C.P.C. O. 41, R. 31: Mere formulation of a point by the first Appellate Court as to “Whether the judgment of the trial court is correct, legal or valid” is a hopeless wrong method

The judgment of Appellate Court shall state the points for determination. Merely asking the question as to whether the judgment of the Court below is correct, legal or valid is hopelessly an inadequate method of meeting the requirement of this legal provision. The judgments of the Appeal Courts below the points for determination being formulated in the following manner :

(1) Is the judgment of the Court below liable to be set aside?
(2) Is the decree of the Court below liable to be interfered with?
(3) Is the decree of the Court below valid?
(4) Is the decree of the Court below proper and legal?

These are some of the ways in which the Courts of first appeal have tended to formulate the points for determination.
This manner ignores that O. 41, R. 31(a) requires the appellate Court to state in its judgment the points that arise for determination after the arguments are advanced. Asking such vague questions as mentioned above will not lead to the pronouncement of a well considered and reasoned judgment. Imagine a Court of first appeal being confronted with the judgment where an issued is framed as to whether the suit of the plaintiff should be decreed. All concerned will be at sea if a suit is decided on an issue framed in that manner. As early as in Mhasu v. Davalat, (1905) 7 Bom LR 174, dealing with a similar provision in the earlier Civil Procedure Code, it has been pointed out that the object of the Legislature in making it incumbent on an appellate Court to raise points for determination was to clear up the pleadings and focus the attention of the Court and of the parties on the specific and rival contentions of the latter. The points which must arise for determination by a court of first appeal must cover all important questions involved in the case and they should not be general and vague. It is a matter of almost textbook knowledge that the exact questions which arise in the appeal and require determination must be stated in the judgment. “It is not sufficient to state the point to be determined in appeal whether or not the decision is consistent with the merits of the case.” The point so stated is hardly a point for determination as contemplated in Order 41 Rule 31 of the Code. The learned Judges of the Courts of first appeal should not approach the appeals merely from the point of speedily disposing of the same.-Anita M. Harretto Vs. Abdul Wahid Sanaullah, AIR 1985 Bom 98

M.P. Power Management Company Ltd. Vs. Renew Clean Energy Pvt. Ltd. & ANR.[ALL SC 2018 APRIL]

KEYWORDS:-termination of the contract-Penalty-

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DATE:-April 05, 2018

SUPREME COURT OF INDIA

M.P. Power Management Company Ltd. Vs. Renew Clean Energy Pvt. Ltd. & ANR.

[Civil Appeal No. 3600 of 2018 arising out of SLP(C) No.23848 of 2017]

R. BANUMATHI, J.

1. Leave granted.

2. This appeal arises out of the judgment passed by the High Court of Madhya Pradesh, Principal Seat at Jabalpur in and by which the High Court allowed the Writ Petition No.12432 of 2017 setting aside the order of termination of contract dated 11.08.2017 while maintaining the appellant’s action on invocation of bank guarantee in terms of clause 2.5.1 of the contract.

3. Brief facts which led to filing of this appeal are as follows: The appellant-M.P. Power Management Company Ltd. initiated the process of procurement of power from Grid Connected Solar Energy through tariff based competitive bidding for meeting its Renewable Purchase obligations in the State of Madhya Pradesh. Accordingly, a Request for Proposal (RFP) dated 06.05.2015 was issued by the appellant for long term procurement of 300 MW power from Grid connected Solar Energy Sources through tariff based competitive bidding.

Out of 100 bidders who participated in the bidding process, respondent No.1-ReNew Clean Energy Private Ltd. was selected on the basis of cheaper merit order rates. The appellant issued a Letter of Intent dated 23.10.2015 in favour of respondent No.1 allotting 51 MW capacity at quoted tariff of Rs.5.457/kwh for twenty five years which was accepted by respondent No.1 by its consent letter dated 26.10.2015. A Power Purchase Agreement (PPA) dated 10.11.2015 was executed between the appellant and respondent No.1 for sale and procurement of 51 MW solar power, for which, respondent No.1 submitted a bank guarantee from respondent No.2-Bank for an amount of Rs.15,30,00,000/- valid till January, 2018.

