Chairman and Managing Director, A. P. State Financial Corporation, Hyderabad v. Chairman and M. D. , Southern Transformers and Electrical Ltd. , Renigunta, Chittoor Dist.
2000-02-22
P.VENKATRAMA REDDY, V.ESWARAIAH
body2000
DigiLaw.ai
P. VENKATARAMA REDDI, J. ( 1 ) THESE appeals are filed by A. P. State financial Corporation against the order of the learned single Judge in directing the appellant-Corporation to deposit with the official Liquidator a sum of Rs. 10,000. 00 in R. C. C. No. 7 of 1999 and a sum of rs. 5,000/- in R. C. C. No. 3 of 1999 towards the preliminary expenses. The appellant is also aggrieved by the direction to advertise the factum of passing winding up order and to file proof of publication. ( 2 ) THE first respondent-Company was directed to be wound up by the learned company Judge on a reference made by bifr under Section 20 (1) of the Sick industrial Companies (Special Provisions) act. The appellant is a statutory corporation which advanced loans to the companies concerned on obtaining securities including the assets of the company. Thus, the appellant is in the position of a secured creditor. The appellant is endowed with the power of takeover and sale of assets to realize its outstanding dues under the provisions of the State Financial corporations Act. It can opt to remain outside the winding up proceedings and enforce the securities on its own, subject to the leave of the Court. It is to be mentioned at the outset that it is not at the instance of the appellant-Corporation that the BIFR referred the cases for passing the order of winding up the Companies. The appellant did not figure in the proceedings before this court. In the proceedings before this Court, the appellant did not make any request for winding up. It neither support nor opposed the winding up proceedings. However, at the time of passing the order of winding up, this Court directed the appellant -Corporation to cause the publication of the order and to deposit the said amount for the reason that it is the principal secured creditor. In R. C. C. No. 3 of 1998, the learned judge clarified that the official Liquidator has to reimburse this amount to the corporation out of the assets in priority to the other debts of the Company. The legality of the said directions given by the learned Company Judge is in question in these appeals.
In R. C. C. No. 3 of 1998, the learned judge clarified that the official Liquidator has to reimburse this amount to the corporation out of the assets in priority to the other debts of the Company. The legality of the said directions given by the learned Company Judge is in question in these appeals. ( 3 ) IT is the contention of the appellant that the appellant is under no obligation to advertise the order under Rule 113 of companies (Court) Rules nor advance any amount towards the initial expenses, more so, when the appellant did not apply for or request winding up. It is submitted that either the Official Liquidator has to draw funds from the Central Government to meet the initial expenses or the BIFR has to make the deposit to put into effect the order of winding up. It is also made clear that if the official Liquidator incurs any expenditure for safeguarding the assets of the Company on taking charge of the same pursuant to the winding up order, the appellant has no objection to advance or reimburse the amount to that extent if proper account is furnished. It is also pointed out that the appellant is already taking care of the security (assets) in its own interest after takeover of the Unit and there is very little role for the Official Liquidator to play. ( 4 ) THE crux of the objection is as to the deposit of the so-called preliminary expenses with the Official Liquidator and to meet advertisement expenses to put into effect the winding up order. Reliance has been placed by the learned single Judge on the proviso to Rule 292. In BIFR vs. Chairman and MD, Adivasi Paper Mills Ltd. , another learned single Judge relied on the proviso to Section 529 and Section 529-A and the decisions bearing on the interpretation of the said provisions and directed the State Financial Corporation and other secured creditors to pay their contributions towards the expenses to be incurred by the Official Liquidator in connection with the winding up order passed by the Court including advertisement expenses. For taking that view, reliance was placed on the earlier decisions of this Court in APSFC vs. Electro thermics (P) Ltd. , and APSFC vs. Official liquidator. The correctness of this view is being questioned in these appeals.
For taking that view, reliance was placed on the earlier decisions of this Court in APSFC vs. Electro thermics (P) Ltd. , and APSFC vs. Official liquidator. The correctness of this view is being questioned in these appeals. ( 5 ) WE may mention that this problem as to defraying of initial expenses soon after the winding up order is passed is peculiar to the references made by BIFR under section 20 of the Sick Industrial Companies (Special Provisions) Act. In other cases, while passing the winding up order, the court can direct the petitioners who are mostly creditors to advertise and advance the amount to meet initial expenses of official Liquidator. However, that is not the position in the case of winding up at the instance of BIFR unless of course a creditor intervenes and supports the reference. ( 6 ) AS already stated, the learned single judge relied on the proviso to Rule 292 in his order dated 24-2-1999 in R. C. C. No. 3 of 1998. But, the proviso only provides for reimbursing the amount advanced to the official Liquidator by the petitioner or a creditor or a contributory out of the assets of the Company on preferential basis. It does not cast a positive obligation on the part of the contributory to advance certain money towards preliminary expenses to the official Liquidator. Even by necessary implication, it cannot be said that a duty is cast on a secured creditor like the petitioner who did not even make a request for winding up the Company to advertise and advance the preliminary expenses. The possibility of subsequent reimbursement cannot be a ground to direct that the advance should initially be made by one of the secured creditors. In fact, Rule 292 of companies (Courts) Rules makes a provision for incurring expenditure in connection with winding up with the leave of Court from out of permanent advance or other fund provided by Central government. In the counter-affidavit filed by the Official Liquidator, it is explained that the Official Liquidator has to get sanction from the Regional Director, department of Company Affairs, for each case if any expenses have to be met in order to implement the winding up order.
