Leela Hotels Ltd vs Housing & Urban Dev.Corp.Ltd

It is the common case of the parties that on 17th

October, 1996, the Housing and Urban Development

Corporation Ltd. (HUDCO) invited offers for grant

of sub-lease of land measuring 11,480 sq. meters in

HUDCO Place situated in Andrews Ganj, New Delhi,

for construction of a Five-Star Hotel thereupon.

The Appellant herein being the highest bidder, a

letter of allotment of the said land was issued to

it on 31st March, 1997, which was followed by a

perpetual sub-lease dated 4th July, 1997. Out of

the total consideration, the first instalment

comprising 40% of the consideration amount was paid

by the Appellant herein on 10th April, 1997. The

3

second and third instalments, each amounting to

Rs.65,38,29,000/-, were payable by 31st March, 1998,

and 31st March, 1999, respectively. It was

stipulated in the sub-lease that in case of default

in payment of the second and third instalments, the

same could be paid along with interest at the rate

of 20% per annum within three months of the due

date. It was further stipulated that in default of

payment even in terms of the said relaxation, the

allotment would automatically stand cancelled and

in such event 50% of the amount paid upto that date

would stand forfeited and the balance 50% would be

refunded without interest. Admittedly, the second

instalment was paid by the Appellant herein along

with interest for the delayed payment and ground

rent was also paid till 31st March, 1998. Since,

however, the Appellant defaulted in payment of the

third instalment, the lease agreement was cancelled

and as per the terms of the agreement 50% of the

4

total amount paid by the Appellant amounting to

Rs.76,28,00,500/- was refunded by the Corporation

to the Appellant, while forfeiting the balance 50%.

3. Being aggrieved by the steps taken by the

Respondent Corporation, the Appellant filed a

Petition before the Chief Justice of the Delhi High

Court to appoint an Arbitrator in terms of the

arbitration clause, which was registered as

Arbitration Application No.193 of 1999. On 23rd

June, 1999, an Arbitrator was appointed by the

Delhi High Court before whom the Appellant herein

claimed a sum of Rs.142,16,08,896/- from the

Respondent Corporation along with interest at the

rate of 20% per annum along with a further sum of

Rs.19,24,45,800/- comprising the ground rent paid

along with interest thereon at the rate of 25% per

annum along with a sum of Rs.5,98,22,058/- towards

refund of property tax. A sum of Rs.5,62,27,715/-

was also claimed by way of damages.

5 4. The learned Arbitrator allowed the claims of

Leela Hotels and rejected the counter-claim made by

HUDCO. In his Award, the learned Arbitrator held

that Leela Hotels was entitled to recover and HUDCO

was obliged to pay damages computed with regard to

the amounts paid as the first and second

instalments of the premium, together with interest

paid with the second instalment, less the amount

refunded by HUDCO to Leela Hotels under letter

dated 8th July, 1999, and as further reduced by the

amount of property tax paid by HUDCO on behalf of

Leela Hotels to the Municipal Corporation of Delhi.

It was also directed that the interest at the rate

of 20% per annum would be paid by HUDCO to Leela

Hotels on the amount representing property tax for

the period during which the amount remained with

HUDCO until payment to MCD and also on the amount

refunded by HUDCO under its letter dated 8th July,

1999, for the period for which that amount remained

6

with HUDCO until repayment to Leela Hotels. Leela

Hotels was also held to be entitled to such

interest on the balance of the amount from the date

of the respective payments made initially by Leela

Hotels to HUDCO till the date of the Award.

5. The Appellant filed its objections under

Section 34 of the Arbitration and Conciliation Act,

1996, hereinafter referred to as the "1996 Act",

before the High Court. The same was dismissed by

the High Court by its order dated 21st January,

2003. Before the said petition was dismissed, the

Respondent herein undertook to deposit the

principal sum awarded by the Arbitrator on or

before 21st October, 2002. The said sum of

Rs.89,78,84,930/-, was allowed to be deposited

without prejudice to the rights and contentions of

the Respondent herein. When the cheque for the

aforesaid amount was brought to Court on 21st

October, 2002, the said Respondent got it recorded

7

that it represented the net principal amount due

and payable to the Appellant herein under the Award

and that the said deposit was without liability on

its part to pay future interest thereupon.