4. Since respondent No.1 was unable to obtain the requisite land for establishing the power plant, respondent No.1 requested assistance from the State Government. Accordingly, the Collector, District-Rajgarh by order dated 21.04.2016 allotted 96.73 acres of revenue land to MP New and Renewable Energy Department for further allotment on lease to respondent No.1. This was done by the appellant even though the land procurement was the obligation of the bidder.

5. According to respondent No.1, there were difficulties in accessing the land, because when measurement of land was taken on 29.06.2016, it was found encroached and the project team faced heavy resistance, physical attacks etc. and therefore, respondent No.1 vide its letter dated 29.09.2016 requested the appellant to allow to change of location of the project. The said permission sought for by respondent No.1 was granted by the appellant by its Resolution dated 29.12.2016. The relevant portion of the Resolution reads as under:- “Resolved that condition for not allowing change of location after 210 days from signing of PPA be relaxed and following Solar Power developers be allowed to change the location of their respective project, subject to provision of clause 2.5 and 2.6 of the PPA.”

6. After permission was granted to change the location of the project, respondent No.1 purchased lands to an extent of about 253 acres in villages Bansara and Pipriya Rai in Ashok Nagar district and undertook the development/construction activities. On 10.07.2017, respondent No.1 wrote to appellant that “commissioning process was in final stages and we expect to commission the plant on 31.08.2017 (tentative date), which is ahead of scheduled commissioning date of 07.09.2017.”

7. As per clause 2.5.1 of the PPA, a maximum period of nine months beyond 07.06.2016 for achieving Conditions Subsequent enables the appellant to terminate the agreement if respondent No.1 failed to satisfy the Conditions Subsequent by this date along with penalty which was to be calculated as per clause 2.5.1 of the PPA. In the light of the abovesaid provisions of the PPA, the appellant by order dated 11.08.2017 terminated the PPA and imposed a penalty of Rs.11,95,54,200/- on respondent No.1. Being aggrieved, respondent No.1 filed Writ Petition No.12432 of 2017 before the High Court praying that the appellant be directed not to give effect to termination and encashment of performance bank guarantee. The High Court vide impugned judgment dated 18.08.2017 partly allowed the writ petition setting aside the order of termination of the contract while maintaining the invocation of the bank guarantee.

8. We have heard the learned counsel appearing for the parties and perused the impugned judgment and materials on record.

9. Clause 2.1 of the PPA required respondent No.1 to fulfil all Conditions Subsequent within a period of 210 days from the effective date i.e. 06.06.2017, failing which Article 2.5 of the PPA allowed further extension up to nine months for fulfillment of the Conditions Subsequent subject to payment of liquidated damages in terms of the PPA. Clause 2.5 of the PPA reads as follows:-

2.5 DELAY IN ACHIEVING CONDITIONS SUBSEQUENT

2.5.1. In case of delay in achieving any of the Conditions Subsequent under clause 2.1 (a to h), as may be applicable, MPPMCL shall 4 encash CPG (submitted by Seller @ Rs.30 Lakhs/MW) as under, subject to Force Majeure:

a) Delay from 0-3 months – 1% per week.

b) Delay from 3-6 months – 2% per week for the period exceeding 3 months, apart from (a) above.

c) Delay from 6-9 months – 3% per week for the period exceeding 6 months, apart from (a) and (b) above.

d) In case of delay of more than 9 months, MPPMCL shall terminate PPA and release balance amount of CPG.

10. Since respondent No.1 was unable to obtain the requisite land, on request by respondent No.1, the State Government allotted 96.73 acres of land at district Rajgarh to the appellant for being allotted to respondent No.1 on lease. According to respondent No.1, upon initiation of measurement and demarcation exercise by the revenue officials, the land was found to be heavily encroached and there was stiff resistance which continued every time respondent No.1 tried to approach the said land and therefore, respondent No.1 could not access the project site and commence any construction activities. On request by respondent No.1 by its letter dated 29.09.2016, respondent No.1 sought for change of location of the project. The Board of Directors considered the request of respondent No.1 and by Resolution dated 29.12.2016 allowed change of location of the project.

