mpt Petition No 159 of 1992
IN Special Leave Petition C No 12709 of 1991
From the Judgment and Order dated 2641991 of the Calcutta High Court in Appeal No 232 of 1990
ML Verma R Mukhejee J Gupta and ML Chibber for the Petitioners
Ranjan Dutta Mrs N Dutta Mrs Mridula Ray and MN Shroff for the Respondents
The Judgment of the Court was delivered by BP JEEVAN REDDY J
In a suit for specific performance certain interlocutory orders were passed by a Single Judge of the Calcutta High Court
On appeal a Division Bench of the said Court modified the said orders
A number of special leave petitions were filed in this Court against the orders of the Division Bench
Though the petitioners in these special leave petitions are different the contesting respondents in all these cases are common namely Russel Estate Corporation and its managing partner Sri Hari Narayan Bhan
For the purpose of this petition it is enough to mention that each of the petitioners in these SLPs is claiming to be entitled to allotment of one or more of the flats being constructed by the respondents at Calcutta
Their complaint has been that ignoring the agreements in their favour the 753 respondents have been allotting the constructed flats in favour of third parties thereby seeking to defeat their rights
On 181991 a Bench of this Court comprising section Ranganathan M Fathima Beevi and ND Ojha JJ passed the following order in IA No2 of 1991 after hearing the respondents
Counsel accepts notice
in the meantime till this Special Leave Petition is disposed of respondents 1  2 should not make any further allotment of any other flats in the building in dispute with effect from today
Counsel for the petitioner contends that the allotment of the flat originally allotted to him to some other person violates an oral order of a Division Bench of the High Court
It will be open to the petitioner to move the High Court for appropriate relief in this regard if so advised This Contempt Petition is filed complaining that the respondents have allotted certain flats in favour of third parties in violation of the said order
So far as the petitioners in this Contempt Petition Major Genl
BM Bhattacharjee and Smt
section Laha are concerned they claim to be interested in the flats on the 8th floor of the said building
At any rate the complaint in this Contempt Petition pertains to the said two flats
The petitioners say that the said flats have been allotted to the third parties in the month of January 1992
They rely upon the report of a group of investigators National Bureau of Investigation in support of the said plea
Notice was issued to the respondents
In their counter filed by Shri Hari Narayan Bhan it is stated that the two floors on the 8th floor described as east and west flats were allotted on 26th April 1991 itself ie long prior to the order of this Court dated 181991
It is denied that the allotment of said flats took place in the month of January 1992
The correctness of the Report of the National Bureau of Investigation is disputed
It is however conceded that the possession of the said flats was handed over to the said third parties on 17th August 1991 which is admittedly a date subsequent to the date on which this Court passed the aforesaid restraint order
It is also not disputed by them that the registered sale deeds in respect of said flats in favour of the said third parties were 754 also executed in March 1992
The report of the Receiver Smt
Pratibha Bonnerjea a retired Judge of the Calcutta High Court who was appointed as such by an order of this Court dated 711992 also supports the petitioners  allegations
The relevant portion of the Report reads as follows Present condition of these two flats in the floor
The western apartment in the 8th floor is occupied by one Mr  Mrs
Kamal Thavrani Ms Thavrani said that they are in occupation of the flat from December 1991
Mr KK Thavrani said that he had taken both the eastern and western apartments in the 8th floor
He produced a copy of the agreement executed on 26491 on a stamp paper purchased on 26491 by Ms Russel Estate Corporation
The agreement relates to both the flats on the 8th floor for a total consideration of Rs 1340000
It is stated that the occupiers have taken possession in December 1991
Mr Thavrani submits that the conveyance have been registered in March 1992 but he is unable to produce the registered conveyance as the same is still lying with the Registrar
We found eastern flat was not complete
Wooden work was going on
Photos Nos
3 to 5 are attached to this effect
 At the bearing of this Contempt Petition the respondents  counsel took the stand that the delivery of possession on 1781991 and the execution of the registered sale deed in March 1992 do not constitute violation of the Order dated 181991
His submission is that this Court merely restrained the allotment of flats
Allotment according to the learned Counsel means entering into the agreement of sale
Inasmuch as the agreement of sale with respect to the said two
flats on the 8th floor was entered into long prior to the said Order of this Court it is submitted there is no disobedience to the order of this Court
it is submitted that delivery of possession and the registration of the sale deeds is in pursuance of the aforesaid agreement of sale and not in pursuance of any agreement of We entered into on or after 181991
The counsel further submitted that even on the date when the aforesaid order was passed on 181991 the second respondent had represented to this Court that agreement of sale in respect 755 of all the flats have already been entered into
In this view it is submitted there has been no misrepresentation or suppression of relevant facts on their part
We may mention that when we indicated our disagreement with the above stand during the course of hearing the counsel for the respondents Shri Dutta took time till 14th of January 1993 to file a further affidavitadditional counter andor documents in continuation of the counter already filed
The second respondent has accordingly filed a further affidavit on 1411993
The counsel for the petitioners  disputes the correctness genuineness and validity of the agreement allegedly entered into on 2641991 in respect of said flats
