Bombay High Court
Manaj Tollway Private Limited vs The State Of Maharashtra ... on 5 March, 2021
Bench: G. S. Kulkarni
Digitally signed
by Prashant V.
Rane
Prashant Date:
V. Rane 2021.03.05
20:27:09
+0530
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
REVIEW PETITION (L.) No. 4505 of 2020
IN
COMMERCIAL EXECUTION APPLICATION NO. 310 OF 2019
State of Maharashtra through
Authorised Signatory Shri Rajendra Rahane,
(viz.The officer specially authorized by the
State of Maharashtra to file the Review Petition. ...Petitioner
(Org.Respondent)
In the matter between
Manaj Tollway Pvt. Ltd.
Company Registered under the provisions of
Companies Act,1956, having its office at
12th floor, Krushal Commercial Complex,
Chembur (West), Mumbai-400089 ...Applicant
(Decree holder/
Orig.Claimant)
vs.
State of Maharashta
Through the Secretary, Public Works Department
Mantralaya, Mumbai - 400032 ...Respondents
---
Mr. Anil Anturkar, Senior Advocate a/w. Mr. Prathamesh Bhargude, Mr.
Ranjit Shinde and Ms. Jyoti Chavan, AGP and Mr.S.B.Gore, for the
petitioner/applicant in Review Petition.
Mr. Aspi Chinoy, Senior Advocate a/w. Mr.Prasad Dhakephalkar, Senior
Advocate a/w. Mr. Cheerag Balsara, Srinivas Bobde, Kartikeya Desai, Mr.
Asadali Mazgaonwala i/b. Kartikeya & Associates for respondent in
Review Petition.
----
1/88
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CORAM : G.S.KULKARNI, J.
RESERVED ON : 21 JANUARY, 2021.
PRONOUNCED ON : 5 MARCH 2021
JUDGMENT :
1. The review petitioner is the State of Maharashtra (for short
"the State"), who is the original respondent (award debtor) in
Commercial Execution Application No.310 of 2019, filed by the
respondent-Manaj Tollway Private Limited (for short, "Manaj") (award
creditor).
2. The State has prayed for review of the consent order passed
by this Court on 12 December 2019, on the commercial execution
application, which reads thus:-
" Learned Senior Counsel for the parties have tendered
Consent Terms executed between the applicant and respondent-the
State of Maharashtra through its Secretary, Public Works
Department. The parties have agreed that the award stands
satisfied in the manner as agreed in the Consent Terms. The
Consent Terms are signed on behalf of the applicant by Mr.Navin
Ajvani, Managing Director who has authorized by the Board
Resolution dated 2 August 2017 (annexed at page 5 of the Consent
Terms) to execute the Consent Terms. On behalf of the
respondent/State Government, Consent Terms are signed by
Mr.Dhananjay Deshpande, Executive Engineer, PWD (South
Division) Pune and also they have been endorsed on behalf of the
State Government by Section Officer, PWD, Mantralaya, Mumbai,
putting his signature. The signatories to the Consent Terms are
present in the Court and are identified by their respective
Advocates. There is no dispute on the signatures made on the
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Consent Terms. The Consent Terms are accordingly taken on
record and marked "X" for identification. Execution Application
No.310 of 2019 stands disposed of in terms of the Consent Terms.
2. In view of the execution application being disposed of in
the above terms, the interim orders passed earlier on the execution
application stand vacated.
3. Parties to act on an authenticated copy of this order. As
also issuance of certified copy of the order and the consent terms is
also expedited.
4. In view of disposal of the commercial execution application,
nothing would survive in the interim application. It is accordingly
disposed of."
Proceedings Between the Parties
3. The backdrop of the litigation between the parties is required
to be noted :
On 6 July 2012 the State through its Public Works
Department (PWD) awarded to Manaj a contract for "construction and
maintenance" and for "four-laning" on Design Built Finance Operate &
Transfer basis (DBFOT), part of the Hadapsar-Saswad-Belsarphata (State
Highway No.61) and of the Belha-Pabal-Urlikanchan-Jejuri-Nira (State
Highway No.61).
4. Disputes and differences had arisen between the parties
under the said contract. Manaj ultimately terminated the contract by its
notice dated 27 March 2015 as also invoked arbitration.
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5. Mr.Justice J.A. Patil (Retd.) was appointed as a sole
arbitrator to arbitrate the disputes and differences between the parties,
who entered reference. The parties appeared before the learned sole
arbitrator and contested the proceedings. The learned arbitrator
published an award on 17 August 2018 whereby the State was interalia
directed to pay Manaj, an amount of Rs.332,66,39,870/- inclusive of
interest calculated upto 16 August 2018. The State was directed to pay
future interest on the principal sum as well as cost of arbitration, till
realization at the rate of 15% p.a. from the date of the award. In regard
to certain errors the award came to be corrected by an order dated 21
September 2018 passed by the learned arbitrator.
6. On 14 November 2018, the State being aggrieved by the
award, filed an application (No.1358 of 2018) under Section 34 of the
Arbitration and Conciliation Act,1996 (for short "the ACA") before the
Court of District Judge at Pune, praying for setting aside of the award. A
miscellaneous application also came to be filed by the State praying for
stay of the award. As there was no stay to the award, Manaj, on 25
February 2019 filed in this Court, the above execution application. The
Prothonotary & Senior Master of this Court on 13 August 2019 issued a
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Warrant of Attachment, against the State under Order XXI Rule 46 of the
Code of Civil Procedure, 1908 (for short, "the CPC") for attachment of
debt specified in the schedule to the said order and due from Reserve
Bank of India to the State Government and not secured by any negotiable
instrument. By virtue of such order, the State was prohibited from
recovering the said debt or any part thereof and the Reserve Bank of India
was prohibited from making payment of the same or any part thereof,
until further orders of the High Court or until the warrant is withdrawn.
The effect of the said order was that the bank account No.6102002003
with the Reserve Bank of India, standing in the name of Deputy Inspector
General (Stamp Duty & Registration) and Deputy Controller of Stamp and
Collector of Mumbai, was attached to the extent of Rs.353,37,33,547/-.
On 16 August 2019 Reserve Bank of India informed the Prothonotary &
Senior Master that only an amount of Rs.89,27,817/- was available in the
attached account.
7. On 20 September 2019 the learned District Judge, Pune,
rejected the State's application for stay of the award. In the meantime,
the execution proceedings were listed for hearing before this Court on 1
July 2019 and 22 October 2019. Thereafter on its listing on 11 November
2019, the Court passed the following order:-
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"1. Stand over to 25th November 2019.
Permission is granted to file reply in the office."
8. On 25 November 2019, the Court passed following order:-
"By consent stand over to 2 December 2019."
9. Thereafter On 9 December 2019 following order came to be
passed:-
"Stand over to 12/12/2019"
10. When the execution proceedings were listed on 12
December 2019, the learned Senior Counsel for the parties tendered
before the Court, consent terms dated 10 December 2019, executed
between the State of Maharashtra through its Secretary, Public Works
Department and Manaj. As the disputes stood settled between the parties
in terms of the consent terms, the Court passed an order dated 12
December 2019 under review (supra), disposing of the execution
application.
11. Having discussed the proceedings between the parties, the
background facts and circumstances which have come on record of the
present review proceedings, relevant to the parties deciding to file
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consent terms, are required to be noted.
12. On 12 November 2019 the President of India taking into
consideration the report of the Governor and being satisfied that a
situation had arisen, in which the Government of the State cannot be
carried on in accordance with the Constitution, issued a proclamation
notifying President's Rule in the State of Maharashtra. As the parties have
advanced submissions on the consequences emanating from the different
clauses of this notification, it is imperative that it is extracted. The
notification reads as under:-
" MINISTRY OF HOME AFFAIRS
NOTIFICATION
New Delhi, the 12th November, 2019.
G.S.R. 837(E).-- The following Proclamation made by the President is
published for general information :--
Whereas, I, Ram Nath Kovind, President of India, have received a report
from the Governor of the State of Maharashtra and after considering the
report and other information received by me, I am satisfied that a
situation has arisen in which the Government of that State cannot be
carried on in accordance with the provisions of the Constitution of India
(hereinafter referred to as the Constitution);
Now, therefore, in exercise of the powers conferred by article 356 of the
Constitution, and of all other powers enabling me in that behalf, I hereby
proclaim that I -
(a) assume to myself as President of India all functions of the Government
of the said State and all powers vested in or exercisable by the Governor
of that State ;
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(b) declare that the powers of the Legislature of the said State shall be
exercisable by or under the authority of Parliament ; and
(c) make the following incidental and consequential provisions which
appear to me to be necessary or desirable for giving effect to the objects of
this Proclamation, namely :--
(i) in exercise of the functions and powers assumed to myself by
virtue of clause (a) of this Proclamation as aforesaid, it shall be lawful for
me as President of India to act to such extent as I think fit through the
Governor of the said State ;
(ii) the operation of the following provisions of the Constitution in
relation to that State is hereby suspended, namely :--
so much of the proviso to article 3 as relates to the reference by
the President to the Legislature of the State ;
so much of clause (2) of article 151 as relates to the laying, before
the Legislature of the State, of the reports submitted to the Governor by
the Comptroller and Auditor-General of India ;
articles 163 and 164 ;
so much of clause (3) of article 166 as relates to the allocation
among the Ministers of the business of the Government of the State ;
article 167 ;
so much of clause (1) of article 169 as relates to the passing of a
resolution by the Legislative Assembly of a State ;
clause (1), and sub-clause (a) of clause (2), of article 174 ;
articles 175 to 177 (both inclusive) ;
clause (c) of article 179 and first proviso to that article ;
article 181, clause (c) of article 183 and the proviso to that
article ;
articles 185, 188, 189, 193 and 194 ;
articles 196 to 198 (both inclusive), clauses (3) and (4) of article
199 ;
articles 200 and 201 ;
articles 208 to 211 (both inclusive) ;
the proviso to clause (1) and the proviso to clause (3) of article
213; and
so much of clause (2) of article 323 as relates to the laying of the
report with a memorandum before the Legislature of the State ;
(iii) any reference in the Constitution to the Governor shall, in relation to
the said State, be construed as a reference to the President, and any
reference therein to the Legislature of the State or the Houses thereof
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shall, in so far as it relates to the functions and powers thereof, be
construed, unless the context otherwise requires, as a reference to the
Parliament, and, in particular, the references in article 213 to the Governor
and to the Legislature of the State, shall be construed as references to the
President and to Parliament or to the Houses thereof respectively :
Provided that nothing herein shall affect the provisions of article
153, articles 155 to 159 (both inclusive), article 299 and article 361 and
paragraphs 1 to 4 (both inclusive) of the Second Schedule, or prevent the
President from acting under sub-clause (i) of this clause to such extent as
he thinks fit through the Governor of the said State ;
(iv) any reference in the Constitution to Acts or laws of, or made
by, the Legislature of the said State shall be construed as including a
reference to Acts or laws made, in exercise of the powers of the
Legislature of the said State, by Parliament by virtue of this Proclamation,
or by the President or other authority referred to in sub-clause (a) of
clause (1) of article 357 of the Constitution, and the Bombay General
Clauses Act, 1904 (Bombay Act 1 of 1904) as in force in the State of
Maharashtra, and so much of the General Clauses Act, 1897 (10 of 1897),
as applies to State laws, shall have effect in relation to any such Act or law
as if it were an Act of the Legislature of the said State.
New Delhi ;
The 12th November, 2019. RAM NATH KOVIND,
President.
[F.No. V/11013/ 1 /2019-CSR-I]
AJAY KUMAR BHALLA,
Home Secy."
(emphasis supplied)
13. During the subsistence of the President's rule, that is on 18
November 2019, a note was initiated by the PWD department prepared
by the desk officer. On a reading of the said note it is quite clear that it
pertains to settlement of the disputes between the parties, being
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subject matter of the arbitration and the consequent award. The said note
was endorsed in approval, by several officers of the State Government in
their respective hierarchy, namely the Under Secretary; the Deputy
Secretary; Secretary (Roads) who endorsing the same requested for an
order in terms of the marked portion "X" ("{k") of the note, which was
further endorsed in approval by the Additional Chief Secretary (PWD);
the Chief Secretary to the Government on 20 November 2019 and finally
by the Hon'ble Governor on 22 November 2019. It is necessary to note the
contents of this note, which reads thus:
"[official Translation of a copy of Note, printed in Marathi.]
P.W.D./Roads - 9A
Subject :- Quadruplicating (four laning) of National Highway No.
64 from 9.800 Km to 49.860 Km at "Hadapsar - Saswad - Belsarphata
and National Highway No. 61 from 110.000 Km to 118.000 Km at Belha
- Pabal - Urulikanchan on "Build, operate and transfer" basis under
privatization.
Regarding getting permission for carrying out negotiations with
the Entrepreneur (Contractor) in view of the Awards issued by the
Arbitrator in the projects under privatization.
Submitted,
2] The work of the road mentioned under subject, has been
assigned to the Entrepreneur (Contractor) on 'Build, operate and
transfer' basis and the said Entrepreneur (Contractor) has completed the
road widening work of the length of 24.6 Km. from out of 41.06 Km.
with soil work and has completed the work of the length of 16 Km from
out of the same with graveling and asphaltation. The Hon'ble High
Court, Mumbai, by it's order dated 24/08/2017, appointed Shri. J. A.
Patil, Former Judge (Retired) as single Arbitrator, for the suits filed by
the said Entrepreneur (Contractor) in connection with the said project.
The said Arbitrator passed Award on the date 17/08/2018. (modified on
the date 21/09/2018) giving decision therein to pay to the said
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Entrepreneur (Contractor), the amount of Rs. 332,66,39,870/- and the
interest thereon at the rate of 15%.
In view of the Award passed by the Arbitrator in the present matter, the
Entrepreneur (Contractor), under his letter dated 26/11/2018, has
requested to dispose of the matter by having negotiations.
3] On taking advice of the Government Pleader in respect of
amicable settlement in another matter (Chandrapur - Warora) going on
under privatization, he has mentioned as under.
As regards arriving at amicable settlement with the Entrepreneur
(Contractor) in the matter of another project,(Chandrapur - Warora) in
view of the decision given by the Arbitrator, the opinion obtained from
Assistant Government Pleader, Chandrapur is as under :- "It would be
any time convenient to arrive at amicable settlement in the said matter.
