AI Structured Summary
Not yet generated for this judgment
Judgment
P.K. Bhasin, J
This order shall dispose off two review applications filed by the appellant in the above noted two Appeals seeking review of the order dated 17.1.2018 passed in the two Appeals, one of which was against one order dated 6.1.2018 and the other was against the order dated 11.1.2018 passed by the DRT, whereby the prayer made by the appellants in both the Appeals for waiving the compliance of mandatory requirement of making pre-deposit for the entertainment of the Appeals was rejected and the appellants were directed to make the pre-deposit of 50% of the amount of the debt in dispute.
The order dated 17.1.2018, of which review is being sought and which gives relevant facts leading to the filing of the two Appeals by the same appellant-Company, is re-produced below:
"Appeal No. 14/2018 is against one order passed by the learned Presiding Officer of Debts Recovery Tribunal (DRT) on 6.1.2018 directing issuance of notice of one application moved by the appellant (being M.A. No. 01/2018) in a disposed off Original Application No. 177/2001, which had been filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ('RDDBFI Act, 1993' in short) issuance of a Recovery Certificate for recovery of huge amount of its dues which according to the Bank were recoverable from the defendants in the Original Application including the appellant herein. M.A. No. 01/2018 was filed by the appellant for seeking a declaration that the final order passed in that Original Application on 12.9.2001 as a consent order on the basis of joint application No. 668/2011 fixing the joint and several financial liability of the defendants in the O.A., including the appellant herein towards the respondent-Bank at Rs. 32,72,06,338.88 which liability however was to get satisfied upon payment of Rs. 6,68,06,800/- by the defendants in the Original Application as per one of the terms of compromise recorded in that order, was void and a nullity having been got passed by the Bank by playing fraud upon the defendants/appellant. The DRT has directed issuance of notice to the Bank of Miscellaneous Application No. 01/2018 returnable for 24.1.2018 even though the Receivers appointed by the Recovery for taking possession of the mortgaged properties in question were to visit the properties before that date on 12.1.2018. The notice of that M.A. was issued only for hearing the parties on the point of limitation at first instance. The Second Appeal (Appeal No. 19/2018) is against the order passed by the learned Presiding Officer of the DRT on 11.1.2018 in Appeal No. (not numbered) filed by the appellant/certificate debtor under Section 30 of the RDDBFI Act against one order passed by the Recovery Officer on 1.8.2017 in recovery proceedings (RC No. 04/2004) going on for the execution of another Recovery Certificate which had been issued by the Mumbai DRT in another Original Application No. 251/2003 against the appellant-Company and some others. The Recovery Officer, Delhi DRT to which the R.C. issued by the DRT Mumbai appears to have been sent for execution had vide order dated 1.8.2017 appointed two Receivers for taking over the mortgaged property and which property appears to be the mortgaged property in dispute in the other Appeal also. The appellant is assailing that order of the Recovery Officer also as being nullity. Parties in both the O.As. arising out of which the present Appeals have arisen also appear to be common. Vide impugned order dated 11.1.2018 the DRT has rejected the appellant's Appeal as not entertainable for want of compliance of the condition of pre-deposit as provided under Section 30-A of the RDDBFI Act, 1993.
In both these Appeals the same question of compliance of the mandatory condition precedent of making of pre-deposit of the 50% of the amount of debt in dispute determined by the DRT for the entertainment of the Appeals has to be decided by this Appellate Tribunal.
