7. It is to be noted that documents namely Partition Deed, though not produced, the Agreement of Sale Ex.A24 and Sale Deed Ex.A1 and Gift Deed Ex.A2 were executed in accordance with law and it is also admitted by defendant that they were validly executed, but he tries to interdict the documents on the ground that these documents executed nominally and they were never intended to be acted upon. It is only to save the impending Land Legislations, such documents were executed. Therefore, these documents cannot confer any right on the plaintiff to claim the property. It is also to be noted in this regard that the defendant himself has stated that some properties were also given to the daughters and that the Partition Deed was in his possession and the same was not produced for the reasons best known to him and the learned Counsel for the appellant urges that necessarily adverse inference has to be drawn as otherwise, the factum of allotment of land to the daughter would be revealed. More over, the statement of the defendant that some lands were allotted to the daughters has to be believed as in 1962 subsequent to the partition, plaintiff executed a General Power of Attorney in favour of her father defendant to manage the properties. Thus, it goes to establish that the plaintiff was having some property in her favour and that property was sold. It is also" in evidence that she purchased some more properties from third parties and sold the same before purchasing the property under Ex.A1.


Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002

8. The learned senior Counsel appearing for the appellant would further submit that adverse inference has to be drawn for not producing the Partition Deed and he relies on the decision of the Supreme Court reported in Gopal Krishnaji Ketkar v. Mohamed Haji Latif, . He also submits that the defendant is estopped from contending that Ex.A1, Ex.A2, Ex.A24 are not true and that they are nominal documents, when he himself attested the documents. He relies on the decision of the Madras High Court reported in Jegannatham Pillai v. Kunjithapatham Pillai, AIR 1972 Mad. 380. The evidence is also available to the effect that Gopala Krishna filed returns under the provisions of the Land Reforms Act before the Land Reforms Tribunal and when the suit schedule lands were included in the computation of his holding on the ground that the Sale Deed and Gift Deed cannot be relied, he filed Appeal No.94 of 1978 and appellate Tribunal recorded a finding that Sale Deed and Gift Deed are bona fide and genuine and the lands covered by the said documents are to be deleted from the holdings of Gopala Krishna and allowed the appeal on 3-8-1978. This order became final. By virtue of this Order, the Gopala Krishna, who contended before the appellate Tribunal that the suit schedule lands were either sold or gifted away to the plaintiffs and they have to be deleted from his holdings is accepted. It is also the case of the plaintiff that she was asked to give an affidavit to the effect that these lands were acquired under the documents. Therefore, having obtained the advantage under the documents, by deleting the suit schedule properties from his holdings and thus becoming non-surplus holder, can it be contended that defendant could put up a contrary contention. The learned Counsel would submit that the said decision of the appellant Tribunal is binding as a judicial precedent and relies on


Counsel would submit that the said decision of the appellant Tribunal is binding as a judicial precedent and relies on the decision of the this Court reported in Chanumolu Nirmala v. Chanumolu Indira Devi, 1994 (1) APLJ 394 (DB). The learned Counsel would thus submit that the defendant is estopped from raising the plea after obtaining the benefit out of the document and then again resile and contend that it is a nominal and sham document. He submits that the doctrine of estoppels operates against the defendant and he relies on the decision of the Supreme Court reported in R.N. Gosain v. Yashpal Dhir, .


9. On the other hand, the learned senior Counsel for the defendant Mr. Chandrasekhar Rao submits that the finding recorded by the trial Court that the Partition Deed was only a nominal document and the same cannot be said to be erroneous finding. He submits that such a plea is always available. He further submits that Ex. A-24 and Exs. Al and Ex. A2 though admitted to have been executed, but they are equally nominal and sham documents and they are invalid as they were never acted upon. He contends that during the period when Ex.A28 was executed, Mr. Gopala Krishna was not in the station and the family of defendant is an affluent family having extensive fertile lands and there was no need for Gopala Krishna to sell away the properties for Rs.24,500/-. The air fare from USA to India was about more than Rs.15,000/-. Therefore, it is incomprehensible that Gopala Krishna came to India to receive Rs.24,000/- by spending Rs.15,000/- towards air fare alone and that no prudent person would act in this manner. The he tries to explain the situation contending that there was no necessity to sell the land. With regard to the Gift Deed, he submits that an extent of 7 acres was gifted away under Ex.A2, it was equally nominal; Gopal Krishna was under no obligation to gift away the property. He submits that to decide whether the transaction is nominal or sham, intention of the parties and their relations and whether they are supported by the considerations and subsequent conduct are all relevant including the custody of the documents and these ingredients are relevant. He seeks to rely on the decision reported in Thakur Bhimsingh v. Thakur Kan Singh, , and Shaik Abdul Khader v. Vakantham Nagabhushana Rao, . He also submits that if the transaction is sham and nominal, it is ab


Rao, . He also submits that if the transaction is sham and nominal, it is ab initio, void and no rights would emanate from that document. He relies on the decision reported in Bandaru Subbaraidu v. Alluri Satyanarayana Raju, AIR 1962 AP 25. He also submits that if the transfer is gratuitous, the burden is upon the donor to prove that it is a real transaction and in this case it was not proved at all. He relies on the decision of the Delhi High Court reported in Raj Narain Aggarwal v. Bay Nath Khanna, . With regard to the possession of the documents Sale Deed and Gift Deed the defendant was in possession through out, but only at a later stage in his absence, the documents were taken away. Therefore, even the possession of the documents is established. He further submits that the judgment of the Land Reforms Tribunal is not binding and it does not constitute either estoppel or res judicata. He relies on the decision of the Supreme Court reported in Bhagwan Dayal v. Mst. Reotidevi, . Even the decision on the incidental matters, it would not constitute res judicata in subsequent proceedings. He relies on the decision of the Supreme Court reported in G. Venkatachala Odayar v. Ramchandra Odayar, , and Siddareddy Chenchu Kami Reddy v. Alaganadhaswamy Temple, by its Executive Officer, 1969 (1) An.WR 228. He also submits that doctrine of approbation and reprobation has no applicability. He relies on the decision of the Supreme Court reported in P.R. Deshpande v. Maruti Balaram Haibatti, . He further submits that the Court has to decide the issue with reference to the evidence on record as to whether the transaction are sham, nominal or invalid applying the decisions laid down in


evidence on record as to whether the transaction are sham, nominal or invalid applying the decisions laid down in Thakur Bhim Singh 's case (supra) and also Shaik Abdul Khader's case (supra). Further, even assuming that there is a collusion between the father and the son i.e., defendant and Gopala Krishna and any documents emanated out of collusion are invalid. Therefore, the property should be allowed to lie where it" was prior to the execution of the documents as per the decision of the Supreme Court reported in Immani Appa Rao v. Gollapalli Ramalingamurthi, .


10. With regard to the drawing of adverse inference, he submits that the decision relied on by the learned Counsel for the appellant does not apply to the facts of the case and when there is enough evidence to show that the case of the appellant was not true and that the drawing of adverse inference for non-production, depends on the facts of each case. He relies on the decision of the Supreme Court reported in Harpal Singh v. Devinder Singh, , Krishna Kumar Sinha v.


The Kayastha Pathshala (Prayag) Allahabad, AIR 1966 All. 570, Smt. Indira Nehru Gandhi v. Raj Narain, , State of Karnataka v. Main Patel, , Ramrati Kuer v. Dwarika Prasad Singh, and Gopal Krishnaji Ketkar's case (supra).
 11. On the basis of available material both on facts and law, let us consider the issues framed.
 12. With regard to the partition deed of 1955, defendant as DW1 himself has categorically deposed that the Partition Deed was made in 1955, dividing the property between his father, himself and his minor son. It was also stated by him that his father was allotted 13 acres of land and himself and his son got 30 acres each. He also accepted that the Partition Deed was registered Partition Deed and the document was in his possession. It is also in evidence that the Government records were changed and the names were mutated in accordance with the 1955 partition. It is also in evidence that the name of the plaintiff was figuring in Adangals for Faslies 1391 and 1392. Further, it was also accepted that the lands, which fell to the share of the defendant and also to his son were reflected in the declarations filed by them under the agricultural and ceiling Laws before the Tribunal. Defendant also stated that in the Partition Deed, certain lands were allotted to his daughters namely plaintiff and another.


13. The learned Standing Counsel for the appellant, however, submits that for not producing the Partition Deed, even though it was in his possession and he was aware of the contents, adverse inference would be drawn as per the decisions referred to by him in the preceding paragraphs. On the other hand, it is seriously disputed by the learned Counsel for the respondent on the ground that no adverse inference can be drawn for not producing the documents inasmuch as, no notice was issued calling upon the defendant to produce the documents. Therefore, the presumption cannot be successfully raised. He takes assistance from the decisions referred to above. As can be seen from the admission of the defendant himself, that there was in fact a registered Partition Deed in 1955 and the lands were allotted to his father, himself and his son and daughters and necessary mutations were also affected in revenue records. Further, the defendant and his son also filed the declarations under the Agricultural Land Ceiling Laws declaring such of the lands, which fell to their respective share by virtue of the Partition Deed of 1955 and that the defendant has filed declaration as a family unit consisting of himself, his wife and no declaration was filed in the capacity of joint family. When the defendant himself accepts the existence of the document, even though it was in his possession, he did not file the same into the Court, the question of drawing adverse inference would not arise. The contents of Partition Deed as revealed by the defendant himself are not disputed by anybody including the defendant. The only defence which he is trying to put up is that it was only a nominal and sham document. This aspect has to be concentrated rather than drawing adverse inference. The adverse inference can be drawn only when the document is in possession of a person and if such document is filed, the contents would go against the interest of the said person. But, in the instant case, he himself accepting that there was a Partition Deed and that too it is a registered Partition


case, he himself accepting that there was a Partition Deed and that too it is a registered Partition Deed. In such a case, when the contents are admitted even though, such document is not produced, it has to be necessarily presumed that existence of such a document. Therefore, the necessity for drawing adverse inference or issuing notice by the plaintiff calling upon the defendant to produce the documents would not arise. But, how far the claim of the defendant that it was only a sham and nominal and it was never intended to be acted upon has to be considered.


