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Critical Analysis of Judgements of R.M. Lodha

By
Name of the student: S. Vishnu Ameya
Roll No.: 18 LLB 090
Semester: 6th Semester
Name of the Course: 5 year B.A. LLB Course
Name of the faculty: Mr. Bharat Kumar, Assistant Professor

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYAPRASTHA, SABBAVARAM, VISAKHAPATNAM-531035
ANDHRA PRADESH
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Acknowledgement

I would like to express my heartfelt gratitude to Bharat sir for alloting me the topic, ‘Justice
Rajendra Mal Lodha’s case analysis in a particular subject’. Working on this topic helped me
to understand the judgements of RM Lodha.
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Table of contents

1. Introduction

2. Case Analysis

1. Deep Trading Company Vs. Indian Oil Corporation and Ors. : AIR 2013 SC 1479

2. Reshma Kumari Vs. Madan Mohan and Ors. : (2013) 9 SCC 65

3. Bank of Maharashtra vs. Pandurang Keshav Gorwardkar and Ors.: AIR 2013 SC 2036

4. Swastik Gases P. Ltd. vs. Indian Oil Corporation Ltd.: (2013) 9 SCC 32

5. Shri Lal Mahal Ltd. vs. Progetto Grano Spa: (2014) 2 SCC 433

6. Assistant Engineer, Rajasthan State Agriculture Marketing Board, Sub-Division, Kota vs.
Mohan Lal: (2013) 14 SCC 543

7. GM, Sri Siddeshwara Co-operative Bank Ltd. and Ors. vs. Ikbal and Ors.: (2013) 10 SCC
83

8. Manohar Lal Sharma vs. The Principal Secretary and Ors.: (2014) 2 SCC 532

9. Pune Municipal Corporation and Ors. vs. Harakchand Misirimal Solanki and Ors.

10. Indus Airways Pvt Ltd Vs. Magnum Aviation Pvt Ltd : (2014) 12 SCC 539

11. Hindustan Petroleum Corporation Limited Vs. Dilbahar Singh: (2014) 9 SCC 102

12. Yogendra Pratap Singh Vs. Savitri Pandey: (2014) 10 SCC 730

13. Asis Kumar Samanta vs. State of West Bengal : (2014) 10 SCC 357

14. Guru Granth Saheb Sthan Meerghat Vanaras vs. Ved Prakash and Ors.: (2013) 7 SCC
622

15. N. Anantha Reddy vs. Anshu Kathuria and Ors.: (2013) 15 SCC 534
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Introduction

Justice R.M Lodha is a former Chief Justice of India who had authored several important
judgements. The present project would analyze 15 judgements of Justice R.M. Lodha in civil
matters and literal interpretaion.
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1. Deep Trading Company Vs. Indian Oil Corporation and Ors. : AIR 2013
SC 1479

Facts:

1. On 01.11.1998 a keroes/LDO dealership agreement for the retail sales distribution of

kerosene and light diesel oil in the region defined in the schedule, was concluded between the
first respondent — Indian Oil Corp, (in the short, 'The Corporation') and the Appellant —
Deep Traders (in the short, 'The Dealer'). The dealer reportedly perpetrated such
infringements during the dealership arrangement. The organization stopped all shipments and
services to the distributor with immediate effect, following the display caus notification dated
04.03.2004. On 12.03.2004.

2. Aggravated by the action taken by the company, the dealer brought before the District
Judge, Etawah, an order of injunction against the Corporation, a petition in compliance with
Section 9 of the Arbitration and Conciliation Act of 1996 (in brief, "1996 Act") to avoid the
provision of Kerosene / LDOs. A prohibition order against Etawah the District Judge passed
on 25.03.2004.

3. The Company appealed the District Judge Etawah's Order of 25.03.2004 and demanded a
temporary relief before the Allahabad High Court. On 12.07.2004, the High Court of
Allahabad declined to give the Company any temporary relief.

4. On 09 August 2004, the dealer demanded by written notice that, according to the
arrangement, the differences between the parties be assigned to the arbitrator. In the
application note, the dealer also claimed that the dealer would not be required to approach the
court under Section 11 of the 1996 Act if the Company would not select the arbitrator.

5. In the separate leave application before this Court, the company claims to have appealed
the order of the Allahabad Higher Court but was refused as an interlocutory judgment on
6.12.2004.

6. On approximately 06.12.2004, in compliance with Section 11(6), the dealer moved the
Chief Justice of the High Court of Allahabad to name an arbitrator since it did not operate on
the grounds of the arrangement. The Organization named Shri B. Parihar, Senior Manager
(LPG Engineering), to be its U.P., on 28 December 2004 when the proceedings were
pending. The sole arbitrator is the State Office.
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Issues:

1. Whether Respondent No. 1 has forfeited its right to appoint the arbitrator having not done
so after the demand was made and till the Appellant had moved the court under Section
11(6).

2. Whether the appointment of the arbitrator by Respondent No. 1 in the course of the
proceedings under Section 11(6) is of any legal consequence and the Chief Justice of the
High Court ought to have exercised the jurisdiction and appointed an arbitrator?

3. Whether in a case falling under Section 11(6), the opposite party cannot appoint an
arbitrator after the expiry of thirty days from the date of demand. This Court held that in
cases arising under Section 11(6).

Judgement:

Appellant (dealer) called upon respondent No. 1 (Corporation) by written notice to appoint
arbitrator in accordance with terms of Clause 29 of agreement. Appellant made application
under Section 11(6) for appointment of arbitrator as respondent No. 1 failed to act under
agreement. Respondent No. 1 appointed sole arbitrator after application under Section 11(6)
was already made by appellant.

