Bhupinder Singh Versus Unitech Limited

Bhupinder Singh  Versus Unitech Limited 

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

I.A. NOS. 88960 OF 2020 & 47525 OF 2021

IN

CIVIL APPEAL NO. 10856 OF 2016

Bhupinder Singh …Appellant(s)

Versus

Unitech Limited …Respondent(s)/

 Applicant (s)

O R D E R

M.R. SHAH, J.

1. Present I.A. No. 88960 of 2020 has been preferred by the present

management of Unitech Limited seeking following prayers/directions: -

(i) Direct M/s. Devas Global LLP to deposit the entire

sale consideration of Rs. 206.50 crores for 26.475

acres of land sought to be purchased by it in a time

bound manner;

(ii) Direct M/s. Devas Global LLP to either purchase the

entire land, as committed, at the same rate or in the

alternative provide suitable access to the balance

land by taking only proportionate frontage of the

land so that any other subsequent purchaser is also

1

able to get adequate access to the land without any

interference and Unitech is able to maximise its

revenues from realization of assets;

(iii) Direct that M/s. Devas Global LLP shall not create

any third party rights on the entire land and if any

rights have been created surreptitiously, then the

same shall be kept in abeyance and no further

action be taken in furtherance of the same;

(iv) Direct M/s. Markwell Properties Pvt. Ltd. to pay an

amount of Rs 29,24,87,837/-, which was given as

advance for the purchase of 36 acres of land out of

which only 26 acres 19 guntas land was transferred,

alongwith interest from March 2007 till its payment;

(v) Direct Col. Mohinder Singh Khaira and Naresh to

immediately return a sum of Rs. 83.40 crores and

deposit the said amount in the Registry of this

Hon'ble Court, which they have received in respect

of sale of 12 acres 21 guntas (1st sale transaction)

and 10 acres 3.5 guntas (2nd sale transaction) to

Devas alongwith interest;

(vi) Direct Col. Mohinder Singh Khaira and Naresh to

provide all the requisite documents, including the

2

details of financial transactions in respect of 26

acres 19 guntas of land as mentioned above;

(vii) Direct legal action be taken against Col. Mohinder

Singh Khaira for forgery, cheating, fraud and

criminal conspiracy for submission of Board

Resolutions of the Company after its dissolution

regarding his own authorization; and

(viii) Pass any such further order/s that this Hon’ble

Court deems fit in the facts and circumstances of

the present case.”

2. The dispute with respect to the sale consideration in respect of 26

acres and 19 guntas of land (hereinafter referred to as “land in question”)

owned by Unitech Limited in favour of M/s. Devas Global Services LLP

located at Kadiganahalli Village, Bangalore, came to be confirmed in

favour of M/s. Devas Global Services LLP pursuant to the earlier orders

passed by this Court.

3. As per the case on behalf of Unitech Limited, Unitech Limited was

the absolute owner of the land in question and therefore entitled to the

entire sale consideration of Rs. 172.08 crores. It is the case on behalf of

the Unitech Limited that despite the above and the fact that Unitech

Limited was entitled to the entire sale consideration of Rs. 172.08 crores,

3

the amount received to the account of Unitech, in Supreme Court

Registry, out of the sale transaction is only Rs. 87.35 crores and the

balance amount is ordered to be appropriated/paid to the respondents –

Shri Naresh Kempanna (Rs. 56.11 crores) and Col. Mohinder Khaira

(Rs. 41.96 crores), which, according to the Unitech, they were not

entitled to. It is the case on behalf of the Unitech that true facts were not

brought to the notice of Justice Dhingra committee and even before this

Court and the aforesaid amount of Rs. 56.11 crores and Rs. 41.96

crores were ordered to be appropriated in favour of Shri Naresh

Kempanna and Col. Mohinder Khaira respectively.

3.1 It is the case on behalf of Unitech Limited that as such none of the

rights of the aforesaid two persons, who received any amount out of the

total sale consideration of Rs. 172.08 crores were adjudicated upon by

this Court and/or even by Justice Dhingra Committee. It is submitted

that the aforesaid amount has been paid to Shri Naresh Kempanna and

Col. Mohinder Khaira, pursuant to one MOU dated 02.01.2018.

