Reserved on : 10th November, 2017
Date of decision : 5th December, 2017

M/S ATV PROJECTS (INDIA) LTD …Petitioner

Through: Mr. Ramji Srinivasan, Senior Advocate with Mr. Kuljeet Rawal, Mr. Saurabh Malhotra, Mr. Sohil Yadav & Mr. Tushar Bhardwaj, Advocates.

versus

UNION OF INDIA & ORS. …Respondents

Through: Mr. Kirtiman Singh, Mr. Prateek Dhanda, Mr. Waize Ali Noor & Mr. Momin Khan, Advocates for R-1.
Mr. D.R. Jain, Senior Standing Counsel alongwith Mrs. Sapna Jain Advocate for R-3.
Mr. Rohit Bhagat, Advocate for Mr. Saurabh Chadda, Advocate for R-5.

CORAM:
HON’BLE MR. JUSTICE SANJIV KHANNA HON’BLE MS. JUSTICE PRATHIBA M. SINGH

JUDGMENT

Prathiba M. Singh J.,

The petitioner ATV Projects (India) Pvt. Ltd. has filed the present writ petition challenging the constitutional validity of Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (hereinafter ‘Repeal Act’).

2. This Court had the occasion to deal with a similar challenge to various provisions of the Insolvency and Bankruptcy Code, 2016 (hereinafter ‘the Code’) as also Sections 4(b) and 5(1)(d) of the Repeal Act in W.P.(C) No.9674/2017, Ashapura Minechem Ltd.

v. Union of India and Ors (hereinafter ‘Ashapura’). Vide order dated 1st November, 2017, the challenge to Section 4(b) of the Repeal Act has been rejected by this Court in Ashapura (supra).

3. The findings in the said judgment are equally applicable to the present petition and it is held accordingly.

4. In addition Mr. Ramji Srinivasan, learned Senior Counsel for the petitioner has urged some further submissions which are being dealt with in the present order.

Brief Background

5. The petitioner claims to be a leading turnkey projects executing company, manufacturing a full range of industrial equipment for sugar and other industries. It ran a highly profitable business till 1994-95, when it suffered severe losses due to various reasons.

6. The petitioner filed a reference with the Board for Industrial & Financial Reconstruction (hereinafter ‘BIFR’) in 1998 and was declared a ‘sick company’ on 21st April, 1999. IDBI was appointed as the operating agency for the purposes of formulating the scheme.

7. According to the petitioner, it has settled and paid the restructured amounts of all of its 28 secured lenders, and had obtained no dues certificate from 27 secured lenders. A Draft Rehabilitation Scheme (hereinafter ‘DRS’) was also circulated by BIFR on 14th September, 2015. The DRS was pending before the BIFR, due to objections from the income tax authorities and some other authorities. On 30th November, 2016 all objections by other authorities were resolved by the BIFR. However, due to the reasons recorded in the BIFR’s order dated 30th November, 2016, some further directions were issued and the scheme was not sanctioned.

8. With effect from 1st December, 2017, i.e., one day later, the Repeal Act was enforced, vide Notification dated 25th November, 2016. Due to the said notification, proceedings before the BIFR stood abated and the petitioner could only approach the National Company Law Tribunal (hereinafter ‘NCLT’) within a period of 180 days.

Background of Insolvency and Bankruptcy Code, 2016

9. The Code was enacted in 2016 as Act 31 of 2016 and received Presidential assent on 28th May, 2016. The Repeal Act, 2003 had enacted Sections 4(b) and 5(1)(d). Though the Act was enacted, it was not notified till 25th November, 2016. Thereafter, with the incorporation of Section 4(b) as part of the Eighth Schedule of the Code and notification of the same with effect from 1st November 2016, the amended Section 4(b) of the Repeal Act came into operation with effect from 1st December 2016.

10. Section 4(b) was originally enacted with two provisos and thereafter, vide notification dated 24th May, 2017, two further provisos were added to Section 4(b). Section 4(b) and the notification titled the ‘Removal of Difficulty Order, 2017 (hereinafter `RDO 2017′) are extracted herein below:

“AFTER AMENDMENT OF SICA (REPEAL) ACT, 2003, W.E.F. 1ST NOVEMBER, 2016:

4. Consequential provisions – On the dissolution of the Appellate Authority and the Board –

(a) XXXX

(b) on such date as my be notified by the Central Government in this behalf, any appeal preferred to the Appellate Authority or any reference made or inquiry pending to or before the Board or any proceeding of whatever nature pending before the Appellate Authority or the Board under Sick Industrial Companies (special provisions) Act, 1985 (1 of 1986) shall stand abated:

Provided that a company in respect of which such appeal or reference or inquiry stands abated under this clause may make reference to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 within one hundred and eighty days from the commencement of the Insolvency and Bankruptcy Code, 2016 in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

Provided further that no fees shall be payable for making such reference under Insolvency and Bankruptcy Code, 2016 by a company whose appeal or reference or inquiry stands abated under this clause]”

THE REMOVAL OF DIFFICULTY ORDER, 2017:

S.O. 1683(E).- Whereas, the Insolvency and Bankruptcy Code, 2016 (31 of 2016 (hereinafter referred to as the said Code) received the assent of the President on 28th May, 2016 and was published in the official Gazette on the same date;

And, whereas, section 252 of the said Code amended the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (1of 2004) in the manner specified in the Eighth Schedule to the said Code;

And, whereas, the un-amended second proviso to clause (b) of section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 provides that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the repealed enactment i.e., the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) shall be deemed to be a scheme under implementation under section 424D of the Companies Act, 1956, (1 of 1956) and shall be dealt with in accordance with the provisions contained in Part VIA of the Companies Act, 1956;

And, whereas, section 424D of the Companies Act, 1956 provided for review or monitoring of schemes that are sanctioned or are under implementation;

And, whereas the Companies Act, 1956 has been repealed are re-enacted as the Companies Act, 2013 (18 of 2013) which, inter alia, provides for scheme of revival and rehabilitation, sanction of scheme, scheme to be binding and for the implementation of scheme under section 261 to 264 of the Companies Act, 2013;

And, whereas, sections 253 to 269 of the Companies Act, 2013 have been omitted by Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016;

And, whereas, clause (b) of section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 has been substituted by the Eighth Schedule to the Code, which provides that any appeal preferred to the Appellate Authority or any reference made or inquiry pending to or before the Board or any proceeding of whatever nature pending before the Appellate Authority or the Board under the Sick Industrial Companies (Special Provisions) Act, 1985 shall stand abated. Further, it was provided that a company in respect of which such appeal or reference or inquiry stands abated under this clause may make a reference to the NCLT under the Code within one hundred and eighty days from the date of commencement of the Code;

And, whereas, difficulties have arisen regarding review or monitoring of the schemes sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) in view of the repeal of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and omission of sections 253 to 269 of the Companies Act, 2013;

Now, therefore, in exercise of the powers conferred by the sub-section (1) of the section 242 of the insolvency and Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby makes the following Order to remove the above said difficulties, namely:-

1. Short title and commencement. – (1) This Order may be called the Insolvency and Bankruptcy Code (Removal of Difficulties) Order, 2017.

2. In the Insolvency and Bankruptcy Code, 2016, in the Eighth Schedule, relating to amendment to the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, in section 4, in clause (b), after the second

proviso, the following provisos shall be inserted, namely:-

“Provided also that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall be deemed to be an approved resolution plan under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code, 2016 and the same shall be dealt with, in accordance with the provisions of Part II of the said code:

Provided also that in case, the statutory period within which an appeal was allowed under the Sick Industrial Companies (Special Provisions) Act, 1985 against an order of the Board had not expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order.”
Thus, section 4(b), as it finally stands today has four provisos.

Petitioner’s submissions

11. The grievance of the petitioner is that its scheme, which was pending before BIFR, was at a very advanced stage and was almost on the verge of acceptance, a day prior to the notification of the Repeal Act. The petitioner had taken several steps throughout the lengthy process and had under gone several rounds of proceedings before the BIFR and the Appellate Authority for Industrial & Financial Reconstruction (AAIFR), as also in writ petitions, prior to the matter reaching the final stage for approval of the scheme.

However, unfortunately, on 30th November, 2016 the scheme was not approved by BIFR, which resulted in the scheme remaining pending and hence abating upon notification of the Repeal Act.

12. The petitioner vehemently urges that the abatement of proceedings, as the scheme was not sanctioned, would result in severe injustice to the petitioner. The petitioner further urges that its scheme should not be treated as being different from those cases where the schemes were sanctioned or appeals were pending. In any event, the petitioner urges that it had a right to challenge the order dated 30th November, 2016 of the BIFR, by way of an appeal, and that right could not have been taken away. According to the petitioner, the right to appeal is a vested right and would be governed by the law prevalent on the date when the right accrued, in this case i.e., on 30th November, 2016. The petitioner, thus, urges that Section 4(b) is illegal and unconstitutional and violative of Articles 14 & 19 of the Constitution of India.

13. The petitioner further urges that the classification between cases where schemes were pending and schemes that were sanctioned is not based on any intelligible differentia and does not satisfy the object sought to be achieved.

14. The petitioner also places reliance upon an order dated 12th September, 2017 passed by a co-ordinate Bench of this Court in
W.P. (C) 1621/2017, Twenty First Century Steels Limited v. Union of India (hereinafter ‘Twenty First Century Steels’) to submit that in the said case the Government had issued an office memorandum dated 9th August, 2017 to give benefit to such persons whose appeals were pending before the AAIFR. Thus, according to the petitioner a similar remedy should be made available to it.

Findings in Ashapura Minechem Ltd. v. Union of India and Ors

15. This Court, in Ashapura (supra), has held that the object with which the Code was enacted was to completely reform the existing insolvency regime. The Code has been enacted to replace SICA. It is the clear and categorical intention of the Legislature under Section 4(b) that all proceedings under SICA pending before the AAIFR or BIFR as on 1st December, 2016 would abate. This principle was applied uniformly without any exceptions. Section 5(1)(d) only provides an exception to such class of cases where the BIFR had already passed an order for sanctioning the scheme. Thus, schemes which were sanctioned prior to 1st December, 2016 would be protected. The saving clause thus only applies to schemes already sanctioned by the BIFR and none else. All other persons whose proceedings were still pending could only avail of the remedy of approaching the NCLT under the Code.

16. In Ashapura (supra), this Court has also held that the differentiation between sick companies where draft schemes have been approved, which are treated as `deemed approved resolution plans’ under the Code, and such cases where draft schemes have not been approved, and are thus fully covered by the Code, does not fall foul of Article 14. This Court has further held that sick companies whose schemes have been sanctioned form a separate and distinct class and the differentiation made is a valid, germane and realistic classification. It has been further held in Ashapura (supra) that the fixing of the cut-off date as 1st December, 2016 cannot be held to be arbitrary, inasmuch as, for a legislation of this nature there would be a cut-off date and the date on which Eighth Schedule is incorporated into the Code is a valid cut-off date. Whenever a legislation is either repealed or a new enactment is brought into place, a cut-off date has to be prescribed. The mere fixing of the cut-off date does not make the same illegal or arbitrary. While reiterating the findings in Ashapura (supra), we examine the additional submissions made by the Petitioner in the present case.

Analysis and Findings

17. The main plank of the Petitioner’s submissions is that the right to appeal is a vested right and cannot be taken away. The Petitioner relies on the following authorities to buttress its case.

1. Hoosein Kasam Dada (India) Ltd. v. State of M.P., 1953 SCR 987 (hereinafter ‘Hoosein Kasam Dada’)

2. Garikapati Veeraya v. N. Subbiah Choudhry, 1957 SCR 488 (hereinafter ‘Garikapati Veeraya’)

3. Shiv Shakti Coop. Housing Society v. Swaraj Developers, (2003) 6 SCC 659 (hereinafter ‘Shiv Shakti Coop. Housing Society’)

18. The case law cited by the Petitioner provide the answer to the question raised. In Hoosein Kasam Dada (supra), the Supreme Court was dealing with a case where the Central Provinces and Berar Sales Tax Act, 1947 was amended to the effect that unless the payment of the tax determined in the assessment was made, no appeal would be entertained. This was in contradiction to the earlier provisions, wherein the appellant could admit to what was due and pay only that part of the amount. Thus, by the amendment, the condition of compulsory pre-deposit of the entire amount was imposed which was not a requirement as per the earlier provision. The Supreme Court, in the said context held that the appellant cannot be burdened with higher pre-deposit conditions and that the provision of appeal which applies is the one which was in existence on the date when the proceedings were initiated and not the date when the appeal was filed. Moreover, in the said case, the amendment did not expressly or by implication intend for the new amended provision to apply to all new appeals arising from pending cases. But even in the said judgment, the Supreme Court clearly relies upon the observations of the Privy Council that a legislation cannot be held to act retrospectively, unless a clear intention to this effect is manifested. The Supreme Court holds as under:-

“Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication.”

(emphasis supplied) Thus, if there is a manifest intention in the legislation, the same would have to be given effect to.

19. Similar is the view expressed in Nogendra Nath Bose v. Mon Mohan Singha Roy AIR 1931 Cal 100, which also held that a right to appeal cannot be taken away in the absence of a express enactment. Moreover, as held in British Bank of India Vs. CIT [2004] (1) Mh.L.J.297, there is no inherent right of appeal and it has to be specifically conferred by the statute.

20. A Constitution Bench of the Supreme Court in Garikapati Veeraya (supra) summarized the legal position as under:-

“From the decisions cited above the following principles clearly emerge :

(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right.

(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties there to till the rest of the carrier of the suit.

(iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit of proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.

(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.” (Emphasis supplied)

21. Thus, the clear ratio of all these decisions is that if there is a manifest intention, either by express words or necessary implication, the right of appeal can be taken away and the right does not remain. The right to appeal is a statutory right and can be expressly or impliedly taken away. These decisions do not hold that if proceedings are pending, a vested right exists. In this case, we are not concerned with the right or pendency of an appeal, but repeal of an enactment and its substitution by another, with the express stipulation that proceedings under the repealed enactment would abate.

22. The Repeal Act and Code expressly and specifically state that the proceedings under SICA would not survive and would abate. This is the explicit provision incorporated by means of the amendment to Section 4(b). The legislature clearly provides a remedy to all persons/classes of persons whose proceedings were pending and it is up to them to avail the same in accordance with the prevalent law. In the instant case, a perusal of the Code and the Repeal Act clearly shows that there is one broad classification which has been made by the Legislature, namely cases in which schemes are sanctioned and those cases in which the schemes or proceedings are still pending. In the latter class of cases, the legislature provides the remedy of approaching the NCLT within a period of 180 days from the date when the Code comes into effect. Such proceedings would then be dealt with “in accordance with the provisions of Insolvency and Bankruptcy Act, 2016.”

23. During the course of submissions, Mr. Srinivasan repeatedly urged that the petitioner’s case, having been dealt with in accordance with the SICA and having reached an extremely advanced stage, to relegate it to the NCLT, to be treated in accordance with the Code, results in severe injustice. The legal position on this issue has been settled by the Supreme Court in State of Rajasthan Vs. Mangilal Pindwal AIR 1996 SC 2181 wherein the Court quoted with approval the following passage on `Craies on Statute Law’

““When an Act of Parliament is repealed,” said Lord Tenterden in Surtees v. Ellison,” it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule.” Tindal C.J. stated the exception more widely. He said : “The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law.”

It is the clear view of this Court that once a law is repealed and a new legislation has been put in its place, it is not open for anyone to contend that it should be continued to be governed by the old enactment, except where actions under the existing laws had concluded. The applicability of the repealed legislation is only to the extent as provided in the Savings clause and nothing more.

24. Mr. Srinivasan further urged that several exceptions have been created in favour of parties whose schemes have been sanctioned, parties who could have preferred appeals against an approved scheme (deemed approved resolution plan) and thus, creation of an exception for cases like that of the Petitioner would not be irregular or improper. In fact, as per the Petitioner, creation of such exceptions itself, proves that the abatement is not cast in stone.

25. Though at first blush this submission of the Petitioner may sound appealing, a deeper examination would reveal that even the 4th proviso of Section 4(b) does not create a new class. In fact it deals with cases where schemes have been sanctioned and appeals contesting the sanction have not been filed. It is only those cases where schemes have been sanctioned and appeals have not yet been filed that a party can approach the NCLAT. The reasons are not far to seek, inasmuch as the 3rd and 4th proviso read together make it evident that a scheme sanctioned by the BIFR, or under the implementation by the BIFR would be an `approved resolution plan’ under Section 31(1) of the Code. It is only when a party who is aggrieved by the said resolution plan, whose time limit for filing the appeal had not expired, that can approach the NCLAT.

26. Thus, under the newly enacted Section 4(b) there are only two classes of persons, namely (i) those persons in whose cases schemes were sanctioned and (ii) those persons in whose cases the schemes were pending. In the former, there are two sub-classes namely;

– schemes which were required to be implemented, where the NCLT could be approached and

– schemes where appeals were yet to be filed by the party aggrieved, where the NCLAT could be approached.

In the latter class of cases, there is only one remedy i.e. to approach the NCLAT within a period of 90 days. To this, there could be no quarrel. The broad classification of cases where schemes are sanctioned and not sanctioned is intelligible as both would be governed by the Code including the implementation, supervision and appeals arising therefrom. Thus, there is no discrimination whatsoever.

27. The second proposition that the Petitioner has a ‘legitimate expectation’ does not have any legal basis, inasmuch as the right of the Petitioner to approach the appropriate forum has not been taken away. The Petitioner was provided with the remedy to approach the NCLT within a period of 180 days. In law, there could not be a legitimate expectation to be governed by the repealed enactment when the manifest intention of the Legislature is to completely replace the said enactment with a new insolvency regime. By operation of law, the forum which the Petitioner can approach has been changed and a remedy was thus available to the Petitioner. On a query as to why the Petitioner chose not to approach the NCLT, the response was that the Petitioner wanted to be governed by the repealed Act, i.e., SICA and not in accordance with the Code as provided for under Section 4(b). Such a submission lacks any legal basis and is liable to be rejected.

28. Insofar as Twenty First Century Steels (supra) is concerned, the same is an order recording the submissions of the parties and neither party has placed before us any document to show that any new remedy not contemplated under the Code was in fact provided to the Petitioner therein. In the absence of the same, the said order does not assist the Petitioner in any manner.

29. In these circumstances, the validity of Section 4(b) is upheld and the writ petition is dismissed. Like in Ashapura (supra), this Court holds that the Petitioner, if it is so advised, may avail of the remedy provided under the Code. As the time period of 180 days has already lapsed, if the Petitioner approaches the NCLT, the request for condonation of delay, if any, be considered if permissible in law.

30. The writ petition is dismissed with no order as to costs.

PRATHIBA M. SINGH, J
SANJIV KHANNA, J

DECEMBER 05, 2017

The post M/s Atv Projects (India) Ltd Vs. Union of India & Ors. appeared first on B&B Associates LLP.

Judgment reserved on: 25.09.2009
+ Judgment delivered on: 01.12.2009

% 1. FAO(OS) 313 OF 2008

SCHERING CORPORATION & ORS Appellants
Through: Mr. Sachin Datta, Ms.
Lakshmi Ramamurthy Ms. Shaila Arora, and Mr. Amit Mehta, Advocates

VERSUS

ALKEM LABORATORIES LTD.”…….Respondent
Through: Mr. Praveen Anand, Ms.
Ishani Chandra and Ms.
Vaishali Kakra, Advocates

AND
2. FAO(OS) 314 OF 2008

SCHERING CORPORATION & ORS Appellants
Through: Mr. Sachin Datta, Ms.
Lakshmi Ramamurthy, Ms. Shaila Arora and Mr. Amit Mehta, Advocates

VERSUS

GETWELL LIFE SCIENCES INDIA PRIVATE LIMITED …….Respondent
Through: Mr. Praveen Anand, Ms.
Ishani Chandra and Ms. Vaishali Kakra, Advocates

CORAM:
HON’BLE MR. JUSTICE MUKUL MUDGAL HON’BLE MR. JUSTICE VIPIN SANGHI

1. Whether the Reporters of local papers may be allowed to see the judgment? No

2. To be referred to Reporter or not? Yes

3. Whether the judgment should be reported in the Digest? Yes

VIPIN SANGHI, J.

1. The present appeals have been filed by the appellants Schering Corporation, Schering-Plough Ltd. and Fulford (India) Ltd. under Order 43 Rule 1(r) CPC. They are directed against the identical orders dated 04th July, 2008 passed by the Learned Single Judge dismissing the appellants’/plaintiffs’ applications under Order 39 Rules 1 & 2 in the two suits CS (OS) No.730/2007 (out of which FAO(OS) No. 313/2008 arises) and CS(OS) No.361/2007 (out of which FAO(OS) 314/2008 arises) and vacating the ex parte ad interim orders of injunction passed in the said suits.

2. These interim applications had been filed to seek grant of an interim injunction to restrain the Respondent Alkem Laboratories Ltd. (Defendant in CS(OS) NO. 730/2007) (hereinafter referred to as ALKEM) and Getwell Sciences India Pvt. Ltd ( Defendant in Suit No. 361/2007) (hereinafter referred to as GETWELL) from using the marks TEMOKEM and TEMOGET respectively in relation to their pharmaceutical products the active ingredient whereof is TEMOZOLOMIDE, a drug administered for the treatment of brain cancer.

3. The appellants filed the aforesaid two suits to, inter alia, seek permanent injunction to restrain infringement of registered trademarks, copyright, passing off, dilution, unfair competition, rendition of accounts of profits, deliver-up etc. against the aforesaid respondents ALKEM & GETWELL respectively.

4. The appellants have disclosed the genesis of the TEMOZOLOMIDE molecule and its marks TEMODAL and TEMODAR used by the appellants. In 1984 one Professor Steven synthesized a molecule and named it TEMOZOLOMIDE. In 1991 the Cancer Research Campaign Technology Ltd., UK acquired rights to the TEMOZOLOMIDE technology from its maker, Prof. Stevens. In 1992 the appellants obtained worldwide license for TEMOZOLOMIDE technology from the aforesaid Cancer Technology Ltd. and initiated their research and development of a brain cancer drug. The drug was approved as a medical drug for cancer treatment in 1999.”The appellants then filed”for TEMODAL as their Trademark for their TEMOZOLOMIDE-based drug. According to the appellants the drug is being sold in India ever since 17.01.2000. Even the mark TEMODAL was registered in India in favor of the appellant vide registration no.687936 w.e.f. 23.11.1995 in class 5, which, inter alia, relates to pharmaceuticals including alkylating cytotoxic agents for the treatment of various types of cancer. Similarly, TEMODAR is registered in name of appellant no. 3 vide registration no. 888816 w.e.f 29.11.1999.

5. The appellants claim that they are global science-based health care business entities with leading prescription, consumer and animal health products. The mark TEMODAL existed in the appellants’ portfolio since 1978 and was first applied by them for “Psychopharmaceutical Preparations” in Class 5 in Norway, Denmark and Sweden. The appellants commenced sales in Europe and thereafter in other parts of the world along with filing for registration of the mark TEMODAL in those respective countries, which they successfully acquired too.

6. The appellants claim to have came to know that the respondent ALKEM was marketing and selling an almost identically positioned drug (for treatment of brain cancer or glioblastoma multiforme) under the mark TEMOKEM which, according to the appellants, was phonetically, linguistically, textually, visibly, manifestly, confusingly and deceptively similar to their marks TEMODAL/TEMODAR. They also came to know that the respondent ALKEM had submitted a “Proposed to be used” application bearing number 1348168 in class 5 for registration of the mark TEMOKEM and the same was advertised in Trademark Journal no. 1335-0 dated 01.11.2006 made available to the public on 03.03.2007. In answer to this, the appellants have filed a notice of opposition dated 23.03.2007 to the above application and the same is still pending.

7. The appellants alleged infringement of trademarks under section 29 of the Trademarks Act, 1999 (hereinafter referred to as ‘The Act’) and also passing off against the respondent ALKEM, in their civil suit, being CS(OS) No.730 of 2007 filed on the original side of this Court.

8. It appears that the learned Single Judge passed an ex parte ad interim order of injunction in favour of the appellants, and against the respondent ALKEM on 23.04.2007 thereby restraining the respondent ALKEM from launching/using, advertising, promoting, stocking, offering for sale or distributing or otherwise using trademark “TEMOKEM” or any other mark deceptively or confusingly similar to that of the plaintiff’s registered trademark “TEMODAL/TEMODAR” as a drug used especially for treatment of brain cancer. However, after notice to the respondent ALKEM, and after hearing the parties the learned Single Judge by the impugned order has vacated the aforesaid order dated 23.04.2007 and dismissed the appellants’ application under Order 39 Rules 1 & 2 CPC being I.A. No.4555/2007 while allowing respondent’s application being I.A. No.6041/2007 filed under Order 39 Rule 4 CPC.

9. Similarly, in CS (OS) No.361/2007 wherein GETWELL is the defendant, the appellants claimed that they came to know in December, 2006 of the defendant/respondent marketing and selling an identically positioned drug by GETWELL under the brand name ‘TEMOGET’ in Delhi and also in other towns of India. The appellants also stated that they had made enquiries with regard to the making of an application for registration of the trademark ‘TEMOGET’ by the respondent GETWELL, but the search had produced no results.

10. The learned Single Judge initially passed an ex parte ad interim injunction order on 27.02.2007 thereby restraining GETWELL from advertising, promoting, stocking, offering for sale or distributing or otherwise using trademark “TEMOGET” or any other mark deceptively or confusingly similar to that of the plaintiff’s registered trademark “TEMODAL/TEMODAR” as a drug used especially for treatment of brain cancer. After notice to and hearing the respondent GETWELL the ex parte ad interim order of injunction was vacated by the impugned order dated 04.07.2008 and the appellants application under Order 39 Rule 1 & 2 CPC being I.A. No.2226/2007 was dismissed.

11. The learned Single Judge in his impugned orders observed that the term ‘TEMO’ used in the appellant’s registered trademarks as well as in the respondent’s trademarks are derived from the name of the chemical compound TEMOZOLOMIDE. To the said term ‘TEMO’ the appellants had added the suffix ‘DAL’ and ‘DAR’ to arrive at the trademarks ‘TEMODAL’ and ‘TEMODAR’ respectively. On the other hand, respondents had added the suffix ‘KEM’ and ‘GET’ which are the parts of the respondent’s company names, to arrive at the trademark ‘TEMOKEM’ and ‘TEMOGET’ respectively. The learned Single Judge held that all the trademarks, as aforesaid, are portmanteau words. He further held as follows:

“A portmanteau word is used to describe a linguistic blend, namely, a word formed by blending sounds from two or more distinct words and combining their meanings. Examples of portmanteau words are – brunch (breakfast + lunch); Tanzania (Tanganyika + Zanzibar). As per the Wikipedia, portmanteaus can also be created by attaching a prefix or suffix from one word to give that association to other words. For example, the suffix ‘holism’ or ‘holic’ taken from the word ‘alcoholism’ or ‘alcoholic’ can be added to a noun, creating a word that describes an addiction to that noun. For example, chocoholic means a person who is addicted to chocolate and workaholic means a person who is addicted to work and so on. Portmanteau words can also be used to describe bilingual speakers who use words from both languages while speaking. For instance, a person would be considered speaking ‘Spanglish’ if he is using both Spanish and English words at the same time. Similarly, the portmanteau word ‘Hinglish’ would refer to the usage of Hindi and English words at the same time.”

12. He held that the respondents were able to show the derivation of the trademarks ‘TEMOKEM’ and ‘TEMOGET’ by employing ‘TEMO'”from”TEMOZOLOMIDE”and”‘KEM'”from”the”name”of”the respondent ALKEM and, similarly, ‘GET’ from the name of the respondent GETWELL, respectively. The combined effect of ‘TEMO’ and ‘KEM’ would be TEMOZOLOMIDE manufactured by Alkem Laboratories. Similarly, the combined effect of ‘TEMO’ and ‘GET’ is TEMOZOLOMIDE manufactured by Getwell.

13. The learned Single Judge relied on the decision of this court in Kalindi Medicure Pvt. Ltd. Vs. Intas Pharmaceuticals Limited and Anr. 2007 (34) PTC 18 (Del) wherein this Court had taken note of the established practice that in pharmaceutical trade names of various drugs are often almost similar to each other, having common prefixes or suffixes, for the reason that the name of the drug conveys as to which salt / compound it is a derivative of. In that case, while one of the products was sold in the form of pills in aluminum foils, the other competing product was sold in pre filled syringes. The price difference in the competing products was also taken into account for vacating the ex parte injunction granted in favour of the plaintiff in that case.

14. The learned Single Judge heavily relied on the Division Bench Judgment of this Court in Astrazeneca UK Ltd. & Anr. Vs. Orchid Chemicals & Pharmaceuticals Ltd. 2007 (34) PTC 469 (DB) (Delhi) which concerned the claim for infringement of the plaintiffs/appellants registered trademark ‘MERONEM’ by the defendants/respondents use of the trademark ‘MEROMER’. Both the products were derived from the active ingredient ‘MEROPENEM’. The Division Bench of this Court came to the conclusion that ‘MEROPENEM’ is a molecule which is used for treatment of bacterial infection and the term ‘MERO’ being an abbreviation of”the”generic”term”‘MEROPENEM'”was”publici”juris. Consequently, the appellants/plaintiffs in that case were held not entitled to claim exclusive rights to the use of the term ‘MERO’ as a constituent of the trademark in question as it was descriptive of the appellants’/plaintiffs’ drug. The Division Bench further held that the common feature in both the competing marks ‘MERO’ being descriptive and publici juris, the customers would tend to ignore the common feature and would pay more attention to the uncommon features namely ‘MER’ and ‘NEM’, which were clearly dissimilar. The following paragraph from the said decision of the Division Bench was particularly referred by the learned Single Judge :

“19. Admittedly, ‘Mero’, which is common to both the competing marks, is taken by both the appellants/plaintiffs and the respondent/ defendant from the drug “Meropenem’, taking the prefix ‘Mero’ which is used as a prefix in both the competing marks. Both the appellants/plaintiffs and the respondent/ defendant are marketing the same molecule ‘Meropenem’. Neither the appellants/plaintiffs nor the respondent/defendant can raise any claim for exclusive user of the aforesaid word ‘Meropenem’. Along with the aforesaid generic/common prefix, ‘Mero’, the appellants/ plaintiffs have used the syllables ‘nem’, whereas, the respondent/defendant has used the syllable ‘mer’. It is true that the aforesaid words/trade names cannot be deciphered or considered separately, but must be taken as a whole. But even if they are taken as a whole, the prefix ‘Mero’ used with suffix in the two competing names, distinguishes and differentiates the two products. When they are taken as a whole, the aforesaid two trademarks cannot be said to be either phonetically or visually or in any manner deceptively similar to each other.”

15. The learned Single Judge noted the view of the Division Bench in Astrazeneca (supra) that in the trade of drugs it was a common practice to name the drug by the name of the organ or ailment which it treated or the main ingredient of the drug. The name of such an organ, ailment or ingredient being publici juris or generic, could not be claimed by anyone exclusively for use as a trademark. The argument of the appellant that it was the first to have adopted and use the name ‘TEMO’, and that the appellants had trans-border reputation [which were claimed to be the distinguishing feature from the Astrazeneca (supra) case] was rejected by the learned Single Judge as the claim of the appellants was founded upon an alleged infringement of registered trademark. It was also not a case where the respondents had raised a defence of prior use under Section 34 of the Act, where again, the question of “who used the mark first” would be relevant. The case of the appellants was one of infringement under Section 29 of the Act and the only question which required consideration was whether the respondent’s trademarks were deceptively similar to the appellants registered trademarks, which could lead to confusion in the mind of the purchaser to purchase the drugs of the respondents, while intending to purchase the appellants drugs.

16. The learned Single Judge held that the present cases are squarely covered by the decision of the Division Bench in Astrazeneca (supra).

17. The learned Single Judge also took note of the decision in Bhagwan Dass Gupta Vs. Shri Shiv Shankar Tirath Yatra Company Pvt. Ltd. 93 (2001) DLT 406 wherein a learned Single Judge of this court noted that the basic test to find out whether a trademark is publici juris is whether the mark has come to be so public because of its universal use that it does not confuse or deceive, by the use of it, the purchasers of the goods of the original trader. The learned Single Judge held that as TEMOZOLOMIDE is a generic word and is publici juris and nobody can claim exclusivity in respect of the same. Consequently, the clipped expression ‘TEMO’ derived from clipping word TEMOZOLOMIDE would also be publici juris over which no person could claim exclusive proprietorship.

18. The learned Single Judge also placed reliance on another decision of this Court in Cadila Laboratories Ltd. V. Dabur India Ltd., 1997 PTC (17) 417. The competing marks considered in the said case were `MEXATE’ AND `ZEXATE’. The suffix `EXATE’ was common to both the marks, the only difference being in the prefix `M’ & `Z’. It was held in that case that where the suffix is common, prefix would have to be compared to see whether the marks are deceptively similar. The following extract from Cadila (supra) was quoted by the learned single Judge in the impugned order:

“As has been settled, while ascertaining two rival marks, as to whether they are deceptively similar or not, it is not permissible to dissect the words of the two marks. It is also held that the meticulous comparison of words, letter by letter and syllable by syllable, is not necessary and phonetic or visual similarity of the marks must be considered.”

19. The learned single Judge rejected the appellants reliance on the decision of the Supreme Court in Milment Oftho Industries & Ors V. Allergan Inc., 2004 (28) PTC 585 (SC) on the ground that the said decision was rendered in a case of passing of and not in an action for infringement of trade mark. The competing marks in the case of Milment (supra) were identical. Both the plaintiff and the defendant had adopted `OCUFLOX’ as their trade mark. However, in the present cases the marks of the appellants and the respondents are not identical. For the same reason, the decision in Pfizer Ireland Pharmaceuticals V. Intas Pharmaceuticals & Anr., (2004) 28 PTC 456 (Del) (The Lipitor v. Lipicor case) was distinguished.

20. Reliance placed by the appellants on the decision in Hoechst Pharmaceuticals Ltd & Ors V. Government of India & Ors, 1983 PTC 265 (Del) (DB) was also rejected as it proceeded on the assumption that the appellants products are superior to that of the respondent. The said basis could not be accepted at the prima facie stage, particularly, when the respondent had obtained drug licence under the Drug and Cosmetics Act, 1940. For the same reason, the learned Single Judge rejected the appellants reliance on the decision in Ramdev Food Products (P) Ltd. V. Arvindbhai Rambhai Patel & Ors., (2006) 8 SCC 726.

21. The learned single Judge also held that the trade marks `TEMODAL’ & `TEMODAR’ of the appellants were not identical with the trademarks TEMOKEM and TEMOGET. He held that there was no phonetic or visual similarity between the marks. The Court prima facie came to the conclusion that the suffix `KEM’ and ‘GET’ are entirely different and distinct from the suffix `DAL’ and ‘DAR’ used in the appellants trademarks. Prima facie the comparison of the competing marks did not show phonetic or visual similarity between the respondent’s marks with the trademarks of the appellants and the respondents’ marks were not prone to deceive the consumers. He also took into account the fact that TEMOZOLOMIDE is a schedule ‘H’ drug which could be sold in retail only on the prescription of a registered medical practitioner. The same, though not sufficient to answer a case of “no deception”, was an important factor considering the fact that the product in question is a highly specialized drug and used for specific treatment of a type of brain cancer. The Court also took notice of the fact that in the case of both the respondents, their packaging of the drugs contained the warning “to be supplied against demand from cancer hospitals, institutions and against the prescription of a cancer specialist only.”

22. The immense price difference between the products of the appellants on the one hand and those of the respondents was also taken note of by the learned single Judge. Whereas a set of 5 capsules of 100 mg of TEMODAL/TEMODAR are sold for Rs.33,602/-, 5 capsules of 100 mg each of TEMOKAM are sold for Rs.6,300/- and a set of 5 capsules of 250 mg each of TEMOGET sell for Rs.12,000/-.

23. For the aforesaid reasons, the learned single Judge dismissed the interim injunction applications filed by the appellants in the two suits.

24. Learned counsel for the parties have made elaborate submissions in support of their cases.

25. As noted above, the learned Single Judge has held that the present cases are covered by the Division Bench decision in Astrazeneca (supra). We have, therefore, gone through the said judgment. Before we proceed further, in our view it is essential for us to deal with the appellants’ submissions vis-à-vis Astrazeneca (supra), as the scope of the parties’ submissions which we need to consider in this appeal would depend upon our understanding of the said judgment.

26. In Astrazeneca (supra) both the appellant/plaintiff and the respondent/defendant had got their marks registered, though the appellant/plaintiff had moved an application for rectification in respect of the respondents/defendants trade mark `MEROMER’. The appellant had contended that since 1995-96, the drug under the brand name `MERONEM’ was being marketed by it in over 89 countries. On the other hand, the respondent/defendant had launched their drug `MEROMER’ in India sometime in November, 2004 and they were granted registration of the trade name `MEROMER’ on the basis of their application for registration filed on 2.8.2004 in Class 5. The appellant/plaintiff had contended that the trade name `MEROMER’ of the respondent as a whole be compared with the trade mark of the appellant/plaintiffs i.e. `MERONEM’ and on such comparison it would be clear that both are deceptively similar. On the other hand, the respondent/defendant had contended that an action for infringement was not maintainable in view of the provisions contained in Section 29 & 32(e) of the Act which provide, inter alia, that use of a mark by its registered proprietor shall not constitute infringement.

27. The learned single Judge held that the two trademarks are phonetically not similar and that the two marks are distinct. He also held that if an injunction as sought for is granted by restraining the respondents/defendants from selling, marketing or in any manner dealing with the drug `MEROPENEM’ under the trade name `MEROMER’ there would be irreparable inconvenience caused to the respondents/defendants, whereas the loss of the appellants/plaintiffs if any, which is more financial in nature could be safeguarded by directing the respondent/defendants to maintain accounts of sale under the trade name `MEROMER’. The appellant/plaintiff in Astrazeneca (supra) placed reliance on the decision of the Supreme Court in Cadila Health Care Ltd. V. Cadila Pharmaceuticals Ltd., 2001 PTC 541 (SC). The Division Bench in Astrazeneca culled out the principles laid down by the Supreme Court which would be applicable to a passing off action involving medicinal products. The Supreme Court held that the test to be applied to adjudge the violation of trade mark may not be at par with the case involving non- medicinal products. The Division Bench then proceeded to take notice of an earlier Division Bench judgment of this Court in SBL Limited. V. Himalaya Drug company, 1997 PTC (17) 540 and quoted the following observation of the Court:

“25.(3) Nobody can claim exclusive right to use any word, abbreviation, or acronym which has become publici juris. In the trade of drugs it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of the drug. Such an organ ailment or ingredient being publici juris or generic cannot be owned by anyone for use as trade mark.”

28. The Division Bench in Astrazeneca (supra) also referred to two other decisions in M/s Biofarma V, Sanjay Medical Stores, 1997 PTC (17) 355 and Cadila Laboratories V. Dabur India Limited, 1997 PTC (17) 417 wherein Dr. Mukundakam Sharma, J, as his Lordship then was, had occasion to deal with the trade names `TRIVEDON’ and `FLAREDON’ in the first case and `MEXATE’ and `ZEXATE’ in the second case. The Division Bench culled out the following extract from the decision in M/s Biofarma (supra): “Section 2(d) of the Trade and Merchandise Marks Act 1958, (hereinafter referred to as the Act) defines the word ‘deceptively similar’ as which would be deemed to be deceptively similar to another mark if it so nearly resembles that other mark so as likely to deceive or cause confusion. For deciding the question of deceptive similarity the Courts have laid down the following factors to be considered:

(a) The nature of the marks, i.e. whether the marks are world marks or level marks or composite marks, i.e. both world and level marks.

(b) the degree of resembleness between the marks, phonetically similar and hence similar in idea

(c) the nature of the goods in respect of which they are used to trade marks

(d) the similarity in the nature, character and performance of the goods of the rival traders.

(e) The class of purchasers who are likely to buy”the”goods bearing the marks they require on education and intelligence and a degree of care they are likely to exercise in purchasing the goods.

(f) the mode of purchasing the goods or placing orders for the goods; and

(g) Any other surrounding circumstances.”

29. In M/s Biofarma (supra) it was held that since the opening syllable of the two competing trade marks in the said case are completely different and distinct, and in pharmaceutical trade it is natural to find names of various drugs almost similar to each other or having the same prefix or suffix, the competing marks viz. ‘FLAREDON’ and ‘TRIVEDON’ are dissimilar as the two marks start with distinct dis- similarities so far as the first syllable is concerned. Similarly, in the other decision namely, Cadila Laboratories v. Dabur India Limited (supra) it was held that there is no possibility of ‘Mexate’ being pronounced and read as ‘Zexate’. It was also laid down that meticulous comparison of words, letter by letter and syllable by syllable, is not necessary and phonetic or visual similarity of the marks must be considered.

