Board, Meerut & ANR. Vs. K.P. Singh & Ors.  INSC 77 (1 February
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
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, 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.
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.
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 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.
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 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.
Ordinarily, this Writ Petition should never have been entertained.
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.
order was passed on 08.11.2006.
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
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.
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 6 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.
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 completely
unjustified in ordering the refund merely because the Writ Petition was
dismissed as not pressed.
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.
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.
the High Court did not want to stop the process of tax collection.
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).
8 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.
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 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].
concerned paragraph which has also been quoted by the High Court is as under:
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.
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."
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 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.
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.
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
approached this Court, there was an interim order by which this Court had
directed that the renewals of the exceeding grants in favour of 11 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.
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 12 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
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."
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 13 observation, the appeal is
allowed. It shall not now be necessary for the respondent to consider the
representation made by respondent Nos.1 and
direction to that effect by the High Court is also set aside. Costs are
estimated at Rs.50,000/-.
February 1, 2010.
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.
Singh & Ors.