All major religious traditions carry basically the same message, that is love, compassion and forgiveness the important thing is they should be part of our daily lives.
Dalai Lama
Thursday, February 16, 2012
Quotations: Swami Vivekanand
The essence of Vedanta is that there is but one Being and that every soul is that Being in full, not a part of that Being.
The essential thing in religion is making the heart pure; the Kingdom of Heaven is within us, but only the pure in heart can see the King. While we think of the world, it is only the world for us; but let us come to it with the feeling that the world is God, and we shall have God: Swami Vivekanand
The essential thing in religion is making the heart pure; the Kingdom of Heaven is within us, but only the pure in heart can see the King. While we think of the world, it is only the world for us; but let us come to it with the feeling that the world is God, and we shall have God: Swami Vivekanand
Quotations: Swami Vivekanand
All knowledge that the world has ever received comes from the mind; the infinite library of the universe is in our own mind: Swami Vivekanand
Quotations: Swami Vivekanand
"Seek ye first the kingdom of God, and everything shall be added unto you." This is the one great duty, this is renunciation. Live for an ideal, and leave no place in the mind for anything else. Let us put forth all our energies to acquire that which never fails--our spiritual perfection. If we have true yearning for realization, we must struggle, and through struggle growth will come. We shall make mistakes, but they may be angels unawares : Swami Vivekanand
Supreme Court of India: Indian Stamp Act 1899
SUPREME COURT OF INDIA
Hon'ble Mr. Justice P. Sathasivam and Hon'ble Mr. Justice J. Chelameswar
State of U.P. & Others Appellant(s)
versus
Ambrish Tandon & Another Respondent(s)
Civil Appeal No(s). 735 of 2012
Date of Decision: 20 January 2012
JUDGEMENT
P. Sathasivam, J. :- Leave granted.
2) This appeal is filed against the final judgment and order dated 25.01.2007 passed by the Division Bench of the High Court of Judicature at Allahabad in Writ Petition No. 732 (M/B) of 2005 whereby the Division Bench while allowing the petition filed by the respondents herein issued a writ in the nature of certiorari quashing the impugned order dated 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005.
3) Brief Facts:
a) A Sale Deed dated 16.04.2003 was executed between Har Charan Singh and the respondents herein in respect of the property situated at 17/1 Ashok Marg, Lucknow measuring 11,029 sq. ft. and registered as Sale Deed Document No. 5341 of 2003. The total value of the property was computed as Rs. 1,55,28,860/- for the purposes of Stamp Duty and the respondents herein paid Rs. 15,53,000/- as stamp duty.
b) The District Magistrate, Lucknow made a spot inspection of the property in question on 21.07.2003. During inspection, the land has been found having an area of 12,099 sq. ft. with a two storey building having an area of 5,646.3 sq. ft. at ground floor and an area of 5192.3 sq. ft. at the first floor. In the inspection report, the property in question has been valued for Rs. 3,87,74,097/- and the stamp duty on the said property has been calculated by the competent authority as Rs. 38,78,000/-. However, at the time of purchase, respondents herein paid Rs. 15,53,000/- as Stamp duty, hence a deficiency of Rs. 23,50,000/- has been pointed out by the authorities. The District Magistrate, vide report dated 26.07.2003, directed to register a case against the respondents herein
c) On the basis of the aforesaid report, Case No. 653 Stamp-2003 under Sections 47A/33 of the Indian Stamp Act, 1899 (in short `the Act') was registered. Vide order dated 27.09.2004, the Additional Collector (Finance & Revenue) Lucknow directed the respondents to make good the deficiency in the stamp duty and also imposed a penalty amounting to Rs. 8,46,000/- for such tax evasion. On 20.01.2005, for failure to deposit the aforesaid amount, a demand notice claiming an amount of Rs. 38,30,500/- plus 10% recovery charges was issued and the respondents herein were directed to pay the said amount within a period of seven days.
d) Being aggrieved by the order dated 27.09.2004 and demand notice dated 20.01.2005, the respondent filed a writ petition being No. 732 of 2005 before the High Court. By order dated 25.01.2007, the High Court, while allowing the petition filed by the respondents herein issued a writ in the nature of certiorari quashing the impugned order dated 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005.
e) Aggrieved by the said decision, the State has preferred this appeal by way of special leave petition before this Court.
4) Heard Mr. Shail Kumar Dwivedi, learned Addl. Advocate General for the appellant-State and Mr. K.V. Viswanathan, learned senior counsel for the respondents.
5) The only question for consideration in this appeal is whether the High Court is justified in interfering with the order dated 27.09.2004 passed by the Additional Collector (Finance and Revenue), Lucknow demanding differential stamp duty with interest and penalty in respect of the sale deed dated 16.04.2003 executed in favour of the respondents herein. According to the respondents, through a registered Sale Deed dated 16.04.2003 they have purchased the house No. 17/1 Ashok Marg, Lucknow for a total sale consideration of Rs.1.5 crores on which required stamp duty of Rs. 15.53 lakhs was paid. When the Additional Collector issued a notice under Section 47A/33 of the Act, the respondents submitted objection dated 29.08.2003 stating that the extent, area and valuation are in accordance with the revenue records and the stamp duty paid by them on the sale deed was proper. It is also stated by the respondents that before passing the order dated 27.09.2004, the Additional Collector (Finance and Revenue) Lucknow has not afforded sufficient opportunity to them and the impugned order was passed in a most arbitrary manner ignoring the objection submitted by them. It is also stated that at the time of sale deed the house was a residential property and in order to avoid unnecessary harassment at the hands of the revenue and for the purpose of stamp duty and registration they had valued the said property at the rate fixed by the Collector, Lucknow treating the land as commercial at the rate of Rs.11,300 per sq. metre. In other words, for the purpose of stamp duty and registration, according to the respondents, they added additional 10% to the value.
6) In support of the contention that they were not given adequate opportunity by the Addl. Collector and order was passed on a public holiday, before the High Court as well as in this Court, the respondents herein have placed the order sheet which contains the various dates and the date on which the ultimate decision was taken by him. It shows that the matter was heard and decided on a public holiday. In all fairness, the High Court instead of keeping the writ petition pending and deciding itself after two years could have remitted the matter to the Addl. Collector for fresh orders. However, it had gone into the details as to the area of the plot, nature of the building i.e. whether it is residential or non-residential and based on the revenue records and after finding that at the time of execution of the sale deed, the house was used for residential purpose upheld the stand taken by the respondents and set aside the order dated 27.09.2004 passed by the Addl. Collector.
7) Learned counsel appearing for the appellant-State submitted that as per the provisions of the Act and the Rules made therein, there is a provision for appeal and instead of resorting the same, the respondents have straightaway approached the High Court by exercising writ jurisdiction under Article 226 which is not permissible. A perusal of the proceedings before the High Court show that the State was not serious in raising this objection relating to alternative remedy and allowed the High Court to pass orders on merits, hence we are not entertaining such objection at this juncture though it is relevant. In fact, on receipt of the notice from the High Court in 2005, the appellants who are respondents before the High Court could have objected the writ petition filed under Article 226 and sought for dismissal of the same for not availing alternative remedy but the fact remains that unfortunately the State or its officers have not resorted to such recourse.
8) We have already held that it is the grievance of the respondents that the orders were passed by the Additional Collector on a public holiday. Regarding the merits though the Collector, Lucknow made a surprise site inspection, there is no record to show that all the details such as measurement, extent, boundaries were noted in the presence of the respondents who purchased the property. It is also explained that the plot in question is not a corner plot as stated in the impugned order as boundaries of the plot mentioned in the freehold deed executed by Nazool Officer and in the sale deed dated 16.04.2003 only on one side there is a road. It is also demonstrated that at the time of execution of the sale deed, the house in question was used for residential purpose and it is asserted that the stamp duty was paid based on the position and user of the building on the date of the purchase. The impugned order of the High Court shows that it was not seriously disputed about the nature and user of the building, namely, residential purpose on the date of the purchase. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty. The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Though the matter could have been considered by the Appellate Authority in view of our reasoning that there was no serious objection and in fact the said alternative remedy was not agitated seriously and in view of the factual details based on which the High Court has quashed the order dated 27.09.2004 passed by the Additional District Collector, we are not inclined to interfere at this juncture.
9) Under these circumstances, we find no valid ground for interference with the impugned order of the High Court. Consequently, the appeal fails and the same is dismissed with no order as to costs.
Hon'ble Mr. Justice P. Sathasivam and Hon'ble Mr. Justice J. Chelameswar
State of U.P. & Others Appellant(s)
versus
Ambrish Tandon & Another Respondent(s)
Civil Appeal No(s). 735 of 2012
Date of Decision: 20 January 2012
JUDGEMENT
P. Sathasivam, J. :- Leave granted.
2) This appeal is filed against the final judgment and order dated 25.01.2007 passed by the Division Bench of the High Court of Judicature at Allahabad in Writ Petition No. 732 (M/B) of 2005 whereby the Division Bench while allowing the petition filed by the respondents herein issued a writ in the nature of certiorari quashing the impugned order dated 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005.
3) Brief Facts:
a) A Sale Deed dated 16.04.2003 was executed between Har Charan Singh and the respondents herein in respect of the property situated at 17/1 Ashok Marg, Lucknow measuring 11,029 sq. ft. and registered as Sale Deed Document No. 5341 of 2003. The total value of the property was computed as Rs. 1,55,28,860/- for the purposes of Stamp Duty and the respondents herein paid Rs. 15,53,000/- as stamp duty.
b) The District Magistrate, Lucknow made a spot inspection of the property in question on 21.07.2003. During inspection, the land has been found having an area of 12,099 sq. ft. with a two storey building having an area of 5,646.3 sq. ft. at ground floor and an area of 5192.3 sq. ft. at the first floor. In the inspection report, the property in question has been valued for Rs. 3,87,74,097/- and the stamp duty on the said property has been calculated by the competent authority as Rs. 38,78,000/-. However, at the time of purchase, respondents herein paid Rs. 15,53,000/- as Stamp duty, hence a deficiency of Rs. 23,50,000/- has been pointed out by the authorities. The District Magistrate, vide report dated 26.07.2003, directed to register a case against the respondents herein
c) On the basis of the aforesaid report, Case No. 653 Stamp-2003 under Sections 47A/33 of the Indian Stamp Act, 1899 (in short `the Act') was registered. Vide order dated 27.09.2004, the Additional Collector (Finance & Revenue) Lucknow directed the respondents to make good the deficiency in the stamp duty and also imposed a penalty amounting to Rs. 8,46,000/- for such tax evasion. On 20.01.2005, for failure to deposit the aforesaid amount, a demand notice claiming an amount of Rs. 38,30,500/- plus 10% recovery charges was issued and the respondents herein were directed to pay the said amount within a period of seven days.
d) Being aggrieved by the order dated 27.09.2004 and demand notice dated 20.01.2005, the respondent filed a writ petition being No. 732 of 2005 before the High Court. By order dated 25.01.2007, the High Court, while allowing the petition filed by the respondents herein issued a writ in the nature of certiorari quashing the impugned order dated 27.09.2004 passed by the Additional Collector (Finance & Revenue), Lucknow and the demand notice dated 20.01.2005.
e) Aggrieved by the said decision, the State has preferred this appeal by way of special leave petition before this Court.
4) Heard Mr. Shail Kumar Dwivedi, learned Addl. Advocate General for the appellant-State and Mr. K.V. Viswanathan, learned senior counsel for the respondents.
5) The only question for consideration in this appeal is whether the High Court is justified in interfering with the order dated 27.09.2004 passed by the Additional Collector (Finance and Revenue), Lucknow demanding differential stamp duty with interest and penalty in respect of the sale deed dated 16.04.2003 executed in favour of the respondents herein. According to the respondents, through a registered Sale Deed dated 16.04.2003 they have purchased the house No. 17/1 Ashok Marg, Lucknow for a total sale consideration of Rs.1.5 crores on which required stamp duty of Rs. 15.53 lakhs was paid. When the Additional Collector issued a notice under Section 47A/33 of the Act, the respondents submitted objection dated 29.08.2003 stating that the extent, area and valuation are in accordance with the revenue records and the stamp duty paid by them on the sale deed was proper. It is also stated by the respondents that before passing the order dated 27.09.2004, the Additional Collector (Finance and Revenue) Lucknow has not afforded sufficient opportunity to them and the impugned order was passed in a most arbitrary manner ignoring the objection submitted by them. It is also stated that at the time of sale deed the house was a residential property and in order to avoid unnecessary harassment at the hands of the revenue and for the purpose of stamp duty and registration they had valued the said property at the rate fixed by the Collector, Lucknow treating the land as commercial at the rate of Rs.11,300 per sq. metre. In other words, for the purpose of stamp duty and registration, according to the respondents, they added additional 10% to the value.
6) In support of the contention that they were not given adequate opportunity by the Addl. Collector and order was passed on a public holiday, before the High Court as well as in this Court, the respondents herein have placed the order sheet which contains the various dates and the date on which the ultimate decision was taken by him. It shows that the matter was heard and decided on a public holiday. In all fairness, the High Court instead of keeping the writ petition pending and deciding itself after two years could have remitted the matter to the Addl. Collector for fresh orders. However, it had gone into the details as to the area of the plot, nature of the building i.e. whether it is residential or non-residential and based on the revenue records and after finding that at the time of execution of the sale deed, the house was used for residential purpose upheld the stand taken by the respondents and set aside the order dated 27.09.2004 passed by the Addl. Collector.
7) Learned counsel appearing for the appellant-State submitted that as per the provisions of the Act and the Rules made therein, there is a provision for appeal and instead of resorting the same, the respondents have straightaway approached the High Court by exercising writ jurisdiction under Article 226 which is not permissible. A perusal of the proceedings before the High Court show that the State was not serious in raising this objection relating to alternative remedy and allowed the High Court to pass orders on merits, hence we are not entertaining such objection at this juncture though it is relevant. In fact, on receipt of the notice from the High Court in 2005, the appellants who are respondents before the High Court could have objected the writ petition filed under Article 226 and sought for dismissal of the same for not availing alternative remedy but the fact remains that unfortunately the State or its officers have not resorted to such recourse.
8) We have already held that it is the grievance of the respondents that the orders were passed by the Additional Collector on a public holiday. Regarding the merits though the Collector, Lucknow made a surprise site inspection, there is no record to show that all the details such as measurement, extent, boundaries were noted in the presence of the respondents who purchased the property. It is also explained that the plot in question is not a corner plot as stated in the impugned order as boundaries of the plot mentioned in the freehold deed executed by Nazool Officer and in the sale deed dated 16.04.2003 only on one side there is a road. It is also demonstrated that at the time of execution of the sale deed, the house in question was used for residential purpose and it is asserted that the stamp duty was paid based on the position and user of the building on the date of the purchase. The impugned order of the High Court shows that it was not seriously disputed about the nature and user of the building, namely, residential purpose on the date of the purchase. Merely because the property is being used for commercial purpose at the later point of time may not be a relevant criterion for assessing the value for the purpose of stamp duty. The nature of user is relatable to the date of purchase and it is relevant for the purpose of calculation of stamp duty. Though the matter could have been considered by the Appellate Authority in view of our reasoning that there was no serious objection and in fact the said alternative remedy was not agitated seriously and in view of the factual details based on which the High Court has quashed the order dated 27.09.2004 passed by the Additional District Collector, we are not inclined to interfere at this juncture.
9) Under these circumstances, we find no valid ground for interference with the impugned order of the High Court. Consequently, the appeal fails and the same is dismissed with no order as to costs.
Supreme Court of India: the Rule of Law: a judgment of great significance
"The present case discloses the need to reiterate that 'Access to Justice' is vital for the Rule of Law, which by implication includes the right of access to an Independent Judiciary. It is submitted that the stay of investigation or trial for significant periods of time runs counter to the principle of Rule of Law, wherein the rights and aspirations of citizens are intertwined with expeditious conclusion of matters. It is further submitted that delay in conclusion of criminal matters signifies a restriction on the right of access to justice itself, thus amounting to a violation of the citizens' rights under the Constitution, in particular under Article 21"
SUPREME COURT OF INDIA
Hon'ble Mr. Justice Asok Kumar Ganguly and Hon'ble Mr. Justice T.S. Thakur
Imtiyaz Ahmad Appellant(s)
versus
State of U.P. & Others Respondent(s)
Criminal Appeal No(s). 254-262 of 2012
Decided on 01st February, 2012
ORDER
Ganguly, J.:- Leave granted.
1. Heard learned counsel for the parties, including the learned Amicus Curiae.
2. In these appeals, this Court is concerned with a case where orders were passed by the High Court on several dates after the registration of FIR and on stay order being granted, investigation, and framing of charges or trial thereafter in the matter remained pending in the High Court for a long period of time. The stay order dated 9.4.03 and several orders dated 29.4.03, 30.4.03, 10.10.03, 7.5.04, 26.5.05, 19.9.06, 27.9.06, 6.10.06 & 18.12.08 of the High Court passed thereafter have been impugned in these appeals.
3. The questions which crop up in this case are of serious magnitude and transcend the immediate facts in the appeal and are of great national importance.
4. These appeals are directed against a batch of interlocutory orders passed by a learned Single Judge of Allahabad High Court in Criminal Writ Petition No. 1786/2003 pending before the learned Judge.
5. It appears that by order dated 9.4.2003, the learned Single Judge admitted the writ petition filed by respondent Nos. 2 and 3 herein and also stayed the order dated 7.12.2002 passed by the Additional Chief Judicial Magistrate, Gautam Budh Nagar whereby direction had been given for registration of case against the said respondents. Thereafter, the matter has been listed on various days before the High Court but the matter was getting adjourned. As on the date of filing of the SLP, the writ petition had been kept pending for six years.
6. The SLP came up for hearing before this Court on 8.1.2010. This Court was very greatly concerned about the manner in which criminal investigation and trial have been stayed by the High court and also being aware of the fact that similar cases are happening in several High Courts in India wanted a serious consideration of the issues and appointed Mr. Gopal Subramanium, Senior Advocate (at that time Solicitor General of India) to assist the Court as Amicus Curiae.
7. The Court also issued a direction dated 8.1.2010 to the Registrars General/Registrars of all the High Courts in the country to furnish a report containing statistics of cases pending in the respective High Courts in which the proceedings have been stayed at the stage of registration of FIR, investigation, framing of charges and/or trial in exercise of power under Article 226 of the Constitution or Sections 482 and/or 397 of the Code of Criminal Procedure. The report was to deal with the following types of cases:
a) murder,
b) rape,
c) kidnapping, and
d) dacoity.
8. In response to the above direction, most of the High Courts submitted their reports. Two High Courts, Sikkim and Himachal Pradesh, reported that they do not have any such pending criminal cases of the types mentioned above. The reports submitted by different High Courts disclosed that altogether there were large number of such cases pending. Such pendency of cases was analyzed by the Amicus Curiae with the valuable assistance of Dr. Pronab Sen, Secretary and Dr. G.C. Manna, Deputy Director in the Ministry of Statistics and Programme Implementation.