30. The observation of the Division Bench in Astrazeneca (supra) in paragraph 19 has been taken note of by the learned single Judge and has been extracted by us above. The Division Bench also took note of the fact that there are other similar names with the prefix `MERO’. The Division Bench further observed: –

“20.”……………………… In the decisions of the Supreme Court and this Court also, it has been clearly held that nobody can claim exclusive right to use any word, abbreviation, or acronym which has become publici juris. In the trade of drugs, it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of the drug. Such an organ ailment or ingredient being publici juris or generic cannot be owned by anyone exclusively for use as a trade mark. In the Division Bench decision of this Court in SBL Limited (supra) it was also held that possibility of deception or confusion is reduced practically to nil in view of the fact that the medicine will be sold on medical prescription and by licensed dealers well versed in the field and having knowledge of medicines. It was further held that the two rival marks, ‘Liv.52’ and ‘LIV-T’, contain a common feature, ‘Liv’ which is not only descriptive, but also publici juris and that a customer will tend to ignore the common feature and will pay more attention to uncommon features i.e. ’52’ and ‘T’ and that the two do not have such phonetic similarity so as to make it objectionable.

21. In our considered opinion the facts of the said case are almost similar and squarely applicable to the facts of the present case. ‘Meropenem’ is the molecule which is used for treatment of bacterial infections. In that view of the matter, the abbreviation ‘Mero’ became a generic term, is publici juris and it is distinctive in nature. Consequently, the appellants/plaintiffs cannot claim exclusive right to the use of ‘Mero’ as constituent of any trademark. The possibility of deception or confusion is also reduced practically to nil in view of the fact that the medicine is sold only on prescription by dealers. The common feature in both the competing marks i.e. ‘Mero’ is only descriptive and publici juris and, therefore, the customers would tend to ignore the common feature and would pay more attention to the uncommon feature. Even if they are expressed as a whole, the two did not have any phonetic similarity to make it objectionable. There are at least four other registered users of the prefix ‘Mero’ in India whereas the names of 35 companies using ‘Mero’ trademarks, which have been registered or applied for registration, have been furnished in the pleadings.”

31. The Division Bench held that the two names, namely, ‘MERONEM’ and ‘MEROMER’ were prima facie dissimilar to each other. They were Schedule-H drugs available only on doctor’s prescription. The factum that the same were available only on doctor’s prescription and not as an over the counter medicine was also considered relevant and it was held to have been rightly taken note of by the learned Single Judge. The Division Bench also opined that in its opinion, where the marks are distinct and the features are found to be dis-similar, they are not likely to create any confusion. It was also admitted by the parties that there was a difference in the price of the two products. This fact was also considered relevant by the Division Bench. It was held that the very fact that the two pharmaceutical products, one of the appellants/plaintiffs and the other of the respondent/ defendant, were being sold at different prices itself would ensure that there was no possibility of any deception/confusion, particularly in view of the fact that customer who came with the intention of purchasing the product of the appellants/plaintiffs would never settle for the product of the respondent/defendant which was priced much lower. The Bench held that it was apparent that the trademarks of the two products in question were totally dissimilar and different.

32. No doubt, in Astrazeneca (supra) the additional factor in favour of the respondent/defendants that weighed in the mind of the Court was that the mark of the respondent/defendant had also been registered, in respect whereof the appellant/plaintiff had applied for rectification. However, to us it is clear that the salient features which led the Court to deny the grant of interim injunction to the appellant/plaintiff were:-

a) The admission that `MEROPENEM’ was the active salt/drug in the medicines manufactured by both the parties which was publici juris;

b) That nobody could claim exclusive right to use any word, abbreviation, or acronym which has become publici juris and which is used descriptively;

c) In the trade of drugs it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of the drug. The name of an organ, ailment or ingredient being publici juris or generic if the use of the name is descriptive, the generic name cannot be claimed by anyone for exclusive use as a trade mark;

d) `MERO’ which was common to both the competing marks was taken from `MEROPENEM’ in respect whereof neither party could claim exclusive user for ‘MEROPENEM’ based drug. Both the parties had used three letter suffixes i.e. `NEM’ had been used by the appellant/plaintiff and `MER’ had been used by the respondent/defendant, which were distinct and not deceptive;

e) Even if the competing marks were to be taken as a whole, the suffixes ‘NEM’ and ‘MER’ distinguish and differentiate the two products. When they are taken as a whole, the aforesaid two trademarks could not be said to be either phonetically or visually, or in any manner deceptively similar to each other;

f) The possibility of deception or confusion is reduced to practically `Nil’ in view of the fact that the medicine would be sold by medical prescription and by licenced dealers well versed in the field and having knowledge of medicines. When two rival marks contain a common feature, which is not only descriptive but also publici juris, the consumer will tend to ignore the common feature and will pay more attention to the uncommon feature (for example in the case of Liv-52 V. Liv-T). If the uncommon features do not have phonetic similarity, the offending mark cannot be objected to. The drugs in question are Schedule H drugs available only on Doctor’s prescription and are not over the counter medicines;

g) There was a vast difference in the prices of the two products. This fact by itself would ensure that there is no possibility of any deception/confusion, particularly, in view of the fact that the customer who comes with the intention of purchasing the product of the appellant/plaintiff would never settle for the product of the respondent/defendant which is priced much lower.

33. The fact situation in the two cases in hand are starkly similar to the fact situation in Astrazeneca (supra). If one were to replace ‘MEROPENEM’ with ‘TEMOZOLOMIDE’, ‘MERO’ with ‘TEMO’, ‘MERONEM’ with ‘TEMODAL’/’TEMODAR’, ‘MEROMER’ with ‘TEMOKEM’/’TEMOGET’, ‘NEM’ with ‘DAL’/’DAR’ and ‘MER’ with ‘KEM’/’GET’, and proceed on the basis that ‘TEMO’ is publici juris for TEMOZOLOMIDE, each of the aforesaid factors (a) to (g) would hold true, in principle, in the present cases as well.

34. Mr. Datta submits that the following are the distinguishing features of the present appeals from the decision in Astrazeneca (supra):

i. Plaintiff conceded in Astrazeneca (Supra) that they were not claiming monopoly over just “mero”. But the appellants herein are asserting their exclusive right to use “TEM”/ “TEMO”.

ii. Plaintiff did not specifically dispute that Mero was generic for Moroprenem-based drugs but argued that even if so, Meronem be compared to Meromer, both as a whole. However, the appellants dispute that TEM/TEMO is publici juris for TEMOZOLOMIDE.

iii. Internationally a third party (other than plaintiff) had first adopted `Mero’. But in the present cases, it is the appellants alone who have adopted TEM/TEMO for their TEMOZOLOMIDE based drugs.

iv. No pleading of transborder reputation was made in Astrazeneca (supra). Not a single piece of evidence filed in this regard. But the appellants have not only pleaded, but also demonstrated their transborder reputation.

v. In Astrazeneca(supra), plaintiffs admitted that there were many other Meroprenem-based drugs incorporating `Mero’ as part of the mark but took no action was taken against them. However, the appellants do not admit the use of TEM/TEMO for TEMOZOLOMIDE based drugs and have zealously protected their trademarks.

vi. Plaintiffs disentitled themselves from discretionary relief by filing rectification after filing suit without taking statutory S. 124 permission. However, that is not the case in hand.

vii. Court found that `Mero’ was commonly used; that `Mero’ became publici juris for Meroprenem-based drugs. No such conclusion can be drawn in respect of TEM/TEMO for TEMOZOLOMIDE.

viii. Plaintiffs did not dispute that drugs are the same except only for shelf life owing to different buffering agent. No plea of superior formulation and better therapeutic effect was made in Astrazeneca (supra). However, the appellants’ case is that their drug has a narrow therapeutic index and works differently than the products of the respondents.

ix. In Astrazeneca (supra), there was no recordal of assignment in favour of the appellants/plaintiffs. So none of the Plaintiffs were the recorded proprietors of the registration of `Meronem’. There is no dispute in the present cases with regard to the rights of the appellants to their trademarks.

x. In Astrazeneca (supra), plaintiffs disentitled themselves from discretionary relief by concealing facts/details of assignment of registration. There is no such allegation against the appellants.

xi. In Astrazeneca (supra), plaintiffs did not dispute that different formulations of the same molecule can be different in therapeutic value and thus legitimately different in price. Thus Cadila judgment was applicable. That is not the position in the present cases.

35. The differences enumerated at sl. Nos.(i), (ii) and (vii) pertain to the appellants’ submission that ‘TEM’/’TEMO’ are not publici juris. We will deal with this submission of the appellants. However, the so called differences at sl. Nos.(iii), (iv), (v), (vi), (viii), (ix), (x) and (xi) above, in our view, are not material for the present purpose. These so called differences, in fact, had no bearing on the decision in Astrazeneca (supra), even if it is assumed that they existed, as they did not form the basis of the decision in Astrazeneca (supra). Since in Astrazeneca (supra) it was not asserted by the appellants/plaintiffs that ‘MERO’ is not publici juris, whereas in the present cases it is asserted by the appellants that TEM/TEMO is not publici juris, and the decision in Astrazeneca was primarily founded upon the premise that ‘MERO’ is publici juris being an abbreviation of ‘MEROPENEM’ (which admittedly was generic), in our view that would be the only aspect which would require our consideration to conclude whether or not the decision in Astrazeneca (supra) would apply to the present case. If we conclude that ‘TEM’/’TEMO’ is publici juris for TEMOZOLOMIDE, even the so called differences at sl. Nos.(i), (ii) and (vii) above would not survive and the decision in Astrazeneca (supra) would become applicable squarely to the present cases.

36. We may note that the Division Bench decision in Astrazeneca (supra) has also been followed in a recent decision of this Court in the case of Rhizome Distilleries P. Ltd. and Ors. V. Pernod Ricard S.A. France and Ors, MANU/DE/2742/2009 in FAO(OS) 484/2008 decided on 23.10.2008 by the Division Bench comprising of Vikramajit Sen and V.K.Jain, JJ. In this decision, the Division Bench observed as follows:-
“23. ………….In Astrazeneca UK Limited v. Orchid Chemicals and Pharmaceuticals Ltd. 2007(34) PTC 469 another Division Bench was called upon to decide the dispute in the use of the trademarks MEROMER and MERONEM, in respect of which the learned Single Judge had vacated the ad interim injunction granted earlier. The Division Bench observed that MERO was generic in character and concluded that the suffix in both the rival trademarks were sufficient to draw a distinction between the two. The Bench drew support from the LIV-52 and LIV-T litigation to uphold the refusal of an interim injunction. We can do no better than reproduce a passage from SBL Limited v. Himalaya Drug Company 1997 (17) PTC 540 in which Justice R.C. Lahoti, as his Lordship Chief Justice of India then was, spoke for the Bench in these words – “Nobody can claim exclusive right to use any generic word, abbreviation, or acronym which has become publici jurisdiction. In the trade of drugs it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of”the”drug.”Such”an”organ”ailment or ingredient being public jurisdiction or generic cannot be owned by anyone for use as a trademark”. The jural message, therefore, is clear and unequivocal. If a party chooses to use a generic, descriptive, laudatory or common word, it must realize that it will not be accorded exclusivity in the use of such words. At the most, it may bring a challenge in the nature of passing off and in such an event the Court would look at the rival labels/packagings/trade dresses in order to determine whether a customer possessing a modicum memory and ordinary intelligence may be so confused as to purchase one product believing it to be the other.”

37. We are, therefore, of the view that to get out of the said decision in Astrazeneca (supra), it is essential for the appellant to establish that TEM/TEMO is not publici juris for TEMOZOLOMIDE.

38. There is one other submission urged by Mr. Datta, which we would need to address even if we hold against the appellants that, prima facie, ‘TEM’/’TEMO’ are publici juris, and the decision in Astrazeneca (supra) applies to and binds the appellants’ cases. He has submitted that even if ‘TEM’/’TEMO’ are considered publici juris for TEMOZOLOMIDE, ‘TEM’/’TEMO’ have acquired a secondary meaning for ‘TEMODAL’/’TEMODAR’ on account of the registration and use of the said marks in over 100 countries, and on account of the uninterrupted, longstanding use by the appellants.

39. Mr. Datta submits that a word fragment of the word which denotes the ingredient/pharmaceutical substance, may or may not be generic or publici juris for that pharmaceutical substance. He submits that even if the word fragment is publici juris, such word fragment may acquire distinctiveness for that pharmaceutical substance in the context of certain formulations containing that pharmaceutical substance for certain indications i.e. for the particular goods, by acquiring a secondary meaning from registrations and use, ceasing thereby to be generic/publici juris for that pharmaceutical substance in that limited context. He , therefore, argues that even if it is assumed for the sake of argument that ‘TEMODAL’ and ‘TEMODAR’ were originally generic/publici juris for TEMOZOLOMIDE, TEM/TEMO as incorporated in ‘TEMODAL’ and ‘TEMODAR’ have since acquired distinctiveness by acquiring secondary meaning through, registrations and use of ‘TEMODAL’ and ‘TEMODAR’ in over 100 countries, and thereby TEM/TEMO have ceased to be generic/ publici juris for TEMOZOLOMIDE in the limited context of TEMOZOLOMIDE based brain cancer drugs, and ‘TEM/’TEMO’ have acquired secondary meaning i.e. as abbreviations for ‘TEMODAL’ and ‘TEMODAR’. In support of this submission, Mr. Datta cites example of “Naukri.com”, ‘Superflame’ and ‘Ayur’ and placed reliance on Glaxo Group Ltd. & Ors. v. Vipin Gupta & Ors. 2006 (33) PTC 145 (Del). He also places reliance upon Win-medicare Limited Vs. Somacare Laboratories 1997 (17) PTC 34 (Del), Orchid Chemicals and Pharmaceuticals Ltd. v. United Bio-tech P. Ltd. 2008 (38) PTC 691 (IPAB), Wyeth Holdings Corporation v. Burnet Pharmaceuticals P. Ltd. 2008 (36) PTC 478 (Bom), USV Ltd. v. Cadila Pharmaceuticals Ltd. 2008 (37) PTC 637 (IPAB), USV Ltd. v. IPCA Lab. Ltd. 2003 (26) PTC 21 (Mad), Corn Products Refining Co. v. Shangrila Food Products Ltd. AIR 1960 SC 142, Anglo French Drug Co. (Eastern) Ltd. (Bombay) v. Belco Pharmaceuticals (Haryana) Sup. (2) PTC 452 (P&H) (DB), Water Bush Well Ltd. v. Anil Arora & Others PTC Supp. (1) 849 (Del), Beechem Group PLC v. SRK Pharmaceuticals 2004 (28) PTC 391 (IPAB), State of Maharashtra v. Jethmal Himatmal Jain & Another 1993 (13) PTC 304 (Bom), Biochem Pharmaceutical Industries v Astron Pharmaceuticals & Assistant Registrar Of Trade Marks, Trade Marks Registry 2003 (26) PTC 200 (DEL), Obsurg Biotech Ltd. v. East West Pharma 2008 (36) PTC 542 (IPAB), Lyka Labs Ltd. v. Tamilnadu Dadha Pharmaceuticals Ltd. & Anr. 2006 (33) PTC 512 (IPAB), Baroda Pharma Pvt. Ltd. v. Zeneca Limited UK 2007 (34) PTC 151 (IPAB), Torrent Pharmaceuticals Limited v. The Wellcome Foundation Limited 2002 (24) PTC 580 (GUJ), Ranbaxy Laboratories Limited v. Vets Pharma (P) Limited & Ors. 2005 (31) PTC 116 (IPAB), Orchid Chemicals and Pharmaceuticals Ltd. Vs. United Biotech Pvt. Ltd. and The Registrar of Trade Marks 2008 (38) PTC 691, Wyeth Holdings Corporation and Anr. Vs. Burnet Pharmaceuticals (Pvt.) Ltd. 2008 (36) PTC 478 (Bom), USV Limited Vs. Cadila Pharmaceuticals Limited 2008 (37) PTC 637, Allergen Inc. vs. Sun Pharmaceuticals Industries Ltd. 2006 (32) PTC 495 (CAL), Lyka Labs Ltd. vs. Tamilnadu Dadha Pharmaceuticals Ltd. & Anr., 2006 (33) PTC 512 (IPAB). Remidex Pharma Private Ltd. v. Savita Pharmaceuticals P. Ltd. & Anr. 2006 (33) PTC 157, Pfizer Ireland Pharmaceuticals v. Intas Pharmaceuticals & Anr. 2004 (28) PTC 456, Allergen Inc. v. Chetana Pharmaceuticals 2007 (34) PTC 267 (CAL), Corn Products Refining Co. v. Shangrila Food Products Ltd. AIR 1960 SC 142, Ciba Geigy Limited & Hindustan Ciba – Geigy Ltd. v. Croslands Research Laboratories Ltd. 1995 IPLR 375, Heinz Italia & Anr. v. Dabur India Ltd. 2007 VI A.D. (S.C.) 677, Balsara Hygiene Products Ltd. v. Arm Chaudhury & Anr. 2005 (30) PTC 272 (CAL), Syncom Formulations (India) Ltd. v. SAS Pharmaceuticals 2004 (28) PTC 632 (DEL).

40. Mr. Datta submits that even if the adoption of the respondents marks is assumed to be honest, it can be injuncted if the marks the appellants have acquired distinctiveness. He cites the example of “Dr. Reddy”, which was protected in Dr. Reddy’s Lab. Ltd. v. Reddy Pharmaceuticals Ltd. 2004 (29) PTC 435. He submits that a word-fragment that is generic/ publici juris for a word which is descriptive for certain goods can and does sometimes acquire distinctiveness as a source-cue for those goods. He refers to Plastindia foundation v. Ajeet Singh 2002 (25) 71 (Del).

41. The appellants have also contended that TEMODAL and TEMODAR are valid trademarks and their registrations do not in any way, contravene Section 9 of the Act. It is contended that these registrations are in accordance with the WHO recommendation that the pharmaceutical trademarks “should not be derived from” the INN stems of the constituting chemical salts. It is argued that the marks in question, TEMODAL and TEMODAR cannot be said to be derived from the chemical TEMOZOLOMIDE because: –

a. They are not trivial modification of the word TEMOZOLOMIDE;

b. They are not obtained by the elision of a single syllable from the word TEMOZOLOMIDE;

c. They are not substantially identical to the word TEMOZOLOMIDE;

d. They are not actually descriptive and not merely suggestive of the word TEMOZOLOMIDE;

e. They are not the legal equivalent of the word TEMOZOLOMIDE;

f. They are not so utterly descriptive so as to be disqualified.

42. It is further submitted that the respondents have never filed any rectification or opposition before the Registrar of Trademarks questioning the registration of the appellants on the ground of they being “derived from” TEMOZOLOMIDE.

43. On the other hand, the respondents submit that they have adopted the trademark TEMOKEM/TEMOGET bonafide and have merely followed the practice of the pharmaceutical industry of deriving the name of the medicine from its chemical molecule viz. TEMOZOLOMIDE, which is obviously generic. It is, therefore, contended that the abbreviation or word-fragment, that is, TEM/TEMO of that generic term would also be generic.

44. The next line of argument of the respondent is that, as provided for under Section 17 of the Act, registration of a trademark confers on the proprietor an exclusive right to the use of the trademark taken as a whole and not for parts or fragments of the mark. So the appellants cannot claim exclusivity in respect of word- fragments which are publici juris and descriptive of the generic substance.

45. The respondents also contend that there is no likelihood of confusion between the drugs in question because of the vast price difference in the drugs of the appellants on the one hand, and of the two respondents on the other hand. They also contend that the drugs in question are Schedule-`H’ drugs and that the drugs of the respondents come with a medical warning that they are to be sold only against demand from cancer hospitals, institutions and against the prescription of a Cancer Specialist.

46. The respondents have sought to place reliance on various decisions and upon various published articles and text books on the relevant subject, which shall be referred to a little later.

47. We first proceed to deal with the submissions of Mr. Datta, which relate to his argument that TEM/TEMO is not publici juris for TEMOZOLOMIDE.

48. The crux of the appellants contention is that the word- fragment TEM/TEMO of the word-name TEMOZOLOMIDE Is not generic/ publici juris, as it is not so recognized either by:

i) The WHO (in its notified list of INN-Stems or in its List of Radicals-Groups);
ii) A standard dictionary or medical dictionary;
iii) The market proliferation of brands of formulations of the pharmaceutical substance incorporating the word-fragment TEM/TEMO, which market proliferation is a) uncontested; b) longstanding (c) extensive and (d) significant.

49. The expression “publici juris” is defined in Black’s Law Dictionary (Eighth Edition ) as-
“of public right; of importance to or available to the public a city holds title to its streets as property publici juris> words that are in general or common use and that are merely descriptive and publici juris and cannot be appropriated as a trademark.”

50. The concept of ‘public’, for the purpose of determining whether a word is publici juris for an article or thing would depend on what that article or thing is. For example, if the article or thing is one typically belonging to the field of aeronautics, the knowledge of the general public i.e. the common man on the street, of the meaning of the word would not be relevant. The meaning of the word would have to be gathered from the knowledge of the ‘public’ knowledgeable in the field of aeronautics, to determine whether the word is publici juris for the article or thing for which it is claimed to be publici juris. Similarly, to determine whether ‘TEM’/’TEMO’ is publici juris for TEMOZOLOMIDE, the query would have to be directed to those who would normally be expected to have knowledge of what TEMOZOLOMIDE and ‘TEM’/’TEMO’ mean. If people engaged in the treatment of, and research in the field of brain cancer use the word ‘TEM’/’TEMO’ for TEMOZOLOMIDE, in our view, it would be fair to conclude that ‘TEM’/’TEMO’ are publici juris for TEMOZOLOMIDE.

51. The submission of the appellants that ‘TEM’/’TEMO’ is not generic/ publici juris for TEMOZOLOMIDE because it is not notified as a INN STEM or is not listed as one of the radical groups by the WHO; that it is not so mentioned in a standard dictionary or medical dictionary is fallacious, as it proceeds on the assumption that for a medicine related word/term to become publici juris, it must either to listed as an INN Stem or a radical group by the WHO or by a standard dictionary or medical dictionary. There is nothing to suggest that these sources are exhaustive of medical terms which are publici juris. Whether or not a medical term is publici juris is an issue of fact, which would have to be established at the trial of the suits. At this stage only a prima facie view has to be formed, which is not the final view. Therefore, if there is some material available to show that TEM/TEMO has been used to describe TEMOZOLOMIDE or any other chemical compound, TEM/TEMO would, prima facie, be publici juris.

52. The respondents have placed on record a medical study published in the journal of nuero-oncology by the Duke University, wherein TEMO has been used for TEMOZOLOMIDE. There is another article on the subject of “Synthesis and antibacterial activity of dual– action agents of a β-lactam antibiotic with cytotoxic agent mitozolomide or TEMOZOLOMIDE, wherein TEMOZOLOMIDE has been denoted by TEMO.

53. It is also interesting to note from the above mentioned latter article that there is another chemical compound by the name of MITOZOLOMIDE. The extension ‘ZOLOMIDE’ itself appears to be publici juris for a group of chemical compounds having some common features/properties. Therefore, it appears to be quite natural to refer to TEMOZOLOMIDE as ‘TEMO’ just as MITOZOLOMIDE is described as ‘MITO’.

54. We may also take note of the fact that on the website www.allacronyms.com on keying the abbreviation ‘TEM’, the same leads to, inter alia, TEMOZOLOMIDE. On the website www.medilexicom.com a search for medical abbreviation ‘TEM’, inter alia, results in ‘TEMOZEPAM’ and TEMOZOLOMIDE. We are not suggesting that these instances establish that ‘TEM’/’TEMO’ are publici juris for TEMOZOLOMIDE. But these are instances, which establish that the materials and documents produced by the appellants, to show that ‘TEM’/’TEMO’ refer to TEMODAL and/or TEMODAR are not exhaustive to conclude, at this interlocutory stage, that ‘TEM’/’TEMO’ is not publici juris for TEMOZOLOMIDE, and that they necessarily refer exclusively to TEMODAL and TEMODAR.

55. McCarthy in Trademarks and Unfair Competition, inter alia, states:

“Clearly, one seller cannot appropriate a previously used generic name of a thing and claim exclusive rights in it as a “trademark” for that thing. Similarly, if one seller develops trademark rights in a term which a majority of the relevant public then appropriates as the name of a product, the mark is a victim of
“genericide” and trademark rights may cease.”

“An abbreviation of a generic name which still conveys to the buyer the original generic connotation of the abbreviated name is still generic.”

56. The Madras High Court in Indo-Pharma Pharmaceuticals Works Ltd., Mumbai v. Citadel Fine Pharmaceuticals Ltd., Madras 1998 (18) PTC (DB) (Mad) while dealing with two marks ‘Enerjex’ and ‘Enerjase’ held that the abbreviation of a generic word will also be generic. Reliance was placed on the aforesaid extract from McCarthy in Trademarks and Unfair Competition. Since the components ‘Jase’ and ‘Jex’ were completely dissimilar, injunction was refused by the Court to the plaintiff. The Madras High Court held as follows:
“The two rival marks ‘ENERJEX’ and ‘ENERJASE’ contain the common feature ‘ENERJ’ which is not only descriptive but also publici juris. Therefore a customer will tend to ignore the common feature and will pay more attention to uncommon features i.e `JEX’ and `JASE’. These two cannot be said to have such phonetic similarity so as to make it objectionable.”

“So the word `ENERG/J’ used as a prefix in both the trade names is the abbreviation of the generic term of the English word `energy’. As such, it is descriptive in nature and common in usage. Nobody can claim an exclusive right to the use of the word `ENERG/J’ as the constituent of any trademark.”

57. In The Cellular Clothing Company (supra), the Court held the following:-

“If a man invents a new article and protects it by a patent then during the term of the patent, he has of course a legal monopoly, but when the Patent expires all the world may make the article, and for that purpose use the name which the Patentee has attached to it during the time when he had the legal monopoly of the manufacture. But my Lords, the same thing in principle must apply where a man has not taken out a Patent, as in the present case, but has a virtual monopoly because other manufacturers, although they are entitled to do so, have not in fact commenced to make the article.”(emphasis supplied).

58. The argument of the appellants that to establish that the term TEM/TEMO is publici juris, there should be market proliferation of various brands of ‘TEMOZOLOMIDE’ incorporating the word fragment TEM/TEMO, which market proliferation is un-contested, longstanding, extensive and significant, cannot be accepted in our view, particularly in the light of the fact that the products of the appellants’ enjoyed a patent and, consequently, the appellants enjoyed a statutory monopoly. It is only on account of the fact that the product patent in this country was not protected till the amendment in the law in 2005, that the respondents’ have been able to manufacture the said drug. Obviously, during the tenure of the said statutory monopoly, none could validly manufacture and sell the said drug by whatever name.

59. Therefore, merely because the molecule TEMOZOLOMIDE may have been patented and commercially pioneered by the appellants, they do not become entitled, on the statutorily protected monopoly disappearing, to prevent others from calling, what the molecule is, by its generic name, and such other names which are
“publicly” known to describe and denote it.

60. In McCain International Limited (supra), the Court held:

“Here the plaintiffs have brought the article oven chips before the world, they have given it a name descriptive of that article, they have had a monopoly in it before other persons have entered into competition with them and they cannot now claim a monopoly of that name. All they can claim is that other person who make the same article shall distinguish their products by the appropriate means, which the defendants have adopted in this case, of making it quite clear that the products they produce come from County Fair and Birds Eye respectively.”

61. TEMO has been used for TEMOZOLOMIDE by several parties apart from the respondents, namely, Cipla Limited, who use the brand name ‘TEMOSIDE’, Netco Pharma Limited, who use the brand name ‘TEMONET'”and”Dabur”Pharma”Limited,”who”use”the”brand”name ‘TEMOZEM’.”There are a number of other similar marks with the prefix TEM/TEMO for drugs, which are present in the market. The appellants have themselves pointed out that TEM/TEMO is contained as a part of the trade mark of a variety of different pharmacological groups, such as (i) TEMSIROLIMUS (an anti kidney-cancer agent); (ii) TEMOPORFIN (a photosensitizing anti cancer agent like TEMOZOLOMIDE); (iii) TEMOCILLIN (antibiotic); (iv) TEMOCAPRIL (anti hypertensive). We may also notice that from the documents filed by the appellants it appears that there are various other drugs having the prefix TEM/TEMO such as TEMARIL- trademark for preparations of trimeprazine tartrate; TEMAZEPAM- a benzodiazepine used as a sedative and hypnotic in the treatment of insomnia, administered orally; TEMEFOS- USAN for temephos; TEMEPHOS- an organophosphorous insecticide used a a larvicide for control of mosquitoes and blackflies and as a veterinary ectoparasiticide; TEMODOX- a veterinary growth stimulant; TEMOVATE- trademark for preparations of clobetasol propionate.

62. It has been repeatedly recognized that in the trade of drugs it is a common practice to name a drug on the basis of the name of its active chemical compound or salt, or the disease it seeks to remedy, or the particular organ it is intended to treat. The name of such an ingredient or compound, ailment or organ being in the public domain and of generic nature, which has been used descriptively, cannot be claimed by anyone for use exclusively as only his/her trademark.

63. From the materials produced by the respondent, it is evident that TEM/TEMO have been employed in place of TEMOZOLOMIDE or as abbreviations for certain other medicines. No doubt TEM/TEMO have also been used in place of ‘TEMODAL’ and ‘TEMODAR’. However, there is nothing to suggest that TEM/TEMO mean, and only mean, TEMODAL/TEMODAR and nothing else. Even when TEM/TEMO is used”in relation to ‘TEMODAL’ and ‘TEMODAR’, the reference is actually to the chemical compound TEMOZOLOMIDE, which is the active ingredient in ‘TEMODAL’ and ‘TEMODAR’.

64. Consequently, in our view, prima facie the word fragment TEM/TEMO is publici juris and also generic for and descriptive of the chemical compound, TEMOZOLOMIDE, and, therefore, the appellants cannot claim the exclusive right to use thereof. The decision in Astrazeneca (supra) has rightly been held to apply on all fours to the cases in hand.

65. As the appellants have chosen to brand their product with a generic and descriptive prefix ‘TEMO’, any other person entering the market would be entitled to use the said term to identify the product in question. If the appellants were desirous of avoiding such a situation they should have branded their drug with a unique name instead of a descriptive name. [see Rhizome Distilleries P. Ltd. (supra)]

66. We now proceed to consider the second plea of Mr. Datta, that assuming that ‘TEM’/’TEMO’ are publici juris for TEMOZOLOMIDE, ‘TEM’/’TEMO’ have acquired a secondary meaning for TEMODAL and TEMODAR for the reasons stated by him and that, therefore, the appellants alone are entitled to the exclusive use of the same. Since various cases have been cited in this regard, we proceed to deal with each one of them.

67. In Glaxo Group (supra), the court was dealing with the plaintiff’s marks ‘BETNOVATE’ and ‘CROCIN’ on the one hand and ‘BETAVAT’ and ‘CORINAL’ on the other hand. The court held on a comparison of the various features in the get up of the competing products, that the products of the defendants could be passed off as that of the plaintiff. The court held that the mark ‘CORINAL’ does not appear to be deceptively or confusingly similar to the trademark ‘CROCIN’, but confusion is sought to be created by adopting similar strip/packaging as that of the plaintiff. The defendant was found to be using the logo ‘SGS’ in the same manner as the plaintiff’s logo ‘GSK’ within a heart shaped device. The court found that even though the competing marks were not identical, the marks used by the defendants so nearly resembled the plaintiff’s trademarks as was likely to deceive or cause confusion in relation to the similar goods, on account of the adoption of the similar getup by the defendant in respect of its products. The above was the basis for the grant of injunction by the Court in favour of the plaintiff.

68. This decision does not advance the proposition canvassed by the appellants that even if TEM/TEMO were originally generic/publici juris for TEMOZOLOMIDE, TEM/TEMO as incorporated in ‘TEMODAL’ and ‘TEMODAR’ have since acquired distinctiveness and that TEM/TEMO have acquired a secondary meaning through registration and use of ‘TEMODAL’ and ‘TEOMDAR’ in over hundred countries and thereby ceased to be generic/publici juris for TEMOZOLOMIDE in the context of TEMOZOLOMIDE based brain cancer drugs. The position in the following cases cited by the appellants is the same, which are discussed below in paragraphs 69 to 88. The grant of injunction in all these cases, it would be seen, was, inter alia, either on account of similar get up or on account of minimal difference in the trade name leading to structural and/or phonetic and/or visual similarity in the competing marks, and not on account of the Court allowing appropriation of a term which is publici juris by the plaintiff on the ground that the publici juris term has acquired a secondary meaning to denote the product of the plaintiff alone.

69. In Win-medicare Limited (supra) the plaintiff had brought the action for passing off. The competing trademarks were ‘DICLOMOL’ of the plaintiff and ‘DICMOL’ of the defendant. It was not an action founded upon Section 29 of the Act for infringement of registered trademark. Neither of the two trademarks in question in that case were registered. The court concluded that the two marks were structurally and phonetically similar which gave the impression that the defendant had copied the mark of the plaintiff. It was on this basis that the court had granted the injunction.”The difference in ‘DICLOMOL’ and ‘DICMOL’ was only that the two letters ‘LO’ had been removed from the plaintiff’s mark by the defendant while coining its own mark ‘DICMOL’. On account of the structural and phonetic similarity the court had granted the injunction.

70. Similarly, in Wyeth Holdings (supra) while considering whether the mark “FOLV’ of the defendant was deceptively similar to the mark ‘FOLVITE’ of the plaintiff, the court held that the two competing marks have to be considered as a whole. The structure of the mark visually and phonetically must be borne in mind. The image that the court must have is that of the quintessential common man. It was held: “when the Judge looks at phonetics, the sound which accompanies the pronunciation of the mark is the sound of the mark to an ordinary purchaser bereft of the niceties of language.” Neither the term ‘FOL’ derived from ‘FOLIC ACID’; nor the term ‘VITE’ derived from ‘VITAMIN’ were treated as being the proprietary of the plaintiff and that was not the basis of the said decision.

71. In USV Ltd. v. Cadila Pharmaceuticals Ltd (supra) the Intellectual Property Board was considering the two competing marks ‘PIOZULIN’ and ‘PIOZ’. Both were held to be structurally one and the same and they even looked alike. It was for this reason that the Appellate Board declared the registration obtained by the respondent to be invalid.

72. In USV Ltd. v. IPCA Lab. Ltd. (supra) the Madras High Court was considering the two competing marks namely, ‘PIOZ’ of the plaintiff and ‘PIOZED’ of the defendant. Since they were found to be phonetically similar and were drugs intended to be used for the same disease, the court injuncted the defendant from adopting the mark ‘PIOZED’. The active ingredient in the two drugs in question was ‘PIOGLITAZONE HYDROCLORIDE’. It was held that the prescription given by the doctors for purchase of medicines ‘PIOZ’ or ‘PIOZED’ will be in scribbling and the spelling normally written by doctors may not be read by common man and even by the English knowing literates. Even the chemists in the drug stores may not be able to make out a distinction between the ‘PIOZ’ and ‘PIOZED’ scribbled by the doctors. It was on this account that the court granted injunction in favour of the plaintiff. The court even in this case did not hold that the plaintiff was entitled to the exclusive use of the abbreviated version of the generic active compound in the medicine namely “PIOGLITAZONE HYDROCLORIDE”.

73. In Anglo French Co. (supra) the Punjab and Haryana High Court was concerned with the plaintiffs registered mark ‘BEPLEX’ and the defendant’s mark ‘BELPLEX’ being used for vitamin ‘B COMPLEX’ tablets. Even in this case the court concluded that there was deceptive similarity both phonetic and visual in the goods manufactured by the parties which is likely to cause confusion and deception in the minds of the purchasers. On this account the court granted injunction in favour of the appellant/plaintiff. This decision also, therefore, is of no avail to the appellants.

74. In Water Bush Well (supra) a learned Single Judge of this court was dealing with a claim for infringement of trademark ‘AMCLOX’ of the plaintiff, by the defendant who had adopted ‘AMPCLOX’.”The court granted injunction on the ground that ‘AMCLOX’ and ‘AMPCLOX- 500’ were both visually and phonetically similar to deceive and to cause confusion amongst the buyers of the products. The court also took into account that the mere insertion of the letter ‘P’ in the defendant’s mark would not make a difference while hearing the name of the mark. The court also compared the colour combination of the capsules. No doubt, the argument that the drug was a Schedule-H drug was advanced by the defendant, and the same was rejected by the court on the ground that for a minor complaint or indisposition one does not always go to the medical practitioner and the same medical preparation (even though they are Schedule H drugs) would be administered by a patient/person by directly approaching the chemist, in our view the said distinction cannot be held good in the present case as we are dealing with a drug meant for treating brain cancer which, by no means, can be described as a minor complaint or indisposition. As noticed by the learned Single Judge the medicines/drugs in question contain a warning that the same can be sold only on the prescription of not just any ordinary medical practitioner, but on the prescription of only a Cancer Hospital or Cancer Specialist. We may hasten to add that we are not commenting on the view of the learned Single Judge, as aforesaid, one way or another, as it is not necessary for us to do so in view of the materially different factual context. This decision also, therefore does not support the appellants cases.

75. In Biochem Pharmaceuticals Limited (supra) the learned Single Judge of this Court was concerned with the trademarks ‘BIOCILIN’ and ‘BICILLIN’ in respect of the same drug. Once again the court concluded that there was phonetic deceptive similarity in the two marks which is likely to lead to confusion and deception. Though the relief of injunction was granted, it was not on the basis that the appellant was entitled to appropriate the generic name of the two drugs in question namely ‘AMPICILLIN’ and ‘CLOXACILLIN’. In this case both”the”parties”were”manufacturing”the”drug”by combining ‘AMPICILLIN’ and ‘CLOXACILLIN’.”The appellant had used the mark ‘BIOCILLIN’ as it was a combination of two drugs. Consequently, ‘Bio’, of which ‘Bi’ means two, was used as a prefix to coin the word ‘BIOCILLIN’. The respondent had done the same and had merely dropped the letter ‘O’ and introduced an extra ‘L’ in the trademark adopted by it. This case, therefore, has no relevance.

76. Beecham Group PLC (supra) is a decision of Intellectual Property Board, Chennai in respect of the application made by the applicant for registration of the mark ‘LYMOXYL’. The trademark ‘AMOXIL’ belonged to the objector. Once again the court held that the mark adopted by the applicant was phonetically, structurally and deceptively similar to that of the objector. The only difference in the applicants trade name was the employment of the letters ‘LY’ and ‘M’. Like the earlier decisions this decision does not advance the proposition propounded by the appellants, and is, therefore, of no relevance.

77. In Obsurge Biotech Limited (supra) the common trademark was ‘SERADIC’. Since the two marks were identical in respect of medicinal preparations, the rectification application was allowed. This case has absolutely no relevance for our purpose.

78. Lyka Labs (supra) also is a decision of IPAB, Chennai dealing with the marks ‘TAMIACIN’ and ‘TAMNIFO’ on the one hand and the mark ‘TAMIN’ on the other hand. The Appellate Board was examining whether ‘TAMIN'”is”deceptively similar to the”registered”marks ‘TAMIACIN’ and ‘TAMNIFO’. The Board held that the mark ‘TAMIN’ was phonetically, visually or structurally similar to the respondents mark ‘TAMIACIN’. Once again this decision did not proceed on the basis that a party could appropriate to itself the generic name or the abbreviation of the chemical active compound in a drug.

79. Baroda Pharma Private Limited (supra) is also a decision of the IPAB, Chennai dealing with the mark ‘TENOREX’ and ‘TENORMIN’. ‘TENOREX’ was not permitted to be registered on the opposition of the proprietor of the mark ‘TENORMIN’ on the ground of deceptive and phonetic similarity which was likely to cause confusion. We find that though the argument of publici juris in respect of the prefix ‘TENOR’ did arise, the same was not gone into by the Appellate Board. Consequently, this decision does not help the appellants.

80. Torrent Pharmaceuticals Limited (supra) is a decision of the Gujarat High Court dealing with the mark ‘TROVIREX’, which was objected to by the proprietor of the mark ‘ZOVIREX’. The registration of ‘TROVIREX’ was denied on the ground that ‘TROVIREX’ had the highest degree of resemblance, visually and phonetically and the same was likely to deceive or cause confusion in the minds of the purchasers of the drug. The Gujarat High Court does not appear to have gone into the issue of publici juris in respect of the concerned active chemical compound, disease, organ on the basis of which the drug ‘ZOVIREX’ might have been named. This judgment is, therefore, of no assistance to the appellants.

