Writ Petition No.8816 of 2012

28th February, 2014

Petitioner Counsel: Mr. PRAVIN SAMDANI, Mr. KUNAL VAJANI, Mr. PRANAYA GOYAL, Mr. HIMANSHU VIDHANI, WADIA GHANDY
Respondent Counsel: Mr. A.A. KUMBHAKONI, M.P. THAKUR, Ms. KAVITA ANCHAN, M.V. KINI, Mrs. KIRAN BAGALIA, Mrs. CHITRA PHADKE, Ms. SHYAMALI GADRE

Cases Cited:
T.R. Thandur Vs. Union of India & Ors., (1996) 3 SCC 690 [Para 25,34]
Balvant N. Viswamitra & ors. Vs. Yadav Sadashiv Mule (Dead) Through Lrs. & ors., (2004) 8 SCC 706 [Para 25,52]
Deepak Agro Foods Vs. State of Rajasthan & ors., (2008) 7 SCC 748 [Para 25,53]
Union of India Vs. Tarachand Gupta & Bros., 1971(1) SCC 486 [Para 25,54]
Commissioner of Income Tax, Shimla Vs. Greenworld Corporation, Parwanoo, (2009) 7 SCC 69 [Para 25,55]
Shreedhar G. Kamerkar Vs. Yesahwant G. Kamerkar and anr., 2007 ALL SCR 569=(2006) 13 SCC 481 [Para 25]
Sadanand S. Varde & Ors. Vs. State of Maharashtra & Ors., 2000(4) ALL MR 510=(2001) 1 Bom. C.R.261 [Para 25]
State of Uttar Pradesh Vs. Hari Ram, 2013 ALL SCR 1382=(2013) 4 SCC 280 [Para 25]
Raheja Universal Limited Vs. N. R. C. Limited, 2012 ALL SCR 1229=(2012) 4 SCC 148 [Para 31]
Rama Shree Conductors Limited Vs. AAIFR & Ors., W.P. No. 358/2009, Dt.12/11/2009 [Para 38]
Smith Vs. East. Elloe Rural District Council, (1956) AC 736 [Para 46]
Hoffman-la Roche (F) & Co. A.G. Vs. Secretary of State for Trade and Industry, (1975) AC 295 [Para 47]
State of Punjab & Ors. Vs. Gurdev Singh, (1991) 4 SCC 1 [Para 48,49]
State of Kerala Vs. M. K. Kunhikannan Nambiar Manjeri Manikoth, Naduvil (Dead) & Ors., (1996) 1 SCC 435 [Para 48]
Sultan Sadik Vs. Sanjay Raj Subba & Ors., (2004) 2 SCC 377 [Para 48]
Krishnadevi Malchand Kamathia & ors. Vs. Bombay Environmental Action Group & Ors., 2011(3) ALL MR 474 (S.C.)=(2011) 3 SCC 363 [Para 50]
State of Rajasthan & Ors. Vs. D. R. Laxmi & Ors., (1996) 6 SCC 445 [Para 51]
Hari Vishnu Kamath Vs. Ahmad Ishaque, AIR 1955 SC 233 [Para 64]

JUDGMENT

M. S. SONAK, J. :- The Petitioner, by this Petition under Article 226 of the Constitution of India takes exception to the order dated 1st July 2011 (majority opinion) passed by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) which, on an appeal by the State of Maharashtra, sets aside sub paras (i), (ii) of para 7.5 of the order dated 9.4.2010 passed by the Board for Industrial and Financial Reconstruction (BIFR) and remands the case to BIFR with a direction to initiate the process for modification of rehabilitation scheme concerning M/s. Khatau Makhanji Spinning & Weaving Co.Ltd. (KMSW) in terms of Section 18(5) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) for exclusion of the land affected by notices/ orders/ action under the Urban Land Ceiling Act, 1976 (ULC) and its transfer to Swayam Realtors and Traders LLP (SRTL), the Petitioner herein, in pursuance of demerger and to provide for consequential changes. The order dated 01.07.2011 shall hereinafter be referred to as the "impugned order".

2. By an order dated 21.3.1981, the State of Maharashtra (Respondent No.3) through the Joint Director of Industries exempted under Section 20 of ULC, the property of KMSW (Respondent No.4) admeasuring 1,91,418.60 sq. mtrs. Survey nos. 57/4, 87, 88, 89, 96 to 105, 105/3, 3 and 4 Megathane, Borivali (subject property). This subject property at Borivali was partly freehold and partly leasehold. The issues raised in the present Petition concern the freehold portion, which shall therefore be referred to as "said property".

3. The aforesaid order dated 21.3.1981 issued under Section 20(1) of ULC exempted the application of Sections 3 to 19 of ULC to the subject property on the following, amongst other conditions :

(1) The land exempted under this exemption order shall be used by the said person for his own benefit for the purpose of Industry and for no other purpose. Any change made in the user of the land shall amount to a breach of these conditions;

(2) The said person shall make full utilization of the lands exempted for the purpose aforesaid, by constructing on the land exempted buildings occupying a total plinth area of not less than 46,663.00 sq. mtrs.. He shall commence building construction within a period of one year from the date of this exemption order and shall complete the construction within a period of five/ten/fifteen years from the date, failing which the exemption stands withdrawn. If only a part of the land is utilised and a part remains utilized then exemption for the part which remains vacant at the end of the period of five/ten /fifteen years shall be deemed to have been withdrawn.

(3) The said person shall not transfer the exempted land (with or without buildings thereon) or any part thereof, to any other person, by way of sale, mortgage, gift, lease or otherwise, except for the purpose of mortgage in favour of any financial Institution, specified in sub-section (1) of Section 19 of the Urban Land (Ceiling and Regulation) Act, 1976.

(4) Notwithstanding anything contained in any of the preceding clauses of this order. If the said person desires to transfer the exempted land (with the buildings thereon, if any) to any other person, by way of sale, mortgage, gift, lease or otherwise, he shall apply to the State Government for prior permission for such transfer, and such application shall contain such particulars as the State Government may require, on receipt of such application the State Government. [Emphasis supplied]

4. As there was no full utilization of the subject property within the time schedule prescribed in condition No.2 of the aforesaid order dated 21.3.1981, the Respondent No. 3 (State) by order dated 15.6.1994 granted an extension of one year to commence construction. However, the outer limit to complete construction was unaltered. By further order dated 23.4.1997, the State amended the exemption order dated 21.3.1981 by permitting the Respondent No.4 to set up an industrial estate, instead of an industry, by using about 10,00,000 sq. ft area from out of the freehold portion of the subject property. There is no serious dispute that there is no full utilization of the subject property or the said property in accordance with the terms and conditions of the exemption order dated 21.3.1981 as amended from time to time.

5. On 11.03.2004, presumably relying upon condition no. 2 in the exemption order dated 21.03.1981, which provides for 'deemed withdrawal', the Additional Collector and competent Authority issued a notification under Section 10(1) of the ULC in respect of the subject property for the acquisition of the same by the State. This was followed by notification dated 16.05.2005 under Section 10(3) of the ULC declaring the subject property to be deemed to have been acquired by the State Government and deemed to have vested absolutely in the State Government free from all encumbrances.

6. On 07.09.2006, the Respondent No. 4 addressed a representation to the Additional Collector and Competent Authority protesting against the issue of notifications dated 11.03.2004 and 16.05.2005 claiming therein that the exemption order dated 27.03.1981 being still in force, the Authorities were incompetent to exercise any powers under Section 10 of the ULC. Appeal under Section 34 of the ULC was also preferred questioning the notifications dated 11.03.2004 and 16.05.2005. The Appeals are said to have abated on 01.12.2007, consequent upon coming into force of the Urban Land (Ceiling and Regulation) Repeal Act, 1999 in the State of Maharashtra.

7. In the meanwhile, the Respondent No.4 came to be declared as 'sick industry' in terms of the SICA. The BIFR, by order dated 11.7.2007 sanctioned a rehabilitation scheme effect from 01.04.2006, which inter alia provides that the freehold portion of the land at Borivali (said property) be demerged from the Respondent No.4 and transferred by merger into the SRTL, i.e., the Petitioner herein. The Rehabilitation Scheme as approved by the BIFR, inter alia imposed certain obligations upon the State of Maharashtra in terms of Clause 11.1.D thereof, relevant of which read thus:

D. Government of Maharashtra:

(a) Upon payments of workers dues by SRTL, GoM to agree to grant permission for closure of Mumbai units and facilitate development of land by the de-merged Company (SRTL) in accordance with DCR 58 framed for the purpose.

(b) To agree to grant waiver to SRTL in respect of limitations under ULC including under Sec.20 & 22 for development of land of Mumbai units.

(c) To agree to grant other relief and concessions as per standard practice of Government of Maharashtra for sick units and continue such relief during the period of rehabilitation.

(d) ....

(e) ....

8. The Additional Collector and Competent Authority- ULC in the meanwhile issued notice under Section 10(5) of the ULC and in pursuance thereof took over the possession of the subject property which includes, inter alia the said property on 15.2.2007. There is a factual dispute raised by the Petitioner and the Respondent no.4 as to whether such possession of the subject property, which includes said property was indeed taken over in pursuance of notice dated 31.01.2007 or not.

