CANTONMENT BOARD, MEERUT & ANR.versusK.P. SINGH & ORS.

                      [2010] 2 S.C.R. 269


         CANTONMENT BOARD, MEERUT & ANR.                          A
                               v.
                      K.P. SINGH & ORS.
               (Civil Appeal No. 1091 of 2010)

                     FEBRUARY 01, 2010
                                                                  B
       [V.S. SIRPURKAR AND DR. MUKUNDAKAM
                    SHARMA, JJ.]

        Tender- Toll tax - Collection of- Respondent nos.1 and
  2 made highest bid of Rs. 1. 02 lakhs per day - Bid approved C
  - Challenge by Respondent no. 5 - He filed writ petition -
  Offered to pay 1.25 lakhs per day- Respondent Nos. 1 and
  2 suo motu offerred to pay Rs.1.31 lakhs per day, pursuant
· to which, the High Court, vide interim order, directed   /'

  respondent nos.1 and 2 to deposit Rs.1.31 lakhs per diiy for D
  the right to collect toll tax - Writ petition ultimately dismissed
  being.not pressed by respondent no.5 - High Court held that
  since the petition was dismissed, the interim order would
  merge with the final order and, relying upon maxim "actus
  curiae neminem gravabit': it directed refund of Rs. 29, 0001- E
  (Rs. 1.31 lakhs less Rs.1.02 lakhs) per day in favour of
  respondent nos. 1 and 2 - On appeal, held: Appellant was not
  liable to refund anything in favour of respondent nos. 1 and 2
  who enjoyed rights of collection of toll tax on basis of their own
  voluntary offer made before_ th§J High Court which the High F
  Court merely accepted by its interim order - Maxim "actus
  curiae neminem gravabit" was not applicable since
  respondent nos. 1 and 2 did not suffer any prejudice which
  they would not have suffered but for the interim order of the
  High Court and the act of respondent no. 5 - Maxims - Maxim G
  "actus curiae ·neminem gravabit" - Inapplicability of.

     Appellant Cantonment Board floated tender for
letting out the rights to collect toll tax from the

                              269                                 H
       270      SUPREME COURT REPORTS               [2010] 2 S.C.R.


    A commercial motor vehicles passing through the territorial
      limits of the Meerut Cantonment for the period 5-10-2006
      to 4-10-2007. Respondent nos.1 and 2 offered the highest
      bid of Rs. 1,02,000/- per day which was approved. This
      was challenged by respondent no.5. He filed writ petition
    B before the High Court praying for a mandamus to the
      appellant to float fresh tender alongwith a further prayer
      that till finalization of the fresh tender, he be allowed to
      pay at the rate of 1,25,000/- per day for the right to collect
      toll tax. On this, respondent nos.1 and 2 suo motu made
    c an offer to pay Rs.1,31,000/- per day, pursuant to which,
      the High Court, vide interim order dated 8-11-2006,
      directed respondent nos.1 and 2 to deposit Rs.1,31,000/
      - per day for the right to collect toll tax.

           Respondent No.5 chose not to press the writ petition
    D as in the meanwhile fresh tender was ordered by the
      appellant for letting out the rights to collect toll tax. The
      High Court dismissed the petition as not pressed and
      held that since the petition was dismissed, the interim
      order dated 8-11-2006 would merge with the final order
    E and if any of the parties had gained something under the
      interim order that effect of the interim order shall be
      neutralized. By applying the maxim 'actus curiae
      neminem gravabit', the High Court held that since the
      final offer of respondent nos.1 and 2 which was accepted
    F by the appellant was only of Rs.1,02,000/- per day, they
      would be entitled to get refund of the excess amount of
      Rs.29,000/- (Rs.1,31,000/- less Rs.1,02,000/-) per day.

