# Mushtaq Ahmad v. State of U.P. & Ors

- **Citation:** (2026) 2 ILRA 1540
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-27
- **Case number:** Writ C No. 4232 of 2024
- **Bench:** Ajit Kumar, Mrs. Swarupama Chaturvedi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/mushtaq-ahmad-v-state-of-u-p-ors-54177
- **Pages:** 12

## Text

1540 INDIAN LAW REPORTS ALLAHABAD SERIES
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(2026) 2 ILRA 1540
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.02.2026

BEFORE

THE HON'BLE AJIT KUMAR, J.
THE HON'BLE MRS. SWARUPAMA CHATURVEDI, J.

Writ C No. 4232 of 2024

Mushtaq Ahmad ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Issue for Consideration
(A). Whether the State Government was bound by Arbitration Committee' report as an award and to question
it, it could have applied only under Section 34 of the Arbitration and Conciliation Act, 1996 and not otherwise.
(B). Whether Secretary who represented State Government could have recalled his earlier order accepting the
report/ recommendation of Arbitration Committee without there being any averment or recitals coming in the
order impugned that earlier order was obtained by fraud and/or misrepresentation.

Head Notes
The Constitution of India, 1950-Article 226; The Arbitration and Conciliation and Act, 1996-
Section 34- Authority is not vested with power to recall its order for the sake of recall only. The
authority is hide bound in law to record reasons and justify its action for recalling order- If an
order does not suffer from any misrepresentation or fraud or an order in not bad for want of
authority of law, it is to be taken as genuine order passed after due application of mind and
hence such order cannot be permitted to be recalled.

While this court remanded the matter, it did not set aside the order of under Secretary dated
16th March, 2017 accepting the report/recommendation of three member arbitration committee.
It recommend the matter for hearing petitioner as the order dated 11th July, 2017 recalling the
order 30th June, 2017 was being set aside- There is no whisper of misrepresentation or fraud in
getting order 30th June, 2017 passed, rather the findings are that recommendation of
arbitration committee are flawed one. Secretary tried to sit over and above the
recommendations of the Arbitration Committee which was earlier accepted by the State
Government to test whether it was a mere recommendation or it was a complete award under
order passed by Arbitration Committee. This remand does not empower the authority to travel
beyond findings returned to a different conclusion than what has been returned by Arbitration
Committee. Thus without challenging the matter under Section 34 of Arbitration and Conciliation
and Act, 1996, the government is bound to accept recommendation of the arbitration committee.

Order of recall does not pass the test of principles upon which a recall can be justified qua
administration or quasi judicial action.

Held- Findings returned on the basis of documents available in 2016 cannot be disturbed on the basis of
some new report obtained after 8 years. This was certainly beyond scope of enquiry by the State to dilute the
findings arrived at in the arbitration proceedings. The order of recall even on merits is bad. Thus order of
recall cannot be sustained in law-Petition allowed. (E-15)
2 All. Mushtaq Ahmad Vs. State of U.P. & Ors.
1541
(Para 23, 24, 26 & 28)

Case Law Cited
Indian Bank v. Satyam Fibres (India) Pvt. Ltd. (1996) 5 SCC 550; Budhia Swain and Others v. Gopinath Deb
and Others (1999)4 SCC 396;

List of Acts
The Constitution of India, 1950; The Arbitration and Conciliation and Act, 1996

List of Keywords
Recall order for the sake of recall only; Authority hide bound to record reasons for recalling order; Order does
not suffer from ; Misrepresentation or fraud or ; Genuine order passed after due application of mind ; such
order cannot be permitted to be recalled.

Case Arising From
Order dated 9th January, 2024 rejecting the representation of the petitioner dated 19.9.2023 being baseless
and directing for 90 percent of recoverable amount of Rs. 49,27,905/- from the petitioner and 10 percent
from the Chief Fish Development Officer

Appearances for Parties
Counsel for Petitioner(s) : Alok Singh, Ramendra Pratap Singh
Counsel for Respondent(s): C.S.C.

(Delivered by Hon'ble Ajit Kumar, J.
&
Hon'ble Mrs. Swarupama Chaturvedi, J.)

1. Heard Sri Ramendra Pratap Singh, learned Senior Advocate assisted by Sri Alok Singh,
learned counsel for the petitioner and Sri S.K.Srivastava, learned Additional Chief Standing
Counsel for the State respondents.

