Reached Daily Limit?

Explore a new way of legal research!

Click Here
Delhi High CourtIndian Cases

S.N. Aggarwal vs State (Nct Of Delhi) And Ors. on 26 May 2004

Print Friendly, PDF & Email

Delhi High Court
S.N. Aggarwal vs State (Nct Of Delhi) And Ors. on 26 May, 2004
Equivalent citations: II(2005)BC599, [2006]133COMPCAS427(DELHI), 2005(81)DRJ287, 2005(117)ELT56(DEL)
Author: Mukul Mudgal
Bench: Mukul Mudgal
JUDGMENT

Mukul Mudgal, J.

1. This writ petition challenges that part of the direction of the judgment dated 23rd October, 1999 by the learned Additional Sessions Judge which upon concluding that a fraud was played upon the original plaintiff/respondent No. 2 Bank in a suit for recovery filed by the plaintiff/respondent No. 2 Bank against one Mr. Deepak Sharma, then proceeded to hold that the Bank officer had ignored the rules and norms of the Bank in failing to verify the nature of the security offered by the defendant. This judgment therefore held that the then Manager of the bank had acted in collusion with the defendant by throwing all rules and norms in the dust bin and directed the recovery of the said decretal amount from the bank official as the amount could not be recovered from the defendant. The relevant para 5 of the judgment by which the petitioner is aggrieved reads as under:-

“5. However before I part with this case I am constrained to observe that case shows a total fraud played upon the bank by the then Manager of the bank in collusion with the defendant and one Baldev Sachdeva who introduced the defendant to the plaintiff bank at the time of account opening. The account was opened on 3rd August, 1994 and on the same day a cheque of foreign bank was deposited and without clearance of the cheque this person was given Rs. 2 lakhs from the bank against this cheque on the same day without any surety or guarantor or verification. In the normal course of business while giving any overdraft or loan to a common man, the bank obtains sufficient security which is more than the amount of the loan; but in this case the document show that without any security, just on the request of the defendant a sum of Rs. 2 lakhs was given by the bank. Even the business of the defendant as that of spare parts has been entered in the pen of the bank officer in account opening form. The defendant is resident of Krishna Nagar a trans yamuna colony and he opened the account in Hauz Khas Branch of the bank, far of from his own residence. Sole purpose of opening this saving bank account in Hauz Khas branch of the plaintiff bank was to obtain a sum of Rs. 2 lakhs from the bank. Nobody opens saving bank account about 25 km away from his residence. Bank should have smelled the rat immediately. One Baldev Raj had introduced him at the time of account opening but I do not find if the bank had taken any steps against Baldev Sachdeva knew the defendant. The bank had also not verified the details of the defendants ailing brother. All rules and norms were thrown in dust bin by the manager. It is clear cut case where the bank officer had cheated the bank in collusion with the defendant. I consider that this amount of Rs. 2 lakhs and interest should be recovered from the bank officials as it cannot be recovered from the defendant. Copy of the judgment be sent to the Chairman of the bank.”
2. The petitioner challenged the aforesaid finding of recovery of the aforesaid decretal amount from the bank manager i.e. the petitioner. The bank is now seeking to recover the said amount pursuant to the above judgment from the petitioner as the account was opened when the petitioner was the Manager at Hauz Khas Branch. Since the matter related to the maintainability of the writ petition and the scope and ambit of the writ of certiorari, Mr. Subramanium, Sr. Advocate was appointed as amices curiae.

3. Mr. Subramanium, the learned amices curiae has delineated the scope of certiorari to be a writ issued by a Superior Court to an inferior court or Tribunal commanding the latter to send up the record of a particular case. He further referred to the definition of certiorari by H.W.R. Wade and C.F. Foresyth as follows:-

“Certiorari is used to bring up to into the High Court the decision of some inferior tribunal or authority in order that it may be investigated. If the decision does not pass the test, it is quashed-that is to say, it is declared completely invalid, so that one need respect it.
The undelying policy is that all inferior courts and authorities have only limited jurisdiction or powers and must be kept within their legal bounds. This is the concern of the Crown, for the sake of orderly administration of justice, but it is a private complaint which sets the crown in motion.” (Administrative Law, 8th Edn., page 591).
4. He has also referred to De Smith, Woolf and Jowell who defined the certiorari and its scope in the following words:-

