Corrections in the Post on Art. 226 and 227

 The conclusions arrived in the earlier post on Art. 226 and 227 have been modified after some thought. Those interested may go through the same.

Standards in Public Life II: The Corrupt Public Servants (Forfeiture of Property) Bill

That establishment of higher standards in public life is a cause that I strongly believe in, is clearly reflected in an earlier post. 


Although legislative cogitation alone cannot be a silver bullet in raising the bar in public life, it can, nevertheless, be employed effectively to prevent standards from plummeting. We already have Section 21 of the Indian Penal Code which defines “Public Servants” and spells out certain offences peculiar to this breed (“babudom”), besides the Prevention of Corruption Act (POCA), 1988 which builds on Section 21.

During my limited research on this topic, I also learnt that more than a decade ago in 1999, the Law Commission of India in its 160^th report, under the Chairmanship of Justice Jeevan Reddy, had proposed a bill by the name “The Corrupt Public Servants (Forfeiture of Property) Bill”. The forwarding letter of the report states that the subject of the report was taken up by the Commission suo motu indicating the serious levels of decadence that had come to plague the Establishment and continue to make their presence felt in every sphere of public life.

The Commission acknowledges that the POCA too provides for forfeiture of property earned in excess of the income, but notes with dissatisfaction that forfeiture follows conviction of the offender. Instead, the report proposes to draw inspiration from the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1997 (SAFEMA).

In justifying the need for the proposed law, the report quotes the Hon’ble Supreme Court’s observation from DDA v. Skipper Construction, a judgment delivered by Justice Reddy himself:

"... a law providing for forfeiture of properties acquired by holders of 'public office' (including the offices/posts in the public sector corporations) by indulging in corrupt and illegal acts and deals, is a crying necessity in the present state of our society. The law must extend not only to — as does SFEMA — properties acquired in the name of the holder of such property but also to properties held in the names of his spouse, children or other relatives and associates. 


Once it is proved that the holder of such office has indulged in corrupt acts, all such properties should be attached forthwith. The law should place the burden of proving that the attached properties were not acquired with the aid of monies/properties received in the course of corrupt deals upon the holder of that property as does SAFEMA whose validity has already been upheld by this Court in the aforesaid decision of the larger Constitution Bench. 


Such a law has become an absolute necessity, if the canker of corruption is not to prove the death-knell of this nation. According to several perceptive observers, indeed, it has already reached near-fatal dimensions. It is for the Parliament to act in this matter, if they really mean business."

The report is very candid much to one’s surprise for it notes thus:

“When a public servant is paid bribe of, say, a lakh of rupees, it is paid for the reason that the payer gets at least 10 times the benefit, if not more, and that benefit is the loss of the State and the people........ There is no respect for public money and public funds in the minds of many in the administration; public money is nobody's money.”

On the state of affairs where politicians are involved, it says:

“The Prevention of Corruption Act has totally failed in checking the corruption. In spite of the fact that India is rated as one of the most corrupt countries in the world, the number of prosecutions — and more so the number of convictions under the said Act is ridiculously low. A corrupt minister or a corrupt top public servant is hardly ever prosecuted under the Act and even in the rare event of his being prosecuted, the prosecution hardly ever reaches conclusion.”

As for the inadequacy of the existent framework, it notes that although forfeiture of property is not a new feature in Indian penal law, such forfeiture comes only after conviction. Therefore, the report opines that the measures proposed in SAFEMA must be adopted to tackle corruption as well. 


SAFEMA reverses the burden of proof on the offender wherein he has to show how the property forfeited was not obtained through ill-gotten wealth. This extends to his relatives as well and the word “relative” has been defined broadly to include all “near relatives”.

Further, the report introduces the concept of implied trust and breach of trust from a different perspective- according to it, the property bought by the offender using the bribe paid to him in lieu of breach of his duty belonged to the State in equity.

Incorporating the above features, the Bill proscribes holding or possession of properties acquired through illegal means. A Competent Authority is identified which has the power to call upon a person to account for the property, regardless of it being situated within or outside India. 