2. Briefly stated facts of the case are that in terms of Government Order dated 08th March,
2000 and consequential amended Government Order dated 20th April, 2001 fisheries department of
the State published notice for auction of reservoir in district Sonbhadra and Mirzapur namely,
Dhandhraul Reservoir and Baraudha Reservoir, Class I and Class III category respectively for
fisheries on 8th December, 2014 and petitioner being highest bidder was granted fisheries lease in
respect of Dhandhraul reservoir, Class I category, for a lease rent of Rs. 60,00,000/- per year,
extandable to next two years on a year to year basis. The standard qua fisheries rights in reservoir
came to be awarded to the petitioner on 17.12.2014 for the financial year 2014-15 and petitioner
immediately undisputedly deposited 25 percent amount to Rs. 15 lacs before Auction Committee.
The agreement was entered and petitioner spent money on seeds to grow fishes for the purposes of
fishing. In order to lay eggs/ seeds in the clean reservoir seeds for growing fish for the fishing
purposes and to start with fishing, petitioner was directed to enter an agreement vide letter dated
18th March, 2015 and was directed to deposit entire dues by 31st March, 2015, failing which
interest would accrue @ 2 percent per month on delayed payment and in the event he failed to
make deposits, tender lease qua fishing rights would automatically stand terminated.
1542 INDIAN LAW REPORTS ALLAHABAD SERIES

3. Petitioner since failed to deposit any further amount, he was served with another notice on
25th June, 2015 to deposit remaining amount of Rs. 45 lacs alongwith interest by 30th June, 2015,
else amount will be recoverable as arrears of land revenue. Petitioner replied to this notice vide
letter dated 30th June, 2015, lamenting upon conduct of the people managing the dam, in opening
the dam gate, which resulted in the grown fishes get slipped into canal from the reservoir and
resultantly he suffered huge loss and resultantly he could not do much fishing and since this was
done without notice to petitioner, he could not do anything in the matter and hence considering the
quantum of remaining there in the reservoir, the contract money deposited was sufficient. Vide
letter dated 14th July, 2015, petitioner informed to Joint Director of fisheries' department that as
against expected 850 quintal of fish, he could fish out only 45.5. quintal of fish from the
Dhandhraul reservoir and this was informed to the officers of the department who were posted at
the reservoir. However, since there was serious disputed questions of fact as per arbitration clause
under the agreement, one Bhishm Lal Vermal , Director Fisheries, U.P. was appointed as an
arbitrator who issued a notice to the petitioner on 17th February, 2016 to appear and to put up his
defence. The arbitrator further passed an order on 4th March, 2016 to the effect that since matter
was engaging attention in a pending arbitration, therefore, recovery certificate dated 3rd December,
2015 for a sum of Rs. 49,27,905/- should not have been pressed into service. However upon this
assurance that arbitration was going, petitioner withdrew his complaint made before consumer
forum and order to that effect was passed by presiding officer of the consumer forum on 30th
September, 2016. It is further noticeable that sole arbitrator stood transferred and consequently
matter of arbitration was referred to Arbitration Committee appointed by the concerned Secretary,
State of U.P. under his order dated 21st September, 2016. This committee consisted of Dr. Nazul
Haq, Managing Director of Fisheries, Cooperative Societies Ltd. Lucknow as Chairman with N.S.
Rahmani, Chief Manager of Fishing Development Board and A.K.Lal, Deputy Director,
Headquarters, Directorate of Fisheries, member of Secretary. The matter was contested before
Arbitration Committee by petitioner and ultimately arbitration committee arrived at a conclusion
that since maximum fishes got slipped away into the canal on the opening of dam sluice gate
reducing to lowest level of water in the reservoir, hence not much fishing could be done and fishing
was only to the extent of 45.5. quintals as against 850 quintals, for which lease was awarded. The
Arbitration Committee reached out to the conclusion that fishing for the financial year 2014-15
could be only of 45.5 quintals of which, the average cost would be Rs.4.60 lacs and petitioner since
had already deposited Rs. 15 lacs as security amount in terms of bank guarantee of Rs, 9.93 lacs
with respondent and since Rs. 22 lacs has been determined as lowest price and of contract amount
money deposited by petitioner to the tune of Rs. 24.93 lacs was more than 22 lacs, hence there was
no loss caused to the department. It was a finding returned by the Arbitration Committee that since
contract was not there on 'as is where is' basis, it was duty of the department to have ensured
enough water in the reservoir in the event if sluice gates were to be opened so as to ensure that
fishes do not get slipped away into the canal causing loss to contractor and hence contractor cannot
be held responsible for the loss. The Arbitration Committee, thus, concluded that though loss was
caused to the department but since fish lease had already been cancelled, therefore, government
should waive off recovery dues taking sympathetic consideration of the matter. Upon this
arbitration, judgment being submitted to the State Government, the State Government accepted the
same and waived off recovery vide order dated 16th March, 2017. Paragraphs 4 and 5 of the order
are important and hence reproduced hereunder:
2 All. Mushtaq Ahmad Vs. State of U.P. & Ors.
1543

