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PETITIONER:

SHIVSAGAR TIWARI

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT: 11/10/1996

BENCH:

KULDIP SINGH, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

HANSARIA.J.

Edmund Burke stated as early as 1777: "Among a people

generally corrupt, liberty cannot long exist." In 1778, he

observed: "An arbitrary system indeed must always be a

corrupt one. There never was a man who thought he had no law

but his own will, who did not soon find that he had no end

but his own profit."

2. According to Francis Beanmount (1584-1616)

corruption is a tree, whose branches are of an unmeasurable

length, they spread everywhere, and the dew that drops from

thence, hath infected some chairs and stools of authority.

3. In the Encyclopaedia of Democracy by Seymour Martin

Lipset, Vol.1, page 310, in the Chapter "Corruption", it is

stated that corruption is an abuse of public resources for

private gain. It is known that bribes open the way for

access to the State for those who are willing to pay and can

afford to pay. The situation leaves non-corrupt citizen with

the belief that one counts only if one has the right

personal contact with those who hold power and also allow

persons with money power to get things done to their

advantage through back door.

4. In the present case, as we are concerned with

alleged motivated, arbitrary and high-handed actions of a

Minister, it would be worth-while to point out what role has

been assigned in a parliamentary democracy to a Minister.

The head of the State (President or Governor in our country,

as the case may be,) calls upon the leader of the political

party that commands majority to form government and appoints

him as Prime/Chief Minister; and on later's advice appoints

other Ministers. Business of the Government, gets allocated

and is run as per business rules framed, which in our

Constitution has been dealt by Article 166(3). The executive

power of the Government is distributed department wise and

one Government is distributed department wise and one

Minister is made the head of that department. That Minister

becomes responsible for the actions, acts and policies of

his department. He becomes principally accountable and

answerable to the people. His powers and duties are

regulated by the law of the land. The legal and moral

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responsibility or liability for the acts or omissions rest

solely on the Minister.

5. Having noted the philosophy, sociology and etymology

of corruption, as well as the essence of a parliamentary

democracy, let it broadly be seen what had happened in the

present case. For this purpose it would be enough to note

some of the prima facie conclusions arrived at by the

Central Bureau of Investigation (CBI) who was required by

this Court to inquire into the matter (which has come to be

known as Housing Scam) by order dated 14.2.1996.

6. The CBI has since inquired into the master in some

detail and has by now submitted 4 Interim 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 son,

Sh. Vikram Kaul who is residing in Dubai, one ship 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 the Minister of State, Sh. P.K. Thungon.

While making allotments in respect of stalls, she has

allotted most of stalls to the relations/friends of her

personal staff and officials of Dte. of Estates." 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 and no reasons, whatsoever, were

assigned for non-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."

7. In the order dated 19.7.1996 this Court noted that a

regular case under sections 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 Smt.

Shiela Kaul and her Addl. Private Secretary Rajan S.

Lala and others. The order of that date has also noted

about various other steps taken, which include inssuance of

show cause why allotments of shops/stalls should not be

cancelled. It was desired that the notices be served within

a week and the Estate Officer, after considering their

replies, if any, place a report before the Court within four

weeks.

8. Such a report was filed under the affidavit of Shri

Harcharan Jeet Singh, Director of Estates, which was taken

up for consideration on 16.9.1996. The affidavit of the

Director has stated that from 1994 onwards 52 shops/stalls

had been sanctioned by the then Minister of Urban

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

allotted by Smt. Kaul before she had approved policy of 1994

and the remaining 45 shops were allotted after the policy of

1994. In the affidavit the gist of the objections filed by

the various allottees was enclosed. This Court thought it

appropriate to give an opportunity of hearing to all these

persons before any action was taken. A direction was,

therefore, given to the Director to issue individual notices

to the 52 persons (wrongly mentioned as 42 in the order) to

be personally present in the Court or be represented

through their counsel on 27th September. These alottees so

appeared either in person or through counsel and they were

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heard.. The sum and substance of the representations of the

allottees was that they had been given an allotment either

because of their being unemployed youths, freedom fighters,

handicapped, members of Scheduled Castes/Scheduled Tribes,

widow or poverty-stricken.

9. 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 alottees 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 arbitrary and speak of misuse of power. All important

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.

10. It would be apposite in this contact to refer to

the recent decision of this Court in Writ Petition (C) No.

26 of 1995 (Common Cause, a Registered Society v. Union of

India) rendered on September 25, 1996, in which one of us

(Kuldip Singh,J.) reiterated the need to act fairly and

justly in the matter of grant of largesses, pointing out

that any arbitrary distribution of national wealth would

violate the law of the land. Mention was made of the

judgment in Lucknow Development Authority v. N.K. Gupta,

1994(1) SCC 243, stating that the same approved

"misfeasance in public office" as a part of the law of the

tort. It was pointed out that public servants become liable

in damages for malicious, deliberate or injurious wrong-

doing.

11. A reference to Wade's 'Administrative Law' shows

that a breach of statutory duty does give rise in public law

to liability, which has come to be known as "misfeasance in

public office", and which includes malicious abuse of power.

This aspect has been dealt at pages 789 et al of 7th

Edition. It has been stated that public authorities or

officers may be liable in damages for malicious, deliberate

or injurious wrong-doing. The Supreme Court of Canada in Ron

Carelli v. Duplejis (1959) 16 DLR (2d) 689 awarded damages

against the Prime Minister of Quebec personally for

directing the cancellation of a restaraunt-owner's liquor

licence. The Supreme Court of Victoria in Farrington v.

