Sh. Ram Kishan Dass And Ors. vs Sh. Banwari Lal Suri And Ors.
2006 Latest Caselaw 1006 Del

JUDGMENT

Swatanter Kumar, J.

1. In the year 1981, Sh. Ram Kishan Dass Along with other plaintiffs filed a suit against Shri Banarsi Lal Suri and other defendants for winding up of the affairs/accounts of the partnership firm viz. 'Rachna Enterprises (India) Regd.'. It was stated that plaintiffs and defendants have been carrying on the business in partnership under the name and style of 'Rachna Enterprises (India) Regd. in terms of partnership deed dated 8.8.77. Sh. Mela Ram was one of the partners who unfortunately died and no fresh partnership deed was executed between the parties. According to the plaintiffs, the share of the partners are as follows:

  Name                     Share in profits    Share in loss 
Shri Ram Kishan Das P-1        7%                   8%
Shri Mahesh Kumar P-2          5%                  Nil
Smt Laxmi Devi P-3            12%                  13%
Shri Banarsi Lal Suri D-1      9%                   9%
Shri Joginder Paul Suri D-2    9%                   7%
Shri Raman Suri D-3            8%                   8%
Master Aman Suri D-5           8%                  Nil
Shri Ram Sarup Agarwal D-6    12%                  13%
Kumari Ballo Devi D-7          7%                   8%
Shri Vishnu Kumar D-8          7%                   8%
Agarwal Rajan Suri D-9         8%                   8%
 

2. It was further averred in the plaint that the business cannot be carried forward with advantage to the partners and even earlier a suit No. 139/79 was filed in the High Court by the Suris in respect of partnership for reference of dispute to the arbitration, however, subsequently this was amended as suit for dissolution. The amendment was allowed and the parties prayed for a dissolution of the partnership. Parties prayed for winding up of the affairs of the partnership and for rendition of accounts. The suit was contested by the defendants. The partnership was ordered to be dissolved vide order dated 20.8.81. The Court further directed that parties have agreed to treat the dissolution w.e.f 1.12.80 and a preliminary decree for rendition of accounts was also passed. The parties were further directed to suggest the name of the Commissioner who was to look into the affairs of the partnership and the accounts.

3. After passing of the preliminary decree on 20.08.1981 which was even subsequently referred to and confirmed in the order dated 17th May, 1982, the parties have been taken various steps to wind up the affairs of the partnership. Mr. M.L. Jain who was appointed as a Commissioner has taken care of the partnership business and in accordance with the directions issued by the court from time to time has completed the steps required to be taken in that direction. Thereafter, the parties had agreed that there was no other way except to get the property freehold and then sell the same. Vide order dated 16.5.2005, it was recorded that the property need to be converted from leasehold to freehold and the possibility of inter se bidding between the parties was not possible and the only alternative was to sell the property by public auction (refer to order dated 11.1.2005). Vide order dated 2nd August, 2005 every partner was directed to bring a sum of Rs. 2 lacs per share. A sum of Rs. 8 lacs was handed over to the Local Commissioner to be deposited in the bank which was towards the disbursement of salary of the staff and maintenance of the property. Another sum of Rs. 32 lacs was also required to be deposited by the parties within ten days for taking the appropriate steps for getting the property freehold from leasehold. Finally on 7th September, 2005, the court passed the following consented order:

This case has been heard for quite some time on each and number of hearings. The parties have discussed the matter in and outside the Court. All the parties to this suit are basically represented by four distinct groups. All the groups through their respective counsel are agreeable that some directions need to be issued in regard to carrying on business as well as disposal of the partnership assets. The agreed terms appear to be otherwise just, fair and equitable and in the interest of partnership business.

The agreed terms are:

(i) Defendant No. 1 has already booked a picture titled Salaam and Namaste for a period of six weeks form 9th September, 2005 to 20th October, 2005. The defendant No. 1 will be at liberty to exhibit this picture for a period of six weeks. However, defendant No. 1 undertakes to the Court that screening of this picture for a period of six weeks would positively prove profitable for the partnership business. A statement, which has been signed by the defendant No. 1, has been filed in Court today. This reflects an estimated profit of Rs. 2,25,000/- to the partnership.

Further, learned Counsel appearing for the defendant No. 1 contends that the nature of the business of exhibition of film is one which fluctuates on the opinion of the public and may not always fetch the expected profits. However, he again on the asking of his client assures the Court that the partnership would earn at least profit of Rs. 60,000/- and in the event the profit falls short of this amount, the said defendant shall make up the deficiency of profit on its own. If the profit exceeds Rs. 60,000/-, the defendant No. 1 will not be required to make up any deficiency on the estimated profit of Rs. 2,25,000/-.

(ii) Hence thereafter, no picture shall be booked by defendant No. 1 for exhibition in the cinema hall. None of the parties to the suit shall book any picture on or after 20th October, 2005.

(iii) The parties are taking steps to convert the property from lease hold to free hold and for that purpose an application will be submitted to the DDA by depositing the requisite amount as per rules. It is agreed that defendant No. 1 shall prepare the said application which in turn shall be signed by the members of the managing committee and this will bind all the members of the partnership. This application shall be submitted to the DDA within 10 days from today. The money to be deposited with the DDA shall be paid by the Commissioner from the monies lying in the partnership account or any other money deposited by the partners with the Commissioner so far. The amount to be deposited with the DDA shall be deposited by the partners in their proportionate share within one week of the demand raised by the Local Commissioner after defendant No. 1 brings to his notice what amount is required to be paid to the DDA with or immediately after filing of the application. The partnership business has been running in losses, therefore, the parties are agreed that with effect from 20th October, 2005, no business will be done except maintaining the cinema hall and facilities to the other occupants of the building.

