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PETITIONER:

COMMON CAUSE, A REGISTERED SOCIETY

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT: 03/08/1999

BENCH:

S.Saghir Ahmad, K.Venkataswan, S.R.Babu

JUDGMENT:

S.SAGHIR AHMAD, J.

This is a Review Petition in Writ Petition No. 26 of

1995 which was filed by Mr. H.D. Shourie for the following

reliefs:-

"(i) Pass an appropriate writ, order or orders

directing the Respondents 1 to 3 to specifically declare as

to when the Union of India will now bring before the

Parliament an appropriately drafted Bill for enactment of

legislation for the establishment of the institution of

Lokpal, or a suitable alternative system of the nature of

Ombudsman which is operating in a number of other countries,

for checking and controlling corruption in public offices,

inter alia, at the political and bureaucratic levels, and

whether in the enactment of such legislation they will take

into consideration the suggestions that have emanated from

the Colloquium recently organised under the auspices of

Indian Institute of Public Administration with the

participation of foreign and Indian experts for examining

various aspects of the matter relating to establishment of

Ombudsman institution in this country;

(ii) Pass an appropriate writ, order or orders

directing that the institutions and organisations of the

Comptroller and Auditor General of India, Chief Vigilance

Commissioner, and the Central Bureau of Investigation should

indicate to the Hon'ble Court the specific steps which they

will take for effectively overcoming any inadequacies and

weaknesses in the operations of these important institutions

which presently hamper effective and efficacious check on

prevalence of corrupt practices in the country and to curb

corruption at all political and bureaucratic levels;

(iii) Pass an appropriate writ, order or orders

appointing a Commission or Commissioner to urgently

undertake comprehensive study of the present inadequacies in

the Prevention of Corruption Act 1947 for making specific

recommendations to strengthen this enactment for achieving

the objective of curbing and checking corruption at the

political and bureaucratic levels in the country.

(iv) Pass an appropriate writ, order or orders

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directing the State Governments Respondents to indicate to

the Hon'ble Court as to when they propose implementing the

specific suggestions which have been made for strengthening

and improvement of the functioning of the system of

Lokayukta, including inter alia, the following :

a) To ensure expeditious establishment of the

institution of Lokayukta and Upa-Lokayukta in every State;

b) To achieve uniformity in the provisions of various

Lokayukta and Upa-Lokayukta Acts; and

c) To confer Constitutional status on the institution

of Lokayukta."

The petition was taken up by this Court on 10.2.95

when the following Order was passed:-

"After hearing Mr. Shourie, appearing in-person, we

give him liberty to amend the petition by making broad base

on the subject of curbing corruption in the country. To

come up on 24.2.95."

On 10.5.95, the following Order was passed:-

"We request the Supreme Court Legal Aid Society to

depute a counsel to assist us in this case alongwith Mr.

Shourie, Adv. The Legal Aid Society shall also serve the

unserved respondents by depositing the necessary process fee

and other expenses. To be listed on 11th August, 1995. All

affidavits and counter affidavits may be tendered in the

Registry."

On 11.8.95, the Court passed the following Order:-

"Mr. Shourie, the petitioner appearing in-person,

states that it is of utmost importance to have a Lok Pal to

curb corruption in the country. Mr. Gupta, learned

Solicitor General states that efforts have been made more

than once to have consensus regarding the terms and

conditions of the proposed bill. According to him efforts

are still being made. It is a matter which concerns the

parliament and the Court cannot do anything substantial in

this matter. Short of that, learned Solicitor General

states that he would apply his mind to the various aspects

raised in this petition and make some useful suggestions.

Mr. Muralidhar, appearing as amicus curiae to assist us,

also states that he would examine the various reports

submitted by Comptroller and Auditor General from time to

time and in consultation with the Solicitor General and Mr.

Shourie make some suggestions for the consideration of this

Court.

Mr. Shourie has invited our attention to a news item

in the front page of Indian Express of Friday August 11,

1995 under the caption "In Satish Sharma's reign, petrol and

patronage flow together". It is not possible for us to take

any action on the press report. On our suggestion the

Solicitor General takes notice of this news item and states

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that he would have the matter examined in the Ministry

concerned and shall file an affidavit of the Secretary

concerned in the Ministry reacting to this news item. He

may file the affidavit within the period of eight weeks.

The Writ Petition is adjourned to 13.10.95."

The petition, thus, was diverted towards Captain

Satish Sharma who was, at that time, Minister of State for

Petroleum and Natural Gas in the Central Government. By

Judgment dated September 25, 1996, [(1996) 6 SCC 530] all

the 15 petrol outlets, allotted by the Minister to various

persons out of his discretionary quota, were cancelled and

the following directions were issued to Captain Satish

Sharma (petitioner) :-

"Capt. Satish Sharma shall show-cause within two

weeks why a direction be not issued to the appropriate

police authority to register a case and initiate prosecution

against him for criminal breach of trust or any other

offence under law. He shall further show-cause within the

said period why he should not, in addition, be made liable

to pay damages for his mala fide action in allotting petrol

pumps to the above mentioned fifteen persons."

The petitioner submitted the reply to the show-cause

notice which was disposed of by Judgment dated November 4,

1996 [(1996) 6 SCC 593]. The following operative Order was

passed :-

"We are of the view that the legal position that

exemplary damages can be awarded in a case where the action

of a public servant is oppressive, arbitrary or

unconstitutional is unexceptionable. The question for

consideration, however, is whether the action of Capt.

Satish Sharma makes him liable to pay exemplary damages. In

view of the findings of this Court in Common Cause Case -

quoted above - the answer has to be in the affirmative.

Satish Sharma's actions were wholly arbitrary, mala fide and

unconstitutional. This Court has given clear findings to

this effect in the Common Cause case. We, therefore, hold

that Capt. Satish Sharma is liable to pay exemplary

damages.

We have heard Mr. HN Salve on the question of

quantum. Mr. Salve has vehemently contended that Capt.

Sharma was a part of the system which was operating before

his joining as a Minister. According to him the types of

wrongs were being committed even earlier on the assumption

that the Minister's discretion was to be exercised on his

subjective satisfaction. He has further contended that

since the concept of absolute liability of public servants

for misfeasance has been of recent origin in this country

even while awarding exemplary damages leniency should be

shown. There is some plausibility in the contentions raised

by Mr. Salve. After examining all the facts and

circumstances of this case and giving thoughtful

consideration to this aspect, we direct Capt. Satish Sharma

to pay a sum of Rs. 50 lacs as exemplary damages to the

Government Exchequer. Since the property with which Capt.

Sharma was dealing was public property, the government which

is "by the people" has to be compensated. We further direct

Capt. Sharma to deposit the amount with the Secretary,

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Ministry of Finance, Government of India within nine months

from today. The amount if not paid, shall be recoverable as

arrears of land revenue."

The present Review Petition relates to these two

Judgments.

The Review Petition was put up before the Bench

comprising of Hon. Bharucha and Faizan Uddin, JJ. on

28.1.1997 when the Court directed "Issue notice on the

Review Petition."

On notice being served on Mr. H.D. Shourie, he filed

his reply to the Review Petition on 21.2.1997.

The office report dated 30th June, 1997 is to the

following effect :

"In the matter above-mentioned, this Court on 28th

January, 1997 directed to issue notice of the Review

Petition.

Accordingly, notice was issued to both the respondents

and hence the service of notice is complete as both the

respondents are represented by Mr. H.D. Shourie,

Respondent in person and Ms. Anil Katiyar, Advocate for

Respondent No.2.

Mr. Ashok K. Mahajan, Advocate has filed Application

for impleadment on behalf of Mr. Arun K.Gupta resident of

Kothi No. 68, Sector VIIIA, Chandigarh and also seeking

stay of further investigation by CBI during pendency of

Review Petition. Since the said Application was not served

on other side, a letter dated 4th March, 1997 and another

letter dated 30th June, 1997 was issued to Mr. Ashok K.

Mahajan to serve it on Mr. H.D. Shourie, Respondent No. 1

and Mrs. Anil Katiyar representing Respondent No. 2 and

Mr. P.H. Parekh, Advocate. He was also requested to

furnish proof of service but he has not furnished the same

so far.

Further, Mrs. Sandhya Goswami, Advocate has also

filed four separate Applications for impleadment on behalf

of M/s Shiv Balak Pasi, Syed Hassan Saukat Abidi, Dharmesh

Kumar and Pradeep Kumar without serving its copies on the

other sides. She was asked to serve the same on all the

parties and furnish proof of service but the same has not

been furnished by her so far. All the Applications for

impleadment as party are being circulated to Hon'ble Judges

with this office report.

It is further submitted that Mrs. Anil Katiyar,

Advocate has filed an Application for Clarification and

modification of order dated 25th September, 1996 which has

been registered as I.A. No. 6. Further she has also filed

counter affidavit on behalf of Union of India deposed by

Director, Ministry of Petroleum and Natural Gas, Government

of India. The said Application and counter affidavit are

being circulated with this office report for orders."

Thereafter, the matter came up before the Bench

comprising of Hon. SC Sen and Sujata Manohar, JJ., on

8.7.1997. Mr. H.D. Shourie, who had filed the Writ

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Petition (C) No. 26 of 1995, was present in person, but the

case was adjourned to 25th of July, 1997. On 25.7.1997, the

case was shown in the cause-list, but the following notice

was also published in that cause list:

"TAKE NOTICE THAT the above mentioned matters listed

in Court No. 8 before a Special Bench of Hon. Mr. Justice

S.C. Sen and Hon. Mrs. Justice Sujata V. Manohar, as

Item Nos. "C" and "D" in the Daily List for 25th July, 1997

issued on 19th July, 1997 will not be taken up for hearing

and the same stand adjourned to 22nd August, 1997.

BY ORDER

DATED this the 25th day of July, 1997."

The case was thus adjourned to 22.8.1997 and on that

date the Bench comprising of Hon. SC Sen and Sujata

Manohar, JJ., adjourned the case to 9.9.1997. Mr. K.

Parasaran, Senior Counsel appearing for the petitioner, was

directed to give his written arguments. On 1.9.1997, Mr.

Gopal Subramaniam, Senior Counsel, was appointed as amicus

curiae. When the case came up before the Bench of Hon. SC

Sen and Sujata Manohar, JJ., Their Lordships released the

case with the further direction that it would not be treated

as part-heard with them. On 27.3.1998, the case came up

before the Bench of Hon. SC Agrawal and Sujata Manohar, JJ.

when the following order was passed :

"Since the argument on this petition is likely to take

some time it is directed that the matter may be listed on a

non- miscellaneous day. The Registrar Judicial will take

appropriate directions from Hon'ble the Chief Justice for

listing the matter before an appropriate bench."

It was thereafter that the matter was placed before

this Bench. We have heard learned counsel for the parties.

We have also heard Mr.Gopal Subramaniam, Senior Counsel,

(Amicus Curiae).

Mr. K.Parasaran, learned Senior Counsel for the

applicant, has contended that since the applicant was

Minister of State for Petroleum in the Central Government

and it was in his capacity as an essential component of the

Central Government, that he had made allotment of Petrol

Pumps out of his discretionary quota, his act in making the

allotments shall be treated to be the act of the Central

Government with the result that even if such allotments were

cancelled on the ground of arbitrary exercise of power, the

Court could not have legally directed exemplary damages to

be paid by the Government to itself. He also contended that

the jurisdiction of this Court under Article 32 was limited,

unlike the vast jurisdiction of the High Courts under

Article 226 of the Constitution and, therefore, in exercise

of the limited jurisdiction, the Court cannot award

exemplary damages for the "tort of misfeasance in office",

as in the proceedings under this Article, which constitute

Public Law proceedings, damages can be awarded only for the

violation of the Fundamental Rights of citizens either by

the Government or its officers, specially the Right to Life,

but not for "Tort" for which action should have been

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initiated under the Private Law by filing a suit in a Court

of competent jurisdiction.

Learned counsel for the petitioner contended that the

petitioner being a Minister of State in the Union Cabinet

was a part of the Government and his act being the act of

the President, as the petitioner was in the Central Cabinet,

the same could not be made the basis of action for damages

under the Law of Torts and, therefore, under Public Law as

well, the petitioner could not be held liable for damages

or, for that matter, exemplary damages.

Relying upon the decision of this Court in Samsher

Singh & Anr. vs. State of Punjab, 1975 (1) SCR 814 = AIR

1974 SC 2192, which specifically dealt with the business

rules of the Union Cabinet and laid down that the act of a

Minister would be treated as the act of the President or the

Governor, as the case may be, learned counsel for the

petitioner contended that if the petitioner, in exercise of

his discretionary power, had allocated or allotted petroleum

outlets to needy persons, he would be treated to have acted

only on behalf of the President and his act could not be

questioned in any court, including this Court, nor could the

act of allotment of petrol outlets to various persons

constitute a basis for damages. The contention further is

that the petitioner having acted as Minister of State, his

act would be treated to be the act of the entire Cabinet

which, on the principle of `collective responsibility',

would be treated to have endorsed the act of the petitioner

in making the allotments of Petrol outlets and since the

Cabinet is answerable to the Parliament, where the

allotments were not questioned, the same cannot be

questioned here in this Court.

We have seriously considered the contention of Mr.

Parasaran, as set out above, but we are unable to agree with

him on the broad proposition placed before us.

The Executive power of the Union is vested in the

President under Article 53 of the Constitution. The extent

of the Executive power is indicated in Article 73. The next

Article, namely, Article 74 provides for a Council of

Ministers to aid and advise the President. Article 75(3)

speaks of the collective responsibility of the Cabinet which

provides that the Cabinet shall be responsible to

Parliament. Article 77 provides for the conduct of business

of the Government of India and clause (3) thereof empowers

the President to make rules for the convenient transaction

of its business and for allocation amongst Ministers of the

said business. It is in exercise of this power that rules

for allocation of business have been framed under which

various divisions of work to different Ministries have been

indicated. Distribution of petroleum products, including

petroleum outlets, is also one of the subjects which has

been allocated to the Ministry of Petroleum.

The functions of the Govt. are carried out in the

name of the President by Ministers appointed by him on the

advice of the Prime Minister. The Executive consists of :

(a) Prime Minister and Ministers who are members of

the Cabinet; (b) Ministers who are not of Cabinet rank;

(c) The Civil Service.

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Since the functions of the Govt. are carried on by

the Executive in the name of the President on the advice of

Ministers, they (Ministers) alone are answerable to the

Parliament. The Civil Service as such has no Constitutional

personality or responsibility separate from the duly

constituted Govt.

Article 77(1) and (2) provide that whatever executive

action is taken by the Government of India, the same shall

be expressed to have been taken in the name of the

President.

Executive power is not defined in the Constitution.

Article 73 relating to the Union of India and Article 163

relating to the State deal primarily with the extent of

executive power. In Rai Sahib Ram Jawaya Kapur vs. State

of Punjab, 1955 (2) SCR 225 = AIR 1955 SC 549, the then

Chief Justice Mukherjea pointed out:-

"It may not be possible to frame an exhaustive

definition of what executive function means and implies.

Ordinarily the executive power connotes the residue of

governmental functions that remain after legislative and

judicial functions are taken away."

This Judgment also deals with the concept of Cabinet,

the Council of Ministers, its collective responsibility and

how the Executive functions subject to the control of the

Legislature. It is laid down that although the President is

the head of the Executive, he acts on the aid and advice of

the Council of Ministers, headed by the Prime Minister, who

are all members of the Legislature and since the President

has to act upon the advice of the Council of Ministers, the

Legislature indirectly controls the functioning of the

Executive. The relevant portions are extracted below:-

"Our Constitution, though federal in its structure, is

modelled on the British Parliamentary system where the

executive is deemed to have the primary responsibility for

the formulation of governmental policy and its transmission

into law though the condition precedent to the exercise of

this responsibility is its retaining the confidence of the

legislative branch of the State..... In India, as in

England, the executive has to act subject to the control of

the legislature; but in what way is this control exercised

by the legislature? Under Article 53(1)..., the executive

power of the Union is vested in the President but under

Article 75 there is to be a Council of Ministers with the

Prime Minister at the head to aid and advise the President

in the exercise of his functions. The President has thus

been made a formal or constitutional head of the executive

and the real executive powers are vested in the Ministers or

the Cabinet. The same provisions obtain in regard to the

Govt. of States; the Governor ... occupies the position

of the head of the executive in the State but it is

virtually the council of Ministers in each State that

carries on the executive Govt. In the Indian Constitution,

therefore, we have the same system of parliamentary

executive as in England and the Council of Ministers

consisting, as it does, of the members of the legislature

is, like the British Cabinet, `a hyphen which joins, a

buckle which fastens the legislative part of the State to

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the executive part'. The Cabinet enjoying, as it does, a

majority in the legislature concentrates in itself the

virtual control of both legislative and executive functions;

and as the Ministers constituting the Cabinet are presumably

agreed on fundamentals and act on the principle of

collective responsibility, the most important questions of

policy are all formulated by them."

This decision was referred to in State of M.P. vs.

Thakur Bharat Singh, 1967 (2) SCR 454 = AIR 1967 SC 1170,

wherein it was held that if the executive action of the

Government affected prejudicially the rights of any citizen,

such action could be justified only if it was supported by

the authority of law. The concept and the extent of

executive action was also examined by this Court in

Naraindas Indurkhya vs. State of M.P., 1974 (3) SCR 624 =

(1974) 4 SCC 788 = AIR 1974 SC 1232, in which the decision

in Rai Saheb Ram Jawaya Kapur's case (supra) was followed

and it was laid down that the State Government could

prescribe textbooks in the exercise of its executive power

so long as it did not infringe the rights of anyone. This

decision was reiterated in Jayantilal Amratlal Shodhan vs.

F.N. Rana, 1964 (5) SCR 294 = AIR 1964 SC 648 and again in

Bishambhar Dayal Chandra Mohan vs. State of U.P., (1982) 1

SCC 39 = 1982 (1) SCR 1137 = AIR 1982 SC 33. The whole

constitutional position was reconsidered by a Seven-Judge

Bench of this Court in Samsher Singh & Anr. vs. State of

Punjab, 1975 (1) SCR 814 = (1974) 2 SCC 832 = AIR 1974 SC

2192, in which the decision in B.K. Sardari Lal vs. Union

of India (1970) 1 SCC 411 = (1971) 3 SCR 461 = AIR 1971 SC

1547 was specifically overruled and it was held that under

Article 74(1), it is the function of the Council of

Ministers to advise the President over the whole of the

Central field and nothing is excepted from that field by

this Article. It was also pointed out that the Constitution

of India has adopted the parliamentary or the Cabinet form

of Government on the British model. The principle of

English Constitutional Law that the King does not act on his

own, but on the advice of Council of Ministers is embodied

in the Indian Constitution as may be evident from the

following words of Justice Krishna Iyer in that case:-

"Not the Potomac, but the Thames, fertilises the flow

of the Yamuna, if we may adopt a riverine imagery. In this

thesis, we are fortified by precedents of this Court,

strengthened by Constituent Assembly proceedings and

reinforced by the actual working of the organs involved for

about a `silver jubilee' span of time."