9. The Respondent No. 4 through its Constituted Attorney Mr. Mayur Shah preferred Writ Petition No. 2032 of 2008 on 20.06.2007, seeking inter alia the following reliefs :

(a) The surplus land referred to in this Writ Petition is no longer affected by Section 8(4) read with Section 10(1) and Section 10(3) of the erstwhile ULC Act 1976 and the said land cannot be acquired by the State and the mutation entries, if any, executed in favour of the State of Maharashtra be cancelled and the name of the Petitioner be restored in the land records and record of rights and remutation be carried out in the entries in favour of the Petitioner;

(b) The order and proceedings referred to in Exhibit A to this writ petition, in so much as they have an effect of bringing the land within the purview of the ULC as surplus or are documents / proceedings in the process of having the subject land declared as surplus, be declared as void and inter-alia quashed;

(c) The Additional Commissioner (Respondent No.2 along with the Additional Collector and Competent Authority (ULC) - Respondent No. 1, be directed to send all records and proceedings in the matter to this Honourable Court;

10. The State and the Mumbai Metropolitan Regional Development Authority (MMRDA)-Respondent No.9 herein, in whose favour the said property came to be allotted in pursuance of action under the ULC filed detailed affidavits pointing out that the possession of the said property has been taken over in pursuance of the notices and orders under Section 10 of the ULC. In the light of the disclosures in the affidavit and with a view to file comprehensive Petition, the Respondent No.4 withdrew Writ Petition No. 2032 of 2008 with liberty to file a fresh Petition. The order dated 16.09.2008 permitting withdrawal of Writ Petition No. 2032 of 2008 reads thus :

"1. The learned Senior Advocate appearing for the petitioner states that the petitioner would like to withdraw this petition with a liberty to file fresh petition on the same subject matter. Permission to file fresh petition is granted. If any fresh petition is filed, naturally it will be open to the parties to contest the same on all available points. Permission to withdraw the petition is granted with the aforesaid liberty. The petition stands disposed of as withdrawn.

2. In view of the disposal of the writ petition, the notice of motion does not survive and stands disposed of accordingly."

11. The Petitioner and the Respondent No.4 thereafter preferred a comprehensive Writ Petition No.309 of 2009, once again questioning the notices, orders and action under ULC on 29.9.2008 in pursuance of the liberty secured by aforesaid order dated 16.09.2008. The reliefs claimed in Writ Petition No. 309 of 2009, read thus:

(a) This Hon'ble Court be pleased to declare that:

(i) the land held by the Petitioner No. 1 bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto] cannot be treated as surplus vacant land and not liable for acquisition under the Urban Land (Ceiling and Development) Act, 1976;

(ii) consequently, the order dated 27.9.1994, notice dated 5.3.2004, the notifications dated 11.3.2004 and 16.6.2005, the notice dated 31.1.2007 and the purported possession receipt dated 15.2.2007 (Exhibits E, G, O, Q, V and W hereto) respectively issued / passed u/s 8(4), 9, 10(1), 10(3) and 10(5) as regards the land bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto] of the Urban Land (Ceiling and Development) Act, 1976 are per-se illegal, arbitrary, unconstitutional, null and void ab-initio and not binding on the Petitioner Nos. 1 and 3;

(iii) the purported agreement, if any, between the Respondent No. 1 and the Respondent No. 4 for purported lease of the whole or part of the land comprised in CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto] and the purported claim of the Respondent Nos. 1 and 2 of having handed over possession of the said land to the Respondent No. 4 is per-se, illegal, arbitrary, unconstitutional, null and void ab-initio and of no legal consequence and not binding on the Petitioner nos. 1 and 3 and that the Respondent Nos. 1, 2, 4, 5 and 6 including their respective officers, employees and agents etc. are not entitled to take any steps or actions thereon, which are contrary to the rights of the Petitioner Nos. 1 and/or 3 in the said land;

(iv) All the mutation entries made by Respondent No. 5 in the revenue records as reflected in the property card (Exhibit Y hereto) of the aforesaid land bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto] showing the alleged rights of Respondent Nos. 1 and/or 4 therein are liable to be quashed and set aside;

(b) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari any other appropriate writ, order or direction calling for the records and proceedings of order dated 27.9.1994, notice dated 5.3.2004, the notifications dated 11.3.2004 and 16.6.2005, the notice dated 31.1.2007 and the purported receipt dated 15.2.2007 (Exhibits E, G, O, Q, V and W hereto) respectively issued / passed u/s 8(4), 9, 10(1), 10(3) and 10(5) of the Urban Land (Ceiling and Development) Act, 1976 regards the land bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto], the purported agreement, if any, between the Respondent No.1 and the Respondent No. 4 for purported lease of the whole or part of the said land and all the mutation entries made by Respondent No. 5 in the revenue record of the said land mentioning the alleged rights of Respondent nos. 1 and /or 4 therein (annexed as Exhibit Y hereto) and after going through the validity, legality and propriety thereof be pleased to quash and set aside the same;

(c) This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ, order and direction thereby commanding the:

(i) Respondent nos. 1 to 3 to withdraw, rescind and cancel order dated 27.9.1994, notice dated 5.3.2004, the notifications dated 11.3.2004 and 16.6.2005, the notice dated 31.1.2007 and the purported receipt dated 15.2.2007 (Exhibits E, G, O, Q, V and W hereto) respectively issued / passed u/s 8(4), 9, 10(1), 10(3) and 10(5) of the Urban Land (Ceiling and Development) Act, 1976 regards the land bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borviali, District Greater Mumbai [described in Sr. No. 4 of Exhibit A hereto];

(ii) Respondent Nos. 1, 2 and 4 to withdraw, rescind and cancel the purported agreement, if any, between the Respondent No. 1 and the Respondent No. 4 for purported lease of the whole or part of the aforesaid land [described in Sr. No. 4 of Exhibit A hereto] and the purported claim of having handing over possession of the said land to the Respondent No. 4 and further commanding the Respondent Nos. 1, 2 and 4 including their respective officers, employees and agents etc. not to take any steps or actions thereon, which are contrary to the rights of the Petitioner nos. 1 and/or 3 in the said land;

(iii) Respondent Nos. 1, 5 and 6 to withdraw, rescind and cancel all the mutation entries dated 10.10.2005, 31.1.2007 and 8.9.2008 in the property card (Exhibit Y hereto) of the land (described in Sr. No. 4 of Exhibit A to the Petition) mentioning the alleged right and possession of Respondent nos. 1 and 4;

12. Again, in Writ Petition No. 309 of 2009, the State and the MMRDA filed detailed affidavits defending the notices, orders and action under the ULC. Thereupon, the Petitioner and the Respondent No.4, withdrew the Writ Petition No. 309 of 2009 with "liberty to adopt alternate remedy". The order dated 11.6.2009 in Writ Petition No. 309 of 2009, reads thus:

"P.C.

1. On a motion made by the learned Counsel for the petitioners, petition is allowed to be withdrawn, however, with liberty to adopt alternate remedy. All contentions available to both the sides are kept open. Despite disposal of the petition, the interim order which is operating today, shall continue to operate for a period of ten weeks from today."

13. The Petitioner instead of 'adopting alternate remedy' to question the action under the ULC, preferred M.C.A. on 10.7.2009 before the BIFR for seeking implementation of the rehabilitation scheme. In this M.C.A., the Petitioner made references to "OBSTRUCTIONS CREATED IN SMOOTH IMPLEMENTATION OF THE SANCTIONED SCHEME" by way of notices, orders and action under ULC, styled such "Obstructions" as being "per se illegal, arbitrary, ultra vires, the provisions of SICA/sanctioned scheme/ULC, unconstitutional, null, void, ab initio and all of no legal consequences whatsoever" and on the said basis urged that the sanctioned scheme be implemented notwithstanding the notices, orders and action under ULC.

14. In paragraph 3.4.4 of the aforesaid M.C.A., in the context of withdrawal of W. P. No. 309 of 2009, the Petitioner made the following averments:

"3.4.4. Pursuant thereto when the captioned Writ Petition came up for hearing on 11th June, 2009, the Hon'ble Bombay High Court was of the view that there was an alternate remedy available to the Applicant by approaching this Hon'ble Board seeking for implementation of the Sanctioned Scheme in accordance the provisions of SICA and the Board For Industrial & Financial Reconstruction Regulations, 1987 (hereinafter referred to as "BIFR Regulations"). In that view of the matter, the Applicant was advised to withdraw the said Writ Petition and accordingly an order dated 11th June 2009 was passed by the Hon'ble Bombay High Court allowing the said Writ Petition to be withdrawn with liberty to adopt alternate remedy. Under the said Order the Hon'ble Bombay High Court also directed that the order of status quo which was operating till the date of the said Order be operative for a a further period of 10 (ten) weeks from the date of the said Order, i.e., unto 20th August 2009, Annexed hereto and marked as Exhibit- "W" is a copy of the said Order dated 11th June 2009, downloaded from the official website of the Hon'ble Bombay High Court."(Emphasis supplied)

15. Perusal of order dated 11.6.2009, by which the Petitioner and the Respondent No.4 were permitted to withdraw the Writ Petition No.309 of 2009 would indicate that the order does not record or express any view of this Court "that there was an alternate remedy available to the Applicant by approaching this Hon'ble Board seeking for implementation of the sanctioned scheme in accordance with the provisions of the SICA and the Board for Industrial and Financial Reconstruction Regulations, 1987".

