the suit land, whereon 23 shops have been constructed and rented out, belongs to the State Government; that a part of the ‘Kalyan Mandap’ is built on the Government land and a portion of it on the leasehold area of the association; that the association could not have constructed the ‘Kalyan Mandap’ in this manner and, therefore, the portion of the land deserves to be resumed by the State Government; that the arrangement entered into by the association with M/s. INCON Associates is absolutely illegal and there is a conflict of interest since the Secretary’s son and son-in-law have been inducted as partners in the concerned firm; that there is revenue loss as the audit report of the Accountant General is appreciated; that the Secretary of the association could not have been instrumental in unauthorised construction on the government land and in generating revenue therefrom; that there is a serious concern about the nature of revenue generation utilisation and the loss sustained; and that the whole thing makes us feel that there is something rotten in the management of the affairs in fiscal aspects. Having so concluded, we issue the following directions:- (i) The Collector, Cuttack, shall take over possession of 23 shops and the ‘Kalyan Mandap’. (ii) The Department of Revenue shall be entitled to continue the tenancy and maintain the Kalyan Mandap and manage the affairs of the said property through District Collector, Cuttack. (iii) No tenant or anyone shall be entitled to institute any litigation in any manner in respect of the said property involved in this appeal that has arisen from T.S. No. 312 of 1991 instituted in the Court of Additional Civil Judge, Senior Division, Cuttack. (iv) The government, if it decides to manage the properties by entering into fresh agreement, is at liberty to do so. (v) The agreement between the association and M/s. INCON Associates is declared null and void. (vi) As the conflict of interest is obvious and the Secretary, who is accountable to the public, has failed to conduct himself as required under the law, he is debarred from contesting for any post in the association.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6450  OF 2016

(Arising out of S.L.P. (Civil) 34373 OF 2014)

Orissa Olympic Association

Th. General Secretary                       …  Appellant

Versus

State of Orissa & Anr.                  …   Respondents

J U D G M E N T

Dipak Misra, J.

The assailment in the instant appeal, by  special  leave,  is  to  the

legal acceptability of the judgment and order  dated  29.11.2014  passed  by

the High Court of Orissa, Cuttack, in First Appeal No. 158 of  2001  whereby

the learned Single Judge  has  set  aside  the  judgment  and  decree  dated

16.04.1999 and 21.04.1999 respectively  passed  by  the  learned  Additional

Civil Judge, Senior Division, Cuttack in T.S. No. 312 of  1991  wherein  the

learned trial Judge had decreed the  suit  of  the  plaintiff-appellant  and

permanently  restrained  the  defendants,  the  State  of  Orissa  and   its

functionaries, from disturbing the peaceful  possession  of  the  plaintiff-

association over the suit land.

2.    The facts which are essential to be exposited for the purpose  of  the

present appeal are that the appellant-association was granted lease of  land

measuring acres 20.808 decimals appertaining to Sabik  Settlement  Plot  No.

156 and portions of Plot Nos. 139, 143, 155 and 177 for the construction  of

a stadium. The lease deed was  executed  on  04.09.1949  and  registered  on

24.09.1949. After obtaining the lease of  the  land,  the  appellant  raised

high compound walls enclosing the lease hold area.  However,  to  the  north

eastern side, a space measuring about  75  decimals  was  left  outside  the

compound for the purpose of parking in respect of which also the  possession

remained with the appellant.

3.    As further averred in the plaint, subsequent to the grant of lease  in

the year 1949, the association was granted further  areas  for  which  fresh

lease deed was executed. The plaintiff has pleaded that the  leasehold  area

of acres 20.808 decimals included an area of acres 6.520 decimals  of  Sabik

Plot No. 139. An area of 0.048 decimals of this plot was  then  included  in

the barbed wire compound of the then Secretariat which is in  occupation  of

the Branch Recruiting Office. It was put  forth  that  though  the  recorded

area of  Plot  No.  139  was  acres  7.345  decimals,  yet  on  actual  spot

measurement, it was acres 6.568 decimals. It was asserted  that  the  entire

area was within the compound of the association except  the  area  of  acres

0.075 decimals that was  left  outside  the  compound  for  the  purpose  of

parking  and  the  area  of  acres  0.048  decimals  which  was  within  the

Secretariat enclosure.

4.    It was further asseverated in the plaint that  during  Hal  settlement

operation,  due  to  lack  of  supervision,  certain  mistakes  occurred  in

recording of different plots. As far as Sabik Plot No. 139 is  concerned,  a

part of it measuring an area of acre 0.705 decimals was included in the  Hal

Plot                     No. 7 out of which acre 0.630 decimals were  within

the compound of  the  plaintiff-association  and  acre  0.075  decimals  was

outside (0.630 + 0.075 = 0.705) the land. Thus,  the  total  land  was  acre

0.705 decimals. It had been further set forth that the Hal Plot No.  7  also

included portions of Sabik Plot Nos. 137 and 140 and thereby Hal Plot No.  7

with a total area of acre 0.880 decimals stood included  in  the  Hal  Khata

No. 203 which was recorded in the name of the  State  as  “rakhit”.  It  was

contended that the said record was erroneous in view of  the  fact  that  no

part of the said plot was in Khas possession  of  the  State.  As  indicated

earlier, acres 0.705  decimals  relating  to  Sabik  Plot  No.  139  was  in

possession of the appellant. The  remaining  area  of  acre  0.175  decimals

relating to Sabik Plot No 137 and Plot No. 140  was  in  possession  of  the

Branch recruiting office. Prior to the settlement,  there  was  no  “rakhit”

land by the side of the road to be recorded in the  name  of  the  State.  A

number of very old houses belonging to  the  plaintiff  and  to  the  Branch

recruiting office  physically  stood  on  this  Hal  Plot  No.  7.  The  Hal

settlement Khatian was finally  published  on  11.04.1988  but  it  was  not

available to the public. It was alleged that the land  in  question  was  in

possession of the association and further though a vast area covering  about

twenty four acres was in possession, yet the  incorrect  entry/inclusion  in

the Hal settlement could not be detected earlier as the Hal  Settlement  Map

was not available.

5.    As set  forth  in  the  plaint,  the  Tahsildar  initiated  proceeding

against the appellant under the Orissa Prevention of Land Encroachment  Act,

1972 (for brevity, “the Act”) vide Encroachment Case No.  213/1  of  1990/91

under the Act for eviction and the said proceeding was based  on  the  wrong

record as mentioned above.

6. Because of these circumstances, the appellant, after serving  notice  u/s

80 CPC instituted the suit for  right,  title  and  interest  and  permanent

injunction in respect of the suit property, i.e., Khata No. 203, Plot No.  7

measuring acre 0.705 decimals corresponding to part of Sabik  Plot  No.  139

on the ground that the land had been leased out in its favour. A relief  was

also sought to declare that the record of Hal Plot No.7  in  Hal  Khata  No.

203 so far as it related to acre 0.705 decimals of Sabik  Plot  No.  139  be

declared incorrect.   That apart, the plaintiff alternatively prayed  for  a

declaration that it had perfected  title  over  the  suit  land  by  way  of

adverse possession.

7.     The  defendants  filed  the  written  statement  admitting  that  the

plaintiff-association was in possession of the area  as  claimed.   It  also

accepted that the association had constructed a  massive  stadium  and  many

other houses and the entire area was enclosed by high compound  walls.   The

defendants-respondents denied  that  the  leasehold  area  of  acres  20.808

decimals included an area of acres 6.520 decimals of  Sabik  Plot  No.  139.

It was their stand that it included an area of  acres  6.222  decimals.   It

was averred that an area acres 20.808  decimals  had  been  leased  out  for

twenty years for construction of stadium as per Government order  in  letter

no. 17484 dated 29.6.1949 and lease deed bearing No.  4524  dated  29.9.1949

was executed and subsequently renewed vide Deed  No.  2526  dated  19.4.1974

for a period  of  another  twenty  years.  It  was  also  pleaded  that  the

Government sanctioned an area acres 2.703 decimals in their  Sanction  Order

No. 11680 dated 22.2.1959 for construction of Indoor Stadium and an area  of

acres 1.939 decimals for sinking  a  Swimming  Pool,  Swimming  Club  and  a

Restaurant, but no lease deed in respect of acres 1.939 has  been  executed.

It was further pleaded that during Hal settlement, the total area  of  acres

24.733 decimals has been recorded in the name of  the  appellant-Association

including an area of acres 1.222 decimals out of acres 1.939 as referred  to

above for which no lease deed has yet been  executed  and  the  differential

area measuring acre 0.717 decimals  (acres  1.939-  acres  1.222)  has  been

recorded during Hal settlement in Government Rakhit Khata and the plaintiff-

Association is in unauthorized possession of acre 0.634 decimals out of  the

said area of acre 0.717 for which encroachment case  was  initiated  and  an

order of eviction has been passed.

8.    On the basis of the pleadings, the  learned  trial  Judge  framed  the

following issues:-

1. Whether the plaintiff is in possession of the suit  land  from  the  year

1949 and has perfected title by adverse possession?

2. Whether the suit land has been recorded in Rakhit Khata due to lapses  of

the plaintiff association?

3. Whether the suit land is liable to be settled on lease  basis  in  favour

of the plaintiff?

4. Whether notice U/s 80- C.P.C. has not been served?

5. To what relief, if any, the plaintiff is entitled to?

9.    To prove its case, the plaintiff-association examined the  manager  of

the association and the defendants did not examine any  witness  in  support

of their stand.  As stated earlier, the trial Judge, by its  judgment  dated

10.04.1999, decreed the suit and permanently restrained the defendants  from

disturbing the possession of the plaintiff-association over the  suit  land.

It was contended before the High Court that the State Government  had  filed

before the High Court Misc. Case No. 497 of 2001 seeking  leave  to  produce

the final order passed  in  O.P.L.E.  Case  No.  213/1/90-91  as  additional

evidence and Misc. Case No. 121 of 2003 for appointment of a receiver.

10.   It was further urged that the suit for  declaration  of  right,  title

and interest was not maintainable in view of  the  provisions  contained  in

the O.P.L.E. Act and the suit was barred under Section 16 of the  said  Act.

It was further submitted that since  the  land  had  been  recorded  in  the

rakhit khata, the direction to lease out the suit property  and  the  decree

for permanent injunction as passed by the court below was  contrary  to  the

provisions contained in Section 9 of C.P.C. and that  from  the  conduct  of

some State officials, it appeared that the interest of  the  State  had  not

been properly safeguarded and as a result, the decree had been passed.

11.   It is apt to note here that an application under Order I Rule  10  CPC

was filed in Misc. Case No.  122  of  2003  to  implead  M/s.  Sanjit  Samal

represented through Managing Partner, registered  office  at  Mahatab  Road,

Cuttack-12 as respondent no. 3,  Sanjit  Samal,  Managing  Partner  of  M/s.

INCON ASSOCIATES, Mahatab Road,  Cuttack  –  12  as  respondent  no.  4  and

Sanjaya Behera, partner of M/s.  INCON  ASSOCIATES,  S/o.  Ashirbad  Behera,

Seikh Bazar, Chandinichowk, P.S. Lalbag, Cuttack  as  respondent  no.5.  The

application was allowed  on  17.11.2014  and  the  aforesaid  persons  stood

impleaded as co-respondents.

12.   The High Court referred to the decisions in Gram Panchayat of  Village

Naulakha v. Ujagar Singh and others[1] and State of  Rajasthan  v.  Harphool

Singh (dead) through his LRs[2] and came to hold as follows:-

“15. On perusal of the  pleadings  of  the  parties,  it  appears  that  the

Tahasildar, even though, was arrayed as a defendant,  was  never  authorized

by the  Collector  to  file  written  statement  admitting  the  claim.  The

Collector, under the Code of  Civil  Procedure,  represents  the  State.  No

written statement without the authorization  of  the  Collector  could  have

been filed admitting the claim of the plaintiff and the  trial  court  ought

not to have accepted the said written statement as  that  of  the  defendant

no.1 – Collector, who represented the State.  It  is  further  pertinent  to

mention that the case record of the OPLE Proceeding was kept away  from  the

trial court and no evidence, either oral or documentary,  was  adduced  from

the side of the defence during the trial. As indicated  here-in-before,  the

present  appeal  was  also  not  filed  with  due  promptitude  inasmuch  as

according to the Collector, Cuttack vide his affidavit filed on  20.12.2002,

the conducting Advocate did not inform him  the  result  of  the  suit  till

17.4.2000 though the decree was passed on 21.4.1999.

I have  also  perused  the  material  evidence  adduced  on  behalf  of  the

plaintiff-respondent. It appears to me that  the  Tahasildar  colluded  with

the plaintiff and a collusive decree  has  been  passed.  Therefore  without

expressing any opinion on merit of the  suit,  I  set-  aside  the  judgment

dated 16.04.1999 and decree dated 21.04.1999 passed  by  the  learned  First

Additional Civil Judge (Senior Division),Cuttack, in Title  Suit  No.312  of

1991 and remit the matter back for  adjudication  in  accordance  with  law.

This being an order of open remand of the suit as per  the  provision  under

Order 41, Rule-23A of the C.P.C., there shall  be  a  retrial  of  the  suit

before the court below. If so advised, the defendants may amend the  written

statement and  adduce  evidence  which  the  trial  court  shall  permit  in

accordance with  law.  The  plaintiff  also  shall  not  be  precluded  from

amending his plaint or adducing additional evidence. But this being  a  suit

of the year 1991, the trial court shall make endeavour  to  dispose  of  the

same within six months from the date of communication of  this  order.  Both

the parties are directed to cooperate with the trial court in this regard.”

13.   After so holding, the  High  Court  dealt  with  the  application  for

appointment of receiver.  It  referred  to  the  agreement  dated  20-7-1998

between the association and M/s Incon Associates as a tenancy agreement  for

a monthly rent  of  Rs.  17,000/-.  It  copiously  produced  the  terms  and

conditions of the agreement and, thereafter, it observed thus:-

“The Orissa Olympic Association is a  public  body.  Admittedly,  no  public

notice was given inviting applications to  invest  in  the  construction  of

KALYAN MANDAP. It may be remembered that the suit was  filed  after  receipt

of the notice in the O.P.L.  E.  proceeding  and  the  learned  Civil  Judge

(Senior Division), Cuttack by order dated 7.11.1991 passed  the  status  quo

order even though the court was aware  that  for  the  self-  same  land,  a

proceeding under the OPLE Act was continuing. It is  also  admitted  in  the

objection/counter affidavit filed before this Court that a  portion  of  the

land is situated over the alleged encroached area. The order of  status  quo

was vacated by the learned Civil Judge  (Senior  Division)  by  order  dated

27.11.1996.

      Therefore, the construction  made  appears,  prima  facie,  to  be  in

violation of the statutory prohibition and status quo order  passed  by  the

trial court.”

14.   The High Court took note of  the  fact  that  the  possession  of  the

association was prima facie permissive in  nature  and  that  the  agreement

entered into  by  the  association  with  M/s  Incon  Associates  was  under

mismanagement and, accordingly, appointed the  Collector,  Cuttack  to  take

over possession of the administration and  open  an  interest  bearing  Bank

Account and deposit in the said Account the rent collected from the  tenants

including the rent received from the Kalyan Mandap by M/s Incon  Associates.

It further directed as follows:-

“20. M/s. INCON Associates is also directed to  deposit  the  advance  money

received from the prospective occupants from today with  the  Collector  and

the balance amount shall b.. e collected by the Collector and  deposited  in

the Bank account during the pendency of the suit. The Collector, Cuttack  is

also directed  to  secure  the  property  and  the  income  thereof  in  due

promptitude and to take all necessary steps for  preventing  the  same  from

any damage or danger and report compliance to this Court through  the  trial

court.”

15.   It is necessary to note here  that  looking  to  the  affairs  of  the

association, the learned Single Judge directed:-

“… the Additional Director General of Police, Crime Branch, Cuttack to  make

an enquiry into the entire affairs of the Olympic Association, which  in  my

prima facie view, has become the parental property of some  individuals.  If

prima facie materials emerged during enquiry, a case  should  be  registered

under appropriate sections of the Indian Penal Code or any other  provisions

of law, and the same should be investigated. The report  of  the  Additional

Director General of Police, Crime Branch and/or the  Investigating  Officer,

shall be placed before this Court within three months from today.”

Again:-

“23. If the trial court arrives at conclusion that taking advantage  of  the

suit, the plaintiff-respondents have enriched  themselves,  the  State  will

also be at liberty to recover  the  ill  gotten  by  initiating  appropriate

legal proceeding. The State is also directed to make  appropriate  audit  in

respect of the  financial  affairs  of  the  Olympic  Association  and  take

suitable action as deemed proper under law.”