It was also pointed out in this case that the words

"business of the Government of India" and "the business of

the Government of the State", as used in Articles 77(3) and

166(3), include "all executive business". Seervai in his

treatise "Constitutional Law of India", Silver Jubilee

Edition, Fourth Edition, on page 2037 has, after a critical

analysis of the Judgment, extracted the following principles

on the "business of the Government of India and allocation

of business among Ministers" :-

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"(i) The expressions "business of the Government of

India" and "the business of the Government of the State" in

Arts. 77(3) and 166(3) includes "all executive business".

(j) "Where the Constitution required the satisfaction

of the President or the Governor for the exercise of any

power or function by the President or the Governor as the

case may be ... the satifaction required by the

Constitution is not the personal satisfaction of the

President or the Governor but is the satisfaction of the

President or of the Governor in the constitutional sense

under the Cabinet system of government .... It is the

satisfaction of the Council of Ministers on whose aid and

advice the President or the Governor generally exercises all

his powers and functions...." Arts. 77(3) and 166(3)

provide that the President or the Governor shall make rules

for the more convenient transaction of the business of

government and the allocation of functions among Ministers.

Rules of business and the allocation of functions to

Ministers indicate that the satisfaction of the Minister or

the officer is the satisfaction of the President or the

Governor.

(k) Rules of business and allocation of business among

Ministers are relatable to Arts. 53 and 154 which provide

that executive power shall be exercised by the President and

by the Governor either directly or through subordinate

officers. The provisions made in Arts. 74 and 163 for a

Council of Ministers to aid and advise the President and the

Governor "are sources of the business."

(l) Where the functions entrusted to a Minister are

performed by an officer employed in the Minister's

department, there is in law no delegation to that officer

because the act or decision of the officer is that of the

Minister: Halsbury, Vol. 1, 4th ed. para 748."

In view of the discussion held above, it will be seen

that though an order is issued in the name of the President,

it does not become an order of the President passed by him

personally, but remains, basically and essentially, the

order of the Minister on whose advice the President had

acted and passed that order. Moreover, as required by

Article 77 (1), all executive actions of the Govt. of India

have to be expressed in the name of the President; but this

would not make that order an order passed by the President

personally. That being so, the order carries with it no

immunity. Being essentially an order of the Govt. of

India, passed in exercise of its Executive functions, it

would be amenable to judicial scrutiny and, therefore, can

constitute a valid basis for exercise of power of judicial

review by this Court. The authenticity, validity and

correctness of such an order can be examined by this Court

in spite of the order having been expressed in the name of

the President. The immunity available to the President

under Article 361 of the Constitution cannot be extended to

the orders passed in the name of the President under Article

77 (1) or Article 77 (2) of the Constitution.

The related question as to the liability of the

Minister to pay damages to the Govt. will be considered by

us while dealing with the "Tort of Misfeasance in Public

Office" and payment of exemplary damages to the Govt.

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The other aspect of the matter as argued by Mr. K.

Parasaran as to the "collective responsibility" of the

Cabinet with regard to the allotment of petrol outlets made

by the petitioner in exercise of his discretionary quota may

now be considered. It is contended by Mr. K. Parasaran

that under the scheme of the Constitution, any order passed

by the Minister shall be treated to be an order passed by

the Cabinet which is collectively answerable to the House of

the People under Article 75 (3). It is contended that an

order passed by the Minister individually in favour of

various persons to whom petrol outlets were allotted cannot

be questioned as it was not raised before the House of the

People to whom the Cabinet, as a whole, was answerable. The

whole series of allotments made by the petitioner could then

have been debated before the House and since this was not

done, it is not open to question those allotments in this

Court by a writ petition and the proceedings were meant only

to embarrass and harass the Cabinet. It is also contended

that the petitioner had the jurisdiction to make allotments

of petrol outlets and the discretionary quota allowed to him

was utilised for that purpose. Since it is not the case

that the jurisdiction was, in any way, exceeded or that

allotments were made in excess of the quota or for monetary

consideration, the same need not have been scrutinised by

this Court nor could such allotments be made the basis for

awarding exemplary damages or investigation by C.B.I.

Let us examine the viability of these submissions.

Our Constitution provides for a Parliamentary form of

Govt. Article 79 provides that there shall be a Parliament

for the Union which shall consist of the President and two

Houses known respectively as Council of States and the House

of the People. Article 80 provides for the composition of

the Council of States while Article 81 provides for the

composition of the House of the People. Article 81 further

provides that the House of the People shall consist of :

(a) not more than 530 members chosen by direct election from

territorial constituencies in the States; and (b) not more

than 20 members to represent the Union Territories chosen in

such manner as Parliament may by law provide. Article 83

provides for the duration of Houses of Parliament while

Article 85 provides for the Sessions of Parliament,

prorogation of the Houses or either House and dissolution of

the House of the People. Article 86 speaks of the right of

the President to address and send messages to Houses while

Article 87 provides for Special Address by the President

after each General Election to the House of the People and

at the commencement of the first session of each year. Once

the election to the House of the People is complete, comes

the stage for the appointment of Prime Minister and Council

of Ministers to aid and advise the President as provided by

Article 74. Since the elections are contested principally

by the political parties who set up their candidates at the

election, there is tacit understanding in keeping with the

British convention, that the party which has secured the

majority in the House of the People would govern while the

parties which are in the minority would sit in the

Parliament as members of the "Opposition." It is on account

of this convention that the President invites the leader of

the political party which has obtained majority, to form the

Govt. The President appoints the Prime Minister and then

the Ministers are appointed on the advice of the Prime

Minister, who constitute the Council of Ministers. Article

75(3) provides that the Council of Ministers shall be

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collectively responsible to the House of the People.

The concept of "collective responsibility" is

essentially a political concept. The country is governed by

the party in power on the basis of the policies adopted and

laid down by it in the Cabinet Meeting. "Collective

Responsibility" has two meanings: The first meaning which

can legitimately be ascribed to it is that all members of a

Govt. are unanimous in supprot of its policies and would

exhibit that unanimity on public occasions although while

formulating the policies, they might have expressed a

different view in the meeting of the Cabinet. The other

meaning is that Ministers, who had an opportunity to speak

for or against the policies in the Cabinet are thereby

personally and morally responsible for its success and

failure.

In the British Constitution & Politics 5th Edition by

J. Harvey and L. Bather, it is said as under :

"Except when a minister explains the reasons for his

resignation, parliament hears nothing of the Cabinet's

current deliberations. These remain secret, and only

decisions as a whole are reported to the House when policy

is announced. Any leakage of divergent views held by

ministers would, as during Queen Victoria's reign, seriously

weaken the Government. In its decisions, 'the Cabinet is a

unity to the House'. While a minister can speak against any

proposal in a Cabinet meeting, he must either support the

policy decided upon or resign. Recent resignations of this

nature are Frank Cousins (Prices and and Incomes Bill, 1966)

and Lord Longford (education cuts, 1968). But such

resignations are infrequent. Ministers come from the same

party and, at least initially, are fairly homogeneous in

their political views. In any case, a former minister is

unlikely to cross the floor of the House and join the

Opposition. His disagreement with the Government is usually

over only one issue, and his basic political outlook remains

unchanged.

Thus the Cabinet stands or falls together. Where the

policy of a particular minister is under attack, it is the

government as whole which is being attacked. Thus the

defeat of a minister on any major issue represents a defeat

for the Government. However, today, unlike the nineteenth

century, such defeats do not occur. The use of rigid party

discipline ensures that the Government can always obtain a

majority vote. Nevertheless, criticism may be so severe and

widespread that the Government may modify its policy. If

the minister identified with it feels that his prestige with

the party has been badly damaged, he may resign, e.g. Sir

Samuel Hoare (1935) over the proposals to partition

Abyssinia.

In practice, therefore, all that collective

responsibility means today is that every member of the

Government must be prepared to support all Cabinet decisions

both inside and outside the House."

It is further provided as under :

"The doctrine of collective responsibility has

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practical advantages. First, it counteracts departmental

separation for each minister has to be concerned with

policies of other departments. Second, it prevents the

policy of one department being determined unilaterally.

Since it is the Cabinet as a whole which decides, ministers

are less likely to be over-influenced by their civil

servants. Third, it ensures that Cabinet decisions are

based on principles and not on personalities.

Collective responsibility does not apply to a

minister's responsibility for his permanent officials or for

his personal mistakes."

In this connection, an extract from "The British

Cabinet" by John P. Mackintosh, 1962 Edn., is set out below

as it is also extremely relevant for this case.

"Much has been said and written about the

responsibility of ministers. The discussion can easily

become confused because of the different meanings that are

attached to the word "responsible". Collective

responsibility will be discussed below, and the first task

is to consider whether there is any separate element of

individual responsibility. The most common political

meaning is that a certain minister will answer parliamentary

questions on a given subject. A second sense arises when

those in political circles appreciate that a particular

policy is largely the idea of the minister, rather than the

traditional policy of the party in power, and they may

single out the minister for attack. For instance, in

1903-05 Wyndham was purusing his land purchase schemes for

Ireland in a manner which alarmed many Conservatives and

would certainly have been unlikely under any other Chief

Secretary. A third sense is simply that a minister is

responsible even if a policy is the work of the Cabinet as a

whole but his colleagues choose to place the burden upon

him. Thus Sir Samuel Hoare thought he was acting in

accordance with the views of the ministry in concluding the

Hoare-Lavel Pact and his decisions were subsequently

endorsed by the Cabinet till opposition became acute. He

was then asked to disavow and denounce his actions but

preferred, "accepting his responsibility," to resign. There

is, in addition, the normal moral sense of the word meaning

"culpable" and a minister may, like a private individual,

feel responsible if he could by greater wisdom or exertion

have prevented some unfortunate occurrence.

The one aspect that remains is the alleged obligation

on a minister to resign when he or one of his subordinates

has blundered. The origin of this notion is fairly clear.

It dates from the 1850s and 1860s when it was reasonable to

assume that a minister could watch over every significant

action of his department. Even then, there would have been

no need to acknowledge errors in this way but for the power

of the House of Commons to move and carry a motion censuring

the individual in question without necessarily dislodging

the government."

From the above, it will be seen that in spite of the

fact that the Council of Ministers is collectively

responsible to the House of the People, there may be an

occasion where the conduct of a Minister may be censured if

he or his subordinates have blundered and have acted

contrary to law.

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No doubt it was open to the House of the People (Lok

Sabha) to take up the issue of the abuse of discretionary

quota by the petitioner in his capacity as the Minister of

State for Petroleum, and his conduct could have been debated

and scrutinised on the floor of the House, but the mere fact

that this was not done would not mean that the allotments of

petroleum outlets by him were immune from judicial scrutiny

by this Court under Article 32 of the Constitution.

Therefore, even if the matter was not raised on the floor of

the Lok Sabha, it would be amenable to the jurisdiction of

this Court under Article 32 of the Constitution.

Even in England, all ministers and servants of the

Crown are accountable to the courts for the legality of

their actions, and may be held civilly and criminally

liable, in their individual capacities, for tortious or

criminal acts. This liability may be enforced either by

means of ordinary criminal or civil proceedings or by means

of impeachment, a remedy which is probably obsolete. They

are also subject to the judicial review jurisdiction of the

courts. [See: Halsbury's Laws of England - Fourth Edition

(Re-issue), Volume 8(2), Para 422].

Learned counsel for the petitioner contended that

neither could the Court award exemplary damages against the

petitioner nor could it order any C.B.I. investigation as

the petitioner in making the allotment of petrol outlets had

not committed any offence, much less an offence of breach of

trust. It is also contended that the petitioner while

making allotments out of his discretionary quota available

to him as Minister of State for Petroleum, had not committed

the tort of misfeasance in public office and, therefore, he

was not liable to pay any damages. Mr. K.Parasaran also

argued that exemplary damages under law can be awarded in

addition to the damages for the "tort" alleged to have been

committed but where not even damages have been awarded,

there is no question of awarding exemplary damages. It is

also contended that action for tort could have been

initiated only in the field of private law by instituting a

suit in a proper Civil Court and not under the public law,

namely, in proceedings initiated under Article 32 of the

Constitution particularly as intricate questions of fact

were involved.

Since the question whether the action could have been

initiated under the public law and whether exemplary damages

could have been awarded in those proceedings relates to the

question of jurisdiction, we would take up this question

first.

Under Article 226 of the Constitution, the High Court

has been given the power and jurisdiction to issue

appropriate Writs in the nature of Mandamus, Certiorari,

Prohibition, Quo-warranto and Habeas Corpus for the

enforcement of Fundamental Rights or for any other purpose.

Thus, the High Court has jurisdiction not only to grant

relief for the enforcement of Fundamental Rights but also

for "any other purpose" which would include the enforcement

of public duties by public bodies. So also, the Supreme

Court under Article 32 has the jurisdiction to issue

prerogative Writs for the enforcement of Fundamental Rights

guaranteed to a citizen under the Constitution.

Essentially, under public law, it is the dispute

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between the citizen or a group of citizens on the one hand

and the State or other public bodies on the other, which is

resolved. This is done to maintain the rule of law and to

prevent the State or the public bodies from acting in an

arbitrary manner or in violation of that rule. The exercise

of constitutional powers by the High Court and the Supreme

Court under Article 226 and 32 has been categorised as power

of "judicial review". Every executive or administrative

action of the State or other statutory or public bodies is

open to judicial scrutiny and the High Court or the Supreme

Court can, in exercise of the power of judicial review under

the Constitution, quash the executive action or decision

which is contrary to law or is violative of Fundamental

Rights guaranteed by the Constitution. With the expanding

horizon of Article 14 read with other Articles dealing with

Fundamental Rights, every executive action of the Govt. or

other public bodies, including Instrumentalities of the

Govt., or those which can be legally treated as "Authority"

within the meaning of Article 12, if arbitrary, unreasonable

or contrary to law, is now amenable to the writ jurisdiction

of this Court under Article 32 or the High Courts under

Article 226 and can be validly scrutinised on the touchstone

of the Constitutional mandates.

In a broad sense, therefore, it may be said that those

branches of law which deal with the rights/duties and

privileges of the public authorities and their relationship

with the individual citizens of the State, pertain to

"public law", such as Constitutional and Administrative Law,

in contradistinction to "private law" fields which are those

branches of law which deal with the rights and liabilities

of private individuals in relation to one another.

The distinction between private law and public law was

noticed by this Court in Life Insurance Corporation of India

vs. Escorts Limited & Ors., 1985 Supp. (3) SCR 909 =

(1986) 1 SCC 264 = AIR 1986 SC 1370, in which the Court

observed as under:-

"Broadly speaking, the Court will examine actions of

State if they pertain to the public law domain and refrain

from examining them if they pertain to the private law

field. The difficulty will lie in demarcating the frontier

between the public law domain and the private law field. It

is impossible to draw the line with precision and we do not

want to attempt it. The question must be decided in each

case with reference to the particular action, the activity

in which the State or the instrumentality of the State is

engaged when performing the action, the public law or

private law character of the action and a host of other

relevant circumstances."

Public Law field, since its emergence, is ever

expanding in operational dimension. Its expanse covers even

contractual matters. (See: Union of India vs. A.L.

Rallia Ram, 1964 (3) SCR 164 = AIR 1963 SC 1685; Mulamchand

vs. State of Madhya Pradesh, 1968 (3) SCR 214 = AIR 1968 SC

1218, wherein the principles of restitution and unjust-

enrichment were applied). (See also: State of West Bengal

vs. B.K. Mondal & Sons, 1962 Supp. (1) SCR 876 = AIR 1962

SC 779 and New Marine Coal Company Limited vs. Union of

India, 1964 (2) SCR 859 = AIR 1964 SC 152).

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Government decisions regarding award of contracts are

also open to judicial review and if the decision making

process is shown to be vitiated by arbitrariness,

unfairness, illegality and irrationality, then the Court can

strike down the decision making process as also the award of

contract based on such decision. This was so laid down by

this Court in Tata Cellular vs. Union of India, (1994) 6

SCC 651 = AIR 1996 SC 11. Initially the Supreme Court was

of the opinion that while the decision making process for

award of a contract would be amenable to judicial review

under Article 226 or 32 of the Constitution, a breach of a

contractual obligation arising out of a contract already

executed would not be so enforceable under such jurisdiction

and the remedy in such cases would lie by way of a civil

suit for damages. (See: Radhakrishna Agarwal vs. State of

Bihar, (1977) 3 SCC 457 = 1977 (3) SCR 249 = AIR 1977 SC

1496). But the Court changed its opinion in subsequent

decisions and held that even arbitrary and unreasonable

decisions of the Government authorities while acting in

pursuance of a contract would also be amenable to writ

jurisdiction. This principle was laid down in Gujarat State

Financial Corporation vs. Lotus Hotels Pvt. Ltd., (1983) 3

SCC 379 = AIR 1983 SC 848. This Court even went to the

extent of saying that the terms of contract cannot be

altered in the garb of the duty to act fairly. (See:

Assistant Excise Commissioner vs. Issac Peter, (1994) 4 SCC

104 = 1994 (2) SCR 67). Duty to act fairly in respect of

contracts was also the core question in Mahabir Auto Stores

vs. Indian Oil Corporation, 1990 (1) SCR 818 = (1990) 3 SCC

752 = AIR 1990 SC 1031, in which this Court relied upon its

earlier decisions in E.P.Royappa vs. State of Tamil Nadu,

1974 (2) SCR 348 = (1974) 4 SCC 3 = AIR 1974 SC 555; Menka

Gandhi vs. Union of India, (1978) 1 SCC 248 = 1978 (2) SCR

621 = AIR 1978 SC 597; Ajay Hasia vs. Khalid Mujib

Sehravardi, (1981) 1 SCC 722 = 1981 (2) SCR 79 = AIR 1981 SC

487; R.D. Shetty vs. The International Airport Authority

of India, 1979 (3) SCR 1014 = (1979) 3 SCC 489 = AIR 1979 SC

1628, as also Dwarka Das Marfatia & Sons vs. Board of

Trustees of the Port of Bombay , (1989) 3 SCC 293 = 1989 (2)

SCR 751 = AIR 1989 SC 1642.

Public law remedies have also been extended by this

Court to the realm of tort.

In exercise of jurisdiction under Article 32 of the

Constitution, this Court has awarded compensation to the

petitioners who suffered personal injuries at the hands of

the officers of the Government and the causing of injuries

which amounted to tortious act was compensated by this

Court. In Rudul Sah vs. State of Bihar, 1983 (3) SCR 508 =

(1983) 4 SCC 141 = AIR 1983 SC 1086, a Three-Judge Bench of

this Court awarded compensation (Rs.30,000/-) for illegal

detention. In Bhim Singh vs. State of Jammu & Kashmir,

(1985) 4 SCC 677 = AIR 1986 SC 494, a sum of Rs.50,000/- was

awarded to the petitioner for the illegal detention of the

petitioner by the State authorities. The compensation which

was directed to be paid on account of police atrocities was

the subject matter of several cases before this Court. A

few of them are People's Union for Democratic Rights vs.

