Raman Iron Foundry
(1974) 2 SCC 231 referred to.
Case Law Reference:
(1964) 1 SCR 515 Referred to Para 10
(2009) 2 SCC 337 Referred to. Para 10
(1969) 2 SCC 554 Referred to. Para 10
(1974) 2 SCC 231 Referred to. Para 10
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6706 of 2010.
From the Judgment & Order dated 24.05.2010 of the
learned Telecom Disputes Settlement and Appellate Tribunal
at New Delhi.
716 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Gopal Subramaniam, SG, C.S. Vaidyanathan, Ramji
Srinivasan, Pratibha M. Singh, Tejveer Singh Bhati, Gaurav
Sharma, Abhinav Mukerji, Surbhi Mehta, Tanmay Mehta, Akhil
Sibal, Manali Singhal, Santosh Sachin, Aakarsh Kamra, Abhijat
P. Medh, Mansoor Ali Shokat, Apoorva Mishra, Ramesh Kumar
B B Pukharbham, S. Ganesh, Navin Chawla, Ruby Ahuja, Manu
Agarwal, Jatin Mongia, Raunak Dhillon, Manik Karanjawala (for
M. Karajawala and Co.) appearing parties.
The Judgment of the Court was delivered by
C C S.H. KAPADIA, CJI 1. Whether clause 6.4.6 of the
Interconnect Agreement between Bharat Sanchar Nigam
Limited (BSNL) and M/s. Reliance Infocomm Limited is penal
or a pre-estimate of damages is the question which arises for
determination in this civil appeal?
D D
Facts
2. On 18th March, 1997, Reliance had entered into BSO
Interconnect Agreement with Department of
Telecommunications (DoT) for interconnection of their networks
E E within their respective circles. In October, 2000, with its
establishment, the BSNL took over from DoT the
aforementioned BSO Agreement. In November, 2003, the BSO
regime was replaced by Unified Access Services regime which
granted the licence to service providers for both basic and
F F mobile telephony services as part of a single unified licence.
Reliance was allowed to operate as a Unified Access Service
provider from November 14, 2003 though it was formally
granted the Unified Access Service Licence on 21st
September, 2004 with effect from 14th November, 2003. By an
G G addenda dated 28th February, 2006, the agreement was
formally amended with retrospective effect from 14th
November, 2003. The Agreement deals with local calls, national
long distance calls (NLDC) and international long distance calls
(ILD). Calls of each trunk group are connected through
H H dedicated ports and are chargeable at rates different from other
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 717
[S.H. KAPADIA, CJI.]
trunk groups. Hence, depending on the number of calls handled
by a particular port, charges are levied by BSNL on Reliance,
at the rate of the existing call charges payable for that particular
trunk group.
3. On 24th June, 2003, the DoT issued a circular
specifying that Calling Line Identification (CLI) cannot be
tampered with under any circumstances and also gave
directions to service providers on how to prevent such
tampering. By its circular dated 28th January, 2004, the above
circular of DoT coupled with IUC Regulations dated 29th
October, 2003 issued by Telecom Regulatory Authority of India
(TRAI) was made effective.
4. In September, 2004, BSNL received several complaints
from its subscribers in Gujarat that they were receiving ILD calls
with local CLI Numbers. On the basis of these reports, BSNL
made its own enquiries by calling the local CLI number, i.e.,
0281-3041000. This was on 5th October, 2004, 6th October,
2004 and 7th October, 2004. Each time the number was called
the response from the other end was that the number did not
exist. Therefore, on 8th October, 2004, BSNL reported the
matter to Reliance at which time Reliance had sent its report
to DoT regarding the same. In the said report to DoT, Reliance
stated that the wrong routing of ILD calls was being done by
one of its subscribers, viz., M/s. Raj Enterprises (who was given
60 calls circuits). The series of numbers allotted to Raj
Enterprises was from 2813041000 2813041199, i.e., 200
numbers.
5. On 13th October, 2004, BSNL gave notice to Reliance
saying that Reliance is having POIs at various Exchanges in
Vadodra; that on monitoring incoming traffic to BSNL as
indicated in CDRs at the above POIs, it was found that there
were numerous calls with CLI as 281 3041000; that, such calls
have been received from 4th September, 2004 and, therefore,
BSNL will charge at Rs. 5.65 per minute for all incoming calls
at POI of Reliance from July, 2004. It may be noted that Rs.
718 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 5.65 per minute is the rate of incoming ISD calls at TAX POI of
Reliance (the word TAX stands for Trunk Automatic Exchange).
6. On 25th October, 2004, BSNL issues its circular to all
its officers by which continuation of unauthorized diversion in
B B routing of ILD calls is brought to their notice with specific
reference to the case of Reliance. In the circular, it is highlighted
that although Reliance claims that tampering of CLI has been
stopped w.e.f. 16th September, 2004, it is found that
international calls have been delivered on the local POI of
Reliance, at trunk group meant for intra circle terminating traffic,
C C
at various SDCC tandem exchanges, with CLI of Reliance
network of other SDCAs which is different from STD Code and
3039xxxx.
7. On 21st March, 2005, BSNL raised its bill on Reliance
D D (RIL) levying penalty of Rs. 9,17,27,746 with interest from 15th
October, 2004 to 15th April, 2005 at 21% p.a. for months of
July, 2004 to October, 2004 in all amounting to Rs. 9,89,68,892/
- for illegal routing of calls. This bill dated 21st March, 2005
superseded the provisional bill dated 15th October, 2004
E E raised by the Vadodra Unit of BSNL for Rs. 6.89 cr. for the said
period July, 2004 to September, 2004. In the said bill, the rate
applied was Rs. 5.65 per minute. This demand was made on
the basis that numerous calls have been detected in the POI
with CLI as 281 3041000 which pertained to ISDNB PRI
F F connection given to M/s. Raj Enterprises of Rajkot. According
to Reliance, the calls received in its POIs were grey market
calls. That, they were neither wrongly routed nor their CLIs were
tampered. Ultimately, after detailed correspondence between
BSNL and Reliance, petition No. 275 of 2009 was filed by
G G Reliance against the above impugned demand.
8. By the impugned judgment, TDSAT has held that the
impugned demand of BSNL under clause 6.4.6 of the
Interconnect Agreement is penal in nature; that under the said
clause unauthorized calls had to be detected by BSNL and that
H H in case of such detection charges were to be levied on such
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 719
[S.H. KAPADIA, CJI.]
calls at the highest applicable IUC; that BSNL was under an
obligation to draw distinction between unauthorized calls and
calls without/ modified CLI in the impugned demand which in
the present case has not been done; that no opportunity of
hearing was given to Reliance and, lastly, the amount of penalty
was not commensurate with actual damage suffered by BSNL.
Accordingly, the impugned demand was set aside. Aggrieved
by the impugned judgment of TDSAT dated 24th May, 2010,
BSNL has come to this Court by this civil appeal.
Submissions
9. On interpretation of clause 6.4.6, Shri Gopal
Subramanium, learned senior counsel appearing for BSNL
submitted that the said clause merely prescribes the payment
of a sum by Reliance on the happening of an event other than
breach and, consequently, the distinction between penalties and
liquidated damages would not apply because such distinction
applies only to sums payable on breach of the contract and not
when a clause prescribes payment of a sum on the happening
of an event other than breach. In this regard, learned senior
counsel submitted that the Agreement pertains to
telecommunication services which is capital intensive venture
and which requires seamless and uninterrupted service. A
disruption in such services would result not only in financial loss
to BSNL and Reliance but also to a large number of
subscribers of both the companies. Moreover, learned senior
counsel submitted that it is technically impossible for BSNL to
trace or block a call with a tampered (masked) CLI. That, on a
given day a single POI handles millions of minutes of calls which
are handed over to BSNL and in such a situation it is not
commercially feasible to decipher which call is genuine and
which call is without CLI/tampered CLI. Thus, clause 6.4.6
should be interpreted against the background knowledge
referred to above and, if so read, it becomes clear that the said
clause is inserted in the Agreement for commercial prudence
as a thumb rule and should as such be interpreted in that
720 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A manner. According to the learned counsel, the onus of proving
the nature of a clause as penal is on the party who has sued
upon it. According to the learned counsel, clause 6.4.6 gives
BSNL an option of terminating the contract or to prolong the
contract on the payment of an additional sum and thus the same
B B cannot be characterized as penalty but must be classified as
representing the price for the option of continuing the contract.
Thus, according to the learned counsel clause 6.4.6 represents
a condonable default under the contract as payment under the
said clause results in continuance of the contract.
C C Consequently, the amount paid under the said clause cannot
be brought under Section 74 of the Contract Act. According to
the learned counsel the situation in clause 6.4.6 amounts to an
alternative mode of performance of the contract. Lastly,
according to the learned counsel where a contract prescribes
payment of a sum on default, even if the sum payable may be
D D
larger than the actual loss, when the contract is between parties
with equal bargaining power, and as long as the sum payable
is not extravagant, it should not be characterized as penalty.
Similarly, where an agreed sum is payable upon a default if the
loss accruing to the claimant from the default in question cannot
E E be accurately or even reasonably be ascertained, then such
sum cannot be classified as penalty and once a stipulation is
held not to be a penalty, there is no need for actual proof of
loss.
F F 10. On interpretation of clause 6.4.6 of the Interconnect
Agreement, Shri C.S. Vaidyanathan, learned senior counsel for
Reliance and Shri Ramji Srinivasan, learned senior counsel for
Tata Teleservices Limited, submitted that there is no dispute
between the parties regarding the existence of the grey market
G G and its operations by miscreants who use the telecom facilities
provided by various telecom service providers, including
government operators, like BSNL and MTNL. In this connection
learned counsel placed reliance on the compilation submitted
by BSNL. Learned counsel also placed reliance on the
H H statistical data in support of his above contention. The learned
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 721
[S.H. KAPADIA, CJI.]
counsel has also relied upon directions dated 25.10.2004
issued in the form of a circular by BSNL to its field offices
suggesting steps to be taken by them to detect what is called
as gateway bypass scam. On the interpretation of clause
6.4.6, learned counsel submitted that the said clause carries a
heavy penalty; that the said clause is attracted in cases of
tampering/wrong routing of calls attributable to some fault on
the part of the operator and not otherwise, and since in the
present case the actions complained are attributable to an
unscrupulous subscriber and not to Reliance, clause 6.4.6
cannot be invoked. In other words, according to the learned
counsel, grey market operations of telecom are a reality
affecting all telecom service operators and cannot become a
ground for invoking clause 6.4.6 which is a unilateral clause
regardless of the fault of the private operator. Learned senior
counsel further submitted that the contention of BSNL regarding
strict civil liability is entirely misplaced as BSNL does not
possess any statutory power to impose such liability. On
applicability of Section 74 of the Contract Act, learned counsel
submitted that interconnection between different telecom
service providers is essentially in the interest of the
subscribers. That, such interconnection is mandated by the
license; that the interconnection charges are regulated by TRAI
under Section 11 of the 1997 Act; that no service provider can
charge interconnection charges more than what is specified by
the regulator; and that clause 6.4.6 of the Interconnection
Agreement between BSNL and Reliance is a one sided penal
provision insisted upon by BSNL. That, what BSNL can recover
is either consideration for services rendered by their
interconnection or compensatory damages in case of breach
of any of the clauses of the said Agreement. This is because
the Contract Act does not contemplate any other amount being
received by one contracting party (BSNL) from the other
contracting party (Reliance). That, the consideration for services
rendered by interconnection is regulated by TRAI it is not open
to BSNL to charge what they like. On the other hand, the TRAI
regulations do not provide for quantum of damages or a penalty
722 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A in case of breach of the interconnection agreement. Therefore,
if clause 6.4.6 is attracted before breach, as submitted by
learned counsel for BSNL, and if clause 6.4.6 is not
compensatory, then the amount demanded is without
consideration and would be unconscionable. According to the
B B learned counsel clause 6.4.6 in the Interconnect Agreement
confers only a contractual right. BSNL, according to the learned
counsel, is neither the sovereign exercising legislative or
executive or police powers nor is BSNL a regulator. It is not
vested with any powers to impose any penalty for breach of
C C contractual terms nor can BSNL be vested with such powers
as BSNL is one of the several operators in the National
Telecom Policy of 1994 and 1999. That, DoT or the TRAI may
exercise regulatory or police powers imposing a penalty or strict
civil liability for violation of any of the terms and conditions of
D the license when public interest so requires. However, BSNL
D
does not have any statutory, regulatory or police powers to
impose strict civil liability. That, strict civil liability has been
recognized and upheld where it is imposed by the State
exercising legislative power in respect of violation of tax
liabilities. It has also been recognized and enforced by courts
E E in tortuous action in regard to ultra hazardous activity or product
liability but even in such cases the liability is strict in the sense
that no negligence need be proved but quantum of damages
will have to be proved and it will be only compensatory and not
penal because penal liability can be imposed only by legislation.
F F According to the learned counsel the concept of strict civil
liability or absolute liability is alien to the scheme, purport and
intent of the law of contracts. On clause 6.4.6 learned counsel
submitted that the said clause occurs in Chapter 8 relating to
interconnection charges and it is in respect of wrongly routed
G G calls. According to the learned counsel the said clause 6.4.6
is premised entirely on the breach of contractual term requiring
calls being handed over in the specific trunk route or calls being
handed over with an appropriate CLI. That, clause 6.4.6 (d) is
a pointer to sub-clause (a) and sub-clause (b) being the
H H remedy for breach, in addition to the rights that BSNL has for
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 723
[S.H. KAPADIA, CJI.]
disconnection of POI or temporary suspension of Interconnect
Agreement for misuse. Thus, sub-clauses (a) and (b) and (d)
can be invoked only in case of a breach of the term requiring
handing over of calls in the specified trunk route or handing over
of calls with appropriate CLI and, therefore, it is incorrect to say
that clause 6.4.6 is attracted before the breach of contract and
that the provision for remedy of breach is only in clause 8.2 or
8.3. That, it is equally incorrect to contend that the provision for
breach or damages is only what is contained in clause 11 of
the general terms. According to the learned counsel clause 6.4.6
can be in the nature of reasonable compensation or
compensatory damage only if the charges are recovered in
respect of the offending calls and not in respect of the legitimate
calls. Any other interpretation will militate against the
compensatory nature of damages and will amount to imposition
of a penalty without legislative sanction and by one party to the
contract usurping sovereign, police and regulatory powers.
Learned counsel submitted that the two months time limit
cannot make clause 6.4.6 reasonable or compensatory, if all
calls, irrespective of whether they are rightly or wrongly routed,
or with CLI or without CLI or disguised CLI are charged at the
highest IUC rates. Such a provision, according to the learned
counsel, will be ex facie penal in nature. Learned counsel
submitted that there is no merit in the contention of BSNL that
technology does not enable tracing of every disguised call.
According to the learned counsel this argument of lack of
technology would be available to BSNL only to the extent that
all calls of the offending subscriber, such as Raj Enterprises,
may be treated as unauthorized calls. However, beyond that,
calls of other subscribers, in respect of whom there is not even
a whisper of illegality, cannot be clubbed with the offending
calls because that would amount to imposition of penalty.
Learned counsel submitted that under the Contract Act no party
is entitled to recover punitive damages for any breach of
contract. That, in terms of Section 73 of the Act, the party which
suffers by any breach of contract is entitled to receive, from the
party who has broken the contract, compensation for any loss
724 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A or damage caused to him thereby, which naturally arose in the
usual course of things from such breach. Such compensation
is not to be given for any remote or indirect loss or damage.
According to the learned counsel in terms of section 73 of the
Contract Act in order to receive compensation for loss or
B B damage, the party claiming such compensation must prove the
alleged loss or damage. However, section 74 carves out an
exception to the ordinary legal requirement of proving loss or
damage. In terms of section 74 when a contract is breached,
if a sum is named in the contract as the amount to be paid in
C C case of such breach or if the contract contains no other
stipulation by way of penalty, the party complaining of the
breach is entitled, whether or not actual loss or damage is
proved to have been caused thereby, to receive from the party
who has broken the contract, reasonable compensation not
exceeding the amount so named or, as the case may be, the
D D
penalty stipulated for. It thus follows, according to the learned
counsel, from section 74 of the Contract Act that regardless of
whether the contract specifies a sum to be paid in the event of
breach or whether it contains any other penal provision, the
party complaining of the breach is only entitled to receive
E E reasonable compensation. In the alternative, learned counsel
submitted that inasmuch as clause 6.4.6 provides for payment
of an amount beyond reasonable compensation for loss or
damage, it is to that extent unenforceable in law. In this
connection learned senior counsel has placed reliance on the
F F judgments, Fateh Chand v. Balkishan Das [(1964) 1 SCR 515];
Bharat Sanchar Nigam Limited v. Motorola India Private
Limited [(2009) 2 SCC 337]; Maula Bux v. Union of India
[(1969) 2 SCC 554] and Union of India v. Raman Iron Foundry
[(1974) 2 SCC 231]. According to the learned counsel clause
G G 6.4.6 is wholly one sided penal provision inasmuch as it entitles
the appellant to receive moneys from Reliance on account of
breach and not vice-a-versa. Learned counsel further submitted
that in the instant case BSNL has alleged that international calls
have been delivered on its network as local/national calls from
H H a particular number (02813041000), belonging to a particular
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 725
[S.H. KAPADIA, CJI.]
subscriber (Raj Enterprises), of the network of Reliance and are
consequently wrongly routed/tampered calls. However, BSNL
is unable to precisely identify such calls. In other words, BSNL
is not in a position to prove which precise calls delivered from
the said number were, in fact, international calls delivered as
local/national calls. However, applying clause 6.4.6 BSNL
seeks to charge for not only all calls delivered from said number
at the highest possible IUC rates, but, additionally seeks to
charge at the highest rate for all calls delivered at the concerned
POI for the relevant month as also all calls for the preceding
two months from entirely different numbers belonging to other
subscribers where there is no allegation whatsoever by BSNL
of wrong routing or tampering. In other words, even for numbers
and calls with respect to which there is no allegation of breach,
wrong routing or tampering, BSNL seeks to charge at the
highest IUC rates which bears no nexus whatsoever with the
loss or damage suffered by BSNL. It is submitted that to this
extent clause 6.4.6 falls foul of section 74 and is therefore
unenforceable. Charging for numbers and calls which have no
nexus whatsoever with the number identified by BSNL as
having been misused is to impose in terrorem penalty upon
Reliance bearing no connection with the loss suffered by BSNL
on account of alleged wrong routing or tampering and therefore
the amount claimed by BSNL does not fall within the ambit of
compensation and is legally unrecoverable. At the highest
reasonable compensation in terms of section 74 might cover
charging at the rate prescribed by clause 6.4.6 for all calls
received from the number of Raj Enterprises, without having to
prove that all such calls were, in fact, international calls delivered
as local/national calls, but no more. In this connection, learned
counsel pointed out that in the instant case the calls from Raj
Enterprises are about one lakh for the month of September and
October 2004. However, the total number of calls on the POI
for September and October are about 34 lakhs and if one adds
the entire calls for July and August 2004 also there are about
35 lakh calls in addition and, therefore, the charges in terms of
726 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A clause 6.4.6 at the highest rate can be only for 69 lakh calls in
addition to one lakh calls from the subscribe in respect of whose
number the allegation of wrong routing/tampering is leveled by
BSNL. Lastly, learned counsel submitted that there is no merit
in the contention of the BSNL that clause 6.4.6 prescribes the
B B payment of a sum on the happening of an event other than
breach and consequently section 74 would have no application.
According to the learned counsel if such contention is accepted
it would lead to absurd consequence because it would mean
that wrong routing of calls and tampering of CLI would amount
C C to performance of the contract rather than its breach. Moreover,
according to BSNL the bills raised by them are by way of
penalty. It is clear from the bill dated 21.03.2005. For the
aforestated reason it is submitted that there is no merit in any
of the above contentions. Coming to the validity of the demand
D notice and disconnection notice issued by BSNL, learned
D
counsel submitted that the demand notices issued by BSNL are
invalid since the same have been raised in 2004 without any
provision in the Interconnect Agreement. That, the bills raised
by BSNL were admittedly issued not in terms of any provision
in the Interconnect Agreement but in terms of the letter of
E E BSNL(Headquarters) dated 28.1.2004 which was issued only
for implementation of IUC regulations of TRAI dated October,
2003. Therefore, according to the learned counsel bills dated
13.10.2004, 15.10.2004 and 21.3.2005 are invalid. Learned
counsel submitted that clause 6.4.6 was inserted through an
F F Addenda signed on 28.2.2006. The said Addenda was made
applicable retrospectively with effect from 14.11.2003 with the
exception of applicable IUC charges including ADC and
interconnection arrangements made between the parties during
the intervening period which included ICU charges. That, the
G G said clause 6.4.6 is covered in the IUC charges which was
carved as an exception. Admittedly, at the relevant time, TRAI
had prescribed applicable IUC charges whereby depending on
the nature of the call (local, national, international) certain
identified charges were applicable. The applicable IUC charges
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 727
[S.H. KAPADIA, CJI.]
did not however contemplate charges for local/national call at
the highest available international rate, which the BSNL now
seeks to do purportedly by invoking clause 6.4.6. Thus,
according to the learned counsel from the express terms of the
Addenda itself it is clear that clause 6.4.6 falls within the
chapter entitled Interconnection Charges which is expressly
excluded from retrospective operation. Learned counsel
submitted that in any event such purported retrospective
application of a penal provision such as clause 6.4.6 violates
Article 20(1) of the Constitution. It is submitted that BSNL could
not have validated the bills issued illegally in 2004 on the basis
of the provisions introduced in the Interconnect Agreement
subsequently in 2006 when clause 6.4.6 was not given
retrospective effect and in the absence of any express provision
in the subsequent Addenda the bills cannot be validated. In any
case, according to the learned counsel the disconnection notice
dated 2.2.2009 was for alleged illegal routing under NLD
interconnect agreement; that the said NLD interconnect
agreement was signed on 1.11.2002 which did not have clause
6.4.6 as it exists in the Addenda dated 28.2.2006; that clause
6.4.6 in the interconnect agreement for NLD was different from
clause 6.4.6 in the Addenda dated 28.2.2006 of the
Interconnect Agreement and that clause 6.4.6 of the NLD
interconnect agreement did not provide for charging at the
highest rate and that too for the previous two months. Learned
counsel submitted that the Addenda to the NLD agreement
was signed on 17.11.2005 incorporating therein clause 6.4.6
(a), (b), (c) and (d) but the said agreement was not retrospective
and was effective from the date of signing of the Addenda
dated 17.11.2005. Consequently, according to the learned
counsel the impugned bills raised by BSNL were illegal and
invalid inasmuch as they were not raised in accordance with
the provisions of the Interconnect Agreement between the
parties. For the afore-stated reasons, learned counsel
submitted that there was no merit in the civil appeal filed by
BSNL and the same needs to be dismissed.
728 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Relevant provisions of:
11.(i) Interconnect Agreement dated 18th March, 1997
2.4 Numbering Plan
B B 2.4.1 The same area codes for SDCAs will be used for
both DoT and LICENSEE network. However,
distinguishing exchange codes will be used for the DoT
and the LICENSEEs exchanges i.e. linked numbering
scheme will be followed within the SDCA as per the latest
C C National Fundamental Plan.
2.4.5 Separate exchange codes or number ranges shall
be allocated to the DoT and the LICENSEEs exchanges
by the TELECOM AUTHORITY. Utilisation of unused
exchange codes or number ranges out of those allocated
D D
to the DoT and the LICENSEEs exchanges shall be
reviewed by TELECOM AUTHORITY from time to time for
optimum utilisation.
2.5 Calling Line Presentation
E E
2.5.1 LICENSEEs network shall be capable of transmitting
and receiving calling line identification which shall include
Access code, Area code and Subscriber number.
Chapter 6
F F
Interconnection Charges
6.1 Interconnectivity to DOT Network
6.1.1 Provision of links to interconnect LICENSEEs
G G network with DoTs network will be the responsibility of the
LICENSEE as provided under Clause 2.1.2 and 2.1.3.
6.2 Detailed Billing
6.2.1 For every STD/ ISD call originating from the
H H
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 729
[S.H. KAPADIA, CJI.]
LICENSEEs network and accepte d by DoT, a detailed
billing and/ or bulk billing record will be generated in the
LDCC TAX. For this purpose calling subscribers identity
shall be supplied by the LICENSEE for detailed billing
purpose.
6.4 Access Charges
6.4.1 For purposes of calculating the access charge, the
point at which the calls are delivered to DoTs network is
treated as originating point. The calls will be measured
from the point of entry to the destination at the applicable
rate of DoT.
6.4.3 The traffic delivered on any DOT LDCC TAX from
LICENSEEs LDCC TAX/ SDCC tandem/ local exchange
will be measured on the incoming junctions of the DOTs
LDCC TAX at the destination wise pulse rates applicable
to the calls generated locally at the same station where the
DOTs LDCC TAX is located.
6.4.5 For international calls originating in the LICENSEEs
network and accepted by DoT (ref. para 6.2.1), DoT will
bill the LICENSEE on monthly basis as ISD Access charge
at a rate of Rs. 0.70 per unit measured call at the point of
interconnection. The responsibility of paying to the
international carrier (presently Videsh Sanchar Nigam
Limited) will lie with the DoT.
(ii) Addenda to interconnect agreement after migration
dated 28th February, 2006
Whereas M/s Reliance Infocomm Limited (previously
known as M/s. Reliance Telecom Private Limited) has
signed an Interconnect Agreement on 18.3.1997 with
Department of Telecommunications {now Bharat Sanchar
Nigam Limited [hereinafter called the BSNL (previously
called as DOT]} for interconnection of their Basic Service
730 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A network with the network of BSNL in Gujarat Circle
Service Area.
Whereas the President of India granted to M/s. Reliance
Infocomm Limited [hereinafter called the UASL (previously
B called as LICENSEE)] a License No. 17-6/95-BS-II/
B
GUJARAT on 18th March 1997 under Section 4(1) of the
Indian Telegraph Act, 1885 to provide Basic Telephone
Service in the Service Area of Gujarat Circle on the terms
and conditions specified in such License.
C C AND whereas the UASL has, upon permission of Licensor,
migrated to Unified Access Service License regime on
14th November 2003 for above stated Service Area,
whereupon the said license agreement was amended and
revised on 21st September 2004 with effect from 14th
D D November 2003 on the terms and conditions specified in
such amended License No.10-05/2004-BS-II/RIL/
GUJARAT and therefore the said Interconnect agreement
is required to be amended and revised as described in
Chapters, Annexures and Schedules appended hereto with
E E effect from 14th November 2003.
AND whereas Interconnect Usage Charges (IUC)
Regulation become effective from 1st May 2003 which
was amended on 29th October 2003 to become effective
from 1st February 2004 and further amended on 6th
F F January 2005 to become effective from 1st February
2005.
IT IS NOW FURTHER AGREED AS FOLLOWS:
1. Each party, i.e. BSNL as well as the UASL, does
G G
hereby agree to the terms & conditions as described
herein which shall append as Addenda to the original
agreement and the combined agreement, hereinafter
called AGREEMENT, will become effective from 14th
November 2003 except the applicable Interconnection
H H
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 731
[S.H. KAPADIA, CJI.]
Usage Charges (IUC) including ADC, Interconnection A A
arrangements and associated bill arrangements as
prescribed by BSNL Corporate Office, during this
intervening period till date of signing of this Addenda.
2. Each party, i.e., BSNL as well as the UASL, does
B B
hereby agree to:
732 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
Chapter 1
Definitions
In this Agreement, words and expressions will have
the following meanings as are respectively assigned to
them unless repugnant to the subject or context:

(a) Interconnect its Network to the Network facilities of the
other party; and
(b) Make available to the other party the services, facilities
and information as specified in this Interconnect
Agreement.
(c) Provide the other interconnected party with
interconnection traffic carriage and fault detection of a
technical and operational quality that is equivalent to that
which each party provides to itself.
2(2) The UASL shall ensure that its interconnect facilities
delivered at each point of interconnection (POI) conform
to the applicable quality of service (QOS) standards and
technical specifications for interconnection by the relevant
delivery date determined pursuant to the provisions of this
Agreement.
2(3) UASL shall be responsible to provide, install, test,
make operational and maintain all interconnection facilities
on its side of point of interconnection (POI) unless
otherwise mutually agreed.
2(11) It is further agreed that any kind of breach of any of
the terms of this agreement by the UASL shall entitle
BSNL to levy damages on the UASL. Quantum of
damages assessed and levied by BSNL shall be final and
not challengeable by the UASL.
UASL means a registered Indian Company, which has
been awarded License for providing the UNIFIED
ACCESS SERVICE.
C C
CLI or CALLING LINE IDENTIFICATION: means the
information generated by the Network capability which
identifies and forwards the calling number through the
interconnected BSNLs / UASLs Network.
D D FUNDAMENTAL PLAN: means Numbering Plan,
Traffic Routing and Switching Plan and transmission Plan
issued by Department of Telecom as amended from time
to time.
E E GATEWAY SWITCH: Gateway switch is defined as a
switch, which has the capability to perform gateway
functions like functional capability to send and receive
signals based on CCS7 signaling system of ITU-T,
functional capability to send and receive various types of
information to other operators network in a multi operator
F F
environment such as operator identity, charging area
information etc. as well as transport of calling line
identification, generating call data record for an off line
billing system giving all necessary details of the call for
proper settlement of accounts in a multi operator
G G environment and Security monitoring functions.
NATIONAL LONG DISTANCE SERVICE OPERATOR
(NLDO): means the telecom operator providing the
required digital capacity to carry long distance
H H telecommunication service within the scope of LICENSE
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 733
[S.H. KAPADIA, CJI.]
for National Long Distance Service, which may include
various types of tele services defined by ITU, such as
voice, data, fax, text, video, and multi media etc.
POINT OF INTERCONECTION (POI) is a point at
which the GMSC of Fully Mobile network of UASL and
Gateway Switch of BSNL or local / tandem / TAX
exchange of the basic service network of UASL and local
/ Tandem / TAX of BSNL are interconnected by the facility
of interconnection seeker and where the specified
Network-Network Interface Standards are applicable.
PSTN means Public Switched Telephone Network.
SHORT DISTANCE CHARGING CENTRE (SDCC):
It means a particular Exchange in a Short Distance
Charging Area declared as such for the purpose of
charging of long distance trunk calls as defined in the
National Fundamental Plan.
UNIFIED ACCESS SERVICES: means
telecommunication service provided by means of a
telecommunication system for the conveyance of
messages through the agency of wired or wireless
telegraphy. The Unified Access Services refer to
transmission of voice or non-voice messages over
LICENSEEs Network in real time only. SERVICE does not
cover broadcasting of any messages voice or non-voice,
however, Cell Broadcast is permitted only to the
subscribers of the service. The subscriber (all types, pre-
paid as well as post-paid) has to be registered and
authenticated at the network point of registration and
approved numbering plan shall be applicable.
The following abbreviations shall bear the full expression
as mentioned below:
UASP: UNIFIED ACCESS SERVICE PROVIDER
734 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Chapter 2
Technical Issues pertaining to Interconnection
2.1 Interconnectivity to BSNL Network
B B 2.1.1 As per clause 2.6 of License agreement The
LICENSEE (UASL) will have to make his own
arrangements for the entire infrastructure required for
providing the SERVICE. Therefore the UASL may develop
its own independent network with its own transmission
C C links within each of its service area.
2.1.3 The UASL shall not, directly or otherwise, extend any
type of service to BSNL subscribers through the access
provided by BSNL except for those services which are
permitted as per the license agreement and are further
D D
mutually agreed between both the parties.
2.1.4 Interconnectivity between UASLs network as
specified in the license and the overseas communication
network operated by licensed ILDOs shall be through the
E E TAXs of BSNL or of any other operator duly licensed for
the purpose.
2.1.5.2 Calls from fully mobile subscribers of other telecom
service providers of different service area (National
F Roaming) or other country (International Roaming),
F
roaming in the network of UASL shall be treated
separately for the purpose of charging and routing.
2.1.9.1 Any facility obtained by the UASL from BSNL shall
not be resold or leased in any manner to a third party.
G G
2.1.9.2 No by pass of traffic shall be resorted to by any
party by delivering the traffic at any point other than as
permitted or agreed to under this agreement. In case
unauthorized diversion in routing comes to notice, BSNL
H H shall be free to disconnect the POI in that area, after
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 735
[S.H. KAPADIA, CJI.]
intimating UASL one week in advance. Moreover, the
resources of BSNL shall be used for the purpose for which
these have been earmarked and no other service shall be
offered by utilizing such resources without agreement or
the explicit written consent of BSNL.
2.1.12 The interconnection arrangement shall be in
accordance with the National Fundamental Plan related to
Switching, Routing, Charging and Numbering.
2.1.13 The Fully Mobile, Limited Mobile and Fixed services
network of UASL shall be having separate POIs with
BSNL, which shall be, treated independently for all
purposes, including setup costs, port charges etc. The
formation of separate POIs and various trunk groups
therein is to be done as prescribed in relevant tables in
Schedule I Appendix A. The tables for POIs and trunk
groups as prescribed for CMTS network shall be
applicable for fully Mobile network of UASL.
2.1.15.3 INTERCONNECTIVITY FOR STD/ ISD CALLS
2.1.15.3.1 Interconnectivity for STD/ISD calls shall be
between BSNLs LDCC TAX and UASLs LDCC TAX. In
case UASL does not have his own TAX in the LDCC, STD/
ISD calls from UASLs SDCC Tandem/local exchange in
an SDCA in the LDCA shall be handed over to BSNLs
LDCC TAX by the UASL.
2.1.15.3.3 For the purpose of Inter circle and International
call, the UASL shall handover the call to BSNL at the
originating LDCC TAX.
2.1.16 For the purpose of transit calls originated by
UASLs subscriber and meant for termination in network
of any other service provider, the UASL may transmit such
traffic as per rates given in Schedule I, on separate trunk
groups at SDCC Tandem for local calls and originating
736 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A LDCC TAX for intra and inter circle STD calls. However,
BSNL reserves the right to amend the rates from time to
time and also to selectively withdraw transit facility to other
networks. BSNL will also be at liberty to transit and offer
calls originated from other networks to UASL network.
B B Either party shall not suppress the CLI for transit traffic also.
If rates for any transit service are not available in the
Schedule, the same shall be mutually agreed separately.
Detailed technical arrangements will be agreed separately.
2.4 NUMBERING PLAN
C C
2.4.1 For Basic Services the same area codes for SDCAs
/ LDCAs will be used for both BSNL and UASL network.
However, distinguishing exchange codes will be used for
the BSNL and the UASLs exchanges i.e. linked numbering
D D scheme will be followed as per the latest National
Fundamental Plan.
2.4.3 All the digits received from calling party including 0
shall be passed across the interface (ROD=1). In case of
CCS7 signaling, leading 0 will be appropriately coded in
E E
Nature of Address Indicator (NAI).
2.4.5 For Basic services separate exchange codes or
number ranges shall be allocated to the BSNL and the
UASLs exchanges by the LICENSOR. Utilization of unused
F F exchange codes or number ranges out of those allocated
to the BSNL and the UASLs exchanges shall be reviewed
by LICENSOR from time to time for optimum utilization.
2.5 CALLING LINE PRESENTATION
G G 2.5.1 BSNLs and UASLs network shall wherever
technically possible, transmit and receive Calling Line
Identification (CLI). The Calling Line Identification from
UASLs fully mobile/ CMTS network shall contain mobile
subscriber number including 93 and from its basic services
H H
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 737
[S.H. KAPADIA, CJI.]
network the CLI shall contain Access code, Area code
and subscriber number. The Calling Line Identification from
BSNL shall contain area code and subscriber number
depending on the technical feasibility.
2.5.4 No tampering/ alteration of CLI of calls handed over
at the POI with BSNL shall be done by UASL. Instructions
of Licensor in this regard shall be followed by UASL failing
which the concerned POI of UASL shall be disconnected
under misuse after giving one week notice in addition to
other actions prescribed in this agreement elsewhere.
2.5.5 The switches of BSNL, which do not have CLI based
call barring capability or are not having CDR based offline-
billing capability, shall be technically non feasible for
provision of point of Interconnection. However, UASL
undertakes that in the absence of such capabilities in
BSNLs switches, it shall abide by all terms and conditions
including MCU based arrangements for the purpose of
measurement and billing of interconnect traffic as mutually
agreed and thus mentioned in this agreement and that this
arrangement will not be a matter of dispute, then BSNL
shall provide POIs to UASL in such switches, if otherwise
feasible to do so.
It is further agreed that in case of any regulatory/ judicial
intervention on the above matters, the UASL shall be
entitled to and be extended the same relief/ benefit given
to any other operator to the extent it is applicable to the
UASL under this agreement.
2.9 NETWORK INTEGRITY AND SCREENING
2.9.1 It is the responsibility of the UASL to prevent the
transmission of any signaling message across the
connecting network, which does not comply with, inter
working specification of TEC No.G/PNI-03/01 Sept. 95 or
738 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A as modified from time to time. Similarly BSNL shall also
ensure the same in its network.
2.9.2 Efficient arrangement for screening function shall be
established by the UASL at his Gateway exchange or
B elsewhere in his network to detect signals outside the
B
inter-working specification of TEC No. G/PNI-03/01 Sept.
95 referred above. Similarly BSNL shall also ensure the
same in its network.
2.9.3 Screening arrangement shall include rejection of
C C communications or discarding information fields, which do
not comply with the specification. It will be the responsibility
of the UASL/BSNL that network integrity is protected and
maintained.
D D CHAPTER 6
INTERCONNECTION CHARGES
6.2 DETAILED BILLING
E E 6.2.1 For every STD/ISD call originating from the UASLs
network and accepted by BSNL, a detailed billing record
wherever possible and/or bulk billing record will be
generated in the LDCC TAX. For this purpose the UASL
shall supply calling subscribers identity for detailed billing
purpose.
F F
6.4. Interconnect Usage Charges
6.4.1 Interconnect Usage Charges (IUC) shall be payable
by UASL to BSNL for the calls originating in UASL network
G G and handed over to BSNL network. Likewise Interconnect
Usage Charges shall be payable by BSNL to UASL for
the calls handed over by BSNL network and terminating
in UASL network. Interconnect Usage charges include
termination charge, carriage charge, transit charge and
H H access deficit charge (ADC) as applicable.
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 739
[S.H. KAPADIA, CJI.]
6.4.3 The traffic from / to fully mobile network delivered on
any BSNLs LDCC TAX from UASLs GMSC will be
measured on the incoming / outgoing junctions of the
BSNLs LDCC TAX.
6.4.6 WRONGLY ROUTED CALLS
(a) Unauthorised calls i.e. calls other than specified for that
trunk group if detected, for which the applicable IUC is
higher than the IUC applicable for calls prescribed in that
trunk group, then BSNL shall charge the UASL the highest
applicable IUC, as applicable for such unauthorised calls,
for all the calls recorded on this trunk group from the date
of provisioning of that POI or for the preceding two months
whichever is less.
(b) the CLI based barring facility shall be activated at the
POIs wherever technically feasible to ensure that the traffic
handed over by BSNL is in the appropriate trunk groups
only. Wherever it is technically not feasible to activate CLI
based barring, periodic monitoring of the incoming trunk
group shall be done by BSNL to ensure this objective. The
calls received by BSNL without CLI or modified/tampered
CLI from UASL shall be charged at the highest slab i.e.
as for ISD Calls. In case such calls are received by BSNL
on any trunk group, then all the calls recorded on this trunk
group shall be charged at the rates applicable for IUC of
incoming ISD calls from the date of provisioning of that POI
or for the preceding two months, whichever is less.
(c) When CDR based billing is introduced in BSNLs
network some of the trunk groups shall be merged. In such
cases also, in case unauthorised or Incoming International
Call, without CLI call, call with tampered CLI is handed over
to BSNL at the merged trunk group, then BSNL shall
charge the UASL the highest applicable IUC, as
prescribed in clauses 6.4.6(a) above for unauthorised calls
& 6.4.6(b) above for incoming International call, without CLI
740 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A call, call with tampered CLI, for all calls recorded on this
merged trunk group from the date of provisioning of that
POI or for the preceding two months whichever is less.
(d) In addition, BSNL shall also have the right for taking
other legal actions including disconnection of POIs or
B B temporary suspension of the interconnection arrangements
under misuse.
6.4.7 All the required information in monthly certificate of
details of traffic (in minutes) as prescribed in Schedule I
C C shall be submitted by UASL to BSNL in a timely manner.
This information includes outgoing STD and ISD traffic
from its limited mobile/ fully mobile/ cellular access network
handed over to each of private NLDOs/ ILDOs separately
and incoming STD and ISD traffic to its network accepted
from each of private NLDOs/ ILDOs separately.
D D
6.5 Billing
6.5.2 At present CDR based billing system for POIs is not
available in BSNLs network at all locations. Wherever
E E BSNL is having CDR based billing system for POIs, BSNL
shall bill the IUC based on processing of CDRs. However,
wherever CDR based billing system is not available in
BSNLs network, the billing of IUC shall be done based on
IUC pulses as described in Schedule I. The per MCU
F F charge for these IUC pulses being Rs 0.10 for all types of
calls except originating ISD calls and any other call
specially specified in which case per MCU charge shall
be Rs 1.20. BSNL reserves the right to charge Access
Deficit Charge (ADC) based on distance from originating
G G SDCC to terminating SDCC as and when necessary
technical arrangements are put in place by BSNL.
8.2 Termination
8.2.1 This Agreement shall continue for the period
H H
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 741
[S.H. KAPADIA, CJI.]
indicated in Clause 8.1 above unless any of the following
events occur:
(a) Either Party ceases to hold a licence under Section 4
of the Indian Telegraph Act.
(b) An order is entered by a court of competent jurisdiction
mandating the winding-up or dissolution of a Party, or
appointing a receiver or liquidator for such Party or having
a comparable effect;
(c) If in the interest of national security or otherwise, it is
ordered by a Competent Authority such as Licensor/ TRAI,
that the agreement may be terminated.
(d) If there is a breach of any of the technical and financial
obligations as covered in clauses 2.1.3, 2.1.5.1, 2.1.8,
2.1.9.1, 2.1.9.2, 2.5, 2.11 and 6.4.6.
In which case this Agreement shall immediately be
terminated, without any further notice.
8.2.2 This Agreement also may be terminated by either
Party giving 30 days notice to the other in the event that
either Party.
(a) breaches any provision of this Agreement; provided,
however, that the breaching Party has been notified in
writing of its failure by the non-breaching Party and the
breaching Party has not remedied its failure within twenty
(20) Working Days; and the approval of Licensor or TRAI,
as the case may be, has been obtained for such
termination. In the event, the approval is accorded with
conditions, regard being had to the general interest of the
customers, the same will be fully complied with before the
final act of disconnection of interconnection arrangements
becomes effective. Provided, however, in the event no
intervention is made by the Regulator/ Licensor during the
742 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A notice period, the approval shall be deemed to have been
accorded.
(b) ceases to carry on business.
(c) Either Party is unable to discharge its obligation under
B B this agreement. However, in case of Force Majeure
procedure as indicated below shall be followed:
FORCE MAJEURE
C Neither party shall be liable for any breach of this
C
Agreement (other than a breach for non payment) caused
by an act of God, insurrection or civil disorder, war or
military operations, national emergency, fire, flood,
lightning, explosion, subsidence, industrial dispute of any
kind. The Party affected by such force majeure shall
D D
promptly notify the other Party of the conditions and the
details thereof. If as a result of force majeure, the
performance by affected Party of its obligation under this
agreement is only partially affected, such Party shall
nevertheless remain liable for the performance of those
E E obligations not affected by such force majeure. If the force
majeure lasts for more than the continuous period of 90
calendar days from the date of the notification, and
continues to prevent the affected Party from performing its
obligation in a whole or in material part, the either party
F F shall be entitled to, terminate this agreement by giving not
less than 30 calendar days written notice to the other Party.
8.3 Withdrawal of Interconnection
(a) For Non-payment: In case of default in payment,
G G BSNL reserve the right for withdrawal/ suspension of
services at the POI. This will be in addition to other
remedies available under the agreement.
(b) Under misuse or instructions for the Licensor.
H H Either Party may suspend or withdraw the services if the
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 743
[S.H. KAPADIA, CJI.]
other party misuses or indulges in any act which will
constitute misuse of POI or will result in violation of
instructions issued by Licensor/ Regulator.
The notice period for (a) and (b) above, if any, shall be as
specified in the respective clause of the agreement.
SCHEDULE I
Interconnection Usage Charge (IUC)
3. Due to non-availability of CDR based billing plateform,
IUC applicable for the calls handed-over to BSNL at the
PoI (Point of Interconnect) have been converted into
different pulse rates as per Appendix B. The pulse rates
have been calculated at a per MCU (Metered Call Unit)
rate of Rs 0.10 for all calls except outgoing ISD calls which
shall be measured at a rate of Rs 1.20 per MCU. The bills
for IUC shall be raised by BSNL to the interconnecting
operator based on the bulk billing of MCUs on the
incoming trunk groups. The pulse duration with an accuracy
of 10 milli seconds shall be applied at the POIs of all UASL
with BSNL as prescribed in Appendix B (in brackets)
wherever technically feasible in BSNL switches. At present
the implementation of 10 milli seconds accuracy in pulse
duration is possible in new technology switches of BSNL
i.e. EWSD, AXE-10, OCB-283 and 5ESS.
5. The bills for IUC raised by access providers to BSNL
shall accompany with a certificate that they have submitted
a signed certificate to circle office BSNL regarding the
volume of intra circle, NLD and ILD traffic as per the
Appendix-C. Further processing of these bills, for payment
to access providers for the traffic terminated in their
network, shall be done only on receipt of this certificate
from them. In case called upon, the complete record of
traffic will be produced by access providers for verification
by the technical audit team constituted by BSNL. The
744 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A procedure for billing and recovery of ADC in respect of
inter-circle STD calls from cellular / WLL (M) and outgoing
/ incoming ISD calls routed through a NLDO or ILDO other
than BSNL and intra-circle traffic from cellular/ WLL(M) to
fixed networks are enclosed in Appendix-D.
B B 11. The CLI based barring facility has been activated by
BSNL at the PoIs wherever technically feasible to ensure
that the traffic handed over to BSNL is in the appropriate
trunk groups only. Wherever it is technically not feasible to
activate CLI based barring, periodic monitoring of the
C C incoming trunk groups shall be done by BSNL to ensure
this objective. In case of wrongly routed calls IUC shall be
charged as below:
(a) Unauthorised calls i.e. calls other than specified for that
D D trunk group if detected, for which the applicable IUC
(including ADC) is higher than the IUC (including ADC)
applicable for calls prescribed in that trunk group, then
BSNL shall charge the concerned private operator the
highest applicable IUC (including ADC), as applicable for
E E such unauthorized calls, for all the calls recorded on this
trunk group from the date of provisioning of that POI or for
the preceding two months whichever is less.
(b) Wherever it is technically not feasible to activate CLI
based barring, the calls received by BSNL without CLI or
F F modified/ tampered CLI from concerned private operator,
shall be charged the IUC applicable for the highest slab
(i.e. as for ISD Calls including ADC applicable for ISD
calls) for all the calls recorded on this trunk group from the
date of provisioning of that POI or for the preceding two
G G months, whichever is less.
(c) When CDR based billing is introduced in BSNLs
network some of the trunk groups shall be merged. If
unauthorized or Incoming International call or without CLI
call or call with tampered CLI is handed over to BSNL at
H H
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 745 746 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
[S.H. KAPADIA, CJI.]
the merged trunk group, then BSNL shall charge the A A (c) intra circle calls (both originating and terminating) from
concerned private operator the highest applicable IUC cellular/ WLL (M) to fixed networks and including calls
(including ADC), as prescribed in clauses 11(a) above for terminating in own network
unauthorized calls & 11(b) above for Incoming International
call, without CLI call, call with tempered CLI, for all calls during the above period are as under:
recorded on this merged trunk group from the date of B B *** *** ***
provisioning of that POI or for the preceding two months
whichever is less. B. Details of Traffic (in Minutes) through M/s Reliance
Infocomm Ltd NLDO & ILDO)
(d) In addition, BSNL shall also have the right for taking
other legal actions including disconnection of POIs or Call Type ........... ........... .......... ............
C C Circle Circle Circle Circle
temporary suspension of the Interconnection arrangements
under misuse. I Inter
circle
Appendix - C outgoing
calls
CERTIFICATE OF TRAFFIC ROUTED VIA OTHER D D
NLD/ILD OEPRATORS AND INTRA CIRCLE TRAFFIC II Inter
{to be given by cellular operators and basic operators} circle
incoming
For the Month of ....................., 200 calls
Licensed Service Area ......................... E III Outgoing
E
Name of Operator................................. ILD calls
Type of Service (Cellular / WLL-M/Fixed).... IV Incoming
Period: From .......................to ..................... ILD calls
Dated ................... at ...........................
F F *** *** ***
This is to certify that the details of traffic routed other than
through BSNL as NLDO/ ILDO/ transit operator in respect Appendix - D
of:
Procedure for billing and recovery of ADC in respect of inter
(a) inter circle calls (both originating and terminating) circle cellular / WLL (M) originated calls, ISD calls (incoming
except those originated from fixed networks but including G G and outgoing both) and intra circle cellular (WLL(M) to fixed
calls terminating in own network in other circles; networks routed other than other than through BSNL as NLDO/
ILDO/ transit operator.
(b) international long distance calls (both incoming and
outgoing) except those originated from fixed networks; and 1. As per TRAIs IUC Regulation dated 6th January,
2005 for such inter and intra circle calls that are
H H routed through the BSNL as either NLDO or transit
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 747
[S.H. KAPADIA, CJI.]
operator, the ADC amount is received directly by
BSNL from the call originating operator. For ILD
calls routed through BSNL as NLDO, it receives
ADC from call originating operator in case of
outgoing calls and the ILD operator for the incoming
calls. However, BSNL has also to receive ADC
from cellular/ WLL(M) originating inter circle calls,
the originating ILD calls in cellular/ WLL (M)
networks and terminating ILD calls carried by other
NLDO/ ILDO, or a combination thereof for the ILD
calls. In addition to above BSNL has also to receive
ADC from cellular/ WLL (M) originating intra circle
calls to fixed networks not routed through BSNL
(iii) NLD Interconnect Agreement between BSNL
and Reliance dated 1st November, 2002
Chapter 1
Definitions
In this Agreement, words and expressions will have
the following meanings as are respectively assigned to
them unless the contrary intention appears from the
context:
SHORT DISTANCE CHARGING AREA
(SDCA): means one of the several areas into which a
Long Distance Charging Area is divided and declared as
such for the purpose of charging for long distance calls and
within which the local call charges and local numbering
scheme is applicable. SDCAs, with a few exceptions,
coincide with revenue tehsil / taluk.
Chapter 2
Technical Issues Pertaining to Interconnection
2.1 Interconnectivity to BSNL Network
748 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 2.1.5 RIL shall terminate its traffic on to the network of
BSNL as mandated by TRAI from time to time. RIL and
BSNL shall deliver all calls on each others network with
CLI in the terminating SDCA. Both parties reserve the right
to reject calls without CLI.
B B
2.4 Numbering Plan
2.4.1 RIL shall be allocated carrier selection code by the
LICENSOR for dynamic selection of carrier for long
distance calls. All calls for which dynamic carrier selection
C C code has been dialed shall be routed accordingly subject
to technical feasibility.
Chapter 6
Interconnection Charges
D D
6.1 Interconnectivity to BSNL Network
6.1.1 Provision of links to interconnect RILs network with
BSNLs network at the technically feasible SDCC Tandem
E E exchange will be the responsibility of the RIL as provided
under Clause 2.1.2 and 2.1.3.
6.4 Access Charges
6.4.6 If BSNL detects that Incoming International calls are
F F being handed over or have been made over to BSNL at
any other port which is not meant for carrying such calls,
BSNL shall be free to charge RIL minimum access charge
for Incoming International calls as at clause 6.4.2 above
for all the calls recorded on these ports from the date of
G G provisioning of that POI or for the preceding two months
whichever is less apart from taking other legal actions
including disconnection of POIs or temporary suspension
of the Interconnection Agreements. No terminating calls
other than International calls shall be accepted from RIL
H H without CLI. In case of calls without CLI, termination charge
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 749
[S.H. KAPADIA, CJI.]
as per clause 6.4.2 above shall be charged from RIL.
6.6.1 Access charges shall be billed by BSNL based on
bulk billing of traffic recorded by BSNL at the point of
interconnection. For every STD/ ISD call carried by RIL and
accepted by BSNL at POI, a detailed billing record
wherever possible or bulk billing record will be generated
in the SDCC Tandem. The RIL shall supply calling
subscribers identity for detailed billing purpose.
Findings
(i) Introduction
12. Telecommunication is all about transferring information
from one location to another. This includes telephone
conversations, television signals, computer files and other types
of data. To transfer the information, you need a channel
between the two locations. This may be a wire pair, radio
signal, optical fiber, etc. Telecommunication companies
receive payment for transferring their customers information,
while they themselves pay to establish and maintain the channel.
(ii) Relevant technical terms used in the
Interconnect Agreement r/w the addenda
(a) Gateway Mobile Switching Centre (GMSC): It is
a special kind of MSC that is used to route calls
outside the mobile network. Whenever a call for a
mobile subscriber comes from outside the mobile
network or the subscriber wants to make a call to
somebody outside the mobile network, the call is
routed through GMSC. In short, it serves as an
interconnection between MSC and PSTN
(network).
(b) PSTN: It means Public Switched Telephone
Network. The term PSTN refers to inter-connection
of switching systems in the PSTN (Exchange).
750 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Switching network refers to the component inside
a switching system that switches one circuit to
another circuit.
(c) Point Of Interconnection (POI): It is a point at
B which the GMSC of a mobile network of UASL and
B
the Gateway Switch of BSNL are inter-connected
by a facility of inter-connection seeker (Reliance in
this case).
(d) Trunk Group: It consists of several trunks (lines)
C C provided as a group by the local telephone
company or any other carrier. Trunk group is a part
of POI (see clause 2.1.13).
(e) Unified Access Services: It means a
telecommunication service provided by a
D D
telecommunication system for conveyance of
messages through wired or wireless telegraphy.
The Unified Access Services refer to transmission
of voice or non-voice messages over the network
of the licensee (Reliance in this case). It, however,
E E
does not cover broadcasting of messages.
However, the subscriber has to be registered and
authenticated at the network point of registration
and approved numbering plan shall be applicable.
Thus, UASP is the abbreviated term for the
F F
expression Unified Access Service Provider.
(f) International Gateway: A Gateway is a network
point that acts as an entrance to another network.
Conceptually, it is the point of inter-connection
G G (POI), i.e., the point of entry for the international calls
to the telecom network of India. A POI is a mutually
agreed upon point of demarcation where the
Exchange of traffic between the two telecom
networks takes place. In the case of international
H H calls traffic, i.e., inter-country telecommunications,
B.S.N.L. v. RELIANCE COMMUNICATION LTD. 751
[S.H. KAPADIA, CJI.]
the POI is the International Gateway. In this case,
we are concerned with the international gateway of
BSNL. However, for intra-country calls traffic, every
local telecom network provider (Reliance in this
case) is supposed to set up a local POI which acts
as the entry point for all incoming telecom traffic.
The local POI has got to be under the care and
control of the local telecom provider for whose
network the local POI acts as an entry point. This
local POI is the location where details of all
incoming landing telecom traffic, namely, the CLI
number, their destination number, their time-stamp
details, their duration, etc. have to be logged for
future accounting and tracing requirements. Thus,
we have two kinds of POIs, namely, international
POIs and local POIs. Similarly, we also have two
kinds of CLIs, namely, local and international CLIs.
(g) Calling Line Identification (CLI): CLI means
information generated by the Network capability
which identifies and forwards the calling number
through the interconnected BSNLs/ UASLs
network.
(h) Gateway Switch: It is a switch which has the
capability to perform Gateway functions like
sending and receiving signals, sending and
receiving various types of information to the other
operators network in a multi-operator environment
such as operators identity, charging area
information, etc. as well as transportation of CLI,
generating call data records (CDRs) for an off line
billing system giving all necessary details of the call
for proper settlement of accounts in a multi-operator
environment and security monitoring functions.
(i) National Long Distance Service Operator
(NLDO): means the telecom operator who
752 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A provides the required digital capacity to carry long
distance telecommunication service within the
scope of license which may include various types
of services such as voice, data, fax, text, video and
multimedia, etc.
B B
(j) Short Distance Charging Centre (SDCC): It is
an Exchange in a Short Distance Charging Area
declared as such for the purpose of charging long
distance trunk calls as defined in the National
Fundamental Plan.
C C
(k) Long Distance Charging Centre (LDCC): It
means a Trunk Exchange in the Long Distance
Charging Area declared as such for the purposes
of charging long distance calls.
D D
(l) TAX: It means Trunk Automatic Exchange.
(m) Billing:It is defined in Clause 6.2.1 of the
Interconnect Agreement. For every STD/ISD calls
originating from the network of the licensee
E E (Reliance) and accepted by BSNL, a detailed billing
record is generated in the LDCC Exchange. For
this purpose the subscribers identity shall be
supplied by the licensee (Reliance) for detailed
billing purpose.
F F
(n) Inter-connect Usage Charges (IUC): IUC is
payable by UASL (Reliance) to BSNL under the
Interconnect Agreement for the calls originating in
the network of UASL and which calls are in turn
handed over to the network of BSNL. IUC includes
G G
termination charge, carriage charge, transit charge
and access deficit charge (ADC) as applicable.
(o) Access Deficit Charge (ADC): The Access Deficit
Charge is an amount given to an operator to
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 753
[S.H. KAPADIA, CJI.]
compensate for the difference between the actual
cost of providing a particular service and the
mandated lower tariff for providing the service to a
class of subscribers, usually rural. ADC is
compensatory in the sense that ADC is meant to
subsidize the rural infrastructural projects of BSNL
by the private service providers who at the relevant
time did not cater to the rural areas. IUC consisted
of carriage, termination and access deficit charges
(see clause 6.4.1).
(iii) Obligations of the UASL Licensees under the
Agreement
13. For the sake of easy understanding, we need to
discuss the above terms in the Agreement in the light of
international call(s) coming to India and not vice-versa.
14. The basic underlying principle of clause 6.4.6 is that
an international call shall remain international right from the point
of origination to the point of termination.
15. At the outset one needs to ascertain the contractual
obligations of the UASL (Reliance in this case) under the
Agreement as modified by the addenda dated 28th February,
2006.
16. Interconnection agreement prescribes terms and
conditions under which two licensees or service providers
interconnect their networks to allow their respective subscribers
to have seamless access to each others networks. It is a
binding contract that binds each contracting party with respect
to interconnection arrangements including commercial,
technical and operational. However, the scope and content of
each such contract may vary. Under the said Agreement, IUC
payments are divided into four heads: (i) originating charges;
(ii) carriage charges; (iii) termination charges; and (iv) ADC
payments. ADC payment, as a concept, is a fee paid by
754 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A cellular, UAS, national long distance and international long
distance subscribers. This payment is in the nature of tax as
no service is rendered in return. ADC payments are to cross
subsidize BSNL for developing its fixed network in non-lucrative
areas. The licensee(s) makes ADC payments based on their
B B adjusted gross revenues. These payments are later on
transferred to BSNL. An IUC charge is, thus, a payment by one
service provider to another for the use of network elements to
originate, transit or terminate calls. BSNL receives ADC
payments for international calls made to fixed numbers. These
C C payments are made by either national long distance licensee(s)
or international long distance licensee(s) that collects them.
BSNL receives ADC payments for all international calls from
cellular and limited mobility numbers. These payments are
collected by ILDOs and given to BSNL. Similarly, ADC
D payments on calls from international roaming subscribers are
D
collected by host service providers and paid to BSNL. ADC
payments for international calls are higher than similar payments
for national long distance or local calls. This has tempted some
licensees to engage in ingenious schemes to avoid making
ADC payments. One such scheme is masking. Call masking
E E takes place when a licensee deliberately alters the identity of
an incoming international call before handing it over to another
service provider at an interconnection point, i.e., POI. The
international calling partys identity is obliterated (i.e.
international CLI is wiped out) and the said international call is
F F made to appear as it were from a domestic/ national number.
This technique enables evasion of ADC payments at enhanced
rates for international calls. Today, all private automated branch
exchanges (PBX) are computerized. It is important to note that
a Caller ID (CID) is a signal. Most subscribers have a caller ID
G G display unit at their residence to receiver caller ID signals which
also indicates the nature of the call whether it is local/ national
or international. As stated, whenever a call for a mobile
subscriber comes from outside the mobile network or vice-
versa, the call is routed through a special kind of gateway switch
H H which is called as GMSC. It serves as an interconnection
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 755
[S.H. KAPADIA, CJI.]
between mobile switching centre and PSTN, which is a
network. However, it is at the POI (point of interconnection) that
the GMSC of the mobile network of UASL gets interconnected
to the GMSC of BSNL by a facility of the interconnection seeker
(which in this case happens to be Reliance). Broadly speaking,
we have two types of POI, namely, international and local POI.
Under the Agreement, UASL agrees to ensure that its
interconnect facilities delivered at each POI conforms to the
specified standards for interconnection and that UASL shall be
responsible to provide, install, test, etc. all such interconnection
facilities on its side of POI. Therefore, every POI has two sides.
Eg. in our case, one side of POI is that of BSNL and the other
side is that of Reliance. The Calling Line Identification (CLI)
means information generated by the network capability which
identifies and forwards the calling number through the
interconnected BSNLs network. Under clause 2.1.13, Trunk
Group is a part of POI. One must keep in mind that the above
aspects are not only technological, they are maintained for
billing and accounting purposes. They generate data(s) in the
form of CDRs and billing records in detail at the International
Gateway Exchange of ILDO (International POI), at the NLDO
Trunk Automatic Exchange of NLDO (National POI) and Local
Telephone Exchange of BSO (Local POI for our understanding).
At each stage, the billing record is generated so that if an UASL
is riding on the network of BSNL, the former has to pay for the
incoming international call in terms of duration, etc. and even
in the case of local calls or national calls which includes the
distance parameter. Under clause 2.1.13, the fully mobile,
limited mobile and fixed services network of UASL shall be
having separate POIs with BSNL, which shall be treated
separately for set up costs, port charges, etc. Under clause
2.1.15.3.3, for the purpose of international call the UASL shall
handover the call to BSNL at the originating Long Distance
Charging Centre (i.e. LDCC TAX). Lastly, under clause 6.4.7,
all the required information shall be submitted in the form of
monthly certificate as prescribed in Schedule I shall be
submitted to BSNL by UASL. It will indicate details of the traffic
756 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A routed other than through BSNL as NLDO/ILDO in respect of
international long distance calls (both incoming and outgoing).
It also indicates procedure for billing and recovery of ADC inter
alia in respect of ISD calls (both incoming and outgoing). This
is relevant also because under clause 2.1.5.2 calls from fully
B B mobile subscribers of other Telecom Service Providers of the
different service area (national roaming) or Other Country
(international roaming) have got to be handed over by UASL
to BSNL on separate trunk groups at the Gateway TAX of
BSNL of that service area. Under clause 2.1.9.2, no by pass
C C of traffic shall be resorted to by any party by delivering the traffic
at any POI other than the specified POI and in case
unauthorized diversion in routing comes to notice, BSNL shall
be free to disconnect that POI in that area. Thus, under the
Agreement if UASL like Reliance receives an international call
at its exchange, its primary duty will be under the contract to
D D
identify it and to forward it to the appropriate trunk group of
BSNL. Now, as alleged if the international call(s) falls on the
local POI of Reliance, the latter is obliged under the contract
to identify the call, whether it is local or national or international,
and accordingly forwards it to the appropriate trunk group of
E E BSNL. For the above reasons, it is also stipulated in clause
2.9.1 (which deals with network integrity and screening) that it
shall be the duty of the UASL to prevent wrong transmission.
In fact, under clauses 2.9.2 and 2.9.3 the establishment of
proper screening function at its Gateway shall be the obligation
F F of the UASL so as to detect signals outside the inter-working
specification of TEC. As a corollary, clause 6.4.6(a) inter alia
provides that calls on non-specified trunk groups (like
international calls landing on the local POIs), if detected, for
which the IUC rate applicable is higher (for example, for
G G international calls the IUC rate is much higher than IUC rates
for local/national calls), then the higher IUC rate would be
applicable for such unauthorized calls. In such a case, BSNL
would be free to charge the UASL the higher IUC for all calls
recorded on these POIs from the date of provisioning of that
H H POI [at Vadodara in this case] or for preceding two months,
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 757
[S.H. KAPADIA, CJI.]
whichever is less. Similarly, under clause 6.4.6(b), if the UASL
masks or disguises the international call as local call that UASL
will have to pay the higher IUC rate meant for international calls
to BSNL from the date of provisioning of that POI or for
preceding two months, whichever is less. Thus, if there is
masking of CLI for the calls generated and forwarded from the
telephone of UASL, then it would be the primary duty of that
UASL to prevent such misuse and failing which BSNL would
be free to invoke clause 6.4.6. It is important to note that clause
6.4.6 restricts the charge to last two preceding months. The
charge under clause 6.4.6 is not dependent upon number of
calls and even the period of misuse of services is restricted to
last two preceding months. Thus, when an international call, as
in this case, lands on the local POI of the UASL it knows the
nature of the call. There is a difference between an international
CLI and the local/national CLI. The billing record of that POI
indicates the nature of the call. It is the contractual obligation
of the UASL to maintain the billing records in detail (including
the CDR and the monthly certificate in the prescribed form).
Further, when the international call(s) lands at the local POI of
the UASL, the incoming traffic bypasses the authorized route
international gateway exchange of BSNL, the NLDO trunk
exchange of NLDO and the local telephone exchange of BSO.
Thus, the defaulting UASL fails to maintain the billing records
(including CDRs at each stage). This results in concealment of
details which results in reduced payment of IUC charges by the
defaulting UASL, thus, giving him the unauthorized benefit of
paying less ADC which was the major component of IUC at the
relevant time and which reduces the cost of providing services
which in turn results in destroying the principle of level playing
which is so important in the regulatory regime because pricing
of the services in the international market plays an important
role. The above modus operandi enables the defaulting UASL
to sell his product (services) abroad at a rate which may be
less as compared to the rates charged by BSNL (who is also
a Competitor Service Provider). The unauthorized call(s) gets
for the defaulting UASL not only more profits by cost reduction,
758 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A he also gets more business at the rates below the competitive
rates. Same is the position in case of masking of international
calls as local calls. In this connection, it is important to note that
when an international call(s) lands on the local POI of the UASL,
the latter knows from the display mechanism at his end (like
B B the subscriber at his end) that call bears the international CLI
and that is the reason for masking. Otherwise one needs no
masking of the CLI. In both the cases i.e. under clauses
6.4.6(a) and 6.4.6(b) the same economic and financial
consequences flows and that is the reason why clause 6.4.6
C C provides for reasonable pre-estimate of damage. There is one
more reason. It is not possible to trace each such unauthorized
call, particularly its nature, as to from which place it originated
and if it was possible the cost of tracing such call(s) may be
much more than actual damage, if ascertainable, and therefore,
D a rough and ready measure is provided in clause 6.4.6 which
D
measure is a reasonable pre-estimate of damage.
(iv) Whether clause 6.4.6 represents penalty or
pre-estimate of reasonable compensation for
the loss?
E E
17. According to Chitty on Contracts whether a provision
is to be treated as a penalty is a matter of construction to be
resolved by asking whether at the time the contract was entered
into the predominant contractual function of the provision was
F F to deter a party from breaking the contract or to compensate
the innocent party for breach. The question to be always asked
is whether the alleged penalty clause can pass muster as a
genuine pre-estimate of loss. (See para 26-126 of Chitty on
Contracts, 30th edition) The fact that damage is difficult to
G assess with precision strengthens the presumption that a sum
G
agreed between the parties represents a genuine attempt to
estimate it and to overcome the difficulties of proof at the trial.
According to the Law of Contract by G.H. Treitel (10th edition),
a clause is penal if it provides for a payment stipulated as in
terrorem of the offending party to force him to perform the
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 759
[S.H. KAPADIA, CJI.]
contract. If, on the other hand, the clause is an attempt to
estimate in advance the loss which will result from the breach,
it is a liquidated damages clause. The question whether a
clause is penal or pre-estimate of damages depends on its
construction and on the surrounding circumstances at the time
of entering into the contract. Lastly, the fact that a sum of money
is payable on breach of contract is described by the contract
as penalty or liquidated damages is relevant but not decisive
as to categorization.
18. Applying the above tests to facts of this case, we find
that the Interconnect Agreement in question should be viewed
in the context of the regulatory regime. In this case, we are
concerned with telecom as a service. This is the most important
circumstance to be considered as one of the main surrounding
circumstances to the Interconnect Agreement. Under the
Interconnect Agreement, the UASL is obliged to maintain the
integrity of its exchange/POI. It is important to note that each
service provider, including BSNL, is a market player/
stakeholder. Each UASL is entitled to a level playing field. The
nature of the call, be it local or national or international, as
indicated by corresponding CLI, is the basis for the levy of IUC
(including ADC). If by wrong routing of calls or by masking the
cost of providing services is reduced, the concerned operator
gets an undue advantage not only in the Indian market over
other competing operators but also in the international market.
Billing is one of the most vital aspects of this case. With
technology, an international call could fall on the local POI but
then the concerned operator is responsible for the identity of
the call. In the case of calls which are correctly routed, the
display screen with the subscriber clearly indicates whether the
call bears international or local/national CLI. Similarly, when the
Gateway Bypass Scam takes place and the international call(s)
lands on the local POI which is not forwarded to the specified
trunk group/POI, there is not only bypassing of International
Gateway/ POI and National POI but also evasion of duty to
maintain billing records in detail at each POIs.
760 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 19. All this results in payment of IUC at a lower rate. All
this leads to reduced cost for the defaulting UASL which
provides not only increase in its profit but also gives it an
advantage in international market vis-a-vis other competitors
(including BSNL) because the defaulting UASL can easily price
B B its product in the international market at a lower rate and in that
sense loss is caused to BSNL. Similarly, as stated above,
masking takes place as international CLI can easily be
identified even when an international call lands on the local POI
of the UASL, hence, the defaulting UASL resorts to masking.
Hence, an international call coming from the masked number
C C
alone cannot be taken into account. Thus, in our view, clauses
6.4.6(a) and 6.4.6(b) provide for pre-estimate of damages. It
is so also for one more reason. The clause, as stated above,
restricts the higher IUC rate made applicable for calls only for
last two preceding months and not for last three years or the
D D
longer period. These time lines is an indicia showing that clause
6.4.6 is not penal but a pre-estimate of reasonable
compensation for the loss foreseen at the time of entering into
the agreement. Lastly, it may be noted that liquidated damages
serve the useful purpose of avoiding litigation and promoting
E E commercial certainty and, therefore, the court should not be
astute to categorize as penalties the clauses described as
liquidated damages. This principle is relevant to regulatory
regimes. It is important to bear in mind that while categorizing
damages as penal or liquidated damages, one must keep
F F in mind the concept of pricing of these contracts and the level
playing field provided to the operators because it is on costing
and pricing that the loss to BSNL is measured and, therefore,
all calls during the relevant period have to be seen. [See
Communications Law in India by Vikram Raghavan at page
G G 639]. Since clause 6.4.6 represents pre-estimate of reasonable
compensation, Section 74 of the Contract Act is not violated.
Thus, it is not necessary to discuss various judgments of this
Court under Section 74 of the Contract Act.
H H
 B.S.N.L. v. RELIANCE COMMUNICATION LTD. 761
[S.H. KAPADIA, CJI.]
Conclusion
20. We need to clarify that in this case our judgment is
restricted only to the interpretation of clause 6.4.6 of the
Interconnect Agreement read with the Addenda. As stated
above, we have held that clause 6.4.6 represents pre-estimate
of reasonable compensation for the loss suffered by BSNL.
Thus, we set aside the impugned judgment and remit the matter
to TDSAT to decide the matter de novo in accordance with the
law laid down hereinabove. However, we need to highlight one
aspect. In the letter dated 13th October, 2004 addressed by
BSNL to Reliance, it has been alleged that the calls have
landed at the POIs of M/s. Reliance Infocomm. Ltd. at
Karellbaug, Panigate, Alkapuri, Makarpura, Padra, Dabhoi and
Miyagam exchanges in Vadodara SSA. The said letter
highlights one more important aspect. It is alleged that the
number 2813041000 was an unallocated number with Reliance
during the relevant period. This aspect needs to be examined
by TDSAT on facts.
21. Accordingly, the civil appeal is allowed with no order
as to costs.
N.J. Appeal allowed.
[2010] 15 (ADDL.) S.C.R. 762
A A GHANSHYAM SHARMA AND ORS.
v.
STATE OF RAJASTHAN AND ORS.
(Civil Appeal No.4935 of 2006)
DECEMBER 1, 2010
B B
[R.V. RAVEENDRAN AND DR. MUKUNDAKAM
SHARMA, JJ.]
Service Law Seniority Rajasthan Secretariat
C C Ministerial Service Rules, 1970 Rule 5, Proviso (5A) Post
of stenographer Claim of Lower Division Clerks(LDCs)/
Upper Division Clerks(UDCs), who were appointed as regular
Stenographers (special promotees) on 25-4-1992, under
proviso (5A) to Rule 5, for retrospective appointment from
D D 1978-1979 when they were initially appointed on ad hoc basis
Consequential seniority dispute between the special
promotees and directly recruited stenographers Held: The
High Court proceeded erroneously in assuming that the
retrospective appointment of LDCs/UDCs under proviso (5A)
E was valid as if it was with effect from 1-4-1985 Proviso (5A)
did not contemplate or provide for or authorize retrospective
appointment thereunder Therefore, the decision of High
Court insofar as it held that retrospective appointment could
be made with effect from 1-4-1985, set aside Appointment
F of the special promotees as stenographers on 25-4-1992 was
prospective and not with effect from any previous date.
The instant appeals related to the claim of the Lower
Division Clerks/Upper Division Clerks, who were
appointed as regular Stenographers (special promotees)
G on 25.4.1992, under proviso (5A) to Rule 5 of the
Rajasthan Secretariat Ministerial Service Rules, 1970, for
retrospective appointment from 1978-1979 when they
were initially appointed on ad hoc basis and the
H 762
 GHANSHYAM SHARMA AND ORS. v. STATE OF 763
RAJASTHAN AND ORS.
consequential seniority dispute between them and the
directly recruited stenographers.
The questions which arose for consideration of the
Court were: (i) Whether the special promotees who were
appointed on 24.5.1992 under proviso (5A) to Rule 5
ought to have been appointed with retrospective effect
from the years 1978 and 1979 when they were appointed
on ad hoc basis with special pay (as claimed by the
promotees) or (ii)Whether the appointment of special
promotees under proviso (5A), could be only prospective
from the date of their appointment (25.4.1992) and not
from any retrospective date, (as contended by the Direct
Recruits) or (iii)Whether the orders making the LDCs/
UDCs appointed as stenographers on 25.4.1992
permanent in the post of stenographers with effect from
1.4.1985 was valid and did not call for interference.
Disposing of the appeals, the Court
HELD:1. The special promotees who were earlier
working as LDCs and UDCs were assigned to work
against sanctioned vacant posts of stenographers on ad
hoc basis in the year 1978-79 to 1981-82 pending regular
recruitment by granting them a special pay of Rs.30/-.
When they were so required to work as stenographers
on ad hoc basis with special pay of Rs.30/- in the years
1978 and 1979, proviso (5A) to Rule 5 of the Rajasthan
Secretariat Ministerial Service Rules, 1970, was
inapplicable to them, as at that time, proviso (5A)
empowered the appointing authority to make substantive
appointment to the post of stenographers against
available vacancies, only from among those who were
holding the post of stenographers either in temporary or
ad hoc capacity in the Rajasthan Secretariat on or before
31.7.1977. As none of the 22 special promotees was
holding the post of ad hoc stenographers on 31.7.1977
and all were appointed as ad-hoc stenographers only
764 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A between 17.3.1978 and 5.5.1979, they could not be
considered under proviso (5A) for appointment on regular
basis. As they were required to work as stenographers
purely on ad hoc basis from the years 1978 and 1979,
pending regular recruitment and the regular recruitment
B B was in fact done by the Public Service Commission in
pursuance of advertisement dated 29.2.1980, they were
all reverted from the post of ad-hoc stenographers to their
original positions as LDCs and UDCs in the years 1981-
82. These 22 special promotees who were working as ad-
C C hoc stenographers in 1980, applied for direct recruitment
against the advertisement dated 29.2.1980, but none of
them was successful in the examinations and
consequently were not appointed against the direct
recruitment vacancies filled by RPSC. Significantly, none
of the said 22 LDCs/UDCs working as ad-hoc
D D
stenographers who were reverted back as LDCs/UDCs
in 1981-82 challenged their reversion and their reversion
attained finality. [Para 15] [777-A-G]
2. Only when proviso (5A) to Rule 5 was further
E E amended on 23.1.1985, by changing the cut off date as
23.5.1979 instead of 31.7.1977, the special promotees
became eligible for being considered for substantive
appointment to the post of stenographers under proviso
(5A). But proviso (5A) did not create a right in those who
F F were working as ad-hoc/temporary stenographers on or
before 23.5.1979 for consideration and appointment. The
appointment to the post of stenographers was 50% by
direct recruitment and 50% by promotion from amongst
LDCs and UDCs. Proviso (5A) merely enabled the
G G appointing authority, if he so desired or found it
necessary to make substantive appointment as
stenographer, anyone who was working as ad hoc/
temporary stenographer in the Rajasthan Secretariat on
or before 23.5.1979, subject to fulfillment of three
H H conditions : (i) that there were vacancies in the post of
 GHANSHYAM SHARMA AND ORS. v. STATE OF 765
RAJASTHAN AND ORS.
stenographers; (ii) that the appointing authority found
that the work of such temporary or ad hoc stenographer
was satisfactory; and (iii) that the ad hoc/temporary
stenographer possessed the required qualifications on
the date when he was considered for such substantive
appointment. Proviso (5A) starts with the words that
nothing in these rules shall preclude the appointing
authority for making substantive appointment to the post
of stenographer. This shows that proviso (5A) is purely
an enabling provision which gives the option or liberty
to the appointment authority to fill any vacant post of
stenographer by making a substantive appointment of a
person who had worked as ad-hoc/temporary
stenographer on or before 23.5.1979 and possessed the
prescribed qualification at the time of substantive
appointment. [Para 16] [777-H; 778-A-E]
3. In the impugned order, the division bench of the
High Court proceeded erroneously in assuming that the
retrospective appointment of 22 LDCs/UDCs under
proviso (5A) was valid if it was with effect from 1.4.1985.
On a careful consideration of the wording of proviso (5A),
it is clear that it does not contemplate or provide for or
authorize retrospective appointment thereunder.
Therefore, the decision of the Division Bench of the High
Court insofar as it holds that the retrospective
appointment could be made with effect from 1.4.1985, is
set aside. In view of the above, the Civil Appeal filed by
the special promotees is dismissed and Civil Appeal filed
by the direct recruits is allowed with declaration that the
appointment of the special promotees as stenographers
on 25.4.1992 was prospective with effect from that date
and not with effect from any previous date (either in 1978-
79 or from 1.4.1985). The State Government is directed to
draw the revised seniority list accordingly. [Paras 18, 19]
[779-E-H]
766 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A CIVIL APPELLATE JURSIDICTION : Civil Appeal No.
4935 of 2006.
From the Judgment & Order dated 19.01.2005 of the High
Court of Judicature for Rajasthan at Jaipur in D.B. Civil Special
B Appeal (W) No. 454 of 2003 (in SBCWP No. 2930 of 1995)
B
and D.B. Civil Special Appeal (W) No. 1039 of 2002 (in
SBCWP No. 4663 of 1996.
WITH
C C C.A. Nos. 4936, 4937 & 4938 of 2006.
M.R. Calla, Ranjeeta Rohtagi, Somnadri Gaud (for Parekh
& Co.) Sushil Kumar Jain, B.K. Satija, Puneet Jain, Ashwin,
Pratibha Jain, Madhurima Tatia, S.P. Sharma, A. Mishra, N.
Annapoorani, Aruneshwar Gupta, Ranjeeta Rohtagi for the
D D appearing parties.
The Judgment of the Court was delivered by
R.V.RAVEENDRAN, J.
E E CIVIL APPEAL NOs, 4935/2006 and 4936/2006.
1. These appeals relate to the claim of the Lower Division
Clerks/Upper Division Clerks, who were appointed as regular
Stenographers (referred to as special promotees) on
F F 25.4.1992, under proviso (5A) to Rule 5 of the Rajasthan
Secretariat Ministerial Service Rules, 1970 (for short the rules),
for retrospective appointment from 1978-1979 and the
consequential seniority dispute between them and the directly
recruited stenographers. The appellants in CA 4935/2006 are
G G the special promotees. The appellants in CA No.4936/2006 are
the direct recruits.
2. Rule 5 of the Rules related to method of recruitment and
provided that recruitment to the service after the
H H
 GHANSHYAM SHARMA AND ORS. v. STATE OF 767
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
commencement of the rules shall be made by the following
methods:-
(a) direct recruitment as laid down in column No.3 of
the Schedule I in accordance with Part IV of the
Rules;
(b) promotion as laid down in column No.3 of the
Schedule
I in accordance with Part V of the Rules.
Entry (3) in Schedule I related to the post of Stenographers. The
third column of the said Entry showed the sources of
recruitment with percentages as follows:
50% by direct recruitment and 50% from amongst Lower
Division Clerks and Upper Division Clerks of the Rajasthan
Secretariat according to proviso (5) of Rule 5.
Proviso (5) to Rule 5 (referred in Entry (3) of Schedule I) read
as follows:
that recruitment to fill 50% of the vacancies of
Stenographers in a particular period of recruitment shall
be made by selection from amongst such of the Lower
Division Clerks/Upper Division Clerks of the Secretariat
who have passed the qualifying examination prescribed for
the Stenographers in these Rules subject to availability of
such persons;
their selection shall, notwithstanding anything contained in
Part V of these Rules, be deemed to be promotion with
effect from the date of their selection. If in any year, the
requisite number of such candidates is not available the
remaining vacancies shall also be filled by direct
recruitment through competitive examination according to
the procedure laid down in Part IV.
768 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 3. Proviso (5A) was introduced in the Rules by way of
amendment to Rule 5, vide notification dated 15.3.1978 and
read as follows:
(5A) that nothing in these Rules shall preclude the
appointing authority from making substantive appointment
B B
to the posts of stenographer subject to the availability of
the vacancies from amongst the persons who were holding
the post of stenographer or steno typist either in temporary
or a hoc capacity in the Rajasthan Secretariat on 5.5.1970
or 15.9.1972 and whose work is found satisfactory by the
C C
appointing authority and who held either of the following
qualifications and experience on such date
(a) Graduate from a University established by Law in India
with Shorthand as one of the subject or holder of a diploma
D D in Shorthand; or
(b) Passed the Higher Secondary Examination from the
Rajasthan Board of Secondary Education or an equivalent
examination with Shorthand as one of the subjects and
must have put in two years service as Stenographer or
E E
Steno typist excluding breaks, if any; or
(c) Those Stenographers or Steno typists who have put in
two years service as such on 15.9.1972 in the Rajasthan