Thereafter, respondent No.1 purchased the land to an extent of 253 acres in village Bansara and Pipriya Rai in Ashok Nagar district within a period of about eighty three days from the date of the appellant’s approval. After acquiring the land, respondent No.1 undertook the construction activities and the project in an advanced stage of synchronization as early as on 10.07.2017. The same was notified to the appellant by communication dated 10.07.2017 stating that the commissioning of the project is in final stage and that the expected date of commissioning of the project is 31.08.2017 which according to respondent No.1 is ahead of the scheduled commissioning date i.e. 07.09.2017 in terms of the PPA.

11. Even when respondent No.1 has undertaken the construction activities in the changed location and informed the appellant that the expected date of commissioning of the project is 31.08.2017, the appellant terminated the contract by its order dated 11.08.2017. As pointed out by respondent No.1 in its counter affidavit, on 06.06.2016, respondent No.1 has got sanction of the term debt facility of Rs.267.37 crores from PTC India Financial Services Limited and has spent huge amount in purchasing the land to an extent of 253 acres in Ashok Nagar district. Respondent No.1 has also spent substantial amount in development of the project in the changed location and reached an advanced stage of commissioning the project by 31.08.2017.

The delay in commissioning the project appears to be due to unavoidable circumstances like resistance faced at the allotted site in Rajgarh district 6 and subsequent change of location of the project. These circumstances, though not a Force Majeure event, time taken by respondent No.1 in change of location and construction of the plant have to be kept in view for counting the delay. Having invested huge amount in purchasing the land and development of the project at Ashok Nagar district and when the project is in the final stage of commissioning, the termination of the contract is not fair.

12. The High Court observed that the delay in completing the project was only for sixteen days. But according to the appellant, respondent No.1 was granted time period of 210 days to complete the Conditions Subsequent after which the penalty was leviable for the delay and if the delay exceeded more than nine months, the appellant could terminate the contract. According to appellant, the delay was not of sixteen days; but the said delay of sixteen days is beyond the period of nine months permissible under the PPA.

In the light of our observations above, we are not inclined to go into the merits of this contention. Suffice to note that in cases of delay, Articles 2.5 and 2.6 provide for levy of penalty. As observed by the High Court, since the contract permits imposition of penalty, respondent No.1 is liable to pay penalty in terms of clause 2.5.1 of the PPA for the delay. But the action of the appellant in terminating the contract is arbitrary and was rightly set aside by the High Court.

13. While setting aside the termination of the contract, the High Court maintained the action of invocation of bank guarantee in terms of clause 2.5.1 of the PPA. By order dated 22.09.2017, this Court has stayed the order of the High Court subject to restitution by the appellant of the amount covered by the bank guarantee which has been invoked which is said to have been complied with by the appellant. In our view, interest of justice would be met by directing respondent No.1 to pay penalty amount of Rs.11,95,54,200/- imposed upon respondent No.1 by the appellant.

14. In the result, the appeal is dismissed. The respondent No.1 shall pay the penalty of Rs.11,95,54,200/- to the appellant within a period of four weeks from the date of this judgment.

No costs.

J. [RANJAN GOGOI]

J. [R. BANUMATHI]

New Delhi;

April 05, 2018

Ashim Ranjan Das (D) by LRS. Vs. Shibu Bodhak & Ors.[ALL SC 2018 APRIL]

KEYWORDS:-possession of land under intermediary-

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DATE:- April 05, 2018

ACT:-Section 44(2a) of West Bengal Estate Acquisition Act, 1953

SUPREME COURT OF INDIA

Ashim Ranjan Das (D) by LRS. Vs. Shibu Bodhak & Ors.

[Civil Appeal No.3932 of 2009]

SANJAY KISHAN KAUL, J.

