Supreme Court of India
BHUPINDER SINGHversusUNITECH LIMITED
- Citation
- 2023 INSC 283
- Decided
- 23 March 2023
- Disposal
- Disposed off
- Bench
- D Y CHANDRACHUD
Holding
The Court held that the earlier order was a mistake and, applying the principle of restitution, directed the respondents to return the Rs. 98.07 crore with interest to the Court Registry.
Summary
The Supreme Court examined an application filed by Unitech Limited seeking restitution of Rs. 98.07 crore that had been paid to Shri Naresh Kempanna and Col. Mohinder Khaira under an earlier order directing distribution of sale proceeds from a land transaction with M/s Devas Global Services LLP. Unitech argued that it was the absolute owner of the land and entitled to the entire consideration, and that the earlier order was based solely on an MOU without adjudicating the parties' rights, constituting a mistake. The Court applied the principle of restitution, citing Indore Development Authority v. Manoharlal and other precedents, and held that the court must undo the erroneous order to prevent unjust enrichment. It directed the respondents to return the amounts with 9% interest to the Supreme Court Registry. The application and the related impleadment petition were disposed of, and the respondents were given liberty to seek adjudication of any further rights.
Issues considered
- The correctness of the earlier Supreme Court order directing payment of sale proceeds to Shri Naresh Kempanna and Col. Mohinder Khaira.
- Whether the principle of restitution applies to correct a judicial mistake in the distribution of sale consideration.
- Whether the respondents are obligated to return the amounts with interest under the doctrine of actus curiae neminem gravabit.
- The court's inherent jurisdiction to order restitution notwithstanding the specific provisions of Section 144 CPC.
Legislation cited
- Code of Civil Procedure, 1908s. 144, s. 24
Subjects
RestitutionActus curiae neminem gravabitSale considerationLand transactionUnitech LimitedDevas Global Services LLPSection 144 CPCInherent jurisdictionUnjust enrichmentInterest
Judgment
950 [2023]REPORTS
SUPREME COURT 4 S.C.R. 950 [2023] 4 S.C.R.
A BHUPINDER SINGH
v.
UNITECH LIMITED
(I.A. Nos. 88960 of 2020 & 47525 of 2021)
B In
(Civil Appeal No. 10856 of 2016)
MARCH 23, 2023
[DR. D. Y. CHANDRACHUD, CJI AND M. R. SHAH, J.]
C
Doctrines/Principles – Principle of Restitution – Pursuant to
the earlier orders passed by Supreme Court, dispute w.r.t the sale
consideration in respect of the land in question owned by ‘UL’ in
favour of M/s. ‘DGS’, an LLP came to be confirmed in favour of
‘DGS’ – As per ‘UL’, since it was the absolute owner of the land in
D question therefore entitled to the entire sale consideration however,
it received only a part of it and the balance amount was ordered to
be paid to the respondents who were not entitled – Held: Pursuant
to the earlier order(s), it appears that solely on the basis of the
report submitted by Justice Dhingra Committee on the basis of an
E MOU and without adjudicating the rights of the respective parties,
Supreme Court passed order directing to pay the balance amount
to the respondents out of sale proceeds of the land sold to ‘DGS’ –
There was no adjudication on the entitlement of the amount paid to
the respondents which is seriously disputed – Thus, there was an
obvious error and/or mistake on the part of Supreme Court – The
F
act of the Court shall prejudice no one and in such a fact situation,
the Court is under an obligation to undo the wrong done to a party
by the act of the Court – 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
G advantage on a suitor by the act of the Court – Respondents to
return the amount and deposit the same with interest in the Registry
of Supreme Court – actus curiae neminem gravabit.
Indore Development Authority Vs. Manoharlal and
Others (2020) 8 SCC 129 : [2020] 3 SCR 1 – followed.
H
950
BHUPINDER SINGH v. UNITECH LIMITED 951
Case Law Reference A
[2020] 3 SCR 1 followed Para 5.1
CIVIL APPELLATE JURISDICTION: I.A. Nos. 88960 of 2020
& 47525 of 2021 in Civil Appeal No. 10856 of 2016.
From the Judgment and Order dated 30.09.2016 of the National B
Consumer Disputes Redressal Commission Bench No.3, New Delhi in
Execution Petition No.131 of 2016 in Consumer Complaint No. 1279 of
2015 (Execution).