Secretariat excluding breaks, if any and who are certified
F F by the Appointing Authority to have worked satisfactorily
and have also passed competitive examination mentioned
in Part II of Schedule II either in English Shorthand or Hindi
Shorthand apart from passing the English and Hindi
typewriting tests. x x x
G G
By Government order dated 19.6.1978 the existing Lower
Division Clerks/Upper Division Clerks who were working or
required to work against the sanctioned post of Stenographers
on purely ad-hoc basis were allowed special pay of Rs.30 per
H H
 GHANSHYAM SHARMA AND ORS. v. STATE OF 769
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
month, provided they possessed one of the following
qualifications either in English or Hindi:
(i) pass in Higher Secondary Examination or degree of a
University established under law with Stenography as one
of the subjects.
(ii) pass in the examination in stenography held by the HCM
State Institute of Public Administration or Bhasha Vibhag.
(iii) a diploma in stenography from Industrial Training
Institute.
(iv) completion of training organized by the Organization
& Method Department and also passing the test, if any,
held by the Organization & Method Department.
The grant of special pay was further subject to the following
conditions:-
(i) The appointing authority certifies in the order
sanctioning special pay to the effect that Stenographer
regularly recruited through Rajasthan Public Service
Commission is not available.
(ii) The special pay shall be granted to the lower division
clerk till a Stenographer recruited through Rajasthan Public
Service Commission is not made available in the
Department.
4. Proviso (5A) was amended several times postponing
the cut off date. The said proviso as amended on 23.5.1979
reads as follows:
(5A) that nothing in these Rules shall preclude the
appointing authority from making substantive appointment
to the post of Stenographer or the steno-typist, as the case
may be, subject to the availability of vacancies from
amongst the persons who were holding the post of
770 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Stenographer either in temporary or ad hoc capacity in the
Rajasthan Secretariat on or before 31.7.1977 and whose
work is found satisfactory by the appointing authority and
who fulfilled either of the following qualifications on such
dates. x x x x
B B
Proviso (5A) was again amended on 23.1.1985 and the
proviso as amended read as follows:
(5A) that nothing in these Rules shall preclude the
appointing authority from making substantive appointment
C C to the post of Stenographer or the steno-typist, as the case
may be, subject to the availability of vacancies from
amongst the persons who were holding the post of
Stenographer either in temporary or ad hoc capacity in the
Rajasthan Secretariat on or before 23.5.1979 and whose
D D work is found satisfactory by the appointing authority and
who fulfilled either of the following qualifications on such
date. x x x x
Proviso (5A) was thereafter amended on 18.9.1987, the
E amendment being deemed to have been made with effect from
E
23.1.1985. The amended proviso (5A) read as under :
(5A) that nothing in these Rules shall preclude the
appointing authority from making substantive appointment
to the post of Stenographer or the steno-typist, as the case
F F may be, subject to the availability of vacancies from
amongst the persons who were holding the post of
Stenographer either in temporary or ad hoc capacity in the
Rajasthan Secretariat on or before 23.5.1979 and also
continuously holding the post on 23.1.1985 and whose
G G work is found satisfactory by the appointing authority and
who fulfilled either of the following qualifications on such
date. x x x x
5. Due to shortage of Stenographers in the Secretariat
Service, the special promotees, who were working as LDCs/
H H
 GHANSHYAM SHARMA AND ORS. v. STATE OF 771
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
UDCs, were appointed as Stenographers on ad hoc basis, on
various dates between 17.3.1978 and 5.5.1979, and were paid
the special pay of Rs.30 per month from 19.6.1978 onwards.
On 29.2.1980, Rajasthan Public Service Commission (RPSC
for short) invited applications for 86 posts of stenographers.
After conducting an examination, RPSC appointed several
stenographers by way of direct recruitment. The special
promotees, who were then working as ad-hoc stenographers,
applied in response to the said advertisement and participated
in the examination, but were not successful and were not
selected. As and when the directly recruited stenographers
were given postings, the special promotees working as ad-hoc
stenographers were reverted from the post of Stenographers
to their substantive posts as LDCs/UDCs in the years 1981
and 1982.
6. When proviso (5A) was amended on 23.1.1985
providing that persons who were holding the post of
Stenographer either in temporary or adhoc capacity in
Rajasthan Secretariat on or before 23.5.1979 could be
appointed on substantive basis, the special promotees (who
had been reverted as LDCs/UDCs in 1981-82) expected that
they will be considered for substantive appointment as
Stenographers, as they fulfilled the requirements proviso (5A).
But when proviso (5A) was further amended on 18.9.1987
clarifying that only those who were working as Stenographers
on or before 23.5.1979 and who continued to hold the post as
on 23.1.1985, were eligible for consideration under proviso
(5A), they felt that their right to be considered for appointment
as Stenographers on substantive basis was taken away, as
they were not working as ad-hoc stenographers upto 23.1.1985
though they were holding the post of Stenographer on adhoc
basis on 23.5.1979. Therefore some of the special promotees
approached the Rajasthan High Court and filed WP No.2116/
1989 challenging the amendment dated 18.9.1987 to proviso
(5A) to Rule 5 of the Rules. The said writ petition was allowed
by a Division Bench of the Rajasthan High Court on 7.8.1991
772 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A striking down the amendment dated 18.9.1987 to proviso (5A)
as being unconstitutional. As a consequence, the High Court
directed the State Government to consider the writ petitioners
(promotees) who were working as LDCs/UDCs for substantive
appointment as Stenographers in accordance with the Rules,
B B as amended on 23.1.1985 and if as a result of such
consideration, they were found suitable, they should be
appointed as Stenographers with consequential benefits.
7. In pursuance of the said order dated 7.8.1991, the State
Government by order dated 25.4.1992 appointed 27 LDCs/
C C
UDCs (who were working as steno-typists as on 23.5.1979 on
special pay of Rs.30 per month), to the post of steno-typists
under proviso (5A) to Rule 5 as amended by notification dated
23.1.1985, with a note that separate orders will be issued in
regard to their seniority and other benefits. By another order
D D dated 25.7.1994, it was noted that two of appointees had opted
to continue in their original position; and that the remaining 25
candidates appointed on 25.4.1992 would be considered as
regularly appointed to the post of Stenographer with effect from
1.4.1985 and they will be entitled to notional fixation of salary
E E from 1.4.1985 to the date of taking over charge. It was further
provided that the seniority of the said 25 employees shall be
fixed in accordance with Rule 29 of the Rules and they shall
be placed below the persons selected by the RPSC in 1980
and above the persons selected by RPSC in the year 1985.
F F This was followed by another order dated 15.11.1995 making
22 of the promotees (including the appellants in CA No. 4935/
2006) permanent on the post of stenographers with effect from
1.4.1985.
G 8. The order dated 15.11.1995 gave rise to the following
G
two writ petitions:-
(i) Civil Writ petition No. 2930/1995 by the 22 special
promotees praying that their appointment to the post of
Stenographers should be made from the respective dates of
H H their initial appointment in the year 1978-1979 against vacant
 GHANSHYAM SHARMA AND ORS. v. STATE OF 773
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
posts as per proviso (5A) to Rule 5 (instead of 1.4.1985) and
they should be assigned seniority with effect from such dates
with all consequential benefits;
(ii) Civil Writ Petition No. 4663/1996 by four directly
recruited stenographers (appellants in CA No.4936/2006)
seeking quashing of the notification dated 23.1.1985 amending
proviso (5A), and the order dated 15.11.1995 by which 22
special promotees were made permanent in the post of
stenographers with effect from 1.4.1985. They also sought
drawing up of a seniority list of the Stenographers afresh after
placing them above those persons whose names were shown
in the seniority list dated 15.11.1995.
9. A learned Single Judge by order dated 21.10.2002
allowed C.W.P. No. 2930/1995 filed by the special promotees
and dismissed C.W.P. No. 4663/1996 filed by the direct
recruits. He directed the State Government to implement the
order dated 7.8.1991 in CWP No.2116/1989 and promote the
clerks who were appointed in 1978 or 1979 temporarily or on
ad-hoc basis, as Stenographers from the date of their initial
appointment in 1978 and 1979 against vacant substantive posts
and assign seniority to them as Stenographers from the
respective dates of initial appointments in 1978 and 1979.
10. The said order dated 21.10.2002 in CWP No.2930/
1995 was challenged in following three special appeals:- (i)
CSA No. 1038/2002 by the four direct recruit stenographers;
(ii) CSA No. 79/2003 by the State of Rajasthan; and (iii) CSA
No. 454/2003 by other direct recruits (Govind Ram Ailani and
others). The four direct recruits (appellants in CA No.4936/
2006) also filed CSA No. 1039/2002 against the dismissal of
WP No.4663/1996. All these four appeals were disposed of
by the impugned common judgment dated 19.1.2005 by a
Division Bench of the Rajasthan High Court. The division bench
held that the special promotees who were appointed as
Stenographers after 1.4.1985, that is in the year 1992 were not
entitled to seniority from 1978 and 1979, as no vacancies were
774 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A available after the direct recruitment in 1981. Therefore the
division bench directed the State Government as follows: (a)
to assign seniority to the direct recruits from the respective
dates of their appointment; (b) not to assign special promotees
appointed as Stenographers in the year 1992 under proviso
B B (5A), seniority prior to 1.4.1985; and (c) if any directly recruited
stenographer was selected and appointed after 1.4.1985 will
be junior to the special promotees appointed under proviso
(5A) with effect from 1.4.1985.
11. The said order of the division bench dated 19.1.2005
C C
is challenged in these appeals as stated above.
11.1. Civil Appeal No.4935/2006 is filed by the special
promotees aggrieved by the finding that stenographers who
have selected and appointed under proviso (5A) in 1992 could
D D not be treated as having been appointed prior to 1.4.1985 and
that they will be senior only to the direct recruits who were
selected and appointed after 1.4.1985. The special promotees
submitted that they were not claiming any monetary benefit on
the basis of their ad hoc service, but were only claiming that
E E they were entitled to be appointed on regular basis from the
date of their initial ad hoc or temporary appointment having
regard to proviso (5A) to Rule 5, as the object of the said
proviso was to absorb all LDCs/UDCs who were appointed as
stenographers on ad-hoc basis into substantive vacancies, as
F F regular stenographers from the date they were appointed on
ad hoc basis.
11.2. Civil Appeal No.4936/2006 is filed by the four direct
recruits who were selected in 1981, 1985 and 1989. They are
aggrieved by the decision of the Division Bench that the
G G special promotees are entitled to seniority with effect from
1.4.1985. They contend that the wording of proviso (5A) to Rule
5 does not authorize or enable retrospective appointments; they
contended that proviso (5A) did not provide for retrospective
appointment; that the said proviso only enabled the appointing
H H authority to appoint prospectively to existing vacant posts,
 GHANSHYAM SHARMA AND ORS. v. STATE OF 775
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
persons who were working as Stenographers either on
temporary or ad hoc basis and whose services were
satisfactory and who possessed the prescribed qualifications;
and that as appointments were made on 25.4.1992 it could be
effective only from 25.4.1992 and not from any earlier date.
They contended that as all of them were appointed as direct
recruits prior to 1992, (that is in the years 1981, 1985 and
1989), they had to be treated as senior to the 22 special
promotees who were appointed on 25.4.1992.
12. Therefore, the questions that arise for our consideration
are :
(i) Whether the special promotees who were appointed on
24.5.1992 under proviso (5A) to Rule 5 in pursuance of
the decision of the High Court dated 7.8.1991 ought to
have been appointed with retrospective effect from the
years 1978 and 1979 when they were appointed on ad
hoc basis with special pay (as claimed by the promotees)?
Or
(ii) Whether the appointment of special promotees under
proviso (5A), could be only prospective from the date of
their appointment (25.4.1992) and not from any
retrospective date, (as contended by the Direct Recruits)
?
Or
(iii) Whether the orders dated 15.11.1995 making the
LDCs/UDCs appointed as stenographers on 25.4.1992
permanent in the post of stenographers with effect from
1.4.1985 is valid and does not call for interference?
13. The order dated 7.8.1991 in CWP No. 2116/1989
attained finality as challenge thereto was rejected by this Court
on 9.12.1991. The issue decided by the High Court in order
dated 7.8.1991 was that the amendment dated 19.9.1987 to
776 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A proviso (5A) adding the words and also continuously holding
the post on 23.1.1985 was invalid and consequently the said
addition was quashed. Therefore we have to proceed on the
basis that proviso (5A) should be read without the 1987
amendment, that is as follows:
B B
(5A) that nothing in these Rules shall preclude the
appointing authority from making substantive appointment
to the post of Stenographer or the steno-typist, as the case
may be, subject to the availability of vacancies from
amongst the persons who were holding the post of
C C
Stenographer either in temporary or ad hoc capacity in the
Rajasthan Secretariat on or before 23.5.1979 and whose
work is found satisfactory by the appointing authority and
who fulfilled either of the following qualifications on such
date. ..
D D
Proviso (5A) gives a clear indication that it could be
invoked only in regard to temporary or ad-hoc stenographers
who were working as such on the date of consideration under
the said proviso in addition to the requirement that they should
E E have held such temporary or ad-hoc position on or before
23.5.1979. This is because proviso (5A) uses the expression
whose work is found satisfactory and not whose work was
found to be satisfactory. As the order dated 7.8.1991 of the
High Court had attained finality, we do not propose to disturb
F F the validity of appointment of the special promotees under
order dated 25.4.1992, even though their eligibility was doubtful
as they had ceased to hold such temporary or ad-hoc position
from 1981-82. Be that as it may.
14. The order of the High Court dated 7.8.1991 was
G G construed by the State Government as directing consideration
of the special promotees for substantive appointment as
stenographers, if they were in service on or before 23.5.1979
and their work was satisfactory and they possessed the
qualifications prescribed in that proviso.
H H
 GHANSHYAM SHARMA AND ORS. v. STATE OF 777
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
15. The special promotees who were earlier working as
LDCs and UDCs were assigned to work against sanctioned
vacant posts of stenographers on ad hoc basis in the year
1978-79 to 1981-82 pending regular recruitment by granting
them a special pay of Rs.30/-. When they were so required to
work as stenographers on ad hoc basis with special pay of
Rs.30/- in the years 1978 and 1979, proviso (5A) to Rule 5 was
inapplicable to them, as at that time, proviso (5A) empowered
the appointing authority to make substantive appointment to the
post of stenographers against available vacancies, only from
among those who were holding the post of stenographers either
in temporary or ad hoc capacity in the Rajasthan Secretariat
on or before 31.7.1977. As none of the 22 special promotees
was holding the post of ad hoc stenographers on 31.7.1977
and all were appointed as ad-hoc stenographers only between
17.3.1978 and 5.5.1979, they could not be considered under
proviso (5A) for appointment on regular basis. As they were
required to work as stenographers purely on ad hoc basis from
the years 1978 and 1979, pending regular recruitment and the
regular recruitment was in fact done by the Public Service
Commission in pursuance of advertisement dated 29.2.1980,
they were all reverted from the post of ad-hoc stenographers
to their original positions as LDCs and UDCs in the years
1981-82. As noticed above these 22 special promotees who
were working as ad-hoc stenographers in 1980, applied for
direct recruitment against the advertisement dated 29.2.1980,
but none of them was successful in the examinations and
consequently were not appointed against the direct recruitment
vacancies filled by RPSC. Significantly, none of the said 22
LDCs/UDCs working as ad-hoc stenographers who were
reverted back as LDCs/UDCs in 1981-82 challenged their
reversion and their reversion attained finality.
16. Only when proviso (5A) to Rule 5 was further amended
on 23.1.1985, by changing the cut off date as 23.5.1979
instead of 31.7.1977, the special promotees became eligible
for being considered for substantive appointment to the post
778 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A of stenographers under proviso (5A). But proviso (5A) did not
create a right in those who were working as ad-hoc/temporary
stenographers on or before 23.5.1979 for consideration and
appointment. As noticed above, the appointment to the post of
stenographers was 50% by direct recruitment and 50% by
B B promotion from amongst LDCs and UDCs. Proviso (5A)
merely enabled the appointing authority, if he so desired or
found it necessary to make substantive appointment as
stenographer, anyone who was working as ad hoc/temporary
stenographer in the Rajasthan Secretariat on or before
C C 23.5.1979, subject to fulfillment of three conditions : (i) that there
were vacancies in the post of stenographers; (ii) that the
appointing authority found that the work of such temporary or
ad hoc stenographer was satisfactory; and (iii) that the ad hoc/
temporary stenographer possessed the required qualifications
on the date when he was considered for such substantive
D D
appointment. Proviso (5A) starts with the words that nothing
in these rules shall preclude the appointing authority for making
substantive appointment to the post of stenographer. This
shows that proviso (5A) is purely an enabling provision which
gives the option or liberty to the appointment authority to fill any
E E vacant post of stenographer by making a substantive
appointment of a person who had worked as ad-hoc/temporary
stenographer on or before 23.5.1979 and possessed the
prescribed qualification at the time of substantive appointment.
F F 17. When the Division Bench of the High Court by order
dated 7.8.1991 held that the amendment to proviso (5A) on
18.9.1987 was invalid, it only meant that the option or liberty
became available to the appointing authority in terms of the said
proviso as it stood before the amendment dated 18.9.1987 and
G G that the requirement added by the said amendment that the ad
hoc/temporary stenographer should also be continuously
working till 23.1.1985 was deleted. The said order dated
7.8.1991 of the High Court by no stretch of imagination could
be construed as mandating the appointing authority to consider
H H all LDCs and UDCs who were working as ad hoc/temporary
 GHANSHYAM SHARMA AND ORS. v. STATE OF 779
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
stenographers on or before 23.5.1979 for being regularly
appointed as stenographers on substantive basis, even if they
had ceased to hold such position in 1981-82. The regular
appointments by way of promotion from amongst LDCs and
UDCs was to be made in the normal course as per proviso (5)
and not under proviso (5A). Proviso (5A) gave an additional
option to the appointing authority to fill any vacancy in the post
of stenographers by making substantive appointment as special
cases or to meet unforeseen contingencies or to meet urgent
requirements. This obviously means that the power under
proviso (5A) could only be exercised with reference to the
current needs and requirements when the consideration under
proviso (5A) takes place and not with any retrospective effect.
18. Therefore, any appointment under proviso (5A) could
be only by way of current appointment with prospective effect.
The order dated 7.8.1991 could not be construed as directing
otherwise. In the impugned order, the division bench of the High
Court proceeded erroneously in assuming that the retrospective
appointment of 22 LDCs/UDCs under proviso (5A) was valid
if it was with effect from 1.4.1985. On a careful consideration
of the wording of proviso (5A), we are of the view that it does
not contemplate or provide for or authorize retrospective
appointment thereunder. Therefore, we accept the contention
of the direct recruits, reject the contention of the special
promotees and set aside the decision of the Division Bench
of the High Court insofar as it holds that the retrospective
appointment could be made with effect from 1.4.1985.
19. In view of the above, we dismiss Civil Appeal No.4935
of 2006 filed by the special promotees and allow Civil Appeal
No.4936 of 2006 and declare that the appointment of the
special promotees as stenographers on 25.4.1992 was
prospective with effect from that date and not with effect from
any previous date (either in 1978-79 or from 1.4.1985). We
direct the State Government to draw the revised seniority list
accordingly.
780 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Re : Civil Appeal Nos. 4937 and 4938 of 2006.
20. The appellant in CA No.4937 of 2006 was initially
appointed as an LDC. By order dated 23.11.1972, he was
appointed as an ad hoc Stenographer in the Education
Department. He was taken on transfer, on the post of
B B
Stenographer in the Secretariat, temporarily, continuing his lien
on his post in the parent department, vide order dated 7.3.1977
and he joined the Secretariat on 23.3.1977. His appointment
as Stenographer was made substantive with effect from
15.3.1978 in his parent (Education) department on 3.7.1979.
C C By an order dated 19.10.1981 made under proviso (5A), his
appointment on the post of Stenographer in the Secretariat was
made substantive with effect from 23.5.1979.
21. The appellants in CA No.4938 of 2006 were initially
D D appointed as LDCs. They were appointed as ad hoc
Stenographers on 4.4.1977, 4.4.1977 and 11.4.1977. They
were extended special pay by order dated 7.7.1978. They were
appointed as regular stenographers with effect from the date
of their initial appointment as stenographers, vide order dated
E E 16.11.1981, under proviso (5A).
22. One Kripa Shankar Sharma who was directly recruited
as a Stenographer in the Secretariat on 7.2.1981 and
confirmed with effect from 25.8.1983 filed a writ petition (CWP
No.1433 of 1983) for the following reliefs :
F F
(a) The notification dated 23.5.1979 which amended
proviso (5A) by substituting the date 31.7.1977 in
place of the dates 5.5.1970 or 15.9.1972 and the
subsequent notification dated 9.6.1983 by which the
G G date 31.7.1977 was substituted as 14.3.1978 in
proviso (5A) were invalid.
(b) For a declaration that the order dated 16.11.1981
by which the State Government appointed the six
persons (including appellants 1 to 3 in CA No.4938/
H H
 GHANSHYAM SHARMA AND ORS. v. STATE OF 781
RAJASTHAN AND ORS. [R.V. RAVEENDRAN, J.]
2006) as stenographers on regular basis from the
date on which they were initially performing the
duties as stenographers on ad hoc basis and the
subsequent show cause notice dated 15.12.1981
proposing to confirm them in the post of
stenographers with effect from 23.5.1979 and
inviting objections to the said proposal from
affected persons were invalid.
(c) For a declaration that the substantive appointment
of ad hoc/temporary stenographers under proviso
(5A) was null and void and that consequently they
should be declared as ineligible for appearing in the
Personal Assistant examination.
He contended that he was senior to the appellants in C.A.
No.4938 of 2006 as their appointments as stenographers
under Proviso (5A) was by order dated 16.11.1981, whereas
he was directly appointed as stenographer on 7.2.1981. The
said writ petition was dismissed by a learned single Judge, by
order dated 30.11.1999. The special appeal filed by the said
Kripa Shankar Sharma against the said decision of the learned
Single Judge was allowed by a Division Bench by the
impugned order dated 17.5.2005 in terms of the order dated
19.1.2005 which is challenged by the stenographers appointed
under proviso (5A) in Civil Appeal Nos.4937 and 4938 of 2006.
23. The appellants in C.A. No.4938/2006 submitted that
their cases were different from the cases of special promotees
considered in CA Nos.4935 & 4936/2006. It is pointed out that
the ad hoc appointment of the special promotees in 1978-79
had come to an end in 1981-82 when they were reverted as
LDCs/UDCs and they were not working as stenographers when
they were appointed. On the other hand, the appellants in CA
No.4938/2006 were working as ad hoc stenos both on
23.5.1979 and on 16.11.1981 when the order under proviso
(5A) was made. On careful consideration, we find that the said
782 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A distinction has no relevance to the issue on hand which is
whether the appointment under proviso (5A) could be with
retrospective effect. As seen from the facts narrated, our
decision in Civil Appeal Nos.4935 and 4936 of 2006 that the
appointment under proviso (5A) could not be retrospective will
B B apply to Civil Appeal No.4938 of 2006.
24. The position of the appellant in Civil Appeal No.4937
of 2006 is however different. His appointment as stenographer
was made substantive in his parent department with effect from
15.3.1978. By order dated 19.10.1981, his appointment was
C C
made substantive in the Secretariat with effect from 23.5.1979,
by which date he was a stenographer on substantive basis in
his parent department. More importantly, the order dated
19.10.1981 under proviso (5A), appointing him as stenographer
on substantive basis in the Secretariat was not challenged by
D D Kripa Shankar Sharma in his writ petition (WP No.1433 of
1983). He challenged only the order dated 16.11.1981 under
proviso (5A) relating to the appellants in CA No.4938 of 2006.
Though Kripa Shankar Sharma had impleaded the appellant
in Civil Appeal No.4937 of 2006 as the sixth respondent in his
E E writ petition, as Kripa Shankar Sharma had failed to challenge
the order dated 19.10.1981 under proviso (5A) made in his
case, no relief could have been granted against the appellant
in C.A.No.4937 of 2006.
F F 25. In view of the above, following the decision in Civil
Appeal Nos.4935 and 4936 of 2006, we dismiss the Civil
Appeal No.4938 of 2006. However, Civil Appeal No.4937 of
2006 is allowed and the orders of the learned Single Judge and
the Division Bench of the High Court are set aside and the Writ
Petition No.1433 of 1983 is dismissed in so far as the appellant
G G
in CA No.4937 of 2006 (Hariharan Nair).
B.B.B. Appeals disposed of.
H
 [2010] 15 (ADDL.) S.C.R. 783
I.A. NOS.2609-2610 OF 2009
IN
Writ Petition (Civil) No.202 of 1995
IN RE.:
CONSTRUCTION OF PARK AT NOIDA NEAR OKHLA
BIRD SANCTUARY ANAND ARYA & ANR. T.N.
GODAVARMAN THIRUMULPAD
v.
UNION OF INDIA & ORS.
DECEMBER 3, 2010
[S.H. KAPADIA, CJI, AFTAB ALAM AND K.S.
PANICKER RADHAKRISHNAN, JJ.]
Forest Conservation Act, 1980: s.2 Forest land Project
at NOIDA for building large scale memorial with extensive
stone work Spread over an area of 33.43 hectares of land
Whether the project area, a forest land Held: In the
revenue records, none of the khasras (plots) falling in the
project area were ever shown as jungle or forest The project
area was treated as an urban park Trees planted on it were
allowed to stand and grow for about 12-14 years when they
were cut down to make the area clear for the project Though
man made forest may equally be a forest as a naturally grown
one and non-forest land may also, with the passage of time,
change its character and become forest land, but this cannot
be a rule of universal application and must be examined in
the overall facts of the case The trees planted with the intent
to set up an urban park cannot turn into forest within a span
of 10 to 12 years and the land that was forever agricultural
would not be converted into the forest land The project site
is not forest land Construction of the project without the prior
permission from the Central Government did not in any way
contravene s.2 of the Act Environment Protection Act, 1986.
Environment Protection Act, 1986: s.3(3) State
783
784 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Governments project for building large scale memorial with
extensive stone work Project at NOIDA Requirement of
prior environmental clearance under the EIA Notification S.O.
1533(E) dated September 14, 2006 Held: The project in
question cannot be termed as a Building and Construction
B B project falling under item 8(a) of the Schedule to the EIA
Notification Applying the test of Dominant Purpose or
Dominant Nature of the project or the Common Parlance
test, the project could only be categorized under item 8(b) of
the schedule as a Township and Area Development project
C C But under that category it does not come up to the threshold
marker inasmuch as the total area of the project (33.43
hectares) is less than 50 hectares and its built-up area even
if the hard landscaped area and the covered areas are put
together comes to 1,05,544.49 square metres, i.e., much
below the threshold marker of 1,50,000 square metres
D D
Therefore, the project does not fall within the ambit of the EIA
notification EIA Notification S.O. 1533(E) dated September
14, 2006 Items 8(a) and 8(b) Wild life.
Circular/Government order/Notification:
E E
EIA Notification S.O. 1533(E) dated September 14, 2006
Items 8(a) and 8(b) Building and Construction project
and Township project Distinction between.
EIA Notification S.O. 1533(E) dated September 14, 2006
F F Ambiguity in Held: The Notification calls for second look
by the concerned authorities Project activities under Item
8(a) and 8(b) of the schedule to the notification need
description with greater precision and clarity Environmental
laws.
G G
Constitution of India, 1950: Article 21 Construction of
project adjoining the Okhla Bird Sanctuary Continuation of
the project challenged on the ground that it was a potential
hazard to the sensitive and fragile ecological balance of the
H H Sanctuary Held: Environment is one of the facets of the right
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 785
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
to life guaranteed under article 21 of the Constitution and if
the Court perceives any project or activity as harmful or
injurious to the environment it can step in The question of
the likelihood of the project causing any adverse effects on
the Okhla Bird Sanctuary must, therefore, be examined from
this angle Environmental impact assessment of the project
was done by expert agencies None of the expert bodies took
the view that the project was so calamitous or ruinous for the
bird sanctuary that it be altogether scrapped in order to save
the Sanctuary The expert bodies gave recommendations
which allowed the completion of the project subject to certain
conditions Therefore, project allowed to be completed,
subject to conditions suggested by the expert bodies
Environmental laws Wild life..
The petitioners/ applicants were residents of NOIDA,
U.P. According to them, the project, undertaken at the
instance of Uttar Pradesh Government was a huge
unauthorized construction. A very large number of trees
that were felled down for the project formed a forest as
the term was construed by the Supreme Court in its order
dated December 12, 1996 and the action of the Uttar
Pradesh Government in cutting down a veritable forest
without the prior permission of the Central Government
and then Supreme Court, was in gross violation of
section 2(ii) of the Forest (Conservation) Act, 1980 (FP
Act). The project was spread over an area of 33.43
hectares, equal to 334334.00 square metres of land
surrounded by a boundary wall made of stone, 2 metres
in height and 0.3 metres in thickness with the estimated
cost at Rs. 685 crores. At the site of the project, there
used to be a tree cover, thin to high- moderate in density
and for clearing the ground for the project 6186 trees
were cut down and 179 were shifted during construction.
The project involved massive constructions that were
made without any prior environmental clearance from the
Central Government or the State Level Environment
785
786 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Impact Assessment Authority in complete breach of the
provisions of the Environment Protection Act, 1986 (EP
Act) and the notification issued under the Act. The project
was causing great harm, and was bound to further
devastate the delicate and sensitive ecological balance
B B of the Okhla Bird Sanctuary to which the site of the
project lay adjacent and, therefore, was in complete
disregard of the Supreme Courts directions concerning
buffer zones.
The State of Uttar Pradesh denied all the allegations
C C
made by the applicants. According to the State
Government, it was setting up a park to develop and
beautify the area in a unique way. The park was
conceived as a fine blend of hard and soft landscaping
with memorial structures and commemoration pieces.
D D The construction of the park did not violate any law or
the order of the Court. There was no infringement of the
provisions of the FC Act or the EP Act or the notification
made under it. Further, it was contended that the setting
up of the park caused no harm to the bird sanctuary and
E E the objections raised by the applicants to the
construction of the park were fanciful and imaginary and
actuated by oblique motives. According to the State
Government, the work on the project commenced in
January 2008. The applicants filed IA before the Central
F F Empowered Committee (CEC) constituted by the
Supreme Court on March 5, 2009. The instant IA was filed
by the applicants before the Supreme Court on April 22,
2009. The State Government contended that by that time
50% of the construction work of the project was
G G completed. The report from the CEC was received in the
Supreme Court on September 4, 2009. On October 9,
2009, the Supreme Court by an interim order restrained
the State Government from carrying on any further
constructions till further orders. By that time, according
H H
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 787
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
to the government, 70-75% of the construction work of
the project was completed.
It was contended for the applicants that over 6000
trees were cut down for clearing the area for construction
of the project and it was, thus, a case of forest land being
put to use for non-forest use in complete violation of
Section 2(ii) of the Forest Conservation Act; that the
construction of the project was started by the Uttar
Pradesh Government without obtaining the prior
environmental clearance in complete violation of the
notification issued on September 14, 2006 under Section
3(3) of the EP Act; and that the project being located
adjoining the Okhla Bird Sanctuary which was a serious
concern.
Disposing of the IA, the Court
HELD: 1.1. In the revenue records, none of the
khasras (plots) falling in the project area was ever shown
as jungle or forest. According to the settlement year 1359
Fasli (1952A.D.) all the khasras were recorded as
agricultural land, Banjar (uncultivable) or Parti
(uncultivated). NOIDA was set up in 1976 and the lands
of the project area were acquired under the Land
Acquisition Act mostly between the years 1980 to 1983
(two or three plots were notified under sections 4/6 of the
Act in 1979 and one or two plots as late as in the year
1991). But the possession of a very large part of the lands
under acquisition (that now form the project site) was
taken over in the year 1983. From the details of the
acquisition proceedings, it would appear that though on
most of the plots there were properties of one kind or the
other, there was not a single tree on any of the plots
under acquisition. The records of the land acquisition
proceedings, thus, complemented the revenue record of
1952 in which the lands were shown as agricultural and
not as jungle or forest. There is no reason not to give due
788 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A credence to these records since they pertained to a time
when the impugned project was not even in anyones
imagination and its proponents were no where on the
scene. According to the information from the Deputy
Horticulture Officer, NOIDA, plantations were taken up
B B along with seed sowing of Subabul during the year 1994-
95 to 2007-08. A total of 9,480 saplings were planted
(including 314 saplings planted before 1994-95). NOIDA
had treated this area as an Urban Park. It is, thus, to
be seen that on a large tract of land (33.45 hectares in
C C area) that was forever agricultural in character, trees were
planted with the object of creating an urban park (and not
for afforestation!). The trees, thus, planted were allowed
to stand and grow for about 12-14 years when they were
cut down to make the area clear for the project. The
satellite images tell that in October, 2006 there was thin
D D
to moderately dense tree cover over about half of the
project site. But this fact was all but admitted; the State
Government admitted felling of over 6000 trees in 2008.
The trees planted with the intent to set up an urban park
cannot turn into forest within a span of 10 to 12 years and
E E the land that was forever agricultural, would not be
converted into forest land. [Paras 20 to 23] [813-F-H; 814-
A-H; 815-A]
T.N. Godavarman Thirumulkpad v. Union of India & Ors.
F F (1997) 2 SCC 267 relied on.
T.N. Godavarman v. Union of India, (2006) 5 SCC 28;
Samatha v. State of Andhra Pradesh & Ors., (1997) 8 SCC
191; M. C. Mehta v. Union of India & Ors., (2004) 12 SCC
118; State of Bihar v. Banshi Ram Modi, (1985) 3 SCC 643
G G
referred to.
1.2. No doubt, man made forest may equally be a
forest as a naturally grown one. Non-forest land may also,
with the passage of time, change its character and
H H become forest land. But this cannot be a rule of universal
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 789
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
application and must be examined in the overall facts of
the case otherwise it would lead to highly anomalous
conclusions. The contention of the applicants was that
the two conditions in the guidelines adopted by the State
Level Expert Committee, i.e., (i) trees mean naturally
grown perennial trees and (ii) the plantation done on
public land or private land will not be identified as forest
like area were not consistent with the wide definition of
forest given in the December 12, 1996 order of the Court
and the project area should qualify as forest on the basis
of the main parameter fixed by the Committee. If the said
contention is accepted and the criterion fixed by the State
Level Expert Committee that in the plains, a stretch of
land, with an area of 2 hectares or above, with the
minimum density of 50 trees/ hectare would be a deemed
forest is applied mechanically and with no regard to the
other factors a greater part of Lutyens Delhi would
perhaps qualify as forest. This was obviously not the
intent of the order dated December 12, 1996. The project
site is not forest land and the construction of the project
without the prior permission from the Central
Government does not in any way contravene section 2
of the FC Act. [Paras 30, 31] [818-H; 819-A-E]
2.1. Before the CEC, the MoEF in its first response
dated August 22/24, 2009 had taken the stand that the
project would not require any prior environmental
clearance under the EIA notification 2006. It had further
stated that in the EIA notification 2006, all building/
construction projects/ area development projects and
townships, were categorized as category B projects and
the general condition prescribed in the notification was
not applicable to construction projects. It went on to say
that the project did not require any prior environmental
clearance under the EIA notification 2006 even though
being within the prescribed distance from a wildlife
sanctuary/national park or inter-state boundary. The first
790 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A response of the MoEF before the CEC was evidently
based on the inputs received from the UP Government
about the nature of the project and the extent of
constructions involved in it. In the second response
before the CEC dated September 2, 2009, the MoEF stated
B B that after its earlier letter of August 22, 24, 2009, the MoEF
had received further information about the project from
various sources and the fresh findings raised far-
reaching issues of public concern that extended beyond
the parameters set by the EIA notification of 2006. It
C C further stated that the certificate issued by the SEIAA of
UP stated that the total built-up covered area was only
9,542 square metres and the report of the CCF was not
clear as to the extent of the covered area vis--vis
concrete landscaping, pillar(s), platform(s), lawn(s), tree
D planting, etc. The MoEF was not fully in possession of the
D
basic facts relating to the project and its likely impact on
the environment. It left the decision in the hands of the
CEC. The CEC in its report to this Court dated September
4, 2009 held that the project was covered by the EIA
notification 2006 and it required prior environmental
E E clearance in terms of the notification. When the matter
finally came up before the Court, the MoEF was once
again asked to take a clear stand on the issue whether
the project was covered by the EIA notification 2006. The
MoEF filed a brief affidavit on October 21, 2009 in which
F F it acknowledged that the CEC in its report dated
September 4, 2006 had stated that the State of UP should
be directed to seek environmental clearance for the
project from the MoEF in terms of the notification. The
MoEF, however, reiterated its stand in very definite and
G G unequivocal terms that the project in question did not fall
within the ambit of the EIA notification 2006 and no
environmental clearance was required for such kind of
projects. The stand of the MoEF was based on the
premise that the area of the project (33.43 hectares) was
H H less than 50 hectares and its built up area (9,542 square
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 791
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
metres) was less than 20,000 square metres. Having thus
made its stand clear, the MoEF went on to say that in case
the Court desired the project to be appraised from the
environmental angle it would do so and submit its
recommendations. It, however, put in a caveat that such
appraisals were made before the commencement of the
construction activity at the site and in the instant case the
project was already in the advanced stage of
construction. [Paras 34 to 37] [820-C-H; 821-A-C; 822-D-
H]
2.2. The EIA notification provided that all projects and
activities enumerated in its Schedule would require prior
environmental clearance before any construction work or
preparation of land for the project is started on the project
or activity. The projects and activities depending upon
various factors such as the potential hazard to
environment, location, the extent of area involved, etc. are
categorized in categories A or B. For projects or
activities falling in category A, the competent authority
to grant prior environmental clearance is the MoEF and
for projects or activities falling in category B, the State
Environment Impact Assessment Authority (SEIAA). In
certain cases a project or activity, though categorized in
category B may be treated as category A by application
of the general condition (on account of its location being
within a distance of ten km from a protected area notified
under the Wildlife (Protection) Act etc.). Further, projects
or activities categorized as category B may or may not
require an environmental impact assessment before the
grant of environmental clearance depending on the
nature and location specificity of the project. The projects
requiring an EIA report shall be termed as category B1
and the remaining shall be termed as B2 and will not
require an EIA report. For categorization of projects into
B1 and B2, the MoEF issue appropriate guidelines from
time to time. The schedule to the notification has a table
792 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A that is divided into five columns. The first column
contains the serial numbers, and the second the
description of the project or activities; the third column
lists those projects or activities that fall in category A and
the fourth, those falling in category B; the fifth column
B B against each item indicates whether any general or
specific condition applies to the project or activity
described in that item. In some cases where the project
or the activity is shown in column 4 as category B, the
application of the general condition is expressly indicated
C C in column 5 of the table. [Para 45] [830-A-H; 831-A]
2.3. For the project under consideration, the relevant
entries in the schedule are 8(a) and 8(b). Both items 8 (a)
and 8 (b) are listed in column 4, i.e., in category B. In
column 5, against any of the two items, there is no
D D mention of application of the general condition but it is
expressly said that all projects in item 8(b) would be
appraised as category B1, that is to say, for a project
under item 8(b) the prior environmental clearance must
be preceded by an environmental impact assessment.
E E Item 8(a) deals with Building and Construction projects
and the threshold mark that would bring the project
within the ambit of the notification is equal to or more than
20,000 square metres and less than 1,50,000 square
metres of built-up area. It is further clarified that these
F F figures relate to built-up area for covered construction;
in case of facilities open to the sky, the built up area
would be the activity area. Item 8(b) deals with Townships
and Area Development projects and the threshold mark
for the project to come within the ambit of the notification
G G is an area equal to or more than 50 hectares or built-up
area of more than 1,50,000 square metres. [Paras 46, 47]
[831-B-E]
2.4. Since in the schedule to the notification Building
and Construction projects and Townships and Area
H H
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 793
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
Developments projects are enumerated separately, the
former in item 8(a) and the latter in item 8(b), this would
normally suggest that the notification treats those two
kinds of projects separately and differently. It would,
therefore, be reasonable to say that an Area
Development project though involving a good deal of
construction would yet not be a Building and
Construction project. It is extremely difficult to accept the
contention that the categorization under items 8 (a) and
8 (b) has no bearing on the nature and character of the
project and is based purely on the built up area. A
building and construction project is nothing but addition
of structures over the land. A township project is the
development of a new area for residential, commercial or
industrial use. A township project is different both
quantitatively and qualitatively from a mere building and
construction project. Further, an area development
project may be connected with the township
development project and may be its first stage when
grounds are cleared, roads and pathways are laid out and
provisions are made for drainage, sewage, electricity and
telephone lines and the whole range of other civic
infrastructure. Or an area development project may be
completely independent of any township development
project as in case of creating an artificial lake, or an urban
forest or setting up a zoological or botanical park or a
recreational, amusement or a theme park. The essential
difference between items 8(a) and 8(b) lies not only in the
different magnitudes but in the difference in the nature
and character of the projects enumerated there under.
Therefore, the project in question cannot be termed as a
Building and Construction project. Applying the test of
Dominant Purpose or Dominant Nature of the project or
the Common Parlance test, i.e. how a common person
using it and enjoying its facilities would view it, the
project can only be categorized under item 8(b) of the
schedule as a Township and Area Development project.
794 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A But under that category it does not come up to the
threshold marker inasmuch as the total area of the project
(33.43 hectares) is less than 50 hectares and its built-up
area even if the hard landscaped area and the covered
areas are put together comes to 1,05,544.49 square
B B metres, i.e., much below the threshold marker of 1,50,000
square metres. The inescapable conclusion, therefore, is
that the project does not fall within the ambit of the EIA
notification S.O. 1533(E) dated September 14, 2006. This
is not to say that this is the ideal or a very happy outcome
C C but that is how the notification is framed and taking any
other view would be doing gross violence to the scheme
of the notification. [Paras 53, 55, 56, 57, 58] [834-G-H; 836-
D-F; 837-B-F]
3.1. The report of the CEC succinctly would sum up
D D the situation. Though everyone, excepting the project
proponents, viewed the construction of the project
practically adjoining the bird sanctuary as a potential
hazard to the sensitive and fragile ecological balance of
the Sanctuary, there is no law to stop it. This unhappy
E E and anomalous situation arose simply because despite
directions by this Court, the authorities in the Central and
the State Governments had so far not been able to evolve
a principle to notify the buffer zones around Sanctuaries
and National Parks to protect the sensitive and delicate
F F ecological balance required for the sanctuaries. But the
absence of a statute will not preclude this Court from
examining the projects effects on the environment with
particular reference to the Okhla Bird Sanctuary. For, in
the jurisprudence developed by this Court, Environment
G G is not merely a statutory issue. Environment is one of the
facets of the right to life guaranteed under article 21 of
the Constitution. Environment is, therefore, a matter
directly under the Constitution and if the Court perceives
any project or activity as harmful or injurious to the
H H environment it would feel obliged to step in. The question
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND 795
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
of the likelihood of the project causing any adverse
effects on the Okhla Bird Sanctuary must, therefore, be
examined from this angle. [Paras 65, 66] [840-F-H; 841-
A-C]
3.2. In pursuance of the Courts directions, the MOEF
had asked the project proponents to have the
environmental impact assessment of the project done by
some expert agencies. NOIDA, the project proponent got
three studies made of the impact assessment of the
project. One is a joint study prepared by the Salim Ali
Centre for Ornithology and Natural History (SACON),
Deccan Regional Station, Hyderabad and the All India
Network Project on Agricultural Ornithology, Aacharya
N.G. Ranga Agricultural University, Hyderabad; and the
third by a group of three individuals that was vetted by
the Indian Institute of Technology, New Delhi. None of the
expert bodies has taken the view that the project is so
calamitous or ruinous for the bird sanctuary that it needs
to be altogether scrapped in order to save the Sanctuary.
The expert bodies gave recommendations which allowed
the completion of the project subject to certain
conditions. On behalf of the State of U.P., it was
unequivocally stated that all the conditions laid in the
reports of the Expert Bodies were acceptable to the State
Government/ NOIDA in their entirety. In the light of the two
study reports and the report submitted by the EAC, there
was no justification for directing the demolition of the
constructions made in the project, as prayed for on behalf
of the applicants. The project is allowed to be completed,
subject, of course to the conditions suggested by the
three expert bodies. The report of the WII focused on the
felling of trees resulting in the disappearance of the
woodland that acted as a protective buffer for the bird
sanctuary and its first recommendation is to compensate
the loss of vegetation. It secondly focused on the
increased artificial light at the project site, which is likely
796 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A to affect the migratory bird population in the long run.
Apart from this, the extent of stone and concrete
constructions in the name of hard landscaping is highly
out of proportion. In the modified layout plan, the project
proponents reduced the area under hard surface to
B B 35.54% of the total project area. Even that is unacceptable
from the environmental point of view. The area under
hard surface, whether covered, uncovered (including
pathways and boundary wall etc.) or of any kind
whatsoever must not exceed 25% of the total project
area; of the rest, 25% should be used for soft/green
C C
landscaping and the remaining, preferably 50% must
have a thick cover of trees of the native variety. The
plantation of trees should be especially dense towards
the Okhla Bird Sanctuary on the western side of the
project area. Any construction work should commence
D D only on completion of the planting of the trees. [Paras 68,
75, 76] [841-G-H; 842-A; 845-B-H; 846-A]
3.3. In order to ensure full compliance with the
recommendations of the expert bodies (which form part
E E of the judgment) and the directions of this Court, the
construction of the project needs to be seen by an expert
committee. One member of the committee, preferably an
ornithologist will be nominated by the MoEF, the other
member will be nominated by the CEC in consultation
F F with the amicus and the Chairman-cum-CEO of NOIDA will
be the member-secretary of the committee. The said
directions were given in the peculiar facts of this case and
nothing said in the judgment would form precedent when
the court hears the matter of the buffer zones. The EIA
G G notification dated September 14, 2006 urgently calls for
a close second look by the concerned authorities. The
projects/activities under items 8(a) and 8(b) of the
schedule to the notification need to be described with
greater precision and clarity and the definition of built-up
area with facilities open to the sky needs to be freed from
H H
 IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND
ARYA, T.N. GODAVARMAN THIRUMULPAD v. U.O.I.
its present ambiguity and vagueness. The question of
application of the general condition to the projects/
activities listed in the schedule also needs to be put
beyond any debate or dispute. The environmental impact
studies in this case were not conducted either by the
MoEF or any organization under it or even by any
agencies appointed by it. All the three studies that were
finally placed before the Expert Appraisal Committee and
which this Court has also taken into consideration, were
made at the behest of the project proponents and by
agencies of their choice. This Court would have been
more comfortable if the environment impact studies were
made by the MoEF or by any organization under it or at
least by agencies appointed and recommended by it.
[Paras 77 to 79] [846-B-H; 847-A]
Case Law Reference:
(1997) 2 SCC 267 referred to Paras 1, 6, 18,
25
(2006) 5 SCC 28 referred to Paras 16
(1997) 8 SCC 191 referred to Paras 18
(2004) 12 SCC 118 referred to Paras 18, 29
(1985) 3 SCC 643 referred to Paras 26
CIVIL ORIGINAL JURISDICTION : I.A. Nos. 2609-2610 of
2009.
IN
Writ Petition (Civil) No, 202 of 1995.
Under Article 32 of the Constitution of India.
With
I.A. Nos. 2896, 2900 & 2928 of 2010.
797 798 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A IN
I.A. Nos. 2609-2610 of 2009.
IN
B B Writ Petition (C) No. 202 of 1995.
H.P. Raval, ASG, Harish N. Salve, U.U. Lalit, Jayant
Bhushan, K.K. Venugopal, Raju Ramachandra, S.C. Mishra,
S.K. Dwivedi, AAG, Siddhartha Chowdhury, A.D.N. Rao, P.K.
C Manohar, Mihir Chatterjee, Harish Beeran, Manish Kumar
C
Bishnoi, Gautam Talukdar, R.K. Gupta, Rajiv Kumar Dubey,
Ankur Talwar, Kamlendra Mishra for the appearing parties.
The Judgment of the Court was delivered by
D D AFTAB ALAM, J. 1. At the centre of the controversy is a
very large project of the Uttar Pradesh government at NOIDA.
Objecting to the project are the two applicants who are
residents of Sector 15A, NOIDA, U.P. They claim to be public
spirited people, committed to the cause of environment.
E E According to them, the project, undertaken at the instance of
Uttar Pradesh Government is a huge unauthorized
construction. The applicants state that a very large number of
trees were cut down for clearing the ground for the project. The
trees that were felled down for the project formed a forest as
F the term was construed by this Court in its order dated
F
December 12, 1996 in Writ Petition (C) No.202 of 1995; T.N.
Godavarman Thirumulkpad v. Union of India & Ors., (1997)
2 SCC 267 and the action of the Uttar Pradesh Government in
cutting down a veritable forest without the prior permission of
the Central Government and this Court, was in gross violation
G G of section 2(ii) of the Forest (Conservation) Act, 1980 (hereafter
the FC Act). The project involved massive constructions that
were made without any prior environmental clearance from the
Central Government based on Environment Impact
Assessment. The constructions were, therefore, in complete
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 799
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
breach of the provisions of the Environment Protection Act,
1986 (hereafter the EP Act) and the notification issued under
the Act. More importantly, the project was causing great harm,
and was bound to further devastate the delicate and sensitive
ecological balance of the Okhla Bird Sanctuary to which the site
of the project lay adjacent. The project was, thus, in complete
disregard of this Courts directions concerning buffer zones.
2. The State of Uttar Pradesh, of course denies, equally
strongly, all the allegations made by the applicants. According
to the State, it was setting up a park that would develop and
beautify the area in a unique way. The park was conceived as
a fine blend of hard and soft landscaping with memorial
structures and commemoration pieces. The construction of the
park did not violate any law or the order of the Court. There was
no infringement of the provisions of the FC Act or the EP Act
or the notification made under it. Further, the setting up of the
park caused no harm to the bird sanctuary. The applicants
objections to the construction of the park were fanciful and
imaginary and actuated by oblique motives.
THE PROJECT:
3. Before proceeding to examine the arguments of the two
sides in greater detail it would be useful to take a look at the
project and to put at one place the basic facts concerning it that
are admitted or at any rate undeniable.
i. The project is sited at sector 95, Noida. According
to the applicants, at the site of the project previously
there used to be five parks on the Yamuna front,
namely, Mansarovar, Nandan Kanan, Childrens
Park, Smriti Van and Navagraha, opposite Sectors
14A, 15A and 16A, Noida.
ii. The project site, on its western side, lies in very
close proximity to the Okhla Bird Sanctuary. The bird
sanctuary was formed as a large water body with
800 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A the adjoining land-mass of the embankment as a
result of the construction of the Okhla Barrage. It falls
partly in Delhi and partly (400 hectares in area) in
the district of Gautam Budh Nagar, U.P. The
administrative control of the area of the Sanctuary
B B is under the Uttar Pradesh Irrigation Department
and its management is with the Uttar Pradesh
Forest Department. The Sanctuary is home to
about 302 species of birds. According to the
Bombay Natural History Society, out of the bird
species found here, 2 are critically endangered, 11
C C
are vulnerable and 7 are nearly threatened. About
50 species are migratory in nature and come here
mainly during the winter months. The annual
population/visit is estimated as under:
D D 2006- 2007 - 24166
2007-2008 - 17111
2008-2009 - 21272
This haven for birds was declared a bird sanctuary (the
Okhla Bird Sanctuary) vide notification dated May 8, 1990
E E issued by the State of Uttar Pradesh under section 18 of
the Wildlife (Protection) Act, 1972. The project, subject of
the present controversy, is sited in very close proximity to
the Okhla Bird Sanctuary on its eastern side. The
applicants refer to it as adjoining the left afflux bund of the
F F Okhla Bird Sanctuary but to be accurate it lies about 35-
50 metres away from the outer limit of the Sanctuary.
According to the applicants, the boundary of the project
site is as under:
North- Delhi-UP DND Toll Road
G G South- Not clearly stated
East- Dadri Road
West- Okhla Bird Sanctuary, left afflux bund
iii. The project is spread over an area of 33.43
hectares, equal to 334334.00 square metres of land
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IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 801 802 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
surrounded by a boundary wall made of stone, 2 A A 4 Total area under Soft
metres in height and 0.3 metres in thickness. The Landscape
estimated cost of the project is Rupees 685 crores. (a) Area under grass & ` 1,57,161.79 sq.m. 47.01%
plantation
iv. At the site of the project there used to be a tree (b) Area under planters 6,181.91 sq.m. 1.85%
cover, thin to high- moderate in density and for B built within paved areas
B
clearing the ground for the project six thousand one
hundred and eighty six (6186) trees were cut down 5 Total area for vehicular 34,850.00 sq.m. 10.42%
and one hundred and seventy nine (179) were movement with grass pavers
shifted. These trees were of Subabul, Bottle (maintenances, fire path etc.)
Brush, Bottle Palm, Morepankhi, Ficus benjamina, vi. According to the State Government, the work on the
C C
Cassia siamia, Eucalyptus, Fishtail palm, Rubber project commenced in January 2008. The
plant, Silver oak, etc. applicants filed IA no.1179 before the Central
Empowered Committee (hereafter CEC)
v. The project, though insisted upon by the Uttar constituted by this Court on March 5, 2009. They
Pradesh Government is nothing but a recreational filed IA nos. 2609-2610 of 2010 (presently in hand)
park, involves the construction of dedicatory D D before this Court on April 22, 2009. According to
columns, commemorative plaza, national memorial, the State Government, by that time 50% of the
plinth with sculptures, larger than life-size statues on construction work of the project was complete. The
tall pedestals, large stone tablets with tributary report from the CEC was received in this Court on
engravings, pedestrian pathways, service block, September 4, 2009 and on October 9, 2009, this
boundary wall, hard landscape, soft landscape, etc. E E Court by an interim order restrained the State
As initially planned the breakup of the area under Government from carrying on any further
different uses was as under: constructions till further orders. By that time,
1 Total Area within boundary 3,34,334.00 sq.m. according to the government, 70-75% of the
Wall construction work of the project was completed.
F F
2 Total built up covered area vii. In course of hearing of the matter, on a suggestion
for activities made by the Court, the State Government modified
(a) Memorial Building & 3,499.50 sq.m. 1.05% the layout plan increasing the soft/green area from
toilet blocks 47% to 65.28% of the total area of the project. The
(b) Utilities & facilities 3,500.00 sq.m. 1.05% G G revised layout plan is as under:
3 Area Under Hard Landscape 1,29,140.80sq.m. 38.62% S. No. DESCRIPTION EXISTING MODIFIED
(including platforms, plinth, (in sq. (in sq.
sculptures & surrounding metres + %) metres + %)
paved areas, paths) 1. Green Area 157161.79 218246.51
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 803 804 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]