9. The important findings arrived at after the analysis of the data are as under:
a) Out of the four categories of cases, murder cases were found to be the most common type, accounting for 45% of all the cases.
b) About one-fourth of all the cases pending are for 2 to 4 years from the date of stay order. Nearly 8% of the cases are, however, pending for 6 years or more.
c) In most of the cases in different High Courts, the duration for which the case is pending varies from 1 to 4 years. It is seen that 34 out of 201 cases in Patna High Court and 33 out of 653 cases in Allahabad High Court are pending for 8 years or more.
10. About total pendency, in the report dated 12.4.10 filed by the Amicus, the following position emerges. Table 1 below shows the total number of cases pending in each High Court and the percentage share of the total pendency.
TABLE 1: TOTAL PENDENCY
High Court Number of criminal cases by type % share of High
Court in total number of case
Murder Rape Kidnapping Dacoity All
(1) (2) (3) (4) (5) (6) (7)
Allahabad 144 100 341 68 653 28.6
Andhra Pradesh 46 8 2 4 60 2.6
Bihar 92 36 42 31 201 8.8
Bombay 14 5 4 6 29 1.3
Chattisgarh 4 0 0 1 5 0.2
Delhi 4 5 2 0 11 0.5
Gauhati 6 5 2 8 21 0.9
Gujarat 56 9 34 16 115 5.0
J &K 4 4 69 0 14 0.6
Jharkhand 18 11 12 0 41 1.8
Karnataka 11 4 4 3 22 1.0
Kerala 12 2 5 1 20 0.9
Kolkata 431 209 21 48 709 31.1
Madhya Pradesh 10 14 1 5 30 1.3
Madras 0 1 2 0 3 0.1
Orissa 111 40 26 10 187 8.2
Punjab & Haryana 17 9 5 1 32 1.4
Rajasthan 23 11 17 5 56 2.5
Uttarakhand 18 19 24 10 71 3.1
All 1021 492 550 217 2280 100
11. It may be seen that the Hon'ble Calcutta High Court has the highest percentage share (31.1%) in total number of cases. It is followed by the Hon'ble High Courts of Allahabad (28.6%), Patna 7 (8.8%) and Orissa (8.2%). Thus, these four High Courts taken together account for 76.9% of all the pendency.
12. Table 2 gives the distribution of all cases and the period for which the cases are pending in each High Court.
TABLE 2: DURATION OF PENDENCY
High Court Duratin for which pending
Nil <6m 6m-1y 1-2y 2-4y 4-6y 6-8y >8y All
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Allahabad 1 38 126 190 158 90 17 33 653
Andhra Pradesh 0 16 16 17 11 0 0 0 60
Bihar 70 14 11 33 27 8 4 34 201
Bombay 0 1 6 8 6 3 2 3 29
Chhatisgarh 0 1 0 0 0 1 2 1 5
Delhi 0 1 2 4 0 3 1 0 11
Gauhati 0 3 5 4 3 0 6 0 21
J &K 0 5 2 3 4 0 0 0 14
Jharkhand 0 7 4 2 9 3 9 7 41
Karnataka 9 4 3 5 0 1 0 0 22
Kerala 0 1 0 1 5 13 0 0 20
Kolkata 7 40 104 135 209 176 38 0 709
Madhya Pradesh 0 2 6 2 12 6 1 1 30
Madras 0 1 0 1 1 0 0 0 3
Orissa 0 9 37 52 60 18 4 7 187
Punjab & Haryana 0 10 9 4 6 1 1 1 32
Rajasthan 0 8 8 11 22 6 0 1 56
Uttarakhand 0 7 10 9 21 20 3 1 71
All 87 176 355 515 600 369 89 89 2280
13. The category wise distribution is as follows:
TABLE 3: CATEGORYWISE DISTRIBUTION
Type of Case Duration for which pending
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Nil <6m 6m-1y 1-2y 2-4y 4-6y 6-8y >8y All
Murder 25 65 132 182 309 211 43 54 1021
Rape 25 46 83 111 127 68 21 11 492
Kidnapping 16 51 120 156 116 67 12 12 550
Dacoity 21 14 20 66 48 23 13 12 217
All 87 176 355 515 600 369 89 89 2280
14. It is clear from the above that out of the four categories, murder cases account for nearly 45% of the total pendency. This share increases if only the oldest pending cases are considered. Out of 9 the 178 cases pending for 6 years or more, 97 are murder cases - i.e. a share of almost 55%.
15. In that report indications were also given about the frequency of listing of cases by different High Courts.
16. On the hypothesis that if a case is listed frequently, it indicated that the matter was being actively considered by the High court, data was also called for on the number of times the case was listed after the grant of the stay order.
17. The following table gives the average number of times a matter was listed for hearing after the grant of stay order.
High Court Total number of cases Average number of times the matter was listed per case
Allahabad 653 4.0
Andhra Pradesh 60 3.4
Bihar 201 21.7
Bombay 29 5.1
Chhattisgarh 5 4.3
Delhi 11 12.2
Gauhati 21 17.0
Gujarat 115 13.4
J & K 14 7.7
Jharkhand 41 3.5
Karnataka 22 5.0
Kerala 20 11.4
Kolkata 709 N/A
Madhya Pradesh 30 3.0
Madras 3 2.3
Orissa 187 5.8
Punjab & Haryana 32 8.8
Rajasthan 56 7.9
Uttarakhand 71 3.1
All 2280 6.1
18. However, the above analysis was not pursued any further, since there was no way of ascertaining which of the hearings were effective and which were non-effective. Hence, it could be misleading to draw any conclusions from this data.
19. On the basis of the aforesaid data it is clear that problems which the administration of justice faces today is of serious dimensions. Pendency is merely a localized problem, in the sense that it affects some High Courts far more than others. As seen above, just four High Courts in this country amount for 76.9% of the pendency. This may well be because of various social, political and economic factors, which are beyond the scope of the current enquiry by this Court.
20. It is a matter of serious concern that 41% of the cases have been pending for 2-4 years, and 8% (approximately 1 out of every 12 cases) have been pending for more than six years.
21. After considering the first report by the Amicus, this Court passed the following order on 3.5.2010:-
"The suggestions given by the Solicitor General have been considered. But before passing any order, we deem it proper to request learned counsel representing Allahabad High Court to place before the Court total number of cases in which power under Article 226 of the Constitution of India or Section 482 of the Code of Criminal Procedure has been exercised and the proceedings of the criminal case have been stayed at the stage of investigation or trial."
22. Pursuant to the above order, the Allahabad High Court furnished information of a total of 10,541 cases where power under Article 226 of the Constitution of India or Section 482 of the Code of Criminal Procedure has been exercised and the proceedings of the criminal case have been stayed at the stage of investigation or trial. Pursuant to a request of the Amicus Curiae, the Allahabad High Court also furnished the above data in electronic form.
23. The data was then analyzed by the Amicus Curiae with the help of Dr. T.C.A. Anant (the current Secretary) and Dr. G.C. Manna, Deputy Director 1General in the Ministry of Statistics and Programme Implementation. Then a second report was prepared and placed for the consideration of this Court.
24. Important findings from the second report are:-
"Out of the data for 10,541 cases received, data for 10,527 cases could be meaningfully analysed (as the rest had some missing elements). The important findings in respect of these are:
(a) As high as 9% of the cases have completed-more than twenty years since the date of stay order.
(b) Roughly 21 % of the cases have completed more than ten years.
(c) Average pendency per case (counted from the date of stay order till July 26, 2010) works out to be around 7.4 years.
(d) Charge-sheet was found to be the most prominent stage where the cases were stayed with almost 32% of the cases falling under this category. The next two prominent stages are found to be "appearance" and "summons", with each comprising 19% of the total number of cases. (If "appearance" and "summons" are considered interchangeable, then they would collectively account for the maximum of stay orders."
25. Table below gives the duration for which cases have been pending since the date of the stay order:
No. of years passed Number of cases Percentage of cases
0 763 7.2
1 1250 11.9
2 1272 12.1
3 1024 9.7
4-5 2003 19.0
6-7 1125 10.7
8-10 920 8.7
11-15 577 5.5
16-20 648 6.2
21-25 631 6.0
More than 25 314 3.0
All 10527 100.0
26. A perusal of that information reveals that shockingly thirty-two cases have been pending for thirty years or more.
27. The data was also analyzed to ascertain the stage of the proceedings at which stay order was granted. Table below may be seen:-
Stage at which
proceeding stayed Number of cases Percentage of cases
Chargesheet 3365 32.0
Appearance 2016 19.2
Summons 1951 18.5
"Further
proceedings stayed" 563 5.3
Before charge 380 3.6
Trial 330 3.1
Evidence 323 3.1
Complaints 315 3.0
Cognizance 245 2.3
Disposal 237 2.3
Issue of notice 178 1.7
Others 624 5.9
All 10527 100.0
28. As stated in the First Report and Second Report, the fact-finding exercise directed by this court has revealed a problem of serious concern. It is respectfully submitted that it is simply unacceptable for a case to remain pending for three decades under any circumstances, and more so when the pendency is a consequence of the stay proceedings granted by the High Court.
29. Thereafter, vide Order dated 26.08.2010, this Court was of the view that the existing infrastructure in the High Court's and District Court's must be improved and had directed that a comprehensive exercise should be undertaken to prepare the system in which all the cases instituted in the Court are listed for hearing without undue delay and some arrangement be made for monitoring of the listing and disposal of the cases. As a pilot project, the system is to be first implemented in the Allahabad High Court.
30. Thereafter, meetings were held between the officers of NIC, the Ministry of Statistics, the Allahabad High Court and the Amicus Curiae and efforts were made to develop the comprehensive system that the Court has directed. Another Report was filed by the Amicus Curiae setting out the steps taken by the Allahabad High Court, the Central Government and also certain suggestions given by Dr. G.C. Manna, Director General, Ministry of Statistics, who had been requested to visit the High Court to interact with the officials there to see how a better system of listing and tracking cases could be developed.
31. Thereafter, vide Orders dated 14.07.2011 and 17.08.2011, this Court again called for status reports from all the High Courts as to what steps had been taken specifically in the context of this case, in order to expeditiously dispose of matters where proceedings are stayed at the stage of registration of FIR, investigation, framing of charges or trial. Status reports were furnished by some of the High Courts and reports from other High Courts were awaited.
32. Then, vide Order dated 29.09.2011, this Court observed that considering the larger issues which are involved in this case which virtually have a direct impact on administration of justice, it was fit and proper to implead the Central Government in this proceeding.
33. It is submitted that the issues being considered in this case have far reaching implications for maintaining of rule of law. Where investigation/trial is stayed for a long time, even if the stay is ultimately vacated, the subsequent investigation/trial may not be very fruitful for the simple reason, that evidence may no longer be available. Witnesses may not be able to recall the events properly, and some may have moved away or even died. Even the parties to the litigation may not survive. Unduly long delay has the effect of bringing about blatant violation of the rule of law and adverse impact on the common man's access to justice. A person's access to justice is a guaranteed fundamental right under the Constitution and particularly Article 21. Denial of this right undermines public confidence in the justice delivery system and incentivises people to look for short-cuts and other fora where they feel that justice will be done quicker. In the long run, this also weakens the justice delivery system and poses a threat to Rule of Law.
34. It may not be out of place to highlight that access to justice must not be understood in a purely quantitative dimension. Access to justice in an egalitarian democracy must be understood to mean qualitative access to justice as well. Access to justice is, therefore, much more than improving an individual's access to courts, or guaranteeing representation. It must be defined in terms of ensuring that legal and judicial outcomes are just and inequitable (See United Nations Development Programme, Access to Justice - Practice Note (2004)].
35. The present case discloses the need to reiterate that 'Access to Justice' is vital for the Rule of Law, which by implication includes the right of access to an Independent Judiciary. It is submitted that the stay of investigation or trial for significant periods of time runs counter to the principle of Rule of Law, wherein the rights and aspirations of citizens are intertwined with expeditious conclusion of matters. It is further submitted that delay in conclusion of criminal matters signifies a restriction on the right of access to justice itself, thus amounting to a violation of the citizens' rights under the Constitution, in particular under Article 21.
36. In a very important address to the Virginia Bar Association in 1908, William H. Taft observed that one reason for delay in the lower courts is the disposition of judges to wait an undue length of time in the writing of their opinions or judgments. [See William H. Taft, The Delays of the Law, Yale Law Journal. Vo1.18. No.1 (Nov., 1908), pp.28-39)]. The Judge should deliver the judgment immediately upon the close of the argument. It is almost of as much importance that the court of first instance should decide promptly as that it should decide right. It should be noted that everything which tends to prolong or delay litigation between individuals, or between individuals and State or Corporation, is a great advantage for that litigant who has the longer purse. The man whose rights are involved in the decision of the legal proceeding is much prejudiced in a fight through the courts, if his opponent is able, by reason of his means, to prolong the litigation and keep him for years out of what really belongs to him.
37. Dispatch in the decision making process by Court is one of the great expectations of the common man from the judiciary. A sense of confidence in the Courts is essential to maintain a fabric of order and liberty for a free people. Delay in disposal of cases would destroy that confidence and do incalculable damage to the society; that people would come to believe that inefficiency and delay will drain even a just judgment of its value; that people who had long been exploited in the small transactions of daily life come to believe that courts cannot vindicate their legal rights against fraud and overreaching; that people would come to believe that the law - in the larger sense cannot fulfil its primary function to protect them and their families in their homes, at their work place and on the public streets. [See Belekar Memorial Lecture Series, organized by High Court Bar Association, Nagpur. Lecture delivered on August 31, 2002]
38. Merely widening the access to justice is not enough to secure redress to the weaker sections of the community. Post Independence, it was evident that litigation in India was getting costlier and there was agonizing delay in the process. After the adoption of the Constitution and creation of a Welfare State, the urgency of some structural changes in the justice delivery system was obviously a major requirement. In the 14th Report of the Law Commission under the Chairmanship of the first Attorney General for India, Shri M.C. Setalvad, it was observed as under:-
"In so far as a person is unable to obtain access to a court of law for having his wrongs redressed.... Justice becomes unequal and laws which are meant for his protection fail in their purpose."
39. In a very important discourse Roscoe Pound argued that by responding to the doctrine of social justice, the concept of justice has advanced through various stages. [See Roscoe Pound, Social Justice and Legal Justice (Address delivered to the Allegheny County Bar Association, April 5, 1912]. At the first stage justice was equated with dispute settlement. At the second stage justice was equated with maintenance of harmony and order. In the third stage, justice was equated with individual freedom. Pound argued that a fourth stage had developed in society, but had not yet been fully reflected in the courts, and that was what Pound called 'social justice'. That is the ideal form of justice where the needs of the people are satisfied, apart from ensuring that they have freedom.
40. Despite complicated social realities, it is submitted that Rule of Law, independence of the judiciary and access to justice are conceptually interwoven. All the three bring to bear upon the quality of aspirations which are guaranteed under our Constitution. In order to fulfil the aspiration, it is important that the system must be a successful legal and judicial system. This would involve improvement of better techniques to manage courts more efficiently, cutting down costs and duration of proceedings and to ensure that there is no corruption in the judiciary and the establishment of the judiciary and would also require regular judicial training and updating.
41. The memorable words of Lord Devlin (as quoted by D.M. Dharmadhikari, J.) are pertinent to note:
"... The prestige of the judiciary and their reputation for stark impartiality is not at the disposal of any government; it is an asset that belongs to the whole nation ... "
[See Justice D.M. Dharmadhikari, Nature of Judicial Process, (2002) 6 SCC (Jour) 1.
42. Under the principle of the Rule of Law, adequate protection of the law must be given to all persons and to give meaning to it, there must exist an unimpeded right of access to justice. In the 'Words of Lord Bingham:
"It would seem to be an obvious implication of the principle that everyone is bound by and entitled to the protection of law that people should be able, in the last resort, to go to court to have their civil rights and claims determined. An unenforceable right or claim is a thing of little value to anyone."
[See Tom Bingham, The Rule of Law, p. 85]
43. The right of access to justice has been recognised as one of the fundamental and basic human rights in various international covenants and charters.[See Article 14(3) of the International Covenant on Civil and Political Rights (ICCPR)]
44. The right of access to justice is also recognised under Article 67 of the Statute of the International Criminal Court (Rome Statute).
45. In the context of the European Union, Article 47 of the European Charter on Fundamental Rights provides for the right to an effective remedy and to fair trial. With respect to the Council of Europe, the European Convention on Human Rights and Fundamental Freedoms, Article 6 significantly protects this right to access justice.
46. The European Court of Human Rights has held that a broader interpretation must be given to Article 6(1) of the ECHR laying emphasis on 'right to a fair administration of justice' in the case of Delcourt v. Belgium.
"...In a democratic society within the meaning of the Convention, the right to a fair administration of justice hold such a prominent place that a restrictive interpretation of Article 6(1) would not correspond to the aim and purpose of that provision."
[See [1970] ECHR 1.]
47. Article 8 of the Universal Declaration of Human Rights provides that:
"Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law."
48. Article 16 of the Principles of Freedom from Arbitrary Arrest and Detention provides that:
"To ensure that no person shall be denied the possibility of obtaining provisional release on account of lack of means, other forms of provisional release than upon financial security shall be provided."
49. The principle of 'Access to Justice or Courts' is recognized as a right in South Africa's Constitution as well:
"Access to Courts.
34. Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum."
50. The learned Amicus urged that having regard to the paramount importance of the right to access, the Court which he argues is a basic fundamental right specially the Central Government and the State Governments have a duty to ensure speedy disposal of cases for proper maintenance of rule of law and for sustaining peoples' faith in the judicial system. He further argued that with the present infrastructure it is not possible for Courts, whether it is District Courts or the State High Courts or this Court to effectively dispose of cases by just and fair orders within a reasonable timeframe. The learned Amicus also urged that the problem is huge and the considerations are momentous. To understand the magnitude of the problem, the Government must appoint a permanent commission to make continuous recommendation on measures which are necessary to streamline the existing justice delivery system. In support of his submission, he referred to the Report of Lord Woolf submitted to Lord Chancellor in England:
"...It will not only assist in streamlining and improving our existing systems and process; it is also likely, in due course, itself to be a catalyst for radical change as well..."
[Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (Lord Woolf's Report), 1996, Chapter 21, para 1]
51. The learned Amicus submitted that this huge pendency of cases operates as a burden on the mindset of a Judge. He submitted rightly that the inner charter of the judge is constantly under a pressure to somehow decide the case and the quality of justice suffers. Therefore, according to him, it is the constitutional duty of both the Central Government and the State Government to provide adequate infrastructure to the judiciary and only an independent commission which functions on a permanent basis can assess the necessity of the required infrastructure and make recommendations to the Government for providing necessary steps which the Government should take to make the Constitutional promise of justice a reality. The learned Amicus developed his argument by referring to various decisions of this Court and also various provisions of the Constitution. He further submitted that the plea of the Government that in view of financial crunch it cannot provide the necessary infrastructure cannot be countenanced by this Court and in support of the said submission he referred to the decision of this Court in the case of R. Ramachandra Rav v. State of Karnataka, reported in (2002) 4 SCC 578. The relevant observations made in the said judgment are as follows:-
"...The law does not permit any government to deprive its citizens of constitutional rights on a plea of poverty or administrative inability..."
52. As the Central Government has been impleaded in this proceeding it was represented by Mr. Harin P. Raval, the learned ASG.