Pawanshree Agrawal, (A.C.), Varun K. Chopra, Advs.
Siddhartha Dave, Sr. Adv., Deepak Goel, Vishal Gosain, Anuroop C
Chakravarti, Ms. Ranjeeta Rohatgi, Mrs. Samten Doma, Ms. Aarushi
Singh, Abhishek S More, Nitin V Nagar, Ms. Anubha Agrawal, Joshua
Samuel, Sahil Tagotra, Abhishek Pandey, Dr. J. P. Dhanda, Ms. Raj
Rani Dhanda, Asokh Vasishtha, Advs. for the Appellant.
K.M. Nataraj, Ms. Madhavi Divan, ASGs, Lokesh Sinhal, Sushil D
Kumar Sharma, Sr. AAGs, B. K. Satija, AAG, Ravindra Kumar, Nikhil
Nayyar, Rajiv Dutta, Mrs. Garima Prashad, Deepak Nargolkar, Sr. Advs.,
Pawanshree Agrawal, Binay Kumar Das, Ms. Priyanka Das, Ms. Neha
Das, Shreekant Neelappa Terdal, Suhashini Sen, T. A. Khan, Anish Kr.
Gupta, Chinmayee Chandra, Siddhant Kohli, Dr. N. Visakamurthy,
E
Himanshu Satija, Sanjay Kumar Visen, Ms. Anubha Agrawal, Naveen
Hegde, Ms. Mansi Binjrajka, Ms. Pritha Srikumar, Brijesh Kumar Tamber,
Nitin Saluja, Sanuj Das, P. R. Ramasesh, Nihant Panicker, N. M.
Theerthegowda, Rajendra Koushik A.C., Ankolekar Gurudatta, Kamal
Mohan Gupta, K. Parameshwar, Ms. Arti Gupta, Ms. Kanti, Dr. Ashutosh
Garg, Ms. Rakhi Ray, Sureshan P., Vishnu Sharam, Rajesh Singh, Syed F
Jafar Alam, Abhinav Mukerji, Mrs. B. Sunita Rao, Sumit Kumar, Sriram
P., B Ragunath, M. P. Vinod, Rajiv Mehta, Rajesh Kumar Gautam, Anant
Gautam, Sumit Sharma, Vipin Kumar, Ritesh Chopra, Sarad Kumar
Singhania, Ansar Ahmad Chaudhary, Ms. Madhusmita Bora, S. Rajappa,
Roopansh Purohit, T. Mahipal, Somanatha Padhan, Tarun Gupta, Anurag
G
Dubey, Ms. Anjali Tiwari, Bhupender Kumar Bharadwaj, S. R. Setia,
Vikram Singh, Vivek Singh, A. Karthik, Raj Kamal, Ms. Misha Rohatgi,
Manish Kumar Gupta, Neeraj Kumar Gupta, Hrishikesh Baruah, Ms.
Sunieta Ojha, Ms. Aswathi M. K., Gaurav Goel, Jay Kishor Singh, Arjun
Harkauli, M. R. Shamshad, Anirudh Sharma, Akshat Kumar, D.K.
Rustagi, Dipesh Sinha, Kumar Dushyant Singh, Shakti Singh Dhakrey, H
952 SUPREME COURT REPORTS [2023] 4 S.C.R.
A Ms. Subasri Jaganathan, Ms. Meera Mathur, Shariq Ahmed, Tariq Ahmed,
Kamran Khan, Sunil Kumar Verma, Sandeep Malik, Abishake Sharma,
Inderjeet Singh, Sushil Kumar Singh, Ms. Richa Yadav, Pranav Kumar,
Romy Chacko, Ms. Charu Mathur, Amit Sharma, R.C. Kaushik, Ujjwal
A. Rana, Himanshu Mehta, M/s. Gagrat & Co., S. Udaya Kumar Sagar,
Mayank Goel, Roshan Santhalia, Ms. Harsh Lata, Shobhit Jain, Mrs.
B
Rachna Gupta, Kirti Vardhan Singh, Siddharth Narang, Sanjay Kumar
Tyagi, Rajesh Kumar Chaurasia, H.S. Bhullar, Ms. Jasmine Damkewala,
Ms. Vaishali Sharma, Utkarsh Sharma, C.K. Sasi, Mithu Jain, Ms. Shobha
Gupta, Rameshwar Prasad Goyal, Ravindra Bana, Aakarsh Kamra,
Siddhartha Jha, Somesh Chandra Jha, Ashwani Kumar Dubey, Sumit R.