'4- उपरोक्तानुसार गडठि मध्यस्थि सडमडि द्वारा उपलब्र् करायी गयी अपनी आख्या में यह अवगि कराया गया डक डसंचाई डवभाग मस्त्य
डवभाग द्वारा लापरवाही, दोषपूणा सेवा व अनुडचि व्यापार प्रडकया अपनािे हुए बगैर सूचना डदये ही र्ंर्रौल जलाशय के िैम व घाघर मुख्य नहर को
एकाएक खोल देने व जलाशय को शून्य जलस्िर पर कर देने से िैम व घाघरा नहर के जल डनकासी मागा से जलाशय की करोड़ों रूपये की मछडलयां घाघरा
नदी व घाघरा मुख्य नहर में डगर/ बह जाने के कारण ठेकेदार द्वारा मत्स्य डवभाग के डनर्ााररि लक्ष्य 850 कुन्िल के सापेक्ष 45.5 कुन्िल मछडलयााँ
जलाशय के डनकाली जा सकी। आख्या में यह भी उल्लेख डकया गया है डक आगामी वषाा मे र्ंर्रौल जलाशय का न्युनिम मूल्य रू0 22.00 लाख ही
डनर्ााररि डकया गया है, जो डक वषा 2014-15 में श्री मुश्िाक द्वारा भुगिान की गयी र्नराडश रू0 24.93 लाख (रू0 15 लाख 25 प्रडिशि िथा
रू0 9.93 लाख जमानि राडश) की िुलना में कम है। पूवा िथा आगामी वषाा में प्राप्त राजस्व के सापेक्ष डवभाग को कोई हाडन नहीं हुई है। अिेः मध्यस्थिा
सडमडि द्वारा ठेकेदार श्री मुश्िाक अहमद डक प्राथाना पत्र में डकये गये डनवेदन व वडणाि पररडस्थडियों में गुण दोष के आर्ार पर अवशेष राडश को आर०सी०
के माध्यम से वसूली को माफ करने पर शासन स्िर से सहानुभूडि पूवाक डवचार कर डनणाय डलये जाने की संस्िुडि की गयी।

5- इस सम्बन्र् मे मुझे यह कहने का डनदेश हुआ है डक शासन द्वारा मध्यस्थिा सडमडि द्वारा की गयी संस्िुडि के अनुसार ठेकेदार श्री मुश्िाक
अहमद पुत्र स्व० इसहाक अहमद डनवासी पूरब मोहाल हाडमदनगर जनपद सोनभद्र पर र्ंर्रौल जलाशय की अवशेष र्नराडश/डकश्ि रू0 49,27,905
(रु० उनचास लाख सत्ताइस हजार नौ सौ पांच मात्र) की आर०सी० के माध्यम से वसूली को माफ डकये जाने का डनणाय डलया गया है।

अिेः उपरोक्तानुसार आवश्यक कायावाही सुडनडिि करने का कष्ट करे।'

English Translation by this Court:

" 4. It has been apprised by above constituted arbitration committed vide its report that
because of carelessness flawed service and illegal application of business rules and that too
without notice the gate of reservoir dam and that of the main Dhandhraul Canal were opened
which resulted in bringing dam water in its lowest level and fishes worth crores of rupees slipped
away into Dhandhraul reservoir and main canal for which only 45.5. quintals of fishing could be
done under the contract. This has also been submitted in the report that in subsequent order
through rains the price of Dhandhraul reservoir were fixed as Rs. 22 lacs, which was less than Rs.
24.93 lacs (15 lacs price 25 percent of the contract and Rs. 9.93 lacs secured amount) already
deposited. There was no loss caused to the fishing department comparing previous year and the
coming year rainy season. Accordingly, arbitration committee recommends State Government to
write-off liability of petitioner by way of recovery of setting of the amount already paid taking
sympathetic consideration in the matter.

5. I have been directed to state in this matter that government has decided to write-off the
remainder amount of recovery Rs. 49,27,905 in the light of recommendation made by the
arbitration committee in favour of contractor Mustaq Ahmad, S/o Ishak Ahamd, R/o East Mohal,
Hamidnagar, district Sonbhadra.