81. Ranbaxy Laboratories (supra) is also a case decided by the IPAB, Chennai. The trademark under examination was ‘LEVASOL’, in respect whereof opposition was filed by the proprietor of the trademark ‘LEMASOL’. ‘LEVASOL’ was a veterinary medicine, whereas ‘LEMASOL’ was a pharmaceutical preparation for human use. The IPAB held that there was phonetic and visual identity, inasmuch as, for the letter ‘M’ in the objector’s drug, the letter ‘V’ had been substituted by the applicant. The drug of both the parties fell within the same class 5 and the distribution channel of the goods being the same, there was likelihood of confusion. This case also does not throw any light on the generic chemically active compound on which either of the two drugs were based. It has absolutely no relevance to the cases in hand.

82. Allergen Inc. v. Sun Pharmaceuticals Industries Ltd. (supra) is the decision of the Calcutta High Court. The suit had been filed alleging passing off of the ophthalmic solution under the trademark name ‘OCUFLOX’.”The defendant was also marketing its product, which could be used both for treatment of eyes as well as ears with the same tradename ‘OCUFLOX’.”It was for this reason, the Court had granted the injunction. This case, therefore, has absolutely no bearing on the present appeals.

83. Allergen Inc. v. Chetana Pharmaceuticals (supra) is a case decided by the Calcutta High Court in respect of the trademark ‘OXYLINE’. The plaintiff was the proprietor of the said mark in relation to a drug for ophthalmic use. The defendant used the identical mark in relation to its drug i.e. nasal drops. Since the marks were identical, injunction followed. This case too has no bearing on the issue in hand.

84. Remidex Pharma Private Ltd. (supra) is a decision of a learned Single Judge of this Court. The competing marks were ‘ZEVIT’ and ‘EVIT’. The defendant had adopted ‘EVIT’ in respect of its vitamin tablets. The defence of the defendant was that the clipping ‘VIT’ had been taken from word vitamin and was, therefore, generic. Since the product of the defendant was vitamin E tablets, the defendant claimed bonafide adoption of the mark ‘EVIT’.”The learned Single Judge while confirming the injunction in favour of the plaintiff observed that on comparison of ‘ZEVIT’ with ‘EVIT’, the prefixes ‘ZE’ and ‘E’ of ‘ZEVIT’ and”‘EVIT’, respectively, are phonetically similar. It was, on this account that the Court held that the mark ‘EVIT’ is deceptively similar to the registered mark ‘ZEVIT’ of the plaintiff. It is not that the Court proceeded on the basis that the plaintiff had the right to appropriate to itself the generic and phonetic term ‘VIT’ derived from vitamin. Consequently, this case too does not advance the case of the appellants.

85. In Pfizer Ireland Pharmaceuticals (supra) the Court was dealing with the passing off action. The court found that there was phonetic”and”visual”similarity”between”‘LIPITOR'”and”‘LIPICOR’, inasmuch as, only one letter i.e. ‘T’ had been replaced by ‘C’. It was, on this account, that the Court had granted the requisite injunction in favour of the plaintiff.

86. In Heinz Italia & Anr. (supra) the Supreme Court was dealing”with”the”marks”‘GLUCON-D'”of”the”appellant/plaintiff”and ‘GLUCOSE-D’ of the respondent/defendant.”The injunction granted in this case was, again, not founded upon the recognition of any exclusive right of the plaintiff to appropriate the word ‘GLUCOSE’ which is generic.”The injunction was granted on the basis that ‘GLUCON-D’ and”‘GLUCOSE-D'”appear”to”have”phonetic”similarity.”The color scheme in the packaging of the two competing products was also found to be more or less identical. The court found that the packaging and getup of the two competing products was almost identical. It was on this basis that the injunction was granted.

87. The decision in Balsara Hygiene Products Ltd. (supra) is also of no use to the appellants. The court while recognizing the legal principle that a party cannot have any monopoly right to use a generic word, concluded in the facts of that case that the plaintiff had not used a generic word and on that basis the defence of the defendant was rejected in respect of the defendant’s marks ‘ODOJA’ in comparison with”the”plaintiff’s”registered”trademarks”‘ODONIL’,”‘ODOPIC'”and ‘ODOMOS’.”The Court held that ‘ODO’ was an adoption and/or coinage of the plaintiff and was not a dictionary word. Consequently, the court, in fact, rejected the argument that ‘ODO’ was publici juris for ‘ODOUR’. This case too has no application in the facts of the present cases.

88. Syncom Formulations (India) Ltd. (supra) was a case of passing off in respect of the plaintiff’s trademark ‘REGULIN FORTE’ by the defendant who adopted the mark ‘REGU-30’. This Court dismissed the first appeal preferred by the defendant against the grant of injunction by the Trial Court in favor of the plaintiff. In the facts of that case the Court found that the mark of the defendant was confusing and deceptively similar to that of the plaintiff and the product of the defendant could be passed off as that of the plaintiff. This case also has absolutely no bearing on the present appeals.

89. The decision in Ciba Geigy Ltd.(supra), in our view, is also of no assistance to the appellants, as this case proceeded on the foundation that the medicine vendor may not know the difference, and he may unknowingly give the product of the defendant (‘VOLTA-K’ in this case) in place of the product of the plaintiff i.e. ‘VOLTAREN’. In the facts of the present cases, considering the nature of the drug, the warning endorsed on the drugs of the respondents, and the price difference in the drugs of the appellants on the one hand and those of the respondents on the other hand, in our view, there is no scope for any such confusion, and this decision has no bearing on the present appeals.

90. Corn Products Refining Co. (supra) was a case where the Supreme Court was concerned with the claim for registration made in respect of the mark ‘GLUVITA’ in respect of the biscuits made by the respondent. The appellant before the Supreme Court had got the mark ‘GLUCOVITA’ registered in respect of ‘DEXTROSE’, a substance used as food or as an ingredient in food; glucose and food. This is not a decision dealing with medicines/drugs. The relief granted to the appellant in the said case was primarily founded upon the similarity in the marks in question namely ‘GLUVITA’ and ‘GLUCOVITA’.”The letters `CO’ alone had been dropped by the respondent from the mark of the appellant to coin the mark `GLUVITA’. It does not advance the submission of the appellants, as the ratio of this decision is not to the effect that the word fragment of a generic/publici juris word can be appropriated by the person who may have used the word fragment as a part of a descriptive trademark.

91. The State of Maharashtra v. Jethmal Himatmal Jain (supra) is not a case dealing with infringement of trademark or even with passing off. The same is, therefore, of no relevance whatsoever.

92. The appellants have relied upon the decision Plastindia Foundation (supra) in support of their submission that a word fragment of a word that is generic/publici juris which is descriptive of certain goods, can and does sometimes acquire distinctiveness as a source que for those goods. In Plastindia Foundation (supra) the plaintiff had adopted the name ‘Plastindia Foundation’ for its trust, which was an apex body of associations of all the leading organizations and institutes concerned, directly or indirectly, with the manufacture, sale or promotion of plastics in India. The defendant adopted the same mark ‘PlastIndia’ for their magazine. The court granted an injunction in favour of the plaintiff and against the defendant from using the said mark on the basis that the adoption of ‘PlastIndia’ by the defendant may lead to the confusion that the magazine ‘PlastIndia’ has its source at, or that it has connection with Plastindia Foundation i.e. the plaintiff.

93. We do not see the relevance of this decision in the present context. Plastindia was a coined word derived from generic words Plastic and India. The Court did not hold that the Plaintiff alone was entitled to appropriate ‘Plast’ or ‘India’, which are publici juris/generic. Pertinently, the Court permitted the defendant to use, inter alia, “PLAST WORLD” and “WORLD PLAST”. It follows that others too would be entitled to use these generic and descriptive words. However, that does not mean that another person can use the identical or deceptively similar name/mark which is likely to cause confusion and deception. Because the Court found that the defendants mark was more or less identical with that of the plaintiff, and could lead to confusion and deception with regard to the source of the defendants’ magazine, the Court granted the injunction in favour of the plaintiff. Pertinently, this is also not a case relating to drugs.

94. TEMOZOLOMIDE is a generic word. TEM/TEMO, as we have already seen, is publici juris for TEMOZOLOMIDE. TEM/TEMO is not generic for the trademarks ‘TEMODAL’ and ‘TEMODAR’ of the appellant, but for TEMOZOLOMIDE. The use of TEM/TEMO in TEMODAL/TEMODAR is descriptive of ‘TEMOZOLOMIDE’. The use of the marks TEMOKEM and TEMOGET by the respondents, therefore, possibly cannot lead to the inference that TEMOKEM and TEMOGET have been sourced from the manufacturers of TEMODAL and TEMODAR i.e. from the appellants. Such a conclusion is also contra-indicated by the vast difference in price of the products of the appellants and the respondents.

95. The SUPERFLAME case (Globe Super Parts v. Blue Super Flame Industries AIR 1986 DELHI 245) was a passing off action by the plaintiff who was the proprietor of the unregistered mark “SUPERFLAME”. The defendants were using the mark “SUPERFLAME” for the same articles, namely, gas appliances. The Court held that the mark “SUPERFLAME” was a coined word. It was held that “SUPERFLAME” was not descriptive of gas stoves. For this reason, the Court granted permanent injunction to restrain the defendants from using the word “SUPERFLAME”, as the plaintiff was the prior user of the said coined word. Such is not the claim in the present appeals.

96. Dr. Reddy’s Laboratories Ltd. v.”Reddy Pharmaceuticals Ltd. 2004 (29) PTC 435 (Del) was a case of passing off. The Court came to the conclusion that the adoption of the mark “REDDY” by the defendant was fraudulent to encash upon the trade reputation and goodwill of the plaintiff built over two decades. The Court found that there was phonetic similarity between “DR. REDDY” and “REDDY” capable of creating confusion. The Court also found deceptive similarity in the names and packaging of the drugs of the defendant with those of the plaintiff. It is for this reason that the Court had granted injunction. The Court did not declare that “REDDY” could not be used by another person by that name bonafide, even if such user is not deceptively similar to that of the plaintiffs. This case, therefore, has no relevance in the present context.

97. Ayurherbs Pharmaceuticals Private Limited v. Three-N- Products Private Limited 2007 (35) PTC 261 (Del) was a case where the plaintiff, the proprietor of the mark “AYUR” initiated an action against the defendant, who had adopted a business/tradename “Ayurherbs Pharmaceuticals Private Limited”.”The defendant was also in the same trade, namely, manufacture and sale of ayurvedic products, as the plaintiff, who was selling its ayurvedic products under the trademark “AYUR”. The Court dismissed the defendant’s first appeal against the grant of injunction by the trial Court, on the premise that the use of the name “AYUR” by the appellant is likely to cause confusion in the mind of the ordinary purchaser and, consequently, it was held that the adoption of the name “AYUR” by the appellant in its trade name amounts to passing off. In this case the Court did not hold that “AYUR” was publici juris for ayurveda or that the plaintiff was exclusively entitled to appropriate to itself the use of the generic term ayurveda or its abbreviation “AYUR”.

98. The”second”‘Ayur'”case”reported”as”Three-N-Products Private Ltd. v. Karnataka Soaps & Detergents Ltd. & Anr. 2007 (34) PTC 515 (Cal) was also a passing off action. As the plaintiff was the prior user of “AYUR”, the defendant was injuncted from using the said mark for soaps. This case too is of no relevance for our purpose.

99. In Indo Edge (India) Pvt. Ltd. & Anr. v. Shailesh Gupta & Anr. 2002 (24) PTC 355 (Del) the plaintiff had developed the domain name “NAUKRI.COM” used to provide job placement services and employment with the peculiarity that the plaintiff had adopted a Hindi word with English script. It was held on the basis of press reports and write ups that the domain name of the plaintiff is unique and distinct which has a distinctive character and which has assumed a reputation in the market. The defendant, who had a similar business with the domain name “jobsourceindia.com”, had also adopted “naukari.com”. The”Court”held”that””If”a”product”of”a”particular”character”or composition is marketed in a particular area or place under a descriptive name and gained a reputation thereunder, that name which distinguished if from competing products of different composition, the goodwill in the name of those entitled to make use of”it there was protected against deceptive use there of the name by competitors”. The Court referred to McCarthy on Trademarks and Unfair Competition Vol.2, 3rd Edition, wherein in para 12.5(2) it was stated that in order to obtain some form of relief on a “passing off” claim, the user of the generic terms must prove some false or confusing usage by the newcomer above and beyond mere us of generic name. The only difference between the plaintiff’s and the defendant’s domain names was the insertion of the letter ‘A’ between the letters ‘K’ and ‘R’ in the word “Naukri”. It was further held that even if “Naukri” is assumed to be a generic word, the adoption of a similar mark by the defendant, when the plaintiff’s mark had attained distinctiveness and was associated with the business of the plaintiff for a considerable time, was dishonest and in bad faith. It is for these reasons that the Court had granted the injunction in favour of the plaintiff. In our view, this decision does not advance the case of the appellants, as, in our opinion, the marks of the appellants on the one hand and those of the respondents on the other hand are not phonetic and visually similar.

100. In Cadila Health Care Ltd. V. Cadila Pharmaceuticals Ltd. (supra) the two competing trademarks were ‘FALCIGO’ of the plaintiff and ‘FALCITAB’ of the defendant. Both the drugs were meant to cure cerebral malaria commonly known as “falcipharum”. The drugs were schedule ‘L’ drugs which means, that the drugs were not at all available for sale in retail and could be supplied only to hospitals and clinics. Consequently, there was even stricter regime for the sale of such drugs when compared to Schedule ‘H’ drugs. There was also substantial price difference in the two drugs. The Trial Court as well as the High Court (in First Appeal) found that the packaging and getup of the two products was not deceptively similar or confusing. The extra Assistant Judge, Vadodra declined the interim injunction sought by the plaintiff. This order was upheld in First Appeal. The Supreme Court also declined to interfere with the order. The reasons given by the Supreme Court for its decision, and the principles to be kept in mind while dealing with an action for infringement or passing off, specifically in the cases relating to medical products, were subsequently set out by the Supreme Court in the aforesaid judgment. The Court did not grant the interim injunction for the reason that it felt that there was possibility of evidence being required on merits of the case. The Court felt that expression of opinion on merits of the case by the Supreme Court at the interlocutory stage would not be advisable.

101. In the above decision, the action was brought by the plaintiff alleging passing off. It appears that the same was not an action for infringement of trademark under Section 29 of the Act. The Supreme Court in this decision overruled its earlier decision in S. M. Dyechem Ltd. v. Cadbury (India) Ltd. (2000) 5 SCC 573 in so far as it has been held in S.M.”Dyechem”(supra)””Where”common marks”are included in the rival trade marks, more regard is to be paid to the parts not common and the proper course is to look at the marks as whole, but at the same time not to disregard the parts which are common.” The Supreme Court held that “…………the decisions in the last four decades have clearly laid down that what has to be seen in the case of a passing off action is the similarity between the competing marks and to determine whether there is likelihood of deception or causing confusion…………Having come to the conclusion, in our opinion incorrectly, that the difference in essential features is relevant, this Court in Dyechem case (supra) sought to examine the difference in the two marks “PIKNIK” and “PICNIC” “.

102. The Supreme Court then proceeded to refer to American Court’s decisions relating to medicinal products. In paragraphs 35 and 36 the Supreme Court laid down the factors to be considered by the Court in an action for passing off on the basis of unregistered trademark. The said paragraphs reads as follows:

“35. Broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered:

a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.

b) The degree of resemble ness between the marks, phonetically similar and hence similar in idea.

c) The nature of the goods in respect of which they are used as trade marks.

d) The similarity in the nature, character and performance of the goods of the rival traders.

e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.

f) The mode of purchasing the goods or placing orders for the goods and

g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.

36. Weightage to be given to each of the aforesaid factors depends upon facts of each case and the same weightage cannot be given to each factor in every case.”

103. As we have already noticed, the present is an action for infringement under Section 29 of the Act and not an action for passing off. In any event, on consideration of the various factors set out by the Supreme Court, as aforesaid, to us it is clear that keeping in view the nature of the marks-which are word marks; the lack of resemblance between the marks-phonetic or otherwise; the fact that the word fragment ‘TEMO’ is publici juris for the generic term TEMOZOLOMIDE, which is the active ingredient in the appellants drugs and the use of ‘TEMO’ is, therefore, descriptive; the fact that the appellants cannot appropriate to themselves the exclusive use of a generic term which is publici juris and descriptive; the fact that the drugs in question are Schedule-H drugs and that there are vast price differences, we are of the view that the injunction earlier granted in favour of the appellants in the two cases have rightly been vacated by the learned Single Judge.

104. Learned counsel for the appellants has also sought to urge that the trademarks of the appellants are valid, and the respondents have not challenged the registration of the appellants’ marks by seeking rectification.

105. The issue before us is not with regard to the validity of the appellants’ trademarks TEMODAL and TEMODAR. Merely because the said trademarks may be valid and legally registered and their registrations may not contravene Section 9 of the Act, it does not necessarily lead to the conclusion that the appellants would be entitled to claim proprietary over a word fragment of their marks, particularly when the said word fragment is publici juris for a generic compound TEMOZOLOMIDE, and is used descriptively for the active chemical compound in the appellants products and is descriptive in nature.

106. Mr. Datta submits that the appellants would fail in their action only if the appellants trademarks are a trivial modification of the word TEMOZOLOMIDE; the appellants’ trademarks are obtained by elision of a single syllable from the word TEMOZOLOMIDE; the appellants’ trademarks are substantially identical to the word TEMOZOLOMIDE; the appellants’ trademarks are legal equivalent of the word TEMOZOLOMIDE.

107. These may be some of the grounds for the appellants to fail in their action against the respondents, but these are not the only grounds why the Court would deny interim relief of injunction in cases like these. For the appellants to succeed, they must also establish that the respondents have no right to use the generic name/abbreviation of the compound ‘TEMOZOLOMIDE’ in their drugs, and that the appellants have an exclusive right in this regard. This, unfortunately for the appellants, they have failed to show. In our view, for the appellants to fail it is enough that the appellants’ trademark have been coined by combining the publici juris abbreviation TEM/TEMO for TEMOZOLOMIDE with the suffix ‘DAL’ in one case and ‘DAR’ in the other case, the marks of the appellants are descriptive, and the marks of the respondents do not bear phonetic or visual similarity which could be said to be deceptive or confusing for the purchasers of the drugs in question.

108. The registration of the appellants marks is in respect of TEMODAL and TEMODAR. By virtue of Section 17 of the Act, it is the said marks and not parts of the said marks, which stand protected. Consequently, TEM/TEMO cannot be claimed to enjoy protection by virtue of Section 17 of the Act. Section 17 of the Act confers on the proprietor the exclusive right to the use of the trademark as a whole.

It provides: “Notwithstanding anything contained in sub-section (1) when a trademark contains any matter which is common to the trade or is otherwise of a non-distinctive character, the registration thereof shall not confer any exclusive right in the matter forming only a part of the whole of the trademark so registered” (See Section 17 (2) (b)).

109. The packaging in which the products of the appellants, namely, ‘TEMODAL’ is marketed and the products of the respondents’ ALKEM and GETWELL are marketed, have been placed on record.
‘TEMODAL’ is marketed in 20 mg tablets, each bottle containing 5 tablets. On the other hand ‘TEMOKEM’ is marketed in an aluminum strip of five tablets and the potency of the tablets is 100 mg. There is absolutely no similarity in the getup of the packaging adopted by the appellants and the respondents. Similarly, ‘TEMOGET’ is sold in an aluminum strip of five capsules of either 20 mg or 250 mg. The colour of the capsules of the appellants is green for the 5 mg capsule, brown for the 20 mg capsule, blue for the 100 mg capsule and black for the 250 mg capsule. The product of the respondent GETWELL is sold in capsules of 20 mg of blue colour, 100 mg in while colour and 250 mg in green colour. Therefore, there is no similarity in the getup of either the packaging or the product itself.

110. In our view, the factors that the products of the respondent contain the warning “To be supplied against demand from cancer hospitals, institutions and against a prescription of a cancer patient only” and the huge price difference (about 600%) in the product of the appellants on the one hand, and the respondents on the other hand, are extremely germane considerations to rule out the possibility of any confusion or deception in the minds of the purchasers of the drugs in question.

111. The drugs of the respondents can be bought only against prescriptions from cancer hospitals, institutions and cancer specialists and not otherwise. The appellants have not produced any credible material to show actual confusion or that their product is, in any way, superior to that of the respondents which could be relied upon at this stage of the proceedings.

112. The aforesaid trademarks cannot be deciphered or considered separately i.e. by fragmenting them, but must be taken as a whole. But even if they are taken as a whole, the prefix TEMO used with suffix KEM and GET in the two competing names distinguish and differentiate the products of the appellants from those of the two respondents. When they are taken as a whole, the aforesaid two trademarks of the two respondents cannot be said to be either phonetically or visually or in any manner deceptively similar to the trademarks of the appellants i.e TEMODAL and TEMODAR.

113. The common feature in the competing marks i.e. TEMO is only descriptive and publici juris and, therefore, the customers would tend to ignore the common feature and would pay more attention to the uncommon feature. Even if they are expressed as a whole, the two do not have any phonetic similarity to make them objectionable.

114. Consequently, we find no infirmity with the findings arrived at by the learned Single Judge at this stage. The learned Single Judge was justified in not continuing the temporary injunction in favour of the appellants/plaintiffs. We, therefore, dismiss these appeals but with no orders as to costs. However, we direct the respondents Alkem and Getwell in the two appeals to maintain detailed accounts of the sales of their respective drugs ‘TEMOKEM’ and ‘TEMOGET’ and to regularly file half yearly statements in the suit, till the disposal of the suit. It goes without saying that any observation made by us on the merits of the cases of either party is only tentative, and the learned Single Judge shall decide all issues arising in the suit without being influenced one way or another by our said findings.

(VIPIN SANGHI) JUDGE

(MUKUL MUDGAL) JUDGE

DECEMBER 01, 2009
as/rsk/dp

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JUDGMENT

M. L. JAIN J.

(1) THE respondent Shri R. K. . Jain filed a complaint against (1) Shri F. L. Berawalla and (2) his daughter Smt. J. T. Saboo-wala, (3) Shri M. M. Bhatt, (4) Bombay Law House and (5) the Metropolitan Book Co. , Pvt. , Ltd. , under Section 190 Criminal Procedure Code. read with Sections 51 and 63 of the Copy Right Act, 1957 (herein the Act). The complainant stated that he is the author of the Central Excise Law Guide (1st to 4th Editions). The first edition was published in 1977, the second in 1979 and e third in 1980 and the fourth in 1982. He also publishes a monthly journal. Excise Law Times. He is the original author of these publications and has become the first owner of the copyright therein. The copyright has been acquired on the basis of intellectual labour and hard work for nearly ten years, of good deal of collection of relevant material and information and, of its editing and expenditure in the preparation of its work and its publication and writing of detailed comments, and of giving expert views on various legal aspects.

(2) ACCUSED No. I Berawalla is the author of the offending publication Central Excises (Law and Practice) 2nd edition, 1982. Accused No. 2 is the co-author. Accused No. 3 is the publisher of the book. Accused No. 4 is the firm of publisher and Accused No. 5 is the seller of the said book. It was alleged that the accused person have infringed the copy right of the complainant by substantially, lavishly and vulgarly copying from his works, by printing and publishing and selling such infringing work. A copy of each of the 3rd edition of the Central Excise Law Guide, fourth edition of the same book, 5th edition and 9th edition of the Central Excises Tariff of India and a copy of the Excise Law Times for the month of July, 1978 were placed on record. He also produced the infringing copy. He also detailed the matter copied from his book by the accused and stated that his copy right has been infringed in the following manner :-

(a) Large number of the paragraphs have been copied out vertatim by the accused; (b) Most of the mistakes committed in the original work have been. repeated in the infringing work; (c) Headings have been copied in the infringing work from the original work of the complainant; 8 (d) If some omission have taken place in the original works of the complainant the same have also taken place in the infringing work; (e) The complainant has condensed judgments and departmental clarifications in his own style with great labour and expenses but the accused have copied the same without any recourse to the source. (f) The book contains personal views of the complainant. The same comments have been repeated vertatim by the accused persons in their infringing work. (g) The expert opinions given on the problems of readers of the Excise Law Times have also been copied by the accused persons and thus the matter which is out of context has also found place in the infringing work because of the copying from the original work of the complainant.

(3) BESIDES, inviting the court to punish the accused under the Act, the complainant also prayed for directing the general search and seizure of the infringing copies, the manuscript of the infringing work, bill book, receipt books, cash memo and delivery challans from 1-8-1982, all copies of the original works of the complainant, proof and print order of infringing publication and all other related material.

(4) THE learned Metropolitan Magistrate summoned Accused Nos. 1 to 4 by his order dated 29-10-1982 under Section 63 of the Act. He did not find any case against Accused No. 5. On the same day, he also made an order under Section 93 of the Criminal Procedure Code. for search and seizure of the premises mentioned therein and the seizure of the material mentioned therein.

(5) ON 15-1-1983 the learned Magistrate made an order to admit Accused Nos. 3 and 4 to personal bond in the sum of Rs. 2000. 00 till the next date of hearing for and directed counsel for Accused No. 1 and 2 to call their clients on the last date of hearing their personal appearance.

(6) THE present revision petition was filed by Berawalla and his daughter under Section 397, 401 and 482 Criminal Procedure Code. for quashing of the proceedings pending before the learned Magistrate. The substance of their case is that no offence prima facie is made out against the petitioners upon the allegations made by the complainant.

(7) I have heard the parties. Section 14 (1) of the Act, defines ‘copy right’ as follows :-

” (1) For the purpose of this Act, ‘copyright’ means the exclusive right, by virtue of and subject to the provisions of, this act,- (a) In the case of literary, dramatic or musical work, to do and authorise the doing of any of the following acts, namely :- (i) to reproduce the work in any material form; (ii) to publish the work; (iii) to make any adaptation of the work; The rest of the provisions are not material for our purposes. Such copyright subsists in original, literary, dramatic musical and artistic work, vide Section 13 of the Act. It is infringed when any person without licence granted by the owner or the Registrar of Copyrights or in contravention of the conditions of such a licence, inter alia, does anything the exclusive right to do which is conferred upon the owner of the copyright, vide Section 51.

(8) IN Sampath Ayyangar,a. C. v. Jamshedjikatiga, C. S. No. 350 of 1951 dated 26-4-1952 (Mad.) Quinquential Digest 1851-55 p. 199, it was held that in the case of the extracts from judgments and select committee reports not covered by copyright there will be infringement of copyright, if there has been expenditure of skill, taste labour and brains in selections by an author and the very same selections are copied by the subsequent author in whole passages servilely with all tell-take mistakes, which serve to show piracy. Similarly in the scheme of the book, arrangement of topics, headings, phrases, conclusions, criticism, common passages, common mistakes, idioms, etc. would be proof of copying, if similarity between two works was not due. to coincidence or copying from common un copyright matters and was essential and not inane, common and inevitable.

(9) IN Macmillan and Company Ltd. v. K. and J. Cooper, AIR 1924 PC 75, it was observed that the more process of selecting passages from works readily accessible to the public is not, but the difficulty in obtaining access to the originals or skill manifested in making or arranging the selection is sufficient to give to the selection character of an original literary work. In such a case copyright might well be acquired for the print of the selected passages. It is the product of the labour, skill and capital of one man which must not be appropriated by another, not the elements, the raw material, if one may use the expression, upon which the labour and skill and capital of the first have been expended. To secure copyright for such product it is necessary that the labour, skill and capital expended should be sufficient to impart to the product some quality or character which the raw material did not possess, and which differentiates the product from the raw material. To constitute piracy of a copyright, it must be shown that the original has been either substantially copied or to be so imitated as to be a mere evasion of the copyright.

(10) THE true principle is that one is not at liberty to use or avail himself of the labour which the other has been at for the purpose of producing his work that is, in fact, merely to take away the result of another man’s labour or, in other words, his intellectual property. What is the precise amount of the knowledge, labour judgment or literacy skill or that which the author of any book or other compilation must bestow upon its composition in order to acquire copyright in it within the meaning of the act cannot be defined in precise terms. In every case it must depend largely on the special facts of the case and must in each case be very much a question of degree.

(11) THE word ‘original’ does not mean that the work must be the expression of original or inventive thought. The Act does not require that the expression must be in an original or noval from, but that the work must not be copied from another work-that it should originate from the author.

(12) SO, in S. K. Dutt v. Law Book Co. and others, AIR 1954 Allahabad 570, it was observed that an author of a law commentary cannot claim that once he quoted a passage in his. book from either a decided case or a standard work, then no one else has any right again to quote that passage; Otherwise the defence of common source can rever be available to any one. Infringement comes in only when it can be shown that some one has instead of utilising the available sources to originate his work, appropriated the labours of another by resorting to a slavish copy or mere colourable imitation thereof. The animus furandi, that is an intention to take from another for purposes of saving labour, is one of the important ingredients to be found against a person before the can be damnified. Where the book contained the same mistakes as the first work did not and that was possible, only if the earlier had been copied, even in such a case, it must be shown that there were large number of such passages at least such numbers as could eliminate the element of chance that always is there in such matters.

(13) IN N. T. Raghunathan and another v. All India Reporter Ltd. , AIR 1972 Bombay 48, it was said that where the defendant prepared head notes for his digest not from original judgment or any other source but only from the matter in plaintiffs notes and head notes, it prima facie amounted to piracy.

(14) IT, therefore, follows that the complainant must prima facie establish originality and the copying complained of must be substantial and should not be a mere chance occurrence. It should further be shown that the copying affects the fruits of his labour.

(15) R. Jain has submitted details to show the extent and amount of copying done by the accused which just cannot be brushed aside here and now as trivial. The petitioner have referred to the various cases and sources from which and not from the books of the complainant, the accused assert, they have copied. ‘ They also claim that they are lawyers and have been pioneers in the filed faving first come out with their work in 1970. The alleged copying if at all does not exceed more than 10 pages spread over the work of 959 pages of the petitioners while the work of the respondent (Part 1) covers only 696 pages.

(16) I have examined the alleged infringements in details in the complaint and compared them with the source material that is the cases, the journal and the departmental orders and it seems to me that the paragraphs complained of are not lifted there from but from the book of the respondent who has devoted labour and skill in preparing his book and can legitimately claim originality. Thus, a prima facie case has been made out against the petitioner which calls for trial. I am indeed, unable to say from the complaint and the material so far placed before the court, that there is no case or that the learned Magistrate has not applied his mind to the matter before him before making the impugned orders. Worders. What the extent of copying is and what amount of damage has been done to the complainant have got to be examined by the Magistrate in the first instance. At one time, I had thought of doing so here, but upon reflection, I think it would not be appropriate to make detailed comments at this stage by this court. The fact that the accused are lawyers of repute and have been pioneers in the field does not give them a right to infringement of the copyright of the complainant.

(17) THE respondent had also raised an objection that the revision petition is barred by time in some respect and unduly delayed is other because the orders challenged are of 29-10-1982 and of 15-1-1983 while the petition was filed on 15-3-1983. The petitioner have alleged that the copies of the orders were not made available to them as the learned Magistrate was refusing to give copies unless the petitioners appeared in person. In the alternative, they pray for condonation of delay. As far as the question of limitation and delay are concerned, it is not of much weight because the title of the petition shows that Section 482 Criminal Procedure Code. is also invoked and I have also proceeded on that basis. This objection is rejected.

(18) SO far as the orders of 29-10-1982 relating to summoning of the petitioners and to the seizure of the offending publication are concerned, I see no scope for interference as I see no illegality, irregularity, impropriety, abuse of process or injustice in them. As respects the order of appearance, the petitioners may make an application to the Magistrate, for exemption under Sections 205/317, Criminal Procedure Code.

(19) THE petition is dismissed. The parties shall appear before the learned Magistrate on 13-3-1984.

The post F.L. Berawalla and Anr. Vs. R.K. Jain and Ors appeared first on B&B Associates LLP.

PRADEEP NANDRAJOG, J.

1. The dispute in the present appeal is between the two sons of Late Sh.Mohinder Singh Verma.

2. The genealogy tree of family of Late Sh.Mohinder Singh Verma is as under:-

Late Sh. Mohinder Singh Verma (Original Plaintiff)
I

I
J.P.S. Verma
Son/Defendant No.1

I
Sehdav Verma
(Son)/Appellant I

I
Om Wati Verma Vikas
(Wife)/Defendant No.2

Verma
Son

3. Late Sh. Mohinder Singh Verma (hereinafter referred to as the “Deceased”) instituted a suit for declaration, permanent injunction and possession in the year 2007 against his son Mr.J.P.S.Verma and daughter- in-law (wife of his son J.P.S.Verma) in respect of ground floor of property bearing Municipal No.A-2/163, Safdarjung Enclave, New Delhi (hereinafter referred to as the “Suit Property”).

4. Needless to state, the deceased was the plaintiff and his son J.P.S. Verma and daughter-in-law Om Wati Verma were the defendants in the suit. Declaration sought was that registered Gift Deed dated June 10, 1997 executed by the plaintiff in favor of his daughter-in-law Om Wati i.e. defendant No.2 in respect of suit property be declared null and void. Permanent injunction sought was that the defendants be permanently restrained from claiming any right, title or interest in the suit property. In addition thereto, the plaintiff also sought possession of the suit property from the defendants.

5. In our decision we shall be referring to the parties by their nomenclature in the suit.

6. The case set up by the deceased plaintiff in the plaint filed by him has been broadly/succinctly noted by the Single Judge in the impugned judgment in following terms:-

“(i) that the plaintiff executed the Gift Deed aforesaid in favor of the defendant No.2 under the undue influence of the two defendants being his son and daughter-in-law;

(ii) that the Gift Deed was subject to the conditions (a) that the plaintiff shall be entitled, throughout his life, to live in the front drawing room on the ground floor; and, (b) that the said house shall be given to the defendants” son Mr.Vikas Verma after his marriage;

(iii) that the defendants had emotionally blackmailed the deceased plaintiffs into executing the Gift Deed by representing that they did not have any immovable property and that their status in life will rise in society if they became owners of the ground floor and the same will also facilitate them in marrying their daughter after a few years;

(iv) that the defendants had also promised that they will look after the plaintiff very well, taking care of all his needs including food, shelter, clothing etc.;

(v) that after the execution of the Gift Deed, the defendants initially treated the plaintiff nicely as they were doing prior to the execution of the Gift Deed “but after few months” they started ignoring the plaintiff; the treatment meted out by the defendants to the plaintiff worsened “within a few months” and the defendants stopped giving food though the plaintiff continued to live in the front drawing room of the ground floor, compelling the plaintiff to go for food to the first floor of the adjoining house of his another son;

(vi) that in the last week of September, 2003 the defendants also prevented the entry of the plaintiff to the ground floor; a complaint was lodged by the plaintiff with the local Police Station, but no action was taken thereon; the plaintiff then filed Writ Petition (Crl.) No.1188/2003 in this Court, vide order dated 10th September, 2004 wherein the local Police Station was directed to register a criminal case against the defendants; FIR No.488/2004 of offences under Section 341 read with Section 34 of IPC was registered against the defendants;

(vii) that the Gift Deed is nullity in the eyes of law because in pith and substance the said Gift Deed was made in favor of Mr.Vikas Verma but the same has not been accepted by him and without which acceptance the Gift Deed is null and void;

(viii) that the defendants have never acted upon the Gift Deed as the house continues to be mutated in the name of the plaintiff who has been paying House Tax thereon; the electricity and water connections of the house also continue to be in the name of the plaintiff who has been paying bills thereof;

(ix) that the Gift Deed was conditional with the plaintiff having the absolute right to use the front room throughout his life and the defendants giving the said ground floor to their son Mr. Vikas Verma after his marriage and is liable to be set aside on this ground also;

(x) that the defendants had committed breach of the conditions on which the Gift Deed was made and the Gift Deed is liable to be set aside on this ground also; and,

(xi) that the plaintiff had revoked the Gift Deed vide notice dated 1st June, 2007.” (Emphasis Supplied)

7. The defence set up by the defendants in the written statement filed by them has been broadly/succinctly noted by the Single Judge in the impugned judgment in following terms:-
“(a) that the suit was barred by time;

(b) no particulars of any fraud or undue influence has been pleaded; the representations alleged to have been made by the defendants to the plaintiff do not make out a case of undue influence or fraud;

(c) that the plaintiff executed the Gift Deed voluntarily and without any undue influence or fraud as is evident from Clause 4-A thereof as under:-

“4-A. With condition that Donor will reside in front (Drawing) room throughout his life and Donee will give the house to her son Vikas Verma after his marriage. written by the plaintiff in his own hand.

(d) that the suit had been filed at the instigation of another son of the plaintiff who is a Police Officer in the Delhi Police;

(e) that prior to the year 2004, the MCD having jurisdiction over the property had no policy for floor-wise mutation in respect of properties built on leasehold land;

(f) that the defendant no.2 had been paying the Property Tax with respect to the ground floor;

(g) that the plaintiff, in January, 1986 had executed a Will whereunder he had bequeathed the ground floor of the property to the defendant no.1 and the first floor to his other son and second floor to his wife; that after the death of the wife of the plaintiff, the plaintiff desired to in his lifetime only give the ground floor to the defendant no.1 and the first and second floors of the house to his other son; that since the defendant no.1 was also an allottee of a residential flat by DDA, the Gift Deed, the Gift Deed of the ground floor was executed in the name of the wife of the defendant no.1;

(h) that there were no differences between the plaintiff and the defendants till the year 2003 when the other son of the plaintiff instigated the plaintiff, so as to take the entire property;

(i) that the plaintiff in his complaint dated 27th September, 2003 to the Police against the defendants did not state that the defendants had got the Gift Deed executed fraudulently or exercising undue influence;

(j) denying that the defendants had treated the plaintiff shabbily;

(k) that the FIR lodged against the defendants was quashed by this Court vide order dated 12th December, 2007;

(l) denying that the gift was intended in favor of Mr. Vikas Verma;

(m) that the pleas taken in the plaint were barred by Section 92 of the Indian Evidence Act, 1872;

(n) that though the electricity and water meters of the ground floor remained in the name of the plaintiff but the charges thereof were being paid by the defendants;

(o) denying that the Gift Deed was conditional; and,

(p) that Mr. Vikas Verma son of the defendants was at that time still unmarried.”

8. In the replication filed, the deceased plaintiff essentially stating therein that FIR No.483/2004 got registered by the plaintiff against the defendants was quashed by this Hon”ble Court on account of a concession made by the plaintiff that the FIR in question be quashed, which concession was made by the plaintiff out of his concern for the defendants.

9. From the afore-noted conspectus of facts, it is apparent that the controversy in the present case revolves around the Gift Deed dated June 10, 1997 executed by the deceased plaintiff in favor of defendant No.2 and the same reads as under:-

“AND WHEREAS the above named Donee is the real daughter-in- law and is the wife of Shri J.P.S. Verma, the real son who is in blood relation of the Donor. AND WHEREAS DONOR AND DONEE ARE LIVING TOGETHER in the property in question since last about 20 years and the Donee has been serving the Donor as a Hindu devoted daughter-in-law.

AND WHEREAS the Donor out of natural love and affection for the above named Donee has already declared and made an Gift of the ground floor portion consisting of three rooms, one kitchen, two toilets, one bath room and two stores more fully shown and described in the site plan annexed with this deed.

AND WHEREAS the Donor has made the instant gift to Donee according to his own free and sweet Will and without any fraud, undue influence or threat/pressure from any corner of anybody who so ever.

NOW THIS DEED WITNESSES AS UNDER:-

1. That the Donor in consideration of his natural love and affection for the above named Donee has voluntarily and out of his own free will, without coercion, undue influence from anybody whatsoever do hereby gift, give, convey, transfer unto the above named Donee Mrs. Om Wati Verma wife of J.P.S. Verma, resident of A-2/163, Safdar Jang Enclave, (Ground Floor) New Delhi, ground floor portion morefully shown in the site plan annexed with this deed forming part of property no. A- 2/163, Safdar Jang Enclave, New Delhi measuring 125 sq. yards.

2. That the Donor has delivered the physical possession of above mentioned ground floor portion of property No. A-2/163, Safdar Jang Enclave, New Delhi to the Donee on the spot, the Donee hereby acknowledge having taken possession of the same from the Donor.

3. That the gift is absolute and irrevocable, the Donor shall have no right or title over the gifted property and ceased to have any right over the ground floor portion which he has gifted to Donee.

