The
case arose out of a decision of the High Court whereby the award of tender by
the Appellant in favour of Respondent No. 6 was set aside upon a challenge
being laid by Respondent No.1.The Court reiterated some principles derived from
previous judgments on the issue of judicial review in tender matters:
(i)
Constitutional
Courts are only concerned with the lawfulness of a decision, and not its
soundness, and therefore ought not to sit in appeal over decisions of executive
authorities and their instrumentalities;
(ii)
Plausible
decisions ought not to be overturned, and latitude ought to be granted to State
in exercise of its executive powers so that Constitutional separation of powers
is not encroached upon;
(iii)
Allegations
of illegality, irrationality and procedural impropriety are enough grounds for
Courts to assume jurisdiction;
(iv)
Decision
making process is subject to judicial inquiry and not the end result (save as
may be necessary to guide determination of the former)
(v)
In
cases where constitutional rights are infringed, writs would ordinarily be the
proper remedy, such as in tender matters where State treats equals unequally,
or adopts an arbitrary procedure. However, writs are impermissible when
violation is only with regard to a contractual right or duty. Therefore, a
person seeking relief in writ must also satisfy the Court that the right is not
merely contractual, but also one in public law. This is also for the reason
that a tenderer with a purely private interest always has the remedy of seeking
damages in civil court;
(vi)
A
mere difference in prices may or may not be decisive in deciding whether any
public interest is involved in intervening in an otherwise commercial
transaction;
(vii)
Even
if there is found to be a minor deviation from the terms of the Notice Inviting
Tender, that itself may not be sufficient for courts to overturn the award of
tender at the behest of a successful bidder in the absence of mala fides;
(viii)
There
is no prohibition in law against State
authorities granting relaxations, if such relaxations are found to be bona
fide, and are otherwise permissible. In such matters, it has been held that
Courts must exercise their discretion under Article 226 wisely.
Based
on the aforesaid conclusions, the appeal was allowed.
Rajasthan
State Electricity Board Jaipur v. Dy. Commissioner of Income Tax (Assessment)
&Anr.
[Civil
Appeal No. 8590 of 2010 dated 19.3.2020]
In
this case, the Supreme Court was called upon to examine the correctness of a
decision of the Division Bench of the Rajasthan High Court whereby a demand for
additional tax under Section 143(1-A) of the Income Tax Act, 1961 (“Act”) was
upheld. The Appellant had filed its income tax return for assessment year
1991-92 showing a loss, upon having bona fidelyclaimed depreciation at 100% on
written down value of assets even though post amendment of Section 32(2) of the
Act, depreciation could have been claimed only at the rate of 75%. No tax was
payable by the Appellant, as per the return filed. An intimation under Section
143(1)(a) of the Act was sent by the Assessing Officer disallowing the
depreciation to the extent of 25%, and additional tax under Section 143(1-A)
was demanded. An application for rectification under Section 154, and a
revision petition under Section 264 by the Appellant also came to be rejected.
The
Commissioner of Income Tax (“CIT”) while rejecting the revision petition opined
that under Section 143(1-A), an additional tax at the rate of 20% was payable
on the excess amount, meaning thereby that even in case of a return reflecting
loss, additional tax was payable on the excess amount, being reduction in loss.
The Single Judge of the High Court allowed the Appellant’s challenge against
the Order of the CIT, while the Division Bench reversed the finding and
restored the order of the CIT.
The
Supreme Court examined Section 143(1-A) as it was originally enacted, as also
its amended avatar, vide the Finance Act 1993 which retrospectively amended the
provision w.e.f. 1.4.1989 (i.e. the date of insertion of the provision in the
Act). It was found that the post amendment, the provision expressly stated that
it would also apply in the event that the adjustments made in Section 143(1)(a)
resulted in ‘reduction of losses’. The Court then made a reference to the
object of the retrospective amendment to Section 143(1-A), which was, inter
alia, to prevent evasion of tax by mis-statement of the income and to
persuade the assesses to avoid mistakes in filing of returns. The Court
thereafter referred to its decision in Commissioner of Income Tax, Gauhati
v. Sati Oil Udyog Limited and another which decided with finality the
challenge to the retrospective effect given to Section 143(1-A). The Court
observed that retrospective amendment of the provision had been upheld subject
to the rider that the provision could only be invoked in a case where it was
found in the facts of the case that the lesser amount stated in the return
filed by the assessee was an attempt to evade tax lawfully by the assessee.