          In appeal to this Court, it was contended that the
    G High Court erred in relying upon the maxim "actus curiae
      neminem gravabit 11 and on that basis ordering the refund.
             Allowing the appeal, the Court

          HELD: 1.1. The High Court completely
    H misunderstood the maxim actus curiae neminem gravabit




\
  CANTONMENT BOARD, MEERUT & ANR. v. K.P.                271
              SINGH & ORS.
 and committed an error in applying it to the facts of the A
 present case. For applying the maxim, it has to be shown
 that a party has been prejudiced on account of any order
 passed by the Court, but herein no prejudice was caused
 to the respondent nos.1 and 2. Respondent no.5 had
 made an offer of Rs.1,25,000/- per day. This offer was B
 matched by respondent nos.1 and 2 by raising the bid to
 Rs.1,31,000/- per day. Surely respondent nos.1 and 2 got
 into this arrangement with the open eyes. Nobody can
 even think that they would unnecessarily suffer losses
 for matching and exceeding the offer made by c
 respondent no.5, after all they were doing business and
 they would certainly not be interested in suffering the
 losses by matching the offer made by respondent no.5
and exceeding the same by Rs.6,000/- per day. Even
ultimately, the petition was not dismissed as being a merit
                                                                0
less petition. Respondent no.5 chose not to press the
petition iil view of the fact that a fresh auction was ordered
by the appellant herein perhaps because the higher
authorities did not choose to give sanction for all this
exercise by the appellant. Therefore, there was no E
ques.tion of respondent nos.1 and 2 suffering any
prejudice because of the interim order passed by the
High Court. They· were welcome not to make any offers.
All that would have happened was that respondent no.5
would have then ,1cquired the rights to collect the toll tax
and not the respondent nos.1 and 2. But they did not F
want to lose their right to collect the toll tax and it is with
this idea that they matched the offer of respondent no.5
and exceeded it by Rs.6,000/- per day. There is, thus, no
question of any prejudice having been suffered by
respondent nos.1 and 2. [Para 11] [277-F-G; 278-A-F]            G
    1.2. It was not on account of respondent No.5 that the
Court was persuaded to pass an order. In fact
respondent no.5 had given its offer. However, respondent
                                                               H
    272    SUPREME COURT REPORTS               [201 O] 2 S.C.R.


A nos. 1and 2 not only matched that offer but they exceeded
  the same. This was the voluntary action on the part of
  respondent nos.1 and 2 and they were not directed by
  the order to match the order of respondent No.5. It was
  their voluntary act which was well calculated to earn
B profits by winning the rights to collect the toll tax.
  Secondly, the Writ Petition was not held to be untenable
  nor wa5 it held that respondent no.5 was not entitled to
  file the Writ Petition, in fact, respondent No.5 did not press
  the Writ Petition at all. [Para,42] [279-E-G]
c     1.3. There was no question of respondent nos.1 and
  2 having suffered any impoverishment which they would
  not have suffered but for the order of the Court and the
  act of respondent no.5. In fact, it was on account of the
  voluntary act of respondent Nos.1 and 2 that the Court
D was persuaded to pass the order dated 8-11-2006
  allowing respondent nos.1 and 2 to collect the toll tax.
  There was no question of any benefit having been earned
  by respondent no.5 under the interim order nor was there
  any question of making restitution of anything that was
E lost by respondent nos.1 and 2 since they had lost
       •     I
  nothing. [Para 13] [279-G-H; 280-A-B]

       1.4. The appellants cannot take advantage and claim
  refund because of the fact that this was their voluntary
F offer and they were not directed to pay the amount that
  they did. In view of this, the High Court's order is quite
  unsustainable. Therefore, that order is set aside and it is
  held that the Cantonment Board would not be liable to
  refund anything in favour of respondent nos.1 and 2 who
G have enjoyed the rights of collection of toll on the basis
  of their own voluntary offer made before the High Court
  which the High Court has merely accepted by its order
  dated 8-11-2006. [Para 15] [281-E-G]

     Karnataka Rare Earth & Anr. v. Senior Geologist
H Department of Mines & Geology & Anr. 2004 (2) SCC 783
   CANTONMENT BOARD, MEERUT & ANR. v. K.P.                   273
               SINGH & ORS.
and South Easter Coalfields Ltd. v. State of M.P. & Ors. 2003       A
(8) sec 648, referred to.
                       Case Law Reference:
     2004 (2) sec 783          referred to            Para 11
                                                                    B
     2003 (8) sec 648          referred to            Para 14

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1091 of 2010.

    From the Judgment & Order dated 26.3.2007 of the High           C
Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
60135 of 2006.