Mr. Deepak Khosla, learned Advocate appearing in the Appeals had submitted that the condition of pre-deposit does not get attracted in these Appeals since the appellant was seeking a declaration that the final consent order passed in the above referred Original Application No. 177/2001 was a 'void' order having been obtained from the DRT by the respondent-Bank by playing fraud and consequently a nullity in law and totally unenforceable against the defendants in the Original Application. Mr. Khosla's submission was that since the learned Presiding Officer of the DRT, Delhi has issued notice on the appellant's application seeking declaration of the order dated 12.9.2001 passed in Original Application No. 177/2001 as void because of having been obtained by the lending Bank EXIM Bank by playing fraud upon Applicants but only to have hearing on the point of limitation only at first instance that order also becomes a nullity/void as it runs contrary to the judgments of the Apex Court that an order obtained by fraud can be got declared as a void order in any proceedings before any forum at any time. The thrust of the submissions made by Mr. Khosla was that the condition of pre-deposit in Appeals against some order passed by the DRT against any order passed by the Recovery Officer or any passed by the DRT in some matter which was either pending or stood disposed, may be by a consent order, will not get attracted at all since the order which has given rise to the recovery proceedings or to filing of a miscellaneous application in the disposed off Original Application is being sought to be declared as a void order and so a nullity which cannot be executed and the Original Application in which the defendants had also raised a counter-claim for crores of rupees against the EXIM Bank, has to be revived for disposal in accordance with law after ignoring the final consent order passed in the Original Application No. 177/2001. Regarding the order passed in the Appeal filed against. RO's order the submission of Mr. Khosla was that the impugned order dated 1.8.2017 of the RO also being a nullity for the reasons pleaded by the appellant in the Appeal under Section 30 of RDDBFI Act, 1993 the DRT could not have insisted upon compliance of the condition of pre-deposit as provided under Section 30-A.
Mr. Rakesh Tiku, learned Senior Counsel appearing for the Bank has contended that for whatever relief the appellant is fighting there is no escape from the compliance of the condition of pre-deposit as provided under Section '21 of the RDDBFI Act which is mandatory in nature and unless that hurdle is crossed by the appellant here is no question of this Tribunal hearing the appellant on merits of any of the two Appeals filed by it.
I am, however, not persuaded with the submissions of Mr. Deepak Khosla that when orders of the DRT and Recovery Officers are being sought" to be declared as Void' and so 'nullity' them those orders cannot be said be 'orders' at all under the provisions of RDDBFI Act and since such like orders have no legal existence no legal proceedings initiated to have those orders declared as void can attract the requirement of pre-deposit as provided under Section 21 if the order sought to be declared as void is of DRT or as provided under Section 30-A if the order sought to be avoided being a nullity is of the Recovery Officer and declaration to that effect is being sought from the appellate forum which is the Presiding Officer of DRT.
If the legal position set at rest by various judicial pronouncements and which position is conceded to by Mr. Deepak Khosla also that any order which is considered by any litigant to be 'void' or 'nullity' or 'non existent at all in the eyes of law cannot simply be ignored by the litigant unless the same is got declared to be 'void', 'nullity' or 'unenforceable' from a Competent Court/Tribunal/Forum then there is can be no escape from the conclusion that the Forum which approached by the aggrieved litigant to have that declaration will not oblige the litigant for the asking ignoring all the hurdles created by the statues which apply to the proceedings years which has been reduced to three years under Article 113. According to the third column in Article 113, time commences to run when the right to sue accrues. The words "right to sue" ordinarily mean the right to seek relief by means of legal proceedings. Generally, the right to sue accrues only when the cause of action arises, that is the right to prosecute to obtain relief by legal means. The Suit must be instituted when the right asserted in the Suit is infringed or when there is a clear and unequivocal threat to infringe that right by the defendant against whom the Suit is instituted (See : (i) Mt. Bole v. Mt. Koklam, A.I.R. 1930 P.C. 270 and(ii) Gannon Dunkerley v. Union of India, A.I.R. 1970 S.C. 1433).
In the instant cases, the respondents were dismissed from service. May be illegally. The order of dismissal has clearly infringed their right to continue in the service and indeed they were precluded from attending the office from the date of their dismissal. They have not been paid their salary from that date. They came forward to the Court with a grievance that their dismissal from service was no dismissal in law. According to them the order of dismissal was illegal, inoperative and not binding on them. They wanted the Court to declare that their dismissal was void and inoperative and not binding on them and they continue to be in service. For the purpose of these cases, we may assume that the order of dismissal was void, inoperative and ultra vires, and not voidable. If an Act is void or ultra vires it is enough for the Court to declare it so and it collapses automatically. It need not be set aside. The aggrieved party can simply seek a declaration that it is void and not binding upon him. A declaration merely declares the existing state of affairs and does not 'quash' so as to produce a new state of affairs.
But nonetheless the impugned dismissal order has at least a de facto operation unless and until it is declared to be void or nullity by a competent body or Court. In Smith v. East Elloe Rural District Council, (1956) A.C. 736 at 769 Lord Redcliffe observed:
"An order even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."