4. That the Donee shall be at liberty to enjoy this gifted property on her own will and to deal with the same independently. 4-A. With the condition that Donor will reside in front (Drawing) room throughout his life and Donee will give the house to her son Vikas Verma after his marriage.

5. That the Donor, his heirs, besides the Donee have left no claim, interest or title in the donated property to the Donee, and Donee has become the actual owner of the said donated property.

6. That the Donee shall get mutated the above mentioned donated property in the concerned Department on the basis of this Gift Deed in the name of Donee.

7. That all the costs of mutation and registration of the Gift Deed shall be borne and paid by the Donor.” (Emphasis Supplied)

10. During the pendency of suit, the plaintiff expired. Sehdav Verma, the other son of plaintiff, filed an application under Order XXII Rule 3 CPC praying therein that he i.e. Sehdav Verma be substituted in the place of plaintiff in the suit. Substitution was sought by Sehdav Verma on the basis that during his lifetime the plaintiff had executed the Will dated 25 June, 2007 bequeathing the suit property in his favor.

11. Vide order dated March 19, 2013 the Single Judge allowed the application under Order XXII Rule 3 CPC filed by Sehdav Verma and substituted Sehdav Verma in place of plaintiff in the suit without prejudice to the challenge set up by the defendants to the Will dated June 25, 2007 allegedly executed by the deceased.

12. The defendants had filed an application under Order VII Rule 11 CPC seeking rejection of plaint on the ground that suit is time-barred for the reason as per averments contained in the plaint the cause of action firstly accrued on September 27, 2003 when the defendants allegedly prevented the plaintiff from entering his room in the suit property but the suit was filed on July 04, 2007 i.e. more than three years after the expiry of accrual of cause of action.

13. Sehdav Singh (legal representative of plaintiff) filed an application under Order XII Rule 6 CPC seeking decree on admission essentially on the ground that the defendants have admitted in their written statement that their son Vikas Verma has not accepted the gift and as a result thereof Gift Deed dated June 10, 1997 is nullity in the eyes of law inasmuch as in pith and substance the said Gift Deed was made in favor of Mr.Vikas Verma.

14. Both the afore-noted applications (application under Order VII Rule 11 CPC filed by the defendants and application under Order XII Rule 6 CPC filed by the plaintiff) were listed before Single Judge on March 12, 2014, on which date following order was passed:-

“1. The deceased plaintiff had instituted the present suit pleading that though he had executed and got registered a Gift Deed dated 10th June, 1997 of the ground floor of property No.A-2/163, Safdarjung Enclave, New Delhi in favor of his daughter-in-law defendant No.2 but for declaration of the same as null and void pm the ground of the defendants having got the same executed from the deceased plaintiff by exercising undue influence, fraud and misrepresentation and also on the ground that the Gift Deed is a nullity because the gift in pith and substance was in favor of Mr. Vikas Verma being the son of the two defendants and who had not accepted the gift.

2. The plaintiff who had instituted the suit has since died and his another son was substituted in his place.

3. Arguments were commenced by the counsel for the plaintiff on the application of the defendants under Order VII Rule 11 of the Civil Procedure Code (CPC), 1908 and on the application of the plaintiff under Order XII Rule 6 CPC. The defendants are seeking rejection on the ground of the plaint being barred by time.

4. It has however being enquired from the counsel for the plaintiff as to what are the legal legs for the claim in the suit to stand on; on what basis, the deceased plaintiff having made the gift, is entitled to have the same cancelled on the ground of the defendants being in breach of clause 4A thereof which made the gift conditional upon the plaintiff”s right to reside in the front drawing room throughout his lifetime. It has further being enquired, as to how the right, even if any of the plaintiff to reside in the front drawing room of the said ground floor survives the plaintiff. Attention of the counsel for the plaintiff has also been drawn to Sections 10 and 11 of the Transfer of Property Act, 1882.

5. The counsel for the plaintiff seeks time to address on all the said aspects.

6. The counsel for the defendants to also come prepared on the same.

7. List on 21st March, 2014.

8. Test. Case No.29/2011 which is also listed along with this suit is separated and be listed as per the dates fixed therein.”

15. Vide impugned judgment and decree dated March 21, 2014 the learned Single Judge has dismissed the suit.

16. Briefly stated the reasons given by the learned Single Judge are as under:-

a) No case has been made out in the plaint that the Gift Deed dated June 10, 1997 was executed by the deceased plaintiff on account of fraud/undue influence being played/exercised by the defendants.

b) The plea of the deceased plaintiff that the consideration (reason) of execution of Gift Deed dated June 10, 1997 was the promise made by the defendants to look after the plaintiff and thus played a fraud as they i.e. the defendants had no intention of performing said promise is barred in view of the fact that no prescription is contained in the Gift Deed dated June 10, 1997 that the deceased plaintiff is gifting the suit property to defendant No.2 on the promise of defendant No.2 to look after the plaintiff and prescription contained in Section 92 of Evidence Act, 1872 that no evidence of any oral agreement or statement shall be admitted for the purpose of contradicting, varying, adding to, or subtracting from, its terms. Rather, from a reading of Gift Deed dated June 10, 1997 it appears that reason which led the plaintiff to gift the suit property to defendant No.2 was the past services rendered by defendant No.2 to the plaintiff.

c) There is no plea in the plaint of the defendants or any of them being in a position to dominate the will of the deceased plaintiff or having used that position to obtain an unfair advantage over the deceased plaintiff. Mere plea of undue influence, without pleading the ingredients thereof, is of no avail.

d) The case sought to be set up by the deceased plaintiff that the Gift Deed dated June 10, 1997 was executed by him on account of fraud/undue influence being played/exercised by the defendants is in any case barred by time in view of averments contained in the plaint that the deceased plaintiff “within a few months” of execution of Gift Deed dated June 10, 1997 became aware of the fraud/misrepresentation allegedly played/exercised by the defendants and provisions of Articles 58 and 59 of Schedule appended to Limitation Act, 1963. Article 58 provides for three years limitation period for a suit to obtain any declaration (not covered by Articles 56 and 57) to be reckoned from the date when the right to sue first accrues. Article 59 provides for three years limitation period for a suit to cancel or set aside an instrument or decree or for rescission of a contract to be reckoned from the date when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first becomes known to him.

e) Article 66 of the Schedule appended to Limitation Act, 1963 relied upon by the plaintiff has no application in the present case for the reason Article 66 applies to such suits where claim is based upon revocation of gift deed on ground of breach of condition of conditional gift, which is not the position in the instant case. The dictum of law laid down by Supreme Court in the decision reported as (2006) 5 SCC 353 Prem Singh vs. Birbal is that where a suit is filed for cancellation of a transaction on the ground of coercion, undue influence or fraud, Article 59 would apply.

f) The fact that the deceased plaintiff had written clause 4-A of the Gift Deed dated June 10, 1997 in his own handwriting negates the case sought to be made by the deceased plaintiff that the Gift Deed dated June 10, 1997 was executed by him on account of fraud/undue influence being played/exercised by the defendants.

g) Clause 4-A of the Gift Deed dated June 10, 1997 can by no stretch of imagination be read/interpreted to mean that in pith and substance the gift of suit property was in favor of Mr.Vikas Verma, son of defendants. In fact, had the gift been meant for Mr.Vikas Verma the occasion for stipulating in the Gift Deed that the defendant No.2 will give the suit property to Vikas Verma after his marriage would not have arisen.

h) Even if it were to be held that the gift in favor of defendant No.2 was conditional to the defendant No.2 giving the suit property to her son after his marriage, there had been no breach of the said condition on the dates of purported revocation of the gift or institution of the suit inasmuch as son of defendant No.2 was not married on said dates.

i) The condition contained in clause 4-A of the Gift Deed dated June 10, 1997 that defendant No.2 shall give the house to her son Vikas Verma after his marriage is of no avail to the plaintiff in view of prescription contained in Section 11 of Transfer of Property Act, 1882 that where on a transfer of property, an interest therein is created absolutely in favor of transferee, but the terms of the transfer direct that such interest shall be applied or enjoyed by the transferee in a particular manner, the transferee is entitled to receive and dispose of such interest as if there was no such direction.

j) Non mutation of the name of the transferee (defendant No.2) in the Municipal records for the purpose of House Tax cannot divest transferee (defendant No.2) of the title which otherwise stands transferred and vested in the transferee. It is settled position in law that mutation entries do not confer or divest a title. Likewise, payments of House Tax and electricity and water charges by the plaintiff in respect of suit property, if any, even after execution of Gift Deed are of no avail to the plaintiff for such payments do not confer or divest title. In this view of the matter, no useful purpose would be served in setting the suit on trial on the aspect of payments of House Tax and electricity and water charges by the deceased plaintiff in respect of the suit property even after execution of Gift Deed for the reason the same even if proved would not negate the gift. The Courts are not to mechanically set such suits to trial whose outcome is not dependent upon any factual adjudication.

k) Even if Clauses 2, 3 and 4 of the Gift Deed dated June 10, 1997 which prescribe that deceased plaintiff had delivered the physical possession of the suit property to defendant No.2 and that the defendant No.2 had accepted the same; gift made by the plaintiff is absolute and irrevocable and plaintiff is left with no right or title over the gifted property and defendant No.2 shall be at liberty to enjoy the gifted property and to deal with the same independently are held to be inconsistent/repugnant to clause 4-A of the deed prescribing that defendant No.2 shall reside in the front drawing room of the suit property throughout his lifetime they i.e. clauses 2, 3 and 4 shall prevail over clause 4-A in view of settled legal position that in the event of inconsistency between two clauses in a deed, earlier/first of the two inconsistent clause shall prevail. Alternatively, even if rule of harmonious construction were to be applied, the only inference/conclusion which would emerge is that the residence of Donor (deceased plaintiff) in the front drawing room of the suit property would be as licensee or with the permission of Donee (defendant No.2), with the Donee (defendant No.2) having jural and physical possession of the said front drawing room given to her under the Gift Deed and the Donor (deceased plaintiff) having merely a right of residence in lifetime therein. Such right of residence of the Donor (deceased plaintiff) in the suit property cannot be in negation of the essential requirement of delivery of possession of gifted property under Section 123 of Transfer of Property Act.

l) The argument advanced by the deceased plaintiff that Donor i.e. the deceased plaintiff had not delivered the possession of suit property to Donee i.e. defendant No.2 and thus gift of suit property made to defendant No.2 was incomplete is misconceived for the reason the delivery of possession of gifted property is not necessary to complete the gift of an immovable property.

m) None of the conditions/circumstances prescribed in Section 126 of Transfer of Property Act for suspension/revocation of a gift are fulfilled in the present case. It is neither the case of the deceased plaintiff that the Donor (deceased plaintiff) and Donee (defendant No.2) had agreed that on the happening of any specified event the Donor (deceased plaintiff) may revoke the gift nor any such term is found in the Gift Deed.

17. Aggrieved by the aforesaid, Sehdav Verma (legal representative of deceased plaintiff) has filed the present appeal under Section 96 of Code of Civil Procedure.

18. Arguing the appeal learned counsel for Sehdav Verma, appellant (legal representative of deceased plaintiff) made three broad submissions as under:-

A The gift of suit property by the deceased plaintiff to defendant No.2 was conditional. Clause 4-A of the Gift Deed dated June 10, 1997 categorically prescribes that the deceased plaintiff had gifted the suit property with the condition that “donor (deceased plaintiff) will reside in front (drawing) room throughout his life”. Admittedly, the defendants had prevented the deceased plaintiff from residing in the front (drawing) room in the suit property thereby committing breach of condition of gift and consequently the gift in question became ineffective and inoperative. In said regards, counsel placed reliance upon the decision of Supreme Court reported as (1997) 2 SCC 225 Narmadaben Maganlal Thakker vs. Prajivandas Maganlal Thakker & Ors.

B The prescription contained in clause 4-A of Gift Deed dated June 10, 1997 that “Donee (defendant No.2) will give the house to her son Vikas Verma after his marriage” clearly shows that in pith and substance the gift was made in favor of Mr.Vikas Verma, son of defendants. Admittedly, Mr.Vikas Verma who was married on September 23, 2009 never accepted the gift in question during the lifetime of Donor i.e. deceased plaintiff. A gift is completed upon execution of a registered gift deed, acceptance of the gift and delivery of property. Since Mr.Vikas Verma never accepted the gift in question during the lifetime of deceased plaintiff the same i.e. gift never got complete, particularly when the deceased plaintiff kept on paying the house tax and electricity and water charges in respect of the suit property during his lifetime.

C The suit filed by the deceased plaintiff was well within time in view of provisions of Article 66 appended to Schedule of Limitation Act, 1963. Article 66 prescribes limitation period of twelve years for suit of possession of immovable property when the plaintiff has become entitled to possession by reason of breach of a condition to be reckoned from the date when the condition is broken. In the instant case, the cause of action accrued on June 01, 2007 when the deceased plaintiff revoked the Gift Deed dated June 10, 1997 on account of breach of condition of Gift Deed by Donee i.e. defendant No.2. In said regards, counsel placed reliance upon the decision of Supreme Court reported as AIR 2001 SC 2340 Thakur Raghunath Ji Maharaj & Anr. vs. Ramesh Chandra.

19. Gift inter vivos is gratuitous transfer of ownership between two living persons and is transfer of property within the meaning of Section 5 of Transfer of Property Act, 1882. Section 122 of Transfer of Property Act, 1882 defines “Gift” as under”-

“122. “Gift” defined. – “Gift” is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.

Acceptance when to be made. – Such acceptance must be made during the lifetime of the donor and while he is still capable of giving.

If the donee dies before acceptance, the gift is void.”

20. The essentials of a valid Gift can be enumerated as under:-

a) There must be transfer of ownership – As in the case of a sale, there must be a transfer of all the rights in the property by the donor to the donee. However, it is permissible to make conditional gifts. The only restriction is that the condition must not be repugnant to any of the provisions of Sections 10 to 34 of Transfer of Property Act, 1882.

b) The ownership must relate to a property in existence – Gift must be made of existing movable or immovable property capable of being transferred. Future property cannot be transferred.

c) The transfer must be without consideration – The word “consideration” refers to monetary consideration and does not include natural love and affection.

d) The gift must have been made voluntary – The offer to make the gift must be voluntary. A gift therefore should be executed with free consent of the donor. This consent should be untainted by force, fraud or undue influence.

e) The donor must be a competent person – In a transaction by way of gift the transferor is called a donor and he divests his ownership in the property so as to vest it in the transferee, the donee. The donor must be a sui juris. He must have attained the age of majority, possess a sound mind and should not be otherwise disqualified.

f) The transferee must accept the gift – The gift must be accepted by the donee himself. Acceptance must be made during lifetime of the donor and while he is capable of giving.

21. Section 123 of Transfer of Property Act, 1882 dealing with making of a Gift reads as under:-
“123. Transfer how effected. – For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

For the purpose of making a gift of movable property, the transfer may be effected either by registered instrument signed as aforesaid or by delivery.

Such delivery may be made in the same way as goods sold may be delivered.”

22. Section 126 of Transfer of Property Act, 1882 dealing with suspension/revocation of a Gift reads as under:-
“126. When gift may be suspended or revoked – The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be.

A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.

Save as aforesaid, a gift cannot be revoked.

Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.”

23. The deceased plaintiff has admitted the execution of Gift Deed dated June 10, 1997 in respect of suit property in favor of defendant No.2. A meaningful reading of the plaint/written submissions filed by deceased plaintiff/appellant goes to show that essentially the deceased plaintiff sought to revoke the gift of suit property made by him in favor of defendant No.2 on following two counts:-

a) The gift deed dated June 10, 1997 was executed by the deceased plaintiff on account of fraud/undue influence being played/exercised by the defendants.

b) Defendant No.2 committed breach of condition of Gift Deed dated June 10, 1997 by preventing the deceased plaintiff from residing in the front (drawing) room of the suit property during his lifetime thereby entitling the deceased plaintiff (and his legal representative) to revoke the Gift Deed.

24. A gift may be revoked for coercion, fraud, misrepresentation, undue influence in the same way as a contract may be rescinded.

25. Section 17 of the Contract Act defines “Fraud” as an inducement by a party to the contract by making a suggestion as a fact which is not true or by active concealment of a fact or by making a promise without any intention of performing it or by any other act intended to deceive, to the other party.

26. Under Section 16 of the Contract Act to be said to be induced by “undue influence”, the relations subsisting between the parties are to be such that one of the parties was in a position to dominate the will of the other and uses that position to obtain an unfair advantage of the other.

27. Rules of pleadings stand crystallized under various rules of Order VI of Code of Civil Procedure. Rule 2 of Order VI reads as under:-
“2. Pleading to state material facts and not evidence – (1) Every pleading shall contain, and contain only, a statement in a concise form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved.

(2) Every pleading shall, when necessary, be divided into paragraphs, numbered consecutively, each allegations being, so far as is convenient, contained in a separate paragraph.

(3) Dates, sums and numbers shall be expressed in a pleading in figures as well as in words.”

28. Highlighting that the mandate of the Rule is that the pleadings must contain a statement in the concise form of the material facts on which the party pleading relies for its claim or defence, it needs however be noted that Rule 4 of the same Order further expands by requiring particulars to be given where necessary. Rule 4 of Order VI reads as under:-
“4. Particulars to be given where necessary – In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, willful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with date and items if necessary) shall be stated in the pleading.” (Emphasis Supplied)

29. In a leading pronouncement on the subject of pleadings, being the decision reported as 2011 (6) SCALE 677 Ramrameshwari Devi & Ors. vs. Nirmala Devi & Ors, highlighting how frivolous litigations are being instituted and how these frivolous litigations are choking the stream of justice, with reference to importance of pleadings, in sub-para A of para 52 of the decision, the Supreme Court observed as under:-

“A. Pleadings are foundation of the claims of parties. Civil litigation is largely based on documents. It is the bounden duty and obligation of the trial judge to carefully scrutinize, check and verify the pleadings and documents filed by the parties. This must be done immediately after suits are filed.”

30. In the decision reported as 1987 (2) SCC 555 Ram Sarup Gupta (Dead) by LRs vs. Bishun Narain Inter College & Ors, highlighting the object and purpose of pleadings, in para 6, the Supreme Court observed as under:-

“6. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should settle the essential material facts so that the other party may not be taken by surprise.”

31. With reference to the decisions reported as 1974 (6) BLR 368 Pandu Dhongi Yerudkar vs. Ananda Krishna Patil & Anr. and AIR 1982 Bom 491 M/s Nilesh Construction Company & Anr vs. Mrs. Gangubai & Ors, in the decision reported as AIR 1999 SC 1464 D.M. Deshpande & Ors vs. Janardhan Kashinath Kadam & Ors, in paras 9 and 11, the Supreme Court highlighted that a vague plea does not justify an issue being framed and further, where no material in support of a plea has been set up anywhere in any form, the Court would be justified in not settling an issue requiring the parties to traverse the torturous path of a trial. In said case, the Supreme Court observed qua claim for tenancy that in the absence of a concise statement of material facts relating to the tenancy, the mere raising of a plea of tenancy is not enough for the purpose of raising an issue. The Court cautioned against a pedantic approach to the problem and directed that Courts must ascertain the substance of the pleading and not the form, in order to determine the same. It was observed that pertaining to a claim of tenancy, the exact nature of the right which is claimed is to be set-forth and no issue pertaining to existence of tenancy could be framed on a vague plea.

32. In the decision reported as 2012 (6) SCALE 340 A. Shanmugam vs. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Sangam it was held as under:-
“27. The pleadings must set-forth sufficient factual details to the extent it reduces the ability to put forward a false or exaggerated claim or defence. The pleadings must inspire confidence and credibility. If false averments, evasive denials or false denials are introduced, then the Court must carefully look into it while deciding a case and insist that those who approach the Court must approach it with clean hands.”

33. In the decision reported as 2012 (5) SCC 370 Maria Margarida Sequeria Fernandes vs. Erasmo Jack de Sequeria the Supreme Court held as under:-
“72. The Court will examine the pleadings for specificity as also the supporting material for sufficiency and then pass appropriate orders.

74. If the pleadings do not give sufficient details, they will not raise an issue, and the Court can reject claim or pass decree on admission. On vague pleadings, no issue arises. Only when he so establishes, does the question of framing an issue arise. Framing of issues is an extremely important stage in a civil trial. Judges are expected to carefully examine the pleadings and documents before framing of issues in a given case.

78. The Court must ensure that the pleadings of a case must contain sufficient particulars. Insistence on details reduces the ability to put forward a non-existent or false claim or defence.” (Emphasis Supplied)

34. In the instant case, no particulars regarding (alleged) fraud/undue influence played/exercised by the defendants have been given in the plaint. The plaint is “conspicuously” silent regarding the nature of (alleged) fraud/undue influence played/exercised by the defendants. The plaint is silent as to what and when were the representations made by the defendants which led the deceased plaintiff to execute the Gift Deed dated June 10, 1997 and which were ultimately found to be false. Likewise, there is no averment in the plaint that the defendants or any of them were in a position to dominate the will of the deceased plaintiff and used that position to obtain an unfair advantage over the deceased plaintiff.

35. The plaint filed by the deceased plaintiff lacks in material particulars and it has to be held that the so-called pleadings relating to fraud/undue influence being played/exercised by the defendants are no pleadings in the eyes of law. From the afore-noted decisions, it can be safely culled out that a vague plea, sans the particulars thereof, would be no plea in the eyes of law and no issue can be settled between the parties regarding fraud/undue influence being played/exercised by the defendants.

36. This takes us to the question that assuming that the defendants committed breach of condition contained in clause 4-A of Gift Deed dated June 10, 1997 by preventing the deceased plaintiff to reside in the front (drawing) room of the suit property during his lifetime would that be sufficient to revoke the Gift Deed dated June 10, 1997.

37. In order to deal with the said question, let us revisit clause 4-A of Gift Deed dated June 10, 1997:-

“With the condition that Donor will reside in front (Drawing) room throughout his life and Donee will give the house to her son Vikas Verma after his marriage”

38. In the decision reported as AIR 1962 Ori 130 Tila Bewa vs. Mana Bewa the law relating to revocation of gift upon breach of condition of gift was succinctly stated in following terms:-

“The well settled legal position, based on authorities, is that a gift, subject to the condition that the donee should maintain the donor, cannot be revoked under Section 126 of the Transfer of Property Act for failure of the donee to maintain the donor, firstly for the reason that there is no agreement between the parties that the gift could be either suspended or revoked; and secondly, this should not depend on the will of the donor; again, the failure of the donee to maintain the donor as undertaken by her in the document is not a contingency which should defeat the gift; all that could be said is that the default of the donee in that behalf amounts to want of consideration; Section 126 thus provides against the revocation of a document of gift for failure of consideration; if the donee does not maintain the donor as agreed to by the donee, the latter (donor) could take proper steps to recover maintenance; it is not open to a settler to revoke a settlement at his will and pleasure and he has got to get it set aside in a court of law by putting forward such pleas as bear on the invalidity of a deed of gift. Under Section 122 the Transfer of Property Act, a gift is complete when it is accepted by or on behalf of the donee; where there is evidence that the gift of property by a person to his wife and children was accepted by the donees, the fact,–that the donor, who had no other property,–stayed on the property, even after the gift,–does not show that the gift had not taken effect; where no right in the property is reserved in the donor, the fact that there is a clause in the deed (as in the present case) that the donee should maintain the donor, does not show that the donor continued to be the beneficial owner; a direction in a gift deed that the donee should maintain the donor till his death will not make the gift a conditional one; if the terms of the gift deed were ,that there had been an absolute transfer of the property in favour of the donee, such a direction for maintenance shall be regarded only as an expression of pious wish on the part of the donor.

On the aspect of such pious wishes, the legal position is that where a gift deed, after the operative portion of the deed, provided that the donee was to render services to the donor and to meet the donor’s funeral expenses, such directions are only pious wishes and do not give any right to the donor to revoke the gift if the conditions are not observed; when, therefore, there is an out and out transfer, followed by a direction to the donee to maintain the donor, the latter direction is only a pious wish; on the other hand if the gift deed starts with a statement that it is made with the object of providing for maintenance of the donor, and this statement is followed by the operative clause,–there can be no doubt that the gift is subject ,to the liability to maintain the donor.

7. This leads me to the construction of the deed of gift, in the present case, in the light of the legal position as stated above. On a plain reading of the document, it is clear that the defendant donor makes a complete gift of the suit lands in the operative portion of the document, making the plaintiff full owner in possession from the date thereof “Aja dina tharu sampuma malik dakhalkar karai” (in vernacular); it is after making the plaintiff full owner, in respect of the suit lands, that the defendant expresses her pious wish later on in the document to the effect that the plaintiff would render to the defendant “Sebadharma and Bharan Poshan,” that is to say, to render to the defendant services and maintain her during her lifetime and she further expressed a wish that after her death the plaintiff would perform her funeral rites; then the document ends, by providing that the defendant or her heirs will not have. In any way any right to the suit lands and if they claim any right then on the strength of this document such claim will be invalid in law courts; the only condition attached to the gift as stated in the last sentence is that the plaintiff will not be able to sell or mortgage without the consent of her husband (plaintiff’s husband), and that the plaintiff will not alienate the suit lands by sale or mortgage etc. during the lifetime of the defendant, and that if she does so, it will be invalid; thus, reading the document as a whole, it is clear that it was an out and out gift, and that the directions as to her maintenance and Sebadharma are only pious wishes expressed by the defendant in the document.

9. In support of his proposition, that the deed of gift is revocable, the learned counsel for the defendant respondent relied on a decision of the Allahabad High Court in Balbhadar Singh v. Lakshmi Bai, holding that under Hindu Law if a person makes a gift to another in expectation that the donee will do more work in consideration of the gift, it follows that if the donee failed to do that which it has conditioned he should do, the gift is revocable. The learned counsel’s point is that in order that the defendant may get Sebadharma (services) from the plaintiff she (plaintiff) has to remain in the house; but the plaintiff having remarried, she cannot perform the Sebadharma of the defendant because the plaintiff has left the house of the defendant and remarried. In my opinion, this argument cannot stand, in view of the legal position as stated above. With regard to the decision, relied on by the learned counsel, it appears that the Allahabad High Court observed that it was arguable that in the. absence of an express power of revocation for failure of the condition the gift cannot be impugned or revoked. Therefore, the Allahabad decision,–which was decided on the particular facts of the case,–does not support the defendant’s contention. In the present case, as is clear from the document itself, there is no agreement that on failure on the part of the plaintiff to perform any of the conditions, namely, Sebadharma etc. the gift will be invalid. In other words, there must be a defeasance or default clause in order to make the gift revocable; if there was a condition that on failure to perform any of the conditions the gift will be void, then certainly the gift could have been revoked; the document “does not make any provision to that effect. Here, the defendant cancelled the gift,–as appears from the deed of cancellation,–in apprehension that the plaintiff might waste the property by transfer; it is not the defendant’s case that, by reason of the plaintiff’s having failed to perform her Sebadharma etc. that she revoked the deed of gift. (Emphasis Supplied)

39. The decision reported as AIR 2003 HP 107 Tokha vs. Smt. Biru & Ors is also an authority on the point of revocation of gift on breach of condition attached to gift. The relevant observations made in said decision are being noted herein under:-

“14. In Murikipudi Ankamma v. Tummalacheruvu Narasayya learned single Judge of Madras High Court held that in the absence of any express reservation of a power of revocation in the gift deed a donor does not continue to have the right to revoke a gift. For if a man will improvidently bind himself up by a voluntary deed, and not reserve a liberty to himself by a power of revocation, a Court will not loose the fetters he has put upon himself and without reservation of power to revoke, gift cannot be revoked under Section 126 of the Transfer of Property Act.

15. In Gandadhara Iyer v. Kulathu Iyer Sankara Iyer AIR 1952 TC 47, a Division Bench of the said Court held that when there is an out-and-out transfer by way of gift followed by a direction to the donee to maintain the donor the latter direction is only a pious wish. On the other hand, if the gift deed starts with a statement that it is made with the object of providing for the maintenance of the donor and this statement is followed by the operative clause, there can be no doubt that the gift is subject to the liability to maintain the donor. Thus, where after the operative portion of the gift deed other clauses providing for the expenses in connection with the donor’s funeral ceremonies and for the services expected from the donee are introduced, the directions will not give any right to the donor to revoke the gift if the conditions are not observed.

16. In M.Venkatasubbaiah v. M.Subbamma, AIR 1956 AP 195, learned single Judge held that a gift subject to the condition that the donee should maintain the donor cannot be revoked under Section 125 for failure of the donee to maintain the donor firstly for the reason that there is no agreement between the parties that the gift should be either suspended or revoked: and secondly this should not depend on the will of the donor. Again, the failure of the donee to maintain the donor as undertaken by him in the document is not a contingency which could defeat the gift. All that could be said is that the default of the donee in that behalf amounts to want of consideration. Section 126 itself provides against the revocation of a document of gift for failure of consideration. If the donee does not maintain the donor as agreed to by him, the latter could take proper steps to recover maintenance etc. It is not open to a settler to revoke a settlement at his will and pleasure and he has to get it set aside in a Court of law by putting forward such pleas as bear on the invalidity of gift deed. Similar view was taken by Judicial Commissioner of Himachal Pradesh in Smt. Gaurju v. Tara Chand AIR 1962 HP 4.

17. A learned single Judge of Orissa High Court in Tila Bewa v. Mana Bewa has also held that gift cannot be revoked for failure of donee to maintain donor under Sections 126 and 122 of the Transfer of Property Act as there was no agreement between the parties that the gift could be either suspended or revoked.

18. In Union Bank Ltd. v. Mst. Ram Rati (Lucknow Bench), learned single Judge has held that a gift would be a valid gift if the gift has been accepted even though the document may not have been registered at the time of the execution of the document and it cannot be revoked subsequently, if the document has been registered. Further it is said that a completed gift takes effect from the date of the execution and not from the date of registration.

19. A Division Bench of this Court in Smt. Shakuntla Devi v. Smt. Amar Devi AIR 1985 HP 109, has held that if the gift not based on fraud, undue influence or misrepresentation its cancellation is not valid under Section 126 of the Transfer of Property Act.

20. In Vannathi Valappil Janaki v. Puthiya Purayil Paru a learned single Judge of Kerala High Court has held that when a gift of immovable property has been accepted by the donees and they are in possession of the property the fact that after making the gift the donors felt that it was a folly or imprudence or want of foresight on their part to have executed the deed of gift will not clothe them with power of revocation of the gift under Sections 126 and 122 of the Transfer of Property Act.

21. A learned single Judge of this Court in Mool Raj v. Jamna Devi AIR 1995 HP 117, has held that when no specific condition of revocation has been made in the deed itself, in the event of failure of the donee to render services to the donor or maintain the donor the gift cannot be revoked under Section 126 of the Transfer of Property Act.

22. In the case in hand there is no specific condition either for giving maintenance or for revoking of the gift deed in case services are stopped to be rendered by the donee. Anyway, the fact remains, as has been stated in the deed of gift that the gift was in lieu of services meaning thereby that the donee had to render services to the donor-plaintiff but in the absence of any specific condition in the event of failure of the donee to render services, the gift could not be revoked. Thus, the deed of gift Ext. D-1 if considered as an outcome of general law cannot be said to be revocable one when no specific condition for its revocation has been made in the deed Itself in the event of failure of the donee to provide services to the donor or maintain the donor, the gift cannot be revoked.” (Emphasis Supplied)

40. To put it pithily, the position regarding revocation of gift upon breach of condition of gift is this: “there must be a defeasance or default clause in order to make the gift revocable; if there was a condition that on failure to perform any of the conditions the gift will be void, then certainly the gift could have been revoked; but the gift could not be revoked where the document does not make any provision to that effect.

41. In the instant case, there is no specific condition/stipulation in the Gift Deed dated June 10, 1997 that the gift would be revoked in case the deceased plaintiff does not reside in the front (drawing) room of the suit property. In the absence of such specific condition in the Gift Deed dated June 10, 1997, the Gift made by the deceased plaintiff of the suit property in favor of defendant No.2 cannot be revoked on the ground of (alleged) failure of the defendants to allow the deceased plaintiff to reside in the front (drawing) room of the suit property in view of legal position stated above.

42. The submission advanced by the counsel for appellant that in pith and substance the gift in question was made by the deceased in favor of Mr.Vikas Verma, son of the defendants, is wholly misplaced and in teeth of introductory portion of Gift Deed dated June 10, 1997. Further, the prescriptions contained in Gift Deed dated June 10, 1997 that “Donor (deceased plaintiff) out of natural love and affection for the above named Donee (defendant No.2) has already declared and made an Gift” and “Donee has been serving the Donor as a Hindu devoted daughter-in-law” leaves no manner of any doubt that the deceased plaintiff had made the gift in question in favor of defendant No.2.

43. As regards the submission that defendant No.2 did not give suit property to her son Mr.Vikas Verma after his marriage thereby breaching an (essential) condition of Gift, suffice would it be to note provisions of Section 11 of Transfer of Property Act, 1882 which reads as under:-

“11. Restriction repugnant to interest created – Where, on a transfer of property, an interest therein is created absolutely in favor of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose off such interest as if there were no such direction.

Where any such direction has been made in respect of one piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.”

44. The condition contained in the Gift Deed dated June 10, 1997 that defendant No.2 shall give the suit property to her son Mr.Vikas Verma after his marriage clearly restricts the interest/enjoyment in/of suit property of/by defendant No.2 and in no way can be construed for purpose of securing beneficial enjoyment of another immovable property, the same i.e. condition that defendant No.2 shall give the suit property to her son Mr.Vikas Verma after his marriage is undoubtedly void and inoperative in view of prescription contained in Section 11 of Transfer of Property Act, 1882 and settled legal position that provisions relating to “Gifts” contained in Transfer of Property Act, 1882 are subject to provisions of Chapter II of the Act including Section 11 thereof.

45. The decision of Supreme Court in Naramadaben”s case (supra) relied upon by the counsel for appellant is clearly distinguishable and not applicable in the facts of present case. In Naramadaben”s case (supra) after examining the factual backdrop the Supreme Court concluded that “gift did not become complete during the life time of the donor and thus had become ineffective and inoperative.” In the instant case, the gift had become complete during the lifetime of donor i.e. the deceased plaintiff.

46. We note that an argument was advanced on behalf of appellant before the Single Judge that gift in question was not complete in the instant case as the deceased had not delivered the possession of the suit property to the defendant No.2 at/after the time of making the gift. In this regards, suffice would it be to note the dictum of law laid down by three- Judge Bench of Supreme Court in the decision reported as (2014) 9 SCC 445 Renikuntla Rajamma vs. K. Sarwanamma that delivery of possession of gifted property is not an essential requirement for making a valid gift of the immovable property.

47. The upshot of the above discussion is that even if the case set up by the deceased plaintiff is assumed to be true in its entirety, the deceased plaintiff (and his legal representative) would not be entitled to revoke the Gift Deed dated June 10, 1997 made by him in respect of suit property in favor of defendant No.2.

48. In these circumstances, the learned Single Judge has rightly nipped the suit instituted by the deceased plaintiff at bud and not setting it for trial.

49. In view of above discussion, the present appeal is devoid of any merit and thus dismissed.

(PRADEEP NANDRAJOG) JUDGE

SEPTEMBER 02, 2015
mamta

(MUKTA GUPTA) JUDGE

The post Sehdev Singh Verma vs J P S Verma & Anr. appeared first on B&B Associates LLP.