In the counter-affidavit filed by the Official Liquidator, it is explained that the Official Liquidator has to get sanction from the Regional Director, department of Company Affairs, for each case if any expenses have to be met in order to implement the winding up order. Of course, if such preliminary expenses have a direct bearing for safeguarding the security which would otherwise be in peril, the official Liquidator can require the secured creditor under the proviso to Section 529 to meet such expenses. Alternatively, when the secured creditor seeks leave of the Court to remain outside the winding up proceedings and realize the security on his own, the Court can pass appropriate orders as regards the amount necessary to meet the costs incurred or likely to be incurred by the official Liquidator in connection with preservation of security. But, such direction cannot be given even at the threshold of winding up, when the winding up is yet to be put into effect. ( 7 ) SECTIONS 529 and 529 (A) relied on by the learned single Judge in BIFR vs. Chairman and M. D. Adivasi Paper Mills Ltd. , (supra) are in our view, not relevant and they do not touch the issue of contributing funds for the purpose of defraying the preliminary expenses or the advertisement of the order. After referring to the case of a. P. State Financial Corporation vs. Official liquidator (supra) decided by a Division bench of this Court, the learned single judge concluded as follows:"having regard to this principle enunciated by the Division Bench of this Court, it follows that the company Court may direct the other secured creditors whether it is a financial Corporation or any other creditor to contribute his share, of expenses in the expenses incurred by the Official Liquidator in preserving and maintaining the security. Such preservation and maintenance of security so far as he is concerned, it is for the benefit of the workmen, who are pari passu secured creditors, having equal rights with other co-creditors, since "pari passu" itself means "with equal step equally without preference" as per Jowitt s Dictionary of Law.
Such preservation and maintenance of security so far as he is concerned, it is for the benefit of the workmen, who are pari passu secured creditors, having equal rights with other co-creditors, since "pari passu" itself means "with equal step equally without preference" as per Jowitt s Dictionary of Law. The official Liquidator may have to incur other incidental expenses like paper publication, communicating orders to the other persons affected by the winding up proceedings and all such expenses are ultimately meant to preserve and maintain the security for the benefit of workmen, who are pari passu secured creditors. Therefore, the official Liquidator is entitled to contribution from other co-secured creditors, the expenses incurred by him proportionately. " ( 8 ) THE principle laid down by the division Bench that the secured Creditor is liable to bear the expenses for the preservation and maintenance of security, has been further extended by the learned single Judge to cover the initial expenses like paper publication etc. , because according to the learned single Judge, such expenses are ultimately meant to preserve the security for the benefit of workmen. Such interpretation, in our view, is not warranted either on the plain language of proviso to Section 529 (2 ). The expenses for "preservation of the security" occurring in the proviso to Section 529 (2) does not comprehend advertisement expenses required to be incurred under Rule 113 of companies (Court) Rules. The obligation to advertise the winding up order is cast on the petitioner under Rule 113. Pursuant to the direction given by the Court to advertise the winding up order, it becomes incumbent on the petitioner to have it published in the newspapers, as required by Rule 113. ( 9 ) THE appellant herein who is a secured creditor and who was in no way responsible for the order of reference under section 20 of Sick Industrial Companies (Special Provisions) Act and who did not come forward to support the winding up, cannot be construed to be a petitioner, nor can the appellant be subjected to a legal obligation to deposit the advertisement costs and initial expenses of the Official liquidator merely because it is a secured creditor. If at all it is BIFR which has referred the case to the High Court, that will broadly answer the description of the petitioner under Rule 113.
If at all it is BIFR which has referred the case to the High Court, that will broadly answer the description of the petitioner under Rule 113. It would be wholly inappropriate to require a third party creditor who would like to remain outside the winding up proceedings to advertise the order in the newspapers. ( 10 ) AS regards the deposit of the amount with the Official Liquidator to meet the preliminary expenses , we find no support from Section 529 read with Section 529-A. A reading of the proviso makes it clear that the liability of the secured creditor to pay the expenses incurred by the Liquidator for the preservation of the security arises at a stage when the secured creditor wants to realize the security on his own. Even before the winding up order is published and put into effect, there is no scope to invoke the proviso to oblige the secured creditor who wants to remain out-side the winding up proceedings to advance a sum for preliminary expenses. Such order is not contemplated by the proviso to Sec. 529 (2) or by Rule 292. We are therefore of the considered view that the decision in Adivasi paper Mills case (supra) and also the impugned order of the learned single Judge insofar as directing the payment of ad hoc sum towards preliminary expenses by a secured creditor consequent on the winding up order passed at the instance of BIFR, are not correctly decided and we hereby overrule the said decisions. At the same time, we make it clear that the appellant is bound to reimburse the Official Liquidator for the expenses incurred by him in connection with or for the purpose of maintenance and preservation of security. Such amount should be paid without avoidable delay after receiving a statement of expenditure from the Official Liquidator. The Official Liquidator can also require the secured creditor to pay in advance regarding the expenditure which he is called upon to incur for this purpose provided sufficient details are notified to the appellant-Corporation. If there is any dispute in regard to the quantum of expenses or the justification thereof, either the Official Liquidator or the secured creditor can move the Court. ( 11 ) IT is unfortunate that BIFR has not put in its appearance despite service of notice.
