“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO._1091__OF 2010 (Arising out of SLP (C) No. 11462 of 2007)

Cantonment Board, Meerut & Anr. …. Appellants

Versus

K.P. Singh & Ors. …. Respondents

J U D G M E N T

V.S. SIRPURKAR, J.

1. Leave granted.

2. Correct scope and applicability of the maxim actus curiae neminem  

gravabit falls for consideration in this appeal.  This appeal has been filed  

challenging the judgment in Civil Miscellaneous Writ Petition No.60135 of  

2006  passed  by  the  High  Court  of  Judicature  at  Allahabad.  The  High  

Court,  by  the  impugned  order,  has  held  that  the  respondents  herein,  

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namely,  Shri  K.P.  Singh  and  Gaurav  Traders  would  be  entitled  to  the  

refund of the amount deposited by them over and above the bid given by  

them.   Cantonment  Board,  the  appellant  herein  has  been  directed  to  

dispose of the application made by respondent Nos. 1 and 2 for refund  

expeditiously.  Needless to say, in the light of the observation made by the  

High Court favouring the refund of amount, few facts would be necessary.   

3. Under Section 60 of  the Cantonment  Act,  the Cantonment  Board  

was empowered to impose toll tax.  Accordingly, on 08.01.2005, a Gazette  

Notification was issued for the imposition of the toll tax on such commercial  

motor vehicles passing through the Meerut Cantonment.

4. In  pursuance of  this,  a  tender  was  floated and bids were  invited  

relating to 2005-2006 for levying toll tax upon the entry of the commercial  

motor  vehicles  within  the  territorial  limits  of  Meerut  Cantonment  in  the  

sense that the bidders were expected to pay the agreed amount to the  

Cantonment  Board  and  the  successful  bidder  was  entitled  to  levy  and  

collect  toll  tax  upon the  entry  of  the  commercial  motor  vehicles  in  the  

territorial  limits  of  Meerut.   Twenty  persons  submitted  their  tenders  in  

response to the notice inviting tenders whereupon the tender submitted by  

respondent Nos.1 and 2 herein jointly came to be accepted.  The highest  

offer by respondent Nos. 1 and 2 for the collection between 01.10.2005 to  

04.10.2006  was  for  3,57,30,000/-.   This  was  challenged  by  one  Gajraj  

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Singh.  Earlier, validity of the imposition of tax on the commercial vehicles  

by the Cantonment Board was challenged by the Civil  Writ Petition Tax  

No.1601 of  2005.   That  Writ  Petition  was  allowed  and  the  High  Court  

quashed the Notification dated 08.01.2005. The Cantonment Board filed a  

Special Leave Petition against the impugned order of the Allahabad High  

Court  dated  23.03.2006  and  leave  was  granted  resulting  in  the  main  

Notification authorizing the appellant to collect toll tax remaining intact.  

5. The appellant, therefore, issued a fresh Notification inviting tenders,  

on 14.09.2006.  By this, the contract for collection of tolls for the period of  

one  year  w.e.f  05.10.2006  to  04.10.2007  was  advertised.  Again,  

respondent Nos.1 and 2 herein stood as the highest bidders in the auction  

dated  27.09.2006  and  offered  the  highest  bid  of  Rs.3,61,57,727/-  

(Rs.1,02,000/- per day) for the said period of one year.  This was approved  

by the appellant vide its resolution No.229 dated 29.09.2006.  After the  

finalization  of  the tender,  respondent  No.5 Umesh Kumar submitted an  

application offering to pay 1,05,000/- per day with the advance deposit of 5  

days at the said rate in the account of  the Cantonment Board.  A Writ  

Petition was filed by respondent No.5 being Writ Petition No.60135 of 2006  

claiming therein a Writ of Mandamus commanding the appellant herein to  

start  the process of  holding fresh auction or  tenders  for  letting  out  the  

rights  to  collect  toll  tax  from  the  commercial  motor  vehicles  passing  

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through  the  territorial  limits  of  Meerut  Cantonment  by  issuing  

advertisement within the stipulated time.  It was further prayed that till the  

finalization of fresh auction, respondent No.5 should be allowed to pay at  

the rate of 1,25,000/- per day for the collection of toll tax.   