14. The burden of proving that Partition I Deed was a sham and nominal is on the defendant. He neither filed the document nor led any evidence on this aspect except his sole testimony. In order to ascertain whether transaction is a sham and nominal, whether any consideration was paid at all, the motive behind entering into such transaction, the possession of the property alleged to be transferred was given to the transferee as also custody of the Deed of Transfer and the conduct of the parties are relevant factors. (Ref: M. Pullaiah v. Guravaiah, 1969 (1) An. WR 209. the question of passing of consideration would not arise in respect of Partition Deed. But, what is the conduct of the parties, whether they have acted upon or not are the crucial questions. As already noticed, the division of property took place between the family members and also their names were mutated in the Government accounts and they have also reflected the lands, which was affected under 1955 Partition Deed in the respective declarations.
 15. It is also not the case that the suit was filed by the beneficiary namely Gopala Krishna or the defendant seeking declaration that the Partition Deed was sham and nominal and it was never acted upon. Except the sole testimony of the defendant, to say that the property was joint and that the family continued to be a joint and the property being a joint family property, there is no evidence at all either documentary or oral.
 16. It is also to be noted in this regard that the partition was affected in 1955 and the parties under the Deed kept silent, even till today, without seeking proper declaration. That is yet another militating factor against the defendant and supports the view that the deed was genuine and it was acted upon.


17. Under these circumstances, it has to be clearly held that the defence tried to be projected by the defendant that the partition was sham and nominal and it was never intended to be acted upon is absolutely untenable, and there is any amount of clinching evidence to establish that the partition was real, genuine and it was acted upon. Thus, the trial Court failed to consider this aspect and rendered an erroneous finding on this issue.
 18. Accordingly, I set aside the finding of the trial Court and the Partition Deed is sham and nominal hold that the said Deed was genuine and real.
 19. The next question that calls for consideration is whether the Sale Deed and the Gift Deed are true and valid or whether they are nominal and sham documents?
 20. With regard to the issue Nos. 2 and 3, it is to be noted that four pivotal documents are required to be considered.
 21. First document is Agreement of Sale Ex.A24 and the Sale Deed Ex.A1, Gift Deed Ex.A2 and the certified copy of the document in the appeal Ex.A8.


22. It is not in dispute that the defendant was the attesting witness to Exs.A1 and A2 and it is also in evidence that he was aware of the Order Ex.A8 of the Land Reforms Appellate Transaction. DW2 is the scribe of Ex. Al and A2, DW3 is scribe of Ex.A24, Dv/4 is the attestor of Ex.A24. DW6 is the attestor of Exs.A1 and A2 DWs.5 and 1 spoke about the raising of crops by the defendant and DW8 alleged to be lessee, who raised the sugar crop on behalf of the defendant. The evidence of defendant is most essential, which would clinch the issue from the roots. The documents Exs.A1 and A2 are admitted by the defendant, but he only fries to impress upon the Court that they are sham and nominal documents and they were never intended to be acted upon and the evidence was let in by the defendant that no consideration was passed when the Agreement of Sale and Sale Deed were executed. It was also stated that when the Gift Deed was executed, the plaintiff was not present and she had not accepted the gift. Further evidence was sought to be pressed into service to the effect that the lands were in possession of the defendant and they were in fact cultivated by the defendant or through tenants. I have already held that the partition of 1955 was genuine and real and it was acted upon in toto. In the preamble of the document Exs.A1 and A2, it is clearly mentioned that the land, which was sold under Ex.A1 and properties were gifted under Ex.A2 were acquired by the Gopala Krishna by virtue of the Partition Deed of 1955 and the defendant is none-else-than the father has complete knowledge of the situation. It is also admitted by the defendant that after execution of the documents, the Adangals were also issued


is also admitted by the defendant that after execution of the documents, the Adangals were also issued in the name of the plaintiff. But, the contention of the defendant is that even though these documents were executed, yet, they were never acted upon and the possession and continued to be with the defendant and the defendant raised the crops and the General Power of Attorney though issued in favour of the defendant was never utilised at any point of time and it is only a paper transaction.


23. It cannot be disputed that Exs. Al and A2 were duly executed in accordance with law. In this regard, it is also necessary to refer to Sections 91 and 92 of the Evidence Act.


24. Under Section 91 when a term of contract or the grant or any dispossession of the property was reduced to the form of a document of which is required to be reduced in such form, no evidence, shall be given in proof of the term of such dispossession or contract except document itself or the secondary evidence subject to certain conditions. Under Section 92 of Evidence Act, when a document has been properly executed as required under Section 91, no evidence of any oral agreement or statements shall be admitted as between the parties for the purpose of contradicting or varying or subtracting from the terms subject to certain provisions as contained in Section 92. It is open for the party to prove that the invalidity on the ground of fraud, want of due execution, want of capacity in any contradicting party or failure of consideration etc. But, these exceptions are not present in the instant case. The execution of the document is agreed upon and Exs. Al and A2 were required to be registered and in fact it was admitted that they were registered documents. It was not the case of the defendant that it was vitiated by fraud or any other illegality. But, it was sought to be avoided on the ground that it was only a sham and nominal document. Therefore, even considering the matter under Sections 91 and 92, no evidence contradicting the terms is admissible as it will not fall in any of the exceptions contained in proviso. The requirement of Section 91 of Evidence Act have been complied with and they are compulsorily registrable documents under the provisions of the Registration Act and in such situation, the bar operating under Section 92 would stare at the defendant. He can avoid only if the transaction is fraudulent one or it is a misrepresentation. But, this defence is also cannot be said to be available to the defendant inasmuch as the transaction was between Gopala Krishna and the plaintiff. Admittedly, Gopala Krishna executed the


was between Gopala Krishna and the plaintiff. Admittedly, Gopala Krishna executed the documents in favour of the plaintiff and Gopala Krishna never created any obstructions nor challenged the documents stating that they are nominal and sham documents. Further, when the defendant examined various other witnesses, namely scribes and attestors of these, documents, it is not understood why he did not examine his own son Gopala Krishna to the effect that no consideration was passed on and it is only sham and nominal document. The only appropriate person, who could speak to the nominal nature and the other essential features of the document, is the person, who executed the document. More especially, when he is living and he is very much alive to the situation. For failure to examine Gopala Krishna, creates any amount of suspicion on the evidence of the defendant, who is none-else-than the father. It is also to be noted that defendant has the knowledge that Gopala Krishna has filed declaration in respect of the lands which fell to his share under 1955 Partition Deed. In the said declaration, he also included the lands covered by Exs.A1 and A2 when they were included in the holdings of Gopala Krishna. He filed an appeal before the learned Land Reforms appellate Tribunal contending that they are genuine documents and the ownership vested with his sister, the plaintiff herein. It was contention of the learned Government Pleader in the said appeal that they were sham and nominal documents. But, the appellate Tribunal had categorically held that they are genuine documents and therefore, deleted extents covered by Exs.A1 and 2. Thus, Gopala Krishna had obtained complete benefit of all these documents holding that these are valid and genuine documents and definitely this constitutes estoppel on the part of the Gopala Krishna. The principle of approbation and reprobation applies on all its fours to Gopala Krishna. But, the contention is that the same principle would


on all its fours to Gopala Krishna. But, the contention is that the same principle would not apply to the defendant. This contention has to be negatived at the threshold. When the real beneficiary is barred by principles of estoppel and an unconnected person may be father cannot be said that they will not apply to him. It is a far fetched argument to contend that the father is not bound by the principles of estoppel. It is not in dispute that the defendant was in complete knowledge of the situation by filing the appeal, his son had taken the advantage of the documents and that is the reason why he could not pressed into service, the evidence of his own son as obviously his son Gopala Krishna cannot have any defence except to accept the validity of the documents. As already noticed by me, the father cannot be said to have any locus standi to contend that Exs.A1 and A2 are sham and nominal documents. He is neither the transferor nor transferee. At the most, it may be open for the transferor to contend, it is only a sham and nominal. Therefore, a person who is remotely connected with the property has no right to contend that the document to which he is not a party that they are only sham and nominal documents. The Supreme Court in Desh Pande's case (supra), has succinctly traced out this principle. The cases relied on by the learned Counsel for the defendant would not help, inasmuch as they are criminal cases in which the Supreme Court held that mere non-examination of the listed prosecution witnesses would not lead to the inference that the prosecution failed to establish the case. But, in the instant case, the very principle of estoppel when applicable to the party to the document and the said principle cannot be allowed to be raised or invoked by the third party to the advantage of the executant of the document, in collateral proceedings. Admittedly, in the instant case, the suit was filed


the document, in collateral proceedings. Admittedly, in the instant case, the suit was filed by the plaintiff, who is the daughter of the defendant for possession. In that suit, the father cannot be allowed to take defence that the documents are nominal and sham and they were introduced only to avoid land ceiling laws. But, this defence can only be allowed to be taken by the person, who executed the document, but not the third party. Moreover, the father has kept quite for decades without challenging the documents or seeking declaration that they are nominal and sham. When he felt that his interests would adversely affect by such documents and he has also interest in the said property, he could have impeached these documents, but did not take such steps.