If there is any dispute in regard to the quantum of expenses or the justification thereof, either the Official Liquidator or the secured creditor can move the Court. ( 11 ) IT is unfortunate that BIFR has not put in its appearance despite service of notice. In our view, BIFR which for all practical purposes is in the position of a petitioner as far as Section 20 of Sick industrial Companies (Special Provisions) act and Rule 113 of Companies (Court) rules are concerned, is bound to advertise the order of winding up. Therefore, whenever an order of winding up is passed on a reference made by BIFR, it is proper and expedient for, the Court to give directions under Rule 112 read with section 113 of the Companies (Court) Rules to BIFR to advertise the order of winding up within the stipulated time. For this purpose, BIFR may collect certain amount in advance from the applicant. As regards the preliminary expenses, we have already clarified the position that the Company court ought not to pass any order for deposit of ad hoc amount with the Official liquidator even at the threshold of winding up order. The stage at which and the purpose for which the Official Liquidator can demand that amount from the secured creditor like the appellant and the corresponding obligation of the Official liquidator in that regard has already been indicated by us supra. However, in the present cases, the appellants have already remitted the amounts to the Official liquidator as per the order of the Court. We are also informed that the advertisement has already been made. Hence, the question of giving directions to BIFR regarding advertisement or suspending the order in regard to deposit of specified sum does not arise at this stage though the directions of the learned single Judge are not legally sustainable. But, we lay down the legal position for future guidance. We further direct that the Official Liquidator should furnish the appellants from time to time the account for the expenditure incurred or the expenditure likely to be incurred within a reasonable point of time for the purpose of safeguarding the security and also refund the excess amount wherever necessary. ( 12 ) THE appeals are disposed of with the above clarifications and observations. No costs.
( 12 ) THE appeals are disposed of with the above clarifications and observations. No costs. ( 55 ) THE main attack by the learned senior Counsel appearing for the petitioners is that the decision taken by the respondents is wholly arbitrary, and therefore, violative of Articles 14 and 21 of the Constitution of india. It is axiomatic that any arbitrary decision would violate equality clause in article 14, and therefore, by a necessary corollary, offends Article 14 of the constitution of India. In substantiation of this submission, the learned senior Counsel disputes the provision made by the District advisory Board as well as the Somasila irrigation Committee for meeting the various demands. The consideration of Point-B, therefore, involves superficial examination of facts to see whether there is any arbitrariness as submitted by the learned senior Counsel. The second aspect is the test to be applied by this Court when the facts presented by the petitioners and the respondents diabolically contradict each other. Which of the evidence in support of the facts presented, should be accepted by the Court while testing the decision on the touchstone of equality clause in Article 14 of the Constitution of India has to be considered. Before dealing with this aspect it is apposite to briefly examine the legal concept of arbitrariness. ( 56 ) THE three grounds on which judicial review is sought are illegality, irrationality and procedural impropriety. Arbitrariness as a ground of attack in an application for judicial review is basically a species of the broader ground of 'irrationality', which is now well accepted as Wednesbury unreasonableness'. This is no more res integra as we presently examine. A decision not governed by rules is arbitrary, despotic and capricious. If something is done without reason, it is capricious. This lexicographic definition of arbitrariness may not furnish a comprehensive meaning of arbitrariness as used in the field of constitutional Law and Administrative Law. The expression "arbitrary, arbitrariness and arbitrary and capricious" are defined in words and Phrases, Permanent Edition vol. 3a West Publishing Company (1995-96 replacement Edition), in an elaborate manner.
This lexicographic definition of arbitrariness may not furnish a comprehensive meaning of arbitrariness as used in the field of constitutional Law and Administrative Law. The expression "arbitrary, arbitrariness and arbitrary and capricious" are defined in words and Phrases, Permanent Edition vol. 3a West Publishing Company (1995-96 replacement Edition), in an elaborate manner. Some of the relevant definitions are as under: the words "arbitrary" and "capricious" when used in a legal sense in determining that decision of administrative agency was arbitrary and capricious are to be distinguished from the same words used in a popular sense where they have an opprobrious connotation; the Court uses them in a legal sense to indicate that the findings are without rational basis or that the evidence to support the findings is non-existent or without probative value in either direction. "arbitrary" means in an "arbitrary" manner, as fixed or done capriciously or at pleasure, without adequate determining principle, not founded in nature of things, non-rational, not done or acting according to reason or judgment depending upon will alone, absolutely in power, capriciously, tyrannical, despotic and without fair, solid and substantial cause; that is, without cause based upon the law or not governed by any fixed rules or standard. "arbitrary and capricious" act is willful and unreasonable action, without consideration and in disregard of facts or circumstances and it is one lacking a standard or norm; words "arbitrary" and "capricious" are used synonymously and are frequently combined into a single term "arbitrary and capricious". "arbitrary and capricious" action on part of administrative agency is willful and unreasoning action, without consideration and in disregard of facts or circumstances and when there is room for two opinions, action is not arbitrary or capricious when exercised honestly and upon due consideration even though it may be believed that an erroneous conclusion has been reached. ( 57 ) INDEED, there are a very few authorities which attempted to define arbitrariness for the purpose of Administrative law. For our purpose we may refer to three judgments of the Supreme Court which in our respectful opinion, deal with the concept of arbitrariness. In S. G. Jaisinghani v. Union of India, AIR 1967 SC 1427 , the supreme Court indicated the test of arbitrariness as follows: in a system governed by rule of law, discretion, must be confined within clearly defined limits.
In S. G. Jaisinghani v. Union of India, AIR 1967 SC 1427 , the supreme Court indicated the test of arbitrariness as follows: in a system governed by rule of law, discretion, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rule and in general, such decisions should be predictable and the citizen should know where he is. If a decision taken without any principle or without any rule it is unpredictable and such decision is the antithesis of a decision taken in accordance with rule of law. ( 58 ) IN Shrilekha Vidyarthi case (supra), the Supreme Court held that nonarbitrariness is fair play in action, and that in case of arbitrariness the defect of irrationality is obvious and an act unfounded by reason is arbitrary, and dealing with the meaning of arbitrariness the Court laid down as follows: 'the meaning and true import of arbitrariness is more easily visualised than precisely stated or defined. The question, whether an impugned act is arbitrary or not is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable may itself attract the vice of arbitrariness. Every state action must be informed by reason and it follows that an act uninformed by reason is arbitrary. (emphasis added) ( 59 ) IN Mahesh Chandra v. Regional manager, AIR 1993 SC 935 , U. P. Financial corporation, the Supreme Court, in the context of interpreting Section 29 of the state Financial Corporations Act, 1951, held that every arbitrary decision is unreasonable. It is useful to excerpt the following passage from the said decision:"the public functionaries should be duty conscious rather than power charged. Its actions and decisions which touch the common man have to be tested on the touchstone of fairness and justice. That which is not fair and just is unreasonable. And what is unreasonable is arbitrary.