VIPIN SANGHI, J.
1. The petitioner has preferred this present writ petition to assail the order dated 31.12.2018 passed by the Debt Recovery Appellate Tribunal (hereinafter referred to as the DRAT), New Delhi in Appeal No. 459 of 2016, titled „Ms. Sujata Kapoor v Union Bank of India & Ors.‟.
2. Arguments were initially heard and judgment reserved on 02.04.2019. The judgment could not be pronounced earlier. Accordingly, the matter was fixed for directions on 06.12.2019. On that day, counsel for the petitioner appeared and it was adjourned to 11.12.2019 to enable him to recapitulate his submission, which he did. Consequently, the judgment was reserved.
3. The mainstay of the submissions of learned counsel for the petitioner– to ward off the attachment and sale of the property bearing No. 3, Racquet Court Road, Civil Lines, Delhi (hereinafter referred to as the „said property‟), is the protection afforded to a Judgment Debtor/ Certificate Debtor by Section 60(1)(ccc) of the Code of Civil Procedure, 1908 (the Code) as applicable to Delhi. Thus, the scope and interpretation of the said provision arises for consideration before us. Before we proceed, we may take note of a few admitted facts, and facts emerging from the record. We may observe that the petitioner has selectively filed documents before us. The petitioner has not disputed the factual position as recorded in, and emerging from the orders passed by the Recovery Officer (R.O.), the Debt Recovery Tribunal (DRT) and the DRAT. We have, therefore, proceeded to consider the matter in the light of facts found in the orders passed by the said Authorities/ Tribunals.
4. Late Sh. B.R. Dougall (BRD in short) [described as respondent No.4 in the present writ petition], undisputedly, was the owner of the said property having acquired the same on his own. M/s Atul Food Products Limited obtained a loan from the respondent Union Bank of India (UBI for short). Amongst others, BRD offered his personal guarantee to secure the said loan. Since the loan was not serviced and repaid in time, the UBI initiated recovery proceedings vide O.A. No.653/2000 before the DRT-II, Delhi under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the Act for short). The DRT by an ex-parte order allowed the Original Application on 10.01.2002 against the principal borrower/ debtor M/s Atul Food Products Limited (CD-1) and, inter alia, BRD (CD-3). Consequently, a recovery certificate was issued on 17.01.2002 for an amount of Rs.1,07,40,894/- with pendente lite and future interest @ 17.25% per annum with quarterly rests w.e.f. 06.12.2000 till realization, and costs of Rs.1,50,500/-. Upon service of the recovery certificate on the certificate debtors (CDs), including BRD (CD-3) in March 2002, BRD (CD-3) filed his affidavits dated 24.08.2004 and 28.09.2004 (vide Diary No.3060), wherein he stated that he, inter alia, owns the said property as his self acquired property. It appears that on 24.08.2004, the CDs, including BRD (CD-3), were restrained from creating any third party interest whatsoever to the detriment of the UBI in the immovable assets owned by the said CDs.
5. The aspect of recovery of the amounts found due by the DRT upon adjudication of the Original Application is dealt with in Section 29 of the Act, which provides that the provisions of the Second and Third Schedules to the Income Tax Act, 1961 (I.T. Act) and the Income Tax (Certificate Proceedings) Rules, 1962 (the „Rules‟ for short) as in force from time to time shall, as far as possible, apply with necessary modifications, as if the said provisions and the Rules refer to the amount of debt due under the Act, instead of to Income-Tax. Thus, by virtue of Section 29, the provisions of the Second and the Third Schedules to the I.T Act get attracted in respect of recovery of the amount of debt due and recoverable under the Act. Reference to the expression “assessee” in the said Schedules to the I.T. Act, is liable to be construed as reference to the “defendant” under the Act while applying the provisions of the Second and Third Schedules to the I.T. Act and the Income Tax (Certificate Proceedings) Rules, 1962.
6. Rule 2 contained in the Second Schedule to the I.T. Act reads as follows:
“2. When a certificate has been drawn up by the Tax Recovery officer for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule”.
7. From the record, it appears that the certificate – which means the certificate drawn up by the Recovery Officer in respect of the defendant under the Act, was duly drawn up and served, inter alia, on BRD (CD-3) in March, 2002.
8. Rule 4 of the Second Schedule provides for mode of recovery. The same, inter alia, provides that if the amount mentioned in the notice is not paid within the time specified in the notice referable to Rule 2, the Recovery Officer shall proceed to realize the amount, inter alia, by attachment and sale of the defaulter‟s immovable property. Rule 5 of the Second Schedule provides for recovery of interest, costs and charges as well. These Rules read as follows:
“4. If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes :—
(a) by attachment and sale of the defaulter‘s movable property;
(b) by attachment and sale of the defaulter‘s immovable property;
(c) by arrest of the defaulter and his detention in prison;
(d) by appointing a receiver for the management of the defaulter‘s movable and immovable properties.
5. There shall be recoverable, in the proceedings in execution of every certificate,—
(a ) such interest upon the amount of tax or penalty or other sum to which the certificate relates as is payable in accordance with sub-section (2) of section 220, and
(b) all charges incurred in respect of—
(i) the service of notice upon the defaulter to pay the arrears, and of warrants and other processes, and
(ii) all other proceedings taken for realising the arrears.” (emphasis supplied)
9. Thus, the defaulter‟s immovable property could be sold to realize the amount due under the Recovery certificate. Rule 11 empowers the Recovery Officer to deal with any claim or objection made to the attachment or sale of property in execution of a certificate, and the same reads as follows:
“11. (1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection :
Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed”
10. Rule 16 of the Second Schedule provides that where a notice has been served on a defaulter under Rule 2, the defaulter or his representative-in- interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him, except with the permission of the Recovery Officer, nor shall any Civil Court issue any process against such property in execution of a decree for the payment of money. The text of the said Rule is as follows:
“16(1) Where a notice has been served on a defaulter under rule 2, the defaulter or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Tax Recovery Officer, nor shall any civil court issue any process against such property in execution of a decree for the payment of money.
(2). Where an attachment has been made under this Schedule, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment.” (emphasis supplied)
11. Rule 48 provides for attachment of immovable property of the defaulter. The same reads as follows:
“48. Attachment of the immovable property of the defaulter shall be made by an order prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge.”
12. Rule 51 provides that where any immovable property is attached under the Second Schedule, the attachment shall relate back to and take effect from the date on which the notice to pay the arrears (amount due under the Recovery Certificate) issued under the Second Schedule was served upon the defaulter. The said Rule reads as follows:
“51. Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Schedule, was served upon the defaulter.” (emphasis supplied)
13. It appears that the Authorities/ Tribunals proceeded on the basis that attachment was directed by the R.O. under Rule 48 on 18.04.2011, and on 26.05.2011. Consequently, the sale proclamation was settled on 26.08.2011. By virtue of Rule 51, the attachment of the said property of BRD (CD-3) related back to March 2002, when he was served with the certificate under Rule 2.
14. At that stage, the petitioner made her appearance by preferring objections under Section 25 of the Act read with Rule 11 of the Second Schedule to the I.T Act to the order of attachment and notice for settling the terms of sale proclamation in respect of the said property.
15. The petitioner placed heavy reliance on Rule 10, which reads as follows:
“10. (1) All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), exempted from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule.
(2) The Tax Recovery Officer‘s decision as to what property is so entitled to exemption shall be conclusive.” (emphasis supplied)
16. According to the petitioner, the said property was exempted from attachment and sale in execution of a decree by a Civil Court, on the ground that the said property was the only residential house of BRD (CD-3), and continues to be the only residential property of the petitioner even now. For this purpose, reliance was placed on Section 60(1), proviso (ccc) of the Code, as applicable to Delhi.
17. The prayers sought by the petitioner in the said objections, filed on or about 12.09.2011, read as follows:
“i) The objections/claim of the Objector may kindly be allowed and the attachment of the property bearing No.3, Racquet Court Road, Civil Lines, Delhi, made vide Order dated 18.04.2011, 26.05.2011 or any other order of this Hon‘ble Tribunal may kindly be set aside/withdrawn/discharged consequently notice dated 26.08.2011 for settling sale proclamation of the property bearing No.3, Racquet Court Road, Civil Lines, Delhi, may also be recalled/discharged/set aside.
ii) Meanwhile, till the disposal of present objection/claim filed by objector, the further proceedings qua property bearing No.3, Racquet Court Road, Civil Lines, Delhi may kindly be stayed.”
18. The petitioner claimed that she was a bona fide purchaser without notice for valuable consideration of the said property from the erstwhile owner, namely BRD (CD-3) vide sale deed dated 29.11.2006. She claimed that BRD (CD-3) had mortgaged the said property with the Indian Overseas Bank (IOB) in respect of the loan obtained by his son Vivek Dougall in the name of his sole proprietary firm M/s Vinayak International Inc. sometime in 1993. She claimed that IOB had instituted O.A. No.15/2002 against Vivek Dougall and BRD in his capacity as surety/ guarantor before the DRT. IOB had made an offer for One-Time Settlement of the outstanding dues for Rs.2,09,18,000/- on 16.09.2006. She claimed that her father and brother had offered to buy the said property in her name for Rs.2,11,90,000/.
19. The IOB had agreed to the said sale. Consequently, the said property was purchased in the name of the petitioner vide sale deed dated 29.11.2006. She claimed that she had also got mutated the said property in her name in the records of the MCD in 2007, and she had been paying the property tax thereafter. BRD (CD-3) passed away on 28.02.2009.
20. She argued that BRD (CD-3) had created the equitable mortgage in favour of the IOB on 27.01.1994, i.e. much prior to issuance of the recovery certificate in favour of the UBI on 17.01.2002. Thus, the sale of the said property in favour of the petitioner/ objector was not a fraudulent sale to defeat the interest of any creditor.
21. She also claimed that the said property, in any event, could not be attached and sold to recover the amount due to UBI, since it was exempted under Rule 10 of the Second Schedule read with Section 60(1)(ccc) of the Code, since BRD (CD-3) did not have any other residential property apart from the said property, and even she does not have any other property apart from the said property after her purchase on 29.11.2006. She raised several other objections with which we are presently not concerned, since they have been rejected by the authorities below and have not been urged before us.
22. The respondent UBI filed their reply to the objections, inter alia, stating that the transfer of the said property in favour of the petitioner vide sale deed dated 29.11.2006 was null & void, since the same was in contravention of Rule 2, read with Rule 16 of the Second Schedule to the I.T Act, as well as in contravention to the attachment made, inter alia, vide order dated 25.08.2011 passed by the Recovery Officer under Rule 48 of the Second Schedule to the Income Tax Act. The UBI referred to the affidavit filed by BRD (CD-3) vide Diary No.3060 dated 28.09.2004, wherein he had stated that he was possessing the said property as his self-acquired property. It also stated that on the date when the demand notice was served, inter alia, on BRD (CD-3), the said property was in possession of BRD (CD-3) and he could not have parted with its possession, or alienated the same. The bona fides of the petitioner were also challenged, since she claimed transfer of the said property in her favour on 29.11.2006 from her father-in-law BRD (CD- 3), while, at the same time, stating that she had estranged relationship with her husband Vivek Dougall. The stand taken by the petitioner that she had no knowledge of the outstanding liability owed to UBI was also disputed and challenged on the ground that she was the family member of BRD (CD-3) and Vivek Dougall. The UBI contended that the transfer of the said property in favour of the petitioner was also hit by Section 52 of the Transfer of Property Act.
23. The Recovery Officer rejected the objections preferred by the petitioner vide order dated 13.05.2016. He took note of the fact that as per the record, the demand notice dated 15.03.2002 was issued to the certificate debtor‟s – including BRD (CD-3), and all the CDs were served at their recorded addresses in March 2002. BRD (CD-3) appeared, for the first time, before the Recovery Officer on 11.10.2002 through counsel and he appeared in person on 16.12.2002. He filed his affidavit of assets on 24.08.2004, which disclosed the said property as his self-occupied property. On the same day, i.e. 24.08.2004, the CDs, including BRD (CD-3) were restrained from creating third party interest whatsoever to the detriment of the CH Bank UBI in the immovable assets which was a part of the record. BRD (CD-3) filed an additional affidavit vide Diary No.3060 dated 29.09.2004, wherein he again disclosed that he was the owner of the said property, which was self-occupied by him. The Recovery Officer notes that on the date of service of demand notice/ certificate dated 15.03.2002, as also on the date of the restraint order dated 24.08.2004, BRD (CD-3) was the owner in possession of the said property. He sought to execute the sale deed qua the said property in favour of the petitioner/ objector on 29.11.2006. The Recovery Officer rejected the contention of the petitioner/ objector that the sale of the property in her favour was not a private sale. He drew reference to Rule 2 and 16 of the Second Schedule to the I.T Act. He observed:
“Therefore, by virtue of the operation of Rules 2 and 16 of Second Schedule of Income Tax Act read with Section 25 and 28 of the RDDBFI Act and in view of the specific restraint order dated 24.08.2004 passed by the then Ld. recovery Officer, CD#3 was barred from creating any third party interest in relation to any of his movable/immovable estates, including property in question, from March 2002 onwards, after service of demand notice in the present R.C. The Transfer of the property in question by CD#3 in favour of the objector by Sale Deed registered on 29.11.2006 is hit by Rule 16 of the Second Schedule of Income Tax Act, 1961 and on this ground alone, the present objection application is liable to be dismissed.” (emphasis supplied)
24. The petitioner had sought to place reliance on an earlier order dated 22.02.2007 passed by the Recovery Officer – to claim that attachment of the said property had been declined on the said date, since the same was the only residential property of BRD (CD-3). This submission was also rejected by the Recovery Officer in paragraph 9.3 of his order. The petitioner‟s submission premised on Section 64 CPC read with Order XXXVIII Rule 10 CPC was also rejected by the learned Recovery Officer in paragraph 9.4 of his order.
25. The petitioner then preferred an appeal under Section 30 of the Act before the DRT, being Appeal No.39/2016. The DRT rejected the same vide order dated 21.09.2016. In her appeal, the petitioner claimed that she was a victim of fraud. She claimed that the order of attachment of the said property, and the notice to settle the terms of proclamation, are contrary to law. She claimed that the sale in her favour was to redeem the mortgage in favour of the IOB by BRD (CD-3), and that she was a bona fide purchaser without notice for valuable consideration. She claimed that the property had been sold to her prior to its attachment. She placed reliance on Hamda Ammal Vs. Avadiappa Pathar & 3 Others, (1991) 1 SCC 715. The respondent UBI defended the order passed by the learned Recovery Officer. The DRT dismissed the appeal of the petitioner on 21.09.2016. It rejected the petitioner‟s reliance on Hamda Ammal (supra), since the demand notice in the present case had been issued on 15.03.2002; BRD (CD-3) was served with the same in March, 2002; BRD (CD-3) had appeared before the Recovery Officer of the DRT through counsel on 11.10.2002 and in person on 16.12.2002, and also filed his affidavits disclosing his assets – including the said property as his self-acquired property of which he was in possession on 24.08.2004; he had filed an additional affidavit on 29.09.2004 also to the same effect; the attachment – by virtue of Rule 51 of the Second Schedule of the I.T Act related back to the date of service of notice under Rule 2, and; therefore, the attachment made in 2011 related back to the year 2002. Transfer of the said property by BRD (CD-3) in the year 2006 was in the teeth of Rule 16 of the Second Schedule to the Income Tax Act.
26. The petitioner preferred a further appeal before the DRAT, which has been dismissed by the impugned order.
27. The learned DRAT after referring to the decisions in Gangadhar Vishwanath Ranade Vs. Income – Tax Officer, 1989 177 ITR 163 Bom, and The Tax Recovery Office II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (dead) through Mrs. Shobha Ravindra Nemiwant, AIR 1999 SC 427, inter alia, observed: “…. upon receipt of a Recovery Certificate from the Presiding Officer of DRT, the Recovery Officer is expected to serve upon the certificate – debtors a demand notice as provided under Rule 2, requiring them to make payment within a period of 15 days.
In case of default in payment by the CDs, the CH Bank can request the Recovery Officer to attach any movable or immovable assets of the CDs and in case of attachment order is passed and some third party feels aggrieved by that attachment, he or she can file objections before the Recovery Officer under Rule 11 and if upon investigation of the claim of the objector the Recovery Officer finds that on the date of service of demand notice under Rule 2, the property attached was in occupation of the CD in his or her own right, the attachment will not be lifted and the sale, if conducted, will not be set aside. Further, in case the objector is able to show that on the date of service of demand notice under Rule 2 he or she was in possession in his or her own right and his or her possession was not on behalf of CD, then the Recovery Officer will lift the attachment or set aside the sale.”
28. The learned DRAT proceeded to examine the facts of the case in the aforesaid light and observed: “In the present case, undisputedly, demand notice under Rule 2 of the Rules was served upon the deceased CD Mr. B.R. Dougall in March 2002. At that time, he undisputedly was in possession of the property in question in his own right as its owner and not on behalf of any third party including the present appellant – objector. Therefore, the appellant – objector being not in possession of the property in question on the date of service of demand notice under Rule 2 upon the deceased CD, she could not have asked for lifting of the attachment order passed by the Recovery Officer in April 2011 despite the fact that she claims to have purchased the property in question from the CD Mr. B.R. Dougall in the year 2006. The crucial date is the date when the concerned CD is served with a demand notice as provided under Rule 2, which admittedly in the present case was served in March, 2002, and not the date of attachment. Therefore, even if it is accepted that the appellant – objector was in possession of the property in question in April, 2011 when the learned Recovery Officer had attached the property which she was claiming to be her matrimonial home also that possession and even the sale deed allegedly executed in her favour by her father – in – law before that attachment order of the Recovery Officer will not confer any interest upon her for the purpose of getting an order of withdrawal of attachment under Rule 11”.
29. The learned DRAT rejected the submission of the petitioner that the sale executed by BRD (CD-3) in her favour of the said property was to redeem the mortgage with the IOB and, therefore, the prohibition against the sale of any property belonging to the CD by him after he has been served with a demand notice under Rule 2 of the Second Schedule is not attracted, by observing “However, I do not find any substance in the above argument of Mr. D.K. Malhotra. In the present case Rule 2 notice stood served upon the deceased Mr. Dougall in March, 2002 and thereafter on 18th November, 2006 the Indian Overseas Bank had released the property in dispute from its charge after it had been paid its full dues by late Mr. B.R. Dougall as per the settlement between the Bank and the borrower Firm through its proprietor, who is his son. The property in question then became free from the charge of the mortgagee Bank but since Rule 2 demand notice had already stood served upon Mr. Dougall in March, 2002 he was not competent to execute the sale deed in favour of his daughter-in-law and for that matter in favour of anybody in view of the prohibition contained in Rule 16(1)(which Rule has been extracted by the DRT in its impugned order). In the grounds of appeal it has been pleaded that the deceased Mr. Dougall had in fact redeemed his property. If that was so it becomes all the more a more strong reason to reject the story cooked by the appellant because redemption could be by the mortgagor with his own money may be mustered by taking money from the in-laws of his son, as is the case of the appellant. ”
30. The learned DRAT observed that the sale in favour of the petitioner had been executed by BRD (CD-3) after the mortgage had been redeemed by making payment to IOB, so the sale transaction between BRD (CD-3), the father-in-law and the petitioner daughter-in-law could not be said to have been entered into by a mortgager in order to discharge pre-existing contractual liability towards the mortgagee Bank. The learned DRAT also noticed the fact that a private sale was made between the father-in-law and the daughter-in-law, who claimed that she had estranged relations with her husband and her in-laws.
31. We may observe that on behalf of the petitioner, no submission has been advanced on the findings returned by the learned Recovery Officer; the learned DRT, and the learned DRAT. Even otherwise, it is clearly evident from the facts of the case that BRD (CD-3) had been served with the demand notice under Rule 2 of the Second Schedule in March, 2002. He appeared, firstly, through his counsel and thereafter in person before the Recovery Officer on 11.10.2002 and 16.12.2002. He had filed his affidavit of assets on 24.08.2004, which disclosed the said property as his self acquired property. On the same day, he had been restrained from creating third party interest whatsoever to the detriment of the C.H. Bank, UBI, in the immovable assets which were part of the record. The said property was also a part of the record of the Recovery Officer, since the same was disclosed by BRD (CD-3) as his personal assets in his occupation in his affidavit dated 24.08.2004. He had filed an additional affidavit on 29.09.2004 to the same effect. We may observe that, though the Authorities/ Tribunals below have proceeded on the basis that orders for attachment were passed on 18.04.2011 and 26.05.2011, to us, it appears that the attachment orders were issued in respect of the said property, firstly, on 24.08.2004 – when the C.D.s, including CD-3 (BRD) was restrained from creating any third party interest whatsoever, to the detriment of the CH-UBI. We state so, since the manner of attachment of immovable property of the defaulter under Rule 48 of the Second Schedule is made “by an order, inter alia, prohibiting the defaulter (which CD-3/ BRD was) from transferring or charging the property in any way … …”. However, even if the attachment of the said property is taken to have been ordered on 18.04.2011 and 26.05.2011, it makes no difference, since the same relates back to, and takes effect from the date on which the notice to pay the arrears, issued under the Schedule, was served upon the defaulter (See Rule 51). In this case, the notice to pay the arrears was served on the defaulter/ CD-3/ BRD in March 2002. Thus, the attachment related back to March, 2002.
32. Undisputedly, as on 24.08.2004, there was a binding restraint order against BRD (CD-3) from creating any third party interest in respect of the said property. BRD (CD-3) could not have transferred the said property to the third party, including to the petitioner without permission of the Recovery Officer, not only by virtue of Rule 2 read with Rule 16 of the Second Schedule to the IT Act, but also in the light of the express restraint order passed against him on 24.08.2004. Pertinently, the said property was not sold to the petitioner in execution of the recovery certificate obtained by IOB. It was not a sale “made in pursuance of any contract for such transfer or delivery entered into and registered before the attachment”. The said sale was a private sale, and merely because the IOB did not object to the said sale (because their One Time Settlement Offer was honoured), it does not mean that the sale of the said property by BRD (CD-3) in favour of the petitioner attains legality or legitimacy. It was a sale made in complete breach of Rule 16 read with Rule 51 of the second schedule to the Income Tax Act. It was in complete defiance of, and in violation of the order dated 24.08.2004 passed by the Recovery Officer. It was not saved by Section 64
(2) of the code, since it was not made in pursuance of an agreement made prior to the attachment of the said property under Rule 16 read with Rule 51 of the Rules. The attachment related back to March, 2002, whereas the sale took place in 2006. Consequently, the petitioner cannot claim a legitimate, much less better title to the said property than BRD/CD-3. Her claim of being a bonafide purchaser without notice for valuable consideration has not been accepted by the DRAT, and for good reasons. The same does not insulate her from the action that the CH Bank-UBI may take to recover their dues under the Recovery Certificate by going after the said property of CD- 3/BRD. If the petitioner claims that she has been defrauded by BRD, it is for her to sue the estate of BRD. We also find that the Recovery Officer, the Tribunal and the DRAT rightly rejected the reliance placed by the petitioner on Hamda Ammal (supra), keeping in view the facts of the present case. We, therefore, do not find any reason to interfere with the impugned order on any aspect raised before the DRAT and decided by it.
33. A perusal of the impugned order shows that the petitioner actually did not even urge before the learned DRAT the issue raised by learned counsel for the petitioner before us, namely, that the said property could not be sold in execution i.e. for recovery of the amount due under the recovery certificate, since the same was the only residential property of BRD (CD-3) till the time that he transferred the same to the petitioner, and, thereafter the same is the only residential property of the petitioner.
34. However, when the writ petition was taken up for initial hearing on 11.03.2019, learned counsel for the petitioner sought to advance the submission taken note of in paragraph 3 hereinabove. Learned counsel for the petitioner sought an adjournment to address the Court on the aspect whether Section 60(1)(ccc) of the Code, as applicable to Delhi, is attracted in the facts of the present case. The matter was, thereafter, heard at length and judgment reserved.
35. To begin with, we may extract the opening words of Section 60 of the Code, de hors the State Amendments applicable to Delhi. Insofar as they are relevant, they read as follows:
“60. Property liable to attachment and sale in execution of decree.—(1) The following property is liable to attachment and sale in execution of a decree, namely, lands, houses or other buildings, goods, money, bank notes, cheques, bills of exchange, hundis, promissory notes, Government securities, bonds or other securities for money, debts, shares in a corporation and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the judgment debtor, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgment-debtor or by another person in trust for him or on his behalf:
Provided that the following properties shall not be liable to such attachment or sale, namely:—
(a) the necessary wearing-apparel, cooking vessels, beds and bedding of the judgment-debtor, his wife and children, and such personal ornaments as, in accordance with religious usage, cannot be parted with by any woman;
(b) tools of artisans, and, where the judgment debtor is an agriculturist, his implements of husbandry and such cattle and seed-grain as may, in the opinion of the Court, be necessary to enable him to earn his livelihood as such, and such portion of agricultural produce or of any class of agricultural produce as may have been declared to be free from liability under the provisions of the next following section;
(c) houses and other buildings (with the materials and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to an agriculturist or a labourer or a domestic servant and occupied by him;” (emphasis supplied)
36. Thus, it would be seen that the main provision of Section 60 CPC, describes, inter alia, lands, houses and other buildings belonging to the Judgment Debtor as properties which are liable to attachment and sale in execution of a decree. The proviso to Section 60(1), however, carves out exceptions of properties which are not liable to attachment and sale. At this stage itself, we may observe that by State amendments applicable to Delhi, inter alia, Clause (c), as extracted above, has been modified, and Clause (cc) and (ccc) have been added, which are relevant and shall be taken note of hereinafter. Nevertheless, even the unamended clause (c) in the proviso exempts houses and other buildings with the material and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment “belonging to an agriculturist or a labourer or a domestic servant” and occupied by him, from attachment and sale in execution of a decree. Evidently, the Parliament granted exemption in Clause (c) of the proviso to Section 60(1) in respect of the poorer classes of persons comprising of agriculturists, labourers, and domestic servants.
37. Amendments to, inter alia, section 60 (c), and the introduction clauses (cc) and (ccc) [with which we are specifically concerned] were introduced by the Punjab Relief of Indebtedness Act, 1934 [Punjab Act No. VII of 1934] (PRI Act for short), which was extended in its application to Delhi.
38. Before coming back to the relevant clause of Section 60 CPC, we may now turn our attention to the PRI Act. The PRI Act was enacted even prior to the coming into force of the Government of India Act, 1935 and Parts thereof were extended to the whole of Punjab (as then defined). The PRI Act was described as “An act to provide for the relief of indebtedness in the Punjab”. With a view to fulfill the stated object of the PRI Act, under the umbrella of the PRI Act, various provisions/ sections of other enactments in force, which had a bearing on the aspect of indebtedness in the Punjab, were amended. The Legislature – with a view to achieve the object of the PRI Act, viz. to provide relief of indebtedness in the Punjab, inserted or modified sections/ clauses in other enactments. For instance, Section 3 of the PRI Act inserted Clause (aa) in Section 10(1) of the Provincial Insolvency Act, 1920. Similarly, Section 4 of the PRI Act amended/ substituted the words found in Section 74 of the Provincial Insolvency Act, 1920. Section 5 of the PRI Act amended Section 3 of the Usurious Loans Act, 1918. Section 33 of the PRI Act introduced amendments to Section 1(3)(a) of the Redemption of Mortgages (Punjab) Act, 1913. Section 35 of the PRI Act introduced an amendment in Section 60(1)(c) of the CPC. The words “occupied by him” were substituted by the words “not let out on rent or lent to others or left vacant for a period of a year or more”. Thus, the strict condition – that the “house or other building” should be “occupied by him”, to entitle the “agriculturist or a labourer or a domestic servant”, the protection against attachment and sale was somewhat relaxed to cover even cases where such property may have been let out or left vacant for less than a year. Similarly, Section 36 of the PRI Act amended Order 21 Rule 2 of the CPC by omitting Sub-rule (3) thereof.
39. Section 7 of the PRI Act contained the definitions of the expressions “Debt” and “Debtor”. The said Section reads as follows:
“7. (I) “Debt” includes all liabilities of a debtor in cash or in kind, secured or unsecured, payable under a decree or order of a civil court or otherwise, whether mature or not, but shall not include debts incurred for the purposes of trade, arrears of wages, land revenue or anything recoverable as an arrears of land revenue, or any debt which is barred by the law of limitation, or debts due to co-operative banks or to co- operative societies or to the Imperial Bank of India or to any banking company registered under the Indian Companies Act, 1913, or the law relating to companies for the time being in force in British India
(2) “Debtor” means a person who owes a debt, and
(i) who both earns his livelihood mainly by agriculture, and is either a landowner, or tenant of agricultural land, or a servant of a land owner, or of a tenant of agricultural land, or
(ii) who earns his livelihood as a village menial paid in cash or kind for work connected with agriculture.
Provided that a member of a tribe, notified as agricultural under the Punjab Alienation of Land Act, 1900, shall be presumed to be a debtor as defined in this section until it is proved that his income from other sources is greater than his income from agriculture.
Explanation. – (i) A debtor shall not lose his status as such through involuntary unemployment or an account of incapacity, temporary or permanent, by bodily infirmity, or, if he is or has been in service of His Majesty‘s Military or Naval Forces, only on account of his pay and allowances or pension exceeding his income from agricultural sources.
(ii) A debtor shall not lose his status as such by reason of the fact that he makes income by using his plough cattle for purposes of transport.
(iii) A debtor shall not lose his status as such only because he does not cultivate with his own hands.
If any question arises in proceedings under this part of the Act, whether a person is a debtor or not, the decision of a Debt Conciliation Board shall be final.
(3) “Agriculture” shall include horticulture and the use of land for any purpose of husbandry inclusive of the keeping or breeding of livestock, poultry, or bees, and the growth of fruit, vegetables and the like.
(4) “Prescribed” means prescribed by rules made under this part of the Act.” (emphasis supplied)
40. Thus, the “Debtor” under the PRI Act is defined, primarily, as an agriculturist, or one who earns his livelihood as a village menial paid in cash, or kind, for work connected with agriculture. It is in respect of such a debtor, that the expression “Debt” has been defined. However, even in respect of such a debtor, debts incurred, inter alia, for the purposes of trade are not covered by the expression “Debt”, meaning thereby, that even in respect of an agriculturist, debts which arise out of, or in connection with trading activities, are not covered within the scope of the PRI Act.
41. Section 8 of PRI Act provides for setting up of Debt Conciliation Boards by the local government for the purpose of amicable settlement between debtors and the creditors. Section 9 provides that the debtor or any of his creditors may apply to the Board to effect the settlement between the debtor and his creditors. Section 9 contains a proviso, which states that “no application shall be made if the debtor‘s debts exceed ten thousand rupees or such larger sum as the Local Government may prescribe for any particular area.”
42. The proviso to Section 9 shows that the defined debts of debtors (as defined under the PRI Act), if they exceed Rs.10,000/-, or such larger sum as the Local Government may prescribe for any particular area, shall not be put up for settlement before the Debt Conciliation Board. The legislature, evidently, intended small debtors covered by the PRI Act with greater protection, than others.
43. On 30.05.1939, i.e. after the coming into force of the Government of India Act, 1935, the Central Government exercised its powers conferred by Section 7 of the Delhi Laws Act, 1912, to extend to the province of Delhi, the enactments specified in the Schedule. The relevant extract of the said notification published in the Gazette of India dated 03.06.1939 being Notification No. 189/38 reads as follows:
“No. 189/38. – In exercise of the powers conferred by section 7 of the Delhi Laws Act, 1912 (XIII of 1912), and in supersession of all previous notifications under that section extending Punjab Acts to the Province of Delhi or any part thereof, except the notification of the Government of India in the Department of Education, Health and Lands, No. F. 117/32-L. & O., dated the 26th January, 1933, the Central Government is pleased to extend to the Province of Delhi or such part thereof as is specified in the second column of the Schedule annexed hereto, the enactments specified in the corresponding entry in the first column thereof, subject to the restrictions and modifications, if any, specified in the corresponding entry in the third column, and to the following provisions, namely :–
(i) references in the first column of the said Schedule to an Act shall be deemed to be references to that Act as in force in the Punjab on the date of this notification, and
(ii) references in the said enactments to the Provincial Government shall be construed as references to the Chief Commissioner of Delhi, and references to the Punjab shall be construed as references to the Province of Delhi.
Provided that all notification, orders, bye-laws, rules and regulations made or issued under any of the enactments extended to the Province of Delhi or any part thereof by the notifications hereby superseded, shall continue to be in force as if made or issued under the corresponding enactment extended by this notification; and all proceedings taken under any of the enactments extended by the superseded notifications shall be continued as if taken under the corresponding enactment extended by this notification.” (emphasis supplied)
44. The relevant extract of the schedule to this notification reads as follows:

“SCHEDULE

45. Thus, by virtue of the said notification dated 03.06.1939, inter alia, the PRI Act was extended to, and became applicable to the province of Delhi. Consequently, the enactments amended by the PRI Act – which, and to the extent that they were applicable to Delhi, stood amended. By virtue of Section 35 of the PRI Act, clause (c) to the proviso to Section 60(1) also stood amended as noticed hereinabove in paragraph 38.
46. On 05.10.1940, the Punjab Relief of Indebtedness (Amendment) Act, 1940, as amended by the Provincial Legislature, came into force. Several provisions of the PRI Act were amended, including Section 35 thereof (by virtue of Section 16 of the Punjab Relief of Indebtedness (Amendment) Act, 1940). Section 16 of the PRI (Amendment) Act reads as follows:
“Amendment of section 35 of Act VII of 1924.
16. For section 35 of the said Act, the following section shall be substituted, namely:-
Amendment “35. In section 60 of the Code of Civil of section 60 of the Code of Civil Procedure, 1908. Procedure, 1908-
(a) in subsection (1) –
(i) in clause (c), for the words “occupied by him” the following words shall be deemed to be substituted, namely :-
not proved by the decree-holder to have been let out on rent or lent to persons other than his father, mother, wife, son, daughter, daughter-in- law, brother, sister or other dependents or left vacant for a period of a year or more;
(ii) after clause (c), the following clauses shall be deemed to be inserted, namely:-
(cc) Milch animals, whether in milk or in calf, kids, animals used for the purposes of transport or draught carts, and open spaces or enclosures belonging to an agriculturist and required for use in case of need for tying cattle, parking carts, or stacking fodder or manure;
(ccc) one main residential house and other buildings attached to it (with the material and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to a judgment-debtor other than an agriculturist and occupied by him: Provided that the protection afforded by this sub-section shall not extend to property which has been mortgaged;
(b) after subsection (2), the following subsections shall be deemed to be inserted namely:-
(3) Notwithstanding any other law for the time being in force an agreement by which a debtor agrees to waive any benefit of any exemption under this section shall be void.
(4) For the purposes of this section the word
“agriculturist” shall include every person whether as owner, tenant, partner or agricultural labourer who depends for his livelihood mainly on income from agricultural land as defined in the Punjab Alienation of Land Act, 1900.
(5) Every member of a tribe notified as agricultural under the Punjab Alienation of Land Act, 1900, and every member of a scheduled caste shall be presumed to be an agriculturist until the contrary is proved.
(6) No order for attachment shall be made unless the Court is satisfied that the property sought to be attached is not exempt from attachment or sale.”(emphasis supplied)
47. The PRI Act was further amended vide the Punjab Relief of Indebtedness (Amendment) Act, 1942. Insofar as it is relevant, Section 5 of this Amendment Act reads as follows:
“5. Amendment of section 35 of Act VII of 1934. – In section 35 of the said Act –
In clause (a) –
(i) after the words, brackets and figure “in sub-section (1)” the words “in the proviso” shall be inserted:
(ii) in sub-clause (ii) for the proviso to paragraph (ccc), the following proviso shall be substituted, namely: –
“Provided that the protection afforded by this clause shall not extend to any property specifically charged with the debt sought to be recovered.””
48. Post the enforcement of the Constitution of India, on 08.06.1956, the Central Government issued a Notification bearing S.R.O. 1354 in exercise of the powers conferred by Section 2 of the Part C States (Laws) Act, 1950, extending to the State of Delhi, the enactment specified in the First Column of the Schedule thereto annexed, subject to the modifications specified in the corresponding entry in the Second Column of the Schedule. The said Notification dated 08.06.1956 bearing S.R.O. 1354, insofar as it is relevant, reads as follows:
“New Delhi -2, the 8th June 1956
S.R.O. 1354 – In exercise of the powers conferred by section 2 of the Part C States (Laws) Act, 1950 (XXX of 1950), the Central Government hereby extends to the State of Delhi the enactments specified in the first column of the Schedule hereto annexed subject to the modifications, if any, specified in the corresponding entry in the second column thereof, and to the following provision, namely:–
References in the Punjab Relief of Indebtedness (Amendment) Act, 1940 (Punjab Act XII of 1940) to the State Government shall be construed as references to the Chief Commissioner of Delhi.
THE SCHEDULE
Name of Act 1 Modifications 2
The Punjab Relief of Indebtedness (Amendment) Act, 1940 (Punjab Act XII of 1940).
1. In section 2 for the words and figures “the Punjab Relief of Indebtedness Act, 1934”, the words and figures “the Punjab Relief of Indebtedness Act, 1934, as extended to the State of Delhi”shall be substituted.
Indebtedness Act, 1934”, the words and figures “the Punjab Relief of Indebtedness Act, 1934, as extended to the State of Delhi”shall be substituted.
2. In Section 3 – (i) for the words “Imperial Bank”, the words “State Bank”shall be substituted; and (ii) for the words and figures “the Co-operative Societies Act, 1912” the words and figures “the Bombay Co-operative Societies Act, 1925, as extended to the State of Delhi” shall be substituted.
3. In section 14, in clause (b) for the words, figures and brackets “commencement of the Punjab Relief of Indebtedness (Amendment) Act, 1940”, the words, figures and brackets “date of the extension of the Punjab Relief of Indebtedness (Amendment) Act, 1940, to the State of Delhi” shall be substituted.
4. In section 16, in clause (b), the words and figures “as defined in the Punjab Alienation of Land Act, 1900” and “every member of a tribe notified as agricultural under the Punjab Alienation of Land Act, 1900, and” shall be omitted.
The Punjab Relief of Indebtedness (Amendment) Act, 1942 (Punjab Act VI of 1942)
49. Resultantly, Section 35 of the PRI Act, as amended and extended for application in the State of Delhi, reads as follows:
“35. Amendment of section 60 of the Code of Civil Procedure, 1908 – In section 60 of the Code of Civil Procedure, 1908-
(a) in sub-section (1) [in the proviso],
(i) in clause (c), for the words “occupied by him” the following words shall be deemed to be substituted, namely :-
“not proved by the decree-holder to have been let out on rent or lent to persons other than his father, mother, wife, son, daughter, daughter-in-law, brother, sister or other dependants or left vacant for a period of a year or more:”
(ii) after clause (c), the following clauses shall be deemed to be inserted, namely :-
“(cc) Milch animals, whether in milk or in calf, kids, animals used for the purposes of transport or draught cart and open spaces or enclosures belonging to an agriculturist and required for use in case of need for tying cattle, parking carts, or stacking fodder or manure;
(ccc) one main residential house and other buildings attached to it (with the material and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to a judgment-debtor other than an agriculturist and occupied by him:
[Provided that the protection afforded by this clause shall not extend to any property specifically charged with the debt sought to be recovered.]”
(b) after sub-section (2), the following sub-sections shall be deemed to be inserted, namely :-
“(3) Notwithstanding any other law for the time being in force an agreement by which a debtor agrees to waive any benefit of any exemption under this section shall be void.
(4) For the purposes of this section the word “agriculturist” shall include every person whether as owner, tenant, partner or agricultural labourer who depends for his livelihood mainly on income from agricultural land.
(5) Every member of a scheduled caste shall be presumed to be an agriculturist until the contrary is proved.
(6) No order for attachment shall be made unless the court is satisfied that the property sought to be attached is not exempt from attachment or sale.” (emphasis supplied)
50. For the sake of completeness, we may also notice the Punjab Moneylending and Debtors‟ Protection Laws (Extension and Amendment) Act, 1960, whereby, inter alia, the PRI Act, 1934 and all Rules, Notifications and Orders made, and all directions or instructions issued thereunder, which were in force immediately before the commencement in the territories, and which immediately before 01.11.1956 were comprised in the State of Punjab, were extended to and came in force in the transferred territories i.e. the territories comprised in the State of Patiala and East Punjab States Union before 01.11.1956.
51. Section 3 of the Punjab Moneylending and Debtors‟ Protection Laws (Extension and Amendment) Act, 1960 reads as follows:
“3. Extension of certain moneylending, and debtors‘ protection laws to transferred territories – (1) The following Acts, namely, –
(i) the Punjab Regulation of Accounts Act, 1930 (I of 1930),
(ii) the Punjab Relief of Indebtedness Act, 1934 (VII of 1934),
(iii) the Punjab Debtors‘ Protection Act 1936 (II of 1936), and
(iv) the Punjab Registration of Moneylenders Act, 1938 (IV of 1938),
and all rules, notifications and orders made, and all directions or instructions issued, thereunder, which are in force immediately before the commencement of this Act in the territories which, immediately before the 1st November, 1956, were comprised in the State of Punjab, are hereby extended to and shall be in force in, the transferred territories.
(2) With effect from the commencement of this Act, the amendments specified in column 4 of the Schedule shall be made in the Acts specified against them in column 3 thereof.”
52. The Schedule to this Act, however, does not make any reference to the PRI Act, 1934. In fact, the aforesaid Punjab Moneylending and Debtors‟ Protection Laws (Extension and Amendment) Act, 1960 is of no relevance for our purpose.
53. The submission of Mr. Gupta, learned senior counsel for the petitioner, firstly, is that Section 2(g) of the Act defines the expression “debt” to mean “debt means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil Court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application and includes any liability towards debt securities which remains unpaid in full or part after notice of ninety days served upon the borrower by the debenture trustee or any other authority in whose favour security interest is created for the benefit of holders of debt securities or”. (emphasis supplied)
54. Learned counsel submits that the expression “debt” used in Section 60(1)(ccc) CPC, as applicable to Delhi has to be read and understood as the “debt” defined in Section 2(g) of the Act. He submits that Rule 10 of the Rules provide that all such property, as is by the Code of Civil Procedure, 1908 exempted from attachment and sale in execution of a decree of a Civil Court, shall be exempted from attachment and sale under the Schedule. Thus, the said property cannot be attached and sold to recover the “debt” due to the respondent UBI, since Section 60(1)(ccc) is specifically made applicable in respect of debts due to Banks and Financial Institutions. Learned counsel has placed reliance on C.N. Paramsivam and Ors. v. Sunrise Plaza Tr. Partner and Ors., (2013) 9 SCC 460, wherein the Supreme Court dealt with the issue of legislation by incorporation. The Supreme Court in paragraph 17 of its decision referred to Principles of Statutory Interpretation by Justice G.P. Singh, and quoted the following text from the said book, which reads:
” Incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. When an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the later Act as if they had been ‘bodily transposed into it‘. The effect of incorporation is admirably stated by Lord Esher, M.R.:
‘… If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it….‘ [Wood’s Estate, In re, ex p Works and Buildings Commissioners, (1886) 31 Ch D 607 (CA) at p. 615]
Even though only particular sections of an earlier Act are incorporated into later, in construing the incorporated sections it may be at times necessary and permissible to refer to other parts of the earlier statute which are not incorporated. As was stated by Lord Blackburn:
‘When a single section of an Act of Parliament is introduced into another Act, I think it must be read in the sense which it bore in the original Act from which it was taken, and that consequently it is perfectly legitimate to refer to all the rest of that Act in order to ascertain what the section meant, though those other sections are not incorporated in the new Act Portsmouth Corpn. V. Smith, (1885)10 A.C. 364 (HL) at p371 ‘ (emphasis supplied)
55. Learned counsel for the petitioner submits that the provisions of the Act have overriding effect. He refers to Section 34(1) of the Act, which provides “Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.”
56. Thus, the expression “debt”, as defined in the Act would override the meaning of the expression “debt” in any other law, including the PRI Act as extended to Delhi. Learned counsel for the petitioner places reliance on The Tax Recovery Officer II, Sadar, Nagpur V. Gangadhar Vishwanath Ranade (dead) through Mrs. Shobha Ravindra Nemiwant, AIR 1999 SC 427, to submit that the Recovery Officer is bound to examine who is in possession of the property, and in what capacity. He can only attach property in possession of the assessee in his own right, or in possession of a tenant or a third party on behalf of/ for the benefit of the assessee. He cannot declare any transfer made by the assessee in favour of a third party as void. If the department finds that a property of the assessee is transferred by him to a third party with the intention to defraud the Revenue, it will have to file a suit under Rule 11(6) to have the transfer declared void under Section 281.
57. Learned counsel submits that this Court has examined the scope of the exemption granted under Section 60(1)(ccc), and has even applied the same in several cases relating to the recovery of debt under the Act. In this regard, he places reliance on the decision of a Division Bench of this Court in S.C. Jain v. Union of India, AIR 1983 Delhi 367 (DB). In this decision, the question determined by the Division Bench was whether Clause (ccc) inserted in the proviso to Section 60(1) of the Code by means of Section 35 of the PRI Act, as amended and extended to Delhi, stands repealed after the passing of the Amendment Act 104 of 1976, amending the Code, specially in the light of Section 97(1) of the amendment Act of 1976. Section 97(1) of the Amendment Act of 1976, whereby the Code was amended, reads as follows:
“97(1) Any amendment made, or any provision inserted in the Principal Act by a State Legislature or a High Court before the commencement of this Act shall, except in so far as such amendment or provision is consistent with the provisions of the principal Act as amended by this Act, stand repealed.”
58. Learned counsel submits that in paragraph 4 of this decision, the Division Bench set out the consequence of the amendments to the PRI Act, as applicable to the State of Punjab by observing “that though under the Code there was no exemption from attachment and sale of a main residential house of judgment-debtor yet by virtue of these Punjab Amendments the code, in so far as in its application to the State of Punjab was concerned, clause (ccc) exempted from attachment one main residential house belonging to a judgment-debtor.”
59. The Division Bench observed, in respect of the Notification dated 08.06.1956, issued in exercise of the power conferred by Section 2 of Part C State Laws Act, 1950 that “The result was that the protection of clause (ccc) in proviso to Section 60(1) of the Code also became available in Delhi from this date onwards.”
60. The case of the petitioner in S.C. Jain (supra) was that he was one of the joint owners of the house which was the main residential house of the petitioner and the same was, therefore, exempted from attachment and sale under Clause (ccc) of proviso to Section 60(1) of the Code, as applicable to Delhi. This argument of the petitioner was countered by the respondent by placing reliance on Section 97(1) of the Amendment Act 104 of 1976, whereby the Code was amended. The submission of the respondent taken note of by the Division Bench in paragraph 8 of the decision reads as follows:
“…..The contention is that clause (ccc) was inserted in the Code by State Legislature of Punjab and that it is not consistent with the provisions of the Code as amended in 1976, because there is no exemption from attachment of a main residential house to be found in the Principal Act, the result being that clause (ccc) in proviso to Section 60(1) of the Code, as applicable in Delhi stands repealed. This contention of counsel for the revenue finds support from a decision of Luthra, J. in S. Rau’s I.A.S. Study Circle v. Smt. Sushila Nanda, 1981 Delhi Law Times 174, (1) and Sultan Singh, J. in Tikkan Lal v. Govind Lal, 1983 Rajdhani Law Reporter (Note) 9 (2), where both the learned Judges have held that clause (ccc) in proviso stands repealed and exemption for a main residential house is no longer available in Delhi.”
61. Another submission of the petitioner considered by the Division Bench was that clause (ccc) of proviso to Section 60(1) was not inconsistent with the main provision of Section 60 of the Code, and that it was only an additional and beneficial provision giving extra benefits that are covered by the main provision of Section 60(1)(c) of the Code and, thus, no question of repugnancy arises. The Division Bench rejected the view taken by the two learned Single Judges of this Court, that Clause (ccc) was no longer available in Delhi. In paragraph 10 of its decision, the Division Bench observed:
“10. Now Section 97(1) of 1976 Act only purports to repeal amendments in stated circumstances but only if inserted by Act of legislature or a High Court. The contention of Mr. Tikku is that the insertion of clause (ccc) in proviso to Section 60(1) of the Code, though effected by Punjab Amendment Act XII of 1940 and Punjab Act VI of 1942 a State amendment, cannot be treated to be so, when extended to Delhi by a notification of 1956 issued by the Central Government as mentioned above. The extension in Delhi, it is claimed is by an Act of Parliament and thus is outside the ambit of Section 97(1) of 1976 Act. So far as Punjab is concerned, there is no dispute that the insertion of clause (ccc) in proviso is by virtue of a legislation by the State Legislature. If the view of Luthra, J. and Sultan Singh, J. that the provision of the Code as amended by 1976 are inconsistent with clause (ccc) (of which we express no opinion) is correct the result undoubtedly would be that clause (ccc) may no longer be available so far as the State of Punjab is concerned. But the same consequence does not follow in the Union territory of Delhi.” (emphasis supplied)
62. The Division Bench held that the extension of PRI Act to the Union Territory of Delhi was an exercise of the authority conferred by an Act of Parliament. In paragraph 13, the Division Bench observed;
“……In this view of the matter it is indisputable that Punjab Act XII of 1940 and Punjab Act VI of 1942, which inserted clause (ccc) in proviso to sub-section (1) of Section 60 of the Principal Act (namely the Code) when extended to the Union territory of Delhi, by means o(sic of) Central Government’s notification of June, 1956, must be deemed to be, in so far as Delhi is concerned, insertions made not by the State Legislature but by the Parliament itself, if so, obviously Section 97(1) of 1976 Act is inapplicable because it only applies, if any amendment is made by the State Legislature or a High Court.”
63. The conclusion drawn by the Division Bench is contained in paragraph 14, which reads as follows:
“14. In that view it has to be held that Section 97(1) of 1976 Act is of no assistance to the Revenue. Thus the benefit of clause (ccc) in proviso to Section 60(1) of the Code, as applicable to Delhi, continues to be available to a judgment- debtor provided he satisfies the conditions mentioned therein. We must therefore over rule the decisions of Luthra-Sultan Singh, JJ mentioned above though on different grounds, as not laying correct law.” (emphasis supplied)
64. In paragraph 16 of the decision, the Division Bench clarified that “By our judgment all that we are holding is that clause (ccc) in proviso to Section 60(1) of the Code has not been repealed, so far as Delhi is concerned, but nothing said in our judgment should be taken even remotely to suggest whether the case of the petitioner is covered by clause (ccc) or not. Our decision only relates to the question of law. The question whether it is the main residential house and other requirements of clause (ccc) are satisfied or not, has to be decided by the Tax Recovery Officer. ”
65. Learned counsel for the petitioner has placed heavy reliance on the observations made by the Division Bench on paragraph 20 of its decision, which reads as follows:
“20. The next contention of Mr. Wazir Singh was that as clause (ccc) was brought in by the Punjab Relief of Indebtedness Act, it would be available only in proceedings under 1934 Act, as amended. The argument is not understandable. Part IV of 1934 Act sets up Debt Conciliation Boards for settlement of particular kinds of debts. Section 35 of 1934 Act, as amended, inserted clause (ccc) in proviso to Section 60(1) of the Code. Under Section 222 read with Rule
10 of the Second Schedule to the Income-tax Act, all such property as is by the Code of Civil Procedure, 1908, exempted from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule. Hence in proceedings before the Tax Recovery Officer, in Delhi the provisions of clause (ccc) in proviso to Section 60(1) of the Code are applicable.” (emphasis supplied)
66. Premised on the aforesaid observation, the submission of learned counsel for the petitioner is that the Division Bench rejected the submission of the respondent/ revenue, that clause (ccc) of the Proviso to Section 60(1) would be available only in respect of proceedings under the PRI Act 1934, as amended.
67. Learned counsel for the petitioner submits that Clause (ccc) of the proviso to Section 60(1) should be construed and read plainly, and that there is no occasion for this Court to expand or restrict the meaning and scope of that provision. In this regard, he places reliance on Centre for Public Interest Litigation v. Union of India and Others, 139 (2007) DLT 289 (DB), wherein the Division Bench held:
“42. We are not able to find much substance in the contention raised on behalf of the private respondents. It is a settled rule of interpretation that whenever a provision is amended, the amendment must be construed and read on its simple language and there is no occasion before the Court to expand the meaning and scope of that provision. The ‘Doctrine of Plain Meaning‘ is a primary and often applied principle to the rule of interpretation. The author says that it may look somewhat paradoxical that plain meaning rule is not plain and requires some explanation. The rule that plain words require no construction, start with the premise that words are plain, which itself is a conclusion reached after construing the words. When the words of a statute are clear, plain and unambiguous, i.e. they are reasonably susceptible to only one meaning, the Courts would give effect to that meaning and not influenced by consequences.. The rule stated by TINDAL, C.J. in Sussex Peerage case is in the following form:
This doctrine is a first principle of rule of interpretation and it requires the Court to interpret the provisions on their simple and plain reading without any addition or deletion. Maxim A pactis privatorum publico juri non derogatur is an accepted principle of interpretation of provisions in England as well as in India. From the words of law, there should not be any departure. When the precise and unambiguous words are used in a rule or instruction, then, they must be understood and expound limited to their natural and ordinary sense. The words used best declare the intention of the rule maker.” (emphasis supplied)
68. On the same aspect, he places reliance on Commercial Tax Officer and Ors. v. M/s. Biswanath Jhunjhunwala and Anr, AIR 1997 SC 357.
69. Learned counsel for the petitioner has also placed reliance on Gurudevdatta VKSSS Maryadit and Ors. v. State of Maharashtra and Ors., AIR 2001 SC 1980 to submit that the statement of object and reasons of the PRI Act – taken note of hereinabove, cannot be relied upon to examine the scope of the amendment to Section 35 of the PRI Act, whereby Section 60 of the CPC, as applicable to the State of Punjab was amended, which was later on extended and made applicable to Delhi. In this decision, the Supreme Court quoted its observations in Ashwini Kumar Ghose and Anr. v. Arabinda Bose and Anr., AIR 1952 SC 369, wherein Patanjali Sastri, CJ had observed in paragraph 32:
“32. As regards the propriety of the reference to the statement of objects and reasons, it must be remembered that it seeks only to explain what reasons induced the mover to introduce the Bill in the House and what objects he sought to achieve. But those objects and reasons may or may not correspond to the objective which the majority of Members had in view when they passed it into law. The Bill may have undergone radical changes during its passage through the House or Houses, and there is no guarantee that the reasons which led to its introduction and the objects thereby sought to be achieved have remained the same throughout till the Bill emerges from the House as an Act of the legislature for they do not form part of the Bill and are not voted upon by the members. We, therefore, consider that the Statement of objects and reasons appended to the Bill should be, ruled out as an aid to the construction of a statute.” (emphasis supplied)
70. Learned counsel for the petitioner has submitted that the exemption contained in Clause (ccc) of the Proviso to Section 60 (1) of the Code is in recognition of the basic need of all human beings, one of which is shelter.
In this regard, he places reliance on M/s Shantistar Builders v. Narayan Khimalal Totame and Ors., AIR 1990 SC 630, wherein the Court observed:
“9. Basic needs of man have traditionally been accepted to be three — food, clothing and shelter. The right to life is guaranteed in any civilized society. That would take within its sweep the right to food, the right to clothing, the right to decent environment and a reasonable accommodation to live in. The difference between the need of an animal and a human being for shelter has to be kept in view. For the animal it is the bare protection of the body; for a human being it has to be a suitable accommodation which would allow him to grow in every aspect— physical, mental and intellectual. The Constitution aims at ensuring fuller development of every child. That would be possible only if the child is in a proper home. It is not necessary that every citizen must be ensured of living in a well- built comfortable house but a reasonable home particularly for people in India can even be mud-built thatched house or a mud- built fire-proof accommodation.”
71. In this regard, he has also placed reliance on Chameli Singh & Ors. v. State of U.P. & Anr., (1996) 2 SCC 549.
72. Learned counsel for the petitioner has cited Indo Foreign Commercial Agency (Produce) Pvt. Ltd. & Ors. Vs. Punjab and Sind Bank, 183 (2011) DLT 682 (DB), as an instance where the Court invoked Clause (ccc) of proviso to Section 60(1) of the Code, as applicable to Delhi, to set aside the order of restraint against the petitioner from selling, transferring, disposing of, creating any third party interest in respect of a residential property of the petitioner – it being the only residential property of the petitioner/ debtor under the Act.
73. We have considered the submissions advanced by Mr. Ravi Gupta learned senior counsel for the petitioner, and those advanced by Mr. Malhotra as well. The decision of the Division Bench of this Court in S.C. Jain (supra) only examined the issue whether Clause (ccc) of proviso to Section 60(1) of the Code stood repealed, so far as Delhi is concerned, by virtue of Section 97(1) of the Amendment Act, 1976, whereby the Code was amended. The scope of, and the meaning to be ascribed to Clause (ccc) of proviso to Section 60(1) of the Code was not considered by the Division Bench in that case. Even while dealing with the submission of the Revenue (advanced by Mr. Wazir Singh, Advocate) – that Clause (ccc) of proviso to Section 60(1) of the Code having been introduced by the PRI Act, 1934, it was available in proceedings under the PRI Act, 1934, as amended, the Court did not examine the scope and meaning to be ascribed to Clause (ccc) of proviso to Section 60(1) of the Code. Thus, S.C. Jain (supra) cannot be considered to be a binding precedent on the issue that has arisen for our consideration, namely, as to what is the meaning and scope of Clause (ccc) of the proviso to Section 60(1) of the Code; Is the expression “judgment- debtor” found in Clause (ccc) to be understood as any and every “judgment debtor” against whom a “debt” – as generally understood has been determined in a judicial/ quasi-judicial proceeding, or, whether the expression “judgment debtor” used in Clause (ccc) of the proviso to Section 60(1) of the Code has to be understood as a judgment debtor who is a “debtor” as defined and understood under the PRI Act in respect of a “debt” as defined in the PRI Act?
74. The decision in Indo Foreign Commercial Agency (supra) is also not an authority on the proposition which we are considering, since it merely proceeded on the basis that a debtor under the Act would enjoy the protection under Clause (ccc) of proviso to Section 60(1) of the Code, without examining the meaning and scope of Clause (ccc) of proviso to Section 60(1) of the Code.
75. As noticed hereinabove, the PRI Act was enacted in Punjab in 1934 “to provide for the relief of indebtedness in Punjab”. We have examined the nature and structure of the PRI Act. It defines the expression “debt” in Section 7(1) of the Act, inter alia, to exclude from the meaning of the said expression “debts incurred for the purpose of trade, arrears of wages, land revenue or anything recoverable as arrear of land revenue, debts due to cooperative banks or to cooperative societies or to any banking company registered under the Indian Companies Act, 1913 or the law relating to companies for the time being in force in British India”. Thus, the expression “debt” used in the PRI Act is defined in a restricted way. It specifically excludes debts due to banking companies registered under the Indian Companies Act, 1913 or the law relating to companies in force for the time being in British India.
76. Similarly, the expression “debtor” defined in Section 7(2) is defined narrowly, inter alia, to mean a person who owes a debt, i.e. a debt of the kind defined in Section 7(1), and who earns his livelihood mainly by agriculture and is either a landowner, or tenant of agricultural land, or a servant of a land owner, or a tenant of agricultural land, or who earns his livelihood as a village menial paid in cash or kind for work connected with agriculture.
77. The statement of objects and reasons for enactment of the PRI Act, contained in the Bill moved in the Legislature, also throws light on the background in which the PRI Act was passed. The relevant extract thereof reads as follows:
“Statement of objects and reasons – In 1929 the total volume of agricultural debt in the Punjab was estimated by the Provincial Banking Enquiry Committee at 135 crores of rupees. Since that date the sharp fall in the prices of agricultural produce has made the pressure of debt on the cultivator even heavier than these figures indicate, and the problem of finding some relief has now become a very acute one. At the end of March, 1932, the Punjab Government appointed a committee of members of the Legislative Council to consider this problem and to submit proposals for its solution. The Report of the Committee has been debated in the Legislative Council, and has been for some time under the careful and detailed consideration of Government, which have also been studying the steps taken in other provinces for the relief of indebtedness. In formulating the legislative measures embodied in this Bill, the Punjab Government have endeavoured to hold the balance fairly between the debtor and creditor and to give the former such relief as is possible without making any change in the law which might have the effect of destroying or seriously impairing the whole system of rural credit.” (emphasis supplied)
78. Thus, the entire focus and thrust of the Bill moved– which came to be enacted as the PRI Act, was to ameliorate the miseries of small agriculturists, while balancing the rights of such debtors and creditors.
79. When one looks at the definitions of the expressions “debtor” and “debt” in the light of the objects of the PRI Act, it becomes clear that the focus of the PRI Act was to grant relief from indebtedness in the Punjab to particular class of debtors as defined in the Act and, even in respect of such debtors, in respect of a particular kinds of debts that such debtors may owe. The purpose of the Act was not to grant relief from indebtedness to all debtors – of whatever kind, and in respect of all debts – of whatever nature, and to whomsoever owed.
80. Section 9 of the PRI Act – taken note of hereinabove, brings out that even in respect of a debtor covered by the PRI Act – who owes a debt of the kind defined in Section 7(1) of the Act, different treatment is meted out to debtors who owe debts exceeding the particular threshold, from those who owe debts lesser than the threshold limit. This is evident from Section 9 of the PRI Act which enables the debtor, or any of his creditors, to approach the Debt Conciliation Board, if the debt does not exceed Rs.10,000/- or such larger sum as the Local Government may prescribe for any particular area. Section 9 of the PRI Act, therefore, again shows that the intendment of the PRI Act was not to paint all debtors, in respect of all debts owed by them – to whatever limit, with the same brush.
81. We have also noticed from the structure of the PRI Act, that under the umbrella of the said Act, i.e. for the purpose of attainment of the objectives of the PRI Act, various provisions in other laws/ enactments were introduced/ amended, as taken note of hereinabove. In the same vein, Section 35 of the PRI Act sought to introduce, inter alia, Clause (ccc) of proviso to Section 60(1) of the Code, with which we are concerned. Inter alia, Clause (ccc) of proviso to Section 60(1) of the Code was initially introduced in the PRI Act as applicable in the Punjab. As noticed hereinabove, eventually, PRI Act, as amended, was extended to Delhi and with it, inter alia, Clause (ccc) to the proviso to Section 60(1) of the Code came to be inserted in the CPC as applicable to Delhi vide Central Government notification dated 08.06.1956 bearing SRO No.1354 in exercise of powers conferred by Section 2 of the Part-C States (Laws) Act, 1950. It is pertinent to note that by the said notification dated 08.06.1956, the Central Government extended to the State of Delhi the PRI Act, as amended, and it is not that the Parliament, de hors the provisions of the PRI Act, introduced amendments in the CPC so as to include, inter alia, Clause (ccc) in the proviso to Section 60(1) of the Code, as applicable to Delhi.
82. Aforesaid being the position, in our considered view, the expression “judgment debtor” used in Clause (ccc) of proviso to Section 60(1) of the Code has to be read and understood in the context of the meaning ascribed to the expression “debtor” in the parent Act, i.e. the PRI Act as amended, and the expression “judgment debtor” cannot be understood to mean any “judgment debtor”, as generally understood.
83. Pertinently, the extracts from the Principles of Statutory Interpretation by Justice G.P. Singh relied upon by the Supreme Court in
C.N. Paramsivam & Ors. (supra) support our view. The learned author has observed that “Even though only particular sections of an earlier Act are incorporated into later, in construing the incorporated sections it may be at times necessary and permissible to refer to other parts of the earlier statute which are not incorporated”. The learned author quotes Lord Blackburn, where he observes:
“When a single section of an Act of Parliament is introduced into another Act, I think it must be read in the sense it bore in the original Act from which it was taken, and that consequently it is perfectly legitimate to refer to all the rest of that Act in order to ascertain what the section meant, though those other sections are not incorporated in the new Act.”
84. The Supreme Court quoted with approval the same text from Principles of Statutory Interpretation, 7th Edition 1999 by Justice G.P. Singh in Surana Steels Pvt. Ltd Vs. Deputy Commissioner of Income Tax and Others, (1999) 4 SCC 306, while construing explanation Clause (iv) to Section 115J of the Income Tax Act. The question that arose for consideration before the Supreme Court was: Whether the term “loss” as appearing in Section 205(1) first Proviso, Clause (b) of the Companies Act, 1956, read with Section 115-J of the Income Tax Act, 1961 means “including depreciation”. Explanation to Section 115-J and Clause (iv) reads:
“Explanation.—For the purposes of this section, ‘book profit‘ means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (1-A), as increased by—
* * * and as reduced by,—
* * *
(iv) the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of Section 205 of the Companies Act, 1956 (1 of 1956), are applicable.”
85. While answering the said question, the Supreme Court, inter alia, observed as follows:
“11. Section 115-J explanation clause (iv), is a piece of legislation by incorporation. Dealing with the subject, Justice G.P. Singh states in Principles of Statutory Interpretation (7th Edn., 1999)—
“Incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. When an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the later Act as if they had been’bodily transposed into it‘. The effect of incorporation is admirably stated by Lord Esher, M.R.: ‘If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen, or printed in it.‘ (p. 233)
Even though only particular sections of an earlier Act are incorporated into later, in construing the incorporated sections it may be at times necessary and permissible to refer to other parts of the earlier statute which are not incorporated. As was stated by Lord Blackburn:
‘When a single section of an Act of Parliament is introduced into another Act, I think it must be read in the sense it bore in the original Act from which it was taken, and that consequently it is perfectly legitimate to refer to all the rest of that Act in order to ascertain what the section meant, though those other sections are not incorporated in the new Act.‘ ” (p. 244)
12. Once we have ascertained the object behind the legislation and held that the provisions of Section 205 quoted hereinabove stand bodily lifted and incorporated into the body of Section 115-J of the Income Tax Act, all that we have to do is to read the provisions plainly and apply rules of interpretation if any ambiguity survives. Section 205(1) first proviso clause (b), of the Companies Act brings out the unabsorbed portion of the amount of depreciation already provided for computing the loss for the year. The words “the amount provided for depreciation” and “arrived at in both cases after providing for depreciation” make it abundantly clear that in this clause “loss” refers to the amount of loss arrived at after taking into account the amount of depreciation provided in the profit and loss account… … …” (emphasis supplied)
86. Thus, clause (iv) was read and understood in the context of Section 205 of the Companies Act, 1956. Similarly, the expression “judgment debtor” used in Clause (ccc) of proviso to Section 60(1) of the Code has to be read and understood in the context of the expression “debtor” used in the PRI Act, lest it leads to wholly unintended benefits being showered upon “debtors” for whose benefit the said clause was not introduced, and causes injustice to creditors against whom it was never intended to be used as a shield.
87. Interestingly, while construing the provisions of Section 35 of the PRI Act – by which the proviso to Section 60(1) were amended, the Lahore High Court on various occasions construed the exemption contained in the provisos to Section 60(1) of the Code strictly. We may refer to the following decisions in this regard:
(i) Choudhury Muhammad Ali Vs. Lala Ram Dass, 1937 171 I C 932;
(ii) Thakar Das Vs. Ram Rakha Mal, 1938 173 I C 497;
(iii) Bhola Singh Vs. Raman Mal, AIR 1941 Lahore 28.
88. Pertinently, even in S.C. Jain (supra) while agreeing with the view taken by Rajindar Sachar, J. on the issue whether Clause (ccc) of proviso to Section 60(1) of the Code continued to be available even after enactment of Section 97 (1) in the Amendment Act, 1976, whereby the Code was amended, D.R. Khanna, J. lamented the exploitation of Clause (ccc) of proviso to Section 60(1) of the Code by persons with large undisclosed incomes. The learned Judge observed in paragraphs 28 and 29 of this decision as follows:
“28. The controversy which has given rise to the present writ petitions is about the attachability of property bearing No. 7, Kasturba Gandhi Marg, New Delhi in realisation of the tax arrears. It is situated over a plot of land measuring 5000 sq. yds., and if the price of land around Connaught Place can moderately be taken as ranging between rupees 4000 and rupees 5000 per sq. yd., the land underneath the property should itself be worth above rupees two crores. The contention of the petitioners is that this property constitutes as their main residential house, and is therefore, exempt in terms of the provision contained in clause (ccc) of the proviso to Section 60 of the Code of Civil Procedure.
29. It will be relevant here to here to trace the history of how this provision was introduced in the Code of Civil Procedure. A series of redical fiscal legislations for the amelioration of the plight of poorer sections and agriculturists was set into motion during the Thirties in the erstwhile Province of Punjab by that remarkable legislator Sir Chhottu Ram. One such was the Punjab Relief of Indebtedness Act, 1934. Thereby considerable reliefs were provided to the debtors, and the primary object was to give protection to those debtors who had fallen to unfortunate days, and were likely to be thrown in the wilderness in case their only residential houses were as well attached and sold. It is unfortunate that hat progressive measure in the then existing State of social conditions is being now sought to be exploited by persons with such large undisclosed incomes (which are the bane of our economic and social structure), and with regard to properties worth crores of rupees. Be that as it may, we have to consider what protection is available to the petitioners under the law as it exists at present.” (emphasis supplied)
89. Unfortunately, the meaning and scope of, inter alia, clause (ccc) of the Proviso to Section 60(1) – in the context of the PRI Act, was not placed before the Court and, thus, it was not examined in the light of the object and purpose of the PRI Act and in the light of the Rule of interpretation taken note of hereinabove.
90. Reliance placed on Gurudevdatta VKSSS Maryadit (supra) and Ashwini Kumar Ghose (supra) to submit that the Statement of Objects & Reasons of the PRI Act cannot be looked into for the purpose of construing the scope of the amendment introduced in the Code by Section 35 of the PRI Act is also erroneous.
91. In Workmen of Dimakuchi Tea Estate Vs. Management of Dimakuchi Tea Estate, AIR 1958 SC 353, the Supreme Court quoted the following extract from Maxwell‟s Interpretation of Statutes, 9th Edition, p.55:
“The words of a Statute, when there is doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the Legislature has in view. Their meaning is found not so much in a strict grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained.”
92. The Courts have declined “to be bound by the letter, when it frustrates the patent purposes of the Statute”. Cabell Vs. Markham, 148 F 2d 737 (2d cir 1945), (Judge Learned Hand). (See Principles of Statutory Interpretation by Justice G.P. Singh 12th Edition 2010 page 119).
93. In M/s Doypack Systems Pvt. Ltd Vs. Union of India & Others, (1988) 2 SCC 299, the Supreme Court observed in paragraph 42 as follows:
“42. It has to be reiterated, however that the Objects and Reasons of the Act should be taken into consideration in interpreting the provisions of the statute in case of doubt. This is the effect of the decision of this Court in K.P. Varghese v. ITO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293 :
AIR 1981 SC 1922 : (1982) 1 SCR 629] where this Court reiterated that the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill could certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation was enacted. It has been reiterated that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. See in this connection the observations of this Court in Chern Taon Shang v. Commander S.D. Baijal [(1988) 1 SCC 507 : 1988 SCC (Cri) 162] … … …” (emphasis supplied)
94. In the present context, it is essential to refer to the Objects & Reasons of the PRI Act to construe the meaning of the amendment introduced in the CPC by Section 35 of the PRI Act, to prevent absurd results of the kind lamented about by D.R. Khanna, J. in S.C. Jain (supra). The intention of the Legislature could never have been to provide protection against attachment and sale in execution of a decree, of the residential property owned by a judgment debtor – irrespective of the nature and extent of the residential property that the judgment debtor may own, and irrespective of the standing/ avocation/ background of the debtor, or the creditor. The interpretation of Clause (ccc) of proviso to Section 60(1) of the Code in a plain and grammatical way, de hors the context in which the said Clause came to be introduced by the extension of the PRI Act as amended to Delhi, in the Code as applicable to Delhi, would continue to throw up completely absurd results, where debtors occupying extremely large and valuable properties – the value whereof far exceeds the debt owed to the decree holder/ certificate holder, would get away without discharging their adjudicated liability. Such an interpretation would strike at the very foundation of the Rule of Law. It would provide a convenient escape to a person who obtains a loan from a bank, or other financial institution, or person, or otherwise incurs a financial liability, by simply investing the loan amount or the debt due in buying a residential property for himself, while ensuring that he has no other such property, and when the time to repay the same comes, to block the recovery by resort to Clause (ccc) of proviso to Section 60(1) of the Code, even after the liability is determined upon adjudication. The interpretation sought to be canvassed by the petitioner in respect of Clause (ccc) of proviso to Section 60(1) of the Code would encourage fraudulent contrive by debtors to evade their liability which, certainly, would not be conducive to the preservation of the Rule of Law. Therefore, in our view, reliance placed by the petitioner on the aforesaid decisions in Gurudevdatta VKSSS Maryadit (supra) and Ashwini Kumar Ghose (supra) is misplaced.
95. Reliance placed by learned counsel for the petitioner on Section 34(1) of the Act is also misplaced, and does not advance the submission of learned counsel that while construing the meaning of Clause (ccc) of proviso to Section 60(1) of the Code, the expression “debt” should be understood as the debt defined in Section 2(g) of the Act. The definition of the expression “debt” contained in Section 2(g) is for the purpose of the Act. Section 2 opens with the words “In this Act, unless the context otherwise requires, –
… … …”. Therefore, the word “debt” is defined in Section 2(g) in the Act, for the purpose of the Act. Even that definition may not be adopted, if the context otherwise requires. Clause (ccc) of proviso to Section 60(1) of the Code has to be viewed in the context of the PRI Act since, it is by virtue of the PRI Act and, to fulfill the purpose & object of the said PRI Act, namely, to grant relief against indebtedness to agriculturists etc., that the said Clause (ccc) was introduced in the proviso to Section 60(1) of the Code.
96. Reliance placed by the petitioner on Gangadhar Vishwanath Ranade (dead) through Mrs. Shobha Ravindra Nemiwant (supra) is of no avail.
This decision has no concern with the issue examined by us. The petitioner has sought to place reliance on the observation made by the Supreme Court in paragraph 9 of this decision, which reads as follows:
“9. The Tax Recovery Officer, therefore, has to examine who is in possession of the property and in what capacity. He can only attach property in possession of the assessee in his own right, or in possession of a tenant or a third party on behalf of/for the benefit of the assessee. He cannot declare any transfer made by the assessee in favour of a third party as void. If the Department finds that a property of the assessee is transferred by him to a third party with the intention to defraud the Revenue, it will have to file a suit under Rule 11(6) to have the transfer declared void under Section 281.”
97. The said property was attached while the same was in possession of the BRD (CD-3) in his own right. The Recovery Officer has had no occasion to declare the transfer made by the BRD (CD-3) to be void, since the property was already attached even prior to the said transfer.
98. Reliance placed by learned counsel for the petitioner on the Centre for Public Interest Litigation (supra) is not apposite. This is for the reason that Clause (ccc) of proviso to Section 60(1) of the Code has not been introduced by the Parliament by the normal route of amendment of the Code. The said provision, along with others, has been incorporated in the Code as applicable to Delhi by the extension of the PRI Act, as amended, to Delhi. Therefore, the context in which the said amendment has been brought about in the Proviso to Section 60(1) of the Code is extremely pertinent and cannot be lost sight of.
99. For the same reason, reliance placed on M/s. Biswanath Jhunjhunwala (supra) is also misplaced.
100. The submission of the petitioner premised on M/s Shantistar Builders (supra) and Chameli Singh (supra) needs only to be noticed to be rejected. The basic need of all human beings, inter alia, of shelter, does not mean that debtors, irrespective of their background, can be granted blanket protection under Clause (ccc) of proviso to Section 60(1) of the Code. The Right to Shelter stems from Article 21 of the Constitution of India, which provides that “No person shall be deprived of his life or personal liberty except according to a procedure established by law”. Thus, even this fundamental right is not absolute, and in accordance with the procedure established by law it may be curtailed. The Legislature, in its wisdom, sought to carve out exceptions to Section 60(1) only in exceptional cases of agriculturists, labourers and domestic servants (under Clause (c) of proviso to Section 60(1) of the Code). Other Clauses contained in the Proviso, similarly, provide protection against attachment and sale in execution of a decree. Clause (ccc) has also to be viewed in the light of the other Clauses contained in the Proviso to Section 60(1). If the submission of the petitioner premised on the basic needs of a man for shelter were to be accepted, there would be no justification to allow the attachment and sale in execution of a decree of any residential property, of any person whatsoever. However, that is not the intendment of the law.
101. We, therefore, reject the submission of learned counsel for the petitioner that the said property is exempted from attachment and sale in execution of a decree of a Civil Court under the Code. Reliance placed by the petitioner on Rule 10 of the Rules is, therefore, of no avail and the same is rejected.
102. The writ petition is, accordingly, dismissed.
C.M. No. 53294/2019
103. This application has been preferred by the petitioner to bring on record subsequent facts relating to settlement/ OTS arrived at by the petitioner with the respondent Union Bank of India. The petitioner seeks leave to withdraw the writ petition, as not pressed, in view of the said settlement/ OTS communicated vide letter dated 31.07.2019. In the alternative, the petitioner seeks protection of its interest in view of the said settlement/ OTS with the respondent bank, while passing the final judgment in the petition.
104. The petitioner states that after the judgment was reserved in the present petition on 02.04.2019, the petitioner had approached respondent Union Bank of India with a settlement offer. The petitioner‟s settlement offer of Rs. 41 lakhs against total dues of Rs. 3,24,17,653.36/- (as on 30.06.2019) was accepted by the respondent Union Bank of India vide letter dated 31.07.2019.
105. Learned counsel for the petitioner submits that the petitioner deposited Rs. 8 lakhs in terms of the settlement, and has sought extension of time to comply with the settlement by 15.12.2019. In this regard, the petitioner has placed on record the communications dated 31.07.2019 and 22.10.2019 issued by the Union Bank of India.
106. At the time when the arguments were heard and the judgment reserved, there was no such development. We heard learned counsel for the petitioner on serious questions of law which directly arose in the present case, and the legal question raised by the petitioner – which we have considered in detail, would affect a large number of recovery cases.
107. In these circumstances, at this stage, when the arguments were fully heard and judgment reserved, we are not inclined to permit the petitioner to withdraw the writ petition despite its settlement arrived at with the respondent bank. We have nothing further to add with regard to the settlement arrived at between the parties.
108. The application stands disposed of in the aforesaid terms.

(VIPIN SANGHI) JUDGE
(REKHA PALLI) JUDGE

DECEMBER 12, 2019

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1. The petitioner has filed the present petition, inter alia, praying that respondent no.1 to be directed to remove the protesting students inside and outside the Administrative Block so that the functioning of the university can be restored.

2. It is the petitioner’s case that the protesting students have made it impossible for the administrative authorities to function as the Administrative Block has been repeatedly cordoned off by protestors.

3. Permitting the police authorities to enter the University Campus is not an action that should be readily resorted to and insofar as possible, the presence of police on the campus must be avoided. However, this cannot be done at the cost of maintaining order in the University.

4. It is important for the students to have an environment in which they can freely exchange their thoughts, give vent to their feelings and express themselves unreservedly, including entering their protest. The spirit of the students must be nurtured and not curtailed. However, it is also necessary to ensure that the functioning of the petitioner university does not come to a standstill. And, the university cannot be permitted to be reduced to a battleground between the authorities and the students.

5. Considering the present situation, it is directed that no protest of any sort shall be undertaken by the students within 100 meters radius of the Administrative Block. The University authorities shall earmark an area where the students can congregate freely to protest.

6. Ms. Monika Arora learned counsel appearing for the petitioner has drawn the attention of this Court to a map of the university campus (Annexure P-5) which indicates that on the left-hand top of the site, there is an open area, which this Court is informed is known as Sabarmati Lawns. The said area would be open for the students to congregate without any unwarranted interference from the authorities. As long as the protest or congregation is peaceful, there will be no occasion for the authorities to invite the police authorities on the campus.

7. In order to ensure that the above directions are carried out, the petitioner is permitted to put CCTV cameras in front of the Administrative Block, which shall have a clear view of the parking in front as well as Administrative Block. CCTVs may also be put on the main gates of the campus. However, at this stage, the petitioner would avoid putting CCTV cameras in other areas which may be considered by the students as an intrusion on their privacy and free movement as that may vitiate the environment of the University.

8. Needless to state that in the event, the aforesaid orders are not complied with, the petitioner would be at liberty to request the police authorities for assistance to maintain law and order in the campus. The police authorities shall act only on the evidence of obstruction to ingress/ egress to the Administrative Building, being provided by the Authorities, which may be in the form of CCTV footage.

9. No further orders are required to be passed in these proceedings at this stage. The petition and the pending applications are, accordingly, disposed of with liberty to the parties to apply in the event any further orders are required.

VIBHU BAKHRU, J

AUGUST 09, 2017

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Bail Application No. 1627/2008

Judgment delivered on: 04.8.2008
Chander Bhan and Anr. …… Petitioners
Through: Mr. Rajesh Khanna Adv.
Versus
State ….. Respondent
Through: Mr. Pawan Sharma APP

HON’BLE MR. JUSTICE KAILASH GAMBHIR

1. Whether the Reporters of local papers may be allowed to see the judgment? yes

2. To be referred to Reporter or not? yes

3. Whether the judgment should be reported in the Digest? yes

KAILASH GAMBHIR, J. (Oral)

By way of the present petition the petitioners who are parents- in-law of the complainant seek grant of anticipatory bail.
Mr. Sharma counsel for the State submits that allegations are serious in nature against the petitioners, therefore, the petitioners do not deserve grant of anticipatory bail.
Complainant is present in the court. She states that there is no possibility of her going back to the matrimonial home. However, the complainant is not averse to the matter being sent before the mediation cell. Let the matter be sent to the Mediation Cell, Rohini Court, Delhi for exploring the possibility of amicable settlement between the parties.
Let the parties appear before the Mediation Cell, Rohini Court, Delhi on 11.8.2008 at 4.00 P.M.
List the matter before the court on 23.9.2008.
Till then the petitioners shall not be arrested.
Before parting with this case, I deem it expedient and in the larger interest of saving matrimony of the couples and to restore peace between the two hostile families of husband and wife who once must have celebrated the marriage of couple with great zeal, fervor and enthusiasm but when faced with many facets and stark realities of life entangled themselves to fight a long drawn legal battle instead of building confidence, trust, understanding, mutual respect for each other and their respective families.
The offence of cruelty by husband or relatives of husband (Section 498-A) was added in 1986 to curb the vise of subjecting women to coerce them or their relatives to meet unlawful demands for dowry.
Since its enactment, this provision has been subjected to systematic and sustained attack. It has been called unfair and responsible for the victimisation of husbands by their wives and her relatives. No doubt there may be many deserving cases where women are being subjected to mental and physical cruelty at the hands of the avaricious in-laws. But such cases have to be distinguished from other cases where merely due to trivial fights and ego clashes the matrimony is facing disaster.
What is not comprehended by young minds while invoking the provisions of the likes of Section 498-A and 406 of IPC is that these provisions to a large extent have done incalculable harm in breaking matrimony of the couples.
Despite the western culture influencing the young minds of our country, still it has been seen that Indian families value their own age old traditions and culture, where, mutual respect, character and morals are still kept at a very high pedestal.
It has been noticed in diverse cases, where the brides and their family members in litigation find the doors of conciliation shut from the side of groom and his family members only on account of there having suffered the wrath of Police harassment first at the stage when matter is pending before crime against women cell and thereafter at the time of seeking grant of anticipatory or regular bail and then the ordeal of long drawn trial.
Daily, matters come before this court seeking bail and for quashing of FIR?s registered under Sections 498A/406 of the IPC. This court is of the view that it is essential to lay down some broad guidelines and to give directions in such matters in order to salvage and save the institution of marriage and matrimonial homes of the couples.

Guidelines:

1. Social workers/NGO
There is no iota of doubt that most of the complaints are filed in the heat of the moment over trifling fights and ego clashes. It is also a matter of common knowledge that in their tussle and ongoing hostility the hapless children are the worst victims. Before a wife moves to file a complaint with the Women Cell, a lot of persuasion and conciliation is required.
(a) The Delhi Legal Service Authority, National Commission for Women, NGO?s and social worker?s working for upliftment of women should set up a desk in crime against women cell to provide them with conciliation services, so that before the State machinery is set in motion, the matter is amicably settled at that very stage. But, if ultimately even after efforts put by the social workers reconciliation seems not possible then the matter should be undertaken by the police officials of Crime against Women cell and there also, serious efforts should be made to settle the matter amicably.

2. Police Authorities:
(a) Pursuant to directions given by the Apex Court, the Commissioner of Police, Delhi vide Standing Order No. 330/2007 had already issued guidelines for arrest in the dowry cases registered under Sections 498-A/406 IPC and the said guidelines should be followed by the Delhi Police strictly and scrupulously.
(i) No case under Section 498-A/406 IPC should be registered without the prior approval of DCP/Addl. DCP.
(ii) Arrest of main accused should be made only after thorough investigation has been conducted and with the prior approval of the ACP/DCP.
(iii) Arrest of the collateral accused such as father-in-law, mother-in-law, brother-in-law or sister-in-law etc should only be made after prior approval of DCP on file.
(b) Police should also depute a well trained and a well behaved staff in all the crime against women cells especially the lady officers, all well equipped with the abilities of perseverance, persuasion, patience and forbearance.
(c) FIR in such cases should not be registered in a routine manner.
(d) The endeavor of the Police should be to scrutinize complaints very carefully and then register FIR.
(e) The FIR should be registered only against those persons against whom there are strong allegations of causing any kind of physical or mental cruelty as well as breach of trust.
(f) All possible efforts should be made, before recommending registration of any FIR, for reconciliation and in case it is found that there is no possibility of settlement, then necessary steps in the first instance be taken to ensure return of stridhan and dowry articles etc. by the accused party to the complainant.

3. Lawyers:
Lawyers also have a great responsibility in this regard.
(a) While drafting pleadings/complaints, the lawyers should not unnecessarily suggest incorporation of wild allegations, or in character assassination of any of the parties or their family members whatever the case may be.
(b) Lawyers are also to endeavour to bring about amicable settlement between the parties as they are expected to discharge sacred duty as social engineers in such cases instead of making them target for monetary considerations by multiplying their cases.

