Bangalore Medical Trust v. B. S. Muddappa

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36. We have given our careful consideration to this submission. The question is whether R. 3-B of O. XXIII, proprio vigore, is attracted to the proceedings in the suit or whether the general principles of natural justice underlying the provision apply. If it is the latter, as indeed, the Sahu case has held, the contention in substance is not different from the one based on non-compliance with the right of being heard which has been read into Section 4. The Sahu case did not lay down that provisions of O. XXIII, R. 3-B, CPC, proprio vigore, apply. It held that the principles of natural justice underlying the said provisions were not excluded. It is implicit in that reasoning that O. XXIII, R. 3-B, CPC, proprio vigore, apply. The court thereafter considered the further sequential question whether the obligation to hear had been complied with or not and what were the consequences of failure to comply. The Court in the Sahu case after noticing that the principle underlying R. 3-B had not been satisfied, yet, did not say that the settlement was, for that reason, void. If as Shri Shanti Bhushan says the Sahu case had concluded the matter, it would have as a logical consequence declared the settlement void. On the contrary, the discussion of the effect of failure of compliance would indicate that the court declined to recognise any such fatal consequences. The Court said (AIR 1990 SC 1480 at pp. 1545-46):

"Though entering into a settlement without the required notice is wrong. In the facts and circumstances of this case, therefore, we are of the opinion, to direct that notice should be given now, would not result in doing justice in the situation. In the premises, no further consequential order is necessary by the Court. Had it been necessary for this Bench to have passed such a consequential order, we would not have passed any such consequential order in respect of the same".



37. The finding on this contention cannot be different from the one urged under Contention (I) infra. If the principle of natural justice underlying O. XXIII, R. 3-B, C.P.C is held to apply, the consequences of non-compliance should not be different from the consequences of the breach of rules of natural justice implicit in section 4. Dealing with that, the Sahu Case having regard to the circumstances of the case, declined to push the effect of non-compliance to its logical conclusion and declared the settlement void. On the contrary, the Court in Sahu's case considered it appropriate to suggest the remedy and curative of an opportunity of being heard in the proceedings for review. In Sahu decision the obligation under Section 4 to give notice is primarily on the Union of India. Incidentally there are certain observations implying an opportunity of being heard also before the Court even assuming that the right of the affected persons of being heard is also available at a stage where a settlement is placed before the court for its acceptance, such a right is not referable to, and does not stem from, Rule 3-B of Order XXIII, C.P.C. The pronouncement in Sahu case as to what the consequences of non-compliance are is conclusive as the law of the case. It is not open to us to say whether such a conclusion is right or wrong. These findings cannot be put aside as mere obiter.

Section 112, C.P.C., inter alia, says that nothing contained in that Code shall be deemed to affect the powers of the Supreme Court under Article 136 or any other provision of the Constitution or to interfere with any rules made by the Supreme Court. The Supreme Court Rules are framed and promulgated under Article 145 of the Constitution. Under Order 32 of the Supreme Court Rules, O. XXIII, R. 3-B, C.P.C is not one of the rules expressly invoked and made applicable.

In relation to the proceedings and decisions of superior Courts of unlimited jurisdiction, imputation of nullity is not quite appropriate. They decide all questions of their own jurisdiction. In Isaacs v. Robertson (1984) 3 All ER 140 at p. 143 the Privy Council said:

"The ...... legal concepts of voidness and voidability form part of the English law of contract. They are inapplicable to orders made by a court of unlimited jurisdiction in the course of contentious litigation. Such an order is either irregular or regular. If it is irregular it can be set aside by the court that made it on application to that court; if it is regular it can only be set aside by an appellate court on appeal if there is one to which appeal lies".