State of Bihar, 1987 (1) SCR 631 = (1987) 1 SCC 265 = AIR

1987 SC 355; People's Union for Democratic Rights Thru.Its

Secy. vs. Police Commissioner, Delhi Police Headquarters,

(1989) 4 SCC 730 = 1989 (1) Scale 599; SAHELI, a Woman's

Resources Centre vs. Commissioner of Police, Delhi, (1990)

1 SCC 422 = 1989 (Supp.) SCR 488 = AIR 1990 SC 513;

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Arvinder Singh Bagga vs. State of U.P., (1994) 6 SCC 565 =

AIR 1995 SC 117; P.Rathinam vs. Union of India, (1989)

Supp. 2 SCC 716; In Re: Death of Sawinder Singh Grower,

(1995) Supp. (4) SCC 450 = JT 1992 (6) SC 271 = 1992 (3)

Scale 34; Inder Singh vs. State of Punjab, (1995) 3 SCC

702 = AIR 1995 SC 1949; D.K. Basu vs. State of West

Bengal, (1997) 1 SCC 416 = AIR 1997 SC 610; Mrs. Pritam

Kaur Baryar vs. State of Punjab, (1996) 7 Scale (SP) 11 and

Paramjit Kaur vs.State of Punjab, (1996) 8 Scale (SP) 6.

In cases relating to custodial deaths, this Court has

awarded compensation in Nilabati Behera vs. State of

Orissa, (1993) 2 SCC 746 = 1993 (2) SCR 581 = AIR 1993 SC

1960; State of M.P. vs. Shyam Sunder Trivedi, (1995) 4

SCC 262 = 1995 (3) Scale 343; People's Union for Civil

Liberties vs. Union of India, (1997) 3 SCC 433 = AIR 1997

SC 1203 and Kaushalya vs. State of Punjab, (1996) 7 Scale

(SP) 13.

For medical negligence, compensation was awarded by

this Court in Supreme Court Legal Aid Committee vs. State

of Bihar, (1991) 3 SCC 482; Dr. Jacob George vs. State of

Kerala, (1994) 3 SCC 430 = 1994 (2) Scale 563 and Paschim

Banga Khet Mazdoor Samity vs. State of West Bengal & Ors.,

(1996) 4 SCC 37 = AIR 1996 SC 2426.

Damages were also awarded by this Court in Mrs. Manju

Bhatia vs. N.D.M.C., (1997) 6 SCC 370 = AIR 1998 SC 223 =

(1997) 4 Scale 350.

In N.Nagendra Rao & Co. vs. State of Andhra Pradesh,

(1994) 6 SCC 205 = AIR 1994 SC 2663, this Court observed as

under:-

"Therefore, barring functions such as administration

of justice, maintenance of law and order and repression of

crime etc. which are among the primary and inalienable

functions of a Constitutional Government, the State cannot

claim any immunity. The determination of vicarious

liability of the State being linked with negligence of its

officers, if they can be sued personally for which there is

no dearth of authority and the law of misfeasance in

discharge of public duty having marched ahead, there is no

rationale for the proposition that even if the officer is

liable the State cannot be sued. The liability of the

officer personally was not doubted even in Viscount

Canterbury. But the Crown was held immune on doctrine of

sovereign immunity. Since the doctrine has become outdated

and sovereignty now vests in the people, the State cannot

claim any immunity and if a suit is maintainable against the

officer personally, then there is no reason to hold that it

would not be maintainable against the State."

The difference between public and private law was

again examined by this Court in Nilabati Behera vs. State

of Orissa (supra). Dr. Anand, J. (as His Lordship then

was) in his separate concurring Judgment laid down as

under:-.lm15

"34. The public law proceedings serve a different

purpose than the private law proceedings. The relief of

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monetary compensation, as exemplary damages, in proceedings

under Article 32 by this Court or under Article 226 by the

High Courts, for established infringement of the

indefeasible right guaranteed under Article 21 of the

Constitution is a remedy available in public law and is

based on the strict liability for contravention of the

guaranteed basic and indeafeasible rights of the citizen.

The purpose of public law is not only to civilize public

power but also to assure the citizen that they live under a

legal system which aims to protect their interests and

preserve their rights. Therefore, when the court moulds the

relief by granting "compensation" in proceedings under

Article 32 or 226 of the Constitution seeking enforcement or

protection of fundamental rights, it does so under the

public law by way of penalising the wrongdoer and fixing the

liability for the public wrong on the State which has failed

in its public duty to protect the fundamental rights of the

citizen. The payment of compensation in such cases is not

to be understood, as it is generally understood in a civil

action for damages under the private law but in the broader

sense of providing relief by an order of making `monetary

amends' under the public law for the wrong done due to

breach of public duty, of not protecting the fundamental

rights of the citizen. The compensation is in the nature of

`exemplary damages' awarded against the wrongdoer for the

breach of its public law duty and is independent of the

rights available to the aggrieved party to claim

compensation under the private law in an action based on

tort, through a suit instituted in a court of competent

jurisdiction or/and prosecute the offender under the penal

law.

35. This Court and the High Courts, being the

protectors of the civil liberties of the citizen, have not

only the power and jurisdiction but also an obligation to

grant relief in exercise of its jurisdiction under Articles

32 and 226 of the Constitution to the victim or the heir of

the victim whose fundamental rights under Article 21 of the

Constitution of India are established to have been

flagrantly infringed by calling upon the State to repair the

damage done by its officers to the fundamental rights of the

citizen, notwithstanding the right of the citizen to the

remedy by way of a civil suit or criminal proceedings. The

State, of course has the right to be indemnified by and take

such action as may be available to it against the wrongdoer

in accordance with law - through appropriate proceedings.

Of course, relief in exercise of the power under Article 32

or 226 would be granted only once it is established that

there has been an infringement of the fundamental rights of

the citizen and no other form of appropriate redressal by

the court in the facts and circumstances of the case, is

possible. The decisions of this Court in the line of cases

starting with Rudul Sah vs. State of Bihar granted monetary

relief to the victims for deprivation of their fundamental

rights in proceedings through petitions filed under Article

32 or 226 of the Constitution of India, notwithstanding the

rights available under the civil law to the aggrieved party

where the courts found that grant of such relief was

warranted. It is a sound policy to punish the wrongdoer and

it is in that spirit that the courts have moulded the relief

by granting compensation to the victims in exercise of their

writ jurisdiction. In doing so the courts take into account

not only the interest of the applicant and the respondent

but also the interests of the public as a whole with a view

to ensure that public bodies or officials do not act

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unlawfully and do perform their public duties properly

particularly where the fundamental right of a citizen under

Article 21 is concerned. Law is in the process of

development and the process necessitates developing separate

public law procedures as also public law principles. It may

be necessary to identify the situations to which separate

proceedings and principles apply and the courts have to act

firmly but with certain amount of circumspection and self-

restraint, lest proceedings under Article 32 or 226 are

misused as a disguised substitute for civil action in

private law."

This is a classic exposition of the realm of Public

Law by (Dr.) Justice Anand (as His Lordship then was), who

has added a note of caution that while exercising this

jurisdiction, the Courts have to act firmly but with self-

restraint lest the jurisdiction is abused as a disguise for

civil action under Private Law.

Mr. K.Parasaran then contended that in all the cases

referred to earlier, this Court had granted damages to the

petitioner as the Fundamental Right to life under Article 21

of the Constitution was found to have been violated. To

that extent, the Court, according to him, can grant damages

even in proceedings under Article 32 of the Constitution but

where Right to Life is not involved, the petitioner would

have to file a suit for damages in the Civil Court under

private law jurisdiction and cannot take recourse to

proceedings under public law either in the High Court under

Article 226 or in this Court under Article 32. He contended

that interim compensation may be granted by the Court under

Article 32 as immediate relief and the whole matter may be

referred to the Civil Court for determination of the amount

of compensation or damages payable to the petitioner or the

petitioner may be directed to approach the Civil Court.

This proposition cannot be accepted.

In M.C. Mehta & Anr. vs. Union of India & Ors.,

(1987) 1 SCC 395, this Court observed as under:-

"7. We are also of the view that this Court under

Article 32(1) is free to devise any procedure appropriate

for the particular purpose of the proceeding, namely,

enforcement of a fundamental right and under Article 32(2)

of the court has the implicit power to issue whatever

direction, order or writ is necessary in a given case,

including all incidental or ancillary power necessary to

secure enforcement of the fundamental right. The power of

the court is not only injunctive in ambit, that is,

preventing the infringement of a fundamental right, but it

is also remedial in scope and provides relief against a

breach of the fundamental right already committed vide

Bandhua Mukti Morcha case. If the court were powerless to

issue any direction, order or writ in cases where a

fundamental right has already been violated, Article 32

would be robbed of all its efficacy, because then the

situatiuon would be that if a fundamental right is

threatened to be violated, the court can injunct such

violation but if the violator is quick enough to take action

infringing the fundamental right, he would escape from the

net of Article 32. That would, to a large extent,

emasculate the fundamental right guaranteed under Article 32

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and render it impotent and futile. We must, therefore, hold

that Article 32 is not powerless to assist a person when he

finds that his fundamental right has been violated. He can

in that event seek remedial assistance under Article 32.

The power of the court to grant such remedial relief may

include the power to award compensation in appropriate

cases. We are deliberately using the words "in appropriate

cases" because we must make it clear that it is not in every

case where there is a breach of a fundamental right

committed by the violator that compensation would be awarded

by the court in a petition under Article 32. The

infringement of the fundamental right must be gross and

patent, that is, incontrovertible and ex facie glaring and

either such infringement should be on a large scale

affecting the fundamental rights of a large number of

persons, or it should appear unjust or unduly harsh or

oppressive on account of their poverty or disability or

socially or economically disadvantaged position to require

the person or persons affected by such infringement to

initiate and pursue action in the civil courts. Ordinarily,

of course, a petition under Article 32 should not be used as

a substitute for enforcement of the right to claim

compensation for infringement of a fundamental right through

the ordinary process of civil court. It is only in

exceptional cases of the nature indicated by us above, that

compensation may be awarded in a petition under Article 32.

This is the principle on which this Court awarded

compensation in Rudul Shah v. State of Bihar. So also,

this Court awarded compensation to Bhim Singh, whose

fundamental right to personal liberty was grossly violated

by the State of Jammu and Kashmir. If we make a fact

analysis of the cases where compensation has been awarded by

this Court, we will find that in all the cases, the fact of

infringement was patent and inconvertible, the violation was

gross and its magnitude was such as to shock the conscience

of the court and it would have been gravely unjust to the

person whose fundamental right was violated, to require him

to go to the civil court for claiming compensation."

Thus, where public functionaries are involved and

matter relates to the violation of Fundamental Rights or the

enforcement of public duties etc., the remedy would lie, at

the option of the petitioner, under the public law

notwithstanding that damages are also claimed in those

proceedings.

The decisions relied upon by Mr. Parasaran, namely,

P. Rathinam vs. Union of India & Ors.(1989) Supp. 2 SCC

716 and In Re: Death of Sawinder Singh Grover (1995) Supp.

4 SCC 450, cannot be pressed in aid as in the earlier case,

criminal trial was pending while in the latter case the

matter had not been finally investigated.

In view of the natural affinity with the British legal

system, particularly as both the learned counsel have

referred to and relied upon the cases relating to public law

decided by the Courts in England, we may consider the

question from that angle and in that light.

In England, the position is not much different. In

1977, when certain procedural changes were brought about on

the recommendations of the Law Commission and Order 53 was

introduced, it became possible for a litigant to make an

application for judicial review and claim, in such

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application, damages also against public bodies. Under the

remedy of judicial review, it is possible to review not only

the merits of the decision in respect of which the

application for judicial review is made, but the whole

decision-making process also. A decision of inferior court

or a public authority could be quashed by an order of

Certiorari made on an application for judicial review where

that court or authority acted without jurisdiction or

exceeded its jurisdiction or failed to comply with the rules

of natural justice or where there was an error of law

apparent on the face of the record or the decision was

unreasonable in the Wednesbury sense (that is, no reasonable

person could have come to the conclusion to which the public

authority had arrived at). In view of the Supreme Court

Act, 1981, read with Order 53, it became possible for the

High Courts to grant prerogative orders for mandamus or

Prohibition and Certiorari in those classes of cases in

which it had power to do so immediately before the passing

of that Act and by virtue of Order 53, the court also got a

power even in judicial review proceedings, to grant

declaration and injunctions and to award damages.

If the proceedings were directed to challenge the

decision of a public law nature, and were not initiated for

enforcement of private rights, an application for judicial

review was the only permissible course. It may be pointed

out that one of the restrictions on the making of an

application for judicial review is that the person has to

disclose "sufficient interest" and obtain leave of the

court. The Supreme Court Act, 1981, read with Order 53,

Rule 3, indicates that no application for judicial review

can be made (either in a civil or criminal case) unless the

leave to apply for judicial review has been obtained. The

purpose of this requirement is to eliminate frivolous,

vexatious or hopeless application for judicial review and to

ensure that an applicant is allowed substantive hearing only

if the court is satisfied that there is a case fit for

further investigation. As pointed out earlier, the person

applying for judicial review has to disclose that he has a

"sufficient interest" in the matter to which the application

relates. This is what is provided by Section 31(3) of the

Supreme Court Act, 1981 and Order 53 Rule 3(7).

In R. v. Horsham Justices 1982 QB 762 = 1982 (2) All

ERs 269, a newspaper reporter and the National Union of

Journalists were held to have locus standi to apply for

judicial review to quash the order of Magistrate made under

the Contempt of Courts Act, 1961 prohibiting the publication

of any report of committal proceedings until the

commencement of the trial.

At some stage, particularly between the 1920s and

1960s, it was thought that prerogative orders of Certiorari,

Prohibition and Mandamus only lay against persons or bodies

with judicial or quasi judicial functions and did not apply

to an Authority exercising administrative powers. But this

distinction between judicial and administrative activities

was obliterated by the decision of the House of Lords in

Ridge v. Baldwin 1964 AC 40 = 1963 (2) All ERs 66. The

effect of this decision is that the judicial review lies not

only against an inferior court or tribunal, but also against

persons or bodies which perform public duties or functions.

Thus, judicial review would lie against persons and

bodies carrying out public functions. But it would not lie

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against a person or body carrying out private law and not

public law functions. In such cases, the proper remedy is

by way of action for a declaration and, if necessary, an

injunction.

There is also a self-imposed restriction on the

exercise of power of judicial review which is to the effect

that the courts would not normally grant judicial review

where there is available another avenue of appeal or remedy.

In R. v. Epping & Harlow General Commissioners 1983 (3)

All ERs 257, the court observed :

"It is a cardinal principle that, save in the most

exceptional circumstances, the jurisdiction to grant

judicial review will not be exercised where other remedies

are available and have not been used."

On an application for judicial review, the Court has

power to award damages to the applicant provided the claim

for damages has been included in the statement made in

support of the application for leave to apply for judicial

review. But the relief for damages can be granted only when

the court is satisfied that if the claim had been made in an

action initiated by the applicant, he could have been

awarded damages. [Rule 7(1) of Order 53]. The application

for judicial review, if not made at the earliest, is liable

to be dismissed for delay and laches.

There is, therefore, not much of a difference between

the powers of the court exercised here in this country under

Article 32 or 226 and those exercised in England for

judicial Review. Public law remedies are available in both

the countries and the courts can award damages against

public authorities to compensate for the loss or injury

caused to the plaintiff/petitioner, provided the case

involves, in this country, the violation of fundamental

rights by the Govt. or other public authorities or that

their action was wholly arbitrary or oppressive in violation

of Article 14 or in breach of statutory duty and is not a

purely private matter directed against a private individual.

Mr. Parasaran next contended that allotment of Petrol

outlets by the petitioner would, in law, be treated as "act

of the State" or "Sovereign act" and, therefore, it would be

immune from civil or criminal action including action in

Tort. This submission is also liable to be rejected.

The liability of the King under the British Law for

tortious acts of the servants can be assessed from a passage

from Rattan Lal's "Law of Torts", 23rd Edition, as under:-

"He (The King) is not liable to be sued civilly or

criminally for a supposed wrong. That which the sovereign

does personally, the law presumes will not be wrong; that

which the sovereign does by command to his servants, cannot

be a wrong in the sovereign because, if the command is

unlawful, it is in law no command, and the servant is

responsible for the unlawful act, the same as if there had

been no command. (See: Tobin v. The Queen (1864) 16 CB

[N.S.] 310). So the Crown was not liable in tort at common

law for wrongs committed by its servants in the course of

employment not even for wrongs expressly authorised by it.

(See: Canterbury (Viscount) A.H. General (1842) 1 Ph 306;

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High Commr. for India & Pakistan v. Lall, (1948) 40 Bom LR

649 = AIR 1948 PC 121 = 75 IA 225). Even the heads of the

department or superior officers could not be sued for torts

committed by their subordinates unless expressly authorised

by them (See: Raleigh v. Goschen (1898) 1 Ch.73); only

the actual wrongdoer could be sued in his personal capacity.

In practice, the action against the officer concerned was

defended by the Treasury Solicitor and the judgment was

satisfied by the Treasury as a matter of grace. Difficulty

was, however, felt when the wrongdoer was not identifiable.

(See: Royster v. Cavey (1947) KB 204). The increased

activities of the Crown have now made it the largest

employer of men and the largest occupier of property. The

above system was, therefore, proving wholly inadequate and

the law needed a change which was brought about by the Crown

Proceedings Act, 1947. (See: Home Office v. Dorset Yacht

Co. (1970) AC 1004 = (1970) 2 All ER 294 [HL]). Nothing in

the Act authorises proceedings in tort against the Crown in

its private capacity (s.40), or affects powers or

authorities exercisable by virtue of the prerogative of the

Crown or conferred upon the Crown by statute (s.11[1]).

Subject to this, the Act provides that the Crown shall be

subject to all those liabilities in tort to which, if it

were a person of full age and capacity, it would be subject

(1) in respect of torts committed by its servants or agents,

provided that the act or omission of the servant or agent

would, apart from the Act, have given rise to a cause of

action in tort against that servant or agent or against his

estate; (2) in respect of any breach of those duties which

a person owes to his servants or agents at common law by

reason of being their employer; (3) in respect of any

breach of the duties attaching at common law to the

ownership, occupation, possession or control of property.

Liability in tort also extends to breach by the Crown of a

statutory duty. It is also no defence for the Crown that

the tort was committed by its servants in the course of

performing or purporting to perform functions entrusted to

them by any rule of the common law or by statute. The law

as to indemnity and contribution as between joint

tort-feasors shall be enforceable by or against the Crown

and the Law Reform (Contributory Negligence) Act, 1945 binds

the Crown. Although the Crown Proceedings Act preserves the

immunity of the Sovereign in person and contains savings in

respect of the Crown's prerogative and statutory powers, the

effect of the Act in other respects, speaking generally, is

to abolish the immunity of the Crown in tort and to equate

the Crown with a private citizen in matters of tortious

liability."