It is useful to excerpt the following passage from the said decision:"the public functionaries should be duty conscious rather than power charged. Its actions and decisions which touch the common man have to be tested on the touchstone of fairness and justice. That which is not fair and just is unreasonable. And what is unreasonable is arbitrary. An arbitrary action is ultra vires. It does not become bona fide and in good faith merely because no personal gain or benefit to the person exercising discretion should be established. An action is mala fide if it is contrary to the purpose of which it was authorised to be exercised. Dishonesty in discharge of duty vitiates the action without anything more. An action is bad without proof, of motive of dishonesty, if the authority is found to have acted contrary to reason. " (emphasis added) ( 60 ) THEREFORE, it may be taken as well settled that arbitrariness as a ground of judicial review is primarily concerned with the 'rationality and reasonableness' of the decision. Whether a decision is arbitrary or not has to be answered on the facts and circumstances of a case. A decision without any discernible principle which fails to satisfy the test of reasonableness by logic is unreasonable and every unreasonable decision taken on the whims and fancies of the authorities, is arbitrary. ( 61 ) AS held by the Supreme Court whether a decision is arbitrary or not has to be decided on the facts and circumstances of a case. In this case, the learned senior counsel appearing for the petitioners submits that there is water in the Somasila reservoir to an extent of 14. 00 TMC, and therefore, having regard to the failure of khariff crop, the decision not to release water on the ground that the dead storage has to be maintained at 7. 5 TMC level, and that provision has to be made for meeting various demands, is arbitrary and unreasonable. We may now examine this question. ( 62 ) BEFORE examining this question, we may have to advert to the legal position as to the extent of Court's intervention when the parties are at loggerheads as to the existence of facts as well as the inferences to be drawn.
We may now examine this question. ( 62 ) BEFORE examining this question, we may have to advert to the legal position as to the extent of Court's intervention when the parties are at loggerheads as to the existence of facts as well as the inferences to be drawn. On one hand Sri Ramachandra Rao learned senior Counsel for the petitioners disputed the various statistics presented before us by the learned Additional Advocate-General, and on the other hand, alternatively submitted that even if the statistics presented by the learned Additional Advocate-General are treated to be correct still the decision not to release water for the Rabi second crop is arbitrary. ( 63 ) WHILE dealing with the legal position of justiciability under Point-A, we have indicated that the question of justiciability, and the question of finding of fact are two broad limitations among others, while the Court exercises the power of judicial review. We have already dealt with the question of justiciability. One of the important limitations while exercising the power of judicial review is the question of finding of facts, recorded by the competent authority. It is too well settled that when the duty of finding the facts in an 'administrative exercise' leading to a decision, the authority/administrator, entrusted with collection, collation and interpretation of facts should be given due respect and such finding should be treated as final. If the finding of facts are perverse, or if the administrator ignores the 'relevancy' and decides on irrelevancy, such a decision is treated as a grave error, which can be corrected in judicial review. ( 64 ) BERNARD Schwartz in his 'administrative Law' (supra), after referring to various decisions rendered by the State supreme Court in US, deduces the following legal position: 'where a question of law is at issue, the court determines the lightness of the agency answer on its own independent judgment. If the agency answer does not square with that which the Court considers the right one, its finding of law should not be upheld. Where a question of fact is at issue, the Court does not weigh the quality or quantity of the evidence for sufficiency; the Court determines only the reasonableness of the agency answer.
If the agency answer does not square with that which the Court considers the right one, its finding of law should not be upheld. Where a question of fact is at issue, the Court does not weigh the quality or quantity of the evidence for sufficiency; the Court determines only the reasonableness of the agency answer. If the agency answer is reasonable, even though it is not ideal or even perhaps, correct' i. e. not necessarily the one that the Court would have given had it sat as the trier of fact - the agency finding of fact should be upheld. ' ( 65 ) IN Evan's case (supra), Lord hailsham of St. Marylebone Lord chancellor, in his concurring speech emphasised the law as under:. . . . . The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority, after according fair treatment reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court. " ( 66 ) IN Puhlhofer v. Hillingdon London borough Council, (1986) AC 484 (see the speech of Lord Brightmari), the House of lords held as under :"although the action or inaction of a local authority is clearly susceptible to judicial review where they have misconstrued the Act, or abused their powers or otherwise acted perversely, i think that great restraint should be exercised in giving leave to proceed by judicial review. . . . . . The ground upon which the Courts will review the exercise of an administrative discretion is abuse of power - e. g. , bad faith, a mistake in construing the limits of the power, a procedural irregularity, or unreasonableness in the Wednesbury sense - unreasonableness verging on an absurdity. Where the existence or non existence of fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the Court to leave the decision of that fact to the public body to whom parliament has entrusted the decision- making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely.