Further, the Authority has the power to seek disclosure of information from any authority, bank or organization and failure to do so would attract punishment. The Authority is also vested with certain powers of a Civil Court.

The power to attach property pending proceedings is the highlight of the Bill. The Bill bars jurisdiction of Courts with regard to grant of injunctions against the Authority but clarifies that Article 226 is still open to the aggrieved party.

Interestingly, the report notes that no party had objected to any provision of the Bill, and yet one wonders why the Bill has not become an Act.

Will the powers that be move their celestial derrières and bring this Bill back into the spotlight?

Articles 226 and 227: How are they different?

In an earlier post, I had discussed the scope of revisionary powers of the High Court under section 115 of the CPC. I concluded the post raising the issue of a remedy against the rejection a revision application by the High Court wondering which of the two Articles (226 and 227) would suit the purpose. The relevant portion of the post reads thus:

“Can the decision of a High Court in a revision application be challenged? If yes, how? A decision or order of the High Court in a revision application is not an appealable order under Order 43 of the CPC nor can it be appealed as a decree (under Sections 96 or 100) because the order of the High Court in the revision application is not a decree. Therefore, for a remedy against the order of a Court under Section 115, one has to look beyond the CPC. This would mean the Constitution, but would it be Article 226 or 227?

Article 227 vests the Court with supervisory jurisdiction which it can exercise over subordinate Courts. Since we have already concluded that the High Court is not subordinate to itself, I am assuming Article 226 would be the right provision to invoke in such situations. Of course, I am not very sure of this conclusion, but it seems plausible.”

The question itself has a flaw because instead of seeking a remedy from the rejection of the revision application, one must look for an alternative to the revision application, which may be used despite the rejection of the revision application. To rephrase the question accurately now, one must ask if a writ under Articles 226 or 227 may lie from the order of a subordinate Court after the rejection of a revision petition under Section 115 of the CPC?

The answer is in the affirmative, but which of these is technically the correct provision to be invoked needs to looked into carefully since Courts have often used them interchangeably, and have blurred subtle yet definite distinctions between the two. A 2003 judgment of the Supreme Court compares the two Articles to explain the powers vested in a High Court under each of them.

I am still not clear in my own head, which explains all the more why one needs to think it aloud. The Court in this case has drawn from several sources, commentaries and judgments, to understand the scope of Art.226. The Court observed that a writ of certiorari is but one of the writs that may be issued under Art.226. This writ is employed to keep authorities and Courts subordinate to a High Court within their limits.

This writ may lie from the order of any authority where the authority in question has acted in a judicial or quasi-judicial manner. Further, the Court plays a supervisory role and not an appellate role, therefore it cannot embark on reviewing findings of fact unless there’s a patent error i.e. error which is grossly against the provisions of law. The Court’s primary function is to set right jurisdictional wrongs and to verify if principles of natural justice have been observed where the Court has rightly seized itself of the matter.

In contrast, Art.227 is wider in scope in that it is not bound by technicalities which limit the working of Art.226. Art.227 vests the Court with the power of superintendence which exists independent of its revisional powers under any other law (i.e. CPC). While Art.226, which is the Original jurisdiction of the High Court, may be set into motion only by a party, Art.227 gives a High Court power to call for records suo motu. It can be invoked regardless of a possible alternative to the High Court in the form of an appeal or revision.

Under Art.226, the Court may merely quash the order of the sub-ordinate Court, whereas under Art.227, the Court may direct the sub-ordinate Court as to its proper course of action or may pass an order which replaces the subordinate Court’s order. This explains why a High Court, under Art.227, exercises powers which are similar to appellate powers and hence uses it in parsimony. Only if an appeal is proved to be less efficacious than a writ under Art.227, may the Court entertain such a petition.

