Cantonment Board, Meerut &Amp; ... vs K.P. Singh &Amp; Ors on 1 February, 2010
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Supreme Court of India
Bench: M Sharma], Sirpurkar]
"REPORTABLE"
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO._1091__OF 2010
(Arising out of SLP (C) No. 11462 of 2007)
Cantonment Board, Meerut & Anr. .... Appellants Versus
K.P. Singh & Ors. .... Respondents JUDGMENT
V.S. SIRPURKAR, J.
1. Leave granted.
2. Correct scope and applicability of the maxim actus curiae neminem gravabit
falls for consideration in this appeal. This appeal has been filed challenging
the judgment in Civil Miscellaneous Writ Petition No.60135 of 2006 passed by
the High Court of Judicature at Allahabad. The High Court, by the impugned
order, has held that the respondents herein, 2
namely, Shri K.P. Singh and Gaurav Traders would be entitled to the refund of
the amount deposited by them over and above the bid given by them. Cantonment
Board, the appellant herein has been directed to dispose of the application
made by respondent Nos. 1 and 2 for refund expeditiously. Needless to say, in
the light of the observation made by the High Court favouring the refund of
amount, few facts would be necessary.
3. Under Section 60 of the Cantonment Act, the Cantonment Board was empowered
to impose toll tax. Accordingly, on 08.01.2005, a Gazette Notification was
issued for the imposition of the toll tax on such commercial motor vehicles
passing through the Meerut Cantonment.
4. In pursuance of this, a tender was floated and bids were invited relating to
2005-2006 for levying toll tax upon the entry of the commercial motor vehicles
within the territorial limits of Meerut Cantonment in the sense that the
bidders were expected to pay the agreed amount to the Cantonment Board and the
successful bidder was entitled to levy and collect toll tax upon the entry of
the commercial motor vehicles in the territorial limits of Meerut. Twenty
persons submitted their tenders in response to the notice inviting tenders
whereupon the tender submitted by respondent Nos.1 and 2 herein jointly came to
be accepted. The highest offer by respondent Nos. 1 and 2 for the collection
between 01.10.2005 to 04.10.2006 was for 3,57,30,000/-. This was challenged by
one Gajraj 3
Singh. Earlier, validity of the imposition of tax on the commercial vehicles
by the Cantonment Board was challenged by the Civil Writ Petition Tax No.1601
of 2005. That Writ Petition was allowed and the High Court quashed the
Notification dated 08.01.2005. The Cantonment Board filed a Special Leave
Petition against the impugned order of the Allahabad High Court dated
23.03.2006 and leave was granted resulting in the main Notification authorizing
the appellant to collect toll tax remaining intact.
5. The appellant, therefore, issued a fresh Notification inviting tenders, on
14.09.2006. By this, the contract for collection of tolls for the period of one
year w.e.f 05.10.2006 to 04.10.2007 was advertised. Again, respondent Nos.1 and
2 herein stood as the highest bidders in the auction dated 27.09.2006 and
offered the highest bid of Rs.3,61,57,727/- (Rs.1,02,000/- per day) for the
said period of one year. This was approved by the appellant vide its resolution
No.229 dated 29.09.2006. After the finalization of the tender, respondent No.5
Umesh Kumar submitted an application offering to pay 1,05,000/- per day with
the advance deposit of 5 days at the said rate in the account of the Cantonment
Board. A Writ Petition was filed by respondent No.5 being Writ Petition
No.60135 of 2006 claiming therein a Writ of Mandamus commanding the appellant
herein to start the process of holding fresh auction or tenders for letting out
the rights to collect toll tax from the commercial motor vehicles passing 4
through the territorial limits of Meerut Cantonment by issuing advertisement
within the stipulated time. It was further prayed that till the finalization of
fresh auction, respondent No.5 should be allowed to pay at the rate of
1,25,000/- per day for the collection of toll tax.