6. Ordinarily,  this  Writ  Petition  should  never  have been entertained.  

However,  it  was actually  entertained and the High Court  at  the time of  

passing  the  orders  on  the  application  for  stay  found  that  though  

respondent No.5 was willing to pay Rs.1,25,000/- per day for the right to  

collect toll tax, yet respondent Nos.1 and 2  herein had suo motu made an  

offer to pay Rs.1,31,000/- per day for the right to collect toll tax. The High  

Court  as  an  interim order  directed  respondent  Nos.1  and  2  to  deposit  

Rs.1,31,000/-  per  day  to  levy  and  collect  the  toll  tax  during  the  

interregnum.  Some other orders were also passed with certain directions.  

This order was passed on 08.11.2006.   

7. The Writ Petition was opposed by the appellant on the ground that  

the claim made by respondent No.5 was contrary to the terms of the tender  

and that in fact, there was collusion between the respondents who had  

colluded and quoted lesser price and that was to result into losses to the  

appellant-Cantonment Board.   

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8. It  so  happened  thereafter  that  the  said  auction  not  having  been  

approved by the senior officers, a fresh auction was ordered for letting out  

the rights to collect the toll.  In that view, the Writ Petition was not pressed  

by respondent No.5, and as a result,  the petition was dismissed as not  

pressed.  However, the High Court did not stop at that and noted that the  

original bid by respondent Nos.1 and 2 was only for Rs.1,02,000/- w.e.f.  

09.11.2006 for which they had been given the right of collection of toll tax.  

The  High  Court,  therefore,  took  the  view  that  since  the  petition  was  

dismissed,  the interim order,  if  any,  more particularly  dated 08.11.2006  

would merge with the final order and if the petition was dismissed, it would  

mean as if  the petition had not been filed and if any of the parties had  

gained something under the interim order that effect of the interim order  

should  be  neutralized.  Since  the  petition  had  been  dismissed  as  not  

pressed,  the  interim  order  dated  08.11.2006  accepting  the  bid  of  the  

respondent Nos. 5 and 6 of Rs.1,31,000/- would merge with the final order  

and respondent No.1 and 2 would be entitled to get refund of the excess  

amount of Rs. 29,000/- per day since their final offer which was accepted  

by the Cantonment Board was only of Rs.1,02,000/-.  The Court took the  

view that in view of the maxim  actus curiae neminem gravabit, no party  

could be allowed to take benefit of its own wrongs by getting the interim  

orders  and thereafter  blaming the  Court.   In  that  view,  the High  Court  

directed refund in favour of respondent Nos. 1 and 2 of the excess amount  

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i.e.  Rs.  29,000/-  per  day  w.e.f.  09.11.2006  till  the  end  of  the  contract  

period.  It is this order which has fallen for our consideration at the instance  

of the Cantonment Board.   

9. It was argued by the learned Additional Solicitor General of India,  

Shri  G.  Banerjee that  the High Court  was  completely  in  error  firstly,  in  

relying upon the maxim actus curiae neminem gravabit and on that basis  

ordering the refund of the amount.  According to Shri Banerjee, there was  

no question of any prejudice being caused to respondent Nos.1 and 2 on  

account of any order passed by the High Court much less the order dated  

08.11.2006.  He pointed out that in fact, the High Court was only guarding  

the interests of the Cantonment Board inasmuch as the petitioner before  

the  High  Court  (respondent  No.5)  had  offered  to  pay  at  the  rate  of  

Rs.1,25,000/- as against the accepted bid of Rs.1,02,000/- by respondent  

Nos.1 and 2 herein.  It was the voluntary offer of respondent Nos.1 and 2  

who  matched  the  offer  by  Shri  Umesh  Kumar  and  accepted  it  for  the  

amount of Rs. 1,31,000/- per day.  In lieu thereof, respondent Nos.1 and 2  

acquired the rights to collect the toll tax.  This offer was given by these  

respondents with open eyes and there was no question of prejudice being  

caused because of the interim arrangement ordered by the High Court by  

the  interim order  dated 08.11.2006 and,  therefore,  the  High Court  was  

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completely  unjustified  in  ordering  the  refund  merely  because  the  Writ  

Petition was dismissed as not pressed.

10. As against this, Dr. Dhawan, learned Senior Counsel supported the  

order, contending that but for the order, the petitioners would have been  

required to pay at the rate of Rs. 1,02,000/- per day and ultimately the Writ  

Petition in which the said order was passed as the interim arrangement  

thereby was dismissed.  The respondent Nos.1 and 2 would have a right to  

refund of the amount paid by them in excess of their original offer because  

that would be the natural result of the dismissal of the Writ Petition.