25. The learned senior Counsel for the Appellant-plaintiff submits that Exs.A1 and A2 are genuine and bona fide documents covering true transactions and therefore, the defendant is estopped from contending that they are sham and nominal documents. Apart from other evidence, he strongly relies on the judgment of the Land Reforms Tribunal in LRA No.94 of 1978 Ex. A8. The learned Counsel would also submit that the judgment Ex. A8 constitutes res judicata and that general principles of res judicata, the defendant is estopped from contending that it is a sham transaction. The defendant cannot be allowed to approbate and reprobate, even though defendant is not a party, the transaction Ex. A8, which was scrutinised by the appropriate Court constituting a judicial precedent and the same is binding on the defendant also.
 26. In Sahu Madho Das v. Mukand Ram, AIR 1955 SC 481, the Supreme Court observed that where the Privy Council has construed a certain document namely a Will, though the decision is not binding on a person, not a party to the litigation, yet, the decision operates as judicial precedent. Taking clue from this observation, the learned Counsel would submit that Ex. A8 though not directly binding on the defendant, it operates as a judicial precedent and the finding rendered by the Land Reforms Appellate Tribunal is valid against all the persons.
 27. The Division Bench of the this Court in Chanumolu Nirmala 's case (supra), held that when once the interpretation placed by the Land Reforms Appellate Tribunal was accepted by the High Court in a civil revision, affirming that a document evidenced partition between 'A' and his son, it constitutes judicial precedent in all subsequent proceedings even between the parties, who were not the parties to the original proceedings.


28. In Gosain's case (supra), the Supreme Court observed as follows:
 (10) Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that "a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage." [See: Verschures Creameries Limited v. Hull and Netherlands Steamship Company Limited, Scrutton, L.J). According to Halsbury's Laws of England, 4th Edn., Vol. 16, "after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside." (para 1508).


(11) In Thacker Hariram Motiram v. Balkrishan Chatrabhu Thacker this Court was dealing with a similar situation. The High Court, while deciding the second appeal in an eviction matter gave the appellant (tenant) one year's time subject to his giving an undertaking within a period of three weeks stating that vacant possession would be handed over within the aforesaid time. The appellant gave an undertaking in accordance with the said terms wherein he undertook that he would vacate and give vacant possession of the suit premises by 31-12-1985, i.e., to say after one year if "by that time no stay order from the Supreme Court is received as I intend to file an appeal in the Supreme Court." It was held that in view of the said undertaking the petitioner could not invoke the jurisdiction of this Court under Article 136 of the Constitution and he should abide by the terms of the undertaking, and it was observed: (pp 655-56):
 "This undertaking filed by the appellant in our opinion is in clear variation with the oral undertaking given to the learned Judge which induced him to give one year's time. We do not wish to encourage this kind of practice for obtaining time from the Court on one plea of filing the undertaking and taking the different stand, in applications under Article 136 of the Constitution."
 (12) Similarly in Vidhi Shanker v. Heera Lap and Ramchandra Jai Ram Randive v. Chandanmal Rupchand this Court declined to exercise its discretion under Article 136 of the Constitution in cases where the petitioner had given an undertaking in the High Court and had obtained time to vacate the premises on the basis of such undertaking,


29. Taking clue from the said decision, the learned Counsel for the appellant submits that when once the Gopala Krishna had obtained the advantage of documents Exs.A1 and A2 on the ground that they are valid documents, then it cannot be turned around and said that it was only a nominal and sham document.
 30. But, however, the learned senior Counsel for the respondent submits that this view was not accepted by the Supreme Court in P.R. Deshpande's case (supra). In that case, the Supreme Court referred the matter to the Larger Bench opining that the principle laid down in Gosain 's case (supra), cannot preclude the Supreme Court from exercising its jurisdiction under. Article 136 of Constitution of India. The reference was as follows:
 (7) Learned Judges who referred this matter have expressed in the reference order that remedy under Article 136 is a constitutional right which cannot be taken away by legislation, much less by invoking the principles of election or estoppel. The following observations made in the reference order are worthy of quotation here:


"The principle of 'approbate and reprobate' or the law of election which is the basis of the decision in R.N. Gosain case cannot, in our opinion, be applied appropriately to preclude this Court from exercising its jurisdiction under Article 136. The doctrine of election is founded on equitable principle that where a person persuades another one to act in manner to his prejudice and derives any advantage from that then he cannot turn around and claim that he was not liable to perform his part as it was void. It applies where a vendor or a transferor of property tries to take advantage of his own wrong. This principle cannot, in our opinion, be extended to shut out or preclude a person from invoking the constitutional remedy provided to him under Article 136. The law that there is no estoppel against statute is well settled. Here it is a remedy under the Constitution and no law can be framed much less the principle of election which can stand in the way of the appellant from invoking the constitutional jurisdiction of this Court."
 31. Therefore, the Supreme Court considering that matter, held as follows:


31. Therefore, the Supreme Court considering that matter, held as follows:
 (8) The doctrine of election is based on the rule of estoppel - the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppel in pais (or equitable estoppel) which is a rule in equity. But that rule, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. (vide Black's Law Dictionary, 5th Edn.) (9) It is now trite that the principle of estoppel has no application when statutory rights and liabilities are involved. It cannot impede right of appeal and particularly the constitutional remedy. The House of Lords has considered the same question in Evans v. Bartlam. The House was dealing with an order of the Court of appeal whereby Scott, LJ., approved the contention of a party to put the matter on the rule of election on the premise that the' defendant knew or must be presumed to know that he had the right to apply to set the judgment aside and by asking for and obtaining time he irrevocably elected to abide by the judgment. Lord Atkin, reversing the above view, has observed thus:
 "My Lords, 1 do not find myself convinced by these judgments. I find nothing in the facts analogous to cases where a party, having obtained and enjoyed material benefit from a judgment, has been held precluded from attacking it while he still is in enjoyment of the benefit. It cannot bring myself to think that a judgment-debtor, who asks for and receives a stay of execution, approbates the judgment, so as to preclude him thereafter from seeking to set it aside, whether by appeal or otherwise. Nor do I find it possible to apply the doctrine of election."


(10) Lord Russell of Killowen while agreeing with the aforesaid observations has stated thus:
 "My Lords, I confess to a feeling of some bewilderment at the theory that a man (who, so long as it stands, must perforce acknowledge and bow to a judgment of the Court regularly obtained), by seeking and obtaining a temporary suspension of its execution, thereby binds himself never to dispute its validity or its correctness, and never to seek to have it set aside or reversed. If this were right, no defeated litigant could safely ask his adversary for a stay of execution pending an appeal, for the grant of the request would end the right of appeal. The doctrine of election applies only to a man who elects with full knowledge of the facts."
 (11) A party to a lis can be asked to give an undertaking to the Court if he requires stay of operation of the judgment. It is done on the supposition that the order would remain unchanged. By directing the party to give such an undertaking, no Court can scuttle or foreclose a statutory remedy of appeal or revision, much less a constitutional remedy. If the order is reversed or modified by the superior Court or even the same Court on a review, the undertaking given by the party will automatically cease to operate. Merely because a party has complied with the directions to give an undertaking as a condition for obtaining stay, he cannot be presumed to communicate to the other party that he is thereby giving up his statutory remedies to challenge the order. No doubt he is bound to comply with his undertaking so long as the order remains alive and operative. However, it is open to such superior Court to consider whether the operation of the order or judgment challenged before it need be stayed or suspended having regard to the fact that the party concerned has given undertaking in the lower Court to abide by the decree or order within the time fixed by that Court.


(12) We are, therefore, in agreement with the view of Sahai and Venkatachala, JJ., that the appeal filed under Article 136 of the Constitution by special leave cannot be dismissed as not maintainable on the mere ground that the appellant has given an undertaking to the High Court on being so directed, in order to keep the High Court's order in abeyance for some time."
 32. Thus, it is clear that undertaking given by the tenant before the High Court would not create a estoppel for filing an appeal under Article 136 of Constitution of India. In effect, the Supreme Court only clarified that there cannot be estoppel from invoking the constitutional remedy under Article 136. But, the principle on fact remains the same as held in Gosain's case (supra). The principle reiterated in para 10 of Gosain's case (supra) remains the same except to the extent that, it would not operate as an estoppel to invoke the jurisdiction of the Supreme Court under Article 136.