Liberty to the counsel appearing for the Labour to file their claims before the Local Commissioner and liberty also to the managing committee and the parties to examine those claims and submit their answer to the Local Commissioner. The Local Commissioner may examine the estimated amount, which may be payable to the workmen/labour and would be at liberty to consult any Advocate, specialized in Labour laws, subject to such terms and conditions as he may dim fit and proper.

Further it is agreed that the amount due to the workmen/labour in shares proportionate of their share holdings in the partnership shall also be paid to them subject to such terms and conditions as deemed fit and proper the same shall be payable from the funds of the partnership. The above terms are interim directions and subject to such final order, which the Court thinks fit in the facts of the case. These interim arrangements will continue till varied. The parties will make effort to get the property converted to free hold as expeditiously as possible.

Ms. Anusuya Salwan, counsel for the DDA, who is present in Court, at the directions of the Court accepts notice. She will find out from the Deputy Director (Commercial), the minimum period needed for converting the said property subject to satisfaction of required rules and policy of the DDA. Directions with regard to payment of electricity bill and other payments as well shall be passed by the Court on the next date. List on 25th October, 2005. Copy of the order be given dusty to counsel for the parties.

4. In furtherance to the agreed terms, the court even issued further directions vide its order dated 28th October, 2005 and on 19th December, 2005, the parties were directed to hold the meeting and to settle the dues of the workmen as the parties had agreed to close the partnership business and it was not otherwise in the interest of the partnership to carry on its business as it was not making any profits and there were serious disputes between the parties with regard to earning of profits as well as losses. According to one section of the partnership, it was making profits while as demonstrated by the other section and even held by the Accountant of the concern, it was causing losses. On 12.1.2006, the court passed the following order:

Learned counsel for the parties submit that matter with the workers of the partnership concern working in the cinema hall has been amicably and finally settled. It is also stated that in terms of order dated 19th December, 2005, none of the workmen have come forward to take advance from the Local Commissioner. The workmen have already made applications for reference of their disputes to the Labour Court or such other appropriate forum and the Govt. of N.C.T. of Delhi has already made reference of the dispute of the workmen to the Labour Court vide its order dated 8th December, 2005 and the determination of such dispute is pending before the competent Labour Court.

However, before this Court, the parties to this suit as well as workmen, who are being fully represented before this Court have mutually agreed and amicably settled their disputes with regard to payment of wages, compensation and/or any other charges/dues payable to the workmen for the service rendered by them as well as their retrenchment from the employment in view of the fact that partnership business has closed. The agreed terms are:

(i) That the 22 permanent employees (one of them is stated to have died and his legal heirs are entitled to receive compensation on his behalf) and 6 temporary employees of the cinema hall would get a total compensation of Rs. 34 lakhs.

(ii) The managing Committee of the partnership through the Local Commissioner would pay that amount in full and final settlement of the claim of the workmen and no dues will be payable to the workmen thereafter and the liability of the partnership firm and its partners shall stand fully and finally settled and absolved.

(iii) The managing committee of the partnership along with the representatives of the workmen shall prepare a list of each of the worker stating the extent of compensation/amount, which is to be paid to the said workers. This list would be signed by the concerned workmen as well.

(iv) The Local Commissioner would make payment of this amount by cheque to the concerned workmen directly against receipt on the basis of this list. The payments would be made within one week after the list as per the directions of the Court has been submitted to the Local Commissioner. Local Commissioner is at liberty to ask the bank to encash the FDRs for payment of labour Charges.

(v) Any advance received by the workmen would be liable to be adjusted from this payment. The managing committee would bring to the notice of the Local Commissioner whether any advance is received by the workmen. The statement in relation to the advance should be supported by the receipt against which the amount was paid to the workmen.

(vi) Upon payment of Rs. 34 lakhs in the proportion and manner as afore-referred, the dispute between the parties would be deemed to have been settled and the reference made by the Government of NCT of Delhi shall stand fully satisfied. The workmen shall withdraw their claim petitions from the concerned Labour Court.

(vii) It is also agreed that in the event the same partnership firm commences the business of running the cinema hall, the cases of the workmen would be considered on priority. This condition would obviously be not enforced against the purchaser or individual partner of the partnership concern in the event he purchases the cinema hall for any purpose whatsoever.

These terms and conditions are agreed upon by the parties upon due instructions from their respective client, who are present in Court. The workmen as well as the partners of the partnership concern, who are present in Court today, shall sign this order as a token of acceptance of terms and conditions agreed to between the parties.

Further it is agreed between the contesting partners of the partnership concern that:

(a) the auditorium/cinema hall shall be closed under the supervision and with the approval of the Local Commissioner and no activity whatsoever would be carried in the said auditorium/cinema hall.

(b) the remaining portion on the ground floor shall also be locked. However, a security officer would be appointed by the managing committee to ensure the security of the building. Five sets of keys in respect of that premises/portion will be prepared. Out of five sets of the keys, one will be given to the security officer and the remaining four sets will remain with each group of contesting partners.

