IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4308 OF 2012
(Arising out of Special Leave Petition (C) No. 13254 of 2011)
Shaleen Kabra Appellant
Vs.
Shiwani Kabra Respondent
CIVIL OF 2012
(Arising out of Special Leave Petition (C) No. 15819 of 2011)

JUDGMENT

ANIL R. DAVE, J

1. Leave granted.

2. Being aggrieved by the judgment of the High Court of Delhi dated the 21st of February, 2011 in CM(M) 1018 of 2010, these appeals have been filed by the parties before the High Court, who are parents of two children, whose custody is the subject matter of these appeals.

3. As the impugned order is challenged in both these appeals, both the appeals were heard together and they are being decided by this common order. For the sake of convenience, parties to the litigation have been referred to hereinbelow as arrayed in Civil Appeal arising out of Special Leave petition No. 13254 of 2011.

4. The marriage of the appellant and the respondent was solemnized on 14.02.1994. From the wedlock, two sons were born, who are approximately 15 and 9 years old. The appellant and the respondent have been living separately since 10.04.2007, and have been involved in various litigations since then, including a petition for divorce under Section 13(1)(i) & 1A of the Hindu Marriage Act, 1955 filed by the appellant-father and also proceedings under the Protection of Women from Domestic Violence Act, 2005, initiated by the respondent- mother. The appellant, who is an IAS officer, stationed at Jammu at present, had sought certain modifications in the arrangement of custody of the children, and also permission to take transfer certificates of the children from Delhi and complete their admission in a school in Jammu, and in this respect, moved applications dated 25.05.2010 and 22.06.2010 before the Additional District Judge. The Learned Additional District Judge, vide order dated 19.07.2010 was pleased to allow the applications moved by the appellant-father.

5. Being aggrieved by the above-mentioned judgment delivered by the Trial Court, the respondent preferred CM(M) No. 1018 of 2010 before the High Court. By virtue of the impugned judgment, the High Court partly allowed the petition filed by the respondent whereby the respondent was permitted to have custody of the younger son, whereas the appellant was to have custody of the elder son.

6. While coming to the above conclusion, the High Court has cited various decisions in support of the contention that while deciding the issue about custody of children in a matrimonial dispute, the paramount consideration is that of welfare of the child. Thereafter, on the basis of interaction with the children in the Chambers, the learned Single Judge was of the view that the elder son had a strong desire to stay with the appellant-father. He also found that there was also an admission by the respondent-mother that she would not be able to adequately handle the educational needs of the elder son without tutors. For the aforestated reasons, the learned Single Judge ordered that custody of the elder son should remain with the appellant-father.

7. In the case of the younger son, the learned Single Judge observed that he, being of a very tender age, was incapable of forming a definite preference as to with whom he wanted to stay. In the circumstances, the learned Single Judge ordered that the custody of the younger son should be given to the respondent-mother, as she would be in a better position to understand the needs of such a young child. On this basis, the custody of the younger son was directed to remain with the respondent.

8. The learned Single Judge also recorded a finding to the effect that both the children appeared to be very happy in the company of each other as there was a strong bonding between them.

9. Being aggrieved by the said judgment, both the parties have come before this Court vide the present appeals.

10. We heard the learned counsel for the parties, and also spoke to the children at length.

11. The counsel appearing for the appellant-father, at the outset, submitted that the High Court ought not to have directed separation of two children, in view of the close relationship between them and he further submitted that there could be disastrous effect of such a separation on them. Thereafter, the learned counsel made further submissions about the poor academic performance of the younger son while in the custody of the respondent-mother, and also regarding the alleged adulterous conduct of the respondent-mother, which was said to have a severe adverse effect on the children. The learned counsel further added that the father of the appellant, i.e. grand father of the children, is staying with the appellant and he, being a very educated person, would be in a position to take good care of the children. On these grounds inter alia, the learned counsel argued that both the children ought not to have been separated, and that custody ought to have been granted to the appellant-father.

12. On the other hand, the learned counsel appearing for the respondent- mother submitted that looking to the service condition and status of the appellant-father, occupying a stressful position in the state of Jammu & Kashmir, he would not have sufficient time to give adequate attention to the children and if custody of the children is given to him, the children would be taken care of only by servants and that would not be in the interest of the children. Further, the learned counsel argued that as the children were already in a very good school in Delhi, it would not be just and proper to move them to another school in Jammu & Kashmir which might be of an inferior standard. For the aforestated reasons, the learned counsel argued that custody of even the elder son ought to have been granted to the respondent-mother.

13. On hearing the learned counsel and also upon talking at length with the children, we find force in the arguments of the counsel for the appellant-father.

14. Upon speaking to the children personally, we also found that they are indeed very much attached to each other. This fact was also noted by the learned Single Judge of the High Court in the impugned judgment, and is also admitted by both the parties in their respective written submissions. Looking to the overall peculiar circumstances of the case, it is our view that the welfare of both the children would be best served if they remain together. In our view it would not be just and proper to separate both brothers, who are admittedly very close to each other.

15. If we are of the view that both the brothers should not be separated and should be kept together, the question would be as to who should be given custody of the children.

16. We are of the view that the children should be with the appellant- father. The respondent-mother is not in a position to look after the educational need of the elder son and as we do not desire to separate both the brothers, in our opinion, looking to the peculiar facts of the case, it would be in the interest of the children that they stay with the appellant-father.

17. We are sure that the appellant- father, who is a member of Indian Administrative Service and is a well groomed person, with the help of his father, who was also a professor, will be able to take very good care of the children. Their education would not be adversely affected even in Jammu and Kashmir as it would be possible for the appellant- father to get them educated in a good school in Jammu. We do not believe that the children would remain in company of servants as alleged by the learned counsel appearing for the respondent-mother. Father of the appellant i.e. the grandfather of the children would also be in a position to look after the children and infuse good cultural values into them. Normally, grandparents can spare more time with their grand children and especially company of well educated grandparents would not only help the children in their studies but would also help them to imbibe cultural and moral values and good manners.

18. So as to see that the respondent-mother is also not kept away from the children, she shall have a right to visit the children atleast once in a month. The appellant –father shall make arrangements for A.C. First Class railway ticket for the respondent-mother or shall pay the railway fare to her so as to visit the children once in a month at a weekend and the appellant-father shall also make arrangements for stay of the respondent-mother either at his own residence, if the respondent- mother agrees to that, otherwise the appellant-father shall make arrangements for suitable accommodation for the respondent-mother when she comes to Jammu to visit the children.

19. During the period of vacation exceeding two weeks, the appellant- father shall send the children to Delhi so that the children can stay with the respondent-mother atleast for three days. We are sure that the appellant and the respondent shall determine the modalities as to during which portion of the vacation, the children should visit the respondent-mother as almost both the parents are interested in having the company of the children.

20. For the aforestated reasons and looking to the peculiar facts of the case, we quash and set aside the impugned order passed by the High Court and restore the order of the trial court, subject to modification of conditions-arrangements, recorded hereinabove. The custody of both the children shall be given to the appellant-father before 15th May, 2012 and the arrangements with regard to visit of the children etc. shall take effect from 1st June, 2012, the respondent-mother shall do the needful to send the younger son to the residence of the appellant- father before 15th May, 2012.

21. The appeals are accordingly allowed with no order as to costs.

…………………………J (D.K. JAIN)
…………………………J (ANIL R. DAVE)

NEW DELHI
May 8 , 2012

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IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No. 1436 of 2010

Absar Alam @ Afsar Alam ……Appellant
Versus
State of Bihar ……Respondent

J U D G M E N T

A. K. PATNAIK, J.

This is an appeal by way of special leave under Article 136 of the Constitution of India against the judgment and order dated 16.07.2009 of the Patna High Court in Death Reference No. 7 of 2008 with Criminal Appeal (DB) No.169 of 2008. On 18.01.2010, this Court issued notice in the Special Leave Petition confined to the question of sentence only and on 02.08.2010 after hearing learned counsel for the parties, granted leave. Hence, the only question that we have to decide in this appeal is whether the High Court was right in confirming the death sentence of the appellant imposed by the trial court.

2. For deciding this question, the relevant facts as have been found by the trial court are that in the midnight of 14/15.02.2007, the appellant killed his mother by cutting her neck and severing her head and thereafter fled from the house with the head of his mother leaving behind her body. The trial court, after convicting the appellant under Sections 302 and 201 of the Indian Penal Code (for short ‘IPC’), held that the appellant committed the murder of his mother in an extremely brutal, grotesque, diabolical and revolting manner and hence it is one of those rarest of the rare cases calling for a death sentence on the appellant. The High Court, while upholding the conviction, confirmed the death sentence relying on the decision of this Court in Machhi Singh and others v. State of Punjab [(1983) 3 SCC 470]. In the aforesaid case of Machhi Singh, this Court has inter alia held that the manner of commission of murder and the personality of the victim of murder have to be taken into consideration while making the choice of the sentence to be imposed for the offence under Section 302, IPC : life imprisonment or death sentence. The High Court has taken a view that considering the abhorrent, dastardly and diabolical nature of the crime committed by the appellant on none other than his mother, who had given birth to him, the penalty of death has been rightly awarded by the trial court.

3. At the hearing of this appeal, learned counsel for the appellant, relying on the decision of this Court in Swamy Shraddananda (2) alias Murali Manohar Mishra v. State of Karnataka [(2008) 13 SCC 767], submitted that even if it is a case of a son beheading his mother, this is not one of the rarest of rare cases in which the death penalty should have been imposed because the offence had been committed by the appellant in a fit of passion and not after pre-meditation.

4. Learned counsel for the State, on the other hand, submitted that considering the law laid down by this Court in Prajeet Kumar Singh v. State of Bihar [(2008) 4 SCC 434], Surja Ram v. State of Rajasthan [(1996) 6 SCC 271] and Atbir v. Government of NCT of Delhi 3 [(2010) 9 SCC 1], the imposition of death sentence on the appellant for the cruel act of beheading his mother was proper.

5. We find on reading the FIR lodged by the brother of the appellant on the morning of 15.02.2007 at 09:45 hours marked as Ext.2 that the appellant’s wife Sakerun Nisha had run away to her maternal house three or four days before the incident and the appellant had been accusing his mother to have been the cause of his wife running away from this house and out of anger and excitement the appellant severed the neck of his mother and fled with the head. The appellant was an illiterate rustic and was a cultivator residing in a village with virtually no control over his emotions and has over-reacted impulsively to the situation and has severed the neck of his mother. On these facts, the appellant is no doubt guilty of the offence under Section 302, IPC, and has to suffer the punishment of imprisonment for life normally awarded for the offence, but should not be condemned to death. We may cite a few authorities in support of this view.

6. In Lehna v. State of Haryana [(2002) 3 SCC 76], the facts were that there was a quarrel between the accused and other members of his family, namely, his father, his brother and sister-in-law, over a piece of land and in the assaults that followed the quarrel, the accused killed his mother, his brother and sister-inlaw. While upholding the conviction of the accused under Section 302, IPC, this Court held that the mental condition of the accused, which led to the assault, cannot be lost sight of and while such mental condition of the accused may not be relevant to judge culpability, it is certainly a factor while considering the question of sentence. This Court further held that the factual scenario gave impressions of impulsive act of the accused and not of planned assaults and in this peculiar background, death sentence would not be proper.

7. In Gyasuddin Khan alias Md. Gyasuddin Khan v. State of Bihar [(2003) 12 SCC 516], the facts were that in the morning hours of 09.04.1996, in the precincts of a police camp stationed near a village in Bihar, a policeman deployed in the police picket to contain the terrorist activities, unleashed terror by indulging in a firing spree, killing three of his colleagues instantaneously and this Court, relying on Shamshul Kanwar v. State of U.P. [(1995) 4 SCC 430], Lehna v. State of Haryana (supra) and Om Prakash v. State of Haryana [(1999) 3 SCC 19], held that the mental condition or state of mind of the accused is one of the factors that can be taken into account in considering the question of sentence and in the facts of the case, the killing of two other policemen without premeditation and without any motive whatsoever was an act done out of panic reaction and in a state of frenzy and it was not one of the rarest of rare cases where death sentence could be awarded.

8. For the aforesaid reasons, we convert the sentence of death to one of life imprisonment for the offence under Section 302, IPC, committed by the appellant and allow the appeal in part.

.……………………….J.
(A. K. Patnaik)
………………………..J.
(Swatanter Kumar)

New Delhi,
February 07, 2012.

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO… 5950 OF 2012
(Arising out of SLP(C) No.13475 of 2012)
Ghanshyam Dass Gupta ….. Appellant
Versus
Makhan Lal ….. Respondent
O R D E R

Leave granted.

The question that arises for consideration, in this case, is whether the High Court was justified in deciding the appeal on merits when there was no appearance on behalf of the appellant, in view of the explanation to Order 41 Rule 17(1) of the Code of Civil Procedure. (CPC).

The appellant herein had engaged a lawyer for conducting his appeal before the Delhi High Court. The appeal was admitted and was pending for adjudication. Later, the lawyer of the appellant was elevated as a Judge of the Delhi High Court and hence he returned the files to the appellant. The appellant later engaged another lawyer to conduct the case. However, due to the mistake by the clerk, the Vakalatnama of that advocate could not be filed and hence the name of the newly engaged lawyer did not figure in the cause list. The appeal came up for final hearing on 13.1.2012. representation was made by a lawyer on behalf of the previous lawyer stating that the case files had already been returned to the party. Consequently, there was no effective appearance on behalf of the appellant before the High Court. In fact, there was no appearance on behalf of the respondent as well.

Learned Judge, however, proceeded to consider the appeal on merits, without the assistance of learned counsel on either side. By a detailed judgment, the appeal was dismissed on 13.1.2012 stating as follows:

“6. In view of the above, there is no merit in the appeal inasmuch as not only because the appellant/defendant was guilty of breach of contract but also because the appellant/defendant did not plead and prove the forfeiture of earnest money or any loss having been caused to him. The appellant/defendant was, therefore, liable to refund the amount which he received under the Agreement to Sell.
7. In view of the above, there is no merit in the appeal which is accordingly dismissed leaving the parties to bear their own costs.”

Aggrieved by the judgment of the High Court, this appeal has been preferred.

Shri Rakesh Dahiya, learned counsel appearing on behalf of the appellant, submitted that the High Court was not justified in deciding the appeal on merits since there was no representation on behalf of the appellant. Learned counsel pointed out that the only course open to the Court was either to dismiss the appeal on default or adjourn the same, but not to decide the matter on merits, in view of the explanation to Order 41 Rule 17(1) CPC.

Learned counsel appearing on behalf of the respondent supported the judgment of the High Court contending that the appeal was of the year 2003 and came up for final hearing after a period of nine years, and the High Court was justified in deciding the matter on merits even if there was no appearance on behalf of the appellant.

We are, in this case, called upon to consider whether the High Court was justified in deciding the appeal on merits in the absence of any representation on behalf of the appellant, in view of Explanation to Order 41 Rule 17(1) CPA. The said provision is given below for easy reference:

“Rule 17. Dismissal of appeal for appellant’s default.- (1) Where on the day fixed, or on any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Court may make an order that the appeal is dismissed.
Explanation.- Nothing in this sub-rule shall be construed as empowering the Court to dismiss the appeal on the merits.”

Rule 17(1) of Order 41 deals with the dismissal of appeal for appellant’s default. The above-mentioned provision, even without explanation, if literally read, would clearly indicate that if the appellant does not appear when the appeal is called for hearing, the court has to dismiss the appeal. The provision does not postulate a situation where, the appeal has to be decided on merits, because possibility of allowing of the appeal is also there, if the appellant has a good case on merits; even if nobody had appeared for the appellant. Prior to 1976, conflicting views were expressed by different High Courts in the country as to the purport and meaning of sub-rule (1) of Rule 17 of Order 41 CPC. Some High Courts had taken the view that it was open to the appellate court to consider the appeal on merits, even though there was no appearance on behalf of the appellant at the time of hearing. Some High Courts had taken the view that the High Court cannot decide the matter on merits, but could only dismiss the appeal for appellant’s default. Conflicting views raised by the various High Courts gave rise to more litigation. The Legislature, therefore, in its wisdom, felt that it should clarify the position beyond doubt. Consequently, Explanation to sub-rule (1) of Rule 17 of Order 41 CPC was added by Act 104 of 1976, making it explicit that nothing in sub-rule (1) of Rule 17 of Order 41 CPC should be construed as empowering the appellate court to dismiss the appeal on merits where the appellant remained absent or left un-represented on the day fixed for hearing the appeal. The reason for introduction of such an explanation is due to the fact that it gives an opportunity to the appellant to convince the appellate court that there was sufficient cause for non-appearance. Such an opportunity is lost, if the courts decide the appeal on merits in absence of the counsel for the appellant.

We may, in this connection, refer to a judgment of this Court in Abdur Rahman and Others v. Athifa Begum and Others (1996) 6 SCC 62, wherein the scope of explanation to Rule 17(1) of Order 41 CPC came up for consideration. While interpreting the said provision, this Court took the view that the High Court could not go into the merits of the case if there was no appearance on behalf of the appellant. We also endorse that view.

For the reasons stated above, we are inclined to allow this appeal and set aside the judgment of the High Court and restore FRA No. 664 of 2003 and direct the High Court to dispose of the same in accordance with law. However, there will be no order as to costs.

……………………………J.
(K.S. Radhakrishnan)
……………………………..J.
(Dipak Misra)

New Delhi,
August 21, 2012

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IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

RITESH SINHA      …APPELLANT
Vs.
THE STATE OF UTTAR PRADESH & ANR.      …RESPONDENTS

[Criminal Appeal No. 2003 of 2012 arising out of Special Leave Petition (CRL.) No.7259 of 2010]

(SMT.) RANJANA PRAKASH DESAI, J.

1. Leave granted.

2. On 7/12/2009, one Prashant Kapil, In-charge, Electronics Cell, P.S. Sadar Bazar, District Saharanpur lodged a First Information Report alleging that one Dhoom Singh in connivance with the appellant was collecting money from people on the pretext that he would get them recruited in the police department. After his arrest, one mobile phone was seized from Dhoom Singh. As the police wanted to verify whether the recorded conversation, which is in their possession, is between accused Dhoom Singh and the appellant, they needed voice sample of the appellant.

The police, therefore, filed an application before learned Chief Judicial Magistrate, Janpad Saharanpur, praying that the appellant be summoned to the court for recording the sample of his voice. On 8/1/2010, learned Chief Judicial Magistrate, Saharanpur issued summons to the appellant to appear before the investigating officer and give his voice sample. The appellant approached the Allahabad High Court under Section 482 of the Code of Criminal Procedure, 1973 (for short, “the Code”) for quashing of the said order. The High Court by the impugned order dated 9/7/2010 rejected the said application, hence, this appeal by special leave.

3. In my view, two important questions of law raised in this appeal, which we need to address, are as under: “(i) Whether Article 20(3) of the Constitution of India, which protects a person accused of an offence from being compelled to be a witness against himself, extends to protecting such an accused from being compelled to give his voice sample during the course of investigation into an offence? ii) Assuming that there is no violation of Article 20(3) of the Constitution of India, whether in the absence of any provision in the Code, can a Magistrate authorize the investigating agency to record the voice sample of the person accused of an offence?”

4. We have heard, at considerable length, Mr. Siddhartha Dave, learned counsel for the appellant, Mr. Aman Ahluwalia, learned amicus curiae and Mr. R.K. Dash, learned counsel for the respondent – State of Uttar Pradesh. We have also perused the written submissions filed by them.

5. Mr. Dave, learned counsel for the appellant, at the outset, made it clear that he was not pressing the challenge that the order passed by the Magistrate violates the appellant’s fundamental right of protection from self-incrimination as guaranteed under Article 20(3) of the Constitution. Counsel submitted, however, that there is no provision in the Code or in any other law which authorizes the police to make an application for an order directing the accused to permit recording of his voice for voice sample test. Counsel submitted that a Magistrate has no inherent powers and, therefore, learned Magistrate could not have given such a direction (Adalat Prasad v. Rooplal Jindal[1]). Counsel submitted that because there is no other provision providing for a power, it ought not to be read in any other provision (State of U.P. v. Ram Babu Misra[2], S.N. Sharma v. Bipen Kumar Tiwari[3]).

Counsel pointed out that in Ram Babu Misra, this Court restricted the scope of Section 73 of the Indian Evidence Act and took-out from the purview of Section 5 of the Identification of Prisoners Act, 1920 (for short, “the Prisoners Act), handwritings and signatures. As suggested by this Court, therefore, the Code was amended and Section 311A was inserted. Counsel submitted that Section 5 of the Prisoners Act is inapplicable to the present case because it is enacted only for the purpose of keeping a record of the prisoners and other convicts and not for collection of evidence (Balraj Bhalla v. Sri Ramesh Chandra Nigam[4]).

Counsel submitted that this is supported by Section 7 of the Prisoners Act, which provides for destruction of photographs and records of measurement on acquittal. The term “measurement” defined in Section 2(a) of the Prisoners Act covers only those things which could be physically measured. Counsel submitted that the Prisoners Act, being a penal statute, the term measurement appearing therein must be given a restricted meaning (Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd. and others[5]). Counsel submitted that investigation has to be conducted within the parameters of the Code. It is not uncontrolled and unfettered (State of West Bengal v. Swapan Guha[6]). Counsel submitted that the High Court judgments, where unamended Section 53 of the Code is involved, are not relevant. Counsel submitted that Explanation (a) to Section 53 of the Code was introduced in 2005 and, therefore, those judgments cannot be relied upon for interpreting the said Section as it stands today.

Counsel submitted that various examinations listed in the said Explanation are the ones for which the police can have the accused examined by a medical practitioner. These tests are all of physical attributes present in the body of a person like blood, nail, hair etc., which once taken can be examined by modern and scientific techniques. Voice sample specifically has not been included as one of the tests in the said Explanation even though the amendment was made in 2005 when Parliament was well aware of such test being available and, has, therefore, been intentionally omitted. Counsel submitted that the words “such other tests”mentioned in the said Explanation are controlled by the words “which the registered medical practitioner thinks necessary”.

Therefore, the discretion, as to the choice of the test, does not vest in the police but it vests in the medical practitioner. This would clearly exclude voice test on the principle of ejusdem generis. Counsel submitted that in Selvi and others v. State of Karnataka[7] this Court has held that Section 53of the Code has to be given a restrictive interpretation and not an expansive one. Counsel submitted that the decision of this Court in Sakiri Vasu v. State of Uttar Pradesh[8] is inapplicable since to do an act under ancillary power the main power has to be conferred, which has not been conferred in this case. Therefore, there is no question of resorting to ancillary power. Counsel submitted that the High Court fell into a grave error in refusing to quash the order passed by learned Magistrate summoning the appellant for the purpose of giving sample of his voice to the investigating officer.

6. Mr. Aman Ahluwalia, learned Amicus Curiae has submitted a very detailed and informative note on the issues involved in this case. Gist of his submissions could be stated. Counsel submitted that voice sample is only a material for comparison with something that is already in possession of the investigating agency. Relying on 11 Judges’ Bench decision of this court in State of Bombay v. Kathi Kalu Oghad & Ors.,[9] counsel submitted that evidence for such identification purposes would not attract the privilege under Article 20(3) of the Constitution. According to learned counsel, there is no specific provision enabling the Magistrate to direct an accused to give his voice sample.

There are certain provisions of the Code in which such power can be read into by the process of implication viz. Section 2(h), Section 53, Section 311A and Section 54A. So far as Section 311A of the Code is concerned, counsel however, fairly pointed out that in Rakesh Bisht v. C.B.I.[10] the Delhi High Court has held that with the aid of Section 311A of the Code the accused cannot be compelled to give voice sample. Counsel also relied on Section 5 of the Prisoners Act and submitted that it expressly confers power on the Magistrate to direct collection of demonstrative evidence during investigation. Counsel submitted that in Central Bureau of Investigation, New Delhi v. Abdul Karim Ladsab Telgi and others[11] the Bombay High Court has interpreted the term “measurement” appearing in Section 5 of the Prisoners Act expansively and purposefully to include measurement of voice i.e. speech sound waves.

Counsel submitted that Section 53 of the Code could be construed expansively on the basis of presumption that an updating construction can be given to the statute (Bennion on Statutory Interpretation[12]). Relying on Selvi, counsel submitted that for the purpose of Section 53 of the Code, persons on anticipatory bail would be deemed to be arrested persons. It is, therefore, reasonable to assume that where the person is not actually in the physical custody of the police, the investigating agency could approach the Magistrate for an order directing the person to submit himself for examination under Section 53 of the Code. Counsel also submitted that in Sakiri Vasu, this Court has referred to the incidental and implied powers of a Magistrate during investigation. Counsel submitted that in Selvi,

Explanation to Section 53 has been given a restrictive meaning to include physical evidence. Since voice is physical evidence, it would fall within the ambit of Section 53 of the Code. The Magistrate has, therefore, ancillary or implied powers under Section 53 of the Code to direct a person to give voice sample in order to aid investigation. Counsel submitted that the most natural construction of the various statutes may lead to the conclusion that there is no power to compel a person to give voice sample. However, the administration of justice and the need to control crime effectively require the strengthening of the investigative machinery. While considering various provisions of law this angle may be kept in mind.

7. Mr. Dash, learned counsel for the State of Uttar Pradesh submitted that the definition of the term ‘investigation’ appearing in the Code is inclusive. It means collection of evidence for proving a particular fact. A conjoint reading of the definition of the term ‘investigation’ and Sections 156 and 157 of the Code would show that while investigating a crime, the police have to take various steps (H.N. Rishbud & Anr. v. State of Delhi[13]). Counsel pointed out that in Selvi, meaning and scope of the term ‘investigation’ has been held to include measures that had not been enumerated in the statutory provisions.

In this connection, in Selvi, this Court took note of Rajasthan High Court judgment in Mahipal Maderna & Anr. v. State of Rajasthan[14] and Allahabad High Court judgment in Jamshed v. State of U.P.[15] Relying on Kathi Kalu Oghad & Ors., counsel submitted that taking of thumb impressions, impression of palm or foot or fingers or specimen writing or exposing a part of the body by an accused for the purpose of identification is not furnishing evidence in the larger sense because Constitution makers never intended to put obstacles in the way of effective investigation.

Counsel also relied on State of U.P. v. Boota Singh[16] where the contention that taking specimen signatures of the respondents by police during investigation was hit by Section 162 of the Code was rejected. Counsel submitted that the question of admissibility of tape recorded conversation is relevant for the present controversy. In this connection, he relied on R.M. Malkani v. State of Maharashtra[17].

Counsel submitted that under Section 5 of the Prisoners Act, a person can be directed to give voice sample. In this connection, he relied on the Bombay High Court’s judgment in Telgi. Counsel submitted that a purposive interpretation needs to be put on the relevant sections to strengthen the hands of the investigating agency to deal with the modern crimes where tape recorded conversations are often very crucial.

8. Though, Mr. Dave, learned counsel for the appellant has not pressed the submission relating to infringement of guarantee enshrined in Article20(3) of the Constitution, since extensive arguments have been advanced on Article 20(3) and since the right against self-incrimination enshrined therein is of great importance to criminal justice system, I deem it appropriate to deal with the said question also to make the legal positionclear.

9. Article 20(3) of the Constitution reads thus: “Article 20: Protection in respect of conviction for offences.

1………………..

2………………..

3. No person accused of any offence shall be compelled to be a witness against himself.

10. “In M.P. Sharma v. Satish Chandra & Ors.[18], a seven Judges Bench of this court did not accept the contention that the guarantee against testimonial compulsion is to be confined to oral testimony while facing trial in the court. The guarantee was held to include not only oral testimony given in the court or out of court, but also the statements in writing which incriminated the maker when figuring as an accused person.

11. In Kathi Kalu Oghad, this court agreed with the above conclusion drawn in M.P. Sharma. This court, however, did not agree with the observation made therein that “to be a witness” may be equivalent to “furnishing evidence” in larger sense of the expression so as to include giving of thumb impression or impression of palm or foot or fingers or specimen writing or exposing a part of the body by an accused person for the purpose of identification. This court expressed that the observations in M.P. Sharma that Section 139 of the Evidence Act which says that a person producing a document on summons is not a witness, has no bearing on the connotation of the word “witness” is not entirely well-founded in law. It is necessary to have a look at Kathi Kalu Oghad.

12. In Kathi Kalu Oghad, the prosecution adduced in evidence a chit stated to be in the handwriting of the accused. In order to prove that the chit was in the handwriting of the accused, the police had taken specimen signatures of the accused while he was in police custody. Hand writing expert opined that the chit was in the handwriting of the accused. Question was raised as to the admissibility of the specimen writings in view of Article 20(3) of the Constitution. The High Court had acquitted the accused after excluding the specimen writings from consideration. The questions of constitutional importance which this court considered and which have relevance to the case on hand are as under:

a. Whether by production of the specimen handwriting, the accused could be said to have been a witness against himself within the meaning of Article 20(3) of the Constitution?

b. Whether the mere fact that when those specimen handwritings had been given, the accused was in police custody, could by itself amount to compulsion, apart from any other circumstances which could be urged as vitiating the consent of the accused in giving these specimen handwritings?

c. Whether a direction given by a court to an accused present in court to give his specimen writing and signature for the purpose of comparison under Section 73 of the Indian Evidence Act infringes the fundamental right enshrined in Article 20(3) of the Constitution?

13. While departing from the view taken in M.P. Sharma that “to be witness is nothing more than to furnish evidence” and such evidence can be furnished through lips or by production of a thing or of a document or in other modes, in Kathi Kalu Oghad this Court was alive to the fact that the investigating agencies cannot be denied their legitimate power to investigate a case properly and on a proper analysis of relevant legal provisions it gave a restricted meaning to the term “to be witness”. The relevant observations may be quoted.

“‘To be a witness’ may be equivalent to ‘furnishing evidence’ in the sense of making oral or written statements, but not in the larger sense of the expression so as to include giving of thumb impression or impression of palm or foot or fingers or specimen writing or exposing a part of the body. ‘Furnishing evidence’ in the latter sense could not have been within the contemplation of the Constitution-makers for the simple reason that – thought they may have intended to protect an accused person from the hazards of self-incrimination, in the light of the English Law on the subject – they could not have intended to put obstacles in the way of efficient and effective investigation into crime and of bringing criminals to justice.

The taking of impressions or parts of the body of an accused person very often becomes necessary to help the investigation of a crime. It is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and the law courts with legitimate powers to bring offenders to justice.

14. “In support of the above assertion, this court referred to Section 5of the Prisoners Act which allows measurements and photographs of an accused to be taken and Section 6 thereof which states that if any one resists taking of measurements and photographs, all necessary means to secure the taking of the same could be used. This court also referred to Section 73 of the Indian Evidence Act which authorizes the court to permit the taking of finger impression or specimen handwriting or signature of a person present in the court, if necessary for the purpose of comparison.

This court observed that self-incrimination must mean conveying information based upon the personal knowledge of the person giving the information and cannot include merely the mechanical process of producing documents in court which may throw a light on any of the points in controversy, but which do not contain any statement of the accused based on his personal knowledge. Example was cited of an accused that may be in possession of a document which is in his writing or which contains his signature or his thumb impression.

It was observed that production of such document with a view to comparison of the writing or the signature or the impression of the accused is not the statement of an accused person, which can be said to be of the nature of a personal testimony. I may quote another relevant observation of this court: “When an accused person is called upon by the Court or any other authority holding an investigation to give his finger impression or signature or a specimen of his handwriting, he is not giving any testimony of the nature of a ‘personal testimony’.

The giving of a ‘personal testimony’ must depend upon his volition. He can make any kind of statement or may refuse to make any statement. But his finger impressions or his handwriting, in spite of efforts at concealing the true nature of it by dissimulation cannot change their intrinsic character. Thus, the giving of finger impressions or of specimen writing or of signatures by an accused person, though it may amount to furnishing evidence in the larger sense, is not included within the expression ‘to be a witness.

15. “Four of the conclusions drawn by this court, which are relevant for our purpose, could be quoted: “(3) ‘To be a witness’ is not equivalent to ‘furnishing evidence’ in its widest significance; that is to say, as including not merely making of oral or written statements but also production of documents or giving materials which may be relevant at a trial to determine the guilt or innocence of the accused.

(4) Giving thumb impressions or impressions of foot or palm or fingers or specimen writings or showing parts of the body by way of identification are not included in the expression ‘to be a witness’.

(5) ‘To be a witness’ means imparting knowledge in respect of relevant facts by an oral statement or a statement in writing, made or given in court or otherwise.

(6) ‘To be a witness’ in its ordinary grammatical sense means giving oral testimony in court. Case law has gone beyond this strict literal interpretation of the expression which may now bear a wider meaning, namely, bearing testimony in court or out of court by a person accused of an offence, orally or in writing.

16. “Before I proceed further, it is necessary to state that our attention was drawn to the judgment of this Court in Shyamlal Mohanlal v. State of Gujarat[19]. It was pointed out that, there is some conflict between observations of this Court in M.P. Sharma as reconsidered in Kathi Kalu Oghad and, Shyamlal Mohanlal and this is noted by this Court in V.S. KuttanPillai v. Ramakrishnan & Anr.[20]. I, however, find that in V.S. KuttanPillai, this Court has not specifically given the nature of the conflict. Having gone through Shyamlal Mohanlal v. State of Gujarat[21], I find that in that case, the Constitution Bench was considering the question whether Section 94 of the Code of Criminal Procedure (Act 5 of 1898)(Section 91(1) of the Code) applies to accused persons.

The Constitution Bench observed that in Kathi Kalu Oghad it has been held that an accused person cannot be compelled to disclose documents which are incriminatory and based on his own knowledge. Section 94 of the Code of Criminal Procedure (Act 5 of 1898) permits the production of all documents including the documents which are incriminatory and based on the personal knowledge of the accused person. The Constitution Bench observed that if Section 94is construed to include an accused person, some unfortunate consequences follow. If the police officer directs an accused to attend and produce a document, the court may have to hear arguments to determine whether the document is prohibited under Article 20 (3). The order of the trial court will be final under the Code for no appeal or revision would lie against that order.

Therefore, if Section 94 is construed to include an accused person, it would lead to grave hardship to the accused and make investigation unfair to him. The Constitution Bench concluded that Section94 does not apply to an accused person. Though there is reference to M.P. Sharma as a judgment stating that calling an accused to produce a document does amount to compelling him to give evidence against himself, the observations cannot be read as taking a view contrary to Kathi Kalu Oghad, because they were made in different context. As I have already noted, the conclusion drawn in Kathi Kalu Oghad that the accused cannot be compelled to produce documents which are incriminatory and based on his own knowledge has been restated. I, therefore, feel that it is not necessary to go into the question of alleged conflict.

17. In Selvi a three Judge Bench of this Court was considering whether involuntary administration of certain scientific techniques like narco-analysis, polygraph examination and the Brain Electrical Activation Profile(BEAP) tests and the results thereof are of a ‘testimonial character’ attracting the bar of Article 20(3) of the Constitution. This Court considered the protective scope of right against self-incrimination, that is whether it extends to the investigation stage and came to the conclusion that even the investigation at the police level is embraced by Article 20(3). After quoting extensively from Kathi Kalu Oghad, it was observed that the scope of ‘testimonial compulsion’ is made clear by two premises.

The first is that ordinarily it is the oral or written statements which convey the personal knowledge of a person in respect of relevant facts that amount to ‘personal testimony’ thereby coming within the prohibition contemplated by Article 20(3). In most cases, such’ personal testimony’ can be readily distinguished from material evidence such as bodily substances and other physical objects. The second premise is that in some cases, oral or written statements can be relied upon but only for the purpose of identification or comparison with facts and materials that are already in the possession of the investigators. The bar of Article 20(3) can be invoked when the statements are likely to lead to incrimination by themselves or furnish a link in the chain of evidence.

It was held that all the three techniques involve testimonial responses. They impede the subject’s right to remain silent. The subject is compelled to convey personal knowledge irrespective of his/her own volition. The results of these tests cannot be likened to physical evidence so as to exclude them from the protective scope of Article 20(3). This Court concluded that compulsory administration of the impugned techniques violates the right against self-incrimination. Article 20(3) aims to prevent the forcible conveyance of personal knowledge that is relevant to the facts in issue. The results obtained from each of the impugned tests bear a testimonial character and they cannot be categorized as material evidence such as bodily substances and other physical objects.

18. Applying the test laid down by this court in Kathi Kalu Oghad which is relied upon in Selvi, I have no hesitation in coming to a conclusion that if an accused person is directed to give his voice sample during the course of investigation of an offence, there is no violation of his right under Article 20(3) of the Constitution. Voice sample is like finger print impression, signature or specimen handwriting of an accused. Like giving of a finger print impression or specimen writing by the accused for the purposes of investigation, giving of a voice sample for the purpose of investigation cannot be included in the expression “to be a witness”. By giving voice sample the accused does not convey information based upon his personal knowledge which can incriminate him. A voice sample by itself is fully innocuous.

By comparing it with tape recorded conversation, the investigator may draw his conclusion but, voice sample by itself is not a testimony at all. When an accused is asked to give voice sample, he is not giving any testimony of the nature of a personal testimony. When compared with the recorded conversation with the help of mechanical process, it may throw light on the points in controversy. It cannot be said, by any stretch of imagination that by giving voice sample, the accused conveyed any information based upon his personal knowledge and became a witness against himself. The accused by giving the voice sample merely gives ‘identification data’ to the investigating agency. He is not subjected to any testimonial compulsion. Thus, taking voice sample of an accused by the police during investigation is not hit by Article 20(3) of the Constitution.

19. The next question which needs to be answered is whether there is any provision in the Code, or in any other law under which a Magistrate can authorize the investigating agency to record voice sample of a person accused of an offence. Counsel are ad idem on the point that there is no specific provision either in the Code or in any other law in that behalf. In its 87th Report, the Law Commission suggested that the Prisoners Act should be amended inter alia to include voice sample within the ambit of Section 5 thereof. Parliament however has not amended the Prisoners Act in pursuance to the recommendation of the Law Commission nor is the Code amended to add any such provision therein. Resultantly, there is no specific legal provision under which such a direction can be given. It is therefore, necessary to see whether such power can be read into in any of the available provisions of law.

20. A careful study of the relevant provisions of the Code and other relevant statutes discloses a scheme which aims at strengthening the hands of the investigator. Section 53, Section 54A, Section 311A of the Code, Section 73 of the Evidence Act and the Prisoners Act to which I shall soon refer reflect Parliament’s efforts in that behalf. I have already noted that in Kathi Kalu Oghad, while considering the expressions “to be a witness” and “furnishing evidence”, this Court clarified that “to be a witness” is not equivalent to “furnishing evidence” in the larger sense of the expression so as to include giving of thumb impression or impression of palm or foot or fingers or specimen writing or exposing a part of the body by an accused for the purpose of identification because such interpretation would not have been within the contemplation of the Constitution makers for the simple reason that though they may have intended to protect an accused person from the hazards of self-incrimination, they could not have intended to put obstacles in the way of efficient and effective investigation into crime and bringing criminal to justice. Such steps often become necessary to help the investigation of crime.

This Court expressed that it is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and law courts with legitimate powers to bring offenders to justice. This, in my opinion, is the basic theme and, the controversy regarding taking of voice sample involved in this case will have to be dealt with keeping this theme in mind and by striking a balance between Article 20(3) and societal interest in having a legal framework in place which brings to book criminals.

21. Since we are concerned with the stage of investigation, it is necessary to see how the Code defines ‘investigation’. Section 2 (h) of the Code is material. It reads thus: “Investigation” includes all the proceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than a Magistrate) who is authorized by a Magistrate in this behalf.

22. “It is the duty of a Police Officer or any person (other than a Magistrate) authorized by a Magistrate to collect evidence and proceedings under the Code for the collection of evidence are included in ‘Investigation’. Collection of voice sample of an accused is a step in investigation.

It was argued by learned counsel for the State that various steps which the police take during investigation are not specifically provided in the Code, yet they fall within the wider definition of the term ‘investigation’ and investigation has been held to include measures that had not been enumerated in statutory provisions and the decisions to that effect of the Rajasthan High Court in Mahipal Maderna and Allahabad High Court in Jamshed have been noticed by this Court in Selvi and, therefore, no legal provision need be located under which voice sample can be taken. I find it difficult to accept this submission. In the course of investigation, the police do use force. In a country governed by rule of law police actions which are likely to affect the bodily integrity of a person or likely to affect his personal dignity must have legal sanction.

That prevents possible abuse of the power by the police. It is trite that every investigation has to be conducted within the parameters of the Code. The power to investigate into a cognizable offence must be exercised strictly on the condition on which it is granted. (State of West Bengal v. Swapan Guha). The accused has to be dealt with strictly in accordance with law. Even though, taking of physical evidence which does not amount to communicating information based on personal knowledge to the investigating officer by the accused which may incriminate him, is held to be not violative of protection guaranteed by Article 20(3), the investigating officer cannot take physical evidence from an accused unless he is authorized by a Magistrate to do so. He cannot assume powers which he does not possess.

He can only act on the strength of a direction given to him by a Magistrate and the Magistrate must have power to issue such a direction. In Bindeshwari Prasad Singh v. Kali Singh[22], this Court has clarified that subordinate criminal courts have no inherent powers. Similar view has been taken by this court in Adalat Prasad. Our attention was drawn to Sakiri Vasu in support of the submission that the Magistrate has implied or incidental powers. In that case, this Court was dealing with the Magistrate’s powers under Section 156(3) of the Code. It is observed that Section 156(3) includes all such powers as are necessary for ensuring a proper investigation.

It is further observed that when a power is given to an authority to do something, it includes such incidental or implied powers which would ensure proper doing of that thing. It is further added that where an Act confers jurisdiction, it impliedly also grants power of doing all such acts or employ such means as are essentially necessary for execution. If we read Bindeshwar Prasad, Adalat Prasad and Sakiri Vasu together, it becomes clear that the subordinate criminal courts do not have inherent powers. They can exercise such incidental powers as are necessary to ensure proper investigation. Against this background, it is necessary to find out whether power of a Magistrate to issue direction to a police officer to take voice sample of the accused during investigation can be read into in any provisions of the Code or any other law. It is necessary to find out whether a Magistrate has implied or ancillary power under any provisions of the Code to pass such order for the purpose of proper investigation of the case.

23. In search for such a power, I shall first deal with the Prisoners Act. As its short title and preamble suggests it is aimed at securing identification of the accused. It is an Act to authorize the taking of measurements and photographs of convicts and others. Section 2(a) defines the term ‘measurements’ to include finger-impressions and foot-print impressions. Section 3 provides for taking of measurements, etc., of convicted persons and Section 4 provides for taking of measurements, etc., of non-convicted persons. Section 5 provides for power of a Magistrate to order a person to be measured or photographed.

Section 6 permits the police officer to use all means necessary to secure measurements etc. if such person puts up resistance. Section 7 states that all measurements and photographs taken of a person who has not been previously convicted shall be destroyed unless the court directs otherwise, if such person is acquitted or discharged. In Kathi Kalu Oghad, this Court referred to the Prisoners Act as a statute empowering the law courts with legitimate powers to bring offenders to justice.

24. In Amrit Singh v. State of Punjab[23] the appellant was charged for offences under Sections 376 and 302 of the Indian Penal Code (for short “the IPC”) and an application was filed by the investigating officer for obtaining the appellant’s hair sample. He refused to give hair sample. It was argued that hair sample can be taken under the provisions of the Prisoners Act. This Court held that the Prisoners Act may not be ultra vires the Constitution, but it will have no application to the case before it because it cannot be said to be an area contemplated under it.

25. In Telgi, the Bombay High Court was dealing with a challenge to the order passed by the Special Judge, Pune, rejecting application filed by the investigating agency praying that it may be permitted to record the voice samples of the accused. The High Court relying on Kathi Kalu Oghad rejected the contention that requiring the accused to lend their voice sample to the investigating officer amounts to testimonial compulsion and results in infringement of the accuser’s right under Article 20(3) of the Constitution. The High Court held that measuring frequency or intensity of the speech sound waves falls within the ambit of the scope of the term “measurement” as defined in Section 2(a) of the Prisoners Act. The High Court also relied on Sections 5 and 6 of the Prisoners Act as provisions enabling the court to pass such orders.

26. In Rakesh Bisht, the Delhi High Court disagreed with the view taken by the Bombay High Court in Telgi. The Delhi High Court held that if after investigation, charges are framed and in the proceedings before the court, the court feels that voice sample ought to be taken for the purposes of establishing identity, then such a direction may be given provided the voice sample is taken only for the purposes of identification and it does not contain inculcator statement so as to be hit by Article 20(3) of theConstitution.

27. Having carefully perused the provisions of the Prisoners Act, I am inclined to accept the view taken by the Bombay High Court in Telgi as against the view taken by the Delhi High Court in Rakesh Bisht. Voice sample stands on a different footing from hair sample with which this Court was concerned in Amrit Singh because there is no provision express or implied in the Prisoners Act under which such a hair sample can be taken. That is not so with voice sample.

28. The purpose of taking voice sample which is non-testimonial physical evidence is to compare it with tape recorded conversation. It is a physical characteristic of the accused. It is indemnificatory evidence. In R.M. Malkani, this Court has taken a view that tape recorded conversation is admissible provided the conversation is relevant to the matters in issue; there is identification of the voice and the tape recorded conversation is proved by eliminating the possibility of erasing the ta perecorded conversation. It is a relevant fact and is admissible under Section 7 of the Evidence Act. In view of this legal position, to make the tape recorded conversation admissible in evidence, there must be provision under which the police can get it identified. For that purpose, the police must get the voice sample of the accused.

29. The dictionary meaning of the term ‘measurement’ is the act or process of measuring. The voice sample is analysed or measured on the basis of time, frequency and intensity of the speech-sound waves. A voiceprint is a visual recording of voice. Spectrographic Voice Identification is described in Chapter 12 of the Book “Scientific Evidence in Criminal Cases” written by Andre A. Moenssens, Ray Edward Moses and Fred E. Inbau. The relevant extracts of this chapter could be advantageously quoted. “Voiceprint identification requires (1) a recording of the questioned voice, (2) a recording of known origin for comparison, and (3) a sound spectrograph machine adapted for ‘voiceprint’ studies.” 12.02 Sound and Speech In order to properly understand the voiceprint technique, it is necessary to briefly review some elementary concepts of sound and speech. Sound, like heat, can be defined as a vibration of air molecules or described as energy in the form of waves or pulses, caused by vibrations. In the speech process, the initial wave producing vibrations originate in the vocal cords. Each vibration causes a compression and corresponding rarefactions of the air, which in turn form the aforementioned wave or pulse.

The time interval between each pulse is called the frequency of sound; it is expressed generally in hertz, abbreviated as hz., or sometimes also in cycles-per-second, abbreviated as cps. It is this frequency which determines the pitch of the sound. The higher the frequency, the higher the pitch, and vice versa. Intensity is another characteristic of sound. In speech, intensity is the characteristic of loudness. Intensity is a function of the amount of energy in the sound wave or pulse. To perceive the difference between frequency and intensity, two activities of air molecules in an atmosphere must be considered.

The speed at which an individual vibrating molecule bounces back and forth between the other air molecules surrounding it is the frequency. Intensity, on the other hand, may be measured by the number of air molecules that are being caused to vibrate at a given frequency.” “12.03 The Sound Spectrograph The sound spectrograph is an electromagnetic instrument which produces a graphic display of speech in the parameters of time, frequency and intensity. The display is called a sound spectrogram.

30. “Thus, it is clear that voiceprint identification of voice involves measurement of frequency and intensity of sound waves. In my opinion, therefore, measuring frequency or intensity of the speech-sound waves falls within the ambit of inclusive definition of the term ‘measurement’ appearing in the Prisoners Act.

31. There is another angle of looking at this issue. Voice prints are like finger prints. Each person has a distinctive voice with characteristic features. Voice print experts have to compare spectrographic prints to arrive at an identification. In this connection, it would be useful to read following paragraphs from the book “Law Enforcement and Criminal Justice – an introduction” by Bennett-Sandler, Frazier, Torres, Waldron. “Voiceprints. The voiceprint method of speaker identification involves the aural and visual comparison of one or more identified voice patterns with a questioned or unknown voice. Factors such as pitch, rate of speech, accent, articulation, and other items are evaluated and identified, even though a speaker may attempt to disguise his or her voice.

Through means of a sound spectrograph, voice signals can be recorded magnetically to produce a permanent image on electrically sensitive paper. This visual recording is called a voiceprint. A voiceprint indicates resonance bars of a person’s voice (called formants), along with the spoken word and how it is articulated. Figure 9.7 is an actual voiceprint sample. The loudness of a voice is indicated by the density of lines; the darker the lines on the print, the greater the volume of the sound. When voiceprints are being identified, the frequency and pitch of the voice are indicated on the vertical axis; the time factor is indicated on the horizontal axis.

At least ten matching sounds are needed to make a positive identification, while fewer factors lead to a probable or highly probable conclusion. Voiceprints are like fingerprints in that each person has a distinctive voice with characteristic features dictated by vocal cavities and articulators. Oral and nasal cavities act as resonators for energy expended by the vocal cords. Articulators are generated by the lips, teeth, tongue, soft palate, and jaw muscles. Voiceprint experts must compare spectrographic prints or phonetic elements to arrive at an identification.

These expert laboratory technicians are trained to make subjective conclusions, much as fingerprint or criminalistic experts must make determinations on the basis of evidence.” (emphasis supplied.) Thus, my conclusion that voice sample can be included in the inclusive definition of the term “measurements” appearing in Section 2(a) of the Prisoners Act is supported by the above-quoted observation that voiceprints are like finger prints. Section 2(a) states that measurements include finger impressions and foot impressions.

If voice prints are like finger prints, they would be covered by the term ‘measurements’. I must note that the Law Commission of India in its 87th Report referred to the book “Law Enforcement and Criminal Justice – an introduction”. The Law commission observed that voice prints resemble finger prints and made are commendation that the Prisoners Act needs to be amended. I am, therefore, of the opinion that a Magistrate acting under Section 5 of the Prisoners Act can give a direction to any person to give his voice sample for the purposes of any investigation or proceeding under the Code.

32. I shall now turn to Section 73 of the Indian Evidence Act to see whether it empowers the court to give such a direction. It reads thus: “Section 73 – Comparison of signature, writing or seal with others admitted or proved. In order to ascertain whether a signature, writing, or seal is that of the person by whom it purports to have been written or made, any signature, writing, or seal admitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing, or seal has not been produced or proved for any other purpose. The Court may direct any person present in court to write any words or figures for the purpose of enabling the Court to compare the words or figures so written with any words or figures alleged to have been written by such person.” [This section applies also, with any necessary modifications, to finger-impressions.]

33. In Ram Babu Misra, the investigating officer made an application to the Chief Judicial Magistrate, Luck now seeking a direction to the accused to give his specimen writing for the purpose of comparison with certain disputed writings. Learned Magistrate held that he had no power to do so when the case was still under investigation. His view was upheld by the High Court. This Court held that the second paragraph of Section 73enables the court to direct any person present in court to give specimen writings “for the purpose of enabling the court to compare” such writings with writings alleged to have been written by such person.

The clear implication of the words “for the purpose of enabling the court to compare” is that there is some proceeding before the court in which or as a consequence of which it might be necessary for the court to compare such writings. This Court further observed that the direction is to be given “for the purpose of enabling the court to compare” and not for the purpose of enabling the investigating or other agency to compare. While dismissing the appeal, this Court expressed that a suitable legislation may be made on the analogy of Section 5 of the Prisoners Act to provide for the investiture of Magistrates with the power to issue directions to any person including an accused person to give specimen signatures and writings.

Thus Section 73 of the Evidence Act does not empower the court to direct the accused to give his specimen writings during the course of investigation. Obviously, Section 73 applies to proceedings pending before the court. They could be civil or criminal. In view of the suggestion made by this Court by Act 25 of 2005 with effect from 23.6.2006, Section 311A was added in the Code empowering the Magistrate to order a person to give specimen signature or handwriting during the course of investigation or proceeding under theCode.

34. Section 311A of the Code reads thus: “311A. Power of Magistrate to order person to give specimen signatures or handwriting: If a Magistrate of the first class is satisfied that, for the purposes of any investigation or proceeding under this Code, it is expedient to direct any person, including an accused person, to give specimen signatures or handwriting, he may make an order to that effect and in that case the person to whom the order relates shall be produced or shall attend at the time and place specified in such order and shall give his specimen signatures or handwriting:

Provided that no order shall be made under this section unless the person has at some time been arrested in connection with such investigation or proceeding.” A bare reading of this Section makes it clear that Section 311Acannot be used for obtaining a direction from a Magistrate for taking voicesample.

35. Section 53 of the Code pertains to examination of the accused by medical practitioner at the request of a police officer. Section 53Arefers to examination of person accused of rape by medical practitioner and section 54 refers to examination of arrested person by a medical officer. Section 53 is material. It reads as under: “Section 53 – Examination of accused by medical practitioner at the request of police officer

1. When a person is arrested on a charge of committing an offence of such a nature and alleged to have been committed under such circumstances that there are reasonable grounds for believing that an examination of his person will afford evidence as to the commission of an offence, it shall be lawful for a registered medical practitioner, acting at the request of a police officer not below the rank of sub-inspector, and for any person acting in good faith in his aid and under his direction, to make such an examination of the person arrested as is reasonable necessary in order to ascertain the facts which may afford such evidence, and to use such force as is reasonably necessary for that purpose.

2. Whenever the person of a female is to be examined under this section, the examination shall be made only by, or under the supervision of, a female registered medical practitioner. Explanation:- In this section and in sections 53A and 54,

(a) “examination” shall include the examination of blood, blood stains, semen, swabs in case of sexual offences, sputum and sweat, hair samples and finger nail clippings by the use of modern and scientific techniques including DNA profiling and such other tests which the registered medical practitioner thinks necessary in a particular case;

(b) “registered medical practitioner” means a medical practitioner who possess any medical qualification as defined in clause (h) of section 2 of the Indian Medical Council Act, 1956(102 of 1956) and whose name has been entered in a State Medical Register. 1. Substituted by The Code of Criminal Procedure (Amendment) Act, 2005. Earlier the text was as under: Explanation.-In this section and in section 54, “registered medical practitioner” means a medical practitioner who possesses any recognized medical qualification as defined in clause (h) of section 2 of the Indian Medical Council Act, 1956 (102 of 1956), and whose name has been entered in a State Medical Register.

36. “In short, this section states that if a police officer feels that there are reasonable grounds for believing that an examination of the person of the accused will afford evidence as to commission of the offence, he may request a registered medical practitioner to make such examination of his person as is reasonably necessary. For such examination, it is permissible to use such force as may be reasonably necessary.

Explanation(a) to Section 53 states what is ‘examination’. It is an inclusive definition. It states that the examination shall include the examination of blood, blood stains, semen, swabs in case of sexual offences, sputum and sweat, hair samples and finger nail clippings by the use of modern and scientific techniques including DNA profiling and such other tests which the registered medical practitioner thinks necessary in a particular case. This explanation was substituted by the Code of Criminal Procedure(Amendment) Act, 2005. The question is whether with the aid of the doctrine ‘ejusdem generis’ voice sample test could be included within the scope of the term ‘examination’.

37. I am not impressed by the submission that the term “such other tests “mentioned in Explanation (a) is controlled by the words “which the registered medical practitioner thinks necessary”. It is not possible to hold that Explanation (a) vests the discretion to conduct examination of the accused in the registered medical practitioner and not in the investigating officer and therefore the doctrine of ‘ejusdem generis’ cannot be pressed into service. Under Section 53(1) the registered medical practitioner can act only at the request of a police officer. Obviously, he can have no say in the process of investigation.

The decision to get the accused examined is to be taken by the investigating officer and not by the medical practitioner. It is the expertise of the medical practitioner which the investigator uses to decide the method of the test. It would be wrong, therefore, to state that the discretion to get the accused examined vests in the medical practitioner. This submission must, therefore, be rejected.

38. It is argued that voice sample test cannot be included in the definition of ‘examination’ because in Selvi, this Court has held that Section 53 needs to be given a restrictive interpretation. I must, therefore, revisit Selvi.

39. In Selvi, it was contended that the phrase “modern and scientific techniques including DNA profiling and such other tests” should be liberally construed to include narco-analysis test, polygraph examination and the BEAP test. These tests could be read in with the help of the words” and such other tests”, because the list of “modern and scientific techniques” contemplated was illustrative and not exhaustive.

This Court observed that it was inclined to take the view that the results of the impugned tests should be treated as testimonial acts for the purpose of invoking the right against self-incrimination and, therefore, it would be prudent to state that the phrase “and such other tests” appearing in Explanation (a) to Section 53 of the Code should be read so as to confine its meaning to include only those tests which involve the examination of physical evidence. This Court accepted the submission that while bodily substances such as blood, semen, sputum, sweat, hair and finger nail clippings can be characterized as physical evidence, the same cannot be said about the techniques in question.

40. This Court reiterated the distinction between physical evidence and testimonial acts and accepted the submission that the doctrine of ‘ejusdem generis’ entails that the meaning of general words which follow specific words in a statutory provision should be construed in light of commonality between those specific words. This Court acknowledged that the substances mentioned in Explanation (a) to Section 53 are examples of physical evidence and, hence, the words “and such other tests” mentioned therein should be construed to include the examination of physical evidence but not that of testimonial acts. This Court made it clear that it was not examining what was the legislative intent in not including the tests impugned before it in the Explanation.

41. Our attention was drawn to the observation of this Court in Selvi that the dynamic interpretation of the amended Explanation to Section 53 is obstructed because the general words “and such other tests” should ordinarily be read to include tests which are of the same genus as the other forms of medical examination which are examinations of bodily substances. It is argued that voice sample is not a bodily substance like blood, sputum, finger nail clippings etc.

42. Voice emanates from the human body. The human body determines its volume and distinctiveness. Though it cannot be touched or seen like a bodily substance, being a bodily emanation, it could be treated as a part of human body and thus could be called a bodily substance. But, I feel that there is no need to stretch the meaning of the term ‘bodily substance ‘in this case. I have already expressed my opinion that voice sample is physical non-testimonial evidence. It does not communicate to the investigator any information based on personal knowledge of the accused which can incriminate him. Voice sample cannot be held to be conceptually different from physical non-testimonial evidence like blood, semen, sputum, hair etc. Taking of voice sample does not involve any testimonial responses. The observation of this Court in Selvi that it would not be prudent to read Explanation (a) to Section 53 of the Code in an expansive manner is qualified by the words “so as to include the impugned techniques”.

What must be borne in mind is that the impugned techniques were held to be testimonial and hit by Article 20(3) of the Constitution. This Court emphasized that Explanation (a) to Section 53 does not enumerate certain other kinds of medical examination that involve testimonial acts, such as psychiatric examination among others and this demonstrates that the amendment made to this provision was informed by a rational distinction between the examination of physical substances and testimonial acts. If this Court wanted to interpret Explanation (a) as referring only to bodily substances there was no reason for it to draw such distinction. Pertinently, this distinction was employed while applying the doctrine of ‘ejusdem generis’ to Section 53.

The tenor of this judgment makes it clear that tests pertaining to physical non-testimonial evidence can be included in the purview of the words “and such other tests” with the aid of the doctrine of ‘ejusdem generis’. In my opinion, Selvi primarily rests on the distinction between physical evidence of non-testimonial character as against evidence involving testimonial compulsions. The tests mentioned in Explanation (a) are of bodily substances, which are examples of physical evidence. Even if voice sample is not treated as a bodily substance, it is still physical evidence involving no transmission of personal knowledge.

On the reasoning of Selvi which is based on Kathi Kalu Oghad, I find nodifficulty in including voice sample test in the phrase “such other tests “appearing in Explanation (a) to Section 53 by applying the doctrine of’ejusdem generis’ as it is a test pertaining to physical non-testimonial evidence like blood, sputum etc. In my opinion, such interpretation of Selvi would be in tune with the general scheme of the Code which contains provisions for collection of evidence for comparison or identification at the investigation stage in order to strengthen the hands of the investigating agency.

42. It was argued that Section 53 of the Code only contemplates medical examination and taking of voice sample is not a medical examination. Section 53 talks of examination by registered medical practitioner of the person of the accused but, does not use the words “medical examination”. Similarly, Explanation (a) to Section 53 does not use the words “medical examination”. In my opinion, Section 53 need not be confined to medical examination. It is pertinent to note that in Selvi, this court was considering whether narco-analysis, polygraph examination and the BEAP tests violate Article 20(3) of the Constitution.

While examining this question, this Court analyzed Section 53 and stated that because those tests are testimonial in nature, they do not fall within the ambit of Section 53 of the Code but this Court did not restrict examination of person contemplated in Section 53 to medical examination by a medical practitioner even though the tests impugned therein were tests that were clearly not to be conducted by the medical practitioner. It must be remembered that Section 53 is primarily meant to serve as aid in the investigation. Examination of the accused is to be conducted by a medical practitioner at the instance of the police officer, who is in charge of the investigation. On a fair reading of Section 53 of the Code, I am of the opinion that under that Section, the medical practitioner can conduct the examination or suggest the method of examination.

43. I must also deal with the submission of learned counsel for the appellant that non-inclusion of voice sample in Explanation (a) displays legislative intent not to include it though legislature was aware of such test. In Selvi, this court has made it clear that it was not examining the question regarding legislative intent in not including the test impugned before it in Explanation (a). Therefore, Selvi does not help the appellant on this point.

On the contrary, in my opinion, by adding the words ‘and such other tests’ in the definition of term contained in Explanation (a) to Section 53 of the Code, the legislature took care of including within the scope of the term ‘examination’ similar tests which may become necessary in the facts of a particular case. Legislature exercised necessary caution and made the said definition inclusive, not exhaustive and capable of expanding to legally permissible limits with the aid of the doctrine of ‘ejusdem generis’. I, therefore, reject this submission.

44. Section 54A of the Code makes provision for identification of arrested persons. It states that where a person is arrested on a charge of committing an offence and his identification by any other person or persons is considered necessary for the purpose of investigation of such offence, the court having jurisdiction, may on the request of the officer in charge of a police station, direct the person so arrested to subject himself to identification by any person or persons in such manner as the court may deem fit. Identification of the voice is precondition for admission of tape recorded conversation in evidence (R.M. Malkani). Since Section 54 A of the Code uses the words “the Court, may direct the person so arrested to subject himself to identification by any person or persons in such manner as the court may deem fit”, voice sample can be identified by means of voice identification parade under Section 54A or by some other person familiar with the voice.

45. I may usefully refer to the judgment of this Court in Nilesh Paradkar v. State of Maharashtra[24] where the voice test identification was conducted by playing cassette in the presence of panchas, police officers and prosecution witnesses. This Court rejected the voice identification evidence because precautions similar to the precautions which are normally taken in visual identification of suspects by witnesses were not taken. But this court did not reject the evidence on the ground that voice identification parade is not contemplated under Section 54A of the Code. It is important to note that in Mohan Singh v. State of Bihar[25], after noticing Nilesh Paradkar, this Court held that where the witnesses identifying the voice had previous acquaintance with the caller i.e. the accused, such identification of voice can be relied upon; but identification by voice has to be considered carefully by the court. This, however, is no answer to the question of availability of a legal provision to pass an order directing the accused to give voice sample during investigation. The legal provision, in my opinion, can be traced to the Prisoners Act and Section 53 of the Code.

46. I am mindful of the fact that foreign decisions are not binding on our courts. But, I must refer to the judgment of the Supreme Court of Appeal of South Africa in Levack, Hamilton Caesar & Ors. v. Regional Magistrate, Wynberg & Anr.[26] because it throws some light on the issue involved in the case. In that case, the Magistrate had granted an order under Section 37(3) of the Criminal Procedure Act 51 of 1977 (for short, “South African Act”) directing the accused to give voice samples as specified by a named ‘voice expert’ in the presence of the legal representatives of the accused.

The object was to compare the samples with tape recordings of telephone conversations in the State’s possession, for possible later use during the trial. The accused were unsuccessful in the High Court in their challenge to the said order of the lower court. Hence, they appealed to the Supreme Court of South Africa. Under Section 37(1)of the South African Act, any police officer may take the fingerprints, palm-prints and foot-prints or may cause any such prints to be taken, interalia, of any person arrested upon any charge. Sections 37(1)(a)(i) and(ii) and Section 37(1)(c) of the South African Act read thus: “37. Powers in respect of prints and bodily appearance of accused.-

(1) Any police official may- (a) take the finger-prints, palm-prints or foot-prints or may cause any such prints to be taken- (i) of any person arrested upon any charge; (ii) of any such person released on bail or on warning under section 72; (iii) xxx xxx xxx (iv) xxx xxx xxx (v) xxx xxx xxx (b) xxx xxx xxx (c) take such steps as he may deem necessary in order to ascertain whether the body of any person referred to in paragraph (a) (i) or (ii) has any mark, characteristic or distinguishing feature or shows any condition or appearance: Provided that no police official shall take any blood sample of the person concerned nor shall a police official make any examination of the body of the person concerned where that person is a female and the police official concerned is not a female;”

The first question which fell for consideration was whether voice of a person is a characteristic or distinguishing feature of the body. The Supreme Court of South Africa considered the Oxford Dictionary meaning of ‘voice’ as ‘1. Sound formed in larynx etc. and uttered by mouth, especially human utterance in speaking, shouting, singing, etc. 2. Use of voice, utterance. 3. (Phonetic) Sound uttered with resonance of vocal chords, not with mere breath’. It observed that voice is thus a sound formed in the larynx and uttered by the mouth and emanates from and is formed by the body. Therefore, there can be no doubt that it is a ‘characteristic’ (in the sense of a distinctive trait or quality) of the human body.

Though voice sample was not specifically mentioned in Section 37, it was held that it fell within the scope of Section 37. It was observed that Section 37does not expressly mention the voice because it is one of the ‘innumerable’ bodily features that the wording expressly contemplates. Section 37 merely contemplates bodily appearance of the accused. It was further observed that it is true that the voice, unlike palm or other prints, is not itself part of the body. It is a sound. But, the sound is a bodily emanation.

And the body from which it emanates determines its timbre, volume and distinctive modulations. It was further observed that nothing in the provision suggests that the ‘distinguishing features’ it envisages should be limited to those capable of apprehension through the senses of touch and sight (or even taste or smell). Relevant observation of the Supreme Court of South Africa could be quoted. “14. Hearing is as much a mode of physical apprehension as feeling or seeing. For the sight-impaired it is indeed the most important means of distinguishing between people. It would therefore be counter- literal to interpret the section as though the ways of ‘ascertaining’ bodily features it contemplates extend only to what is visible or tangible.”

The Supreme Court of South Africa then considered the question of self-incrimination. It observed that it is wrong to suppose that requiring the accused to submit voice samples infringes their right either to remain silent in the court proceedings against them or not to give self-incriminating evidence. It was further observed that voice falls within the same category as complexion, stature, mutilations, marks and prints i.e. ‘autoptic evidence’ – evidence derived from the accused’s own bodily features. It was held that there is no difference in principle between the visibly discernible physical traits and features of an accused and those that under law can be extracted from him through syringe and vial or through the compelled provision of a voice sample. In neither case is the accused required to provide evidence of a testimonial or communicative nature, and in neither case is any constitutional right violated.

The Supreme Court of South Africa then examined as to under which provision a Magistrate could issue a direction to the accused to supply his voice samples. It observed that Section 37(1)(a)(i) and (ii) permit any police officer to take the finger-prints, palm-prints or foot-prints or may cause any such prints to be taken of any person arrested upon any charge. Section 37(1)(c) states that any police officer may take such steps as he may deem necessary in order to ascertain whether the body of any person referred to in paragraph (a) (i) or (ii) has any mark, characteristic or distinguishing feature or shows any condition or appearance.