Because, after the Appeal is preferred, there is no guarantee that the said
matter is decided in our favour. Moreover, it cannot also be said as to
exactly when the appeal would be decided and as a result, excessive
interest would be required to be paid on the amount payable in the said
Arbitration matter, which would be quite a huge amount and therefore,
it is always better to arrive at settlement. (Page No. 1855/Pa.Vi.)
Therefore, with a view to dispose of the matter as per the request of the
Entrepreneur (Contractor), by paying interest (at the rate of 12 percent
per annum) to the Entrepreneur (Contractor) at the rate at which he is
ordinarily getting loan from Bank, the proposal was submitted to the
Finance Department for approval and the Finance Department has given
the following opinion thereon.
The advice of the Law and Judiciary Department should be taken as to
whether it is useful to prefer an appeal against the Award of the
Arbitrator and if it is decided that it is not appropriate to prefer an
appeal then, there is no difficulty to pay the proposed amount by the
Public Works Department as per the negotiations.(Page No. 1842/Pa.Vi.)
In view of this, when the Law and Judiciary Department was informed
to give opinion as to whether the action taken by P.W. Department would
be consistent as per the provisions of tender or whether it would be
appropriate to prefer an appeal in the Hon'ble District Court against the
order of the Arbitrator, the Law and Judiciary Department has given the
following opinion in the matter of Chandrapur Warora Project.
"The parties cannot appeal against an arbitral award as to its merits and
the court cannot interfere in its merits. The Supreme Court has observed
"an arbitrator is a Judge appointed by the parties and as such an award
passed by him is not to be lightly interfered with." But this does not
mean that there is no check on the arbitrator's conduct in order to assure
proper conduct of proceeding, the law allows certain remedies against
an award.
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Section 34 and 37 provide for recourse against an arbitral award which
may be set aside by a court on certain specified grounds. The grounds
mentioned in section 34/37 entitles the Court to set aside an award only
if the parties seeking such relief furnishes proof as regards the existence
of the grounds mentioned therein. As mentioned above, section 34
provides for provision on the basis of which an arbitral award can be set
aside, and the Public Works Department did not mention the grounds to
set aside the arbitration award. Therefore in considered view
challenging the award passed in Arbitration Case No. ARB/RGD/172...
dated 10th September, 2018 would yield no result" (Pg. No. 1849/pa.vi.)
4) Brief information of the project.
Cost Rs. 216.00 Crores
Concession period 25 years (together with 2 years construction
period)
Government Share Rs.62.10 Crores (28.75 percent)
Approval of the Central On the date - 10/09/2010, the construction
Government's power of two lanes flyover at Phursungi is included
delegation body. afresh in original item.
Revised Project Cost Rs. 291.47 Crores.
Lowest Cost Tender Rs. 358.37 Crores (Approved in the Cabinet
received. Infrastructure Committee meeting dated -
03/08/2011)
5) Difficulties in implementing the project.
The original cost of the project was Rs.216 crores and the power
delegation body of the Central Government had granted in principle
approval on the date - 1/09/2010 and thereafter as the construction
work of two lanes railway flyover at Phursungi was included afresh, the
cost of the project increased to Rs.291.47 crores and the share of Central
Government became Rs. 58.28 Crores. However, as the cost of work
approved by the Central Government was increased and as the Tender
approval amount finally became Rs.358.37 crores, it refused to give
Rs.58.28 crores towards its share and therefore the said amount could
not become available.
After the Entrepreneur (Contractor) started the said work, some of the
farmers from khalad filed the writ petition No.6208/2013 in the Hon'ble
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High Court,Mumbai and the Hon'ble High Court gave a decision therein,
"after completing the procedure as per the Land Acquisition Act and
after the entire consideration is given to the affected farmers, the work
should be commenced and till then the work which is in progress should
be stopped". Moreover, in pursuance of the said order, even the other
persons from Saswad Village filed the writ petition No.10725/2013 in
the Hon'ble High Court and obtained stay order for the said work.
However, the work could not be completed due to the Land Acquisition
procedure and the stay order passed by the Hon'ble High Court as well
as due to the protest of Landlords. Mean time, in January 2014, a new
Land Acquisition Act came into force and as a result a huge hike in the
land acquisition cost of the project was expected.
6) From the date 27.03.2015, the entrepreneur (contractor) has
stopped the work by giving a notice of 'Closure of work'. The
Government, in view of completing the work, gave instructions to the
entrepreneur (contractor) to complete the work by revising the proposal
and cross-section in connection with the available land. However, the
entrepreneur (contractor) refused to carry out the work and as per the
Tender Clause No. 37.2.1, gave notice of 'Termination on Government
Default' and made therein a claim of total sum of Rs.358.86 Crores,
made up of 'Termination Payment Claim' of Rs.189.90 Crores and other
claim of Rs. 168.96 Crores from the Department. Further, by the letter
dated 17.11.2016, as per the provisions of the Tender Clause No.44.3,
he demanded the Government to appoint an Arbitrator, however, when
the action at the Government level was in progress, on the date
31.08.2017, he filed in the Honourable High Court a Civil Arbitration
Petition (St.) No. 22148/2017. By the Order dated 24.08.2017, the
Honourable High Court, Bombay appointed Shri J.A. Patil, Former Judge
(Retired) as Single Arbitrator and the said Arbitrator declared his Award
on the date 17.08.2018 (Modified on the date 21.09.2018.) [P. 1175-
1283/Pa.Vi.].
7) Thereafter, as per the provisions of Section 34(5) of the
Arbitration and Conciliation Act, 2015, the Executive Engineer filed a
civil application and preferred an appeal against the said Award before
the District Court and the same is pending at present. The application
was filed before the District Court to grant a provisional stay to the
Award given by the Arbitrator; however, on the date 24.09.2019, the
District Court has dismissed the said application.
In order to get the amount declared under the Award given by the
Arbitrator, the entrepreneur (contractor) had filed an Execution
Application before the Honourable High Court, Bombay, and pursuant
thereto, on the date 03.08.2019, the Honourable High Court, Bombay
has passed a Decree Order and has sealed (attached) the Account No.
6102002003 of the Stamps and Registration Department of the
Government. In order to obtain stay to the said judicial proceeding,
Application No.26 was filed before the District Court at Pune on behalf
of the Executive Engineer, however, the District Court, by its Order dated
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24.09.2019, has dismissed the said application. (P. No. 1784-1800/Pa.
Vi.). Thereafter, in order to get a Decree, the entrepreneur (contractor)
has once again filed Execution Application No. 310/2019 before the
Honourable High Court and hearing thereon is in progress before the
Honourable High Court. If the Decree is passed, possibility of the
Government's property getting attached cannot be ruled out.
In this matter, in view of the Award passed by the Arbitrator, the
Government will have to pay to the entrepreneur (contractor) an
amount to the tune of approximately Rs. 12.57 Lacs per day in the form
of an interest and the burden thereof is increasing day by day. As of
today, the amount to be paid has increased and the same has become
Rs.3,81,59,38,918/- at the interest rate of 15 per cent. (P. No. 1811/Pa.
Vi.).
8] Proposal of the Department for approval.
The Hon'ble Bombay High Court, Mumbai, by it's order dated
24/08/2017, has appointed Shri. J. A. Patil, Former Judge (Retired) as
the Single Arbitrator. The said Arbitrator has passed Award on the date
17/08/2018 and has given decision thereunder, to pay the amount of
Rs. 332,66,39,870/- togetherwith interest thereon at the rate of 15%, to
X the Entrepreneur (Contractor). The Entrepreneur (Contractor), under
his letter dated 24/11/2018 (P. No. 1189/Pa.Vi.), has requested to
("{k") finalize the matter. Therefore, approval may be granted to pay the total
sum of Rs. 35879.18 lakhs comprising of the amount of Rs.
332,66,39,870/- as per the order passed by the Arbitrator on the date
17/08/2018 and the amount of Rs. 2612.78 lakhs towards interest at
the rate fixed by the R.B.I. Bank for the period from the date
17/08/2018 to 15/11/2019.
Permission may be granted to issue memorandum after approval.
Sd/- Desk Officer
Sd/- Under Secretary (S.L.R 2)
Sd/- (D.S.) (S.L.R 2)
It is requested to grant
Sd/- Secretary (Roads)
approval to 'X'
Office of
Sd/- Addl.Chief Secretary(P.W.D.)
the A.D.S.
20/11/19
(P.W.D.)
Date :
19/11/...
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Sd/- Chief Secretary
22/11/19.
The Hon'ble Governor,
Stamp
Sd/- 22/11
14. The President's rule came to be revoked by a notification
dated 23 November 2019 issued by the Government of India.
15. After the approval to the note dated 18 November 2019 by
the Government, a note was prepared by the Desk officer on 25
November 2019, interalia recording that the Government had granted an
approval to settle the award claim at Rs. 35879.18 lakhs with interest at
RBI rates till 15 November 2019. It be enquired as to whether on the said
approved amount, Manaj (Claimant) was ready to accept simple interest
at the RBI rate, and if the claimant approves, then draft consent terms
(pg. 3-7/p.v.) be granted approval, and if such proposal is approved then,
as per letter (at pg. 1/p.v.) be permitted to be issued. Such note was
signed in approval by the Under Secretary (PWD), the Deputy Secretary;
the Secretary (Roads) and the Additional Chief Secretary (PWD) on 25
November 2019. The note reads thus:-
"[ Official Translation of a copy of Notings, printed in Marathi. ]
P. W. D./ Roads - 9 A
Subject : Quadruplicating (four laning) of National Highway No. 64 from
9.800 km to 49.860 km. at Hadapsar - Saswad - Belsarphata
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and National Highway No. 61 from 110.000 km. to 118.00 km
at Belha - Pabal - Urulikanchan on "Build, Operate and
transfer" basis under privatization.
In the High Court of Judicature at Bombay, Commercial
Execution Application No. 310 of 2019 in Arbitral Award dated
17/08/2018.
Submitted in pursuance of the hearing held before the Hon'ble High Court, Mumbai
on the date 25/11/2019.
2) The Honourable High Court, Mumbai, by it's order dated 24/08/2017,
appointed Shri. J. A. Patil, Former Judge (Retired) as Single Arbitrator, for the suits
filed by the said Entrepreneur (Contractor) in connection with the project under
subject. The said Arbitrator passed Award on the date 17/08/2018 (modified on the
date 21/09/2018) giving decision therein to pay to the said Entrepreneur
(Contractor) the amount of Rs. 332,66,39,870/- and the interest thereon at the rate
of 15%.
In view of the Award passed by the Arbitrator in the present matter, the
entrepreneur (Contractor), under his letter dated 24.11.2018, has requested to
dispose of the matter by having negotiations.
3) The entrepreneur (Contractor) has filed the Execution Application in the
Honourable Bombay High Court for getting the amount of Arbitral Award. The
Honourable High Court, Mumbai, has passed the Decree Order on the date
03.08.2019 and has attached the Account No. 6102002003 of Stamps and
Registration Department of the Government. Further, Application No. 26 was filed
in the Honourable District Court, Pune, through the Executive Engineer, to get the
stay order for the said Court proceedings. However, the Honourable District Court,
by its Order dated 24.09.2019, has dismissed the said Application. Therefore, the
Entrepreneur (Contractor) has once again filed the Execution Application No.
310/2019 in the Honourable High Court for getting the Decree and in pursuance
thereof, the hearing is in progress in the Honourable High Court.
In this matter, pursuant to the Award given by the Arbitrator, the Government will
be required to pay to the Entrepreneur (Contractor) an amount to the tune of
approximately Rs.12.57 Lacs per day in the form of interest and the burden in
respect thereof is increasing day-by-day. Thus, as of today, the amount to be paid
has increased and has become Rs.3,81,59,38,918/- at the interest rate of 15%. In
this connection, in view of the notings made on the previous page, approval to the
proposal of an amount to the tune of Rs.35,879.18 Lacs including the interest at
R.B.I. Bank Rate (Simple Interest) up the date 15.11.2019 on the Arbitral Amount
under the Award dated 17.08.2018 given by the Arbitrator, has been received from
the Governor, Maharashtra State.
In connection with the said Petition (In the High Court of Judicature at Bombay,
Commercial Execution Application No. 310 of 2019 in Arbitral Award dated
17.08.2018), Shri M.P. Vashi, Advocate for Petitioner, has shown willingness to
make negotiations in respect of the total amount of Rs.3,81,59,38,918/- being the
Arbitral Amount awarded by the Arbitrator and the interest calculated thereon at
Pvr 17 monday-final-review-petition-final.doc
present i.e. up to the date 15.11.2019 and has sought 7 days time for the same.
However, on the amount of Award declared by the Arbitrator, the approval on
Government level has been granted for total sum of Rs. 35,879.18 Lacs up to the
date 15.11.2019.
Therefore, as regards the amount, for which Government Approval is received, the
Entrepreneur (Contractor) should be informed as to whether the Entrepreneur
(Contractor) is ready to accept the interest on the Award Amount at simple interest,
as per R.B.I. Bank Rate as mentioned above and if agreed, it is proposed to inform
the Entrepreneur (Contractor) to submit Consent Terms in the Honourable High
Court accordingly. The draft of the Consent Terms has been submitted at Page 3-7/
Pa. Vi. for approval.
If approved, it will be issued under the letter at Page No. 1/Pa. Vi..
Sd/- Desk Officer,
25.11.19
Sd/- Under Secretary (SLR-2)
23.11
Sd/- Dy. Secretary (SLR-2)
25.11
Sd/- Secretary (Roads)
Sd/- Addl. Chief Secretary,
25.11.19 (P.W.D.)
25.11.20
16. In pursuance to the approval of the above note, on 25
November 2019, the Desk Officer addressed a letter to Manaj stating that
the Governor of Maharashtra had approved the payment of Rs.35879.18
lakhs (award amount of Rs.332,66,39,870/- and interest thereon at RBI
rate till 15 November 2019 at Rs.2612.78 lakhs) in settlement of the
award and called upon Manaj to communicate its acceptance thereof, as
also furnish consent terms to be presented before the High Court.
Pvr 18 monday-final-review-petition-final.doc
17. Manaj by its letter dated 26 November 2019 addressed to the
Secretary (Roads), communicated its acceptance to the said settlement.
The said letter reads thus:
"Ref.No.NGA/MTPL/1966(L)/6414/2019 Dt.26.11.2019
To,
The Secretary (Roads),
(Public Works Department),
State of Maharashtra
Madam Kama Road,
Hutatma Rajguru Chowk,
Mantralaya,
Mumbai-400 032.