” For a century or more it was generally assumed that certiorari and prohibition would issue only in respect of “judicial acts” or administrative acts in the performance of which the competent authority was under an express or implied duty to “act judicially” (or fairly). Because certiorari and prohibition were the main judicial remedies in administrative law it used to be very important to be able to identify “judicial acts” and situations where the courts could be expected to hold that there was a duty to act judicially. However, a judicial recognition that the rules of natural justice do not import an inflexible procedural code of uniform applicability and the increasing frequency with which judges fall back upon the vaguer duty to act fairly have shifted the focus of the argument from whether there are any implied procedural obligations to be complied with before a power may lawfully be exercised in determining their content in the particular context. It is now beyond doubt that certiorari and prohibition are not confined to reviewing decisions of a judicial nature. (Judicial Review of Administrative Act, 5th edition, page 702).”
5. Reliance has also been placed on the judgment of Hon’ble Supreme Court in T.C. Bassappa v. T. Nagappa, which laid down that certiorari is granted when the Court has acted without jurisdiction or in excess of its jurisdiction. It was also held that a writ of certiorari may also be issued if the Court or Tribunal acted in flagrant disregard of the rules or procedure or in violation of principles of natural justice where no particular procedure is prescribed. It has also been held that an error in the decision or determination may also be amenable to a writ of certiorari subject to the fact that the error is manifest and apparent on the face of the proceedings i.e. when it is based on clear ignorance or disregard of the provisions of law but a mere wrong decision is not amenable to a writ of certiorari.

6. Reliance has also been placed by the learned Counsel for the petitioner on the Constitution Bench judgment in Custodian of Evacuee Property v. Khan Saheb Abdul Shukoor, , which laid down the following principles:-

“(1) Certiorari will be issued for correcting errors of jurisdiction.
(2) Certiorari will also be issued when the court or tribunal acts illegally in the exercise of its undoubted jurisdiction as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.
(3) The court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of fact reached by the inferior court or tribunal, even if they be erroneous.
(4) An error in the decision or determination itself may also be amenable to a writ of certiorari if it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is patent error, which can be corrected by certiorari but not a mere wrong decision.”
7. In Syed Yakoob v. K.S. Radhkrishnan, it was held that when a question is decided without giving opportunity of hearing to a party affected, a writ of certiorari can be granted. Similarly in Harbans Lal v. Jagmohan Saran, it was held that certiorari shall issue if there is any breach of principles of natural justice.

8. The position of law laid down in Surya Dev Rai v. Ram Chander Rai, , clearly shows held that the High Court would be justified in refusing the writ of certiorari if no failure of justice has been occasioned. In the present case there is clear failure of justice as the petitioner was not given an opportunity of being heard before being saddled not only the responsibility of Rs. 2,00,000/- but also being held culpable/negligent and acting in collusion with the defendant in respect of his action as a Bank Manager which could entail adverse proceedings against him from his employer, the Bank.

9. Mr. Subramanium also relied upon the judgment in State of U.P. v. Mohd. Nooh, AIR 1958 SC 86 where the Constitution Bench of Supreme Court held that:

“11. On the authorities referred to above it appears to us that there may conceivably be cases- and the instant case is in point- where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court’s sense of fair play the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned. …..”
10. In Ram & Shyam Co. v. State of Haryana, , the Supreme Court held that the Rule which requires the exhaustion of alternate remedies in a rule of convenience and discretion rather than a rule of law and does not oust the jurisdiction of the Court. In State of U.P. v. Mohammad Nooh (supra), it was held that there was no rule with regard to certiorari as there is for mandamus, that it would lie where there is no other equally effective remedy.

11. The learned counsel for the respondent Mr. Jagat Arora has relied upon the judgment of the Supreme Court in Smt. Jatan Kanwar Golcha v. Golcha Properties Pvt. Ltd., to contend that a writ petition would not lie because it is well settled that a person aggrieved by a judgment and not a party to the suit, could prefer an appeal with the leave of the appellate court and a prejudicially affected person ought to be granted leave to appeal. Mr. Arora further submitted that this remedy of filing an appeal by an aggrieved person not a party to the original proceeding, with the leave of the appellate Court, constituted an alternate remedy which barred a direct approach to a writ court under Article 226 of the Constitution of India.

