31 Dec 2010

Delhi High Court (Public Interest Litigation) Rules, 2010 notified

We had in an earlier post covered the decision of the Supreme Court exhaustively discussing the concept of 'public interest litigation' as a specific branch of jurisprudence developed under the constitutional canons by a pro-effective judiciary. The Supreme Court therein had laid down the guidelines to be followed in respect of the filing of public interest petitions and also directed the High Court to frame rules in this regard. Accordingly the Delhi High Court has framed and notified the Delhi High Court (Public Interest Litigation) Rules, 2010 to this end.

These Rules provide for constitution of a "Public Interest Litigation Cell" in the High Court whose duty shall be to process the public interest petitions before the "Public Interest Litigation Committee" of the High Court i.e. "the Committee consisting of at least two sitting Judges nominated by the Chief Justice" to hear public interest petitions.

The Rules category the various types of public interest petitions into five types i.e. (i) Landlord-Tenant disputes; (ii) Service matters and those pertaining to pension (not being family pension)
and gratuity; (iii) Personal disputes between individuals; (iv) Disputes relating to contractual or statutory liabilities; (v) Matrimonial disputes. But we are not impressed. Creation of Environmental law related category and a separate category for inaction of public functionaries, which have generally been the subject-matter and have set the trend of public interest litigation in India, should also have been provided for.

The Rules provide for preliminary screening of the petitions and stipulates that "neither any anonymous Letter Petition nor any such Petition from which the identity of the Letter Petitioner cannot be established or ascertained shall be entertained." Thus the alleged petitioners would be required to establish their identity before the grievances can be addressed. The Rules further provide other instructions in regard to the filing of these petitions. 

As a word of caution, the Rules themselves provide that they do not restrict the wide powers of the High Court under exercise of its constitutional and inherent jurisdiction "to make such orders
as may be necessary for the ends of justice or to prevent abuse of the process of the Court, including the power to impose exemplary costs and/or to debar a petitioner or an Advocate to file Public Interest Litigation if found to be indulging in frivolous or motivated litigation".

International Code of Conduct for Private Security Providers

"Private Security Companies and other Private Security Service Providers play an important role in protecting state and non-state clients engaged in relief, recovery, and reconstruction efforts, commercial business operations, diplomacy and military activity. In providing these services, the activities of PSCs can have potentially positive and negative consequences for their clients, the local population in the area of operation, the general security environment, the enjoyment of human rights and the rule of law."
The above words are quoted from the Preamble of the document titled "International Code of Conduct for Private Security Providers", a seventy-para document which has been accepted by fifty-eight international private security provider firms "with the objective of strengthening respect for human rights and humanitarian law within their operations". Nils Rosemann from of the Human Security and Business Desk of the Swiss Federal Department of Foreign Affairs in his post has informed that "the International Code of Conduct was developed through a multi-stakeholder process" and comes to reaffirm the stand of the private security providers that even "these companies often operate in contexts in which governmental authority is absent or the rule of law is compromised, [it] does not mean that they operate outside of the law, nor does it mean that the provision of security services aims to replace governmental state sovereignty over the use and legitimate exercise of force". He further states that the Code of Conduct "is more than just a 'gap filler' or a normative reaffirmation by non-state actors. The Code is a practice oriented tool."

The seventy paragraph Code covers various aspect which may desirably form a part of any international commitment on the issue. While containing some general stipulations regarding the standard of behavior of these firms and their employees (such as "require their Personnel to, treat all persons humanely and with respect for their dignity and privacy"), it provides a Rules regarding the use of force, detention, apprehending persons, etc. It also carries stipulations on 'prohibition of Torture or Other Cruel, Inhuman or Degrading Treatment or Punishment'; against 'Sexual Exploitation and Abuse or Gender-Based Violence', 'Human Trafficking', and so on.

Generally, the Code of Conduct also makes provisioning against Slavery and Forced Labour; Discrimination; etc. while on a more specific note it also draws specific commitments regarding management and governance from the signatories. The Code also provides for its own implementation provisions wherein it is inter alia provided that "upon signature of the Code, Signatory Companies and other stakeholders will undertake to work with national standards bodies as appropriate to develop standards, with the intent that any national standards would eventually be harmonized in an international set of standards based on the Code."

The Signatories to the Code have committed to the following;
a) to operate in accordance with this Code;
b) to operate in accordance with applicable laws and regulations, and in accordance with relevant corporate standards of business conduct;
c) to operate in a manner that recognizes and supports the rule of law; respects human rights, and protects the interests of their clients;
d) to take steps to establish and maintain an effective internal governance framework in order to deter, monitor, report, and effectively address adverse impacts on human rights;
e) to provide a means for responding to and resolving allegations of activity that violates any applicable national or international law or this Code; and  
f) to cooperate in good faith with national and international authorities exercising proper jurisdiction, in particular with regard to national and international investigations of violations of national and international criminal law, of violations of international humanitarian law, or of human rights abuses.
An interesting development, one must say.

30 Dec 2010

No deportation of major married daughter at instance of foreign father: High Court