16. In respect of the leasehold portion of the subject property, the Respondent No.4 filed a Suit No. 2395 of 2009 before this Court seeking inter alia the following reliefs:

(a) This Hon'ble Court be pleased to declare that :

(i) the plaintiff No. 1 is entitled to hold and is in possession of the land admeasuring about 67,469.69 sq. mtrs. (described in Sr. no. 5 of Annexure A) comprising of the land admeasuring 61,746 sq. mtrs. comprised in Survey nos. 96 (Pt.), 100 (Pt.), 101 (Pt.), 102, 103 and 104 [described in Sr. No. 1 (II) of the table in Annexure A] and the balance land admeasuring 5,723.69 sq. mtrs. being part of the area of 24,516 sq. mtrs. comprised in Survey no. 109 CTS No. 169 [described in Sr. No. 1 (III) of the table in Annexure A] from out of the land bearing CTS Nos. 280, 280/1 to 6, 281 admeasuring about 1,83,072.02 sq. mtrs. situate at Village Magathane, Taluka Borivali, District Greater Mumbai [described in Sr. No. 4 of Annexure A hereto] and that the same cannot be treated as surplus vacant land and is not liable for acquisition under the Urban Land (Ceiling and Development) Act, 1976;

(ii) the order dated 27.9.1994, notice dated 5.3.2004, the notifications dated 11.3.2004 and 16.6.2005, the notice dated 31.1.2007 respectively issued / passed u/s. 8(4), 9, 10(1), 10(3) and 10(5) of the Urban Land (Ceiling and Development) Act, 1976 and the purported possession receipt dated 15.2.2007 and the purported mutation entries dated 10.10.2005, 31.1.2007 and 8.9.2008 made in the P.R. Card are per-se illegal, arbitrary, unconstitutional, null and void ab-initio and not binding on the Plaintiff No. 1 and are liable to be quashed and set aside;

(iii) the purported possession receipt dated 2.9.2008 executed by Revenue Authorities in favour of Defendant No. 4, the purported licence granted by the Defendant No. 1 to Defendant No. 4, the purported tenders floated by the Defendant No. 4 as regards the land admeasuring 1,60,591.22 sq. mtrs. comprised in CTS Nos. 280, 280/1 to 6 and 281, Magathane Village, Borivali (described in Sr. No. 6 of Annexure A hereto) from out of the land admeasuring about 1,83,072.02 sq. mtrs. (described in Sr. No. 4 of Annexure A hereto) are per-se illegal, arbitrary, unconstitutional, null and void ab-initio and of no legal consequence and not binding on the Plaintiff No. 1 and be pleased to quash and set aside the same and further declare that the Defendant Nos. 1, 2, 4, 5 and 6 including their respective officers, employees and agents etc. are not entitled to take any steps or actions thereon, which are contrary to the rights of the Plaintiff No. 1 therein;

(b) In the alternative and without prejudice to the 1st Plaintiff's claim of possession of the above land, in the event this Hon'ble court upholds the Plaintiffs' contentions about the illegality and invalidity of the impugned actions of the Defendant Nos. 1 and 2 under the ULC Act, but finds that on and after 15.2.2007 the Defendant nos. 1, 2 and 4 have trespassed on the land admasuring about 67,469.69 sq. mtrs. (described in Sr. No. 5 of Annexure A), then this Hon'ble Court be pleased to order and decree the Defendant Nos. 1, 2 and 4 be evicted from the said land of the Plaintiff No. 1;

(c) This Hon'ble Court be pleased to issue a permanent order and injunction thereby:

(i) Restraining the Defendant Nos. 1 to 6 including their respective sub-ordinates, officers etc. from taking any steps / actions in furtherance of / implementation of the order dated 27.9.1994, notice dated 5.3.2004, the notifications dated 11.3.2004 and 16.6.2005, the notice dated 31.1.2007 respectively issued / passed u/s. 8(4), 9, 10(1), 10(3) and 10(5) of the Urban Land (Ceiling and Development) Act, 1976 and the purported mutation entries dated 10.10.2005, 31.1.2007 and 8.9.2008 made in the P.R. Card, the purported licence granted by the Defendant No. 4 and the purported tenders floated the Defendant No. 4 and/or taking any adverse and/or coercive steps and actions against the rights of Plaintiff no. 1 in the said land;

(ii) restraining the Defendants 1 to 6 including their respective officers, employees, agents, assigns etc. from in any manner interferring with or obstructing the Plaintiff No. 1's possession of the land admeasuring about 67,469.69 sq. mtrs. (described in Sr. no. 5 of Annexure A);

(iii) restraining the Defendants 1 to 6 including their respective officers, employees, agents, assigns etc. from in any manner interfering with or obstructing the Plaintiff No. 1's right to use and/or develop and/or redevelop and/or construct upon the said land admeasuring 67,469.69 sq. mtrs. (described in Sr. No. 5 of Annexure A);

17. In the aforesaid Suit No.2395 of 2009, the Respondent No.4 took out a Notice of Motion No.3351 of 2009, seeking inter alia restraint upon the State and MMRDA from taking any action in furtherance of notices and orders under the ULC. By the judgment and order dated 5.2.2010, the Single Judge of this Court dismissed the Notice of Motion No.3351 of 2009. In an Appeal, by the judgment and order dated 5.4.2010, the Division Bench of this Court has set aside the judgment and order dated 5.2.2010 on the ground that the issue of jurisdiction had been raised and therefore, preliminary issue in terms of Section 9A of C.P.C. ought to have been framed and decided before proceeding to dispose of the notice of motion. Accordingly, the matter came to be remanded before the Single Judge, where it pends adjudication.

18. Thus in respect of the subject property, which comprises freehold portion and leasehold portion:

(A) The Petitioner has filed proceedings before the BIFR in respect of freehold portion on the basis that notices, orders and action under ULC is "non est and void" and therefore, the same needs to be "ignored" whilst implementing rehabilitation scheme; and

(B) The Respondent No.4, from whom the Petitioner derives interest, has filed Suit No.2395 of 2009 to set aside the notices, orders, and action under the ULC in so far as they concern the leasehold portion.

19. The BIFR, by its order dated 9.4.2010 directed the State and all concerned to implement/comply with the rehabilitation scheme unhindered by any notices, orders or action under the ULC. In particular, the State was directed to comply with the provisions of para 11.1.D of the rehabilitation scheme, to which reference has been made earlier. In para 7.3 of the order dated 9.4.2010, however, the BIFR noted that it was neither in its competence, nor was it necessary for the BIFR to adjudicate upon the provisions of ULC.

20. The State, aggrieved by the order dated 9.4.2010, preferred an Appeal before the AAIFR questioning inter alia inclusion of the said property within the sweep of the rehabilitation scheme on the grounds that the subject property, of which the said property was only a part, stood vested in the State in terms of Section 10(3) of the ULC.

21. By order dated 1st July 2011, the two members of AAIFR allowed the Appeal and directed the exclusion of the said property affected by notices/orders/action under the ULC from the sweep of the rehabilitation scheme and remanded the matter to BIFR to initiate process of modification of the rehabilitation scheme.

The Chairman of AAIFR, however, dismissed the State Appeal by virtually accepting the Petitioner's case that the notices/orders/action under the ULC were "non est and void".

22. The introductory paragraph of the majority opinion of the AAIFR, reads thus:

" On 30.6.11, i.e., on the date of his retirement, the Hon'ble Chairman referred an order signed by him to the Members of AAIFR for their signatures.

We have perused this order and find that we are unable to agree with the findings arrived at by the Hon'ble Chairman for reasons given in the succeeding paragraphs."

23. In order to complete the narration of the facts, it needs to be stated that the Petitioner preferred Writ Petition No.6414 of 2011 before the Delhi High Court questioning the impugned order dated 1.7.2011 passed by the majority of Members of the AAIFR. The order dated 23.7.2012 made by the Delhi High Court records a submission made by and on behalf of the Petitioner in paragraphs 6 and 7, which read thus:

6. Learned counsel for the petitioner further points out that one of the preliminary objections taken by the respondents is that since the Bombay High Court is fully seized of the matter in relation to challenge to the various actions taken by the State of Maharashtra under the ULCR Act (in relation to the leasehold land), this Court ought not to exercise its jurisdiction under Articles 226 and 227 of the Constitution of India in as much, as, the forum conveniens for challenging the proceedings would be the Bombay High Court and not this Court. Learned counsel submits that though the other pending proceedings pertain to the leasehold land, the position would be the same qua the land in question which is the freehold land. He submits that the scope of his submissions have to encompass the validity of the orders passed by the Competent Authority under the ULCR Act, as also on the question whether such an aspect could be dealt with by the BIFR, the scheme having been sanctioned, or whether they are best determined in writ proceedings for which the competent Court would be the Bombay High Court. Learned senior counsel for the petitioner thus submits that he accedes to the plea of the respondent of the Bombay High Court being the forum conveniens so that this technical plea does not create a hurdle for the petitioner and the petitioner would be able to advance his submission on all the aspects before the Bombay High Court.