(c) the security officer shall ensure that the bathroom and the building is not utilised by any person including outsiders for any purpose whatsoever inclusive of use of toilet etc.

(d) the managing committee under the chairmanship of the Local Commissioner would decide what minimum staff is needed for ensuring the upkeep of the building. They are at liberty to call for other occupants in the building and fix the maintenance charges. The managing committee may hold its meeting even without the Local Commissioner on 17th January, 2006.

(e) the occupants would pay all the arrears of maintenance charges to the Local Commissioner as calculated by the managing committee.

(f) the managing committee would also consider the possibility of collecting the charges from the occupants or make such contribution themselves for meeting out the outstanding charges of electricity. This is discretionary with the parties and subject to settlement of accounts.

(g) all the partners will deposit the cheques or cash in hand with them on account of partnership business with the Local Commissioner within two weeks from today.

(h) the managing committee may also consider about giving site of parking and panwala on rent or license fee.

List this case for further directions on 23rd January, 2006.

5. The attitude of the DDA, to say the least, was irresponsible in this case and it is because of this attitude that the entire assets of the partnership could not be disposed of and the proceedings pending before this Court since 1981 could not be terminally finally.

6. All the matters in regard to the affairs of the partnership were practically settled. The disputes between the workmen and the management were also resolved and the payments are stated to have been made as per the agreement between the workmen and the management. Thus, the controversy that remained to be adjudicated by the court after passing of the preliminary decree and after various steps being taken as per the agreement between the parties in furtherance to order of the court, falls in a very narrow compass. What really needs to be mentioned in this case is the working of the DDA and the kind of attitude which it adopts towards recovery of public dues. Before I proceed to discuss this aspect of the case which had really been a matter of concern for the court keeping the larger public interest in mind, I would first like to make certain directions in relation to final winding up of the partnership concern:

(i) In terms of the earlier orders passed by the court, entire disputes with the workmen are stated to have been resolved. Only very limited and skeleton staff will be kept for the purposes of maintenance and upkeep of the property in question.

(ii) The DDA has now informed by a letter that even misuse charges are payable in relation to the property i.e. the Rachna Cinema Building. The partnership concern and its partners would be at liberty to challenge the order passed by the DDA in accordance with law and to take recourse to such other legal remedy as is available to them.

(iii) The partnership business, as already observed in the previous orders, would not carry out the exhibition activity and the Local Commissioner would continue to be in charge of the affair of the partnership. As per the previous orders, the Managing Committee and the occupants of the flats would fully cooperate with the Local Commissioner who will continue to submit his interim reports and seek such directions from the court as he may deem necessary.

(iv) All the orders passed by the court in relation to the affairs of the business as well as in relation to the occupants of the building will continue to be in force.

(v) The partners of the partnership concern are entitled to the respective shares in terms of the preliminary decree and even subsequently agreed by them. They shall make every possible efforts as consented by all of them to sell off this property by a public auction or otherwise and share the net profits in accordance with the shares defined in the preliminary decree.

(vi) This case, thus, can be adjourned sine die with liberty to the parties to move the court for seeking directions if any in accordance with law. Liberty is also granted to the partners to revive the suit after they have been able to get the property converted from leasehold to freehold and/or are able to negotiate the sale of the property in accordance with law.

7. Coming back to the real controversy which was raised before the court and which has larger repercussion of public interest including the functioning of the DDA. It needs a special mention and directions.

8. As already noticed that during the pendency of the suit, the parties had agreed that they would like to sell the property after getting the same converted from leasehold to freehold and would deposit the requisite charges with the DDA. Mention in this regard was made in the order dated 7.9.2005 and the counsel appearing for the DDA who was present in court on that date, was directed to find out from the Deputy Director (Commercial) the minimum period which the DDA would take in finalisation of the case as per their policy. This direction was necessitated in view of the fact as it was stated that the DDA takes months and months to finalize such a request and the assets of the partnership are likely to be wasted during that period. The counsel for the DDA on 27.10.2005 had stated that subject to fulfilllment of all the conditions and supply of the requisite document and deposit of the fee, the DDA shall endure its best to consider the case of the firm for conversion as expeditiously as possible and in any case within 45 days. On 28.10.2005, it was stated before the court and even a letter was placed on record that the DDA had calculated the charges payable by the parties to the extent of Rs. 81,09,000/- as conversion charges. The parties had moved appropriate application before the authorities but no steps were taken, what to say of within 45 days but even till 10.02.2006, which resulted in the court's directing the Director (Land Costing) to be present in court. On 15.2.2006, the Director was not present and again a direction was made in that behalf. On 16.02.2006 the Director of the DDA appeared and stated that some other senior officers were involved in taking the decision in this regard and that is why the decision could not taken within the time agreed. However on 17.2.2006, various officers were present and it was stated for the first time before the court that no action could be taken for recovery of the alleged mis-use charges from the parties right from the year 1983 when the first notice was alleged to have been served upon the defendants. This controversy attained significance in view of the fact that on 21.10.2005, a letter was placed by the DDA on record claiming conversion charges to be Rs. 1,17,00,000/-. However, this was objected to by the claimants. As it was not based on right calculation as per the records of the DDA itself, the DDA filed still another letter on 27.10.2005 stating that the conversion charges recoverable from the concern were Rs. 81,09,000/- and the figure of Rs. 1,17,00,000/- was not correct as there are different charges for different zones and there was a mistake. Despite the fact that the letter was issued by the competent authorities after due deliberation and they knew that the statements are to be made before the court, still this differentiation was totally unjustified. Be that as it may, to make its conduct before the court look worst, vide letter dated 24.1.2006, it was stated for the first time that the concern has to pay mis-use charges which have been calculated till 25.11.2005 at Rs. 5,43,51,763/-. The breakup of the mis-use charges was stated to have been sent along with this letter to the partners.