16.   We have  heard  Mr.  Gopal  Subramaniam  and  Mr.  Raju  Ramachandran,

learned  senior  counsel  appearing  for  the  appellant  assisted  by   Mr.

Raghavendra S.  Srivatsa,                     Mr.  Krishnayan  Sen  and  Mr.

Ashok Panigrahi learned counsel for the State and Ms.  Binu  Tamta,  learned

counsel for the Comptroller and Auditor General of India (CAG).

17.   To appreciate the controversy, the orders passed by  this  Court  from

time to time are necessary to be adverted to.   Initially,  this  Court  had

passed an order of stay of the judgment of the High Court.  Thereafter,  the

matter was taken up on 19.1.2015 and, on  that  day,  the  Court  formulated

certain questions of law which are as follows:-

“As pure questions of law arise in this special leave petition,  no  counter

affidavit need be filed. The questions that emerge for consideration are:

Whether the lessee of the present character, that  is,  the  Orissa  Olympic

Association, could have filed a suit for right, title and  interest  against

the State, that is, the superior landlord?

Whether  the  plea  of  adverse  possession  can  be  set   forth   by   the

“Association” against the State, if the suit property  is  beyond  the  area

granted under the lease deed?

Assuming the area in question is a part  of  the  lease  deed,  whether  the

lessee can put forth a plea of adverse possession?

Assuming the suit land/property is  situate  within  the  lease  hold  area,

whether the grantor, that is, the State Government,  cannot  take  steps  to

resume the land for violation of the  terms  and  conditions  of  the  lease

deed?

Whether the income that is received by use of the suit property  should  not

be taken into account and why should it not be the legal obligation  of  the

petitioner-Association to satisfy the Court  that  the  accounts  have  been

audited and the amount derived has been properly accounted for?

If the accounts have not been audited,  as  required  in  law,  whether  the

individuals that look after the affairs of the  Association  in  respect  of

the suit property, would be criminally liable or not?

Whether the persons in management of the property could  not  be  criminally

proceeded, if it is found that they have mismanaged and utilized the  income

for their individual benefit?

As we find, the High Court  has  appointed  the  Collector,  the  respondent

No.1, as the receiver. The said part of the order reads as follows:-

“The appellant No.1  –  State  of  Orissa,  represented  by  the  Collector,

Cuttack is directed to take over possession  of  the  property,  whereafter,

the Collector shall open an interest bearing Bank  Account  and  deposit  in

the said Account the rent collected from  the  tenants  including  the  rent

received from the  Kalyan  Mandap  by  M/s.  INCON  associates.  M/s.  INCON

Associates is also directed to deposit the advance money received  from  the

prospective occupants from today with the Collector and the  balance  amount

shall be collected by the  Collector  and  deposited  in  the  Bank  account

during the pendency of the suit. The Collector, Cuttack is also directed  to

secure the property and the income thereof in due promptitude  and  to  take

necessary steps for preventing the  same  from  any  damage  or  danger  and

report compliance to this Court through the trial court.”

We have asked Mr. Raju Ramachandran, learned senior  counsel  appearing  for

the  petitioner  to  satisfy  us  whether  the   said   paragraph   requires

interference  and  also  whether  proper  management   of   the   buildings,

whatsoever the character/nature may be, situate on  the  disputed  land,  is

warranted or not.”

18.   Thereafter, the Court referred to the directions issued  by  the  High

Court for appointment of receiver  and  asked  the  learned  senior  counsel

appearing for the appellant to satisfy the Court whether the said  paragraph

required interference and also whether proper management of  the  buildings,

whatsoever the character/nature may be, situate on  the  disputed  land,  is

warranted or not.  The matter was adjourned to 22.1.2015  for  consideration

of the necessary arrangement pertaining to management  and  further  hearing

of the special leave petition.  The interim order passed on  11.12.2014  was

allowed to remain in force till the next date of hearing,  i.e.,  22.1.2015.

On 22.1.2015, the Court, after referring to  the  questions  framed  on  the

earlier occasion, recorded as follows:-

“Mr. Gopal Subramaniam, learned senior counsel appearing for the petitioner-

Association has very fairly conceded that as far  as  question  No.(iii)  is

concerned, the petitioner was wrongly advised to put forth such a plea,  for

it is a well established principle of law that a lessee cannot set  forth  a

plea of adverse possession. In  view  of  the  aforesaid,  issue  no.  (iii)

stands closed.”

19.   Thereafter, the Court adverted to issue no. (v) and, in that  context,

the following order was passed:-

“On a query being made, learned senior counsel, submitted that the suit  was

instituted in the year 1991 in respect of 0.705 acres claiming right,  title

and interest and other reliefs and the income  received  from  the  property

situated on that area is regularly audited by a statutory  auditor.  In  our

considered opinion, there has to be audit for the  purpose  of  verification

so  that  we  can  eventually  be  satisfied.  Considering  the  facts   and

circumstances in entirety,  we  direct  that  the  accounts  in  respect  of

“Kalyan Mandap” and 23 shops standing  on  the  disputed  area”  (suit  area

0,705 acres) be made by the Accountant General  of  Orissa  at  Bhubaneswar.

The said exercise shall be completed within  a  period  of  six  weeks.  The

report of the Accountant General shall be  placed  before  this  Court.  The

Registrar (Judicial) shall send a copy of the  order  passed  today  to  the

Accountant General of Orissa at Bhubaneswar by fax/e-mail and  regular  post

forthwith so that he can take steps in promptitude.

As advised at present, we shall delve upon the issue whether  the  necessary

arrangement pertaining to management of the aforesaid property  is  required

to be made. Without expressing any opinion finally, as we  cannot  today  as

the special leave petition is pending, we  think  that  there  should  be  a

Committee of Management which shall take  over  possession  of  the  “Kalyan

Mandap”  and  the  23  shops  standing  on  the  area  for  the  purpose  of

management. The committee shall consist of the Collector,  Cuttack  and  two

Additional District Magistrates  to  be  nominated  by  the  Collector.  The

Committee shall be liable to be supervised by  the  Secretary,  Revenue  and

Disaster Management. We hasten to clarify, if there is  any  contract  which

has been executed by the Association through M/s. INCON Associates  for  the

purpose of holding any marriage that should be allowed to continue. But  all

correspondence and discussion  on  every  aspect  shall  be  done  with  the

Committee. The Collector may nominate one of the Committee members for  this

purpose but the final decision shall be taken by the Committee. We  have  so

directed, as we do not want that the 4 allocation of the marriage  hall  for

the purpose of marriages be cancelled.  However,  after  today,  M/s.  INCON

Associates shall not enter into any  fresh  contract.  The  Committee  shall

take over the management by 25.01.2015 positively. Mr. Subramaniam,  learned

senior counsel submitted that no one shall raise any obstruction  in  taking

over the management. The Collector is at liberty to requisition  the  police

assistance, if he has to take care of any obstruction regard  being  had  to

the situation.

All the twenty-three shop keepers shall pay the rent to  the  Committee  and

the income shall be collected by the authorised agent of the  Committee.  If

anyone would deviate in doing so, he would be liable for  contempt  of  this

Court. It will be the duty  of  the  Managing  Committee  to  see  that  the

buildings are properly maintained. We have modified the  order  of  Stay  to

the aforesaid extent.

The income derived from the date of taking over possession  and  any  income

that is derived earlier  thereto  shall  be  kept  in  an  interest  earning

account in the State Bank of India,  Main  branch,  near  the  Collectorate,

Cuttack.

The documents that have been exhibited before the trial court are  permitted

to be filed by either of the parties.

This is an interim arrangement subject to final adjudication of the  special

leave petition.”

20.   The aforesaid order clearly states that it was an interim  arrangement

and that the matter was directed to be listed on 24.3.2015.   Be  it  noted,

on that day,  keeping  in  view  the  direction  issued  by  this  Court  on

22.1.2015, the Accountant General of  State  of  Odisha  had  submitted  his

report in  a  sealed  cover.   Learned  senior  counsel  appearing  for  the

appellant put forth that he may be granted an opportunity to look  into  the

report and file an objection  duly  certified  by  the  competent  authority

including the Auditor or Chartered Accountant. A copy of the report  of  the

Accountant General, Odisha,  was  directed  to  be  served  on  the  learned

counsel for the appellant as well the learned counsel  for  the  State.   At

that juncture, a submission was canvassed by the learned senior counsel  for

the appellant and, after hearing at length, the following order was passed:-

“At this juncture, another aspect need to be stated. We are inclined to  say

so, as it is submitted by Mr.  Gopal  Subramanium,  learned  senior  counsel

appearing for the petitioner that the report  submitted  by  the  Accountant

General cannot be accepted on the face value and  that  is  why,  as  stated

earlier, he intends to file an objection to the same. But  a  pregnant  one,

there has to be finality to the audit. As advised at present,  we  may  say,

in case an occasion arises to test the report and the objection to be  filed

thereto,  this  Court  may  think  of  sending  both  the  reports  to   The

Comptroller and Auditor General of India,  who  shall  scrutinize  both  the

reports and, if required, by sending a team of auditors. We say no  more  on

that score for the present. Only a thought expressed.

At this juncture, we will be failing on our duty if we do not take  note  of

the stand quite vehemently put forth  by  Mr.  Gopal  Subramanium  that  the

constructions are within the lease hold area and they have been  constructed

to raise funds. To deal with the said aspect, we would  like  the  State  to

file the lease deed in original, as the petitioner  has  already  filed  the

certified copy of the lease deed. How the same would be addressed  to  shall

be thought of after there is delineation with regard to the accounts.

An ancillary question may arise as to whether a lessee,  especially,  Orissa

Olympic Association, which is involved in pubic  duty,  can  be  engaged  in

this kind of activities on a mercurial or spacious ground of  raising  funds

to sustain the stadium without the consent of the lessor.

Let the objection to the report of the Accountant General  be  filed  within

two weeks hence. The State Government shall file an affidavit duly sworn  by

the competent authority giving the  nature  of  shops  and  the  photographs

thereof and the photograph of the Kalyan Mandap. The said affidavit  by  the

State shall be filed within two weeks from today.”

21.   It is apt to note here that the matter was directed to  be  listed  on

21.4.2015 on which date the matter stood adjourned  to  7.5.2015.    Relying

on the objection to the report  that  had  been  submitted  by  the  learned

Accountant General for the State of Odisha along with  some  other  reports,

it was contended by the learned senior counsel for the  appellant  that  the

Accountant General (General and Social Sector Audit)  had  travelled  beyond

the order of this Court commenting on various aspects of the case.  For  the

aforesaid purpose, he had referred to the relevant para of the  order  dated

22.1.2015.  Keeping in view the objection, the Court directed as follows:-

“In view of the aforesaid, we would direct the  Accountant  General,  Odisha

to restrict his audit and comments to the said  facets.  We  know  that  the

report submitted by him covers the same  but  still  we  do  not  intend  to

segregate the same and, therefore, we direct that  a  specific  and  precise

report be submitted to this Court within eight weeks hence keeping  in  view

the passage reproduced hereinabove.”

22.   Be it clarified, the passage that was referred  to  was  part  of  the

order dated 22.1.2015.  On that date,  the  State  of  Odisha  has  produced

certified copies of two lease deeds.  Keeping that in view,  the  Court,  to

arrive at the truth, directed as follows:-

“At this juncture, we may note with profit that in pursuance  of  our  order

dated 24.03.2015, the State of Odisha has produced the certified  copies  of

two lease deeds; one  dated  04.09.1949  and  the  other  dated  19.04.1974.

Keeping in view the two lease deeds and the schedule of  property  mentioned

therein, we think it appropriate  to  constitute  a  Committee  of  judicial

officers  who  shall,  with  the  help  and  assistance   of   the   revenue

authorities, shall measure the lease hold area and submit a  report  whether

the 23 shops and the Kalyan Mandap are within the said lease  hold  area  or

not. Regard being had to the controversy involved, we appoint  the  District

Judge, Cuttack to be the Chairman of the committee and request the  3  Chief

Justice/Acting Chief Justice  to  nominate  two  other  Additional  District

Judges who may be from Cuttack District  or  other  districts.  Needless  to

say, the learned Chief  Justice/Acting  Chief  Justice  shall  nominate  the

Additional District Judges who have experience in the field.  The  Principal

Secretary,  Revenue  and  Disaster  Management  shall  extend  the   fullest

cooperation in consultation with the Chief Secretary of the State and  shall

provide all the facilities to the Committee so  that  there  can  be  proper

measurement and no deviancy is  shown.  At  the  time  of  measurement,  the

representative  (only  one)  of  the  petitioner-Association  shall   remain

present. A notice shall be given by the Chairman of the Committee about  the

date the measurement  to  the  Association.  Mr.  Ashok  Panigrahi,  learned

counsel for the State submitted that apart from the registered  lease  deeds

which have been filed before this Court,  the  original  lease  deeds  shall

also be made available to the Chairman of the Committee.”

23.   When the matter was taken up on the next occasion, the Accountant  and

Auditor General, Odisha, had submitted report pertaining to the accounts  in

respect of Kalyan Mandap and 23 shops standing on the  disputed  area  (0.75

acre).  We shall refer to the said report when  we  advert  to  it  and  the

objections filed thereto.

24.   On that day, the Court referred to the earlier  order  dated  7.5.2015

wherein a direction was issued for measurement of  the  leasehold  area  and

submission of the report whether the 23 shops and the  “Kalyan  Mandap”  are

within the said leasehold area  or  not.   A  letter  was  received  by  the

Registrar from the competent authority of the High Court of Orissa  as  well

as the District Judge, Cuttack, seeking extension of time and,  accordingly,

time was extended till end of September, 2015 to submit the report.   Within

the extended time, the Committee submitted its  report  on  29.9.2015  along

with certain maps in a sealed cover.  A direction was issued  to  hand  over

the copies of the reports to the learned counsel for the appellant,  learned

counsel for the State and also learned counsel for the  Accountant  General.

A further direction was issued to make photocopies  of  the  maps  and  hand

over the same to the learned counsel for the parties on  payment  of  costs.

Liberty was granted to file objections, if any, within four weeks.  Even  on

that day, i.e., on 8.10.2015, Mr. Gopal Subramaniam, learned senior  counsel

for the appellant, submitted that though the appellant would be  filing  its

objections to the report submitted by the Accountant General, yet  there  is

a  fundamental  fallacy  that  the  said  authority  has  not   taken   into

consideration the effect of capital acquisition  of  assets  by  the  Orissa

Olympic Association.  He further urged that the said stand  would  withstand

close scrutiny if, in the ultimate eventuate, the right, title and  interest

of the Association is established in respect of the disputed  23  shops  and

the Kalyan Mandap.  Learned counsel for the State, at  that  juncture,  read

out a passage from  the  judgment  of  the  High  Court.   Noting  the  said

submission, the Court stated thus:-

“At this juncture, Mr. Panigrahi, learned counsel for  the  State  has  read

out a passage from the impugned judgment which is quite shocking  if  it  is

factually correct. Submission of Mr. Panigrahi is  that  the  stand  of  the

Orissa Olympic Association had invested the money for  the  benefit  of  the

association is an absolute myth, for one of the partners of the  M/s.  INCON

Associates  is  the  son  of  the  General  Secretary  of  the   petitioner-

Association  before  this  Court.  Hence,   submits   Mr.   Panigrahi,   the

arrangement was so made with the  sole  purpose  of  benefiting  M/s.  INCON

Associates. This aspect requires to be seriously dwelt upon, for there is  a

conflict of interest and it may enter into the realm of fiscal impropriety.

Learned counsel for the petitioner is at liberty to  file  a  reply  to  the

said  assertion  and  Mr.  Panigrahi  is  also  given  liberty  3  to   file

appropriate documents and response to bolster his submission.”

25.   On the next date of hearing, we were apprised by the  learned  counsel

for the State that the two partners of M/s. INCON  Associates  are  the  son

and son-in-law of Mr.  Asirbad  Behera,  General  Secretary  of  the  Orissa

Olympic Association. The said  fact  was  disputed  by  the  learned  senior

counsel for the appellant.  The Court, upon perusal of the  document,  found

that as far as the son  is  concerned,  he  was  a  partner  in  M/s.  INCON

Associates.  It  noted  the  submission  of  the  learned  counsel  for  the

appellant to the effect that there is  no  malfeasance  or  misfeasance  and

that there were circumstances for which the tender was floated and the  firm

came in. Learned  senior  counsel  submitted  that  when  the  contract  was

entered into for the first time in 1998, the  son  was  not  a  partner.  In

reply, Mr. Panigrahi would submit that he was inducted as  a  partner  at  a

later stage.

26.   Taking note of these facts, the Court directed as follows:-

“Be that as it may, prima facie,  the  conflict  of  interest  is  manifest.

