Judicial Bias and the Doctrine of Waiver : The Law

Justice Dr. B.S. Chauhan
Supreme Court of India

The Supreme Court in State of Punjab Vs. Davinder Pal Singh Bhullar has examined the concepts of 'Judicial Bias' and the Doctrine of Waiver. The Supreme Court has held that the issue of bias should be raised by the party at the earliest, if it is aware of it and knows its right to raise the issue at the earliest, otherwise it would be deemed to have been waived. While examining various judicial authorities on the subject, the Supreme Court held as under;

LEGAL ISSUES : I. JUDICIAL BIAS 

10. There may be a case where allegations may be made against a Judge of having bias/prejudice at any stage of the proceedings or after the proceedings are over. There may be some substance in it or it may be made for ulterior purpose or in a pending case to avoid the Bench if a party apprehends that judgment may be delivered against him. Suspicion or bias disables an official from acting as an adjudicator. Further, if such allegation is made without any substance, it would be disastrous to the system as a whole, for the reason, that it casts doubt upon a Judge who has no personal interest in the outcome of the controversy. 

11. In respect of judicial bias, the statement made by Frank J. of the United States is worth quoting:- 

"If, however, `bias' and `partiality' be defined to mean the total absence of preconceptions in the mind of the Judge, then no one has ever had a fair trial and no one will. The human mind, even at infancy, is no blank piece of paper. We are born with predispositions ....... Much harm is done by the myth that, merely by....... taking the oath of office as a judge, a man ceases to be human and strips himself of all predilections, becomes a passionless thinking machine." [In re: Linahan, 138 F. 2nd 650 (1943)] 

(See also: State of West Bengal & Ors. v. Shivananda Pathak & Ors., AIR 1998 SC 2050). 

12. To recall the words of Mr. Justice Frankfurter in Public Utilities Commission of the District of Columbia v. Franklin S. Pollak, 343 US 451 (1952) 466: The Judicial process demands that a judge moves within the framework of relevant legal rules and the covenanted modes of thought for ascertaining them. He must think dispassionately and submerge private feeling on every aspect of a case. There is a good deal of shallow talk that the judicial robe does not change the man within it. It does. The fact is that, on the whole, judges do lay aside private views in discharging their judicial functions. This is achieved through training, professional habits, self- discipline and that fortunate alchemy by which men are loyal to the obligation with which they are entrusted. 

13. In Bhajan Lal, Chief Minister, Haryana v. M/s. Jindal Strips Ltd. & Ors., (1994) 6 SCC 19, this Court observed that there may be some consternation and apprehension in the mind of a party and undoubtedly, he has a right to have fair trial, as guaranteed by the Constitution. The apprehension of bias must be reasonable, i.e. which a reasonable person can entertain. Even in that case, he has no right to ask for a change of Bench, for the reason that such an apprehension may be inadequate and he cannot be permitted to have the Bench of his choice. The Court held as under:- 

"Bias is the second limb of natural justice. Prima facie no one should be a judge in what is to be regarded as `sua causa', whether or not he is named as a party. The decision- maker should have no interest by way of gain or detriment in the outcome of a proceeding. Interest may take many forms. It may be direct, it may be indirect, it may arise from a personal relationship or from a relationship with the subject-matter, from a close relationship or from a tenuous one." 

14. The principle in these cases is derived from the legal maxim - nemo debet esse judex in causa propria sua. It applies only when the interest attributed is such as to render the case his own cause. This principle is required to be observed by all judicial and quasi-judicial authorities as non-observance thereof, is treated as a violation of the principles of natural justice. (Vide: Rameshwar Bhartia v. The State of Assam, AIR 1952 SC 405; Mineral Development Ltd. v. The State of Bihar & Anr., AIR 1960 SC 468; Meenglas Tea Estate v. The Workmen, AIR 1963 SC 1719; and The Secretary to the Government, Transport Department, Madras v. Munuswamy Mudaliar & Ors., AIR 1988 SC 2232). The failure to adhere to this principle creates an apprehension of bias on the part of the Judge. The question is not whether the Judge is actually biased or, in fact, has really not decided the matter impartially, but whether the circumstances are such as to create a reasonable apprehension in the mind of others that there is a likelihood of bias affecting the decision. (Vide: A.U. Kureshi v. High Court of Gujarat & Anr., (2009) 11 SCC 84; and Mohd. Yunus Khan v. State of U.P. & Ors., (2010) 10 SCC 539). 

15. In Manak Lal, Advocate v. Dr. Prem Chand Singhvi & Ors., AIR 1957 SC 425, this Court while dealing with the issue of bias held as under: 

"Actual proof of prejudice in such cases may make the appellant's case stronger but such proof is not necessary.... What is relevant is the reasonableness of the apprehension in that regard in the mind of the appellant." 

16. The test of real likelihood of bias is whether a reasonable person, in possession of relevant information, would have thought that bias was likely and whether the adjudicator was likely to be disposed to decide the matter only in a particular way. Public policy requires that there should be no doubt about the purity of the adjudication process/administration of justice. The Court has to proceed observing the minimal requirements of natural justice, i.e., the Judge has to act fairly and without bias and in good faith. A judgment which is the result of bias or want of impartiality, is a nullity and the trial "coram non judice". Therefore, the consequential order, if any, is liable to be quashed. (Vide: Vassiliades v. Vassiliades, AIR 1945 PC 38; S. Parthasarathi v. State of Andhra Pradesh, AIR 1973 SC 2701; and Ranjit Thakur v. Union of India & Ors., AIR 1987 SC 2386). 