C Sharma, P.V. Yogeswaran, Atul Kumar, Mukesh Kumar Maroria, Ms.
Chimayee Chandra, Ms. Shradha Deshmukh, Vishesh Kalra, Ms. Nidhi
Khanna, Akshat Shrivastava, Ms. Pallavi Langar, M/s. KMNP Law,
K.K. Mohan, Omprakash Ajitsingh Parihar, Nishit Agrawal, Rajiv Ranjan
Dwivedi, Sachin Jain, Ved Parkash, Vishal, Kapil Chaturvedi, Ashish
Singh, Manoj Kumar Jha, Ajay Kumar Agarwal, Ms. Garima Gupta,
D
Mrs. Gargi Khanna, Abhishek Kumar Singh, Preshit Vilas Surshe, Mrs.
Geetha Kovilan, Ashwani Kumar, Anshay Dhatwalia, M/s. Udit Kishan
& Associates, D.S. Chauhan, Ms. Ruchi Singh, Prashant Kumar, Abhay
Anand Jena, Ms. Riddhi Sancheti, D. Abhinav Rao, Yadav Narender
Singh, Ms. Kamakshi S. Mehlwal, Ms. Pinky Behera, Abhik Kumar,
E Ms. Suvira Lal, Ms. Shradha Agrawal, Ms. Geetanjali Mehlwal, Dr.
Harish Uppal, Tileshwar Prasad, Ms. Rashi Ram Pal, Vikas Mehta, Sanjay
Jain, Ashwani Garg, Vijay Kumar, Udayaditya Banerjee, Ms. Rashi
Bansal, M. M. Kashyap, Kumar Mihir, Dr. Vinod Kumar Tewari, Mohit
Paul, Ayush Puri, Mrs. Praveena Gautam, Ms. Ruchi Kohli, Raj Bahadur
Yadav, Arvind Kumar Tewari, Sudhir Mahajan, Ajit Kumar Ekka, S. K.
F
Kulkarni, M. Gireesh Kumar, Ankur S. Kulkarni, Uditha Chakravarthy,
Ms. Liz Mathew, Shantanu Sagar, Sidharth Sarthi, Mrs. Divya Mishra,
Anil Kumar, Gunjesh Ranjan, Sonal Jain, Ms. Filza Moonis, Ashok Kumar
Jain, Pankaj Jain, Bijoy Kumar Jain, Chandra Bhushan Prasad, Atul
Sharma, Akshay Kapoor, Abhishek Agarwal, M/s. Devasa & Co., Arvind
G Gupta, Ms. Priyanjali Singh, Nikilesh Ramachandran, Gaurav Goel, Amit
Shrivastava, Rohit Amit Sthalekar, Sudhir Kulshreshtha, Umang Shankar,
Abhinav Shrivastava, Vineet Bhagat, Ms. Manju Bhagat, Ms. Archna
Midha, Aksveer Singh Saggu, Ms. Jaikriti S. Jadeja, Jatin Zaveri, Ms.
Rashi Bansal, Mohit D. Ram, Pavan Narang, Lokesh Bhola, Archit
Upadhayay, Ms. Aishwarya Chhabra, Ms. Charu Sharma, Ms. Shwetal
H
BHUPINDER SINGH v. UNITECH LIMITED 953
Shepal, Siddharth Dharmadhikari, Aaditya Aniruddha Pande, Bharat A
Bagla, Sourav Singh, Neeraj Shekhar, Dr. Sumit Kumar, Keshav Baheti,
Harsh Narwal, Sudhansu Palo, Ms. Ipsita Behura, Prasant Varma, Budha
Dev Palo, V.K. Monga, Dhruv Tamta, Senthil Jagadeesan, Atishi
Dipankar, Ms. Amrita Sarkar, Jinendra Jain, Gyan Prakash Srivastava,
Divyesh Pratap Singh, M. Yogesh Kanna, Ms. Bharti Tyagi, Rajat Sehgal,
B
Karan Bharihoke, Arjun Singh Bhati, Ms. Mumtaz Bhalla, Lakshya
Kampani, Ms. Naveli Reshamwalla, Devendra Singh, Sukesh Kumar
Mishra, Anant Kumar Vatsya, Karan Thakur, Vijay Kumar Singh, Ashish
Sheoran, Ajay Nain, Anmol Harna, G Suresh, Vipin Kumar Jai, Milind
Kumar, Abhinay, Mrs. Pragya Baghel, Bharat Bhushan, Aditya Pratap
Singh, Prashant Bhardwaj, Tapesh Kumar Singh, Rahul Kaushik, Nikhil C
Swami, Avinash Sharma, Mrs. Anil Katiyar, Vikram Hegde, Ms. Hima
Lawrence, Abhinav Hansaraman, Vivek Gupta, Pushparaj Singh Parhira,
Gp. Capt. Karan Singh Bhati, Ms. Shagun Matta, Prashant Vaxish, Ms.