Regard being had to the facts and circumstances of the case, we direct  that

Mr. Asirbad Behera, General Secretary of the Orissa Olympic  Association  is

restrained from functioning as the Secretary of  the  Association  till  the

next date of hearing. Needless to say, this  is  without  prejudice  to  the

contentions to be raised in the special leave petition.”

27.   Having referred to the record of proceedings,  we  should  record  the

submissions of learned counsel for the parties.  It is urged  on  behalf  of

the appellant that by  Orissa  Act  No.  1  of  1991,  the  Government  Land

Settlement Act, 1962 (for short, “the 1962 Act”) was  amended,  and  Section

3(4) of the Act treated an expired lease as a deemed  lease.  By  virtue  of

this  provision,  the  lease  in  respect  of  the   Appellant   Association

continued.  The Appellant Association had applied to  the  State  Government

for a permanent lease in terms of Section  3(4)  of  the  Orissa  Government

Land Settlement Act, 1962, as amended by Orissa  Act  No.  1  of  1991.  The

Tahsildar recommended that the lands be permanently  settled  in  favour  of

the  Association  and  the  Collector  approved  the  same  on   16.08.1995.

However, since there were discrepancies in respect of some issues  including

that in respect of the land comprised in Hal Plot No.7, the Association  did

not execute the lease deed and sought rectification of the  errors.   It  is

submitted that during permanent lease proceedings, the Association  objected

that the demarcation of plot comprising of an area of acres 20.808  dec.  is

not correct. The appellant objected to the same contending  that  Plot  No.7

should  form  part  of  Sabik  Plot  No.  139.  Accordingly,  the  appellant

requested that the mistake should be corrected or finalization of Plot  No.7

should await till the dispute attains finality and,  thus,  the  association

did not execute the lease deed.  Be that as it may, the  said  order  having

been set aside by  the  Revenue  Divisional  Commissioner,  the  Association

challenged the order before the High Court  on  principle.  That  apart,  in

view of the recent amendment to the 1962 Act on  26.02.2009,  the  Khasmahal

properties are to be  permanently  settled  and,  accordingly,  the  pending

cases are to be disposed of in accordance with  the  amendment.   The  order

for permanent settlement has been set aside in appeal which is  the  subject

matter before the High Court, in Writ Petition (C) No. 5360 of 2002. In  the

writ petition, it has been prayed that the writ petitioner  be  held  to  be

deemed lessee and that the lease subsists. The  High  Court  has  passed  an

interim order dated 4.12.2002  directing  that  status  quo  in  respect  of

possession of the land be maintained. The writ petition  is  pending  before

the High Court.  It is submitted that even if the permanent  lease  did  not

materialize, the 1991 amendment provided for a deemed lease and in  view  of

the 2009 amendment in the  1962  Act,  the  lands  have  to  be  permanently

settled in favour of the association.

28.   It is further contended by Mr. Gopal Subramaniam that a  suit  is  not

barred under the OPLE Act but the High Court has erred without  appreciating

the law in the field, especially, the  decisions  in  Government  of  Andhra

Pradesh v. Thummala Krishna Rao and  another[3],  State  v.  Bhanu  Mali[4],

Durgadevi Agarwalla v. State of Orissa[5], and Labangalata  Panda  v.  State

of Orissa[6].  Emphasis has also been laid on the stand  put  forth  by  the

State of Orissa in its written submissions, for it was not the stand of  the

State in the written statement that the suit land was its property  and  not

that of the association.

29.   Commenting on the report of  the  Committee  headed  by  the  District

Judge, it is contended that the committee was conferred  the  responsibility

to measure the leasehold area (pertaining to the lease  deed  registered  on

24.09.1949) and to see if the 23 shops and the Kalyan Mandap are within  the

same or not.   Criticising the said  report,  it  is  urged  that  the  said

Report, on measurement, has based reliance on Hal Settlement of  1988  which

itself is the bone of contention between the appellant association  and  the

State Government and is, in fact, the very cause of action for  the  present

lis.  Therefore, the very basis of the exercise undertaken by the  Committee

is erroneous resulting in  a  wrong  report.   It  is  put  forth  that  the

Committee has travelled beyond the scope of reference inasmuch as the  scope

of reference was restricted to measure the leasehold  area  of  acres  20.08

decimals leased out vide lease deed dated 24.9.1949 and  the  renewed  lease

deed dated 19.4.1974.   The Committee, however, had not undertaken the  said

exercise keeping in view the schedule to the original lease deed of 1949  or

the schedule to the renewed lease deed of 1974.  It is also  contended  that

though the Committee had access to  the  maps  prepared  by  the  government

authorities which are contemporaneous with the time when the lease deed  was

executed in the year 1949, yet the same were not considered as  a  reference

point for the measurement.  On the contrary, the Committee travelled  beyond

the scope of the reference and  recorded  erroneous  conclusions  by  taking

into account irrelevant  considerations.   That  apart,  the  Committee  has

omitted available relevant records and  has  proceeded  on  the  basis  that

measurement had to be carried out in the  absence  of  Government  producing

the relevant records.  It is further canvassed that Exhibit 1  is  the  copy

of the application of the Appellant  Association,  along  with  a  map,  for

grant of lease  of  an  area  of  20.808  acres;  Exhibit  4  is  the  Sabik

settlement map of 1927-1928 as revised  in  1949;   Exhibit  6  is  the  map

prepared by the Khasmahal Amin on 1.4.1953 showing the lands, demarcated  by

the boundaries, that had been given by the Government to  the  Appellant  in

1949 and in 1950;  and Exhibit 7 is the Relay Map which is superimposed  map

showing the Sabik Plot numbers that got converted into Hal Plot Numbers  at

the Hal Settlement of 1988-1989.  It is urged by the learned senior  counsel

that the aforesaid documents clinch the issue of the exact  measurement  and

the extent of land leased to the Appellant Association under the lease  deed

dated 24.09.1949; that the issue of the exact extent of land leased  to  the

Appellant is the subject matter of the Civil  Suit;  that  the  construction

made thereon, namely, the Kalyan Mandap and 23 shops is what is  covered  by

the order of this Court dated  07.05.15;  that  the  task  assigned  to  the

Committee by this Court was  to  find  out,  by  measurements,  whether  the

Kalyan Mandap and the 23 shops are  within  the  leasehold  area;  that  the

aforesaid documents which are part of record and were readily  available  to

the Committee while carrying out measurements to  find  out  the  extent  of

land covered by the Lease Deed dated  24.09.1949  as  renewed  by  the  Deed

dated 19.04.1974; that the  Committee  chose  to  ignore  the  said  crucial

documents which would clinch the issue and lamented that the government  did

not produce the relevant records but nevertheless  proceeded  to  carry  out

the measurements as per its own understanding and parameters;  and  that  to

carry out the exercise of  measurement  to  determine  the  extent  of  land

covered by a grant/document, there has  to  be  a  starting  point  and  the

boundaries  to  the  subject  matter  of  the  grant/document  have  to   be

ascertained.  It is argued that  while  identifying  a  piece  of  immovable

property, the boundaries prevail over the extent/measurements and  that  has

been held in Sheyodyhan Singh v. Sanicharakuer[7] and for the said  purpose,

the documents mentioned in the exhibits assume great significance.

30.   Learned counsel appearing for the appellant would further submit  that

Exhibit  1  is  the  application  for  grant  of  lease  along  with  a  map

identifying the land of which lease was sought.   Exhibit  4  is  the  Sabik

settlement map of 1927-28 as revised in 1949. This map  shows  the  location

of Sabik Plot numbers in the relevant area. It is  important  to  note  that

this map  is  relatable  to  the  General  Revenue  Record  finalized  after

25.10.1949 which is subsequent to the execution of lease  on  24.09.1949  in

favour of the Appellant.  In this map, a sub division of Sabik Plot No.  139

as Plot No. 139/1370 is shown.  At  the  time  the  lease  was  executed  in

favour of the Appellant, Sabik Plot No.139 was a whole plot number  and  the

Lease Deed specifically records that a portion of Sabik Plot No.  139  forms

part of the entire leasehold area.  Which portion of Sabik Plot No.  139  is

within the leasehold area is actually the subject matter of the  civil  suit

and it is the specific case of the plaintiff-Appellant  that  the  leasehold

area does not include the land in the newly created Sabik Plot No.  139/1370

but includes the land in the original Sabik Plot  No.  139.  It  is  further

pleaded that while recording the Record of Rights,  the  individual  extents

of land in the original Plot No.139 and  newly  created  Plot  No.  139/1370

were wrongly recorded.  That is how the confusion was sought to  be  created

as to the identity of that portion of Sabik Plot No.  139  which  is  within

the leasehold area of the appellant. That  portion  of  the  original  Sabik

Plot No.139 which is within the leasehold  area  is  clearly  identified  in

Exhibit 6 map prepared  by  the  Khasmahal  Amin  in  1953  by  showing  the

boundaries to that plot number.  The details emerging  from  Exhibit  6  map

will  be  elucidated  in  the  ensuing  paragraphs.   Additionally,  it   is

contended that Exhibit 6 is the Government map  prepared  by  the  Khasmahal

Amin on 01.04.1953.  The Appellant Association had a lease for 20.808  Acres

in 1949 and a further extent was  granted  in  1950.   The  Association  had

requested the Government to grant another extent of land in 1953.   In  this

context, the Khasmahal officer directed a survey of the  land  already  held

by the Association and of the land proposed to be given to the  Association.

Upon survey and measurement to  scale,  a  detailed  map  was  prepared  in

parallel and one copy was  given  to  the  Association  and  the  other  was

retained by the Government. The map indicates the  individual  plot  numbers

and the boundaries on all sides.

31.   Referring to the boundaries,  it  is  urged  that  had  the  Committee

carried out the measurement as per the boundaries in the admitted  map,  the

exact extent of land, which is the subject matter of the  suit,  could  have

been ascertained.  Various other aspects have been highlighted to show  that

the report of the Committee constituted by this Court is wrong.  It is  also

highlighted that the report of the Committee is wrong, that  contemporaneous

maps have not been taken into consideration and the reliance placed  on  Hal

settlement was also incorrect.  Learned counsel would submit that there  are

manifest errors in the findings recorded by the Committee.

32.   Mr. Panigrahi, learned counsel for the State, would  submit  that  the

report of the Committee headed by the District Judge is absolutely  flawless

because the Sabik Record of Rights of Holding No. 366 was finally  published

in 1931. Copy of the said ROR available in the District Record Room  of  the

Collectorate, Cuttack, has been placed  on  record  as  Annexure-30  of  the

District  Judge  Committee  Report.  Since   the   Settlement   was   closed

prematurely and as such the record of right  did  not  reach  finality  with

final publication, the map showing creation of part plot No. 139/1370  which

is relied upon by the appellant has no validity as it is not  backed  by  an

authentic finally published record of right.  That apart, in the  subsequent

settlement operation, the record of right and map of the village – Unit  No.

10, Cantonment, were finally published during the  year  1988-89  under  the

provisions of Orissa Survey  and  Settlement  Act,  1958.   Learned  counsel

would submit that at Khanapuri stage in the settlement  operation,  ‘Yadast’

is prepared by the Amin visiting each and every plot in  a  village  and  in

this ‘Yadast’, details of information on field position are  noted  and  map

is prepared accordingly.  The portion of land on which the  ‘Kalyan  Mandap’

and 23 shops stand is in Hal Plot No. 7(p) of Holding No. 230 of mouza Unit-

10, Cantonment. In Yadast No. 60/1, which relates to  this  land,  there  is

mention of occupation of the Government and no mention of occupation of  the

Orissa Olympic Association.  It is contended by him that the so-called  Bata

Plot No. 139/1370 co-relates to Hal Plot No. 165(p). From the Yadast No.  67

it is evident that the said land was  coming  within  the  leased  out  area

acres 20.808 and was under occupation of  the  Odisha  Olympic  Association.

The sports  hostel  stands  over  the  so-called  Bata  plot  shown  in  the

Settlement  map  and  still  now,  the  sports  hostel  exists  there  which

corresponds to Hal Plot No. 165(p).  It is evident that the portion of  land

on which the ‘Kalyan Mandap’ and 23 shops stand are  outside  the  limit  of

the leased out area of acres 20.808 dcl.  Therefore, he would urge that  the

land on which the ‘Kalyan Mandap’ (Barabati Palace) and 23 shops stand  does

not come within the leased out area of acres 6.222 from out  of  Sabik  Plot

No. 139(p).  Mr. Panigrahi also contended that Section 16 of  the  OPLE  Act

specifically bars the institution of any  such  suit  or  legal  proceedings

and, therefore, the conclusion of the High Court on the  said  score  cannot

be found to be flawed.  He has also raised the  contention  with  regard  to

non-sustainability of the plea of adverse possession.

33.   It is apt to mention here that learned counsel for  the  parties  have

also highlighted many an aspect with regard to the report of the  Accountant

General, which we shall advert to at a later stage.  First,  we  shall  deal

with  two  facets,  namely,  (i)  whether  the  report  of   the   Committee

constituted by this Court as regards the leasehold area is  to  be  accepted

or not and (ii) assuming the land is a part of the leasehold  area,  whether

the same can be resumed keeping in view the present use.

34.   To appreciate the objection  filed  by  the  appellant,  we  think  it

seemly to reproduce the reports.   The Report of  the  Committee  comprising

of District  &  Sessions  Judge,  Cuttack  and  two  Additional  District  &

Sessions Judges dated 29.09.2015 is reproduced below:-

“Accordingly, the committee consisting of Sri  Satya  Narayan  Mishra,

District and Sessions Judge, Cuttack, as the Chairman of the  Committee  and

the nominated members held several rounds  of  meetings  to  carry  out  the

direction given by the Hon’ble Apex Court in the matter.

As per minutes dated 04.07.2015  and  25.07.2015,  the  revenue  authorities

were requested to produce the following documents:-

Original Lease deeds

Sabik  Settlement  Maps  of  Lease  hold  area  as  well  as  the  maps   of

corresponding to Hal plots.

Plot index.

Lease case record in Case No. 294 of 1995.

Government sanction order No. 7484 dated 29.06.1949.

Document regarding demarcation of leasehold land by Revenue  Authorities  on

measurement.

vide Annexure – 25, Annexure 25/a & Annexure 25/b.

1.2   Despite repeated requests the Revenue Authorities did not produce  the

following documents:

The original lease deeds of 1949 and 1975

Government of Orissa Revenue Department Order No. 7484 dated 29.06.1949 and

Document regarding demarcation of leasehold land by Revenue  Authorities  on

measurement.

Since the two lease deeds were not produced by the Revenue  Authorities  the

Committee issued requisition for placing of the case record in T.S. No.  312

of 1991 before the Committee for reference of the original lease deeds

2.    The Committee examined the documents, the related case  records,  such

as record in T.S. No. 312 of 1991, encroachment case etc.,  maps  and  other

connected materials placed before it.

The Committee carried out elaborate discussions  from  various  angles

to determine the modalities of measurement to carry  out  the  direction  of

the Hon’ble Apex Court.

3.    Before  proceeding  further,  the  Committee  resolved  to  place  the

following events in sequence for proper appreciation of the matter:-

26/27.01.1949-

Orissa Olympic Association (hereinafter to be  referred  as  the

OOA) made application to the Revenue Commissioner of  Orissa  for  lease  of

Ac.20.808 decimals of land from Sabik Plot No. 156, portion  of  Sabik  Plot

Nos. 139, 143, 155 and 177 vide Annex – 1.

A Sketch map was attached to the application vide Annex-1/a.

(2)    29.06.1949-

Lease was sanctioned  by  Government  of  Orissa,  Revenue  Department

Order No. 7484 dated 29.06.1949.

(3) The Revenue Authorities demarcated the lease hold area  on  measurement.

Date and order of measurement are not available.

(4)    24.09.1949-

Pursuant to sanction  order  the  Lease  Deed  bearing  No.  4525  was

executed before the Sub Registrar, Cuttack on dated 24.09.1949  vide  Annex-

2.

(5)    19.04.1974-

Lease was renewed for a period of further 20 years from 04.09.1969 to

03.03.1989 vide Lease Deed No. 2526 dated 19.04.1974 vide Annex – 3.

(6)    11.04.1988 – Hal ROR was published.

Ac.21.549 decimals of land were published  in  the  name  of  the  OOA

under Khata No. 187 vide Annex-4.

(7)    19.10.1990-

Encroachment case No.213/1 of 1990-91 was initiated  against  the  OOA

for encroachment made in Hal Plot No. 7 vide Annex-5.

