Uttarakhand High Court
Life Insurance Corporation Of India vs Additional District Judge on 8 November, 2019
Author: Ramesh Ranganathan
Bench: Ramesh Ranganathan
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
M.C.C. No. 1186 of 2018
CLMA No. 13334 of 2018
M.C.C. No. 584 of 2013
CLMA No. 9972 of 2013
In
WRIT PETITION (M/S) NO. 2675 of 2001
Life Insurance Corporation of India ..........Petitioner.
Vs.
Additional District Judge, Dehradun & others. ...Respondent
Sri B.C. Pandey, learned Senior Counsel assisted by Sri Siddharth Bisht, learned counsel
for the petitioner.
Sri B.S. Parihar, learned Standing Counsel for the State of Uttarakhand.
Dated: 08.11. 2019
Ramesh Ranganathan, C.J.
This Court had, by its order in CLMA No. 13334 of 2018 dated 26.07.2019, directed notice returnable in four weeks to be issued to the respondents on the application for condonation of delay, permitted the learned counsel for the petitioner to take out notice on the respondents by registered post acknowledgement due, and to file proof of service within four weeks. Notices sent by the Registry were returned undelivered with the remark "unclaimed by addressees". During the course of hearing on 13.09.2019, Mr. B.C. Pande, learned Senior Counsel appearing on behalf of the petitioner, requested that the matter be taken up after two weeks to enable the petitioner to file an application for substituted service on the respondents by paper publication. Acceding to his request, the matter was directed to be listed after two weeks.
2. On the notice for publication, in Amar Ujala Hindi daily newspaper, having been prepared by the Registry, and on its being handed over to the counsel on 20.09.2019, service was effected, by way of publication in Amar Ujala newspaper having wide circulation in Dehradun city, on 22.09.2019; and a compliance affidavit was filed 2 on 10.10.2019. In the order dated 18.10.2019, while taking note of the fact that service by way of publication in Amar Ujala newspaper had been effected despite which the respondents had not entered appearance, this Court opined that, while it may have been justified in proceeding with the matter treating notice on the respondents as having been served, considering the long delay of more than a decade, in availing the present remedy of recall, it was appropriate to direct service of notice to be effected on the respondents once again. The District Judge, Dehradun was directed to have the notice, of the application seeking condonation of delay, served on the respondents through process server; and to file proof of service within three weeks. The matter was directed to be listed on 08.11.2019.
3. The service report dated 24.10.2019 records that notice on the second respondent was affixed on the closed door of the subject premises as the recipient was reported to be dead. With respect to the third respondent, the report states that the notice was affixed on the closed door as the recipient was not residing at the given address; and with respect to respondents 4 and 5, the report states that the notices were affixed on the closed door as the recipients were reported to have married and were not residing at the given address.
4. Sri B.C. Pande, learned Senior Counsel appearing on behalf of the petitioner, would submit that respondents 3 to 5 are the only legal heirs of the second respondent; and, since substituted service of notice by way of newspaper publication has already been made, the requirement of the notice being served on the respondents has been complied with; the report submitted by the District Judgeship of Dehradun to this Court shows that the subject premises is locked, and no one is in physical occupation thereof; and, in such circumstances, this Court may be pleased to consider the applications in M.C.C. No. 1186 of 2018, CLMA No. 13334 of 2018, M.C.C. NO. 584 of 2013 and CLMA No. 9972 of 2013; and thereafter hear Writ Petition (M/S) No. 2675 of 2001 on its merits.
35. Writ Petition (M/S) No. 2675 of 2001 was filed by the Life Insurance Corporation of India (the petitioner herein) seeking a writ of certiorari to quash the order of the Additional District Judge in Misc. Civil Appeal Nos. 21 of 1981 and 22 of 1982 dated 20.11.1982 whereby the appeals, filed by respondents 2 to 5 in the writ petition, were allowed; and the orders passed by the Estate Officer dated 16.01.1981 were set aside.