With reference to the "void" cases the Privy Council observed:

" ......The cases that are referred to in these dicta do not support the proposition that there is any category of orders of a court of unlimited jurisdiction of this kind; what they do support is the quite different proposition that there is a category of orders of such a court which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make. The judges in the cases that have drawn the distinction between the two types of orders have cautiously refrained from seeking to lay down a comprehensive definition of defects that being an order into the category that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natural justice".

This should conclude the present contention under C also against the petitioners.

Re: Contention (D)



38. This concerns the validity of that part of the orders of the 14th and 15th of February, 1989 quashing and terminating the criminal proceedings. In the order dated 14th February 1989 clause (3) of the order provides:

"......and all criminal proceeding related to and arising out of the disaster shall stand quashed wherever these may be pending".

Para 3 of the order dated 15th February, 1989 reads:

"Upon full payment of the sum referred to in paragraph 2 above:

(a) The Union of India and the State of Madhya Pradesh shall take all steps which may in future become necessary in order to implement and give effect to this order including but not limited to ensuring that any suits, claims or civil or criminal complaints which may be filed in future against any Corporation, Company or person referred to in this settlement are defended by them and disposed off in terms of this order.

(b) Any such suits, claims or civil or criminal proceedings filed or to be filed before any court or authority are hereby enjoined and shall not be proceeded with before such court or authority except for dismissal or quashing in terms of this order".

The signed memorandum filed by the Union of India and the UCC includes the following statement:

"This settlement shall finally dispose of all past, present and future claims, causes of action and civil and criminal proceedings (of any nature whatsoever wherever pending) by all Indian citizens and all public and private entities with respect to all past, present and future deaths, personal injuries, health effects, compensation, losses, damages and civil and criminal complaints of any nature whatsoever against UCC, Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and affiliates as well as each of their present and former directors, officers, employees, agents, representatives, attorneys, advocates and solicitors arising out of, relating or concerned with the Bhopal gas leak disaster, including past, present and future claims, causes of action and proceedings against each other.

.....and all such criminal proceedings including contempt proceedings stand quashed and accused deemed to be acquitted".

The order of 15th February, 1989 refers to the written memorandum filed by the learned counsel on both sides.


39. The two contentions of the petitioners, first, in regard to the legality and validity of the termination of the criminal proceedings and secondly, the validity of the protection or immunity from future proceedings, are distinct. They are dealt with also separately. The first - which is considered here - is in relation to the termination of pending criminal proceedings.

40. Petitioners' learned counsel strenuously contend that the orders of 14th and 15th of February, 1989, quashing the pending criminal proceedings which were serious non-compoundable offences under Sections 304, 324, 326 etc. of the Indian Penal Code are not supportable either as amounting to withdrawal of the prosecution under Section 321 Code of Criminal Procedure, the legal tests of permissibility of which are well settled or as amounting to a compounding of the offences under S. 320 Criminal Procedure Code as, indeed, sub-section (9) of S. 320, Cr. P.C. imposes a prohibition on such compounding. It is also urged that the inherent powers of the Court preserved under S. 482, Cr. P.C. could not be pressed into service as the principles guiding the administration of the inherent power could by no stretch of imagination, be said to accommodate the present case. So far as Article 142 (1) of the Constitution is concerned, it is urged, that the power to do "complete justice" does not enable any order "inconsistent with the express statutory provisions of substantive law, much less, inconsistent with any constitutional provisions" as observed by this Court in Prem Chand Garg v. Excise Commr. U.P., Allahabad, 1963 Suppl (1) SCR 885 at 899-900: (AIR 1963 SC 996 at p. 1003).