12. (a) The Corpus Jurisdiction Secundum has laid down that a writ of certiorari is a writ from a superior court to an inferior court seeking a record of a particular case and as per Wade and Forsyth (supra) a writ of certiorari is meant to question the decision of the inferior Tribunal or Authority to test its validity and the limits of jurisdiction within which the power has been exercised. The ADJ is a court inferior in hierarchy to this Court and and writ of certiorari can issue, questioning the validity of its decision.

(b) Similarly De Smith, Woolf and Jowell has also noted that a certiorari will issue where there is a duty to act judicially in functioning while performing a judicial act. It is not in dispute that learned ADJ was performing a judicial act when he passed the impugned judgment. In fact De Smith, Woolf and Jowell have gone further and held that certiorari is not confined to reviewing orders of judicial nature.

(c) The position of law laid down by Hon’ble Supreme Court in T.C. Basappa (supra) clearly is to the effect that a writ of certiorari can issue if the the Tribunal or Court has acted in violation of principles of natural justice. Similarly in Syed Yakoob (supra) the Supreme Court held that writ of certiorari can issue when a party affected by the order has not been given opportunity to be heard.

(d) In Ram & Shyam Co.(supra) it has been held that existence of an alternate remedy even if it is assumed that seeking of leave to appeal is an effective adequate remedy, is not a bar to the exercise of writ jurisdiction.

13. The Hon’ble Supreme Court in the above decisions has clearly held that certiorari was not shackled by the rule pertaining to mandamus which permitted mandamus to be exercised only when there was no equally effective remedy. In the present case the recovery directly affected the petitioner. The ADJ thought it fit not even to issue a notice to the petitioner/bank Manager while adversely commenting upon his conduct. It is not mere administrative tardiness which was found by the learned Addl. Sessions Judge but a conclusion was reached that the Bank Manager i.e. the petitioner was in collusion with the defendant. Such a conclusion by the ADJ could not only lay open the petitioner to civil action but also to criminal liability and ought not to have been arrived at without hearing the petitioner. What is undisputed is that the judgment adversely affected the petitioner and was passed without any notice to him. In this view of the matter the order is not sustainable at all. The writ of certiorari will accordingly lie and the bar of alternate remedy pleaded by Mr. Jagat Arora would not apply in view of the above position of law laid down by Hon’ble Supreme Court. In my view merely because the petitioner could have filed an appeal with the leave of the court is not a bar to entertainment of the writ petition where there was a clear violation of the principles of natural justice. In any case such an appeal with the leave of the Court is not akin to the provision of statutory appeal available to a party, constituting any statutory alternate remedy. In the present case even if the respondent’s plea/appeal is accepted it will only be with the leave of the court and such a remedy in my view does not bar seeking of a writ of certiorari in view of the position of law laid down by the Hon’ble Supreme Court in the judgments noticed above.

14. The facts of the present case are not in dispute. Whatever, if any, may have been the level of negligence of the Bank Manager, an order of the recovery of the entire decretal amount from Bank Manager without even a notice of any kind to the said Bank Manager is a clear violation of the principles of natural justice and cannot be countenanced. The merit and demerits of the stand of the Bank Manager and the culpability if any and the consequences thereof could and ought to have only been determined after giving notice to the Bank Manager and hearing his explanation. May be the learned Addl. District Judge had a good reason for arriving at the finding against the bank officials. However, such findings are meaningful and sustainable only when passed after hearing the affected party. Observance of principles of natural justice is not a mere constitutional rhetoric but must be given a practical meaning.

15. The learned Additional District Judge in my view has erred in law and occasioned a miscarriage of justice by directing the Bank to recover the decretal amount from the bank Manager straightway. In my view such a procedure is in violation of the principles of natural justice and the direction given in paragraph 5 directing the recovery of the amount to Rs. 2 lakhs and interest from the bank officials cannot be sustained. Accordingly, a writ of certiorari will issue quashing and setting aside the entire paragraph 5 of the judgment dated 23rd October, 1999 in Suit No. 278/97. It is made clear that it will be open to the Bank to recover the decretal amount from the defendants in the above suit as per the judgment dated 23rd October, 1999 minus the directions in paragraph 5. The writ petition stands disposed of with no order as to costs.

16. Before I part with the case, I must record my deep appreciation of the prompt and erudite assistance to the Court rendered by the learned amices Curiae, Shri Gopal Subramanium. The Court expects and gets able assistance from the Bar whenever it calls upon it.