1. One Krishna Pada Supai (for short ‘KPS’) was holder and in possession of land under an ex-intermediary Kali Charan Pramanick. The land is stated to have been duly recorded in the name of KPS in the Records of Rights of Mauza Jogatipota, P.S. Sonarpur, being R.S. Khatian No.15 of Mauza Jagatipota, West Bengal. In the year 1962, 14.89 acres of land held by KPS was transferred to two persons – Jitendra Lal Paul (8.26 acres) and Golap Bala Saha Mondal (6.63 acres). The origination of the dispute is the proceedings suo moto initiated by the concerned Revenue Officer under Section 44(2a) of the Civil Appeal No.3932/2009 West Bengal Estate Acquisition Act, 1953 (hereinafter referred to the ‘Acquisition Act’). In order to appreciate the nature of proceedings, it is necessary to give a small overview of the Acquisition Act. The preamble to the Acquisition Act states as under: “An Act to provide for the State acquisition of estates, of rights of intermediaries therein and of certain rights of raiyats and under-raiyats and of the rights of certain other persons in lands comprised in estates.”

2. Section 2(i) of the Acquisition Act defines “intermediary” and reads as under:

“S. 2. Definitions. –

(i) “intermediary” means a proprietor, tenure-holder, undertenure- holder or any other intermediary above a raiyat or a non-agricultural tenant and includes a service tenure-holder and, in relation to mines and minerals, includes a lessee and a sub-lessee;”

3. Chapter II of the Acquisition Act provides for “Acquisition of estates and of the rights of intermediaries therein”. The relevant provision is as under:

“S. 4. Notification vesting estates and rights of intermediaries. –

(1) The State Government may from time to time by notification declare that with effect from the date mentioned in the notification, all estates and the rights of every intermediary in each such estate situated in any district or part of a district specified in the notification, shall vest in the State free from all incumbrances.” …. …. …. …. ….

“S. 5. Effect of notification. –

(1) Upon the due publication of a notification under section 5, on and from the date of vesting –

xxxx xxxx xxxx xxxx xxxx

(c) (Subject to the provisions of sub-section (3) of section 6, every non-agricultural tenant holding any land) under an intermediary, and until the provisions of Chapter VI are given effect to, every raiyat holding any land under an intermediary, shall hold the same directly under the State, as if the State had been the intermediary, and on the same terms and conditions as immediately before the date of vesting:

Provided that if any non-agricultural tenant pays rent wholly in kind or partly in kind and partly in cash, then, notwithstanding anything contained in the foregoing clause, he shall pay such rent as a Revenue Officer specially empowered by the State Government in this behalf may determine in the prescribed manner and in accordance with the principle laid down in clause (ii) of section 42:

Provided further that any person aggrieved by an order passed by the Revenue Officer determining rent under the first proviso may appeal to such authority and within such time as may be prescribed;” …. …. …. …. …. “

S. 6. – Right of intermediary to retain certain lands:-

(1) Notwithstanding anything contained in sections 4 and 5, an intermediary shall, except in the cases mentioned in the proviso to sub-section (2) but subject to the other provisions of that sub-section, be entitled to retain with effect from the date of vesting –

(a) land comprised in homesteads;

(b) land comprised in or appertaining to buildings and structures owned by the intermediary or by any person, not being a tenant holding under him by leave or license;

Explanation. – For the purposes of this clause ‘tenant’ shall not include a thika tenant as defined in the Calcutta thika Tenancy act, 1949 (W.B. Act II of 1949);

(c) non-agricultural land in his khas possession including land held under him by any person , not being a tenant, by leave or license, not exceeding fifteen acres in area, and excluding any land retained under clause (a):

Provided that the total area of land retained by an intermediary under clauses (a) and (c) shall not exceed twenty acres, as may be chosen by him:

Provided further that if the land retained by an intermediary under clause (c) or any part thereof is not utilised for a period of five consecutive years from the date of vesting, for a gainful or productive purpose, the land or the part thereof may be resumed by the State Government subject to payment of compensation determined in accordance with the principles laid down in sections 23 and 24 of the land Acquisition Act, 1894 (I of 1894);

