Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6450 OF 2016

(Arising out of S.L.P. (Civil) 34373 OF 2014)

Orissa Olympic Association

Th. General Secretary ... Appellant

Versus

State of Orissa & Anr. ... Respondents

J U D G M E N T

Dipak Misra, J.

The assailment in the instant appeal, by special leave,

is to the legal acceptability of the judgment and order dated

29.11.2014 passed by the High Court of Orissa, Cuttack, in

First Appeal No. 158 of 2001 whereby the learned Single

Judge has set aside the judgment and decree dated

16.04.1999 and 21.04.1999 respectively passed by the

Page 2 learned Additional Civil Judge, Senior Division, Cuttack in

T.S. No. 312 of 1991 wherein the learned trial Judge had

decreed the suit of the plaintiff-appellant and permanently

restrained the defendants, the State of Orissa and its

functionaries, from disturbing the peaceful possession of

the plaintiff-association over the suit land.

2.The facts which are essential to be exposited for the

purpose of the present appeal are that the

appellant-association was granted lease of land measuring

acres 20.808 decimals appertaining to Sabik Settlement Plot

No. 156 and portions of Plot Nos. 139, 143, 155 and 177 for

the construction of a stadium. The lease deed was executed

on 04.09.1949 and registered on 24.09.1949. After

obtaining the lease of the land, the appellant raised high

compound walls enclosing the lease hold area. However, to

the north eastern side, a space measuring about 75

decimals was left outside the compound for the purpose of

parking in respect of which also the possession remained

with the appellant.

3.As further averred in the plaint, subsequent to the

2

Page 3 grant of lease in the year 1949, the association was granted

further areas for which fresh lease deed was executed. The

plaintiff has pleaded that the leasehold area of acres 20.808

decimals included an area of acres 6.520 decimals of Sabik

Plot No. 139. An area of 0.048 decimals of this plot was then

included in the barbed wire compound of the then

Secretariat which is in occupation of the Branch Recruiting

Office. It was put forth that though the recorded area of Plot

No. 139 was acres 7.345 decimals, yet on actual spot

measurement, it was acres 6.568 decimals. It was asserted

that the entire area was within the compound of the

association except the area of acres 0.075 decimals that was

left outside the compound for the purpose of parking and

the area of acres 0.048 decimals which was within the

Secretariat enclosure.

4.It was further asseverated in the plaint that during Hal

settlement operation, due to lack of supervision, certain

mistakes occurred in recording of different plots. As far as

Sabik Plot No. 139 is concerned, a part of it measuring an

area of acre 0.705 decimals was included in the Hal Plot

3

Page 4 No. 7 out of which acre 0.630 decimals were within the

compound of the plaintiff-association and acre 0.075

decimals was outside (0.630 + 0.075 = 0.705) the land.

Thus, the total land was acre 0.705 decimals. It had been

further set forth that the Hal Plot No. 7 also included

portions of Sabik Plot Nos. 137 and 140 and thereby Hal

Plot No. 7 with a total area of acre 0.880 decimals stood

included in the Hal Khata No. 203 which was recorded in

the name of the State as “rakhit”. It was contended that the

said record was erroneous in view of the fact that no part of

the said plot was in Khas possession of the State. As

indicated earlier, acres 0.705 decimals relating to Sabik Plot

No. 139 was in possession of the appellant. The remaining

area of acre 0.175 decimals relating to Sabik Plot No 137

and Plot No. 140 was in possession of the Branch recruiting

office. Prior to the settlement, there was no “rakhit” land by

the side of the road to be recorded in the name of the State.

A number of very old houses belonging to the plaintiff and

to the Branch recruiting office physically stood on this Hal

Plot No. 7. The Hal settlement Khatian was finally published

4

Page 5 on 11.04.1988 but it was not available to the public. It was

alleged that the land in question was in possession of the

association and further though a vast area covering about

twenty four acres was in possession, yet the incorrect

entry/inclusion in the Hal settlement could not be detected

earlier as the Hal Settlement Map was not available.

5.As set forth in the plaint, the Tahsildar initiated

proceeding against the appellant under the Orissa

Prevention of Land Encroachment Act, 1972 (for brevity,

“the Act”) vide Encroachment Case No. 213/1 of 1990/91

under the Act for eviction and the said proceeding was

based on the wrong record as mentioned above.

6. Because of these circumstances, the appellant, after

serving notice u/s 80 CPC instituted the suit for right, title

and interest and permanent injunction in respect of the suit

property, i.e., Khata No. 203, Plot No. 7 measuring acre

0.705 decimals corresponding to part of Sabik Plot No. 139

on the ground that the land had been leased out in its

favour. A relief was also sought to declare that the record of

Hal Plot No.7 in Hal Khata No. 203 so far as it related to

5

Page 6 acre 0.705 decimals of Sabik Plot No. 139 be declared

incorrect. That apart, the plaintiff alternatively prayed for a

declaration that it had perfected title over the suit land by

way of adverse possession.

7.The defendants filed the written statement admitting

that the plaintiff-association was in possession of the area

as claimed. It also accepted that the association had

constructed a massive stadium and many other houses and

the entire area was enclosed by high compound walls. The

defendants-respondents denied that the leasehold area of

acres 20.808 decimals included an area of acres 6.520

decimals of Sabik Plot No. 139. It was their stand that it

included an area of acres 6.222 decimals. It was averred

that an area acres 20.808 decimals had been leased out for

twenty years for construction of stadium as per Government

order in letter no. 17484 dated 29.6.1949 and lease deed

bearing No. 4524 dated 29.9.1949 was executed and

subsequently renewed vide Deed No. 2526 dated 19.4.1974

for a period of another twenty years. It was also pleaded

that the Government sanctioned an area acres 2.703

6

Page 7 decimals in their Sanction Order No. 11680 dated

22.2.1959 for construction of Indoor Stadium and an area

of acres 1.939 decimals for sinking a Swimming Pool,

Swimming Club and a Restaurant, but no lease deed in

respect of acres 1.939 has been executed. It was further

pleaded that during Hal settlement, the total area of acres

24.733 decimals has been recorded in the name of the

appellant-Association including an area of acres 1.222

decimals out of acres 1.939 as referred to above for which

no lease deed has yet been executed and the differential

area measuring acre 0.717 decimals (acres 1.939- acres

1.222) has been recorded during Hal settlement in

Government Rakhit Khata and the plaintiff-Association is in

unauthorized possession of acre 0.634 decimals out of the

said area of acre 0.717 for which encroachment case was

initiated and an order of eviction has been passed.

8.On the basis of the pleadings, the learned trial Judge

framed the following issues:-

1. Whether the plaintiff is in possession of the suit

land from the year 1949 and has perfected title by

7

Page 8 adverse possession?

2. Whether the suit land has been recorded in

Rakhit Khata due to lapses of the plaintiff

association?

3. Whether the suit land is liable to be settled on

lease basis in favour of the plaintiff?

4. Whether notice U/s 80- C.P.C. has not been

served?

5. To what relief, if any, the plaintiff is entitled to?

9.To prove its case, the plaintiff-association examined

the manager of the association and the defendants did not

examine any witness in support of their stand. As stated

earlier, the trial Judge, by its judgment dated 10.04.1999,

decreed the suit and permanently restrained the defendants

from disturbing the possession of the plaintiff-association

over the suit land. It was contended before the High Court

that the State Government had filed before the High Court

Misc. Case No. 497 of 2001 seeking leave to produce the

final order passed in O.P.L.E. Case No. 213/1/90-91 as

additional evidence and Misc. Case No. 121 of 2003 for

8

Page 9 appointment of a receiver.

10. It was further urged that the suit for declaration of

right, title and interest was not maintainable in view of the

provisions contained in the O.P.L.E. Act and the suit was

barred under Section 16 of the said Act. It was further

submitted that since the land had been recorded in the

rakhit khata, the direction to lease out the suit property and

the decree for permanent injunction as passed by the court

below was contrary to the provisions contained in Section 9

of C.P.C. and that from the conduct of some State officials,

it appeared that the interest of the State had not been

properly safeguarded and as a result, the decree had been

passed.

11.It is apt to note here that an application under Order I

Rule 10 CPC was filed in Misc. Case No. 122 of 2003 to

implead M/s. Sanjit Samal represented through Managing

Partner, registered office at Mahatab Road, Cuttack-12 as

respondent no. 3, Sanjit Samal, Managing Partner of M/s.

INCON ASSOCIATES, Mahatab Road, Cuttack - 12 as

respondent no. 4 and Sanjaya Behera, partner of M/s.

9

Page 10 INCON ASSOCIATES, S/o. Ashirbad Behera, Seikh Bazar,

Chandinichowk, P.S. Lalbag, Cuttack as respondent no.5.

The application was allowed on 17.11.2014 and the

aforesaid persons stood impleaded as co-respondents.

12.The High Court referred to the decisions in Gram

Panchayat of Village Naulakha v. Ujagar Singh and

others

1

and State of Rajasthan v. Harphool Singh

(dead) through his LRs

2

and came to hold as follows:-

“15. On perusal of the pleadings of the parties, it

appears that the Tahasildar, even though, was

arrayed as a defendant, was never authorized by

the Collector to file written statement admitting

the claim. The Collector, under the Code of Civil

Procedure, represents the State. No written

statement without the authorization of the

Collector could have been filed admitting the

claim of the plaintiff and the trial court ought not

to have accepted the said written statement as

that of the defendant no.1 - Collector, who

represented the State. It is further pertinent to

mention that the case record of the OPLE

Proceeding was kept away from the trial court

and no evidence, either oral or documentary, was

adduced from the side of the defence during the

trial. As indicated here-in-before, the present

appeal was also not filed with due promptitude

inasmuch as according to the Collector, Cuttack

vide his affidavit filed on 20.12.2002, the

conducting Advocate did not inform him the

1

AIR 2000 SC 3272

2

(2000) 5 SCC 652

10

Page 11 result of the suit till 17.4.2000 though the decree

was passed on 21.4.1999.

I have also perused the material evidence

adduced on behalf of the plaintiff-respondent. It

appears to me that the Tahasildar colluded with

the plaintiff and a collusive decree has been

passed. Therefore without expressing any opinion

on merit of the suit, I set- aside the judgment

dated 16.04.1999 and decree dated 21.04.1999

passed by the learned First Additional Civil Judge

(Senior Division),Cuttack, in Title Suit No.312 of

1991 and remit the matter back for adjudication

in accordance with law. This being an order of

open remand of the suit as per the provision

under Order 41, Rule-23A of the C.P.C., there

shall be a retrial of the suit before the court

below. If so advised, the defendants may amend

the written statement and adduce evidence which

the trial court shall permit in accordance with

law. The plaintiff also shall not be precluded from

amending his plaint or adducing additional

evidence. But this being a suit of the year 1991,

the trial court shall make endeavour to dispose of

the same within six months from the date of

communication of this order. Both the parties are

directed to cooperate with the trial court in this

regard.”

13.After so holding, the High Court dealt with the

application for appointment of receiver. It referred to the

agreement dated 20-7-1998 between the association and

M/s Incon Associates as a tenancy agreement for a monthly

rent of Rs. 17,000/-. It copiously produced the terms and

conditions of the agreement and, thereafter, it observed

11

Page 12 thus:-

“The Orissa Olympic Association is a public body.

Admittedly, no public notice was given inviting

applications to invest in the construction of

KALYAN MANDAP. It may be remembered that

the suit was filed after receipt of the notice in the

O.P.L. E. proceeding and the learned Civil Judge

(Senior Division), Cuttack by order dated

7.11.1991 passed the status quo order even

though the court was aware that for the self-

same land, a proceeding under the OPLE Act was

continuing. It is also admitted in the

objection/counter affidavit filed before this Court

that a portion of the land is situated over the

alleged encroached area. The order of status quo

was vacated by the learned Civil Judge (Senior

Division) by order dated 27.11.1996.

Therefore, the construction made appears,

prima facie, to be in violation of the statutory

prohibition and status quo order passed by the

trial court.”

14.The High Court took note of the fact that the

possession of the association was prima facie permissive in

nature and that the agreement entered into by the

association with M/s Incon Associates was under

mismanagement and, accordingly, appointed the Collector,

Cuttack to take over possession of the administration and

open an interest bearing Bank Account and deposit in the

said Account the rent collected from the tenants including

12

Page 13 the rent received from the Kalyan Mandap by M/s Incon

Associates. It further directed as follows:-

“20. M/s. INCON Associates is also directed to

deposit the advance money received from the

prospective occupants from today with the Collector

and the balance amount shall b.. e collected by the

Collector and deposited in the Bank account during

the pendency of the suit. The Collector, Cuttack is

also directed to secure the property and the income

thereof in due promptitude and to take all necessary

steps for preventing the same from any damage or

danger and report compliance to this Court through

the trial court.”

15.It is necessary to note here that looking to the affairs of

the association, the learned Single Judge directed:-

“… the Additional Director General of Police, Crime

Branch, Cuttack to make an enquiry into the entire

affairs of the Olympic Association, which in my

prima facie view, has become the parental property

of some individuals. If prima facie materials

emerged during enquiry, a case should be registered

under appropriate sections of the Indian Penal

Code or any other provisions of law, and the same

should be investigated. The report of the Additional

Director General of Police, Crime Branch and/or the

Investigating Officer, shall be placed before this

Court within three months from today.”

Again:-

“23. If the trial court arrives at conclusion that

taking advantage of the suit, the

plaintiff-respondents have enriched themselves, the

State will also be at liberty to recover the ill gotten

by initiating appropriate legal proceeding. The State

13

Page 14 is also directed to make appropriate audit in respect

of the financial affairs of the Olympic Association

and take suitable action as deemed proper under

law.”

16.We have heard Mr. Gopal Subramaniam and Mr. Raju

Ramachandran, learned senior counsel appearing for the

appellant assisted by Mr. Raghavendra S. Srivatsa,

Mr. Krishnayan Sen and Mr. Ashok Panigrahi learned

counsel for the State and Ms. Binu Tamta, learned counsel

for the Comptroller and Auditor General of India (CAG).

17.To appreciate the controversy, the orders passed by

this Court from time to time are necessary to be adverted to.

Initially, this Court had passed an order of stay of the

judgment of the High Court. Thereafter, the matter was

taken up on 19.1.2015 and, on that day, the Court

formulated certain questions of law which are as follows:-

“As pure questions of law arise in this special

leave petition, no counter affidavit need be filed.

The questions that emerge for consideration are:

i)Whether the lessee of the present character,

that is, the Orissa Olympic Association, could

have filed a suit for right, title and interest

against the State, that is, the superior landlord?

