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2008 DIGILAW 450 (JK)

Union of India v. Sunil Gupta

2008-11-26

SUNIL HALI

body2008
1. This application has been preferred by the applicant-Union of India seeking recovery of an amount of Rs. 10,35,805/- with interest at the rate of 18% p.a. from the respondents on account of solatium and interest in the case entitled as "Union of India vs. Dhanwanti Devi (deceased) and another." 2. In order to appreciate the controversy, the brief facts are necessary to be noticed. 3. Land measuring 58 kanals 14 marlas situated in village Talwal, Tehsil and District Rajouri, belonging to one Dhanwanti (deceased), came to be acquired by the Union of India. Feeling aggrieved with the compensation assessed by the Deputy Commissioner, Rajouri, ex-land owner sought arbitration under Section 8 of the J&K Requisitioning and Acquisition of Immovable Property Act, 1968. The learned Arbitrator vide his award dated 06.03.1991 assessed the compensation amounting to Rs.41,09,000/- in favour of Smt. Dhanwanti Devi (deceased) at the rate of Rs.70,000/- per kanal. The arbitrator further allowed solatium at the rate of 15% amounting to Rs.6,16,350/- with interest at the rate of 4% per annum on the award amount. Thereafter an appeal was preferred against this order by the Union of India in this court. 4. This court on 07.05.1991 directed the Union of India to deposit an amount of Rs.37,94,705/-. The said appeal came to be dismissed by this court on 29.09.1992. The award of the arbitrator was maintained. Thereafter a Special Leave Petition came to be filed by the Union of India before the Supreme Court. The Apex Court did not interfere with the amount of compensation but set aside the awarding of solatium and interest on the amount of compensation awarded in favour of the respondents. It is pertinent to mention that during the pendency of the SLP, Smt. Dhanwanti died and her legal representatives, namely, Sunil Gupta, Rohit Gupta and Vishal Gupta came to be brought on record. 5. In view of the decision of the Supreme Court the amount of solatium and interest awarded by the arbitrator in favour of the claimants and upheld by the High Court was to be recovered from them. It is important to mention that this court vide order dated 30.05.1991 directed for releasing the award amount in favour of the owner (Dhanwanti Devi-deceased) subject to the condition of her furnishing a bank guarantee of 50% of the amount and a surety bond and personal security of the balance of 50%. It is important to mention that this court vide order dated 30.05.1991 directed for releasing the award amount in favour of the owner (Dhanwanti Devi-deceased) subject to the condition of her furnishing a bank guarantee of 50% of the amount and a surety bond and personal security of the balance of 50%. Respondent no.1 Sunil Gupta executed a surety bond thereby giving surety to the tune of Rs.19,09,852.50 which was released in favour of the owner-Dhanwanti Devi and undertook to pay the amount in case the court directs. It is also important to mention that late Dhanwanti Devi executed a General Power of Attorney and a personal bond on 03.06.1991 undertaking to pay 50% of the amount. Both the documents are part of CIA No.31/1991. 6. In the application for restitution, petitioner- Union of India states that the excess amount of Rs.10,35,805 is recoverable from the claimants with interest @ 18% p.a. which comes to Rs.41,09,000/-This amount is sought to be recovered from the respondents on the ground that they are the legal representatives of late Dhanwanti. This fact has been admitted by them before the Supreme Court, where they were incorporated as legal representatives of late claimant-Dhanwanti Devi. 7. The respondents in their objections have stated that the present application is not maintainable. It is stated that the proper remedy available to the petitioner was to file a petition under Order 21 CPC. It is further stated that they have not inherited the estate of the deceased at all. It is admitted that they were summoned as legal representatives of late Dhanwanti Devi. However, legal representatives are different than legal heirs. The respondents have also denied that no interest is payable to them as there was no direction from the Supreme Court. The respondents have also stated that the application seeking restitution was barred by time. 8. This court vide its order dated 30.03.2005 has concluded certain issues which were raised by the respondents. The order of this court has decided the following questions:- (a) That the application is within time. The limitation provided seeking recovery of an amount in terms of the Apex courts order is 12 years. (b) That the present petition for restitution is maintainable. The court has further stated that the restitution can be made under inherent power of the court. 9. The limitation provided seeking recovery of an amount in terms of the Apex courts order is 12 years. (b) That the present petition for restitution is maintainable. The court has further stated that the restitution can be made under inherent power of the court. 