Therefore, it is the case on behalf of Unitech Limited that Unitech Limited

being the absolute owner of the land in question and neither Col.

Mohinder Khaira nor Shri Naresh Kempanna were having any title and/or

ownership rights in the land in question. They were not entitled to any

amount out of the total sale consideration/sale transaction with respect

to the land in question. It is the case on behalf of the Unitech Limited

4

that a fraud has been committed on behalf of the respective parties

namely M/s. Devas Global Services LLP; Col. Mohinder Khaira and Shri

Naresh Kempanna and the erstwhile Directors/Management of the

Unitech Limited. It is the case on behalf of Unitech Limited that the

actual sale consideration being paid to Unitech Limited is just about 50%

of the total amount of sale consideration, which is to the detriment of the

home buyers, fixed deposit holders, employees and other important

stakeholders of the company. It is the case on behalf of the Unitech

Limited that on what basis the amount is ordered to be appropriated in

favour of Shri Naresh Kempanna and Col. Mohinder Khaira is neither

known nor there are any reasons, which could justify the divergence of

funds to Shri Naresh Kempanna and Col. Mohinder Khaira.

3.2 It is the case on behalf of Unitech Limited that if the true and

correct facts would have been pointed out to this Hon’ble Court and/or

the dispute with respect to the appropriation of the sale consideration

would have been adjudicated upon by this Hon’ble Court and/or even by

Justice Dhingra Committee, this Hon’ble Court might not have passed

any order to pay any amount to the aforesaid two persons namely Shri

Naresh Kempanna and Col. Mohinder Khaira out of the total sale

consideration of Rs. 172.08 crores. Therefore, it is prayed to allow the

prayers and issue the directions as prayed in the present application

even by invoking the principle of restitution.

5

4. Shri N. Venkataraman, learned ASG appearing on behalf of the

Management of the Unitech Limited has pointed out the number of facts

and various transactions with respect to the land in question right from

2005 onwards to demonstrate and satisfy this Hon’ble Court that Unitech

Limited was the absolute owner of the land in question and that neither

Shri Naresh Kempanna nor Col. Mohinder Khaira were having any title

and/or ownership rights in the land in question and therefore, were not

entitled to any amount out of the sale consideration/sale transaction of

the land in question.

5. Present application has been vehemently opposed by learned

counsel appearing on behalf of the respective respondents - Shri Naresh

Kempanna and Col. Mohinder Khaira. Number of submissions have

been made on merits on behalf of the contesting respondents – in

whose favour amount is already disbursed/paid pursuant to the earlier

order(s) passed by this Court. Pursuant to the earlier order(s) passed by

this Court, it appears that solely on the basis of the report submitted by

Justice Dhingra Committee on the basis of one MOU dated 02.01.2018

and without adjudicating the rights of the respective parties, more

particularly, the claims of Shri Naresh Kempanna and Col. Mohinder

Khaira to receive the amount, amount of Rs. 98.07 crores has been paid

to Shri Naresh Kempanna and Col. Mohinder Khaira (Rs. 56.11 crores

6

paid to Shri Naresh Kempanna and Rs. 41.96 crores paid to Col.

Mohinder Khaira). However, it is required to be noted that even the

Justice Dhingra Committee submitted the report to pay the said amount

to the aforesaid two persons without any adjudication of the claims of the

Unitech, M/s Devas and aforesaid two persons, namely, Shri Naresh

Kempanna and Col. Mohinder Khaira and just on the basis of MOU

dated 02.01.2018, Justice Dhingra Committee submitted the report on

the basis of which, this Court passed the order directing to pay amount

of Rs. 56.11 crores to Shri Naresh Kempanna and Rs. 41.96 crores to

Col. Mohinder Khaira out of sale proceeds of the land sold to M/s Devas

Global LLP. Even there was no adjudication by this Court on the

entitlement of the amount paid to Shri Naresh Kempanna and Col.

Mohinder Khaira. There are serious disputes on the entitlement of the

aforesaid amount already paid to Shri Naresh Kempanna and Col.

Mohinder Khaira. Thus, there was an obvious error and/or mistake on

the part of this Court in directing to pay Rs. 56.11 crores to Shri Naresh

Kempanna and Rs. 41.96 crores to Col. Mohinder Khaira, which as such

was without any adjudication of the claims of the aforesaid two persons.