That said the situations where Art.227 may be validly raised are similar to the specific situations where a revision may lie before a High Court under section 115(1). This answers our question- when a revision petition is rejected by a High Court, a party may choose to file a writ under Art.226 or a petition under Art.227 depending upon the kind of relief he seeks to elicit from the Court. If he wants the Court to merely set aside the order of the subordinate Court, he may file for a writ of certiorari under Art.226, however if he wants the Court to re-appreciate the case on merits, legal not factual, and chart a course for the sub-ordinate Court, he may file a petition under Art.227. 

Standards in Public Life I

Slightly over a month ago, The Hindu carried a short article about the Chief Election Commissioner, Mr. Navin Chawla, seeking an amendment to Article 324 of the Constitution. Specifically, he had urged for an amendment to clause 5 of the Article to bring all election commissioners on par with each other and to make a case for his call, he cited two instances, one involving the leonine T.N.Seshan and the other involving Chawla and his own predecessor, Mr.Gopalaswami.

As for the first incident, those interested may read this judgment of the Supreme Court interpreting Article 324(5). I then searched for literature to understand the constitutional underpinnings of the Election Commission of India, when I stumbled upon the fifth Report of the Committee on Standards in Public Life in the United Kingdom.

 This report discusses threadbare the standards to be expected of political parties beginning with the seven principles of public life to be observed by holders of public office- selflessness, integrity, objectivity, accountability, openness, honesty and leadership. It occurred to me that in the backdrop of the current fiasco involving Shashi Tharoor and a few other political bigwigs whose names are bound to surface over and over again, this report assumes greater significance.

Selflessness- According to the report, holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.

Integrity- Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

Objectivity- In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

Accountability- Holders of public office are accountable for their decisions and actions to the public

and must submit themselves to whatever scrutiny is appropriate to their office.

Openness- Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

Honesty- Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Leadership- Holders of public office should promote and support these principles by leadership and example.

Sounds very utopian given the situation here, right? Makes one wonder if there'll ever come a time when these ideals/virtues are taken seriously in this country. If someone were to talk of applying these ideals in public life in India, somehow I get the feeling that the speaker is bound to be scoffed at and ridiculed, with some of us saying “you can’t survive in politics if you believe in these”. Stand Corrected! “you can’t survive in Indian politics if you believe in these” is more like it!

What else would explain the failure of people of like T.N.Seshan in elections? What explains the fact that the majority of Indians preferred Nehru over Patel for the post of the Prime Minister? Some might say that both Patel and Seshan lacked charisma(!) I'd like to know what have charismatic leaders done for us or even themselves? Shashi Tharoor oozes oodles of charisma (and this speech is proof of that), but with all due respect to him and his “unblemished record of public service”, his short stint in the Union Cabinet is replete with PR goof ups! 

As for Nehru, his aspirations of becoming a global statesman were cut to size by a shrewd peasant with a silly name called Mao Tse Tung, which indirectly caused Nehru’s untimely death. And let’s not forget that ultimately the country had to pay the price for their charisma in the form of loss of dignity and territory. So much for charisma...

But then, the point is not to vilify any of these undeniably great leaders. The point is that people need to start probing beyond mere face value and should restrain themselves from falling for looks or accent or lineage or anything else superfluous to the task at hand. What must matter is the person's ability to bring tangible and lasting change for the good in the lives of those he represents, if he is given an opportunity to walk the corridors of power.

The person must know how to get the best deal for his people, both in the short and long runs. More importantly, the question must be, does the person have it in him to take a strong call in the interests of his electorate even if it (the electorate) does not agree with his stance? Not surprisingly, these questions do not figure in our discussions because they are not issue-centric, they are individual-centric.

There’s a reason for this which most of us might find unpalatable and politically incorrect. Democracy in India has a different meaning altogether, our interpretation of “Live and Let Live” rarely finds parallels anywhere else other than in the sub-continent. We seem to think that as long as we are given a free hand to do whatever we want and in any manner we want, we live in a democracy. What this means is that every possible tradition which defies logic, and every atrocity thus far perpetrated must be allowed to continue, in the name of democracy. 

The moment the State steps in to straighten things out, it becomes draconian and dictatorial. Probably, most of us need the concept of a State only to keep this huge piece of earth together under one name so that we get a larger territory to continue the same (rotten, decadent and parasitical) way of life. (This again seems to explain why we keep electing a Government which has mastered the art of keeping almost everyone happy by doing nothing at all and just letting things be.)

