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PETITIONER: SHIV SAGAR TIWARI

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       08/11/1996

BENCH: KULDIP SINGH, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      One of  the issues  for consideration before this Court in this  public interest  petition is  the validity  of  the allotments of  52 shops/stalls  made by Smt. Shiela Kaul the then minister for Housing land Urban development, Government of India.      While monitoring  this  case,  this  court  has  passed various interim orders from time to time. It would be useful to quote  three such  orders. The relevant part of the order dated April 17, 1996 is as under:      "The material  placed before  us inter  alia, discloses that 41  shops\stalls allotted on July 3, 1995 were in total contravention of the rules/policy approved situated in Lodhi Road Complex  - I  & II.  Hanuman Road  Market. Baba  Kharak Singh Marg market, DIZ area Market, and Pleasure Garden near Lajpat Nagar  Market. The  material on  the  record  further shows that  the said  43 shops/stalls  were allotted by Smt. shiela  Kaul  without  issuing  any  public  notice/inviting applications  from   the  eligible   persons  which  was  in violation of  the policy  formulated by  her on December 26, 1994. The  material also  discloses that orders of allotment in respect  of said  41 shops/stalls  were  passed  by  Smt. Shiela Kaul  on June  7, 1995  (5 shops  and 36 stalls). The material further  discloses that all the six shops have been allotted by  her  to  her  own  relations/employees/domestic servants of  her family  members and family friends. She has allotted two  shops to  her two  grand-sons, one shop to the maid servant  of her  son. Shri Vikram Kaul, who is residing in Dubai. One shop to Handloom Manager of the firm, owned by her son-in-law  and another shop to a close friend. One shop has been  allotted to  the nephew  of her minister of state, Shri P.K.  Thungon. It  is further  on the record that while making allotments in respect of stalls she has allotted most of the  stalls to  the relations,  friends of  her  personal staff and  officials of  Directorate of  Estate. The details and the  names of  Estate. The  details  and  the  names  of allottees and  their relationship  have also  been placed on the record."      The relevant  part of  the order dated July 19, 1996 is as under:

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    "Mr. N  N. Singh,  Superintendent of  Police, CBI,  New Delhi has  placed on  record interim report No. 3 dated June 17, 1996  and Interim  Report  No.  4  dated  July  separate preliminary enquiry  was registered against Smt. Shiela Kaul and others  in the matters of allotment of shops/stalls made by her  on June  7,1996 and  July 3,  1995 in  favour of her close relations/friends of her personal Estate. According to the  report,   the   preliminary   enquiry,   prima   facie, establishes that  Smt. Shiela  Kaul had  abused her official position as  the Minister  for Urban Development and she had entered  into   a  criminal  conspiracy  with  some  of  the acquaintances and  her personal staff, pursuant to which she in abuse  of her official position made these allotments and caused  wrongful   loss  to   the  Government  by  effecting allotments on economical licence fees basis without inviting any tender  or by  issuing public  notice for  inviting  the response from  the general  public from the point of view of earning maximum  revenue for  the Government. A regular case under Section 120-B, 420, 468/471 IPC and Section 13(2) read with 13(1)  (d) of  the Prevention  of Corruption Act, 1988, has been  registered against  Shiela Kaul and her additional Private Secretary Rajan S. Lala and others.      The  order  dated  September  6,  1996  to  the  extent relevant is as under:      "Pursuant to  this Court‘s  order dated  July 19, 1996, the Director  of Estates  has filed its report along with an affidavit regarding  the shops  and stalls  allotted by Smt. Shiela Kaul.  It is  stated that  from 1992 onwards 52 shops have  ben   sanctioned  by   the  then  Minister  for  Urban Development (Smt.  Shiela Kaul)  out of  which 7  shops were allotted by Smt. Shiela Kaul before she herself had approved the policy  in 1994  for disposal  of the  shops  on  tender basis. It  is further  stated in the affidavit that 45 shops were allotted by Smt. Shiela Kaul after 1994 in violation of the policy framed by the Ministry.      The  gist  of  the  objections  filed  by  the  various allottees have  been  enclosed  along  with  the  affidavit. Before any  action is  taken, we  consider it appropriate to give an  opportunity of  hearing to  all these  persons. We, therefore,  direct   the  Director   of  estates   to  issue individual notices  to these  42 persons  to  be  personally present in  this Court  or through  their counsel  to  argue their point  of view  in respect of their objections on 27th September, 1996 at 2 PM. They shall show cause to this Court why their  allotment be  not cancelled  and why  they be not burdened with damages."      This Court  by the  judgment dated October 11, 1996 has come to  the conclusion  that the  allotments of the said 52 shops/stalls  made  by  Smt.  Shiela  Kaul  were  arbitrary, discriminatory, unconstitutional  and as such were liable to be quashed.  This Court  quashed the  said allotments on the following reasoning:      "The CBI  has since  inquired into  the matter  in some detail and has by now submitted 4 Interim Reports. According to  the   CBI,  orders   of  allotment  in  respect  of  the shops/stalls in  question were  passed by  Smt. Shiela Kaul, the then Minister of Urban Development and " all the 6 shops have    been     allotted    by     her    to     her    own relation/employees/domestic servants  of her  family members and family  friends. She  has allotted  2  shops  to  her  2 grandsons, one  shop to  the maidservant  of her shop to sh. Vikram Kaul  who is  residing in Dubai, one shop to handloom manager o  the firm owned by her son-in-law and another shop to a  close friend. One shop has been allotted to the nephew of the  minister of  State, Sh.  P.K. Thungon.  While making