(47%) (65.28%) A A only restore the tree cover that was in existence at the site
earlier but would make the whole area far better, more beautiful
2. Hard Landscape 129140.80 98544.99
and environment friendly. The applicants however, would have
(38.6%) (29.48%)
none of it. On their behalf it is contended that the whole project
a Boundary Wall 2700.79 2700.79 is bad and illegal from every conceivable point of view; its
(0.81%) (0.81%) B B construction was started and sought to be completed at a
b Platforms, Plinths, 126440.00 95844.99 breakneck speed in flagrant violation of the laws. According to
Sculpture & (37.79%) (29.48%) the applicants therefore, all the structures at the project site,
Surrounding complete, semi-complete or under construction must be pulled
Paved Areas down and the project site be restored to its original state.
C C THE PROJECT AND SECTION 2 OF THE FC ACT:
3. Area for vehicular 34850.00 0.00 (NIL)
movement (10.42%)
5. Mr. Jayant Bhushan, learned senior counsel appearing
4. Area under ornamental 0.00 (NIL) 6302.00 for the applicants submitted that over six thousand trees were
water feature (may be (1.88%) admittedly cut down for clearing the area for the construction
considered part of the D D of the project and it was, thus, clearly a case of forest land
Eco Friendly Area) being put to use for non-forest purpose in complete violation
5. Area under parking with 0.00 (NIL) 4241.00 of section 2 (ii) of the FC Act.
grass pavers (may be (1.27%)
Section 2 of the FC Act, in so far as relevant for the present,
considered part of the
provides as follows:
Eco Friendly Area) E E
6. Utilities and Facilities 3500.00 3500.00 2. Restriction on the de-reservation of forests or use of
(1.05%) (1.05%) forest land for non-forest purpose.- Notwithstanding
anything contained in any other law for the time being in
7. Memorial Building and 3499.50 3499.50
force in a State, no State Government or other authority
Toilets (1.05%) (1.05%) F F shall make, except with the prior approval of the Central
8. Total Area 334334.00 334334.00 Government, any order directing.-
(100%) (100%)
(i) xxxxxxx
Under the amended plan, around 7300 trees, more than 4
years of age and measuring 8-12 feet in height, belonging to (ii) that any forest land or any portion thereof may be
the native species such as Neem, Peepal, Pilkhan, Maulsari, G G used for any non-forest purpose.
Imli, Shisham, Mango, Litchi and Belpatra will be planted in the
project area. (iii) xxxxxxx