Dismissing the petition of an Bangladeshi father seeking deportation of her daughter married to an Indian back to Bangladesh, the Delhi High Court in a recent decision ABDUS SABUR KHAN v. UNION OF INDIA declared that such deportation cannot be granted for a major daughter. Authored by the Chief Justice of the High Court himself, the decision held that when the Central Government was satisfied that there was fear of death of the daughter in case she was deported, the High Court took note of the prevailing instance of honour killing and declared that it would not lend credence to any action which may lead to such killing.
The High Court inter alia declared as under;
7. In this context, we may refer with profit to Section 3A of the Foreigners Act, 1946 which reads as follows:
“3A. Power to exempt citizens of Commonwealth countries and other persons from application of Act in certain cases. – (1) The Central Government may, by order, declare that all or any of the provisions of this Act or of any order made thereunder shall not apply, or shall apply only in such circumstances or with such exceptions or modifications or subject to such conditions as may be specified in the order, to or in relation to – (a) the citizens of any such Commonwealth country as may be so specified; or (b) any other individual foreigner or class or description of foreigner. (2) A copy of every order made under this section shall be placed on the table of both Houses of Parliament as soon as may be after it is made.”
On a reading of the aforesaid provision, it is crystal clear that the Central Government has the power to declare all or any of the provisions of the Act or of any order made thereunder not applicable to a citizen of specified commonwealth country. There are certain riders apart from the stipulation that copy of every order made under the said Section is required to be placed on the table of both Houses of the Parliament. Thus, there are immense safeguards and guidelines inbuilt in the said provision. This Court in its power of judicial review is only required to see whether a decision taken by the Central Government at this stage dealt with the case appositely regard being had to the representation made by the daughter of the appellant or passed an order in a routine or mechanical manner. The reasons indicated therein clearly show that there has been application of mind, survey of facts, analysis of the situation and consideration of the factual score from human rights perspective. Thus, it would be inapposite to accept the apprehension of the appellant that his daughter might be involved in any kind of trafficking. The daughter, as the facts exposit, is a major. She has a choice to lead her individual life. There may be cases where a father in certain circumstances may think of filing a habeas corpus petition in case the daughter is detained in illegal custody. But when a public authority has examined her and recorded the satisfaction that she is married to Zubair Khan and has been blessed with a daughter, the said ground also melts into insignificance. On the contrary, the apprehension expressed by the daughter before the competent authority of the department, we are disposed to think, is absolutely sanguine. She has the fear not of her life in case she is deported but also that of her daughter. When a statutory provision empowers the Central Government to take a decision and when a danger to life has been canvassed and the same has been accepted by the authority on proper scrutiny of the material, it can be stated with certitude that the decision rendered is in accord with the constitutional philosophy of India, the statutory protection and declaration of human rights. It is apt to note that a human right is a basic right, a natural right. It cannot be crucified or brought to a state of comatose because of maladroit design of a headstrong father. It can only be said that the father has exhibited obstinacy and stubbornness in a bad cause. The father may harbour a feeling that it is the defeat of his family but a defeat of this nature is not to be given any kind of acceptation.
8. In Sangita Rani (Smt) Alias Mehnaz Jahan v. State of Uttar Pradesh and another, 1992 Supp (1) SCC 715 a three-Judge Bench of the Apex Court while dealing with a petition preferred under Article 32 of the Constitution of India had not only quashed the FIR taking note of the fact that the boy and the girl had already been married and the marriage had been registered in court but also cautioned the parents to accept the situation and create no problem for her daughter and her husband.
9. In this context, we may refer with profit to the decision in Lata Singh v. State of U.P. & Anr., AIR 2006 SC 2522, wherein a two-Judge Bench of the Apex Court has opined thus:
“18. We sometimes hear of 'honour' killings of such persons who undergo inter-caste or inter-religious marriage of their own free will. There is nothing honourable in such killings, and in fact they are nothing but barbaric and shameful acts of murder committed by brutal, feudal minded persons who deserve harsh punishment. Only in this way can we stamp out acts of barbarism.”
10. We may hasten to add though the said decision was rendered in a different context but we have referred to the same because their Lordships have shown their concern with regard to 'honour killing' and in the case at hand the apprehension expressed by the daughter before the competent authority of the Central Government speaks eloquently about the danger to life she would face if she goes back to her father in Bangladesh because of the honour which the father harbours in a different way.
11. The parental unwanted and unwarranted intervention in the lives of major children is sometimes writ large. In the name of honour-individual, family and community apart from torture murder also takes place. Honour killing cannot be countenanced in a civilized society and more so in a body polity governed by rule of law, for right to life is sacred and sacrosanct. One may treat that it is an affair of honour and he would go to any extent for the cause of his honour but by such an idea he cannot have the feeling of a victor and the sufferer at his hand a vanquished one. India, is governed by the resplendent philosophy of the compassionate Constitution of India which puts life at the greatest pedestal and in such a system an arbitrary rule, the fashionable world of honour to commit offences or to trespass into others' individual living is totally impermissible. The concept of social expulsion or suspension or even for that matter a perverse notion of self-respect cannot be countenanced. True it is, Mr. Bhushan, learned senior counsel for the appellant urged with immense vehemence about the locus standi of the father and his concern but we are of the considered opinion in the present case that both the concepts are bound to collapse like a pack of cards as the facts are tell tale to fresco the picture that the appellant as a father has an agenda of vendetta and not of real concern.
12. Ex consequenti, we do not find any merit in this appeal and dismiss the same. Ordinarily, we would have imposed exemplary costs but we have refrained from doing so. We are disposed to think, a misguided father requires more of therapeutic treatment rather to face the burden of costs.

Discretion of Court: The concept examined

Discretion of a judge is what the swings the pendulum in favour of the right and against the wrong. It is the discretion and the reason of the person which makes him fit for public office. The ability of decide and also the power to decide are the essential ingredients of discretion vested in a judge. In a recent reported order [Harish Vithal Kulkarni v. Pradeep Mahadev Sabnis, AIR 2010 Bom 178] the then Chief Justice of the Bombay High Court Justice Swatanter Kumar (now a judge of the Supreme Court) has, sitting in a Full Bench of the High Court, explained the concept in the following terms;
19. Discretion is power of the Court or Arbitrators to decide as they may think fit. In the Second Edition of The Supreme Court on Words and Phrases [(19502008) edited by Justice R.P. Singh, Ashoka Law House, New Delhi (India)], the word “discretion” is explained as follows:“
Discretion” – Power of the court or arbitrators to decide as they think fit. The word ‘discretion’ connotes necessarily an act of a judicial character, and, as used with reference to discretion exercised judicially, it implies the absence of a hard and fast rule, and it requires an actual exercise of judgment and a consideration of the facts and circumstances which are necessary to make a sound, fair and just determination, and a knowledge of the facts upon which the discretion may properly operate. [ Corpus Juris Secundum, Vol. 27, p. 289 as referred in Aero Trader [P] Ltd. V. Ravinder Kumar Suri, [2004]8 SCC 307: [2004]6 SLT 428, SCC p. 311, para 6 : SLT at p. 430 para 6.] 
‘A discretion’, said Lord Wrenbury, ‘does not empower a man to do what he likes merely because he is minded to do so, he must in the exercise of his discretion do not what in the exercise of his discretion do not what he likes but what he ought. In other words, he must, by the use of his reason, ascertain and follow the course which reason dictates.’ [Roberts v. Hopwood 1925 AC 578 : 1925 All ER Rep 24 [HL].] This approach to construction has two consequences: the statutory discretion must be truly exercised, and when exercised it must be exercised reasonably. [Maxwell] ‘Discretion’, said Lord Mansfield in R.v. Wilkes, [1970] 4 Burr 2527 : [15581774] All ER Rep 570 :98 ER 327 [HL], ‘when applied to a court of justice, means sound discretion guided by law. It must be governed by rule, not by humour, it must not be arbitrary, vague, and fanciful, but legal and regular.’ [ See Craies on Statute Law, 6th Edn., p. 273.]
Discretion means when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion : Rooe’s case [1598] 5 Co Rep 99b, 100a : 77 ER 209 according to law, and not humour. It is to be not arbitrary, vague and fanciful, but legal and regular. Lord Hulsbury, L.C. in Susannah Sharpe v. Wakefield, 1891 AC 173 : [1886 90] All ER Rep 651 [HL], at p. 179 referred to in Siben Kumar ‘Mondal v. Hindusthan Petroleum Corpn. Ltd., AIR 1995 Cal 327 [AIR at pp. 33335]. 
When anything is left to any person, Judge or Magistrate to be done according to his discretion, the law intends that it must be done with sound discretion, and according to law [Tomlin]. In its ordinary meaning, the word signifies unrestrained exercise of choice or will; freedom to act according to one’s own judgment; unrestrained exercise of will; the liberty of power of acting without other control than one’s own judgment. But, when applied to public functionaries, it means a power or right conferred upon them by law, of acting officially in certain circumstances according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. Discretion is to discern between right and wrong; and therefore whoever hath power to act at discretion, is bound by the rule of reason and law. 2 Inst. 56, 298; Tomlin.
Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection; deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth between wrong and right, between shadow and substance, between equity and colourable glosses and pretenses, and not to do according to the will and private affections of persons.
The very word discretion standing single and unsupported by circumstances signifies exercise  of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. Lalbhai Tricamlal v. Municipal Commr., Bombay, ILR [1909] 33 Bom 334; 10 Bom LR 821. The word ‘discretion’ in itself implies vigilant circumspection and care; therefore where the legislature concedes wide discretion it also imposes a heavy responsibility. Ibrahim v. Emperor, AIR 1933 Sind 49 : 34 Cr LJ 591.”
20. The discretion of a Court is called judicial discretion and is regulated by well settled principles of law. The court has to examine the facts and circumstances of the case and keeping  in view the provisions of Order 18 Rule 4 as a whole has to pass an appropriate order and direction whether cross examination of a witness is to be conducted before the Court or Commissioner appointed by it. Discretion of the Court cannot be taken away by any interpretative process particularly when it is unambiguously provided for by the legislature itself. There is inbuilt element of judicial discretion and deprivement of such a power is impermissible in light of the scheme of the Code of Civil Procedure and settled canons of law. In terms of Section 151 of the Code of Civil Procedure, 1908, inherent powers are vested in Court by the legislature which necessarily imply exercise of judicial discretion appropriately and in consonance with the settled precepts .