Though ‘voice sample’ was not specifically mentioned anywhere, on a conjoin treading of the two provisions, the Supreme Court of South Africa held that the police retained the power under Section 37(1)(c) to take steps as they might deem necessary to ascertain the characteristic or distinguishing features of the accused’s voice. That included the power to request the accused to supply voice samples. The court further observed that this power, in turn, could properly be supplemented by a court order requiring the accused to do so.

47. In the ultimate analysis, therefore, I am of the opinion that the Magistrate’s power to authorize the investigating agency to record voice sample of the person accused of an offence can be traced to Section 5 of the Prisoners Act and Section 53 of the Code. The Magistrate has an ancillary or implied power under Section 53 of the Code to pass an order permitting taking of voice sample to aid investigation. This conclusion of mine is based on the interpretation of relevant sections of the Prisoners Act and Section 53 of the Code and also is in tune with the concern expressed by this court in Kathi Kalu Oghad that it is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and the law courts with legitimate powers to bring offenders to justice.

48. The principle that a penal statute should be strictly construed is not of universal application. In Murlidhar Meghraj Loya v. State of Maharashtra[27], this court was dealing with the Prevention of Food Adulteration Act, 1954. Speaking for this court, Krishna Iyer, J. held that any narrow and pedantic, literal and lexical construction of Food Laws is likely to leave loopholes for the offender to sneak out of the meshes of law and should be discouraged and criminal jurisprudence must depart from old canons defeating criminal statutes calculated to protect the public health and the nation’s wealth. Similar view was taken in Kisan Trimbak Kothula & Ors. v. State of Maharashtra[28].

In State of Maharashtra v. Natwarlal Damodardas Soni[29], while dealing with Section 135 of the Customs Act and Rule 126-H(2)(d) of the Defence of India Rules, a narrow construction given by the High Court was rejected on the ground that that will emasculate these provisions and render them ineffective as a weapon for combating gold smuggling. It was further held that the provisions have to be specially construed in a manner which will suppress the mischief and advance the object which the legislature had in view. Therefore, whether the penal statute should be given strict interpretation or not will depend on facts of each case.

Considerations of public health, preservation of nation’s wealth, public safety may weigh with the court in a given case and persuade it not to give a narrow construction to a penal statute. In the facts of this case, I am not inclined to give a narrow construction to the provisions of the Prisoners Act and Section 53 of the Code. Judicial note can be taken of the fact that there is a great deal of technological advance in means of communication. Criminals are using new methodology in committing crimes. Use of landlines, mobile phones and voice over internet protocol (VoIP) in the commission of crimes like kidnapping for ransom, extortion, blackmail and for terrorist activities is rampant.

Therefore, in order to strengthen the hands of investigating agencies, I am inclined to give purposive interpretation to the provisions of the Prisoners Act and Section 53 of the Code instead of giving a narrow interpretation to them. I, however, feel that Parliament needs to bring in more clarity and precision by amending the Prisoners Act. The Code also needs to be suitably amended. Crime has changed its face. There are new challenges faced by the investigating agency. It is necessary to note that many local amendments have been made in the Prisoners Act by several States.

Technological and scientific advance in the investigative process could be more effectively used if required amendments are introduced by Parliament. This is necessary to strike a balance between the need to preserve the right against self incrimination guaranteed under Article 20(3) of the Constitution and the need to strengthen the hands of the investigating agency to bring criminals to book.

49. In the view that I have taken, I find no infirmity in the impugned order passed by the High Court confirming the order passed by learned Chief Judicial Magistrate, Saharanpur summoning the appellant to the court for recording the sample of his voice. The appeal is dismissed.

50. Before I part with this judgment, I must express my sincere thanks to learned counsel Mr. Siddhartha Dave, Mr. Aman Ahluwalia and Mr. R.K. Dash, who have very ably assisted the court.

………………………………J. (RANJANA PRAKASH DESAI)

NEW DELHI,

DECEMBER 7, 2012.

Reportable In the Supreme Court of India
Criminal Appellate Jurisdiction
Ritesh Sinha Vs. the State of Uttar Pradesh & ANR
[Criminal Appeal No. 2003 of 2012 arising out of SLP (Criminal) No.7259 of 2010]
Aftab Alam, J. Leave granted.

1. In to-day’s world when terrorism is a hard reality and terrorist violence is a common phenomenon, the police needs all the forensic aids from science and technology. The technology is in position to-day to say whether two voice-recordings are of the same person or of two different people and, thus, to provide valuable aid in investigation. But, the question is whether the law has any provision under which a person, suspected of having committed an offence, may be compelled to give his voice sample to aid the police in investigation of the case. The next and the more important question is, in case there is no express or evidently applicable provision in law in that regard, should the court invent one by the process of interpretation. My sister Desai J. seems to think that the gap in the law is so vital that the court must step in to bridge the gap. Ihe situate to do so.

2. There are, indeed, precedents where the court by the interpretative process has evolved old laws to meet cotemporary challenges and has planted into them contents to deal with the demands and the needs of the present that could not be envisaged at the time of the making of the law. But, on the question of compelling the accused to give voice sample, the law must come from the legislature and not through the court process. First, because the compulsion to give voice sample does in some way involve an invasion of the rights of the individual and to bring it within the ambit of the existing law would require more than reasonable bending and stretching of the principles of interpretation. Secondly, if the legislature even while making amendments in the Criminal Procedure Code, aimed at strengthening the investigation, as late as in 2005, is oblivious to something as obvious as this and despite express reminders chooses not to include voice sample either in the newly introduced explanation to section 53 or in sections53A, and 311A, then it may even be contended that in the larger schemes of things the legislature is able to see something which perhaps the Court is missing.

3. Coming now to the specifics, I would briefly record my reasons for not being able to share the view taken by Desai J.

4. At the beginning of her judgment Desai J. has framed two questions that the Court is called upon to answer in this case. These are:

i. Whether Article 20(3) of the Constitution of India, which protects a person accused of an offence from being compelled to be a witness against himself, extends to protecting such an accused from being compelled to give his voice sample during the course of investigation into an offence?

ii. Assuming that there is no violation of Article 20(3) of the Constitution of India, whether in the absence of any provision in the Code, can a Magistrate authorize the investigating agency to record the voice sample of the person accused of an offence?” (emphasis added)

5. As regards the first question, relying primarily on the eleven (11)Judges’ Bench decision of this Court in State of Bombay v. Kathi Kalu Oghad & Others[30] which was followed in the more recent decision in Selvi and others v. State of Karnataka[31] she held that “taking voice sample of an accused by the police during investigation is not hit by Article 20 (3) of the Constitution.

6. “I am broadly in agreement with the view taken by her on Article 20(3) but, since I differ with her on the second question, I think the issue of constitutional validity in compelling the accused to give his/her voice sample does not really arise in this case.

7. Coming to the second question, as may be seen, it has the recognition that there is no provision in the Criminal Procedure Code to compel the accused to give his voice sample. That being the position, to my mind the answer to the question can only be in the negative, regardless of the constitutional guarantee against self-incrimination and assuming that incase a provision in that regard is made in the law that would not offend Article 20 (3) of the Constitution.

8. Desai J., however, answers the question in the affirmative by means of a learned and elaborate discourse. She has navigated the arduous course to the conclusion at which she arrived very painstakingly and skillfully.

9. First, she firmly rejects the submission advanced on behalf of the State that in the absence of any express provision in that regard, it was within the inherent and implied powers of the Magistrate to direct the accused to give his/her voice sample to ensure a proper investigation. In this regard, she observes as follows:- “In the course of investigation, the police do use force. In a country governed by rule of law police actions which are likely to affect the bodily integrity of a person or likely to affect his personal dignity must have legal sanction.

That prevents possible abuse of the power by the police. It is trite that every investigation has to be conducted within the parameters of the Code. The power to investigate into a cognizable offence must be exercised strictly on the condition on which it is granted. (State of West Bengal v. Swapan Guha). The accused has to be dealt with strictly in accordance with law. Even though, taking of physical evidence which does not amount to communicating information based on personal knowledge to the investigating officer by the accused which may incriminate him, is held to be not violative of protection guaranteed by Article 20(3), the investigating officer cannot take physical evidence from an accused unless he is authorized by a Magistrate to do so. He cannot assume powers which he does not possess. He can only act on the strength of a direction given to him by a Magistrate and the Magistrate must have power to issue such a direction.

10. “I am fully in agreement with what is said above.

11. However, having rejected the submission based on the inherent and implied powers of the Magistrate she makes a “search” for the power of the Magistrate to ask the accused to give his/her voice sample. She shortlists for that purpose (i) the provisions of the Identification of Prisoners Act,1920, (ii) Section 73 of the Evidence Act and (iii) Sections 311A and 53 of the Code of Criminal Procedure.

12. She finds and holds that Section 73 of the Evidence Act and Section311A of the Code of Criminal Procedure are of no help and those two provisions cannot be used for obtaining a direction from the Magistrate for taking voice sample and finally rests her conclusion on the provisions of The Identification of Prisoners Act, 1920 and Section 53 of the Code of Criminal Procedure.

13. Section 53 of the Code of Criminal Procedure originally read asunder:- “53. Examination of accused by medical practitioner at the request of police officer. – (1) When a person is arrested on a charge of committing an offence of such a nature and alleged to have been committed under such circumstances that there are reasonable grounds for believing that an examination of his person will afford evidence as to the commission of an offence, it shall be lawful for a registered medical practitioner, acting at the request of a police officer not below the rank of sub-inspector, and for any person acting in good faith in his aid and under his direction, to make such an examination of the person arrested as is reasonably necessary in order to ascertain the facts which may afford such evidence, and to use such force as is reasonably necessary for that purpose. (2) Whenever the person of a female is to be examined under this section, the examination shall be made only by, or under the supervision of, a female registered medical practitioner.

14. “In the year 2005, a number of amendments were made in the Criminal Procedure Code by Act 25 of 2005. Those amendments included the addition of an explanation to Section 53 and insertion of Sections 53-A and 311-A. The explanation added to Section 53 reads as under:- “[Explanation. – In this section and in sections 53A and 54, – a) “examination” shall include the examination of blood, blood stains, semen, swabs in case of sexual offences, sputum and sweat, hair samples and finger nail clippings by the use of modern and scientific techniques including DNA profiling and such other tests which the registered medical practitioner thinks necessary in a particular case; (emphasis added) b) “registered medical practitioner” means a medical practitioner who possess any medical qualification as defined in clause (h) of section 2 of the Indian Medical Council Act, 1956 (102 of 1956) and whose name has been entered in a State Medical Register.]”

15. Desai J. rejects the submission made on behalf of the appellant that “the term ‘such other tests’ mentioned in Explanation (a) is controlled by the words ‘which the registered medical practitioner thinks necessary'” and relying heavily upon the decision of this Court in Selvi holds: “by adding the words ‘and such other tests’ in the definition of term contained in Explanation (a) to Section 53 of the Code, the legislature took care of including within the scope of the term ‘examination’ similar tests which may become necessary in the facts of a particular case. Legislature exercised necessary caution and made the said definition inclusive, not exhaustive and capable of expanding to legally permissible limits with the aid of the doctrine of ‘ejusdem generis’.

16. “I am completely unable to see how Explanation (a) to Section 53 can be said to include voice sample and to my mind the ratio of the decision in Selvi does not enlarge but restricts the ambit of the expressions ‘such other tests’ occurring in the Explanation.

17. In my opinion the Explanation in question deals with material and tangible things related to the human body and not to something disembodied as voice.

18. Section 53 applies to a situation where the examination of the person of the accused is likely to provide evidence as to the commission of an offence. Whether or not the examination of the person of the accused would afford evidence as to the commission of the offence undoubtedly rests on the satisfaction of the police officer not below the rank of sub-inspector. But, once the police officer makes a request to the registered medical practitioner for the examination of the person of the accused, what other tests (apart from those expressly enumerated) might be necessary in a particular case can only be decided by the medical practitioner and not the police officer referring the accused to him. In my view, therefore, Mr. Dave, learned counsel for the appellant, is right in his submission that any tests other than those expressly mentioned in the Explanation can only be those which the registered medical practitioner would think necessary in a particular case. And further that in any event a registered medical practitioner cannot take a voice sample.

19. Apart from Section 53 of the Code of Criminal Procedure, Desai J. finds another source for the power of the Magistrate in Section 5 of the Identification of Prisoners Act, 1920. Referring to some technical literature on voice print identification, she holds: “Thus, it is clear that voiceprint identification of voice involves measurement of frequency and intensity of sound waves. In my opinion, therefore, measuring frequency or intensity of the speech-sound waves falls within the ambit of inclusive definition of the term ‘measurement’ appearing in the Prisoners Act “And further: “Thus, my conclusion that voice sample can be included in the inclusive definition of the term “measurements” appearing in Section 2(a) of the Prisoners Act is supported by the above-quoted observation that voice prints are like finger prints. Section 2(a) states that measurements include finger impressions and foot impressions. If voice prints are like finger prints, they would be covered by the term ‘measurements’.”She finally concludes: “I am, therefore, of the opinion that a Magistrate acting under Section 5 of the Prisoners Act can give a direction to any person to give his voice sample for the purposes of any investigation or proceeding under the Code.

20. “I am unable to agree.

21. In order to clearly state my views on the provisions of the Identification of Prisoners Act, I may refer to the object and the scheme of the Act. The principal object of the Act is to sanction certain coercive measures (which would otherwise invite criminal or tortuous liability) in order to facilitate the identification of (i) convicts, (ii) persons arrested in connection with certain offences, and (iii) persons ordered to give security in certain cases. The scheme of the Act is as follows. The first section relates to the short title and the extent of the Act. The second section has the definition clauses and defines ‘measurements’ and ‘prescribed’ in clauses (a) and (c) respectively which are as under: “2. Definitions. – (1) In this Act, unless there is anything repugnant in the subject or context, – iii) “measurements” include finger impressions and foot-print impressions; iv) xxx xxx xxx (c) “prescribed” means prescribed by rules made under this Act.

22. “Then there are the three substantive provisions of the Act. Section 3deals with taking of measurements, etc of convicted persons. It is asunder: “3. Taking of measurements, etc., of convicted persons. – Every person who has been – a) convicted of any offence punishable with rigorous imprisonment for a term of one year or upwards, or of any offence which would render him liable to enhanced punishment on a subsequent conviction; or b) ordered to give security for his good behaviour under section 118 of the Code of Criminal Procedure, 1898 (5 of 1898), shall, if so required, allow his measurements and photograph to be taken by a police officer in the prescribed manner.

23. “Section 4 deals with taking of measurement, etc. of non-convicted persons. It is as under: “4. Taking of measurements, etc., of non-convicted persons. – Any person who has been arrested in connection with an offence punishable with rigorous imprisonment for a term of one year or upwards shall, if so required by a police officer, allow his measurements to be taken in the prescribed manner.

24. “Section 5 deals with the power of Magistrate to order a person to be measured or photographed. It is as under: “5. Power of Magistrate to order a person to be measured or photographed. – If a Magistrate is satisfied that, for the purposes of any investigation or proceeding under the Code of Criminal Procedure, 1898 (5 of 1898), it is expedient to direct any person to allow his measurements or photograph to be taken, he may make an order to that effect, and in that case the person to whom the order relates shall be produced or shall attend at the time and place specified in the order and shall allow his measurements or photograph to be taken, as the case may be, by a police officer: Provided that no order shall be made directing any person to be photographed except by a Magistrate of the First Class: Provided further, that no order shall be made under this section unless the person has at some time been arrested in connection with such investigation or proceeding.

25. “The rest of the provisions from Section 6 to Section 9 deal with incidental or consequential matters. Section 6 deals with resistance to the taking of measurements, etc. and it is as under: “6. Resistance to the taking of measurements, etc. – (1) If any person who under this Act is required to allow his measurements or photograph to be taken resists or refuses to allow the taking of the same, it shall be lawful to use all means necessary to secure the taking thereof. (2) Resistance to or refusal to allow the taking of measurements or photograph under this Act shall be deemed to be an offence under section 186 of the Indian Penal Code (45 of 1860).

26. “Section 7 deals with destruction of photographs and records of measurements, etc., on acquittal and it is as under: “Destruction of photographs and records of measurements, etc., on acquittal. – Where any person who, not having been previously convicted of an offence punishable with rigorous imprisonment for a term of one year or upwards, has had his measurements taken or has been photographed in accordance with the provisions of this Act is released without trial or discharged or acquitted by any court, all measurements and all photographs (both negatives and copies) so taken shall, unless the court or (in a case where such person is released without trial) the District Magistrate or Sub-Divisional Officer for reasons to be recorded in writing otherwise directs, be destroyed or made over to him.

27. “Section 8 gives the State Governments the power to make rules and itis as under: “8. Power to make rules. – (1) The State Government may, [by notification in the Official Gazette,] make rules for the purpose of carrying into effect the provisions of this Act. (2) In particular and without prejudice to the generality of the foregoing provision, such rules may provide for – a) restrictions on the taking of photographs of persons under section 5; b) the places at which measurements and photographs may be taken; c) the nature of the measurements that may be taken; d) the method in which any class or classes of measurements shall be taken; e) the dress to be worn by a person when being photographed under section 3; and f) the preservation, safe custody, destruction and disposal of records of measurements and photographs. [(3) Every rule made under this section shall be laid, as soon as may be after it is made, before State Legislature.]

28. “Section 9 finally lays down the bar of suits.

29. A careful reading of Sections 3, 4 and 5 would make it clear that the three provisions relate to three categories of persons. Section 3 relates to a convicted person. Section 4 relates to a person who has been arrested in connection with an offence punishable with rigorous imprisonment for term of 1 year or upwards. Section 5 is far wider in amplitude than Sections 3 and 4 and it relates to any person, the taking of whose measurements or photographs might be expedient for the purposes of any investigation or proceeding under the Code of Criminal Procedure. In the case of the first two categories of persons, the authority to take measurements vests in a police officer but in the case of Section 5, having regard to its much wider amplitude, the power vests in a Magistrate and not in any police officer.

30. It is to be noted that the expression “measurements” occurs not only in Section 5 but also in Sections 3 and 4. Thus, if the term “measurements” is to be read to include voice sample then on arresting a person in a case relating to an offence punishable with rigorous imprisonment for a term of1 year or upwards (and voice sample would normally be required only incases in which the punishment is one year or upward!) it would be open to the police officer (of any rank) to require the arrested person to give his/her voice sample on his own and without seeking any direction from the Magistrate under Section 5.

Further, applying the same parameters, not only voice sample but many other medical tests, for instance, blood tests such as lipid profile, kidney function test, liver function test, thyroid function test etc., brain scanning etc. would equally qualify as “measurements” within the meaning of the Identification of Prisoners Act. In other words on arresting a person in a case relating to an offence punishable with rigorous imprisonment for a term of 1 year or upwards it would be possible for the police officer (of any rank) to obtain not only the voice sample but the full medical profile of the arrested person without seeking any direction from the magistrate under Section 5 of the Identification of Prisoners Act or taking recourse to the provisions of Section 53 or 53A of the Code of Criminal Procedure.

31. I find it impossible to extend the provisions of the Identification of Prisoners Act to that extent.

32. It may not be inappropriate here to point out that in exercise of the rule-making powers under Section 8 of the Identification of Prisoners Act some of the State Governments have framed rules. I have examined the rules framed by the States of Maharashtra, Madhya Pradesh, Orissa, Pondicherry and Jammu & Kashmir. From a perusal of those rules it would appear that all the State Governments understood “measurements” to mean the physical measurements of the body or parts of the body. The framing of the rules by the State Government would not be binding on this Court in interpreting a provision in the rules. But it needs to be borne in mind that unless the provision are incorporated in the Act in regard to the manner of taking voice sample and the person competent to take voice sample etc. there maybe difficulty in carrying out the direction of the Court.

33. For arriving at her conclusion regarding the scope of Section 5 of the Identification of Prisoners Act, Desai J. has considered two High Court judgments. One is of the Bombay High Court in Central Bureau of Investigation, New Delhi v. Abdul Karim Ladsab Telgi and others[32] and the other by the Delhi High Court in Rakesh Bisht v. Central Bureau of Investigation [33] she has approved the Bombay High Court decision in Telgi’s case and disapproved the Delhi High Court decision in Bisht’s case. The Bombay decision is based on exactly the same reasoning as adopted by Desai J that the definition of “measurements” in Section 2(a) is wide enough to include voice sample and hence a Magistrate is competent to ordera person to give his voice sample. The relevant passage in the decision isas under:- “Be that as it may, the expression “measurements” occurring in Section 5 has been defined in Section 2(a), which reads thus: 2. Definitions. – In that Act. (a) “measurements include finger-impressions and foot-print impressions”.

The said expression is an inclusive term, which also includes finger- impressions and foot-print impressions. Besides, the term measurement, as per the dictionary meaning is the act or an instance of measuring; an amount determined by measuring; detailed dimensions. With the development of Science and Technology, the voice sample can be analysed or measured on the basis of time, frequency, and intensity of the speech-sound waves so as to compare and identify the voice of the person who must have spoken or participated in recorded telephonic conversation. The expression “measurements” occurring in Section 5, to my mind, can be construed to encompass even the act undertaken for the purpose of identification of the voice in the tape-recorded conversation. Such construction will be purposive one without causing any violence to the said enactment, the purpose of which was to record or make note of the identity of specified persons.

34. “For the reasons discussed above, I am unable to accept the views taken in the Bombay decision and to my mind the decision in Telgi is not the correct enunciation of law.

35. The Delhi High Court decision in the case of Bisht pertains to the period prior to June 23, 2006, when the amendments made in the Code of Criminal Procedure by Act 25 of 2005 came into effect. It, therefore, did not advert to Sections 53 or 311A and considered the issue of taking voice sample of the accused compulsorily, primarily in light of Section 73 of the Indian Evidence Act, 1872. Though the decision does not refer to the provisions of the Criminal Procedure Code that came into force on June 23,2006, in my view, it arrives at the correct conclusions.

36. At this stage, I may also refer to the decision of this Court in State of Uttar Pradesh v. Ram Babu Misra[34] where the Court considered the issue whether the Magistrate had the authority to direct the accused to give his specimen writing during the course of investigation. The first thing to note in regard to this decision is that it was rendered long before the introduction of Section 311A in the Code of Criminal Procedure which now expressly empowers the Magistrate to order a person to give specimen signature or handwriting for the purposes of any investigation or any proceeding under the Code. In Ram Babu Misra the Court noted that signature and writing are excluded from the range of Section 5 of the Identification of Prisoners Act, though finger impression was included therein. In that decision the Court made a suggestion to make a suitable law to provide for the investiture of Magistrates with the power to issue directions to any person, including an accused person, to give specimen signatures and writings. The suggestions made by the Court materialized 25years later when Section 311A was introduced in the Code of Criminal Procedure.

37. The decision in Ram Babu Misra was rendered by this Court on February19, 1980 and on August 27, the same year, the Law Commission of India submitted its 87th Report which was aimed at a complete revamp of the Identification of Prisoners Act, 1920 and to update it by including the scientific advances in the aid of investigation. In Paragraph 3.16 of the Report it was observed as under: “3.16 Often, it becomes desirable to have an accused person speak for the purposes of giving to the police an opportunity to hear his voice and try to identify it as that of the criminal offender. However, if the accused refuses to furnish such voice, there is no legal sanction for compelling him to do so, and the use of force for that purpose would be illegal.” (emphasis added)

38. Further, in Paragraph 5.26 it was stated as under: “5.26 The scope of section 5 needs to be expanded in another respect. The general power of investigation given to the police under the Criminal Procedure Code may not imply the power to require the accused to furnish a specimen of his voice. Cases in which the voice of the accused was obtained for comparison with the voice of the criminal offender are known but the question whether the accused can be compelled to do so does not seem to have been debated so far in India. There is no specific statutory provision in India which expressly gives power to a police officer or a court to require an accused person to furnish a specimen of his voice.” (Emphasis added)

I am not suggesting for a moment that the above extracts are in anyway binding upon the Court but they do indicate the response of a judicial mind while reading the provisions of the Indian Prisoners Act normally, without any urge to give the expression ‘measurements’ any stretched meaning.

The Report then discussed where a provision for taking voice sample can be appropriately included; whether in the Identification of Prisoners Act or in the Evidence Act or in the Code of Criminal Procedure. It concluded that it would be appropriate to incorporate the provision by amending Section 5 of the Identification of Prisoners Act as follows:

“(1) If a Magistrate is satisfied that, for the purpose of any investigation or proceeding under the Code of Criminal Procedure, 1973, it is expedient to direct any person –

a) to allow his measurements or photograph to be taken, or

b) to furnish a specimen of his signature or writing, or

c) to furnish a specimen of his voice by uttering the specified words or making the specified sounds. the Magistrate may make an order to that effect, recording his reasons for such an order.

(2) The person to whom the order relates –

a) shall be produced or shall attend at the time and place specified in the order, and

b) shall allow his measurements or photograph to be taken by a police officer, or furnish the specimen signature or writing or furnish a specimen of his voice, as the case may be in conformity with the orders of the Magistrate before a police officer. 3) No order directing any person to be photographed shall be made except by a metropolitan Magistrate or a Magistrate of the first class.

4) No order shall be made under this section unless the person has at some time been arrested in connection with such investigation or proceeding.

5) Where a court has taken cognizance of an offence a Magistrate shall not under this section, give to the person accused of the offence any direction which could, under section 73 of the Indian Evidence Act 1872, be given by such Magistrate.

“41. The Report as noted was submitted in 1980. The Code of Criminal Procedure was amended in 2005 when the Explanation was added to Section 53and Sections 53A and 311A were inserted into the Code. Voice sample was not included either in the Explanation to Section 53 or Section 311A.

42. Should the Court still insist that voice sample is included in the definition of “measurements” under the Identification of Prisoners Act andin the Explanation to Section 53 of the Code of Criminal Procedure? I would answer in the negative.

43. In light of the above discussion, I respectfully differ from the judgment proposed by my sister Desai J. I would allow the appeal and set aside the order passed by the Magistrate and affirmed by the High Court.

44. Let copies of this judgment be sent to the Union Law Minister and the Attorney General and their attention be drawn to the issue involved in thecase.45. In view of the difference of opinion between us, let this case be listed for hearing before a bench of three Judges after obtaining the necessary direction from the Honourable the Chief Justice of India.

…………………………….J. (Aftab Alam)

New Delhi;

December 7, 2012

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A.K.SIKRI C.J.(Oral)

The instant petition by way of public interest litigation filed under Articles 226 of the Constitution of India seeks the following reliefs:- “i) direct the respondents that in order to ensure independence of the Armed Forces Tribunal, the functioning of the said Tribunal may be supervised by the Ministry of Law & Justice rather than being placed under the Ministry of Defence as the parent Ministry as is the case at present, in line with the directions of the Hon’ble Supreme Court in Union of India Vs. R. Gandhi since the Armed Forces Tribunal Act, 2007, nowhere grants power to the Ministry of Defence to take over the rule making powers, authority, functioning, appointments, infrastructure, manpower or administrative support of the Tribunal and the term ‘Central Government, as existing in the Act can solely mean the Ministry of Law & Justice in consonance with the above decision of the Hon’ble Supreme Court and in light of the Constitutional Allocation of Business Rules which place ‘Administration of Justice’ in the singular domain of Ministry of Law & Justice;
ii) direct the respondents to ensure processing of appointments of Judicial Members of the Tribunal in a time bound manner especially in case of the Chandigarh Bench which has the heaviest workload in the country and largest area under its jurisdiction and where only one (1) Court out of three (3) is functional and that too particularly;
iii) direct the respondents to provide proper courtesy, protection, infrastructure and security to the institution of the Tribunal, more so in light of the fact that it is performing Criminal Appellate functions besides original jurisdiction, in line with the directions of the Hon’ble Supreme Court in re; Incident Related to Criminal intimidation to Member of CAT Vs. UOI (Writ Petition (Criminal) No. 23 of 2008 decided on 25.08.2009) with a further prayer that proper facilities including accommodation may be provided to members to ensure that they are able to render service in a judicial capacity in a free, fair and fearless environment devoid of any pressures or encumbrances;
iv) direct the respondent no.1 to look into all issues raised in the instant petition by way of constitution of an independent committee to analyse and to sensitize and rein in the functioning of respondent No.2 as far as issues related to litigation involving defence personnel, disabled soldiers and widows are concerned.”
2. In nut shell, this petition seeks the following directions:-
a) the functioning of the Armed Forces Tribunal (AFT) be brought under the supervision of Ministry of Law & Justice instead of Ministry of Defence at present.
b) The appointments of judicial members of the Tribunal at the Chandigarh Bench be made immediately.
c) Proper infrastructure and security be provided to the institution of AFT and its members including facility of residential accommodation.

3. It is a matter of record that the idea of AFT initially germinated as a result of the observations of the Hon’ble Supreme Court in Lt. Col. Priti Pal Singh Bedi Vs. Union of India 1982 AIR 1413 wherein the Hon’ble Supreme Court emphasized the requirement of an independent judicial body to deal with law related to military personnel. Through the march of time and various reports of numerous committees and commissions, including the law commission, the idea culminated into the formation of the AFT through the Armed Forces Tribunal Act, 2007 (for short ‘the Act’). The cardinal principle behind all such reports and observations of the Courts and also the statement of objects and reasons was singular, that is, ‘Independence’.

4. As may be seen from the Act, Sections 1(2) and 4, the Tribunal is to be established by the Central Government, that is, the Government of India, without any mention of the Ministry that would be dealing with the establishment, functioning, infrastructure and other ancillary modalities of the said Tribunal. Needless to say, since the function of the Tribunal is purely judicial and adjudicatory, keeping in view the doctrine of separation of powers inherently ingrained in our Constitutional System, the Government per se ideally should have minimal say in the functioning of the Tribunal.

5. The Act only prescribes for the establishment of the Tribunal by the Central Government, it does not mention as to which Ministry of the Central Government should or would wield control over the Tribunal or whether it would be the Ministry of Law and Justice or some other Ministry. The Act also enjoins upon the Central Government the power to make Rules vide Section 41 of the Act. Again, it is not prescribed whether the term Central Government would refer to the Ministry of Law & Justice or some other Ministry. It is however, manifest that ‘Administration of Justice’ is a subject matter of the Department of Justice under the Ministry of Law and Justice as per the Constitutional Allocation of Business Rules.
Notwithstanding the above, the petitioner complains that for reasons best known to the respondents, the Ministry of Defence has been made the Parent Administrative Ministry of the AFT and is wielding all pervasive control over the Tribunal and is also the Rules Making and Appointment Authority not only for the staff but also of the Judicial and Administrative Members of the Tribunal.

6. According to the petitioner, this is patently incorrect and is also in teeth of the judgment of the Hon’ble Apex Court in Union of India Vs. R.Gandhi, President, Madras Bar Association 2010(6) SCR 857 wherein the Supreme Court in no uncertain and definite terms has held and passed positive directions that Tribunals shall only be provided in support by the Ministry of Law & Justice and not under any parent Department, the issue is related to which it is adjudicating. Following observations from the said judgment infact clinch the issue:-

“Recommendations for better working of Tribunals
20. Only if continued judicial independence is assured, Tribunals can discharge judicial functions. In order to make such independence a reality, it is fundamental that the members of the Tribunal shall be independent persons, not civil servants. They should resemble courts and not bureaucratic Boards. Even the dependence of Tribunals on the sponsoring or parent department for infrastructural facilities or personnel may undermine the independence of the Tribunal (vide : Wade & Forsyth : `Administrative Law’ – 10th Edn., pp.774 and 777).

21. The Leggatt Committee’s Report explained the task of improving the Tribunals thus:

“There are 70 different administrative tribunals in England and Wales, leaving aside regulatory bodies. Between them they deal with nearly one million cases a year, and they employ about 3,500 people. But of these 70 tribunals only 20 each hear more than 500 cases a year and many are defunct. Their quality varies from excellent to inadequate. Our terms of reference require them to be rendered coherent. So they have to be rationalized and modernized; and this Review has as its four main objects: first, to make the 70 tribunals into one Tribunals System that its members can be proud of; secondly, to render the tribunals independent of their sponsoring departments by having them administered by one Tribunals Service; thirdly, to improve the training of chairmen and members in the interpersonal skills peculiarly required by tribunals; and fourthly, to enable unrepresented users to participate effectively and without apprehension in tribunal proceedings.”

The Leggatt Committee explained what the users of the system expected from an alternative public adjudication system:

“We do not believe that the current arrangements meet what the modern user needs and expects from an appeal system running in parallel to the courts. First, users need to be sure, as they currently cannot be, that decisions in their cases are being taken by people with no links with the body they are appealing against. Secondly, a more coherent framework for tribunals would create real opportunities for improvement in the quality of services that can be achieved by tribunals acting separately. Thirdly, that framework will enable them to develop a more coherent approach to the services which users must receive if they are to be enabled to prepare and present cases themselves. Fourthly, a user-oriented service needs to be much clearer than it is now in telling users what services they can expect, and what to do if the standards of these services are not met.”

The Leggatt Committee expressed the view that a single structure for all Tribunals would achieve independence and effective functioning of the Tribunal. It stated:

“There is only one way to achieve independence and coherence: to have all the tribunals supported by a Tribunals Service, that is, a common administrative service. It would raise their status, while preserving their distinctness from the courts. In the medium term it would yield considerable economies of scale, particularly in relation to the provision of premises for all tribunals, common basic training, and the use of IT. It would also bring greater administrative efficiency, a single point of contact for users, improved geographical distribution of tribunal centres, common standards, an enhanced corporate image, greater prospects of job satisfaction, a better relationship between members and administrative staff, and improved career patterns for both on account of the size and coherence of the Tribunals Service. It should be committed by Charter to provide a high quality, unified service, to operate independently, to deal openly and honestly with users of tribunals, to seek to maintain public confidence, and to report annually on its performance.” The report expressed the view that the independence of tribunals would best be safeguarded by having their administrative support provided by the Lord Chancellor’s Department as he is uniquely placed to protect the independence of those who sit in tribunals as well as of the judiciary, through a Tribunals Service and a Tribunals System analogous with, but separate from, the Court Service and the courts. Most of the recommendations of the Leggatt Report were accepted and culminated in the `Tribunals, Courts & Enforcement Act, 2007′. The Act recognizes that Tribunals do not form part of administration, but are machinery of adjudication. As a result of the said Act, the appointments to Tribunals are on the recommendations of a Judicial Appointments Commission. The sponsoring Department (that generates the disputes that the Tribunal will have to decide) has no say in the appointments. Neither the infrastructure nor the staff are provided to the Tribunals by the sponsoring Parent Department. The Tribunals have become full-fledged part of Judicial system with no connection or link with the `parent department’. A common Tribunal service has been established as an executing agency in the Ministry of Law & Justice.”

22. This Court, in L. Chandra Kumar, made similar suggestions for achieving the independence of Tribunals:

“It has been brought to our notice that one reason why these Tribunals have been functioning inefficiently is because there is no authority charged with supervising and fulfilling their administrative requirements…. The situation at present is that different Tribunals constituted under different enactments are administered by different administrative departments of the Central and the State Governments. The problem is compounded by the fact that some Tribunals have been created pursuant to Central Legislations and some others have been created by State Legislations. However, even in the case of Tribunals created by Parliamentary legislations, there is no uniformity in administration. We are of the view that, until a wholly independent agency for the administration of all such Tribunals can be set-up, it is desirable that all such Tribunals should be, as far as possible, under a single nodal Ministry which will be in a position to oversee the working of these Tribunals. For a number of reasons that Ministry should appropriately be the Ministry of Law. It would be open for the Ministry, in its turn, to appoint an independent supervisory body to oversee the working of the Tribunals. This will ensure that if the President or Chairperson of the Tribunal is for some reason unable to take sufficient interest in the working of the Tribunal, the entire system will not languish and the ultimate consumer of justice will not suffer. The creation of a single umbrella organisation will, in our view, remove many of the ills of the present system. If the need arises, there can be separate umbrella organisations at the Central and the State levels. Such a supervisory authority must try to ensure that the independence of the members of all such Tribunals is maintained. To that extent, the procedure for the selection of the members of the Tribunals, the manner in which funds arc allocated for the functioning of the Tribunals and all other consequential details will have to be clearly spelt out.”

23. But in India, unfortunately Tribunals have not achieved full independence. The Secretary of the concerned `sponsoring department’ sits in the Selection Committee for appointment. When the Tribunals are formed, they are mostly dependant on their sponsoring department for funding, infrastructure and even space for functioning. The statutes constituting Tribunals routinely provide for members of civil services from the sponsoring departments becoming members of the Tribunal and continuing their lien with their parent cadre. Unless wide ranging reforms as were implemented in United Kingdom and as were suggested by Chandra Kumar are brought about, Tribunals in India will not be considered as independent.

Whether the Government can transfer the judicial functions traditionally performed by courts to Tribunals?

7. That while summing up the law related to functioning of almost all Tribunals in the country and not just of the Company Law Appellate Tribunal which was the subject matter of the petition, the Supreme Court passed the following directions in paragraph No. 56 of the aforesaid judgment cited supra:-
“(xiii) The administrative support for all Tribunals should be from the Ministry of Law & Justice. Neither the Tribunals nor its members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or concerned Department.”

8. On the strength of the abovestated observations and dicta of the Supreme Court in R.Gandhi’s case (supra), the petitioner has prayed that control of the Administrative Ministry namely Ministry of Defence be removed and Armed Forces Tribunal should come under the supervision of Department of Justice under the Ministry of Law & Justice.

9. These issues hardly need any adjudication in view of the positive stand taken by the Ministry of Law & Justice as well as the Ministry of Defence. Ministry of Law & Justice has, in its reply, supported this plea of bringing the Armed Forces Tribunal under its jurisdiction. It has referred to the another seven Judges Bench of Hon’ble Supreme Court in L. Chandra Kumar Vs. Union of India and others AIR 1997 Supreme Court 1125 wherein the Hon’ble Supreme Court had considered the functioning of various Tribunals and observed that there is no uniformity in administration in case of Tribunals created by Parliamentary Legislations. Following specific averments are made by the Ministry of Law & Justice in para No.2 thereof. The Apex Court further observed that unless a wholly independent agency of all such Tribunals is set up, it is desirable that all such Tribunals, as far as possible, be under a single Nodal Ministry, which will be in a position to oversee the working of these Tribunals. For a number of reasons that Ministry should appropriately be the Ministry of Law. It should be open for the Ministry, in turn, to appoint an independent supervisory body to oversee the working of the Tribunals. The creation of a single umbrella organization will remove many of the ills of the present system. The relevant extracts of the aforesaid judgments are reproduced as follows:-

“The situation at present is that different Tribunals constituted under different enactments are administered by different administrative departments of the Central and the State Governments. The problem is compounded by the fact that some Tribunals have been created pursuant to Central Legislations and some others have been created by State Legislations. However, even in the case of Tribunals created by Parliamentary legislations, there is no uniformity in administration. We are of the view that, until a wholly independent agency for the administration of all such Tribunals can be set-up, it is desirable that all such Tribunals should be, as far as possible, under a single nodal Ministry which will be in a position to oversee the working of these Tribunals. For a number of reasons that Ministry should appropriately be the Ministry of Law. It would be open for the Ministry, in its turn, to appoint an independent supervisory body to oversee the working of the Tribunals. This will ensure that if the President or Chairperson of the Tribunal is for some reason unable to take sufficient interest in the working of the Tribunal, the entire system will not languish and the ultimate consumer of justice will not suffer. The creation of a single umbrella organisation will, in our view, remove many of the ills of the present system. If the need arises, there can be separate umbrella organisations at the Central and the State levels. Such a supervisory authority must try to ensure that the independence of the members of all such Tribunals is maintained. To that extent, the procedure for the selection of the members of the Tribunals, the manner in which funds arc allocated for the functioning of the Tribunals and all other consequential details will have to be clearly spelt out.

The suggestions that we have made in respect of appointments to Tribunals and the supervision of their administrative function need to be considered in detail by those entrusted with the duty of formulating the policy in this respect. That body will also have to take into consideration the comments of experts bodies like the LCI and the Malimath Committee in this regard. We, therefore, recommend that the Union of India initiate action in this behalf and after consulting all concerned, place all these Tribunals under one single nodal department, preferably the Legal Department.”

10. It is further stated in the affidavit that acting on the aforesaid observations/recommendations of the Supreme Court, the Department of Legal Affairs and Department of Justice have made the efforts since 1997 to set up a Central Tribunal Division (CTD) in the Ministry for the limited purpose of bringing umbrella legislation in respect of tenure, terms and conditions of service of office bearers of the Tribunals and to deal with the matters relating to the code of conduct, enquiry into complaints or allegations against them. It is also emphasized that several attempts have been made to collect information about the Tribunals and move the proposal for decision by the competent authority for setting of a CTD. However, no success has been achieved as most of the Ministries/Departments presently dealing with the Tribunals, have not favoured the proposal for creation of CTD to deal with all the Tribunals. Reference is also made to the judgment in R.Gandhi’s case (supra) which has observed that “unless wide ranging reforms as were implemented in United Kingdom and as were suggested by L. Chandra Kumar are brought out, Tribunals in India will not be considered as independent”. The tenor of this affidavit is that these Tribunals including Armed Forces Tribunal should be brought under the Department of Justice in the Ministry of Law and Justice.

11. Though the Department of Justice may not have so far succeeded in convincing other Ministries/Departments about setting of CTD, in the reply filed by the Ministry of Defence, it has asserted that wherever the provisions of the Act referred to ‘Central Government’ in the context of this Act, it would mean Ministry of Defence. Following pertinent response is given in the affidavit with reference to the judgment of the Supreme Court in R.Gandhi’s case (supra):-

“The petitioner has also stated that the functioning of the AFT may be supervised by Ministry of Law and Justice rather than Ministry of Defence and has quoted the directions of the Apex Court in Union of India Vs. R.Gandhi. In this regard, it is stated that on the directions of the Apex Court for constitution of an institution/system for all Tribunals to achieve independence and effective functioning of Tribunals, Department of Justice under Ministry of Law & Justice had already circulated a Draft Note for the Cabinet on the subject of “Setting up of a Central Tribunal Division” for comments of various Ministries/Departments. Ministry of Defence conveyed to Ministry of Law & Justice in February, 2011 that this Ministry broadly agreed with the proposal made in the Draft Cabinet Note regarding setting up of a Central Tribunal Division and that Division should exercise the administrative and not judicial oversight over the functions of the Tribunals. Further, the subject matter of the Armed Forces Tribunal and any amendments thereof would continue to be dealt with by the Ministry of Defence.”

12. Thus, it is categorically stated that insofar as the Ministry of Defence is concerned, it agrees with the proposal of setting of CTD. Even otherwise, as far as the position in law is concerned, the same is amply clear from the mandate of Supreme Court in L. Chandra Kumar’s and R.Gandhi’s cases (supra) which is the law declared by the Supreme Court and is binding on all concerned under Article 141 of the Constitution.

13. Thus, insofar as the Armed Forces Tribunal is concerned, there is hardly any issue that it be brought within the control of Department of Justice in the Ministry of Law & Justice. Mechanism for control over the Armed Forces Tribunal can be worked out by the Department of Justice in the Ministry of Law & Justice. Accordingly, we issue a direction to this effect.

14. Insofar as filling up of the posts of the members of the Tribunal are concerned, we may point out that Rule 3 of the Armed Forces Tribunal (Procedure for Appointment of Vice-Chairperson and other Members) Rules, 2008, deals with the constitution of the Selection Committee for making such appointments, which reads as under:-
a) Sitting Judge of the Supreme Court Chairperson nominated by the CJI.
b) Chairperson, Armed Forces Tribunal: Member.
c) Secretary to the Government of India, Member Ministry of Defence.
d) Secretary, Government of India, Member Ministry of Law & Justice, Department of Legal Affairs.”

15. Once the Armed Forces Tribunal is brought under the Ministry of Law & Justice, any amendment to be made in Rule 3 of the aforesaid Rules, can also be carried out as a consequence thereof.

16. As far as filling up of the vacancies of Chandigarh Bench are concerned, it is pointed out that earlier two vacancies of judicial members out of three judicial members were vacant. However, one of the two vacancies has since been filled up on the joining of said members’ w.e.f. 15.06.2012. As regards other vacancies which fell vacant on 28.01.2012, it is stated that a candidate was recommended but he declined to join and thereafter the wait listed candidate too declined to join. The vacancy was recirculated in June, 2012; meeting of Selection Committee was held on 22.08.2012 for selection of suitable candidates and further action is being taken to fill up the vacancy at the earliest. We hope that this would be done in near future and all the vacancies of three judicial members would stand filled up.

We thus dispose of this writ petition in the aforesaid terms with the direction to the respondents to take immediate steps on the lines stated above.

(A.K.SIKRI)
CHIEF JUSTICE

20.11.2012 (RAKESH KUMAR JAIN)
‘ravinder’ JUDGE

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7019 OF 2005

Bharat Aluminium Co. …Appellant
VERSUS
Kaiser Aluminium Technical Service, Inc. …Respondent
WITH
CIVIL APPEAL NO.6284 OF 2004
M/s. White Industries Australia Ltd. …Appellant
VERSUS
Coal India Ltd. …Respondent
WITH
CIVIL APPEAL NO.3678 OF 2007
Bharat Aluminium Co. Ltd. …Appellant
VERSUS
Kaiser Aluminium Technical Service, Inc. …Respondent
WITH
TRANSFERRED CASE (C) NO.35 OF 2007
Harkirat Singh …Petitioner
VERSUS
Rabobank International Holding B.V. …Respondent
WITH
SPECIAL LEAVE PETITION (C) NOS. 3589-3590 of 2009
Tamil Nadu Electricity Board …Petitioner
VERSUS
M/s. Videocon Power Limited & Anr. …Respondents
WITH
SPECIAL LEAVE PETITION (C) NOS. 31526-31528 of 2009
Tamil Nadu Electricity Board …Petitioner
VERSUS
M/s. Videocon Power Ltd. & Anr. …Respondents
WITH
SPECIAL LEAVE PETITION (C) NO. 27824 of 2011 Bharati Shipyard Ltd. …Petitioner
VERSUS
Ferrostaal AG & Anr. …Respondents
WITH
SPECIAL LEAVE PETITION (C) NO. 27841 of 2011 Bharati Shipyard Ltd. …Petitioner
VERSUS
Ferrostaal AG & Anr. …Respondents

JUDGMENT

SURINDER SINGH NIJJAR, J.

1. Whilst hearing C.A. No. 7019 of 2005, a two Judge Bench of this Court, on 16th January, 2008, passed the following order:-

“In the midst of hearing of these appeals, learned counsel for the appellant has referred to the threeJudges Bench decision of this Court in Bhatia International Vs. Bulk Trading S.A. & Anr., (2002) 4 SCC 105. The said decision was followed in a recent decision of two Judges Bench in Venture Global Engineering Vs. Satyam Computer Services Ltd. & Anr. 2008 (1) Scale 214. My learned brother Hon’ble Mr. Justice Markandey Katju has reservation on the correctness of the said decisions in view of the interpretation of Clause (2) of Section 2 of the Arbitration and Conciliation Act, 1996. My view is otherwise. Place these appeals before Hon’ble CJI for listing them before any other Bench.”

2. Pursuant to the aforesaid order, the appeal was placed for hearing before a three Judge Bench, which by its order dated st November, 2011 directed the matters to be placed before the Constitution Bench on 10th January, 2012.

3. Since the issue raised in the reference is pristinely legal, it is not necessary to make any detailed reference to the facts of the appeal. We may, however, notice the very essential facts leading to the filing of the appeal. An agreement dated 22nd April, 1993 was executed between the appellant and the respondent, under which the respondent was to supply and install a computer based system for Shelter Modernization at Balco’s Korba Shelter. The agreement contained an arbitration clause for resolution of disputes arising out of the contract. The arbitration clause contained in Articles 17 and 22 was as under :

“Article 17.1 – Any dispute or claim arising out of or
relating to this Agreement shall be in the first
instance, endeavour to be settled amicably by
negotiation between the parties hereto and failing
which the same will be settled by arbitration
pursuant to the English Arbitration Law and
subsequent amendments thereto.

Article 17.2 – The arbitration proceedings shall be carried out by two Arbitrators one appointed by BALCO and one by KATSI chosen freely and without any bias. The court of Arbitration shall be held wholly in London, England and shall use English language in the proceeding. The findings and award of the Court of Arbitration shall be final and binding upon the parties.

Article 22 – Governing Law – This agreement will be governed by the prevailing law of India and in case of Arbitration, the English law shall apply.”

4. The aforesaid clause itself indicates that by reason of the agreement between the parties, the governing law of the agreement was the prevailing law of India. However, the settlement procedure for adjudication of rights or obligations under the agreement was by way of arbitration in London and the English Arbitration Law was made applicable to such proceedings. Therefore, the lex fori for the arbitration is English Law but the substantive law will be Indian Law.

5. Disputes arose between the parties with regard to the performance of the agreement. Claim was made by the appellant for return of its investment in the modernization programme, loss, profits and other sums. The respondent made a claim for unclaimed instalments plus interest and damages for breach of intellectual property rights. Negotiations to reach a settlement of the disputes between the parties were unsuccessful and a written notice of request for arbitration was issued by the respondent to the appellant by a notice dated 13th November, 1997. The disputes were duly referred to arbitration which was held in England. The arbitral tribunal made two awards dated 10th November, 2002 and 12th November, 2002 in England. The appellant thereafter filed applications under Section 34 of the Arbitration Act, 1996 for setting aside the aforesaid two awards in the Court of the learned District Judge, Bilaspur which were numbered as MJC Nos. 92 of 2003 and 14 of 2003, respectively. By an order dated 20th July, 2004, the learned District Judge, Bilaspur held that the applications filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Arbitration Act, 1996’) for setting aside the foreign awards are not tenable and accordingly dismissed the same.

6. Aggrieved by the aforesaid judgment, the appellant filed two miscellaneous appeals being Misc. Appeal Nos. 889 of 2004 and Misc. Appeal No.890 of 2004 in the High Court of Judicature at Chattisgarh, Bilaspur. By an order dated 10th August, 2005, a Division Bench of the High Court dismissed the appeal. It was held as follows:

“For the aforesaid reasons, we hold that the applications filed by the appellant under Section 34 of the Indian Act are not maintainable against the two foreign awards dated 10.11.2002 and 12.11.2002 and accordingly dismiss Misc. Appeal No.889 of 2004 and Misc. Appeal No.890 of 2004, but order that the parties shall bear their own costs.”

The aforesaid decision has been challenged in this appeal.

7. We may also notice that number of other appeals and special leave petitions as well as transferred case were listed alongwith this appeal. It is not necessary to take note of the facts in all matters.

8. We may, however, briefly notice the facts in Bharati Shipyard Ltd. Vs. Ferrostaal AG & Anr. in SLP (C) No.27824 of 2011 as it pertains to the applicability of Section 9 of the Arbitration Act, 1996. In this case, the appellant, an Indian Company, entered into two Shipbuilding Contracts with respondent No.1 on 16th February, 2007. The appellant was to construct vessels having Builders Hull No.379 which was to be completed and delivered by the appellant to the respondent No.1 within the time prescribed under the two Shipbuilding Contracts. The agreement contained an arbitration clause. The parties initially agreed to get their disputes settled through arbitral process under the Rules of Arbitration of the International Chamber of Commerce (ICC) at Paris, subsequently, mutually agreed on 29th November, 2010 to arbitration under the Rules of London Maritime Arbitrators Association (LMAA) in London. This agreement is said to have been reached between the parties in the interest of saving costs and time. Prior to agreement dated 29th November, 2010 relating to arbitration under LMAA Rules, respondent No.1 had filed two requests for arbitration in relation to both the contracts under Article 4 of ICC Rules on 12th November, 2010 recognizing that the seat of arbitration is in Paris and the substantive law applicable is English Law. In its requests for arbitration, respondent No.1 had pleaded in paragraphs 25 and 26 as under:

“Applicable Law:
25. The Contract Clause “Governing Law, Dispute and Arbitration Miscellaneous” provides that the Contract shall be governed by the Laws of England.” The rights and obligations of the parties are therefore to be interpreted in light of English Law (the applicable law).

26. In summary:

a) disputes arising out of the Contract between the parties are to be resolved by arbitration under the ICC Rules;

b) the seat of arbitration is Paris; and

c) the substantive law to be applied in the arbitration shall be English Law.”

9. Subsequently, in view of the agreement dated 29th November, 2010, the first respondent submitted two requests for arbitration under LMAA Rules in London on 4 th February, 2011. During the pendency of the aforesaid two requests, on 10th November, 2010, the first respondent filed two applications under Section 9 of the Arbitration Act, 1996 which are numbered as AA.No.6/2010 and AA.No.7/2010 seeking orders of injunction against the encashment of refund bank guarantees issued under the contracts.

10. Learned District Judge, Dakshina Kannada, Mangalore granted an ex parte ad interim injunction in both the applications restraining the appellant from encashing the bank guarantee on 16th November, 2010. The appellant appeared and filed its statement of objections. After hearing, the learned District Judge passed the judgments and orders on 14th January, 2011 allowing the applications filed by respondent No.1 under Section 9 of the Arbitration Act, 1996.

11. Both the orders were challenged in the appeals by the appellant before the High Court of Karnataka at Bangalore. By judgment and order dated 9 th September, 2011, the High Court allowed the appeal and set aside the orders passed by the District Judge dated 14th January, 2011. In allowing the appeal, the High Court held as follows:

“From the above, it is clear that respondent No.1 is not remedyless (sic). It is already before the Arbitral Tribunal at London. Thus, it is open for it to seek interim order of injunction for the purpose of preserving the assets as per Section 44 of the Arbitration Act, 1996 in Courts at London. Since the parties have agreed that substantive law governing the contract is English Law and as the law governing arbitration agreement is English Law, it is open for respondent No.1 to approach the Courts at England to seek the interim relief.”

12. This special leave petition was filed against the aforesaid judgment of the High Court.

13. We have heard very lengthy submissions on all aspects of the matter. All the learned counsel on both sides have made elaborate references to the commentaries of various experts in the field of International Commercial Arbitration. Reference has also been made to numerous decisions of this Court as well as the Courts in other jurisdictions.

14. Mr. C.A. Sundaram, appearing for the appellants in C.A. No. 7019 of 2005 submits that primarily the following five questions would arise in these cases:- (a) What is meant by the place of arbitration as found in Sections 2(2) and 20 of the Arbitration Act, 1996?; (b) What is the meaning of the words

“under the law of which the award is passed” under Section 48 of the Arbitration Act, 1996 and Article V(1)(e) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as “the New York Convention”)?; (c) Does Section 2(2) bar the application of Part I of the Arbitration Act, 1996 (Part I for brevity) to arbitrations where the place is outside India?; (d) Does Part I apply at all stages of an arbitration, i.e., pre, during and post stages of the arbitral proceedings, in respect of all arbitrations, except for the areas specifically falling under Parts II and III of the Arbitration Act, 1996 (Part II and Part III hereinafter)?; and (e) Whether a suit for preservation of assets pending an arbitration proceeding is maintainable?

15. Mr. Soli Sorabjee, Mr. Sundaram, Mr. Gopal Subramanium and Dr. A.M. Singhvi, learned Senior Advocates for the appellants have in unison emphasised that Part I and Part II are not mutually exclusive. They have submitted that the Arbitration Act, 1996 has not “adopted or incorporated the provisions of Model Law”. It has merely “taken into account” the Model Law. They have made a reference to the judgments of this Court in the case of Konkan Railway Corporation Ltd. & Anr. Vs. Rani Construction Pvt. Ltd.1 and SBP & Co. Vs. Patel Engineering Ltd. & Anr.2 It is emphasised that in fact the Arbitration Act, 1996 differs from the UNCITRAL Model Law on certain vital aspects. It is pointed out that one of the strongest examples is the omission of the word “only” in Section 2(2), which occurs in corresponding Article 1(2) of the Model Law. The absence of the word “only” in Section 2(2) clearly signifies that Part I shall compulsorily apply if the place of arbitration is in India. It does not mean that Part I will not apply if place of arbitration is not in India.

16. Mr. Sorabjee has emphasised that the omission of word “only” in Section 2(2) is not an instance of “CASUS OMISSUS”. The omission of the word clearly indicates that Model Law has not been bodily adopted by the Arbitration Act, 1996. All the learned senior counsel seem to be agreed that the Arbitration Act, 1996 has to be construed by discerning the intention of the Parliament from the words and language used, i.e., the provisions of the said Act have to be construed literally without the addition of any word to any provision. Therefore,
the missing word “only” can not be supplied by judicial

interpretation. In support of the submission, reliance is placed on Nalinakhya Bysack Vs. Shyam Sunder Haldar & Ors 3. Magor & St. Mellons RDC Vs. Newport Corporation 4 , Punjab Land Devl. & Reclamation Corporation Ltd. Vs. Presiding Officer, Labour Court 5 and Duport Steels Ltd. Vs. Sirs6 . It is pointed out by Mr. Sorabjee that the doctrine of ironing out the creases does not justify the substitution of a new jacket in place of the old, whose creases were to be ironed out.

17. All the learned counsel for the appellants have emphasised that the Arbitration Act, 1996 has not adopted the territorial criterion/principle completely, party autonomy has been duly recognized. This, according to the learned counsel, is evident from the provisions in Sections 2(1)(e), 2(5), 2(7), 20 and 28. It is submitted that restricting the operation of Part I only to arbitration which takes place in India would lead to reading words into or adding words to various provisions contained in the Arbitration Act, 1996. It is emphasised that restricting the applicability of Part I to arbitrations which take place only in India would render the provisions in Sections 2(5), 2(7) and 20 redundant. Mr. Sundaram has reiterated that expression “place” in Sections 2(2) and Section 20 has to be given the same meaning. Section 20 of the Arbitration Act, 1996 stipulates that parties are free to agree on the place of arbitration outside India. Therefore, arbitrations conducted under Part I, may have geographical location outside India. Similarly, if Part I was to apply only where the place of arbitration is in India then the words “Where the place of arbitration is situated in India” in Section 28(1) were wholly unnecessary. Further, the above words qualify only Sub-section (1) of Section 28 and do not qualify Sub-section (3). The necessary implication is that Sub-section (3) was intended to apply even to foreign-seated arbitration so long as parties have chosen Arbitration Act, 1996 as law of the arbitration, which could only be if Part I is to apply to such arbitration. Therefore, it is submitted by the learned counsel that the ‘seat’ is not the “centre of gravity” as far as the Arbitration Act, 1996 is concerned. The Arbitration Act, 1996 is “subject matter centric” and not “seat-centric”. In support of this, the learned counsel placed strong reliance on the provision contained in Section 2(1) (e), which provides that “jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject matter of a suit”. This, according to the learned counsel, is an essential precondition for a Court to assume jurisdiction under Part I. The definition of Court in Section 2(1)(e) would necessarily mean that two foreign parties, in order to resolve a dispute arising outside India and governed by foreign law cannot invoke jurisdiction of an Indian Court by simply choosing India as the seat of arbitration. It is further submitted that in the absence of Section 9 of the Arbitration Act, 1996, no interim relief can be granted unless it is in aid of final/ substantive relief that must be claimed in the suit. On the other hand, a suit claiming any permanent relief on the substance of the dispute would tantamount to a waiver of the arbitration clause by the plaintiff. It is, therefore, submitted by the learned counsel that supplying word “only” in Section 2(2) will in many cases leave a party remediless. It is further submitted that Section 2(7) clearly shows that part I would apply even to arbitrations which take place outside India. If Section 2(7) was to be restricted only to arbitrations which take place in India, there would be no need for such a provision. It is emphasised that the provision clearly states that it applies to an award made “under this part”. The aforesaid term is a clear indication to an arbitration which takes place outside India, where the parties have chosen the Arbitration Act, 1996 as the governing law of the arbitration. Mr. Sorabjee relied on National Thermal Power Corporation Vs. Singer Company & Ors.7 and submitted that Section 2(7) is a positive re-enactment of Section 9(b) of the Foreign Awards (Recognition and Enforcement) Act, 1961 (hereinafter referred to as the ‘1961 Act’). It is emphasised that Section 2(7) has been placed in Part I only to bring it in conformity with Article V(1)(e) of the New York Convention, which has been incorporated and enacted as Section 48(1)(e). The aforesaid section even though it is dealing with enforcement of awards, necessarily recognizes the jurisdiction of courts in two countries to set aside the award, namely, the courts of the country in which arbitration takes place and the country under the law of which the award was made. It is submitted that both the expressions must necessarily be given effect to and no part of the act or the section can be disregarded by describing them as fossil.

18. Mr. Sorabjee has emphasised that not giving effect to the words “under the law of which the award was made”, will allow many awards to go untested in Court. He has relied upon certain observations made by the U.K. Court in the case of Reliance Industries Ltd. Vs. Enron Oil & Gas India Ltd.8

19. Mr. Sundaram points out that the Arbitration Act, 1996 departs from the strict territorial criterion/principle as not only it retains the features of New York Convention but significantly departs from Model Law. The Model Law has sought to bring in an era of localized/territorial arbitration (Article 1(2)). On the other hand, the Arbitration Act, 1996 recognizes and provides for de-localized arbitration. He emphasised that under Model Law, all provisions referred to localized arbitration except the exceptions in Article 1(2). Under the Arbitration Act, 1996, all provisions are de-localized, except where “place” qualification has been provided for.

20. He further submitted that in all commentaries of International Commercial Arbitration, the expression “place” is used interchangeably with “seat”. In many cases, the terms used are “place of arbitration”; “the arbitral situs”; the “locus arbitri” or “the arbitral forum”. Relying on the judgment in Braes of Doune Wind Farm (Scotland) Limited Vs. Alfred McAlpine Business Services Limited9 which has been affirmed in Shashoua & Ors. Vs. Sharma10 , he submitted that internationally “seat” is interpreted as being the “juridical seat”. Therefore, when the parties opt for a given law to govern the arbitration, it is considered to supplant the law of the geographical location of the arbitration. Therefore, the mere geographical location is not the deciding factor of the seat. He relies on the observations made by Gary B. Born in his book ‘International Commercial Arbitration’, which are as follows : “A concept of central importance to the international arbitral process is that of the arbitral seat (alternatively referred to as the “place of arbitration”, the “siege” “ort”, the arbitral “situs” the “locus arbitri” or the arbitral “forum”). The arbitral seat is the nation where an international arbitration has its legal domicile, the laws of which generally govern the arbitration proceedings in significant respects, with regard to both “internal” and “external” procedural matters.” As discussed elsewhere, the arbitral seat is the location selected by the parties (or, sometimes, by the arbitrators, an arbitral institution, or a court) as the legal or juridical home or place of the arbitration. In one commentator’s words, the “seat” is in the vast majority of cases the country chosen as the place of the arbitration. The choice of the arbitral seat can be (and usually is) made by the parties in their arbitration agreement or selected on the parties’ behalf by either the arbitral tribunal or an arbitral institution.” 21. He submits that whist interpreting the word “place” in Section 2(2), the provisions contained in Section 20 would have relevance as Section 20 stipulates that the parties are free to agree on the place of arbitration. The interpretation on the word “place” in Section 2(2) would also have to be in conformity with the provisions contained in Section 2(1) (e). Further more, Section 2(2) has to be construed by keeping in view the provisions contained in Section 2(7) which would clearly indicate that the provisions of Part I of the Arbitration Act, 1996 are not confined to arbitrations which take place within India. Whilst arbitration which takes place in India by virtue of Section 2(2) would give rise to a “domestic award”; the arbitration which is held abroad by virtue of Section 2(7) would give rise to a “deemed domestic award”; provided the parties to arbitration have chosen the Arbitration Act, 1996 as the governing law of arbitration.

22. Mr. Sundaram emphasised that if Section 2(2) had not been on the Statute book there would be no doubt that if an arbitration was governed by the Arbitration Act, 1996, Part I would ipso facto become applicable to such arbitration, and under Section 2(7), irrespective of where the arbitral proceedings took place, it would become a deemed domestic award, giving rise to the incidence arising therefrom. By the inclusion of Section 2(2), the legislature has also made the Arbitration Act, 1996 and Part I applicable when the seat or place of arbitration is in India even if not conducted in accordance with Indian Arbitral laws thereby domestic what would otherwise have been a non-domestic award having been conducted in accordance with a Foreign Arbitration Act. By making such provisions, the Indian Parliament has honoured the commitment under the New York Convention. He submits that New York Convention in Articles V(1)(a) and V(1)(e) has recognized that the courts in both the countries i.e. country in which the arbitration is held and the country “under the law of which the award is made” as a court of competent jurisdiction to question the validity of the arbitral proceedings/award. He, however, points out that the jurisdiction of the domestic court is neither conferred by the New York Convention nor under Part II of the Arbitration Act, 1996, since Part II merely deals with circumstances under which an award may be enforced/may be refused to be enforced. These circumstances include annulment proceedings in one of the two competent courts, whether or not any of the two courts have jurisdiction to annul the proceedings/award, would depend on the domestic law of the country concerned. The Geneva Convention had brought with it the predominance of the seat, particularly with reference to the setting aside of the award. The two jurisdictions were inserted in the New York Convention to dilute the predominance of the “seat” over the party autonomy. He further submitted that the apprehension that the two courts of competent jurisdiction could give conflicting verdicts on the same award is unfounded. Even if there were parallel proceedings, it would merely be a question of case management by the relevant courts in deciding which proceedings should be continued and which stayed.

23. Learned counsel have submitted that the findings in the case of Bhatia International Vs. Bulk Trading S.A. & Anr.11 (hereinafter referred to as “Bhatia International”) that if Part I was not made applicable to arbitrations conducted outside India would render “party remediless” is wholly correct. It is not open to a party to file a suit touching on the merits of the arbitration, since such suit would necessarily have to be stayed in view of Section 8 or Section 45 of the Arbitration Act, 1996. He submits that the only way a suit can be framed is a suit “to inter alia restrict the defendant from parting with properties”. He submits that if the right to such property itself is subject matter of an arbitration agreement, a suit for the declaration of such right can not be filed. All that could then be filed, therefore, would be a bare suit for injunction restraining another party from parting with property. The interlocutory relief would also be identical till such time as the injunction is made permanent. Such a suit would not be maintainable because :- (a) an interlocutory injunction can only be granted depending on the institutional progress of some proceeding for substantial relief, the injunction itself must be part of the substantive relief to which the plaintiff’s cause of action entitles him. In support of this proposition, he relies on Siskina (Cargo Owners) Vs. Distos Compania Navieria SA12 , Fourie Vs. Le Roux13 and Adhunik Steels Ltd. Vs. Orissa Manganese and Minerals Pvt. Ltd.14 ; (b) the cause of action for any suit must entitle a party for a substantive relief. Since the substantive relief can not be asked for as the dispute is to be decided by the arbitrator, the only relief that could be asked for would be to safeguard a property which the plaintiff may or may not be entitled to proceed against, depending entirely on the outcome of another proceeding, in another jurisdiction, or which the country has no seisin; (c) in such a suit, there would be no pre-existing right to give rise to a cause of action but the right is only contingent / speculative and in the absence of an existing / subsisting cause of action, a suit can not be filed; (d) the absence of an existing / subsisting cause of action would entail the plaint in such a suit to be rejected under Order VII Rule 11a. Further, no interlocutory injunction can be granted unless it is in aid of a substantive relief and therefore a suit simply praying for an injunction would also be liable to be rejected under Order VII Rule 11; (e) no interim relief can be granted unless it is in aid of and ancillary to the main relief that may be available to the party on final determination of rights in a suit. Learned counsel refers to State of Orissa Vs. Madan Gopal Rungta15 in support of the submission; (f) such a suit would be really in the nature of a suit for interim relief pending an entirely different proceeding. It is settled law that by an interim order, the Court would not grant final relief. The nature of such a suit would be to grant a final order that would in fact be in the nature of an interim order. Here the learned counsel refers to U.P. Junior Doctors ’ Action Committee Vs. Dr. B. Sheetal Nandwani16 , State of Uttar Pradesh Vs. Ram Sukhi Devi17 , Deoraj Vs. State of Maharashtra & Ors.18 and Raja Khan Vs. Uttar Pradesh Sunni Central Wakf Board & Ors.19 He submits that the intention of the Indian Parliament in enacting the Arbitration Act, 1996 was not to leave a party remediless.

