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1999 (8) TMI 981

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..... participation of foreign and Indian experts for examining various aspects of the matter relating to establishment of Ombudsman institution in this country; (ii) Pass an appropriate writ, order or orders directing that the institutions and organisations of the Comptroller and Auditor General of India, Chief Vigilance Commissioner, and the Central Bureau of Investigation should indicate to the Hon'ble Court the specific steps which they will take for effectively overcoming any inadequacies and weaknesses in the operations of these important institutions which presently hamper effective and efficacious check on prevalence of corrupt practices in the country and to curb corruption at all political and bureaucratic levels; (iii) Pass an appropriate writ, order or orders appointing a Commission or Commissioner to urgently undertake comprehensive study of the present inadequacies in the Prevention of Corruption Act 1947 for making specific recommendations to strengthen this enactment for achieving the objective of curbing and checking corruption at the political and bureaucratic levels in the country. (iv) Pass an appropriate writ, order or orders directing the State Governm .....

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..... possible for us to take any action on the press report. On our suggestion the Solicitor General takes notice of this news item and states that he would have the matter examined in the Ministry concerned and shall file an affidavit of the Secretary concerned in the Ministry reacting to this news item. He may file the affidavit within the period of eight weeks. The Writ Petition is adjourned to 13.10.95. The petition, thus, was diverted towards Captain Satish Sharma who was, at that time, Minister of State for Petroleum and Natural Gas in the Central Government. By Judgment dated September 25, 1996, [(1996) 6 SCC 530] all the 15 petrol outlets, allotted by the Minister to various persons out of his discretionary quota, were cancelled and the following directions were issued to Captain Satish Sharma (petitioner) :- Capt. Satish Sharma shall show-cause within two weeks why a direction be not issued to the appropriate police authority to register a case and initiate prosecution against him for criminal breach of trust or any other offence under law. He shall further show-cause within the said period why he should not, in addition, be made liable to pay damages for his mala fide .....

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..... etition. On notice being served on Mr. H.D. Shourie, he filed his reply to the Review Petition on 21.2.1997. The office report dated 30th June, 1997 is to the following effect : In the matter above-mentioned, this Court on 28th January, 1997 directed to issue notice of the Review Petition. Accordingly, notice was issued to both the respondents and hence the service of notice is complete as both the respondents are represented by Mr. H.D. Shourie, Respondent in person and Ms. Anil Katiyar, Advocate for Respondent No.2. Mr. Ashok K. Mahajan, Advocate has filed Application for impleadment on behalf of Mr. Arun K.Gupta resident of Kothi No. 68, Sector VIIIA, Chandigarh and also seeking stay of further investigation by CBI during pendency of Review Petition. Since the said Application was not served on other side, a letter dated 4th March, 1997 and another letter dated 30th June, 1997 was issued to Mr. Ashok K. Mahajan to serve it on Mr. H.D. Shourie, Respondent No. 1 and Mrs. Anil Katiyar representing Respondent No. 2 and Mr. P.H. Parekh, Advocate. He was also requested to furnish proof of service but he has not furnished the same so far. Further, Mrs. Sandhya Goswa .....

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..... e time it is directed that the matter may be listed on a non- miscellaneous day. The Registrar Judicial will take appropriate directions from Hon'ble the Chief Justice for listing the matter before an appropriate bench. It was thereafter that the matter was placed before this Bench. We have heard learned counsel for the parties. We have also heard Mr.Gopal Subramaniam, Senior Counsel, (Amicus Curiae). Mr. K.Parasaran, learned Senior Counsel for the applicant, has contended that since the applicant was Minister of State for Petroleum in the Central Government and it was in his capacity as an essential component of the Central Government, that he had made allotment of Petrol Pumps out of his discretionary quota, his act in making the allotments shall be treated to be the act of the Central Government with the result that even if such allotments were cancelled on the ground of arbitrary exercise of power, the Court could not have legally directed exemplary damages to be paid by the Government to itself. He also contended that the jurisdiction of this Court under Article 32 was limited, unlike the vast jurisdiction of the High Courts under Article 226 of the Constitution and .....

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..... tion. The extent of the Executive power is indicated in Article 73. The next Article, namely, Article 74 provides for a Council of Ministers to aid and advise the President. Article 75(3) speaks of the collective responsibility of the Cabinet which provides that the Cabinet shall be responsible to Parliament. Article 77 provides for the conduct of business of the Government of India and clause (3) thereof empowers the President to make rules for the convenient transaction of its business and for allocation amongst Ministers of the said business. It is in exercise of this power that rules for allocation of business have been framed under which various divisions of work to different Ministries have been indicated. Distribution of petroleum products, including petroleum outlets, is also one of the subjects which has been allocated to the Ministry of Petroleum. The functions of the Govt. are carried out in the name of the President by Ministers appointed by him on the advice of the Prime Minister. The Executive consists of : (a) Prime Minister and Ministers who are members of the Cabinet; (b) Ministers who are not of Cabinet rank; (c) The Civil Service. Since the functio .....

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..... . The President has thus been made a formal or constitutional head of the executive and the real executive powers are vested in the Ministers or the Cabinet. The same provisions obtain in regard to the Govt. of States; the Governor ... occupies the position of the head of the executive in the State but it is virtually the council of Ministers in each State that carries on the executive Govt. In the Indian Constitution, therefore, we have the same system of parliamentary executive as in England and the Council of Ministers consisting, as it does, of the members of the legislature is, like the British Cabinet, `a hyphen which joins, a buckle which fastens the legislative part of the State to the executive part'. The Cabinet enjoying, as it does, a majority in the legislature concentrates in itself the virtual control of both legislative and executive functions; and as the Ministers constituting the Cabinet are presumably agreed on fundamentals and act on the principle of collective responsibility, the most important questions of policy are all formulated by them. This decision was referred to in State of M.P. vs. Thakur Bharat Singh, 1967 (2) SCR 454 = AIR 1967 SC 1170, where .....