From the above, it would be seen that the Crown in

England does not enjoy absolute immunity and may be held

vicariously liable for the tortious acts of his officers and

servants.

The maxim that the "King can do no wrong" on the basis

of which Common Law rule that "Crown was not answerable for

the torts committed by its servants" was generated, has not

been applied here in this country.

India at one time was under the Sovereignty of East

India Company which had two-fold character. They had powers

to carry on trade as merchants. This was their basic

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character. They had an additional character. They had been

delegated by the British Crown powers to acquire, retain and

govern territories, to raise and maintain armies and to make

peace and war with native States. East India Company was

subsequently taken over by the Crown and Govt. of India

Act, 1858 was passed by the British Parliament. Section 68

of the Act allowed the Secretary of the State in Council to

sue or be sued marking a departure from the common law rule

that no proceedings, civil or criminal, could be filed

against the Crown.

In spite of the above provision, the Supreme Court of

Calcutta in The Peninsular & Oriental Steamship Navigation

Co. vs. The Secretary of State for India 1868-69 Bombay

H.C. Reports Vol. V. Appendix-A P.1 held that the rule of

immunity was applied by drawing a distinction by the acts

done by the public servants in the delegated exercise of

sovereign powers and acts done by them in the conduct of

other activities. Peacock, CJ, who delivered the judgment

observed :

"It is clear that the East India Company would not

have been liable for any act done by any of its officers or

soldiers in carrying on hostilities, or for the act of any

of its naval officers in seizing as prize property of a

subject, under the supposition that it was the property of

an enemey, nor for any act done by a military or naval

officer or by any soldier or sailor, whilst engaged in

military or naval duty, nor for any acts of any of its

officers or servants in the exercise of judicial functions."

This decision was followed by the Calcutta High Court

in Nobin Chunder Dey v. Secretary of State for India ILR

(1875-76) 1 Cal. 11, but the Madras High Court in Secretary

of State for Indian Council vs. Hari Bhanji & Anr. ILR

(1882) 5 Mad. 273 and the Bombay High Court in P.V. Rao

vs. Khushaldas S. Advani (1949) 51 Bombay Law Reporter 342

= AIR 1949 Bombay 277 did not follow the decision. The

decision of the Bombay High Court was subsequently approved

by this Court in Province of Bombay vs. K.S. Advani 1950

SCR 621 = AIR 1950 SC 222 and it was clearly laid down that

the Govt. would also be liable for Torts committed in

exercise of Sovereign powers except when the act complained

of amounted to an act of State.

Govt. of India Act, 1858 was replaced by the Govt.

of India Act, 1915 and the provisions contained in Section

65 of 1858 Act were retained in Section 32 of the 1915 Act.

This Act was subsequently replaced by the Govt. of India

Act, 1935 and in this Act the corresponding provision was

made in Section 176(1). This provision was continued in the

Constitution by Article 300 (1) which reads as under :

"The Government of India may sue or be sued by the

name of the Union of India and the Government of a State may

sue or be sued by the name of the State and may, subject to

any provisions which may be made by an Act of Parliament or

of the legislature of such State enacted by virtue of powers

conferred by this Constitution, sue or be sued in relation

to their respective affairs in the like cases as the

Dominion of India and the corresponding Provinces or the

corresponding Indian States might have sued or been sued if

this Constitution had not been enacted."

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The decision of this Court in Province of Bombay vs.

K.S. Advani (supra) was followed by the First Report of the

Law Commission of India in 1956 which accepted the view of

this Court and recommended as under :

"In the context of a welfare State it is necessary to

establish a just relation between the rights of the

individual and the responsibilities of the State. While the

responsibilities of the State have increased, the increase

in its activities has led to a greater impact on the

citizen. For the estabishment of a just economic order

industries are nationalised. Public utilities are taken

over by the State. The State has launched huge irrigation

and flood control schemes. The production of electricity

has practically become a Government concern. The State has

established and intends to establish big factories and

manage them. The State carries on works departmentally.

The doctrine of laissez faire - which leaves every one to

look after himself to his best advantage has yielded place

to the ideal of a welfare State - which implies that the

State takes care of those who are unable to help

themselves."

The Commission after referring to various provisions

in the legislation of other countries also observed:

"The old distinction between sovereign and

non-sovereign functions or governmental and non-governmental

functions should no longer be invoked to determine the

liability of the State. As Professor Friendman observes:

'It is now increasingly necessary to abandon the

lingering fiction of a legally indivisible State, and of a

feudal conception of the Crown, and to substitute for it the

principle of legal liability where the State, either

directly or through incorporated public authorities engages

in activities of a commercial, industrial or managerial

character. The proper test is not an impracticable

distinction between governmental and non-governmental

functions, but the nature and form of the activitiy in

question.'

In State of Rajasthan vs. Mst. Vidhyawati AIR 1962

SC 933, a claim for damages was made by the dependants of a

person who died in an accident caused by the negligence of

the driver of a jeep maintained by the Govt. for official

use of the Collector of Udaipur while it was being brought

back from the workshop after repairs. The Rajasthan High

Court held that the State was liable. This view was upheld

by this Court with the observation that :

"The immunity of the Crown in the United Kingdom was

based on the old feudalistic notions of justice, namely,

that the King was incapable of doing a wrong, and,

therefore, of authorising or instigating one, and that he

could not be sued in his own courts. In India, ever since

the time of the East India Company, the Sovereign has been

held liable to be sued in tort or in contract and the common

law immunity never operated in India. Now that we have, by

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our Constitution, established a Republican form of

Government, and one of the objectives is to establish a

socialistic State with its varied industrial and other

activities, employing a large army of servants, there is no

justification, in principle or in public interest, that the

State should not be held liable vicariously for the tortious

act of its servant."

The course of justice, insofar as the tortious

liability of the State is concerned, was disturbed by the

decision of this Court in Kasturi Lal Ralia Ram Jain vs.

State of U.P. AIR 1965 SC 1039 = 1965 (1) SCR 375, in which

a partner of Kasturilal Ralia Ram Jain, a firm of jewellers

of Amritsar, had gone to Meerut for selling gold and silver,

but was taken into custody by the police on the suspicion of

possessing stolen property. He was released the next day,

but the property which was recovered from his possession

could not be returned to him in its entirity inasmuch as the

silver was returned but the gold could not be returned as

the Head Constable in charge of the Malkhana misappropriated

it and fled to Pakistan. The firm filed a suit against the

State of U.P. for the return of the ornaments and in the

alternative for compensation. This Court, speaking through

Gajendragadkar, CJ, observed as under :

"The act of negligence was committed by police

officers while dealing with the property of Ralia Ram which

they had seized in the exercise of their statutory powers.

Now, the power to arrest a person, to search him, and to

seize property found with him, are powers conferred on the

specified officers by statute and in the last analysis, they

are powers which can be properly characterised as sovereign

powers, and so, there is no difficulty in holding that the

act which gave rise to the present claim for damages has

been committed by the employees of the respondent during the

course of their employment; but the employment in question

being of the category which can claim the special

characteristic of sovereign power, the claim cannot be

sustained."

The earlier decision of this Court in Mst.

Vidyavati's case (supra) was distinguished on the ground

that it was based on a tortious liability not arising from

the exercise of Sovereign power. The decision in

Kasturilal's case (supra), has, apart from being criticised

(See: Constitutional Law of India by Seervai), not been

followed by this Court in subsequent decisions and,

therefore, much of its efficacy as a binding precedent has

been eroded. Reference in this connection may be made to

the decisions of this Court in State of Gujarat vs. Memon

Mahomed Haji Hasan AIR 1967 SC 1885 and Smt. Basava Kom

Dyamogouda Patil vs. State of Mysore AIR 1977 SC 1749 and a

number of other cases, including those dealt with under

Article 32 of the Constitution by this Court in all of which

compensation and damages were awarded to the petitioner for

tortious liability of the servants of the State. These

cases, namely, Rudul Shah vs. State of Bihar (supra); Bhim

Singh vs. State of J&K (supra), SAHELI, a Woman's Resources

Centre vs. Commr. of Police, Delhi (supra); People's

Union of Democratic Rights vs. Police Commissioner, Delhi

(supra) and Sebastin M. Hongray vs. Union of India (1984)

3 SCC 82 = AIR 1984 SC 1026, do not refer to the decision of

this Court in Kasturilal's case (supra). It may be

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mentioned that in Kasturilal's case, the Court did not

consider the State liability for violation of Fundamental

Rights of a citizen relating to Life and Personal Liberty.

It will be seen that where on account of tortious act of the

servant of a State, a person's Fundamental Right to Life and

Liberty was violated, the Court granted damages and

compensation to that person. The liability is based on the

provisions of the Constitution and is a new liability which

is not hedged in by any limitations including the doctrine

of `Soverign immunity'. Reference may also be made to the

decision of Privy Council in Maharaj vs. Attorney General

of Trinidad & Tobago (No.2) (1978) 2 All ER 670 in which the

appellant, who was a Barrister, was sentenced to 7 days'

imprisonment by a Judge of the High Court, which was set

aside by the Privy Council in appeal. The appellant, in the

meantime, applied for redress under Section 6 of the

Constitution of Trinidad & Tobago on the ground that he was

deprived of his liberty without due process of law as

guaranteed to him under Section 1 of that Constitution. The

claim was dismissed by the High Court, but was upheld by the

Privy Council in appeal. The Privy Council held that

Section 6 of the Constitution impliedly allowed the High

Court to award compensation as compensation may be the only

practicable form of redress in some cases.

The entire case law was reviewed by R.M. Sahai, J.

in his illuminating judgment in N. Nagendra Rao & Co. vs.

State of A.P. AIR 1994 SC 2663 = (1994) 6 SCC 205 in which

the case of Neelabati Behera (supra) was followed and it was

observed, inter alia, as under :

"But there the immunity ends. No civilised system can

permit an executive to play with the people of its country

and claim that it is entitled to act in any manner as it is

sovereign. The concept of public interest has changed with

structural change in the society. No legal or political

system today can place the State above law as it is unjust

and unfair for a citizen to be deprived of his property

illegally by negligent act of officers of the State without

any remedy. From sincerity, efficiency and dignity of State

as a juristic person, propounded in Nineteenth Century as

sound sociological basis for State immunity the circle has

gone round and the emphasis now is more on liberty, equality

and the rule of law. The modern social thinking of

progressive societies and the judicial approach is to do

away with archaic State protection and place the State or

the Government at par with any other juristic legal entity.

Any watertight compartmentalisation of the functions of the

State as "sovereign and non-sovereign or "governmental or

non-governmental" is not sound. It is contrary to modern

jurisprudential thinking. The need of the State to have

extraordinary powers cannot be doubted. But with the

conceptual change of statutory power being statutory duty

for sake of society and the people the claim of a common man

or ordinary citizen cannot be thrown out merely because it

was done by an officer of the State even though it was

against law and negligently. Needs of the State, duty of

its officials and right of the citizens are required to be

reconciled so that the rule of law in a welfare State is not

shaken. Even in America where this doctrine of sovereignty

found it place either because of the 'financial instability

of the infant American States rather than to the stability

of the doctrine theoretical foundation,' or because of

'logical and practical ground,' or that 'there could be no

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legal right as against the State which made the law'

gradually gave way to the movement from, 'State

irresponsibility to State responsibility.' In welfare State,

functions of the state are not only defence of the country

or administration of justice or maintaining law and order

but it extends to regulating and controlling the activities

of people in almost every sphere, educational, commercial,

social, economic, political and even marital. The

demarcating line between sovereign and non-sovereign powers

for which no rational basis survives, has largely

disappeared. Therefore, barring functions such as

administration of justice, maintenance of law and order and

repression of crime etc. which are among the primary and

inalienable functions of a constitutional Government, the

State cannot claim any immunity."

Reference may also be made to the decision of this

Court in Shyam Sunder vs. State of Rajasthan (1974) 1 SCC

690 = AIR 1974 SC 890 in which a truck belonging to Public

Works Department was engaged in famine relief work when an

accident occurred because of the negligence of the driver.

When the State was sued for compensation, the defence raised

was of immunity on account of Sovereign function of the

State. The plea was rejected by this Court which observed

that famine relief work was not a Sovereign function of the

State as traditionally understood. What are traditional

Sovereign functions of the State was considered by this

Court in State of Bombay vs. Hospital Mazdoor Sabha AIR

1960 SC 610 and Corporation of the City of Nagpur vs.

Employees Fulsing Mistry N.H. Majumdar AIR 1960 SC 675 =

(1960) 2 SCR 942 and in both these decisions, observations

of Lord Watson in Richard Coomber vs. The Justices of the

County Berks (1883-84) 9 AC 61 that traditional Sovereign

functions were the making of laws, the administration of

justice, the maintenance of order, the repression of crime,

carrying on of war, the making of treaties of peace and

other consequential functions, were approved.

For the reasons stated above, we are of the view that

the allotment of petrol outlets by the petitioner cannot be

treated as "act of the State" and the rule of immunity

invoked by Mr. Parasaran cannot be accepted. The next

submission of Mr. Parasaran relates to the tort of

misfeasance in public office which has been held to have

been committed by the petitioner and for which he has been

directed to pay Rs.50 lakhs as exemplary damages. It is

contended by Mr.Parasaran that the ingredients of the tort

of misfeasance in public office were not made out; the rule

of exemplary damages was not properly invoked; and in any

case, the amount of Rs.50 lakhs was arbitrarily fixed

without there being any rational basis on which it was

computed. It was also contended that the persons who

suffered injury on account of tort of misfeasance are

neither identifiable nor have they been specified and in the

absence of this vital factor, no finding could have been

recorded about the commission of tort of misfeasance. With

regard to award of exemplary damages of Rs.50 lakhs, it is

contended that in public law proceedings, namely, in

proceedings under Article 32 of the Constitution,

compensation and damages are awardable only against the

State for violation of Fundamental Rights of a citizen or

person by the servant of the State or for the tortious acts

of the servant of the State resulting in violation of

Fundamental Rights, but compensation or damages cannot be

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allowed in favour of the State. It is also contended that

the petitioner at the relevant time was the Minister of

State for Petroleum in the Central Cabinet and, therefore,

the order, directing him to pay Rs.50 lakhs as exemplary

damages to the State is an order to the Govt. to pay

exemplary damages to itself which is not possible under any

system of law and, therefore, wholly erroneous.

It is contended that the error being apparent on the

face of the record, the judgment requires to be reviewed.

We would first consider the meaning and contents of

the Tort of Misfeasance in the public office.

`Tort' has been derived from the Latin word "tortus"

which means "twisted" or "crooked". In its original and

most general sense, "tort" is a wrong. Jowitt's Dictionary

of English Law defines Tort as under :

"Tort signifies an act which gives rise to a right of

action, being a wrongful act or injury consisting in the

infringement of a right created otherwise than by a

contract. Torts are divisible into three classes, according

as they consist in the infringement of a jus in rem, or in

the breach of a duty imposed by law on a person towards

another person, or in the breach of a duty imposed by law on

a person towards the public.

The first class includes (a) torts to the body of a

person, such as assault, or to his reputation, such as

libel, or to his liberty, such as false imprisonment; (b)

torts to real property, such as ouster, trespass, nuisance,

waste, subtraction, disturbance; (c) torts to personal

property, consisting (i) in the unlawful taking or detaining

of or damage to corporeal personal property or chattels; or

(ii) in the infringement of a patent, trade mark, copyright,

etc.; (d) slander of title; (e) deprivation of service and

consortium.

The second class includes deceit and negligence in the

discharge of a private duty.

The third class includes those cases in which special

damage is caused to an individual by the breach of a duty to

the public." Winfield's classic definition provides as

under:-

"Tortious liability arises from the breach of a duty

primarily fixed by the law; such duty is towards persons

generally and its breach is redressible by an action for

unliquidated damages."

Apart from tort which may be committed by a private

individual, the officers of the Govt. would also be liable

in damages for their wrongful acts provided the act does not

fall within the purview of "act of the State." So also, the

administrative bodies or authorities, which deal in

administrative matters and take decisions specially for the

implementation of the Govt. policies, have to act fairly

and objectively and may in some cases also be required to

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follow the principles of natural justice. It is the basic

principle of Administrative Law that if the authorities are

conferred certain power, then that power must be exercised

in good faith and the administrative decision must be made

after taking into account all matters relevant for the

exercise of that power. The authority must not be

influenced by irrelevant matters and if the order is likely

to prejudicially affect the rights, or, even the reasonable

expectation of a person, the principles of natural justice

must be followed and the person likely to be affected must

be given an opportunity of hearing. Thus, the decision of

an administrative authority can be challenged on the

grounds, inter alia, of illegality, irrationality and

procedural impropriety.

In Administrative Law by Sir William Wade, 7th Edn.,

"misfeasasnce in public office" has been defined as

malicious abuse of power, deliberate mal-administration and

unlawful acts causing injury. It is further provided in the

same book that "misfeasance in public office" is the name

now given to the tort of deliberate abuse of power. After

considering various decided cases, Prof. Wade proceeds to

say :

"This and other authorities, including the

last-mentioned decision of the House of Lords, were held to

establish that the tort of misfeasance in public office goes

at least to the length of imposing liability on a public

officer who does an act which to his knowledge amounts to an

abuse of his office and which causes damage."

(Emphasis supplied)

Prof. Wade further proceeds to say as under:

"There are now clear indications that the courts will

not award damages against public authorities merely because

they have made some order which turns out to be ultra vires,

unless there is malice or conscious abuse. Where an

Australian local authority had passed resolutions

restricting building on a particular site without giving

notice and fair hearing to the landowner and also in

conflict with the planning ordinance, the Privy Council

rejected the owner's claim for damages for depreciation of

his land in the interval before the resolutions were held to

be invalid. The well-established tort of misfeasance by a

public officer, it was held, required as a necessary element

either malice or knowledge by the council of the invalidity

of its resolutions. In New Zealand, also a company failed

in a claim for damages resulting from a minister's refusal

of permission for it to obtain finance from a Japanese

concern. The minister's refusal was quashed as ultra vires,

but it was held that this alone was not a cause of action.

Nor does it appear that claims of this kind can be

strengthened by pleading breach of statutory duty.

The Court of Appeal reinforced these decisions in a

case of importance, but since shown to be of doubtful

authority, under European Community law. A ministerial

revocation order had prohibited the import of turkey meat

from France and was held unlawful by the European Court as

being in breach of Article 30 of the Treaty of Rome, which

is binding in British law under the European Communities Act

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1972. French traders who had suffered losses under the ban

then sued the ministry for damages. On preliminary issues

it was held that they had no cause of action merely for

breach of statutory duty, as already related. Likewise

there was no cause of action merely because the minister's

order was unlawful: it could be quashed or declared

unlawful on judicial review, but there was no remedy in

damages. There would be such a remedy, however, if it could

be shown that the minister had abused his power, well

knowing that his order was a breach of Article 30 and would

injure the plaintiffs' business. It was alleged that his

conscious purpose was to protect English turkey producers

rather than to prevent the spread of disease, and that he

knew that this made his order unlawful. The element of bad

faith, or malic as judges have often called it, seems now to

be established as the decisive factor."