In
the facts of the case at hand, the Court found that the Appellant-assessee had
bonafidely claimed depreciation at the pre-amendment rate, and even after
disallowance of depreciation to the extent of 25%, the Appellant-assessee
remained in loss. It was held that it could not be said that the
Appellant-assessee had in fact attempted to evade tax.
The
appeal was allowed and the demand for additional tax was set aside.
Benedict
Denis Kinny v. Tulip Brian Miranda
[Civil
Appeal No. 1429-1430 of 2020 and a connected matter decided on 19.3.2020]
This
case deals with an important aspect of the powers of the High Court under
Article 226 of the Constitution. The case arose out of the following facts: Section
5B of the Mumbai Municipal Corporation Act requires a candidate contesting
election to the post of counselor in the Corporation to produce a caste
validity certificate on the date of filing nomination. A candidate who has
applied to the Scrutiny Committee for verification of his caste certificate
before the date of filing his nomination but has not received the certificate
on the date of filing of nomination, shall undertake to produce the same within
one year from date of election. Upon failure to produce the certificate within
the said period of time, the election shall be deemed to have been terminated
retrospectively and the candidate shall be disqualified from being a counselor.
The private Respondents in the appeals fell in the category of cases covered by
Section 5B. Their application for caste certificate, however, came to be
rejected by the Caste Scrutiny Committee subsequent to their being elected. The
said respondents filed writ petitions challenging the decisions of the Caste
Scrutiny Committee before the High Court and interim protection orders came to
be passed in their favour, operative during the pendency of the writ petitions.
The writ petitions came to be allowed, and the said Respondents were granted
caste certificates. While allowing the writ petitions, the High Court also held
that the said returned candidates were saved from the rigours of Section 5B, in
view of the interim orders passed in the writ petitions. These orders of the
High Court were subject matter of challenge before the Supreme Court.
The
Court opined:
(i)
After
referring to several decisions on the subject, it was held that the powers of
judicial review under Articles 226 and 32 of the Constitution were could not be
seen to be ousted by mandatory provisions of statute;
(ii)
It
was further held that once judicial review was available in respect of orders
or actions of statutory authorities, the passage of an order of status quo to
ensure that the lapse of time may not result in rendering the petition
infructuous was well within the power of the High Court;
(iii)
The
fact that the mandatory requirement under Section 5B is for submission of the
certificate within one year cannot be read to mean that the High Court could
not have granted an interim order extending beyond one year. No such fetters
can be placed on the powers of the High Court under Article 226;
The
appeals were thus rejected.
AarifabenYunusbhai
Patel &Ors. v. Mukul Thakorebhai Amin &Ors.
[Civil
Appeal No. 1643-1644 of 2020 and connected matters decided on 17.3.2020]
In
this case, the question which came to be considered by the Court was whether
objections to an Execution of a decree, filed under Order XXI Rule 90 of the
Code of Civil Procedure, 1908 (“CPC”) were within limitation in terms of
Article 127 of the Third Division, Part I of the Limitation Act, 1963. In the
facts of the case, the Respondents herein had filed objections to the execution
at the stage of confirmation of the sale, much after the expiry of the period
of 60 days as prescribed under the aforesaid Article 127. The objections were
entertained and came to be allowed on the ground that no notice of the
execution was given to the judgment debtor. In view of the aforesaid finding,
the question of the objections being barred by limitation was not gone into, in
spite of a specific order of the Supreme Court directing the Executing Court to
decide that question, in a previous round of litigation between the parties.