Accordingly, necessarily, it may be proceeded"

4. This order, however, came to be recalled on 30th June, 2017 not assigning any specific
reason, but only recording a fact that upon re-examination of report submitted by Arbitration
Committee, it was found that there was no transparency and proper appreciation of evidence and
documents before Arbitration Committee arriving at conclusion to recommend for waiving off of
debts, consequentlly recovery came to be issued on 11th July, 2017 for a sum of Rs. 49,27,905/-.
1544 INDIAN LAW REPORTS ALLAHABAD SERIES
Petitioner challenged this order on the ground that authority has proceeded ex parte in recalling
order, which was not proper administrative exercise of power.

5. Writ petition being Writ C No. 37592 of 2017 was entertained and interim protection was
granted, but subsequently while petition was allowed setting aside the order and recovery order
dated 30.6.2017 dated 11th July, 2017 and also recovery citation dated 21st July, 2017, remitting
matter to the Principle Secretary, Department of Animal Husbandry and Fisheries, Government of
U.P. Lucknow to decide afresh. Now after matter was remitted, again an order came to be passed
on 9th January, 2024 rejecting the representation of the petitioner dated 19.9.2023 being baseless
and directing for 90 percent of recoverable amount of Rs. 49,27,905/- from the petitioner and 10
percent from the Chief Fish Development Officer. This order, therefore, was awarded in a sense
that the order dated 30th June, 2017 stands modified.

6. Two fold arguments have been advanced by learned Senior Advocate appearing for the
petitioner:

(a) Once arbitral award had been passed holding petitioner not guilty for violating any
terms of contract though department suffered loss, thus findings became final and were subject to
review only in the event arbitration petition was filed before District Judge and thereafter an appeal
preferred, if aggrieved; and

(b) Administrative exercise of power by the State to accept Arbitration Committee
recommendation could not have been recalled unless and until findings came to be returned and
that order was obtained by fraud and/or misrepresentation and that the order was without any
authority of law and this being no fact position of the case earlier, order dated 16th March, 2017
could not have been recalled.

7. Yet another argument has been advanced by Sri Singh, learned Senior Advocate
appearing for the petitioner that matter was remanded by court only for a limited purpose and this is
to the extent that petitioner was to be heard as order was passed without hearing, but opportunity of
hearing does not mean that authority which is vested with power can pass order reviewing/recalling
is earlier order on merits when it was no questioned. Thus Mr. Singh submits that petition deserves
to be allowed and order as well as recovery deserves to be quashed.

8. Meeting the above submission Sri S.K.Singh, learned Chief Standing Counsel raised three
points:

a. There was no concept of Arbitration Committee and only single member arbitrator was
to appoint and hence committee could not have acted as an arbitrator;

b. Arbitration Committee's order dated 17.10.2016 was only recommendation, and
therefore, it was open for the State government to have taken a different stand.
2 All. Mushtaq Ahmad Vs. State of U.P. & Ors.
1545

c. The order passed by Secretary is based on sound legal principle of justice as
opportunity of hearing was afforded, inasmuch as, sufficient material was there to doubt the
findings returned by the arbitration committee.

9. In support of his above submission, Sri Srivastava, emphasized upon a point of law that
once party had entered an agreement with another party, it was bound by arbitration of the
agreement, and therefore, petitioner was required to deposit entire lease rent by 31st March, 2015
and in any case by extended period of 30th June, 2015. He argued that subsequent report dated
5.12.2023 raised by Director, Fisheries, reservoir water could not be emptied or could not be
brought to its minimal level by opening the sluice gate of dam to allow fishes pushed in reservoir to
get overflowed with water through gate. Thus, according to him finding returned by the Arbitration
Committee was perverse. He also reiterated a fact position that Arbitration Committee colluded
with petitioner in recording a finding in his favour by concluding that he was liable to the dues and
amount already deposited by him could not have been set off against dues. He submitted that
against all these members of the Arbitration Committee, disciplinary proceedings had been
initiated.

10. Having heard learned counsel for the respective parties and having perused the records,
two legal points emerged for our consideration:

i. Whether the State Government was bound by Arbitration Committee' report as an
award and to question it, it could have applied only under Section 34 of the Arbitration and
Conciliation Act, 1996 and not otherwise

ii. Whether Secretary who represented State Government could have recalled his earlier
order accepting the report/ recommendation of Arbitration Committee without there being any
averment or recitals coming in the order impugned that earlier order was obtained by fraud and/or
misrepresentation.

11. Coming to the first aspect involved in the matter, we find there to be no quarrel between
the parties as to arbitration clause, nor there is any quarrel in respect of the matter of reference
made to arbitrator as State Government itself had appointed one Bhism Lal Verma as an arbitrator.