29 Dec 2010

Social ethos responsible for female foeticide: High Court

Ruefully noting the plight of the a new-born girl child in India which is strangulated after taking the first breath itself, the Delhi High Court in a recent decision (Manju v. State) has in no uncertain terms criticized the society-strata for having built a structure where the girl child is killed for no fault of its. Being of the view that an illiterate mother, who had been married at the early age of 15 years, should not be along held accountable for the murder of the girl child but it was the entire society which was responsible for such a scenario, the High Court grim-fully noted the state-of-affairs prevailing in the country.

A Division Bench of Justice PRADEEP NANDRAJOG and Justice SURESH KAIT noted the social contours in which a girl child in born in India in the following terms;
1. She was a baby girl and her arrival was a calamity. She was a baby girl and was a source of anxiety to her parents, for in her, they saw a difficult problem of her marriage. She became their compulsion. The very thought of her marriage was enough to ruin them. She was a poor little thing and the blocking of a puff of wind was enough to put her out.
2. The society had scripted her obituary much before she was born. Her mother only published it.
3. This is the story of the unnamed infant; probably this is the first decision which cannot even refer to the victim by her name. She had none!
4. We do not know whether any spirituality transcends human life, for what happens after death, we know not. But it is recognized and accepted that human personality transcends human life. For her, even this was denied.
5. Her brief existence in the world was reduced to a piece of mere statistics – A number stood added to the population of the world. – A number stood added to the female population of the world. – A number stood subtracted from the population of the world. – A number stood subtracted from the female population of the world. – The male female ratio got further imbalanced in India i.e. Bharat. – A credit entry was made in the Register of Births. – A debit entry was made in the Register of Deaths. – A smile was lost forever.
6. The moral regression of the people of India i.e. Bharat has not been crippled by the penal laws. The policy of persuasion has failed.
7. But, should the appellant who is not the architect of the crime which has been created by society i.e. female infanticide, having acted as a pawn, be made to pay for the sins of the society. She is an ignorant lady, living in a wretched condition below the poverty line. That she has affixed her left thumb impression on her statement under Section 313 Cr.P.C. is proof of her illiteracy. That she lives below the poverty line is evidenced by her address which happens to be a slum area. That she is barely able to keep intact her soul and body is proved by the fact that her husband is a daily wager.
8. A reactive process is itself an injudicious and one sided process, heavily loaded against the ignorant and the weak.
22. We quote three stanzas from the poem "Prayer Before Birth" by LOUIS MACNEICE:-
“I am not yet born, console me
I fear that the human race may with tall walls
wall me,
with strong drugs dope me,
with wise lies lure me,
on black racks rack me,
in blood baths roll me.
x x x
I am not yet born; forgive me
for the sins that in the world shall commit,
my words when they speak me,
my thoughts when they think me,
my treason engendered by traitors beyond me,
my life when they murder by means of my hands,
my death when they live me.
x x x
I am not yet born; rehearse me
in the parts I must play and the cues
I must take when old men lecture me,
bureaucrats hector me,
mountains frown at me,
lovers laugh at me,
the white waves call me to folly,
and the desert calls me to doom,
and the beggar refuses my gift,
and my children curse me.”
23. The dramatic monologue with the speaker being the unborn child brings out the concern of the unborn child as to how he would face modern humanity and asks of God or humanity to spare him terrors of modern society as are personified by blood sucking bats, stoat and club footed ghoul. There are other fears. There are barriers, drugs, lies, torture and violence. The unborn child wants to be comforted. The earth is deteriorating and the unborn child requests God to provide him these for him to grow physically, intellectually and emotionally healthy. The unborn child realizes that the modern society is losing its identity and sins are ingrained in a person from society, crime is put in him or her by society. Since the child will be a part of this world he is likely to commit sins, speak what he is taught, think the way he is trained and hence seeks forgiveness.
24. The plight of the appellant is akin to that of the unborn child.
25. No reasonable and rational person would countenance female infanticide. It is not only a penal offence but is a sin against God. The greatest gift of God to mankind is the gift of life. Children are life born not to their parents but through their parents. The problem in India is acute with contempt for the female child writ large on the spectrum of the society. Its proof is the dismal adverse male:female sex ratio where the biologically stronger sex i.e. the female sex is in the minority. 60 years of independence and so-called modernization has not changed the societal attitude towards the female child. Across the board; rural or urban, educated and uneducated, rich and poor, the skewed sex ratio adverse to the female child is a sad mirror image of the social thinking even in the 21st Century.
26. The reason is dowry at the time of marriage of the girl child. The result is the female child being looked upon and treated as a liability and a son being treated as an asset. The society forgets that a son is a son till he gets married but a daughter is a daughter all her life.
27. We wonder why India i.e. Bharat, in spite of all its talent is unable to march with the community of nations, with the head held high. Probably for the reason we treat 50% of the fellow citizens i.e. our sisters as inferior and junior partners in the march ahead without realizing that in the onward march if your fellow companion is made to lag behind, even your progress is slowed.
28. The medical papers pertaining to the appellant show that her parents married her of at the tender and immature age of 15 years. At this immature age, what role could the appellant play for herself as a housewife and a mother, except what was dictated to her and commanded upon her.
29. No doubt, by the time she became a mother, she had attained the age of majority, but that would be as per law. Whether at all can it be said that under the circumstances she was mature enough to not only think for herself but fight the social environment around her? We think not.
30. The crime against the female child is a product of the perverse social norms and the perverse social thinking and the appellant who is not only illiterate, is not only poor, lives in a slum and was married at the tender age of 15 years cannot be attributed the role of scripting the crime. She is a mere puppet with the strings being pulled by the men who lecture her. The turbulent waves of social thinking have called her to folly and the desert has called her to doom.