The
Court examined the question, and the submission of the respondents based on
Sections 5 and 14 of the Limitation Act. It was held that Section 5 of the
Limitation Act had no applicability to the facts of the case, since the
applicability thereof to Order XXI Rule 90 was specifically excluded. Section
14 of the Limitation Act was also held not to be applicable, since it was found
that the Respondents had sought liberty to file the objection petition, and had
proceeded to file a writ petition instead. The pendency of the writ petition
was cited as a ground for seeking benefit of Section 14. The Court held that
the benefit under Section 14 can be claimed by a person who is acting bona fide
and with due diligence. The facts of the case demonstrated lack of bona fides
and due diligence on the part of the Respondents.
Council
of Architecture v. Mukesh Goyal and Ors.
[Civil
Appeal No. 1819 of 2020 and connected matters decided on 17.3.2020]
In
this case, the Court considered an interesting question viz., as to whether
Section 37 of the Architects Act 1972 (“Act”) merely prohibits the use of the
title ‘Architect’ by individuals not registered with the Council of
Architecture under Chapter 3 of the Act or whether it actually prohibits
unregistered individuals from practicing architecture and its cognate
activities. The question arose out of a challenge before the High Court to the
recruitment process of the New Okhla Industrial Development Authority (“NOIDA”)
to the posts of Associate Town Planner and Associate Architect, which process
did not require the applying candidates to mandatorily possess a degree in
Architecture. The High Court held that Section 37 of the Act merely prohibited
the use of the term ‘Architect’ by individuals not registered with the Council
of Architecture. There was therefore nothing wrong with the recruitment process
which did not require candidates to possess a degree in architecture. The
process could not be said to fall foul of Section 37. Further, the use of the
word ‘Architect’ in the name of the post will not by itself render the
applicable regulations liable to be struck down. This decision was subject
matter of challenge before the Supreme Court. It was held:
(i)
On
a comparison of Section 37 of the Architects Act with Section 29 of the
Advocates Act and Section 15(2) of the Medical Council of India Act, it was
held that while the latter two enactments prohibited any unregistered persons
under the said enactments from practicing advocacy or medicine, the Architects
Act did not contain such a prohibition. The prohibition in Section 37 was
merely against the use of “title and style of architect”;
(ii)
On
a reference to the Statement of Objects and Reasons of the Architects Act, it
was held that the intention of the legislature was to unregistered persons from
using the title of ‘architect’ so as not to mislead people. It was not to prohibit
unregistered persons from practicing the tasks which an architect performed;
(iii)
The
Court held that although it was open to NOIDA to do away with the requirement
of a degree in architecture for recruitment to the posts in question, it could
not use the title of ‘architect’ in the nomenclature of those posts. It was
held that this by itself would result in violation of Section 37 of the
Architects Act, given its very object.
(iv)
The
Court relied upon Indian Express Newspapers v. Union of India for the proposition that subordinate
legislation could also be struck down as being in violation of a statute apart
from its parent statute. Having held thus, the Court upheld the regulations
except insofar as ‘architect’ was used in the nomenclature for the posts in question.
Based
on the above conclusions, the Court partly allowed the appeals and left it open
to NOIDA to use an appropriate term instead of ‘architect’ to describe the post
in question.
Nand
Ram (D) Through LRs v. Jagdish Prasad (D) Through LRs
[Civil
Appeal No. 9918 of 2011 decided on 19.3.2020]
The
challenge before the Supreme Court in this case was to a judgment of the High
Court of Delhi in a Second Appeal whereby two questions of law were decided by
the High Court, viz., (i) whether the decision of the Land Acquisition Court in
a reference under Section 30 of the Land Acquisition Act, 1894 (“LA Act”)
(where the opposing claims were on the count of existence of a landlord-tenant
relationship between the claimants)would apply as res judicata between the
parties in a subsequent suit for possession? and (ii) which was the applicable
Article of the First Schedule of the Limitation Act, 1963 to a suit for
possession filed against a tenant.