It appears that this way of life or thinking is common to the people of this part of Asia, meaning India, China, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and to a nominal extent Taiwan. Last April, Jackie Chan seemed to think on these lines only to be voted the least trustworthy celebrity of Hong Kong.

Not for a moment am I suggesting that this pattern of thinking and living is inherent to our culture, which some think is fashionable to do. The past can be blamed only to an extent; beyond that, we are accountable for the consequences of our actions because, culture is transient since people are transient.

If at some point in our history, invertebracy has crept in and has firmly entrenched itself in our national character, it does not give us or anyone the right to paint our entire past and heritage with the same brush. The true test of our core nature would be this period of transition that we are not just witnessing, but are participating in as well.

If I sound like I have problems with democracy, then either the reader has not understood my point or I have not been successful in communicating my point clearly. All I am saying is that unless people stop equating democracy with chaos and unfettered reign of the individual’s whims and fancies, democracy will be a monumental failure in India in the times to come.

If people have problems with the State imposing discipline on them, then they must learn to discipline themselves, because there is no way discipline can be altogether thrown out of the window.

Do I sound like a martinet? Oh I know the reason, it’s the word “discipline”... 

Of Bhishma and Gandhi, Duryodhana and Jinnah

Living alone, sometimes, has its benefits. It gives you the luxury of pursuing the randomest of thoughts, interests and ideas without having to worry about what others may think (of course, this applies to only those of us who are affected by others’ views. For the lucky few who give a fig about what others think, life, for the most part, is a bed of roses).

These random thoughts seem to have a pattern to them, in that, they occur when you least expect them; I say so because they seem to come to the fore when your mind tries to focus on something else important and precious at hand. The mind then, being boundless in its capacity, stores this random thought at the back so that it may be mulled and chewed over at leisure.

One such random thought which occurred to me when I was in Divine presence, is the striking similarity in certain critical aspects between the lives of Gandhi (oh not Rahul or HRH "Madam" Sonia, but Mohandas Karamchand, the “original” Gandhi) and Bhishma (of Vyasa’s epic poem “Mahabharata”), Jinnah and Duryodhana (strangely, these two have never needed introductions).

Before I proceed any further, I must clarify that this is not remotely an attempt at sounding philosophical, I have no such pretensions. Rather, this is probably an illustration of how relevant history (I don’t consider it as mythology) can be, according to me, regardless of the age or era we live in.

Let’s begin with a bit of bittersweet trivia. “Mahabharat”, the serial, that grand magnum opus of Baldev Raj Chopra (not the horrendous imitation by Ekta Kapoor. May Lord Balaji Save us from Balaji Telefilms!), is one of the finest products of India’s syncretic traditions. Why? The script of the series was written by two extremely creative and talented individuals who come from different faiths (do I hear someone say antithetical?), but were bound together by art- Dr.Satish Bhatnagar and Dr.Rahi Masoom Reza. I remember these names distinctly having devoured the entire series bit-by-bit, episode-by-episode, for over 7 times now and still counting. (Sometime in the future, I shall write in detail about my obsession with this epic and its brilliant depiction by the Chopras).

A couple of months ago, in the course of a formal rendezvous with certain members of filmdom, we were told that Satish Bhatnagar was afflicted with the disease most common to his ilk- penury. Apparently, he was or still is in such a pitiable condition that he barely has the resources to make ends meet, leave alone afford his medical expenses.

To my joy, it was revealed that Bollywood’s so-called “brat” Salman Khan had come forward to put Dr.Bhatnagar out of his misery. Indians, most of us, for all our vaunted culture of giving, really have no sense of philanthropy or gratitude.

Guess that’s enough trivia for one post. Moving to the heart of the discussion, what parallels can be drawn between the lives of the “characters” in question? Let’s begin on a macabre note- their deaths. None of them had peaceful deaths (Sanskrit beautifully calls a peaceful death “Anaayasa Maranam”- when people pass away in their sleep), barring probably the exception of Bhishma who saw his life’s dream being achieved, and he passed away in the presence of the One he worshipped- Krishna. 