Manisha Ambwani, Rabin Majumder, Ashish Virmani, B. Krishna Prasad,
Kaustubh Shukla, Pratap Venugopal, Ms. Surekha Raman, Akhil Abraham
D
Roy, Abhishek Anand, Ms. Unnimaya S., M/s. K J John & Co., Ms.
Tulika Mukherjee, Tathagat Sharma, Nring Chamwibo Zeliang, Ms. Anu
Priya Nisha Minz, Siddhartha Sinha, Rajesh Kumar, Abhay Kumar, M.P.
Devanath, S.K. Verma, Ms. Madhurima Tatia, Siddharth Batra, Ms.
Rohini Prasad, A. Venayagam Balan, Shashank Manish, Ms. Nidhi Sahay,
Ms. Manju Jetley, Tushar Singh, Ms. Astha Tyagi, Ms. Mrinal Gopal E
Elker, Ms. Awantika Manohar, P.K. Jain, T.N. Singh, Vikas Kumar Singh,
Ms. Rajshree Singh, Dr. Sham Chand, Kaushik Poddar, Ms. Manjula
Gupta, Ms. Divya Roy, M/s. Av Global Chambers, Aditya Singh, Mrs.
Swarupama Chaturvedi, E.C. Agrawala, Ms. Anshula Vijay Kumar
Grover, Ravi Panwar, Amit Agrawal, Arup Banerjee, Sanjeev Sharma,
F
Vishal Arun, Rajeev Singh, Praveen Agrawal, Pukhrambam Ramesh
Kumar, Prithvi Pal, Ms. Charu Ambwani, Siddharth, Saurabh Ajay Gupta,
Ms. Sunieta Ojha, Abhisth Kumar, M/s. D.S.K. Legal, Sunil Fernandes,
Aman Raj Gandhi, Rajan Chawla, Ms. Neha Sharma, Yashraj Singh
Bundela, Gopal Jha, Ms. Sujata Kurdukar, Akshat Shrivastava, Ranjit
Kumar Sharma, Shashibhushan P. Adgaonkar, Ms. Preeti Singh, Mrs. G
Manorma Masi, Sunklan Porwal, Mrs. Saumya Dwivedi, Mrs. Rachna
Nain, Mrs. Kumkum Mandhanya, Rishabh Munjal, Mrs. Simranjeet Kaur,
Atul Sharma, Raj Pandey, A. Radhakrishnan, Ms. Shruti Agarwal, M/s.
Karanjawala & Co., Sandeep Devashish Das, Chinmayee Chandra, Ms.
Shraddha Deshmukh, Rajan Kumar Chourasia, Arvind Kumar Sharma,
H
954 SUPREME COURT REPORTS [2023] 4 S.C.R.
A Mrs. Aarthi Rajan, Adeel Ahmed, Raja Chatterjee, Piyush Sachdev, Idrish,
Mrs. Kirti Renu Mishra, Mrs. Apurva Upmanyu, M/s. Cyril Amarchand
Mangaldas, Ms. Nidhi Mohan Parashar, Gagan Gupta, Chandan Kumar,
Soumya Dutta, Vikrant Pachnanda, Braj Kishore Mishra, Abhishek Yadav,
Manish Kumar Mishra, Virendra Kumar, Pahlad Singh Sharma, Balaji
Srinivasan, M L Lahoty, Paban Kumar Sharma, Anchit Sripat, Pranab
B
Kumar Nayak, Arvind Kumar, Himanshu Shekhar, Dr. Sumant
Bharadwaj, Vedant Bharadwaj, Ms. Mridula Ray Bharadwaj, Awanish
Kumar, Aldanish Rein, Kaustubh Anshuraj, Ms. Aakannsha Sharma,
Krishna Kumar Singh, Ashwarya Sinha, Dharmendra Kumar Sinha,
Partha Sil, Ms. Upasana Nath, Ms. Rashmi Nandakumar, Shantanu
C Krishna, Animesh Tripathi, Kaushik Choudhury, M/s. Dua Associates,
Chitranshul A. Sinha, Jaskaran Singh Bhatia, Ayush Sharma, Vaibhav
Kumar, Aneesh Mittal, Ms. Jyoti Mendiratta, Advs. for the appearing
parties.