In that view of the matter, we are of the opinion that the mistake/error

committed by this Court is to be corrected on the basis of the principle of

restitution.

7

5.1 On the principle of restitution, the decision of Constitution Bench of

this Court in the case of Indore Development Authority Vs.

Manoharlal and Others (2020) 8 SCC 129 is required to be referred to.

In paragraphs 335 to 339, it is observed and held as under: -

“335. The principle of restitution is founded on the ideal of

doing complete justice at the end of litigation, and parties

have to be placed in the same position but for the

litigation and interim order, if any, passed in the matter.

In South Eastern Coalfields Ltd. v. State of M.P. [South

Eastern Coalfields Ltd. v. State of M.P., (2003) 8 SCC

648] , it was held that no party could take advantage of

litigation. It has to disgorge the advantage gained due to

delay in case lis is lost. The interim order passed by the

court merges into a final decision. The validity of an

interim order, passed in favour of a party, stands reversed

in the event of a final order going against the party

successful at the interim stage. Section 144 of the Code

of Civil Procedure is not the fountain source of restitution.

It is rather a statutory recognition of the rule of justice,

equity and fair play. The court has inherent jurisdiction to

order restitution so as to do complete justice. This is also

on the principle that a wrong order should not be

perpetuated by keeping it alive and respecting it. In

exercise of such power, the courts have applied the

principle of restitution to myriad situations not falling

within the terms of Section 144 CPC. What attracts

applicability of restitution is not the act of the court being

wrongful or mistake or an error committed by the court;

the test is whether, on account of an act of the party

persuading the court to pass an order held at the end as

not sustainable, resulting in one party gaining an

advantage which it would not have otherwise earned, or

the other party having suffered an impoverishment,

restitution has to be made. Litigation cannot be permitted

to be a productive industry. Litigation cannot be reduced

to gaming where there is an element of chance in every

case. If the concept of restitution is excluded from

application to interim orders, then the litigant would stand

to gain by swallowing the benefits yielding out of the

interim order. This Court observed in South Eastern

8

Coalfields [South Eastern Coalfields Ltd. v. State of M.P.,

(2003) 8 SCC 648] thus : (SCC pp. 662-64, paras 26-28)

“26. In our opinion, the principle of restitution

takes care of this submission. The word

“restitution” in its etymological sense means

restoring to a party on the modification, variation

or reversal of a decree or order, what has been

lost to him in execution of decree or order of the

court or in direct consequence of a decree or

order (see Zafar Khan v. Board of Revenue,

U.P. [Zafar Khan v. Board of Revenue, U.P., 1984

Supp SCC 505] ). In law, the term “restitution” is

used in three senses : (i) return or restoration of

some specific thing to its rightful owner or status;

(ii) compensation for benefits derived from a

wrong done to another; and (iii) compensation or

reparation for the loss caused to another.

(See Black's Law Dictionary, 7th Edn., p.

1315). The Law of Contracts by John D.

Calamari & Joseph M. Perillo has been quoted

by Black to say that “restitution” is an ambiguous

term, sometimes referring to the disgorging of

something which has been taken and at times

referring to compensation for the injury done:

‘Often, the result under either meaning

of the term would be the same. … Unjust

impoverishment, as well as unjust

enrichment, is a ground for restitution. If

the defendant is guilty of a non-tortious

misrepresentation, the measure of

recovery is not rigid but, as in other cases

of restitution, such factors as relative

fault, the agreed-upon risks, and the

fairness of alternative risk allocations not

agreed upon and not attributable to the

fault of either party need to be weighed.’

The principle of restitution has been statutorily

recognised in Section 144 of the Code of Civil

Procedure, 1908. Section 144 CPC speaks not

only of a decree being varied, reversed, set aside

or modified but also includes an order on a par

9

with a decree. The scope of the provision is wide

enough so as to include therein almost all the

kinds of variation, reversal, setting aside or

modification of a decree or order. The interim

order passed by the court merges into a final

decision. The validity of an interim order, passed

in favour of a party, stands reversed in the event

of a final decision going against the party

successful at the interim stage. …

27. … This is also on the principle that a

wrong order should not be perpetuated by

keeping it alive and respecting it (A. Arunagiri

Nadar v. S.P. Rathinasami [A. Arunagiri

Nadar v. S.P. Rathinasami, 1970 SCC OnLine

Mad 63] ). In the exercise of such inherent

power, the courts have applied the principles of

restitution to myriad situations not strictly falling

within the terms of Section 144.