Sirs,
Subject: Contract for 'Four Lanning of the Hadapsar Saswad
Belsar Phata (SH-64) Km.9/300 to 42/860 and Belha Pabal
Urulikanchan Jejuri Neera (SH-61) Km, 220/00 to 118/00 Taluka
Purandar, District Pune, between Manaj Tollway Pvt.Ltd. And the
Secretary, PWD, State of Maharashtra, Concession Agreement
dated 06/07/2012.
Ref: Your Letter No._[kk{®Lk 2008/Á.d_117/jLr¢_9v dated
25 November 2019.
th
Without Prejudice
We are in receipt of your captioned letter dated 25 th November
2019, informing us of the approval of the Hon.Governor of
Maharashtra for payment of the Arbitration Award including
interest upto 15/11/2019 amounting to Rs.358,79,18,000/-
(Rupees Three Hundred Fifty Eight Crores, Seventy Nine Lakhs,
Eighteen Thousand only) and requesting us to submit a draft of the
consent terms. Without prejudice to our rights under the Award
dated 17th August 2018 and Corrected Award dated 21st
September,2018, we accept this lump sum settlement amount of
Rs.358,79,18,000/- as on 15/11/2019 which shall accrue interest
till date of realization. As desired, please find enclosed a draft of
the Consent Terms to be filed in the Hon. High Court of Bombay
before 01/12/2019.
Pvr 19 monday-final-review-petition-final.doc
Yours Truly,
For Manaj Tollway Pvt.Ltd.
Managing Director
Encl: As above."
18. On 29 November 2019 the State through its Desk Officer
(PWD) forwarded to the Government Pleader, the mutually agreed
consent terms, to be presented before the High Court within seven days.
It was requested that an affidavit be immediately filed before the Court
and for filing of such affidavit the Executive Engineer (PWD), South
Division, Pune has been so authorised. A similar letter was addressed to
the Executive Engineer (PWD), South Division, Pune, recording that two
original copies of the consent terms were forwarded, one original consent
terms be presented to the Court through Mr.Anil Sakhare, Senior
Advocate and another original consent terms to be forwarded to the
contractor. This letter also recorded that the Executive Engineer was
authorised to present the consent terms and the affidavit before the High
Court.
19. In pursuance of the decision of the Governor dated 22
November 2019, the State Government on 12 December 2019 in its Public
Works Department issued a "memorandum" notifying the decision of the
Pvr 20 monday-final-review-petition-final.doc
State Government to pay Manaj in full and final settlement an amount of
Rs.35879.18 lakhs inclusive of interest as per the RBI rate upto 15
November 2019. It was informed that the said expenditure is notified as
Demand No.H05 interalia under the principal account Head 3054 (Roads
and Bridges). The said order was issued in the name of the Governor of
Maharashtra.
20. On such backdrop on 12 December 2019 Mr.Anil Sakhare,
learned Senior Advocate for the State alongwith the learned Senior
Counsel for Manaj tendered before the Court "consent terms" duly signed
by the concerned representatives of the parties as also countersigned by
their respective Advocates/Assistant Government Pleader. The Court
accordingly passed a reasoned order dated 12 December 2019 (supra)
accepting the consent terms, which is the subject matter of the review.
Case of the State in the Review Petition
21. The following is the case of the petitioner as pleaded in the
review petition:-
(i) An approval of the democratically elected Government was
not taken when the Consent Terms were executed between the parties on
Pvr 21 monday-final-review-petition-final.doc
10 December 2019 to be filed before the High Court, as the President's
rule in the State was only between the period 12 November 2019 upto
23 November 2019.
(ii) The persons who signed the consent terms on behalf of the
State of Maharashtra namely Shri Dhananjay Deshpande, Executive
Engineer, PWD(South Division), Pune, and the desk officer had no
authority in law to execute consent terms on behalf of the State of
Maharashtra, in the absence of approval of the democratically elected
Government, which came to power on 28 November 2019. That a false
impression was given to this Court that the persons who have made
signatures on the consent terms on behalf of the State of Maharashtra,
had authority in law to execute the consent terms.
(iii) The consent terms were submitted without consultation and
approval of the Finance Department which was mandatory under Rules of
Business.
(iv) The consent terms have been filed without seeking approval
of the Law and Judiciary Department.
(v) The consent terms are against public interest as large amount
is sought to be given to Manaj which by itself is against public interest.
There would be burden on the public exchequer at the instance of
unauthorized persons signing the consent terms.
Pvr 22 monday-final-review-petition-final.doc
(vi) That certain developments had taken place on 25 November
2019 and thereafter approval of the Governor being taken, was not
brought to the notice of the Court.
(vii) In regard to the approval note as presented before the
Governor, a prayer was made in terms of the marked portion "X" (" {k") in
vernacular). The Governor did not grant such prayers while making his
signature, construed as an absolute approval.
(viii) Further there was no approval granted by the Governor for
withdrawal of the Section 34 application as filed on behalf of the State
Government challenging the arbitral award. The consent terms for such
reasons are without authority in law and illegal.
(ix) It was not brought to the notice of the Court that it did not
have jurisdiction to entertain the commercial execution application.
It needs to be noted that no arguments were advanced in the
review petition on this plea as urged in paragraph 14 of the review
application.
22. It is on the above premise, it is prayed that the order dated
12 December 2019 (supra), passed by this Court accepting the consent
terms be reviewed and recalled and the review petition be allowed.
Pvr 23 monday-final-review-petition-final.doc
Reply Affidavit of the Respondent-Manaj
23. The petition is opposed by Manaj by filing a reply affidavit
inter-alia contending the following:-
(i) The review petition assails a consent order dated 12
December 2019, passed by this Court, there cannot be a review of a
consent order in the present facts and that too filed on 9 October 2020
after a lapse of more than 10 months from the date of the said order.
24. The review petition being filed under the provisions of Order
47 Rule 1 of the CPC, no ground falling with the purview of such
provision is made out in the review petition. The review petition hence is
ex-facie not maintainable.
25. Without prejudice to the above, it is contended that the facts
and documents on record would establish that the case sought to be made
out in the review petition, that the consent terms were not approved by
the Government which came to be constituted on 28 November 2019 is
ex-facie false and malafide. It is contended that as Manaj was seeking
attachment of movable and immovable properties of the State in the
execution proceedings, during the pendency of which the State had
shown its readiness for negotiating a settlement. It is contended that
Pvr 24 monday-final-review-petition-final.doc
thereafter on 12 November 2019 President's Rule was imposed in the
State.
26. The case of the State that there was no decision of the
Government to settle Manaj's claim or there is no decision of the State to
file consent terms, is wholly untenable, for the reason that as clearly
seen that on 18 November 2019 a departmental note was prepared by the
desk officer in regard to the settlement of the disputes arising under the
award which was endorsed by the Under Secretary; the Deputy Secretary,
Secretary (Roads) who while endorsing the same prayed for an order in
terms of the marked portion "X" ("{k") of the note. Such note was
interalia endorsed by the Additional Chief Secretary (PWD) and the Chief
Secretary to the Government on 20 November 2019 and finally by the
Governor on 22 November 2019.
27. It is contended that in pursuance of the approval granted by
the Governor, on 22 November 2019 a note was prepared by the desk
officer on 25 November 2019 recording that the Governor had approved
the proposal for settling the award claim for an amount of Rs.358.75
Crores including the interest at RBI rates till 15 November 2019. That the
note containing proposed draft consent terms was submitted for approval
Pvr 25 monday-final-review-petition-final.doc
and it was recorded that on the same being approved, the claimant/
decree holder would be informed by a letter. It is stated that the said note
was approved and signed by the Under Secretary (PWD), the Deputy
Secretary and the Additional Chief Secretary (PWD). It is contended that
the desk officer accordingly addressed a letter to Manaj dated 25
November 2019 stating that the Governor of Maharashtra had approved
the payment of Rs.35879.18 lakhs (i.e. award amount of
Rs.332,66,39,870/- and interest thereon at RBI rate till 15 November
2019 at Rs.2612.78 lakhs) in settlement of the award claim and Manaj's
acceptance thereof was sought, so that the consent terms could be
submitted before this Court. It is stated that Manaj by its letter dated 26
November 2019 accepted the settlement amount.
28. On 28 November 2019 the present Government was sworn
in. The desk officer acting in pursuance of the approval as granted by the
Governor on 22 November 2019, addressed a letter dated 29 November
2019 to the Executive Engineer, PWD, South Division, Central Building,
Pune, authorizing him to execute approved consent terms and submit the
same before this Court.
Pvr 26 monday-final-review-petition-final.doc
29. The consent terms were thereafter executed on 10 December
2019, which were signed by the Executive Engineer, Shri Dhananjay
Deshpande who came to be so authorized. It is stated that the Executive
Engineer had signed and executed the contract between the parties on
behalf of the State of Maharashtra as authorised. The consent terms were
also signed by the desk officer, Government of Maharashtra. Manaj has
contended that accordingly, the consent terms were presented before this
Court on 12 December 2019 and the order dated 12 December 2019
came to be passed by this Court, disposing of the execution proceedings
by consent. Acting under the consent terms, the State in December 2019
also released and paid Manaj an amount of Rs.1 Crore pending the
budget approval.
30. Manaj has next contended that the present Government
thereafter made a supplementary budgetary demand of Rs.600 Crores for
10 cases which included at serial No.2 the amount of Rs.357.79 Crores,
required to be paid to Manaj as per tribunal's award (i.e. Rs.358.79
Crores as agreed in consent terms minus Rs.1 Crore already paid on 13
December 2019.) It is stated that this was approved by the legislature in
the winter assembly session of 2019. This is also recorded in the
Government's note dated 27 December 2019 signed and approved by the
Pvr 27 monday-final-review-petition-final.doc
Under Secretary (Finance), the Deputy Secretary and FA, Secretary
(Works), the Additional Chief Secretary (PWD), the Additional Chief
Secretary (Finance) and the Secretary (Expenditure). This note is placed
on record at Exhibit-D to the reply affidavit. It is contended that after
such approval, a fund of Rs.357.79 Crores was made available to the PWD
on 6 January 2020 for payment to Manaj. On 6 January 2020 PWD
released the said amount of Rs.357.79 Crores to the Superintending
Engineer, Public Works Circle, Pune, to be released to Manaj.
31. As the amount was not being paid, Manaj filed in this Court
Commercial Contempt Petition (lodging) No.9 of 2020 on 17 January
2020. It is contended that even from the orders dated 21 January 2020
and 27 January 2020 passed by this Court on the said contempt petition,
the State had taken a clear position before the Court that all the
formalities to release the payment to Manaj would be completed before
29 January 2020. The Court was also informed that the amounts were
already received by the Superintending Engineer and necessary steps
would to be taken to transfer the same to the account of Manaj. It is
accordingly contended that the review petition on such facts is
misconceived, not maintainable and deserves to be dismissed.
Pvr 28 monday-final-review-petition-final.doc
Submissions on behalf of the State
32. Mr.Anturkar, learned Senior Counsel for the Petitioner has
made the following submissions supporting the prayers for review and
recall of the order dated 12 December 2019:
Principal Submissions
(I) The Governor had not taken a decision permitting settlement of the
Award or permitting the officers to file consent terms.
(II) In the alternative even assuming that the Governor had taken such
decision, the Governor had no authority to take such decision as it was
necessary to take approval of the democratically elected Government so
that there is a continuous authorization.
(III) Fraud was played on the Governor as also on this Court in
submitting the consent terms signed by an officer who had no authority to
settle the dispute and to make payment of the amount under the consent
terms and withdraw the execution proceedings.
(IV) Endorsement of the Governor on 22 November 2019 on the note
dated 18 November 2019 was a mere file noting and not a decision or an
order of the Governor permitting settlement of the dispute. A specific
prayer in the submission of the Secretary (Roads) by making the portion
Pvr 29 monday-final-review-petition-final.doc
as "X" ("{k") was sought for, however such approval was not granted by
the Governor. Also as per the last paragraph of the submission no formal
memorandum was issued notifying the decision of the Governor. As to
how the higher officers in the department understood the Governor's
approval, is seen from the affidavit of Shri.Manoj Saunik, Additional Chief
Secretary, in paragraph no.19 (page 394) of his reply affidavit in
Contempt Petition (Lodg) no.9 of 2020, where he has stated that it was a
mere file noting and not an order. In support of the submission that mere
file noting would not amount to an order passed by the Hon'ble Governor,
reliance is placed on the decision of the Supreme Court in Pimpri
Chinchwad New Township Development Authority Vs. Vishnudev Co-
op.Housing Society {2018(8) SCC 215.}
33. Other submissions of Mr. Anturkar
(I) Mr.Anturkar would submit that any decision of the
Government is issued in the name of the Governor as per the requirement
of Article 166(2) of the Constitution. According to him such
memorandum was not issued in regard to the decision taken by the
Governor on 22 November 2019. He submits that surprisingly each and
every officer understood the approval of the Governor as made on the
note on 22 November 2019, as a notification issued under sub-clause (2)
Pvr 30 monday-final-review-petition-final.doc
of Article 166 of the Constitution.
(II) It is next submitted that if "the subject of the note" on which
approval of the Governor was taken, is seen, it is only an approval to have
negotiations with the respondent. It is submitted that even a reading of
the note dated 18 November 2019 raises a doubt, as to whether there
was at all, any authority given to such officers even to negotiate. Hence
the approval of the Governor is no approval in law.
(III) Mr.Anturkar would submit that on 23 November 2019, a
democratic Government under the leadership of Shri.Devendra Fadnavis
and Shri.Ajit Pawar was formed. He submits that immediately after such
Government was formed, execution proceedings were listed before the
Court 25 November 2019 at which point of time the Court was also not
informed of the approval given by the Governor. It is submitted that
thereafter on 28 November 2019 the present Government under the
leadership of Shri.Uddhav Thackeray, the present Hon'ble Chief Minister
was formed. Mr.Anturkar submits that on 9 December 2019 which is
during the period the present Government had taken over, the execution
application was listed before the Court, even on such occasion, the Court
was not informed that there was an approval that of the Governor to file
Pvr 31 monday-final-review-petition-final.doc
consent terms and not of the democratically elected government and
thereafter, on 12 December 2019, the Court was called upon to pass an
order accepting the consent terms entered between the parties. It is hence
submitted that the Governor had never issued any specific approval for
filing of the consent terms. Also the Government did not authorise any
officer for filing any affidavit so as to bind the Government or to sign the
consent terms. Mr.Anturkar submits that there was no specific order of
the Government as to who would furnish an undertaking to the Court. In
supporting such submissions, Mr.Anturkar has referred to the Rules of
Business. He would submit that the Secretary to the Government is not
the Government or the Minister who is authorised to grant approval, as
an approval is required to be granted by the concerned Ministry. He
submits that the Government of Maharashtra would be the Governor
alongwith the Cabinet Ministers, after the formation of the Government.