But then even Bhishma did not live long enough to enjoy the fruits of his life’s penance, which is something Gandhi had in common with him. Further, while Bhishma was killed by someone he dearly loved, Gandhi too was assassinated by one of his people.

Both these individuals were known for their indomitable will power and also, their legendary (and at times controversial) obsession with their life-long vows of celibacy. Both saw celibacy as a condition precedent to achieve their personal and social objectives. 

While Bhishma saw celibacy as a way of pleasing his father and abdicating his claim to the throne in favour of his future step-brothers, Gandhi strongly felt that if he could master his senses and carnal instincts, he could wrest for India its independence from the British. While the former had to face taunts of being a eunuch, the latter was derogated as being “hypersexed”.

If Bhishma felt thoroughly helpless before Duryodhana’s arrogance, dogged obstinacy and intransigence towards mending fences with his cousins, Gandhi thoroughly failed in convincing Jinnah about the futility and dangers of the idea of Pakistan. If Bhishma’s motherland had to suffer partition to satisfy Duryodhana’s insatiable hunger for power, Gandhi had to bend backwards to placate Jinnah and yet had to remain a hapless spectator to the bloody spectre of Partition.

If Bhishma had to pay the price for his undying allegiance to his vows with his life, Gandhi too had to do the same. If one of the strongest causes of the Mahabharata war was the outrage to Draupadi’s modesty, the cause which propelled Gandhi was what he saw as outrage to his Motherland’s modesty. Or some might say that Gandhi had to pay with his life for the outrage of the modesty of the women of one community.

What about parallels between Jinnah and Duryodhana? Most of the similarities have come out above, but what remains to be pointed out are again their deaths. Jinnah died of tuberculosis and Duryodhana died a gruesome death bleeding on the battlefield fending away nature’s scavengers.  

Is there a point behind these comparisons? What is the moral of these lives? Holding on to one’s values is not the same as holding on to one’s vows because after a point, it becomes difficult to ascertain if these vows have come to represent a person’s values or his ego or worse, his fixation with his image in the eyes of those around him.

Why do I say this? In their final years, both Bhishma and Gandhi felt powerless and helpless for none paid heed to their words and they felt like mere props or relics from the past whose presence was needed to further certain vested interests. This leads us to wonder if Gandhi's fasts were his way of reinforcing his place in the larger scheme of things, and if they had the incidental effect of bringing about peace and amity between rioting factions.

It cannot be disputed that holding an entire nation to ransom with threats of fasts-unto-death reflects nerves of steel, but if it has the effect of rendering secondary the interests of the nation, it is best to turn a blind eye to such not-so-selfless displays of will-power.

On a lighter note, does God run out of ideas at times? What else would explain the oft-quoted dictum “History repeats itself”?   

Scope of Revisionary Powers of a High Court

Section 115 of the Code of Civil Procedure has figured in quite a few judgments, although it is worded in a reasonably clear fashion. The provision has been explained in great detail in a judgment delivered by the Supreme Court in Khanna v. Dillon. Let’s take a look at the provision:

(1) The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears-

(a) to have exercised a jurisdiction not vested in it by law, or

(b) to have failed to exercise a jurisdiction so vested, or

(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity,

the High Court may make such order in the case as it thinks fit:

Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings.

(2) The High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate thereto.

(3) A revision shall not operate as a stay of suit or other proceeding before the Court, except where such suit or other proceeding is stayed by the High Court.

The underlined portions of sub-section 1 are instrumental in understanding the true scope and use of the provision. First, it is established that the power of revision is vested only in the High Court. Second, it states that the Court may call for records suo motu or on the application of a party. Third, it is borne out that the records of any Court sub-ordinate to the High Court may be called for. Fourth, such powers of revision may be invoked only in cases which have been decided. Fifth, it may be invoked only in cases in which no appeal lies thereto.