11. In  our  view,  the  High  Court  has  completely  misunderstood  the  

maxim  actus  curiae  neminem  gravabit and  has  committed  an  error  in  

applying it to the facts of the present case.  For applying the maxim, it has  

to be shown that any party has been prejudiced on account of any order  

passed by the Court.   We do not find any prejudice having been caused to  

the respondents herein.  If the High Court had decided to entertain the Writ  

Petition  filed by the 5th respondent,  ordinarily,  it  could have stayed the  

whole process thereby depriving the first and the second respondents of  

their  rights to collect the toll  tax on the basis of  their  bid in the tender.  

However, the High Court did not want to stop the process of tax collection.  

The tax had to be collected since the Notification imposing the tax was  

intact (thanks to the orders passed by this Court in SLP No.7682/2006).  

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Then it was a question as to at what rates should the rights to collect the  

toll tax be leased out and to whom.  The respondent No.5-petitioner had  

made  an  offer  of  Rs.1,25,000/-  per  day.   This  offer  was  matched  by  

respondent Nos.1 and 2 by raising the bid to Rs.1,31,000/- per day.  We  

are sure that respondent Nos.1 and 2 thus got into this arrangement with  

the  open  eyes.   Nobody  could  even  think  that  the  respondents  would  

unnecessarily suffer losses for matching and exceeding the offer made by  

respondent  No.5,  after  all  they  were  doing  business  and  they  would  

certainly not be interested in suffering the losses by matching the offer  

made by the 5th respondent and exceeding the same by Rs.6,000/-  per  

day.  They entered into this arrangement with absolutely open eyes.  Even  

ultimately, the petition was not dismissed as being a merit less petition.  

The respondent No.5 chose not to press the petition in view of the fact that  

a fresh auction was ordered by the appellant herein perhaps because the  

higher authorities did not choose to give sanction for all this exercise by  

the appellant.  Therefore, there was no question of respondent Nos.1 and  

2 suffering any prejudice because of the interim order passed by the High  

Court.  They were welcome not to make any offers.  All that would have  

happened was that respondent No.5 would have then acquired the rights  

to collect the toll tax and not the respondent Nos.1 and 2. But they did not  

want to lose their right to collect the toll tax and it is with this idea that they  

matched the offer of respondent No.5 and exceeded it by Rs.6,000/- per  

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day.  There is, thus, no question of any prejudice having been suffered by  

respondent Nos.1 and 2.  The High Court, in our opinion, has completely  

misread the law laid down in  Karnataka Rare Earth & Anr.  v.  Senior   

Geologist Department of Mines & Geology & Anr. [2004 (2) SCC 783].  

The concerned paragraph which has also been quoted by the High Court  

is as under:

“The doctrine of  actus curiae neminem gravabit  is not  confined in its application only to such acts of the Court  which  are  erroneous;  the  doctrine  is  applicable  to  all  such  acts  as  to  which  it  can  be  held  that  the  Court  would not have so acted had it been correctly apprised  of the facts and the law.  It is the principle of restitution  which is attracted.  When on account of an act of the  party, persuading the Court to pass an order, which at  the end is held as not sustainable, has resulted in only  gaining an advantage which it would not have otherwise  earned,  or  the  other  party  has  suffered  an  impoverishment which it would not have suffered but for  the order of the Court and the act of such party, then the  successful  party  finally  held  entitled  to  a  relief,  assessable  in  terms  of  money  at  the  end  of  the  litigation,  is  entitled  to  be  compensated  in  the  same  manner  in  which  the  parties  would  have  been  if  the  interim order of the Court would not have been passed.  The  successful  party  can  demand;(a)  the  delivery  of  benefit earned by the opposite party under the interim  order of the Court, or (b) to make restitution for what it  has lost.”

12. Applying  the  principles  in  the  above  paragraph,  it  was  not  on  

account  of  respondent  No.5  that  the  Court  was  persuaded  to  pass  an  

order.  In fact the 5th respondent had given its offer.  However, the first and  

second respondents not  only matched that  offer but  they exceeded the  

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same.  This was the voluntary action on the part of respondent Nos.1 and  

2 and they were not directed by the order to match the order of respondent  

No.5.  It was their voluntary act which was well calculated to earn profits by  

winning the rights to collect the toll tax.  Secondly, the Writ Petition was not  

held to be untenable nor was it held that respondent No.5 was not entitled  

to file the Writ  Petition,  in fact,  respondent  No.5 did not  press the Writ  

Petition at all.

