SC grants compensation despite no quantification based on actual loss

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The Supreme Court of India, comprising a bench of Justice J. Chelameswar and Justice Sanjay Kishan Kaul has directed the Ministry of External Affairs to pay a compensation of Rs. 5 lakh to Private Tour Operators conducting the travel business for Hajj and Umrah.

The Supreme Court has directed compensation, despite the fact that there is no quantification based on actual loss in the present case. It is interesting to note that the award is being granted in the nature of damages in public law, for which it placed reliance on the judgment of Nilabati Behera v. State of Orissa, (1993) 2 SCC 746, wherein it was observed that,

“The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights.  Therefore, when the court molds the relief by granting ‘compensation’ in proceedings under Articles 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making ‘monetary amends’ under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights of the citizen….”

Having discussed the above case of Nilabati Behera, the Supreme Court observed,

“….it is a sound policy to punish the wrongdoer and it is in that spirit that the courts have molded the relief by granting compensation in exercise of writ jurisdiction. The objective is to ensure that public bodies or officials do not act unlawfully. Since the issue is one of enforcement of public duties, the remedy would be available under public law notwithstanding that damages are claimed in those proceedings.”

In the instant case, the petitioners, being Private Tour Operators for Hajj and Umrah, were wrongly not granted registration for the Hajj of 2016. According to the policy formed by the Government, applications from eligible Private Tour Operators (PTO) were called for registration for grant of Hajj group visas. There were two categories according to which the PTOs were bifurcated, wherein the first category included PTOs who were registered with MEA and facilitated Hajis at least for 7 Hajj operations or more and the second category included PTOs registered with MEA and facilitated Hajis for at least for 1 to 6 Haj operations and which have also facilitated at least 50 umrah pilgrims in a year for any five years. In the second category, if the number of eligible PTOs exceeds 90, the allocation of seats would be done by draw of lots. Furthermore, if a qualified PTO fails to get selected under the draw of lots in any year, it will be allocated 150 seats in the ensuing year without qurrah (computerized draw of lots). For the year 2016, the Saudi government had changed its policy whereby instead of 150 seats, 50 were to be allotted to PTOs who did not get selected in the draw of lots.

The petitioners, who belonged to the second category, were eligible but were not shortlisted by the draw of lots. The Ministry of External Affairs, had exempted all such PTOs who were not shortlisted by the draw of lots, to follow certain terms and conditions and had granted a relaxation for them. The petitioner PTOs, accordingly wrote to the MEA for allocation for the Hajj-2016 quota of 50 pilgrims. However, subsequently, the Ministry of External Affairs, rejected the application of the petitioner PTOs on the ground that they did not comply with the very clauses of which exemption had been granted to the petitioners. The petitioners, approached the court against this rejection by the MEA.

The Union of India submitted before the court that the reasons were wrongly communicated in the rejected letter and there were actually some other reasons for rejection, to which the respondent referred to a Constitution bench judgment of the Supreme Court titled Mohinder Singh Gill v. Anr. v. The Chief Election Commissioner, New Delhi & Ors which was upheld by the Supreme Court that such plea cannot be maintained. The Supreme Court observed,

“…. In para 8 of the aforesaid judgment, V.R. Krishna Iyer, J, in his inimitable style states as under:

“8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad inthe beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji:

“Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.

Orders are not like old wine becoming better as they grow older.”

12. The aforesaid legal position, thus, makes the stand of the respondent unsustainable, resulting in the quashing of the impugned letters of rejection.”

The Supreme Court then observed regarding granting compensation that,

“….The petitioners cannot be left remediless. The mindless action of the respondents in rejecting the eligibility of the petitioners for the year 2016 on the very grounds on which they were exempted necessitates that the petitioners should be entitled to damages in public law so that they are compensated, at least, to some extent for not having been able to carry on with their business on account of illegal action of the respondents.”

Thus, the Supreme Court finally observed that the compensation should be granted to the petitioners as they have been deprived of their right to secure the quota on a patently wrong order passed for reasons, which did not apply to them and for conditions, which had been specifically exempted. Nothing more could be a greater arbitrariness and illegality, and this is a violation of the principles enshrined under Article 14 of the Constitution of India. Hence, the Supreme Court observed that, in the present scenario, it is a fit case for grant of compensation. Further, the Supreme Court held that keeping in mind the number of pilgrims for whom the petitioners would have been entitled to arrange the Hajj pilgrimage, an amount of Rs. 5 lakh per petitioner would be an adequate compensation for the loss suffered by them and sub-serve the ends of justice. The Supreme Court granted the compensation despite the fact that there is no quantification based on actual loss, but then the award granted is in the nature of damages in public law. Further, the court directed that the money is to be paid within two months period failing which 15% interest would have to be paid. The court even held that the Union of India can recover the amount of damages and costs from the delinquent officers responsible for passing such unsustainable officers.

Click here to read the judgment.

About Alabhya Dhamija

Alabhya is an Advocate practicing at Delhi High Court and other courts in Delhi. Contact: alabhya@dhamija.com

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