# Raj Pal Singh Malik v. The State Of U.P. & Anr

- **Citation:** (2016) 5 ILRA 408
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-05-03
- **Bench:** Sudhir Agarwal, Shamsher Bahadur Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/raj-pal-singh-malik-v-the-state-of-u-p-anr-43848
- **Pages:** 10

## Text

408 INDIAN LAW REPORTS ALLAHABAD SERIES

30. In this connection, it would further be relevant to note that Section 163 was omitted from
the statue book because on account of the amendment made in the Act by the U.P. Land Laws
Amendment Act 1982, Act No.20 of 1982 as it had ceased to have any relevance in view of the
amended provisions.

31. Besides the following extract from the Prefactory Note 1- Exract from Statement of
Objects and Reasons as attached to the bill which became Act No.20 of 1983, further clarifies the
position beyond any semblance of doubt -

"3. Under the existing provisions the transfers made in contravention fo the provisions of
the said Act are declared void after following the given procedure. It has been considered
necessary to provide that such transfers shall be deemed to be void and no declaration shall be
necessary therefor."

32. The writ petition is therefore dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 03.05.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE SHAMSHER BAHADUR SINGH, J.

Writ A No.- 30922 Of 1996

Raj Pal Singh Malik ...Petitioner
Versus
The State Of U.P. & Anr. ...Respondents

Counsel for Petitioner:
V.S.Shukla, B.N.Singh, H.N.Singh, L.P. Nathani, M.K.Pandey, S.K. Rai

Counsel for Respondents:
C.S.C., A.R. Dubey

The present writ pertains to the dispute related with seniority and promotion vis à vis petitioner and
respondent 2. In 1973 petitioner was appointed on 22.11.1973 as Executive Officer ClassIV Municipal Board,
he was governed by U.P. Palika Administrative (Subordinate) Service. When respondent2 was appointed as
Tax Superintendent on ad hoc basis, vide order dated 27th August, 1981, passed by DLB, at that time also,
post of Tax Superintendent ClassI Municipal Board was part of U.P. Palika Administrative (Subordinate)
Services. Respondent2, therefore, joined the same service in which petitioner was working having been
substantively appointed on 22.11.1973 but in different cadre of Tax Superintendent. Respondent2, therefore,
joined the same service in which petitioner was working having been substantively appointed on 22.11.1973
but in different cadre of Tax Superintendent. The cadre of Tax Superintendents ClassI Municipal Boards was
separated from U.P. Palika Administrative (Subordinate) Service and brought within a new cadre, namely, U.P.
5 All. Raj Pal Singh Malik Vs The State Of U.P. & Anr.

409
Palika Revenue (Subordinate) Service. Respondent2, therefore, got a separate service with effect from
3.5.1983 i.e. U.P. Palika Revenue (Subordinate) Service and continued to work on ad hoc basis. On that date
also, he was a member of service in U.P. Palika Revenue (Subordinate) Service and had no claim in respect to
a post governed by U.P. Palika Administrative (Subordinate) Service.

Court allowed the writ and given certain directions:

I) From commencement of service under U.P. Palika Executive (Subordinate) Service under Rules, 1966,
respondent1 shall prepare a final seniority list in accordance with Rules within six months and thereafter shall
adjust promotions of respective Officers accordingly on higher posts and give consequential effect in
promotion to higher posts.

II) Similar exercise shall be ensured in respect of Officers in U.P. Palika Administrative (Superior) Service.

III) Promotions of Officers found illegal or not consistent with their seniority position etc. shall be undone,
after giving a show cause notice to them and those who are entitled, shall be given benefit with due date.

(Delivered by Hon'ble Sudhir Agarwal, J.
&
Hon'ble Shamsher Bahadur Singh, J.)

1. Heard Sri H.N. Singh, Senior Counsel assisted by Sri Vineet Kumar Singh, learned counsel
for petitioner, learned Standing Counsel for respondent-1 as well as Sri A.R. Dubey, learned
counsel appearing for respondent-2.

2. Dispute in this writ petition pertains to seniority and promotion vis-à-vis petitioner and
respondent-2. Petitioner was appointed as Executive Officer-Class IV Municipal Board on
22.11.1973. He was promoted as Executive Officer-Class III Municipal Board with effect from
5.2.1974 and Executive Officer-Class II Municipal Board with effect from 11.1.1988 vide order
dated 26.10.1995. The aforesaid order of promotion dated 26.10.1995 was passed pursuant to an
order dated 29.7.1994 passed by this Court in Civil Misc. Writ Petition No.23416 of 1994, whereby
State Government was directed to dispose of petitioner's representation dated 20.5.1994.
Retrospective promotions were given considering petitioner's representation that he is senior to one
M.A. Naqvi who was promoted as Executive Officer-Class III with effect from 5.2.1974 and ClassII with effect from 11.1.1988.