He submits that no decision was taken by the Government of Maharashtra
on the issue of consent terms as per Government's Rules of business. In
this context he has referred to Rule 4 and Rule 11 of the Rules of
Business.
(IV) Mr.Anturkar submits that although on 12 November 2019 in
terms of the proclamation issued under Article 356 of the Constitution,
Pvr 32 monday-final-review-petition-final.doc
President's Rule was notified in the State of Maharashtra. By virtue of
such notification, operation of the certain provisions of the Constitution in
relation to the State came to be suspended and in the present context,
Article 163 ("Council of Ministers to aid and advise Governor") and
Article 164 ("Other provisions as to Ministers") came to be suspended as
also so much of clause 3 of Article 166 as it related interalia to the
allocation. It is his submission that the Rules of Business of the State
Government which are required to be applied for Government's business
in terms of clause (2) of Article 166 were not suspended and were in
operation during the period of the President's Rule. It is submitted that
after formation of the Government either on 23 November 2019 or 28
November 2019, under the said rules, it was the requirement in law that
the Government approves a decision to agree to a settlement and to pay
the award amount to the respondents and for further steps to be taken to
sign consent terms, file the same in the Court and also withdraw the
proceedings filed under Section 34 of the Arbitration and Conciliation
Act, 1996 pending before the Court of District Judge at Pune. Such
decisions are not consequential decisions, but are independent decisions
which are required to be taken by the Government and not by the
Secretaries who are employees of the Government. These decisions are
required to be taken by the Cabinet as per the Rules of Business, which
Pvr 33 monday-final-review-petition-final.doc
were in operation. In this context, reference is made to Rule 10 of the
Maharashtra Government Rules of Business. It is next submitted that
Rule 11 thereof interalia requires that no department shall, without
consultation with the Finance Department, authorize any order either
immediately or by their repercussion, will affect the finance of the State.
He thus submitted also an independent approval of the Finance
Department for such settlement was necessary. It is submitted that there
is a serious doubt in regard to the approval and to the sanctity of the note
dated 6 January 2020, in regard to the consultation with the Finance
Department. In support of the above submissions Mr.Anturkar has relied
on the decisions in Bal Kalyani And Others vs State Of Maharashtra And
Others, AIR 1993 Bom. 10 (Division Bench); M/S. M.R.F. Ltd vs Manohar
Parrikar & Ors., 2010(11) SCC 374; and Narmada Bachao Andolan vs
State Of M.P. & Anr., 2010(12) SCC 333.
(V) Mr.Anturkar would next refer to paragraph 13 of the affidavit
dated 24 September 2020, of Shri.Manoj Saunik, Additional Chief
Secretary, Public Works Department who was also holding charge of the
Additional Chief Secretary, Finance Department, to contend that although
he has made a remark on the note dated 6 January 2020 prepared by the
Desk Officer of the Finance Department in relation to the proposal to be
Pvr 34 monday-final-review-petition-final.doc
placed before the legislature, on the expenditure to be incurred in regard
to the amount to be paid to Manaj, however, in deposing to such affidavit
he had forgotten his earlier affidavit (affidavit dated 21 February 2020) in
which he had annexed the same document, however, without his
signature (page 284 of the contempt petition). This according to
Mr.Anturkar raises a grave doubt on the sanctity as accorded by the
Finance Department to any budgetary provision being made so as to pay
the purported settlement amount to Manaj. It is Mr.Anturkar's submission
that for such reason it is clearly discerned that there was no prior
consultation with the Finance Department as required by the Rules of
Business which framed by the Governor exercising powers under sub-
clause (3) of Article 166 of the Constitution. Mr.Anturkar has submitted
that the consent terms are thus illegal in the absence of any decision of
the State Government to enter into a settlement with Manaj. It is
submitted that a decision of an officer is not the decision of the State
Government.
(VI) Mr.Anturkar would next submit that the consent terms as
entered between the parties bring about a fresh contract between the
State Government and Manaj. Referring to Article 299 of the Constitution,
it is submitted that in order to execute such new contract with the State
Pvr 35 monday-final-review-petition-final.doc
Government, it was required to be executed with the Governor. He
submits that even on this count, consent terms are illegal, as they do not
fulfill the requirement of Article 299 of the Constitution and the same
cannot be binding on the parties.
(VII) Mr.Anturkar would next submit that the signature of the
learned Assistant Government Pleader (AGP) on the consent terms do not
convey any meaning in law so as to attribute any legality or sanctity to
the consent terms. He has drawn the Court's attention to the averments as
made in paragraph 10 of the Review Petition, to contend that the learned
AGP who signed the consent terms had no authority to do so, as also he
did not apply his mind. In this context reliance is placed on the decision
of the Supreme Court in Y. Sleebachen and others Vs. State of Tamil Nadu
and another, (2015) 5 SCC 747. Mr.Anturkar has also referred to the
provisions of Order XXVII Rule 8B of the Civil Procedure Code to contend
that the empanelled AGP is not a Government Pleader for the purpose of
Order XXVII. On the above submission Mr.Anturkar would submit that the
order under review be recalled and set aside.
(VIII) Mr.Anturkar relying on the decisions in Municipal
Corporation of Gr.Mumbai & Anr. Vs. Pratibha Industries Ltd. & Ors.
Pvr 36 monday-final-review-petition-final.doc
[(2019)3 SCC 203]; Commissioner of Income Tax, Guwahati VS.
Meghalaya Steels Ltd., [(2015)17 SCC 647]; Dadu Dayal Mahasabha vs.
Sukhdev Arya & Anr, [(1990)1 SCC 189]; N.Mani Vs. Sangeetha Theatre
& Ors. [(2004)12 SCC 278], would contend that the High Court has
plenary powers to review its orders in addition to its jurisdiction under
the provisions of Order 47 Rule 1 of the CPC. He refers to the powers of
the Court under Article 215 of the Constitution and Section 151 of the
CPC. It is his submission that the Court hence ought not to look into the
exclusive parameters of Order 47 Rule 1 of the CPC, when such other
powers are available to correct an illegality in the Courts order.
Submissions of Mr.Chinoy, learned Senior Counsel for Manaj:-
34. Mr.Chinoy, learned Senior Counsel for Manaj has made the
following submissions:-
(i) None of the grounds under Order XLVII Rule 1 read with
Rule 4 are made out by the State so as to maintain the prayers for review
of the Court's order dated 12 December 2019. The oral contentions as
urged on behalf of the petitioner are completely outside the case as
pleaded in the Review Petition.
(ii) The contentions as urged on behalf of the State would relate to
Pvr 37 monday-final-review-petition-final.doc
calling upon this Court to make a detailed inquiry on the authority,
powers of the Government, which cannot be a ground, to be categorized
as an error apparent on the face of the order, to maintain a review
petition. In supporting this contention, Mr.Chinoy has relied on the
decision of the Supreme Court in Union of India vs. Sandur Manganese &
Iron Ores Ltd. & Ors., (2013) 8 SCC 337.
(iii) The stand taken by the State Government is blatantly
dishonest, as the tenor of such submissions is to urge that a fraud is
played involving the Chief Secretary of the State, which the State intends
this Court to believe.
(iv) The decision to have an overall settlement in the manner as
effected by the consent terms was on a valid approval of the Governor
and the highest Officer in the State Government namely the Chief
Secretary. The concurrence/approval of the Governor as made on 22
November 2019 was legal and valid inasmuch as at the relevant time
there was no Council of Ministers and all powers were vested with the
Governor under Article 154 of the Constitution read with Notification
dated 12 November 2019 issued by the President of India, imposing the
President's Rule. There is no provision that after the President's Rule had
Pvr 38 monday-final-review-petition-final.doc
come to an end on 25 November 2019, all the decisions which were taken
by the Governor in exercise of his executive power would require any
further approval by the democratically elected Government and its
Council of Ministers. It is hence submitted that it is a travesty for the
State to contend that if the Governor signs any proposal in exercise of
power conferred on him by the Constitution, the same would not have
sanctity in law merely because subsequently a new Government was
formed.
(v) All actions taken by the concerned officers on the
department's note dated 18 November 2019 culminating into an
approval/order of the Governor by endorsing his signature on 22
November 2019 are in conformity with the order dated 20 November
2019 issued by the General Administration Department, during the
President's rule which provided that all matters which were required to be
put up to the Council of Ministers under Schedule II of the Rules of
Business and any such cases where the Ministers had to obtain an order of
the Chief Minister, were to be routed through the Chief Secretary of the
Maharashtra to the Governor. Hence there cannot be any argument
contrary to the Government order dated 20 November 2019.
Pvr 39 monday-final-review-petition-final.doc
(vi) It is submitted that a note dated 25 November 2019 was
prepared by the Public Works Department by which interalia the process
of approval was initiated for filing of consent terms and for issuance of a
letter accepting the settlement at an amount of Rs.35879.18 lakhs with
interest upto 15 November 2019. It is submitted that this note had
approval of the Additional Chief Secretary, PWD. It was never thought
appropriate and at any point of time to rescind the decision taken, when
at all material times there was such authority with the State to rescind
such decision of entering into the settlement. This apart even the
legislative assembly sanctioned allocation of funds qua the amount to be
paid to Manaj under the settlement. It is accordingly submitted that there
is no irregularity and/or any illegality as the Governor being an executive
Authority for the State had accorded approval for the proposed settlement
which was granted by initiation of proposal through proper channel.
Hence the contention of the State that the Government has not granted
any approval, is ex facie untenable.
(vii) Once the Governor had granted an approval, implementation
of the decision is required to be left to the officers. Later on, only
because a newly elected Government is formed, it cannot take a position,
that the earlier actions can be reviewed or issues can be reopened. It is
Pvr 40 monday-final-review-petition-final.doc
submitted that the entire case in the reply affidavit as filed by Manaj, is
required to be accepted, as there is no rebuttal to the reply affidavit.
(viii) Not only the decision to settle with Manaj was taken but
acted upon when consent terms were filed and further even the consent
terms were acted upon as part amount of Rs.1 crore was paid to Manaj in
December 2019 and a further provision being made to make the entire
payment, which was put up before the legislature for making of a
budgetary provision, which also was approved by the legislature. In such
a situation there is no scope for any argument of any fraud being played
either on the Governor or on the State Government or this Court.
(ix) It is thus submitted that the review petition is patently
misconceived and deserves to be dismissed.
Reasons and Conclusion
35. At the outset, some admitted facts are required to be noted.
Under an agreement dated 6 July, 2012 executed between the State and
Manaj, disputes had arisen between the parties which were referred for
arbitration of a learned sole arbitrator who published an award against
the State on 17 August, 2018, interalia directing the State to pay Manaj
Pvr 41 monday-final-review-petition-final.doc
an amount of Rs.332,66,39,870/- along with future interest as noted
above. The State had assailed the arbitral award in Miscellaneous
Application No. 1358 of 2018 filed before the Court of learned District
Judge at Pune filed under Section 34 of the Arbitration and Conciliation
Act 1996. As there was no stay on the execution of the award, Manaj had
filed in this Court an Execution Application on 25 February, 2019. Even
thereafter as there was stay on execution of the award, on 13 August,
2019 an order came to be passed by learned Prothonotary and Senior
Master, attaching the accounts of the State with the Reserve Bank of India
which contained an amount of Rs.89,27,817/-, an insufficient amount
considering the award amount. This necessitated Manaj to proceed
further to attach movable and immovable properties of the State, in
execution of the arbitral award. On 20 September, 2019, the learned
District Judge rejected the State's application praying for stay to the
execution of the award.
36. On this backdrop it appears that in the Public Works
Department (PWD), a note came to be prepared by the Desk Officer dated
18 November 2019, on the subject interalia of carrying out negotiations
with Manaj. Although Manaj had an award in its favour, however, Manaj
by its letter addressed a year back (dated 26 November, 2018) had
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requested the State to have negotiations/settlement and put an end to the
matter as recorded in the said note. The note recorded that Manaj had
already filed an execution application in this Court in which an order
attaching State Government's Account No. 6102002003 was passed. It
was recorded in the note that an application for stay of the award also
came to be rejected by the District Court on 24 September, 2019 and
hence it is likely that the property of the State Government would be
attached in the execution proceedings. The note also stated that on the
award amount, the State Government was incurring an interest liability of
Rs.12.57 lakhs per day and the financial burden of such amount is
increasing day by day, and that as on the date of the note (18 November
2019) an amount inclusive of interest @ 15% payable to Manaj worked
out to Rs.381,59,38,918/-.
37. A perusal of the last page of this note, a copy of which is
placed on record at pages 29 to 32 of the paper book would clearly
indicate that after it was initiated by the Desk Officer, it was endorsed in
approval by the Under Secretary, the Deputy Secretary, the Secretary
(Roads), who on 19 November, 2019 made a handwritten endorsement,
that the marked portion 'X' ("{k") be granted, which came to be
thereafter approved by the Additional Secretary on 19 November, 2019 by
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putting his signature, by the Chief Secretary Mr.Ajay Mehta on 20
November, 2019 and thereafter by the Governor on 22 November, 2019.
Thus, not only the Secretary (Roads), but the Additional Chief Secretary
PWD, the Chief Secretary of the State Ajay Mehta, approved the note by
putting their signatures and ultimately the Governor signed the same in
approval. There can be no two opinions that such method is the normal
method by which the Government proposals are initiated and decisions
taken namely that the officials make their respective signatures below
their designations, by making a strike mark on their respective
designations. It needs to be observed that such note although was
initiated by the Desk Officer for its approval, it could not have been ever
prepared by the Desk Officer in the absence of such departmental
consensus and desirability of the high officers of the State which need not
be in writing, suffice it to observe, it passed through the Under Secretary,
the Deputy Secretary, Secretary (Roads), Additional Chief Secretary
(PWD), Chief Secretary and ultimately the Governor who made his
signature on the following approval as sought in paragraph 8 of the note
which is re-extracted for convenience:-
"8..... .... Therefore, approval may be granted to pay the total sum of
Rs. 35879.18 lakhs comprising of the amount of Rs. 332,66,39,870/- as
per the order passed by the Arbitrator on 17/08/2018 and the amount of
Rs. 2612.78 lakhs towards interest at the rate fixed by the R.B.I. Bank for
the period from the date 17/08/2018 to 15/11/2019."