4. According to the State Government, the revised plan (iv) xxxxxxx

that includes planting of trees in such large numbers would not H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 805
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
Explanation.- For the purpose of this section non-forest
purpose means the breaking up or clearing of any forest
land or portion thereof for-
(a) the cultivation of tea, coffee, spices, rubber, palms, oil
bearing plants, horticulture crops or medicinal plants;
(b) any purpose other than re-afforestation,
but does not include any work relating or ancillary to
conservation, development and management of forests
and wild-life, namely, the establishment of check-posts, ire
lines, wireless communications and construction of
fencing, bridges and culverts, dams, waterholes, trench
marks, boundary marks, pipelines or other like purposes.
The restriction imposed by section 2(ii) is in respect of forest
land. It, therefore, needs to be ascertained whether the project
area can be said to be forest land where there was a forest
that was cut to make the site clear for the project.
6. In support of the contention that the trees that were
cleared for the construction of the project comprised a forest,
the applicants rely heavily on the order passed by this court on
December 12, 1996 in the case of T.N Godavarman
Thirumulkpad [Writ Petition (C) No.202 of 1995), (1997) 2
SCC 267], being the first in a series of landmark orders passed
by this Court in an effort to save the fast diminishing forest cover
of the country against the greedy and wanton plundering of its
natural resources. In that order the Court gave a number of
directions. One such direction, at serial no.5 to each of the
State Governments, is as under:
Each State Government should constitute within one
month an Expert Committee to:
(i) Identify areas which are forests, irrespective of whether
they are so notified, recognized or classified under any
806 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A law, and irrespective of the ownership of the land of such
forest;
(ii) identify areas which were earlier forests but stand
degraded, denuded or cleared; and
B B (iii) identify areas covered by plantation trees belonging
to the Government and those belonging to private
persons.
7. In pursuance of the direction of the Court, the Uttar
C C Pradesh Government constituted the State Level Expert
Committee for identifying forests and forest-like areas. The
Committee in its report dated December 12, 2007 framed
certain parameters for identification of forest-like areas
according to which, in the plains, any stretch of land over 2
hectares in area with the minimum density of 50 trees per
D D
hectare would be considered as forest. On January 11, 2008
(as taken note of in the order of that date) it was reported to
this Court that the guidelines were issued for identification of
forest-like areas and steps would be taken to identify forest-
E like areas in all the districts in the State of Uttar Pradesh within
E
four months and such areas would be handed over to the forest
department, excepting the private areas, if any. As the process
of search and identification of forest like areas in the districts
of Uttar Pradesh proceeded, the District Level Committee
headed by the District Collector, Gautam Budh Nagar, by its
F F letter dated February 26, 2008 addressed to Conservator
Forests & Regional Director intimated that there was no forest-
like area in the district and consequently the project site was
not identified as a forest or forest-like area by the State Level
Expert Committee constituted in pursuance of this Courts order
G G dated December 12, 2006.
8. It was in this background that the project started,
according to the State Government, in January 2008. When the
work on the project became noticeable from the outside the
H H applicants filed their complaint before the CEC on March 5,
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 807
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
2009. As the controversy erupted with regards to large scale
construction near the Okhla Bird Sanctuary by the State
Government the Ministry of Environment and Forests (hereafter
MoEF) asked the Chief Conservator of Forests (CCF), Central
Region, Lucknow, to make a site inspection of the project and
to give his report. The CCF in his report dated July 10, 2009
did not accept the stand of the State Government that there was
no forest on the project site. He stated that 6000 trees were
sacrificed in an area of 32.5 hectares and that showed that
the area had sufficiently dense forest cover and would qualify
as forest according to the dictionary meaning of the word and
as directed by the Supreme Court. He, however, suggested that
before taking a final view on the matter a report may be called
for from the Forest Survey of India (hereafter FSI) in order to
verify the vegetation cover over the area before the construction
work started there. In light of the report by the CCF, the MoEF
noted that the number of cut trees, in ratio to the project area,
was apparently more than three times in excess of the criterion
fixed by the State Level Expert Committee for identification of
forest like areas (i.e., minimum of 50 trees per hectare). As
suggested by the CCF, therefore, the MoEF called for a report
from the FSI based on satellite imagery and properly analysed
by GSI application from the year 2001 onwards (vide letter
dated July 17, 2009 from the Dy. Conservator of Forest (C) to
the Director, Forest Survey of India). The FSI gave its report
on August 7, 2009 which we shall examine presently. In light of
the report of the CCF and the report from the FSI, the MoEF in
its first response to applicants complaint before the CEC (under
covering letter that is undated, received at the CEC on August
12, 2009) stated that at the project site there was good patch
of forests and which could be treated as deemed forest. It
further said that the report of the FSI showed that the forest
cover existed there up to 2006 and the felling of trees might
have taken place after that only.
9. In the meeting convened by the CEC on the applicants
complaint on August 12, 2009, the Chief Conservator of Forests
808 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A (CCF) MoEF, Lucknow stated that the plantation done in the
project area was naturalized and having regard to the number
of trees that existed in the area, the project area should be seen
as deemed forest and, therefore, it attracted the provisions
of the FC Act, and any non-forest use of the land required prior
B B approval of the Central Government. In view of the stand taken
by the CCF, the CEC by its letter of August 13, 2009 requested
the MoEF to give its response on the issue. Here it may be
noted that till that stage the stand of the MoEF, based on the
reports of the CCF and the FSI, though tentative seemed to be
C C definitely inclined towards holding that the trees that were felled
for clearing the site comprised a forest/deemed forest and the
construction at the project site was hit by the provisions of the
FC Act. But now in a perceptible shift in its stand the MoEF
informed the CEC by its letter of August 22/24, 2009 that in its
view, the project site did not attract the provisions of the FC
D D
Act. It referred to the order of this Court dated December 12,
1996 and pointed out that the project site did not appear in the
list of deemed forest land identified by the State Level Expert
Committee in pursuance of the order of the Court. It concluded
by saying as follows:
E E
In view of the above, it is informed that the area under
discussion is neither recorded as forest nor deemed forest
and actually an urban tree park. Therefore, construction
work in this area does not attract the provision of the
F F Forest (Conservation) Act, 1980.
10. The letter dated August 22/24, 2009 from the MoEF
was followed by another letter of September 2, 2009. This was
purportedly to put the observation in the previous letter that
[C]onstruction work in this area does not attract the
G G
provisions of the Forest (Conservation) Act 1980 in context.
This letter referred to the satellite images provided by the FSI
and the reports submitted by the CCF but in the end, given
the sensitivity of the matter and the high degree of public
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 809
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
interest left it to the CEC to draw appropriate conclusions from
the materials furnished to it.
11. The CEC on a consideration of all the materials made
available to it, including the report of the FSI (on which the
applicants heavily rely), came to hold and find that the project
site was not a forest or a deemed forest or a forest-like area
in terms of the order of this Court dated December 12, 1996.
In its report to this Court dated September 4, 2009 it observed
in this regard as follows:
28.. In the present case, even though as per the Report
of the Forest Survey of India, the area was having good
forest/tree cover and the project area had more than 6000
trees, it does not fall in the category of forest for the
purpose of section 2 of the Forest (Conservation) Act and
therefore does not require any approval under the Forest
(Conservation) Act. The project area does not have
naturally grown trees but planted trees. The area has
neither been notified as forest nor recorded as forest
in the Government record. In the exercise carried out by
the State of Uttar Pradesh, after detailed guidelines for
identification of deemed forest were laid down, the project
area was not identified to be deemed forest. The CEC
does not agree with the Regional Chief Conservator of
Forests, MoEF, Lucknow that the plantation done in the
area has naturalised because of natural regeneration and
therefore now falls in the category of deemed forest. Most
of the trees are of species such as Subabul, Bottle Brush,
Bottle Palm, Morepankhi, Ficus benjamina Cassia siamia,
Eucalyptus, Fishtail Palm, Rubber plant, Silver oke etc
which are not of natural regeneration. As such hardly any
tree of natural regeneration exist.
29. As per the definition of forest as held by the Honble
Supreme Court in its order dated 12.12.1996, the project
810 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A area therefore cannot be treated as forest for the purpose
of the Forest (Conservation) Act.
(emphasis added)
12. Mr. Jayant Bhushan strongly assailed the finding of the
B B CEC as erroneous. Learned counsel stated that the CEC took
the view that the project area could not be described as forest
and did not attract the provisions of FC Act mainly because the
trees in the project area that were cut down for making space
for the constructions were planted trees and not naturally grown
C C trees. He contended that the reason given by the CEC was
quite untenable being contrary to the judgments of this Court
where it is held that forest may be natural or man-made. He
further submitted that the view that in order to qualify as forest
the trees must be naturally grown is fraught with grave
D D consequences inasmuch as a very large portion of the forests
in India are planted forests and not original, natural forests.
Further, any afforested area would also cease to be recognized
as a forest if the view taken by the CEC were to be upheld.
E 13. The other reasons given by the CEC for holding that
E
the project area was not a forest was that it was neither notified
as forest nor recorded as forest in the Government record
and even in the exercise carried out by the State of Uttar
Pradesh, after detailed guidelines for identification of deemed
forest were laid down, the project area was not identified to be
F F deemed forest. Mr. Bhushan contended that these reasons
were as misconceived as the previous one. The area was not
notified or recorded as forest meant nothing since this Court
had passed a series of orders with the object to bring such
areas within the protection of the FC Act that were not notified
G G or recorded as forest. In the same way the failure of the State
Level Expert Committee to identify the project area as forest
even though it fully satisfied the criterion set by the Committee
itself for the purpose will not alter the true nature and character
of the area as forest land.
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 811 812 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]

14. Mr. K.K. Venugopal, learned senior counsel appearing A A Forest Cover Status in the Area of Interest (AOI)
for the State of U.P. strongly supported the view taken by the of NOIDA from 2001 to 2007
CEC. Learned counsel submitted that the omission to identify Area in ha.
the trees at the project site as forest or deemed forest was not Date of Very Moder- Open Total Non Total
due to any mistake or by chance. He pointed out that in the Satellite Dense ately Forest Forest Forest Area
parameters set out by the State Level Expert Committee for B B Data Forest Dense cover
identification of forests or forest-like areas it was clarified that (sic) Forest
Assessment
trees mean naturally grown perennial trees and it was further
stipulated that the plantation done on public land or private land (State of
will not be identified as forest like area. Mr. Venugopal Forest
submitted that the guidelines made by the Expert Committee Report)
C C
were reported to this Court and accepted by it on December
8th (2001) October- 0 3.74 10.42 14.16 32.27 46.43
12, 2007. The project site clearly did not come within the 2002
parameters fixed by the Expert Committee and it was rightly
not identified as a forest like area. The parameters fixed by the 9th (2003) November- 0 6.05 10.71 18.76 29.67 46.43
expert committee for identification of forests or forest like area 2002
D D
were never challenged by anyone and now it was too late in 10th (2005) November- 0 7.54 14.23 21.77 24.66 46.43
the day to question those parameters, more so after those 2004
were accepted by this Court. Mr. Venugopal contended that the
non inclusion of the project site as a forest or forest-like area 11th (2007) October- 0 9.04 12.73 21.77 24.66 46.43
by the State Level Expert Committee should be conclusive of 2006
the fact that the area was not forest land and the trees standing E E
16. In the report it was also stated that the latest forest
there were no forest.
cover assessment by the FSI was based on satellite data of
15. Mr. Bhushan contended that a tract of land bearing a 2006 and it did not have any data of the later period. It further
thick cluster of trees that would qualify as forest land and forest stated that the felling of trees might have taken place after
as defined by the orders of this Court would not cease to be F F October, 2006. Mr. Bhushan invited our attention to the order
so simply because the parameters adopted by the Expert of this Court in the case of T.N. Godavarman v. Union of India,
Committee were deficient and inconsistent with this Courts (2006) 5 SCC 28 (paragraphs 16, 18, 33, 37, 38) to show that
orders. In support of the submission that there was actually a this Court had accepted the reliability of the FSI report based
forest in that area that was cut down for the project he relied on satellite imagery.
upon the report of the FSI dated August 7, 2009 in which the G G 17. Mr. Bhushan also relied upon the report of the CCF,
forest cover status at the project site based on IRS 1D/P6 LI88
MoEF, Lucknow, a reference to which has already been made
III data is shown as follows:
above. He also relied upon the first response of the MoEF,
where it was stated that at the project site there was a good
patch of forests and which could be treated as a deemed forest
H H and further that the report of the FSI showed that the forest cover
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 813
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
existed there up to 2006 and the felling of trees might have
taken place after that only. Mr. Bhushan lastly relied upon the
Google image which has a dark patch in approximately 1/3rd
of the area interpreted by him as a dense cover of trees.
18. In support of the submissions learned counsel relied
greatly on the order passed by this Court on December 12,
1996 in the case of T.N Godavarman Thirumulkpad. He also
relied upon the decisions of this court in Samatha v. State of
Andhra Pradesh & Ors., (1997) 8 SCC 191 (paragraphs 119,
120, 121, 123) and M. C. Mehta v. Union of India & Ors.,
(2004) 12 SCC 118 (paragraphs 55, 56, 57).
19. The point raised by Mr. Bhushan may be valid in certain
cases but in the facts of the case his submissions are quite
out of context. In support of the applicants case that there used
to be a forest at the project site he relies upon the report of the
CCF based on site inspection and the Google image and most
heavily on the FSI report based on satellite imagery and
analysed by GSI application. A satellite image may not always
reveal the complete story. Let us for a moment come down from
the satellite to the earth and see what picture emerges from
the government records and how things appear on the ground.
20. In the revenue records, none of the khasras (plots)
falling in the project area was ever shown as jungle or forest.
According to the settlement year 1359 Fasli (1952A.D.) all the
khasras are recorded as agricultural land, Banjar (uncultivable)
or Parti (uncultivated).
21. NOIDA was set up in 1976 and the lands of the project
area were acquired under the Land Acquisition Act mostly
between the years 1980 to 1983 (two or three plots were
notified under sections 4/6 of the Act in 1979 and one or two
plots as late as in the year 1991). But the possession of a very
large part of the lands under acquisition (that now form the
project site) was taken over in the year 1983. From the details
of the acquisition proceedings furnished in a tabular form
814 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A (annexure 9 to the Counter Affidavit on behalf of respondents
no. 2 & 3) it would appear that though on most of the plots there
were properties of one kind or the other, there was not a single
tree on any of the plots under acquisition. The records of the
land acquisition proceedings, thus, complement the revenue
B B record of 1952 in which the lands were shown as agricultural
and not as jungle or forest. There is no reason not to give due
credence to these records since they pertain to a time when
the impugned project was not even in anyones imagination and
its proponents were no where on the scene. Further, in the
C C second response of the MoEF, dated August 22/24, 2009 there
is a reference to the information furnished by the Deputy
Horticulture Officer, NOIDA according to which plantations were
taken up along with seed sowing of Subabul during the year
1994-95 to 2007-08. A total of 9,480 saplings were planted
D (including 314 saplings planted before 1994-95). NOIDA had
D
treated this area as an Urban Park.
22. It is, thus, to be seen that on a large tract of land (33.45
hectares in area) that was forever agricultural in character, trees
were planted with the object of creating an urban park (and not
E E for afforestation!). The trees, thus, planted were allowed to stand
and grow for about 12-14 years when they were cut down to
make the area clear for the project.
23. The satellite images tell us how things stand at the time
F F the images were taken. We are not aware whether or not the
satellite images can ascertain the different species of trees,
their age and the girth of their trunks, etc. But what is on record
does not give us all that information. What the satellite images
tell us is that in October, 2006 there was thin to moderately
G dense tree cover over about half of the project site. But this fact
G
is all but admitted; the State Government admits felling of over
6000 trees in 2008. How and when the trees came up there
we have just seen with reference to the revenue and land
acquisition proceedings records. Now, we find it inconceivable
that trees planted with the intent to set up an urban park would
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 815
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
turn into forest within a span of 10 to 12 years and the land that
was forever agricultural, would be converted into forest land.
One may feel strongly about cutting trees in such large numbers
and question the wisdom behind replacing a patch of trees by
large stone columns and statues but that would not change the
trees into a forest or the land over which those trees were
standing into forest land.
24. The decisions relied upon by Mr. Bhushan are also of
no help in this case and on the basis of those decisions the
trees planted in the project area can not be branded as forest.
25. In order dated December 12, 1996 in Godavarman
Thirumulkpad this Court held and observed as under:
3. It has emerged at the hearing, that there is a
misconception in certain quarters about the true scope of
the Forest Conservation Act, 1980 (for short the Act) and
the meaning of the word forest used therein. There is also
a resulting misconception about the need of prior approval
of the Central Government, as required by Section 2 of the
Act, in respect of certain activities in the forest area which
are more often of a commercial nature. It is necessary to
clarify that position.
4. The Forest Conservation Act, 1980 was enacted with
a view to check further deforestation which ultimately
results in ecological imbalance; and therefore, the
provisions made therein for the conservation of forests and
for matters connected therewith, must apply to all forests
irrespective of the nature of ownership or classification
thereof. The word forest: must be understood according
to its dictionary meaning. This description covers all
statutorily recognised forests, whether designated as
reserved, protected or otherwise for the purpose of
Section 2(i) of the Forest Conservation Act. The term
forest land, occurring in Section 2, will not only include
forest as understood in the dictionary sense, but also any
816 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A area recorded as forest in the Government record
irrespective of the ownership. This is how it has to be
understood for the purpose of Section 2 of the Act. The
provisions enacted in the Forest Conservation Act, 1980
for the conservation of forests and the matters connected
B B therewith must apply clearly to all forests so understood
irrespective of the ownership or classification thereof. This
aspect has been made abundantly clear in the decisions
of this Court in Ambica Quarry Works v. State of Gujarat,
Rural Litigation and Entitlement Kendra v. State of U.P.
and recently in the order dated 29.11.1996 (Supreme
C C
Court Monitoring Committee v. Mussorie Dehradun
Development Authority). The earlier decision of this Court
in State of Bihar v. Banshi Ram Modi has, therefore, to
be understood in the light of these subsequent decisions.
We consider it necessary to reiterate this settled position
D D
emerging from the decisions of this Court to dispel the
doubt, if any, in the perception of any State Government
or authority. This has become necessary also because of
the stand taken on behalf of the State of Rajasthan even
at this late stage, relating to permissions granted for
E E mining in such area which is clearly contrary to the
decisions of this court. It is reasonable to assume that any
State Government which has failed to appreciate the
correct position in law so far, will forthwith correct its stance
and take the necessary remedial measures without any
F F further delay.
26. In the above order the Court mainly said three things:
one, the provisions of the FC Act must apply to all forests
irrespective of the nature of ownership or classification of the
G G forest; two, the word forest must be understood according to
its dictionary meaning and three, the term forest land,
occurring in section 2, will not only include forest as
understood in the dictionary sense, but also any area recorded
as forest in the Government record irrespective of the
H H ownership. The order dated December 12, 1996 indeed gives
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 817
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
a very wide definition of forest. But any definition howsoever
wide relates to a context. There can hardly be a legal definition,
in terms absolute, and totally independent of the context. The
context may or may not find any articulation in the judgment or
the order but it is always there and it is discernible by a careful
analysis of the facts and circumstances in which the definition
was rendered. In the order the Court said The term forest land
occurring in section 2, will not only include forest as
understood in the dictionary sense, but also an area recorded
as forest in the Government record irrespective of the
ownership (emphasis added). Now what is meant by that is
made clear by referring to the earlier decision of the court in
State of Bihar v. Banshi Ram Modi, (1985) 3 SCC 643. In the
earlier decision in Banshi Ram Modi the Court had said:
10Reading them together, these two parts of the
section mean that after the commencement of the Act no
fresh breaking up of the forest land or no fresh clearing of
the forest on any such land can be permitted by any State
Government or any authority without the prior approval of
the Central Government. But if such permission has been
accorded before the coming into force of the Act and the
forest land is broken up or cleared then obviously the
section cannot apply..
27. The observation in Banshi Ram Modi (which again
was made in the peculiar context of that case!) was sought to
be interpreted by some to mean that once the land was broken
in course of mining operations it ceased to be forest land. It
was in order to quell the mischief and the subversion of section
2 of the FC Act that the court in the order dated December 12,
1996 made the observation quoted above italics.
28. In Samatha, this Court was dealing with cases of grant
of mining leases to non tribals in reserved forests and forests
that were notified as scheduled area under the Andhra Pradesh
Scheduled Areas Land Transfer Regulation, 1959. It was
818 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A contended on behalf of the lease holders that the Regulation
and the Mining Act do not prohibit grant of mining leases of
government land in the scheduled area to non-tribals. The
Forest (Conservation) Act or the Andhra Pradesh Forest Act,
1967, does not apply to renewal of leases. The observations
B B in regard to what constitutes a forest made in paragraphs 119,
120, 121 and 123, relied upon by Mr. Bhushan, was made
when it was sought to be argued by the leaseholders that unless
the lands are declared either as reserved forests or forests
under the Andhra Pradesh Forest Act, 1967, the FC Act had
C C no application. Hence, there was no prohibition to grant mining
lease or to renew it by the State government. The context in
which the Court expanded the definition of forest is, thus,
manifest and evident.
29. In M.C. Mehta v. Union of India & Ors., (2004) 12
D D SCC 118, in the paragraphs relied upon by Mr. Bhushan, this
Court was considering the question of permitting mining in
Aravalli Hills where large scale afforestation was done by
spending crores of rupees of foreign funding in an effort to
repair the deep ravages caused to the Aravalli Hills range over
E E the years by mostly illegal mining. The context is once again
evident.
30. Almost all the orders and judgments of this Court
defining forest and forest land for the purpose of the FC Act
F F were rendered in the context of mining or illegal felling of trees
for timber or illegal removal of other forest produce or the
protection of National Parks and wild life sanctuaries. In the
case in hand the context is completely different. Hence, the
decisions relied upon by Mr. Bhushan can be applied only to
G an extent and not in absolute terms. To an extent Mr. Bhushan
G
is right in contending that a man made forest may equally be a
forest as a naturally grown one. He is also right in contending
that non forest land may also, with the passage of time, change
its character and become forest land. But this also cannot be
a rule of universal application and must be examined in the
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 819
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
overall facts of the case otherwise it would lead to highly
anomalous conclusions. Like in this case, Mr. Bhushan argued
that the two conditions in the guidelines adopted by the State
Level Expert Committee, i.e., (i) trees mean naturally grown
perennial trees and (ii) the plantation done on public land or
private land will not be identified as forest like area were not
consistent with the wide definition of forest given in the
December 12, 1996 order of the Court and the project area
should qualify as forest on the basis of the main parameter
fixed by the Committee. If the argument of Mr. Bhushan is
accepted and the criterion fixed by the State Level Expert
Committee that in the plains a stretch of land with an area of 2
hectares or above, with the minimum density of 50 trees/
hectare would be a deemed forest is applied mechanically and
with no regard to the other factors a greater part of Lutyens
Delhi would perhaps qualify as forest. This was obviously not
the intent of the order dated December 12, 1996.
31. In light of the discussion made above, it must be held
that the project site is not forest land and the construction of
the project without the prior permission from the Central
Government does not in any way contravene section 2 of the
FC Act.
THE PROJECT AND THE EIA NOTIFICATION 2006:
32. Mr. Jayant Bhushan next contended that the
construction of the project was started by the U.P. Government
(and was sought to be completed in great haste!) without
obtaining the prior environmental clearance from the Central
Government or the State Level Environment Impact Assessment
Authority in complete violation of the notification issued by the
Central Government on September 14, 2006 under section 3
(3) of the EP Act.
33. Before proceeding to examine the issue in detail it
would be useful to see the views taken by the different
authorities, agencies and the MoEF on the question whether
820 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A the law required prior environmental clearance for the project.
It appears that once the controversy was raised, the project
proponents, by letter dated April 24, 2009 approached the
State Level Environment Impact Assessment Authority, Uttar
Pradesh constituted under the EIA notification, 2006, seeking
B B environmental clearance for the project. In reply the SEIAA by
its letter dated May 7, 2009 stated that having regard to the
nature and the area of the project it was not covered by the
schedule of the notification No. S.O.1533 (E) dated September
14, 2006 issued by the Government of India.
C C
34. Before the CEC, the MoEF in its first response dated
August 22/24, 2009 took the stand that the project would not
require any prior environmental clearance under the EIA
notification 2006. It further stated that in the EIA notification
2006, all building/ construction projects/ area development
D D projects and townships, were categorized as category B
projects and the general condition prescribed in the
notification was not applicable to construction projects. It went
on to say that the project did not require any prior environmental
clearance under the EIA notification 2006 even though being
E E within the prescribed distance from a wildlife sanctuary/national
park or inter-state boundary. It needs to be stated here that
the first response of the MoEF before he CEC was evidently
based on the inputs received from the UP Government about
the nature of the project and the extent of constructions involved
F F in it.
35. In the second response before the CEC dated
September 2, 2009 the MoEF did not appear so sure of its
earlier stand. It stated that after its earlier letter of August 22,
24, 2009, the MoEF had received further information about the
G G
project from various sources and the fresh findings raised far-
reaching issues of public concern that extended beyond the
parameters set by the EIA notification of 2006. It further stated
that the certificate issued by the SEIAA of UP stated that the
total built-up covered area was only 9,542 square metres and
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 821
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
the report of the CCF was not clear as to the extent of the
covered area vis--vis concrete landscaping, pillar(s),
platform(s), lawn(s), tree planting, etc. To put it simply, the MoEF
was not fully in possession of the basic facts relating to the
project and its likely impact on the environment. It left the
decision in the hands of the CEC.
36. The CEC in its report to this Court dated September
4, 2009 held and found that the project was covered by the EIA
notification 2006 and it required prior environmental clearance
in terms of the notification. In its report, the CEC observed as
follows:
30. The CEC does not agree with the stand taken by the
State Government as well as the MoEF that the project
does not require environmental clearance in terms of the
MoEF notification dated 14.9.2006. The MoEF, as well as
the State of Uttar Pradesh has taken this view primarily on
the ground that the built up area of the project is less than
20,000 sq. meter and therefore the project does not
require environmental clearance. The built up area has
been calculated by the State of Uttar Pradesh on the basis
of its building bye-laws. The CEC is of the view that for
the purpose of environmental clearance, the building bye-
laws of the State Government have no relevance at all. As
per the details provided by the State Government itself, out
of 33.43 ha of the project area, 3499.50 sq. meter is being
used for memorial building & toilet blocks, 3500 sq. meter
is being used for utilities and facilities, 129140.80 sq.
meter area is being used for hard landscape including for
platforms, plinth, sculptures & surrounded paved area, path
etc. Another 34850 sq. meter area is to be used for
vehicular movement. The above comes to more than 50%
of the project area which in CECs view qualify to be
included in the activity area. The project cost is about Rs.
685 crores. As per the MoEF notification dated 14.9.2006,
for building/construction project, in the case of facilities
822 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A open to the sky, the activity area is to be included in the
built up area. In the present case, after including the activity
area the total built up area, for the purpose of environmental
clearance, far exceeds the threshold limit of 20,000 sq.
meter of built up area provided in the Notification. The
B B MoEF, on its own admission, has merely relied on the
details of the built up area as provided by the State
Government without independently verifying it and has not
included the area falling in the category of activity area. In
any case, even if there was any doubt in the MoEF
regarding the applicability of the environmental clearance
C C
in the present case, in view of precautionary principle it
should have erred on the side of the caution and should
have insisted for the environmental clearance.
37. When the matter finally came up before the Court the
D D MoEF was once again asked to take a clear stand on the issue
whether the project was covered by the EIA notification 2006.
The MoEF filed a brief affidavit on October 21, 2009 in which
it acknowledged that the CEC in its report dated September
4, 2006 had stated that the State of UP should be directed to
E E seek environmental clearance for the project from the MoEF
in terms of the notification. The MoEF, however, reiterated its
stand in very definite and unequivocal terms that the project in
question did not fall within the ambit of the EIA notification 2006
and no environmental clearance was required for such kind of
F F projects. The stand of the MoEF was based on the premise
that the area of the project (33.43 hectares) was less than 50
hectares and its built up area (9,542 square metres) was less
than 20,000 square metres. Having thus made its stand clear,
the MoEF went on to say that in case the Court desired the
G G project to be appraised from the environmental angle it would
do so and submit its recommendations. It, however, put in a
caveat that such appraisals were made before the
commencement of the construction activity at the site and in the
present case the project was already in the advanced stage of
H H construction.
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 823
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
38. On April 22, 2010, this Court passed an order in which
after extracting the relevant passage from the affidavit it
directed the MoEF, to make a study of the environmental impact
of the project. The MoEF was further directed to suggest
measures for undoing the environmental degradation, if any,
caused by the project and the amelioration measures to
safeguard the environment, with particular reference to the
adjacent bird sanctuary.
39. As directed by the Court, the MoEF asked the project
proponents to submit the details concerning the project in the
format prescribed under the EIA notification. It also asked the
project proponents to have the environmental impact
assessment of the project done by some expert agencies. As
required by the MoEF, NOIDA submitted the requisite details
concerning the project and the reports on the environmental
impact assessment of the project based on studies made by
three different agencies (We shall have the occasion to
consider those reports in the latter part of the judgment).
Thereafter, the Expert Appraisal Committee (EAC) constituted
by the Central Government for the purpose of the EIA
notification examined the project in its 88th meeting held on
June 28-29, 2010 and gave its report which is brought on
record along with an affidavit filed by the State Government on
July 22, 2010. In this report the EAC made as many as 15
recommendations to check any environmental degradation or
any harm to the Okhla Bird Sanctuary by the project.
40. The MoEF filed yet another affidavit before the Court
on August 19, 2010 in which it tried to explain the distinction
between clauses 8(a) and 8(b) in the schedule to the EIA
notification, 2006 without changing its stand that the project in
question did not come within the ambit of the notification.
41. In course of the oral hearing as well, Mr. Raval, learned
ASG, firmly maintained that the project did not come under the
notification and no prior environmental clearance was required
for it under the notification.
824 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 42. Mr. Harish Salve, learned amicus curiae and Mr.
Jayant Bhushan, Counsel appearing for the applicants, both
staunchly contended that the stand of the MoEF was patently
wrong and incorrect. The project clearly fell within the ambit of
the EIA notification 2006. The CEC had taken the correct view
B B on the issue. And to start the construction of the project and
take it into an advanced stage of construction without obtaining
prior environmental clearance from the Central Government was
in blatant violation of the provisions of the notification. Mr. Salve
also criticized the Central Government for taking a shifting and
C C inconsistent stand on the issue.
43. Now is the time to take a closer look at the provisions
of the EIA notification no. S.O.1533(E). dated September 14,
2006 issued by the Central Government under section 3 (3) of
the EP Act and to consider the submissions advanced by the
D D two sides on that basis. Section 3 (3) of the EP Act provides
as follows:
3. Power of Central Government to take measures
to protect and improve environment.
E E
(1) xxxxxx
(2) xxxxxx
(3) The Central Government may, if it considers it
F F necessary or expedient so to do for the purpose of this
Act, by order, published in the Official Gazette, constitute
an authority or authorities by such name or names as may
be specified in the order for the purpose of exercising and
performing such of the powers and functions (including the
power to issue directions under section 5) of the Central
G G
Government under this Act and for taking measures with
respect to such of the matters referred to in sub-section
(2) as may be mentioned in the order and subject to the
supervision and control of the Central Government and the
provisions of such order, such authority or authorities may
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 825
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
exercise and powers or perform the functions or take the
measures so mentioned in the order as if such authority
or authorities had been empowered by this Act to exercise
those powers or perform those functions or take such
measures.
44. In exercise of the powers conferred by the above
provision the Central Government in the Ministry of Environment
and Forests issued notification no. S. O. 1533(E) on September
14, 2006, which in so far as relevant for the present is
reproduced below:
MINISTRY OF ENVIRONMENT AND FORESTS
Notification
New Delhi, the 14th September, 2006
S.O. 1533(E).-whereas xxxxxx
And whereas xxxxxx
And whereas xxxxxx
2. Requirements of prior Environmental
Clearance (EC):- The following projects or activities shall
require prior environmental clearance from the concerned
regulatory authority, which shall hereinafter referred to be
as the Central Government in the Ministry of Environment
and Forests for matters falling under Category A in the
Schedule and at State level the State Environment Impact
Assessment Authority (SEIAA) for matters falling under
Category B in the said Schedule, before any construction
work, or preparation of land by the project management
except for securing the land, is started on the project or
activity:
(i) All new projects or activities listed in the Schedule to
this notification;
826 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A (ii) Expansion and modernization of existing projects or
activities listed in the Schedule to this notification with
addition of capacity beyond the limits specified for the
concerned sector, that is, projects or activities which cross
the threshold limits given in the Schedule, after expansion
B B or modernization;
(iii) Any change in product - mix in an existing
manufacturing unit included in Schedule beyond the
specified range.
C C 3. xxxxxx
4. Categorization of projects and activities:-
(i) All projects and activities are broadly categorized in to
two categories - Category A and Category B, based on
D D the spatial extent of potential impacts and potential impacts
on human health and natural and man made resources.
(ii) All projects or activities included as Category A in the
Schedule, including expansion and modernization of
E E existing projects or activities and change in product mix,
shall require prior environmental clearance from the Central
Government in the Ministry of Environment and Forests
(MoEF) on the recommendations of an Expert Appraisal
Committee (EAC) to be constituted by the Central
F F Government for the purposes of this notification;
(iii) All projects or activities included as Category B in the
Schedule, including expansion and modernization of
existing projects or activities as specified in sub paragraph
(ii) of paragraph 2, or change in product mix as specified
G G in sub paragraph (iii) of paragraph 2, but excluding those
which fulfill the General Conditions (GC) stipulated in the
Schedule, will require prior environmental clearance from
the State/Union territory Environment Impact Assessment
Authority (SEIAA). The SEIAA shall base its decision on
H H the recommendations of a State or Union territory level
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 827 828 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]

Expert Appraisal Committee (SEAC) as to be constituted A A SCHEDULE

for in this notification. In the absence of a duly constituted
SEIAA or SEAC, a Category B project shall be treated (See paragraph 2 and 7)
as a Category A project;
LIST OF PROJECTS OR ACTIVITIES REQUIRING
5. xxxxxx PRIOR ENVIRONMENTAL CLEARANCE
B B
Project or Category with Conditions if
6. xxxxxx Activity threshold limit any
7. Stages in the Prior Environmental Clearance (EC) A B
Process for New Projects:- 8 Building/Construction projects/Area
C C Development projects and Townships
7(i) xxxxxx (1) (2) (3) (4) (5)
I. Stage (1) - Screening: In case of Category B projects 8(a) Building and 20000 sq.mtrs #(built up area for
or activities, this stage will entail the scrutiny of an Construction and <1,50,000 covered const-
application seeking prior environmental clearance made projects sq.mtrs.of built- ruction; in the
in Form 1 by the concerned State level Expert Appraisal D D up area# case of facilities
Committee (SEAC) for determining whether or not the open to the sky, it
project or activity requires further environmental studies for will be the activity
preparation of an Environmental Impact Assessment (EIA) area )
for its appraisal prior to the grant of environmental 8(b) Townships Covering an area ++All projects
clearance depending up on the nature and location E E and Area 50 ha and or under Item 8(b)
specificity of the project . The projects requiring an Development built up area shall be appraised
Environmental Impact Assessment report shall be termed projects. 1,50,000 sq . as Category B1
Category B1 and remaining projects shall be termed mtrs ++
Category B2 and will not require an Environment Impact Note:-
Assessment report. For categorization of projects into B1 F F
or B2 except item 8 (b), the Ministry of Environment and General Condition (GC):
Forests shall issue appropriate guidelines from time to
Any project or activity specified in Category B will be
time. treated as Category A, if located in whole or in part within
8. xxxxxx 10 km from the boundary of: (i) Protected Areas notified
G G under the Wild Life (Protection) Act, 1972, (ii) Critically
9. xxxxxx Polluted areas as notified by the Central Pollution Control
10. xxxxxx Board from time to time, (iii) Notified Eco-sensitive areas,
(iv) inter-State boundaries and international boundaries.
11. xxxxxx
Specific Condition (SC):
12. xxxxxx H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 829 830 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]