According to him it is a fabricated document
He points out that the stamp paper for the said agreement of sale was purchased by the Russel Estate Corporation and not by the purchaser of the flats
It is also pointed out that the agreement is not a registered one and that it could have been fabricated at any time putting a back date
It is not necessary for us to pronounce upon the disputed question whether the agreement dated 2641991 relating to the said two flats on the 8th floor is true and genuine
Assuming that the said agreement is true we are yet of the opinion that the respondents have committed gross contempt of this Court by their brazen violation of the order dated 18 1991
By the said order this Court directed the respondents 1 and 2 not to make any further allotment of any other flats in the building in dispute with effect from today  Now what does the word allotment mean in the context
In our opinion the said word must be understood reasonably and having regard to the context
The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken
The first respondent is a proprietary concern according to the petitioners whereas according to the respondents it is a partnership concern
In either event there is no such thing as allotment in its case
Even now it is not their case that they have issued any orders or letters of allotment
According to them there was first an agreement of sale then delivery of possession and finally a registered sale deed
We are of the opinion that in the context and circumstances the word allotment in the said order means making over of the flats
In other words it means delivery of possession 756 and registration of the sale deeds
An agreement of sale that too unregistered has no significance in the context difficult as it is to verify its truth and correctness
This court could not be presumed to have interdicted such an uncertain thing
It must be remember that even according to the respondents they had represented to this Court at the time the said order was passed that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order
In the circumstances it cannot mean anything else than delivery of possession of flats and their sale
It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale
To say so as do the respondent is to rob the order of any meaning or content
Mr Dutta the learned counsel for the respondents contended that the second respondent understood the allotment in a particular manner and that the said misunderstanding if any was bona fide
We are not prepared to agree
Firstly there could not have been any doubt in the mind of Respondent with respect to the meaning of the order
Secondly assuming that he had any doubt regarding its meaning the least he could have done was to ask for a clarification of the said Order
He could well have represented that he had already entered into an agreement of sale on 2641991 in restpect of these flats and that he may be permitted to deliver possession andor execute sale deeds in respect of said flats in favour of third parties
He did nothing of the sort
Having placed a highly restrictive and unwarranted interpretation upon the order of this Court he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour
He thus rendered the said order nugatory
It was not open to the respondents to place a convenient interpretation upon the order and proceed to act upon it thereby totally nullifying the order of this Court
In this context we ought to refer to the conduct of the second respondent as disclosed from the order of this Court dated August 7 1992 to which one of us BP Jeevan Reddy J was a party
The first two paragraphs of the said order may be quoted in rull
In these special leave petitions notice was duly served on the respondents and the matters came up for hearing initially before a Bench of this Court comprising of Ranganathan J Fathima Beevi J and Ojha J on 31791 and 757 1891when the parties were heard and certain interim orders were passed
Thereafter it was listed before a Bench of this Court of which Ranganathan J and V Ramaswami J were members on a number of occasions at which the respondents were represented and no objection was voiced against the hearing of the matters by the said Bench
However sometime later an attempt was made on behalf of the respondents to have these matters transferred from this Bench to some other Bench on the allegation that one of the Judges Ranganathan J was biased against the respondents
This request was made before a Bench presided over by the learned Chief Justice by the second respondent who appeared in person and made the request for the transfer of the case
The prayer was rejected by the learned Chief Justice on 11111991
Thereafter the matter was again fisted before a Bench consisting of Ranganathan J V Ramaswami J and Ojha J
On different occasions without any demur from the parties
It was then listed before a Bench comprising of Ramaswamy J Yogeshwar Dayal J and Mohan J on 4392
This Bench directed the cases to be posted before a Bench of which Ranganathan J is a member
About this time an application seems to have been presented to the Registrar that this case should be transferred to some other Bench
However the matters came up before us again some time last week when counsel for the respondents agreed that the matters may be listed this week
The matters were fisted yesterday
A person claiming to be the son of the second respondent made a request that the matter should not be heard by this Bench
We rejected this request and made it clear to him that he should make arrangements for the conduct of the case
The matters did not reach yesterday and when the matters came up today a letter dated 6892 written by the second respondent to his counsel revoking the counsel s vakalatnama has been placed before us
But the respondent No 2 did not appear before us nor did he make other arrangements for the conduct of the case
Sri Chatterjee his advocate on 758 record appeared but expressed his inability to conduct the case since his client had withdrawn the vakalatnama