9. This certainly is a strange phenomena. The DDA failed to take any steps right from October, 2005 till January, 2006 while the court had on their own statement granted them 45 days to entertain and decide the application of the parties. On the basis of the letter dated 27th October, 2005, the court vide its orders dated 28th October, 2005, had even directed the partners of the concern to contribute payment as per the requirement of the DDA. The entire effort not only of the parties but of the court even to resolve this issue was adversely affected by the irresponsible attitude of the concerned officers in the DDA. In this case, the court is not concerned with the correctness and legality of the orders dated 27th October, 2005 and 24th January, 2006. The affected parties are at liberty to take such steps as are permissible to them in accordance with law. The court is really concern in the present case as to the irresponsible conduct of the authority and particularly sheer wastage of public funds by its callous attitude. The records of the DDA were called for and it appears that a notice was sent to the concern in the year 1983 requiring the defendants to pay the mis-use charges. Even now vide letter dated 24.1.2006 the mis-user charges are claimed right from 1983 till November, 2005 which are amounting to more than Rs. five crores. The record of the DDA clearly shows that no steps were taken by the DDA to recover mis-user charges for all these years. Why the mis-user charges of more than five crores have not been recovered for years and who is responsible for this huge loss of public money and further who is liable to pay interest on this sum of Rs. 5 crores for all this period from 1983 to 2005, are the questions which need to be looked into by the Vice-Chairman of the DDA and its highest body forthwith.

10. As already noticed, vide letter dated 21.10.2005, the conversion charges were calculated at Rs. 1,17,00,000/- which were subsequently stated to be Rs. 81,09,000/-. This change in figure was attributed by the officers of the DDA in court to an oversight. It is really strange as to how an authority can act in this manner despite being aware of the fact that the details are being filed in the court of law particularly where they had sought time to dispose of the matter within 45 days from the date of the application. Why the figure of Rs. 5,43,51,763/- was not mentioned again is attributed to an oversight. The times have come when the authorities like the DDA and the persons at the realm of affairs of the administration of such authorities, must take appropriate steps and measures to ensure that every step is taken timely and according to their policies to recover the public dues. In this case, a notice was issued on 30th June, 1983 clearly stating as many as seven violations (a-g) of the terms and conditions of the lease deed dated 30th September, 1977 and the owners were asked to remove the un-authorised use and restore the premises to permissible use within the time granted. An appeal was filed by the appellants against the order dated 27th June, 1983 passed by the Deputy Commissioner of Police (Licensing) which was also disposed of with the directions as contained in the order dated 24.3.84. Despite this order, the authorities have not taken any action and today the mis-user charges probably relatable to the same items are claimed at Rs. 5,43,51,763/-. Why these public dues of more than Rs. Five crores in one property of the present kind were not recovered for all these years, shows a callous and irresponsible attitude of the authorities. It was conceded during the course of hearing of this case that the properties where the DDA has to recover mis-use charges would run into larger numbers and that it may hardly be possible to count such properties.

11. During the course of hearing, learned Counsel appearing for the DDA as well as different officers of the DDA took up the plea that there was a decision of the DDA not to recover mis-user charges unless and until concerned party applies for conversion. Strange that it sounds, the court was compelled to ask the DDA to produce such a policy before the court but none was produced. However, a letter of the Ministry of Urban Development and Poverty Alleviation dated 24.06.03 was produced in court. Clause III of this letter reads as under:

MISUSER AND UNATHORIZED CONSTRUCTIONS

As already decided, the unauthorized construction and misuse of the building shall continue to be taken care of the by the NDMC/MCD/DDA etc. under their bye-laws/regulations. The DDA and the local bodies should take coordinated action to curb violations and unauthorized constructions. Accordingly, the lease administering authorities may permit conversion of all leased properties irrespective of any building violations or use violations that may exist, subject to recovery of misuse charges/damages charges as applicable under the guidelines of the lease administering authorities whether earlier demanded or not.

12. This decision besides being opposed to public policy and master zonal plan of the DDA as well as the statutory permissible user of the properties, does not in any case empower any authority to waive the mis-user charges or not to recover them for years together as in the present case for more than 23 years. Thereafter, it was conceded that there is no policy decision of the DDA to lay down such a course that mis-user charges will be recovered if at all when a party applies for conversion of the property from leasehold to freehold. To some extent, even this aspect was not clearly placed before the court. It is unfortunate that DDA could even take such a stand before the court and absolve itself of its statutory and public duty. Public duty and public obligation is the essence of good administration. Reference in this regard can be made to a Division Bench judgment of this Court in the case of Shri Mahender Kumar v. Land Acquisition Collector WP(C) 13308-12/2005, decided on 11.5.2006 wherein the court held as under:

Both these adverse consequences can easily be avoided by the authorities concerned by timely and coordinated action. The authorities are required to have a more practical and pragmatic approach to provide solution to this persisting problem. Various files of the authorities which have been produced before us in number of cases do not reflect any better state of affairs but mostly a mere inaction on the part of the concerned officers/officials in the Government hierarchy. We have already stated that large number of writ petitions are being filed in this Court claiming the similar reliefs. In most of the cases, the respondents do not even dispute the claim of the petitioner based on awarded compensation. Let us examine the law in regard to public accountability for default of performance of statutory and public duties which are relatable to the powers vested in the administrative and executive authorities under the provisions of this Act. Reference in this regard can be made to the judgment of this Court of the same date in the case of Sukhbir Singh Tyagi and Ors. v. Lieutenant Governor and Ors. WP(C) 22895-927/2005 where the court held as under:

4. Various provisions of the Land Acquisition Act impose a duty upon the authorities to act within a specified time. Consequences of violation of such duty normally would be spelled out in the statute itself, even if it is no so stated. Aggrieved party cannot be said to be without remedy. The duty imposed by the statute may also be actionable by the express terms of the statute or on the principle that an action lies for any indictable wrong. There is clear distinction between the duty and the power. However, a duty may be implied from a power. The Courts may not look for or require a party to establish negligence as a fact because breach of statutory duty itself is a proof of negligence. The authorities enjoy considerable discretion under the provisions of the Act. Thus, it requires adherence to higher standards of care and ensuring that the public at large or a class of persons, subjected to their discretion are not exposed to undue delay and financial losses as a result of inaction of the authorities. The powers vested in the public officers under the provisions of the Act includes both statutory and administrative powers taking within its ambit the corresponding duty obligations to effectively carry out the object of the Act. If the public officers or public bodies fail to perform any public duty with which they have been charged, an order of mandamus will lie to compel them to carry it out and in some circumstances even if the time to perform under the statute had not left. In accordance with this principle, writ of mandamus will issue to the Government Officials in their capacity as public officers exercising executive duties, which affect the rights of the private persons. Occasionally and now more often mandamus may also be sought to enforce the non- statutory duties. The statutory duty must be performed without any reasonable delay. Delay in action, particularly grant of relief to which a private person is entitled to, would vest the affected party with further consequences while making the officer responsible for his latches. Action taken by persons holding public offices is to be inconformity with the basic rule of law and standard policies and must be free of arbitrariness. The Supreme Court in the case of Shivsagar Tiwari v. Union of India and Ors. even held a minister responsible personally for illegal allotments as exercise of power tantamount to misuse of power.

5. Breach of duty is an actionable wrong. Rights of the authorities and their duties are co-related. Violation of one's right is the breach of other's duty. In some cases, the department may be called upon to examine the conduct of its various officers as the department would be responsible for their action/inaction. Breach of duty may not essentially result from wrong doing, which may arise from negligence, failing to act timely or even by breach of duty under the statute, the duty may be specifically envisaged in the language of the provision or it may arise by necessary interpretation applying the concept of reasonable conduct. The expansion of rights would lead to expansion of bonds of liability. They are co-related and inter-dependent. Expansion of one would result in widening result of other. Of course, they will have to be examined with reference to the needs and situations, which are contemplated under the law. Negligence or inaction have larger consequences and implies an obligation on the authorities vested with the powers to act with greater and higher standards of care. If there is a right under the law, there must be a remedy for its violation as law commands nothing vainly-Lex nil frustra jubet.

6. Another facet of statutory duty is to impose negative obligations on the State not to encroach upon the rights of the individual or to frustrate what is granted under law to the citizen. Declaration of rights would be meaningless unless there is effective machinery for enforcement of the rights. Remedy is the essence of a right. A right really become effective and meaningful when its enforceability is accepted by the procedure of law. The legality or illegality of a State action, particularly when they are acting in furtherance to the statutory powers vested in them, would be subject to judicial review, not in its narrowest sense. Wherever a cause is relatable to breach of statutory or implied duty of a public officer, the rule of law would essentially provide for a remedy even if it is not so specifically spelled out in the provisions of the Act. Arbitrariness and unreasonableness being facets of Article 14 are available as grounds not only for questioning an administrative action but in certain cases may even invalidate subordinate legislation. Timely action is the essence of government functioning and unreasonable delay questions the very correctness of such orders. Wherever the records offer no explanation for prolonged unreasonable delay, the equity will tilt more in favor of the petitioners than uphold the action of the authorities to be correct, being done in the normal course of its business.

Books Referred to:

2002(3) Supreme Court Cases 7

1996 (VI) Supreme Court Cases 1390

'The Law of torts' - 9th Edition by Ramaswamy Iyer.

'Law of torts' - 12th Edition By Salmond and Heuston

Halsbury's Laws of England - 4th Edition

By Lord Hailsham of St. Marylebone.

7. Concept of public accountability has been applied to the decision making process in the government by the courts for a considerable time. This concept takes in its ambit imposition of costs and its recovery from the officer concerned for their negligence or acts of prolonged, unexplained delays running into years. In the case of State of Andhra Pradesh v. Food Corporation of India 2004 (13) Supreme Court Cases 53, the Court directed as under:

We are shocked as to the manner in which the State Government is filing petitions in this Court resulting not only in wasting the time of this Court and all others concerned but in total waste of public money. The impugned orders have been challenged after more than eight years with almost no explanation, as is evident from the paragraph reproduced above.