33. In this regard it is also necessary to refer to the contentions of the learned Counsel for the respondent that it is a sham document and that the requirement of such document has been stipulated in Faydayal Poddar v. Bibi Hazra and also reiterated in Thakur Bhim Singh's case (supra), while referring to the benami transaction in India, the Supreme Court observed in Meenakshi Mills, Madurai v. The Commissioner of Income-tax as follows:
 "This view is in accord with the following observations made by this Court in Meenakshi Mills Madurai v. CIT., Madras:


In this connection, it is necessary to note that the word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense. It signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentioned X as the purchaser. Here die sale itself is genuine, but the real purchaser, is B, X being his benamidar. This is the class of transactions which is usually termed as benami. But the word 'benami' is also occasionally used, perhaps not quite accurately, to refer, to a sham transaction, as for example, when A purports to sell his property to B, without intending that his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid."
 34. While reiterating the same view, the Supreme Court observed thus:


"Two kinds of benami transactions are generally recognized in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contribution the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature, however, in both these cases is that the real title is diverted from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognized in Section 82 of the Indian Trusts Act, 1882, which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit the person paying or providing the consideration."


35. In fact, the transaction would not fall within the definite word benami, as mentioned in the first category, but it falls in the second category namely a person who is the owner of the property executes a conveyance in favour of the another, without intention of transferring the title to the property thereunder, whereby the transferor continues to be the real owner. The difference was also carved out between these two transactions stating that in the former case, the transaction was only a operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of persons, who contributed purchase money, but in the late case, there is no operative transaction at all and the title rests with the transferor, notwithstanding execution of the conveyance.
 36. Therefore, Mr. Chandrasekhar Rao contends that the possession was in the hands of the defendant and the motive was to avoid land ceiling laws, the custody of the title deeds was with the defendant, the conduct of the parties was never reflected towards the transfer of the property absolutely in favour of the plaintiff. But, a close reading of the aforesaid decisions would heavily lean towards the plaintiff rather than the defendant.


37. The conduct right from 1955 coupled with subsequent transactions under Ex,A28, Al, and A2 clearly and clinchingly establishes that the partition had in fact taken place that the Sale Deed was executed by Gopala Krishna and in those documents it was clearly mentioned that the properties fell to his share by virtue of the Partition Deed. That under Ex.A28 Agreement of Sale was concluded in which a sum of Rs. 24,000/- was paid towards the sale consideration and this was never disputed by Gopala Krishna at any point of time. Therefore, it is not open for the defendant to contend that there was no consideration. Further, the possession as already stated was only a permissive possession by virtue of the General Power of Attorney. Therefore, any acts done by the defendant should only be construed as if they are done under the authority of the General Power of Attorney. It is also to be noted that the relation between the plaintiff and the defendant is daughter and father and the lands are situated in Vuyyur, where the father was residing and after marriage, the plaintiff had to shift to her husband's place. Therefore, it is quite natural to presume that the plaintiff could not have supervised the cultivation activities personally and necessarily, she had to depend on the others. But, in the instant case, she had depended on his father by executing a General Power of Attorney in his favour. Therefore, the possession cannot be said to be exclusively with the defendant as the absolute owner. The defendant had stated that the documents are in his possession, he did not produce the same on the ground that the plaintiff had taken those documents in her absence. If that is so, there is no evidence forthcoming as to why he did not issue notice, when such documents were taken away by her. Therefore, the said contention also cannot be accepted. The conduct already stated, of the parties is clear that they had in fact acted upon documents of 1955 Partition


stated, of the parties is clear that they had in fact acted upon documents of 1955 Partition Deed, Ex.A1 and 2.


38. This Court is not satisfied with the method and manner in which the defendant who is the father of plaintiff had conducted himself in the proceedings. His ingenuity has to be deprecated. Right from 1955, he accepted that the documents were properly executed, but when the question of implementation comes, he states that they, are sham and nominal documents. He takes the role of his son in respect of Exs.A1 and A2, but when the question of Ex.A8 comes, he turns himself to be a third party. He suppressed the evidence of his son and tried to protect his son to the disadvantage of his daughter.
 39. Further, he tried to impress upon this Court that he was in possession of the suit schedule property, but this contention cannot be allowed to stand for the reason that he was already holding General Power of Attorney on behalf of his daughter-Plaintiff to manage the affairs of her property and even by that time, she was holding some properties. That itself indicates that the daughter was having some properties to be managed and subsequently, she acquired properties under Exs.A1 and A2. By virtue of those documents, he was allowed to cultivate the same. That would not constitute possession as a owner, but possession by virtue of the General Power of Attorney. The conduct of the father in changing the sides from time to time itself established that he is an unworthy witness and his statement cannot be relied on.
 40. The trial Court failed to consider these aspects in a proper perspective and proceeded on mere surmises and conjectures.
 41. Under these circumstances, I have to necessarily hold that even the ingredients for establishing the benami transactions or a nominal transactions are not present in this case. Thus, I hold that Exs.A1 and 2 are valid, legal and genuine documents and they were acted upon.


42. With regard to the limitation, the lower Court has held against the plaintiff, but the said finding is equally untenable inasmuch as the General Power of Attorney was cancelled on 5-2-1981 and the said suit was filed on 6-12-1983 i.e., well within the time. Therefore, the said finding is also liable to be rejected.
 43. For the aforesaid reasons, the judgment of the lower Court is not sustainable in law and on facts. Accordingly, it is set aside and the suit is decreed as prayed for with costs.
 44. The appeal is accordingly allowed with costs.


Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983

JUDGMENT K. Ramaswamy, J.


1. The appellants are the successors of the landowners. The lands in a total extent of Acs. 50-10 guntas bearing Survey Nos. 352, 353/1, 354/1, 359/1, 355, 357 and 358 situated in Shaikpet village, Urban Taluk, Hyderabad District were initially requisitioned in the year 1963 under the provisions of the Requisitions and Acquisition of Immoveable Property Act, 1952, hereinafter called 'the Act'. Subsequently, a notification acquiring them was published under Section 7 of the Act on March 4, 1970 for public purpose. The competent authority under the Act offered compensation, but the appellants declined to receive it. As a result, they could not reach an agreement with the Government. Therefore, the Government have appointed the Metropolitan Sessions Judge, Metropolitan Area of Hyderabad and Secunderabad to be the Arbitrator under Section 8 of the Act, by notification issued in G. O. Ms. No. 266, Revenue (K) dt. March 14, 1974. He enquired into the claims; the parties have participated and adduced evidence in support of their respective claims. Before the Competent Authority, the claimants laid claim at the rate of Rs. 20/- per square yard for all the lands. The Arbitrator confirmed the order of the competent authority namely Rs. 10/- per square yard to all the lands except to the extent of Ac. 1-02 guntas in Survey No. 352 for which the compensation was determined at Rs. 5/- per square yard to be the just and reasonable compensation. The appellants also claimed solatium at 15% and also interest at 4% on the amount offered by the Competent Authority. The Arbitrator awarded interest at 4% on unpaid compensation fromt eh date of notification till


The Arbitrator awarded interest at 4% on unpaid compensation fromt eh date of notification till the date of payment, but however, disallowed solatium on the ground that the Act does not provide for payment of solatium. In this appeal, the appellants restricted their claim to Rs. 15/- per square yard and also reiterated their claim for solatium at the rate of 15%. Inthis appeal, Sri Mohd. Mokaramuddin, learned counsel for the appellants contends that the appellants had adduced sufficient evidence to establish that the vlaue of the land prevailing in theneighbourhood ranges from Rs. 30/- to Rs. 18/- per square yard and the grant of compensation at Rs. 10/- is very meagre and at least they are entitled to het com at the rate of Rs. 15/- to which they restricted their claim in this appeal. In support thereof, he relied upon the evidence of P. Ws. 1 to 4 and Exs. A-1 to A-7. He also further contended that though there is no specific power under the Act to provide payment of solatium, since it being in the nature of compulsory acquisition and deprivation of the right to possession and enjoyment of the property against the wishes of the owners of the land, they are entitled under law for payment of solatium as part of compensation as enjoined under Section 7 of the Act. In support of this contention, he relied upon the decision of the Division Bench of Punjab and Haryana High Court reported in Gurucharan Singh v. Union of India, and a judgment of their Lordships of the Supreme Court reported in P. C. Goswami v. Collector of Darrang, . On the other hand, Miss. Lakshmi Devi, learned Government Pleader resisted the claim. She contended that the arbitrator had considered the entire evidence and came


Pleader resisted the claim. She contended that the arbitrator had considered the entire evidence and came to the conclusion that the payment of compensation at Rs. 10/- per square yard to the lands except to the lands in Survey No. 352 at Rs. 5/- per square yard to Ac. 1-02 guntas in Survey No. 352 is just and reasonable. It does not warrant interference in appeal since the facts and circumstances have been fairly considered by the arbitrator in fixing the compensation. She also further contended that there is no express provision under the Act for payment of solatium. The solatium is not part of the value of the land. The Parliament is aware of the existence of Section 23 (2) of the Land Acquisition Act of 1894 and the Legislature did not incorporate it as part of this Act for payment of solatium. Therefore, by necessary implication, the Legislature excluded the award op solatium as part of compensation. Therefore, the Arbitrator is justified in refusing to award solatium. However, in support of this contention, there is no decision cited by the learned Government Pleader.


2. Upon these respective contentions, the questions that arises for consideration are : (1) Whether the compensation awarded by the arbitrator is just and reasonable; and (2) Whether the appellants are entitled to solatium at 15% as claimed by them?