14

Page 15 ii)Whether the plea of adverse possession can

be set forth by the “Association” against the

State, if the suit property is beyond the area

granted under the lease deed?

iii)Assuming the area in question is a part of

the lease deed, whether the lessee can put forth a

plea of adverse possession?

iv)Assuming the suit land/property is situate

within the lease hold area, whether the grantor,

that is, the State Government, cannot take steps

to resume the land for violation of the terms and

conditions of the lease deed?

v)Whether the income that is received by use

of the suit property should not be taken into

account and why should it not be the legal

obligation of the petitioner-Association to satisfy

the Court that the accounts have been audited

and the amount derived has been properly

accounted for?

vi)If the accounts have not been audited, as

required in law, whether the individuals that look

after the affairs of the Association in respect of

the suit property, would be criminally liable or

not?

vii)Whether the persons in management of the

property could not be criminally proceeded, if it is

found that they have mismanaged and utilized

the income for their individual benefit?

15

Page 16 As we find, the High Court has appointed the

Collector, the respondent No.1, as the receiver.

The said part of the order reads as follows:-

“The appellant No.1 – State of Orissa,

represented by the Collector, Cuttack is

directed to take over possession of the

property, whereafter, the Collector shall open

an interest bearing Bank Account and deposit

in the said Account the rent collected from the

tenants including the rent received from the

Kalyan Mandap by M/s. INCON associates.

M/s. INCON Associates is also directed to

deposit the advance money received from the

prospective occupants from today with the

Collector and the balance amount shall be

collected by the Collector and deposited in the

Bank account during the pendency of the suit.

The Collector, Cuttack is also directed to

secure the property and the income thereof in

due promptitude and to take necessary steps

for preventing the same from any damage or

danger and report compliance to this Court

through the trial court.”

We have asked Mr. Raju Ramachandran, learned

senior counsel appearing for the petitioner to

satisfy us whether the said paragraph requires

interference and also whether proper

management of the buildings, whatsoever the

character/nature may be, situate on the disputed

land, is warranted or not.”

18.Thereafter, the Court referred to the directions issued

by the High Court for appointment of receiver and asked the

learned senior counsel appearing for the appellant to satisfy

16

Page 17 the Court whether the said paragraph required interference

and also whether proper management of the buildings,

whatsoever the character/nature may be, situate on the

disputed land, is warranted or not. The matter was

adjourned to 22.1.2015 for consideration of the necessary

arrangement pertaining to management and further hearing

of the special leave petition. The interim order passed on

11.12.2014 was allowed to remain in force till the next date

of hearing, i.e., 22.1.2015. On 22.1.2015, the Court, after

referring to the questions framed on the earlier occasion,

recorded as follows:-

“Mr. Gopal Subramaniam, learned senior counsel

appearing for the petitioner-Association has very

fairly conceded that as far as question No.(iii) is

concerned, the petitioner was wrongly advised to

put forth such a plea, for it is a well established

principle of law that a lessee cannot set forth a

plea of adverse possession. In view of the

aforesaid, issue no. (iii) stands closed.”

19.Thereafter, the Court adverted to issue no. (v) and, in

that context, the following order was passed:-

“On a query being made, learned senior counsel,

submitted that the suit was instituted in the year

1991 in respect of 0.705 acres claiming right,

title and interest and other reliefs and the income

received from the property situated on that area

17

Page 18 is regularly audited by a statutory auditor. In our

considered opinion, there has to be audit for the

purpose of verification so that we can eventually

be satisfied. Considering the facts and

circumstances in entirety, we direct that the

accounts in respect of “Kalyan Mandap” and 23

shops standing on the disputed area” (suit area

0,705 acres) be made by the Accountant General

of Orissa at Bhubaneswar. The said exercise shall

be completed within a period of six weeks. The

report of the Accountant General shall be placed

before this Court. The Registrar (Judicial) shall

send a copy of the order passed today to the

Accountant General of Orissa at Bhubaneswar by

fax/e-mail and regular post forthwith so that he

can take steps in promptitude.

As advised at present, we shall delve upon the

issue whether the necessary arrangement

pertaining to management of the aforesaid

property is required to be made. Without

expressing any opinion finally, as we cannot

today as the special leave petition is pending, we

think that there should be a Committee of

Management which shall take over possession of

the “Kalyan Mandap” and the 23 shops standing

on the area for the purpose of management. The

committee shall consist of the Collector, Cuttack

and two Additional District Magistrates to be

nominated by the Collector. The Committee shall

be liable to be supervised by the Secretary,

Revenue and Disaster Management. We hasten to

clarify, if there is any contract which has been

executed by the Association through M/s. INCON

Associates for the purpose of holding any

marriage that should be allowed to continue. But

all correspondence and discussion on every

aspect shall be done with the Committee. The

Collector may nominate one of the Committee

members for this purpose but the final decision

18

Page 19 shall be taken by the Committee. We have so

directed, as we do not want that the 4 allocation

of the marriage hall for the purpose of marriages

be cancelled. However, after today, M/s. INCON

Associates shall not enter into any fresh contract.

The Committee shall take over the management

by 25.01.2015 positively. Mr. Subramaniam,

learned senior counsel submitted that no one

shall raise any obstruction in taking over the

management. The Collector is at liberty to

requisition the police assistance, if he has to take

care of any obstruction regard being had to the

situation.

All the twenty-three shop keepers shall pay the

rent to the Committee and the income shall be

collected by the authorised agent of the

Committee. If anyone would deviate in doing so,

he would be liable for contempt of this Court. It

will be the duty of the Managing Committee to

see that the buildings are properly maintained.

We have modified the order of Stay to the

aforesaid extent.

The income derived from the date of taking over

possession and any income that is derived earlier

thereto shall be kept in an interest earning

account in the State Bank of India, Main branch,

near the Collectorate, Cuttack.

The documents that have been exhibited before

the trial court are permitted to be filed by either

of the parties.

This is an interim arrangement subject to final

adjudication of the special leave petition.”

20.The aforesaid order clearly states that it was an

19

Page 20 interim arrangement and that the matter was directed to be

listed on 24.3.2015. Be it noted, on that day, keeping in

view the direction issued by this Court on 22.1.2015, the

Accountant General of State of Odisha had submitted his

report in a sealed cover. Learned senior counsel appearing

for the appellant put forth that he may be granted an

opportunity to look into the report and file an objection duly

certified by the competent authority including the Auditor or

Chartered Accountant. A copy of the report of the

Accountant General, Odisha, was directed to be served on

the learned counsel for the appellant as well the learned

counsel for the State. At that juncture, a submission was

canvassed by the learned senior counsel for the appellant

and, after hearing at length, the following order was

passed:-

“At this juncture, another aspect need to be

stated. We are inclined to say so, as it is

submitted by Mr. Gopal Subramanium, learned

senior counsel appearing for the petitioner that

the report submitted by the Accountant General

cannot be accepted on the face value and that is

why, as stated earlier, he intends to file an

objection to the same. But a pregnant one, there

has to be finality to the audit. As advised at

present, we may say, in case an occasion arises

20

Page 21 to test the report and the objection to be filed

thereto, this Court may think of sending both the

reports to The Comptroller and Auditor General

of India, who shall scrutinize both the reports

and, if required, by sending a team of auditors.

We say no more on that score for the present.

Only a thought expressed.

At this juncture, we will be failing on our duty if

we do not take note of the stand quite vehemently

put forth by Mr. Gopal Subramanium that the

constructions are within the lease hold area and

they have been constructed to raise funds. To

deal with the said aspect, we would like the State

to file the lease deed in original, as the petitioner

has already filed the certified copy of the lease

deed. How the same would be addressed to shall

be thought of after there is delineation with

regard to the accounts.

An ancillary question may arise as to whether a

lessee, especially, Orissa Olympic Association,

which is involved in pubic duty, can be engaged

in this kind of activities on a mercurial or

spacious ground of raising funds to sustain the

stadium without the consent of the lessor.

Let the objection to the report of the Accountant

General be filed within two weeks hence. The

State Government shall file an affidavit duly

sworn by the competent authority giving the

nature of shops and the photographs thereof and

the photograph of the Kalyan Mandap. The said

affidavit by the State shall be filed within two

weeks from today.”

21.It is apt to note here that the matter was directed to be

listed on 21.4.2015 on which date the matter stood

21

Page 22 adjourned to 7.5.2015. Relying on the objection to the

report that had been submitted by the learned Accountant

General for the State of Odisha along with some other

reports, it was contended by the learned senior counsel for

the appellant that the Accountant General (General and

Social Sector Audit) had travelled beyond the order of this

Court commenting on various aspects of the case. For the

aforesaid purpose, he had referred to the relevant para of

the order dated 22.1.2015. Keeping in view the objection,

the Court directed as follows:-

“In view of the aforesaid, we would direct the

Accountant General, Odisha to restrict his audit

and comments to the said facets. We know that

the report submitted by him covers the same but

still we do not intend to segregate the same and,

therefore, we direct that a specific and precise

report be submitted to this Court within eight

weeks hence keeping in view the passage

reproduced hereinabove.”

22.Be it clarified, the passage that was referred to was

part of the order dated 22.1.2015. On that date, the State

of Odisha has produced certified copies of two lease deeds.

Keeping that in view, the Court, to arrive at the truth,

directed as follows:-

22

Page 23 “At this juncture, we may note with profit that in

pursuance of our order dated 24.03.2015, the

State of Odisha has produced the certified copies

of two lease deeds; one dated 04.09.1949 and the

other dated 19.04.1974. Keeping in view the two

lease deeds and the schedule of property

mentioned therein, we think it appropriate to

constitute a Committee of judicial officers who

shall, with the help and assistance of the revenue

authorities, shall measure the lease hold area

and submit a report whether the 23 shops and

the Kalyan Mandap are within the said lease hold

area or not. Regard being had to the controversy

involved, we appoint the District Judge, Cuttack

to be the Chairman of the committee and request

the 3 Chief Justice/Acting Chief Justice to

nominate two other Additional District Judges

who may be from Cuttack District or other

districts. Needless to say, the learned Chief

Justice/Acting Chief Justice shall nominate the

Additional District Judges who have experience

in the field. The Principal Secretary, Revenue and

Disaster Management shall extend the fullest

cooperation in consultation with the Chief

Secretary of the State and shall provide all the

facilities to the Committee so that there can be

proper measurement and no deviancy is shown.

At the time of measurement, the representative

(only one) of the petitioner-Association shall

remain present. A notice shall be given by the

Chairman of the Committee about the date the

measurement to the Association. Mr. Ashok

Panigrahi, learned counsel for the State

submitted that apart from the registered lease

deeds which have been filed before this Court,

the original lease deeds shall also be made

available to the Chairman of the Committee.”

23

Page 24 23.When the matter was taken up on the next occasion,

the Accountant and Auditor General, Odisha, had

submitted report pertaining to the accounts in respect of

Kalyan Mandap and 23 shops standing on the disputed area

(0.75 acre). We shall refer to the said report when we advert

to it and the objections filed thereto.

24.On that day, the Court referred to the earlier order

dated 7.5.2015 wherein a direction was issued for

measurement of the leasehold area and submission of the

report whether the 23 shops and the “Kalyan Mandap” are

within the said leasehold area or not. A letter was received

by the Registrar from the competent authority of the High

Court of Orissa as well as the District Judge, Cuttack,

seeking extension of time and, accordingly, time was

extended till end of September, 2015 to submit the report.

Within the extended time, the Committee submitted its

report on 29.9.2015 along with certain maps in a sealed

cover. A direction was issued to hand over the copies of the

reports to the learned counsel for the appellant, learned

counsel for the State and also learned counsel for the

24

Page 25 Accountant General. A further direction was issued to

make photocopies of the maps and hand over the same to

the learned counsel for the parties on payment of costs.

Liberty was granted to file objections, if any, within four

weeks. Even on that day, i.e., on 8.10.2015, Mr. Gopal

Subramaniam, learned senior counsel for the appellant,

submitted that though the appellant would be filing its

objections to the report submitted by the Accountant

General, yet there is a fundamental fallacy that the said

authority has not taken into consideration the effect of

capital acquisition of assets by the Orissa Olympic

Association. He further urged that the said stand would

withstand close scrutiny if, in the ultimate eventuate, the

right, title and interest of the Association is established in

respect of the disputed 23 shops and the Kalyan Mandap.

Learned counsel for the State, at that juncture, read out a

passage from the judgment of the High Court. Noting the

said submission, the Court stated thus:-

“At this juncture, Mr. Panigrahi, learned counsel

for the State has read out a passage from the

impugned judgment which is quite shocking if it

25

Page 26 is factually correct. Submission of Mr. Panigrahi

is that the stand of the Orissa Olympic

Association had invested the money for the

benefit of the association is an absolute myth, for

one of the partners of the M/s. INCON Associates

is the son of the General Secretary of the

petitioner-Association before this Court. Hence,

submits Mr. Panigrahi, the arrangement was so

made with the sole purpose of benefiting M/s.

INCON Associates. This aspect requires to be

seriously dwelt upon, for there is a conflict of

interest and it may enter into the realm of fiscal

impropriety.

Learned counsel for the petitioner is at liberty to

file a reply to the said assertion and Mr.

Panigrahi is also given liberty 3 to file appropriate

documents and response to bolster his

submission.”

25.On the next date of hearing, we were apprised by the

learned counsel for the State that the two partners of M/s.

INCON Associates are the son and son-in-law of Mr. Asirbad

Behera, General Secretary of the Orissa Olympic

Association. The said fact was disputed by the learned

senior counsel for the appellant. The Court, upon perusal

of the document, found that as far as the son is concerned,

he was a partner in M/s. INCON Associates. It noted the

submission of the learned counsel for the appellant to the

effect that there is no malfeasance or misfeasance and that

26

Page 27 there were circumstances for which the tender was floated

and the firm came in. Learned senior counsel submitted

that when the contract was entered into for the first time in

1998, the son was not a partner. In reply, Mr. Panigrahi

would submit that he was inducted as a partner at a later

stage.

26.Taking note of these facts, the Court directed as

follows:-

“Be that as it may, prima facie, the conflict of

interest is manifest. Regard being had to the facts

and circumstances of the case, we direct that Mr.

Asirbad Behera, General Secretary of the Orissa

Olympic Association is restrained from

functioning as the Secretary of the Association till

the next date of hearing. Needless to say, this is

without prejudice to the contentions to be raised

in the special leave petition.”