3. Respondent-2, Ish Shakti Kumar Singh was appointed as Tax Superintendent-Class I
Municipal Board on regular basis vide order dated 18/26.6.1986. He was initially appointed on ad
hoc basis as Tax Superintendent-Class I Municipal Board in August, 1981 and after insertion of
Sub-rule (7) in Rule 21-A in U.P. Palika (Centralized) Service Rules, 1966 (hereinafter referred to
as ''Rules,1966'), respondent-2 was regularized on the said post along with several others.

4. It appears that respondent-2 also filed Civil Misc. Writ Petition No.6050 of 1993, claiming
promotion on higher post from the date his juniors were promoted, wherein an order was passed on
2.8.1995, directing State Government to look into his grievance and thereupon treating case of
410 INDIAN LAW REPORTS ALLAHABAD SERIES
respondent-2 with Abhai Veer Singh who was promoted as Executive Officer Grade-II with effect
from 23.6.1984 and Executive Officer Grade-I with effect from 17.1.1987, respondent-2 was
granted promotion accordingly as Executive Officer Grade-II with effect from 23.6.1984 and
Executive Officer Grade-I with effect from 17.1.1987.

5. Petitioner claiming himself to be senior to respondent-2 made a representation on
26.12.1995, claiming that he should also be given promotion as Executive Officer Class-II with
effect from 23.6.1984 and Class-I with effect from 17.1.1987 since he was senior to respondent-2.
Director, Local Bodies, Uttar Pradesh, Lucknow (hereinafter referred to as ''DLB') made
recommendation in petitioner's favour, vide letter dated 22nd July, 1996. However, since no action
was taken, present writ petition has been filed by petitioner. During pendency of writ petition, due
to some subsequent events, writ petition has been amended by insertion of paragraphs 11A to 11H.

6. It is pointed out that petitioner's representation dated 26.12.1995 has been rejected by
Government, vide order dated 27.3.1997. A combined seniority list was prepared by State
Government on 7.9.2001 in which petitioner was placed at serial no.23 whereas respondent-2 was
placed at serial no.53. In that view of matter, petitioner claimed that he should have been given
promotion as Executive Officer Class-II and Class-I from the date his junior, respondent-2 was so
promoted. Seniority list pertains to U.P. Palika Executive (Subordinate)Service of Executive
Officers Class-III.

7. Respondents have filed counter affidavit in which basic facts are not disputed but it is said
that promotion to respondent-2 has been given pursuant to interim order dated 2.8.1995 passed in
Civil Misc. Writ Petition No.6050 of 1993, subject to final decision.

8. We may place it on record after verification that Civil Misc. Writ Petition No.6050 of 1993
has already been dismissed on 19.2.2003 on statement made by counsel for petitioner in that case
i.e. respondent-2 in this case that the same has rendered infructuous.

9. A separate counter affidavit has been filed by respondent-2 also in which he has admitted to
have been appointed as Tax Superintendent on ad hoc basis on 21.8.1981/27.8.1981, by order
passed by DLB. The aforesaid appointment was made under Rule 31 of Rules, 1966. It is also said
that after bifurcation of cadre of Tax Superintendents from Executive Officers, respondent-2 opted
for cadre of Executive Officers and was merged therein vide order dated 31st October,1994.

10. Sri H.N. Singh, learned counsel for petitioner has submitted that taking advantage of
seniority dispute of Executive Officers Class-III, respondent-1 made wholly arbitrary promotions
and thereafter in the garb of giving benefit of next below Rule, several incumbents have been given
promotion from different dates, ignoring inter se seniority altogether and position of officers in
executive branch of service have been totally disturbed.
5 All. Raj Pal Singh Malik Vs The State Of U.P. & Anr.

411

11. Pursuant to an order passed by this Court, a personal affidavit has been filed by Shree
Prakash Singh, Secretary, Nagar Vikas Vibhag, Govt. of U.P., Lucknow and the same has been
replied by petitioner. We propose to discuss the same at a later stage.