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allotments in  respect of  stalls, she  has allotted most of stalls to  the relations/friends  of her  personal staff and officials of Dte. of Estate." The CBI has also reported that Smt. Shiela  Kaul  had  made  ten  different  categories  of persons as  the basis for deciding allotments, but even this categorisation was  not adhered  to while making allotments. The    further     findings    are;     (1)    Many    other Organisations/persons who  had also applied for allotment of shops/stalls from  time to  time  were  not  considered  for allotment of  shops/stalls to  them": and (2) - "At the time of discretionary allotments made by Smt. Shiela Kaul in 1992 and 1994  persons who  were relations  of her personal staff were considered and allotted shops......"      Question is  whether they  were selected  in accordance with law,  which aspect as its importance because apparently a large  number of  other persons  could as well fall within the categories  in question  and had  applied also? From the report of  the CBI  it is  clear that the allottees had been selected, not by following the tender system, as required by the policy  of 1994,  but because of their relationship with the minister  or her  personal staff,  or being employees or friends of  such persons. If that be so, the allotments were wholly question  is what  is required to be done to undo the wrong and  how the wrong doer is to be dealt with within the parameters known to law."      Finally in para 18 of the judgment, this Court directed as under :      Secondly,  Smt.   Shiela  Kaul,  who  was  prima  facie personally responsible for the illegal allotments, has to be asked to  show cause  as to why damage should not be awarded against her for her alleged misuse of power. So, a notice be issued to  her to  show cause why she should not be asked to pay such  sum as damages, for each of the illegal allotments made by  her, as  this Court would deem just and proper. The cause would  be shown  within three  weeks of the receipt of this order."      Pursuant to  the above  quoted directions, a show cause notice was  issued  to  Smt.  Shiela  Kaul.  She  has  filed affidavit in reply to the show cause notice.      Smt. Shiela Kaul was arrayed ass respondent in the writ petition. This  Court has  been monitoring  this case  for a period of  about 2 years. Various interim orders were passed from time  to time.  Despite ample  opportunity available to her Smt.  Shiela Kaul  did not  choose to  file any counter- affidavit in  this Court.  Dr. Rajiv Dhawan, learned counsel appearing for  Smt. Shiela  Kaul has very fairly stated that her client  cannot take  her case  higher than  what has ben stated in  the affidavit  filed on  behalf of  the Union  of India. The learned counsel has relied upon para 6 & 7 of the affidavit dated  September 6,  1996 filed  by  Harcharanjeet Singh, Director  of Estates,  Ministry of  Urban Affairs and Employment. On  behalf of Union of India. The said paras are as under :      "6.  That the  Ministry of  Works & Housing (renamed as ministry of  Urban Affairs & Employment) on 24th March, 1979 had issued  the policy  to be  adopted for  development, and construction  of  shopping  centres  in  various  Government colonies in Delhi. A copy of the Office Memorandum issued in this regard  is given  as Annexure-R-V. The salient features of the policy are indicated as follows.      i)   The shops  under construction  in convenient/local shopping centres  in the  sanctioned scheme would be sold by auction by  the Land  &  Development  Officer  after  fixing minimum reserve  price  in  consultation  with  the  Finance Division.