27.Having referred to the record of proceedings, we should

record the submissions of learned counsel for the parties. It

is urged on behalf of the appellant that by Orissa Act No. 1

of 1991, the Government Land Settlement Act, 1962 (for

short, “the 1962 Act”) was amended, and Section 3(4) of the

Act treated an expired lease as a deemed lease. By virtue of

this provision, the lease in respect of the Appellant

27

Page 28 Association continued. The Appellant Association had

applied to the State Government for a permanent lease in

terms of Section 3(4) of the Orissa Government Land

Settlement Act, 1962, as amended by Orissa Act No. 1 of

1991. The Tahsildar recommended that the lands be

permanently settled in favour of the Association and the

Collector approved the same on 16.08.1995. However, since

there were discrepancies in respect of some issues including

that in respect of the land comprised in Hal Plot No.7, the

Association did not execute the lease deed and sought

rectification of the errors. It is submitted that during

permanent lease proceedings, the Association objected that

the demarcation of plot comprising of an area of acres

20.808 dec. is not correct. The appellant objected to the

same contending that Plot No.7 should form part of Sabik

Plot No. 139. Accordingly, the appellant requested that the

mistake should be corrected or finalization of Plot No.7

should await till the dispute attains finality and, thus, the

association did not execute the lease deed. Be that as it

may, the said order having been set aside by the Revenue

28

Page 29 Divisional Commissioner, the Association challenged the

order before the High Court on principle. That apart, in view

of the recent amendment to the 1962 Act on 26.02.2009,

the Khasmahal properties are to be permanently settled

and, accordingly, the pending cases are to be disposed of in

accordance with the amendment. The order for permanent

settlement has been set aside in appeal which is the subject

matter before the High Court, in Writ Petition (C) No. 5360

of 2002. In the writ petition, it has been prayed that the writ

petitioner be held to be deemed lessee and that the lease

subsists. The High Court has passed an interim order dated

4.12.2002 directing that status quo in respect of possession

of the land be maintained. The writ petition is pending

before the High Court. It is submitted that even if the

permanent lease did not materialize, the 1991 amendment

provided for a deemed lease and in view of the 2009

amendment in the 1962 Act, the lands have to be

permanently settled in favour of the association.

28.It is further contended by Mr. Gopal Subramaniam

that a suit is not barred under the OPLE Act but the High

29

Page 30 Court has erred without appreciating the law in the field,

especially, the decisions in Government of Andhra

Pradesh v. Thummala Krishna Rao and another

3

, State

v. Bhanu Mali

4

, Durgadevi Agarwalla v. State of

Orissa

5

, and Labangalata Panda v. State of Orissa

6

.

Emphasis has also been laid on the stand put forth by the

State of Orissa in its written submissions, for it was not the

stand of the State in the written statement that the suit

land was its property and not that of the association.

29.Commenting on the report of the Committee headed by

the District Judge, it is contended that the committee was

conferred the responsibility to measure the leasehold area

(pertaining to the lease deed registered on 24.09.1949) and

to see if the 23 shops and the Kalyan Mandap are within the

same or not. Criticising the said report, it is urged that the

said Report, on measurement, has based reliance on Hal

Settlement of 1988 which itself is the bone of contention

between the appellant association and the State

3

(1982) 2 SCC 134

4

AIR 1996 Orissa 199

5

AIR 2014 Orissa 140

6

AIR 2002 Orissa 147

30

Page 31 Government and is, in fact, the very cause of action for the

present lis. Therefore, the very basis of the exercise

undertaken by the Committee is erroneous resulting in a

wrong report. It is put forth that the Committee has

travelled beyond the scope of reference inasmuch as the

scope of reference was restricted to measure the leasehold

area of acres 20.08 decimals leased out vide lease deed

dated 24.9.1949 and the renewed lease deed dated

19.4.1974. The Committee, however, had not undertaken

the said exercise keeping in view the schedule to the original

lease deed of 1949 or the schedule to the renewed lease

deed of 1974. It is also contended that though the

Committee had access to the maps prepared by the

government authorities which are contemporaneous with

the time when the lease deed was executed in the year

1949, yet the same were not considered as a reference point

for the measurement. On the contrary, the Committee

travelled beyond the scope of the reference and recorded

erroneous conclusions by taking into account irrelevant

considerations. That apart, the Committee has omitted

31

Page 32 available relevant records and has proceeded on the basis

that measurement had to be carried out in the absence of

Government producing the relevant records. It is further

canvassed that Exhibit 1 is the copy of the application of the

Appellant Association, along with a map, for grant of lease

of an area of 20.808 acres; Exhibit 4 is the Sabik settlement

map of 1927-1928 as revised in 1949; Exhibit 6 is the map

prepared by the Khasmahal Amin on 1.4.1953 showing the

lands, demarcated by the boundaries, that had been given

by the Government to the Appellant in 1949 and in 1950;

and Exhibit 7 is the Relay Map which is superimposed map

showing the Sabik Plot numbers that got converted into Hal

Plot Numbers at the Hal Settlement of 1988-1989. It is

urged by the learned senior counsel that the aforesaid

documents clinch the issue of the exact measurement and

the extent of land leased to the Appellant Association under

the lease deed dated 24.09.1949; that the issue of the exact

extent of land leased to the Appellant is the subject matter

of the Civil Suit; that the construction made thereon,

namely, the Kalyan Mandap and 23 shops is what is

32

Page 33 covered by the order of this Court dated 07.05.15; that the

task assigned to the Committee by this Court was to find

out, by measurements, whether the Kalyan Mandap and the

23 shops are within the leasehold area; that the aforesaid

documents which are part of record and were readily

available to the Committee while carrying out

measurements to find out the extent of land covered by the

Lease Deed dated 24.09.1949 as renewed by the Deed dated

19.04.1974; that the Committee chose to ignore the said

crucial documents which would clinch the issue and

lamented that the government did not produce the relevant

records but nevertheless proceeded to carry out the

measurements as per its own understanding and

parameters; and that to carry out the exercise of

measurement to determine the extent of land covered by a

grant/document, there has to be a starting point and the

boundaries to the subject matter of the grant/document

have to be ascertained. It is argued that while identifying a

piece of immovable property, the boundaries prevail over the

extent/measurements and that has been held in

33

Page 34 Sheyodyhan Singh v. Sanicharakuer

7

and for the said

purpose, the documents mentioned in the exhibits assume

great significance.

30.Learned counsel appearing for the appellant would

further submit that Exhibit 1 is the application for grant of

lease along with a map identifying the land of which lease

was sought. Exhibit 4 is the Sabik settlement map of

1927-28 as revised in 1949. This map shows the location of

Sabik Plot numbers in the relevant area. It is important to

note that this map is relatable to the General Revenue

Record finalized after 25.10.1949 which is subsequent to

the execution of lease on 24.09.1949 in favour of the

Appellant. In this map, a sub division of Sabik Plot No. 139

as Plot No. 139/1370 is shown. At the time the lease was

executed in favour of the Appellant, Sabik Plot No.139 was a

whole plot number and the Lease Deed specifically records

that a portion of Sabik Plot No. 139 forms part of the entire

leasehold area. Which portion of Sabik Plot No. 139 is

within the leasehold area is actually the subject matter of

7

(1962) 2 SCR 753

34

Page 35 the civil suit and it is the specific case of the

plaintiff-Appellant that the leasehold area does not include

the land in the newly created Sabik Plot No. 139/1370 but

includes the land in the original Sabik Plot No. 139. It is

further pleaded that while recording the Record of Rights,

the individual extents of land in the original Plot No.139 and

newly created Plot No. 139/1370 were wrongly recorded.

That is how the confusion was sought to be created as to

the identity of that portion of Sabik Plot No. 139 which is

within the leasehold area of the appellant. That portion of

the original Sabik Plot No.139 which is within the leasehold

area is clearly identified in Exhibit 6 map prepared by the

Khasmahal Amin in 1953 by showing the boundaries to that

plot number. The details emerging from Exhibit 6 map will

be elucidated in the ensuing paragraphs. Additionally, it is

contended that Exhibit 6 is the Government map prepared

by the Khasmahal Amin on 01.04.1953. The Appellant

Association had a lease for 20.808 Acres in 1949 and a

further extent was granted in 1950. The Association had

requested the Government to grant another extent of land in

35

Page 36 1953. In this context, the Khasmahal officer directed a

survey of the land already held by the Association and of the

land proposed to be given to the Association. Upon survey

and measurement to scale, a detailed map was prepared in

parallel and one copy was given to the Association and the

other was retained by the Government. The map indicates

the individual plot numbers and the boundaries on all

sides.

31.Referring to the boundaries, it is urged that had the

Committee carried out the measurement as per the

boundaries in the admitted map, the exact extent of land,

which is the subject matter of the suit, could have been

ascertained. Various other aspects have been highlighted to

show that the report of the Committee constituted by this

Court is wrong. It is also highlighted that the report of the

Committee is wrong, that contemporaneous maps have not

been taken into consideration and the reliance placed on

Hal settlement was also incorrect. Learned counsel would

submit that there are manifest errors in the findings

recorded by the Committee.

36

Page 37 32.Mr. Panigrahi, learned counsel for the State, would

submit that the report of the Committee headed by the

District Judge is absolutely flawless because the Sabik

Record of Rights of Holding No. 366 was finally published in

1931. Copy of the said ROR available in the District Record

Room of the Collectorate, Cuttack, has been placed on

record as Annexure-30 of the District Judge Committee

Report. Since the Settlement was closed prematurely and as

such the record of right did not reach finality with final

publication, the map showing creation of part plot No.

139/1370 which is relied upon by the appellant has no

validity as it is not backed by an authentic finally published

record of right. That apart, in the subsequent settlement

operation, the record of right and map of the village - Unit

No. 10, Cantonment, were finally published during the year

1988-89 under the provisions of Orissa Survey and

Settlement Act, 1958. Learned counsel would submit that

at Khanapuri stage in the settlement operation, ‘Yadast’ is

prepared by the Amin visiting each and every plot in a

village and in this ‘Yadast’, details of information on field

37

Page 38 position are noted and map is prepared accordingly. The

portion of land on which the ‘Kalyan Mandap’ and 23 shops

stand is in Hal Plot No. 7(p) of Holding No. 230 of mouza

Unit-10, Cantonment. In Yadast No. 60/1, which relates to

this land, there is mention of occupation of the Government

and no mention of occupation of the Orissa Olympic

Association. It is contended by him that the so-called Bata

Plot No. 139/1370 co-relates to Hal Plot No. 165(p). From

the Yadast No. 67 it is evident that the said land was

coming within the leased out area acres 20.808 and was

under occupation of the Odisha Olympic Association. The

sports hostel stands over the so-called Bata plot shown in

the Settlement map and still now, the sports hostel exists

there which corresponds to Hal Plot No. 165(p). It is evident

that the portion of land on which the ‘Kalyan Mandap’ and

23 shops stand are outside the limit of the leased out area

of acres 20.808 dcl. Therefore, he would urge that the land

on which the ‘Kalyan Mandap’ (Barabati Palace) and 23

shops stand does not come within the leased out area of

acres 6.222 from out of Sabik Plot No. 139(p). Mr.

38

Page 39 Panigrahi also contended that Section 16 of the OPLE Act

specifically bars the institution of any such suit or legal

proceedings and, therefore, the conclusion of the High Court

on the said score cannot be found to be flawed. He has also

raised the contention with regard to non-sustainability of

the plea of adverse possession.

33.It is apt to mention here that learned counsel for the

parties have also highlighted many an aspect with regard to

the report of the Accountant General, which we shall advert

to at a later stage. First, we shall deal with two facets,

namely, (i) whether the report of the Committee constituted

by this Court as regards the leasehold area is to be accepted

or not and (ii) assuming the land is a part of the leasehold

area, whether the same can be resumed keeping in view the

present use.

34.To appreciate the objection filed by the appellant, we

think it seemly to reproduce the reports. The Report of the

Committee comprising of District & Sessions Judge,

Cuttack and two Additional District & Sessions Judges

dated 29.09.2015 is reproduced below:-

“Accordingly, the committee consisting of

39

Page 40 Sri Satya Narayan Mishra, District and Sessions

Judge, Cuttack, as the Chairman of the

Committee and the nominated members held

several rounds of meetings to carry out the

direction given by the Hon’ble Apex Court in the

matter.

1.1As per minutes dated 04.07.2015 and

25.07.2015, the revenue authorities were

requested to produce the following documents:-

1.Original Lease deeds

2.Sabik Settlement Maps of Lease hold area

as well as the maps of corresponding to Hal

plots.

3.Plot index.

4.Lease case record in Case No. 294 of 1995.

5.Government sanction order No. 7484 dated

29.06.1949.

6.Document regarding demarcation of

leasehold land by Revenue Authorities on

measurement.

vide Annexure – 25, Annexure 25/a & Annexure 25/b.

1.2 Despite repeated requests the Revenue

Authorities did not produce the following

documents:

(i)The original lease deeds of 1949 and 1975

(ii)Government of Orissa Revenue Department

Order No. 7484 dated 29.06.1949 and

(iii)Document regarding demarcation of

leasehold land by Revenue Authorities on

measurement.

1.3Since the two lease deeds were not

produced by the Revenue Authorities the

Committee issued requisition for placing of the

case record in T.S. No. 312 of 1991 before the

Committee for reference of the original lease

40

Page 41 deeds

2.The Committee examined the documents,

the related case records, such as record in T.S.

No. 312 of 1991, encroachment case etc., maps

and other connected materials placed before it.

The Committee carried out elaborate

discussions from various angles to determine the

modalities of measurement to carry out the

direction of the Hon’ble Apex Court.

3.Before proceeding further, the Committee

resolved to place the following events in sequence

for proper appreciation of the matter:-

(11 26/27.01.1949-Orissa Olympic Association (hereinafter

to be referred as the OOA) made application to

the Revenue Commissioner of Orissa for lease of

Ac.20.808 decimals of land from Sabik Plot No.

156, portion of Sabik Plot Nos. 139, 143, 155 and

177 vide Annex – 1.

A Sketch map was attached to the

application vide Annex-1/a.

(2) 29.06.1949-Lease was sanctioned by Government of

Orissa, Revenue Department Order No. 7484

dated 29.06.1949.

(3) The Revenue Authorities demarcated the lease

hold area on measurement. Date and order of

measurement are not available.

(4) 24.09.1949-Pursuant to sanction order the Lease Deed

bearing No. 4525 was executed before the Sub

41

Page 42 Registrar, Cuttack on dated 24.09.1949 vide

Annex-2.

(5) 19.04.1974-Lease was renewed for a period of further 20

years from 04.09.1969 to 03.03.1989 vide Lease

Deed No. 2526 dated 19.04.1974 vide Annex – 3.

(6) 11.04.1988 – Hal ROR was published.

Ac.21.549 decimals of land were published

in the name of the OOA under Khata No. 187 vide

Annex-4.

(7) 19.10.1990-Encroachment case No.213/1 of 1990-91

was initiated against the OOA for encroachment

made in Hal Plot No. 7 vide Annex-5.

(8) 02.07.1991-T.S. No.312/1991 was instituted by the

OOA against the State for declaration of title

claiming Hal Plot No. 7 as part of the leasehold

property and in alternative through adverse

possession in respect of an area measuring

Ac.0.705 decimals appertaining to Hal Plot No. 7

vide the plaint Annex-6 and the written

statement vide Annex- 6/a.