12. Rules, 1966, as initially notified, constituted certain centralized services, detailed in Rule 3
and for our purposes it would be relevant to notice that U.P. Palika Administrative (Superior)
Service amongst other consisted of Executive Officers Class-I and II Municipal Boards. Similarly,
U.P. Palika Administrative (Subordinate) Service covered Executive Officers Class-III and IV
Municipal Boards and Tax Superintendents of Mahapalikas and Tax Superintendents Class-I
Municipal Boards. Aforesaid two services, which covered different category of officers, read as
under:

(1) U.P. Palika Administrative (Superior)
Service:

(i) Up Nagar Adhikaris of Mahapalikas.
(ii) Sahayak Nagar Adhikaris of Mahapalikas.
(iii) Executive Officers of Class I and II
Municipal Boards and Anubhagiya Adhikari
of Mahapalika, Kanpur.
(iv) Assessing Officers of Class I and II
Municipal Boards.
(v) Secretaries of Class I Municipal Boards.
(2) U.P. Palika Administrative (Subordinate)
Service:

(i) Executive Officers of Class III and IV
Municipal Boards.
(ii) Assessing Officers of Class III and IV
Municipal Boards.
(iii) Secretaries of Class III and IV Municipal
Boards.
(iv)Tax Superintendents (including Toll,
Terminal or Octroi Superintendents) and
Assistant
Tax
Superintendents
(including
Assistant
Toll,
Terminal
or
Octroi
Superintendents)
and
other
Revenue
Superintendents of Mahapalikas.
(v)
Octroi
Superintendents
and
Tax
Superintendents and Tax Superintendents
(including
Toll
and
Terminal
or
Toll
Superintendents)
of
Class
I
Municipal
Boards.

 (emphasis added)

13. Rule 3 was substituted by U.P. Palika (Centralized) Services (Eleventh Amendment)
Rules, 1983, published in U.P. Gazette dated 3rd May, 1983 and came into force with effect from
412 INDIAN LAW REPORTS ALLAHABAD SERIES
date of publication in Gazette. By the aforesaid amendment, cadres dealing with Revenue Services
like Assessing Officers, Tax Superintendents, Octroi Superintendents, Assistant Tax
Superintendents etc, were separated from Administrative Services like Executive Officers, Nagar
Adhikaris, etc. Reconstituted services governing Executive Officers are U.P. Palika Administrative
(Superior) Service which covered Executive Officers of Class-I and Class-II Municipal Boards and
U.P. Palika Administrative (Subordinate) Service having in its ambit Executive Officers of ClassIII and IV Municipal Boards. Assessment Officers of Mahapalikas and Assessment Officers of
Class-I Municipal Boards were kept in the cadre of U.P. Palika Revenue (Superior) Services.
Similarly, Tax Superintendents of Mahapalikas and Class-I Municipal Boards were placed in U.P.
Palika Revenue (Subordinate) Service. New cadres constituted with effect from 3rd May, 1983,
read as under:

(1) U.P. Palika Administrative (Superior)
Service:

(i) Up Nagar Adhikaris of Mahapalikas.
(ii) Sahayak Nagar Adhikaris of Mahapalikas.
(iii) Executive Officers of Class I Municipal
Boards.
(iv) Executive Officers of Class II Municipal
Boards.
(v) Secretaries of Class I Municipal Boards.
(vi) Anubhagiya Adhikaris of Mahapalika,
Kanpur.
(2)U.P. Palika Administrative (Subordinate)
Service:

(i) Executive Officers of Class III Municipal
Boards.
(ii) Executive Officers of Class IV Municipal
Boards.
(iii) Secretaries of Class II Municipal Boards.
(iv) Secretaries of Class III and IV Municipal
Boards.
(3)U.P. Palika Revenue (Superior) Service:

(i)Assessment Officers of Mahapalikas
(ii) Assessment Officers of Class I Municipal
Boards.
(4)U.P. Palika Revenue (Subordinate) Service:

(i)Tax Superintendents of Mahapalikas.
(ii) Assessment Officers of Class II Municipal
Boards.
(iii)
Tax
Superintendent
of
Class
I
Municipal Boards.
(iv)
Assistant
Tax
Superintendents
of
Mahapalikas.
(v) Assessment Officers of Class III and IV
Municipal Boards.
(vi) Assistant Tax Superintendents of Class I
Municipal Boards.
(vii)Tax
Superintendents
of
Class
II
5 All. Raj Pal Singh Malik Vs The State Of U.P. & Anr.