(d) agricultural land in his khas possession, not exceeding twenty-five acres in area , as may be chosen by him: Provided that in such portions of the district of Darjeeling as may be declared by notification by the State Government to be hilly portions, an intermediary shall be entitled to retain all agricultural land in his khas possession , or any part thereof as may be chosen by him;

(e) tank fisheries;

xxxx xxxx xxxx xxxx xxxx

(2) An intermediary who is entitled to retain possession of any land under sub-section (1) shall be deemed to hold such land directly under the State from the date of vesting as a tenant, subject to such terms and conditions as may be prescribed and subject to payment of such rent as may be determined under the provisions of this Act and as entered in the record-of-rights finally published under Chapter V except that no rent shall be payable for land referred to in clause (h) or (i) :

Provided that if any tank fishery or any land comprised in a tea-garden, orchard, mill, factory or workshop was held immediately before the date of vesting under a lease, such lease shall be deemed to have been given by the state Government on the same terms and conditions as immediately before such date subject to such modification therein as the State Government may think fit to make.”

(emphasis supplied)

4. The effect of the aforesaid provisions, thus, is that once the process is followed, the rights of intermediary is to vest in the State, free from all encumbrances and the exceptions are provided in Section 6(1).

5. In a nutshell, the Act provides for vesting of the land of the intermediary as per process with the State Government but an intermediary is entitled to retain possession of any land from the date Civil Appeal No.3932/2009 Page 5 of 15 of vesting the lands falling under the exceptions enumerated in clauses (a) to (e) of sub-section (1) of Section 6 of the Acquisition Act as a tenant of the State.

6. Insofar as invocation of power under Section 44 (2a) by the Revenue officer is concerned, the relevant provisions are reproduced as under:

“Section 44. Draft and final publication of the record-of rights. –

(1) When a record-of-rights has been prepared or revised , the Revenue Officer shall publish a draft of the record so prepared or revised in the prescribed manner and for the prescribed period and shall receive and consider any objections which may be made to any entry therein or to any omission therefrom during the period of such publication: Provided that no order passed under section 5A shall be liable to be reopened in pursuance of an objection made under this subsection.

(2) When all such objections have been considered and disposed of according to such rules as the State Government may make in this behalf, the Revenue Officer shall finally frame the record and cause such record to be finally published in the prescribed manner and make a certificate stating the fact of such final publication and the date thereof and shall date and subscribe the same under his name and official designation.”

xxxx xxxx xxxx xxxx xxxx

(2a) An officer specially empowered by the State Government may, on application within nine months, or of his own motion within [sixty years], from the date of final publication of the record-of-rights or from the date of coming into force of the West Bengal Estates Acquisition (Second Amendment) Ordinance, 1957 (West Ben. Ord. X of 1957), whichever is later, revise an entry in the record finally published in accordance with the provisions of subsection (2) after giving the persons interested an opportunity of being heard and after recording reasons therefor:

Provided that nothing in the foregoing paragraph shall be deemed to empower such officer to modify or cancel any order passed under section 5A, while revising any entry: Provided further that no such officer shall entertain any application under this sub-section or shall of his own motion take steps to revise any entry, if an appeal against an order passed by a Revenue Officer on any objection made under subsection (1), has been filed before the commencement of the West Bengal Estates Acquisition (Second Amendment) Ordinance, 1957, before a tribunal appointed for the purpose of this section, and, notwithstanding anything in this section, any such appeal may continue and be heard and disposed of as if the West Bengal Estates Acquisition (Second Amendment) Ordinance, 1957, had not been promulgated.”

7. The Revenue Officer, thus, sought to exercise power under Section 44(2a) of the Acquisition Act suo moto on 7.4.1969. Thereafter he cancelled the tenancy rights of both Jitendra Lal Paul and Golap Bala Saha Mondal vide order dated 12.5.1969. This order was assailed in a WP being Civil Rule No.2915 (W) of 1969 by Golap Bala Saha Mondal alone. The learned single Judge of the Calcutta High Court set aside the order dated 12.5.1969 vide order dated 1.6.1973.