xxxxxx A A 45. In substance the EIA notification provides that all

projects and activities enumerated in its Schedule would
(II) Basic Information require prior environmental clearance before any construction
xxxxxx work or preparation of land for the project is started on the
project or activity. The projects and activities depending upon
(III) Activity B B various factors such as the potential hazard to environment,
location, the extent of area involved, etc. are categorized in
1. Construction, operation or decommissioning categories A or B. For projects or activities falling in category
of the Project involving actions, which will A, the competent authority to grant prior environmental
cause physical changes in the locality clearance is the MoEF and for projects or activities falling in
(topography, land use, changes in water C category B, the State Environment Impact Assessment
C
bodies, etc.) Authority (SEIAA). The constitution of the SEIAA is provided
S. Information/Checklist Yes/ Details thereof for in clause 3 of the notification with which we are not
No. confirmation No (with approxi- concerned in this case. In certain cases a project or activity,
mate quantities / though categorized in category B may be treated as category
rates, wherever D A by application of the general condition (on account of its
D
possible) with location being within a distance of ten km from a protected area
source of notified under the Wildlife (Protection) Act etc.). In other words,
information data if a project or activity attracts the general condition, the
1.1 Permanent or temporary change competent authority to grant prior environmental clearance in
in land use, land cover or that case would be the Central Government, even though, the
topography including increase in E E
project or activity may figure in the Schedule in category B.
intensity of land use (with respect Further, projects or activities categorized as category B may
to local land use plan) or may not require an environmental impact assessment before
1.2 Clearance of existing land, the grant of environmental clearance depending on the nature
vegetation and buildings? and location specificity of the project. The projects requiring an
1.3 Creation of new land uses? F F EIA report shall be termed as category B1 and the remaining
1.4 Pre-construction investigations shall be termed as B2 and will not require an EIA report. For
e.g. bore houses, soil testing? categorization of projects into B1 and B2, the MoEF would
1.5 Construction works? issue appropriate guidelines from time to time. The schedule
to the notification has a table that is divided into five columns.
1.6 Xxxxxx G G The first column contains the serial numbers, and the second
|
the description of the project or activities; the third column lists
|
|
those projects or activities that fall in category A and the fourth,
| those falling in category B; the fifth column against each item
1.31 Xxxxxx indicates whether any general or specific condition applies to
H H the project or activity described in that item. In some cases
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 831
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
where the project or the activity is shown in column 4 as
category B, the application of the general condition is
expressly indicated in column 5 of the table.
46. For the project under consideration, the relevant entries
in the schedule are 8(a) and 8(b). Both items 8 (a) and 8 (b)
are listed in column 4, i.e., in category B. In column 5, against
any of the two items, there is no mention of application of the
general condition but it is expressly said that all projects in item
8(b) would be appraised as category B1, that is to say, for a
project under item 8(b) the prior environmental clearance must
be preceded by an environmental impact assessment.
47. Item 8(a) deals with Building and Construction projects
and the threshold mark that would bring the project within the
ambit of the notification is equal to or more than 20,000 square
metres and less than 1,50,000 square metres of built-up area.
It is further clarified that the aforementioned figures relate to
built-up area for covered construction; in case of facilities open
to the sky, the built up area would be the activity area. Item 8(b)
deals with Townships and Area Development projects and the
threshold mark for the project to come within the ambit of the
notification is an area equal to or more than 50 hectares or built-
up area of more than 1,50,000 square metres.
48. Mr. Jayant Bhushan, supported by the amicus curiae
forcibly argued that the project under consideration would clearly
fall under item 8 (a) of the Schedule. He submitted that though
the area of covered construction in the project was only 6999.50
square metres, the project by its very nature provided facilities
open to the sky and in that case, the whole of the activity area
would constitute the built-up area. He then referred to the
definition of activity [that includes (i) permanent or temporary
change in land use, land cover or topography including increase
in intensity of land use (with respect to local land use plan), (ii)
clearance of existing land, vegetation and buildings? (iii)
creation of new land uses? and (iv) pre-construction
832 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A investigations e.g. bore houses, soil testing?]. He contended
that in view of the definition of activity, virtually the entire area
of 33.43 hectares from where over 6000 trees were removed
for clearing the project site would come within the activity area
and would, thus, form the built-up area under item 8 (a) of the
B B schedule. Further, since the project was located adjacent to the
Okhla Bird Sanctuary, it would, without doubt, attract the general
condition which provided that any project or activity specified
in category B will be treated as category A, if located within
10km from the boundary of protected areas notified under the
C C Wildlife (Protection) Act, 1972. Mr. Bhushan insisted that the
general condition would apply to the project by virtue of its very
close proximity to the Okhla Bird Sanctuary, regardless of the
fact that in column 5 of the table there is no mention of
application of the general condition against item 8(a). The
application of the general condition would take the project out
D D
of category B and put it in category A for which the competent
authority to grant prior environmental clearance is the MoEF.
He then referred to the office memo dated December 2, 2009
issued by the MoEF which in course of hearing was, in all
fairness, produced by Mr. Raval, learned ASG, appearing for
E E the MoEF. The office memorandum inter alia provides that
..while granting environmental clearance to projects involving
forestland, wildlife habitat (core one of elephant/tiger reserve,
etc.) and or located within 10km of the National Park/ Wildlife
Sanctuary (at present the distance of 10km has been taken in
F F conformity with the order dated 4.12.2006 in writ petition no.
460 of 2004 in the matter of Goa Foundation v. Union of India),
a specific condition shall be stipulated that the environmental
clearance is subject to their obtaining prior clearance from
forestry and wildlife angle including clearance from the
G G Standing Committee of the National Board for Wildlife as
applicable... Mr. Bhushan submitted that the project under
consideration thus does not only require a prior environmental
clearance but also a clearance from forestry and wildlife angle
including clearance from the Standing Committee of the
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 833
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
National Board for Wildlife as precondition for the grant of
environmental clearance by the MoEF.
49. Mr. Bhushans arguments proceed in four steps. He
first puts the project in item 8(a) of the Schedule as a Building
and Construction project. Then, in the second step, in order to
cross the threshold marker he refers to the definition of activity
to contend that since the project provides facilities open to sky
its entire area of 33.43 hectares would constitute the built-up
area. In the third step, he brings in the general condition (even
though in regard to item 8(a) its application is not mentioned
in column 5 of the table) that would make the Central
Government as the competent authority for granting prior
environmental clearance for the project. And lastly, in the fourth
step he refers to the office memorandum dated December 2,
2009 to contend that a clearance from the Standing Committee
of the National Board for Wildlife was a precondition for the
grant of the prior environmental clearance by the MoEF.
50. Long and elaborate submissions were made from both
sides in regard to the application of the general condition to
this project. Mr. Venugopal, senior counsel appearing for the
State of U.P. and Mr. Raju Ramachandran, senior counsel
appearing for NOIDA submitted that the general condition would
have no application to projects under items 8(a) or 8(b) for the
simple reason that in regard to those items there was no
mention of the general condition in column 5 of the table. Mr.
Venugopal submitted, and not entirely without substance that
if the general condition were to apply to items 8(a) and 8(b)
without being mentioned in column 5 of the table then it would
not make any sense to expressly mention it in column 5 in
respect of some other projects and activities classified in
category B in the schedule.
51. Mr. Raval, learned ASG, produced before the Court,
the draft notification no. S.O. 1324E, published in the Gazette
of India: Extraordinary of September 15, 2005. In the draft
notification there were two general conditions, GC1 and GC2
834 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A and in regard to (a) Construction of all projects (residential and
non residential), and (b) New Townships and Settlement
Colonies, the application of GC2 was expressly indicated in
column 5 of the table. Later on, in a meeting held on July 6,
2006, chaired by none else than the Prime Minister, it was
B B decided to leave all construction and township projects, housing
and area development projects in the hands of the State
Government. It was further decided that for all projects involving
more than 1,50,000 square metres of built up area and/or
covering more than 50 hectares, the EIS requirements should
C C correspond to category A, even though the clearance would
be granted by the State Government. Mr. Raval submitted that
in light of the decision taken in that meeting, in the final
notification issued on September 14, 2006, the application of
general condition was removed in respect of items 8(a) and
8(b) in the schedule. In view of the changes made in the two
D D
items in the final notification, Mr. Raval also contended that the
general condition has no application to items 8(a) and 8(b),
regardless of the projects proximity to any sanctuary or
reserved area.
E E 52. But before considering the latter three limbs of Mr.
Bhushans arguments it is necessary to examine whether the
project in question can be legitimately categorized as a Building
and Construction project falling under item 8(a) of the schedule
which is the first premise of his arguments.
F F
53. In the schedule to the notification Building and
Construction projects and Townships and Area Developments
projects are enumerated separately, the former in item 8(a)
and the latter in item 8(b). This would normally suggest that the
G notification treats those two kinds of projects separately and
G
differently. It would, therefore, be reasonable to say that an
Area Development project though involving a good deal of
construction would yet not be a Building and Construction
project. When it was pointed out to Mr. Bhushan that the project
in question may be put more appropriately in category 8(b) as
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 835
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
an Area Development project rather than a Building and
Construction project under category 8(a), in reply he took a line
that nullifies any distinction between the two. Mr. Bhushan
submitted that so far as construction projects are concerned
there is no qualitative difference between items 8(a) and 8(b)
and the difference between the two items was only quantitative.
Projects were categorized under items 8(a) or 8(b) as Building
and Construction projects or Townships and Area
Development projects not on the basis of their nature and
character but depending upon the extent of construction.
Learned counsel pointed out that the upper limit under item 8(a)
(1,50,000 square metres of built-up area) was the threshold
mark under item 8(b) and contended that this was a clear
indication that projects with built up area up to 1,50,000 square
metres would be defined as Building and Construction
projects and projects with built up area in excess of 1,50,000
square metres would be categorized as Townships and Area
Development projects. In support of the contention, Mr.
Bhushan gave the example of a Building and Construction
project, consisting of a number of multi-storied buildings, the
aggregate of the built-up area of which exceeds 1,50,000
square metres. Mr. Bhushan submitted that since the total built-
up area of the project crosses the upper limit of item 8(a) the
project would not fall within that item. But at the same time since
the project is a Building and Construction project and not a
Township and Area Development project, it would not come
under item 8(b) and this would be indeed a highly anomalous
position where a project with a smaller built-up area would fall
within the ambit of the notification, whereas a project with a
larger built-up area would escape the rigours of the notification.
54. The amicus, also arguing in the same vein, submitted
that as far as building and construction projects are concerned
there was no qualitative difference in items 8(a) and 8(b) of the
schedule to the notification. A combined reading of the two
clauses of item 8 of the schedule would show the continuity in
the two provisions; 1,50,000 square metres of built up area that
836 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A was the upper limit in item 8(a) was the threshold marker in
item 8(b). This clearly meant that building and construction
projects with built-up area/activity area between 20000 square
metres to 1,50,000 square metres would fall in category 8 (a)
and projects with built up area of 1,50,000 square metres or
B B more would fall in category 8 (b). The amicus further submitted
that though it was not expressly stated, the expression Built Up
area in item 8(b) must get the same meaning as in item 8(a),
that is to say, if the construction had facilities open to sky the
whole of the activity area must be deemed to constitute the
C C built-up area.
55. It is extremely difficult to accept the contention that the
categorization under items 8 (a) and 8 (b) has no bearing on
the nature and character of the project and is based purely on
the built up area. A building and construction project is nothing
D D but addition of structures over the land. A township project is
the development of a new area for residential, commercial or
industrial use. A township project is different both quantitatively
and qualitatively from a mere building and construction project.
Further, an area development project may be connected with
E E the township development project and may be its first stage
when grounds are cleared, roads and pathways are laid out and
provisions are made for drainage, sewage, electricity and
telephone lines and the whole range of other civic infrastructure.
Or an area development project may be completely
F F independent of any township development project as in case
of creating an artificial lake, or an urban forest or setting up a
zoological or botanical park or a recreational, amusement or
a theme park.
56. The illustration given by Mr. Bhushan may be correct
G G
to an extent. Constructions with built up area in excess of
1,50,000 would be huge by any standard and in that case the
project by virtue of sheer magnitude would qualify as township
development project. To that limited extent there may be a
quantitative correlation between items 8(a) and 8(b). But it must
H H be realized that the converse of the illustration given by Mr.
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 837
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
Bhushan may not be true. For example, a project which is by
its nature and character an Area Development project would
not become a Building and Construction project simply
because it falls short of the threshold mark under item 8 (b) but
comes within the area specified in item 8 (a). The essential
difference between items 8(a) and 8(b) lies not only in the
different magnitudes but in the difference in the nature and
character of the projects enumerated there under.
57. In light of the above discussion it is difficult to see the
project in question as a Building and Construction project.
Applying the test of Dominant Purpose or Dominant Nature
of the project or the Common Parlance test, i.e. how a
common person using it and enjoying its facilities would view
it, the project can only be categorized under item 8(b) of the
schedule as a Township and Area Development project. But
under that category it does not come up to the threshold marker
inasmuch as the total area of the project (33.43 hectares) is
less than 50 hectares and its built-up area even if the hard
landscaped area and the covered areas are put together
comes to 1,05,544.49 square metres, i.e., much below the
threshold marker of 1,50,000 square metres.
58. The inescapable conclusion, therefore, is that the
project does not fall within the ambit of the EIA notification S.O.
1533(E) dated September 14, 2006. This is not to say that this
is the ideal or a very happy outcome but that is how the
notification is framed and taking any other view would be doing
gross violence to the scheme of the notification.
59. Since it is held that the project does not come within
the ambit of the notification, the other three arguments based
on the activity area, the application of general condition and the
application of the office memorandum dated December 2,
2009 become irrelevant and need not be gone into in this case.
THE PROJECT AND THE OKHLA BIRD SANCTUARY:
838 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 60. Mr. Bhushan next raised the issue of the project being
located virtually adjoining the Okhla Bird Sanctuary. The very
close proximity of the project site to the bird sanctuary actually
raises issues of serious concern and poses a dilemma. On the
one hand the project proponents can not be said to have
B B broken any law or violated a definite order or direction of the
court but on the other hand the project may possibly cause
serious and irreparable harm to the bird sanctuary.
61. Before the CEC the State Government took the plea
that the project area was situated well outside the boundaries
C C
of the bird sanctuary and the construction of the project had
caused no adverse impact on the Sanctuary. It was further
stated that NOIDA which was the project proponent was equally
conscious about its responsibility in regard to the preservation
and conservation of the habitat of the Sanctuary. A management
D D plan for the Sanctuary was being prepared by the Wildlife
Institute of Dehradun for which NOIDA had released
Rs.17,35,350.00 in favour of the Institute and the NOIDA was
also planning to set up a corpus for the Scientific and effective
implementation of the Management Plan.
E E
62. On this issue the MoEF in its responses before the
CEC put the blame squarely on the State Government. It stated
that despite its letter of May 27, 2005 followed by a number of
reminders the Government of Uttar Pradesh did not submit its
F F proposal for declaration of Eco-sensitive Zone around the
Sanctuaries and National Parks. It further stated that the State
Government failed to take any steps in this regard even after
the order of this Court passed on December 4, 2006 in Writ
Petition (Civil) No. 460/2004 by which the MoEF was directed
to give all the States final opportunity to send their proposals
G G
for declaration of Eco-sensitive Zones to the MoEF within four
weeks. The MoEF made the accusation that in the case of the
present project the State Government of Uttar Pradesh was
trying to take advantage of its own omission. In its second
response dated August 22-24, 2009, however, the MoEF,
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 839
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
though still blaming the UP Government for its failure to notify
the Eco-sensitive Zones conceded that till Eco-sensitive zone
is declared the construction work did not seem to violate any
law/Act. But it went on to say that having regard to its location
the project was better suited to be made part of extension of
the bird sanctuary.
63. The State Government of Uttar Pradesh took the stand
that no proposals were sent from its side because the MoEF
failed to issue the necessary guidelines for the purpose. On
behalf of the State of UP, reference was made to a meeting
called by the Director General of Forests and Special Secretary,
MoEF on May 13, 2010. In that meeting it was decided that
the Director General of Forests, MoEF would constitute a
committee of officers to finalize the guidelines for declaration
of eco-sensitive zones. A reference was also made to a
subsequent meeting held on July 4, 2010 at Lucknow in which
the attention of the Government of India was drawn to the
decision taken in the earlier meeting. Yet, no guidelines were
issued by the Government of India so far.
64. The CEC in its report to the Court dated September
4, 2009 put the blame on the State Government of UP for its
omission to identify the Eco-sensitive zones but like the MoEF
seemed to accept that in the absence of a decision/notification
there was no legal bar against the construction of the project
on the ground that it was sited adjacent to the bird sanctuary.
In its report to the Court, the CEC observed as follows:
32. The issue regarding identification/notification of Eco-
Sensitive Zone around the National Park and Sanctuaries
is presently pending for consideration before this Honble
Court. The National Board of Wild Life (NBWL) had earlier
decided that area within 10 km around National Parks/
Sanctuaries should be the Eco-Sensitive Zone. Later on,
it was decided by the NBWL that Eco-Sensitive Zone
should be specific to each National Park/Sanctuary. The
CEC had recommended that 500 meter around National
840 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Park/Sanctuary should be declared as Eco-Sensitive
Zone. The recommendation of the CEC has not so far
been accepted by the Honble Supreme Court after the
Learned Amicus Curiae took a view that 500 meter may
not be adequate. Pursuant to this Honble Supreme Court
B B order dated 4.8.2006 in the TWP matter, mining is
presently prohibited up to a distance of one kilometre from
the boundary of National Parks/Sanctuaries. For other
projects, no restriction has so far been imposed. The
MoEF has time and again requested the States/UTs to
identify the eco-sensitive zone around the National Parks/
C C
Sanctuaries. However, the State of Uttar Pradesh has so
far not prepared any proposal in this regard. The CEC is
of the view that in the absence of a decision/notification,
presently there is no legal restriction against the
implementation of the project on the ground that the
D D
project is adjacent to the Okhla Bird Sanctuary.
33. However, it has to be borne in mind that the project
area is hardly at a distance of 50 meter from the Okhla
Bird Sanctuary and that in all probability the project site
E E would have fallen in the Eco-Sensitive Zone, had a timely
decision in this regard been taken by the State
Government/ MoEF.
(emphasis added)
F F
65. The report of the CEC succinctly sums up the situation.
Though everyone, excepting the project proponents, views the
construction of the project practically adjoining the bird
sanctuary as a potential hazard to the sensitive and fragile
ecological balance of the Sanctuary there is no law to stop it.
G G This unhappy and anomalous situation has arisen simply
because despite directions by this Court the authorities in the
Central and the State Governments have so far not been able
to evolve a principle to notify the buffer zones around
Sanctuaries and National Parks to protect the sensitive and
H H delicate ecological balance required for the sanctuaries.
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 841
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
66. But the absence of a statute will not preclude this Court
from examining the projects effects on the environment with
particular reference to the Okhla Bird Sanctuary. For, in the
jurisprudence developed by this Court Environment is not
merely a statutory issue. Environment is one of the facets of
the right to life guaranteed under article 21 of the Constitution1.
Environment is, therefore, a matter directly under the
Constitution and if the Court perceives any project or activity
as harmful or injurious to the environment it would feel obliged
to step in. The question of the likelihood of the project causing
any adverse effects on the Okhla Bird Sanctuary must,
therefore, be examined from this angle.
67. We may note here that Mr. Venugopal presented
before us some photographs trying to show the situation on the
western boundary of the Okhla Bird Sanctuary at its Delhi end.
In the photographs there is a road, about forty to sixty feet wide,
(The Kalindikunj-Irrigation Colony-Batla Road) running right next
to the wire mesh fencing of the Sanctuary. Next to the road is
a long row of cheek by jowl concrete structures/houses that
seem to lean against one another. The road has the bustling
traffic of Delhi where all kinds of vehicles (and cattle!) appear
jostling for space. The situation on the western boundary of the
Sanctuary is indeed deplorable but that is no reason to
strangulate the Sanctuary from the NOIDA side as well.
68. Earlier in the judgment, it is noted that on April 22, 2010,
the Court had asked the MoEF to make a study of the
environmental impact of the project and to suggest measures
for undoing the environmental degradation, if any, caused by
the project and the amelioration measures to safeguard the
adjacent bird sanctuary. In pursuance of the Courts directions
the MoEF had asked the project proponents to have the
environmental impact assessment of the project done by some
expert agencies. NOIDA, the project proponent got three
studies made of the impact assessment of the project. One is
a joint study prepared by the Salim Ali Centre for Ornithology
842 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A and Natural History (SACON), Deccan Regional Station,
Hyderabad and the All India Network Project on Agricultural
Ornithology, Aacharya N.G. Ranga Agricultural University,
Hyderabad (Annexure II of Paper book Volume IV); the other
by the Wildlife Institute of India (WII) (Annexure III of Paper book
B B Volume IV); and the third by a group of three individuals that
was vetted by the Indian Institute of Technology, New Delhi
(Annexure IV of Paper book Volume IV).
69. The SACON, in its report practically gave a clean chit
to the project and made the following observations in
C C
connection with the felling of trees and the impact of the project
construction on the Okhla Bird Sanctuary:
1 The Okhla Bird Sanctuary is primarily an urban
wetland and supports primarily water birds majority
D D of them migrating and using in the winter season.
These are confined to the water bodies and
peripheral marshy vegetation and were not nesting
or roosting on the trees of the adjacent parks. The
extent of terrestrial habitat is the sanctuary is very
E E small or insignificant.
2 The entire development works including removal of
trees and construction had taken place outside the
boundary of the sanctuary and the construction and
felling of trees in the project site has not altered or
F F
interfered with the wetland ecosystem of the OBS
and the area was undisturbed.
3 The birds in the wetland of Okhla Bird Sanctuary are
estimated during the month of January by the
G G Wildlife Wing of U.P. Forest Department during
winter, which is the period for the migratory birds.
The estimation of birds are as under:
2007-08 : 17,111
H H 2008-09 : 21,272
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 843
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
2009-10 : 22,004
1 The clearing of the project site for construction and
landscaping was started in the month of the
January, 2008 and continued till 9th October, 2009.
The bird estimates during migratory season clearly
shows that there has been no reduction in the
number of birds in the sanctuary despite
developmental activities in the park. This clearly
shows that the construction and felling of trees in
the project site has no impact on OBS.
2 It appears that the existence of High tension line
along the boundary wall of the project site before
the start of the project might have been a barrier
for movement of the birds from OBS as high electro
magnetic influence would restrict the movement of
birds. Hence, the construction and the felling of
trees in the project site has minimal influence on the
OBS.
In view of the above, we are of the opinion that felling
of trees and construction have no perceptible impact on
the OBS habitat.
70. The SACON suggested certain proactive
environmental measures (see Paper book Volume IV, page
110) that would form part of this judgment.
71. The other report by the Wildlife Institute of India (WII)
is not so sanguine about the projects impact on the bird
sanctuary. In the WII report under the heading Assessment of
the Impact it was observed as under:
.From this, it is concluded that the erstwhile woodland
would have been used by 51-101 species of terrestrial
birds and was an extended habitat for the wildlife of the
Okhla Bird Sanctuary, primarily terrestrial birds. Some of
844 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A these birds may be using the erstwhile woodland for
breeding as well
..The erstwhile woodland was acting as a buffer against
these disturbances. The project area which was in
continuation with the vegetation along the left afflux bund
B B
was providing a green belt approximately 2 km long and
218 m wide on and average. Before the felling of trees this
patch might have acted as a protective green belt of
approximately 190 m width with a tree density of 203.5
trees/ ha (density of trees felled) which is now reduced to
C C approximately 28 m (between the western wall of the
project and OBS boundary of left afflux dam). From this it
is concluded that the Sanctuary lost its buffer of around
33.43 ha that will have significant impact on the OBS and
its tranquility.
D D
Such carbon sequestration value of the erstwhile
woodland was lost, though the NOIDA has already taken
up ameliorative steps in form of afforestation in and around
the project site.
E E
.With the loss of buffer and increased artificial light at
the project site, it is likely that the migratory bird population
may get affected in long run. Bird friendly diffused light with
blue tinge may reduce the negative impacts, though much
research on this aspect is required.
F F
72. The WII also suggested certain mitigation measures
(see Paper book Volume IV, page 134) that would form part
of this judgment.
G G 73. The IIT, New Delhi in its review of the report prepared
by the group of three people does not record any serious
negative finding in regard to the effects that the project may
have on the Sanctuary.
74. Finally, the Expert Appraisal Committee (EAC)
H H constituted by the Government of India, MoEF in its 88th
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 845
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
meeting held on June 28-29, 2010, reviewed the project in
question in light of the aforementioned reports and made a
number of recommendations (Paper book Volume III, page 32)
that would form part of this judgment.
75. It is significant to note that none of the expert bodies
has taken the view that the project is so calamitous or ruinous
for the bird sanctuary that it needs to be altogether scrapped
in order to save the Sanctuary. The expert bodies have given
recommendations which allow the completion of the project
subject to certain conditions. On behalf of the State of U.P. it
is unequivocally stated that all the conditions laid in the reports
of the Expert Bodies are acceptable to the State Government/
NOIDA in their entirety. In light of the two study reports and the
report submitted by the EAC, we see no justification for
directing the demolition of the constructions made in the project,
as prayed for on behalf of the applicants. We would rather allow
the project to be completed, subject, of course to the conditions
suggested by the three expert bodies and further subject to the
directions contained herein below.
76. It may be noted that the report of the WII has focused
on the felling of trees resulting in the disappearance of the
woodland that acted as a protective buffer for the bird sanctuary
and its first recommendation is to compensate the loss of
vegetation. It has secondly focused on the increased artificial
light at the project site, which is likely to affect the migratory bird
population in the long run. Apart from this, we feel that the extent
of stone and concrete constructions in the name of hard
landscaping is highly out of proportion. In the modified layout
plan, the project proponents have reduced the area under hard
surface to 35.54% of the total project area. In our opinion, even
that is unacceptable from the environmental point of view. The
area under hard surface, whether covered, uncovered (including
pathways and boundary wall etc.) or of any kind whatsoever
must not exceed 25% of the total project area; of the rest, 25%
should be used for soft/green landscaping and the remaining,
846 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A preferably 50% must have a thick cover of trees of the native
variety, a list of which is given by the State of UP (Annexure
4(b), Paper book Volume IV) The plantation of trees should be
especially dense towards the Okhla Bird Sanctuary on the
western side of the project area. Any construction work should
B B commence only on completion of the planting of the trees.
77. In order to ensure full compliance with the
recommendations of the expert bodies (which form part of the
judgment) and the directions of this Court, the construction of
the project needs to be overseen by an expert committee. One
C C member of the committee, preferably an ornithologist will be
nominated by the MoEF, the other member will be nominated
by the CEC in consultation with the amicus and the Chairman-
cum-CEO of NOIDA will be the member-secretary of the
committee. The committee should be constituted within two
D D weeks from today.
78. It is made clear that the above directions are given in
the peculiar facts of this case and nothing said in the judgment
shall form precedent when the court is hearing the matter of the
E E buffer zones.
79. Before putting down the records of the case a few
observations may not be out of place. The EIA notification
dated September 14, 2006 urgently calls for a close second
look by the concerned authorities. The projects/activities under
F F items 8(a) and 8(b) of the schedule to the notification need to
be described with greater precision and clarity and the
definition of built-up area with facilities open to the sky needs
to be freed from its present ambiguity and vagueness. The
question of application of the general condition to the projects/
G G activities listed in the schedule also needs to be put beyond
any debate or dispute. We would also like to point out that the
environmental impact studies in this case were not conducted
either by the MoEF or any organization under it or even by any
agencies appointed by it. All the three studies that were finally
H H placed before the Expert Appraisal Committee and which this
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 847
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
Court has also taken into consideration, were made at the
behest of the project proponents and by agencies of their
choice. This Court would have been more comfortable if the
environment impact studies were made by the MoEF or by any
organization under it or at least by agencies appointed and
recommended by it.
80. The IAs stand disposed of with the above observations
and directions.
D.G. IAs disposed of.
APPENDIX I (by SACON):
7. SUGGESTED PROACTIVE ENVIRONMENTAL
MEASURES
Although there appears to be no perceptible impact, as a
precautionary approach, we suggest following measures for the
overall improvement of the OBS:
1. The periodical removal of water hyacinth should be
ensured for better quality of water.
2. Artificial nest boxes should be placed along the
western boundary of the sanctuary and adjoining
parts to enhance breeding potential of birds.
3. Periodical monitoring of water quality parameters
should be undertaken to enhance wetland
dependent species and their population.
4. Regular monitoring of population of avi fauna
should be undertaken. On the terrestrial habitat, also
monitoring of small mammals may be carried out.
5. Extensive planting of native species suitable for
urban habitat should be done more than 10 times
in and around the project area. This will in turn help
in sustainability of key bird species. It is noteworthy
848 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A to mention that NOIDA Authority has already
planted 1,70,000 saplings.
6. For the scientific management of the OBS, the
prescriptions of the Management Plan under
preparation by the Wildlife Institute of India,
B B Dehradun should be followed with necessary
financial support.
7. Inside the sanctuary, battery operated vehicles
should be used for visitors.
C C
8. For the effective protection and management of the
OBS, the sanctuary should be suitably fenced.
9. In view of its unique location and interspersion of
ecological settings of various landscape elements,
D D it is suggested that the proposed park may have
an ecological interpretation centre.
APPENDIX II (by WII):
5. SUGGESGED MITIGATION MEASURES
E E
To mitigate the loss of tree cover and the change in landscape
structure due to the construction of the Park and subsequent
anticipated increase in disturbance due to the increased human
activities adjacent to the OBS, following mitigation measures
F F have been suggested:
(1) Re-vegetation of the Project site to compensate the
loss of vegetation: Ameliorative measures have
already been taken up by the NOIDA by planting
both native and exotic species within in the project
G G
area and on the eastern flank of left afflux bund of
the Yamuna River/OBS at close spacing. However,
emphasis should be given to propagate only the
native species.
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 849
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
(2) Reduction of adverse impact on the OBS: It is
suggested that buffer at the north and north eastern
side of the Sanctuary to reduce direct disturbance
to the OBS may be created. The area north of the
weir bund of the OBS is a promising site for water
birds which prefer shallow water or grass growth
particularly geese and waders. It is suggested that
the waterlogged Yamuna floodplain north to the
OBS and up to the DND flyover having an area of
130 ha (Fig.1) may be included with the OBS or
protection to it as the buffer under the provision of
WPA, 1972 be provided.
The strip of woodland with an area of 24 ha
immediately to the north of the project area (Fig.1)
needs to be protected as buffer of the OBS also
and its land-use needs to be maintained unaltered.
Being in close proximity of the OBS it will have an
ameliorative effect on the Sanctuary. It would also
provide additional habitat to the terrestrial bird
species of the OBS.
Efforts should also be made to keep the intensity
of artificial light and noise at the project site to a
bare minimum during night, especially after sunset
in migratory seasons of birds (October-March). Bird
friendly diffused light with blue tinge during night,
may reduce the negative impacts if any on OBS,
though much research on this aspect is required.
It is suggested that at the periphery of the OBS,
fence wherever not existing be created and the
breach in the existing fence be mended on priority.
(3) Eliciting support from the Government of Delhi for
the conservation of OBS: As the OBS is a interstate
Protected Area having open access from all side
it is imperative that the Government of Delhi may
850 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A also be persuaded to take active part in its
management.
(4) Ensuring financial commitment for the improved
conservation management of the Park: As per the
B Order of the Honorable Supreme Court granted for
B
other development project adjacent to Protected
Area (e.g. IA No.856/2006), 5% of the total costs
of the project be deposited with the Forest
Department, Government of U.P. to improve the
ecosystem structure and functions, waterbird
C C
habitat, public amenities and interpretation centre
and improved management of the OBS.
APPENDIX III (by EAC):
D D During discussions following points emerged:
(i) Noida Authority, while making presentation, informed
that the project involves the renovation, preservation and
beautification of Park on a total plot area is 33.43 Ha. The
total built-up area of the covered construction is 6,999 sq.
E E m. Before the development of site there were 6,803 trees
of different species out of which 6241 trees were cut and
562 trees were shifted to other parks. Further they informed
that the following components of the project have already
been completed:
F F
(a) Boundary wall and gate - 90%
(b) Construction of Monument building - 60%
(c) Landscaping and plantation - 80%
G G
(d) Pavements - 75%
The other infrastructural works proposed by Noida Authority
for environmental safeguards/measures and for effective
EMP are use of treated waste water, sold waste
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 851
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]
management, energy saving, tree plantation and parking
etc. The other works which are important in the context of
Okhla Bird Sanctuary are control of noise, glare and
efficient traffic management.
(ii) Possibility should be explored to increase the greenery
and plant broad leaf native trees along the pathways inside
and outside the park. This will help in the reduction of
surface runoff.
(iii) The water quality and water balance are key elements
and require detailed management and monitoring. No
fresh water/ground water should be used for gardening/
horticulture purposes. The requirement of water should be
met from self recycling treated sewage without placing of
strain on the supply system for the nearby residential and
commercial areas.
(iv) Treated waste water from Sector 54 Sewerage
Treatment Plant is proposed for horticulture purposes. It
must also be utilised as much as possible for such
purposes as toilet flushing and pavement/ floor washing.
The aforesaid purposes will need tertiary treatment of
sewage.
(v) No more than 20 per cent of rain water shall be
discharged out of the project site into the existing drain.
The rain water harvesting system should be designed
based on the soil characteristics and highest level of
ground water table.
(vi) The species of trees inside the park and in buffer zone
both on Okhla Bird Sanctuary side and road side should
be of indigenous types that do not disturb the water
balance of the area. The grass and artificial plantations
which are not native should be avoided.
(vii) Adequate noise barriers in the form of thick plantation
of appropriate species of trees and bushes laid in a tiered
852 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A form to create a green screen on either side of bund road
should be provided. A no horn zone should be declared
and maintained around the Okhla Bird Sanctuary. The
development of green belt and tree plantation shall be
carried out in consultation with Indian Council of Forest
B B Research and Education, Dehradun.
(viii) Solar energy should be utilized for illumination of
common areas, lighting of gardens and paved footpaths
etc.
C C (ix) No artificial illumination on tall poles or towers should
be allowed inside the park during the night hours. The
street lights on the bund road and the round about should
be of special design, low intensity and low height with least
disturbance to the birds habitat.
D D
(x) The solid waste generated should be properly collected
and segregated before disposal. The in-vessel bio-
conservation technique should be used for composting the
organic waste.
E E
(xi) The opening of the park would increase the traffic load
on the front road and adjoining link road intersections. A
detailed traffic study should be carried out and proposals
for necessary widening redesign of intersections and
strengthening of road structure should be prepared.
F F
(xii) Provision of a parking area is proposed inside the
park. Allocation and configuration of spaces for other
modes of transport like mini buses, 2-3 wheelers, cycle-
rickshaws and bicycles and even pedestrians have to be
G considered for realistic assessment of traffic and parking
G
management.
(xiii) All required sanitary and hygienic measures should
be in place before the opening of the park and should be
maintained through out the operation.
H H
IN RE: CONSTRUCTION OF PARK AT NOIDA ANAND ARYA, 853 [2010] 15 (ADDL.) S.C.R. 854
T.N. GODAVARMAN THIRUMULPAD v. U.O.I. [AFTAB ALAM, J.]

(xiv) Adequate drinking water and sanitary facilities should A A STATE OF U.P. AND ORS.
be provided in the park. v.
HIRENDRA PAL SINGH ETC.
(xv) A monitoring committee should be constituted for (Civil Appeal Nos.10229-30 of 2010)
overseeing the project so as to ensure effective
implementation and compliance to environmental DECEMBER 03, 2010
B B
safeguards.
[J.M. PANCHAL, DEEPAK VERMA AND
********* DR. B.S. CHAUHAN, JJ.]

U.P. Legal Remembrancer Manual Amendment of

C provisions in regard to appointment of District Government
Counsel High Court vide interim order stayed the operation
of amended provisions of L.R. Manual and directed the State
Government to consider the applications for renewal of all
District Government Counsels whose term had already
D expired under the unamended provisions, i.e., which stood
repealed by the amendment On appeal, held: Whenever
an Act is repealed, it must be considered as if it had never
existed The object of repeal is to obliterate the Act from the
statutory books, except for certain purposes as provided
E under s.6 of the General Clauses Act, 1897 On repeal, the
earlier provisions stand obliterated/ abrogated/wiped out
wholly, i.e., protanto repeal The High Court erred in issuing
directions to the State authorities to proceed, as an interim
measure, under a non-existing law Such an order seems
F to have been passed only to fill up the vacuum Under
certain circumstances, an Act which stood repealed, may
revive in case the substituted Act is declared ultra vires/
unconstitutional by the court on the ground of legislative
competence etc., however, the same shall not be the position
in case of subordinate legislation The L.R. Manual consists
G
of executive instructions, which can be replaced any time by
another set of executive instructions Therefore, question of
revival of the repealed clauses of L.R. Manual in case the
substituted clauses are struck down by the court, does not
H 854
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 855
ETC.
arise In view of this, the interim order passed by High Court
would amount to substituting the legal policy by the judicial
order, and is thus not sustainable General Clauses Act,
1897 s.6.
Interpretation of Statutes Repeal and suspension of
statutory provisions Distinction between Discussed.
The provisions of the U.P. Legal Remembrancer
Manual (L.R. Manual) were amended w.e.f 13th August,
2008. The amendment provided basically two changes (1)
dispensation of consultation with the District Judge by
the District Magistrate before sending any proposal/
recommendation to the State Government for
appointment of District Government Counsel; and (2)
reduction in the age of service from 62 to 60 years. The
amended provisions of the L.R. Manual were challenged
in writ petitions filed before the High Court.
The High Court passed interim order staying the
operation of amended provisions of L.R. Manual and
directed the State Government to consider the
applications for renewal of all District Government
Counsels whose term had already expired under the
unamended provisions, i.e., which stood repealed by the
amendment dated 13.8.2008, and to allow them to serve
till they attain the age upto 62 years.
In the instant appeals, the appellant contended that
fixing the age even in government services falls within the
exclusive competence of the State authorities, and the
court should not interfere in such matters being a policy
decision, even at the final stage; and that an interim order
should not be passed by the court, staying the operation
of law as such unless the court is of the view that the law
was patently unconstitutional. It was contended by the
appellant that the High Court under no circumstance
could direct the State authorities to consider the cases
856 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A for renewal/extension under the provisions of the
unamended L.R. i.e. non-existing provisions; and that
such interim order tantamounts to legislation by judicial
orders. It was further contended by the appellant that a
large number of similar orders were passed by the High
B B Court and in all of them except this case, the operation
of such interim orders has been stayed by this court.
Per contra, the respondents contended that in
making the proposal for appointment of the Distt.
Government Counsel by the Distt. Magistrate,
C C dispensation of consultation with the District Judge itself
is a serious matter and High Court rightly stayed the
operation of the amended provisions of the L.R. Manual.
They contended that since the High Court stayed the
operation of the amended clauses of the L.R. Manual, the
D D old L.R. Manual became automatically operative and,
therefore, the High Court was justified in issuing direction
to consider the cases of renewal/extension under the
unamended provisions of the Manual.
Disposing of the appeals, the Court
E E
HELD:1. So far as the issue of reduction of age from
62 to 60 years is concerned, it has not been brought to
the notice of the High Court that it is within the exclusive
domain of the State Government to reduce the age even
F F in Government services. So in case of purely professional
engagement, the age could validly be reduced by the
State Government unilaterally. It is evident that even in
government services where the terms and conditions of
service are governed by the statutory provisions, the
G G Legislature is competent to enhance or reduce the age
of superannuation. In view of the above, it is beyond the
imagination of this Court as to why such a course is not
permissible for the appellant-State while fixing the age of
working of the District Government Advocates. The court
H H
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 857
ETC.
should not generally stay the operation of law. [Paras 7,
11, 12] [864-H; 865-A; 865-H; 866-A-D]
Bishun Narain Misra v. The State of Uttar Pradesh & Ors.
AIR 1965 SC 1567; Roshan Lal Tandon v. Union of India &
Ors. AIR 1967 SC 1889; B.S. Vadera v. Union of India & Ors.
AIR 1969 SC 118; The State of Jammu & Kashmir v. Triloki
Nath Khosa & Ors. AIR 1974 SC 1; B.S. Yadav & Ors. v.
State of Haryana & Ors. AIR 1981 SC 561; State of Jammu
& Kashmir v. Shiv Ram Sharma & Ors. AIR 1999 SC 2012;
K. Nagaraj & Ors. v. State of Andhra Pradesh & Anr. etc. AIR
1985 SC 551; State of Andhra Pradesh etc. etc. v. S.K.
Mohinuddin etc. etc. AIR 1994 SC 1474; Bhavesh D. Parish
& Ors. v. Union of India & Anr. AIR 2000 SC 2047; Siliguri
Municipality & Ors. v. Amalendu Das & Ors. AIR 1984 SC
653; Bir Bajrang Kumar v. State of Bihar & Ors. AIR 1987 SC
1345; M/s. Vinod Trading Company v. Union of India & Ors.
(1982) 2 SCC 40; Vishnu Traders v. State of Haryana & Ors.
(1995) Suppl. (1) SCC 461 referred to.
2. Admittedly, this Court has stayed the operation of
the interim orders passed by the High Court in large
number of identical cases and all such orders have been
placed on record. In order to maintain consistency, it is
required to pass the same order in the said case also.
[Para 16] [867-F; 868-A]
3.1. It is a settled legal proposition that whenever an
Act is repealed, it must be considered as if it had never
existed. The object of repeal is to obliterate the Act from
the statutory books, except for certain purposes as
provided under section 6 of the General Clauses Act,
1897. Repeal is not a matter of mere form but is of
substance. Therefore, on repeal, the earlier provisions
stand obliterated/abrogated/wiped out wholly, i.e.,
protanto repeal. [Para 19] [868-H; 869-A]
3.2. There is a clear distinction between repeal and
858 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A suspension of the statutory provisions and the material
difference between both is that repeal removes the law
entirely; when suspended, it still exists and has operation
in other respects except wherein it has been suspended.
Thus, a repeal puts an end to the law. A suspension
B B holds it in abeyance. [Para 21] [870-B]
M/s. Dagi Ram Pindi Lall & Anr. v. Trilok Chand Jain &
Ors. AIR 1992 SC 990; Gajraj Singh etc. v. The State
Transport Appellate Tribunal & Ors. etc. AIR 1997 SC 412;
Property Owners Association & Ors. etc. etc. v. State of
C C
Maharashtra & Ors. AIR 2001 SC 1668; Mohan Raj v.
Dimbeswari Saikia & Anr. AIR 2007 SC 232 relied on.
Kumari Shrilekha Vidyarthi etc. etc. v. State of U.P. & Ors.
AIR 1991 SC 537; Harpal Singh Chauhan & Ors. v. State of
D D U.P. AIR 1993 SC 2436; State of U.P. v. Ramesh Chandra
Sharma & Ors. AIR 1996 SC 864; State of U.P. & Anr. v. Johri
Mal AIR 2004 SC 3800; State of U.P. & Ors. v. Netra Pal Singh
& Ors. AIR 2004 SC 3513; M/s. Shree Chamundi Mopeds
Ltd. v. Church of South India Trust Association, Madras AIR
E E 1992 SC 1439 and Bhagat Ram Sharma v. Union of India &
Ors. AIR 1988 SC 740 referred to.
4.1. The amended provisions of the L.R. Manual are
under challenge before the High Court and the
provisions repealed by the Amendment dated 13.8.2008
F F are not in existence and it will be assumed that the same
had never been in existence. The Court while examining
the validity of the amended provisions may reach a
conclusion that the said provisions are ultra vires and
unconstitutional and strike down the same but that may
G G not automatically revive the provisions which stood
repealed by the said amendment. Thus, the High Court
erred in issuing directions to the State authorities to
proceed, as an interim measure, under a non-existing
law. Such an order seems to have been passed only to
H H
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 859 860 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
ETC.
fill up the vacuum. Generally quashing of a subsequent A A 5. The impugned orders are hereby set aside.
notification would not effect in revival of an earlier However, in view of the peculiar fact-situation existing
notification in whose place the subsequent notification herein, the order (s), if any, passed by the State
had been issued, however, the legal effect of an earlier Authorities under the interim order, would not be
law when the later law enacted in its place is declared disturbed till the final disposal of the cases. [Para 25] [871-
invalid, does not depend merely upon the use of the B B H; 872-A]
words like substitution; or suppression. It depends upon
the totality of circumstances and the context in which Case Law Reference:
they are used. [Para 23] [870-D-H] AIR 1965 SC 1567 referred to Para 8
4.2. It is evident that under certain circumstances, an AIR 1967 SC 1889 referred to Para 9
Act which stood repealed, may revive in case the C C
substituted Act is declared ultra vires/unconstitutional by AIR 1969 SC 118 referred to Para 9
the court on the ground of legislative competence etc., AIR 1974 SC 1 referred to Para 9
however, the same shall not be the position in case of
subordinate legislation. In the instant case, the L.R. AIR 1981 SC 561 referred to Para 9
Manual is consisted of executive instructions, which can D D
AIR 1999 SC 2012 referred to Para 9
be replaced any time by another set of executive
instructions. Therefore, question of revival of the AIR 1985 SC 551 referred to Para 10
repealed clauses of L.R. Manual in case the substituted
AIR 1994 SC 1474 referred to Para 10
clauses are struck down by the court, would not arise.
In view of this, the interim order would amount to E E AIR 2000 SC 2047 referred to Para 12
substituting the legal policy by the judicial order, and
thus not sustainable. [Para 24] [871-E-G] AIR 1984 SC 653 referred to Para 13
AIR 1987 SC 1345 referred to Para 14
B.N. Tewari v. Union of India & Ors. AIR 1965 SC 1430;
Indian Express Newspapers (Bombay) Private Ltd. & Ors. v. F (1982) 2 SCC 40 referred to Para 14
F
Union of India & Ors. AIR 1986 SC 515; West U.P. Sugar
Mills Association & Ors. v. State of U.P. & Ors. AIR 2002 SC (1995) Suppl. (1) SCC 461 referred to Para 15
948; Zile Singh v. State of Haryana & Ors. (2004) 8 SCC 1; AIR 1991 SC 537 referred to Para 17
State of Kerala & Anr. v. Peoples Union for Civil Liberties,
Kerala State Unit & Ors. (2009) 8 SCC 46; Ameer-un-Nissa AIR 1993 SC 2436 referred to Para 17
G G
Begum & Ors. v. Mahboob Begum & Ors. AIR 1955 SC 352; AIR 1996 SC 864 referred to Para 17
India Tobacco Co. Ltd. v. The Commercial Tax Officer,
Bhavanipore & Ors. AIR 1975 SC 155; Firm A.T.B. Mehtab AIR 2004 SC 3800 referred to Paras 17,
Majid and Co. v. State of Madras & Anr. AIR 1963 SC 928 24
relied on.
H H AIR 2004 SC 3513 referred to Para 17
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 861 862 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
ETC.
AIR 1992 SC 990 relied on Para 19 A A DR. B.S. CHAUHAN, J. 1. Leave granted.

AIR 1997 SC 412 relied on Para 19 2. These appeals have been filed against the interim
orders passed by the High Court of Allahabad (Lucknow Bench)
AIR 2001 SC 1668 relied on Para 19
dated 4.9.2008 in Writ Petition No. 7851(M/B) of 2008 and
AIR 2007 SC 232 relied on Para 19 dated 30.11.2009 in Writ Petition No.11170 (MB) of 2009, by
B B
which the High Court has stayed the operation of amended
AIR 1992 SC 1439 referred to Para 20 provisions of the U.P. Legal Remembrancer Manual (hereinafter
AIR 1988 SC 740 referred to Para 22 called L.R. Manual) and further directed the State Government
to consider the applications for renewal of the all District
AIR 1965 SC 1430 relied on Para 23 Government Counsel whose term had already expired, resorting
C C to the unamended provisions of the L.R. Manual and they be
AIR 1986 SC 515 relied on Para 23
allowed to serve till they attain the age upto 62 years.
AIR 2002 SC 948 relied on Para 23
3. Facts and circumstances giving rise to these appeals
(2004) 8 SCC 1 relied on Para 23 are that the respondent no.1 in first case was appointed as a
(2009) 8 SCC 46 relied on Para 23 D D District Government Counsel (Revenue-1), Agra vide order
dated 30.11.1988 for a fixed tenure. His term was renewed
AIR 1955 SC 352 relied on Para 23 from time to time upto 31.12.1992. The proposal for renewal
of his tenure was forwarded by the District Magistrate, Agra in
AIR 1975 SC 155 relied on Para 23
1993 and 1996, however, no order was passed on the said
AIR 1963 SC 928 relied on Para 24 E E proposals. Ultimately, the State Government passed an order
dated 2.12.1998 dispensing with the services of the said
CIVIL APPELLATE JURISDICTION : Civil Appeal No. respondent. Being aggrieved, he preferred Writ Petition
10229-10230 of 2010. No.3867 of 1998 challenging the order of dispensing with his
services, wherein the interim order was passed that the said
From the Judgment & Order dated 30.11.2009 of the High
Court of Judicature at Allahabad, Lucknow Bench, Lucknow in F F respondent would be allowed to continue till further orders of
the court. Thus, he continued to work under the said interim
Writ Petition No. 11170 (MB) of 2009.
order till 2008, when the provisions of L.R. Manual were
P.S. Patwalia, Satish C. Misra, P.N. Misra, Shail K. amended with effect from 13.8.2008, reducing the age of
Dwivedi, AAG, T.N. Singh, Ardendu M. Prasad, Rajeev K. District Government Counsel from 62 to 60 years. As he had
Dubey, Kamlendra Mishra for the Appellants. already completed age of 60 years, thus was disengaged,
G G
whereby respondent preferred Writ Petition No. 11170(M/B) of
Dhruv Mehta, D.K. Garg, P. Kakra, Eldho Varghese, 2009 praying therein to be permitted to continue upto 62 years.
Ranbir Singh Yadav, Manohar Lal Sharma for the Respondent. The High Court passed an interim order dated 30.11.2009
directing the State Authorities to consider his application for
The Judgment of the Court was delivered by
H H
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 863
ETC. [DR. B.S. CHAUHAN, J.]
extension of service upto 62 years under the unamended
provisions of the L.R. Manual.
4. Similarly, another order has been passed in Writ Petition
No.7851 (M/B) of 2008 filed by the Association of District
Government Counsel in representative capacity challenging the
amendment dated 13.8.2008 to the L.R. Manual to the effect
of dispensation of consultation by the District Magistrate with
the District Judge, while making proposal to the State
Government for appointment of such counsel, reducing the age
of service from 62 years to 60 years. The High Court has
stayed the operation of the amended provisions, and issued
direction to consider applications for the Distt. Government
Counsel for renewal in accordance with the unamended
provisions of the L.R. Manual, till further orders. Hence, these
appeals.
5. Shri P.S. Patwalia, learned senior counsel appearing
for State of Uttar Pradesh has contended that in the said writ
petitions, the amendment in the L.R. Manuals has been
challenged. The amendment provided basically two changes
(1) consultation with the District Judge by the District Magistrate
before sending any proposal/recommendation to the State
Government for appointment of the District Government
Counsel has been dispensed with; and (2) age has been
reduced from 62 to 60 years. Therefore, it has been submitted
that as fixing the age even in government services falls within
the exclusive competence of the State authorities, and thus, the
court should not interfere in such matters being a policy
decision, even at the final stage. The interim order should not
be passed by the court, staying the operation of law as such
unless the court is of the view that the law was patently
unconstitutional. The High Court under no circumstance could
direct the State authorities to consider the cases for renewal/
extension under the provisions of the unamended L.R. i.e. non-
existing provisions. Such interim order tantamounts to
legislation by judicial orders. More so, a large number of similar
864 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A orders were passed by the High Court and in all of them except
this case, the operation of such interim orders has been stayed
by this court. Thus, the appeals deserve to be allowed.
6. On the contrary, Shri Dhruv Mehta, learned Senior
counsel appearing for the respondents Association and Shri
B B
Manohar Lal Sharma appearing for the Distt. Government
Counsel have submitted that in making the proposal for
appointment of the Distt. Government Counsel by the Distt.
Magistrate, dispensation of consultation with the District Judge
itself is a serious matter and High Court has rightly stayed the
C C
operation of the amended provisions of the L.R. Manual and
no interference is required. In case the High Court has stayed
the operation of the amended clauses of the L.R. Manual, the
old L.R. Manual becomes automatically operative. Therefore,
the High Court was justified in issuing direction to consider the
D D cases of renewal/extension under the unamended provisions
of the Manual. Thus, appeals lack merit and are liable to be
dismissed.
7. We have considered the rival submissions made by
E E learned counsel for the parties and perused the record.
So far as the respondent District Government Counsel is
concerned, admittedly, his term has not been extended/
renewed by passing any order after 1992. He had been
continuing under the interim order dated 7.12.1998 passed by
F F the High Court. There is nothing on record to show what has
happened subsequent to the said order. However, we have
been informed that the said writ petition is still pending and the
said respondent continued to work under the said interim order
till he attained the age of 60 years.
G G
So far as the issue of reduction of age from 62 to 60 years
is concerned, it has not been brought to the notice of the High
Court that it is within the exclusive domain of the State
Government to reduce the age even in Government services.
H H
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 865
ETC. [DR. B.S. CHAUHAN, J.]
So in case of purely professional engagement, the age could
validly be reduced by the State Government unilaterally.
8. A Constitution Bench of this Court in Bishun Narain
Misra v. The State of Uttar Pradesh & Ors., AIR 1965 SC 1567
held that new rule reducing the age of retirement from 58 to 55
years could neither be invalid nor could be held to be
retrospective as the said rule was a method adopted to tide
over the difficult situation which could arise in public services
if the new rule was applied at once and also to meet any
financial objection arising in enforcement of the new rule.
9. In Roshan Lal Tandon v. Union of India & Ors., AIR
1967 SC 1889, a similar view has been reiterated by this Court
observing that emoluments of the Government servant and his
terms of service could be altered by the employer unilaterally
for the reason that conditions of service are governed by
statutory rules which can be unilaterally altered by the
Government without the consent of the employee. (See also
B.S. Vadera v. Union of India & Ors., AIR 1969 SC 118; The
State of Jammu & Kashmir v. Triloki Nath Khosa & Ors., AIR
1974 SC 1; B.S. Yadav & Ors. v. State of Haryana & Ors.,
AIR 1981 SC 561; and State of Jammu & Kashmir v. Shiv
Ram Sharma & Ors., AIR 1999 SC 2012).
10. In K. Nagaraj & Ors. v. State of Andhra Pradesh &
Anr. etc., AIR 1985 SC 551, this Court examined the amended
provisions of Andhra Pradesh Public Employment (Regulation
of Conditions of Service) Ordinance, 1983 by which the age
of retirement was reduced from 58 to 55 years and this Court
upheld the amended provisions being neither arbitrary nor
irrational. The court further rejected the submission of the
appellants therein that the said amended provisions would have
retrospective application taking away their accrued rights. (See
also State of Andhra Pradesh etc. etc. v. S.K. Mohinuddin etc.
etc., AIR 1994 SC 1474).
11. In view of the above, it is evident that even in
866 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A government services where the terms and conditions of service
are governed by the statutory provisions, the Legislature is
competent to enhance or reduce the age of superannuation. In
view of the above, it is beyond our imaginations as why such a
course is not permissible for the appellant-State while fixing the
B B age of working of the District Government Advocates.
12. In Bhavesh D. Parish & Ors. v. Union of India & Anr.,
AIR 2000 SC 2047, this Court observed that while considering
the constitutional validity of statutory provisions, the court should
be very slow in staying the operation of the statutory provisions.
C C
It is permissible for the court to interfere at interim stage only
in those few cases where the view reflected in the legislation
is not possible to be taken at all.
Thus, the court should not generally stay the operation of
D D law.
13. In Siliguri Municipality & Ors. v. Amalendu Das & Ors.,
AIR 1984 SC 653, this Court had taken note of the fact that
the High Court had been passing stay orders in some cases
E E involving the same question of law and facts though it vacated
the interim orders passed earlier in some of the identical cases.
In the said case, the validity of statutory provision was under
challenge. This Court observed that the High Court should
exercise self-restrain in passing interim orders, for maintaining
consistency in similar cases. The court observed as under:
F F
The main purpose of passing an interim order is to evolve
a workable formula or arrangement to the extent called for
by the demands of the situation keeping in mind the
presumption regarding the constitutionality of the legislation
G G and the vulnerability of the challenge, only in order that no
irreparable injury is occasioned. The Court has therefore
to strike a delicate balance after considering the pros and
cons of the matter lest larger public interest is not
jeopardised and institutional embarrassment is
H H eschewed.
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 867
ETC. [DR. B.S. CHAUHAN, J.]
14. In Bir Bajrang Kumar v. State of Bihar & Ors., AIR
1987 SC 1345, this Court held that cases involving identical
points must be given identical treatment by the court, otherwise
it may create an anomalous position, as there may be a
possibility of contradictory orders being rendered in similar
types of cases by the same court.
The same view has been reiterated by this Court in M/s.
Vinod Trading Company v. Union of India & Ors., (1982) 2
SCC 40.
15. In Vishnu Traders v. State of Haryana & Ors., (1995)
Suppl. (1) SCC 461, while dealing with the similar issue, this
Court observed as under:
In the matters of interlocutory orders, principle of binding
precedent cannot be said to apply. However, the need for
consistency of approach and uniformity in the exercise of
judicial discretion respecting similar causes and the
desirability to eliminate occasions for grievances of
discriminatory treatment requires that all similar matters
should receive similar treatment except where factual
differences require a different treatment so that there is an
assurance of consistency, uniformity, predictability and
certainty of judicial approach.
16. Admittedly, this Court has stayed the operation of the
interim orders passed by the High Court in large number of
identical cases and all such orders have been placed on record.
Some of such cases are SLP(C) No.32910/ 2009 dated
14.12.2009; SLP(C) No.35279/2009 dated 5.1.2010; and
SLP(C) No.11261/2010 dated 23.4.2010.
It is also pertinent to mention here that operation of the
impugned order dated 30.11.2009 has already been stayed by
this court vide order dated 3.5.2010. In fact there is a joint
petition in these appeals and thus by inadvertence the
operation of order dated 4.9.2008 in W.P. No.7851 (M/B) of
868 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A
2008 could not be stayed. In order to maintain consistency in
our order, it is required to pass the same order in the said case
also.
More so, in the Ist case, the High Court, in spite of taking
B B note that the petitioner therein had been working under the
interim order of the court since December 1998, i.e. for twelve
years entertained his second writ petition without deciding the
first writ petition.
C C 17. So far as the issue of dispensation of consultation with
the District Judge is concerned, this court has hitherto taken a
view that his opinion would have supremacy, thus requires to
be examined considering the judgments of this court in Kumari
Shrilekha Vidyarthi etc. etc. v. State of U.P. & Ors., AIR 1991
D D SC 537; Harpal Singh Chauhan & Ors. v. State of U.P., AIR
1993 SC 2436; State of U.P. v. Ramesh Chandra Sharma &
Ors., AIR 1996 SC 864; State of U.P. & Anr. v. Johri Mal, AIR
2004 SC 3800; and State of U.P. & Ors. v. Netra Pal Singh &
Ors., AIR 2004 SC 3513.
E E 18. The High Court vide impugned interim orders stayed
the operation of the amended provisions of the L.R. Manual and
directed the State authorities to consider the applications for
renewal etc. under the unamended provisions, i.e., which stood
repealed by the amendment dated 13.8.2008. The question
F F does arise as to whether such a course is permissible to the
High Court for the reason that it has been canvassed by Shri
Patwalia that the clauses of the L.R. Manual which stood
repealed do not survive any more and no direction could have
been given by the High Court to act upon the non-existing
G G provisions.
19. It is a settled legal proposition that whenever an Act is
repealed, it must be considered as if it had never existed. The
object of repeal is to obliterate the Act from the statutory books,
except for certain purposes as provided under section 6 of the
H H
STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 869
ETC. [DR. B.S. CHAUHAN, J.]
General Clauses Act, 1897. Repeal is not a matter of mere
form but is of substance. Therefore, on repeal, the earlier
provisions stand obliterated/abrogated/wiped out wholly, i.e.,
protanto repeal (vide: M/s. Dagi Ram Pindi Lall & Anr. v. Trilok
Chand Jain & Ors., AIR 1992 SC 990; Gajraj Singh etc. v. The
State Transport Appellate Tribunal & Ors. etc., AIR 1997 SC
412; Property Owners Association & Ors. etc. etc. v. State of
Maharashtra & Ors., AIR 2001 SC 1668; and Mohan Raj v.
Dimbeswari Saikia & Anr., AIR 2007 SC 232).
20. In M/s. Shree Chamundi Mopeds Ltd. v. Church of
South India Trust Association, Madras, AIR 1992 SC 1439,
this Court explained the distinction between quashing of an
order and staying the operation of the order observing as under:
While considering the effect of an interim order staying
the operation of the order under challenge, a distinction has
to be made between quashing of an order and stay of
operation of an order. Quashing of an order results in the
restoration of the position as it stood on the date of the
passing of the order which has been quashed. The stay
of operation of an order does not, however, lead to such
a result. It only means that the order which has been stayed
would not be operative from the date of the passing of the
stay order and it does not mean that the said order has
been wiped out from existence. This means that if an order
passed by the Appellate Authority is quashed and the
matter is remanded, the result would be that the appeal
which had been disposed of by the said order of the
Appellate Authority would be restored and it can be said
to be pending before the Appellate Authority after the
quashing of the order of the Appellate Authority. The same
cannot be said with regard to an order staying the
operation of the order of the Appellate Authority because
in spite of the said order, the order of the Appellate
Authority continues to exist in law and so long as it exists,
it cannot be said that the appeal which has been disposed
870 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A of by the said order has not been disposed of and is still
pending.
21. Thus, there is a clear distinction between repeal and
suspension of the statutory provisions and the material
difference between both is that repeal removes the law entirely;
B B
when suspended, it still exists and has operation in other
respects except wherein it has been suspended. Thus, a repeal
puts an end to the law. A suspension holds it in abeyance.
22. This Court in Bhagat Ram Sharma v. Union of India
C C & Ors., AIR 1988 SC 740, explained the distinction between
repeal and amendment observing that amendment includes
abrogation or deletion of a provision in an existing statutes. If
the amendment of an existing law is small, the Act prefaces to
amend; if it is extensive, it repeals and re-enacts it.
D D
23. In fact, the amended provisions of the L.R. Manual are
under challenge before the High Court and the provisions
repealed by the Amendment dated 13.8.2008 are not in
existence and it will be assumed that the same had never been
in existence. The Court while examining the validity of the
E E
amended provisions may reach a conclusion that the said
provisions are ultra vires and unconstitutional and strike down
the same but that may not automatically revive the provisions
which stood repealed by the said amendment.
F F Thus, the High Court erred in issuing directions to the State
authorities to proceed, as an interim measure, under a non-
existing law. Such an order seems to have been passed only
to fill up the vacuum. Generally quashing of a subsequent
notification would not affect in revival of an earlier notification
G G in whose place the subsequent notification had been issued,
however, the legal effect of an earlier law when the later law
enacted in its place is declared invalid, does not depend
merely upon the use of the words like substitution; or
suppression. It depends upon the totality of circumstances and
H H the context in which they are used. (Vide B.N. Tewari v. Union
 STATE OF U.P. AND ORS. v. HIRENDRA PAL SINGH 871
ETC. [DR. B.S. CHAUHAN, J.]
of India & Ors., AIR 1965 SC 1430; Indian Express
Newspapers (Bombay) Private Ltd. & Ors. v. Union of India
& Ors., AIR 1986 SC 515; West U.P. Sugar Mills Association
& Ors. v. State of U.P. & Ors., AIR 2002 SC 948; Zile Singh
v. State of Haryana & Ors., (2004) 8 SCC 1; and State of
Kerala & Anr. v. Peoples Union for Civil Liberties, Kerala State
Unit & Ors., (2009) 8 SCC 46).
(See also Ameer-un-Nissa Begum & Ors. v. Mahboob
Begum & Ors., AIR 1955 SC 352; and India Tobacco Co. Ltd.
v. The Commercial Tax Officer, Bhavanipore & Ors., AIR
1975 SC 155).
24. In Firm A.T.B. Mehtab Majid and Co. v. State of
Madras & Anr., AIR 1963 SC 928, this Court while dealing with
a similar issue held :
Once the old rule has been substituted by the new
rule, it ceases to exist and it does not automatically get
revived when the new rule is held to be invalid.
Therefore, it is evident that under certain circumstances,
an Act which stood repealed, may revive in case the
substituted Act is declared ultra vires/unconstitutional by the
court on the ground of legislative competence etc., however,
the same shall not be the position in case of subordinate
legislation. In the instant case, the L.R. Manual is consisted of
executive instructions, which can be replaced any time by
another set of executive instructions. (Vide Johri Mal (supra).
Therefore, question of revival of the repealed clauses of
L.R. Manual in case the substituted clauses are struck down
by the court, would not arise. In view of this, the interim order
would amount to substituting the legal policy by the judicial
order, and thus not sustainable.
25. In view of the above, both the appeals succeed and
are allowed. The impugned orders dated 30.11.2009 and
4.9.2008 are hereby set aside. However, in view of the peculiar
872 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A fact-situation existing herein, the order (s), if any, passed by the
State Authorities under the interim order dated 4.9.2008, would
not be disturbed till the final disposal of the cases.
26. This Court after taking note of the nature of
B B appointment involved in such cases made a request to the High
Court in Special Leave Petition (C) No.12751 of 2009 (Ram
Autar Saini, Advocate v. Ram Singh Lodhi & Ors.) vide order
dated 15.5.2009 to dispose of the matters at an early date.
However, it appears that the said order could not be brought
to the notice of the High Court. Therefore, we again take the
C C
opportunity to request the High Court to consolidate all such
matters and finally dispose them of, as early as possible. The
appellant may place the copy of this judgment before the
Honble Chief Justice/Senior Judge for information and
appropriate orders.
D D
However, it is clarified that no observation made
hereinabove shall be taken into consideration while deciding
the writ petitions pending before the High Court as we have not
expressed any opinion on merits and the above observations
E E have been made only to examine the correctness of the interim
orders passed by the High Court.
The appeals are disposed of accordingly. No costs.
B.B.B. Appeals disposed of.
F
G
H
 [2010] 15 (ADDL.) S.C.R. 873 874 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.