17. In Rupa Ashok Hurra v. Ashok Hurra & Anr., (2002) 4 SCC 388, this Court observed that public confidence in the judiciary is said to be the basic criterion of judging the justice delivery system. If any act or action, even if it is a passive one, erodes or is even likely to erode the ethics of judiciary, the matter needs a further look. In the event, there is any affectation of such an administration of justice either by way of infraction of natural justice or an order being passed wholly without jurisdiction or affectation of public confidence as regards the doctrine of integrity in the justice delivery system, technicality ought not to outweigh the course of justice -- the same being the true effect of the doctrine of ex debito justitiae. It is enough if there is a ground of an appearance of bias. While deciding the said case, this Court placed reliance upon the judgment of the House of Lords in Ex Parte Pinochet Ugarte (No.2) 1999 All ER, 577, in which the House of Lords on 25.11.1998, restored warrant of arrest of Senator Pinochet who was the Head of the State of Chile and was to stand trial in Spain for some alleged offences. It came to be known later that one of the Law Lords (Lord Hoffmann), who heard the case, had links with Amnesty International (AI) which had become a party to the case. This was not disclosed by him at the time of the hearing of the case by the House. Pinochet Ugarte, on coming to know of that fact, sought reconsideration of the said judgment of the House of Lords on the ground of appearance of bias and not actual bias. On the principle of disqualification of a Judge to hear a matter on the ground of appearance of bias, it was pointed out: 

"An appeal to the House of Lords will only be reopened where a party though no fault of its own, has been subjected to an unfair procedure. A decision of the House of Lords will not be varied or rescinded merely because it is subsequently thought to be wrong." 

18. In Locabail (UK) Ltd. v. Bayfield Properties Ltd. & Anr., (2000) 1 All ER 65, the House of Lords considered the issue of disqualification of a Judge on the ground of bias and held that in applying the real danger or possibility of bias test, it is often appropriate to inquire whether the Judge knew of the matter in question. To that end, a reviewing court may receive a written statement from the Judge. A Judge must recuse himself from a case before any objection is made or if the circumstances give rise to automatic disqualification or he feels personally embarrassed in hearing the case. If, in any other case, the Judge becomes aware of any matter which can arguably be said to give rise to a real danger of bias, it is generally desirable that disclosure should be made to the parties in advance of the hearing. Where objection is then made, it will be as wrong for the Judge to yield to a tenuous or frivolous objection as it will be to ignore an objection of substance. However, if there is real ground for doubt, that doubt must be resolved in favour of recusal. Where, following appropriate disclosure by the Judge, a party raises no objection to the Judge hearing or continuing to hear a case, that party cannot subsequently complain that the matter disclosed gives rise to a real danger of bias. 

19. In Justice P.D. Dinakaran v. Hon'ble Judges Inquiry Committee, (2011) 8 SCC 380, this Court has held that in India the courts have held that, to disqualify a person as a Judge, the test of real likelihood of bias, i.e., real danger is to be applied, considering whether a fair minded and informed person, apprised of all the facts, would have a serious apprehension of bias. In other words, the courts give effect to the maxim that `justice must not only be done but be seen to be done', by examining not actual bias but real possibility of bias based on facts and materials. The Court further held: 

"The first requirement of natural justice is that the Judge should be impartial and neutral and must be free from bias. He is supposed to be indifferent to the parties to the controversy. He cannot act as Judge of a cause in which he himself has some interest either pecuniary or otherwise as it affords the strongest proof against neutrality. He must be in a position to act judicially and to decide the matter objectively. A Judge must be of sterner stuff. His mental equipoise must always remain firm and undetected. He should not allow his personal prejudice to go into the decision- making. The object is not merely that the scales be held even; it is also that they may not appear to be inclined. If the Judge is subject to bias in favour of or against either party to the dispute or is in a position that a bias can be assumed, he is disqualified to act as a Judge, and the proceedings will be vitiated. This rule applies to the judicial and administrative authorities required to act judicially or quasi-judicially." 

20. Thus, it is evident that the allegations of judicial bias are required to be scrutinised taking into consideration the factual matrix of the case in hand. The court must bear in mind that a mere ground of appearance of bias and not actual bias is enough to vitiate the judgment/order. Actual proof of prejudice in such a case may make the case of the party concerned stronger, but such a proof is not required. In fact, what is relevant is the reasonableness of the apprehension in that regard in the mind of the party. However, once such an apprehension exists, the trial/judgment/order etc. stands vitiated for want of impartiality. Such judgment/order is a nullity and the trial "coram non-judice". 

II. DOCTRINE OF WAIVER: 

21. In Manak Lal (Supra), this Court held that alleged bias of a Judge/official/Tribunal does not render the proceedings invalid if it is shown that the objection in that regard and particularly against the presence of the said official in question, had not been taken by the party even though the party knew about the circumstances giving rise to the allegations about the alleged bias and was aware of its right to challenge the presence of such official. The Court further observed that waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. "Waiver can be inferred only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question." Thus, in a given case if a party knows the material facts and is conscious of his legal rights in that matter, but fails to take the plea of bias at the earlier stage of the proceedings, it creates an effective bar of waiver against him. In such facts and circumstances, it would be clear that the party wanted to take a chance to secure a favourable order from the official/court and when he found that he was confronted with an unfavourable order, he adopted the device of raising the issue of bias. The issue of bias must be raised by the party at the earliest. (See: M/s. Pannalal Binjraj & Ors. v. Union of India & Ors., AIR 1957 SC 397; and Justice P.D. Dinakaran (Supra)) 

22. In M/s. Power Control Appliances & Ors. v. Sumeet Machines Pvt. Ltd., (1994) 2 SCC 448 this Court held as under:- 

"Acquiescence is sitting by, when another is invading the rights.... It is a course of conduct inconsistent with the claim... It implies positive acts; not merely silence or inaction such as involved in laches. ........ The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant......" Inaction in every case does not lead to an inference of implied consent or acquiescence as has been held by this Court in P. John Chandy & Co. (P) Ltd. v. John P. Thomas, AIR 2002 SC 2057. Thus, the Court has to examine the facts and circumstances in an individual case. 

23. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege, which except for such a waiver, a party could have enjoyed. In fact, it is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. (Vide: Dawsons Bank Ltd. v. Nippon Menkwa Kabushihi Kaish, AIR 1935 PC 79; Basheshar Nath v. Commissioner of Income-tax, Delhi and Rajasthan & Anr., AIR 1959 SC 149; Mademsetty Satyanarayana v. G. Yelloji Rao & Ors., AIR 1965 SC 1405; Associated Hotels of India Ltd. v. S. B. Sardar Ranjit Singh, AIR 1968 SC 933; Jaswantsingh Mathurasingh & Anr. v. Ahmedabad Municipal Corporation & Ors., (1992) Suppl 1 SCC 5; M/s. Sikkim Subba Associates v. State of Sikkim, AIR 2001 SC 2062; and Krishna Bahadur v. M/s. Purna Theatre & Ors., AIR 2004 SC 4282). 