Pvr 44 monday-final-review-petition-final.doc
38. Mr.Anturkar is thus not correct in his contention that the
Governor had not taken a decision permitting settlement of the award or
had not granted an approval to make such payment to Manaj in
settlement or that the Governor had not granted a specific approval in
terms of what was underlined in paragraph 8 of the said note and marked
'X' ("{k"). This for the reason that such prayer and/or endorsement as
made by the Secretary (Roads) on 19 November, 2019, was fully nay
unconditionally endorsed in approval by the Additional Chief Secretary
on 19 November, 2019 as also by the Chief Secretary Mr. Ajay Mehta on
20 November, 2019 and similarly by the Governor on 22 November,
2019. It would be thus required to be held, that by following a
departmental procedure which began from the Desk Officer preparing a
departmental note, which travelled through the proper official channel,
namely, through the Under Secretary, Deputy Secretary, Secretary
(Roads), Additional Chief Secretary (PWD), the Chief Secretary of the
State and ultimately to the Governor, all endorsed a decision that the total
amount of Rs.35879.18 lakhs be paid to Manaj inclusive of interest upto
15 November, 2019. There can be no other reading of paragraph 8 and
the approval to which was granted by such officials and finally by the
Governor. There is nothing on record to show that such decision, for any
Pvr 45 monday-final-review-petition-final.doc
reason was cancelled, revoked or withdrawn by the government anytime
after 28th November 2019.
39. Now I examine Mr.Anturkar's contention that the Governor
had no authority in law to grant approval to the settlement proposal as
initiated under the department's note dated 18 November 2019. In
examining this issue at the outset it is required to be noted that in
pursuance of a report as made by the Governor on 12 November 2019,
President's rule came to be imposed in the State of Maharashtra, under a
Presidential Proclamation of the even date (supra). The President's rule
continued upto 23 November, 2019. Thus, when the said note was
initiated by the Desk officer on 18 November, 2019 till it reached the
Governor for his approval on 22 November 2019, in terms of what was
prayed for in paragraph 8 (prayer X), there was President's rule in the
State.
40. By virtue of the proclamation of President's rule, the
President of India assumed to himself all functions of the Government of
the State and all powers vested in or exercisable by the Governor of that
State under Clause (c)(ii) of the said notification the President suspended
the operation of certain provisions of the Constitution. It is imperative to
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note the contents of the proclamation which read thus:-
" MINISTRY OF HOME AFFAIRS
NOTIFICATION
New Delhi, the 12th November, 2019.
G.S.R. 837(E).-- The following Proclamation made by the President is
published for general information :--
Whereas, I, Ram Nath Kovind, President of India, have received a report
from the Governor of the State of Maharashtra and after considering the
report and other information received by me, I am satisfied that a
situation has arisen in which the Government of that State cannot be
carried on in accordance with the provisions of the Constitution of India
(hereinafter referred to as the Constitution) ;
Now, therefore, in exercise of the powers conferred by article 356 of the
Constitution, and of all other powers enabling me in that behalf, I hereby
proclaim that I -
(a) assume to myself as President of India all functions of the
Government of the said State and all powers vested in or
exercisable by the Governor of that State ;
(b) declare that the powers of the Legislature of the said State
shall be exercisable by or under the authority of Parliament ; and
(c) make the following incidental and consequential provisions
which appear to me to be necessary or desirable for giving effect to
the objects of this Proclamation, namely :--
(i) in exercise of the functions and powers assumed to myself
by virtue of clause (a) of this Proclamation as aforesaid, it
shall be lawful for me as President of India to act to such
extent as I think fit through the Governor of the said State ;
(ii) the operation of the following provisions of the
Constitution in relation to that State is hereby suspended,
namely :--
so much of the proviso to article 3 as relates to the
reference by the President to the Legislature of the State ;
so much of clause (2) of article 151 as relates to the laying,
before the Legislature of the State, of the reports submitted to
the Governor by the Comptroller and Auditor-General of
India ;
articles 163 and 164 ;
so much of clause (3) of article 166 as relates to the
allocation among the Ministers of the business of the
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Government of the State ;
article 167 ;
so much of clause (1) of article 169 as relates to the
passing of a resolution by the Legislative Assembly of a State ;
clause (1), and sub-clause (a) of clause (2), of article
174 ;
articles 175 to 177 (both inclusive) ;
clause (c) of article 179 and first proviso to that article ;
article 181, clause (c) of article 183 and the proviso to
that article ;
articles 185, 188, 189, 193 and 194 ;
articles 196 to 198 (both inclusive), clauses (3) and (4) of
article 199 ;
articles 200 and 201 ;
articles 208 to 211 (both inclusive) ;
the proviso to clause (1) and the proviso to clause (3) of
article 213; and
so much of clause (2) of article 323 as relates to the laying of
the report with a memorandum before the Legislature of the
State ;
(iii) any reference in the Constitution to the Governor shall, in
relation to the said State, be construed as a reference to the
President, and any reference therein to the Legislature of the
State or the Houses thereof shall, in so far as it relates to the
functions and powers thereof, be construed, unless the context
otherwise requires, as a reference to the Parliament, and, in
particular, the references in article 213 to the Governor and to
the Legislature of the State, shall be construed as references to
the President and to Parliament or to the Houses thereof
respectively :
Provided that nothing herein shall affect the provisions of
article 153, articles 155 to 159 (both inclusive), article 299
and article 361 and paragraphs 1 to 4 (both inclusive) of the
Second Schedule, or prevent the President from acting under
sub-clause (i) of this clause to such extent as he thinks fit
through the Governor of the said State ;
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(iv) any reference in the Constitution to Acts or laws of, or
made by, the Legislature of the said State shall be construed as
including a reference to Acts or laws made, in exercise of the
powers of the Legislature of the said State, by Parliament by
virtue of this Proclamation, or by the President or other
authority referred to in sub-clause (a) of clause (1) of article
357 of the Constitution, and the Bombay General Clauses Act,
1904 (Bombay Act 1 of 1904) as in force in the State of
Maharashtra, and so much of the General Clauses Act, 1897
(10 of 1897), as applies to State laws, shall have effect in
relation to any such Act or law as if it were an Act of the
Legislature of the said State.
New Delhi ;
The 12th November, 2019.
RAM NATH KOVIND,
President.
[F.No. V/11013/ 1 /2019-CSR-I]
AJAY KUMAR BHALLA,
Home Secy."
(emphasis supplied)
41. It is manifest from a plain reading of clause (a) of the
Presidential Proclamation that the President assumed to himself all
functions of the Government of the State and all powers vested in or
exercisable by the Governor of the State, which in the normal course
would vest with the Governor of the State as provided for in article 154 of
the Constitution. Sub-clause (c)(iii) of the proclamation amplifies as to
what was provided, in clause (a), as it clearly provides that any reference
in the Constitution to the Governor, in relation to the State be construed
to be a reference to the President, in so far it relates to the functions and
Pvr 49 monday-final-review-petition-final.doc
powers thereof. The proviso below clause (iii) also makes it clear that
nothing contained in clause (iii) shall affect the provisions of Article 153,
Article 155 to 159 (both inclusive), Article 299 and Article 361 and
paragraphs 1 to 4 (both inclusive) of the Second Schedule, or prevent the
President from acting under clause (i), to such extent as he thinks fit
through the Governor of the State. Thus a cumulative reading of clause
(a), clause (c)(ii) & (iii) along with its proviso, leaves no manner of
doubt, that the powers of the Governor were to be indubitably exercised
by the President through the Governor of the State.
42. The above petition is further fortified when the Government
of Maharashtra in its General Administration Department issued a
Government order dated 20 November 2019, on disposal of official
business during the President's Rule, conferring power on the Governor in
regard to disposal of the official business of the government. The said
order reads thus:-
"Immediate Disposal of Official Business
during President Rule.
Government of Maharashtra
General Administration Department
Order No.ROB 2019/CR-93/18 (O&M),
Madam Cama Marg, Hutatma Rajguru Chowk,
Mantralaya, Mumbai - 400 032,
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Dated the 20th November, 2019.
ORDER
In Exercise of the powers conferred upon him under Article 166 of the
Constitution of India read with President of India's Order No.G.S.R. 837 (E)
dated the 12th November 2019, the Governor of Maharashtra is hereby pleased
to make the following order pertaining to the disposal of official business:-
(1) All matters which were required to be put up to the Council of Ministers
under Schedule II of the Rules of Business and all such cases where
Ministers had to obtain orders of the Chief Minister, would now be
routed through the Chief Secretary of Maharashtra to the Governor.
(2) Proposals regarding transfers and postings of Officers of the rank of
Joint Secretaries and above and in respect of IAS/IPS and IFS cadre, of
and above the ranks of Collectors/Superintendents of Police will be
routed through the Chief Secretary of Maharashtra to the Governor. All
transfers which were earlier being done by the Chief Minister will be
done by the Governor.
(3) Matters pertaining to law and order will be routed through the Chief
Secretary of Maharashtra to the Governor.
(4) Routine cases which were being settled at the level of Minister may be
finally decided by the Governor through the Chief Secretary.
(5) The cases where more than one department is concerned the matter
may be decided in consultation with the Chief Secretary by the
Governor.
(6) Regarding legislative matters factual information and present status may
be communicated with the approval of the Secretary of the Department
to the Legislature Secretariat.
(7) All administrative and financial matters of urgent and time bound
nature, which are beyond the power of the Chief Secretary should be
submitted to the Governor through the Chief Secretary.
(8) Affidavits giving only factual information and existing status should be
approved by the Secretary of the Department. Any affidavit which has
policy implications should be submitted to the Governor through the
Chief Secretary.
2. This order of Government of Maharashtra is available at the website
www.maharashtra.gov.in. Reference No. for this is 201911211008470807. This
order has been signed digitally.
By order and in the name of the Governor of Maharashtra,
(Ajoy Mehta)
Chief Secretary to Government of Maharashtra
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To,
1. All Additional Chief Secretaries, Mantralaya
2. All Principal Secretaries, Mantralaya
3. All Secretaries, Mantralaya,
4. Secretary to Hon'ble Governor."
(emphasis supplied)
43. It is thus clear not only from the Proclamation dated 12
November 2019 notifying President Rule in the State of Maharashtra but
also from the Government's Order dated 20 November 2019, that the
Governor was empowered and authorised to act on behalf of the
President on all matters as specified in such declarations, which certainly
included taking a decision to settle the disputes involving the government
and to make payment of any settlement amount. Clause (c) (i) read with
the proviso to Clause (c)(iii) of the Presidential Proclamation (supra)
also confers an authority on the Governor to enter into a contract on
behalf of State. It thus not correct for the State to contend that the
Governor had no authority to pass an order as prayed for in the note
dated 18 November 2019 of the PWD which was routed through the
proper channel and ultimately approved by the Additional Chief
Secretary, PWD and the Chief Secretary of the Government of
Maharashtra. It also cannot be said that it was merely a decision of the
department or of the Secretary's and not the decision of the Governor or
of the State.
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44. This apart the Constitutional scheme in relation to the
powers of the Governor can be discussed by adverting to the relevant
articles of the Constitution.
Article 154 of the Constitution provides that the executive
power of the State shall be vested with the Governor and shall be
exercised by him either directly or through officers subordinate to him in
accordance with the Constitution when the President's rule was notified,
qua this article, the President was acting through the Governor. Further
Article 166 is a provision on conduct of business of the Government of a
State, providing that all executive actions of the Government of a State
shall be expressed to be taken in the name of the Governor. Clause (2) of
Article 166 provides that the orders and other instruments made and
executed in the name of the Governor shall be authenticated in such
manner as may be specified in rules to be made by the Governor, and the
validity of an order on instruction which is so authenticated shall not be
called in question on the ground that it is not an order or instrument
made or executed by the Governor. Clause (3) of Article 166 provides
that the Governor shall make rules for the more convenient transaction of
the business of the Government of the State, and for the allocation among
Ministers of the said business in so far as it is not business with respect to
Pvr 53 monday-final-review-petition-final.doc
which the Governor is by or under the Constitution required to act in his
discretion. It is thus clearly seen that the Governor had sufficient powers
during the period of the President's rule for the purposes of taking the
decision in question, when the President had proclaimed and declared
himself to act through the Governor, during the subsistence of the
President's rule in the State of Maharashtra.
45. The position in law in regard to the powers of the Governor
to exercise the executive powers on behalf of the President, is no more res
integra. A useful reference can be made to the decision of the Calcutta
High Court in Gokulananda Roy vs. Tarapada Mukharjee & Ors. (AIR
1973 CAL 233). In this case the Division Bench was dealing with an
appeal arising from a judgment of a learned Single Judge. The challenge
before the learned Single Judge in a writ petition was to a notification
appointing a Commissioner under the Commissions of Inquiry Act,1952.