413
Municipal Boards.
(viii) Tax Superintendents of Class III
Municipal Boards.
(ix) Revenue/Tax Inspectors of Mahapalikas
and Class I Municipal Boards.
(x) Revenue/Tax Inspectors of Class II
Municipal Boards.

14. Aforesaid Rule 3 has further been amended by substitution vide notification published in
U.P. Gazette dated 13.9.2006 but for all practical purposes, cadres of U.P. Palika Administrative
(Superior Service), U.P. Palika Administrative (Subordinate)Services, U.P. Palika Revenue
(Superior) Services and U.P. Palika Revenue (Subordinate) Services are substantively same except
of change of some nomenclature in respect to Local Bodies.

15. Rule 21-A was inserted in 1986 for regularization of ad hoc appointments and it has been
further substituted vide notification dated 10.4.2003 whereby ad hoc appointments made before
30th June, 1998 have been allowed to be regularized.

16. Now taking aforesaid Rules into consideration, in 1973, when petitioner was appointed on
22.11.1973 as Executive Officer Class-IV Municipal Board, he was governed by U.P. Palika
Administrative (Subordinate) Service. When respondent-2 was appointed as Tax Superintendent on
ad hoc basis, vide order dated 27th August, 1981, passed by DLB (copy of appointment order is
annexure-1 to the counter affidavit filed by respondent-2), at that time also, post of Tax
Superintendent Class-I Municipal Board was part of U.P. Palika Administrative (Subordinate)
Services.

17. Respondent-2, therefore, joined the same service in which petitioner was working having
been substantively appointed on 22.11.1973 but in different cadre of Tax Superintendent.
Moreover, appointment of respondent-2, was ad hoc made by Director in purported exercise of
power under Rule 31. The cadre of Tax Superintendents Class-I Municipal Boards was separated
from U.P. Palika Administrative (Subordinate) Service and brought within a new cadre, namely,
U.P. Palika Revenue (Subordinate) Service vide Rule 3 as substituted with effect from 3rd May,
1983 on which date also respondent-2 admittedly was working on ad hoc basis as Tax
Superintendent Class-I Municipal Board.

18. In fact, we find that Tax Superintendents of various classes of Municipal Boards, namely,
Class-I, Class-II and Class-III all were kept in one service i.e. U.P. Palika Revenue (Subordinate)
Service with effect from 3.5.1983. Respondent-2, therefore, got a separate service with effect from
3.5.1983 i.e. U.P. Palika Revenue (Subordinate) Service and continued to work on ad hoc basis.
After insertion of Rule 21-A in Rules, 1966, respondent-2 was regularized on 26.6.1986 as Tax
Superintendent. Obviously, on that date also, he was a member of service in U.P. Palika Revenue
(Subordinate) Service and had no claim in respect to a post governed by U.P. Palika Administrative
(Subordinate) Service.
414 INDIAN LAW REPORTS ALLAHABAD SERIES

19. The petitioner was appointed admittedly as Executive Officer-Class IV Municipal Board
on 22.11.1973 and recognizing his right of promotion from the date his junior MA Naqvi was
promoted as Executive Officer Class III Municipal Board, he was promoted as Executive Officer
Class III Municipal Board with effect from 5.2.1974. Therefore, on the date when respondent-2
was appointed on ad hoc basis i.e. in August, 1981, petitioner's status was that of an Executive
Officer Class III Municipal Board while respondent-2 was only an ad hoc Tax Superintendent
Class I Municipal Board.

20. Further when ad hoc appointment of respondent-2 was made substantive by order of
regularization, on the post of Tax Superintendent Class I Municipal Board on 26.6.1986, at that
time post of Tax Superintendent Class I Municipal Board had already ceased to be part of U.P.
Palika Administrative (Subordinate) Service. It was placed in a new service i.e. U.P. Palika
Revenue (Subordinate) Service with effect from 3.5.1983, hence respondent-2 had no claim or
competition with petitioner who was a member of a different service.

21. Service of Tax Superintendent Class I Municipal Board having been separated with effect
from 3rd May, 1983, respondent-2 further had no right to claim promotion as Executive Officer
Class II in 1984 since he was not a member of service in that cadre. Moreover, highest level
Executive Officer in U.P. Palika Administrative (Subordinate) Service was Executive Officer Class
III Municipal Board and petitioner, having been found entitled for promotion on the said post with
effect from 5.2.1974, could not be held junior to respondent-2 who was inducted as a mere ad hoc
Tax Superintendent in August 1981 for the first time and was regularized on 26.6.1986. For all
purposes, respondent-2 became member of service substantively on 26.6.1986 when he was
regularized under Rule 21A of Rules, 1966 and for the purpose of seniority that would be his
reckoning point.