6. As is evident from a bare reading of the order of the Additional District Judge dated 20.11.1982, the Life Insurance Corporation of India is the landlord and owner of the subject building, in which respondents 2 to 5 herein (appellants before the Additional District Judge) were the tenants. The Life Insurance Corporation of India had issued a notice on 30.05.1979 terminating their tenancy and had, thereafter, moved an application before the Estate Officer, under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act seeking their eviction from the subject premises. The Estate Officer had, by his order passed under Sections 5 & 7 of the Public Premises (Eviction of Unauthorised Occupants) Act dated 16.01.1981, directed eviction of respondents 2 to 5. On their preferring appeals there-against, the Additional District Judge had set aside the order passed by the Estate Officer, and had allowed the appeals. The eviction proceedings initiated by the Life Insurance Corporation of India was set at naught by the Additional District Judge. The challenge to this order of the Additional District Judge, in Writ Petition (M/S) No. 2675 of 2001, was rejected by a learned Single Judge of this Court by his order dated 19.07.2006.
7. In his order, in Writ Petition (M/S) No. 2675 of 2001 dated 19.07.2006, a learned Single Judge of this Court observed that the list had been revised; none appeared for the petitioner to press the writ petition; and he had gone through the record and found no merit in the writ petition. The writ petition was, therefore, dismissed. The 4 said order dated 19.07.2006 was evidently passed in the absence of the learned counsel for the petitioner, and except to hold that he found no merit in the writ petition, the said order does not assign any reasons why the learned Single Judge did not find any merit necessitating dismissal of the said writ petition.
8. MCC No. 584 of 2013 was filed by the Life Insurance Corporation of India requesting this Court to recall the order passed in Writ Petition (M/S) No. 2675 of 2001 dated 19.07.2006, whereby the writ petition was dismissed. CLMA No. 9972 of 2013 was filed by them seeking condonation of the delay of 2580 days in filing MCC No. 584 of 2013.
9. In his order, in MCC No. 584 of 2013 and CLMA No. 9972 of 2013 in Writ Petition (M/S) No. 2675 of 2001 dated 16.09.2013, the learned Single Judge observed that the grounds shown for the delay were misconceived; the counsel on behalf of the petitioner had filed his Vakalatnama on 28.12.2002; the Court had directed that the petition be listed, showing the name of the learned counsel for the petitioner, on 26.02.2003; the writ petition was dismissed for want of prosecution on 19.07.2006 for which a recall application had been filed after a long delay of 2580 days; the reasons assigned for recalling the order was that the Regional Office, Dehradun came to know in 2013 about the dismissal of the writ petition, after receiving the record from the Regional Office at Lucknow; this contention could not be accepted for the simple reason that, since the petitioner had engaged the counsel in the year 2002 itself, thereafter it was the duty of the Company to pursue its case through counsel; it was the fault of the Company in prosecuting the case; the delay was callous and no explanation had been given in the affidavit indicating who made an inspection of the record, and when a copy of the order was obtained from Court; in so far as the ground that the counsel could not mark the case from the cause list is concerned, no affidavit of the Clerk of the Counsel had been filed; the present 5 counsel, who had filed the present restoration application, was not the counsel at that time; and he found no ground to recall the order passed by the Court. The learned Single Judge dismissed the Delay Condonation Application as well as the restoration application by his order dated 16.09.2013.
10. MCC No. 1186 of 2018 is filed by the Life Insurance Corporation of India to recall the order passed by this Court, in MCC No. 584 of 2013 and CLMA No. 9972 of 2013 in Writ Petition (M/S) No. 2675 of 2001 dated 16.09.2013. CLMA No. 13334 of 2018 is filed to condone the delay of 1777 days in filing MCC No. 1186 of 2018. In the affidavit filed in support thereof, the Manager (Legal) of the petitioner-Corporation states that the petitioner had moved a restoration application to recall the order dated 19.07.2006; the said application was dismissed by the Court, by its order dated 16.09.2013, holding that there was an inordinate delay in filing the restoration application, and the delay was not properly explained; the earlier counsel, who had been engaged to appear in the aforesaid writ petition, had failed to file the restoration application; the Corporation was dealing with more than 100 cases, under the Public Premises Eviction Act, in the State of Uttarakhand when the restoration application was dismissed on 16.09.2013; in view of the difficulties in other cases, the writ petition was left unmarked by the officials of the petitioner-Corporation; it is only when the list of cases pending before the High Court was prepared by the petitioner-Corporation, did it come to light that the said writ petition was dismissed on 19.07.2006, and the application to restore the writ petition had also been dismissed on 16.09.2013; the petitioner-Corporation thereafter sought legal advise from its counsel regarding restoration of the writ petition; legal advise was given for an application to be filed to recall the order dated 16.09.2013, by which the restoration application of the petitioner-Corporation in M.C.C. No. 584 of 2013 was dismissed by this Court; sanction, to file a recall application, was received by the 6 counsel on 21.08.2018; and an application was, thereafter, filed seeking recall of the order dated 16.09.2013.