24. This Court in Municipal Corporation of Greater Bombay v. Dr. Hakimwadi Tenants' Association & Ors., AIR 1988 SC 233 considered the issue of waiver/acquiescence by the non- parties to the proceedings and held: 

"In order to constitute waiver, there must be voluntary and intentional relinquishment of a right. The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver. Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case....... 

There is no question of estoppel, waiver or abandonment. There is no specific plea of waiver, acquiescence or estoppel, much less a plea of abandonment of right. That apart, the question of waiver really does not arise in the case. Admittedly, the tenants were not parties to the earlier proceedings. There is, therefore, no question of waiver of rights, by Respondents 4-7 nor would this disentitle the tenants from maintaining the writ petition." 

25. Thus, from the above, it is apparent that the issue of bias should be raised by the party at the earliest, if it is aware of it and knows its right to raise the issue at the earliest, otherwise it would be deemed to have been waived. However, it is to be kept in mind that acquiescence, being a principle of equity must be made applicable where a party knowing all the facts of bias etc., surrenders to the authority of the Court/Tribunal without raising any objection. Acquiescence, in fact, is sitting by, when another is invading the rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create rights in other party. Needless to say that question of waiver/acquiescence would arise in a case provided the person apprehending the bias/prejudice is a party to the case. The question of waiver would not arise against a person who is not a party to the case as such person has no opportunity to raise the issue of bias.

Lok Adalat Settlement in Cheque Bounce Cases : Executable as Civil Court Decree

Justice P. Sathasivam
Supreme Court of India

The Supreme Court in K.N. Govindan Kutty Menon Vs. C.D. Shaji was called upon to decide whether a settlement award passed by the Lok Adalat, recording the settlement, can be considered as a decree of a civil court and thus executable? The Court went on to hold that even if a matter is referred by a criminal court under Section 138 of the Negotiable Instruments Act, 1881, the award passed by the Lok Adalat based on a compromise has to be treated as a decree capable of execution by a civil court. The relevant extracts from the judgment are reproduced hereinbelow;

6. In order to find out the answer to the question raised, it is useful to refer the Statement of Objects and Reasons and certain provisions of the Act applicable to the question posed before us. 

"Statement of objects and Reasons- 

Article 39-A of the Constitution provides that the State shall secure that the operation of the legal system promotes justice on the basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. 

2. With the object of providing free legal aid, Government had, by Resolution dated the 26th September, 1980 appointed the "Committee for Implementing Legal Aid Schemes" (CILAS) under the Chairmanship of Mr. Justice P.N. Bhagwati (as he then was) to monitor and implement legal aid programmes on a uniform basis in all the States and Union territories. CILAS evolved a model scheme for legal aid programme applicable throughout the country by which several legal aid and advice boards have been set up in the States and Union territories. CILAS is funded wholly by grants from the Central Government. The Government is accordingly concerned with the programme of legal aid as it is the implementation of a constitutional mandate. But on a review of the working of the CILAS, certain deficiencies have come to the fore. It is, therefore, felt that it will be desirable to constitute statutory legal service authorities at the National, State and District levels so as to provide for the effective monitoring of legal aid programmes. The Bill provides for the composition of such authorities and for the funding of these authorities by means of grants from the Central Government and the State Governments. Power has been also given to the National Committee and the State Committees to supervise the effective implementation of legal aid schemes. For some time now, Lok Adalats are being constituted at various places in the country for the disposal, in a summary way and through the process of arbitration and settlement between the parties, of a large number of cases expeditiously and with lesser costs. The institution of Lok Adalats is at present functioning as a voluntary and conciliatory agency without any statutory backing for its decisions. It has proved to be very popular in providing for a speedier system of administration of justice. In view of its growing popularity, there has been a demand for providing a statutory backing to this institution and the awards given by Lok Adalats. It is felt that such a statutory support would not only reduce the burden of arrears of work in regular Courts, but would also take justice to the door-steps of the poor and the needy and make justice quicker and less expensive." 

"2. (aaa) "Court" means a civil, criminal or revenue Court and includes any Tribunal or any other authority constituted under any law for the time being in force, to exercise judicial or quasi-judicial functions;" 

"2(c) "legal service" includes the rendering of any service in the conduct of any case or other legal proceeding before any Court or other authority or Tribunal and the giving of advice on any legal matter;" 

"2(d) "Lok Adalat" means a Lok Adalat organized under Chapter VI." "21. Award of Lok Adalat.- 

(1) Every award of Lok Adalat shall be deemed to be a decree of a Civil Court or, as the case may be, an order of any other Court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub- section (1) of section 20, the Court-fee paid in such case shall be refunded in the manner provided under the Court-Fee Act, 1870 (7 of 1870). 

(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any Court against the award." 

7. Free legal aid to the poor and marginalized members of the society is now viewed as a tool to empower them to use the power of the law to advance their rights and interests as citizens and as economic actors. Parliament enacted the Legal Services Authorities Act, 1987 in order to give effect to Article 39-A of the Constitution to extend free legal aid, to ensure that the legal system promotes justice on the basis of equal opportunity. Those entitled to free legal services are members of the Scheduled Castes and the Scheduled Tribes, women, children, persons with disability, victims of ethnic violence, industrial workmen, persons in custody, and those whose income does not exceed a level set by the government (currently it is Rs 1 lakh a year in most States). The Act empowers Legal Services Authorities at the District, State and National levels, and the different committees to organize Lok Adalats to resolve pending and pre-litigation disputes. It provides for permanent Lok Adalats to settle disputes involving public utility services. Under the Act, "legal services' have a meaning that includes rendering of service in the conduct of any court-annexed proceedings or proceedings before any authority, tribunal and so on, and giving advice on legal matters. Promoting legal literacy and conducing legal awareness programmes are the functions of legal services institutions. The Act provides for a machinery to ensure access to justice to all through the institutions of legal services authorities and committees. These institutions are manned by Judges and judicial officers. Parliament entrusted the judiciary with the task of implementing the provisions of the Act. 