The facts of the case being, that on 16 March 1970, the Chief Minister of
the then United Front Ministry resigned. The resignation tendered by the
Chief Minister was accepted by the Governor on 19 March 1970 and on
the same day a Proclamation was issued by the President of India,
assuming to himself all the functions of the Government of the State, and
all powers vested in or exercisable by the Governor of the State. The
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President assumed to himself the functions of the Government of the
State and all powers vested in the Governor. The resignation of the Chief
Minister was followed by a Hartal, called by the appellant's party. This
provoked a number of violent incidents at Burdwan which resulted in the
death of three persons. The Governor visited Burdwan on 30 March 1970
which resulted into the Governor making an order dated 28 April 1970,
under Section 3 of the Commissions of Inquiry Act, 1952, by which the
first respondent was directed to hold an inquiry in accordance with the
terms and conditions of the order and submit a report to the State
Government embodying his findings, and the recommendations thereon,
within three months from the date of publications of this notification in
the Calcutta Gazette. The appellant was aggrieved by the act of the
Governor invoking the provisions of the Commissions of Inquiry Act,
1952, to order an inquiry. The contention of the appellant was that such
inquiry would deny a fair trial to the members of his political party, who
would not have an opportunity to defend themselves. In mounting such
challenge, the appellant contended that after a proclamation was issued
by the President under Article 356(1) of the Constitution, the President
alone was required to be satisfied about the necessity of an inquiry under
the Commissions of Inquiry Act. It was urged that the President having
assumed to himself all the functions of the Government of the State, and
Pvr 55 monday-final-review-petition-final.doc
all powers vested in the Governor of the State, it was for him alone to be
satisfied that an inquiry under the Act was called for, and also about the
necessity of such inquiry, hence, the Governor had no authority and
jurisdiction to issue such notification. This contention was negatived by
the Division Bench when it held that Article 356 itself enables the
President in making a Proclamation under that Article, to make incidental
and consequential provisions, by virtue of which the President delegated
all the functions of the Government of the State and all the powers vested
in or exercisable by the Governor of the State, to the Governor. Mr.Justice
B.V.Mitra speaking for the Bench observed thus:-
"12. .......... It cannot, in our view, be held that while the
power to appoint a Commission of Inquiry stood delegated to the
Governor, the duty and the statutory obligation to form an opinion
about the necessity of such an inquiry remained vested in the
President. To hold otherwise, would be creating a situation where
the exercise of the power itself would be invalid. Because, in that
case the President will have to form the opinion about the necessity
of the inquiry, and having formed such an opinion, he will have to
leave it to the Governor to make the order appointing the
Commission of Inquiry, though the Governor has formed no
opinion about the necessity of such an inquiry.
13. ......... It seems to us that there is good deal of force in
this contention on behalf of the respondents. Under Article 154(1)
of the Constitution, the executive power of the State is vested in
the Governor and is to be exercised by him directly or through the
Officers subordinate to him. The President delegated to the
Governor not only the powers of the Governor, but also the
functions of the State Government. Quite apart from the position
that delegation of powers carries with such delegation the duties
and statutory obligations connected with the power, delegation of
the functions of the State Government to the Governor, would
include within its ambit the power to form an opinion about the
necessity of an inquiry under the Commissions of Inquiry Act."
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46. The Supreme Court had an occasion to examine a similar
issue of law on the powers of the Governor during the President Rule in
"Badrinath Vs. Government of Tamil Nadu and Ors." [(2000)8 SCC 395].
This was a case concerning the claim of the appellant for promotion to
the super-time scale. The Government of India had considered the report
of the Committee so appointed by the State Government and found that
censure was awarded to the appellant in one of the disciplinary cases
which was also approved by the concerned Minister as also the fact of
such censure being informed to the appellant. However, it so happened
that in the meantime on 28 June 1977 the Governor of Tamilnadu during
the President Rule dropped all four disciplinary cases against the
appellant. Despite such cases being dropped by the Governor, according
to the appellant, one disciplinary case was however shown to be kept
pending by the Government and illegally. In such context the Supreme
Court interalia framed the following point for consideration:-
"22. On the basis of the above contentions, the following
points arise for consideration:
(1) Whether, the award of 'censure' in the fourth
disciplinary case (relating to furnishing his office without
previous sanction) by the State Government was contrary to
the directions of the Governor during the President's Rule
emergency and whether the State Government thereafter
wanted to withdraw the reference to the UPSC and the UPSC
refused to permit such withdrawal? Whether the appellant
was treated fairly in respect of the said proceedings?
........................"
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The Supreme Court held that the order of the Governor
dropping the four disciplinary cases including one which was pending,
was passed during the President's Rule. It was held that such order was
required to be treated as final so far as the State was concerned. It was
held that when an elected Government was not in office, the orders of the
Governor under Article 356(1)(a) as an agent of the President of India
are equivalent to the orders that might have been passed by an elected
Government in office and the Governor's orders would be given effect
fully and could not have been ignored either by the executive or by the
Union Public Service Commission. The relevant observations of the Court
are required to be noted which read thus:-
"24. In our opinion, the Order of the Governor dropping all
the four disciplinary cases including the one which was
treated as pending, was passed during President's Rule and
that Order must have been treated as final so far as the State
was concerned. In fact it dropped the three cases but treated
the fourth case as pending, even though that was also
dropped by the Governor. Inasmuch as the Governor's Orders
are final, a serious question as to jurisdiction of the
subsequent proceedings in the fourth case resulting in
'censure' arises. Merely because the matter had gone to the
UPSC before the Governor dealt with the issue, the Governor's
Orders dated 28.6.1977 could not have been ignored. By the
date the State received the letter of the UPSC and passed the
final Order of censure on 8.4.80, the Governor's Orders dated
28.6.1977 were already there and therefore the Government
should have refrained from passing the Order of "censure".
25. When an elected Government is not in office, the
Orders of the Governor under Article 356(1)(a) as an agent of
the President of India are equivalent to the Orders that might
have been passed by an elected Government in office and the
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Governor's Orders had to be given effect fully and could not
have been ignored either by the executive or by the Union
Public Service Commission.
26. Under sub-clause (a) of Article 356(1) of the
Constitution of India, the President may assume to himself all
or any of the functions of the Government of the State and all
or any of the powers vested in or exercisable by the Governor
or anybody or authority in the State other than the legislature
of the State. Where the President, after assumption of the
powers of the State Executive, chooses to exercise those
powers through the State Government (sic Governor), the
latter acts as the agent of the President, acting on the advice
of the Union Ministry, instead of the State Cabinet. In short,
when the President vests the Governor with the powers of the
State Government, the Governor can exercise all the powers
of the State Government, without the advice of his Council of
Ministers. The Governor becomes responsible to the President
i.e. the Union Government which has its responsibility to the
Union Parliament. The Governor can exercise the statutory
power exercisable by the State Government. (See Basu,
Shorter Constitution, 11th Edn. p. 1192). Once that power
was exercised by the Government on 28.6.1977, all the
consequential proceedings leading to the censure fall to the
ground."
47. Adverting to the Constitutional provisions as discussed above
and the principles of law as enunciated in the above decisions, it is
difficult to accept the contention as urged on behalf of the State, that in
the present facts the Governor had no authority in law during the period
12 November 2019 to 23 November 2019 when the President's rule was
operating in the State of Maharashtra to take a decision to approve the
settlement. The decision in question dated 22 November 2019 was taken
by the Governor as an agent of the President of India which was
equivalent to a decision or an order which might have been passed by
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the elected Government. Thus, such decision of the Governor was
required to be given effect fully and could not have been questioned by
the State. Hence, such contention as urged by Mr.Anturkar that the
Governor had no authority to take such decision is required to be rejected
in totality.
48. The next contention as urged by Mr. Anturkar is in regard to
non adherence of the 'Rules of Business' of the Government by the
Governor in taking a decision to arrive at a settlement with Manaj. To
examine this contention it needs to be stated that in exercise of powers
vested in Clauses (2) and (3) of Article 166 of the Constitution, the
Governor of Maharashtra has made Rules called as "Maharashtra
Government Rules of Business" as brought into force on 1 July 1975 (for
short 'Rules of business'). Some of the rules thereunder relied by Mr.
Anturkar need to be noted which read thus:-
"THE MAHARASHTRA GOVERNMENT RULES OF BUSINESS
GENERAL ADMINISTRATION DEPARTMENT
Sachivalaya, Bombay 400 032, dated the 26 th June 1975
CONSTITUTION OF INDIA
No.ROB-1075/O.&M.- In exercise of the powers conferred by clauses (2) and (3) of
Article 166 of the Constitution of India and in supersession of all previous rules made
in this behalf, the Governor of Maharashtra is pleased to make the following rules
namely :-
1. ...
2. ...
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3. ...
4. The Business of the Government shall be transacted in the Departments
specified in the First Schedule and shall be classified and distributed between those
Departments as laid down therein.
5. ...
6. The Chief Minister and a Minister in consultation with the Chief
Minister may allot to a Minister of State or a Deputy Minister any business appertaining
a Department or part of a Department.
6-A. ...
7. Each Department of the Mantralaya shall consist of the Secretary to the
Government, who shall be the official head of that Department and or such other
officers and servants subordinate to him as the State Government may determine :
Provided that, -
(a) more than one Department may be placed in charge of the same
Secretary;
(b) the work of a Department may be divided between two or more
Secretaries.
8. ...
9. ...
10. ...
11. (1) No Department shall without previous consultation with the
Finance Department authorise any order (other than orders pursuant to any general
delegation made by the Finance Department) which -
(a) either immediately or by their repercussion, will affect the
finance of the State, or which, in particular -
(i) involve any grant of land or assignment of revenue or
concession, grant lease or licence of mineral or forest
rights or a right to water power or any easement or
privilege in respect of such concession; or
(ii) in any way involve any relinquishment of revenue;
(b) relate to the number or grading or cadre of post or the
employments or other conditions of service or posts.
(2) No proposal which requires the previous consultation of the
Finance Department under sub-rule (1) but in which the Finance Department has not
concurred, may be proceeded with unless a decision to that effect has been taken by
the Council.
(3) No appropriation shall be made by any Department other than
the Finance Department, except in accordance with such general delegation as the
Finance Department may have made.
(4) Except to the extent that power may have been delegated to the
Departments under rules approved by the Finance Department, every order of an
Administrative Department conveying a sanction to be enforced in audit shall be
communicated to the audit authorities by the Finance Department.
(5) Nothing in this rule shall be construed as authorising any
Department including the Finance Department, to make reappropriations from the
grant specified in the Appropriation Act to another such grant."
(emphasis supplied)
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49. The rules of business are framed by the Governor in exercise
of powers conferred under clauses (2) and (3) of article 166 of the
Constitution, which are supposed to be followed in the normal course of
the government's business. However the situation in the present case was
somewhat different for the non-applicability of the rules of business when
the Governor granted an approval on 22 November 2019, to settle the
claim of Manaj in view of the proclamation of the President's rule, in the
State of Maharashtra Vide proclamation dated 12 November 2019. The
fallacy in Mr.Anturkar's submission is of the non-consideration and
oblivity to the order dated 20 November 2019 issued by the Governor
which was also in exercise of the powers conferred under article 166 of
the Constitution, notifying the rules of business to be followed during the
President's Rule. On perusal of the said Order issued by the Governor it is
quite clear that the decision to settle the dispute and make payment to
Manaj as taken by the Governor, satisfied the requirement of these rules
as notified by such order dated 20 November 2019. This inasmuch as the
proposal to settle with Manaj was routed through the proper channel as
per the requirement of the Governor's order dated 20 November 2019.
The same being scrutinised and approved by the Chief Secretary was
ultimately placed before the Governor who granted approval to the same.
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In this very context Mr. Anturkar's contention that as such settlement
involved making payment and hence the finance department also ought
to have been consulted, is also without substance. This for twofold
reasons firstly when such decision was taken during the President's Rule,
as per the said order passed by the Governor under article 166 of the
Constitution, it was specifically provided that all matters which were
required to be put up to the Council of Ministers under Schedule II of the
Rules of Business and all such cases where Ministers had to obtain orders
of the Chief Minister, were to be routed through the Chief Secretary of
Maharashtra to the Governor. It was also provided in clause 7 of the said
order, that all administrative and financial matters of urgent and time
bound nature, which are beyond the powers of the Chief Secretary should
be submitted to the Governor through the Chief Secretary. If this be the
case one would wonder as to how such submission can be accepted that
the rules of business applicable during the normal times are relevant
during the President's rule. Secondly even on facts, such submission
needs to be rejected, for the reason that after revocation of the President's
rule a provision was made by the State for such payment and accordingly
a proposal was made by the finance department before the legislature
seeking sanction for allocation of funds for such payment as noted above.
This has not been disputed by State when a contention to this effect has
Pvr 63 monday-final-review-petition-final.doc
been specifically averred in the reply affidavit. Most pertinently when
the letter dated 25 November 2019 came to be addressed to Manaj in
pursuance to the note dated 25 November 2019, the President's Rule had
already come to an end in the State of Maharashtra, as revoked by the
President's proclamation dated 23 November 2019. The present
Government was sworn in on 28 November 2019.
50. Even after the Government was formed, the Desk Officer in
the Public Works Department acting under the Note dated 18 November
2019 read with Note dated 25 November 2019, addressed a letter dated
29 November 2019 to the Executive Engineer, Public Works, (South)
Division, Pune, authorising him to execute the approved consent terms to
be submitted before this Court. Accordingly, the consent terms were
signed on 10 December 2019 and the same were thereafter tendered
before this Court on 12 December 2019, when the Court passed the order
under review. There is also much substance in the contention as urged on
behalf of Manaj that the consent terms were acted upon, after the parties
placed the same on record of this Court and invited an order in terms of
the consent terms. This is also evident from the fact that in December
2019 an amount of Rs.1 crore came to be released pending budget
approval on 13 December 2019. Also the Government in its Finance
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Department made a supplementary budgetary demand of Rs.600 crores
for ten cases which included at Sr.no.2 Rs.357.7918 Crores required to be
paid to Manaj as per tribunal's award (i.e. Rs.358.7918 Crores as agreed
in consent terms minus Rs.1 Crore already paid on 13 December 2019 .)
This was approved by the legislature in its Winter Session of 2019. This
fact came to be recorded in the Government's Note dated 27 December
2019 as approved by the Under Secretary (Finance), Deputy Secretary &
FA, the Secretary (Works), Additional Chief Secretary (PWD), Additional
Chief Secretary (Finance) and Secretary (Expenditure). A copy of this
note is placed on record at "Exhibit D" to the reply affidavit filed on
behalf of Manaj. There is no rejoinder on behalf of the State disputing this
position.
51. In pursuance of the budgetary provision, such funds were
available with the PWD department and were to be paid to Manaj is clear
from the statements made before this Court on behalf of the State and
recorded in the orders dated 21 January 2020, 24 January 2020, 27
January 2020 passed in Commercial Contempt Petition No (L) No.9 of
2020. All this has happened after the present Government was formed on
28 November 2019. It would be apposite to note these orders. In seriatim
the relevant paragraphs of these orders read thus :-
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Order dated 21.01.2020:-
" It appears that the second last paragraph in the decision
dated 6 January 2020 (No.BGM 2019/pra.kra.31/19/Arth-1)
may not be of that relevance because here Government in
principle has agreed to make payment under the award and it
was so recorded by this Court in the order passed by this Court
on 12 December 2019 when the above execution application
was disposed of in terms of the consent terms as also accepting
the undertaking.