7. In view of the aforesaid position, learned counsel seeks leave to withdraw the writ petition with liberty to file the petition before the Bombay High Court encompassing all these aspects."[Emphasis supplied]

24. Ultimately, the Delhi High Court based upon the aforesaid by its order dated 23.07.2012 permitted the Petitioner to withdraw the Writ Petition No.6414 of 2011 with liberty to file a fresh Petition before this Court.

25. In the backdrop of aforesaid facts and circumstances, Mr. Samdani, learned senior counsel appearing for the Petitioner has made the following submissions in support of this Petition:

A]The exemption order dated 21.3.1981 issued under Section 20(1) of ULC subsists, as the same was never withdrawn by the State or its Authorities by resort to the mandatory procedure prescribed under Section 20(2) of the ULC. During the subsistence of such exemption order, nothing contained in Sections 3 to 19 of the ULC could apply to the said property. Accordingly, notices, orders and action under Section 10 of the ULC are "non est, void ab initio, null and void". In the circumstances, there is neither any necessity of seeking any declaration nor is there necessity of taking out any proceedings to quash and set aside such notices,orders or action in pursuance thereof. In support of this proposition, Mr. Samdani placed reliance upon the decisions in cases of T.R. Thandur vs. Union of India & Ors.(1996) 3 SCC 690, Balvant N. Viswamitra & ors. vs. Yadav Sadashiv Mule (Dead) Through Lrs. & ors. (2004) 8 SCC 706, Deepak Agro Foods vs. State of Rajasthan & ors. (2008) 7 SCC 748, Union of India Vs. Tarachand Gupta & Bros. 1971(1) SCC 486 and Commissioner of Income Tax, Shimla vs. Greenworld Corporation, Parwanoo (2009) 7 SCC 69.

B] The contention of the State that a conjoint reading of Section 32 of SICA and Section 42 of ULC, confers an overriding effect upon the provisions contained in ULC is untenable qua the subject property, in view of the subsistence of exemption order dated 21.3.1981 issued under Section 20(1) of the ULC. Accordingly, the Authorities like BIFR and AAIFR under the SICA have jurisdiction to go into the issue of validity or otherwise of notices, orders, and action under the ULC.

C] In view of exemption order dated 21.3.1981:

(i) The prohibition, if any, upon transfer of subject property under the provisions of Sections 3 to 19 of ULC cannot be made applicable to the subject property. In this regard reliance was placed upon the decision of the Supreme Court in the case T.R. Thandur (supra);

(ii) In any case, under the ULC there is no absolute bar for transfer of property. The property can always be transferred with the permission of the State under Section 27(1) of ULC, which permission is deemed to have been granted in the present case. In this regard, reliance was placed upon the decision of the Supreme Court in the case Shreedhar G. Kamerkar vs. Yesahwant G. Kamerkar and anr. (2006) 13 SCC 481 : [2007 ALL SCR 569]

(iii) In this case, the transfer is on account of sanction of the rehabilitation scheme by BIFR under the provisions of SICA. Therefore, this is a case of transfer "by operation of law" to which any of the restrictive provisions of ULC did not apply. In this regard, reliance was placed upon the decision of this Court in the case of Sadanand S. Varde & Ors. vs. State of Maharashtra & Ors. (2001) 1 Bom. C.R.261 : [2000(4) ALL MR 510]

D] Assuming that the exemption order dated 21.3.1981 is not subsisting, even then possession of the said property has not been taken by the State or its Authorities in accordance with the provisions contained in Section 10(5) or 10(6) of the ULC. In terms of Urban Land (Ceiling and Regulation) Repeal Act 1999 adopted by the State with effect from 29.11.2007, the ULC stands repealed in the State of Maharashtra with effect from 1.12.2007. After this date, the State has no power or authority or jurisdiction to take possession of the subject property or the said property and all proceedings under the ULC, therefore, lapsed. This is yet another reason why the notices, orders and action under ULC need to be 'ignored'. In this regard, reliance was placed upon the Supreme Court in the case of State of Uttar Pradesh Vs. Hari Ram (2013) 4 Supreme Court Cases 280 : [2013 ALL SCR 1382].

26. Mr. A.A. Kumbhakoni, learned Special Govt. Pleader appearing for the Respondent Nos. 3,10 and 12 made the following submissions:

A] The Petitioner has indulged in 'suppressio veri suggestio falsi'. Even otherwise, the conduct of the Petitioner is such as disentitles it to any equitable relief under Article 226 of the Constitution of India.

B] The exemption order dated 21.3.1981 was issued subject to certain conditions. The exemption order itself provided that where there is breach of the conditions, the same shall be deemed to be withdrawn. The Respondent No.4 accepted such conditions and conditional order. In the circumstances, the State and its Authorities were perfectly justified in treating the exemption order dated 21.3.1981 as deemed to have been withdrawn, particularly, since there is no serious dispute that the Respondent No.4 failed to comply with the conditions subject to which the exemption order dated 21.3.1981 came to be issued.

C] The notices, orders and action under the ULC is legal and valid. The so called deficiencies pointed out by the Petitioner, do not go to the root of the jurisdiction of the authorities to issue such notices or orders. In the circumstances the notices, orders or the action taken in pursuance thereof, can never be regarded as "void ab initio or nullities".

D] In any case, there is no concept of any notice or order being absolute nullity or being absolutely null and void. It is incumbent upon the party which seeks to avoid such notices or orders to take out appropriate proceedings before the appropriate forum and within the appropriate time required to obtain a declaration or to strike down such notices or orders. Where a party fails to take any such action, the notices and orders remain perfectly valid and the same cannot be 'ignored'.

E] The provisions of Section 32 of the SICA and Section 42 of the ULC make it clear that the provisions of ULC shall have an overriding effect over the provisions of SICA. In such circumstances, the Authorities like BIFR and AAIFR under the SICA clearly lacked jurisdiction to go into the issues of validity or otherwise of the notices, orders and action in pursuance thereof under the provisions of ULC. The BIFR in its order dated 9.4.2010 has admitted this position. The impugned order which takes this view is clearly right and contrary view expressed by the Chairman of AAIFR in his dissenting order delivered on the eve of his retirement, is clearly without jurisdiction and legally untenable. F] The State has already placed the MMRDA in possession of the subject property for the purposes of implementing a scheme of Rehabilitation. This is clearly in public interest. Therefore, the impugned order may not be interfered with in the exercise of extra ordinary and equitable jurisdiction under Article 226 of the Constitution of India.

27. We have heard the learned counsel appearing for the parties. We have perused the record and the Authorities in the form of decisions of this Court and the Supreme Court of India. In our opinion, notwithstanding the various issues raised by the parties, the two main issues which arise for determination in this Petition are as follows:-

A. In the light of the provisions contained in Section 32 of SICA and Section 42 of ULC, do the Authorities constituted under SICA have jurisdiction to go into or adjudicate upon the validity of notices, orders or action under the ULC?

B. Whether it is open to a party affected by any notice, order or action to avoid taking out any proceedings before a competent forum to quash and set aside the same and instead to urge that such notices, order or action is "non est, void or nullity' and therefore the same ought to be 'simply ignored?

28. In order to determine the first issue, reference is necessary to the provisions contained in Section 32 of SICA and Section 42 of ULC.

Section 32 of SICA, reads thus :

"32. Effect of the Act on other laws.

(1) The provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the Memorandum or Articles of Association of an industrial company or in any other instrument having effect by virtue of any law other than this Act.

(2) Where there has been under any scheme under this Act an amalgamation of a sick industrial company with another company, the provisions of section 72A of the Income- tax Act, 1961 (43 of 1961), shall, subject to the modifications that the power of the Central Government under that section may be exercised by the Board without any recommendation by the specified authority referred to in that section, apply in relation to such amalgamation as they apply in relation to the amalgamation of a company owning an industrial undertaking with another company."

Section 42 of ULC, reads thus :

"42. Act to override other laws.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith in any other law for the time being in force or on any custom, usage or agreement or decree or order of a Court, tribunal or other authority."

29. The provisions contained in Section 42 of ULC make it clear that the provisions of ULC shall have effect notwithstanding anything inconsistent therewith in any other law for the time being in force or any custom, usage, agreement, decree or order of a court, tribunal or other authority. Just as the SICA would constitute 'other law' so also the BIFR and AAIFR would constitute 'Tribunal or any other Authority' as contemplated by Section 42 of the ULC. The over riding effect conferred by the legislature upon the provisions of ULC is not qualified. This is further clear upon comparison of this provision with Section 32 of the SICA.

30. The provisions contained in SICA override other laws 'except the provisions of FERA and ULC'. At the stage when SICA came to be enacted, the Parliament was very much aware of the provisions contained in the ULC. Normally there is a presumption that the legislature while enacting a law has complete knowledge of the existing laws which may or may not be affected by the enactment proposed to be enacted. In the present case, the Parliament, in enacting Section 32 of SICA has taken express cognizance of the provisions contained in the ULC. Thus, the legislative intent is quite clear in that the provisions of ULC shall have a primacy over the provisions of SICA, in case of any inconsistency between the two.