2G scam: Revisiting the factual matrix

For those of our readers who have missed a link (or are totally unaware) of the series of events which have led to (and are currently as well) the continuous relays on the news channels of the biggest scam ever in the largest democracy, the post of ours brings to you the Supreme Court order which chronologically and eruditely brings the facts into perspective so as to enlightened the reader as to what and how things have proceeded in the infamous 2-G spectrum scam.
The Supreme Court in its order passed on 16.12.2010 in Centre for Public Interest Litigation v. Union of India and others has noted all these factual issues to pass directions for the investigation to be undertaken by the CBI in this matter. A division Bench of the Supreme Court, comprising of Justice G.S. Singhvi and Justice Asok Kumar Ganguly noted the factual background in the following terms;
6. For detailed examination of the issues raised by the appellants, it will be useful to notice the background in which spectrum licences were given to different parties in 2008. These are:
(i) Till 1994, telecommunication services were absolute monopoly of the Government of India. In November, 1994, the Central Government framed National Telecom Policy (NTP) permitting private sector involvement in the telecommunication sector.
(ii) In the first phase, two Cellular Mobile Telephone Services (CMTS) licenses were awarded in each of the four metro cities i.e. Delhi, Mumbai, Kolkata and Chennai to the private entrepreneurs, who satisfied a predetermined set of criteria. The license fee payable by the operators was also predetermined and there was no bidding.
(iii) In the second phase, two CMTS licenses were awarded in 18 telecom circles sometime in December, 1995 through bidding process. 
(iv) In January, 1995, tenders were invited for award of Basic Service Operator (BSO) licenses for license fee payable over a period of 15 years.
(v) In 1997, Parliament enacted the Telecom Regulatory Authority of India Act (for short, ‘the Act’) for facilitating establishment and incorporation of Telecom Regulatory Authority of India (TRAI).
(vi) On 20.11.1998, Government of India constituted a high level group on telecom matters for making recommendations on three major issues including formulation of new telecom policy. The group recommended changes in the existing telecom policy and resolution of the problem of the existing operators. These recommendations were considered by the Union Cabinet, which approved the New Telecom Policy, 1999 (NTP 1999).
(vii) In July, 1999, the Central Government decided to offer migration package to the existing licensees to the revenue sharing regime under the new policy.
(viii) In 1999-2000, the Central Government granted CMTS licenses to MTNL and BSNL as third CMTS operator.
(ix) The CAG in his Report No.6 of 2000 – P&T severely criticized the concession granted by the Department of Personnel as also the offer of migration to the existing licensees. However, no concrete action appears to have been taken except that the DoT had made available para-wise reply to the CAG.
(x) In September/October, 2001, the Government accepted the recommendations of TRAI and 17 new CMTS licenses were issued to private companies as fourth operator (one each in 4 metro cities and remaining 13 in other telecom circles).
(xi) On 25.1.2001, DoT issued guidelines for issue of license for basic telephone service.
(xii) On 27.10.2003, TRAI forwarded its recommendations on Unified Licensing Regime.
(xiii) The recommendations of the TRAI were considered by the Group of Ministers (GoM), which, in turn, recommended the following course of action:
(i) ….The scope of NTP-99 may be enhanced to provide for licensing of Unified Access Services for basic and cellular licence services and unified Licensing comprising all telecom services. Department of Telecommunications may be authorised to issue necessary addendum to NTP-99 to this effect.
(ii) The recommendations of TRAI with regard to implementation of the Unified Access Licensing Regime for basic and cellular services may be accepted.
(xiv) The recommendations of GoM were accepted by the Union Cabinet in its meeting held on 31.10.2003. Thereafter, NTP 1999 was amended vide office memorandum dated 11.11.2003. On the same day, guidelines were issued for Unified Access (Basic and Cellular) Services License (UASL).
(xv) On 14.11.2003, TRAI clarified that the entry fee of the new Unified Licensee would be the entry fee of the 4th cellular operator and in service areas where there is no 4th operator – the entry fee of the existing BSO fixed by the Government (based on TRAI’s recommendations).
(xvi) In November, 2003, the DoT decided to accept and process UASL applications in the same manner as was done in the case of BSO applications.
(xvii) On 13.1.2005, TRAI recommended that till Unified Licensing comes into effect, the current regime of spectrum pricing will continue and the telecom services should not be seen as a source of revenue for the Government. On 14.12.2005, revised UASL guidelines were issued.
(xviii) On 13.4.2007, a reference was made to TRAI by the DoT stating that after finalisation of UASL policy, 159 licences had been issued for providing Access Services (CMTS/UASL/Basic) in the country and the Access Service Providers were mostly providing services by using the wireless technology (CDMA/GSM). It was also indicated that as per the existing policy of granting license, there was increase in the demand on spectrum in a substantial manner and the Government was contemplating review of its policy. A suggestion was also made that a limit can be put on the number of Access Service Providers in each service area because the spectrum is a scarce resource and to ensure that adequate quantity of spectrum is available to the licensee to enable them to provide their services and to maintain the quality of service. The issues on which opinion of TRAI was sought included transfer of licences, guidelines dated 21.2.2004 on mergers and acquisitions, to permit service providers to offer Access Service using combination of technologies (CDMA/GSM/Basic or any other) under the same license and rollout obligations.
(xix) In May, 2007, respondent No.5 took over as Minister for the Department of Telecommunications. 
(xx) The TRAI submitted its recommendations on 28.8.2007, paragraphs 2.37, 2.78 and 2.79 whereof are as under:
Para 2.37: No cap be placed on the number of access service providers in any service area.
Para 2.78: “Keeping in view the objective of growth, affordability, penetration of wireless services in semi-urban and rural areas, the Authority is not in favour of changing the spectrum fee regime for a new entrant. Opportunity for equal competition has always been one of the prime principles of the Authority in suggesting a regulatory framework in telecom services. Any differential treatment to a new entrant vis-à-vis incumbents in the wireless sector will go against the principle of playing field. This is specific and restricted to 2G bands only i.e. 800, 900 and 1800 MHz. This approach assumes more significance particularly in the context where subscriber acquisition cost for a new entrant is likely to be much higher than for the incumbent wireless operators. 
Para 2.79 It is therefore recommended that in future all spectrum excluding the spectrum in 800, 900 and 1800 bands should be auctioned so as to ensure efficient utilization of this scarce resource. In the 2G bands (800 MHz/900MHz/1800 MHz), the allocation through auction may not be possible as the service providers were allocated spectrum at different times of their license and the amount of spectrum with them varies from 2X4.4 MHz in CDMA technology. Therefore, to decide the cut off after which the spectrum is auctioned will be difficult and might raise the issue of level playing field.
(xxi) The recommendations of TRAI were placed before Telecom Commission sometime in October, 2007. However, none of the four nonpermanent members of the Telecom Commission i.e. the Finance Secretary, Secretary, Department of Industrial Policy and Promotion, Secretary, Department of Information Technology and Secretary, Planning Commission were even informed about the meeting of the Telecom Commission. In that meeting, a committee of 6 officers all belonging to DoT was constituted and the committee submitted its report on 10.10.2007 virtually dittoing the recommendations of the TRAI.
(xxii) Three of the four companies, which were providing CDMA based mobile services under UAS licence had applied in 2006 for permission to use GSM technology. At the relevant time, combination of technologies (CDMA, GSM and/or any other) was not permitted. Therefore, the DoT did not accept their request. After receipt of the recommendations of TRAI, a decision was taken by the DoT on 17.10.2007 for use of alternate technology albeit without referring the mater to full Telecom Commission. DoT issued press release on 19.10.2007 on the issue of use of alternate technology. However, a day before that i.e., 18.10.2007, three operators who had applied for use of alternate technology were given ‘in principle’ approval for using GSM technology.
(xxiii) In the meanwhile, a press note was issued by DoT incorporating therein the decision that new applications for UASL will not be accepted after 1.10.2007 till further orders. As on that date, 167 applications had been received. These included the applications which had not been processed since March, 2006. After publication of the press release, 408 more applications were received. Thus, as on 1.10.2007, 575 applications were received for UASL in respect of 22 service areas.
(xxiv) Member (Technology), Telecom Commission sent letter dated 26.10.2007 to the Secretary, Department of Legal Affairs, Ministry of Law and Justice for obtaining opinion of the learned Attorney General of India/Solicitor General of India on the issue of grant of new licences as well as grant of approval for use of dual technology spectrum to the existing operators so as to enable the DoT to handle the unprecedented situation in a fair and equitable manner, which will be equally tenable. The letter was accompanied by a statement of case.
(xxv) The Law Secretary prepared a note on 1.11.2007, which was placed before the Law Minister. The latter opined that keeping in view the importance of the case and various options indicated in the statement of case, the whole issue needs to be first considered by an empowered Group of Ministers and in that process legal opinion of the Attorney General can be obtained.
(xxvi) On the next day i.e. 2.11.2007, respondent No.5 dispatched D.O. letter to the Prime Minister in which he indicated that the suggestion of the Law Ministry was totally out of context and, at the same time, asserted that the department had decided to continue with the existing policy i.e. First-Come-First-Served for processing of applications received up to 25.9.2007 and the procedure for processing the remaining applications will be decided at the later stage, if any spectrum is available. 