11. On facts, it is stated that sixty cases of a similar nature as the present case, relating to the very same building, i.e. the Bharat Estate Building, New Cannaught Place, Dehradun, were allowed by this Court recently; and therefore, in the interest of justice, the delay in filing the recall application may be condoned, and the order dated 16.09.2013 as well as the order dated 19.07.2006 may be recalled.
12. On merits, the case of the petitioner-Corporation is that the respondents were in unauthorized occupation of a part of Bharat Estate Building, New Cannaught Place, Dehradun; the building belongs to the petitioner herein; the learned District Judge had allowed the appeal preferred by respondents 2 to 5 following the law laid down by the Bombay High Court in Elliot Waud And Hill Pvt. Ltd. vs. Life Insurance Corporation (judgment in Misc. Petition No. 458 of 1979 dated 06.03.1981), wherein it was held that the Public Premises (Eviction of Unauthorised of Unauthorised Occupants) Act, 1971 suffered from lack of legislative competence in Parliament to make such a law which was referable to Entry-18 of List-II of the Seventh Schedule to the Constitution of India; and the provisions of the said Act could not be made applicable to the subject building, in view of the provisions of the Uttarakhand Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972 to the contrary.
13. Sri B.C. Pandey, learned Senior Counsel appearing on behalf of the petitioner, would contend that, after the judgment of the Bombay High Court, the Supreme Court had, in Accountant and Secretarial vs. Union of India and others : AIR 1988 SC 1708, held that the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 was referable to Entries 6, 7 and 13 of List-III of the Seventh Schedule to the Constitution; consequently, in view of Article 254(1) of the Constitution, subsequent parliamentary legislation would prevail, and the earlier State enactment would be void to the extent it 7 is repugnant to the Central enactment; and, in the light of the law laid down by the Supreme Court in Ashoka Marketing Ltd. and another vs. Punjab National Bank and others : (1990) 4 SCC 406, the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 would operate even for those establishments which may, otherwise, have fallen within the ambit of the State Rent Control legislation.
14. These legal contentions, urged on behalf of the petitioner-Corporation by Sri B.C. Pande, learned Senior Counsel, on the merits of the order passed by the Additional District Judge, would necessitate detailed examination in case the aforesaid applications are allowed, and Writ Petition (M/S) No. 2675 of 2001 is restored to file. While considering the present applications, we must draw a distinction between a statutory Corporation, established in public interest by a law made by Parliament, and its officers; and consider whether the Corporation should be deprived of its valuable property for the negligence of its officers in diligently prosecuting the lis.
15. It is useful in this context to refer to the relevant provisions of the Life Insurance Corporation Act, 1956 (for short the '1956 Act'). Section 3 thereof relates to 'Establishment and incorporation of the Life Insurance Corporation of India' and under sub-Section (1) thereof, with effect from such date as the Central Government may by notification in the Official Gazette appoint, there shall be established a Corporation called the Life Insurance Corporation of India. A notification was issued by the Central Government on 30.08.1956, from which date the LIC of India came to be established. Section 3(2) of the 1956 Act stipulates that the Corporation shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of the 1956 Act, to acquire, hold and dispose of property, and may by its name sue and be sued.
16. Under Section 5(1) of the 1956 Act, the paid-up equity capital of the Corporation shall be one hundred crore of rupees 8 provided by the Central Government after due appropriation made by Parliament by law for the purpose. Section 6 of the 1956 Act relates to functions of the Corporation and under sub-Section (1) thereof, subject to the rules, if any, made by the Central Government in this behalf, it shall be the general duty of the Corporation to carry on life insurance business, whether in or outside India, and the Corporation shall so exercise its powers under the 1956 Act as to secure that life insurance business is developed to the best advantage of the community.