6. The first appeal from the said order dated 20th

January, 2003, having been dismissed by the High

Court on 9th November, 2004, the Respondent filed a

Special Leave Petition before this Court, which was

dismissed on 12th February, 2008. Although, the

Special Leave Petition was dismissed, the rate of

interest for the pre-Award period was reduced from

20% to 18% per annum. Furthermore, since this

Court had directed the Appellant to pay or deposit

50% of the balance decretal amount, the Respondent

paid a sum of Rs.59.61 crores to the Appellant

herein on 23rd March, 2006. The Respondent paid a

further sum of Rs.48.09 crores to the Appellant

herein on 16th April, 2008, which, according to the

8

Respondent, satisfied the decree. This, in fact,

was the genesis of the dispute between the parties.

7. As far as the Appellant herein was concerned,

in its calculation sheet the sum of

Rs.89,78,84,930/- was shown to be appropriated

towards the interest due under the Award. A claim

was also made for interest on the interest. On the

other hand, in the calculation sheet filed by the

Respondent herein it was indicated that the

aforesaid amount deposited should be appropriated

towards the principal sum payable to the Appellant

herein under the Award and had calculated simple

interest at the rate awarded by the Arbitrator as

modified by this Court. Consequently, as was noted

by the Division Bench of the Delhi High Court, the

controversy which surfaced on account of the

contesting claims of the parties was whether the

aforesaid amount could be adjusted, as claimed by

the Appellant herein, towards the interest, or was

9

the Appellant obliged to appropriate the said sum

towards the principal sum due to it under the

Award. A further question which surfaced was

whether the Appellant herein was entitled to charge

interest on interest or compound interest in

accordance with the method indicated in the

calculation sheet filed by it.

8. In dealing with the first question as to

whether the payment made by the judgment-debtor is

to be appropriated first towards discharge of the

principal or towards discharge of the interest, the

Division Bench noted the decision of this court in

M/s I.C.D.S. Ltd. Vs. Smithaben H. Patel & Ors.

[(1999) 3 SCC 80], wherein, this Court had held

that Sections 59 and 60 of the Contract Act, 1872,

would only be applicable at the pre-decretal stage

and not thereafter and that post-decretal payments

would have to be made either in terms of the decree

or in accordance with the agreement arrived at

10

between the parties, though, on the genuine

principles indicated in Sections 59 and 60 of the

aforesaid Act. After referring to various other

decisions of this Court and the Lahore High Court,

the Division Bench of the High Court referred to

the decision in Meghraj Vs. Mst. Bayabai & others,

[AIR 1970 SC 161], wherein the law in this regard

was laid down by this Court that the general rule

of appropriation of payment towards a decretal

amount is that such an amount is to be adjusted

firstly strictly in accordance with the directions

contained in the decree and in the absence of such

direction, adjustments would have to be made

firstly towards payment of interest and costs and,

thereafter, in payment of the principal amount. It

was, however, indicated that such a principle would

be subject to an exception when the parties might

agree to the adjustment of the payment in any

manner despite the decree. It was, accordingly,

11

held that unless the Respondent herein was able to

show that the parties had either impliedly or

expressly agreed to adjustment of the said sum of

Rs.89,78,84,930/- towards the principal amount, the

Appellant herein would be entitled to appropriate

the said amount fully towards the payment of

interest.