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..... Edition, on page 2037 has, after a critical analysis of the Judgment, extracted the following principles on the business of the Government of India and allocation of business among Ministers :- (i) The expressions business of the Government of India and the business of the Government of the State in Arts. 77(3) and 166(3) includes all executive business . (j) Where the Constitution required the satisfaction of the President or the Governor for the exercise of any power or function by the President or the Governor as the case may be ... the satifaction required by the Constitution is not the personal satisfaction of the President or the Governor but is the satisfaction of the President or of the Governor in the constitutional sense under the Cabinet system of government .... It is the satisfaction of the Council of Ministers on whose aid and advice the President or the Governor generally exercises all his powers and functions.... Arts. 77(3) and 166(3) provide that the President or the Governor shall make rules for the more convenient transaction of the business of government and the allocation of functions among Ministers. Rules of business and the allocation of fun .....

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..... oner in exercise of his discretionary quota may now be considered. It is contended by Mr. K. Parasaran that under the scheme of the Constitution, any order passed by the Minister shall be treated to be an order passed by the Cabinet which is collectively answerable to the House of the People under Article 75 (3). It is contended that an order passed by the Minister individually in favour of various persons to whom petrol outlets were allotted cannot be questioned as it was not raised before the House of the People to whom the Cabinet, as a whole, was answerable. The whole series of allotments made by the petitioner could then have been debated before the House and since this was not done, it is not open to question those allotments in this Court by a writ petition and the proceedings were meant only to embarrass and harass the Cabinet. It is also contended that the petitioner had the jurisdiction to make allotments of petrol outlets and the discretionary quota allowed to him was utilised for that purpose. Since it is not the case that the jurisdiction was, in any way, exceeded or that allotments were made in excess of the quota or for monetary consideration, the same need not have .....

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..... a political concept. The country is governed by the party in power on the basis of the policies adopted and laid down by it in the Cabinet Meeting. Collective Responsibility has two meanings: The first meaning which can legitimately be ascribed to it is that all members of a Govt. are unanimous in supprot of its policies and would exhibit that unanimity on public occasions although while formulating the policies, they might have expressed a different view in the meeting of the Cabinet. The other meaning is that Ministers, who had an opportunity to speak for or against the policies in the Cabinet are thereby personally and morally responsible for its success and failure. In the British Constitution Politics 5th Edition by J. Harvey and L. Bather, it is said as under : Except when a minister explains the reasons for his resignation, parliament hears nothing of the Cabinet's current deliberations. These remain secret, and only decisions as a whole are reported to the House when policy is announced. Any leakage of divergent views held by ministers would, as during Queen Victoria's reign, seriously weaken the Government. In its decisions, 'the Cabinet is a unity t .....

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..... en about the responsibility of ministers. The discussion can easily become confused because of the different meanings that are attached to the word responsible . Collective responsibility will be discussed below, and the first task is to consider whether there is any separate element of individual responsibility. The most common political meaning is that a certain minister will answer parliamentary questions on a given subject. A second sense arises when those in political circles appreciate that a particular policy is largely the idea of the minister, rather than the traditional policy of the party in power, and they may single out the minister for attack. For instance, in 1903-05 Wyndham was purusing his land purchase schemes for Ireland in a manner which alarmed many Conservatives and would certainly have been unlikely under any other Chief Secretary. A third sense is simply that a minister is responsible even if a policy is the work of the Cabinet as a whole but his colleagues choose to place the burden upon him. Thus Sir Samuel Hoare thought he was acting in accordance with the views of the ministry in concluding the Hoare-Lavel Pact and his decisions were subsequently endors .....

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..... (2), Para 422]. Learned counsel for the petitioner contended that neither could the Court award exemplary damages against the petitioner nor could it order any C.B.I. investigation as the petitioner in making the allotment of petrol outlets had not committed any offence, much less an offence of breach of trust. It is also contended that the petitioner while making allotments out of his discretionary quota available to him as Minister of State for Petroleum, had not committed the tort of misfeasance in public office and, therefore, he was not liable to pay any damages. Mr. K.Parasaran also argued that exemplary damages under law can be awarded in addition to the damages for the tort alleged to have been committed but where not even damages have been awarded, there is no question of awarding exemplary damages. It is also contended that action for tort could have been initiated only in the field of private law by instituting a suit in a proper Civil Court and not under the public law, namely, in proceedings initiated under Article 32 of the Constitution particularly as intricate questions of fact were involved. Since the question whether the action could have been initiated un .....

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..... individual citizens of the State, pertain to public law , such as Constitutional and Administrative Law, in contradistinction to private law fields which are those branches of law which deal with the rights and liabilities of private individuals in relation to one another. The distinction between private law and public law was noticed by this Court in Life Insurance Corporation of India vs. Escorts Limited Ors., 1985 Supp. (3) SCR 909 = (1986) 1 SCC 264 = AIR 1986 SC 1370, in which the Court observed as under:- Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. Public Law fi .....

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..... a, (1978) 1 SCC 248 = 1978 (2) SCR 621 = AIR 1978 SC 597; Ajay Hasia vs. Khalid Mujib Sehravardi, (1981) 1 SCC 722 = 1981 (2) SCR 79 = AIR 1981 SC 487; R.D. Shetty vs. The International Airport Authority of India, 1979 (3) SCR 1014 = (1979) 3 SCC 489 = AIR 1979 SC 1628, as also Dwarka Das Marfatia Sons vs. Board of Trustees of the Port of Bombay , (1989) 3 SCC 293 = 1989 (2) SCR 751 = AIR 1989 SC 1642. Public law remedies have also been extended by this Court to the realm of tort. In exercise of jurisdiction under Article 32 of the Constitution, this Court has awarded compensation to the petitioners who suffered personal injuries at the hands of the officers of the Government and the causing of injuries which amounted to tortious act was compensated by this Court. In Rudul Sah vs. State of Bihar, 1983 (3) SCR 508 = (1983) 4 SCC 141 = AIR 1983 SC 1086, a Three-Judge Bench of this Court awarded compensation (Rs.30,000/-) for illegal detention. In Bhim Singh vs. State of Jammu Kashmir, (1985) 4 SCC 677 = AIR 1986 SC 494, a sum of ₹ 50,000/- was awarded to the petitioner for the illegal detention of the petitioner by the State authorities. The compensation which was dir .....