12. The averment has been made vide paragraph 28 that arbitrator was transferred from
department of fisheries to revenue department and said arbitration matter was thereafter referred to
a three member committee appointed by the State Government through order passed by Special
Secretary dated 21st September, 2016. Paragraph 28 of the writ petition runs as under:

"28. That the sole Arbitrator was transferred from the Department of Fisheries and
Revenue Department, hence the Arbitration matter was referred to the three member Arbitrator
committee. The appointment of three member Arbitrators committee were made by office order
dated 21.09.2016. Section 2d defines about Arbitrational Tribunal. Section 10 of the Arbitration
and Conciliation Act, 1996, defines about numbers of Arbitrator. The photocopy of the order dated
21.09.2016 is being filed here and marked as Annexure No. 18 to this writ petition"
1546 INDIAN LAW REPORTS ALLAHABAD SERIES

13. This appointment of Arbitration Committee has not been denied, rather allegations have
been made against petitioner that since he did not appear before sole arbitrator, he closed
arbitration proceeding on 7.4.2016 and in the circumstances, government was compelled to appoint
three member arbitration committee. Paragraph 36 of the counter affidavit runs as under:

"That the contents of paragraph no. 28 of the writ petition, as stated, are absolutely
wrong and incorrect, hence vehemently denied. It is wrong to say that the sole arbitrator was
transferred from the department of fisheries and revenue department, hence the arbitration matter
was referred to the three-member Arbitrator Committee. It is reiterated that the petitioner himself
did not appear and cooperate the sole arbitration proceedings, it is therefore, the sole arbitrator
closed the arbitration proceeding vide order dated 7.4.2016. Thereafter, the Government
proceeded to appoint three member Conciliation Committee."

14. This above quoted paragraph 36 of the counter affidavit has been sworn on the basis of
record, but no records have been appended in form of order dated 7.4.2016 by which it could be
inferred that arbitrator had closed the arbitration proceedings, instead what we find is that order of
Secretary of the State Government appointing a three member arbitration committee does not refer
to any such order. Thus in absence of specific denial to what has averred in paragraph 28 in the writ
petition, it is liable to be assumed a that three member arbitration committee came to be appointed
by the State Government after sole arbitrator had stood transferred.

15. In any view of the matter, once matter stood transferred to a three member arbitration
committee, it will be taken as arbitration proceedings and Sri Sravastava, learned Additional Chief
Standing Counsel could not point out anything from the relevant clauses of the agreement that there
was a provision for appointment of a sole arbitrator and not a three member arbitration committee.

16. We have gone through terms of agreement entered between the parties and we do not find
anything there to be any such thing in any of clauses which mandated for only sole /one member
arbitrator. The relevant provision of agreement is quoted hereunder:

"11. जलाशय के ठेके के सम्बन्र् में डकसी भी प्रकार का डववाद उत्पन्न होने की डस्थडि में प्रकरण मध्यस्थ को डदया जायेगा। मध्यस्थ की
डनयुडक्त डनदेशक मत्स्य द्वारा की जायेगी, डजनके द्वारा डनणाय अडन्िम एवं सभी पक्षों को मान्य होगा।"

English translation by this Court:

"In the event of any dispute relating to contract of reservoir, matter will be referred for
mediation. Mediator shall be appointed by Director Fisheries who decision shall be final and shall
be binding upon the parties."

17. Thus, it is clear that there was a valid appointment of three member arbitration committee
and it came to pass an award on 17.10.2016 settling payments already made by petitioner against
recovery and directing for State to waive off recovery in terms of findings returned by the the
Arbitration Committee. So finding part of the Arbitration Committee clearly records that as per
agreement petitioner was to do fishing to the tune of 850 quintals of fish from reservoir whereas he
could do finishing only 45.5. quintals because water of the reservoir got at the bottom and most of
2 All. Mushtaq Ahmad Vs. State of U.P. & Ors.
1547
the fishes slipped through sluice gate into canal and nearby area after it was opened and that too
without notice to the petitioner. These findings were never assailed and hence would be taken for
the purpose of arbitration as having a binding effect under the Arbitration and Conciliation Act,
1996. The Arbitration Committee's award could have been challenged of course, before District
Judge under Section 34 of the Arbitration and Conciliation Act, 1996 but the State chose not
question it but to accept the same. Accordingly on behalf of State Government an order came to be
passed by under Secretary on 16th March, 2017 accepting report and writing off of the entire dues
of the petitioner.