4. Courts:
Subordinate courts, be it trying civil or criminal cases concerning bail, maintenance, custody, divorce or other related matters shall in the first instance, in every case where it is possible so to do consistently with the nature and circumstances of the case, to make every endeavour to bring about reconciliation between the parties.
a) The first endeavor should be for possible reunion and restitution of the parties and as a last endeavor to bring about peaceful separation.
b) If possible extra time should be devoted to such matters to restore peace in the lives of rival parties be it by re-uniting them or even in case of their parting ways.
c) Conciliatory proceedings by the court should preferably be held in camera to avoid embarrassment.
d) Wherever, the courts are overburdened with the work, necessary assistance of Mediation and Conciliation cells should be sought.
Apart from above directions it would not be out of place to ask parties also to themselves adopt a conciliatory approach without intervention of any outside agency and unless there are very compelling reasons, steps for launching prosecution against any spouse or his/her in-laws be not initiated just in a huff, anger, desperation or frustration.

DASTI.

KAILASH GAMBHIR, J
August 04, 2008

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Reserved on: 14.12.2015
Pronounced on: 22.12.2015

+ CS(OS) 2011/2006

MRS. SUJATA SHARMA ….. Plaintiff
Through: Ms. Mala Goel, Adv.
versus
SHRI MANU GUPTA ….. Defendant
Through: Mr. Aslam Ahmed, Mr. B.S. Jamwal &
Mr. Puneet Singh Bindra, Advocates for defendant Nos.1 to 4
Mr. B.K. Srivastava, Mr. Dinesh Kumar &
Mr. Roopak Gaur, Advocates for defendant Nos.10 & 11.
CORAM: HON’BLE MR. JUSTICE NAJMI WAZIRI

NAJMI WAZIRI, J.

1. The issue which is to be decided in this case is whether the plaintiff, being the first born amongst the co-parceners of the HUF property, would by virtue of her birth, be entitled to be its Karta. Her claim is opposed by defendants Nos. 1 to 4 while the defendants Nos. 5 to 9 have given their „no objection‟ to it and their „NOC‟ has been filed along with the plaint. Therefore, defendant Nos. 5 to 9 are virtually plaintiffs. Defendants No. 10 and 1 1 state that their position is to be determined as per law. Ms. Mala Goel, the learned counsel for the plaintiff, submits that the parties to the suit are the co-parceners of the D.R.Gupta & Sons, HUF.

2. The suit property comprises residential property at 4, University Road, Delhi-110007 and some movable properties and shares such as (i) Shares of Motor and General Finance Ltd.; (ii) Deposits with Motor and General Finance Ltd.; (iii) Bank of Account in Bank of India, Asaf Ali Road; and (iv) Bank Account in Vijaya Bank, Ansari Road.

3. To determine the lis in this case, the following issues were framed vide order dated 15.09.2008:
1. Whether the suit has been valued properly and proper court fee has been paid thereon? (OPP)
2. Whether the suit for declaration, is maintainable in its present form? (OPP)
3. Whether there exists any coparcenary property or HUF at all?(OPP)
4. Whether the plaintiff is a member of D.R. Gupta and Sons HUF? And if so, to what effect? (OPP)
5. Whether the interest of the plaintiff separated upon the demise of her father Sh. K.M. Gupta in 1984? (OPD)
6. Assuming existence of a D.R. Gupta and Sons HUF, whether the plaintiff can be considered to be an integral part of the HUF, particularly after her marriage in 1977, and whether the plaintiff has ever participated in the affairs of the HUF as a coparcener, and its effect? (OPP)
7. Assuming existence of D.R. Gupta and Sons HUF, whether the plaintiff is a coparcener of and legally entitled to be the Karta?(OPP)
8. What is the effect of the amendment in the Hindu Succession Act, in 2005 and has it made any changes in the concept of Joint Family or its properties in the law of coparcenary? (OPP)
9. Relief.

4. Issue 1
This issue was decided in favour of defendant Nos. 1 to 4 by this Court, which was subsequently set aside in Appeal No.293/2010 on 17.01.2013, therefore, this issue stands settled in favour of the plaintiff.

5. Issues No. 2, 3, 4 and 7.
Ms. Mala Goel, the learned counsel for the plaintiff submits that pursuant to the Hindu Succession (Amendment) Act, 2005 (hereinafter referred to as the „amended Act‟) which amended the Hindu Succession Act, 1956, all rights which were available to a Hindu male are now also available to a Hindu female. She submits that a daughter is now recognised as a co-parcener by birth in her own right and has the same rights in the co-parcenary property that are given to a son. She relies upon Section 6 of the Hindu Succession Act, 1956 which reads as under:

“6. Devolution of interest in coparcenary property. —
(1) On and from the commencement of the Hindu Succession (Amendment) Act, 2005*, in a Joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,—
(a) by birth become a coparcener in her own right in the same manner as the son;
(b) have the same rights in the coparcenary property as she would have had if she had been a son;
(c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener:
Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.

(2) Any property to which a female Hindu becomes entitled by virtue of sub-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act or any other law for the time being in force in, as property capable of being disposed of by her by testamentary disposition.

(3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005*, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,—
(a) the daughter is allotted the same share as is allotted to a son;
(b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre-deceased son or of such pre-deceased daughter; and
(c) the share of the pre-deceased child of a predeceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceased daughter, as the case may be.
Explanation. —For the purposes of this sub-section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
(4) After the commencement of the Hindu Succession (Amendment) Act, 2005*, no court shall recognise any right to proceed against a son, grandson or greatgrandson for the recovery of any debt due from his father, grandfather or great-grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt:
Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005*, nothing contained in this subsection shall affect—
(a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or
(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.
Explanation. —For the purposes of clause (a), the expression “son”, “grandson” or “great-grandson” shall be deemed to refer to the son, grandson or greatgrandson, as the case may be, who was born or adopted prior to the commencement of the Hindu Succession (Amendment) Act, 2005*.
(5) Nothing contained in this section shall apply to a partition, which has been effected before the 20th day of December, 2004.
Explanation. —For the purposes of this section “partition” means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court.”

6. She also relies upon the dicta of the Supreme Court in Tribhovan Das Haribhai Tamboli v. Gujarat Revenue Tribunal and Ors. AIR 1991 SC 1538 which held that the senior most member in a HUF would become the Karta. The relevant portion of the above judgment is reproduced hereinunder:
“The managership of the Joint Family Property goes to a person by birth and is regulated by seniority and the Karta or the Manager occupies a position superior to that of the other members. A junior member cannot, therefore, deal with the joint family property as Manager so long as the Karta is available except where the Karta relinquishes his right expressly or by necessary implication or in the absence of the Manager in exceptional and extra-ordinary circumstances such as distress or calamity effecting the whole family and for supporting the family or in the absence of the father whose whereabouts were not known or who was away in remote place due to compelling circumstances and that is return within the reasonable time was unlikely or not anticipated.”

Ms. Mala Goel further relies upon the case of Ram Belas Singh vs. Uttamraj Singh and Ors. AIR 2008 Patna 8, which held as under. This judgment deals with Section 6B of the Act:

“9. The suit out of which this civil revision has arisen had been filed in the year 2006 much after coming into force of the Hindu Succession (Amendment) Act, 2005 (Act XXXIX of 2005) which substituted Section 6 of the Act and provided that in a joint Hindu family governed by Mitakshara law the daughter of a coparcener shall by birth become a coparcener in her own right in the same manner as the son and will have the same rights in the coparcenary property as she would have if she had been a son and shall also be subject to the same liabilities in respect of the said coparcenary property as that of a son and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener. In the said circumstances, the law is made very clear that the term “Hindu Mitakshara coparcener” used in the original Hindu Law shall now include daughter of a coparcener also giving her the same rights and liabilities by birth as those of the son.”

7. The learned counsel for the plaintiff further submits that there is clear admission by the defendant No. 1 of the existence of the aforesaid HUF insofar as the said defendant, Manu Gupta, had written the letter dated 3.10.2006 (Ex.P-3) to the Military authorities/Mukul Gupta/defendant No.6 as Karta of the said HUF. This letter was written ascertaining his right as the Karta of the HUF by virtue of being the eldest living male member of the HUF; indeed, the said letter refers to the aforesaid HUF four times over. Similarly, identical letters have been written on 08.09.2006 (Ex. P-4) to defendant No. 9, viz. Shri Bharat Gupta. The learned counsel also refers to Ex. PW3/C which is an extract from a note sheet. No. 36, Clause 2 whereof reads as under:
“(i) After perusing the record available in the file it reveals that Bungalow No.4, University Road Kingsway Camp, Delhi admeasuring an area of 25750 Sq. yards or 5.32 acres was held on Lease in Form „B‟ Cantt Court 1899 in Perpetuity dated 25.07.1906 duly registered as number 2239 Book No. 1 Vol. No. 615 on pages 8 to 54 dated 31.08.1906 on payment of an annual rent of Rs.12/- in favour of Sh. D.R. Gupta, who died on 01.10.71.
(ii) The subject property has also been declared in the name of HUF and mutated in favour of the Legal Heirs of Late Sh. D.R. Gupta namely (1) Sh. Kishan Mohan (2) Shri Mohinder Nath Gupta (3) Shri Jatinder Nath Gujpta (4) Shri Ravinder Nath Gupta and (5) Sh. Bhupinder Nath Gupta.
(iii) The above named individuals have also been declared as joint owners of the Lease hold rights of the subject property. Shri Kishan Mohan Gupta died on 17- 2-1984 and names of his Legal Heirs have been substituted in the names of his Legal Heirs have been substituted in the record of this office.

In his deposition on 18.07.2013, PW-3, one Mr. N.V. Satyanarayan, Defence Estate Officer, Delhi Circle, has admitted that the mutation of Bungalow No. 4, University Road, Delhi had been done in the name of Shri R.N. Gupta (Karta); that it is borne out from the summoned record, i.e., a copy of the letter dated 01.06.85, addressed to Mrs. Shanta K. Mohan, w/o Late Sh. Kishan Mohan, 18, Anand Lok, New Delhi regarding mutation in the name of successor of Late Sh. Kishan Mohan, Karta (JHUF) in respect of 4, University Road, Delhi and letter dated 5.8.2003 from his office addressed to Sh. R.N. Gupta (Karta) & others, 4, University Road, Delhi on the subject “Mutation of Bungalow No.4, University Road, Delhi in the name of Legal Heirs.” In this letter, it was contended that Mr. R.N. Gupta was the sole surviving son of Mr. D.R. Gupta and that he was thus the Karta of the said JHUF.

8. It is not in dispute between the parties that the plaintiff is the eldest surviving member of the HUF. Accordingly, she seeks a decree in terms of the relief sought in the suit.

9. The learned counsel for the plaintiff relies upon the case of Raghunath Rai Bareja and Another vs. Punjab National Bank and Others (2207) 2 SCC 230 which held that, under the Dayabhaga School of Law, an unborn son cannot have a right in the property because the said son cannot perform Shradha whereas, under the Mitakshara School of Law, an unborn son in the womb of his mother gets a share in the ancestral property. The rights of an unborn son in the mother‟s womb under the Dayabhaga School of Law are premised on the ability of the child to offer a rice ball or to conduct such necessary rituals for the benefit of the departed souls of his ancestors. Under the Mitakshara School of Law, emphasis is on the right of inheritance of the child and therefore, it rests upon consanguinity rather on upon the inheritance efficacy. It is contended that Section 6 of the Hindu Succession Act extends this element of consanguinity to female coparceners of a HUF under the Mitakshara School of Law to all aspects of inheritance, which would include the right to manage a ritual or property as its Karta, being the eldest of the coparceners. She submits that by virtue of the family settlement dated 01.04.1999 (Ex. PW1/5), the rights of the parties, then existing, were settled. It was agreed that:

“2. The parties hereto confirm and declare that the oral family settlement dated 18.01.1999 was arrived at on the following terms:
2.1 The parties acknowledge and confirmed that the parties hereto are the members of the Hindu Undivided family D.R. Gupta and Sons (HUF) and each having share in the movable and immovable properties presently owned by the Hindu Undivided Family as under:
(a)Shri Krishan Mohan Gupta (The eldest son of late Shri D.R. Gupta who died on 17th Feb., 1984) and is survived by his wife Smt. Shanta K. Mohan And Mrs. Sujata Sharma & Mrs. Radhika Seth, daughter, heirs to the party of the “First part” – 1/5th share.
(b) Shri Mahendra Nath Gupta as Karta (party of the “Second part ) – 1/5th share
(c) Mr. Ravinder Nath Gupta (party of the Third part) – 1/5th share
(d) Shri Bhupinder Nath Gupta (party of the “Fourth) – 1/5th Share
(e) Mr. Jitender Nath Gupta (party of the “Fifth part”) – 1/5th share

2.2 The parties acknowledge and confirm that the Hindu Undivided family owns and possesses the following movable and immovable properties.
(a) Bunglow No.4, Universtiy Road, Delhi.
(b) Share of Motor and General Finance Ltd. (4308 shares)
(c) Bank account of Hindu Undivided family D.R. Gupta & Sons (HUF) with Bank of India, Asaf Ali Road, New Delhi.
(d) Bank account with Vijiya Bank, Ansari Raod, New Delhi.
(e) Deposit with the Motor & General Finance Ltd. of Rs.6,400/- plus accumulated interest thereon.

2.3 The parties effected partition of Hindu Undivided family D.R. Gupta & Sons (HUF) and that the parties being the member of the said Hindu Undivided family were entitled to and were owners of the movable and immovable properties of the said Hindu Undivided family mentioned in para 2.2 above to the extent as under:
a) Shri Krishan Mohan Gupta (The eldest son of late Shri D.R. Gupta, who died on 17th Feb. 1983) and is survived by his wife Smt. Shanta K Mohan and Mrs. Sujata Sharma & Mrs. Radhika Seth, daughter, heirs to the party of the “First part”. 1/5th share
b) Shri Mahendra Nath Gupta (as karta of the “Second party”) 1/5th share
c) Mr. Ravinder Nath Gupta (Party of the “Third part”) 1/5th share
d) Mr. Bhupinder Nath Gupta (Party of the “Fourth Part”) 1/5th share
e) Mr. Jitender Nath Gupta (Party of the “Fifth part”) 1/5th share

3. The Parties acknowledges that the party of the second, third, fourth, part are presently residing in the Hindu Undivided family property No. 4, University Road, Delhi and that they shall continue to reside therein till any three parties herein jointly decide and convey their intention to the other parties herein that the said property No. 4 University Road, Delhi be put to sale/development then the said property shall be put up for sale/development immediately by all the parties. Party of the second, third and fourth part within six months thereof and thereafter will vacate the said property.

4. Sale or development of the said property would be taken up only if the total consideration is equal to or in excess of Rs. 20 Crores. It was further agreed that out of the total consideration received, first one crore would be away at 1/3rd each to the 3 parties two, three and four who are residing on the premises towards relocation expenses and the balance consideration then would be divided in five equal parts.

It was further agreed that under the said family oral family settlement, in the event the parties of the second, third and fourth part are desirous of purchasing the said property, either singly or jointly then the market value of the said property shall be determined and the parties desirous of purchasing would be pay all the other parties who are selling their share the value of their share as determined by the market price of the said property. In case the purchase is made by any one or two of the parties of the second, third & fourth part then the parties/party out of the 2nd, 3rd and 4th parties who are not the purchaser and are being asked to vacate the premises occupied by them would be paid their share of the relocation expenses as described in earlier in clause 4 of the agreement.

It was further under the said oral family settlement that till such time that the permission of (sic.) competent authority to subdivide or to construct the said property is received the two families who are not in occupation of the said property would not demand demarcation or setting aside of their share in the property. However, once the permission to construct and subdivide is received then it would be their right to demand demarcation and possession of their share in the said property. In case on demarcation if anyh one(sic) or two or all out of the 2nd, 3rd and 4th parties move out of their present constructed portion that they are occupying, then the affected party/parties would be paid relocation expenses as described earlier in Clause 4 of the agreement. In such event, the parties 2, 3 & 4 will be aloowed a minimum, period of six months to vacate the respective premises.”

10. The plaintiff is the daughter of Kishan Mohan Gupta, who is one of the acknowledged coparceners of the said HUF and was thus a party. She had signed the settlement as a member of the family and her signatures would have to be read as one of the parties. Her signatures would testify that she has a share in the property otherwise her signature would not be necessary.
11. Ms. Goel, the learned counsel, further submits that the share of a Karta is restricted by restraints placed upon the Karta inasmuch as no rights can be created nor can the property be appropriated to the detriment and exclusion of any of the co-parceners.
12. In the circumstances, issue Nos.2, 3, 4 and 7 are answered in the affirmative in favour of the plaintiff.

12. On behalf of defendant Nos. 10 and 11, the learned counsel, Mr. B. K. Srivastava, submits in support of the plaintiffs claim, that the stipulation in Section 6(1) of the Hindu Succession Act,1946, which devolves interest in co-parcenary right, is clear and unambiguous and does not call for any interpretation; that any reference to Hindu Mitakshara Law would be deemed to include a daughter with equal rights in the coparcenary, no other view regarding succession is permissible in view of the overriding effect as per Section 4. For literal rule of interpretation, he relies upon the dicta of the Supreme Court in Raghunath Rai Bareja and Another vs. Punjab National Bank and Others (2007) 2 SCC 230.

“40. It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is the literal rule of interpretation. The other rules of interpretation e.g. the mischief rule, purposive interpretation etc. can only be resorted to when the plain words of a statute are ambiguous or lead to no intelligible results or if read literally would nullify the very object of the statute. Where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule, vide Swedish Match AB vs. Securities and Exchange Board, India, AIR2004 SC 4219. As held in Prakash Nath Khanna vs. C.I.T. 2004 (9) SCC 686, the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result, vide Delhi Financial Corporation vs. Rajiv Anand 2004 (11) SCC 625. Where the legislative intent is clear from the language, the Court should give effect to it, vide Government of Andhra Pradesh vs. Road Rollers Owners Welfare Association 2004(6) SCC 210, and the Court should not seek to amend the law in the grab of interpretation.”

13. The learned counsel further relies upon Ganduri Koteshwar Ramma & Anr. v. Chakiri Yanadi & Anr., (2011) 9 SCC 788 which, in the context of Section 6 of the Hindu Succession Act, held that rights in the coparcenary property among male and female members of a joint Hindu family are equal on and from 9.9.2005. He submits that the legislature has now conferred a substantive right in favour of the daughters; that by Section 6, the daughter of the co-parcenar shall have same rights and liabilities in the co-parcenary property as she would if she had been a son; thus, on and from 9.9.2005, the daughter is entitled to a share in the HUF property and is a co-parcenar as if she had been a son. The Supreme Court relied upon its own judgment in S.Sai Reddy v. S. Narayana Reddy and Ors. (1991) 3 SCC 647 which held that the Hindu Succession Act was a beneficial legislation and had been placed on the statute book with the objective of benefitting a woman‟s vulnerable position in society. Hence, the statute was to be given a literal effect. It is, however, required to be noted that the Court was then considering Section 29(a) of the Act and not Section 6.

14. The learned counsel for the defendant further submits that it is necessary to take into consideration Section 29(a) of Hindu Succession (Andhra Pradesh Amendment) Act, 1986 which is para materia to Section 6 of the Hindu Succession Act,1956. Therefore, the principle laid down in S.Sai Reddy v. S. Narayana Reddy and Ors. (supra) which is referred to in Ganduri Koteshwar Ramma & Anr. v. Chakiri Yanadi & Anr. (supra) ought to be followed. Ergo, the right of the eldest male member of a coparcenary extends to the female members also. In the present case insofar as the plaintiff is the eldest member of the co-parcenary, her being a female cannot be seen a disqualification from being its Karta since this disqualification has been removed by the amendment brought about under Section 6 in the year 2005. It is further submitted that this Court in Sukhbir Singh vs Gaindo Devi, RFA(OS)30/1974 (CM Application 2730/2014) has held that Section 4 of the Hindu Succession Act,1956 overrides all customs, texts, etc. to the extent that they provide anything contrary to what is contained in the Act.

15. However, the learned counsel for defendant Nos. 1 to 4 submits that section 4 has to be read in the context in which it was enacted, i.e. only those customary rights have been overridden for which there is a specific provision made in the Act; that Section 6 does not specifically refer to the expression Karta of an HUF and that this right has to be gleamed from the text in Hindu law. He also relied upon para 13 of the judgment in Tribhovan Das Haribhai Tamboli v. Gujarat Revenue Tribunal and Ors. (supra) which reads as under:

“13. In Raghavachariar’s Hindu Law Principles and Precedents, Eighth Ed., 1987 in Section 275 at p. 239 stated thus: So long as the joint family remains undivided, the senior member of the family is entitled to manage the family properties, and the father, and in his absence, the next seniormost male member of the family, as its manager provided he is not incapacitated from acting as such by illness or other sufficient cause. The father’s right to be the manager of the family is a survival of the patria potestas and he is in all cases, naturally, and in the case of minor sons necessarily the manager of the joint family property. In the absence of the father, or if he resigns, the management of the family property devolves upon the eldest male member of the family provided he is not wanting in the necessary capacity to manage it.”

16. He submits that the S. Sai Reddy judgment only recognizes the right of the eldest male member to be the Karta; that the amendment in 2005 only recognized the rights of a female member to equal those of male members but it did not extend to granting them any right in the management of HUF property; that the Hindu Succession Act,1956 only deals with succession to the intestate properties of a Hindu and does not purport to address the issue of the management of the estate.

17. The learned counsel for the defendant Nos.1 to 4 further refers to paras 8 & 9 of the written statement regarding the powers and functions of a Karta which are of wide amplitude. Finally, he submits that the limitation apropos customs under Section 4 is not comprehensive. He submits that Section 6 defines the rights only with respect to the inheritance of property and not its management; therefore, the undefined rights will have to be gleaned from customs as well as from the interpretation of ancient texts regarding Hindu religion. He submits that insofar as the right of management has not been specifically conferred on a female Hindu, the customary practice would have to be examined. In support of his contention, the learned counsel relies upon the judgement of the Supreme Court in Badshah v. Urmila Badshah Godse & Anr. (2014) 1 SCC 188, more particularly paras 13, 14, 16, 20 & 22. He also contends that the legislations regarding succession between Hindus were enacted for the purpose of removing obstacles and enabling inheritance of property by people with mental disabilities or injuries. Hence, the following enactments were made:-
1. Hindu Inheritance Act, 1928
2. Hindu Law of Act, 1929
3. Hindu Amendment Right to Property Act, 1937

19. The learned counsel submits that even the Hindu Succession Act of 1956 has sought to remove the obstacles in the succession of intestate properties between the Hindus. He submits that in accordance with the Objective of the Act, Section 24 was regarding inheritance of a remarried widow (which has since been repealed), while Section 14 empowers a female Hindu to have an absolute right in property possessed by her before or after the commencement of the said Act; therefore, that the Act never intended to extend the right of a female coparcenor to the management of a HUF which, according to ancient Hindu text, vests in the eldest male member of the coparcenary.

20. The learned counsel for defendant Nos. 10 and 11 promptly rebuts this contention by referring to the objects and reasons of the Hindu Succession Act, 2005 which reads inter alia:-
“2. Section 6 of the Act deals with devolution of interest of a male Hindu in coparcenary property and recognises the rule of devolution by survivorship among the members of the coparcener. The retention of the Mitakshara coparcenary property without including the females in it means that the females cannot inherit in ancestral property as their male counterparts do. The law by excluding the daughter from participating in the coparcenary ownership not only contributes to her discrimination on the ground of gender but also has led to oppression and negation of her fundamental right of equality guaranteed by the Constitution having regard to the need to render social justice to women, the States of Andhra Pradesh Tamil Nadu, Karnataka and Maharashtra have made necessary changes in the law giving equal right to daughters in Hindi Mitakshara coparcenary property. The Kerala Legislature has enacted the Kerala Joint Hindu Family System (Abolition) Act, 1976.
3. It is proposed to remove the discrimination as contained in section 6 of the Hindu Succession act, 1956 by giving equal rights to daughters in the Hindu Mitakashara coparcenary property as the sons have. Section 23 of the Act disentitles a female heir to ask for partition in respect of a dwelling house wholly occupied by a joint family until the male heirs choose to divide their respective shares therein. It is also proposed to omit the said section so as to remove the disability on female heirs contained in that section.” 21. He also submits that there is a positive constitutional protection in favour of the women under Articles 14, 15 and 16 as well as in the Directive Principles for the State Policy. The effect of deletion of sub-Section 2 Section 4 of the unamended Act has been enunciated in a judgment of this court in Nirmala & Ors. v. Government of NCT of Delhi & Ors., ILR(2010)Supp.(1) Delhi413 para 13 of which reads as under:
13. The relevant sections of the HSA are reproduced hereunder:
Old Section 6 before substitution by the Amendment Act: 6. Devolution of interest of coparcenary property.- When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act:
PROVIDED that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship.
Explanation I: For the purposes of this section, the interest of Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
Explanation 2: Nothing contained in the proviso to this section shall be construed as enabling a person who has separated himself from the coparcenary before the death of the deceased or any of his heirs to claim on intestacy a share in the interest referred to therein.” New Section 6after the Amendment Act:

6. Devolution of interest in coparcenary property.-(1) On and from the commencement of the Hindu Succession (Amendment) Act, 2005, in a Joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,-
(a) by birth become a coparcener in her own right in the same manner as the son;
(b) have the same rights in the coparcenary property as she would have had if she had been a son;
(c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener:
Provided that nothing contained in this Sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.
(2) Any property to which a female Hindu becomes entitled by virtue of Sub-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act, or any other law for the time being in force, as property capable of being disposed of by her by testamentary disposition.
(3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,-
(a) the daughter is allotted the same share as is allotted to a son;
(b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre -deceased son or of such pre-deceased daughter; and
(c) the share of the pre-deceased child of a pre-deceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceased daughter, as the case may be. Explanation.- For the purposes of this subsection, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
(4) After the commencement of the Hindu Succession (Amendment) Act, 2005, no court shall recognise any right to proceed against a son, grandson or great-grandson for the recovery of any debt due from his father, grandfather or greatgrandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt:
Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005, nothing contained in this Sub-section shall affect-
(a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or
(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.
Explanation.-For the purposes of Clause (a), the expression “son”, “grandson” or “great-grandson” shall be deemed to refer to the son, grandson or great-grandson, as the case may be, who was born or adopted prior to the commencement of the Hindu Succession (Amendment) Act, 2005.
(5) Nothing contained in this section shall apply to a partition, which has been effected before the 20th day of December, 2004. Explanation.-For the purposes of this section “partition” means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court. Sections 8 and 9:
8. General rules of succession in the case of males. – The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter-
(a) firstly, upon the heirs, being the relatives specified in class I of the Schedule;
(b) secondly, if there is no heir of class I, then upon the heirs, being the relatives specified in class II of the Schedule;
(c) thirdly, if there is no heir of any of two classes, then upon the agnates of the deceased; and (d) lastly , if there is no agnate, then upon the cognates of the deceased.
9. Order of succession among heirs in the Schedule. -Among the heirs specified in the Schedule, those in class I shall take simultaneously and to the exclusion of all other heirs; those in the first entry in class II shall be preferred to those in the second entry; those in the second entry shall be preferred to those in the third entry; and so on in succession. Ms. Mala Goel, the learned counsel for plaintiff refers to the same locus classicus by Mulla on principles of Hindu laws which states as under:

“By virtue of the new provision, a daughter of a coparcener in a joint Hindu family governed by the Mitakshara law now becomes a coparcener in her own right and thus enjoys rights equal to those hitherto enjoyed by a son of a coparcener. The implications of this fundamental change are wide. Since a daughter now stands on an equal footing with a son of a coparcener, she is now invested with all the rights, including the right to seek partition of the coparcenary property. Where under the old law, since a female could not act as karta of the joint family, as a result of the new provision, she could also become karta of the joint Hindu family”

22. The learned counsel for the plaintiff further relies upon the 174th Report of the Law Commission of India, which has argued that when women are equal in all respects of modern day life, there is no reason why they should be deprived of the right and privilege of managing HUF as their Karta. She argues that it is in this context, that Section 6 was so formulated that it covers all aspects of succession to a coparcener which are available to a male member to be equally available to a female member also.

23. Insofar as the plaintiff father had passed away prior to the aforesaid amendment and there being no testamentary succession in her favour she would not have any rights into the co-parcenary. Upon the query put to counsel he submits that if the survivor of Mr. Krishan Mohan Gupta had been male then he would have rights in the co-parcenary.

24. In the present case, the right of the plaintiff accrued to her upon the demise of the eldest Karta. Indeed, there is a correspondence in this regard between her and the Land and Building Department. In any case, it is not denied that she is the eldest of the co-parceners. By law, the eldest coparcener is to be karta of the HUF.

25. It is rather an odd proposition that while females would have equal rights of inheritance in an HUF property, this right could nonetheless be curtailed when it comes to the management of the same. The clear language of Section 6 of the Hindu Succession Act does not stipulate any such restriction. Therefore, the submissions on behalf of defendant Nos. 1 to 4 which are to the contrary are untenable.

26. In the case of Commissioner of Income Tax, Madhya Pradesh, Nagpur and Bhandara vs. Seth Govindram Sugar Mills, AIR 1966 SC24 the Supreme Court had held that: “The decision of the Orissa High Court in Budhi Jena v. Dhobai Naik followed the decision of the Madras High Court in V.M.N. Radha Ammal v. Commissioner of Income-tax, wherein Satyanarayana Rao J. observed :
“The right to become a manager depends upon the fundamental fact that the person on whom the right devolved was a coparcener of the joint family… Further, the right is confined to the male members of the family as the female members were not treated as coparceners though they may be members of the joint family.”
17. Viswanatha Sastri J. said :
“The managership of a joint Hindu family is a creature of law and in certain circumstances, could be created by an agreement among the coparceners of the joint family. Coparcenership is a necessary qualification for managership of a joint Hindu family.”
18. Thereafter, the learned judge proceeded to state : It will be revolutionary of all accepted principles of Hindu law to suppose that the senior most female member of a joint Hindu family, even though she has adult sons who are entitled as coparceners to the absolute ownership of the property, could be the manager of the family… She would be guardian of her minor sons till the eldest of them attains majority but she would not be the manager of the joint family for she is not a coparcener.
19. The view expressed by the Madras high Court in accordance with well settled principles of Hindu law., while that expressed by the Nagpur High Court is in direct conflict with them. We are clearly of the opinion that the Madras view is correct.”

27. What emerges from the above discussion, is that the impediment which prevented a female member of a HUF from becoming its Karta was that she did not possess the necessary qualification of co-parcenership. Section 6 of the Hindu Succession Act is a socially beneficial legislation; it gives equal rights of inheritance to Hindu males and females. Its objective is to recognise the rights of female Hindus as co-parceners and to enhance their right to equality apropos succession. Therefore, Courts would be extremely vigilant apropos any endeavour to curtail or fetter the statutory guarantee of enhancement of their rights. Now that this disqualification has been removed by the 2005 Amendment, there is no reason why Hindu women should be denied the position of a Karta. If a male member of an HUF, by virtue of his being the first born eldest, can be a Karta, so can a female member. The Court finds no restriction in the law preventing the eldest female co-parcener of an HUF, from being its Karta. The plaintiff‟s father‟s right in the HUF did not dissipate but was inherited by her. Nor did her marriage alter the right to inherit the co-parcenary to which she succeeded after her father‟s demise in terms of Section 6. The said provision only emphasises the statutory rights of females. Accordingly, issues 5, 6 and 8 too are found in favour of the plaintiff.

29. In these circumstances, the suit is decreed in favour of the plaintiff in terms of the prayer clause, and she is declared the Karta of „D.R. Gupta & Sons (HUF)‟.

30. Decree sheet be drawn up accordingly.

31. The suit is disposed off in the above terms.

NAJMI WAZIRI, J

DECEMBER 22, 2015

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+ LPA No.220 of 2002
CENTRE FOR POLICY RESEARCH …APPELLANT
Through: Mr. R.K.P. Shankardas, Sr. Advocate with Mr. P. Nagesh & Mr. Anand Mishra, Advocates.
Versus
BRAHMA CHELLANEY & ORS. …RESPONDENTS
Through: Mr. Akhil Sibal, Mr. Salim Inamdar, Ms. Aeshna Singh & Ms. Mihira Sood, Advs. for Respondent No.1.

+ LPA No.313 of 2002
V.A. PAI PANANDIKER …APPELLANT
Through: Mr. Amarjit Singh Bedi, Advocate.
Versus
BRAHMA CHELLANEY & ORS. …RESPONDENTS
Through: Mr. Akhil Sibal, Mr. Salim Inamdar, Ms. Aeshna Singh & Ms. Mihira Sood, Advs. for Respondent No.1.

CORAM:
HON’BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE MOOL CHAND GARG

1. Whether the Reporters of local papers may be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes

SANJAY KISHAN KAUL, J.
1. Persons of eminence in their field are also not above personal prejudices and petty squabbles. The present litigation is a consequence of such an approach.

2. The Centre for Policy Research (for short „Centre‟), appellant herein, was set up as a Society registered under the Societies Registration Act, 1860 with the objective of planning, promoting and providing for education and training in policy planning and management areas. The Memorandum of Association inter alia provides for holding seminars and conferences, conducting research, promoting education and development of personnel with the objective of maximization of the national resources. The Memorandum is widely worded and the Society was set up with the blessings of late Shri T.A. Pai, then a Union Minister with eminent people involved in it. Dr. V.A. Pai Panandiker, the appellant in LPA No.313/2002 was a Member Secretary. Dr. Brahma Chellaney, respondent No.1 also came to be associated with this organization, who is also one of the eminent persons of his field. The Centre was granted lease of land by the Government of India at institutional rates to construct its campus building in 1978-79 after it was originally set up in 1972 and the new campus started functioning from March, 1980. Respondent No.1 was appointed as a Research Professor on 23.6.1993 and a fresh letter of appointment was issued on 1.4.2000 increasing the remuneration with retrospective effect. The services of respondent No.1 were, however, terminated on 16.8.2000 giving three (3) months‟ salary in lieu of such termination. Aggrieved by this action, respondent No.1 filed WP (C) No.5928/2000 in this Court along with an interlocutory application praying for interim stay. The learned single Judge in terms of order dated 15.11.2000 granted stay of termination. In the mean time, Dr. V.A. Pai Panandiker resigned on 2.9.2000 though the decision on that resignation was deferred by the Governing Body of the Centre. The Union of India preferred an appeal against the interlocutory order but the same was dismissed as withdrawn in view of the writ petition, which was pending. The writ petition came to be decided by the learned single Judge of this Court on 18.1.2002. The writ of respondent No.1 was allowed with costs of Rs.10,000.00 against Dr. V.A. Pai Panandiker.

3. The Centre preferred a Letters Patent Appeal which is before us and Dr. V.A. Pai Panandiker also filed an appeal on similar grounds, apart from raising the issue of imposition of costs personally on him. Along with the appeal an application for interim stay was also filed but the same was dismissed as not pressed.

4. The Centre decided to accept the decision of the learned single Judge insofar as the quashing of the termination of services of respondent No.1 is concerned but constituted an Inquiry Committee to look into the conduct of respondent No.1. On the basis of the recommendations of the Inquiry Committee action was sought to be taken against respondent No.1 which was challenged by respondent No.1 in WP (C) No.4542/2002. The said writ is still pending and interim orders in favour of respondent No.1 were granted.

5. The result of all this is that the impugned action of termination against respondent No.1 which resulted in the orders of the learned single Judge which is now sought to be impugned in the present appeals does not stand and has been accepted by the appellant Centre. The appellant Centre is, however, aggrieved by certain conclusions drawn by the learned single Judge in respect of the nature of entity which the Centre is and that is the reason learned counsel for the appellant refused to give up the appeal stating that though the original cause of action may have been extinguished, the appellant Centre has a right to agitate the appeal on the question of law decided by the impugned judgement. We may notice that an endeavour was made to work out an amicable solution but the same proved to be futile.

6. In the impugned judgement the learned single Judge has made certain observations about the Centre being a „state‟ within the meaning of the expression “other authority” under Article 12 of the Constitution of India which raises certain doubts. Learned counsel for respondent No.1 fairly stated, and it was recorded in the order dated 27.8.2008 read with the order dated 18.11.2008 that he was not pressing that issue or the claim that the Centre is an authority covered within the ambit of Article 12 of the Constitution of India and could not support the observations in the impugned judgement in that behalf. It was, thus, agreed that to that extent the observations in the impugned judgement are unsustainable and are accordingly set aside.

7. However, the question which was sought to be agitated, and over which elaborate arguments have been addressed by learned counsels for the parties is the amenability of the Centre to the writ jurisdiction of this Court under Article 226 of the Constitution of India under the category of “other authority”.

8. The surprising part is that this matter has been sought to be agitated despite the factual matrix not existing and in that sense a legal opinion is being invited in a vacuum. This is the direct result of the insistence of the learned counsel for the appellant that this question of law vis-a-vis the Centre needs to be adjudicated in its favour while on the other hand, learned counsel for respondent No.1 canvassed that the observations in the impugned judgement in that behalf are liable to stand. The judgements cited by learned counsels for the parties are more or less the same but it is the conclusion sought to be derived in the factual matrix of the Constitution of the Centre and its upkeep over which there is divergence.

9. Learned counsel for the appellant submitted that the issue is no more res integra in view of the observations of the Supreme Court in Binny Limited & Anr. Vs. V. Sadasivan & Ors. (2005) 6 SCC 657 as a triple test has been laid down for invocation of remedy under Article 226 of the Constitution of India:
a. The private body is discharging a public function.
b. The decision sought to be corrected or enforced must be in discharge of a public function.
c. The public duty imposed is not of a discretionary character. It has also been observed that the scope of mandamus is determined by the nature of duties to be enforced rather than the identity of the authority against whom it is sought.

10. Learned counsel submitted that the aforesaid legal principle has emerged over a period of time and there are even earlier judgements which, in fact, adopted the same legal principle. In G. Bassi Reddy Vs. International Crops Research Institute & Anr. (2003) 4 SCC 225, it was observed that the public function or public duty should be similar to or closely related to those performable by the state in its sovereign capacity and thus it was observed that the primary activity of ICRI is to conduct research and training programme in the sphere of agriculture purely on a voluntary basis and such a service voluntary undertaken could not be said to be a public duty. In Federal Bank Limited Vs. Sagar Thomas & Ors. (2003) 10 SCC 733, a writ under Article 226 of the Constitution of India was held to be maintainable against any person or authority performing public duty, owing positive obligation to the effected party. Thus, private companies carrying on business or commercial activity or banking in conformity with the Reserve Bank of India banking policy was held not sufficient to bring them within the ambit of discharge of any public function or public duty.

11. Learned counsel also emphasized that the learned single Judge has been unnecessarily influenced by the factum of land being made available by the Government of India to the Centre as a criteria for bringing it within the domain of Article 226 of the Constitution of India even though in the Division Bench of this Court in Air Vice Marshal J.S. Kumar Vs. Governing Council of Air Force Sports Complex & Anr. 126 (2006) DLT 330 (DB) it was observed that merely because the Government had provided some land to the AFSC, it would not make the AFSC a state under Article 12 of the Constitution of India.

12. A reference was also made to Rahul Mehra & Anr. Vs. Union of India 114 (2004) DLT 322 (DB) in the context of the status of the Board of Control for Cricket in India. It was held that while BCCI may be amenable to writ jurisdiction but every action of the BCCI would not be subject to judicial review but only such of the actions which fall within the ambit of public law. A body, public or private, could not be categorized as amenable or not amenable to writ jurisdiction and their function test was the correct one to test maintainability.

13. Learned senior counsel canvassed before us that in the impugned judgement the Centre has not been held as comparable to a regular educational institution to invite the ratio of Unni Krishnan J.P. & Ors. Vs. State of Andhra Pradesh & Ors. (1993) 1 SCC 645, but the factum of land being allotted at concessional rates was deemed to be a factor to prevent the Centre from claiming immunity from judicial review under Article 226 of the Constitution of India.

14. We may observe at this stage insofar as the factual dispute is concerned, the learned single Judge opined that since the appointment of respondent No.1 was made by the Governing Body, it was only a decision of the Governing Body which could terminate his services. It was found that there was lack of specific authorization on delegation of power to Dr. V.A. Pai Panandiker to take the decision of termination of services of respondent No.1.