The rationale for doing so is two-fold – though Golap Bala Saha Mondal was in possession of land on payment of rent to the State Government and her name had been mutated on purchase in the year 1962, the proceedings under Section 44(2a) were held without notice to her. Secondly, the Revenue Officer was held to have no jurisdiction to go into the question as to whether the recorded owner is the benamidar for any other person.

8. On the other hand, on the demise of Jitendra Lal Paul, the land vested with his widow, Kusumbala Paul, who sold it to Mr. Rathindra Chandra Hore. The appellant, Ashim Ranjan Das, purchased the said land measuring 8.26 acres in 1987 from Mr. Rathindra Chandra Hore, which was originally held by late Jitendra Lal Paul.

9. It appears that since only Golap Bala Saha Mondal had filed the earlier writ petition, the State Government took steps qua the land of Jitendra Lal Paul on the premise that the land vested in the State Government and executed Deeds of Ryoti Settlement with regards to the land in favour of respondents No. 1 and 2 herein. The first two respondents before us are therefore the patta holders of the land through registered pattas of July, 1980. That is how the title came to Civil Appeal No.3932/2009 Page 8 of 15 respondent Nos.1 & 2, before the sale to the Appellant.

10. In the year 1990, the heirs of Jitendra Lal Paul, i.e., Kusumbala Paul and others filed a writ petition, being C.O. No.8958 (W) of 1990, on the ground that the land cannot be treated to be vested in the State Government. In the said proceedings, Ashim Ranjan Das, the appellant herein, was also joined as Petitioner No. 8. Respondents No. 1 and 2 herein were joined as respondents No. 10 and 13 respectively. In terms of the order dated 17.7.1997, the writ petition was allowed predicated on the earlier order passed on 1.6.1973 by the High Court in terms whereof the process undertaken by the respondent-authorities under Section 44(2a) of the Acquisition Act had been set aside.

11. The respondents No. 1 and 2 before us, did not take any steps to challenge the said order of 17.7.97, till 1998 when the Appellant before us filed a writ petition, being WP No.4327 (W) of 1998, with a prayer to mutate his name in the records, in respect of the lands purchased from Mr. Rathindra Chandra Hore. This writ petition was transferred to the Tribunal constituted under The West Bengal Land Reforms and Tenancy Tribunal Act, 1997 (hereinafter referred to as the ‘WB Land Reforms & Tenancy Act’) and renumbered as Transferred Application No. 401 of 2000 (LRTT). Section 4 of the WB Land Reforms & Tenancy Act deals with the establishment of the Tribunal, Section 9 with the transfer of case records from the High Court while Section 11 provides for an appeal to the Division Bench of the High Court.

12. The Tribunal in terms of the order dated 19.9.2000 directed the Block Land and Land Reforms Officer to restore all the land in the name of KPS. The endeavour to seek recall of this order by the State Government was unsuccessful vide order dated 22.3.2001. Consequently, the Block Land and Land Reforms Officer forwarded the annulment proposal to the Sub-Divisional Officer (‘SDO’) for taking necessary action in terms of the order passed by the Tribunal. The SDO in turn issued notice to the patta holders for hearing.

13. Shibu Bodhak and Tapan Malik respondents No.1 and 2 herein respectively, filed an application in the High Court of Calcutta registered as W.P.L.R.T. No.1045/2001, being an appeal filed u/s 11 of the WB Land Reforms & Tenancy Act and also invoking Article 226 of the Constitution of India, inter alia praying for issuance of a writ in the Civil Appeal No.3932/2009 Page 10 of 15 nature of mandamus, commanding the respondents to set aside the order dated 19.9.2000 and 22.3.2001 passed by the Tribunal in Appeal No.401/2000, which was transferred from the High Court, and also directing the respondents to set aside the action of the appropriate authority under The West Bengal Land Reforms Act, 1955 (hereinafter referred to as the ‘WB Land Reforms Act’) which had issued a notice dated 17.4.01 for the cancellation of patta. Mr. Shibu Bodhak and Tapan Malik challenged the order of the Tribunal directing the authorities to cancel the pattas of patta holders inter alia on the ground of absence of opportunity of being heard.