9. It may be indicated that on 11th October, 2002,

the Respondent herein undertook to deposit the

principal amount awarded by the Arbitrator on or

before 21st October, 2002. Such deposit was allowed

to be made without prejudice to the rights and

contentions of HUDCO in the proceedings before the

High Court. Subsequently, by order dated 21st

October, 2002, the said position was reiterated and

it was recorded that the deposit made by the

Respondent would be without prejudice to the rights

and contentions of the parties in the pending

proceedings and without any liability on the part

12

of the Respondent to make payment of further

interest on the above-mentioned amount. The

Division Bench took the view that having regard to

the submissions made on behalf of the Respondent

herein that the said amount of Rs.89,78,84,930/-

was on account of the principal sum due and payable

to the Appellant herein under the Award, and since

no objection had been raised by the Appellant

herein to such contention, it would have to be held

that the said sum had, in fact, been adjusted

towards the principal sum. After observing that

before withdrawing the amount, the Appellant herein

had neither sought permission of the Court to

appropriate the sum towards interest nor given any

intimation regarding withdrawal of the said amount,

the Division Bench made it clear that the said

amount would be appropriated towards the principal

amount due and not towards interest. The Division

Bench noted that the amount being withdrawn was

13

without prejudice to the Appellant's rights towards

payment of interest. The Division Bench took the

view that since the Respondent herein was keen to

avoid the possibility of paying further interest on

the principal sum, in the event of its objections

being dismissed, it offered to deposit the

principal sum payable under the Award. The

Division Bench observed that it made good business

sense on the part of the Appellant, at that time,

to accept the aforesaid amount towards the

principal sum payable to it under the Award and to

utilize the said sum for its business, instead of

waiting for the final outcome of the litigation

between the parties. The Division Bench came to

the conclusion that it was in such circumstances

that the Respondent had agreed to deposit the said

sum of Rs.89,78,84,930/- specifically, towards the

principal amount under the Award.

14 10. The Division Bench further observed that both

the parties were duly represented by their

respective counsel, when the Respondent herein

offered and undertook to deposit the principal

amount awarded by the Arbitrator and also insisted

that it be recorded as part of the proceedings that

the said payment was to be appropriated towards the

principal amount awarded by the learned Arbitrator

and was without any further liability on the part

of the Respondent to make payment of further

interest on the said amount. The Division Bench

based its judgment, to a large extent, on the

assumption that since the Appellant had remained

silent to the said stipulation made on behalf of

the Respondent, it would have to be presumed that

the Appellant herein had consented to the said

proposal.

11. On such reasoning, the Division Bench set aside

the order passed by the learned Single Judge on 19th

15

November, 2008, and after noting that a sum of

Rs.50.54 crores had been deposited by the

Respondent No.1 herein during the pendency of the

Appeal, directed him to decide in the light of the

judgment rendered by the Division Bench as to

whether any further amount was payable by the

Respondent No.1 herein to the Appellant in terms of

the judgment. Consequential directions were also

given on the outcome of such findings.

12. As mentioned hereinbefore, this Appeal is

directed against the said judgment of the Division

Bench dated 20th July, 2009.

13. Appearing for the Appellant, Mr. Ashok Desai,

learned Senior Advocate, submitted that the crucial

question to be considered and decided in this case

was whether the amounts deposited or paid by HUDCO

from time to time were to be appropriated first

towards the interest payable on the principal

16

amount, following the decision in Smithaben's case

(supra), or towards the principal, having regard to

the provision in the Award relating to future

interest which states that Leela Hotels is entitled

to interest at the rate of 15% per annum from the

date of the Award to the date of recovery. Mr.

Desai submitted that the language of the Award is

clear that the amount on which future interest has

to be calculated includes interest awarded by the

Arbitrator till the date of the Award. Mr. Desai

submitted that it was not a case of compound

interest, but a case of calculating simple interest

on the amount as remained unpaid each year. Mr.

Desai also submitted that after the Award had been

passed, Leela Hotels had calculated interest on the

basis of yearly rests, but subsequently gave up its

claim on the basis of compound interest and limited

its claim to simple interest after appropriating

the amount received from HUDCO first towards

17

interest and then towards principal, in accordance

with the decision in Smithaben's case (supra). Mr.

Desai submitted that the High Court had erred in

accepting the calculation made by HUDCO which had

not computed the amount awarded by the Arbitrator

and had not computed future interest in terms of

the Award.

14. On the second issue as to how the money paid by

HUDCO is to be appropriated, Mr. Desai urged that

in Smithaben's case (supra), it had been very

clearly explained that in view of the consistent

view taken first by the Privy Council and then by

this Court, the general rule of appropriation of

payment towards a decretal amount is that such an

amount is to be adjusted firstly in accordance with

the directions contained in the decree and in the

absence of such directions, adjustment should

firstly be made in payment of interest and costs

and thereafter towards payment of the principal

18

amount. Mr. Desai urged that the Division Bench

had misapplied the ratio in Smithaben's case

(supra) in assuming that the unilateral and

voluntary deposit offered to be made by HUDCO in

Court amounted to such deposit being made upon an

implied acceptance that the same would be

appropriated towards the principal amount. It was

urged that the issue of implied agreement had never

been raised or argued before the learned Single

Judge and there is no pleading in support thereof.

Mr. Desai also urged that the provisions of

Sections 59 and 60 of the Indian Contract Act would

also have no application to the facts of this case

since they only applied in regard to distinct debts

and not for enforcing a decree or what is regarded

as a decree by legal fiction.