Appellant's application under Section 11(6) dismissed by Chief Justice of Allahabad High
Court on ground that there was no reason to appoint any fresh arbitrator, as sought by
appellant, since arbitrator had already been appointed by respondent No. 1. Whether
impugned order of Chief Justice calls for any interference?--Held, "yes"--Despite demand by
appellant to appoint arbitrator, respondent No. 1 did not make appointment until application
was made under Section 11(6).

Thus, respondent No. 1 forfeited its right of appointment of arbitrator. Chief Justice of
Allahabad High Court ought to have exercised his jurisdiction under Section 11(6) in matter
of appointment of arbitrator appropriately. Appointment of arbitrator by respondent No. 1
during pendency of proceedings under Section 11(6).

Ratio Decidendi:

An Authority has to act in accordance with laid down procedure as provided under relevant
Act/Statutes.
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2. Reshma Kumari Vs. Madan Mohan and Ors. : (2013) 9 SCC 65

Facts:

1. A two-Judge Bench (S.B. Sinha and Cyriac Joseph, JJ.) proceeded to hear appeals on two
common questions, namely, (1) Whether multiplier specified in the Second Schedule
appended to the Motor Vehicles Act, 1988 (for short "the 1988 Act") should be scrupulously
applied in all cases? and (2) Whether for determination of the multiplicand, the 1988 Act
provides for any criterion, particularly as regards determination of future prospect.

Issues:

(1) Whether multiplier specified in the Second Schedule appended to the Motor Vehicles Act,
1988 (for short "the 1988 Act") should be scrupulously applied in all cases?

(2) Whether for determination of the multiplicand, the 1988 Act provides for any criterion,
particularly as regards determination of future prospect.

Judgement:

Motor Vehicles Act, 1988 - Sections 166 and 163A--Application for compensation made
under Section 166--While considering application made under Section 166. Multiplier
specified in Second Schedule can be taken as guideline for determination of amount of
compensation, Section 163A and Second Schedule in terms did not apply to claim made
under Section 166 Section 166 did not provide for amount of compensation according to
Second Schedule.

Under Motor Vehicles Act, 1988; Sections 163A and 166 and Section 163A vis-a-vis Section
166 which pertain to Principles relating to determination of liability and quantum of
compensation. Different for claims made under Section 163A and claims made under Section
166.

Motor Vehicles Act, 1988 as per Section 168, "Just compensation"Does not mean 'perfect' or
'absolute' compensation--Just compensation principle requires examination of particular
situation--obtaining uniquely in individual case.

When it comes to Motor Accident Compensation Multiplier method is to be applied for

Determination of compensation based on multiplier method as it is best available means and
most satisfactory method and must be followed invariably by Tribunals and Courts.
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Section 163-A of the MV Act contains a special provision as to payment of compensation on

structured formula basis, as indicated in the Second Schedule to the Act. The Second
Schedule contains a table prescribing the compensation to be awarded with reference to the
age and income of the deceased. It specifies the amount of compensation to be awarded with
reference to the annual income range of Rs. 3000 to Rs. 40,000. It does not specify the
quantum of compensation in case the annual income of the deceased is more than Rs. 40,000.
But it provides the multiplier to be applied with reference to the age of the deceased.

3. Bank of Maharashtra vs. Pandurang Keshav Gorwardkar and Ors.: AIR

2013 SC 2036

Facts: Paper and Pulp Conversions Ltd. had taken a loan from Bank of Maharashtra in 1980.
Company faced financial problems and a creditor filed winding up petition in the High Court
of Bombay, which was admitted on 14-1-1987. Company closed down in 1992. Company
approached the BIFR under Section 15(1) of Sick Industrial Companies (Special Provisions)
Act, 1985. On 1-9-1993, BIFR passed an order recommending to wind up the company. In
1995, Bank filed a suit for recovery of money, which was transferred to Debt Recovery
Tribunal. On 19-7-2001, DRT allowed the application. Thereafter recovery certificate was
issued. In the recovery proceedings, workmen of the company through their association made
an application contending that their claims should be registered before sale is held. Moveable
property of the company was sold by Recovery Officer and a sum of ` 4,70,55,000 was
realised by way of sale proceeds. Out of that amount, Three Crores was disbursed to the Bank
and rest was kept aside for satisfying claim of the workmen. Workmen moved the Bombay
High Court for appointment of provisional liquidator and for staying further proceedings
before DRT. The Court ordered winding up on 8-10-2004 and official liquidator was
appointed. Workmen filed writ petition praying to issue direction to Recovery Officer, DRT,
to recover the amount of Three Crore rupees disbursed to the bank and for a direction to the
Recovery Officer to adjudicate the claims of workmen and after such adjudication, release the
amount due to them in accordance with priority. High Court held that jurisdiction to
determine the payment and its priorities was totally vested with the DRT and therefore the
workmen should approach the DRT for determination of their claim. Bank challenged the
Judgment contending that workmen have no claim over security held by a bank and that the
dues of workmen can be adjudicated in appropriate court when the company is not in
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liquidation and that DRT has no jurisdiction to adjudicate claim of workman. It was also
contended that if the debtor company is in liquidation and security is sold in proceedings
before DRT/Recovery Officer, sale proceeds will be distributed by taking into account pari
passu charge to a limited extent of the workmen's portion as laid down in Proviso to Section
529(1)(c) of the Companies Act. On the other hand, workmen contended that winding up of a
company begins when the petition for winding up is presented. It was further contended that
the DRT has a duty to see that claims of workmen are satisfied before the sale proceeds is
disbursed to the bank. The matter was referred to a Bench of three Judges in view of
importance of the legal issue involved in the case. After an elaborate examination of the
statutory provisions and precedents holding the field, the Bench held that DRT does not have
the power to adjudicate claims of secured creditors such as workmen other than banks and
financial institutions and that the claims of the workmen, who claim to be entitled to payment
pari passu, have to be considered and adjudicated by the liquidator of the debtor company and
not by the DRT.