(emphasis added) ( 67 ) IN Regina v. Panel on Take-overs and Mergers, Exparte Datafin PLC, (1987) qb 815, Sir John Donaldson, the Hon'ble master of Rolls of the Court of Appeal, reiterated the scope of judicial review as under:"there was some failure on the part of the applicants to appreciate, or atleast to 2000 (3) FR-F-47 act in recognition of the fact that an application for judicial review is not an appeal. The panel and not the Court is the body charged with the duty of evaluating the evidence and finding the facts. The role of the Court is wholly different. It is, in an appropriate case, to review the decision of the panel and to consider whether there has been 'illegality'. I. e. , whether the panel has misdirected itself in law; 'irrationality. I. e. , whether the panel's decision is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it; or 'procedural impropriety', i. e. , a departure by the panel from any procedural rules governing its conduct or a failure to observe the basic rules of natural justice, which is probably better described as 'fundamental unfairness', since justice in nature is conspicuous by its absence. " (emphasis added) ( 68 ) IN Universal Camera Corporation v. National Labour Relations Board, (1950) 340 US 474 = 95 Law Ed 456, Mr. Justice frankfurter while observing that the reviewing Courts must be influenced by a feeling that they are not to abdicate judicial function, held as follows :"our power to review the correctness of application of the present standard ought seldom to be called into action. Whether on the record as a whole there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals. This Court will intervene only in what ought to be the rare instance when the standard appears to have been misapprehended or grossly misapplied. " (emphasis added) ( 69 ) MR.
This Court will intervene only in what ought to be the rare instance when the standard appears to have been misapprehended or grossly misapplied. " (emphasis added) ( 69 ) MR. Justice Frankfurter in the same decision also held that 'if the record placed before the Court leads to a conclusion that the decision of the fact finding body is not based on substantial evidence, the court of judicial review can even record a finding different from the one recorded by the fact finding body. This power is not pressed into service as a matter of course, and it is only used sparingly and in rare cases'. ( 70 ) IN India, the position is the same. It is well settled that when taking a decision an administrator, depends on evaluation of facts, and applies the law to the facts. The decision-maker's choice and the finding recorded by such authority shall be treated as final unless it is grossly perverse and irrational. Further, the Courts in India have held that after appreciation of the facts, if there is a second view possible as per the Courts consideration, still the courts cannot interfere with the decision on the ground that the conclusion reached by the decision-maker is not correct 'in the eyes of the Court. Even if there are two views possible, the decision-maker's finding on facts is treated as conclusive. If authority be required for these propositions which are so well established, we may refer to the dicta laid down by a Constitution bench of the Supreme Court in Syed Yakub v. Radhakrishnan, AIR 1964 SC 477 , which is as follows :"there is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as a result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however, grave it may appear to be.
An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however, grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned findings. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal and the said points cannot be agitated before a writ Court. . . . . . . . " (emphasis added) ( 71 ) THE decisions of the Hon'ble supreme Court in State of Maharashtra v. Madhukar Narayan Mardikar, AIR 1991 sc 207 , Union of India v. Upendar Singh, (1994) 3 SCC 357 and Chaturvedi v. Union of India, AIR 1996 SC 484 , also lay down that ordinarily reappreciation of evidence is not within the scope of judicial review, unless the decision is perverse. ( 72 ) KEEPING in view the principles discussed thus far, we may now examine the submissions made by the learned senior Counsel appearing on behalf of the petitioners. For this purpose, we may take the statistics submitted by the Committee of engineers to this Court on 26-4-2000, which gives the water level as well as the requirements for the demands as on 24-4-2000.
For this purpose, we may take the statistics submitted by the Committee of engineers to this Court on 26-4-2000, which gives the water level as well as the requirements for the demands as on 24-4-2000. The report gives reasons for excess utilisation of water in Pennar Delta for Rabi second crop and says that the ayacut for irrigation dry crops under various canals Kavali Canal, North Feeder channel and South Feeder Channel - has not been developed completely, and therefore, water was released from somasila Reservoir to Rabi second crop for more acreage than contemplated 19,000 acres. As the distribution system under the canals was not in existence, no water was being supplied for Rabi crop to the wet ayacut under the canals, and the entire water was diverted and supplied to Pennar Delta in excess of 19,000 acres. This explains as to why in yester years, the respondent supplied water in excess of 19,000 acres for Rabi second crop. There is, therefore, no substance in the contention of the learned senior Counsel appearing for the petitioners that when water was released in the past in excess of 19,000 acres, the same quantity of water should also be released for Rabi second crop. ( 73 ) ANOTHER aspect of the matter is that the report submitted to this Court also says that under the Inter-State Agreement, 5. 00 TMC of water each have to be supplied by the States of Maharashtra, Karnataka and Andhra Pradesh to Chennai city from out of the Krishna waters. This water is required to be supplied from Srisailam reservoir to Chennai through 'somasila reservoir', the 'somasila - Kandaleru Flood flow Canal', the 'kandaleru Reservoir' and the 'kp Canal'. The water to be supplied to chennai city through Somasila Reservoir is water from Krishna river and not from pennar river. The Pennar river water is being utilised only to meet the irrigation and drinking water requirements of all the ayacutdars under the Somasila Project and for the people living in Nellore, Kavali towns and other adjoining villages. As per the report the water available in the somasila reservoir for the Rabi second crop of 1999 (April to August, 1999) is 11. 03 TMC. The water available in the tanks is 3. 50 TMC. The water in the Reservoir and canals (11. 03 + 3. 50 = 14. 53 TMC), was sufficient to irrigate 1,23,505 acres.