53. The learned ASG very fairly submitted that the questions debated in this case, by and large, are not adversarial. The learned ASG submitted that the Government also accepts that right of access to Court is a fundamental and constitutional right. The learned ASG also accepted that if right to access justice is denied to the citizens then most of the rights given under the Constitution virtually become a rope of sand. The learned ASG submitted that the Government is aware of the importance of these rights and are taking several steps to make these rights vibrant. In the counter affidavit, which has been filed by the Under Secretary, Ministry of Law and Justice dated 9.1.2012 several steps which have been taken by the Government to ensure speedy justice and to reduce delay are as follows:-
I. Appointment of Court Managers in High Courts and Sub-ordinate Courts.
II. Vision Statement and Action Plan adopted by the National Consultation for Strengthening the Judiciary towards Reducing Pendency and Delays.
III. To prepare National Arrear Grid
IV. National Mission for Justice Delivery and Legal Reforms.
V. National and State Legal Service Authorities constituted under Legal Service Authorities Act, 1987. VI. National Court Management System (as proposed by Hon'ble Chief Justice of India).
54. The learned ASG referred to the agenda notes and the minutes of the meeting of the Advisory Council of the National Commission for Justice Delivery and Legal Reforms. He submitted that the National Mission spanning from 2011 to 2016 would focus on two major goals envisaged in the Vision document, namely, (i) increasing access by reducing delays and arrears in the system, and (ii) enhancing accountability through structural changes and by setting performance standards and capacities.
55. It was also pointed out that the tentative action plan covers five strategic initiatives and one of them is improving infrastructure of the District and Subordinate Courts and creation of special and additional courts like morning and evening courts etc. He referred to various pages of the Meeting of the Advisory Council of the National Mission held on 18.10.2011 in Vigyan Bhawan, New Delhi to show that the Government is aware of the problem and is seeking to address the same. However, in the course of his arguments the learned ASG took the leave of this Court and filed another affidavit dated 18.1.2012 by Dr. S.S. Chahar, Joint Secretary and Legal Advisor, Ministry of Law and Justice.
56. By filing the said affidavit the learned ASG wanted to urge before this Court that even though the Government is aware of the urgency of the problem and the immediate necessity of addressing it, Government is not willing to accept the suggestion of the learned Amicus for setting-up of a permanent commission for the purposes suggested by the learned Amicus.
57. The learned ASG on the other hand submitted in view of the stand taken by the Central Government in its affidavit dated 18.1.2012 that the existing terms of reference of the 19th Law Commission are wide enough to include within its ambit the question of setting up additional courts for the purpose of tackling the arrears so that access to justice is ensured. In this connection, he referred to the terms of reference of the 19th Law Commission. The said terms of reference are as follows:-
"A. Review/Repeal of obsolete laws:
i. To identify laws which are no longer needed or relevant and can be immediately repealed.
ii. To identify laws which are in harmony with the existing climate of economic liberalization which need no change.
iii. To identify laws which require changes or amendments and to make suggestions for their amendment.
iv. To consider in a wider perspective the suggestions for revision/amendment given by Expert Groups in various Ministries/Departments with a view to coordinating and harmonizing them.
v. To consider references made to it by Ministries/Departments in respect of legislation having bearing on the working of more than one Ministry/Department.
vi. To suggest suitable measures for quick redressal of citizens grievances, in the field of law.
B. Law and Poverty
i. To examine the Law which affect the poor and carry out post-audit for socio-economic legislation.
ii. To take all such measures as may be necessary to harness law and the legal process in the service of the poor.
C. To keep under review the system of judicial administration to ensure that it is responsive to the reasonable demands of the times and in particular to secure: -
i. Elimination of delays, speedy clearance of arrears and reduction in costs so as to secure quick and economical disposal of cases without affecting the cardinal principle that decisions should be just and fair.
ii. Simplification of procedure to reduce and eliminate technicalities and devices for delay so that it operates not as an end in itself but as a means of achieving justice.
iii. Improvement of standards of all concerned with the administration of justice.
D. To examine the existing laws in the light of Directive Principles of State Policy and to suggest ways of improvement and reform and also to suggest such legislation as might be necessary to implement the Directive Principles and to attain the objective set out in the Preamble to the Constitution.
E. To examine the existing laws with a view to promoting gender equality and suggesting amendments thereto. F. To revise the Central Acts of General Importance so as to simplify them and to remove anomalies, ambiguities and inequities.
G. To recommend to the Government measure for bringing the statute book up-to-date by repealing obsolete laws and enactments or parts thereof which have outlived their utility.
H. To consider and to convey to the Government its views on any subject relating to law and judicial administration that may be referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs).
I. To consider the requests for providing research to any foreign countries as may be referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs).
J. To examine the impact of globalization on food security, unemployment and recommend measures for the protection of the interests of the marginalized.
The Commission shall devote, its time bound attention to all issues relating to item (A) of the terms of reference as indicated above, viz., review/repeal of obsolete laws and shall make its recommendations to Government for repeal of obsolete laws and for appropriate amendments in others as may be found necessary ON TOP PRIORITY basis.
The Commission shall submit its reports in Hindi and English with sufficient number of copies for being placed on Tables of both houses of Parliament. The Law Commission shall also make its reports available through website or otherwise as soon as reports are submitted to the Government.
Various Law Commissions have given about 234 Reports so far. Many of them are made available on the website of Law Commission. Since many of the Reports are voluminous it will be difficult for researchers to read entire Report online. To facilitate the researchers to choose the topics of their area and to create awareness amongst Judges, Lawyers, Law Teachers and Students on the various recommendations of the Law Commission, a brief summary of all the Reports of the Law Commission shall be made available by the Law Commission, online."
58. The learned ASG submitted that in view of Clause `H' of the terms of reference of the 19th Law Commission, the present Law Commission can go into the question of making a proper research and a scientific and empirical study to assess the requirement of setting up additional courts and making available additional infrastructures for ensuring free access to court and speedier disposal of cases. The learned ASG submitted that the pendency of cases cannot be tackled by only setting up additional courts. Various other factors are also involved including the cooperation of the members of the Bar, the quality of legal education, policy of legislation, recruitment of quality manpower and such other issues which the Law Commission should urgently address and make recommendations on.
59. The learned ASG also submitted that having regard to the provision of Article 235 of the Constitution the control over district and subordinate courts rests with the respective High Courts in each State. In assessing the requirement of setting up of additional courts and creating additional benches, the opinion of the High Court and the State Government have to be ascertained including the question of budget allocation to each State Government. The learned ASG also submitted that since the Government is keenly interested to address these problems it is open to any suggestion. It was submitted that any direction from this Court will help the Government and the Law Commission to tackle this problem in a very effective way.
60. The Court, upon a detailed and very anxious consideration of the aforesaid issues and specially huge pendency of arrears in different High Courts and considering the stand of the Central Government in its affidavit dated 18.1.2012 is giving the following directions.
I. Certain directions are given to the High Courts for better maintenance of the Rule of Law and better administration of justice:
While analyzing the data in aggregated form, this Court cannot overlook the most important factor in the administration of justice. The authority of the High Court to order stay of investigation pursuant to lodging of FIR, or trial in deserving cases is unquestionable. But this Court is of the view that the exercise of this authority carries with it the responsibility to expeditiously dispose of the case. The power to grant stay of investigation and trial is a very extraordinary power given to High Courts and the same power is to be exercised sparingly only to prevent an abuse of the process and to promote the ends of justice. It is therefore clear that:
(i) such an extraordinary power has to be exercised with due caution and circumspection.
(ii) Once such a power is exercised, High Court should not lose sight of the case where it has exercised its extraordinary power of staying investigation and trial.
(iii) High Court should make it a point of finally disposing of such proceedings as early as possible but preferably within six months from the date the stay order is issued.
61. It is true that this Court has no power of superintendence over High Court as the High Court has over District Courts under Article 227 of the Constitution. Like this Court, High Court is equally a Superior Court of Record with plenary jurisdiction. Under our Constitution High Court is not a Court subordinate to this Court. This Court, however, enjoys appellate powers over High Court as also some other incidental powers. But as the last court and in exercise of this Court's power to do complete justice which includes within it the power to improve the administration of justice in public interest, this Court gives the aforesaid guidelines for sustaining common man's faith in the rule of law and the justice delivery system, both being inextricably linked.
II. Certain directions are also given to the Law Commission which are as follows:
a) Since the Law Commission itself is seized with the problem and is making investigation having regard to its terms of reference specially clause `H', thereof, this Court requests the Law Commission, which is headed by a distinguished retired judge of this Court, to undertake an enquiry and submit its recommendation in relation to the following matters:-
I. Keeping in view that timely justice is an important facet to access to justice, the immediate measures that need to be taken by way of creation of additional courts and other allied matters (including a rational and scientific definition of "arrears" and delay, of which continued notice needs to be taken), to help in elimination of delays, speedy clearance of arrears and reduction in costs. It is trite to add that the qualitative component of justice must not be lowered or compromised; and
II. Specific recommendations whenever considered necessary on the above aspects in relation to each State be made as a product of consultative processes involving the High Courts and other stake holders, including the Bar.
b) In doing so, the Commission may take such assistance from the Central Government and the State Governments as it thinks fit and proper.
c) Accordingly, it is directed that on the Commission's request for assistance both the Central Government and the State Governments shall render all possible assistance to the Commission to enable it to discharge its functions, as directed by this Court in its order. The Commission shall at the discretion of its Chairman be free to co-opt purposes of the enquiry to be undertaken by it. Such legal & technical, experts as may be considered necessary by it for an effective and early completion of the assignment hereby made.
d) The Commission is requested to submit its report within six months from the date of this order.
e) Such recommendations be sent to the Registrar General of this Court in sealed covers.
62. The matter may appear before the appropriate Bench after being nominated by the Hon'ble the Chief Justice on the 7th August, 2012 for further consideration by this Court of the recommendations by the Law Commission and if necessary for further directions to be passed in these appeals.
---------------------------------
SUPREME COURT OF INDIA
Hon'ble Mr. Justice Asok Kumar Ganguly and Hon'ble Mr. Justice T.S. Thakur
Imtiyaz Ahmad Appellant(s)
versus
State of U.P. & Others Respondent(s)
Criminal Appeal No(s). 254-262 of 2012
Decided on 01st February, 2012
ORDER
Ganguly, J.:- Leave granted.
1. Heard learned counsel for the parties, including the learned Amicus Curiae.
2. In these appeals, this Court is concerned with a case where orders were passed by the High Court on several dates after the registration of FIR and on stay order being granted, investigation, and framing of charges or trial thereafter in the matter remained pending in the High Court for a long period of time. The stay order dated 9.4.03 and several orders dated 29.4.03, 30.4.03, 10.10.03, 7.5.04, 26.5.05, 19.9.06, 27.9.06, 6.10.06 & 18.12.08 of the High Court passed thereafter have been impugned in these appeals.
3. The questions which crop up in this case are of serious magnitude and transcend the immediate facts in the appeal and are of great national importance.
4. These appeals are directed against a batch of interlocutory orders passed by a learned Single Judge of Allahabad High Court in Criminal Writ Petition No. 1786/2003 pending before the learned Judge.
5. It appears that by order dated 9.4.2003, the learned Single Judge admitted the writ petition filed by respondent Nos. 2 and 3 herein and also stayed the order dated 7.12.2002 passed by the Additional Chief Judicial Magistrate, Gautam Budh Nagar whereby direction had been given for registration of case against the said respondents. Thereafter, the matter has been listed on various days before the High Court but the matter was getting adjourned. As on the date of filing of the SLP, the writ petition had been kept pending for six years.
6. The SLP came up for hearing before this Court on 8.1.2010. This Court was very greatly concerned about the manner in which criminal investigation and trial have been stayed by the High court and also being aware of the fact that similar cases are happening in several High Courts in India wanted a serious consideration of the issues and appointed Mr. Gopal Subramanium, Senior Advocate (at that time Solicitor General of India) to assist the Court as Amicus Curiae.
7. The Court also issued a direction dated 8.1.2010 to the Registrars General/Registrars of all the High Courts in the country to furnish a report containing statistics of cases pending in the respective High Courts in which the proceedings have been stayed at the stage of registration of FIR, investigation, framing of charges and/or trial in exercise of power under Article 226 of the Constitution or Sections 482 and/or 397 of the Code of Criminal Procedure. The report was to deal with the following types of cases:
a) murder,
b) rape,
c) kidnapping, and
d) dacoity.
8. In response to the above direction, most of the High Courts submitted their reports. Two High Courts, Sikkim and Himachal Pradesh, reported that they do not have any such pending criminal cases of the types mentioned above. The reports submitted by different High Courts disclosed that altogether there were large number of such cases pending. Such pendency of cases was analyzed by the Amicus Curiae with the valuable assistance of Dr. Pronab Sen, Secretary and Dr. G.C. Manna, Deputy Director in the Ministry of Statistics and Programme Implementation.
9. The important findings arrived at after the analysis of the data are as under:
a) Out of the four categories of cases, murder cases were found to be the most common type, accounting for 45% of all the cases.
b) About one-fourth of all the cases pending are for 2 to 4 years from the date of stay order. Nearly 8% of the cases are, however, pending for 6 years or more.
c) In most of the cases in different High Courts, the duration for which the case is pending varies from 1 to 4 years. It is seen that 34 out of 201 cases in Patna High Court and 33 out of 653 cases in Allahabad High Court are pending for 8 years or more.
10. About total pendency, in the report dated 12.4.10 filed by the Amicus, the following position emerges. Table 1 below shows the total number of cases pending in each High Court and the percentage share of the total pendency.
TABLE 1: TOTAL PENDENCY
High Court Number of criminal cases by type % share of High
Court in total number of case
Murder Rape Kidnapping Dacoity All
(1) (2) (3) (4) (5) (6) (7)
Allahabad 144 100 341 68 653 28.6
Andhra Pradesh 46 8 2 4 60 2.6
Bihar 92 36 42 31 201 8.8
Bombay 14 5 4 6 29 1.3
Chattisgarh 4 0 0 1 5 0.2
Delhi 4 5 2 0 11 0.5
Gauhati 6 5 2 8 21 0.9
Gujarat 56 9 34 16 115 5.0
J &K 4 4 69 0 14 0.6
Jharkhand 18 11 12 0 41 1.8
Karnataka 11 4 4 3 22 1.0
Kerala 12 2 5 1 20 0.9
Kolkata 431 209 21 48 709 31.1
Madhya Pradesh 10 14 1 5 30 1.3
Madras 0 1 2 0 3 0.1
Orissa 111 40 26 10 187 8.2
Punjab & Haryana 17 9 5 1 32 1.4
Rajasthan 23 11 17 5 56 2.5
Uttarakhand 18 19 24 10 71 3.1
All 1021 492 550 217 2280 100
11. It may be seen that the Hon'ble Calcutta High Court has the highest percentage share (31.1%) in total number of cases. It is followed by the Hon'ble High Courts of Allahabad (28.6%), Patna 7 (8.8%) and Orissa (8.2%). Thus, these four High Courts taken together account for 76.9% of all the pendency.
12. Table 2 gives the distribution of all cases and the period for which the cases are pending in each High Court.
TABLE 2: DURATION OF PENDENCY
High Court Duratin for which pending
Nil <6m 6m-1y 1-2y 2-4y 4-6y 6-8y >8y All
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Allahabad 1 38 126 190 158 90 17 33 653
Andhra Pradesh 0 16 16 17 11 0 0 0 60
Bihar 70 14 11 33 27 8 4 34 201
Bombay 0 1 6 8 6 3 2 3 29
Chhatisgarh 0 1 0 0 0 1 2 1 5
Delhi 0 1 2 4 0 3 1 0 11
Gauhati 0 3 5 4 3 0 6 0 21
J &K 0 5 2 3 4 0 0 0 14
Jharkhand 0 7 4 2 9 3 9 7 41
Karnataka 9 4 3 5 0 1 0 0 22
Kerala 0 1 0 1 5 13 0 0 20
Kolkata 7 40 104 135 209 176 38 0 709
Madhya Pradesh 0 2 6 2 12 6 1 1 30
Madras 0 1 0 1 1 0 0 0 3
Orissa 0 9 37 52 60 18 4 7 187
Punjab & Haryana 0 10 9 4 6 1 1 1 32
Rajasthan 0 8 8 11 22 6 0 1 56
Uttarakhand 0 7 10 9 21 20 3 1 71
All 87 176 355 515 600 369 89 89 2280
13. The category wise distribution is as follows:
TABLE 3: CATEGORYWISE DISTRIBUTION
Type of Case Duration for which pending
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Nil <6m 6m-1y 1-2y 2-4y 4-6y 6-8y >8y All
Murder 25 65 132 182 309 211 43 54 1021
Rape 25 46 83 111 127 68 21 11 492
Kidnapping 16 51 120 156 116 67 12 12 550
Dacoity 21 14 20 66 48 23 13 12 217
All 87 176 355 515 600 369 89 89 2280
14. It is clear from the above that out of the four categories, murder cases account for nearly 45% of the total pendency. This share increases if only the oldest pending cases are considered. Out of 9 the 178 cases pending for 6 years or more, 97 are murder cases - i.e. a share of almost 55%.
15. In that report indications were also given about the frequency of listing of cases by different High Courts.
16. On the hypothesis that if a case is listed frequently, it indicated that the matter was being actively considered by the High court, data was also called for on the number of times the case was listed after the grant of the stay order.
17. The following table gives the average number of times a matter was listed for hearing after the grant of stay order.
High Court Total number of cases Average number of times the matter was listed per case
Allahabad 653 4.0
Andhra Pradesh 60 3.4
Bihar 201 21.7
Bombay 29 5.1
Chhattisgarh 5 4.3
Delhi 11 12.2
Gauhati 21 17.0
Gujarat 115 13.4
J & K 14 7.7
Jharkhand 41 3.5
Karnataka 22 5.0
Kerala 20 11.4
Kolkata 709 N/A
Madhya Pradesh 30 3.0
Madras 3 2.3
Orissa 187 5.8
Punjab & Haryana 32 8.8
Rajasthan 56 7.9
Uttarakhand 71 3.1
All 2280 6.1
18. However, the above analysis was not pursued any further, since there was no way of ascertaining which of the hearings were effective and which were non-effective. Hence, it could be misleading to draw any conclusions from this data.
19. On the basis of the aforesaid data it is clear that problems which the administration of justice faces today is of serious dimensions. Pendency is merely a localized problem, in the sense that it affects some High Courts far more than others. As seen above, just four High Courts in this country amount for 76.9% of the pendency. This may well be because of various social, political and economic factors, which are beyond the scope of the current enquiry by this Court.
20. It is a matter of serious concern that 41% of the cases have been pending for 2-4 years, and 8% (approximately 1 out of every 12 cases) have been pending for more than six years.
21. After considering the first report by the Amicus, this Court passed the following order on 3.5.2010:-
"The suggestions given by the Solicitor General have been considered. But before passing any order, we deem it proper to request learned counsel representing Allahabad High Court to place before the Court total number of cases in which power under Article 226 of the Constitution of India or Section 482 of the Code of Criminal Procedure has been exercised and the proceedings of the criminal case have been stayed at the stage of investigation or trial."
22. Pursuant to the above order, the Allahabad High Court furnished information of a total of 10,541 cases where power under Article 226 of the Constitution of India or Section 482 of the Code of Criminal Procedure has been exercised and the proceedings of the criminal case have been stayed at the stage of investigation or trial. Pursuant to a request of the Amicus Curiae, the Allahabad High Court also furnished the above data in electronic form.