Issues:

1. Whether the claims of the workmen who claimed to be entitled to payment pari passu have
to be considered by the official liquidator or whether their claims have to be adjudicated upon
by the Debts Recovery Tribunal.

2. Whether for initiation of various proceedings by the banks and financial institutions under
the RDB Act, leave of the Company Court is necessary under Section 537 before a winding-
up order is passed against the company or before provisional liquidator is appointed under
Section 446(1) and whether the Company Court can pass orders of stay of proceedings before
the Tribunal, in exercise of powers under Section 442.

Judgement:

If the debtor company is not in liquidation nor any provisional liquidator has been appointed
and merely winding up proceedings are pending, there is no question of distribution of sale
proceeds among secured creditors in the manner prescribed in Section 19(19) of the 1993
Act.

Where a company is in liquidation, a statutory charge is created in favour of workmen in

respect of their dues over the security of every secured creditor and this charge is pari passu
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with that of the secured creditor. Such statutory charge is to the extent of workmen's portion
in relation to the security held by the secured creditor of the debtor company.

The above position is equally applicable where the assets of the debtor company have been
sold in execution of the recovery certificate obtained by the bank or financial institution
against the debtor company when it was not in liquidation but before the proceeds realized
from such sale could be fully and finally disbursed, the company had gone into liquidation. In
other words, pending final disbursement of the proceeds realized from the sale of security in
execution of the recovery certificate issued by the Debt Recovery Tribunal, if debtor
company becomes company in winding up, Section 529A read with Section 529(1)(c)
Proviso come into operation and statutory charge is created in favour of workmen in respect
of their dues over such proceeds.

The relevant date for arriving at the ratio at which the sale proceeds are to be distributed
amongst workmen and secured creditors of the debtor company is the date of the winding up
order and not the date of sale.

Where the winding up petition against the debtor company is pending but no order of
winding up has been passed nor any provisional liquidator has been appointed in respect of
such company at the time of order of sale by DRT and the properties of the debtor company
have been sold in execution of the recovery certificate and proceeds of sale realized and full
disbursement of the sale proceeds has been made to the concerned bank or financial
institution, the subsequent event of the debtor company going into liquidation is no ground
for re-opening disbursement by the DRT.

Ratio Decidendi: Adjudication of workmen's dues against debtor Company in liquidation

had to be made by liquidator.

4. Swastik Gases P. Ltd. vs. Indian Oil Corporation Ltd.: (2013) 9 SCC 32

Facts:

On about November, 2003, disputes arose between the parties as huge quantity of stock of
lubricants could not be sold by the Appellant. The Appellant requested the company to either
liquidate the stock or take back the stock and make payment thereof to the Appellant. The
parties met several times but the disputes could not be resolved amicably.
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On 16.07.2007, the Appellant sent a notice to the company claiming a sum of Rs. 18,72,332/-
under diverse heads with a request to the company to make payment of the above amount
failing which it was stated that the Appellant would pursue appropriate legal action against
the company.

Thereafter, on 25.08.2008 another notice was sent by the Appellant to the company invoking
arbitration clause wherein name of a retired Judge of the High Court was proposed as the
Appellant's arbitrator. The company was requested to name their arbitrator within thirty days
failing which it was stated that the Appellant would have no option but to proceed Under
Section 11 of the 1996 Act.

The company did not nominate its arbitrator within thirty days of receipt of the notice dated
25.08.2008 which led to the Appellant making an application Under Section 11 of the 1996
Act in the Rajasthan High Court for the appointment of arbitrator in respect of the disputes
arising out of the above agreement.

The company contested the application made by the Appellant, inter alia, by raising a plea of
lack of territorial jurisdiction of the Rajasthan High Court in the matter. The plea of the
company was that the agreement has been made subject to jurisdiction of the courts at
Kolkata and, therefore, Rajasthan High Court lacks the territorial jurisdiction in dealing with
the application Under Section 11.

Issues:

1. Whether, in view of Clause 18 of the consignment agency agreement dated 13.10.2002, the
Calcutta High Court has exclusive jurisdiction in respect of the application made by the
appellant under Section 11 of the Arbitration and Conciliation Act, 1996.

2. Whether parties by virtue of Clause 18 of the agreement have agreed to exclude the
jurisdiction of the courts at Jaipur.

Judgement:

Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c)
of the C.P.C., there remains no doubt that the Chief Justice or the designate Judge of the
Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue
of Clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur
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or, in other words, whether in view of Clause 18 of the agreement, the jurisdiction of Chief
Justice of the Rajasthan High Court has been excluded.

erritorial jurisdiction to entertain application under Section 11--Part of cause of action arose
in Kolkata--Part of cause of action also arose in Jaipur--Existence of exclusion clause in
agreement--Intention of parties, by virtue of Clause 18 of agreement--Is clear and
unambiguous that Courts at Kolkata shall have jurisdiction to consider application made by
appellant under Section 11--Parties have impliedly excluded jurisdiction of other courts--
Where contract specifies jurisdiction of courts at particular place and such courts have
jurisdiction to deal with matter, inference may be drawn that parties intended to exclude all
other courts--Very existence of jurisdiction clause in agreement makes intention of parties to
agreement quite clear and it is not advisable to read such clause in agreement like statute--
Held--In present case, only courts in Kolkata had jurisdiction to entertain disputes between
parties--Rajasthan High Court not have any territorial jurisdiction to entertain application
under Section 11--Appellant at liberty to pursue its remedy under Section 11 in Calcutta High
Court.