6. Ordinarily, this Writ Petition should never have been entertained. However,
it was actually entertained and the High Court at the time of passing the
orders on the application for stay found that though respondent No.5 was
willing to pay Rs.1,25,000/- per day for the right to collect toll tax, yet
respondent Nos.1 and 2 herein had suo motu made an offer to pay Rs.1,31,000/-
per day for the right to collect toll tax. The High Court as an interim order
directed respondent Nos.1 and 2 to deposit Rs.1,31,000/- per day to levy and
collect the toll tax during the interregnum. Some other orders were also passed
with certain directions. This order was passed on 08.11.2006.
7. The Writ Petition was opposed by the appellant on the ground that the claim
made by respondent No.5 was contrary to the terms of the tender and that in
fact, there was collusion between the respondents who had colluded and quoted
lesser price and that was to result into losses to the appellant-Cantonment
Board.
5
8. It so happened thereafter that the said auction not having been approved by
the senior officers, a fresh auction was ordered for letting out the rights to
collect the toll. In that view, the Writ Petition was not pressed by respondent
No.5, and as a result, the petition was dismissed as not pressed. However, the
High Court did not stop at that and noted that the original bid by respondent
Nos.1 and 2 was only for Rs.1,02,000/- w.e.f. 09.11.2006 for which they had
been given the right of collection of toll tax. The High Court, therefore, took
the view that since the petition was dismissed, the interim order, if any, more
particularly dated 08.11.2006 would merge with the final order and if the
petition was dismissed, it would mean as if the petition had not been filed and
if any of the parties had gained something under the interim order that effect
of the interim order should be neutralized. Since the petition had been
dismissed as not pressed, the interim order dated 08.11.2006 accepting the bid
of the respondent Nos. 5 and 6 of Rs.1,31,000/- would merge with the final
order and respondent No.1 and 2 would be entitled to get refund of the excess
amount of Rs. 29,000/- per day since their final offer which was accepted by
the Cantonment Board was only of Rs.1,02,000/-. The Court took the view that in
view of the maxim actus curiae neminem gravabit, no party could be allowed to
take benefit of its own wrongs by getting the interim orders and thereafter
blaming the Court. In that view, the High Court directed refund in favour of
respondent Nos. 1 and 2 of the excess amount 6
i.e. Rs. 29,000/- per day w.e.f. 09.11.2006 till the end of the contract
period. It is this order which has fallen for our consideration at the instance
of the Cantonment Board.
9. It was argued by the learned Additional Solicitor General of India, Shri G.
Banerjee that the High Court was completely in error firstly, in relying upon
the maxim actus curiae neminem gravabit and on that basis ordering the refund
of the amount. According to Shri Banerjee, there was no question of any
prejudice being caused to respondent Nos.1 and 2 on account of any order passed
by the High Court much less the order dated 08.11.2006. He pointed out that in
fact, the High Court was only guarding the interests of the Cantonment Board
inasmuch as the petitioner before the High Court (respondent No.5) had offered
to pay at the rate of Rs.1,25,000/- as against the accepted bid of
Rs.1,02,000/- by respondent Nos.1 and 2 herein. It was the voluntary offer of
respondent Nos.1 and 2 who matched the offer by Shri Umesh Kumar and accepted
it for the amount of Rs. 1,31,000/- per day. In lieu thereof, respondent Nos.1
and 2 acquired the rights to collect the toll tax. This offer was given by
these respondents with open eyes and there was no question of prejudice being
caused because of the interim arrangement ordered by the High Court by the
interim order dated 08.11.2006 and, therefore, the High Court was 7
completely unjustified in ordering the refund merely because the Writ Petition
was dismissed as not pressed.
10. As against this, Dr. Dhawan, learned Senior Counsel supported the order,
contending that but for the order, the petitioners would have been required to
pay at the rate of Rs. 1,02,000/- per day and ultimately the Writ Petition in
which the said order was passed as the interim arrangement thereby was
dismissed. The respondent Nos.1 and 2 would have a right to refund of the
amount paid by them in excess of their original offer because that would be the
natural result of the dismissal of the Writ Petition.