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..... for which there is no dearth of authority and the law of misfeasance in discharge of public duty having marched ahead, there is no rationale for the proposition that even if the officer is liable the State cannot be sued. The liability of the officer personally was not doubted even in Viscount Canterbury. But the Crown was held immune on doctrine of sovereign immunity. Since the doctrine has become outdated and sovereignty now vests in the people, the State cannot claim any immunity and if a suit is maintainable against the officer personally, then there is no reason to hold that it would not be maintainable against the State. The difference between public and private law was again examined by this Court in Nilabati Behera vs. State of Orissa (supra). Dr. Anand, J. (as His Lordship then was) in his separate concurring Judgment laid down as under:-.lm15 34. The public law proceedings serve a different purpose than the private law proceedings. The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by this Court or under Article 226 by the High Courts, for established infringement of the indefeasible right guaranteed under Article 21 of the Con .....

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..... ted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible. The decisions of this Court in the line of cases starting with Rudul Sah vs. State of Bihar granted monetary relief to the victims for deprivation of their fundamental rights in proceedings through petitions filed under Article 32 or 226 of the Constitution of India, notwithstanding the rights available under the civil law to the aggrieved party where the courts found that grant of such relief was warranted. It is a sound policy to punish the wrongdoer and it is in that spirit that the courts have moulded the relief by granting compensation to the victims in exercise of their writ jurisdiction. In doing so the courts take into account not only the interest of the applicant and the respondent but also the interests of the public as a whole with a view to ensure that public bodies or officials do not act unlawfully and do perform their public duties properly particularly where the fundamental right of a citizen under Article 21 is concerned. Law is in the process of .....

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..... and provides relief against a breach of the fundamental right already committed vide Bandhua Mukti Morcha case. If the court were powerless to issue any direction, order or writ in cases where a fundamental right has already been violated, Article 32 would be robbed of all its efficacy, because then the situatiuon would be that if a fundamental right is threatened to be violated, the court can injunct such violation but if the violator is quick enough to take action infringing the fundamental right, he would escape from the net of Article 32. That would, to a large extent, emasculate the fundamental right guaranteed under Article 32 and render it impotent and futile. We must, therefore, hold that Article 32 is not powerless to assist a person when he finds that his fundamental right has been violated. He can in that event seek remedial assistance under Article 32. The power of the court to grant such remedial relief may include the power to award compensation in appropriate cases. We are deliberately using the words in appropriate cases because we must make it clear that it is not in every case where there is a breach of a fundamental right committed by the violator that compens .....

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..... ecided by the Courts in England, we may consider the question from that angle and in that light. In England, the position is not much different. In 1977, when certain procedural changes were brought about on the recommendations of the Law Commission and Order 53 was introduced, it became possible for a litigant to make an application for judicial review and claim, in such application, damages also against public bodies. Under the remedy of judicial review, it is possible to review not only the merits of the decision in respect of which the application for judicial review is made, but the whole decision-making process also. A decision of inferior court or a public authority could be quashed by an order of Certiorari made on an application for judicial review where that court or authority acted without jurisdiction or exceeded its jurisdiction or failed to comply with the rules of natural justice or where there was an error of law apparent on the face of the record or the decision was unreasonable in the Wednesbury sense (that is, no reasonable person could have come to the conclusion to which the public authority had arrived at). In view of the Supreme Court Act, 1981, read with .....

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..... not only against an inferior court or tribunal, but also against persons or bodies which perform public duties or functions. Thus, judicial review would lie against persons and bodies carrying out public functions. But it would not lie against a person or body carrying out private law and not public law functions. In such cases, the proper remedy is by way of action for a declaration and, if necessary, an injunction. There is also a self-imposed restriction on the exercise of power of judicial review which is to the effect that the courts would not normally grant judicial review where there is available another avenue of appeal or remedy. In R. v. Epping Harlow General Commissioners 1983 (3) All ERs 257, the court observed : It is a cardinal principle that, save in the most exceptional circumstances, the jurisdiction to grant judicial review will not be exercised where other remedies are available and have not been used. On an application for judicial review, the Court has power to award damages to the applicant provided the claim for damages has been included in the statement made in support of the application for leave to apply for judicial review. But the relief .....

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..... Raleigh v. Goschen (1898) 1 Ch.73); only the actual wrongdoer could be sued in his personal capacity. In practice, the action against the officer concerned was defended by the Treasury Solicitor and the judgment was satisfied by the Treasury as a matter of grace. Difficulty was, however, felt when the wrongdoer was not identifiable. (See: Royster v. Cavey (1947) KB 204). The increased activities of the Crown have now made it the largest employer of men and the largest occupier of property. The above system was, therefore, proving wholly inadequate and the law needed a change which was brought about by the Crown Proceedings Act, 1947. (See: Home Office v. Dorset Yacht Co. (1970) AC 1004 = (1970) 2 All ER 294 [HL]). Nothing in the Act authorises proceedings in tort against the Crown in its private capacity (s.40), or affects powers or authorities exercisable by virtue of the prerogative of the Crown or conferred upon the Crown by statute (s.11[1]). Subject to this, the Act provides that the Crown shall be subject to all those liabilities in tort to which, if it were a person of full age and capacity, it would be subject (1) in respect of torts committed by its servants or agents, pro .....