    Gourab Banerjee, Arvind K. Sharma, Saurabh Mishra,
Rekha Pandey for the Appellants.
                                                                    D
     Dr. Rajiv Dhawan, Dinesh Kumar Garg, Manzoor Ali Khan,
V.K. Biju, Dhanjayan Garg for the Respondents.

     The Judgment of the Court was delivered by
                                                                    E
     V.S. SIRPURKAR, J. 1. Leave granted.

      2. Correct scope and applicability of the maxim actus
 curiae neminem gravabit falls for consideration in this appeal.
 This appeal has been filed challenging the judgment in Civil
 Miscellaneous Writ Petition No.60135 of 2006 passed by the         F
 High Court of Judicature at Allahabad. The High Court, by the
 impugned order, has held that the respondents herein, namely,
 Shri K.P. Singh and Gaurav Traders would be entitled to the
 refund of the amount deposited by them over and above the
bid given by them. Cantonment Board, the appellant herein has       G
been directed to dispose of the application made by
respondent Nos. 1 and 2 for refund expeditiously. Needless to
say, in the light of the observation made by the High Court
favouring the refund of amount, few facts would be necessary.
                                                                    H
    274     SUPREME COURT REPORTS                 [2010] 2 S.C.R.


A        3. Under Section 6,0 of the Cantonment Act, tne
    Cantonment Board was empowered to impose toll tax.
    Accordingly, on 08.01.2005, a Gazette Notification was issued
    for the imposition of the toll tax on such commercial motor
    vehicles passing through the Meerut Cantonment.
B
        4. In pursuance of this, a tender was floated and bids were
  invited relating to 2005-2006 for levying toll tax upon the entry
  of the commercial motor vehicles within the territorial limits of
  Meerut Cantonment in the sense that the bidders were
  expected to pay the agreed amount to the Cantonment Board
C and the successful bidder was entitled to levy and collect toll
  tax upon the entry of the commercial motor vehicles in the
  territorial limits of Meerut. Twenty persons submitted their
  tenders in response to the notice inviting tenders whereupon
  the tender submitted by respondent Nos.1 and 2 herein jointly
D came to be accepted. The highest offer by respondent ~os. 1
  and 2 for the collection between 01.10.2005 to 04.10.2006 was
  for 3,57,30,000/-. This was challenged by one Gajraj Singh.
  Earlier, validity of the imposition of tax on the commercial
  vehicles by the Cantonment Board was challenged by the Civil
E Writ Petition Tax No.1601 of 2005. That Writ Petition was
  allowed and the High Court quashed the Notification dated
  08.01.2005. The Cantonment Board filed a Special Leave
  Petition against the impugned order of the Allahabad High
  Court dated 23.03.2006 and leave was granted resulting in the
F main Notification authorizing the appellant to collect toll tax·
  remaining intact.

       5. The appellant, therefore, issued a fresh Notification
  inviting tenders, on 14.09.2006. By this, the contract for
G collection of tolls for the period of one year w.e.f 05.10.2006
  to 04.10.2007 was advertised. Again, respondent Nos.1 and
  2 herein stood as the highest bidders in the auction dated
  27.09.2006 and offered the highest bid of Rs.3,61,57,727/-
  (Rs.1,02,000/- per day) for the said period of one year. This

H
   CANTONMENT BOARD, MEERUT & ANR. v. K.P.                    275
       SINGH & ORS. [V.S. SIRPURKAR, J.]
was approved by the appellant vide its resolution No.229 dated        A
29.09.2006. After the finalization of the tender, respondent No.5
Umesh Kumar submitted an application offering to pay
1,05,000/- per day with the advance deposit of 5 days at the
said rate in the account of the Cantonment Board. A Writ
Petition was filed by respondent No.5 being Writ Petition             B
No.60135 of 2006 claiming therein a Writ of Mandamus
commanding the appellant herein to start the process of holding
fresh auction or tenders for letting out the rights to collect toll
tax from the commercial motor vehicles passing through the
territorial limits of Meerut Cantonment by issuing advertisement      C
within the stipulated time. It was further prayed that till the
finalization of fresh auction, respondent No.5 should be allowed
to pay at the rate of 1,25,000/- per day for the collection of toll
tax.