24. Mr. Gopal Subramanium submits that the issue in the present case is that in addition to the challenge to the validity of an award being made in courts where the seat is located, are domestic courts excluded from exercising supervisory control by way of entertaining a challenge to an award? He submits that the issue arises when it is not possible, in a given case, to draw an assumption that the validity of the award is to be judged according to the law of the “place” of arbitration. The Arbitration Act, 1996 has removed such vagueness. The Arbitration Act, 1996 clearly states that in respect of all subject matters over which Courts of Judicature have jurisdiction, the National Courts will have residual jurisdiction in matters of challenge to the validity of an award or enforcement of an award. He reiterates the submissions made by other learned senior counsel and points out that the Arbitration Act, 1996 is not seat centric. This, according to learned senior counsel, is evident from numerous provisions contained in Part I and Part II. He points out all the sections which have been noticed earlier. According to learned senior counsel, the definition of International Commercial Arbitration in Section 2(1)(f) is party centric. This definition is not indexed to the seat of arbitration. Similarly, the definition in Section 2(1)(e) is subject matter centric. According to him, there is a crucial distinction between the definition of international arbitration in the Model Law and the definition of international commercial arbitration under the 1961 Act. From the above, he draws an inference that seat of arbitration being in India is not a pre-requisite to confer jurisdiction on the Indian Courts under the Arbitration Act, 1996. He points out that Section 2(1)(e) contemplates nexus with “the subject matter of the arbitration”. The use of this expression in the definition gives a clear indication of the manner in which jurisdiction is conferred. If an international arbitration takes place, irrespective of the seat, and the subject matter of that arbitration would otherwise be within the jurisdiction of an Indian Court, such Indian Court would have supervisory jurisdiction. Therefore, if “the closest connection” of the arbitration is with India, and if the Indian Courts would normally have jurisdiction over the dispute, the Indian Courts will play a supervisory role in the arbitration. Restricting the applicability of Part I of the Arbitration Act, 1996 to the arbitration where the seat is in India cannot, according to Mr. Subramanium, provide a coherent explanation of subsection 2(1)(e) without doing violence to its language. He also makes a reference to the opening words of Section 28 “where the place of arbitration is situate in India”. He then submits that if the legislature had already made it abundantly clear that Section 2(2) of the Arbitration Act, 1996 operated as a complete exclusion of Part I of the aforesaid Act to arbitrations outside India, the same proposition need not subsequently be stated as a qualifier in Section 28.

25. Mr. Gopal Subramanium emphasised that Part II cannot be a complete code as it necessarily makes use of provisions in Part I. He points out that Part I and Part II of the Arbitration Act, 1996 would have been distinct codes in themselves if they had provisions of conducting arbitration in each part. However, Part I of the Arbitration Act, 1996 prescribed the entire procedure for the conduct of an arbitration, whereas Part II is only for recognition and enforcement of certain foreign awards. Therefore, he submits that Part I and Part II cannot be read separately but have to be read harmoniously in order to make Arbitration Act, 1996 a complete code. He points out that even though certain provisions of Part I are mirrored in Part II, at the same time, certain provisions of Part I which are necessary for arbitration are not covered by Part II. He points out that although Section 45, which is in part II, enables a court to make a reference to arbitration; there is no other provision like Section 11 to resolve a situation when an arbitrator is not being appointed as per the agreed arbitral procedure. Therefore, Section 11(9) specially provides for reference in an international commercial arbitration. He further points out that the use of phrase “notwithstanding anything contained in Part I” clearly indicates that Section 45 is to apply, irrespective of any simultaneous application of similar provision in Part I. This section clearly contemplates that provisions of Part I would apply to matters covered by Part II. Mr. Subramanium then points out that there is no provision in Part II for taking the assistance of the court for interim relief pending arbitration, like Section 9 in Part I. Section 27, according to Mr. Subramanium, is another indication where the assistance of the Indian Court would be taken in aid of arbitration both within and outside India. He reiterates that Sections 34 and 48 of the Arbitration Act, 1996 are to be read harmoniously. He submits various provisions of Part I are facilitative in character, excepting Section 34 which involves a challenge to an award. He points out that Section 2(4) and Section 2(5) also indicate that the Arbitration Act, 1996 applies to all arbitration agreements irrespective of the seat of arbitration. He submits that the harmonious way to read Section 34 as well as Section 48 of the Arbitration Act, 1996 is that where a challenge lies to an award, the legislature must have intended only one challenge. Thus, if an attempt is made to execute an award as a decree of the court under Section 36 of Part I, there can be no doubt that if there is no adjudication under Section 34, there can still be a resistance which can be offered under Section 48. Similarly, by virtue of Section 48(3) if an award is challenged under Section 34 before a competent court, the enforcement proceeding would be adjourned and the court may order suitable security. There will be only one challenge to an award, either under Section 34 or Section 48. Referring to Section 51, Mr. Gopal Subramanium submits that the rights available under Part II are in addition to rights under Part I. This section firstly postulates a hypothesis that the Chapter on New York Convention awards had not been enacted. It further makes mention, in such a scenario, of certain rights already occupying the field that is intended to be covered by the chapter on New York conventions. It also mentions that such rights are coextensive with the rights under the chapter on the New York Convention. Therefore, the fact that certain provisions in Part II of the Arbitration Act, 1996 appear to function in the same field as provisions in Part I, does not mean that the provisions of Part I cease to have effect, or that the provisions of Part I are no longer available to a party. This, according to Mr. Subramanium, is in consonance with the history of New York Convention and the Model Law, which shows that the Model Law was intended to fill the gaps left by the New York Convention as well as function as a complete code. He, therefore, urges that the sections which have come to be considered essential for the success of arbitration, such as Sections 9, 11 and 34, must be considered also available to the parties seeking recognition and enforcement of foreign awards

26. Finally, he submits that the decision in Bhatia International (supra) is a harmonious construction of Part I and Part II of the Arbitration Act, 1996. He further submits that the case of Venture Global Engineering Vs. Satyam Computer Services Ltd. & Anr.20 (hereinafter referred to as “Venture Global Engineering”) has been correctly decided by this Court. Mr. Subramanium further pointed out that the judgments of this Court in the case of ONGC Vs. Western Company of North America21 and National Thermal Power Corporation Vs. Singer Company & Ors. (supra) have appropriately set aside the awards challenged therein even though the same were not made in India.

27. Mr. E.R. Kumar appearing in SLP (C) No. 31526- 31528 of 2009 has adopted the submissions made by Mr. Subramanium. In addition, he submits that the National Arbitral Law, i.e., Part I of the Arbitration Act, 1996 necessarily applies to all arbitrations arising between domestic parties and pertaining to a domestic dispute. Thus, even if the parties in such a case agree with the situs to be abroad, the same will not ipso facto take such arbitrations outside the applicability of Part I and operate to exclude the jurisdiction of Indian Courts therein. In other words, two Indian parties involved in a purely domestic dispute can not contractually agree to denude the Courts of this country of their jurisdictions with respect to a legal dispute arising between them in India. He submits that such a contract would be void under Section 23 and Section 28 of the Indian Contract Act.

28. He placed reliance on a judgment of this Court in the case of ABC Laminart Pvt. Ltd. Vs. A.P. Agencies, Salem22 . He relies on Para 10 and 16 of the above judgment. He also relied on the case of Interglobe Aviation Ltd. Vs. N. Satchidanand23 , wherein this Court has followed the decision in ABC Laminart Pvt. Ltd. (supra).

29. He submits that the UNCITRAL Model Law has defined the term “international” in a broad and expansive manner allowing full sway to “party autonomy”. Under the Model Law, it is open to the parties to give international flavour to an otherwise purely domestic relationship, merely by choosing a situs of arbitration abroad [Article 1(3)(b)(i)] or even merely by labelling the arbitration an international one. [Article 1(3)(c)].

30. The Indian law has consciously and correctly departed from the same and chosen only the nationality test for defining an arbitration as “international” as is apparent from Section 2(1)(f) of the Arbitration Act, 1996. Relying on the provision of Sections 2(2), 20 and 28, he further submits that Arbitration Act, 1996 precludes Indian parties to a purely domestic dispute from choosing a place of arbitration outside India. Mr. Kumar goes even further to submit that when both the parties are Indian, the substantive law governing the dispute must necessarily be Indian irrespective of the situs of the arbitration and irrespective of any provision in the contract between the parties to the contrary. He submits that the same principle applies with equal force to the arbitration law too, that is to say, that if it is not open to two Indian parties with regard to an entirely domestic dispute to derogate from the Indian laws of contract, evidence etc., it is equally not open to them derogate from the Indian arbitrational law either. He relies on judgment of this Court in the case of TDM Infrastructure Pvt. Ltd. Vs. U.E. Development India Pvt. Ltd.,24 Paragraphs 19, 20 and 23. He, however, very fairly points out that this was a case under Section 11 and the point in issue here did not specifically arise for consideration in the said case.

History of Arbitration in India –

31. Before we embark upon the task of interpreting the provisions of the Arbitration Act, 1996, it would be apposite to narrate briefly the history of Arbitration Law in India upto the passing of Arbitration Act, 1996. This exercise is undertaken purely to consider: (i) what was the law before the Arbitration Act, 1996 was passed; (ii) what was the mischief or defect for which the law had not provided; (iii) what remedy Parliament has appointed; (iv) the reasons of the remedy.

32. Resolution of disputes through arbitration was not unknown in India even in ancient times. Simply stated, settlement of disputes through arbitration is the alternate system of resolution of disputes whereby the parties to a dispute get the same settled through the intervention of a third party. The role of the court is limited to the extent of regulating the process. During the ancient era of Hindu Law in India, there were several machineries for settlement of disputes between the parties. These were known as Kulani (village council), Sreni (corporation) and Puga (assembly).25 Likewise, commercial matters were decided by Mahajans and Chambers. The resolution of disputes through the panchayat was a different system of arbitration subordinate to the courts of law. The arbitration tribunal in ancient period would have the status of panchayat in modern India.26 The ancient system of panchayat has been given due statutory recognition through the various Panchayat Acts subsequently followed by Panchayati Raj Act, 1994. It has now been constitutionally recognized in Article 243 of the Constitution of India.

33. However, we are concerned here with modern arbitration law, therefore, let us proceed to see the legislative history leading to the enactment of Arbitration Act, 1996.

The Indian Scenario –

34. The first Indian Act on Arbitration law came to be passed in 1899 known as Arbitration Act, 1899. It was based on the English Arbitration Act, 1899. Then came the Code of Civil Procedure, 1908. Schedule II of the Code contained the provisions relating to the law of Arbitration which were extended to the other parts of British India. Thereafter the Arbitration Act, 1940 (Act No.10 of 1940) (hereinafter referred to as the “1940 Act”) was enacted to consolidate and amend the law relating to arbitration. This Act came into force on 1 st July, 1940. It is an exhaustive Code in so far as law relating to the domestic arbitration is concerned. Under this Act, Arbitration may be without the intervention of a Court or with the intervention of a Court where there is no suit pending or in a pending suit. This Act empowered the Courts to modify the Award (Section 15), remit the Award to the Arbitrators for reconsideration (Section 16) and to set aside the Award on specific grounds (Section 30). The 1940 Act was based on the English Arbitration Act, 1934. The 1934 Act was replaced by the English Arbitration Act, 1950 which was subsequently replaced by the Arbitration Act, 1975. Thereafter the 1975 Act was also replaced by the Arbitration Act, 1979. There were, however, no corresponding changes in the 1940 Act. The law of arbitration in India remained static.

35. The disastrous results which ensued from the abuse of the 1940 Act are noticed by this Court in the case of Guru Nanak Foundation Vs. M/s. Rattan Singh & Sons.27 Justice D.A. Desai speaking for the court expressed the concern and anguish of the court about the way in which the proceedings under the 1940 Act, are conducted and without an exception challenged in courts. His Lordship observed :

“Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 (“Act” for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. (Emphasis supplied). Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with ‘legalese’ of unforeseeable complexity. This case amply demonstrates the same.”

36. This was the arena of domestic arbitration and domestic award.

International Scenario –

37. Difficulties were also being faced in the International sphere of Trade and Commerce. With the growth of International Trade and Commerce, there was an increase in disputes arising out of such transactions being adjudicated through Arbitration. One of the problems faced in such Arbitration, related to recognition and enforcement of an Arbitral Award made in one country by the Courts of other countries. This difficulty was sought to be removed through various International Conventions. The first such International Convention was the Geneva Protocol on Arbitration Clauses, 1923, popularly referred to as “the 1923 Protocol”. It was implemented w.e.f. 28th July, 1924. This Protocol was the product of the initiative taken by the International Chamber of Commerce (ICC) under the auspices of the League of Nations. The 1923 Protocol sought to make arbitration agreements and arbitration clauses in particular enforceable internationally. It was also sought to ensure that Awards made pursuant to such arbitration agreements would be enforced in the territory other than the state in which they were made. The 1923 Protocol proved to be inadequate. It was followed by the Geneva Convention on the execution of Foreign Arbitrated Awards, 1927 and is popularly known as the “Geneva Convention of 1927”. This convention was made effective on 25th July, 1929. India became a signatory to both the 1923 Protocol and the 1927 Convention on 23rd October, 1937. It was to give effect to both the 1923 Protocol and 1927 Convention that the Arbitration (Protocol and Convention) Act, 1937 was enacted in India. Again a number of problems were encountered in the operation of the 1923 Protocol and the 1927 Geneva Convention. It was felt that there were limitations in relation to their fields of application. Under the 1927 Geneva Convention a party in order to enforce the Award in the Country of an origin was obliged to seek a declaration in the country where the arbitration took place to the effect that the Award was enforceable. Only then could the successful party go ahead and enforce the Award in the country of origin. This led to the problem of “double exequatur”, making the enforcement of arbitral awards much more complicated. In 1953 the International Chamber of Commerce promoted a new treaty to govern International Commercial Arbitration. The proposals of ICC were taken up by the United Nations Economic Social Council. This in turn led to the adoption of the convention on the Recognition and Enforcement of Foreign Arbitral Awards at New York in 1958 (popularly known as “the New York Convention”). The New York Convention is an improvement on the Geneva Convention of 1927. It provides for a much more simple and effective method of recognition and enforcement of foreign arbitral awards. It gives much wider effect to the validity of arbitration agreement. This convention came into force on 7 th June, 1959. India became a State Signatory to this convention on 13th July, 1960. The Foreign Awards (Recognition and Enforcement) Act, 1961 was enacted to give effect to the New York Convention. Thus prior to the enactment of the Arbitration Act, 1996, the law of Arbitration in India was contained in the Protocol and Convention Act, 1937, the Arbitration Act, 1940 and the Foreign Awards (Recognition and Enforcement) Act, 1961. There were no further amendments in the aforesaid three acts. Therefore, it was generally felt that the arbitration laws in India had failed to keep pace with the developments at the international level.

The Arbitration Act, 1996

The Objects and Reasons of the Act

38. The Statement of Objects and Reasons referred to the fact that the existing legal framework was outdated and that the economic reforms in India would not be fully effective as “the law dealing with settlement of both domestic and international commercial disputes remained out of tune with such reforms”. It then refers to the Model Law and the recognition of the general assembly of the United Nations that all countries give due consideration to the Model Laws in view of the “desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice”. Finally, the Statement of Objects and Reasons states as follows:-

“3. Though the said UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a model for legislation on domestic arbitration and conciliation. The present bill seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, taking into account the said UNCITRAL Model Law and Rules.”

The main objectives of the bill are as under:-

“(i) to comprehensively cover international and commercial arbitration and conciliation as also domestic arbitration and conciliation;

(ii) to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration;

(iii) to provide that the arbitral tribunal gives reasons for its arbitral award;

(iv) to ensure that the arbitral tribunal remains within the limits of its jurisdiction:

(v) to minimise the supervisory role of Courts in the arbitral process;

(vi) to permit an arbitral tribunal to use mediation, conciliation, or other procedures during the arbitral proceedings to encourage settlement of disputes;

(vii) to provide that every final arbitral award is enforced in the same manner as if it were a decree of the Court;

(viii) to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal; and

(ix) to provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which one of the two International Conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award.”

The Act is one “to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto.”

39. The Preamble to the Arbitration Act, 1996 repeats to some extent what the Statement of Objects provide, materially:-

“AND WHEREAS the said Model Law and Rules make significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations; AND WHEREAS it is expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules;”

Scheme of the Arbitration Act, 1996 –

40. The Arbitration Act, 1996 is divided into four parts. Part I which is headed “Arbitration”; Part II which is headed “Enforcement of Certain Foreign Awards”; Part III which is headed “Conciliation” and Part IV being “Supplementary Provisions”. We may notice here that it is only Parts I and II which have relevance in the present proceedings.

41. We may further notice here that the 1961 Foreign Awards Act was enacted specifically to give effect to the New York Convention. The preamble of the 1961 Act is as follows :

“An Act to enable effect to be given to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on the 10th day of June, 1958, to which India is a party and for purposes connected therewith.”

42. In the 1961 Act, there is no provision for challenging the Foreign Award on merits similar or identical to the provisions contained in Sections 16 and 30 of the 1940 Act, which gave power to remit the award to the arbitrators or umpire for reconsideration under Section 30 which provided the grounds for setting aside an award. In other words, the 1961 Act dealt only with the enforcement of foreign awards. The Indian Law has remained as such from 1961 onwards. There was no intermingling of matters covered under the 1940 Act, with the matters covered by the 1961 Act.

43. Internationally, the Arbitration Law developed in different countries to cater for the felt needs of a particular country. This necessarily led to considerable disparity in the National Laws on arbitration. Therefore, a need was felt for improvement and harmonization as National Laws which were, often, particularly inappropriate for resolving international commercial arbitration disputes. The explanatory note by the UNCITRAL Secretariat refers to the recurring inadequacies to be found in outdated National Laws, which included provisions that equate the arbitral process with Court litigation and fragmentary provisions that failed to address all relevant substantive law issues. It was also noticed that “even most of those laws that appear to be up-to-date and comprehensive were drafted with domestic arbitration primarily, if not exclusively, in mind”. It further mentions that “while this approach is understandable in view of the fact that even today the bulk of cases governed by arbitration law would be of purely domestic nature, the unfortunate consequence is that traditional local concepts are imposed on international cases and the needs of modern practice are often not met.” There was also unexpected and undesired restrictions found in National Laws, which would prevent the parties, for example, from submitting future disputes to arbitration. The Model Law was intended to reduce the risk of such possible frustration, difficulties or surprise. Problems also stemmed from inadequate arbitration laws or from the absence of specific legislation governing arbitration which were aggravated by the fact that National Laws differ widely. These differences were frequent source of concern in international arbitration, where at-least one of the parties is, and often both parties are, confronted with foreign and unfamiliar provisions and procedures. It was found that obtaining a full and precise account of the law applicable to the arbitration is, in such circumstances, often expensive, impractical or impossible.

44. With these objects in view, the UNCITRAL Model Law on International Arbitration (“the Model Law”) was adopted by the United Nations Commission on International Trade Law (UNCITRAL) on 21st June, 1985 at the end of the 18th Session of the Commission. The General Assembly in its Resolution 40 of 1972 on 11th December, 1985 recommended that “all States give due consideration to the Model Law on international commercial arbitration, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice”.

45. The aim and the objective of the Arbitration Act, 1996 is to give effect to the UNCITRAL Model Laws.

46. Keeping in view the aforesaid historical background; the objects and reasons of the Act and the elaborate submissions made by the learned counsel for the parties, it would now be necessary to consider the true scope of the provisions of Part I and Part II of the Arbitration Act, 1996.

47. Since the reference relates to the ratio in Bhatia International (supra) and Venture Global Engineering (supra), it would be appropriate to make a brief note about the reasons given by this Court in support of the conclusions reached therein.

48. In Bhatia International, the appellant entered into a contract with the 1st respondent on 9 th May, 1997. This contract contained an arbitration clause, which provided that arbitration was to be as per the rules of the International Chamber of Commerce (for short “ICC”). On 23rd October, 1997, the 1 st respondent filed a request for arbitration with ICC. Parties agreed that the arbitration be held in Paris, France. ICC appointed a sole arbitrator. The 1 st respondent filed an application under Section 9 of the Arbitration Act, 1996 before the IIIrd Additional District Judge, Indore, M.P. against the appellant and the 2 nd respondent. One of the interim reliefs sought was an order of injunction restraining these parties from alienating, transferring and/or creating third-party rights, disposing of, dealing with and/or selling their business assets and properties. The appellant raised the plea of maintainability of such an application. The appellant contended that Part I of the Arbitration Act, 1996 would not apply to arbitrations where the place of arbitration is not in India. This application was dismissed by the IIIrd Additional District Judge on 1 st February, 2000. It was held that the Court at Indore had jurisdiction and the application was maintainable. The appellant filed a writ petition before the High Court of Madhya Pradesh, Indore Bench. The said writ petition was dismissed by the judgment dated 10th October, 2000, which was impugned in the appeal before this Court. On behalf of the appellants, it was submitted that Part I of the Arbitration Act, 1996 only applies to arbitrations where the place of arbitration is in India. It was also submitted that if the place of arbitration is not in India then Part II of the Arbitration Act, 1996 would apply. Reliance was also placed on Section 2(1)(f). With regard to Section 2(4) and (5), it was submitted that the aforesaid provisions would only apply to arbitrations which take place in India. It was submitted that if it is held that Part I applies to all arbitrations, i.e., even to arbitrations whose place of arbitration is not in India, then sub-section (2) of Section 2 would become redundant and/or otiose. It was also pointed out that since Section 9 and Section 17 fall in Part I, the same would not have any application in cases where the place of arbitration is not in India. It was emphasised that the legislature had deliberately not provided any provision similar to Section 9 and Section 17 in Part II. It was also submitted that a plain reading of Section 9 makes it clear that it would not apply to arbitrations which take place outside India. It was further submitted that Section 9 provides that an application for interim measures must be made before the award is enforced in accordance with Section 36, which deals with enforcement of domestic awards only. On the other hand, provisions for enforcement of foreign awards are contained in Part II. It was submitted that Section 9 does not talk of enforcement of the award in accordance with Part II. It was further submitted that there should be minimum intervention by the Courts in view of the underlying principle in Section 5 of the Arbitration Act, 1996. On the other hand, the respondents therein had made the submissions, which are reiterated before us. In Paragraph 14 of the Judgment, it is held as follows:-

“14. At first blush the arguments of Mr Sen appear very attractive. Undoubtedly sub-section (2) of Section 2 states that Part I is to apply where the place of arbitration is in India. Undoubtedly, Part II applies to foreign awards. Whilst the submissions of Mr Sen are attractive, one has to keep in mind the consequence which would follow if they are accepted. The result would:

(a) Amount to holding that the legislature has left a lacuna in the said Act. There would be a lacuna as neither Part I or II would apply to arbitrations held in a country which is not a signatory to the New York Convention or the Geneva Convention (hereinafter called “a non-convention country”). It would mean that there is no law, in India, governing such arbitrations.

(b) Lead to an anomalous situation, inasmuch as Part I would apply to Jammu and Kashmir in all international commercial arbitrations but Part I would not apply to the rest of India if the arbitration takes place out of India.

(c) Lead to a conflict between sub-section (2) of Section 2 on one hand and sub-sections (4) and (5) of Section 2 on the other. Further, sub-section (2) of Section 2 would also be in conflict with Section 1 which provides that the Act extends to the whole of India.

(d) Leave a party remediless inasmuch as in international commercial arbitrations which take place out of India the party would not be able to apply for interim relief in India even though the properties and assets are in India. Thus a party may not be able to get any interim relief at all.”

49. It is held that the definition of international commercial arbitration under Section 2(1)(f) makes no distinction between international commercial arbitrations held in India or outside India. Further it is also held that the Arbitration Act, 1996 no where provides that its provisions are not to apply to international commercial arbitrations which take place in a non-convention country. Hence, the conclusion at Paragraph 14(a). On the basis of the discussion in Paragraph 17, this Court reached the conclusion recorded at Paragraph 14(b). The conclusions at Paragraph 14(c) is recorded on the basis of the reasons stated in Paragraphs 19, 20, 21, 22 and 23. Upon consideration of the provision contained in Sections 2(7), 28, 45 and 54, it is held that Section 2(2) is only an inclusive and clarificatory provision. The provision contained in Section 9 is considered in Paragraphs 28, 29, 30 and 31. It is concluded in Paragraph 32 as follows:-

“32. To conclude, I hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply.”

50. In Venture Global Engineering (supra), this Court relied on Paragraphs 14, 17, 21, 26, 32 and 35. It is concluded in Paragraph 37 as follows:-

“37. In view of the legal position derived from Bhatia International we are unable to accept Mr. Nariman’s argument. It is relevant to point out that in this proceeding we are not deciding the merits of the claim of both parties, particularly, the stand taken in the suit filed by the appellant herein for setting aside the award. It is for the court concerned to decide the issue on merits and we are not expressing anything on the same. The present conclusion is only with regard to the main issue whether the aggrieved party is entitled to challenge the foreign award which was passed outside India in terms of Sections 9/34 of the Act. Inasmuch as the three-Judge Bench decision is an answer to the main issue raised, we are unable to accept the contra view taken in various decisions relied on by Mr. Nariman. Though in Bhatia International the issue relates to filing a petition under Section 9 of the Act for interim orders the ultimate conclusion that Part I would apply even for foreign awards is an answer to the main issue raised in this case.”

51. As noticed above, the learned senior counsel for the appellants have supported the ratio of law laid down in Bhatia International (supra) and Venture Global Engineering (supra). They have also supported the decisions in ONGC Vs. Western Company of North America (supra) and National Thermal Power Corporation Vs. Singer Company & Ors. (supra).

52. In order to consider the issues raised and to construe the provisions of the Arbitration Act, 1996 in its proper perspective, it would be necessary to analyse the text of the Arbitration Act, 1996 with reference to its legislative history and international conventions. We shall take due notice of the stated objects and reasons for the enactment of the Arbitration Act, 1996.

53. Further, for a comprehensive and clear understanding of the connotations of the terms used in the Arbitration Act, 1996, a brief background of various laws applicable to an International Commercial Arbitration and distinct approaches followed by countries across the world will also be useful.

54. With utmost respect, upon consideration of the entire matter, we are unable to support the conclusions recorded by this Court in both the judgments i.e. Bhatia International (supra) and Venture Global Engineering (Supra).

55. In our opinion, the conclusion recorded at Paragraph 14B can not be supported by either the text or context of the provisions in Section 1(2) and proviso thereto. Let us consider the provision step-by–step, to avoid any confusion. A plain reading of Section 1 shows that the Arbitration Act, 1996 extends to whole of India, but the provisions relating to domestic arbitrations, contained in Part I, are not extended to the State of Jammu and Kashmir. This is not a new addition. Even the 1940 Act states:

“Section 1 – Short title, extend and commencement –

(1) ………….,
(2) It extends to the whole of India (except the State of Jammu and Kashmir).”

56. Thus, the Arbitration Act, 1996 maintains the earlier position so far as the domestic arbitrations are concerned. Thereafter, comes the new addition in the proviso to Section 1(2), which reads as under: “Provided that Parts I, III and IV shall extend to the State of Jammu and Kashmir only in so far as they relate to international commercial arbitration or, as the case may be, international commercial conciliation.”

57. The proviso is necessary firstly due to the special status of the State of Jammu & Kashmir, secondly to update the Jammu and Kashmir Act, 1945. In our opinion, the proviso does not create an anomaly. The aforesaid Act is almost a carbon copy of the 1940 Act. Both the Acts do not make any provision relating to International Commercial Arbitration. Such a provision was made under the Arbitration Act, 1996 by repealing the existing three Acts, i.e., 1937 Protocol Act, 1940 Act and the Foreign Awards Act, 1961. Therefore, the proviso has been added to incorporate the provisions relating to International Commercial Arbitration. The Arbitration Act, 1996 would not apply to purely domestic arbitrations which were earlier covered by the Jammu and Kashmir Act, 1945 and now by the Jammu & Kashmir Arbitration and Conciliation Act, 1997. We are also unable to agree with the conclusion that in Jammu & Kashmir, Part I would apply even to arbitration which are held outside India as the proviso does not state that Part I would apply to Jammu & Kashmir only if the place of Arbitration is in Jammu & Kashmir. Since Section 2(2) of Part I applies to all arbitrations, the declaration of territoriality contained therein would be equally applicable in Jammu & Kashmir. The provision contained in Section 2(2) is not affected by the proviso which is restricted to Section 1(2). By the process of interpretation, it can not be read as a proviso to Section 2(2) also. It can further be seen that the provisions relating to “Enforcement of Certain Foreign Awards” in Part II would apply without any restriction, as Part II has no relation to the enforcement of any purely domestic awards or domestically rendered international commercial awards. These would be covered by the Jammu & Kashmir Act, 1997.

58. In view of the above, we are unable to discern any anomaly as held in Bhatia International (supra). We also do not discern any inconsistency between Section 1 and Section 2(2) of the Arbitration Act, 1996.

Does Section 2(2) bar the Application of Part I to Arbitrations which take place outside India?

59. The crucial difference between the views expressed by the appellants on the one hand and the respondents on the other hand is as to whether the absence of the word “only” in Section 2(2) clearly signifies that Part I of the Arbitration Act, 1996 would compulsorily apply in the case of arbitrations held in India, or would it signify that the Arbitration Act, 1996 would be applicable only in cases where the arbitration takes place in India. In Bhatia International and Venture Global Engineering (supra), this Court has concluded that Part I would also apply to all arbitrations held out of India, unless the parties by agreement, express or implied, exclude all or any of its provisions. Here again, with utmost respect and humility, we are unable to agree with the aforesaid conclusions for the reasons stated hereafter.

60. It is evident from the observation made by this Court in Konkan Railway Corporation Ltd. & Anr. (supra) that the Model Law was taken into account in drafting of the Arbitration Act, 1996. In Paragraph 9, this Court observed “that the Model Law was only taken into account in the drafting of the said Act is, therefore, patent. The Arbitration Act, 1996 and the Model Law are not identically drafted”. Thereafter, this Court has given further instances of provisions of the Arbitration Act, 1996, not being in conformity with the Model Law and concluded that “The Model Law and judgments and literature thereon are, therefore, not a guide to the interpretation of the Act and, especially of Section 12 thereof”. The aforesaid position, according to Mr. Sorabjee has not been disagreed with by this Court in SBP & Co. (supra). We agree with the submission of Mr. Sorabjee that the omission of the word “only” in Section 2(2) is not an instance of “CASUS OMISSUS”. It clearly indicates that the Model Law has not been bodily adopted by the Arbitration Act, 1996. But that can not mean that the territorial principle has not been accepted. We would also agree with Mr. Sorabjee that it is not the function of the Court to supply the supposed omission, which can only be done by Parliament. In our opinion, legislative surgery is not a judicial option, nor a compulsion, whilst interpreting an Act or a provision in the Act. The observations made by this Court in the case of Nalinakhya Bysack (supra) would tend to support the aforesaid views, wherein it has been observed as follows:-

“It must always be borne in mind, as said by Lord Halsbury in Commissioner for Special Purpose of Income Tax Vs. Premsel28 , that it is not competent to any Court to proceed upon the assumption that the legislature has made a mistake. The Court must proceed on the footing that the legislature intended what it has said. Even if there is some defect in the phraseology used by the legislature the Court cannot, as pointed out in Crawford Vs. Spooner29 , aid the legislature’s defective phrasing of an Act or add and amend or, by construction, make up deficiencies which are left in the Act. Even where there is a casus omissus, it is, as said by Lord Russell of Killowen in Hansraj Gupta Vs. Official Liquidator of Dehra Dun-Mussoorie Electric Tramway Co., Ltd.30 , for others than the Courts to remedy the defect.”

61. Mr. Sorabjee has also rightly pointed out the observations made by Lord Diplock in the case of Duport Steels Ltd. (supra). In the aforesaid judgment, the House of Lords disapproved the approach adopted by the Court of Appeal in discerning the intention of the legislature, it is observed that:-

“…the role of the judiciary is confined to ascertaining from the words that Parliament has approved as expressing its intention what that intention was, and to giving effect to it. Where the meaning of the statutory words is plain and unambiguous it is not for the judges to invent fancied ambiguities as an excuse for failing to give effect to its plain meaning because they themselves consider that the consequences of doing so would be inexpedient, or even unjust or immoral. In controversial matters such as are involved in industrial relations there is room for differences of opinion as to what is expedient, what is just and what is morally justifiable. Under our Constitution it is Parliament’s opinion on these matters that is paramount.”
(emphasis supplied)

In the same judgment, it is further observed:-

“But if this be the case it is for Parliament, not for the judiciary, to decide whether any changes should be made to the law as stated in the Act. ”

62. The above are well accepted principles for discerning the intention of the legislature. In view of the aforesaid, we shall construe the provision contained in Section 2(2) without adding the word “only” to the provision.

63. We are unable to accept the submission of the learned counsel for the appellants that the omission of the word “only” from Section 2(2) indicates that applicability of Part I of the Arbitration Act, 1996 is not limited to the arbitrations that take place in India. We are also unable to accept that Section 2(2) would make Part I applicable even to arbitrations which take place outside India. In our opinion, a plain reading of Section 2(2) makes it clear that Part I is limited in its application to arbitrations which take place in India. We are in agreement with the submissions made by the learned counsel for the respondents, and the interveners in support of the respondents, that Parliament by limiting the applicability of Part I to arbitrations which take place in India has expressed a legislative declaration. It has clearly given recognition to the territorial principle. Necessarily therefore, it has enacted that Part I of the Arbitration Act, 1996 applies to arbitrations having their place/seat in India.

Does the missing ‘ only ’ indicate a deviation from Article 1(2) of the Model Law?

64. As noticed earlier the objects and reasons for the enactment of the Arbitration Act, 1996 clearly indicate that the Parliament had taken into account the UNCITRAL Model Laws. The statement of the objects and reasons of the Arbitration Act, 1996 clearly indicates that law of arbitration in India at the time of enactment of the Arbitration Act, 1996, was substantially contained in three enactments, namely, The Arbitration Act, 1940; The Arbitration (Protocol and Convention) Act, 1937 and The Foreign Awards (Recognition and Enforcement) Act, 1961. It is specifically observed that it is widely felt that the Arbitration Act, 1940, which contains the general law of arbitration, has become outdated. It also mentions that the Law Commission of India, several representative bodies of trade and industry and experts in the fields of arbitration have proposed amendments to the Arbitration Act, 1940, to make it more responsive to contemporary requirements. It was also recognized that the economic reforms initiated by India at that time may not become fully effective, if the law dealing with settlement of both domestic and international commercial dispute remained out of tune with such reforms. The objects and reasons further make it clear that the general assembly has recommended that all countries give due consideration to the Model Law adopted in 1985, by the UNCITRAL, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice. Paragraph 3 of the statement of objects and reasons makes it clear that although the UNCITRAL Model Laws are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a Model Law for legislation of domestic arbitration and conciliation. Therefore, the bill was introduced seeking to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral award and to define the law relating to conciliation, taking into account the UNCITRAL Model Law and Rules. We have set out the main objects of the bill a little earlier, Paragraph 3(5) of which clearly states that one of the objects is “to minimize the supervisory role of Courts in arbitral process”.

65. Much of the debate before us was concentrated on the comparison between Article 1(2) of UNCITRAL and Section 2(2). Learned counsel for the appellants had canvassed that the Parliament had deliberately deviated from Article 1(2) of UNCITRAL to express its intention that Part I shall apply to all arbitrations whether they take place in India or in a foreign country. The word “only” is conspicuously missing from Section 2(2) which is included in Article 1(2) of UNCITRAL. This indicates that applicability of Part I would not be limited to Arbitrations which take place within India. Learned counsel for the appellants submitted that in case the applicability of Section 2(2) is limited to arbitrations which take place within India, it would give rise to conflict between Sections 2(2), 2(4), 2(5), 2(7), 20 and 28. With equal persistence, the learned counsel for the respondents have submitted that Part I has accepted the territorial principle adopted by UNCITRAL in letter and spirit.

66. Whilst interpreting the provisions of the Arbitration Act, 1996, it is necessary to remember that we are dealing with the Act which seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. The aforesaid Act also seeks to define the law relating to conciliation and for matters connected therewith or incidental thereto. It is thus obvious that the Arbitration Act, 1996 seeks to repeal and replace the three pre-existing Acts, i.e., The Arbitration Act, 1940; The Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. Section 85 repeals all the three Acts. Earlier the 1937 Act catered to the arbitrations under the Geneva Convention. After the 1958 New York Convention was ratified by India, the 1961 Act was passed. The domestic law of arbitration had remained static since 1940. Therefore, the Arbitration Act, 1996 consolidates the law on domestic arbitrations by incorporating the provisions to expressly deal with the domestic as well as international commercial arbitration; by taking into account the 1985 UNCITRAL Model Laws. It is not confined to the New York Convention, which is concerned only with enforcement of certain foreign awards. It is also necessary to appreciate that the Arbitration Act, 1996 seeks to remove the anomalies that existed in the Arbitration Act, 1940 by introducing provisions based on the UNCITRAL Model Laws, which deals with international commercial arbitrations and also extends it to commercial domestic arbitrations. UNCITRAL Model Law has unequivocally accepted the territorial principle. Similarly, the Arbitration Act, 1996 has also adopted the territorial principle, thereby limiting the applicability of Part I to arbitrations, which take place in India.

67. In our opinion, the interpretation placed on Article 1(2) by the learned counsel for the appellants, though attractive, would not be borne out by a close scrutiny of the Article. Article 1(2) reads as under:-

“Article 1(2): The provisions of this law, except Articles 8, 9, 17(H), 17(I), 17(J), 35 and 36 apply “only” if the place of arbitration is in the territories of this State”.

68. The aforesaid article is a model and a guide to all the States, which have accepted the UNCITRAL Model Laws. The genesis of the word “only” in Article 1(2) of the Model Law can be seen from the discussions held on the scope of application of Article 1 in the 330th meeting, Wednesday, 19 June, 1985 of UNCITRAL. This would in fact demonstrate that the word “only” was introduced in view of the exceptions referred to in Article 1(2) i.e. exceptions relating to Articles 8, 9, 35 & 36 (Article 8 being for stay of judicial proceedings covered by an arbitration agreement; Article 9 being for interim reliefs; and Articles 35 & 36 being for enforcement of Foreign Awards). It was felt necessary to include the word “only” in order to clarify that except for Articles 8, 9, 35 & 36 which could have extra territorial effect if so legislated by the State, the other provisions would be applicable on a strict territorial basis. Therefore, the word “only” would have been necessary in case the provisions with regard to interim relief etc. were to be retained in Section 2(2) which could have extraterritorial application. The Indian legislature, while adopting the Model Law, with some variations, did not include the exceptions mentioned in Article 1(2) in the corresponding provision Section 2(2). Therefore, the word “only” would have been superfluous as none of the exceptions were included in Section 2(2).

69. We are unable to accept the submission of the learned counsel for the appellants that the omission of the word “only”, would show that the Arbitration Act, 1996 has not accepted the territorial principle. The Scheme of the Act makes it abundantly clear that the territorial principle, accepted in the UNCITRAL Model Law, has been adopted by the Arbitration Act, 1996.

70. That the UNCITRAL Rules adopted strict territorial principle is evident from the Report of the UNCITRAL in paragraphs 72 to 80 on the work of its 18th Session in Vienna between 3 rd to 21st June, 1985. The relevant extracts of these paragraphs are as under:

“72. Divergent views were expressed as to whether the Model Law should expressly state its territorial scope of application and, if so, which connecting factor should be the determining criterion……………………………………………………………………………………………………………….”

“73, As regards the connecting factor which should determine the applicability of the (Model) Law in a given State, there was wide support for the so-called strict territorial criterion, according to which the Law would apply where the place of arbitration was in that State………………………………………………………………………………………………………………..”

“74. Another view was that the place of arbitration should not be exclusive in the sense that parties would be precluded from choosing the law of another State as the law applicable to the arbitration procedure…………………………………………………………………………………………………………………….”

“78. The Commission requested the secretariat to prepare, on the basis of the above discussion, draft provisions on the territorial scope of application of the Model Law in general, including suggestions as to possible exceptions of the general scope………………………………………………………………………………………………………………………………….”

“80. In discussing the above proposal, the Commission decided that, for reasons stated in support of the strict territorial criterion (see above, para 73), the applicability of the Model Law should depend exclusively on the place of arbitration as defined in the Model Law…………………………………………………………………………………………………………………………..”

“81. The Commission agreed that a provision implementing that decision, which had to be included in article 1, should be formulated along the following lines: “The provisions of this Law, except articles 8, 9, 35 and 36 apply only if the place of arbitration is in the territory of this State……………………………………………………………………………………..”

71. Similarly, the acceptance of the territorial principle in UNCITRAL has been duly recognized by most of the experts and commentators on International Commercial Arbitration. The aforesaid position has been duly noticed by Howard M. Holtzmann and Joseph E. Beuhaus in “A guide to the UNCITRAL Model Law on International Commercial Arbitration, Legislative History and Commentary”. Dealing with the territorial scope of application of Article 1(2) at Pages 35 to 38, it is stated:-

“…in early discussions of this issue, Article 27, dealing with court assistance in taking evidence was included in the list of exceptions. At that time, the draft of that Article provided for such assistance to foreign arbitrations. The provision was subsequently changed to its present format, and, by virtue of Article 1(2), it applies only to arbitrations in the enacting State. Assistance in taking evidence for use in foreign arbitrations can be provided only under any rules on the question in other laws of the State.

“The Commission adopted the principle that the Model Law would only apply if the place of arbitration was in the enacting State – known as the “territorial criterion ” for applicability – only after extensive debate. The primary alternative position was to add a principle called the “ autonomy criterion ” which would have applied the Law also to arbitrations taking place in another country if the parties had chosen to be governed by the procedural law of the Model Law State. Thus, if the autonomy criterion had been adopted, the parties would have been free, subject to restrictions such as fundamental justice, public policy and rules of court competence, to choose the arbitration law of a State other than that of the place of arbitration. The courts of the Model Law State would then presumably have provided any court assistance needed by this arbitration, including setting aside, even though the place of arbitration was elsewhere. Such a system of party autonomy is envisioned by the New York Convention, which recognizes that a State may consider as domestic an award made outside the State, and vice versa.”

“The Commission decided not to adopt the autonomy criterion. It was noted that the territorial criterion was widely accepted by existing national laws, and that where the autonomy criterion was available it was rarely used.”

72. We are also unable to accept the submission of the learned counsel for the appellants that the Arbitration Act, 1996 does not make seat of the arbitration as the centre of gravity of the arbitration. On the contrary, it is accepted by most of the experts that in most of the National Laws, arbitrations are anchored to the seat/place/situs of arbitration. Redfern in Paragraph 3.54 concludes states that “the seat of the arbitration is thus intended to be its centre of gravity.” This, however, does not mean that all the proceedings of the arbitration have to take place at the seat of the arbitration. The arbitrators at times hold meetings at more convenient locations. This is necessary as arbitrators often come from different countries. It may, therefore, on occasions be convenient to hold some of the meetings in a location which may be convenient to all. Such a situation was examined by the court of appeal in England in Naviera Amazonica Peruana S.A. Vs. Compania Internacionale De Seguros Del Peru31 therein at p.121 it is observed as follows :

“The preceding discussion has been on the basis that there is only one “place” of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or “seat” of the arbitration. This does not mean, however, that the arbitral tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an arbitral tribunal to hold meetings or even hearings in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses…… It may be more convenient for an arbitral tribunal sitting in one country to conduct a hearing in another country, for instance, for the purpose of taking evidence….. In fact circumstances each move of the arbitral tribunal does not of itself mean that the seat of arbitration changes. The seat of arbitration remains the place initially agreed by or on behalf of the parties.”

73. These observations were subsequently followed in Union of India Vs. McDonnell Douglas Corp.32

74. It must be pointed out that the law of the seat or place where the arbitration is held, is normally the law to govern that arbitration. The territorial link between the place of arbitration and the law governing that arbitration is well established in the international instruments, namely, the New York Convention of 1958 and the UNCITRAL Model Law of 1985. It is true that the terms “seat” and “place” are often used interchangeably. In Redfern and Hunter on International Arbitration, 5 th Edn. (para 3.51), the seat theory is defined thus: “The concept that an arbitration is governed by the law of the place in which it is held, which is the ‘seat’ (or ‘forum’ or locus arbitri) of the arbitration, is well established in both the theory and practice of international arbitration. In fact, the 1923 Geneva Protocol states: ‘The arbitral procedure, including the constitution of the arbitral tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place.’ The New York Convention maintains the reference to ‘the law of the country where the arbitration took place “(Article V(1)(d))” and, synonymously to ‘the law of the country where the award is made’ [Article V(1)(a) and (e)]. The aforesaid observations clearly show that New York Convention continues the clear territorial link between the place of arbitration and the law governing that arbitration. The author further points out that this territorial link is again maintained in the Model Law which provides in Article 1(2) that “the provision of this law, except Articles 8, 9, 35 and 36 apply only if the place of arbitration is in the territory of the State”. Just as the Arbitration Act, 1996 maintains the territorial link between the place of arbitration and its law of arbitration, the law in Switzerland and England also maintain a clear link between the seat of arbitration and the lex arbitri. Swiss Law states: “the provision of this chapter shall apply to any arbitration if the seat of the arbitral tribunal is in Switzerland and if, at the time when the arbitration agreement was concluded, at least one of the parties had neither its domicile nor its habitual residence in Switzerland.33

75. We are of the opinion that the omission of the word “only” in Section 2(2) of the Arbitration Act, 1996 does not detract from the territorial scope of its application as embodied in Article 1(2) of the Model Law. The article merely states that the Arbitration Law as enacted in a given state shall apply if the arbitration is in the territory of that State. The absence of the word “only” which is found in Article 1(2) of the Model Law, from Section 2(2) of the Arbitration Act, 1996 does not change the content/import of Section 2(2) as limiting the application of Part I of the Arbitration Act, 1996 to arbitrations where the place/seat is in India.

76. For the reasons stated above, we are unable to support the conclusion reached in Bhatia International and Venture Global Engineering (supra), that Part I would also apply to arbitrations that do not take place in India.

77. India is not the only country which has dropped the word “only” from its National Arbitration Law. The word “only” is missing from the Swiss Private International Law Act, 1987 Chapter 12, Article 176 (1)(I). It is also missing in Section 2(1) of the 1996 Act (U.K.). The provision in Section 2(1) of the U.K. Act reads as follows :- “2(1) – The provisions of this Part apply where the seat of the arbitration is in England, Wales, or Northern Ireland.” The aforesaid sections clearly do not provide for any exception which, in fact, are separately provided for in Section 2(2) and 2(3) of the Arbitration Act, 1996. Therefore, we are in agreement with the submission made by Mr.Aspi Chenoy that Section 2(2) is an express parliamentary declaration/ recognition that Part I of the Arbitration Act, 1996 applies to arbitration having their place/seat in India and does not apply to arbitrations seated in foreign territories.

78. We do not agree with the learned counsel for the appellants that there would be no need for the provision contained in Section 2(2) as it would merely be stating the obvious, i.e., the Arbitration Act, 1996 applies to arbitrations having their place/seat in India. In our opinion, the provisions have to be read as limiting the applicability of Part I to arbitrations which take place in India. If Section 2(2) is construed as merely providing that Part I of the Arbitration Act, 1996 applies to India, it would be ex facie superfluous/redundant. No statutory provision is necessary to state/clarify that a law made by Parliament shall apply in India/to arbitrations in India. As submitted by Mr. Sorabjee, another fundamental principle of statutory construction is that courts will never impute redundancy or tautology to Parliament. See observations of Bhagwati, J. in Umed Vs. Raj Singh, 34 wherein it is observed as follows: “It is well settled rule of interpretation that the courts should, as far as possible, construe a statute so as to avoid tautology or superfluity.” The same principle was expressed by Viscount Simon in Hill Vs. William Hill (Park Lane) Ltd.35 in the following words:-

“It is to be observed that though a Parliamentary enactment (like Parliamentary eloquence) is capable of saying the same thing twice over without adding anything to what has already been said once, this repetition in an Act of Parliament is not to be assumed. When the legislature enacts a particular phrase in a statute the presumption is that it is saying something which has not been said immediately before. The Rule that a meaning should, if possible, be given to every word in the statute implies that, unless there is good reason to the contrary, the words add something which has not been said immediately before.”

79. We quote the above in extenso only to demonstrate that Section 2(2) is not merely stating the obvious. It would not be a repetition of what is already stated in Section 1(2) of the Arbitration Act, 1996 which provides that “it extends to the whole of India”. Since the consolidated Arbitration Act, 1996 deals with domestic, commercial and international commercial arbitrators, it was necessary to remove the uncertainty that the Arbitration Act, 1996 could also apply to arbitrations which do not take place in India. Therefore, Section 2(2) merely reinforces the limits of operation of the Arbitration Act, 1996 to India.

80. Another strong reason for rejecting the submission made by the learned counsel for the appellants is that if Part I were to be applicable to arbitrations seated in foreign countries, certain words would have to be added to Section 2(2). The section would have to provide that “this part shall apply where the place of arbitration is in India and to arbitrations having its place out of India.” Apart from being contrary to the contextual intent and object of Section 2(2), such an interpretation would amount to a drastic and unwarranted rewriting/alteration of the language of Section 2(2). As very strongly advocated by Mr. Sorabjee, the provisions in the Arbitration Act, 1996 must be construed by their plain language/terms. It is not permissible for the court while construing a provision to reconstruct the provision. In other words, the Court cannot produce a new jacket, whilst ironing out the creases of the old one. In view of the aforesaid, we are unable to support the conclusions recorded by this Court as noticed earlier.

Is Section 2(2) in conflict with Sections 2(4) and 2(5) –

81. We may now take up the submission of the learned counsel that Sections 2(4) and 2(5) specifically make Part I applicable to all arbitrations irrespective of where they are held. This submission is again a reiteration of the conclusions recorded in Bhatia International at Paragraph 14C and reiterated in Paragraphs 21 and 22. We have earlier held that Section 2(2) would not be applicable to arbitrations held outside India. We are unable to accept that there is any conflict at all between Section 2(2) on the one hand and Sections 2(4) and 2(5) on the other hand. Section 2(4) provides as under :

“This Part except sub-section (1) of Section 40, Sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.”

82. It is urged by the appellants that Section 2(4) makes Part I applicable to “every arbitration” under any other enactment, thereby makes it applicable to arbitrations wherever held, whether in India or outside India. In our opinion, the submission is devoid of merit. Section 2(4) makes Part I applicable to “every arbitration under any other enactment for the time being in force”. Hence, there must be an enactment “for the time being in force” under which arbitration takes place. In our opinion, “any other enactment” would in its ordinary meaning contemplate only an Act made by the Indian Parliament. By virtue of Article 245, “Parliament may make laws for the whole or any part of India”. Thus it is not possible to accept that “every arbitration” would include arbitrations which take place outside India. The phrase “all arbitrations” has to be read as limited to all arbitrations that take place in India. The two sub-sections merely recognize that apart from the arbitrations which are consensual between the parties, there may be other types of arbitrations, namely, arbitrations under certain statutes like Section 7 of the Indian Telegraph Act, 1886; or bye-laws of certain Associations such as Association of Merchants, Stock Exchanges and different Chamber of Commerce. Such arbitrations would have to be regarded as covered by Part I of the Arbitration Act, 1996, except in so far as the provisions of Part I are inconsistent with the other enactment or any rules made thereunder. There seems to be no indication at all in Section 2(4) that can make Part I applicable to statutory or compulsory arbitrations, which take place outside India.

83. Similarly, the position under Section 2(5) would remain the same. In our opinion, the provision does not admit of an interpretation that any of the provisions of Part I would have any application to arbitration which takes place outside India. Section 2(5) reads as under:-

“Subject to the provisions of sub-section (4), and save insofar as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this Part shall apply to all arbitrations and to all proceedings relating thereto.”

84. This sub-clause has been made subject to subclause (4) and must be read in the backdrop of Section 2(2) of the Arbitration Act, 1996. Section 2(2) of the aforesaid Act provides that this part shall apply where the place of arbitration is in India. Section 2(5) takes this a step further and holds that this Part shall apply to all arbitrations and proceedings relating thereto, where the seat is in India [a corollary of Section 2(2)] and if it is not a statutory arbitration or subject of an agreement between India and any other country. The exception of statutory enactments was necessary in terms of the last part of sub-clause (4), which provides for non application of this Part to statutory arbitrations in case of inconsistency. Thus, barring the statutory enactments as provided for under Section 2(4) of the Arbitration Act, 1996 and arbitrations pursuant to international agreement, all other arbitration proceedings held in India shall be subject to Part I of the said Act. Accordingly, the phrase ‘all arbitrations’ in Section 2(5) means that Part I applies to all where Part I is otherwise applicable. Thus, the provision has to be read as a part of the whole chapter for its correct interpretation and not as a stand alone provision. There is no indication in Section 2(5) that it would apply to arbitrations which are not held in India.

85. In view of the aforesaid observations, we have no doubt that the provisions of Section 2(4) and Section 2(5) would not be applicable to arbitrations which are covered by Part II of the Arbitration Act, 1996, i.e. the arbitrations which take place outside India. We, therefore, see no inconsistency between Sections 2(2), 2(4) and 2(5). For the aforesaid reasons, we are unable to agree with the conclusion in Bhatia International that limiting the applicability of part I to arbitrations that take place in India, would make Section 2(2) in conflict with Sections 2(4) and 2(5).

Does Section 2(7) indicate that Part I applies to arbitrations held outside India?

86. We have earlier noticed the very elaborate submissions made by the learned senior counsel on the rationale, scope, and application of Section 2(7), to arbitrations having a seat outside India.

87. Having considered the aforesaid submissions, we are of the opinion that the views expressed by the learned counsel for the appellants are not supported by the provisions of the Arbitration Act, 1996. Section 2(7) of the Arbitration Act, 1996 reads thus:

“An arbitral award made under this Part shall be considered as a domestic award.”

88. In our opinion, the aforesaid provision does not, in any manner, relax the territorial principal adopted by Arbitration Act, 1996. It certainly does not introduce the concept of a delocalized arbitration into the Arbitration Act, 1996. It must be remembered that Part I of the Arbitration Act, 1996 applies not only to purely domestic arbitrations, i.e., where none of the parties are in any way “foreign” but also to “international commercial arbitrations” covered within Section 2(1)(f) held in India. The term “domestic award” can be used in two senses: one to distinguish it from “international award”, and the other to distinguish it from a “foreign award”. It must also be remembered that “foreign award” may well be a domestic award in the country in which it is rendered. As the whole of the Arbitration Act, 1996 is designed to give different treatments to the awards made in India and those made outside India, the distinction is necessarily to be made between the terms “domestic awards” and “foreign awards”. The Scheme of the Arbitration Act, 1996 provides that Part I shall apply to both “international arbitrations” which take place in India as well as “domestic arbitrations” which would normally take place in India. This is clear from a number of provisions contained in the Arbitration Act, 1996 viz. the Preamble of the said Act; proviso and the explanation to Section 1(2); Sections 2(1)(f); 11(9), 11(12); 28(1)(a) and 28(1)(b). All the aforesaid provisions, which incorporate the term “international”, deal with pre-award situation. The term “international award” does not occur in Part I at all. Therefore, it would appear that the term “domestic award” means an award made in India whether in a purely domestic context, i.e., domestically rendered award in a domestic arbitration or in the international context, i.e., domestically rendered award in an international arbitration. Both the types of awards are liable to be challenged under Section 34 and are enforceable under Section 36 of the Arbitration Act, 1996. Therefore, it seems clear that the object of Section 2(7) is to distinguish the domestic award covered under Part I of the Arbitration Act, 1996 from the “foreign award” covered under Part II of the aforesaid Act; and not to distinguish the “domestic award” from an “international award” rendered in India. In other words, the provision highlights, if any thing, a clear distinction between Part I and Part II as being applicable in completely different fields and with no overlapping provisions.

89. That Part I and Part II are exclusive of each other is evident also from the definitions section in Part I and Part II. Definitions contained in Section 2(i)(a) to (h) are limited to Part I. The opening line which provides “In this part, unless the context otherwise requires……”, makes this perfectly clear. Similarly, Section 44 gives the definition of a foreign award for the purposes of Part II (Enforcement of Certain Foreign Awards); Chapter I (New York Convention Awards). Further, Section 53 gives the interpretation of a foreign award for the purposes of Part II (Enforcement of Certain Foreign Awards); Chapter II (Geneva Convention Awards). From the aforesaid, the intention of the Parliament is clear that there shall be no overlapping between Part I and Part II of the Arbitration Act, 1996. The two parts are mutually exclusive of each other. To accept the submissions made by the learned counsel for the appellants would be to convert the “foreign award” which falls within Section 44, into a domestic award by virtue of the provisions contained under Section 2(7) even if the arbitration takes place outside India or is a foreign seated arbitration, if the law governing the arbitration agreement is by choice of the parties stated to be the Arbitration Act, 1996. This, in our opinion, was not the intention of the Parliament. The territoriality principle of the Arbitration Act, 1996, precludes Part I from being applicable to a foreign seated arbitration, even if the agreement purports to provide that the Arbitration proceedings will be governed by the Arbitration Act, 1996.

90. The additional submission of Mr. Sorabjee is that Section 9-B of the 1961 Act, which was in negative terms, has been re-enacted as Section 2(7) of the Arbitration Act, 1996 in positive terms. Section 9-B of the 1961 Act, was as under:

“9. Saving – Nothing in this Act shall –
……………..
(b) apply to any award made on an arbitration agreement governed by the law of India.”

91. We are of the opinion that the Section has been intentionally deleted, whereas many other provisions of the 1961 Act have been retained in the Arbitration Act, 1996. If the provision were to be retained, it would have been placed in Part II of the Arbitration Act, 1996. In our opinion, there is no link between Section 2(7) of the Arbitration Act, 1996, with the deleted Section 9-B of the 1961 Act. It was by virtue of the aforesaid provision that the judgments in Singer Company & Ors. (supra) and ONGC v. Western Company of North America (supra) were rendered. In both the cases the foreign awards made outside India were set aside, under the 1940 Act. By deletion of Section 9-B of the 1961 Act, the judgments have been rendered irrelevant under the Arbitration Act, 1996. Having removed the mischief created by the aforesaid provision, it cannot be the intention of the Parliament to reintroduce it, in a positive form as Section 2(7) of the Arbitration Act, 1996. We, therefore, see no substance in the additional submission of Mr. Sorabjee.

92. We agree with Mr. Salve that Part I only applies when the seat of arbitration is in India, irrespective of the kind of arbitration. Section 2(7) does not indicate that Part I is applicable to arbitrations held outside India.

93. We are, therefore, of the opinion that Section 2(7) does not alter the proposition that Part I applies only where the “seat” or “place” of the arbitration is in India.

94. It appears to us that provision in Section 2(7) was also necessary to foreclose a rare but possible scenario (as canvassed by Mr. Gopal Subramanium) where two foreigners who arbitrate in India, but under a Foreign Arbitration Act, could claim that the resulting award would be a “nondomestic” award. In such a case, a claim could be made to enforce the award in India, even though the seat of arbitration is also in India. This curious result has occurred in some cases in other jurisdictions, e.g., U.S.A. In the case of Bergesen Vs. Joseph Muller Corporation36 , the Court held an award made in the State of New York between two foreign parties is to be considered as a non-domestic award within the meaning of the New York Convention and its implementing legislation. Section 2(7), in our opinion, is enacted to reinforce the territorial criterion by providing that, when two foreigners arbitrate in India, under a Foreign Arbitration Act, the provisions of Part I will apply. Indian Courts being the supervisory Courts, will exercise control and regulate the arbitration proceedings, which will produce a “domestically rendered international commercial award”. It would be a “foreign award” for the purposes of enforcement in a country other than India. We, therefore, have no hesitation in rejecting the submissions made by the learned senior counsel for the appellants, being devoid of merit.

Party Autonomy

95. Learned counsel for the appellants have submitted that Section 2(1)(e), Section 20 and Section 28 read with Section 45 and Section 48(1)(e) make it clear that Part I is not limited only to arbitrations which take place in India. These provisions indicate that Arbitration Act, 1996 is subject matter centric and not exclusively seat centric. Therefore, “seat” is not the “centre of gravity” so far as the Arbitration Act, 1996 is concerned. We are of the considered opinion that the aforesaid provisions have to be interpreted by keeping the principle of territoriality at the forefront. We have earlier observed that Section 2(2) does not make Part I applicable to arbitrations seated or held outside India. In view of the expression used in Section 2(2), the maxim expressum facit cessare tacitum, would not permit by interpretation to hold that Part I would also apply to arbitrations held outside the territory of India. The expression “this Part shall apply where the place of arbitration is in India” necessarily excludes application of Part I to arbitration seated or held outside India. It appears to us that neither of the provisions relied upon by the learned counsel for the appellants would make any section of Part I applicable to arbitration seated outside India. It will be apposite now to consider each of the aforesaid provisions in turn. Section 2(1)

(e) of the Arbitration Act, 1996 reads as under:
“2. Definitions
(1) In this Part, unless the context otherwise requires –
……………..
(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.”

96. We are of the opinion, the term “subject matter of the arbitration” cannot be confused with “subject matter of the suit”. The term “subject matter” in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the Courts of Delhi being the Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the Courts would have jurisdiction, i.e., the Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located.

97. The definition of Section 2(1)(e) includes “subject matter of the arbitration” to give jurisdiction to the courts where the arbitration takes place, which otherwise would not exist. On the other hand, Section 47 which is in Part II of the Arbitration Act, 1996 dealing with enforcement of certain foreign awards has defined the term “court” as a court having jurisdiction over the subject-matter of the award. This has a clear reference to a court within whose jurisdiction the asset/person is located, against which/whom the enforcement of the international arbitral award is sought. The provisions contained in Section 2(1)(e) being purely jurisdictional in nature can have no relevance to the question whether Part I applies to arbitrations which take place outside India.

98. We now come to Section 20, which is as under:-

“20. Place of arbitration – (1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, good or other property.”

A plain reading of Section 20 leaves no room for doubt that where the place of arbitration is in India, the parties are free to agree to any “place” or “seat” within India, be it Delhi, Mumbai etc. In the absence of the parties’ agreement thereto, Section 20(2) authorizes the tribunal to determine the place/seat of such arbitration. Section 20(3) enables the tribunal to meet at any place for conducting hearings at a place of convenience in matters such as consultations among its members for hearing witnesses, experts or the parties.

99. The fixation of the most convenient “venue” is taken care of by Section 20(3). Section 20, has to be read in the context of Section 2(2), which places a threshold limitation on the applicability of Part I, where the place of arbitration is in India. Therefore, Section 20 would also not support the submission of the extra-territorial applicability of Part I, as canvassed by the learned counsel for the appellants, so far as purely domestic arbitration is concerned.

100. True, that in an international commercial arbitration, having a seat in India, hearings may be necessitated outside India. In such circumstances, the hearing of the arbitration will be conducted at the venue fixed by the parties, but it would not have the effect of changing the seat of arbitration which would remain in India. The legal position in this regard is summed up by Redfern and Hunter, The Law and Practice of International Commercial Arbitration (1986) at Page 69 in the following passage under the heading “The Place of Arbitration”:-

“The preceding discussion has been on the basis that there is only one “place” of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of the reference or the minutes of proceedings or in some other way as the place or “seat” of the arbitration. This does not mean, however, that the arbitral tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an arbitral tribunal to hold meetings – or even hearings – in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses… It may be more convenient for an arbitral tribunal sitting in one country to conduct a hearing in another country – for instance, for the purpose of taking evidence….. In such circumstances, each move of the arbitral tribunal does not of itself mean that the seat of arbitration changes. The seat of the arbitration remains the place initially agreed by or on behalf of the parties.”

This, in our view, is the correct depiction of the practical considerations and the distinction between “seat” (Section 20(1) and 20(2)) and “venue” (Section 20(3)). We may point out here that the distinction between “seat” and “venue” would be quite crucial in the event, the arbitration agreement designates a foreign country as the “seat”/”place” of the arbitration and also select the Arbitration Act, 1996 as the curial law/law governing the arbitration proceedings. It would be a matter of construction of the individual agreement to decide whether:

(i) The designated foreign “seat” would be read as in fact only providing for a “venue” / “place” where the hearings would be held, in view of the choice of Arbitration Act, 1996 as being the curial law – OR

(ii) Whether the specific designation of a foreign seat, necessarily carrying with it the choice of that country’s Arbitration / curial law, would prevail over and subsume the conflicting selection choice by the parties of the Arbitration Act, 1996.

ONLY if the agreement of the parties is construed to provide for the “seat” / “place” of Arbitration being in India – would Part I of the Arbitration Act, 1996 be applicable. If the agreement is held to provide for a “seat” / “place” outside India, Part I would be inapplicable to the extent inconsistent with the arbitration law of the seat, even if the agreement purports to provide that the Arbitration Act, 1996 shall govern the arbitration proceedings.

101. How complex the situation can become can be best demonstrated by looking at some of the prominent decisions on the factors to be taken into consideration in construing the relevant provisions of the contract/arbitration clause.

102. In Naviera Amazonica Peruana S.A. (supra), the Court of Appeal, in England considered the agreement which contained a clause providing for the jurisdiction of Courts in Lima Peru in the event of judicial dispute and at the same time contained a clause providing that the arbitration would be governed by English Law and the procedural law of Arbitration shall be English Law.

103. The Court of Appeal summarized the State of the jurisprudence on this topic. Thereafter, the conclusions which arose from the material were summarized as follows:-

“All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law. (1) The law governing the substantive contract. (2) The law governing the agreement to arbitrate and the performance of that agreement. (3) The law governing the conduct of the arbitration. In the majority of cases all three will be the same. But (1) will often be different from (2) and (3). And occasionally, but rarely, (2) may also differ from (3).”

104. It is observed that the problem about all these formulations, including the third, is that they elide the distinction between the legal localization of an arbitration on the one hand and the appropriate or convenient geographical locality for hearings of the arbitration on the other hand.