(8)    02.07.1991-

T.S. No.312/1991 was instituted by  the  OOA  against  the  State  for

declaration of title claiming Hal Plot  No.  7  as  part  of  the  leasehold

property and in alternative through adverse  possession  in  respect  of  an

area measuring Ac.0.705 decimals appertaining to Hal Plot  No.  7  vide  the

plaint Annex-6 and the written statement vide Annex- 6/a.

(9)     21.06.1995-

The OOA made application on 21.06.1995 for permanent  lease  enclosing

statement of land under the  possession  of  the  OOA  inside  the  boundary

relating to 9 Hal plots vide the application Annex-7 and statement  of  land

vide Annex-7/a & Annex-7/b.

This led to the institution of lease case No. 294/1995.

(10)    21.06.1995-

On the same day i.e. on 21.06.1995 the Tahasildar asked for  the  R.I.

report vide Annex-8.

(11)   21.06.1995-

The R.I. submitted the report on the same day i.e on. 21.06.1995  vide

Annex 8/a.

(12)   22.07.1995-

The Tahasildar permanently settled the land in favour of the OOA vide

Annex-9.

(13)   16.08.1995-

The Collector approved the order of the  Tahasildar  dated  22.08.1995

vide Annex-10.

(14)  16.04.1999-

The suit in T.S. No. 312/1991 was decreed in favour of  the  OOA  vide

Judgment Annex-11 and the Decree Annex-11/a.

(15)  01.11.2001-

By order dated 01.11.2002 passed in OGLS Appeal  No.  2/2002  the  RDC

allowed the  appeal  and  set  aside  the  order  dated  22.07.1995  of  the

Tahasildar and order dated 16.08.1995 of the Collector vide Annex-12.

(16)   05.11.2002-

Pursuant to the order of the R.D.C. the Tahasildar,  Sardar  kept  the

lease hold  land  measuring  Ac.20.808  decimals  in  Government  Khata  and

directed for correction of ROR vide Annex-13.

(17) 04.12.2002-

Hon’ble High Court of Orissa  by  order  dated  04.12.2002  passed  in

M.C.No. 3999 of 2002 arising out of WP© No. 5360/2002 directed, “status  quo

as on  date  in  respect  of  possession  of  the  disputed  land  shall  be

maintained” vide Annex-14.

(18)  29.11.2014-

Hon’ble High Court of Orissa allowed  first  appeal  No.158/2001,  set

aside the judgment and decree passed in T.S.No. 312/1991  and  remanded  the

suit for fresh disposal vide Annex-15.

(19) The Special Leave to Appeal (Civil) No. 34373/2014  was  instituted  by

the OOA in the Hon’ble Apex Court wherein direction has been given  to  this

Committee to submit the report vide Annex-16.

(20) 19.08.1969-

Lease deed for Ac.2.703 decimal comprising of plot No.  145  (Ac.1.116

decimals), plot No. 148(Ac.1.147),  plot  No.  155  (Ac.0.440)  executed  in

favour of the OOA vide Annex-17.

(21)   19.07.2003-

By order dated 19.07.2003 passed in Resumption Proceeding Case No.  19

of 2002, determined the lease and resumed the land to Government Khata  vide

Annex-18.

(22)  20.04.2015:

Pursuant to above order, Tahasildar took the land into the  Government

Khata vide Annex-19.

(23)  ROR is accordingly corrected vide Annex-20.

(24)   22.05.2004:

By order dated 22.05.2004, passed  by  Tahasildar  in  R.P.  188/2003,

took Ac.1.222 decimal of land out of plot No.165 area Ac.5.000 decimal  into

Government Khata vide Annex-21.

(25)  19.08.2004

The ROR is corrected accordingly vide Annex-22.

4.    Thus the real dispute between the parties  is  relating  to  Ac.24.733

decimal. Out of that lease hold  area of Ac. 2.703 of 1969 has already  been

taken in to Government Khata and similarly Ac.  1.222  decimal  out  of  Hal

Plot No. 165 has already been taken  in  to  Government  Khata  as  narrated

earlier. The lease of Ac. 20.808 decimal has been  cancelled  and  the  said

area has already been taken into Government Khata but the  matter  has  been

stayed by Hon’ble High Court of Orissa in M.C. No. 3999 of 2002 arising  out

of W.P(C) No. 5360/2002.

Thus the present controversy is  confined  to  measure  the  leasehold

area of Ac. 20.808 decimal and to determine the location  of  Kalyan  Mandap

(Barabati Palace) and 23 shops.

5.    Keeping the above facts in the  background  the  Committee  determined

its course of action.

A Team consisting of Amins having necessary  training  and  sufficient

experience was constituted to carry out the measurement in presence and  the

supervision of the Committee.

6.    The names of the Amins with the names of their respective  departments

are as follows:-

1. Pradipta Kumar Biswal, A.S.O.  Department of Survey

2. Bateswar Hota, Inspector               & Settlement, Cuttack

3. Chturbhuja Dhal, Inspector

4. Dhurba Charan Bhoi, Amin

5. Laxmidhara Mishra, Salarid Amin       Civil Courts, Cuttack

6. Trilochan Sahu, Salarid Amin

7. Baikuntha Ch. Baral, Salarid Amin(Retd) Civil Courts

Kendrapara

8. Padmanabha Acharya, R.I.                  Office of the

Tahasildar,

9.Dhanjaya Behera, Amin                          Cuttack Sadar.

Vide the Minutes of the Committee dated 21.08.2015.

6.1   The Committee also resolved to carry out the measurement with ETS  and

DGPS by the trained  technicians  under  supervision  of  the  authority  of

Orissa  Space  Application  Center(ORSAC),   Bhubaneswar   and   accordingly

requisitions were issued by the Tahasildar, Cuttack vide Annex-26 and Annex-

26/a.

7.    The Committee resolved to commence the measurement from 9 .30 a.m.  of

02.09.2015. The  day,  date  and  schedule  of  the  measurement  were  duly

notified to all concerned in advance vide Annex-27.

8.    The Committee examined the Sabik Map exhibited  by  the  OOA  in  T.S.

312/1991 under Ext.4 and the Sabik Map of  1927-28  settlement  provided  by

Revenue Authority.

On close scrutiny, the Committee noticed variation in  two  maps  i.e.

fraction plot bearing No. 139/1370 as reflected in Ext.4 found to be  absent

in the map provided by the Revenue Authority.

The point for consideration is whether to consider fraction  Plot  No.

139/1370 while conducting the measurement to find the leasehold area.

8.1   Undisputedly Lease was executed on 24.09.1949 for  Ac.20.808  decimals

of land which was renewed by another Registered Lease Deed in 1974.

As per pleading of the OOA at para-5  of  the  plaint,  the  leasehold

area of Ac.20.808 decimals includes an area of  Ac.6.520  decimal  of  Sabik

Plot No. 139. As revealed from the application of the  OOA,  in  Lease  Case

No. 294 of 1995 an area of Ac.6.222 decimal out of Sabik Plot  No.  139  was

leased out along with other areas in total measuring Ac.20.808 decimals.

Though, the said lease of 1995 was subsequently cancelled by  the  RDC

in the year 2002,  the  OOA  has  never  disputed/questioned  allocation  of

Ac.6.222 decimals out of Sabik Plot No. 139. So it is  clear  that  the  OOA

had been granted lease of an area of Ac.6.222 decimals  out  of  Sabik  Plot

No. 139.

The Settlement Officer, Measure Settlement  Office,  Cuttack  reported

that fraction Plot No. 1370 or 139/1370 was not in existence  after  1927-28

settlement vide his letter No.3408, dated 26.09.2015, Annex-28.

The fraction plot 139/1370  was  created  after  25.10.1949  vide  the

letter No. 3616, dated 26.09.2015 of the Collector, Cuttack, Annex-28/a  and

as per Khasmal ROR published after 25.10.1949. So it is  apparent  that  the

lease was executed out of original  Sabik  Plot  No.139  measuring  Ac.9.290

decimal. Extent of original Sabik Plot No. 139 was Ac.9.290 decimal  as  per

1932 Sabik ROR vide Annex-30.

Further after division of original Sabik Plot No.  139  into  139  and

139/1370 the residual  of  original  Sabik  Plot  No.  139  became  Ac.7.345

decimal. Adding of this residual Ac.7.345 decimal with Ac.1.945  decimal  of

fraction plot No. 139/1370, the total area became Ac.9.290 decimal which  is

thus to be measured entirely by the Measurement Team. Since lease  has  been

granted to the extent of Ac.6.222 decimal out of the Sabik Plot No.139,  the

leasehold area does not cover the entire residual  area  of  Plot  No.  139.

Hence,  consideration  of  fraction  plot  NO.   139/1370   is   of   little

consequence.   Accordingly  the  Committee  resolved  to   carry   out   the

measurement ignoring the fraction plot No. 139/1370.

9.    As per the programme the Committee  proceeded  to  the  spot  on  date

fixed.   The  representative  of  the  Revenue  Authority  i.e.  Tahasildar,

Cuttack Sadar and representative  of  the  OOA,  Sri  Bhakta  Hari  Mohanty,

Senior Advocate were present. Spot notice was served on them vide Annex-31.

10.    Before  the  commencement  of  the  measurement  the  Committee  held

discussion with the members of the Measurement Team including DGPS  and  ETS

Team.

Sabik and Hal Maps, Sabik and Hal RORs, Copies  of  the  pleadings  of

the TS 312 of 1991 and the direction of the Hon’ble Apex Court  were  handed

over to the two teams of the measurement.

11.   The specific direction of the  Hon’ble  Apex  Court  passed  by  order

dated 07.05.2015 in SLA © No. 34373/2014 as follows:

“Keeping in view the two lease deeds and the schedule of property  mentioned

therein, we think it appropriate to constitute a Committee of  the  Judicial

Offices who shall, with the help and assistance of the Revenue  Authorities,

shall measure the lease hold area and submit a report whether the  23  shops

and Kalyan Mandap are within the said lease hold area or  not”  vide  Annex-

32.

12.   The Lease Deeds of 1949 and 1974 bear identical sabik leasehold  plots

and total lease area as follows:-

“Cuttack Cantonment Khasmahal Tauzi No. 5458  Mouza  Cantonment  Samil

Bungalow block, Thana and Sub-Registrar Sadar, Cuttack(Thana  No.197),  plot

No. 156,

and

portions of plot No.139,143,155 and 177 area Ac.20.808 decimals” vide Annex-

2&3.

12.1  The relevant portion of the averments of the plaint of the OOA  in  TS

312 of 1991 regarding leasehold area reads as follows:-

“Para-3: The sketch map attached  to  the  application  dated  26/27th

January, 1949 and the sanction order 29th June 1949  will  clearly  indicate

that the lease hold area was to the adjoining south of  Cantonment-Tulasipur

Road. After obtaining the lease of the  land  the  Association  raised  high

compound walls encroaching the lease hold area” vide Anenx-33.

12.2     It is not out of place  to  mention  that  on  21.06.1995  the  OOA

applied to the Tahasildar Cuttack for permanent  lease  with  statements  of

land under its possession and the Tahasildar  granted  lease  for  Ac.20.808

decimals vide Annex-9.

The above lease deed of 195 clearly shows  the  details  of  the  land

leased out as follows:-

Mouza- Cantonment,

PS – Cuttack 197

Khata      Plot No

349              139(Part) Ac.6.222

155(Part) Ac.3.856

177 (Part) Ac.0.220

81               156        Ac 7.272

30               143(Part)  Ac 3.238

Total      Ac 20.808 decimals.

Further as per the lease deed the above Sabik Plots are  corresponding

to following Hal Plots-

Mouza       Khata No         Plot No.        Area

Cuttack          187              193        Ac1.355

Town,                             192        Ac.0.825

Unit No.10                   190        Ac.1.452

Cantonment  187              191        Ac.4.359

203            Ac.0.823

200        Ac.0.456

201        Ac.0.315

202        Ac.1.130

204        Ac.4.335

189        Ac.1.258

167(Part)  Ac.1.050

166(Part)  Ac.0.082

168(Part)  Ac.0.105

165(Part)  Ac.3.263

Total           Ac.20.808dec

vide Annex-9.

12.3  Though the above  lease  has  been  cancelled  by  the  RDC  and  such

cancellation has been stayed by the Hon’ble High Court of Orissa in WP©  No.

5360/2002 filed by the OOA, the location of lease  hold  area  of  Ac.20.808

decimals with specific portions of the Sabik  Plots  and  corresponding  Hal

Plots has not been disputed by the OOA.

12.4  Accordingly the committee resolved to carry out  the  entire  land  in

possession of the OOA within the boundary and to determine  the  lease  hold

area with specific area of the Sabik  Plots  mentioned  in  the  lease  deed

Annex-9.

The Measurement  Team  accordingly  carried  out  the  measurement  in

respect of the possession of the OOA in the field.

13.   The members of the Committee were present throughout  the  measurement

that took place from 02.10.2015 to 15.10.2015 and 26.10.2015 with breaks  on

holidays.

Sri.  B.H.  Mohanty,  Senior  Advocate  on  behalf  of  the  OOA  and

Tahasildar, Cuttack on behalf of the Revenue  Authorities  were  present  on

the dates of measurement.

14.   The Measurement Team pointed out the fixed points in the field as  per

the Hal settlement map and cross-checked the same with reference   to  Sabik

settlement map.  The correctness  of  fixed  points  were  also  checked  by

forming triangles.  The measurement of the land inside the boundary wall  of

the OOA was undertaken by Chain Triangulation  Method.  The  triangles  were

formed to determine  the  area.  The  measurements  of  the  diagonals  were

checked and verified with the  help  of  DGPS  of  ORSAC  where  obstruction

because of construction was found.  The calculations  done  for  determining

the area of triangles were cross-checked.

15.   After the measurement in the field, the Measurement Team prepared  the

report including the relay etc. in presence and  under  supervision  of  the

Committee and submitted the reports  vide Annex-34 series.  The abstract  of

the report of the Measurement Team has been filed vide Annex-34/a.

The ORSAC submitted their reports vide Annex-35 series (3  in  numbers

– 35,35/a & 35/b)

16.   The Committee carefully examined all the materials  placed  before  it

including reports submitted by Measurement Team and ORSAC.

17.   As per  the  Measurement  by  the  Measurement  Team  the  OOA  is  in

possession of Ac.26.502 decimal vide Annex-34.

As per the DGPS and ETS  measurement  the  OOA  is  in  possession  of

Ac.27.044 decimals vide Annex-35.

In the Hal Settlement  ROR  of  1988  the  OOA  was  found  to  be  in

possession of Ac.21.549 decimals vide Annex-4.

18.   On examination of Hal Map with Sabik  Map,  report  submitted  by  the

Measurement Team it is found that the leasehold land of  Ac.20.808  decimals

appertaining to Sabik Plots 156,139,143,155 and  177  are  corresponding  to

Hal Plots193,192,190,191,203,200,201,202,204,189,167(P),166(P),  168(P)  and

165(P) shown within yellow colour in the map.

18.1  The excess land in possession of the OOA which has been  shown  within

green colour in the map is not within the leasehold land of the OOA.

18.2   On  scrutiny  it  is  found  that  the  23  shops  and   the   Kalyan

Mandap(Barabati Palace) are in Hal Plot Nos.7(Part) and 165(Part),  situated

over an area measuring Ac.1.138 decimal and they are corresponding to  Sabik

Plot No.139.

A  portion  of  Kalyan  Mandap(Barabati  Palace)  measuring  Ac.0.433

decimals situated over Hal Plot No.165(Part) is within  the  leasehold  area

as shown within yellow colour in map. The remaining portion  of  the  Kalyan

Mandap  (Barabati Palace) and the 23 shops measuring Ac.0.705  decimals  are

in Hal Plot NO. 7(Part), shown within green color in the map,  are  situated

outside the leasehold area.

18.3  As per the Hal ROR the area of Hal Plot No.7  under  Khata  No.203  is

Ac.0.880 decimal vide Annex-36 and out of that Ac.0.175 decimals  is  within

the compound of Army Recruitment Office and remaining land of Hal  Plot  No.

7 measuring an area of Ac.0.705 decimal is  within  possession  of  the  OOA

where the 23 shops and a portion of  Kalyan  Mandap  (Barabati  Palace)  are

situated shown within green colour in the map.

19.    Finally  the  Committed  unanimously  comes  to  the  conclusion  and

accordingly  reports  that  the  leasehold  area   of   Ac.20.808   decimals

appertaining to Sabik Plot No. 156 and portion of 139,143,155  and  177  are

corresponding to Hal Plot Nos.  193,192,190,191,203,  200,  201,  202,  204,

189, 167( Part),166  (Part),168(Part)  and  165(Part)  shown  within  yellow

color in the map and 23 shops and part of Kalyan  Mandap  (Barabati  Palace)

measuring Ac.0.705 decimals situated over Hal Plot No.7(Part)  shown  within

green colour in the map are not within (i.e. beyond) the leasehold area.