15. Mr. Desai submitted that the judgments of both

the learned Single Judge and the Division Bench

were centered around the payment of Rs.89.78 crores

19

and the manner in which the same was to be

appropriated. It was urged that since the same was

paid after the passing of the decree, Leela Hotels

is entitled to appropriate the said amount first

towards the interest and costs and then towards the

principal. Mr. Desai urged that on account of the

wrong assumptions made by the Division Bench, its

judgment under appeal was liable to be set aside.

16. On the other hand, appearing for HUDCO, Mr.

Parag P. Tripathi, learned Additional Solicitor

General, firstly urged that the issue regarding

charging of compound interest did not survive,

since the parties had agreed that no compound

interest was payable in terms of the Award. As to

the other question as to whether the sums deposited

by HUDCO were to be appropriated first against the

interest and then against the principal, it was

contended that the same was no longer res integra

since the Award had made it clear that the first

20

payment of Rs.76.28 crores had to be reduced from

the principal amount which was due. The learned ASG

submitted that it was for the first time before

this Court that the Appellant has contended that

the sum of Rs.76.28 crores would be appropriated

first towards the interest and then towards the

principal amount. The learned ASG pointed out that

the refund had been made even prior to the making

of a Reference to the Arbitrator or pronouncing of

the Award i.e. at the pre-decretal stage and,

accordingly, when the refund was made, there was no

determination as to whether any payment was due

from HUDCO to the Appellant. Accordingly, the

contention of Leela Hotels that the said refund of

Rs.76.28 crores was to be first appropriated

towards the interest does not even arise. It was

also submitted that the first payment of 50% of the

awarded amount amounting to Rs.76.28 crores was,

therefore, treated by the Award to be payment

21

appropriated towards the principal and since the

Award had not been challenged by the Appellant

herein, the objections to the Award under Section

34 of the Act filed by the Respondent also stood

concluded by the decision of this Court in Civil

Appeal No.1094 of 2006.

17. As regards the second amount of Rs.89.78 crores

tendered by HUDCO in the Delhi High Court on 21st

October, 2002, during the pendency of the

proceedings under Section 34 of the Arbitration and

Conciliation Act, 1996, it was submitted by the

learned ASG that the same has to be appropriated

towards the principal amount due from HUDCO to

Leela Hotels. It was submitted that the said

amount was in the nature of a pre-decretal payment

and that the appropriation of the amount will have

to be in the manner indicated by the Respondent to

which there had been no demur.

22 18. It was next submitted by the learned ASG that

analogy of a post-decretal payment cannot be

applied to an Arbitration Award under the 1996 Act

for the simple reason that the Arbitration Award

under the 1996 Act does not attain the status or

character of a decree within the meaning of the

Code of Civil Procedure. It is to be executed "as

if it were a decree", which means that it is not a

decree.

19. It was thirdly urged by the learned ASG that

assuming that the Award could be treated as a

decree and the second payment is a post-decretal

payment, even then the said payment will have to be

treated as appropriation towards the principal sum,

since Leela Hotels had been duly intimated of the

nature of the deposit and by way of an implied

contract, Leela Hotels had appropriated the said

sum towards the principal.

23 20. The learned ASG referred to the decision of

this Court in NALCO Vs. Presteel & Fabrication Pvt.

Ltd. [(2004) 1 SCC 540], wherein it had been held

that there is no question of any decree being

honoured pursuant to the passing of an Award and

unlike a judgment within the meaning of the Civil

Procedure Code, an Award remains unenforceable

during the period available for challenging the

Award, and, thereafter, till such time as the

Petition under Section 34 is disposed of by the

appropriate Court. Reference was also made to the

decision of this Court in (1) Paramjeet Singh

Patheja Vs. ICDS Ltd. [(2006) 13 SCC 322], wherein

it was explained that the Arbitrator is not a Court

and accordingly an arbitration is not an

adjudication and an Award is not a decree, (2)

Morgan Securities and Credit Pvt. Ltd. Vs. Modi

Rubber Ltd. [(2006) 12 SCC 642] and (3) West Bengal

Essential Commodities Supply Corporation Vs.

24

Swadesh Agro Farming & Storage Pvt. Ltd. & Anr.