22. If respondents granted promotion to respondent-2 as Executive Officer Class II Municipal
Board w.e.f. 23.6.1984 and as Executive Officer Class I Municipal Board on 17.1.1987, such
exercise was wholly illegal and void. Moreover, they could not have denied promotion to petitioner
on higher posts when respondent-2, junior to petitioner was given promotion from back date. In
fact, we have no hesitation in holding that respondents committed manifest illegality, firstly by
granting promotion to respondent-2 as Executive Officers-Class II and I Municipal Board and
secondly by ignoring senior Executive Officer-Class III Municipal Board.

23. Further respondents committed a manifest illegality in passing order dated 16th November,
1995, by misconstruing interim order dated 2.8.1995 passed in Civil Misc. Writ Petition No.6050
of 1993 and granted promotion to respondent-2 as Executive Officer Class-II Municipal Board with
effect from 23.6.1984 and Executive Officer Class-I Municipal Board with effect from 17.1.1987,
though respondent-2 had no such claim, whatsoever, in cadre of Executive Officer having never
been appointed therein.

24. Respondents, however, have relied upon an order dated 31st October, 1994, stating that
Tax Superintendents and Assistant Tax Superintendents, appointed before 3.5.1983, were given an
5 All. Raj Pal Singh Malik Vs The State Of U.P. & Anr.

415
option for absorption in administrative cadre and those who exercised such option were absorbed in
administrative service cadre vide order dated 31.10.1994. Copy of said order has been filed as
Annexure-3 to the counter affidavit of respondent-2. This is also referred to in para 4 of Office
Memorandum dated 27th March, 1997, whereby petitioner's representation has been rejected.

25. Here also, we find no provision for such absorption of a person in a service in which he
was never appointed. U.P. Palika Administrative (Subordinate) Service, as it stood prior to
3.5.1983, consisted of several cadres including Executive Officers of Class-III and IV Municipal
Boards and Tax Superintendent of Class-I Municipal Boards. Petitioner was substantively
appointed as Executive Officer Class-IV Municipal Board while respondent-2 was only an ad hoc
Tax Superintendent. Appointment letter of respondent-2 was issued by State Government on 21st
August, 1981,communicated by DLB, vide Office order dated 27.8.1981, appointing respondent-2
as Tax Superintendent Class-I, Municipal Board, purely on ad hoc and temporary basis and
mentions that he is liable to be terminated at any point of time or on the availability of a candidate
recommended by Uttar Pradesh Public Service Commission. Appointment was for a maximum
period of one year. Para 2 of appointment letter, Annexure-1 to counter affidavit of respondent-2,
reads as under:

"2& ;g fu;qfDr@rSukrh iw.kZr;k rnFkZ ,oa vLFkk;h gSA fdlh Hkh le; yksd lsok vk;ksx ls p;fur lq;ksX;
vH;FkhZ ds miyC/k gksus ij vFkok blds iwoZ fcuk fdlh uksfVl ds vFkok dksbZ dkj.k crk;s Jh flag dh lsok;sa lekIr dh
tk ldrh gSA bl fu;qfDr@rSukrh dh vf/kdre vof/k ,d o"kZ dh gksxh ftlds iw.kZ gksus ds iwoZ lsok lekIr fd;s tkus
dh n'kk esa in/kkjd dks fdlh Hkh izdkj dk izR;kosnu nsus dk vf/kdkj izkIr u gksxkA^^

"(emphasis added)

26. Thus respondent-2 as an ad hoc appointee, was not a member of service under Rules,
1966, hence question of his absorption in cadre of Executive Officer could not have arisen at all.
Moreover, he was regularized as Tax Superintendent with effect from 26.6.1986, hence question of
his absorption in administrative service before 3rd May, 1983 by order passed on 31.10.1994 is not
only beyond any statutory sanction but it appears that respondent-1 has muddled with different
services in a wholly arbitrary manner so as to create a total chaos illegal pattern in different
services.