31. In the case of Raheja Universal Limited vs. N. R. C. Limited (2012) 4 SCC 148 : [2012 ALL SCR 1229], at paragraphs 85 and 89, The Supreme Court has held thus:

"85. As SICA 1985 is a special law and on the principle that a special law will prevail over a general law, it is permissible to contend that even if the provisions contained in Section 22(1) read with Section 32 of the Act, giving overriding effect vis-a-vis the other laws, other than the Foreign Exchange Regulation Act, 1973 and the Urban Land (Ceiling and Regulation) Act, 1976 had not been there, the provisions of the general law like the Companies Act, for regulation, incorporation, winding up, etc. of the companies would have still been overridden to the extent of inconsistency. 89. From the above judgments of this Court, the unambiguous principle of law that emerges is that the provisions of SICA 1985 shall normally override the other laws except the laws which have been specifically excluded by the legislature under Section 32 of SICA 1985. SICA 1985 has been held to be a special statute vis-a-vis the other laws, most of which have been indicated above. In the present case, we are concerned with the provisions of TPA 1882." [Emphasis supplied]

32. The contention that subsistence of exemption order dated 21.03.1981 under Section 20 of the ULC wipes out the legislative primacy accorded to the ULC, in our opinion, is misconceived and in any case begs the question.

33. In the first place, it is difficult to accept that an exemption granted by an executive or administrative authority can wipe out the statutory effect of the provisions contained either in Section 32 of the SICA or more particularly Section 42 of the ULC. The provisions of Section 20 of ULC, under which the exemption came to be granted authorised the Government to exempt property (excess vacant land) from the applicability of Chapter III, which comprises Sections 3 to 24. Section 42 of ULC is not a part of Chapter III of ULC. It is one thing to assert that notices, orders or action under Section 10 of ULC, which are administrative in nature, are incompetent as long as exemption order under Section 20 of the ULC subsists, however, it is quite another proposition to assert that the provisions of ULC shall not at all be applicable to any proceedings under SICA in regard to property covered by an exemption notification, notwithstanding the express language of Section 32 of SICA AND Section 42 of ULC. The latter broader proposition, in our opinion, is unacceptable.

34. Reliance is placed upon the decision in the case of T. R. Thandur (supra) interalia in support of the proposition that once there is an exemption order, there would be no bar to transfer part of the excess vacant land in respect of which the exemption applies and therefore during the subsistence of an exemption order, provisions of SICA would have primacy over the provisions contained in Section 42 of ULC and for that matter any notices, orders or action taken under ULC. The decision in the case of T. R. Thandur (supra) supports the position that there would be no bar to transfer a part of excess vacant land in respect of which an exemption has been granted under Section 20(1)(b) of ULC. However, in the present case, there is a serious issue as to whether the exemption order subsists or not. Further, even if the exemption order were held to be subsisting, it does not follow that on account of such subsistence, the provisions of the SICA would have primacy over the provisions contained in Section 42 of ULC. There is no such proposition laid down in the case of T. R. Thandur (supra). The decision therefore, in our opinion, is not an authority for the proposition canvassed by Mr. Samdani.

35. Secondly, as observed earlier, there is a serious debate 'whether the exemption order dated 21.03.1981 subsists or not. The question then, is not really whether the exemption order subsists or not, but the real question is which of the Authorities are to determine whether such exemption order subsists or not. To rely upon the very exemption order and urge that in view of the subsistence of the same, the Authorities like the BIFR and AAIFR, which are but creatures of the statute (SICA) are competent to determine such issues, is really begging the question. In our opinion, looking to the express phraseology employed in Section 32 of SICA and Section 42 of ULC, it is clear that the Authorities like the BIFR and AAIFR under the SICA would have no jurisdiction to embark upon any such adjudication.

36. The BIFR in its order dated 09.04.2010 has demonstrated that it was quite alive to this position and this is clear from the opening portion of paragraph 7.3 of the order dated 09.04.2010. The BIFR, however was of the opinion that there is no necessity to adjudicate upon the provisions of ULC. This is clear from the following observations:

"7.3. It is neither in our competence nor is it necessary for BIFR to adjudicate on provisions of ULC."

37. The two members of the AAIFR, in passing the impugned order dated 01.07.2012 have correctly assessed the situation and legal position in this regard, which is evident from the following paragraph in the impugned order :

"From the above, it is quite clear that there are a number of controversial issues involved in this case, namely, (I) whether exemption u/s 20 of ULC Act has lapsed or is still subsisting, (ii) whether the notifications issued by the State Government u/s 10(1), (3) and (5) are non est and void ab initio, (iii) whether the possession of the land in question has been taken over by the State Government or not (iv) whether the procedure followed for taking over possession in terms of Panchnama and other documents is proper and valid, etc. In our opinion, all these issues arise under the ULC Act and not under SICA and, therefore, the BIFR or the AAIFR have absolutely no jurisdiction to adjudicate on these issues and determine whether action taken under the provisions of the ULC Act is valid or not. In fact, the BIFR in its impugned order, after hearing the arguments of both the parties, has observed that it is neither in its competence nor is it necessary for the BIFR to adjudicate under the provisions of ULC Act."

38. In reaching the aforesaid conclusion, the two members of AAIFR placed reliance inter alia, upon the decision of the Division Bench of this Court in the case of Rama Shree Conductors Limited vs. AAIFR & Ors. Writ Petition No. 358 of 2009 decided on 12.11.2009, wherein this Court had the occasion to consider whether AAIFR has the jurisdiction to adjudicate upon the validity of action under the provisions of Securitization and Reconstruction of Financial assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The Division Bench, in the said case observed as follows:

" ... In our opinion, therefore, the AAIFR was perfectly justified in taking the view that if it is the case of the Petitioner that the action taken by Respondent No.3 under Section 13(4) is invalid for any reason, the appropriate remedy for the Petitioner was to approach the D.R.T., which is the Forum provided by the Securitisation Act for deciding such questions. If the finding is recorded by that Forum that the action taken under Section 13(4) is invalid as it lacks consent of 3/4th secured creditors, then the Reference of the Petitioner-company pending in the BIFR will automatically stand revived and no order will be necessary to be passed by any authority under the Sick Industrial Companies Act for that purpose.

In our opinion, the view taken by the AAIFR is in consonance with the scheme of the two Acts, if two authorities under two Acts are permitted to decide the validity of the same action, it may lead to conflicting decisions and may not be in the interest of administration of justice. Petition is,therefore, rejected."

39. The BIFR and the Chairman of AAIFR, however allowed themselves to be persuaded to 'ignore' the notice, order and action under ULC upon the spacious plea that such notice, order or action was 'non est, void or a nullity' on account of presumed subsistence of exemption order dated 21.03.1981. In fact, the Chairman of AAIFR in his minority opinion has gone as far as to adjudicate upon the subsistence and validity of notices, orders and action under the ULC and to return findings thereon in favour of the Petitioner. Such exercise was without jurisdiction. The Authorities under the SICA, which are but the creatures of that statute cannot clutch to jurisdiction in this manner.

40. Besides, if the Petitioner was serious in its assertion that Authorities under the SICA have jurisdiction to go into the issues of validity or otherwise of notices, orders and action under ULC, then the least that was expected of the Petitioner was to frontally challenge such notices, orders and action by seeking quashing and setting aside of the same. The Petitioner however, realising that such jurisdiction does not vest in the Authorities under the SICA, has attempted to project a plea that the notices, orders and action under ULC is 'non est, void and nullity' and therefore the Authorities under the SICA can proceed to direct the implementation of the rehabilitation scheme upon the premise that such notices, orders and action under ULC do not exist and therefore they can be 'simply ignored'. In our opinion, this was clearly an attempt to require the Authorities under the SICA to do indirectly, what perhaps they would be in no position to do directly. Adoption of such a subterfuge by no means constitutes any collateral challenge.

41. In the result, the view taken by the majority members of AAIFR, in that the AAIFR has no jurisdiction to adjudicate upon the validity of notices, orders or action under the ULC commends to us as being consistent with the provisions of Section 32 of SICA and Section 42 of ULC and therefore we uphold the same.

42. On the second issue, as to whether it is open to a party affected by a notice, order or action to avoid taking out proceedings before a competent forum to quash and set aside the same and instead urge that such notices, order or action is 'non est, void or nullity', and therefore the same ought to be simply ignored, we must say that in the realm of administrative law such question has engaged the attention of Jurists and Courts both in India and beyond. The consensus appears to be that there is nothing like an absolute nullity. Appropriate proceedings before an appropriate forum and in appropriate circumstances have to be taken out by the party affected to get such notice, order or action quashed and set aside or otherwise upset. Until this is done, the notice, order or action remains valid and effective for its ostensible purpose as most impeccable of notices, orders or action.

43. Professor Wade in his treatise on administrative law (Tenth Edition 2009) in regard to this issue has opined thus :

"VOID ACTS (WHETHER THE DEFECT IS LATENT OR PATENT) MAY APPEAR VALID UNTIL SET ASIDE BY A COURT.