5. Shri Lal Mahal Ltd. vs. Progetto Grano Spa: (2014) 2 SCC 433

Facts:

By a contract dated 12.05.1994 between Shiv Nath Rai Harnarain (India) Company, New
Delhi (sellers) and Italgrani Spa, Naples, Italy (buyers) a transaction relating to 20,000 MT
(+/- 5%) of Durum wheat, Indian Origin (for short, "goods") for a price at US$ 162 Per MT
was concluded.

The buyers opened a letter of credit (L/C) on 17.06.1994 in favour of the sellers. The sellers
claim that all documents required under the L/C, including the S.G.S. India Limited
certificate, were submitted by them which were accepted by the buyers' bankers and payment
was duly released to the sellers.

The buyers nominated M.V. Haci Resit Kalkavan as the vessel for loading of the goods.
There was delay in shipment but that is not material for the purposes of this appeal. The ship
completed loading on 13.08.1994 and sailed for discharge port. The Bill of Lading was dated
08.08.1994.
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The sellers faxed a copy of SGS India certificate of weight, quality and packing to the buyers
on 16.08.1994. The buyers passed a copy of that certificate to SGS, Geneva with the request
to them to issue the necessary certificate under the sale contract which the buyers had entered
with 'Office Alegerien Interprofessional das cereals' (OAIC). After the goods had reached the
destination, the buyers sent a fax to the sellers on 23.08.1994 advising that analysis carried
out by S.G.S. Geneva showed the wheat loaded was soft common wheat and not durum
wheat as required under the contract. The buyers considered the sellers to be in breach of the
contract for shipping uncontractual goods and held sellers responsible for all losses/damages
both direct and indirect arising out of and the consequence of such breach.

The sellers on 31.08.1994 responded to the above communication and asserted that S.G.S.
India was an inspection agency; the wheat supplied was inspected by S.G.S. India at the time
of procurement and also before loading the vessel and the inspection agency had confirmed
that the wheat supplied met typical characteristics of Indian durum wheat and complied with
the specifications provided in the contract.

The buyers claimed arbitration on 04.11.1994 which was registered as case No. 11715A. The
Arbitral Tribunal, GAFTA proceeded to arbitrate the dispute. The Arbitral Tribunal, GAFTA
in its award dated 04.12.1997 accepted the buyers' case that in appointing S.G.S. Geneva,
their aim was to safeguard the performance of both contracts by having one company to
coordinate all operations regarding inspection, control and the issue of certificate relating to
the cargo and rejected the sellers' assertion that having loaded the goods, and presented a
certificate provided by an international superintendence company, they had fulfilled their
contractual obligations. The sellers' contention that S.G.S. India were nominated by the
buyers and they were agents for buyers was rejected. The Arbitral Tribunal, GAFTA,
concluded that wheat described on the certificate of quality and condition presented by the
sellers as durum wheat of Indian origin was, in fact, soft wheat. The certificate was held to be
uncontractual and with regard to description, it was held that sellers were in breach of
contract and the buyers were entitled to damages based on the difference between the contract
price and the FOB value of the goods as delivered and buyers were also entitled to any
further proven loss directly and naturally resulting in the ordinary course of events from the
breach.

Issues:
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1. Whether the court would have jurisdiction Under Section 34 to set aside an award passed
by the Arbitral Tribunal, GAFTA which was patently illegal or in contravention of the
provisions of the 1996 Act or any other substantive law governing the parties or was against
the terms of the contract.

Judgement:

Sections 34 & 48 r/w Section 7(1)(b) of Foreign Awards (Recognition and Enforcement) Act,
1961. Enforcement of Foreign Award. Public Policy, Application of Doctrine of Public
Policy of India for the purposes of Section 48(2)(b) is more limited than the application of the
same expression in respect of the domestic arbitral award. Refusal can be made if award is
against the fundamental policy of Indian Law; interest of India or justice or morality. Case of
appellant not falling under such categories--Foreign award not against public policy of India
The Appeal was dismissed.

6. Assistant Engineer, Rajasthan State Agriculture Marketing Board, Sub-

Division, Kota vs. Mohan Lal: (2013) 14 SCC 543
Facts:

Workman--Employer terminated workmen's services in violation of Section 25F. Workman

raised industrial dispute after 6 years of termination. Labour court did not keep in view
admitted delay of 6 years in raising industrial dispute by workman.

Though Limitation Act, 1963 not applicable to reference made under I.D. Act but delay in
raising industrial dispute definitely important circumstance which labour court must keep in
view at time of exercise of discretion irrespective of whether or not such objection raised by
either side--Judicial discretion exercised by labour court, thus, flawed and unsustainable.
Labour court not justified in directing reinstatement of workman--Reinstatement of workman
in facts and circumstances. Not appropriate relief, Division Bench of High Court clearly in
error in restoring award of labour court whereby reinstatement granted to workman. Single
Judge of High Court substituted order of reinstatement by compensation quantified at `
5,000--Interest of justice to be sub-served if in lieu of reinstatement, compensation of ` 1 lac
paid by employer to workman--Such compensation amount to carry interest @ 9% p.a.