23. The data was then analyzed by the Amicus Curiae with the help of Dr. T.C.A. Anant (the current Secretary) and Dr. G.C. Manna, Deputy Director 1General in the Ministry of Statistics and Programme Implementation. Then a second report was prepared and placed for the consideration of this Court.
24. Important findings from the second report are:-
"Out of the data for 10,541 cases received, data for 10,527 cases could be meaningfully analysed (as the rest had some missing elements). The important findings in respect of these are:
(a) As high as 9% of the cases have completed-more than twenty years since the date of stay order.
(b) Roughly 21 % of the cases have completed more than ten years.
(c) Average pendency per case (counted from the date of stay order till July 26, 2010) works out to be around 7.4 years.
(d) Charge-sheet was found to be the most prominent stage where the cases were stayed with almost 32% of the cases falling under this category. The next two prominent stages are found to be "appearance" and "summons", with each comprising 19% of the total number of cases. (If "appearance" and "summons" are considered interchangeable, then they would collectively account for the maximum of stay orders."
25. Table below gives the duration for which cases have been pending since the date of the stay order:
No. of years passed Number of cases Percentage of cases
0 763 7.2
1 1250 11.9
2 1272 12.1
3 1024 9.7
4-5 2003 19.0
6-7 1125 10.7
8-10 920 8.7
11-15 577 5.5
16-20 648 6.2
21-25 631 6.0
More than 25 314 3.0
All 10527 100.0
26. A perusal of that information reveals that shockingly thirty-two cases have been pending for thirty years or more.
27. The data was also analyzed to ascertain the stage of the proceedings at which stay order was granted. Table below may be seen:-
Stage at which
proceeding stayed Number of cases Percentage of cases
Chargesheet 3365 32.0
Appearance 2016 19.2
Summons 1951 18.5
"Further
proceedings stayed" 563 5.3
Before charge 380 3.6
Trial 330 3.1
Evidence 323 3.1
Complaints 315 3.0
Cognizance 245 2.3
Disposal 237 2.3
Issue of notice 178 1.7
Others 624 5.9
All 10527 100.0
28. As stated in the First Report and Second Report, the fact-finding exercise directed by this court has revealed a problem of serious concern. It is respectfully submitted that it is simply unacceptable for a case to remain pending for three decades under any circumstances, and more so when the pendency is a consequence of the stay proceedings granted by the High Court.
29. Thereafter, vide Order dated 26.08.2010, this Court was of the view that the existing infrastructure in the High Court's and District Court's must be improved and had directed that a comprehensive exercise should be undertaken to prepare the system in which all the cases instituted in the Court are listed for hearing without undue delay and some arrangement be made for monitoring of the listing and disposal of the cases. As a pilot project, the system is to be first implemented in the Allahabad High Court.
30. Thereafter, meetings were held between the officers of NIC, the Ministry of Statistics, the Allahabad High Court and the Amicus Curiae and efforts were made to develop the comprehensive system that the Court has directed. Another Report was filed by the Amicus Curiae setting out the steps taken by the Allahabad High Court, the Central Government and also certain suggestions given by Dr. G.C. Manna, Director General, Ministry of Statistics, who had been requested to visit the High Court to interact with the officials there to see how a better system of listing and tracking cases could be developed.
31. Thereafter, vide Orders dated 14.07.2011 and 17.08.2011, this Court again called for status reports from all the High Courts as to what steps had been taken specifically in the context of this case, in order to expeditiously dispose of matters where proceedings are stayed at the stage of registration of FIR, investigation, framing of charges or trial. Status reports were furnished by some of the High Courts and reports from other High Courts were awaited.
32. Then, vide Order dated 29.09.2011, this Court observed that considering the larger issues which are involved in this case which virtually have a direct impact on administration of justice, it was fit and proper to implead the Central Government in this proceeding.
33. It is submitted that the issues being considered in this case have far reaching implications for maintaining of rule of law. Where investigation/trial is stayed for a long time, even if the stay is ultimately vacated, the subsequent investigation/trial may not be very fruitful for the simple reason, that evidence may no longer be available. Witnesses may not be able to recall the events properly, and some may have moved away or even died. Even the parties to the litigation may not survive. Unduly long delay has the effect of bringing about blatant violation of the rule of law and adverse impact on the common man's access to justice. A person's access to justice is a guaranteed fundamental right under the Constitution and particularly Article 21. Denial of this right undermines public confidence in the justice delivery system and incentivises people to look for short-cuts and other fora where they feel that justice will be done quicker. In the long run, this also weakens the justice delivery system and poses a threat to Rule of Law.
34. It may not be out of place to highlight that access to justice must not be understood in a purely quantitative dimension. Access to justice in an egalitarian democracy must be understood to mean qualitative access to justice as well. Access to justice is, therefore, much more than improving an individual's access to courts, or guaranteeing representation. It must be defined in terms of ensuring that legal and judicial outcomes are just and inequitable (See United Nations Development Programme, Access to Justice - Practice Note (2004)].
35. The present case discloses the need to reiterate that 'Access to Justice' is vital for the Rule of Law, which by implication includes the right of access to an Independent Judiciary. It is submitted that the stay of investigation or trial for significant periods of time runs counter to the principle of Rule of Law, wherein the rights and aspirations of citizens are intertwined with expeditious conclusion of matters. It is further submitted that delay in conclusion of criminal matters signifies a restriction on the right of access to justice itself, thus amounting to a violation of the citizens' rights under the Constitution, in particular under Article 21.
36. In a very important address to the Virginia Bar Association in 1908, William H. Taft observed that one reason for delay in the lower courts is the disposition of judges to wait an undue length of time in the writing of their opinions or judgments. [See William H. Taft, The Delays of the Law, Yale Law Journal. Vo1.18. No.1 (Nov., 1908), pp.28-39)]. The Judge should deliver the judgment immediately upon the close of the argument. It is almost of as much importance that the court of first instance should decide promptly as that it should decide right. It should be noted that everything which tends to prolong or delay litigation between individuals, or between individuals and State or Corporation, is a great advantage for that litigant who has the longer purse. The man whose rights are involved in the decision of the legal proceeding is much prejudiced in a fight through the courts, if his opponent is able, by reason of his means, to prolong the litigation and keep him for years out of what really belongs to him.
37. Dispatch in the decision making process by Court is one of the great expectations of the common man from the judiciary. A sense of confidence in the Courts is essential to maintain a fabric of order and liberty for a free people. Delay in disposal of cases would destroy that confidence and do incalculable damage to the society; that people would come to believe that inefficiency and delay will drain even a just judgment of its value; that people who had long been exploited in the small transactions of daily life come to believe that courts cannot vindicate their legal rights against fraud and overreaching; that people would come to believe that the law - in the larger sense cannot fulfil its primary function to protect them and their families in their homes, at their work place and on the public streets. [See Belekar Memorial Lecture Series, organized by High Court Bar Association, Nagpur. Lecture delivered on August 31, 2002]
38. Merely widening the access to justice is not enough to secure redress to the weaker sections of the community. Post Independence, it was evident that litigation in India was getting costlier and there was agonizing delay in the process. After the adoption of the Constitution and creation of a Welfare State, the urgency of some structural changes in the justice delivery system was obviously a major requirement. In the 14th Report of the Law Commission under the Chairmanship of the first Attorney General for India, Shri M.C. Setalvad, it was observed as under:-
"In so far as a person is unable to obtain access to a court of law for having his wrongs redressed.... Justice becomes unequal and laws which are meant for his protection fail in their purpose."
39. In a very important discourse Roscoe Pound argued that by responding to the doctrine of social justice, the concept of justice has advanced through various stages. [See Roscoe Pound, Social Justice and Legal Justice (Address delivered to the Allegheny County Bar Association, April 5, 1912]. At the first stage justice was equated with dispute settlement. At the second stage justice was equated with maintenance of harmony and order. In the third stage, justice was equated with individual freedom. Pound argued that a fourth stage had developed in society, but had not yet been fully reflected in the courts, and that was what Pound called 'social justice'. That is the ideal form of justice where the needs of the people are satisfied, apart from ensuring that they have freedom.
40. Despite complicated social realities, it is submitted that Rule of Law, independence of the judiciary and access to justice are conceptually interwoven. All the three bring to bear upon the quality of aspirations which are guaranteed under our Constitution. In order to fulfil the aspiration, it is important that the system must be a successful legal and judicial system. This would involve improvement of better techniques to manage courts more efficiently, cutting down costs and duration of proceedings and to ensure that there is no corruption in the judiciary and the establishment of the judiciary and would also require regular judicial training and updating.
41. The memorable words of Lord Devlin (as quoted by D.M. Dharmadhikari, J.) are pertinent to note:
"... The prestige of the judiciary and their reputation for stark impartiality is not at the disposal of any government; it is an asset that belongs to the whole nation ... "
[See Justice D.M. Dharmadhikari, Nature of Judicial Process, (2002) 6 SCC (Jour) 1.
42. Under the principle of the Rule of Law, adequate protection of the law must be given to all persons and to give meaning to it, there must exist an unimpeded right of access to justice. In the 'Words of Lord Bingham:
"It would seem to be an obvious implication of the principle that everyone is bound by and entitled to the protection of law that people should be able, in the last resort, to go to court to have their civil rights and claims determined. An unenforceable right or claim is a thing of little value to anyone."
[See Tom Bingham, The Rule of Law, p. 85]
43. The right of access to justice has been recognised as one of the fundamental and basic human rights in various international covenants and charters.[See Article 14(3) of the International Covenant on Civil and Political Rights (ICCPR)]
44. The right of access to justice is also recognised under Article 67 of the Statute of the International Criminal Court (Rome Statute).
45. In the context of the European Union, Article 47 of the European Charter on Fundamental Rights provides for the right to an effective remedy and to fair trial. With respect to the Council of Europe, the European Convention on Human Rights and Fundamental Freedoms, Article 6 significantly protects this right to access justice.
46. The European Court of Human Rights has held that a broader interpretation must be given to Article 6(1) of the ECHR laying emphasis on 'right to a fair administration of justice' in the case of Delcourt v. Belgium.
"...In a democratic society within the meaning of the Convention, the right to a fair administration of justice hold such a prominent place that a restrictive interpretation of Article 6(1) would not correspond to the aim and purpose of that provision."
[See [1970] ECHR 1.]
47. Article 8 of the Universal Declaration of Human Rights provides that:
"Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law."
48. Article 16 of the Principles of Freedom from Arbitrary Arrest and Detention provides that:
"To ensure that no person shall be denied the possibility of obtaining provisional release on account of lack of means, other forms of provisional release than upon financial security shall be provided."
49. The principle of 'Access to Justice or Courts' is recognized as a right in South Africa's Constitution as well:
"Access to Courts.
34. Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum."
50. The learned Amicus urged that having regard to the paramount importance of the right to access, the Court which he argues is a basic fundamental right specially the Central Government and the State Governments have a duty to ensure speedy disposal of cases for proper maintenance of rule of law and for sustaining peoples' faith in the judicial system. He further argued that with the present infrastructure it is not possible for Courts, whether it is District Courts or the State High Courts or this Court to effectively dispose of cases by just and fair orders within a reasonable timeframe. The learned Amicus also urged that the problem is huge and the considerations are momentous. To understand the magnitude of the problem, the Government must appoint a permanent commission to make continuous recommendation on measures which are necessary to streamline the existing justice delivery system. In support of his submission, he referred to the Report of Lord Woolf submitted to Lord Chancellor in England:
"...It will not only assist in streamlining and improving our existing systems and process; it is also likely, in due course, itself to be a catalyst for radical change as well..."
[Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (Lord Woolf's Report), 1996, Chapter 21, para 1]
51. The learned Amicus submitted that this huge pendency of cases operates as a burden on the mindset of a Judge. He submitted rightly that the inner charter of the judge is constantly under a pressure to somehow decide the case and the quality of justice suffers. Therefore, according to him, it is the constitutional duty of both the Central Government and the State Government to provide adequate infrastructure to the judiciary and only an independent commission which functions on a permanent basis can assess the necessity of the required infrastructure and make recommendations to the Government for providing necessary steps which the Government should take to make the Constitutional promise of justice a reality. The learned Amicus developed his argument by referring to various decisions of this Court and also various provisions of the Constitution. He further submitted that the plea of the Government that in view of financial crunch it cannot provide the necessary infrastructure cannot be countenanced by this Court and in support of the said submission he referred to the decision of this Court in the case of R. Ramachandra Rav v. State of Karnataka, reported in (2002) 4 SCC 578. The relevant observations made in the said judgment are as follows:-
"...The law does not permit any government to deprive its citizens of constitutional rights on a plea of poverty or administrative inability..."
52. As the Central Government has been impleaded in this proceeding it was represented by Mr. Harin P. Raval, the learned ASG.
53. The learned ASG very fairly submitted that the questions debated in this case, by and large, are not adversarial. The learned ASG submitted that the Government also accepts that right of access to Court is a fundamental and constitutional right. The learned ASG also accepted that if right to access justice is denied to the citizens then most of the rights given under the Constitution virtually become a rope of sand. The learned ASG submitted that the Government is aware of the importance of these rights and are taking several steps to make these rights vibrant. In the counter affidavit, which has been filed by the Under Secretary, Ministry of Law and Justice dated 9.1.2012 several steps which have been taken by the Government to ensure speedy justice and to reduce delay are as follows:-
I. Appointment of Court Managers in High Courts and Sub-ordinate Courts.
II. Vision Statement and Action Plan adopted by the National Consultation for Strengthening the Judiciary towards Reducing Pendency and Delays.
III. To prepare National Arrear Grid
IV. National Mission for Justice Delivery and Legal Reforms.
V. National and State Legal Service Authorities constituted under Legal Service Authorities Act, 1987. VI. National Court Management System (as proposed by Hon'ble Chief Justice of India).
54. The learned ASG referred to the agenda notes and the minutes of the meeting of the Advisory Council of the National Commission for Justice Delivery and Legal Reforms. He submitted that the National Mission spanning from 2011 to 2016 would focus on two major goals envisaged in the Vision document, namely, (i) increasing access by reducing delays and arrears in the system, and (ii) enhancing accountability through structural changes and by setting performance standards and capacities.
55. It was also pointed out that the tentative action plan covers five strategic initiatives and one of them is improving infrastructure of the District and Subordinate Courts and creation of special and additional courts like morning and evening courts etc. He referred to various pages of the Meeting of the Advisory Council of the National Mission held on 18.10.2011 in Vigyan Bhawan, New Delhi to show that the Government is aware of the problem and is seeking to address the same. However, in the course of his arguments the learned ASG took the leave of this Court and filed another affidavit dated 18.1.2012 by Dr. S.S. Chahar, Joint Secretary and Legal Advisor, Ministry of Law and Justice.
56. By filing the said affidavit the learned ASG wanted to urge before this Court that even though the Government is aware of the urgency of the problem and the immediate necessity of addressing it, Government is not willing to accept the suggestion of the learned Amicus for setting-up of a permanent commission for the purposes suggested by the learned Amicus.
57. The learned ASG on the other hand submitted in view of the stand taken by the Central Government in its affidavit dated 18.1.2012 that the existing terms of reference of the 19th Law Commission are wide enough to include within its ambit the question of setting up additional courts for the purpose of tackling the arrears so that access to justice is ensured. In this connection, he referred to the terms of reference of the 19th Law Commission. The said terms of reference are as follows:-
"A. Review/Repeal of obsolete laws:
i. To identify laws which are no longer needed or relevant and can be immediately repealed.
ii. To identify laws which are in harmony with the existing climate of economic liberalization which need no change.
iii. To identify laws which require changes or amendments and to make suggestions for their amendment.
iv. To consider in a wider perspective the suggestions for revision/amendment given by Expert Groups in various Ministries/Departments with a view to coordinating and harmonizing them.
v. To consider references made to it by Ministries/Departments in respect of legislation having bearing on the working of more than one Ministry/Department.
vi. To suggest suitable measures for quick redressal of citizens grievances, in the field of law.
B. Law and Poverty
i. To examine the Law which affect the poor and carry out post-audit for socio-economic legislation.
ii. To take all such measures as may be necessary to harness law and the legal process in the service of the poor.
C. To keep under review the system of judicial administration to ensure that it is responsive to the reasonable demands of the times and in particular to secure: -
i. Elimination of delays, speedy clearance of arrears and reduction in costs so as to secure quick and economical disposal of cases without affecting the cardinal principle that decisions should be just and fair.
ii. Simplification of procedure to reduce and eliminate technicalities and devices for delay so that it operates not as an end in itself but as a means of achieving justice.
iii. Improvement of standards of all concerned with the administration of justice.
D. To examine the existing laws in the light of Directive Principles of State Policy and to suggest ways of improvement and reform and also to suggest such legislation as might be necessary to implement the Directive Principles and to attain the objective set out in the Preamble to the Constitution.
E. To examine the existing laws with a view to promoting gender equality and suggesting amendments thereto. F. To revise the Central Acts of General Importance so as to simplify them and to remove anomalies, ambiguities and inequities.
G. To recommend to the Government measure for bringing the statute book up-to-date by repealing obsolete laws and enactments or parts thereof which have outlived their utility.
H. To consider and to convey to the Government its views on any subject relating to law and judicial administration that may be referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs).
I. To consider the requests for providing research to any foreign countries as may be referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs).
J. To examine the impact of globalization on food security, unemployment and recommend measures for the protection of the interests of the marginalized.
The Commission shall devote, its time bound attention to all issues relating to item (A) of the terms of reference as indicated above, viz., review/repeal of obsolete laws and shall make its recommendations to Government for repeal of obsolete laws and for appropriate amendments in others as may be found necessary ON TOP PRIORITY basis.
The Commission shall submit its reports in Hindi and English with sufficient number of copies for being placed on Tables of both houses of Parliament. The Law Commission shall also make its reports available through website or otherwise as soon as reports are submitted to the Government.
Various Law Commissions have given about 234 Reports so far. Many of them are made available on the website of Law Commission. Since many of the Reports are voluminous it will be difficult for researchers to read entire Report online. To facilitate the researchers to choose the topics of their area and to create awareness amongst Judges, Lawyers, Law Teachers and Students on the various recommendations of the Law Commission, a brief summary of all the Reports of the Law Commission shall be made available by the Law Commission, online."
58. The learned ASG submitted that in view of Clause `H' of the terms of reference of the 19th Law Commission, the present Law Commission can go into the question of making a proper research and a scientific and empirical study to assess the requirement of setting up additional courts and making available additional infrastructures for ensuring free access to court and speedier disposal of cases. The learned ASG submitted that the pendency of cases cannot be tackled by only setting up additional courts. Various other factors are also involved including the cooperation of the members of the Bar, the quality of legal education, policy of legislation, recruitment of quality manpower and such other issues which the Law Commission should urgently address and make recommendations on.
59. The learned ASG also submitted that having regard to the provision of Article 235 of the Constitution the control over district and subordinate courts rests with the respective High Courts in each State. In assessing the requirement of setting up of additional courts and creating additional benches, the opinion of the High Court and the State Government have to be ascertained including the question of budget allocation to each State Government. The learned ASG also submitted that since the Government is keenly interested to address these problems it is open to any suggestion. It was submitted that any direction from this Court will help the Government and the Law Commission to tackle this problem in a very effective way.