KULDEEP SINGH A A complying with the provisions of s. 25F of the Act and,
v. thus, was illegal null and void and deserves to be set
G.M., INSTRUMENT DESIGN DEVELOPMENT AND aside. However, the Labour Court dismissed the claim of
FACILITIES CENTRE & ANR. the appellant on the ground of delay of five and a half
(Civil Appeal No. 10231 of 2010) years in making the reference. The High Court dismissed
B B the writ petition filed by the appellant for reinstatement
DECEMBER 03, 2010 with full back wages and other benefits. Therefore, the
[P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.] appellant filed the instant appeal.

Allowing the appeal, the Court

Industrial Disputes Act, 1947 s. 10 Reference of
disputes to Board, Courts or Tribunals Termination of C
workman Several representations made by workman to
various authorities Reference of disputes to Labour Court
by State Government Labour Court held that the services
of the workman was terminated without complying with s.25F
and, therefore, the termination order was illegal, null and void D
but ultimately dismissed the claim of the workman on the
ground of delay of five and a half years in making reference
Order upheld by High Court On appeal held: There is no
prescribed time limit for reference of industrial dispute u/s. 10
In view of the particulars furnished as also the explanation E
offered by the workman, the delay was not so culpable as to
disentitle him any relief Workman directed to be reinstated
with consequential service benefits but without back wages
Delay/laches.
F F termination one way or other with all the authorities
The respondent-management terminated the services
of the appellant-workman. The appellant made several
representatives to various authorities. Thereafter, the
State Government referred the dispute between the
appellant and the respondent to the Labour Court. The
Labour Court held that the respondent-management is an G
industry within the meaning of s. 2 (j) of the Industrial
Disputes Act, 1947; that the appellant had rendered the
duties for more than 240 days in the 12 preceding months
but the management terminated his services without
873 H H
C HELD: 1.1. It is clear that the Labour Court, on
appreciation of oral and documentary evidence,
concluded that the termination of the appellant-workman
is illegal, null and void and deserves to be set aside. This
finding became final since the Management did not
D question the same by way of writ petition. Undoubtedly,
the Management has to follow the provisions of the Act
while effecting termination, in fact, which was accepted
by the Labour Court and the Management did not
challenge the same before any forum. [Paras 10 and 20]
E [882-B; 889-B]
1.2. By making various representations from the day
when the services of the appellant were terminated and
till his last representation dated 16.07.1996 to the Manager,
the workman has proved that he was agitating his
concerned. The particulars furnished clearly show that
the appellant/workman was fighting for his cause before
the Management as well as with the State Government
including the Chief Secretary and the Minister of the
G concerned Department. Ultimately, the State Government
made a reference on 22.11.1999 to the Labour Court for
adjudication. [Para 19] [888-E-F]
1.3. There is no prescribed time limit for the
appropriate Government to exercise its powers under
KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 875
AND FACILITIES CENTRE
Section 10 of the Industrial Disputes Act, 1947. It is more
so in view of the language used, namely, if any industrial
dispute exists or is apprehended, the appropriate
government at any time refer the dispute to a Board or
Court for enquiry. The reference sought for by the
workman cannot be said to be delayed or suffering from
a lapse when law does not prescribe any period of
limitation for raising a dispute under Section 10 of the
Act. The real test for making a reference is whether at the
time of the reference, dispute exists or not and when it
is made, it is presumed that the State Government is
satisfied with the ingredients of the provision, thus, the
Labour Court cannot go behind the reference. It is not
open to the Government to go into the merit of the
dispute concerned and once it is found that an industrial
dispute exists then it is incumbent on the part of the
Government to make reference. It cannot itself decide the
merit of the dispute and it is for the appropriate Court or
Forum to decide the same. The satisfaction of the
appropriate authority in the matter of making reference
under Section 10(1) of the Act is a subjective satisfaction.
Normally, the Government cannot decline to make
reference for laches committed by the workman. If
adequate reasons are shown, the Government is bound
to refer the dispute to the appropriate Court or Forum for
adjudication. Even though, there is no limitation
prescribed for reference of dispute to the Labour Court/
Industrial Tribunal, even so, it is only reasonable that the
disputes should be referred as soon as possible after
they have arisen and after conciliation proceedings have
failed, particularly, when disputes relate to discharge of
workman. If sufficient materials are not put forth for the
enormous delay, it would certainly be fatal. However, in
view of the explanation offered by the workman, in the
case on hand, the delay has not been so culpable as to
disentitle him any relief. In view of the details furnished
and the explanation offered, the workman cannot be
876 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A blamed for the delay and he was all along hoping that one
day his grievance would be considered by the
Management or by the State Government.[Para 21] [889-
C-H; 890-A-C]
1.4. The award of the Labour Court insofar as holding
B B
that the reference by the State Government is bad and
incompetent being raised so belatedly and dismissing
the claim statement on this ground and the order of the
High Court upholding the said order of the Labour Court
and dismissing the writ petition filed by the workman, is
C C
set aside. In view of the conclusion of the Labour Court
with regard to the issues decided in favour of workman
holding that the Management terminated his services
without complying with the provisions of Section 25F of
the Act and the said order is illegal, null and void
D D deserves to be set aside, the appellant-workman is
directed to be reinstatement with consequential service
benefits but without back wages. [Para 22] [890-E-F]
Sapan Kumar Pandit vs. U.P. State Electricity Board and
E E Ors. (2001) 6 SCC 222; M/s Western India Match Co. Ltd.
vs. The Western India Match Co. Workers Union and Ors.
(1970) 1 SCC 225; Nedungadi Bank Ltd. vs. K.P.
Madhavankutty and Ors. (2000) 2 SCC 455; Haryana State
Coop. Land Development Bank vs. Neelam (2005) 5 SCC
F F 91; S.M. Nilajkar and Ors. vs. Telecom District Manager,
Karnataka (2003) 4 SCC 27 referred to.
Case Law Reference:
(2001) 6 SCC 222 Referred to. Para 15
G G (1970) 1 SCC 225 Referred to. Para 15
(2000) 2 SCC 455 Referred to. Para 16
(2005) 5 SCC 91 Referred to. Para 18
H H (2003) 4 SCC 27 Referred to. Para 20
 KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 877
AND FACILITIES CENTRE
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
10231 of 2010.
From the Judgment & Order dated 31.10.2006 of the High
Court of Punjab & Haryana at Chandigarh in C.W.P.No. 8774
of 2005.
B.S. Mor, R.C. Kaushik for the Appellant.
Shish Pal Laler, Balbir Singh Gupta for the Respondents.
The Judgment of the Court was delivered by
P. SATHASIVAM, J. 1. Leave granted.
2. This appeal is filed against the judgment and order of
the High Court of Punjab & Haryana at Chandigarh dated
31.10.2006 in CWP No. 8774 of 2005 wherein the Division
Bench of the High Court confirmed the award passed by the
Labour Court, Ambala and dismissed the writ petition filed by
the appellant herein for reinstatement with full back wages and
other consequential benefits.
3. Brief facts:
(a) It is the case of one Sh. Kuldeep Singh, the appellant/
workman, that on 08.10.1990, he was appointed as Data
Entry Operator on daily wages and he worked as such till
28.11.1991 and thereafter on ad-hoc basis and worked up
to 26.05.1992 without any break when his services were
terminated by the Instrument Design Development and
Facilities Centre (IDDC)-the respondent/management
herein. According to him, no notice or compensation in lieu
thereof was given for terminating his services though he
had worked for 240 days in the preceding 12 months.
According to the appellant workers junior to him were
retained and even fresh appointments were made after the
termination of his services which is in violation of
provisions of Sections 25F to H of the Industrial Disputes
878 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Act, 1947 (in short the Act).
(b) It is the case of the respondent/Management that the
appellant/workman was working on daily wages to meet
the exigencies of work and his contract of employment was
on day to day basis and that the workman did not render
B B
duty for requisite number of days in the 12 preceding
months as claimed. It was further denied that any worker
junior to the appellant was retained in service or any fresh
appointment was made.
C C (c) On 12.12.2003, the Labour Court, after adverting to the
reference made by the Governor of Haryana as to the non-
employment of the appellant and after framing necessary
issues has held that the respondent/Management is an
industry within the meaning of Section 2(j) of the Act and
D D found that the workman rendered the duty for more than
240 days in the 12 preceding months but the Management
terminated his services without complying with the
provisions of Section 25F of the Act, so the order
impugned is illegal, null and void and deserves to be set
E E aside. Having found so on the material issues 1, 5 and 6
in favour of the workman, however, on the ground of delay
in raising the demand and finding that the reference is bad
and incompetent being raised so belatedly dismissed the
claim of the workman.
F F (d) Aggrieved by the dismissal of his claim, the workman
filed Civil Writ Petition No. 8774 of 2005 before the High
Court of Punjab & Haryana at Chandigarh. By the
impugned judgment dated 31.10.2006, the Division Bench
of the High Court by holding that the unexplained inordinate
G G delay has rendered the dispute in question as patently
stale accepted the award of the Labour Court and
dismissed the writ petition. Questioning the same, the
workman has filed the above appeal by way of special
leave.
H H
 KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 879
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
4. Heard Mr. B.S. Mor, learned counsel for the appellant/
workman and Mr. Shishpal Laler, learned counsel for the
respondent/Management.
5. The point for consideration in this appeal is whether the
Labour Court and the High Court justified in rejecting the claim
of the workman merely on the ground of delay when the Labour
Court concluded in categorical terms that the termination of the
services of the workman by the Management without complying
with the provisions of Section 25F of the Act is illegal, null and
void and deserves to be set aside.
6. It is not in dispute that the appellant was terminated from
service w.e.f. 26.05.1992. It is the claim of the workman that
he has worked as Data Entry Operator from 08.10.1990 to
28.11.1991 and thereafter, on ad hoc basis from 28.11.1991
to 26.05.1992 and since he had worked for more than 240 days
in the 12 preceding months and his juniors were retained in
service and fresh appointments were also made after his
termination, the act of the Management is in violation of the
provisions of Section 25 F to H of the Act.
7. After prolonged correspondence, the Governor of
Haryana in exercise of power conferred under Section 10(1)(c)
of the Act, has made the following reference between the
appellant/workman and the respondent/Management to the
Labour Court, Ambala for adjudication by way of notification
bearing No. 62638 dated 22.11.1999:
Whether the termination of services of the workman
Kuldeep Singh is valid and justified, if not so, to what relief
including back wages is he entitled?
8. Before considering the order of reference, it is
worthwhile to refer Section 10 of the Act. Chapter-III of the Act
speaks about reference of Disputes to Boards, Courts or
Tribunals. We are concerned with Section 10 (1) which reads
as under:
880 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 10. Reference of disputes to Boards, Courts or
Tribunals.- (1) Where the appropriate Government is of
opinion that any industrial dispute exists or is
apprehended, it may at any time, by order in writing-
(a) refer the dispute to a Board for promoting a
B B
settlement thereof; or
(b) refer any matter appearing to be connected with or
relevant to the dispute to a Court for inquiry; or
C C (c) refer the dispute or any matter appearing to be
connected with, or relevant to, the dispute, if it
relates to any matter specified in the Second
Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be
D D connected with, or relevant to, the dispute, whether
it relates to any matter specified in the Second
Schedule or the Third Schedule, to a Tribunal for
adjudication:
E E xxx xxxxx
Based on the above provision, on the application of the
workman, the Government of Haryana made the above
reference to the Labour Court, Ambala. On receipt of the
reference from the State Government, the Court assigned it as
F F
reference No. 254 of 1999. Both the workman and the
Management filed their written statements before the Labour
Court. The Labour Court, based on the claim of both the
workman and the Management framed the following issues for
trial:-
G G
(1) Whether the termination of services of workman
Kuldeep Singh is valid and justified? If not so to
what relief including back wages is he entitled?
(2) Whether the reference is not maintainable as
H H
KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 881
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
alleged in preliminary objection No1 of the written
statement? OPM
(3) Whether the respondent-Management is an
industry, if so, to what effect? OPM
(4) Whether the reference is bad on account of delay
and laches as alleged in preliminary objection No.2
of the WS? OPM
(5) Whether the workman was appointed on ad hoc
basis and against a specific work and after the
completion of work his services came to an end
and if so, to what effect? OPM
(6) Whether the workman did not complete mandatory
240 days as alleged? OPM
9. Before the Labour Court, both the parties led evidence
in support of their respective claims. The workman, as WW-1,
reiterated about his service particulars as stated in his claim
petition and also marked documents A-E in support of his
claim. On the other hand, one Balbir Singh, S.O., was examined
as MW-1 on the side of the Management. Appointment letter
of the workman was marked as Exs.M1 & M2. The relevant
pages of the attendance register are marked as Exs. M3 to
M16. MW-1 asserted that the Management never removed the
workman from service and he has not rendered the duty for
240 days in the preceding 12 months. After considering the
claim of both parties in the form of oral and documentary
evidence, in respect of issues 1, 5 and 6, the Labour Court, in
para 19, has concluded thus:
Workman rendered the duty for more than 240 days in
the 12 preceding months, as I held above, but the
Management terminated his services without complying
with the provisions of Section 25F of the Industrial
Disputes Act, so the order impugned is illegal, null and
void and deserves to be set aside. Accordingly, issue
882 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Nos. 1, 5 & 6 are decided in favour of workman.
10. It is clear that the Labour Court, on appreciation of oral
and documentary evidence, has concluded that the termination
of the workman i.e. the appellant herein is illegal, null and void
B B and deserves to be set aside. This finding has become final
since the Management did not question the same by way of
writ petition.
11. It is not in dispute that with regard to issue No.3, the
Labour Court has concluded that the Management-the
C C respondent herein is an industry within the meaning of Section
2(j) of the Act.
12. The Labour Court has concluded that the workman had
raised the demand of reference after more than five and a half
D D years of his termination and has not offered plausible and
convincing explanation. On the other hand, it is the claim of the
workman that though his services were terminated on
26.05.1992, all along, he was agitating the issue with the
Government in one form or other and by making representation
E E to various authorities. Having found the termination void and
contrary to the provisions of the Act, the Labour Court dismissed
the claim of the workman only on the ground of delay.
13. The appellant/workman has furnished the following
information to show that after termination, he made several
F F representations to various authorities. They are:
(i) Representation dated 10.06.92 to the Honble
Minister of respondents department.
(ii) Representation dated 11.05.93 to the Chief
G G
Secretary of Haryana State.
(iii) Representation dated 7.12.94 to the General
Manager, IDDC., Ambala
H H (iv) Representation dated 4.1095 to the General
 KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 883
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
Manager, ID.D.C., Ambala
(v) Representation dated 16.7.96 to the Manager,
HARTON, Chandigarh.
Besides that, he attempted for the same job twice
as under:
(i) Applied and interviewed for the same post out of 4
vacancies advertised in the Tribune dated
19.09.92.
(ii) Applied and interviewed for the same post out of
60 vacancies in the Sunday Tribune dated
14.5.1995.
The factual details have not been seriously denied by the
Management.
14. We have already noted that the Labour Court held that
the appellant has completed 240 days in 12 preceding months
and the respondent/Management terminated his services
without complying with the provisions of Section 25(f) of the Act
and that the order of termination dated 26.05.1992 is illegal,
null and void and deserves to be set aside but only on the
ground of delay rejected his claim in its entirety.
15. Let us consider whether the Labour Court and the High
Court justified in rejecting the claim of the workman only on the
ground of delay in making the reference, more particularly, when
the Labour Court found that the termination is bad and contrary
to the Act. It is not in dispute that there is no limitation
prescribed for making reference to the Government under
Section 10 of the Act. It is useful to refer to the decision of this
Court in Sapan Kumar Pandit vs. U.P. State Electricity Board
and Others, (2001) 6 SCC 222 which is directly on the point
in the case on hand. In that case, the appellant was appointed
as a Clerk on 01.01.1974 in the Electricity Distribution Division,
Mathura of the U.P. State Electricity Board, but his services
884 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A were terminated on 17.07.1975. He raised an industrial dispute
that the termination of his services was illegal. The State
Government, by an order dated 29.03.1993, referred the
dispute to the Labour Court for adjudication as per Section 4-
K of the U.P. Industrial Disputes Act.
B B
Whether termination of the appellant on 17.07.1975 by the
employer was proper and legal; if not so, to what reliefs
the workman is entitled?
The Labour Court took up the reference as Adjudication
C C Case No. 158 of 1993. The respondent Board filed a writ
petition before the Allahabad High Court assailing the
aforesaid reference order and also praying for quashing
the adjudication case pending in the Labour Court. The
appellant was arrayed as Respondent No. 5 in the writ
D D petition. A Single Judge of the High Court took the view
that the delay is so inordinate that the dispute has ceased
to exist by efflux of time and hence no reference under the
U.P. Act should have been made. Accordingly, the order
of reference passed by the Government was quashed by
E E the High Court holding that the workman kept silent for
more than 15 years and he woke up only after the petition
of other co-workmen was allowed and he made no efforts
to get his dispute referred to the Industrial Tribunal or
Labour Court. By holding so, allowed the writ petition of
F F the Management. The decision further shows that along
with the appellant, the Board retrenched ten other workmen.
Though the Industrial Tribunal passed an award granting
retrenchment compensation and certain further other
reliefs, the Union was not satisfied with the said award and
they filed a writ petition in 1980 before the High Court of
G G
Allahabad. On 28.04.1988, the High Court allowed that writ
petition and held that retrenchment was bad in law and the
workmen concerned are entitled to be reinstated. Though
the Board filed special leave petition in this Court which
was dismissed in 1989. According to the appellant, he was
H H
KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 885
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
entertaining the expectation that the Board would extend
the same benefit to him. He was proceeding with his
request to the Board that he should be treated on par with
eight workmen some of whom were reemployed by the
Board. When the appellant found that this was not done,
he approached the Conciliation Officer appointed by the
State Government. His application for condoning the delay
in initiating conciliation proceeding was disallowed by the
Conciliation Officer. However, the Deputy Labour
Commissioner went to his rescue as the delay was
condoned and the conciliation proceedings were revived.
This happened on 28.01.1992. It was in the aforesaid
background that the State Government made the reference
for adjudication on 29.03.1993. Section 4-K of the U.P.
Industrial Disputes Act is almost in tune with Section 10
of the Industrial Disputes Act, 1947 and also there is no
time limit fixed for making the reference for a dispute for
adjudication. Considering the identical words i.e., at any
time used in Section 10 (1) of the Act and Section 4 of
the U.P. Industrial Disputes Act, considered the main
question namely, Was the industrial dispute in existence
on the date of reference for adjudication? While
considering the same, a three-Judge Bench decision of
this Court as to the scope of the very same provision,
namely, Section 4-K of the U.P. Industrial Disputes Act
was cited before the Bench. In M/s Western India Match
Co. Ltd. vs. The Western India Match Co. Workers Union
and Ors., (1970) 1 SCC 225 = AIR 1970 SC 1205, the
learned Judges made the following observations:-
Therefore, the expression at any time, though seemingly
without any limits, is governed by the context in which it
appears. Ordinarily, the question of making a reference
would arise after conciliation proceedings have been
gone through and the Conciliation Officer has made a
failure report. But the Government need not wait until such
a procedure has been completed. In an urgent case, it can
886 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A at any time, i.e., even when such proceedings have not
begun or are still pending, decide to refer the dispute for
adjudication. The expression at any time thus takes in
such cases as where the Government decides to make a
reference without waiting for conciliation proceedings to
B B begin or to be completed. As already stated, the
expression at any time in the context in which it is used
postulates that a reference can only be made if an
industrial dispute exists or is apprehended. No reference
is contemplated by the section when the dispute is not an
C C industrial dispute, or even if it is so, it no longer exists or
is not apprehended, for instance, where it is already
adjourned or in respect of which there is an agreement or
a settlement between the parties or where the industry in
question is no longer in existence.
D D
Based on the interpretation of the three-Judge Bench, it
was concluded:
15. There are cases in which lapse of time had caused
fading or even eclipse of the dispute. If nobody had kept
E E the dispute alive during the long interval, it is reasonably
possible to conclude in a particular case that the dispute
ceased to exist after some time. But when the dispute
remained alive though not galvanised by the workmen or
the union on account of other justified reasons, it does not
F F cause the dispute to wane into total eclipse. In this case,
when the Government has chosen to refer the dispute for
adjudication under Section 4-K of the U.P. Act the High
Court should not have quashed the reference merely on
the ground of delay. Of course, the long delay for making
G the adjudication could be considered by the adjudicating
G
authorities while moulding its reliefs. That is a different
matter altogether. The High Court has obviously gone
wrong in axing down the order of reference made by the
Government for adjudication. Let the adjudicatory process
reach its legal culmination.
H H
 KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 887
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
After saying so, allowed the appeal of the workman and set
aside the judgment of the High Court.
16. Learned counsel appearing for the Management
heavily relied on the decision of this Court in Nedungadi Bank
Ltd. vs. K.P. Madhavankutty and Others, (2000) 2 SCC 455,
particularly, the ultimate conclusion in para 6 which reads thus:
6. Law does not prescribe any time-limit for the
appropriate Government to exercise its powers under
Section 10 of the Act. It is not that this power can be
exercised at any point of time and to revive matters which
had since been settled. Power is to be exercised
reasonably and in a rational manner. There appears to us
to be no rational basis on which the Central Government
has exercised powers in this case after a lapse of about
seven years of the order dismissing the respondent from
service. At the time reference was made no industrial
dispute existed or could be even said to have been
apprehended. A dispute which is stale could not be the
subject-matter of reference under Section 10 of the Act.
As to when a dispute can be said to be stale would
depend on the facts and circumstances of each case.
When the matter has become final, it appears to us to be
rather incongruous that the reference be made under
Section 10 of the Act in the circumstances like the present
one. In fact it could be said that there was no dispute
pending at the time when the reference in question was
made. The only ground advanced by the respondent was
that two other employees who were dismissed from service
were reinstated. Under what circumstances they were
dismissed and subsequently reinstated is nowhere
mentioned. Demand raised by the respondent for raising
an industrial dispute was ex facie bad and incompetent.
17. Though this decision lays down that law does not
prescribe any time limit for appropriate Government to exercise
its power under Section 10 of the Act, the Court has concluded
888 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A that the said power is to be exercised reasonably and in a
rationale manner. In that case, the Central Government
exercised its power after a lapse of about seven years of the
order dismissing the workman from service. A perusal of the
said decision shows that the workman has not furnished
adequate reasons/materials for such a long delay and the only
B B
ground advanced by him was that two other similarly placed
employees dismissed from service were reinstated.
18. It is true that following the decision in Nedungadi Bank
Ltd. (supra), another two-Judge Bench of this Court in Haryana
C C
State Coop. Land Development Bank vs. Neelam, (2005) 5
SCC 91 accepted the similar claim of the Management and
non-suited the workman on the ground of delay.
19. We have already pointed out that there is no limitation
D D prescribed in the Act or in any other local Act prescribing such
period. We have also referred to the materials placed by the
workman. By making various representations from the day
when his services were terminated and till his last
representation dated 16.07.1996 to the Manager, HARTON,
E E Chandigarh the workman has proved that he was agitating his
termination one way or other with all the authorities concerned.
The particulars furnished clearly show that the appellant/
workman was fighting for his cause before the Management as
well as with the State Government including the Chief Secretary
F F and the Minister of the concerned Department. Ultimately, the
State Government has made a reference on 22.11.1999 to the
Labour Court for adjudication.
20. The view expressed in Sapan Kumar Pandit (supra)
which is identical to our case has been considered and followed
G G in the subsequent decision, namely, S.M. Nilajkar and Others
vs. Telecom District Manager, Karnataka, (2003) 4 SCC 27.
In both the decisions, the principles laid down in Nedungadi
Bank (supra) have been considered and distinguished. We
have already mentioned that in Sapan Kumar Pandit (supra),
H H this Court followed the principles enunciated in three-Judge
 KULDEEP SINGH v. G.M., INST. DESIGN DEVELOPMENT 889
AND FACILITIES CENTRE [P. SATHASIVAM, J.]
Bench decision of Western Indian Match Co. (supra). At this
juncture, it is useful to remind and reiterate the finding rendered
by the Labour Court on issue Nos. 1, 5 and 6 holding that the
termination of the services of the workman/appellant herein
without complying with the provisions of Section 25F is illegal,
null and void and deserves to be set aside. Undoubtedly, the
Management has to follow the provisions of the Act while
effecting termination, in fact, which was accepted by the Labour
Court and the Management has not challenged the same before
any forum.
21. In view of the above, law can be summarized that there
is no prescribed time limit for the appropriate Government to
exercise its powers under Section 10 of the Act. It is more so
in view of the language used, namely, if any industrial dispute
exists or is apprehended, the appropriate government at any
time refer the dispute to a Board or Court for enquiry. The
reference sought for by the workman cannot be said to be
delayed or suffering from a lapse when law does not prescribe
any period of limitation for raising a dispute under Section 10
of the Act. The real test for making a reference is whether at
the time of the reference dispute exists or not and when it is
made it is presumed that the State Government is satisfied with
the ingredients of the provision, hence the Labour Court cannot
go behind the reference. It is not open to the Government to
go into the merit of the dispute concerned and once it is found
that an industrial dispute exists then it is incumbent on the part
of the Government to make reference. It cannot itself decide
the merit of the dispute and it is for the appropriate Court or
Forum to decide the same. The satisfaction of the appropriate
authority in the matter of making reference under Section 10(1)
of the Act is a subjective satisfaction. Normally, the Government
cannot decline to make reference for laches committed by the
workman. If adequate reasons are shown, the Government is
bound to refer the dispute to the appropriate Court or Forum
for adjudication. Even though, there is no limitation prescribed
for reference of dispute to the Labour Court/Industrial Tribunal,
890 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A even so, it is only reasonable that the disputes should be
referred as soon as possible after they have arisen and after
conciliation proceedings have failed, particularly, when disputes
relate to discharge of workman. If sufficient materials are not
put forth for the enormous delay, it would certainly be fatal.
B B However, in view of the explanation offered by the workman, in
the case on hand, as stated and discussed by us in the earlier
paragraphs, we do not think that the delay in the case on hand
has been so culpable as to disentitle him any relief. We are
also satisfied that in view of the details furnished and the
C C explanation offered, the workman cannot be blamed for the
delay and he was all along hoping that one day his grievance
would be considered by the Management or by the State
Government.
22. In the light of the above discussion and conclusion, we
D D set aside the award of the Labour Court insofar as holding that
the reference by the State Government is bad and incompetent
being raised so belatedly and dismissing the claim statement
on this ground and the order of the High Court dated
31.10.2006 in C.W.P. No. 8774 of 2005 affirming the said
E E order of the Labour Court and dismissing the writ petition filed
by the workman. In view of the conclusion of the Labour Court
with regard to Issue Nos. 1, 5 and 6 deciding in favour of
workman holding that the Management terminated his services
without complying with the provisions of Section 25F of the Act
F F and the said order is illegal, null and void deserves to be set
aside, we order reinstatement of the appellant-workman with
consequential service benefits but without back wages within
a period of eight weeks. Since the appellant is fighting for his
survival for more than a decade, we award a cost of Rs.50,000/
G G - to be paid by the respondent-Management directly to the
appellant/workman within the same period.
23. The appeal is allowed to the extent mentioned above.
N.J. Appeal allowed.
H H
 [2010] 15 (ADDL.) S.C.R. 891
ABUBUCKER SIQQIQUE AND ANR.
v.
THE STATE REPRESENTED BY THE DEPUTY
SUPERINTENDENT OF POLICE, CBI/SCB/CHENNAI,
TAMIL NADU
(Criminal Appeal No. 1374 of 2007)
DECEMBER 06, 2010
[B. SUDERSHAN REDDY AND SURINDER SINGH
NIJJAR, JJ.]
Penal Code, 1860 s. 120-B r/w ss. 153A, 201, 302, 326,
324, 419, 436 Explosives Act, 1884 s. 9(B)(1)(b)
Explosive Substances Act, 1908 ss. 3, 4, 5 and 6 Terrorist
and Disruptive Activities (Prevention) Act, 1987 ss. 3(2)(i)
and (ii), s. 3(3) Conspiracy allegedly hatched amongst D
appellants and others, subsequent to Babri Masjid demolition
Alleged procurement of gelatin sticks and other materials
and bomb manufactured using explosive substances Bomb
used to destroy Headquarters of a Hindu organization
Destruction of the building, death of eleven persons and E
injuries to seven Trial court convicting the appellants on
basis of confessional statement as also the evidence that
explosion was caused only by RDX and PETN and gelatin
sticks were not used Conviction u/s. 120-B r/w ss. 153A, 201,
302, 326, 324, 419, 436, s. 9(B)(1)(b) of the Explosives Act, F
ss. 3, 4, 5 and 6 of the Explosives Substances Act and s.
3(2)(i) and (ii) and s. 3(3) of the TADA Act with sentence of
life imprisonment On appeal, held: No evidence to link the
appellants with the explosion Except for the confessional
statements, no other independent evidence with regard to the
participation of the accused in the conspiracy and the
particular role played by them Bomb was made of RDX and
PETN but no trace of gelatin was found from the scene of
crime Prosecution could only prove that the appellants had
891
892 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A procured gelatin sticks and detonators from place G but traces
of said explosives could not be found from the scene of
occurrence Thus, order of conviction and sentence set
aside Evidence.
According to the prosecution, after the demolition of
B B
the Babri Masjid, the appellants alongwith the other
accused entered into a conspiracy for committing
terrorist acts at various places against Hindus. In order
to strike terror they decided to cause explosions with the
intent to cause destruction to the property belonging to
C C the Hindu community and the people present there. In
pursuance thereof, the appellants and their accomplices
went to place G and procured 13 kgs of gelatin and other
materials. Two explosive bombs were assembled. The
first and the second attempt to explode the bomb failed.
D The conspirators succeeded in the third attempt which
resulted in death of many and destruction of the
Headquarters of a Hindu Organization. A5 and A14 stood
outside the building, the office of a Hindu Organization.
A15 and A17 carried the bombs in the building and left
E the place. The trial court on basis of the confessional
statements made by the accused as also the evidence
that explosion was caused only by RDX and PETN and
that the gelatin sticks were not used, convicted the
appellants under Section 120-B IPC r/w Sections 153A,
F 201, 302, 326, 324, 419, 436 IPC, Section 9(B)(1)(b) of the
Explosives Act, Sections 3, 4, 5 and 6 of the Explosives
Substances Act and Section 3(2)(i), (ii) and Section 3(3)
of the TADA Act and sentenced them to life
imprisonment. The other accused were held liable only
for the acts of either promoting enmity among the
G G
religious groups or harbouring the accused before and
after the blast. Four accused were acquitted. Therefore,
the instant cross appeals were filed.
Allowing the appeals filed by the accused and
H H
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 893
SUPDT. OF POLICE
dismissing the appeal filed by the State, the Court
HELD: 1. In the instant case, there is no direct
evidence of the crime. The prosecution case hinges on
circumstantial evidence. Even in cases where no direct
evidence is available in the shape of eye-witnesses etc.,
a conviction can be based on circumstantial evidence
alone. [Para 11] [907-F]
Hanumant Govind Nargundkar vs. State of M.P. 1952
SCR 1091; Naseem Ahmed v. Delhi Admn. (1974) 3 SCC
668 referred to. C C
2.1 The contents of the confessional statements if
true, would indicate that all the accused and the
appellants, in particular, had entered into a conspiracy for
committing the violent and terrorist acts against a D
particular Hindu organization and Hindu places of
religious worships, religious institutions and places
frequented by Hindus in general. In order to strike terror
in the minds of the Hindus, they had decided to cause
explosions and commit crimes of violence, such as
murder. They were also intending to cause destruction
to the property belonging to the Hindu community. In
furtherance of the aim, the participants in the conspiracy,
the appellants in particular, and their accomplices had
been charged with the task of procuring high explosives.
For that purpose, they went to place G; and procured F
13 kgs of gelatin. From the explosive material collected
by the conspirators, two dangerously explosive bombs
had been assembled. The first attempt to explode such
a bomb did not fructify as the intended target had already
left the premises in which the bomb was to be exploded. G
The bomb was dismantled and kept in the house of A18
(absconding). The second attempt for exploding these
bombs also failed as the detonator was short circuited.
It was the third attempt in which the conspirators
succeeded, when A15 and A17 carried the two bombs H
894 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A into the building. They deposited the bombs in the
building and exited from there. They waited outside for
half an hour till the bomb exploded, resulting in the
destruction of the Headquarters of the Hindu
Organization. [Para 14] [910-B-G]
B B
2.2 Except for the confessional statements, there was
no other independent evidence with regard to the
participation of the accused in the conspiracy and the
particular role played by them. According to these
confessions, A15 and A17 had carried the two suitcases
inside the building. Therefore, it is apparent that even
according to the prosecution version, they could have
only carried bombs made from gelatin. Upon
investigation and according to the evidence, which was
recorded in the trial court itself, it was established that the
D bomb which caused the damage consisted only of RDX
and PETN. This is also the conclusion in the report
submitted by the Director, CFSL. [Paras 16 and 17] [911-
C-F]
2.3 The trial court, without any cogent evidence,
E E
accepted the submission of the prosecution that only
two persons-A15 and A18 (absconding accused), knew
about the procurement of RDX and PETN. Thereafter, the
trial court quite erroneously observed that A5 in his
confessional statement had indicated that gelatin sticks,
F
detonators and other explosives were procured. Having
said so, the trial court without any basis accepted the
contention of the prosecution that other explosives could
have been RDX, PETN and merely because the source
could not be proved it cannot be said that such
G
explosives were not used. This conclusion was reached
by the trial court inspite of the evidence of PW-223, the
investigating officer. [Para 20] [916-D-F]
2.4 The conclusion by the trial court does not explain
H as to what happened to 13 Kgs of Gelatin, which was
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 895
SUPDT. OF POLICE
procured from place G. It also does not explain as to A A
why only traces of RDX were found in dead bodies,
clothes and parts of the building. Not a trace of Gelatin
was found in the building. In none of the confessional
statements, it has been stated about any other explosives
being procured, yet the trial court concluded that other
explosive material has also been procured. The
conclusion is clearly without any factual basis nor
supported by any evidence. [Para 22] [917-G-H]
2.5 On a conjoint reading of the entire evidence, the
trial court clearly recorded the conclusion that only RDX
and PETN and not Gelatin sticks as claimed by the
prosecution were used for the explosion. It is also noticed
that the confessional statements reveals that what was
purchased were only Gelatin sticks from the place G and
not RDX and PETN. Such evidence would clearly destroy D
the very foundation of the prosecution case, which
proceeds on the basis that the gelatin and the detonators
were procured in place G was the material from which
the bombs were manufactured, which were responsible
for the explosion. Even according to the trial court, the E
exploding bomb consisted of RDX and PETN. Having
recorded the said conclusion that trial court without any
justification concluded that such evidence would only
affect the evidentiary value and truthfulness of the
confessional statements. The trial court having correctly F
recorded the conclusion in the earlier part of the
paragraph, unnecessarily and without any basis diluted
the same and restricted it only to the reliability of the
confessional statement. The trial court correctly observed
that the prosecution ought to have investigated the case G
in the angle of the usage of the RDX, PETN etc. Even
after making such an observation, the trial court
erroneously went on to convict the appellants who had
procured only Gelatin and Detonators from place G.
[Paras 23 and 24] [918-C-E; 919-C-D]
896 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
2.6 The submission that the appellants not being
scientists, referring to the explosive substance as gelatin
as opposed to RDX would not be fatal, cannot be
accepted. The confessional statements should be read
from the point of view of a layman. [Para 25] [919-E]
B B
2.7 The observations of the trial court that other
materials could have been RDX and PETN is perverse.
The other items in addition to gun powder were the iron
box, suit case, battery box, quartz timer, switch etc. The
confessional statement of A5 reveals that they had gone
C C
to place V to purchase gun powder for the preparation
of the bomb. Then they went to place G and procured 8
kgs of gelatine. Later they had procured 5 kgs of
gunpowder. The confessional statement of A5 only
reveals that they had procured gelatine, gunpowder and
D certain other accessories required for blasting a bomb
viz. detonators, switch, battery box, pen torch cells,
quartz timer etc. It is not mentioned in the confessional
statement as to how and when the appellants had
procured RDX and PETN-the materials with which the
E bomb made for blasting the building situated at N Street
was made. [Para 26] [920-E-H; 921-A]
2.8 The most important portion of the charge levied
was procurement explosives and other materials. It is
F not in dispute that explosives were procured from place
G. The confessional statement of A1 and A5 are
unequivocal that only gelatin sticks and detonators were
bought from place G from a licensed shop owner PW
112 (declared hostile). The prosecution has not been able
to ascertain as to how the appellants had access to RDX.
G
The trial court had accepted that as only two persons
namely A 15 (died) and absconding accused MA knew
about the source from where RDX was procured, the
other three accused-A 5, A 14 and A 17 who were closely
associated with them also knew about it. The observation
H H
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 897 898 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
SUPDT. OF POLICE
of the trial court is merely conjectural. The conclusion of A A (1996) 11 SCC 641 Referred to Para 8
the trial court that the other materials as mentioned in
1952 SCR 1091 Referred to Para 11
the charge sheet brings in its sweep other explosives like
RDX and PETN is wholly without any basis. The evidence (1974) 3 SCC 668 Referred to Para 11
on the record clearly militates against such a conclusion.
Thus, even if the charges are read along with the CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
B B No. 1374 of 2007.
confessional statement, it would not, in any manner,
improve the intrinsic value of the evidence led by the
From the Judgment & Order dated 21.06.2007 of the
prosecution. Suspicion no matter how strong cannot
Terrorist and Disruptive Activites (Prevention) Act, 1987,
take the place of legal proof. [Para 27] [921-E-H; 922-A-
Chennai in Calender Case No. 4 of 1994 in R.C. 16 (S)/93/
B]
C C CBI/SCB/MAS.
2.9 It is true that the prosecution case was that
WITH
explosive substances were used to make bombs. It is not
in dispute that the instant case was registered against Crl. A. Nos. 552 of 2008 & 1271 of 2009.
the 18 persons for blasting the RSS building situated at
N Street. The bomb was made of RDX and PETN but no D D P.P. Malhotra, ASG, N. Natarajan, Abdul Kalam Bahadur
trace of gelatin was found from the scene of crime. The Shah, A. Venayagan Balan, G. Balaji, Mahalakshmi Pavani,
prosecution could only prove that the appellant had Abdul Kalam Bahadur Shah (for Mahalakshmi Balaji & Co.),
procured gelatin sticks and detonators from place G but P.K. Dey, Dr. Shailendra Sharma, Padmalakshmi Nigam,
the traces of said explosives could not be found from the Madhurima Mridul, Arvind Kumar Sharma for the appearing
scene of occurrence. Thus, there is clearly no evidence E E parties.
to link the appellants with the explosion. [Para 28] [921-
D] The Judgment of the Court was delivered by

