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PETITIONER:

SHIV SAGAR TIWARI

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT: 08/11/1996

BENCH:

KULDIP SINGH, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:

O R D E R

One of the issues for consideration before this Court

in this public interest petition is the validity of the

allotments of 52 shops/stalls made by Smt. Shiela Kaul the

then minister for Housing land Urban development, Government

of India.

While monitoring this case, this court has passed

various interim orders from time to time. It would be useful

to quote three such orders. The relevant part of the order

dated April 17, 1996 is as under:

"The material placed before us inter alia, discloses

that 41 shops\stalls allotted on July 3, 1995 were in total

contravention of the rules/policy approved situated in Lodhi

Road Complex - I & II. Hanuman Road Market. Baba Kharak

Singh Marg market, DIZ area Market, and Pleasure Garden near

Lajpat Nagar Market. The material on the record further

shows that the said 43 shops/stalls were allotted by Smt.

shiela Kaul without issuing any public notice/inviting

applications from the eligible persons which was in

violation of the policy formulated by her on December 26,

1994. The material also discloses that orders of allotment

in respect of said 41 shops/stalls were passed by Smt.

Shiela Kaul on June 7, 1995 (5 shops and 36 stalls). The

material further discloses that all the six shops have been

allotted by her to her own relations/employees/domestic

servants of her family members and family friends. She has

allotted two shops to her two grand-sons, one shop to the

maid servant of her son. Shri Vikram Kaul, who is residing

in Dubai. One shop to Handloom Manager of the firm, owned by

her son-in-law and another shop to a close friend. One shop

has been allotted to the nephew of her minister of state,

Shri P.K. Thungon. It is further on the record that while

making allotments in respect of stalls she has allotted most

of the stalls to the relations, friends of her personal

staff and officials of Directorate of Estate. The details

and the names of Estate. The details and the names of

allottees and their relationship have also been placed on

the record."

The relevant part of the order dated July 19, 1996 is

as under:

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"Mr. N N. Singh, Superintendent of Police, CBI, New

Delhi has placed on record interim report No. 3 dated June

17, 1996 and Interim Report No. 4 dated July separate

preliminary enquiry was registered against Smt. Shiela Kaul

and others in the matters of allotment of shops/stalls made

by her on June 7,1996 and July 3, 1995 in favour of her

close relations/friends of her personal Estate. According to

the report, the preliminary enquiry, prima facie,

establishes that Smt. Shiela Kaul had abused her official

position as the Minister for Urban Development and she had

entered into a criminal conspiracy with some of the

acquaintances and her personal staff, pursuant to which she

in abuse of her official position made these allotments and

caused wrongful loss to the Government by effecting

allotments on economical licence fees basis without inviting

any tender or by issuing public notice for inviting the

response from the general public from the point of view of

earning maximum revenue for the Government. A regular case

under Section 120-B, 420, 468/471 IPC and Section 13(2) read

with 13(1) (d) of the Prevention of Corruption Act, 1988,

has been registered against Shiela Kaul and her additional

Private Secretary Rajan S. Lala and others.

The order dated September 6, 1996 to the extent

relevant is as under:

"Pursuant to this Court`s order dated July 19, 1996,

the Director of Estates has filed its report along with an

affidavit regarding the shops and stalls allotted by Smt.

Shiela Kaul. It is stated that from 1992 onwards 52 shops

have ben sanctioned by the then Minister for Urban

Development (Smt. Shiela Kaul) out of which 7 shops were

allotted by Smt. Shiela Kaul before she herself had approved

the policy in 1994 for disposal of the shops on tender

basis. It is further stated in the affidavit that 45 shops

were allotted by Smt. Shiela Kaul after 1994 in violation of

the policy framed by the Ministry.

The gist of the objections filed by the various

allottees have been enclosed along with the affidavit.

Before any action is taken, we consider it appropriate to

give an opportunity of hearing to all these persons. We,

therefore, direct the Director of estates to issue

individual notices to these 42 persons to be personally

present in this Court or through their counsel to argue

their point of view in respect of their objections on 27th

September, 1996 at 2 PM. They shall show cause to this Court

why their allotment be not cancelled and why they be not

burdened with damages."

This Court by the judgment dated October 11, 1996 has

come to the conclusion that the allotments of the said 52

shops/stalls made by Smt. Shiela Kaul were arbitrary,

discriminatory, unconstitutional and as such were liable to

be quashed. This Court quashed the said allotments on the

following reasoning:

"The CBI has since inquired into the matter in some

detail and has by now submitted 4 Interim Reports. According

to the CBI, orders of allotment in respect of the

shops/stalls in question were passed by Smt. Shiela Kaul,

the then Minister of Urban Development and " all the 6 shops

have been allotted by her to her own

relation/employees/domestic servants of her family members

and family friends. She has allotted 2 shops to her 2

grandsons, one shop to the maidservant of her shop to sh.