In this view, while dismissing the applications seeking condensation of delay, we direct that enquiry be made forthwith by the State Government as to the person responsible for this state of affairs, recover from such person the costs involved in filing these petitions and submit the report to this Court within a period of four weeks.

8. Administrative or executive actions are subject matter of judicial review. Noticing the significance of scope of judicial review in this regard and bureaucracy accountability, the Supreme Court in the case of State of Bihar v. Subhash Singh held as under:

In our democracy governed by the rule of law, the judiciary has expressly been entrusted with the power of judicial review as sentinal in qui vive. Basically judicial review of administrative actions as also of legislation is exercised against the actions of the State. Since the State or public authorities act in exercise of their executive or legislative power, they are amenable to the judicial review....

...The normal principle that the permanent bureaucracy is accountable to the political executive is subject to judicial review. The doctrine of 'full faith and credit' applied to the acts done by the officers and presumptive evidence of regularity of official acts done or performed, is apposite in faithful discharge of duties to elongate public purpose and to be in accordance with the procedure prescribed. It is now settled legal position that the bureaucracy is also accountable for the acts done in accordance with the rules when judicial review is called to be exercised by the Courts. The hierarchical responsibility for the decision is their in-built discipline. But the Head of the Department/designated officer is ultimately responsible and accountable to the Court for the result of the action done or decision taken. Despite this, if there is any special circumstance absolving him of the accountability or if someone else is responsible for the action, he needs to bring them to the notice of the Court so that appropriate procedure is adopted and action taken. The controlling officer holds each of them responsible at the pain of disciplinary action. The object thereby is to ensure compliance of the rule of law....

...A member of the permanent executive, is enjoined to comply with the orders of the Court passed in exercise of the judicial review. When a Court issues certain directions to the executive authorities it is expected that the authorities would discharge their duties expeditiously as enjoined under the rules and as per the directions. If they do not discharge the duty, necessarily, they are required to give explanation to the Court as to the circumstances in which they could not comply with the direction issued by the Court or if there was any unavoidable delay, they should seek further time for compliance. When, neither of the steps have been taken by the officer in that regard the Court can impose the costs personally against him for non-compliance of the order...

...It is known fact that in transaction of the Government business, none would own personal responsibility and decisions are leisurely taken at various levels. It is not uncommon that delay would be deliberately caused in filing appeal or revision by Government to confer advantage to the opposite litigant; more so when stakes involved are high or persons are well connected/influential or due to obvious considerations. The Courts, therefore, do not adopt strict standard of proof of every day's delay. The imposition of costs on officers for filing appeals causes public injustice and gives the manipulators an opportunity to compound the camouflage. Secondly, the imposition of costs personally against the officers would desist to pursue genuine cases of public benefit or importance or of far-reaching effect on public administration or exchequer deflecting course of justice.

9. The principle of care, maintenance of higher caution, expeditious decision-making process in exercise of statutory powers, public accountability and transparency are also applicable to the various proceedings under the law of acquisition. Various provisions of the Act could be referred to demonstrate that the exercise of powers emanating from statutory provisions is coupled with public obligation, to protect the rights of the land owners.

10. The Land Acquisition Collector is expected to conduct a survey prior to the issuance of notification under Section 4 of the Act for acquisition of the land. Sub-section (2) of Section 4 empowers the Officer to enter upon any property for the purposes of survey and other acts stated in that provision. The Legislature has even taken precautions to make a statutory provision for payment of compensation for any damage which may be done during completion of such duty imposed upon the Officer, under the provisions of Section 4 of the Act. In regard to deficiency of the amount so offered or tendered, the dispute could be referred to the Collector or the Chief Revenue Officer. After having issued declaration under Section 6 of the Act, the next effective step to be taken by the authorities is to issue notices to the interested persons under Section 9 of the Act. It is intended to convey to the public, the intention of the Government to take possession and calling upon them to make claims in regard to the lands acquired. The Collector would make an enquiry and then pronounce his award as contemplated under Section 11 of the Act. The Collector is to take approval of the government before the award could be made enforceable. Section 11(a) was introduced by the Amending Act 68 of 1984 to require the authorities to make an award within 2 years from the date of publication of declaration. The consequences of non-compliance were to the extent that entire acquisition proceedings shall lapse. The only explanation in providing the period of 2 years was the exclusion of the period during which orders of stay passed by the court were in operation. After pronouncing of the award under Section 11 of the Act, unless the case was covered under the provisions of Section 17 of the Act, the Collector was to take possession of the lands under Section 16, and such lands would vest in the government, free from all encumbrances. After the award is made the Collector is required to give immediate notice of his award to the persons interested who were not personally present before him so that the compensation could be awarded to the rightful claimants. Then the award of the Collector in regard to apportionment, area value of the land and the interested persons attains finality in that field. The claimants have a right to claim compensation without prejudice to their rights and contentions by making reference petitions under Section 18 of the Act. From the stage of making of a reference, the matters are transferred from the administrative and executive authorities functioning under the provisions of the Act, for adjudication process to the courts.

11. The Land Acquisition Collector is expected to caution the authorities (beneficiaries for whose benefit the lands are acquired) that they should make the funds available for their disbursement to the rightful claimants. This now is the clear directive stated in Section 50 of the Act.