The first of these is that an invalid act may not appear to be invalid; and persons will act on the assumption that it is valid. In a well-known passage Lord Radcliffe said: 1 An order even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.

This is a description of an act that is voidable (i.e. valid until set aside by the court). And in many cases such an act can only be effectively resisted in law by obtaining the decision of the court. The necessity of recourse to the court has been pointed out repeatedly in the House of Lords and Privy Council, without distinction between patent and latent defects.2 To the same effect is this statement by Lord Irvine LC.3

No distinction is to be drawn between a patent (or substantive) error of law or a latent (or procedural error of law. An ultra vires act or subordinate legislation is unlawful simpliciter and, if the presumption in favour of its legality is overcome by a litigant before a court of competent jurisdiction, is of no legal effect whatsoever.

Lord Diplock had added that there might be no one entitled to sue, for example if a statutory time limit had expired. In that case the order would have to stand. Cooke J expressed the same idea in a New Zealand case.4 Except perhaps in comparatively rare cases of flagrant invalidity, the decision in question is recognized as operative unless set aside."

"THE COURT MAY REFUSE THE REMEDY REQUIRED TO SHOW VOIDNESS

The second conundrum is that the act may be clearly void but the court may be unwilling (and in some cases not empowered) to grant the necessary legal remedies. The invalid act, being beyond legal challenge, becomes effectively valid. The court may hold that the act or order is invalid, but may refuse relief to the applicant because of his lack of standing,5 because he does not deserve a discretionary remedy,6 because he has waived his rights7, or for some other legal reason. In any such case the 'void' order remains effective and, must be accepted as if it was valid. It seems also that an order may be void for one purpose and valid for another.8 and that it may be void against one person but valid against another.9 A common case where an order, however void, becomes valid for practical purposes is where a statutory time limit expires after which its validity cannot be questioned.10 The statute does not say that the void order shall be valid; but by cutting off legal remedies it produces that result.11

Similarly with remedies withheld in discretion: the court may hold that an attack on the validity of some act or order succeeds, but that no remedy should be granted.12 The court then says, in effect, that the act is void but must be accepted as valid. An example was where in making social security regulations the Secretary of State neglected his mandatory duty to consult organizations concerned: the court granted a declaration to this effect, but declined in its discretion to quash the regulations.13 The net result of this contradictory course was that the regulations stood, and were in effect valid."

1Smith v. East Elloe Rural District Council (1956) AC 736 at 769

2As by Lord Morris in Ridge v. Baldwin [1964] AC 40 at 125; by the Privy Council (Lord Wilberforce) in Calvin v. Carr [1980]AC 574 at 589-90; by Lord Hailsham LC in London Clydeside Estates Ltd. v.Aberdeen DC [1980] 1 WLR 182 at 189, Lord Morris's remarks were misunderstood by the Privy Council in Durayappah v. Fernando [1967] 2 AC 337

3 Boddington vs. British Transport Police [1999] 2 AC 143 at 158, rejecting the distinction made in Bugg v. Director of Public Prosecutions [1993] QB 473

4A. J. Burr Ltd. v. Blenheim Borough [1980]2 NZLR 1 at 4

5 As in Gregory v. Camden LBC [1966] 1 WLR 899; below p. 585

6 As in Lovelock v. Minister of Transport (1980) 40 P & CR 336 (remedy sought too late)

7 p.201 and below p.395 of Book Administrative Law Tenth Edition H.W.R. Wade & C. F. Forsyth

8 Approved in R. v. Wicks [1998] AC 92 at 109 (Lord Nicholls). Thus it may be valid for the purpose of being appealed against but not otherwise, as explained in Calvin v. Carr [1980] AC 574 at 590 and Credit Suisse v. Allerdale BC.

9 As in Agricultural etc. Training Board v. Aylesbury Mushrooms Ltd. [1972] 1WLR 190 (industrial training order valid against organisations duly consulted but void against those not consulted) approved in the Credit Suisse case.

10 Smith v. East Elloe RDC [1956] AC 736; R v. Secretary of State for the Environment ex p. Ostler

11 O'Reilly v. Mackman [1983] 2 AC 237 at 283 F (Lord Diplock); the Credit Suisse case, R v. Secretary of State for the Environment ex p. Ostler [1977] QB 122

12 This passage was approved by Glidewell LJ in R. v. Governors of Small Health School ex p. Birmingham CC (1989) 2 Admin. LR. 154

13 R. v. Secretary of State for Social Services ex p. Association of Metropolitan Authorities [1986] 1 WLR 1

14 e.g. Lord Diplock in Hoffmann - La Roche, n. 5, who considered the terms "concepts developed in the private law of contract which are ill adapted to the field of public law" [1975] A.C. 295, 366. In London and Clydeside Estates Ltd. v. Aberdeen D.C. [1980] 1 W.L.R. 182, Lord Hailsham considered the existence of "stark categories such as 'mandatory' and 'directory', 'void', and 'voidable', a 'nullity' and 'purely regulatory'..... useful but .. misleading into so far as it may be supposed to present a court with the necessity of fitting a particular case into one or other of mutually exclusive and starkly contrasted compartments, . which in some cases (e.g. 'void' and 'voidable') are borrowed from the language of contract or status and are not easily fitted to the requirements of administrative law", ibid. Lord Denning, initially supported the void - voidable distinction and terminology but in Lovelock v. Minister of Transport (1980) 40 P & C.R. 336, 345 said " I have got tired of all the discussion about 'void' and 'voidable'. It seems to be a matter of words - of semantics - and that is all". See also Lord Denning in The Discipline of Law (1979) p.77 where he said: "I confess that at one time I used to say that such a decision was not void but only voidable. But I have seen the error of my ways." See also his retraction of remarks in the ostler case, n. 52 above, at p. 108.

15 Lord Radcliffe in Smith v. East Elloe R.D.C. (cited above; Lord Denning in Lovelock (n. 17 above) went on to say that "The plain fact is that, even if such a decision as this is 'void' or a 'nullity', it remains in being unless and until some steps are taken before the court to have it declared void." Lord Diplock in Hoffmann - La Roche, n. 5 above, said that "the presumption that subordinate legislations is intra vires prevails in the absence of rebuttal, and .. it cannot be rebutted except by a party to legal proceedings in a court of competent jurisdiction who has locus standi to challenge th validity of the subordinate legislation in question." Ibid at 377 See also Cooke J. in A. J. Burr Ltd. v. Blenhim Borough [1980] 2 N.Z.L.R. 1 at 4. See also the decision of the Privy Council in Calvin v. Carr [1980] A.C. 574 where Lord Wilberforce stated (at pp. 589-590) that a decision made contrary to natural justice is void, "but that, until it is so declared by a competent body or court, it may have some effect, or existence, in law." He preferred the term "invalid or vitiated" to void, and felt that it would be "wholly unreal" to hold that the decision made was totally void in the sense of being legally nonexistent. The Master of the Rolls in R. v. Panel on Takeovers and Mergers, ex p. Datafin plc [1987] Q.B. 815 referred to "a very special feature of public law decisions" to be the fact that "however wrong they may be, however lacking in jurisdiction they may be, they subsist and remain fully effective unless and until they are set aside by a court of competent jurisdiction." See also Bugg v. D.P.P. [1993] Q.B. 473.

16 Per Lord Diplock in Hoffmann-La Roche, n. 5 above, at 366

17 For a consideration of the presumption of regularity (ommia praesumantur rite et solemniter esse acta donec probetur in contrarium), See R. v. Inland Revenue Commissioner, exp. T.C. Coombs & Co. [1991] 2 A.C. 283. Although an individual in the case in which "a fundamental obligation may have been to outrageously and flagrantly ignored or defied", may "safely ignore what has been done and treat it as having no legal consequences upon himself. In such a case it may be that the subject is entitled to use the defect in procedure simply as a shield or defence without having taken any positive action of his own." Per Lord Hailsham in London and Clydeside Estates Ltd. v. Aberdeen D.C., n. 17 above, at 190.

18 See Chap. 15 of Book De Smith, Woolf and Jowell - Judicial Review of Administrative Action

44. De Smith, in his treatise 'Judicial Review on administrative action (1995 Fifth Edition at pp 259-261), explains the position in law, thus :

"The erosion of the distinction between jurisdictional errors and non-jurisdictional errors has, as we have seen, correspondingly eroded the distinction between void and voidable decisions. The courts have become increasingly impatient with the distinction14 to the extent that the situation today can be summarised as follows:

(1) All official decisions are presumed to be valid until set aside or otherwise held to be invalid by a court of competent jurisdiction15.

Under the terminology of void and voidable decisions, this propositions raises a paradox, namely, that a decision, although technically void, is in practice voidable. Such a paradox is, however, circumvented if we abandon those terms which "lead to confusion"16 and instead use the terms lawful and unlawful decisions. Decisions are thus presumed lawful unless and until a court of competent jurisdiction declares them unlawful. There is good reason for this: the public must be entitled to rely upon the validity of official decisions and individuals should not take the law into their own hands.17 These reasons are built into the procedures of the application for judicial review, which requires for example an application to quash a decision to be brought within a limited time.18 A decision not challenged within that time, whether or not it would have been declared unlawful if challenged, and whether or not unlawful for jurisdictional error, retains legal effect. So does a decision found to be unlawful but where a remedy is, in the court's discretion, withheld."