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..... ite of the above provision, the Supreme Court of Calcutta in The Peninsular Oriental Steamship Navigation Co. vs. The Secretary of State for India 1868-69 Bombay H.C. Reports Vol. V. Appendix-A P.1 held that the rule of immunity was applied by drawing a distinction by the acts done by the public servants in the delegated exercise of sovereign powers and acts done by them in the conduct of other activities. Peacock, CJ, who delivered the judgment observed : It is clear that the East India Company would not have been liable for any act done by any of its officers or soldiers in carrying on hostilities, or for the act of any of its naval officers in seizing as prize property of a subject, under the supposition that it was the property of an enemey, nor for any act done by a military or naval officer or by any soldier or sailor, whilst engaged in military or naval duty, nor for any acts of any of its officers or servants in the exercise of judicial functions. This decision was followed by the Calcutta High Court in Nobin Chunder Dey v. Secretary of State for India ILR (1875-76) 1 Cal. 11, but the Madras High Court in Secretary of State for Indian Council vs. Hari Bhanji Anr .....

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..... es every one to look after himself to his best advantage has yielded place to the ideal of a welfare State - which implies that the State takes care of those who are unable to help themselves. The Commission after referring to various provisions in the legislation of other countries also observed: The old distinction between sovereign and non-sovereign functions or governmental and non-governmental functions should no longer be invoked to determine the liability of the State. As Professor Friendman observes: 'It is now increasingly necessary to abandon the lingering fiction of a legally indivisible State, and of a feudal conception of the Crown, and to substitute for it the principle of legal liability where the State, either directly or through incorporated public authorities engages in activities of a commercial, industrial or managerial character. The proper test is not an impracticable distinction between governmental and non-governmental functions, but the nature and form of the activitiy in question.' In State of Rajasthan vs. Mst. Vidhyawati AIR 1962 SC 933, a claim for damages was made by the dependants of a person who died in an accident caused by the ne .....

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..... perly characterised as sovereign powers, and so, there is no difficulty in holding that the act which gave rise to the present claim for damages has been committed by the employees of the respondent during the course of their employment; but the employment in question being of the category which can claim the special characteristic of sovereign power, the claim cannot be sustained. The earlier decision of this Court in Mst. Vidyavati's case (supra) was distinguished on the ground that it was based on a tortious liability not arising from the exercise of Sovereign power. The decision in Kasturilal's case (supra), has, apart from being criticised (See: Constitutional Law of India by Seervai), not been followed by this Court in subsequent decisions and, therefore, much of its efficacy as a binding precedent has been eroded. Reference in this connection may be made to the decisions of this Court in State of Gujarat vs. Memon Mahomed Haji Hasan AIR 1967 SC 1885 and Smt. Basava Kom Dyamogouda Patil vs. State of Mysore AIR 1977 SC 1749 and a number of other cases, including those dealt with under Article 32 of the Constitution by this Court in all of which compensation and dam .....

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..... tructural change in the society. No legal or political system today can place the State above law as it is unjust and unfair for a citizen to be deprived of his property illegally by negligent act of officers of the State without any remedy. From sincerity, efficiency and dignity of State as a juristic person, propounded in Nineteenth Century as sound sociological basis for State immunity the circle has gone round and the emphasis now is more on liberty, equality and the rule of law. The modern social thinking of progressive societies and the judicial approach is to do away with archaic State protection and place the State or the Government at par with any other juristic legal entity. Any watertight compartmentalisation of the functions of the State as sovereign and non-sovereign or governmental or non-governmental is not sound. It is contrary to modern jurisprudential thinking. The need of the State to have extraordinary powers cannot be doubted. But with the conceptual change of statutory power being statutory duty for sake of society and the people the claim of a common man or ordinary citizen cannot be thrown out merely because it was done by an officer of the State even tho .....

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..... he repression of crime, carrying on of war, the making of treaties of peace and other consequential functions, were approved. For the reasons stated above, we are of the view that the allotment of petrol outlets by the petitioner cannot be treated as act of the State and the rule of immunity invoked by Mr. Parasaran cannot be accepted. The next submission of Mr. Parasaran relates to the tort of misfeasance in public office which has been held to have been committed by the petitioner and for which he has been directed to pay ₹ 50 lakhs as exemplary damages. It is contended by Mr.Parasaran that the ingredients of the tort of misfeasance in public office were not made out; the rule of exemplary damages was not properly invoked; and in any case, the amount of ₹ 50 lakhs was arbitrarily fixed without there being any rational basis on which it was computed. It was also contended that the persons who suffered injury on account of tort of misfeasance are neither identifiable nor have they been specified and in the absence of this vital factor, no finding could have been recorded about the commission of tort of misfeasance. With regard to award of exemplary damages of ͅ .....

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..... ty to the public. Winfield's classic definition provides as under:- Tortious liability arises from the breach of a duty primarily fixed by the law; such duty is towards persons generally and its breach is redressible by an action for unliquidated damages. Apart from tort which may be committed by a private individual, the officers of the Govt. would also be liable in damages for their wrongful acts provided the act does not fall within the purview of act of the State. So also, the administrative bodies or authorities, which deal in administrative matters and take decisions specially for the implementation of the Govt. policies, have to act fairly and objectively and may in some cases also be required to follow the principles of natural justice. It is the basic principle of Administrative Law that if the authorities are conferred certain power, then that power must be exercised in good faith and the administrative decision must be made after taking into account all matters relevant for the exercise of that power. The authority must not be influenced by irrelevant matters and if the order is likely to prejudicially affect the rights, or, even the reasonable expectation .....

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..... w. A ministerial revocation order had prohibited the import of turkey meat from France and was held unlawful by the European Court as being in breach of Article 30 of the Treaty of Rome, which is binding in British law under the European Communities Act 1972. French traders who had suffered losses under the ban then sued the ministry for damages. On preliminary issues it was held that they had no cause of action merely for breach of statutory duty, as already related. Likewise there was no cause of action merely because the minister's order was unlawful: it could be quashed or declared unlawful on judicial review, but there was no remedy in damages. There would be such a remedy, however, if it could be shown that the minister had abused his power, well knowing that his order was a breach of Article 30 and would injure the plaintiffs' business. It was alleged that his conscious purpose was to protect English turkey producers rather than to prevent the spread of disease, and that he knew that this made his order unlawful. The element of bad faith, or malic as judges have often called it, seems now to be established as the decisive factor. (Emphasis supplied) Thereafter, a .....