17. Section 6(2)(c) of the 1956 Act confers power on the Corporation to acquire, hold and dispose of any property for the purpose of its business, and Section 6(2)(i) confers power on the Corporation to do all such things as may be incidental or conducive to the proper exercise of any of the powers of the Corporation. Section 7 of the 1956 Act relates to transfer of assets and liabilities of existing insurers on controlled business, and under sub-Section (1) thereof, on the appointed day (1st September 1996), there shall be vested in the Corporation all the assets and liabilities appertaining to the controlled business of all insurers. Section 21 of the 1956 Act requires the Corporation to be guided by the directions of the Central Government in the discharge of its functions under the Act.
18. Section 22(1) of the 1956 Act confers power on the Corporation to entrust the superintendence and direction of the affairs and business of a zonal office to a person, whether a member or not, who shall be known as the Zonal Manager; and the Zonal Manager shall perform all such functions of the Corporation as may be delegated to him with respect to the area within the jurisdiction of the zonal office. Section 23 of the 1956 Act relates to the staff of the corporation, and under sub-Section (1) thereof, for the purpose of enabling it to discharge its functions under this Act, the Corporation may employ such number of persons as it thinks fit.
919. Section 25 of the 1956 Act relates to audit and, under sub-Section (1) thereof, the accounts of the Corporation shall be audited by auditors. Section 27 obligates the Corporation, as soon as may be, after the end of each financial year, to prepare and submit to the Central Government, in such form as may be prescribed, a report giving an account of its activities during the previous financial year, and the report shall also give an account of the activities, if any, which are likely to be undertaken by the Corporation in the next financial year. Section 28 of the 1956 Act provides for the manner in which the surplus from life insurance business is to be utilized and, in terms thereof, ninety per cent or more of such surplus, as the Central Government may approve, shall be allocated to or reserved for the life insurance policyholders of the Corporation. Section 29 requires the Central Government to cause a report of the auditors under Section 25, and the report giving an account of the activities of the Corporation under Section 27, to be laid before both Houses of Parliament as soon as may be after each such report is received by the Central Government.
20. In terms of Section 3(2) of the 1956 Act, the Life Insurance Corporation of India is a body corporate with power to hold and dispose of property. It is for the purpose of enabling it to discharge its functions under the Act, that Section 23 of the 1956 Act enables the Life Insurance Corporation to employ such number of persons as it thinks fit. As the Life Insurance Corporation is a distinct legal entity having perpetual succession and employs officers only to enable it to discharge the functions under the Act, it is difficult to hold that the Life Insurance Corporation of India should be deprived of its right to hold its property for all times to come, for the indifference exhibited by its officers. As the duty of the Corporation is to carry on the business of life insurance and to exercise its powers to ensure that the life insurance business is developed to the best advantage of the community, and not less than 90% of its surplus is required to be allocated or reserved for life-insurance policy holders (i.e. the public 10 at large), the question which also necessitates examination is whether, in the light of the order passed in Writ Petition (M/S) No. 2675 of 2001 dated 19.07.2006 (recall of which is sought) the petitioner, (a statutory Corporation created under a law made by Parliament, and a juristic person), for the fault of its officers and employees, should be disabled from reclaiming possession of the subject premises forever, though it is admittedly the owner of the building, even without their challenge to the order of the Additional District Judge dated 20.11.1982, (allowing the appeal preferred by respondents 2 to 5 and setting aside the order of their eviction passed by the Estates Officer), being adjudicated on its merits.
21. While the officers of the Corporation have, no doubt, been grossly negligent in not pursuing the matter diligently, a statutory Corporation, which is a juristic person created in larger public interest of providing life insurance benefits to the general public, cannot be made to suffer the loss of its valuable property (said to be presently worth nearly Rupees One Crore) for no fault of theirs, but for the fault of its officials in repeatedly not approaching this Court on time. Public property cannot be permitted to be usurped by those in possession thereof as tenants, for the indifference and apathy of public servants; and, while the officers involved must be sternly dealt with, private individuals cannot be permitted to knock away valuable public property as that would contravene larger public interest. For their failure to diligently prosecute the lis, disciplinary action should be taken against the concerned officers, instead of penalizing the Life Insurance Corporation by depriving it of its valuable property.