18. From the above quoted paragraphs (vide paragraph 3 above) of the order of the UnderSecretary dated 16th March, 2017, it has become absolutely clear that findings returned by the
Arbitration Committee had been accepted in toto and consequently relief was granted to the
petitioner but suddenly this order came to be recalled for no justifiable reasons, vide order dated
30th June, 2017. Findings returned in the order dated dated 30th June, 2017 given justified reason
for recall was that the order passed by the Arbitration Committee was without proper appreciation
of documents and suffered from lack of transparency, inasmuch as, report was ex parte. The
reasons assigned in the order dated 30th June, 2017 vide paragraphs 2 and 3 of the order is
reproduced hereunder:

"2. इस सम्बन्ध में मुझे यह कहने का कनदेश हुआ है कक प्रकरण मे मध्यस्थता सकमकत द्वारा उपलब्ध करायी गयी ररपोटद/संस्तुकत का पुनः
परीक्षण करने पर यह पाया गया कक मध्यस्थता सकमकत द्वारा प्रकरण के सम्बन्ध मे सम्पूणद तथ्यों का कनष्पक्ष व पारदशी कवश्लेर्ण न करते हुए एक पक्षीय
आख्या प्रस्तुत करते हुए श्री मुस्ताक अहमद पुत्र श्री इस्हाक अहमद कनवासी पूरब मोहान हाकमदनगर जनपद सोनभर पर श्रेणी-1 क धंधरौल जलाशय
जनपद सोनभर की अवशेर् धनराकश/ककश्त रू0 49,27,905/- की आर०सी० मे माध्यम से वसूली को माफ ककये जाने के सम्बन्ध में अकनयकमत रूप से
अपनी संस्तुकत शासक को प्रस्तुत की गयी।

3. उक्त प्रकरण में सम्यक कवचारोपरान्त पूवद ठेकेदार श्री मुस्ताक अहमद पुत्र श्री इस्हाक अहमद कनवासी पूरब मोहान हाकमदनगर जनपद
सोनभर पर श्रेणी-1 क धंधरौल जलाशय जनपद सोनभर की अवशेर् धनराकश/ककश्त रू0 49,27,905/- (रू० उन्चास लाख सत्ताईस हजार नौ सौ
पाच मात्र) की आर०सी० के माध्यम से वसूली को माफ ककये जाने हेतु कवर्यक शासन के उक्त संदकभदत आदेश संख्या 1959/सत्रह-म-2016-09(320)/2016 कदनांक 16 माचद 2017 को तत्प्कालीन प्रभाव से कनरस्त ककया जाता है।

कृपया उपरोक्त तत्प्काल आवश्यक कायदवाही सुकनकित करते हुए कृत कायदवाही से शासन को भी अवगत कराने का कष्ट करे।

भवदीय
30.06.17
डा० सुधीर एम० बोबडे
मुख्य सकचव"

English Translation by this Court:

"2. In this regard I have been directed to state that after re-examining the
report/recommendation of the arbitration committee and having analysed in an impartial and
transparent manner, it has been found that arbitration committee had submitted ex parte report
directing/recommending for writing off the dues of Rs. 49,27,905/- in respect of class I reservoir
1548 INDIAN LAW REPORTS ALLAHABAD SERIES
Dhandhraul of which contract was awarded to Mustaq Ahmad S/o Ishhaq Ahmad, R/o- East
Mohan, Hamidnagar, district Sonbhadra .

3. Having examined the matter comprehensively regarding liability imposed upon Mustaq
Ahmad S/o Ishhaq Ahmad, R/o- East Mohan, Hamidnagar, district Sonbhadra of Rs. 49,27,905
through recovery certificate in respect of Dhandhraul reservoir, the order being no.1959/17-M2016-0-9(320)/2016 dated 16th March, 2017 issued to write-off of dues, is hereby cancelled.

Please do needful measures accordingly immediately."

19. Recitals as contained in the above quoted paragraphs amounted to reviewing the order
passed earlier by the under Secretary dated 16th March, 2017. If the Chief Secretary or the Special
Secretary is taken to be higher authority, then it amounted to an appeal sitting over and above the
order of the Under-Secretary which in our considered view may be a gross indiscipline for want of
statutory provision may invite disciplinary action. Power of review cannot be, therefore, available,
but power to recall would of course, be available provided, it is brought to the notice of the
authority that earlier the order was obtained by fraud/misrepresentation or of course, in the event
order was without authority of law. What we find is that in earlier order dated 16th March, 2016,
there was absolute discussion on the findings returned by the Arbitration Committee, but in order
of recall dated 13th June, 2017, there was no reason assigned as to why this finding earlier accepted
was bad. Upon being challenged before this Court ,this order came to be set aside by the court by a
detailed judgement dated 26th April, 2023 directing for reconsideration of the matter and passing
order afresh. The Court basically quashed the order for the reason that order was passed by the
Secretary to the Government without affording opportunity of hearing. Now this time, petitioner
represented the matter and the order was passed after considering the representation.