60. The Court, upon a detailed and very anxious consideration of the aforesaid issues and specially huge pendency of arrears in different High Courts and considering the stand of the Central Government in its affidavit dated 18.1.2012 is giving the following directions.
I. Certain directions are given to the High Courts for better maintenance of the Rule of Law and better administration of justice:
While analyzing the data in aggregated form, this Court cannot overlook the most important factor in the administration of justice. The authority of the High Court to order stay of investigation pursuant to lodging of FIR, or trial in deserving cases is unquestionable. But this Court is of the view that the exercise of this authority carries with it the responsibility to expeditiously dispose of the case. The power to grant stay of investigation and trial is a very extraordinary power given to High Courts and the same power is to be exercised sparingly only to prevent an abuse of the process and to promote the ends of justice. It is therefore clear that:
(i) such an extraordinary power has to be exercised with due caution and circumspection.
(ii) Once such a power is exercised, High Court should not lose sight of the case where it has exercised its extraordinary power of staying investigation and trial.
(iii) High Court should make it a point of finally disposing of such proceedings as early as possible but preferably within six months from the date the stay order is issued.
61. It is true that this Court has no power of superintendence over High Court as the High Court has over District Courts under Article 227 of the Constitution. Like this Court, High Court is equally a Superior Court of Record with plenary jurisdiction. Under our Constitution High Court is not a Court subordinate to this Court. This Court, however, enjoys appellate powers over High Court as also some other incidental powers. But as the last court and in exercise of this Court's power to do complete justice which includes within it the power to improve the administration of justice in public interest, this Court gives the aforesaid guidelines for sustaining common man's faith in the rule of law and the justice delivery system, both being inextricably linked.
II. Certain directions are also given to the Law Commission which are as follows:
a) Since the Law Commission itself is seized with the problem and is making investigation having regard to its terms of reference specially clause `H', thereof, this Court requests the Law Commission, which is headed by a distinguished retired judge of this Court, to undertake an enquiry and submit its recommendation in relation to the following matters:-
I. Keeping in view that timely justice is an important facet to access to justice, the immediate measures that need to be taken by way of creation of additional courts and other allied matters (including a rational and scientific definition of "arrears" and delay, of which continued notice needs to be taken), to help in elimination of delays, speedy clearance of arrears and reduction in costs. It is trite to add that the qualitative component of justice must not be lowered or compromised; and
II. Specific recommendations whenever considered necessary on the above aspects in relation to each State be made as a product of consultative processes involving the High Courts and other stake holders, including the Bar.
b) In doing so, the Commission may take such assistance from the Central Government and the State Governments as it thinks fit and proper.
c) Accordingly, it is directed that on the Commission's request for assistance both the Central Government and the State Governments shall render all possible assistance to the Commission to enable it to discharge its functions, as directed by this Court in its order. The Commission shall at the discretion of its Chairman be free to co-opt purposes of the enquiry to be undertaken by it. Such legal & technical, experts as may be considered necessary by it for an effective and early completion of the assignment hereby made.
d) The Commission is requested to submit its report within six months from the date of this order.
e) Such recommendations be sent to the Registrar General of this Court in sealed covers.
62. The matter may appear before the appropriate Bench after being nominated by the Hon'ble the Chief Justice on the 7th August, 2012 for further consideration by this Court of the recommendations by the Law Commission and if necessary for further directions to be passed in these appeals.
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Supreme Court of India: State of Gujarat & others vs Essar Oil Ltd & another
In this important decision of the Supreme Court of India, it has been held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish this clearly and in case of doubt or ambiguity, the benefit of it must go to the State.
SUPREME COURT OF INDIA
Hon'ble Mr. Justice Asok Kumar Ganguly and Hon'ble Mr. Justice Jagdish Singh Khehar
State of Gujarat & Others Appellant(s)
versus
Essar Oil Ltd. & Another Respondent(s)
Case No: Civil Appeal No(s). 599 of 2012
Date of Decision: 17 January 2012
JUDGEMENT
Altamas Kabir, J. :- Leave granted.
2. This appeal is directed against the judgment of the High Court of Gujarat dated 22.04.2008 in Special Civil Application No.24233/2007, whereby the Respondent No. 1 herein, Essar Oil Limited (hereinafter "Essar") was given the benefit of Sales Tax incentive under the Government of Gujarat "Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000" (hereinafter "the said Scheme")
3. The State Government in the Industries and Mines Department vide Resolution dated 11.09.1995 introduced the said scheme to accelerate development of the backward area of the State and to create large-scale employment opportunities.
4. The operative period of the said scheme was from 16.08.1995 upto 15.08.2000, during which new units have to go into commercial production.
5. The Scheme envisaged grant of Sales Tax incentives by way of Sales Tax Exemption or Sales Tax Deferment or Composite Schemes, for Premier/Prestigious Units according to the location, investment and status of the project. Essar fell in the category of premier unit i.e. new industrial unit having a project cost of more than Rs.1,000/- crores and employing 100 workers on a regular basis and following the employment policy of the State Government. Clause (v) of the Scheme defined premier unit in the following terms:-
"(v) PREMIER UNIT
A new industrial unit or industrial complex fulfilling the following criteria will be considered for granting status of a "Premier Unit".
(a) The industrial unit shall have a project cost of Rs.500 crores or more. Such units having project cost of Rs.1,000 crores and above shall be entitled for extended period to avail incentive as provided under para 6 B.
(b) Only one unit per taluka will be eligible for the Premier Unit status. In banned area no unit is permitted.
(c) The unit shall employ at least 100 workers on a regular basis and shall follow the employment policy of the State Government."
6. Part II of the said Scheme provided that the rate of incentive would depend on the location, investment and status of the project. The incentives offered were sales-tax exemption or sales-tax deferment or composite scheme. There is no dispute about the fact that Essar opted for sales-tax deferment scheme. As per clause 6(i)(B), the rate of incentive applicable to Essar was the rate available for the most backward area. The extent of exemption was 125% of eligible fixed capital investment.
7. Part II Clause (iii) (b) provided that Under the Sales Tax Deferment incentive scheme, the recovery of sales tax connected by the unit on sale of goods manufactured by it including intermediate products, by products and scrap/waste generated as incidental to manufacturing activities and turnover tax, leviable to Government will be deferred and amount so deferred will be recovered in six equal annual installments by Sales Tax Department beginning from the financial year subsequent to the year in which the unit exhausts limit of incentive granted to it under the scheme or after the expiry of relevant period or time limit during which deferment is available or whichever is earlier.
8. Since Essar's investment was going to be more than Rs.1,000 crores, the duration of incentive of sales-tax deferment was to be for a period of 17 years from the date of commercial production.
9. Clause 6(v) of the said Scheme provided for effective steps for extending date of commercial production in the following terms :
"6(v) Effective steps for extending date of commercial production :
The unit which cannot go into commercial production before expiry of the scheme will be allowed to go into commercial production beyond the last date of the scheme provided it has taken the following effective steps:
(1) The industrial unit should have obtained provisional registration as a Prestigious/Premier unit before 15th August 2000.
(2) 25% of project cost should have been incurred before 15th August 2000. The unit which has taken above effective steps will be allowed to go into commercial production as shown below:
(a) The unit with project cost above Rs.100 crores but below Rs.300 crores should go into commercial production on or before 15th August 2002.
(b) The unit with project cost more than Rs.300 crores should go into commercial production on or before 15th February 2003. Such units shall have to apply to industries Commissioner for extending date of commercial production by 31st August 2000."
10. A High Power State Level Committee (hereinafter "HPSLC") was the Sanctioning Authority for granting permanent registration of all the Prestigious/Premier Units
11.Part III provides the procedure for Registration for Premier/Prestigious Status, the relevant clause of the said Part in respect of instant case is set out below:
"An Industrial unit eligible for Prestigious/Premier status under the scheme will apply to Industries Commissioner in prescribed form before expiry of the scheme along with details of following effective steps.
i) Possession of plot or shed in GIDC Estate. For units located outside GIDC Estate, the unit must be in legal possession of land with valid non-agricultural use permission of industrial use or as per Revenue Act as modified from time to time.
ii) The Letter of intent/Letter of Approval or Registration/ obtained receipt against filling of IEM to the appropriate authority.
iii) NOC of GPCB (Gujarat Pollution Control Board)
iv) Detailed Project Report.
The following procedure will be adopted for granting the temporary and permanent Prestigious/Premier registration.
(a) The Industries Commissioner shall give provisional registration to the eligible prestigious/premier unit after approval of committee where applicable.
(b) The eligible unit after completion of project will apply to Industries Commissioner for permanent prestigious/premier registration, Industries Commissioner will carryout the assets verification and submit a verification report to the High Power State Level Committee, for granting permanent registration."
12. Some relevant facts which arose prior to the floating of the Scheme and which are necessary for appreciating the said Scheme, as contended by Essar and which the records also shows, are as under.
13. Essar was encouraged by the State Government to set up a major venture at Vadinar in Jamnagar District of Gujarat as a 100% export oriented unit for refining of petroleum products with a capacity of 9 Million Tons per annum at an estimated project cost of Rs. 1900 crores in collaboration with M/s Bechtel Inc., USA.
14. By letter dated 11th April, 1990, the then Chief Minister of the State of Gujarat wrote to the Ministry of Planning, Government of India, stating that the project was expected to generate foreign exchange earnings of over Rs.3000 crores within a period of 5 years and that it was expected to be set up in 36 months. It was anticipated by the State Government that the project would "completely change the face of the Vadinar area, which is traditionally a backward area of Gujarat offering direct and indirect employment and will encourage growth of various other ancillary industries in that region". The letter further said that the project had the full support of the Government of Gujarat and it was being accorded highest priority and that Essar's proposal for setting up the oil refinery should be cleared by the Government of India urgently. The clearance for setting up the oil refinery was then granted by the Government of India.
15.In January, 1993, Essar applied to the Gujarat Pollution Control Board (GPCB) for grant of a `No Objection Certificate' to establish the refinery for manufacturing several kinds of petroleum products. By letter dated 15th February, 1993, the GPCB stated that it had no objection from the Environmental Pollution potential point of view in the setting up of the refinery project subject to certain environmental pollution control measures to be taken by the appellant. Essar's proposal regarding the environmental pollution control system was approved by the GPCB on 17th April, 1993 and a Site Clearance Certificate was issued on that date.
16. On 10.11.1994, Essar filed an application for right of way over 15.49 hectares of forest land for laying Submarine Crude Oil Pipeline, Cooling Water/Return Water Pipeline and Product Jetty for establishment of its Refinery Project at Vadinar, District Jamnagar, to the Conservator of Forests, Marine National Park, Jamnagar. Undisputedly, 15.49 hectares of forest land applied for includes 8.79 hectares of Jamnagar Marine National Park and Sanctuary. Therefore, permission under Section 2 of the Forest Conservation Act ("FCA") was required for the entire 15.49 hectares. At the same time, permission of State Government was required under the Wildlife Protection Act ("WPA") for 8.79 hectares.
17. On 13.02.1995, the State Government requested the Chief Conservator of Forests, Regional Office, Western Region, Bhopal, to move the Government of India to issue suitable orders to allow Essar to make geophysical survey in Marine National Park/Sanctuary area. The proposal was forwarded by the Chief Conservator of Forests, Bhopal to the Government of India on 15.05.1995.
18. The Conservator of Forests recommended and forwarded the proposal of Essar for Right of Way to the Chief Conservator of Forests (WL) by letter dated 2nd June, 1995 along with an application in the prescribed form seeking prior approval from the Central Government under Section 2 of FCA. The application with its enclosures together with the recommendation of the State Government that 15.49 hectares of forest land be made available to the appellant, was forwarded to the Central Government by the Central Chief Conservator of Forests on 3rd February, 1997. Upon receipt of the proposal of the State Government, the Central Government constituted a team for joint inspection of the area. The report of the joint inspection team was that the proposed activity of the appellant would not have much ramification from the forestry point of view and the damage would only be temporary in nature in a localized area during the construction phase.
19. On 08.09.1995, the State Government in its Forests and Environment Department informed the Government of India in the Ministry of Environment and Forests, inter alia, that the approval "in principle" was granted to Essar to install Single Buoy Mooring / Crude Oil Terminal / Jetty and connecting pipeline in the National Marine Park and Sanctuary area in Vadinar, District Jamnagar on the terms and conditions to be decided in due course by the State Government.
20. On 11.09.1995 the said Scheme was announced and thereafter on 01.02.1996 Essar applied in the new format to the Industries Commissioner, Gandhinagar for registering the Industrial Undertaking as a "Premier/Prestigious Unit" under the said Scheme.21.On 29.05.1996 the Forest and Environment Department, State of Gujarat made a proposal to Government of India seeking approval under Section 2 of FCA for diversion of 15.49 hectares of forest land for construction and operation of certain offshore and onshore facilities for a grass root refinery project of Essar.
22. On the basis of the letter-dated 30.09.1997 of the Principal Chief Conservator of Forests, the State Government conveyed on 16.10.1997 its permission under section 29 of WPA to Essar's proposal of right to way through the National Park and Sanctuary subject to Essar's compliance with certain terms and conditions including obtaining permission of the Central Government under the FCA, 1980 (which was granted on 08.12.1999, mentioned later) and also getting clearance under the Coastal Regulation Zone (CRZ) Regulations, which was granted on 03.11.2000.
23. This permission was conveyed to Essar by the Conservator of Forests under cover of his letter-dated 18.10.1997. The permission was, however, restricted to the Kandla Port Trust area. Kandla Port Trust granted permission to Essar to install "marine facilities" on 10.10.1997.
24. On 27.11.1997 the Ministry of Environment & Forest, Government of India granted "in-principle" approval to Essar under FCA, 1980 for diverting 15.49 hectares of forest land for non-forest purpose.
25.On 25.06.1999 Essar was issued the provisional Premier Registration Certificate by the Industries Commissioner. The provisional certificate was valid upto 15.08.2000 i.e. the last date of Scheme, within this time period Essar was obliged to start commercial production, failing which Essar would have to apply for extension of date of commercial production.
26. In the meantime in view of the permissions granted to install "marine facilities", Essar started construction work of laying of water in-take jetty and product jetty in the forest area of Marine National Park and Marine Sanctuary. Essar's grievances are that despite the aforesaid permissions being given to them for construction, the State Forest Department forced Essar to stop work and further lodged on 19.3.1999 a criminal complaint against Essar and its contractor, for offence committed under sections 17(A), 29, 35(6), 51(1) and 58 of the WPA and section 26 of the Indian Forests Act.
27. In April 1999, a writ petition being Special Civil Application No.2840/1999 in the nature of Public Interest Litigation was filed before the High Court of Gujarat by one Halar Utkarsh Samiti (hereinafter "Samiti") alleging serious violations of several environmental legislations on the part of Essar, who was impleaded as Respondent No.4 in the petition.
28. By interim order-dated 20.04.1999 passed in that PIL High Court directed Essar not to carry on any construction activity in the Marine National Sanctuary and Marine National Park in violation of the statutory provisions including the provisions contained in Wild life (Protection) Act, 1972.
29. By order-dated 20.08.1999 the High Court disposed of the said PIL in which Essar undertook to file an Undertaking to the effect that they would not carry out any construction activities at the site in question, without obtaining the approval from the authorities. Pursuant to the said order, on 28.09.1999 Essar filed an undertaking to the following effect:
"...no construction activities or marine facilities will be undertaken without obtaining the approval from the authorities including those which are under process before the authorities.
This undertaking is given without prejudice to the rights and contentions of the Respondent No.4.
This undertaking will come to an end as and when the permission is granted by the authorities."
30. In the meantime on 09.09.1999, a charge sheet was filed against the officers of Essar and its contractor in respect of earlier mentioned offences allegedly committed by them under the WPA and FCA.
31. On 08.12.1999 the Ministry of Environment and Forest, Government of India granted approval under section 2 of the FCA for the total land of 15.49 hectares of forest land.
32. In April 2000, said Samiti filed another PIL being Special Civil Application No.1778, and subsequently two other PILs were also filed by one Jan Sangarsh Manch and one Shri Alpesh Y. Kogje, being Civil Application Nos.5476 and 5928 of 2000, (hereinafter "second PILs") in the High Court of Gujarat challenging, inter alia, the permission granted by the State Government to one Bharat Oman Refineries Ltd. (`BORL') to lay pipeline in the Marine National Park and Sanctuary Area. It is pertinent to note here that Essar was not a party to these petitions.
33. On 29.04.2000 the Government of Gujarat discontinued the said Scheme with effect from 01.01.2000. However, vide the same Government Resolution dated 29.04.2000, it was specifically mentioned that industry units in pipelines cases which have been registered should start production within two years from January 1, 2000 failing which such units shall be rendered ineligible for sales tax incentive. Therefore, the time to start commercial production was thus extended to 01.01.2002. It is common ground that Essar, being a registered unit, was entitled to the benefit of the said extension.
34. Before the High Court, when proceedings in respect of the second PILs were going on, the counsel of Government of Gujarat placed a copy of the letter-dated 25.07.2000. Relying on the letter, the High Court noted that there were two more pending proposals for laying pipeline in the Marine Park/Sanctuary Area with the State Government - one from Essar and the other from one Gujarat Poshitra Port Ltd.
35. Before the High Court, the State Government submitted that the proposal from Essar for laying down pipelines in Marine National Park and Marine Sanctuary, Vadinar in Jamnagar District has been only approved `in principle' vide letter-dated 08.09.1995. However, formal sanction under section 29 of the WPA, 1972 is yet to be given by the State Government.
36. By judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 the High Court, in the second PILs, restrained the Government of Gujarat from granting any more authorization and permission for laying down any pipeline in any part of the sanctuary or the national park. As a result of this order, Essar was not given permission to lay down pipelines by the State Government.
37. Being aggrieved, inter alia, on the ground that it was not a party to the second PILs, Essar filed a review/recall application before the High Court being MCA No.250 of 2011 in SCA No.1778 of 2000, inter alia, seeking review and recall of the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 passed in the second PILs by the High Court and a further declaration to the effect that Essar's project at Vadinar was not affected in any manner by the said judgment.
38. By judgment and order dated 23.02.2001 the High Court rejected the said application for review on the ground that there was a factual controversy between Essar and the State Government and that therefore the grievance of Essar was beyond the scope of review.
39. Meanwhile, on 12.04.2001 the Government of Gujarat extended the time for going into commercial production upto 15.08.2003 for various pipeline units including Essar, vide Government Resolution dated 12.04.2001. By that time Essar had obtained Provisional Premier Unit Registration before 15.08.2000 and had also incurred 25% of the Project Cost before 15.08.2000 and therefore, it was entitled to the benefit of this extension.
40. Essar challenged the aforesaid judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000, 03.08.2000 and 23.02.2001 of the High Court delivered in the second PILs and the rejection of its review petition in that second PILs respectively by way of filing Special Level Petition being (SLP) CC No.3654 of 2001 [later SLP No.9454-9455 of 2001] before this Hon'ble Court.
41. By interim order-dated 11.05.2001 this Court granted stay of the judgment of the High Court in so far as Essar was concerned in SLP No.9454-9455 of 2001 i.e. SLP filed by Essar. The text of the order of this Court is set out:
"Permission to file Special Leave Petition is granted.