8. Section 21 of the Act, which we have extracted above, contemplates a deeming provision, hence, it is a legal fiction that the "award" of the Lok Adalat is a decree of a civil court. In the case on hand, the question posed for consideration before the High Court was that "when a criminal case referred to by the Magistrate to a Lok Adalat is settled by the parties and award is passed recording the settlement, can it be considered as a decree of civil court and thus executable by that court?" After highlighting the relevant provisions, namely, Section 21 of the Act, it was contended before the High Court that every award passed by the Lok Adalat has to be deemed to be a decree of a civil court and as such executable by that court. Unfortunately, the said argument was not acceptable by the High Court. On the other hand, the High Court has concluded that when a criminal case is referred to the Lok Adalat and it is settled at the Lok Adalat, the award passed has to be treated only as an order of that criminal court and it cannot be executed as a decree of the civil court. After saying so, the High Court finally concluded "an award passed by the Lok Adalat on reference of a criminal case by the criminal court as already concluded can only be construed as an order by the criminal court and it is not a decree passed by a civil court" and confirmed the order of the Principal Munsiff who declined the request of the petitioner therein to execute the award passed by the Lok Adalat on reference of a complaint by the criminal court. On going through the Statement of Objects and Reasons, definition of `Court', `legal service' as well as Section 21 of the Act, in addition to the reasons given hereunder, we are of the view that the interpretation adopted by the Kerala High Court in the impugned order is erroneous. 

9. It is useful to refer some of the judgments of this Court and the High Courts which have a bearing on the present issue. 

10. In Subhash Narasappa Mangrule (M/S) and Others vs. Sidramappa Jagdevappa Unnad, reported in 2009 (3) Mh.L.J. 857, learned single Judge of the High Court of Bombay, considered an identical question. In that case, on 22.06.2001, the respondent filed a Criminal Complaint being S.C.C. No. 923 of 2001 in the Court of Judicial Magistrate, First Class, Akkalkot under Section 138 of the N.I. Act. Later, the said criminal case was transferred to Lok Adalat. The matter was compromised before the Lok Adalat and an award was passed accordingly for Rs. 4 lakhs. The respondent therein filed a Darkhast proceeding No. 17 of 2006 in the Court of C.J.J.D. for execution of the award passed by the Lok Adalat in the criminal case as there was no compliance of the compromised order/award. The learned C.J.J.D., issued a notice under Order XXVII Rule 22 of the Code of Civil Procedure, 1908 (in short `the Code'). The petitioner therein raised an objection stating that the Darkhast proceeding is not maintainable as the award has been passed in criminal case. By order dated 18.07.2007, the learned Civil Judge, (Jr. Division) disposed off the objection and directed to proceed with the execution by the Judgment and order. Aggrieved by the same, the petitioners therein filed a revision before the High Court. After adverting to Section 20 and other provisions of the Act, the learned single Judge has concluded thus:- 

"16. The parties were fully aware that under the Act, the District Legal Services Authority may explore the possibility of holding pre-litigation Lok Adalats in respect of the cheque bouncing cases. The compromise in such cases would be treated as Award having force of a decree. All objections as raised with regard to the execution in view of above statutory provisions itself is rightly rejected. Having settled the matter in Lok Adalat and now after more than 3 years raising such plea is untenable. Having obtained the award from Lok Adalat, the party is not permitted to resile from the same. It attains finality to the dispute between the parties finally and binds all. Therefore, the order in this regard needs no interference. 

17. Once the parties entered into compromise before the Lok Adalat, & at that time no question of any pecuniary jurisdiction raised and or required to be considered by the Lok Adalat. Therefore, once the award is passed, it is executable under C.P.C....." 

11. In M/s Valarmathi Oil Industries & Anr. vs. M/s Saradhi Ginning Factory, AIR 2009 Madras 180, the admitted facts were that C.C. No. 308 of 2006 was taken on file by the learned Judicial Magistrate No. I, Salem on the complaint given by the respondent therein that the cheque was issued by the second petitioner therein on behalf of the first petitioner as partner of the firm, however, the same was dishonoured by the bank due to insufficient funds. According to the respondent, after issuance of the legal notice to the petitioner, the complaint was given under Section 138 of the N. I. Act against the petitioners. During the pendency of the criminal case, at the request of both the parties, the matter was referred to Lok Adalat for settlement. Both the parties were present before the Lok Adalat and as per the award, they agreed for the settlement and accordingly, the petitioner/accused agreed to pay Rs. 3,75,000/- to the respondent on or before 03.09.2007. It was signed by the respondent/complainant, petitioners/accused and their respective counsel. In view of the compromise arrived at between both the parties, the amount payable was fixed at Rs. 3,75,000/- towards full quit of the claim and that the petitioners therein agreed to pay the above-said amount on or before 03.09.2007 and accordingly, the award was passed and placed before the Judicial Magistrate Court for further orders. When the said award was placed before the learned Judicial Magistrate, by judgment dated 17.10.2007, based on the award held that the petitioners therein guilty and convicted under Section 138 of N.I. Act, accordingly, imposed sentence of one year simple imprisonment and directed the petitioners therein to pay a sum of Rs. 3,75,000/- as compensation to the respondent. Aggrieved by which, the petitioners/accused preferred appeal in C.S.No.167 of 2007 before the Sessions Judge, Salem. Learned Sessions Judge, while suspending the sentence of imprisonment till 16.12.2007, directed the petitioners/accused to deposit the sum of Rs. 3,75,000/- before the trial court and clarified that in case of failure of depositing the amount, the order of suspension of sentence would stand cancelled automatically and the petitioners were also directed to execute a bond for Rs. 10,000/- with two sureties each for the like sum to the satisfaction of the trial court. Aggrieved by the same, the accused preferred criminal revision case before the High Court. It was contended on behalf of the petitioners before the High Court that as per Section 21 of the Act, every award of the Lok Adalat shall be deemed to be a decree of a civil court and, therefore, after the award passed by the Lok Adalat, the respondent/complainant was entitled to execute the award like a decree of the civil court, however, in the instant case, the learned Magistrate, by his Judgment has found the petitioners guilty under Section 138 of N.I. Act and also convicted and sentenced them to undergo simple imprisonment for one year and to pay the compensation of Rs. 3,75,000/-. The question formulated by the High Court is whether the Magistrate can convict the petitioners/accused under Section 138 of N.I. Act after the award was passed in the Lok Adalat. Learned single Judge, after adverting to Section 21(1) of the Act and the order of the learned Magistrate has concluded as under:- 

"13. Had there been no settlement in the Lok Adalat, the learned Magistrate could have proceeded with the trial and deliver his Judgment, for which, there is no bar. In the instant case, as admitted by both the learned Counsel, there was an award passed in the Lok Adalat, based on the consensus arrived at between the parties. As per the award, the petitioners/accused had to pay Rs. 3,75,000/- to the respondent/complainant on or before 03.09.2007. As it is an award made by Lok Adalat, it is final and binding on the parties to the criminal revision and as contemplated under Section 21(2) of the Act, no appeal shall lie to any court against the award. 