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..... fliction of loss by the deliberate abuse of a statutory power, or by the usurpation of a power which the officer or authority knows he does not possess, for example by procuring the making of a compulsory purchase order, or by refusing, or cancelling or procuring the cancellation of a licence, from improper motives. However, where there has been no misfeasance, the fact that a public officer or authority makes an ultra vires order or invalidly exercises statutory powers will not of itself found an action for damages. de Smith in Judicial Review of Administrative Action, while speaking of tort of misfeasance in public office, says as under : A public authority or person holding a public office may be liable for the tort of misfeasance in public office where : (1) there is an exercise or non-exercise of public power, whether common law, statutory or from some other source; (2) which is either (a) affected by malice towards the plaintiff or (b) the decision maker knows is unlawful; and (3) the plaintiff is in consequence deprived of a benefit or suffers other loss. de Smith further says as under : A power is exercised maliciously if its repository is motivated by .....

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..... complained that the constables of the borough in which an election was held had refused to permit him to vote fraudulently and maliciously intending to damnify him . Lord Holt CJ, whose judgment ultimately prevailed in the House of Lords, held that malice was essential to the action. Malice has been understood to mean an intention to injure. In this context, the injury intended must be something which the plaintiff would not or might not have suffered if the power available to the public officer had been validly exercised. (It is in that sense that I use the term injury hereafter.) In more recent times, the scope of the tort has not been limited to cases in which a public officer has acted maliciously. It has now been accepted that if a public officer engages in conduct in purported exercise of a power but with actual knowledge that there is no power to engage in that conduct, the conduct may amount to an abuse of office. The High Court further observed as under:- I respectfully agree that the mental element is satisfied either by malice (in the sense stated) or by knowledge. That is to say, the mental element is satisfied when the public officer engages in the impugne .....

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..... what he was doing was invalid and that it will injure the plaintiff. (See also : Bourgoin SA Ors. vs. Ministry of Agriculture Fisheries Food (1985) 3 All ER 585 (CA). In Jones v. Swansea City Council (1989) 3 All ER 162 (CA), it was held that if the public officer acts with malice, i.e., with an intent to injure and thereby damage results, the liability would arise and the officer could be sued for the tort of misfeasance in public office. The legal propositions in that case were not dissented from by the House of Lords, though the Court of Appeal's decision was reversed on facts (See: Jones vs. Swansea City Council (1990) 3 All ER 737 (HL). In Three Rivers District Council and Ors. v. Bank of England (No.3), (1996) 3 All ER 558, it was held that the tort of misfeasance in public office was concerned with a deliberate and dishonest wrongful abuse of the powers given to a public officer and the purpose of the tort was to provide compensation for those who suffered loss as a result of improper abuse of power. The conclusions reached in that case were:- Issue No.1 Misfeasance in public office (1) The tort of misfeasance in public office is concerned with a deliberate .....

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..... ufficient right or interest to maintain an action for misfeasance in public office at common law. The plaintiff must of course also show that the defendant was a public officer or entity and that his loss was caused by the wrongful act. So far as malice is concerned, while actual malice, if proved, would render the defendant's action both ultra vires and tortious, it would not be necessary to establish actual malice in every claim for misfeasance in public office. In Bourgoin SA vs. Ministry of Agriculture, Fisheries Food, (1985) 3 All ER 585 (CA) to which a reference has already been made above, the plaintiffs were French turkey farmers who had been banned by the Ministry from exporting turkeys to England on the ground that they would spread disease. The Ministry, however, subsequently conceded that the true ground was to protect British turkey farmers and that they had committed breach of Article 30 of the EEC Treaty which prohibited unjustifiable import restrictions. The defendants denied their liability for misfeasance claiming that they were not actuated by any intent to injure the plaintiffs but by a need to protect British interest. It was held by Mann, J., which w .....

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..... thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury. (Emphasis supplied) After quoting from Wade, the Court proceeded to consider the question of award of exemplary damages in the light of the decision in Cassell Co. Ltd. v. Broome Anr. 1972 (1) All ER 801 as also the earlier decision in Rookes v. Barnard 1964 (1) All ER 367 and other English decision including Ashby v. White (1703)2 Ld Raym 938, and held that exemplary damages could be awarded against the officers of the Lucknow Development Authority. The decision in the Lucknow Development Authority's case (supra) has been followed by this Court in the Judgment under Review and a notice was issued to the petitioner to show cause why should he not be made liable to pay damages for his mala fide action in allotting petrol pumps to the persons concerned. This notice was issued because the Court was of the opinion: Public servants may be liable in damages for malicious, deliberate or injurious wrongdoing. According to Wade : `There is, thus, a tort which has been called misfe .....

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..... tish Sharma acted in a wholly biased manner inasmuch as he unfairly regarded with favour the cases of 15 allottees before him. The relevant circumstances available from record and discussed by us leave no manner of doubt in our mind that Capt. Satish Sharma deliberately acted in a biased manner to favour these allottees and as such the allotment orders are wholly vitiated and are liable to be set aside. The Court also found : The orders of the Minister reproduced above read: the applicant has no regular income to support herself and her family , the applicant is an educated lady and belongs to Scheduled Tribe community , the applicant is unemployed and has no regular source of income , the applicant is an uneducated, unemployed Scheduled Tribe youth without regular source of livelihood , the applicant is a housewife whose family is facing difficult financial circumstances etc.etc. There would be literally millions of people in the country having these circumstances or worse. There is no justification whatsoever to pick up these persons except that they happen to have won the favour of the Minister on mala fide considerations. None of these cases fall within the catego .....

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..... hat in the matter of discretionary allotments based on Compassionate grounds, individual assessment and perception are bound to differ from person to person. There is no material to suggest that I made any allotments for any pecuniary advantage or illegal gain. Thus, I submit that before deciding on my personal liability to pay compensation or face criminal trial, I should be permitted to place my version of the facts and circumstances. The legal issue of the personal liability of Ministers arising out of abuse of executive powers under the Rules of Business in contradistinction to statutory powers conferred upon designated functionaries involves important questions impinging on the interpretation of the constitution. I respectfully state that this matter should be dealt with by this Hon'ble Court under Article 145 (3). 3. The principal flaw found in all these allotments is that the procedure of receiving such applications for discretionary quota was an institutionalised one and lacked transparency. The lack of institutionalisation of procedures for discretionary quotas has been in existence since 1982 and I state that it is not suggested that I flouted any criteria or gu .....