(xxvii) It appears that even before the D.O. letter sent by respondent No.5 was received in his office, the Prime Minister sent a letter to him drawing his attention to the issues raised by the telecom sector companies and others on the processing of large number of applications in the backdrop of inadequate spectrum. The Prime Minister’s letter was accompanied by a note in which five issues were identified. On the same day, respondent No.5 sent another letter to the Prime Minister stating that it will be unfair, discriminatory, arbitrary and capricious to auction the spectrum to new applicants as it will not give them level playing field.
(xxviii) On 22.11.2007, the Finance Secretary wrote to the Secretary, DoT expressing his serious reservation on the decision of the DoT on the issue of determination of fee for grant of licences in 2007 at the rate determined in 2001. He emphasized that in view of the financial implications, the Ministry of Finance should have been consulted before finalizing the decision and requested that further action to implement the licences may be stayed. In reply, the Secretary DoT sent D.O. dated 29.11.2007 stating therein that entry fee was finalised for UAS regime in 2003 as per the decision of the Cabinet and the dual technology licences were issued on TRAI recommendations of 28.8.2007.
(xxix) On 3.1.2008, a meeting of full Telecom Commission was fixed for 9.1.2008 to consider the following issues: -
(i) Performance of telecom sector. 
(ii) Pricing of spectrum.
(iii) Any other item with the permission of Chairman.
However, vide letter dated 7.1.2008, Joint Secretary (T), DoT informed the members of the Commission that meeting scheduled for 9.1.2008 has been postponed to 15.1.2008.
(xxx) After three days of postponement of the meeting of Telecom Commission, a press release was issued by DoT that the department had decided to issue Letter of Intents (LOIs) only to those applicants, who had applied up to 25.9.2007. It was also indicated that the department has been implementing a policy of First-Come-First-Served for grant of UASL under which initially an application which is received first will be processed first and thereafter, LOI will be granted to those found eligible and UAS licence will be given to those whosoever complies with the conditions of LOI first. On the same day, the DoT issued another press release at 2.45 P.M. asking all the applicants to assemble at the departmental headquarter within 45 minutes to collect response of DoT. The eligible LOI holders were also asked to submit compliance of the terms of LOI within the prescribed period.
(xxxi) All the applicants, eligible or not, collected their LOIs and acceptance of 120 applications was also received on the same day. Compliance of the terms and conditions of LOI was also made for 78 applications on 10.1.2008.
(xxxii) Soon after obtaining the licences, Swan Telecom which had paid licence fee of Rs.1537 crores only off loaded its 45% stake to Etisalat for Rs.4,500 crores and Unitech, which obtained licence for Rs.1651 crores off loaded 60% of its stake to Telenor for Rs.6120 crores.
(xxxiii) S. TEL Ltd., which had submitted application pursuant to press note dated 24.9.2007 but whose application was not considered along with other applicants in view of the anti-dating of the cut off date, filed Writ Petition No. 636/2008 in the Delhi High Court for quashing first press release dated 10.1.2008. The learned Single Judge referred to the recommendation made by the TRAI that there should be no cap on the number of excess service providers in any service area and observed that on the one hand, the Government of India accepted the recommendation of the TRAI but acted just contrary by amending the cut off date and thereby limiting the service providers whose applications could be considered for grant of licence. The learned Single Judge held that there was no rational basis for fixing 25.9.2007 as the cut off date and there was no justification to change the rules of game after the game had begun. Accordingly, he allowed the writ petition and directed the respondents to consider the application of the writ petitioner for 16 circles. (xxxiv) L.P.A. No. 388/2009 filed by the Union of India against the order of the learned Single Judge was dismissed by the Division Bench and the order of the learned Single Judge was upheld.
(xxxv) Special Leave Petition No. 33406/2009 filed by the Union of India, which was converted into C.A. No. 2355/2010 was disposed of by this Court on 12.3.2010 after taking into consideration the additional affidavit filed by the writ petitioner and suggestion made by the Attorney General. However, the finding recorded by the High Court on the issue of change of cut off date was not disturbed.
(xxxvi) On 4.5.2009, appellant No.2 – Telecom Watchdog submitted detailed representation to the Chief Vigilance Commissioner (CVC) pointing out irregularities committed in the grant of UASL. After 5 days, one Shri A.K. Agarwal made a complaint to the CVC to highlight how manipulations were made by some of the applicants for getting the licences and how the exercise undertaken by the DoT for grant of UASL has resulted in serious financial loss to the public exchequer. 
(xxxvii) The CVC got conducted an inquiry under Section 8(d) of the Central Vigilance Commission Act, 2003 and noticed some grave irregularities in the grant of licences. On 12.10.2009, a copy of the report prepared on the basis of the said inquiry was forwarded by the CVC to the Director, CBI to investigate into the matter to establish the criminal conspiracy in the allocation of 2G Spectrum under UASL policy of DoT and to bring to book all wrong doers. On receipt of the aforesaid communication from the CVC, CBI registered FIR No. RC-DAI-2009-A-0045 dated 21.10.2009 against unknown officials of DoT and unknown private persons/companies and others for offence under Section 120B IPC read with Section 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988.
In this background taking note of the submissions of the parties and the allegations of corruption, the Supreme Court opined that a thorough investigation was required and thus passed the following directions;
14. We have considered the respective submissions and carefully scanned the record. We have also gone through the reports produced by Shri K.K. Venugopal and Shri Harin P. Raval. In our opinion, the Division Bench of the High Court committed a serious error by dismissing the writ petition at the threshold ignoring that the issues raised by the appellants, whose bonafides have not been doubted, are of great public importance. We are, prima facie, satisfied that the allegations contained in the writ petition and the affidavits filed before this Court, which are supported not only by the documents produced by them, but also the report of the Central Vigilance Commission, which was forwarded to the Director, CBI on 12.10.2009 and the findings recorded by the CAG in the Performance Audit Report, need a thorough and impartial investigation. However, at this stage, we do not consider it necessary to appoint a Special Team to investigate what the appellants have described as 2G Spectrum Scam because the Government of India has, keeping in view the law laid down in Vineet Narain’s case and orders passed in other cases, agreed for a Court monitored investigation. The reports produced before the Court show that the CBI and the Enforcement Directorate have started investigation in the right direction. At the same time, keeping in view the statements made by the learned Solicitor General and the learned senior counsel representing the CBI and with a view to ensure that in a serious matter like this, comprehensive and coordinated investigation is conducted by the CBI and the Enforcement Directorate without any hindrance, we deem it proper to issue the following directions: 
(i) The CBI shall conduct thorough investigation into various issues highlighted in the report of the Central Vigilance Commission, which was forwarded to the Director, CBI vide letter dated 12.10.2009 and the report of the CAG, who have prima facie found serious irregularities in the grant of licences to 122 applicants, majority of whom are said to be ineligible, the blatant violation of the terms and conditions of licences and huge loss to the public exchequer running into several thousand crores. The CBI should also probe how licences were granted to large number of ineligible applicants and who was responsible for the same and why the TRAI and the DoT did not take action against those licensees who sold their stakes/equities for many thousand crores and also against those who failed to fulfill rollout obligations and comply with other conditions of licence.
(ii) The CBI shall conduct the investigation without being influenced by any functionary, agency or instrumentality of the State and irrespective of the position, rank or status of the person to be investigated/probed.
(iii) The CBI shall, if it has already not registered first information report in the context of the alleged irregularities committed in the grant of licences from 2001 to 2006-2007, now register a case and conduct thorough investigation with particular emphasis on the loss caused to the public exchequer and corresponding gain to the licensees/service providers and also on the issue of allowing use of dual/alternate technology by some service providers even before the decision was made public vide press release dated 19.10.2007.
(iv) The CBI shall also make investigation into the allegation of grant of huge loans by the public sector and other banks to some of the companies which have succeeded in obtaining licences in 2008 and find out whether the officers of the DoT were signatories to the loan agreement executed by the private companies and if so, why and with whose permission they did so.
(v) The Directorate of Enforcement / concerned agencies of the Income Tax Department shall continue their investigation without any hindrance or interference by any one.
(vi) Both the agencies, i.e., the CBI and the Directorate of Enforcement shall share information with each other and ensure that the investigation is not hampered in any manner whatsoever.
(vii) The Director General, Income Tax (Investigation) shall, after completion of analysis of the transcripts of the recording made pursuant to the approval accorded by the Home Secretary, Government of India, hand over the same to CBI to facilitate further investigation into the FIR already registered or which may be registered hereinafter.
15. The progress reports based on the investigations conducted by the CBI and the Enforcement Directorate shall be produced before the Court in sealed envelopes on 10.2.2011.