2.10 The prosecution story as put forward does not SURINDER SINGH NIJJAR, J. 1. These appeals have
inspire confidence on the basis of the material placed on been filed under Section 19 of the Terrorist and Disruptive
F F Activities (Prevention) Act, 1987 (hereinafter referred to as
record. The conviction and sentence passed against the
appellants are set aside. [Para 29] [922-F] TADA Act) against the final judgment and order dated 21st
June, 2007 passed by the designated Court No. II TADA Act,
Chhittar vs. State of Rajasthan 1995 Supp (4) SCC 519; 16(S)/93/CBI/SCB/MAS, whereby the learned Judge convicted
Aghnoo Nagesia vs. State of Bihar (1966) 1 SCR 134; Devku the appellants under Section 120-B IPC read with Sections
Bhikha vs. State of Gujarat (1996) 11 SCC 641 - referred to. G G 153A, 201, 302, 326, 324, 419, 436 IPC, Section 9(B)(1)(b)
of the Explosives Act, Sections 3, 4, 5 and 6 of the Explosives
Case Law Reference: Substances Act and Section 3(2)(i) and (ii) and Section 3(3)
1995 Supp (4) SCC 519 Referred to Para 8 of the TADA Act and they were sentenced to undergo
imprisonment for life.
(1966) 1 SCR 134 Referred to Para 8 H H
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 899
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
2. The prosecution case in brief was as follows:
After the demolition of the Babri Masjid in the month of
December 1992, there were numerous violent incidents in
various parts of the country attributed to Muslim fanatics against
Hindu organizations, places of religious worship and other
institutions. During the period from December 1992 to October B
1993, the appellants entered into a criminal conspiracy at
Madras, Vaniyam Padi Melapalayam, Madurai, Bangalore,
Tumkur, Anchal and other places to commit illegal acts by
inciting Muslim youths to commit acts of violence and terrorism.
Such acts included manufacturing of bombs, exploding them C
in various Hindu organizations, places of worship and other
religious institutions, committing murder of persons likely to be
present in the offices of such organizations and places of
worship, to cause hurt to the inmates therein, to escape after
the commission of such acts, to provide accommodation and D
shelter to the conspirators to carry out the object of the
conspiracy, to go into hideouts, to harbour the offenders
involved in such violent acts and to screen the offenders from
the clutches of law. Ahmad Ali (A9) addressed public meetings
and incited Muslim youths to fight against Hindu Munnani and E
RSS leaders and also to indulge in acts of violence to promote
enmity between Hindu and Muslims.
3. On 8th July, 1993, A14 Hyder Ali (posing himself to be
Ravi) and A15 Imam Ali (posing himself to be Sivakumar)
visited Vadacherry (located in the outskirts of Vaniyambadi-
Vellore District, Tamil Nadu) with the intention of causing bomb
blasts at a public meeting addressed by one of the Hindu
Munnani leaders Sridhar (PW 118). However they could not
execute their plan since the meeting was over by the time they
reached Vadacherry and the bomb remained unused. However G
they met Sridhar and after introducing themselves as Ravi and
Sivakumar, expressed their desire to meet him at Chennai. The
unused bomb was dismantled and kept in the house of A18
Mushtaq Ahmed at Jaffarbad in Vaniyambadi which is nearer
900 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A to Vadacherry. Afterwards the duo returned to Chennai. On
29th July, 1993, A5 Abubucker Siddique, A14 Hyder Ali, A15
Imam Ali and A17 Kaja Nizamuddin went to a house in Porur
and ordered a remote control device. Thereafter they went to
the house of A18 Mushtaq Ahmed (absconding accused) at
Jaffarabad. Together all the aforesaid accused went to
B
Gudiyatham and purchased gelatin and detonators and brought
it to the house of A18 Mushtaq Ahmed. It is further the case of
the prosecution that A15 Imam Ali conducted a trial blast at the
house of A18 Mushtaq Ahmed and thereafter left for Chennai
on the following day. They collected the remote control ordered
C
earlier from the Porur house and checked the same. They then
purchased pen torch cells, one battery box, quartz timer, switch
and some other items required for blasting suitcase bomb. On
30th July, 1993 A15 Imam Ali and A17 Kaja Nizamuddin along
with A5 Abubucker Siddique and A14 Hyder Ali went to the
D RSS office Chennai for surveying the place. While A15 Imam
Ali and A17 Kaja Nizamuddin were inside the RSS office A5
Abubucker Siddique and A14 Hyder Ali remained outside. A15
and A17 could not meet Sridhar as he was out of office.
However they met other office bearers and informed him that
E they were running a cassette recording company in Alandur,
Chennai and made an official entry of an incorrect/ non-existent
address in the register kept as a record of visitors to the RSS
office. On 6th August, 1993 all the above four accused went to
RSS office, Chennai with suitcases containing bombs. On the
F F way, A15 and A17 got down near a temple, applied Vibhooti
(white ash) and kum (tilak) on their forehead, stuck photos of
Lord Krishna on their suitcases. Again A15 and A17 went
inside the RSS office carrying the suitcases containing bombs
and A5 and A14 remained outside. A5 and A17 enquired about
Sridhar from Shanmugam, a RSS worker. A15 and A17 had
G
also talked to Jawahar, another RSS worker and handed over
a letter addressed to Sridhar. Thereafter they came out of the
office leaving behind the suitcase bombs and waited for about
half an hour at a tea shop. However the bombs did not explode.
H H
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 901
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
A15 and A17 went inside and brought the suitcase bombs A
outside and took it back to the godown of A1 Rafiq Ahmed.
On 7th August, 1993, they purchased new battery cells, cells
for torch light and plastic covers which do not conduct electricity.
These were brought for rectification and then the bombs were
again kept ready in both the suitcases. On 8th August, 1993 B
at about 11-12 am all the above four accused went again with
the two suit cases containing the bombs. Again A5 and A14
remained outside, A15 and A17 went inside the RSS office
carrying the suitcases the bombs. Inside the RSS office they
met PW1 Srinivasan and asked about Sridhar. After that they C
came out of the building leaving behind the suitcase bombs.
At about 1:45 pm there was loud explosions which resulted in
the death of 11 persons, injuries to 7 others and also complete
demolition of the building.
4. Instant case was registered by Mr. A. Rajaram, D
Inspector, Chetput, F-5, Police Station, Chennai in crime No.
1137 of 1993 under Section 120-B, 302 326, 153 A IPC,
Section 9B(1)(b) of The Indian Explosive Act, 1884 and
Sections 3 And 4 of The Explosive Substances Act, 1908
against unknown persons. Initially the investigation was started E
by CBCID, Metro, Chennai. Later on, the investigation was
transferred to CBI on 26th August, 1993 and registered in R.C
No. 16 (S) 93- CBI/SCB/Chennai and investigated by Mr. M.S.
Sundarajan DSp, CBI/SCB/Madras. After the completion of the
investigation, charge sheet dated 8th June, 1994 was filed F
against 18 accused under Sections 120-B IPC read with
Sections 153-A,201,302,326,324,419,436 IPC, Section
9(B)(1)(b) of the Explosives Act, Sections 3, 4, 5 and 6 of the
Explosives Substances Act and Section 3 of the TADA Act.
G G
5. The Designated Court No. II TADA Act, 1987
(hereinafter referred to as the Trial Court) by order dated 21st
June, 2007 convicted A1 Rafiq Ahmed under Section 153A
read with Section 109 IPC, A2 Shahabudeen under Section
201 IPC, A4 Abdul Rahim under Section 3(4) TADA Act, A5
H H
902 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A Abubucker Siddique under Section 120B read with Sections
153 A, 201, 302, 326, 324, 419, 436 IPC, Section 9(B)(1)(b)
of Explosive Act, Sections 3, 4, 5 & 6 of Explosives
Substances Act, Sections 3(2) and 3(3) of TADA Act, A7
Ahmed Gnaiyar under Section 3(4) TADA Act, A10 Md. Moosa
B Mohideen under Section 3(4) TADA Act, A11 Syed Md Buhari
under Section 3(4) TADA Act, A12 S.K. Md.Ali under Section
3(4) TADA Act, A14 Hyder Ali under Section 120B read with
Sections 153A,201,302,326,324,419,436 IPC, Section 9
(B)(1)(b) of Explosive Act, Sections 3, 4, 5 & 6 of Explosives
C Substances Act, Sec 3(2), 3(3) of TADA Act, A15 Imam Ali
(dead), A17 Kaja Nijammudin under Section 120B read with
Sections 153 A,201,302,326,324,419,436 IPC, Section 9
(B)(1)(b) of Explosive Act, Sections 3, 4, 5 & 6 of Explosives
Substances Act, Sections 3(2), 3(3) of TADA Act. The following
persons were acquitted namely A3 Mukhtar Ahmed, A6
D
S.A.Basha, A8 Ameenuddin Sheriff and A13 Abdul Aslam.
Aggrieved by the said judgment, A5 Abubucker Siddique and
A14 Hyder Ali filed Criminal Appeal No. 1374 of 2007. A17
Kaja Nizamuddin filed Criminal Appeal No. 552 of 2008 and
the State filed Criminal Appeal No. 1271 of 2009.
E
6. We have heard Mr. Natrajan, learned Senior Advocate
for the appellants Mr. P.P. Malhotra on behalf of the respondent
State.
F 7. Mr. Natarajan has submitted that the trial court has
committed a grave error in convicting the appellants. According
to the learned counsel, there was no legal evidence on the
record to indicate that the appellants were involved in the
explosion which was the subject matter of the charge sheet of
8th August, 1993. The entire body of evidence, according to
Mr. Natarajan, relied upon by the prosecution, consists of
various confessional statements recorded by the authorities
under Section 15 of TADA Act. According to him, these
confessions would show that :-
(i) All the accused had entered into a conspiracy as
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 903
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
alleged in the charge sheet.
(ii) In pursuance of this conspiracy, Abubucker
Siddique A5, Imam Ali (A15) Hyder Ali (A14) and
one Mushtaq Ahmed were engaged with the task
of procuring explosives and its accessories,
making bombs with them.
(iii) They went to Vaniyampadi in North Arcot District.
There, they associated Mustaq Ahmed who helped
them in procuring the explosive substance namely
gelatin sticks and detonators. They, thereafter, C
travelled to Gudiyatham and contacted a licenced
dealer Kamalnathan, PW.112, through a cycle shop
owner Jayasekhar, PW.111 and illegally purchased
the aforesaid explosives. According to the learned
counsel, five of the accused persons have given a D
confession on this point. In all, they purchased 8 kgs.
of gelatin on 30th July, 1993 and 5 kgs. on 1st
August, 1993. The 13 kgs. of gelatin alongwith the
detonators were required for manufacturing the two
bombs.
(iv) On 6th August, 1993, the effort to blow up the RSS
Office did not succeed as the bomb did not
detonate. In that attempt, A5, Abubucker Siddique
and A14, Hyder Ali stood outside the RSS Office.
A15, Imam Ali and A17, Kaja Nizamuddin went F
inside the RSS Office. On 7th August, 1993, both
the bombs were brought to the godown of Rafeeq
Ahamed, A1. There, the two bombs were repaired.
On 8th August, 1993, the same two bombs were
again taken to the RSS Headquarters for causing G
the explosion as narrated above.
8. According to Mr.Natarajan, the entire foundation of the
prosecution, as narrated above, is destroyed by the results of
examination of the bomb site, by the committee of experts
904 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A headed by the committee of experts headed by the Director of
Central Forensic Laboratory (CFSL) and the evidence of
Investigating officer, M.S. Sundarrajan PW 223 and K.
Sundarrajan PW 189. He submits that :-
(1) After the explosion, the bomb site was examined by
B B
the experts of the prosecution. The evidence of these
experts, consisting of five volumes of exhibits is on the
record. The expert report (Ex.P316) has clearly concluded
that the Improvised Explosive Device (IED) used was
prepared from high explosives. The explosive devices did
C not contain gelatin but was/were made of RDX and PETN.
(2) Investigating Officer M.S. Sundarrajan (PW 223) and
K. Sundarrajan (PW 189) have also stated that at the site
only the presence of RDX and PETN was detected in the
D bomb used on 8th August, 1993 and gelatin was not used.
(3) Mr. Natarajan then submitted that since the
conspirators had only procured gelatin, it was for the
prosecution to establish the source from where RDX was
brought. It was also for the prosecution to establish as to
E E
what has happened to gelatin, which was allegedly
procured by the conspirators.
(4) Since the prosecution is unable to answer either of the
two questions, the very substratum of the prosecution case
F is destroyed. Apart from the building, even from the
remains of the dead bodies and the clothes, only traces
of RDX and PETN were found.
(5) In the confessional statements, there is no mention of
any other explosive being procured by the conspirators.
G
The expression used was other materials. This expression
referred only to the other materials which were required to
assemble the bombs.
(6) The trial court erred in law in reading other materials
H H to mean other explosives. In support of his submission,
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 905
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
he relied on the evidence of Mr. M.S. Sundarrajan, the
investigating officer, PW.223. According to Mr. Natarajan,
this witness has admitted in the cross examination that
during the investigation, he was unable to find out the
origin of RDX and PETN. He also pointed out to the cross-
examination of Mr. K. Sundarrajan, PW.189, who stated
that PETN and RDX are different explosives. This witness
also stated that in gelatin sticks RDX will not be found.
(7) Even the trial court had noticed that the evidence of
experts shows that the explosion was caused only by RDX
and PETN and not by gelatin sticks. C C
(8) The trial court also accepts that even the confessional
statements revealed that what was purchased at
Gudiyatham was only gelatin and not RDX or PETN. Mr.
Natarajan submitted that the conclusion, therefore, reached D
by the trial court is without any legal basis.
(9) The trial court has misconcluded the legal position while
excluding from consideration the exculpatory part of the
confession. In support of this, the learned counsel relied
on Chhittar Vs. State of Rajasthan [1995 Supp (4) SCC
519]; Aghnoo Nagesia Vs. State of Bihar [(1966) 1 SCR
134] and Devku Bhikha Vs. State of Gujarat [(1996) 11
SCC 641].
(10) So far as A17 is concerned, Mr. Natarajan submitted
that he was not identified. His confession was not
recorded. A memo was filed in Court on 17th June, 1998
stating that he had died. Therefore, charge against him
had abated.
9. Mr.P.P.Malhotra, learned senior counsel on the other
hand submitted that the terms used by the defence are scientific
terms. The accused had merely said that they have purchased
explosives. They were not scientists and therefore even if they
call the explosives as gelatin instead of RDX would not be fatal
906 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A to the case of the prosecution. He further submitted that the
confessions have to be read from the point of view of a layman.
It was also submitted that merely because the prosecution has
not been able to prove the source of the bomb making material
does not mean bombs were not used or that they were not
B B planted by them. Thus the case of the prosecution as roughly
summarized by the learned senior counsel was that there was
a conspiracy hatched; bombs were manufactured using
explosive substances. These bombs were used to destroy the
RSS headquarters. It was further submitted that the prosecution
had established that explosives were used, the planting of the
bombs were also proved and it was for that reason that the
prosecution was not required to prove what kind of explosives
were used. It was further submitted that the prosecution case
is that the explosive chemicals were used for causing the bomb
blast. The confession of A5 and others clearly indicate that
D
explosive substances were procured. Recovery of high
explosive chemical PETN was also made from the godown of
A1, from the well located in the house of A2 as well as from
the grey colour pant of A17 as per recovery mahazars. It is not
the prosecution case that only gelatin and detonators were used
E E but the prosecution case is that explosive chemicals were
used. On the basis of the confessional statement of A5 some
of the sources of explosives and other materials were traced.
It was further submitted that PETN which was found from the
debris of the bomb blast site was also recovered from the dust
F F sweep collected from the godown of A1 where the bomb was
prepared, from the well in the house of A2 as well as from the
grey colour pant of A17. As per the expert opinion of Sh. K
Sundararajan PW 189, PETN itself is a highly explosive
substance and not simply a booster as claimed. It was further
G G submitted that the meeting between Sridhar and A14 & A15
at Vadacherry was confirmed by A15s own letter left at the
office of RSS office on 6th August, 1993 and hand writing
expert opinion. The visiting card given by Sridhar to A15 on 8th
July, 1993 at Vadachery recovered from the residence of A3
H H Mukhtar Ahmed at Bangalore confirms the connection between
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 907
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
A15 and A3. The visit of A15 Imam Ali posing himself as A A
Sivakumar in the RSS office on 30th July, 1993 and the entry
made in the register giving false non existing address found to
be of his own hand writing corroborates the fact that he visited
the RSS office on 30th July, 1993. It was further submitted the
accused persons had made an attempt to blast a bomb on 8th B B
July, 1993 at Vadachery but in vain. A5 in his confession
statement had indicated that explosives were procured in
addition to gelatin and detonators and the same could be RDX/
PETN. Merely because the source was not proved it cannot be
held that the same were not used considering the fact that traces C C
of RDX/PETN were found in the bodies at the scene of crime.
It was further submitted that the contention of the defence was
totally fallacious that RDX can be found only in the Indian Military.
During the Bombay Bomb Blast about 50 kgs of RDX were
smuggled to India. Further RDX is also used for selective
D D
industrial applications like demolition of structures etc. RDX
exists in the form of plasticine putty and it may not leave any
trace or residue like a liquid or powder substances as in the
case of PETN. According to Mr. Malhotra, the conclusions
recorded by the Trial Court are based on the correct analysis
E E
of the entire evidence. The conviction recorded against the
appellants does not call for any interference.
10. We have considered the submissions of the learned
counsel
F F
11. Undoubtedly, in this case there is no direct evidence
of the crime. The prosecution case hinges on circumstantial
evidence. It is an accepted proposition of law that even in cases
where no direct evidence is available in the shape of eye-
witnesses etc. a conviction can be based on circumstantial
G G
evidence alone. The hypothesis which can form the basis for
conviction purely on circumstantial evidence was stated by this
Court in the case of Hanumant Govind Nargundkar Vs. State
of M.P.,[1952 SCR 1091]. In the aforesaid judgment, Mahajan,
J. speaking for the Court stated the principle which reads thus:-
H H
908 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
It is well to remember that in cases where the evidence
is of a circumstantial nature, the circumstances from which
the conclusion of guilt is to be drawn should in the first
instance be fully established, and all the facts so
established should be consistent only with the hypothesis
of the guilt of the accused. Again, the circumstances should
be of a conclusive nature and tendency and they should
be such as to exclude every hypothesis but the one
proposed to be proved. In other words, there must be a
chain of evidence so far complete as not to leave any
reasonable ground for a conclusion consistent with the
innocence of the accused and it must be such as to show
that within all human probability the act must have been
done by the accused.
The aforesaid proposition of law was restated in the case of
Naseem Ahmed v. Delhi Admn., (1974) 3 SCC 668 by
Chandrachud J. as follows:
This is a case of circumstantial evidence and it is therefore
necessary to find whether the circumstances on which
prosecution relies are capable of supporting the sole
inference that the appellant is guilty of the crime of which
he is charged. The circumstances, in the first place, have
to be established by the prosecution by clear and cogent
evidence and those circumstances must not be consistent
with the innocence of the accused. For determining whether
the circumstances established on the evidence raise but
one inference consistent with the guilt of the accused,
regard must be had to the totality of the circumstances.
Individual circumstances considered in isolation and
divorced from the context of the over-all picture emerging
from a consideration of the diverse circumstances and their
conjoint effect may by themselves appear innocuous. It is
only when the various circumstances are considered
conjointly that it becomes possible to understand and
appreciate their true effect.
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 909
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
12. The trial court accepts that:-
(i) The entire case of the prosecution is based on
circumstantial evidence and confessions recorded
under Section 15 of TADA Act.
(ii) The confessional statements voluntarily made under
Section 15 of TADA Act are admissible in
evidence.
(iii) Having held the confessional statements to be
admissible yet the trial court discards part of the
confessional statement on the ground that they are
not truthful to some extent in respect of the
conspiracy aspect of all the accused and
involvement of all the accused.
(iv) After analyzing the entire evidence, the trial court
concludes that the evidence indicates that the
explosion was caused only by RDX and PETN.
(v) It is also concluded that gelatin sticks were not
used.
(vi) It is also accepted that in Gudiyatham only gelatin
sticks were purchased and not RDX or PETN.
(vii) The trial court accepted that the aforesaid will have
a serious bearing on acceptability of the
confessional statement of the accused and their
involvement of all accused in the conspiracy.
(viii) Inspite of the aforesaid, it is concluded that there
is sufficient evidence to show that the appellants
committed the overt act of causing the explosion as
claimed by the prosecution. The discrepancy
between the material found at the bomb site and
the material purchased by the conspirators is held
to be not of much importance.
910 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 13. On the basis of the aforesaid, the trial court concluded
that the A5, A14, A15 and A17 were liable for the charges with
which they were charged. All the other accused were liable only
for their act of either promoting enmity among the religious
groups or harbouring the accused before or after the blast.
B B
14. In our opinion, the contents of the confessional
statements if true, would indicate that all the accused mentioned
above and the appellants, in particular, had entered into a
conspiracy for committing the violent and terrorist acts against
a particular Hindu organization and Hindu places of religious
C C worships, religious institutions and places frequented by Hindus
in general. In order to strike terror in the minds of the Hindus,
they had decided to cause explosions and commit crimes of
violence, such as murder. They were also intent to cause
destruction to the property belonging to the Hindu community.
D D In furtherance of this aim, the participants in the conspiracy, the
appellants in particular, and their accomplices had been
charged with the task of procuring high explosives. For that
purpose, they went to Gudiyatham and procured 13 kgs of
gelatin as narrated herein above. From the explosive material
E E collected by the conspirators, two dangerously explosive
bombs had been assembled. The first attempt to explode such
a bomb did not fructify as the intended target had already left
the premises in which the bomb was to be exploded. The bomb
was dismantled and kept in the house of A18 Mushtaq Ahmed
F F (absconding). The second attempt for exploding these bombs
also failed as the detonator was short circuited. It was the third
attempt in which the conspirators succeeded. This attempt took
place on 8th August, 1993 when A15 Imam Ali and A17 Kaja
Nizamuddin carried the two bombs into the building. They
G G deposited the bombs in the building and exited there from. They
waited outside for half an hour till the bomb exploded. This is
the sum total of the sequence of events leading upto the
explosion that destroyed the RSS, Headquarters on 8th August,
1993.
H H 15. Quite some time after the explosion, upon investigation,
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 911
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
certain arrests were made. A5 Abubucker Siddique was A
arrested on 24th October, 1993. A14 Hyder Ali was arrested
in some other case but was produced before the Trial Court
on PT warrant on 16th August, 1995. A15 has died. A17 Kaja
Nizamuddin was arrested in some other case and produced
before the Trial Court on 13th March, 2000 on PT warrant. We B
may notice here that A14 Hyder Ali and A17 Kaja Nizamuddin
were also arrested in some other case and that too after two
years and 7 years respectively. On interrogation, they made
confessional statements.
16. Excepting for the confessional statements, admittedly, C
there is no other independent evidence with regard to the
participation of the accused in the conspiracy and the particular
role played by them. According to these confessions, A15 Imam
Ali and A17 Kaja Nizamuddin had carried the two suitcases
inside the building. Therefore, it is apparent that even according D
to the prosecution version, they could have only carried bombs
made from gelatin. The lid on the prosecution case is blown
away by the report of forensic experts and the traces of the
explosive material collected at the Bomb site.
E E
17. Upon investigation and according to the evidence,
which has been recorded in the trial court itself, it has been
established that the bomb which caused the damage consisted
only of RDX and PETN. This is also the conclusion in the
Report on the Investigation of the Bomb blast which occurred F
at Chetput, Madras on August 8th, 1993 submitted by T.R.
Baggi, Director, CFSL, Hyderabad. Relevant extracts of the
aforesaid report are as under:-
The State Head quarters of R.S.S. is located at No. 2,
M.V. Naidu Street, Chetput, Madras 8. On Sunday, the G
8th August, 1993 at about 1345 hours, the three storied
building was damaged by a loud blast killing 11 persons
and injuring 5. On Monday, the 9th August, 1993, Shri J.N.
Saksena, IPS, Director General, Bureau of Police
Research & Development (BPR&D), New Delhi alerted Dr. H
912 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A T.R. Baggi, Director, Central Forensic Science Laboratory
(CFSL), Hyderabad and permitted the CFSL team to visit
Madras to help the Tamil Nadu Police in the investigation
if a request is received from them. Later Shri B.
Perumalswamy, IPS, Additional Director General of Police
B (Crime), Madras contacted the Director, CFSL, Hyderabad
and requested him to visit Madras and help the Tamil Nadu
Government in the investigation of the Bomb blast at R.S.S.
Head quarters building at M.V. Naidu Street, Chetput,
Madras.
C
Accordingly, a team consisting of Dr. T.R. Baggi, Shri
Nagraj Shankpal, Shri V Suresh and Shri M Vara Prasad
of CFSL, Hyderabad reached Madras on the morning of
10th August, 1993 to provide the necessary help in the
investigation.
D
This report presents the details of the extent of damage
to the structure, human life, property, neighbourhood due
to the explosion while discussing the structural failure
pattern. The report also presents the details of the post-
explosion laboratory investigations particularly fixing the
seat of explosion in the building and the chemical nature
of Improvised Explosive Device (IED) used in the blast.
(B) LABORATORY ANALYSIS FOR THE EXPLOSION
RESIDUES:
F
It was reported that the police officers collected several
material objects (exhibits) immediately after the blast as
clue materials to be sent to Forensic Science Laboratory
for analysis. Later the Forensic Science Laboratory
G personnel also collected several exhibits for analysis. The
material recovered from the dead bodies, which consisted
of debris material, which had entered the bodies like metal
pieces, stone pieces, glass pieces, plastic material,
wooden pieces etc., were also sent for analysis. Portions
H of the burnt skin of the deceased and the clothings of the
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 913
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
deceased persons were also sent for analysis. The debris
which was removed by the bulldozer to extricate the dead
bodies was piled up in the open space in front of the
building. As most of the crucial clues must be lying in this
debris, it was suggested to the senior officers of the Tamil
Nadu Police to transport the entire debris after removing
big boulders and stones, etc., to the Forensic Science
Laboratory (FSL) premises, so that the debris could be
served for parts of any IED initiating devices and explosion
residues. Accordingly, about 30 lorry loads of debris was
transported to FSL premises and sieving process was
undertaken.
Preliminary spot tests and Thin Layer Chromatographic
(TLC) tests carried out on the select exhibits cited above
gave positive tests for Penta Erythritol Tetra Nitrate (PETN)
initially and no positive response was obtained for other
propellants, low and high explosives. Based on these
findings, it was suggested by FSD/Police Officers of
Madras that PETN alone could have been used in the IED.
However, the CFSL, Hyderabad did not agree with this
view and conveyed that the literature indicates that only in
few cases PETN alone is used for causing small
explosions like safe-cracking or blasting an automobile
etc. Therefore, it was suggested that as PETN was always
used as an initiator/booster for other high explosives such
as Cyclotrimethylene trinitramine (RDX), Trinitro toluene
(TNT), 2,4,6 trinitrophenylmethyl nitramine (Tetryl),
Nitroglycerine (NG), Cyclotetramethylene tetramine (HMX)
etc. An analytical search could be carried out
systematically for one of these high explosives.
Accordingly, some more screening tests were conducted
on large number of exhibits sent by the police/medical
officers and the debris received in FSL by using larger
quantities and clean-up procedures. In this screening
procedure positive response was obtained for both PETN
and RDX in some of the exhibits. It was also noted that
914 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A few exhibits gave positive tests only for PETN, some
exhibits gave positive tests only for RDX and some exhibits
gave positive tests for both PETN and RDX. However,
many exhibits did not give positive tests for any of the
explosives.
B B
It can be seen that the retention times of RDX and PETN
in various exhibits analysed are tallying with the retention
times of the standard runs on RDX and PETN, confirming
the presence of RDX/PETN in the respective exhibits.
C C As a further confirmation, two representative exhibit
extracts were injected into the column, later, the same
exhibits were spiked with RDX and PETN and
chromatographed. Corresponding increase in peak
heights was noted in each case confirming that the peaks
D D were essentially of RDX and PETN.
Further the analysis was carried out at two different wave
lengths namely 210nm and 230nm to get better sensitives
for individual components. It was noted that the
E chromatograms at both these wave lengths gave positive
E
response for the presence of RDX/PETN correspondingly.
The comparison of TLC results and HPLC results also
indicates that in some of the exhibits only PETN is present,
in some of the exhibits only RDX is present and in some
F F of the exhibits both PETN and RDX are present.
Based on the site visits, discussions with Chief Engineer,
PWD, visiting team of IIT Structural Engineers, the medial
officers, the police officers and chemical analysis, the
G G following conclusions are drawn:-
(a) The origin of the blast is in the ground floor.
(b) The seat of the blast is slightly to the north of the
centre of the entry hall/reading room-library.
H H
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 915
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
(c) The seat of explosion is located at a place above
the ground level.
(d) The primary damage from the blast is the failure of
the four walls, roof of the entry hall followed by the
failure of the roof of the prayer hall, east and west
walls of the prayer hall and the two storied porch.
(e) The secondary failures consisted of severe
cracking of walls, shattering of door/window frames
and glass panes.
(f) The IED used was prepared from high explosives.
(g) The IED contained cyclotrimethylene trimitramine
(RDX) as high explosive and Penta Erythritol Tetra
Nitrate (PETN) as initiator/booster.
(h) Seeing the damage, the RDX charge in the IED
used could be roughly assessed to the order of
about one (1) kg.
18. Mr. Natarajan, in our opinion, correctly formulated the
two vital questions, viz., (i) where did the RDX come from? and
(ii) what happened to the Gelatin? Since the evidence of the
prosecution itself clearly indicates that the explosive material
used in the bomb explosion was RDX and PETN, it was
necessary for the prosecution to satisfactorily answer the
aforesaid two questions.
19. The Trial Court was well aware of the legal position
which is evident from the following observations:
With regard to the contention of the defence in respect
of RDX, PETN etc., it is true that when it is the specific
case of the prosecution that the explosives and other
materials were procured from Gudiyatham, Chennai and
other places, it is the duty cast upon the prosecution to
prove the specific allegation beyond doubt in a very cogent
916 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A manner without missing any link in the chain of
circumstances. The prosecution says that gelatin sticks
were procured from Gudiyatham at Vellore District, but the
relevant witnesses were treated as hostile witnesses.
However, Ex.P.298 and Ex.P.316 and the conclusions
B B reached therein by the team of experts shows the usage
of RDX in blasting the building in question.
Presence of high explosives namely RDX, PETN and other
lethal and Hazardous substances were detected from the
dead bodies and other materials recovered from the
C C
debris and also seized from the accused when subjected
for chemical examination.
20. Having recorded the aforesaid conclusion, the trial
court, without any cogent evidence, accepted the submission
D D of the prosecution that only two persons knew about the
procurement of RDX, PETN etc, namely A15 Imam Ali and A18
Mushtaq Ahmed (absconding accused). Thereafter, the trial
court quite erroneously observed that A5 Abubucker Siddique
in his confessional statement had indicated that gelatin sticks,
detonators and other explosives were procured. Having said
E E
so, the trial court without any basis goes on to accept the
contention of the prosecution that other explosives could have
been RDX, PETN and merely because the source could not
be proved it cannot be said that such explosives were not
used. This conclusion is reached by the trial court inspite of the
F F
evidence of the investigating officer Mr. M.S. Sundarrajan, PW-
223. His statement was as under:-
.During the course of my investigation, I could not find
out the origin from where RDX or PETN was obtained by
G G the accused for causing blast of RSS Office building in this
case because the main accused Imam Ali and Hyder Ali
were not available to me for my investigation at the relevant
point of time to throw light about this. From the examination
of other accused persons, I could not get details about the
H H particulars of RDX or PETN.
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 917
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
So also during the cross-examination of PW 189 Mr.K.
Sundarrjan has stated as under:-
.PETN and RDX are different articles. In Gelatin
sticks RDX will not be found..
21. Upon noticing the aforesaid evidence the trial court
quite rightly concludes that
a conjoint reading of the above shows that RDX and
PETN are different materials in composition, differing from
that of gelatin. In Gelatin sticks RDX or PETN will not be
found. Therefore, the prosecution ought to have
investigated the case in the angle of the usage of the RDX,
PETN etc., in the instant bomb blast.
But having recorded the aforesaid conclusion, the trial court
again proceeds to record a conclusion which would be wholly
without any basis. This conclusion is as under:-
However, it will not affect the merits of the case as high
explosives were also stated to have been procured and
used in addition to Gelatin sticks. But the source from
where these materials were purchased is said to have
been within the exclusive knowledge of Mustaq Ahamed
(absconding accused) and A15 Imam Ali (since dead), it
will have some bearing on the reliability and acceptability
of the confession statements of the accused to some
extent as aforesaid.
22. The aforesaid conclusion does not explain as to what
happened to 13 Kgs of Gelatin, which was procured from
Gudiyatham. It also does not explain as to why only traces of
RDX were found in dead bodies, clothes and parts of the
building. Not a trace of Gelatin was found in the building. It is
worth noticing here that in none of the confessional statements,
has it been stated about any other explosives being procured,
yet the trial court concludes that other explosive material has
also been procured. The conclusion is clearly without any factual
918 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A basis nor supported by any evidence.
23. We may reiterate here that it is admitted by Mr.
Sundarrajan that the origin from where the RDX or PETN was
obtained by the accused were not discovered. He also
emphatically stated that PETN and RDX are different articles.
B B
It is also stated in his cross-examination that in Gelatin sticks,
RDX will not be found. On a conjoint reading of the entire
evidence, the trial court clearly recorded the conclusion that only
RDX and PETN and not Gelatin sticks as claimed by the
prosecution were used for the explosion. It is also noticed that
C C the confessional statements reveals that what was purchased
were only Gelatin sticks from Gudiyatham and not RDX and
PETN. Such evidence would clearly destroy the very foundation
of the prosecution case, which proceeds on the basis that the
gelatin and the detonators were procured in Gudiyatham was
D D the material from which the bombs were manufactured, which
were responsible for the explosion on 8th August, 1993. Even
according to the trial court, the exploding bomb consisted of
RDX and PETN. Having recorded the aforesaid conclusion that
trial court without any justification concludes such evidence
E E would only affect the evidentiary value and truthfulness of the
confessional statements. We may notice here the conclusion
as recorded by the trial court as follows:-
Now a conjoint reading of the confessional statements of
the accused already said above, searches made and
F F
recoveries effected from the respective places of the
accused, material seized from the scene of crime, recovery
seizure and observation mahazers therefore and
consequential chemical examination and its result and the
evidence of the experts therefore shows that what was used
G G for the explosion was only RDX and PETN and not gelatin
sticks as claimed by the prosecution. The confessional
statements reveals that what was purchased was only
gelatin sticks from Gudiyatham and not RDX or PETN
which has got a serious bearing on the acceptability of the
H H confessional statements of the accused and their
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 919
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
involvement of all the accused in the conspiracy. According
to the learned Special Public Prosecutor only two persons
namely A15 Imam Ali (died) and absconding accused
Mustaq Ahamed knew about it. It follows that the other three
accused namely A5 Abubucker Siddique, A14 Hyder Ali
and A17 Kaja Nizamuddin who were closely associated
with them also knew about it. It goes without saying that
they only conspired together and did everything for bomb
blast.
24. In our opinion, the trial court having correctly recorded
the conclusion in the earlier part of the paragraph,
unnecessarily and without any basis diluted the same and
restricted it only to the reliability of the confessional statement.
We are of the considered opinion that the Trial Court correctly
observed that the prosecution ought to have investigated the
case in the angle of the usage of the RDX, PETN etc. Even
after making such an observation, the Trial Court erroneously
goes onto convict the appellants who had procured only Gelatin
and Detonators from Gudiyatham.
25. We are unable to accept the submission of Mr. P.P.
Malhotra that the appellants not being scientists, referring to the
explosive substance as gelatin as opposed to RDX would not
be fatal. According to him, the confessional statements should
be read from the point of view of a layman. We may refer to
certain extracts from the confessional statement of A5
Abubucker Siddique, which is as follows:-
Afterwards, we four went to see Mustaq of Vaniyampadi
to purchase gun powder for the preparation of bomb. They
went to Gudiyatham and bought 8 Kgs. of Gelatin and
some detonators. Imam Ali and Mustaq went outside and
bought an iron box to be suitable for fitting in a two wheeler.
At the house of Mustaq, Imam Ali conducted a Trial of
blasting the gun powders by setting a timer. On the same
day, we all of us along with Mustaq and his friend Shakil
went to a theatre at Vaniyambadi and saw an English Film
920 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A called Armour for the action. While going to the cinema,
Mustaq and Shakil kept the gun powder and other items
in a house near the Theatre and after seeing the cinema,
we took the items from that house and left for Chennai in
the night and reached Chennai in the next day morning i.e.,
B B 30.07.93.
On the next day after our return from Vaniyambadi, we
went to Riche Street and bought the following items: some
pen torch cells, one battery box, quartx timer, switch and
some items which are required for blasting the bomb from
C C a box/ suitcase.
On 1.8.93, Imam Ali sent me to purchase 5 kgs of gun
powder, a box made of iron for the purpose of making the
second bomb and also told me to meet Mustaq at
D D Jafrabad. He gave me Rs.275 for this purpose. He also
told me to bring the gun powder from Mustaqs house
which was bought form Mustaqs house which was bought
for planting bombs at Hindu Munnani meeting at
Vadacherry.
E E
26. We are of the considered opinion that the observations
of the trial court that other materials could have been RDX and
PETN is perverse. In our opinion, Mr. Natarajan had correctly
submitted that the other items in addition to gun powder were
the iron box, suit case, battery box, quartz timer, switch etc. The
F F confessional statement of A5 Abubucker Siddique reveals that
they had gone to Vaniyampadi to purchase gun powder for
the preparation of the bomb. Then they went to Gudiyatham and
procured 8 kgs of gelatine on 29.7.93. Later they had procured
5 kgs of gunpowder on 1.8.93. We are of the considered
G G opinion that the confessional statement of A5 Abubucker
Siddique only reveals that they had procured gelatine,
gunpowder and certain other accessories required for blasting
a bomb viz. detonators, switch, battery box, pen torch cells,
quartz timer etc. It is not mentioned in the confessional
H H statement as to how and when the appellants had procured
 ABUBUCKER SIQQIQUE v. STATE REP. BY DY. 921
SUPDT. OF POLICE [SURINDER SINGH NIJJAR, J.]
RDX and PETN i.e. the materials with which the bomb made
for blasting the RSS building situated at No. 1 M.V. Naidu
Street was made.
27. It was vehemently argued before us by Mr. Malhotra
that the charge has to be read along with the confessional
statements. We may notice an extract of the charge relied upon
by him. It reads as follows:
Fifthly: that you A-1, A-2, A-5, A-5 and A-8 in pursuance
of the said criminal conspiracy during the said period and
in the course of the same transaction and in the furtherance
of the common intention of you A-1, A-2, A-5 and A-8 and
the absconding accused Imam Ali, Hyder Ali and Kaja
Nizamuddin to commit murders and cause injuries to RSS
and Hindu Munnani leaders and others who were likely to
be present on 8.8.93 at about 1.45 pm at the RSS
Headquarters building procured explosives and other
materials required for preparing the two suitcase-bombs
at godown no 21, Subaiah Street, Periamet, Madras
belonging to A1
We are of the considered opinion that the most important
portion of the aforesaid charge is procured explosives and
other materials. We have considered the confessional
statements in extenso. It is not in dispute that explosives were
procured from Gudiyatham. The confessional statement of A1
Rafiq Ahmed and A5 Abubucker Siddique are unequivocal that
only gelatin sticks and detonators were bought from
Gudiyatham form a licensed shop owner PW 112 Kamalnathan
(declared hostile). The prosecution has not been able to
ascertain as to how the appellants had access to RDX. The
Trial Court had accepted that as only two persons namely A15
Imam Ali (died) and absconding accused Mustaq Ahamed
knew about the source from where RDX was procured, the
other three accused namely A5 Abubucker Siddique, A14
Hyder Ali and A17 Kaja Nizamuddin who were closely
associated with them also knew about it. The observation of
922 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A the Trial Court is merely conjectural. In our opinion, the
conclusion of the Trial Court that the other materials as
mentioned in the charge sheet brings in its sweep other
explosives like RDX and PETN is wholly without any basis. The
evidence on the record clearly militates against such a
B conclusion. Thus even if the charges are read along with the
B
confessional statement, it would not, in any manner, improve
the intrinsic value of the evidence led by the prosecution.
Suspicion no matter how strong cannot take the place of legal
proof.
C C 28. As submitted by Mr. Malhotra, it is true that the
prosecution case was that explosive substances were used to
make bombs. It is not in dispute that the present case was
registered against the 18 persons for blasting the RSS building
situated at No. 1 M.V. Naidu Street. As noticed hereinabove
D D the bomb was made of RDX and PETN but no trace of gelatin
was found form the scene of crime. The prosecution could only
prove that the appellant had procured gelatin sticks and
detonators form Gudiyatham but the traces of said explosives
could not be found from the scene of occurrence. Thus there is
E E clearly no evidence to link the appellants with the explosion.
29. In the result the prosecution story as put forward does
not inspire confidence on the basis of the material placed on
record. Criminal Appeal No.1374 of 2007 and Criminal Appeal
No.552 of 2008 filed by the accused appellants are, therefore,
F F
allowed and the conviction and sentence passed against the
appellants are set aside. They shall be set free forthwith unless
wanted in any other case.
CRIMINAL APPEAL NO.1271 OF 2009
G G
1. In view of the judgment passed in the aforesaid two
appeals, this appeal stands dismissed.
N.J. Appeals disposed of.
H
 [2010] 15 (ADDL.) S.C.R. 923
CHATTI KONATI RAO & ORS.
v.
PALLE VENKATA SUBBA RAO
(Civil Appeal No. 6039 of 2003)
DECEMBER 7, 2010
[HARJIT SINGH BEDI AND CHANDRAMAULI KR.
PRASAD, JJ.]
LETTERS PATENT (as applicable to the High Court of
Andhra Pradesh):
Clause 10 Letters Patent Appeal Power of Division
Bench of High Court HELD: Power of Division Bench,
hearing a Letters Patent appeal from judgment of a Single
Judge in a first appeal, is not limited only to a question of law
u/s 100, but it has the same power which the Single Judge
has as a first appellate court in respect of both questions of
fact and of law.
Adverse Possession:
Suit for recovery of possession Defendants pleas that
they purchased the property and, alternatively, perfected title
by adverse possession claiming to have come in possession
under agreement of sale HELD: Both the pleas have not
been substantiated Neither the purported sale deed nor the
agreement of sale have been placed on record.
Adverse possession Ingredients of Explained
HELD: Animus possidendi is a requisite ingredient of adverse
possession Mere possession does not ripen into
possessory title until possessor holds property adverse to the
title of true owner for a period of 12 years The person who
claims adverse possession is required to establish the date
on which he came in possession, nature of possession, the
923
924 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A factum of possession, knowledge to the true owner, duration
of possession and that the possession was open and
undisturbed A person pleading adverse possession has no
equities in his favour and he has to plead and establish
clearly all necessary facts to establish adverse possession
B B Plea of adverse possession is not a pure question of law but
a blended one of facts and law Equities - Pleadings.
Plaintiffs no. 1 and 2, the mother and the son, filed a
suit against the brother and the sister of plaintiff no. 2
(defendants no. 1 and 2, respectively) for recovery of
C C possession in respect of certain properties, including
four acres of land pertaining to R.S. No. 44/3 (the land in
dispute) situate in their village. Their case was that
defendant No. 1 was looking after the land in dispute, but
when he declined to deliver possession of the land in
D D dispute, they filed a suit for recovery of possession and
mesne profit. The plea of defendant no. 1 was that he
purchased the land in dispute under a stamped
agreement from VR, the father of plaintiff no. 1 and
husband of plaintiff no. 2, for Rs.1600/-; that he paid
E E Rs.1,000/- to VR and a sum of Rs.225/- to one BC who
was the tenant and in possession of the land in dispute
and the said tenant relinquished his possession and
delivered the land to defendant No. 1; and that he had
perfected his title by adverse possession. Though no
F F issue of adverse possession was framed, but the trial
court dismissed the suit, holding that title to the plaintiffs
even if proved, got extinguished by adverse possession.
The appeal filed by the plaintiffs was dismissed by the
Single Judge of the High Court. However, their Letters
G G Patent Appeal was allowed by the Division Bench of the
High Court and the suit was decreed.
In the appeal filed by the heirs and legal
representatives of defendant No.1, it was contended for
the appellants that the concurrent findings of facts of the
H H
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 925
SUBBA RAO
trial court and the appellate court ought not to have been
upset by the Division Bench in Letters Patent Appeal; and
that the appellants had perfected their title by adverse
possession and the findings so recorded by the trial
court and the appellate court ought not to have been
interfered in Letters Patent Appeal.
Dismissing the appeal, the Court
HELD: 1. The Division Bench of the High Court
rightly held that the power of the Division Bench hearing
a Letters Patent appeal under Clause 10 from the
judgment of a Single Judge in a first appeal is not limited
only to a question of law u/s 100 of the Code of Civil
Procedure, but it has the same power which the Single
Judge has as a first appellate court in respect of both
questions of fact and of law. [para 10] [932-E-F]
Asha Devi v. Dukhi Sao 1975 (1) SCR 611 = AIR 1974
SC 2048: (1974) 2 SCC 492 - relied on.
2.1. Mere possession however long does not
necessarily mean that it is adverse to the true owner. It
means hostile possession which is expressly or impliedly
in denial of the title of the true owner and in order to
constitute adverse possession the possession must be
adequate in continuity, in publicity and in extent so as to
show that it is adverse to the true owner. The possession
must be open and hostile enough so that it is known by
the parties interested in the property. The plaintiff is
bound to prove his title as also possession within 12
years and once he does that, the burden shifts on the
defendant to establish that he has perfected his title by
adverse possession. [para 14] [935-B-D]
2.2. Claim by adverse possession has two basic
elements, i.e., the possession of the defendant should be
adverse to the plaintiff and the defendant must continue
to remain in possession for a period of 12 years
926 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A thereafter. Animus possidendi, is a requisite ingredient of
adverse possession. Mere possession does not ripen
into possessory title until possessor holds property
adverse to the title of the true owner for the said purpose.
The person who claims adverse possession is required
B B to establish the date on which he came in possession,
nature of possession, the factum of possession,
knowledge to the true owner, duration of possession and
that the possession was open and undisturbed. [para 14]
[935-E-F]
C C T. Anjanappa v. Somalingappa 2006 (5 ) Suppl.
SCR 200 = (2006) 7 SCC 570 - relied on.
2.3. A person pleading adverse possession has no
equities in his favour as he is trying to defeat the rights
D D of the true owner and, therefore, it is for him to plead and
establish clearly all facts necessary to establish adverse
possession. The courts always take unkind view towards
statutes of limitation overriding property rights. Plea of
adverse possession is not a pure question of law but a
blended one of fact and law. [para 14] [935-G-H]
E E
Karnataka Board of Wakf vs. Government of India and
Ors. 2004 (1) Suppl. SCR 255 = (2004) 10 SCC 779 - relied
on.
2.4. In the instant case, the appellants have miserably
F F
failed to prove that they have perfected their title by
adverse possession. It is significant to note that initial
plea of the appellants was that they had purchased the
property from the original owner, alternatively, by virtue
of agreement of sale they came in possession of the
G G property. Both these pleas have not been substantiated.
Neither the purported sale deed nor agreement of sale
have been placed on record. [para 15] [936-B]
2.5. As regards the plea of adverse possession, the
H H appellants case is that out of the consideration money
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 927
SUBBA RAO
of Rs.1,600/-, defendant no. 1 paid Rs.1,000/- to the owner
and on payment of Rs. 225/- to the tenant in possession,
namely, BC, he relinquished his possession. This
relinquishment of possession by the tenant shall not
enure to the benefit of the appellants against the true
owner so as to accept their claim for adverse possession.
The appellants are required to prove that their possession
was adverse to the true owner. [para 15] [936-D]
2.6. The plea of the appellants on the basis of the
purported order dated 18.2.1954 of the Settlement Officer
directing for issuance of Patta in favour of defendant no.
1 also does not advance their case. It is not the appellants
case that plaintiffs were party before the Settlement
Officer. Further, it is not in dispute that no Patta was
issued in favour of the defendant no. 1, on the other hand,
and in fact, rough Patta was issued in favour of plaintiff
no. 2. Thus, the appellants have not proved the
necessary ingredients to establish their title by adverse
possession. The Division Bench of the High Court is
absolutely right in rejecting the appellants plea of adverse
possession and decreeing the plaintiffs suit. [para 15]
[936-E-F]
Case Law Reference:
1975 (1) SCR 611 relied on para 10
2006 (5) Suppl. SCR 200 relied on para 12
2004 (1) Suppl. SCR 255 relied on para 13
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6039 of 2003.
From the Judgment & Order dated 19.12.2001 of the High
Court of Andhra Pradesh at Hyderabad in LPA No. 438 of 1988.
Ananga Bhattacharya, Rohit R. (for V.G. Pragasam) for the
Appellants.
928 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Abid Ali Beeran, Neeru Vaid for the Respondent.
The Judgment of the Court was delivered by
CHANDRAMAULI KR. PRASAD, J. 1. Plaintiff No. 1 is
the son of plaintiff No. 2, whereas original defendant Nos. 1 and
B B 2 were brother and sister of the second plaintiff. Both the
defendants died during the pendency of the suit. The heirs and
legal representatives of the first defendant were substituted in
his place and they had contested the suit.
C C 2. Plaintiff filed the suit for recovery of possession in
respect of several properties mentioned in schedule of the
plaint and in the present appeal we are concerned with
Schedule I property i.e. four acres of land pertaining to R.S.
No. 44/3 situate at village Vijjeswaram, hereinafter referred to
D D as the land in dispute.
3. According to the plaintiffs their predecessor-in-interest
viz., one Venkata Ramana Rao, who happened to be the father
of plaintiff No. 1 and husband of plaintiff No. 2, was the owner
of land in dispute. Venkata Ramana Rao was a Government
E E employee and in his absence defendant No. 1 i.e. elder brother
of second plaintiff used to look after his property. Said Venkata
Ramana Rao died in the year 1948 and thereafter the plaintiffs
came back to the village and started looking after the
agricultural land including the land in dispute. Plaintiffs case
F F further is that again in the year 1954 they shifted their residence
to Kakinada for education of the first plaintiff and defendant No.
1 was asked to look after the land in dispute. In the year 1974
when the defendant declined to deliver possession of the land
in dispute, lawyers notice dated 6th April, 1974 was issued
G G calling upon the defendants to hand over the property.
Defendant No. 1 responded to the notice by his letter dated 27th
May, 1974 denying the title of the plaintiffs and claiming himself
to be the owner of the property. Plaintiffs thereafter filed the suit
bearing O.S. No. 20 of 1974 in the Court of the Subordinate
H H Judge, West Godavari District, Kovvur for recovery of
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 929
SUBBA RAO [CHANDRAMAULI KR. PRASAD, J.]
possession in respect of land in dispute and for mesne profit.
4. In the written statement filed by defendant No. 1 his plea
was that he purchased the land in dispute under a stamped
agreement from Venkata Ramana Rao for a value of Rs.1600/
-. According to him he paid Rs.1,000/- to Venkata Ramana
Rao and a sum of Rs.225/- to one Bombothu Chitteyya who
was the tenant and in possession of the land in dispute during
1943 and said tenant vide letter dated 16th June, 1943
relinquished his possession and delivered the land to defendant
No. 1. It is further case of defendant No. 1 that balance amount
of Rs.400/- was sent by Money Order. After the death of
Venkata Ramana Rao, the second plaintiff claimed more money
towards the sale of the land in dispute and plaintiff No. 2 being
the sister of defendant No. 1, a further sum of Rs.500/- was paid
to her vide receipt dated 14th January, 1952 (Exh.B-4).
5. Plea of defendant No. 1 further is that on 6th November,
1960 he filed an application before the Assistant Settlement
Officer for correction of rough patta issued in favour of second
plaintiff in 1959 and to substitute his name along with his
brothers name in place of second plaintiff. In the application
defendant No. 1 categorically stated that on 18th February,
1954 the Settlement Officer directed issuance of patta of the
land in dispute along with other lands in their favour and he was
all through waiting for the issuance of patta. However, according
to defendant No. 1, in August, 1959 he came to know that a
rough patta was issued to second plaintiff contrary to the
decision of the Settlement Officer and thereafter he filed an
application on 7th November, 1959 before the Rough Patta
Correction Officer informing him about variance between grant
and the order and prayed that the name of the second plaintiff
be deleted from the patta and in her place his name and that
of his brothers name be substituted. According to defendant
No. 1 he filed reminder on 6th November, 1960 but it was
returned by the Assistant Settlement Officer on 22nd November,
1960 with certain objections. Thereafter the first defendant did
930 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A not present the petition for substituting his name in the patta
by deleting the name of the second plaintiff. Further plea of the
first defendant was that he had perfected his title by adverse
possession.
6. On the basis of the pleadings of the parties the trial
B B
court framed various issues; including the following issues :
1. Whether the father of the 1st plaintiff late Venkata
Ramana Rao died possessed of the plaint schedule
properties?
C C
2.Whether any of the suit properties were entrusted to any
of the defendants in or about the year 1952?
3.Whether sale of item I of the schedule property to 1st
defendant in 1943 is true?
D D
7. It is relevant here to state that no issue of adverse
possession was framed but on the basis of the materials on
record the trial court came to the conclusion that title to the
plaintiffs even if proved, gets extinguished by adverse
E E possession. It further held that defendant No. 1 is in possession
of the suit property and when considered along with other
documents, the same proves his title. The trial court also
observed that the plaintiff having not adduced any oral evidence
or filed any document to show that the property was entrusted
F F to defendant No. 1 for management, it is evident that defendant
No. 1 has title over the land in dispute. The trial court further
held that defendant No. 1 had purchased the land in dispute
and on these findings the trial court dismissed the suit.
8. Plaintiffs, aggrieved by the judgment and decree of the
G G trial court, preferred appeal before the High Court and the
learned Single Judge by his judgment and decree dated
16.09.1987 dismissed the appeal. Plaintiffs thereafter preferred
Letters Patent Appeal No. 438 of 1988 and the Division Bench
of the High Court by its judgment and decree dated 19.12.2001
H H
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 931
SUBBA RAO [CHANDRAMAULI KR. PRASAD, J.]
allowed the appeal; set aside the judgment and decree of the
trial court as well as of the appellate court and decreed the suit.
While doing so the High Court observed as follows :
From the documentary evidence available on record, it
cannot be said that the first defendant has perfected his
B B
title to the property by adverse possession. On the other
hand, he tried to change his version from time to time to
suit his convenience i.e., firstly, in the written statement he
contended that he had purchased the property from late
Venkata Ramana Rao and produced two letters said to
have been written by Venkata Ramana Rao, whose writing C
is not at all tallying, and we have no manner of doubt that
these letters were brought into existence by the first
defendant in support of his case. Secondly, the first
defendant filed an application in year 1964 before the
Settlement Officer contending that himself and his brothers D
are Agraharamdars and are entitled to patta under section
15 of the Estates Abolition Act, but he never disclosed that
he had purchased the land from his brother-in-law. Though
he obtained an order from Assistant Settlement Officer in
the year 1964, no patta was issued to DI till the trial of the E
suit on the other hand even as per his version rough patta
was issued in the name of 2nd plaintiff, but he has not
taken any steps to get it cancelled. Now, he started
contending that he perfected title by adverse possession.
As he himself admitted that initially his possession is F
permissive one as he was not paying any rents and
enjoying the property to himself to exclusion of the land
owners, he cannot contend that he perfected title by
adverse possession; more so in the light of Exs. B-5 and
B-9 wherein both the parties are fighting for patta after G
abolition of the estate. In order to establish that the first
defendant had perfected his title to the property by adverse
possession, it requires more cogent proof, which is not
forthcoming in this case. On the other hand, if we analyse
the documentary evidence available on record, the only H
932 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A conclusion we can arrive at is that taking advantage of the
near relationship between him and the plaintiffs and their
absence from the village, the first defendant tried to create
documents to knock away the property. We have not
discussed the oral evidence for the simple reason that the
documentary evidence itself speaks of the falsehood of the
claim of defendants.
9. Heirs and legal representatives of defendant No. 1,
aggrieved by the same, have preferred this appeal with leave
of the Court.
C
10. Mr. Ananga Bhattacharya, learned counsel appearing
on behalf of the appellants submits that the concurrent findings
of facts of the trial court and the appellate court ought not to
have been upset by the Division Bench in Letters Patent
D appeal. We do not find any substance in the submission of Mr.
Bhattacharya. In fact, while setting aside the judgment and
decree of the trial court and the appellate court the Division
Bench referred to the decision of this Court in the case of Asha
Devi v. Dukhi Sao [AIR 1974 SC 2048: (1974) 2 SCC 492],
E and came to the conclusion that the power of the Division
Bench hearing a Letters Patent appeal under Clause (10) from
the judgment of a single Judge in first appeal is not limited only
to a question of law under Section 100 of the Code of Civil
Procedure, but it has the same power which the Single Judge
F has as a first Appellate Court in respect of both questions of
fact and of law. We are of the opinion that the High Court was
absolutely right in making the aforesaid observation and
accordingly we reject this submission of Mr. Bhattacharya.
11. Mr. Bhattacharya, then submits that the appellants had
G perfected their title by adverse possession and the findings so
recorded by the trial court and the appellate court ought not to
have been interfered in appeal. Mr. Abid Ali Beeran, learned
counsel appearing on behalf of the respondent, however,
submits that the finding recorded by the trial court and the
H appellate court being absolutely illegal, nothing prevented the
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 933
SUBBA RAO [CHANDRAMAULI KR. PRASAD, J.]
Division Bench of the High Court to set aside that finding.
12. We have bestowed our thoughtful consideration to the
submission advanced and we do not find any substance in the
submission of Mr. Bhattacharya. What is adverse possession,
on whom the burden of proof lie, the approach of the court
towards such plea etc. have been the subject matter of
decision in a large number of cases. In the case of T.
Anjanappa v. Somalingappa (2006) 7 SCC 570, it has been
held that mere possession however long does not necessarily
mean that it is adverse to the true owner and the classical
requirement of acquisition of title by adverse possession is that
such possessions are in denial of the true owners title. Relevant
passage of the aforesaid judgment reads as follows :
20. It is well-recognised proposition in law that mere
possession however long does not necessarily mean that
it is adverse to the true owner. Adverse possession really
means the hostile possession which is expressly or
impliedly in denial of title of the true owner and in order to
constitute adverse possession the possession proved
must be adequate in continuity, in publicity and in extent
so as to show that it is adverse to the true owner. The
classical requirements of acquisition of title by adverse
possession are that such possession in denial of the true
owners title must be peaceful, open and continuous. The
possession must be open and hostile enough to be
capable of being known by the parties interested in the
property, though it is not necessary that there should be
evidence of the adverse possessor actually informing the
real owner of the formers hostile action.
13. What facts are required to prove adverse possession
have succinctly been enunciated by this Court in the case of
Karnataka Board of Wakf vs. Government of India and Ors.
(2004) 10 SCC 779. It has also been observed that a person
pleading adverse possession has no equities in his favour and
934 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A since such a person is trying to defeat the rights of the true
owner, it is for him to clearly plead and establish necessary
facts to establish his adverse possession. Paragraph 11 of the
judgment which is relevant for the purpose reads as follows :
11. In the eye of the law, an owner would be deemed to
B B
be in possession of a property so long as there is no
intrusion. Non-use of the property by the owner even for a
long time wont affect his title. But the position will be
altered when another person takes possession of the
property and asserts a right over it. Adverse possession
C C is a hostile possession by clearly asserting hostile title in
denial of the title of the true owner. It is a well-settled
principle that a party claiming adverse possession must
prove that his possession is nec vi, nec clam, nec
precario, that is, peaceful, open and continuous. The
D D possession must be adequate in continuity, in publicity and
in extent to show that their possession is adverse to the
true owner. It must start with a wrongful disposition of the
rightful owner and be actual, visible, exclusive, hostile and
continued over the statutory period. (See S.M. Karim v.
E E Bibi Sakina AIR 1964 SC 1254, Parsinni v. Sukhi (1993)
4 SCC 375 and D.N. Venkatarayappa v. State of
Karnataka (1997) 7 SCC 567) Physical fact of exclusive
possession and the animus possidendi to hold as owner
in exclusion to the actual owner are the most important
F factors that are to be accounted in cases of this nature.
F
Plea of adverse possession is not a pure question of law
but a blended one of fact and law. Therefore, a person who
claims adverse possession should show: (a) on what date
he came into possession, (b) what was the nature of his
G G possession, (c) whether the factum of possession was
known to the other party, (d) how long his possession has
continued, and (e) his possession was open and
undisturbed. A person pleading adverse possession has
no equities in his favour. Since he is trying to defeat the
H rights of the true owner, it is for him to clearly plead and
H
 CHATTI KONATI RAO & ORS. v. PALLE VENKATA 935
SUBBA RAO [CHANDRAMAULI KR. PRASAD, J.]
establish all facts necessary to establish his adverse
possession. [Mahesh Chand Sharma (Dr.) v. Raj Kumari
Sharma (1996) 8 SCC 128]
14. In view of the several authorities of this Court, few
whereof have been referred above, what can safely be said
that mere possession however long does not necessarily mean
that it is adverse to the true owner. It means hostile possession
which is expressly or impliedly in denial of the title of the true
owner and in order to constitute adverse possession the
possession must be adequate in continuity, in publicity and in
extent so as to show that it is adverse to the true owner. The
possession must be open and hostile enough so that it is known
by the parties interested in the property. The plaintiff is bound
to prove his title as also possession within 12 years and once
the plaintiff proves his title, the burden shifts on the defendant
to establish that he has perfected his title by adverse
possession. Claim by adverse possession has two basic
elements i.e. the possession of the defendant should be
adverse to the plaintiff and the defendant must continue to
remain in possession for a period of 12 years thereafter.
Animus possidendi as is well known a requisite ingredient of
adverse possession. Mere possession does not ripen into
possessory title until possessor holds property adverse to the
title of the true owner for the said purpose. The person who
claims adverse possession is required to establish the date on
which he came in possession, nature of possession, the factum
of possession, knowledge to the true owner, duration of
possession and possession was open and undisturbed. A
person pleading adverse possession has no equities in his
favour as he is trying to defeat the rights of the true owner and,
hence, it is for him to clearly plead and establish all facts
necessary to establish adverse possession. The courts always
take unkind view towards statutes of limitation overriding
property rights. Plea of adverse possession is not a pure
question of law but a blended one of fact and law.
936 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A 15. Bearing in mind the principles aforesaid when we
proceed to consider the facts of this case, we find that
appellants have miserably failed to prove that they have
perfected their title by adverse possession. It is worth
mentioning here that initial plea of the appellant was that they
had purchased the property from the original owner, alternatively
B B
by virtue of agreement to sale they came in possession of the
property. Both these pleas have not been substantiated. Neither
the purported sale deed nor agreement to sale have been
placed on record. As regards the plea of adverse possession,
appellants case is that out of the consideration money of
C C
Rs.1,600/-, Rs.1,000/- was paid to the real owner and on
payment of Rs. 225/- to the tenant in possession namely
Bombothu Chitteyya, he relinquished his possession. This
relinquishment of possession by the tenant shall not enure to
the benefit of the appellants against the true owner so as to
D D
accept their claim for adverse possession. Appellants are
required to prove that their possession was adverse to the true
owner. The plea of the appellants on the basis of the purported
order dated 18th February, 1954 of the Settlement Officer
directing for issuance of Patta in their favour also does not
E E advance their case. It is not the appellants case that plaintiffs
were party before the Settlement Officer. Further, it is not in
dispute that no Patta was issued in favour of the appellants and
in fact rough Patta was issued in favour of the second plaintiff.
Thus, the appellants have not proved the necessary ingredients
F F to establish their title by adverse possession. In our opinion,
the Division Bench is absolutely right in rejecting the appellants
plea of adverse possession and decreeing the plaintiffs suit,
after setting aside the judgment and decree of the trial and the
appellate Court.
G G
16. In the result, we do not find any merit in the appeal and
it is dismissed with cost throughout to be paid by the appellants
to the respondent. Lawyers fee quantified at Rs.25,000/-.
R.P. Appeal dismissed.
H H
 [2010] 15 (ADDL.) S.C.R. 937
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI
v.
M/S. M. AMBALAL & CO.
(Civil Appeal No. 8235 of 2003)
DECEMBER 09, 2010
[D.K. JAIN AND H.L. DATTU, JJ.]
Customs Act, 1962 ss.2(25) r/w s.11, 111 and 112 and
s.25 Exemption notification issued by Central Government,
in exercise of its power under s.25(1), exempting certain
articles when imported into India from payment of duty
Interpretation of Meaning of the term imported goods in the
exemption notification Plea of respondent that by virtue of
the said Notification, rough diamonds were exempted from
payment of duty under the Act and, therefore, adjudicating
authority was not justified in directing the respondent for
payment of duty under the Act for release of the confiscated
goods (rough diamonds) Tribunal allowed the respondents
appeal by extending the benefit of exemption notification to
it On appeal, held: The notification has to be read as a whole
If any of the conditions laid down in the notification is not
fulfilled, the party is not entitled to the benefit of that notification
The goods seized in this case cannot be imported into India
without a licence under the Import Control Act It is not the
case of the respondent-firm that the goods were imported with
a valid licence Goods so imported cannot therefore, be
treated to be lawfully imported goods within the definition of
that term in s.2(25) Therefore, the respondent was not
entitled to the benefit of the notification Smuggled goods
will not come within the definition of imported goods for the
purpose of exemption notification, for the reason, the Act
defines both the expressions looking at the different definitions
given to the two classes of goods: imported and smuggled,
and if the two were to be treated as the same, then there would
937
938 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A be no need to have two different definitions It would be
contrary to the purpose of exemption notifications to accord
the benefit meant for imported goods on smuggled goods
Notification No.247-Cus. dated 02-08-1976.
Notification Exemption Notification Interpretation of
B B
Held: The rule regarding exemptions is that exemptions
should generally be strictly interpreted but beneficial
exemptions having their purpose as encouragement or
promotion of certain activities should be liberally interpreted
General rule is strict interpretation while special rule in the
C C case of beneficial and promotional exemption is liberal
interpretation.
Customs Act, 1962 Object of Discussed.
D D Words and Phrases dutiable goods, duty, import,
imported goods, importer and smuggling Meaning of
Customs Act, 1962.
In a search and seizure in the office premises of the
respondent-firm conducted by the officers of Customs
E E Department, large quantity of rough diamonds was
recovered. The partner of the respondent-firm was
neither able to offer any satisfactory explanation nor
produce any documents in relation to the import of the
said diamonds, and the diamonds were seized by the
F F officers. After investigation, a Show Cause Notice was
issued to the respondent and others wherein confiscation
of the seized diamonds was proposed. The adjudicating
authority passed an order confiscating the seized
diamonds under Section 111(d) of the Customs Act, 1962.
G G However, an option was given to the respondent to
redeem the seized goods on payment of redemption fine.
The respondent was also asked to pay the appropriate
duty on the said confiscated diamonds which were
allowed to be released on payment of redemption fine. In
H H
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 939
M/S. M. AMBALAL & CO.
addition, penalty was also imposed on the respondent
under Section 112 of the Act.
Aggrieved, the respondent preferred an appeal
before the Tribunal. The Tribunal confirmed the
redemption fine of Rs.60,00,000/- (Rupees Sixty Lakhs
only) and the penalty of Rs. 25,00,000/- (Rupees Twenty
Five Lakhs only) on the respondent. The respondent
thereafter filed a Writ Petition before the High Court but
later withdrew the same to avail benefit under the Kar
Vivad Samadhan Scheme, 1998 (KVS Scheme). Pursuant
to the order passed under the KVS Scheme by the
designated authority, the respondent was directed to pay
an amount of Rs.42,50,000/- (Rupees Forty Two Lakhs
and Fifty Thousand only) towards redemption fine and
penalty and the designated authority also gave liberty to
the respondent to redeem the goods on payment of duty
at the appropriate rate.
The respondent thereafter requested the appellants
for release of diamonds by placing reliance on the
Notification No.247/76-Cus dated 02.08.1976. This
request was turned down by the department and the
respondent was informed that the seized diamonds
would be released only after payment of duty.
Respondent thereafter preferred a Writ Petition. The Writ
Petition was dismissed by the High Court, wherein it was
specifically observed that the petitioner imported
diamonds of foreign origin without a valid licence. This
order was questioned before this Court in S.L.P. This
Court, while dismissing the SLP, directed the Additional
Collector of Customs (Preventive), Mumbai or other
appropriate Assessing Officer to decide the amount of
duty payable under the Customs Act in respect of seized
goods.
The Commissioner of Customs quantified the duty
940 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A payable by the respondent for an amount of
Rs.2,20,50,125/- (Rupees Two Crores Twenty Lakhs Fifty
Thousand One Hundred and Twenty Five only) before
redemption of the confiscated diamonds. Aggrieved, the
respondent filed appeal before the Tribunal which allowed
the same holding that exemption would be available to
B B
the goods imported by the respondent in the light of the
Notification No.247/76-Cus dated 02.08.1976.
The primary issue that arose for consideration in the
instant appeal was whether the benefit of the exemption
C C notification was rightly granted to the respondent-firm by
the Tribunal.
Disposing of the appeal, the Court
D D HELD: 1. The Customs Act, 1962 is an Act to
consolidate and amend the law relating to Customs. The
object of the Act is to regulate the import and export of
goods, into and from the shores of India, or otherwise,
and determine the customs duty payable. It also attempts
to fill the lacunae of the previous customs legislations,
E E
viz., the Sea Customs Act and the Land Customs Act. It
also aims to counter the difficulties that have emerged
over the years due to the changing economic and
financial conditions; amongst them it proposes to tackle
the increasing problems of smuggling both in and out of
F F the country. The Act aims to sternly and expeditiously
deal with smuggled goods, and curb the dents on the
revenue thus caused. In order to deal with the menace
of smuggling, the authorities are enabled to detect,
conduct search and seizure, and if necessary, confiscate
G G such smuggled goods, within the territory of India. [Para
5] [949-B-D]
2.1. Dutiable goods are goods whose import is
permitted by the Act or any other law in force. Duty is the
H H tax leviable on the goods occasioned by their import into
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 941
M/S. M. AMBALAL & CO.
India or their export out of India. The dutiability of the
goods is covered by Section 12 of the Act which is the
charging section. Under this Section, all goods imported
into or exported from India are liable to Customs duty
unless the Customs Act itself or any other law for the time
being in force provides otherwise. The rate of duty is fixed
by the Customs Tariff Act, 1975. Import and Imported
Goods means that if goods are brought into India,
meaning thereby into the territory of India from outside,
there is import of goods and the goods become imported
goods and become chargeable to duty upto the moment
they are cleared for home consumption. The word
importer has been defined in the Act as importer in
relation to any goods at any time between their
importation and the time when they are cleared for home
consumption includes any owner or any person who
holding himself out to be importer. The word smuggling,
in relation to goods, means any act or omission which
will render such goods liable to confiscation under
Section 111 or Section 113 of the Act. [Para 7] [950-C-F]
2.2. Section 11 of the Act enables the Central
Government to prohibit importation or exportation of
goods either absolutely or subject to conditions as
specified in the notification, the import or export of the
goods of any specified description. Section 11A to 11G
speaks of detention of illegally imported goods and
prevention of the disposal thereof. Section 12 of the Act
is the charging Section. Under this Section, the duty is
leviable on all imported goods. Valuation of the imported
goods is done as provided under Section 14 of the Act.
Section 25 of the Act empowers the Central Government
to issue notifications exempting generally either
absolutely or subject to such conditions as specified in
the notification, goods of any specified description from
the whole or any part of the Customs Act leviable thereon.
The definition of imported goods has to be read along
942 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A with Section 111 of the Act which deals with goods
brought from place outside India. Section 111 of the Act
provides for confiscation of goods and conveyances and
imposition of penalties. Section 111(d) of the Act provides
that any goods which are imported or attempted to be
B B imported or are brought within Indian Custom Waters for
the purpose of being imported, contrary to any
prohibition imposed by or under this Act or any other law
for the time being in force, shall be liable for confiscation.
Section 112 of the Act provides for penalties for improper
C C importation of goods. [Para 8] [950-G-H; 951-A-C]
3.1. The Central Government, in exercise of its power
under Section 25(1) of the Act, has issued Notification
No.247-Cus. dated 02-08-1976 exempting certain articles
from payment of duty. It is settled law that the notification
D D has to be read as a whole. If any of the conditions laid
down in the notification is not fulfilled, the party is not
entitled to the benefit of that notification. The rule
regarding exemptions is that exemptions should
generally be strictly interpreted but beneficial exemptions
E E having their purpose as encouragement or promotion of
certain activities should be liberally interpreted. This
composite rule is not stated in any particular judgment
in so many words. In fact, majority of judgements
emphasize that exemptions are to be strictly interpreted
F F while some of them insist that exemptions in fiscal
Statutes are to be liberally interpreted giving an apparent
impression that they are contradictory to each other. But
this is only apparent. A close scrutiny will reveal that
there is no real contradiction amongst the judgements at
G G all. The synthesis of the views is quite clearly that the
general rule is strict interpretation while special rule in the
case of beneficial and promotional exemption is liberal
interpretation. The two go very well with each other
because they relate to two different sets of
H H circumstances. [Paras 9, 10] [951-D; 952-D-G]
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 943
M/S. M. AMBALAL & CO.
3.2. The notification issued by the Central
Government in exercise of the powers conferred by
Section 25(1) of the Act exempts the articles enumerated
in the table annexed when imported into India from
payment of duty under the Act. The language used in the
notification is plain and unambiguous. Therefore, the
same is required to be considered in their ordinary sense.
A construction which permits one to take advantage of
ones own wrong or to impair ones own objections under
a Statute should be disregarded. The interpretation
should as far as possible be beneficial in the sense that
it should suppress the mischief and advance the remedy
without doing violence to the language. [Para 11] [952-
H; 953-A-B]
3.3. From the wording of the above exemption
notification, it is clear that the benefit of the exemption
envisaged is for those goods that are imported.
According to Section 2(25) imported goods has been
defined to mean any goods brought into India from a
place outside India but does not include goods which have
been cleared for home consumption. It is necessary that
the above definition is read along with Section 11, Section
111 and Section 112 of the Act, which provide for
detection of illegally imported goods and prevention of
the disposal thereof, confiscation of the goods and
conveyances and imposition of penalties respectively.
Under Section 111(d) of the Act, any goods which are
imported contrary to any prohibition imposed by or under
this Act or any other law for the time being in force shall
be liable for confiscation. The goods which have been
seized in this case cannot be imported into India without
a licence under the Import Control Act and there is,
therefore, a prohibition in law for the import of goods
except in compliance with the Import Control Act. It is not
the case of the respondent-firm that the goods were
imported with a valid licence and, therefore any import of
944 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A goods of which importation is prohibited by law, cannot
be valid import under the Act. Goods so imported cannot
therefore, be treated to be lawfully imported goods
within the definition of that term in Section 2(25) of the
Act. Therefore, the respondent was not entitled to the
B B benefit of the notification. There is no merit in the
contention raised by the respondent that by virtue of the
Notification No.247-Cus dated 02.08.1976, rough
diamonds are exempted from payment of duty under the
Act and, therefore, adjudicating authority was not justified
C C in directing the respondent for payment of duty under
the Act for release of the confiscated goods. The goods
become exempted goods provided all the conditions of
the notification are fulfilled. If any condition of the
notification is not fulfilled, goods are not exempted
goods. [Para 12] [953-C-H; 954-A-B]
D D
Union of India v. Ganesh Metal Processors Industries
2003 (151) ELT 21 relied on.
4. Smuggled goods will not come within the
E E definition of imported goods for the purpose of the
exemption notification, for the reason, the Act defines
both the expressions looking at the different definitions
given to the two classes of goods: imported and
smuggled, and if the two were to be treated as the same,
F F then there would be no need to have two different
definitions. [Para 13] [954-D]
5. In order to understand the true meaning of the
term imported goods in the exemption notification, the
entire scheme of the Act requires to be taken note of.
G G Imported goods for the purpose of this Act is explained
by a conjoint reading of Section 2(25), Section 11,
Section 111 and Section 112. Reading these Sections
together, it can be found that one of the primary
purposes for prohibition of import referred to the latter is
H H the prevention of smuggling [See section 11(2)(c)].
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 945
M/S. M. AMBALAL & CO.
Further, in the light of the objects of the Act and its basic
skeletal framework, it is clear that one of the principal
functions of the Act is to curb the ills of smuggling on the
economy. In the light of these findings, it would be
antithetic to consider that smuggled goods could be
read within the definition of imported goods for the
purpose of the Act. In the same light, it would be contrary
to the purpose of exemption notifications to accord the
benefit meant for imported goods on smuggled goods.
[Para 14] [954-E-H; 955-A]
Associated Cement Companies v. Commissioner of
Customs 2001 (128) ELT 21 (SC) distinguished.
6. Two other issues which were argued by the
respondent and the revenue before the Tribunal were not
answered since the Tribunal allowed the assessees
appeal by extending the benefit of the exemption
notification to the respondent-firm. These issues now
require to be considered by the Tribunal. Accordingly,
while setting aside the order passed by the Tribunal, the
matter is remanded to the Tribunal to consider those
issues after affording personal hearing to both the
parties. [Para 16] [955-H; 956-A]
Case Law Reference
2003 (151) ELT 21 relied on Para 12
2001 (128) ELT 21 (SC) distinguished Para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8235 of 2003.
From the Judgment & Order dated 23.6.2003 of the
Customs, Excise and Gold (Control) Appellate Tribunal, West
Zonal Bench at Mumbai in Appeal No. C/138/03.
R.P. Bhatt, Arijit Prasad, H.R. Rao, P. Parmeswaran for
the Appellant.
946 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Dr. Surat Singh, Pratibha Chopra, Ashok K. Mahajan for
the Respondent.
The Judgment of the Court was delivered by
H.L. DATTU, J. 1. This appeal is by the Revenue against
B B the Order passed by the Customs, Excise and Gold (Control)
Appellate Tribunal, West Zonal Branch at Mumbai [hereinafter
referred to as Tribunal] in Appeal No.C/138/03 Mum dated
23.06.2003. By the impugned order, the Tribunal has allowed
the appeal filed by the respondent and has set aside the original
C C order passed by the adjudicating authority, wherein it had
directed the respondent to pay a sum of Rs. 2,20,50,125/-
(Rupees Two Crores Twenty Lakhs Fifty Thousand One
Hundred & Twenty Five only) by way of duty under the
provisions of The Customs Act, 1962 (hereinafter referred to
D D as, the Act) for release of the goods seized from the
possession of the respondent.
2. The factual matrix in brief is as follows:
In a search and seizure in the office premises of the
E E respondent-firm conducted by the officers of Customs
Department, on the basis of specific information, a large
quantity of rough diamonds was recovered. The partner of the
respondent-firm, Shri Maganbhai Patel was neither able to offer
any satisfactory explanation nor produce any documents in
F F relation to the import of the said diamonds, and the diamonds
were seized by the officers in the reasonable belief that they
are liable for confiscation under the provisions of the Act. After
investigation, a Show Cause Notice was issued to the
respondent and others wherein confiscation of the seized
G G diamonds was proposed. After adjudication, the adjudicating
authority passed an order confiscating the seized diamonds
under Section 111(d) of the Act. However, an option was given
to the respondent to redeem the seized goods on payment of
redemption fine. The respondent was also asked to pay the
H H
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 947
M/S. M. AMBALAL & CO. [H.L. DATTU, J.]
appropriate duty on the said confiscated diamonds which were
allowed to be released on payment of redemption fine. In
addition, penalty was also imposed on the respondent under
Section 112 of the Act. Being aggrieved by the aforesaid order,
the respondent had preferred an appeal before the Tribunal. The
Tribunal, by its order dated 29.12.1995, disposed of the appeal
and confirmed the redemption fine of Rs. 60,00,000/- (Rupees
Sixty Lakhs only) and the penalty of Rs. 25,00,000/- (Rupees
Twenty Five Lakhs only) on the respondent herein. The
respondent thereafter filed a Writ Petition before the Bombay
High Court and the same was withdrawn to avail the benefit
under Kar Vivad Samadhan Scheme, 1998 (in short, KVS
Scheme). Pursuant to the order passed under the KVS
Scheme by the designated authority, the respondent was
directed to pay an amount of Rs. 42,50,000/- (Rupees Forty
Two Lakhs and Fifty Thousand only) towards redemption fine
and penalty and the designated authority also gave liberty to
the respondent to redeem the goods on payment of duty at the
appropriate rate. The respondent thereafter requested the
appellants for release of diamonds by placing reliance on the
Notification No.247/76-Cus dated 02.08.1976. This request
was turned down by the department and the respondent was
informed that the seized diamonds would be released only after
payment of duty in the light of the order (original) dated
03.12.1992. Respondent thereafter preferred a Writ Petition
No.1976 of 2000 before the Bombay High Court. The said Writ
Petition was dismissed by the High Court, wherein it was
specifically observed that the petitioner imported diamonds of
foreign origin without a valid licence. This order was
questioned before this Court in S.L.P.(C) No.1495 of 2000.
This Court, by its order dated 06.09.2002, while dismissing the
Special Leave Petition, directed the Additional Collector of
Customs (Preventive), Mumbai or other appropriate Assessing
Officer to decide the amount of duty payable under the Customs
Act in respect of seized goods. The Commissioner of Customs
vide order in Original No.CCP/KPM/ADJN/M&P/27/2002,
quantified the duty payable by the respondent for an amount of
948 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A Rs. 2,20,50,125/- (Rupees Two Crores Twenty Lakhs Fifty
Thousand One Hundred and Twenty Five only) before
redemption of the confiscated diamonds. Being aggrieved by
the same, the respondent herein filed appeal before the Tribunal
and the Tribunal, by its order dated 23.06.2003, allowed the
B B appeal and held that the exemption would be available to the
goods imported by the respondent in the light of the Notification
No.247/76-Cus dated 02.08.1976. It is this order which is the
subject matter in this appeal filed by the Revenue under
Section 130E(b) of the Act.
C C
3. Shri R.P. Bhatt, learned senior counsel appearing for
the Revenue, submitted that the benefit of the exemption
notification cannot be extended to a person who/which had
illegally imported rough diamonds into the country. He further
argued that the same could not be availed by those persons
D D who did not have the licence to import diamonds, or who had
smuggled rough diamonds into the country clandestinely without
payment of duty. Per contra, Dr. Surat Singh, learned counsel
for the respondent-firm, would contend that there is no infirmity
in the order passed by Tribunal since the Tribunal, by placing
E E reliance on the principles laid down by this Court, has granted
relief to the respondent-firm.
4. The three issues that falls for our consideration and
decision are :-
F F (a) Whether the benefit of the exemption notification has
been rightly granted to the respondent-firm by the Tribunal.
(b) Whether the declaration made under the KVS Scheme
and the subsequent payment of amount quantified under
G G the said Scheme by the respondent-firm vis--vis the
release of the diamonds that were confiscated by the
department.
(c) Whether the Baggage Rules were correctly applied by
H H
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 949
M/S. M. AMBALAL & CO. [H.L. DATTU, J.]
the Commissioner of Customs, while deciding the duty
payable by the respondent-firm.
5. The Customs Act, 1962 is an Act to consolidate and
amend the law relating to Customs. The object of the Act is to
regulate the import and export of goods, into and from the
shores of India, or otherwise, and determine the customs duty
payable. It also attempts to fill the lacunae of the previous
customs legislations, viz., the Sea Customs Act and the Land
Customs Act. It also aims to counter the difficulties that have
emerged over the years due to the changing economic and
financial conditions; amongst them it proposes to tackle the
increasing problems of smuggling both in and out of the country.
The Act aims to sternly and expeditiously deal with smuggled
goods, and curb the dents on the revenue thus caused. In order
to deal with the menace of smuggling, the authorities are
enabled to detect, conduct search and seizure, and if
necessary, confiscate such smuggled goods, within the territory
of India.
6. We may now briefly notice the scheme of the Act. The
expression dutiable goods, duty, import, imported goods, E E consumption. The word importer has been defined in the Act
importer and smuggling are defined in the following manner
:-
Dutiable Goods means any goods which are chargeable
to duty and on which duty has not been paid.
Duty means a duty of Customs and leviable under
this Act.
Import, with its grammatical variations and cognate
expressions, bring into India from a place outside India.
Imported goods means any goods brought into
India from a place outside India but does not include goods
which have been cleared for home consumption.
Importer means in relation to any goods at any time
950 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A between their importation and the time when they are
cleared for home consumption, includes any owner or any
person holding himself out to be the importer.
Smuggling, in relation to any goods, means any act
or omission which will render such goods liable to
B B
confiscation under Section 111 or Section 113 of the Act.
7. Dutiable goods are goods whose import is permitted
by the Act or any other law in force. Duty is the tax leviable on
the goods occasioned by their import into India or their export
C C out of India. The dutiability of the goods is covered by Section
12 of the Act which is the charging section. Under this Section,
all goods imported into or exported from India are liable to
Customs duty unless the Customs Act itself or any other law
for the time being in force provides otherwise. The rate of duty
D D is fixed by the Customs Tariff Act, 1975. Import and Imported
Goods means that if goods are brought into India, meaning
thereby into the territory of India from outside, there is import
of goods and the goods become imported goods and become
chargeable to duty upto the moment they are cleared for home
as importer in relation to any goods at any time between their
importation and the time when they are cleared for home
consumption includes any owner or any person who holding
himself out to be importer. The word smuggling, in relation to
F F goods, means any act or omission which will render such goods
liable to confiscation under Section 111 or Section 113 of the
Act.
8. Section 11 of the Act enables the Central Government
to prohibit importation or exportation of goods either absolutely
G G or subject to conditions as specified in the notification, the
import or export of the goods of any specified description.
Section 11A to 11G speaks of detention of illegally imported
goods and prevention of the disposal thereof. Section 12 of the
Act is the charging Section. Under this Section, the duty is
H H leviable on all imported goods. Valuation of the imported goods
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 951 952 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
M/S. M. AMBALAL & CO. [H.L. DATTU, J.]
is done as provided under Section 14 of the Act. Section 25 A A
TABLE
of the Act empowers the Central Government to issue
notifications exempting generally either absolutely or subject to
Sl. No Description of article Rate of
such conditions as specified in the notification, goods of any
duty
specified description from the whole or any part of the Customs
Act leviable thereon. The definition of imported goods has to B B (1) (2) (3)
be read along with Section 111 of the Act which deals with
goods brought from place outside India. Section 111 of the Act 1. Raw pearls, other than cultured Nil
provides for confiscation of goods and conveyances and
pearls
imposition of penalties. Section 111(d) of the Act provides that
any goods which are imported or attempted to be imported or C C 2. Rubies, emeralds and sapphires, Nil
are brought within Indian Custom Waters for the purpose of unset and imported uncut
being imported, contrary to any prohibition imposed by or under
this Act or any other law for the time being in force, shall be 3. Rough diamonds Nil
liable for confiscation. Section 112 of the Act provides for
penalties for improper importation of goods. 10. It is settled law that the notification has to be read as
D D
9. The Central Government, in exercise of its power under a whole. If any of the conditions laid down in the notification is
not fulfilled, the party is not entitled to the benefit of that
Section 25(1) of the Act, has issued Notification No.247-Cus.
notification. The rule regarding exemptions is that exemptions
dated 02-08-1976 exempting certain articles from payment of
should generally be strictly interpreted but beneficial exemptions
duty. For better understanding the lis between the parties, the
E having their purpose as encouragement or promotion of certain
notification is extracted. It reads as under :- E
activities should be liberally interpreted. This composite rule is
Exemption to raw pearls, rubies, emeralds and not stated in any particular judgment in so many words. In fact,
sapphires, rough diamonds, etc. In exercise of the majority of judgements emphasize that exemptions are to be
powers conferred by sub-section (1) of section 25 of the strictly interpreted while some of them insist that exemptions
Customs Act, 1962 (52 of 1962), the Central Government, in fiscal Statutes are to be liberally interpreted giving an
F F apparent impression that they are contradictory to each other.
being satisfied that it is necessary in the public interest so
But this is only apparent. A close scrutiny will reveal that there
to do, hereby exempts each of the articles specified in
is no real contradiction amongst the judgements at all. The
column (2) of the Table annexed hereto and falling within
synthesis of the views is quite clearly that the general rule is
Chapter 71 of the First Schedule to the Customs Tariff Act,
strict interpretation while special rule in the case of beneficial
1975 (51 of 1975) when imported into India from the
G G and promotional exemption is liberal interpretation. The two go
payment of so much of the duty which is specified in the
very well with each other because they relate to two different
said First Schedule, as is in excess of the rate of duty
sets of circumstances.
mentioned in the1 corresponding entry in column (3) of the
said Table. 11. The notification issued by the Central Government in
exercise of the powers conferred by Section 25(1) of the Act
H H exempts the articles enumerated in the table annexed when
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 953
M/S. M. AMBALAL & CO. [H.L. DATTU, J.]
imported into India from payment of duty under the Act. The
language used in the notification is plain and unambiguous.
Therefore, we are required to consider the same in their
ordinary sense. A construction which permits one to take
advantage of ones own wrong or to impair ones own
objections under a Statute should be disregarded. The
interpretation should as far as possible be beneficial in the
sense that it should suppress the mischief and advance the
remedy without doing violence to the language.
12. From the wording of the above exemption notification,
it is clear that the benefit of the exemption envisaged is for C
those goods that are imported. According to Section 2(25)
imported goods has been defined to mean any goods
brought into India from a place outside India but does not
include goods which have been cleared for home
consumption. It is necessary that the above definition is read D
along with Section 11, Section 111 and Section 112 of the Act,
which provide for detection of illegally imported goods and
prevention of the disposal thereof, confiscation of the goods and
conveyances and imposition of penalties respectively. Under
Section 111(d) of the Act, any goods which are imported E
contrary to any prohibition imposed by or under this Act or any
other law for the time being in force shall be liable for
confiscation. The goods which have been seized in this case
cannot be imported into India without a licence under the Import
Control Act and there is, therefore, a prohibition in law for the F
import of goods except in compliance with the Import Control
Act. It is not the case of the respondent-firm that the goods were
imported with a valid licence and, therefore any import of goods
of which importation is prohibited by law, cannot be valid import
under the Act. Goods so imported cannot therefore, be treated G
to be lawfully imported goods within the definition of that term
in Section 2(25) of the Act. Therefore, the respondent was not
entitled to the benefit of the notification. The learned counsel
for the respondent would contend that by virtue of the
Notification No.247-Cus dated 02.08.1976, rough diamonds
954 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A A are exempted from payment of duty under the Act and,
therefore, adjudicating authority was not justified in directing the
respondent for payment of duty under the Act for release of the
confiscated goods. We find no merit in the contention. The
goods become exempted goods provided all the conditions of
B B the notification are fulfilled. If any condition of the notification is
not fulfilled, goods are not exempted goods. [See Union of India
Vs. Ganesh Metal Processors Industries 2003 (151) ELT 21]
13. In short, question before us is whether goods that are
smuggled into the country can be read within the meaning of
C the expression imported goods for the purpose of benefit of
the exemption notification. We are of the view that smuggled
goods will not come within the definition of imported goods
for the purpose of the exemption notification, for the reason, the
Act defines both the expressions looking at the different
D definitions given to the two classes of goods: imported and
smuggled, and we are of the view that if the two were to be
treated as the same, then there would be no need to have two
different definitions.
E 14. In order to understand the true meaning of the term
imported goods in the exemption notification, the entire
scheme of the Act requires to be taken note of. As noted above,
imported goods for the purpose of this Act is explained by a
conjoint reading of Section 2(25), Section 11, Section 111 and
Section 112. Reading these Sections together, it can be found
F
that one of the primary purposes for prohibition of import
referred to the latter is the prevention of smuggling [See section
11(2)(c)]. Further, in the light of the objects of the Act and the
basic skeletal framework that has been enumerated above, it
is clear that one of the principal functions of the Act is to curb
G
the ills of smuggling on the economy. In the light of these
findings, it would be antithetic to consider that smuggled
goods could be read within the definition of imported goods
for the purpose of the Act. In the same light, it would be contrary
H H
COMMNR. OF CUSTOMS (PREVENTIVE) MUMBAI v. 955 956 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
M/S. M. AMBALAL & CO. [H.L. DATTU, J.]
to the purpose of exemption notifications to accord the benefit A A respondent-firm. We are of the view that these issues now
meant for imported goods on smuggled goods. require to be considered by the Tribunal. Accordingly, while
setting aside the order passed by the Tribunal, we remand the
15. The Tribunal has relied on the decision of this Court in matter to the Tribunal to consider those issues after affording
the case of Associated Cement Companies v. Commissioner personal hearing to both the parties. The appeal is disposed
of Customs, [2001 (128) ELT 21 (SC)] to extend the benefit of of accordingly. No order as to costs.
B B
the exemption notification on the respondent-firm, despite the
fact that the goods that were in question were not smuggled B.B.B. Appeal disposed of.
goods. In the case of Associated Cement Companies Ltd.
(supra), the question that fell for consideration was whether
customs duty was leviable on technical material supplied in the
form of drawings, manuals and computer disc. etc. The further C
question was that if customs duty was leviable, how it was to
be valued. While answering the issue, this Court has observed
that Section 12 of the Act provides that the duties of customs
shall be levied at such rates as may be specified under the
Customs Tariff Act. When the Customs Tariff Act itself provides D
that the import of drawings and designs under Heading
No.49.06 is free, it must follow that these drawings and
designs, though goods were not chargeable to duty. In our
considered view, this decision would not assist the respondent
herein. In the present case, as we have already stated that the E
notification exempts certain articles when imported into India
from payment of duty under the Act. The import must be valid
and in accordance with the provisions of the Act. In the present
case, it is the finding of the Bombay High Court that the
respondent-firm had imported diamonds of foreign origin F
without a valid licence and that finding has become final.
Therefore, we agree with the learned senior counsel Sri R.P.
Bhatt on this aspect. The Tribunal, in our view, erred in holding
that the situation was covered by the case of Associated
Cements Company (supra.) decided by this Court. G
16. The other two issues which were argued by the
respondent and the revenue before the Tribunal and same was
not answered since the Tribunal allowed the assessees appeal
by extending the benefit of the exemption notification to the
H