As per the report the water available in the somasila reservoir for the Rabi second crop of 1999 (April to August, 1999) is 11. 03 TMC. The water available in the tanks is 3. 50 TMC. The water in the Reservoir and canals (11. 03 + 3. 50 = 14. 53 TMC), was sufficient to irrigate 1,23,505 acres. However, the ryots transplanted 1,58,305 acres, which resulted in depletion of water level in the somasila Reservoir below MDDL to an extent of 2. 00 TMC, and therefore, the dead storage of 5. 502 TMC was maintained. The details of the water available in the Somasila reservoir and the demands for the water under various categories as on 24-4-2000 is as under: ( 74 ) THE submission made by the learned senior Counsel appearing for the petitioners is that as on 29-3-2000, the water levels, allegedly ascertained personally by the petitioners from the Engineers Body (filed at Page 147 of the paper book) is 17. 70 TMC, including 11. 698 TMC of water in Somasila Reservoir, and 6. 05 TMC of water in various reservoirs, (At page 148 of the paper book, petitioners filed statement showing "water position as on 2-4-2000 at 12. 00 noon". According to this water available in Reservoir and tanks is allegedly 15. 685 TMC (10. 835 + 4. 85 TMC) ). Therefore, the learned senior Counsel appearing for the petitioners submits that the statistics furnished by the Committee of Engineers are not correct. We must record that the learned senior Counsel knowing the limitations well, only made a feeble attempt on this pgint. His further submission; an alternative submission, is that if the MDDL is reduced below 7. 50 or 7. 5 TMC, and water is made available for the demands in a reasonable manner, still the respondents can supply about 5. 00 to 6. 00 TMC of water for Rabi second crop. He submits that provision of 2. 5 TMC water for seedbeds is not warranted, that provision of 3. 00 TMC of water for drinking water is in excess of requirements, and that provision of 1. 60 TMC towards evaporation losses is unscientific. We shall examine these submissions one by one. ( 75 ) THE submission that 7. 5 TMC storage at MDDL is not required, is not adjudicable and justiciable issue.
00 TMC of water for drinking water is in excess of requirements, and that provision of 1. 60 TMC towards evaporation losses is unscientific. We shall examine these submissions one by one. ( 75 ) THE submission that 7. 5 TMC storage at MDDL is not required, is not adjudicable and justiciable issue. However, we may passingly notice that in Para 16 of the counter-affidavit, filed by respondents 2 to 5, the reason compelling the maintenance of dead storage at MDDL of 7. 5 TMC is given as under:"in any event as against the storage in the Reservoir of 12. 640 TMC as on 12-3-2000, if the requirement of 10. 50 TMC (as referred to supra) is deducted, the balance water available would only be 2. 14 TMC, which is insufficient even to meet the requirement of the Localised Ayacut of 19,000 acres for the second crop. It is relevant to submit that pursuant to plugging of the 19th Block River Sluice in the year 1990, the dead storage below the SILL level (bottom level) of the existing River sluices of Somasila Reservoir is of 2 TMC which cannot be drawn at all. It is therefore clear that even if the mddl of 7. 5 TMC is not maintained, there is hardly any water available in the Somasila Reservoir, for supply to pennar Delta for the Rabi crop. " ( 76 ) THE petitioners filed rejoinder to the counter-affidavit of the respondents 2 to 5. Except saying that the figures mentioned in para 16 of the counter- affidavit are concocted, the crucial averment justifying the maintenance of dead storage of MDDL of 7. 5 TMC, has not been denied. Therefore, it is very clear that if the MDDL of 7. 5 TMC is not maintained, the dead storage would go below the SILL (bottom) level of the existing river sluice rendering huge quantity of 2. 00 TMC of water unusable. The reason is rational and any reasonable authority would come to the same conclusion that the dead storage of 7. 5 TMC requires to be maintained at all costs. Further, the quantity of water in the reservoir is disputed.
00 TMC of water unusable. The reason is rational and any reasonable authority would come to the same conclusion that the dead storage of 7. 5 TMC requires to be maintained at all costs. Further, the quantity of water in the reservoir is disputed. We have already referred to various authorities - both text books and decided cases, and concluded that when it is for the administrator/decision maker to record findings as to the existence or non-existence of facts, basing on the judgement and discretion of such decision maker, and the facts involved, taking into consideration the broad aspects of the entire issue, including the imponderables, unforceable and unpredictable monsoon conditions, it is the duty of the Court to upheld the finding of fact by the public body/decision-maker. It is impermissible for the Court to weigh the quality or quantity of the evidence for the Court only determines the reasonableness of the finding. Therefore, we reject the contention of the learned senior Counsel on the first aspect of the matter. When the respondents have arrived at the storage levels at 10. 22 tmc as on 24-4-2000 in the Somasila reservoir, and the availability of water at 3. 15 TMC (including the dead storage and evaporation) in Delta Tanks and Reservoirs, it is impermissible for this Court to countenance the submission of the learned senior Counsel and record a different finding. ( 77 ) IN the affidavit, accompanying the writ petition, while giving the particulars of water available in Somasila Reservoir as on 14-3-2000, the petitioners have assumed that the transmission and evaporation losses would be at 2. 75 TMC when the total water available is 13. 00 TMC. The District advisory Board which met on 12-3-2000 assumed the evaporation losses at 2. 00 TMC when the total water available in the reservoir as on that date was 12. 64 TMC. The counter-affidavit, filed by respondents 2 to 5 mentions that the evaporation losses were determined in accordance with the formula prescribed in the Irrigation Manual by Ellis, which is stated to be uniformly applicable throughout the country. When the Somasila irrigation Committee met on 30-3-2000, the evaporation losses were assumed at 1. 80 TMC when the storage of Somasila reservoir as on 29-3-2000 was at 11. 19 TMC. In the report submitted by the committee of Engineers, the water level in the Somasila Reservoir was 10.