9. With respect to issue as to who is liable to pay this amount, this court directed the District Judge, Jammu to enquire into the dispute as to whether the property of deceased Smt. Dhanwanti Devi has come into the hands of the legal representatives and if so, to what extent, affording opportunity to the parties to adduce evidence and rebuttal thereof. After the conclusion of the inquiry, report was to be sent to this court. The court further observed that till the inquiry is made by the District Judge, no order could be passed for payment of amount on account of solatium and interest on the compensation received by the claimant. 10. In pursuance to the direction of this court, learned District and Sessions Judge, Jammu vide its report dated 10.06.2006 has stated that the legal representatives of the deceased Smt. Dhanwanti Devi have not inherited any property of the deceased. The findings of the learned District Judge, Jammu are based on the fact of burden to prove that some assets of the deceased Dhanwanti has passed on to her legal heirs, namely, Sunil Gupta, Rohit Gupta and Vishal Gupta was on the decree holder but despite numerous opportunities afforded to the decree holder, he has failed to discharge the burden of proving that any portion of the assets of deceased Dhanwanti has passed in the hands of her legal representatives. 11. It is important to mention that Union of India filed writ petition being OWP No.555/2006 questioning the findings of the District and Sessions Judge dated 06.06.2006. The grounds taken in the application are:- (a) That the application filed by the petitioners on 31.05.2006 had been wrongly rejected as the petitioners had no effective control over the witnesses to be summoned. The witnesses were bank officials, who were to be summoned along with the record. They could not have been produced by the petitioners on their own. (b) That no time was given to the petitioners to summon the witnesses. (c) That since the amount was public money, the court was required to show liberal approach in the matter. 12. The witnesses were bank officials, who were to be summoned along with the record. They could not have been produced by the petitioners on their own. (b) That no time was given to the petitioners to summon the witnesses. (c) That since the amount was public money, the court was required to show liberal approach in the matter. 12. It is pertinent to mention that the direction was issued by the lelarned District Judge on 02.02.2006 for summoning of the official of the bank subject to depositing of diet expenses of the witnesses. This direction was not complied with as Union of India had failed to deposit the diet expenses of the witnesses to be summoned. In essence, the learned District Judge has rejected the application on the ground that no interest has been shown by the respondents to summon the witnesses despite opportunities granted. 13. Heard learned counsel for the parties and perused the record. 14. Report of the learned District Judge has been received, which clearly states that the respondents being the legal representatives of Dhanwanti have not inherited her estate. The only question that is required to be determined is to from whom this amount is to be recovered in the face of the report submitted by the learned District Judge, Jammu. 15. It is a settled proposition of law that the legal representatives of the deceased are liable only to the extent of the property of the deceased which has come into their hands. The extent of liability of the legal representatives is determined by the fact as to which property has come into their hands. This aspect of the matter has been inquired by the learned District Judge and he has found that the legal representatives have not inherited any property of the deceased. So in this view of the matter, this court cannot call upon the respondents to reimburse the amount to the petitioners being the legal representatives of the deceased. 16. The next question that arises for consideration is that what is the liability of the respondents to reimburse this amount. This court vide its order dated 30.05.1991 has passed the following order :- "Record has been received. Case shall be listed for further proceedings in the month of July, 1991. Mr. 16. The next question that arises for consideration is that what is the liability of the respondents to reimburse this amount. This court vide its order dated 30.05.1991 has passed the following order :- "Record has been received. Case shall be listed for further proceedings in the month of July, 1991. Mr. A.V.Gupta learned counsel for the respondents has made a prayer for release of the amount deposited by Union of India with Additional/Deputy Registrar. I have heard the learned counsel for the parties in this regard. After considering all aspects of the case it is directed that the amount deposited by Union of India shall be released in favour of the respondent on her furnishing bank guarantee for 50 percent of the amount pledged to the Additional Registrar High Court and for remaining 50% amount she will furnish surety bond and personal bond and personal security to the satisfaction of Additional Registrar. 