14. In such circumstances, the petitioners could have filed the Execution Petition before the appropriate court, seeking the award amount to be paid with interest and costs. In such circumstances, it is clear that the learned Judicial Magistrate became functus officio, to decide the case after the award passed by Lok Adalat, to convict the accused under Section 138 of Negotiable Instruments Act, hence, the impugned order passed by the learned Sessions Judge is also not sustainable in law, however, it is clear that the petitioners/accused herein after having given consent for Lok Adalat award being passed and also the award amount agreed to pay Rs. 3,75,000/- on or before 03.09.2007 to the respondent, have not complied with their undertaking made before the Lok Adalat, which cannot be justified. However, the order passed by the learned Judicial Magistrate under Section 138 of Negotiable Instruments Act has to be set aside, in view of the Lok Adalat award passed under Section 20(1)(i)(b), 20(1)(ii) of Legal Services Authorities Act (Act, 39/1987), as the Judicial Magistrate became functus officio and the award is an executable decree in the eye of law, as per Section 21 of the Act." 

After arriving at such conclusion, learned single Judge made it clear that as per the award passed by the Lok Adalat, the respondent/complainant is at liberty to file Execution Petition before the appropriate court to get the award amount of Rs. 3,75,000/- reimbursed with subsequent interest and costs, as per procedure known to law. 

12. In Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. and Others, (2003) 2 SCC 111, it was held that the purpose and object of creating a legal fiction in the statute is well known and when a legal fiction is created, it must be given its full effect. 

13. In Ittianam and Others vs. Cherichi @ Padmini (2010) 8 SCC 612, it was held that when the Legislature uses a deeming provision to create a legal fiction, it is always used to achieve a purpose. 

14. A statutory support as evidenced in the statement of Objects and reasons of the Act would not only reduce the burden of arrears of work in regular courts, but would also take justice to the door steps of the poor and the needy and make justice quicker and less expensive. In the case on hand, the Courts below erred in holding that only if the matter was one which was referred by a civil court it could be a decree and if the matter was referred by a criminal court it will only be an order of the criminal court and not a decree under Section 21 of the Act. The Act does not make out any such distinction between the reference made by a civil court and criminal court. There is no restriction on the power of Lok Adalat to pass an award based on the compromise arrived at between the parties in a case referred by a criminal court under Section 138 of the N.I. Act, and by virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court. In this regard, the view taken in Subhash Narasappa Mangrule (supra) and M/s Valarmathi Oil Industries (supra) supports this contention and we fully accept the same. 

15. It is useful to refer the judgment of this Court in State of Punjab & Anr. vs. Jalour Singh and Ors. (2008) 2 SCC 660. The ratio that decision was that the "award" of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by the parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat. This judgment was followed in B.P. Moideen Sevamandir and Anr. vs. A.M. Kutty Hassan (2009) 2 SCC 198. 

16. In P.T. Thomas vs. Thomas Job, (2005) 6 SCC 478, Lok Adalat, its benefits, Award and its finality has been extensively discussed. 

17. From the above discussion, the following propositions emerge: 

1. In view of the unambiguous language of Section 21 of the Act, every award of the Lok Adalat shall be deemed to be a decree of a civil court and as such it is executable by that Court. 

2. The Act does not make out any such distinction between the reference made by a civil court and criminal court. 

3. There is no restriction on the power of the Lok Adalat to pass an award based on the compromise arrived at between the parties in respect of cases referred to by various Courts (both civil and criminal), Tribunals, Family court, Rent Control Court, Consumer Redressal Forum, Motor Accidents Claims Tribunal and other Forums of similar nature. 

4. Even if a matter is referred by a criminal court under Section 138 of the Negotiable Instruments Act, 1881 and by virtue of the deeming provisions, the award passed by the Lok Adalat based on a compromise has to be treated as a decree capable of execution by a civil court.

Resignation of Directors and their Liability in Cheque Bounce Cases : The Law

P Sathasivam
Supreme Court of India

The Supreme Court in Anita Malhotra Vs. Apparel Export Promotion Council had the occasion to examine the liability of a director for issuance of a cheque by a Company, in the light of the fact that the said Director had resigned prior to the relevant date of issue. We have already covered a post on the Liability of Directors in Cheque Bounce Cases. The relevant extracts from the judgment are reproduced hereinbelow;

10. Mr. Akhil Sibal by taking us through the relevant provisions of the Companies Act, 1956, particularly, Sections 159, 163 and 610(3) contended that the Annual Return dated 30.09.1999 is a public document and the same is reliable and legally acceptable insofar as the contents of the same are concerned. The said Sections are reproduced hereunder: 

159. Annual return to be made by company having a share capital.— 

(1) Every company having a share capital shall within sixty days from the day on which each of the annual general meetings referred to in section 166 is held, prepare and file with the Registrar a return containing the particulars specified in Part I of Schedule V, as they stood on that day, regarding— 

(a) its registered office, (b) the register of its members, (c) the register of its debenture-holders,  (d) its shares and debentures, (e) its indebtedness, (f) its members and debenture-holders, past and present, and (g) its directors, managing directors, managers and secretaries, past and present: Provided that any of the five immediately preceding returns has given as at the date of the annual general meeting with reference to which it was submitted, the full particulars required as to past and present members and the shares held and transferred by them, the return in question may contain only such of the particulars as relate to persons ceasing to be or becoming members since that date and to shares transferred since that date or to changes as compared with that date in the number of shares held by a member. 