When the Somasila irrigation Committee met on 30-3-2000, the evaporation losses were assumed at 1. 80 TMC when the storage of Somasila reservoir as on 29-3-2000 was at 11. 19 TMC. In the report submitted by the committee of Engineers, the water level in the Somasila Reservoir was 10. 22 TMC, and the demand for the purpose of evaporation was shown as 1. 60 TMC in the reservoir, and 1. 310 TMC (both dead storage and evaporation) in Delta, Tanks and Reservoirs when the total water available in the Tanks and Reservoirs is at 2. 737 TMC. The learned senior Counsel submits that even 1. 60 TMC towards evaporation losses and 1. 310 TMC towards dead storage and evaporation in the reservoir and Tanks respectively is an arbitrary figure. We are afraid, we cannot agree with this. We have already examined these figures in juxtaposition with the affidavit filed by the petitioners themselves, who admit that when the water in the reservoir is 13. 00 TMC, the evaporation losses would be 2. 75 TMC. This clearly shows that there cannot be any interference with the findings of the Committee of engineers. In any event as we have already mentioned that these are the matters for experts, we cannot interfere by taking to impermissible course of "nice balancing of relevant considerations. " ( 78 ) NEXTLY, it is contended that provision of 2. 50 TMC of water for meeting the demands towards seedbeds for khariff crop of 2000 is unwarranted and unreasonable. To substantiate this, the learned senior Counsel has repeatedly invited our attention to the recommendations made by the Somasila Irrigation Committee on 30-3-2000. The Somasila Irrigation committee inter alia recommended "to release water to seedbeds for ensuing khariff only after the reservoir starts receiving appreciable inflows in order to see that the water in the Reservoir is not depleted much below MDDL. In view of the reasons explained supra, according to the learned senior Counsel, it clinchingly shows that water need not be stored for the purpose of seedbeds now. This, in our opinion, is a mis-conception. The recommendation only means that having regard to the danger of allowing the water depletion in the reservoir below MDDL, the water meant for seedbeds should be stored and should be released for seedbeds only after fresh inflows are received.
This, in our opinion, is a mis-conception. The recommendation only means that having regard to the danger of allowing the water depletion in the reservoir below MDDL, the water meant for seedbeds should be stored and should be released for seedbeds only after fresh inflows are received. This does not mean that water need not be stored for the present. In the case of failure or delay of onset of south-west monsoon, the fate of seedbeds for khariff can well be imagined if the water is released now without making any provision to meet such demand. We, therefore, reject the submission. ( 79 ) ANOTHER submission made by the learned senior Counsel is that provision of 3. 00 TMC of water available for meeting drinking water needs of Nellore and Kavali towns and other villages under command of somasila Project is on the higher Side. For the same reasons of justiciability, we cannot agree with this. Even otherwise, in our considered opinion, the drinking water needs of the people should take precedence over the water needs for the purpose of irrigation, and other economic activities and we cannot find fault with the decision taken by the District Advisory Board, the somasila Irrigation Committee as well as the Committee of Engineers. Indeed, it is impermissible for a Court of judicial review to disagree with the opinion of an expert body only on the ground that it does not accord with the opinion of the individual judges. As observed in the beginning of the judgment, we are weakened by our own strength. ( 80 ) YET another submission made by sri. S. Ramachandra Rao, is that during yester years, the respondents themselves released water for Rabi second crop in excess of contemplated ayacut even when the dead storage went below the required MDDL. He invited our attention to a coy of the letter dated 8-2-1989 (page 43 of the material paper book) addressed by the Executive engineer, Nellore to 3rd respondent herein, and also the statement (page 48 of the material paper book) showing the details of second crop permitted in Pennar Delta since 1998.
He invited our attention to a coy of the letter dated 8-2-1989 (page 43 of the material paper book) addressed by the Executive engineer, Nellore to 3rd respondent herein, and also the statement (page 48 of the material paper book) showing the details of second crop permitted in Pennar Delta since 1998. The first document is the letter, whereby the Executive Engineer submitted a reported to the 3rd respondent inter alia informing that on 7-2-1989 a meeting of officers from Irrigation Circle, Nellore, as well as Telugu Ganga Project was convened, that during the meeting the Somasila Project authorities decided to release an additional 1. 5 TMC of water from the reservoir for second crop under Pennar Delta and that originally the water agreed to be released i. e. , 1. 5 TMC was reserved towards dead storage of 0. 5 TMC and 1. 0 TMC for drinking water for Nellore Town. Even in this report, the Executive Engineer recommended for releasing the water only for about 7,000 acres for Rabi second crop at the rate of 5,000 acres per TMC, but not for huge extent of about 1,00,000 acres. The report also proposed to supply water for lands under Zone VI- (Part) in the order of rotation as per the zonal system. ( 81 ) THE statement showing the irrigation details during second crop gives the particulars of storage available, both in somasila Reservoir and Delta tanks, water available for second crop etc. The details of water released from 1978 to 1994 are typed in the statement and the details for the year 1994-95 and 1995-96 are handwritten. Be that as it may, the statement shows that till 1996, the respondents allegedly released water ranging between 2. 948 TMC (1985) to 14. 524 TMC (1994) for second crop. The details of water available in Somasila Reservoir from 1978 to 1987 are not available in the statement. From 1988 to 1996, the details of water available in Somasila Reservoir, the Delta tanks and the water available (released) for second crop are given. We have examined this. From 1988 to 1996 onwards, even after allegedly releasing water ranging from 3. 21 TMC (1989) to 14. 524 TMC (1994), still the dead storage in the somasila Reservoir was maintained ranging between about 5. 6 TMC MDDL (1989) to about 16. 5 TMC (1994-95 ).