14. We may notice here that the WB Land Reforms Act was enacted with the objective as set out in the Preamble, which reads as under: “An Act to reform the law relating to land tenure consequent on the vesting of all estates and of certain rights therein [and also to consolidate the law relating to land reforms] in the State.” The WB Land Reforms Act sought to vest the rights in the land in the raiyat (a person or an institution holding land for any purpose whatsoever).

15. This was opposed by the appellant before us on the ground that since the vesting in the State Government had been set aside by the High Court on 1.6.1973 albeit at the behest of Golap Bala Saha Mondal, the grant of pattas by the State Government was void ab initio including in respect of the present first two respondents in July, 1980. We may add here that the rights of the appellant are derived from Jitendra Lal Paul for which the writ petition was filed only in the year 1990. It appears that in the interregnum period the land was transferred to respondent Nos.1 & 2. It was also contended by the appellant that the first two respondents could not complain or make a grievance for not being made parties in Appeal No.401/2000 since the issue of the proceedings under Section 44(2a) of the Acquisition Act already stood resolved and had attained finality.

16. The aforesaid appeal filed by respondent Nos.1 & 2 was, however, allowed vide impugned order dated 7.5.2004, noticing that respondent Nos.1 & 2 herein were the patta holders in respect of the land and were not heard by the Tribunal before directing the cancellation of the pattas given to them. They had continued in possession since 1980 and it is only on issuance of notice by the appropriate authority in April, 2001 that they came to know of the cancellation of the patta.

The writ petition filed, which was transferred to the Tribunal only made a prayer for mutation of the land in the name of the appellant for which patta was held by respondent Nos.1 & 2 and they were not parties.

It was further opined that the Tribunal having already reached a finding and issuing directions to the authorities for mutation of the plots in favour of the appellant, the hearing to be given by the Block Land and Reforms Officer would be of no consequence. The order dated 19.9.2000 of the Tribunal was, thus, set aside as also all proceedings thereto. However, no observations were made on the merit of the controversy and this setting aside was necessitated on account of violation of principles of natural justice. The Tribunal was directed to give a chance to the first two respondents herein to file their affidavits and thereafter pass an order on the merits of the controversy raised by the appellant.

17. The appellant is aggrieved by this remitting of the matter to the Appellate Tribunal. We may also note that this appeal was filed originally in the year 2004 and 14 years have elapsed since then.

18. We believe the endeavour of the appellant through the present proceedings has proved to be a fruitless exercise as by now the matter on being remanded would have been adjudicated, after giving opportunities to the first two respondents. The case has had a chequered factual history. No doubt the proceedings initiated under Section 44(2a) of the Acquisition Act in 1969 were set at naught by the order of the High Court dated 1.6.1973, but then only Golap Bala Saha Mondal had initiated the process while no such process was initiated by Jitendra Lal Paul. After the proceedings of the Revenue Officer were set aside on 1.6.1973, it appears that action was taken qua the land of Jitendra Lal Paul and that is how respondent Nos.1 & 2 have registered pattas issued by the State authorities in July, 1980 and claim to be in possession.

The appellant purchased the same land in 1987 and possibly at the behest of the heirs of Jitendra Lal Paul, woke up to file the writ petition in the year 1990. The appellant and the respondents herein, were made a party in those proceedings. Predicated on the reasoning of the order dated 1.6.1973, this petition succeeded by the order dated 17.7.1997. It is thereafter that the appellant filed the writ petition, which was transferred to the Tribunal without impleading respondent Nos.1 & 2 as parties in whom the land vested, rightly or wrongly. In such a situation the first two respondents, at least, have a right to be heard and that is what has weighed with the High Court while setting at naught the directions of the Tribunal dated 19.9.2000 and subsequent proceedings thereto, vide order in appeal dated 7.5.2004.

19. We are, thus, of the view that there is no merit in the appeal, which is dismissed leaving the parties to bear their own costs.

J. [J. Chelameswar]

J. [Sanjay Kishan Kaul]

New Delhi.

April 05, 2018.