15. Learned counsel also sought to specifically deal with the aspect of educational institutions since the stand of respondent No.1 was that the Centre was intrinsically involved in the aspect of education and was enrolling students and granting certificates in respect of the same. It was submitted that the word “Education” should be understood in the sense of systematic instruction, schooling or training given to young in preparation for the work of life and connotes the whole course of scholastic instruction which a person has received as observed in The Sole Trustee, Lok Shikshana Trust Vs. CIT, Mysore (1976) 1 SCC 254. Similarly in T.M.A. Pai Foundation Vs. State of Karnataka (2002) 8 SCC 481, it was observed in para 287 as under:
“287. Education plays a cardinal role in transforming a society into a civilised nation. It accelerates the progress of the country in every sphere of national activity. No section of the citizens can be ignored or left behind because it would hamper the progress of the country as a whole. It is the duty of the State to do all it could, to educate every section of citizens who need a helping hand in marching ahead along with others.”

16. In S. Azeez Basha Vs. Union of India AIR (1968) SC 662 the nature of educational institutions was dealt with as under:
“21. Before we do so we should like to say that the words “educational institutions” are of very wide import and would include a university also. This was not disputed on behalf of the Union of India and therefore it may be accepted that a religious minority had the right to establish a university under Article 30(1). The position with respect to the establishment of Universities before the Constitution came into force in 1950 was this. There was no law in India which prohibited any private individual or body from establishing a university and it was therefore open to a private individual or body to establish a university. There is a good deal in common between educational institutions which are not universities and those which are universities. Both teach students and both have teachers for the purpose. But what distinguishes a university from any other educational institution is that a university grants degrees of its own while other educational institutions cannot. It is this granting of degrees by a university which distinguishes it from the ordinary run of educational institutions. (See St. David’s College, Lampeter v. Ministry of Education 3). Thus in law in India there was no prohibition against establishment of universities by private individuals or bodies and if any university was so established it must of necessity be granting degrees before it could be called a university. But though such a university might be granting degrees it did not follow that the Government of the country was bound to recognise those degrees. As a matter of fact as the law stood up to the time the Constitution time into force, the Government was not bound to recognise degrees of universities established by private individuals or bodies and generally speaking the Government only recognised degrees universities established by it by law. No private individual or body could before 1950 insist that the degrees of any university established by him or it must be recognised by Government. Such recognition depended upon the will of government generally expressed through statute. The importance of the recognition of Government in matters of this kind cannot be minimised. This position continued even after the Constitution came into force. It is only in 1956 that by sub-section (1) of Section 22 of the University Grants Commission Act, (3 of 1956) it was laid down that “the right to conferring or granting degrees shall be exercised only by a University established or incorporated by or under a Central Act, a Provincial Act or a State Act or an institution deemed to be a University under Section 3 or an institution specially empowered by an Act of Parliament to confer or grant degrees”. Sub-section (2) thereof further provided that “save as provided in sub-section (1), no person or authority shall confer, or grant, or hold himself or itself as entitled to confer or grant any degree”. Section 23 further prohibited the use of the word “university” by an educational institution unless it is established by law. It was only thereafter that no private individual or body could grant a degree in India. Therefore it was possible for the Muslim minority to establish a university before the Constitution came into force, though the degrees conferred by such a university were not bound to be recognised by Government.”

17. Learned counsel also referred to the definitions of “Research” since the Centre is primarily engaged in research works. The following three definitions were referred to for the said purpose:

“From New Shorter Oxford Dictionary 1993
“1. …. 2. A search or investigation undertaken to discover facts or reach new conclusions by a critical study of a subject or by a course of scientific inquiry. 3. Systematic investigation into and study of materials, sources, etc., to establish facts, collate information, etc.; formal postgraduate study or investigation; surveying of opinions or background information relevant to a project etc.”

From The World Bank Dictionary
“1. Hunting for facts or truth about a subject; inquiry; investigation: The researches of men of science have done much to lessen disease. SYN: study. 2. Organized scientific investigation to solve problems, test hypothesis, or develop or invent new products; atomic research, cancer research.”

From Wikipedia, the Free Encyclopedia on Internet
“Research is defined as human activity based on intellectual application in the investigation of matter. The primary aim for applied research is discovering, interpreting, and the development of methods and systems for the advancement of human knowledge on a wide variety of scientific matters of our world and the universe. Research can use the scientific method, but need not do so.”

18. Insofar as the factual matrix is concerned learned counsel emphasized that the Centre is a registered Society which originally worked from a rented premises till it was made available a lease of land by the Government of India on which the Centre constructed the building. The plea advanced was that the Government had no role in its founding nor say either in the constitution of the Governing Body or election of its new members. There was no mention of Government control in its Memorandum and control of all operations vested with the Governing Body. The appointment of staff and fellows was by the Governing Body in its sole authority. The corpus is stated to be raised from variety of sources including collaborations, foreign foundations, multilateral agencies, etc. and the proportion of receipts for the Government projects is very small as compared to total receipts.

19. The grants received from ICSSR were stated to be not sufficient to cover the salaries of core faculty and staff and thus salaries were paid from the pool of resources.

20. An emphasis was laid on the fact that the Society has about 14 honorary faculty members with 21 paid faculty members and 19 supportive staff whose pay structure could be fixed by the Centre. The Centre voluntary adopted certain pay scales for some of the faculties and staff members in terms of scales of UGC.

21. Learned counsel for respondent No.1, on the other hand, emphasized certain important factual aspects which according to him should weigh in making the Centre amenable to writ jurisdiction under Article 226 of the Constitution of India especially in respect of matters of employment of faculty. These are:
i. Notification dated 27.4.1977 of Ministry of Education & Social Welfare establishing the status of the Appellant as an educational institution.
ii. The Centre is included in Schedule to the Provident Fund Act, 1925 as a „Public Institution‟.
iii. The Centre is Government aided and certified educational institution and has signed agreements with Manipal Academy of Higher Education, a Deemed University, for providing Doctoral and Post Doctoral training to students.
iv. The Centre is exempted from Income Tax under Section 10 (23C) (vi) of the Income Tax Act, 1961 as an educational institution.
v. The Centre is recognized as a Scientific and Industrial Research Organization entitling it to administrative support from the Ministry of Science & Technology and to custom/excise duty exemptions from import of equipment, spares and consumables.
vi. The allotment of land to the Centre on account of its status as an educational institution.
vii. The applicability of ICSSR grant-in-aid rules on service matters and the rules superseding the power of the Governing Body to that extent.
viii. The use of recurring Government grant-in-aid for maintenance of permanent faculty while non-recurring grant-in-aid is used for infrastructural support.
ix. The Central Government and ICSSR have oversight authority over the Centre in terms of accounts, foreign funding and representation on the Governing Board.
x. The receipt of large funds from the Government of India, State Governments and Public Sector Undertakings and Government agencies.
xi. Income of the Centre from the work done on behalf of public bodies.
xii. The large amount of fund flow is apparent even for the financial year 2006-2007 where Rs.1.58 crore was received from public sources – recurring Government grant-in-aid Rs.69.00 lakh; profit from test & examination-Rs.47.00 lakh; rent payment from National Knowledge Commission-Rs.42.00 lakh in respect of part of premises of the Centre.

22. It may be noticed that respondent No.1 has filed documents in support of each of the aforesaid aspects and thus submitted that these are not just stray allegations but substantiated by documentary proofs and if all these factors are taken into account there can be no doubt that the Centre is amenable to writ jurisdiction under Article 226 of the Constitution of India at least in respect of matters of employment of the faculty.

23. Learned counsel also referred to some other judgements to canvas his case. In K. Krishnamacharyulu & Ors. Vs. Sri Venkateswara Hindu College of Engineering & Anr. (1997) 3 SCC 571 while dealing with the issue of maintainability of writ petition under Article 226 of the Constitution of India against a private party it was observed that there was an element of public interest in respect of pay and allowances of employees of non-aided private educational institution because there is a right to education. The Supreme Court has held that where interest is created by Government in an institution to impart education, which is a fundamental right of the citizens, the teachers who impart the education, get an element of public interest in the performance of their duties. This in turn requires regulation of conditions of service of those employees at par with Government employees.

24. In N.K. Aggarwal Vs. Union of India & Ors. 137 (2007) DLT 153 (DB), KRIBHCO was held to be amenable to writ jurisdiction under Article 226 of the Constitution of India as the scope of activities was no way limited to manufacture and production of fertilizers but clearly involved community development and farmer benefit. The issue of question of Article 226 of the Constitution of India being applicable was held not in any way dependent on Article 12 of the Constitution of India. Once again, in Dr. T.C. Sharma Vs. Lieutenant Governor & Ors. 82 (1999) DLT 289 (DB) the aspect of public duty while exercising jurisdiction under Article 226 of the Constitution of India was emphasized in the context of SCERT in the context of its employees seeking parity with NCERT. A Division Bench of Karnataka High Court in Arun Narayan Vs. The State of Karnataka & Anr. AIR 1976 Karnataka 174 took a similar view while dealing with the aspect of admission to a private medical college.

25. We may notice that there have been two recent judgements of the Division Benches of this Court where the question of amenability to writ jurisdiction under Article 226 of the Constitution of India has been dealt with. In All India Lawyers Union (Delhi Unit) Vs. Government of NCT of Delhi & Ors. 163 (2009) DLT 319 (DB) it was observed in para 46 as under:

“MAINTAINABILITY OF WRIT PETITION
46. Article 226 of the Constitution of India states that every High Court has jurisdiction to issue appropriate writs to any person or authority for the enforcement of any fundamental right and for any other purpose. The expressions “any person” and “for any other purpose” have been explained and elucidated upon by the Supreme Court. The words “any person or authority” used in Article 226 are not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing the public function. In Shri Anadi Mukta Sadguru SMVSJM Smarak Trust & Ors v. V.R.Rudani & Ors., AIR 1989 SC 1607 the Court held that the law relating to mandamus has made the most spectacular advance. Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226, writs can be issued to “any person or authority”. It can be issued “for the enforcement of any of the fundamental rights and for any other purpose”. The term “authority” used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art.32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as nonfundamental rights. The words “any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of the positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied. It may be pointed out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available „to reach injustice wherever it is found‟. Technicalities should not come in the way of granting that relief under Article 226. We also quote paragraphs 20 and 21 of the judgment:
“20. In Praga Tools Corporation v. Shri C.A Imanual and Ors., (1969) 3 SCR 773 : (AIR 1969 Supreme Court 1306) , this Court said that a mandamus can issue against a person or body to carry out the duties placed on them by the Statutes even though they are not public officials or statutory body. It was observed (at 778) ; “It is however not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body, A mandamus can issue, for instance, to an official or a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities. (See Halsbury’s Laws of England (3rd Ed. Vol. II p. 52 and onwards).”

21. Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute Commenting on the development of this law, Professor De Smith states : “To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract.” (Judicial Review of administrative Act 4th Ed. p.540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available ‘to reach injustice whenever it is found’. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition.”

26. Thereafter a reference was made to the pronouncement of the Supreme Court in various matters as discussed aforesaid.

27. In Saroj Devi (Widow) Vs. Union of India & Ors. 156 (2009) DLT 429 (DB) this very Bench had an occasion to deal with the question of amenability to writ jurisdiction under Article 226 of the Constitution of India in respect of allotment of a house under Army Welfare Housing Organisation, society registered under the Societies Registration Act, 1860. We are naturally of the same view and instead of embarking on a detailed discussion consider it appropriate to reproduce our observations made in the said judgement: “Whether the writ filed by the petitioner for redressal of her grievance is maintainable under Article 226 of the Constitution of India?

The aspect of maintainability of the writ petition under Article 226 of the Constitution of India has to be considered with reference to the said Article which reads as under:
226. Power of High Courts to issue certain writs (1) Notwithstanding anything in Article 32, every High Court shall have power throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority including in appropriate cases, any Government, within those territories directions, order or writs, including (writs the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them for the enforcement of any of the rights conferred by Part III and for any other purpose.
We have unfortunately not had the benefit of reference to any case law by both the learned counsel for the parties. It is, however, necessary to examine the legal position in this behalf in order to appreciate the factual matrix.
In Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors; (1989) 2 SCC 691 the difference in the meaning of the word „authority‟ as used under Article 226 of the Constitution of India and under Article 12 of the Constitution of India has been brought out. It was observed that a writ petition under Article 226 of the Constitution of India would be maintainable even against a private body as it would fall within the definition of „any person or authority‟ performing a public duty and owing a positive obligation to the affected party. Such a duty on the person or authority need not be imposed by Statute so long as it is doing a public function having a public character. In the facts of the case, the writ petition had been filed under Article 226 of the Constitution of India by the retrenched teachers of a public aided college (a public trust) affiliated to the University seeking a writ of mandamus for compelling the college management to pay them terminal benefits and arrears of salary due. Such a petition was held to be maintainable. The maintainability of the writ petition was challenged on the ground that the respondent-entity was a registered trust under the Bombay Trust Act and thus not amenable to the writ jurisdiction of the High Court. A distinction was made between enforcing the service contract and claiming terminal benefits and arrears of salary. It would be useful to reproduce the following observations:

“15. If the rights are purely of a private character no mandamus can issue. If the management of the college is purely a private body with no public duty mandamus will not lie. These are two exceptions to Mandamus. But once these are absent and when the party has no other equally convenient remedy, mandamus cannot be denied. It has to be appreciated that the appellants-trust was managing the affiliated college to which public money is paid as Government aid. Public money paid as Government aid plays a major role in the control, maintenance and working of educational institutions. The aided institutions like Government institutions discharge public function by way of imparting education to students. They are subject to the rules and regulations of the affiliating University. Their activities are closely supervised by the University authorities. Employment in such institutions, therefore, is not devoid of any public character. (See-The Evolving Indian Administrative Law by M.P. Jain (1983) p. 266). So are the service conditions of the academic staff. When the University takes a decision regarding their pay scales, it will be binding on the management. The service conditions of the academic staff are, therefore, not purely of a private character. It has super-added protection by University decisions creating a legal right-duty relationship between the staff and the management. When there is existence of this relationship, mandamus can not be refused to the aggrieved party.

16. The Law relating to mandamus has made the most spectacular advance. It may be recalled that the remedy by prerogative writs in England started with very limited scope and suffered from many procedural disadvantages. To overcome the difficulties, Lord Gardiner (the Lord Chancellor) in pursuance of Section 3(1)(c) of the Law Commission Act, 1965, requested the Law Commission “to review the existing remedies for the judicial control of administrative acts and commissions with a view to evolving a simpler and more effective procedure.” The Law Commission made their report in March 1976 (Law Com No. 73). It was implemented by Rules of Court (Order 53) in 1977 and given statutory force in 1981 by Section 31 of the Supreme Court Act 1981. It combined all the former remedies into one proceeding called Judicial Review. Lord Denning explains the scope of this “judicial review”:

At one stroke the courts could grant whatever relief was appropriate. Not only certiorari and mandamus, but also declaration and injunction. Even damages. The procedure was much more simple and expeditious. Just a summons instead of a writ. No formal pleadings. The evidence was given by affidavit. As a rule no cross-examination, no discovery and so forth. But there were important safeguards. In particular, in order to qualify, the applicant had to get the leave of a judge.

The Statute is phrased in flexible terms, It gives scope for development. It uses the words “having regard to”. Those words are very indefinite. The result is that the courts are not bound hand and foot by the previous law. They are to ‘have regard to’ it. So the previous law as to who are-and who are not- public authorities, is not absolutely binding. Nor is the previous law as to the matters in respect of which relief may be granted. This means that the judges can develop the public law as they think best. That they have done and are doing.

17. There, however, the prerogative writ of mandamus is confined only to public authorities to compel performance of public duty. The ‘public authority’ for them mean every body which is created by statute and whose powers and duties are defined by statute. So Government Departments local authorities, police authorities and statutory undertakings and corporations, are all ‘public authorities’. But there is no such limitation for our High Courts to issue the writ ‘in the nature of mandamus’. Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226 writs can be issued to a ‘any person or authority”. It can be issued “for the enforcement of any or the fundamental rights and for any other purpose”.

20. The term “authority” used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words “Any parson or authority” used in Article 226 are. therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied,

21. …..
22. …..
14…..
15. It was observed that the scope of mandamus is determined by the nature of the duty to be enforced rather than the identity of the authority against whom it is sought though the courts always retain the discretion to withhold the remedy where it would not be in the interest of justice to grant it. It was held that a body is performing a public function when it seeks to achieve some collective benefit for the public or a section thereof and is accepted by the public or a section thereof as having authority to do so. Bodies, therefore, exercise public functions when they intervene or participate in social or economic affairs in the public interest though there cannot be any general definition of „public authority‟ or „public function‟ and the facts of each case would decide the point. Once again it would be useful to extract the relevant paragraphs:

“10. The Writ of Mandamus lies to secure the performance of a public or a statutory duty. The prerogative remedy of mandamus has long provided the normal means of enforcing the performance of public duties by public authorities. Originally, the writ of mandamus was merely an administrative order from the sovereign to subordinates. In England, in early times, it was made generally available through the Court of King’s Bench, when the Central Government had little administrative machinery of its own. Early decisions show that there was free use of the writ for the enforcement of public duties of all kinds, for instance against inferior tribunals which refused to exercise their jurisdiction or against municipal corporation which did not duly hold elections, meetings, and so forth. In modern times, the mandamus is used to enforce statutory duties of public authorities. The courts always retained the discretion to withhold the remedy where it would not be in the interest of justice to grant it. It is also to be noticed that the statutory duty imposed on the public authorities may not be of discretionary character. A distinction had always been drawn between the public duties enforceable by mandamus that are statutory and duties arising merely from contract. Contractual duties are enforceable as matters of private law by ordinary contractual remedies such as damages, injunction, specific performance and declaration. In the Administrative Law (Ninth Edition) by Sir William Wade and Christopher Forsyth, (Oxford University Press) at page 621, the following opinion is expressed:

“A distinction which needs to be clarified is that between public duties enforceable by mandamus, which are usually statutory, and duties arising merely from contract. Contractual duties are enforceable as matters of private law by the ordinary contractual remedies, such as damages, injunction, specific performance and declaration. They are not enforceable by mandamus, which in the first place is confined to public duties and secondly is not granted where there are other adequate remedies. This difference is brought out by the relief granted in cases of ultra vires. If for example a minister or a licensing authority acts contrary to the principles of natural justice, certiorari and mandamus are standard remedies. But if a trade union disciplinary committee acts in the same way, these remedies are inapplicable: the rights of its members depend upon their contract of membership, and are to be protected by declaration and injunction, which accordingly are the remedies employed in such cases.”

11. Judicial review is designed to prevent the cases of abuse of power and neglect of duty by public authorities. However, under our Constitution, Article 226 is couched in such a way that a writ of mandamus could be issued even against a private authority. However, such private authority must be discharging a public function and that the decision sought to be corrected or enforced must be in discharge of a public function. The role of the State expanded enormously and attempts have been made to create various agencies to perform the governmental functions. Several corporations and companies have also been formed by the government to run industries and to carry on trading activities. These have come to be known as Public Sector Undertakings. However, in the interpretation given to Article 12 of the Constitution, this Court took the view that many of these companies and corporations could come within the sweep of Article 12 of the Constitution. At the same time, there are private bodies also which may be discharging public functions. It is difficult to draw a line between the public functions and private functions when it is being discharged by a purely private authority. A body is performing a “public function” when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in social or economic affairs in the public interest. In a book on Judicial Review of Administrative Action (Fifth Edn.) by de Smith, Woolf & Jowell in Chapter 3 para 0.24, it is stated thus:

“A body is performing a “public function” when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in social or economic affairs in the public interest. This may happen in a wide variety of ways. For instance, a body is performing a public function when it provides “public goods” or other collective services, such as health care, education and personal social services, from funds raised by taxation. A body may perform public functions in the form of adjudicatory services (such as those of the criminal and civil courts and tribunal system). They also do so if they regulate commercial and professional activities to ensure compliance with proper standards. For all these purposes, a range of legal and administrative techniques may be deployed, including: rulemaking, adjudication (and other forms of dispute resolution); inspection; and licensing.

Public functions need not be the exclusive domain of the state. Charities, self-regulatory organizations and other nominally private institutions (such as universities, the Stock Exchange, Lloyd’s of London, churches) may in reality also perform some types of public function. As Sir John Donaldson M.R. urged, it is important for the courts to “recognize the realities of executive power” and not allow “their vision to be clouded by the subtlety and sometimes complexity of the way in which it can be exerted”. Nongovernmental bodies such as these are just as capable of abusing their powers as is government.”

12. In Regina v. Panel on Take-over and Merges, Ex parte Datafin Plc. and Anr. (1987) 1 Queen’s Bench Division 815, a question arose whether the Panel of Take-over and Mergers had acted in concert with other parties in breach of the City Code on Take-over and Mergers. The panel dismissed the complaint of the applicants. Though the Panel on Take-over and Mergers was purely a private body, the Court of Appeal held that the supervisory jurisdiction of the High Court was adaptable and could be extended to any body which performed or operated as an integral part of a system which performed public law duties, which was supported by public law sanctions and which was under an obligation to act judicially, but whose source of power was not simply the consent of those over whom it exercised that power; that although the panel purported to be part of a system of self-regulation and to derive its powers solely from the consent of those whom its decisions affected, it was in fact operating as an integral part of a governmental framework for the regulation of financial activity in the City of London, was supported by a periphery of statutory powers and penalties, and was under a duty in exercising what amounted to public powers to act judicially; that, therefore, the court had jurisdiction to review the panel’s decision to dismiss the applicants’complaint; but that since, on the facts, there were no grounds for interfering with the panel’s decision, the court would decline to intervene.

13. Lloyd L.J., agreeing with the opinion expressed by Sir John Donaldson M.R. held :
“I do not agree that the source of the power is the sole test whether a body is subject to judicial review, nor do I so read Lord Diplock’s speech. Of course the source of the power will often, perhaps usually, be decisive. If the source of power is a statute, or subordinate legislation under a statute, then clearly the body in question will be subject to judicial review. If at the end of the scale, the source of power is contractual, as in the case of private arbitration, then clearly the arbitrator is not subject to judicial review.”

14. In that decision, they approved the observations made by Lord Diplock in Council of Civil Service Unions v.Minister for the Civil Service (1985) A.C. 374, 409 wherein it was held :
“…for a decision to be susceptible to judicial review the decisionmaker must be empowered by public law (and not merely, as in arbitration, by agreement between private parties) to make decisions that, if validly made, will lead to administrative action or abstention from action by an authority endowed by law with executive powers which have one or other of the consequences mentioned in the preceding paragraph. The ultimate source of the decision-making power is nearly always nowadays a statute or subordinate legislation made under the statute; but in the absence of any statute regulating the subject matter of the decision the source of the decision-making power may still be the common law itself, i.e., that part of the common law that is given by lawyers the label of ‘the prerogative.’ Where this is the source of decisionmaking power, the power is confined to executive officers of central as distinct from local government and in constitutional practice is generally exercised by those holding ministerial rank”

15. It is also pertinent to refer to Sir John Donaldson M.R. in that Take-Over Panel case :
“In all the reports it is possible to find enumerations of factors giving rise to the jurisdiction, essential or as being exclusive of other factors. Possibly the only essential elements are what can be described as a public element, which can take many different forms, and the exclusion from the jurisdiction of bodies whose sole source of power is a consensual submission to is jurisdiction.”

16. The above guidelines and principles applied by English courts cannot be fully applied to Indian conditions when exercising jurisdiction under Article 226 or 32 of the Constitution. As already stated, the power of the High Courts under Article 226 is very wide and these powers have to be exercised by applying the constitutional provisions and judicial guidelines and violation, if any, of the fundamental rights guaranteed in Part III of the Constitution. In the matter of employment of workers by private bodies on the basis of contracts entered into between them, the courts had been reluctant to exercise the powers of judicial review and whenever the powers were exercised as against private employers, it was solely done based on public law element involved therein.

17. This view was expressly stated by this Court in various decisions and one of the earliest decisions is The Praga Tools Corporation v. Shri C.A. Imanual and Ors.. In this case, the appellant company was a company incorporated under the Indian Companies Act and at the material time the Union Government and the Government of Andhra Pradesh held 56 per cent and 32 per cent of its shares respectively. Respondent workmen filed a writ petition under Article 226 in the High Court of Andhra Pradesh challenging the validity of an agreement entered into between the employees and the company, seeking a writ of mandamus or an order or direction restraining the appellant from implementing the said agreement. The appellant raised objection as to the maintainability of the writ petition. The learned Single Judge dismissed the petition. The Division Bench held that the petition was not maintainable against the company. However, it granted a declaration in favour of three workmen, the validity of which was challenged before this Court. This Court held at pages 589-590 as under:

“…that the applicant for a mandamus should have a legal and specific right to enforce the performance of those dues. Therefore, the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is, in form, a command directed to a person, corporation or any inferior tribunal requiring him or them to do s particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorizing their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities [Cf. Halsbury’s Laws of England (3rd Ed.), Vol.II p 52 and onwards].
The company being a non-statutory body and one incorporated under the Companies Act there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus, nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty. The High Court, therefore, was right in holding that no writ petition for a mandamus or an order in the nature of mandamus could lie against the company.”

18. It was also observed that when the High Court had held that the writ petition was not maintainable, no relief of a declaration as to invalidity of an impugned agreement between the company and its employees could be granted and that the High Court committed an error in granting such a declaration.

19. In VST Industries Limited v. VST Industries Workers’ Union and Anr. (2001) 1 SCC 298, the very same question came up for consideration. The appellant-company was engaged in the manufacture and sale of cigarettes. A petition was filed by the first respondent under Article 226 of the Constitution seeking a writ of mandamus to treat the members of the respondent Union, who were employees working in the canteen of the appellant’s factory, as employees of the appellant and for grant of monetary and other consequential benefits. Speaking for the Bench, Rajendra Babu, J., (as he then was), held as follows :
“7. In de Smith, Woolf and Jowell’s Judicial Review of Administrative Action, 5th Edn., it is noticed that not all the activities of the private bodies are subject to private law, e.g., the activities by private bodies may be governed by the standards of public when its decisions are subject to duties conferred by statute or when by virtue of the function it is performing or possible its dominant position in the market, it is under an implied duty to act in the public interest. By way of illustration, it is noticed that a private company selected to run a prison although motivated by commercial profit should be regarded, at least in relation to some of its activities, as subject to public law because of the nature of the function it is performing. This is because the prisoners, for whose custody and care it is responsible, are in the prison in consequence of an order of the court, and the purpose and nature of their detention is a matter of public concern and interest. After detailed discussion, the learned authors have summarized the position with the following propositions :
(1) The test of a whether a body is performing a public function, and is hence amenable to judicial review, may not depend upon the source of its power or whether the body is ostensibly a “public” or a “private” body.
(2) The principles of judicial review prima facie govern the activities of bodies performing public functions.
(3) However, not all decisions taken by bodies in the course of their public functions are the subject matter of judicial review. In the following two situations judicial review will not normally be appropriate even though the body may be performing a public function
(a) Where some other branch of the law more appropriately governs the dispute between the parties. In such a case, that branch of the law and its remedies should and normally will be applied; and
(b) Where there is a contract between the litigants. In such a case the express or implied terms of the agreement should normally govern the matter. This reflects the normal approach of English law, namely, that the terms of a contract will normally govern the transaction, or other relationship between the parties, rather than the general law. Thus, where a special method of resolving disputes (such as arbitration or resolution by private or domestic tribunals) has been agreed upon by the parties (expressly or by necessary implication), that regime, and not judicial review, will normally govern the dispute.

20. Applying the above principles, this Court held that the High Court rightly held that it had no jurisdiction.

21. Another decision on the same subject is General Manager, Kisan Sahkar Chini Mills Limited, Sultanpur, UP v.Satrughan Nishad and Ors.. The appellant was a cooperative society and was engaged in the manufacture of sugar. The respondents were the workers of the appellant and they filed various writ petitions contending that they had to be treated as permanent workmen. The appellant challenged the maintainability of those writ petitions and applying the principles enunciated in VST Industries’ case (supra), it was held by this Court that the High Court had no jurisdiction to entertain an application under Article 226 of the Constitution as the mill was engaged in the manufacture and sale of sugar which would not involve any public function.

22. In Federal Bank Limited v. Sagar Thomas and Ors. the respondent was working as a Branch Manager of the appellant Bank. He was suspended and there was a disciplinary enquiry wherein he was found guilty and dismissed from service. The respondent challenged his dismissal by filing a writ petition. The learned Single Judge held that the Federal Bank was performing a public duty and as such it fell within the definition of “other authorities” under Article 12 of the Constitution. The appellant bank preferred an appeal, but the same was dismissed and the decision of the Division Bench was challenged before this Court. This Court observed that a private company carrying on business as a scheduled bank cannot be termed as carrying on statutory or public duty and it was therefore held that any business or commercial activity, whether it may be banking, manufacturing units or related to any other kind of business generating resources, employment, production and resulting in circulation of money which do have an impact on the economy of the country in general, cannot be classified as one falling in the category of those discharging duties or functions of a public nature. It was held that that the jurisdiction of the High Court under Article 226 could not have been invoked in that case.

29. Thus, it can be seen that a writ of mandamus or the remedy under Article 226 is pre-eminently a public law remedy and is not generally available as a remedy against private wrongs. It is used for enforcement of various rights of the public or to compel the public/statutory authorities to discharge their duties and to act within their bounds. It may be used to do justice when there is wrongful exercise of power or a refusal to perform duties. This writ is admirably equipped to serve as a judicial control over administrative actions. This writ could also be issued against any private body or person, specially in view of the words used in Article 226 of the Constitution. However, the scope of mandamus is limited to enforcement of public duty. The scope of mandamus is determined by the nature of the duty to be enforced, rather than the identity of the authority against whom it is sought. If the private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial, but, nevertheless, there must be the public law element in such action. Sometimes, it is difficult to distinguish between public law and private law remedies. According to Halsbury’s Laws of England 3 rd ed. Vol. 30, page-682,
“a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform and which perform the duties and carries out its transactions for the benefit of the public and not for private profit.”
There cannot be any general definition of public authority or public action. The facts of each case decide the point.

30. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. But nevertheless it may be noticed that the Government or Government authorities at all levels is increasingly employing contractual techniques to achieve its regulatory aims. It cannot be said that the exercise of those powers are free from the zone of judicial review and that there would be no limits to the exercise of such powers, but in normal circumstances, judicial review principles cannot be used to enforce the contractual obligations. When that contractual power is being used for public purpose, it is certainly amenable to judicial review. The power must be used for lawful purposes and not unreasonably.

32. Applying these principles, it can very well be said that a writ of mandamus can be issued against a private body which is not a State within the meaning of Article 12 of the Constitution and such body is amenable to the jurisdiction under Article 226 of the Constitution and the High Court under Article 226 of the Constitution can exercise judicial review of the action challenged by a party. But there must be a public law element and it cannot be exercised to enforce purely private contracts entered into between the parties.”

28. We adopted the triple test criteria as laid down in Binny Limited & Anr. case (supra) to come to our conclusion and in our considered view the same course of action has to be followed in the present case. The law in this behalf is well settled yet elaborate submissions were made by learned counsels, once again, reiterating those, citing the same very pronouncements.

29. Respondent No.1 was undoubtedly appointed in pursuance to the letters of appointment as a Research Professor. DA, HRA, CCA, Transport Allowance were admissible as per the Central Government Rules enforced from time to time. Termination of appointment is by the three calendar months notice or pay in lieu thereof. Respondent No.1 was required to undertake Policy Research in pursuance to objective and programmes of the CPR.

30. The factual aspects emphasized by respondent No.1 with supporting documents are very crucial to determine the public element in the functioning of the Centre. This is in the context of the triple condition laid down in Binny Limited & Anr. case (supra) as also the observations made in K. Krishnamacharyulu & Ors. case (supra). No doubt learned counsel for the appellant sought to emphasize the research element of the work done at the Centre but it cannot be lost sight of that the Centre is carrying on regular higher education work in terms of an Agreement with Manipal Academy of Higher Education, a Deemed University, for providing Doctoral and Post Doctoral training to students. The Centre has obtained exemptions under the Income Tax Act claiming the status as an educational institution. The Government notifications have included the Centre as public institution in the Provident Fund Act and for obtaining support of Ministry of Science & Technology, the Centre has been recognized as a Scientific & Industrial Research Organisation. The allotment of land by itself could not have conferred the Centre with the public element function but this factor cannot be obliterated from the factors which are to be taken into account for determining the question of the public element of the function.

31. It is not even disputed that ICSSR Grant Rules apply to the Centre. Funds are being received by the Centre. The excuse given is that the funds themselves are not sufficient to pay the salary bills. In our view, this is no answer. This is specifically so in view of what has been explained by learned counsel for respondent No.1 while referring to the financial figures for the year 2006-2007 showing large part of recurring Government aid and the funds received from testing and examination work. We may also note that on the land made available at concessional rate structure has been built and part of the premises has been let out to the National Knowledge Commission from which rent of Rs.42.00 lakh was received for the year in question. Thus, the land is not only being put to use for activities of the Centre but the land obtained on concessional rates is being utilized for a part of the structure to be rented out to earn income towards the activities of the Centre. It cannot be said that the Government has no role to play in the functioning of the Centre.

32. Respondent No.1 may be governed by his terms & conditions of appointment, however, whether an organization like the Centre which carries on educational activity can absolve itself from judicial scrutiny under Article 226 of the Constitution of India while dealing with the violation of its norms in such termination is the moot point. We find that the answer to this is clearly in the negative.

33. The documents filed on record show that the communications have been issued from the Ministry of Human Resource, Government of India to ICSSR for pay revision of employees of research institutes/regional centres supported by ICSSR and the enhancement of aid for them in which the Centre is at serial No.1. Such revision of scales as per the communication inter alia dated 22.2.2000 shows that it has to be in accordance with the State Government notifications and where posts have been created, upgraded only after obtaining Government of India/ICSSR approvals. The pay scales and allowances of the academic and non-academic employees are to be in conformity with the UGC scales. The service conditions of employees especially relating to hours of work, payment of OTA, medical allowances, etc. are also to be identical to the State/Central Government employees. There has to be no alteration/modification in the emolument structure and service conditions without prior approval of the Government. To fully appreciate this aspect we are quoting the relevant extract of that letter, which is as under:

“The approval of the Government is subject to the following conditions:
1. Revision of scales will be either in accordance with the concerned State Gov. notification or the provision of Ministry of Finance (Deptt. Of Expenditure) OM No.F.7934)E.III-A97 dated the 2nd December, 1997. The revised scales of pay as incorporated in part „A‟ of the First Schedule to the CCS (RP) Rules, 1997 will only be admissible in the case of non-teaching employees and UGC pay scales in the case of faculty posts. In cases where no equivalence of pay scales is established either with the State or Central Govt. pay scales, the scales, recruitment qualification etc. will correspond to Central Gov. employees. Payment of the arrears will be regulated in accordance with Para 3 of the above said OM.

2. The revised scales would be admissible to those employees who opt for these in accordance with the Rules. Deduction on account of PF & CPF, as the case may be, will be made on the basis of the revised pay w.e.f. the date the employees opt to the elect the revised pay scales.

3. Revision of pay scales would be admissible in respect of such posts which have been created/upgraded only after obtaining Govt. of India‟s approval/ICSSR.

4. The pay scales and allowances (DA, HRA, CCA) of academic and non-academic employees of the Research Institutes and identical to those of the UGC in respect of the faculty and State/Central Govt. employees in respect of non-academic employees prior to the revision. The revised pay scales will not be extended to any category of employees where the pre-revised pay scales are not identical to UGC pay scales in respect of the faculty and State/Central Govt. employees in respect of non-academic posts. Such cases, if any, will be referred by the ICSSR to this Department.

5. The service conditions of the employees of the Institutes/Regional Centres specially those relating to hours of work, payment of OTA, medical allowances, etc. should also be identical to those of State/Central Govt. employees.

6. The pay scales and allowances of the academic posts, qualifications recruitment rules etc. should be as per the UGC norms or State Universities Norms.

7. The revised pay scales will not be extended in respect of the employees who are enjoying the scales of pay not approved by the Government/ICSSR but have resulted from any personal promotion or Career Growth Scheme if any. Such cases will be referred to this Department by the ICSSR separately.

8. ICSSR will bear 90% of the total expenditure on account of revised pay scales in respect of the institutes which are receiving 100% grant and 45% where the funding is on 50:50 basis between the Central Government/State Govt. 10% additionality will be met by the Institute through savings under various heads.

9. The ICSSR will ensure that the medical facilities to the staff are in line with the CS (MA) Rules.

10. Merit Promotion Scheme, if exists, should be discontinued before extension of revised pay scales.

11. All cases where there is any variation in the pattern of emoluments structure and conditions of service will be referred to Department of Secondary Education and Higher Education for consideration/approval separately and will not be extended revised pay scales without prior approval of this Department.

12. Special Audit of the Institutes will be carried out by CAG for implementation of pay revision to ensure that everything was done in conformity with UGC/Govt. Guidelines and the audit report will be submitted to the Government through ICSSR.

13. The research institutes shall not alter/modify the emolument structure and service conditions, scales of pay of the post without the prior approval of the government. While releasing the grants to respective institutions, ICSSR shall furnish to the Govt. of India the schedule of pay scales (prerevision and post-revision), number of posts, designations, recruitment qualifications, etc.”

34. There are, in fact, numerous such documents on record seeking approval of ICSSR in respect of matters of employment and the extraction is by way of an illustration as we have no doubt in our mind that matters relating to employment and the terms & conditions thereof are governed by directions of the Government of India and ICSSR which in turn governs the Centre.

35. Since the inception itself Mr. T.A. Pai had written to the then Finance Minister on 20.3.1976 while requesting for aid in the following terms:
“….The Centre is supported by State Governments and public sector undertakings and through research grants from appropriate official agencies. As a person who has always encouraged systematic studies of policy nature, you will no doubt appreciate the kind of work done by the CPR and the need to encourage such efforts so that the Government and the people could weigh the various policy options.
The reason why I am writing this letter to you is that we are now engaged in building a small corpus for the CPR. Towards this purpose, especially to enable the Centre to meet its capital expenditure etc., I am making you this request for an ad hoc nonrecurring grant of rupees five lakhs only. I have no doubt you will appreciate that this is but a small and one time grant with no recurring liabilities to the Government of India. I trust you will be kind enough to sanction this amount and instruct the appropriate agency for its release.”

36. Even in respect of construction of building and renovation thereof non-recurring grant was sought. It, thus, hardly lies in the mouth of the representatives of the Centre to claim exclusion from the Court‟s scrutiny while exercising jurisdiction under Article 226 of the Constitution of India.

37. We are, thus, unequivocally of the view that in matters of service conditions including of appointment and termination and grievances arising therefrom the scrutiny under Article 226 of the Constitution of India cannot be excluded having a public element and thus the learned single Judge was right in coming to the conclusion that the matter could be examined under Article 226 of the Constitution of India.

38. We also find that having found that the action of respondent No.5, Dr. V.A. Pai Panandiker left much to be desired, the imposition of personal costs on him can hardly be said to be erroneous or calling for interference. We may, however, note that even these costs have not been paid though no stay was granted in that behalf.

39. The appeals are, thus, meritless except to the extent of what we have observed insofar as the aspect of Article 12 of the Constitution of India examined in the impugned judgement.

40. The appeals are accordingly dismissed with costs of Rs.10,000.00 each.

SANJAY KISHAN KAUL, J.
MOOL CHAND GARG, J.

MARCH 12, 2010
b’nesh

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TATA SONS LIMITED & ORS ….. Plaintiffs
Through: Mr. Pravin Anand and Mr. Karan Kamra, Advs.
Versus
JOHN DOE(S) & ORS ….. Defendants
Through: Ms. Anwesha Saha, Adv. for D-6 to 8

CORAM: HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW

ORDER

DATE: 27.04.2017

1. The summons issued to the newly impleaded defendants No.6 to 8 are awaited and the defendant No.9 is reported to be unserved.
2. The plaintiff however has filed an affidavit of service of defendants No.6 to 8 and qua defendant No.9, the counsel for the plaintiffs states that three persons named Ashok Kumar Agarwal were found at the address given. He however states that the service provider has furnished the cell phone number of Ashok Kumar Agarwal who was identified.
3. The plaintiffs are permitted to serve the defendant No.9 Ashok Kumar Agarwal by text message as well as through Whatsapp as well as by email and to file affidavit of service.
4. The counsel appearing for defendants No.6 to 8 seeks time to file written statement.
5. Written statement be filed within four weeks.
6. Replication thereto, if any be filed within further four weeks thereafter.
7. List for framing of issues, if any and for further consideration on 2nd August, 2017.

RAJIV SAHAI ENDLAW, J.

APRIL 27, 2017
Bs..

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