.. . .. .. .. . .... .. .. .. .. .. ."
Order dated 24.01.2020:-
" Mr.Sakhare, learned Senior Counsel for the State
states that the hearing of this petition on the background
of the earlier order be adjourned for two weeks, by which
time he states that there is possibility that the issues would
be resolved. Request of Mr.Sakhare is reasonable.
Accordingly stand over to 7 February 2020 (FOB).
Later on at 04.45 p.m.
2. Mr. Balsara and Mr. Bobde, learned counsel for the
petitioner have mentioned this petition and have brought
to my notice a communication dated 22 January 2020 of
Mr. R. G. Jawalkoti, Additional Secretary, PWD Dept., Govt.
of Maharashtra addressed to Mr. R. S. Rahane,
Superintendent Engineer, PWD, Pune (Respondent No.1)
and Mr. Dhananjay Deshpande, Executive Engineer, PWD
(South Division) Pune (Respondent No.2) directing these
two respondents to make payments as per the orders
passed by this court. The additional secretary has also
informed them that they should personally remain present
in the court as also submit a report to the Government.
3. Mr. Balsara would submit that this letter ought to
have been pointed out when the matter was heard in the
morning session. He submits that the Government has
clearly called upon the respondent no. 1 and 2 to comply
the orders of the court and disburse the payment. It is
submitted that this is gross impropriety on the part of
respondent Nos.1 and 2 is not pointing out the above
communication to the court.
Pvr 66 monday-final-review-petition-final.doc
... .. ... .. .."
Order dated 27.01.2020:-
"1. Mr. Joshi, Secretary, Public Works Department (PWD),
Government of Maharashtra makes a statement that all the
necessary formalities to release the payment and the intimation
to that effect to be given to the Treasury would be undertaken
by tomorrow i.e. 28 January 2020. The Treasury would
accordingly be required to take steps to make payment to the
petitioner by way of RTGS.
2. In the facts of the case considering that there is an
undertaking given to the court, it is expected that the Treasury
would also take immediate steps. Respondent No.1, the
Competent Officer also informs to take immediate steps to credit
the payments to the petitioner. It is expected that all these steps
would be taken and appropriate compliance of the orders is
undertaken as stated by Mr. Joshi on or before Wednesday i.e.
29 January2020.
3. Statement of Mr. Joshi, is accepted as also the concerned
Treasury Officer shall comply with the above directions and
would act upon the payment intimation as would made by the
PWD.
4. It is stated that there is no confusion whatsoever in the
PWD having funds for the disposal of the amounts made under
the decree and the same would be disbursed as informed by Mr.
Joshi, Secretary, PWD, as noted above. In any even the Court
would not concerned whether an amount goes from the account
of Superintendent Engineer or of any other officer. In these
circumstances, as rightly pointed out by Mr. Joshi, Secretary,
PWD,the amount would be paid to the petitioner in compliance
with the orders of the Court.
5. At this stage, it is informed that the money is already
received by Supdt. Engineer Mr. R.S. Rahane, Respondent no. 1
and necessary steps would be taken to transfer the same to the
petitioner's account from the treasury. It would be for the parties
to see that there is no there is no further unpleasantness on any
of the issues.
.. .. .. .. .. .. .. ."
(emphasis supplied)
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52. Thereafter as recorded in the order dated 30 January 2020
passed by this Court in the contempt proceedings the entire amount
stands deposited in this court. The relevant extract of the said order reads
thus:-
" Leave to amend to implead State of Maharashtra through
P.W.D. as a party respondent.
2. On the backdrop of the earlier orders passed by this
Court, I have heard Mr.Balsara with Mr.Bobde, learned Counsel
for the petitioner and Mr.Anturkar, learned Senior Counsel for
respondent Nos.1 and 4.
3. Today Mr.Anturkar, learned Senior Counsel for
respondent Nos.1 and 4 on the instructions of his clients who are
present in the Court, submits that there are some legal issues and
on these issues, his clients intend to contest the present
proceedings. At the same time, Mr.Anturkar would fairly submit
that his clients are conscious of not only the principal order of
which a contempt has been alleged by the petitioner but also of
the subsequent order dated 27 January 2020 which recorded the
statement of Mr.Joshi, Secretary, PWD.
4. Be that as it may, Mr.Anturkar has also at the outset
submitted that his clients are ready and willing to deposit the
award amount in this Court within one week from today. In my
opinion, it would be in the fitness of things that statement of
Mr.Anturkar is accepted in this regard and amount comes to the
Court.
5. Let the award amount be deposited in this Court within a
period of one week from today. As soon as the amount is
deposited, the Prothonotary and Senior Master of this Court shall
take immediate steps to invest the said amount in Fixed Deposit
in a nationalised bank, initially for a period of one month.
.. .. .. .. .. .. .. .. .. .."
53. It is thus strange and surprising as how the State can assert a
case of lack of authority with the Governor or a fraud being played on
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the Court by high officials of the Government in taking a decision to settle
the award claim of Manaj, when there is not an iota of material to support
such contentions. Most pertinently when the letter dated 25 November
2019 came to be addressed to Manaj in pursuance to the note dated 25
November 2019, President's Rule had already come to an end in the State
of Maharashtra as revoked by the President's proclamation dated 23
November 2019 and the present Government was sworn in on 28
November 2019.
54. The contention as urged on behalf of the State that an
approval of the elected Government was required to be taken to the
consent terms when the consent terms were executed on 10 December
2019 and filed before the Court on 12 December 2019 also cannot be
accepted. There is no provision in the Constitution being pointed out on
behalf of the State, which would require any ratification by the elected
Government, of a decision taken by the President acting through the
Governor during the subsistence of the President's Rule, after the
President's rule is revoked. Such contention of Mr. Anturkar if accepted
would do violence to the Constitutional scheme, as discussed above, and
result into a chaotic situation bringing about uncertainty in the affairs of
the State. This was never the intention of the Constitution makers in
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having provisions of Article 356(1) of the Constitution and providing for
conferring of powers on the Governor by the President of India during the
President's rule. The Constitutional scheme does not make any provision
for such ratification. Thus, Mr.Anturkar's contention that an approval of
the appropriate Government was not taken when the consent terms were
filed before this Court, so as to have a continuous authorization, deserves
to be rejected.
55. In so far as Mr.Anturkar's contention that the prayer as made
in note dated 18 November 2019,in terms of the marked portion "X"
("{k"), was not granted by the Governor, also cannot be accepted. This for
the reason that not only the Additional Chief Secretary but also the Chief
Secretary and thereafter the Governor have made similar
endorsements/approval by putting their signature on the said note
without any specific qualification or condition. There is no material
placed on record, from any of such signatories to the note dated 18
November 2019, that there was never an intention on their part to bring
about settlement and make payment of the amount on which the dispute
was settled between the State and Manaj. On the contrary, as noted
above there is ample material to show that the order/decision of the
Governor was acted upon which is required to be given sanctity as very
Pvr 70 monday-final-review-petition-final.doc
Senior Officers of the State Government within the framework of law,
alongwith the Governor had approved such settlement proposal to be
entered by the State Government with Manaj. It cannot be said that such
Senior Officers who were involved in the decision making process have
either acted illegally or have played fraud on the Government to make
such payment, merely because the decision to settle the dispute was taken
prior to the formation of the democratically elected Government which
was formed on 28 November 2019, so as to come to a conclusion that the
consent terms stand vitiated by fraud or that in any manner fraud is
played on the Court.
56. In any event if the case of the State of any brazen illegality or
lack of authority is to be believed then the logical corollary would have
been an appropriate action to be taken at departmental level to undo such
alleged illegality. However, there is nothing on record to indicate that any
action was taken by the State against any officers which included high
ranking officers like the Chief Secretary. There is also nothing on record
to show that the Government had approached the Governor, if it had any
objection to the decision taken by the Governor. This more so, as at all
material times it was permissible for the Governor to say that he had not
taken any decision on the note vetted and endorsed by the Chief
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Secretary to have a settlement with Manaj and pay the amounts under the
award, as set out in the note. Hence, the case as pleaded in the review
petition appears to be absolutely hollow.
57. In regard to the State's contention that the approval of the
Governor on the note dated 18 November 2019 as signed by the Governor
on 22 November 2019, was a mere file noting and not an order of the
Government, also cannot be accepted in the present facts. The note
which the Governor approved was initiated in the PWD department and
routed through its competent officers which included the Secretary
(PWD), Additional Chief Secretary and the Secretary (Finance) and the
Chief Secretary before seeking Governor's approval. Once it was approved
by the Governor it became a decision of the Government and at the
relevant time that of the President acting through the Governor in terms
of the proclamation declaring President's rule read with the Governor's
order dated 20 November 2019. Such decision was acted upon by the
State as discussed in detail in the foregoing paragraphs. This culminated
into the Court accepting the consent plea as made by the parties in
passing an order in terms of the consent terms. It is required to be noted
that the Court in its order which is sought to be reviewed, recorded the
names of the principal signatories to the consent terms as also noted the
Pvr 72 monday-final-review-petition-final.doc
signatures of the Advocates for the parties as made on the said consent
terms. There is nothing placed on record that the learned AGP who signed
the consent terms and who was the delegate of the Government Pleader
which is not disputed by the State, was in any manner questioned on such
action on his part if it was to be objectionable. The learned AGP was
called by the Court during the hearing of this petition who has stated that
he continues to be in the State's panel as an AGP. This is being noticed as
relevant, also in view of the decision of the Supreme Court in
"Y.Saleebachen etc. vs. Superintending Engineer, WRO/PWD & Anr."
(2015) 5 SCC 747 as cited by Mr.Anturkar in the context of the authority
of the learned AGP to sign the consent terms. In fact the decision
supports Manaj. Facts of the said case are quite similar to the case in
hand. In the said case case the arbitrators passed an award in favour of
the appellant to pay an amount with interest. The State had challenged
such award by filing an application under Section 34 of the Arbitration
and Conciliation Act. When such proceedings were pending, there was a
proposal from the respondent to negotiate and amicably settle the
disputes. As the Superintending Engineer did not agree with the rate of
interest, initially the settlement talks failed. However subsequently when
the matter came up before the learned District Judge, the appellant
agreed to forgo certain interest and made an offer due to acute financial
Pvr 73 monday-final-review-petition-final.doc
crisis faced by it. When the Government Pleader was confronted with
such offer of the appellant, he was of the view that it was a very fair offer,
which was in the interest of the respondent-State and was also in
accordance with the negotiations held earlier, and accordingly made an
endorsement on the offer to the effect that the Government had no
objection for accepting the same. This resulted in modifying the award by
the District Judge in terms of the agreed condition. The respondent-State
however challenged the order of the District Judge in an appeal under
Section 37 of the Arbitration and Conciliation Act,1996 before the High
Court, primarily on the ground that the Government had never agreed to
the terms, as endorsed by the Government Pleader, as he was never
authorised for that purpose. It was argued that in the absence of any
authorization by the Government Pleader, the endorsement made by him
on the compromise was not binding on the Government and that the
Government had not entered into any settlement and wanted the matter
to be heard on merit. The High Court in these circumstances was of the
view that in the absence of any material to show that Government Pleader
was authorised to record the compromise, such compromise was not
binding on the respondents and set aside the order of the learned District
Judge recording the settlement. The appellant challenged the orders
passed by the High Court before the Supreme Court. It is in this context,
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the Supreme Court held that Government Pleader is legally entitled to
enter upon a compromise with the appellant and his written endorsement
on the Memo filed by the appellant can be deemed as a valid consent of
the Respondent itself. It was observed that nothing was brought out by
the respondents which would show that advocate was not authorised to
enter into such a settlement. It was observed that there was no iota of
pleading explaining as to how the Government Pleader was not
authorised to record consent or that he has in any manner lacked
authority. The Court observed that not only no action was taken against
the Government Pleader, the said counsel continued to be on the panel of
the Government and was entrusted in with further briefs of Court cases,
and this itself shows that the respondents have tried to wriggle out of a
valid compromise by taking such spacious plea which cannot be
countenanced. It was held that the consent decree operates as an estoppel
and was binding on the parties from which the respondents could not
wriggle out, on an afterthought plea, that its lawyer was not authorised to
enter into such a settlement. The Supreme Court taking a review of the
authorities on the subject, in paragraphs 20, 21 and 22 observed as
under:-
"20. We find that in the present case the Government Pleader
was legally entitled to enter into a compromise with the
appellant and his written endorsement on the Memo filed by the
appellant can be deemed as a valid consent of the Respondent
Pvr 75 monday-final-review-petition-final.doc
itself. Hence the Counsel appearing for a party is fully
competent to put his signature to the terms of any compromise
upon which a decree can be passed in proper compliance with
the provisions of Order 23 Rule 3 and such decree is perfectly
valid. The authority of a Counsel to act on behalf of a party is
expressly given in Order 3 Rule 1 of Civil Procedure Code which
is extracted hereunder;
"1. Appearances, etc., may be in person, by recognized
agent or by pleader - Any appearance, application or act in or to
any court, required or authorized by law to be made or done by
a party in such court, may except where otherwise expressly
provided by any law for the time being in force, be made or
done by the party in person, or by his recognized agent, or by a
pleader, appearing, applying or acting as the case may be, on his
behalf:
Provided that any such appearance shall, if the court so
directs, be made by the party in person."
21. There is another very important aspect in this case
which cannot be side-tracked and needs to be highlighted by us.
At the time of arguments, on a pertinent query from the learned
counsel for the respondents as to whether any action was taken
against the Government Pleader, the learned counsel was candid
in accepting that not only no action was taken, the said counsel
continued to be on the panel of the Government and was
entrusted with further briefs of Court cases. This itself shows
that the respondents have tried to wriggle out of a valid
compromise by taking such spacious plea which cannot be
countenanced.
22. Here is a case where arbitral awards were given in
favour of the appellant way back in April and June, 2006.
However, the appellant is yet to reap the benefits thereof.
Respondent No.1 challenged these awards by filing applications
under Section 34 of the Act. When these proceedings were
pending, the respondents themselves came out with the
proposal to negotiate and try to amicably settle the matters,
keeping in view the otherwise laudable decision taken by PWD
to settle such disputes as is clear from the letter dated
02.08.2008. Negotiations took place thereafter. Though the
appellant had agreed to forgo substantial part of the award in
terms of interest, etc., the talks failed at that time as the
respondents wanted 10% reduction in the principal amount as
well, whereas the appellant was conceding to give up only 5% of
the principal amount. Be, as it may, the appellant agreed to give
further concessions in the Court when the matter came on
09.04.2011 vide his 3 memos dated 6.4.2011 filed on that date.
