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1982 (7) TMI 269

D. Pal, P. Pal, Samar Banerjee, R.P. Banerjee and S.K. Dutta, Advs. JUDGMENT M.K. Mukherjee, J. 1. These two appeals arise out of the judgment and order dated Sept. 25, 1981 passed by a learned Judge of this Court in Civil Rule No. 2731 (w) of 1980, which was issued on an application under Article 226 of the Constitution of India jointly filed by the Central Manbhum Coal Co. (P.) Ltd., and Sri Keshab Narayan Banerjee, hereinafter referred to as the petitioner No. 1 and petitioner No. 2 respectively. 2. The case of the petitioners is that the petitioner No. 1 was incorporated on Aug. 24, 1948 and is an existing company within the meaning of the Companies Act, 1956. The petitioner No. 2 is a Director of petitioner No. 1. In the late 19th Century one Jadablal Banerjee, the great grandfather of petitioner No. 2, of Birbhum, West Bengal, acquired leasehold interests in some collieries in the district of Dhanbad, including a colliery known as Bhangabandh Colliery, hereinafter referred to as the said colliery, from the Rajas of Jharia. The said colliery was originally leased by the Rajas to Jadavlal Banerjee for a period of 999 years and the latter leased out the coal mining right in the .....

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State of Bihar. Consequent thereto the leasehold mining interest in the said colliery, whereof the petitioner No. 1 was the lessee, came to vest in the State of Bihar. According to the petitioners, as a result of such vesting of the leasehold interest of the petitioner No. 1 it became entitled to the payment of compensation in terms of the amended provisions of the Act. 5. Subsequently, in or about May, 1974, the petitioner No. 1 made an application to the then Compensation Officer claiming payment of compensation in respect of its lease-hold interest in the said colliery which vested in the State in terms of the provisions of the said Act. In the application the petitioner No. 1 stated that a claim had been originally filed in 1956 for compensation and along with the application an attested copy of the receipt issued by the Circle Officer, who had received the original return along with the claim for compensation way back in 1956, was annexed. The petitioner No. 1 also annexed to its said application a statement of raisings and despatches of coal for the years from 1951 to 1961 in the prescribed form for enabling the Compensation Officer to verify its claim as to its average incom .....

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documents and also committed the offence of cheating by acting upon documents which were not genuine and by deliberately violating the provisions of laws and thereby obtained huge amount of compensation fraudulently and dishonestly. On the basis of the said report a case under Sections 120B/ 409/420/467/109/468/471 of the Indian Penal Code and Sections 5 (1) (c) and 5 (1) (d) read with Section 5 (2) of the Prevention of Corruption Act was started against the persons mentioned in the F. I. R., including the petitioner No. 2. and investigation of the case was taken up by Sri D. N. Singh, Additional Superintendent of Police. 9. The institution of the case was immediately followed by another order passed by the Additional Collector, Dhanbad on July 17, 1979 in the Compensation Case of the petitioner No. 1, being Compensation Case No. 1 of 1974-75 which had been earlier fully adjudicated upon, whereby the said officer in exercise of powers under Section 151 of the Code of Civil Procedure reviewed the order of compensation earlier passed in favour of the petitioner No. 1 and directed that the amount already paid in the shape of bonds issued in favour of petitioner No. 1 was to be kept su .....

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K. Banerjee and Sri R. Section P. Sinha (since deceased), Additional Collectors during the period 1974-1977. and obtained payment of Govt. money in all amounting to ₹ 1,48,60,950/-in bonds and ₹ 65,11,259-14 in cash by way of compensation as an intermediary, by falsely claiming to own certain mines which vested in the State Government under the provisions of the Bihar Land Reforms Act, 1950, by fraudulent means, on the basis of forged receipts and forged documents, showing him as Director and constituted attorney of Central Manbhum Coal Co. (P.) Ltd. and Dubrajpur Rice Mills (P.) Ltd. and as the managing trustee of Jadavlal Trust Estate. (b) Preliminary enquiry has disclosed the abovementioned fraud of petitioner No. 2 and it has also disclosed that he had no connection with any of the said Companies or the Trust Estate during the relevant period and further that even those Cora-parties and Trust Estate themselves were not entitled to any portion of the compensation paid to petitioner No. 2 or any compensation in respect of any land or mine which had vested under the provisions of the Bihar Land Reforms Act, 1950. read with Bihar Land Reforms Rules, 1951. (c) But sudden .....