Xxx xxxx" 163. Place of keeping and inspection of, registers and returns.— 

(1) The register of members commencing from the date of the registration of the company, the index of members, the register and index of debenture-holders, and copies of all annual returns prepared under sections 159 and 160, together with the copies of certificates and documents required to be annexed thereto under sections 160 and 161, shall be kept at the registered office of the company: 

Xxx xxxx" 610. Inspection, production and evidence of documents kept by Registrar. Xxxx xxx Xxxx xxx 

(3) A copy of, or extract from, any document kept and registered at any of the officers for the registration of 1companies under this Act, certified to be a true copy under the hand of the Registrar (whose official position it shall not be necessary to prove), shall, in all legal proceedings, be admissible in evidence as of equal validity with the original document." 

11. A reading of the above provisions make it clear that there is a statutory requirement under Section 159 of the Companies Act that every Company having a share capital shall have to file with the Registrar of Companies an annual return which include details of the existing Directors. The provisions of the Companies Act require annual return to be made available by a company for inspection (S. 163) as well as Section 610 which entitles any person to inspect documents kept by the Registrar of Companies. The High Court committed an error in ignoring Section 74 of the Indian Evidence Act, 1872. Sub-section (1) of Section 74 refers to public documents and sub- section (2) provides that public documents include "public records kept in any State of private documents". A conjoint reading of Sections 159, 163 and 610(3) of the Companies Act, 1956 read with sub-section (2) of Section 74 of the Indian Evidence Act, 1872 make it clear that a certified copy of annual return is a public document and the contrary conclusion arrived at by the High Court cannot be sustained. Annual Return dated 30.09.1999 which provides the details about the existing Directors clearly show that the appellant was not a Director at the relevant time. Had the High Court considered the contents of the certified copy of the annual return dated 30.09.1999 filed by the Company which clearly shows that the appellant herein (A3) has not been shown as Director of the Company, it could have quashed the criminal proceedings insofar as A3 is concerned. 

12. In DCM Financial Services Limited vs. J.N. Sareen and Another, (2008) 8 SCC 1, this Court, while considering Sections 138 and 141 of the Act came to the following conclusion which is relevant for our purpose: 

"21. The cheque in question was admittedly a post-dated one. It was signed on 3-4-1995. It was presented only sometime in June 1998. In the meantime the first respondent had resigned from the directorship of the Company. The complaint petition was filed on or about 20-8- 1998. Intimation about his resignation was given to the complainant in writing by the first respondent on several occasions. The appellant was, therefore, aware thereof. Despite having the knowledge, the first respondent was impleaded as one of the accused in the complaint as a Director in charge of the affairs of the Company on the date of commission of the offence, which he was not. If he was proceeded against as a signatory to the cheques, it should have been disclosed before the learned Judge as also the High Court so as to enable him to apply his mind in that behalf. It was not done. Although, therefore, it may be that as an authorised signatory he will be deemed to be person in-charge, in the facts and circumstances of the case, we are of the opinion that the said contention should not be permitted to be raised for the first time before us. A person who had resigned with the knowledge of the complainant in 1996 could not be a person in charge of the Company in 1998 when the cheque was dishonoured. He had no say in the matter of seeing that the cheque is honoured. He could not ask the Company to pay the amount. He as a Director or otherwise could not have been made responsible for payment of the cheque on behalf of the Company or otherwise. [See also Saroj Kumar Poddar v. State (NCT of Delhi), Everest Advertising (P) Ltd. v. State, Govt. of NCT of Delhi and Raghu Lakshminarayanan v. Fine Tubes." 

13. In Harshendra Kumar D. vs. Rebatilata Koley and Others, (2011) 3 SCC 351, while considering the very same provisions coupled with the power of the High Court under Section 482 of the Code of Criminal Procedure, 1973 (in short `the Code') for quashing of the criminal proceedings, this Court held: 

"25. In our judgment, the above observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, materials relied upon by the accused which are in the nature of public documents or the materials which are beyond suspicion or doubt, in no circumstance, can be looked into by the High Court in exercise of its jurisdiction under Section 482 or for that matter in exercise of revisional jurisdiction under Section 397 of the Code. It is fairly settled now that while exercising inherent jurisdiction under Section 482 or revisional jurisdiction under Section 397 of the Code in a case where complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in an appropriate case, if on the face of the documents -- which are beyond suspicion or doubt -- placed by the accused, the accusations against him cannot stand, it would be travesty of justice if the accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage." 

As rightly stated so, though it is not proper for the High Court to consider the defence of the accused or conduct a roving enquiry in respect of merit of the accusation, but if on the face of the document which is beyond suspicion or doubt placed by the accused and if it is considered the accusation against her cannot stand, in such a matter, in order to prevent injustice or abuse of process, it is incumbent on the High Court to look into those document/documents which have a bearing on the matter even at the initial stage and grant relief to the person concerned by exercising jurisdiction under Section 482 of the Code. 

14. Inasmuch as the certified copy of the annual return dated 30.09.1999 is a public document, more particularly, in view of the provisions of the Companies Act, 1956 read with Section 74(2) of the Indian Evidence Act, 1872, we hold that the appellant has validly resigned from the Directorship of the Company even in the year 1998 and she cannot be held responsible for the dishonour of the cheques issued in the year 2004. 

15. This Court has repeatedly held that in case of a Director, complaint should specifically spell out how and in what manner the Director was in charge of or was responsible to the accused Company for conduct of its business and mere bald statement that he or she was in charge of and was responsible to the company for conduct of its business is not sufficient. [Vide National Small Industries Corporation Limited vs. Harmeet Singh Paintal and Another, (2010) 3 SCC 330]. In the case on hand, particularly, in para 4 of the complaint, except the mere bald and cursory statement with regard to the appellant, the complainant has not specified her role in the day to day affairs of the Company. We have verified the averments as regard to the same and we agree with the contention of Mr. Akhil Sibal that except reproduction of the statutory requirements the complainant has not specified or elaborated the role of the appellant in the day to day affairs of the Company. On this ground also, the appellant is entitled to succeed.

Related Post 

Liability of Director in Cheque Bounce Cases : The Law

Guest Post : 'A Fit Case for Review'

 Guest Post : 'A Fit  Case for Review' by R.Ramachandran

R. Ramachandran critically examines the latest Supreme Court judgment in Ganduri Koteshwaramma and Anr. v Chakiri Yanadi & Anr. by Justice R.M. Lodha. We have covered a post on the judgment which can be accessed here.