12. Under the provisions of the Act, a duty is cast upon the authorities to make payment of compensation determined to the rightful claimants expeditiously. The provisions of Section 9 indicate a preparatory step by the State authorities invoking the plea that the Government intends to acquire the lands as well as calling upon the claimants to claim compensation. The Collector would determine the fair market value of the acquired land and direct its payment/apportionment amongst the rightful claimants i.e. interested persons. The right of the persons to claim money is, thus, instantly available to them upon making of the award except in cases where the compensation of the lands of the owners is taken under Section 17(3) of the Act wherein they become entitled to 80% of the estimated compensation before taking possession of the land. The provisions of the Act even provide a safeguard to the citizen and obligation to the State that where estimated compensation cannot be paid because of contingencies stated in Section 31(2), they are required to deposit the same in terms of the Section 31. Under Section 19 while the Collector is making the reference he is required to provide information to the Court in writing, including the amounts which have been paid or deposited and all other amount for damages or compensation, which were tendered in accordance with the provisions of the Act. Section 23(1-A) requires authorities to pay, in addition to the market value as called in terms of Section 23, an amount @12% per annum on the market value for the period commencing from the date of notification issued under Section 4(1) of the Act to the date of the award of the Collector or the date of taking possession of the land. In addition to this, 30% of the market value of the land is payable on account of compulsory nature of acquisition. Section 34 further postulates that the amount of compensation so determined and if not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereupon @9% per annum from the date of taking of possession until it shall have been so paid or deposited. Further, for the period in excess of one year from the date of taking over possession, interest is payable @15% per annum for the compensation amount determined or part thereof which has not been paid or deposited before the date of such expiry.

13. The scheme of the Land Acquisition Act has an inbuilt check and balances and the legislative intent of providing just and fair market value to the owners of the lands and expeditiously is more than evident under various provisions of the Act. A dual purpose is sought to be achieved by providing even the periods within which the authorities are expected to discharge their duties and ensure disbursement of compensation to the claimants. In default thereof, certain further liabilities accrue against the department. Surely, the Act does not contemplate and rightly so that a claimant entitled to receive compensation is expected or it is even desirable for him to run in various departments of the Govt. or the authorities to receive his compensation, which may not be paid to him for years together. Certain benefits are available to the claimants for delay in acquisition proceedings commencing with under Section 4 and making of the award under Section 11, as the authorities are required to pay interest @12% per annum to the claimants for this period. The claimants are also protected to some extent against compulsive acquisition as well as from the date the possession is taken till entire payment of the awarded compensation is made to the claimants. But the Statute has a lacunae inasmuch as it gives no benefit much less an additional benefit to the claimants, whose lands are required for the entire period commencing from the date of making of the award till taking over of possession by the Department. No liability of any kind comes on the department despite any length of this period i.e. where the judicial pronouncements would abridge the gap and require the authorities to ponder over this aspect of the matter and not leave the claimants unbenefited or remedy less for this period. There are number of cases before the Court where the awards are made and for years compensation is not paid. In some of them, may be the department has some reasonable excuses but in most of them at least the records produced before the Court in those cases do not reflect so. Still in another set of cases, the land is acquired, award is made and possession thereof is not taken for years together and the period varies from 7 years to 30 years. Still in another set of cases the possession is taken and for years compensation is not paid and if it is paid, it is not paid in its entirety. There are large number of writs, which are coming up before the Court every day falling in either of these categories. This aspect has been discussed by the Court in some detail in another case being WP (C) No. 13308-12/2005, which is being disposed of by the judgment of the same date.

14. Inaction and action taken after inordinate delay by various functionaries working under the scheme of the Act results in seriously jeopardizing interest of claimants as well as the public money. In some cases, the claimants are not paid their dues entitling them for higher rate of interest and interest for unnecessarily prolonged period. This may be their gain but it certainly is to the disadvantage of the public exchequer and an avoidable financial loss. On the other hand, the claimants would suffer accrual of any benefits, if their properties are acquired, award is made and the possession is not taken for years together. This further leads to dual disfunctional results. The very purpose for which the land is acquired may stand frustrated because of long intervening period as a result of unauthorised construction or colonies coming up on the acquired land, and secondly it occasions in generating litigation which again is avoidable. Thus, timely action for completing acquisition proceedings and expeditious determination and disbursement of compensation to the claimants should be the Hallmark of all the functionaries doing public duties under the provision of the Land Acquisition Act.

15. In the case of ABL International Ltd. and Anr. v. Export Credit Guarantee Corporation of India Ltd. and Ors. , the Supreme Court held as under:

It is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. Therefore, once the State or an instrumentality of the State is a party, it has an obligation in law to act fairly, justly and reasonably to a contract which is the requirement of Article 14 of the Constitution.

Unless the action challenged in the writ petition pertains to the discharge of a public function or public duty by an authority, the courts will not entertain a writ petition which does not involve the performance of the said public function or public duty.

16. State actions causing loss are actionable under public law and this is as a result of innovation to a new tool with the court, which are the protectors of civil liberty of the citizens and would ensure protection against devastating results of State Action. The principles of public accountability and transparency in State action even in the cases of appointment, which essentially must not lack bonafide was enforced by the Supreme Court in the case of Centre for public interest litigation and Anr. v. Union of India and Anr. .