Respondent-in-person
D
Petitioner-in-person
Applicant-in-person
The Order of the Court was passed by
M. R. SHAH, J.
E
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
F 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
G proportionate frontage of the land so that any other
subsequent purchaser is also 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
H
BHUPINDER SINGH v. UNITECH LIMITED 955
[M. R. SHAH, J.]
been created surreptitiously, then the same shall be kept in A
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 B
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 C
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 details of financial D
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 E
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 F
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 G
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,
the amount received to the account of Unitech, in Supreme Court Registry, H
956 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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
B
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
C
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
D 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 that a fraud has been committed on behalf of the respective
E
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
F 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
G 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
H
BHUPINDER SINGH v. UNITECH LIMITED 957
[M. R. SHAH, J.]
any order to pay any amount to the aforesaid two persons namely Shri A
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.
4. Shri N. Venkataraman, learned ASG appearing on behalf of B
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
C
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
D
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 E
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 paid to Shri
Naresh Kempanna and Rs. 41.96 crores paid to Col. Mohinder Khaira).
F
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, G
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
H
958 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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
B
are of the opinion that the mistake/error committed by this Court is to be
corrected on the basis of the principle of restitution.
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
C 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.
D 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
E 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
F 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
G 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.
H
BHUPINDER SINGH v. UNITECH LIMITED 959
[M. R. SHAH, J.]
Litigation cannot be reduced to gaming where there is an element A
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 Coalfields [South Eastern
Coalfields Ltd. v. State of M.P., (2003) 8 SCC 648] thus : (SCC
B
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 C
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 D
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 E
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 F
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.’ G
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 with a
decree. The scope of the provision is wide enough so as to H
960 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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. …
B
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
C 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
D 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
E 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
F 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.
G Essar Oil Ltd., (2012) 3 SCC 522], it was 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
H
BHUPINDER SINGH v. UNITECH LIMITED 961
[M. R. SHAH, J.]
court, which prevents a party from retaining money or some A
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.
B
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).”
C
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 D
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 E
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 that judgment dealing with relevant F
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 G
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 H
962 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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
B
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
C 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
D Article 142(1) of the Constitution 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
E 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,
F
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
G 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
H purpose,….’
BHUPINDER SINGH v. UNITECH LIMITED 963
[M. R. SHAH, J.]
The instant case may not strictly fall within the terms of A
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) Ltd. [Marshall Sons & Co. (India) Ltd. B
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 C
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
D
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 E
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 F
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 G
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.” H
964 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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
B 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
C
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
D a rich harvest of illegal acts through the courts. One of
the aims of every judicial system 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.”
E
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
F 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
G 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
H
BHUPINDER SINGH v. UNITECH LIMITED 965
[M. R. SHAH, J.]
person deprived of his right but also must be burdened A
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 win, they would turn
out to be a fool since winning a case after 20 or 30
B
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 C
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
D
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) E
“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.”
F
* * *
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) G
“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
H
966 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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
B 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
C
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
D the 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)
E
“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
F
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.” ’ ”
G 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.]
H
BHUPINDER SINGH v. UNITECH LIMITED 967
[M. R. SHAH, J.]
338. A wrongdoer or in the present context, a litigant who A
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 Advertising v. Hemant Vimalnath Narichania
[Kalabharati Advertising v. Hemant Vimalnath Narichania, (2010)
B
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 C
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 D
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 E
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 F
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 G
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
H
968 SUPREME COURT REPORTS [2023] 4 S.C.R.
A 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.
B
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
C 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
D 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
E Khaira), 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
F 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.
G
Divya Pandey Applications disposed of.
(Assisted by : Shevali Monga, LCRA)
H
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