(Emphasis supplied)

Thereafter, after discussing a number of authorities,

Prof. Wade further says as under :

"But the main principles of liability seem now to be

emerging clearly. It can be said that administrative action

which is ultra vires but not actionable merely as a breach

of duty will found an action for damages in any of the

following situations:

1. if it involves the commission of a recognised tort

such as trespass, false imprisonment or negligence;

2. if it is actuated by malice, e.g. personal spite

or a desire to injure for improper reasons;

3. if the authority knows that it does not possess

the power to take the action in question.

The decisions suggest that there is unlikely to be

liability in the absence of all these elements, for example

where a licensing authority cancels a licence in good faith

but invalidly, perhaps in breach of natural justice or for

irrelevant reasons. Since loss of livelihood by

cancellation of a licence is just as serious an injury as

many forms of trespass or other torts, it may seem illogical

and unjust that it should not be equally actionable; and in

obiter dicta in a dissenting judgment Denning LJ once

suggested that it was. Some cases of this kind may involve

breach of statutory duty, where there is the broad principle

of liability discussed above. But where there is no such

breach it seems probable that public authorities and their

officers will be held to be free from liability so long as

they exercise their discretionary powers in good faith and

with reasonable care. Losses caused by bona fide but

mistaken acts of government may have to be suffered just as

much when they are invalid as when they are valid."

Halsbury's Laws of England, Vol I(I) 4th Edn.

(Reissue), (para 203) provides as under :

"Deliberate abuse of public office or authority. Bad

faith on the part of a public officer or authority will

result in civil liability where the act would constitute a

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tort but for the presence of statutory authorisation, as

Parliament intends statutory powers to be exercised in good

faith and for the purpose for which they were conferred.

Proof of improper motive is necessary in respect of certain

torts and may negative a defence of qualified privilege in

respect of defamation, but this is not peculiar to public

authorities. There exists an independent tort of

misfeasance by a public officer or authority which consists

in the infliction of loss by the deliberate abuse of a

statutory power, or by the usurpation of a power which the

officer or authority knows he does not possess, for example

by procuring the making of a compulsory purchase order, or

by refusing, or cancelling or procuring the cancellation of

a licence, from improper motives. However, where there has

been no misfeasance, the fact that a public officer or

authority makes an ultra vires order or invalidly exercises

statutory powers will not of itself found an action for

damages."

de Smith in Judicial Review of Administrative Action,

while speaking of tort of misfeasance in public office, says

as under :

"A public authority or person holding a public office

may be liable for the tort of misfeasance in public office

where :

(1) there is an exercise or non-exercise of public

power, whether common law, statutory or from some other

source;

(2) which is either (a) affected by malice towards the

plaintiff or (b) the decision maker knows is unlawful; and

(3) the plaintiff is in consequence deprived of a

benefit or suffers other loss."

de Smith further says as under :

"A power is exercised maliciously if its repository is

motivated by personal animosity towards those who are

directly affected by its exercise. Where misfeasance is

alleged against a decision-making body, it is sufficient to

show that a majority of its members present had made the

decision with the object of damaging the plaintiff. Often

there may be no direct evidence of the existence of malice,

and in these circumstances the court may make adverse

inferences, e.g. from the fact that a decision was

unreasonable that it could only be explained by the presence

of such a motive. A court will not entertain allegation of

bad faith or malice made against the repositry of a power

unless it has been expressly pleaded and properly

particularised."

Reference may also be made to the decision of the High

Court of Australia in Northern Territory vs. Mengel, (69)

The Australian Law Journal 527, in which it was observed as

under:-

"A number of elements must combine to make a purported

exercise of administrative power wrongful. The first is

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that the purported exercise of power must be invalid, either

because there is no power to be exercised or because a

purported exercise of the power has miscarried by reason of

some matter which warrants judicial review and a setting

aside of the administrative action. There can be no

tortious liability for an act or omission which is done or

made in valid exercise of a power. A valid exercise of

power by a public officer may inflict on another an

unintended but foreseeable loss - or even an intended loss -

but, if the exercise of the power is valid, the other's loss

is authorised by the law creating the power. In that case,

the conduct of the public officer does not infringe an

interest which the common law protects. However, a

purported exercise of power is not necessarily wrongful

because it is ultra vires. The history of the tort shows

that a public officer whose action has caused loss and who

has acted without power is not liable for the loss merely by

reason of an error in appreciating the power available.

Something further is required to render wrongful an act done

in purported exercise of power when the act is ultra vires."

With regard to the MENTAL ELEMENT, the High Court of

Australia stated as under:-

"The further requirement relates to the state of mind

of the public officer when the relevant act is done or the

omission is made. An early case is Ashby v. White, in

which Ashby complained that the constables of the borough in

which an election was held had refused to permit him to vote

"fraudulently and maliciously intending to damnify him".

Lord Holt CJ, whose judgment ultimately prevailed in the

House of Lords, held that malice was essential to the

action. Malice has been understood to mean an intention to

injure. In this context, the "injury" intended must be

something which the plaintiff would not or might not have

suffered if the power available to the public officer had

been validly exercised. (It is in that sense that I use the

term "injury" hereafter.) In more recent times, the scope of

the tort has not been limited to cases in which a public

officer has acted maliciously. It has now been accepted

that if a public officer engages in conduct in purported

exercise of a power but with actual knowledge that there is

no power to engage in that conduct, the conduct may amount

to an abuse of office."

The High Court further observed as under:-

"I respectfully agree that the mental element is

satisfied either by malice (in the sense stated) or by

knowledge. That is to say, the mental element is satisfied

when the public officer engages in the impugned conduct with

the intention of inflicting injury or with knowledge that

there is no power to engage in that conduct and that that

conduct is calculated to produce injury. These are states

of mind which are inconsistent with an honest attempt by a

public officer to perform the functions of the office.

Another state of mind which is inconsistent with an honest

attempt to perform the functions of a public office is

reckless indifference as to the availability of power to

support the impugned conduct and as to the injury which the

impugned conduct is calculated to produce. The state of

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mind relates to the character of the conduct in which the

public officer is engaged - whether it is within power and

whether it is calculated (that is, naturally adapted in the

circumstances) to produce injury. In my opinion, there is

no additional element which requires the identification of

the plaintiff as a member of a class to whom the public

officer owes a particular duty though the position of the

plaintiff may be relevant to the validity of the public

officer's conduct. For example, the officer's

administrative act may be invalid because he or she did not

treat the plaintiff with procedural fairness. It is the

absence of an honest attempt to perform the functions of the

office that constitutes the abuse of the office.

Misfeasance in public office consists of a purported

exercise of some power or authority by a public officer

otherwise than in an honest attempt to perform the functions

of his or her office whereby loss is caused to a plaintiff.

Malice, knowledge and reckless indifference are states of

mind that stamp on a purported but invalid exercise of power

the character of abuse of or misfeasance in public office.

If the impugned conduct then causes injury, the cause of

action is complete."

In Dunlop v. Woollahra Municipal Council (1981) 1 All

ER 1202 (PC), it was held that mere invalidity of the order

would not give rise to any liability for payment of damages

in an action in tort to the aggrieved party. It was,

however, held in the same case that if the action of the

authority is actuated by malice, it would amount to "tort of

misfeasance by a public officer." In Asoka Kumar David v.

M.A.M.M.Abdul Cader (1963) 1 WLR 834 (PC), it was held that

the tort of misfeasance will also be committed even in the

absence of malice if the public officer knew both that what

he was doing was invalid and that it will injure the

plaintiff. (See also : Bourgoin SA & Ors. vs. Ministry

of Agriculture Fisheries & Food (1985) 3 All ER 585 (CA).

In Jones v. Swansea City Council (1989) 3 All ER 162 (CA),

it was held that if the public officer acts with malice,

i.e., with an intent to injure and thereby damage results,

the liability would arise and the officer could be sued for

the tort of misfeasance in public office. The legal

propositions in that case were not dissented from by the

House of Lords, though the Court of Appeal's decision was

reversed on facts (See: Jones vs. Swansea City Council

(1990) 3 All ER 737 (HL).

In Three Rivers District Council and Ors. v. Bank of

England (No.3), (1996) 3 All ER 558, it was held that the

tort of "misfeasance in public office" was concerned with a

deliberate and dishonest wrongful abuse of the powers given

to a public officer and the purpose of the tort was to

provide compensation for those who suffered loss as a result

of improper abuse of power. The conclusions reached in that

case were:-

"Issue No.1

Misfeasance in public office

(1) The tort of misfeasance in public office is

concerned with a deliberate and dishonest wrongful abuse of

the powers given to a public officer. It is not to be

equated with torts based on an intention to injure,

although, as suggested by the majority in Northern Territory

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v Mengel (1995) 69 ALJR 527, it has some similarities to

them.

(2) Malice, in the sense of an intention to injure the

plaintiff or a person is a class of which the plaintiff is a

member, and knowledge by the officer both that he has no

power to do the act complained of and that the act will

probably injure the plaintiff or a person in a class of

which the plaintiff is a member are alternative, nor

cumulative, ingredients of the tort. To act with such

knowledge is to act in a sufficent sense maliciously: see

Mengel 69 ALJR 527 at 554 per Deane J.

(3) For the purposes of the requirement that the

officer knows that he has no power to do the act complained

of, it is sufficient that the officer has actual knowledge

that the act was unlawful or, in circumstances in which he

believes or suspects that the act is beyond his powers, that

he does not ascertain whether or not that is so or fails to

take such steps as would be taken by an honest and

reasonable man to ascertain the true position.

(4) For the purposes of the requirement that the

officer knows that his act will probably injure the

plaintiff or a person in a class of which the plaintiff is a

member it is sufficient if the officer has actual knowledge

that his act will probably damage the plaintiff or such a

person or, in circumstance in which he believes or suspects

that his act will probably damage the plaintiff or such a

person, if he does not ascertain whether that is so or not

or if he fails to make such inquiries as an honest and

reasonable man would make as to the probability of such

damage.

(5) If the states of mind in (3) and (4) do not amount

to actual knowledge, they amount to recklessness which is

sufficent to support liability under the second limb of the

tort.

(6) Where a plaintiff establishes (i) that the

defendant intended to injure the plaintiff or a person in a

class of which the plaintiff is a member (limb one) or that

the defendant knew that he had no power to do what he did

and that the plaintiff or a person in a class of which the

plaintiff is a member would probably suffer loss or damage

(limb two) and (ii) that the plaintiff has suffered loss as

a result, the plaintif has a sufficient right or interest to

maintain an action for misfeasance in public office at

common law. The plaintiff must of course also show that the

defendant was a public officer or entity and that his loss

was caused by the wrongful act."

So far as malice is concerned, while actual malice, if

proved, would render the defendant's action both ultra vires

and tortious, it would not be necessary to establish actual

malice in every claim for misfeasance in public office. In

Bourgoin SA vs. Ministry of Agriculture, Fisheries & Food,

(1985) 3 All ER 585 (CA) to which a reference has already

been made above, the plaintiffs were French turkey farmers

who had been banned by the Ministry from exporting turkeys

to England on the ground that they would spread disease.

The Ministry, however, subsequently conceded that the true

ground was to protect British turkey farmers and that they

had committed breach of Article 30 of the EEC Treaty which

prohibited unjustifiable import restrictions. The

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defendants denied their liability for misfeasance claiming

that they were not actuated by any intent to injure the

plaintiffs but by a need to protect British interest. It

was held by Mann, J., which was upheld by the Court of

Appeal, that proof of actual malice, ill-will or specific

intent to injure is not essential to the tort. It was

enough if the plaintiff established that the defendant acted

unlawfully in a manner foreseeably injurious to the

plaintiff. In another decision in Bennett v. Commr. of

Police of the Metropolis and others 1995 (2) All ER 1 (at

pages 13 & 14), which was considered in Three Rivers' case

(supra), it was held that the tort of misfeasance in public

office required express intent to injure.

Tort of misfeasance in public office was also

considered by this Court in Lucknow Development Authority

vs. M.K. Gupta (1994) 1 SCC 243. Relying upon the

Administrative Law by Prof. Wade, exemplary damages were

allowed to a consumer who had initiated proceedings under

the Consumer Protection Act, 1986. The Court held that the

officers of the Lucknow Development Authority were not

immune from tortious liability and then proceeded to say

that the National Consumer Disputes Redressal Commission was

not only entitled to award value of the goods or services

but also to compensate a consumer for injustice suffered by

him. The Court, therefore, upheld the award of Rs.10,000/-

as compensation allowed by the Commission on the ground that

the action of the appellant amounted to harassment, mental

torture and agony of the respondent. The Court then

proceeded to observe as under:-

"But when the sufferance is due to mala fide or

oppressive or capricious acts etc. of a public servant,

then the nature of liability changes. The Commission under

the Act could determine such amount if in its opinion the

consumer suffered injury due to what is called misfeasance

of the officers by the English Courts. Even in England

where award of exemplary or aggravated damages for insult

etc. to a person has now been held to be punitive,

exception has been carved out if the injury is due to

`oppressive, arbitrary or unconstitutional action by

servants of the Government' (Salmond and Heuston on the Law

of Torts). Misfeasance in public office is explained by

Wade in his book on Administrative Law thus :

"Even where there is no ministerial duty as above, and

even where no recognised tort such as trespass, nuisance, or

negligence is committed, public authorities or officers may

be liable in damages for malicious, deliberate or injurious

wrong-doing. There is thus a tort which has been called

misfeasance in public office, and which includes malicious

abuse of power, deliberate maladministration, and perhaps

also other unlawful acts causing injury."

(Emphasis supplied)

After quoting from Wade, the Court proceeded to

consider the question of award of exemplary damages in the

light of the decision in Cassell & Co. Ltd. v. Broome &

Anr. 1972 (1) All ER 801 as also the earlier decision in

Rookes v. Barnard 1964 (1) All ER 367 and other English

decision including Ashby v. White (1703)2 Ld Raym 938, and

held that exemplary damages could be awarded against the

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officers of the Lucknow Development Authority.

The decision in the Lucknow Development Authority's

case (supra) has been followed by this Court in the Judgment

under Review and a notice was issued to the petitioner to

show cause why should he not be made liable to pay damages

for his mala fide action in allotting petrol pumps to the

persons concerned. This notice was issued because the Court

was of the opinion:

"Public servants may be liable in damages for

malicious, deliberate or injurious wrongdoing. According to

Wade :

`There is, thus, a tort which has been called

misfeasance in public office and which includes malicious

abuse of power, deliberate maladministration, and perhaps

also other unlawful acts causing injury.'

With the change in socio-economic outlook, the public

servants are being entrusted with more and more

discretionary powers even in the field of distribution of

government wealth in various forms. We take it to be

perfectly clear, that if a public servant abuses his office

either by an act of omission or commission, and the

consequence of that is injury to an individual or loss of

public property, an action may be maintained against such

public servant. No public servant can say "you may set

aside an order on the ground of mala fide but you cannot

hold me personally liable." No public servant can arrogate

to himself the power to act in a manner which is arbitrary."

The order regarding notice to the petitioner was

preceded by the finding that :

"He made allotments in favour of relations of his

personal staff under the influence of the staff on wholly

extraneous considerations. The allotments to the sons of

the Ministers were only to oblige the Ministers. The

allotments to the members of the Oil Selection Boards and

their/chairmen's relations have been done to influence them

and to have favours from them. All these allotments are

wholly arbitrary, nepotistic and are motivated by extraneous

considerations."

The further finding is to the following effect :

"A Minister who is the executive head of the

department concerned distributes these benefits and

largesses. He is elected by the people and is elevated to a

position where he holds a trust on behalf of the people. He

has to deal with the people's property in a fair and just

manner. He cannot commit breach of the trust reposed in him

by the people. We have no hesitation in holding that Capt.

Satish Sharma in his capacity as a Minister for Petroleum

and Natural Gas deliberately acted in a wholly arbitrary and

unjust manner. We have no doubt in our mind that Capt.

Satish Sharma knew that the allottees were relations of his

personal staff, sons of Ministers, sons/relations of

Chairmen and members of the Oil Selection Boards and the

members of the Oil Selection Boards themselves. The

allotments made by him were wholly mala fide and as such

cannot be sustained."

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The Court further found as under :

"We are further of the view that Capt. Satish Sharma

acted in a wholly biased manner inasmuch as he unfairly

regarded with favour the cases of 15 allottees before him.

The relevant circumstances available from record and

discussed by us leave no manner of doubt in our mind that

Capt. Satish Sharma deliberately acted in a biased manner

to favour these allottees and as such the allotment orders

are wholly vitiated and are liable to be set aside."

The Court also found :

"The orders of the Minister reproduced above read:

"the applicant has no regular income to support herself and

her family", "the applicant is an educated lady and belongs

to Scheduled Tribe community", "the applicant is unemployed

and has no regular source of income", "the applicant is an

uneducated, unemployed Scheduled Tribe youth without regular

source of livelihood", "the applicant is a housewife whose

family is facing difficult financial circumstances" etc.etc.

There would be literally millions of people in the country

having these circumstances or worse. There is no

justification whatsoever to pick up these persons except

that they happen to have won the favour of the Minister on

mala fide considerations. None of these cases fall within

the categories placed before this Court in Centre for Public

Interest Litigation v. Union of India but even if we assume

for argument sake that these cases fall in some of those or

similar guidelines the exercise of discretion was wholly

arbitrary. Such a discretionary power which is capable of

being exercised arbitrarily is not permitted by Article 14

of the Constitution of India. While Article 14 permits a

reasonable classification having a rational nexus to the

objective sought to be achieved, it does not permit the

power to pick and choose arbitrarily out of several persons

falling in the same category."

In response to the notice issued by the Court, the

petitioner filed his reply in which he, inter alia, stated

as under :

"1. Captain Satish Sharma was Minister of State for

Petroleum from January 8,1993 to May 16, 1996. The

allotments of petrol pumps by the Minister from his

discretionary quota (that ultimately came to be challenged

in Writ Petition (Civil) No. 26 of 1995 on the basis of the

August 11, 1995 news item in the Indian Express) related to

the period 1993 to 1995.

2. It is submitted with utmost respect that the

finding of the malafides have been recorded in proceeding to

which I was not a party. These proceedings were defended by

the Central Government. In a non-adversarial manner by

placing all the facts before this Hon'ble Court and leaving

it to this Hon'ble Court to adjudicate on the validity of

the said actions. It is true that an opportunity to file an

affidavit was given to me, if I so desired. It is, however,

submitted that that opportunity was given in the context of

deciding the Writ Petition which challenged the validity and

correctness of the allotments. There was no prayer in the

Writ Petition making any personal claim against me either

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civil or criminal and the entire record of the case was

placed before this Hon'ble Court. In addition, affidavits

were filed by responsible officers of the Department,

therefore, I did not avail the option to file any affidavit.