In Ganduri Koteshwaramma and Anr. Vs. Chakiri Yanadi & Anr. (in Civil  Appeal No. 8538 of 2011) decided by the Supreme Court on 12.10.2011,  it is not clear as to when was the Suit for partition instituted.  This information is very much necessary, especially in the context of partition of a Hindu coparcenery property.  

There are two possibilities – (1) the suit for partition might have been instituted prior to coming into force of the Hindu Succession (Andhra Pradesh) Amendment Act, 1986; or (2) instituted after the coming into force of the said Act.

Position if the partition suit had been instituted prior to 5.9.1985

If such a suit had been instituted prior to the coming into force of The Hindu Succession (Andhra Pradesh) Amendment Act, 1986 (Act 13 of 1986) which granted equal coparcenery rights to daughters with effect from 5.9.1985, then the daughters were not co-larceners by the relevant date and as such were not entitled for coparcenary share.  At best, they could have only been entitled for inheritance right in the share of the property that fell to their father.

Partition in the instant case was instituted only in the year 1991

I contacted the Advocate of one of the parties to the case and ascertained that the Suit for partition had been instituted in the year 1991.

The case relates to Andhra Pradesh, and the daughters taking birth in the family had been granted equal coparcenery rights as that of the sons, by Hindu Succession (Andhra Pradesh) Amendment Act, 1986, effective from 5.9.1985.  Since the suit for partition was instituted only in the year 1991, after coming into force of the AP Amendment Act, 1986, the decision of the Supreme Court, granting equal share to the daughters in the coparcenery property along with the sons in the family IS ABSOLUTELY CORRECT.

BUT THE REASONING GIVEN BY THE SUPREME COURT FOR ARRIVING AT THE SAID DECISION APPEARS TO BE WRONG FOR THE  REASONS:

According to classical Hindu Law, some of the circumstances in which partition can take place are: (i) partition effected by father; (ii) partition by Agreement; (iii) severance by unilateral declaration by one of the coparcener; (iv) partition by conduct by one of the coparcener; (vi) partition by institution of suit etc.

Classical law to prevail

According to Section 4 (a) of the HSA 1956, "any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of the HSA 1956 shall cease to have effect with respect to any matter for which provision is made in this Act" (emphasis supplied).

Prior to the HSA (Amendment) Act, 2005 w.e.f. 9.9.2005, there was no provision in the Hindu Succession Act, 1956 which provided for devolution of interest in coparcenery property – other than when ‘a male Hindu dies’.  (See Section 6).

Thus, in the absence of any provision in the HSA, 1956, the Classical Hindu Law will prevail.

Effect of filing of suit for partition:

The institution of a suit for partition by an adult coparcener is an unequivocal intimation of his intention to separate and there is consequently a severance of his joint status from the date when the suit is instituted. [Kawal Narain v. Prabhu Lal (1915) 44 IA 159; Rachhpali v. Chandresar AIR 1924 Oudh 252.]

The moment the partition is effected in any of the above methods, the de jure (in law) partition takes place.

The partition strictly speaking is complete the moment the community of interest is severed or severance in status takes place.  The actual physical division of the property by metes and bounds may, or may not follow and the members may continue to hold the property in joint possession as tenants-in-common, without the incidents of fluctuation of interest and application of the doctrine of survivorship.

The de facto partition – i.e. actual physical division of the property by metes and bounds may take place later on.

A suit demanding a partition, will effect a severance of the status from the date of its institution in a court of law, irrespective of whether he gets a decree from the court or not. [Ramalinga v. Narayana AIR 1922 PC 201.]

The following catena of decisions by the Supreme Court supports the above view.