105. On the facts of the case, it was observed that since there was no contest on Law 1 and Law 2, the entire issue turned on Law 3, “The law governing the conduct of the arbitration. This is usually referred to as the curial or procedural law, or the lex fori.” Thereafter, the Court approvingly quoted the following observation from Dicey & Morris on the Conflict of Laws (11th Edition): “English Law does not recognize the concept of a de-localised” arbitration or of “arbitral procedures floating in the transnational firmament, unconnected with any municipal system of law”. It is further held that “accordingly every arbitration must have a “seat” or “locus arbitri” or “forum” which subjects its procedural rules to the municipal law which is there in force”. The Court thereafter culls out the following principle “Where the parties have failed to choose the law governing the arbitration proceedings, those proceedings must be considered, at any rate prima facie, as being governed by the law of the country in which the arbitration is held, on the ground that it is the country most closely connected with the proceedings”. The aforesaid classic statement of the Conflict of Law Rules as quoted in Dicey & Morris on the Conflict of Laws (11th Edition) Volume 1, was approved by the House of Lords in James Miller & Partners Vs. Whitworth Street Estates (Manchester) Ltd.37 . Mr. Justice Mustill in the case of Black Clawson International Ltd. Vs. PapierIrke Waldhof-Aschaf- fenburg A.G.38 , a little later characterized the same proposition as “the law of the place where the reference is conducted, the lex fori”. The Court also recognized the proposition that “there is equally no reason in theory which precludes parties to agree that an arbitration shall be held at a place or in country X but subject to the procedural laws of Y”. But it points out that in reality parties would hardly make such a decision as it would create enormous unnecessary complexities. Finally it is pointed out that it is necessary not to confuse the legal “seat” of an arbitration with the geographically convenient place or places for holding hearings.

106. On examination of the facts in that case, the Court of Appeal observed that there is nothing surprising in concluding that these parties intended that any dispute under this policy, should be arbitrated in London. But it would always be open to the Arbitral Tribunal to hold hearings in Lima if this were thought to be convenient, even though the seat or forum of the arbitration would remain in London.

107. A similar situation was considered by the High Court of Justice Queen’s Bench Division Technology and Construction Court in Braes of Doune Wind Farm (Scotland) Limited v Alfred McAlpine Business Services Limited (supra). In this case the Court considered two applications relating to the First Award of an arbitrator. The award related to an EPC (Engineering, Procurement and Construction) Contract dated 4 th November, 2005 (“the EPC Contract”) between the Claimant (“the Employer”) and the Defendant (“the Contractor”) whereby the Contractor undertook to carry out works in connection with the provision of 36 wind turbine generators (the “WTGs”) at a site some 18 kilometres from Stirling in Scotland. This award dealt with enforceability of the clauses of the EPC Contract which provided for liquidated damages for delay. The claimant applied for leave to appeal against this award upon a question of law whilst the Defendant sought, in effect, a declaration that the Court had no jurisdiction to entertain such an application and for leave to enforce the award. The Court considered the issue of jurisdiction which arose out of application of Section 2 of the (English) Arbitration Act, 1996 which provides that – “(1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland.” The Court notices the singular importance of determining the location of “juridical seat” in terms of Section 3, for the purposes of Section 2, in the following words:-

“I must determine what the parties agreed was the “seat” of the arbitration for the purposes of Section 2 of the Arbitration Act 1996. This means by Section 3 what the parties agreed was the “juridical” seat. The word “juridical” is not an irrelevant word or a word to be ignored in ascertaining what the “seat” is. It means and connotes the administration of justice so far as the arbitration is concerned. It implies that there must be a country whose job it is to administer, control or decide what control there is to be over an arbitration.”

108. Thus, it would be evident that if the “juridical seat” of the arbitration was in Scotland, the English Courts would have no jurisdiction to entertain an application for leave to appeal. The Contractor argued that the seat of the arbitration was Scotland whilst the Employer argued that it was England. There were to be two contractors involved with the project. 109. The material Clauses of the EPC Contract were: 1.4.1. The Contract shall be governed by and construed in accordance with the laws of England and Wales and, subject to Clause 20.2 (Dispute Resolution), the Parties agree that the courts of England and Wales have exclusive jurisdiction to settle any dispute arising out of or in connection with the contract.

(a)… any dispute or difference between the Parties to this Agreement arising out of or in connection with this Agreement shall be referred to arbitration.

(b) Any reference to arbitration shall be to a single arbitrator… and conducted in accordance with the Construction Industry Model Arbitration Rules February 1998 Edition, subject to this Clause (Arbitration Procedure)…

(c)This arbitration agreement is subject to English Law and the seat of the arbitration shall be Glasgow, Scotland. Any such reference to arbitration shall be deemed to be a reference to arbitration within the meaning of the Arbitration Act, 1996 or any statutory re-enactment.”

110. The Arbitration was to be conducted under the Arbitration Rules known colloquially as the “CIMAR Rules”.

Rule 1.1 of the Rules provided that:

“These Rules are to be read consistently with the Arbitration Act 1996 (the Act), with common expressions having the same meaning.”

Rule 1.6 applied:
(a) a single arbitrator is to be appointed, and
(b) the seat of the arbitration is in England and Wales or Northern Ireland.

111. The court was informed by the parties in arguments that Scottish Court’s powers of control or intervention would be, at the very least, seriously circumscribed by the parties’ agreement in terms as set out in paragraph 6 of the judgment. It was further indicated by the counsel that the Scottish Court’s powers of intervention might well be limited to cases involving such extreme circumstances as the dishonest procurement of an award.

112. In construing the EPC, the court relied upon the principles stated by the Court of Appeal in Naviera Amazonica Peruana SA (supra).

113. Upon consideration of the entire material, the Court formed the view that it does have jurisdiction to entertain an application by either party to the contract in question under Section 69 of the (English) Arbitration Act, 1996. The court gave the following reasons for the decision:–

(a) One needs to consider what, in substance, the parties agreed was the law of the country which would juridically control the arbitration.

(b) I attach particular importance to Clause 1.4.1. The parties agreed that essentially the English (and Welsh) Courts have “exclusive jurisdiction” to settle disputes. Although this is “subject to” arbitration, it must and does mean something other than being mere verbiage. It is a jurisdiction over disputes and not simply a court in which a foreign award may be enforced. If it is in arbitration alone that disputes are to be settled and the English Courts have no residual involvement in that process, this part of Clause 1.4.1 is meaningless in practice. The use of the word “jurisdiction” suggests some form of control.

(c) The second part of Clause 1.4.1 has some real meaning if the parties were agreeing by it that, although the agreed disputes resolution process is arbitration, the parties agree that the English Court retains such jurisdiction to address those disputes as the law of England and Wales permits. The Arbitration Act, 1996 permits and requires the Court to entertain applications under Section 69 for leave to appeal against awards which address disputes which have been referred to arbitration. By allowing such applications and then addressing the relevant questions of law, the Court will settle such disputes; even if the application is refused, the court will be applying its jurisdiction under the Arbitration Act, 1996 and providing resolution in relation to such disputes.

(d) This reading of Clause 1.4.1 is consistent with Clause 20.2.2 (c) which confirms that the arbitration agreement is subject to English Law and that the “reference” is “deemed to be a reference to arbitration within the meaning of the Arbitration Act, 1996.” This latter expression is extremely odd unless the parties were agreeing that any reference to arbitration was to be treated as a reference to which the Arbitration Act, 1996 was to apply. There is no definition in the Arbitration Act, 1996 of a “reference to arbitration”, which is not a statutory term of art. The parties presumably meant something in using the expression and the most obvious meaning is that the parties were agreeing that the Arbitration Act, 1996 should apply to the reference without qualification.

(e) Looked at in this light, the parties’ express agreement that the “seat” of arbitration was to be Glasgow, Scotland must relate to the place in which the parties agreed that the hearings should take place. However, by all the other references the parties were agreeing that the curial law or law which governed the arbitral proceedings establish that, prima facie and in the absence of agreement otherwise, the selection of a place or seat for an arbitration will determine what the curial law or “lex fori” or “lex arbitri” will be, we consider that, where in substance the parties agree that the laws of one country will govern and control a given arbitration, the place where the arbitration is to be heard will not dictate what the governing or controlling law will be.

(f) In the context of this particular case, the fact that, as both parties seemed to accept in front of me, the Scottish Courts would have no real control or interest in the arbitral proceedings other than in a criminal context, suggests that they can not have intended that the arbitral proceedings were to be conducted as an effectively “delocalized” arbitration or in a “transnational firmament”, to borrow Lord Justice Kerr’s words in the Naviera Amazonica case.

(g) The CIMAR Rules are not inconsistent with my view. Their constant references to the Arbitration Act, 1996 suggest that the parties at least envisaged the possibility that the Courts of England and Wales might play some part in policing any arbitration. For instance, Rule 11.5 envisages something called “the Court” becoming involved in securing compliance with a peremptory order of the arbitrator. That would have to be the English Court, in practice.”

114. These observations clearly demonstrate the detailed examination which is required to be undertaken by the court to discern from the agreement and the surrounding circumstances the intention of the parties as to whether a particular place mentioned refers to the “venue” or “seat” of the arbitration. In that case, the Court, upon consideration of the entire material, concluded that Glasgow was a reference to the “venue” and the “seat” of the arbitration was held to be in England. Therefore, there was no supplanting of the Scottish Law by the English Law, as both the seat under Section 2 and the “juridical seat” under Section 3, were held to be in England. Glasgow being only the venue for holding the hearings of the arbitration proceedings. The Court rather reiterated the principle that the selection of a place or seat for an arbitration will determine what the “curial law” or “lex fori” or “lex arbitri” will be. It was further concluded that where in substance the parties agreed that the laws of one country will govern and control a given arbitration, the place where the arbitration is to be heard will not dictate what the governing law or controlling law will be. In view of the above, we are of the opinion that the reliance placed upon this judgment by Mr.Sundaram is wholly misplaced.

115. The aforesaid ratio has been followed in Shashoua & Ors. (supra). In this case, the Court was concerned with the construction of the shareholders’ agreement between the parties, which provided that “the venue of the arbitration shall be London, United Kingdom”. Whilst providing that the arbitration proceedings should be conducted in English in accordance with ICC Rules and that the governing law of the shareholders’ agreement itself would be the law of India. The claimants made an application to the High Court in New Delhi seeking interim measures of protection under Section 9 of the Arbitration Act, 1996, prior to the institution of arbitration proceedings. Following the commencement of the arbitration, the defendant and the joint venture company raised a challenge to the jurisdiction of the arbitral tribunal, which the panel heard as a preliminary issue. The tribunal rejected the jurisdictional objection. The tribunal then made a cost award ordering the defendant to pay $140,000 and £172,373.47. The English Court gave leave to the claimant to enforce the costs award as a judgment. The defendant applied to the High Court of Delhi under Section 34(2)(iv) of the Arbitration Act, 1996 to set aside the costs award. The claimant had obtained a charging order, which had been made final, over the defendant’s property in the UK. The defendant applied to the Delhi High Court for an order directing the claimants not to take any action to execute the charging order, pending the final disposal of the Section 34 petition in Delhi seeking to set aside the costs award. The defendant had sought unsuccessfully to challenge the costs award in the Commercial Court under Section 68 and Section 69 of the 1996 Act (U.K.) and to set aside the order giving leave to enforce the award. Examining the fact situation in the case, the Court observed as follows:-

“The basis for the court’s grant of an anti-suit injunction of the kind sought depended upon the seat of the arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial law and was analogous to an exclusive jurisdiction clause. Not only was there agreement to the curial law of the seat, but also to the Courts of the seat having supervisory jurisdiction over the arbitration, so that, by agreeing to the seat, the parties agreed that any challenge to an interim or final award was to be made only in the courts of the place designated as the seat of the arbitration.

Although, ‘venue’ was not synonymous with ‘seat’, in an arbitration clause which provided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that ‘the venue of arbitration shall be London, United Kingdom’ did amount to the designation of a juridical seat……”

In Paragraph 54, it is further observed as follows:-
“There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that court, because it was best fitted to determine such issues under Indian Law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this court to decide in the context of an anti-suit injunction.”
[emphasis supplied]

116. In making the aforesaid observations, the Court relied on judgments of the Court of Appeal in C Vs. D 39 . Here the Court of Appeal in England was examining an appeal by the defendant insurer from the judgment of Cooke, J. granting an anti-suit injunction preventing it from challenging an arbitration award in the U.S. Courts. The insurance policy provided “any dispute arising under this policy shall be finally and fully determined in London, England under the provisions of the English Arbitration Act, 1950 as amended”. However, it was further provided that “this policy shall be governed by and construed in accordance with the internal laws of the State of New York….”. A partial award was made in favour of the claimants. It was agreed that this partial award is, in English Law terms, final as to what it decides. The defendant sought the tribunal’s withdrawal of its findings. The defendant also intimated its intention to apply to a Federal Court applying US Federal Arbitration Law governing the enforcement of arbitral award, which was said to permit “vacatur” of an award where arbitrators have manifestly disregarded the law. It was in consequence of such intimation that the claimant sought and obtained an interim anti-suit injunction. The Judge held that parties had agreed that any proceedings seeking to attack or set aside the partial award would only be those permitted by English Law. It was not, therefore, permissible for the defendant to bring any proceedings in New York or elsewhere to attack the partial award. The Judge rejected the arguments to the effect that the choice of the law of New York as the proper law of the contract amounted to an agreement that the law of England should not apply to proceedings post award. The Judge also rejected a further argument that the separate agreement to arbitrate contained in the Condition V(o) of the policy was itself governed by New York Law so that proceedings could be instituted in New York. The Judge granted the claimant a final injunction. The Court of Appeal noticed the submission on behalf of the defendant as follows:-

“14. The main submission of Mr Hirst QC for the defendant insurer was that the judge had been wrong to hold that the arbitration agreement itself was governed by English law merely because the seat of the arbitration was London. He argued that the arbitration agreement itself was silent as to its proper law but that its proper law should follow the proper law of the contract as a whole, namely New York law, rather than follow from the law of the seat of the arbitration namely England. The fact that the arbitration itself was governed by English procedural law did not mean that it followed that the arbitration agreement itself had to be governed by English law. The proper law of the arbitration agreement was that law with which the agreement had the most close and real connection; if the insurance policy was governed by New York law, the law with which the arbitration agreement had its closest and most real connection was the law of New York. It would then follow that, if New York law permitted a challenge for manifest disregard of the law, the court in England should not enjoin such a challenge.”

The Court of Appeal held:-

“16. I shall deal with Mr Hirst’s arguments in due course but, in my judgment, they fail to grapple with the central point at issue which is whether or not, by choosing London as the seat of the arbitration, the parties must be taken to have agreed that proceedings on the award should be only those permitted by English law. In my view they must be taken to have so agreed for the reasons given by the judge. The whole purpose of the balance achieved by the Bermuda Form (English arbitration but applying New York law to issues arising under the policy) is that judicial remedies in respect of the award should be those permitted by English law and only those so permitted. Mr Hirst could not say (and did not say) that English judicial remedies for lack of jurisdiction on procedural irregularities under sections 67 and 68 of the Arbitration Act, 1996 Were not permitted; he was reduced to saying that New York judicial remedies were also permitted. That, however, would be a recipe for litigation and (what is worse) confusion which cannot have been intended by the parties. No doubt New York law has its own judicial remedies for want of jurisdiction and serious irregularity but it could scarcely be supposed that a party aggrieved by one part of an award could proceed in one jurisdiction and a party aggrieved by another part of an award could proceed in another jurisdiction. Similarly, in the case of a single complaint about an award, it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award. There would be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated.

17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award”……

117. On the facts of the case, the Court held that the seat of the arbitration was in England and accordingly entertained the challenge to the award. Again in Union of India Vs. McDonnell Douglas Corp. (supra), the proposition laid down in Naviera Amazonica Peruana S.A. (supra) was reiterated. In this case, the agreement provided that:-

“The arbitration shall be conducted in accordance with the procedure provided in the Indian Arbitration Act of 1940 or any reenactment or modification thereof. The arbitration shall be conducted in the English language. The award of the Arbitrators shall be made by majority decision and shall be final and binding on the Parties hereto. The seat of the arbitration proceedings shall be London, United Kingdom.”

118. Construing the aforesaid clause, the Court held as follows:-

“On the contrary, for the reasons given, it seems to me that by their agreement the parties have chosen English law as the law to govern their arbitration proceedings, while contractually importing from the Indian Act those provisions of that Act which are concerned with the internal conduct of their arbitration and which are not inconsistent with the choice of English arbitral procedural law.”

119. The same question was again considered by the High Court of Justice, Queen’s Bench Division, Commercial Court (England) in Sulamerica CIA Nacional de Seguros SA v. Enesa Engenharia SA – Enesa.40 The Court noticed that the issue in this case depends upon the weight to be given to the provision in Condition 12 of the Insurance policy that “the seat of the arbitration shall be London, England.” It was observed that this necessarily carried with it the English Court’s supervisory jurisdiction over the arbitration process. It was observed that “this follows from the express terms of the Arbitration Act, 1996 and, in particular, the provisions of Section 2 which provide that Part I of the Arbitration Act, 1996 applies where the seat of the arbitration is in England and Wales or Northern Ireland. This immediately establishes a strong connection between the arbitration agreement itself and the law of England. It is for this reason that recent authorities have laid stress upon the locations of the seat of the arbitration as an important factor in determining the proper law of the arbitration agreement.” The court thereafter makes a reference to the observations made in the case of C. vs. D by the High Court as well as the Court of Appeal. In Paragraph 12, the observations made have particular relevance which are as under:

“In the Court of Appeal, Longmore LJ, with whom the other two Lord Justices agreed, decided (again obiter) that, where there was no express choice of law for the arbitration agreement, the law with which that agreement had its closest and most real connection was more likely to be the law of the seat of arbitration than the law of the underlying contract. He referred to Mustill J. (as he then was) in Black Clawsen International Limited v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 LLR 446 as saying that it would be a rare case in which the law of the arbitration agreement was not the same as the law of the place or seat of the arbitration. Longmore LJ also referred to the speech of Lord Mustill (as he had then become) in Chanel Tunnel Group Limited vs. Balfour Beatty Construction Limited [1993] 1 LLR 291 and concluded that the Law Lord was saying that, although it was exceptional for the proper law of the underlying contract to be different from the proper law of the arbitration agreement, it was less exceptional (or more common) for the proper law of that underlying contract to be different from the curial law, the law of the seat of the arbitration. He was not expressing any view on the frequency or otherwise of the law of the arbitration agreement differing from the law of the seat of the arbitration. Longmore LJ agreed with Mustill J’s earlier dictum that it would be rare for the law of the separable arbitration agreement to be different from the law of the seat of the arbitration. The reason was “that an agreement to arbitrate will normally have a closer and more real connection with the place where the parties have chose to arbitrate, than with the place of the law of the underlying contract, in cases where the parties have deliberately chosen to arbitrate, in one place, disputes which have arisen under a contract governed by the law of another place”.

120. Upon consideration of the entire matter, it was observed that – “In these circumstances it is clear to me that the law with which the agreement to arbitrate has its closest and most real connection is the law of the seat of arbitration, namely, the law of England”. (Para 14). It was thereafter concluded by the High Court that English Law is the proper law of the agreement to arbitrate. (Para 15)

121. The legal position that emerges from a conspectus of all the decisions, seems to be, that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings.

122. It would, therefore, follow that if the arbitration agreement is found or held to provide for a seat / place of arbitration outside India, then the provision that the Arbitration Act, 1996 would govern the arbitration proceedings, would not make Part I of the Arbitration Act, 1996 applicable or enable Indian Courts to exercise supervisory jurisdiction over the arbitration or the award. It would only mean that the parties have contractually imported from the Arbitration Act, 1996, those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the English Procedural Law/Curial Law. This necessarily follows from the fact that Part I applies only to arbitrations having their seat / place in India.

Section 28 –

123. It was submitted by the learned counsel for the appellants that Section 28 is another indication of the intention of the Parliament that Part I of the Arbitration Act, 1996 was not confined to arbitrations which take place in India. We are unable to accept the submissions made by the learned counsel for the parties. As the heading of the Section 28 indicates, its only purpose is to identify the rules that would be applicable to “substance of dispute”. In other words, it deals with the applicable conflict of law rules. This section makes a distinction between purely domestic arbitrations and international commercial arbitrations, with a seat in India. Section 28(1)(a) makes it clear that in an arbitration under Part I to which Section 2(1)(f) does not apply, there is no choice but for the Tribunal to decide “the dispute” by applying the Indian “substantive law applicable to the contract”. This is clearly to ensure that two or more Indian parties do not circumvent the substantive Indian law, by resorting to arbitrations. The provision would have an overriding effect over any other contrary provision in such contract. On the other hand, where an arbitration under Part I is an international commercial arbitration within Section 2(1)(f), the parties would be free to agree to any other “substantive law” and if not so agreed, the “substantive law” applicable would be as determined by the Tribunal. The section merely shows that the legislature has segregated the domestic and international arbitration. Therefore, to suit India, conflict of law rules have been suitably modified, where the arbitration is in India. This will not apply where the seat is outside India. In that event, the conflict of laws rules of the country in which the arbitration takes place would have to be applied. Therefore, in our opinion, the emphasis placed on the expression “where the place of arbitration is situated in India”, by the learned senior counsel for the appellants, is not indicative of the fact that the intention of Parliament was to give an extra-territorial operation to Part I of the Arbitration Act, 1996.

Part II

124. It was next submitted by the counsel for the appellants that even some of the provisions contained in Part II would indicate that Part I of the Arbitration Act, 1996 would not be limited to the arbitrations which take place in India. It was pointed out that even though Part II deals specifically with recognition and enforcement of certain foreign awards yet provision is made for annulment of the award by two Courts, i.e., Courts of the country in which the award was made or the Courts of the country under the law of which the award was made. This, according to the learned counsel, recognizes the concurrent jurisdictions of Courts in two countries to set aside the award. They rely on Section 48(1)(e) of the Arbitration Act, 1996, which corresponds to Article V(1) (e) of the New York Convention. Mr. Sorabjee has emphasised that both these expressions must necessarily be given effect to and no part of the Act or section can be disregarded by describing the same as a “fossil”. This is in reply to the submission made by Mr. Salve on the basis of the history of the inclusion of the term “under the law of which” in Article V(1)(e). Mr. Sorabjee has emphasised that the word “under the law of which” were specifically inserted in view of the Geneva Convention, which limited the jurisdiction to only one Court to set aside the award namely “the country in which the award was made.” He, therefore, submits that this specific intention must be given effect to. Not giving effect to the words “under the law of which the award was made”, will allow many awards to go untested. At this stage, Mr. Sorabjee had relied on Reliance Industries Ltd. (supra). We must notice here that Mr. Sundaram in his submissions has not gone so far as Mr. Sorabjee. According to Mr. Sundaram, the jurisdiction of a domestic Court over an arbitration is neither conferred by the New York Convention, nor under Part II, since Part II merely deals with circumstances under which the enforcing court may or may not refuse to enforce the award. That circumstance includes annulment of proceedings in a competent court, i.e., the Court in the country where the arbitration is held or the Court having jurisdiction in the country under the laws of which the arbitral disputes have been conducted. According to Mr. Sundaram, providing two such situs for the purposes of annulment does not ipso facto amount to conferring of jurisdiction to annul, on any domestic Court. The provision only provides that if the annulment proceedings are before such Courts, the award may not be enforced. Therefore, to see if an arbitral award can be annulled by the Court of the country, one has to look at the jurisdiction of such Courts under the domestic law. The relevance of New York Convention and Article V(1)(e) ends there, with merely recognizing possibility of two Courts having jurisdiction to annul an award. Mr. Subramanium emphasised that provisions contained in Part II can not be said to be a complete code as it necessarily makes use of the provisions of Part I. Since Part I prescribes the entire procedure for the conduct of an arbitration and Part II is only to give recognition to certain foreign awards, the two parts have to be read harmoniously in order to make the Indian Arbitration Law a complete code. He submits that Part I can not be read separately from Part II as certain provisions of Part I, which are necessary for arbitrations are not covered by Part II. He gives an example of the provision contained in Section 45, which empowers the term “judicial authority” to refer parties to arbitration when seized of an action in a matter, in respect of which parties have made an agreement as referred to in Section 44. The aforesaid provision contains a non-obstante clause. This clearly indicates that it is contemplated by the legislature that provisions of Part I would apply to matters covered by Part II. He, therefore, points out that if Part I were to apply only to arbitrations that take place in India, then Indian Courts would not be able to grant any interim relief under Section 9 to arbitrations which take place outside India. He also points out that there are a number of other provisions where Indian Courts would render assistance in arbitrations taking place outside India. Learned senior counsel has also pointed out the necessity to read Sections 34 and 48 of the Arbitration Act, 1996 harmoniously. He points out that barring Section 34, which involves the challenge to an award, the other provisions in Part I and Part II are facilitative in character.

125. We are unable to agree with the submission of the learned senior counsel that there is any overlapping of the provisions in Part I and Part II; nor are the provisions in Part II supplementary to Part I. Rather there is complete segregation between the two parts.

126. Generally speaking, regulation of arbitration consists of four steps (a) the commencement of arbitration; (b) the conduct of arbitration; (c) the challenge to the award; and (d) the recognition or enforcement of the award. In our opinion, the aforesaid delineation is self evident in Part I and Part II of the Arbitration Act, 1996. Part I of the Arbitration Act, 1996 regulates arbitrations at all the four stages. Part II, however, regulates arbitration only in respect of commencement and recognition or enforcement of the award.

127. In Part I, Section 8 regulates the commencement of arbitration in India, Sections 3, 4, 5, 6, 10 to 26, 28 to 33 regulate the conduct of arbitration, Section 34 regulates the challenge to the award, Sections 35 and 36 regulate the recognition and enforcement of the award. Sections 1, 2, 7, 9, 27, 37, 38 to 43 are ancillary provisions that either support the arbitral process or are structurally necessary. Thus, it can be seen that Part I deals with all stages of the arbitrations which take place in India. In Part II, on the other hand, there are no provisions regulating the conduct of arbitration nor the challenge to the award. Section 45 only empowers the judicial authority to refer the parties to arbitration outside India in pending civil action. Sections 46 to 49 regulate the recognition and enforcement of the award. Sections 44, 50 to 52 are structurally necessary.

128. Thus, it is clear that the regulation of conduct of arbitration and challenge to an award would have to be done by the courts of the country in which the arbitration is being conducted. Such a court is then the supervisory court possessed of the power to annul the award. This is in keeping with the scheme of the international instruments, such as the Geneva Convention and the New York Convention as well as the UNCITRAL Model Law. It also recognizes the territorial principle which gives effect to the sovereign right of a country to regulate, through its national courts, an adjudicatory duty being performed in its own country. By way of a comparative example, we may reiterate the observations made by the Court of Appeal, England in C Vs. D (supra) wherein it is observed that “it follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award.” In the aforesaid case, the Court of Appeal had approved the observations made in A Vs. B,41 wherein it is observed that:-

“…an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy……as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration.”

129. Having accepted the principle of territoriality, it is evident that the intention of the parliament was to segregate Part I and Part II. Therefore, any of the provisions contained in Part I can not be made applicable to Foreign Awards, as defined under Sections 44 and 53, i.e., the New York Convention and the Geneva Awards. This would be a distortion of the scheme of the Act. It is, therefore, not possible to accept the submission of Mr. Subramanium that provisions contained in Part II are supplementary to the provision contained in Part I. The Parliament has clearly segregated the two parts.

Section 45

130. We are unable to accept the submission that the
use of expression “notwithstanding anything contained in Part
I, or in the Code of Civil Procedure, 1908”, in Section 45 of the
Arbitration Act, 1996 necessarily indicates that provisions of
Part I would apply to foreign seated arbitration proceedings.
Section 45 falls within Part II which deals with enforcement
proceedings in India and does not deal with the challenge to
the validity of the arbitral awards rendered outside India.
Section 45 empowers a judicial authority to refer the parties to
arbitration, on the request made by a party, when seized of an
action in a matter in respect of which the parties have made
an agreement referred to in Section 44. It appears that
inclusion of the term “judicial authority” in Sections 5 and 8 of
the Arbitration Act, 1996, has caused much confusion in the
minds of the learned counsel for the appellants. In our opinion,
there is no justification for such confusion. Such use of the
term “judicial authority”, in Section 5 and Section 8 of the
Arbitration Act, 1996, is not a recognition by the Parliament
that Part I will apply to international commercial arbitrations
held outside India. The term “judicial authority” is a legacy
from the 1940 Act. The corresponding provision of Section 34
of the 1940 Act, which covered purely domestic arbitrations,
between two or more Indian parties, within the territory of
India, also refers to “judicial authority”. It is nobody’s
contention that by using the term “judicial authority”, the
Parliament had intended the 1940 Act to apply outside India.
In our opinion, the term “judicial authority” has been retained
especially in view of policy of least intervention, which can not
be limited only to the Courts. This is clearly in recognition of
the phenomenon that the judicial control of commercial
disputes is no longer in the exclusive jurisdiction of Courts.
There are many statutory bodies, tribunals which would have
adjudicatory jurisdiction in very complex commercial matters.
Section 5 would be equally applicable to such bodies. The use
of the term “judicial authority” in no manner has any reference
to arbitrations not held in India It is in conformity with
Clause (V) of the objects and reasons for the Arbitration Act,
1996, which has been given statutory recognition in Section 5.

131. The learned senior counsel had also pointed out that since Section 19 of the Arbitration Act, 1996 clearly provides that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908, there was no need for the nonobstante clause. But the reason, in our view, is discernable from Section 3 of the 1961 Act, which also contains a nonobstante clause with reference to the Arbitration Act, 1940. Section 45 in the Arbitration Act, 1996 is a repetition of the non-obstante clause in Section 3 in the 1961 Act. It is not unusual for a consolidating act to retain the expressions used in the previous Acts, which have been consolidated into a form of Principal Act. A consolidating Act is described in Halsbury’s law of England, Fourth Edition Reissue, Para 1225 as under:-

“A consolidation Act is a form of principal Act which presents the whole body of the statute law on a subject in complete form, repealing the former Acts. When drafting a consolidation Act the practice is not to change the existing wording, except so far as may be required for purposes of verbal ‘carpentry’, and not to incorporate court rulings. This is known as ‘straight’ consolidation, the product being a form of declaratory enactment. The difference between a consolidating Act and a codifying Act is that the latter, unlike the former, incorporates common law rules not previously codified. It can be determined from the long title whether or not an Act is a consolidation Act.” (emphasis supplied)

132. Similarly, a certain amount of ‘carpentry’ has been done in the Arbitration Act, 1996 whilst consolidating the earlier three Acts. Therefore, in section 45 of the Arbitration Act, 1996, the reference to 1940 Act has been replaced by reference to Part I, which now covers the purely domestic arbitrations, earlier covered by the 1940 and the new additions, i.e. the international commercial arbitrations, which take place in India. It appears that the Parliament in order to avoid any confusion has used the expression “notwithstanding anything contained in Part I” out of abundant caution, i.e., “ex abundanti cautela”. A three judge bench of this Court in R.S. Raghnath Vs. State of Karnataka & Anr.42 , considering the nature of the non-obstante clause observed that:-

“11…….

But the non-obstante clause need not necessarily and always be co-extensive with the operative part

so as to have the effect of cutting down the clear terms of an enactment and if the words of the enactment are clear and are capable of a clear interpretation on a plain and grammatical construction of the words the non-obstante clause cannot cut down the construction and restrict the scope of its operation. In such cases the nonobstante clause has to be read as clarifying the whole position and must be understood to have been incorporated in the enactment by the legislature by way of abundant caution and not by way of limiting the ambit and scope of the Special Rules.”

133. We are, therefore, of the opinion that existence of the non-obstante clause does not alter the scope and ambit of the field of applicability of Part I to include international commercial arbitrations, which take place out of India. We may further point out that a similar provision existed in the English Arbitration Act, 1950 and the English Arbitration Act, 1975. Section 4(1) of the English Arbitration Act, 1950 was similar to Section 34 of the Arbitration Act, 1940 in India. Section 1(2) of the English Arbitration Act, 1975 was similar to Section 3 of the Foreign Awards Act, 1961.

134. In view of the above, it would not be possible to accept the submission of the learned counsel for the appellants that the aforesaid non-obstante clause in Section 45 would indicate that provisions of Part I would also be applicable to arbitrations that take place outside India.

Does Section 48(1)(e) recognize the jurisdiction of Indian Courts to annul a foreign award, falling within Part II?

135. Much emphasis has been laid by the learned counsel for the appellants on the expression that enforcement of a foreign award may be refused when the award “has been set aside or suspended …..” “under the law of which” that award was made. The aforesaid words and expressions appear in Section 48, which is contained in Part II of the Arbitration Act, 1996 under the title “enforcement of certain foreign awards”. The Courts in India under Chapter I of Part II of the aforesaid Act have limited powers to refuse the enforcement of foreign awards given under the New York Convention. It would be apposite to notice the provisions of Section 48 at this stage, which are as under:-

“48.Conditions for enforcement of foreign awards.-

(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—-

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration.

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place ; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the court finds that-

(a) the subject -matter of the difference is not capable of settlement by arbitration under the law of India; or

(b) the enforcement of the award would be contrary to the public policy of India.

Explanation.—-Without prejudice to the generality of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of subsection (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also , on the application of the party claiming enforcement of the award, order the other party to give suitable security.”

136. The party which seeks to resist the enforcement of the award has to prove one or more of the grounds set out in Section 48(1) and (2) and/or the explanation of sub-section (2). In these proceedings, we are, however, concerned only with the interpretation of the terms “country where the award was made” and “under the law of which the award was made”. The provisions correspond to Article V(1)(e) of the New York Convention, which reads as under:-

“1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
………….

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(a) the subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) the recognition or enforcement of the award would be contrary to the public policy of that country.

137. The aforesaid Article of the New York Convention has been bodily lifted and incorporated in the Arbitration Act, 1996 as Section 48.

138. Thus, the intention of the legislature is clear that the Court may refuse to enforce the foreign award on satisfactory proof of any of the grounds mentioned in Section 48(1), by the party resisting the enforcement of the award. The provision sets out the defences open to the party to resist enforcement of a foreign award. The words “suspended or set aside”, in Clause (e) of Section 48(1) can not be interpreted to mean that, by necessary implication, the foreign award sought to be enforced in India can also be challenged on merits in Indian Courts. The provision merely recognizes that courts of the two nations which are competent to annul or suspend an award. It does not ipso facto confer jurisdiction on such Courts for annulment of an award made outside the country. Such jurisdiction has to be specifically provided, in the relevant national legislation of the country in which the Court concerned is located. So far as India is concerned, the Arbitration Act, 1996 does not confer any such jurisdiction on the Indian Courts to annul an international commercial award made outside India. Such provision exists in Section 34, which is placed in Part I. Therefore, the applicability of that provision is limited to the awards made in India. If the arguments of the learned counsel for the appellants are accepted, it would entail incorporating the provision contained in Section 34 of the Arbitration Act, 1996, which is placed in Part I of the Arbitration Act, 1996 into Part II of the said Act. This is not permissible as the intention of the Parliament was clearly to confine the powers of the Indian Courts to set aside an award relating to international commercial arbitrations, which take place in India.

139. As noticed above, this section corresponds to Article V(1)(e) of the New York Convention. A reading of the Article V(1)(e) [Section 48(1)(e)] makes it clear that only the courts in the country “in which the award was made” and the courts “under the law of which the award was made” (hereinafter referred to as the “first alternative” and the “second alternative” respectively) would be competent to suspend/annul the New York Convention awards. It is clarified that Section 48(1)(e) is only one of the defences on the basis of which recognition and enforcement of the award may be refused. It has no relevance to the determination of the issue as to whether the national law of a country confers upon its courts, the jurisdiction to annul the awards made outside the country. Therefore, the word “suspended/set aside” in Section 48(1)(e) cannot be interpreted to mean that, by necessary implication, the foreign awards sought to be enforced in India can also be challenged on merits in Indian Courts. The provision only means that Indian Courts would recognize as a valid defence in the enforcement proceedings relating to a foreign award, if the Court is satisfied that the award has been set aside in one of the two countries, i.e., the “first alternative” or the “second alternative”.

140. Mr. Sundaram had submitted that the two countries identified in “alternative one” and “alternative two”, would have concurrent jurisdiction to annul the award. In our opinion, interpreting the provision in the manner suggested by Mr. Sundaram would lead to very serious practical problems. 141. In this context, it would be relevant to take note of some of the observations made by Hans Smit, Professor of Law, Columbia University in the Article titled “Annulment and Enforcement of International Arbitral Awards”. The author points out the reasons for incorporating the second forum for annulment. He states that –

“While, therefore, there appears to be no justification, based in reason and principle, for providing for an exception to the general rule of recognition and enforcement for the forum at the place of arbitration, the drafters of the Convention compounded their error by providing for two fora for an annulment action. For Article V(1)(e) envisages that an annulment action may be brought “in the country in which….the award was made” or “in the country….under the law of which the award was made.” The disjunctive used in the Convention’s text naturally raises the question of whether the second forum is available only if the first is not or whether the party seeking annulment has the option of selecting either or even to try its luck in both. The legislative history of the Convention sheds illuminating light on the issue.

The text of Article V(1)(e) originally proposed acknowledge only the bringing of an annulment action in the place in which the award was made. One of the delegates at the Conference devoted to the drafting of the Convention raised the question of what would happen if the forum at the place of arbitration would refuse to entertain an annulment action. The obviously correct answer to that question would have been that, in that case, no annulment action could be brought and that the happy consequence would be that only denial of recognition and enforcement on grounds specified in the Convention would be possible. Instead, the drafters of the Convention provided for an alternative forum in the country the arbitration laws of which governed the arbitration. That choice was both most fateful and most regrettable.”

142. These observations militate against the concurrent jurisdiction submission of Mr.Sundaram. The observations made by the learned author, as noticed above, make it clear that the “second alternative” is an exception to the general rule. It was only introduced to make it possible for the award to be challenged in the court of the “second alternative”, if the court of the “first alternative” had no power to annul the award, under its national legislation. In our opinion, the disjunction would also tend to show that the “second alternative” would be available only if the first is not. Accepting the submission made by Mr.Sundaram, would lead to unnecessary confusion. There can be only one Court with jurisdiction to set aside the award. There is a public policy consideration apparent, favouring the interpretation that, only one Court would have jurisdiction to set aside the arbitral award. This public policy aspect was considered by the Court of Appeal in England in the case of C Vs. D (supra). The observation of the Court of Appeal in Paragraph 16 of the judgment has already been reproduced earlier in this judgment.

143. It was pointed out by the Court of Appeal that accepting more than one jurisdiction for judicial remedies in respect of an award would be a recipe for litigation and confusion. “Similarly, in the case of a single complaint about an award, it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award”. 144. The creation of such a situation is apparent from the judgment of this Court in Venture Global Engineering (supra). In the aforesaid judgment, the award was made by the London Court of International Arbitration on 3 rd April, 2006. Respondent No.1, on 14th April, 2006, filed a petition to recognize and enforce the award before the United States District Court, Eastern District Court of Michigan, in the United States of America (for short the ‘US Court’). The appellant entered appearance to defend this proceeding before the US Court by filing a cross petition. In the said petition, it took objection to the enforcement of the award, which had directed transfer of shares. The objection was that the direction was in violation of Indian laws and regulations, specifically the Foreign Exchange Management Act (in short the ‘FEMA’) and its notifications. Two weeks later on 28th April, 2006, the appellant filed a suit in the City Civil Court, Secunderabad seeking declaration to set aside the award and permanent injunction on the transfer of shares. On 15th June, 2006, the District Court passed an ad interim ex parte order of injunction, inter alia, restraining respondent No.1 for seeking or effecting the transfer of shares either under the terms of the award or otherwise. Respondent No.1 filed an appeal challenging the said order before the High Court of Andhra Pradesh. The High Court admitted the appeal and directed interim suspension of the order of the District Judge, but made it clear that “respondent No.1 would not affect the transfer of shares till further orders”.

145. On 13th July, 2006, in response to the summons, respondent No.1 appeared in the court and filed a petition under Order VII, Rule 11 for rejection of the plaint. The trial court by its order dated 28th December, 2006, allowed the said application and rejected the plaint of the appellant. On 27th February, 2007, the High Court dismissed the appeal holding that the award cannot be challenged even if it is against public policy and in contravention of statutory provisions. The judgment of the High Court was challenged in appeal before this Court. The appeal was allowed. It was held as follows:

“31. On close scrutiny of the materials and the dictum laid down in the three-Judge Bench decision in Bhatia International we agree with the contention of Mr. K.K. Venugopal and hold that paras 32 and 35 of Bhatia International make it clear that the provisions of Part I of the Act would apply to all arbitrations including international commercial arbitrations and to all proceedings relating thereto. We further hold that where such arbitration is held in India, the provisions of Part I would compulsorily apply and parties are free to deviate to the extent permitted by the provisions of Part I. It is also clear that even in the case of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. We are also of the view that such an interpretation does not lead to any conflict between any of the provisions of the Act and there is no lacuna as such. The matter, therefore, is concluded by the three-Judge Bench decision in Bhatia

International

33. The very fact that the judgment holds that it would be open to the parties to exclude the application of the provisions of Part I by express or implied agreement, would mean that otherwise the whole of Part I would apply. In any event, to apply Section 34 to foreign international awards would not be inconsistent with Section 48 of the Act, or any other provision of Part II as a situation may arise, where, even in respect of properties situate in India and where an award would be invalid if opposed to the public policy of India, merely because the judgment-debtor resides abroad, the award can be enforced against properties in India through personal compliance of the judgment-debtor and by holding out the threat of contempt as is being sought to be done in the present case. In such an event, the judgment-debtor cannot be deprived of his right under Section 34 to invoke the public policy of India, to set aside the award. As observed earlier, the public policy of India includes — (a) the fundamental policy of India; or (b) the interests of India; or (c) justice or morality; or (d) in addition, if it is patently illegal. This extended definition of public policy can be bypassed by taking the award to a foreign country for enforcement.

37. In view of the legal position derived from Bhatia International we are unable to accept Mr. Nariman’s argument. It is relevant to point out that in this proceeding, we are not deciding the merits of the claim of both parties, particularly, the stand taken in the suit filed by the appellant herein for setting aside the award. It is for the court concerned to decide the issue on merits and we are not expressing anything on the same. The present conclusion is only with regard to the main issue whether the aggrieved party is entitled to challenge the foreign award which was passed outside India in terms of Sections 9/34 of the Act. Inasmuch as the three-Judge Bench decision is an answer to the main issue raised, we are unable to accept the contra view taken in various decisions relied on by Mr. Nariman. Though in Bhatia International1 the issue relates to filing a petition under Section 9 of the Act for interim orders the ultimate conclusion that Part I would apply even for foreign awards is an answer to the main issue raised in this case.

42. The learned Senior Counsel for the appellant submitted that the first respondent Satyam Computer Services Ltd. could not have pursued the enforcement proceedings in the District Court in Michigan, USA in the teeth of the injunction granted by the courts in India which also, on the basis of the comity of courts, should have been respected by the District Courts in Michigan, USA. Elaborating the same, he further submitted that the injunction of the trial court restraining the respondents from seeking or effecting the transfer of shares either under the terms of the award or otherwise was in force between 15-6-2006 and 27-6-2006. The injunction of the High Court in the following terms – “the appellant (i.e. Respondent 1) shall not effect the transfer of shares of the respondents pending further orders” was in effect from 27-6-2006 till 28- 12-2006. The judgment of the US District Court was on 13-7-2006 and 31-7-2006 when the award was directed to be enforced as sought by Respondent 1, notwithstanding the injunction to the effect that the appellant (Respondent 1 herein) “shall not effect the transfer of shares of the respondents pending further orders”. The first respondent pursued his enforcement suit in Michigan District Courts to have a decree passed directing — “… VGE shall deliver to Satyam or its designee, share certificates in a form suitable for immediate transfer to Satyam evidencing all of the appellant’s ownership interest in Satyam Venture Engineering Services (SVES), the party’s joint venture company”. Further, “VGE (the appellant herein) shall do all that may otherwise be necessary to effect the transfer of its ownership interest in SVES to Satyam (or its designee)”. It is pointed out that obtaining this order by pursuing the case in the US District Courts, in the teeth of the prohibition contained in the order of the High Court, would not only be a contempt of the High Court but would render all proceedings before the US courts a brutum fulmen, and liable to be ignored. Though Mr. R.F. Nariman has pointed out that the High Court only restrained the respondent from effecting transfer of the shares pending further orders by the City Civil Court, Secunderabad, after the orders of the trial court as well as limited order of the High Court, the first respondent ought not to have proceeded with the issue before the District Court, Michigan without getting the interim orders/directions vacated.

47. In terms of the decision in Bhatia International we hold that Part I of the Act is applicable to the award in question even though it is a foreign award. We have not expressed anything on the merits of claim of both the parties. It is further made clear that if it is found that the court in which the appellant has filed a petition challenging the award is not competent and having jurisdiction, the same shall be transferred to the appropriate court. Since from the inception of ordering notice in the special leave petition both parties were directed to maintain status quo with regard to transfer of shares in issue, the same shall be maintained till the disposal of the suit. Considering the nature of dispute which relates to an arbitration award, we request the court concerned to dispose of the suit on merits one way or the other within a period of six months from the date of receipt of copy of this judgment. Civil appeal is allowed to this extent. No costs.”

146. With these observations, the matter was remanded back to the trial court to dispose of the suit on merits. The submissions made by Mr. K.K.Venugopal, as noticed in paragraph 42, epitomize the kind of chaos which would be created by two court systems, in two different countries, exercising concurrent jurisdiction over the same dispute. There would be a clear risk of conflicting decisions. This would add to the problems relating to the enforcement of such decisions. Such a situation would undermine the policy underlying the New York Convention or the UNCITRAL Model Law. Therefore, we are of the opinion that appropriate manner to interpret the aforesaid provision is that “alternative two” will become available only if “alternative one” is not available.

147. The expression “under the law” has also generated a great deal of controversy as to whether it applies to “the law governing the substantive contract” or “the law governing the arbitration agreement” or limited only to the procedural laws of the country in which the award is made.

148. The consistent view of the international commentators seems to be that the “second alternative” refers to the procedural law of the arbitration rather than “law governing the arbitration agreement” or “underlying contract”. This is even otherwise evident from the phrase “under the law, that award was made”, which refers to the process of making the award (i.e., the arbitration proceeding), rather than to the formation or validity of the arbitration agreement.

149. Gary B. Born in his treatise titled International Commercial Arbitration takes the view in Chapter 21 that the correct interpretation of Article V(1)(e)’s “second alternative” is that it relates exclusively to procedural law of the arbitration which produced an award and not to other possible laws (such as the substantive law governing the parties underlying dispute or governing the parties’ arbitration agreement). He further notices that courts have generally been extremely reluctant to conclude that the parties have agreed upon a procedural law other than that of the arbitral seat. Consequently, according to Born, although it is theoretically possible for an award to be subject to annulment outside the arbitral seat, by virtue of Article V(1)(e)’s “second alternative”, in reality this is a highly unusual “once-in-a-blue-moon” occurrence. He further notices that a number of national courts have considered the meaning of Article V(1)(e)’s “second alternative”. Many, but not all, courts have concluded that the alternative refers to “the procedural law of arbitration”, rather than the “substantive law applicable to the merits of the parties’ dispute or to the parties’ arbitration agreement.” In our opinion, the views expressed by the learned author are in consonance with the scheme and the spirit in which the New York Convention was formulated. The underlying motivation of the New York Convention was to reduce the hurdles and produce a uniform, simple and speedy system for enforcement of foreign arbitral award. Therefore, it seems to be accepted by the commentators and the courts in different jurisdictions that the language of Article V(1)(e) referring to the “second alternative” is to the country applying the procedural law of arbitration if different from the arbitral forum and not the substantive law governing the underlying contract between the parties.

Case Law –

150. At this stage, it would be appropriate to consider the manner in which the expression “under the law” has been interpreted judicially in different jurisdictions.

151. The aforesaid expression came up for consideration in the case of Karaha Bodas Co. LLC Vs. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,43 the Federal Court in the U.S. considered the provisions contained in Article V(1)(e) and observed as follows:-

“Article V(1)(e) of the Convention provides that a court of secondary jurisdiction may refuse to enforce an arbitral award if it “has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.” Courts have held that the language, “the competent authority of the country …… under the law of which, that award was made” refers exclusively to procedural and not substantive law, and more precisely, to the regimen or scheme of arbitral procedural law under which the arbitration was conducted, and not the substantive law….. applied in the case.”…….

“Under the New York Convention, an agreement specifying the place of the arbitration creates a presumption that the procedural law of that place applies to the arbitration. Authorities on international arbitration describe an agreement providing that one country will be the site of the arbitration but the proceedings will be held under the arbitration law of another country by terms such as “exceptional”; “almost unknown”; a “purely academic invention”; “almost never use in practice”; a possibility “more theoretical than real”; and a “once–in-a-blue-moon set of circumstances.” Commentators note that such an agreement would be complex, inconvenient, and inconsistent with the selection of a neutral forum as the arbitral forum……..”

152. Similarly, in the case of Karaha Bodas Co. LLC (Cayman Islands) Vs. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara – Pertamina (Indonesia),44 the aforesaid legal proposition is reiterated. In this case, again the Hong Kong Court considered Article V(1)(e) of the Convention at length. This was a case where the substantive law applicable to the contract was Indonesian law and the country of the arbitration i.e. seat of arbitration as per the arbitration agreement was Switzerland. It was contended relying on the second leg of Article V(1)(e) that the law under which the award had been made was Indonesian law and therefore Pertamina’s challenge in Indonesia was valid. This was rejected. It was held that Article V(1)(e) referred to the procedural or curial law and that because the seat of the arbitration was in Switzerland, the lex arbitri or the curial or procedural law applicable to the arbitration was Swiss law. Therefore, only the Swiss Courts had jurisdiction to set aside the award.

153. In International Electric Corporation Vs. Bridas Sociedad Anonima Petroleva, Industrial Y Commercial,45 the New York Court held that the italicised words referred to the procedural law governing the arbitration, and not to the substantive law governing the agreement between the parties, since the situs of arbitration is Mexico, the governing procedural law that of Mexico, only Mexico Courts have jurisdiction under the Convention to vacate the award.

154. Redfern and Hunter (supra) at paragraph 11.96 state that the court which is competent to sustain or set aside an award is the court of the country in “alternative one” or “alternative two”. The authors, however, further state that “this Court will almost invariably be the national court at the seat of the arbitration”. They point out that the prospect of an award being set aside under the procedural law of a State other than that at the seat of arbitration is unlikely. They point out that an ingenious (but unsuccessful) attempt was made to persuade the US District Court to set aside an award made in Mexico, on the basis that the reference to the law under which that award was made was a reference to the law governing the dispute and not to the procedural law (Paragraph 11.96). The Learned Authors had made a reference to the case International Standard Electric Corp. (US) Vs. Bridas Sociedad Anonima Petrolera (Argentina).46 The Court rejected the aforesaid argument with the following observations:-

“Decisions of foreign courts under the Convention uniformly support the view that the clause in question means procedural and not substantive (that is, in most cases, contract law)….
Accordingly, we hold that the contested language in Article V(1)(e) of the Convention……refers exclusively to procedural and not substantive law, and more precisely to the regimen or scheme of arbitral procedural law under which the arbitration was conducted.”

155. The Court went on to hold that since the quorum of arbitration was Mexico, only the Mexican court had jurisdiction to set aside the award.

156. The correct position under the New York Convention is described very clearly and concisely by Gary B. Born in his book International Commercial Arbitration (Kluwer Law International, Vol. I), Chapter X Page 1260 as follows :
“This provision is vitally important for the international arbitral process, because it significantly restricts the extent of national court review of international arbitral awards in annulment actions, limiting such review only to the courts of the arbitral seat (that is, the state where the award is made or the state whose procedural law is selected by the parties to govern the arbitration). In so doing, the Convention ensures that courts outside the arbitral seat may not purport to annul an international award, thereby materially limiting the role of such courts in supervising or overseeing the procedures utilized in international arbitrations. At the same time, the New York Convention also allows the courts of the arbitral seat wide powers with regard to the annulment of arbitral awards made locally. The Convention generally permits the courts of the arbitral seat to annul an arbitral award on any grounds available under local law, while limiting the grounds for non-recognition of Convention awards in courts outside the arbitral seat to those specified in Article V of the Convention. This has the effect of permitting the courts of the arbitral seat substantially greater scope than courts of other states to affect the conduct or outcome of an international arbitration through the vehicle of annulment actions. Together with the other provisions of Articles II and V, this allocation of annulment authority confirms the (continued) special importance of the arbitral seat in the international arbitral process under the New York Convention.”
( emphasis supplied)

157. In our opinion, the aforesaid is the correct way to interpret the expressions “country where the award was made” and the “country under the law of which the award was made”. We are unable to accept the submission of Mr. Sundaram that the provision confers concurrent jurisdiction in both the fora. “Second alternative” is available only on the failure of the “first alternative”. The expression under the law is the reference only to the procedural law/curial law of the country in which the award was made and under the law of which the award was made. It has no reference to the substantive law of the contract between the parties. In such view of the matter, we have no hesitation in rejecting the submission of the learned counsel for the appellants.

158. At this stage, we may notice that in spite of the aforesaid international understanding of the second limb of Article V(1) (e), this Court has proceeded on a number of occasions to annul an award on the basis that parties had chosen Indian Law to govern the substance of their dispute. The aforesaid view has been expressed in Bhatia International (supra) and Venture Global Engineering (supra). In our opinion, accepting such an interpretation would be to ignore the spirit underlying the New York Convention which embodies a consensus evolved to encourage consensual resolution of complicated, intricate and in many cases very sensitive International Commercial Disputes. Therefore, the interpretation which hinders such a process ought not to be accepted. This also seems to be the view of the national courts in different jurisdictions across the world. For the reasons stated above, we are also unable to agree with the conclusions recorded by this Court in Venture Global Engineering (supra) that the foreign award could be annulled on the exclusive grounds that the Indian law governed the substance of the dispute. Such an opinion is not borne out by the huge body of judicial precedents in different jurisdictions of the world. Interim measures etc. by the Indian Courts where the seat of arbitration is outside India.

159. We have earlier noticed the submissions made by the learned counsel for the parties wherein they had emphasised that in case the applicability of Part I is limited to arbitration which take place in India, no application for interim relief would be available under Section 9 of the Arbitration Act, 1996, in an arbitration seated outside India. It was further emphasised that in such circumstances, the parties would be left remediless. Dr. Singhvi, in order to get out of such a situation, had submitted that remedy under Section 9 would still be available. According to Dr. Singhvi, Section 9 is a stand alone provision which cannot be effected by the limit contained in Section 2(2). He submits that the provisions contained in Section 9 do not impede the arbitral process. Its only purpose is to provide an efficacious, preservatory, interim, conservatory, emergent relief necessary for protecting the subject matter of arbitration, pending the conclusions of the proceedings. He also emphasised that interim orders of foreign courts are not, ipso facto or ipso jure, enforceable in India and, absent Section 9, a party will be remediless in several real life situations. He, therefore, urged that this Court could give a purposive interpretation of Section 9 to ensure that the Courts in India have the jurisdiction to take necessary measures for preservation of assets and/or to prevent dissipation of assets. Dr. Singhvi submitted that the decision in Bhatia International (supra) is correct, in so far as it relates to the grant of interim injunction under Section 9 of the Arbitration Act, 1996. He did not say before us that the courts in India would have any power to annul the award under Section 34 of the Arbitration Act, 1996, in matters where arbitrations have taken place at abroad. But at the same time, he canvassed that the provisions contained in Section 9 cannot be equated with the provisions contained in Section 34. The remedy under Section 9 is interim and subservient to the main arbitration proceedings, whereas remedy under Section 34 would interfere with the final award. Further more, annulment of the award under Section 34 would have extra-territorial operation whereas Section 9 being entirely asset focused, would be intrinsically territory focused and intra-territorial in its operation. He submitted that the ratio in Bhatia International on the core issue, i.e., grant of interim measures under Section 9, is correct. Although, he was not much concerned about the other issues, of annulment or enforcement of the award, he has reiterated the submissions made by the other learned counsel, on Sections 2(2), 2(1)(f) and 2(5).

160. We are unable to accept the submissions made by the learned counsel. It would be wholly undesirable for this Court to declare by process of interpretation that Section 9 is a provision which falls neither in Part I or Part II. We also do not agree that Section 9 is a sui generis provision.

161. Schematically, Section 9 is placed in Part I of the Arbitration Act, 1996. Therefore, it can not be granted a special status. We have already held earlier that Part I of the Arbitration Act, 1996 does not apply to arbitrations held outside India. We may also notice that Part II of the Arbitration Act, 1996, on the other hand, does not contain a provision similar to Section 9. Thus, on a logical and schematic construction of the Arbitration Act, 1996, the Indian Courts do not have the power to grant interim measures when the seat of arbitration is outside India. A bare perusal of Section 9 would clearly show that it relates to interim measures before or during arbitral proceedings or at any time after the making of the arbitral award, but before it is enforced in accordance with Section 36. Section 36 necessarily refers to enforcement of domestic awards only. Therefore, the arbitral proceedings prior to the award contemplated under Section 36 can only relate to arbitrations which take place in India. We, therefore, do not agree with the observations made in Bhatia International (supra) in paragraph 28 that “The words in accordance with Section 36 can only go with the words after the making of the arbitral award.” It is clear that the words “in accordance with Section 36” can have no reference to an application made “before” or “during the arbitral proceedings”. The text of Section 9 does not support such an interpretation. The relevant part of the provisions is as under: “9. Interim measures, etc. by Court – A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a court………..”

162. A bare look at the aforesaid provision would indicate that there is no break up of the sentence in between the two comas at the beginning and end of the sentence. Therefore, the sentence cannot be broken into three parts as it is done in paragraph 28 of Bhatia International (supra). The arbitral proceedings mentioned in the aforesaid provision cannot relate to arbitration which takes place outside India.

163. Therefore, we have no hesitation in declaring that the provision contained in Section 9 is limited in its application to arbitrations which take place in India. Extending the applicability of Section 9 to arbitrations which take place outside India would be to do violence to the policy of the territoriality declared in Section 2(2) of the Arbitration Act, 1996.

164. It was next submitted that if the applicability of Part I is limited to arbitrations which take place in India, it would leave many parties remediless in a number of practical situations.

165. In this connection, Mr. Sorabjee has relied upon the judgment of the English High Court in Reliance Industries Limited (supra). In the aforesaid case, the contracts were governed by the Indian law as their proper law. The disputes were to be determined by the arbitration in London. The procedural law applicable was English Law. The distinction between the proper law of the JOA’s and the procedural law was known to the parties. At the arbitration hearing, the parties agreed that the principles of construction of contracts in Indian Law were the same as in English Law. The parties further agreed that the English Law principles on the construction of contracts were those set out by Lord Hoffmann in Investors Compensation Scheme Ltd. vs. West Bromwich Building Society, 47 as explained and expanded by Lord Hoffmann in Bank of Credit & Commerce International SA vs. Ali & Ors. 48 In their awards, the three arbitrators stated (at paragraph 73) that they would apply those principles to construe the contracts under consideration in making their Partial Arbitral Awards. The question raised at the threshold was whether the applicantReliance can apply for permission to appeal to the Commercial Court in England and Wales “on a question of law arising out of an award made in the proceedings” under Section 69 (1) of the Arbitration Act, 1996 (English). So the “threshold” issue was whether any point of construction of the contracts, assuming that would be a question of law at all, is a “question of law of England and Wales” within Section 82(1) of the Arbitration Act, 1996. It was accepted by the applicant that unless the question of law concerned “the law of England and Wales, then leave to appeal cannot be granted.” The issue before the Court was as to whether the questions of construction of JOA’s are questions of Indian Law because the contracts are governed by Indian Law. The parties did not, as a matter of fact, vary the proper law of the contracts for the purposes of arbitration hearing in London. As the parties agreed that the Indian Law applied to the contracts, the arbitrators had to apply Indian Law when construing the contracts. Although the parties agreed that Indian Law and English Law principles of construction were the same, ultimately the arbitrators were applying Indian Law rather than English Law to construe the contract. The Court rejected the submission of the applicant that the arbitrators had applied the English Law. The Court observed that:-

“27. I am unable to accept the submissions of Mr.Akenhead. The parties agreed that the contracts were to be governed by Indian Law as their proper law. The parties also agreed that disputes should be determined by arbitration in London. The parties were carful to ensure that English Law would be the procedural law applicable to arbitration proceedings that arose as a result of disputes arising out of the JOAs. The distinction between the proper law of the JOAs and the procedural law was also well in the minds of the arbitrators as they drew particular attention to it in paragraph 26 of their Partial Awards. The effect of those contractual provisions is, as the arbitrators also recognized, that all procedural matters were to be governed by English law as laid down in Part 1 of the 1996 Act. The parties must be taken to have appreciated that fact also.

28. The consequence is that if and when disputes under the contracts were referred to arbitration, as a matter of the procedural law of the arbitrations (English Law), the tribunal had to decide those disputes in accordance with the proper law of the contracts as chosen by the parties – unless the parties agreed to vary the contracts’ terms, which they did not. Therefore, if as in this case, the arbitrators had to decide issues of construction of the JOAs, then they were bound to do so using principles of construction established under the proper law of the contracts, i.e. Indian law.

29. As it happens the parties agreed that the principles of construction under the proper law of the contract equated with those principles under English law, as declared by the House of Lords in two recent cases. What the arbitrators did was to take those principles of construction and apply them as principles of Indian law in order to construe the contracts according to Indian law. The arbitrators had to do that, as a matter of the procedural law of the arbitration. That is because under the English law of arbitration procedure, the arbitrators were bound to construe the contracts and determine the disputes between the parties according to the proper law of the contracts concerned.

30. Therefore, I think that it is wrong to say that the arbitrators “applied English Law” when construing the contracts. They applied Indian law, which happened to be the same as English law on this topic.”

166. On the basis of that, it was concluded that no question of law of England and Wales arises out of the two partial awards of the arbitrators. It was accordingly held that the English Court does not have any power to grant leave to appeal under Section 69 of the Arbitration Act, 1996.

167. In our opinion, the aforesaid judgment does not lead to the conclusion that the parties were left without any remedy. Rather the remedy was pursued in England to its logical conclusion. Merely, because the remedy in such circumstances may be more onerous from the view point of one party is not the same as a party being left without a remedy. Similar would be the position in cases where parties seek interim relief with regard to the protection of the assets. Once the parties have chosen voluntarily that the seat of the arbitration shall be outside India, they are impliedly also understood to have chosen the necessary incidents and consequences of such choice. We, therefore, do not find any substance in the submissions made by the learned counsel for the appellants, that if applicability of Part I is limited to arbitrations which take place in India, it would leave many parties remediless.

168. If that be so, it is a matter to be redressed by the legislature. We may also usefully refer here to the observations made in Nalinakhya Bysack (supra), Duport Steels Ltd. (supra) and Magor & St. Mellons, RDC Vs. Newport Corporation (supra), in which the attempt made by Lord Denning to construe legislation contrary to Parliament’s intention just to avoid hardship was disapproved by the House of Lords. It was observed by Lord Simonds as follows:-

“The second part of the passage that I have cited from the judgment of the learned Lord Justice is no doubt the logical sequel of the first. The court, having discovered the intention of Parliament and of Ministers too, must proceed to fill in the gaps. What the legislature has not written, the court must write. This proposition, which restates in a new form the view expressed by the Lord Justice in the earlier case of Seaford Court Estates Ld. V. Asher (to which the Lord Justice himself refers), cannot be supported. It appears to me to be a naked usurpation of the legislative function under the thin disguise of interpretation and it is the less justifiable when it is guesswork with what material the legislature would, if it had discovered the gap, have filled it in. If a gap is disclosed, the remedy lies in an amending Act.”
[emphasis supplied]

169. The aforesaid words in italics have been quoted with approval by a Constitution Bench of this Court in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh & Others.49

170. In view of the aforesaid, we are unable to agree with the submission made by Dr. Singhvi that provision contained in Section 9 can be made applicable even to arbitrations which take place outside India by giving the same a purposive interpretation. In our opinion, giving such an interpretation would be destructive of the territorial principles upon which the UNCITRAL Model Laws are premised, which have been adopted by the Arbitration Act, 1996.

171. We are further of the opinion that the approach adopted by this Court in Bhatia International to remove the perceived hardship is not permissible under law. A perusal of paragraph 15 would show that in interpreting the provisions of the Arbitration Act, 1996, the court applied the following tests:

“Notwithstanding the conventional principle that the duty of Judges is to expound and not to legislate, the courts have taken the view that the judicial art interpretation and appraisal is imbued with creativity and realism and since interpretation always implied a degree of discretion and choice, the courts would adopt, particularly in areas such as, constitutional adjudication dealing with social and defuse (sic) rights. Courts are therefore, held as “finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing” (see Corocraft Ltd. v. Pan American Airways, All ER at p. 1071 D, WLR at p. 732, State of Haryana v. Sampuran Singh, AIR at p. 1957). If a language used is capable of bearing more than one construction, in selecting the true meaning, regard must be had to the consequences, resulting from adopting the alternative constructions. A construction that results in hardship, serious inconvenience, injustice, absurdity or anomaly or which leads to inconsistency or uncertainty and friction in the system which the statute purports to regulate has to be rejected and preference should be given to that construction which avoids such results.”

172. From the above, it is evident that the provisions of the Arbitration Act, 1996 were interpreted keeping in mind the consequences in limiting the applicability of Part I to arbitrations which take place in India. The Court also acted as “finishers”, “refiners” and “polishers” of the Arbitration Act, 1996 assuming that the Arbitration Act, 1996 required varied degrees of further “processing”. In our opinion, as demonstrated whilst discussing the various provisions of the Arbitration Act, 1996 in earlier part of judgment, the intention of the Parliament is available within the text and the context of the provisions. As observed by Lord Simonds in Magor & St.Mellons Vs. Newport Corporation (supra), if the gap or lacuna is disclosed, it would be for the Parliament to rectify the same. Such a task cannot be undertaken by the Court.

173. It was also submitted that Non-Convention Awards would not be covered either by Part I or Part II. This would amount to holding that the legislature has left a lacuna in the Arbitration Act, 1996. This would mean that there is no law in India governing such arbitrations.

174. We are of the opinion that merely because the Arbitration Act, 1996 does not cover the non convention awards would not create a lacuna in the Arbitration Act, 1996. If there was no lacuna during the period in which the same law was contained in three different instruments, i.e. the Arbitration Act, 1940 read with 1961 Act, and the Arbitration (Protocol and Convention) Act, 1937, it cannot be construed as a lacuna when the same law is consolidated into one legislation, i.e. the Arbitration Act, 1996.

175. It must further be emphasised that the definition of “foreign awards” in Sections 44 and 53 of the Arbitration Act, 1996 intentionally limits it to awards made in pursuance of an agreement to which the New York Convention, 1958 or the Geneva Protocol, 1923 applies. It is obvious, therefore, that no remedy was provided for the enforcement of the ‘non convention awards’ under the 1961 Act. Therefore, the non convention award cannot be incorporated into the Arbitration Act, 1996 by process of interpretation. The task of removing any perceived lacuna or curing any defect in the Arbitration Act, 1996 is with the Parliament. The submission of the learned counsel is, therefore, rejected. The intention of the legislature is primarily to be discovered from the language used, which means that the attention should be paid to what has been said and also to what has not been said. [See: Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. vs. Custodian of Vested Forests, [AIR 1990 SCC 1747 at page 1752]. Here the clear intention of the legislature is not to include the Nonconvention Awards within the Arbitration Act, 1996. Is An Inter-Parte Suit For Interim Relief Maintainable –

176. It appears to us that as a matter of law, an inter-parte suit simply for interim relief pending arbitrations, even if it be limited for the purpose of restraining dissipation of assets would not be maintainable. There would be number of hurdles which the plaintiff would have to cross, which may well prove to be insurmountable.