3. In order to appreciate these contentions, it is necessary to read the relevant provisions of the Act in this regard. Section 3 of the Act empowers the competent authority, where the authorities are of the opinion that any property needed or likely to be needed for public purpose, being a purpose of the Union should be requisitioned, to follow the procedure contemplated under Section 4 of the Act. Section 7 gives power to acquire the property requisitioned for the public purpose by publishing in the official gazette a notice to that effect. The property, shall, on and from the day on which the notice is so published, vest absolutely in the Central Government free from all encumbrances and the period of requisition of such property shall end. Section 8 provides the principles and method of determining the compensation which reads as follows:
 "Section 8 (1) : Where any proeperty is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say, -
(a) Where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement;
(b) Where no such agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, or is qualified for appointment as a Judge of a High Court,

(c) and (d) ............... ............ .............


(c) and (d) ............... ............ .............

(e) the arbitrator shall, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid, and in making the award, he shall have regard to the circumstances of each case and the provision of sub-sections (2) and (3), so far as they are applicable;
 (2) ........                     ...........                    ................

(3) The compensation payable for the acquisition of any property undesr Section 7 shallbe "the price which the requisitioned property would have fetched in open market." If it had remained in the same conditions as it was at the time of requisitioning and been sold on the date of acquisition."

(Since clauses (b) to (d) of sub-section (1) and sub-section (2) are not relevant for the purpose of this case, they are not extracted).

4. A reading of these provisions would show that the arbitrator, after hearing the dispute, makes an award determining the amount of compensation which "appears to him to be just". It also provides that the arbitrator shall have regard to the circumstances of "each case" and the provisions of sub-section (2) and sub-section (3) of S. 8 so far as they are applicable. sub-section (2) (b) directs that the amount of compensation payable for the requisitioning of any property shall be such sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the following matters namely :
(i) pecuniary loss due to requisitioning;
(ii) and (iii) .............  ................       ................


(iv) damages (other than normal wear and tear) caused to the property during the period of requisition including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition."

(Clauses (ii) & (iii) omitted as being not relevant).


5. A conjoint reading of these principled would postulate that where there is an agreement between the parties, as contemplated under Section 8 (1) (a), the amount of compensation shall be fixed in terms thereof. Thereby it accords primacy to the contract between willing vendor and vendee, obviating the need to deserve into other principles. But in a case where no such agreement was reached, the arbitrator is empowered to determine "the amount of compensation which appears to him to be just." He was also made to have regard to the circumstances in each case, the provisions of sub-sections (2) and (3) as far as they are applicable. Sub-section (3) also specifies the principle namely, it shall be the price which the requisitioned property would have fetched in the open market had it been sold on the date of the acquisition. Thereby, the Act envisages two modes to determine compensation, which appears to him to be just keeping in view the facts and circumstances and the principles set out above. In the latter process, the Legislature directed the arbitrator while determining just compensation to take into account - (1) the price which the property would have fetched in the open market, but for requisition and acquisition; (2) thereby; and (3) damages the owner incurred for restoration to the former position in which the property was existing prior to rquisition except the normal wear and tear or damages suffered. Yet no principles as such like one in Section 23 (1) of the Land Acquisition Act were laid down. Power was delegated under Section 22 (2) (c) of the Act to the Subordinate Legislation to provide the principles to be followed in "determining the amount of compensation". Though the Requisitioning and Acquisition of Immoveable Property Rules, 1953, for short "the Rules" have been made, no principles were laid down. Therefore the power of the arbitrator in determining


have been made, no principles were laid down. Therefore the power of the arbitrator in determining the compensation "to be just" is of wide amplitude and left unguided, yet his exercise of power could, under no circumstances, be either arbitrary or capricious or irrational. The question that emerges thereby is what is the meaning to be ascribed to theepithet "to be just" in awarding compensation. In Chamber's 20th Mid Century dictionary, the word "just" has been defined variedly thus : righteous, upright, fair, according to justice, due, in accordance with facts, well ground, .......... Exact, normal....... Therefore the compensation to be determined must be fair as to what the owner of the immoveable property would legitimately be entitled to be due in accordance with the facts and justice. The meaning of the word "compensation" would also play vital role in this regard and it would be considered a little alter. It is well known that Section 23 (1) of the Land Acquisition Act has provided the principles upon which market value of the land is to be determined, in the case of compulsory acquisition and several components eater into the arena to make up market value of the land. The arbitrator while exercising his power to determine just compensation is entitled to follow the principles laid down in Section 23 (1) of the Land Acquisition Act, 1894. It is well to remember that there is no express embargo to take those principles into account.


6. It is now repeatedly held that in determining the compensation, the Collector shall take into account the potential value of the land, the sale deeds of the lands situated in the vicinity and comparable benefits and advantages possessed of, as they furnish a rough and ready guide. They are not always conclusive Sometimes the rentals prevailing in the neighbourhood capitalising with appropriate multipliers of number of years' interest is also relevant. The price paid within a reasonable time in bona fide transactions of sale of the lands adjacent to the lands acquired possessing similar advantages is one of the safe guide to determine compensation.


7. It must, therefore, be held that the Arbitrator while determining the just compensation, is entitled to take into consideration mutatis mutandis the principles laid down in Section 23 (1) of the laaa, 1894, apart from the factors mentioned in sub-sections (2) and (3) of Section 8 of the Act. In this case, the parties have adduced documentary evidence claiming to reflect the value foh te properties under acquisitions. The appellants have relied upon Exs. A-1 to A-6, the sale deeds of the lands in the neighbourhood and Es. A-7 the judgment in O. P. No. 188/68 dt. 15-9-1970. Now, in this Court, additional evidence is received by us of the judgment in A. A. O. No. 357/75 dt. March 29, 1976 of this Court. The counsel took us through the entire evidence. We are satisfied that the learned Arbitrator adopted correct approach in evaluating the evidence. He made personal inspection of the lands under acquisition as well as the lands covered by the documents relied on by either party. Ex. A-3 is the sale deed dt. Jan. 20, 1969. Therein, 360-42 Sq yards were sold for Rs. 15,000/- and it worked out at Rs. 18/- per square yard. Ex. A-5 is also a certified copy of the sale deed dt. May, 30, 1969. Hterein, 300 Sq. yards were sold for Rs. 9,000/- and it worked out at Rs. 30/- per sq. yard. These lands are situated at Mehdipatnam cross-roads, a well-developed built-up area. These lands are situated at K. Ms. From the lands under acquisition. Therefore they do not provide any


lands are situated at K. Ms. From the lands under acquisition. Therefore they do not provide any basis to rely on. They were rightly not relied on. Similarly, the lands covered by sale deeds in Exs. A-1, A-4, A-2 and A-6 are situated in Krantinagar House Building Society, a fully developed area. The price varied between Rs. 16/- to Rs. 21/- per Sq. yard. They were situated at a distance of 2 to 3 K.Ms. In between this area and to the area under acquisition, no house building activities were seen by the Arbitrator. Moreover all the sale transactions pertain to small pieces of lands. They cannot reflect correct value and reasonable basis when large area is under acquisition, as held by their Lordships of the Supreme Court in Collector of Lakshmipur v. B. C. Dutta, and M. N. Khan v. Collector (L.A.) , Similarly in Ex. A. 7 the judgment in O. P. No. 188/68 dated September 14, 1970, the arbitrator awarded a sum of Rs. 15/- per square yard. Those lands are situated in a fully built-in and developed area near Mehdipatnam cross-roads and that, threfore, they do not provide any reasonable basis for awarding just compensation to the lands under acquisition. In A. A. O. No. 357/75, etc. dt. 29th March 1976, this Court awarded compensation at Rs. 12, Rs. 13/- and Rs. 15/- per square yard. Those lands are nearer to Mehdipatnam which is fully developed area. We have no material to find the relative situation and therefore, it does not also furnish any conclusive guidance to award compensation at those rates. On the other hand, Ex. B-1 a


conclusive guidance to award compensation at those rates. On the other hand, Ex. B-1 a sale-deed dt. May 30, 1974 executed for an extent of Ac. 16-36 guntas for a total sum of Rs. 4,25,000/- was relied upon by the respondents. That was a sale deed executed by the owner in favour of A. G.'s office Co-operative Society. That land is situated just 100 yards to the south of the lands under acquisition. The sale consideration therein roughly worked out at Rs. 5/- per sq. yard. The competent authority as well as the arbitrator considered this sale deed and held that it reflects the correct value prevailing in the neighbourhood and therefore, relied upon that sale deed and offered to pay at the rate of Rs. 10/- per sq. yard to the entire extent except to the small extent referred to earlier. The lands under acquisition were agricultural lands having potential value of being converted into house sites and to be used as such. They required to be developed and 1/3 of the value thereof is to be spent for development of roads, levelling etc. the arbitrator has considered the entire evidence and the circumstances and has given cogent reasons to award compensation at the rate of Rs. 10/- per sq. yard to all the lands except to Ac. 1-02 guntas situated in Survey No. 352 which is situated at the tail end of the acquired land which does not possess all the advantages which other lands had. We have also independently considered those facts and we fully agree with the fixation of the compensation by the arbitrator. We hold, therefore, that the compensation awarded by the arbitrator and offered by the competent authority is just, fair and reasonable and it does not warrant interference in this appeal.