We understand that in one of the matters the respondents are represented by another counsel whose vakalatnama is also seen to have been revoked but she has not appeared or sought permission to withdraw from the case
In these circumstances we have no other option but to proceed against the respondents ex parte
We are unable to accede to the respondents request made on a previous occasion by the son of the second respondent for transfer of case to some other Bench
The circumstances narrated above would show that the respondent has appeared before the Bench on several occasions without protest
The request made for transfer after the rejection of the earlier petition by the learned Chief Justice is belated and is just an attempt by the second respondent to circumvent the order already passed by the Chief Justice rejecting a request for transfer and only because the Constitution of the Bench is not to his liking
Such a request we are clear cannot be countenanced
 It should be noticed that the said order dated August 7 1992 was passed not only in the special leave petitions but also in this very Contempt Petition
The attitude adopted by them before the Receiver Smt
Pratibha Bonnerjea retired Judge of Calcutta High Court appointed by this Court as a Receiver in this case also discloses the total disregard and disrespect the Respondents have towards the orders of this Court
The Receiver says The next day by a letter dated 22892 Mr HN Bhan informed me that he would not submit to the order dated 7892 as the Bench was not properly constituted due to the fact that the Hon ble Mr Justice V Ramaswami was one of the judges and that an application would be moved for recalling the said order
Thereafter there was complete non cooperation by Ms Russel Estate Corporation
 The conduct of the second respondent as evidenced from the aforesaid material establishes beyond doubt that the second respondent 759 was trying to play with this Court and was consistently flouting its orders
In the circumstances the theory of bona fide belief now put forward before us by his counsel cannot be accepted
We may at this stage deal with the further affidavit filed by the second respondent on 1411993
In para 3 of the affidavit the second respondent has stated that he has the highest regard for this Court that he has all along complied with the orders passed by this Court and that he never intended to flout or defy the orders of the Court
He stated further if in spite of the aforesaid any order of this Hon ble Court has been violated the same has been so done through mistake inadvertence and by a misunderstanding of the meaning and purport of that order and surely not intentionally and for which unconditionally apologise for self and on behalf of the Respondent firm and I beg to be excused Then in paragraphs 4 to 12 he has without waiving the aforesaid and fully relying thereupon repeated the contentions which were urged by his counsel before us and which we have dealt with hereinbefore
He stated that he understood this court s order dated 181991 as prohibiting only the entering into of agreements of sale and not delivery of possession or registration of the sale deeds
All the said contentions we have dealt with hereinbefore
They need not be reiterated here
So far as the apology contained in para 3 of the second respondent s further affidavit is concerned it may firstly be mentioned that it is not really an unconditional apology though it purports to say so
While tendering unconditional apology in para 3 the second respondent has tried to defend his action in the subsequent paragraphs
Secondly even if we construe paragraph 3 as tendering an unconditional apology we are not minced to accept the same having regard to the conduct of the respondent which we have adverted to hereinbefore with reference to the order of this court and the report of the Receiver
Accordingly we reject the apology tendered in para 3 of the further affidavit
For the above reasons we hold the second respondent guilty of Contempt of this Court
Having regard to the facts and circumstances of this case we impose a sentence of one month s imprisonment in addition to a fine of Rs 2000 upon the second respondent
The fine shall be paid into this Court within two weeks from today in default thereof the second 760 respondent shall undergo a further imprisonment of two weeks
The second respondent shall also pay the costs of the respondents in this Contempt case which are assessed at Rs 5000 within two weeks from today
In case of failure the Respondents are free to execute this order as a decree of Court and recover the same from the Respondents
Mr HN Bhan who is present in the court be taken into custody forthwith to undergo the sentence of imprisonment
GN Petition allowed


Summary:
Under an Irrigation Scheme the respondent State proposed to construct a dam on a river in the State and prepared a sketch indicating the passage of the canal from the Dam and for that purpose proceeded to acquire land through which the canal was proposed to run
Apprehending that serious damage will be caused to their lands by the passing of the canal through their lands the appellants farmers filed a suit against the respondent State seeking to restrain it from implementing the Irrigation Scheme as proposed
During the pendency of the suit an agreement was arrived at between the parties to the effect that the canal from the Dam would be run as per the line demarcated in red in the map appended to the deed of agreement
As a result the suit was unconditionally withdrawn by the appellants but subsequently on discovering that the State Government was going back from the agreement and the alignment of the canal was being undertaken contrary to the alignment reflected in red in the map appended to the agreement they filed a fresh suit for declaration to the effect that the agreement entered into between them and the respondents through its Executive Engineer Irrigation Department was binding on the 367 parties and that the parties were bound to act according to the terms of the said agreement and for an injunction restraining the respondent State from going back on the agreement