Issues:
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1. Whether relief to the workman should be denied on the ground of delay or it should be
appropriately moulded is at the discretion of the Tribunal depending on the facts and
circumstances of the case. No doubt the discretion is to be exercised judicially"

2. Whether the Labour Court was justified in awarding relief of reinstatement in favour of the
workman who had worked as daily wager for two years.

Judgement:

Though Limitation Act, 1963 is not applicable to the reference made under the I.D. Act but
delay in raising industrial dispute is definitely an important circumstance which the labour
court must keep in view at the time of exercise of discretion irrespective of whether or not
such objection has been raised by the other side. The legal position laid down by Apex Court
in Gitam Singh case, (2013) 5 SCC 136 that before exercising its judicial discretion, the
labour court has to keep in view all relevant factors including the mode and manner of
appointment, nature of employment, length of service, the ground on which termination has
been set aside and the delay in raising industrial dispute before grant of relief in an industrial
dispute, must be invariably followed.

If the facts of the present case are seen, the position that emerges is this: the workman worked
as a work-charged employee for a period from 1.11.1984 to 17.2.1986 (in all he worked for
286 days during his employment). The services of the workman were terminated with effect
from 18.2.1986. The workman raised the industrial dispute in 1992, i.e. after 6 years of
termination. The labour court did not keep in view admitted delay of 6 years in raising the
industrial dispute by the workman. The judicial discretion exercised by the labour court is,
thus, flawed and unsustainable. The Division Bench of the High Court was clearly in error in
restoring the award of the labour court whereby reinstatement was granted to the workman.
Though, the compensation awarded by the single Judge was too low and needed to be
enhanced by the Division Bench but surely reinstatement of the workman in the facts and
circumstances is not the appropriate relief.

The interest of justice will be subserved if in lieu of reinstatement, the compensation of `

1,00,000 (one lac) is paid by the appellant (employer) to the respondent (workman). Such
payment shall be made by the appellant to the respondent within six weeks from today failing
which the same will carry interest @ 9% per annum.
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7. GM, Sri Siddeshwara Co-operative Bank Ltd. and Ors. vs. Ikbal and
Ors.: (2013) 10 SCC 83

Facts:

Writ petition filed by borrower questioning sale of mortgaged property in favour of auction-
purchaser bad-in-law. Availability of efficacious alternative remedy under Section 17--
Borrower committed default in repayment of housing loan. Bank issued notice to him under
Section 13(2) informing that if he failed to discharge outstanding dues within 60 days, Bank
may exercise action under Section 13(4) and mortgaged property shall be sold.

Borrower failed to make payment of outstanding loan amount as demanded in notice--Public

auction conducted. Bank issued sale certificate in favour of auction--purchaser being highest
bidder. Plea of borrower that mandatory requirements of Rule 9 not followed, which rendered
sale in favour of auction-purchaser bad-in-law. Single Judge and Division Bench of High
Court convinced by borrower's contention.

Single Judge thereby quashed sale certificate issued in favour of auction-purchaser and
notice--Borrower without availing efficacious remedy of appeal to Debts Recovery Tribunal
under Section 17 directly approached High Court under Article 226. Single Judge brushed
aside argument of alternative remedy. Single Judge in error in invoking extraordinary
jurisdiction under Article 226 in peculiar facts of the case. Division Bench erred in affirming
erroneous order of single Judge. Auction-purchaser, moreover, over and above sale price of
mortgaged property, discharged entire liability of borrower towards bank by making further
payment also--Impugned order not sustainable and set aside. Writ petition filed by borrower
before High Court dismissed.

Issues:

1. Whether Alternative remedy is a bar to Writ remedy.

Judgement:

The borrower had been chronic defaulter in repayment of the loan amount. Before issuance of
notice under Section 13(2) a demand notice was given by the Bank to the borrower calling
upon him to pay the outstanding loan amount but he did not comply with that notice.
Thereafter, Section 13(2) notice was given to him but he did not bother to pay the outstanding
dues. The secured interest which was immovable property was put up for auction more than
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six months after the notice under Section 13(2) was given to him by the Bank but still the
outstanding payment was not made. The auction was held in his presence and he did not raise
any objection about time of the auction. When the auction purchaser did not make the balance
amount in time and took about 11 months in paying the balance amount, the borrower gave
his written consent to the Bank that balance purchase price may be accepted from the auction
purchaser and sale certificate may be issued to him. Moreover, the writ petition was filed by
the borrower more than four years after the issuance of sale certificate. The above facts are
eloquent and indicate that the observations made by the single Judge that borrower was
victimized and a fraud was practiced upon, have no basis. The finding by the single Judge
that the sale of secured interest had been in violation of borrower's right to livelihood and the
observation of the Division Bench that noncompliance of Rule 9 has violated, the borrower's
right to property are misconceived. There was no justification whatsoever for the learned
single Judge to allow the borrower to by-pass the efficacious remedy provided to him under
Section 17 and invoke the extraordinary jurisdiction in his favour when he had disentitled
himself for such relief by his conduct. The single Judge was clearly in error in invoking his
extraordinary jurisdiction under Article 226 in light of the peculiar facts indicated above. The
Division Bench also erred in affirming the erroneous order of the single Judge.

Ratio Decidendi

Writ petition, Availability of alternative remedy. Alternative remedy not absolute bar to
exercise of extraordinary jurisdiction under Article 226. But where statute provides
efficacious and adequate remedy, High Court will do well in not entertaining petition under
Article 226. On misplaced considerations, statutory procedures cannot be allowed to be
circumvented.

8. Manohar Lal Sharma vs. The Principal Secretary and Ors.: (2014) 2
SCC 532

Facts:

The present case was revolving around the power of CBI and the approval of Central
Government for investigation by CBI.