8. The next question that arises for consideration is whether the appellants are entitled to payment of solatium.

9. Undoubtedly the Act does not provide expressly for payment of solatium, but the question is whether the Legislature, by necessary implication, excluded the application of the principle of solatium in determining just compensation for the land to be acquired. The word "compensation" has been defined in Black's Law Dictionary at page 354 thus:
 "Compensation : Indeminifaction; payment of damages, making amends; giving an equivalent or substitute of equal value; that which is necessary to restore an injured party to his former position; consideration or price of a privilege purchased .......... Equivalent given for property taken or for an injury done to another ............. Recompense in value; recompense or reward for some loss, injury, or service, especially when it is given by statute ...... "Compensation" is used merely for lack of a word more nearly expressing the thought of the law which permits recovery for an imponderable and intangible thing for which there is no money equivalent.
Equivalent in money paid to the owner and occupiers of land taken or injuriously affected by the exercise of the power of eminent domain; Compensation is amends for something which was taken without the owner's choice, yet without commission of tort.


Compensation is of three kinds - legal or by operation of law, compensation by exception and by reconvention." In Stroud's Judicial Dictionary at page 524 of 4th Edn., Vol. I, it is stated that the compensation must be reasonable and proportionate to the injury caused. The word 'Compensation' is the subject of consideration by their Lordships of the Supreme Court in a catena of decisions. It is enough to state that in State of Gujarat v. Shantilal, their Lordships of the Supreme Court while considering Art. 31 (2) of the Constitution considered the scope and meaning of the concept "Compensation" and held that in ordinary parlance the expression "Compensation" means a thing given to or to make amends for loss, recompense, remunerating or pay; it need not therefore necessarily be in terms of money. The word "Solatium" has been defined in Black's Low Dictionary thus; injury to the feelings." In Stroud's Judicial Dictionary 4th Edn., Vol. 5, at page 2570, the word "Solatium" has been defined as "Solatium is an expression apt to describe an award of some amount to cover inconvenience and, in a proper case, distress caused by compulsory taking. It is quite inapt to describe an amount awarded for probable loss to which the claimant is entitled." Under the exercise of the power of eminent domain, the State is entitled to the exercise of eminent domain only for the public purpose, but it is hedged with the condition that the lands of a private citizen can be acquired or requisitioned on payment of just compensation. On the concept of just compensation, Bernard Schwartz, in his Commentary on the Constitution of United States, Part II (The Rights of Property, 1964 Edition), at para 322, at page 241 states that:


"It is basic, in connection with the two fundamental limitations upon the eminent domain power referred to in the last section - i.e., just compensation and public use or purpose - that the question of whether such limitations have been transgressed in a given case is preeminently a judicial question. This is particularly true of the requirement of public use. In well-nigh countless cases, the courts have articulated the rule that the nature of use, whether the public or private, is ultimately a judicial question."
In para 328 at page 255 the learned author emphasised that the requirement of just compensation is the second essential organic limitation upon the power of eminent domain. He quoted the Justice Story and stated:
 "The political ethics reflected in the Fifth Amendment rejects confiscation as a measures of justice ........ Indeed, in a free Government, almost all other rights would become utterly worthless ............ when all property is subject to the will or caprice of the legislature, and the rulers."
At page 256, he states thus:
 "Where eminent domain is involved, on the other hand, the individual is compelled to surrender to the public something beyond his due share for the benefit of the community. In such a case, the fundamental principles of an equal distribution among the citizenry, of the costs of Government has been breached at the expense of the individual whose property has been taken. The compensation requirement is aimed at restoring the equality which has thus been upset. As the Supreme Court has phrased it, the organic guaranty "that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burden which, in all fairness and justice, should be borne as a whole."
At page 257 he stated thus, "Where for any reason, property has no market, resort must be had to other data to ascertain its value."


10. In a decision reported in Welungaloo Pvt. Ltd. v. Commonwealth, (1948) 75 CLR 495 at page 571 Dixon, J. (as he then was) said that the prupose of compensation under eminent domain is:
 "To place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived. Compensation, prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss, or, in other words, the pecuniary value to the owner contained in the asset it cannot be less than the money value that may attach to his property because it has been compulsorily acquired byt eh Governmental authority for its purposes........... Equally you exclude any diminution of the value arising from the same cause. The hypothesis upon which the inquiry into the value must proceed is that the owner had not been deprived by the exercise of compulsory powers of his ownership and of his consequent rights of disposition existing under the general law at the time of acquisition."
Their Lordships of the Supreme Court in a decision reported in Union of India v. Ram Mehar, while approving the view of the Law Commission for retention of solatium as integral part of compensation for lands acquired, held:
 ".........As pointed out by Fitzgerald the community has no right to enrich itself by deliberately taking away the property of any of its members in such circumstances without providing adequate compensation for it. This principle has been in force in India ever since the Act of 1870. The Select Committee which examined the Bill of 1893 did not think it necessary to omit the provisions but on the other hand transferred it to S. 23."


11. A review of the above position of law would clearly indicate that when the property of a private citizen is acquired or requisitioned in exercise of the power of eminent domain, then the owner thereof shall amend or recompense the loss which he has suffered by reason of compulsory acquisition of his property. It is necessary to note at this stage that the Parliament is aware of the distinction between the words "Market value of the land" and "Compensation". In the Act,t he Legislature has chosen to use the word "Compensation" instead of Market value of the land". No doubt, a statutory duty has been cast under Section 23 (2) of the Land Acquisition Act 1894 to award solatium at the rate of 15% to the market value, but in the Act, there is no express provision to award solatium. But the question is whether solatium is expressly or by necessary implication excluded for being paid to the claimants or owners of the lands when the immoveable property is sought to be acquired in exercise of the power under the Act. Before embarking upon that enquiry, it is necessary to state that it is well settled that payment of solatium is part of compensation under the provisions of the Land Acquisition Act as held by their Lordships of the Supreme Court in Union of India v. Ram Mehar, (supra). There, their Lordships pointed out the distinction between 'compensation' and the 'market value' and held that these two are distinct concepts. Their Lordships have held that solatium is part of compensation. A Full Bench of this Court in K. A. Swamy v. Land Acquisition Officer, laid down the same principle thus:


"An examination of the provisions of the Acquisition Act unfettered by any authority would incline us to the view that while solatium under Section 23 (2) may form part of compensation to be awarded by the Collector under Sec. 11, it does not form part of the word award which the Court has to pass under Section 26 though it is required under Section 23 (2) to add 15% on the amount of market value awarded by it, which will be in the nature of a direction to the Collector to pay, the amount just in the same way as he is directed to pay interest."
This law was laid down by Chief Justice Jaganmohan Reddy (as he then was) speaking on behalf of the Full Bench while considering the question whether the Court-fee has to be paid on the solatium granted by the Court. The same is the view taken by a Division Bench of this Court in B. Ravinder v. Special Deputy Collector, Land Acquisition (Industries), . That is also the view fot he Gujarat High Court in Maganbhai v. Collector, District Mehsana, , of the Karnataka High Court in G. Venkatesh v. Spl. L. A. Officer, Bangalore, AIR 1975 Kant 95 and of Punjab High Court in State v. Kailashwati, .


12. Keeping this principle in view, the next question to be considered is whether the Legislature has excluded the application of payment of solatium under the Act. There is no direct decision of the Supreme Court or of this Court on this point. It is also recognised rule for the construction of statutes that, unless the words of statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation (Vide Attorney-General v. De Keyser's Royal Hotel Ltd., 1920 Ac 508.) the power to take compulsorily raised by implication a right to payment. (Vide Central Control Board (Liquor Traffic) v. Cannon Brewery Co. Ltd., 1919 AC 744.) in a decision repored in Inglewood Pulp Co. v. New Brunswick Electric Etc., AIR 1928 PC 287 at 290 the question that arose was that in a case where a statute did not provide specifically for payment of interest, then the contention was that by necessary implication, the statute excludes the payment of interest. While considering that question, their Lordships of the Privy Council held thus:
 "It is true that the expropiration under the Act in question is not effected for private gain, but for the good of the public at large, but for all this, the owner is deprived of his property in this case as much as in th eother and the rule has long been accepted in the interpretation of statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The statute in the present case contains nothing which indicates such an intention. The right to receive interest takes the place of the right to retain possession and is within rule."


Their Lordshps of the Supreme Court in Satinder Singh v. Umrao Singh, considered the provisions of Requisitioning and Acquisition Act where the statue omitted to pay interest on the land to be acquired. The same contention as herein was raised before the Supreme Court. While considering that question, Gajendragakar, J. (as he then was) speaking on behalf of the Court has held in paragraph 17 at page 915 thus:
 "Stated broadly the act of taking possession of immoveable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State."
At page 916 in the same paragraph, it was held thus:
 "The question which we have to consider is whether the application of this rule is intended to be excluded by the Act of 1948, and as we have already observed, the mere fact that Section 5 (3) of the Act makes Section 23 (1) OF THE Land Acquisition Act of 1894 applicable we cannot reasonably infer that the Act intends to exclude the application of this general rule in the matter of the payment of interest."
The problem could be angulated from yet another perspective. The owner is disinclined to part with possession of his land but for compulsory acquisition for a public purpose. Erle, C. J. in Ricket v. Metropolitan Railway Co., (1865) 34 LJQB 257 at 261 held that:
 "The company claiming to take lands by compulsory powers, expels the owner from his property and is bound to compensate him for all the loss incurred for the expulsion , and the principle of compensation then is the same as in trespass for expulstion ........."
Cripps in his 'Compensation' 5th Ed. At page 106 states that:


"The loss to an owner whose lands are required or have been taken omitting all questions of inquiry to adjoining lands, includes not only the actual value of such lands but all damages directly consequent on the taking thereof under the statutory powers."
These might include cost of removal (Section 8 (2) (b) (iv) loss of profits (S. 8 (2) (b) (i) and other consequential loss (unwillingness to part with). The determination of compensation is based on the principle of price which a willing seller might be expected to realise in an open sale which includes the value for his inclination to sell, and when solatium is being paid under the Land Acquisition Act as a solace at specified rate to make amend for his disinclination to part with possession of the land, there appears to be that the Legislature intended not to exclude solatium as part of compensation. Now their Lordships of ht e Supreme Court have held in State of Kerala v. T. M. Peter, and P. C. Goswami v. Collector of Darrang. (supra) that denial of solatium as part of just compensation is obnoxious to equality clause enshrined under Article 14 of the Constitution of India.