28 Dec 2010

"Shares" different from "debt": High Court

Taking note of the time-tested distinction between 'owned capital' and 'borrowed capital', a Division Bench of the Delhi High Court in a recently reported decision [COCHIN INTERNATIONAL AIRPORT LIMITED v. PRESIDING OFFICER , DRT AND OTHERS, (2010) 173 DLT 247] has declared that intrinsically "shares" are different from "debt". Required to decide to in the context of the recovery proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (which applies for recovery of "debt") as to whether such proceedings would include within its ambit a claim to share certificates, the Delhi High Court made such declaration.

The High Court inter alia observed as under;
28. Shares in a company do not constitute debts. A company has essentially two sources of funds. One, through borrowing and, the second, through share capital. Persons who contribute towards the share capital and thereby acquire shares in a company are actually owners of the company to the extent of their shareholding. On the other hand, persons who lend money to a company are creditors and money owed to them are debts. These debts can be in the form of money loans or interest bearing debentures or other instruments of debt. But, one thing is clear and that is that shares are not part of the liabilities of a company and are not part of the total debt of the company. In fact, one of the most important fianacial analysis ratios is the debt/equity ratio. Financial institutions and banks, before they lend money to a company, examine inter alia the debt/equity ratio of that company. There are, at times, stipulations by competent statutory bodies such as the Securities Exchange Board of India (SEBI) which prescribe a maximum debt/equity ratio for companies. Generally, a debt/equity ratio of 2:1 is considered as the outer limit or extent of leverage that is permissible. What this means is that the total debts of the company cannot be more than twice its equity share capital. Or, to put it in plain words, the borrowings should not exceed twice the owners (shareholders) funds. This discussion also makes it clear that debt and equity are distinct and different.
29. In Khoday Distilleries Ltd. v. CIT:(2009) 1 SCC 256 [at page 261], the Supreme Court observed that a share is a chose-in-action. A chose-in-action implies existence of some person entitled to the rights in action in contradistinction from rights in possession. In CWT v. Mahadeo Jalan & Mahabir Prasad Jalan: (1973) 3 SCC 157, [at page 161], the Supreme Court held – Firstly, a share is not a sum of money but is an interest measured by a sum of money and made up of various rights contained in the articles of association. They are of different categories such as the equity shares, preference shares, fully paid-up shares or partly paid-up shares.... Similarly, in an earlier case [CIT v. Standard Vacuum Oil Co.: (1966) 2 SCR 367], the Supreme Court had observed that – ―A share is not a sum of money: it represents an interest measured by a sum of money and made up of diverse rights contained in the contract evidenced by the articles of association of the Company..
30. On the other hand, a debenture represents a debt. In Narendra Kumar Maheshwari v. Union of India: 1990 (Supp) SCC 440 [at page 503], the Supreme Court held:-
―A debenture has been defined to mean essentially as an acknowledgment of debt, with a commitment to repay the principal with interest (Palmer‘s Company Law, p. 672, 24th edn.). Reference, in this connection, may be made to British India Steam Navigation Co. v. IRC. A debenture may contain charge only on a part of the assets of the company (Re Colonial Trusts Corporation) or it may not contain any charge on any of its assets (See Speyer Brothers v. IRC; and Lemon v. Austin Friars Investment Trust Ltd. A debenture may, therefore, be secured or unsecured (Palmer‘s Company Law, p. 675, 24th edn.). An ordinary debenture has to be distinguished from a 'mortgage debenture‘ which necessarily creates a mortgage on the assets of a company (See Palmer‘s Company Law, p. 706). A compulsorily convertible debenture does not postulate any repayment of the principal. Therefore, it does not constitute a 'debenture‘ in its classic sense. Even a debenture, which is only convertible at option has been regarded as a 'hybrid‘ debenture by Palmer‘s Company Law (para 44.07 at page 676). In this connection, reference may be made to the 'Guidelines for the Protection of Debenture Holders' issued on January 14, 1987 which have recognised the basic distinction between a convertible and a non-convertible debenture. It is apparent that these were issued for the purpose of ensuring the serviceability and repayment of debentures on time. It has been asserted before us that the compulsorily convertible debentures in corporate practice was adopted in India some time after the year 1984. Wherever the concept of compulsorily convertible debentures is involved, the guidelines treat these as ―equity'. This is clear from guideline IV(i) read with IV(iii) of the Guidelines for Issue of Cumulative Convertible Preference Shares and guidelines 8 and 11 of the Employees Stock Option Guidelines. These two sets of guidelines clearly indicate that any instrument which is compulsorily convertible into shares, is regarded as a 'equity' and not as a loan or debt. Even a non-convertible debenture need not be always secured. In fact, modern tendency is to raise loan by unsecured stock, which does not create any charge on the assets of the company (The Encyclopaedia of Forms and Precedents, 4th edn. Vol. 6 para 17 at pages 1094, 1095 and para 22 at pages 1097-1098). Whenever, however, a security is created, it is invariably in the form of a floating charge (See The Encyclopaedia of Forms and Precedents, 4th edn. Vol. 6 para 25 at page 1099). It follows, therefore, that the secured debenture almost invariably contains a floating charge. In addition to the floating charge, debentures are frequently secured by trust deed also as had happened in the present case where specific property, land, etc. has been mortgaged to trustees.
31. Now, 'goods' have been defined in the Sale of Goods Act, 1930 to mean 'every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.'
32. But, as held in R.D. Goyal v. Reliance Industries Ltd.:(2003) 1 SCC 81 [at page 87], debentures, as ordinarily understood, would not come within the purview of the definition of goods 'as it is simply an instrument of acknowledgement of debt by the company whereby it undertakes to pay the amount covered by it and till then it undertakes further to pay interest thereon to the debenture-holders'. In R.D.Goyal (supra), it was further held:-