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..... to Capt. Satish Sharma. He has filed affidavit in reply to the show-cause notice. 4. We have heard Mr. Salve, learned counsel appearing for Capt. Satish Sharma. There are two parts of the directions quoted above. This Court has called upon Capt. Satish Sharma to show cause why a direction be not issued to the appropriate police authority to register a case and initiate prosecution against him for criminal breach of trust or any other offence under law. 5. The findings of this Court, quoted above, and the conclusions reached in the Common Cause case, leave no manner of doubt that an investigation by an independent authority is called for in this case. We, therefore, direct the Central Bureau of Investigation (CBI) to register a case against Capt. Satish Sharma in respect of the allegation dealt with and the findings reached by this Court in the Common Cause case. The CBI shall hold investigation and proceed in accordance with law. There shall be no limit on the power, scope and sphere of investigation by the CBI. We, however, make it clear that the CBI shall not be influenced by any observations made by this Court or the findings reached in Common Cause case, for reaching the .....

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..... rs to be to provide immediate relief in a case of acute personal hardship. The list of discretionary quotas available with the Prime Minister and other Ministers has been placed before us and is set out below: DETAILS OF DISCRETIONARY ALLOTMENTS BEING EXERCISED BY VARIOUS MINISTERS IN GOVERNMENT OF INDIA UNION MINISTERS 1. Prime Minister : Directives being sent to various Ministries for deserving cases of Discretionary allotments, for out of turn House/DDA Flat/Shops/Petrol Pump/Gas Agencies/Rly Station Stalls/Free Air Tickets/out of turn Maruti Car, STD/ISD Booth/Out of Turn Telephone Connections/Gas Connections etc. PM exercises discretion to sanction funds from PM's Relief Fund. 2. Minister for Communications Discretionary Allotments of : 1. Telephone connections. 2. Small Telephone Exchanges. 3. ISD/STD Booths. 3. Minister for Civil Aviation Tourism Discretionary Allotment of : 1. Free or Discounted International Air Tickets. 2. GSAs for AI or Indian Airlines 3. Out of Turn seats in IA/AI flights. 4. Shops/Stalls in ITDC Hotels. 4. Minister for Chemical Fertilizers Discretionary Allotment of : 1. Agencies of IPCL/Public Sector Drug Units. .....

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..... . 886 of 1993, decided on March 31, 1995) [since reported in 1995 Supp.(3) SCC 382], but the Court did not set aside or quash any of the allotments and instead framed guidelines for the exercise of discretionary allotment of petroleum products' agencies. These guidelines were settled with the assistance of the Attorney General who submitted a draft of the proposed guidelnes. After considering the guidelines, the Court directed as under: The following to be inserted in the brochure of guidelines for selection of dealers through the Oil Selectlon Board: Discretionary Quota A discretionary quota will be earmarked for deserving cases on genuine compassionate grounds. This quota will be outside the 100 point roster of marketing plans and outside the purview of the Oil Selection Boards. Candidates will submit a proper application to the Ministry, giving their complete bio-data indicating the name of spouse/father, occupation, permanent address, annual income for the preceding year in respect of self, spouse and parents from all sources enclosing documentary evidence wherever necessary in support of their request and an affidavit verifying the given facts. Discretionary a .....

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..... requested by the Court to provide the draft guidelines which was done and the guidelines were approved by the Court and the Court fixed the guidelines for the exercise of manufacturer's five per cent discretionary quota concerning allotment of `Maruti 800' cars. (See: Ashok K. Mittal vs. Maruti Udyog Ltd. Anr. (1986) 1 SCR 585). While conceding discretionary quota to the manufacturers, the Court fixed the guidelines for regulating the allotments of Maruti cars out of discretionary quota to various customers falling in the category of Defence Forces, Judiciary, Constitutional Heads, MPs, etc. Mr.Gopal Subramaniam, learned Senior Counsel, appearing as Amicus Curiae in the case and who, we must record, equally matched the forensic skill of Mr. K. Parasaran and rendered invaluable assistance to us, contended that it was not merely a matter of discretionary quota which was the basis of the judgment under review, but the arbitrary manner, in which the discretion was exercised, which ultimately resulted in the quashing of all the allotments made by the petitioner who was found to have allotted the petrol pumps not only to the relatives of his personal staff, but also to the sons .....

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..... applicants for allotment of petrol outlet. Had the Common Cause approached the Civil Court for damages on account of tort of misfeasance in public office, its suit would have been dismissed on the ground that it was not one of the applicants for a petrol outlet; its own interest was not injured in any way nor had the petitioner made allotment in favour of one of the applicants maliciously or with the knowledge that the allotment would ultimately harm the Common Cause . How could then a finding of commission of misfeasance in public office by the petitioner be recorded in proceedings under Article 32 and that too, at the instance of Common Cause on the basis of a Press report? Mr. Gopal Subramaniam contended that Common Cause was justified in filing the petition under Article 32 in Public Interest to expose the wanton way in which allotments were made by the petitioner. To that extent, Mr.Gopal Subramaniam is right. The Court has already quashed the fifteen allotments made by the petitioner in view of the arbitrary exercise of power by him. But the Court went a step further and held that petitioner had committed the Tort of Misfeasance in Public Office and awarded exemplary d .....