41. Shri Narman, however sought to point out that in Prem Chand Garg's case (AIR 1963 996) the words of limitation of the power under Article 142 (1) with reference to the "express statutory provisions of substantive law" were a mere obiter and were not necessary for the decision of that case. Shri Nariman contended that neither in Garg's case (AIR 1963 SC 996) nor in the subsequent decision in A. R. Antulay v. R. S. Nayak (1988) 2 SCC 602: (AIR 1988 SC 1531) where the above observations of inconsistency with the express statutory provision of substantive law arose and in both the cases the challenge had been on the ground of violation of fundamental rights. Shri Nariman said that the powers under Arts. 136 and 142 (1) are overriding constitutional powers and that while it is quite understandable that the exercise of these powers, however wide, should not violate any other constitutional provision, it would, however, be denying the wide sweep of these constitutional powers if their legitimate plenitude is whittled down by statutory provision. Shri Nariman said that the very constitutional purpose of Art. 142 is to empower the Apex Court to do complete justice and that if in that process the compelling needs of justice in a particular case and provisions of some law are not on speaking terms, it was the constitutional intendment that the needs of justice should prevail over a provision of law. Shri Nariman submitted that if the statement in Garg's case to the contrary passes into law it would wrongly alter the constitutional scheme. Shri Nariman referred to a number of decisions of this Court to indicate that in all of them the operative result would not strictly square with the provisions of some law or the other. Shri Nariman referred to the decisions of this court where even non-compoundable offences were permitted to be compounded in the interests of complete justice; where even after conviction under S. 302 sentence was reduced to one which was less than that statutorily prescribed; where even after declaring certain taxation laws unconstitutional for lack of legislative competence this court directed that the tax already collected under the void law need not be refunded etc. Shri Nariman also referred to the Sanchaita case where this Court, having regard to large issues of public interest involved in the matter, conferred the power of adjudication of claims exclusively on one forum irrespective of jurisdictional prescriptions.

42. Learned Attorney General submitted that the matter had been placed beyond doubt in Antulay's case (AIR 1988 SC 1531) where the court had invoked and applied the dictum in Garg's case (AIR 1963 SC 996) to a situation where the invalidity of a judicial direction which, "was contrary to the statutory provision, namely section 7 (2) of the Criminal Law (Amendment) Act, 1952 and as such violative of Art. 21 of the Constitution" was raised and the court held that such a direction was invalid. Learned Attorney General said that the power under Art. 142 (1) could not be exercised if it was against an express substantive statutory provision containing a prohibition against such exercise. This, he said, is as it should be because justice dispensed by the Apex Court also should be according to law.

The order terminating the pending criminal proceedings is not supportable on the strict terms of Ss. 320 or 321 or 482, Cr. P.C. conscious of this, Shri Nariman submitted that if the Union of India as the Dominus Litis through its Attorney-General invited the court to quash the criminal proceedings and the court accepting the request quashed them, the power to do so was clearly referable to Art. 142 (1) read with the principle of S. 321, Cr. P.C. which enables the Government through its public-prosecutor to withdraw a prosecution. Shri Nariman suggested that what this Court did on the invitation of the Union of India as Dominus Litis was a mere procedural departure adopting the expedient of "quashing" as an alternative to or substitute for "withdrawal". There were only procedural and terminological departures and the Union of India as a party inviting the order could not, according to Shri Nariman, challenge the jurisdiction to make it. Shri Nariman submitted that the State as the Dominus Litis may seek leave to withdraw as long as such a course was not an attempt to interfere with the normal course of justice for illegal reasons.