(9) 21.06.1995-The OOA made application on 21.06.1995

for permanent lease enclosing statement of land

under the possession of the OOA inside the

boundary relating to 9 Hal plots vide the

application Annex-7 and statement of land vide

Annex-7/a & Annex-7/b.

This led to the institution of lease case No.

294/1995.

42

Page 43 (10) 21.06.1995-On the same day i.e. on 21.06.1995 the

Tahasildar asked for the R.I. report vide Annex-8.

(11) 21.06.1995-The R.I. submitted the report on the same

day i.e on. 21.06.1995 vide Annex 8/a.

(12) 22.07.1995-The Tahasildar permanently settled the land

in favour of the OOA vide Annex-9.

(13) 16.08.1995-The Collector approved the order of the

Tahasildar dated 22.08.1995 vide Annex-10.

(14) 16.04.1999-The suit in T.S. No. 312/1991 was decreed

in favour of the OOA vide Judgment Annex-11

and the Decree Annex-11/a.

(15) 01.11.2001-By order dated 01.11.2002 passed in OGLS

Appeal No. 2/2002 the RDC allowed the appeal

and set aside the order dated 22.07.1995 of the

Tahasildar and order dated 16.08.1995 of the

Collector vide Annex-12.

(16) 05.11.2002-Pursuant to the order of the R.D.C. the

Tahasildar, Sardar kept the lease hold land

measuring Ac.20.808 decimals in Government

Khata and directed for correction of ROR vide

Annex-13.

(17) 04.12.2002-Hon’ble High Court of Orissa by order dated

04.12.2002 passed in M.C.No. 3999 of 2002

arising out of WP© No. 5360/2002 directed,

“status quo as on date in respect of possession of

43

Page 44 the disputed land shall be maintained” vide

Annex-14.

(18) 29.11.2014-Hon’ble High Court of Orissa allowed first

appeal No.158/2001, set aside the judgment and

decree passed in T.S.No. 312/1991 and

remanded the suit for fresh disposal vide

Annex-15.

(19) The Special Leave to Appeal (Civil) No.

34373/2014 was instituted by the OOA in the

Hon’ble Apex Court wherein direction has been

given to this Committee to submit the report vide

Annex-16.

(20) 19.08.1969-Lease deed for Ac.2.703 decimal comprising

of plot No. 145 (Ac.1.116 decimals), plot No.

148(Ac.1.147), plot No. 155 (Ac.0.440) executed

in favour of the OOA vide Annex-17.

(21) 19.07.2003-By order dated 19.07.2003 passed in

Resumption Proceeding Case No. 19 of 2002,

determined the lease and resumed the land to

Government Khata vide Annex-18.

(22) 20.04.2015:

Pursuant to above order, Tahasildar took

the land into the Government Khata vide

Annex-19.

(23) ROR is accordingly corrected vide Annex-20.

(24) 22.05.2004:

By order dated 22.05.2004, passed by

Tahasildar in R.P. 188/2003, took Ac.1.222

decimal of land out of plot No.165 area Ac.5.000

decimal into Government Khata vide Annex-21.

44

Page 45 (25) 19.08.2004

The ROR is corrected accordingly vide

Annex-22.

4.Thus the real dispute between the parties is

relating to Ac.24.733 decimal. Out of that lease

hold area of Ac. 2.703 of 1969 has already been

taken in to Government Khata and similarly Ac.

1.222 decimal out of Hal Plot No. 165 has already

been taken in to Government Khata as narrated

earlier. The lease of Ac. 20.808 decimal has been

cancelled and the said area has already been

taken into Government Khata but the matter has

been stayed by Hon’ble High Court of Orissa in

M.C. No. 3999 of 2002 arising out of W.P(C) No.

5360/2002.

Thus the present controversy is confined to

measure the leasehold area of Ac. 20.808 decimal

and to determine the location of Kalyan Mandap

(Barabati Palace) and 23 shops.

5.Keeping the above facts in the background

the Committee determined its course of action.

A Team consisting of Amins having

necessary training and sufficient experience was

constituted to carry out the measurement in

presence and the supervision of the Committee.

6. The names of the Amins with the names of

their respective departments are as follows:-

1. Pradipta Kumar Biswal, A.S.O. Department of Survey

2. Bateswar Hota, Inspector & Settlement, Cuttack

3. Chturbhuja Dhal, Inspector

4. Dhurba Charan Bhoi, Amin

5. Laxmidhara Mishra, Salarid Amin Civil Courts, Cuttack

6. Trilochan Sahu, Salarid Amin

45

Page 46 7. Baikuntha Ch. Baral, Salarid Amin(Retd) Civil Courts

Kendrapara

8. Padmanabha Acharya, R.I. Office of the

Tahasildar,

9.Dhanjaya Behera, Amin Cuttack Sadar.

Vide the Minutes of the Committee dated 21.08.2015.

6.1The Committee also resolved to carry out

the measurement with ETS and DGPS by the

trained technicians under supervision of the

authority of Orissa Space Application

Center(ORSAC), Bhubaneswar and accordingly

requisitions were issued by the Tahasildar,

Cuttack vide Annex-26 and Annex-26/a.

7.The Committee resolved to commence the

measurement from 9 .30 a.m. of 02.09.2015. The

day, date and schedule of the measurement were

duly notified to all concerned in advance vide

Annex-27.

8.The Committee examined the Sabik Map

exhibited by the OOA in T.S. 312/1991 under

Ext.4 and the Sabik Map of 1927-28 settlement

provided by Revenue Authority.

On close scrutiny, the Committee noticed

variation in two maps i.e. fraction plot bearing

No. 139/1370 as reflected in Ext.4 found to be

absent in the map provided by the Revenue

Authority.

The point for consideration is whether to

consider fraction Plot No. 139/1370 while

conducting the measurement to find the

leasehold area.

8.1Undisputedly Lease was executed on

24.09.1949 for Ac.20.808 decimals of land which

46

Page 47 was renewed by another Registered Lease Deed

in 1974.

As per pleading of the OOA at para-5 of the

plaint, the leasehold area of Ac.20.808 decimals

includes an area of Ac.6.520 decimal of Sabik

Plot No. 139. As revealed from the application of

the OOA, in Lease Case No. 294 of 1995 an area

of Ac.6.222 decimal out of Sabik Plot No. 139 was

leased out along with other areas in total

measuring Ac.20.808 decimals.

Though, the said lease of 1995 was

subsequently cancelled by the RDC in the year

2002, the OOA has never disputed/questioned

allocation of Ac.6.222 decimals out of Sabik Plot

No. 139. So it is clear that the OOA had been

granted lease of an area of Ac.6.222 decimals out

of Sabik Plot No. 139.

The Settlement Officer, Measure Settlement

Office, Cuttack reported that fraction Plot No.

1370 or 139/1370 was not in existence after

1927-28 settlement vide his letter No.3408, dated

26.09.2015, Annex-28.

The fraction plot 139/1370 was created

after 25.10.1949 vide the letter No. 3616, dated

26.09.2015 of the Collector, Cuttack, Annex-28/a

and as per Khasmal ROR published after

25.10.1949. So it is apparent that the lease was

executed out of original Sabik Plot No.139

measuring Ac.9.290 decimal. Extent of original

Sabik Plot No. 139 was Ac.9.290 decimal as per

1932 Sabik ROR vide Annex-30.

Further after division of original Sabik Plot

No. 139 into 139 and 139/1370 the residual of

original Sabik Plot No. 139 became Ac.7.345

decimal. Adding of this residual Ac.7.345 decimal

47

Page 48 with Ac.1.945 decimal of fraction plot No.

139/1370, the total area became Ac.9.290

decimal which is thus to be measured entirely by

the Measurement Team. Since lease has been

granted to the extent of Ac.6.222 decimal out of

the Sabik Plot No.139, the leasehold area does

not cover the entire residual area of Plot No. 139.

Hence, consideration of fraction plot NO.

139/1370 is of little consequence. Accordingly

the Committee resolved to carry out the

measurement ignoring the fraction plot No.

139/1370.

9.As per the programme the Committee

proceeded to the spot on date fixed. The

representative of the Revenue Authority i.e.

Tahasildar, Cuttack Sadar and representative of

the OOA, Sri Bhakta Hari Mohanty, Senior

Advocate were present. Spot notice was served on

them vide Annex-31.

10.Before the commencement of the

measurement the Committee held discussion

with the members of the Measurement Team

including DGPS and ETS Team.

Sabik and Hal Maps, Sabik and Hal RORs,

Copies of the pleadings of the TS 312 of 1991 and

the direction of the Hon’ble Apex Court were

handed over to the two teams of the

measurement.

11.The specific direction of the Hon’ble Apex

Court passed by order dated 07.05.2015 in SLA

© No. 34373/2014 as follows:

“Keeping in view the two lease deeds and

the schedule of property mentioned therein,

we think it appropriate to constitute a

Committee of the Judicial Offices who shall,

48

Page 49 with the help and assistance of the Revenue

Authorities, shall measure the lease hold

area and submit a report whether the 23

shops and Kalyan Mandap are within the

said lease hold area or not” vide Annex-32.

12.The Lease Deeds of 1949 and 1974 bear

identical sabik leasehold plots and total lease

area as follows:-

“Cuttack Cantonment Khasmahal Tauzi

No. 5458 Mouza Cantonment Samil

Bungalow block, Thana and Sub-Registrar

Sadar, Cuttack(Thana No.197), plot No.

156,

and

portions of plot No.139,143,155 and 177

area Ac.20.808 decimals” vide Annex-2&3.

12.1The relevant portion of the averments of the

plaint of the OOA in TS 312 of 1991 regarding

leasehold area reads as follows:-

“Para-3: The sketch map attached to the

application dated 26/27

th

January, 1949

and the sanction order 29

th

June 1949 will

clearly indicate that the lease hold area was

to the adjoining south of

Cantonment-Tulasipur Road. After

obtaining the lease of the land the

Association raised high compound walls

encroaching the lease hold area” vide

Anenx-33.

12.2 It is not out of place to mention that on

21.06.1995 the OOA applied to the Tahasildar

Cuttack for permanent lease with statements of

land under its possession and the Tahasildar

49

Page 50 granted lease for Ac.20.808 decimals vide

Annex-9.

The above lease deed of 195 clearly shows

the details of the land leased out as follows:-

Mouza- Cantonment,

PS – Cuttack 197

Khata Plot No

349 139(Part) Ac.6.222

155(Part) Ac.3.856

177 (Part) Ac.0.220

81 156 Ac 7.272

30 143(Part)Ac 3.238

Total Ac 20.808 decimals.

Further as per the lease deed the above

Sabik Plots are corresponding to following Hal

Plots-

Mouza Khata No Plot No. Area

Cuttack 187 193 Ac1.355

Town, 192 Ac.0.825

Unit No.10 190 Ac.1.452

Cantonment 187 191 Ac.4.359

203Ac.0.823

200 Ac.0.456

201 Ac.0.315

202 Ac.1.130

204 Ac.4.335

189 Ac.1.258

167(Part)Ac.1.050

166(Part)Ac.0.082

168(Part)Ac.0.105

50

Page 51 165(Part) Ac.3.263

Total Ac.20.808dec

vide Annex-9.

12.3Though the above lease has been cancelled

by the RDC and such cancellation has been

stayed by the Hon’ble High Court of Orissa in

WP© No. 5360/2002 filed by the OOA, the

location of lease hold area of Ac.20.808 decimals

with specific portions of the Sabik Plots and

corresponding Hal Plots has not been disputed by

the OOA.

12.4Accordingly the committee resolved to carry

out the entire land in possession of the OOA

within the boundary and to determine the lease

hold area with specific area of the Sabik Plots

mentioned in the lease deed Annex-9.

The Measurement Team accordingly carried

out the measurement in respect of the possession

of the OOA in the field.

13.The members of the Committee were

present throughout the measurement that took

place from 02.10.2015 to 15.10.2015 and

26.10.2015 with breaks on holidays.

Sri. B.H. Mohanty, Senior Advocate on

behalf of the OOA and Tahasildar, Cuttack on

behalf of the Revenue Authorities were present on

the dates of measurement.

14.The Measurement Team pointed out the

fixed points in the field as per the Hal settlement

map and cross-checked the same with reference

to Sabik settlement map. The correctness of

fixed points were also checked by forming

triangles. The measurement of the land inside

51

Page 52 the boundary wall of the OOA was undertaken by

Chain Triangulation Method. The triangles were

formed to determine the area. The measurements

of the diagonals were checked and verified with

the help of DGPS of ORSAC where obstruction

because of construction was found. The

calculations done for determining the area of

triangles were cross-checked.

15.After the measurement in the field, the

Measurement Team prepared the report including

the relay etc. in presence and under supervision

of the Committee and submitted the reports vide

Annex-34 series. The abstract of the report of the

Measurement Team has been filed vide

Annex-34/a.

The ORSAC submitted their reports vide

Annex-35 series (3 in numbers – 35,35/a & 35/b)

16.The Committee carefully examined all the

materials placed before it including reports

submitted by Measurement Team and ORSAC.

17.As per the Measurement by the

Measurement Team the OOA is in possession of

Ac.26.502 decimal vide Annex-34.

As per the DGPS and ETS measurement the

OOA is in possession of Ac.27.044 decimals vide

Annex-35.

In the Hal Settlement ROR of 1988 the OOA

was found to be in possession of Ac.21.549

decimals vide Annex-4.

18.On examination of Hal Map with Sabik Map,

report submitted by the Measurement Team it is

found that the leasehold land of Ac.20.808

52

Page 53 decimals appertaining to Sabik Plots

156,139,143,155 and 177 are corresponding to

Hal

Plots193,192,190,191,203,200,201,202,204,189,

167(P),166(P), 168(P) and 165(P) shown within

yellow colour in the map.

18.1The excess land in possession of the OOA

which has been shown within green colour in the

map is not within the leasehold land of the OOA.

18.2On scrutiny it is found that the 23 shops

and the Kalyan Mandap(Barabati Palace) are in

Hal Plot Nos.7(Part) and 165(Part), situated over

an area measuring Ac.1.138 decimal and they are

corresponding to Sabik Plot No.139.

A portion of Kalyan Mandap(Barabati

Palace) measuring Ac.0.433 decimals situated

over Hal Plot No.165(Part) is within the leasehold

area as shown within yellow colour in map. The

remaining portion of the Kalyan Mandap

(Barabati Palace) and the 23 shops measuring

Ac.0.705 decimals are in Hal Plot NO. 7(Part),

shown within green color in the map, are situated

outside the leasehold area.

