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PETITIONER: SHIVSAGAR  TIWARI

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       11/10/1996

BENCH: KULDIP SINGH, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T HANSARIA.J.      Edmund Burke  stated as  early as 1777: "Among a people generally corrupt,  liberty cannot  long exist." In 1778, he observed: "An  arbitrary system  indeed  must  always  be  a corrupt one. There never was a man who thought he had no law but his  own will,  who did not soon find that he had no end but his own profit."      2.   According   to   Francis   Beanmount   (1584-1616) corruption is  a tree, whose branches are of an unmeasurable length, they  spread everywhere, and the dew that drops from thence, hath infected some chairs and stools of authority.      3. In  the Encyclopaedia of Democracy by Seymour Martin Lipset, Vol.1,  page 310, in the Chapter "Corruption", it is stated that  corruption is  an abuse of public resources for private gain.  It is  known that  bribes open  the  way  for access to the State for those who are willing to pay and can afford to pay. The situation leaves non-corrupt citizen with the belief  that one  counts  only  if  one  has  the  right personal contact  with those  who hold  power and also allow persons with  money  power  to  get  things  done  to  their advantage through back door.      4. In  the present  case,  as  we  are  concerned  with alleged motivated,  arbitrary and  high-handed actions  of a Minister, it would be worth-while to point out what role has been assigned  in a  parliamentary democracy  to a Minister. The head of the State (President or Governor in our country, as the  case may be,) calls upon the leader of the political party that commands majority to form government and appoints him as  Prime/Chief Minister; and on later’s advice appoints other Ministers.  Business of the Government, gets allocated and is  run as  per business  rules  framed,  which  in  our Constitution has been dealt by Article 166(3). The executive power of  the Government  is distributed department wise and one  Government  is  distributed  department  wise  and  one Minister is  made the head of that department. That Minister becomes responsible  for the  actions, acts  and policies of his  department.  He  becomes  principally  accountable  and answerable  to   the  people.  His  powers  and  duties  are regulated by  the law  of the  land.  The  legal  and  moral

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responsibility or  liability for  the acts or omissions rest solely on the Minister.      5. Having noted the philosophy, sociology and etymology of corruption,  as well  as the  essence of  a parliamentary democracy, let  it broadly  be seen what had happened in the present case.  For this  purpose it  would be enough to note some of  the prima  facie  conclusions  arrived  at  by  the Central Bureau  of Investigation  (CBI) who  was required by this Court  to inquire into the matter (which has come to be known as Housing Scam) by order dated 14.2.1996.      6. The  CBI has  since inquired into the master in some detail and has by now submitted 4 Interim 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 son, Sh. Vikram  Kaul who  is residing  in  Dubai,  one  ship  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  the Minister  of State, Sh. P.K. Thungon. While making  allotments  in  respect  of  stalls,  she  has allotted most  of stalls  to the  relations/friends  of  her personal staff  and officials  of Dte.  of Estates." 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 and  no reasons,  whatsoever, were assigned for non-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."      7. In the order dated 19.7.1996 this Court noted that a regular case  under  sections  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  Smt. Shiela   Kaul and   her   Addl.  Private Secretary  Rajan S. Lala and  others. The  order    of  that date has also noted about various  other steps taken, which include inssuance of show    cause  why allotments of  shops/stalls should not be cancelled. It  was desired that the notices be served within a week  and the   Estate  Officer, after   considering their replies, if any, place a report before the Court within four weeks.      8. Such  a report was filed under the affidavit of Shri Harcharan Jeet  Singh, Director  of Estates, which was taken up for  consideration on  16.9.1996. The  affidavit  of  the Director has  stated that  from 1994 onwards 52 shops/stalls had  been     sanctioned  by  the  then  Minister  of  Urban Development (Smt.   Shiela  Kaul) out  of which 7 shops were allotted by Smt. Kaul before she had approved policy of 1994 and the remaining 45 shops were allotted after the policy of 1994. In  the affidavit  the gist of the objections filed by the various  allottees was  enclosed. This  Court thought it appropriate to  give an  opportunity of hearing to all these persons before  any  action  was  taken.  A  direction  was, therefore, given to the Director to issue individual notices to the  52 persons (wrongly mentioned as 42 in the order) to be personally  present in  the  Court    or  be  represented through their  counsel on  27th September. These alottees so appeared either  in person  or through counsel and they were