Vikram Kaul who is residing in Dubai, one shop to handloom

manager o the firm owned by her son-in-law and another shop

to a close friend. One shop has been allotted to the nephew

of the minister of State, Sh. P.K. Thungon. While making

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allotments in respect of stalls, she has allotted most of

stalls to the relations/friends of her personal staff and

officials of Dte. of Estate." The CBI has also reported that

Smt. Shiela Kaul had made ten different categories of

persons as the basis for deciding allotments, but even this

categorisation was not adhered to while making allotments.

The further findings are; (1) Many other

Organisations/persons who had also applied for allotment of

shops/stalls from time to time were not considered for

allotment of shops/stalls to them": and (2) - "At the time

of discretionary allotments made by Smt. Shiela Kaul in 1992

and 1994 persons who were relations of her personal staff

were considered and allotted shops......"

Question is whether they were selected in accordance

with law, which aspect as its importance because apparently

a large number of other persons could as well fall within

the categories in question and had applied also? From the

report of the CBI it is clear that the allottees had been

selected, not by following the tender system, as required by

the policy of 1994, but because of their relationship with

the minister or her personal staff, or being employees or

friends of such persons. If that be so, the allotments were

wholly question is what is required to be done to undo the

wrong and how the wrong doer is to be dealt with within the

parameters known to law."

Finally in para 18 of the judgment, this Court directed

as under :

Secondly, Smt. Shiela Kaul, who was prima facie

personally responsible for the illegal allotments, has to be

asked to show cause as to why damage should not be awarded

against her for her alleged misuse of power. So, a notice be

issued to her to show cause why she should not be asked to

pay such sum as damages, for each of the illegal allotments

made by her, as this Court would deem just and proper. The

cause would be shown within three weeks of the receipt of

this order."

Pursuant to the above quoted directions, a show cause

notice was issued to Smt. Shiela Kaul. She has filed

affidavit in reply to the show cause notice.

Smt. Shiela Kaul was arrayed ass respondent in the writ

petition. This Court has been monitoring this case for a

period of about 2 years. Various interim orders were passed

from time to time. Despite ample opportunity available to

her Smt. Shiela Kaul did not choose to file any counter-

affidavit in this Court. Dr. Rajiv Dhawan, learned counsel

appearing for Smt. Shiela Kaul has very fairly stated that

her client cannot take her case higher than what has ben

stated in the affidavit filed on behalf of the Union of

India. The learned counsel has relied upon para 6 & 7 of the

affidavit dated September 6, 1996 filed by Harcharanjeet

Singh, Director of Estates, Ministry of Urban Affairs and

Employment. On behalf of Union of India. The said paras are

as under :

"6. That the Ministry of Works & Housing (renamed as

ministry of Urban Affairs & Employment) on 24th March, 1979

had issued the policy to be adopted for development, and

construction of shopping centres in various Government

colonies in Delhi. A copy of the Office Memorandum issued in

this regard is given as Annexure-R-V. The salient features

of the policy are indicated as follows.

i) The shops under construction in convenient/local

shopping centres in the sanctioned scheme would be sold by

auction by the Land & Development Officer after fixing

minimum reserve price in consultation with the Finance

Division.

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ii) In respect of the shopping centres which are to be

constructed in various colonies the L & DO would auction the

sites for various purposes on perpetual leasehold basis.

iii) Such shops that are constructed multistorey

buildings would be taken in the books of Director of Estates

would allot the same on licence, fee basis.

iv) While the above was the general policy to be

adopted in future (after 24th March, 1979) exceptions may be

made if the circumstances so warranted.

7. The records of the Director of Estates indicate

that after the issue of these instructions in March 1979,

the Office of L & D O has not been able to auction any shops

in any of the shopping centres in Government colonies,

despite the efforts made by the Office of L & D O was

considered too high and no bidders came forward for auction

of shops. At present, have been taken by various Ministers

to allot the shops on licence fee basis are with the Central

Bureau of Investigation. In the absence of records which

were not the exact position in respect of each shop which

has been given on licence fee basis after the policy as

indicated above came into force. However, on the basis of

the individual files it is observed that in January, 1986, 5

shops were given on licence fee basis by the then shops were

allotted on licence fee basis by the then minister (Smt.

Mohsina Kidwai). Thereafter, from 1992 onwards 52 shops have

been sanctioned by the then minister for Urban Development

(Smt Shiela Kaul) out of which 7 shops were allotted by Smt.

Shiela Kaul before she herself had approved the policy in

1994 for disposal of the shops on tender basis.

8. Break-up of the shops allotted by Smt. Shiela

Kaul, the then Minister during her tenure is as follows:

Shops allotted from 1992 to 1994

7

(Before the Policy of giving the

shops on tender basis was

approved).