20.   During measurement the representatives of  the  OOA  and  the  Revenue

Authority requested for the copies of the field book, report etc. for  their

reference. In absence of any specific instruction to that  effect  from  the

Hon’ble Apex Court and to avoid premature disclosure prior to submission  of

the report before the Hon’ble Apex Court the Committee  humbly  declined  to

accede to the request of the parties to provide  any  copy  of  the  report,

filed book etc. to them.

21.   The Committee is submitting this report along with  the  annexures  as

directed for kind perusal of the Hon’ble apex  court  in  Special  Leave  to

Appeal © No. 34373/2014 and necessary orders.”

35.   The Committee has perused certain documents which have  been  appended

as Annexure under the heading ‘Table of Annexure to the Report’.   We  think

it appropriate to reproduce the said table of annexure which is as under:-

|Annexure No.     |Subject                                        |

|Annexure -1      |Application dated 26/27.01.1949 for lease of   |

|                 |the OOA                                        |

|Annexure -1/a    |Sketch Map attached to the lease application of|

|                 |the OOA                                        |

|Annexure -2      |Lease deed dated 24.09.1949                    |

|Annexure -3      |Lease deed dated 19.04.1974                    |

|Annexure -4      |Hal ROR of 1987-88                             |

|Annexure -5      |Encroachment case No. 213/1 of 1990-91         |

|Annexure -6      |Copy of the plaint in T.S. 312/1991            |

|Annexure -6/a    |Written Statement in T.S. 312/1991             |

|Annexure -7      |Application dated 21.06.1995 of the OOA for    |

|                 |permanent lease                                |

|Annexure -7/a    |Statement of the land of the OOA               |

|Annexure -7/b    |Statement of the land of the OOA               |

|Annexure -8      |Order of the R.I. dated 21.06.1995 in lease    |

|                 |case no. 294/1995                              |

|Annexure -8/a    |Report of the R.I. dated 21.06.1995            |

|Annexure -9      |Order dated 22.07.1995 regarding permanent     |

|                 |lease by the Tahasildar in favour of the OOA   |

|Annexure -10     |Approval of the Collector dated 16.08.1995     |

|Annexure -11     |Judgment of T.S. 312 of 1991                   |

|Annexure -11/a   |Decree in T.S. 312 of 1991                     |

|Annexure -12     |Lease cancellation order dated 01.11.2002 of   |

|                 |the R.D.C                                      |

|Annexure -13     |ROR Correction dated 05.11.2002                |

|Annexure -14     |Status quo order passed by the Hon’ble High    |

|                 |Court of Orissa in M.C. No. 3999/2002 arising  |

|                 |out of W.P © 5360/2002                         |

|Annexure -15     |Judgment of Hon’ble High Court of Orissa dated |

|                 |19.11.14 in Appeal No. 158/2001                |

|Annexure -16     |SLA(Civil) No. 34373/2014                      |

|Annexure -17     |Lease deed dated 19.08.1969                    |

|Annexure -18     |Resumption order dated 19.07.2003 in Resumption|

|                 |Case No. 19/2002                               |

|Annexure -19     |Land taken into Government Khata on 20.04.2015 |

|Annexure -20     |Corrected R.O.R                                |

|Annexure -21     |Order dated 22.05.2004 of R.P. 188/2003 for    |

|                 |taking land into Govt. Khata                   |

|Annexure -22     |ROR corrected dated 19.08.2004                 |

|Annexure -23 & 24|Committee Members Nomination letters of the    |

|                 |Hon’ble High Court, Orissa                     |

|Annexure -25,25/a|Letters to Revenue Authority for production of |

|& 25/b           |documents                                      |

|Annexure -26 &   |Requisitions to ORSAC for DGPS and ETS         |

|26/a             |measurement.                                   |

|Annexure -27     |Notice regarding day,date and schedule of the  |

|                 |measurement                                    |

|Annexure -28     |Letter of the S.O. dated 26.09.15              |

|Annexure -28/a   |Letter of the Collector dated 26.09.2015       |

|Annexure -29     |Khasmal ROR published after 25.10.1949         |

|Annexure -30     |Sabik ROR of 1932                              |

|Annexure -31     |Spot notice at Measurement site                |

|Annexure -32     |Direction of the Apex Court in order dated     |

|                 |07.05.2015 in SLA © 34373/14                   |

|Annexure -33     |Pleading at para-3 of the plaint in T.S. 312/91|

|Annexure -34     |Report of the Measurement Team                 |

|Annexure -34/a   |Abstract of the report of the Measurement Team |

|Annexure -35,    |Reports of the ORSAC team                      |

|35/a & 35/b      |                                               |

|Annexure -36     |Hal ROR of Hal Plot No. 7”                     |

36.   The appellant filed its objections to the Report of the  Committee  of

the Judicial Officers who along with  other  authorities  were  directed  to

carry out the measurement of the leasehold  area  and  submit  a  report  on

whether the Kalyan Mandap and 23 shops are constructed within the  leasehold

area or not.  The main grounds of objections are:-

(i)   Though the committee did conduct the measurement,  yet  the  same  was

neither with reference to the schedule in the original lease  deed  of  1949

nor the schedule in the renewed lease deed of 1974, and,  as  such,  was  an

exercise in contradiction to and not in compliance of the direction of  this

Court. The Committee omitted available relevant  records  and  proceeded  on

the basis that measurement had to be carried  out  in  the  absence  of  the

Government producing the relevant records.

(ii)  The report is criticised on the score that it refers to the record  of

the civil suit that was made available to it.  The  appellant-plaintiff  had

exhibited all the relevant documents in the suit and  they  formed  part  of

the record. The task assigned to the Committee by this  Court  was  to  find

out, by measurements, whether the Kalyan Mandap and the 23 shops are  within

the leasehold area. Therefore, the aforesaid documents  which  are  part  of

the  record  and  which  were  readily  available  to  the  Committee   were

indispensable to  arrive  at  the  correct  conclusion  while  carrying  out

measurements to find out the extent of land covered by the Lease Deed  dated

24.9.1949 as renewed by the Deed Dated 19.4.1974, but  the  Committee  chose

to ignore the said crucial documents which would have  clinched  the  issue.

It is further asserted that the government  did  not  produce  the  relevant

records  but  the  Committee  nevertheless  proceeded  to  carry   out   the

measurements as per its own understanding and parameters.

(iii) The further objection of the appellant is that Exhibit 4 is the  Sabik

Settlement map of 1927-28 as revised in 1949 and  the  said  map  shows  the

location of Sabik Plot numbers in the relevant area. It  is  contended  that

the said map is relatable to the  General  Revenue  Record  finalised  after

25.10.1949 in favour of the association and a  sub-division  of  Sabik  Plot

No. 139 as Plot No. 139/1370 is shown. At the time the  lease  was  executed

in favour of the appellant, Sabik Plot No. 139 was a whole plot  number  and

the Lease Deed specifically records that a portion of  Sabik  Plot  No.  139

forms part of the entire leasehold area. On the said foundation, it  is  put

forth that which portion of Sabik Plot No. 139 is within the leasehold  area

is actually the subject matter of the civil suit  and  it  is  the  specific

case of the appellant-petitioner that the leasehold area  does  not  include

land in the newly created Sabik Plot No. 139/1370 but includes land  in  the

original Sabik Plot No. 139. It is further asserted that in  the  Record  of

Rights the location of land in the original Plot No. 139 and  newly  created

Plot No. 139/1370 were wrongly recorded.  That  is  how  the  confusion  was

caused as to the identity of that portion of Sabik Plot  No.  139  which  is

within the leasehold area of the appellant.   Reference  has  been  made  to

certain assertions in the plaint. It is also set forth  that  the  Committee

failed to appreciate the fact that during 1949, i.e., after leasing  out  an

area of acres 20.808 decimals to the  Association,  a  settlement  operation

exclusively for Khasmahal area was undertaken which  is  commonly  known  as

“Pati Settlement”. The settlement prepared the Record  of  Rights  and  sub-

divided Plot No. 139 into two parts, i.e., Plot No. 139 and the  other  Plot

No. 139/1370. Plot No. 139 comprises of an area  of  acres  1.945  decimals.

Though the field position reveals that Plot No. 139 comprises of an area  of

acres 2.712 decimals, yet the said settlement could not attain finality  and

was closed prematurely.  However, the revenue map was  published  with  sub-

division of plots which has been referred to in the  suit  and  the  written

statement. Though the State Government is aware  of  these  developments  of

“Pati Settlement”, yet it did not produce the  relevant  information  before

the Committee and, thus, left the Committee in ambiguity in this regard.  It

is contended that had the Committee carried out the measurement as  per  the

boundaries of  the  admitted  and  undeniable  map  Ex.  6  (Government  map

prepared by Khasmahal Amin on 1.4.1953), the exact extent of land, which  is

the  subject  matter   of   the   suit,   could   have   been   ascertained.

Contemporaneous  crucial  records  which  were  part  of  the   same   lease

transaction were omitted by the Committee. In pursuance of  the  application

for the grant of lease by the appellant association, the  Government  issued

a sanction order dated 29.6.1949 in  which  it  was  specifically  mentioned

that an area of 20.808 acres south of the cantonment road towards  Tulsipur,

comprising of Plot No. 156 and portions of Plot Nos. 139, 143, 155 and  177,

was to be leased to the association. Therefore,  the  northern  boundary  to

the land leased out to the appellant can  be  inferred  from  this  sanction

order. The lease deed dated 24.9.1949 is in  continuation  of  the  sanction

order and it describes the land in the schedule. However,  the  boundary  to

the land or the extent of land in each plot number is not mentioned  in  the

lease deed. Therefore, the boundaries and the location of the land  have  to

be gathered from the contemporaneous records, namely, the  application  with

the sketch annexed and the sanction order.

(iv)  Bearing in mind that the schedule to the two lease deeds only  mention

the total extent of the leasehold area and the Plot Nos.  and  there  is  no

description of the boundary, it was this document, i.e., the  Government  of

Orissa Revenue Department Order No. 7484  dated  29.6.1949  which  described

the northern boundary of the leasehold area in as much as the said  sanction

order states that the area of acres 20.808 decimals is to the south  of  the

Cantonment Road towards Tulsipur comprising Plot No.  156  and  portions  of

Plot Nos. 139, 143, 155 and 177. Had this document been looked into  by  the

Committee, it would have known the reference point  or  the  starting  point

for measurement, i.e., acres 20.808 decimals southwards of  Cantonment  Road

towards Tulsipur. It would have also been clear  that  the  land  which  was

leased out was contiguous with the Cantonment Road towards Tulsipur.

(v)   The Committee referred to the lease file in  Lease  Case  No.  294  of

1995 wherein the appellant association applied for permanent lease.  As  per

the report in para 8.1, it  is  stated  that  the  association  applied  for

permanent lease for acres 6.222 dec. of land out  of  Sabik  Plot  No.  139,

which is an error apparent on the face of the record. The association  never

applied for lease on the basis of Sabik Plot Nos. but it did so  in  respect

of plots under Hal Khata including Plot No. 7, because  by  that  time,  the

Sabik plot numbers were not in  vogue  due  to  Hal  Settlement  of  1988-89

wherein new Hal Plot Nos. were assigned.

37.   The Committee has noted  that  though  the  revenue  authorities  were

requested to produce the original lease  deeds,  sabik  settlement  maps  of

leasehold area as well as the maps corresponding to Hal plots,  plot  index,

lease case record in Case no. 294 of 1995,  government  sanction  order  no.

7484 dated 29.6.1949 and document regarding demarcation of  leasehold  area,

yet three documents, namely, the original lease  deeds  of  1949  and  1974,

Government of Orissa, Revenue Department order dated 29.6.1949 and  document

regarding demarcation of leasehold land by local authorities on  measurement

were not produced.  The Committee, then,  issued  requisition  of  the  case

record of title suit and examined the document.  Thereafter,  the  Committee

chronologically narrated the events, referred to various aspects and, as  is

discernible, centred the controversy involved in the case  by  stating  that

the dispute is confined to  measure  the  leasehold  area  of  acres  20.808

decimals and to determine the location of Kalyan  Mandap  (Barabati  Palace)

and 23 shops.  Regard being had to  the  same,  it  decided  its  course  of

action by having a team of Amins who have necessary training and  sufficient

experience.  The Committee also resolved to carry out the  measurement  with

ETS and DGPS by  the  trained  technicians  under  the  supervision  of  the

authority of Orissa Space  Application  Center  (ORSAC),  Bhubaneswar.   The

Committee further found on scrutiny that there is  variation  in  two  maps,

for fraction plot bearing No. 139/1370 which is reflected in  Ext.4  to  the

suit that is absent in the  map  provided  by  the  Revenue  Authority  and,

accordingly, felt it necessary to determine  whether  to  consider  fraction

Plot No. 139/1370 while conducting the measurement  to  find  the  leasehold

area.  The Committee referred to the application in Lease Case  No.  294  of

1995  to find out whether an area of acres 6.222 decimal out of  Sabik  Plot

No. 139 was leased out along with  other  areas  in  total  measuring  acres

20.808 decimals.   It  also  noted  that  though  the  lease  was  cancelled

subsequently by the Revenue Divisional Commissioner in the  year  2002,  yet

the Association had  never  disputed  the  same.   The  Settlement  Officer,

Measure Settlement Office, Cuttack reported that fraction Plot No.  1370  or

139/1370 was not in existence after the 1927-28 settlement vide  his  letter

No.3408,  dated  26.09.2015.   Thereafter,  the  Committee  noted,   certain

aspects, which we think apt to reproduce despite having quoted earlier:-

“Further after division  of  original  Sabik  Plot  No.  139  into  139  and

139/1370 the residual  of  original  Sabik  Plot  No.  139  became  Ac.7.345

decimal. Adding of this residual Ac.7.345 decimal with Ac.1.945  decimal  of

fraction plot No. 139/1370, the total area became Ac.9.290 decimal which  is

thus to be measured entirely by the Measurement Team. Since lease  has  been

granted to the extent of Ac.6.222 decimal out of the Sabik Plot No.139,  the

leasehold area does not cover the entire residual  area  of  Plot  No.  139.

Hence,  consideration  of  fraction  plot  No.   139/1370   is   of   little

consequence.   Accordingly  the  Committee  resolved  to   carry   out   the

measurement ignoring the fraction plot No. 139/1370”.

38.   The measurement took place in association and collaboration with  both

the teams.  The Committee referred to the  lease  deeds  of  1949  and  1974

which bore identical sabik leasehold plots and total  lease  area  as  acres

20.80 decimals.  Referring to the application dated 21.06.1995 filed by  the

association for grant of permanent  lease,  it  is  noticed  that  Tahsildar

granted lease of acres 20.808 decimals.  The lease deed  shows  the  details

of the land, which is as follows:-

“Mouza- Cantonment,

PS – Cuttack 197

Khata      Plot No

349              139(Part) Ac.6.222

155(Part) Ac.3.856

177 (Part) Ac.0.220

81               156        Ac 7.272

30               143(Part)  Ac 3.238

Total      Ac 20.808 decimals.”

39.   As per the  lease  deed,  the  said  sabik  plots  correspond  to  the

following Hal plots:-

“Mouza           Khata No         Plot No.         Area

Cuttack          187              193        Ac1.355

Town,                             192        Ac.0.825

Unit No.10                   190        Ac.1.452

Cantonment  187              191        Ac.4.359

203            Ac.0.823

200        Ac.0.456

201        Ac.0.315

202        Ac.1.130

204        Ac.4.335

189        Ac.1.258

167(Part)  Ac.1.050

166(Part)  Ac.0.082

168(Part)  Ac.0.105

165(Part)  Ac.3.263

Total      Ac.20.808 dec.”

40.   The Committee noted that the said lease has been cancelled but it  did

not reflect on the same as the matter is subjudice before the High Court  in

a writ petition and we think it rightly did so.   In  this  appeal,  we  are

also not concerned with the said cancellation.  We are  only  concerned,  as

we have noted, with regard to the existence  of  acres  20.808  decimals  of

leasehold area and anything constructed  beyond  the  said  leasehold  area.

After the measurement, it is interesting to note that  the  Committee  found

there are variations in the measurement.  We are compelled to reproduce  the

same at the cost of repetition:-

“17.  As per  the  Measurement  by  the  Measurement  Team  the  OOA  is  in

possession of Ac.26.502 decimal vide Annex-34.

As per the DGPS and ETS  measurement  the  OOA  is  in  possession  of

Ac.27.044 decimals vide Annex-35.

In the Hal Settlement  ROR  of  1988  the  OOA  was  found  to  be  in

possession of Ac.21.549 decimals vide Annex-4.