18.3As per the Hal ROR the area of Hal Plot No.7

under Khata No.203 is Ac.0.880 decimal vide

Annex-36 and out of that Ac.0.175 decimals is

within the compound of Army Recruitment Office

and remaining land of Hal Plot No. 7 measuring

an area of Ac.0.705 decimal is within possession

of the OOA where the 23 shops and a portion of

Kalyan Mandap (Barabati Palace) are situated

shown within green colour in the map.

19.Finally the Committed unanimously comes

to the conclusion and accordingly reports that

the leasehold area of Ac.20.808 decimals

53

Page 54 appertaining to Sabik Plot No. 156 and portion of

139,143,155 and 177 are corresponding to Hal

Plot Nos. 193,192,190,191,203, 200, 201, 202,

204, 189, 167( Part),166 (Part),168(Part) and

165(Part) shown within yellow color in the map

and 23 shops and part of Kalyan Mandap

(Barabati Palace) measuring Ac.0.705 decimals

situated over Hal Plot No.7(Part) shown within

green colour in the map are not within (i.e.

beyond) the leasehold area.

20.During measurement the representatives of

the OOA and the Revenue Authority requested for

the copies of the field book, report etc. for their

reference. In absence of any specific instruction

to that effect from the Hon’ble Apex Court and to

avoid premature disclosure prior to submission of

the report before the Hon’ble Apex Court the

Committee humbly declined to accede to the

request of the parties to provide any copy of the

report, filed book etc. to them.

21.The Committee is submitting this report

along with the annexures as directed for kind

perusal of the Hon’ble apex court in Special Leave

to Appeal © No. 34373/2014 and necessary

orders.”

35. The Committee has perused certain documents which

have been appended as Annexure under the heading ‘Table

of Annexure to the Report’. We think it appropriate to

reproduce the said table of annexure which is as under:-

Annexure No. Subject

Annexure -1 Application dated 26/27.01.1949 for lease

54

Page 55 of the OOA

Annexure -1/aSketch Map attached to the lease

application of the OOA

Annexure -2 Lease deed dated 24.09.1949

Annexure -3 Lease deed dated 19.04.1974

Annexure -4 Hal ROR of 1987-88

Annexure -5 Encroachment case No. 213/1 of 1990-91

Annexure -6 Copy of the plaint in T.S. 312/1991

Annexure -6/aWritten Statement in T.S. 312/1991

Annexure -7 Application dated 21.06.1995 of the OOA

for permanent lease

Annexure -7/aStatement of the land of the OOA

Annexure -7/bStatement of the land of the OOA

Annexure -8 Order of the R.I. dated 21.06.1995 in lease

case no. 294/1995

Annexure -8/aReport of the R.I. dated 21.06.1995

Annexure -9 Order dated 22.07.1995 regarding

permanent lease by the Tahasildar in

favour of the OOA

Annexure -10 Approval of the Collector dated 16.08.1995

Annexure -11 Judgment of T.S. 312 of 1991

Annexure -11/aDecree in T.S. 312 of 1991

Annexure -12 Lease cancellation order dated 01.11.2002

of the R.D.C

Annexure -13 ROR Correction dated 05.11.2002

Annexure -14 Status quo order passed by the Hon’ble

High Court of Orissa in M.C. No.

3999/2002 arising out of W.P ©

5360/2002

Annexure -15 Judgment of Hon’ble High Court of Orissa

dated 19.11.14 in Appeal No. 158/2001

Annexure -16 SLA(Civil) No. 34373/2014

Annexure -17 Lease deed dated 19.08.1969

Annexure -18 Resumption order dated 19.07.2003 in

Resumption Case No. 19/2002

Annexure -19 Land taken into Government Khata on

20.04.2015

Annexure -20 Corrected R.O.R

Annexure -21 Order dated 22.05.2004 of R.P. 188/2003

55

Page 56 for taking land into Govt. Khata

Annexure -22 ROR corrected dated 19.08.2004

Annexure -23

& 24

Committee Members Nomination letters of

the Hon’ble High Court, Orissa

Annexure

-25,25/a &

25/b

Letters to Revenue Authority for

production of documents

Annexure -26

& 26/a

Requisitions to ORSAC for DGPS and ETS

measurement.

Annexure -27 Notice regarding day,date and schedule of

the measurement

Annexure -28 Letter of the S.O. dated 26.09.15

Annexure

-28/a

Letter of the Collector dated 26.09.2015

Annexure -29 Khasmal ROR published after 25.10.1949

Annexure -30 Sabik ROR of 1932

Annexure -31 Spot notice at Measurement site

Annexure -32 Direction of the Apex Court in order dated

07.05.2015 in SLA © 34373/14

Annexure -33 Pleading at para-3 of the plaint in T.S.

312/91

Annexure -34 Report of the Measurement Team

Annexure -34/aAbstract of the report of the Measurement

Team

Annexure -35,

35/a & 35/b

Reports of the ORSAC team

Annexure -36 Hal ROR of Hal Plot No. 7”

36.The appellant filed its objections to the Report of the

Committee of the Judicial Officers who along with other

authorities were directed to carry out the measurement of

the leasehold area and submit a report on whether the

Kalyan Mandap and 23 shops are constructed within the

56

Page 57 leasehold area or not. The main grounds of objections are:-

(i)Though the committee did conduct the measurement,

yet the same was neither with reference to the schedule in

the original lease deed of 1949 nor the schedule in the

renewed lease deed of 1974, and, as such, was an exercise

in contradiction to and not in compliance of the direction of

this Court. The Committee omitted available relevant

records and proceeded on the basis that measurement had

to be carried out in the absence of the Government

producing the relevant records.

(ii)The report is criticised on the score that it refers to the

record of the civil suit that was made available to it. The

appellant-plaintiff had exhibited all the relevant documents

in the suit and they formed part of the record. The task

assigned to the Committee by this Court was to find out, by

measurements, whether the Kalyan Mandap and the 23

shops are within the leasehold area. Therefore, the aforesaid

documents which are part of the record and which were

readily available to the Committee were indispensable to

arrive at the correct conclusion while carrying out

measurements to find out the extent of land covered by the

57

Page 58 Lease Deed dated 24.9.1949 as renewed by the Deed Dated

19.4.1974, but the Committee chose to ignore the said

crucial documents which would have clinched the issue. It

is further asserted that the government did not produce the

relevant records but the Committee nevertheless proceeded

to carry out the measurements as per its own

understanding and parameters.

(iii)The further objection of the appellant is that Exhibit 4

is the Sabik Settlement map of 1927-28 as revised in 1949

and the said map shows the location of Sabik Plot numbers

in the relevant area. It is contended that the said map is

relatable to the General Revenue Record finalised after

25.10.1949 in favour of the association and a sub-division

of Sabik Plot No. 139 as Plot No. 139/1370 is shown. At the

time the lease was executed in favour of the appellant,

Sabik Plot No. 139 was a whole plot number and the Lease

Deed specifically records that a portion of Sabik Plot No.

139 forms part of the entire leasehold area. On the said

foundation, it is put forth that which portion of Sabik Plot

No. 139 is within the leasehold area is actually the subject

matter of the civil suit and it is the specific case of the

58

Page 59 appellant-petitioner that the leasehold area does not include

land in the newly created Sabik Plot No. 139/1370 but

includes land in the original Sabik Plot No. 139. It is further

asserted that in the Record of Rights the location of land in

the original Plot No. 139 and newly created Plot No.

139/1370 were wrongly recorded. That is how the confusion

was caused as to the identity of that portion of Sabik Plot

No. 139 which is within the leasehold area of the appellant.

Reference has been made to certain assertions in the plaint.

It is also set forth that the Committee failed to appreciate

the fact that during 1949, i.e., after leasing out an area of

acres 20.808 decimals to the Association, a settlement

operation exclusively for Khasmahal area was undertaken

which is commonly known as “Pati Settlement”. The

settlement prepared the Record of Rights and sub-divided

Plot No. 139 into two parts, i.e., Plot No. 139 and the other

Plot No. 139/1370. Plot No. 139 comprises of an area of

acres 1.945 decimals. Though the field position reveals that

Plot No. 139 comprises of an area of acres 2.712 decimals,

yet the said settlement could not attain finality and was

59

Page 60 closed prematurely. However, the revenue map was

published with sub-division of plots which has been referred

to in the suit and the written statement. Though the State

Government is aware of these developments of “Pati

Settlement”, yet it did not produce the relevant information

before the Committee and, thus, left the Committee in

ambiguity in this regard. It is contended that had the

Committee carried out the measurement as per the

boundaries of the admitted and undeniable map Ex. 6

(Government map prepared by Khasmahal Amin on

1.4.1953), the exact extent of land, which is the subject

matter of the suit, could have been ascertained.

Contemporaneous crucial records which were part of the

same lease transaction were omitted by the Committee. In

pursuance of the application for the grant of lease by the

appellant association, the Government issued a sanction

order dated 29.6.1949 in which it was specifically

mentioned that an area of 20.808 acres south of the

cantonment road towards Tulsipur, comprising of Plot No.

156 and portions of Plot Nos. 139, 143, 155 and 177, was to

60

Page 61 be leased to the association. Therefore, the northern

boundary to the land leased out to the appellant can be

inferred from this sanction order. The lease deed dated

24.9.1949 is in continuation of the sanction order and it

describes the land in the schedule. However, the boundary

to the land or the extent of land in each plot number is not

mentioned in the lease deed. Therefore, the boundaries and

the location of the land have to be gathered from the

contemporaneous records, namely, the application with the

sketch annexed and the sanction order.

(iv)Bearing in mind that the schedule to the two lease

deeds only mention the total extent of the leasehold area

and the Plot Nos. and there is no description of the

boundary, it was this document, i.e., the Government of

Orissa Revenue Department Order No. 7484 dated

29.6.1949 which described the northern boundary of the

leasehold area in as much as the said sanction order states

that the area of acres 20.808 decimals is to the south of the

Cantonment Road towards Tulsipur comprising Plot No. 156

and portions of Plot Nos. 139, 143, 155 and 177. Had this

document been looked into by the Committee, it would have

61

Page 62 known the reference point or the starting point for

measurement, i.e., acres 20.808 decimals southwards of

Cantonment Road towards Tulsipur. It would have also

been clear that the land which was leased out was

contiguous with the Cantonment Road towards Tulsipur.

(v)The Committee referred to the lease file in Lease Case

No. 294 of 1995 wherein the appellant association applied

for permanent lease. As per the report in para 8.1, it is

stated that the association applied for permanent lease for

acres 6.222 dec. of land out of Sabik Plot No. 139, which is

an error apparent on the face of the record. The association

never applied for lease on the basis of Sabik Plot Nos. but it

did so in respect of plots under Hal Khata including Plot No.

7, because by that time, the Sabik plot numbers were not in

vogue due to Hal Settlement of 1988-89 wherein new Hal

Plot Nos. were assigned.

37.The Committee has noted that though the revenue

authorities were requested to produce the original lease

deeds, sabik settlement maps of leasehold area as well as

the maps corresponding to Hal plots, plot index, lease case

record in Case no. 294 of 1995, government sanction order

62

Page 63 no. 7484 dated 29.6.1949 and document regarding

demarcation of leasehold area, yet three documents,

namely, the original lease deeds of 1949 and 1974,

Government of Orissa, Revenue Department order dated

29.6.1949 and document regarding demarcation of

leasehold land by local authorities on measurement were

not produced. The Committee, then, issued requisition of

the case record of title suit and examined the document.

Thereafter, the Committee chronologically narrated the

events, referred to various aspects and, as is discernible,

centred the controversy involved in the case by stating that

the dispute is confined to measure the leasehold area of

acres 20.808 decimals and to determine the location of

Kalyan Mandap (Barabati Palace) and 23 shops. Regard

being had to the same, it decided its course of action by

having a team of Amins who have necessary training and

sufficient experience. The Committee also resolved to carry

out the measurement with ETS and DGPS by the trained

technicians under the supervision of the authority of Orissa

Space Application Center (ORSAC), Bhubaneswar. The

63

Page 64 Committee further found on scrutiny that there is variation

in two maps, for fraction plot bearing No. 139/1370 which

is reflected in Ext.4 to the suit that is absent in the map

provided by the Revenue Authority and, accordingly, felt it

necessary to determine whether to consider fraction Plot No.

139/1370 while conducting the measurement to find the

leasehold area. The Committee referred to the application

in Lease Case No. 294 of 1995 to find out whether an area

of acres 6.222 decimal out of Sabik Plot No. 139 was leased

out along with other areas in total measuring acres 20.808

decimals. It also noted that though the lease was cancelled

subsequently by the Revenue Divisional Commissioner in

the year 2002, yet the Association had never disputed the

same. The Settlement Officer, Measure Settlement Office,

Cuttack reported that fraction Plot No. 1370 or 139/1370

was not in existence after the 1927-28 settlement vide his

letter No.3408, dated 26.09.2015. Thereafter, the

Committee noted, certain aspects, which we think apt to

reproduce despite having quoted earlier:-

“Further after division of original Sabik Plot No.

139 into 139 and 139/1370 the residual of

64

Page 65 original Sabik Plot No. 139 became Ac.7.345

decimal. Adding of this residual Ac.7.345 decimal

with Ac.1.945 decimal of fraction plot No.

139/1370, the total area became Ac.9.290

decimal which is thus to be measured entirely by

the Measurement Team. Since lease has been

granted to the extent of Ac.6.222 decimal out of

the Sabik Plot No.139, the leasehold area does

not cover the entire residual area of Plot No. 139.

Hence, consideration of fraction plot No.

139/1370 is of little consequence. Accordingly

the Committee resolved to carry out the

measurement ignoring the fraction plot No.

139/1370”.

38.The measurement took place in association and

collaboration with both the teams. The Committee referred

to the lease deeds of 1949 and 1974 which bore identical

sabik leasehold plots and total lease area as acres 20.80

decimals. Referring to the application dated 21.06.1995

filed by the association for grant of permanent lease, it is

noticed that Tahsildar granted lease of acres 20.808

decimals. The lease deed shows the details of the land,

which is as follows:-

“Mouza- Cantonment,

PS – Cuttack 197

Khata Plot No

349 139(Part) Ac.6.222

155(Part) Ac.3.856

177 (Part) Ac.0.220

65

Page 66 81 156 Ac 7.272

30 143(Part)Ac 3.238

Total Ac 20.808 decimals.”

39.As per the lease deed, the said sabik plots correspond

to the following Hal plots:-

“ Mouza Khata No Plot No. Area

Cuttack 187 193 Ac1.355

Town, 192 Ac.0.825

Unit No.10 190 Ac.1.452

Cantonment 187 191 Ac.4.359

203Ac.0.823

200 Ac.0.456

201 Ac.0.315

202 Ac.1.130

204 Ac.4.335

189 Ac.1.258

167(Part)Ac.1.050

166(Part)Ac.0.082

168(Part)Ac.0.105

165(Part) Ac.3.263

Total Ac.20.808 dec.”