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heard.. The  sum and substance of the representations of the allottees was  that they  had been given an allotment either because of  their being unemployed youths, freedom fighters, handicapped, members  of Scheduled  Castes/Scheduled Tribes, widow or poverty-stricken.      9. 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 alottees 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 arbitrary and speak of misuse of power. All important 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.      10. It  would be  apposite in  this contact to refer to the recent decision of this  Court in Writ  Petition (C) No. 26 of  1995 (Common  Cause, a Registered Society v. Union of India) rendered  on September  25, 1996,  in which one of us (Kuldip Singh,J.)  reiterated the  need to  act  fairly  and justly in  the matter  of grant  of largesses,  pointing out that any  arbitrary distribution  of national  wealth  would violate the  law of  the land.  Mention   was   made of  the judgment in  Lucknow Development  Authority v.  N.K.  Gupta, 1994(1)  SCC   243,     stating  that    the  same  approved "misfeasance in  public  office" as a part of the law of the tort. It  was pointed out that public servants become liable in damages  for malicious,  deliberate or  injurious  wrong- doing.      11.   A reference  to Wade’s ’Administrative Law’ shows that a breach of statutory duty does give rise in public law to  liability, which has come to be known as "misfeasance in public office", and which includes malicious abuse of power. This aspect  has been  dealt at  pages  789  et  al  of  7th Edition. It  has been  stated  that  public  authorities  or officers may  be liable in damages for malicious, deliberate or injurious wrong-doing. The Supreme Court of Canada in Ron Carelli v.  Duplejis (1959)  16 DLR (2d) 689 awarded damages against  the   Prime  Minister   of  Quebec  personally  for directing the  cancellation of  a restaraunt-owner’s  liquor licence. The  Supreme Court  of Victoria  in  Farrington  v. Thomson, 1959  VR 280,  awarded damages  against a licensing inspector    and  a  police  officer  who  had  ordered  the plaintiff to  close his  hotel and  cease supplying  liquor, though they  knew they did not posses such a power. Smith J. referred in  that case  to the  statement of Best CT made in Henly v.  Lyme Corpn.,  (1858) 5  Bing 91  at 107 reading as below:-      "Now I  take  it  to  be  perfectly      clear, that  if  a  public  officer      abuses his office, either by an act      of omission  or commission, and the      consequence of that is an injury to      an individual,  an  action  may  be      maintained  against   such   public      officer.   The instance of this are      so numerous  that  it  would  be  a      waste of time to refer to them."      12. The  learned author  has    then  opined that   the cases   establish that   the   tort of misfeasance in public offices goes at least to the length of imposing liability on public officer  who does  an  act  which  to  his  knowledge