17. Adverting to the facts of the present case in the back drop of principle of public or statutory duty and accountability of public officers, we are constrained to say that authorities have not been able to place any justification on record for non payment of the awarded compensation to the petitioners. Non-disclosure of any sufficient reason obviously would hold them responsible for the consequences flowing from the default in discharge of their public and statutory obligations. The Notification under Section 4 was issued on 27th January, 2003 while declaration under Section 6 was issued on 23rd January, 2004 i.e. after a lapse of nearly one year. The award was made by the Collector on 22nd August, 2005 being Award No. 15/2005-06/DC(N-W) after a lapse of nearly 1 year and 8 months. The possession of the land was taken on or before 14th September, 2005 but the compensation of the petitioners have not been paid even till filing of the present writ petition. The petitioners had filed their objections under Section 18 of the Land Acquisition Act on 14th September, 2005 itself. In other words, the petitioners had filed application for payment of their compensation and their application for further enhancement in accordance with Section 18 of the Act but despite filing of such applications, copies of which have been filed on record, they have not been paid compensation till date. The respondents have not even deposited the said compensation before the Reference Court. There is no justification whatsoever on record as to why the compensation has not been paid for the last more than 8 months. Two important aspects of the matter, which create avoidable liabilities on the public exchequer are, who would be responsible for not acting within a reasonable time and furthermore, who would pay the interest in terms of Section 34 and even under Section 23(1-A). Should this liability be fastened upon the common income-tax payer, who contributes towards the public exchequer or should it be the liability of the officers/officials, who are in charge of the acquisition proceedings and do not deal with the files for months together. Timely disbursement of compensation is the obligation of the authorities and no reason whatsoever either by filing a counter affidavit or by production of record has been shown as to why even after taking possession in September, 2005, the compensation has not been disbursed for 8 months. It is a matter, which should invite attention of all concerned.

The disputes mainly are interdependent or are resulting from inaction of the authorities. Reference in this regard can be made to Civil Writ Petition Nos. 933/88, 1161/88, 6372/06, 4739-43/06, 22895/05, 5663/05, 11206/05, 6609- 48/06, 4070-73/06 and 22881/05. The petitioners had submitted the applications complete in all respects with affidavits etc. on 14.6.05 itself but no records have been produced before us to show that the petitioners were called upon to make up in deficiency if at all noticed by the respondents in fact that is not even so stated in the affidavits filed in this Court by the respondents. Once the petitioners had furnished the requisite documents and had submitted their applications there can be no justification whatsoever for delay in disbursement of the awarded compensation to them. Persistent and chronic nature of these problems is amply demonstrated by the fact that in Civil Writ No 1161/88 vide its order dated 5.5.05 the Court had passed directions requiring the respondents to look into various problems relating to acquisition proceedings before the authorities and to prepare guidelines. In Civil Writ No. 5463/99 Deep Jot Singh and Anr. v. Union of India the Court in similar circumstances as of the present case had allowed the writ petition of the petitioners and imposed cost of Rs. 10,000/- to be recovered from the erring officers. Despite specific directions of the Court that the amount of cost which was to be paid at the first instance by the respondents was to be recovered from the salary of the erring officials in accordance with law. Despite a specific direction that the report should be submitted within three months, the respondents have filed no report and it had been left to the imagination whether the direction and orders of the Court have been implemented by the respondents in its true spirit and substance or not.

13. The present suit primarily is a dispute between two private parties. The determination and resolution of that dispute mainly depends upon the policy of the DDA and the manner in which it operates. Public authorities must adhere to the normal and prudent principles of business. They cannot ignore their public duty. Recovery of public dues is the foremost duty of such public authorities and gross negligence, culpable delays and irresponsible attitude need to be checked at all level of the concerned authorities. The court would be failing in its duty if it ignores this aspect and declines to issue proper directions requiring the authorities to wake up and take note of the gravity of the situation created because of this so-called decision of the authorities when as matter of act no such decision exists. It is not only for the courts alone to remove the cause of litigation but a greater obligation is caste upon the public bodies and authorities to avoid generation of unnecessary litigation and also to ensure recovery of public dues. If the claim of the DDA is correct and a sum of more than Rs. five crores is due and payable only for this one single property, what would be extent of amount recoverable from thousands and thousands of properties in Delhi.

14. Thus, in view of the above detailed discussion, further following directions are issued in this suit:

(i) The Vice-Chairman, DDA shall conduct or cause to be conducted a departmental inquiry and fix the responsibility as to why the dues of more than Rs. five crores in relation to the plaintiffs in the present suit were not recovered from the year 1981-83 to till date.

(ii) He shall take conscious decision as to who would be liable to pay the financial loss caused to the DDA for all these years. Is it the common man of this country who will have to pay and bear the financial burden resulting from inaction and negligence of the officers/officials of the DDA or is it the person/persons responsible for such mis-deeds and financial loss to the Authority including the loss of interest' Who should be held liable to pay these amounts.

(iii) The Vice-Chairman, DDA shall place before the highest body of the DDA the entire matter and then shall take a policy decision and issue guidelines as well in relation to imposition and recovery of mis-user charges which run into thousands of crores of rupees if the estimation of the single case as given by the DDA is correct. The action taken report shall be submitted to the Registry of this Court by the Vice-Chairman, DDA within three months from the date of passing of this order which then shall be placed by the Registry before the court.

15. Ordered accordingly.

16. Copy of this order will be served upon the Vice-Chairman, DDA personally by the Registry of this Court.