28. That no one shall suffer by an act of the

court is not a rule confined to an erroneous act of

the court; the “act of the court” embraces within

its sweep all such acts as to which the court may

form an opinion in any legal proceedings that the

court would not have so acted had it been

correctly apprised of the facts and the law. … the

concept of restitution is excluded from

application to interim orders, then the litigant

would stand to gain by swallowing the benefits

yielding out of the interim order even though the

battle has been lost at the end. This cannot be

countenanced. We are, therefore, of the opinion

that the successful party finally held entitled to a

relief assessable in terms of money at the end of

the litigation, is entitled to be compensated by

award of interest at a suitable reasonable rate for

the period for which the interim order of the court

withholding the release of money had remained

in operation.”

(emphasis supplied)

336. In State of Gujarat v. Essar Oil Ltd. [State of

Gujarat v. Essar Oil Ltd., (2012) 3 SCC 522], it was

10

observed that the principle of restitution is a remedy

against unjust enrichment or unjust benefit. The Court

observed : (SCC p. 542, paras 61-62)

“61. The concept of restitution is virtually a

common law principle, and it is a remedy against

unjust enrichment or unjust benefit. The core of

the concept lies in the conscience of the court,

which prevents a party from retaining money or

some benefit derived from another, which it has

received by way of an erroneous decree of the

court. Such remedy in English Law is generally

different from a remedy in contract or in tort and

falls within the third category of common law

remedy, which is called quasi-contract or

restitution.

62. If we analyse the concept of restitution,

one thing emerges clearly that the obligation to

restitute lies on the person or the authority that

has received unjust enrichment or unjust benefit

(see Halsbury's Laws of England, 4th Edn., Vol.

9, p. 434).”

337. In A. Shanmugam v. Ariya Kshatriya Rajakula

Vamsathu Madalaya Nandhavana Paripalanai

Sangam [A. Shanmugam v. Ariya Kshatriya Rajakula

Vamsathu Madalaya Nandhavana Paripalanai Sangam,

(2012) 6 SCC 430], it was stated that restitutionary

jurisdiction is inherent in every court, to neutralise the

advantage of litigation. A person on the right side of the

law should not be deprived, on account of the effects of

litigation; the wrongful gain of frivolous litigation has to be

eliminated if the faith of people in the judiciary has to be

sustained. The Court observed : (SCC pp. 451-55, para

37)

“37. This Court, in another important case

in Indian Council for Enviro-Legal Action v. Union

of India [Indian Council for Enviro-Legal

Action v. Union of India, (2011) 8 SCC 161] (of

which one of us, Dr Bhandari, J. was the author

of the judgment) had an occasion to deal with the

concept of restitution. The relevant paragraphs of

11

that judgment dealing with relevant judgments

are reproduced hereunder : (SCC pp. 238-41 &

243, paras 171-76 & 183-84)

‘170. * * *

171. In Ram Krishna Verma v. State of

U.P. [Ram Krishna Verma v. State of U.P.,

(1992) 2 SCC 620] this Court observed as

under : (SCC p. 630, para 16)

“16. The 50 operators, including

the appellants/private operators,

have been running their stage

carriages by blatant abuse of the

process of the court by delaying the

hearing as directed in Jeewan Nath

Wahal case [Jeewan Nath

Wahal v. State of U.P., (2011) 12

SCC 769] and the High Court earlier

thereto. As a fact, on the expiry of

the initial period of the grant after

29-9-1959, they lost the right to

obtain renewal or to ply their

vehicles, as this Court declared the

scheme to be operative. However,

by sheer abuse of the process of

law, they are continuing to ply their

vehicles pending the hearing of the

objections. This Court in Grindlays

Bank Ltd. v. CIT [Grindlays Bank

Ltd. v. CIT, (1980) 2 SCC 191 :

1980 SCC (Tax) 230] held that the

High Court, while exercising its

power under Article 226, the interest

of justice requires that any

undeserved or unfair advantage

gained by a party invoking the

jurisdiction of the court must be

neutralised. It was further held that

the institution of the litigation by it

should not be permitted to confer an

unfair advantage on the party

responsible for it. In the light of that

law and in view of the power under

Article 142(1) of the Constitution

12

this Court, while exercising its

jurisdiction would do complete

justice and neutralise the unfair

advantage gained by the 50

operators including the appellants in

dragging the litigation to run the

stage carriages on the approved

route or area or portion thereof and

forfeited their right to hearing of the

objections filed by them to the draft

scheme dated 26-2-1959.”