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amounts to an abuse of his office.      13. We  may also  note what  has been  stated  in  this regard in  "Cases and Materials on Administrative Law" by SH Bailey and  others at  pages 826  et al  of 2nd Edition. The authors have  noted the  decision rendered  in  Bourgoin  SA v.Minister of  Agriculture, Fishery  and Food, 1985-3 All ER 585, on  the subject  of misfeasance.  In that  case damages were claimed against a Minister, which was held permissible. Lord Diplock’s observation in Dunlop v. Woolllahar Municipal Council, 1982  AC 158,  that  this  was  "well  established" position was noted.      14. From  the aforesaid  it is clear that the above has been accepted  as a  part of the law of tort practically all over the  world. What  is more,  in some countries exemplary damages have  been  awarded  for  misuse  of  public  power. Reference may  be made to Deshpriya and another v. Municipal Council, Nuwara  Eliva &  Others. which  a decision  of  the Supreme Court  of Sri  Lanka dated 10.3.1995, noted at pages 115 to  117 of  1996(1) Commonwealth Human Rights Law Digest (CHRD).  Therein,   aggravated  award   was  ordered   where political discrimination  was  the  motive  for  restricting freedom of  expression. The  Supreme court of Bahamas in the case of  Tynes v. Barr, by a decision rendered on 28.3.1994, ordered for  exemplary damages  for arbitrary, oppressive or unconstitutional action  by State  Officials. A  summary  of this decision  is reported  at  pages  117  to  120  of  the aforesaid  Law  Digest.  The  need  for  awarding  exemplary damages was  felt by  Sauyer, J.  because of  the  arrogant, abusive and outrageous disregard shown by the police for the law. The learned Judge awarded $40,505 as special damages; $ 75,000  for  assault,  battery  and  false  imprisonment;  $ 1,00,000 for  malicious prosecution  and $ 40,000 for breach of the plaintiff’s constitutional rights. Reference may also be made  to the  decision of  supreme Court  of  Jamaica  in Samulls v.  Attorney General  (noted at  pages 120 to 122 of the aforesaid  Digest) in which Reckford, J. by his decision dated 11.11.1994  awarded  exemplary  damages  for  assault, battery and  malicious prosecution. The award was quantified at $ 1,00,000.      15.  The   world  jurisprudence   has   thus   accepted misfeasance in  public  office  as  a  species  of  tortious liability and,  to prevent  misuse, different  courts across the sea have been awarding exemplary damages.      16. We  are conscious  that the  aforesaid cases  dealt with injury to a third party (following misuse of power) who had sought  damages for  the loss  caused,  whereas  in  the present case there is no injury as such to any third person. Even so,  the aforesaid  cases have  been referred  for  two purposes. Firstly  and primarily  to bring home the position in law  that  misuse  of  power  by  a  public  official  is actionable in  tort. Secondly,  to state  that in such cases damages awarded  are exemplary.  The fact  that there  is no injury to  a third  person in the present case is not enough to make  the aforesaid principles non-applicable inasmuch as there was injury to the high principle inasmuch as there was injury to  the high  principle in  public law  that a public functionary has  to use  its power for bonafide purpose only and in  a transparent  manner. Insofar as the aspect of loss is concerned,  it deserves  to be pointed out that there was loss in  present case  also;  and  this  was  to  the  State Exchequer  resultant   upon  giving  of  allotments  without calling tender  as required  by the  policy. Needless to say that if  tender would have been called, higher revenue would have been  earned by the State on giving the allotments. For these reasons,  we are  of the view that the mere fact  that

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in the present case there is no injury to a third person and he has not come forward to claim damages, has no sequitur in so far  as the  tortious liability  following misfeasance of public office is concerned.      17. Now,  to take  care of  the illegality,  we have to take two  steps. First,  cancel the allotments. To decide as to who  should get  the shops/stalls,  the Government  would first consider whether its policy of 1994 and categorisation made by  it need  alteration in  any way.  While undertaking this work,  the Government would make such provisions in the policy which  are just  and fair.  After the policy has been framed, the shops/stalls would be allotted as per the policy and by  following a procedure having the sanction of law. In case it would be that any of the present allottees would not be the  person so  selected, he/she shall be asked to vacate the shop/shall by giving three months time. We would require the Government to formulate the policy within two months and thereafter to  complete the exercise of allotment within two months. Till then, the present allottees would be allowed to continue.      18. 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  how cause why she should not 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.      19.  The  issue  relating  to  the  matter  of  illegal allotments of the aforesaid 52 shops/stalls, stands disposed of accordingly.  It may  be put up for further orders on 1st November, 1996.      20. Let  a copy  of this order be served on Smt. Shiela Kaul urgently  to enable  her  to  act  as  ordered  in  the judgment. Steps  in  this  regard  shall  be  taken  by  the Registry within three days.