18.   On examination of Hal Map with Sabik  Map,  report  submitted  by  the

Measurement Team it is found that the leasehold land of  Ac.20.808  decimals

appertaining to Sabik Plots 156,139,143,155 and  177  are  corresponding  to

Hal plots no. 192, 190, 191, 203, 200, 201, 202, 204, 189,  167(P),  166(P),

168(P) and 165(P) shown within yellow colour in the map.

18.1  The excess land in possession of the OOA which has been  shown  within

green colour in the map is not within the leasehold land of the OOA”.

41.   Thereafter, it opined:-

“18.2  On  scrutiny  it  is  found  that  the  23  shops  and   the   Kalyan

Mandap(Barabati Palace) are in Hal Plot Nos.7(Part) and 165(Part),  situated

over an area measuring Ac.1.138 decimal and they are corresponding to  Sabik

Plot No.139.

A portion  of  Kalyan  Mandap  (Barabati  Palace)  measuring  Ac.0.433

decimals situated over Hal Plot No.165(Part) is within  the  leasehold  area

as shown within yellow colour in map. The remaining portion  of  the  Kalyan

Mandap  (Barabati Palace) and the 23 shops measuring Ac.0.705  decimals  are

in Hal Plot NO. 7(Part), shown within green color in the map,  are  situated

outside the leasehold area.

18.3  As per the Hal ROR the area of Hal Plot No.7  under  Khata  No.203  is

Ac.0.880 decimal vide Annex-36 and out of that Ac.0.175 decimals  is  within

the compound of Army Recruitment Office and remaining land of Hal  Plot  No.

7 measuring an area of Ac.0.705 decimal is  within  possession  of  the  OOA

where the 23 shops and a portion of  Kalyan  Mandap  (Barabati  Palace)  are

situated shown within green colour in the map.

19.    Finally  the  Committed  unanimously  comes  to  the  conclusion  and

accordingly  reports  that  the  leasehold  area   of   Ac.20.808   decimals

appertaining to Sabik Plot No. 156 and portion of 139,143,155  and  177  are

corresponding to Hal Plot Nos. 193, 192, 190,  191,  203,   200,  201,  202,

204,189, 167( Part),166 (Part),168(Part) and 165(Part) shown  within  yellow

color in the map and 23 shops and part of Kalyan  Mandap  (Barabati  Palace)

measuring Ac.0.705 decimals situated over Hal Plot No.7(Part)  shown  within

green colour in the map are not within (i.e. beyond) the leasehold area”.

42.   The objections that have been filed are essentially based on the  plea

that the Committee had omitted available relevant records and proceeded  for

measurement  in  the  absence  of  the  Government  producing  the  relevant

records.  A perusal of the report of the Committee  clearly  shows  that  it

has complied with the order of this Court in its letter and  spirit  and  we

find no reason to have a different view than what  has  been  taken  by  the

Committee.

43.   Thus, two aspects are clear.  One,  the  association  encroached  upon

the property of the State Government and built 23 shops and, as  the  report

of  the  Committee  would  reflect,  Kalyan  Mandap  stands  partly  on  the

government land and second,  the property  that  stands  on  the  government

land has to go back to the government.  There  are  two  options  with  this

Court, that is, to issue a direction for  demolition  of  Kalyan  Mandap  or

direct the government for resumption of that part of the land  belonging  to

the association where the Kalyan Mandap has been constructed.  It is  beyond

any dispute that Kalyan Mandap is functional  for  more  than  two  decades.

There is no justification to direct demolition of the  same.   It  would  be

appropriate if we direct the land on which Kalyan Mandap is  constructed  to

be resumed by the government and the Kalyan Mandap should vest in the  State

Government and shall be managed as it is presently managed by  the  District

Collector, Cuttack.

44.   That settles the aforesaid land dispute but the other issue  that  has

come before this Court, as the learned Single Judge has reflected,  deserves

to be addressed.  In this regard, it is necessary to state that  this  Court

had called for a report from the Accountant General of Odisha who  submitted

its report on 10.03.2015. An objection was filed to the said report  on  the

ground that the authority had travelled  beyond  the  directions  issued  by

this Court.  Accepting the said objection, this Court called for a  specific

report to be  submitted  by  the  Accountant  General.  The  said  authority

submitted the report dated 02.07.2015 in pursuance of  this  Court’s  order.

The findings recorded in the report are to the following effect:-

“Report on Audit of “the accounts in respect of Kalyan Mandap and  23  shops

standing on the disputed area” in Barabati Stadium, Cuttack

1.    Scope of Audit

As per order dated 22 January 2015 of the Hon’ble Supreme Court of India  as

communicated vide letter No.D-446/14/XIA dated 24 January 2015 of  Assistant

Registrar of the Surpeme Court of India,  Accountant  General  (General  and

Social Sector Audit), Odisha was directed (22  January  2015)  by  the  Apex

Court to audit the accounts of 23 shops and the  Kalyan  Mandap  erected  on

0.705 acre parcel of disputed/encroached land.  Accordingly, one Report  was

filed in the Apex Court.  However, vide order dated 7  May  2015,  Honorable

Court directed to submit a specific and precise Report within eight weeks.

In compliance of above orders of Hon’ble Apex  Court,  Principal  Accountant

General (G&SSA), Odisha conducted audit of the accounts  of  OOA  during  30

January 2015 to 28 February 2015 and 8 to  12  June  2015  with  respect  to

income received by it by renting out the property  on  land  under  dispute.

This consists of 23 shops and one  Kalyan  Mandap,  known  by  the  name  of

Barabati Palace.  The latter was leased out to one private firm (M/s.  Incon

Associates) till full adjustment of cost of construction (Rs.80.47  lakh)[8]

out of 50 per cent of rent payable.

1.2   Introduction

The Government of Odisha in erstwhile Revenue Department  sanctioned  25.450

acre[9] land in favour of OOA, on lease, in three  different  phases  during

July 1949 to February 1969.  Out of 25.450 acre of land, an area  of  24.733

acre[10] was recorded in the name of OOA in 1988 settlement indicating  that

the Record of Rights (RoR) was valid upto 1989.  Out  of  the  above,  lease

period for 20.808 acre has  lapsed  in  September  1989  and  has  not  been

renewed so far and the matter is sub-judice[11] in  High  Court  of  Odisha.

Out of two other parcels of land  viz.  1.939  acre  and  2.703  acre,  land

measuring  1.222  acre  and  2.703   acre   settled   in   1988   settlement

respectively, has already been reverted back to government  khata[12].   Out

of the remaining 0.717  acre,  land  measuring  0.634  acre  remained  under

unauthorized occupation (encroachment) of  OOA  on  which  a  Kalyan  Mandap

(Barbati Palace)  and  23  shops  were  constructed  (1990-99)  Encroachment

case[13] was filed by the Tahsildar in 1990-91, but the matter has  remained

sub-judice (February 2015).

2.    Audit findings

Audit noticed that OOA started construction of  23  shops  on  the  disputed

land during 1990-91 out of its own resources, completed the construction  in

1995-96 at a cost of Rs.14.21 lakh and let  out  the  same  in  March  1996.

Further  it  permitted  construction  of  a  Kalyan  Mandap  by  M/s.  Incon

Associates, a private partnership firm, on the  disputed  land  in  1996-97.

OOA started receiving rent from the  23  shops  from  March  1996  and  from

Kalyan Mandap from January 1999.  List of proprietor of these 23  shops  and

their business activities is indicated in Annexure 1.

2.1   Levy and collection of rent from 23 shops and Kalyan Mandap

OOA could not produce counter-foils of money receipts  used  during  1995-96

to 2007-08, rent ledger for 1995-96 to 2003-04 and stated that  all  records

up to 2003-04 and all vouchers upto to 2007-08  had already  been  destroyed

instead it furnished to Audit a statement of rent due and  collected  during

the period from March 1996 to March 2004 in respect of Kalyan Mandap and  23

shops, which Audit has relied upon in absence of the  above  basic  records.

Further, during 2008-09 to 2013-14, though  money  receipts  were  produced,

however, rent collected by OOA  through  money  receipts  from  M/s.  Incon-

Associates towards Kalyan Mandap (Barabati Palace) was mixed  up  with  that

of Barbati Guest house (another building taken on hire from OOA by the  same

firm) due to which Audit had to rely on the rent ledger and  audited  annual

accounts.  Besides, cashbook was found (June 2015) to be not  written  after

31 March 2014.

2.1.1 Rent collected by OOA from 23 shops

As per the accounts certified by the Chartered Accountant and other  records

produced before Audit, OOA had earned revenue of Rs.55.35 lakh towards  rent

(Rs.52,52,788) and donation (Rs.2,82,100) from 23 shops  during  March  1996

to December 2014.  Out of this Rs.50,28,069  was  received  and  Rs.2,24,719

was outstanding  as  on  31  December  2014.   However,  full  donation  was

realized Shop wise rent  due,  received  and  outstanding  is  indicated  at

Annexure 2.

2.1.2. Rent due and collected by OOA from M/s. Incon Associates  for  Kalyan

Mandap (Barabati Palace)

As per the rent ledger,  during  January  1999  to  December  2014  rent  of

Rs.41,99,174[14] was due to OOA towards  rent  of  Kalyan  Mandap  (Barabati

Palace).  Out of this, rent of Rs.13,28,470 was received by  OOA  from  M/s.

Incon  Associates,  Rs.21,51,809  was  adjusted[15]  towards  the  cost   of

construction as per the agreements while  Rs.5,24,439  remained  outstanding

as of 31 March 2014.  During April to December 2014, Rs.2,57,816  was  shown

as collected by OOA in the rent  ledger  but  the  same  included  rent  for

Barabati Palace and other dues for  which  actual  rent  paid  for  Barabati

Palace could not be ascertained by Audit as annual accounts of OOA for 2014-

15 has not been finalized (June 2015).

Rent due, collected and adjusted by OOA from Barabati Palace during  January

1999 to December 2014 are indicated at Annexure 3.

Thus, OOA had earned a revenue of Rs.97.33 lakh during  1996-97  to  2014-15

(upto December 2014) by utilizing the property  i.e.  23  shops  and  Kalyan

Mandap (Barabati Palace) lying on the disputed land.

2.1.3  Difference in income as per the accounts  of  M/s.  Incon  Associates

and by the new management (Collector, Cuttack)

M/s. Incon Associates earned revenue amounting  to  Rs.2.44  crore[16]  from

Barabati Palace towards booking charges for different events during  January

1999 to December 2014[17] as per records produced by it.

At the direction of the Honorable High Court  of  Odisha/Honourable  Supreme

Court of India, the management of Barabati Palace  was  taken  over  by  the

District Collector, Cuttack during the period from 30 November  2014  to  12

December 2014 and then from 24 January 2015.

Audit attempted to make a comparison of net earnings  from  Barabati  Palace

under both the managements and noticed that  in  the  books  of  M/s.  Incon

Associates though income relating to Barabati Palace  was  shown  distinctly

however,  expenditure  incurred  thereon  was  not  shown  in  its  accounts

separately but mixed with other business like running Barabati Guest  House,

Barabati Palace and Catering.

However, as per certified  financial  statements  for  2007-08  to  2013-14,

total income of M/s. Incon  Associates  from  Barabati  Palace  was  Rs.1.71

crore.

Present management (i.e. Collector, Cuttack from  30  November  2014  to  12

December and  then  24  January  2015  onwards)  confirmed  that  they  were

charging Rs.70,000 plus service tax per social  events  up  to  18  February

2015 and Rs.80,000 plus service tax thereafter  and  78  bookings  had  been

made with collection of booking charges of Rs.77.50 lakh during same  period

and incurring expenditure of Rs.2.61 lakh within about five  months  (up  to

May 2015).  This indicated that Barabati Palace  had  more  revenue  earning

potential than that disclosed in the accounts of M/s. Incon Associates.

2.1.4 Advance rent collections payable to  the  District  Administration  by

M/s. Incon Associates

M/s. Incon Associates vide letter No. Nil dated 2  December  2014  intimated

that during the first phase (i.e. from  30  November  2014  to  12  December

2014) of taking over of the charge of the  Kalyan  Mandap  by  the  District

Administration, the mandap was booked by nine (9) persons and an  amount  of

Rs.1.86 lakh was collected by it as per the details furnished below :

(Source: Information furnished by the Manager, Barabati Palace)

As the hiring charges of the Mandap was  Rs.70,000  per  day,  the  District

Administration collected an amount of Rs.4.45 lakh from the users of  Kalyan

Mandap.   Similarly,  Collector  also  collected  Rs.1.20  lakh  on  advance

booking of said mandap during the period when management remained with  M/s.

Incon Associates.  However, the differential amount of Rs.0.66 lakh  due  to

the District Administration has not been deposited by M/s. Incon  Associates

(June 2015).  Besides,  service  tax  amounting  to  Rs.90,000  was  neither

collected from the concerned users  by  the  Collector  nor  by  M/s.  Incon

Associates.

2.2.  Accounting issues

2.2.1 Accounting of 23 shops in OOA records

The OOA constructed 23 shops out of its own sources during 1990-91 to  1995-

96 at a cost of Rs.14.21 lakh.  Since  OA  could  not  provide  vouchers  in

support of such expenditure, Audit relied upon the balance appearing in  the

Annual Accounts and Ledgers and noticed that:

In  the  accounts  of  OOA,  expenditure[18]  incurred  towards  repair  and

maintenance relating to 23 shops were clubbed  with  repair  maintenance  of

other civil structures  like  stadium,  office  building,  etc.   Similarly,

separate metering and billing for electricity charges upto  2004-05  for  23

shops was  not  done.   Therefore,  identification  of  expenditure  against

receipts from 23 shops standing on disputed/encroached  land  could  not  be

possible in Audit.

2.2.2  Accounting of Kalyan Mandap (Barabati Palace) in OOA records

Audit examined the annual accounts of both  OOA  relating  to  the  Barabati

Palace and M/s Incon Associates running the Barabati Palace (as produced  by

them) and noticed that:

OOA accounted for Rs.80.47 lakh being construction cost of  Barabati  Palace

and other installations (plant and machinery) as its own  asset  in  1998-99

(Rs.57.66 lakh) and 2000-01  (Rs.22.81  lakh)  and  booked  matching  amount

under liabilities as Deposit (accrual of  assets  against  self-construction

of buildings) received from M/s. Incon Associates, as cost  of  construction

was not met by OOA.

In the annual accounts of OOA for the period 1999-2014, Audit  noticed  that

a sum of Rs.21,51,809 being 50 per cent of rent  received  from  M/s.  Incon

Associates was adjusted  from  Deposit  (accrual  of  assets  against  self-

construction of buildings) head.

Though said Kalyan Mandap building was constructed on  disputed  land,

accounting the same as a permanent asset of OOA in its  account  was,  thus,

irregular as per Accounting Standard (AS 10)

Besides, said asset (Building: Rs.61.35 lakh) was not capitalized  based  on

expenditure incurred but on estimated  construction  cost  and  so  did  not

represent the actual cost of the building.   OOA  also  irregularly  charged

depreciation for Rs.26.45 lakh during 2003-04 to 2013-14 on  said  building,

even  though  title  of  the  land  was  disputed.   Besides,   M/s.   Incon

Associates, the lessee of  Barabati  Palace,  incurred  expenditure  towards

repair and maintenance as  well  as  electricity  charges  of  the  Barabati

Palace.

2.2.3.      Non-reconciliation  of  accounts  between  OOA  and  M/s.  Incon

Associates

As per terms of agreement with M/s. Incon Associates, 50  per  cent  of  the

rent in each month was to be adjusted towards construction cost of  Barabati

Palace.  In the accounts of OOA,  while  cost  of  construction  was  booked

under fixed assets to be reduced by depreciation each year, in the  accounts

of M/s. Incon Associates, same was shown  under  current  assets,  loan  and

advances (OOA account) till 2006-07 to be reduced by 50  per  cent  of  rent

payable each year.  Investment in Barabati Palace was distinctly shown  from

1999-2007 in the accounts of M/s. Incon Associates, but thereafter the  same

was mixed with other investments due to which amount of investment  made  in

Barabati Palace alone could not be ascertained in Audit.  During  1999-2007,

OOA adjusted Rs.11.79 lakh in its account whereas M/s. Incon Associates  had

shown adjustment of Rs.13.76 lakh during the  same  period  as  detailed  at

Annexure 4.  The difference of Rs.1.97 lakh was not reconciled (June  2015).