45. In Halsbury's Laws of England (4th Edition), the position of law is explained thus :

"If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes: and it has been said that there are no degrees of nullity. Even though such an act is wrong and lacking in jurisdiction, however, it subsists and remains fully effective unless and until it is set aside by a court of competent jurisdiction. Until its validity is challenged, its legality is preserved."

46. In case of Smith v. East. Elloe Rural District Council (1956) AC 736 page 769, Lord Radcliffe explains the legal position thus:

"But this argument is in reality a play on the meaning of the word nullity. An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."

47. Lord Diplock in the case of Hoffman-la Roche (F) & Co. A.G. vs. Secretary of State for Trade and Industry (1975) AC 295 explains the position of law, thus :-

"My Lords, I think it leads to confusion to use such terms as "voidable", "voidable ab initio", "void" or "a nullity" as descriptive of the legal status of subordinate legislation alleged to be ultra vires for patent or for latent defects, before its validity has been pronounced on by a court of competent jurisdiction. These are concepts developed in the private law of contract which are illadapted to the field of public law. All that can usefully be said is that the presumption that subordinate legislation is intra vires prevails in the absence of rebuttal, and that it cannot be rebutted except by a party to legal proceedings in a court of competent jurisdiction who has locus standi to challenge the validity of the subordinate legislation in question."

48. The aforesaid opinions expressed by English Jurists and Judges have been quoted with approval in the Indian context by the Supreme Court of India in the cases of (I) State of Punjab & Ors. vs. Gurdev Singh (1991) 4 SCC 1, (II) State of Kerala vs. M. K. Kunhikannan Nambiar Manjeri Manikoth, Naduvil (Dead) & Ors. (1996) 1 SCC 435 and (III) Sultan Sadik vs. Sanjay Raj Subba & Ors. (2004) 2 SCC 377

49. In the case of Gurdev Singh (supra), the contention that an order of dismissal being void, ultra vires and not merely voidable was 'no dismissal in law' and therefore ought to be ignored was debunked by the Supreme Court in the following words:

"8. But nonetheless the impugned dismissal order has at least a de facto operation unless and until it is declared to be void or nullity by a competent body or Court. ....

10] It will be clear from these principles, the party aggrieved by the invalidity of the order has to approach the Court for relief of declaration that the order against him is inoperative and not binding upon him. He must approach the Court within the prescribed period of limitation. If the statutory time limit expires the Court cannot give the declaration sought for."

50. In the case of Krishnadevi Malchand Kamathia & ors. vs. Bombay Environmental Action Group & Ors. (2011) 3 SCC 363 : [2011(3) ALL MR 474 (S.C.)] the Supreme Court emphatically ruled that it is settled position in law that even if an order is void, it requires to be so declared by a competent forum and it is not permissible for any person to ignore the same merely because in his opinion the order is void. In paragraphs 16 and 19, the Supreme Court has observed thus :

"16. It is a settled legal proposition that even if an order is void, it requires to be so declared by a competent forum and it is not permissible for any person to ignore the same merely because in his opinion the order is void. In State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth Naduvil AIR (1996) 1 SCC 435; AIR 1996 SC 906; Tayabbhai M. Bagasarwalla v. Hind Rubber Industries (P) Ltd. (1997) 3 SCC 443; AIR 1997 SC 1240, M. Meenakshi v. Metadin Agarwal (2006) 7 SCC 470, and Sneh Gupta v. Devi Sarup, (2009) 6 SCC 194, this Court held that whether an order is valid or void, cannot be determined by the parties. For setting aside such an order, even if void, the party has to approach the appropriate forum.

19. Thus, from the above it emerges that even if the order/notification is void/voidable, the party aggrieved by the same cannot decide that the said order/notification is not binding upon it. It has to approach the court for seeking such declaration. The order may be hypothetically a nullity and even if its invalidity is challenged before the court in a given circumstance, the court may refuse to quash the same on various grounds including the standing of the petitioner or on the ground of delay or on the doctrine of waiver or any other legal reason. The order may be void for one purpose or for one person, it may not be so for another purpose or another person."

51. In case of State of Rajasthan & Ors. vs. D. R. Laxmi & Ors. (1996) 6 SCC 445 The following observations of the Supreme Court may be apposite in the context :-

"10. The order or action, if ultra vires the power, becomes void and it does not confer any right. But the action need not necessarily be set at naught in all events. Though the order may be void, if the party does not approach the Court within reasonable time, which is always a question of fact and have the order invalidated or acquiesced or waived, the discretion of the Court has to be exercised in a reasonable manner. When the discretion has been conferred on the Court, the Court may in appropriate case decline to grant the relief, even if it holds that the order was void. The net result is that extraordinary jurisdiction of the Court may not be exercised in such circumstances."

52. The decision in the case of Balvant N. Viswamitra & Ors. vs. Yadav Sadashiv Mule (Dead) through Lrs. & Ors. (2004) 8 SCC 706, upon which reliance was placed by Mr. Samdani does not lay down any proposition of law contrary to what has been referred to in the aforesaid Authorities of the Supreme Court. In fact, this decision also expressly approves the views expressed by Wade. Besides, this decision brings out distinction between decrees which are illegal or wrong and decrees which are null and void.

53. Same is the position in the case of Deepak Agro Foods (supra) except that the Supreme Court in paragraph 18 has made a distinction between judicial proceedings, like proceedings in a suit and proceedings for assessment under a fiscal statute where an assessing officer does not adjudicate on a lis and observed that the law laid down under the civil law may not stricto sensu apply to assessment proceedings.

54. The decision in the case of Union of India vs. Tarachand Gupta & Bros. (supra), is an authority for the proposition that notwithstanding finality clauses in Import and Exports (Control) Act, 1947, where a statutory authority acts in excess of jurisdiction, the civil court can always interfere.

55. The decision in the case Commissioner of Income Tax vs. Greenworld Corporation Parwanoo (supra), is an authority for the proposition that where an assessment officer acts on the dictates of a higher authority, his action is a nullity. In fact, despite record of such conclusion, the Supreme Court refused to exercise its discretionary jurisdiction under Article 136 to quash the nullity, as such quashing would have resulted in the revival of an illegal and invalid order.

56. In the result, we are of the opinion that in the present case, it was not open to the Petitioner to avoid taking out appropriate proceedings before the appropriate forum and within appropriate period to avoid and/or to quash and set aside notices, orders or action under ULC and at the same time urge that such notices, orders or action are 'non est, void or nullities' and on the said basis, the same ought to be 'simply ignored'. The plea to seek implementation of the rehabilitation scheme before BIFR upon the presumed basis that notices, orders and action under ULC is 'non est, void or nullity' was therefore misconceived.

57. The obvious attempt on the part of the petitioner to project that this was the course of action 'suggested or approved' by this Court whilst disposing of writ petition no. 309 of 2009 deserves deprecation. The averments in paragraph 3.4.4 of the M.C.A. by which BIFR was an approached virtually gives an impression that this Court was of the view that there was an alternate remedy available to the applicant by approaching BIFR seeking for implementation of the sanctioned scheme in accordance with the provisions of SICA . It is impermissible for a party to add or subtract from any wordings in a judicial order. Such attempt assumes serious proportions when such addition is intended to create an impression upon a Tribunal that it has jurisdiction to entertain the matter, at a stage when the position is not free from doubt. Accordingly, we deem it our duty to deprecate such action on the part of the Petitioner.

58. Again, this is not a case where the Petitioner or Respondent No. 4 were not really aware of the legal position that it was necessary for them to take out appropriate proceedings to quash and set aside notices, orders or action under ULC. Writ Petition No. 2032 of 2008 was filed precisely to seek such relief but the same was withdrawn with liberty to file a comprehensive writ petition. Writ petition No. 309 of 2009 was then filed to seek comprehensive reliefs in this regard. However, even the same was withdrawn with liberty 'to adopt alternate remedy'. The alternate remedy, in the context would obviously mean some remedy to quash and set aside of notice, orders or action under ULC. Approaching the BIFR and seeking implementation of the rehabilitation scheme upon the presumed premise that such notices, orders and action under ULC is 'non est, void or nullity' in the context, did not constitute an alternate remedy. There is a distinction between a genuine alternate remedy and an expedient remedy. The remedy adopted by the Petitioner before the BIFR was not to quash and set aside notices, orders or action under the ULC, but the so called remedy was based upon the presumed premise that the notices, orders and action under ULC were 'non est, void and nullities' and therefore the same ought to have been 'simply ignored. This was clearly impermissible.