13. There was no question of respondent Nos.1 and 2 having suffered  

any impoverishment which they would not have suffered but for the order  

of the Court and the act of respondent No.5.  In fact, it was on account of  

the voluntary act of respondent Nos.1 and 2 that the Court was persuaded  

to pass the order dated 08.11.2006 allowing respondent Nos.1 and 2 to  

collect  the toll  tax.   There was no question of  any benefit  having been  

earned by respondent  No.5  under  the interim order  nor  was  there any  

question  of  making  restitution  of  anything  that  was  lost  by  respondent  

Nos.1 and 2 since they had lost nothing.

14. In the above reported decision, the leases in favour of the appellants  

were challenged by way of the public interest litigation and grants in their  

favour were quashed.  They filed Writ Appeals and approached this Court.  

When they approached this Court, there was an interim order by which this  

Court had directed that the renewals of the exceeding grants in favour of  

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the appellants would continue till the next date of hearing.  This order was  

also modified and the lease hold rights were directed to continue till further  

orders of the Court.  The Karnataka Government,  after the dismissal of  

appeals,  issued  orders  calling  upon  the  appellants  to  pay  the  price  

calculated at the minimum rates.  The order was challenged by way of a  

Writ Petition which was dismissed and that is how the matter reached this  

Court.  It was argued that the act of the appellants quarrying the granite  

stones and exporting the same was accompanied by payment of royalty  

and  issuance  of  transport  permits  by  the  authorities  of  the  State  and  

though done under the interim orders of  this Court  was nevertheless a  

lawful and bona fide act.  According to the appellant, the mining lease in  

favour of the appellants were bound to be held to be valid in view of the  

interim orders passed by this Court that they could not be held liable for  

the payment of price of granite blocks.  The Court held that the demand of  

the State of Karnataka of the price of mineral could not be said to be a levy  

of  penalty  or  penal  action.   It  was  further  observed  that  though  the  

appellants were allowed the mining by way of an interim order during the  

pendency  of  the  earlier  appeals,  the  factual  transport  permits  were  

obtained by the appellants only after the dismissal of their appeals.  

The court recorded a final order that the appellants’ plea that they were  

ignorant  of  the  dismissal  of  the  appeals  could  not  be  accepted  and  

entertained.   The Court  then referred  to  the  decision  in  South  Easter  

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Coalfields Ltd. v. State of M.P. & Ors.  [2003 (8) SCC 648] where the  

doctrine of actus curiae neminem gravabit was considered and elaborated,  

holding this doctrine to be the principle of restitution.  Considering the facts  

of the case in paragraph 11, this Court observed that:

“ but for the interim orders passed by this Court there  was no difference between the appellants and any other  person raising, without any lawful authority, any mineral  from any land, attracting applicability of sub-Section(5)  of Section 21.  As the appellants have lost from the  Court, they cannot be allowed to retain the benefit   earned  by  them  under  the  interim  orders  of  the  Court.  The Court affirmed the High Court’s finding that  the  appellants  were  liable  to  be  placed  in  the  same  position  in  which  they  would  have  been  if  this  Court  would  not  have  protected  them  by  issuing  interim  orders.”  

15. We  have  already  explained  the  observations  of  this  Court  in  

paragraph 10 in the light of the facts of this case and it is clear that the  

appellants cannot take advantage and claim refund because of the fact  

that this was their voluntary offer and they were not directed to pay the  

amount that they did.  In view of this, we find that the High Court’s order is  

quite unsustainable.  We therefore, set aside that order and hold that the  

Cantonment  Board  would  not  be  liable  to  refund  anything  in  favour  of  

respondent Nos.1 and 2 who have enjoyed the rights of collection of toll on  

the basis of their own voluntary offer made before the High Court which the  

High Court has merely accepted by its order dated 08.11.2006.  With this  

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observation, the appeal is allowed.  It shall not now be necessary for the  

respondent to consider the representation made by respondent Nos.1 and  

2.  The direction to that effect by the High Court is also set aside.  Costs  

are estimated at Rs.50,000/-.

      ….………………………………..J.        [V.S. SIRPURKAR]

               …..………………………………..J.        [DR. MUKUNDAKAM SHARMA]

New Delhi; February 1, 2010.  

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Digital  Performa

Case  No.  : Civil Appeal No……. of 2010 (Arising out of SLP (Civil) No. 11462 of 2007)

Date of Decision : 1.2.2010

Cause Title :  Cantonment Board, Meerut & Anr.  Vs.

K.P. Singh & Ors.

Coram :   Hon’ble Mr. Justice V.S. Sirpurkar      Hon’ble Dr. Justice Mukundakam Sharma

Judgment delivered by :   Hon’ble Mr. Justice V.S. Sirpurkar

Nature of Judgment :  Reportable

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