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income from the so-called mining interest. (f) The petitioner No. 2 with the connivance and active assistance of the accused officials produced fake income returns showing the incomes having been transferred to a couple of trusts. Enquiry has disclosed that all such returns are fake and forged documents but this was wilfully ignored by the Additional Collectors and the compensations were paid to the petitioner No. 2 on the basis of a fraudulent power of attorney. (g) Enquiry has also disclosed that while making final payment of compensation the Additional Collector, late R. Section P. Sinha, deliberately and in conspiracy with the petitioner No. 2, disregarded statutory provisions and passed orders for making final payments only after 72 days of the publication of the Compensation Assessment Rolls, that is, 18 days before the expiry of the statutory period of 90 days. (h) Enquiry has disclosed that the petitioner No. 1 had no legal authority to claim compensation in the manner it did inasmuch as the petitioner No. 2 failed to produce a single instrument through which the mining rights were granted to the Company by the original proprietors. Even during the review undertaken by the .....

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al also took us through the different provisions of the Bihar Land Reforms Act, 1950 to contend that the claim of the petitioners for compensation as a lessee in respect of the said colliery was a genuine claim and the allegations to the contrary made in the First Information Report were baseless. On those principal contentions Dr. Pal asked us to hold that the F. I. R. disclosed no offence and as such the investigation was liable to be quashed. Dr. Pal relied upon the decision of the Supreme Court in the case of State of West Bengal v. Swapan Kumar, reported in MANU/SC/0120/1982 : 1982CriLJ819 to contend that besides the F. I. R. other materials as annexed to the writ application could be taken into consideration to hold that the F. I. R. did not disclose any offence. We are not at all impressed by the above contentions of Dr. Pal. 15. Dr. Pal's entire endeavour has been to show that the claim of the petitioner No. 1 for compensation in respect of the said colliery and that of the petitioner No. 2 to receive the same on behalf of the petitioner No. 1 was legal and valid but no case has been made out in the writ application to even counter the allegations made in the F. I. R. t .....

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investigating agency is acting mala fide in investigating into the case started on the basis of the First Information Report. On the contrary, the case of mala fides of the petitioners is against the persons at whose instance the First Information Report was lodged. Such plea of mala fides cannot be entertained for the purpose of quashing an investigation started over a First Information Report. If the investigating agency finds on completion of investigation that the case has been falsely instituted against the petitioner No. 2 and others they may prosecute the persons who were instrumental in starting the case, but then, this Court cannot sit in judgment over the truth or otherwise or for that matter the mala fides of the informant or other persons at whose instance the First Information Report was lodged. As no other point has been raised in support of the appeal preferred by the petitioners the same is liable to be dismissed. In view of our above findings on the merits of the appeal we refrain from deciding the question of its maintainability which was raised by the respondents. 17. Coming now to the appeal preferred by the State of Bihar and others, we find that the principal .....

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nnexures 'H' and 'K' did not depict the correct state of things appearing on the records of the relevant compensation cases, the State of Bihar could not now turn round and say that they were aggrieved by the judgment of the learned trial Judge setting aside those orders. In other words, according to Dr. Pal, when those two communications were non-existent there could not be any valid grievance of the State on that score which could be agitated in this appeal. Dr. Pal next contended that by the two impugned orders the Additional Collector was seeking to review his own orders which he could not legally do in absence of any statutory power under the Bihar Land Reforms Act, 1950. Dr. Pal further contended that recourse to Section 151 of the Code of Civil Procedure by the Additional Collector to set aside the earlier orders and to cancel and/or suspend the bonds was not legally permissible as the authority under the Act had no powers under Section 151 of the Code of Civil Procedure. Dr. Pal lastly contended that the Additional Collector even had no inherent powers to cancel or suspend the bonds. 19. To appreciate their respective contentions it will be necessary at this .....

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d in favour of M/s. Central Manbhum Coal Co. (P.) Ltd. be kept suspended pending further investigation in the matter. Given under my hand and the seal of the Court this day the 17th July, 1979. Additional Collector, Dhanbad. ANNEXURE '3' IN THE COURT OF COMPENSATION OFFICER (ADDITIONAL COLLECTOR) DHANBAD IN THE MATTER OF COMP. CASE No. 3/74-75. ORDER Whereas, suspicion has arisen with regard to the legality of the claim of M/s. Dubrajpur Rice Mills (P.) Ltd. and Messrs. Central Manbhum Coal Co. (P.) Ltd., to receive compensations in respect of the Mining Lease held in the District of Dhanbad and whereas suspicion has also arisen as to the quantum of royalty @ 1.25 P.M. Ton fixed in the case appears to be unusually high and whereas this might have resulted in excess payment of compensation money than it would have been actually and legitimately payable to the compensation holder and whereas circumstances under which such excess payment might have been made require thorough investigation, I, Shri A. C. Chakravorty, Additional Collector, Dhanbad, and the successor in office of late R. S. P. Sinha, the Compensation Officer, in the cases (Comp. Cases Nos. 1 of 1974-75 and 3 of 7 .....