59. It is pertinent to make reference to Civil Suit No. 2395 of 2009 filed by the Respondent No. 4 with regard to the very same notices, orders and action under ULC, though in respect of leasehold portion of the subject property. In paragraph 4.43 of the plaint, the Respondent No. 4 has stated that in Writ Petition No. 2032 of 2008, by inadvertence the entire factual and legal position was not disclosed and therefore the Respondent No. 4 was advised to file a fresh substantive petition after seeking leave to withdraw Writ Petition No. 2032 of 2008. Thereafter, the Respondent No. 4 and the Petitioner jointly preferred a comprehensive Writ Petition No. 309 of 2009, interalia to challenge the very same notices, orders and action under ULC affecting the subject property. In paragraph 4.55 of the plaint, the Respondent No. 4 has stated that on 11.06.2009, when Writ Petition No. 309 of 2009 came up for admission before this Court, 'the Court observed that there were disputed questions of fact which could not be gone into under the writ jurisdiction and that the Petitioners could take recourse to alternate remedy.' Again, no such observations find place in the order dated 11.06.2009 which has been transcribed in paragraph 12 of this judgment and order.

60. In Writ Petition No. 6414 of 2011 filed by the Petitioner before the Delhi High Court, on the aspect of 'Forum Conveniens', the Petitioner, with reference to Civil Suit No. 2395 of 2009 submitted that though the Civil Suit pertains to leasehold right, the position would be the same qua the land in question, which is the freehold land. However, before the AAIFR, when confronted with the interim order made in Civil Suit No. 2395 of 2009 (which has since been set aside) the Petitioner was quick to distance itself from the proceedings in Civil Suit No. 2395 of 2009. This is evident from Grounds H and W in the present Petition, which read as under:

"H. The majority view in the impugned judgment fails to appreciate that the suit filed by Respondent No.4, being Suit No.2395 of 2009, was only with respect to the leasehold portion of the land of Respondent No.4 at Borivali and that the Petitioner was not concerned with the same. The Petitioner had approached Respondent No.2 for implementation of the Sanctioned Scheme in view of the obstructions of Respondent Nos.3,7 and 9."

...................

W. The majority view in the impugned judgment has erred in ignoring the fact that presently there is no Writ Petition pending before any Court, filed either by the Petitioner or Respondent No.4 in respect of and/or in relation to the Borivali Land, and that the Suit No.2395 of 2009 filed by Respondent No.4 before this Hon'ble Court was only with respect to the leasehold portion of the land of Respondent No.4 at Borivali and that the Petitioner was not concerned with the same. The finding of the majority view in the impugned judgment that the action taken by Respondent No.3 with regard to the vesting of the Borivali Land as well as the possession thereof in Respondent No.3 has been challenged in WPs and Civil Suits is therefore erroneous and without application of mind."[Emphasis supplied]

61. In the aforesaid circumstances, it does appear that the Petitioner has no qualms about approbation and reprobation. Again in paragraph 4.55 of the plaint in Civil Suit No. 2395 of 2009, the Respondent No. 4 has attempted to make additions to the order dated 11.06.2009 passed in Writ Petition No. 309 of 2009. This is impermissible. In any case, all this suggests that the Petitioner and the Respondent No. 4, who had jointly preferred Writ Petition No. 309 of 2009 had purported to interpret the order dated 11.06.2009 passed in Writ Petition No. 309 of 2009 differently, obviously for sake of expediency. As referred to earlier, the Petitioner chose to regard the proceedings before BIFR as alternate remedy and the Respondent No. 4 chose to regard Civil Suit as being the appropriate alternate remedy. When convenient, the Petitioner and the Respondent No.4 jointly attack the notices, orders and action under ULC in a common proceedings. When inconvenient, the Petitioner and the Respondent No. 4 seek to distance themselves from each other, by directly or indirectly questioning the very same notices, orders and action under ULC, by approaching different fora.

62. For all the aforesaid reasons, we are inclined to agree with the submissions of Mr. Kumbhakoni that the conduct of the Petitioner in the present case is such as would disentitle it to any equitable relief under Article 226 of the Constitution of India. However, we hasten to add that our decision does not rest either upon this principle or premise.

63. In this Petition, the Petitioner has not applied for any direct relief to quash and set aside notices, order or action under ULC. This is assuming that such relief could have at all been applied for in the present proceedings. On earlier two occasions, such relief had been applied for by filing Writ Petition Nos. 2032 of 2008 and 309 of 2009. The first writ petition was withdrawn with liberty to file a comprehensive petition as all relevant facts and circumstances were not disclosed therein. The second writ petition i.e. Writ Petition No. 309 of 2009 was withdrawn with liberty 'to adopt alternate remedy.' In paragraph 4.55 of the plaint in Civil Suit No. 2395 of 2009, the Respondent No. 4, who together with the Petitioner had preferred Writ Petition No. 309 of 2009 has stated that Writ Petition No. 309 of 2009 was withdrawn as there were disputed questions of fact which could not be gone into under the writ jurisdiction. In such circumstances, it would be incongruous and impermissible for the Petitioner to once again seek the same reliefs in the present proceedings. We note this aspect, in the context of a feeble submission made before us that writ of prohibition has been claimed in prayer clause (c) of this Petition, which reads thus:

"that this Hon'ble High Court be pleased to issue a Writ of Prohibition restraining the Respondent No. 3, its servants, agents, officers, subordinates from in any manner whatsoever, directly or indirectly, relying upon / giving effect to the orders / notices/ notifications issued under Chapter III of the ULC Act and disturbing / interfering with the possession of the Petitioner in respect of the Borivali Land"

64. Lest the submission remains unanswered, we must say that it is settled position in law that a writ of prohibition can be issued against a judicial or quasi judicial authority, when such Authority exceeds its jurisdiction or tries to exercise jurisdiction not vested in it. Prohibition is a writ directed to an inferior court or a tribunal forbidding it from continuing with the proceeding therein on the ground that the proceeding is without or in excess of jurisdiction. There is no difference in principle between certiorari and prohibition except in respect of the timing of the remedy. When an inferior court takes up for hearing a matter over which it has no jurisdiction, the person against whom the proceedings are taken out can move the superior court for a writ of prohibition. On the other hand, if the court hears that cause or matter and gives a decision, the party would have to move the superior court for a writ of certiorari to seek quashing of the decision on the ground of want of jurisdiction or excess of jurisdiction. Hari Vishnu Kamath vs. Ahmad Ishaque AIR 1955 SC 233 Therefore certiorari, cures and prohibition, prevents. Certiorari applies to a decision which is a fait accompli, whereas prohibition seeks to prevent the fait from becoming accompli. C. K. Allen : Law and Orders (3rd Edition) P. 217

65. Applying the aforesaid principles to the present case, it is clear that a writ of prohibition cannot be applied for in respect of notices and orders made on 16.05.2005, 31.01.2007 and action completed on 15.02.2007. As noted earlier, notice under Section 10(3) of ULC, in terms of which the subject property is deemed to have vested in the State, was issued on 16.05.2005. The notice Section 10(5) of ULC was issued on 31.01.2007. If the Petitioner or the Respondent No. 4 were of the opinion that such notices or orders or the action in pursuance of the same were without jurisdiction or in excess of jurisdiction, then it was necessary for them to take out appropriate proceedings for quashing the same within reasonable time. As held by the Supreme Court, even the Courts will invalidate an order only if right remedy is sought by the right person in the right proceedings and circumstances.

66. The Petitioner, in the aforesaid circumstances, cannot seek to achieve indirectly what it could not achieve directly by way of preferring Writ Petition No. 309 of 2009. The Petitioner, having failed to obtain appropriate relief to quash and set aside notices, orders and action under ULC, cannot fall back upon the plea that such notices, orders and action, in its opinion being 'non est, void and nullities' ought to be 'simply ignored'. The Petitioner, having failed to invalidate the notices, orders and action under ULC by resort to right remedy in the right proceedings and circumstances, cannot be permitted to urge that the Authorities under the SICA ought to have gone ahead with the implementation of rehabilitation scheme on the premise that the said property was not affected by any notices, orders or action under ULC.

67. Though the Petitioner and the Respondents have raised several other issues as adverted to earlier, in this petition we are mainly concerned with the judicial review of the impugned order dated 01.07.2012 passed by the majority members of AAIFR. We have already held that the issues as to whether exemption order dated 21.03.1981 under ULC subsists or not, whether notifications, orders and action under ULC is valid or not, whether possession of subject property has been factually taken over by the State or not, whether such taking over was in accordance with law or not, are not issues which the Authorities under the SICA could have legitimately gone into particularly in the light of the provisions contained in Section 32 of SICA and Section 42 of ULC. Accordingly, there is no necessity to pronounce upon the other issues raised by the respective parties in these proceedings. If the Authorities under the SICA could legitimately have not gone into such issues, then in testing the correctness of the impugned order made by the Authorities under SICA, surely, this Court cannot be called upon to go into the same, particularly as some of such issues involve serious factual disputes.

68. For all the aforesaid reasons, the Petition fails and the same is hereby dismissed. In the facts and circumstances of the case, we direct the Petitioner to pay costs quantified at Rs.50,000/- (Rs. Fifty Thousand only) to the Respondent Nos. 3, 10 and 12 within a period of four weeks from today.

69. After pronouncement of Judgment, the learned counsel for the Petitioner seeks continuation of earlier ad-interim order.

70. We direct that ad-interim relief which was operative till today is extended by a period of eight weeks from today.

Petition dismissed.