[(1999) 8 SCC 315], where similar views have been

expressed. Reference was also made to the decision

of the Privy Council in the case of Rai Bahadur

Seth Nemichand Vs. Seth Radha Kishen [AIR 1922 PC

26], wherein it was, inter alia, held that a

creditor to whom principal and interest are owed is

entitled to appropriate any indefinite payment

which he gets from a debtor towards the payment of

interest. However, a debtor might in making a

payment stipulate that it was to be applied only

towards the principal. If such a stipulation was

made, the creditor was at liberty to refuse the

payment on such terms, but then he would have to

give back the money or the cheque by which the

money was offered. If the amount was accepted then

the creditor would be bound by the appropriation as

proposed by the debtor.

25 21. As to the decision of this Court in

Smithaben's case (supra), the learned ASG submitted

that the payment was unilaterally made out of Court

by the debtor with a covering letter, which was

immediately responded to by the decree-holder who

made it clear that he had appropriated the amount

towards interest alone. This Court, therefore,

held that the creditor was not bound by the

appropriation so made by the debtor. The learned

ASG submitted that in the instant case the

Respondent had tendered a sum of Rs.89.78 crores in

Court as payment towards the principal amount and

the same had been accepted by Leela Hotels without

objection and accordingly the decision in

Smithaben's case (supra) would have no application

to the facts of this case. The learned ASG

submitted that there being little or no substance

in the Appeal, the same was liable to be dismissed

with costs.

26 22. Of the two issues involved in this matter, it

appears that the issue relating to charging of

compound interest did not survive since the parties

had agreed that no compound interest would be

payable in terms of the Award. In fact, although

such an assertion had been made by the learned ASG,

the same was not seriously opposed by Mr. Desai who

had taken the stand that this was not a case of

compound interest, but a case of calculating simple

interest on the amount as remained unpaid. Mr.

Desai also accepted the position that after the

Award had been passed by the learned Arbitrator,

Leela Hotels had calculated the interest on the

basis of yearly rests, but had subsequently given

up its claim of compound interest and limited its

claim to simple interest after appropriating the

amount received from HUDCO, first towards interest

and then towards the principal in accordance with

the decision in Smithaben's case (supra).

27 23. Consequently, the only issue which remains for

decision is whether the amounts deposited and/or

paid by HUDCO to M/s Leela Hotels in terms of the

Award of the learned Arbitrator, was first to be

appropriated towards payment of the interest due on

the principal sum or whether the same was to be

appropriated against the principal sum itself.

24. From the submissions made on behalf of the

respective parties, the following payments appear

to have been made by HUDCO to the Appellant

herein:-

(i) 12.07.1999 - Rs.76.28 crores

(ii) 21.10.2002 - Rs.89.78 crores

(iii) March 2006 - Rs.59.61 crores

(iv) May 2008 - Rs.48.09

crores and

(v) May 2009 - Rs.50.54

crores.

28

It has been contended by the learned ASG that

the amount of Rs.89.78 crores having been paid

towards the principal amount, the other payments

made subsequently were towards interest and,

accordingly, there was no amount due and payable to

the Appellant. On the other hand, it has been

claimed on behalf of the Appellant that the said

sum of Rs.89.78 crores had been appropriated

against the interest as per the decision in

Smithaben's case (supra), and, accordingly, the

stand taken on behalf of HUDCO was erroneous.

25. As indicated hereinbefore, the submissions made

by the learned ASG on behalf of HUDCO was based on

the proposition as contained in Sections 59 and 60

of the Indian Contract Act, 1872, on account of the

stipulation recorded on behalf of HUDCO that the

amount of Rs.89.78 crores was being tendered

towards the principal sum, to which there was no

29

objection from the Appellant and, accordingly, it

must be held that that since the amount had been

received without demur, such payment fell within

the provisions of Section 59 of the aforesaid Act.

In fact, the Division Bench of the High Court

proceeded to consider such payment and acceptance

to be a voluntary acceptance by the Appellant of

the aforesaid amount as appropriation towards the

principal as it made good business sense to accept

the same and to utilise the same in spite of

waiting for something indefinite in the future.

Such a submission, though legal and correct, is not

supported by the materials on record.

26. Admittedly, there was no agreement between the

parties as to how the amounts to be paid in terms

of the Award were to be appropriated by the

Appellant. Accordingly, in terms of the well

settled principle that in such cases it was for the

creditor to appropriate such payment firstly

30

against the interest payable, would, in our view,

be squarely attracted to the facts of this case.

As was laid down by the Privy Council in Meka

Venkatadri Appa Rao Bahadur Zamindar Garu & Ors.