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    ii)  In respect of the shopping centres which are to be constructed in various colonies the L & DO would auction the sites for various purposes on perpetual leasehold basis.      iii) Such  shops   that  are   constructed  multistorey buildings would be taken in the books of Director of Estates would allot the same on licence, fee basis.      iv)  While the  above was  the  general  policy  to  be adopted in future (after 24th March, 1979) exceptions may be made if the circumstances so warranted.      7.   The records  of the  Director of  Estates indicate that after  the issue  of these  instructions in March 1979, the Office of L & D O has not been able to auction any shops in any  of the  shopping  centres  in  Government  colonies, despite the  efforts made  by the  Office of  L &  D  O  was considered too  high and no bidders came forward for auction of shops.  At present,  have been taken by various Ministers to allot the shops on licence fee basis are with the Central Bureau of  Investigation. In  the absence  of records  which were not  the exact  position in  respect of each shop which has been  given on  licence fee  basis after  the policy  as indicated above  came into  force. However,  on the basis of the individual files it is observed that in January, 1986, 5 shops were given on licence fee basis by the then shops were allotted on  licence fee  basis by  the then  minister (Smt. Mohsina Kidwai). Thereafter, from 1992 onwards 52 shops have been sanctioned  by the  then minister for Urban Development (Smt Shiela Kaul) out of which 7 shops were allotted by Smt. Shiela Kaul  before she  herself had  approved the policy in 1994 for disposal of the shops on tender basis.      8.   Break-up of  the shops  allotted  by  Smt.  Shiela Kaul, the then Minister during her tenure is as follows:      Shops allotted from 1992 to 1994                                       7      (Before the  Policy of  giving  the      shops on tender basis    was      approved).      Shops allotted after 1994 policy                                      45      was laid down.      Shops not accepted by the allottees                                       9      The contents,  quoted  above,  only  give  the  factual position pertaining  to the allotment of shops/stalls during the period  from 1979  onwards. It  is further  obvious that Smt. Shiela  Kaul herself  framed the  Policy  in  1994  for disposal of the shops on tender basis but did not follow the same. At  this stage  it would  be instructive  to quote the explanation given  by Smt.  Shiela Kaul  in her affidavit in reply to  the show  cause notice  to the allegation that she allotted shops  to her  two  grand  children,  friends,  and relations:      "In any  case, the  allegations are  wrong in  material particulars in that-      In respect to the 2 shops to her grandsons, she was not aware at  that time  because the name in the list were Vivek Kumar &  Ashish Kumar  and the  addresses were  of Delhi  of which she  was not  aware. The shop allotted to maid servant of her  son Vikram  Kaul, she  was not aware of her name and addresses in  the statement  given to  her. She comes from a weaker section of society and comes under Schedule Tribes."      We do  not wish  to comment except that we are at pains to read  the above  quoted stand  taken by  a person who has held high offices like Central Minister and Governor.      This Court in Common Cause A Regd. Society vs. Union of India &  Ors. Writ  Petition (C)  26 of  1995 (Capt.  Satish