'Share' has been defined in Section 2(46) of the Companies Act to mean a share in the share capital of a company which in turn would mean that it would represent contribution of the shareholder towards the share capital of the company. On the other hand, a debenture is an instrument of debt executed by the company acknowledging its receipt to repay the same at a specified rate and also carrying an interest. It is in sum and substance a certificate of loan or a bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company‘s capital structure yet it does not become a share capital. In any event, a debenture would not come within the purview of the definition of goods, inasmuch as, although the shares and stocks are included in the definition of goods but debentures are not.'
33. Thus it is clear that shares are included in the definition of goods in the Sale of goods Act, 1930 and are distinct from debentures, which are not goods but instruments of debt. Shares do not represent borrowings or loans or any liability, they represent the shareholders‘ contribution towards the share capital. There is no creditor-debtor relationship between a shareholder and the company merely because of ownership of shares. On the other hand an ordinary debenture holder is a creditor of the company which had issued the debenture. The value of the debenture and the interest payable thereon is a liability of the company and is a debt owed to the debenture-holder. This distinction between a share and an ordinary debenture makes it clear that a share cannot fall within the ambit and scope of the definition of 'debt' as given in section 2(g) of the said Act.
34. This analysis reveals that the word 'debt' as defined in section 2(g) of the said Act and as used in the said Act has reference to a claim or liability in money terms whether in cash or otherwise. An example of a cash liability is a money loan simpliciter. And, an example of a liability which falls in the 'otherwise' category, is an ordinary debenture or some other debt instrument. The liability has no reference to goods and, certainly not to shares.

"Readiness" and "Willingness": The concepts revisited

The law of specific relief permits a contracting party to approach the court and require the other party to perform its side of bargain. The basis lies in equity as the contracts create legally binding relationship and thus a party cannot sit idly by and refuse to perform its obligations. However, since the approach to the court is founded on equity, it requires the petitioner/plaintiff to establish that the matter being pursued is not a stale claim. The petitioner/plaintiff is required to show his own "readiness" and "willingness" to perform his side of obligations and then only the court would require the defendant/respondent to act. Common law has for long recognized this requirement and these have found statutory backing under the Specific Relief Act of 1963 in India. 

However what remains a question of vital determination is as to the meaning of these terms; "readiness" and "willingness"; in as much as the fate of the claim hinges on their successful impleadment by the petitioner/plaintiff. Giving an articulated insight, in a recent decision [M/s J.P. Builders v. A. Ramadas Rao] the Supreme Court has explained the nuances underlying these legally established concepts in the following terms;
8) Section 16(c) of the Specific Relief Act, 1963 provides for personal bars to relief. This provision states that specific performance of a contract cannot be enforced in favour of a person,
a) who would not be entitled to recover compensation for its breach; or
b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation.- For the purposes of clause (c),- 
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.”
Among the three sub-sections, we are more concerned about sub-section(c). “Readiness and willingness” is enshrined in clause (c) which was not present in the old Act of 1877. However, it was later inserted with the recommendations of the 9th Law Commission’s report. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract which are to be performed by him.
9) The words “ready” and “willing” imply that the person was prepared to carry out the terms of the contact. The distinction between “readiness” and “willingness” is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.
10) In N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao & Ors., (1995) 5 SCC 115 at para 5, this Court held: 
“…..Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract.”
11) In P.D’Souza vs. Shondrilo Naidu, (2004) 6 SCC 649 paras 19 and 21, this Court observed:
“It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstance of each case. No strait-jacket formula can be laid down in this behalf…. The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale.”
12) Section 16(c) of the Specific Relief Act, 1963 mandates “readiness and willingness” on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. The onus is on the plaintiff. It has been rightly considered by this Court in R.C. Chandiok & Anr. vs. Chuni Lal Sabharwal & Ors., (1970) 3 SCC 140 that “readiness and willingness” cannot be treated as a straight jacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is noncompliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. “Readiness and willingness” to perform the part of the contract has to be determined/ascertained from the conduct of the parties.

Delhi Pension Scheme to Women in Distress notified

The Department of Women and Child Development of the Government of the National Capital Territory of Delhi has recently notified the National Capital Territory of Delhi Pension Scheme to Women in Distress in the age group of 18 to 60 years Rules, 2010. The objective of these Rules is to "provide social security by way of financial assistance to widows, divorced, separated, abandoned, deserted or destitute women in the age group of 18 to 60 years who have no adequate means of subsistence and are poor, needy and vulnerable".

Applicable for all “Women in Distress”, who have been defined under these rules as "any widowed, divorced, separated, abandoned, deserted/destitute women or victims of domestic violence above the age of 18 till 60 years", these Rules provide for grant of assistance to such woman at the rate of "Rs. one thousand per month per head remitted to the bank account of the beneficiary on a quarterly basis". The eligibility criteria in order to receive the grant under these Rules is four-fold, requiring the satisfaction of the following conditions;
  1. She has been residing in Delhi for more than 5 years preceding the date of application;
  2. Her family’s annual income does not exceed Rs. 60,000 (Rs. sixty thousand);
  3. She has a ‘singly-operated’ account in any Bank for receiving the payment, through electronic clearing system; and 
  4. she is not receiving any pension from Central Govt./State Govt./MCD and/or NDMC or any other source for his purpose.
The Rules provide the procedure to apply for the grant and also the conditions under which the grant once granted can be stopped or modified. While the quantum of the grant may arguably be on the lesser side, indeed the objective and the laud-ability of these grants cannot be disputed. A welcome step from the Delhi Government.