Issues:
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Whether the approval of the Central Government is necessary under Section 6A of the Delhi
Special Police Establishment Act, 1946 ("DSPE Act") in a matter where the
inquiry/investigation into the crime under the Prevention of Corruption Act, 1988.

Judgement:

Section 6 and Section 6A are different provisions and they operate in different fields, but the
principle of law laid down in respect of Section 6 can be extended while considering
applicability of Section 6A to the Court-monitored investigations.

If Section 6 necessitates the prior sanction of the State Government before investigation is
carried out by the CBI in terms of that provision and the principle of law laid down by the
Constitution Bench of this Court is that the constitutional courts are empowered to direct the
investigation of a case by CBI and in such cases no prior sanction of the State Government is
necessary under Section 6 of the DSPE Act, there is no reason why such principle is not
extended in holding that the approval of the Central Government is not necessary under
Section 6A of the DSPE Act. In a matter where the inquiry/investigation into the crime under
the PC Act is being monitored by the Court .

It is the duty of this Court that anti-corruption laws are interpreted and worked out in such a
fashion that helps in minimizing abuse of public office for private gain fact that the
investigation is monitored by the constitutional court is itself an assurance that
investigation/inquiry by the CBI is not actuated with ulterior motive to harass any public
servant and the investigating agency performs its duties and discharges its responsibility of
fair and impartial investigation uninfluenced by extraneous considerations. Approval of the
Central Government is not necessary under Section 6A of the DSPE Act in a matter where
inquiry/investigation into the crime under the PC Act is being monitored by the Court.

9. Pune Municipal Corporation and Ors. vs. Harakchand Misirimal

Solanki and Ors.

Facts:

The current appealw as filed challenging land acquisition. Under Section 24(2) land
acquisition proceedings initiated under Land Acquisition Act, 1894 by legal fiction, deemed
to have lapsed where award has been made five years or more prior to commencement of
2013 Act and possession of land is not taken or compensation has not been paid.
 P a g e | 19

Issues:

1. Whether land acquisistion act, 1894 was fair and just in light of act of 2013.

Judgement:

Legal fiction under Section 24(2) comes into operation as soon as conditions stated therein
are satisfied. Admitted position that compensation so awarded neither paid to
landowners/persons interested nor deposited in court. Deposit of compensation amount in
Government treasury is of no avail and cannot be held to be equivalent to compensation paid
to landowners/persons interested.

For purposes of Section 24(2), compensation shall be regarded as "paid" if compensation has
been offered to person interested and such compensation has been deposited in court where
reference under Section 18 of Land Acquisition Act, 1894 (1894 Act) can be made on
happening of any of contingencies contemplated under Section 31(2) of 1894 Act--In other
words, compensation may be said to have been "paid" within meaning of Section 24(2).

While enacting Section 24(2), Parliament definitely had in its view Section 31 of the 1894
Act. From that one thing is clear that it did not intend to equate the word "paid" to "offered"
or "tendered". But at the same time, we do not think that by use of the word "paid".

1894 Act being an expropriatory legislation has to be strictly followed. The procedure, mode
and manner for payment of compensation are prescribed in Part V (Sections 31-34) of the
1894 Act. The Collector, with regard to the payment of compensation, can only act in the
manner so provided. It is settled proposition of law (classic statement of Lord Roche in Nazir
Ahmad v. King Emperor, AIR 1936 PC 253 (SC) (2), that where a power is given to do a
certain thing in a certain way, the thing must be done in that way or not at all. Other methods
of performance are necessarily forbidden.

10. Indus Airways Pvt Ltd Vs. Magnum Aviation Pvt Ltd : (2014) 12 SCC
539

Facts:

1. On 19.02.2007 and 26.02.2007, the purchasers placed two purchase orders for supply of
certain aircraft parts with respondent No.1, M/s. Magnum Aviation Pvt. Ltd. (hereinafter
referred to as ‘supplier’). In respect of these purchase orders, the purchasers also issued two
post-dated cheques dated 15.03.2007 for a sum of Rs.34,57,164/- and 20.03.2007 for a sum
 P a g e | 20

of Rs.15,91,820/-. The said cheques were issued by way of advance payment for the purchase
orders. One of the terms and conditions of the contract was that the entire payment would be
given to the supplier in advance. The supplier says that the advance payment was made by
the purchasers as it had to procure the parts from abroad.

2. These cheques got dishonoured when they were presented on the ground that the
purchasers had stopped payment.

3. It is not in dispute that the supplier received letter dated 22.03.2007 from the purchasers
cancelling the purchase orders and requesting the supplier to return both the cheques.

4. The supplier sent response to the letter dated 22.03.2007 on 23.03.2007 asking the
purchasers as to when the supplier could collect the payment. Thereafter, on 12.04.2007, the
supplier sent a notice to the purchasers and then filed a complaint against the purchasers
under Section 138 of the N.I. Act before the Court of Additional Chief Metropolitan
Magistrate, New Delhi.

5. On 22.05.2007, the concerned Additional Chief Metropolitan Magistrate took cognizance

of the alleged offence and issued summons to the purchasers.

6. The purchasers challenged the order issuing summons in a revision petition under Section
397 of the Code of Criminal Procedure, 1973 (for short, ‘Code’). The Additional Sessions
Judge, after hearing the parties, allowed the revision petition vide order dated 02.09.2008 and
quashed the process issued by the Additional Chief Metropolitan Magistrate.

7. The supplier challenged the order of the Additional Sessions Judge in a petition under
Section 482 of the Code before the High Court. The High Court allowed the petition, set
aside the order of the Additional Sessions Judge and restored the order of the Additional
Chief Metropolitan Magistrate issuing process to the purchasers.