17. In pursuance to the direction of this court, the personal bond was executed by late Dhanwanti Devi through her attorney holder Sunil Gupta that she would pay Rs.19,09,852.50 or any part thereof as per the court direction in such a manner as had been directed. The surety bond was executed by Sunil Gupta, respondent no.1 which is quoted as under ;- " Whereas in the aforesaid appeal, an amount of Rs.38,19,705/- stands deposited in this Honble Court; And whereas vide order dated May 30th, 1991, Honble Court has been pleased to direct the release of the said amount in favour of the respondent, subject to the condition of respondent furnishing Banks guarantee of 50% of the amount and a surety bond and personal security of the balance of 50%. Therefore by this deed of surety, I Sunil Gupta son of Sh. Jia Lal Gupta resident of Mohalla Dalpatian, Jammu do hereby bind myself and give surety of Rs.19,09,852.50 being released in favour of the respondent, and that I shall pay the said amount, or any part thereof as this Honble Court direct in such manner as may be directed. In witness whereof I have signed the aforesaid deed of surety this the 3rd day of June, 1991. Executant. Sd/- (Sunil Gupta)" 18. In witness whereof I have signed the aforesaid deed of surety this the 3rd day of June, 1991. Executant. Sd/- (Sunil Gupta)" 18. The statement of Sunil Gupta was also recorded on 4th June, 1991, in which he disclosed the property which he holds on its own in order to ensure that he is a man of substance to furnish the said surety. 19. The question that arises now whether this amount can be recovered from respondent no.1 as surety. Section 145 CPC deals with enforcement of liability of the surety, which is quoted as under :- " Where any person has furnished security or given a guarantee - (a) for the performance of any decree or any part thereof, or (b) for the restitution of any property taken in execution of a decrees, or (c) for the payment of any money, or for the fulfillment of any condition imposed on any person, under an order of the court in any suit or in any proceeding consequent thereon. (d) The decree or order may be executed in the manner herein provided for the execution of decrees, namely :- (i) If he has rendered himself personally liable, against him to that extent; (ii) If he has furnished any property as security, by sale of such property to the extent of the security; (iii) If the case falls both under clauses (i) and (ii) then to the extent specified in those clauses; And such person shall be deemed to be a party within the meaning of section 47 Provided that such notice as the court in each case thinks sufficient has been given to the surety. 20. The question whether the surety bond executed by respondent no.1 could be enforced by exercising the power of the court. It is order of the court which creates liability and the court has the duty to enforce the same. It was only on the execution of the surety bond by the Executant that the amount was released in favour of the claimant. This court has a duty to execute and implement its orders and it cannot plead helplessness in the matter of execution of its order, in view of the judgment of the Supreme Court. Respondent no.1 has personal liability as per the terms of the bonds executed by him. This court has a duty to execute and implement its orders and it cannot plead helplessness in the matter of execution of its order, in view of the judgment of the Supreme Court. Respondent no.1 has personal liability as per the terms of the bonds executed by him. Under Section 128 of the Contract Act, the liability of the surety is co-extensive with that of principal debtor unless it is otherwise provided by the Contract. Respondent no.1 is unequivocally bound by executing Surety Bond to repay this amount as and when directed by the court. His liability to pay is co-extensive with that of the principal debtor i.e. deceased-claimant. 21. Reliance is placed on AIR 1982 SC 1497, AIR 1983 SC 188 and AIR 2001 SC 450 para 14. In AIR 2001 SC 450 titled Western Press Pvt. Ltd., Mumbai Vs. The Custodian and others, the Supreme Court held as under:- "That apart, the provisions contained in Section 145 CPC also would ensure to the benefit of the court as well as the custodian to proceed against the appellant against the appellant in enforcement of the undertaking given to the court and there are no merits in the contentions sought to be urged to the contrary." 22. In terms of the surety bond executed by respondent No.1 he has made himself liable to pay Rs.19,09,852.50 which is 50% of the total amount of Rs.38,19,705/-. The interest worked out by the petitioner on the amount awarded has come to Rs. 10,35,805/-. In terms of the surety bond executed by respondent no.1 he is liable to pay 50% of the interest amount. I, accordingly, hold that respondent no.1 is liable to pay 50% of the total amount of solatium and interest payable in terms of Supreme Court order which is half of the amount of Rs.10,35,805/-. 23. Now coming to the question of interest. Admittedly, respondent no.1 has not received any amount but has only acted as surety of the deceased-claimant. It cannot be said that any amount was withheld by the surety, he is only discharging the liability of the deceased-claimant who had received the amount. Interest is payable as compensation for withholding of the amount which is due to other person. In the present case, no amount has been withheld or utilized by the surety so no interest is payable by him. Interest is payable as compensation for withholding of the amount which is due to other person. In the present case, no amount has been withheld or utilized by the surety so no interest is payable by him. However, he is liable to pay interest@ 7% p.a. from today on 50% of the total amount till the same is realized. 24. This petition is, accordingly, disposed of along with connected CMP(s), if any.