13. In Gurcharan Singh v. Union of India, (supra) the Punjab & Haryana High Court has also taken the same view though for different reasons.

14. THE concept of compensation when exposed to the radiation of the above reasoning thus broached, the conclusions that oculd be reached are that; Solatium is some amount or damages allowed for injury or distress to the feelings of the owner to cover the disinclination caused to the owner due to displacement from his lands. The solatium is part of compensation and the compensation is intended to amend or recompensate the loss occasioned to the owner or injuri9es effected on the owner by exercise of eminent domain. We therefore, hold that the word 'compensation' under Section 8 (1) (e) encompasses within its ambit the payment of solatium under the given facts and circumstances of a case. The Arbitrator while awarding just compensation in considering the facts and circumstances is also competent to award solatium at the rate of 15%. The Act by necessary implication did not exclude the application of this principle of payment of solatium. Accordingly, we direct the Competent Authority on the facts of this case to pay solatium on the total amount of compensation at 15% awarded to the appellants as part of the compensation determing by the authorities below and the appellants are also entitled for payment of interest at 4% per annum on solatium as well. Accordingly, the appeal is partly allowed, but in the circumstances, without costs.

15. The learned counsel for the appellants sought for leave to appeal to the Supreme Court. Questions of law are in favour of the appellants and on facts, we agreed with the learned Arbitrator. Thus, in our view, there is no substantial question of law of public importance fit to be decided by the Supreme Court. Hence the leave sought for is rejected.


16. Appeal partly allowed.


Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001

JUDGMENT B.S.A. Swamy, J.


1. To my mind if the parties adopted a give and take policy, the issue would have been amicably settled by the well wishers of both the parties. As the second respondent is adamant and not heeding the advice of well-wishers and the judicial forums as well, the parties are in the courts for nearly a decade wasting the precious time of the court. Even in this court the respondents did not heed the advice given to them and invited judgment on the merits.
 2. To put forth their case both the parties engaged counsel from Madras and arguments in these appeals were heard for nearly three weeks.
 3. Before considering the merits of the case, I feel it appropriate to refer to certain observations made by Honourable Justice Chinnappa Reddy exposing how corporate giants rush to courts and how they are converting the courtrooms as their battle ground and fight under the attractive banners of fair play and public interest. While considering the conduct of the board of directors in Life Insurance Corporation of India v. Escorts Ltd, . His Lordship observed as follows (page 560 of Comp Cas):


"In the case before us, as if to befit the might of the financial giants involved, innumerable documents were tiled in the High Court, a truly mountainous record was built up running to several thousand pages and more have been added in this court. In deed, and there was no way out, we also had the advantage of listening to learned and long drawn-out, intelligent and often ingenious arguments, advanced and dutifully heard by us. In the name of justice, we paid due homage to the causes of the high and mighty by devoting precious time to them, reduced, as we were, at times to the position of helpless spectators. Such is the nature of our judicial process that we do this with the knowledge that more worthy causes of lesser men who have been long waiting in the queue have been blocked thereby and the queue has consequently lengthened."
 4. I am in a worse position than their Lordships of the Supreme Court in that case, in hearing marathon arguments addressed by counsel for the respondents on technicalities to injunct me from going into the merits of the case knowing fully well that he is having a bad case on the merits, over three weeks referring to voluminous record and the case law cited before me and the number of days for which I was forced to burn the midnight oil in assimilating the arguments and rendering the judgment running into several pages. Even then I cannot say that I have referred to each and every document or pages referred to by both the parties. I feel that I have considered the documents and case law to the extent of relevancy on the issues that have cropped up for consideration.


5. Both the appeals were filed against the order passed by the Company Law Board (for short "the Board") in C. P. No. 15 of 1994 filed under Sections 397 and 398 of the Companies Act, 1956 (for short "the Act") alleging oppression of the minority shareholders and mismanagement of the affairs of the company, to the extent the order went against their interests. Hence both the appeals can be disposed of by a common order.
 6. For the sake of convenience the parties are referred to in this order as they are arrayed in the company petition.
 7. Company Appeal No. 4 of 1999 is filed by the respondents in C. F. No. 15 of 1994, i.e., Sri Ramdas Motor Transport Ltd. (respondent No. 1), its managing director Mr. K.V.R. Choudary (second respondent), its joint managing director Mr. Saradhi (third respondent), son of the second respondent and the company secretary Mr. S. Rajeasekhara Rao (fourth respondent), aggrieved by the order of the Board directing the company or the party respondents to purchase the shares held by the petitioners having held that the petitioners have not been able to establish any of the allegations meriting grant of any of the prayers.
 8. Company Appeal No. 5 of 1999 is filed by petitioners Nos. 4 to 9 in C. P. No. 15 of 1994 in dismissing their application by holding that some of the allegations have been made on mere suspicion and others have not been established.


9. Having opined that the disposal of the company petition by the Board is not in accordance with the provisions of the Act and unknown to common parlance of law, I repeatedly suggested that it is an eminently fit case for compromise and to settle the disputes amicably keeping the proximity of the relationship between the parties. Mr. K.V.R. Choudary (hereinafter referred to as "second respondent"), managing director of the company, happened to be the father of Chundru Manorama (petitioner No. 7), grandfather of Chundru Padma Chaitanya (petitioner No. 8) and Nandamuri Satya Lavanya (petitioner No. 6) and father-in-law of Chundru Sri Hari Rao (hereinafter referred to as "ninth petitioner"). When counsel for the second respondent conveyed the anguish of his client against his son-in-law (i.e.) the ninth petitioner in dragging the affairs of the company to the streets, may be because of the precarious situation in which he is placed, his son-in-law the ninth petitioner has gone to the extent of submitting before the court that he is prepared to give a written apology if the company purchases the shares held by the petitioners as directed by the Board and pay the amounts that are due to them and if they are relieved of their agony to which they are subjected for over ten years. But the offer was rejected outright and the father-in-law invited a judgment on the merits in this case. Hence I am left with no option except to proceed with the case and deliver judgment on the merits.


10. Before adverting to the various contentions raised by the parties, it is useful to refer to the factual background of the case. Sri Ramdas Motor Transport Ltd. was incorporated as a private limited company on December 1, 1944, under the provisions of the Act mainly to carry on business as carriers of passengers, freight and mail by using motor vehicles etc., and in the course of time it not only acquired name and fame as a reputed parcel lorry service in the State of Andhra Pradesh but also diversified its activities to other fields. As on today it is having six subsidiary companies under its management and its annual turnover exceeds rupees 100 crores. It became a deemed public company in terms of the provisions of Section 43A(1A) of the Act. While 51 per cent. of the shares were held by the second respondent, his family members and his supporters, 11 per cent. of the shares were held by the ninth petitioner, and his family members. The ninth petitioner held the shares jointly with Annapurna Devi who died in the year 1984. The non-aligned members held the remaining 40 per cent. shares. It is also in the evidence of the ninth petitioner that the second respondent having joined as an employee on Rs. 250 per month rose to the level of managing director of the company very soon and as on today himself and his family members are holding majority shares in the company. From the above it is seen that majority of shares are held by the second respondent and his associates including the ninth petitioner till the disputes have arisen between them. As per Article 11 of the articles of association that were in force as on the date of dispute, the number of directors of the company shall not be less than three and shall not exceed nine. At the time of dispute, the company was having seven directors out of whom four directors are from the second respondent's family. From this it is seen that the


out of whom four directors are from the second respondent's family. From this it is seen that the second respondents family is in full control of the affairs of the company. While the second respondent continued to be the managing director of the main company, the ninth petitioner was heading some of the subsidiary companies or firms (1) chairman of Bhavani Castings, (2) managing partner of Padmamalaya Finance, (3) director of K.V.R. Forgings having resigned the post of managing director on his election as Member of Parliament in 1984, (4) managing director of Vijaya Engineering Works and (5) director in the main company. From the above it is seen that the ninth petitioner was looking after the affairs of most of the subsidiary companies and enjoying the powers on par with his father-in-law, i.e., the second respondent in the first respondent-company. In and around 1993, some disputes seemed to have arisen between these two individuals. While it is the case of the ninth petitioner that disputes have arisen when he raised the issue of sale of lorries and closure of parcel offices in the board meeting held on March 3, 1993, the case of the respondents is that disputes have arisen between them as he refused to finance his political activity, I feel that both the versions may be far from the truth. The efforts made by the well wishers of the family did not yield fruitful results. On the other hand, misunderstanding developed between the father-in-law and the son-in-law, i.e., the second respondent and the ninth petitioner, reached a stage of no return. While the majority of the shareholders aligned with the second respondent, a few shareholders who figured as petitioners Nos. 1 to 5 in C. P. No. 15 of 1994 aligned with the ninth petitioner and his family members (petitioners Nos. 6 to 9). As and when some information with regard to the management of the affairs