177. Civil Courts in India, by virtue of Section 9 of the Code of Civil Procedure, 1908 (for short the ‘CPC’), have the jurisdiction to try all suits of a civil nature, excepting suits which are either expressly or impliedly barred. Fundamental to the maintainability of a civil suit is the existence of a cause of action in favour of the plaintiff. This is evident from the various provisions contained in the CPC. However, it would be appropriate to notice that Order VII Rule 1 gives the list of the particulars which have to be mandatorily included in the plaint. Order VII Rule 1(e) mandates the plaintiff to state the facts constituting the cause of action and when it arose. Order VII Rule 11(a) provides the plaint shall be rejected where it does not disclose a cause of action. A cause of action is the bundle of facts which are required to be proved for obtaining relief prayed for in the suit. The suit of the plaintiff has to be framed in accordance with Order II. Order II Rule 1 provides that every suit shall as far as practicable be framed so as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them. The aforesaid rule is required to be read along with Rule 2 which provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any court. The aforesaid provisions read together would lead to the firm conclusion that the existence of cause of action is a sine qua non for the maintainability of a civil suit.

178. The provisions with regard to the temporary injunction and interlocutory orders are contained in Order 39 and Order 40. In order to claim an injunction the existence of a pending suit is a pre requisite. It is in this background that one has to examine as to whether an inter-parte suit for interim relief during the pendency of arbitration proceedings outside India would be maintainable.

179. In our opinion, pendency of the arbitration proceedings outside India would not provide a cause of action for a suit where the main prayer is for injunction. Mr.Sundaram has rightly pointed out that the entire suit would be based on the pendency of arbitration proceedings in a foreign country. Therefore, it would not be open to a party to file a suit touching on the merits of the arbitration. If such a suit was to be filed, it would in all probabilities be stayed in view of Sections 8 and 45 of the Arbitration Act, 1996. It must also be noticed that such a suit, if at all, can only be framed as a suit to “inter alia restrain the defendant from parting with property.” Now, if the right to such property could possibly arise, only if the future arbitration award could possibly be in favour of the plaintiff, no suit for a declaration could obviously be filed, based purely only on such a contingency. All that could then be filed would, therefore, be a bare suit for injunction restraining the other party from parting with property. The interlocutory relief would also be identical. In our view, such a suit would not be maintainable, because an interlocutory injunction can only be granted during the pendency of a civil suit claiming a relief which is likely to result in a final decision upon the subject in dispute. The suit would be maintainable only on the existence of a cause of action, which would entitle the plaintiff for the substantive relief claimed in the suit. The interim injunction itself must be a part of the substantive relief to which the plaintiff’s cause of action entitled him. In our opinion, most of the aforesaid ingredients are missing in a suit claiming injunction restraining a party from dealing with the assets during the pendency of arbitration proceedings outside India. Since the dispute is to be decided by the Arbitrator, no substantive relief concerning the merits of the arbitration could be claimed in the suit. The only relief that could be asked for would be to safeguard the property which the plaintiff may or may not be entitled to proceed against. In fact the plaintiff’s only claim would depend on the outcome of the arbitration proceeding in a foreign country over which the courts in India would have no jurisdiction. The cause of action would clearly be contingent/speculative. There would be no existing cause of action. The plaint itself would be liable to be rejected under Order VII Rule 11(a). In any event, as noticed above, no interim relief could be granted unless it is in aid of and ancillary to the main relief that may be available to a party on final determination of rights in a suit. This view will find support from a number of judgments of this Court.

180. In the State of Orissa vs. Madan Gopal Rungta,50 at page 35 this Court held:

“….An interim relief can be granted only in aid or, and as ancillary to, the main relief which may be available to the party on final determination of his rights in a suit or proceeding……”

181. Following the above Constitution Bench, this Court in Cotton Corporation Limited vs. United Industrial Bank51 held:

“10……But power to grant temporary injunction was conferred in aid or as auxiliary to the final relief that may be granted. If the final relief cannot be granted in terms as prayed for, temporary relief in the same terms can hardly if ever be granted. In State of Orissa v. Madan Gopal Rungta a Constitution Bench of this Court clearly spelt out the contours within which interim relief can be granted. The Court said that ‘an interim relief can be granted only in aid of, and as ancillary to, the main relief which may be available to the party on final determination of his rights in a suit or proceeding’. If this be the purpose to achieve which power to grant temporary relief is conferred, it is inconceivable that where the final relief cannot be granted in the terms sought for because the statute bars granting such a relief ipso facto the temporary relief of the same nature cannot be granted…..”

182. The legal position is reiterated in Ashok Kumar Lingala vs. State of Karnataka.52

183. In matters pertaining to arbitration, the suit would also be barred under Section 14(2) of the Specific Relief Act. Although the provision exists in Section 37 of the Specific Relief Act, 1963, for grant of temporary/perpetual injunction, but the existence of cause of action would be essential under this provision also. Similar would be the position under Section 38 of the Specific Relief Act.

184. Claim for a Mareva Injunction in somewhat similar circumstances came up for consideration in England before the House of Lords in Siskina (Cargo Owners) Vs. Distos Compania Navieria SA (supra). In this case, cargo owners had a claim against a Panamanian company. The dispute had no connection with England. The defendant’s only ship had sunk and there were insurance proceeds in England to which the defendant was entitled. The cargo owners sought leave to serve the writ on the defendant under what was then RSC Order 11, Rule 1(1)(i). Mocatta, J. gave leave and at the same time granted an injunction in the terms asked for in Paragraph 2 of the writ petition. Subsequently, Kerr, J. set aside the notice of the writ but maintained the injunction pending in appeal. On the cargo-owners appeal, the Court of Appeal by a majority reversed the judgment of Kerr, J. and restored the Mareva injunction as originally granted by Mocatta, J. The matter reached the House of Lords by way of an appeal against the majority judgment of the Court of Appeal. The House of Lords on appeal held that there was no jurisdiction to commence substantive proceedings in England. Therefore, the writ and all subsequent proceedings in the action had to be set aside. Consequently there could be no Mareva injunction. It was held that a Mareva injunction was merely an interlocutory injunction and such an injunction could only be granted as “. … ancillary and incidental to the pre-existing cause of action”.

185. Lord Diplock observed that “it is conceded that the cargo owners’ claim for damages for breach of contract does not of itself fall within any of the sub-rules of Order 11, Rule 1(1); nor does their claim for damages for tort.” It is further observed that “what is contended by the counsel for the cargo-owners is that if the action is nevertheless allowed to proceed, it will support a claim for Mareva injunction restraining the ship owners from disposing of their assets within the jurisdiction until judgment and payment of the damages awarded thereby; and that this of itself is sufficient to bring the case within subrule (i) which empowers the High Court to give leave for service of its process on persons outside the jurisdictions”. Interpreting Order 11 Rule 1(i), it was held that the word used in sub-rule (i) are terms of legal art. The sub-rule speaks of “the action” in which a particular kind of relief, “an injunction” is sought. This pre-supposes the existence of a cause of action on which to found “the action”. A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the Court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the Court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction.

186. As noticed earlier, the position is no different in India. Therefore it appears that under the law, as it stands today, an inter-parte suit simply for interim relief pending arbitration outside India would not be maintainable.

187. It appears after the aforesaid observations were made in Siskina (Cargo Owners) (supra), necessary amendments were made in the English Law viz. Section 37(1) of the Supreme Court Act, 1981. The provision was specifically made for grant of Mareva injunction by Section 25 of the Civil Jurisdiction and Judgments Act, 1982.

189. The after effects of Siskina (Cargo Owners) (supra) were duly noticed by Steven Gee QC MA (Oxon) in his book titled Mareva Injunctions and Anton Piller Relief, Fourth Edition, as under:-

(i) The English Court would not assert a substantive jurisdiction over a defendant just because he had assets within the jurisdiction. The contrary proposition would have had the unsatisfactory consequence as observed by Lord Diplock in Siskina that the Court would find itself asserting jurisdiction over a foreigner to decide the merits of substantive proceedings which had nothing to do with England.

(ii) There was no jurisdiction to grant Mareva relief unless and until the plaintiff had an accrued right of action.

(iii) There was no jurisdiction to preserve assets within the jurisdiction of the Court which would be needed to satisfy a claim against the defendant if it eventually succeeded regardless of where the merits of the substantive claim were to be decided. According to the other, the position in relation to the free-standing interlocutory injunction relief has been eroded by a succession of developments.

190. Thereafter, in a subsequent judgment in Channel Tunnel Group Ltd. & Anr. Vs. Balfour Beatty Construction Ltd. & Ors.,53 Lord Mustill summed up the principle for grant of interim relief as follows:-

“For present purposes it is sufficient to say that the doctrine of Siskina, put at its highest, is that the right to an interlocutory injunction cannot exist in isolation, but is always incidental to and dependent on the enforcement of a substantive right, which usually although not invariably takes the shape of a cause of action. If the underlying right itself is not subject to the jurisdiction of the English Court, then that Court should never exercise its power under Section 37(1) by way of interim relief.” 191. However, on facts in the Channel Tunnel case (supra), it was found that “if this is a correct appreciation of the doctrine, it does not apply to the present case.”

192. From the above, it is apparent that the injunctive relief was granted in Channel Tunnel case in view of the statutory provisions contained in Section 37(1) of the Supreme Court Act, 1981. This is made further clear by the following observations:-

“We are concerned here with powers which the Court already possesses under Section 37 of the Act of 1981. The only question is whether the court ought permanently and unconditionally to renounce the possibility of exercising such powers in a case like the present. I am unable to see why the fact that Parliament is contemplating the specific grant of interim powers, not limited to interlocutory injunctions, in support of arbitrations but has not yet chosen to do so should shed any light on the powers of the court under existing law. It may be that if and when section 25 is made applicable to arbitrations, the court will have to be very cautious in the exercise of its general powers under section 37 so as not to conflict with any restraint which the legislature may have imposed on the exercise of the new and specialized powers.”

193. The decision in Channel Tunnel would not support the proposition that injunctive relief could be granted under Section 9 of the Arbitration Act, 1996, as no corresponding provision to Section 37(1) of the English Supreme Court Act, 1981 exists under the Indian legislation.

194. Mr. Sorabjee has also referred to the principle that no suit allows for grant of interim injunction simplicitor and that an interim injunction had to be granted only in aid of a final injunction/principle relief claimed in the suit. He made a reference to the Constitution Bench decision of this Court in State of Orissa Vs. Madan Gopal Rungta (supra). He also referred to the judgment of the House of Lords in Fourie Vs. Le Roux (supra). The House of Lords after referring to the decision in Siskina and Channel Tunnel observed as follows:-
“On the other hand, if the leave had been upheld, or if the defendant had submitted to the jurisdiction, it would still have been open to the defendant to argue that the grant of a Mareva injunction in aid of the foreign proceedings in Cyprus was impermissible, not on strict jurisdictional grounds but because such injunctions should not be granted otherwise than as ancillary to substantive proceedings in England.”
[emphasis supplied]

195. However, the House of Lords pointed out in Paragraph 31 of the judgment that the relief can now be granted under English Law by virtue of express provision contained in Section 25 of the Civil Jurisdiction and Judgment Act, 1982, as extended to the Civil Jurisdiction and Judgments Act (Interim Relief) Order, 1997. This order enables the High Court “to grant interim relief” in relation to “proceedings that have been or are about to be commenced in a foreign state”.

196. So far as the Indian Law is concerned, it is settled that the source “of a Court’s power to grant interim relief is traceable to Section 94 and in exceptional cases Section 151 CPC. CPC pre-supposes the existence of a substantive suit for final relief wherein the power to grant an interim relief may be exercised only till disposal thereof.

197. In this view of the matter, it is patent that there is no existing provision under the CPC or under the Arbitration Act, 1996 for a Court to grant interim measures in terms of Section 9, in arbitrations which take place outside India, even though the parties by agreement may have made the Arbitration Act, 1996 as the governing law of arbitration.

CONCLUSION :-

198. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to International Commercial Arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996.

199. With utmost respect, we are unable to agree with the conclusions recorded in the judgments of this Court in Bhatia International (supra) and Venture Global Engineering (supra). In our opinion, the provision contained in Section 2(2) of the Arbitration Act, 1996 is not in conflict with any of the provisions either in Part I or in Part II of the Arbitration Act, 1996. In a foreign seated international commercial arbitration, no application for interim relief would be maintainable under Section 9 or any other provision, as applicability of Part I of the Arbitration Act, 1996 is limited to all arbitrations which take place in India. Similarly, no suit for interim injunction simplicitor would be maintainable in India, on the basis of an international commercial arbitration with a seat outside India.

200. We conclude that Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the territory of India.

201. The judgment in Bhatia International (supra) was rendered by this Court on 13th March, 2002. Since then, the aforesaid judgment has been followed by all the High Courts as well as by this Court on numerous occasions. In fact, the judgment in Venture Global Engineering (supra) has been rendered on 10th January, 2008 in terms of the ratio of the decision in Bhatia International (supra). Thus, in order to do complete justice, we hereby order, that the law now declared by this Court shall apply prospectively, to all the arbitration agreements executed hereafter.

202. The reference is answered accordingly.

………………………………..CJI.
[S.H.KAPADIA]
…….…………………………..J.
[D.K.JAIN]
.………………………………….j
[SURINDER SINGH NIJJAR]
………………………………….J.
[RANJANA PRAKASH DESAI]
..………………………………..J.
[JAGDISH SINGH KHEHAR]
NEW DELHI;
SEPTEMBER 06, 2012.
– – 177

Footnote

1 (2002) 2 SCC 388
2 (2005) 8 SCC 618
3 1953 SCR 533
4 1951 (2) All ER 839
5 (1990) 3 SCC 682
6 (1980) 1 All ER 529
7 (1992) 3 SCC 551
8 2002 (1) Lloyd Law Reports 645
9 [2008]EWHC 426 (TCC)
10 [2009] EWHC 957 (Comm.).
11 (2004) 2 SCC 105
12 1979 AC 210
13 2007 (1) WLR 320; 2007 (1) All ER 1087
14 2007 (7) SCC 125 at 136
15 1952(1) SCR 28
16 1997 Suppl (1) SCC 680
17 (2005) (9) SCC 733
18 (2004) 4 SCC 697
19 (2011) 2 SCC 741
20 [2008 (4) SCC 190]
21 1987 (1) SCC 496
22 1989 (2) SCC 163
23 2011 (7) SCC 463
24 2008 (14) SCC 271
25 See P.V Kane History of Dharmasastra, Vol.III P.242
26 See Justice S.Varadachariar Hindu Judicial System P.98
27 1981 (4) SCC 634
28 LR (1891) AC 531 at Page 549
29 6 Moo PC 1 : 4 MIA 179
30 (1933) LR 60 IA 13; AIR (1933) PC 63
31 1988 (1) Lloyd’s Law Reports 116
32 1993 (3) Lloyd’s Law Reports 48
33 See Swiss Private International Law Act, 1987, Chapter 12 Article 176 (1)
34 1975 (1) SCC 76 Para 37 at P.103
35 1949 AC 530 at P 546
36 710 F.2d 928
37 [1970] 1 Lloyd’s Rep. 269; [1970] A.C.583
38 [1981] 2 Lloyd’s Rep. 446 at P. 453
39 [2007] EWCA Civ 1282 (CA)
40 [2012 WL 14764].
41 [2007] 1 Lloyds Report 237
42 (1992) 1 SCC 335
43 335 F.3d 357
44 Yearbook Comm. Arb’n Vol. XXVIII )2003)
45 745 F Supp 172, 178 (SDNY 1990)
46 (1992) VII Ybk Comm Arb 639
47 [1998] WLR 1896 at 913
48 [2001] 2 WLR 735 at 749
49 (1990) 3 SCC 682
50 AIR 1952 SC 12
51 (1983) 4 SCC 625
52 (2012) 1 SCC 321
53 (1993) AC 334

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IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (C) NO. 95 OF 2010
Society for Un-aided Private Schools of Rajasthan … Petitioner(s)
versus
U.O.I. & Anr. …Respondent(s)

with Writ Petition (C) Nos. 98/2010, 126/2010, 137/2010,
228/2010, 269/2010, 310/2010, 364/2010, 384/2010,
21/2011, 22/2011, 24/2011, 47/2011, 50/2011, 59/2011,
83/2011, 86/2011, 88/2011, 99/2011, 101/2011,
102/2011, 104/2011, 115/2011, 118/2011, 126/2011,
148/2011, 154/2011, 176/2011, 186/2011, 205/2011,
238/11 and 239/11.

J U D G M E N T

S. H. KAPADIA, CJI

1. We have had the benefit of carefully considering the erudite judgment delivered by our esteemed and learned Brother Radhakrishnan, J. Regretfully, we find ourselves in the unenviable position of having to disagree with the views expressed therein concerning the non- applicability of the Right of Children to Free and Compulsory Education Act, 2009 (for short “the 2009 Act”) to the unaided non-minority schools.

2. The judgment of Brother Radhakrishnan, J. fully sets out the various provisions of the 2009 Act as well as the issues which arise for determination, the core issue concerns the constitutional validity of the 2009 Act.

Introduction

3. To say that “a thing is constitutional is not to say that it is desirable” [see Dennis v. United States, (1950) 341 US 494].

4. A fundamental principle for the interpretation of a written Constitution has been spelt out in R. v. Burah [reported in (1878) 5 I.A. 178] which reads as under:

“The established Courts of Justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question; and the only way in which they can properly do so, is by looking to the terms of the Constitution by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited it is not for any Court to inquire further, or to enlarge constructively those conditions and restrictions”.

5. Education is a process which engages many different actors : the one who provides education (the teacher, the owner of an educational institution, the parents), the one who receives education (the child, the pupil) and the one who is legally responsible for the one who receives education (the parents, the legal guardians, society and the State). These actors influence the right to education. The 2009 Act makes the Right of Children to Free and Compulsory Education justiciable. The 2009 Act envisages that each child must have access to a neighbourhood school. The 2009 Act has been enacted keeping in mind the crucial role of Universal Elementary Education for strengthening the social fabric of democracy through provision of equal opportunities to all. The Directive Principles of State Policy enumerated in our Constitution lay down that the State shall provide free and compulsory education to all children upto the age of 14 years.

The said Act provides for right (entitlement) of children to free and compulsory admission, attendance and completion of elementary education in a neighbourhood school. The word “Free” in the long title to the 2009 Act stands for removal by the State of any financial barrier that prevents a child from completing 8 years of schooling. The word “Compulsory” in that title stands for compulsion on the State and the parental duty to send children to school. To protect and give effect to this right of the child to education as enshrined in Article 21 and Article 21A of the Constitution, the Parliament has enacted the 2009 Act.

6. The 2009 Act received the assent of the President on 26.8.2009.

It came into force w.e.f. 1.4.2010. The provisions of this Act are intended not only to guarantee right to free and compulsory education to children, but it also envisages imparting of quality education by providing required infrastructure and compliance of specified norms and standards in the schools. The Preamble states that the 2009 Act stands enacted inter alia to provide for free and compulsory education to all children of the age of 6 to 14 years. The said Act has been enacted to give effect to Article 21A of the Constitution.

Scope of the 2009 Act

7. Section 3(1) of the 2009 Act provides that every child of the age of 6 to 14 years shall have a right to free and compulsory education in a neighbourhood school till completion of elementary education. Section 3(2) inter alia provides that no child shall be liable to pay any kind of fee or charges or expenses which may prevent him or her from pursuing and completing the elementary education. An educational institution is charitable. Advancement of education is a recognised head of charity. Section 3(2) has been enacted with the object of removing financial barrier which prevents a child from accessing education. The other purpose of enacting Section 3(2) is to prevent educational institutions charging capitation fees resulting in creation of a financial barrier which prevents a child from accessing or exercising its right to education which is now provided for vide Article 21A. Thus, sub-Section (2) provides that no child shall be liable to pay any kind of fee or charges or expenses which may prevent him or her from pursuing or completing the elementary education.

Section 4 inter alia provides for special provision for children not admitted to or who have not completed elementary education. Section 5 deals with the situation where there is no provision for completion of elementary education, then, in such an event, a child shall have a right to seek transfer to any other school, excluding the school specified in sub-clauses (iii) and (iv) of clause (n) of Section 2, for completing his or her elementary education. Chapter III provides for duties of appropriate government, local authority and parents. Section 6 imposes an obligation on the appropriate government and local authority to establish a school within such areas or limits of neighbourhood, as may be prescribed, where it is not so established, within 3 years from the commencement of the 2009 Act. The emphasis is on providing “neighbourhood school” facility to the children at the Gram Panchayat level. Chapter IV of the 2009 Act deals with responsibilities of schools and teachers. Section 12 (1)(c) read with Section 2(n)(iii) and (iv) mandates that every recognised school imparting elementary education, even if it is an unaided school, not receiving any kind of aid or grant to meet its expenses from the appropriate government or the local authority, is obliged to admit in Class I, to the extent of at least 25% of the strength of that class, children belonging to weaker section and disadvantaged group in the neighbourhood and provide free and compulsory elementary education till its completion. As per the proviso, if the School is imparting pre- school education, the same regime would apply. By virtue of Section 12(2) the unaided school which has not received any land, building, equipment or other facilities, either free of cost or at concessional rate, would be entitled for reimbursement of the expenditure incurred by it to the extent of per child expenditure incurred by the State, or the actual amount charged from the child, whichever is less, in such manner as may be prescribed. Such reimbursement shall not exceed per child expenditure incurred by a school established, owned or controlled by the appropriate government or a local authority. Section 13 envisages that no school or person shall, while admitting a child, collect any capitation fee and subject the child or his or her parents to any screening procedure. Section 15 mandates that a child shall be admitted in a school at the commencement of the academic year or within the prescribed extended period. Sections 16 and 17 provide for prohibition of holding back and expulsion and of physical punishment or mental harassment to a child. Section 18 postulates that after the commencement of the 2009 Act no school, other than the excepted category, can be established or can function without obtaining a certificate of recognition from the appropriate authority. The appropriate authority shall be obliged to issue the certificate of recognition within the prescribed period specifying the conditions there for, if the school fulfills the norms and standards specified under Sections 19 and 25 read with the Schedule to the 2009 Act. In the event of contravention of the conditions of recognition, the prescribed authority can withdraw recognition after giving an opportunity of being heard to such school. The order of withdrawal of recognition should provide a direction to transfer the children studying in the de-recognised school to be admitted to the specified neighbourhood school. Upon withdrawal of recognition, the de- recognised school cannot continue to function, failing which, is liable to pay fine as per Section 19(5). If any person establishes or runs a school without obtaining certificate of recognition, or continues to run a school after withdrawal of the recognition, shall be liable to pay fine as specified in Section 19(5). The norms and standards for establishing or for grant of recognition to a school are specified in Section 19 read with the Schedule to the 2009 Act. All schools which are established before the commencement of the 2009 Act in terms of Section 19(2) are expected to comply with specified norms and standards within 3 years from the date of such commencement. Failure to do so would entail in de-recognition of such school. Section 22 postulates that the School Management Committee constituted under Section 21, shall prepare a School Development Plan in the prescribed manner.

Section 22(2) provides that the School Development Plan so prepared shall be the basis for the grants to be made by the appropriate government or local authority, as the case may be. That plan, however, cannot have any impact on consideration of application for grant of recognition for establishing an unaided school. To ensure that teachers should contribute in imparting quality education in the school itself, Section 28 imposes total prohibition on them to engage in private tuition or private teaching activities. Chapter VI inter alia provides for protection of rights of children. Section 32 thus provides that any person having grievance relating to the right of child under the 2009 Act, may make a written complaint to the local authority having jurisdiction, who in turn is expected to decide it within three months after affording a reasonable opportunity of being heard to the parties concerned. In addition, in terms of Section 31, the Commissions constituted under the provisions of the Commissions for Protection of Child Rights Act, 2005 can monitor the child’s right to education, so as to safeguard the right of the child upon receiving any complaint in that behalf relating to free and compulsory education.

8. By virtue of the 2009 Act, all schools established prior to the commencement of the said Act are thus obliged to fulfill the norms and standards specified inter alia in Sections 25, 26 and the Schedule of that Act. [See Section 19(2)]. The State is also expected to first weed out those schools which are non-performing, or under-performing or non-compliance schools and upon closure of such schools, the students and the teaching and non-teaching staff thereof should be transferred to the neighbourhood school. The provision is meant not only to strengthen the latter school by adequate number of students but to consolidate and to impart quality education due to the addition of teaching staff. Needless to observe, that if there is inadequate response to the government funded school, it is but appropriate that either the divisions thereof or the school itself be closed and the students and staff of such schools be transferred to a neighbourhood school by resorting to Section 18(3) of the 2009 Act. Only after taking such decisions could the School Development Plan represent the correct position regarding the need of government aided schools in every locality across the State. Besides, it will ensure proper and meaningful utilization of public funds. In absence of such exercise, the end result would be that on account of existing non-performing or under-performing or non-compliance schools, the School Development Plan would not reckon that locality for establishment of another school. In our view, even the State Government(s), by resorting to the provision of the 2009 Act, must take opportunity to re-organise its financial outflow at the micro level by weeding out the non-performing or under- performing or non-compliance schools receiving grant-in- aid, so as to ensure that only such government funded schools, who fulfill the norms and standards, are allowed to continue, to achieve the object of the 2009 Act of not only providing free and compulsory education to the children in the neighbourhood school but also to provide quality education. Thus, there is a power in the 2009 Act coupled with the duty of the State to ensure that only such government funded schools, who fulfill the norms and standards, are allowed to continue with the object of providing free and compulsory education to the children in the neighbourhood school.

Validity and applicability of the 2009 Act qua unaided non-minority schools

9. To begin with, we need to understand the scope of Article 21A.

It provides that the State shall provide free and compulsory education to all children of the age of 6 to 14 years in such manner as the State may, by law, determine. Thus, under the said Article, the obligation is on the State to provide free and compulsory education to all children of specified age. However, under the said Article, the manner in which the said obligation will be discharged by the State has been left to the State to determine by law. Thus, the State may decide to provide free and compulsory education to all children of the specified age through its own schools or through government aided schools or through unaided private schools. The question is whether such a law transgresses any constitutional limitation? In this connection, the first and foremost principle we have to keep in mind is that what is enjoined by the directive principles (in this case Articles 41, 45 and 46) must be upheld as a “reasonable restriction” under Articles 19(2) to 19(6). As far back as 1952, in State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga [(1952) SCR 889], this Court has illustrated how a directive principle may guide the Court in determining crucial questions on which the validity of an important enactment may be hinged. Thus, when the courts are required to decide whether the impugned law infringes a fundamental right, the courts need to ask the question whether the impugned law infringes a fundamental right within the limits justified by the directive principles or whether it goes beyond them. For example, the scope of the right of equality of opportunity in matters relating to employment (Article 16) to any office in the State appears more fully defined when read with the obligation of the State to promote with special care the economic and other interests of the weaker sections (Article 46). Similarly, our understanding of the right “to practice any profession or occupation” [Article 19(1)(g)] is clarified when we read along with that right the obligation of the State to see that the health of the workers and the tender age of the children are not abused (Article 39).

Thus, we need to interpret the fundamental rights in the light of the directive principles. The above principles are very relevant in this case because the very content of Article 21A comes from reading of Articles 41, 45 and 46 and, more particularly, from Article 45 (as it then stood before the Constitution (Eighty sixth Amendment) Act, 2002).

It has been urged before us that Article 45, as it then stood, imposed obligation on the State to provide for free and compulsory education for all children until they complete the age of 14 years and that the said obligation cannot be shifted or passed on to an unaided school, as defined in Section 2(n)(iv) of the 2009 Act. To answer the said contention, one needs to appreciate the scope of Articles 21, 21A, 19(1)(g) and Articles 41, 45 and 46 of the Constitution. At the outset, it may be stated, that fundamental rights have two aspects ““ they act as fetter on plenary legislative powers and, secondly, they provide conditions for fuller development of our people including their individual dignity. Right to live in Article 21 covers access to education. But unaffordability defeats that access. It defeats the State’s endeavour to provide free and compulsory education for all children of the specified age. To provide for free and compulsory education in Article 45 is not the same thing as to provide free and compulsory education. The word “for” in Article 45 is a preposition.

The word “education” was read into Article 21 by the judgments of this Court. However, Article 21 merely declared “education” to fall within the contours of right to live. To provide for right to access education, Article 21A was enacted to give effect to Article 45 of the Constitution. Under Article 21A, right is given to the State to provide by law “free and compulsory education”. Article 21A contemplates making of a law by the State. Thus, Article 21A contemplates right to education flowing from the law to be made which is the 2009 Act, which is child centric and not institution centric.

Thus, as stated, Article 21A provides that the State shall provide free and compulsory education to all children of the specified age in such manner as the State may, by law, determine. The manner in which this obligation will be discharged by the State has been left to the State to determine by law. The 2009 Act is thus enacted in terms of Article 21A. It has been enacted primarily to remove all barriers (including financial barriers) which impede access to education. One more aspect needs to be highlighted. It is not in dispute that education is a recognised head of “charity” [see T.M.A. Pai Foundation v. State of Karnataka (2002) 8 SCC 481]. Therefore, even according to T.M.A. Pai Foundation, if an educational institution goes beyond “charity” into commercialization, it would not be entitled to protection of Article 19(1)(g). This is where the paradox comes in. If education is an activity which is charitable, could the unaided non-minority educational institution contend that the intake of 25% children belonging to weaker section and disadvantaged group only in class I as provided for in Section 12(1)(c) would constitute violation of Article 19(1)(g)? Would such a provision not be saved by the principle of reasonable restriction imposed in the interest of the general public in Article 19(6) of the Constitution?

10. Coming to the principle of reasonableness, it may be stated, that though subject-wise, Article 21A deals with access to education as against right to establish and administer educational institution in Article 19(1)(g), it is now not open to anyone to contend that the law relating to right to access education within Article 21A does not have to meet the requirement of Article 14 or Article 19 for its reasonableness. [See Khudiram Das v. State of West Bengal reported in [1974] INSC 251; (1975) 2 SCR 832] After the judgment of this Court in Maneka Gandhi v.

Union of India [(1978) 1 SCC 248], the principle of reasonableness is applicable to Article 14 of the Constitution. As held by this Court in Glanrock Estate Private Limited v. State of Tamil Nadu [(2010) 10 SCC 96], Article 21 (right to life) remains the core of the Constitution around which Article 14, Article 19 and others revolve. In other words, all other fundamental rights in Part III would be dependent upon right to life in Article 21 as interpreted by this Court to include right to live with dignity, right to education, etc. At the end of the day, whether one adopts the pith and substance test or the nature and character of the legislation test or the effect test, one finds that all these tests have evolved as rules of interpretation only as a matter of reasonableness. They help us to correlate Article 21 with Article 14, Article 19 and, so on. Applying the above principle of reasonableness, though the right to access education falls as a subject matter under Article 21A and though to implement the said Article, Parliament has enacted the 2009 Act, one has to judge the validity of the said Act in the light of the principle of reasonableness in Article 19(6), particularly, when in T.M.A. Pai Foundation and in P.A. Inamdar v. State of Maharashtra [(2005) 6 SCC 537], it has been held that right to establish and administer an educational institution falls under Article 19(1)(g) of the Constitution. Thus, the question which arises for determination is ““ whether Section 12(1)(c) of the 2009 Act is a reasonable restriction on the non-minority’s right to establish and administer an unaided educational institution under Article 19(6)? Article 21 says that “no person shall be deprived of his life…except according to the procedure established by law” whereas Article 19(1)(g) under the chapter “right to freedom” says that all citizens have the right to practice any profession or to carry on any occupation, trade or business which freedom is not absolute but which could be subjected to social control under Article 19(6) in the interest of general public. By judicial decisions, right to education has been read into right to life in Article 21. A child who is denied right to access education is not only deprived of his right to live with dignity, he is also deprived of his right to freedom of speech and expression enshrined in Article 19(1)(a). The 2009 Act seeks to remove all those barriers including financial and psychological barriers which a child belonging to the weaker section and disadvantaged group has to face while seeking admission. It is true that, as held in T.M.A. Pai Foundation as well as P.A. Inamdar, the right to establish and administer an educational institution is a fundamental right, as long as the activity remains charitable under Article 19(1)(g), however, in the said two decisions the correlation between Articles 21 and 21A, on the one hand, and Article 19(1)(g), on the other, was not under consideration. Further, the content of Article 21A flows from Article 45 (as it then stood). The 2009 Act has been enacted to give effect to Article 21A. For the above reasons, since the Article 19(1)(g) right is not an absolute right as Article 30(1), the 2009 Act cannot be termed as unreasonable. To put an obligation on the unaided non- minority school to admit 25% children in class I under Section 12(1)(c) cannot be termed as an unreasonable restriction. Such a law cannot be said to transgress any constitutional limitation. The object of the 2009 Act is to remove the barriers faced by a child who seeks admission to class I and not to restrict the freedom under Article 19(1)(g). The next question that arises for determination is ““ whether Section 12(1)(c) of the 2009 Act impedes the right of the non-minority to establish and administer an unaided educational institution? At the outset, it may be noted that Article 19(6) is a saving and enabling provision in the Constitution as it empowers the Parliament to make a law imposing reasonable restriction on the Article 19(1)(g) right to establish and administer an educational institution while Article 21A empowers the Parliament to enact a law as to the manner in which the State will discharge its obligation to provide for free and compulsory education. If the Parliament enacts the law, pursuant to Article 21A, enabling the State to access the network (including infrastructure) of schools including unaided non-minority schools would such a law be said to be unconstitutional, not saved under Article 19(6)? Answer is in the negative. Firstly, it must be noted that the expansive provisions of the 2009 Act are intended not only to guarantee the right to free and compulsory education to children, but to set up an intrinsic regime of providing right to education to all children by providing the required infrastructure and compliance of norms and standards.

Secondly, unlike other fundamental rights, the right to education places a burden not only on the State, but also on the parent/ guardian of every child [Article 51A(k)]. The Constitution directs both burdens to achieve one end: the compulsory education of children free from the barriers of cost, parental obstruction or State inaction. Thus, Articles 21A and 51A(k) balance the relative burdens on the parents and the State. Thus, the right to education envisages a reciprocal agreement between the State and the parents and it places an affirmative burden on all stakeholders in our civil society. Thirdly, right to establish an educational institution has now been recognized as a fundamental right within the meaning of Article 19(1)(g). This view is enforced by the opinion of this Court in T.M.A. Pai Foundation and P.A. Inamdar that all citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26 but that right is subject to the provisions of Articles 19(6) and 26(a).

The constitutional obligation of the State to provide for free and compulsory education to the specified category of children is co- extensive with the fundamental right guaranteed under Article 19(1)(g) to establish an educational institution. Lastly, the fundamental right to establish an educational institution cannot be confused with the right to ask for recognition or affiliation. The exercise of a fundamental right to establish and administer an educational institution can be controlled in a number of ways. Indeed, matters relating to the right to grant of recognition and/ or affiliation are covered within the realm of statutory right, which, however, will have to satisfy the test of reasonable restrictions [see Article 19(6)].

Thus, from the scheme of Article 21A and the 2009 Act, it is clear that the primary obligation is of the State to provide for free and compulsory education to children between the age of 6 to 14 years and, particularly, to children who are likely to be prevented from pursuing and completing the elementary education due to inability to afford fees or charges. Correspondingly, every citizen has a right to establish and administer educational institution under Article 19(1)(g) so long as the activity remains charitable. Such an activity undertaken by the private institutions supplements the primary obligation of the State.

Thus, the State can regulate by law the activities of the private institutions by imposing reasonable restrictions under Article 19(6).

The 2009 Act not only encompasses the aspects of right of children to free and compulsory education but to carry out the provisions of the 2009 Act, it also deals with the matters pertaining to establishment of school (s) as also grant of recognition (see section 18). Thus, after the commencement of the 2009 Act, the private management intending to establish the school has to make an application to the appropriate authority and till the certificate is granted by that authority, it cannot establish or run the school. The matters relevant for the grant of recognition are also provided for in Sections 19, 25 read with the Schedule to the Act. Thus, after the commencement of the 2009 Act, by virtue of Section 12(1)(c) read with Section 2(n)(iv), the State, while granting recognition to the private unaided non-minority school, may specify permissible percentage of the seats to be earmarked for children who may not be in a position to pay their fees or charges. In T.M.A. Pai Foundation, this Court vide para 53 has observed that the State while prescribing qualifications for admission in a private unaided institution may provide for condition of giving admission to small percentage of students belonging to weaker sections of the society by giving them freeships, if not granted by the government.

Applying the said law, such a condition in Section 12(1)(c) imposed while granting recognition to the private unaided non-minority school cannot be termed as unreasonable. Such a condition would come within the principle of reasonableness in Article 19(6). Indeed, by virtue of Section 12(2) read with Section 2(n)(iv), private unaided school would be entitled to be reimbursed with the expenditure incurred by it in providing free and compulsory education to children belonging to the above category to the extent of per child expenditure incurred by the State in a school specified in Section 2(n)(i) or the actual amount charged from the child, whichever is less. Such a restriction is in the interest of the general public. It is also a reasonable restriction. Such measures address two aspects, viz., upholding the fundamental right of the private management to establish an unaided educational institution of their choice and, at the same time, securing the interests of the children in the locality, in particular, those who may not be able to pursue education due to inability to pay fees or charges of the private unaided schools. We also do not see any merit in the contention that Section 12(1)(c) violates Article 14. As stated, Section 12(1)(c) inter alia provides for admission to class I, to the extent of 25% of the strength of the class, of the children belonging to weaker section and disadvantaged group in the neighbourhood and provide free and compulsory elementary education to them till its completion. The emphasis is on “free and compulsory education”.

Earmarking of seats for children belonging to a specified category who face financial barrier in the matter of accessing education satisfies the test of classification in Article 14. Further, Section 12(1)(c) provides for level playing field in the matter of right to education to children who are prevented from accessing education because they do not have the means or their parents do not have the means to pay for their fees. As stated above, education is an activity in which we have several participants. There are number of stakeholders including those who want to establish and administer educational institutions as these supplement the primary obligation of the State to provide for free and compulsory education to the specified category of children. Hence, Section 12(1)(c) also satisfies the test of reasonableness, apart from the test of classification in Article 14.

11. The last question which we have to answer under this head is ““ whether Section 12(1)(c) runs counter to the judgments of this Court in T.M.A. Pai Foundation and P.A. Inamdar or principles laid down therein? According to the petitioners, T.M.A. Pai Foundation defines various rights and has held vide para 50 that right to establish and administer broadly comprises the following:- (i) right to admit students (ii) right to set up a reasonable fee structure etc. (the rest are not important for discussion under this Head). That, T.M.A. Pai Foundation lays down the essence and structure of rights in Article 19(1)(g) insofar as they relate to educational institutions in compliance with (a) the Charity Principle (b) the Autonomy Principle (c) the Voluntariness Principle (d) Anti-nationalisation (e) Co-optation Principle. In support, reliance is placed by the petitioners on number of paras from the above two judgments. At the outset, we may reiterate that Article 21A of the Constitution provides that the State shall provide free and compulsory education to all children of the specified age in such manner as the State may, by law, determine. Thus, the primary obligation to provide free and compulsory education to all children of the specified age is on the State. However, the manner in which this obligation will be discharged by the State has been left to the State to determine by law. The State may do so through its own schools or through aided schools or through private schools, so long as the law made in this regard does not transgress any other constitutional limitation. This is because Article 21A vests the power in the State to decide the manner in which it will provide free and compulsory education to the specified category of children. As stated, the 2009 Act has been enacted pursuant to Article 21A. In this case, we are concerned with the interplay of Article 21, Article 21A, on the one hand, and the right to establish and administer educational institution under Article 19(1)(g) read with Article 19(6). That was not the issue in T.M.A. Pai Foundation nor in P.A. Inamdar. In this case, we are concerned with the validity of Section 12(1)(c) of the 2009 Act. Hence, we are concerned with the validity of the law enacted pursuant to Article 21A placing restrictions on the right to establish and administer educational institutions (including schools) and not the validity of the Scheme evolved in Unni Krishnan, J.P. v. State of Andhra Pradesh [(1993) 1 SCC 645]. The above judgments in T.M.A. Pai Foundation and P.A. Inamdar were not concerned with interpretation of Article 21A and the 2009 Act. It is true that the above two judgments have held that all citizens have a right to establish and administer educational institutions under Article 19(1)(g), however, the question as to whether the provisions of the 2009 Act constituted a restriction on that right and if so whether that restriction was a reasonable restriction under Article 19(6) was not in issue. Moreover, the controversy in T.M.A. Pai Foundation arose in the light of the scheme framed in Unni Krishnan’s case and the judgment in P.A. Inamdar was almost a sequel to the directions in Islamic Academy of Education v.

State of Karnataka [(2003) 6 SCC 697] in which the entire focus was Institution centric and not child centric and that too in the context of higher education and professional education where the level of merit and excellence have to be given a different weightage than the one we have to give in the case of Universal Elementary Education for strengthening social fabric of democracy through provision of equal opportunities to all and for children of weaker section and disadvantaged group who seek admission not to higher education or professional courses but to Class I. In this connection, the relevant paras from T.M.A. Pai Foundation make the position clear. They are paras 37, 39, 40, 42, 45, 48, 49 and 50 (read together), 51, 53, 56, 58 – 61, 62, 67, 68, 70 etc., similarly, paras 26, 35, 104, 146 of P.A.

Inamdar. We quote the relevant para in support of what we have stated above:

T.M.A. Pai Foundation Para 48 read with para 50

48. Private education is one of the most dynamic and fastest- growing segments of post-secondary education at the turn of the twenty-first century. A combination of unprecedented demand for access to higher education and the inability or unwillingness of the Government to provide the necessary support has brought private higher education to the forefront. Private institutions, with a long history in many countries, are expanding in scope and number, and are becoming increasingly important in parts of the world that relied almost entirely on the public sector.

50. The right to establish and administer broadly comprises the following rights:

(a) to admit students;

(b) to set up a reasonable fee structure;

(c) to constitute a governing body;

(d) to appoint staff (teaching and non-teaching); and (e) to take action if there is dereliction of duty on the part of any employees.

58. For admission into any professional institution, merit must play an important role. While it may not be normally possible to judge the merit of the applicant who seeks admission into a school, while seeking admission to a professional institution and to become a competent professional, it is necessary that meritorious candidates are not unfairly treated or put at a disadvantage by preferences shown to less meritorious but more influential applicants. Excellence in professional education would require that greater emphasis be laid on the merit of a student seeking admission. Appropriate regulations for this purpose may be made keeping in view the other observations made in this judgment in the context of admissions to unaided institutions.

59. Merit is usually determined, for admission to professional and higher education colleges, by either the marks that the student obtains at the qualifying examination or school- leaving certificate stage followed by the interview, or by a common entrance test conducted by the institution, or in the case of professional colleges, by government agencies.

60. Education is taught at different levels, from primary to professional. It is, therefore, obvious that government regulations for all levels or types of educational institutions cannot be identical; so also, the extent of control or regulation could be greater vis-a-vis aided institutions.

61. In the case of unaided private schools, maximum autonomy has to be with the management with regard to administration, including the right of appointment, disciplinary powers, admission of students and the fees to be charged. At the school level, it is not possible to grant admissions on the basis of merit. It is no secret that the examination results at all levels of unaided private schools, notwithstanding the stringent regulations of the governmental authorities, are far superior to the results of the government-maintained schools. There is no compulsion on students to attend private schools. The rush for admission is occasioned by the standards maintained in such schools, and recognition of the fact that State-run schools do not provide the same standards of education. The State says that it has no funds to establish institutions at the same level of excellence as private schools. But by curtailing the income of such private schools, it disables those schools from affording the best facilities because of a lack of funds. If this lowering of standards from excellence to a level of mediocrity is to be avoided, the State has to provide the difference which, therefore, brings us back in a vicious circle to the original problem viz. the lack of State funds. The solution would appear to lie in the States not using their scanty resources to prop up institutions that are able to otherwise maintain themselves out of the fees charged, but in improving the facilities and infrastructure of State-run schools and in subsidizing the fees payable by the students there. It is in the interest of the general public that more good quality schools are established;

autonomy and non-regulation of the school administration in the right of appointment, admission of the students and the fee to be charged will ensure that more such institutions are established. The fear that if a private school is allowed to charge fees commensurate with the fees affordable, the degrees would be “purchasable” is an unfounded one since the standards of education can be and are controllable through the regulations relating to recognition, affiliation and common final examinations.

P.A. Inamdar

26. These matters have been directed to be placed for hearing before a Bench of seven Judges under orders of the Chief Justice of India pursuant to the order dated 15-7-2004 in P.A. Inamdar v. State of Maharashtra and order dated 29-7-2004 in Pushpagiri Medical Society v. State of Kerala. The aggrieved persons before us are again classifiable in one class, that is, unaided minority and non-minority institutions imparting professional education. The issues arising for decision before us are only three:

(i) the fixation of “quota” of admissions/students in respect of unaided professional institutions;

(ii) the holding of examinations for admissions to such colleges, that is, who will hold the entrance tests; and (iii) the fee structure.

104. Article 30(1) speaks of “educational institutions” generally and so does Article 29(2). These articles do not draw any distinction between an educational institution dispensing theological education or professional or non-professional education. However, the terrain of thought as has developed through successive judicial pronouncements culminating in Pai Foundation is that looking at the concept of education, in the backdrop of the constitutional provisions, professional educational institutions constitute a class by themselves as distinguished from educational institutions imparting non- professional education. It is not necessary for us to go deep into this aspect of the issue posed before us inasmuch as Pai Foundation has clarified that merit and excellence assume special significance in the context of professional studies.

Though merit and excellence are not anathema to non-professional education, yet at that level and due to the nature of education which is more general, the need for merit and excellence therein is not of the degree as is called for in the context of professional education.

146. Non-minority unaided institutions can also be subjected to similar restrictions which are found reasonable and in the interest of the student community. Professional education should be made accessible on the criterion of merit and on non- exploitative terms to all eligible students on a uniform basis.

Minorities or non-minorities, in exercise of their educational rights in the field of professional education have an obligation and a duty to maintain requisite standards of professional education by giving admissions based on merit and making education equally accessible to eligible students through a fair and transparent admission procedure and based on a reasonable fee structure.

12. P.A. Inamdar holds that right to establish and administer educational institution falls in Article 19(1)(g). It further holds that seat-sharing, reservation of seats, fixing of quotas, fee fixation, cross-subsidization, etc. imposed by judge-made scheme in professional/ higher education is an unreasonable restriction applying the principles of Voluntariness, Autonomy, Co-optation and Anti- nationalisation, and, lastly, it deals with inter-relationship of Articles 19(1)(g), 29(2) and 30(1) in the context of the minority and non-minority’s right to establish and administer educational institutions. The point here is how does one read the above principles of Autonomy, Voluntariness, Co-optation and Anti-nationalisation of seats. On reading T.M.A. Pai Foundation and P.A. Inamdar in proper perspective, it becomes clear that the said principles have been applied in the context of professional/ higher education where merit and excellence have to be given due weightage and which tests do not apply in cases where a child seeks admission to class I and when the impugned Section 12(1)(c) seeks to remove the financial obstacle.

Thus, if one reads the 2009 Act including Section 12(1)(c) in its application to unaided non-minority school(s), the same is saved as reasonable restriction under Article 19(6).

13. However, we want the Government to clarify the position on one aspect. There are boarding schools and orphanages in several parts of India. In those institutions, there are day scholars and boarders.

The 2009 Act could only apply to day scholars. It cannot be extended to boarders. To put the matter beyond doubt, we recommend that appropriate guidelines be issued under Section 35 of the 2009 Act clarifying the above position.

Validity and applicability of the 2009 Act qua unaided minority schools

14. The inspiring preamble to our Constitution shows that one of the cherished objects of our Constitution is to assure to all its citizens the liberty of thought, expression, belief, faith and worship. To implement and fortify these purposes, Part III has provided certain fundamental rights including Article 26 of the Constitution which guarantees the right of every religious denomination or a section thereof, to establish and maintain institutions for religious and charitable purposes; to manage its affairs in matters of religion; to acquire property and to administer it in accordance with law. Articles 29 and 30 confer certain educational and cultural rights as fundamental rights.

15. Article 29(1) confers on any section of the citizens a right to conserve its own language, script or culture by and through educational institutions and makes it obvious that a minority could conserve its language, script or culture and, therefore, the right to establish institutions of its choice is a necessary concomitant to the right to conserve its distinctive language, script or culture and that right is conferred on all minorities by Article 30(1). That right, however, is subject to the right conferred by Article 29(2).

16. Article 30(1) gives the minorities two rights: (a) to establish and (b) to administer educational institutions of their choice. The real import of Article 29(2) and Article 30(1) is that they contemplate a minority institution with a sprinkle of outsiders admitted into it.

By admitting a non-member into it the minority institution does not shed its character and cease to be a minority institution.

17. The key to Article 30(1) lies in the words “of their choice”.

18. The right established by Article 30(1) is a fundamental right declared in terms absolute unlike the freedoms guaranteed by Article 19 which is subject to reasonable restrictions. Article 30(1) is intended to be a real right for the protection of the minorities in the matter of setting up educational institutions of their own choice. However, regulations may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition. However, such regulation must satisfy the test of reasonableness and that such regulation should make the educational institution an effective vehicle of education for the minority community or for the persons who resort to it. Applying the above test in the case of Rev. Sidhajbhai Sabhai v. State of Bombay [1963] SCR 837, this Court held the rule authorizing reservation of seats and the threat of withdrawal of recognition under the impugned rule to be violative of Article 30(1).

19. The above well-settled principles have to be seen in the context of the 2009 Act enacted to implement Article 21A of the Constitution.

At the very outset, the question that arises for determination is ““ what was the intention of the Parliament? Is the 2009 Act intended to apply to unaided minority schools? In answer to the above question, it is important to note that in the case of P.A. Inamdar, this Court held that there shall be no reservations in private unaided colleges and that in that regard there shall be no difference between the minority and non-minority institutions. However, by the Constitution (Ninety- third Amendment) Act, 2005, Article 15 is amended. It is given Article 15(5). The result is that P.A. Inamdar has been overruled on two counts: (a) whereas this Court in P.A. Inamdar had stated that there shall be no reservation in private unaided colleges, the Amendment decreed that there shall be reservations; (b) whereas this Court in P.A. Inamdar had said that there shall be no difference between the unaided minority and non-minority institutions, the Amendment decreed that there shall be a difference. Article 15(5) is an enabling provision and it is for the respective States either to enact a legislation or issue an executive instruction providing for reservation except in the case of minority educational institutions referred to in Article 30(1). The intention of the Parliament is that the minority educational institution referred to in Article 30(1) is a separate category of institutions which needs protection of Article 30(1) and viewed in that light we are of the view that unaided minority school(s) needs special protection under Article 30(1). Article 30(1) is not conditional as Article 19(1)(g). In a sense, it is absolute as the Constitution framers thought that it was the duty of the Government of the day to protect the minorities in the matter of preservation of culture, language and script via establishment of educational institutions for religious and charitable purposes [See: Article 26].

Reservations of 25% in such unaided minority schools result in changing the character of the schools if right to establish and administer such schools flows from the right to conserve the language, script or culture, which right is conferred on such unaided minority schools.

Thus, the 2009 Act including Section 12(1)(c) violates the right conferred on such unaided minority schools under Article 30(1).

However, when we come to aided minority schools we have to keep in mind Article 29(2). As stated, Article 30(1) is subject to Article 29(2).

The said Article confers right of admission upon every citizen into a State-aided educational institution. Article 29(2) refers to an individual right. It is not a class right. It applies when an individual is denied admission into an educational institution maintained or aided by the State. The 2009 Act is enacted to remove barriers such as financial barriers which restrict his/her access to education. It is enacted pursuant to Article 21A. Applying the above tests, we hold that the 2009 Act is constitutionally valid qua aided minority schools.

Conclusion (according to majority):

20. Accordingly, we hold that the Right of Children to Free and Compulsory Education Act, 2009 is constitutionally valid and shall apply to the following:

(i) a school established, owned or controlled by the appropriate Government or a local authority;

(ii) an aided school including aided minority school(s) receiving aid or grants to meet whole or part of its expenses from the appropriate Government or the local authority;

(iii) a school belonging to specified category; and (iv) an unaided non-minority school not receiving any kind of aid or grants to meet its expenses from the appropriate Government or the local authority.

However, the said 2009 Act and in particular Sections 12(1)(c) and 18(3) infringes the fundamental freedom guaranteed to unaided minority schools under Article 30(1) and, consequently, applying the R.M.D.

Chamarbaugwalla v. Union of India [1957] INSC 32; [1957 SCR 930] principle of severability, the said 2009 Act shall not apply to such schools.

21. This judgment will operate from today. In other words, this will apply from the academic year 2012-13. However, admissions given by unaided minority schools prior to the pronouncement of this judgment shall not be reopened.

22. Subject to what is stated above, the writ petitions are disposed of with no order as to costs.

………………………..CJI (S. H. Kapadia) ………………………….J.

(Swatanter Kumar) New Delhi;

April 12, 2012 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION WRIT PETITION (CIVIL) NO.95 OF 2010 SOCIETY FOR UN-AIDED P.SCHOOL OF RAJASTHAN ..Petitioner(s) Versus U.O.I. & ANR. ..Respondent(s) WITH
W.P. (C) NOs.98/2010, 126/2010, 137/2010, 228/2010, 269/2010, 310/2010, 364/2010, 384/2010, 22/2011, 24/2011, 21/2011, 47/2011, 59/2011, 50/2011, 83/2011, 88/2011, 99/2011, 102/2011, 104/2011, 86/2011, 101/2011, 115/2011, 154/2011, 126/2011, 118/2011, 186/2011, 148/2011, 176/2011, 205/2011, 238/2011 and 239/2011

K. S. Radhakrishnan, J.

We are, in these cases, concerned with the constitutional validity of the Right of Children to Free and Compulsory Education Act 2009 (35 of 2009) [in short, the Act], which was enacted following the insertion of Article 21A by the Constitution (Eighty-sixth Amendment) Act, 2002.

Article 21A provides for free and compulsory education to all children of the age 6 to 14 years and also casts an obligation on the State to provide and ensure admission, attendance and completion of elementary education in such a manner that the State may by law determine. The Act is, therefore, enacted to provide for free and compulsory education to all children of the age 6 to 14 years and is anchored in the belief that the values of equality, social justice and democracy and the creation of just and humane society can be achieved only through a provision of inclusive elementary education to all the children.

Provision of free and compulsory education of satisfactory quality to the children from disadvantaged groups and weaker sections, it was pointed out, is not merely the responsibility of the schools run or supported by the appropriate government, but also of schools which are not dependant on government funds.

2. Petitioners in all these cases, it may be mentioned, have wholeheartedly welcomed the introduction of Article 21A in the Constitution and acknowledged it as a revolutionary step providing universal elementary education for all the children. Controversy in all these cases is not with regard to the validity of Article 21A, but mainly centers around its interpretation and the validity of Sections 3, 12(1)(b) and 12(1)(c) and some other related provisions of the Act, which cast obligation on all elementary educational institutions to admit children of the age 6 to 14 years from their neighbourhood, on the principle of social inclusiveness. Petitioners also challenge certain other provisions purported to interfere with the administration, management and functioning of those institutions. I have dealt with all those issues in Parts I to V of my judgment and my conclusions are in Part VI.

3. Part I of the judgment deals with the circumstances and background for the introduction of Article 21A and its scope and object and the interpretation given by the Constitution Benches of this Court on right to education. Part II of the judgment deals with various socio-economic rights recognized by our Constitution and the impact on other fundamental rights guaranteed to others and the measures adopted by the Parliament to remove the obstacles for realization of those rights, in cases where there is conflict. In Part III of the judgment, I have dealt with the obligations and responsibilities of the non-state actors in realization of children’s rights guaranteed under Article 21A and the Act. In Part IV, I have dealt with the constitutional validity of Section 12(1)(b), 12(1)(c) of the Act and in Part V, I have dealt with the challenge against other provisions of the Act and my conclusions are in Part VI.

4. Senior lawyers ““ Shri Rajeev Dhavan, Shri T.R. Andhyarujina, Shri Ashok H. Desai, Shri Harish S. Salve, Shri N. Chandrasekharan, Shri K. Parasaran, Shri Chander Uday Singh, Shri Shekhar Naphade, Shri Vikas Singh, Shri Arvind P. Dattar and large number of other counsel also presented their arguments and rendered valuable assistance to the Court. Shri Goolam E. Vahanvati, learned Attorney General and Mrs.

Indira Jaising, learned Additional Solicitor General appeared for the Union of India.

PART I

5. In Mohini Jain v. State of Karnataka and others [(1992) 3 SCC 666], this Court held that the right to education is a fundamental right guaranteed under Article 21 of the Constitution and that dignity of individuals cannot be assured unless accompanied by right to education and that charging of capitation fee for admission to educational institutions would amount to denial of citizens’ right to education and is violative of Article 14 of the Constitution. The ratio laid down in Mohini Jain was questioned in Unni Krishnan, J.P.

and Others v. State of A.P. and Others [(1993) 1 SCC 645] contending that if the judgment in Mohini Jain was given effect to, many of the private educational institutions would have to be closed down. Mohini Jain was affirmed in Unni Krishnan to the extent of holding that the right to education flows from Article 21 of the Constitution and charging of capitation fee was illegal. The Court partly overruled Mohini Jain and held that the right to free education is available only to children until they complete the age of 14 years and after that obligation of the State to provide education would be subject to the limits of its economic capacity and development. Private unaided recognized/affiliated educational institutions running professional courses were held entitled to charge the fee higher than that charged by government institutions for similar courses but that such a fee should not exceed the maximum limit fixed by the State. The Court also formulated a scheme and directed every authority to impose that scheme upon institutions seeking recognition/affiliation, even if they are unaided institutions. Unni Krishnan introduced the concept of “free seats” and “payment seats” and ordered that private unaided educational institutions should not add any further conditions and were held bound by the scheme. Unni Krishnan also recognized the right to education as a fundamental right guaranteed under Article 21 of the Constitution and held that the right is available to children until they complete the age of 14 years.

6. The Department of Education, Ministry of Human Resources Development, Government of India after the judgment in Unni Krishnan made a proposal to amend the Constitution to make the right to education a fundamental right for children up to the age of 14 years and also a fundamental duty of citizens of India so as to achieve the goal of universal elementary education. The Department also drafted a Bill [Constitution (Eighty-third Amendment) Bill, 1997] so as to insert a new Article 21A in the Constitution which read as follows:

“21A. Right to education.

21A(1) The State shall provide free and compulsory education to all citizens of the age of six to fourteen years.

Clause(2) The Right to Free and Compulsory Education referred to in clause (1) shall be enforced in such manner as the State may, by law, determine.

Clause (3) The State shall not make any law, for free and compulsory education under Clause(2), in relation to the educational institutions not maintained by the State or not receiving aid out of State funds.”

7. The draft Bill was presented before the Chairman, Rajya Sabha on 28.07.1997, who referred the Bill to a Committee for examination and report. The Committee called for suggestions/views from individuals, organisations, institutions etc. and ultimately submitted its report on 4.11.1997. The Committee in its Report referred to the written note received from the Department of Education and stated as follows:

“Department in its written note stated that the Supreme Court in its judgment in Unni Krishnan J.P. v. Andhra Pradesh, has held that children of this country have a Fundamental Right to free education until they complete the age of 14 years. This right flows from Article 21 relating to personal liberty and its content, parameters have to be determined in the light of Article 41 which provides for right to work, to education and to public assistance in certain cases and Article 45 which provides for free and compulsory education to children up to the age of 14 years. The apex Court has observed that the obligations created by these Articles of the Constitution can be discharged by the State either by establishing institutions of its own or by aiding recognising and granting affiliation to educational institutions. On clause (3) of the proposed Article 21, the report stated as follows:

“11. Clause (3) of the proposed Article 21 provides that the State shall not make any law for free and compulsory education under clause (2), in relation to the educational institutions not maintained by the State or not receiving aid out of State funds. However, strong apprehensions were voiced about clause (3) of the proposed new Article 21A. Many of the people in the written memoranda and also educational experts in the oral evidence have expressed displeasure over keeping the private educational institutions outside the purview of the fundamental right to be given to the children. The Secretary stated that the Supreme Court in the Unni Krishnan judgment said that wherever the State is not providing any aid to any institution, such an institution need not provide free education. The Department took into account the Supreme Court judgment in the Unni Krishnan case which laid down that no private institution, can be compelled to provide free services. Therefore, they provided in the Constitutional amendment that this concept of free education need not be extended to schools or institutions which are not aided by the Government, the Secretary added. He, however, stated that there was no intention, to exclude them from the overall responsibility to provide education.”

8. The Committee specifically referred to the judgment in Unni Krishnan in paragraph 15.14 of the Report. Reference was also made to the dissenting note of one of the members. Relevant portion of the report is extracted below:

“15.14. Clause (3) of the proposed Article 21(A) prohibits the State from making any law for free and compulsory education in relation to educational institutions not maintained by the State or not receiving aid out of State funds. This issue was discussed by the Members of the Committee at length. The members were in agreement that even though the so called private institutions do not receive any financial aid, the children studying in those institutions should not be deprived of their fundamental right. As regards the interpretation as to whether the private institutions should provide free education or not, the Committee is aware of the Supreme Court judgment given in the Unni Krishnan case. This judgment provides the rule for application and interpretation. In view of the judgment, it is not necessary to make a clause in the Constitution. It would be appropriate to leave the interpretation to the courts instead of making a specific provision in black and white. Some members, however, felt that the private institutions which do not get any financial aid, provide quality education. Therefore, it would be inappropriate to bring such institutions under the purview of free education. Those members, accordingly, felt that clause (3) should not be deleted.

15.15. The Committee, however, after a thorough discussion feels that this provision need not be there. The Committee recommends that clause (3) of the proposed Article 21(A) may be deleted. Smt. Hedwig Michael Rego, M.P. a Member of the Committee gave a Minute of Dissent. It is appended to the report.

15.16. The Committee recommends that the Bill be passed subject to the recommendations made in the preceding paragraphs.

MINUTES OF DISSENT I vehemently oppose the State wanting to introduce free and compulsory education in private, unaided schools.

Clause 21A (3) must be inserted as I do not wish the State to make laws regarding free and compulsory education in relation to educational institutions not maintained by the State or not receiving aid out of State funds.

A Committee of State Education Ministers have already considered the issue in view of the Unni Krishnan case, and found it not feasible to bring unaided private educational institutions within the purview of the Bill.

Hence, I state once again that the proposed clause “21A(3″) must be inserted in the Bill.

Yours sincerely, Sd/’ (SMT. HEDWIG MICHAEL REGO)” (emphasis supplied)

9. Report referred to above was adopted by the Parliamentary Standing Committee on Human Resource Development and submitted the same to the Rajya Sabha on 24.11.1997 and also laid on the Table of the Lok Sabha on 24.11.1997. The Lok Sabha was however dissolved soon thereafter and elections were declared and that Bill was not further pursued.

10. The Chairman of the Law Commission who authored Unni Krishnan judgment took up the issue suo moto. Following the ratio in Unni Krishnan, the Law Commission submitted its 165th Report to the Ministry of Law, Justice and Company Affairs, Union of India vide letter dated 19.11.1998. Law Commission in that letter stated as follows: “Law Commission had taken up the aforesaid subject suo moto having regard to the Directive Principle of the Constitution of India as well as the decision of the Supreme Court of India.”

11. Referring to the Constitution (Eighty-third Amendment) Bill, 1997, Law Commission in its report in paragraph 6.1.4 stated as under:

“6.1.4 (page 165.35): The Department of Education may perhaps be right in saying that as of today the private educational institutions which are not in receipt of any grant or aid from the State, cannot be placed under an obligation to impart free education to all the students admitted into their institutions. However, applying the ratio of Unnikrishnan case, it is perfectly legitimate for the State or the affiliating Board, as the case may be, to require the institution to admit and impart free education to fifty per cent of the students as a condition for affiliation or for permitting their students to appear for the Government/Board examination. To start with, the percentage can be prescribed as twenty. Accordingly, twenty per cent students could be selected by the concerned institution in consultation with the local authorities and the parent-teacher association. This proposal would enable the unaided institutions to join the national endeavour to provide education to the children of India and to that extent will also help reduce the financial burden upon the State.” (emphasis supplied)

12. The Law Commission which had initiated the proceedings suo moto in the light of Unni Krishnan suggested deletion of clause (3) from Article 21A stating as follows: “So far as clause (3) is concerned, the Law Commission states that it should be totally recast on the light of the basic premise of the decision in Unni Kirshnan which has been referred to hereinabove. It would neither be advisable nor desirable that the unaided educational institutions are kept outside the proposed Article altogether while the sole primary obligation to provide education is upon the State, the educational institutions, whether aided or unaided supplement this effort.” Para 6.6.2 of the report reads as under:

“6.6.2. The unaided institutions should be made aware that recognition, affiliation or permission to send their children to appear for the Government/Board examination also casts a corresponding social obligation upon them towards the society.

The recognition/affiliation/permission aforesaid is meant to enable them to supplement the effort of the State and not to enable them to make money. Since they exist and function effectively because of such recognition/affiliation/permission granted by public authorities, they must and are bound to serve the public interest. For this reason, the unaided educational institutions must be made to impart free education to 50% of the students admitted to their institutions. This principle has already been applied to medical, engineering and other colleges imparting professional education and there is no reason why the schools imparting primary/elementary education should not be placed under the same obligation. Clause (3) of proposed Article 21A may accordingly be recast to give effect to the above concept and obligation.” Reference may also be made to the following paragraphs of the Report:

“6.8. The aforesaid bill was referred by the Chairman, Rajya Sabha to the Department-Related Parliamentary Standing Committee on Human Resources Development. A press communiqué inviting suggestions/views was issued on 18th August, 1997. The Committee considered the Bill in four sittings and heard oral evidence. It adopted the draft report at its meeting held on 4th November, 1997. The report was then presented to the Rajya Sabha on 24th November, 1997 and laid on the table of the Lok Sabha on the same day. Unfortunately, the Lok Sabha was dissolved soon thereafter and elections were called.

6.8.1. The Budget Session after the new Lok Sabha was constituted is over. There is, however, no indication whether the Government is inclined to pursue the pending bill.

6.9. The question is debatable whether it is at all necessary to amend the Constitution when there is an explicit recognition of the right to education till the age of fourteen years by the Supreme Court in Unni Krishnan’s case. As the said judgment can be overruled by a larger Bench in another case, thus making this right to education vulnerable, it would appear advisable to give this right constitutional sanctity.”

13. Law Commission was giving effect to the ratio of Unni Krishnan and made suggestions to bring in Article 21A mainly on the basis of the scheme framed in Unni Krishnan providing “free seats” in private educational institutions.

14. The Law Commission report, report of the Parliamentary Standing Committee, judgment in Unni Krishnan etc. were the basis on which the Constitution (Ninety-third Amendment) Bill, 2001 was prepared and presented. Statement of objects and reasons of the Bill given below would indicate that fact:

“2. With a view to making right to education free and compulsory education a fundamental right, the Constitution (Eighty-third Amendment ) Bill, 1997 was introduced in the Parliament to insert a new article, namely, Article 21A conferring on all children in the age group of 6 to14 years the right to free and compulsory education. The said Bill was scrutinized by the Parliamentary Standing Committee on Human Resource Development and the subject was also dealt with in its 165th Report by the Law Commission of India.