40.The Committee noted that the said lease has been

cancelled but it did not reflect on the same as the matter is

subjudice before the High Court in a writ petition and we

think it rightly did so. In this appeal, we are also not

concerned with the said cancellation. We are only

concerned, as we have noted, with regard to the existence of

acres 20.808 decimals of leasehold area and anything

66

Page 67 constructed beyond the said leasehold area. After the

measurement, it is interesting to note that the Committee

found there are variations in the measurement. We are

compelled to reproduce the same at the cost of repetition:-

“17.As per the Measurement by the

Measurement Team the OOA is in possession of

Ac.26.502 decimal vide Annex-34.

As per the DGPS and ETS measurement the

OOA is in possession of Ac.27.044 decimals vide

Annex-35.

In the Hal Settlement ROR of 1988 the OOA

was found to be in possession of Ac.21.549

decimals vide Annex-4.

18.On examination of Hal Map with Sabik Map,

report submitted by the Measurement Team it is

found that the leasehold land of Ac.20.808

decimals appertaining to Sabik Plots

156,139,143,155 and 177 are corresponding to

Hal plots no. 192, 190, 191, 203, 200, 201, 202,

204, 189, 167(P), 166(P), 168(P) and 165(P)

shown within yellow colour in the map.

18.1The excess land in possession of the OOA

which has been shown within green colour in the

map is not within the leasehold land of the OOA”.

41.Thereafter, it opined:-

“18.2 On scrutiny it is found that the 23

shops and the Kalyan Mandap(Barabati Palace)

are in Hal Plot Nos.7(Part) and 165(Part), situated

over an area measuring Ac.1.138 decimal and

67

Page 68 they are corresponding to Sabik Plot No.139.

A portion of Kalyan Mandap (Barabati

Palace) measuring Ac.0.433 decimals situated

over Hal Plot No.165(Part) is within the leasehold

area as shown within yellow colour in map. The

remaining portion of the Kalyan Mandap

(Barabati Palace) and the 23 shops measuring

Ac.0.705 decimals are in Hal Plot NO. 7(Part),

shown within green color in the map, are situated

outside the leasehold area.

18.3As per the Hal ROR the area of Hal Plot No.7

under Khata No.203 is Ac.0.880 decimal vide

Annex-36 and out of that Ac.0.175 decimals is

within the compound of Army Recruitment Office

and remaining land of Hal Plot No. 7 measuring

an area of Ac.0.705 decimal is within possession

of the OOA where the 23 shops and a portion of

Kalyan Mandap (Barabati Palace) are situated

shown within green colour in the map.

19.Finally the Committed unanimously comes

to the conclusion and accordingly reports that

the leasehold area of Ac.20.808 decimals

appertaining to Sabik Plot No. 156 and portion of

139,143,155 and 177 are corresponding to Hal

Plot Nos. 193, 192, 190, 191, 203, 200, 201,

202, 204,189, 167( Part),166 (Part),168(Part) and

165(Part) shown within yellow color in the map

and 23 shops and part of Kalyan Mandap

(Barabati Palace) measuring Ac.0.705 decimals

situated over Hal Plot No.7(Part) shown within

green colour in the map are not within (i.e.

beyond) the leasehold area”.

42.The objections that have been filed are essentially

based on the plea that the Committee had omitted available

relevant records and proceeded for measurement in the

68

Page 69 absence of the Government producing the relevant records.

A perusal of the report of the Committee clearly shows that

it has complied with the order of this Court in its letter and

spirit and we find no reason to have a different view than

what has been taken by the Committee.

43.Thus, two aspects are clear. One, the association

encroached upon the property of the State Government and

built 23 shops and, as the report of the Committee would

reflect, Kalyan Mandap stands partly on the government

land and second, the property that stands on the

government land has to go back to the government. There

are two options with this Court, that is, to issue a direction

for demolition of Kalyan Mandap or direct the government

for resumption of that part of the land belonging to the

association where the Kalyan Mandap has been

constructed. It is beyond any dispute that Kalyan Mandap

is functional for more than two decades. There is no

justification to direct demolition of the same. It would be

appropriate if we direct the land on which Kalyan Mandap is

constructed to be resumed by the government and the

69

Page 70 Kalyan Mandap should vest in the State Government and

shall be managed as it is presently managed by the District

Collector, Cuttack.

44.That settles the aforesaid land dispute but the other

issue that has come before this Court, as the learned Single

Judge has reflected, deserves to be addressed. In this

regard, it is necessary to state that this Court had called for

a report from the Accountant General of Odisha who

submitted its report on 10.03.2015. An objection was filed

to the said report on the ground that the authority had

travelled beyond the directions issued by this Court.

Accepting the said objection, this Court called for a specific

report to be submitted by the Accountant General. The said

authority submitted the report dated 02.07.2015 in

pursuance of this Court’s order. The findings recorded in

the report are to the following effect:-

“Report on Audit of “the accounts in respect of

Kalyan Mandap and 23 shops standing on the

disputed area” in Barabati Stadium, Cuttack

1.Scope of Audit

As per order dated 22 January 2015 of the

Hon'ble Supreme Court of India as

70

Page 71 communicated vide letter No.D-446/14/XIA

dated 24 January 2015 of Assistant Registrar of

the Surpeme Court of India, Accountant General

(General and Social Sector Audit), Odisha was

directed (22 January 2015) by the Apex Court to

audit the accounts of 23 shops and the Kalyan

Mandap erected on 0.705 acre parcel of

disputed/encroached land. Accordingly, one

Report was filed in the Apex Court. However,

vide order dated 7 May 2015, Honorable Court

directed to submit a specific and precise Report

within eight weeks.

In compliance of above orders of Hon'ble Apex

Court, Principal Accountant General (G&SSA),

Odisha conducted audit of the accounts of OOA

during 30 January 2015 to 28 February 2015

and 8 to 12 June 2015 with respect to income

received by it by renting out the property on land

under dispute. This consists of 23 shops and

one Kalyan Mandap, known by the name of

Barabati Palace. The latter was leased out to one

private firm (M/s. Incon Associates) till full

adjustment of cost of construction (Rs.80.47

lakh)

8

out of 50 per cent of rent payable.

1.2Introduction

The Government of Odisha in erstwhile Revenue

Department sanctioned 25.450 acre

9

land in

favour of OOA, on lease, in three different phases

during July 1949 to February 1969. Out of

25.450 acre of land, an area of 24.733 acre

10

was

recorded in the name of OOA in 1988 settlement

indicating that the Record of Rights (RoR) was

valid upto 1989. Out of the above, lease period

for 20.808 acre has lapsed in September 1989

8

Vide agreement dated 9 July 1996 (17 years) subsequently amended vide agreement dated 24

April 1998 and 28 March 2002

9

Three (3) parcels of land measuring 20.808 acre, 2.703 acre and 1.939 acre.

10

0.717 acre out of 25.450 acre of land was not settled.

71

Page 72 and has not been renewed so far and the matter

is sub-judice

11

in High Court of Odisha. Out of

two other parcels of land viz. 1.939 acre and

2.703 acre, land measuring 1.222 acre and 2.703

acre settled in 1988 settlement respectively, has

already been reverted back to government

khata

12

. Out of the remaining 0.717 acre, land

measuring 0.634 acre remained under

unauthorized occupation (encroachment) of OOA

on which a Kalyan Mandap (Barbati Palace) and

23 shops were constructed (1990-99)

Encroachment case

13

was filed by the Tahsildar

in 1990-91, but the matter has remained

sub-judice (February 2015).

2.Audit findings

Audit noticed that OOA started construction of

23 shops on the disputed land during 1990-91

out of its own resources, completed the

construction in 1995-96 at a cost of Rs.14.21

lakh and let out the same in March 1996.

Further it permitted construction of a Kalyan

Mandap by M/s. Incon Associates, a private

partnership firm, on the disputed land in

1996-97. OOA started receiving rent from the 23

shops from March 1996 and from Kalyan

Mandap from January 1999. List of proprietor of

these 23 shops and their business activities is

indicated in Annexure 1.

2.1Levy and collection of rent from 23 shops

and Kalyan Mandap

OOA could not produce counter-foils of money

receipts used during 1995-96 to 2007-08, rent

ledger for 1995-96 to 2003-04 and stated that all

11

WP (C) No.5360/2002 and Misc. Case No.3999/2002

12

RP Case No.188/2003, Mutation Case No.1801/2004 (1.222 acre) and Vide Misc. Case

No.19/2002 (2.703 Acre)

13

Enroachment Case No.213/01/1990-91, Misc. Case 263/91 arising out of T.S. Case No.312/91

72

Page 73 records up to 2003-04 and all vouchers upto to

2007-08 had already been destroyed instead it

furnished to Audit a statement of rent due and

collected during the period from March 1996 to

March 2004 in respect of Kalyan Mandap and 23

shops, which Audit has relied upon in absence of

the above basic records. Further, during

2008-09 to 2013-14, though money receipts were

produced, however, rent collected by OOA

through money receipts from M/s.

Incon-Associates towards Kalyan Mandap

(Barabati Palace) was mixed up with that of

Barbati Guest house (another building taken on

hire from OOA by the same firm) due to which

Audit had to rely on the rent ledger and audited

annual accounts. Besides, cashbook was found

(June 2015) to be not written after 31 March

2014.

2.1.1 Rent collected by OOA from 23 shops

As per the accounts certified by the Chartered

Accountant and other records produced before

Audit, OOA had earned revenue of Rs.55.35 lakh

towards rent (Rs.52,52,788) and donation

(Rs.2,82,100) from 23 shops during March 1996

to December 2014. Out of this Rs.50,28,069 was

received and Rs.2,24,719 was outstanding as on

31 December 2014. However, full donation was

realized Shop wise rent due, received and

outstanding is indicated at Annexure 2.

2.1.2. Rent due and collected by OOA from M/s.

Incon Associates for Kalyan Mandap (Barabati

Palace)

As per the rent ledger, during January 1999 to

December 2014 rent of Rs.41,99,174

14

was due to

OOA towards rent of Kalyan Mandap (Barabati

14

Up to March 2014 Rs.40,04,718 and April to December 2014 Rs.1,94,456

73

Page 74 Palace). Out of this, rent of Rs.13,28,470 was

received by OOA from M/s. Incon Associates,

Rs.21,51,809 was adjusted

15

towards the cost of

construction as per the agreements while

Rs.5,24,439 remained outstanding as of 31

March 2014. During April to December 2014,

Rs.2,57,816 was shown as collected by OOA in

the rent ledger but the same included rent for

Barabati Palace and other dues for which actual

rent paid for Barabati Palace could not be

ascertained by Audit as annual accounts of OOA

for 2014-15 has not been finalized (June 2015).

Rent due, collected and adjusted by OOA from

Barabati Palace during January 1999 to

December 2014 are indicated at Annexure 3.

Thus, OOA had earned a revenue of Rs.97.33

lakh during 1996-97 to 2014-15 (upto December

2014) by utilizing the property i.e. 23 shops and

Kalyan Mandap (Barabati Palace) lying on the

disputed land.

2.1.3 Difference in income as per the accounts of

M/s. Incon Associates and by the new

management (Collector, Cuttack)

M/s. Incon Associates earned revenue amounting

to Rs.2.44 crore

16

from Barabati Palace towards

booking charges for different events during

January 1999 to December 2014

17

as per records

produced by it.

At the direction of the Honorable High Court of

Odisha/Honourable Supreme Court of India, the

15

The cost of construction was borne by the private party viz. M/s. Incon Associates who

adjusted fifty per cent of rent from monthly rent towards cost of construction.

16

As per financial statement of M/s. Incon Associates for the years 1998-99 to 2013-14 (except

2000-01 and 2006-07 which were not produced to Audit). Moreover, money Receipts in

respect of these receipts could also not be furnished to Audit.

17

Excepting for 2000-01 and 2007-08 for which annual accounts were not produced to Audit.

74

Page 75 management of Barabati Palace was taken over

by the District Collector, Cuttack during the

period from 30 November 2014 to 12 December

2014 and then from 24 January 2015.

Audit attempted to make a comparison of net

earnings from Barabati Palace under both the

managements and noticed that in the books of

M/s. Incon Associates though income relating to

Barabati Palace was shown distinctly however,

expenditure incurred thereon was not shown in

its accounts separately but mixed with other

business like running Barabati Guest House,

Barabati Palace and Catering.

However, as per certified financial statements for

2007-08 to 2013-14, total income of M/s. Incon

Associates from Barabati Palace was Rs.1.71

crore.

Present management (i.e. Collector, Cuttack from

30 November 2014 to 12 December and then 24

January 2015 onwards) confirmed that they were

charging Rs.70,000 plus service tax per social

events up to 18 February 2015 and Rs.80,000

plus service tax thereafter and 78 bookings had

been made with collection of booking charges of

Rs.77.50 lakh during same period and incurring

expenditure of Rs.2.61 lakh within about five

months (up to May 2015). This indicated that

Barabati Palace had more revenue earning

potential than that disclosed in the accounts of

M/s. Incon Associates.

2.1.4 Advance rent collections payable to the

District Administration by M/s. Incon Associates

M/s. Incon Associates vide letter No. Nil dated 2

December 2014 intimated that during the first

phase (i.e. from 30 November 2014 to 12

75

Page 76 December 2014) of taking over of the charge of

the Kalyan Mandap by the District

Administration, the mandap was booked by nine

(9) persons and an amount of Rs.1.86 lakh was

collected by it as per the details furnished below :

(Source: Information furnished by the Manager, Barabati Palace)

As the hiring charges of the Mandap was

Rs.70,000 per day, the District Administration

collected an amount of Rs.4.45 lakh from the

users of Kalyan Mandap. Similarly, Collector

also collected Rs.1.20 lakh on advance booking of

said mandap during the period when

management remained with M/s. Incon

Associates. However, the differential amount of

76

Sl.

No.

Date of

function

Name of

the User of

Mandap

(S/Shri)

Money

Receipt

No. Of

Barabat

i Palace

Advance

Received

by

Manager,

Barabati

Palace

(in Rs.)

District

Adminsit-r

ation

money

receipt

number

Amount

received

by

District

Administr

ation

(in Rs.)

Total

Collection

(in Rs.)

1.30-Nov-

14

Bibekanad

a Swain

144 2000086/672130 50000 70000

2.01-Dec-

14

Muna Jain 153 2100086/672131 50000 71000

3.02-Dec-

14

R.K.

Mohapatra

159 2000086/672143 50000 70000

4.03-Dec-

14

Gyanaranja

n Swain

147 1500087/672155 55000 70000

5.06-Dec-

14

S.S.