172. This Court in Kavita

Trehan v. Balsara Hygiene Products

Ltd. [Kavita Trehan v. Balsara Hygiene

Products Ltd., (1994) 5 SCC 380]

observed as under : (SCC p. 391, para

22)

“22. The jurisdiction to make

restitution is inherent in every court

and will be exercised whenever the

justice of the case demands. It will

be exercised under inherent

powers, where the case did not

strictly fall within the ambit of

Section 144. Section 144 opens

with the words:

‘144. Application for

restitution.—(1) Where and

insofar as a decree or an order is

varied or reversed in any appeal,

revision or other proceeding or is

set aside or modified in any suit

instituted for the purpose,….’

The instant case may not strictly fall

within the terms of Section 144, but the

aggrieved party in such a case can

appeal to the larger and general powers

of restitution inherent in every court.”

173. This Court in Marshall Sons & Co.

(India) Ltd. v. Sahi Oretrans (P)

13

Ltd. [Marshall Sons & Co. (India)

Ltd. v. Sahi Oretrans (P) Ltd., (1999) 2

SCC 325] observed as under : (SCC pp.

326-27, para 4)

“4. From the narration of the

facts, though it appears to us,

prima facie, that a decree in

favour of the appellant is not

being executed for some reason

or the other, we do not think it

proper at this stage to direct the

respondent to deliver the

possession to the appellant since

the suit filed by the respondent is

still pending. It is true that

proceedings are dragged on for

a long time on one count or the

other and, on occasion, become

highly technical accompanied by

unending prolixity at every stage,

providing a legal trap to the

unwary. Because of the delay,

unscrupulous parties to the

proceedings take undue

advantage, and the person who

is in wrongful possession draws

delight in delay in disposal of the

cases by taking undue

advantage of procedural

complications. It is also a known

fact that after obtaining a decree

for possession of the immovable

property, its execution takes a

long time. In such a situation, for

protecting the interest of the

judgment-creditor, it is necessary

to pass appropriate orders so

that reasonable mesne profit

which may be equivalent to the

market rent is paid by a person

who is holding over the property.

In appropriate cases, the court

may appoint a Receiver and

14

direct the person who is holding

over the property to act as an

agent of the [Receiver with a

direction to deposit the royalty

amount fixed by the] Receiver or

pass such other order which may

meet the interest of justice. This

may prevent further injury to the

plaintiff in whose favour the

decree is passed and to protect

the property, including further

alienation.”

174. In Padmawati v. Harijan Sewak

Sangh [Padmawati v. Harijan Sewak

Sangh, 2008 SCC OnLine Del 1202 :

(2008) 154 DLT 411] decided by the Delhi

High Court on 6-11-2008, the Court held

as under : (SCC Online Del para 6)

“6. The case at hand shows

that frivolous defences and

frivolous litigation is a calculated

venture involving no risks

situation. You have only to

engage professionals to prolong

the litigation so as to deprive the

rights of a person and enjoy the

fruits of illegalities. I consider that

in such cases where the court

finds that using the courts as a

tool, a litigant has perpetuated

illegalities or has perpetuated an

illegal possession, the court must

impose costs on such litigants

which should be equal to the

benefits derived by the litigant

and harm and deprivation

suffered by the rightful person so

as to check the frivolous litigation

and prevent the people from

reaping a rich harvest of illegal

acts through the courts. One of

the aims of every judicial system

15

has to be to discourage unjust

enrichment using courts as a

tool. The costs imposed by the

courts must in all cases should

be the real costs equal to

deprivation suffered by the

rightful person.”

We approve the findings of the High

Court of Delhi in the case mentioned

above.