The import of the first three limbs is that the High Court exercises its power of supervision over subordinate Courts in invoking its revisionary powers under the Code. The import of the fourth limb is that an application for revision may be made only after a case has been decided.

As for the fifth limb, this is the one usually perceived as the most ambiguous. It states that a revision may be sought only in cases “in which no appeal lies thereto”. The word “thereto” has been used for a reason; it is to convey that only in situations where an appeal cannot be filed before the High Court, a revision may be filed.

Stated otherwise, where the High Court may be approached through an appeal, be it the first appeal or a second one under Section 100, the High Court is barred from entertaining a revision application. This is because if the High Court may be approached in either the first or second appeals, then the questions sought to be posed in a revision application may be raised validly in the appeal as well. Therefore, since such questions may be placed before the High Court in appeal, there is no need to provide a party with an additional provision in the form of a revision application.

This provision has often been wrongly interpreted by parties to mean that since an appeal may lie from a decision before a higher appellate authority which is subordinate to the High Court, a revision may not lie before the High Court. In other words, when an appeal before an appellate forum (which is subordinate to the High Court) is available to a party, it is not entitled to seek a revision.

This is patently wrong because the High Court derives its powers by virtue of it being vested with supervisory jurisdiction which it may use to set aside a decision of a sub-ordinate Court on grounds of jurisdiction. This is evidenced from the limited circumstances detailed in sub-section 1 which refer to lack of jurisdiction or transgression of powers by a Court sub-ordinate to the High Court.

The next question is, is a Single Judge of the High Court subordinate to the High Court? It has been held that a Single Judge is not sub-ordinate to the High Court and there shall not lie a revision from his decision. This is also because a letters patent appeal is already available to a party aggrieved by the decision of the Single Judge.

If an appeal normally lies before the High Court either as a first appeal or a second appeal, and the right to file such appeal has expired on grounds of limitation, can a party validly rely on section 115 to file a revision instead of the appeal? This is possible because the section speaks of situations where an appeal does not lie and this could be on account of any reason, including unavailability of the right to appeal on grounds of limitation.

Can the decision of a High Court in a revision application be challenged? If yes, how? A decision or order of the High Court in a revision application is not an appealable order under Order 43 of the CPC nor can it be appealed as a decree (under Sections 96 or 100) because the order of the High Court in the revision application is not a decree. Therefore, for a remedy against the order of a Court under Section 115, one has to look beyond the CPC. This would mean the Constitution, but would it be Article 226 or 227?

Article 227 vests the Court with supervisory jurisdiction which it can exercise over subordinate Courts. Since we have already concluded that the High Court is not subordinate to itself, I am assuming Article 226 would be the right provision to invoke in such situations. Of course, I am not very sure of this conclusion, but it seems plausible. I shall continue the discussion in another post soon with a discussion of this judgment of the Supreme Court.

Inherent Powers of the Court: When Can They be Invoked?

Section 151 of the Civil Procedure Code (CPC) is probably one of most frequently (ab)used(?) provisions and is more often than not, the one provision that saves our (blackcoats’) rears. Sometimes we use it to push through an application before the Court, blissfully ignorant that the CPC specifically provides an express provision to move such an application. Does this go against the structure of the Code? To find an answer to this, I thought I might as well spend some time understanding the “metes and bounds” of Section 151.

There’s this 1983 judgment of the Gujarat High Court delivered in the case of In Re Shri Ambica Mills which sets out the limits of Section 151 in great detail and I think it’s a must read for those who intend to understand the CPC better.

The factual matrix is interesting and helps one understand the reasons for decisions taken by counsels and how the Court sees through some of them.

Facts

In this case, an application was made under Section 151 of the CPC read with Rule 9 of the Companies (Court) Rules, 1959 invoking the inherent powers of the Court to have certain remarks expunged from the judgment of the same Court in an earlier company petition.