Issue notice.
Stay of the High Court judgment in so far as the petitioner is concerned.
Counter affidavit be filed within four weeks. Rejoinder be filed within four weeks thereafter. List after eight weeks."
42. In view of the above stay order granted by this Court, Essar moved the State Government for permitting it to proceed with the construction of jetty and laying the pipeline. By letter dated 29.10.2001, the State Government in the Forests and Environment Department specifically called Essar to ensure that no construction activities were commenced before obtaining all necessary clearances from different Government departments, agencies and the conditions stipulated by the Ministry of Environment and Forests, Government of India as well as the Forests and Environment Department of the State Government were strictly complied with. However, Essar did not commence the construction of jetty or laying down the pipeline in the National Marine Park/Sanctuary area. One thing which is of some importance is that despite the stay of this Court and the Government letter dated 29.10.2001, Essar did not challenge the Government stand in the pending special leave petition filed by it in this Court.
43. It is also pertinent to note that the Government of Gujarat had also challenged the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court passed in the second PILs by way of filing Special Leave Petition being (SLP) CC No.5123-5125 of 2001 (later SLP No.17694-96 of 2001) before this Court, wherein by interim order dated 24.09.2001 this Court passed the following operative order:
"Issue notice.
Tag with SLP(C) 9454-9455/2001.
There will be status quo as of today with the result that any permission which has been granted is not stayed. It will be open to the State Government to consider the granting of further permission which will be subject to the outcome of this appeal."
44. Essar just requested by its letter dated 11.04.2002 the Industries Commissioner to extend the date of commercial production to 30.11.2004 instead of 15.08.2003 for the purpose of availing the incentive benefit under the Scheme and cited that the delay in completing the project and consequent delay in starting commercial production was due to the factors beyond the control of Essar. Further by letter-dated 07.05.2002 Essar in continuation of the letter-dated 11.04.2002 requested the Industries Commissioner to extend the date of commercial production to August 2006.
45. The Industries Commissioner refused to grant any further extension of time vide its letter-dated 28.05.2002 and also made it clear to Essar to go into commercial production within the specified time i.e. till 15.08.2003. Essar, therefore, submitted a representation dated 19.06.2002 to the Chief Minister pointing out the circumstances which had delayed the completion of the project. Similar representations were thereafter made to different authorities of the State Government on 27.06.2002, 14.03.2003, 30.07.2003, 02.12.2003 and 26.12.2003. It appears that the said representations were not responded to.
46. By an order-dated 19.01.2004, this Court quashed and set aside the judgment dated 03.08.2000 of High Court and directed the State Government to issue the authorization to Essar in the requisite format under Sections 29 and 35 of the Wild Life (Protection) Act within a fortnight after disapproving the interpretation placed by the High Court on the provisions of the Wild Life (Protection) Act, 1972. This Court took the view that the permission granted by the State Government on 16.10.1997 was the permission contemplated by Section 29 of the Wild Life (Protection) Act.
47. In compliance with the above judgment, by letter dated 12.02.2004, the State Government authorized the Chief Wild Life Warden, Gujarat State under Sections 29 and 35 (6) of the Wild Life (Protection) Act to permit Essar for laying oil pipeline in the National Marine Park/Sanctuary area. The Chief Wild Life Warden also issued the requisite permission on 27.02.2004.
48. In the meantime, the accused i.e. officials and contractors of Essar involved in the Criminal Case of 1999 moved an application for discharge before the Metropolitan Magistrate at Khambalia. By order-dated 27.05.2004 the Magistrate allowed the said application and discharged the accused persons from all the charges levelled against them.
49. In view of the above permission granted by the Chief Wild Life Warden under Sections 29 and 35 of the Wild Life (Protection) Act, Essar again sent representations dated 06.04.2004, 12.07.2004, 27.07.2004 and 22.12.2004 to the Government requesting extension of time limit for commencement of commercial production for the purpose of sales tax deferment incentive scheme. In view of the above representations, the State Government in the Industries and Mines Department vide Resolution dated 10.05.2006 constituted a Committee comprising of the Advisor to the Chief Minister, the then Additional Chief Secretary, Finance Department and the then Principal Secretary, Industries and Mines department. The Committee was constituted to consider various such representations of Essar and other Companies.
50. On 26.11.2006 Essar commenced commercial production and started paying sales tax on the products sold by it, under protest.
51.As nothing was heard from the said Committee constituted in the year 2006 and the representations made by Essar in respect of granting Sales Tax Deferment were undecided, Essar filed a writ petition being Special Civil Application No. 24233/2007 before the High Court contending that for no fault of it, Essar was prevented from completing the project and that it was on account of being so prevented, Essar could not commence the commercial production within the time limit of 15.08.2003.
52. It is pertinent to note at this stage that before the High Court, Essar had expressly withdrawn the allegation that Department of Forest and Conservation, Government of Gujarat was guilty of delay. This is noted in para 6.2 of the High Court judgment which is set out below:
"6.2 While in the memo of the petition some allegations/submissions have been made attributing the delay to the Forests and Conservation Department of State Government, but the petitioner Company is not interested in pursuing those allegations and in fact would like to withdraw those allegations and the petitioner would like to invoke the following maxims of equity:-
(i) "An act of the Court shall prejudice no man", and
(ii) "The law does not compel a man to do that which he cannot possibly perform."
53. Before the High Court Essar contended that reason for delay in commencement of commercial production was on account of the injunction granted by the High Court on 13.07.2000/03.08.2000, restraining the State from granting further permission under Section 29 of the WPA in the second PILs (where Essar was not a party). And this situation continued till 27.02.2004, when pursuant to the judgment-dated 19.01.2004 of this Court the Chief Warden granted the said permission. Therefore Essar was entitled to get benefit of the exclusion of the said intervening period of from 13.07.2000 to 27.02.2004 i.e. three years and 230 days in calculating the time limit for commencement of commercial production.
54. By impugned order-dated 22.04.2008 the High Court excluded the aforesaid intervening period and as such extended the time limit for commencement of commercial production from 15.08.2003 to 02.04.2007 after observing in the impugned judgment as under:
"17. ...In the facts of the present case also, the State Government had granted the permission on 16.10.1997 and the Central Government had granted the permission on 08.12.1999. The very fact that the Chief Wild Life Warden issued the permission on 27.02.2004 after the decision of the Apex Court on 19.01.2004 is itself sufficient to show that the request made by the petitioner for excluding the intervening period between 13th July/3rd August, 2000 and 27.02.2004 is reasonable."
55. It is also pertinent to note herein that in the impugned order, a direction was given to the State Government that while considering Essar's application for the incentives, the State Government shall stipulate the following conditions, provided the final eligibility certificate is issued within one month from the date of receipt of the judgment:-
"22. ...
(i) The petitioner shall not be given the benefit of deferment of Sales-tax/Value Added Tax beyond 14th August, 2020.
(ii) The amount of Sales-tax/VAT already paid/payable by the petitioner for the period upto today shall not be refunded to the petitioner.
(The above amount is stated by the petitioner company to be above Rs.300 crores)
(iii) Without adjusting the Sales-tax/VAT paid for the period upto today as aforesaid, the amount otherwise computable under the Incentive Scheme on the basis of the eligible capital investment made by the petitioner in the unit under consideration shall be reduced by Rs.700 crores."
56. The above direction is based on the submissions of the counsel of both the parties, which were made without prejudice to their respective cases. The counsel of Essar submitted a proposal that Essar was ready to make the above mentioned concessions no. (i) & (ii) if the State Government does not challenge the decision of the High Court and within one month from that day the State Government grants Essar the benefit of the Sales Tax/VAT deferment as per the said scheme. In response to the said proposal the learned counsel for the State Government replied that assuming that Essar was found to be eligible under the said Scheme, the amount otherwise computable under the Incentive Scheme on the basis of the eligible capital investment made by Essar in the unit under consideration shall be reduced by Rs.700 crores.
57. The learned counsel for the respondents made an attempt to urge that the judgment of the High Court was virtually rendered by way of a concession and the impugned judgment is a consent order. As such the appeal, at the instance of the State, is not maintainable. Learned counsel for the State strongly opposed this contention and submitted that the same contention was raised at the time of admission of the special leave petition. Then, further affidavit was filed by the State with the leave of the Court. The Court was satisfied and then issued notice.
58. Ultimately, the matter was argued on merits before this Court and it was common ground that the impugned judgment is not by consent.
59. The impugned judgment of the High Court is based on two basic line of reasoning that the respondents are entitled to the benefit of Sales Tax Waiver Scheme firstly on the principle of restitution and secondly, that the respondents cannot be made to lose the benefit under the Sales Tax Waiver Scheme, for an act of Court. In this regard it has been urged that the respondents could not set up the plant for the purpose of commercial production within 15th August, 2003 as it was prevented from doing so by an order of injunction of the High Court. An order of injunction is an act of Court and an act of High Court cannot prejudice anyone. The loss of time suffered by the respondent as a result of the injunction order cannot cause any prejudice to the respondent.
60. Examining the aforesaid two contentions, this Court finds that there is an overlapping area between the two. The concept of restitution is basically founded on the idea that when a decree is reversed, law imposes an obligation on the party who received an unjust benefit of the erroneous decree to restitute the other party for what the other party has lost during the period the erroneous decree was in operation. Therefore, the Court while granting restitution is required to restore the parties as far as possible to their same position as they were in at the time when the Court by its erroneous action displaced them. In the case of Lal Bhagwant Singh v. Sri Kishen Das reported in AIR 1953 SC 136, Justice Mahajan speaking for a unanimous three-Judge Bench of this Court explained the doctrine of restitution in the following words:-
"...the principles of the doctrine of restitution which is that on the reversal of a judgment the law raises an obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case..."
61. Subsequently, in Binayak Swain v. Ramesh Chandra Panigrahi and another (AIR 1966 SC 948) this Court relied on the principles in Bhagwant Singh (supra) and explained the concept of restitution as follows:-
"...The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost."
62. The concept of restitution is virtually a common law principle and it is a remedy against unjust enrichment or unjust benefit. The core of the concept lies in the conscience of the Court which prevents a party from retaining money or some benefit derived from another which he has received by way of an erroneous decree of Court. Such remedy in English Law is generally different from a remedy in contract or in tort and falls within a third category of common law remedy which is called quasi contract or restitution.
63. If we analyze the concept of restitution one thing emerges clearly that the obligation to restitute lies on the person or the authority that has received unjust enrichment or unjust benefit (See Halsbury's Laws of England, Fourth Edition, Volume 9, page 434).
64. If we look at Restatement of the Law of Restitution by American Law Institute (1937 American Law Institute Publishers, St. Paul) we get that a person is enriched if he has received a benefit and similarly a person is unjustly enriched if the retention of the benefit would be unjust. Now the question is what constitutes a benefit. A person confers benefit upon another if he gives to the other possession of or some other interest in money, land, chattels, or performs services beneficial to or at the request of the other, satisfies a debt or a duty of the other or in a way adds to the other's security or advantage. He confers a benefit not only where he adds to the property of another but also where he saves the other from expense or loss. Thus the word "benefit" therefore denotes any form of advantage (page 12 of the Restatement of the Law of Restitution by American Law Institute).
65. Ordinarily in cases of restitution if there is a benefit to one, there is a corresponding loss to other and in such cases; the benefiting party is also under a duty to give to the losing party, the amount by which he has been enriched.
66. We find that a person who has conferred a benefit upon another in compliance with a judgment or whose property has been taken thereunder, is entitled to restitution if the judgment is reversed or set-aside, unless restitution would be inequitable (page 302 of the Restatement of the Law of Restitution by American Law Institute).
67. Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. Other situation would be when a party acquires benefits lawfully, which are not conferred by the party claiming restitution, Court cannot order restitution.
68. From the facts of the case which has been discussed above it is debatable whether the respondent's inability to avail benefit under the said Scheme is because of its own act or because of the act of the appellant. There is a reasonable basis in the argument of the appellant that after this Court granted the stay order on 11.5.2001 on the special leave petition filed by Essar, the respondents should have made an effort of obtaining the necessary licence by again coming to the Court. Admittedly Essar did not do it. Essar merely represented to the State for grant of licence. Assuming that the State had not responded favourably to the representation of Essar by giving the clearance, it was open to Essar to approach this Court for some order as its special leave petition was pending before this Court. Essar did not do it. Therefore, the question remains whether Essar acted with due diligence in obtaining the equitable remedy of restitution. It is well known that due diligence must be exhibited by the party to seek equity.
69. Now, if we take the case of Essar on a higher plain that it has done its duty even then it has been denied of the benefit of the said scheme, even then there is no question of restitution by the State for the simple reason that it is nobody's case that State has received any unjust benefit or any unjust enrichment in view of stay order given by the High Court in the second PILs filed in the High Court. On the contrary, it is clear from the record that the State contested those proceedings and specially, challenging the orders of the Gujarat High Court dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 on the second PILs, the State has filed its SLP. Therefore, the State has not at all gained or received any benefit as a result of the orders passed by the High Court on the second PILs. Therefore, the principle of restitution cannot be applied against the State, the appellant before us. The judgment of the High Court to that extent is erroneous.
70. The second principle that an act of court cannot prejudice anyone, based on latin maxim "actus curiae neminem gravabit" is also encompassed partly within the doctrine of restitution. This actus curiae principle is founded upon justice and good sense and is a guide for the administration of law.
71. The aforesaid principle of "actus curiae" was applied in the case of A.R. Antulay v. R.S. Nayak & another reported in (1988) 2 SCC 602, wherein Sabyasachi Mukharji, J (as his lordship then was) giving the majority judgment for the Constitution Bench of this Court, explained its concept and application in para 83, page 672 of the report. His lordship quoted the observation of Lord Cairns in Rodger v. Comptoir D'escompte De Paris, [(1869-71) LR 3 PC 465 at page 475) which is set out below:
"Now, their Lordships are of opinion, that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the Suitors, and when the expression 'the act of the Court' is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Court as a whole, from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court."
72. In the Antulay case (supra), it was found that directions of this Court in its order-dated 16.02.1984 in the previous Antulay Case {R.S. Nayak v. A.R. Antuley, (1984) 2 SCC 183} was given per incuriam and without noticing the provisions of section 6 and 7 of the Criminal Law Amendment Act, 1952 and also the binding nature of the Larger Bench decision in The State of West Bengal v. Anwar Ali Sarkar & another (AIR 1952 SC 75).
73. It was made clear in the Antulay Case [(1988) 2 SCC 602] that when Court passes an order, which is rendered per incuriam, and the party suffered because of the mistake of the Court, it is the Court's duty to rectify the said mistake. It is in that context that the concept of actus curiae can be invoked. In the instant case the order passed by the High Court in the second PILs was overturned by this Court by its order-dated 19.01.2004 on a different interpretation of section 29 of the WPA.
74. This Court while giving a different interpretation of section 29 of WPA never held that High Court acted per incuriam in rendering its judgment on second PIL filed by the Samiti. Therefore in the case of a mere erroneous judgment of a Court the principle of "actus curiae" cannot be invoked.
75. The learned counsel for Essar in support of the applicability of Doctrine of Restitution has cited the case of South Eastern Coalfields Ltd. v. State of M.P. & others reported in (2003) 8 SCC 648 wherein this Court through R.C. Lahoti, J (as his Lordship then was) in para 27 had observed that:
"Section 144 C.P.C. is not the fountain source of restitution, it is rather a statutory recognition of a pre-existing rule of justice, equity and fair play. That is why it is often held that even away from Section 144 the Court has inherent jurisdiction to order restitution so as to do complete justice between the parties."
76. His Lordship at para 28 observed as under:
"That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the 'act of the court' embraces within its sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the Court being wrongful or a mistake or error committed by the Court; the test is whether on account of an act of the party persuading the Court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the Court and the act of such party. The quantum of restitution, depending on the facts and circumstances of a given case, may take into consideration not only what the party excluded would have made but also what the party under obligation has or might reasonably have made."
77. As discussed earlier a mere mistake or error committed by Court cannot be a ground for restitution. Now in view of the above, two questions arise for consideration:
(i) Whether the orders dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court whereby the appellant was restrained from giving any further permission for laying pipelines has resulted in any undue advantage to appellant?
(ii) Whether in respect of the order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court, later on reversed by this Court on 19.01.2004 on a different interpretation of Section 29 of WPA, the actus curiae principle can be invoked.
78. Coming to the first question, as mentioned above, it is clear that the appellant had also challenged this restraining order before this Court. It cannot be said by this restraining order the appellant had gained any undue advantage. On the contrary, twin objects of development of the backward areas and employment opportunities, which were sought to be achieved by the appellant by floating the said scheme, were adversely affected.
79. Therefore the principles in South Eastern Coalfield Ltd. (supra) are not attracted here.
80. In Mumbai International Airport Pvt. Ltd v. Golden Chariot Airport & another, (2010) 10 SCC 422, after a Civil Court returned the plaint filed by respondent, the respondent came up in appeal against the said order before the High Court and expressly gave up its claim of irrevocable license in order to revive the suit and on such stand, the High Court remanded the suit for trial. Thereafter the respondent therein tried to urge the same plea of irrevocable license before the Trial Court and this Court. This Court did not accept the plea holding that the common law doctrine of approbation and reprobation is well established in our jurisprudence and applicable in our laws too. That principle has no application to the facts of this case.
81. The principles decided in the case of Karnataka Rare Earth & Anr. v. Senior Geologist, Department of Mines & Geology and Anr., reported in (2004) 2 SCC 783 is equally of no assistance to Essar. In that case both the doctrines of "actus curiae" and "restitution" were discussed together. We have already held that these equitable doctrines are not applicable in the facts of the present case. In Karnataka Rare Earth (supra), the appellants, on the basis of an interim order granted by this Court, extracted minerals and disposed of the same. Ultimately the interim order was vacated by this Court and the appeal filed by Karnataka Rare Earth was dismissed. In that context this Court held that the appellants cannot enjoy the benefits earned by them under the interim order of this Court and this Court held that the demand of the State for the price of mines and minerals from the appellant is neither unreasonable nor arbitrary.
82. Reliance was placed on the judgment of this Court in Bareilly Development Authority v. Methodist Church of India & Anr., reported in (1988) Supp SCC 174. In that case no principle was decided but the case was decided on its facts. In Bareilly Development Authority (supra), a commercial complex was to be constructed within a time schedule. During the said period of construction, the work had to be stopped in view of the demolition order passed by the authority. This Court held that the said period has to be excluded in computing the period of completion. It was not a case of construing any exemption scheme. What was construed was condition 6 of the construction sanction plan. Therefore principles of Bareilly Development Authority (supra) cannot be applied.
83. In the case of Hitech Electrothermics & Hydro Power Ltd. v. State of Kerala & Ors., reported in (2003) 2 SCC 716 it is true that this case is one relating to grant of concessional tariff rate. However the fact shows that in that case the Electricity Board provided power to the appellant only in the year 1998 and the Court found that the delay in giving power was for sheer inaction on the part of Electricity Board. In that context this Court held that literal construction to the entitlement of concessional tariff rate should not be done and the Court also noted that the appellant enjoyed concessional tariff rates on the basis of interim order of Court.