3. After taking into consideration the report of the Law Commission of India and the recommendations of the Standing Committee of Parliament, the proposed amendments in Part III, Part IV and Part IVA of the Constitution are being made which are as follows:

(a) to provide for free and compulsory education to children in the age group of 6 to 14 years and for this purpose, a legislation would be introduced in parliament after the Constitution (Ninety-third Amendment) Bill, 2001 is enacted;

(b) to provide in article 45 of the Constitution that the State shall endeavour to provide early childhood care and education to children below the age of six years; and (c) to amend article 51A of the Constitution with a view to providing that it shall be the obligation of the parents to provide opportunities for education to their children.

4. The Bill seeks to achieve the above objects.”

15. The above Bill was passed and received the assent of the President on 12.12.2002 and was published in the Gazette of India on 13.12.2002 and the following provisions were inserted in the Constitution; by the Constitution (Eighty-sixth Amendment) Act, 2002.

Part III ““ Fundamental Rights “21A. Right to Education.”“ The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.

Part IV ““ Directive Principles of State Policy

45. Provision for early childhood care and education to children below the age of six years.”“ The State shall endeavour to provide early childhood care and education for all children until they complete the age of six years.

Part IVA ““ Fundamental Duties 51A. Fundamental duties – It shall be the duty of every citizen of India ““ xxx xxx xxx (k) who is a parent or guardian to provide opportunities for education to his child or, as the case may be, ward between the age of six and fourteen years.”

16. Reference was earlier made to the Parliamentary Standing Committee Report, 165th Law Commission Report, 1998 and the opinion expressed by the Department of Education so as to understand the background of the introduction of Article 21A which is also necessary to properly understand the scope of the Act. In Herron v. Rathmines and Rathgar Improvement Commissioners [1892] AC 498 at p. 502, the Court held that the subject-matter with which the Legislature was dealing, and the facts existing at the time with respect to which the Legislature was legislating are legitimate topics to consider in ascertaining what was the object and purpose of the Legislature in passing the Act. In Mithilesh Kumari and Another v. Prem Behari Khare [(1989) 2 SCC 95], this Court observed that “where a particular enactment or amendment is the result of recommendation of the Law Commission of India, it may be permissible to refer to the relevant report.” (See also Dr. Baliram Waman Hiray v. Justice B. Lentin and Others [(1988) 4 SCC 419], Santa Singh v. State of Punjab [(1976) 4 SCC 190], Ravinder Kumar Sharma v. State of Assam [(1999) 7 SCC 435].

UNNI KRISHNAN:

17. Unni Krishnan had created mayhem and raised thorny issues on which the Law Commission had built up its edifice, suo moto. The Law Commission had acknowledged the fact that but for the ratio in Unni Kirshnan the unaided private educational institutions would have no obligation to impart free and compulsory education to the children admitted in their institutions. Law Commission was also of the view that the ratio in Unni Krishnan had legitimized the State or the affiliating Board to require unaided educational institutions to provide free education, as a condition for affiliation or for permitting the students to appear for the Government/Board examination.

18. Unni Krishnan was questioned contending that it had imposed unreasonable restrictions under Article 19(6) of the Constitution on the administration of the private educational institutions and that the rights of minority communities guaranteed under Article 29 and Article 30 were eroded. Unni Krishnan scheme which insisted that private unaided educational institutions should provide for “free seats” as a condition for recognition or affiliation was also questioned contending that the same would amount to nationalisation of seats.

PAI FOUNDATION

19. T.M.A. Pai Foundation and others v. State of Karnataka and others [(2002) 8 SCC 481] examined the correctness of the ratio laid down in Unni Krishnan and also the validity of the scheme. The correctness of the rigid percentage of reservation laid down in St.

Stephen’s College v. University of Delhi [(1992) 1 SCC 558] in the case of minority aided educational institutions and the meaning and contents of Articles 30 and 29(2) were also examined.

20. Pai Foundation acknowledged the right of all citizens to practice any profession, trade or business under Article 19(1)(g) and Article 26 and held those rights would be subject to the provisions that were placed under Article 19(6) and 26(a) and the rights of minority to establish and administer educational institutions under Article 30 was also upheld.

21. Unni Krishnan scheme was held unconstitutional, but it was ordered that there should be no capitation fee or profiteering and reasonable surplus to meet the cost of expansion and augmentation of facilities would not mean profiteering. Further, it was also ordered that the expression “education” in all the Articles of the Constitution would mean and include education at all levels, from primary education level up to post graduate level and the expression “educational institutions” would mean institutions that impart education as understood in the Constitution.

22. Pai Foundation has also recognised that the expression “occupation” in Article 19(1)(g) is an activity of a person undertaken as a means of livelihood or a mission in life and hence charitable in nature and that establishing and running an educational institution is an occupation, and in that process a reasonable revenue surplus can be generated for the purpose of development of education and expansion of the institutions. The right to establish and administer educational institutions, according to Pai Foundation, comprises right to admit students, set up a reasonable fee structure, constitute a governing body, appoint staff, teaching and non-teaching and to take disciplinary action. So far as private unaided educational institutions are concerned, the Court held that maximum autonomy has to be with the management with regard to administration, including the right of appointment, disciplinary powers, admission of students and the fee to be charged etc. and that the authority granting recognition or affiliation can certainly lay down conditions for the grant of recognition or affiliation but those conditions must pertain broadly to academic and educational matters and welfare of students and teachers.

The Court held that the right to establish an educational institution can be regulated but such regulatory measures must be in general to ensure proper academic standards, atmosphere and infrastructure and prevention of maladministration. The necessity of starting more quality private unaided educational institutions in the interest of general public was also emphasised by the Court by ensuring autonomy and non-regulation in the school administration, admission of students and fee to be charged. Pai Foundation rejected the view that if a private school is allowed to charge fee commensurate with the fee affordable, the degrees would be purchasable as unfounded since the standards of education can be and are controllable through recognition, affiliation and common final examination. Casting burden on other students to pay for the education of others was also disapproved by Pai Foundation holding that there should be no cross-subsidy.

23. Pai Foundation has also dealt with the case of private aided professional institutions, minority and non-minority, and also other aided institutions and stated that once aid is granted to a private professional educational institution, the government or the state agency, as a condition of the grant of aid, can put fetters on the freedom in the matter of administration and management of the institution. Pai Foundation also acknowledged that there are large number of educational institutions, like schools and non-professional colleges, which cannot operate without the support of aid from the state and the Government in such cases, would be entitled to make regulations relating to the terms and conditions of employment of the teaching and non-teaching staff. In other words, autonomy in private aided institutions would be less than that of unaided institutions.

24. Pai Foundation also acknowledged the rights of the religious and linguistic minorities to establish and administer educational institutions of their choice under Article 30(1) of the Constitution and held that right is not absolute as to prevent the government from making any regulation whatsoever. The Court further held that as in the case of a majority run institution, the moment a minority institution obtains a grant or aid, Article 28 of the Constitution comes into play.

25. Pai Foundation further held that the ratio laid down in St.

Stephen is not correct and held that even if it is possible to fill up all the seats with students of the minority group, the moment the institution is granted aid, the institution will have to admit students of the non-minority group to a reasonable extent, whereby the character of the institution is not annihilated, and at the same time, the rights of the citizen engrafted under Article 29(2) are not subverted. The judgment in Pai Foundation was pronounced on 31.10.2002, 25.11.2002 and Article 21A, new Article 45 and Article 51A(k) were inserted in the Constitution on 12.12.2002, but the basis for the introduction of Article 21A and the deletion of original clause (3) from Article 21A, was due to the judgment of Unnikrishnan. Parliament, it may be noted, was presumed to be aware of the judgment in Pai Foundation, and hence, no obligation was cast on unaided private educational institutions but only on the State, while inserting Article 21A.

26. The judgment in Pai Foundation, after the introduction of the above mentioned articles, was interpreted by various Courts, State Governments, educational institutions in different perspectives leading to the enactment of various statutes and regulations as well, contrary to each other. A Bench of five Judges was, therefore, constituted to clarify certain doubts generated out of the judgment in Pai Foundation and its application. Rights of unaided minority and non-minority institutions and restrictions sought to be imposed by the State upon them were the main issues before the Court and not with regard to the rights and obligations of private aided institutions run by minorities and non-minorities. The five Judges’ Bench rendered its judgment on 14.8.2003 titled Islamic Academy of Education and another v. State of Karnataka and others [(2003) 6 SCC 697]. Unfortunately, Islamic Academy created more problems and confusion than solutions and, in order to steer clear from that predicament, a seven Judges Bench was constituted and the following specific questions were referred for its determination:

“(1) To what extent the State can regulate the admissions made by unaided (minority or non- minority) educational institutions? Can the State enforce its policy of reservation and/or appropriate to itself any quota in admissions to such institutions? (emphasis supplied) (2) Whether unaided (minority and non-minority) educational institutions are free to devise their own admission procedure or whether direction made in Islamic Academy for compulsorily holding entrance test by the State or association of institutions and to choose therefrom the students entitled to admission in such institutions, can be sustained in light of the law laid down in Pai Foundation? (3) Whether Islamic Academy could have issued guidelines in the matter of regulating the fee payable by the students to the educational institutions? (4) Can the admission procedure and fee structure be regulated or taken over by the Committees ordered to be constituted by Islamic Academy?”

27. Above mentioned questions were answered in P.A. Inamdar and others v. State of Maharashtra and others [(2005) 6 SCC 537] and the Court cleared all confusion and doubts, particularly insofar as unaided minority and non-minority educational institutions are concerned.

28. Inamdar specifically examined the inter-relationship between Articles 19(1)(g), 29(2) and 30(1) of the Constitution and held that the right to establish an educational institution (which evidently includes schools as well) for charity or a profit, being an occupation, is protected by Article 19(1)(g) with additional protection to minority communities under Article 30(1). Inamdar, however, reiterated the fact that, once aided, the autonomy conferred by protection of Article 30(1) is diluted, as the provisions of Articles 29(2) will be attracted and certain conditions in the nature of regulations can legitimately accompany the State aid. Reasonable restrictions pointed out by Inamdar may be indicated on the following subjects: (i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business; (ii) the carrying on by the State, or by a corporation owned or controlled by the State of any trade, business, industry or service whether to the exclusion, complete or partial of citizens or otherwise.

29. Referring to the judgments in Kerala Education Bill , In Re.

1959 SCR 995 and St. Stephen, the Court took the view that once an educational institution is granted aid or aspires for recognition, the State may grant aid or recognition accompanied by certain restrictions or conditions which must be followed as essential to the grant of such aid or recognition. Inamdar, as I have already indicated, was mainly concerned with the question whether the State can appropriate the quota of unaided educational institutions both minority and non-minority.

Explaining Pai Foundation, the Court in Inamdar held as follows:

“119. A minority educational institution may choose not to take any aid from the State and may also not seek any recognition or affiliation. It may be imparting such instructions and may have students learning such knowledge that do not stand in need of any recognition. Such institutions would be those where instructions are imparted for the sake of instructions and learning is only for the sake of learning and acquiring knowledge. Obviously, such institutions would fall in the category of those who would exercise their right under the protection and privilege conferred by Article 30(1) “to their hearts’ content” unhampered by any restrictions excepting those which are in national interest based on considerations such as public safety, national security and national integrity or are aimed at preventing exploitation of students or the teaching community. Such institutions cannot indulge in any activity which is violative of any law of the land.

120. They are free to admit all students of their own minority community if they so choose to do. (Para 145, Pai Foundation) (ii) Minority unaided educational institutions asking for affiliation or recognition 121. Affiliation or recognition by the State or the Board or the university competent to do so, cannot be denied solely on the ground that the institution is a minority educational institution. However, the urge or need for affiliation or recognition brings in the concept of regulation by way of laying down conditions consistent with the requirement of ensuring merit, excellence of education and preventing maladministration.

For example, provisions can be made indicating the quality of the teachers by prescribing the minimum qualifications that they must possess and the courses of studies and curricula. The existence of infrastructure sufficient for its growth can be stipulated as a prerequisite to the grant of recognition or affiliation. However, there cannot be interference in the day-to- day administration. The essential ingredients of the management, including admission of students, recruiting of staff and the quantum of fee to be charged, cannot be regulated. (Para 55, Pai Foundation) 122. Apart from the generalised position of law that the right to administer does not include the right to maladminister, an additional source of power to regulate by enacting conditions accompanying affiliation or recognition exists. A balance has to be struck between the two objectives: (i) that of ensuring the standard of excellence of the institution, and (ii) that of preserving the right of the minority to establish and administer its educational institution. Subject to a reconciliation of the two objectives, any regulation accompanying affiliation or recognition must satisfy the triple tests: (i) the test of reasonableness and rationality, (ii) the test that the regulation would be conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it, and (iii) that there is no inroad into the protection conferred by Article 30(1) of the Constitution, that is, by framing the regulation the essential character of the institution being a minority educational institution, is not taken away. (Para 122, Pai Foundation) (iii) Minority educational institutions receiving State aid 123. Conditions which can normally be permitted to be imposed on the educational institutions receiving the grant must be related to the proper utilisation of the grant and fulfilment of the objectives of the grant without diluting the minority status of the educational institution, as held in Pai Foundation (see para 143 thereof). As aided institutions are not before us and we are not called upon to deal with their cases, we leave the discussion at that only.

124. So far as appropriation of quota by the State and enforcement of its reservation policy is concerned, we do not see much of a difference between non-minority and minority unaided educational institutions. We find great force in the submission made on behalf of the petitioners that the States have no power to insist on seat-sharing in unaided private professional educational institutions by fixing a quota of seats between the management and the State. The State cannot insist on private educational institutions which receive no aid from the State to implement the State’s policy on reservation for granting admission on lesser percentage of marks i.e. on any criterion except merit.

125. As per our understanding, neither in the judgment of Pai Foundation nor in the Constitution Bench decision in Kerala Education Bill which was approved by Pai Foundation is there anything which would allow the State to regulate or control admissions in the unaided professional educational institutions so as to compel them to give up a share of the available seats to the candidates chosen by the State, as if it was filling the seats available to be filled up at its discretion in such private institutions. This would amount to nationalisation of seats which has been specifically disapproved in Pai Foundation.

Such imposition of quota of State seats or enforcing reservation policy of the State on available seats in unaided professional institutions are acts constituting serious encroachment on the right and autonomy of private professional educational institutions. Such appropriation of seats can also not be held to be a regulatory measure in the interest of the minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution. Merely because the resources of the State in providing professional education are limited, private educational institutions, which intend to provide better professional education, cannot be forced by the State to make admissions available on the basis of reservation policy to less meritorious candidates. Unaided institutions, as they are not deriving any aid from State funds, can have their own admissions if fair, transparent, non- exploitative and based on merit.” (emphasis supplied) Pai Foundation, it was pointed out by Inamdar, merely permitted the unaided private institutions to maintain merit as the criterion of admission by voluntarily agreeing for seat sharing with the State or adopting selection based on common entrance test of the State. Further, it was also pointed that unaided educational institutions can frame their own policy to give free-ships and scholarships to the needy and poor students or adopt a policy in line with the reservation policy of the state to cater to the educational needs of weaker and poorer sections of the society not out of compulsion, but on their own volition. Inamdar reiterated that no where in Pai Foundation, either in the majority or in the minority opinion, have they found any justification for imposing seat sharing quota by the State on unaided private professional educational institutions and reservation policy of the State or State quota seats or management seats. Further, it was pointed that the fixation of percentage of quota is to be read and understood as possible consensual arrangements which can be reached between unaided private professional institutions and the State. State regulations, it was pointed out, should be minimal and only with a view to maintain fairness and transparency in admission procedure and to check exploitation of the students by charging exorbitant money or capitation fees. Inamdar, disapproved the scheme evolved in Islamic Academy to the extent it allowed States to fix quota for seat sharing between management and the States on the basis of local needs of each State, in the unaided private educational institutions of both minority and non-minority categories. Inamdar held that to admit students being one of the components of right to establish and administer an institution, the State cannot interfere therewith and upto the level of undergraduate education, the minority unaided educational institutions enjoy “total freedom”. Inamdar emphasised the fact that minority unaided institutions can legitimately claim “unfettered fundamental right” to choose the students to be allowed admissions and the procedure therefore subject to its being fair, transparent and non- exploitative and the same principle applies to non-minority unaided institutions as well. Inamdar also found foul with the judgment in Islamic with regard to the fixation of quota and for seat sharing between the management and the State on the basis of local needs of each State in unaided private educational institutions, both minority and non-minority. Inamdar noticed that Pai Foundation also found foul with the judgment in Unni Krishnan and held that admission of students in unaided minority educational institutions/schools where scope for merit based is practically nil cannot be regulated by the State or University except for providing the qualification and minimum condition of eligibility in the interest of academic standards.

30. Pai Foundation as well as Inamdar took the view that laws of the land including rules and regulations must apply equally to majority as well as minority institutions and minority institutions must be allowed to do what majority institutions are allowed to do. Pai Foundation examined the expression “general laws of the land” in juxtaposition with “national interest” and stated in Para 136 of the judgment that general laws of land applicable to all persons have been held to be applicable to the minority institutions also, for example, laws relating to taxation, sanitation, social welfare, economic regulations, public order and morality.

31. While examining the scope of Article 30, this fact was specifically referred to in Inamdar (at page 594) and took the view that, in the context of Article 30(1), no right can be absolute and no community can claim its interest above national interest. The expression “national interest” was used in the context of respecting “laws of the land”, namely, while imposing restrictions with regard to laws relating to taxation, sanitation, social welfare, economic legislation, public order and morality and not to make an inroad into the fundamental rights guaranteed under Article 19(1)(g) or Article 30(1) of the Constitution.

32. Comparing the judgments in Inamdar and Pai Foundation, what emerges is that so far as unaided educational institutions are concerned, whether they are established and administered by minority or non-minority communities, they have no legal obligation in the matter of seat sharing and upto the level of under-graduate education they enjoy total freedom. State also cannot compel them to give up a share of the available seats to the candidates chosen by the State. Such an appropriation of seats, it was held, cannot be held to be a regulatory measure in the interest of minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution since they have unfettered fundamental right and total freedom to run those institutions subject to the law relating to taxation, sanitation, social welfare, economic legislation, public order and morality.

33. Pai Foundation was examining the correctness of the ratio in Unni Krishnan, which I have already pointed out, was the basis for the insertion of Article 21A and the deletion of clause (3) of the proposed Article 21A. Inamdar also noticed that Pai Foundation had struck down ratio of Unni Krishnan which invaded the rights of unaided educational institutions by framing a scheme. Article 21A envisaged a suitable legislation so as to achieve the object of free and compulsory education to children of the age 6 to 14 years and imposed obligation on the State, and not on unaided educational institutions.

34. Parliament, in its wisdom, brought in a new legislation Right to Education Act to provide free and compulsory education to children of the age 6 to 14 years, to discharge the constitutional obligation of the State, as envisaged under Article 21A. Provisions have also been made in the Act to cast the burden on the non-state actors as well, to achieve the goal of Universal Elementary Education. The statement of objects and reasons of the Bill reads as follows:

“4. The proposed legislation is anchored in the belief that the values of equality, social justice and democracy and the creation of a just and humane society can be achieved only through provision of inclusive elementary education to all.

Provision of free and compulsory education of satisfactory quality to children from disadvantaged and weaker sections is, therefore, not merely the responsibility of schools run or supported by the appropriate Governments, but also of schools which are not dependent on Government funds.”

35. The Bill was introduced in the Rajya Sabha which passed the Bill on 20.7.2009 and in Lok Sabha on 4.8.2009 and received the assent of the President on 26.8.2009 and was published in the Gazette of India on 27.8.2009.

36. Learned Attorney General of India submitted that the values of equality, social justice and democracy and the creation of just and humane society can be achieved only through a provision of inclusive elementary education by admitting children belonging to disadvantaged group and weaker sections of the society which is not only the responsibility of the state and institutions supported by the state but also schools which are not dependent on government funds. Learned Attorney General also submitted that the state has got an obligation and a duty to enforce the fundamental rights guaranteed to children of the age of 6 to 14 years for free and compulsory education and is to achieve that objective, the Act was enacted. Learned Attorney General submitted that Article 21A is a socio-economic right which must get priority over rights under Article 19(1)(g) and Article 30(1), because unlike other rights it does not operate merely as a limitation on the powers of the state but it requires affirmative state action to protect and fulfil the rights guaranteed to children of the age of 6 to 14 years for free and compulsory education. Reference was also made to the judgments of this Court in Indian Medical Association v. Union of India and others [(2011) 7 SCC 179] (in short Medical Association case), Ahmedabad St. Xavier’s College Society and Another v. State of Gujarat and Another [(1974) 1 SCC 717], Rev. Sidhajbhai Sabhai and Others v. State of Bombay and Another [(1963) 3 SCR 837] and In re.

Kerala Education Bill (supra).

37. Learned Additional Solicitor General in her written as well as oral submissions stated that Article 21A must be considered as a stand alone provision and not subjected to Article 19(1)(g) and Article 30(1) of the Constitution. Article 19(1)(g) and Article 30(1), it was submitted, dealt with the subject of right to carry on occupation of establishing and administering educational institutions, while Article 21A deals exclusively with a child’s right to primary education.

Article 21A, it was pointed out, has no saving clause which indicates that it is meant to be a complete, standalone clause on the subject matter of the right to education and is intended to exclude the application of Article 19(1)(g) and Article 30(1). Learned Additional Solicitor General submitted that omission of clause (3) in the original proposed Article 21A would indicate that the intention of the Parliament was to apply the mandate of Article 21A to all the educational institutions, public or private, aided or unaided, minority or non-minority.

38. Mrs. Menaka Guruswamy and Mrs. Jayna Kothari, appearing for the intervener namely The Azim Premji Foundation, in I.A. No. 7 in W.P.

(C) No. 95/2010, apart from other contentions, submitted that Article 21A calls for horizontal application of sanction on state actors so as to give effect to the fundamental rights guaranteed to the people.

Learned counsels submitted that Sections 15(2), 17, 18, 23 and 24 of the Constitution expressly impose constitutional obligations on non- state actors and incorporate the notion of horizontal application of rights. Reference was also made to the judgment of this Court in People’s Union for Democratic Rights and Others v. Union of India and Others [(1982) 3 SCC 235] and submitted that many of the fundamental rights enacted in Part III, such as Articles 17, 23 and 24, among others, would operate not only against the State but also against other private persons. Reference was also made to the judgment of this Court Vishaka and Others v. State of Rajasthan [(1997) 6 SCC 241], in which this Court held that all employees, both public and private, would take positive steps not to infringe the fundamental rights guaranteed to female employees under Articles 14, 15, 21 and 19(1)(g) of the Constitution. Reference was also made to Article 15(3) and submitted that the Constitution permits the State to make special provisions regarding children. Further, it was also contended that Articles 21A and 15(3) provide the State with Constitutional instruments to realize the object of the fundamental right to free and compulsory education even through non-state actors such as private schools.

39. Shri Rajeev Dhavan, learned senior counsel appearing on behalf of some of the petitioners, submitted that Article 21A casts an obligation on the state and state alone to provide free and compulsory education to children upto the age of 6 to 14 years, which would be evident from the plain reading of Article 21A read with Article 45.

Learned senior counsel submitted that the words “state shall provide” are express enough to reveal the intention of the Parliament. Further, it was stated that the constitutional provision never intended to cast responsibility on the private educational institutions along with the State, if that be so like Article 15(5), it would have been specifically provided so in Article 21A. Article 21A or Article 45 does not even remotely indicate any idea of compelling the unaided educational institutions to admit children from the neighbourhood against their wish and in violation of the rights guaranteed under the Constitution. Learned senior counsel submitted that since no constitutional obligation is cast on the private educational institutions under Article 21A, the State cannot through a legislation transfer its constitutional obligation on the private educational institutions. Article 21A, it was contended, is not subject to any limitation or qualification so as to offload the responsibility of the State on the private educational institutions so as to abridge the fundamental rights guaranteed to them under Article 19(1)(g), Article 26(a), Article 29(1) and Article 30(1) of the Constitution.

40. Learned senior counsel submitted that Article 21A is not meant to deprive the above mentioned core rights guaranteed to the petitioners and if the impugned provisions of the Act do so, to that extent, they may be declared unconstitutional. Learned senior counsel submitted that the “core individual rights” always have universal dimension and thus represent universal value while “socio-economic rights” envisaged the sectional interest and the core individual right, because of its universal nature, promote political equality and human dignity and hence must promote precedence over the socio-economic rights. Learned senior counsel also submitted that constitutional concept and the constitutional interpretation given by Pai Foundation and Inamdar cannot be undone by legislation. Learned counsel also submitted that the concept of social inclusiveness has to be achieved not by abridging or depriving the fundamental rights guaranteed to the citizens who have established and are administering their institutions without any aid or grant but investing their own capital. The principles stated in Part IV of the Constitution and the obligation cast on the State under Article 21A, it was contended, are to be progressively achieved and realised by the State and not by non-state actors and they are only expected to voluntarily support the efforts of the state.

41. Shri T.R. Andhyarujina, learned senior counsel appearing for some of the minority institutions submitted that the object of Articles 25 to 30 of the Constitution is to preserve the rights of religious and linguistic minorities and to place them on a secure pedestal and withdraw them from the vicissitudes of political controversy. Learned senior counsel submitted that the very purpose of incorporating those rights in Part-III is to afford them guarantee and protection and not to interfere with those rights except in larger public interest like health, morality, public safety, public order etc. Learned senior counsel extensively referred to various provisions of the Act, and submitted that they would make serious inroad into the rights guaranteed to the minority communities. Learned counsel further submitted that Section 12(1)(b) and 12(1)(c) in fact, completely take away the rights guaranteed to minority communities, though what was permitted by this Court was only “sprinkling of outsiders” that is members of all the communities. Counsel submitted that the mere fact that some of the institutions established and administered by the minority communities have been given grant or aid, the State cannot take away the rights guaranteed to them under Article 30(1) of the Constitution of India. Learned counsel submitted that Article 21A read with Article 30(1) also confers a right on a child belonging to minority community for free and compulsory education in an educational institution established and administered by the minority community for their own children and such a constitutionally guaranteed right cannot be taken away or abridged by law.

PART II Article 21A and RTE Act

42. Right to education, so far as children of the age 6 to 14 years are concerned, has been elevated to the status of fundamental right under Article 21A and a corresponding obligation has been cast on the State, but through Sections 12(1)(b) and 12(1)(c) of the Act the constitutional obligation of the State is sought to be passed on to private educational institutions on the principle of social inclusiveness. Right to Education has now been declared as a fundamental right of children of the age 6 to 14 years and other comparable rights or even superior rights like the Right to food, healthcare, nutrition, drinking water, employment, housing, medical care may also get the status of fundamental rights, which may be on the anvil. Right guaranteed to children under Article 21A is a socio- economic right and the Act was enacted to fulfil that right. Let us now examine how these rights have been recognized and given effect to under our Constitution and in other countries.

43. Rights traditionally have been divided into civil rights, political rights and socio-economic rights; the former rights are often called the first generation rights and the latter, the second generation rights. First generation rights have also been described as negative rights because they impose a duty and restraint on the state and generally no positive duties flow from them with some exceptions.

Over lapping of both the rights are not uncommon. It is puerile to think that the former rights can be realised in isolation of the latter or that one overrides the others.

44. Socio-economic rights generally serve as a vehicle for facilitating the values of equality, social justice and democracy and the state is a key player in securing that goal. The preamble of the Indian Constitution, fundamental rights in Part III and the Directive Principles of State Policy in Part IV are often called and described as “conscience of the Constitution” and they reflect our civil, political and socio-economic rights which we have to protect for a just and humane society.

45. Supreme Court through various judicial pronouncements has made considerable headway in the realization of socio-economic rights and made them justiciable despite the fact that many of those rights still remain as Directive Principles of State Policy. Civil, political and socio-economic rights find their expression in several international conventions like U.N. Convention on Economic, Social and Cultural Rights 1966 (ICESCR), International Covenant on Civil and Political Rights 1966 (ICCPR), Universal Declaration of Human Rights 1948 (UDHR), United Nations Convention on Rights of Child 1989 (UNCRC)etc.

Reference to some of the socio-economic rights incorporated in the Directive Principles of the State Policy in this connection is useful.

Article 47 provides for duty of the State to improve public health.

Principles enshrined in Articles 47 and 48 are not pious declarations but for guidance and governance of the State policy in view of Article 37 and it is the duty of the State to apply them in various fact situations.

46. Supreme Court has always recognized Right to health as an integral part of right to life under Article 21 of the Constitution.

In Consumer Education & Research Centre and Others v. Union of India and others [(1995) 3 SCC 42], this Court held that the right to life meant a right to a meaningful life, which is not possible without having right to healthcare. This Court while dealing with the right to healthcare of persons working in the asbestos industry read the provisions of Articles 39, 41 and 43 into Article 21. In Paschim Banga Khet Majdoor Samity and Others v. State of West Bengal and Another [(1996) 4 SCC 37], this Court not only declared Right to health as a Fundamental Right but enforced that right by asking the State to pay compensation for the loss suffered and also to formulate a blue-print for primary health care with particular reference to the treatment of patients during emergency. A note of caution was however struck in State of Punjab and Others v. Ram Lubhaya Bagga and Others [(1998) 4 SCC 117] stating that no State or country can have unlimited resources to spend on any of its projects and the same holds good for providing medical facilities to citizens. In Social Jurist, A Lawyers Group v.

Government Of NCT Of Delhi and Others [(140) 2007 DLT 698], a Division Bench of Delhi High Court, of which one of us, Justice Swatanter Kumar was a party, held that the wider interpretations given to Article 21 read with Article 47 of the Constitution of India are not only meant for the State but they are equally true for all, who are placed at an advantageous situation because of the help or allotment of vital assets. Dharamshila Hospital & Research Centre v. Social Jurist &

Ors.; SLP (C) No.18599 of 2007 decided on 25.07.2011 filed against the judgment was dismissed by this Court directing that petitioners’ hospitals to provide medical care to a specified percentage of poor patients since some of the private hospitals are situated on lands belonging to the State or getting other concessions from the State.

47. Right to shelter or housing is also recognized as a socio- economic right which finds its expression in Article 11 of the ICESCR but finds no place in Part-III or Part-IV of our Constitution.

However, this right has been recognized by this Court in several judgments by giving a wider meaning to Article 21 of the Constitution.

In Olga Tellis and Others v. Bombay Municipal Corporation and Others [(1985) 3 SCC 545], this Court was considering the claims of evictees from their slums and pavement dwellings on the plea of deprivation of right to livelihood and right to life. Their claim was not fully accepted by this Court holding that no one has the right to use a public property for private purpose without requisite authorization and held that it is erroneous to contend that pavement dwellers have the right to encroach upon the pavements by constructing dwellings thereon.

In Municipal Corporation of Delhi v. Gurnam Kaur [(1989) 1 SCC 101], this Court held that Municipal Corporation of Delhi has no legal obligation to provide pavement squatters alternative shops for rehabilitation as the squatters had no legally enforceable right. In Sodan Singh and Others v. New Delhi Municipal Committee and Others [(1989) 4 SCC 155], this Court negated the claim of citizens to occupy a particular place on the pavement to conduct a trade, holding the same cannot be construed as a fundamental right. Socio-economic compulsions in several cases did not persuade this Court to provide reliefs in the absence of any constitutional or statutory right. A different note was however struck in Ahmedabad Municipal Corporation v. Nawab Khan Gulab Khan and Others [(1997) 11 SCC 121] in the context of eviction of encroachers from the city of Ahmedabad. This Court held though Articles 38, 39 and 46 mandate the State, as its economic policy, to provide socio-economic justice, no person has a right to encroach and erect structures otherwise on foot-paths, pavements or public streets.

The Court has however opined that the State has the constitutional duty to provide adequate facilities and opportunities by distributing its wealth and resources for settlement of life and erection of shelter over their heads to make the right to life meaningful.

48. Right to work does not oblige the State to provide work for livelihood which has also been not recognized as a fundamental right.

Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (Act 42 of 2005) guarantees at least 100 days of work in every financial year to every household whose adult members volunteer manual work on payment of minimum wages. Article 41 of the Constitution provides that State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, which right is also reflected in Article 6 of ICESCR.

Article 38 of Part-IV states that the State shall strive to promote the welfare of the people and Article 43 states that it shall endeavour to secure a living wage and a decent standard of life to all workers. In Bandhua Mukti Morcha v. Union of India and Others [(1984) 3 SCC 161], a Public Interest Litigation, an NGO highlighted the deplorable condition of bonded labourers in a quarry in Haryana. It was pointed out that a host of protective and welfare oriented labour legislations, including Bonded Labour (Abolition) Act, 1976 and the Minimum Wages Act, 1948were not followed. This Court gave various directions to the State Government to enable it to discharge its constitutional obligation towards bonded labourers. This Court held that right to live with human dignity enshrined in Article 21 derives its life breath from the Directive Principles of State Policy, particularly clauses (e) and (f) of Article 39 and Articles 41 and 42 and held that it must include protection of the health and strength of workers, men and women and of the tender age of children against abuse, opportunities and facilities for children to develop in a healthy manner and in conditions of freedom and dignity, educational facilities, just and humane conditions of work and maternity relief.

49. The Constitutional Court of South Africa rendered several path-breaking judgments in relation to socio-economic rights.

Soobramoney v. Minister of Health (KwaZulu-Natal) [1998 (1) SA 765 (CC)] was a case concerned with the right of emergency health services.

Court held that the State owes no duty to provide the claimant, a diabetic sufferer, with kidney dialysis on a plea of socio-economic right. Petitioner was denied dialysis by a local hospital on the basis of a prioritization policy based on limited resources. The Court emphasised that the responsibility of fixing the health care budget and deciding priorities lay with political organization and medical authorities, and that the court would be slow to interfere with such decisions if they were rational and “taken in good faith”.

50. In Government of the Republic of South Africa and Others v.

Grootboom and others [2000] ZACC 19; [2001 (1) SA 46 (CC)] was a case where the applicants living under appalling conditions in an informal settlement, had moved into private land from which they were forcibly evicted.

Camping on a nearby sports field, they applied for an order requiring the government to provide them with basic shelter. The Constitutional Court did not recognize a directly enforceable claim to housing on the part of the litigants, but ruled that the State is obliged to implement a reasonable policy for those who are destitute. The Court, however, limited its role to that of policing the policy making process rather than recognizing an enforceable individual right to shelter, or defining a minimum core of the right to be given absolute priority.

51. Another notable case of socio-economic right dealt with by the South African Court is Minister of Health and others v. Treatment Action Campaign and others (TAC) [2002 (5) SA 721 (CC)]. The issue in that case was whether the state is obliged under the right of access to health care (Sections 27(1) and (2) of 1996 Constitution) to provide the anti-retroviral drug Nevirapine to HIV-positive pregnant women and their new born infants. Referring the policy framed by the State, the Court held that the State is obliged to provide treatment to the patients included in the pilot policy. The decision was the closest to acknowledging the individual’s enforceable right.

52. In Ex parte Chairperson of the Constitutional Assembly: in re Certification of the Constitution of the Republic of South Africa [1996 (4) SA 744 (CC)], the Court made it clear that socio-economic rights may be negatively protected from improper invasion, breach of the obligation, occurs directly when there is a failure to respect the right or indirectly when there is a failure to prevent the direct entrenchment of the right of another, or a failure to respect the existing protection of the right, by taking measures that diminish the protection of private parties obligation, is not to interfere with or diminish the enjoyment of the right constitutionally protected.

Equally important, in enjoyment of that right, the beneficiary shall also not obstruct, destroy, or make an inroad on the right guaranteed to others like non-state actors.

53. Few of the other notable South African Constitutional Court judgments are: Minister of Public Works and others v. Kyalami Ridge Environmental Association and others [2001 (7) BCLR 652 (CC)] and President of the Republic of South Africa v. Modderklip Boerdery (Pty).

Ltd. [2005] ZACC 5; [2005 (5) SA 3 (CC)].

54. South African Constitution, unlike many other constitutions of the world, has included socio-economic rights, health services, food, water, social security and education in the Constitution to enable it to serve as an instrument of principled social transformation enabling affirmative action and horizontal application of rights. To most of the social rights, the State’s responsibility is limited to take reasonable legislative and other measures within its available resources to achieve the progressive realisation of those rights [Sections 26(2), and 27(2)]. Few exceptions, however, give rise to directly enforceable claims, namely, right not to be evicted [Section 26(3)]; not to be refused emergency medical treatment [Section 27(3)];

the rights of prisoners to adequate nutrition and medical treatment [Section 35(2)] and rights of Children (defined as those under 18 years) to basic nutrition, shelter, basic health care and social services.

55. Social economic rights have also been recognized by the constitutional courts of various other countries as well. In Brown v.

Board of Education [1954] USSC 42; [347 U.S. 483], the U.S. Constitutional Court condemned the policy of segregation of blacks in the American educational system. The Court held that the private schools for black and white children are inherently unequal and deprived children of equal rights.

56. In a Venenzuelan case Cruz del Valle Balle Bermudez v.

Ministry of Health and Social Action – Case No.15.789 Decision No.916 (1999); the Court considered whether those with HIV/AIDS had the right to receive the necessary medicines without charge and identifying a positive duty of prevention at the core of the right to health, it ordered the Ministry to conduct an effective study into the minimum needs of those with HIV/AIDS to be presented for consideration in the Government’s next budget. Reference may also be made a judgment of the Canadian Constitution Court in Wilson v. Medical Services Commission of British Columbia [(53) D.L.R. (4th) 171].

57. I have referred to the rulings of India and other countries to impress upon the fact that even in the jurisdictions where socio- economic rights have been given the status of constitutional rights, those rights are available only against State and not against private state actors, like the private schools, private hospitals etc., unless they get aid, grant or other concession from the State. Equally important principle is that in enjoyment of those socio-economic rights, the beneficiaries should not make an inroad into the rights guaranteed to other citizens.

REMOVAL OF OBSTACLES TO ACHIEVE SOCIO-ECONOMIC RIGHTS

58. Socio-economic rights, I have already indicated, be realized only against the State and the Statute enacted to protect socio- economic rights is always subject to the rights guaranteed to other non- state actors under Articles 19(1)(g), 30(1), 15(1), 16(1) etc.

Parliament has faced many obstacles in fully realizing the socio- economic rights enshrined in Part IV of the Constitution and the fundamental rights guaranteed to other citizens were often found to be the obstacles. Parliament has on several occasions imposed limitations on the enjoyment of the rights guaranteed under Part III of the Constitution, through constitutional amendments.

59. Parliament, in order to give effect to Article 39 and to remove the obstacle for realization of socio-economic rights, inserted Article 31A vide Constitution (First Amendment) Act, 1951 and later amended by the Constitution (Fourth Amendment) Act, 1955 and both the amendments were given retrospective effect from the commencement of the Constitution. The purpose of the first amendment was to eliminate all litigations challenging the validity of legislation for the abolition of proprietary and intermediary interests in land on the ground of contravention of the provisions of Articles 14, 19 and 31. Several Tenancy and Land Reforms Acts enacted by the State also stood protected under Article 31A from the challenge of violation of Articles 14 and 19.

60. Article 31B also saves legislations coming under it from inconsistency with any of the fundamental rights included in Part III for example Article 14, Article 19(1)(g) etc. Article 31B read with Ninth Schedule protects all laws even if they are violative of fundamental rights. However, in I.R. Coelho (Dead) by LRs v. State of Tamil Nadu and Others [(2007) 2 SCC 1], it was held that laws included in the Ninth Schedule can be challenged, if it violates the basic structure of the Constitution which refer to Articles 14, 19, 21 etc.

61. Article 31C was inserted by the Constitution (Twenty-fifth Amendment) Act, 1971 which gave primacy to Article 39(b) and (c) over fundamental rights contained under Article 14 and 19. Article 31C itself was amended by the Constitution (Forty-second Amendment) Act, 1976 and brought in all the provisions in Part-IV, within Article 31C for protecting laws from challenge under article 14 and 19 of the Constitution.

62. I have referred to Articles 31A to 31C only to point out how the laws giving effect to the policy of the State towards securing all or any of the principles laid down in Part-IV stood saved from the challenge on the ground of violation or infraction of the fundamental rights contained in Articles 14 and 19. The object and purpose of those constitutional provisions is to remove the obstacles which stood in the way of enforcing socio-economic rights incorporated in Part-IV of the Constitution and also to secure certain rights, guaranteed under Part III of the Constitution.

63. Rights guaranteed under Article 19(1)(g) can also be restricted or curtailed in the interest of general public imposing reasonable restrictions on the exercise of rights conferred under Article 19(1)(g). Laws can be enacted so as to impose regulations in the interest of public health, to prevent black marketing of essential commodities, fixing minimum wages and various social security legislations etc., which all intended to achieve socio-economic justice. Interest of general public, it may be noted, is a comprehensive expression comprising several issues which affect public welfare, public convenience, public order, health, morality, safety etc. all intended to achieve socio-economic justice for the people.

64. The law is however well settled that the State cannot travel beyond the contours of Clauses (2) to (6) of Article 19 of the Constitution in curbing the fundamental rights guaranteed by Clause (1), since the Article guarantees an absolute and unconditional right, subject only to reasonable restrictions. The grounds specified in clauses (2) to (6) are exhaustive and are to be strictly construed.

The Court, it may be noted, is not concerned with the necessity of the impugned legislation or the wisdom of the policy underlying it, but only whether the restriction is in excess of the requirement, and whether the law has over-stepped the Constitutional limitations. Right guaranteed under Article 19(1)(g), it may be noted, can be burdened by constitutional limitations like sub-clauses (i) to (ii) to Clause (6).

65. Article 19(6)(i) enables the State to make law relating to professional or technical qualifications necessary for practicing any profession or to carry on any occupation, trade or business. Such laws can prevent unlicensed, uncertified medical practitioners from jeopardizing life and health of people. Sub clause (ii) to Article 19(6) imposes no limits upon the power of the State to create a monopoly in its favour. State can also by law nationalize industries in the interest of general public. Clause (6)(ii) of Article 19 serves as an exception to clause (1)(g) of Article 19 which enable the State to enact several legislations in nationalizing trades and industries.

Reference may be made to Chapter-4 of the Motor Vehicles Act, 1938, The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, General Insurance Business (Nationalization) Act, 1972 and so on. Sub- clause 6(ii) of Article 19 exempts the State, on the conditions of reasonableness, by laying down that carrying out any trade, business, industry or services by the State Government would not be questionable on the ground that it is an infringement on the right guaranteed under Article 19(1)(g).

66. I have referred to various provisions under sub-clauses (i) and (ii) of Article 19(6) to impress upon the fact that it is possible to amend the said Article so that socio-economic rights could be realized by carving out necessary constitutional limitations abrogating or abridging the right guaranteed under Article 19(1)(g).

67. Constitutional amendments have also been made to Articles 15 and 16 so as to achieve socio-economic justice. Articles 15 and 16 give power to the State to make positive discrimination in favour of the disadvantaged and particularly, persons belonging to Scheduled Castes and Scheduled Tribes. Socio-economic empowerment secures them dignity of person and equality of status, the object is to achieve socio-economic equality.

68. Faced with many obstacles to achieve the above objectives and the Directive Principles of the State Policy, Articles 15 and 16 of the Constitution had to be amended on several occasions so as to get over the obstacles in achieving the socio-economic justice. In State of Madras v. Shrimati Champakam Dorairajan [(1951) 2 SCR 525], this Court laid down the law that Article 29(2) was not controlled by Article 46 of the Directive Principles of the State Policy and that the Constitution did not intend to protect the interest of the backward classes in the matter of admission to educational institutions. In order to set right the law and to achieve social justice, Clause (4) was added to Article 15 by the Constitutional (First Amendment) Act, 1951 enabling the State to make special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and Scheduled Tribes. The object of Clause (4) was to bring Articles 15 and 29 in line with Articles 16(4), 46 and 340 of the Constitution, so as to make it constitutional for the State to reserve seats for backward classes citizens, Scheduled Castes and Scheduled Tribes in the public educational institutions, as well as to make special provisions, as may be necessary, for the advancement, e.g.

to provide housing accommodation for such classes. In other words, Article 15(4) enables the State to do what would otherwise have been unconstitutional. Article 15(4) has to be read as a proviso or an exception to Article 29(2) and if any provision is defined by the provisions of Article 15(4), its validity cannot be questioned on the ground that it violates Article 29(2). Under Article 15(4), the State is entitled to reserve a minimum number of seats for members of the backward classes, notwithstanding Article 29(2) and the obstacle created under Article 29(2) has been removed by inserting Article 15(4).

69. The Parliament noticed that the provisions of Article 15(4) and the policy of reservation could not be imposed by the State nor any quota or percentage of admission be carved out to be appropriated by the State in minority or non-minority unaided educational institution, since the law was clearly declared in Pai Foundation and Inamdar cases.

It was noticed that the number of seats available in aided or State maintained institutions particularly in respect of professional educational institutions were limited in comparison to those in private unaided institutions. Article 46 states that the State shall promote, with special care, the educational and economic interests of the weaker sections of the people, and, in particular of the Scheduled Castes and Scheduled Tribes, and shall protect them from social injustice.

Access to education was also found to be an important factor and in order to ensure advancement of persons belonging to Scheduled Castes, Scheduled Tribes, socially and economically backward classes, it was proposed to introduce Clause (5) to Article 15 to promote educational advancement of socially and educationally backward classes of citizens i.e. OBCs, Scheduled Castes and Scheduled Tribes and the weaker sections of the society by securing admission in unaided educational institutions and other minority educational institutions referred to in Clause (1) of Article 30 of the Constitution.

70. The Parliament has, therefore, removed the obstacles created by the law as ruled by the Court in Pai Foundation and Inamdar so as to carry out the obligation under the Directive Principles of the State Policy laid down under Article 46. Later, the Parliament enacted the Central Educational Institutions (Reservation and Admission) Act, 2006 (for short “˜the CEI Act’), but the Act never intended to give effect to the mandate of the newly introduced Clause (5) to Article 15 dealing with admissions in both aided and unaided private educational institutions.

71. Constitutional validity of Clause (5) to Article 15 and the CEI Act came up for consideration before a Constitutional Bench of this Court in Ashoka Kumar Thakur v. Union of India and Others [(2008) 6 SCC 1]. CEI Act was enacted by the Parliament under Article 15(5), for greater access to higher education providing for 27 per cent reservation for “Other Backward Classes” to the Central Government controlled educational institutions, but not on privately managed educational institutions. Constitutional validity of Article 15(5) was challenged stating that it had violated the basic structure doctrine. The majority of the Judges in Ashok Kumar Thakur’s case declined to pronounce on the question whether the application of Article 15(5) to private unaided institutions violated the basic structure of the Constitution, in my view, rightly because that issue did not arise for consideration in that case. Justice Dalveer Bhandari, however, examined the validity of Article 15(5) with respect to private unaided institutions and held that an imposition of reservation of that sort would violate Article 19(1)(g) and thus the basic structure doctrine. Article 19(1)(g), as such, it may be pointed out, is not a facet of the basic structure of the Constitution, and can be constitutionally limited in its operation, with due respect, Justice Bhandari has overlooked this vital fact. Pai Foundation as well as Inamdar held that Article 19(1)(g) prevents the State from creating reservation quotas or policy in private unaided professional educational institutions and, as indicated earlier, it was to get over that obstacle that Clause (5) was inserted in Article 15. In Ashok Kumar Thakur, the majority held that Clause (5) to Article 15 though, moderately abridges or alters the equality principle or the principles under Article 19(1)(g), insofar as it dealt with State maintained and aided institutions, it did not violate the basic structure of the Constitution. I have referred to Articles 15(4) and 15(5) and the judgment in Ashok Kumar Thakur to highlight the fact that the State in order to achieve socio-economic rights, can remove obstacles by limiting the fundamental rights through constitutional amendments.

72. Applicability of Article 15(5), with regard to private unaided non-minority professional institutions, came up for consideration in Medical Association case. A two judges Bench of this Court has examined the constitutional validity of Delhi Act 80 of 2007 and the notification dated 14.8.2008 issued by the Government of NCT, Delhi permitting the Army College of Medical Sciences to allocate 100% seats to the wards of army personnel. The Court also examined the question whether Article 15(5) has violated the basic structure of the Constitution. The Court proceeded on the basis that Army Medical College is a private non-minority, unaided professional institution.

Facts indicate that the College was established on a land extending to approximately 25 acres, leased out by the Ministry of Defence, Government of India for a period of 30 years extendable to 99 years.

Ministry of Defence also offered various facilities like providing clinical training at Army Hospital, NCT, Delhi and also access to the general hospitality. The constitutional validity of Article 15(5) was upheld holding that Clause (5) of Article 15 did not violate the basic structure of the Constitution. While reaching that conclusion, Court also examined the ratio in Pai Foundation as well as in Inamdar. Some of the findings recorded in Medical Association case, on the ratio of Pai Foundation and Inamdar, in my view, cannot be sustained.

73. Medical Association case, it is seen, gives a new dimension to the expression “much of difference” which appears in paragraph 124, page 601 of Inamdar. Learned Judges in Medical Association case concluded in Para 80 of that judgment that the expression “much of a difference” gives a clue that there is an “actual difference” between the rights of the minority unaided institutions under clause (1) of Article 30 and the rights of non-minority unaided institutions under sub-clause (g) of Clause (1) of Article 19. Let us refer to paragraph 124 of Inamdar to understand in which context the expression “much of difference” was used in that judgment, which is extracted below:

“So far as appropriation of quota by the State and enforcement of its reservation policy is concerned, we do not see much of a difference between non-minority and minority unaided educational institutions. We find great force in the submission made on behalf of the petitioners that the states have no power to insist on seat-sharing in unaided private professional educational institutions by fixing the quota of seats between the Management and the State.” (emphasis supplied) Inamdar was expressing the view that so far as “appropriation of quota by the State” and “enforcement of its reservation policy” is concerned, they do not see much of difference between non-minority and minority unaided educational institutions. Medical Association case, on the other hand, in my view, has gone at a tangent and gave a new dimension and meaning to paragraph 124 of Inamdar, which is evident from the following paragraph of that judgment:

“81. xxx xxx xxx xxx (i) that there is not much of a difference in terms, between the two kinds of institutions under consideration, based on an overall quantitative assessment of all the rights put together, with a few differences that would still have operational significance; or (ii) that in all respects the two classes of educational institutions are more or less the same, with the differences being minor and not leading to any operational significance.” (emphasis supplied) Medical Association case concluded that the expression “much of a difference” could be understood only in the way they have stated in paragraph 81(i) which, with due respect, is virtually re-writing paragraph 124 of Inamdar, a seven Judges’ Judgment which is impermissible. Final conclusion reached by the learned judges in paragraph 123 for inclusion of Clause (5) to Article 15 reads as follows:

“123. Clause (5) of Article 15 is an enabling provision and inserted by the Constitution (Ninety-third Amendment) Act, 2005 by use of powers of amendment in Article 368. The Constitution (Ninety-third Amendment) Act, 2005 was in response to this Court’s explanation, in P.A. Inamdar, of the ratio in T.M.A.

Pai, that imposition of reservations on non-minority unaided educational institutions, covered by sub-clause (g) of clause (1) of Article 19, to be unreasonable restrictions and not covered by clause (6) of Article 19. The purpose of the amendment was to clarify or amend the Constitution in a manner that what was held to be unreasonable would now be reasonable by virtue of the constitutional status given to such measures.”

74. Referring to Pai Foundation case, the Court also stated, having allowed the private sector into the field of education including higher education, it would be unreasonable, pursuant to clause (6) of Article 19, for the State to fix the fees and also impose reservations on private unaided educational institutions. Nevertheless, the Court opined that taking into consideration the width of the original powers under Clause (6) of Article 19, one would necessarily have to find the State would at least have the power to make amendments to resurrect some of those powers that it had possessed to control the access to higher education and achieve the goals of egalitarianism and social justice.

75. Article 15(5), it may be noted, gives no protection to weaker sections of the society, except members belonging to Scheduled Castes/Scheduled Tribes and members of Other Backward Community.

76. Constitutional amendments carried out to Article 16 in securing social justice may also be examined in this context. Clause (1) of Article 16 guarantees equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Article 16(4) is a special provision confined to the matters of employment in the services under the State which states that nothing in Article 16(1) shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which is not adequately represented in the services under the State. Article 46 obliges the State to take steps for promoting the economic interests of the weaker sections and, in particular, of the Scheduled Castes and Scheduled Tribes. The expression “˜weaker sections’ in Article 46 is wider than “˜backward class’. The backward citizens in Article 16(4) do not comprise of all the weaker sections of the people but only those which are socially, educationally and economically backward, and which are not adequately represented in the services under the State. Further, the expression “˜weaker sections’ can also take within its compass individuals who constitute weaker sections or weaker parts of the society.

77. In Indra Sawhney v. Union of India and Others [(1992) Supp. 3 SCC 212], this Court held that, as the law stood then, there could be no reservation in promotion. It was held that reservation of appointments or posts under Article 16(4) is confined to initial appointments only. To set right the law and to advance social justice by giving promotions to Scheduled Castes and Scheduled Tribes Clause (4A) was added to Article 16 by the Constitution (Seventy-seventh Amendment) Act, 1995. Consequently, the hurdle or obstacle which stood in the way was removed by the Constitutional amendment.

78. The scope of the above provision came up for consideration in Jagdish Lal and Others v. State of Haryana and Others [(1997) 6 SCC 538], where this Court held that the principle of seniority according to length of continuous service on a post or service will apply and that alone will have to be looked into for the purpose of seniority even though they got promotion ignoring the claim of seniors. It was said that reserved candidates who got promotion ignoring the claim of services in general category will be seniors and the same cannot affect the promotion of general candidates from the respective dates of promotion and general candidates remain junior in higher echelons to the reserved candidates. The above position was, however, overruled in Ajit Singh and Others v. State of Punjab and Others [(1999) 7 SCC 209], wherein it was decided that the reserved category candidates cannot count seniority in the promoted category from the date of continuous officiation vis-à-vis the general candidates who were senior to them in the lower category and who were later promoted. Ajit Singh case was declaring the law as it stood. Consequently, the Parliament, in order to give continuous appreciation in promotion, inserted the words “with consequential seniority” in Clause (4A) to Article 16 by Constitution (Eighty-fifth Amendment) Act, 2001 (which was made effective from 17.6.1995). In the light of Article 16(4A), the claims of Scheduled Castes and Scheduled Tribes for promotion shall be taken into consideration in making appointment or giving promotion.

79. Constitution (Eighty-first Amendment) Act, 2000, which came into effect on 9.6.2000, inserted Clause (4B) to Article 16, which envisaged that the unfilled reserved vacancies in a year to be carried forward to subsequent years and that these vacancies are to be treated as distinct and separate from the current vacancies during any year, which means that 50% rule is to be applied only to normal vacancies and not to the posts of backlog of reserved vacancies. Inadequacy and representation of backward classes, Scheduled Castes and Scheduled Tribes are the circumstances which enabled the State Government to enact Articles 16(4), 16(4A) and 16(4B).

80. The constitutional validity of Article 16(4A) substituted by the Constitution (Eighty-fifth Amendment) Act, 2001 came up for consideration before this Court in M. Nagaraj & Ors. v. Union of India [(2006) 8 SCC 212]. The validity of the Constitution (Seventy-seventh Amendment) Act, 1995, the Constitution (Eighty-first Amendment) Act, 2000, the Constitution (Eighty-second Amendment) Act, 2000 and the Constitution (Eighty-fifth Amendment) Act, 2001 were also examined and held valid. This Court held that they do not infringe either the width of the Constitution amending power or alter the identity of the Constitution or its basic structure. This Court held that the ceiling- limit of 50%, the concept of creamy layer and the compelling reasons, namely, backwardness, inadequacy of representation and overall administrative efficiency are all constitutional requirements without which the structure of equality of opportunity in Article 16 would collapse.

81. I have referred extensively to the constitutional amendments effected to Articles 31A to 31C, Articles 15, 16 and 19 to show that whenever the Parliament wanted to remove obstacles so as to make affirmative action to achieve socio-economic justice constitutionally valid, the same has been done by carrying out necessary amendments in the Constitution, not through legislations, lest they may make an inroad into the fundamental rights guaranteed to the citizens. Rights guaranteed to the unaided non-minority and minority educational institutions under Article 19(1)(g) and Article 30(1) as explained in Pai Foundation and reiterated in Inamdar have now been limited, restricted and curtailed so as to impose positive obligation on them under Section 12(1)(c) of the Act and under Article 21A of the Constitution, which is permissible only through constitutional amendment.

82. Constitutional principles laid down by Pai Foundation and Inamdar on Articles 19(1)(g), 29(2) and 30(1) so far as unaided private educational institutions are concerned, whether minority or non- minority, cannot be overlooked and Article 21A, Sections 12(1)(a), (b) and 12(1)(c) have to be tested in the light of those constitutional principles laid down by Pai Foundation and Inamdar because Unnikrishnan was the basis for the introduction of the proposed Article 21A and the deletion of clause (3) from that Article. Interpretation given by the courts on any provision of the Constitution gets inbuilt in the provisions interpreted, that is, Articles 19(1)(g), 29(2) and 30.

83. We have to give due respect to the eleven Judges judgment in Pai Foundation and the seven Judges judgment in Inamdar, the principles laid down in those judgments still hold good and are not whittled down by Article 21A, nor any constitutional amendment was effected to Article 19(1)(g) or Article 30(1). Article 21A, it may be noted was inserted in the Constitution on 12.12.2002 and the judgment in Pai Foundation was delivered by this Court on 31.10.2002 and 25.11.2002.

Parliament is presumed to be aware of the law declared by the Constitutional Court, especially on the rights of the unaided non- minority and minority educational institutions, and in its wisdom thought if fit not to cast any burden on them under Article 21A, but only on the State. Criticism of the judgments of the Constitutional Courts has to be welcomed, if it is healthy. Critics, it is seen often miss a point which is vital, that is, Constitutional Courts only interpret constitutional provisions and declare what the law is, and not what law ought to be, which is the function of the legislature.

Factually and legally, it is not correct to comment that many of the amendments are necessitated to overcome the judgments of the Constitutional Courts. Amendments are necessitated not to get over the judgments of the Constitutional Courts, but to make law constitutional.

In other words, a law which is otherwise unconstitutional is rendered constitutional. An unconstitutional statute is not a law at all, whatever form or however solemnly it is enacted. When legislation is declared unconstitutional by a Constitutional Court, the legislation in question is not vetoed or annulled but declared never to have been the law. People, acting solemnly in their sovereign capacity bestow the supreme dominion on the Constitution and, declare that it shall not be changed except through constitutionally permissible mode. When courts declare legislative acts inconsistent with constitutional provisions, the court is giving effect to the will of the people not due to any judicial supremacy, a principle which squarely applies to the case on hand.

84. In S.P. Gupta v. President of India and Others [1981 SCC Supp. (1) 87] [para 195], Justice Fazal Ali pointed out as follows:

” The position so far as our country is concerned is similar to that of America and if any error of interpretation of a constitutional provision is committed by the Supreme Court or any interpretation which is considered to be wrong by the Government can be rectified only by a constitutional amendment which is a very complicated, complex, delicate and difficult procedure requiring not merely a simple majority but two-third majority of the Members present and voting. Apart from the aforesaid majority, in most cases the amendment has to be ratified by a majority of the States. In these circumstances, therefore, this Court which lays down the law of the land under Article 141 must be extremely careful and circumspect in interpreting statutes, more so constitutional provisions, so to obviate the necessity of a constitutional amendment every time which, as we have already mentioned, is an extremely onerous task.” Reference may also be made to the judgment in Bengal Immunity Company Limited v. State of Bihar and Others [AIR 1955 SC 661].

85. In People’s Union for Civil Liberties (PUCL) and Anr. v.

Union of India (UOI) and Anr. [2003 (4) SCC 399] in para 112 this Court has held “It is a settled principle of constitutional jurisprudence that the only way to render a judicial decision ineffective is to enact a valid law by way of amendment…..”

86. In Smit v. Allwright [1944] USSC 108; [321 U.S. 649 (1944)], the Court held “In constitutional questions, where correction depends upon amendment, and not upon legislative action, this Court throughout its history has freely exercised its power to re-examine the basis of its constitutional decisions. This has long been accepted practice and this practice has continued to this day.”

87. Constitutional interpretation given by this Court as to what the law is, led to bringing in several amendments either to set right the law or abridge the constitutional rights guaranteed in Part III of the Constitution, some of which I have already referred to in the earlier part of this judgment.

88. Principles laid down by Pai Foundation and in Inamdar while interpreting Articles 19(1)(g), 29(2) and 30(1) in respect of unaided non-minority and minority educational institutions like schools upto the level of under-graduation are all weighty and binding constitutional principles which cannot be undone by statutory provisions like Section 12(1)(c), since those principles get in-built in Article 19(1)(g), Article 29(2) and Article 30(1) of the Constitution. Further Parliament, while enacting Article 21A, never thought if fit to undo those principles and thought it fit to cast the burden on the State.

PART III

OBLIGATIONS/RESPONSIBILITIES OF NON-STATE ACTORS IN REALIAZATION OF

CHILDREN’S RIGHTS:

89. We may, however, also examine whether the private unaided educational institutions have any obligations/responsibilities in realization of children’s rights. Articles 21A, 45, 51A(k), Section 12 of the Act and various International Conventions deal with the obligations and responsibilities of state and non-state actors for realization of children’s rights. Social inclusiveness is stated to be the motto of the Act which was enacted to accomplish the State’s obligation to provide free and compulsory education to children of the age 6 to 14 years, in that process, compulsorily co-opting, private educational institutions as well. A shift in State’s functions, to non- state actors in the field of health care, education, social services etc. has been keenly felt due to liberalization of economy and privatization of state functions.

90. The Universal Declaration of Human Rights, 1948 (UDHR), the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights, 1966 (ICESCR), UN Convention on the Rights of the Child (UNCRC), 1989 throw considerable light on the duties and responsibilities of State as well as non-state actors for the progressive realization of children rights.

Article 6(1) of ICCPR states: “Every human being has the inherent right to life .. No one shall be arbitrarily deprived of this right”, meaning thereby that the arbitrary deprivation of a person’s life will be a violation of international human rights norm whether it is by the State or non-state actors. UDHR, ICCPR, ICESCR, UNCRC and other related international covenants guarantee children civil, political, economical, social and cultural rights. Article 4 of the UNCRC requires the State to undertake all appropriate legislative, administrative and other measures for the implementation of the rights recognized in the Convention.

91. Article 2.1 of the ICESCR, has also approved the above obligation of the State, which reads as follows:

“Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co- operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.” Non-state actor’s obligation is also reflected in preamble of ICCPR and ICESCR which is as follows:

“The individual, having duties to other individuals and to the community to which he belongs, is under a responsibility to strive for the promotion and observance of the rights recognized in the present Covenant.” Preamble of UDHR also reads as follows:

“.. every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education, to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance..” Non-state actor’s “duty to the community” and to the “individuals in particular” are accordingly highlighted.

Article 30 of UDHR highlights the necessity to protect and safeguard the right of others which reads as follows :- “Nothing in this Declaration may be interpreted as implying for any state, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.”

92. In this connection reference may be made to Article 28(1)(a) of UNCRC which reads as follows: “States Parties recognize the right of the child to education, and with a view to achieving this right progressively and on the basis of equal opportunity, they shall, in particular: make primary education compulsory and available free to all”;

Article 29 is also relevant for our purpose which reads as follow:-

1. States Parties agree that the education of the child shall be directed to:

(a) The development of the child’s personality, talents and mental and physical abilities to their fullest potential;

(b) The development of respect for human rights and fundamental freedoms, and for the principles enshrined in the Charter of the United Nations;

(c) The development of respect for the child’s parents, his or her own cultural identity, language and values, for the national values of the country in which the child is living, the country from which he or she may originate, and for civilizations different from his or her own;

(d) The preparation of the child for responsible life in a free society, in the spirit of understanding, peace, tolerance, equality of sexes, and friendship among all peoples, ethnic, national and religious groups and persons of indigenous origin;

(e) The development of respect for the natural environment.

2. No part of the present article or article 28 shall be construed so as to interfere with the liberty of individuals and bodies to establish and direct educational institutions, subject always to the observance of the principle set forth in paragraph 1 of the present article and to the requirements that the education given in such institutions shall conform to such minimum standards as may be laid down by the State.

93. Provisions referred to above and other provisions of International Conventions indicate that the rights have been guaranteed to the children and those rights carry corresponding State obligations to respect, protect and fulfill the realization of children’s rights.

The obligation to protect implies the horizontal right which casts an obligation on the State to see that it is not violated by non-state actors. For non-state actors to respect children’s rights cast a negative duty of non-violation to protect children’s rights and a positive duty on them to prevent the violation of children’s rights by others, and also to fulfill children’s rights and take measures for progressive improvement. In other words, in the spheres of non-state activity there shall be no violation of children’s rights.

94. Article 24 of the Indian Constitution states that no child below the age of 14 years shall be employed to work in any factory or be engaged in any hazardous employment. The Factories Act, 1948 prohibits the employment of children below the age of 14 years in any factory. Mines Act, 1952 prohibits the employment of children below 14 years. Child Labour (Prohibition and Regulation) Act, 1986 prohibits employment of children in certain employments. Children Act, 1960 provides for the care, protection, maintenance, welfare, training, education and rehabilitation of neglected or delinquent children.

Juvenile Justice (Care and Protection of Children) Act, 1986 (the Amendment Act 33 of 2006) provide for the care, protection, development and rehabilitation of neglected and delinquent juveniles. There are also other legislations enacted for the care and protection of children like Immoral Trafficking Prevention Act, 1956, Prohibition of Child Marriage Act, 2006 and so on. Legislations referred to above cast an obligation on non-state actors to respect and protect children’s rights and not to impair or destroy the rights guaranteed to children, but no positive obligation to make available those rights.

95. Primary responsibility for children’s rights, therefore, lies with the State and the State has to respect, protect and fulfill children’s rights and has also got a duty to regulate the private institutions that care for children, to protect children from violence or abuse, to protect children from economic exploitation, hazardous work and to ensure human treatment of children. Non-state actors exercising the state functions like establishing and running private educational institutions are also expected to respect and protect the rights of the child, but they are, not expected to surrender their rights constitutionally guaranteed.

96. Article 21A requires non-state actors to achieve the socio- economic rights of children in the sense that they shall not destroy or impair those rights and also owe a duty of care. The State, however, cannot free itself from obligations under Article 21A by offloading or outsourcing its obligation to private State actors like unaided private educational institutions or to coerce them to act on the State’s dictate. Private educational institutions have to empower the children, through developing their skills, learning and other capacities, human dignity, self-esteem and self-confidence and to respect their constitutional rights.

97. I have in the earlier part of the judgment referred to Article 28(1) and Article 29 of UNCRC which cast an obligation on the State to progressively achieve the rights of children and also to make primary education compulsory and available free to all but all the same make it clear that no part of Articles 28 and 29 be construed to interfere with the liberty of non-state actors. They are expected to observe the principles set forth in Para 1 of Article 29 and also to conform to such minimum standards as laid down by the state.

98. South African Constitution Bench in Governing Body of the Juma Musjid Primary School v. Minister for Education [[2011] ZACC 13] dealt with the interplay between private rights and the State’s obligation to provide right to education. In that case, the Court held that the primary positive obligation to provide the right to education resides on the Government and the purpose of Section 8(2) of the Constitution is not to obstruct private autonomy or to impose on a private party the duties of the state in protecting the Bill of Rights.

That was a case involving balancing of proprietary rights of a trust seeking to evict a public school in order to establish an independent school. One of the pleas raised by the evictees was that the evictor trust also had an obligation towards the right to education of the learners which it could not ignore. The Constitutional Court held that the only obligation of a private party as regards socio-economic rights, like right to education, is a negative obligation i.e. not to unreasonably interfere with the realization of the right and that there is no positive obligation cast on them to protect the right by surrendering their rights.