The applicants were the managing directors of the company Shri Ambica Mills. The earlier company petition was moved by the company under Section 101 of the Companies Act to get an order confirming the reduction in its equity share capital. The presence of paid-up capital which exceeded the needs of the company was cited as the reason for the decision to reduce the share capital. To this end, a resolution with three quarters majority had been passed by the shareholders of the company.

However, this petition was opposed by a certain group of shareholders whose objection to the reduction in the share capital was that the entire scheme was a humbug, aimed at serving the private interests of the 3 managing directors (MDs), who were brothers. The company petition was accordingly dismissed relying on the said objections.

Prior to moving the 151 application by the MDs, the company had already preferred an appeal before the Division Bench of the High Court which had been admitted too. The MDs i.e. applicants in the instant case, too had filed for a stay order on the decision of the Single Judge of the HC dismissing the company petition.

Subsequent to the application for a stay order, the 151 application was filed to seek expungement of certain remarks in the earlier order made against the MDs. The contention of the MDs was that they were never given the opportunity of being heard or defending themselves in the earlier petition and consequently, such remarks were unwarranted and unnecessary for the purpose of arriving at a decision in the earlier petition.

Discussion

The Court first delved into the issue of maintainability of the 151 application read with Rule 9 of the Company Rules. (Rule 9 too deals with inherent powers of the Court, so it stands on par with s.151 of the CPC.)

The Court first observed that:

1. S.151 is not to be exercised as a substantive power for it is procedural and

2. Use of inherent powers under s.151 cannot have the object or effect of going against the provisions of the Code, express and implied.

These observations were paraphrased from the celebrated decision of Manohar Lal v. Rai Bahadur Rao Raja Hira Lal Seth (AIR 1962 SC 527). I remember this decision particularly well thanks to the booming voice of Barrister Bimol K. Chatterjee (popularly known as BKC) who taught us the fundamentals of the CPC in Law School.

In this case, the Hon’ble Supreme Court observed with clarity that the reason that s.151 should not be interpreted to contravene the provisions of the CPC was not because the latter controlled the former, but because the other provisions reflected the express will of the Legislature and in its wisdom, served the interests of justice in the circumstances envisaged.

Simply put, to use s.151 to read down the other express provisions would go against the cardinal principle of interpretation of statues- to respect and to give effect to the will of the Legislature.

The Court then considered other alternatives which the MDs could have preferred instead of a 151 application. Order 20, Rule 3 accordingly was given some thought; Rule 3 of Order 20 provides for addition to or alteration of the judgment either under Section 152 or through a review under Section 114 read with Order 47.

To this the counsel for the MDs clarified that he had no intention of invoking the review powers of the Court. The Court contended that if review was not sought, and if an application under 152 does not lie since the case was not that of an accidental slip or arithmetic error, then an application under 151 wouldn’t lie either since the impugned remarks were material to the Court’s findings in the earlier petition.

The Court compared s.151 to s.561 of the CrpC and said that remarks which are material to the Court’s analysis cannot be sought to be expunged. Expungement, according to the Court, is possible only if sweeping observations, which are irrelevant to the case, are made by the Court. Such expungement may be sought by parties to the case or a stranger who has been named by the Court in its remarks.

In this case, since the very allegation against the Company was that the whole scheme of reduction of paid-up capital was a sham to feather the nests of the MDs, it was inevitable for the Court to discuss the conduct of the MDs to decide the case on merits.

Going a step further, the Court discussed certain other alternatives as well; the Court observed that since strangers to a case could not avail of the review option, they could resort to a writ under Article 226 wherein the Court could justifiably exercise powers of review.

In short, what the Court was alluding to was that the 151 application was ruse on the part of the MDs since a review was not possible (as an appeal had already been preferred) and an application under 152 wouldn’t lie here since the case was not that of an accidental error.

In light of the Court’s observations on s.151, there’s another question which I feel must be asked. Section 151 may not be used to contravene other express provisions, but can it be used to supplement them? The answer is in the affirmative since quite a few applications which we move before the Court (like the ones under Order 13) are usually read with Section 151 so as to invoke the powers of the Court if express provisions, although invoked, do not adequately provide for suitable remedies.