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ctor passed the order for cancellation under instructions and not in exercise of his own powers. Even if the contention of Mr. Prosad is accepted that the Additional Collector had the inherent power to cancel his earlier order still then he could exercise such power only upon His own satisfaction and not pursuant to the instructions of someone else. Surprisingly even the person under whose instruction Annexure 'H' was issued had not been disclosed. Then again, by cancelling the bonds the Additional Collector was trying to take a final decision and was thereby depriving the petitioners of their legal rights. As Annexure 'H' is liable to be set aside on these two grounds, we need not detail other grounds on which also the issuance of the same cannot be legally justified. The above finding of ours will not however entitle the petitioners to any relief as the order of cancellation (Annexure 'H') stands superseded consequent upon the passing of the subsequent order of suspension communicated through Annexure 'K' and/or Annexure '3'. 22. It has next to be ascertained whether the order of suspension of the bonds pending investigation is valid or not .....

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ly alter the decision unless it had statutory power of review granted to it. In support of his contention Dr. Pal relied upon the cases of Indira Devi v. State of West Bengal reported in MANU/WB/0115/1967 : AIR1967Cal469 , State of West Bengal v. Indira Debi reported in : (1977)3SCC559 and Haji Mahabub Hossain v. Biswanath reported in MANU/WB/0080/1971 : AIR1971Cal381 . In the case of Indira Debi v. State a Division Bench of this Court held that a quasi judicial tribunal could not claim or exercise the inherent powers of the Civil Court unless the statute had conferred all the powers of the Civil Court on such a tribunal either expressly or by implication. In that case the authorities under the West Bengal Estates Acquisition Act, 1954 issued a notice upon the appellants under Section 57 of the said Act to file relevant records in connection with the settlement earlier recorded as in the opinion of the authority concerned the settlement was invalid. In the notice it was specifically stated that the case was under Section 151 of the Code of Civil Procedure. The validity of the notice was challenged on the grounds, inter alia, that the concerned authority was not a Civil Court and th .....

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n the Full Bench judgment of the Punjab High Court, contended that the tribunal had the inherent power to correct its own mistakes, as in the present case. He also drew our attention to the following observations made by this Court in the case of Mohabub Hossain (supra), on which Dr. Pal relied (at p. 382):- "Mr. Mitter then refers to a single Bench decision of this Court in Durga Devi v. Bhagwandas Jayaswal reported in MANU/WB/0292/1963 : 67 CWN 935. There a Thika Controller made an ex parte order on the basis of certain reports submitted by the Courts officers. The persons against whom the order was made filed an application under Order 9, Rule 13 of the Code. Chatterjee, J. held that Order 9, Rule 13 of the Code is not attracted, but the controller has the inherent power to do justice or, in other words, to enquire into if he has made an order on the basis of some mistake committed by his officers and to remedy the same. Chatterjee, J. has not specifically said that the Thika Controller has the inherent powers of a Civil Court under Section 151 of the Code of Civil Procedure. What he has said is that the Thika Controller as a tribunal has the inherent power to correct its o .....

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he Special Judge accepted this contention and set aside the order of the Settlement Officer as having been made without jurisdiction. Against the said order an appeal was preferred to this Court and a revisional application was also filed by way of abundant caution. This Court upheld the finding of the Special Judge that Section 108-A of the Bengal Tenancy Act had no manner of application as rectification of an unauthorised interpolation made in the record of rights was not a case of correction of an entry made in the record of rights owing to a bona fide mistake. This Court however upheld the order of rectification on the around that the Settlement Officer had the inherent power to set the record right and observed that it was also incumbent upon the authority to take the necessary action as soon as it has been appraised of what was a grave fraud. It may be mentioned in this connection that the Revenue Officers, entrusted with the duty of preparation of record of rights and under the Bengal Tenancy Act, were not clothed with the inherent powers of the Civil Court. 28. The above decision was cited on behalf of the State of West Bengal in the case of Indira Debi v. State MANU/WB/011 .....

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visions in Section 44 (2-a) of the Act." 29. The principle of taw enunciated in the case of Baul Chand Sen and as explained in the case of Indira Debi MANU/WB/0115/1967 : AIR1967Cal469 aptly applies in the case before us. No provision has been made in the Bihar Land Reforms Act, 1950 to rectify a bona fide mistake or a mistake occasioned by fraud, but then it must be held that every Tribunal which is clothed with the duty of acting judicially or quasi- judicially has the inherent powers to correct not only its bona fide mistakes but also mistakes occasioned or induced by fraud, as otherwise it would not be possible for the Tribunal to decide correctly and effectively the causes before it. 30. It is not in dispute that hi the instant case the notice, Annexure 'K', was issued by the authorities concerned after the First Information Report was lodged wherein serious allegations of fraud and cheating committed by Government officials resulting in payment of compensation to petitioner No. 2 have been made. Since it is in that context that the authorities concerned decided to suspend the bonds pending further investigation in the matter, it cannot be said that the decision o .....

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