     6. Ordinarily, this Writ Petition should never have been         D
entertained. However, it was actually entertained and the High
Court at the time of passing the orders on the application for
stay found that though respondent No.5 was willing to pay
Rs.1,25,000/- per day for the right to collect toll tax, yet
respondent Nos. 1 and 2 herein had suo motu made an offer             E
to pay Rs.1,31,000/- per day for the right to collect toll tax. The
High Court as an interim order directed respondent Nos.1 and
2 to deposit Rs.1,31,000/- per day to levy and collect the toll
tax during the interregnum. Some other orders were also
passed with certain directions. This order was passed on              F
08.11.2006.

     7. The Writ Petition was opposed by the appellant on the
ground that the claim made by respondent No.5 was contrary
to the terms of the tender and that in fact, there was collusion
between the respondents who had colluded and quoted lesser            G
price and that was to result into losses to the appellant-
Cantonment Board.

    8. It so happened thereafter that the said auction not having
been approved by the senior officers, a fresh auction was             H
    276     SUPREME COURT REPORTS                   [2010] 2 S.C.R.


A ordered for letting out the rights to collect the toll. In that view,
  the Writ Petition was not pressed by respondent No.5, and as
  a result, the petition was dismissed as not pressed. However,
  the High Court did not stop at that and noted that the original
  bid by respondent Nos.1 and 2 was only for Rs.1,02,000/- w.e.f.
B 09.11.2006 for which they had been given the right of collection
  of toll tax. The High Court, therefore, took the view that since
  the petition was dismissed, the interim order, if any, more
  particularly dated 08.11.2006 would merge with the final order
  and if the petition was dismissed, it would mean as if the petition
  had not been filed and if any of the parties had gained
C something under the interim order that effect of the interim order
  should be neutralized. Since the petition had been dismissed
  as not pressed, the interim order dated 08.11.2006 accepting
  the bid of the respondent Nos. 5 and 6 of Rs.1,31,000/- would
  merge with the final order and respondent No.1 and 2 would
D be entitled to get refund of the excess amount of Rs. 29,000/-
  per day since their final offer which was accepted by the
  Cantonment Board was only of Rs.1,02,000/-. The Court took
  the view that in view of the maxim actus curiae neminem
  gravabit, no party could be allowed to take benefit of its own
E wrongs by getting the interim orders and thereafter blaming the
  Court. In that view, the High Court directed refund in favour of
  respondent Nos. 1 and 2 of the excess amount i.e. Rs. 29,000/
  - per day w.e.f. 09.11.2006 till the end of the contract period. It
  is this order which has fallen for our consideration at the
F instance of the Cantonment Board.

       9. It was argued by the learned Additional Solicitor General
  of India, Shri G. Banerjee that the High Court was completely
  in error firstly, in relying upon the maxim actus curiae neminem
G 1ravabi1 and on that basis ordering the refund of the amount.
  According to Shri Banerjee, there was no question of any
  prejudice being caused to respondent Nos.1 and 2 on account
  of any order passed by the High Court mucti less the order
  dated 08.11.2006. He pointed out that in fact, the High Court
H was only guarding the interests of the Cantonment Board
   CANTONMENT BOARD, MEERUT & ANR. v. K.P.                      277
       SINGH & ORS. [VS. SIRPURKAR, J.]
inasmuch as the petitioner before the High Court (respondent           A
No.5) had offered to pay at the rate of Rs.1,25,000/- as against
the accepted bid of Rs.1,02,000/- by respondent Nos.1 and 2
herein. It was the voluntary offer of respondent Nos.1 and 2 who
matched the offer by Shri Umesh Kumar and accepted it for
the amount of Rs. 1,31,000/- per day. In lieu thereof, respondent      B
Nos.1 and 2 acquired the rights to collect the toll tax. This offer
was given by these respondents with open eyes and there was
no question of prejudice being caused because of the interim
arrangement ordered by the High Court by the interim order
dated 08.11.2006 and, therefore, the High Court was                    c
completely unjustified in ordering the refund merely because the
Writ Petition was dismissed as not pressed.

      10. As against this, Dr. Dhawan, learned Senior Counsel
supported the order, contending that but for the order, the
petitioners would have been required to pay at the .rate of Rs.        D
1,02,000/- per .day and ultimately the Writ Petition in which the
said order was passed as the interim arrangement thereby was
dismissed. The respondent Nos.1 and 2 would have a right to
refund of the amount paid by them in excess of their original
offer because that would be the natural result of the dismissal        E
of the Writ Petition.