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..... l Subramaniam drew our attention to the following passage from the judgment under review : The orders of the Minister reproduced above read: the applicant has no regular income to support herself and her family , the applicant is an educated lady and belongs to Scheduled Tribe community , the applicant is an uneducated, unemployed Scheduled Tribe youth without regular source of livelihood , the applicant is a housewife whose family is facing difficult financial circumstances etc. etc. There would be literally millions of people in the country having these circumstances or worse. There is no justification whatsoever to pick up these persons except that they happen to have won the favour of the Minister on mala fide considerations. None of these cases fall within the categories placed before this Court in Centre for Public Interest Litigation v. Union of India but even if we assume for argument sake that these cases fall in some of those or similar guidelines the exercise of discretion was wholly arbitrary. Such a discretionary power which is capable of being exercised arbitrarily is not permitted by Article 14 of the Constitution of India. While Article 14 permits a reasona .....

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..... which is either a tort or a breach of contract, the compensation being in the form of a lump sum which is awarded unconditionally. This definition was adopted by Lord Hailsham L.C. in Broome v. Cassell Co. (1971) 2 All ER 187. The definition in Halsbury's Laws of England (4th Edition), Volume 12, Para 1102, is similar to the definition set out above. The object of an award of damages is to give the plaintiff compensation for damage, loss or injury he has suffered. The elements of damage recognised by law are divisible into two main groups : pecuniary and non- pecuniary. While the pecuniary loss is capable of being arithmetically worked out, the non-pecuniary loss is not so calculable. Non-pecuniary loss is compensated in terms of money, not as a substitute or replacement for other money, but as a substitute, what Mcgregor says, is generally more important than money: it is the best that a court can do. In Re: The Medianna (1900) A.C. 1300, Lord Halsbury L.C. observed as under: How is anybody to measure pain and suffering in moneys counted? Nobody can suggest that you can by arithmetical calculation establish what is the exact sum of money which would represent such a .....

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..... ges were awarded. These cases were followed by two other cases, namely, Benson v. Fredrick (1766) 3 Burr. 1845 relating to the tort of assault and Tullidge vs. Wade (1769) 3 Wils. KB 18 relating to the tort of seduction, and in both the cases, exemplary damages were allowed. Exemplary damages, therefore, became a familiar feature of the Law of Tort and were even awarded in cases relating to trespass to land and trespass to goods. The whole legal position was reviewed in Rookes v. Barnard (1964) AC 1129 and the House of Lords laid down that except in few exceptional cases, it would not be permissible to award exemplary damages against the defendant howsoever outrageous his conduct might be. The question of damages was thoroughly canvassed in the judgment of Lord Devlin and after tracing the history of such awards of exemplary damages from their origin in 1763, he observed : These authorities convince me of two things. First, that your lordships could not without a complete disregard of precedent, and indeed of statute, now arrive at a determination that refused altogether to recognise the exemplary principle. Secondly, that there are certain categories of cases in which an aw .....

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..... ad said : 'As written, the book is a continuous witch hunt of the plaintiff, filled with exaggerated criticisms of what he did or did not do... We could not possibly publish the book as it is unless you took out insurance against any writs for libel, and I don't think that any insurance company would underwrite you.' The author then submitted the book for publication to Cassell Co. Ltd., which praised the book for its very robust view of libel dangers . Cassell thought that the amount of profit which he would earn by publishing the book would far exceed the amount of damages which he would be required to pay in an action for libel. As anticipated, action for libel was instituted against Cassell Company. At the trial, neither the author nor the publisher gave evidence. Every witness who was called supported the plaintiff. The jury awarded compensatory damages of Pound 1,000 in respect of the proof copies and Pound 14,000 in respect of the hardback edition, and exemplary damages of Pound 25,000. The defendants appealed. In dismissing the appeal, the Court of Appeal considered the judgment in Rookes v. Barnard and speaking through Lord Denning, M.R. said that Lo .....

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..... e book in spite of the knowledge that an action for libel was likely to be instituted against them. They were fully conscious that damages were likely to be awarded against them for publishing that book. But they published the book as they thought that the book would bring them much more money than what they would be required to pay as damages. If it is with this motive that a tort is purposely committed, it would be a fit case for award of exemplary damages. In spite of this decision, the controversy whether punitive or exemplary damages should be allowed, still rages almost internationally and remains unresolved. It continues to be debated even in England, whether Exemplary Damages should be allowed in the pre-Rookes v. Barnard manner or only in those exceptional cases which have been indicated in Rookes v. Barnard. In an action for tort where the plaintiff is found entitled to damages, the matter should not be stretched too far to punish the defendant by awarding exemplary damages except when their conduct, specially those of the Govt. and its officers, is found to be oppressive, obnoxious and arbitrary and is, sometimes, coupled with malice. While dealing with this catego .....

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..... them, they will develop a defensive attitude which would not be in the interest of administration. In Yuen Kun Yev Ors. v. Attorney General of Hong Kong (1987) 2 All ER 705, Lord Keith observed as under : the prospect of claims would have a seriously inhibiting effect on the work of his department. A sound judgment would be less likely to be exercised if the Commissioner were to be constantly looking over his shoulder at the prospect of claims against him, and his activities would be likely to be conducted in a detrimentally defensive frame of mind.. Consciousness of potential liability could lead to distortions of judgment. If the power has been exercised bona fide and honestly, there cannot be any occasion for exemplary damages being awarded notwithstanding that unintended injury was caused to someone. These, as also a few other elements, which we shall presently discuss, have to be kept in mind before awarding exemplary damages. Mr. Parasaran next made his submission on the quantum of damages and contended that the amount of ₹ 50 lakhs has been fixed in an arbitrary manner without there being any rational basis for arriving at that figure. It is contended .....

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..... ay a sum of ₹ 50 lakhs to the Govt., the Court has awarded damages in favour of the Govt. of India in proceedings under Article 32 of the Constitution which is not permissible as the Court cannot direct the Govt. to pay the exemplary damages to itself. Mr.Gopal Subramaniam asserted that it was a direction made to the petitioner personally and the Court had treated him as a separate and distinct entity than the Govt. He contended that since tort is a wrongful act, it cannot be treated as an act of the State and has always to be treated as referring to the person who has committed it and, therefore, the petitioner could be rightly directed by the Court to pay ₹ 50 lakhs as exemplary damages. This cannot be accepted. The whole thing has to be examined in the context of Article 32 of the Constitution under which relief to a person or citizen can be granted only against Union of India or the State or their Instrumentalities but the State cannot legally claim that since one of its Ministers or Officers had violated the fundamental rights of a citizen or had acted arbitrarily, it should be compensated by awarding exemplary damages against that officer or Minister. In Roo .....