20. One of the arguments advanced by Sri Singh, learned Senior Advocate appearing for the
petitioner was that merely for a fact that matter was remanded, it did not mean that authority got
vested with power to take fresh decision on merits. It was further argued before this Court that it
would remain question of law as to whether order passed by Secretary on behalf of the State after
applying its mind could have been recalled in the absence of any finding of misrepresentation or
fraud.

21. The legal position as emerges out in the case of Indian Bank v. Satyam Fibres (India)
Pvt. Ltd. (1996) 5 SCC 550, the Supreme Court vide paragraph 20 has held thus:

"20. By filing letter No.2775 of 26.8.91 along with the Review Petition and contending
that the other letter, namely, letter No.2776 of the even date, was never written or issued by the
respondent, the appellant, in fact, raised the plea before the Commission that its judgment dated
16.11.93, which was based on letter No. 2776, was obtained by the respondent by practising fraud
not only on the appellant but on the Commission too as letter No.2776 dated 26.8.91 was forged by
the respondent for the purpose of this case. This plea could not have been legally ignored by the
Commission which needs to be reminded that the Authorities, be they Constitutional, Statutory or
Administrative, (and particularly those who have to decide a lis) possess the power to recall their
judgments or orders if they are obtained by fraud as Fraud and Justice never dwell together (Fraus
2 All. Mushtaq Ahmad Vs. State of U.P. & Ors.
1549
et jus nunquam cohabitant). It has been repeatedly said that Fraud and deceit defend or excuse no
man (Fraus et dolus nemini patrocinari debent).

21. In Smith v. East Elloe Rural District Council (1956) AC 736, the House of Lords held
that the effect of fraud would normally be to vitiate any act or order. In another case, Lazarus
Estates Ltd. v. Beasley (QB at p. 712). Denning, L.J. said:

" No judgment of a court, no order of a minister, can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything.'

22. This view has been further approved by Supreme Court in the matter in the case of Budhia
Swain and Others v. Gopinath Deb and Others (1999)4 SCC 396, in which the Supreme Court
vide paragraph 6 has held thus:

"What is a power to recall? Inherent power to recall its own order vesting in tribunals or
courts was noticed in Indian Bank v. Satyam Fibres (India) (P) Ltd. [(1996) 5 SCC 550] Vide para
23, this Court has held that the courts have inherent power to recall and set aside an order.

i) obtained by fraud practised upon the court,

(ii) when the court is misled by a party, or

(iii) when the court itself commits a mistake which prejudices a party.

In A.R. Antulay v. R.S. Nayak [(1988) 2 SCC 602 : 1988 SCC (Cri) 372 : AIR 1988 SC
1531, para 130] (vide para 130), this Court has noticed motions to set aside judgments being
permitted where

(i) a judgment was rendered in ignorance of the fact that a necessary party had not been
served at all and was shown as served or in ignorance of the fact that a necessary party had died
and the estate was not represented,

(ii) a judgment was obtained by fraud,

(iii) a party has had no notice and a decree was made against him and such party
approaches the court for setting aside the decision ex debito justitiae on proof of the fact that there
was no service."

23. From the above sound legal principle of law enunciated in above cited decisions, it is clear
that authority is not vested with power to recall its order for the sake of recall only. The authority is
hide bound in law to record reasons and justify its action for recalling order.

24. In our considered view an order if does not suffer from any misrepresentation or fraud or
an order in not bad for want of authority of law , it is to be taken as genuine order passed after due
application of mind and hence such order cannot be permitted to be recalled. We find apt here to
1550 INDIAN LAW REPORTS ALLAHABAD SERIES
mention that while this court remanded the matter, it did not set aside the order of under Secretary
dated 16th March, 2017 accepting the report/recommendation of three member arbitration
committee. It recommend the matter for hearing petitioner as the order dated 11th July, 2017
recalling the order 30th June, 2017 was being set aside. After going through the entire order
impugned in this petition, we find that there is no whisper of misrepresentation or fraud in getting
order 30th June, 2017 passed, rather the findings are that recommendation of arbitration committee
are flawed one. Secretary tried to sit over and above the recommendations of the Arbitration
Committee which was earlier accepted by the State Government to test whether it was a mere
recommendation or it was a complete award under order passed by Arbitration Committee. This
remand does not empower the authority to travel beyond findings returned to a different conclusion
than what has been returned by Arbitration Committee. Thus without challenging the matter under
Section 34 of Arbitration and Conciliation and Act, 1996, the government is bound to accept
recommendation of the arbitration committee.