Shops allotted after 1994 policy

45

was laid down.

Shops not accepted by the allottees

9

The contents, quoted above, only give the factual

position pertaining to the allotment of shops/stalls during

the period from 1979 onwards. It is further obvious that

Smt. Shiela Kaul herself framed the Policy in 1994 for

disposal of the shops on tender basis but did not follow the

same. At this stage it would be instructive to quote the

explanation given by Smt. Shiela Kaul in her affidavit in

reply to the show cause notice to the allegation that she

allotted shops to her two grand children, friends, and

relations:

"In any case, the allegations are wrong in material

particulars in that-

In respect to the 2 shops to her grandsons, she was not

aware at that time because the name in the list were Vivek

Kumar & Ashish Kumar and the addresses were of Delhi of

which she was not aware. The shop allotted to maid servant

of her son Vikram Kaul, she was not aware of her name and

addresses in the statement given to her. She comes from a

weaker section of society and comes under Schedule Tribes."

We do not wish to comment except that we are at pains

to read the above quoted stand taken by a person who has

held high offices like Central Minister and Governor.

This Court in Common Cause A Regd. Society vs. Union of

India & Ors. Writ Petition (C) 26 of 1995 (Capt. Satish

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Sharma's case) decided on November 4, 1996 relied upon this

Court's judgment in Nilabati Behera (Smt.) Alias Lalita

Behera Vs. State of Orissa and Ors. 1993 (2) SCC 746. This

Court also referred to Rookes Vs. Barnard & Ors. 1964 Appeal

Cases 1129 and the judgment of the Court of Appeal in A.B.

and Ors. Vs. South West Water Services Ltd. 1993 Queen's

Bench 507 and held as under:

"We are of the view that the legal position that

exemplary damages can be awarded in a case where the action

of a public servant is oppressive, arbitrary or

unconstitutional is unexceptionable."

Even in the judgment dated October 11, 1996 by which

show cause notice was issued to Smt. Shiela Kaul, this Court

referred to various judgments of different Courts from

different countries in the world and has held that a public

servant is liable to exemplary damages for his acts which

are oppressive, arbitrary or unconstitutional.

The question for consideration, however, is whether the

action of Smt. Shiela Kaul, as discussed in detail in our

judgment dated October 11, 1996 (relevant part quoted above)

and also in various interim orders quoted above, makes her

liable to pay exemplary damages. After gibing our thoughtful

consideration to the material on record and in particular

the findings of this Court- quoted above- the answer has to

be in the affirmative. Smt. Shiela Kaul's action was wholly

arbitrary, malafide and unconstitutional. This Court has

given clear finding in the judgment/orders quoted above to

this effect. We, therefore, hold that Smt. Shiela Kaul is

liable to pay exemplary damages.

We have heard Dr. Rajiv Dhawan, Mr. Kapil Sibal, Mr.

Altaf Ahmad, learned Additional Solicitor General and Mr.

Shiv Sagar Tiwari on the question of quantum. Dr. Dhawan has

stated that Smt. Shiela Kaul has followed the same Policy

which was being followed by her predecessors in office. Mr.

Kapil Sibal has contended that exemplary damages should be

awarded for public injury caused as a result of arbitrary

exercise of power on the part of Smt. Shiela Kaul. He has,

however, contended that so far as the allotments made by her

are concerned, in the facts and circumstances of the case,

exemplary damages are not called for. Mr. Sibal has based

his contention on the assumption that if the allotments were

to be made to the persons belonging to the weaker sections

of the society, then, there would not have much gain to the

State Exchequer. There is nothing on the record to show that

if the allotments were to be made only to weaker sections

or to any category of persons. In any case Smt. Shiela Kaul

did not follow any Policy or criteria. Allotments w e re

made by her in an arbitrary and illegal manner.

We may mention that this Court in the order dated

November 4, 1996 concerning Capt. Satish Sharma awarded Rs.

50 lacs as damages for his actions which were arbitrary,

malafide and unconstitutional.

After examining all the facts and circumstances of the

case and giving our thoughtful consideration to this aspect.

We direct Smt. Shiela Kaul to pay a sum of Government

Exchequer. Since the property with which Smt. Shiela Kaul

was dealing was public property, the Government which is "by

the people: has to be compensated. We further direct Smt.

Shiela Kaul to deposit the amount with the Secretary,

ministry of Finance, Government of India within nine months

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

arrears of land revenue.

Before parting with this order, we make it clear that

the CBI. Which is separately investigating the matter, shall

not be influenced by any observations made by this Court for

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reaching the conclusion as to whether any prima facie case

for prosecution/trial is made out against Smt. Shiela Kaul.

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

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

investigation.