The trial court decreed the suit and permanently restrained the State from going back from the agreement and acting otherwise than as per the terms of the same
The appeal preferred by the State was also dismissed by the District Judge
The State riled a second appeal before the High Court contending that the alleged compromiseagreement was not binding upon the State inasmuch as the Executive Engineer had no authority to agree on behalf of the State Government as he was not the representative of the Government
The High Court held that the agreement was a null and void document for non compliance with the mandatory provisions of Article 2991 of the Constitution
It also rejected the appellants  plea that under the statutory powers conferred by section 18 of the Bombay Irrigation Act 1879 the Executive Engineer was competent to enter into a compromise and that the said compromise arrived at during the pendency of the earlier suit was binding on the Government
In the appeal filed before this Court on behalf of the appellants farmers it was submitted that reliance placed on Article 299 of the Constitution of India was wholly erroneous that by a Notification dated 27th of September 1963 published in Part IV B of the Government Gazette the State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act and therefore the agreementcompromise entered into by the Executive Engineer during the pendency of the suit of which he was doing pervi  was a validly executed compromise which was binding on the parties and respondent could not go back on it and that after having made the appellants to withdraw their earlier suit on the basis of the agreement it was not permissible for the respondent to dispute the act done by its officers or agents within their powers under the statute
Allowing the appeal this Court HELD  11
The agreementcompromise arrived at in the previous 368 suit could not have been equated with a contract between the State and the citizen
Article 2991 of the Constitution concerns itself with contracts and assurances of property and lays down how Government contracts including assurances of property are to be made and executed
The provisions of Article 2 are mandatory in character and their non compliance would render a contract void but where the agreement is not referable to Article 299 and is not a contract as contemplated by that Article the agreement cannot be invalidated for not satisfying the essential requirements of Articles 299 of the Constitution
375B D E 13
There is a marked distinction between contracts which are executed in exercise of the executive powers and agreements or orders made which are statutory in nature
Articles 2991 applies to a contract made in exercise of the executive power of the Union or the State and it has no application to a case where a particular statutory authority as distinguished from the Union or the State enters into an agreement within his authorised capacity
375F State of Haryana and Ors
vs Lal Chand and Ors   relied on
A compromise of the nature contained in the agreement arrived at during the pendency of a suit in the instant case is not a contract executed between the parties as envisaged by Article 299
375E 21 It is clear from the record that it was the Executive Engineer who was doing pervi  of the case in the suit filed earlier
The agreement in question was entered into during the pendency of the said case
The State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act by virtue of the Notification dated 27th September 1963
Thus it is manifest that the Executive Engineer by virtue of the said Notification had been lawfully appointed as Canal Officer within the meaning of Section 36 of the Bombay Irrigation Act 1879
377F H 378A 22
Section 18 of the Act vests the Canal Officers with the power to 369 hold Inquiry and direct the construction of suitable alignments for a water course and by Section 77 of the Act a Canal Officer Is vested with the authority to survey demarcate and make a map of the land which in his opinion Is suitable for constructing an alignment for the water course
378A 23
Thus under the statute read with the notification dated 27th September 1963 the Canal Officer Executive Engineer was fully competent to decide about the particular alignment of the water course and it fell within the jurisdiction of the Canal Officer to decide and settle about the suitable demarcation of the alignment of the water course of the canal from the Dam in question and he exercised that jurisdiction under the statute when he demarcated the water course in red in the map attached to the agreement
It is the content of the agreement and not its form which is relevant to trace the source of power behind it and in the light of the statutory provisions it Is manifest that the document has been executed by the Executive Engineer by virtue of the statutory powers vested In him
The circumstance that the agreement came into existence during the pendency of the suit and was executed by way of an agreement does not militate against the order of alignment as reflected therein being any less statutory in character
378B D 24
The Act itself envisages that the Canal Officer may after and settle the alignment in consultation with the landholders through which the water course is to run
In the agreement in question the Executive Engineer had agreed to alter the alignment of the water course in consultation with the appellants who thereupon unconditionally  withdrew the suit since no grievance remained to be settled
The altered alignment was therefore validly made by following the procedure envisaged by the Act
The High Court fell in error in ignoring the statutory powers of the Executive Engineer vested in him under Sections 18 and 77 of the Act read with the notification or 27th September 1963 on the true import of agreement
378E F 25
Under these circumstances the agreement was lawfully executed by the Executive Engineer in exercise of his statutory powers under the Act and the State was obliged to act according to the terms of the said agreements and could not give it a go bye without following the procedure under the Act to again alter the alignment 378G 370