Sharma

154 3000087/672157 40000 70000

6.07-Dec-

14

Sibu

Khuntia

140 1000087/672160 60000 70000

7.09-Dec-

14

B C Rout 168 2000087/672164 50000 70000

8.10-Dec-

14

Pragyan

Mohapatra

151 3000087/672163 40000 70000

9.12-Dec-

14

Jayanti

Rath

117 2000087/672159 50000 70000

TOTAL 186,000 445,000631,000

Page 77 Rs.0.66 lakh due to the District Administration

has not been deposited by M/s. Incon Associates

(June 2015). Besides, service tax amounting to

Rs.90,000 was neither collected from the

concerned users by the Collector nor by M/s.

Incon Associates.

2.2.Accounting issues

2.2.1 Accounting of 23 shops in OOA records

The OOA constructed 23 shops out of its own

sources during 1990-91 to 1995-96 at a cost of

Rs.14.21 lakh. Since OA could not provide

vouchers in support of such expenditure, Audit

relied upon the balance appearing in the Annual

Accounts and Ledgers and noticed that:

In the accounts of OOA, expenditure

18

incurred

towards repair and maintenance relating to 23

shops were clubbed with repair maintenance of

other civil structures like stadium, office

building, etc. Similarly, separate metering and

billing for electricity charges upto 2004-05 for 23

shops was not done. Therefore, identification of

expenditure against receipts from 23 shops

standing on disputed/encroached land could not

be possible in Audit.

2.2.2 Accounting of Kalyan Mandap (Barabati

Palace) in OOA records

Audit examined the annual accounts of both OOA

relating to the Barabati Palace and M/s Incon

Associates running the Barabati Palace (as

produced by them) and noticed that:

·OOA accounted for Rs.80.47 lakh

18

Export in one year i.e. 2005-06 when OOA spent Rs.76,700 for repair and maintenance of one

shop

77

Page 78 being construction cost of Barabati

Palace and other installations (plant and

machinery) as its own asset in 1998-99

(Rs.57.66 lakh) and 2000-01 (Rs.22.81

lakh) and booked matching amount

under liabilities as Deposit (accrual of

assets against self-construction of

buildings) received from M/s. Incon

Associates, as cost of construction was

not met by OOA.

·In the annual accounts of OOA for

the period 1999-2014, Audit noticed that

a sum of Rs.21,51,809 being 50 per cent

of rent received from M/s. Incon

Associates was adjusted from Deposit

(accrual of assets against

self-construction of buildings) head.

Though said Kalyan Mandap

building was constructed on disputed

land, accounting the same as a

permanent asset of OOA in its account

was, thus, irregular as per Accounting

Standard (AS 10)

·Besides, said asset (Building:

Rs.61.35 lakh) was not capitalized based

on expenditure incurred but on estimated

construction cost and so did not

represent the actual cost of the building.

OOA also irregularly charged

depreciation for Rs.26.45 lakh during

2003-04 to 2013-14 on said building,

even though title of the land was

disputed. Besides, M/s. Incon

Associates, the lessee of Barabati Palace,

incurred expenditure towards repair and

maintenance as well as electricity

charges of the Barabati Palace.

78

Page 79 2.2.3.Non-reconciliation of accounts between

OOA and M/s. Incon Associates

As per terms of agreement with M/s. Incon

Associates, 50 per cent of the rent in each month

was to be adjusted towards construction cost of

Barabati Palace. In the accounts of OOA, while

cost of construction was booked under fixed

assets to be reduced by depreciation each year, in

the accounts of M/s. Incon Associates, same was

shown under current assets, loan and advances

(OOA account) till 2006-07 to be reduced by 50

per cent of rent payable each year. Investment in

Barabati Palace was distinctly shown from

1999-2007 in the accounts of M/s. Incon

Associates, but thereafter the same was mixed

with other investments due to which amount of

investment made in Barabati Palace alone could

not be ascertained in Audit. During 1999-2007,

OOA adjusted Rs.11.79 lakh in its account

whereas M/s. Incon Associates had shown

adjustment of Rs.13.76 lakh during the same

period as detailed at Annexure 4. The difference

of Rs.1.97 lakh was not reconciled (June 2015).

2.2.4 Accounting of Kalyan Mandap (Barabati

Palace) in the accounts of M/s. Incon

Associates

Working results and financial position of M/s.

Incon Associates (as per its Annual Accounts

from 1999-00 to 2013-14

19

) revealed that it had

three different businesses viz. letting out of

Barabati Palace, Barabati Guest House and

Catering. Expenditure relating to Barabati Palace

alone could not be assessed as expenses of all

businesses were clubbed. Moreover, following

records could not be produced to Audit:

19

2000-01 and 2007-08 were not furnished to Audit

79

Page 80 · Cash books from 1998-99 to 2009-10;

· Booking and Collection Register from

1999-00 to December 2014;

· Money Receipts from 1999-00 onwards;

· Bill Copies from 1999-2000 to 2009-10;

· Bill Register;

· Tariff charges of Kalyan Mandap with

detailed break-up.

Hence, accounts of M/s. Incon Associates could

not be relied upon by Audit.

2.3Absence of requisite due diligence in fixing

revenue share

2.3.1. High payback period

The details of rent structure for Kalyan Mandap

as agreed in the agreements and adjustments to

be done for cost of construction is indicated in

table below:-

Sl.

No.

Features of

agreement

1

st

Agreement

dated 9 July

1996

2

nd

Agreement

dated 24

April 1998

3

rd

Agreement

dated 20

July 1998

4

th

Agreement

dated 28

March 2002

1 Cost of

construction

permitted (Rs.)

10.00 lakh25.00 lakh 40.00 lakh80.47 lakh

2 Monthly rent

payable (Rs.)

10,000 15,000 17,000 21,000

3 Whether prior

approval of General

Body taken?

Yes No No No

4 Rent as percentage

of capital

1.00 0.6 0.425 0.26

5 Provision for

revision of rent

No provisionNo provisionNo provisionFive (5) per

cent

increase

once in

three years

80

Page 81 6 Amount per month

to be adjusted by

OOA towards cost

of construction as

reflected in

advance deposit

account of M/s.

Incon Associates

50 per cent

of monthly

rent

50 per cent

of monthly

rent

50 per cent

of monthly

rent

50 per cent

of monthly

rent

7 Actual cash inflow

per month to OOA

after adjustment

towards

construction (Rs.)

5,000 7,500 8,500 10,500

8 Tenure of

agreement

Till

adjustment

of cost of

construction

in full or 17

years

whichever is

earlier

Till

adjustment

of cost of

construction

in full or 28

years

whichever is

earlier

Till

adjustment

of cost of

construction

in full or 28

years

whichever is

earlier

Till full

adjustment

of cost of

construction

9 Date from which

agreed rent was

payable

1-Dec-19971-Dec-1998 1-Dec-19981-Apr-2002

(Source: Information furnished by the Manager, Barabati Palance)

As can be seen from the table, M/s. Incon

Associates kept on increasing the cost of

construction and OOA regularized the

expenditure by signing agreements without prior

approval of General Body. The rent was not

increased commensurate with the incerease in

construction cost as reflected above by ratio

between rent agreed and cost of construction.

OOA could not produce any record to justify the

basis of determination of such monthly rent. As

per agreement (July 2002) 50 per cent of rent

would be adjusted towards expenditure incurred

on construction of said Kalyan Mandap and so

full adjustment of cost of construction would

have happened after 47 years in 2044 (Annexure

5).

2.3.2. Arbitrary fixation of rent for Kalyan

Mandap: Actual rent vis-a-vis fair rent

81

Page 82 Revenue sharing is a major bidding parameter to

ensure that the parties willing to share the

highest revenue would get selected. Audit

noticed that, OOA did not exercise any due

diligence for revenue sharing like the actual

income stream of the private partner from

utilizing this building, mutually acceptable level

of Internal Rate of Return (IRR) and fixing of

minimum reserve percentage of revenue share

etc. Rather, it seemed to have fixed the annual

rent arbitrarily without examining the anticipated

revenue earning.

Since competitive bidding was not followed while

entering into agreements with M/s. Incon

Associates, Audit compared the actual rent

charged for Barabati Palace with 'Fair Rent'

which is prescribed in Paragraph 4.1.14 read

with Annexure XIII of Orissa Public Works

Department (OPWD) Code Volume II.

Government hires private buildings at such rate.

Audit got the fair rent of such shops and kalyan

Mandap (Barabati Palace) calculated

(February-March 2015) by the competent

authority and compared the same with rent fixed

in the agreement which is indicated in table

below:

Statement showing comparison of actual rent

charged versus fair rent from 1999 to 2014 for

Barabati Palace:-

Year Actual Rent

Fixed (Rs.)

Fair Rent (Rs.)Difference (Rs.)

1999 2,40,000 8,32,728 5,92,728

2000 2,49,000 8,32,728 5,83,728

82

Page 83 2001 2,52,000 8,32,728 5,80,728

2002 2,40,000 8,88,480 6,48,480

2003 2,52,000 8,88,480 6,36,480

2004 2,52,000 8,88,480 6,36,480

2005 2,52,000 8,66,400 6,14,400

2006 2,64,600 8,66,400 6,01,800

2007 2,64,600 8,66,400 6,01,800

2008 2,64,600 14,10,120 11,45,520

2009 2,74,500 14,10,120 11,35,620

2010 2,77,800 14,10,120 11,32,320

2011 2,77,800 22,13,184 19,35,384

2012 2,88,213 22,13,184 19,24,971

2013 2,91,684 22,13,184 19,21,500

2014 2,91,684 41,49,684 38,58,000

Total 39,92,481 2,19,49,692 1,79,57,211

(Source: Fair rent furnished by R & B and rent

charged as per agreement with M/s. Incon

Associates)

Thus, it is evident from the above comparison

that the rent structure was not fixed rationally

keeping in view the cost of land, cost of capital

investment, the market rent accruable, time

value of money, rate of return and the payback

period. Even in 2002, when the last agreement

was signed, rent fixed was substantially below

the fair rent. Over the years, fair rent has

increased substantially but rent charged by OOA

has only increased marginally.”

45.Keeping in view the aforesaid report, it was observed:-

“From the aforesaid report, the differential sum

that comes into existence is Rs.1,79,57,211/-

(Rupees one crore seventy nine lac, fifty seven

thousand two hundred and eleven only). Certain

documents have been annexed in support of the

83

Page 84 report. A copy of the report has been handed

over in Court to Mr. Raghvendra Srivastsa,

learned counsel for the petitioner. It is open to

the petitioner to file an objection to the same

within four weeks hence.

46.The appellant has filed an expert opinion on the

Accountant General’s Report II. The said report is by Shri

Haraprasad Das, an expert who is a former Additional

Deputy Comptroller and Auditor General, Former Vice

Chairman and Acting Chairman State Administrative

Tribunal, Odisha. As per Shri Das, the report of the

Accountant General is wrong and the reasons for saying so

are below:-

“ Para 2.3.1

(i)The calculation and the projection up

to 2044 is wrong. The correct position is

worked out below. It would be seen there

from that the Kalyan Mandap (Barabati

Palace) would be wholly owned OOA by

2026 i.e. after 11 years. The decision of the

OOA Executive Council has proved highly

rewarding as OOA has acquired the

property without any capital investment.

The gain to OOA is huge in real terms.

(ii)In regard to fixation of rent it is

pointed out that OOA had only given a piece

of land to Incon and rent was for the land.

As the cost of construction was to be

84

Page 85 capitalized eventually by OOA, it is not

understood how increase in cost of

construction would have warranted

proportionate increase in rent.

The capital applied was that of Incon, so

how would OOA charge Incon for increased

cost during the period of construction?

Audit have missed the essence of the

Agreement. The agreement was for

acquisition of asset by OOA created by

Incon and not for sharing revenue.

(iii)The observations of the Audit are

wrong and are far from facts. Audit had not

gone through the arrangements entered into

from time to time and subsequent

correspondence. In all the arrangements it

is mentioned that the vacant land is given

for construction of Kalyan Mandap on the

terms that the period of lease is 28 years or

till the adjustment of the amount of

expenditure of Rs. 80,47,157/- incurred on

construction of Kalyan Mandap out of rent

payable whichever is earlier. Audit has

referred to the Agreement dated 18.3.2002

and the calculation has been made on that

basis. Audit has not referred to the

corrigendum issued immediately after that

providing the lease period of 28 years,

agreed to by both parties.

Hence the maximum tenure of license is 28

years only. The payback schedule for 28

years is as follows:

YearPeriod Rent Rent Rent to beCumulative

85

Page 86 payable

per

month

receivable

during the

year as

per

agreement

adjusted

as per

agreement

rent

adjusted

1 Jan-Mar

1999

20,000 60,000 30,000 30,000

2 1999-2000 20,000 2,40,000 1,20,000 1,50,000

3 2000-2001 20,000 2,40,000 1,20,000 2,70,000

4 2001-2002 20,000 2,40,000 1,20,000 3,90,000

5 2002-2003 21,000 2,52,000 1,26,000 5,16,000

6 2003-2004 21,000 2,52,000 1,26,000 6,42,000

7 2004-2005 21,000 2,52,000 1,26,000 7,68,000

8 2005-2006 22,050 2,64,600 1,32,300 9,00,300

9 2006-2007 22,050 2,64,600 1,32,300 10,32,600

10 2007-2008 22.050 2,64,600 1,32,300 11,65,200

11 2008-2009 23,152 2,77,824 1,38,912 13,04,112

12 2009-2010 23,152 2,77,824 1,38,912 14,43,024

13 2010-2011 23,152 2,77,824 1,38,912 15,81,936

14 2011-2012 24,310 2,91,720 1,45,860 17,27,796

15 2012-2013 24,310 2,91,720 1,45,860 18,73,656

16 2013-2014 24,310 2,91,720 1,45,860 20,19,516

17 2014-2015 25,525 3,06,300 1,53,150 21,72,666

18 2015-2016 25,525 3,06,300 1,53,150 23,25,816

From the above table it would be

seen concluded that only Rs. 39,99,786/-

would be adjusted by the time license

expires. In other words, Orissa Olympic

Association would receive rent of Rs.

39,99,786/- during the tenure of license

(being 50% of the rent) and the building

86

Page 87 at the end of the license period. The

present value of the developed property

(calculated till financial year 2015-16) is

Rs. 2,38,31,773/- based on the indexed

cost prescribed by the Central

Government under Income Tax Act, 1961.