Apropos to this principle, Prof. Wade states : "the principle must be equally true even where the 'brand' of invalidity is plainly visible; for their also the order can effectively be resisted in law only by obtaining the decision of the Court (See : Administrative Law, 6th Ed. P. 352). Prof. Wade sums up these principles:
"The truth of the matter is that the Court will invalidate an order only if 'the right remedy is sought by the right person in the right proceedings and circumstances'. The order may be hypothetically a nullity, but the Court may refuse to quash it because of the plaintiff's lack of standing, because he does not deserve a discretionary remedy, because he has waived his rights, or for some other legal reason. In any such case the 'void' order remains effective and is, in reality, valid. It follows that an order may be void for one purpose and valid for another and that it may be void against one person but valid against another." (Ibid p. 352). It will be clear from these principles, the party aggrieved by the invalidity of the order has to approach the Court for relief of declaration that the order against him is inoperative and not binding upon him. He must approach the Court within the prescribed period of limitation. If the statutory time limit expires the Court cannot give the declaration sought for."
Counsel for the respondents however, has placed strong reliance on the decision of this Court in State of M.P. v. Syed Qamarali, (1967) 1 S.L.R. 228. The High Court has also relied upon that decision to hold that the Suit is not governed by the limitation. We may examine the case in detail. The respondent in that case was a Sub-Inspector in the Central Province Police Force. He was dismissed from service on 22.12.1945. His Appeal against that order was dismissed by the Provincial Government, Central Provinces and Berar on 9.4.1947. He brought the Suit on 8.12.1952 on allegation that the order of dismissal was contrary to the para 24.1 of the Central Provinces and Berar Police Regulations and such contrary to law and void, and prayed for recovery of Rs. 4,724/- on account of his pay and dearness allowance as Sub-Inspector of Police for the three years immediately preceding the date of the institution of the Suit. The Suit was decreed and in the Appeal before the Supreme Court, it was urged that even if the order of dismissal was contrary to the provisions of law, the dismissal remained valid until and unless it is set aside an no relief in respect of salary could be granted when the time for obtaining an order setting aside the order of dismissal had elapsed. It was observed:
"We, therefore, hold that, the order of dismissal having been made in breach of a mandatory provision of the rules subject to which only the power of punishment under Section 7 could be exercised, is totally invalid. The order of dismissal had therefore, no legal existence and it was not necessary for the respondent to have the order set aside by a Court. The defence of limitation which was based only on the contention that the order had to be set aside by a Court before it became invalid must therefore be rejected."
These observations are of little assistance to the plaintiffs in the present case. This Court only emphasised that since the order of dismissal was invalid being contrary to para 241 of the Berar Police Regulations, it need not be set aside. But it may be noted that Syed Qamarali brought the Suit within the period of limitation. He was dismissed on 22.12.1945. His Appeal against the order of dismissal was rejected by the Provincial Government on 9.4.1947. He brought the Suit which has given rise to the Appeal before the Supreme Court on 8.12.1952. The right to sue accrued to Syed Qamarali when the Provincial Government rejected his Appeal affirming the original order of dismissal and the Suit was brought within six years from that date as prescribed under Article 120 of the Limitation Act, 1908.
The Allahabad High Court in Jagdish Prasad Mathur v. United Provinces Government, A.I.R. 1956 All 114 has taken the view that a Suit for declaration by a dismissed employee on the ground that his dismissal is void, is governed by Article 120 of the Limitation Act. A similar view has been taken by Oudh Chief Court in Abdul Vakil v. Secretary of State, A.I.R. 1943 Oudh 368. That in our opinion is the correct view to be taken. A Suit for declaration that an order of dismissal or termination from service passed against the plaintiff is wrongful, illegal or ultra vires is governed by Article 113 of the Limitation Act. The decision to the contrary taken by the Punjab and Haryana High Court in, these and other cases (i) State of Punjab v. Ajit Singh, (1988) 1 S.L.R. 96 and (ii) State of Punjab v. Ram Singh, (1961) 2 S.L.R. 379 is not correct and stands overruled. In the result, we allow the Appeals, set aside the judgment and decree of the High Court and dismiss the Suit in each case. In the circumstances, however, we make no order as to costs.
This judgment of the Hon'ble Supreme Court is also a complete answer to all the submissions made by Mr. Deepak Khosla orally as well as in writing. Consequently, the prayers made by the appellant for entertaining these Appeals without insisting upon compliance of the condition of pre-deposit are declined."