The
facts in which the aforesaid questions were that the plaintiff-Appellant was
the owner of a plot of land (“leased land”) on which the defendant-Respondent
was inducted as a tenant for a period of 20 years. A covenant of the lease was
that the landlord would not seek ejectment of the tenant for the entirety of
period of lease, except in the event that the agreed lease rent remained in
arrears for a period of one year. In that event, the landlord could seek
ejectment of the tenant. The leased land came to be acquired under the LA Act,
and a dispute arose between the plaintiff-Appellant and the
defendant-Respondent on the issue of apportionment of compensation for the
acquisition- which dispute came to be referred to the Land Acquisition Court
for determination under Section 30 of the LA Act. The defendant-Respondent had
claimed compensation as a leaseholder, for the unexpired period of the lease
which he was unable to enjoy on account of the acquisition. The Land
Acquisition Court held that since the arrears of rent had admittedly remained
due for more than one year, the defendant-Respondent could not claim to be a
tenant (in terms of the covenant in the lease deed referred to above) and
therefore was not entitled to compensation. A portion (“suit land”) of the
leased land came to be de-notified under Section 48 of the LA Act, and remained
in the possession of the defendant-Respondent. The plaintiff-Appellant issued a
notice to the defendant-Respondent for ejectment from the suit land and filed a
suit thereafter. The trial court decreed the suit, and the decree was confirmed
by the first appellate court.
The
High Court in Second Appeal reversed the findings of the two courts below while
holding that the finding of the Land Acquisition Court, to the effect that the
lease had come to an end upon non-payment of rent by the defendant-Respondent
for one year, had attained finality and applied as res judicata in the
present suit. The High Court also relied upon the termination of tenancy w.e.f.
23.9.1960 (vide a notice relied on in the Land Acquisition Court) to hold the
suit (filed on 13.3.1981) as being barred by time. The High Court held that
Article 67 of the Limitation Act, 1963 was applicable, as per which the period
of limitation commenced from the date of termination of the tenancy.
The
Supreme Court reversed the decision of the High Court while laying down and
reiterating several important legal principles on res judicata, tenancy
under the Transfer of Property Act, 1882 (“TP Act”) and on Limitation Act:
i.
The
Court relied upon the decision in Sajjadanashin Sayed Md. B.E. Edr. v. Musa
DadabhaiUmmer wherein it was held that if a matter was only collaterally
or incidentally in issue and decided in an earlier proceeding, the finding
on the issue would not ordinarily be res judicata. The test is that the
matter must be directly and substantially in issue. Whether or not it
was directly and substantially in issue is to be decided based on the answer to
the question whether it is necessary to decide the matter in that
particular case;
ii.
The
question as to whether a matter is directly and substantially in issue, is to
be decided based on a conjoint reading of the plaint, the written statement,
the issues framed and the judgment delivered;
Applying the
aforesaid dicta to the facts of the case at hand, it was held that the issue of
entitlement of the defendant-Respondent to possession of the suit land was not
directly and substantially in issue in the reference under Section 30.
iii.
The
Court relied on Union of India v. Nanak Singh and Mathura Prasad
Bajoo Jaiswal &Ors. v. Dossibai N.B. Jeejeebhoy for the proposition
that the decision in the previous judgment applied as res judicata and
not the reasons for the said decision.
iv.
The
Court relied upon several previous decisions to elaborate upon the difference
between a tenant at sufferance and a tenant holding over. A tenant at
sufferance is one who continues in unlawful possession of a property after the
expiry of the term of the lease. The possession of a tenant at sufferance is
akin to that of a trespasser, and can continue only till his ejectment in
accordance with law. A tenant holding over under Section 116 of the TP Act is
one who’s possession after expiry of the term of the lease has been recognized
or regularized by the landlord by acceptance of rent.
v.
The
Court found that the suit of the plaintiff-Appellants was one for possession
upon determination of tenancy, which was covered by Article 67 of the First
Schedule to the Limitation Act, and not Article 65 thereof.
The
appeal was allowed on the basis of the above conclusions.