22. The delay in seeking restoration of the earlier recall application is no doubt inordinate, as the delay is of 1777 days. The reasons furnished, in the affidavit filed in support of the application seeking condonation of delay, is also perfunctory and leave much to be desired. The fact, however, remains that the jurisdiction which the High Court exercises under Article 226 / 227 of the Constitution of 11 India is in larger public interest, and safeguarding public property owned by a statutory Corporation is undoubtedly in public interest. While the inordinate delay cannot be ignored, this Court must ever remain conscious of the consequence of its exercising restraint, as that would only result in the petitioner-Corporation losing its right to claim possession of the subject property, of which it is the owner, for all times to come.
23. While the delay is, no doubt, for a considerable length of time, respondents 3 to 5 would not suffer irreparable injury or substantial prejudice if the delay is condoned, for they have, on account of the delay on the part of the officers of the LIC in prosecuting the case diligently, retained possession of the subject premises for the past more than four decades at the measly rent stipulated several decades ago. The subject property situated in the midst of Dehradun city, the capital of the State of Uttarakhand, would undoubtedly fetch a huge amount of rent which, but for the indifference exhibited by the officers of the LIC, would have been payable by the occupants of the premises such as respondents 2 to 5 to the petitioner-LIC. Having benefitted, by the failure of the officers of the LIC to prosecute the litigation diligently, respondents 2 to 5 can hardly complain of any prejudice being caused to them if the delay were to be condoned.
24. As the subject property is said to be worth nearly Rupees one crore, I see no justification in depriving the statutory Corporation of its judicial remedies to seek enforcement of its rights to regain possession of its valuable property, for the fault of its officers and employees in not diligently prosecuting the lis, and instead consider it appropriate to condone the delay on terms.
25. In the larger public interest of safeguarding public property, of which the Life Insurance Corporation of India is admittedly the owner, I consider it appropriate to condone the delay of 1777 days in filing MCC No. 1186 of 2018 and to allow CLMA No. 12 1334 of 2018; to recall the order passed by this Court in MCC No. 584 of 2013 and CLMA No. 9972 of 2013 in Writ Petition (M/S) No. 2675 of 2001 dated 16.09.2013, since the learned Judge, while passing the order dated 16.09.2013, failed to notice the distinction between the statutory corporation - a juristic person under the 1956 Act and its officers in considering whether or not to condone the delay in CLMA No. 9972 of 2013; and to condone the delay of 2580 days in filing MCC No. 584 of 2013 subject to the following terms :
(A) The petitioner-Corporation shall pay costs of Rs. 1 lac which, ordinarily, would have been directed to be paid to the respondents. Since the whereabouts of respondents 3 to 5 is not known, they have not entered appearance through counsel despite substituted service by way of paper publication, and as the subject premises is stated to be under lock and key, I direct the petitioner-Corporation, instead, to pay the said costs of Rs.
1.00 lac to the Uttarakhand State Legal Services Authority within six weeks from today.
(B) The petitioner-Corporation shall identify those officials, who were grossly negligent in discharging their duties of diligently prosecuting the lis, and who were responsible for the inordinate delay in filing appropriate applications before this Court, and initiate disciplinary action against them, besides recovering the costs of Rs. 1.00 lac, which the Corporation has been directed to pay, from them.
26. On filing proof of payment of costs of Rs. 1.00 lacs, as directed hereinabove, to the Uttarakhand State Legal Services Authority, CLMA No. 1334 of 2018, MCC No. 1186 of 2018 and CLMA No. 9972 of 2013 in Writ Petition (M/S) No. 2675 of 2001 shall stand allowed.
27. List the Application (MCC No. 584 of 2013) after six weeks, within which period the petitioner-Corporation shall file proof 13 of payment of costs as directed hereinabove. They shall also file an affidavit furnishing details of the steps taken by them to identify the officers responsible for the inordinate delay, and the details of the disciplinary action initiated against them by the Corporation.
28. The Applications (CLMA NO. 13334 of 2018, MCC No. 1186 of 2018 and CLMA No. 9972 of 2013) are disposed of accordingly.
29. Let a certified copy of this order be issued to the parties, on payment of the prescribed charges, by 15th November, 2019.
(Ramesh Ranganathan, C.J.) 08.11.2019 Rathour