The indexed value of the construction at

the end of 28 years will be approximately

doubled, i.e. Rs. 4,76,63,546/-

considering the increase in index cost

from year to year. The calculation of

indexed cost of property is as follows:

Details of amount spent on construction

of Kalyan Mandap are as follows:

Financial

Year

Amount

spent

Index for

the said

financial

year

Index for

the

financial

year

2015-201

6

Indexed

cost of

constructio

n

1998-199

9

57,66,20

7

351 1081 1,77,58,603

2000-200

1

22,80,95

0

406 1081 60,73,170

Besides, if it is assumed that the licensee

had kept the amount spent on

construction in bank as fixed deposit at

the rate of interest of 8% per annum

(Quarterly Compounded), then the Incon

would have got Rs. 5,74,22,569/- after

the expiry of 28 years. In other words the

cost of license to the license (Incon) for

28 years is Rs. 6,54,69,355/- (Rent Paid

+ Interest Lost + Unadjusted cost of

construction) which comes to Rs.

1,94,849/- per month. The licensee has

87

Page 88 borne the burden and the OOA has

become the final beneficiary. This would

show that no favour was shown to

INCON.

Para 2.3.2

Revenue sharing was not a bidding

parameter, firstly because there was no

bidding and secondly because OOA did

not contemplate revenue sharing when it

rented out the vacant a piece of land. The

presumptions of Audit are ab initio

wrong.

Audit has presumed that a constructed

building was rented out to Incon and

therefore the OPWD fair rent standard

was to be applied. Actually the vacant

land was leased out at Rs. 1.18 per sq ft

which was marginally increased

periodically. The rent per sq ft was arrived

at on the basis of fair rent prevailing for

vacant land, without any intention of

profiting from rent. The real intention was

to gain through acquisition of asset.

It would be seen from the previous

paragraph that the index cost of

construction till date works out to Rs.

2.38 crores which would further increase

by the time the license would expire

(2025-26). The index cost at that point of

time would be Rs. 4.76 crores.

The superficial calculation done

erroneously by audit is required to be

wholly rejected. The presumed loss on

rent differential Rs. 1.79 crores is

therefore without any basis.

88

Page 89 In sum:

1.The Principal Accountant-general has

audited the accounts of the Odisha

Olympic Association again as directed

by the Hon’ble Supreme Court, to

verify if the income by way of rent

earned by the OOA from 23 shops and

Kalyan Mandap have been duly

accounted for.

2.Audit has confirmed (Para 2.1.2) that

OOA had earned revenue of Rs. 97.33

lakhs by way of rent from 23 shops

and Kalyan Mandap and that amounts

have been duly accounted for by OOA

in its books. Hence there is no

defalcation or non accounting of rental

income.

3.Audit has erred in telescoping the

payback period up to 2044. The

agreement provided for maximum lease

tenure of 28 years. Thus the lease

would be over by 2025-26. OOA would

come to acquire the property

index-valued at around Rs. 4 crores

without spending a rupee. The

arrangement is loaded in favour of

OOA and not Incon. For Incon it is

bad business and for OOA it is a

crowning success.

4.Comparison between actual rent

charged and fair rent as determined by

Roads and buildings is not tenable as

R & B rent is far constructed space.

89

Page 90 Thus the Audit Report (II) establishes

the contention of OOA that the revenue

accounting of OOA is aboveboard. In so

far as the incorrect finding of Audit

regarding the revenue potential of the

Kalyan Mandap is concerned, we have

shown how there has been a gain in

real terms for OOA while Incon has

suffered huge loss. Therefore there is

no question of any concession or

favour done to Incon.”

47.On a perusal of the objection, it is noticeable that Shri

Das has opined that the auditor has not gone through the

agreements entered into from time to time and subsequent

correspondence wherein it has been mentioned that vacant

land is given for construction of Kalyan Mandap on the term

that the period of lease is 28 years or till the adjustment of

the amount of expenditure of Rs. 80,47,157/- incurred on

construction of the Kalyan Mandap out of rent payable

whichever is earlier. He has also referred to the pay back

schedule and observed that the association would receive

rent of Rs. 39,99,786/- during the tenure of licence (being

50% of the rent) and the building period. The present value

of the developed property (calculated till the financial year

2015-16) is Rs. 2,38,31,773/- based on the indexed cost

90

Page 91 prescribed by the Central Government under the Income

Tax Act, 1961. Additionally, he has observed that Audit has

confirmed that OOA had earned revenue of Rs. 97.33 lakhs

by way of rent from 23 shops and Kalyan Mandap and those

amounts have been duly accounted for by OOA in its books.

Hence, there is no defalcation or non-accounting of rental

income. Shri Das has opined that the association would

acquire the property indexed-valued at around Rs. 4 crores

without spending any amount.

48.We have accepted the report submitted by the

Committee headed by the District Judge, Cuttack. 23 shops

are situated on the Government land and part of the Kalyan

Mandap is also situated on the Government land. This

makes it quite clear that the association has raised

construction by encroaching upon the Government land and

the expert engaged by the association gives the opinion that

Rs. 97.33 lakhs by way of rent had been earned. There is a

lot of gap between the figure arrived at by the Accountant

General of Orissa on the basis of the market rent and the

figure arrived at by the expert. That apart, the State has

91

Page 92 shown the revenue generated after it was handed over to it

which indubitably shows that either the 23 shops were

given on lower rent and similarly, Kalyan Mandap had been

let out at a very low price or there had been collusion to

show lower receipt though actually there was high collection

on rents. This would require investigation.

49.The controversy does not end here. In earlier

proceedings, this Court had noted about the induction of

the son-in-law of the Secretary as a partner in the firm M/s

Incon Associates that has entered into agreement with the

association. He might have been inducted at a later stage.

There was also allegation that the son and son-in-law are

also partners. In such a situation, the conflict of interest

arises.

50.Objections have been filed to the said report. As per

the report submitted by the CAG and the revenue

generation of the State, it is crystal clear that it is

incumbent to look at how and under what circumstances

the agreements were entered into at a low rate and what

amount was actually collected and what happened to the

92

Page 93 said sum. It has to be borne in mind that the revenue has

been generated by constructing on the government land and

profit has been earned from the same. That warrants

further scrutiny and investigation.

51.Another aspect which cannot be ignored relates to

conflict of interest. Vide order dated 9.3.2016, this Court

had noted that the son and son-in-law of Mr. Asirbad

Behera, General Secretary of the Orissa Olympic

Association, were partners. In this regard, we may refer

to a two-Judge bench decision in Board of Control for

Cricket in India v. Cricket Association of Bihar and

others

20

wherein the Court, taking note of the finding of the

probe committee, has held that serious issues of conflict of

interest adversely affects the game of Cricket which is so

popular in this county. It is bound to shake the confidence

of the public in general. The said finding was recorded in

the context of the affairs of the BCCI. The concept of

conflict of interest is well established. A person who is

accountable to the public and deals with public affairs is

20

(2015) 3 SCC 251

93

Page 94 not expected, as required under the law, to have any

personal interest. He is not to act in a manner where it is

perceived that he is directly or indirectly the beneficiary; or

for that matter, extends the benefit to a person of immediate

proximity. In this context, we may usefully reproduce a

passage from the authority in Board of Control for

Cricket in India (supra):-

“BCCI is a very important institution that dis-

charges important public functions. Demands of

institutional integrity are, therefore, heavy and

need to be met suitably in larger public interest.

Individuals are birds of passage while institutions

are forever. The expectations of the millions of

cricket lovers in particular and public at large in

general, have lowered considerably the threshold

of tolerance for any mischief, wrongdoing or cor-

rupt practices which ought to be weeded out of

the system. Conflict of interest is one area which

appears to have led to the current confusion and

serious misgivings in the public mind as to the

manner in which BCCI is managing its affairs”.

52.In this regard, reference to the authority in V.C.

Rangadurai v. D. Gopalan and others

21

is seemly. In the

said case, it has been held that where an advocate finds

that there would be conflict of interest in taking up a case of

his client, he should not accept the brief of such client

21

(1979) 1 SCC 308

94

Page 95 against the interest of his earlier client. Though it has been

rendered in the context of misconduct of an advocate, yet

the concept of conflict of interest has been lucidly set out

therein.

53.In Noratanmal Chouraria v. M.R. Murli and

another

22

, while dealing with the aspect of misconduct of

an advocate under the Advocates Act, 1961, a three-Judge

Bench laid down thus:-

“10. This Court in State of Punjab v. Ram Singh,

Ex-Constable

23

noticed:

“5. Misconduct has been defined in Black’s

Law Dictionary, 6th Edn. at p. 999 thus:

‘A transgression of some established and

definite rule of action, a forbidden act, a

dereliction from duty, unlawful behaviour,

wilful in character, improper or wrong be-

haviour, its synonyms are misdemeanour,

misdeed, misbehaviour, delinquency, impro-

priety, mismanagement, offence, but not

negligence or carelessness.’

Misconduct in office has been defined as:

‘Any unlawful behaviour by a public officer

in relation to the duties of his office, wilful

in character. Term embraces acts which the

office-holder had no right to perform, acts

performed improperly, and failure to act in

the face of an affirmative duty to act.’

Aiyar, P. Ramanatha: Law Lexicon, Reprint Edn.,

1987, at p. 821 defines ‘misconduct’ thus:

22

(2004) 5 SCC 689

23

(1992) 4 SCC 54

95

Page 96 ‘The term misconduct implies a wrongful in-

tention, and not a mere error of judgment.

Misconduct is not necessarily the same thing

as conduct involving moral turpitude. The

word misconduct is a relative term, and has to

be construed with reference to the subject-

matter and the context wherein the term oc-

curs, having regard to the scope of the Act or

statute which is being construed. Misconduct

literally means wrong conduct or improper

conduct. In usual parlance, misconduct

means a transgression of some established

and definite rule of action, where no discretion

is left, except what necessity may demand and

carelessness, negligence and unskilfulness

are transgressions of some established, but

indefinite, rule of action, where some discre-

tion is necessarily left to the actor. Miscon-

duct is a violation of definite law; carelessness

or abuse of discretion under an indefinite law.

Misconduct is a forbidden act; carelessness, a

forbidden quality of an act, and is necessarily

indefinite. Misconduct in office may be defined

as unlawful behaviour or neglect by a public

officer, by which the rights of a party have

been affected.’

6. Thus it could be seen that the word ‘miscon-

duct’ though not capable of precise definition, on

reflection receives its connotation from the con-

text, the delinquency in its performance and its

effect on the discipline and the nature of the

duty. It may involve moral turpitude, it must be

improper or wrong behaviour; unlawful behav -

iour, wilful in character; forbidden act, a trans-

gression of established and definite rule of action

or code of conduct but not mere error of judg-

ment, carelessness or negligence in performance

of the duty; the act complained of bears forbid-

den quality or character. Its ambit has to be con-

96

Page 97 strued with reference to the subject-matter and

the context wherein the term occurs, regard be-

ing had to the scope of the statute and the pub-

lic purpose it seeks to serve. The police service is

a disciplined service and it requires to maintain

strict discipline. Laxity in this behalf erodes dis-

cipline in the service causing serious effect in the

maintenance of law and order.”

(See also Probodh Kumar Bhowmick v. University

of Calcutta

24

and B.C. Chaturvedi v. Union of In-

dia

25

.)”

54. We have referred to the aforesaid passages to

highlight that when an administrator is discharging public

function, he is also required to avoid any type of conflict of

interest. It has been so held in the case of Board of

Control for Cricket in India (supra). Any action that

would show conflict of interest is a transgression of the

fundamental principle of fair administration and

governance. It can be stated with certitude that the

principle of rule of law does not countenance such conflict

of interest. It is clear as day that the relationship between

the two individuals and their different obligations expose

conflict of interest. It is an interest where one may abuse

the public office to gain personal benefit either directly or

24

(1994) 2 Cal LJ 456

25

(1995) 6 SCC 749

97

Page 98 indirectly. In the instant case, the son of the Secretary of

the association is a partner in the firm that had been given

the contract. The son might have been inducted as a

partner at a later stage but the fact remains that the father

was the Secretary of the association. In such a situation, it

does not require Solomon’s wisdom or, for that matter, the

wisdom of an adjudicator as described in “Tripitak” to

understand that there is conflict of interest. The Secretary

of the association, as it seems, had sent his conscience on

vacation.

55.In view of the foregoing analysis, we arrive at the

conclusion that the suit land, whereon 23 shops have been

constructed and rented out, belongs to the State

Government; that a part of the ‘Kalyan Mandap’ is built on

the Government land and a portion of it on the leasehold

area of the association; that the association could not have

constructed the ‘Kalyan Mandap’ in this manner and,

therefore, the portion of the land deserves to be resumed by

the State Government; that the arrangement entered into by

the association with M/s. INCON Associates is absolutely

98

Page 99 illegal and there is a conflict of interest since the Secretary’s

son and son-in-law have been inducted as partners in the

concerned firm; that there is revenue loss as the audit

report of the Accountant General is appreciated; that the

Secretary of the association could not have been

instrumental in unauthorised construction on the

government land and in generating revenue therefrom; that

there is a serious concern about the nature of revenue

generation utilisation and the loss sustained; and that the

whole thing makes us feel that there is something rotten in

the management of the affairs in fiscal aspects.

56.Having so concluded, we issue the following

directions:-

(i)The Collector, Cuttack, shall take over possession of

23 shops and the ‘Kalyan Mandap’.

(ii)The Department of Revenue shall be entitled to

continue the tenancy and maintain the Kalyan

Mandap and manage the affairs of the said property

through District Collector, Cuttack.

(iii)No tenant or anyone shall be entitled to institute any

99

Page 100 litigation in any manner in respect of the said property

involved in this appeal that has arisen from T.S. No.

312 of 1991 instituted in the Court of Additional Civil

Judge, Senior Division, Cuttack.

(iv)The government, if it decides to manage the properties

by entering into fresh agreement, is at liberty to do so.

(v)The agreement between the association and M/s.

INCON Associates is declared null and void.

(vi)As the conflict of interest is obvious and the Secretary,

who is accountable to the public, has failed to conduct

himself as required under the law, he is debarred from

contesting for any post in the association.

57.Keeping in view the report of the Accountant General

and the grave doubt that emerges with regard to realisation

of rent or otherwise, as we have already indicated earlier,

there has to be investigation and, accordingly, it is directed

that the Central Bureau of Investigation shall investigate

into the matter keeping in view the report of the Accountant

General and the other aspects which pertain to 23 shops

and the Kalyan Mandap. If anything ancillary is required,

100

Page 101 needless to say, the investigating agency can also look into

those aspects. The Registry is directed to hand over a copy

of this order to Mr. P.K. Dey, learned counsel who ordinarily

appears for the Central Bureau of Investigation.

58.In view of the aforesaid premises, the judgment and

order passed by the High Court remitting the matter as well

as the judgment and decree of the trial court are set aside.

The conclusions arrived at by the trial court and the

directions given by the High Court are substituted by our

aforesaid conclusion and directions. There shall be no order

as regards to the costs of this appeal.

.............................J.

[Dipak Misra]

............................ J.

[Praffula C. Pant]

New Delhi;

April 3, 2017

101