27 Dec 2010

Chief Minister not to interfere with Police functioning: Supreme Court

Taking serious exception to the role of the Chief Minister in directing police not to take action in a matter involving a particular person, the Supreme Court in a recent decision expressed its displeasure in no uncertain terms against such practices. Declaring in State of Maharashtra v. Sarangdharsingh Shivdassingh Chavan that the directions by the Chief Minister of Maharashtra (who has been mentioned and criticized by name more than once in the decision) were contrary to the republican values of our constitution and an unwarranted intervention in the role of the police, the Supreme Court imposed an exemplary cost of ten lakhs.

The Court inter alia observed as under;
2. The facts of each case, which come up to this Court and especially those which are heard at length as appeals, have a message to convey. The message conveyed in this case is extremely shocking and it shocks the conscience of this Court about the manner in which the Constitutional functionaries behaved in the State of Maharashtra.
18. Since, the learned counsel for the first respondent was arguing on the propriety of directions given by the then Chief Minister of Maharashtra and also on the propriety of Chief Minister’s Personal Secretary making telephone calls to the police station and giving instructions as to how complaints should be registered against the family of the second respondent, this Court thought that the then Chief Minister of Maharashtra, who was initially not a party to this proceeding, should be impleaded and be given a chance to make his representation before the Court. Therefore, this Court by an order dated 31st March 2010, gave notice to the then Chief Minister of State of Maharashtra, presently Union Minister, Department of Heavy Industries, Government of India and directed service of the entire paper book of Special Leave Petition on him in order to enable him to file an affidavit in the context of the letter dated 5th June 2006 sent by the Collector to the District Superintendent of the Police, Buldhana. 
19. Pursuant to the said notice an affidavit was filed by Shri Vilasrao Deshmukh, the then Chief Minister of Maharashtra. In paragraph 5 of the said affidavit the content of the letter of the Collector dated 5.6.06 was not denied. Nor was it denied that on 31.5.06, his Private Secretary made two telephone calls to the concerned Police Station enquiring about cases registered against Sananda. However, in the said affidavit Mr. Deshmukh stated that he never interfered with any pending investigation against the family of Sananda and he further stated that investigation was conducted and the chargesheet was filed.
20. Considering the entire matter in its proper perspective, this Court is of the view that the way interference was caused first from the office of the Chief Minister by his Private Secretary by two telephone calls on 31.5.2006 and the manner in which District Collector was summoned by the Chief Minister on the very next day i.e. 1.6.2006 for giving instructions to specially treat any complaints filed against M.L.A. Mr. Dilip Kumar Sananda and his family has no precedent either in law or in public administration.
21. The legal position is well settled that on information being lodged with the police and if the said information discloses the commission of a cognizable offence, the police shall record the same in accordance with the provisions contained under Section 154 of the Criminal Procedure Code. Police Officer’s power to investigate in case of a cognizable offence without order of the Magistrate is statutorily recognised under Section 156 of Code. Thus the police officer in charge of a police station, on the basis of information received or otherwise, can start investigation if he has reasons to suspect the commission of any cognizable offence.
22. This is subject to the provisos (a) and (b) to Section 157 of the Code which leaves discretion with the police officer-in-charge of police station to consider if the information is not of a serious nature, he may depute a subordinate officer to investigate and if it appears to the officer-in-charge that there does not exist sufficient ground, he shall not investigate. 
23. This legal framework is a very vital component of the Rule of Law in order to ensure prompt investigation in cognizable cases and to maintain law and order.
24. Law does not accord any special treatment to any person in respect of any complaint having been filed against him when it discloses the commission of any cognizable offence. In the context of this clear legal position which, as noted above, is a vital component of a Rule of Law, the direction of the then Chief Minister to give a special treatment to Shri Dilip Kumar Sananda, M.L.A and his family about registering of complaint filed against them is totally unwarranted in law. Mr. Vilasrao Deshmukh as the Chief Minister of State of Maharashtra is expected to know that the farmers of the State specially those in the Vidarbha region are going through a great deal of suffering and hardship in the hands of money lenders.
28. As Judges of this Court, it is our paramount duty to maintain the Rule of Law and the Constitutional norms of equal protection.
29. We cannot shut our eyes to the stark realities. From the National Crime Records Bureau (NCRB), it is clear that close to two lakh farmers committed suicide in India between 1997 and 2008. This is the largest sustained wave of suicides ever recorded in human history. Two thirds of the two lakh suicides took place in five states and those five states are Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Chhattisgarh. Even though Maharashtra is one of the richest state in the country and in its capital Mumbai twenty five thousand of India’s one lakh dollar millionaires reside, the Vidarbha region of Maharashtra, in which is situated Buldhana, is today the worst place in the whole country for farmers. Professor K. Nagraj of the Madras Institute of Development Studies who carried on a research in this area has categorized that Maharashtra could be called the graveyard of farmers.
30. The position is so pathetic in Vidarbha region that families are holding funerals and weddings at the same time and some time on the same day. In a moving show of solidarity poor villagers are accumulating their money and labour to conduct marriages and funerals of their poor neighbours. (See the report in Hindu dated 22nd May 2006).
31. This being the ground reality, as the Chief Minister of the State and as holding a position of great responsibility as a high constitutional functionary, Mr. Vilasrao Deshmukh certainly acted beyond all legal norms by giving the impugned directions to the Collector to protect members of a particular family who are dealing in money lending business from the normal process of law. This amounts to bestowing special favour to some chosen few at the cost of the vast number of poor people who as farmers have taken loans and who have come to the authorities of law and order to register their complaints against torture and atrocities by the money lenders. Theinstructions of the Chief Minister will certainly impede their access to legal redress and bring about a failure of the due process .
32. The aforesaid action of the Chief Minister is completely contrary to and inconsistent with the constitutional promise of equality and also the preambular resolve of social and economic justice. As a Chief Minister of the State Mr. Deshmukh has taken a solemn of oath of allegiance to the Constitution but the directions which he gave are wholly unconstitutional and seek to subvert the constitutional norms of equality and social justice. 
38. This Court is extremely anguished to see that such an instruction could come from the Chief Minister of a State which is governed under a Constitution which resolves to constitute India into a socialist, secular, democratic republic. Chief Minister’s instructions are so incongruous and anachronistic, being in defiance of all logic and reason, that our conscience is deeply disturbed. We condemn the same in no uncertain terms.
39. We affirm the order of the High Court and direct that the instruction of the Chief Minister to the Collector dated 5.6.06 has no warrant in law and is unconstitutional and is quashed. We dismiss this appeal with costs of Rs.10,00,000/- (Rupees Ten Lakhs) to be paid by the appellant in favour of the Maharashtra State Legal Services Authority. This fund shall be earmarked by the Authority to help the cases of poor farmers. Such costs should be paid within a period of six weeks from date.