43. It is necessary to set at rest certain misconceptions in the arguments touching the scope of the powers of this Court under Article 142 (1) of the Constitution. These issues are matters of serious public importance. The proposition that a provision in any ordinary law irrespective of the importance of the public policy on which it is founded, operates to limit the powers of the apex Court under Art. 142 (1) is unsound and erroneous. In both Garg's as well as Antulay's case the point was one of violation of constitutional provisions and constitutional rights. The observations as to the effect of inconsistency with statutory provisions were really unnecessary in those cases as the decisions in the ultimate analysis turned on the breach of constitutional rights. We agree with Shri Nariman that the power of the court under Art. 142 in so far as quashing of criminal proceedings are concerned is not exhausted by Ss. 320 or 321 or 482 Cr P.C. or all of them put together. The power under Art. 142 is at an entirely different level and of a different quality. Prohibitions or limitations of provisions contained in ordinary laws cannot, ipso facto, act as prohibitions or limitations on the constitutional powers under Art. 142. Such prohibitions or limitations in the statutes might embody and reflect the scheme of a particular law, taking into account the nature and status of the authority or the court on which conferment of powers - limited in some appropriate way - is contemplated. The limitations may not necessarily reflect or be based on any fundamental considerations of public policy. Sri Sorabjee, learned Attorney-General, referring to Garg's case, said that limitation on the powers under Art. 142 arising from "inconsistency with express statutory provisions of substantive law" must really mean and be understood as some express prohibition contained in any substantive statutory law. He suggested that if the expression ‘prohibition’ is read in place of ‘provision’ that would perhaps convey the appropriate idea. But we think that such prohibition should also be shown to be based on some underlying fundamental and general issues of public policy and not merely incidental to a particular statutory scheme or pattern. It will again be wholly incorrect to say that powers under Art. 142 are subject to such express statutory prohibitions. That would convey the idea that statutory provision overrides a constitutional provision. Perhaps, the proper way of expressing the idea is that in exercising powers under Art. 142 and in assessing the needs of "complete justice" of a cause or matter, the apex court will take note of the express prohibitions in any substantive statutory provision based on some fundamental principles of public-policy and regulate the exercise of its power and discretion accordingly. The proposition does not relate to the powers of the court under Art. 142, but only to what is or is not 'complete justice' of a cause or matter and in the ultimate analysis of the propriety of the exercise of the power. No question of lack of jurisdiction or of nullity can arise.

Learned Attorney General said that S. 320 Criminal Procedure Code is "exhaustive of the circumstances and conditions under which composition can be effected" (See Sankar Rangayya v. Sankar Ramayya, AIR 1916 Mad 483 at p. 485) and that "the courts cannot go beyond a test laid down by the Legislature for determining the class of offences that are compoundable and substitute one of their own". Learned Attorney General also referred to the following passage in Biswabahan v. Gopen Chandra (1967) 1 SCR 447 at p. 451: (AIR 1967 SC 895) at p. 897):

"If a person is charged with an offence, then unless there is some provision for composition of it the law must take its course and the charge required into resulting either in conviction or acquittal".

He said that "if a criminal case is declared to be non-compoundable, then it is against public policy to compound it, and any agreement to that end is wholly void in law". (see (1913) ILR 40 Cal 113 at 117-118); and submitted that court "cannot make that legal which the law condemns". Learned Attorney-General stressed that the criminal case was an independent matter and of great public concern and could not be the subject matter of any compromise or settlement. There is some justification to say that statutory prohibition against compounding of certain class of serious offences, in which larger social interest and social security are involved, is based on broader and fundamental considerations of public policy. But all statutory prohibitions need not necessarily partake of this quality. The attacks on the power of the apex Court quash the crucial proceedings under Art. 142 (1) is ill-conceived. But the justification for its exercise is another matter.



44. The proposition that State is the Dominus Litis in criminal cases, is not an absolute one. The society for its orderly and peaceful development is interested in the punishment of the offender. (See A. R. Antulay v. R. S. Nayak (1984) 2 SCC 500 at 508, 509: (AIR 1984 SC 718 at pp. 722-23) and "If the offence for which a prosecution is being launched is an offence against the society and not merely an individual wrong, any member of the society must have locus to initiate a prosecution as also to resist withdrawal of such prosecution, if initiated". (See Sheonandan Paswan v. State of Bihar (1987) 1 SCC 28 at p. 316: (AIR 1987 SC 877 at p. 889).