6 to 9). As and when some information with regard to the management of the affairs of the company was sought by the minority shareholders, the company secretary refused to furnish the same on the ground that he is not under an obligation to furnish any information. Ultimately the ninth petitioner was not only removed from the positions held by him in the subsidiary companies but also as director of the main company in its general body meeting held on January 21, 1994. In those circumstances the minority shareholders filed C.P. No. 7 of 1994 on February 24, 1994, on the file of the Board under Sections 397, 398, 403 and 406 read with Schedule 11 and Sections 539 to 544 and other applicable provisions of the Act for relief against oppression and mismanagement of the affairs of the first respondent-company and the ninth petitioner did not join as petitioner in this petition. The respondents seemed to have raised an objection to the maintainability of the petition on the ground that the petition was filed without obtaining the consent of the petitioners in writing. In those circumstances, the Board gave liberty to withdraw that petition and file a fresh petition and accordingly nine shareholders of the company filed C. P. No. 15 of 1994 on April 11, 1994. The main allegation of oppression and mismanagement of the affairs of the company relates to closure of parcel offices, sale of lorries and vehicles, removal of the ninth petitioner as director of the company, diversion of funds of the company to the other companies managed by the former employees, for personal gains and fabrication of the board's minutes by respondents Nos. 2 and 3. The petitioners in the said company petition have sought the relief of supersession of the board and a declaration that respondents Nos. 2 and 3 are not fit to hold the post of directors of the company. Some other company appeals were also filed by the petitioners during the pendency of


of the company. Some other company appeals were also filed by the petitioners during the pendency of the company petition and they will be referred to later in the judgment.


11. During the pendency of the petition, the petitioners filed C. A. No. 134 of 1995 seeking permission of the Board to lead evidence by way of affidavit as per Order 19 of the Code of Civil Procedure. This application was contested by counsel for the respondent stating that Order 19 is applicable only when a specific fact has to be established but cannot be relied on for all purposes and examination-in-chief is a must followed by cross-examination in view of the allegations of misconduct and fraud. Accepting the contention of the respondents counsel the petition was dismissed by observing that if counsel for the petitioner desires to lead any evidence by the petitioners it may be done through personal appearance of such petitioners.
 12. After some time, the petitioners filed C. A. No. 65 of 1996 on January 12, 1996, seeking appointment of an administrator for a period of five years and for production of minutes books, account books along with the vouchers for the period 1992-1995. In the said application, the petitioners have given some more instances relating to oppression of minority shareholders and mismanagement of the affairs of the company. Subsequently with the permission of the Board the petitioners filed another application, i.e., C. A. No. 115 of 1997 on March 13, 1997, seeking permission to amend C. A. No. 65 of 1996 by adding paragraphs 18A, 18B and 18C. The respondents contested these applications by contending that the petitioners cannot travel beyond the allegations made in the main petition and the subsequent events cannot be taken into consideration for considering the relief sought for in the main petition.
 13. Having heard the arguments on both sides, the Board passed the following order on December 18, 1997 :


"A Section 397/398 petition has to stand on its own on the basis of allegations contained in the petition. Subsequent events brought on record alone in case the main petition fails on the merits cannot entitle a person to any relief. In case the allegations in the main petition are proved then the subsequent events may be taken into consideration by the Board in moulding suitable relief."
 14. When the matter came up for hearing on September 5, 1997, the Board suggested to the parties to settle the disputes amicably and the respondents should inform the Board by September 21, 1997, whether they are agreeable for the appointment of an independent valuer to value the shares in respect of not only the two companies that are before the Board but also the other four companies in which the ninth petitioner is a shareholder. On September 29, 1997, learned counsel appearing for the second respondent sought for more time on the ground that other members of the board have to be consulted and the case was adjourned to November 27, 1997. But the respondents did not agree for the proposal of the Board. Arguments on both the sides in C. A. No. 65 of 1996 were completed before the Board at its meeting held on November 28, 1997, and the Board passed the following docket order :
 "Arguments on the application concluded. The petition will be heard on March 30 and 31, and April 15, 1998, and also August 27, 28 and 29, 1998 at 10.30 a.m. each day."


15. By an order dated December 18, 1997, in C. A. No. 65 of 1996, the Board rejected the prayer for appointment of an administrator for the reasons stated therein. In the said order having recorded a finding that the discrepancies in the stock as pointed out by learned counsel for the petitioner could not be taken as an act of such grave misconduct that would warrant appointment of an administrator at the interim stage, when the petition is still to be heard and the Board directed the company to furnish a statement of reconciliation on the discrepancies in stocks pointed out by the petitioners during the next hearing, as undertaken by learned counsel for the company, to enable them to take a view on this allegation. The ninth petitioner carried the matter in appeal to this court by filing C. A. No. 4 of 1998 and the same was dismissed by a Division Bench of this court in its order dated August 26, 1998, in, C. Sri Hart Rao v. Sri Ramdas Motor Transport ltd. [1999] 97 Comp Cas 685. The court held as follows (page 687) :
 "(1) None of the issues raised in the appeal can be said to be a question of law arising out of the order of the Company Law Board and as such the question of entertaining the appeal under Section 10F of the Act does not arise ; (2) the order under challenge is an interlocutory on for purpose of appointment of administrator at the interim stage and the Company Law Board in the contextual facts has exercised discretion and the user of discretion cannot by any stretch be termed to be so perverse in any event so as to warrant interference or intervention of the appellate court and (3) directed the Board to dispose of the matter with utmost expedition."


16. S. L. P. No. 16705 of 1998 filed against the said order was also dismissed on November 3, 1998.
 17. Since the proceedings of the Board were not stayed during the pendency of the appeal, the following docket order was passed by the Board on April 1, 1998:
 "Witnesses will be examined on April 18, 1998, at 9.30 a. m. at Chennai. Petition will be heard on the merits as already fixed on August 27, 28 and 29, 1998, at New Delhi, at 10.30 a. m. each day."


18. At this stage petitioner No. 9 filed an affidavit dated May 13, 1998, before the Board stating that though the Board handed over the summons to him on March 31, 1998, to be served on the list witnesses submitted by him for giving evidence on April 18, 1998, in the summons the date was shown as March 18, 1998, and the witnesses refused to take the summons apprehending that they may be taken to task for not appearing before the Board on the date mentioned in the summons for their appearance, i.e., March 18, 1998. In the meantime respondents Nos. 2 and 3 started creating a fear psychosis among the witnesses by implicating them in false criminal cases and also tried to assault him when he attended the annual general body meeting of the first respondent-company held on September 25, 1996. He brought to the notice of the Board not only various violent acts that were committed by the respondents on him but also filed documentary evidence to show that himself and the list witnesses were implicated in criminal cases. He also filed the orders passed by the High Court in W. P. No. 27324 of 1997 filed by him complaining on the inaction on the part of the police in not taking action on his complaint and the bail orders granted by this court to one of the list witness. In the last paragraph he stated as follows :
 "In this background our witnesses have been terrorized and persuaded in all possible ways by the managing director and the joint director of the first respondent and their followers. The said witnesses are totally refusing to attend and give evidence before this Honourable Bench on June 9, 1998, at Chennai for fear of retaliation on the part of respondents Nos. 1 and 2. I am placing all these facts before this Honourable Bench so that it can appreciate the conduct of the respondents."


19. It is also seen from record that the first petitioner the late Karedla Suryanarayana filed an affidavit dated October 13, 1995, during his lifetime how respondent No. 2 and his men tried to silence him at the annual general body meeting held on September 27, 1995.
 20. Learned counsel for the respondent did not bring to my notice that the allegations made in this affidavit were denied by the respondents by filing rebuttal evidence.


21. Thereafter when the matter was taken up for hearing on September 8, 1998, it was reported that the first petitioner died and his legal representatives were to be brought oft record. But they have not chosen to come on record. On the next date of hearing, i.e., December 2, 1998, the Board straightaway started hearing the arguments on the petition without completing the evidence of the ninth petitioner and without recording any evidence on the respondents side and without verifying the xerox copies of the documents filed by the respondents with the original records more so in the light of the allegations made by the petitioners that the second and third respondents fabricated the minutes of the board meetings etc., and completed the arguments by March 22, 1999. The Board by an order dated June 15, 1999, while dismissing the petition by holding that the petitioners have not been able to establish any of the allegations meriting the grant of any of the prayers in the petition, gave a direction under Section 402 of the Act to the first respondent-company to purchase the shares held by the petitioners by itself or the private individuals as may be decided by the respondents. Though I could not see from the attendance sheets that any one was examined in this case at any point of time both the parties agreed that the ninth petitioner (Chundru Srihari Rao) was examined before the Board and relied upon the oral evidence given by the ninth petitioner before this court. The date on which the evidence of the ninth petitioner commenced is not seen anywhere but his cross-examination was completed on October 18, 1995. It gives me an impression that the Board started recording evidence after C. A. No. 134 of 1995 was dismissed and before C. A. No. 65 of 1996 was filed. From the evidence it is seen that his cross-examination was completed on the allegations in the main petition on October 18,