175. The High Court also stated :

(Padmawati case [Padmawati v. Harijan

Sewak Sangh, 2008 SCC OnLine Del

1202 : (2008) 154 DLT 411] , SCC OnLine

Del para 9)

“9. Before parting with this

case, we consider it necessary to

observe that one of the [main]

reasons for overflowing of court

dockets is the frivolous litigation

in which the courts are engaged

by the litigants and which is

dragged on for as long as

possible. Even if these litigants

ultimately lose the lis, they

become the real victors and have

the last laugh. This class of

people who perpetuate illegal

acts by obtaining stays and

injunctions from the courts must

be made to pay the sufferer not

only the entire illegal gains made

by them as costs to the person

deprived of his right but also

must be burdened with

exemplary costs. The faith of

people in judiciary can only be

sustained if the persons on the

right side of the law do not feel

that even if they keep fighting for

justice in the court and ultimately

16

win, they would turn out to be a

fool since winning a case after

20 or 30 years would make the

wrongdoer as real gainer, who

had reaped the benefits for all

those years. Thus, it becomes

the duty of the courts to see that

such wrongdoers are

discouraged at every step, and

even if they succeed in

prolonging the litigation due to

their money power, ultimately,

they must suffer the costs of all

these years' long litigation.

Despite the settled legal

positions, the obvious

wrongdoers, use one after

another tier of judicial review

mechanism as a gamble,

knowing fully well that dice is

always loaded in their favour

since even if they lose, the time

gained is the real gain. This

situation must be redeemed by

the courts.”

176. Against this judgment of the Delhi

High Court, Special Leave to Appeal

(Civil) No. 29197 of 2008 was preferred to

this Court. The Court passed the following

order [Padmawati v. Harijan Sewak

Sangh, (2012) 6 SCC 460 : (2012) 3 SCC

(Civ) 765] : (SCC p. 460, para 1)

“1. We have heard the learned

counsel appearing for the

parties. We find no ground to

interfere with the well-considered

judgment passed by the High

Court. The special leave petition

is, accordingly, dismissed.”

* * *

17

183. In Marshall Sons & Co. (India)

Ltd. v. Sahi Oretrans (P) Ltd. [Marshall

Sons & Co. (India) Ltd. v. Sahi Oretrans

(P) Ltd., (1999) 2 SCC 325] this Court in

para 4 of the judgment observed as under

: (SCC pp. 326-27)

“4. … It is true that

proceedings are dragged on for

a long time on one count or the

other and, on occasion, become

highly technical accompanied by

unending prolixity at every stage,

providing a legal trap to the

unwary. Because of the delay,

unscrupulous parties to the

proceedings take undue

advantage, and a person who is

in wrongful possession draws

delight in delay in disposal of the

cases by taking undue

advantage of procedural

complications. It is also a known

fact that after obtaining a decree

for possession of immovable

property, its execution takes a

long time. In such a situation, for

protecting the interest of the

judgment-creditor, it is necessary

to pass appropriate orders so

that reasonable mesne profit

which may be equivalent to the

market rent is paid by a person

who is holding over the property.

In appropriate cases, the court

may appoint a Receiver and

direct the person who is holding

over the property to act as an

agent of the Receiver with a

direction to deposit the royalty

amount fixed by the Receiver or

pass such other order which may

meet the interest of justice. This

may prevent further injury to the

18

plaintiff in whose favour the

decree is passed and to protect

the property, including further

alienation.”

184. In Ouseph Mathai v. M. Abdul

Khadir [Ouseph Mathai v. M. Abdul

Khadir, (2002) 1 SCC 319] this Court

reiterated the legal position that : (SCC p.

328, para 13)

“13. … [the] stay granted by

the court does not confer a right

upon a party and it is granted

always subject to the final result

of the matter in the court and at

the risks and costs of the party

obtaining the stay. After the

dismissal, of the lis, the party

concerned is relegated to the

position which existed prior to

the filing of the petition in the

court which had granted the stay.

Grant of stay does not

automatically amount to

extension of a statutory

protection.” ’ ”

There are other decisions as well,

which iterate and apply the same

principle. [Indian Council for Enviro-Legal

Action v. Union of India, (2011) 8 SCC

161; Grindlays Bank Ltd. v. CIT, (1980) 2

SCC 191 : 1980 SCC (Tax) 230; Ram

Krishna Verma v. State of U.P., (1992) 2

SCC 620. Also Marshall Sons & Co.