Bhartiben Nayabha Ker and Ors Vs. Sidabha Pethabha Manke and Ors[ALL SC 2018 APRIL]

KEYWORDS:- CALCULATION OF COMPENSATION -RATE OF  INTEREST –

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DATE:-

SUPREME COURT OF INDIA

Bhartiben Nayabha Ker and Ors Vs. Sidabha Pethabha Manke and Ors

[Civil Appeal No 2697 of 2018 arising out of SLP(C) No 2927 of 2017]

Dr D Y CHANDRACHUD, J

1. The present appeal arises from a judgment of a learned Single Judge dated 15 March 2016, in a first appeal from the decision of the Motor Accident Claims Tribunal (MACT), Jamnagar.

2. The appellants are heirs and legal representatives of Nayabha Mapbha Ker who died as a result of a motor accident on 18 July 1993. He was travelling in a jeep bearing Registration No GBI-7896 which was being driven by the fourth respondent towards Mithapur. At about 3.00 am the first respondent who was driving a truck bearing Registration No.GJ-10-T-747, came from the opposite direction and dashed against the jeep. Nayabha was seriously injured and died during the course of the accident. His heirs filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the MACT, Jamnagar seeking compensation in the amount of Rs 13 lakhs.

By its award dated 19 July 1999 the Tribunal allowed the claim in the amount of Rs 7,78,000 together with interest at the rate of 12 % per annum. The appellants filed a first appeal before the High Court of Gujarat. The High Court, by its impugned judgment, allowed an additional amount of Rs 33,000 under the head of loss of life, expenses and consortium but reduced the rate of interest from 12 % p.a. to 9% p.a. Aggrieved by the judgment of the High Court, the claimants are in appeal.

3. The deceased was 41 years old at the time of the accident. He had acquired a B.A. and B.Ed. qualification. For seven years, he had served as President of the Taluka Panchayat. The deceased owned agricultural land. The Tribunal assessed the annual income of the deceased at Rs.81,000 comprised of his agricultural income and income from other sources.

Applying a multiplier of 12, the Tribunal computed an amount of Rs. 7.56 lakhs towards the loss of dependency. A total amount of Rs 7.78 lakhs was awarded inclusive of conventional heads. In appeal, the High Court came to the conclusion that the total income would work out to Rs 92,000 out of which one fourth would be deducted for personal expenses. Applying a multiplier of 14, the High Court awarded an additional amount of Rs 33,000. However, the rate of interest has been reduced to 9% per annum.

4. Basically two submissions have been urged on behalf of the appellants. First, it has been urged that the High Court did not allow for future prospects for which provision has to be made in view of the law settled by a Constitution Bench of this Court in National Insurance Company Limited v Pranay Sethi. Second, it has been urged that there was no justification for the High Court to reduce the award of interest from 9% p.a. to 6% p.a.

5. The High Court has computed the total income of the deceased at Rs 91,800 (Rs 55,000 being the income from agriculture and Rs 36,800 being the income from salary). In view of the decision of the Constitution Bench in Pranay Sethi (supra), an addition of 25% is warranted, on account of future prospects having regard to the age of the deceased. The total income, after accounting for future prospects at 25% would work out to Rs 1,14,000 per annum. An amount of one fourth would have to be reduced on account of personal expenses. The net income would work out to Rs 85,500. Applying a multiplier of 14 the total compensation would work out to Rs 11,97,000. Adding a further amount of Rs 70,000 under conventional heads as stipulated in the judgment 1 (2017) 13 SCALE 12 4 in Pranay Sethi (supra), the total compensation payable would work out to Rs 12,67,000.

6. We find no reason or justification for the High Court to reduce the award of interest to 6% p.a.. The rate of interest of 9% p.a. fixed by the Tribunal is restored.

7. The appeal is accordingly allowed by directing that the quantum of compensation shall stand enhanced to Rs 12,67,000 on which interest shall be payable at 9% p.a. from the date of the claim petition. There shall be no order as to costs.

CJI [DIPAK MISRA]

J [A M KHANWILKAR]

J [Dr D Y CHANDRACHUD]

New Delhi;

April 05, 2018