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Sharma’s case)  decided on November 4, 1996 relied upon this Court’s judgment  in Nilabati  Behera  (Smt.)  Alias  Lalita Behera Vs.  State of  Orissa and Ors. 1993 (2) SCC 746. This Court also referred to Rookes Vs. Barnard & Ors. 1964 Appeal Cases 1129  and the  judgment of the Court of Appeal in A.B. and Ors.  Vs. South  West Water  Services Ltd.  1993 Queen’s Bench 507 and held as under:      "We are  of the  view  that  the  legal  position  that exemplary damages  can be awarded in a case where the action of  a   public   servant   is   oppressive,   arbitrary   or unconstitutional is unexceptionable."      Even in  the judgment  dated October  11, 1996 by which show cause notice was issued to Smt. Shiela Kaul, this Court referred to  various  judgments  of  different  Courts  from different countries  in the world and has held that a public servant is  liable to  exemplary damages  for his acts which are oppressive, arbitrary or unconstitutional.      The question for consideration, however, is whether the action of  Smt. Shiela  Kaul, as  discussed in detail in our judgment dated October 11, 1996 (relevant part quoted above) and also  in various  interim orders quoted above, makes her liable to pay exemplary damages. After gibing our thoughtful consideration to  the material  on record  and in particular the findings  of this Court- quoted above- the answer has to be in  the affirmative. Smt. Shiela Kaul’s action was wholly arbitrary, malafide  and unconstitutional.  This  Court  has given clear  finding in  the judgment/orders quoted above to this effect.  We, therefore,  hold that  Smt. Shiela Kaul is liable to pay exemplary damages.      We have  heard Dr.  Rajiv Dhawan,  Mr. Kapil Sibal, Mr. Altaf Ahmad,  learned Additional  Solicitor General  and Mr. Shiv Sagar Tiwari on the question of quantum. Dr. Dhawan has stated that  Smt.   Shiela Kaul has followed the same Policy which was  being followed by her predecessors in office. Mr. Kapil Sibal  has contended  that exemplary damages should be awarded for  public injury  caused as  a result of arbitrary exercise of  power on  the part of Smt. Shiela Kaul. He has, however, contended that so far as the allotments made by her are concerned,  in the  facts and circumstances of the case, exemplary damages  are not  called for.  Mr. Sibal has based his contention on the assumption that if the allotments were to be  made to  the persons belonging to the weaker sections of the  society, then, there would not have much gain to the State Exchequer. There is nothing on the record to show that if   the allotments  were to be made only to weaker sections or to  any category of persons. In any case Smt. Shiela Kaul did not  follow any  Policy or  criteria. Allotments  w e re made by her in an arbitrary and illegal manner.      We may  mention that  this Court  in  the  order  dated November 4,  1996 concerning Capt. Satish Sharma awarded Rs. 50 lacs  as damages  for his  actions which  were arbitrary, malafide and unconstitutional.      After examining  all the facts and circumstances of the case and giving our thoughtful consideration to this aspect. We direct  Smt. Shiela  Kaul to  pay  a  sum  of  Government Exchequer. Since  the property  with  which Smt. Shiela Kaul was dealing was public property, the Government which is "by the people:  has to  be compensated.  We further direct Smt. Shiela Kaul  to  deposit  the  amount  with  the  Secretary, ministry of  Finance, Government of India within nine months from today.  The amount if not paid, shall be recoverable as arrears of land revenue.      Before parting  with this  order, we make it clear that the CBI. Which is separately investigating the matter, shall not be influenced by any observations made by this Court for

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reaching the  conclusion as  to whether any prima facie case for prosecution/trial  is made out against Smt. Shiela Kaul. It shall  have to  be decided  on the  basis of the material collected and made available with the CBI as a result of the investigation.