84. In the instant case, no inaction on the part of appellant was pleaded by Essar. In fact before the High Court, Essar expressly gave up its plea of delay against the appellant. In fact the High Court passed the injunction order not because of the inaction of the appellant but the said order was passed in a proceedings which was opposed by appellant right upto this Court. Therefore, the case of Hitech Electrothermics (supra) is clearly distinguishable on facts.
85. The learned counsel for Essar relied on a decision of this Court in Ishwar Dutt v. Land Acquisition Collector & another reported in (2005) 7 SCC 190. But no question of issue estoppel was argued before the High Court and no such question actually has fallen for consideration in the course of argument before this Court. Therefore reliance on the principle of issue estoppel on the basis of Ishawar Dutt (supra) is not relevant at all.
86. In this case we are to interpret the provisions of exemption scheme.
87. In Novopan India Ltd. Hyderabad v. Collector of Central Exercise and Customs, Hyderabad [(1994) Supp 3 SCC 606] the question for consideration before this Court was that, in case of ambiguity, which rule of construction will be applicable to exemption provision. This Court relied on the case of Union of India & others v. Wood Papers Ltd & another reported in (1990) 4 SCC 256, wherein at para 4, page 260 this Court observed as under:
"...Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction."
88. This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State.
89. In this case, Essar was categorically told by letter dated 28.05.2002, which is much prior to the expiry of the period, that time for availing the exemption cannot be extended. Admittedly, Essar failed to meet the deadline. In that factual scenario, the exercise undertaken by the High Court in the impugned judgment by directing various adjustments which virtually re-wrote the State's exemption scheme, is an exercise which is, with great respect, neither warranted in law nor supported by precedents. There is no question of equity here, an exemption is a stand alone process. Either an industry claiming exemption comes within it or it does not.
90. For the reasons aforesaid we allow the appeal. The High Court judgment is set aside.
91. The parties are left to bear their own costs
SUPREME COURT OF INDIA
Hon'ble Mr. Justice Asok Kumar Ganguly and Hon'ble Mr. Justice Jagdish Singh Khehar
State of Gujarat & Others Appellant(s)
versus
Essar Oil Ltd. & Another Respondent(s)
Case No: Civil Appeal No(s). 599 of 2012
Date of Decision: 17 January 2012
JUDGEMENT
Altamas Kabir, J. :- Leave granted.
2. This appeal is directed against the judgment of the High Court of Gujarat dated 22.04.2008 in Special Civil Application No.24233/2007, whereby the Respondent No. 1 herein, Essar Oil Limited (hereinafter "Essar") was given the benefit of Sales Tax incentive under the Government of Gujarat "Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000" (hereinafter "the said Scheme")
3. The State Government in the Industries and Mines Department vide Resolution dated 11.09.1995 introduced the said scheme to accelerate development of the backward area of the State and to create large-scale employment opportunities.
4. The operative period of the said scheme was from 16.08.1995 upto 15.08.2000, during which new units have to go into commercial production.
5. The Scheme envisaged grant of Sales Tax incentives by way of Sales Tax Exemption or Sales Tax Deferment or Composite Schemes, for Premier/Prestigious Units according to the location, investment and status of the project. Essar fell in the category of premier unit i.e. new industrial unit having a project cost of more than Rs.1,000/- crores and employing 100 workers on a regular basis and following the employment policy of the State Government. Clause (v) of the Scheme defined premier unit in the following terms:-
"(v) PREMIER UNIT
A new industrial unit or industrial complex fulfilling the following criteria will be considered for granting status of a "Premier Unit".
(a) The industrial unit shall have a project cost of Rs.500 crores or more. Such units having project cost of Rs.1,000 crores and above shall be entitled for extended period to avail incentive as provided under para 6 B.
(b) Only one unit per taluka will be eligible for the Premier Unit status. In banned area no unit is permitted.
(c) The unit shall employ at least 100 workers on a regular basis and shall follow the employment policy of the State Government."
6. Part II of the said Scheme provided that the rate of incentive would depend on the location, investment and status of the project. The incentives offered were sales-tax exemption or sales-tax deferment or composite scheme. There is no dispute about the fact that Essar opted for sales-tax deferment scheme. As per clause 6(i)(B), the rate of incentive applicable to Essar was the rate available for the most backward area. The extent of exemption was 125% of eligible fixed capital investment.
7. Part II Clause (iii) (b) provided that Under the Sales Tax Deferment incentive scheme, the recovery of sales tax connected by the unit on sale of goods manufactured by it including intermediate products, by products and scrap/waste generated as incidental to manufacturing activities and turnover tax, leviable to Government will be deferred and amount so deferred will be recovered in six equal annual installments by Sales Tax Department beginning from the financial year subsequent to the year in which the unit exhausts limit of incentive granted to it under the scheme or after the expiry of relevant period or time limit during which deferment is available or whichever is earlier.
8. Since Essar's investment was going to be more than Rs.1,000 crores, the duration of incentive of sales-tax deferment was to be for a period of 17 years from the date of commercial production.
9. Clause 6(v) of the said Scheme provided for effective steps for extending date of commercial production in the following terms :
"6(v) Effective steps for extending date of commercial production :
The unit which cannot go into commercial production before expiry of the scheme will be allowed to go into commercial production beyond the last date of the scheme provided it has taken the following effective steps:
(1) The industrial unit should have obtained provisional registration as a Prestigious/Premier unit before 15th August 2000.
(2) 25% of project cost should have been incurred before 15th August 2000. The unit which has taken above effective steps will be allowed to go into commercial production as shown below:
(a) The unit with project cost above Rs.100 crores but below Rs.300 crores should go into commercial production on or before 15th August 2002.
(b) The unit with project cost more than Rs.300 crores should go into commercial production on or before 15th February 2003. Such units shall have to apply to industries Commissioner for extending date of commercial production by 31st August 2000."
10. A High Power State Level Committee (hereinafter "HPSLC") was the Sanctioning Authority for granting permanent registration of all the Prestigious/Premier Units
11.Part III provides the procedure for Registration for Premier/Prestigious Status, the relevant clause of the said Part in respect of instant case is set out below:
"An Industrial unit eligible for Prestigious/Premier status under the scheme will apply to Industries Commissioner in prescribed form before expiry of the scheme along with details of following effective steps.
i) Possession of plot or shed in GIDC Estate. For units located outside GIDC Estate, the unit must be in legal possession of land with valid non-agricultural use permission of industrial use or as per Revenue Act as modified from time to time.
ii) The Letter of intent/Letter of Approval or Registration/ obtained receipt against filling of IEM to the appropriate authority.
iii) NOC of GPCB (Gujarat Pollution Control Board)
iv) Detailed Project Report.
The following procedure will be adopted for granting the temporary and permanent Prestigious/Premier registration.
(a) The Industries Commissioner shall give provisional registration to the eligible prestigious/premier unit after approval of committee where applicable.
(b) The eligible unit after completion of project will apply to Industries Commissioner for permanent prestigious/premier registration, Industries Commissioner will carryout the assets verification and submit a verification report to the High Power State Level Committee, for granting permanent registration."
12. Some relevant facts which arose prior to the floating of the Scheme and which are necessary for appreciating the said Scheme, as contended by Essar and which the records also shows, are as under.
13. Essar was encouraged by the State Government to set up a major venture at Vadinar in Jamnagar District of Gujarat as a 100% export oriented unit for refining of petroleum products with a capacity of 9 Million Tons per annum at an estimated project cost of Rs. 1900 crores in collaboration with M/s Bechtel Inc., USA.
14. By letter dated 11th April, 1990, the then Chief Minister of the State of Gujarat wrote to the Ministry of Planning, Government of India, stating that the project was expected to generate foreign exchange earnings of over Rs.3000 crores within a period of 5 years and that it was expected to be set up in 36 months. It was anticipated by the State Government that the project would "completely change the face of the Vadinar area, which is traditionally a backward area of Gujarat offering direct and indirect employment and will encourage growth of various other ancillary industries in that region". The letter further said that the project had the full support of the Government of Gujarat and it was being accorded highest priority and that Essar's proposal for setting up the oil refinery should be cleared by the Government of India urgently. The clearance for setting up the oil refinery was then granted by the Government of India.
15.In January, 1993, Essar applied to the Gujarat Pollution Control Board (GPCB) for grant of a `No Objection Certificate' to establish the refinery for manufacturing several kinds of petroleum products. By letter dated 15th February, 1993, the GPCB stated that it had no objection from the Environmental Pollution potential point of view in the setting up of the refinery project subject to certain environmental pollution control measures to be taken by the appellant. Essar's proposal regarding the environmental pollution control system was approved by the GPCB on 17th April, 1993 and a Site Clearance Certificate was issued on that date.
16. On 10.11.1994, Essar filed an application for right of way over 15.49 hectares of forest land for laying Submarine Crude Oil Pipeline, Cooling Water/Return Water Pipeline and Product Jetty for establishment of its Refinery Project at Vadinar, District Jamnagar, to the Conservator of Forests, Marine National Park, Jamnagar. Undisputedly, 15.49 hectares of forest land applied for includes 8.79 hectares of Jamnagar Marine National Park and Sanctuary. Therefore, permission under Section 2 of the Forest Conservation Act ("FCA") was required for the entire 15.49 hectares. At the same time, permission of State Government was required under the Wildlife Protection Act ("WPA") for 8.79 hectares.
17. On 13.02.1995, the State Government requested the Chief Conservator of Forests, Regional Office, Western Region, Bhopal, to move the Government of India to issue suitable orders to allow Essar to make geophysical survey in Marine National Park/Sanctuary area. The proposal was forwarded by the Chief Conservator of Forests, Bhopal to the Government of India on 15.05.1995.
18. The Conservator of Forests recommended and forwarded the proposal of Essar for Right of Way to the Chief Conservator of Forests (WL) by letter dated 2nd June, 1995 along with an application in the prescribed form seeking prior approval from the Central Government under Section 2 of FCA. The application with its enclosures together with the recommendation of the State Government that 15.49 hectares of forest land be made available to the appellant, was forwarded to the Central Government by the Central Chief Conservator of Forests on 3rd February, 1997. Upon receipt of the proposal of the State Government, the Central Government constituted a team for joint inspection of the area. The report of the joint inspection team was that the proposed activity of the appellant would not have much ramification from the forestry point of view and the damage would only be temporary in nature in a localized area during the construction phase.
19. On 08.09.1995, the State Government in its Forests and Environment Department informed the Government of India in the Ministry of Environment and Forests, inter alia, that the approval "in principle" was granted to Essar to install Single Buoy Mooring / Crude Oil Terminal / Jetty and connecting pipeline in the National Marine Park and Sanctuary area in Vadinar, District Jamnagar on the terms and conditions to be decided in due course by the State Government.
20. On 11.09.1995 the said Scheme was announced and thereafter on 01.02.1996 Essar applied in the new format to the Industries Commissioner, Gandhinagar for registering the Industrial Undertaking as a "Premier/Prestigious Unit" under the said Scheme.21.On 29.05.1996 the Forest and Environment Department, State of Gujarat made a proposal to Government of India seeking approval under Section 2 of FCA for diversion of 15.49 hectares of forest land for construction and operation of certain offshore and onshore facilities for a grass root refinery project of Essar.
22. On the basis of the letter-dated 30.09.1997 of the Principal Chief Conservator of Forests, the State Government conveyed on 16.10.1997 its permission under section 29 of WPA to Essar's proposal of right to way through the National Park and Sanctuary subject to Essar's compliance with certain terms and conditions including obtaining permission of the Central Government under the FCA, 1980 (which was granted on 08.12.1999, mentioned later) and also getting clearance under the Coastal Regulation Zone (CRZ) Regulations, which was granted on 03.11.2000.
23. This permission was conveyed to Essar by the Conservator of Forests under cover of his letter-dated 18.10.1997. The permission was, however, restricted to the Kandla Port Trust area. Kandla Port Trust granted permission to Essar to install "marine facilities" on 10.10.1997.
24. On 27.11.1997 the Ministry of Environment & Forest, Government of India granted "in-principle" approval to Essar under FCA, 1980 for diverting 15.49 hectares of forest land for non-forest purpose.
25.On 25.06.1999 Essar was issued the provisional Premier Registration Certificate by the Industries Commissioner. The provisional certificate was valid upto 15.08.2000 i.e. the last date of Scheme, within this time period Essar was obliged to start commercial production, failing which Essar would have to apply for extension of date of commercial production.
26. In the meantime in view of the permissions granted to install "marine facilities", Essar started construction work of laying of water in-take jetty and product jetty in the forest area of Marine National Park and Marine Sanctuary. Essar's grievances are that despite the aforesaid permissions being given to them for construction, the State Forest Department forced Essar to stop work and further lodged on 19.3.1999 a criminal complaint against Essar and its contractor, for offence committed under sections 17(A), 29, 35(6), 51(1) and 58 of the WPA and section 26 of the Indian Forests Act.
27. In April 1999, a writ petition being Special Civil Application No.2840/1999 in the nature of Public Interest Litigation was filed before the High Court of Gujarat by one Halar Utkarsh Samiti (hereinafter "Samiti") alleging serious violations of several environmental legislations on the part of Essar, who was impleaded as Respondent No.4 in the petition.
28. By interim order-dated 20.04.1999 passed in that PIL High Court directed Essar not to carry on any construction activity in the Marine National Sanctuary and Marine National Park in violation of the statutory provisions including the provisions contained in Wild life (Protection) Act, 1972.
29. By order-dated 20.08.1999 the High Court disposed of the said PIL in which Essar undertook to file an Undertaking to the effect that they would not carry out any construction activities at the site in question, without obtaining the approval from the authorities. Pursuant to the said order, on 28.09.1999 Essar filed an undertaking to the following effect:
"...no construction activities or marine facilities will be undertaken without obtaining the approval from the authorities including those which are under process before the authorities.
This undertaking is given without prejudice to the rights and contentions of the Respondent No.4.
This undertaking will come to an end as and when the permission is granted by the authorities."
30. In the meantime on 09.09.1999, a charge sheet was filed against the officers of Essar and its contractor in respect of earlier mentioned offences allegedly committed by them under the WPA and FCA.
31. On 08.12.1999 the Ministry of Environment and Forest, Government of India granted approval under section 2 of the FCA for the total land of 15.49 hectares of forest land.
32. In April 2000, said Samiti filed another PIL being Special Civil Application No.1778, and subsequently two other PILs were also filed by one Jan Sangarsh Manch and one Shri Alpesh Y. Kogje, being Civil Application Nos.5476 and 5928 of 2000, (hereinafter "second PILs") in the High Court of Gujarat challenging, inter alia, the permission granted by the State Government to one Bharat Oman Refineries Ltd. (`BORL') to lay pipeline in the Marine National Park and Sanctuary Area. It is pertinent to note here that Essar was not a party to these petitions.
33. On 29.04.2000 the Government of Gujarat discontinued the said Scheme with effect from 01.01.2000. However, vide the same Government Resolution dated 29.04.2000, it was specifically mentioned that industry units in pipelines cases which have been registered should start production within two years from January 1, 2000 failing which such units shall be rendered ineligible for sales tax incentive. Therefore, the time to start commercial production was thus extended to 01.01.2002. It is common ground that Essar, being a registered unit, was entitled to the benefit of the said extension.
34. Before the High Court, when proceedings in respect of the second PILs were going on, the counsel of Government of Gujarat placed a copy of the letter-dated 25.07.2000. Relying on the letter, the High Court noted that there were two more pending proposals for laying pipeline in the Marine Park/Sanctuary Area with the State Government - one from Essar and the other from one Gujarat Poshitra Port Ltd.
35. Before the High Court, the State Government submitted that the proposal from Essar for laying down pipelines in Marine National Park and Marine Sanctuary, Vadinar in Jamnagar District has been only approved `in principle' vide letter-dated 08.09.1995. However, formal sanction under section 29 of the WPA, 1972 is yet to be given by the State Government.
36. By judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 the High Court, in the second PILs, restrained the Government of Gujarat from granting any more authorization and permission for laying down any pipeline in any part of the sanctuary or the national park. As a result of this order, Essar was not given permission to lay down pipelines by the State Government.
37. Being aggrieved, inter alia, on the ground that it was not a party to the second PILs, Essar filed a review/recall application before the High Court being MCA No.250 of 2011 in SCA No.1778 of 2000, inter alia, seeking review and recall of the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 passed in the second PILs by the High Court and a further declaration to the effect that Essar's project at Vadinar was not affected in any manner by the said judgment.
38. By judgment and order dated 23.02.2001 the High Court rejected the said application for review on the ground that there was a factual controversy between Essar and the State Government and that therefore the grievance of Essar was beyond the scope of review.
39. Meanwhile, on 12.04.2001 the Government of Gujarat extended the time for going into commercial production upto 15.08.2003 for various pipeline units including Essar, vide Government Resolution dated 12.04.2001. By that time Essar had obtained Provisional Premier Unit Registration before 15.08.2000 and had also incurred 25% of the Project Cost before 15.08.2000 and therefore, it was entitled to the benefit of this extension.
40. Essar challenged the aforesaid judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000, 03.08.2000 and 23.02.2001 of the High Court delivered in the second PILs and the rejection of its review petition in that second PILs respectively by way of filing Special Level Petition being (SLP) CC No.3654 of 2001 [later SLP No.9454-9455 of 2001] before this Hon'ble Court.
41. By interim order-dated 11.05.2001 this Court granted stay of the judgment of the High Court in so far as Essar was concerned in SLP No.9454-9455 of 2001 i.e. SLP filed by Essar. The text of the order of this Court is set out:
"Permission to file Special Leave Petition is granted.
Issue notice.
Stay of the High Court judgment in so far as the petitioner is concerned.
Counter affidavit be filed within four weeks. Rejoinder be filed within four weeks thereafter. List after eight weeks."
42. In view of the above stay order granted by this Court, Essar moved the State Government for permitting it to proceed with the construction of jetty and laying the pipeline. By letter dated 29.10.2001, the State Government in the Forests and Environment Department specifically called Essar to ensure that no construction activities were commenced before obtaining all necessary clearances from different Government departments, agencies and the conditions stipulated by the Ministry of Environment and Forests, Government of India as well as the Forests and Environment Department of the State Government were strictly complied with. However, Essar did not commence the construction of jetty or laying down the pipeline in the National Marine Park/Sanctuary area. One thing which is of some importance is that despite the stay of this Court and the Government letter dated 29.10.2001, Essar did not challenge the Government stand in the pending special leave petition filed by it in this Court.
43. It is also pertinent to note that the Government of Gujarat had also challenged the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court passed in the second PILs by way of filing Special Leave Petition being (SLP) CC No.5123-5125 of 2001 (later SLP No.17694-96 of 2001) before this Court, wherein by interim order dated 24.09.2001 this Court passed the following operative order:
"Issue notice.
Tag with SLP(C) 9454-9455/2001.
There will be status quo as of today with the result that any permission which has been granted is not stayed. It will be open to the State Government to consider the granting of further permission which will be subject to the outcome of this appeal."
44. Essar just requested by its letter dated 11.04.2002 the Industries Commissioner to extend the date of commercial production to 30.11.2004 instead of 15.08.2003 for the purpose of availing the incentive benefit under the Scheme and cited that the delay in completing the project and consequent delay in starting commercial production was due to the factors beyond the control of Essar. Further by letter-dated 07.05.2002 Essar in continuation of the letter-dated 11.04.2002 requested the Industries Commissioner to extend the date of commercial production to August 2006.