27. Hereat we also find it necessary to refer to petitioner's counter affidavit in reply to personal
affidavit of Secretary, Nagar Vikas wherein he has placed on record report submitted by Sri Atul
Kumar Gupta, Principal Secretary in respect of petitioner's claim for promotion, arrears, etc.,
wherein we find that he (Principal Secretary) has admitted that various promotions were made
pursuant to interim orders passed by Court and due to absence of any final seniority list, all
promotions were ad hoc and stop gap. He has said that persons senior to petitioner placed at serial
nos. 6, 7, 8, 9, 12, 13, 14, 15, 16, 17, 19 and 22 have not been given promotion while petitioner has
been so promoted. In respect to Executive Officer-Class I Municipal Board, he has said that there
were only 19 sanctioned posts but thereagainst 51 officers, after ad hoc promotion, are working,
416 INDIAN LAW REPORTS ALLAHABAD SERIES
and this situation has arrived due to promotions given to number of juniors under Court's interim
orders.

28. When called upon, learned Standing Counsel could not say anything and admitted that in
the seniority list of Executive Officers, respondent-2, Ish Shakti Kumar Singh was placed at serial
no.53, still he was given promotions as Executive Officer-Class III and Class II Municipal Board
from dates much earlier to petitioner who was at serial no.23 yet has not been given such
promotions. He also could not provide any justification therefor.

29. We are really surprised and astonished as to the manner in which Centralized Services of
Executive Officers and Revenue Officers are being managed and maintained in various
municipalities and municipal corporations in the State. Entire responsibility is of concerned
Secretary/Principal Secretary as also Director, Local Bodies. We are also shocked to see, how
respondents could promote 51 Officers as Executive Officer-Class I Municipal Boards when
number of sanctioned posts were only 19. This speaks volume of its own. We have no hesitation in
observing that this situation must have arisen only due to some vested interests of people and
individual Officer(s) and that is how they have completely intermuddled with cadres causing grave
injustice to several senior Officers who have no resources to speak about their grievance when
other resourceful people have been favoured in one or the other way.

30. In the result, we allow this writ petition and issue following directions:-

I) From commencement of service under U.P. Palika Executive (Subordinate) Service
under Rules, 1966, respondent-1 shall prepare a final seniority list in accordance with Rules within
six months and thereafter shall adjust promotions of respective Officers accordingly on higher posts
and give consequential effect in promotion to higher posts.

II) Similar exercise shall be ensured in respect of Officers in U.P. Palika Administrative
(Superior) Service.

III) Promotions of Officers found illegal or not consistent with their seniority position etc.
shall be undone, after giving a show cause notice to them and those who are entitled, shall be given
benefit with due date. All consequential benefits shall be also given to those who are entitled and
those who have been given illegally, it would be open to respondent-1 to recover the amount
illegally paid to them after giving a show cause notice to them.

IV) Chief Secretary, U.P. Lucknow is directed to initiate appropriate departmental
inquiry in the matter against concerned officials for whose inaction or illegal indulgence the
aforesaid illegality, consistently, has been committed in the management of aforesaid cadres and
take appropriate serious action against them.

V) A compliance report shall be submitted to this Court in the first week of January,
2017.
5 All. K.L. Agarwal Vs State Of U.P. & Anr.

417

31. The petitioner shall be entitled to costs which we quantify to Rs.50,000/- which shall be
paid by respondent-1 to petitioner within two months.
---------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 25.05.2016

BEFORE

THE HON'BLE BHARAT BHUSHAN, J.

Application U/S 482 No.- 39907 Of 2013
&
Connected With Other Cases

K.L. Agarwal ...Applicant
Versus
State Of U.P. & Anr. ...Opposite Parties

Counsel for Applicant:
Ajay Bhanot

Counsel for Opposite Parties:
Govt. Advocate, Anil Kumar Verma, Anil Srivastava

HELD:-

The dispute between the parties is purely commercial and contractual in nature arising out of a Consignment
Sales Agent Agreement.

Mere non-payment of commission or refund of security deposit does not constitute offences under Sections
406 or 420 IPC.

For an offence under Section 420 IPC, dishonest or fraudulent intention must exist at the inception of the
transaction, which is absent in the present case.

Essential ingredients of criminal breach of trust under Sections 405/406 IPC, namely entrustment and
dishonest misappropriation, are completely missing.

Existence of an arbitration clause and invocation of arbitration indicates availability of civil remedy, barring
criminal prosecution.

General and omnibus allegations against directors and signatories without specific roles are insufficient to
sustain criminal proceedings.

Criminal law cannot be used as a shortcut for recovery of money or enforcement of contractual obligations.

Continuation of criminal proceedings amounts to abuse of process of law, warranting exercise of inherent
powers under Section 482 Cr.P.C.