11. In our view, the High Court has completely misunderstood the maxim actus
curiae neminem gravabit and has committed an error in applying it to the facts
of the present case. For applying the maxim, it has to be shown that any party
has been prejudiced on account of any order passed by the Court. We do not find
any prejudice having been caused to the respondents herein. If the High Court
had decided to entertain the Writ Petition filed by the 5th respondent,
ordinarily, it could have stayed the whole process thereby depriving the first
and the second respondents of their rights to collect the toll tax on the basis
of their bid in the tender. However, the High Court did not want to stop the
process of tax collection. The tax had to be collected since the Notification
imposing the tax was intact (thanks to the orders passed by this Court in SLP
No.7682/2006). 8
Then it was a question as to at what rates should the rights to collect the
toll tax be leased out and to whom. The respondent No.5-petitioner had made an
offer of Rs.1,25,000/- per day. This offer was matched by respondent Nos.1 and
2 by raising the bid to Rs.1,31,000/- per day. We are sure that respondent
Nos.1 and 2 thus got into this arrangement with the open eyes. Nobody could
even think that the respondents would unnecessarily suffer losses for matching
and exceeding the offer made by respondent No.5, after all they were doing
business and they would certainly not be interested in suffering the losses by
matching the offer made by the 5th respondent and exceeding the same by
Rs.6,000/- per day. They entered into this arrangement with absolutely open
eyes. Even ultimately, the petition was not dismissed as being a merit less
petition. The respondent No.5 chose not to press the petition in view of the
fact that a fresh auction was ordered by the appellant herein perhaps because
the higher authorities did not choose to give sanction for all this exercise by
the appellant. Therefore, there was no question of respondent Nos.1 and 2
suffering any prejudice because of the interim order passed by the High Court.
They were welcome not to make any offers. All that would have happened was that
respondent No.5 would have then acquired the rights to collect the toll tax and
not the respondent Nos.1 and 2. But they did not want to lose their right to
collect the toll tax and it is with this idea that they matched the offer of
respondent No.5 and exceeded it by Rs.6,000/- per 9
day. There is, thus, no question of any prejudice having been suffered by
respondent Nos.1 and 2. The High Court, in our opinion, has completely misread
the law laid down in Karnataka Rare Earth & Anr. v. Senior Geologist
Department of Mines & Geology & Anr. [2004 (2) SCC 783]. The concerned
paragraph which has also been quoted by the High Court is as under:
"The doctrine of actus curiae neminem gravabit is not
confined in its application only to such acts of the Court which are erroneous;
the doctrine is applicable to all such acts as to which it can be held that the
Court would not have so acted had it been correctly apprised of the facts and
the law. It is the principle of restitution which is attracted. When on account
of an act of the party, persuading the Court to pass an order, which at the end
is held as not sustainable, has resulted in only 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, then the successful party finally held
entitled to a relief, assessable in terms of money at the end of the
litigation, is entitled to be compensated in the same manner in
which the parties would have been if the interim order of the Court would not
have been passed. The successful party can demand;(a) the delivery of benefit
earned by the opposite party under the interim order of the Court, or (b) to
make restitution for what it has lost."
12. Applying the principles in the above paragraph, it was not on account of
respondent No.5 that the Court was persuaded to pass an order. In fact the 5th
respondent had given its offer. However, the first and second respondents not
only matched that offer but they exceeded the 10
same. This was the voluntary action on the part of respondent Nos.1 and 2 and
they were not directed by the order to match the order of respondent No.5. It
was their voluntary act which was well calculated to earn profits by winning
the rights to collect the toll tax. Secondly, the Writ Petition was not held to
be untenable nor was it held that respondent No.5 was not entitled to file the
Writ Petition, in fact, respondent No.5 did not press the Writ Petition at all.