2.2.4  Accounting  of  Kalyan  Mandap  (Barabati  Palace)  in  the  accounts

of M/s. Incon Associates

Working results and financial position of M/s. Incon Associates (as per  its

Annual Accounts from 1999-00 to 2013-14[19])  revealed  that  it  had  three

different businesses viz. letting out of  Barabati  Palace,  Barabati  Guest

House and Catering. Expenditure relating to Barabati Palace alone could  not

be  assessed  as  expenses  of  all  businesses  were  clubbed.    Moreover,

following records could not be produced to Audit:

Cash books from 1998-99 to 2009-10;

Booking and Collection Register from 1999-00 to December 2014;

Money Receipts from 1999-00 onwards;

Bill Copies from 1999-2000 to 2009-10;

Bill Register;

Tariff charges of Kalyan Mandap with detailed break-up.

Hence, accounts of M/s. Incon Associates could not be relied upon by Audit.

2.3   Absence of requisite due diligence in fixing revenue share

2.3.1.      High payback period

The details of rent structure for Kalyan Mandap as agreed in the  agreements

and adjustments to be done for cost of construction is  indicated  in  table

below:-

|Sl. |Features of    |1st       |2nd       |3rd       |4th       |

|No. |agreement      |Agreement |Agreement |Agreement |Agreement |

|    |               |dated 9   |dated 24  |dated 20  |dated 28  |

|    |               |July 1996 |April 1998|July 1998 |March 2002|

|1   |Cost of        |10.00 lakh|25.00 lakh|40.00 lakh|80.47 lakh|

|    |construction   |          |          |          |          |

|    |permitted (Rs.)|          |          |          |          |

|2   |Monthly rent   |10,000    |15,000    |17,000    |21,000    |

|    |payable (Rs.)  |          |          |          |          |

|3   |Whether prior  |Yes       |No        |No        |No        |

|    |approval of    |          |          |          |          |

|    |General Body   |          |          |          |          |

|    |taken?         |          |          |          |          |

|4   |Rent as        |1.00      |0.6       |0.425     |0.26      |

|    |percentage of  |          |          |          |          |

|    |capital        |          |          |          |          |

|5   |Provision for  |No        |No        |No        |Five (5)  |

|    |revision of    |provision |provision |provision |per cent  |

|    |rent           |          |          |          |increase  |

|    |               |          |          |          |once in   |

|    |               |          |          |          |three     |

|    |               |          |          |          |years     |

|6   |Amount per     |50 per    |50 per    |50 per    |50 per    |

|    |month to be    |cent of   |cent of   |cent of   |cent of   |

|    |adjusted by OOA|monthly   |monthly   |monthly   |monthly   |

|    |towards cost of|rent      |rent      |rent      |rent      |

|    |construction as|          |          |          |          |

|    |reflected in   |          |          |          |          |

|    |advance deposit|          |          |          |          |

|    |account of M/s.|          |          |          |          |

|    |Incon          |          |          |          |          |

|    |Associates     |          |          |          |          |

|7   |Actual cash    |5,000     |7,500     |8,500     |10,500    |

|    |inflow per     |          |          |          |          |

|    |month to OOA   |          |          |          |          |

|    |after          |          |          |          |          |

|    |adjustment     |          |          |          |          |

|    |towards        |          |          |          |          |

|    |construction   |          |          |          |          |

|    |(Rs.)          |          |          |          |          |

|8   |Tenure of      |Till      |Till      |Till      |Till full |

|    |agreement      |adjustment|adjustment|adjustment|adjustment|

|    |               |of cost of|of cost of|of cost of|of cost of|

|    |               |constructi|constructi|constructi|constructi|

|    |               |on in full|on in full|on in full|on        |

|    |               |or 17     |or 28     |or 28     |          |

|    |               |years     |years     |years     |          |

|    |               |whichever |whichever |whichever |          |

|    |               |is earlier|is earlier|is earlier|          |

|9   |Date from which|1-Dec-1997|1-Dec-1998|1-Dec-1998|1-Apr-2002|

|    |agreed rent was|          |          |          |          |

|    |payable        |          |          |          |          |

(Source: Information furnished by the Manager, Barabati Palance)

As can  be  seen  from  the  table,  M/s.  Incon  Associates  kept  on

increasing the cost of construction and OOA regularized the  expenditure  by

signing agreements without prior approval of General  Body.   The  rent  was

not increased commensurate  with  the  incerease  in  construction  cost  as

reflected above by ratio between rent agreed and cost of construction.   OOA

could not produce any record to justify the basis of determination  of  such

monthly rent.  As per agreement (July 2002) 50 per cent  of  rent  would  be

adjusted towards expenditure incurred on construction of said Kalyan  Mandap

and so full adjustment of cost of construction would have happened after  47

years in 2044 (Annexure 5).

2.3.2.      Arbitrary fixation of rent for Kalyan Mandap: Actual rent vis-a-

vis fair rent

Revenue sharing is a major bidding parameter  to  ensure  that  the  parties

willing to share the highest revenue  would  get  selected.   Audit  noticed

that, OOA did not exercise any due diligence for revenue  sharing  like  the

actual income stream of the private partner from  utilizing  this  building,

mutually acceptable level of Internal Rate of Return  (IRR)  and  fixing  of

minimum reserve percentage of revenue share etc.  Rather, it seemed to  have

fixed the annual rent arbitrarily without examining the anticipated  revenue

earning.

Since competitive bidding was not followed while  entering  into  agreements

with M/s. Incon Associates, Audit  compared  the  actual  rent  charged  for

Barabati Palace with ‘Fair Rent’ which is  prescribed  in  Paragraph  4.1.14

read with Annexure XIII  of  Orissa  Public  Works  Department  (OPWD)  Code

Volume II.  Government hires private buildings at such rate.

Audit got the fair rent of such shops and kalyan  Mandap  (Barabati  Palace)

calculated (February-March 2015) by the  competent  authority  and  compared

the same with rent fixed in  the  agreement  which  is  indicated  in  table

below:

Statement showing comparison of actual rent charged versus  fair  rent  from

1999 to 2014 for Barabati Palace:-

|Year   |Actual Rent       |Fair Rent (Rs.)|Difference    |

|       |Fixed (Rs.)       |               |(Rs.)         |

|1999   |2,40,000          |8,32,728       |5,92,728      |

|2000   |2,49,000          |8,32,728       |5,83,728      |

|2001   |2,52,000          |8,32,728       |5,80,728      |

|2002   |2,40,000          |8,88,480       |6,48,480      |

|2003   |2,52,000          |8,88,480       |6,36,480      |

|2004   |2,52,000          |8,88,480       |6,36,480      |

|2005   |2,52,000          |8,66,400       |6,14,400      |

|2006   |2,64,600          |8,66,400       |6,01,800      |

|2007   |2,64,600          |8,66,400       |6,01,800      |

|2008   |2,64,600          |14,10,120      |11,45,520     |

|2009   |2,74,500          |14,10,120      |11,35,620     |

|2010   |2,77,800          |14,10,120      |11,32,320     |

|2011   |2,77,800          |22,13,184      |19,35,384     |

|2012   |2,88,213          |22,13,184      |19,24,971     |

|2013   |2,91,684          |22,13,184      |19,21,500     |

|2014   |2,91,684          |41,49,684      |38,58,000     |

|Total  |39,92,481         |2,19,49,692    |1,79,57,211   |

(Source: Fair rent furnished by R & B and  rent  charged  as  per  agreement

with M/s. Incon Associates)

Thus, it is evident from the above comparison that the  rent  structure  was

not fixed rationally keeping in view the  cost  of  land,  cost  of  capital

investment, the market rent accruable, time value of money, rate  of  return

and the payback period.  Even in 2002, when the last agreement  was  signed,

rent fixed was substantially below the fair  rent.   Over  the  years,  fair

rent has increased substantially but rent charged by OOA has only  increased

marginally.”

45.   Keeping in view the aforesaid report, it was observed:-

“From the aforesaid report, the differential sum that comes  into  existence

is  Rs.1,79,57,211/-  (Rupees  one  crore  seventy  nine  lac,  fifty  seven

thousand two hundred and eleven only).  Certain documents have been  annexed

in support of the report.  A copy of the report  has  been  handed  over  in

Court to Mr. Raghvendra Srivastsa, learned counsel for the  petitioner.   It

is open to the petitioner to file an  objection  to  the  same  within  four

weeks hence.

46.   The appellant has filed an expert opinion on the Accountant  General’s

Report II. The said report is by Shri Haraprasad Das, an  expert  who  is  a

former Additional  Deputy  Comptroller  and  Auditor  General,  Former  Vice

Chairman and Acting Chairman State Administrative Tribunal, Odisha.  As  per

Shri Das, the report of the Accountant General is wrong and the reasons  for

saying so are below:-

“Para 2.3.1

The calculation and  the  projection  up  to  2044  is  wrong.  The  correct

position is worked out below.  It would be seen there from that  the  Kalyan

Mandap (Barabati Palace) would be wholly owned OOA by  2026  i.e.  after  11

years.  The  decision  of  the  OOA  Executive  Council  has  proved  highly

rewarding as OOA has acquired the property without any  capital  investment.

The gain to OOA is huge in real terms.

In regard to fixation of rent it is pointed out that OOA had  only  given  a

piece of land to  Incon  and  rent  was  for  the  land.   As  the  cost  of

construction was to be capitalized  eventually by OOA, it is not  understood

how increase in cost of  construction  would  have  warranted  proportionate

increase in rent.

The capital applied was that of Incon, so how would  OOA  charge  Incon  for

increased cost during the period of construction?   Audit  have  missed  the

essence of the Agreement. The agreement was for acquisition of asset by  OOA

created by Incon and not for sharing revenue.

The observations of the Audit are wrong and are far from  facts.  Audit  had

not gone through the  arrangements  entered  into  from  time  to  time  and

subsequent correspondence.  In all the arrangements  it  is  mentioned  that

the vacant land is given for construction of  Kalyan  Mandap  on  the  terms

that the period of lease is 28 years or till the adjustment  of  the  amount

of expenditure of Rs. 80,47,157/- incurred on construction of Kalyan  Mandap

out of rent  payable  whichever  is  earlier.  Audit  has  referred  to  the

Agreement dated 18.3.2002 and the calculation has been made on  that  basis.

Audit has not referred to the  corrigendum  issued  immediately  after  that

providing the lease period of 28 years, agreed to by both parties.

Hence the maximum tenure of license is 28 years only. The  payback  schedule

for 28 years is as follows:

|Year |Period     |Rent     |Rent      |Rent to be|Cumulative |

|     |           |payable  |receivable|adjusted  |rent       |

|     |           |per month|during the|as per    |adjusted   |

|     |           |         |year as   |agreement |           |

|     |           |         |per       |          |           |

|     |           |         |agreement |          |           |

|1    |Jan-Mar    |20,000   |60,000    |30,000    |30,000     |

|     |1999       |         |          |          |           |

|2    |1999-2000  |20,000   |2,40,000  |1,20,000  |1,50,000   |

|3    |2000-2001  |20,000   |2,40,000  |1,20,000  |2,70,000   |

|4    |2001-2002  |20,000   |2,40,000  |1,20,000  |3,90,000   |

|5    |2002-2003  |21,000   |2,52,000  |1,26,000  |5,16,000   |

|6    |2003-2004  |21,000   |2,52,000  |1,26,000  |6,42,000   |

|7    |2004-2005  |21,000   |2,52,000  |1,26,000  |7,68,000   |

|8    |2005-2006  |22,050   |2,64,600  |1,32,300  |9,00,300   |

|9    |2006-2007  |22,050   |2,64,600  |1,32,300  |10,32,600  |

|10   |2007-2008  |22.050   |2,64,600  |1,32,300  |11,65,200  |

|11   |2008-2009  |23,152   |2,77,824  |1,38,912  |13,04,112  |

|12   |2009-2010  |23,152   |2,77,824  |1,38,912  |14,43,024  |

|13   |2010-2011  |23,152   |2,77,824  |1,38,912  |15,81,936  |

|14   |2011-2012  |24,310   |2,91,720  |1,45,860  |17,27,796  |

|15   |2012-2013  |24,310   |2,91,720  |1,45,860  |18,73,656  |

|16   |2013-2014  |24,310   |2,91,720  |1,45,860  |20,19,516  |

|17   |2014-2015  |25,525   |3,06,300  |1,53,150  |21,72,666  |

|18   |2015-2016  |25,525   |3,06,300  |1,53,150  |23,25,816  |

From the above  table  it  would  be  seen  concluded  that  only  Rs.

39,99,786/- would be adjusted by the time license expires.  In other  words,

Orissa Olympic Association would receive rent of Rs. 39,99,786/- during  the

tenure of license (being 50% of the rent) and the building  at  the  end  of

the license period. The present value of the developed property  (calculated

till financial year 2015-16) is Rs. 2,38,31,773/- based on the indexed  cost

prescribed by the Central  Government  under  Income  Tax  Act,  1961.   The

indexed  value  of  the  construction  at  the  end  of  28  years  will  be

approximately doubled, i.e. Rs. 4,76,63,546/- considering  the  increase  in

index cost from year to year.  The calculation of indexed cost  of  property

is as follows:

Details of amount spent on construction of Kalyan Mandap are as follows:

|Financial |Amount   |Index for  |Index   |Indexed    |

|Year      |spent    |the said   |for the |cost of    |

|          |         |financial  |financia|constructio|

|          |         |year       |l year  |n          |

|          |         |           |2015-201|           |

|          |         |           |6       |           |

|1998-1999 |57,66,207|351        |1081    |1,77,58,603|

|2000-2001 |22,80,950|406        |1081    |60,73,170  |

Besides, if it is assumed that the licensee had kept  the  amount  spent  on

construction in bank as fixed deposit at the rate  of  interest  of  8%  per

annum  (Quarterly  Compounded),  then  the  Incon   would   have   got   Rs.

5,74,22,569/- after the expiry of 28 years.  In  other  words  the  cost  of

license to the  license (Incon) for 28  years  is  Rs.  6,54,69,355/-  (Rent

Paid + Interest Lost + Unadjusted cost of construction) which comes  to  Rs.

1,94,849/- per month.  The licensee has borne the burden  and  the  OOA  has

become the final beneficiary. This would show that no favour  was  shown  to

INCON.

Para 2.3.2

Revenue sharing was not a bidding parameter, firstly because  there  was  no

bidding and secondly because OOA did not contemplate  revenue  sharing  when

it rented out the vacant a piece of land. The presumptions of Audit  are  ab

initio wrong.

Audit has presumed that a constructed building was rented out to  Incon  and

therefore the OPWD fair rent  standard  was  to  be  applied.  Actually  the

vacant land was leased out at Rs.  1.18  per  sq  ft  which  was  marginally

increased periodically. The rent per sq ft was arrived at on  the  basis  of

fair rent prevailing for vacant land, without  any  intention  of  profiting

from rent. The real intention was to gain through acquisition of asset.

It would be seen  from  the  previous  paragraph  that  the  index  cost  of

construction till date works out to Rs.  2.38  crores  which  would  further

increase by the time the license would expire (2025-26). The index  cost  at

that point of time would be Rs. 4.76 crores.

The superficial calculation done erroneously by  audit  is  required  to  be

wholly rejected. The presumed loss on rent differential Rs. 1.79  crores  is

therefore without any basis.

In sum:

The Principal Accountant-general has audited  the  accounts  of  the  Odisha

Olympic Association again as directed  by  the  Hon’ble  Supreme  Court,  to

verify if the income by way of rent earned by the  OOA  from  23  shops  and

Kalyan Mandap have been duly accounted for.

Audit has confirmed (Para 2.1.2) that OOA had earned revenue  of  Rs.  97.33

lakhs by way of rent from 23 shops and Kalyan Mandap and that  amounts  have

been duly accounted for by OOA in its books. Hence there is  no  defalcation

or non accounting of rental income.

Audit has erred in telescoping the payback period up to 2044. The  agreement

provided for maximum lease tenure of 28 years. Thus the lease would be  over

by 2025-26. OOA would come to acquire the property  index-valued  at  around

Rs. 4 crores without spending a rupee. The arrangement is loaded  in  favour

of OOA and not Incon.  For Incon it is bad business and  for  OOA  it  is  a

crowning success.

Comparison between actual rent charged and fair rent as determined by  Roads

and buildings is not tenable as R & B rent is far constructed space.

Thus the Audit Report (II)  establishes  the  contention  of  OOA  that  the

revenue accounting of OOA is aboveboard. In so far as the incorrect  finding

of Audit regarding the revenue potential of the Kalyan Mandap is  concerned,

we have shown how there has been a gain in real terms for  OOA  while  Incon

has suffered huge loss. Therefore there is no question of any concession  or

favour done to Incon.”