(India) Ltd. v. Sahi Oretrans (P) Ltd.,

(1999) 2 SCC 325.]

338. A wrongdoer or in the present context, a litigant

who takes his chances, cannot be permitted to gain by

delaying tactics. It is the duty of the judicial system to

discourage undue enrichment or drawing of undue

advantage, by using the court as a tool. In Kalabharati

19

Advertising v. Hemant Vimalnath Narichania [Kalabharati

Advertising v. Hemant Vimalnath Narichania, (2010) 9

SCC 437 : (2010) 3 SCC (Civ) 808] , it was observed that

courts should be careful in neutralizing the effect of

consequential orders passed pursuant to interim orders.

Such directions are necessary to check the rising trend

among the litigants to secure reliefs as an interim

measure and avoid adjudication of the case on merits.

Thus, the restitutionary principle recognizes and gives

shape to the idea that advantages secured by a litigant,

on account of orders of court, at his behest, should not be

perpetuated; this would encourage the prolific or serial

litigant, to approach courts time and again and defeat

rights of others — including undermining of public

purposes underlying acquisition proceedings. A different

approach would mean that, for instance, where two

landowners (sought to be displaced from their lands by

the same notification) are awarded compensation, of

whom one allows the issue to attain finality — and moves

on, the other obdurately seeks to stall the public purpose

underlying the acquisition, by filing one or series of

litigation, during the pendency of which interim orders

might inure and bind the parties, the latter would profit

and be rewarded, with the deemed lapse condition under

Section 24(2). Such a consequence, in the opinion of this

Court, was never intended by Parliament; furthermore,

the restitutionary principle requires that the advantage

gained by the litigant should be suitably offset, in favour of

the other party.

339. In Krishnaswamy S. Pd. v. Union of

India [Krishnaswamy S. Pd. v. Union of India, (2006) 3

SCC 286], it was observed that an unintentional mistake

of the Court, which may prejudice the cause of any party,

must and alone could be rectified. Thus, in our opinion,

the period for which the interim order has operated under

Section 24 has to be excluded for counting the period of 5

years under Section 24(2) for the various reasons

mentioned above.”

5.2 As per the settled position of law, the act of the Court shall

prejudice no one and in such a fact situation, the Court is under an

20

obligation to undo the wrong done to a party by the act of the Court. The

maxim actus curiae neminem gravabit shall be applicable. As per the

settled law, any undeserved or unfair advantage gained by a party

invoking the jurisdiction of the court must be neutralized, as the

institution of litigation cannot be permitted to confer any advantage on a

suitor by the act of the Court.

6. Applying the principle of restitution and the law-laid down by this

Court in the case of Indore Development Authority (supra) on the

principle of restitution to the facts of the case on hand, we are of the

opinion that this is a fit case to apply the principle of actus curiae

neminem gravabit and the principle of restitution and to direct Shri

Naresh Kempanna and Col. Mohinder Khaira to return the amount and

deposit the same with this Court with 9% interest from the date on which

the payment is received by them. However, with the liberty in their favour

to move appropriate application(s) or appropriate proceedings before

this Court for adjudication of their rights to receive any amount from the

sale proceeds of the land sold to M/s Devas Global LLP.

7. In view of the above and for the reasons stated above, Shri Naresh

Kempanna and Col. Mohinder Khaira are hereby directed to return and

deposit the amount paid to them (i.e., Rs. 56.11 crores paid to Shri

Naresh Kempanna and Rs. 41.96 crores paid to Col. Mohinder Khaira),

21

paid pursuant to the earlier order(s) passed by this Court, with 9%

interest from the date on which the amount is received, to be deposited

with the Registry of this Court within four weeks from today. However, it

will be open for either of them to move appropriate application(s) or

appropriate proceedings for adjudication of their rights to receive any

amount from the sale proceeds of the land sold to M/s Devas Global LLP

and as and when such application(s) is/are made, the same be

considered in accordance with law and on its own merits.

Present application is disposed of in terms of the above.

I.A. No. 47525 of 2021 filed for impleadment is also disposed of.

 ………………………………….CJI.

 [Dr. D.Y. Chandrachud]

 ………………………………….J.

[M.R. Shah]

NEW DELHI;

MARCH 23, 2023.

22