13. There was no question of respondent Nos.1 and 2 having suffered any
impoverishment which they would not have suffered but for the order of the
Court and the act of respondent No.5. In fact, it was on account of the
voluntary act of respondent Nos.1 and 2 that the Court was persuaded to pass
the order dated 08.11.2006 allowing respondent Nos.1 and 2 to collect the toll
tax. There was no question of any benefit having been earned by respondent No.5
under the interim order nor was there any question of making restitution of
anything that was lost by respondent Nos.1 and 2 since they had lost nothing.
14. In the above reported decision, the leases in favour of the appellants were
challenged by way of the public interest litigation and grants in their favour
were quashed. They filed Writ Appeals and approached this Court. When they
approached this Court, there was an interim order by which this Court had
directed that the renewals of the exceeding grants in favour of 11
the appellants would continue till the next date of hearing. This order was
also modified and the lease hold rights were directed to continue till further
orders of the Court. The Karnataka Government, after the dismissal of appeals,
issued orders calling upon the appellants to pay the price calculated at the
minimum rates. The order was challenged by way of a Writ Petition which was
dismissed and that is how the matter reached this Court. It was argued that the
act of the appellants quarrying the granite stones and exporting the same was
accompanied by payment of royalty and issuance of transport permits by the
authorities of the State and though done under the interim orders of this Court
was nevertheless a lawful and bona fide act. According to the appellant, the
mining lease in favour of the appellants were bound to be held to be valid in
view of the interim orders passed by this Court that they could not be held
liable for the payment of price of granite blocks. The Court held that the
demand of the State of Karnataka of the price of mineral could not be said to
be a levy of penalty or penal action. It was further observed that though the
appellants were allowed the mining by way of an interim order during the
pendency of the earlier appeals, the factual transport permits were obtained by
the appellants only after the dismissal of their appeals. The court recorded a
final order that the appellants' plea that they were ignorant of the dismissal
of the appeals could not be accepted and entertained. The Court then referred
to the decision in South Easter 12
Coalfields Ltd. v. State of M.P. & Ors. [2003 (8) SCC 648] where the
doctrine of actus curiae neminem gravabit was considered and elaborated,
holding this doctrine to be the principle of restitution. Considering the facts
of the case in paragraph 11, this Court observed that: " but for the
interim orders passed by this Court there was no difference between the
appellants and any other person raising, without any lawful authority, any
mineral from any land, attracting applicability of sub-Section(5) of Section 21.
As the appellants have lost from the Court, they cannot be allowed to retain the
benefit earned by them under the interim orders of the
Court. The Court affirmed the High Court's finding that the
appellants were liable to be placed in the same position in which they would
have been if this Court would not have protected them by issuing interim
orders."
15. We have already explained the observations of this Court in paragraph 10 in
the light of the facts of this case and it is clear that the appellants cannot
take advantage and claim refund because of the fact that this was their
voluntary offer and they were not directed to pay the amount that they did. In
view of this, we find that the High Court's order is quite unsustainable. We
therefore, set aside that order and hold that the Cantonment Board would not be
liable to refund anything in favour of respondent Nos.1 and 2 who have enjoyed
the rights of collection of toll on the basis of their own voluntary offer made
before the High Court which the High Court has merely accepted by its order
dated 08.11.2006. With this 13
observation, the appeal is allowed. It shall not now be necessary for the
respondent to consider the representation made by respondent Nos.1 and
2. The direction to that effect by the High Court is also set aside. Costs are
estimated at Rs.50,000/-.
..........................................J.
[V.S. SIRPURKAR]
...........................................J.
[DR. MUKUNDAKAM SHARMA]
New Delhi;
February 1, 2010.
14
Digital Performa
Case No. : Civil Appeal No....... of 2010 (Arising out of SLP (Civil) No. 11462
of 2007)
Date of Decision : 1.2.2010
Cause Title : Cantonment Board, Meerut & Anr. Vs.
K.P. Singh & Ors.
Coram : Hon'ble Mr. Justice V.S. Sirpurkar Hon'ble Dr. Justice Mukundakam
Sharma
Judgment delivered by : Hon'ble Mr. Justice V.S. Sirpurkar Nature of
Judgment : Reportable