99. Pai Foundation and Inamdar also cast a negative obligation on the private educational institutions in the sense that there shall be no profiteering, no demand of excessive fee, no capitation fee, no maladministration, no cross subsidy etc. Further, this Court, while interdicting the State in appropriating seats in private educational institutions, restrained them from interfering with the autonomy of those institutions and adopted a balancing approach laying down the principle of voluntariness, co-operation, concession, and so on.

100. Pai Foundation and Inamdar have categorically held that any action of the State to regulate or control admissions in the unaided professional educational institutions, so as to compel them to give up a share of the available seats to the candidates chosen by the State, as if it was filling the seats available to be filled up at its discretion in such private institutions, would amount to nationalization of seats. Such imposition of quota of State seats or enforcing reservation policy of the State on available seats in unaided professional institutions, it was held, are acts constituting serious encroachment on the right and autonomy of private unaided professional educational institutions and such appropriation of seats cannot be held to be a regulatory measure in the interest of minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution, so far as the unaided minority institutions are concerned.

PART IV 101. Article 21A has used the expression “State shall provide” not “provide for” hence the constitutional obligation to provide education is on the State and not on non-state actors, the expression is clear and unambiguous and to interpret that expression to mean that constitutional obligation or responsibility is on private unaided educational institutions also, in my view, doing violence to the language of that expression. The obligation of the State to provide free and compulsory education is without any limitation. Parliament in its wisdom has not used the expression “provide for”. If the preposition “for” has been used then the duty of the State would be only to provide education to those who require it but to provide for education or rather to see that it is provided. In this connection it is useful to refer to the judgment of the Supreme Court of Ireland in Crowley v. Ireland [(1980) IR 102], where the expression “provide for” came up for interpretation. It was held that the use of the preposition “for” keeps the State at one remove from the actual provision of education indicating that once the State has made an arrangement for the provision of education ““ provided the buildings, pay teachers and set the curriculum – it is absolved of the responsibility when the education is not actually delivered. The absence of the preposition “for” in Article 21A makes the duty on the State imperative. State has, therefore, to “provide” and “not provide for” through unaided private educational institutions.

102. Article 21A has used the expression “such manner” which means the manner in which the State has to discharge its constitutional obligation and not offloading those obligations on unaided educational institutions. If the Constitution wanted that obligation to be shared by private unaided educational institutions the same would have been made explicit in Article 21A. Further, unamended Article 45 has used the expression “state shall endeavour….for” and when Article 21A was inserted, the expression used therein was that the “State shall provide” and not “provide for” the duty, which was directory earlier made mandatory so far as State is concerned. Article 21 read with 21A, therefore, cast an obligation on the State and State alone.

103. The State has necessarily to meet all expenses of education of children of the age 6 to 14 years, which is a constitutional obligation under Article 21A of the Constitution.

Children have also got a constitutional right to get free and compulsory education, which right can be enforced against the State, since the obligation is on the State. Children who opt to join an unaided private educational institution cannot claim that right as against the unaided private educational institution, since they have no constitutional obligation to provide free and compulsory education under Article 21A of the Constitution. Needless to say that if children are voluntarily admitted in a private unaided educational institution, children can claim their right against the State, so also the institution. Article 51A(k) of the Constitution states that it shall be the duty of every citizen of India, who is a parent or guardian, to provide opportunities for education to his child. Parents have no constitutional obligation under Article 21A of the Constitution to provide free and compulsory education to their children, but only a constitutional duty, then one fails to see how that obligation can be offloaded to unaided private educational institutions against their wish, by law, when they have neither a duty under the Directive Principles of State policy nor a constitutional obligation under Article 21A, to those 25% children, especially when their parents have no constitutional obligation.

104. In Avinash Mehrotra v. Union of India & Others [{2009} 6 SCC 398], this Court held that Article 21A imposes a duty on the State, while Article 51A(k) places burden on the parents to provide free and compulsory education to the children of the age 6 to 14 years. There exists a positive obligation on the State and a negative obligation on the non-state actors, like private educational institutions, not to unreasonably interfere with the realization of the children’s rights and the state cannot offload their obligation on the private unaided educational institutions.

105. I am, therefore, of the considered view that Article 21A, as such, does not cast any obligation on the private unaided educational institutions to provide free and compulsory education to children of the age 6 to 14 years. Article 21A casts constitutional obligation on the State to provide free and compulsory education to children of the age 6 to 14 years.

CONSTITUTIONALLY IMPERMISSIBLE PROCEDURE ADOPTED TO ACHIEVE SOCIAL

INCLUSIVENESS UNDER THE ACT.

106. I may endorse the view that the purpose and object of the Act is laudable, that is, social inclusiveness in the field of elementary education but the means adopted to achieve that objective is faulty and constitutionally impermissible. Possibly, the object and purpose of the Act could be achieved by limiting or curtailing the fundamental rights guaranteed to the unaided non-minority and minority educational institutions under Article 19(1)(g) and Article 30(1) or imposing a positive obligation on them under Article 21A, but this has not been done in the instant case. I have extensively dealt with the question – how the socio economic rights could be achieved by making suitable constitutional amendments in Part II of this judgment.

107. Sections 12(1)(b) and 12(1)(c) are vehicles through which the concept of social inclusiveness is sought to be introduced into the private schools both aided and unaided including minority institutions, so as to achieve the object of free and compulsory education of the satisfactory quality to the disadvantaged groups and weaker sections of the society. The purpose, it is pointed out, is to move towards composite classrooms with children from diverse backgrounds, rather than homogenous and exclusive schools and it was felt that heterogeneity in classrooms leads to greater creativity. In order to understand the scope of the above mentioned provisions and the object sought to be achieved, it is necessary to refer to those and other related provisions:- Section 12:- Extent of School’s responsibility for free and compulsory education ““ (1) For the purposes of this Act, a school, – (a) specified in sub-clause(i) of clause (n) of section 2 shall provide free and compulsory elementary education to all children admitted therein ;

(b) specified in sub-clause(ii) of clause (n) of section 2 shall provide free and compulsory elementary education to such proportion of children admitted therein as its annual recurring aid or grants so received bears to its annual recurring expenses, subject to a minimum of twenty-five per cent.;

(c) specified in sub-clauses (iii) and (iv) of clause (n) of section 2 shall admit in class I, to the extent of at least twenty-five per cent of the strength of that class, children belonging to weaker section and disadvantaged group in the neighbourhood and provide free and compulsory elementary education till its completion:

Provided further that where a school specified in clause (n) of section 2 imparts pre-school education, the provisions of clauses (a) to (c) shall apply for admission to such pre-school education.

(2) The school specified in sub-clause (iv) of clause (n) of section 2 providing free and compulsory elementary education as specified in clause (c) of sub-section (1) shall be reimbursed expenditure so incurred by it to the extent of per-child expenditure incurred by the State, or the actual amount charged from the child, whichever is less, in such manner as may be prescribed:

Provided that such reimbursement shall not exceed per-child-expenditure incurred by a school specified n sub- clause (i) of clause(n) of section 2:

Provided further where such school is already under obligation to provide free education to a specified number of children on account of it having received any land, building, equipment or other facilities, either free of cost or at a concessional rate, such school shall not be entitled for reimbursement to the extent of such obligation.

(3) Every school shall provide such information as may be required by the appropriate Government or the local authority, as the case may be.

Reference may be also be made to definition clauses.

2(d) “child belonging to disadvantaged group” means a child belonging to the Scheduled Caste, the Scheduled Tribe, the socially and educationally backward class or such other group having disadvantage owing to social, cultural, economical, geographical, linguistic, gender or such other factor, as may be specified by the appropriate Government, by notification;

2(e) “child belonging to weaker section” means a child belonging to such parent or guardian whose annual income is lower that the minimum limit specified by the appropriate Government, by notification;

2(n) “school” means any recognized school imparting elementary education and includes ““ (i) a school established, owned or controlled by the appropriate Government or a local authority;

(ii) an aided school receiving aid or grants to meet whole or part of its expenses from the appropriate Government or the local authority.

(iii) a school belonging to specified category; and (iv) an unaided school not receiving any kind of aid or grants to meet its expenses from the appropriate Government or the local authority.

(A) Unaided Educational Institutions, minority and non-minority:

108. First, I may deal with the challenge against Section 12(1)(c), which casts an obligation on the unaided private educational institutions both non-minority and minority to admit to class 1 at least 25% of the strength of those children falling under Sections 2(d) and 2(e), and also in the pre-school, if there is one. State also has undertaken re-imbursement of the fees of those children to the extent of per-child expenditure incurred by the State.

109. Right of a citizen to establish and run an educational institution investing his own capital is recognized as a fundamental right under Article 19(1)(g) and the right of the State to impose reasonable restrictions under Article 19(6) is also conceded. Citizens of this country have no constitutional obligation to start an educational institution and the question is after having started private schools, do they owe a constitutional obligation for seat sharing with the State on a fee structure determined by the State. Pai Foundation and Inamdar took the view that the State cannot regulate or control admission in unaided educational institutions so as to compel them to give up a share of available seats which according to the court would amount to nationalization of seats and such an appropriation of seats would constitute serious encroachment on the right and autonomy of the unaided educational institutions. Both Pai Foundation and Inamdar are unanimous in their view that such appropriation of seats cannot be held to be a regulatory measure in the interest of rights of the unaided minority educational institutions guaranteed under Article 30(1) of the Constitution or a reasonable restriction within the meaning of Article 19(6) in the case of unaided non-minority educational institution. Inamdar has also held that to admit students being an unfettered fundamental right, the State cannot make fetters upto the level of under graduate education. Unaided educational institutions enjoy total freedom and they can legitimately claim “˜unfettered fundamental rights’ to choose students subject to its being fair, transparent and non-exploitative.

110. Section 12(1)(c) read with Section 2(n)(iv) of the Act never envisages any distinction between unaided minority schools and non- minority schools. Constitution Benches of this Court have categorically held that so far as appropriation of quota by the State and enforcement of reservation policy is concerned, there is not much difference between unaided minority and non-minority educational institutions (Refer Paras 124, 125 of Inamdar). Further, it was also held that both unaided minority and non-minority educational institutions enjoy “total freedom” and can claim “unfettered fundamental rights” in the matter of appropriation of quota by the State and enforcement of reservation policy. This Court also held that imposition of quota or enforcing reservation policy are acts constituting serious encroachment on the right and autonomy of such institutions both minority (religious and linguistic) and non- minority and cannot be held to be a regulatory measure in the interest of minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution.

Therefore, no distinction or difference can be drawn between unaided minority schools and unaided non-minority schools with regard to appropriation of quota by the State or its reservation policy under Section 12(1)(c) of the Act.

111. I am of the view, going by the ratio laid down by Pai Foundation and Inamdar, to compel the unaided non minority and minority private educational institutions, to admit 25% of the students on the fee structure determined by the State, is nothing but an invasion as well as appropriation of the rights guaranteed to them under Article 19(1)(g) and Article 30(1) of the Constitution. Legislature cannot under the guise of interest of general public “arbitrarily cast burden or responsibility on private citizens running a private school, totally unaided”. Section 12(1)(c) was enacted not only to offload or outsource the constitutional obligation of the State to the private unaided educational institutions, but also to burden them with duties which they do not constitutionally owe to children included in Section 2(d) or (e) of the Act or to their parents.

112. Pai Foundation, in paragraph 57 of the judgment has stated that in as much as the occupation of education is, in a sense, regarded as charitable, the Government can provide regulations that will ensure excellence in education, while forbidding the charging of capitation fee and profiteering by the institution. Further, it was also pointed out that in the establishment of an educational institution, the object should not be to make profit, inasmuch as education is essentially charitable in nature. However, there can be a reasonable revenue surplus, which may be generated by the educational institutions for the purpose of development of education and their expansion. Consequently, the mere fact that education in one sense, is regarded as charitable, the Government cannot appropriate 25% of the seats of the unaided private educational institutions on the ground that providing education is charity. Pai Foundation and Inamdar after holding that occupation of education can be regarded as charitable held that the appropriation of seats in an unaided private educational institution would amount to nationalization of seats and an inroad into their autonomy. The object and purpose of Section 12(1)(c), it may be noted, is not to reduce commercialization. Pai Foundation and Inamdar have clearly denounced commercialization of education.

113. Right to establish and administer and run a private unaided educational institution is the very openness of personal freedom and opportunity which is constitutionally protected, which right cannot be robbed or coerced against his will at the threat of non-recognition or non-affiliation. Right to establish a private unaided educational institution and to make reasonable profit is recognized by Article 19(1)(g) so as to achieve economic security and stability even if it is for charity. Rights protected under Article 19(1)(g) are fundamental in nature, inherent and are sacred and valuable rights of citizens which can be abridged only to the extent that is necessary to ensure public peace, health, morality etc. and to the extent of the constitutional limitation provided in that Article. Reimbursement of fees at the Government rate is not an answer when the unaided private educational institutions have no constitutional obligation and their Constitutional rights are invaded.

114. Private unaided educational institutions are established with lot of capital investment, maybe with loan and borrowings. To maintain high standard of education, well qualified and experienced teachers have to be appointed, at times with hefty salary. Well equipped library, laboratory etc have also to be set up. In other words considerable money by way of capital investment and overhead expenses would go into for establishing and maintaining a good quality unaided educational institution. Section 12(1)(c), in my view, would amount to appropriation of one’s labour and makes an inroad into the autonomy of the institution. Unaided educational institutions, over a period of time, might have established their own reputation and goodwill, a quantifiable asset. Nobody can be allowed to rob that without their permission, not even the State. Section 12(1)(c) is not a restriction which falls under Article 19(6) but cast a burden on private unaided educational institutions to admit and teach children at the state dictate, on a fee structure determined by the State which, in my view, would abridge and destroy the freedom guaranteed to them under Article 19(1)(g) of the Constitution.

115. Parliament can enact a social legislation to give effect to the Directive Principles of the State Policy, but so far as the present case is concerned, neither the Directive Principles of the State Policy nor Article 21A cast any duty or obligation on the unaided private educational institutions to provide free and compulsory education to children of the age of 6 to 14. Section 12(1)(c) has, therefore, no foundation either on the Directive Principles of the State Policy or Article 21A of the Constitution, so as to rope in unaided educational institutions. Directive Principles of the State Policy as well as Article 21A cast the constitutional obligation on the State and State alone. State, cannot offload or outsource that Constitutional obligation to the private unaided educational institutions and the same can be done only by a constitutional provision and not by an ordinary legislation.

116. Articles 41, 45 and 46 of Part IV of the Constitution cast the duty and constitutional obligations on the State under Article 21A, apart from other constitutional principles laid down by Pai Foundation as well as Inamdar. Section 12(1)(c) has neither the constitutional support of Article 21A, nor the support of Articles 41, 45 or 46, since those provisions cast duty only on the State and State alone. The policies laid down under Articles 41, 45 and 46 can always be achieved by carrying out necessary amendment to the fundamental rights.

However, so far as the present case is concerned, Article 21A has been enacted to cast a constitutional obligation on the state and a duty upon the State under Articles 41, 45 and 46. I have pointed out that it is to get over such situations and for the removal of such obstacles several constitutional amendments were necessitated which I have extensively dealt with in Part II of my judgment.

117. Section 12(1)(c) seeks to achieve what cannot be achieved directly especially after the interpretation placed by Pai Foundation and Inamdar on Article 19(1)(g) and Article 30(1) of the Constitution.

Inamdar has clearly held that right to set up, and administer a private unaided educational institution is an unfettered right, but 12(1)(c) impose fetters on that right which is constitutionally impermissible going by the principles laid down by Pai Foundation and Inamdar.

Section 12(1)(c), in my view, can be given effect to, only on the basis of principles of voluntariness and consensus laid down in Pai Foudnation and Inamdar or else, it may violate the rights guaranteed to unaided minority and non-minority institutions.

118. Constitution of India has expressly conferred the power of judicial review on Courts and the Legislature cannot disobey the constitutional mandate or the constitutional principle laid down by Courts under the guise of social inclusiveness. Smaller inroad like Section 12(1)(c) may lead to larger inroad, ultimately resulting in total prohibition of the rights guaranteed under Articles 19(1)(g), 29(2) and 30(1) as interpreted by the Pai Foundation and Inamdar.

Court, in such situations, owe a duty to lift the veil of the form and appearance to discover the true character and nature of the legislation and if it has the effect of bypassing or ignoring the constitutional principles laid down by the Constitutional Courts and violate fundamental rights, the same has to be nullified.

119. Pai Foundation and Inamdar have not laid down any new constitutional principle, but only declared what the law is.

Constitutional principles laid by courts get assimilated in Articles 19(1)(g), 29(2) and 30(1) and can be undone not by legislation, but only by constitutional amendments. The object to be achieved by the legislation may be laudable, but if it is secured by a method which offends fundamental rights and constitutional principles, the law must be struck down as unconstitutional. The constitutional provision like Article 19(1)(g) is a check on the exercise of legislative power and it is the duty of the constitutional court to protect the constitutional rights of the citizens against any encroachment, as it is often said, “smaller inroad may lead to larger inroad and ultimately resulting into nationalization or even total prohibition.” Section 12(1)(c), if upheld would resurrect Unni Krishnan scheme which was nullified by Pai Foundation and Inamdar.

120. I am, therefore, of the view that so far as unaided educational institutions both minority and non-minority are concerned the obligation cast under Section 12(1)(c) is only directory and the said provision is accordingly read down holding that it is open to the private unaided educational institutions, both minority and non- minority, at their volition to admit children who belong to the weaker sections and disadvantaged group in the neighbourhood in their educational institutions as well as in pre-schools.

(B) Aided Educational Institutions, minority and non- minority:

121. Section 12(1)(b) deals with the schools receiving aid or grants to meet whole or part of its expenses from the appropriate government or local authority. Those schools are bound to provide free and compulsory elementary education to such proportion of children subject to a minimum of 25% depending upon its annual recurring aid or grants so received. Pai Foundation has clearly drawn a distinction between aided private educational institutions and unaided private educational institutions both minority and non-minority. So far as private aided educational institutions, both minority and non-minority are concerned, it has been clearly held in Pai Foundation that once aid is provided to those institutions by the Government or any state agency, as a condition of grant or aid, they can put fetters on the freedom in the matter of administration and management of the institution. Aided institutions cannot obtain the extent of autonomy in relation to the management and administration as would be available to a private unaided institution. Pai Foundation after referring to St. Stephen judgment and Articles 29 and 30 held that even if it is possible to fill up all the seats with minority group the moment the institution is granted aid the institution will have to admit students from non-minority group to a reasonable extent without annihilating the character of the institution. In St. Stephen case which I have already dealt with in the earlier paragraphs of the judgment, the Court held that the State may regulate intake in a minority aided educational institution with due regard to the need of the community of that area where the institution is intending to serve. However, it was held in no case such intake shall exceed 50% of the annual admission. Minority aided educational institutions, it was held, shall make available at least 50% of the annual admission to the members of the communities other than minority community. The Court also held by admitting a member of a non minority into a minority institution, it does not shed its character and cease to be a minority institution and such “sprinkling of outsiders” would enable the distinct language, script and culture of a minority to be propagated amongst non members of a particular community and would indeed better serve the object of serving the language, religion and culture of that minority. I may also add that Section 12(1)(b) equally safeguards the rights of the members of religious and linguistic minority communities. Section 2(e) deals with the “˜child belonging to weaker section’ of the minority communities, religious or linguistic, who would also get the benefit of Section 12(1)(b) and, therefore, the contention that Section 12(1)(b), as such, would stand against the interest of the religious and linguistic minority communities is unfounded.

122. Applying the principle laid down in Pai Foundation, Inamdar, St. Stephen and in Re. Kerala Education Bill, I am of the view that clause 12(1)(b) directing the aided educational institutions minority and non-minority to provide admission to the children of the age group of 6 to14 years would not affect the autonomy or the rights guaranteed under Article 19(1)(g) or Article 30(1) of the Constitution of India.

I, therefore, reject the challenge against the validity of Section 12(1)(b) and hold that the provision is constitutionally valid.

PART V 123. Private unaided educational institutions, apart from challenging Section 12(1)(c), have also raised various objections with regard to other provisions of the Act. Learned senior counsels appearing for them submitted that Sections 3, 6, 7, 8 and 9 read with Sections 4, 5 and 10 impose duties and obligations upon the appropriate government and local authority and those sections completely answer and fulfill the mandate contained in Article 21A as against the State.

Section 3 recognizes the right of the child to free and compulsory education in a neighbourhood school. Unaided educational institutions have only a negative duty of not interfering with the right of the child and not to unreasonably interfere with the realization of those rights and there is no obligation to surrender their rights guaranteed under Article 19(1)(g) and Article 30(1), recognized in Pai Foundation and Inamdar. Children can, therefore, enforce their constitutional and statutory rights against the educational institutions run by the State, local authority qua aided educational institution and not against unaided minority and non-minority educational institutions. It is so declared.

124. Petitioners have not raised any objection with regard to prohibition imposed under Section 13 against collecting the capitation fee which they are bound to follow even on the declaration of law, by Pai Foundation and Inamdar. Petitioners submitted that a fair and transparent screening procedure is being followed by all the schools.

So far as Section 14 is concerned, petitioners have submitted that schools always give opportunity to the child/parent to produce some authentic proof to ascertain the age of the child. Petitioners, referring to Section 15, submitted that the child has to adhere to the academic procedure laid down by the institutions and there will be no denial of admission to the children subject to the availability of seats. With regard to Section 16, it was contended that the prohibition against holding back any student in any class or expelling any student regardless of how grave the provocation may be, imposes unreasonable and arbitrary restriction which would completely destroy the unique educational system followed by some of the unaided educational institutions.

125. Shri Chander Uday Singh, senior counsel appearing in Writ Petition (Civil) No. 83 of 2011, submitted that they are following the International Baccalaureate system of education; the syllabus, curriculum, method of instructions are totally different from other schools. There are no day scholars, and all the students have to stay in the Boarding and the school fees is also high. Most of the students studying in the school are not from the neighbourhood but from all over the country and abroad. School has its own rules and regulations.

Prohibition of holding back and expulsion of students in an unaided private educational institution depends upon the academic and disciplinary procedure laid down by the school and its parent body.

Counsel, referring to Section 17 of the Act, submitted that the prohibition of physical punishment and mental harassment is a welcome provision which the schools follow.

126. Learned senior counsel also submitted that some of their schools are not affiliated or recognized by any State Education Board or the Board constituted by the Central Government or the Indian Council of Secondary Education etc. and those schools generally follow the rules laid down by the recognizing body and are, therefore, unable to fulfill the norms and standards specified in the schedule referred to in Section 19.

127. Counsel appearing for the unaided institutions contended that the curriculum and evaluation procedure laid down by the body affiliating or recognizing the institutions are being followed by them and the provisions stipulated in Section 29(2) are generally being adhered to by their schools. With regard to Section 23 of the Act, counsels submitted that some of the unaided private educational institutions employ the teachers from outside the country as it encourages cross- fertilization of ideas and educational systems and practices and the qualifications provided by the institutions may not be as prescribed under Section 23 of the Act and the qualifications provided therein may not be sufficient for appointment as teachers in the schools affiliated to International Baccalaureate system. Learned counsel appearing for the unaided private educational institutions also referred to Rules 9, 11 to 15 and 23 and explained how it affects their autonomy and status of their institutions.

128. I have extensively dealt with the contentions raised by the unaided private educational institutions and I am of the view that not only Section 12(1)(c), but rest of the provisions in the Act are only directory so far as those institutions are concerned, but they are bound by the declaration of law by Pai Foundation and Inamdar, like there shall be no profiteering, no maladministration, no demand for capitation fee and so on and they have to follow the general laws of the land like taxation, public safety, sanitation, morality, social welfare etc.

129. I may indicate that so far as the rest of the schools are concerned, including aided minority and non-minority educational institutions, they have necessarily to follow the various provisions in the Act since I have upheld the validity of Section 12(1)(b) of the Act. Certain objections have also been raised by them with regard to some of the provisions of the Act, especially by the aided minority community. Contention was raised that Sections 21 and 22 of the Act, read with Rule 3, cast an obligation on those schools to constitute a School Management Committee consisting of elected representatives of the local authority which amounts to taking away the rights guaranteed to the aided minority schools, under Article 30(1) of the Constitution.

Learned Additional Solicitor General has made available a copy of a Bill, proposing amendment to Section 21, adding a provision stating that the School Management Committee constituted under sub-section (1) of Section 21 in respect of a school established and administered by minority whether based on religion or language, shall perform advisory functions only. The apprehension that the committee constituted under Section 21(1) would replace the minority educational institution is, therefore, unfounded. [Ref. F.No.1-22009-E.E-4 of Government of India (Annexure A-3)].

130. Petitioners have also raised objections against the restrictions imposed in following any screening procedure before admitting children to their schools under Sections 13 or 14 of the Act, which according to the petitioners, takes away the autonomy of the institutions. Several representations were received by the Ministry of Human Resources and Development, Government of India seeking clarification on that aspect and the Ministry issued a notification dated 23.11.2009 under Section 35(1) of the Act laying guidelines to be followed by both unaided and aided educational institutions. It was pointed out that the object of the provisions of Section 13(1) read with Section 2(d) is to ensure that schools adopt an admission procedure which is non-discriminatory, rational and transparent and the schools do not subject children and their parents to admission tests and interviews so as to deny admission. I find no infirmity in Section 13, which has nexus with the object sought to be achieved, that is access to education.

131. Contention was also raised by them against Section 14(2) which provides that no child shall be denied admission in a school for lack of age proof which, according to them, will cause difficulty to the management to ascertain the age of the child. Section 14 stipulates that the age of a child shall be determined on the basis of the birth certificate issued in accordance with the provisions of the Birth, Death and Marriages Registration Act, 1986, or the other related documents. The object and purpose of Section 14 is that the school shall not deny access to education due to lack of age proof. I find no legal infirmity in that provision, considering the overall purpose and object of the Act. Section 15 states that a child shall not be denied admission even if the child is seeking admission subsequent to the extended period. A child who evinces an interest in pursuing education shall never be discouraged, so that the purpose envisaged under the Act could be achieved. I find no legal infirmity in that provision.

132. Challenge was also made to Section 16 of the Act stating that it will lead to indiscipline and also deteriorate the quality of the education, which I find difficult to agree with looking to the object and purpose of the Act. Holding back in a class or expulsion may lead to large number of drop outs from the school, which will defeat the very purpose and object of the Act, which is to strengthen the social fabric of democracy and to create a just and humane society. Provision has been incorporated in the Act to provide for special tuition for the children who are found to be deficient in their studies, the idea is that failing a child is an unjust mortification of the child personality, too young to face the failure in life in his or her early stages of education. Duty is cast on everyone to support the child and the child’s failure is often not due the child’s fault, but several other factors. No legal infirmity is found in that provision, hence the challenge against Section 16 is rejected.

133. Petitioners have not raised any objection with regard to Section 17, in my view, rightly. Sections 18 and 19 insist that no school shall be established without obtaining certificate of recognition under the Act and that the norms and standards specified in the schedule be fulfilled, if not already fulfilled, within a stipulated time. There is nothing objectionable in those provisions warranting our interference. Section 23, in my view, would not take away the freedom of aided minority educational institutions for the reasons already stated by us. No infirmity is also found with regard to Sections 24 to 28 of the Act since the object and purpose of those provisions are to provide education of satisfactory quality so that the ultimate object of the Act would be achieved.

134. Learned counsel also submitted that some of the aided minority and non-minority educational institutions are following the curriculum as laid down by independent recognized Boards such as CBSE, ICSE etc. and they are competent bodies for laying down such procedures and in case those schools are compelled to follow the curriculum and evaluation procedure laid down in Section 29, the schools would be put to considerable inconvenience and difficulties and may affect the quality of education.

135. I am of the view that requiring the minority and non- minority institutions to follow the National Curriculum Framework or a Curriculum Framework made by the State, would not abrogate the right under Article 19(1)(g) or Article 30(1) of the Constitution.

Requirement that the curriculum adopted by a minority institution should comply with certain basic norms is in consonance with the values enshrined in the Constitution and cannot be considered to be violative of the rights guaranteed to them under Article 30(1). Further, the curriculum framework contemplated by Section 29(1) does not subvert the freedom of an institution to choose the nature of education that it imparts, as well as the affiliation with the CBSE or other educational boards. Over and above, what has been prescribed by those affiliating or recognizing bodies is that these schools have also to follow the curriculum framework contemplated by Section 29(1) so as to achieve the object and purpose of the Act. I, therefore, find no infirmity in the curriculum or evaluation procedure laid down in Section 29 of the Act.

136. Section 30 of the Act which provides that no child shall be required to pass any Board examination till the completion of elementary education and that on completion of elementary education, the child shall be awarded a certificate. Education is free and compulsory for the children of the age 6 to 14 years and the object and purpose is to see that children should complete elementary education.

If they are subjected to any Board Examination and to any screening procedure, then the desired object would not be achieved. The object and purpose of Section 30 is to see that a child shall not be held back in any class so that the child would complete his elementary education.

The Legislature noticed that there are a large number of children from the disadvantaged groups and weaker sections who drop out of the schools before completing the elementary education, if promotion to higher class is subject to screening. Past experience shows that many of such children have dropped out of the schools and are being exploited physically and mentally. Universal Elementary Education eluded those children due to various reasons and it is in order to curb all those maladies that the Act has provided for free and compulsory education. I, therefore, find no merit in the challenge against those provisions which are enacted to achieve the goal of universal elementary education for strengthening the social fabric of the society.

137. Counsel appearing for some of the aided minority institutions raised a doubt as to whether the Act has got any impact on the Freedom of Religion and Conscience guaranteed under Article 25 insofar as it applies to institutions run by a religious denomination.

It was clarified by the Union of India that the Act would apply to institutions run by religious denominations in case the institution predominantly offers primary education either exclusively or in addition to religious instruction. It was pointed out that where the institution predominantly provides religious instructions like Madrasas, Vedic Pathshalas etc. and do not provide formal secular education, they are exempted from the applicability of the Act. The Act, therefore, does not interfere with the protection guaranteed under Articles 25 and 26 of the Constitution and the provisions in the Act in no way prevent the giving of religious education to students who wish to take religious education in addition to primary education. Article 25 makes it clear that the State reserves the right to regulate or restrict any economic, financial, political or other secular activities which are associated with religious practice and also states that the State can legislate for social welfare and reform, even though by doing so it would interfere with the religious practices. Madrasas and Vedic Pathshalas, as I have already indicated, predominantly provide religious instruction and do not provide formal secular education and, hence, they are exempted from the applicability of the Act. The Central Government has now issued Guidelines dated 23.11.2010 under Section 35(1) of the Act clarifying the above position. The operative part of the guidelines reads as under:

“3. Institutions, including Madrasas and Vedic Pathshalas, especially serving religious and linguistic minorities are protected under Articles 29 and 30 of the Constitution. The RTE Act does not come in the way of continuance of such institutions, or the rights of children in such institutions.” Madrasas, Vedic Pathshalas and similar institutions serving religious and linguistic minorities as such are, therefore, protected under Articles 29 and 30 of the Constitution from the rigour of the Act.

138. The Act has now brought in the concept of public-private partnership for achieving the goal of Universal Elementary Education.

It also stresses upon the importance of preparing and strengthening the schools to address all kinds of diversities arising from inequalities of gender, caste, language, culture, religious or other disabilities.

The concept of neighbourhood schools has also been incorporated for the first time through a legislation and the right of access of the children to elementary education of satisfactory and equitable quality has also been ensured. The duties and responsibilities of the appropriate government, local authorities, parents, schools and teachers in providing free and compulsory education, a system for protection of the right of children and a decentralized grievance mechanism has been provided by the Legislature. Obligation has also been cast on the State and the local authority to establish neighbourhood schools within a period of three years from the commencement of the Act and the Central Government and the State Governments have concurrent responsibilities for providing funds for carrying out all the provisions of the Act and the duties and responsibilities cast on the local authorities as well. A provision has also been made in the Act for pre-school education for children above the age of three years. The purpose is to prepare them for elementary education and to provide early childhood care and education for all children until they complete the age of six years and the appropriate government has to take necessary steps for providing free pre-school education for such children. Further, the Act also cast a duty on every parent or guardian to admit or cause to be admitted his or her child or ward, as the case may be, for an elementary education in the neighbourhood school, which is in conformity with Article 51A(k) of the Constitution.

139. The State has played a dominant role in providing educational services through the Government schools, largely managed by State Governments and local bodies, as well as through privately managed but publicly funded schools called government-aided schools.

These aided schools are operated by charitable trusts, voluntary organizations, and religious bodies but receive substantial funding from the government. According to the Indian Human Development Survey (IHDS), 2005 about 67% of students attend government schools, about 5% attend government-aided schools, and 24% attend private schools.

Convents and Madrasas account for about 1-2%. The survey conducted by IHDS indicates that in 2005 about 21% of rural and 51% of urban children were enrolled in private schools. Part of this increase in private school enrolment has come about through a decline in enrolment in government-aided schools. In 1994, nearly 22% of rural children were enrolled in government-aided schools. By 2005, this declined to a bare 7% in rural areas and 5% in urban areas. At an all India level, 72% of children are enrolled in government schools, and about 28% are in private schools. The survey further indicates that the children between 6-14 years old, about 40% participated in private sector education either through enrolment in private school (20%), through private tuition (13%), or both (7%). The growing preference for private schooling and the reliance on private tutoring, has to be seen in the context of differences in admission of children in government and private schools. The quality of education in government schools, due to various reasons, has gone down considerably. The Act is also envisaged on the belief that the schools run by the appropriate government, local authorities, aided and unaided, minority and non- minority, would provide satisfactory quality education to the children, especially children from disadvantaged and weaker sections.

140. Private aided educational institutions, though run on aid and grant provided by the State, generally the payment to such schools is not performance oriented. The State Governments provide 100% salary to the teachers on its roll on monthly basis and some State Governments would provide 90%. Generally, the State Governments do not provide capital cost either for construction or for repair and whenever these schools are aided, the school fee is regulated and is generally equal to the fee prevailing in the government schools. The recruitment of teaches by these schools is also subject to the Government regulation like inclusion of a representative of the Government in the selection committee, or the appointment being subject to the approval of the Government.

141. Currently, all taxes in India are subject to the education cess, which is 3% of the total tax payable. With effect from assessment year 2009-10, Secondary and Higher Secondary Education Cess of 1% is applicable on the subtotal of taxable income. The proceeds of the cess are directed to a separate non lapsable fund called Prarambhik Shiksha Kosh (PSK), setup by Government of India, to exclusively cater to the elementary education in India. This fund is under the control of the Ministry of Human Resource and Development (MoHRD) and is typically utilized for its flagship programmes ““ Sarva Sikksha Abhiyaan (SSA) and the Mid-day Meal Scheme (MDMS).

142. The statistics would indicate that out of the 12,50,775 schools imparting elementary education in the country in 2007-08, 80.2% were all types of government schools, 5.8 % private aided schools and 13.1% private unaided schools. Almost 87.2% of the schools are located in the rural areas. In the rural areas the proportion of private unaided schools is only 9.3% and that of aided schools is 4.7%.

However, in the urban areas, the percentage of private unaided and aided schools are as high as 38.6% and 13.4% respectively.

143. Out of the total students enrolled in primary classes in 2007- 08 about 75.4, 6.7 and 17.8% are enrolled in government, aided and unaided schools. The total number of teachers working in these schools in 2007-08 was 56,34,589 of which 69.3, 10.4 and 20.7% are teaching in government, aided and private schools, the average number of teachers per school being 3.9, 8.3 and 6.7% respectively. The statistics would indicate that the Government schools have the highest percentage of teachers who are professionally trained at 43.4%, followed by aided school (27.8%) and unaided private schools (only 2.3%). However, the learning achievements are higher in private schools compared to Government schools. Going through the objects and reasons of the Act, the private unaided educational institutions are roped in not due to lack of sufficient number of schools run by the appropriate Government, local authorities or aided educational institutions, but basically on the principle of social inclusiveness so as to provide satisfactory quality education. Some of the unaided educational institutions provide superior quality education, a fact conceded and it is a constitutional obligation of the appropriate Government, local authority and aided schools not only to provide free and compulsory education, but also quality education.

144. Positive steps should be taken by the State Governments and the Central Government to supervise and monitor how the schools which are functioning and providing quality education to the children function. Responsibility is much more on the State, especially when the Statute is against holding back or detaining any child from standard I to VIII.

145. Mr. Murray N. Rothbard, an eminent educationist and Professor in Economics, in his Book “Education: Free and Compulsory” [1999, Ludurg von Mises Institute, Auburn, Aliana] cautioned that progressive education may destroy the independent thought in the child and a child has little chance to develop his systematic reasoning powers in the study of definite courses. The Book was written after evaluating the experiences of various countries, which have followed free and compulsory education for children for several years. Prohibition of holding back in a class may, according to the author, result that bright pupils are robbed of incentive or opportunity to study and the dull ones are encouraged to believe that success, in the form of grades, promotion etc., will come to them automatically. The author also questioned that since the State began to control education, its evident tendency has been more and more to act in such a manner so as to promote repression and hindrance of education, rather than the true development of the individual. Its tendency has been for compulsion, for enforced equality at the lowest level, for the watering down of the subject and even the abandonment of all formal teaching, for the inculcation of obedience to the State and to the “group,” rather than the development of self-independence, for the deprecation of intellectual subjects.

146. I am of the view that the opinions expressed by the academicians like Rothbard command respect and cannot be brushed aside as such because, much more than anything, the State has got a constitutional responsibility to see that our children are given quality education. Provisions of the statute shall not remain a dead letter, remember we are dealing with the lives of our children, a national asset, and the future of the entire country depends upon their upbringing. Our children in the future have to compete with their counter-parts elsewhere in the world at each and every level, both in curricular and extra-curricular fields. Quality education and overall development of the child is of prime importance upon which the entire future of our children and the country rests.

147. The legislation, in its present form, has got many drawbacks. During the course of discussion, the necessity of constituting a proper Regulatory Body was also raised so that it can effectively supervise and monitor the functioning of these schools and also examine whether the children are being provided with not only free and compulsory education, but quality education. The Regulatory authority can also plug the loopholes, take proper and steps for effective implementation of the Act and can also redress the grievances of the children.

148. Learned Attorney General for India has favoured the setting up of an Adjudicatory/Regulatory Authority to determine the question whether compliance with Section 12(1)(b) and Section 12(1)(c) will have an adverse impact on the financial viability of the school, and if so, to suggest remedies and to deal with issues like expulsion etc.

Learned Attorney General indicated the necessity of a statutory amendment if the Regulatory/Adjudicatory body has to be set up under the Act. Proper adjudication mechanism may also pave the way for a successful and effective public-private partnership for setting up educational institutions of best quality so that our children will get quality education. I am sure that the Government will give serious attention to the above aspect of the matter which are of prime importance since we are dealing with the future of the children of this country.

PART VI CONCLUSIONS

1. Article 21A casts an obligation on the State to provide free and compulsory education to children of the age of 6 to 14 years and not on unaided non-minority and minority educational institutions.

2. Rights of children to free and compulsory education guaranteed under Article 21A and RTE Act can be enforced against the schools defined under Section 2(n) of the Act, except unaided minority and non-minority schools not receiving any kind of aid or grants to meet their expenses from the appropriate governments or local authorities.

3. Section 12(1)(c) is read down so far as unaided non-minority and minority educational institutions are concerned, holding that it can be given effect to only on the principles of voluntariness, autonomy and consensus and not on compulsion or threat of non- recognition or non-affiliation.

4. No distinction or difference can be drawn between unaided minority and non-minority schools with regard to appropriation of quota by the State or its reservation policy under Section 12(1)(c) of the Act. Such an appropriation of seats can also not be held to be a regulatory measure in the interest of the minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution.

5. The Appropriate Government and local authority have to establish neighbourhood schools as provided in Section 6 read with Sections 8 and 9, within the time limit prescribed in the Statute.

6. Duty imposed on parents or guardians under Section 10 is directory in nature and it is open to them to admit their children in the schools of their choice, not invariably in the neighbourhood schools, subject to availability of seats and meeting their own expenses.

7. Sections 4, 10, 14, 15 and 16 are held to be directory in their content and application. The concerned authorities shall exercise such powers in consonance with the directions/guidelines laid down by the Central Government in that behalf.

8. The provisions of Section 21 of the Act, as provided, would not be applicable to the schools covered under sub-Section (iv) of clause (n) of Section 2. They shall also not be applicable to minority institutions, whether aided or unaided.

9. In exercise of the powers conferred upon the appropriate Government under Section 38 of the RTE Act, the Government shall frame rules for carrying out the purposes of this Act and in particular, the matters stated under sub-Section (2) of Section 38 of the RTE Act.

10. The directions, guidelines and rules shall be framed by the Central Government, appropriate Government and/or such other competent authority under the provisions of the RTE Act, as expeditiously as possible and, in any case, not later than six months from the date of pronouncement of this judgment.

11. All the State Governments which have not constituted the State Advisory Council in terms of Section 34 of the RTE Act shall so constitute the Council within three months from today. The Council so constituted shall undertake its requisite functions in accordance with the provisions of Section 34 of the Act and advise the Government in terms of clauses (6), (7) and (8) of this order immediately thereafter.

12. Central Government and State Governments may set up a proper Regulatory Authority for supervision and effective functioning of the Act and its implementation.

13. Madrasas, Vedic Pathshalas etc. which predominantly provide religious instructions and do not provide for secular education stand outside the purview of the Act.

149. The Writ Petitions are disposed of as above. This Judgment would have prospective operation and would apply from the next academic year 2012-13 onwards. However, admissions already granted would not be disturbed. We record our deep appreciation for the valuable assistance rendered by the counsel appearing for the both sides.

…………………………………J.
(K. S. RADHAKRISHNAN)

New Delhi;
April 12, 2012

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Special Leave Petition (Civil) No. 27734 of 2012 (@ CC 14781/2012)

Girish Ramchandra Deshpande .. Petitioner
Versus
Cen. Information Commr. & Ors. .. Respondents

O R D E R

1. Delay condoned.
2. We are, in this case, concerned with the question whether the Central Information Commissioner (for short ‘the CIC’) acting under the Right to Information Act, 2005 (for short ‘the RTI Act’) was right in denying information regarding the third respondent’s personal matters pertaining to his service career and also denying the details of his assets and liabilities, movable and immovable properties on the ground that the information sought for was qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act.

3. The petitioner herein had submitted an application on 27.8.2008 before the Regional Provident Fund Commissioner (Ministry of Labour, Government of India) calling for various details relating to third respondent, who was employed as an Enforcement Officer in Sub-Regional Office, Akola, now working in the State of Madhya Pradesh. As many as 15 queries were made to which the Regional Provident Fund Commissioner, Nagpur gave the following reply on 15.9.2008:

“As to Point No.1: Copy of appointment order of Shri A.B. Lute, is in 3 pages. You have sought the details of salary in respect of Shri A.B. Lute, which relates to personal information the disclosures of which has no relationship to any public activity or interest, it would cause unwarranted invasion of the privacy of individual hence denied as per the RTI provision under Section 8(1)(j) of the Act.

As to Point No.2: Copy of order of granting Enforcement Officer Promotion to Shri A.B. Lute, is in 3 Number.

Details of salary to the post along with statutory and other deductions of Mr. Lute is denied to provide as per RTI provisions under Section 8(1)(j) for the reasons mentioned above.

As to Point NO.3: All the transfer orders of Shri A.B. Lute, are in 13 Numbers. Salary details is rejected as per the provision under Section 8(1)(j) for the reason mentioned above.

As to Point No.4: The copies of memo, show cause notice, censure issued to Mr. Lute, are not being provided on the ground that it would cause unwarranted invasion of the privacy of the individual and has no relationship to any public activity or interest. Please see RTI provision under Section 8(1)(j).

As to Point No.5: Copy of EPF (Staff & Conditions) Rules 1962 is in 60 pages.

As to Point No.6: Copy of return of assets and liabilities in respect of Mr. Lute cannot be provided as per the provision of RTI Act under Section 8(1)(j) as per the reason explained above at point No.1.

As to Point No.7: Details of investment and other related details are rejected as per the provision of RTI Act under Section 8(1)(j) as per the reason explained above at point No.1.

As to Point No.8: Copy of report of item wise and value wise details of gifts accepted by Mr. Lute, is rejected as per the provisions of RTI Act under Section 8(1)(j) as per the reason explained above at point No.1.

As to Point No.9: Copy of details of movable, immovable properties of Mr. Lute, the request to provide the same is rejected as per the RTI Provisions under Section 8(1)(j).

As to Point No.10: Mr. Lute is not claiming for TA/DA for attending the criminal case pending at JMFC, Akola.

As to Point No.11: Copy of Notification is in 2 numbers.

As to Point No.12: Copy of certified true copy of charge sheet issued to Mr. Lute – “ The matter pertains with head Office, Mumbai. Your application is being forwarded to Head Office, Mumbai as per Section 6(3) of the RTI Act, 2005.

As to Point No.13: Certified True copy of complete enquiry proceedings initiated against Mr. Lute – “ It would cause unwarranted invasion of privacy of individuals and has no relationship to any public activity or interest. Please see RTI provisions under Section 8(1)(j).

As to Point No.14: It would cause unwarranted invasion of privacy of individuals and has no relationship to any public activity or interest, hence denied to provide.

As to Point No.15: Certified true copy of second show cause notice – “ It would cause unwarranted invasion of privacy of individuals and has no relationship to any public activity or interest, hence denied to provide.”

4. Aggrieved by the said order, the petitioner approached the CIC. The CIC passed the order on 18.6.2009, the operative portion of the order reads as under:

“The question for consideration is whether the aforesaid information sought by the Appellant can be treated as ‘personal information’ as defined in clause (j) of Section 8(1) of the RTI Act. It may be pertinent to mention that this issue came up before the Full Bench of the Commission in Appeal No.CIC/AT/A/2008/000628 (Milap Choraria v.

Central Board of Direct Taxes) and the Commission vide its decision dated 15.6.2009 held that “the Income Tax return have been rightly held to be personal information exempted from disclosure under clause (j) of Section 8(1) of the RTI Act by the CPIO and the Appellate Authority, and the appellant herein has not been able to establish that a larger public interest would be served by disclosure of this information. This logic would hold good as far as the ITRs of Shri Lute are concerned. I would like to further observe that the information which has been denied to the appellant essentially falls in two parts – “ (i) relating to the personal matters pertaining to his services career; and (ii) Shri Lute’s assets & liabilities, movable and immovable properties and other financial aspects. I have no hesitation in holding that this information also qualifies to be the ‘personal information’ as defined in clause (j) of Section 8(1) of the RTI Act and the appellant has not been able to convince the Commission that disclosure thereof is in larger public interest.”

5. The CIC, after holding so directed the second respondent to disclose the information at paragraphs 1, 2, 3 (only posting details), 5, 10, 11, 12,13 (only copies of the posting orders) to the appellant within a period of four weeks from the date of the order. Further, it was held that the information sought for with regard to the other queries did not qualify for disclosure.

6. Aggrieved by the said order, the petitioner filed a writ petition No.4221 of 2009 which came up for hearing before a learned Single Judge and the court dismissed the same vide order dated 16.2.2010. The matter was taken up by way of Letters Patent Appeal No.358 of 2011 before the Division Bench and the same was dismissed vide order dated 21.12.2011. Against the said order this special leave petition has been filed.

7. Shri A.P. Wachasunder, learned counsel appearing for the petitioner submitted that the documents sought for vide Sl. Nos.1, 2 and 3 were pertaining to appointment and promotion and Sl. No.4 and 12 to 15 were related to disciplinary action and documents at Sl. Nos.6 to 9 pertained to assets and liabilities and gifts received by the third respondent and the disclosure of those details, according to the learned counsel, would not cause unwarranted invasion of privacy.

8. Learned counsel also submitted that the privacy appended to Section 8(1)(j) of the RTI Act widens the scope of documents warranting disclosure and if those provisions are properly interpreted, it could not be said that documents pertaining to employment of a person holding the post of enforcement officer could be treated as documents having no relationship to any public activity or interest.

9. Learned counsel also pointed out that in view of Section 6(2) of the RTI Act, the applicant making request for information is not obliged to give any reason for the requisition and the CIC was not justified in dismissing his appeal.

10. This Court in Central Board of Secondary Education and another v.

Aditya Bandopadhyay and others (2011) 8 SCC 497 while dealing with the right of examinees to inspect evaluated answer books in connection with the examination conducted by the CBSE Board had an occasion to consider in detail the aims and object of the RTI Act as well as the reasons for the introduction of the exemption clause in the RTI Act, hence, it is unnecessary, for the purpose of this case to further examine the meaning and contents of Section 8 as a whole.

11. We are, however, in this case primarily concerned with the scope and interpretation to clauses (e), (g) and (j) of Section 8(1) of the RTI Act which are extracted herein below:

“8. Exemption from disclosure of information.- (1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,- (e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;

(g) information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes;

(j) information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information.”

12. The petitioner herein sought for copies of all memos, show cause notices and censure/punishment awarded to the third respondent from his employer and also details viz. movable and immovable properties and also the details of his investments, lending and borrowing from Banks and other financial institutions. Further, he has also sought for the details of gifts stated to have accepted by the third respondent, his family members and friends and relatives at the marriage of his son. The information mostly sought for finds a place in the income tax returns of the third respondent. The question that has come up for consideration is whether the above-mentioned information sought for qualifies to be “personal information” as defined in clause (j) of Section 8(1) of the RTI Act.

13. We are in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show cause notices and orders of censure/punishment etc.

are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression “personal information”, the disclosure of which has no relationship to any public activity or public interest. On the other hand, the disclosure of which would cause unwarranted invasion of privacy of that individual. Of course, in a given case, if the Central Public Information Officer or the State Public Information Officer of the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information, appropriate orders could be passed but the petitioner cannot claim those details as a matter of right.

14. The details disclosed by a person in his income tax returns are “personal information” which stand exempted from disclosure under clause (j) of Section 8(1) of the RTI Act, unless involves a larger public interest and the Central Public Information Officer or the State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information.

15. The petitioner in the instant case has not made a bona fide public interest in seeking information, the disclosure of such information would cause unwarranted invasion of privacy of the individual under Section 8(1)(j) of the RTI Act.

16. We are, therefore, of the view that the petitioner has not succeeded in establishing that the information sought for is for the larger public interest. That being the fact, we are not inclined to entertain this special leave petition. Hence, the same is dismissed.

………………………….J.
(K. S. RADHAKRISHNAN)
………………………….J.
(DIPAK MISRA)

New Delhi
October 3, 2012

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IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1712 OF 2009

Pathan Hussain Basha … Appellant
Versus
State of A.P. … Respondent

WITH
CRIMINAL APPEAL NO. 1706 OF 2009

J U D G M E N T

Swatanter Kumar, J.

1. Accused Pathan Hussain Basha, was married to Pathan Haseena Begum (now deceased) on 23rd June, 2002 at Guntur. It was an arranged marriage. At the time of marriage, it was promised that a dowry of Rs. 25,000/-, besides other formalities, would be paid by the side of the wife to the husband. Out of this amount, a sum of Rs. 15,000/- was paid at that time and it was promised that the balance dowry of Rs. 10,000/- would be paid in the month of October, 2002, upon which the marriage was performed.

2. The father of the bride could not pay the balance amount within time, because he lacked the resources. The accused Pathan Hussain Basha, his father Pathan Khadar Basha, and mother Pathan Nazeer Abi forced her to get the balance amount of dowry. Despite such pressure, she was not able to get that money from her family. It is the case of the prosecution that for non-payment of dowry, the accused persons harassed the deceased and subjected her to cruelty. They even refused to send her to her parental house. This was informed by the deceased to various persons, including her relatives and elders. She was unable to bear the cruelty to which she was subjected, by the accused persons. On 15th February, 2003, at about 11 a.m., the deceased committed suicide by hanging herself in the house of the accused.

3. When Pathan Basheerunnisa, LW3 returned from her work, the accused sent her out giving her money to bring the soaps upon which she went out and when she came back, she found the accused absent and the bride hanging in the house. Subsequently, LW-3 Pathan Basheerunnisa sent her grandson Pathan Inayatullah Khan, LW-4 to the house of the parents of the deceased to inform them about the incident. When the parents of the deceased came to the house of the accused and found the deceased hanging from the beam with a saree, they untied her and took her to the Government General Hospital, Guntur hoping that the deceased may be alive. However, upon medical examination by the doctor, she was declared brought dead.

4. The father of the deceased Pathan Yasin Khan, LW-1 and her mother Pathan Shamshad Begum, LW-2 were present at that time. LW-1, lodged the report, which was registered by Sri K. Srinivasarao, LW-16, the Sub-Inspector of Police. The FIR was registered under Section 304B and Section 498A of the Indian Penal Code, 1860 (for short the “IPC”). Thereafter, investigation was conducted by one Shri P. Devadass, LW-17. He inspected the site from where he recovered and seized the saree that had been used for hanging. This was done in the presence of LW-10 and LW-11, Shaik Ibrahim and Mohd. Ghouse, respectively. Thereupon, the body was sent for postmortem examination through Constable P. Venkateswara Reddy, LW-15. LW-17, P. Devdass, also took photographs of the scene. LW-13, Dr. M. Madhusudana Reddy conducted autopsy over the body of the deceased and prepared post-mortem certificate giving the cause of death as asphyxia, as a result of hanging.

5. On 16th February, 2003, at about 5 p.m., Investigating Officer arrested all the three accused persons. They faced the trial and were convicted by learned Sixth Additional Munsif Magistrate, Guntur for committing an offence under Sections 498A and 304B IPC.

6. They were committed to the Court of Sessions, Guntur Division, Guntur for such an offence. They faced the trial and the learned Sessions Judge vide its judgment dated 4 th October, 2004 found them guilty of the said offences and punished them as follows:-

“Hence A.1 to A.3 are sentenced to undergo R.I. for THREE YEARS and further sentenced to pay a fine of Rs. 1,000/- each (total fine amount Rs. 3,000/-) offence punishable u/s. 498-A IPC. I.D. of the fine amount of Rs. 1000/- to undergo SI for 9 months. And further A.1 to A.3 are sentenced to undergo imprisonment for LIFE for the offence u/s. 304-B IPC. Both the sentences shall run concurrently. The undergone remand period of A.1 to A.3 shall be set off u/s. 428 Cr.P.C. M.O.1 shall be destroyed after expiry of appeal time. The unmarked property if any shall be destroyed after expiry of appeal time.”

7. The judgment dated 4th October, 2004 passed by the learned Trial Court was challenged in appeal before the High Court. The High Court of Andhra Pradesh, vide its judgment dated 26th October, 2006, while allowing the appeal in part, convicted accused Nos.1 and 2 for the aforementioned offences, however, acquitted accused No. 3, namely, Pathan Khadar Basha. The sentence awarded by the Trial Court was confirmed. This gave rise to filing of the present appeals.

8. First and the foremost, we must consider what is the evidence led by the prosecution to bring home the guilt of accused. Accused were charged with offences under Sections 498A and 304B of the IPC. The FIR in the present case was lodged by LW-1, who is the father of the deceased. According to this witness, on 23rd January, 2002, the marriage of his daughter was solemnised with accused Pathan Hussain Basha and he had accepted to give Rs. 25,000/- in marriage. He had given only Rs. 15,000/- and had agreed to pay Rs. 10,000/-, after four months. This witness has further specifically stated that the said accused treated his daughter in a proper manner for about two months. In the marriage, he had also given a gold chain, a double bed, an iron safe and other items. He had called his son-in-law, accused No. 1, to his house, as per custom, at that point the accused demanded a ceiling fan. A ceiling fan was lying with the witness and he gave that to his son in law, however, he protested the same on the ground that the old fan is not acceptable to him and he would like to have a new fan, which was bought for Rs. 650/- by the witness and given to his son-in-law. When he again invited his son-in-law and the mother-in-law of his daughter, even then he had gifted some presents to them. The accused asked for Rs. 1,000/- with a ring for the deceased. The witness could pay only Rs. 500/- upon which the accused refused to take the deceased to the matrimonial home and went away. Later on, the accused came to fetch deceased. Subsequently, the motherin-law of the deceased, again, demanded the balance dowry amount of Rs. 10,000/-, which he could not pay. His daughter, after the Ramzan festival, had informed him that the accused persons were harassing her and were even beating and abusing her. All three accused used to beat her for the remaining amount of dowry. On 15th February, 2003, a boy had come to him and told him that his daughter had died by hanging herself, whereupon he went to the house of the accused and found that his daughter was hanged to a wooden beam with a saree and she was dead. The saree was removed, she was taken to the hospital where she was reported to have ‘brought dead’. The statement of this witness i.e. LW-1 is corroborated by LW-3 and LW-7.

9. It is stated by LW-3 that she knew all the accused persons as she was residing in the house of the accused and the deceased. According to this witness also, in the beginning they were happy, however after some time, she used to hear some quarrel between the deceased and the accused persons. Accused No. 2, Pathan Nazeer Abi had given her some amount and asked her to go and bring the soaps. After bringing the soaps, she went to the house of the accused persons and found that the accused was absent and the deceased was hanging on one side of the room. After seeing this, she raised cries and people came to the scene. LW-4, Pathan Inayatullah Khan, the grandson of LW-3, went to the house of the parents of the deceased and informed them about the unfortunate incident.

10. LW-7 stated on oath that he was present at the time of giving of dowry to the accused by the family of the deceased. He confirmed the fact that Rs. 15,000/- was given at the time of marriage and Rs. 10,000/- was to be given within some time, which the father of the deceased failed to provide. According to him, the accused persons used to harass the deceased primarily for non-payment of the amount of dowry, as a result of which, she was forced to commit suicide.

11. In fact, there is no dispute to the fact that the deceased died of hanging. Dr. M. Madhusudana Reddy, LW-13 who was the Associate Professor in Forensic Medicine at Guntur Medical College, performed the post-mortem over the body of the deceased. In the medical report, LW13, he noticed “Oblique ligature mark of 17 x 2.5 cm present over front and left sides of neck” as well as noticed “Abrasion 1.5 x 1 cm present over lower part of middle of chin.” Injuries were found to be antemortem in nature, and the cause of death was stated to be asphyxia, as a result of hanging.

12. LW-14 is a witness to the seizure of the body and she noticed injuries on the body of the deceased. From the above evidence, it is clear that the dowry demands were being raised by the accused persons persistently from the family of the deceased and for that they even harassed the deceased, by beating and abusing her. She had informed her parents of the ill-treatment and the cruelty inflicted on her for non-giving of dowry.

13. The period intervening between the marriage and the death of the deceased is very small. They were married in the year 2002 and she committed suicide by hanging on 15th February, 2003. The witnesses, including LW-1 have stated that for the first few months they were happy, but thereafter, there were quarrels between the accused and the deceased. Accused Pathan Hussain Basha, when he had gone to the parental house of the deceased, demanded different items like fan, ring and Rs. 1,000/- in cash, and the balance of the agreed dowry amount. Since, these demands were not satisfied instantaneously, he even left the deceased at her parental house. At this stage, it will be appropriate for us to examine as to what are the ingredients of an offence punishable under Section 304B of the IPC. In the case of Biswajit Halder alias Babu Halder and Others v. State of W.B. [(2008) 1 SCC 202], the Court stated the ingredients of this provision as follows:-

“10. The basic ingredients to attract the provisions of Section 304-B are as follows:
(1) the death of a woman should be caused by burns or fatal injury or otherwise than under normal circumstances;
(2) such death should have occurred within seven years of her marriage;
(3) she must have been subjected to cruelty or harassment by her husband or any relative of her husband; and
(4) such cruelty or harassment should be for or in connection with demand for dowry.

11. Alongside insertion of Section 304-B in IPC, the legislature also introduced Section 113-B of the Evidence Act, which lays down when the question as to whether a person has committed the dowry death of a woman and it is shown that soon before her death such woman had been subjected by such person to cruelty or harassment for, or in connection with, any demand for dowry, the court shall presume that such person had caused the dowry death.

12. Explanation appended to Section 113-B lays down that:
“For the purpose of this section, ‘dowry death’ shall have the same meaning as in Section 304-B of Indian Penal Code.”

13. If Section 304-B IPC is read together with Section 113-B of the Evidence Act, a comprehensive picture emerges that if a married woman dies in unnatural circumstances at her matrimonial home within 7 years from her marriage and there are allegations of cruelty or harassment upon such married woman for or in connection with demand of dowry by the husband or relatives of the husband, the case would squarely come under “dowry death” and there shall be a presumption against the husband and the relatives.”

14. Besides examining the ingredients of the provision, it would also be necessary for us to examine the meaning and connotation of the expressions ‘dowry death’, ‘soon before her death’ and ‘in connection with, any demand for dowry’ as appearing in the said section. Amongst others, lapse of time between the date of marriage and the date of death is also a relevant consideration for the Court while examining whether the essential ingredients of the provision are satisfied or not in a given case. In the case of Ashok Kumar v. State of Haryana [(2010) 12 SCC 350], this Court explained these terms in some elucidation and the effect of the deeming fiction appearing in the section, as follows:-

“11. The appellant was charged with an offence under Section 304-B of the Code. This penal section clearly spells out the basic ingredients as well as the matters which are required to be construed strictly and with significance to the cases where death is caused by burns, bodily injury or the death occurring otherwise than under normal circumstances, in any manner, within seven years of a marriage. It is the first criteria which the prosecution must prove. Secondly, that “soon before her death” she had been subjected to cruelty or harassment by the husband or any of the relatives of the husband for, or in connection with, any demand for dowry then such a death shall be called “dowry death” and the husband or the relative, as the case may be, will be deemed to have caused such a death. The Explanation to this section requires that the expression “dowry” shall have the same meaning as in Section 2 of the Act.

12. The definition of “dowry” under Section 2 of the Act reads as under:
“2. Definition of dowry.—In this Act, ‘dowry’ means any property or valuable security given or agreed to be given either directly or indirectly—
(a) by one party to a marriage to the other party to the marriage; or
(b) by the parents of either party to a marriage or by any other person, to either party to the marriage or to any other person, at or before or any time after the marriage in connection with the marriage of the said parties, but does not include dower or mahr in the case of persons to whom the Muslim Personal Law (Shariat) applies.
* * *
Explanation II.—The expression ‘valuable security’ has the same meaning as in Section 30 of the Penal Code (45 of 1860).”

13. From the above definition it is clear that, “dowry” means any property or valuable security given or agreed to be given either directly or indirectly by one party to another, by parents of either party to each other or any other person at, before, or at any time after the marriage and in connection with the marriage of the said parties but does not include dower or mahr under the Muslim Personal Law. All the expressions used under this section are of a very wide magnitude.

14. The expressions “or any time after marriage” and “in connection with the marriage of the said parties” were introduced by the amending Act 63 of 1984 and Act 43 of 1986 with effect from 2-10- 1985 and 19-11-1986 respectively. These amendments appear to have been made with the intention to cover all demands at the time, before and even after the marriage so far they were in connection with the marriage of the said parties. This clearly shows the intent of the legislature that these expressions are of wide meaning and scope. The expression “in connection with the marriage” cannot be given a restricted or a narrower meaning. The expression “in connection with the marriage” even in common parlance and on its plain language has to be understood generally. The object being that everything, which is offending at any time i.e. at, before or after the marriage, would be covered under this definition, but the demand of dowry has to be “in connection with the marriage” and not so customary that it would not attract, on the face of it, the provisions of this section.

15. At this stage, it will be appropriate to refer to certain examples showing what has and has not been treated by the courts as “dowry”. This Court, in Ran Singh v. State of Haryana, (2008) 4 SCC 700 held that the payments which are customary payments, for example, given at the time of birth of a child or other ceremonies as are prevalent in the society or families to the marriage, would not be covered under the expression “dowry”.

16. Again, in Satvir Singh v. State of Punjab, (2001)8 SCC 633 this Court held that the word “dowry” should be any property or valuable given or agreed to be given in connection with the marriage. The customary payments in connection with birth of a child or other ceremonies are not covered within the ambit of the word “dowry”.

17. This Court, in Madhu Sudan Malhotra v. Kishore Chand Bhandari, 1988 Supp. SCC 424 held that furnishing of a list of ornaments and other household articles such as refrigerator, furniture and electrical appliances, etc. to the parents or guardians of the bride, at the time of settlement of the marriage, prima facie amounts to demand of dowry within the meaning of Section 2 of the Act. The definition of “dowry” is not restricted to agreement or demand for payment of dowry before and at the time of marriage but even include subsequent demands, was the dictum of this Court in State of A.P. v. Raj Gopal Asawa, (2004)4 SCC 470.

18. The courts have also taken the view that where the husband had demanded a specific sum from his father-in-law and upon not being given, harassed and tortured the wife and after some days she died, such cases would clearly fall within the definition of “dowry” under the Act. Section 4 of the Act is the penal section and demanding a “dowry”, as defined under Section 2 of the Act, is punishable under this section. As already noticed, we need not deliberate on this aspect, as the accused before us has neither been charged nor punished for that offence. We have examined the provisions of Section 2 of the Act in a very limited sphere to deal with the contentions raised in regard to the applicability of the provisions of Section 304-B of the Code.

19. We have already referred to the provisions of Section 304-B of the Code and the most significant expression used in the section is “soon before her death”. In our view, the expression “soon before her death” cannot be given a restricted or a narrower meaning. They must be understood in their plain language and with reference to their meaning in common parlance. These are the provisions relating to human behaviour and, therefore, cannot be given such a narrower meaning, which would defeat the very purpose of the provisions of the Act. Of course, these are penal provisions and must receive strict construction. But, even the rule of strict construction requires that the provisions have to be read in conjunction with other relevant provisions and scheme of the Act. Further, the interpretation given should be one which would avoid absurd results on the one hand and would further the object and cause of the law so enacted on the other.

20. We are of the considered view that the concept of reasonable time is the best criteria to be applied for appreciation and examination of such cases. This Court in Tarsem Singh v. State of Punjab, (2008) 16 SCC 155 held that the legislative object in providing such a radius of time by employing the words “soon before her death” is to emphasise the idea that her death should, in all probabilities, has been the aftermath of such cruelty or harassment. In other words, there should be a reasonable, if not direct, nexus between her death and the dowryrelated cruelty or harassment inflicted on her.

21. Similar view was expressed by this Court in Yashoda v. State of M.P, (2004)3 SCC 98 where this Court stated that determination of the period would depend on the facts and circumstances of a given case. However, the expression would normally imply that there has to be reasonable time gap between t he cruelty inflicted and the death in question. If this is so, the legislature in its wisdom would have specified any period which would attract the provisions of this section. However, there must be existence of proximate link between the acts of cruelty along with the demand of dowry and the death of the victim. For want of any specific period, the concept of reasonable period would be applicable. Thus, the cruelty, harassment and demand of dowry should not be so ancient, whereafter, the couple and the family members have lived happily and that it would result in abuse of the said protection. Such demand or harassment may not strictly and squarely fall within the scope of these provisions unless definite evidence was led to show to the contrary. These matters, of course, will have to be examined on the facts and circumstances of a given case.

22. The cruelty and harassment by the husband or any relative could be directly relatable to or in connection with, any demand for dowry. The expression “demand for dowry” will have to be construed ejusdem generis to the word immediately preceding this expression. Similarly, “in connection with the marriage” is an expression which has to be given a wider connotation. It is of some significance that these expressions should be given appropriate meaning to avoid undue harassment or advantage to either of the parties. These are penal provisions but ultimately these are the social legislations, intended to control offences relating to the society as a whole. Dowry is something which existed in our country for a considerable time and the legislature in its wisdom considered it appropriate to enact the law relating to dowry prohibition so as to ensure that any party to the marriage is not harassed or treated with cruelty for satisfaction of demands in consideration and for subsistence of the marriage.