Thomson, 1959 VR 280, awarded damages against a licensing

inspector and a police officer who had ordered the

plaintiff to close his hotel and cease supplying liquor,

though they knew they did not posses such a power. Smith J.

referred in that case to the statement of Best CT made in

Henly v. Lyme Corpn., (1858) 5 Bing 91 at 107 reading as

below:-

"Now I take it to be perfectly

clear, that if a public officer

abuses his office, either by an act

of omission or commission, and the

consequence of that is an injury to

an individual, an action may be

maintained against such public

officer. The instance of this are

so numerous that it would be a

waste of time to refer to them."

12. The learned author has then opined that the

cases establish that the tort of misfeasance in public

offices goes at least to the length of imposing liability on

public officer who does an act which to his knowledge

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amounts to an abuse of his office.

13. We may also note what has been stated in this

regard in "Cases and Materials on Administrative Law" by SH

Bailey and others at pages 826 et al of 2nd Edition. The

authors have noted the decision rendered in Bourgoin SA

v.Minister of Agriculture, Fishery and Food, 1985-3 All ER

585, on the subject of misfeasance. In that case damages

were claimed against a Minister, which was held permissible.

Lord Diplock's observation in Dunlop v. Woolllahar Municipal

Council, 1982 AC 158, that this was "well established"

position was noted.

14. From the aforesaid it is clear that the above has

been accepted as a part of the law of tort practically all

over the world. What is more, in some countries exemplary

damages have been awarded for misuse of public power.

Reference may be made to Deshpriya and another v. Municipal

Council, Nuwara Eliva & Others. which a decision of the

Supreme Court of Sri Lanka dated 10.3.1995, noted at pages

115 to 117 of 1996(1) Commonwealth Human Rights Law Digest

(CHRD). Therein, aggravated award was ordered where

political discrimination was the motive for restricting

freedom of expression. The Supreme court of Bahamas in the

case of Tynes v. Barr, by a decision rendered on 28.3.1994,

ordered for exemplary damages for arbitrary, oppressive or

unconstitutional action by State Officials. A summary of

this decision is reported at pages 117 to 120 of the

aforesaid Law Digest. The need for awarding exemplary

damages was felt by Sauyer, J. because of the arrogant,

abusive and outrageous disregard shown by the police for the

law. The learned Judge awarded $40,505 as special damages; $

75,000 for assault, battery and false imprisonment; $

1,00,000 for malicious prosecution and $ 40,000 for breach

of the plaintiff's constitutional rights. Reference may also

be made to the decision of supreme Court of Jamaica in

Samulls v. Attorney General (noted at pages 120 to 122 of

the aforesaid Digest) in which Reckford, J. by his decision

dated 11.11.1994 awarded exemplary damages for assault,

battery and malicious prosecution. The award was quantified

at $ 1,00,000.

15. The world jurisprudence has thus accepted

misfeasance in public office as a species of tortious

liability and, to prevent misuse, different courts across

the sea have been awarding exemplary damages.

16. We are conscious that the aforesaid cases dealt

with injury to a third party (following misuse of power) who

had sought damages for the loss caused, whereas in the

present case there is no injury as such to any third person.

Even so, the aforesaid cases have been referred for two

purposes. Firstly and primarily to bring home the position

in law that misuse of power by a public official is

actionable in tort. Secondly, to state that in such cases

damages awarded are exemplary. The fact that there is no

injury to a third person in the present case is not enough

to make the aforesaid principles non-applicable inasmuch as

there was injury to the high principle inasmuch as there was

injury to the high principle in public law that a public

functionary has to use its power for bonafide purpose only

and in a transparent manner. Insofar as the aspect of loss

is concerned, it deserves to be pointed out that there was

loss in present case also; and this was to the State

Exchequer resultant upon giving of allotments without

calling tender as required by the policy. Needless to say

that if tender would have been called, higher revenue would

have been earned by the State on giving the allotments. For

these reasons, we are of the view that the mere fact that

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in the present case there is no injury to a third person and

he has not come forward to claim damages, has no sequitur in

so far as the tortious liability following misfeasance of

public office is concerned.

17. Now, to take care of the illegality, we have to

take two steps. First, cancel the allotments. To decide as

to who should get the shops/stalls, the Government would

first consider whether its policy of 1994 and categorisation

made by it need alteration in any way. While undertaking

this work, the Government would make such provisions in the

policy which are just and fair. After the policy has been

framed, the shops/stalls would be allotted as per the policy

and by following a procedure having the sanction of law. In

case it would be that any of the present allottees would not

be the person so selected, he/she shall be asked to vacate

the shop/shall by giving three months time. We would require

the Government to formulate the policy within two months and

thereafter to complete the exercise of allotment within two

months. Till then, the present allottees would be allowed to

continue.

18. 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 how cause why she should not 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.

19. The issue relating to the matter of illegal

allotments of the aforesaid 52 shops/stalls, stands disposed

of accordingly. It may be put up for further orders on 1st

November, 1996.

20. Let a copy of this order be served on Smt. Shiela

Kaul urgently to enable her to act as ordered in the

judgment. Steps in this regard shall be taken by the

Registry within three days.