45. The Industries Commissioner refused to grant any further extension of time vide its letter-dated 28.05.2002 and also made it clear to Essar to go into commercial production within the specified time i.e. till 15.08.2003. Essar, therefore, submitted a representation dated 19.06.2002 to the Chief Minister pointing out the circumstances which had delayed the completion of the project. Similar representations were thereafter made to different authorities of the State Government on 27.06.2002, 14.03.2003, 30.07.2003, 02.12.2003 and 26.12.2003. It appears that the said representations were not responded to.
46. By an order-dated 19.01.2004, this Court quashed and set aside the judgment dated 03.08.2000 of High Court and directed the State Government to issue the authorization to Essar in the requisite format under Sections 29 and 35 of the Wild Life (Protection) Act within a fortnight after disapproving the interpretation placed by the High Court on the provisions of the Wild Life (Protection) Act, 1972. This Court took the view that the permission granted by the State Government on 16.10.1997 was the permission contemplated by Section 29 of the Wild Life (Protection) Act.
47. In compliance with the above judgment, by letter dated 12.02.2004, the State Government authorized the Chief Wild Life Warden, Gujarat State under Sections 29 and 35 (6) of the Wild Life (Protection) Act to permit Essar for laying oil pipeline in the National Marine Park/Sanctuary area. The Chief Wild Life Warden also issued the requisite permission on 27.02.2004.
48. In the meantime, the accused i.e. officials and contractors of Essar involved in the Criminal Case of 1999 moved an application for discharge before the Metropolitan Magistrate at Khambalia. By order-dated 27.05.2004 the Magistrate allowed the said application and discharged the accused persons from all the charges levelled against them.
49. In view of the above permission granted by the Chief Wild Life Warden under Sections 29 and 35 of the Wild Life (Protection) Act, Essar again sent representations dated 06.04.2004, 12.07.2004, 27.07.2004 and 22.12.2004 to the Government requesting extension of time limit for commencement of commercial production for the purpose of sales tax deferment incentive scheme. In view of the above representations, the State Government in the Industries and Mines Department vide Resolution dated 10.05.2006 constituted a Committee comprising of the Advisor to the Chief Minister, the then Additional Chief Secretary, Finance Department and the then Principal Secretary, Industries and Mines department. The Committee was constituted to consider various such representations of Essar and other Companies.
50. On 26.11.2006 Essar commenced commercial production and started paying sales tax on the products sold by it, under protest.
51.As nothing was heard from the said Committee constituted in the year 2006 and the representations made by Essar in respect of granting Sales Tax Deferment were undecided, Essar filed a writ petition being Special Civil Application No. 24233/2007 before the High Court contending that for no fault of it, Essar was prevented from completing the project and that it was on account of being so prevented, Essar could not commence the commercial production within the time limit of 15.08.2003.
52. It is pertinent to note at this stage that before the High Court, Essar had expressly withdrawn the allegation that Department of Forest and Conservation, Government of Gujarat was guilty of delay. This is noted in para 6.2 of the High Court judgment which is set out below:
"6.2 While in the memo of the petition some allegations/submissions have been made attributing the delay to the Forests and Conservation Department of State Government, but the petitioner Company is not interested in pursuing those allegations and in fact would like to withdraw those allegations and the petitioner would like to invoke the following maxims of equity:-
(i) "An act of the Court shall prejudice no man", and
(ii) "The law does not compel a man to do that which he cannot possibly perform."
53. Before the High Court Essar contended that reason for delay in commencement of commercial production was on account of the injunction granted by the High Court on 13.07.2000/03.08.2000, restraining the State from granting further permission under Section 29 of the WPA in the second PILs (where Essar was not a party). And this situation continued till 27.02.2004, when pursuant to the judgment-dated 19.01.2004 of this Court the Chief Warden granted the said permission. Therefore Essar was entitled to get benefit of the exclusion of the said intervening period of from 13.07.2000 to 27.02.2004 i.e. three years and 230 days in calculating the time limit for commencement of commercial production.
54. By impugned order-dated 22.04.2008 the High Court excluded the aforesaid intervening period and as such extended the time limit for commencement of commercial production from 15.08.2003 to 02.04.2007 after observing in the impugned judgment as under:
"17. ...In the facts of the present case also, the State Government had granted the permission on 16.10.1997 and the Central Government had granted the permission on 08.12.1999. The very fact that the Chief Wild Life Warden issued the permission on 27.02.2004 after the decision of the Apex Court on 19.01.2004 is itself sufficient to show that the request made by the petitioner for excluding the intervening period between 13th July/3rd August, 2000 and 27.02.2004 is reasonable."
55. It is also pertinent to note herein that in the impugned order, a direction was given to the State Government that while considering Essar's application for the incentives, the State Government shall stipulate the following conditions, provided the final eligibility certificate is issued within one month from the date of receipt of the judgment:-
"22. ...
(i) The petitioner shall not be given the benefit of deferment of Sales-tax/Value Added Tax beyond 14th August, 2020.
(ii) The amount of Sales-tax/VAT already paid/payable by the petitioner for the period upto today shall not be refunded to the petitioner.
(The above amount is stated by the petitioner company to be above Rs.300 crores)
(iii) Without adjusting the Sales-tax/VAT paid for the period upto today as aforesaid, the amount otherwise computable under the Incentive Scheme on the basis of the eligible capital investment made by the petitioner in the unit under consideration shall be reduced by Rs.700 crores."
56. The above direction is based on the submissions of the counsel of both the parties, which were made without prejudice to their respective cases. The counsel of Essar submitted a proposal that Essar was ready to make the above mentioned concessions no. (i) & (ii) if the State Government does not challenge the decision of the High Court and within one month from that day the State Government grants Essar the benefit of the Sales Tax/VAT deferment as per the said scheme. In response to the said proposal the learned counsel for the State Government replied that assuming that Essar was found to be eligible under the said Scheme, the amount otherwise computable under the Incentive Scheme on the basis of the eligible capital investment made by Essar in the unit under consideration shall be reduced by Rs.700 crores.
57. The learned counsel for the respondents made an attempt to urge that the judgment of the High Court was virtually rendered by way of a concession and the impugned judgment is a consent order. As such the appeal, at the instance of the State, is not maintainable. Learned counsel for the State strongly opposed this contention and submitted that the same contention was raised at the time of admission of the special leave petition. Then, further affidavit was filed by the State with the leave of the Court. The Court was satisfied and then issued notice.
58. Ultimately, the matter was argued on merits before this Court and it was common ground that the impugned judgment is not by consent.
59. The impugned judgment of the High Court is based on two basic line of reasoning that the respondents are entitled to the benefit of Sales Tax Waiver Scheme firstly on the principle of restitution and secondly, that the respondents cannot be made to lose the benefit under the Sales Tax Waiver Scheme, for an act of Court. In this regard it has been urged that the respondents could not set up the plant for the purpose of commercial production within 15th August, 2003 as it was prevented from doing so by an order of injunction of the High Court. An order of injunction is an act of Court and an act of High Court cannot prejudice anyone. The loss of time suffered by the respondent as a result of the injunction order cannot cause any prejudice to the respondent.
60. Examining the aforesaid two contentions, this Court finds that there is an overlapping area between the two. The concept of restitution is basically founded on the idea that when a decree is reversed, law imposes an obligation on the party who received an unjust benefit of the erroneous decree to restitute the other party for what the other party has lost during the period the erroneous decree was in operation. Therefore, the Court while granting restitution is required to restore the parties as far as possible to their same position as they were in at the time when the Court by its erroneous action displaced them. In the case of Lal Bhagwant Singh v. Sri Kishen Das reported in AIR 1953 SC 136, Justice Mahajan speaking for a unanimous three-Judge Bench of this Court explained the doctrine of restitution in the following words:-
"...the principles of the doctrine of restitution which is that on the reversal of a judgment the law raises an obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case..."
61. Subsequently, in Binayak Swain v. Ramesh Chandra Panigrahi and another (AIR 1966 SC 948) this Court relied on the principles in Bhagwant Singh (supra) and explained the concept of restitution as follows:-
"...The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost."
62. The concept of restitution is virtually a common law principle and it is a remedy against unjust enrichment or unjust benefit. The core of the concept lies in the conscience of the Court which prevents a party from retaining money or some benefit derived from another which he has received by way of an erroneous decree of Court. Such remedy in English Law is generally different from a remedy in contract or in tort and falls within a third category of common law remedy which is called quasi contract or restitution.
63. If we analyze the concept of restitution one thing emerges clearly that the obligation to restitute lies on the person or the authority that has received unjust enrichment or unjust benefit (See Halsbury's Laws of England, Fourth Edition, Volume 9, page 434).
64. If we look at Restatement of the Law of Restitution by American Law Institute (1937 American Law Institute Publishers, St. Paul) we get that a person is enriched if he has received a benefit and similarly a person is unjustly enriched if the retention of the benefit would be unjust. Now the question is what constitutes a benefit. A person confers benefit upon another if he gives to the other possession of or some other interest in money, land, chattels, or performs services beneficial to or at the request of the other, satisfies a debt or a duty of the other or in a way adds to the other's security or advantage. He confers a benefit not only where he adds to the property of another but also where he saves the other from expense or loss. Thus the word "benefit" therefore denotes any form of advantage (page 12 of the Restatement of the Law of Restitution by American Law Institute).
65. Ordinarily in cases of restitution if there is a benefit to one, there is a corresponding loss to other and in such cases; the benefiting party is also under a duty to give to the losing party, the amount by which he has been enriched.
66. We find that a person who has conferred a benefit upon another in compliance with a judgment or whose property has been taken thereunder, is entitled to restitution if the judgment is reversed or set-aside, unless restitution would be inequitable (page 302 of the Restatement of the Law of Restitution by American Law Institute).
67. Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. Other situation would be when a party acquires benefits lawfully, which are not conferred by the party claiming restitution, Court cannot order restitution.
68. From the facts of the case which has been discussed above it is debatable whether the respondent's inability to avail benefit under the said Scheme is because of its own act or because of the act of the appellant. There is a reasonable basis in the argument of the appellant that after this Court granted the stay order on 11.5.2001 on the special leave petition filed by Essar, the respondents should have made an effort of obtaining the necessary licence by again coming to the Court. Admittedly Essar did not do it. Essar merely represented to the State for grant of licence. Assuming that the State had not responded favourably to the representation of Essar by giving the clearance, it was open to Essar to approach this Court for some order as its special leave petition was pending before this Court. Essar did not do it. Therefore, the question remains whether Essar acted with due diligence in obtaining the equitable remedy of restitution. It is well known that due diligence must be exhibited by the party to seek equity.
69. Now, if we take the case of Essar on a higher plain that it has done its duty even then it has been denied of the benefit of the said scheme, even then there is no question of restitution by the State for the simple reason that it is nobody's case that State has received any unjust benefit or any unjust enrichment in view of stay order given by the High Court in the second PILs filed in the High Court. On the contrary, it is clear from the record that the State contested those proceedings and specially, challenging the orders of the Gujarat High Court dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 on the second PILs, the State has filed its SLP. Therefore, the State has not at all gained or received any benefit as a result of the orders passed by the High Court on the second PILs. Therefore, the principle of restitution cannot be applied against the State, the appellant before us. The judgment of the High Court to that extent is erroneous.
70. The second principle that an act of court cannot prejudice anyone, based on latin maxim "actus curiae neminem gravabit" is also encompassed partly within the doctrine of restitution. This actus curiae principle is founded upon justice and good sense and is a guide for the administration of law.
71. The aforesaid principle of "actus curiae" was applied in the case of A.R. Antulay v. R.S. Nayak & another reported in (1988) 2 SCC 602, wherein Sabyasachi Mukharji, J (as his lordship then was) giving the majority judgment for the Constitution Bench of this Court, explained its concept and application in para 83, page 672 of the report. His lordship quoted the observation of Lord Cairns in Rodger v. Comptoir D'escompte De Paris, [(1869-71) LR 3 PC 465 at page 475) which is set out below:
"Now, their Lordships are of opinion, that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the Suitors, and when the expression 'the act of the Court' is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Court as a whole, from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court."
72. In the Antulay case (supra), it was found that directions of this Court in its order-dated 16.02.1984 in the previous Antulay Case {R.S. Nayak v. A.R. Antuley, (1984) 2 SCC 183} was given per incuriam and without noticing the provisions of section 6 and 7 of the Criminal Law Amendment Act, 1952 and also the binding nature of the Larger Bench decision in The State of West Bengal v. Anwar Ali Sarkar & another (AIR 1952 SC 75).
73. It was made clear in the Antulay Case [(1988) 2 SCC 602] that when Court passes an order, which is rendered per incuriam, and the party suffered because of the mistake of the Court, it is the Court's duty to rectify the said mistake. It is in that context that the concept of actus curiae can be invoked. In the instant case the order passed by the High Court in the second PILs was overturned by this Court by its order-dated 19.01.2004 on a different interpretation of section 29 of the WPA.
74. This Court while giving a different interpretation of section 29 of WPA never held that High Court acted per incuriam in rendering its judgment on second PIL filed by the Samiti. Therefore in the case of a mere erroneous judgment of a Court the principle of "actus curiae" cannot be invoked.
75. The learned counsel for Essar in support of the applicability of Doctrine of Restitution has cited the case of South Eastern Coalfields Ltd. v. State of M.P. & others reported in (2003) 8 SCC 648 wherein this Court through R.C. Lahoti, J (as his Lordship then was) in para 27 had observed that:
"Section 144 C.P.C. is not the fountain source of restitution, it is rather a statutory recognition of a pre-existing rule of justice, equity and fair play. That is why it is often held that even away from Section 144 the Court has inherent jurisdiction to order restitution so as to do complete justice between the parties."
76. His Lordship at para 28 observed as under:
"That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the 'act of the court' embraces within its sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the Court being wrongful or a mistake or error committed by the Court; the test is whether on account of an act of the party persuading the Court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the Court and the act of such party. The quantum of restitution, depending on the facts and circumstances of a given case, may take into consideration not only what the party excluded would have made but also what the party under obligation has or might reasonably have made."
77. As discussed earlier a mere mistake or error committed by Court cannot be a ground for restitution. Now in view of the above, two questions arise for consideration:
(i) Whether the orders dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court whereby the appellant was restrained from giving any further permission for laying pipelines has resulted in any undue advantage to appellant?
(ii) Whether in respect of the order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court, later on reversed by this Court on 19.01.2004 on a different interpretation of Section 29 of WPA, the actus curiae principle can be invoked.
78. Coming to the first question, as mentioned above, it is clear that the appellant had also challenged this restraining order before this Court. It cannot be said by this restraining order the appellant had gained any undue advantage. On the contrary, twin objects of development of the backward areas and employment opportunities, which were sought to be achieved by the appellant by floating the said scheme, were adversely affected.
79. Therefore the principles in South Eastern Coalfield Ltd. (supra) are not attracted here.
80. In Mumbai International Airport Pvt. Ltd v. Golden Chariot Airport & another, (2010) 10 SCC 422, after a Civil Court returned the plaint filed by respondent, the respondent came up in appeal against the said order before the High Court and expressly gave up its claim of irrevocable license in order to revive the suit and on such stand, the High Court remanded the suit for trial. Thereafter the respondent therein tried to urge the same plea of irrevocable license before the Trial Court and this Court. This Court did not accept the plea holding that the common law doctrine of approbation and reprobation is well established in our jurisprudence and applicable in our laws too. That principle has no application to the facts of this case.
81. The principles decided in the case of Karnataka Rare Earth & Anr. v. Senior Geologist, Department of Mines & Geology and Anr., reported in (2004) 2 SCC 783 is equally of no assistance to Essar. In that case both the doctrines of "actus curiae" and "restitution" were discussed together. We have already held that these equitable doctrines are not applicable in the facts of the present case. In Karnataka Rare Earth (supra), the appellants, on the basis of an interim order granted by this Court, extracted minerals and disposed of the same. Ultimately the interim order was vacated by this Court and the appeal filed by Karnataka Rare Earth was dismissed. In that context this Court held that the appellants cannot enjoy the benefits earned by them under the interim order of this Court and this Court held that the demand of the State for the price of mines and minerals from the appellant is neither unreasonable nor arbitrary.
82. Reliance was placed on the judgment of this Court in Bareilly Development Authority v. Methodist Church of India & Anr., reported in (1988) Supp SCC 174. In that case no principle was decided but the case was decided on its facts. In Bareilly Development Authority (supra), a commercial complex was to be constructed within a time schedule. During the said period of construction, the work had to be stopped in view of the demolition order passed by the authority. This Court held that the said period has to be excluded in computing the period of completion. It was not a case of construing any exemption scheme. What was construed was condition 6 of the construction sanction plan. Therefore principles of Bareilly Development Authority (supra) cannot be applied.
83. In the case of Hitech Electrothermics & Hydro Power Ltd. v. State of Kerala & Ors., reported in (2003) 2 SCC 716 it is true that this case is one relating to grant of concessional tariff rate. However the fact shows that in that case the Electricity Board provided power to the appellant only in the year 1998 and the Court found that the delay in giving power was for sheer inaction on the part of Electricity Board. In that context this Court held that literal construction to the entitlement of concessional tariff rate should not be done and the Court also noted that the appellant enjoyed concessional tariff rates on the basis of interim order of Court.
84. In the instant case, no inaction on the part of appellant was pleaded by Essar. In fact before the High Court, Essar expressly gave up its plea of delay against the appellant. In fact the High Court passed the injunction order not because of the inaction of the appellant but the said order was passed in a proceedings which was opposed by appellant right upto this Court. Therefore, the case of Hitech Electrothermics (supra) is clearly distinguishable on facts.
85. The learned counsel for Essar relied on a decision of this Court in Ishwar Dutt v. Land Acquisition Collector & another reported in (2005) 7 SCC 190. But no question of issue estoppel was argued before the High Court and no such question actually has fallen for consideration in the course of argument before this Court. Therefore reliance on the principle of issue estoppel on the basis of Ishawar Dutt (supra) is not relevant at all.
86. In this case we are to interpret the provisions of exemption scheme.
87. In Novopan India Ltd. Hyderabad v. Collector of Central Exercise and Customs, Hyderabad [(1994) Supp 3 SCC 606] the question for consideration before this Court was that, in case of ambiguity, which rule of construction will be applicable to exemption provision. This Court relied on the case of Union of India & others v. Wood Papers Ltd & another reported in (1990) 4 SCC 256, wherein at para 4, page 260 this Court observed as under:
"...Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction."
88. This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State.
89. In this case, Essar was categorically told by letter dated 28.05.2002, which is much prior to the expiry of the period, that time for availing the exemption cannot be extended. Admittedly, Essar failed to meet the deadline. In that factual scenario, the exercise undertaken by the High Court in the impugned judgment by directing various adjustments which virtually re-wrote the State's exemption scheme, is an exercise which is, with great respect, neither warranted in law nor supported by precedents. There is no question of equity here, an exemption is a stand alone process. Either an industry claiming exemption comes within it or it does not.
90. For the reasons aforesaid we allow the appeal. The High Court judgment is set aside.
91. The parties are left to bear their own costs
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