25. In view above, first point stands answered in favour of petitioner and against the State.

26. Coming to second point as to whether order could have been recalled. We have already
held above held that order of recall does not pass the test of principles upon which a recall can be
justified qua administration or quasi judicial action .

27. Besides above, we find that under the order impugned new report has come to be relied
upon which is dated 5th December, 2023 much after cancellation of lease. There was no occasion
for respondents to have obtained report only in the year 2023 more than eight years expiring since
2015. The maintenance of reservoir and minimum level of water was an issue in 2015 and what
happened in 2015 cannot be said to have remained same in 2023. For investigation or enquiring a
matter of incident happened in the year 2015, there was absolutely no occasion for calling a fresh
report in 2015 to test the order passed on the basis of report available in the year 2015. No recitals
contained in the order impugned go on to demonstrate that this report of the year 2023 was shown
to the petitioner at any point of time. The entire order is based upon report which shows that
minimum level of water was maintained and the reservoir cannot be emptied and hence findings
were bad.

28. In our considered view findings returned on the basis of documents available in 2016
cannot be disturbed on the basis of some new report obtained after 8 years. This was certainly
beyond scope of enquiry by the State to dilute the findings arrived at in the arbitration
proceedings. The order of recall even on merits is bad. Thus order of recall cannot be sustained
in law.

29. In view of above, writ petition thus succeeds and is allowed. The order dated 9.1.2024
passed by Additional Chief Secretary, U.P. Government, Annexure No. 1 is quashed and
consequential order dated 18.1.2024 passed by respondent no. 4 (Annexure no. 2) if any shall be
automatically quashed.

30. No order as to cost.
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2 All. Greater Noida Industrial Development Authority Vs. State of U.P. & Anr.
1551
(2026) 2 ILRA 1551
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 09.02.2026

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Writ C No. 8940 of 2025

Greater Noida Industrial Development Authority ...Petitioner
Versus
State of U.P. & Anr. ...Respondents
ISSUE FOR CONSIDERATION
Whether a revision under Section 41(3) of the U.P. Urban Planning and Development Act, 1973
against a demand notice is maintainable;
Whether the revisional authority has jurisdiction to review its own order;
Whether absence of opportunity of hearing vitiates the revisional order; and
Whether the allottee was entitled to grant of zero period benefit in the facts of the case.
HEADNOTE
U.P. Urban Planning and Development Act, 1973 - s. 41(3) - Revision - Maintainability - Review
jurisdiction - Opportunity of hearing - Lease allotment - Reduction of land area -Zero period

Held: On 14.12.2022, GNIDA issued a demand notice regarding lease premium and lease rent
calculated up to 15.12.2022, amounting to Rs.1,06,78,71,600.15 - The opposite party no.2 filed
a revision under Section 41(3) of the U.P. Urban Planning and Development Act, 1973, read with
Section 12 of the U.P. Industrial Area Development Act, 1976 - The revision was allowed by the
order dated 19.10.2023, holding that the allottee is entitled to be granted zero period benefit till
execution of the supplementary deed on 29.04.2014.
The power conferred upon the State Government under Section 41(3) is wide enough to examine
the propriety of a demand - After having submitted to the jurisdiction of the revisional authority
and having contested the revision on merits and having filed successive review applications, the
petitioner cannot be permitted to raise the plea of non-maintainability for the first time in writ
proceedings - Court held that the revisional authority has no power to review its orders - Court
found no force in the submission of the petitioner that the impugned revisional order was passed
without giving an opportunity of hearing, as the record revealed that the petitioner had filed
detailed objections against the revision, which were taken into consideration while deciding the
revision and were dealt with appropriately.
Although the lease-deed was executed on 24.11.2010, a supplementary lease-deed was
executed on 29.04.2014, reducing the area of the leased land by about 40%. The opposite party
no.2 was not at fault for the substantial decrease in the area leased out and suffered for the
delay in finalisation of the area - Execution of lease deed in respect of land which GNIDA had no
right to transfer and subsequent execution of a correction deed decreasing the land area was
without any fault of the opposite party no.2 - The lessee could not even prepare a development
plan till a possession certificate in respect of the revised land area was issued on 05.05.2014 -
The Court held that the revisional authority has not committed any error or illegality and that the