      11. In our view, the High Court has completely
 misunderstood the maxim actus curiae neminem gravabit and
 has committed an error in applying it to the facts of the present     F
 case. For applying the maxim, it has to be shown that any party
 has been prejudiced on account of any order passed by the
 Court. We do not find any prejudice having been caused to the
 respondents herein. If the High Court had decided to entertain
 the Writ Petition filed by the 5th respondent, ordinarily, it could   G
 have stayed the whole process thereby depriving the first and
the second respondents of their rights to collect the toll tax on
the basis of their bid in the tender. However, the High Court
did not want to stop the process of tax collection. The tax had
to be collected since the Notification imposing the tax was
                                                                       H
    278       SUPREME COURT REPORTS                  [2010] 2 S.C.R.


A   intact (thanks to the orders passed by this Court in SLP
     No. 7682/2006). Then it was a question as to at what rates
    should the rights to collect the toll tax be leased out and to
    whom. The respondent No.5-petitioner had made an offer of
     Rs.1,25,000/- per day. This offer was matched by respondent
B    Nos.1 and 2 by raising the bid to Rs.1,31,000/- per day. We
    are sure that respondent Nos.1 and 2 thus got into this
    arrangement with the open eyes. Nobody could even think that
    the respondents would unnecessarily suffer losses for matching
    and exceeding the offer made by respondent No.5, after all they
c   were doing business and they would certainly not be interested
    in suffering the losses by matching the offer made by the 5th
    respondent and exceeding the same by Rs.6,000/- per day.
    They entered into this arrangement with absolutely open eyes.
    Even ultimately, the petition was not dismissed as being a merit
    less petition. The respondent No.5 chose not to press the
0
    petition in view of the fact that a fresh auction was ordered by
    the appellant herein perhaps because the higher authorities did
    not choose to give sanction for al! this exercise by the appellant.
    Therefore, there was no question of respondent Nos.1 and 2
E   suffering any prejudice because of the interim order passed by
    the High Court. They were welcome not to make any offers. All
    that would have happened was that respondent No.5 would
    have then acquired the rights to collect the toll tax and not the
    respondent Nos.1 and 2. But they did not want to lose their right
    to collect the toll tax and it is with this idea that they matched
F   the offer of respondent No.5 and exceeded it by Rs.6,000/- per
    day. There is, thus, no question of any prejudice having been
    suffered by respondent Nos.1 and 2. The High Court, in our
    opinion, has completely misread the law laid down in Kamataka
    Rare Earth & Anr. v. Senior Geologist Department of Mines
G   & Geology & Anr. [2004 (2)         sec      783]. The concerned
    paragraph which has also been quoted by the High Court is
    as unGfer:

          "The doctrine of actus curiae neminem gravabit is not
H         confined in its application only to such acts of the Court
  CANTONMENT BOARD, MEERUT & ANR. v. K.P.                      279
      SINGH & ORS. [V.S. SIRPURKAR, J.]
     which are erroneous; the doctrine is appjicable to all such       A
     acts as to which it can be held that the Court would not
     have so acted had it been correctly apprised of the facts
     and the law. It is the principle of restitution which is
     attracted. When on account of an act of the party,
     persuading the Court to pass an order, which at the end           B
     is held as not sustainable, has resulted in only gaining an
     advantage which it would not have otherwise earned, or
     the other party has suffered an impoverishment Vl(hich it
     would not have suffered but for the order of the Court and
     the act of such party, then the successful party finally held     c
     entitled to a relief, assessable in terms of money at the end
     of the litigation, is entitled to be compensated in the same
     manner in which the parties would have been if the interim
     order of the Court would not have been passed. The
     successful party can demand;(a) the delivery of benefit
                                                                       0
     earned by the opposite party under the interim order of the
     Court, or (b) to make restitution for what it has lost."