Instead of complying with the mandatory requirement of pre-deposit rejection of the prayer for dispensing with compliance of the condition of pre-deposit and without bothering the consequence of non-compliance of the condition of pre-deposit, which is rejection of the Appeals as not entertainable, the appellant preferred to seek review of this Tribunal's order dated 17.1.2018.
Representing the appellant/review petitioner in both the Appeals Mr. Deepak Khosla laboured very hard and extensively argued, relying upon many judicial precedents and in his usual inimitable style that while rejecting the prayer for waiver of the condition of pre-deposit for the entertainment of the two Appeals this Tribunal has relied upon one judgment of the Hon'ble Supreme Court in the case of State of Punjab v. Gurdev Singh (supra) but that Judgment of the Apex Court is per incuriam not for reason but for many reasons which had been set out in the two review applications and, therefore, the order dated 17.1.2018 passed by this Tribunal needs to be recalled. Relying upon a previous judgment passed by the Apex Court on the question of effect of 'void' orders and how those orders have simply to be ignored by all Courts/Tribunals. Mr. Khosla submitted that the relief of waiver of the condition of pre-deposit deserves to be granted by this Tribunal to the appellants and their Appeals deserve to be entertained and heard without any pre-deposit. Strong reliance was placed on the judgment of the Hon'ble Supreme Court reported as 1974 (SLT Soft) 457 : (1974) 2 S.C.C. 121, Nawabkhan Abbaskhan v. State of Gujarat, rendered prior to the decision in Gurdev Singh's case (supra) and one judgment of the Hon'ble Calcutta High Court reported as (2017) 203 Comp Cases 180, Angelo Brothers Ltd. (On lign) v. Bennett Coleman and Co. Ltd. and in which matter the decision in Gurdev Singh's (case) was considered and in which matter also Mr. Khosla had argued for one of the parties on the aspect of effect of a decree obtained by fraud and the non-applicability of law of limitation to applications seeking setting aside of such decrees on the ground of the same having obtained by practicing fraud on Court, Gurdev Singh's judgment, relied upon by this Tribunal in the order under review was not followed and ignored. It was also argued that the Supreme Court itself has in its subsequent judgment not followed its judgment in the case of State of Punjab v. Gurdev Singh (supra) relied upon by this Tribunal. It was repeatedly asked from Mr. Deepak Khosla during the course of marathon hearing even on review applications as to how a Tribunal like DRAT could ignore the judgment of the highest Court of the country. Mr. Khosla made extensive submissions to explain the principle of per incuriam.
Mr. R.P. Aggarwal, learned Counsel for the respondent, on the other hand strongly opposed the review applications mainly on the ground that the appellant-borrower is simply trying to ensure that recovery of public money of crores of rupees recoverable from under two separate recovery certificates issued by two DRTs remains unrecovered. It was also submitted that the judgment of the Supreme Court relied upon by this Tribunal in the order under review cannot be declared by this Tribunal to be per incuriam under any circumstances and is bound to be followed by every Court/Tribunals. Mr. Aggarwal also pointed out that in one judgment of the Hon'ble Delhi Court rendered on 19.1.2018 in FAO (OS) No. 359/2011, Deepak Khosla v. Vikram Bakshi, 2018 (DLT Soft) 382 (DB), which was also argued by Mr. Deepak Khosla himself in person the same judgment of Gurdev Singh case (supra) was noticed by the High Court and followed also and it was held that law of limitation applies even when some order is sought to be avoided as being 'void'.
After giving my serious consideration to the submissions made by the Counsel for the parties I have unhesitatingly come to the conclusion that the submission made by Mr. Deepak Khosla that this Tribunal should review the order under review for the reason that the judgment of the Hon'ble Supreme Court in the case of Gurdev Singh case (supra) was rendered per incuriam. This Tribunal is not-competent to give such a decision. In this regard I get full support from one judgment dated 8.12.2014 of the Hon'ble Supreme Court in South Central Railway Employees Co-op. Credit Society Employees Union v. B. Yashodabai, X(2014) SLT 337, (Civil Appeal No. 7130 of 2002) wherein it was observed as under:
"16. We are of the view that it was not open to the High Court to hold that the judgment delivered by this Court in C.A. No. 4343 of 1988 was per incuriam.