8. The Delhi High Court following its earlier decision in Mojj Engineering[1] held that the
issuance of a cheque at the time of signing such contract has to be considered against a
liability, as the amount written in the cheque is payable by the person on the date mentioned
in the cheque.

Issues:
 P a g e | 21

1. Whether the post-dated cheques issued by the appellants (‘Purchasers’) as an advance

payment in respect of purchase orders could be considered in discharge of legally enforceable
debt or other liability.

2. Whether the dishonour of such cheques amounts to an offence under Section 138 of the
Negotiable Instruments Act, 1881.

Judgement:

The interpretation of the expression ‘for discharge of any debt or other liability’ occurring in
Section 138 of the N.I. Act is significant and decisive of the matter.

The explanation appended to Section 138 explains the meaning of the expression ‘debt or
other liability’ for the purpose of Section 138. This expression means a legally enforceable
debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has
been issued in discharge of any debt or other liability.

The explanation leaves no manner of doubt that to attract an offence under Section 138, there
should be legally enforceable debt or other liability subsisting on the date of drawal of the
cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated
liability is sine qua non for bringing an offence under Section 138.

If a cheque is issued as an advance payment for purchase of the goods and for any reason
purchase order is not carried to its logical conclusion either because of its cancellation or
otherwise, and material or goods for which purchase order was placed is not supplied, the
cheque cannot be held to have been drawn for an exiting debt or liability.

If a cheque is issued as an advance payment for purchase of the goods and for any reason
purchase order is not carried to its logical conclusion either because of its cancellation or
otherwise and material or goods for which purchase order was placed is not supplied by the
supplier, in our considered view, the cheque cannot be said to have been drawn for an
existing debt or liability.

The Court partly allowed the Appeal.

11. Hindustan Petroleum Corporation Limited Vs. Dilbahar Singh: (2014)

9 SCC 102
 P a g e | 22

Facts:

The respondent-landlord filed an ejectment petition under Section 13(3)(b) of the Haryana
(Urban Control of Rent and Eviction) Act, 1973 (hereinafter for short 'the Act') on the ground
of bonafide need which was allowed by the Rent Controller vide order dated 3.1.2001. In
appeal preferred by the appellant-tenant, the Appellate Authority vide order dated 9.5.2001
set aside the order passed by the Rent Controller holding that there was no bonafide need.
Against the said order dated 9.5.2001 of the Appellate Authority, the respondent-landlord
filed a revision petition under Section 15(6) of the Act before the High Court of Punjab &
Haryana at Chandigarh, which has been allowed by the impugned judgment and order. The
appellant-tenant filed an SLP to the Supreme Court.

Issues:

1. Whether a High Court exercise revisional jurisdiction in capacity of an Appellate Court.

Judgement:

There was a lot of ambiguity regarding the expressions ‘Legality and propriety’ under
Section 15(b). The 3 Judge bench listed the matter to the Chief Justice Bench.

12. Yogendra Pratap Singh Vs. Savitri Pandey: (2014) 10 SCC 730

Facts:

The appellant filed a complaint under Section 138 of the Negotiable Instruments Act against
respondent No.1 Smt. Savitri Pandey in the Court of Additional Civil Judge
(J.D.)/Magistrate, Sonbhadra in the State of Uttar Pradesh.

The respondent's case was that four cheques issued by the accused-respondent in his favour
were dishonoured, when presented for encashment. A notice calling upon the respondent-
drawer of the cheque to pay the amount covered by the cheques was issued and duly served
upon the respondent as required under Section 138 (c) of The Negotiable Instruments Act,
1881.

No payment was, however, made by the accused till 7th October, 2008 when a complaint
under Section 138 of the Act aforementioned was filed before the Magistrate. Significantly
enough the notice in question having been served on 23rd September, 2008, the complaint
presented on 7th October, 2008 was filed before expiry of the stipulated period of 15 days.
 P a g e | 23

The Magistrate all the same took cognizance of the offence on 14th October, 2008 and issued
summons to the accused, who then assailed the said order in a petition under Section 482 of
the Cr.P.C. before the High Court of Judicature at Allahabad.

The High Court took the view that since the complaint had been filed within 15 days of the
service of the notice the same was clearly premature and the order passed by the Magistrate
taking cognizance of the offence on the basis of such a complaint is legally bad. The High
Court accordingly quashed the complaint and the entire proceedings relating thereto in terms
of its order impugned.

Issues:

1. Whether the complaint under Section 138 of the NI Act was maintainable when the
stipulated period of 15 days of the receipt of the notice as provided in clause (c) of the
proviso appended to Section 138 had not expired.

Judgement:

Section 142 of the NI Act prescribes the mode and so also the time within which a complaint
for an offence under Section 138 of the NI Act can be filed. A complaint made under Section
138 by the payee or the holder in due course of the cheque has to be in writing and needs to
be made within one month from the date on which the cause of action has arisen under clause
(c) of the proviso to Section 138.

The period of one month under Section 142(b) begins from the date on which the cause of
action has arisen under clause (c) of the proviso to Section 138. However, if the complainant
satisfies the Court that he had sufficient cause for not making a complaint within the
prescribed period of one month, a complaint may be taken by the Court after the prescribed
period. Now, since our answer to question (i) is in the negative, we observe that the payee or
the holder in due course of the cheque may file a fresh complaint within one month from the
date of decision in the criminal case and, in that event, delay in filing the complaint will be
treated as having been condoned under the proviso to clause (b) of Section 142 of the NI Act.

complaint filed before the expiry of 15 days from the date of receipt of notice issued under
clause (c) of the proviso to Section 138 is not maintainable, the complainant cannot be
permitted to present the very same complaint at any later stage.