      12. Applying the principles in the above paragraph, it was
not on account of respondent No.5 that the Court was
persuaded to pass an order. In fact the 5th respondent had             E
given its offer. However, the first and second respondents not
only matched that offer but they exceeded the same. This was
the voluntary action on the part of respondent Nos.1 and 2 and
they were not directed by the order to match the order of
respondent No.5. It was their voluntary act which was well             F
calculated to earn profits by winning the rights to collect the toll
tax. Secondly, the Writ Petition was not held to be untenable
nor was it held that respondent No.5 was not entitled to file the
Writ Petition, in fact, respondent No.5 did not press the Writ
Petition at all.                                                       G

     13. There was no question of respondent Nos.1 and 2
having suffered any impoverishment which they woulQj)ot have
suffered but for the order of the Court and the act of respondent
No.5. In fact, it was on account of the voluntary act of respondent    I-'
    280     SUPREME COURT REPORTS                 [2010] 2 S.C.R.


A Nos.1 and 2 that the Court was persuaded to pass the order
  dated 08.11.2006 allowing respondent Nos.1 and 2 to collect
  the toll tax. There was no question of any benefit having been
  earned by respondent No.5 under the interim order nor was
  there any question of making restitution of anything that was lost
B by respondent Nos.1 and 2 since they had lost nothing.

         14. In the above reported decision, the leases in favour of
   the appellants were challenged by way of the public interest
   litigation and grants in their favour were quashed. They filed
   Writ Appeals and approached this Court. When they
C approached this Court, there was an interim order by which this
 · Court had directed that the renewals of the exceeding grants
   in favour of the appellants would continue till the next date of
   hearing. This order was also modified and the lease hold rights
   were directed to continue till further orders of the Court. The
D Karnataka Government, after the dismissal of appeals, issued
   orders calling upon the appellants to pay the price calculat~d
   at the minimum rates. The order was challenged by way of a
   Writ Petition which was dismissed and that is how the matter
   reached this Court. It was argued that the act of the appellants
E quarrying the granite stones and exporting the same was
   accompanied by payment of royalty and issuance of transport
   permits by the authorities of the State and though done under
   the interim orders of this Court was nevertheless a lawful and
   bona fide act. According to the appellant, the mining lease in
F favour of the appellants were bound to be held to be valid in
   view of the interim orders passed by this Court that they could
   not be held liable for the payment of price of granite blocks.
   The Court held that the demand of the State of Karnataka of
   the price of mineral could not be said to be a levy of penalty or
G penal action. It was further observed that though the appellants
   were allowed the mining by way of an interim order during the
   pendency of the earlier appeals, the factual transport permits
   were obtained by the appellants only after the dismissal of
   their appeals. The court recorded a final order that the
H appellants' plea that they were ignorant of the dismissal of the
  CANTONMENT BOARD, MEERUT & ANR. v. K.P.                        281
      SINGH & ORS. [V.S. SIRPURKAR, J.]
appeals could not be accepted and entertained. The Court then            A
referred to the decision in South Easter Coalfields Ltd. v. State
of M.P. & Ors. [2003 (8) SCC 648] where the doctrine of actus
curiae neminem gravabit was considered and elaborated,
holding this doctrine to be the principle of restitution.
Considering the facts of the case in paragraph 11, this Court            B
observed that:

     " but for the interim orders passed by this Court there was
     no difference between the appellants and any other person
     raising, without any lawful authority, any mineral from any
     land, attracting applicability of sub-Section(5) of Section         C
     21. As the appellants have lost from the Court, they
     cannot be allowed to retain the benefit earned by them
     under the interim orders of the Court. The Court affirmed
     the High Court's finding that the appellants were liable to
     be placed in the same position in which they would hav·e            D
     been if this Court would not have protected them by issuing
     interim orders."

       15. We have already explained the observations of this
Court in paragraph 1O in the light of the facts of this case and         E
it is clear that the respondents 1 and 2 cannot take advantage
and claim refund because of the fact that this was their voluntary
offer and they were not directed to pay the amount that they did.
In view of this, we find that the High Court's order is quite
unsustainable. We therefore, set aside that order and hold that          F
the Cantonment Board would not be liable to refund anything
in favour of respondent Nos.1 and 2 who have enjoyed the
rights of collection of toll on the basis of their own voluntary offer
made before the High Court which the High Court has merely
accepted by its order dated 08.11.2006. With this observation,           G
the appeal is allowed. It shall not now be necessary for the
respondent to consider the representation made by respondent
Nos.1 and 2. The direction to that effect by the High Court is
also set aside. Costs are estimated at Rs.50,000/-.

B.B.B.                                             Appeal allowed.       H