If the view taken by the High Court is accepted, in our opinion, there would be total chaos in this country because in that case there would be no finality to any order passed by this Court. When a higher Court has rendered a particular decision, the said decision must be followed by a subordinate or lower Court unless it is distinguished or overruled or set aside. The High Court had considered several provisions which, in its opinion, had not been considered or argued before this Court when C.A. No. 4343 of 1988 was decided. If the litigants or lawyers are permitted to argue that something what was correct, but was not argued earlier before the higher Court and on that ground if the Courts below are permitted to take a different view in a matter, possibly the entire law in relation to the precedents and ratio decidendi will have to be re-written and, in our opinion, that cannot be done. Moreover, by not following the law laid down by this Court, the High Court or the Subordinate Courts would also be violating the provisions of Article 141 of the Constitution of India.
For the reasons stated hereinabove, we are of the view that the learned Single Judge as well as the Division Bench of the High Court committed a serious error in law by not following the judgment delivered by this Court......"
Similar view was taken by the Hon'ble Supreme Court in Ballabhadas Mathurdas Lakhani v. Municipal Committee, Malkapur, 1970 (SLT Soft) 425 : AIR 1970 SC 1002 : (1970) 2 S.C.C. 267. The relevant observation as under:
"1. The Municipality of Malkapur recovered from the appellants Rs. 6.980 as "Bale and Boja tax" for three years 1950-51, 1951-52 and 1952-53 in respect of cotton ginned in their factory. The appellants filed a Suit in the Court of Civil Judge, Class I, Khamgaon, for an order permanently restraining the Municipality from recovering the "Bale and Boja" tax for the season 1953-54 and for subsequent seasons and for a decree refunding the amount paid and interest thereon.
The appellants contended that the levy of the "Bale and Boja" tax was ultra vires the Municipality. The Trial Court decreed the claim for injunction and also awarded the amount claimed less Rupees 750/-. In Appeal, the District Court held that the levy of tax at the rate prevailing on 31.3.1939, was saved by the provisions of Section 142-A(2) of the Government of India Act, 1935, and the Municipality was competent to levy tax at that rate. The District Court on that view modified the decree and held that the Municipality was entitled to retain Rupees 1,867/-. In Second Appeal to the High Court of Bombay at Nagpur, the following question was referred to a Full Bench:
Whether in respect of the recoveries, which are in contravention of the prohibitions contained in Sub-section (2) of Section 142-A of the Government of India Act, 1935, and Clause (2) of Article 276 of the Constitution, the provisions of Section 48(2) of the C.P. and Berar Municipalities Act, 1922 apply?
The High Court, following the judgment of this Court in Bharat Kola Bhandar v. Municipal Committee of Dhamangaon, (1965) 3 S.C.R 499, : answered the question in the negative. The Appeal was thereafter placed for hearing on questions not decided by the Full Bench. The Court at that stage entertained and upheld an objection that the Suit against the Municipality for refund of tax paid by the appellants was not maintainable. The High Court observed:
We are bound to follow the decision in Bharat Kala Bhandar v. Dhamangaon Municipality, but in view of the fact that relevant provisions were not brought to the notice of the Court and in view of the fact that the decision in Firm Radha Kishan's case, holds that the remedy provided by similar provisions is adequate and a Suit does not lie, we are constrained to hold that under the Act the Suit is incompetent.
The High Court accordingly set aside the decree in favour of the appellants for refund of tax and confirmed the injunction restraining the Municipality from recovery the tax. With certificate granted by the High Court under Article 133(1)(c) of the Constitution this Appeal has been preferred.
Two questions fall to be determined in this Appeal (1) whether a Suit for refund of tax paid to the Municipality is maintainable; and (2) if the Suit is maintainable, whether the levy of tax by the Municipality was valid in law.
The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, (1965) 3 S.C.R. 499. That case arose under the C.F. and Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66(1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a tax-payer. This Court held that levy of tax on cotton ginned by the tax-payer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a Suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court".
In view of these judgments of the Apex Court that High Courts cannot avoid to follow in the decisions of Apex Court on the ground that they were per incuriam. How can this Tribunal venture to say that the judgment in Gurdev Singh's case (supra) was per incuriam.
These two review applications are consequently dismissed and as a final opportunity for the appellants they are granted three weeks time to make the pre-deposit for the entertainment of the Appeals which shall now be taken up on 28.1.2019.