Vs. Raja Parthasarathy Appa Rao Bahadur Zamindar

Garu [AIR 1922 PC 233], and later reiterated in Rai

Bahadur Seth Nemichand's case (supra), when monies

are received without a definite appropriation on

the one side or the other, the rule which is well

established in ordinary cases is that in those

circumstances, the money is first applied in

payment of interest and when that is satisfied, in

payment of the capital. In the latter case, the

said principal was restated and it was indicated

that a creditor to whom principal and interest are

owed is entitled to appropriate any indefinite

payment which he gets from a debtor to the payment

of interest. It was also indicated that a debtor

might in making a payment stipulate that it was to

31

be applied only towards the principal. If he did

so, the creditor was at liberty to refuse payment

on such terms, but then he would have to give back

the money or the cheque by which the money is

proffered and if the same is accepted, the creditor

would then be bound by the appropriation as

proposed by the debtor.

27. In the instant case, a unilateral assertion had

been made by HUDCO as the debtor that the sum of

Rs.89.78 crores was being tendered as payment

towards the principal amount and that there was,

therefore, no other amounts due and payable to the

creditor Leela Hotels Ltd. The principle as laid

down in the two aforesaid decisions, and as

subsequently followed in Smithaben's case (supra)

will not apply in the facts of the instant case,

since the amount as deposited was accepted by the

Appellant without prejudice to its rights and

contentions in the appeal. Since the amount had

32

been accepted on protest, the principle laid down

in Rai Bahadur Seth Nemichand's case (supra) will

have no application.

28. The philosophy behind the principle set out in

Meka Venkatadri's case (supra) and as reiterated in

Rai Bahadur Seth Nemichand's case (supra) and also

in Smithaben's case (supra) and then consistently

followed by this Court, is that a debtor cannot be

allowed to take advantage of his default to deny to

the creditor the amount to which he would be

entitled on account of such default, by way of

elimination of the principal amount due itself,

unless, of course, the provisions of Section 59 of

the Indian Contract Act, 1872, were attracted or

there was a separate agreement between the parties

in that regard. That is not so in the instant case

and, accordingly, the creditor cannot be denied its

dues on a unilateral stipulation that the amount of

Rs.89.78 crores was being deposited as against the

33

principal sum due in terms of the Award. Since the

said amount was accepted by the Appellant on

protest, it would be entitled to appropriate the

same against the interest which was due and payable

till that date on the principal amount, as has been

asserted by it.

29. In our view, the Division Bench of the Delhi

High Court erred in presuming that the said amount

had been accepted by the Appellant on account of

good business sense in view of the uncertainty of

the final outcome of the case. In our view, the

Division Bench of the High Court should have

proceeded on the basis of the principles of law as

laid down by this Court in Smithaben's case

(supra), keeping in mind the earlier decisions of

the Privy Council in both Meka Venkatadri's case

(supra) and Rai Bahadur Seth Nemichand's case

(supra) in interfering with the judgment of the

learned Single Judge. The Division Bench seems to

34

have erroneously taken the presence of the learned

counsel for the Appellant, when the aforesaid

undertaking of the Respondent was recorded, in

coming to the conclusion that since no objection

had been raised with regard to the said deposit, it

must be presumed that it had the consent of the

Appellant and hence was covered by the provisions

of Sections 59 and 60 of the Indian Contract Act,

1872.

30. Regarding the question as to whether the Award

of the learned Arbitrator tantamounts to a decree

or not, the language used in Section 36 of the

Arbitration and Conciliation Act, 1996, makes it

very clear that such an Award has to be enforced

under the Code of Civil Procedure in the same

manner as it were a decree of the Court. The said

language leaves no room for doubt as to the manner

in which the Award of the learned Arbitrator was to

be accepted.

35 31. Hence, the submissions made by the learned ASG

on behalf of HUDCO cannot be accepted and are,

therefore, rejected. Consequently, the Appeal

succeeds and the judgment and order of the Division

Bench of the High Court is set aside and that of

the learned Single Judge is restored.

32. Having regard to the nature of the issues

involved in this case, the parties will bear their

own costs.

...............................................................J.

(ALTAMAS KABIR)

...............................................................J.

(CYRIAC JOSEPH)

...............................................................J.

(SURINDER SINGH NIJJAR)

New Delhi

Dated: 15.11.2011