47.  On a perusal of the objection, it is  noticeable  that  Shri  Das  has

opined that the auditor has not gone through  the  agreements  entered  into

from time  to  time  and  subsequent  correspondence  wherein  it  has  been

mentioned that vacant land is given for construction  of  Kalyan  Mandap  on

the term that the period of lease is 28 years or till the adjustment of  the

amount of expenditure of Rs. 80,47,157/- incurred  on  construction  of  the

Kalyan Mandap out of  rent  payable  whichever  is  earlier.   He  has  also

referred to the pay back schedule and observed that  the  association  would

receive rent of Rs. 39,99,786/- during the tenure of licence (being  50%  of

the rent) and the building period.   The  present  value  of  the  developed

property (calculated till the financial year 2015-16) is  Rs.  2,38,31,773/-

based on the indexed cost prescribed by the  Central  Government  under  the

Income Tax  Act,  1961.   Additionally,  he  has  observed  that  Audit  has

confirmed that OOA had earned revenue of Rs. 97.33  lakhs  by  way  of  rent

from 23 shops and Kalyan Mandap and those amounts have been  duly  accounted

for by OOA in its books.  Hence, there is no defalcation  or  non-accounting

of rental income.  Shri Das has opined that the  association  would  acquire

the property indexed-valued at around Rs.  4  crores  without  spending  any

amount.

48.   We have accepted the report submitted by the Committee headed  by  the

District Judge, Cuttack. 23 shops are situated on the  Government  land  and

part of the Kalyan Mandap is also situated on  the  Government  land.   This

makes it quite  clear  that  the  association  has  raised  construction  by

encroaching  upon  the  Government  land  and  the  expert  engaged  by  the

association gives the opinion that Rs. 97.33 lakhs by way of rent  had  been

earned.   There is a lot of  gap  between  the  figure  arrived  at  by  the

Accountant General of Orissa on the basis of the market rent and the  figure

arrived at by the expert.  That apart,  the  State  has  shown  the  revenue

generated after it was handed  over  to  it  which  indubitably  shows  that

either the 23 shops were given on lower rent and  similarly,  Kalyan  Mandap

had been let out at a very low price or there had  been  collusion  to  show

lower receipt though actually there was  high  collection  on  rents.   This

would require investigation.

49.   The controversy does not  end  here.   In  earlier  proceedings,  this

Court had noted about the induction of the son-in-law of the Secretary as  a

partner in the firm M/s Incon Associates that  has  entered  into  agreement

with the association. He might have been inducted at a  later  stage.  There

was also allegation that the son and son-in-law are also partners.  In  such

a situation, the conflict of interest arises.

50.   Objections have been filed to the said  report.   As  per  the  report

submitted by the CAG and the revenue generation of the State, it is  crystal

clear that it is incumbent to look at how and under what  circumstances  the

agreements were entered into at a low rate  and  what  amount  was  actually

collected and what happened to the said sum.  It has to  be  borne  in  mind

that the revenue has been generated by constructing on the  government  land

and profit has been earned from the same.  That  warrants  further  scrutiny

and investigation.

51.   Another  aspect  which  cannot  be  ignored  relates  to  conflict  of

interest.   Vide order dated 9.3.2016, this Court had  noted  that  the  son

and son-in-law of Mr.  Asirbad  Behera,  General  Secretary  of  the  Orissa

Olympic Association, were partners.     In this regard, we may  refer  to  a

two-Judge bench decision in  Board  of  Control  for  Cricket  in  India  v.

Cricket Association of Bihar and others[20] wherein the Court,  taking  note

of the finding of the probe committee,  has  held  that  serious  issues  of

conflict of interest adversely affects the  game  of  Cricket  which  is  so

popular in this county. It is bound to shake the confidence  of  the  public

in general.  The said finding was recorded in the context of the affairs  of

the BCCI.  The concept of  conflict  of  interest  is  well  established.  A

person who is accountable to the public and deals  with  public  affairs  is

not expected, as required under the law, to have any personal  interest.  He

is not to act in a manner where it is  perceived  that  he  is  directly  or

indirectly the beneficiary; or for that matter, extends  the  benefit  to  a

person of immediate proximity. In this context, we may usefully reproduce  a

passage from the  authority  in  Board  of  Control  for  Cricket  in  India

(supra):-

“BCCI is a very  important  institution  that  discharges  important  public

functions. Demands of institutional  integrity  are,  therefore,  heavy  and

need to be met suitably in larger public interest. Individuals are birds  of

passage while institutions are forever. The expectations of the millions  of

cricket lovers in particular and public at large in  general,  have  lowered

considerably the threshold of tolerance  for  any  mischief,  wrongdoing  or

corrupt practices which ought to be weeded out of the  system.  Conflict  of

interest is one area which appears to have led to the current confusion  and

serious misgivings in the public mind as to the  manner  in  which  BCCI  is

managing its affairs”.

52.   In this regard, reference to the authority in V.C.  Rangadurai  v.  D.

Gopalan and others[21] is seemly.  In the said case, it has been  held  that

where an advocate finds that there would be conflict of interest  in  taking

up a case of his client, he should not  accept  the  brief  of  such  client

against the interest of his earlier client.   Though it  has  been  rendered

in the context of misconduct of an advocate, yet the concept of conflict  of

interest has been lucidly set out therein.

53.   In Noratanmal Chouraria v. M.R. Murli and another[22],  while  dealing

with the aspect of misconduct of an advocate under the Advocates Act,  1961,

a three-Judge Bench laid down thus:-

“10. This Court in State of Punjab v. Ram Singh, Ex-Constable[23] noticed:

“5. Misconduct has been defined in Black’s Law Dictionary, 6th  Edn.  at  p.

999 thus:

‘A transgression  of  some  established  and  definite  rule  of  action,  a

forbidden act, a  dereliction  from  duty,  unlawful  behaviour,  wilful  in

character, improper or  wrong  behaviour,  its  synonyms  are  misdemeanour,

misdeed, misbehaviour,  delinquency,  impropriety,  mismanagement,  offence,

but not negligence or carelessness.’

Misconduct in office has been defined as:

‘Any unlawful behaviour by a public officer in relation  to  the  duties  of

his office, wilful in character. Term embraces acts which the  office-holder

had no right to perform, acts performed improperly, and failure  to  act  in

the face of an affirmative duty to act.’

Aiyar, P. Ramanatha: Law Lexicon, Reprint Edn.,  1987,  at  p.  821  defines

‘misconduct’ thus:

‘The term misconduct implies a wrongful intention, and not a mere  error  of

judgment. Misconduct is not necessarily the same thing as conduct  involving

moral turpitude. The word misconduct is a  relative  term,  and  has  to  be

construed with reference to the subject-matter and the context  wherein  the

term occurs, having regard to the scope of  the  Act  or  statute  which  is

being construed.  Misconduct  literally  means  wrong  conduct  or  improper

conduct. In  usual  parlance,  misconduct  means  a  transgression  of  some

established and definite rule  of  action,  where  no  discretion  is  left,

except  what  necessity  may  demand  and   carelessness,   negligence   and

unskilfulness are transgressions of some established, but  indefinite,  rule

of  action,  where  some  discretion  is  necessarily  left  to  the  actor.

Misconduct is  a  violation  of  definite  law;  carelessness  or  abuse  of

discretion  under  an  indefinite  law.  Misconduct  is  a  forbidden   act;

carelessness, a forbidden quality of an act, and is necessarily  indefinite.

Misconduct in office may be defined as unlawful behaviour or  neglect  by  a

public officer, by which the rights of a party have been affected.’

6. Thus it could be seen that the word ‘misconduct’ though  not  capable  of

precise  definition,  on  reflection  receives  its  connotation  from   the

context,  the  delinquency  in  its  performance  and  its  effect  on   the

discipline and the nature of the duty. It may involve  moral  turpitude,  it

must  be  improper  or  wrong  behaviour;  unlawful  behaviour,  wilful   in

character; forbidden act, a transgression of established and  definite  rule

of action or code of conduct but not mere error  of  judgment,  carelessness

or negligence in performance of  the  duty;  the  act  complained  of  bears

forbidden  quality  or  character.  Its  ambit  has  to  be  construed  with

reference to the subject-matter and the context  wherein  the  term  occurs,

regard being had to the scope of the  statute  and  the  public  purpose  it

seeks to serve. The police service is a disciplined service and it  requires

to maintain strict discipline. Laxity in this behalf  erodes  discipline  in

the service causing serious effect in the maintenance of law and order.”

(See also Probodh Kumar Bhowmick v.  University  of  Calcutta[24]  and  B.C.

Chaturvedi v. Union of India[25].)”

54.    We have referred to the aforesaid passages to highlight that when  an

administrator is discharging public function, he is also required  to  avoid

any type of conflict of interest. It has been so held in the case  of  Board

of Control for  Cricket  in  India  (supra).  Any  action  that  would  show

conflict of interest is a transgression  of  the  fundamental  principle  of

fair administration and governance.  It can be stated  with  certitude  that

the principle  of  rule  of  law  does  not  countenance  such  conflict  of

interest. It  is  clear  as  day  that  the  relationship  between  the  two

individuals and their different obligations  expose  conflict  of  interest.

It is an interest where one may abuse the public  office  to  gain  personal

benefit either directly or indirectly.  In the instant case, the son of  the

Secretary of the association is a partner in the firm that  had  been  given

the contract.  The son might have been inducted as  a  partner  at  a  later

stage but the fact  remains  that  the  father  was  the  Secretary  of  the

association.  In such a situation, it does not require Solomon’s wisdom  or,

for that matter, the wisdom of an adjudicator as described in “Tripitak”  to

understand that  there  is  conflict  of  interest.  The  Secretary  of  the

association, as it seems, had sent his conscience on vacation.

55.   In view of the foregoing analysis, we arrive at  the  conclusion  that

the suit land, whereon 23  shops  have  been  constructed  and  rented  out,

belongs to the State Government; that a  part  of  the  ‘Kalyan  Mandap’  is

built on the Government land and a portion of it on the  leasehold  area  of

the association;  that  the  association  could  not  have  constructed  the

‘Kalyan Mandap’ in this manner and,  therefore,  the  portion  of  the  land

deserves to be  resumed  by  the  State  Government;  that  the  arrangement

entered into by the association with M/s.  INCON  Associates  is  absolutely

illegal and there is a conflict of interest since the  Secretary’s  son  and

son-in-law have been inducted as partners in the concerned firm; that  there

is  revenue  loss  as  the  audit  report  of  the  Accountant  General   is

appreciated; that the Secretary of  the  association  could  not  have  been

instrumental in unauthorised construction on  the  government  land  and  in

generating revenue therefrom; that there is  a  serious  concern  about  the

nature of revenue generation utilisation and the loss  sustained;  and  that

the whole thing makes  us  feel  that  there  is  something  rotten  in  the

management of the affairs in fiscal aspects.

56.   Having so concluded, we issue the following directions:-

(i)   The Collector, Cuttack, shall take over possession  of  23  shops  and

the ‘Kalyan Mandap’.

(ii)  The Department of Revenue shall be entitled to  continue  the  tenancy

and maintain the Kalyan Mandap and manage the affairs of the  said  property

through District Collector, Cuttack.

(iii) No tenant or anyone shall be entitled to institute any  litigation  in

any manner in respect of the said property involved in this appeal that  has

arisen from T.S. No. 312 of 1991  instituted  in  the  Court  of  Additional

Civil Judge, Senior Division, Cuttack.

(iv)  The government, if it decides to manage  the  properties  by  entering

into fresh agreement, is at liberty to do so.

(v)   The agreement between the association and  M/s.  INCON  Associates  is

declared null and void.

(vi)  As the conflict of interest is  obvious  and  the  Secretary,  who  is

accountable to the public, has failed to conduct himself as  required  under

the law, he is debarred from contesting for any post in the association.

57.   Keeping in view the report of the Accountant  General  and  the  grave

doubt that emerges with regard to realisation of rent or  otherwise,  as  we

have  already  indicated  earlier,  there  has  to  be  investigation   and,

accordingly, it is directed that the Central Bureau of  Investigation  shall

investigate into the matter keeping in view the  report  of  the  Accountant

General and the other aspects which pertain  to  23  shops  and  the  Kalyan

Mandap.   If  anything  ancillary  is  required,  needless   to   say,   the

investigating agency can also look into those  aspects.    The  Registry  is

directed to hand over a copy of this order to Mr. P.K. Dey, learned  counsel

who ordinarily appears for the Central Bureau of Investigation.

58.   In view of the aforesaid premises, the judgment and  order  passed  by

the High Court remitting the matter as well as the judgment  and  decree  of

the trial court are set aside.  The conclusions  arrived  at  by  the  trial

court and the directions given by the High  Court  are  substituted  by  our

aforesaid conclusion and directions.  There shall be no order as regards  to

the costs of this appeal.

………………………..J.

[Dipak Misra]

………………………. J.

[Praffula C. Pant]

New Delhi;

April  3, 2017

———————–

[1]    AIR 2000 SC 3272

[2]    (2000) 5 SCC 652

[3]     (1982) 2 SCC 134

[4]     AIR 1996 Orissa 199

[5]     AIR 2014 Orissa 140

[6]     AIR 2002 Orissa 147

[7]     (1962) 2 SCR 753

[8]   Vide agreement dated 9 July 1996 (17 years) subsequently amended vide

agreement dated 24 April 1998 and 28 March 2002

[9]   Three (3) parcels of land measuring 20.808 acre, 2.703 acre and 1.939

acre.

[10]  0.717 acre out of 25.450 acre of land was not settled.

[11]  WP (C) No.5360/2002 and Misc. Case No.3999/2002

[12]  RP Case No.188/2003, Mutation Case No.1801/2004 (1.222 acre) and Vide

Misc. Case No.19/2002 (2.703 Acre)

[13]  Enroachment Case No.213/01/1990-91, Misc. Case 263/91 arising out of

T.S. Case No.312/91

[14]  Up to March 2014 Rs.40,04,718 and April to December 2014 Rs.1,94,456

[15]  The cost of construction was borne by the private party viz. M/s.

Incon Associates who adjusted fifty per cent of rent from monthly rent

towards cost of construction.

[16]  As per financial statement of M/s. Incon Associates for the years

1998-99 to 2013-14 (except 2000-01 and 2006-07 which were not produced to

Audit).  Moreover, money Receipts in respect of these receipts could also

not be furnished to Audit.

[17]  Excepting for 2000-01 and 2007-08 for which annual accounts were not

produced to Audit.

[18]  Export in one year i.e. 2005-06 when OOA spent Rs.76,700 for repair

and maintenance of one shop

[19]  2000-01 and 2007-08 were not furnished to Audit

[20]   (2015) 3 SCC 251

[21]   (1979) 1 SCC 308

[22]   (2004) 5 SCC 689

[23]   (1992) 4 SCC 54

[24]   (1994) 2 Cal LJ 456

[25]   (1995) 6 SCC 749

———————–

|Sl.|Date of|Name of  |Money |Advance |District |Amount |Total   |

|No.|functio|the User |Receip|Received|Adminsit-|receive|Collecti|

|   |n      |of Mandap|t No. |by      |ration   |d by   |on      |

|   |       |(S/Shri) |Of    |Manager,|money    |Distric|(in Rs.)|

|   |       |         |Baraba|Barabati|receipt  |t      |        |

|   |       |         |ti    |Palace  |number   |Adminis|        |

|   |       |         |Palace|(in Rs.)|         |tration|        |

|   |       |         |      |        |         |(in    |        |

|   |       |         |      |        |         |Rs.)   |        |

|1. |30-Nov-|Bibekanad|144   |20000   |86/672130|50000  |70000   |

|   |14     |a Swain  |      |        |         |       |        |

|2. |01-Dec-|Muna Jain|153   |21000   |86/672131|50000  |71000   |

|   |14     |         |      |        |         |       |        |

|3. |02-Dec-|R.K.     |159   |20000   |86/672143|50000  |70000   |

|   |14     |Mohapatra|      |        |         |       |        |

|4. |03-Dec-|Gyanaranj|147   |15000   |87/672155|55000  |70000   |

|   |14     |an Swain |      |        |         |       |        |

|5. |06-Dec-|S.S.     |154   |30000   |87/672157|40000  |70000   |

|   |14     |Sharma   |      |        |         |       |        |

|6. |07-Dec-|Sibu     |140   |10000   |87/672160|60000  |70000   |

|   |14     |Khuntia  |      |        |         |       |        |

|7. |09-Dec-|B C Rout |168   |20000   |87/672164|50000  |70000   |

|   |14     |         |      |        |         |       |        |

|8. |10-Dec-|Pragyan  |151   |30000   |87/672163|40000  |70000   |

|   |14     |Mohapatra|      |        |         |       |        |

|9. |12-Dec-|Jayanti  |117   |20000   |87/672159|50000  |70000   |

|   |14     |Rath     |      |        |         |       |        |

|   |       |TOTAL    |      |186,000 |         |445,000|631,000 |

———————–

101