The respondent was ready and willing to leave the question

of validity of the allotments made by him to be determined

by this Hon'ble Court on the basis of the entire record. At

that stage, I had no notice that any relief was claimed

against me personally by any one or that I would be called

upon to face civil or criminal proceedings.

I respctfully state that in the matter of

discretionary allotments based on Compassionate grounds,

individual assessment and perception are bound to differ

from person to person. There is no material to suggest that

I made any allotments for any pecuniary advantage or illegal

gain. Thus, I submit that before deciding on my personal

liability to pay compensation or face criminal trial, I

should be permitted to place my version of the facts and

circumstances.

The legal issue of the personal liability of Ministers

arising out of abuse of executive powers under the Rules of

Business in contradistinction to statutory powers conferred

upon designated functionaries involves important questions

impinging on the interpretation of the constitution. I

respectfully state that this matter should be dealt with by

this Hon'ble Court under Article 145 (3).

3. The principal flaw found in all these allotments

is that the procedure of receiving such applications for

discretionary quota was an institutionalised one and lacked

transparency. The lack of institutionalisation of

procedures for discretionary quotas has been in existence

since 1982 and I state that it is not suggested that I

flouted any criteria or guideline. I merely followed the

existing established practice in dealing with the

applications for discretionary quota following the

precedents set by a host of my predecessors belonging to

different political parties. I state that while the Hon'ble

Court may have found this manner of working incompatible

with Article 14 it cannot be suggested that I wilfully and

deliberately evolved a procedure which was found to be

illegal. Thus I submit that I did not personally violate

any law, rule or guideline in the manner so as to expose me

to a personal liability, civil or criminal. The substantial

question of law as to interpretation of the Constitution was

and continues to be whether arbitrariness or even malice in

law in the exercise of power on a long-standing policy

handled by the administrative team can be fastened on to the

elected person appointed as Minister by the President on the

advice of the Prime Minister.

4. The judgment relies on observations in Lucknow

Development Authority vs. M.K. Gupta [(1994) 1 SCC 243]

for holding that misfeasance in public offices is a part of

the law of tort. It is submitted that the Lucknow

Development Authority case arose under the Consumer

Protection Act wherein there was a specific

aggrieved/injured party, who claimed of injury/loss caused

to him. In the instant case, the question of damages does

not arise at all, since there is no finding that I acted to

the prejudice or detriment of any specific person in

derogation of my statutory (or constitutional) rights or in

violation of any law, rule or even guideline.

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5. As far as the proposed direction to the police

authorities is concerned, it is respectfully submitted that

:

(a) No offence u/s 405 or 406 of the IPC has been made

out.

(b) Any direction, based on these facts, and

expressing a prime-facie satisfaction of this Hon'ble Court

that any criminal offence has been committed would be

violative of Article 21 of the constitution, and

(c) Any adjudication, even in to the existence of a

prima- facie case by this Hon'ble Court would necessarily

introduce disclosure by the answering deponent of defence he

may have in the trial which may ensue - which procedure

would be violative of Article 21."

The Court by its judgment dated 4.11.1996 disposed of

the matter as follows:

"3. Pursuant to the above-quoted direction, a show-

cause notice was issued to Capt. Satish Sharma. He has

filed affidavit in reply to the show-cause notice.

4. We have heard Mr. Salve, learned counsel

appearing for Capt. Satish Sharma. There are two parts of

the directions quoted above. This Court has called upon

Capt. Satish Sharma to show cause why a direction be not

issued to the appropriate police authority to register a

case and initiate prosecution against him for criminal

breach of trust or any other offence under law.

5. The findings of this Court, quoted above, and the

conclusions reached in the Common Cause case, leave no

manner of doubt that an investigation by an independent

authority is called for in this case. We, therefore, direct

the Central Bureau of Investigation (CBI) to register a case

against Capt. Satish Sharma in respect of the allegation

dealt with and the findings reached by this Court in the

Common Cause case. The CBI shall hold investigation and

proceed in accordance with law. There shall be no limit on

the power, scope and sphere of investigation by the CBI.

We, however, make it clear that the CBI shall not be

influenced by any observations made by this Court or the

findings reached in Common Cause case, for reaching the

conclusion as to whether any prima facie case for

prosecution/trial is made out against Capt. Satish Sharma.

It shall have to be decided on the basis of the material

collected and made available with the CBI as a result of the

investigation. We direct the CBI to complete the

investigation within three months of the receipt of this

order. The CBI shall file interim report to indicate the

compliance of this order. This shall be done by 20-1-1997

and this matter shall be listed on 22-1-1997 before a Bench

of which Mr. Justice Faizan Uddin is a member."

Thereafter the Court proceeded to hear Mr. Harish N.

Salve on the question of damages and after considering

certain English decisions on the question of exemplary

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damages and also the decision of this Court in Neelabati

Behera vs. State of Orissa (1993) 2 SCC 746, in which it

was laid down that the damages can be awarded by this Court

in a proceeding under Article 32 of the Constitution, the

Court directed the petitioner to pay a sum of Rs.50 lakhs as

exemplary damages to the Govt. Exchequer, with the

observation that since the property with which the

petitioner was dealing was Govt. property, the Govt., which

is "By the people", has to be compensated. The Court

further directed the petitioner to deposit the amount with

the Secretary, Ministry of Finance, Govt. of India within

nine months. It was further provided that the amount, if

not paid, would be recoverable as arrears of land revenue.

As Minister of State for Petroleum, the petitioner had

made allotments from out of his discretionary quota. The

discretionary quota is available to almost all Ministers of

the Govt. of India. This obviously is based on a policy

decision to allow discretionary quota not only to the Prime

Minister but also to other Ministers so that serious

difficulties, problems of disabilities or unemployment may

be overcome at the earliest by providing immediate help.

The Constitution through its various provisions,

including Directive Principles of State Policy has laid down

the basic principles of governance. Socio-economic growth,

aid to the poor, upliftment of the down trodden, the

Backward masses and Weaker sections of the society are some

of the rules of governance embodied in the Constitution.

The philosophy behind the "discretionary quota" available to

the Prime Minister and other Minister or Members of

Parliament appears to be to provide immediate relief in a

case of acute personal hardship.

The list of discretionary quotas available with the

Prime Minister and other Ministers has been placed before us

and is set out below:

"DETAILS OF DISCRETIONARY ALLOTMENTS BEING EXERCISED

BY VARIOUS MINISTERS IN GOVERNMENT OF INDIA

UNION MINISTERS

1. Prime Minister :

Directives being sent to various Ministries for

deserving cases of Discretionary allotments, for out of turn

House/DDA Flat/Shops/Petrol Pump/Gas Agencies/Rly Station

Stalls/Free Air Tickets/out of turn Maruti Car, STD/ISD

Booth/Out of Turn Telephone Connections/Gas Connections etc.

PM exercises discretion to sanction funds from PM's Relief

Fund.

2. Minister for Communications

Discretionary Allotments of :

1. Telephone connections. 2. Small Telephone

Exchanges. 3. ISD/STD Booths.

3. Minister for Civil Aviation & Tourism

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Discretionary Allotment of :

1. Free or Discounted International Air Tickets. 2.

GSAs for AI or Indian Airlines 3. Out of Turn seats in

IA/AI flights. 4. Shops/Stalls in ITDC Hotels.

4. Minister for Chemical & Fertilizers

Discretionary Allotment of :

1. Agencies of IPCL/Public Sector Drug Units. 2.

Agencies for Fertilizer Public Sector Undertakings.

5. Minister for Coal

Discretionary Allotment of :

1. Premium quality coal rakes. 2. PSU Coal Dumps 3.

Premium quality coal in thousand tons.

6. Minister for Defence

Discretionary Allotments of :

1. Fire Arms, Rifles & Revolvers. 2. Old Army

Vehicles meant for disposal.

7. Ministry of HRD

Discretionary Powers of :

1. Admissions in Medical/Engg. Colleges/Central

Schools. 2. Scholarships for study in India & Abroad.

8. Minister for Health & Family Welfare

Discretionary Powers of :

1. Treatment of Patients abroad. 2. Private wards

in AIIMS/Premier Govt. Hospitals. 3. Admission in Medical

Colleges in India/Abroad.

9. Minister for Information & Broadcasting

Discretionary Powers of :

1. Selection of DD Serials/other programmes. 2.

Nomination to film censor boards etc.

10. Minister for Industry

Discretionary Allotments of :

1. Maruti Cars/other cars

11. Minister for Food & Civil Supplies/Food

Processing

Discretionary Allotments of :

1. Ration shops. 2. SKO/LDO Agencies. 3.

Allotment of FCI wheat/Rice/Sugar to Pvt. Industries. 4.

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Beer Licences.

12. Minister for Petroleum & Natural Gas

Discretionary Allotments of :

1. Gas Connections. 2. Petrol Pumps & Gas Agencies.

13. Minister for Railways

Discretionary Allotments of :

1. Kiosks/Stalls at Railway Stations. 2. Free or

discounted Railway passes/ Tickets for 1 year or more years.

3. Berths in all trains. 4. Railway Rakes.

14. Minister for Surface Transport

Discretionary Powers of :

1. Out of turn Berthing of National & International

Ships at all Ports across country. 2. Permits for Buses

etc.

15. Minister for Urban Developments

Discretionary Allotment of :

1. DDA Flats/Houses. 2. Shops in DDA/NDMC 3. Plots

in DDA.

MEMBERS OF PARLIAMENT

1. 100 Gas Connections for Discretionary Allotments.

2. 15 Telephone Connections for Discretionary

Allotments."

The above list will show that not only to the Minister

of Petroleum, but beginning from the Prime Minister, down to

other Ministers, including Members of Parliament, a

discretionary quota has been made available to them.

So far as the Minister of Petroluem is concerned, the

allotments made by the petitioner were challenged in this

Court in Centre for Public Interest Litigation vs. Union of

India & Ors. (Writ Petition (C) No. 886 of 1993, decided

on March 31, 1995) [since reported in 1995 Supp.(3) SCC

382], but the Court did not set aside or quash any of the

allotments and instead framed guidelines for the exercise of

discretionary allotment of petroleum products' agencies.

These guidelines were settled with the assistance of the

Attorney General who submitted a draft of the proposed

guidelnes. After considering the guidelines, the Court

directed as under:

"The following to be inserted in the brochure of

guidelines for selection of dealers through the Oil

Selectlon Board:

Discretionary Quota

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A discretionary quota will be earmarked for deserving

cases on genuine compassionate grounds. This quota will be

outside the 100 point roster of marketing plans and outside

the purview of the Oil Selection Boards.

Candidates will submit a proper application to the

Ministry, giving their complete bio-data indicating the name

of spouse/father, occupation, permanent address, annual

income for the preceding year in respect of self, spouse and

parents from all sources enclosing documentary evidence

wherever necessary in support of their request and an

affidavit verifying the given facts.

Discretionary allotment will be made to a candidate

only if he is a citizen of India. If he/she or any of

his/her following close relatives (including step relatives)

does not already hold a dealership of petroleum products of

any oil company:

(i) spouse (ii) father/mother (iii) brother (iv)

son/daughter-in-law."

Then the Court directed as under :

"The above-quoted norms/guidelines etc. shall be

followed by the Central Government in making all such

discretionary allotments of retail outlets for petroleum

products, LPG Dealership and SKO Dealership, hereafter. A

copy of this order be provided to every oil company by the

Central Government for general information."

We have not reproduced the general guidelines or

general conditions or, for that matter, the procedure fixed

by the Court for allotment of petrol outlets, but have

reproduced only that portion which has been considered

necessary by us for disposal of this case as they relate to

discretionary quota.

It is contended that since the allotments made by the

petitioner till the filing of the writ petition in this

Court, in spite of a challenge having been raised therein,

were not set aside and only guidelines were settled for

future exercise of discretionary quota, tacit stamp of

judicial approval shall be deemed to have been placed on the

allotments made by the petitioner and consequently those

allotments could not have been reopened on the principle of

constructive res judicata. Normally, we would have accepted

this argument, but in this case we cannot go to that extent.

We have already stated in the beginning that the judgment of

the Court, in sofar as it purports to set aside the 15

allotments made by the petitioner, will not be reviewed by

us as the review applications filed by the allottees have

already been rejected. We, therefore, cannot entertain any

plea which even indirectly aims at setting aside the

judgment under review on that question.

Significantly, it is not even suggested that the

guidelines issued by the Court in 1995 Supp. (3) SCC 382

were violated in any subsequent allotment or that allotments

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were made in excess of the quota after that judgment.

In a case relating to manufacturer's discretionary

quota concerning Maruti-800, this Court had to intervene.

The then Attorney General who happened to be none other than

Mr. K.Parasaran, arguing before us as Senior Counsel today,

was requested by the Court to provide the draft guidelines

which was done and the guidelines were approved by the Court

and the Court fixed the guidelines for the exercise of

manufacturer's five per cent discretionary quota concerning

allotment of `Maruti 800' cars. (See: Ashok K. Mittal vs.

Maruti Udyog Ltd.& Anr. (1986) 1 SCR 585). While conceding

discretionary quota to the manufacturers, the Court fixed

the guidelines for regulating the allotments of Maruti cars

out of discretionary quota to various customers falling in

the category of Defence Forces, Judiciary, Constitutional

Heads, MPs, etc.

Mr.Gopal Subramaniam, learned Senior Counsel,

appearing as Amicus Curiae in the case and who, we must

record, equally matched the forensic skill of Mr. K.

Parasaran and rendered invaluable assistance to us,

contended that it was not merely a matter of discretionary

quota which was the basis of the judgment under review, but

the arbitrary manner, in which the discretion was exercised,

which ultimately resulted in the quashing of all the

allotments made by the petitioner who was found to have

allotted the petrol pumps not only to the relatives of his

personal staff, but also to the sons of Chairmen of Oil

Selection Boards and even to the members of the Oil

Selection Boards and, therefore, the Court had rightly held

the exercise of discretion to be motivated, arbitrary and

for extraneous considerations. Since this question again

turns on the merit of the allotments made by the petitioner,

we would not look into it. We have mentioned the philosophy

of discretionary quota being made available to the

Ministers, only as a prelude to our decision on the question

whether on the facts of this case the petitioner could be

held to have committed the tort of misfeasance in public

office. The basis of the finding recorded in the impugned

judgment on this question is the decision of this Court in

Lucknow Development Authority's case (supra) which did not

consider even the basic elements which constitute the tort

of misfeasance which we have already discussed above.

The whole proceedings were initiated on the basis of a

Press report which was brought to the notice of the Court by

Mr. H.D.Shourie, Director, Common Cause whose Writ Petition

was already pending and it was on that basis in that pending

Writ Petition that the Court took cognizance of the matter.

The allotments were made by the petitioner in his capacity

as Minister of State for Petroleum and Natural Gas as and

when an application was made by separate and individual

persons. There was none to compete with that person. The

individual concerned would approach the petitioner and the

petitioner, perhaps, on being satisfied with the contents of

the application, as also the need for a petrol outlet in the

area, make the allotment. Had there been any other

applicant for the same petrol outlet for which an

application was made to the Minister, the question that he

deliberately made the allotment in favour of one so as to

injure the other person would then have positively arisen.

The petitioner cannot be said to have made the allotment in

favour of one out of malice towards the other as there was

none else to contest or compete with the claim of the person

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who made the application for allotment. Nor could it be

said that the petitioner made the allotment of petrol outlet

in favour of the applicant with the knowledge that such

allotment was likely to injure the interest of any other

person.

The petitioner before the Court was "Common Cause".

It was a registered Society. It was not one of the

applicants for allotment of petrol outlet. Had the "Common

Cause" approached the Civil Court for damages on account of

tort of misfeasance in public office, its suit would have

been dismissed on the ground that it was not one of the

applicants for a petrol outlet; its own interest was not

injured in any way nor had the petitioner made allotment in

favour of one of the applicants maliciously or with the

knowledge that the allotment would ultimately harm the

"Common Cause". How could then a finding of commission of

misfeasance in public office by the petitioner be recorded

in proceedings under Article 32 and that too, at the

instance of "Common Cause" on the basis of a Press report?

Mr. Gopal Subramaniam contended that "Common Cause" was

justified in filing the petition under Article 32 in Public

Interest to expose the wanton way in which allotments were

made by the petitioner. To that extent, Mr.Gopal

Subramaniam is right. The Court has already quashed the

fifteen allotments made by the petitioner in view of the

arbitrary exercise of power by him. But the Court went a

step further and held that petitioner had committed the Tort

of Misfeasance in Public Office and awarded exemplary

damages. It is this aspect which we are examining and it is

in this context that we say that "Common Cause" not being an

applicant for allotment of a Petrol outlet could not have

obtained a finding in the Civil Suit that the petitioner had

committed the Tort of Misfeasance in Public Office.

Having regard to the definition of tort of misfeasance

in public office as discussed above and having regard to the

ingredients of that tort, it is obvious that there has to be

an identifiable plaintiff or claimant whose interest was

damaged by the public officer maliciously or with the

knowledge that the impugned action was likely to injure the

interest of that person. It is in favour of that specific

identifiable plaintiff or claimant that the relief could

have been granted and damages awarded to him as the whole

gamut of the Law of Tort is compensatory in nature and

damages are awarded to compensate the losses caused on

account of violation of the interest of one person by

another. In other words, obtaining compensation for a

tortiously inflicted loss is generally perceived as the aim

of the law of tort by the plaintiff. Judgment in favour of

the plaintiff can be given and the loss suffered by him can

be redressed only when a finding of a breach of an

obligation by the tort-feasor is recorded. It is the

compensatory function of tort which is invoked by the

plaintiff in a Court and unless there is an identifiable

plaintiff, there cannot be any order for compensation or

damages to redress the loss caused to that plaintiff.

Mere allotment of Petrol outlets would not constitute

"Misfeasance" unless other essential elements were present.

These allotments have already been quashed as having been

arbitrarily made and we appreciate the efforts of "Common

Cause" for having caused this exposure. But the matter must

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end here.

It cannot be ignored that the allotments made by the

petitioner under the discretionary quota were challenged in

this Court but the Court did not interfere with those

allotments and instead settled the guidelines for future

allotments. It is not alleged nor has it been found that

any allotment was made in violation of the guidelines. It

cannot also be ignored that the petitioner is not alleged to

have intereferred with any allotment made through the Oil

Selection Boards or the process of selection carried out by

the Boards.