But Shri Nariman put it effectively when he said that if the position in relation to the criminal cases was that the court was invited by the Union of India to permit the termination of the prosecution and the court consented to it and quashed the criminal cases, it could not be said that there was some prohibition in some law for such powers being exercised under Art. 142. The mere fact that the word 'quashing' was used did not matter. Essentially, it was a matter of more form and procedure and not of substance. The power under Art. 141 is exercised with the aid of the principles of S. 321, Cr. P.C. which enables withdrawal of prosecutions. We cannot accept the position urged by the learned Attorney-General and learned counsel for the petitioners that court had no power or jurisdiction to make that order. We do not appreciate Union of India which filed the memorandum of 15th February, 1989, raising the plea of want of jurisdiction.

But whether on the merits there were justifiable grounds to quash is a different matter. There must be grounds to permit a withdrawal of the prosecution. It is really not so much a question of the existence of the power as one of justification for its exercise. A prosecution is not quashed for no other reason than that the Court has the power to do so. The withdrawal must be justified on grounds and principles recognised as proper and relevant. There is no indication as to the grounds and criteria justifying the withdrawal of the prosecution. The considerations that guide the exercise of power of withdrawal by Government could be and are many and varied. Government must indicate what those considerations are. This Court in State of Punjab v. Union of India, (1986) 4 SCC 335: (AIR 1987 SC 188) said that in the matter of power to withdraw prosecution the “broad ends of public justice may well include appropriate social, economic and political purpose". In the present case, no such endeavour was made. Indeed, the stand of the UCC in these review petitions is not specific as to the grounds justifying the exercise of the power of the court to permit a withdrawal. Even the stand of the Union of India has not been consistent. On the question whether Union of India itself invited the order quashing the criminal cases, its subsequent stand in the course of the arguments in Sahu case (AIR 1990 SC 1480) as noticed by the court appears to have been thus:

" ......The Government as such had nothing to do with quashing of the criminal proceedings and it was not representing the victims in respect of the criminal liability of the UCC or UCIL to the victims. He further submitted that quashing of criminal proceedings was done by the Court in exercise of plenary powers under Arts. 136 and 142 of the Constitution ..."

The guiding principles in according permission for withdrawal of a prosecution were stated by this Court in M. N. Sankaranarayanan Nair v. P. V. Balakrishnan (1972) 2 SCR 599: (AIR 1972 SC 496 at p. 499):

"..... Nevertheless it is the duty of the Court also to see in furtherance of justice that the permission is not sought on grounds extraneous to the interest of justice or that offences which are offences against the State go unpunished merely because the Government as a matter of general policy or expediency unconnected with its duty to prosecute offenders under the law, directs the public prosecutor to withdraw from the prosecution and the public prosecutor merely does so at the behest".

Learned counsel for the petitioners submitted that the case involved the allegation of commission of serious offences in the investigation of which the society was vitally interested and that considerations of public interest, instead of supporting a withdrawal, indicate the very opposite.

The offences relate to and arise out of a terrible and ghastly tragedy. Nearly 4,000 lives were lost and tens of thousands of citizens have suffered injuries in various degrees of severity. Indeed at one point of time UCC itself recognised the possibility of the accident having been the result of acts of sabotage. It is a matter of importance that offences alleged in the context of a disaster of such gravity and magnitude should not remain uninvestigated. The shifting stand of the Union of India on the point should not by itself lead to any miscarriage of justice.

We hold that no specific ground or grounds for withdrawal of the prosecutions having been set out at that stage the quashing of the prosecutions requires to be set aside.


45. There is, however, one aspect on which we should pronounce. Learned Attorney-General showed us some correspondence pertaining to a letter Rogatory in the criminal investigation for discovery and inspection of the UCC's plant in the United States for purposes of comparison of the safety standards. The inspection was to be conducted during the middle of February, 1989. The settlement, which took place on the 14th of February, 1989, it is alleged, was intended to circumvent that inspection. We have gone through the correspondence on the point. The documents relied upon do not support such an allegation. That apart, we must confess our inability to appreciate this suggestion coming as it does from the Government of India which was a party to the settlement.




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