13. Asis Kumar Samanta vs. State of West Bengal : (2014) 10 SCC 357
 P a g e | 24

Facts:

Appellants were recruited directly to State Forest Service whereas Private Respondents were
promoted and were given retrospective seniority to State Forest Service.

Issues:

Whether retrospective promotion or seniority could be granted or not

Judgement:

Vacancy against promotion quota in cadre could not be processed because of interim order
passed by High Court restraining authorities from giving them promotion to State Forest
Service. It was only thereafter selection process for promotion commenced, and it was for
this reason that Public Service Commission recommended that Private Respondents be given
retrospective seniority. Legal position in U.D. Lama's case squarely applied to present fact
situation. Private Respondents could not have been made to suffer because of intervention by
Court by way of interim relief. State Government was not in position to proceed with
selection by way of promotion under Rules in view of stay order passed by Court. No sooner
stay order was vacated, process for selection by way of promotion commenced. Impugned
seniority list could not be said to be legally flawed.

The Court dismissed the Appeal.

14. Guru Granth Saheb Sthan Meerghat Vanaras vs. Ved Prakash and
Ors.: (2013) 7 SCC 622

Facts:

1. The Appellant filed an FIR (P.S. Case No. 8 of 2003) at Dharampura Police Station against
Respondent Nos. 1 to 4 for commission of the offences under Sections 420, 467, 468 and
120B, Indian Penal Code alleging that they had executed a false, forged and fabricated will
on 02.07.1997 in the name of late Devkinandan Sahay with the intention to grab his property.
It was further alleged that based on the fabricated will, these Respondents had obtained a
mutation order dated 24.11.1999 from the Tehsildar, Ajaygarh. On completion of
investigation in the above F.I.R., the challan has been filed against the above Respondents
 P a g e | 25

and trial against them is going on in the Court of Judicial Magistrate, First Class, Ajaygarh,
Panna (M.P.).

2.On 09.02.2004, the Appellant brought legal action in representative capacity against the
Respondents Nos. 1 to 4 by way of a civil suit in the Court of District Judge, Panna (M.P.)
praying for a decree for declaration of title, perpetual injunction and possession in respect of
disputed lands and for annulling the sale deed dated 14.08.2003 and the mutation order dated
24.11.1999. In the suit, reference of will forged by the Respondent Nos. 1 to 4 has been
made. 3. The said suit has been transferred to the Court of Additional District Judge, Panna
and bears Civil Suit No. 10A of 2006. The Respondent Nos. 1 to 4, who are Defendants in the
suit, have filed their written statement on 19.06.2006. The trial Court has framed issues on
the basis of the pleadings of the parties on 21.09.2007. On 21.04.2008, the Defendants
(Respondent Nos. 1 to 4 herein) filed an application under Section 10 read with Section 151,
Code of Civil Procedure for staying the proceedings in the civil suit during the pendency of
above-referred criminal case.

4. The Additional District Judge, Panna, by his order dated 21.04.2008 dismissed the
application for staying the proceedings in the suit.

Issues:

1. Whether the High Court was justified in staying the proceedings.

Judgement:

High Court was not at all justified in staying the proceedings in the civil suit till the decision
of criminal case. Firstly, because even if there is possibility of conflicting decisions in the
civil and criminal courts, such an eventuality cannot be taken as a relevant consideration.
Secondly, in the-facts of the present case there is no likelihood of any embarrassment to the
defendants (respondent Nos. 1 to 4 herein) as they had already filed the written statement in
the civil suit and based on the pleadings of the parties the issues have been framed . In this
view of the matter, the outcome and/or findings that may be arrived at by the civil court.

15. N. Anantha Reddy vs. Anshu Kathuria and Ors.: (2013) 15 SCC 534

Facts:

The Respondent No. 1 herein filed a suit for declaration and perpetual injunction against the
Greater Hyderabad Municipal Corporation (Respondent No. 2 herein) and the Assistant City
 P a g e | 26

Planner (Respondent No. 3 herein). The Appellant, who is Plaintiff's neighbour, made
applications for his impleadment in the suit and the application for interim relief.  The trial
court heard the Plaintiff and the proposed party allowed the said applications. The above
order of the trial court was challenged by the Respondent No. 1 (Plaintiff) before the High
Court. The High Court, after hearing the parties, by its order dated 08.06.2011 dismissed the
Civil Revision Petitions. The Respondent No. 1 then made applications for review of the
order of the High Court. The High Court by the impugned order recalled its earlier order
dated 08.06.2011 and directed the trial court to consider the applications for impleadment
afresh.

Issues:

Whether or not the first Respondent herein would be a proper and necessary party having
regard to the nature of the relief prayed for in the present suit is a matter to be considered
independently, irrespective of impleadment of the first Respondent herein in the earlier suit,
which was filed only for injunction.

Judgement

The High Court had a fresh look at the question whether the Appellant could be impleaded in
the suit filed by the Respondent No. 1 and, in the light of the view which it took, it recalled
its earlier order. The course followed by the High Court is clearly flawed. The High Court
exceeded its review jurisdiction by reconsidering the merits of the order. The review
jurisdiction is extremely limited and unless there is mistake apparent on the face of the
record, the order/judgment does not call for review. The review does not permit rehearing of
the matter on merits.

The High Court was fully conscious of the factual and legal position while it was considering
the civil revision petitions filed by the present Respondent No. 1.

The Court admitted the appeal.

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