At this stage, Mr. Gopal Subramaniam drew our

attention to the following passage from the judgment under

review :

"The orders of the Minister reproduced above read:

"the applicant has no regular income to support herself and

her family", "the applicant is an educated lady and belongs

to Scheduled Tribe community", "the applicant is an

uneducated, unemployed Scheduled Tribe youth without regular

source of livelihood", "the applicant is a housewife whose

family is facing difficult financial circumstances" etc.

etc. There would be literally millions of people in the

country having these circumstances or worse. There is no

justification whatsoever to pick up these persons except

that they happen to have won the favour of the Minister on

mala fide considerations. None of these cases fall within

the categories placed before this Court in Centre for Public

Interest Litigation v. Union of India but even if we assume

for argument sake that these cases fall in some of those or

similar guidelines the exercise of discretion was wholly

arbitrary. Such a discretionary power which is capable of

being exercised arbitrarily is not permitted by Article 14

of the Constitution of India. While Article 14 permits a

reasonable classification having a rational nexus to the

objective sought to be achieved, it does not permit the

power to pick and choose arbitrarily out of several persons

falling in the same category."

and contended that the Court itself had in mind that

there were others equally eligible to whom the Petrol

outlets could have been allotted. He specially drew our

attention to the portion underlined above. It is true that

there are millions of poor, unemployed, educated or

uneducated young men, who might have deserved preferential

treatment, but all of them had not approached the petitioner

nor the petitioner was expected to know all of them

personally. If an advertisement were to be issued and

applications were to be invited for allotment of Petrol

outlets on the basis of auction, it would still not have

been possible for the millions of poor or unemployed persons

to have applied for allotment or to participate in the bid.

Auction is usually held to augment the revenue. Physically

handicapped, poor, unemployed, illiterate youth cannot be

expected to participate in the auction and offer their bids.

Moreover, this would be contrary to the concept of

discretionary quota, the main purpose of which is to provide

immediate relief to the most needy. Even the guidelines

settled by this Court do not provide for allotment being

made by public auction.

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In view of the above, the conduct of the petitioner in

making allotments of petrol outlets was atrocious, specially

those made in favour of the Members, Oil Selection Board or

their son, etc., and reflects a wanton exercise of power by

the petitioner. This Court has already used judicial

vituperatives in respect of such allotments and we need not

strain our vocabulary any further in that regard. Suffice

it to say that though the conduct of the petitioner was

wholly unjustified, it falls short of "misfeasance in public

office" which is a specific tort and the ingredients of that

tort are not wholly met in the case. That being so, there

was no occasion to award exemplary damages.

Since exemplary damages have been awarded, we would,

in spite of our finding that the petitioner had not

committed the tort of misfeasance in public office, consider

the question relating to "Exemplary Damages" on its own

merit.

"Damages", as defined by Mcgregor "are the pecuniary

compensation, obtainable by success in an action, for a

wrong which is either a tort or a breach of contract, the

compensation being in the form of a lump sum which is

awarded unconditionally." This definition was adopted by

Lord Hailsham L.C. in Broome v. Cassell & Co. (1971) 2

All ER 187. The definition in Halsbury's Laws of England

(4th Edition), Volume 12, Para 1102, is similar to the

definition set out above.

The object of an award of damages is to give the

plaintiff compensation for damage, loss or injury he has

suffered. The elements of damage recognised by law are

divisible into two main groups : pecuniary and non-

pecuniary. While the pecuniary loss is capable of being

arithmetically worked out, the non-pecuniary loss is not so

calculable. Non-pecuniary loss is compensated in terms of

money, not as a substitute or replacement for other money,

but as a substitute, what Mcgregor says, is generally more

important than money: it is the best that a court can do.

In Re: The Medianna (1900) A.C. 1300, Lord Halsbury L.C.

observed as under:

"How is anybody to measure pain and suffering in

moneys counted? Nobody can suggest that you can by

arithmetical calculation establish what is the exact sum of

money which would represent such a thing as the pain and

suffering which a person has undergone by reason of an

accident...But nevertheless the law recognises that as a

topic upon which damages may be given."

This principle was applied in Fletcher v. Autocar and

Transporters (1968) 2 Q.B. 322 and Parry v. Cleaner (1970)

A.C. 1.

In a suit for damages under the Law of Tort, the court

awards pecuniary compensation after it is proved that the

defendant committed a wrongful act. In such cases, the

court usually has to decide three questions:-

1. Was the damage alleged caused by the defendant's

wrongful act? 2. Was it remote? 3. What is the monetary

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compensation for the damage?

These elements imply that there has to be always a

plaintiff who had suffered loss on account of wrongful act

of the defendant. If the damage caused to the plaintiff is

directly referable to the wrongful act of the defendant, the

plaintiff becomes entitled to damages. How the damages

would be calculated, what factors would be taken into

consideration and what arithmetical process would be adopted

would depend upon the facts and circumstances of each case.

Now, the damages which can be awarded in an action

based on Tort may be Contemptuous, Nominal, Ordinary or, for

that matter, Exemplary. In the instant case, we are

concerned with the "Exemplary Damages" awarded by this Court

by Judgment under review.

As pointed out earlier, the primary object of award of

damages is to compensate the plaintiff for the harm done to

him, while the secondary object is to punish the defendant

for his conduct in inflicting the harm. The secondary

object can also be achieved in awarding, in addition to

normal compensatory damages, damages which are variously

called as exemplary damages, punitive damages, vindictive

damages or retributory damages. They are awarded whenever

the defendant's conduct is found to be sufficiently

outrageous to merit punishment, for example, where the

conduct discloses malice, cruelty, insolence or the like.

It will thus be seen that in awarding punitive or

exemplary damages, the emphasis is not on the plaintiff and

the injury caused to him, but on the defendant and his

conduct.

Exemplary Damages made their appearance on the English

legal scene in 1760s when in two cases, namely Huckle vs.

Money and John Wilkes vs. Wood, (1763) 2 Wils. KB 205 and

(1763) Lofft 1 respectively, exemplary damages were awarded.

These cases were followed by two other cases, namely, Benson

v. Fredrick (1766) 3 Burr. 1845 relating to the tort of

assault and Tullidge vs. Wade (1769) 3 Wils. KB 18

relating to the tort of seduction, and in both the cases,

exemplary damages were allowed. Exemplary damages,

therefore, became a familiar feature of the Law of Tort and

were even awarded in cases relating to trespass to land and

trespass to goods.

The whole legal position was reviewed in Rookes v.

Barnard (1964) AC 1129 and the House of Lords laid down that

except in few exceptional cases, it would not be permissible

to award exemplary damages against the defendant howsoever

outrageous his conduct might be. The question of damages

was thoroughly canvassed in the judgment of Lord Devlin and

after tracing the history of such awards of exemplary

damages from their origin in 1763, he observed :

"These authorities convince me of two things. First,

that your lordships could not without a complete disregard

of precedent, and indeed of statute, now arrive at a

determination that refused altogether to recognise the

exemplary principle. Secondly, that there are certain

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categories of cases in which an award of exemplary damages

can serve a useful purpose in vindicating the strength of

the law, and thus affording a practical justification for

admitting into the civil law a principle which ought

logically to belong to the criminal.....I am well aware that

what I am about to say will, if accepted, impose limits not

hitherto expressed on such awards and that there is

powerful, though not compelling authority for allowing them

a wider range."

Lord Devlin then set out the categories in which, in

his view, exemplary damages could be awarded, as under :

"(1) where there has been oppressive, arbitrary or

unconstitutional action by the servants of the government;

(2) where the defendant's conduct has been calculated

by him to make a profit which may well exceed the

compensation payable to the plaintiff; and

(3) where such damages are expressly authorised by

statute."

The principles laid down in Rookes v. Barnard (supra)

were followed in five other cases in England out of which

four were libel actions, including McCarey v. Associated

Newspapers Limited (1965) 2 QB 86 = (1964) 3 All ER 947 and

Broadway Approvals Limited v. Odhams Press Limited (1965) 2

All ER 523.

In 1971, came the decision in Broome v. Cassell & Co.

Ltd. (1971) 2 All ER 187. The facts of the case may be

briefly stated :

"(a) John Egerton Broome was a commander in the Royal

Navy. In July 1942 he was in command of the naval escort

for a merchant convoy of war materials en route to the

Soviet Union. Acting on orders received from the Admiralty,

which had mistakenly formed the impression that the convoy

was about to be attacked, Broome directed the ships to

scatter in every direction. The result was calamitious.

Left unprotected from attack, large numbers of ships and men

and vast quantities of material were lost. Broome's action

was vindicated; the error was the Admiralty's not his.

Many persons wrote about the catastrophe, including Sir

Winston Churchill and the war's official historian, but none

faulted Broome for it until Cassell & Co. Ltd. published

"The Destruction of P.Q. 17".

(b) The book, advertised as "the true story of

biggest- ever Russian convoy that the Royal Navy left to

annihilation", blamed Broome for the disaster, accusing him

of disobeying orders and deserting the convoy. The book had

earlier been rejected by its author's regular publisher, who

had said :

'As written, the book is a continuous witch hunt of

the plaintiff, filled with exaggerated criticisms of what he

did or did not do... We could not possibly publish the book

as it is unless you took out insurance against any writs for

libel, and I don't think that any insurance company would

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underwrite you.'

The author then submitted the book for publication to

Cassell & Co. Ltd., which praised the book for its "very

robust view of libel dangers". Cassell thought that the

amount of profit which he would earn by publishing the book

would far exceed the amount of damages which he would be

required to pay in an action for libel. As anticipated,

action for libel was instituted against Cassell & Company.

At the trial, neither the author nor the publisher gave

evidence. Every witness who was called supported the

plaintiff. The jury awarded compensatory damages of Pound

1,000 in respect of the proof copies and Pound 14,000 in

respect of the hardback edition, and exemplary damages of

Pound 25,000.

The defendants appealed. In dismissing the appeal,

the Court of Appeal considered the judgment in Rookes v.

Barnard and speaking through Lord Denning, M.R. said that

Lord Devlin,

'threw over all that we ever knew about exemplary

damages. He knocked down the common law as it had existed

for centuries. He laid down a new doctrine about exemplary

damages.'

Lord Denning pointed out that, although Rookes v.

Barnard had been followed in England, it had not been

acepted in Australia, Canada or New Zealand and the day had

arrived when it should no longer be followed in England:

'This wholesale condemnation justifies us. I think,

in examining this new doctrine for ourselves: and I make so

bold as to say that it should not be followed any longer in

this country.'

He gave four reasons :

(a) the common law on the subject had been so well

settled before 1964 that it was not open to the House of

Lords to overthrow it;

(b) counsel who had appeared in Rookes v. Barnard had

not argued the point, and indeed had accepted the common law

as it was then understood;

(c) contrary to what Lord Devlin had said, there were

two previous decisions of the House of Lords approving

awards of exemplary damages; and

(d) the doctrine laid down by Rookes v. Barnard was

"hopelessly illogical and inconsistent". .lm10

Lord Denning further observed:-

"All this leads me to the conclusion that, if ever

there was a decision of the House of Lords given per

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incuriam, this was it. The explanation is that the House,

as a matter of legal theory, thought that exemplary damages

had no place in the civil code, and ought to be eliminated

from it; but, as they could not be eliminated altogether,

they ought to be confined within the strictest possible

limits, no matter how illogical those limits were..... I

think the difficulties presented by Rookes v. Barnard are

so great the judges should direct the juries in accordance

with the law as it was understood before Rookes v. Barnard.

Any attempt to follow Rookes v. Barnard is bound to lead to

confusion."

Matter went up in appeal before the House of Lords.

(Cassell & Co. Ltd. vs. Broome & Anr. (1972) 1 All ER

801 = 1972 A.C. 1027 ). Lord Hailsham L.C. did not agree

with the Court of Appeal and held that Rookes vs. Barnard

(supra) was correctly decided. All the observations of Lord

Denning including that Rookes v. Barnard was decided per

incuriam were diluted, rather overruled.

It is in this background that category (2) set out by

Lord Devlin was specified. Cassell & Company had published

the book in spite of the knowledge that an action for libel

was likely to be instituted against them. They were fully

conscious that damages were likely to be awarded against

them for publishing that book. But they published the book

as they thought that the book would bring them much more

money than what they would be required to pay as damages.

If it is with this motive that a tort is purposely

committed, it would be a fit case for award of exemplary

damages.

In spite of this decision, the controversy whether

punitive or exemplary damages should be allowed, still rages

almost internationally and remains unresolved. It continues

to be debated even in England, whether Exemplary Damages

should be allowed in the pre-Rookes v. Barnard manner or

only in those exceptional cases which have been indicated in

Rookes v. Barnard.

In an action for tort where the plaintiff is found

entitled to damages, the matter should not be stretched too

far to punish the defendant by awarding exemplary damages

except when their conduct, specially those of the Govt. and

its officers, is found to be oppressive, obnoxious and

arbitrary and is, sometimes, coupled with malice. While

dealing with this category, namely, the Govt. officers, it

was observed in Rookes v. Barnard (supra):

".....where one man is more powerful than another, it

is inevitable that he will try to use his power to gain his

ends; and if his power is much greater than the other's, he

might, perhaps, be said to be using it oppressively. If he

uses his power illegally, he must of course pay for his

illegality in the ordinary way; but he is not to be

punished simply because he is the more powerful. In the

case of the government it is different, for the servants of

the government are also the servants of the people and the

use of their power must always be subordinate to their duty

of service."

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If we were to apply the rule in Rookes v. Barnard as

upheld in Cassell & Co. Ltd. vs. Broome (supra)

invariably and unhesitatingly and were to award exemplary

damages in every case involving Govt. officers or Govt.

servants, the result would be appalling.

Executive, under the Constitution, consists of Prime

Minister, Cabinet Ministers, Ministers of State and Civil

Services comprising of high administrative officers on the

top down to the clerical level. They have as important a

role to play in the governance of the country as the

Judiciary or Legislature. The Executive, in running the

administration of the country, should not be cowed down and

should be allowed to have full confidence in its own

existence so that its decision-making process is not, in any

way, affected. They must feel independent and keep

themselves in an excellent frame of mind so that the

administrative files are cleared in time and the Officers

dealing with those files are not hesitant even in taking

bold decisions which have sometimes to be taken in the

interest of administration. It is true that the fear of

being proceeded against in a court of law for tort of

misfeasance in public office may keep them on the right path

and they may not falter, but there is already the fear of

departmental action or proceedings being initiated against

them departmentally which itself is a safeguard for proper

administration. Departmentally, they are answerable for

their lapses; Ministers, or, for that matter, even the

Government is answerable to Parliament. If they were

constantly under the fear or threat of being proceeded

against in a court of law for even slightest of lapse or

under constant fear of exemplary damages being awarded

against them, they will develop a defensive attitude which

would not be in the interest of administration.

In Yuen Kun Yev & Ors. v. Attorney General of Hong

Kong (1987) 2 All ER 705, Lord Keith observed as under :

"...the prospect of claims would have a seriously

inhibiting effect on the work of his department. A sound

judgment would be less likely to be exercised if the

Commissioner were to be constantly looking over his shoulder

at the prospect of claims against him, and his activities

would be likely to be conducted in a detrimentally defensive

frame of mind.. Consciousness of potential liability could

lead to distortions of judgment....".

If the power has been exercised bona fide and

honestly, there cannot be any occasion for exemplary damages

being awarded notwithstanding that unintended injury was

caused to someone. These, as also a few other elements,

which we shall presently discuss, have to be kept in mind

before awarding exemplary damages.

Mr. Parasaran next made his submission on the quantum

of damages and contended that the amount of Rs.50 lakhs has

been fixed in an arbitrary manner without there being any

rational basis for arriving at that figure. It is contended

that the only reason given by the Court was that "all the

facts and circumstances of the case have been examined." The

observation of this Court in this regard may be reproduced :

"After examining all the facts and circumstances of

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this case and giving thoughtful consideration to this

aspect, we direct Capt. Satish Sharma to pay a sum of Rs.50

lakhs as exemplary damages to the Government Exchequer.

Since the property with which Capt. Sharma was dealing was

public property, the Government which is "by the people" has

to be compensated. We further direct Capt. Sharma to

deposit the amount with the Secretary, Ministry of Finance,

Government of India within nine months from today. The

amount if not paid, shall be recoverable as arrears of land

revenue."

It is contended by Mr. Parasaran that the above

reasons are not enough for awarding punitive damages in the

sum of Rs.50 lakhs against the petitioner. He contended

that the proceedings in which this order has been passed

were proceedings under Article 32 of the Constitution and

not a suit for recovery of damages under law of Tort and,

therefore, an order for exemplary damages should not have

been passed.

Right to access to this Court under Article 32 of the

Constitution is a fundamental right. The Court has been

given the power to issue directions or orders or writs,

including writs in the nature of habeas corpus, mandamus,

prohibition, quo-warranto and certiorari, whichever may be

appropriate, for the enforcement of the fundamental rights.

Obviously, the fundamental rights would be enforced against

the Govt. or its executive or administrative officers or

other public bodies. It is in the matter of enforcement of

fundamental rights that the Court has the right to award

damages to compensate the loss caused to a person on account

of violation of his fundamental rights. The decisions in

which orders have been passed by this Court for damages

under Article 32 of the Constitution for violation of

fundamental right coupled with, in some cases, tortious

liability, have already been specified above. The State

itself cannot claim the right of being compensated in

damages against its officers on the ground that they had

contravened or violated the fundamental rights of a citizen.

Petitioner, as Minister of State for Petroleum and

Natural Gas, was part of the Central Govt. By directing

petitioner to pay a sum of Rs.50 lakhs to the Govt., the

Court has awarded damages in favour of the Govt. of India

in proceedings under Article 32 of the Constitution which is

not permissible as the Court cannot direct the Govt. to pay

the exemplary damages to itself. Mr.Gopal Subramaniam

asserted that it was a direction made to the petitioner

personally and the Court had treated him as a separate and

distinct entity than the Govt. He contended that since tort

is a wrongful act, it cannot be treated as an act of the

State and has always to be treated as referring to the

person who has committed it and, therefore, the petitioner

could be rightly directed by the Court to pay Rs.50 lakhs as

exemplary damages.

This cannot be accepted. The whole thing has to be

examined in the context of Article 32 of the Constitution

under which relief to a person or citizen can be granted

only against Union of India or the State or their

Instrumentalities but the State cannot legally claim that

since one of its Ministers or Officers had violated the

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fundamental rights of a citizen or had acted arbitrarily, it

should be compensated by awarding exemplary damages against

that officer or Minister.

In Rookes v. Barnard (supra), it was pointed out by

Lord Devlin that a plaintiff cannot recover exemplary

damages unless he is the victim of punishable behaviour. We

have already pointed out that in the instant case, there was

no plaintiff. The petitioner, Common Cause, cannot be said

to be a plaintiff nor can it claim to have suffered any

damage or loss on account of the conduct of the petitioner.

Lord Devlin further pointed out that award of

exemplary damages should be moderate. Some of the awards

that the jury had made in the past, seemed to him, to amount

to a greater punishment than the punishment which was likely

to be incurred if the conduct were criminal. It would be a

punishment imposed without the safeguard which the criminal

law gives to an offender. Lord Devlin had a third

consideration also in mind which related to the means of the

party. Obviously, a small exemplary award would go

unnoticed by a rich defendant, while even a moderate award

might cripple a poor defendant. The conduct of the parties

throughout the proceedings would also be a relevant

consideration in assessing exemplary damages.