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..... He has to deal with the people's property in a fair and just manner. He cannot commit breach of the trust reposed in him by the people. (b) The allotments have been made in a cloistered manner. The petrol pumps -- public property -- have been doled out in a wholly arbitrary manner. These observations indicate that the Court was of the opinion that a person on being elected by the people and on becoming a Minister holds a sacred trust on behalf of the people. This, we may venture to say, is a philosophical concept and reflects the image of virtue in its highest conceivable perfection. This philosophy cannot be employed for determination of the offence of criminal breach of trust which is defined in the Indian Penal Code. Whether the offence of criminal breach of trust has been committed by a person has to be determined strictly on the basis of the definition of that offence set out in the Penal Code to which we would advert a little later. The Court also appears to have invoked the 'Doctrine of Public Trust' which is a doctrine of environmental law under which the natural resources such as air, water, forest, lakes, rivers and wild life are public properti .....

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..... as defined under the Trust Act, was created in favour of the petitioner nor did he become a trustee in that sense. In Tito vs. Waddell (No.2), 1977 (3) All ER 129, the question of Crown's status as a trustee was considered and it was laid down:- I propose to turn at once to the position of the Crown as trustee, leaving on one side any question of what is meant by the Crown for this purpose; and I must also consider what is meant by `trust'. The word is in common use in the English language, and whatever may be the position in this court, it must be recognised that the word is often used in a sense different from that of an equitable obligation enforceable as such by the courts. Many a man may be in a position of trust without being a trustee in the equitable sense; and terms such as `brains trust', `anti-trust', and `trust territories', though commonly used, are not understood as relating to a trust as enforced in a court of equity. At the same time, it can hardly be disputed that a trust may be created without using the word `trust'. In every case, one has to look to see whether in the circumstances of the case, and on the true construction of wha .....

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..... g the `monstrous inconvenience' and `enormous expense of litigation' if there were a trust enforceable by the courts, so that `one should be reluctant, even if the words were much stronger than they are, to hold that there is a trust'. The House of Lords [(1882) 7 App Cas 619] unanimously affirmed the Court of Appeal. In the leading speech, Lord Selborne LC attahced some weight to the words in the Royal Warrant being `the Secretary of State for India in Council', and `for the time being', instead of his being described by his personal name, as indicating that he was not intended to be a trustee in the ordinary sense, but was intended to act as a high officer of State. After discussing the Order in council, Lord Selbourne LC quoted the part of the Royal Warrant which contained the words `in trust for the use of', and said: `Now the words in trust for are quite consistent with, and indeed are the proper manner of expressing, every species of trust-a trust not only as regards those matters which are the proper subjects for an equitable jurisdiction to administer, but as respects higher matters, such as might take place between the Crown and public offic .....

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..... so to do in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract made touching the discharge of such trust. In this case, the earlier decision in Pratibha Rani vs. Suraj Kumar (1985) 2 SCC 370 was affirmed. The case essentially related to the entrustment of `Stridhan', but nevertheless, it is important, in the sense that the ingredients of the offence are set out and discussed. In Chellor Mankkal Narayan Ittiravi Nambudiri vs. State of Travancore-Cochin AIR 1953 SC 478 = 1954 Crl.LJ 102, it was laid down that every breach of trust in the absence of mens rea or dishonest intention cannot legally justify a criminal prosecution. The expressions entrusted with property and with any dominion over property used in Section 405 came to be considered by this Court in C.B.I. vs. Duncans Agro Industries Ltd., Calcutta (1996) 5 SCC 591 = AIR 1996 SC 2452 and the view earlier expressed was reiterated. It was held that the expression entrusted has wide and different implication in different contexts and the expression trust has been used to denote various kinds of relationships like trustee and beneficiary, b .....

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..... ffence is, prima facie, found to have been committed or a person's involvement is prima facie established, but a direction to the C.B.I. to investigate whether any person has committed an offence or not cannot be legally given. Such a direction would be contrary to the concept and philosophy of LIFE and LIBERTY guaranteed to a person under Article 21 of the Constitution. This direction is in complete negation of various decisions of this Court in which the concept of LIFE has been explained in a manner which has infused LIFE into the letters of Article 21. Right to Life , set out in Article 21, means something more than mere survival or animal existence. (See: State of Maharashtra vs. Chandrabhan Tale, AIR 1983 SC 803 = (1983) 3 SCC 387 = 1983 (3) SCR 327). This Right also includes the right to live with human dignity and all that goes along with it, namely, the bare necessities of life such as adequate nutrition, clothing and shelter over the head and facilities for reading, writing and expressing oneself in differ forms, freely moving about and mixing and commingling with fellow human beings. [See: Francis Coralie Mullin vs. Administrator Union Territory of Delhi, .....

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..... ervations made by this Court or the findings recorded by it, is mere lullaby. We may say that we maintain the rule of accountability and liability of the Executive including public servants in administrative matters and confirm that there should be transparency in all what they do, specially where grant of largesse is concerned. But, the present case is being decided on its own peculiar facts and features in which, the finding as to the commission of tort of misfeasance recorded by this Court or the award of exemplary damages as also direction for investigation by the C.B.I., cannot be sustained on account of errors apparent on the face of the record. We may also point out that the powers of this Court under Article 32 and that of the High Court under Article 226 are plenary powers and are not fettered by any legal constraints. If the Court, in exercise of these powers has itself committed a mistake, it has the plenary power to correct its own mistake as pointed out by this Court in S. Nagaraja Ors. vs. State of Karnataka Anr. 1993 Supp. (4) SCC 595, in which it was observed as under : Justice is a virtue which transcends all barriers. Neither the rules of procedure n .....

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