We have examined this. From 1988 to 1996 onwards, even after allegedly releasing water ranging from 3. 21 TMC (1989) to 14. 524 TMC (1994), still the dead storage in the somasila Reservoir was maintained ranging between about 5. 6 TMC MDDL (1989) to about 16. 5 TMC (1994-95 ). Therefore, we are unable to agree with the submission that from 1978 to 1996, the dead storage levels at the required MDDL were ignored to facilitate transplantation during Rabi second crop. ( 82 ) THE learned senior Counsel also relied on a letter dated 2-7-1989 addressed by 3rd respondent to the 2nd respondent wherein the former requested the latter to address the Government for permission to utilise the water available at Somasila reservoir below the MDDL + 270. The other document relied on by the learned senior Counsel is an order of the Government being G. O. Rt. No. 517, Irrigation Candd (Projects wing TGP-1), dated 5-7-1999, vide which the Government while accepting the report of the Chief Engineer, Telugu ganga Project, Srikalahasthi, agreed to release 1. 6 TMC of water from Somasila reservoir "to protect the standing crop in rabi 1999 (F-1408) under Pennar Delta. " in our considered opinion, these two documents would not support the case of the petitioners. Admittedly, for Rabi second crop 1999-2000 the ayacutdars have not yet taken up transplantation, which is one difference, which goes a long way against the petitioners. When the Government issued g. O. Rt. No. 517, dated 5-7-1999, it is obvious that the decision was taken to release 1. 6 TMC of water as there was already standing crop in Rabi 1999, which is not the case before us. Therefore, we have to reject the submission. In fact, the details of minimum reservoir levels from 1990-99 are annexed to the report of the Committee of engineers dated 28-4-2000, which may conveniently be reproduced below: ( 83 ) A plain inference that can be drawn from the above details is that from 1994-95 onwards the MDDL was never allowed to go beyond 5. 501 TMC. We have already given the details of water available in somasila Reservoir as on 24-4-2000, as furnished by the Committee of Engineers. The same shows that after providing for the demands like seedbeds, drinking water, dead storage, evaporation etc. , the water that is available would be -4. 48 TMC (minus 4. 4.
501 TMC. We have already given the details of water available in somasila Reservoir as on 24-4-2000, as furnished by the Committee of Engineers. The same shows that after providing for the demands like seedbeds, drinking water, dead storage, evaporation etc. , the water that is available would be -4. 48 TMC (minus 4. 4. 8 tmc) when the demand at MDDL 7. 50 is maintained. The water available would be +0. 02 TMC (plus 0. 02 TMC) if the demand is maintained at the reservoir level of 2. 00 TMC. Therefore, the decision of the respondents not to release water from Somasila reservoir or the Delta tanks for Rabi second crop 1999-2000, and to close down the irrigation canals with effect from 31-3-2000 is reasonable and cannot be branded as arbitrary. We, therefore, reject all the submissions made by the learned counsel for the petitioners on this point. We notice that no other submission is made by the learned senior Counsel for the petitioners. ( 84 ) BEFORE we conclude, we feel constrained to observe that water sustains the life, both animal life and plant life. Life is unimaginable without water. All the human settlements and great civilisations flourished on the riverbanks or in the river valleys. The great Sanskrit idealist Poet 'sumathi' even exhorted a commoner to choose a village for living where there is a perennial river with plenty of water. The history of the world is replete with instances where battles and wars were fought at the levels of local chieftains as well as great countries only for the sake of water, and for possessing water bearing land with plenty of surface water resources. The rivers are the best among the surface water resources of the Earth. The need for conservation of water in all the surface water resources as well as the underground water sources need not be overemphasised. It is well settled that the right to flowing water 'is a right publicijuris. The right to use water, which is a right incident to property in the land, is not an absolute right.
The need for conservation of water in all the surface water resources as well as the underground water sources need not be overemphasised. It is well settled that the right to flowing water 'is a right publicijuris. The right to use water, which is a right incident to property in the land, is not an absolute right. ( 85 ) THE Supreme Court of India, 'in the matter of Cauvery Water Disputes tribunal, AIR 1992 SC 522 , reiterated the legal position enunciated by the US Supreme court in State of Kansas v. State of Colorado, (1906) 206 US 46 = 51 Law Ed 956, in which the US Supreme Court, had in fact, approved the law declared by Mr. Justice burch of Kansas Supreme Court while delivering the unanimous opinion of the court in Clark v. Allaman, 71 Kan. 206 = 70 LRA 971. The relevant law, as stated by mr. Justice Burch, and approved by the US supreme Court in Kansas v. Colorado, is as under:"the use of the water of a running stream for irrigation, after its primary uses for quenching thirst and other domestic requirements have been subserved, is one of the common law rights of a riparian proprietor. "the right to flowing water is now well settled to be a right incident to property in the land; it is a right publici juris, of such character that, whilst it is common and equal to all through whose land it runs, and no one can obstruct or divert it, yet, as one of the beneficial gifts of providence, each proprietor has a right to a just and reasonable use of it, as it passes through his land; and so long as it is not wholly obstructed or diverted, or no larger appropriation of the water running through it is made than a just and reasonable use, it cannot be said to be wrongful or injurious to a proprietor lower down. "the right to the use of flowing water is publici juris, and common to all the riparian proprietors; it is not an absolute and exclusive right to all the water flowing past their land, so that any obstruction would give a cause of action; but it is a right to the flow and enjoyment of the water, subject to a similar right in all the proprietors, to the reasonable enjoyment of the same gift of Providence.
It is, therefore, only for an abstraction and deprivation of this common benefit, or for an unreasonable and unauthorized use of it, that an action will lie. " (emphasis added) ( 86 ) THEREFORE, in an action like the one before us, unless the petitioners plead and prove that deprivation of right to water, for the purpose of irrigation is unreasonable, no action would lie. We must hasten to add that the dispute is not of justiciable nature to be adjudicated by this court. Our endeavour, as a Court of judicial review, has been to satisfy the Court's conscience that there is no arbitrariness in the decision making process especially when the petitioners complain the deprivation of their right to equality under Article 14 and right to life and liberty under Article 21 of the Constitution. Needless to add, that right to water, which is substantial ingredient to make 'life', is itself a penumbral right to life. In Re point C: ( 87 ) FOR all the above reasons, we reject the writ appeal and confirm the judgment of the learned single Judge. Writ appeal is accordingly dismissed. There shall be no order as to costs.