In our opinion, these elements or considerations are

extremely relevant in determining the amount of exemplary

damages but, unfortunately, none of these factors has been

taken into consideration and after recording a finding that

the conduct of the petitioner was oppressive and that he had

made allotments in favour of various persons for extraneous

considerations, the Court awarded an amount of Rs.50 lakhs

as punitive damages. How did the Court arrive at this

figure is not clear. Why it could not Forty nine lacs fifty

thousand?

Let us now examine the direction for investigation by

the C.B.I. into the offence of "criminal breach of trust"

or "any other offence."

This direction obviously consists of two parts : (a)

Investigation by the C.B.I. into the offence of criminal

breach of trust; and (b) Investigation by the C.B.I. into

any other offence. We will take up the first part first.

The basis for the direction relating to investigation

into the offence of "criminal breach of trust" are the

following observations of the Court :

(a) "A Minister who is the executive head of the

department concerned distributes these benefits and

largesses. He is elected by the people and is elevated to a

position where he holds a trust on behalf of the people. He

has to deal with the people's property in a fair and just

manner. He cannot commit breach of the trust reposed in him

by the people.

(b) The allotments have been made in a cloistered

manner. The petrol pumps -- public property -- have been

doled out in a wholly arbitrary manner."

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These observations indicate that the Court was of the

opinion that a person on being elected by the people and on

becoming a Minister holds a sacred trust on behalf of the

people. This, we may venture to say, is a philosophical

concept and reflects the image of virtue in its highest

conceivable perfection. This philosophy cannot be employed

for determination of the offence of "criminal breach of

trust" which is defined in the Indian Penal Code. Whether

the offence of "criminal breach of trust" has been committed

by a person has to be determined strictly on the basis of

the definition of that offence set out in the Penal Code to

which we would advert a little later.

The Court also appears to have invoked the 'Doctrine

of Public Trust' which is a doctrine of environmental law

under which the natural resources such as air, water,

forest, lakes, rivers and wild life are public properties

"entrusted" to the Government for their safe and proper use

and proper protection. Public Trust Law recognises that

some types of natural resources are held in trust by the

Government for the benefit of the public. The 'Doctrine of

Public Trust' has been evolved so as to prevent unfair

dealing with or dissipation of all natural resources. This

Doctrine is an ancient and somewhat obscure creation of

Roman and British law which has been discovered recently by

environmental lawyers in search of a theory broadly

applicable to environmental litigation.

This doctrine was considered by this Court in its

judgment in M.C. Mehta vs. Kamal Nath (1997) 1 SCC 388 to

which one of us (S.Saghir Ahmad, J.) was a party. Justice

Kuldip Singh, who authored the erudite judgment and has also

otherwise contributed immensely to the development of

environmental law, relying upon ancient Roman "Doctrine of

Public Trust", as also the work of Joseph L. Sax, Professor

of Law, University of Michigan and other foreign decisions,

wrote out that all natural resources are held in 'trust' by

the Govt. The Doctrine enjoins upon the Govt. to protect

the resources for the enjoyment of the general public rather

than to permit their use for private ownership or commercial

purposes. But this Doctrine cannot be invoked in fixing the

criminal liability and the whole matter will have to be

decided on the principles of criminal jurisprudence, one of

which is that the criminal liability has to be strictly

construed and offence can be said to have been committed

only when all the ingredients of that offence as defined in

the Statute are found to have been satisfied.

The matter may be examined from another angle.

Election to the State Legislature or the House of the

People are held under the Constitution on the basis of adult

suffrage. On being elected as a Member of the Parliament,

the petitioner was inducted as Minister of State. The

Department of Petroleum and Natural Gas was allocated to

him. Under the allocation of business rules, made by the

President of India, the distribution of petroleum products,

inter alia, came to be allocated to the petitioner. This

allocation of business under the Constitution is done for

smooth and better administration and for more convenient

transaction of business of Government of India. In this

way, neither a "trust", as ordinarily understood or as

defined under the Trust Act, was created in favour of the

petitioner nor did he become a "trustee" in that sense.

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In Tito vs. Waddell (No.2), 1977 (3) All ER 129, the

question of Crown's status as a trustee was considered and

it was laid down:-

"I propose to turn at once to the position of the

Crown as trustee, leaving on one side any question of what

is meant by the Crown for this purpose; and I must also

consider what is meant by `trust'. The word is in common

use in the English language, and whatever may be the

position in this court, it must be recognised that the word

is often used in a sense different from that of an equitable

obligation enforceable as such by the courts. Many a man

may be in a position of trust without being a trustee in the

equitable sense; and terms such as `brains trust',

`anti-trust', and `trust territories', though commonly used,

are not understood as relating to a trust as enforced in a

court of equity. At the same time, it can hardly be

disputed that a trust may be created without using the word

`trust'. In every case, one has to look to see whether in

the circumstances of the case, and on the true construction

of what was said and written, a sufficient intention to

create a true trust has been manifested.

When it is alleged that the Crown is a trustee, an

element which is of special importance consists of the

governmental powers and obligations of the Crown; for these

readily provide an explanation which is an alternative to a

trust. If money or other property is vested in the Crown

and is used for the benefit of others, one explantion can be

that the Crown holds on a true trust for those others.

Another explantion can be that, without holding the property

on a true trust, the Crown is nevertheless administering

that property in the exercise of the Crown's governmental

functions. This latter possible explanation, which does not

exist in the case of an ordinary individual, makes it

necessary to scrutinise with greater care the words and

circumstances which are alleged to impose a trust."

Many earlier decisions were relied upon and with

reference to an earlier decision reported in (1880) 15 Ch D

1, it was observed as under:-.lm15

"In the Court of Appeal, this decision was unanimously

reversed. The court held that no trust, `in the sense of a

trust enforceable and cognizable in a Court of Law', has

been created, despite the use of the word `trust' in the

royal warrant: see per James LJ. Furthermore, the

Secretary of State for India in Council, though by statute

made capable of suing and being sued in that name, had not

been made a body corporate. All that had been done had been

to provide that the Secretary of State for the time being

should be the agent of the Crown for the distribution of the

property. James LJ regarded the consequences of holding

that there was a trust enforceable in the courts as `so

monstrous that persons would probably be startled at the

idea'. He referred to matters such as the right of every

beneficiary to sue for the administration of the trust and

have the accounts taken, and `imposing upon the officer of

State all the obligations which in this country are imposed

upon a person who chooses to accept a trust'. He also

emphasised the words at the end of the Royal Warrant as

showing clearly that questions were to be determined, not by

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the courts, but by the Secretary of State, with an ultimate

appeal to the Treasury, as advising the Queen. Baggallay

and Bramwell LJJ delivered concurring judgments, with the

latter emphasising the `monstrous inconvenience' and

`enormous expense of litigation' if there were a trust

enforceable by the courts, so that `one should be reluctant,

even if the words were much stronger than they are, to hold

that there is a trust'.

The House of Lords [(1882) 7 App Cas 619] unanimously

affirmed the Court of Appeal. In the leading speech, Lord

Selborne LC attahced some weight to the words in the Royal

Warrant being `the Secretary of State for India in Council',

and `for the time being', instead of his being described by

his personal name, as indicating that he was not intended to

be a trustee in the ordinary sense, but was intended to act

as a high officer of State. After discussing the Order in

council, Lord Selbourne LC quoted the part of the Royal

Warrant which contained the words `in trust for the use of',

and said:

`Now the words "in trust for" are quite consistent

with, and indeed are the proper manner of expressing, every

species of trust-a trust not only as regards those matters

which are the proper subjects for an equitable jurisdiction

to administer, but as respects higher matters, such as might

take place between the Crown and public officers

discharging, under the directions of the Crown, duties or

functions belonging to the prerogative and to the authority

of the Crown. In the lower sense they are matters within

the jurisdiction of, and to be administered by, the ordinary

Courts of Equiry; in the higher sense they are not. What

their sense is here, is the question to be determined,

looking at the whole instrument and at its nature and

effect."

Applying the principles laid down above, the

petitioner does not, on becoming the Minister of State for

Petroleum and Natural Gas, assume the role of a "trustee" in

the real sense nor does a "trust" come into existence in

respect of the Government properties.

This brings us to the definition of the offence of

"Criminal Breach of Trust" as defined in Section 405 of the

Indian Penal Code which, minus the Explanation, provides as

under:

"405. Criminal breach of trust.

Whoever, being in any manner entrusted with property,

or with any dominion over property, dishonestly

misappropriates or converts to his own use that property, or

dishonestly uses or disposes of that property in violation

of any direction of law prescribing the mode in which such

trust is to be discharged, or of any legal contract, express

or implied, which he has made touching the discharge of such

trust, or wilfully suffers any other person so to do,

commits 'criminal breach of trust'."

A trust contemplated by Section 405 would arise only

when there is an entrustment of property or dominion over

property. There has, therefore, to be a property belonging

to someone which is entrusted to the person accused of the

offence under Section 405. The entrustment of property

creates a trust which is only an obligation annexed to the

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ownership of the property and arises out of a confidence

reposed and accepted by the owner. This is what has been

laid in The State of Gujarat v. Jaswant Lal Nathalal AIR

1968 SC 700. In Rashmi Kumar vs. Mahesh Kumar Bhada (1997)

2 SCC 397, the essential ingredients for establishing the

offence of criminal breach of trust, as defined in Section

405, have been spelt out as follows:

"(i) entrusting any person with property or with any

dominion over property;

(ii) the person entrusted dishonestly misappropriating

or converting to his own use that property; or dishonestly

using or disposing of that property or wilfully suffering

any other person so to do in violation of any direction of

law prescribing the mode in which such trust is to be

discharged, or of any legal contract made touching the

discharge of such trust."

In this case, the earlier decision in Pratibha Rani

vs. Suraj Kumar (1985) 2 SCC 370 was affirmed. The case

essentially related to the entrustment of `Stridhan', but

nevertheless, it is important, in the sense that the

ingredients of the offence are set out and discussed. In

Chellor Mankkal Narayan Ittiravi Nambudiri vs. State of

Travancore-Cochin AIR 1953 SC 478 = 1954 Crl.LJ 102, it was

laid down that every breach of trust in the absence of mens

rea or dishonest intention cannot legally justify a criminal

prosecution.

The expressions "entrusted with property" and "with

any dominion over property" used in Section 405 came to be

considered by this Court in C.B.I. vs. Duncans Agro

Industries Ltd., Calcutta (1996) 5 SCC 591 = AIR 1996 SC

2452 and the view earlier expressed was reiterated. It was

held that the expression "entrusted" has wide and different

implication in different contexts and the expression "trust"

has been used to denote various kinds of relationships like

trustee and beneficiary, bailor and bailee, master and

servant, pledger and pledgee.

Mr. K. Parasaran contended that "power to allot

petrol pumps", and that too under discretionary quota,

cannot be treated as "property" within the meaning of

Section 405 of the Indian Penal Code. It is pointed out by

him that the Minister merely makes an order of allotment.

Subsequently, the Indian Oil Corporation or the Bharat

Petroleum Corporation enters into a dealership agreement

with that person and the business is regulated by the

agreement between the allottee and the Corporation (Indian

Oil Corporation or Bharat Petroleum Corporation). It is

also pointed out that in pursuance of the agreement, the

allottee invests money, constructs the building and sets up

the petrol pump. Mere exercise of "power to allot", it is

rightly contended, cannot, therefore, be treated as

"property", within the meaning of Section 405, capable of

being mis-utilised or mis-appropriated.

The word "property", used in Section 409, IPC means

the property which can be entrusted or over which dominion

may be exercised. This Court in R.K. Dalmia vs. Delhi

Administration, 1963 (1) SCR 253 = AIR 1962 SC 1821, held

that the word "property", used in Section 405 IPC, has to be

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interpreted in wider sense as it is not restricted by any

qualification under Section 405. It was held that whether

an offence defined in that Section could be said to have

been committed would depend not on the interpretation of the

word "property" but on the fact whether that particular kind

of property could be subject to the acts covered by that

Section. That is to say, the word "property" would cover

that kind of property with respect to which the offence

contemplated in that Section could be committed.

Having regard to the facts of the case discussed above

and the ingredients of the offence constituting criminal

breach of trust, as defined in Section 405, or the offence

as set out in Section 409 IPC, we are of the opinion that

there was no case made out against the petitioner for any

case being registered against him on the basis of the

Judgment passed by this Court nor was there any occasion to

direct an investigation by the CBI in that case.

The other direction, namely, the direction to the

C.B.I. to investigate "any other offence" is wholly

erroneous and cannot be sustained. Obviously, direction for

investigation can be given only if an offence is, prima

facie, found to have been committed or a person's

involvement is prima facie established, but a direction to

the C.B.I. to investigate whether any person has committed

an offence or not cannot be legally given. Such a direction

would be contrary to the concept and philosophy of "LIFE"

and "LIBERTY" guaranteed to a person under Article 21 of the

Constitution. This direction is in complete negation of

various decisions of this Court in which the concept of

"LIFE" has been explained in a manner which has infused

"LIFE" into the letters of Article 21.

"Right to Life", set out in Article 21, means

something more than mere survival or animal existence.

(See: State of Maharashtra vs. Chandrabhan Tale, AIR 1983

SC 803 = (1983) 3 SCC 387 = 1983 (3) SCR 327). This Right

also includes the right to live with human dignity and all

that goes along with it, namely, the bare necessities of

life such as adequate nutrition, clothing and shelter over

the head and facilities for reading, writing and expressing

oneself in differ forms, freely moving about and mixing and

commingling with fellow human beings. [See: Francis

Coralie Mullin vs. Administrator Union Territory of Delhi,

AIR 1981 SC 746 = (1981) 1 SCC 608 = 1981 (2) SCR 516; Olga

Tellis & Ors. vs. Bombay Municipal Corporation & Ors., AIR

1986 SC 180 (paras 33 and 34) = (1985) 3 SCC 545 = 1985

Supp. (2) SCR 51; Delhi Transport Corporation vs. D.T.C.

Mazdoor Congress & Ors., AIR 1991 SC 101 (paras 223, 234 and

259) = (1991) Supp. 1 SCC 600 = 1990 Supp. (1) SCR 142].

In Kharak Singh vs. State of U.P., AIR 1963 SC 1295 = 1964

(1) SCR 332, domiciliary visit by the Police was held to be

violative of Article 21.

A man has, therefore, to be left alone to enjoy "LIFE"

without fetters. He cannot be hounded out by the Police or

C.B.I. merely to find out whether he has committed any

offence or is living as a law-abiding citizen. Even under

Article 142 of the Constitution, such a direction cannot be

issued. While passing an order under Article 142 of the

Constitution, this Court cannot ignore the substantive

provision of law much less the constitutional rights

available to a person. (See : Supreme Court Bar

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Association vs. Union of India & Ors. (1998) 4 SCC 409 =

AIR 1998 SC 1895).

Mr. Gopal Subramaniam contended that the Court has

itself taken care to say that the C.B.I. in the matter of

investigation, would not be influenced by any observation

made in the Judgment and that it would independently hold

the investigation into the offence of criminal breach of

trust or any other offence. To this, there is a vehement

reply from Mr. Parasaran and we think he is right. It is

contended by him that this Court having recorded a finding

that the petitioner on being appointed as a Minister in the

Central Cabinet, held a trust on behalf of the people and

further that he cannot be permitted to commit breach of the

trust reposed in him by the people and still further that

the petitioner had deliberately acted in a wholly arbitrary

and unjust manner and that the allotments made by him were

wholly mala fide and for extraneous consideration, the

direction to the CBI not to be influenced by any

observations made by this Court in the Judgment, is in the

nature of palliative. The CBI has been directed to register

a case against the petitioner in respect of the allegations

dealt with and findings reached by this Court in the

Judgment under review. Once the findings are directed to be

treated as part of the First Information Report, the further

direction that the CBI shall not be influenced by any

observations made by this Court or the findings recorded by

it, is mere lullaby.

We may say that we maintain the rule of accountability

and liability of the Executive including public servants in

administrative matters and confirm that there should be

transparency in all what they do, specially where grant of

largesse is concerned. But, the present case is being

decided on its own peculiar facts and features in which, the

finding as to the commission of tort of misfeasance recorded

by this Court or the award of exemplary damages as also

direction for investigation by the C.B.I., cannot be

sustained on account of errors apparent on the face of the

record.

We may also point out that the powers of this Court

under Article 32 and that of the High Court under Article

226 are plenary powers and are not fettered by any legal

constraints. If the Court, in exercise of these powers has

itself committed a mistake, it has the plenary power to

correct its own mistake as pointed out by this Court in S.

Nagaraja & Ors. vs. State of Karnataka & Anr. 1993 Supp.

(4) SCC 595, in which it was observed as under :

"Justice is a virtue which transcends all barriers.

Neither the rules of procedure nor technicalities of law can

stand in its way. The order of the Court should not be

prejudicial to anyone. Rule of stare decisis is adhered for

consistency but it is not as inflexible in Administrative

Law as in Public Law. Even the law bends before justice.

Entire concept of writ jurisdiction exercised by the higher

courts is founded on equity and fairness. If the Court

finds that the order was passed under a mistake and it would

not have exercised the jurisdiction but for the erroneous

assumption which in fact did not exist and its perpetration

shall result in miscarriage of justice then it cannot on any

principle be precluded from rectifying the error. Mistake

is accepted as valid reason to recall an order."

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The Court also observed:

"Review literally and even judicially means

re-examination or re-consideration. Basic philosophy

inherent in it is the universal acceptance of human

fallibility. Yet in the realm of law the courts and even

the statutes lean strongly in favour of finality of decision

legally and properly made. Exceptions both statutorily and

judicially have been carved out to correct accidental

mistakes or miscarriage of justice. Even when there was no

statutory provision and no rules were framed by the highest

court indicating the circumstances in which it could rectify

its order the courts culled out such power to avoid abuse of

process or miscarriage of justice."

The Court further observed :

"Rectification of an order thus stems from the

fundamental principle that justice is above all. It is

exercised to remove the error and not for disturbing

finality."

We have already held above that in the judgment under

review, there are errors apparent on the face of the record,

which has resulted in serious miscarriage of justice. It is

for this reason only that we have proceeded to exercise the

power of review.

For the reasons stated above, the application for

Review is allowed. The direction for payment of Rs.50 lakhs

as exemplary damages as also the direction for a case being

registered by the C.B.I. against the petitioner for

Criminal Breach of Trust and investigation by them into that

offence and the further direction to investigate whether

petitioner has committed any other offence are recalled.

The amount of Rs.50 lakhs, if paid or deposited by the

petitioner with the Union of India, shall be refunded to

him. All applications for impleadment or intervention filed

on behalf of allottees are rejected.