These memos show that the appellant had given the said offer
due to the acute financial crisis he was suffering from as he
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wanted to satisfy his creditors including his bankers to whom he
owed substantial amounts."
(emphasis supplied)
58. Mr.Anturkar's contention that there is some discrepancy in
the note dated 6 January 2020 initiated in the Finance Department in
regard to approval sought on the budgetary allocation for the reason that
Mr.Manoj Saunik, Additional Chief Secretary who was holding charge as
Additional Chief Secretary, Finance, had not put his signature, does not
appear to be the correct position. This inasmuch as the request for such
budget allocation was endorsed by the Secretary (Finance), Shri.Rajiv
Kumar Mittal. The things did not stop at this but the said budget
allocation had attained finality as the funds were received by the PWD to
the extent the settlement was payable to Manaj.
59. There is also no substance in Mr.Anturkar's contention that a
separate approval was required to be given by the Governor in regard to
withdrawal of the Section 34 proceedings. Mr.Chinoy would be right in
his contention that once a settlement had taken place between the parties
by filing of the consent terms, the obvious consequence was that nothing
survived in the proceedings filed by the State under Section 34 of the Act
before the learned District Judge, Pune, assailing the arbitral award. In
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any event all these contentions are not worth, for this Court to exercise its
jurisdiction to review the order dated 12 December 2020 passed by this
Court.
60. The decisions as relied on by Mr.Anturkar on behalf of the
State on the different propositions including that the Court has powers
otherwise than under Order 47 Rule 1 to review its orders, are now
required to be discussed.:
(I) The decision in Municipal Corporation of Gr.Mumbai & Anr. Vs.
Pratibha Industries Ltd. & Ors. [(2019)3 SCC 203] is relied to canvass a
proposition that the High Court being a Court of record as envisaged in
Article 215 of the Constitution, has inherent plenary jurisdiction to
correct any apparent error, which may be noticed by the High Court in
respect of any orders passed by it. That the Superior status of the High
Court has been recognized for more than five decades in Shivdev Singh &
Ors. v. State of Punjab and Others, (AIR 1963 SC 1909) and thereafter in
Naresh Shridhar Mirajkar & Ors. v. State of Maharashtra, [1966] 3 SCR
744, and thereafter in M.M. Thomas v. State of Kerala and Another,
(2000) 1 SCC 666. There can be no dispute on such proposition, it is well
settled that the jurisdiction of the High Court to recall an order in
exercise of its powers under Article 215 of the Constitution would be
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exercised to correct grave and palpable errors committed by it and to
prevent miscarriage of justice. This is not a case where any of such
situations arise for the High Court to exercise such plenary powers. These
decisions, hence, would not assist the State in the present facts.
(II) In Commissioner of Income Tax, Guwahati VS. Meghalaya
Steels Ltd., [(2015)17 SCC 647], the Supreme Court referring to the
decision in Shivdev Singh & Ors. v. State of Punjab and Others (supra)
has again recognized that there is nothing in Article 226 to preclude the
High Court to exercise the power of review which inheres in every court
of plenary jurisdiction to prevent miscarriage of justice or to correct grave
and patent error committed by it. This decision again in the present facts
would not forward the case of the State for review of the order dated 12
December 2019 passed by this Court.
(III) In Dadu Dayal Mahasabha vs. Sukhdev Arya & Anr, [(1990)1
SCC 189] the question which fell for consideration of the Supreme Court
was as to whether the trial Court had jurisdiction to cancel the order
permitting withdrawal of the suit under its inherent power, if it is
ultimately satisfied that the person who withdrew the suit was not
entitled to withdraw the same. The Supreme Court held it to be a well
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established position in law that a Court has inherent power to correct its
own proceedings, when it is satisfied that in passing a particular order it
was misled by one of the parties. It was held that this principle was
correctly discussed in the decision in Sadho Saran Rai vs. Anant Rai [AIR
1923 Pat 483] , in pointing out the distinction in cases between fraud
practised upon the Court and fraud practised upon a party. It was held
that if a party makes an application before the Court for setting aside the
decree on the ground that he did not give his consent, the Court has the
power and duty to investigate the matter and to set aside the decree if it
is satisfied that the consent as a matter of fact was lacking, and the Court
was induced to pass the decree on a fraudulent representation made to it,
that the party had actually consented to it. It was observed that if,
however, the case of the party challenging the decree is that he was in
fact a party to the compromise petition filed in the case, but his consent
has been procured by fraud, the court cannot investigate the matter in the
exercise of its inherent power and the only remedy to the party is to
institute a suit. The Court held that "the factum of the consent can be
investigated in summary proceedings, but the reality of the consent
cannot be so investigated." Mr.Anturkar relying on such observations has
submitted that this is a case where the factum of the case is required to be
investigated by the Court. Mr.Anturkar's submission is required to be
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stated only to be rejected in the present facts. As observed above, there is
no material on record even remotely to suggest that there was any fraud
as practised upon the Governor in taking decision on 22 November 2019
approving the settlement and/or any fraud practised by any other officers
in executing the consent terms and seeking an order in terms of the
consent terms. It needs to be observed that the State cannot be so casual
in alleging a case of fraud in the absence of any material. If it was to be a
case of fraud, then certainly remedial action at the level of the State
Government could have been taken which would certainly involve high
ranking officers in the decision making process apart from the Governor,
Chief Secretary, Additional Chief Secretary and the officers below them.
The fraud of such magnitude on the facts and on record is unthinkable
and totally imaginary for the State to be canvassed before the Court. The
decision in Dadu Dayal Mahasabha vs.Sukhdev Arya & Anr, is certainly
inapplicable in the present facts. For such reason even the decision of the
learned Single Judge in Horace Kevin Gonsalves Vs. Prabha Ganpat
Borkar (Miss) & Anr. 2015(6) Mh.L.J. 208 is not well founded.
(IV) The decision in N.Mani Vs. Sangeetha Theatre & Ors.
[(2004)12 SCC 278] has been relied to canvass a proposition that the
Court should not rest on technicalities in exercising its review jurisdiction
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as source of power can be, not only under Order 47 Rule 1 or Section 151
of the Code of Civil Procedure but also under Article 215 of the
Constitution. The legal proposition cannot be disputed. In the said case
the Supreme Court was hearing a challenge to the decision of the
Division Bench of the High Court dismissing the writ petition of the
appellant. The principal reason which had prevailed with the High Court
in setting aside its order as challenged by the appellant, being that there
was no reference in the order to Section 11 of the Tamil Nadu Cinemas
(Regulations) Act,1955. It was observed that the Division Bench was not
right in forming such opinion as the power to grant permission has been
specifically conferred on the Government by the proviso inserted to Rule
14. It was observed that merely for the reason Section 11 of the Act was
not specifically referred in the order dated 30 October 1995, that could
not have been a ground for setting aside the permission. It is in this
context, it was held that it is well settled that if a statutory authority has a
power under the law, merely because the source of power was not
specifically referred to or a reference is made to a wrong provision of law,
that by itself does not vitiate the exercise of power, so long as the power
does exist and can be traced to a source available in law. I fail to
understand as to how this decision would in any manner assist the State.
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(V) In regard to Mr.Anturkar's contention relying on the decision
of the Supreme Court in Narmada Bachao Andolan vs State Of M.P. & Anr.
(supra) and the decision of the Division Bench of this Court in Bal Kalyani
And Others vs State Of Maharashtra And Others (supra), that the rules of
business and more particularly pertaining to financial implications would
require mandatory compliance, there can be no two opinions. However, in
the present case, as the facts reveal, such decisions would not assist the
State's case for two fold reasons; firstly it is quite clear that the Governor
acting as a delegate of the President of India, had taken a decision and it
was within his authority to take a decision in consultation with the Chief
Secretary on matters involving financial implications. Secondly, the
elected Government so formed also has not in any manner sought to undo
the said decision and in fact the decision was acted upon by the Finance
Department by making payment of Rs.1 crore in December 2019 and also
an approval in regard to allocation of funds was also sought by the
elected Government before the legislature. Thus, the decisions which are
not in the context of the peculiar situation as in the present case, are
certainly not applicable.
(VI) In so far as Mr.Anturkar's contention that the decision of the
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Governor is merely a file noting and not a decision of the Governor,
relying on the decision of the Supreme Court in Pimpri Chinchwad New
Township Development Authority Vs. Vishnudev Co-op.Housing Society
(supra) is not well founded. In such case the Supreme Court was
concerned with a purported order passed by the Hon'ble Minister on de-
acquisition of the land under Section 48 of the Land Acquisition Act,1894.
The question before the Court was whether the Revenue Minister who
was acting for and on behalf of the State, had the power, in the
background facts of the case, to invoke the provisions of Section 48 of the
Act for release of the acquired land. Considering the facts and
circumstances of the case, the Court answered the said question in the
negative and held that mere noting in the official files of the Government
while dealing with any matter pertaining to any person is essentially an
internal matter of the Government and carries with it no legal sanctity. It
was however observed that once the decision on such issue is taken and
approved by the competent authority empowered by the Government in
that behalf, it is required to be communicated to the person concerned by
the State Government. It was clarified that so long as the decision based
on such internal deliberation is not approved and communicated by the
competent authority, as per the procedure prescribed in that behalf, to the
person concerned, such noting does not create any right in favour of the
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person concerned nor it partakes the nature of any legal order so as to
enable such person to claim any benefit of any internal deliberation. It
was held that such notings and/or deliberations are always capable of
being changed and/or amended and/or withdrawn by the competent
authority. In the present case, it is quite clear that the Governor had taken
a decision as contained in the department's note dated 18 November
2019. The most distinguishing feature being that the decision was
communicated to Manaj. It was further acted upon by inviting consent of
Manaj who agreed to the consent terms, and the consent terms
accordingly came to be prepared and finalised and tendered before the
Court on 12 December 2019 which was very much at the time when the
elected Government was functional. Thus, the principle of law as
enunciated in decision of the Supreme Court in Pimpri Chinchwad New
Township Development Authority (supra) is inapplicable in the facts of
the present case.
61. Having examined the assail of the Sate to the impugned
consent order, the more fundamental question which would arise for
consideration would be as to whether it is at all necessary to exercise the
Court's review jurisdiction in the present facts. As observed above
certainly this is not a case wherein there is any grave or any palpable
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error and/or situation which would create miscarriage of justice requiring
this Court to exercise its plenary jurisdiction as a superior Court. The
position qua the exercise of jurisdiction under Order 47 Rule 1 of the Civil
Procedure Code would also not be different in the present case. The
order of which review is prayed for is dated 20 December 2019, passed by
this Court in the execution proceedings instituted by Manaj invoking
Order 21 of the Code of Civil Procedure. By the said order the Court
accepted the consent terms between the parties, and disposed of the
execution application in terms of the consent terms. The present review
petition is thus necessarily filed under the provisions of Order 47 Rule 1
of the Code of Civil Procedure. The law in regard to the exercise of
power under Order 47 of the Civil Procedure Code is well settled, that an
order may be open to review, if there is mistake or error apparent on the
face of the record. It is well settled that an error may be a ground for
review which is one apparent from the face of the record. It is to be an
imminent error, an error which would strike on a mere looking at the
record and would not require any long drawn process of reasoning on the
point that may conceivably have two opinions. It must be an error so
manifest and clear that no Court permits such error to remain on record.
If such is not the case, it would amount to Court arrogating itself to
decide the case over and over again. Thus, an error which is not apparent
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and which is required to be investigated and searched is not an error
apparent on the face of the record, so as to exercise jurisdiction under
Order 47 Rule 1. The legal position in this regard can be seen from the
decision being discussed hereafter.
62. In Parsion Devi & Ors. Vs. Sumitri Devi & Ors. [(1997)8 SCC
715] in regard to the jurisdiction of the Court under Order 47 Rule 1 of
the Code of Civil Procedure, the Court held as under:-
"9. Under Order 47 Rule 1 CPC a judgment may be open to
review inter alia if there is a mistake or an error apparent on the
face of the record. An error which is not self-evident and has to
be detected by a process of reasoning, can hardly be said to be
an error apparent on the face of the record justifying the court to
exercise its power of review under Order 47 Rule 1 CPC. In
exercise of the jurisdiction under Order 47 Rule 1 CPC it is not
permissible for an erroneous decision to be "reheard and
corrected". A review petition, it must be remembered has a
limited purpose and cannot be allowed to be "an appeal in
disguise"."
The above view has been reiterated with approval in the subsequent
decision in Union of India vs. Sandur Manganese & Iron Ores Ltd. & Ors.
(supra) as relied on behalf of Manaj.
63. In Asharafi Devi (D) Thr. Lrs. vs State Of U.P. (2019)5 SCC
86, the Supreme Court has held that every error factual or legal cannot be
the subject matter of review under Order 47 Rule 1 of the CPC. The
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review jurisdiction is thus not available to be exercised in the facts of the
present case as this is not a case that a fraud has been practised upon the
Court to obtain a consent order nor is it a case where the Court is misled
by a party or a case where the Court itself has committed mistake which
prejudices a party.
64. In any event admittedly the order under review is an order
accepting the consent terms as entered between the parties. It is well
settled that the consent decrees are entitled to create estoppel, which put
an end to further litigation between the parties. In the present case as
noted above there is nothing on record either of a fraud on the Court or
fraud on the Governor much less of established fraud which would in any
manner vitiate the consent terms. The Court also cannot be oblivious that
the review petition is filed after a lapse of 10 months as pointed out on
behalf of Manaj. The review petition thus clearly appears to be an after
thought, this more so when the consent terms were fully acted upon.
65. The upshot of the above discussion is that the State was
totally ill-advised to file this review petition and to assail the consent
order passed by this Court on 12 December 2019. No ground whatsoever
has been made out for this Court to exercise its review jurisdiction. The
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Review Petition is accordingly dismissed. However, I refrain from passing
any order as to cost.
66. Before parting it needs to be observed that the above
observations are purely in the context of the review proceedings and none
of the contentions of the parties in regard to the consequences which may
emanate from the consent terms are examined in the present proceedings.
The contentions of the parties in that regard are expressly kept open.
67. The review petition is accordingly rejected, however, with no
order as to costs.
(G.S.Kulkarni, J.)