23. The Court cannot ignore one of the cardinal principles of criminal jurisprudence that a suspect in the Indian law is entitled to the protection of Article 20 of the Constitution of India as well as has a presumption of innocence in his favour. In other words, the rule of law requires a person to be innocent till proved guilty. The concept of deeming fiction is hardly applicable to the criminal jurisprudence. In contradistinction to this aspect, the legislature has applied the concept of deeming fiction to the provisions of Section 304-B. Where other ingredients of Section 304-B are satisfied, in that event, the husband or all relatives shall be deemed to have caused her death. In other words, the offence shall be deemed to have been committed by fiction of law. Once the prosecution proves its case with regard to the basic ingredients of Section 304-B, the Court will presume by deemed fiction of law that the husband or the relatives complained of, has caused her death. Such a presumption can be drawn by the Court keeping in view the evidence produced by the prosecution in support of the substantive charge under Section 304-B of the Code.

15. Applying these principles to the facts of the present case, it is clear that the ingredients of Section 304B read with Section 498A IPC are completely satisfied in the present case. By a deeming fiction in law, the onus shifts on to the accused to prove as to how the deceased died. It is for the accused to show that the death of the deceased did not result from any cruelty or demand of dowry by the accused persons. The accused did not care to explain as to how the death of his wife occurred. Denial cannot be treated to be the discharge of onus. Onus has to be discharged by leading proper and cogent evidence. It was expected of the accused to explain as to how and why his wife died, as well as his conduct immediately prior and subsequent to the death of the deceased. Maintaining silence cannot be equated to discharge of onus by the accused. In the present case, the prosecution by reliable and cogent evidence has established the guilt of the accused. There being no rebuttal thereto, there is no occasion to interfere in the judgments of the courts under appeal.

16. The High Court acquitted Pathan Khadar Basha, the fatherin-law of the deceased, as there was no direct evidence against him. His acquittal has not been challenged by the State before us, thus, we are not called upon to discuss this aspect of the matter.

17. Accused Pathan Hussain Basha and Pathan Nazeer Abi have rightly been found guilty of the offence by the courts. While we see no reason to differ with the concurrent findings recorded by the trial court and the High Court, we do see some substance in the argument raised on behalf of the appellants that keeping in view the prosecution evidence, the attendant circumstances, the age of the accused and the fact that they have already being in jail for a considerable period, the Court may take lenient view as far as the quantum of sentence is concerned. The offences having been proved against the accused and keeping in view the attendant circumstances, we are of the considered view that ends of justice would be met, if the punishment awarded to the appellants is reduced.

18. Consequently, we award ten years Rigorous Imprisonment to the appellants. The appeals are partially accepted to the extent afore-indicated.

…………….…………………………….J.
(Swatanter Kumar)

…………….…………………………….J.
(Fakkir Mohamed Ibrahim Kalifulla)

New Delhi,
August 16, 2012

The post Pathan Hussain Basha Vs. State of A.P. appeared first on B&B Associates LLP.

Gian Singh …Petitioner
Versus
State of Punjab & Another …Respondents
WITH
SPECIAL LEAVE PETITION (CRL.) NO. 6138 OF 2006
SPECIAL LEAVE PETITION (CRL.) NO. 5203 OF 2011
SPECIAL LEAVE PETITION (CRL.) NO. 259 OF 2011
SPECIAL LEAVE PETITION (CRL.) NO. 5921 OF 2009
SPECIAL LEAVE PETITION (CRL.) NO. 7148 OF 2009
SPECIAL LEAVE PETITION (CRL.) NO. 6324 OF 2009
CRIMINAL APPEAL NOS. 2107-2125 OF 2011

JUDGEMENT

R.M. LODHA, J.
When the special leave petition in Gian Singh v. State of Punjab and another came up for hearing, a two-Judge Bench (Markandey Katju and Gyan Sudha Misra, JJ.) doubted the correctness of the decisions of this Court in B.S. Joshi and others v. State of Haryana and another[1], Nikhil Merchant v. Central Bureau of Investigation and another[2] and Manoj Sharma v. State and others[3] and referred the matter to a larger Bench. The reference order reads as follows :

“Heard learned counsel for the petitioner.

The petitioner has been convicted under Section 420 and Section 120B, IPC by the learned Magistrate. He filed an appeal challenging his conviction before the learned Sessions Judge.

While his appeal was pending, he filed an application before the learned Sessions Judge for compounding the offence, which, according to the learned counsel, was directed to be taken up along with the main appeal. Thereafter, the petitioner filed a petition under Section 482, Cr.P.C. for quashing of the FIR on the ground of compounding the offence. That petition under Section 482 Cr.P.C. has been dismissed by the High Court by its impugned order. Hence, this petition has been filed in this Court.

Learned counsel for the petitioner has relied on three decisions of this Court, all by two Judge Benches. They are B.S.

Joshi vs. State of Haryana (2003) 4 SCC 675; Nikhil Merchant vs. Central Bureau of Investigation and Another (2008) 9 SCC 677;

and Manoj Sharma vs. State and Others (2008) 16 SCC 1. In these decisions, this Court has indirectly permitted compounding of non-compoundable offences. One of us, Hon’ble Mr. Justice Markandey Katju, was a member to the last two decisions.

Section 320, Cr.P.C. mentions certain offences as compoundable, certain other offences as compoundable with the permission of the Court, and the other offences as non- compoundable vide Section 320(7).

Section 420, IPC, one of the counts on which the petitioner has been convicted, no doubt, is a compoundable offence with permission of the Court in view of Section 320, Cr.P.C. but Section 120B IPC, the other count on which the petitioner has been convicted, is a non-compoundable offence.

Section 120B (Criminal conspiracy) is a separate offence and since it is a non-compoundable offence, we cannot permit it to be compounded.

The Court cannot amend the statute and must maintain judicial restraint in this connection. The Courts should not try to take over the function of the Parliament or executive. It is the legislature alone which can amend Section 320 Cr.P.C.

We are of the opinion that the above three decisions require to be re-considered as, in our opinion, something which cannot be done directly cannot be done indirectly. In our, prima facie, opinion, non-compoundable offences cannot be permitted to be compounded by the Court, whether directly or indirectly.

Hence, the above three decisions do not appear to us to be correctly decided.

It is true that in the last two decisions, one of us, Hon’ble Mr. Justice Markandey Katju, was a member but a Judge should always be open to correct his mistakes. We feel that these decisions require re-consideration and hence we direct that this matter be placed before a larger Bench to reconsider the correctness of the aforesaid three decisions.

Let the papers of this case be placed before Hon’ble Chief Justice of India for constituting a larger Bench.-

2. This is how these matters have come up for consideration before us.

3. Two provisions of the Code of Criminal Procedure, 1973 (for short, ‘Code’) which are vital for consideration of the issue referred to the larger Bench are Sections 320 and 482. Section 320 of the Code provides for compounding of certain offences punishable under the Indian Penal Code, 1860 (for short, ‘IPC’). It reads as follows :

“S. 320. Compounding of offences.-”(1) The offences punishable under the sections of the Indian Penal Code, (45 of 1860) specified in the first two columns of the Table next following may be compounded by the persons mentioned in the third column of that Table :

(2) The offences punishable under the sections of the Indian Penal Code (45 of 1860) specified in the first two columns of the table next following may, with the permission of the Court before which any prosecution for such offence is pending, be compounded by the persons mentioned in the third column of that Table:–

(3) When an offence is compoundable under this section, the abatement of such offence or an attempt to commit such offence (when such attempt is itself an offence) or where the accused is liable under section 34 or 149 of the Indian Penal Code (45 of 1860) may be compounded in like manner.

(4) (a) When the person who would otherwise be competent to compound an offence under this section is under the age of eighteen years or is an idiot or a lunatic, any person competent to contract on his behalf, may, with the permission of the Court, compound such offence.

(b) When the person who would otherwise be competent to compound an offence under this section is dead, the legal representative, as defined in the Code of Civil Procedure, 1908 of such person may, with the consent of the Court, compound such offence.

(5) When the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or, as the case may be, before which the appeal is to be heard.

(6) A High Court or Court of Session acting in the exercise of its powers of revision under section 401 may allow any person to compound any offence which such person is competent to compound under this section.

(7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence.

(8) The composition of an offence under this section shall have the effect of an acquittal of the accused with whom the offence has been compounded.

(9) No offence shall be compounded except as provided by this section.-

4. Section 482 saves the inherent power of the High Court and it reads as follows :

“S. 482. Saving of inherent power of High Court.-”Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.-

5. In B.S. Joshi1 , the undisputed facts were these : the husband was one of the appellants while the wife was respondent no. 2 in the appeal before this Court. They were married on 21.7.1999 and were living separately since 15.7.2000. An FIR was registered under Sections 498-A/323 and 406, IPC at the instance of the wife on 2.1.2002. When the criminal case registered at the instance of the wife was pending, the dispute between the husband and wife and their family members was settled.

It appears that the wife filed an affidavit that her disputes with the husband and the other members of his family had been finally settled and she and her husband had agreed for mutual divorce. Based on the said affidavit, the matter was taken to the High Court by both the parties and they jointly prayed for quashing the criminal proceedings launched against the husband and his family members on the basis of the FIR registered at the wife’s instance under Sections 498-A and 406 IPC. The High Court dismissed the petition for quashing the FIR as in its view the offences under Sections 498-A and 406, IPC were non-compoundable and the inherent powers under Section 482 of the Code could not be invoked to by-pass Section 320 of the Code. It is from this order that the matter reached this Court. This Court held that the High Court in exercise of its inherent powers could quash criminal proceedings or FIR or complaint and Section 320 of the Code did not limit or affect the powers under Section 482 of the Code. The Court in paragraphs 14 and 15 (Pg. 682) of the Report held as under :

“14. There is no doubt that the object of introducing Chapter XX- A containing Section 498-A in the Indian Penal Code was to prevent torture to a woman by her husband or by relatives of her husband. Section 498-A was added with a view to punishing a husband and his relatives who harass or torture the wife to coerce her or her relatives to satisfy unlawful demands of dowry. The hypertechnical view would be counterproductive and would act against interests of women and against the object for which this provision was added. There is every likelihood that non-exercise of inherent power to quash the proceedings to meet the ends of justice would prevent women from settling earlier.

That is not the object of Chapter XX-A of the Indian Penal Code.

15. In view of the above discussion, we hold that the High Court in exercise of its inherent powers can quash criminal proceedings or FIR or complaint and Section 320 of the Code does not limit or affect the powers under Section 482 of the Code.-

6. In Nikhil Merchant2, a company, M/s. Neemuch Emballage Ltd., Mumbai was granted financial assistance by Andhra Bank under various facilities. On account of default in repayment of loans, the bank filed a suit for recovery of the amount payable by the borrower company. The bank also filed a complaint against the company, its Managing Director and the officials of Andhra Bank for diverse offences, namely, Section 120-B read with Sections 420, 467, 468, 471 of the IPC read with Sections 5(2) and 5(1)(d) of the Prevention of Corruption Act, 1947 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The suit for recovery filed by the bank against the company and the Managing Director of the Company was compromised. The suit was compromised upon the defendants agreeing to pay the amounts due as per the schedule mentioned in the consent terms. Clause 11 of the consent terms read, “agreed that save as aforesaid neither party has any claim against the other and parties do hereby withdraw all the allegations and counter-allegations made against each other-. Based on clause 11 of the consent terms, the Managing Director of the Company, the appellant who was accused no. 3 in charge sheet filed by CBI, made application for discharge from the criminal complaint. The said application was rejected by the Special Judge (CBI), Greater Bombay, which came to be challenged before the Bombay High Court. The contention before the High Court was that since the subject matter of the dispute had been settled between the appellant and the bank, it would be unreasonable to continue with the criminal proceedings. The High Court rejected the application for discharge from the criminal cases. It is from this order that the matter reached this Court by way of special leave. The Court having regard to the facts of the case and the earlier decision of this Court in B.S. Joshi1, set aside the order of the High Court and quashed the criminal proceedings by consideration of the matter thus:

“28. The basic intention of the accused in this case appears to have been to misrepresent the financial status of the Company, M/s Neemuch Emballage Ltd., Mumbai, in order to avail of the credit facilities to an extent to which the Company was not entitled. In other words, the main intention of the Company and its officers was to cheat the Bank and induce it to part with additional amounts of credit to which the Company was not otherwise entitled.

29. Despite the ingredients and the factual content of an offence of cheating punishable under Section 420 IPC, the same has been made compoundable under sub-section (2) of Section 320 CrPC with the leave of the court. Of course, forgery has not been included as one of the compoundable offences, but it is in such cases that the principle enunciated in B.S. Joshi case becomes relevant.

30. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised?

31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi case and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise.-

7. In Manoj Sharma3, the Court was concerned with the question whether an F.I.R. under Sections 420/468/471/34/120-B IPC can be quashed either under Section 482 of the Code or under Article 226 of the Constitution when the accused and the complainant have compromised and settled the matter between themselves. Altamas Kabir, J., who delivered the lead judgment referred to B.S. Joshi1 and the submission made on behalf of the State that B.S. Joshi1 required a second look and held that the Court was not inclined to accept the contention made on behalf of the State that the decision in B.S. Joshi1 required reconsideration, at least not in the facts of the case. It was held that what was decided in B.S. Joshi1 was the power and authority of the High Court to exercise jurisdiction under Section 482 of the Code or under Article 226 of the Constitution to quash offences which were not compoundable. The law stated in B.S. Joshi1 simply indicated the powers of the High Court to quash any criminal proceeding or first information report or complaint whether the offences were compoundable or not. Altamas Kabir, J. further observed, “The ultimate exercise of discretion under Section 482 CrPC or under Article 226 of the Constitution is with the court which has to exercise such jurisdiction in the facts of each case. It has been explained that the said power is in no way limited by the provisions of Section 320 CrPC. We are unable to disagree with such statement of law. In any event, in this case, we are only required to consider whether the High Court had exercised its jurisdiction under Section 482 CrPC legally and correctly.- Then in paragraphs 8 and 9 (pg. 5) of the Report, Altamas Kabir, J., inter alia, held as under :

“8. …..Once the complainant decided not to pursue the matter further, the High Court could have taken a more pragmatic view of the matter. We do not suggest that while exercising its powers under Article 226 of the Constitution the High Court could not have refused to quash the first information report, but what we do say is that the matter could have been considered by the High Court with greater pragmatism in the facts of the case.

9. ……In the facts of this case we are of the view that continuing with the criminal proceedings would be an exercise in futility………-

8. Markandey Katju, J. although concurred with the view of Altamas Kabir, J. that criminal proceedings in that case deserved to be quashed but observed that question may have to be decided in some subsequent decision or decisions (preferably by a larger Bench) as to which non-compoundable cases can be quashed under Section 482 of the Code or Article 226 of the Constitution on the basis that the parties have entered into compromise. In paragraphs 27 and 28 (pg. 10) of the report he held as under:

“27. There can be no doubt that a case under Section 302 IPC or other serious offences like those under Sections 395, 307 or 304- B cannot be compounded and hence proceedings in those provisions cannot be quashed by the High Court in exercise of its power under Section 482 CrPC or in writ jurisdiction on the basis of compromise. However, in some other cases (like those akin to a civil nature), the proceedings can be quashed by the High Court if the parties have come to an amicable settlement even though the provisions are not compoundable. Where a line is to be drawn will have to be decided in some later decisions of this Court, preferably by a larger Bench (so as to make it more authoritative). Some guidelines will have to be evolved in this connection and the matter cannot be left at the sole unguided discretion of Judges, otherwise there may be conflicting decisions and judicial anarchy. A judicial discretion has to be exercised on some objective guiding principles and criteria, and not on the whims and fancies of individual Judges. Discretion, after all, cannot be the Chancellor’s foot.

28. I am expressing this opinion because Shri B.B. Singh, learned counsel for the respondent has rightly expressed his concern that the decision in B.S. Joshi case should not be understood to have meant that Judges can quash any kind of criminal case merely because there has been a compromise between the parties. After all, a crime is an offence against society, and not merely against a private individual.-

9. Dr. Abhishek Manu Singhvi, learned senior counsel for the petitioner in SLP(Crl.) No. 6324 of 2009 submitted that the inherent power of the High Court to quash a non-compoundable offence was not circumscribed by any of the provisions of the Code, including Section 320. Section 482 is a declaration of the inherent power pre-existing in the High Court and so long as the exercise of the inherent power falls within the parameters of Section 482, it shall have an overriding effect over any of the provisions of the Code. He, thus, submitted that in exercise of its inherent powers under Section 482, the High Court may permit compounding of a non- compoundable offence provided that in doing so it satisfies the conditions mentioned therein. Learned senior counsel would submit that the power to quash the criminal proceedings under Section 482 of the Code exists even in non-compoundable offence but its actual exercise will depend on facts of a particular case. He submitted that some or all of the following tests may be relevant to decide whether to quash or not to quash the criminal proceedings in a given case; (a) the nature and gravity of case; (b) does the dispute reflect overwhelming and pre-dominantly civil flavour; (c) would the quashing involve settlement of entire or almost the entire dispute; (d) the compromise/settlement between parties and/or other facts and the circumstances render possibility of conviction remote and bleak;

(e) not to quash would cause extreme injustice and would not serve ends of justice and (f) not to quash would result in abuse of process of court.

10. Shri P.P. Rao, learned senior counsel for the petitioner in Special Leave Petition (Crl.) No. 5921 of 2009 submitted that Section 482 of the Code is complete answer to the reference made to the larger Bench.

He analysed Section 482 and Section 320 of the Code and submitted that Section 320 did not limit or affect the inherent powers of the High Court.

Notwithstanding Section 320, High Court can exercise its inherent power, inter alia, to prevent abuse of the process of any court or otherwise to secure the ends of justice. To secure the ends of justice is a wholesome and definite guideline. It requires formation of opinion by High Court on the basis of material on record as to whether the ends of justice would justify quashing of a particular criminal complaint, FIR or a proceeding.

When the Court exercises its inherent power under Section 482 in respect of offences which are not compoundable taking into account the fact that the accused and the complainant have settled their differences amicably, it cannot be viewed as permitting compounding of offence which is not compoundable.

11. Mr. P.P. Rao, learned senior counsel submitted that in cases of civil wrongs which also constitute criminal offences, the High Court may pass order under Section 482 once both parties jointly pray for dropping the criminal proceeding initiated by one of them to put an end to the dispute and restore peace between the parties.

12. Mr. V. Giri, learned senior counsel for the respondent (accused) in Special Leave Petition (Crl.) No. 6138 of 2006 submitted that the real question that needs to be considered by this Court in the reference is whether Section 320(9) of the Code creates a bar or limits or affects the inherent powers of the High Court under Section 482 of the Code. It was submitted that Section 320(9) does not create a bar or limit or affect the inherent powers of the High Court in the matter of quashing any criminal proceedings. Relying upon various decisions of this Court, it was submitted that it has been consistently held that the High Court has unfettered powers under Section 482 of the Code to secure the ends of justice and prevent abuse of the process of the Court. He also submitted that on compromise between the parties, the High Court in exercise of powers under Section 482 can quash the criminal proceedings, more so the matters arising from matrimonial dispute, property dispute, dispute between close relations, partners or business concerns which are predominantly of civil, financial or commercial nature.

13. Learned counsel for the petitioner in Special Leave Petition (Crl.) No. 8989 of 2010 submitted that the court should have positive view to quash the proceedings once the aggrieved party has compromised the matter with the wrong doer. It was submitted that if the court did not allow the quashing of FIR or complaint or criminal case where the parties settled their dispute amicably, it would encourage the parties to speak lie in the court and witnesses would become hostile and the criminal proceeding would not end in conviction. Learned counsel submitted that the court could also consider the two questions (1) can there be partial quashing of the FIR qua accused with whom the complainant/aggrieved party enters into compromise. (2) can the court quash the proceedings in the cases which have not arisen from the matrimonial or civil disputes but the offences are personal in nature like grievous hurt (S.326), attempt to murder (S.307), rape (S.376), trespassing (S.452) and kidnapping (S.364, 365) etc.

14. Mr. P. P. Malhotra, learned Additional Solicitor General referred to the scheme of the Code. He submitted that in any criminal case investigated by police on filing the report under Section 173 of the Code, the Magistrate, after applying his mind to the chargesheet and the documents accompanying the same, if takes cognizance of the offences and summons the accused and/or frames charges and in certain grave and serious offences, commits the accused to be tried by a court of Sessions and the Sessions Court after satisfying itself and after hearing the accused frames charges for the offences alleged to have been committed by him, the Code provides a remedy to accused to challenge the order taking cognizance or of framing charges. Similar situation may follow in a complaint case.

Learned Additional Solicitor General submitted that power under Section 482 of the Code cannot be invoked in the non-compoundable offences since Section 320(9) expressly prohibits the compounding of such offences.

Quashing of criminal proceedings of the offences which are non-compoundable would negative the effect of the order of framing charges or taking cognizance and therefore quashing would amount to taking away the order of cognizance passed by the Magistrate.

15. Learned Additional Solicitor General would submit that when the Court takes cognizance or frames charges, it is in accordance with the procedure established by law. Once the court takes cognizance or frames charges, the method to challenge such order is by way of appropriate application to the superior court under the provisions of the Code.

16. If power under Section 482 is exercised, in relation to non- compoundable offences, it will amount to what is prohibited by law and such cases cannot be brought within the parameters ‘to secure ends of justice’.

Any order in violation and breach of statutory provisions, learned Additional Solicitor General would submit, would be a case against the ends of justice. He heavily relied upon a Constitution Bench decision of this Court in Central Bureau of Investigation and others v. Keshub Mahindra and others[4] wherein this Court held, ‘no decision by any court, this Court not excluded, can be read in a manner as to nullify the express provisions of an Act or the Code.’ With reference to B.S. Joshi1, learned Additional Solicitor General submitted that that was a case where the dispute was between the husband and wife and the court felt that if the proceedings were not quashed, it would prevent the woman from settling in life and the wife had already filed an affidavit that there were temperamental differences and she was not supporting continuation of criminal proceedings. As regards, Nikhil Merchant2, learned Additional Solicitor General submitted that this Court in State of Madhya Pradesh v. Rameshwar and others[5] held that the said decision was a decision under Article 142 of the Constitution. With regard to Manoj Sharma3, learned Additional Solicitor General referred to the observations made by Markandey Katju, J.

in paragraphs 24 and 28 of the Report.

17. Learned Additional Solicitor General submitted that the High Court has no power to quash criminal proceedings in regard to offences in which a cognizance has been taken by the Magistrate merely because there has been settlement between the victim and the offender because the criminal offence is against the society.

18. More than 65 years back, in Emperor v. Khwaja Nazir Ahmed[6], it was observed by the Privy Council that Section 561A (corresponding to Section 482 of the Code) had not given increased powers to the Court which it did not possess before that section was enacted. It was observed, `The section gives no new powers, it only provides that those which the court already inherently possess shall be preserved and is inserted lest, as their Lordships think, it should be considered that the only powers possessed by the court are those expressly conferred by the Criminal Procedure Code and that no inherent power had survived the passing of the Code’.

19. In Khushi Ram v. Hashim and others[7], this Court held as under :

“It is unnecessary to emphasise that the inherent power of the High Court under Section 561A cannot be invoked in regard to matters which are directly covered by the specific provisions of the Code…-

20. The above view of Privy Council in Khwaja Nazir Ahmed6 and another decision in Lala Jairam Das & Ors. v. Emperor[8] was expressly accepted by this Court in State of Uttar Pradesh. v. Mohammad Naim[9] .

The Court said :

“7. It is now well settled that the section confers no new powers on the High Court. It merely safeguards all existing inherent powers possessed by a High Court necessary (among other purposes) to secure the ends of justice. The section provides that those powers which the court inherently possesses shall be preserved lest it be considered that the only powers possessed by the court are those expressly conferred by the Code and that no inherent powers had survived the passing of the Code………..-

21. In Pampathy v. State of Mysore[10], a three-Judge Bench of this Court stated as follows :

” The inherent power of the High Court mentioned in Section 561A, Criminal Procedure Code can be exercised only for either of the three purposes specifically mentioned in the section. The inherent power cannot be invoked in respect of any matter covered by the specific provisions of the Code. It cannot also be invoked if its exercise would be inconsistent with any of the specific provisions of the Code. It is only if the matter in question is not covered by any specific provisions of the Code that s. 561A can come into operation…….-

22. In State of Karnataka v. L. Muniswamy and others[11], a three- Judge Bench of this Court referred to Section 482 of the Code and in paragraph 7 (pg. 703) of the Report held as under :

“7. …….. In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court’s inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice between the State and its subjects, it would be impossible to appreciate the width and contours of that salient jurisdiction.-

23. The Court then observed that the considerations justifying the exercise of inherent powers for securing the ends of justice naturally vary from case to case and a jurisdiction as wholesome as the one conferred by Section 482 ought not to be encased within the straitjacket of a rigid formula.

24. A three-Judge Bench of this Court in Madhu Limaye v. The State of Maharashtra[12], dealt with the invocation of inherent power under Section 482 for quashing interlocutory order even though revision under Section 397(2) of the Code was prohibited. The Court noticed the principles in relation to the exercise of the inherent power of the High Court as under :

“(1) That the power is not to be resorted to if there is a specific provision in the Code for the redress of the grievance of the aggrieved party;

(2) That it should be exercised very sparingly to prevent abuse of process of any Court or otherwise to secure the ends of justice;

(3) That it should not be exercised as against the express bar of law engrafted in any other provision of the Code.-

25. In Raj Kapoor and others v. State and others[13], the Court explained the width and amplitude of the inherent power of the High Court under Section 482 vis-à-vis revisional power under Section 397 as follows:

“10. …….The opening words of Section 482 contradict this contention because nothing of the Code, not even Section 397, can affect the amplitude of the inherent power preserved in so many terms by the language of Section 482. Even so, a general principle pervades this branch of law when a specific provision is made: easy resort to inherent power is not right except under compelling circumstances. Not that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code. In Madhu Limaye’s case this Court has exhaustively and, if I may say so with great respect, correctly discussed and delineated the law beyond mistake. While it is true that Section 482 is pervasive it should not subvert legal interdicts written into the same Code, such, for instance, in Section 397(2). Apparent conflict may arise in some situations between the two provisions and a happy solution “would be to say that the bar provided in sub-section (2) of Section 397 operates only in exercise of the revisional power of the High Court, meaning thereby that the High Court will have no power of revision in relation to any interlocutory order. Then in accordance with one or the other principles enunciated above, the inherent power will come into play, there being no other provision in the Code for the redress of the grievance of the aggrieved party. But then, if the order assailed is purely of an interlocutory character which could be corrected in exercise of the revisional power of the High Court under the 1898 Code, the High Court will refuse to exercise its inherent power. But in case the impugned order clearly brings about a situation which is an abuse of the process of the Court or for the purpose of securing the ends of justice interference by the High Court is absolutely necessary, then nothing contained in Section 397(2) can limit or affect the exercise of the inherent power by the High Court. But such cases would be few and far between. The High Court must exercise the inherent power very sparingly. One such case would be the desirability of the quashing of a criminal proceeding initiated illegally, vexatiously or as being without jurisdiction-.

In short, there is no total ban on the exercise of inherent power where abuse of the process of the court or other extraordinary situation excites the court’s jurisdiction. The limitation is self-restraint, nothing more. The policy of the law is clear that interlocutory orders, pure and simple, should not be taken up to the High Court resulting in unnecessary litigation and delay. At the other extreme, final orders are clearly capable of being considered in exercise of inherent power, if glaring injustice stares the court in the face. In between is a tertium quid, as Untwalia, J. has pointed out as for example, where it is more than a purely interlocutory order and less than a final disposal. The present case falls under that category where the accused complain of harassment through the court’s process. Can we state that in this third category the inherent power can be exercised? In the words of Untwalia, J.: (SCC p. 556, para 10) “The answer is obvious that the bar will not operate to prevent the abuse of the process of the Court and/or to secure the ends of justice. The label of the petition filed by an aggrieved party is immaterial. The High Court can examine the matter in an appropriate case under its inherent powers. The present case undoubtedly falls for exercise of the power of the High Court in accordance with Section 482 of the 1973 Code, even assuming, although not accepting, that invoking the revisional power of the High Court is impermissible.- I am, therefore clear in my mind that the inherent power is not rebuffed in the case situation before us. Counsel on both sides, sensitively responding to our allergy for legalistics, rightly agreed that the fanatical insistence on the formal filing of a copy of the order under cessation need not take up this court’s time. Our conclusion concurs with the concession of counsel on both sides that merely because a copy of the order has not been produced, despite its presence in the records in the court, it is not possible for me to hold that the entire revisory power stands frustrated and the inherent power stultified.-

26. In Simrikhia v. Dolley Mukherjee and Chhabi Mukherjee and another[14], the Court considered the scope of Section 482 of the Code in a case where on dismissal of petition under Section 482, a second petition under Section 482 of the Code was made. The contention before this Court was that the second petition under Section 482 of the Code was not entertainable; the exercise of power under Section 482 on a second petition by the same party on the same ground virtually amounts to review of the earlier order and is contrary to the spirit of Section 362 of the Code and the High Court was in error in having quashed the proceedings by adopting that course. While accepting this argument, this Court held as follows :

“3. ……The inherent power under Section 482 is intended to prevent the abuse of the process of the court and to secure ends of justice. Such power cannot be exercised to do something which is expressly barred under the Code. If any consideration of the facts by way of review is not permissible under the Code and is expressly barred, it is not for the court to exercise its inherent power to reconsider the matter and record a conflicting decision. If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inherent powers in the prevailing circumstances and pass appropriate orders to secure the ends of justice or to prevent the abuse of the process of the court. Where there is no such changed circumstances and the decision has to be arrived at on the facts that existed as on the date of the earlier order, the exercise of the power to reconsider the same materials to arrive at different conclusion is in effect a review, which is expressly barred under Section 362.

5. Section 362 of the Code expressly provides that no court when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error save as otherwise provided by the Code.

Section 482 enables the High Court to make such order as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any court or otherwise to secure the ends of justice. The inherent powers, however, as much are controlled by principle and precedent as are its express powers by statute. If a matter is covered by an express letter of law, the court cannot give a go-by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction.

7. The inherent jurisdiction of the High Court cannot be invoked to override bar of review under Section 362. It is clearly stated in Sooraj Devi v. Pyare Lal, that the inherent power of the court cannot be exercised for doing that which is specifically prohibited by the Code. The law is therefore clear that the inherent power cannot be exercised for doing that which cannot be done on account of the bar under other provisions of the Code. The court is not empowered to review its own decision under the purported exercise of inherent power. We find that the impugned order in this case is in effect one reviewing the earlier order on a reconsideration of the same materials. The High Court has grievously erred in doing so. Even on merits, we do not find any compelling reasons to quash the proceedings at that stage.-

27. In Dharampal & Ors. v. Ramshri (Smt.) and others[15], this Court observed as follows :

“……It is now well settled that the inherent powers under Section 482 of the Code cannot be utilized for exercising powers which are expressly barred by the Code…….-

28. In Arun Shankar Shukla v. State of Uttar Pradesh and ors.[16] , a two-Judge Bench of this Court held as under :

“….It is true that under Section 482 of the Code, the High Court has inherent powers to make such orders as may be necessary to give effect to any order under the Code or to prevent the abuse of process of any court or otherwise to secure the ends of justice. But the expressions “abuse of the process of law- or “to secure the ends of justice- do not confer unlimited jurisdiction on the High Court and the alleged abuse of the process of law or the ends of justice could only be secured in accordance with law including procedural law and not otherwise.

Further, inherent powers are in the nature of extraordinary powers to be used sparingly for achieving the object mentioned in Section 482 of the Code in cases where there is no express provision empowering the High Court to achieve the said object.

It is well-neigh settled that inherent power is not to be invoked in respect of any matter covered by specific provisions of the Code or if its exercise would infringe any specific provision of the Code. In the present case, the High Court overlooked the procedural law which empowered the convicted accused to prefer statutory appeal against conviction of the offence. The High Court has intervened at an uncalled for stage and soft-pedalled the course of justice at a very crucial stage of the trial.-

29. In G. Sagar Suri and another v. State of U.P. and others[17], the Court was concerned with the order of the High Court whereby the application under Section 482 of the Code for quashing the criminal proceedings under Sections 406 and 420 of the IPC pending in the Court of Chief Judicial Magistrate, Ghaziabad was dismissed. In paragraph 8 (pg.

643) of the Report, the Court held as under:

“8. Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code.

Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.- 30. A three-Judge Bench of this Court in State of Karnataka v. M.

Devendrappa and another[18] restated what has been stated in earlier decisions that Section 482 does not confer any new powers on the High Court, it only saves the inherent power which the court possessed before the commencement of the Code. The Court went on to explain the exercise of inherent power by the High Court in paragraph 6 (Pg.94) of the Report as under :

“6. ………It envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognizes and preserves inherent powers of the High Courts. All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice……..- The Court in paragraph 9 (Pg. 96) further stated :

“9. ………the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage……-

31. In Central Bureau of Investigation v. A. Ravishankar Prasad and others[19], the Court observed in paragraphs 17,19,20 and 39 (Pgs. 356, 357 and 363) of the Report as follows :

“17. Undoubtedly, the High Court possesses inherent powers under Section 482 of the Code of Criminal Procedure. These inherent powers of the High Court are meant to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court.

19. This Court time and again has observed that the extraordinary power under Section 482 CrPC should be exercised sparingly and with great care and caution. The Court would be justified in exercising the power when it is imperative to exercise the power in order to prevent injustice. In order to understand the nature and scope of power under Section 482 CrPC it has become necessary to recapitulate the ratio of the decided cases.

20. Reference to the following cases would reveal that the Courts have consistently taken the view that they must use the court’s extraordinary power only to prevent injustice and secure the ends of justice. We have largely inherited the provisions of inherent powers from the English jurisprudence, therefore the principles decided by the English courts would be of relevance for us. It is generally agreed that the Crown Court has inherent power to protect its process from abuse. The English courts have also used inherent power to achieve the same objective.

39. Careful analysis of all these judgments clearly reveals that the exercise of inherent powers would entirely depend on the facts and circumstances of each case. The object of incorporating inherent powers in the Code is to prevent abuse of the process of the court or to secure ends of justice.- 32 In Devendra and others v. State of Uttar Pradesh and another[20], while dealing with the question whether a pure civil dispute can be subject matter of a criminal proceeding under Sections 420, 467, 468 and 469 IPC, a two-Judge Bench of this Court observed that the High Court ordinarily would exercise its jurisdiction under Section 482 of the Code if the allegations made in the First Information Report, even if given face value and taken to be correct in their entirety, do not make out any offence.

33. In Sushil Suri v. Central Bureau of Investigation and another[21], the Court considered the scope and ambit of the inherent jurisdiction of the High Court and made the following observations in para 16 (pg. 715) of the Report:

“16. Section 482 CrPC itself envisages three circumstances under which the inherent jurisdiction may be exercised by the High Court, namely, (i) to give effect to an order under CrPC; (ii) to prevent an abuse of the process of court; and (iii) to otherwise secure the ends of justice. It is trite that although the power possessed by the High Court under the said provision is very wide but it is not unbridled. It has to be exercised sparingly, carefully and cautiously, ex debito justitiae to do real and substantial justice for which alone the Court exists.

Nevertheless, it is neither feasible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction of the Court. Yet, in numerous cases, this Court has laid down certain broad principles which may be borne in mind while exercising jurisdiction under Section 482 CrPC.

Though it is emphasised that exercise of inherent powers would depend on the facts and circumstances of each case, but the common thread which runs through all the decisions on the subject is that the Court would be justified in invoking its inherent jurisdiction where the allegations made in the complaint or charge-sheet, as the case may be, taken at their face value and accepted in their entirety do not constitute the offence alleged.-

34. Besides B.S. Joshi1, Nikhil Merchant2 and Manoj Sharma3, there are other decisions of this Court where the scope of Section 320 vis-à-vis the inherent power of the High Court under Section 482 of the Code has come up for consideration.

35. In Madan Mohan Abbot v. State of Punjab[22], in the appeal before this Court which arose from an order of the High Court refusing to quash the FIR against the appellant lodged under Sections 379, 406, 409, 418, 506/34, IPC on account of compromise entered into between the complainant and the accused, in paragraphs 5 and 6 (pg. 584) of the Report, the Court held as under :

“5. It is on the basis of this compromise that the application was filed in the High Court for quashing of proceedings which has been dismissed by the impugned order. We notice from a reading of the FIR and the other documents on record that the dispute was purely a personal one between two contesting parties and that it arose out of extensive business dealings between them and that there was absolutely no public policy involved in the nature of the allegations made against the accused. We are, therefore, of the opinion that no useful purpose would be served in continuing with the proceedings in the light of the compromise and also in the light of the fact that the complainant has on 11-1-2004 passed away and the possibility of a conviction being recorded has thus to be ruled out.

6. We need to emphasise that it is perhaps advisable that in disputes where the question involved is of a purely personal nature, the court should ordinarily accept the terms of the compromise even in criminal proceedings as keeping the matter alive with no possibility of a result in favour of the prosecution is a luxury which the courts, grossly overburdened as they are, cannot afford and that the time so saved can be utilised in deciding more effective and meaningful litigation.

This is a common sense approach to the matter based on ground of realities and bereft of the technicalities of the law.-

36. In Ishwar Singh v. State of Madhya Pradesh[23], the Court was concerned with a case where the accused -“ appellant was convicted and sentenced by the Additional Sessions Judge for an offence punishable under Section 307, IPC. The High Court dismissed the appeal from the judgment and conviction. In the appeal, by special leave, the injured -“ complainant was ordered to be joined as party as it was stated by the counsel for the appellant that mutual compromise has been arrived at between the parties, i.e. accused on the one hand and the complainant -“ victim on the other hand during the pendency of the proceedings before this Court. It was prayed on behalf of the appellant that the appeal be disposed of on the basis of compromise between the parties. In para 12 (pg. 670) of the Report, the Court observed as follows :

“12. Now, it cannot be gainsaid that an offence punishable under Section 307 IPC is not a compoundable offence. Section 320 of the Code of Criminal Procedure, 1973 expressly states that no offence shall be compounded if it is not compoundable under the Code. At the same time, however, while dealing with such matters, this Court may take into account a relevant and important consideration about compromise between the parties for the purpose of reduction of sentence.-

37. The Court also referred to the earlier decisions of this Court in Jetha Ram v. State of Rajasthan[24], Murugesan v. Ganapathy Velar[25], Ishwarlal v. State of M.P.[26] and Mahesh Chand & another v. State of Rajasthan[27] and noted in paragraph 13 (pg. 670) of the Report as follows:

“13. In Jetha Ram v. State of Rajasthan, Murugesan v. Ganapathy Velar and Ishwarlal v. State of M.P. this Court, while taking into account the fact of compromise between the parties, reduced sentence imposed on the appellant-accused to already undergone, though the offences were not compoundable. But it was also stated that in Mahesh Chand v. State of Rajasthan such offence was ordered to be compounded.- Then, in paragraphs 14 and 15 (pg. 670) the Court held as under :

“14. In our considered opinion, it would not be appropriate to order compounding of an offence not compoundable under the Code ignoring and keeping aside statutory provisions. In our judgment, however, limited submission of the learned counsel for the appellant deserves consideration that while imposing substantive sentence, the factum of compromise between the parties is indeed a relevant circumstance which the Court may keep in mind.

15. In the instant case, the incident took place before more than fifteen years; the parties are residing in one and the same village and they are also relatives. The appellant was about 20 years of age at the time of commission of crime. It was his first offence. After conviction, the petitioner was taken into custody. During the pendency of appeal before the High Court, he was enlarged on bail but, after the decision of the High Court, he again surrendered and is in jail at present. Though he had applied for bail, the prayer was not granted and he was not released on bail. Considering the totality of facts and circumstances, in our opinion, the ends of justice would be met if the sentence of imprisonment awarded to the appellant (Accused 1) is reduced to the period already undergone.-

38. In Rumi Dhar (Smt.) v. State of West Bengal and another[28] , the Court was concerned with applicability of Section 320 of the Code where the accused was being prosecuted for commission of offences under Sections 120-B/420/467/468/471 of the IPC along with the bank officers who were being prosecuted under Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988. The accused had paid the entire due amount as per the settlement with the bank in the matter of recovery before the Debts Recovery Tribunal. The accused prayed for her discharge on the grounds (i) having regard to the settlement arrived at between her and the bank, no case for proceeding against her has been made out; (ii) the amount having already been paid and the title deeds having been returned, the criminal proceedings should be dropped on the basis of the settlement and (iii) the dispute between the parties were purely civil in nature and that she had not fabricated any document or cheated the bank in any way whatsoever and charges could not have been framed against her.

The CBI contested the application for discharge on the ground that mere repayment to the bank could not exonerate the accused from the criminal proceeding. The two-Judge Bench of this Court referred to Section 320 of the Code and the earlier decisions of this Court in CBI v. Duncans Agro Industries Limited[29], State of Haryana v. Bhajan Lal[30], State of Bihar v. P.P. Sharma[31], Janata Dal v. H.S. Chowdhary[32] and Nikhil Merchant2 which followed the decision in B.S. Joshi1 and then with reference to Article 142 of the Constitution and Section 482 of the Code refused to quash the charge against the accused by holding as under:

“24. The jurisdiction of the Court under Article 142 of the Constitution of India is not in dispute. Exercise of such power would, however, depend on the facts and circumstances of each case. The High Court, in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, and this Court, in terms of Article 142 of the Constitution of India, would not direct quashing of a case involving crime against the society particularly when both the learned Special Judge as also the High Court have found that a prima facie case has been made out against the appellant herein for framing the charge.-

39. In Shiji alias Pappu and others vs. Radhika and another[33] this Court considered the exercise of inherent power by the High Court under Section 482 in a matter where the offence was not compoundable as the accused was already involved in commission of the offences punishable under Sections 354 and 394 IPC. The High Court rejected the prayer by holding that the offences with which appellants were charged are not ‘personal in nature’ to justify quashing the criminal proceedings on the basis of a compromise arrived at between the complainant and the appellants. This Court considered earlier decisions of this Court, the provisions contained in Sections 320 and 394 of the Code and in paragraphs 17, 18 and 19 (pgs.

712 and 713) of the Report held as under:

“17. It is manifest that simply because an offence is not compoundable under Section 320 CrPC is by itself no reason for the High Court to refuse exercise of its power under Section 482 CrPC. That power can in our opinion be exercised in cases where there is no chance of recording a conviction against the accused and the entire exercise of a trial is destined to be an exercise in futility. There is a subtle distinction between compounding of offences by the parties before the trial court or in appeal on the one hand and the exercise of power by the High Court to quash the prosecution under Section 482 CrPC on the other. While a court trying an accused or hearing an appeal against conviction, may not be competent to permit compounding of an offence based on a settlement arrived at between the parties in cases where the offences are not compoundable under Section 320, the High Court may quash the prosecution even in cases where the offences with which the accused stand charged are non- compoundable. The inherent powers of the High Court under Section 482 CrPC are not for that purpose controlled by Section 320 CrPC.

18. Having said so, we must hasten to add that the plenitude of the power under Section 482 CrPC by itself, makes it obligatory for the High Court to exercise the same with utmost care and caution. The width and the nature of the power itself demands that its exercise is sparing and only in cases where the High Court is, for reasons to be recorded, of the clear view that continuance of the prosecution would be nothing but an abuse of the process of law. It is neither necessary nor proper for us to enumerate the situations in which the exercise of power under Section 482 may be justified. All that we need to say is that the exercise of power must be for securing the ends of justice and only in cases where refusal to exercise that power may result in the abuse of the process of law. The High Court may be justified in declining interference if it is called upon to appreciate evidence for it cannot assume the role of an appellate court while dealing with a petition under Section 482 of the Criminal Procedure Code. Subject to the above, the High Court will have to consider the facts and circumstances of each case to determine whether it is a fit case in which the inherent powers may be invoked.

19. Coming to the case at hand, we are of the view that the incident in question had its genesis in a dispute relating to the access to the two plots which are adjacent to each other. It was not a case of broad daylight robbery for gain. It was a case which has its origin in the civil dispute between the parties, which dispute has, it appears, been resolved by them. That being so, continuance of the prosecution where the complainant is not ready to support the allegations which are now described by her as arising out of some “misunderstanding and misconception- will be a futile exercise that will serve no purpose. It is noteworthy that the two alleged eyewitnesses, who are closely related to the complainant, are also no longer supportive of the prosecution version. The continuance of the proceedings is thus nothing but an empty formality. Section 482 CrPC could, in such circumstances, be justifiably invoked by the High Court to prevent abuse of the process of law and thereby preventing a wasteful exercise by the courts below-.

40. In Ashok Sadarangani and Anr. vs. Union of India and others[34], the issue under consideration was whether an offence which was not compoundable under the provisions of the Code could be quashed. That was a case where a criminal case was registered against the accused persons under Sections 120-B, 465, 467, 468 and 471 of IPC. The allegation was that accused secured the credit facilities by submitting forged property documents as collaterals and utilized such facilities in a dishonest and fraudulent manner by opening Letters of Credit in respect of foreign supplies of goods, without actually bringing any goods but inducing the Bank to negotiate the Letters of Credit in favour of foreign suppliers and also by misusing the cash credit facility. The Court considered the earlier decisions of this Court including B.S. Joshi1, Nikhil Merchant2, Manoj Sharma3, Shiji alias Pappu33, Duncans Agro Industries Limited29, Rumi Dhar (Smt.)28 and Sushil Suri21 and also referred to the order of reference in one of the cases before us. In paragraphs 17, 18, 19 and 20 of the Report it was held as under:- “17. Having carefully considered the facts and circumstances of the case, as also the law relating to the continuance of criminal cases where the complainant and the accused had settled their differences and had arrived at an amicable arrangement, we see no reason to differ with the views that had been taken in Nikhil Merchant’s case or Manoj Sharma’s case (supra) or the several decisions that have come thereafter. It is, however, no coincidence that the golden thread which runs through all the decisions cited, indicates that continuance of a criminal proceeding after a compromise has been arrived at between the complainant and the accused, would amount to abuse of the process of court and an exercise in futility, since the trial could be prolonged and ultimately, may conclude in a decision which may be of any consequence to any of the other parties.

Even in Sushil Suri’s case on which the learned Additional Solicitor General had relied, the learned Judges who decided the said case, took note of the decisions in various other cases, where it had been reiterated that the exercise of inherent powers would depend entirely on the facts and circumstances of each case. In other words, not that there is any restriction on the power or authority vested in the Supreme Court in exercising powers under Article 142 of the Constitution, but that in exercising such powers the Court has to be circumspect, and has to exercise such power sparingly in the facts of each case.

Furthermore, the issue, which has been referred to a larger Bench in Gian Singh’s case (supra) in relation to the decisions of this Court in B.S. Joshi’s case, Nikhil Merchant’s case, as also Manoj Sharma’s case, deal with a situation which is different from that of the present case. While in the cases referred to hereinabove, the main question was whether offences which were not compoundable, under Section 320 Cr.P.C. could be quashed under Section 482 Cr.P.C., in Gian Singh’s case the Court was of the view that a non-compoundable offence could not be compounded and that the Courts should not try to take over the function of the Parliament or executive. In fact, in none of the cases referred to in Gian Singh’s case, did this Court permit compounding of non-compoundable offences. On the other hand, upon taking various factors into consideration, including the futility of continuing with the criminal proceedings, this Court ultimately quashed the same.

18. In addition to the above, even with regard to the decision of this Court in Central Bureau of Investigation v. Ravi Shankar Prasad and Ors. : [(2009) 6 SCC 351], this Court observed that the High Court can exercise power under Section 482 Cr.P.C. to do real and substantial justice and to prevent abuse of the process of Court when exceptional circumstances warranted the exercise of such power. Once the circumstances in a given case were held to be such as to attract the provisions of Article 142 or Articles 32 and 226 of the Constitution, it would be open to the Supreme Court to exercise its extraordinary powers under Article 142 of the Constitution to quash the proceedings, the continuance whereof would only amount to abuse of the process of Court. In the instant case the dispute between the petitioners and the Banks having been compromised, we have to examine whether the continuance of the criminal proceeding could turn out to be an exercise in futility without anything positive being ultimately achieved.

19. As was indicated in Harbhajan Singh’s case (supra), the pendency of a reference to a larger Bench, does not mean that all other proceedings involving the same issue would remain stayed till a decision was rendered in the reference. The reference made in Gian Singh’s case (supra) need not, therefore, detain us. Till such time as the decisions cited at the Bar are not modified or altered in any way, they continue to hold the field.

20. In the present case, the fact situation is different from that in Nikhil Merchant’s case (supra). While in Nikhil Merchant’s case the accused had misrepresented the financial status of the company in question in order to avail of credit facilities to an extent to which the company was not entitled, in the instant case, the allegation is that as part of a larger conspiracy, property acquired on lease from a person who had no title to the leased properties, was offered as collateral security for loans obtained. Apart from the above, the actual owner of the property has filed a criminal complaint against Shri Kersi V. Mehta who had held himself out as the Attorney of the owner and his family members. The ratio of the decisions in B.S. Joshi’s case and in Nikhil Merchant’s case or for that matter, even in Manoj Sharma’s case, does not help the case of the writ petitioners. In Nikhil Merchant’s case, this Court had in the facts of the case observed that the dispute involved had overtures of a civil dispute with criminal facets. This is not so in the instant case, where the emphasis is more on the criminal intent of the Petitioners than on the civil aspect involving the dues of the Bank in respect of which a compromise was worked out.- The Court distinguished B.S. Joshi1 and Nikhil Merchant2 by observing that those cases dealt with different fact situation.

41. In Rajiv Saxena and others v. State (NCT of Delhi) and another[35], this Court allowed the quashment of criminal case under Sections 498-A and 496 read with Section 34 IPC by a brief order. It was observed that since the parties had settled their disputes and the complainant agreed that the criminal proceedings need not be continued, the criminal proceedings could be quashed.

42. In a very recent judgment decided by this Court in the month of July, 2012 in Jayrajsinh Digvijaysinh Rana v. State of Gujarat and another[36], this Court was again concerned with the question of quashment of an FIR alleging offences punishable under Sections 467, 468, 471, 420 and 120-B IPC. The High Court refused to quash the criminal case under Section 482 of the Code. The question for consideration was that inasmuch as all those offences, except Section 420 IPC, were non-compoundable offences under Section 320 of the Code, whether it would be possible to quash the FIR by the High Court under Section 482 of the Code or by this Court under Article 136 of the Constitution of India. The Bench elaborately considered the decision of this Court in Shiji alias Pappu33 and by invoking Article 142 of the Constitution quashed the criminal proceedings. It was held as under:- “10. In the light of the principles mentioned above, inasmuch as Respondent No. 2 – the Complainant has filed an affidavit highlighting the stand taken by the Appellant (Accused No. 3) during the pendency of the appeal before this Court and the terms of settlement as stated in the said affidavit, by applying the same analogy and in order to do complete justice under Article 142 of the Constitution, we accept the terms of settlement insofar as the Appellant herein (Accused No. 3) is concerned.

11. In view of the same, we quash and set aside the impugned FIR No. 45/2011 registered with Sanand Police Station, Ahmedabad for offences punishable Under Sections 467, 468, 471, 420 and 120-B of IPC insofar as the Appellant (Accused No. 3) is concerned. The appeal is allowed to the extent mentioned above-.

43. In Y. Suresh Babu v. State of A. P.[37] decided on April 29, 1987, this Court allowed the compounding of an offence under Section 326 IPC even though such compounding was not permitted by Section 320 of the Code. However, in Ram Lal and Anr. v. State of J & K[38] , this Court observed that Y. Suresh Babu37 was per incuriam. It was held that an offence which law declares to be non-compoundable cannot be compounded at all even with the permission of the Court.

44. Having surveyed the decisions of this Court which throw light on the question raised before us, two decisions, one given by the Punjab and Haryana High Court and the other by Bombay High Court deserve to be noticed.

45. A five-Judge Bench of the Punjab and Haryana High Court in Kulwinder Singh and others v. State of Punjab and another[39] was called upon to determine, inter alia, the question whether the High Court has the power under Section 482 of the Code to quash the criminal proceedings or allow the compounding of the offences in the cases which have been specified as non-compoundable offences under the provisions of Section 320 of the Code. The five-Judge Bench referred to quite a few decisions of this Court including the decisions in Madhu Limaye12 , Bhajan Lal30 , L.

Muniswamy11 , Simrikhia14, B.S. Joshi1 and Ram Lal38 and framed the following guidelines:

“a. Cases arising from matrimonial discord, even if other offences are introduced for aggravation of the case.

b. Cases pertaining to property disputes between close relations, which are predominantly civil in nature and they have a genuine or belaboured dimension of criminal liability.

Notwithstanding a touch of criminal liability, the settlement would bring lasting peace and harmony to larger number of people.

c. Cases of dispute between old partners or business concerns with dealings over a long period which are predominantly civil and are given or acquire a criminal dimension but the parties are essentially seeking a redressal of their financial or commercial claim.

d. Minor offences as under Section 279, IPC may be permitted to be compounded on the basis of legitimate settlement between the parties. Yet another offence which remains non- compoundable is Section 506 (II), IPC, which is punishable with 7 years imprisonment. It is the judicial experience that an offence under Section 506 IPC in most cases is based on the oral declaration with different shades of intention. Another set of offences, which ought to be liberally compounded, are Sections 147 and 148, IPC, more particularly where other offences are compoundable. It may be added here that the State of Madhya Pradesh vide M.P. Act No. 17 of 1999 (Section 3) has made Sections 506(II) IPC, 147 IPC and 148, IPC compoundable offences by amending the schedule under Section 320, Cr.P.C.

e. The offences against human body other than murder and culpable homicide where the victim dies in the course of transaction would fall in the category where compounding may not be permitted. Heinous offences like highway robbery, dacoity or a case involving clear-cut allegations of rape should also fall in the prohibited category. Offences committed by Public Servants purporting to act in that capacity as also offences against public servant while the victims are acting in the discharge of their duty must remain non-compoundable. Offences against the State enshrined in Chapter-VII (relating to army, navy and air force) must remain non-compoundable.

f. That as a broad guideline the offences against human body other than murder and culpable homicide may be permitted to be compounded when the court is in the position to record a finding that the settlement between the parties is voluntary and fair.

While parting with this part, it appears necessary to add that the settlement or compromise must satisfy the conscience of the court. The settlement must be just and fair besides being free from the undue pressure, the court must examine the cases of weaker and vulnerable victims with necessary caution.”

To conclude, it can safely be said that there can never be any hard and fast category which can be prescribed to enable the Court to exercise its power under Section 482 of the Cr.P.C. The only principle that can be laid down is the one which has been incorporated in the Section itself, i.e., “to prevent abuse of the process of any Court” or “to secure the ends of justice”.

It was further held as under :

“23. No embargo, be in the shape of Section 320(9) of the Cr.P.C., or any other such curtailment, can whittle down the power under Section 482 of the Cr.P.C.

25. The only inevitable conclusion from the above discussion is that there is no statutory bar under the Cr.P.C. which can affect the inherent power of this Court under Section 482.

Further, the same cannot be limited to matrimonial cases alone and the Court has the wide power to quash the proceedings even in non-compoundable offences notwithstanding the bar under Section 320 of the Cr.P.C., in order to prevent the abuse of law and to secure the ends of justice. The power under Section 482 of the Cr.P.C. is to be exercised ex-debito Justitiae to prevent an abuse of process of Court. There can neither be an exhaustive list nor the defined para-meters to enable a High Court to invoke or exercise its inherent powers. It will always depend upon the facts and circumstances of each case. The power under Section 482 of the Cr.P.C. has no limits. However, the High Court will exercise it sparingly and with utmost care and caution. The exercise of power has to be with circumspection and restraint. The Court is a vital and an extra-ordinary effective instrument to maintain and control social order. The Courts play role of paramount importance in achieving peace, harmony and ever-lasting congeniality in society. Resolution of a dispute by way of a compromise between two warring groups, therefore, should attract the immediate and prompt attention of a Court which should endeavour to give full effect to the same unless such compromise is abhorrent to lawful composition of the society or would promote savagery.-

46. A three-Judge Bench of the Bombay High Court in Abasaheb Yadav Honmane v. State of Maharashtra[40] dealt with the inherent power of the High Court under Section 482 of the Code vis-à-vis the express bar for compounding of the non-compoundable offences in Section 320(9) of the Code.

The High Court referred to various decisions of this Court and also the decisions of the various High Courts and then stated as follows :

“The power of compounding on one hand and quashing of criminal proceedings in exercise of inherent powers on the other, are incapable of being treated as synonymous or even inter- changeable in law. The conditions precedent and satisfaction of criteria in each of these cases are distinct and different. May be, the only aspect where they have any commonality is the result of exercise of such power in favour of the accused, as acquittal is the end result in both these cases. Both these powers are to be exercised for valid grounds and with some element of objectivity. Particularly, the power of quashing the FIR or criminal proceedings by the Court by taking recourse to inherent powers is expected to be used sparingly and that too without losing sight of impact of such order on the criminal justice delivery system. It may be obligatory upon the Court to strike a balance between the nature of the offence and the need to pass an order in exercise of inherent powers, as the object of criminal law is protection of public by maintenance of law and order.-

47. Section 320 of the Code articulates public policy with regard to the compounding of offences. It catalogues the offences punishable under IPC which may be compounded by the parties without permission of the Court and the composition of certain offences with the permission of the court.

The offences punishable under the special statutes are not covered by Section 320. When an offence is compoundable under Section 320, abatement of such offence or an attempt to commit such offence or where the accused is liable under Section 34 or 149 of the IPC can also be compounded in the same manner. A person who is under 18 years of age or is an idiot or a lunatic is not competent to contract compounding of offence but the same can be done on his behalf with the permission of the court. If a person is otherwise competent to compound an offence is dead, his legal representatives may also compound the offence with the permission of the court. Where the accused has been committed for trial or he has been convicted and the appeal is pending, composition can only be done with the leave of the court to which he has been committed or with the leave of the appeal court, as the case may be. The revisional court is also competent to allow any person to compound any offence who is competent to compound.

The consequence of the composition of an offence is acquittal of the accused. Sub-section (9) of Section 320 mandates that no offence shall be compounded except as provided by this Section. Obviously, in view thereof the composition of an offence has to be in accord with Section 320 and in no other manner.

48. The question is with regard to the inherent power of the High Court in quashing the criminal proceedings against an offender who has settled his dispute with the victim of the crime but the crime in which he is allegedly involved is not compoundable under Section 320 of the Code.

49. Section 482 of the Code, as its very language suggests, saves the inherent power of the High Court which it has by virtue of it being a superior court to prevent abuse of the process of any court or otherwise to secure the ends of justice. It begins with the words, ‘nothing in this Code’ which means that the provision is an overriding provision. These words leave no manner of doubt that none of the provisions of the Code limits or restricts the inherent power. The guideline for exercise of such power is provided in Section 482 itself i.e., to prevent abuse of the process of any court or otherwise to secure the ends of justice. As has been repeatedly stated that Section 482 confers no new powers on High Court; it merely safeguards existing inherent powers possessed by High Court necessary to prevent abuse of the process of any Court or to secure the ends of justice. It is equally well settled that the power is not to be resorted to if there is specific provision in the Code for the redress of the grievance of an aggrieved party. It should be exercised very sparingly and it should not be exercised as against the express bar of law engrafted in any other provision of the Code.

50. In different situations, the inherent power may be exercised in different ways to achieve its ultimate objective. Formation of opinion by the High Court before it exercises inherent power under Section 482 on either of the twin objectives, (i) to prevent abuse of the process of any court or (ii) to secure the ends of justice, is a sine qua non.

51. In the very nature of its constitution, it is the judicial obligation of the High Court to undo a wrong in course of administration of justice or to prevent continuation of unnecessary judicial process. This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest. The full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by necessary intendment.

Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists. The power possessed by the High Court under Section 482 of the Code is of wide amplitude but requires exercise with great caution and circumspection.

52. It needs no emphasis that exercise of inherent power by the High Court would entirely depend on the facts and circumstances of each case. It is neither permissible nor proper for the court to provide a straitjacket formula regulating the exercise of inherent powers under Section 482. No precise and inflexible guidelines can also be provided.

53. Quashing of offence or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of offence. They are different and not interchangeable.

Strictly speaking, the power of compounding of offences given to a court under Section 320 is materially different from the quashing of criminal proceedings by the High Court in exercise of its inherent jurisdiction. In compounding of offences, power of a criminal court is circumscribed by the provisions contained in Section 320 and the court is guided solely and squarely thereby while, on the other hand, the formation of opinion by the High Court for quashing a criminal offence or criminal proceeding or criminal complaint is guided by the material on record as to whether the ends of justice would justify such exercise of power although the ultimate consequence may be acquittal or dismissal of indictment.

54. Where High Court quashes a criminal proceeding having regard to the fact that dispute between the offender and victim has been settled although offences are not compoundable, it does so as in its opinion, continuation of criminal proceedings will be an exercise in futility and justice in the case demands that the dispute between the parties is put to an end and peace is restored; securing the ends of justice being the ultimate guiding factor. No doubt, crimes are acts which have harmful effect on the public and consist in wrong doing that seriously endangers and threatens well-being of society and it is not safe to leave the crime- doer only because he and the victim have settled the dispute amicably or that the victim has been paid compensation, yet certain crimes have been made compoundable in law, with or without permission of the Court. In respect of serious offences like murder, rape, dacoity, etc; or other offences of mental depravity under IPC or offences of moral turpitude under special statutes, like Prevention of Corruption Act or the offences committed by public servants while working in that capacity, the settlement between offender and victim can have no legal sanction at all. However, certain offences which overwhelmingly and predominantly bear civil flavour having arisen out of civil, mercantile, commercial, financial, partnership or such like transactions or the offences arising out of matrimony, particularly relating to dowry, etc. or the family dispute, where the wrong is basically to victim and the offender and victim have settled all disputes between them amicably, irrespective of the fact that such offences have not been made compoundable, the High Court may within the framework of its inherent power, quash the criminal proceeding or criminal complaint or F.I.R if it is satisfied that on the face of such settlement, there is hardly any likelihood of offender being convicted and by not quashing the criminal proceedings, justice shall be casualty and ends of justice shall be defeated. The above list is illustrative and not exhaustive. Each case will depend on its own facts and no hard and fast category can be prescribed.

55. B.S. Joshi1, Nikhil Merchant2, Manoj Sharma3 and Shiji alias Pappu33 do illustrate the principle that High Court may quash criminal proceedings or FIR or complaint in exercise of its inherent power under Section 482 of the Code and Section 320 does not limit or affect the powers of the High Court under Section 482. Can it be said that by quashing criminal proceedings in B.S. Joshi1, Nikhil Merchant2, Manoj Sharma3 and Shiji alias Pappu33, this Court has compounded the non-compoundable offences indirectly? We do not think so. There does exist the distinction between compounding of an offence under Section 320 and quashing of a criminal case by the High Court in exercise of inherent power under Section 482. The two powers are distinct and different although ultimate consequence may be same viz., acquittal of the accused or dismissal of indictment.

56. We find no incongruity in the above principle of law and the decisions of this Court in Simrikhia14, Dharampal15, Arun Shankar Shukla16, Ishwar Singh23, Rumi Dhar (Smt.).28 and Ashok Sadarangani34. The principle propounded in Simrikhia14 that the inherent jurisdiction of the High Court cannot be invoked to override express bar provided in law is by now well settled. In Dharampal15, the Court observed the same thing that the inherent powers under Section 482 of the Code cannot be utilized for exercising powers which are expressly barred by the Code. Similar statement of law is made in Arun Shankar Shukla16. In Ishwar Singh23, the accused was alleged to have committed an offence punishable under Section 307, IPC and with reference to Section 320 of the Code, it was held that the offence punishable under Section 307 IPC was not compoundable offence and there was express bar in Section 320 that no offence shall be compounded if it is not compoundable under the Code. In Rumi Dhar (Smt.)28 although the accused had paid the entire due amount as per the settlement with the bank in the matter of recovery before the Debts Recovery Tribunal, the accused was being proceeded with for commission of offences under Section 120-B/420/467/468/471 of the IPC along with the bank officers who were being prosecuted under Section 13(2) read with 13(1)(d) of Prevention of Corruption Act. The Court refused to quash the charge against the accused by holding that the Court would not quash a case involving a crime against the society when a prima facie case has been made out against the accused for framing the charge. Ashok Sadarangani34 was again a case where the accused persons were charged of having committed offences under Sections 120-B, 465, 467, 468 and 471, IPC and the allegations were that the accused secured the credit facilities by submitting forged property documents as collaterals and utilized such facilities in a dishonest and fraudulent manner by opening letters of credit in respect of foreign supplies of goods, without actually bringing any goods but inducing the bank to negotiate the letters of credit in favour of foreign suppliers and also by misusing the cash-credit facility. The Court was alive to the reference made in one of the present matters and also the decisions in B.S.

Joshi1, Nikhil Merchant2 and Manoj Sharma3 and it was held that B.S.

Joshi1, and Nikhil Merchant2 dealt with different factual situation as the dispute involved had overtures of a civil dispute but the case under consideration in Ashok Sadarangani34 was more on the criminal intent than on a civil aspect. The decision in Ashok Sadarangani34 supports the view that the criminal matters involving overtures of a civil dispute stand on a different footing.

57. The position that emerges from the above discussion can be summarised thus: the power of the High Court in quashing a criminal proceeding or FIR or complaint in exercise of its inherent jurisdiction is distinct and different from the power given to a criminal court for compounding the offences under Section 320 of the Code. Inherent power is of wide plenitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power viz; (i) to secure the ends of justice or (ii) to prevent abuse of the process of any Court. In what cases power to quash the criminal proceeding or complaint or F.I.R may be exercised where the offender and victim have settled their dispute would depend on the facts and circumstances of each case and no category can be prescribed. However, before exercise of such power, the High Court must have due regard to the nature and gravity of the crime. Heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc.

cannot be fittingly quashed even though the victim or victim’s family and the offender have settled the dispute. Such offences are not private in nature and have serious impact on society. Similarly, any compromise between the victim and offender in relation to the offences under special statutes like Prevention of Corruption Act or the offences committed by public servants while working in that capacity etc; cannot provide for any basis for quashing criminal proceedings involving such offences. But the criminal cases having overwhelmingly and pre-dominatingly civil flavour stand on different footing for the purposes of quashing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute.

In this category of cases, High Court may quash criminal proceedings if in its view, because of the compromise between the offender and victim, the possibility of conviction is remote and bleak and continuation of criminal case would put accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case despite full and complete settlement and compromise with the victim. In other words, the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and wrongdoer and whether to secure the ends of justice, it is appropriate that criminal case is put to an end and if the answer to the above question(s) is in affirmative, the High Court shall be well within its jurisdiction to quash the criminal proceeding.

58. In view of the above, it cannot be said that B.S. Joshi1, Nikhil Merchant2 and Manoj Sharma3 were not correctly decided. We answer the reference accordingly. Let these matters be now listed before the concerned Bench(es).

…………………….J.
(R.M. Lodha)

…………………….J.
(Anil R. Dave)

……………………………………..J.
(Sudhansu Jyoti Mukhopadhaya)

NEW DELHI.
SEPTEMBER 24, 2012.

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