Case title	Date of Decision	SC Coram	Decision
Kalyani (Dead) by Lrs. Vs. Respondent: Narayanan and Ors. [1980]2SCR1130	27.02.1980	A. N. Sen, D. A. Desai and V. D. Tulzapurkar, JJ.	10.  … Partition is a word of technical import in Hindu law. Partition in one sense is a severance of joint status and coparcener of a coparcenery is entitled to claim it as a matter of his individual volition. In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severally. Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenery with right of survivorship and such separated member holds from the time of disruption of joint family as tenant-in-common. Such partition has an impact on devolution of shares of such members. It goes to his heirs displacing survivorship. Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property (see Approviar v. Rama Subha Aiyar (1886) 11 M. I. A. 75 quoted with approval in Smt. Krishnabai Bhritar Ganpatrao Deshmukh v. Appasaheb Tuljaramarao Nimbalkar and Ors. [1980] 1 SCR 161 . A disruption of joint family status by a definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject-matter. This may at any time, be claimed by virtue of the separate right (see Girja Bai v. Sadashiv 41 I A 151. A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.
Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum and Ors. AIR 1978 SC 1239	27.04.1978	Y. V. Chandrachud, C.J., V. D. Tulzapurkar and P. N. Shingal, JJ.	“11. … Whether a partition had actually taken place between the plaintiff's husband and his sons is beside the point for the purposes of Explanation 1. That Explanation compels the assumption of a fiction that in fact "a partition of the property had taken place", the point of time of the partition being the one immediately before the death of the person in whose property the heirs claim a share. 12. The fiction created by Explanation 1 has to be given its due and full effect as the fiction created by Section 18A(9)(b) of the Indian Income-tax Act, 1922, was given by this Court in Commissioner of Income-tax, Delhi v. S. Teja Singh MANU/SC/0062/1958 . It was held in that case that the fiction that the failure to send an estimate of tax on income Under Section 18A(3) is to be deemed to be a failure to send a return, necessarily involves the fiction that a notice had been issued to the assessee Under Section 22 and that he had failed to comply with it. In an important aspect, the case before us is stronger in the matter of working out the fiction because in Teja Singh's case, a missing step had to be supplied which was not provided for by Section 18A(9)(b), namely, the issuance of a notice Under Section 22 and the failure to comply with that notice. Section 18A(9)(b) stopped at creating the fiction that when a person fails to send an estimate of tax on his income Under Section 18A(3) he shall be deemed to have failed to furnish a return of his income. The section did not provide further that in the circumstances therein stated, a notice Under Section 22 shall be deemed to have been issued and the notice shall be deemed not to have been complied with. These latter assumptions in regard to the issuance of the notice Under Section 22 and its non-compliance had to be made for the purpose of giving due and full effect to the fiction created by Section 18A(9)(b). In our case it is not necessary, for the purposes of working out the fiction, to assume and supply a missing link which is really what was meant by Lord Asquith in his famous passage in East End Dwellings Co. Ltd. v. Finsbury Borough Council. [1952] A.C. 109/132. He said if you are bidden to treat an imaginary state of affairs as real, you must also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it; and if the statute says that you must imagine a certain state of affairs, it cannot be interpreted to mean that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. 13. In order to ascertain the share of heirs in the property of a deceased coparcener it is necessary in the very nature of things, and as the very first step, to ascertain the share of the deceased in the coparcenery property. For, by doing that alone can one determine the extent of the claimant's share. Explanation 1 to Section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of   a Hindu Mita-kshara coparcener "shall be deemed to be" the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is therefore required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenery property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. All the consequences which flow from a   real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the life time of the deceased. The allotment of this share is not a processual step devised merely for the purpose of working out some other conclusion. It has to be treated and accepted as a concrete reality, something that cannot be recalled just as a share allotted to a coparcener in an actual partition cannot generally be recalled. The inevitable corollary of this position is that the heir will get his or her share in the interest which the deceased had in the coparcenery property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition.
Anar Devi & Ors. V. Parmeshwari Devi & Ors. AIR 2006 SC 3332	18.9.2009	B.N.Agrawal and P.P.Naolekar JJ.	Follows the above decision.
Munni Lal Mahto   and Ors. Vs. Chandeshwar Mahto and Anr. AIR 2007 Pat. 66	24.07.2006	Navaniti Prasad Singh, J of Patna High Court	Relied upon the decisions of Supreme Court in: Kalyani v. Narayan and Ors. AIR 1980 Supreme Court 1173;  wherein it has been inter-alia held that “holds that once there is a partition then there is a disruption in the joint family status and the rights are crystalised although not immediately followed by a de facto actual division of the subject matter of dispute. This decision clearly shows that the effectuate partition, it is not necessary that all joint family properties must be divided by metes and bounds and till that is not done, the joint family would continue. This judgment clearly lays down otherwise. The fact is that the moment the preliminary decree was passed, the joint family status stood disrupted and the parties became tenants in common.” M.L. Subbaraya Setty and Ors. v. ML Nagappa Setty and Ors. AIR 2002 Supreme Court 2066 holding that “severance of joint family status takes place no sooner preliminary decree is filed even though properties are not physically partitioned. Members of the joint family becomes tenants in common of the family property from the said day.”

The Supreme Court in the instant case of Ganduri Koteshwaramma has mainly dealt with the following two aspects to arrive its conclusion in the matter:

(1) Meaning of the term “partition”  

(2) Preliminary decree can be altered

The meaning of the term ‘Partition’:

In the instant case, the Supreme Court also heavily relied upon the Explanation under Section  6(5) in regard to the meaning of the term “Partition”.  According to the said provision, “partition” means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court.

It is worth noting that this explanation has been introduced only in the HSA (Amendment) 2005 Act.  Therefore, the same could not be made applicable to the position obtaining prior to the coming into force of the Amendment Act.

This is for the reason that the Amendment Act, 2005 itself very specifically says that the said amendment is effective “on and from the commencement of the Hindu Succession (Amendment) Act, 2005.”

Thus, the SC could not have invoked the explanation under Section 6(5) of the Amended HSA, 1956 to give meaning to the word “partition”.

Even otherwise, the explanation under Section 6(3) of the amended Act is in pari material with the explanation 1 under un-amended Section 6 of the HSA, 1956.

The Supreme Court (three judge bench) has already ruled that once a fiction of ‘partition’ has been created it has to be given its logical end.  See Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum and Ors. AIR 1978 SC 1239.

Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property (see Approviar v. Rama Subha Aiyar (1886) 11 M. I. A. 75 quoted with approval in Smt. Krishnabai Bhritar Ganpatrao Deshmukh v. Appasaheb Tuljaramarao Nimbalkar and Ors. [1980] 1 SCR 161 .

A disruption of joint family status by a definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject-matter. This may at any time, be claimed by virtue of the separate right (see Girja Bai v. Sadashiv 41 IA 151.

A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.

In view of the above categorical decisions by the SC decisions, the latest decision does not appear to be correct.  Further, in case of conflict, the decision of the higher bench (3 judge bench) would prevail than the decision of the division bench.

Modification of preliminary decree

The decision in Phoolchand and Anr. Vs. Gopal Lal (AIR 1967 SC 1470) quoted by the SC to support the view that  “If in the interregnum i.e. after passing of the preliminary decree and before the final decree is passed, the events and supervening circumstances occur necessitating change in shares, there is no impediment for the court to amend the preliminary decree or pass another preliminary decree re-determining the rights and interests of the parties having regard to the changed situation” is totally misplaced and misapplied.  The changed circumstances does not talk about changed circumstances in law; but the changed circumstances in facts of the case.

NO NEED for invoking the provisions of Hindu Succession (Amendment) Act, 2005

Since the Suit for partition was instituted in the year 1991, even according to the Hindu Succession (Andhra Pradesh) Amendment Act, 1986, the daughters have become equal co-larceners in the coparcenary property.

Therefore, there was no need for the Supreme Court to have invoked the provisions of the 2005 Amendment Act at all.

A FIT CASE FOR ‘REVIEW’

The latest decision by the SC, which according to my understanding is not well founded on legal reasoning, is bound to upset the well settled legal positions and would cause immense confusion and doubts as regards the rights and entitlements in regard to the partition of the Coparcenery property is concerned.  Since the instant decision appears to have overlooked a plethora of earlier decisions and has not addressed several legal issues in a cogent and logical manner, and the reasoning for the decision is ill-founded, it is a fit case for seeking Review.  Review is also a must in order to protect the interests of scores of persons whose suit for partition might be pending adjudication throughout the country.

Related Post :

Devolution of Coparcenary Property to Hindu Females : The Law